AGCO Leadership Interviews - Damon Audia - Farmer Technology - What's New in Agriculture

So the PTX brand really brings together two cornerstones in technology. Platform One is our Precision Planting Group, which we've had for several years and is really an innovator in farmer-first retrofit technology. We've recently combined that with the joint venture with Trimble to create PTX Trimble, bringing two of the industry-leading mixed fleet retrofitters together under one umbrella called PTX. This is a great opportunity for us to service farmers how they want to be serviced, regardless of the brand that they're using on the farm.

AGCO is a phenomenal opportunity for investors. There's a lot going on in the ag industry, which has great long-term prospects. But if I think specifically about AGCO and what's unique about us, there are three differentiators for us versus the competition. One is our mixed fleet retrofit. We're servicing the retrofit market through a unique channel; no one else in the industry does that. Two is FarmerCore. We're trying to introduce a way to service farmers how they want to be serviced on the farm, versus forcing them to come into the dealerships. In North America and South America, as we're building out our dealer network, we're one of the companies that can really offer this new FarmerCore on-farm experience for them. No one else in the industry can really do that today. And three is our Fendt brand. As we look at North America and South America, we're introducing the best of the best technology, a well-proven brand in Germany, and we're bringing that into North America and South America where we have relatively low share. We're introducing a very high quality product that gives farmers a great opportunity to get a product of high quality and high reliability that they didn't have offered before. Those three things differentiate AGCO versus the others in the industry.

Yeah, so every downturn is a little bit different, and again, they're very common in the industry, so we knew that this was coming. This one may be a little bit different than in the past. We don't have as much demand. When the markets were very strong several years ago, we in the industry could not service as much demand that was out there, so we sort of shaved the peak off in the last couple of years, which hopefully reduces the downside of this particular downturn. Also, this downturn we don't have the preponderance of short-term leases that we saw in the prior downturn, so hopefully the industry as a whole is operating a little bit differently this time versus last time. Hopefully we'll see a slightly softer downturn and maybe a little bit shorter downturn. What AGCO is doing specifically is we're much more aggressive in trying to control our cost. We know we have to cut our production, we know we have to take the dealer inventory levels down in order to produce, as the markets recover, more in line with retail demand. This downturn we've been much more effective in planning ahead of it and executing faster than what we did in the prior downturn.

Yeah, so there's a lot of demand for farmers. They have to produce more, and in many parts of the world using less and less chemicals. It feeds right into our technology stack. Whether that's Precision Planting, PTX Trimble technology, these are the game changers for our farmers. The way that we're offering that, whether it's in our new equipment in Massey, Fendt, Valtra, or whether it's in our retrofit offerings as you saw today here at Farm Progress, we're offering farmers the opportunity to upgrade their existing equipment with the latest technology to drive better productivity, lower their input cost, or increase their yield at the same input cost. All of that is going to drive improving yields for them and help deliver a better thing for us as an investor, better things for our employees, and ultimately a better outcome for the farmers as well. So it's all about the technology.