As strip-tillers get rolling in the field this spring, the metaphorical dust is settling on the termination of John Deere’s planned acquisition of Precision Planting.
There will almost certainly be another buyer for the planter technology company’s hardware business, and parent company Monsanto stated as much after calling off the deal.
Had the acquisition gone through, there was speculation as to how it would have impacted the current landscape of the planter technology market. Visiting with DeForest, Wis., strip-tiller Mark Schroeder a day after the news broke, he was disappointed the deal fell through.
Running mainly Deere equipment on his 2,200-acre corn and soybean operation, Schroeder bought a used 24-row corn planter he equipped with approximately $100,000 of Precision Planting hardware during the last 2 years.
“As a Deere customer, I’m a little concerned because I invested money in a 6-year-old planter thinking eventually, it’s all going to be part of one company,” he says. “I figured my planter would hold its resale value and now, depending on the outcome, that may change.”
But others see the termination of the deal creating more stability — at least in the short-term — in the planter technology market. Based on the results of our recent online poll, the majority of respondents (60%) say they are more confident in the stability of the planter market and are ready to move forward with their next purchase.
The other 40% say the outcome of the deal won’t influence them one way or another on their next planter upgrade or purchase. Nobody responding to the poll say they are still concerned about potential consolidation and are remaining cautious about where and when to invest in planter updates.
Still, there is likely another chapter or chapters to be written in this story. Some industry experts suggested the outcome could have given Monsanto access to the majority of planting data being collected in the market.
Nevada, Mo., farmer Steve Cubbage, who spoke at the 2014 National Strip-Tillage Conference on emerging ag technologies, says he wasn’t surprised the acquisition fell apart, but he expects the data component will be a bargaining chip in negotiations with other potential buyers.
“Monsanto says they don’t want to be in the precision hardware business and in my opinion, they never did. They bought Precision (Planting) to gain access to the data and I think even with the Deere deal, that was a still a caveat as they said, ‘We’ll sell you the hardware business, but we retain the rights to whatever data flows through that technology.’”
What is your take on the termination of Deere’s planned acquisition of Precision Planting? Share your comments with me at jzemlicka@lessitermedia.com or call me at 262-777-2441.
