Welcome to Moving Iron with Casey Seymour and Greg Peterson. The podcast for anyone and everyone involved and interested in the business of farm 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 Moving Iron Podcast is brought to you by John Deere. We got Greg Mr. Pete Peterson on to talk about what's happening. Greg, how you doing today?
I'm doing well. Casey, how are you doing?
Doing good, man. Doing good. Merry Christmas. You know, you did some traveling, so hope it went all right.
Went out, we went out to visit our daughter and grandson out in Ohio and he's about coming up on two and a half, so he's really into trucks and tractors and trains and helicopters and so we had a good time catching up and got home to Minnesota, got a little post Christmas blizzard. So yeah, all is right with the world, I guess.
You know, I can't complain. We didn't go anywhere. Stayed home. We had some abnormally warm weather here in the panhandle. I want to say Christmas day was like 62 degrees and um...
We got to mess around. We were going to go play a round of golf, me and my son, but we just kind of had one thing led to another. Next thing you know, it was 3:00. We only had about an hour of daylight left. So, we were like, we'll skip it. But the novelty of playing golf in the panhandle on Christmas Day would be something to say about that.
No option to golf as I look out and see 10 inches of snow and five degrees here in Minnesota. So, I'm envious. I'm envious.
You have to use an orange golf ball. That way you didn't really have to spot it down when you got there.
I guess he's seeking the orange golf ball.
That's right. [snorts] That's right. We was talking to my son the other day. I was like, you know, it's 2025 and you figure by now somebody would have a golf ball you could hit that would hook to an app somewhere that you could find it no matter where you hit it at. But it's...
Exactly. I actually wrote, I used to write a golf column for the Rochester Post Bulletin, the daily newspaper up here for years. And I think this was like 10 years ago, the editor said, "Hey, why don't you give us a futuristic golf column?" And I said, "Okay." And I said, "Just what you said. We should have these little teeny tiny microchips in the golf ball." So, one, so we don't lose them. They're so god darn expensive, but then also get that, you know, the shot tracer right on our phone. So when I hit a banana ball in the trees, I can look at the pretty curvy line, but I can find my ball. So, maybe that's just another 10 years out. I don't know.
I think it's a conspiracy, Greg. The golf ball cartel won't let that happen. So...
Ah, yes. Corporate America. Yeah. No, it's, but it would be, it doesn't seem like it should be that difficult these days. We just need the cost of these teeny tiny microchips to come down a little bit. Maybe the golf industry could learn some stuff from the farm ag industry and incorporate some of that stuff.
Yeah, maybe. I could sure use one of those things because I seem to lose more golf balls than I find when I play golf. So...
When I was a little kid, me and my brothers, we lived right on the golf course in our little town of Benson, Minnesota. We used to spend summers walking along the corn fields of the course looking for golf balls that people sliced into the corn and yeah, you can make a little money, make a few quarters and go to the Dairy Queen, buy yourself a Dilly Bar and life was simple.
Yeah. About this time every year I see on Facebook Marketplace somebody's selling, you know, they've got a trash can full of golf balls that they've gathered up and I buy them for like a hundred bucks, 150 bucks or whatever it is and I get 200, 300 golf balls out of the deal and that usually lasts me about, you know, five or six years and then I get another trash bag full of golf balls. So, yeah. Anyway, I never learned how to not slice or hook. I see that's the thing. I don't know if I'm going to slice it or hook it or if it's going to go straight when I hit it. So, [sighs]
It's problematic when the misses can go both ways. That's, yeah, that's not good for low scoring for golf. I feel your pain.
Grip and rip. That's all I say. You know what I mean?
Grip and rip. As long as you have fun where it goes.
Long as you have fun, who cares what you shoot? That's my philosophy.
Yeah, it's a good time. It's a good time.
All right, Greg. Here we are at the end of the year. We've been doing this podcast now for one year together here and we've had a lot of great conversations along the way and one of which we've talked about since the beginning of the year was how the auction market was coming back and how we were starting to see some consistency and stabilization of the bottom and that just got firmer and firmer as the year went on. We've seen retail prices come down and we've also seen the amount of equipment that's on the marketplace start to shrink right along with that. All stuff that we talked about coming into '25 and all stuff that we've tracked all the way through. I guess as you look back on 2025, what were some of the big aha moments for you that really pointed towards, you know, correction, marketplace healing up in the marketplace, whatever it might be, but just some moments in '25 that you look back on and say these are some turning points for me.
Well, it's a good question, Casey. You know, covering auctions for all these pushing four decades, usually there are bellwether sales with results that you kind of go, "Wow, you know, the market maybe turned on that day or began to turn." I think for me 2025 is just the consistency of the market. To me, the whole used equipment space has become so much more efficient. So, we, you know, as we talked through the year, every week here, I mean, it was literally about the 20th of February of 2025, auction prices went up a little bit and they just kind of stayed there. Now it's interesting because everywhere I go and I traveled a lot end of the year out to auctions and different events and things and I totally understand it but people are coming up and online they comment like, oh, used equipment values are... but you got to talk facts and facts are that used values solidified and then we came to November and December and they actually went up a little bit. I'm talking values on good condition used equipment. So to me that was surprising because I think 2025 will be the year we look back at as kind of a big change in the whole farm equipment space because there's always been ups and downs based on farm income, price of corn and beans, whatnot. But the lags, the downtimes, it used to take, like the last big downturn again we've talked about 2014 and the '13, '14, '15, '16, that took like about three years until I started to see the auction prices solidify. This time it took one year and it's holding so far. So I think it plays into those things you mentioned. Overall inventories come down. You know, is it tight? No, but it's tighter, definitely than it was a year ago. And sales of new are still, you know, very, very sluggish. In fact, it's almost surprising now when you see a 2025 item show up at auction, it's like, whoa, look at that. So, that AF11 we saw up in Alberta or wherever it was a couple weeks ago. So yeah, 2025 is just, to me it surprised me how just consistently solid auction pricing has been.
Yeah. So I think for me it's two things. One is, I think the biggest thing for me as I look back on 2025 is there's always been these little road signs that I pay attention to when you're going through a downturn like this. One of which was older six to 10 year old stuff and the values associated with those. One thing I've always said about those machines is that when you get to a certain price range there comes a point where the demand for that goes up and you start to see value of that go up. And we saw that happen this year, right? You didn't see that happen in '24, '23, but '25 you sure saw that really nice late model lower hour stuff, or sorry, earlier model low average hour stuff come through where we were seeing some 5,000 hour tractors and 3,500 hour tractors and even some, you know, 1,200 hour combine stuff like that where they were older machines but they were really well taken care of. They looked good. Their inspections looked good on them. Everything about the stories behind them correlated great with the condition of the machine and everything lined up and you saw some big numbers come through on some stuff. Which again to me always points to, hey, we're seeing some things out there that show some leveling of the ground starting to happen there. The other thing for me that really kind of jumped out at me a little bit and I expected this, like it's not like a big drawback by any means at all, but you know if you go back and look at where price increases went during the COVID outbreak between 2020 and 2023, go back from 2017 to 2023, that was a five, six year period in there that you're looking at price increases happened. The biggest chunk of those price increases were from late '21 all through '22 and into early '23. But there's like 10 years worth of price increases that happened in like a five-year period, right? So, the price of new equipment just blew the top off, right? I mean, it's just blowing up big because of that. Earlier, the order writing periods for all the manufacturers, there's not a lot of one-year-old equipment on the marketplace, right? We're going to see that carryover in the '26. I think that you're going to see a lot of one-year-old equipment come back in '26 either. So, you're going to have this '25 model year stuff, this '26 model year stuff where there's not a lot of pressure on the upside of the curve, right? The top end of the curve where the most expensive stuff is pushing down on the older stuff. So if you look at where the market is now, there is a strong amount of equipment in that three to five year old stuff which is rapidly coming off the market which I was kind of concerned about. But if you watch how much of that stuff moved off the marketplace in late November through December, it was at a higher acceleration pace than I expected it to be. And so as you watch that stuff move through there, you saw a lot of that stuff come off where I think the market setting up for '26 to really put in a really healthy condition is that in past years during down cycles like this, the front end of the curve was so high with one and two year old stuff that was really low out and very expensive compared to things below it that it was hard to get those machines moved into different brackets through trade cycles to get more machines in those buckets. But what we see happening today is there's not nearly enough machines at the top to feed what's going on at the bottom, which allows the mid-level stuff, that three to five year old stuff, that six to 10 year old stuff to really have a chance to really, lack of a better term, kind of cannibalize itself and really trim those numbers down to where we get to a really healthy spot going into '26 or going through '26. But in my opinion, we're kind of setting the stage for what the new normal might look like as we push our way through this, longer trade cycles, fewer machines on the top side to where it can feed the lower side. So, it's going to force people into having longer trade cycles or upgrade kits or whatever their strategy might be just because of the price of a one or two year old piece of equipment right now. I think we're kind of setting ourselves up for that new normal and new guys are going to continue to buy new. But that 20% that always buys new, that 80% that kind of falls in there maybe once in a while they'll buy something new or they're on the lower end of a trade cycle where they buy something new every three years and then they run it for three years. I think that changes up a little bit and we're going to see less new equipment being sold, more used equipment being available because of longer trade cycles. And I kind of feel like as I watch what's happening right now and as I look into '26 and the conversations you and I talked about here where guys are stepping back going like, that grandpa farmed this same farm with three tractors and we got six now. Do we really need to have six tractors or do we need that extra combine that we've been talking about? So that changes the landscape a little bit where I think it ushers in a new normal in '26 that really points towards, you know, less machines on the farm, more hours, longer trade cycle.
I agree completely. I think the issue of the thinness you're talking about there on the one and two-year-old stuff used available and you documented a couple weeks ago we were on here talking and you pulled up numbers that showed it, the number of '25 models. A couple things. One, I think if I'm a manufacturer, I'm smiling from ear to ear, honestly, because of that fact you just described. This space is not going to have the problem it had previously of that overhang of one, two, three-year-old stuff that just kind of clogged things up. Now on the flip side, if you're a farmer and again this is why about a year ago I wrote that column for Farm Journal and I said, whoa, whoa, whoa, eyes wide open here folks, like you said this is different. That was then, this is now. And now things are moving quick. So it's, you buy it, we'll build it. That thinness of one and two-year-old stuff, you don't really notice it so much now, [snorts] but when corn and beans jump up whenever they do, hopefully if that's a year from now, a year and a half, two, I don't know, who knows? You're going to get people that maybe want to come up and get up into that one, two-year-old stuff, but guess what? It's not there like it was 10 years ago coming out of that down cycle. It's just not there. So, I think that's why we're seeing, you know, that the auction pricing on good condition used across that whole spectrum solidifying. For example, December 23rd, right before Christmas shut down on the auction front. We had a nice S770, was a '20 model. Big Iron sold it. It was Iola, Kansas. It's a '20 model, 1,140 engine hours, it went for 229 and a quarter. That's a '20 model and a nice machine. Like you said, those nice machines, there's demand. Now, average auction price in 2025 on a '20 model S770 is 185, about 186,000 bucks. Now, it's interesting because when you compare it to the average dealer ad on a '20 model S770, which is 250, about 256, you do my Machinery Pete ratio, average auction price as a percentage of average dealer price, it's 72.6%. And that is right at actually the exact norm the 26 years I've been tracking this.
Now if we'd have done this 18 months ago, you know, my Machinery Pete ratio on late model combines was like, you know, whatever, 64%, 63% and falling. So it's just [clears throat] different now. And again, I think that lack of one and two-year-old stuff sitting there on the lot or at auction, on the auction side, it's making the prices stronger. So I agree completely with everything you laid out there.
Yeah. And I think one thing too, just like you're talking about there, is that it seems like these numbers are significantly bigger than they are in the past because they are, but the percentages are about the same. And that's the thing that if you look at it, my rule of thumb has always been about 25% on a one-year-old machine. And then, you know, it dictates market by market what a two-year-old machine is worth, but somewhere you lose another 10 or so percent on the second year and you're going to lose another 10 or so on the third year. Then it really starts to taper down past that. So when it's all said and done, you know, but 25% now, that's a big number with the price sheets, right?
Right. If you're talking $800,000 something, you know, that's, you know, you do 10% of 800,000 bucks, that's $80,000 times two is 160. Half of that again, 40. So, you're at 200,000 bucks, right?
$200,000 swing where that used to be 50 grand or 100 grand or 150,000 or something like that. That movement has changed dramatically. And, you know, discounting and those kind of things you see from the factory, they're stronger now. They're going to be. And I think that's another thing too to pay close attention to and how that affects '26 and the used equipment market spaces because as soon as discounting starts to come out, if they're discounting above and beyond normal discounting levels, that affects the used equipment space too, right? I mean, so if we're seeing some 5% discounts on combines, an additional 5% discount on combines or something like that, you know, a 7% discount on sprayers or something whatever it might be, right? That 7% now offsets against used and depending on where the used market's sitting at that can stagnate the used market pretty fast. But again, new prices are so high that it's going to take a significant amount of discounts to really make anybody be like, I don't think I'm going to go ahead and pay the extra whatever for that, you know.
Yeah. You know this, I never written much about the K-shaped economy, you know, specific circumstance which we're totally in right now and I think it's becoming, the K is just getting larger and larger as we go here, not just in ag but our culture in general. You know, the incredible price increases you talked about on new farm equipment, obviously it goes across so much. I mean look at home prices over so much of the US now. It's, who does it benefit? It benefits the older folks, boomers plus, with got their house paid off and sitting there watching it go up, up, up. Well, what if you're 25 and you just got a good job out of college, you're trying to pay off your debt, you want to get a house, start your family, and it's like, I can't buy a freaking house. They're too darn expensive. So, then I don't start a family. So, it's interesting to me, Casey, what I'm starting to see is this K-shaped economy gets wider, basically haves and have-nots. Collectively, we're starting to go, whoa, I mean, we can't completely eat our young, so to speak. Now in ag, of course, this problem has been around for a long time. The challenges young folks have, if you don't inherit a farm, how the heck can you crack in? And it's, I don't know, you know, we tend to look towards government for solutions, but I think now we're also getting to the point when government's not going to help. We can't depend on them for anything. They just break stuff, right? [snorts]
I was encouraged. I will say I was in Virginia, Windsor, Virginia, covering an auction on December 20th, a really nice farm retirement auction and a young guy came up to me, maybe 30 years old, and he just had a specific question like, "Hey, Pete, what do you think this Draper head's worth?" So, we talked a little bit and when you know how it is, you talk once you get past a few minutes, then I ask, "Well, hey, tell me about your operation." And this is a young guy who just smashed it on his own. And he said, "Pete, I started by moving snow. I just ran all the time. I bought a tractor, another tractor, a plow, then I got some land. I started chipping away, chipping away." And I'm like, "This is awesome." Is it easy to do that? No, it's super hard like it's always been. But I think we need to start to figure out a way, you know, to help, you know, transfer a lot of... I think listeners understand what I'm getting at here and there's no easy solution but you know you document the price of used equipment going up, up, up, new equipment up, up, and it's, you know, even at the manufacturer level to me they should be thinking somewhat about, you know, not just the person who can write this check, but what can we do to foster, you know, a healthy space so that we have more customers 30 years from now. And these numbers have got so big like you said, you said those price increases '21, '23, that was maybe like 15 years worth of price increases and then it hasn't come down yet.
No, it's, that's the one thing now to me is the manufacturers are just clinging to that new price point. And I understand they don't want to go back. Going back is a slippery slope. But now, because what we just described, at least they don't have the problem of all the one, two, three-year-old stuff piled up on dealer lots. So, it might, like you said, it might allow them now to go, well, at some point, okay, here's a little break on this whatever combine, this high-speed disc, this tractor, whatever. It'll be, '26 will be interesting to see how they play at the manufacturer level, like you said.
Yep. For sure. And I think, like you said, you know, it's one of those deals where you watch this thing move and all the parts that go with it. I think this ushers in that, you know what, I have a three to five year old combine. I typically go get that one to two year old machine and bring it back into the farm and I run it for two or three years or whatever it might be. That trade cycle, it's a pretty common trade cycle, but I think that trade cycle is lengthening out. But I also think that opens the door to, well, I could spend $550,000 on a used something or I can, you know, I can upgrade it for half that much. And I think that, or 60% of that much or whatever the number is, right? It's less than going out and buying a complete good machine, right? Those conversations are being had. More people are taking a look at that which then again that throws a whole another wrench, kind of the proverbial wrench into the gear system over there because now you're taking a used buyer out of the marketplace because of the upgrade kits situation that's there. So yeah, one thing, there's a lot of moving parts there.
I think it makes me think of a friend of ours, Casey, when you go down that road, Jake Bryce with Machinery Scope. I thought recently, your extended warranty, we had an auction and I know the auctioneer reached out to me with a note and you know they sent me the info on the sale which then we do a promo on it but they were like, "Hey Pete, be sure to mention that this combine has, you know, the max extended warranty." And I was like, "Okay, thanks for bringing that up. That should be right at the top of the listing." So yeah, if you're going to be selling any piece of equipment, folks, private or auction, I mean, go to machineryscope.com, check out our friend Jake there. I mean, the value in this current situation, like you just said, as the life of the equipment gets stretched out farther, that extended warranty is really important. Or like you say, it almost tilts you back towards, well, if I'm spending 500k on a couple-year-old one, maybe I should just buy a new one. And again, that's a good condition if you're the manufacturer. They're kind of sitting there waiting for it to kind of tilt back that way.
Yeah. Yeah. It's going to be interesting to watch '26 evolve and how it does. But again, I think we're kind of setting the stage for what the new normal looks like. And I think we're going to continue to push down this path of less brand new off-the-shelf machines coming out just again because it comes back to who can truly afford what that whole scenario. And typically the ones I think that are going to be the ones that be able to afford that are the ones that are buying equipment at a maximum level discounts by all the manufacturers. And that's just going to be, you know, watch continue how that moves along, right? Which, but I think again like I said, like if you look at three to five year old machines, that's the biggest chunk of machines out there and the last time this happened, you know, '12, '13, '14 machines were the biggest chunk of used equipment and there's, I mean it's still out there now if you go back and look at that kind of, there's still a big hump out there of those machines. This is going to be different where there's not going to be enough backfill of new machines coming in that it gives that opportunity for that to flatten out and really fit the marketplace which it really excites me for the used equipment space and what's that do for pricing, what's that do for stability, what's that do for balance sheets. I think that does a lot of things that we didn't see happen in '17, '18, '19 because the amount of '12, '13 model stuff that was on the marketplace. I think it completely changes the landscape and ushers in a more sustainable used equipment space that it's not this high highs and low lows. It's more vanilla and a lot in the middle there.
I agree completely. In fact, I would have data proof of that because that last downturn you just referenced, Casey, I've written about this a lot, but if you could wind, you know, folks, you can go into machinerypete.com and look at the auction prices and go back. So I invite you to go back to 2014, '15, '16 and look what like a 8235R sold for with 500 hours or 800 hours. So that three to five you're talking about. If you would have bought, you know, 10 of those low-hour ones, red, green, blue, whatever back then and just kind of used them a little bit, keep the hours low. I mean, hello, Merry Christmas and what they're worth now. But this time around because of the, like you say, this is a new normal. You're completely correct. It's, it'll just be fascinating to see how it plays out. But the vanilla-ness you describe, that is a really good thing. It's just a more even space to me. The used farm equipment space is catching up to the used automobile space in terms of velocity. And I think again, if you're a manufacturer, that's a good thing. If you're a farmer, you just have to be aware of it. You don't have to like it, but boy, you got to be aware of it. The ins and outs, ups and downs, and where those opportunities are. There's always opportunities. But if you just assume it was like it used to be 10 years ago, you're going to get flattened.
Yep. For sure. And I think again that's what you start looking at trend lines and you know we both talk about this all the time on here but data doesn't lie. You got to figure out what that looks like. [coughs and clears throat] And just because you start seeing something dip and you start to see an auction value raise up or a retail value start to raise up or you're seeing more demand or something like that doesn't constitute, all right, this is the new, we're going to go in here and we're going to sell a bunch of new stuff. We're going to go out and make new things happen because you have to have some caution when you're going through those things. Right? Now, the other side of that argument is you've got to sell new equipment to generate used equipment that can then, you know, feed the beast. And you got to figure out what that looks like, too. And you got to make those kind of things happen. But at the same time, shoehorning in a new sale when they should have been a used buyer, you know, I'm going to say this, buyer beware. You know what I mean? Like, if you're typically a one to two-year-old buyer, stay a one to two-year-old buyer. Don't jump in and buy that new piece because it's going to mess up what it looks like if there is another downturn that comes. And if you look at past history with the COVID thing, that deal snapped pretty quick and it went sideways really, you know, in about 18 months but also recovered, air quotes here, recovered in about, stabilized in 18 months too. So this was a significantly shorter amount of time to feel significant pain and some easing of the pain in that time frame where in the past, you know, it's typically been, you know, four or five or six years of really good times and three to four years of, you know, cleaning up the mess and then getting back to the new normal. Every one of those cycles, if you go back and look at where those cycles were, they all gotten shorter along the way. And this one was really short again. So, I'm not saying that, hey, the next one's going to be six months collapse and then we're going to buy six months again we're going to be back to normal because a farm equipment economy doesn't work that way. It's, everything takes a year for the bad stuff to happen, the good stuff to come back in. So, but what I'm saying is those drops in pricing and drops in value and drops in market conditions and those kind of things are going to be significantly faster than they've been in the past just because of the dollars associated with it, right? I mean, you lose 10% on a $500,000 something, that's 50 grand, right? But you, you know, most of the time you're losing 40 cents on the dollar and you take stuff to an auction during the collapse, 50 cents on the dollar on a consignment. So, you're talking $250,000. Talking, you know, $100,000, $200,000, $150,000. Those swings are dramatically bigger now, even though the percentages are about the same, right? Their swings are just dollar-wise huge, are a lot more impactful than they have been in the past, right?
Changes things dramatically.
Yeah. I guess, you know, to wrap things up from my seat, Casey, as we go into '26, you know, two things that I'm really keeping an eye on. One is, you know, this lack of new equipment sales has stretched out for pretty long now. And I have never seen in my 36-plus years a... like we talked about, used values are solidifying to rising a little bit. That has always equated to increased conditions to sell new equipment except not this time. I just, there's no corresponding used is going up. So new is going to take off. No, I've never seen this before. So at what point is it, mid-'26, late '26 into '27 when... and that might be to your earlier point about at the manufacturer level like we got to sell some new iron here. And well, what does that entail? How are you going to goose that condition? So that's one thing. The other thing I'm watching is at the farmer level. This downturn at least on the grain side is stretched out long enough now and we live in a different age when we're doing podcasts like this and people are on TikTok and the information flow is just dizzying, right? But to me, from a data perspective, as I absorb all this content, it's been interesting to note the number of farmers talking about, you know, like you said before, do we really need six tractors? Maybe we can do three or four, and we're not going to go back down that road again. We don't need that third combine, whatever. And to me, that reminds me exactly what dealers were saying a decade ago in the mouth of that beast of that one, two, three-year-old overhang that was so huge. And what dealers said back then is never again. We're never going to do this. We're not going to get ourselves in the same spot. Now, it's one thing when the dollars are tight, but whenever the dollars start to flow in ag, will that farmer mindset stick? You got the price of new way up here. Will it stick? And so those are two things I'll be fascinated to see how they kind of play out.
Yeah, for sure. All right, Greg, good place to stop. Appreciate everything, you know, this year working with you on this podcast, enjoying it. So, really look forward to what's going to happen next year. So, folks want to reach out to you. Best place to do that on what? TikTok or not TikTok [snorts] text and I don't know why I said TikTok.
The one place Machinery Pete is not is on TikTok but [laughter]
That's a hard place to maneuver. I'll be honest with you. TikTok is an odd animal.
I'm just a chicken. I haven't dipped my toe yet. Maybe '26 will be the year Machinery Pete tries TikTok. How about that?
No, just hit our website or social media folks again. And hey, hats off to you, Casey, for moving on your podcast what it is, how you're helping the whole space here and great fun this year and look forward to '26, brother.
Right on, man. Well, Greg, looking forward to working with you again here in '26, making sure things keep pushing down the line here. So, with that, we'll talk to you again next week.
Sounds great. Have a good one, Casey.
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All right, welcome back to Moving Iron Podcast, folks. Got Sean Hackett on here for the last week of the year and run down a little bit what we saw happen. Sean, how you doing this morning?
I'm doing really, really good. Looking forward to unplugging a little bit, which I rarely do into the end of the year and getting fired up for what the trends might be for 2026. So, yeah.
Yeah. So, you know, '25 is a year a lot of people want to forget, right? And it feels like we've had a lot of those years people want to forget over the last five years, but when you are kind of looking at how things went, we saw some back and forth stuff in the marketplace. We saw things, you know, price of corn came out of the year with a three in front to where we're at now. You know, we're bouncing around that 436. You throw basis in there and those kind of things. You're in the high threes, low fours, depending on what your basis looks like. We've seen some back and forth on the political side when it came to what happened with China, what China was going to buy and not going to buy. We've seen some monetary policies come through where we're seeing some, you know, lowering of interest rates. Now they're kind of back on the fence of maybe we should not lower interest rates, but we're going to get a new Fed boss. So, that's going to change things around. So, I guess Sean, as you look at '25 and you see how that set the stage for '26, weather-wise, you know, we've seen some cold weather like you've talked about. We got a little reprieve from that right now where I'm at. We're up in the 60s right now, but you also talked about that split between two big cold blasts as they came through. But, you know, as you're seeing how '25 sets the stage for, we're going into '26. What's your thoughts and what's your feel for how we're going to move into next year?
2025 was the year of chaos, headline risks, endless tariff volatility, and it just made for a very, very challenging year for everything other than essentially the precious metals and maybe throw copper in there. Other than that, just a very difficult year. Too many headwinds, too much uncertainty, no one knowing what the rules of engagement were going to be. And it's just been a challenging year for those that produce most commodities. So where we're ending is that the Federal Reserve, forget, I really don't think interest rates are that important. More importantly, are they expanding or contracting the balance sheet? And they made the big statement in the last Federal Reserve meeting is that they've ended quantitative tightening, which is taking money out of the system, and they're back to quantitative easing. $40 billion a month that they're going to be pumping into the economy right now. Reinitiating quantitative easing, meaning adding to the money supply. It takes time for that to have an effect on markets. It's not instantaneous, but we haven't seen a shift from quantitative tightening to quantitative easing since 2020 when COVID hit. And we obviously, you know, did some wild things with monetary policy. Not expecting those kind of wild things. But nonetheless, we're now moving into they're printing money again. We are going to have to roll 15 to 20 trillion US government debt over the next 12 to 18 months. And the only way you can roll that and add more debt is you need to add liquidity, which is what quantitative easing is all about, is adding enough money to buy those bonds so that the money can roll over and the government stays in business. So that has always been an inflationary tailwind to hard assets, to commodities in general. Meaning that all boats will float higher. Now it doesn't mean they all float at the same rate. It depends on the fundamentals of each market, but generally speaking, if you start printing enough money, everything will rise at differing rates based upon the supply demand fundamentals. The markets that tend to react to this early and first are your precious metals. Things like silver, things like gold, even platinum oftentimes reacts to this. Sometimes palladium even reacts to this. Anyone following what we call the white metals, they've been, that's the only place that we've been in a bull market and because they're seeing this monetary inflation up ahead and they tend to surge first and then the energy and the ags, you know, come in behind it. They took off in 2020 way before any of the other commodities took off and then the other commodities took off as we got into '21. I think '21 is an analogous year to 2026. Not the same trajectory. I'm not printing that kind of money, but in terms of the timing of liquidity, I think 2026 is going to be a pretty good year for hard assets overall. And so that's the monetary side of it. And that's extremely important to have that on your side if you're going to be looking at a favorable environment for overall commodities, for agriculture specifically. Obviously, Mother Nature is very, very important. And so when we look at the weather, right now the weather's been very, very good for South America for the first half of the growing season. There's been no major heat. We've gotten some very, very good rains here in the last two to four weeks. Soybean crop's going to be very good. We're going to have a big harvest starting in March. And even though I do believe that this second half of the growing season that we define from January 1st through the end of May is going to be on the drier side, we still don't think we're going to see a lot of heat. Casey, and, you know, if you don't have a lot of heat, you could have below normal moisture and you're still not going to have major crop problems. So, I don't think we're going to get a weather catalyst from South America. I don't think that's going to be the thing I'd be looking for in terms of weather. What I do think could start to happen is we move into our spring, and we talked about this on your show before, and, you know, we could have a large snowpack, a large snowpack melt, riverbed flooding...
Some late-stage winter-type weather that could make for an un-ideal start to the planting season. And then obviously we get into our growing season. I want to set the stage. Right now we're in a weak La Niña. We've been in a weak La Niña. We're probably at peak La Niña and we're going to start to weaken this La Niña. And by the time we get to the spring and by the time we get to the summer, we think we're going to be neutral positive, neutral to neutral positive, but no El Niño through July, August, and then we think we go into an El Niño in the fall and into the fourth quarter. So if we set the stage for this, Casey, what that essentially means is we are likely to have much greater weather concerns for the month of July this season than we did last season, because we're not going to be in El Niño. We're going to be sort of in a transition. And we're going to have a, I think, you know, last year we had no weather-related rally at all during the entire growing season. Zero. I think we could have a more traditional, you know, mid-late June into July weather spike on warmer, drier weather. And then if we enter El Niño in the fall and into the fourth quarter, El Niño means hot and dry for central northern Brazil where they grow the majority of the soybeans. So I think the weather variable is negative until the spring. And I think the spring is when we start to shift the weather variable from a negative headwind to a positive tailwind, parlaying into our growing season with a slow start to the planting season and some issues in July to very challenging soybean weather for the third and fourth quarter. So if I'm thinking weather, I'm thinking the turning point's going to be the spring. What I see here in the first quarter in terms of a catalyst would be for corn. The USDA report in January tends to get fairly close to the truth. Doesn't mean they get all the way to the truth, but they tend to move aggressively towards the truth. We've used and we've seen AI modeling of actual harvest results from across the entire grain belt that compare same acres to last year to this year and compare the two and show that the overall yield performance of actual results that came out of the field, not by my perception but by AI modeling of actually, you know, saying what actually happened versus last year, shows a crop yield slightly lower than last year, Casey. Slightly lower. Last year, I think it was 179 and change. So the AI modeling is saying it should be 178 and change. That's where we should go. I'm not saying necessarily that the USDA is going to be willing or able to do that, but I think we could come down substantially in this report in January, maybe 180, 181, something like that. And then they could screw around with quarterly grain stocks to get the number down to right. But when we, if we eventually work that number through, it means a billion, 1.5 billion bushel carryout for corn. And that to me is an upper $4 corn market, not a low $4 corn market. It's not the biggest move on the planet. It's not a career-retiring price level, but you can kind of make that pencil out a little better. Upper fours, maybe low fives if we get a spike trade like we had last year versus, you know, upper threes to low fours that, you know, that we've been dealing with since the late summer here into the end of the year. So that's the catalyst for corn. Soybeans, I think we've made our rally. We had our rally on China's going to buy a few soybeans. I don't think the yields are going to change much in the January report. The AI modeling does not show much of a change, that the numbers are pretty close to being right. So I kind of think we had the rally in soybeans. We've had the opportunity to sell. We had that dollar and a half rally. And with a good crop coming out of Brazil, I think we've made our highs in soybeans for a while. I personally think that whatever that was, 11 and a half, 1175, whatever the number was exactly, I think that might be it for a while. I'm not saying we're going back to the lows, but I think we made our highs and we're sort of rangebound while corn catches up and prices higher. Everything that I hear from my customers, everything that I heard on my travels, in my speaking engagements that I've been at, suggest a lot of corn is going to get planted if weather permits here in the spring. A lot of ground has been worked and has been prepared for corn. I'm not saying we're planting 100 million acres again. That I think was a bit excessive, but I think we could plant every bit of 97 or 98 million acres of corn. I think that's what I'm hearing we're going to try to plant. And that means we're going to have another low soybean acre number. So the time to get excited, to get re-excited about soybeans is after Brazil kind of sells what it has to sell as the supplies come here in March and we start talking about another very, very low soybean acreage number, any weather issues, China keeps buying what they're going to be buying. Maybe we finally clarify the rules on renewable diesel. Who would have thought maybe we do that? You know, you could see how soybean prices could get more bullish from spring forward, not necessarily specifically in terms of mother nature necessarily, but just it's not going to be enough acres that we're going to be, you won't need a whole lot of margin of error there to get yourself into trouble. So long as China just maintains some level of decent purchase, which I think that they're going to. It's an election year. It's a midterm election year. The Trump administration is going to throw everything at this economy. They're going to spend everything that they can. They're going to hand money to everybody, consumers, farmers, anybody that's willing to accept it. They're going to get their guy in the Federal Reserve here in May to print, baby, print. Drill, baby, drill. Print, baby, print. I mean, he's going to do everything he can. He's talking about legalizing marijuana now because he knows it's popular with younger voters. I'm not here making a statement that's good or bad or indifferent. I'm saying he's doing everything he can to make sure he keeps control of Congress. That is very good for markets. It's very good for commodities. Very good for inflation. It's very good for demand. If he hands $2,000 to every person out there, usually you don't put that into savings. History says you spend it. Whether you spend it on a movie, popcorn, whatever it is you spend it, you tend to spend it. So if you take $2,000 to, let's say, half the people are allowed to get that and the other half are too wealthy to get that. I don't know. I'm just guessing. But, you know, $2,000 times 150 million or so. You run the numbers, there'll be some significant, significant physical buying of a lot of food and commodities and stuff. The economy is going to rip, in my opinion, because it has to rip if he's going to get the voters to vote for them. And he already handed some money out to the farm community. I have no doubt that won't be the last money that he hands out because he wants to make sure that the rural states that are very important to winning Congress, that he makes sure that he still loves them. He still loves them and he hasn't forgotten about that. You know, he still loves them. Whether he does or doesn't, I don't know, but he wants to make the illusion that he still loves them. So all that being said, I mean, it's hard to look at all of that and not be fairly optimistic about the commodity side of the ledger this year. And, you know, and so, yeah, I mean, I think that's what I see for overall weather. That's what I see for monetary policy and geopolitically. I just don't think Trump's going to do anything that's going to piss China off, piss anybody off. I think the tariff thing is going to just completely de-escalate. You can't afford another schism there. He's got to get people confident again. So everything that was a bad thing for hard assets this past season is going to be taken off the table at least until the November elections. After that, I don't know what's going to happen. If Congress stays on his side, then the following year could be ugly again because he might feel emboldened to go, you know, he may be emboldened to go take aggressive extreme action again. But for this particular year coming up, he's got to be everybody's friend. That's how I see it right now. So, yep.
I'm going to ask you this question. So 40, 50 years ago, the decision for US agriculture was kind of built around the fact of we're the largest producing country on the planet. Corn, wheat, soybeans are export. We're going to build our entire model around that with Brazil and Argentina and other South American countries that are building a lot of infrastructure when it comes to agriculture-based stuff. You ever think that the United States farmer will take a look back, step back, and in this season those things are out there and say, hey, we're going to take a hard look at this from the food, fuel, and feed approach and we're going to grow just enough to cover those big three things, right? Make sure we get enough feed, make sure we got enough to grow for biofuels and those kind of things, and obviously the food's out of it. That completely changes the structure of the way the United States looks at it because we can't continue to keep doing the we're going to grow as much as we can and then hope the rest of the world comes and buys it because it's not working in our favor very well right now. So as you watch this stuff transpire and take place, Sean, do you think that over the next two or three years, do you see the United States agricultural mindset changing to a different fundamental approach to the acres that we grow and what we grow on those acres?
It has to change. The export-driven agricultural model as it is currently devised, it can't possibly work. We are never going to be able to compete with a country like Brazil that anytime that the price gets profitable, can plant unlimited amount of extra acres, which they, I mean, what is it? They've increased soybean acres by 60% in the last six or seven. I mean, there's just no way to compete with that. So we can't compete with that. Now, we can force China to buy our soybeans for a little while, but that's not a long-term plan, right? I mean, it's just not. So the reality is either we have to find someone else to export to that wants to buy from us that's large enough to handle the excess capacity that we're producing that China is no longer really needing. Or we need to change our model to a domestically demand-driven model. Meaning we produce what we need for food and then anything that we produce above that, we find other ways of using those supplies. And the most logical way to do that or has been to do that is to do it with creating economical domestic energy for the country. The problem is that the governments that we've had have not been very clear and consistent about doing this. They do it and they stop and they stop and they do it and they do it and they stop and they stop and they do it and they stop and they do it and they do it and the rules are just not clear. And so I don't think it would be hard to rejigger our economy focused on producing energy from excess production than export. We certainly can do it, but we have to have the political will to do it. And my general feeling has been that the energy industry's influence on our politics has kept governments from fully being able or willing to commit to agriculture to energy policy. Meaning that the oil companies and the energy companies, the big energy companies have not wanted that. They have not wanted energy to go that way. And so it hasn't gone that way enough to really make a material difference on changing our agricultural structure. The good news is more and more of these big energy companies are starting to own more and more of these renewable diesel refining plants to where it seems there might be a political shift where the energy companies are starting to get more excited about promoting ag to energy because they now have an ability to make money from it whereas before they really didn't. And so that is something to watch to see if there is more support from the oil industry, from the energy industry to support ag to energy because I don't think you are going to get governments to support that unless the energy block is on board because they just have too much influence or have had too much influence in Washington. And so I think that's been the impediment, but it absolutely can be done. I think it could be done fairly quickly and I think it could have a dramatic impact on the economics of US ag industry fairly quickly if there's a political will to do it. You know, I'm hoping and praying that the stars align to start that process in 2026 and really accelerate that as we go forward. The only other avenue that I see other than that, Casey, is India. India is as populous or more populous than China was or has been. They are in the same place economically as China was 25, 30 years ago. They have an educated population. They have a growing economy. They have a growing disposable income. Their demand for everything is growing. They're becoming a net importer of everything. We've been trying to work out a trade deal with them. But if I was to think about if we are to maintain an export-driven model, if we still believe that that's in our best interest to do so, we have to find a way to see a path towards selling things to India as a way to replumb away from selling stuff to China and selling stuff to India. They have the ability to buy it. They're going to continue to have the ability to buy it. Their demographics are some of the best in history. That may not be necessarily as easy a switch to turn on as quickly as the energy switch, but I think it's there and I think India is ready, is entering the economic size where they could really be a major demand-side player here for the next decade. And if we position and participate correctly, we could be the go-to country for their food purchases. So that's the only other thing that I could see that could really offer enough demand to maintain an export-driven model. So, but because I think that could take longer, my view would be let's do what we can do quickly here in terms of moving the energy thing forward and let's develop this India demand base until it gets to a point where we feel confident that we can start leading with the export-driven model. Again, I think it's sort of not one or the other. It's a little bit of both. Front-end load with the energy side, back-end load with the India demand side. I think that's our best pathway forward. And I think the China situation doesn't mean we won't ever sell anything to them again. I think we'll sell stuff to them if it's in their best interest to buy from us. If we have the best price, we'll sell to them. But I don't think that they're going to be our go-to purchaser anymore like they've been. I think that game has long since sailed away.
Okay. All right. Last question for you. This is another one of those hypotheticals like I asked you right now. If you look at the dairy market right now, price of Class 3 milk is in that mid to high 15s right now, which is not profitable. And if you look at really the big thing that's propped up the dairy market right now is the beef-on-dairy programs that you see coming out that have really made a big impact right now just because of where the price of cattle's at. If you look at where the price of cattle is now, obviously it's still high and those kind of things, but we are expecting to see a correction sometime. You know, we've been talking about that for two years. So it's got to be a correction sometime. And that correction comes, it's going to be a big one. When you look at the dairy market where the price of milk is right now, you take away the beef-on-dairy approach to things because of the profitability that's there. How do you see the milk market kind of, you know, sustaining itself here over the next 18 to 24 months?
The problem with the dairy market is because of the avian flu last year that propped up prices higher than they should have been, not only here but elsewhere, the whole world produced more milk from it. Meaning the signal that we gave to the rest of the world, which was temporary, everyone's producing a lot more milk now than they did a year ago. Europe is producing a ton more milk. New Zealand is producing a ton more milk and so are we. And so we have too much milk and there's just no way that I can see that consumer demand where we are right now is going to be able to soak up that excess supply anytime soon. The only way that we would be able to do that is if we, you know, exported the heck out of it. But at the same time, we just talked about, you know, exporting things to others is becoming more challenging. And if everyone else is producing more milk, then buyers would need less of our milk because they could buy plenty of milk from others that are closer by and cost less to ship. So it's really a problem because the US dairy industry has not really felt a whole lot of pain yet because they're able to sell those animals for such high prices into the beef market that if you take the beef income, even with the low milk price, they're still coming up with a number that isn't horrible. So it's sort of creating this illusion of we're okay. But as you said, if you start taking the bank account away of the high cattle price and we've already seen the market correct here a little bit, but over time over the next couple of years as that price continues to fall and we eat into the bank account that the dairymen have been banking on to make the numbers work and it doesn't work anymore, you know, it sets up a nasty crisis in the dairy industry if we don't find a solution to soak up the excess supply in the meantime. And so we're not at a crisis point yet. Cattle prices are still good. They can still sell a lot of animals and still bring a lot of income in to offset unattractive milk prices. But, you know, we're starting to lose that bank account here a little bit. And I don't know if it's a food box program again to soak up the supply like we did a few years back that one could argue was very successful during COVID. I don't know, you know, if we just print enough money and hand enough money out to consumers like we just mentioned, maybe that could be enough to do it. But the dairy industry is in a very dangerous spot that it has to be very, very careful about how it handles this period of still okay economics because the punch bowl of high cattle prices isn't going to last forever. And I hope the industry finds a way to foresee that coming before it becomes an outright crisis and we need some type of a significant bailout again, which I'm sure the industry would like to avoid and I'm sure I think the administration would like to avoid as well, you know.
All right, Sean, good place to stop. If folks want to reach out to you and get more information about what you're doing over Hackett Financial, what's the best way to do that?
Our website is hackettadvisors.com. We have a Twitter page, ferdx11. We have a LinkedIn page. From time to time, we put some things on there about our outlook for weather, for prices in certain markets based on our statistics, cycles, and correlations that those that watch your great show might find of interest to them wherever they are in the chain of command. So.
I know. Well, Sean, I appreciate you being on the podcast. Really glad you're still part of this. You called me out of the blue in 2018 and it's been a fun ride since then. So I really appreciate you coming on the podcast and sharing what you have with the listeners here. So Merry Christmas, Happy New Year to you and your family and we look forward to talking to you in '26.
Same here. Thanks, Casey. Appreciate it. Thanks.
All right. Stay tuned for more Moving Iron podcast after these messages.
Well, there they are mocking you. See you next year.
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All right, welcome back to Moving Iron Podcast. I got Brad Graff from Valley Transportation on. Brad, how you doing today?
Good, Casey. How are you, man?
I'm doing good, man. Doing good. It's that time of the year where there's enough going on to keep you busy, but enough distraction that you want to go do something else, right? This time of the year, right?
That's right. Yeah. Which, you know, I like this time of the year especially right around here because you got, you know, you got Christmas parties and those kind of things coming up. But, you know, as you look around and start kind of thinking about what you're going to start doing for '26, it's funny that you don't really, I mean, obviously you go through some planning processes and those kind of things as to what, you know, budgets and those kind of things are going to look like. But it always takes me anyway this last two weeks of the year to kind of even start to get my mind around it's almost '26, we're going to make some changes or do whatever it is that you're going to do. And one of those things out there is I was always looking for a trucking company that I could, when I was in the equipment side of the business on at the dealership, what was a trucking company I wanted to try to find that could maybe make my life easier, you know, save me some money or something like that. And I always start thinking about those kind of things as people I talked to throughout the year. And obviously I loved working with you guys when we were there. We made it real easy. I didn't have to explain that the combine had the big wheels on the front when they called me on the phone asked me about if I had any freight anywhere. I thought I'd get you on here, Brad. We could talk a little bit about just as you're going through the concept of what do I need in a trucking company and how am I going to start deciding that trucking company. One thing I did a lot of when I was working at the dealership was, you know, I'd get a million phone calls from different truck companies. And it wasn't until I was, you know, three-quarters of the way down the rabbit hole when I started realizing like, I don't know if these guys actually have the trucks they're trying to quote to me or not. And what's that mean on the backside when I have an issue? Because the only thing I could ever relate that to was, you know, the Expedia thing, right? If I go book my hotel room through Expedia, then I show up to the Marriott and it's not right or the rate's wrong or there's an issue or something like that, and Marriott's quick to point you back to Expedia to go get that taken care of, which usually takes an act of Congress getting anything done once you get to that point. But when you are looking through there, so I guess, Brad, when you're looking at working with a full-line trucking company like you have, and you have a freight forwarding group inside of your business too. But if I'm going through the process of trying to figure out what trucking company I want to work with, what are the couple of things that you would point to and say, 'Hey, this is a company you should be working with.'
Yeah. You know, I look at it as, you know, if you're going out to a broker and you're getting the best possible price that you can get, we all know the market's pretty slow right now, you know, so that broker is able to find trucks right now, you know, he'll find some cheap guy to do it at a minimal expense. But the big thing that you got to worry about is does that guy got the insurance to take care of what he's hauling, you know, because that broker doesn't care because he doesn't really have any skin in the game. Once he brokers it off to that carrier, it's basically between you and that carrier when it comes to legality issues, you know. So that broker doesn't have any insurance to help cover you typically. And the other thing is once the market picks back up and the freight's out there, then those trucks aren't going to haul his cheap freight that he quoted you too low on, you know, so your stuff's not going to get moved. And, you know, if you don't have a carrier that you work with on a day-to-day basis, you're going to find that your stuff's going to be sitting and it's not going to get picked up the way you want it to. So I always, you know, I always tell everybody for sure work with somebody that's asset-based, you know, that owns their own trucks and can move your stuff because, you know, if we get busy too, you know, but if we can't get it moved, you know, one way or the other through our brokerage or through the asset side, we'll make sure that we find a truck and we put it on there and get it moving, you know. So that's the biggest thing as things start picking back up here and we're starting to see a little bit of that. I mean, everybody's, they've taken so much capacity out of this industry over the past six, eight months that the trucks aren't out there like they used to be, you know. So you're going to find that those guys working with those brokers aren't going to be there and be able to haul your equipment the way you want them to.
Yep. So one thing on the insurance side, I've never done this and I've never really thought about it because, I mean, I've never really had an issue yet. So knock on wood that I didn't have a failure and ask this question, but, you know, is it a fair question for me to ask, 'Hey, Brad, when can you guys send me a copy of what your insurance coverage looks like for your freight that you're pulling?' Is that a fair question to ask?
You should always have that on file. I mean, you should have that, that should be the first thing you do is make sure that you check a carrier's insurance and what he's got for coverage and, you know, work comp. And, you know, you got to remember that if that driver's out there loading and there's no work comp coverage or no coverage on that guy, if he gets hurt on your yard, it's going to be your responsibility, you know, if they got to fall back on you liability-wise. So yeah, you should always request insurance coverage from any carrier you're working with.
Yep. So talk me through a little bit on the insurance side of it right now. So if I'm, you know, like you talk, I'm sure there's minimum insurance levels that anybody can get. They're easy to get and doesn't take a whole lot of effort to get. But you start looking at like an A11, an AF X11 or an X9 combine or something like that where you're talking, you know, upwards of, you know, $800,000 to a million dollars depending on what it is. Talk a little bit about the process for a company like you to get a million dollars worth of insurance and what kind of hoops you have to jump through to make that happen.
Yeah, you know, it takes time, you know, over 40 years. You know, I didn't start out having a million dollars worth of coverage, you know, so over time, you know, we've just been building it up because of the amount of coverage we need just to take care of that, you know. So most carriers out there, you know, they'll run a $250,000 cargo insurance policy, you know. So if you're not paying attention to that and you put a $500,000, $600,000 tractor on there, the biggest issue with that is if they don't have enough coverage to cover what's on the trailer, it automatically, most policies resort back to zero. So if they don't have enough to cover what they damaged, they go back, they have zero coverage for that because...
Oh, really? So if I have a $250,000 example and it's $300,000 worth of damage, it's just the same as zero.
Then it's going to come back on your company's insurance in order to pay it, you know. So yeah, and most policies are written that way because they want to make sure that these carriers have the insurance they need for what they're hauling. So they write that in. We've seen that with some other carriers that have tipped some cranes over and stuff that we know of that they had like $250,000 worth of insurance and tipped over a million-dollar crane and it fell back on one of our customers. It wasn't us, thank God. But the reason they did it was because we couldn't get to it as quick as they wanted it. So they hired, the salesman went out and hired his own carrier. They rolled the crane about six miles from the factory. It was a bad day for them because the carrier didn't have any insurance.
That's bad. Wow. That makes all the difference in the world. Didn't understand why you have to make sure because I had never thought of that all these years that I was doing. I just, you know, I just assumed that everything would work out like I was supposed to, you know, and never once crossed my mind to make sure to say like, but we're also talking back in the day then, you know, when I was doing this, it was, you know, there was some expensive stuff obviously towards the tail end of my career, but, you know, when I first started doing it, you were selling $40,000 tractors and, you know, $100,000 combines, stuff like that, which I would assume most about anybody had that much insurance when they're doing it. But again, all about due diligence. And, you know, sales guys, they're really on the due diligence side of dotting i's and crossing t's when they come to looking at all the stuff that's out there.
Back in the day, we used to load 340, 430s on a load and never came close to what an 8410 is, you know.
I know. Yeah. Remember the first time a guy told me like, I can only load one tractor at a time now. I'm like, 'Since when?' You've been loading three.
You've been loading three the whole time.
But, you know, new model comes out, it's twice as much, you know, right? Doesn't take long for that to happen. So what are some of the things that you would ask question-wise if you're going through that process? You know, talked a little bit about earlier, but what are some of the questions you'd be asking a carrier to make sure, one, that they've got the insurance stuff they have, you know, getting those kind of things away, but just kind of feeling your way through that to make sure that you're talking to an asset-based company like Valley Transportation versus just a guy that's working out of his basement, you know, brokering freight.
Well, most often I think, you know, I think right away, you know, you start talking about the equipment and you can tell pretty fast what kind of knowledge they got on what they're moving, you know. So typically them brokers, they're not going to, if they don't know anything about what you're trying to move, I would shy away from them fairly fast because it's obvious that they don't move that kind of stuff very often, you know. So, you know, the questions to ask is the asset base and, you know, get a copy of their insurance, get a copy of their work comp because that tells you that they got employees and people on staff that they got coverage on them, you know. A lot of these brokerage houses, they won't have any work comp because they just don't have that in front of you or, you know, that type of coverage. And just, you know, find out, you know, how many trucks they got, how many trailers they got, how long they've been in business, you know, just basic questions to get a good feel for who you're working with.
Another question too, I guess I always thought about too, and I think this is more on, you know, the kind of the level of company you're working with, but is there like going around and asking questions like, could you send me a copy of your DOT record or something like that or your maintenance records or something like that on your machinery? Like, is there an easy way that you can get that kind of information to make sure you're dealing with someone that's got good quality equipment, not necessarily just some stuff they're trying to keep patched together?
I'm pretty sure you can go in and pull up their SAFER score so you know as a carrier how safe they are. So there's a score in there and I think you can, I would have to get with Carson to remember how to do it. I think you can just type in the carrier and pull them up and it should give you some of that information. So there's also a way that we can get that figured out that you can look up and see how many trucks they're showing on the DOT's website. So pretty quick you can find a lot of information out on a carrier, you know.
Yep. So last question I'd have for you on this, Brad, as you're looking at things kind of rolling their way through. One thing I always ask guys that I would just kind of feel around for a little bit, I'd ask them questions like, you know, when was the last time you hauled a combine and where'd it go to and those kind of things. And, you know, come to find out, a lot of those guys would be like, well, we're mostly a van company, but we've got, you know, a couple flatbeds or we've got some step decks or we got, you know, we just got a detach now. Not ready to go out and really be in the heavy haul side of the business. When you're walking through that, questioning folks, how would you start that question of like, you know, finding out what their primary focus in the trucking side of the business is?
Yeah, I guess, yeah, you just talk to them about how much equipment they do haul, you know, is that their primary source? What are you hauling, ag equipment? Are you hauling construction equipment? What type of thing are you hauling? You know, and then quiz them on, you know, what's a 7720 or 9500 or, you know, start quizzing them on some of that stuff and just ask, you know, well, you know, maybe you're hauling a piece of equipment.
And when they start asking you for the dimensions and what it looks like and how high it is, will that fit on a flatbed?
Yeah, you're going to know pretty quick what, you know, put on a flatbed, you can start, you know,
marking them off, you know.
