Manufacturers of agricultural machinery are preparing for the next cycle in different ways, as industry discussions are going beyond the script of a prolonged downturn — this is the conclusion reached by Bernstein analysts following meetings with major producers at the Farm Progress Show.
Sentiment has changed most noticeably in North America, where corn prices are currently around $5 per bushel, with a break-even point of about $4 on rented land and $3.60 on owned land. Analysts note that discussions increasingly include scenarios with prices of $6–7 per bushel.
Among the key sources of optimism are lower-than-expected yields due to drought, an increase in China’s purchases of soybean meal, potential growth in demand for biofuels, and an outdated fleet of equipment.
In Europe, the outlook remains unchanged, although uncertainty around the 2028 CAP reform could create conditions for advance purchasing in 2027. South America remains weak despite the release of FINAME funding in July.
1. Agco — Bernstein analysts believe Agco positions itself as a company that is gaining market share as the downturn ends.
AGCO confirmed plans to double its share in North America to roughly 20% over the next five years and noted a gain of 200 basis points on an annualized basis, including 300 basis points in the large-tractor segment under the Fendt and Massey brands.
The strategy is built on three levers: reorganized leadership in North America for a unified regional strategy, an improved dealer network with an expanded mobile service aimed at reaching 50% of the market, and active product-line refresh—14 products launched in 2025 and 12 planned for 2026.
In a recent ratings update, AGCO Corporation was upgraded to “Outperform” by Baird, which cited margin recovery potential. Other firms, including UBS and DA Davidson, cut their price targets, pointing to regional risks and challenges in the agricultural market.
2. CNH Industrial — Bernstein describes CNH Industrial as a story of self-help for the next cycle. Management expects EBIT margin growth of 50–70 basis points on an annualized basis in 2027, driven by the company’s internal resources.
The operational improvement strategy focuses on four areas: step-by-step optimization of the supply chain, global streamlining of the dealer network, narrowing the gap in valuation for used equipment, and improving product quality.
CNH Industrial upgraded its rating to “Outperform” from Evercore ISI and Baird. The company also raised its 2026 forecast thanks to improved tariff conditions and ongoing cost-reduction initiatives.
3. Deere & Company — Deere is betting on the precision-agriculture ecosystem, evolving from a set of individual functions into an integrated operating system for farming operations.
The company introduced an AI assistant, JD, built into the Operations Center, enabling farmers to get analytics through natural-language queries.
DE introduced the See & Spray Gen 2, expanding the technology to additional crops and fungicide applications, and quantifying yield gains. The technology is currently used on 4.5 million acres.
Deere & Company reported third-quarter results that beat expectations, with agricultural equipment margin coming in above forecasts. The company also received an upgrade to “Outperform” from Evercore ISI and Baird.