Agco Corp., the second-biggest U.S. maker of farm equipment behind Deere & Co., plans to break ground at the end of the first quarter on a tractor factory in Minnesota, Chief Executive Officer Martin Richenhagen said.

Agco expects to invest around $50 million to build the factory as part of its plans to expand in North America, Richenhagen said. The new factory will be in an existing Agco manufacturing site in Jackson, Minn., where the company makes self-propelled sprayers and Challenger track tractors. Projections call for the production of 2,000 tractors in 2012 and 10,000 to 12,000 tractors annually in three to five years.

The plant is scheduled to be completed by the end of 2011. It will produce 200- to 300-horsepower tractors for the Massey Ferguson and Challenger brands, mainly intended for North American farmers. The company currently imports such tractors from its European factories to sell to U.S., Canadian and Mexican farmers.