Welcome to Moving Iron with Casey Seymour and Greg Peterson, the podcast for anyone and everyone involved and interested in the business of ag 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 the 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 are you doing today?
I'm doing well, Casey. How are you doing?
Doing good, man. Doing real good. It's August already and we're on the cusp of what, you know, we've talked about this all the time, but this is when auction season starts. September through the end of the year. So what are you seeing out there right now?
Well, continuation going back to the middle of June, Casey. Good condition equipment, regardless of age. It can be two years old. It can be obviously pre-DEF stuff. But it's trending up. I mean, it just is. I know a couple of examples. I know just Saturday, so two days ago, a nice farm estate auction in Iowa, Portsmouth, Iowa, which I believe is western, but I'm not positive. Somewhere in Iowa. But it was a farm estate sale, Scott Gao, sold by Osborne Auction. And you know, just up and down the line, very strong. So, loader tractors, interestingly, obviously some news there last week on the livestock side was creating a lot of ripples, but nevertheless, you know, good condition loader tractors still doing well. It sold a 2013 Kubota M135GX, very, very low hours. So, we knew it was going to sell high, 388 hours, but 81,000. I mean, that's the highest auction price ever on an M135GX. And I think we just talked about the Kubota last week when you and I talked at a sale in Ohio a week ago Saturday. Kiko Auctioneers sold that one. That was 82,000 for an M6141. That one did not have a loader. 96 hours, one owner, brought 82K, highest ever without a loader. But back to the Iowa sale Saturday. Things like an '09 John Deere 7930. It's obviously pretty DEF, but 2,362 hours, 148. No loader. You know, that is the third highest ever auction price on a 7930 without a loader in 2,000 plus hours. So sales like that, and there were some late model sales, consignment sales last week. Our friends at Mowy Auction Company in Milford, Illinois had a very, very large sale and I thought some strong numbers there. They had a '24 model S780. 315 engine hours went for 420. They had a '22 model Case IH 9250. Almost a thousand engine hours went for 3225. That's the highest auction price this year on a '22 model 9250 with over 900 engine hours. So again, good condition stuff selling well. Mowy did also have a pair of '77 model 6030 John Deere's. There was a lot of speculation on what they'd bring and I think they both came in at 80,000. Which I think is tied for third highest ever on a 6030. So yeah, again, numbers very solid last week.
Yeah, that's 80,000 for the pair or for each?
Each. They were from a well-known, I think the last name was Little. I think he's a well-known tractor puller at a high level and also a tractor collector. And I know one of them came out of Michigan, had like 3,300 and some actual hours. One was open station, one had a cab, but 80K each. It was really fun. We went and did an auction preview video with John Mowy and actually John's daughter, Hunter, helping out in the business. John and his brother Jim there with Mowy do a great job and tend to have the type of equipment that, you know, they're pretty plugged into used buyers. And so had a couple local estates on that auction. I think a pair of Magnum 340s, '24 models. One had 378 hours for 290. I think one was like double the hours for 280. So, yeah, about interesting numbers rolling in from all over the place here.
Well, speaking of interesting numbers, we had the Pro Farmer. And I mean, there's a ton of these things that come out. Obviously, Pro Farmer's part of the Farm Journal Network. So, you know, I pay attention to it a little bit more, but just because of where it's at. But they had an interesting thing where they were talking like, 'Hey, they think there's going to be 10 bushels an acre off trend line.' Which, you know, looked up a trend line, they're looking at somewhere around 184 bushels an acre. So, that means that'd put it around 174, 175, 173, something like that. That's kind of what they're throwing out there. If that's the case, that'd be a significant mover in the market, right, if that happens. Sean Hackett, that's on there a lot of time, sent out his newsletter. I followed back up with that. And in that newsletter, he mentioned all the reasons why something like that would happen. And none of those have happened yet, right? You know, talking like too hot at night, too hot during the day, not enough water, you know, a lot of different stuff that comes into play. But none of those things have happened to cause that much of a significant downfall. So, he pointed back towards, you know, lack of fertilizer being applied compared to years before. Which makes sense, you know, you talk about guys looking at how they're going to keep things rolling and where can they cut, what can they cut? Cutting back on fertilizer a little bit may be what's causing some of that we see right now.
Yeah, that makes perfect sense. That's what I was hearing when I was on the road this spring. So, that I would connect, right?
Yeah, and I heard plenty of people talk about, you know, we're going to have to take a hard look at inputs and what we do with them, you know. Whether that was the kind of seed they bought or fertilizer they put down or those kind of things. Like all the different stuff that come into play. So, let's go back and look at the biggest extreme that we saw in corn yields was back in 2012 when that big drought. Now, I'm going off memory here, but I want to say it was like 120 or 125 bushels an acre was the average. If I remember right, all right? So, that means there's roughly 60-ish odd bushels between trend line and what happened in 2012. By no means am I comparing what's coming here to what happened in 2012, but what I am saying is that if it is off 10 bushels an acre like they think, it's not $8 corn, but it's $5.50 corn. It's $5 corn. It's, you know, for maybe $5.75 corn, something like that. But all those things come into play and as you start to roll your way through that, you start seeing some things pop up where there could be some actual money that comes through. And that's why, you know, we've talked about we think the end of the year is going to be strong in the auction space because of what happens coming out of May into June, whatever happens in that time frame. If it's going down, it stays down. If it's going up, it stays up. We saw that dip in May and it came back up in June and, you know, it's been that same way since. I would push away through that. If this does happen, Greg, and we start seeing some yield reports start coming out, because we're moving up on some high horsepower tractor corn time frames here pretty soon. About three days out from that. So, as you start working your way through that, and you can start seeing some yield lines start to develop and some yield trend lines start to develop, and that could have a dramatic effect on what we see happening in the marketplace right now, especially as you look at that hole in the marketplace between that late model low hour stuff on the two-year-old stuff and some of that really, really older stuff. That stuff in the middle, of that 1,500 hour to 3,500 hour tractor, that 750 to 1,000 hour combine, like those kind of machines are getting fewer and far between to find that are in good shape, right? And as that continues to erode, it's going to continue to lift up the market. And unlike in other time frames, what's going to lift the market up places is going to start kind of pushing some of that demand over to that one to three-year-old stuff. Four-year-old stuff, maybe. And some of the other things that you're going to start seeing some of that demand go to, and that's typically what happens when you watch these kind of things happen. And so, I've got my eyes glued to what happens over the next 30 to 60 days and how that's going to draw into drop the marketplace as far as values go and as far as what happens then as you get into 2027. If we continue in the same pattern that we're headed into '27, I'm looking at '27 as being a stronger year than '26. Not, my god, we're going to go out and buy yachts this year. Awesome. But it's going to be more secure and a lot better than I think we saw in 2025 and '26.
Well, yeah. I couldn't agree more, Casey. You brought up 2012. So, that means that's pretty interesting. You've been tracking things a long time. I've been tracking for, you know, it'll be 37 years in November. I've been tracking these auction prices. And if you ask me what are, you know, the most memorable peaks of used equipment values and auction pricing, you know, there was late '07, early '08, the ethanol push. That was instantaneous on the auction market. Prices went vertical. Then late '12, early '13, what you just pointed out, you know, drought-related and price of commodities, you know, went up and it just auction pricing, you know, did what it did. And then the other period would be like late '21 through late '22 and that was kind of COVID related supply chain mess and stuff. But I mean when that crop tour report came out, I really don't like, you know, I'm just trying to report to the audience whether it's dealers, auctioneers, lenders, farmers about what I'm seeing on the numbers. And based on this noticeable jump up on auction pricing on good condition used equipment since June. And that was before any spark, you know, corn and beans really didn't do anything. So who knows what'll happen, but if these dots start to connect, boy, you're looking at that spark in the dynamite shed that I've been talking about since the early of '25 and kind of advising farmers to be aware of because if you wait, what people can't see behind the scenes is how tight the used supply has got. In fact, we just had on the radio with Chip Flory, we just had Kirby Fact with Wheeler Auctions and Real Estate talking about their big sale in Carthage, Illinois this week with a number of dealers participating. Lot of beautiful late model equipment. And Kirby was mentioning, 'Hey Greg, you remember when you came down to our auction in kind of this time of year in '24?' And I said, 'I do remember it very well, Kirby.' And that was a different scenario. That was the front end of dealers getting really aggressive pushing the excess out and so auction pricing not surprisingly was falling like a rock. That ain't now. Now we're going up. And we were going up before corn went up. So farmers are entrenched in this mindset of we're going used. You know, they're entrenched and used is tightening the supply of. And then like you said, if we're sitting here talking, it's late August. In the last 25 years, auction pricing has basically shot up from late October through December because of Section 179 year-end buying. So, if you need equipment for your operation, whatever it is, my suggestion would be to be as proactive as I'd get on the stick. Because I'm not trying to be alarmist, maybe price of corn will, you know, but that data that came out last week. And it does connect. I mean, everywhere I went in the spring, whether farm show or auctions or farm events, everyone was talking about saving money. I mean, farmers had to. So, applying less fertilizer, I mean, here we are. And again, good condition used equipment is at a premium, and it's going to be, I'm afraid, more of a premium coming up.
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Yep. Yeah, and I, you know, the one thing about the price of equipment, too, is that like we said here a few times, if you look at where those things apply, once you take off that top level of super nice stuff, that next level down that comes in just replaces that pricing. That's really all that is. And then the super premium stuff gets even higher, right? It's now a one-off thing. So, from a condition standpoint, at some point you will start seeing the condition of equipment available start to slide, but the price basically stays the same. So, long story short is if you're in the marketplace right now and you're thinking about buying something and you got your eye on something that's a good quality piece of equipment and you can swing it right now, this is the best time to buy.
If you can, and I really don't say this lightly. In fact, I've only done it, you know, this might be the third time in 37 years because I'm uncomfortable telling farmers to buy equipment. But when the data starts screaming at me, then I'll say, 'Well, here's what I'm seeing.' And that's just the reality right now. Again, and a big part of it is because that mindset was about controlling our input costs this spring because farmers are getting smashed from every angle on the rising costs. So, okay, we'll put on less fertilizer. That same mindset is, 'Okay, we'll ride with our line of used equipment a little longer.' Or if I got to do something, I'll just buy a used sprayer or a used planter. Okay, that's, we all understand that, but understand that everyone else is thinking the same way.
And also understand that the supply of used equipment on the market, again, even if you drive, you know, some dealers have excess. I'm not saying every dealer is out. That's totally not the case. But when you look at the aggregate, which is what you've been studying for years and I watch in addition to our auction pricing, that funnel has been tightening for like a solid 18 months now. And bottom line is auction pricing, not just on the pre-DEF stuff, but the one, two, three-year-old, five-year-old stuff, even like you said that next level, okay, a six-year-old item with a little bit higher hours, if it's good condition, that price is bumped up. And that was before corn and beans went up. Now if they go up and stay up, then ask me what I've seen every time that's happened for 37 years and everyone knows the answer. It's instantaneous on the auction market. And we've seen a jump since June without that. So if you sprinkle higher corn in and it sticks and farmers start to go, okay, well, let's get... That's why I say if you're going to buy some, I'd be proactive right now.
Yep. And the thing about it too is like the backside of used equipment is always what the new equipment that gets sold and the amount of new equipment that gets sold right now, it's not high. It's just not high, right? It doesn't matter what it is. It doesn't matter the platform, right? So there's not that demand from the factories to go out and produce a lot of stuff which doesn't... since '23, something I want to say is like 70% fall off or something in production since then, right?
So it's a big number, right? So and every year it's just gotten smaller but this year's going to be smaller than it was the year before so there's going to be less equipment which in my opinion is not a bad thing, right?
So we're equalizing the marketplace out to where we're going to have the right sizing to buying population and I think that makes a lot of sense when you look at where we're at because in the past years that hasn't always been the case and equipment values, equipment population stayed high on the used equipment space and now it's, I just, you know...
You're right. It's a more equilibrium and which is what manufacturers wanted because we would get these humongous swings of inventory, used inventory. And like I say, my analogy in the space has always been a merry-go-round and it's like sometimes a merry-go-round gets warped Mach 5, your hair's on fire, you're holding onto that pole for your dear life. Other times it's calm water. Nothing's moving. And it's just up and down and sideways, but I don't know if this might interest people, but when I talk to the Wall Street crowd, who tend to be, you know, hedge funds and stuff like that, we're very forward-looking. They're looking out over the edge of the rainbow trying to figure out whether it's Deere, Case, AGCO, whoever, conditions for new sales coming up. And the question they've been asking, right, for a year and a half now, they ask me, they ask farmers, they ask dealers, 'When are sales of new going to pick up?' And we've been dealing with what we've been dealing with here and, you know, one thing I tell them, despite the fact that those sales of new, just like you said, have gone like this for like three years now, conditions for new sales holistically have improved dramatically because you don't have this overhang of the one, two, three-year-old stuff now. And so, what's been missing is farmers having some money and, you know, hopefully that'll change here. And then to me, the last barrier, I mean, if corn and beans do move higher and they are a bit higher, and it takes a while for farmers to absorb that truth and start to feel comfortable with it, then we got to break through the wall of this three-year mindset of like, you know, what, I'm just cool with rolling with used. Because now you're getting into that new normal and you've talked about it a lot where those roll programs, those, and everyone knows it, that semi-ocean of good one, two, three-year-old stuff. Wherever you slide, if you were the second buyer, the third buyer, that's all changed. And you got to find your spot in this new normal. And if you don't, you're just going to wind up paying more money than you thought you were going to have to.
That is for sure. Greg, yeah, you're exactly right when you're trying to figure out where you fit into that because it's... I have said this before, but it just, you know, I started doing this and everybody was all over the board. Like nobody had a consistent...
Some might know a little bit of this and that and you have a used thing here and there or whatever, but now it's, I mean, there's boxes that are way more defined. Let's say there's still a lot of people that are buying, you know, one-off new equipment without any kind of, you know, they just buy a new piece every five years type of thing or whatever it is.
That still exists, but it's not nearly as prevalent as it was when I was, you know, 25 years ago. It's just not that way.
