AGCO CEO states he anticipates grain lack to last into next year

Global grain lacks will likely last through completion of this year and into next year, AGCO Corp CEO Eric Hansotia informed CNBC’s Jim Cramer on Monday.

“There’s just not enough grain in the world, and there won’t be for the rest of this year and probably even into next year. We have to have a tremendous harvest this year and next year just to close that gap on the grain gap,” Hansotia stated in an interview on “Mad Money.”

The president stated that the farming equipment producer has the most significant order bank in its history, up 30% from in 2015 in Europe and up 20% in the United States.

The market’s supply and need space comes from the very same international rebound of need for services and products following the height of the Covid pandemic. Suppliers weren’t able to stay up to date with need since of shutdowns, according to Hansotia.

Complicating matters is the Russia-Ukraine war’s pressure on international grain materials. However, a ship left Ukraine for Lebanon on Monday, marking the very first passage of a ship carrying Ukrainian grain through the Russia navy-dominated Black Sea considering that the war’s beginning, according to Reuters.

Hansotia included that while AGCO sees some relief in the 2nd half of the year, obstacles still stay.

“There’s semiconductor chips in essentially everything that we build. And so that’s probably our biggest challenge remaining,” he stated.

On the other hand, the business anticipates 30% development this year in its accuracy farming company as farmers aim to innovate.

“Farmers have never been under more pressure to produce more, and yet their input costs are up, so they want to do with less inputs … the only way to solve that equation is precision ag and technology,” Hansotia stated.

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