John Deere Responds to DOJ's Precision Planting Block

October 13, 2016 11:33 AM

In late August, John Deere’s planned acquisition of Precision Planting came to a halt due to U.S. Department of Justice (DOJ) concerns about lack of competition and likely higher costs for farmers.

DOJ says the two companies currently account for at least 86% of the high-speed precision planting systems in the U.S. The department contends “the proposed acquisition likely would lessen competition substantially, and tend to create a monopoly, in the market for high-speed precision planting systems in the United States,” according to court documents.

In addition, “evaluating the benefits of acquiring Precision Planting, Deere estimated that eliminating competition from Precision Planting would allow it to avoid cutting its ExactEmerge prices by 5% to 15%,” court documents explain.

John Deere did not immediately respond to the complaint but has now put out a statement. Company officials highlighted three key points it is asking the DOJ to consider about the acquisition:

  • The case is designed to protect a competitor, not competition: The DOJ initially cleared Deere’s acquisition of Precision Planting. However, a competitor to Deere protested, and the DOJ opened a new investigation and filed a lawsuit in an attempt to block the sale.
  • An incorrect interpretation of the market is jeopardizing options for growers: Deere disagrees with the DOJ defining high speed precision planting as a distinct market from other planting equipment used by growers. Planting speed is only one factor growers consider when looking for ways to lower their production costs and increase yield. Growers look to a wide range of other options throughout the entire crop production cycle.
  • The Deere-Precision Planting deal would create more choices for growers and increase access to technology: The acquisition of Precision Planting would increase customers’ choices and access to retrofit options for many equipment brands and earlier models of planters in addition to the integrated, new equipment Deere makes. Adding Precision Planting’s retrofit offering to Deere’s existing integrated solutions will make a wider range of planting and precision agriculture solutions available to an increased number of customers at a variety of price points to better suit the growers’ various budgets. Deere’s resources and complementary capabilities will help the Precision Planting team bring new, innovative solutions to market quickly.

Learn more about the case here.

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Spell Check

Southern, MN
10/13/2016 02:03 PM

  Good job for the DOJ. John Deere's retrofit option for ExactEmerge is near the cost of buying a brand new planter. Retrofit a planter 2 to 8 years old and the retrofit actually can cost more than what the planter costed brand new. If John Deere does the retrofit they will charge $120 labor per person when all it takes is the farmer and hired help at $15-20 buck an hour to get the job done. Basically all AG companies rape the customer even if there is "competition."

10/14/2016 12:00 PM

  Evidently DOJ does not pay attention to seed and chemical company there is where farmers are getting raked over!!!!


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