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 Moving Iron Podcast is brought to you by John Deere. Got Greg 'Machinery Pete' Peterson. Let's talk what's happening in the world of auctions and all around the equipment space. Greg, how you doing today?
Well, I'm doing pretty well, Casey. Fighting the flu a little bit, so I hope I don't cough my head off on the segment here today, but other than that, hey, I feel good.
That's why we're doing it remote, Greg. I didn't want to get the flu. So, exactly.
Right on, man. Well, we had some stuff pop up today. You talked about it. Last week we were kind of working through what we're going to talk about, and then today we talked about it too. You had a high-level auction take place with some pretty good equipment on it.
Yeah, this past Tuesday, April 7th. Our friends at Steffes Group, very nice sale out in Tracy, Minnesota, which if you're not familiar, it's in the southwest part of Minnesota. Great farm ground out there. My wife's parents and grandparents both from Tracy, great community. And this was a sale for Mike and Joe Edwards' retirement sale. And it's one of those deals, Casey, where the premium used equipment really showing through. So, yeah, some examples on the sale. They had a 2022 model 8370 John Deere, 540 hours on it, that sold for 343,000 bucks. They had a planter I thought did pretty well. A 2023 model John Deere DB60, 2430 in 7,263 acres, that did 327. And then the combine, 2019 model S780, 1,435 engine hours, came in at 262. And when I thought that seemed a little high for a seven-year-old, so I actually went into our machinerypete.com and I was filtering on S780s, 1,400 plus engine hours. That's actually the highest hard-cash auction price, 1,400-plus-hour S780 in 32 months. You got to go back to August of '23. Actually, it was another Steffes sale, I think a dealer sale out in Williston, North Dakota. But yeah, Mike and Joe Edwards there, they obviously took great care of their equipment. Beautiful line.
Yep. Makes all the difference in the world, right? And we talked about that before we started recording, but right now you talked about how those machines were falling into the average and what that looked like. And right now, we talked about this earlier, that when you started seeing the really good stuff start to really show up in short supply, which I think we're seeing that right now, you'd start seeing some deviation in the overall averages. And the stuff that does pop up now that is quote-unquote good shape, good quality stuff, looks good, feels good, you know, been well taken care of, well maintained, and you've got the documentation to show all that, it's bringing a premium that's even above what we talked about earlier in the year. So you're starting to see that take place a little bit.
Yeah. A little premium plus, right? Yeah. It's on a sale just like this. And folks been following along our social media breadcrumb trail of auction reporting. I mean, like that 8120, 2004 model we saw for 158 about 10 days ago set a record by 20K, or about 10K. But yeah, if you got the stuff, high-quality stuff again, that seems like farmers' mindset is squarely in the used market and it's thinned out a little bit, particularly the tractor market. I think it was interesting, Casey, on that 8R 370. Again, I mentioned about 343 on Tuesday, 540 hours. Actually, the average auction price so far this year on an 8R 370 has jumped kind of a massive amount. Average we've got running just over 360, whereas last year it was about 309.5. And you'd say, why the heck is that happening? But I think it's like we've talked about, a little bit of that thinning at the top end. So when these nice units show up at auction, it's just very solid money. Yeah, I know. That same sale Tuesday had a seed tender, three-year-old J&M LC390 for 415. Thought that was pretty good. Grain trailer, six-year-old Wilson 41-footer for 42K. But in both those cases, again, if you're looking at those, it's like, well, if you want to buy a new one, a new Wilson 41-footer or an LC390 seed tender, you know, those numbers have got so big that it can make these premium-plus used prices still a relative bargain.
Yeah. Well, you talked about that planter earlier, that DB90 that you're talking, or DB60, right? DB60 that you talked about, that came in at 327. 327, yep. 7,263 acres. That's, I mean, now you go look at a new one, it's going to be, you know, almost 800,000 bucks, 700,000 bucks, something like that. So someone's looking at that going like, oh my god, this is a big dip. But of course we don't know how this was set up and how you would set yours up and all those kind of things. But to me, like you're coming in there at that 50% mark, and for an auction piece with the acres and stuff associated with that, I would be happy with that if that went through and I sold it at auction. I think to me, I'd be happy with it.
There they are mocking you. See you next year.
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Yeah, I think, you know, hard cash, write me a check today, planters. Yeah, again, you're moving a fair amount north of 300K there, and everyone has to have their spec just like they want it, which is great. So, again, and then, you know, the thing's three years old, so it's, yeah, I thought that was a real strong price. While we're talking here, I'll see if I can just quickly reference the highest auction price I've ever seen on a planter, just for reference. Well, I might not be able to do this on my phone, but anyway, like you say, the price of new is crazy high, and people can see, you're right, they see that 327 and say, oh, that got slaughtered. And it's like, no, no, no, what you need to do is you work, we're talking hard cash, write me a check today. And that's where if you go into machinerypete.com, click on planters, you know, and just filter by the highest, you're going to see where that stacks up for a three-year-old unit, and that's strong money.
Yeah, it is. And it's going to, it sounds like it's getting hammered, but it's not. I mean, all things considered, it's not. I mean, trust me, a guy that's taking a million things to auction, right? This is one of those things where there's differences between the two, right? And I would be happy with that if I saw that sell through there.
Yeah. And I think, you know, 262 on that seven-year-old S780, 1,435 engine hours. Again, I mean, you're pushing past a quarter million. And yeah, new ones cost whatever, but this is seven years old. So, and it's not 500 engine hours, it's 1,400 engine hours. So, again, 262. Now that was interesting. Right before we hopped on, Casey, I did a, I saw that and I was like, wow, that's pretty strong. So I looked, and so far this year, the average auction price on a Deere S780 is tumbling pretty good. I mean, it's down to 220, just under 221. It's down 16.3%. So generally speaking, I think combines and planters are not as across the board as solid as the used tractor market has been with auction pricing. You know, this combine sold really well, and this was the, you know, the Mike and Joe Edwards, you know, premium plus. They took great care of it. And of course, Steffes Group does an awesome job marketing all their sales. No doubt that helps. But yeah, it's just a really interesting market to try and throw your hands around right now. And I know now we're interjecting a whole new wrinkle with, you know, the EPA stuff here.
Yeah. I know you've, you're... Yeah.
So I had a couple conversations with guys, some guys that I, you know, I used to know from my days in the dealer world, but I was kind of waiting for this to happen in a way where I was thinking about it from the perspective of the number of machines that I know that have been through the process of being deleted when it was, you know, everyone was flying under the radar doing those things. And then the number of people that I thought would come to the table and do that. So a lot of conversations I've had have been revolving around the amount of machines that are coming back in for trade-in, right? And what does that look like? And those brought up a topic that I think you and I have talked about here. Like you look at, you got two machines sitting next to each other exactly the same. Everything about them is alike. They're both, you know, 2021, you know, 837s, whatever you pick the model, and they're both sitting next to each other, specs the same, the same. This one's been deleted. This one hasn't been deleted. Which one's going to sell first? Well, I got to believe this one that's been deleted, that's going to sell first, right? And well, yeah, if you, on what buyers want. Yeah. So when you start looking at that marketplace, what's that mean for used equipment, right? And how does that transition roll? I think the conversations that I've been having not only with customers but with dealers, friends of mine, is we're a midterm away from having this completely switch back the other direction, right? We start looking at that. So there's some of that that's going on in people's minds too. So this topic has got a lot more, you know, a lot more entrenched stuff that is kind of like, as you peel back the layers of the onion, you start seeing more and more stuff. And the broadness and the generalness of how the law is written, you know, hey, if I have a DEF problem, I can fix, I can delete the DEF, right? Well, that could be as simple as I'm not a DEF, right? Because that doesn't outline what the breakdown has to be, right? All it has to do is it says, I'm paraphrasing here, but basically it has to inherently impair the machine, right? So whatever that means, right? That's pretty broad. So yeah, that covers a lot of bases, you know what I mean? So when you start looking your way through that, as these machines start rolling back in and those machines start coming in and out of the place, you're creating two classifications of machines. Absolutely. And that's going to have a really dynamic effect on the marketplace.
Is your network, are you picking up vibes? I mean, it's obviously really early in this, but has there been any uptick in traded-in units that have been deleted?
Not really. I mean, they're looking at some stuff. The guys I've talked to, they say there's some stuff out there they've looked at. Enough to kind of perk up their antenna a little bit and kind of start paying attention to what was going on, but I don't see a whole lot of people like yet, right? So, we're just time to shake up.
I mean, it's only been what, 30 days that they really finalized this, you know? So, well, not even that. It's not even been 30 days, but...
I'll be really interested on the auction market because what I've noticed the last year, year and a half, Casey, is that even before the EPA thing, just a little bit more of a comfortability with saying that I deleted this thing in terms of saying it on the sale bill. It used to be like I would get a report and they'd go, 'Whoa, that tractor sold really high.' And then maybe someone on the ground would drop me a note or someone from the host company or whatever and say, 'Wow, Pete, you know, that thing was deleted.' It's like, 'Okay, thanks for telling me, that's important to know.'
And now, at least in the short term, you know, has the door been opened to being very upfront with, you know, marketing the fact that I am selling a deleted, you know, whatever Magnum 290 or whatever.
And so that'll be really... If I was selling something at auction, that would be the biggest lettered thing inside my description. Deleted. I mean, it would be there'd be like maybe a... it would have... it'd be bigger than the picture, right? It would just be this massive like deleted because I mean, that's exactly what someone's going to be looking for, right? I mean, you and I have talked about on here for almost two years now, a year and a half now anyway, about how pre-DEF machines are bringing premiums and what that looks like, are right or wrong. You know, a lot of people, you know, like that 8120 for 158k 10 days ago, whatever. Doesn't matter if 40% of the people think that's insane. That doesn't matter. The only thing that matters is it sold for 158K.
Right now, it's been interesting. Uh, you know, and I share a lot of those across our social media and then people will say, 'Oh, well, I actually have one with less hours. What's mine worth?' And usually what I do, I'll just respond in the comments with dollar sign, dollar sign, dollar sign because I mean you have what everybody wants: a super condition, low hour, pre-DEF combine, sprayer, tractor, skid steer. Um, farmers, I mean, farmers know, we're not... it's not a secret. And so now it's just this really unusual situation where we're in right now when it's like, whoa, who would have ever thought this could... whether it's a long term or short term, you roll back and then strategically. Yeah. What a... see what...
Okay. If you're a farmer and you're 80 years old and you've got, you know, a lot of farmers bought a lot of new equipment going back in '21, '22 and '23 and you're thinking of having a sale or just trading it in or selling it outright. Do you delete it? What's that A and B you're talking about? Deleted versus non-deleted and then what's the cost to deleting that whole thing?
