November 3, 2015
The business of planting crops is changing pretty fast, with the announcement that John Deere has purchased Precision Planting from Climate Corporation, a division of Monsanto Company. The move, which may surprise many, may make sense based on the pieces of Precision Planting the Moline-based equipment giant has acquired.
Monsanto purchased Precision Planting for $210 million in 2012. Later Monsanto acquired Climate Corporation for nearly $1 billion and rolled the two divisions into one. Climate Corporation has been managing the Precision Planting hardware business while at the same time developing the Field View data-based crop management system.
Today’s announcement deals with both the hardware and software side, as Monsanto sells the Precision Planting side to John Deere, but gains access to the John Deere system for its Field View product. The company's note that this is the first third-party agreement John Deere has made allowing near real-time data access, in-cab wireless connection to its equipment.
That would include the full range of planter enhancements sold by the company from the Speedtube system to the vSet series of planter add-ons. Precision Planting built its business on planter row unit innovations often to upgrade John Deere planters, but branched out well beyond that as the company grew.
In the press announcement, Mike Stern, president and chief operating officer, Climate Corporation says “to maximize the value of digital agriculture, farmers need solutions for simple and seamless collection of in-field agronomic data. As a result of these milestone agreements, farmers will experience the fastest, most frequent and highest resolution third-party connectivity between John Deere’s equipment and the Climate FieldView platform”
John May, president, agricultural solutions and chief information officer at Deere adds: “The agreements we are announcing allow John Deere to extend the range of retrofit options available from Precision Planting to many more products and into new geographies. John Deere strengthens its position as the most open platform in the industry both in our equipment and the cloud-based data management solution known as the John Deere Operations Center.”
Under the terms of the agreements, Deere will purchase Precision Planting while Climate will retain the digital agriculture portfolio that has been integrated into the Climate FieldView platform. The acquisition is subject to customary closing conditions, including the approval of the relevant antitrust authorities to the extent required.
The companies said customers will have the option to share their current and historical agronomic data between the John Deere Operations Center and the Climate FieldView platform and seamlessly execute agronomic prescriptions with John Deere equipment.
Under terms of the agreement, John Deere will acquire the majority of Precision Planting's assets for its equipment business including their facilities, brand, the majority of Precision Planting's product portfolio, including all of its hardware, sensors, actuators and display systems along with retaining the Precision Planting leadership, the majority of employees, relations with dealers and OEM customers.
Deere spokesman Barry Nelson explains that Precision Planting will operate independently, but be a wholly owned subsidiary of John Deere. "Precision Planting and John Deere will continue to innovate in ways unique to their respective brands," Nelson says.
He adds that the arrangement allows Precision Planting to focus on "its core strengths and track record of innovation." John Deere will continue to manufacture and deliver its products through the John Deere dealer channel. "We intend to provide Precision Planting products through other OEMs, advancing John Deere's strategy to create more choices for customers and expand the industry's use of precision ag technologies," he says.
During a Monsanto conference call discussing the deal today, Springfield, Ill., farmer Steve Moffitt shared the value of this move from his perspective: “I guess what I see from this [announcement] is data collection is a big deal on our farm. 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 too.”
Moffitt sees focusing on a single system – in this case Climate FieldView – will make it a lot easier for him. He notes that the system will also make it easier to get prescriptions from one system into his equipment for application too. From this farmer’s perspective the deal appears to make a lot of sense.
John Deere also bought Monosem, the European planter maker. That announcement on Monday shows that the company is serious about staking its claim to global planter technology. The Monosem agreement would give John Deere four new factories in France and two in the United States. In a press statement, John May, president, agricultural solutions and chief information officer, notes that “through this action, we continue to build on our leadership in precision agriculture. Monosem is admired for its innovation and success in precision planter technology that helps farmers increase production.”
The Monosem business will continue as it is running as an independent brand, as May says the company will retain its brand and trademark. Monosem is a family-owned company founded in 1948.
Earlier in October, John Deere also announced it was forming a joint venture with DN2K to create Sageinsights, which will “initially serve the agriculture industry with further development of DN2K’s existing cloud software platform, MyAgCentral, for agricultural retailers and othes,” the company reports. MyAgCentral is retailer based and is designed to help ag advisers collect, organize and analyze machine-to-machine information and use it along with insights from other resources to help improve on-farm decision making.
With the Precision Planting purchase, John Deere is staking a significant claim as a precision farming leader in the market.
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