Q&A: Eric Hansotia, CEO of AGCO

Eric Hansotia has been all-in on farm-ing his whole life. He grew up on a dairy farm in Marshfield, Wisconsin; was the president of his local 4-H chapter; and was involved with FFA and the Wisconsin Junior Dairymen's Association before earning two master's degrees during his college career.

Hansotia has been with AGCO for the past nine years, after 12 years at John Deere. He began work with AGCO in harvesting and precision ag, later expanding to all machinery, excluding tractors. In January 2021, Hansotia became CEO and chairman for AGCO.

SF: What are some of AGCO's major initiatives in 2023?

EH: In the short term, it's a lot about getting the parts in to be able to build machines. We have more [customer] orders now than we've had in the history of the company. One of our toughest components to acquire are semiconductor chips. Rather than the usual cost of $10 to $20, our last batch cost $1,400. Crazy high prices, but we decided, "We're going to bite the bullet and pay that high price."

SF: What part does automation play in the future of AGCO machinery?

EH: The biggest focus for the company is to become the trusted partner for industry-leading smart-farming solutions by auto-mating the various elements of the machine function. We have a list of about 150 functions we're working our way through to make it easier on the operator by having the machine sense when the conditions are changing with onboard calculations, and take control when the operator decides to put it in autopilot mode. We've increased our engineering spending by 20% each of the years I've been leading the company. We bought six technology businesses last year and invested in two more. For the future, we're looking to sustainability even more, and precision agri-culture is an element of that — don't waste any inputs, and get the most output you can. Making the most out of carbon sequestration and helping farmers take advantage of it is the next chapter.

SF: Is driverless autonomy in AGCO's near future?

EH: Anybody that's been in a big tractor or combine knows it's al-ready pretty much driving for it-self. The challenge is automating all those things that the operators still do. Instead of driverless autonomy, our focus is making the machine able to handle task after task. The nice thing is, those are all stepping stones to the ultimate driverless [machines]. Whether a farmer wants to take advantage of the short term of these features, or those few that want to go driverless in the future, it's the same investment. We think that within the next few years, autonomy will start showing up, but today it's so limited in application that it's going to have low market penetration.

SF: California is banning the sale of new gasoline-powered cars and light trucks by 2035. Do you think that will affect the agri-culture industry?

EH: It's coming. Between Europe and North America, there's a push through regulation. Whether it's in automotive with highway trucks or on the farm, all of them are going to get pressure. One way is through gas pipe emissions. Otherwise, especially in Europe, there's a lot of bills being discussed and probably going to be implemented next year, limiting how much chemical gets put down — less fertilizer, less pesti-cide, less herbicide — they're going to significantly reduce that for the farmer. We have to help the farmer figure out that equation about how to continue to farm profitably while these restrictions come into play.

SF: What are you hearing from farmers right now?

EH: If there's ever a year where you had to say, "Is [climate change] real?" this is the year. Europe, North America, China, South America: all have big chunks of their territory under massive drought, and at the same time, there are big floods happening. I'm afraid these kinds of climate events are part of farming, more frequently and more severely than in the past. So farmers are going to have more risk, more volatility, more things to manage. We're trying to help them figure that out. What does that mean in terms of how you plant, how you manage the crop during the crop season, how you manage risk?

SF: Is this why AGCO has so much focus on precision agriculture?

EH: The whole precision ag focus is on steroids right now because of the pressure farmers are under. They're having to produce more, but the inputs are so expensive or not available. There's more thirst right now for precision ag than I can remember. We're pushing our teams as hard as we can to get those products out into the market as fast as possible.