A baler is a large piece of farm machinery that doesn’t move that fast on the road, but it is leading Agco’s Hesston plant to strong growth.
On Thursday, the plant, which has been making square balers since 1978, marked the production of its 25,000th square baler with a celebration.
A square baler can cut, gather, compress, bind and drop 1-ton square blocks of plant material every few seconds.
All of Agco’s global baler production is in Hesston. Workers there produce eight a day, along with the company’s combines and planters.
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What makes square balers sexy is that they are part of a dramatic change in global food demand and production.
At the end of the celebration, company officials handed the keys to the baler to Bill Levy, founder and president of Pacific Ag Solutions, an Oregon company that collects hay, forage and crop residue, such as corn stalks.
Levy needs 70 of the balers to collect millions of tons of hay and grass from contract farmers. Much of the hay is exported overseas on container ships headed to China, Japan and the Middle East.
There it is fed to livestock, which produce the meat, milk and other dairy products for billions of people in emerging markets. As emerging populations grow wealthier, they demand more chicken, pork and beef.
And the square baler is one of the key machines underpinning that revolution.
The baler also underpins another possible revolution – ethanol made from cellulosic plant materials such as wheat straw and corn stalks. Levy collects and sells millions of tons of that.
The federal government is interested in developing ethanol that doesn’t come from corn kernels and provides substantial subsidies for cellulosic ethanol.
It means two strong markets for the balers, Levy said.
“I said when we bought our first baler that we run Hesston because we can’t afford down time,” Levy said. “And that’s still true today.”
The Hesston-made balers are seeing strong growth in 2013, said Steve Koep, Agco’s vice president for sales in North America.
Agco, the third-largest farm machinery maker in North America, expects to see an overall drop in sales of 5 percent in 2013, Koep said.
But the Hesston plant will likely see an increase in sales, with small increases from new combine and planter models, plus the strong worldwide demand for balers.
The baler allows commercial farmers to produce hay cheap enough to ship around the world, Koep said.
“It’s been the answer to the efficiency question,” Koep said.