Συνεντευξη στον πρόεδρο της John Deere Samuel R. Allen

Clearly they have come a long, long way since 2012, which just says a lot about them as a management team and as an organization. That was further reinforced over the last day with me having a chance to go around and talk to people here at the dealership. Certainly with what they've accomplished, we hope to help them continue to grow here in Greece through both additional product diversity as well as helping them get deeper into the market. But quite frankly, when you have an organization as successful as they are, we would not limit them to just Greece. We would like to take a group like this and take them to other markets where they feel good about going and we think both sides think they can be successful, because they are a very, very special management team.

That's a... you never know. I'm not going to say what area because in some areas we also have very good dealers. We would not take out a very good dealer, but we have other areas where a dealer may be a good dealer but they don't have a transition plan, they don't have a team that can take over when they leave. So that would be an opportunity for them. And we'll watch to see as time continues where all they may be able to go.

Yeah, so what I would say is we've made progress, probably not as much progress as I would have liked to see, but we're still focused on it. We're still growing. I think we've made good progress on small tractors in particular. We've made very good progress in a market like India for smaller tractors, and we're starting to leverage our smaller tractors in China into other markets in sub-Saharan Africa. So we're starting to make that progress, but it's a long journey. It's not just a small, short race. And I would say the area that we continue to invest in, in particular for markets like this, would be coming up with specialty tractors and broadening our line there, and then also specialty implements that we need to round that out to support dealers like our dealer here.

I would say that you certainly need to be on the lookout for other investments from Deere in companies, probably not so much in this space. That's what we got with Blue River. We advanced our capabilities in artificial intelligence and machine learning. That's really what Blue River gives us, and now we get to take those talented people and that ability and incorporate it in many more of our machines. So you will see our sprayers, for example, incorporate this technology. You'll see it with some of our planting equipment. Blue River, before we acquired, was going down a path more with some vegetable farming and a little bit with cotton. We'll take it into corn and soybeans and other broadacre crops where there's a lot of opportunity to leverage our equipment.

Well, for us, we'll continue to introduce. We've got a number of new products coming out in model year '18 that we'll display at the fair, including an intelligent combine that self-adjusts as it goes through the field to minimize loss and maximize yield. Likewise, we'll be bringing out additional sprayer capabilities in terms of spray nozzle technology. We'll have the carbon fiber boom in the booth, which, using carbon fiber, is much stronger and lighter. So there'll be a number of items like that that we will be showcasing. Relative to alternative fuels, it's my personal opinion, earlier in my career I ran the engine side of our business, and the diesel engine still is the most efficient, most compact power unit. In so many products in agriculture, it's all about the ability to see, and so to have a very compact power unit so that you can see on both sides of the hood to see the rows is very important. What I think you will see, and we are showcasing some of it already, is that you will see hybrid with electrification. And what that will allow us to do is, the diesel engine inside of its torque curve, there's actually a very small spot where it runs most fuel-efficient. If you can use electrification to create the power needs and keep the engine running in that very sweet spot, then you can save 20-30% fuel economy. It's like in the automotive technology, something like the hybrid. In John Deere, we were already doing this in our construction equipment. We have two different versions. We do have a 644 four-wheel loader that has an electric motor on it that's tied to the engine and then tied to the transmission. That would be like the Prius. Probably the more impressive one, we have a very large four-wheel drive loader, a 9.25-yard wheel loader, where there's electric wheel motors in all four wheels and then an engine sits there to power those through an inverter. In that case, that machine delivers better productivity than the mechanical drive systems that competitors have and delivers 40% better fuel efficiency.

Well, I would have said six months ago I probably would not have agreed with that comment, but certainly in the last six months we've seen things stabilize here in Europe in particular. It still has to be appreciated it's coming off a very, very low base, but instead of going down further, it looks like things are improving some. I think while farmers can delay investment in new equipment for a period of time, as they continue to delay and delay, at some point in time people end up saying, 'I need to investigate this.' And I think we're seeing a little bit of that now. Again, we would argue that we're still down 30-plus percent from what would be a normal year in Europe alone. But you know, when you're down 30% and now the next year instead of being down 30 you're only down 25, it looks better. Where we're seeing around the globe is especially the large crop production regions where the currency devalued versus the dollar. Because global commodities are normally sold in dollars or euros, a lot of them are doing well. So Brazil, for example, will be up 20%. And part of that is with the real devaluing against the dollar. About 60% of a Brazilian farmer's input costs are in real and 40% are in dollar or euro, but all their exports they sell in dollar or euro. So they stay much more competitive on the global market when they devalue. That was true for Russia as well, where the ruble has devalued. So those markets seem to be doing much better than, for example, the US. After Brexit, I'm not sure what will happen with Great Britain, but certainly right now it has helped them in the short term. The only ag market that we would say has not fundamentally improved is the US market and those in North America, US and Canada. And that's because commodity prices have remained very, very low. And so the farmer, while they're making some money, they're not making a lot of money, so they're staying much more conservative in their buying patterns.

I would definitely say we're on the plus side, but plus side again from what has been a very low base, particularly in Europe.

I have to say, we're furthest along with the adoption of precision ag from our standpoint in the US with farmers, but even there, I think we are up to 80 million engaged acres right now. Engaged meaning that they're using it. It's 80 million out of 320 million. So we are making progress. We are investing heavily in all the components of precision ag. We're just now coming to Greece with it. So part of that is we've been behind in the dealers now taking up the precision ag technology. You need to staff it up with people here, which they've just done. But then to your point, and we see this all over, farmers are generally pretty conservative and their adoption curve goes fairly slow on almost anything, especially when you're in a market where you're growing a crop one time of year, because the risk is very high. Versus say Brazil, where they're growing two and a half crops a year, so the risk period is a lot shorter and they can prove it out. I suspect here that as we bring out the precision ag technology, it will definitely not be an issue of farmers cannot afford it. They can afford it today, we'll be able to afford it, and I think there will be good value for them here, especially in saving input costs as well as helping them drive yield improvements.

I'm probably not close enough to it to be able to give you an in-depth answer. The only thing that immediately comes to mind from the US that helps farmers is the ability to have crop insurance. And the government helps subsidize that crop insurance. And so that keeps a farmer from having a year where there's a total loss of their crop.

We call it crop insurance. And there's two different forms of crop insurance. One protects against a total loss of the crop, and there's a second form that also protects against downside on the price of commodities. That one costs a little bit more, but a lot of people use that. So that helps the farmer assure that they will have a guaranteed minimum amount of money at the end of the year, which would help with their credit.

That's correct.

Yeah, so I did start in 1975 as an industrial engineer. I've been in all the divisions of the company and I've spent most of the early part of my career in manufacturing engineering. In the last half of my career, running parts of the world including the agricultural side of the business, in particular in Latin America, Southeast Asia, Oceania, China. And what I would say as it relates to the farming part of your question, it used to be big farms and farms that were really good, high-yield producers, farmers that were in a more limited number of areas of the world. Now you've gotten to the point that you have big farms and very, very productive farmers almost everywhere in the world where you have agriculture. I was a week ago, two weeks ago in Cape Town, South Africa, and we met with farmers there. And one farmer in particular had 9,000 acres of fruit trees. I've been in Kazakhstan where the farmer there had 1.2 million hectares of land, one farmer, a dryland wheat farmer, and he would take a John Deere four-wheel drive tractor with a big air seeder on the back of it, and the operator would go out in the morning, one pass, a straight line to the end, and halfway through the day he'd turn around, come back and do the second pass. Just amazing. And so you see that. I was in Brazil on a farm where it was 120,000 hectares, and he grew cotton, he grew soybeans, grew eucalyptus trees, he had 10,000 head of cattle. So what you're seeing all over the world, what has changed is farming has just gotten much bigger, much, much bigger. And everywhere those big farms are, they have adopted the latest level of technology and they're pretty doggone efficient. So that's probably the evolution that has been most impressive for me. And actually where it's been the most impressive is where farming is the most difficult. So maybe my best example is Australia. Farmers receive no subsidies, the land is not super fertile, they have very little rain, yet they farm. And I was with a farmer last year that throughout the entire year they only get seven inches of rain, and only four inches during the growing season. Yet he's consistently growing a crop using precision ag with our solutions. And he told us, he said, 'In the past when I would have a dry year, I would lose my whole crop. Now I'm still getting a crop.' So that improvement there, some of which is seed genetics, but a lot of it also is that technology that goes with the machinery. The agronomic information that they're getting from the machinery is allowing farmers to be much, much more productive. And I think that's going to continue.

Yeah, I think that... I know people sometimes don't like to think about large corporate farms, but I think the reality is, I'm only aware of one country where farm sizes are going smaller. Every other market, farm sizes on the whole are getting bigger, including here. The one that's getting smaller is India. It keeps subdividing. The average farm size was two hectares a few years ago, it's down to 1.2 hectares now. But most places it is growing. And a lot of times there's a bifurcation. You may have a large group of small farms, now they may stay that way, but the big farms continue to get bigger and bigger and bigger.

So that is very much true. There was a man by the name of John Deere, founder of the company, was formed in 1837. The soil in the Midwest was so thick that the iron plows prior to that would cake on there and they couldn't get it through. So he ended up taking a saw blade, which was polished steel, and it would then scour off the mud of the soil would just lay back over. And he would get his steel then from England, and that's why the company is in Moline, Illinois, on the Mississippi River. They would bring the material, the steel, in from England on barges. To answer your question, today I think the saw blade of today is definitely our investments in precision ag and what we're doing there. It's a whole platform that's going to allow us to have the equipment become smarter and smarter to the point that it will be autonomous. It's going to allow us the ability to optimize the jobsite and literally manage the field plant by plant with every step of the way. So seeing precise placement of every individual seed, the precise spraying of each individual plant, and the ability to vary this row from this row from the next row in order to both reduce the input cost, pesticides, herbicides, etc., but also to improve yield and continue to drive yield. And I think while a lot has happened already in this area, this platform is just going to continue to grow and build out.