John Deere: the future of farming
John Deere has flipped the concept of being a farm equipment company on its head. Increasingly, its hardware is taking on the role of delivering intelligence and advanced analytics to farmers
An enhanced business model, driven by an information based operations
Farming as a business is a series of well-defined operations that are repeated year on year. Given this stability, it a ‘field’ that is ‘ripe’ for increased productivity through precision agriculture built on the IoT, using sensor networks and automation to improve productivity and reduce waste in crop farming. John Deere, the world’s largest agricultural equipment company is at the forefront of this movement. The company is now able to derive more value by enabling farmers to grow more, and use their machinery more efficiently. Its operating model has shifted from making ‘big’ machines to making ‘smart’ machines, and creating an information sharing network between machines, on-ground sensors, satellites, and farmers, and tracking and interpreting the information being generated at each point.
Making the connections, and gathering information
The central pillar of farming automation is John Deere’s FarmSight system which links the machinery (tractors, combines, sprayers etc.) to John Deere’s cloud based operations center. Each vehicle has a cellular modem that sends out data on its usage and location. Farmers can tap into the online operations center through their mobile devices and get a bird’s eye view of where their machines are and what they are doing.
At a machine level John Deere has embedded a number of IoT sensors to improve accuracy of farming practices. Its planters (used to place the seeds in the ground) are able to provide sub-inch accuracy in terms of the depth. As an example, a 24-row planter has three sensors on each row which capture data on how the machine interacts with the soil, as well as where the seeds are being planted. In addition to this, there are field sensors that can measure the exact amount of pressure with which a seed is pressed into the ground. In a way, John Deere is able to tag and identify each seed. Year on year yield data makes it possible to create a ‘prescription’ for each parcel of farmland.
Collaboration and crowd sourcing
John Deere has realized that the benefits of this connected network can be multiplied by opening it up to 3rd parties. Developers can integrate telematics machine data into their applications through the Machine Monitoring resources in the MyJohnDeere API. And the John Deere Field Connect API enables developers to build apps that provide machine locations, fuel levels, and other data points such as soil moisture and weather.
John Deere also aggregates data from all their customers allowing farmers to make better decisions about how to use their equipment, where they will get the best results from, and what return on their investment to expect. As an example, fuel usage of different combine harvesters can be analyzed and correlated with their performance. By analyzing the data from thousands of farms, working with many different crops in many different conditions, it is possible to fine-tune operations for optimum levels of production. Downtime is minimized by looking at crowdsource data and predicting when and where equipment is likely to fail.
Challenges of the digital age
With all this innovation come obvious challenges for John Deere and the farming community.
First, who owns all the data that the John Deere machines are collecting? This is sensitive information that can be used by other players and go against the interest of farmers. For example, agriculture input companies such as Monsanto and Dow could buy the information from John Deere to see how farmers use seeds and fertilizers and use it to gain leverage when they sell inputs to farmers. Wall Street traders can forecast what yields will be like before harvest and buy options which may have a downward effect on prices for farmers.
Second, who ‘owns’ the software that is powering John Deere’s machinery and sensor systems? In 2015, John Deere told the US copyright office that farmers don’t own their tractors. Because of the extensive use of software in the vehicles farmers receive “an implied license for the life of the vehicle to operate the vehicle”. Since the software in John Deere’s machines is not open to the farmers, they are unable to carry out some repairs on their own. As a result some farmers are now opting for older, software free models.
In conclusion John Deere has been brilliant in systematically automating, and making intelligent all the functions that farmers need to do drive up yields and efficiency. Unlike, other industries, John Deere has managed to push the frontier of farming possibilities without having to radically disrupt traditional agriculture business.
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Sources
[1] John Deere website, https://www.deere.com/
[2] Forbes, “Who Owns Farmers’ Big Data”, http://www.forbes.com/sites/emc/2014/07/08/who-owns-farmers-big-data/#b5000313ce79
[3] Wired Magazine, “We cannot let John Deere destroy the very idea of ownership”, https://www.wired.com/2015/04/dmca-ownership-john-deere/
[4] eWeek.com, “John Deere adds AI, IoT to farm equipment”, http://www.eweek.com/innovation/john-deere-adds-ai-iot-to-farm-equipment.html
[5] manufacturing.net, “John Deere on bringing the IoT to the farm”, https://www.manufacturing.net/news/2016/05/john-deere-bringing-iot-farm
Very interesting post! I think most of us may have overlooked digitization at farming however agricultural improvements have allowed us to invest more human capital into building technology in the first place! I will be interested to see how John Deere handles and transitions its customers who may not be tech savvy into the new age of farming. I certainly think there is a large ethical issue around the data ownership. Many farmers already have a difficult time making ends meet. If companies like monsanto can pin point the value of their products delivered to farmers they stand to capture all the value created in that transaction. I find it difficult to believe anyone but the farmer owns the data collected from that farmer’s land.
While it’s great to see the innovation, I had no idea that John Deere claims that farmers only have right of use and not full ownership. I would curious to see how their competitors are approaching this same problem especially since it’s a highly commoditized space. It must be so challenging for farmers to adopt this rapid increase in farming technology when they’ve been used to operating for generations.
D, thanks for the post. Before I was not aware that farmers do not own the John Deere equipment.
It is interesting to see how John Deere is innovating, and the use of crowd sourcing reminds me of the Threadless discussion we had in TOM class.
I think there is a lot of value in making farming more intelligent and I wonder whether you have any data on how much yields have improved after implementing the John Deere innovations.
Finally, farming is an industry where productivity varies significantly in different regions and using data should help to bridge the gap and share best practices from the most effective farmers.
Very good post on an industry very dear to me. We have used tractors on our family farm and would have appreciated farm intel from the OEM on how we could optimize certain operations such as fertilizer and herbicide application. I really appreciate that John Deere takes the time to interpret the data it collects, extract insights, and share that information with the farmers, most of whom will not know what to do with that raw information. As such, I am a little less concerned that the farmers do not have access to the raw data. Now, if John Deere has the ability to cash in on selling this data to other stakeholders, that is a different matter and I’ll imagine that there’ll be backlash from the farmers.
D, nice article about John Deere. First off, I was not aware that John Deere was saying they essentially leased their trackers for their lifetime for one fee because they maintained complete ownership of the software. Based off your article it seems that this technology and software is about 100% integrated into all their new products and the purchaser does not have many choices besides buying older, less efficient, equipment. But with this intense software and monitoring equipment it seems that John Deere is doing much more then just producing farm equipment. Has this shift and integration of the IoT changed their offerings to farmers? Has it made farmers more loyal to their products or the cost of switching so high that once they incorporate this technology into their field it is not possible for them to switch? I think the use of technology has been outstanding in farming, my question is where do they go from here and how do multiple platforms (John Deere and Case) function together in this environment.