Upstream Ag Insights - February 10th 2025

Essential news and analysis for agribusiness leaders.

February 10, 2025 • Read Time: 18 minutes

Welcome to the 250th edition of Upstream Ag Insights—the most trusted resource for strategic insights by over 19,800 agribusiness leaders. Below you’ll find the most critical industry news, strategic frameworks, and detailed analysis designed to give you a competitive edge and satiate your curiosity.

Index

  1. FY 2024 Ag Equipment Manufacturer Earnings Highlights and Analysis

    1. John Deere Expands Options for Adding Precision Technology 

  2. FMC Q4 2024 Earnings Call Highlights and Analysis

  3. The Rise of Biologicals and Specialty Fertilizer: A Report on Agribusiness Strategy, Progress and Initiatives

  4. Q4 2024 Crop Input Company Results Summary for Week of February 3rd: Corteva, FMC, UPL, Nufarm, Lavoro and Yara International

  5. Model Capacity and Agronomic Prowess: Measuring What Matters

  6. Landus and TalusAg Deliver First Local Green Ammonia Production in North America

  7. Have Dealers' Opinions on Autonomy Changed in 2025?

  8. The Mimetic Trap

  9. Other Interesting Ag Articles (7 this week)

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Index

  1. Key Themes, Takeaways and Trends

    1. 2024 Market Overview

    2. 2025 Ag Equipment Outlook

    3. Inventory Reductions

    4. Tariffs

    5. Precision Spraying Takeaways — John Deere and AGCO Highlights, But Where’s CNH?

  2. 2024 Company Overviews

    1. AGCO

    2. CNH Industrial

    3. John Deere

  3. 10-Year Trend Chart Comparisons

    1. Revenue

    2. R&D Expenditure

    3. SG&A to Sales Ratio

    4. Return on Equity

    5. EBITDA Margin

    6. EBITDA

a. 2024 Market Overview

According to AGCO CEO Eric Hansotia, 2024 was one of the worst on record for equipment manufacturers:

The North American industry decline in 2024 was the worst single year decline since the downturn in 2009, associated with the financial crisis.

The ag equipment sector faced a very difficult 2024, with major manufacturers experiencing steep declines in revenue, compressed margins, and ongoing inventory challenges due to weak farmer demand and high dealer inventory levels.

AGCO, CNH Industrial, and John Deere all reported double-digit revenue declines across their large ag equipment segments, driven by lower commodity prices, rising interest rates, and cautious farmer sentiment.

The overall reduction in large tractors was 22% for FY 2024:

AGCO saw full-year revenue decline 19.1% YoY to $11.7 billion, with adjusted operating income dropping 39.8% as North American large ag equipment sales fell nearly 25%. Inventory management was key, as AGCO reduced production hours by 33% in Q4 to align with retail demand.

Similarly, CNH Industrial’s agriculture segment saw revenue fall 23% to $14 billion, with EBIT margins compressing to below 9% from 14.5% the previous year. Dealer destocking and a 34% decline in North American large tractor sales contributed to CNH’s production cuts, which were down 34% YoY in Q4.

John Deere, saw total revenue shrink by $10 billion in 2024, with operating margins dropping to 18.3%. Their Production & Precision Ag segment was hit hardest, with sales declining 22% YoY, including a 17% drop in the U.S. and Canada and a 40% decline in Brazil.

b. 2025 Ag Equipment Outlook

For 2025, manufacturers expect continued weakness.

John Deere is forecasting 30% reduction in North American large-scale tractor sales for 2025.

AGCO expects North American large ag to remain the most challenged in 2025 down ~25% year over year. AGCO expects sales to be down to $9.5 billion with Adjusted Operating Margins declining further to 7.0%-7.5%.

AGCO executives on H1 margin outlook:

With the level of underproduction that we're expecting to see in the first quarter, North America would likely be in a negative margin

CNH North American large tractor sales expected to decline between 25% and 30% with combines down 20%-25% and margins in the 8.5-9.5% range

CNH 2026 outlook:

We assume retail demand in North America to first bottom out and then maybe slightly, but only slightly increase again in '26.

c. Precision Spraying Takeaways — Deere and AGCO, Where’s CNH?

For a full breakdown and comparison of AGCO Spot Spraying business model compared to John Deere See & Spray, a look at Tariff commentary from AGCO and CNH Industrial, a look at inventory efforts at retail and comparing new and used, become an Upstream Ag Professional member:

John Deere announced the release of a new precision ag hardware kit – Precision Essentials – that will reduce upfront costs, making advanced precision agriculture technologies accessible to farmers, growers and ranchers, regardless of the farm size, crop or livestock focus. The new kit includes the following hardware:

Farmers can now retrofit legacy John Deere equipment and mixed fleets.

The bundling of and agility surrounding payments is something I have heard Deere individuals tell me has been positive for the business, and something that they have commented on publicly in 2024 as being successful for them. From their Q3 2024 earnings call:

There's been quite a bit of discussion about our pay-per-use model. The reality is that we're seeing higher levels of adoption using this model compared to our traditional upfront pricing approach.

Take our Precision Ag Essentials kit, which includes 3 foundational pieces of technology, guidance, connectivity and onboard compute needed to run any of our other precision technology solutions. We recently changed the pricing model from a onetime cost to a recurring license that allows customers to access the vital technology at a fraction of the traditional upfront investment. In the first year alone, we sold over 8,000 kits. And these kits are being installed on equipment with an average model year vintage of 2012.

Commentary from AGCO takes a different view:

Farmers continually tell us that they have different appetites in different parts of the cycle. And when they want to purchase something, they'd like to finance it and get it all purchased in the good years. And then when the lean years come, they'd like to minimize their ongoing costs.

I suspect if a farmer wants to pay for the hardware up-front, Deere dealers won’t argue with them— Deere is simply creating the option for farmers.

The Precision Essentials Kit recurring payment also illustrates a component that is going to fall under “recurring revenue” in their ambition for 10% of their revenue as recurring by 2030.

FMC released its Q4 2024 results this week with their stock dropping ~35% on the news.

They did not beat expectations, but what really drove the sell-off was FMCs future outlook, suggesting a reset in early 2025, with inventory challenges persisting in various countries (eg: LatAm, Canada), more acknowledgement of the generic challenges with it’s flagship molecule, Rynaxypyr, and emphasis on a shift in route to market in Latin America, where 33% of their revenue comes from today, down from 2022 when it made up over 36% of the business.

Index

  1. Q4 2024 and FY 2024 Results Summary

  2. Q1 2025 Outlook

  3. Misjudgment: Inventory and Processes

  4. The Diamides

    1. Types of Diamide Sales

    2. New Diamide Manufacturing Initiatives and Generic Pressure

  5. More Misjudgment: Intellectual Property and Blue Orca Accuracy

  6. New Product Growth

  7. Inventory and Routes to Market

Full Year 2024

For the full year 2024, FMC's revenue totaled $4.25 billion, representing a 5% decline compared to 2023, or 3% lower on an organic basis.

The company attributed this decline to pricing pressures across all regions, a 2% FX headwind, and channel inventory corrections. However, volume growth remained a positive factor, with new active ingredients fluindapyr and Isoflex contributing significantly, generating approximately $130 million in sales.

Regionally, North America delivered the strongest performance. Latin America, however, declined by 10%, largely impacted by channel destocking and dry weather in Argentina and Mexico. Asia saw a 10% revenue increase, supported by strong sales of Isoflex herbicide and branded Cyazypyr® products, while EMEA posted an 18% YoY revenue gain, driven by higher volumes in most countries​.

Looking ahead to 2025, FMC expects revenue between $4.15 billion and $4.35 billion.

The FMC earnings call felt more like an Investor Day — FMC set the stage for how they will change their route to market in regions like LatAm, talked about new manufacturing efforts of their diamide molecules to execute their post patent strategy and discussed their “growth” portfolio expectations for the next few years including biologicals business.

For the full highlights and analysis, become an Upstream Ag Professional member:

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Recently, I went through the largest fertilizer and crop protection companies annual reports, quarterly earnings calls and historical announcements to aggregate key insights about each entities biological and specialty product strategy and business, including partnerships, investments, acquisitions, current revenues and targets and what they might do next.

The link above is an overview of not only all of the companies businesses, but an overview of what’s driving the interest in biostimulants, biocontrols and specialty fertilizer products. The report has more than 25 images to help illustrate what is happening in the world of biologicals.

Index

  1. Agribusiness Comparison Snapshots

  2. Largest Bio-based and Specialty Acquisitions to Date

  3. The Rising Demand for Bio-Based Crop Inputs and Specialty Nutrition Product: Four Key Drivers of Market Growth

  4. Company Overviews

    1. Yara

    2. Mosaic

    3. Nutrien

    4. ICL

    5. Corteva

    6. BASF

    7. Bayer

    8. Syngenta

    9. FMC

Agribusiness Snapshots

For a full detailed breakdown, including analysis, useful images and insightful quotes from company executives, become an Upstream Ag Professional member

Each quarter in Upstream Ag Professional, I shrewdly analyze publicly traded agribusiness earnings, cutting through the noise to highlight the key takeaways that matter for those working in the ag industry.

By breaking down earnings results and executive commentary, I provide the strategic insights agribusiness professionals need to stay ahead.

This week is just one portion—more deep dives on the most influential agribusinesses, their market positioning, and strategic initiatives will be released in the coming weeks.

If you want to satiate your curiosity and be the best-informed in the industry, you’re in the right place. Become an Upstream Ag Professional member for full access to every breakdown.

Corteva

Corteva’s Q4 2024 revenue grew 7% YoY to $4.0 billion, with organic sales increasing by 13% and operating EBITDA surging 36% to $525 million.

The seed segment performed well, with full-year revenue of $9.5 billion, driven by price gains and market share expansion in North America and Brazil.

Enlist E3 soybeans reached 65% market penetration, strengthening Corteva’s leadership in soybean technology.

Crop Protection revenue declined 5% YoY for the full year but showed strong Q4 margins due to increased sales of spinosad and fungicides.

CP revenue coming in at $7.36 billion, or about 43% CP and 57% seed for Corteva’s business. If we look at operating margin, 64% of operating margins are coming from seed, compared to ~36% from CP.

UPL

UPL’s Q3 FY25 revenue rose 8% YoY to $1.02 billion, with EBITDA soaring 132% to $199 million, driven by a favorable product mix and cost reductions. North America posted a 67% revenue increase, while Latin America grew 12%, supported by strong fungicide and insecticide sales. The seeds segment (Advanta) expanded 11%, though margins were pressured by crop mix and higher production costs.

UPL’s differentiated and sustainable portfolio grew 16%, reflecting a shift toward higher-margin products. The company noted that destocking has largely been completed and that improved process efficiencies have strengthened margins, with expectations for continued growth in differentiated and sustainable products.

Yara

Yara’s Q4 2024 revenue declined slightly to $3.4 billion, with EBITDA falling 10% YoY to $519 million, mainly due to lower nitrogen upgrading margins.

The company reported a net loss of $290 million, reversing a $246 million profit in the prior year. Fertilizer deliveries rose 22% in Europe, while North American deliveries increased by 4%, but the Americas saw a 22% EBITDA drop due to weaker margins. Yara achieved record-high fertilizer production, with ammonia output at 7.18 million tonnes and finished fertilizer reaching 19.69 million tonnes. Looking ahead, the company anticipates rising fertilizer prices in early 2025 due to tight nitrogen markets, though higher natural gas costs pose a challenge.

Every time I see an update, I wonder: Does one model being 2% better improve the outcomes for agribusinesses? For farmers? For singular agribusiness professionals?

Jeff Bezos likely doesn’t have the highest IQ in the world. Neither does Bernard Arnault. Elon Musk was a strong student, but not exceptional across the board—he focused on what mattered to him, disregarding what didn’t.

What makes these individuals—and likely the most valuable people on your team—effective isn’t raw intelligence measured by standardized tests. It’s their intangibles: grit, sales skills, conscientiousness, leadership, creativity, communication, how they work with others and more. The things that aren’t easily quantified.

Yet, when it comes to AI, we emphasize model benchmarks—how Model X outperforms Model Y in agronomy evaluations, legal reasoning, or coding challenges. Their raw intelligence. But does that really matter for your business or the value you personally can derive?

The promise of LLM based AI in my mind isn’t its ability to answer agronomy questions.

The question is whether an LLM can automate monotonous tasks, reduce costs, or improve efficiency without needing to drastically change what you or your team are currently doing, delivering better business outcomes.

Become an Upstream Ag Professional member to read about mechanistic vs. complex adaptive systems and why that matters for LLMs in agriculture, a tech stack illustration showing which layer is the important one to pay attention to, and how agribusinesses can think about equipping their teams to think critically about LLMs for their business:

Landus, an Iowa-based agriculture solutions company, and TalusAg, an agriculture technology company, announced that they have successfully commenced commercial green ammonia production with the first and only modular systems in North America. Local, domestic production of green ammonia enabled by TalusAg’s rapidly deployable systems ensures cost-competitive, reliable and sustainable fertilizer supply for American farmers.

Talus Ag and the Distributed Production Market

TalusAg launched North America’s first local green ammonia production facility in Iowa in 2024​.

Talus has raised a $22 million Series A, with investors including Material Impact and Xora Innovation (Temasek), as well as Cavallo Ventures (the CVC of Wilbur-Ellis).

For a look at the technology behind TalusAg, how it compares to competitors like Nitricity, a look at potential revenue models, analysis of how many acres one system can do, the challenges in scaling distributed production efforts in nitrogen fertilizer, and more, become an Upstream Ag Professional member today:

Nearly 50% of dealers responding to a Precision Farming Dealer Benchmark Survey said it’s very likely they’ll invest in autonomy over the next 2 years, while 25% said it’s somewhat likely, 16% somewhat unlikely and 8% very unlikely.

That’s up slightly compared to last year’s survey.

How important are autonomous vehicles/robotics to increasing precision revenue in the next 3 years?

25% said very important, 33% somewhat important,16% neutral, 16% somewhat unimportant and 8% very unimportant.

Non Ag Article

The Mimetic Trap - Colin Lewis

We like to believe our desires are uniquely our own, formed from an inner wellspring of autonomy. Girard, however, upended this assumption. He demonstrated that human desire is inherently mimetic, we do not desire independently but rather by imitating the desires of others. This invisible mechanism structures social interactions, economic systems, and even conflicts.

Other Interesting Ag Articles