CNBC Sep 21, 2026
With Eric Hansotia, Chairman and CEO of AGCO
AGCO's spraying technology saves a farmer about 60% of the chemical that would otherwise go on a field, and the machinery sitting in farm sheds is about the oldest it has been.
Most equipment makers sell new technology by selling a new machine. AGCO runs a second business, PTx, that fits modules onto machines a farmer already owns, including machines built by its competitors.
"So we'll put new technology upgrades onto competitor's machines to give that new capability."
Eric Hansotia, Chairman and CEO of AGCO, on CNBC, sells into farm economies on every continent, with only about a fifth of the business in North America. That is why the first question to him was what a US-China trade agreement does to demand for tractors.
The full segment is covered here so you can skip it.
Here are the 4 takeaways that matter.
Key Takeaways
The fleet on farms is about the oldest it has been, and Hansotia says farmers are thirsty for the technology
What he wants out of a trade deal is not volume but a cost base farmers can plan against
Intelligent spraying saves about 60% of the chemical a farmer puts on a field
The new data platform has an AI agent in it, pointed at the years of field data a farm has already collected
PTx sells new capability onto machines a farmer already owns, competitors' machines included
It costs far less than a new machine, and the old machine usually has mechanical life left
8 billion people going to 10 billion, with no more land, water or chemical allowed, is the long-run case for precision farming
About 20% of AGCO's business is in North America, which is part of why the manufacturing footprint moves slowly
1. Farmers Want Certainty
Asked what the trade dynamics between the United States and China mean for the agricultural market and for demand for his products, Hansotia did not answer with volumes. He answered with planning.
What AGCO wants out of a trade deal is predictability, not a quota
The biggest thing that we look for is certainty and stability in farmers markets.
Eric Hansotia
Market access and cost bases have both been uncertain for a couple of years, he said, and a long-term agreement would let farmers everywhere plan better. The reason that matters right now is the state of the machinery already on farms.
The installed fleet is old, and the replacement demand is sitting there
The average age of their fleet is about the highest it's been. They're thirsty for our technology.
Eric Hansotia
The host then read out the list of things pressing on farmers at once: record diesel prices, fertilizer shortages, trade and tariff dynamics that keep changing, a super El Niño, and higher interest rates. She asked what that does to the recovery in agriculture that keeps being forecast. Hansotia said the list was right and added one more item to it, which is that nobody knows how any of them resolve.
2. Saving 60% Of Chemical
With the inputs outside his control, Hansotia said AGCO's job is the part it can manage for the farmer: labor, chemical, and what the farm already knows about its own fields.
The spraying technology is sold as an input-cost cut
Some things like labor through a use of autonomy, through input cost savings, through our technology, where we can do intelligent spraying and save the chemicals, save about 60% of the chemical for the farmer.
Eric Hansotia
The other half of that answer is software. AGCO's data platform is aimed at farms that have been collecting field data for years without getting much back from it.
The data platform ships with an AI agent inside it
And then our new data platform, it's got an AI agent embedded right into it
Eric Hansotia
The point of the agent, on his account, is to tell a farmer which parts of the operation can be run more precisely and what to change, from data the farm already has.
3. 10B People, Same Inputs
The host asked whether a squeezed environment makes the case for investing in precision agriculture stronger rather than weaker, and mentioned AGCO's partnership with Trimble. Hansotia answered with a long-run trend and a short-run one.
Grain demand keeps rising
There's 8 billion people going to 10 billion people. There's more biofuels, and there's more meat in people's diet as the economies mature.
Eric Hansotia
Against that, he said, every input is capped: no more chemical, no more land, no more water. The only way the equation resolves is farming the same acres more precisely, which is a structural need rather than a cyclical one. The short-run pressure on farm economics then adds to it.
That is why AGCO runs two technology businesses instead of one. The first puts technology on new AGCO machines, which he said every competitor does too. The second is a separate business.
The second business sells capability onto machines already in the field
But then we have this whole separate business that we call PTx. And it's a tech business that creates modules to go on to existing machines and give them new capabilities, automate a feature.
Eric Hansotia
And it does not care whose badge is on the machine
And we do that not only for our brand of equipment, but for all the farmers in the market, no matter what they've bought. So we'll put new technology upgrades onto competitor's machines to give that new capability.
Eric Hansotia
The economic argument for it is the one a farmer under pressure responds to: upgrading a feature costs much less than buying a whole machine, and the machine being upgraded usually has plenty of mechanical life left in it.
4. Only 20% Is US And Canada
The last question was about the manufacturing footprint: what interest rates do to financing and selling machines, and how a US-China agreement or the diplomacy at the UN General Assembly changes where AGCO builds. Hansotia started by resizing the American part of the business.
Most of AGCO's customers are not in North America
We serve farmers everywhere, and about 20% of our business is in North America.
Eric Hansotia
Because the customer base is global, he said, AGCO keeps moving its supply base and its plants toward whatever is cheapest for farmers. Tariffs have already changed some of that.
The footprint has moved for tariffs, but not wholesale
We've made several adjustments to optimize for the tariff environment, but it's moving fairly quickly.
Eric Hansotia
What limits how far it can move is the economics of the factories themselves. Hansotia said farm machinery plants take high capital investment and run at low volumes next to an industry like automotive, so a company cannot rebuild its footprint every time a tariff schedule changes. He described the response as measured rather than wholesale.
Bonus Insights
Trimble came up in the question, not in the answer
The host raised AGCO's partnership with Trimble when she asked about precision agriculture. Hansotia went to the macro case and to PTx and did not come back to the partnership.
China was already buying soybeans ahead of the meeting
The programme's own opening said reports had Chinese buyers stepping up soy purchases before the sit-down between the two countries. That is the show's reporting rather than anything AGCO said.
Hansotia's bottom line is that the machinery cycle turns on certainty rather than price: farmers are sitting on the oldest fleet they have had and want to replace it, and until trade and input costs settle, AGCO's growth comes from selling technology onto machines that are already in the field.
Products, Companies & Tools Mentioned
AGCO (Hansotia's company, the agricultural machinery maker; about 20% of its business is in North America and it sells into farm economies everywhere else)
PTx (AGCO's separate technology business, which builds modules that add capability to existing machines, including competitors' machines, at a much lower cost than a new machine)
Trimble (Raised by the host as an AGCO precision-agriculture partnership; Hansotia did not address it directly)
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