Original equipment manufacturer (OEM) AGCO is pushing past the last year of volatility to tee up growth in Brazil and technology services, Damon Audia, senior VP and CFO for AGCO, shared during the Raymond James 47th Annual Institutional Investors Conference.
The maker of Fendt, Massey Ferguson, and Valtra equipment, AGCO projects that this year will be a “trough year,” as the ag machinery market stabilises after a volatile 2025, Audia explained. AGCO experienced its “largest market share growth ever in North America last year,” he added.
AGCO is not alone in proclaiming 2026 a trough year, as CNH Industrial struck a similar tone in its 2025 full-year earnings, with machinery sales dipping amid trade uncertainty. Similarly, John Deere stated that this year will be the bottom of the current market cycle, during its Q1 2026 earnings call, as AgTechNavigator reported.
“Things are not getting worse. If we look at 2025, every quarter, there was a new surprise. Things tended to get a little bit worse when we look at our dealer inventories. In the fourth quarter, we were able to reduce the level of dealer inventories. Pricing in North America was better than what I had expected and what we had communicated. Market share came in stronger, so we are seeing some good momentum,” Audia elaborated.
He added, “I’m not sure I would say they’re getting significantly better. They’re just not getting worse. And relative how we’ve been over the last year, that’s probably not a bad place to be right now.”
Is Brazil the next key growth market for the ag machinery market?
Historically, AGCO’s business was skewed to the European market, accounting for 60% of its business, Audia noted. However, the OEM expects “tremendous growth potential” in South America for its Fendt brand, especially in the Brazilian state of Mato Grosso, he added.
“We have had a strong presence in South America for years with Massey Ferguson and Valtra,” Audia said. “[The] Cerrado does two to three plantings per year, and so you have ... big farms there, and that’s where Fendt plays quite well.”
Additionally, the upcoming Brazilian presidential election can result in a surge of ag-related spending, Audia pointed out. Brazil’s current president, Luiz Inácio Lula da Silva, is seeking a fourth term and is expected to run against Flávio Bolsonaro, the son of Jair Bolsonaro, who is serving jail time for an attempted coup.
Brazilian ag spending was constrained in 2025 due to a combination of low commodity prices and trade uncertainty, but the long-term trajectory is positive for the Latin American country, Audia explained. Brazil is “really the only country that’s adding arable land, and as grain demand continues to increase longer term, we know that Brazil is a critical market to help service those needs,” he added.
“We’ve looked at our data analytics models, and historically, in the year that there is an election, there’s usually stimulus that is put into the ag market to drive sort of favourable outcomes to the election. So, our flat assumes that there is some ... stimulus in the back half of the year. As we’ve talked to the teams down in South America, we expect interest rates to start coming down, hopefully here in March,” he elaborated.
How AGCO expands its portfolio to meet the growth opportunity
Over the years, AGCO expanded its portfolio to meet demand in both North and South America, including offering more types of equipment through its Fendt brand.
“We’ve created a full line in the Fendt brand — which legacy was just more of a tractor portfolio — so added a combine, added a sprayer, added a planter, and we’ve begun to bring that into North America and South America and roll that out through an array of dealer networks. And we’ve seen good growth in market share with Fendt in both of those regions,” Audia said.
Demand for Agco’s PTx technology, a portfolio of precision ag technologies that include guidance, steering, water management, and other capabilities, is also strong and expected to accelerate in the coming years, Audia said.
PTx generates approximately $860 million in revenue annually, “runs at around a 30% EBITDA margin,” and is expected to reach $2 billion by 2029, Audia explained. The OEM purchased an 85% stake in Trimble Ag in 2024, which was later rebranded as PTx Trimble.
