In this episode of On the Record, brought to you by Associated Equipment Distributors, we look at AGCO’s plans for its precision business and its 2029 targets. In the Technology Corner, Noah Newman talks with Eis Implement’s precision team. Also in this episode, the interest savings dealers could see with the latest rate cut by the Fed and a look at the used 100+ horsepower tractor market.

 

On the Record is brought to you by Associated Equipment Distributors — the leading association in North America for the equipment distribution industry. Check out the upcoming 2025 AED Summit, the only industry event strictly dedicated to the equipment distribution industry, with 4 keynote speakers, over 40 industry specific education sessions, and over 200 exhibitors at www.aedsummit.com. Contact us at aedsummit@aednet.org for more information about how you can register for this event.

TRANSCRIPT

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• AGCO Targets $2 Billion Precision Ag Net Sales by 2029
• Dealers on the Move
• 3-Person Team Finds Winning Precision Formula for Single Store Dealer
• Fed Cuts Interest Rates by Another Quarter Point
• 100+ Horsepower Tractor Asking Values Trending Down
• DataPoint: U.S. Tree Farms Cut Over 14.5 Million Christmas Tress in 2022

AGCO Targets $2 Billion Precision Ag Net Sales by 2029

AGCO says it is outpacing the industry with its suite of precision ag solutions. Seth Crawford, senior vice president and general manager of AGCO’s PTx brand, laid out the company's journey to become the global industry leader in mixed fleet smart farming and autonomy solutions. 

The growth of the PTx portfolio is centered on:

• Innovating faster and better than competitors with 3-5 new products launched each year 
• Accelerating sprayer portfolio rollout
• Executing Connected Cloud strategy and globalizing the product portfolio
• Growing distribution by increasing full-line technology dealers, 
• Engaging new original equipment manufacturers (OEM)
• Increasing portfolio offerings to OEMs, including AGCO's leading brands of Fendt, Massey Ferguson and Valtra

Following the meeting, J.P. Morgan analyst Tami Zakaria noted that AGCO’s “R&D spend in precision ag is expected to remain at about 4% of sales over the intermediate term while AGCO intends to be opportunistic around inorganic growth as it looks to expand or add upon existing product offerings.” 

During the meeting, Crawford said AGCO is committed to its retrofit-first, brand-agnostic strategy, emphasizing the importance of mixed fleet solutions.

Zakaria says management remains confident that the “overall trajectory of growth remains unchanged, with strong potential for recovery and continued market leadership.” 

Dealers on the Move

This week’s Dealers on the Move include Premier Equipment and Claas Farmpoint. 

John Deere dealership group Premier Equipment has acquired Hutchinson Farm Supply in Stouffville, Ont. This will be the 9th location for Premier. 

Claas announced it is adding a new Farmpoint location in Webster County, Iowa. The company has signed a lease agreement for a temporary location in Barnum, Iowa, while they work on a permanent location targeting the I-35 corridor. 

3-Person Team Finds Winning Precision Formula for Single Store Dealer

This week, we’re catching up with the precision team at Eis Implement, a John Deere dealer in Two Rivers, Wis. The leaders of the department give us the inside scoop on what it takes for a precision team to be successful at a single store dealership.  

“My name is Phil Davister. I’m one of the precision ag specialists here. I’ve been in this role for 7 years now. Overall, I’ve been with the company for 10 years, started on the parts counter, and once the department got bigger, I came on board.” 

“I’m Eric Hagenow. I’ve been with Eis Implement for 10 years. I started the precision ag department here. I’m technically the Precision Ag Manager. We can keep 3 guys busy between February and May. All 3 of us will have more than we can handle in those 3 months. Then with us doing tile plow work and some of the iron that we get involved with — tractor sales — it’s grown quite a bit.” 

“We’re pretty much the salesman, the parts guy, the service guy. From the first point of contact to the last installation, we’re the person that the customer deals with. What’s nice about our department is we help each other. It’s a team effort, not an individual effort. If somebody needs help in one area, it doesn’t matter where we are, we’re all over the place.” 

Catch more of our interviews with Phil and Eric on the Farm Equipment YouTube channel. 

Fed Cuts Interest Rates by Another Quarter Point

The Federal Reserve announced another key interest rate cut on Dec. 18, 2024. The latest cut lowered the rate by another quarter point. Since September, the Fed has now lowered rates by a full percentage point. 

Based on calculations that George Russell, a founding member of the Machinery Advisors Consortium, shared after the first cut in September, dealers can expect to see another $75,000 benefit on a floorplan debt of $30 million. With the 3 cuts in all, that would be a savings of $300,000 in annual interest. 

The Fed signaled it expects to reduce rates more slowly in 2025 than it previously thought, largely due to inflation remaining elevated. According to an AP report, the Fed's 19 policymakers project they will cut their benchmark rate by a quarter point just twice in 2025. Back in September they were estimating 4 rate cuts. 

100+ Horsepower Tractor Asking Values Trending Down

In our last episode we looked at the used combine market. This time we’re going to turn our attention to tractors with 100+ horsepower. The latest data from Sandhills and Tractor House shows inventory levels in this market have been trending upward for several months. 

And, that trend continued in November with inventory up 0.8% month-over-month. On a year-over-year basis, used 100+ horsepower inventory levels are up 23.5%. Sandhills observed the largest month-over-month increase in the 100-174 horsepower tractor range, up 1.34% and the largest year-over-year increase in the high horsepower tractor category, up 38.2%.

Asking values have been trending down for months and were down in November by 2.2% month-over-month and 6.4% vs. last year. The biggest drops were seen in high-horsepower tractors, down 2.6% vs. October, and 175- to 299-horsepower tractors, down 8.4% year-over-year.

Auction values were up about 0.2% month-over-month and down 14.4% year-over-year in November and are trending steady. 

The Sandhills Equipment Value Index spread fell to 44% in November (down from 47% in October), but that figure is still greater than the historic highs set in 2015.

DataPoint: U.S. Tree Farms Cut Over 14.5 Million Christmas Tress in 2022

This week’s DataPoint is brought to you by the Precision Farming Dealer Summit, Jan. 6-7 in Louisville, Ky. To register visit PrecisionSummit.com. 

According to the 2022 Census of Agriculture, about 550,000 fewer trees were cut in 2022 than during the previous agricultural census in 2017. With higher value of sales in 2022, however, U.S. Christmas tree growers sold $553 million in cut Christmas trees compared with $377 million in 2017. The U.S. also imported more than 3 million Christmas trees in 2022.

That’s it for On the Record this year! You can send comments and story suggestions to kschmidt@lessitermedia.com. From all of us at Ag Equipment Intelligence, may you and your family have a Merry Christmas and all the best in 2025! 

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