Editor’s note: Farm Industry News recently participated in a roundtable with AGCO’s top executives in the company boardroom. The executives talked about the company and where agriculture is headed.
Last year was among the best years ever for AGCO, according to Jason Marx, AGCO’s vice president of marketing. “The market is as strong as ever,” he said. “Most growers have hedged forward on positive pricing and have input prices locked in. So it looks like a strong fiscal year for them with strong farm income. In the long term, the fundamentals look fantastic.”
Steve Koep, vice president of sales, AGCO North America, agreed. “The economics in agriculture are great,” he said. He added that there was a lot of forward buying of inputs at the end of last year because input costs were relatively inexpensive compared to commodity prices.
He then referenced recent USDA statistics that show the average corn farmer in Iowa could gross between $50 to $100/acre and could go as high as $300/acre this year.
The big question is what will commodity prices do next year. The big wildcard is corn, Koep suggested. How many acres of corn will not be planted because of the inordinate amounts of rain and widespread flooding? However, he said the drop in acres may be tempered with hay ground going into corn and CRP acres that didn’t get re-enrolled.