Welcome to Moving Iron with Casey Seymour and Greg Peterson. The podcast for anyone and everyone involved and interested in the business of equipment. If you want to understand what trends and market forces are impacting the price of your iron, you've come to the right place. Buckle up. It's time to move some iron. Hello and welcome to Moving Iron Podcast. This edition of the Moving Iron Podcast is brought to you by John Deere. I've got Greg Peterson on to talk about what's happening in the market. Greg, how you doing this morning?
I'm doing well. Casey, how are you doing?
Good, man. Doing real good. Well, the couple pretty good auctions you watched over the weekend here. Saw one show up. Another one, no internet bid auction. That was pretty interesting. Talk about that one a little.
Yeah, this is the one that really had people buzzing yesterday and today when we threw it on our social media, but it was a sale at Fairgrove, Michigan Saturday. It was an estate sale for Wayne Montai. And again, no internet bidding, but they had a John Deere 4840 with 884 original hours on it. Now, every time you see one like this, of course, very natural. A lot of people are very skeptical to say the least on the hours, but you know, again, every so often you run across things that just are. And there was actually one of the commenters on our Facebook thread the other day or early yesterday. I think his name was Neil Arnold. I think he's from the area and he said Wayne and his father collected tractors and I believe Neil said there was still remnants of the plastic still on the seat on this thing. Now when you looked at the picture of it, I mean it looked, you know, nice for a 4840, but obviously the hours of the whole thing, but it brought 86,000 bucks, Casey. And to give you a perspective, again, my whole almost my whole life, 36 and a half years tracking this stuff, the highest auction price I'd ever seen on a John Deere 4840 before Saturday was 71,655 bucks. And that was September 26th of '24 in Lone Tree, Iowa. Riley Siren and Siren Auction Sales had that one. That was an '80 model with 2,163 hours. Again, 716 and change. So, this one comes along in Michigan and 884 hours and it goes to 86. And again, no internet bidding, which was very interesting. But when you couple that result with another sale that was supposed to close on Saturday, it was or I think it was supposed to it was Friday, Kyle Kelso, auctioneer out of Adair, Illinois. Kyle's annual August consignment sale. And of course, the tractor everyone's been talking about on this auction was the 1980 John Deere 4440 Quad Range with 1,071 original hours. Similar deal off a local estate, a barn find deal that as they described it had shedded since the early 90s. Anyway, Kyle had five inches of rain last middle of last week. So they had to push the sale to August 29th, two Saturdays out. But the online bid, Casey, on this 1980 4440 is already at 95,000.
Now that's already 10,000 over the highest I've ever seen. You know, I've compiled over 3,500 auction prices on 4440s. Previous high was, to be specific, was 85,000 December 7th of '23. Northfield, Minnesota, Hamilton Maring Auction Group sold the 1979 Power Shift with 1,910 hours. So I think that 4840 Saturday in Michigan and this 4440 coming up, people say it's nuts, but it's a reflection to me of a couple things. The price of new is nosebleed high and is staying high. People are buying, people assume these are collectors buying these tractors and my experience has been 75 to 80% of the time it's people that want to use them. Can be shocking but the calculation is I like that model. It's simple. 86k is a huge check. But if I'm buying a newer 200 horse tractor, what's the nut?
Yeah. So the other thing it points out is there still are some very, very, very strong balance sheets across ag country. Because again, these wasn't one or two guys bidding on this stuff. There was a lot of people in on them and I think that's why we see land values holding, you know, as strong as they have been.
Yeah. You know, that makes a good point. I mean, you're right. In my experience some of that stuff goes to collectors and you know, whatever. Or it's the, you know, that was my great grandpa's tractor or my grandpa's tractor or something like that and you got some sentimental value in there but there is a lot of that stuff that gets that goes for this kind of stuff right here where you see that 86 to $95,000 for something like this because again just like what you said right the simplicity of what it is. If it breaks I can fix it and you know the things that go around that. So yeah there is a lot of that stuff that ends back up on a farm somewhere gets on a, you know, a fieldwork tractor or something like that where you've got, you know, something like that. Put a loader on the front of it type of thing. So, there's a lot of that kind of I'm going to go use it every day and it's got a thousand hours on it, you know. So, I mean, a lot of things you got to pay attention to. I mean, it's been sitting for a long time, but but yeah.
Reminds me of the there was a sale sort of north of where I grew up kind of towards the Red River Valley a number of years ago. Steffes Auctioneer, Steffes Auction Group had this sale and the guy had an 8820 Deere combine with just couple hours on it. Guy owned a bunch of businesses and he liked to fiddle around a little bit and he just bought this thing and never used it and oh gosh, it went for some insane like 75,000 I think something like that. But a guy from a custom operator from Texas bought it and posted video of him in the field with it down in Texas. Happy as a clam like look at my like new 8820. And people were like, "Oh, dude, you're ruining it." And that wasn't the point. He bought it.
You know, it's an older, simpler machine. It's the nicest one I'm ever going to find. And like people were commenting on the 4840 Saturday, they're like, "Oh my god, you're going to have all the seals and all this stuff you're going to have to" And it's like, "Well, okay, cool. Factor that in and still where you at?
What you wind up with is a 40-some year old tractor, the lowest hour one in existence probably, and you own it and now you did the little fixups and yeah, you're ready to bail hay or whatever you want to do with it.
And again, your alternative is to whatever color is, you know, everything new is just expensive. So, it's this swirl that honestly the trend is getting stronger.
Yeah. Yeah. And I think you'll see more and more of that as you go through there. And you know, like for example, today I was looking through some tractors. You know, you start looking at that $225,000 and less tractor. I mean, a lot of those will have 3,000 to 6,000 hours on them and you know, they're worth having because someone's going to buy them, you know? And those are the kind of things those are the kind of machines that are going to start standing out and kind of go back to what you're talking about here. If you're looking at something that's basically $150,000 and less, that kind of stuff again if it's good clean stuff is going to sell fast and it's going to bring a premium price there.
Yeah. There's no shortage of interested buyers whatever color. We saw the same thing we talked about last week, the no internet sale in Lawler, Iowa a week ago Saturday where internet on the red side a 3288 with low hours like 2,500 hours or something went for 36k all-time record. A 5288 two wheel drive low hours went for 39. So you know people can often question how can you have a 40 plus year old tractor with obviously 884 hours is an extreme example but how can you have such a tractor with such low hours people can't compute why would you own this and not use it now I did like one of our Facebook commenters and said well it's we all can understand that mindset, but every situation's different. Maybe it was purchased for a very, very specific thing on the farm that is not used that much. Maybe obviously tax implications factor in maybe decades ago why they bought this thing and maybe someone got sick. It could be any combination of reasons. And we've all seen, you know, tractors and combines that are put up for sale and presented as low hours that they aren't, which makes people skeptical, but you know, sometimes you run across these ones that are kind of legit and it's really interesting to see again what they wind up selling for. But you know, outside of this outlier, like you said, even tractors, you know, this new normal we've been talking about. So maybe 15 year old tractors with higher hours that used to sell here at auction now if they're in good condition have bumped up a little bit despite the higher hours because everything is sort of adjusting and it's all tied to that very, very, very high price of new right or wrong it just is what it is.
Yep. For sure. For sure. Yeah. That's just, you know, as things continue down this path that we're on right now, I'd like to talk about, you know, you're going to see older tractors with higher hours probably bringing more money than we've seen in the past just because of where the market's kind of settling into and I think that's going to continue to be that path. You know, the interesting thing too, Greg, is like we've talked about for I would say well going back to middle of June when we started talking about it. That was right when auction prices noticeably jumped about June 15th to 17th. But another sale Saturday in Salem, Ohio, my good friends at Kiko Auctioneers, I think they go back to 1945. So they're chasing 90 plus years in the biz there. Good folks. A small farm sale. But on this sale, he had a 23 model Kubota M6141 now no loader and this thing was cherry only 96 hours on it one owner so three years old like a new tractor you expect a premium and it delivered it's over 82,000 which that's the highest auction price I've ever seen on M6141 without a loader now you're drifting obviously into that loader tractor category horsepower-wise which has been much stronger than the higher horse livestock folks have thankfully really had some money over the last few years. So, but again, very strong price there. Also on that sale was a 21 model Bobcat E50 mini excavator. An R2 series, one-owner, 806 hours for 465. That's the second highest I've ever seen on an E50 R2. And then if you go down to a Baler late model of 24 model Kubota BV 4160 with only 800 bales through it sold for 22K which at first that can sound a little soft but when you really look at the auction pricing that we've compiled on BV 4160s 22K is that's the fifth highest auction price ever. So again, even on the 2-year-old stuff or the three-year-old like that M6141, it's really all about condition. And if you get a three-year-old one now that's in great condition like that, the auction prices have definitely lifted.
Yeah. Trying to find something here that I can share with you that'll show kind of where things were. So, we were talking about that end of May kind of how things dipped and you know, where they're at. So, there's some stuff I track and I put it into this real fancy graph here. So, looks super professional now, Greg. But, I'll show you what this looks like here real quick. Let's see here. So, if you see my screen here, so basically you can look and see where all these different categories of equipment come into play. But if you're looking at where things went from April to May and back up again and where they've come back up in at the, you know, through June as I'm still putting in information from other months but you can see everything had a decline in May or coming out of April into May and then kind of shot back up. Some of the stuff's a lot more pronounced than others, especially if you're looking at so the combine data like we were talking about there. It went down, but these auction values are starting to kind of come are starting to swing back up as you start look at this momentum. Some of them have taken a pretty significant jump. So, you know, I think what we've talked about here over this time frame is that it's showing that, right? We're starting to see that momentum that we've talked about and what we talked about earlier is you know whatever you see happening in end of June and July going into August whatever that trend line looks like is going to carry through the end of the year and it's going to continue to grow and as we watch things right now there's nothing on the radar that says that unless you know some black swan thing happens but you know as you look out and you start thinking you know where are we going to be at in five six months right now this trajectory looks like it's staying pretty strong and it's actually picking up momentum.
I've mentioned in our last couple weekly calls, Casey, but to see this level of jump in auction pricing in June through into August is exceptionally rare historically. Again, I'm almost four decades tracking this. So, it just and like you say, when we've seen it before, it's always pointed towards, you know, a strong run through the end of the year. Now, the only thing different this time, every time I've ever seen it before when we'd see the jump, new sales were taking off lock step, and that's we're just not seeing that at the moment. So, it is setting up for some really interesting end of the year action, I think. And it's I'm a little I don't well, I guess fearful would probably be the word on the farmer side of things. If you're, you know, drifting into what you need equipment wise for next year, whether that's new or used to get this trend line moving this aggressively at this point on the calendar year. Again, sitting back and waiting. I mean, take these recent numbers and just imagine if corn and beans went up a bit and stuck.
Yeah. And then you're drifting into November and December when we all know what happens with end of year pricing. Yeah.
Section 179. So now I said I wrote about it before January of '25. You could kind of see the stars sort of starting to kind of move into place. And it starts with manufacturers just stopping production and then holding that price point where they are and then that back down through the dealer chain aggressively attacking the excess inventory situation two years ago up through now. And you know, folks will realize some dealers have some good opportunities for sure inventory-wise, but like I say, auction pricing jumping this much. I don't know if you can hear that on my screen. I have an online bidding thing open, Casey, and you can hear those little clicks. People are bidding on the good condition stuff and the prices are rising. So, it is what it is.
Yep. Well, you know, and that's one thing I track a lot when I watch auctions when I was tracking those things was I was concerned about the price as much as I was the number of bids that came with it, right? And some of those things you watch them and it might be 1,500 bids on a piece of equipment. You know, 600 800 bids and it's like, you know, so now those aren't all unique, right? So you got guys going back and forth, but the fact that it took 600 bids to get to where it got is something, right?
That's you're right. That's a data point absolutely worth sinking your teeth into and paying attention to. And I know for decades you've done just like me, you've looked every possible direction for relevant data. And it's like a big jigsaw puzzle. So on the auction price front, you know, I don't ever get too concerned if, you know, a one-off. It's like, well, whatever. Maybe you just had a kind of a I could describe it otherwise, but we'll keep it clean language wise, just kind of a contest where you two determined people, and that happens. But when you start to see this trend line, like I say, not just with a 4840 with low hours or 4440, but that three-year-old Kubota highest, it goes back to that new normal we keep talking about, whether people acknowledge it or not, when you look on the back end, the supply is tightened, just tightened. And the other truth, if you get to the front line, I was on a Wall Street call last week with a bunch of farmers and they spoke truth and they spoke every place I've gone. There's this coalescing mindset around it who's too high. And you know that I've always heard that for 36 years. I've never heard it to this level of cohesiveness across farm country. And whether that's right or wrong, you know, it just is. And when that mindset now has been able to kind of gel for this period of time that new sales have been so off three plus years, whatever. It's coalescing in a powerful way to the That's why it's good condition stuff. Whether it's got $3,500 getting a price that used to be $1,800 or the top side like these 4840 or 4440 or the Kubota. It just is what it is. But as always, I think hard cash auction pricing, I mean, you can't be any more of a lead indicator than what farmers are thinking and feeling and writing checks for like now.
