Precision Ag companies increasingly are joining forces to offer growers integrated solutions for machine guidance, input application control and other precision services.
A review of recent partnership/purchase announcements highlights the trend. Ag Leader and AutoFarm; Raven Industries, SST Software, Ranchview, and Buhler Industries/Versatile; and Hemisphere GPS and Third Eye Maps all revealed new alliances in the final months of 2009.
Within the past few years, the alliance list has become a virtual who's who of precision agriculture: AGCO/Topcon/KEE Technologies; Trimble/Dickey-john/Rawson/Tru Count/GreenSeeker/Farm Works; Leica/Rinex/TeeJet; Ag Leader/Holland Scientific/Kinze/Norac; and Raven/AutoFarm. Both Trimble and Ag Leader also have long-term technology partnerships with Case New Holland (CNH). Of the major precision ag providers, John Deere stands alone, although it announced in 2009 that it would begin offering certain Raven application control technologies through its dealerships.
The goal of these new alliances — which include outright purchases as well as formal working relationships between independent companies — is to be able to offer a range of integrated products under a single umbrella.
“With any business, once you have a customer base, you want to be able to sell as many products as you can,” says Matt Darr, a precision ag specialist at Iowa State University. “You see these partnerships form to move away from individual companies that offer specific precision technologies to combinations or alliances that offer complete solutions for a farm's needs.”
That's exactly what Ag Leader and AutoFarm had in mind with their new alliance, says Al Myers, Ag Leader Technology president. “Steering technology is AutoFarm's expertise; at Ag Leader our strong suit is displays and application controls,” Myers says. “It is a good alliance in that our technologies complement one another very well. It allows Ag Leader to have a full line, including RTK [real-time kinematic]-accuracy steering, which we didn't have in the past. Although AutoFarm is only selling our displays, this gives AutoFarm dealers access to other Ag Leader products.”
Behind the Ag Leader alliance
The announcement of the Ag Leader/AutoFarm alliance effectively marked the end of one of the longest alliances in precision agriculture — between Ag Leader and Trimble. Under that alliance, which dates to 1996, Ag Leader manufactured Trimble's Field Manager display (similar to the Ag Leader Insight, but with different firmware) and provided access to various application controls. Trimble provided WAAS-level guidance products to Ag Leader, including the EZ-Guide 250 and EZ-Guide 500, as well as EZ-Steer.
However, “as both companies grew, they became competitors,” Darr notes. This played out over the past two or three years, as each began offering competitive products — including section-control devices, as well as crop sensors and crop management software.
“We felt that AutoFarm was a better route than other options,” Myers says. “Our products and distribution were more complementary.”
The companies announced their first new products at the same time as the alliance. They include the Integra monitor, manufactured by Ag Leader, and the ParaDyme dual-antenna RTK-capable guidance system, from AutoFarm.
Ag Leader will continue to provide support for the Trimble products it sold. Trimble also will provide support. It set up a special e-mail address — firstname.lastname@example.org — to simplify identifying dealers.
Other new alliances
Raven Industries and SST Software announced a strategic partnership in July 2009, then upped the ante in November when they revealed that Raven will take a partial ownership position in SST. Under the alliance, the companies plan to integrate SST's AgX standardized data structure and reference database into Raven's Viper Pro and Envizio Pro field computers.
Also in the fall, Raven announced the purchase of Ranchview, a Canadian start-up that develops products that use cellular networks instead of radios to deliver RTK corrections to GPS-enabled equipment.
In January, Raven and Buhler Industries announced a new strategic partnership that will feature Raven precision ag products on Versatile tractors, as well as Buhler's new self-propelled sprayer line.
Hemisphere GPS and Third Eye Maps announced their alliance in late November. Third Eye Maps, based in Lubbock, TX, will be Hemisphere GPS's authorized representative for aerial imagery capture and processing.
More consolidation ahead?
With the flurry of acquisitions and alliances in recent years, the consolidation of precision agriculture companies could be nearing an end, says Darr of ISU.
“We don't have many precision companies left that aren't already offering a full line of precision products,” he says. “Most of the Big Four in precision ag have already formed partnerships to fill out their equipment lines.”
The Big Four, according to Darr, are John Deere, AGCO plus Topcon, CNH plus Trimble, and the new Ag Leader/AutoFarm combination. “Ag Leader is the wild card,” he says. “It's unique in that it is not directly aligned with a tractor manufacturer. But Ag Leader has a broad product lineup and a strong reputation with its customers for providing top-end support. It also has a strong relationship with OEMs, including CNH with yield monitoring and Kinze with planter monitoring.
“Consolidation can be a good thing at the producer level,” Darr continues. “You are getting smaller companies becoming aligned with larger companies, which will make their products more available to a larger number of producers. Through partnerships, each manufacturer can provide customers with a wider range of product options and the best technologies from all partners.”