AGCO Corporation Jefferies Global Industrials Conference 2026
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Good morning, everybody. I think we're going here. Let's kick this off on day 2 of the Industrials Conference, the Jefferies Global Industrials Conference. Welcome. On behalf of Jefferies, I'm Stephen Volkmann. I cover a wide swath of industrial companies now. I guess that's what we do here. We're very pleased to kick off day 2 by welcoming AGCO to the dais. We have Eric Hansotia, who's the CEO, Indira Agarwal is the CFO, fairly newly minted, so go easy on her today. We're very pleased to welcome them. Greg Peterson is here as well to bat cleanup if necessary. We're going to run this like a fireside chat. We'll have a bit of an interview process here. We would welcome very much any questions from the field here.
If anybody has one, I'll come up for air in 10 or 15 minutes and give you an opportunity to chime in. With that, welcome. Thank you guys for coming.
Yeah. Thanks, Steve. Thank you.
Let's maybe kick it off. There seems to be a general improvement in attitude around agriculture, generally. We had a couple other companies here yesterday. I can't quite remember who they were, but they seem to be fairly upbeat, relative to this sort of cycle bottoming trend. Maybe let's just start off, Eric. What's your view of the cycle and where we are?
Yeah. We talked last year even that a lot of the fundamentals were setting themselves up to establish a bottom, and we're actually even expecting a little bit of recovery this year. With the Iran war, the bottom extended. What do we look at? We look at the age of the existing fleet in farmers' hands. It's as old as it's been. We've got the dealer inventories and used equipment down to target levels, so the pipeline is cleaned out. Now we're starting to see recovery in commodity prices for grains. There was a tension in the system of farmers wanting to buy, but they needed to have some profitability come back into the system. Now that the grain price is recovering, there's profitability.
I was just at Farm Progress Show last week talking to several hundred farmers and dealers, and the enthusiasm was like we haven't seen in several years. They were excited to be able to come back into the market, excited about a lot of the new technology that we've got, either on our products of Fendt and Massey Ferguson or our precision technology business, PTx. Now, we also think that it's predominantly a North America situation right now. It's much less positive in Brazil, and Europe is in the middle. Brazil's got some headwinds of high interest rates and an uncertainty around an election coming up with polar opposite candidates and uncertainty who's going to win.
Europe's in the middle. We don't have those polar opposites here, so that's not a problem.
That's fortunate for the U.S.
Maybe digging a little deeper, though, it seems like a lot of the improvement, in crop prices especially, has been driven by lower yields globally, which pose an interesting question, because they're going to get less volume, but they're going to get more price. But you believe the net is a positive outcome in that scenario?
Yeah, especially in the U.S. market, just because of the way the financial model works. The government contribution toward farming shows up mostly in subsidized crop insurance. And so most farmers have crop insurance. And that means that if I have a bad crop year, I've got crop insurance as a safety net below me, and I'll have an average or an okay outcome. If someone a little ways away from me has a good year, they're able to recognize the higher prices and good profitability. So a safety net for the losers, essentially, if you want to call it that, and the winners get to participate. So North America, with their high participation rate in crop insurance, really makes the most out of a market like this.
Okay. So there's a lot of questions and focus right now on what we might call early order programs or next season ordering, whatever you'd like to call it. Any updates for us relative to what you're seeing there?
Very early days on our early order programs, relative to our competition, we do not have as many customers that sign up for early order programs, so it is not as great of an indicator for us. But some of our competitors have spoken about what they are seeing, and our trends are similar. We are seeing stronger early order programs, and we think that is just one more signal that in the U.S. market, there is enthusiasm in the marketplace.
Okay. A Purdue index went up just a few days ago as well.
Yeah Which is a sentiment index of farmers and view of the future health of the industry.
So a lot of indicators are all pointing in the same direction.
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