Agco forecast "strong demand" for farm equipment this year, painting a brighter picture than rival CNH Global, as the maker of Massey Ferguson tractors unveiled forecast-beating results and set course for sales above $10bn.

Agco, whose other brands include Fendt and Vasltra, said that "positive farm fundamentals", including "attractive" crop prices, would underpin demand for agricultural machinery.

"Robust farm income across all major global agricultural markets is supporting elevated demand for farm equipment," Martin Richenhagen, the group's chief executive, said.

Industry volumes in North America would grow by up to 5% in 2012, higher than the flat performance that CNH Global, the maker of Case and New Holland machinery, forecast last week.

Agco was more upbeat than CNH on the South American market too, if acknowledging that a small decline in sales may be on the cards in the region from the elevated levels achieved in 2011.

Record revenues ahead? 

Agco said that its own revenues would cross $10bn next year for the first time, implying a rise of at least 14%, lifted by increases in market share and the impact of acquisitions, such as silos maker GSI Holdings bought last year.

Full-year earnings will hit $5.00 a share, a rise of 12% on the underlying result for 2011.

"As we move into 2012, we remain optimistic about Agco's ability to take advantage of the positive long-term demand drivers for our industry," Mr Richenhagen said.

The group's financial forecasts were marginally ahead of Wall Street expectations.

New products

Agco beat market forecasts for its earnings for the October-to-December quarter too, raising earnings per share to $1.44 a share, excluding one-off items, from $0.88 a share a year before.

Investors had expected a $1.33-a-share result.

Revenues rose 16.1% to $2.52bn, just shy of Wall Street estimates, led higher by a 29% jump in North American takings, where the group enjoyed the fruits of "an aggressive new product introduction programme" during 2011.

Agco shares, which had risen strongly in the run up to the results, closing on Monday at their highest since May, fell 4.1% to $51.51 in early deals in New York.