As farmers struggle with low crop prices, relatively high interest rates and increased input costs, fewer are making big-ticket purchases like tractors, combines and farm implements, resulting in a backlog of inventory across the globe. Machinery manufacturer AGCO has about four months of orders with its dealers in North America and is looking to bring that number down to three, Eric Hansotia, AGCO’s president and CEO, said in an investor call last week. In general, manufacturers want to optimize their coverage to avoid extra costs and storage fees. “We will continue to focus on under-producing retail demand, coupled with retail market share execution to bring dealer inventories in line with our targeted range,” according to Hansotia. Competitors Deere & Co. and CNH have also slowed their production and reduced their workforce numbers throughout the year to account for the down market. While tractor and combine sales wane, manufacturers are expecting precision agriculture sales to grow as farmers look to boost yields and lower day-to-day costs.
Tractor manufacturers slow production as demand declines
