if you were in Las Vegas in January 2023
sitting in the audience of the opening
keynote of CES perhaps the most
influential Tech conference in the world
you likely had one question on your mind
why is John Deere here after all they're
the tractor company right they make
machines that push and pull and move and
dig that's their thing right well not
according to their CEO John May we've
quickly become one of the world's
leading Robotics and AI companies our
Solutions leverage technology like
computer vision Advanced sensing and
compute machine learning and data
analytics there's one key word there
Solutions that's a word that gets thrown
around a lot by companies like Apple
Logic Pro provides a great solution a
sophisticated lens solution this
solution helps deliver Microsoft we
provide an endtoend tooling solution a
deceptively Simple Solution the best end
and solutions Google bespoke AI
Solutions open- sourcing Solutions is a
great solution this linguistic mimicry
their mere attendance at an event like
CES it's all peculiar for a tractor
company unless does John Deere think
it's a tech company well yes they do at
least according to themselves in this
LinkedIn post sharing an article
entitled John Deere we a technology
company and that assert appears
increasingly less absurd while the
company lays off hundreds in its
manufacturing plants it's simultaneously
Staffing up its Tech divisions of 15
current US job listings 12 are in
software data or robotics just three in
manufacturing the company has been going
through a metamorphosis from one that
makes machines to one that makes
Solutions Apple for instance does not
merely make computers or phones or
tablets they make integrated technology
solution Solutions blending software
hardware and services into an ecosystem
that envelops one's digital experience
correspondingly John Deere no longer
merely makes tractors or combines or
loaders but rather integrated Production
Solutions blending software hardware and
services into an ecosystem that envelops
a farmer's day-to-day experience at the
extremes the company appears entirely
disconnected from its original form as a
small Illinois storefront selling
shovels and pitchforks never could John
Deere himself have imagined that his
company would eventually go on to
operate for instance a satellite network
but waxing nostalgic about humble
beginnings would mask what the company
now truly is it's not an endearing
family business it's not a scrappy
Underdog it's a market domineering
Behemoth it has the business of
Agriculture especially in America in a
strangle hold and so might apple with
consumer electronics but farming is not
something you pick up or put on it's not
what one's digital experience it's one's
entire experience it's your job it's
where you live it's what your family
does it's what your neighbors do it's
what your descendants do it is an
all-encompassing way of life whose
future is now being dictated by one
tractor company that's decided its big
Tech but John Deere's power their
influence their ability to change the
course of history has been centuries in
the making it started with this the
self- scouring steel plow plows had
existed in some form from Millennia so
many Millennia in fact that we can't
even say how old they are but by the
1800s they had been refined and refined
into this a single piece cast iron plow
these could be pulled by an animal and
would efficiently loosen the soil to
bring nutrients to the surface before
planting a fresh crop and these worked
great for the time except for here the
American Midwest the soil of Illinois
and its neighbors was thick moist and
Rudy in a fashion that would lead it to
Clump on the plow forcing Farmers to
stop every once in while to clean it off
but John Deere had an idea he would
manufacture the same plow but of
polished steel this cut straight through
the midwestern ground with far greater
ease and the soil would shed right off
rather than Clump well he was not the
first to invent this concept he was the
first to start manufacturing a steel
plow on mass and his production steadily
grew into the hundreds per month and
later thousands this Innovation played
an instrumental part in spreading
agriculture across the region and
transforms John Deere from a mere shop
into a growing
manufacturer by the turn of the century
after the company had passed through the
generations of the family deer had
become a leading agricultural implements
manufacturer but the industry landscape
was changing beneath them like the plow
tractors as a concept had long existed
through the 19th century it was
typically animals like horse or oxen
that pulled plows and other implements
yet around the world across Industries
animal power was being replaced by steam
power whereas for drawn stage coaches
dominated the past steam trains were now
the dominant form of long-distance
transport to the logic carried that
steam powered tractors could replace
animal power on farms and they certainly
could the technology existed but steam
power tractors never became ubiquitous
due to their High upfront and operating
cost but with the turn of the century
came gas power tractors cheaper to buy
cheaper to operate popularity exploded
and while deer was originally reluctant
to stray beyond their agricultural
implement core they eventually realized
that they had no choice if they wanted
to stay relevant they tried to design
their own and it was plenty capable but
it was just not competitive at about
twice the price of that of equivalent
machines their tractor never had any
shot of commercial success and then its
designer died from pneumonia following a
week of testing in the wet and cold so
John Deere rather elected to just simply
buy their top competitor with that the
Waterloo gasoline engine company was
folded into John Deere and over the
following years their tractor the water
BL boy enjoyed wild success once again
like with the self- scouring steel plow
deer didn't invent the technology but
they popularized it they identified the
opportunity scaled up manufacturing
marketed successfully and helped
transform the tractor from a niche novel
technology into the solution for moving
power on the farm over the decades that
followed the company transformed again
from primarily an Implement Company into
a machine company offering combines and
bailers and Planters and sprayers
essentially anything you needed to turn
a field into a farm through much of the
1900s they were always a significant but
Underdog player in the industry until
the 60s and 7s where their primary
competitor International Harvester began
to falter and with its collapse in the
80s John Deere took a firm lead in the
industry becoming the go-to ubiquitous
source of agricultural equipment in the
United States but then another
Monumental shift in the field like the
tractor introduced the mechanical era of
farming Information Technology
introduced farming to the digital age
and again John Deere had to adjust on
the Fly this started on June 23rd 1995
when Rockwell international corporation
traditionally a US defense manufacturer
unveiled its proprietary Vision system
effectively firing the first shot of the
digital farming revolution it seems so
simple now but Rockwell's Vision system
was po to usher in a new age of
efficiency by using defense satellites
to pinpoint track a tractor from above
which in turn would allow a farmer to
better monitor their fields yield or
when it came time to plant better
disperse seeds and spray chemicals
Precision farming had arrived and while
Rockwell was the first competitors such
as case Corporation and AGCO Corporation
were close on the company's heels so to
is deer which took it one step further
to the late '90s American Farmer GPS and
precision agriculture was a handy tool
but still a finicky expensive and
difficult to use luxury it helped but it
wasn't required at least not until deer
made it a practical necessity as they
did When developing their tractor deer
looked further field for help they
started at Stanford where the company
collaborated with Engineers to develop
an autonomous GPS control tractor while
it worked it didn't work well enough to
take to market the problem was 1990s GPS
just wasn't accurate or Dependable
enough so more Partnerships now deer
along with navcom technology and NASA's
jet prop lab sought to figure out how to
create a more reliable positioning
system to support not just yield Maps
but autonomous guiding the former
helpful tool the latter a potentially
revolutionary product while autonomous
guiding may have seemed a lofty ambition
its use case was well grounded before
the rise of precision Farming Farming
was well remarkably imprecise take for
instance actually planting a field now
laying down seed is actually a rather
complicated process process with a host
of decisions to make and factors to
consider from when to seed to how to
establish then plant the fields
Headlands and borders but regardless of
such considerations or what crop one is
even planting in the first place each
and every farmer since the dawn of the
tractor has dealt with one major
inefficiency overlap in farming
overlapping is practically unavoidable
as a tractor operator threads Rose back
and forth across their field it's nearly
impossible for there not to be slivers
of field whether it be where r meet
Headlands or just between rows
themselves where the farmer doesn't pass
over a small section twice and
considering the alternative what Farmers
call sparing this makes sense if a
farmer is to miss a small sliver
entirely during drilling there will of
course be no crops if they miss it with
pesticides or fertilizer the section's
yield will drop if they miss it during
harvesting well that'd be an expensive
and embarrassing mistake too so farmers
overlap but they try to do so as little
as possible experience helps with this
as hours in the chair along with a long
established sense of pride in
maintaining straight rows keeps overlap
down so too do generally normal
rectangular Fields should a farmer have
such a luxury and then there are tricks
spray Foams to Mark areas already hit
guide posts along fences for visual
reference thoroughly laid out tractor
paths calibrated to align with the width
of the farmer's equipment but tricks
only go so far one study has put numbers
on the overlaps across the study's 17
locations and four years of planting the
combine drill ER overlapped at 7.7% spin
disk fertilizer at 9.5 while the sprayer
overlapped at 15.7 and the cultivator
reached 19% at every step of the process
of growing something then the farmers
overlap is costing them 8% of their seed
is being wasted 10% of their expensive
fertilizer is being overapplied nearly
16% in pesticide and herbicide is doing
more harm than good and almost a fifth
of their field is being turned over by
the cultivator for no reason this means
more material it also means more fuel it
means more time in the field and in the
chair it means more hours Put on the
machines and therefore more hours in the
shop and fewer functional Seasons such
costs really add up as a bad year will
see costs outpace income while 10e
averages in the case of 2010 to 2019
will only net meager 11.8% profit
margins with such touchy and tight
finances unnecessarily wasting 8 to 19%
of one's time and money on overlapping
is a massive inefficiency on that deer
was seeking to address at the dawn of a
new
century the answer was called Starfire
which by correcting notoriously
inaccurate GPS data with ground location
data offered Farmers field mapping
accurate to within 3 ft or 1 meter
rather than the 10 to 30t or 3 to 10 m
accuracy of traditional GPS with further
work on the product by 2004 Starfire 2
provided accuracy within 1.5 in or 4.5
CM through the collaboration with
Stanford NASA and navcom who they event
acquired Starfire positioned the company
again on The Cutting Edge of the
Precision farming revolution not only
did their product provide Superior
accuracy for yield and Seed mapping it
was accurate enough to address the
fundamental inefficiency of overlapping
simply equip a machine with a Starfire
receiver and a monitor then purchased
deer's auto track program and Farmers
could Now guide by precise lines laid
out on a screen and even let the
autonomous feature Take the Wheel today
through a combination of six Uplink
sites on three continents 46 ref sites
around the globe and least bandwidth
from inm Marat satellites the shovel and
Pitchfork company is able to provide
greater accuracy than the public global
positioning alternative optimizing every
single thread and turn across a farmer's
field the influence of such guidance
can't be understated only 10% of farmers
used any sort of Auto steered and
guidance system in 2004 but as of 2019
those numbers stood in the mid 50 to 60%
range and on bigger Thousand Acre Farms
where the economies of scale Blunt The
Upfront cost and the waste of overlap is
only magnified adoption rates of such
systems have reached over 80% by
applying the same Playbook they did with
the plow and the tractor embracing and
perfecting new technology through
upfront R&D investment while also
acquiring sector leaders like navcom
deer helped push farming into a new
Epoch but that Epoch isn't over and
deers only dug themselves further into
the digital turn across the Dozen
American companies deer has acquired
since 2007 only four are traditional
Hardware manufacturers the rest broadly
are in Tech and increasingly in
artificial intelligence machine learning
and Automation in 2017 for just north of
$300 million deer purchased Blue River
technology who had recently been testing
their new product called Sean spray what
they called the world's first smart
sprayer which by feeding hundreds of
thousands of plant images through deep
learning algorithms was capable of
identifying crops and weeds before then
spraying herbicide within a/4 in
accuracy not long after after deer's CN
spray select enter the market then in
2022 CN spray ultimate became available
for factory installation on 2023 model
410r 42r and 612r sprayers with the
camera positioned along every meter of
the carbon fiber spray Boom the product
would reduce spray volume by 2/3 saving
money on herbicides and by extending
trips between refills saving time and
fuel the benefits of the next step in
Precision agriculture also provided an
environmental benefit Beyond on the
farmer 2 as this product the company
projected would reduce the Airborne
drift of chemicals by up to 87% and
chemical runoff by up to
93% in this new era of AI and machine
learning Precision farming John Deere
was not the first as a Dyson subsidiary
entered the smart spray space earlier
nor is it alone as aen a commercial
outgrowth of MIT research is pushing
into the space too whether John Deere
wins out here as they have so many times
in the past with new technological
innovations remain remains to be seen
but given their history it feels like a
safe bet regardless of competition
though this service capable of plugging
right into the broader John Deere
ecosystem should be a boon for the
American Farmer conscious of cost yield
and overall environmental impact of
their work or at least that's what it
would seem by standard metrics farming
in the US has gotten better across the
sector's digital Revolution we're
wasting less making better informed
decisions and growing more than ever
just look average yields for corn soy
and cotton but consider the position of
the American Farmer in the past being an
all Green Farm that is running strictly
John Deere equipment was a point of
Pride today though it's increasingly
feeling like an expensive necessity
without Alternatives new found hyper
efficiency comes with a cost or really a
whole host of costs say an Illinois soy
farmer is sizing up purchasing a CN
spray attachment well first they'll have
to have a fairly new sprayer to begin
with which if they don't have will be in
the ballpark of
$50,000 then add on another $25,000 for
equipment and install which can only be
done at an authorized dealership still
given that soybean pesticides have
reached an all-time high this decade
coming in at $77 per acre in 2022 and
given that this farmer owns the
medium-sized farm for the state at 4500
Acres considering scale such an upfront
investment May well be worth it without
seean spray pesticides would cost
$350,000 with the product assuming it
cut spraying down to a third a farmer
would only need about
$117,000 in pesticides so with upfront
costs savings total about
$62,000 but then another cost CN spray
subscriptions cost $4 per acre so cut
out another $188,000 and the economics
become slightly less appealing and then
there's the less tangible costs
fundamentally Precision agriculture is
changing what it means to be a farmer
what was once an occupation defined by
individual autonomy problem solving and
Improv ation is now increasingly
beholden to monitors screens software
subscriptions and the availability of
manufacturer authorized technicians
undoubtedly this is an issue of
nostalgia but it permeates in costly and
frustrating ways too consider the solar
storms that push Northern Lights as far
south as the American Midwest while it
might have been a once- in a-lifetime
experience for farmers who stayed up
late to see it it caused far more costly
problems when the storm knocked out
their navigational systems just at the
moment Farmers needed to be out planting
corn their Precision navigation systems
failed them while solar storms are few
and far between issues with software
programs and machiner that's now more
complicated than ever are far too common
and far too difficult to get figured out
for your lifelong farmer rather than
hauling a tractor back to the barn to
fix a hydraulic leak and get back out on
the field that same day when New Era
Hardware fails there's a good chance
that farmer will be out of their depth
if it's on the technology side of the
machine which has the far more finicky
side it likely is so rather than fixing
it to and getting back out on the field
a farmer is left waiting for an
authorized technician who will be
expensive to pay and costly on time as
it's unlikely they'll be available at
the drop of a hat and all that's without
considering whether the farmer has the
tools and information to make the fix in
the first place which is also a matter
of contention across the past decade
John Deere has found itself in the
middle of a battle over the right to
repair for those Savvy enough or bold
enough to fix their own issues they
often need access to the diagnostic
software to begin with which is
something deer's been slow to handle
over their stated reason to keep
software restricted is a matter of
liability and responsibility if they
hand over the keys they figure their
machines might get used and altered in
ways they shouldn't but for an
increasingly boisterous farming
Community this withholding of key
information is simply another way to
make sure that farmer is also on the
hook for costly repair bills that make
their way back to Deer thus providing
the company yet another Revenue Street
regardless as to who is really telling
the truth what's undeniable is that the
farmer is as financially squeezed as
ever and with the rise of big Tech and
farming they are increasingly being
moved out of the driver's seat but deer
is facing their own Financial pressure
competition is rising so they have to
adapt to maintain their relevance over
the past decade Venture Capital money
has poured into startups that insist
they can disrupt the world of food
production whereas in 2013 there were 42
funds focused on the AGR food space
today there are almost 300 reaching a
peak of $ 53 billion of investment in
2021 a simple thesis is presented to
potential investors the global share of
land dedicated to agriculture is peaking
as more and more of the world urbanizes
yet simultaneously the global population
is expected to continue increasing for
at least half a century more therefore
it is objectively true that we will have
to produce more from less and these
startups believe the way to do that is
through technological innovation
different companies have different
solutions to this problem some are
focused on controlled environment
agriculture growing indoors to eliminate
the threats and resource losses from the
outdoors others are leveraging big data
analytics and machine learning to remove
the inefficiencies of guesswork while
still others are working to increase
outdoor production yields and lower
labor cost through various forms of
autonomy building on early successes in
Precision agriculture John Deere has
committed to developing a fully
autonomous production system for corn
and soybean by 2030 that means every
step from plowing through planting
through Harvest without direct human
involvement and that's remarkably
believable corn and soybean are planted
in straight rows with relatively High
distance between each plant meaning
there's already the predictability and
margin for error that makes it easiest
for autonomous systems to succeed the
combination of Innovations like
Precision agriculture indoor growing
autonomous production and more will
yield amazing benefits for us all in
some they create a food production
system that is less expensive and less
resource intensive but they come at a
cost a very literal incredibly
significant upfront cost the economics
of paying an exorbitant amount for a
fully autonomous wheat production system
work out first for the absolute largest
Farms just as with CN spray every
Innovation promises to improve
efficiency by a certain small percent so
the larger the overall operation the
more valuable that small percent can be
and therefore the more likely The
Upfront cost is worth it so Innovations
can be worth it but only if you grow a
ton of food this has been true for a
while there have been greater and
greater economies of scale in
agriculture which has contributed to a
long-term trend of consolidation over
the past 25 years the average size of an
American Farm has grown by 7% even as
total Farmland has declined 8% as small
farms face increasing cost pressure by
more efficient big a operations they
either shut down or sell their land to
Big A and as big Tech encroaches into
farming Innovation is accelerating which
is great by itself but this leaves the
small family farm behind a lay person's
perception of farming as a mom and pop
living in a homestead in Kansas working
the fields around answering to no boss
but themselves is becoming a cinematic
fiction increasingly those living in
regions dominated by agriculture work
not for themselves but for land owners
holding hundreds of thousands of Acres
often the owners of this land live time
zones away meaning profits from
production are not spent at the local
Diner or car dealership but rather
distributed to a multitude of investors
and left to sit in mutual funds this
contributes to a further gutting of the
economy of Rural America one of the rare
ways to build a business outside of
cities is becoming an increasing
impossibility and Rural resources are
being extracted for urban
gain this is in many ways inevitable
Tech Innovation across essentially any
industry has primarily benefited larger
corporations and incentivized
consolidation farming being so far from
urban areas and so culturally isolated
from Silicon Valley has long been
shielded from these forces yet today
John Deere and others have recognized
the upside of bringing these two worlds
together but this progress will hurt the
death of the family farm is upon us and
the autonomous tractor sits just Beyond
the Horizon waiting to unleash its
destructive ability to incrementally
optimize
yields the reason why John Deere cnpr
technology is so powerful is that it's
able to interpret visual information and
make decisions on what a given plan
needs in an instant at a huge scale what
makes this possible behind the scenes is
a neural network the software was fed
millions of images and taught to
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