Monsanto, Deere Join Forces Over Data Services
03 November 2015 - 9:40PM
Dow Jones News
Monsanto Co. and Deere & Co. struck a deal to strengthen
their cooperation in the emerging business of big-data services
that help farmers improve crop performance.
Deere agreed to buy Monsanto's line of high-tech planting
equipment, called Precision Planting, and in return make it easier
for farmers to link their John Deere machinery to Monsanto's
Climate Corp. unit, which crunches data on crop performance and
weather conditions to formulate farming advice. Terms of the deal
weren't disclosed.
The deal "benefits all our customers and will allow for more
information and better data-driven insights to come out of
Climate," Mike Stern, president of the division at Monsanto, said
Tuesday.
Monsanto and Deere, along with other agribusiness giants like
DuPont Co. and Cargill Inc., are investing heavily in sensor
technology, data-analysis systems and wireless transmitters to
drive a technology revolution on U.S. farms that they hope will
become big new revenue streams. The companies are selling services
that harness data-crunching techniques honed in Silicon Valley to
help farmers boost crop yields and use equipment, seeds, and
fertilizer more efficiently.
For Monsanto, which has spent more than $1 billion to build out
its suite of computerized farming services, the deal announced
Tuesday enables easier access to data collected by Moline,
Ill.-based Deere's vast number of green-and-yellow tractors and
combines. Deere controls about two-thirds of the U.S. market for
high-horsepower farm tractors, and under the deal, Monsanto's
Climate division will become the first outside company with which
Deere allows its equipment to share data in what the companies
called "near real-time." The arrangement is exclusive for multiple
years, according to Monsanto.
Farmers will decide whether or not they want their Deere
equipment to stream data to the Climate system. Both companies
maintain that the farmers using their systems own the data related
to their own fields, though the companies can use some information
to develop services.
The deal is Deere's third in less than a month to expand its own
lineup of technology-based farming gear and services, after
agreeing to buy a French planter company and forming a joint
venture around farm management software. Falling sales of Deere's
big-ticket machinery in a weakening North American farm economy is
causing the company to turn its attention to services and niche
product lines that offer farmers lower costs and greater
efficiency.
Mr. Stern said getting out of the business of making and selling
Precision Planting's high-tech planters focuses Monsanto's Climate
division more on its data-science services, a business Monsanto has
estimated will deliver several hundred million dollars in annual
revenue by 2019.
Write to Jacob Bunge at jacob.bunge@wsj.com and Bob Tita at
robert.tita@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 03, 2015 15:25 ET (20:25 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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