The farm equipment company says its customers would not like using a software platform owned by a competitor
(Reuters) — Agco Corp. says it does not have immediate plans to buy a stake in 365FarmNet, a farm management company and software platform that is a subsidiary of Germany-based Claas.
“We are not buying a stake, but we are looking into how to co-operate,” said chief executive officer Martin Richenhagen.
“We still would be interested if it would become an industry-owned solution. So far, we still talk, but it seems to be difficult for Claas to consider sharing the ownership with other players.”
Farmers can use software from 365FarmNet to document costs, crop yields and inventories.
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Global agricultural companies are developing partnerships or buying companies to develop new software and hardware products that help farmers get the best yields from their farms using precision agriculture.
Agco, which makes Challenger, Fendt, Valtra and Massey Ferguson machinery, was initially interested in buying a stake in 365FarmNet to create an alliance as a shareholder.
However, Richenhagen said Agco’s customers would not like using a software platform owned by a competitor.
“Our farmers don’t want to be forced into depending on one brand of farm equipment, or seeds, fertilizer or pesticides just through software,” Richenhagen said.
Agco’s own software application, called Fuse, is on an open platform, so the company’s combines and tractors can connect to not only 365FarmNet but other agricultural management systems, such as Deere & Co.’s JDLink, Richenhagen said.
365FarmNet is available only in Europe, according to a Claas of America spokesperson.
Agco has a strong position in Europe and claims nearly a 50 percent market share in farming machinery in the Europe, Middle East and Africa region.
It plans to invest $295 million in 2016 on technology and new products, up from $122 million in 2005.
Precision agriculture has become a top priority in the agriculture sector as commodity prices fall off their highs of 2012-13.
Agco expects 2016 net sales of $7 billion, down from $7.5 billion in 2015. The company posted net sales of $9.7 billion and $10.8 billion in 2014 and 2013, respectively.
Slowed sales prompted Agco to reduce production in 2015. Richenhagen said the company is prepared to adjust output again if demand languishes further.
