John Deere Turning to Technology in Down Economy
7 October 2016
(Photo Credit: John Deere)
Both producers and manufacturers are feeling the hurt of disappointing commodity prices. With current projections, many producers are looking for any way to limit expenses. Those who in the past may have purchased new equipment are looking for other options, including upgrading technology on their current machines.
With fewer farmers buying new equipment, Deere & Co. is jumping on this opportunity by selling farmers new technology to upgrade their old equipment.
This technology includes modems, navigation devices, sensors and software. Deere’s AutoTrac system aims to simplify farm operations, while also reducing labor, fertilizer and fuel. This leads to the production of less waste and a reduction in input costs and in the end helps the bottom line.
North Iowa’s Globe Gazette reported on Marc Arnusch’s positive outlook towards technology on his operation. Arnusch lives in Colorado and farms 2800 acres with a diversified operation. Arnusch states, “I don’t see that technology as a luxury at all. I see it as important as tractors on our farm.”
Technology can help with crop production and reduce resources, but it does come with a price tag. Some precision ag systems can cost tens of thousands of dollars. Arnusch chooses to lease some systems to ease the cost.
In order to reach more consumers, Deere is taking a more comprehensive approach to their technology offerings. The AutoTrac Universal 200 steering kit is approved for more than 300 models of equipment from John Deere and competitive brands. This gives farmers with multi-colored fleets more options in upgrading their technology across the board.
Deere is hoping that this tactic will ease the pain of slow equipment sales. The sales of higher horse-powered tractors and combines are down for the year according to the Association of Equipment Manufacturers (AEM), the leading trade organization for off-road equipment manufacturers and suppliers.
Charlie O’Brien, AEM senior vice president states, “Earlier in the year we felt that the market was stabilizing, but as we pass the midpoint of 2016, we continue to see the smaller equipment is thriving overall while the larger production ag equipment remains depressed.”
It’s easy to see why Deere & Co. decided to make a push in the precision agriculture industry. Goldman Sachs Group project that it could be worth $240 billion by 2050 as more farmers like Arnusch make it a priority in their operation.