Farming is no longer about big, steel machines and farmers’ intuition. Technology is transforming agriculture as we know it and manufacturers of heavy equipment, such as John Deere, are forced the rethink their business models in a transition to IoT, data science, machine learning, and other high-tech disciplines. These companies are shifting from making ‘big’ machines to making ‘smart’ machines.
John Deere has been an agtech innovator for years, but this agricultural technology giant has been mistakenly grouped with agribusiness companies such as Archer Daniels Midland and Bunge, companies whose profits are heavily influenced by the price of food grains. While it is true that prices for John Deere stock are influenced by the prices of grains commodities, it should also be considered that opportunities for capital growth in John Deere go far beyond equipment sales for the planting and processing of ag acres – as climate change, warfare, and demographic shifts continue to influence not only how much food is needed, but also where food can be grown, an entire new agricultural infrastructure will have to be built. It seems obvious that John Deere is poised to profit greatly from disruptions during this Fourth Industrial Revolution.
“Agricultural innovation is entering a fourth phase with a shift toward smarter hardware, remote sensing and analysis.” – Rabobank
John Deere has been brilliant in systematically automating the farming experience – investing in cloud-computing capabilities, big-data analytics and open APIs has transformed Deere’s operations and the company has managed to push the frontier of farming possibilities without having to radically disrupt traditional agribusiness. This is because Deere’s value proposition focuses on process optimization – reduced costs, increased yield and increased sustainability – through data-centric technologies and improved information flow. Some examples of Deere’s agtech activities or investment areas include:
- Partnership with AWS, enabling machine data and agronomic data to be routed seamlessly to the cloud through telematics
- Cloud-based software to collect, access, analyze and share data on computer, tablet or phone, all in real-time
- Better decision making through agronomic data (avg. yield, total yield, avg. moisture, seeding variety and rates), machine data, and weather and financial data from external data sets (instant, field-specific weather info including wind speed and direction, temperature and humidity to make better real-time decisions)
- Machine-to-machine communication about location, coverage maps and guidance lines
- Autonomous driving and remote management
- Variable rate application
John Deere is creating an information sharing network between machines, on-ground sensors, satellites and farmers, and tracking and interpreting the information being generated at each point, putting Deere at the forefront of an IoT-based revolution in agriculture. Deere & Co. is making a major bet that the next explosion in agricultural productivity will come from harnessing big data to help farmers decide when to sow, nourish and harvest their crops. The next step is pushing computing from the cloud to the edge – Deere wants the analytics engine working locally on the farmer’s tractor, rather than off in the cloud, adjusting based on local inputs on the fly.
“What we are looking at is to drive farming to new levels of efficiency.” – John Deere