After several years of weaker demand, North America arable farmers have finally started to replace their equipment. There is a healthy demand for new sprayers and grassland machinery, and AGCO reckons industry retail sales of high HP tractors rose by 3% and combines by 15% during the first six months of this year.
The more positive mood boosted the company’s North American revenues by nearly 28% to US$1.1 billion during the first six months of this year (US$861 million same six months in 2017). The results also benefitted from last autumn’s acquisition of Precision Planting, which generated sales of around US$83 million during the first half of 2018.
The EME (Europe and Middle East) region continues to generate the highest proportion of AGCO revenues, which increased by over 25% to US$2.70 billion during the first six months of this year (US$2.16 billion same period in 2017).
Following a year of improved profitability in the arable and dairy sectors, tractor and machine sales increased slightly in Western Europe (Germany, France and the UK were responsible for most of the increase) during the first half of 2018. The company estimates a 1% increase in industry retail tractor sales and a 14% rise in combine volumes.
Healthy industry conditions in Western Europe and improved market demand in North America helped to offset the weak results in South America, which were down 15% to US$401 million.
Looking ahead to the rest of this year, AGCO predicts that industry retail tractor sales will increase modestly in North America, while demand in Western Europe is expected to be relatively flat compared to 2017. The concern’s 2018 net sales are forecast to reach US$9.3 billion