Metro Atlanta-based AGCO, one of the world’s largest farm equipment makers, said that with the coronavirus outbreak, “production has been significantly reduced or suspended in several” of its European factories.
And it expects additional production disruptions to its operations in other regions of the world, the Duluth-based company disclosed in a press release Monday. Other major agriculture equipment makers have warned of similar problems.
AGCO said the issue with its facilities in Europe are “largely due to material shortages and constraints in the European supply chain.”
Martin Richenhagen, AGCO’s chief executive officer, said in the release that “AGCO’s equipment is key to sustainable food production across all phases of the crop cycle and extends to animal protein production.”
“Demand for grain and protein will continue during this crisis,” Richenhagen said, “and AGCO will continue to prioritize support of our dealers and farmers to help promote food security.”
An AGCO spokesperson wrote to The Atlanta Journal-Constitution that “most of the countries we operate in are prioritizing all phases of the food cycle and related business. We are doing our best to keep our farmer customers up and running.”
U.S. Secretary of Agriculture Sonny Perdue told a radio station last week that the nation’s overall food system is “alive and well.” Sparse product availability on some grocery shelves is “a demand issue, not a supply issue,” he said.
The bulk of AGCO equipment sold in the U.S. is made at company facilities in the U.S., according to the company.
The bulk of AGCO equipment sold in the U.S. is made at company facilities in Illinois, Kansas and, Minnesota and Illinois, according to the company.
AGCO’s main brands are Challenger, Fendt, GSI, Massey Ferguson and Valtra. Citing the outbreak “and the lack of certainty of both the duration and magnitude of its impacts,” the company withdrew its earlier guidance on expected sales and earnings.
Meanwhile, farm equipment giant John Deere on Monday said in a government filing that it “will continue its domestic operations and plans to continue to operate in other parts of the world to the extent possible. These operations, however, may be affected by issues such as remote working arrangements, adherence to social distancing guidelines, and other COVID-19-related challenges.” Already, it wrote, some facilities are reducing operations or temporarily closing.
Reuters recently reported that another major vehicle manufacturer, CNH Industrial, was suspending most of its European assembly operations for two weeks as a result of supply-chain challenges.
Supply issues threaten to become a broader problem for many industries as workplaces around the world shut down or scale back. Kia Motors briefly halted production at its vehicle assembly factory in Georgia due to supply-chain issues. The company didn’t specify whether the problem related to disruptions from the coronavirus.
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