The Justice Department filed an antitrust lawsuit in federal court in Chicago to block Deere and Co., the world’s largest farm equipment maker, from buying Precision Planting, its chief competitor in selling high-speed seed planters to farmers. The government says the two companies account for at least 86 percent of sales of the planters, which are expected to become the industry standard.
“If this deal were allowed to proceed, Deere would dominate the market for high-speed precision planting systems and be able to raise prices and slow innovation at the expense of American farmers who rely on these systems,” said Acting Assistant Attorney General Renata Hesse.
Deere and Monsanto, the world’s largest seed company and parent company of Precision Planting, said they would contest the lawsuit rather than drop the deal announced last November. “Competition in precision agriculture is strong and growing … as companies around the world continue developing new technologies,” said Deere, adding that it would “preserve Precision Planting’s independence in order to ensure innovation and speed-to-market.”
The lawsuit was the first U.S. objection to a surge of consolidation in the agricultural sector. A U.S. review panel recently gave a green light to the China National Chemical Corp, known as ChemChina, to purchase Synenta, a Swiss-based seed and farm chemical company with large U.S. sales. A U.S. antitrust review is ongoing for the merger of Dow and DuPont, who each are active in seed and ag chemicals.
High-speech precision planters allow farmers to travel across fields twice as fast – up to 10 mph – as they did previously without losing accuracy in placing seed for corn, soybeans and other crops. “Planting at higher speeds can be highly valuable to farmers, many of whom have a limited window each year to plant their crops to achieve the highest crop yields,” said the Justice Department. Deere and Precision Planting began sales of high-speed planters in 2014.