Duluth agricultural equipment manufacturer AGCO Corp. has seen an increase in global sales due to a rise in demand for ethanol, a biofuel made from corn or sugar, according to a product manager for one of the company’s lines of tractors, Matt Rushing.

Product manager for AGCO’s North American tractors, Mr. Rushing told GlobalAtlanta that most of the tractors built by AGCO in South America are being sold for sugarcane production.
He also noted that the European Union inadvertently supports AGCO’s sales there by offering tax breaks and incentives to use biofuels, adding that Germany is one of the company’s strongest European markets.

“Biofuel has been a big boost for our business in that anyone who harvests corn or sugarcane is looking to make it into ethanol,” he said.

AGCO’s sales of tractors in Brazil are up 31 percent from April last year, and sales of combines have increased 57 percent since this time last year, according to company records.

North American farm equipment sales in general, however, increased only 3 percent from 2006 to 2007 on a year-to-date basis through March, according to Goldman Sachs Group Inc. reports.

AGCO is currently the market leader in Brazil, Mr. Rushing said, with manufacturing plants in the cities of Canoas, Mogi das Cruzes and Santa Rosa.

“Between the Massey Ferguson and Valtra brands, we sell more tractors than anyone else. We’re a major player in South America,” he said, noting that equipment for sugarcane production is especially popular in Brazil, where cars run on ethanol.

In Europe, AGCO sells four brands of tractors and combines that can be used in the harvesting of canola or rapeseed grains, which produce biofuel, rather than ethanol, Mr. Rushing said.

AGCO’s large hay bailers are used to collect biomass, including tree bark and limbs, to burn or ferment, in addition to grains to make biofuels.

Mr. Rushing said that there is no difference in the machinery used to harvest crops used for biofuels than for those harvesting any type of crop, but demand for that equipment has increased because of the demand for biofuels.

He also said that as long as the global price of petroleum remains high, he foresees an increased demand in Europe and the United States for alternative fuel, thus supporting farmers who grow crops for biofuels.

The four-wheel drive tractors Mr. Rushing sells globally also use biofuels to operate. All AGCO tractors under 240 horsepower use B20, a biodiesel blend that is 20 percent by volume biodiesel and 80 percent by volume petrodiesel. Any machine with more horsepower uses B5, which contains 5 percent biodiesel, he said.

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AGCO Corp. –
Cheryl Thompson, corporate public relations manager (770) 232-8073