Monsanto Rocks Precision World With Purchase

The precision headline of the week, month and maybe the year was made on Wednesday, May 23rd when Monsanto announced it was acquiring the precision hardware company Precision Planting.

Consolidation is not new in any industry but this one is different and has far reaching implications.  For a biotech company like Monsanto to invest in a precision hardware company means that the rules have now changed.  The extent, scope and nature of those implications are yet to be played out.  The one sure thing, however, is that the precision landscape is forever changed because of it.

Recently, one of the vice-presidents of one of the major precision agriculture hardware firms asked me who I thought the future players and primary competitors would be in the world of Precision Ag 2.0.  I could have given my standard response of John Deere, CNH, Raven, Ag Leader, etc.  But times have changed.  Instead my answer was simply Monsanto and possibly Pioneer.

Why?  Agronomy is the new foundation…the next frontier for precision agriculture.  The seed will drive future technology… including precision agriculture hardware.   If Monsanto is committed to doubling yields by 2030 it realizes that bio-tech alone will not get them there.  Execution in the real world is what Precision Planting does better than anybody else when it comes to putting high-priced genetics into the ground.

Monsanto did not buy Precision Planting because it is a profitable hardware company and because it likes how their technology plants picket fence rows of corn.  Monsanto bought Precision Planting because no one provides more data from the field on the planting process than Precision Planting’s array of planter sensors and instant feedback technology such as their iPad driven FieldView app.  Monsanto wants to build the holy grail of an agronomic database.  Precision Planting will help them on the way to such a quest.

Is this a good move for Monsanto and Precision Planting? What are your thoughts?  Click here to read a great blog post by Paul Schrimpf of the Precision Ag Network on this particular subject that addresses some of the same initial questions I had when I first heard the news.