AGCO, the maker of Massey Ferguson, Fendt and Valtra farm machinery, saw its profits collapse in 2019 due to weak tractor and combine sales in Europe and South America. Announcing results for its 2019 financial year, AGCO reported a 3% decline in full year sales to just over $9bn (€8.3bn). However, pre-tax profits for 2019 plunged 28% year on year to just $261m (€239m), mostly due to significant losses in its business in South America.

In Europe, AGCO saw its sales fall 1% last year to $5.3bn (€4.9bn) and made profits of $638m (€585m). However, AGCO said the number of tractors it sold in western Europe was down 2%, while combine sales plunged 18% during 2019.

AGCO struggled last year in South America, mostly due to a difficult year for Brazilian farmers. AGCO’s sales in South America plunged 16% to $802m (€735m), with the number of combines sold down 5% and the number of tractors sold falling 16%. AGCO’s business in South America racked up net losses of $39m (€36m), which is much worse than the $10m loss made in 2018.

In the US, AGCO reported a 1% increase in sales to $2.2bn (€2bn), while profits increased 18% to $122m (€111m).

“Our fourth quarter results reflect the impact of challenging market conditions, particularly in Europe and South America,” said Martin Richenhagen, CEO of AGCO farm machinery. Richenhagen added that he expected 2020 to be another difficult year, with farm incomes in Europe and the US forecast to drop due to falling milk and grain prices.