AGCO net sales increased 6.9% during the last three months of 2016 to US$2.1 billion, and the company achieved total sales for the year of around US$7.4 billion – a decrease of approx. 0.8% compared to 2015. AGCO president and CEO Martin Richenhagen said last year was a challenging one due to continued weakening global market demand for agricultural equipment. “The record grain harvest in the US, combined with healthy crop production across Europe and Brazil, resulted in increased grain inventories and lower soft commodity prices,” he commented.
As a result, the company experienced softer industry equipment demand in all major markets. In North America, sales declines were most pronounced in the row crop and professional hay producer sectors, with significantly lower industry retail sales of high-horsepower tractors, combines and grain storage and handling equipment. “Industry retail demand declines from 2015 levels were less significant in Western Europe. Low milk prices for dairy producers lessened demand, while sales in the arable farming sector also remained weak due to lower commodity prices,” he added.
EAME (Europe/Africa/Middle East) net sales increased 3.5% last year when compared to 2015. The increase resulted from the benefit of acquisitions along with growth in the UK and Scandinavia and was offset by declines in Africa, Germany and France. The AGCO top man says a smaller wheat harvest hurt retail demand in France, especially in the second half of the year.
AGCO expects softer industry demand across North America and Europe this year to be partially offset by growth in South America, and the firm’s 2017 net sales are expected to remain at around US$7.4 billion.