AGCO will discontinue production of its SpraCoupe self-propelled sprayer at the end of May 2013. The high cost of Tier 4 Final compliance and the shrinking popularity of smaller-capacity sprayers factored heavily into the decision.
"Every manufacturer that has an engine is being taxed with complying with Tier 4 emissions," says Greg Milstead, director of sales for AGCO’s application equipment division. It was a very difficult decision to make, he says. But in order to install AGCO Power engines in future SpraCoupe models, the company would have needed to change the design of the machine significantly, driving up engineering and manufacturing costs.
SpraCoupe represents the smallest of AGCO’s three sprayer brands, with 4000 Series (400 gallons) and 7000 Series (700 gallons) models. The larger RoGator and TerraGator brands will continue to be manufactured at the company’s Jackson, Minn., plant.
AGCO acquired SpraCoupe in 1998. The brand celebrated its 50th anniversary in 2012, and Milstead points out that the brand still fits well in certain niche areas. A number of cotton producers use SpraCoupes for their crops, though the equipment is used throughout the U.S.
The shrinking market space for small-scale sprayers became the line in the sand that drove this business decision, Milstead says. A majority of SpraCoupes had been manufactured with 400-gallon capacity. Across the industry, sprayers of that size have held a flat market share of 5% to 7% over the last three to four years, he says. AGCO expects that market to drop significantly by 2016.
By contrast, larger-capacity sprayers with capacities of 1,200 gallons and up are expected to command upwards of 30% of the total market by 2016, Milstead says. That’s up from under 5% in 2002. Additionally it is projected that machines with over 800 gallon capacities will represent almost 90% of the sprayer market by 2016.
"Demand for larger machines is staggering," Milstead says. "It’s really a great business to be in right now where the industry remains very strong."
The ramped-up demand reflects the changing landscape of agriculture. Acreage is growing on individual farms, and producers are demanding higher-capacity machines to cover more space in less time. Additionally, farmers are purchasing bigger sprayers once used primarily by commercial applicators. The same is true for tractors and combines, he says.
No more orders will be taken for SpraCoupe sprayers because the production is full and additional orders would prevent AGCO from meeting Tier 4 compliance, Milstead says. Manufacturing of SpraCoupes will stop around the end of May 2013.
AGCO will continue to manufacture SpraCoupe parts, which will remain available to customers along with professional service support from their current SpraCoupe dealers, Milstead says. AGCO did not cancel any SpraCoupe contracts when it decided to discontinue the brand later this year. That means farmers who need repairs can continue to get service as long as parts are available.
"It’s important for everybody to note that we didn’t cancel any SpraCoupe dealers," he says.
In line with industry trends showing a growing market for larger-scale sprayers for farmers, RoGator and TerraGator sprayers will continue to be manufactured. The company intends to manufacture more of them in the future than it does today to satisfy that growing demand, Milstead says. AGCO is operating on a five-year strategic plan for its sprayer brands.
No manufacturing jobs will be lost as a result of the transition, Milstead says. The company is looking to hire additional workers at its Jackson facility, he says, and that is a great example of how agriculture continues to help grow the overall economy, mainly in rural America.
SpraCoupe celebrated its 50th anniversary in 2012, and Milstead points out that the brand still fits well in certain niche areas. A number of cotton producers use SpraCoupes for their crops, though the equipment is used throughout the U.S.