AGCO AGCO Corp

Agco Corp. (AGCO) has adopted a more-cautious outlook than competitors for global market demand in 2011 because it is still too early to change guidance, the world's third-largest agricultural equipment manufacturer's Chief Executive Martin Richenhagen said Sunday.

Illinois-based rival Deere & Co. (DE), the world's largest maker of farm equipment by sales, is more optimistic than Agco, Richenhagen acknowledged on the sidelines of a conference in Paris.

On Feb. 16, Deere offered industry forecasts for farm-machinery sales that were noticeably more bullish than those released by Agco a week earlier.

"We are in line with Deere for the U.S. but more conservative for Brazil, which we know pretty well, and especially Europe, a very important market for us," Richenhagen told Dow Jones Newswires. "Europe is a market which is very difficult to predict. It is very fragmented and it really went down in 2009. We see signs of recovery, we have strong order books, but it is too early to change our guidance," Richenhagen said.

Richenhagen said Agco would release new forecasts in April.

The Georgia-based company reported on Feb. 8 that fourth-quarter profit more than doubled to $85.2 million, or 87 cents a share, but said it expected only a modest increase at best in worldwide demand for farm machinery this year.

In South America, where Agco is the market leader in tractors, the company said it sees equipment demand softening this year as the Brazilian government scales back some of the loan assistance offered to farmers in recent years to purchase equipment.

Meanwhile, in North America, Agco expects industry-wide demand for machinery to be flat in 2011, after strong sales growth in 2010 that was likely propelled by higher prices in 2011 for additional emissions-reduction components.

Agco sees modest improvement in demand in western Europe as farmers there benefit from rising prices for grain and dairy products.

-By Angeline Benoit, Dow Jones Newswires; 33-1-40-17-17-66; angeline.benoit@dowjones.com

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