AGCO, the maker of Massey Ferguson, Fendt and Valtra farm machinery, saw its third quarter profits fall in the face of challenging farming conditions in the US and South America, as well as significant uncertainty in the global trade arena.

On Tuesday, AGCO announced third quarter pre-tax profits of $79m (€71m), which was down 8% year on year. Operating profits for AGCO were back 5% year on year to $106m (€95m), while operating profit margins held steady at 5%.

Sales for the third quarter fell 5% to $2.1bn (€1.9bn), mainly due to a sharp fall (-15%) in tractor and combine sales in South America. Sales in the US were down 2% year on year, while sales in Europe were also back 1.6%.

Martin Richenhagen, chief executive at AGCO, blamed the weaker sales on adverse weather conditions and the simmering trade tensions between the US and China.

“Farming conditions continue to be challenging in many of our key markets. A late harvest and early winter weather are pressuring corn and soybean harvests in North America. The prospect of lower yields and the uncertainty regarding the outcome of trade negotiations are both contributing to weak demand of large farm machinery,” said Richenhagen.

“Varied forecasts for crop production and ending inventories of grain have created uncertainty in the short-term, but have recently moved grain prices higher. In addition, government trade negotiations and farm support policy are heavily influencing farmers’ confidence and equipment buying decisions,” he added.