How Agco aims to help farmers save money through retrofitting

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Agco (AGCO) and Trimble (TRMB) have closed their joint venture PTx Trimble, which focuses on precision agriculture and next-generation technology for farmers.

Agco Chairman, President, and CEO Eric Hansotia says the venture will help build technology for the "mixed fleet." "We serve farmers not only for one brand, like the Agco brands, but we serve all farmers. No matter who they've bought from in the past, we'll sell technology upgrades to take their existing machine and give it new capability with a technology module," Hansotia explains.

Hansotia describes the three go-to-market strategies the company has for PTx: selling to farmers so they can retrofit their equipment, selling the technology on new Agco products, and selling it to OEMs for them to use on their products.

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This post was written by Stephanie Mikulich.

Video Transcript

JULIE HYMAN: All right, another hotter than expected. Inflation reading coming in today. And while oil has been climbing recently prices for crops like corn, wheat, and soybeans have fallen over the past year. Let's discuss how inflation dynamics are affecting the business of farm equipment.

Joining us now, Agco Chairman, CEO, and President Eric Hansotia. Eric, it's great to see you. Thanks for being here.

ERIC HANSOTIA: Great to see you, Julie. Thank you.

JULIE HYMAN: So I know you guys just closed on the big deal for your joint venture. And I want to get to that in a moment with Trimble that really has a lot to do with agricultural technology. But first, I got to get your thoughts on the big economic news of the day in the form of the CPI report.

And I know you guys have been raising prices a little bit. I believe by 1 and 1/2 percent is the plan. But what are you seeing in your business in terms of inflation?

ERIC HANSOTIA: Well, first of all, the AG business generally doesn't move at the same pace as the general economy. It's more tied to the price of grain and in turn, the profitability of the farmer. Now, inflation and in turn interest rates do have some impact because many of our farmers finance their equipment.

But they often finance the net between their purchase of new and what they're trading in. So it's not a huge headwind. It is a headwind. But not a huge one like it is in some other industries.

JOSH LIPTON: And Eric, another issue. I want to get your take on the Francis Scott Key Bridge collapsing in Baltimore, Eric. You do use that port from what I understand. I'm just interested in what the ramifications, the impact Eric on your business.