Damon Audia

Thank you, Eric and good morning, everyone.
Slide 8 provides an overview of regional net sales performance for the third quarter. Net sales were down approximately 26% in the quarter compared to the third quarter of 2023 when excluding the negative effect of currency translation and positive impact of acquisitions. By region, the Europe Middle East segment reported sales down roughly 21% in the quarter compared to the same period in 2023 excluding the impact of favorable currency translation and favorable impacts of acquisitions. Sales were down in nearly all countries with declines in France, Germany and Italy showing the largest reduction. The product segments showing the most significant declines were midrange tractors, high horsepower tractors and hay equipment. Parts showed modest growth.
South American net sales decreased approximately 44% excluding the impact of unfavorable currency translation and favorable impact of acquisitions. The market continues to be very challenged, and we continue to underproduce relative to retail demand. Tractors, combines and implements all showed large reductions. In the quarter, there was significant negative mix year over year as the high horsepower segment of the tractor market underperformed the medium and low horsepower segments. The Brazilian market was down the most while Argentina was modestly down. Net sales in North American region decreased approximately 22% excluding the impact of unfavorable currency translation and favorable impacts of acquisitions. Lower farm income continues to pressure farmer purchasing behavior.
High horsepower tractors and hay equipment saw the largest declines. Net sales in Asia Pacific Africa decreased 15% excluding favorable currency translation impacts and favorable impact of acquisitions due to weaker end market demands and lower production volumes. The most significant declines occurred in Africa, China and Australia. Finally, consolidated replacement part sales were approximately $488 million for the third quarter, up 4% on a reported basis and up approximately 5% year over year when excluding the effect of negative currency translation.
Turning to slide 9. The third quarter adjusted operating margin declined by 710 basis points versus a record third quarter of 2023. Margins in the quarter were heavily affected by the significant decline in production, reflective of the increasingly weak industry conditions along with the higher discounts given the weak retail demand across the world. By region, the Europe Middle East segment income from operations decreased by $116 million and the operating margins decreased by 620 basis points compared to the same period in 2023. The reduced margins were primarily a result of lower sales volume, factory under absorption from reduced production and increased discounts. North American income from operations decreased approximately $87 million year over year and operating margins were 7.2%.
The decrease resulted from lower sales volume and increased factory under absorption, increased warranty expenses and higher SG&A expenses associated with the consolidation of the PTx Trimble business. Operating income in South America decreased by approximately $105 million. This decrease was primarily a result of continued weak market conditions resulting in lower sales and significantly lower production volumes as well as increased discounts year over year. The operating margins in the quarter were 11.8% driven by cost savings measures at the factories and in SG&A expenses as well as a one-time tax benefit in Argentina that flowed through cost of goods sold that contributed approximately 200 basis points of margin improvement.
Lastly, income from operations in our Asia Pacific Africa segment decreased by approximately $12 million due to lower sales and production volumes.
Slide 10 details our September year to date free cash flow for 2023 and 2024. As a reminder, free cash flow represents cash used in or provided by operating activities less purchases of property, plant and equipment and free cash flow conversion is defined as free cash flow divided by adjusted net income. We used $387 million of cash through September of 2024, approximately $232 million more than the same period of 2023. Lower net income in 2024 is the primary driver of the year over year change. For the full year, we continue to expect our free cash flow to be in the upper half of our long-term targeted range of 75% to 100% of adjusted net income, putting us between $435 million to $580 million. We remain committed to our balanced capital allocation plan which includes reinvesting back in the business, repaying debt to maintain our investment grade credit ratings and rewarding investors with direct returns.
On November 1, we repaid the $500 million outstanding under the term loan facility utilizing the proceeds from the grain and protein business. In addition to the regular quarterly dividend of $0.29 per share, as a reminder, we also paid a special variable dividend of $2.50 per share in the second quarter. AGCO has paid over $1.2 billion in special variable dividends over the last four years. We will remain focused on deploying capital in the most effective ways for our long-term shareholders.
Slide 11 highlights our 2024 market forecast for our three major regions which has not changed from the last quarter. For North America, we still expect the demand to be 10% to 15% lower compared to the levels in 2023. For Western Europe, we continue to expect the industry to be down 5% to 10% compared to 2023. Farmer sentiment and other indices have been hovering at historic lows for a few months now due to reduced commodity prices and higher input costs. Our forecast for South America remains unchanged indicating a 25% to 30% industry decline in 2024.
Slide 12 captures the assumptions related to our 2024 outlook which now reflects the divestiture of the grain and protein business as of November 1. Despite the weakening market conditions, our sales plan includes market share gains. We are updating our full year pricing to reflect about a negative 0.5% year on year. This pricing assumption is comprised of positive pricing in North America offset by negative pricing in South America and modestly negative pricing in Europe. Our raw material costs have stabilized and declined in certain cases. We are continuing to pursue cost savings and look to be about break even on a net pricing basis.
We expect currency translation to have no meaningful effect on our sales year over year while our prior guidance had assumed about a negative 1% adverse effect on sales year over year. Engineering expenses are now expected to be down 5% in 2024 compared to 2023 including PTx Trimble and 11% excluding PTx Trimble. We are reaffirming our adjusted operating margin target of approximately 9% which we view as achievable given the sales outlook and cost savings initiatives we have executed coupled with the structural changes we've made to our business. We see 2024 as being around 90% of mid cycle, almost 15% below 2023 where AGCO saw a record adjusted operating margin of 12%.
Despite the challenges in the third quarter, we are confident that the AGCO team can deliver the 9% on a full year basis. This would represent among the highest adjusted operating margins ever achieved, not only well above the prior trough of 4.1% adjusted operating margins we saw in 2016 but also higher than previous peak margins before we began executing our current strategy. We will provide updated long term mid cycle operating margin targets at our December 19 analyst meeting to account for the performance of PTx Trimble and the divestiture of our grain and protein business. Our effective tax rate is anticipated to be approximately 30% for 2024, in line with our prior guidance.
Turning to slide 13 for a revised 2024 outlook. Our full year net sales outlook is now $12 billion, down from our previous outlook reflective of the market environment and the elimination of the grain and protein sales for the balance of the year. We are reducing our adjusted earnings per share forecast to $7.50, down from our prior guidance of $8 which is also reflective of the market environment and the elimination of the grain and protein sales for the balance of the year. Given the weak market environment, we are modestly reducing our CapEx spending to approximately $450 million. Our free cash flow conversion should be at the upper end of our targeted 75% to 100% of adjusted net income, consistent with our long-term target.
On slide 14, you can see the details for our 2024 analyst event where we will provide sell side analysts and investors an update on our business. We hope you will join us, and we look forward to seeing you there.
With that, I'll turn it back over to the operator for Q&A.

Question and Answer Session

Operator

(Operator Instructions) Jamie Cook, Truist.

Jamie Cook

I guess two questions. First on the guide for 2024. You're maintaining your margin guide. Pricing is an incremental headwind. Relative to the previous guide, your sales forecast is lower and so it sort of implies margins in the fourth quarter have to reach 10% versus 5.5% in the third quarter. So just trying to understand the margin ramp there and what would be driving that. And then my second question just on AGCO dealer inventories. I mean it sounds like you're saying the market is getting weaker, your dealer inventories are still bloated yet, but you haven't changed your retail sales forecast. So I'm just trying to understand what's AGCO specific versus the industry and like to what degree is there any way you could frame the production cuts in South America and North America in the first half of 2025.

Damon Audia

Sure. So Jamie, we'll go to your first question on the 10% outlook for the fourth quarter. Again, if I think about how I would look at it the third quarter where you alluded to the 5.5%, I think there's a couple of key differences here as we go into the fourth quarter. One is the production levels in Europe will be higher in the fourth quarter than they were in the third quarter and the fact that they should be up at around 40% from Q4 versus Q3. We made the decision in the third quarter to really elongate some of the seasonal shutdown there given the inventory and we're still seeing fairly good demand in many parts of Europe.
So we will see a little bit higher production in the fourth quarter in Europe, specifically. Third quarter, we did do something strategically related to a large European dealer who was dealing with some financial challenges. That was a little bit uncertain in the third quarter. For the most part, they have worked through that. We have much better clarity, and we expect to see a little bit of incremental volume related to that flowing from what would have been in Q3 flowing into Q4. So those would be a couple of things. In addition to that, that Q4 is always our seasonally strongest quarter that we'll see some improvements there. And then internally specific to AGCO, the cost actions that we've been implementing, we continue to see those pick up as we move month to month, and we start to take out more of the associates and our warranty.
Again, we have a little bit of a spike here in the third quarter. We expect that to get more into the normalized rates here as we go into the fourth quarter. So at the end of the day, we feel good. We know the teams are working to drive the retail sellout even in the weakening environment. I would make your comment on pricing, probably the effective offset to that is FX is a little bit more of a tailwind for us here relative to where we were at the end of the third quarter. And those two sort of wash themselves out a little bit but overall, we feel good. On the dealer inventory levels, as Eric alluded to in his comments, we are taking significant reductions in our production working to reduce the dealer inventory units on hand.
As you know, our inventory months is a forward 12 month forward-looking. And so as we do see the market continuing to be weak into 2025, that's reducing the retail sale outlook here for us, thus increasing the months of supply on hand. We are taking significant incremental production cuts around the world year over year. South America again will be the biggest one after back-to-back 50%-plus cuts in Q2 and in Q3. We see South America down again and that's lapping a very strong production cut last year in the fourth quarter just given the very weak industry environment that we're seeing there, but we're also cutting production overall in Europe and in North America.
So we sort of see that happening in the fourth quarter. We're not ready to give an outlook on what the production schedules will look like for early 2025 for South America or North America yet. We want to get through the fourth quarter, see how the retail traffic is, see how our share plays out, get our overall industry outlook in alignment. But as we sit here today, again, our confidence is that we will likely have to underproduce at least in the early part of 2025 just given what we see the industry and the current dealer inventory is looking like right now.

Operator

Kristen Owen, Oppenheimer.

Kristen Owen

A little bit of a follow up on that. Just help us understand I mean you talked about some of the moving pieces in Europe around the production, around some dealer things, can you help us understand what pricing looks like in Europe and how to square that circle with some of the market share gains that you've seen and then I'll have a follow up.

Damon Audia

Yeah. So Kristen, overall, pricing in the quarter for Europe was modestly negative. I would tell you it's a little bit on the volume brands, but even a little bit more in Fendt. If I break that down a little bit further, it's really focused on the transition that we're going through with the Fendt 700 Gen 6 and the Gen 7. You've heard us talk about introducing the new Gen 7 earlier this year. We are still producing the Gen 6. We'll transition through that in 2025 at some point in time. But as you would expect, as we still are offering dealers and farmers the opportunity to choose between a Gen 7 700 a Gen 6, that Gen 6 is coming at a lower price point and year over year, that is factoring into negative price in Europe.
Again, I think when you look at our overall pricing being down at around 50 basis points year over year, I think it's important to understand the geographic mix. We're still seeing very good pricing here in North America. That has continued for the year, and we expect that to continue. South America, we've been forecasting negative price now for a year. That's continuing to materialize. I would tell it's sort of in the low single digits this year as that market has continued to be weak. And then Europe is a little bit negative, as I said on my comments. And again, a lot of that has to do with this a larger volume product in the Fendt 700 Gen 6, translating into the negative year over year price there in Europe.

Kristen Owen

And then just generally speaking, on the lowered outlook for the full year, if I back out grain and protein fourth quarter of last year, that represents, let's call it the half of the $500 million delta in the top line. Can you help us understand what that does for the bottom line? How much of a benefit is that to your year over year margin in the fourth quarter? Just a little bit more on the moving pieces of grain and protein in the revised guidance.

Damon Audia

Yeah. So I think you're -- on the revenue outlook, Kristen, you're right. I would tell you what we saw in the third quarter, the miss in grain and protein and where we sit here in the fourth quarter, that's about $200 million; about $150 million of that, I would say directionally was -- would be in the fourth quarter specifically. So that's the revenue. Operating margin wise right now as we sit here at is 9%. With the sale happening, November 1, I'll tell you, it really has a de minimis effect on the operating margin. EPS wise, it's about $0.1 of our guide down in the EPS is related to the elimination of the grain and protein business here for the balance of the year.

Operator

Stephen Volkmann, Jefferies.

Stephen Volkmann

So can we just start off with Trimble, Eric? And you mentioned that things were sort of weaker, I guess as the channels sort of change there? It was a little weaker than I expected. What's your outlook there? I mean could Trimble be up next year, sort of irrespective of end markets as that channel shift sort of changes.

Eric Hansotia

Yes. So it's an interesting situation. And that the activities that we're monitoring are -- many of them are on track and that we're signed up over 200 new dealers. We've converted our -- transformed how we're sourcing product or sourcing receivers on our own machines. We used to have two suppliers majority of which was another supplier, not Trimble. We've converted that over to predominantly Trimble now.
So those types of things are happening and on track, maybe even a little bit ahead of schedule. This big air pocket that we've talked about of -- the last time buy from one of the top customer from Trimble is still feeding the market. So our -- even though we signed up, all those dealers, they're really not ordering that much yet. We expect that to work its way through by the end of this year and that's still on track with what we said last time. And then we can start seeing the activity come through from these dealers that we've signed up.
We'll next year be higher than this year. It's -- we're still working through our expectations for next year. The things we're putting in place, we feel good about. It depends on what the market does. The broad egg indices are at their low points. You look at Purdue was at its low point and now, it bounced back today. It came up a little bit. Well, that's just one data point. Will that be a trend? I don't know yet. The SIMA index in Europe is at its all-time low point. So it's we're certainly close to sentiment being at the very bottom. Now that's not meaning the market is at its very bottom, but that's usually a good indicator of what the next few months look like.
So we're trying to sort out where is that inflection point and what will happen in '25, we're not speaking to that in big specifics yet, but what we're trying to focus on is what we're -- what's in our control driving those things in the channel and with the product to make sure that we're ready when the market's there.

Damon Audia

And Steve, the one comment I would add, and you probably are familiar with, CNH, the OE business, we know that that is coming down this year. We've talked about them moving away from the Trimble business. That's transitioning out in 2024, that's continuing. So that'll be a year over year headwind. If you remember at the time of the acquisition, we announced that we would be moving -- as Eric alluded to, moving Trimble as our base offering in our receipt as in our OE production, that will help mitigate some of that. But when I give you the reported sales, remember the CNH sales today is reported in that number, but if I'm transitioning that into an AGCO product, it may not -- it won't report as an external sale of the center company and so similar to precision planting where you'll hear us give one number, we'll try to overlay sort of what's in our company for this technology. Again, we see part of that being mitigated, but just in absolute terms, that will be a headwind on reported numbers year over year.

Stephen Volkmann

And then as a follow up, you've been having sort of a semi-public debate with your largest shareholder and some changes in that relationship, I think, relative to production and so forth. Is that taking significant amount of your time and any sort of update you can give from your perspective?

Damon Audia

Yeah. Just as a reminder, this is 1% of our sales and it's really only for a few markets. So the rest of the organization is focused on the core of our business and is marching forward, trying to serve farmers and deliver on our farmer first strategy. There's a few of us that are trying to manage this in a professional way, and I think it's been handled that way well. We're looking for a smooth settlement to this overall situation. We put on the table some we think very generous offers to get it to resolve smoothly. The ball is really in TAFE's court now. But no, it's a small impact on the business. We're trying to keep it focused that way and the organization is really focused on delivering precision ag solutions to productive -- production farmers all around the world.
And we're going to have -- and we've got plenty of activity underway to replace that, those tractor sales as well. So we feel fine about that. The channel is served today. We've got inventory in the channel for those products. So dealers are served today. We've got backfill options that we're working, and we have confidence in those. We've got open lines of communications with TAFE, offered a few very reasonable deals and generous deals. We're just hoping that they'll take those, and we can resolve this.

Operator

Joel Jackson, BMO Capital Markets.

Joel Jackson

I wanted to follow up on Europe a bit more. You did address some of this already a few minutes ago on a prior question but like I'm trying to look through into early '25 which you've given just a little bit of outlook on that. Trying to figure out how transient that step down in margins are in Europe in Q3. Again, you gave some color, but should we expect kind of a ramp back over a couple quarters on margin in Europe or should we expect first half margins in Europe '25 to be a lot less than we saw first half of '24 because it does mean a lot for you guys?

Damon Audia

Well, Joe, I think it's a little bit too early for us to -- we're not going to get into the outlook for 2025 yet. But I think if you step back at the more macro level, Europe from an industry standpoint tends to be the least volatile of all of the three major regions that we sell in. That continues to lend itself to better stability in our order patterns. You don't see the as much variability like you do in North America, South America. We know year over year, we're -- we've seen the SIMA index which as Eric alluded to the Purdue barometer here. The SIMA index is at a historic low point right now. When you look at that index, it usually doesn't stay at that point for a long time. It usually hits there and then starts to recover.
We're not ready to call industry bottom yet. But again, when we look at some of the indicators in the marketplace, we feel like we're hitting near the bottom from a sentiment standpoint. Our big challenge next year as we think about 2025 is going to be the overall industry. How does that play out on pricing and then what do we do to make sure that we're adjusting the dealer inventories to get back to that four months. Again, we said we are up about 0.5 month here from the third -- from the second quarter to the third quarter. Again, fairly manageable for us to work that down, especially with the fourth quarter being a strong sales month for us.
With farmer sentiment, it is a big point and that will influence the other things. And so I mentioned that in one of the prior questions, we do have a couple of products that we're transitioning out here with the Fendt 700 Gen 6, that will move down, which will hopefully year over year improve the pricing. But again, the market will really dictate sort of how 2025 shapes out in Europe for us.
But Joe, we do expect our fourth quarter margins in Europe to bounce back similar to what they look like in the first half of the year.

Joel Jackson

And just another question, trying to compare slide 4 -- slide 4 and 11 from today's deck. So slide 11, you've maintained what it was a few months ago, you maintained all of your market outlook for tractors across the three regions that you show to maintain that. But on slide 4, especially for tractors, the nine-month performance year to date, contraction for tractors in North America and in Europe are worse versus the six-month performance. South America I think is a bit better. But can you explain that a bit or reconcile that a bit, how you've been able to keep the full year outlook the same? But there's contractions gotten worse and then you thought, well, contraction trends are worse through nine months versus six months.

Eric Hansotia

So Joe, we're -- essentially, we've moved to kind of the top end of the range in terms of the markets going down year over year. There's a little bit of a disconnect in South America and that our outlook is on wholesale as opposed to retail because that's where we have more visibility on and in terms of industry being reported. So South America looks a little bit different just because we're looking at wholesale versus retail.

Operator

Mir Dobre, R.W. Baird.

Mircea Dobre

So I'm trying to sort of put the pieces together here on dealer inventories and demand. I mean if I heard you correctly, dealer inventories declined 6% sequentially there in terms of units in Q3. But then you're also talking about having on average about an extra month of dealer inventory based on how you're thinking about for demand. Given the fact that you haven't really changed your outlook for demand for 2024, are we sort of to infer here that what's baked in here is maybe like a kind of a mid-teens decline in 2025? Is my math correct? And if so, can you give us some color by geography in terms of where we're -- you're experiencing more weakness, how we should be thinking roughly about '25?

Damon Audia

Yeah. So, Mir, so we -- again, we're not going to give an outlook for 2025 just yet. We want to get through the fourth quarter, see how the retail demand plays out, work through our analytics for the full year here. But I think what we are alluding to, and Eric has said this in a couple of prior calls, when you look at our historical industry changes, we usually go through one very large transitional year. And that's what we're going through this year. We're moving down directionally around 15% from where we were last year to where we are this year. And then historically, the industry floats in that general vicinity.
As we look at where we're sitting here today, we are expecting the market to be down next year. Again, we're not expecting large declines. Again, the industry historically doesn't do that, but we are expecting to see some weakness again next year, probably in most parts of the world. If I look at where the biggest challenges have been, South America continues to be the one that we're seeing the most industry challenged right now. And I think there's a couple of pieces here. You see us cutting the production again for four quarters now. From Q4 last year through the third quarter of this year, we've been cutting production anywhere from 30% to 50%.
We're planning another large production cut here in the fourth quarter of this year. Really trying to take the production down. I think it's important that when you see these numbers even in South America, it's a little bit of the two parts to the story there. When you look at the numbers being down in South America, the high horsepower segment of the market in the third quarter was down significantly more than the overall industry and that there is the negative mix happening right now and at the very low horsepower, say the 79 horsepower and below was actually up in the third quarter. And so when you're looking at that mix, you're seeing the overall units don't look as bad. But for where AGCO is really focused, where we're making the profit, that part of the market was down significantly in the quarter and mitigated by some of these lower horsepower segments that were actually up.
So South America definitely continues to be a big challenge for us because we know this is the biggest most volatile market we deal with. It always has been and likely always will be. North America I would then say is second. We're seeing the large ag segment of the market really be challenged right now. And so we're cutting the production there. And we're seeing sort of the dealer inventory levels continue to creep up, not based on units, units are down, but we're seeing it just based on the forward look. So again, we would expect probably in the early part of the year, again, more challenges for our production and to deal with some of that North American market share as well or North American dealer inventory as well. And then Europe, I would say on the back end of that is going to be more product specific or country specific issues.

Mircea Dobre

To follow up on that --

Damon Audia

Maybe just to -- I'll just build on a little bit --

Mircea Dobre

Sorry. Go ahead.

Eric Hansotia

And then take your follow up. To put some numbers behind this, our last cycle in terms of AGCO's sales mix around the world, we had -- we went from a peak of $115 million down to a trough of $85 million At the peak, we were not supply constrained nor was the industry. This time, our peak only got up to $109 million because everybody was supply constrained during COVID. So we believe then that the trough won't be as deep potentially nor as long potentially as the last trough was. As I said, the last trough was $85 million. In 2024, we've gone from about $105 million down to about $90 million. It's the big correction here that Damon talked about. So you compare that $90 million to the previous trough that we think is probably as deep as it would get, which was $85 million that kind of size is what we're trying to assess of what '25 looks like. We expect it to float near somewhere between 2024's results and the previous trough and we'll clarify that in more detail in December, but at least that gives you some bookends to frame it.

Mircea Dobre

My follow up is on your production slide, slide 5, and the guidance there, I mean considering the fact that you're dealing with excess inventory still, I'm wondering when we're not seeing more pressure on production in the fourth quarter. I mean you're cutting production 25%. I understand that year over year, but it certainly looks stable if not up a little bit sequentially. And I'm wondering why we're not seeing more of this action being taken in the fourth quarter rather than 2025.

Eric Hansotia

Yeah. So Mir, what I'd tell you we are being extremely aggressive in many different parts of the market and many of the different product types. Again, when you look at our production hours, that includes more than just tractors, it would include combines sprayers, planters. So we're significantly reducing production in many aspects. I think what you're seeing in that visual there is mainly Europe. As I mentioned, Europe, we extended the shutdowns in the third quarter to really sort of be better optimizing the cost structure. And then we're picking up a little bit here in the fourth quarter. And again, when you think about what we're seeing is there is still retail demand out there. And if you look at the dealer inventories, you know what's on the dealer's lot may not always be exactly what the farmers are looking at coming to order.
And again, go back to my comment on South America where the high horsepower ag market is really challenged right now. That's sitting on the dealers' lots. But these lower horsepower segments are doing actually pretty well in South America. So we have orders and demand for those products. We're running the production to service that need. And again, similar in North America or in Europe, there may be product lines or retail demand that we're working to produce. We're not producing to put more onto the dealer lot. When we think about what we're producing, it's really more of a pass through to the end farmer where we see the demand. So again, I realize that the numbers look different. But when you factor in what's happening in Europe sequentially or year over year versus what's happening in other parts like South America, we are rapidly reducing the production hours on -- in most of our factories.

Operator

Tami Zakaria, JP Morgan.

Tami Zakaria

So I think I heard you say you expect North America pricing to continue to be strong. Can you help us understand, do you expect any incremental discounting needed to clear the channel? And what's really driving this expectation of pricing growth in North America? Is it mixed or are you raising prices due to cost inflation? Anything to call out there? What underpins this expectation of positive pricing in North America against suboptimal demand backdrop?

Eric Hansotia

Yeah. Tami, we've had positive pricing in North America for the full year or year to date, I should say. I'd say it's really a couple of variables here. One is the year over year price increases with certain new products that we're getting. And I would say, as we think about the back half of this year, what we're seeing this quarter, the fourth quarter, is really being a lot more selective on discounting, especially in some of the lower horsepower segments of the market, the rural lifestyle. As you know, a lot of these tractors are financed. And so as interest rates are coming down, we're trying to take advantage of that where we can drive better discounting decisions, thus reducing the overall cost to AGCO. And that's helping improve sort of the sequential pricing in North America significantly as we move from Q2 into Q3 and now into Q4 and into 2025. But those are really the couple of big variables that are driving the pricing in North America.

Tami Zakaria

And my second question is, can you remind what's your plan in terms of deleveraging the balance sheet? And should we expect more debt pay down in the coming quarters? I think you paid down $150 million with the proceeds but any more plans of debt paydown in the next few quarters?

Eric Hansotia

Yes. So we did pay down the five -- we had a $500 million term loan in place as part of the funding for the Trimble joint venture. So that has been repaid with some of the proceeds from the grain and protein business. We have about a quarter of $1 billion of debt that will mature I think in March-April time frame. Tami, I think as we sit here today, we would likely just pay that down with the Trim -- with the balance of the Trimble proceeds coupled with some free cash flow. Those will be the two big things and then we'll look to see if there's anything else that may make sense, but that will happen in I think March-April time frame.

Operator

Jerry Revich, Goldman Sachs.

Hi. This is Clay on for Jerry. Can you update us on your expectations for the plan of business as we move into next year given on your some of the early order conversations you're having?

Damon Audia

Yeah. I think overall, early order program is -- given the market environment that we're seeing here in North America, I think the early order program has gone relatively well for planters and for sprayers. I think we're not as strong as we were last year this time, but we're out through the first half of 2024 with orders for planters and sprayers. So if you remember Clay, our early order program sort of rolls from start of Q4 -- Q3 to Q3. So almost a full year booked right now, but not quite on those particular products, but overall pretty good.

And as a quick follow up on dealer inventories, can you compare levels now on an absolute basis in North America versus the pre-COVID and I'd be curious to hear about other regions as well.

Damon Audia

Yeah. Well, if we look at the pre-COVID levels, I guess before the massive decline, ideally, they would have been around in that five-to-six-month range for North America. We're sitting here obviously higher than that, but that's what we keep talking about, reducing the production cuts is to get that dealer inventory right around that six-month mark here as soon as possible in early 2025.

Operator

Chad Dillard, Bernstein. It looks like Chad's line has disconnected. This will conclude our question and answer session.
I would like to turn the conference back over to Eric Hansotia for any closing remarks.

Eric Hansotia

I'll close today by saying that in the short term, we are focused on reducing inventory and aggressively controlling cost to better align our operations with the current weak market environment. Our 9% operating profit is far above the previous trough. It was closer to 4% and even above the last pre -- peak margin. That was close to 8%. But we're striving to do even better. Our org efficiency and restructuring activities that we've already implemented so far this year will deliver $100 million $125 million of savings right on target that we projected when we took those actions.
And despite all the current challenges, we remain focused on continued execution of our farmer first strategy. There are strategic actions we've taken over the last nine months, big ones like forming the PTx Trimble joint venture, divesting our grain and protein business and implementing our organization efficient efforts to take control -- take advantage of tools like automation and AI will enhance and accelerate the benefits of our farmer first strategy. Over the last few quarters, we've touched on many factors supporting our markets including growing populations, changing diets, low stock to use levels, increased demand for biofuels and relatively healthy commodity prices. All these trends give us confidence in the long-term health of our industry.
And while cycles are typical in the industry, how we react and weather to them will illustrate how we are structurally changing, AGCO could to be higher performing regardless of market conditions. We look forward to seeing you at our upcoming analyst meeting on December 19. Thank you and have a good day.

Operator

Thank you for joining the AGCO third-quarter 2024 earnings call. The call has now concluded. Have a nice day.