HANNOVER, Germany — A slower agricultural market has not deterred growth at John Deere.
The company recently acquired two planting equipment companies: Precision Planting in the United States and Monosem in France.
Monsanto made news a few years ago when it got into the business of farm machinery, agronomy and data by buying Precision Planting for US $210 million and then Climate Corp. for $1 billion. Precision Planting became part of Climate Corp.
Climate Corp. president Mike Stern told a recent news conference that his division of Monsanto decided to get out of the machinery business and focus on providing software services to producers and agronomists.
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John May of Deere said in an interview the machinery maker hopes the Precision Planting acquisition will give planter users a reason to upgrade existing machines or buy new technology.
“It’s important to give producers new tools that will let them be more efficient and/or allow them to produce bigger yields,” he said.
May said Precision also has a corporate culture of quickly getting to market with innovative technologies and responding to farm technology changes. Deere could benefit from the small company’s abilities in this area, he added.
Precision will continue to supply retrofit and original equipment manufacturer products to other companies.
Monosem, a family owned planter business, has been making inroads into Canada and the northern U.S. Great Plains with planters that can singulate canola seed and has a good reputation in corn and bean country.
Deere takes the company’s four European and two American factories and said it plans to keep the brand name.
It said the Monosem purchase further enhances Deere’s technology. Monosem’s planters can handle fine seed crops such as onion and sugar beet, which creates new opportunities for Deere.
The equipment is also known for paired row planting systems and its ability to provide precise down-force on the seed row.
The Monosem purchase is considered an important expansion in Europe, where the company is a major player, said Hans Bystrom, an equipment dealer and international machinery trader from Holland.
“We are seeing tighter sales, just like in Canada and the States. We are seeing a bright future, and when companies like Deere are investing in growth, it reinforces our decisions to do the same,” he said during the lead-up to Agritechnica, the world’s largest farm show.
“This is a cyclical business.… Deere has been around forever and I am sure is doing these buys to prepare for the next wave of sales and good times in agriculture.”
Deere has been adding new lines of machinery, such as its self-propelled fertilizer applicator with a likely release next year, and partnering with software technology providers, including last month’s deal with DN2K to develop a new data platform for agrologists and crop advisers.
Deere and DN2K are creating SageInsight, which will build on MyAgCentral, DN2K’s software system for crop consultants and input dealers, and integrate with the John Deere Operations Center, with which farmers are familiar.
May said Deere’s purchase of Precision Planting will also closely link it with Climate Corp. as new products are developed around Deere’s application programming interface.
The same is true for the DN2K project, defying long-time industry suggestions that Deere won’t let others into the back end of its software systems.
Climate Corp. will have an exclusive agreement to transfer data between Deere machinery and its FieldView software, at the farmer’s discretion.
The deal also creates an entry point where Climate’s software, on an iPad or laptop, can connect with the sensors and controls on Deere’s farm equipment.
The new relationship enhances farmers’ ability to move data in near real-time between farm office, machinery, agronomy consultants and input dealers. It will also allow Deere dealers to provide wireless machine maintenance oversight and technical support.
Monsanto officials had said the company was looking to reduce costs, and the Climate Corp. divestiture is part of that move.
John Deere will get most of Precision’s equipment business assets, its brand and most of the farm equipment it produces, including all hardware, actuators, sensors, displays and controls. Deere will also take most of the staff and its leader group and keep Precision’s dealers.
No price is being disclosed, and the deal requires approval by government antitrust agencies.
Deere will make Precision a wholly owned subsidiary by the end of the first quarter of next year.
Steve Moffitt, a farmer from Pawnee, Illinois, and a Climate-Precision customer, told the Monsanto news conference that he looks forward to being able to seamlessly “move prescription maps to the tractor and planter and data back.”
“Data collection is a big deal on our farm,” he said.
“Today what we do is collect information into the John Deere cloud using MyJohnDeere, and we collect information into the Climate FieldView app. We can’t share between the two.”
He said he will now be “better able to make use of our time and should be able to do a better job.”
Contact michael.raine@producer.com
