Show notes at Keith Snow.com

Nothing runs Like A Deere…….Having been a John Deere tractor owner I understand that these machines can be immensely useful for all types of farmers; from small hobby farmers like I was, to large-scale growers who manage 10’s of thousands of acres of beans or corn or wheat, etc.

Sadly as John Deere has grown, they have incorporated many new technologies that are not favorable to farmers such as the excessive use of sensors and software. Basically modern Deere tractors are nothing more than rolling data collectors that incorporate more technology than you could possibly imagine.

All this technology renders these units almost unrepairable unless John Deere is part of the equation because as we know, technology can break often! Currently, John Deere employs more software engineers than mechanical engineers which says a lot. Gone are the days when farmers fix their own equipment as they have done forever. 

Just like the practice of farmers saving seeds which has been erased by greedy and corrupt seed company agreements, repairing your OWN damn equipment is becoming nearly impossible.

John Deere makes farmers sign a software agreement (AKA Monsanto’s Marketing Agreement) at the time of purchase that forbids the farmers from suing John Deere for crop loss, lost profits, loss of goodwill, damage to land or machines, loss of use of the machines, etc. when the machine breaks and there is a delay in repair.

“John Deere employs more software engineers than mechanical engineers now, which completely surprised me. But the entire business of farming is moving toward something called precision agriculture, which means farmers are closely tracking where seeds are planted, how well they’re growing, what those plants need, and how much they yield.”

If you put any new part on a deere machine, the ECU (engine control unit) will not allow the machine to run again unless it’s unlocked by a technician, who of course charges the farmer to do this software restart. This also forbids farmers from using any part or modification that is “ third party”. All or most parts have to come from Deere. So do you really own the machine?

2015 Digital Millennium Copyright Act, which makes it legal for farmers to hack their tractors for repairs but still has not helped all that much. Using third-party software from China or Russia can be very sketchy…and might likely void warranties on the equipment.

For deal dealers, parts and sales are 3-6% more profitable than selling the equipment. Dealers have a monopoly as no one else can work on the tractors, making reliability a key for farmers as having the dealer come out is not always convenient. Especially during critical planting and harvesting, where 1 day can mean disaster. And in many cases Deere requests the farmer bring the machine back to them for repair, imagine having to take a huge combine back to a dealer, this would require hiring a tractor truck and flatbed as these machines can be wide loads.

“The other signal I’d ask you about is that prices of pre-computer tractors are skyrocketing. Maybe you see that a different way, but I’m looking at some coverage that says old tractors, pre-1990 tractors, are selling for double what they were a year or two ago. There are incredible price hikes on these old tractors. And that the demand is there because people don’t want computers in their tractors. Is that a market signal to you, that you should change the way your products work? Or are you saying, “Well, eventually those tractors will die and you won’t have a choice except to buy one of the new products”?

I think the benefits that accrue from technology are significant enough for consumers. We see this happening with the consumer vote by dollar, by what they purchase. Consumers are continuing to purchase higher levels of technology as we go on. So while yes, the demand for older tractors has gone up, in part it’s because the demand for tractors has gone up completely. Our own technology solutions, we’ve seen upticks in take rates year over year over year over year. So if people were averse to technology, I don’t think you’d see that. At some point we have to recognize that the benefits that technology brings outweigh the downsides of the technology. I think that’s just this part of the technology adoption curve that we’re all on.

 

Returning to a Deere dealership can also cause significant delays for planting or harvesting, which farmers who operate on razor-thin margins can ill afford. As of January 2022, John Deere is in the midst of a class-action antitrust lawsuit accusing them of creating a repair monopoly.

Resources For This Episode:

https://www.theverge.com/22533735/john-deere-cto-hindman-decoder-interview-right-to-repair-tractors

https://www.youtube.com/watch?v=F8JCh0owT4w&t=9s

https://www.youtube.com/watch?v=bGH6pxNouCY&t=737s

https://www.youtube.com/watch?v=hLM5ONE7dBE

https://www.youtube.com/watch?v=JSGIHpc9ThU

 

If you enjoy this content please support the show!