DULUTH, GEORGIA, US — AGCO suffered a loss in the second quarter ended June 30, including the estimated loss on its Grain & Protein business, which it has agreed to sell to American Industrial Partners.

The company recorded a loss of $368.9 million in the quarter, which compared with net income of $319.2 million in the same quarter a year ago. It also sustained a loss of $200.9 million for the first six months of the year, which compared with net income of $551.8 million at the same time a year ago.  

“While we continue to successfully execute our farmer-first strategy, second-quarter results were influenced by weakening market conditions and significant production cuts aimed at reducing our company and dealer inventories,” said Eric Hansotia, chairman, president and chief executive officer of AGCO. “Declines in commodity prices and lower projected farm income in 2024 have negatively affected farmer sentiment, further dampening global industry demand. Given the current environment, we are taking aggressive actions, including our recently announced restructuring program, to control expenses, reduce production levels and lower investments in working capital.”

AGCO announced on July 25 plans to sell its Grain & Protein business, allowing it to “streamline and sharpen” its focus on agricultural machinery and precision ag technology products. The transaction includes the five primary Grain & Protein brands: GSI, Automated Production, Cumberland, Cimbria and Tecno. It excludes AGCO’s Grain & Protein business in China.

“Going forward, we will be better positioned for long-term growth in our higher margin and higher free cash flow generating businesses,” Hansotia said. “Simultaneously, it will raise our profitability through the cycle as Grain & Protein has historically been a below-average margin business.”

Lower commodity prices have further pressured farm income and more challenging farm economics are resulting in weaker global industry demand across most equipment categories, Hansotia said.

Total sales for the quarter dropped 15% to $3.2 billion, AGCO said. For the first six months, sales were down nearly 14% to $6.2 billion.

North American net sales decreased 20% in the first six months of 2024 compared with the same period in 2023. Softer industry sales, lower end-market demand and de-stocking efforts all contributed to lower sales.

Net sales in AGCO’s South American region decreased 41% in the first six months of 2024 compared with the same period in 2023. Softer industry sales and under-production of retail demand drove most of the decrease.

Net sales saw less of a decline in the Europe/Middle East region, decreasing 2.8% in the first six months of the year. Growth in Germany, Turkey and France was offset by lower sales across nearly all the other European markets.

Net sales in Asia/Pacific/Africa decreased 26%. Lower sales in China, Australia and Africa drove most of the decline.