AGCO CEO says he expects grain shortages to persist into next year
The global grain shortage is likely to last through the end of this year and into next year. AGCO Corp CEO Eric Hansotia told CNBC’s Jim Cramer on Monday.
“There isn’t enough grain in the world, and there won’t be for the rest of this year and maybe even next year. We have to have a huge harvest this year and next year just to shrink. grain disparity,” Hansotia said in an interview above.Crazy money. “
The chief executive said the agricultural machinery maker had the largest bank of orders in history, up 30% year-over-year in Europe and 20% up in the United States.
The industry’s supply-demand gap stems from a similar recovery in demand for products and services globally after the peak of the Covid pandemic. According to Hansotia, suppliers could not keep up with demand because of the shutdown.
Complicating matters is the pressure of the Russo-Ukrainian war on the global grain supply. However, a ship left Ukraine for Lebanon on Monday, marking the first voyage by a ship carrying Ukrainian grain through the Russian navy-dominated Black Sea since the war began. according to Reuters.
Hansotia added that although AGCO saw some remission in the second half of the year, challenges remained.
“Basically, there are semiconductor chips in everything that we make,” he said. And that’s probably the biggest challenge left for us.”
On the other hand, the company projects 30% growth this year in the precision agribusiness as farmers want to innovate.
“Farmers have never been under more pressure to produce more, but their input costs are so high, so they want to do with less inputs… the only way to solve the problem,” says Hansotia. That process is technology and accurate ag.
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