AGCO (AGCO) J.P. Morgan Industrials Conference 2025 summary

Tariff impacts and mitigation strategies

• Tariffs from China, Canada, and Mexico have limited direct impact, but European tariffs pose significant risk due to high import share from Western Europe.

• Retaliatory tariffs could affect exports, especially to Canada, with efforts to pass costs to customers.

• Scenario planning includes shifting logistics and increasing local assembly to minimize tariff costs.

• Industry typically responds by raising prices across portfolios rather than on specific products.

Market outlook and regional performance

• North American large ag market expected to decline 25% in 2025, with similar expectations from competitors.

• Brazil shows increased optimism due to strong yields and geopolitical positioning, with improved farmer sentiment.

• Europe remains stable with optimal inventory levels and strong farmer sentiment, supported by subsidies.

• South America is undergoing significant underproduction to reduce inventory, aiming for retail-aligned levels by late 2025.

Inventory and production adjustments

• Europe finished 2024 with four months of inventory, considered optimal; South America at five months, targeting three.

• North America faces the biggest challenge with nine months of inventory, requiring continued underproduction into late 2025.

• Production cuts are heavily weighted in the first half of 2025, especially in North America and South America.