Agco, the parent company of Fendt, Massey Ferguson and Valtra, net sales increased by nearly 11% in the third quarter of this year to approx. US$3.5 billion.

“Robust demand for our technology-rich products, driven by healthy crop production, favourable farm economics and an improving supply chain, generated record third quarter results,” stated Agco boss Eric Hansotia.

Mr Hansotia added that the focus on growing its precision ag business, globalizing a full-line of Fendt branded products and expanding its parts and service business, is generating strong growth and helping position the company for another record year (net sales of around US$10.6 billion in the first nine months of this year is more than a fifth higher than the same period in 2022).

Agco reports that global industry production and retail tractor sales were down modestly in the first nine months of this year compared to 2022’s elevated levels with lower sales of smaller equipment more than offsetting increased sales of larger equipment.

This was certainly the case in North America where weaker industry sales of smaller tractors were partially offset by the 10% increase in high-HP versions in the first nine months of 2023.

Increased sales of high-horsepower tractors, application equipment, and combines were primarily behind the 22% increase in Agco net sales to US$2.86 billion in the first nine months of this year (US$2.35 billion same period in 2022).

The combined Europe and Middle East regions always account for the lion’s share of the firm’s net sales, topping US$5.28 billion in the first nine months of 2023: up nearly a quarter on the US$4.26 billion booked in the same period in 2022.

The company estimates that industry retail tractor sales in Western Europe decreased approximately 2% in the first nine months compared to strong levels in the same period of 2022. Lower commodity prices and political uncertainty are making farmers more cautious, is the message.

Significant declines in Italy and Spain were mostly offset by higher industry sales in Germany, France and the UK. Farmer sentiment in the region continues to be negatively affected by the situation in Ukraine, and input cost inflation and full year retail tractor demand is expected to decline modestly compared to 2022.

The company reckons that industry retail sales for combines in Western Europe increased by around a third in the first nine months of 2023 (2022 was affected by supply chain constraints).

Agco’s South American net sales increased by a quarter in the first nine months of 2023 to US$1.82 billion (US$1.44 billion same period 2022). Strong growth in Brazil drove most of the increase where the company sold more high horsepower and higher margin tractors and Momentum planters.

Looking ahead, the company expects full year net sales to be around US$14.7 billion. Gross and operating margins are projected to improve from 2022 levels, reflecting the impact of higher sales and production volumes as well as pricing and a favourable sales mix.

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