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.
Hey, welcome to the Moving Iron Podcast. Glen Gri here with Casey Seymour. Casey, another interesting week out there in farm country as we try to get this harvest in. Continue to just face rains after rains in a lot of places here.
Yeah, it's been a crazy amount of rain and it's the way they're getting rain, it's like they can't get it to stop and where they're not getting the rain is they need a little bit. So, but for the most part, you know, where it's good harvest conditions for about half of the corn belt and not so good for the other half of the corn belt, feels like.
Yeah, the latest USDA report puts corn harvest at roughly about 33% versus 39% on the 5-year average. So, we are running a little bit behind and we do have a bit of a ways to go. Meanwhile, like soybeans, they're about not quite the 50% mark. So, they're at 46%. Typically, we're about 50%. So, we're not way far behind. And as you and I both know, with the size of the equipment today and the amount of work we can get done in a week, we catch this thing up pretty fast. But, you know, it has been a little bit of a slow start and it's just something we're, I don't know, we're just watching to see what this means for markets and what this means for storage and shipping going forward.
Yeah. Yeah. It's going to be interesting to watch how it plays out. And typically years like this are whenever you see some very odd tire configurations and tracks start to show up on machines out there. So, a lot of 1200 LSWS and those kind of things rolling out there. Yeah, absolutely. Track machines and those kind of stuff. So, see some weird stuff popping up, but at the same time, you know, this is just one of those years where not everything's going smooth. Like we've kind of been spoiled, right? Last two or three seasons have been pretty easy harvest, you know what I mean? So, this was that one, I guess.
Yeah, that's right, Casey. I mean, I think as we try to, you know, get our arms around this thing, we're still going to be sorting it out and really trying to figure out, you know, how does this translate into the rest of this year and into planning for 2027. And I know that's something you've been focused on recently is, you know, really trying to dial in what the end of the year looks like and maybe making some moves for that. What's on your mind?
Yeah. So I mean, you know, we've talked about this the last three or four times and I, you know, don't want to beat that horse here, but I just think the importance of what we're looking at here. So if you look at where things are at right now, if you start really paying close attention to the amount of stuff that's out there. Yeah. You can still go by your John Deere dealership. Yeah. You're going to see some in your Case IH or whatever, you're going to see some full lots, but they're not nearly as full as they were, right? And what we're starting to see develop, there are holes in specific groups of machinery, right? So, for example, since the beginning of the year, what I call the high depreciation, high hour range machine. So, we're talking like an 8 to 12 year old machine that's got, you know, it seems like it's high hours, but for the machine it's not necessarily that high hours, but something between, you know, 5,000 to 8,000 hour tractors, for example. You're just watching, you know, some six and seven year old combines that are, you know, got 1,000 engine hours on them, 1,500 engine hours on them, 2,500 engine hours on them, and you watch those machines sell. And the pricing for those machines kept getting higher and higher and higher and higher to where, you know, I don't know, sometime in the September timeframe, Greg and I were talking about a 2,500 hour combine that sold for, I can't remember, something 200-something thousand bucks. It was just a big number and nothing special about it, and there wasn't like some crazy thing, but it had a ton of hours on it and it brought more money than we seemed to know. It was in good shape and it had a good story behind it. It had the, you know, the mechanical records and everything about it that you can go back and point to, but one of the things that stuck out to me when I said that was, well, all the cream has been taken off the top, right? And now you kind of have this next baseline layer of what quote unquote good is the new cream, right? And then when something gets back on top of that, it just brings that up. And what we're seeing is some of that value is starting to kind of bleed over into the newer machines that are ahead of that because now all that stuff's kind of being taken up and now you're starting to see that movement into other stuff. We've had a lot of conversations with guys about they want to come look at buying some one and two-year-old stuff after harvest is done and start looking at numbers on those kind of things where six months ago that wasn't even on the table. Like there was nobody even talking about that. So, it's showing me that my little thing that I follow here, like when you kind of get to that sixth month in a row of auction prices going up in price, then the retail market starts to kind of catch up with that. Well, we're five months away from that where the six-month period was in the auction price. So, now we're starting to see that movement and we're getting more people to come back in and talk about, you know, hey, let's dust off that quote we talked about a little bit ago and see if we can't, you know, make something work here. Or, hey, you know what? I'm at a point now with my combine that I don't want to spend another X number of dollars to get my combine ready to go for next season. Let's just take a look at that. Or hey, you know, I'm looking at some of this low interest rate stuff you have on these four-wheel drives over here, you know, like that kind of stuff. So, you're starting to hear those kind of conversations pop up, which tells me that when you're already at a place where there's not a lot of supply coming in, right? Because there's not been a lot of new stuff coming in. There's not that supply that's getting that stuff replenished, you're going to start seeing movement there. Now, by no means am I saying this is going to be COVID all over again. Oh my god, prices are going to go through the roof. That's not what I'm saying. What I'm telling you is if you're in the market, start really paying attention to what you're doing. Pricing will creep up, right? As things start to contract or start to expand, you know, we're seeing more movement into the marketplace. I think between now and the 27 planning cycle, you're going to see a lot of machinery find new homes and I think it's going to be interesting. Now, one thing I will say about this too, Glen, is I've been paying close attention to this and you're seeing more and more of those machines. I would call like 5 to 10 year old, maybe 12 year old stuff, you're seeing a lot of that stuff come up for sale, like on Facebook Marketplace, for example, right? And you're seeing more of that stuff out there. So, what I would say to somebody out there is if you're going down that path, nothing wrong with that. I think it's great. Go to your local bank and ask them to do a lien search on this machine. That way, because you don't want to have to pay for the machine twice, right? You know, the way those lien searches work, you know, I mean, that's a very important thing to pay attention to. If you're going to buy it from a private party, that's great. Awesome. Perform the lien search because who knows, they might not even know they have a lien on it. I mean, there could be just all kinds of stuff out there, but you buy that machine, you're going to have to now pay the bank again for the same machine you already paid the guy for. It's a whole thing. And as I've been through it a couple times on the dealership side where I've seen things like that happen. So, if I had any piece of advice for anybody as you're going through this next cycle and you're looking at doing some private sale stuff and those kind of things, call your banker, ask to do a lien search on this and just for your own safety and your own peace of mind.
Casey, I know that, you know, that private sale thing. I mean, that's part of any equipment. I mean, we've been doing this as farmers and ranchers a long time, you know, where we buy, sell, and trade our own stuff, but, you know, the whole Facebook Marketplace, I mean, I'm not saying don't do it because I know a lot of people that have bought equipment that way, but also I've heard stories recently of people getting taken for a ride and it does seem like one of those things where we need to make sure we exercise a little bit of caution here.
Yeah. I mean, I also go as far as like, you know, there's a lot of guys where, hell, I've done it with a car. You know, you buy a car. I lived in Nebraska. You buy a car in wherever, you know, two states away and you show up and look at it and you're like, "This is not what I thought it was" when you got there. Right. So, I mean, I don't think there's anything wrong with saying, "Hey, I'm very interested in your machine. I really want to get it. I want to do a search and I want to have a technician come out and take a look at it, walk around and tell me what you think," you know, like those kind of things I think will really, you know, because you're spending 100,000 bucks, $200,000, something like that, you know, 50 grand, whatever the number is, right? And that's a lot. I mean, it's a lot of money. So, I mean, you should take the time to understand what you're getting.
Yeah. And I think there's a little bit of, you know, if you're selling, obviously, you want to make sure that the people are serious. And so, you know, I've even heard some stories of folks saying, "Hey, I'm going to put some money to hold it" and that money disappears along with whoever was selling it and the machine doesn't exist. So, these are all things and lessons that we just have to, you know, be smart about, use common sense, try to make sure that, you know, what we're looking at online really exists because it is a little bit of an interesting place. Hey, I want to go back to a point that you made just a minute ago. You were talking about, you know, dusting off, you know, maybe some paperwork there, some previous offers or whatever. How long should those be good for? How often should you expect to, in the environment we're in, see those prices or whatever quotes you've gotten recalibrated?
Yeah. You know, six months ago I told you they'd be good for a year, right? Because it's just nothing's happened in the marketplace, right? Sure. So if you go back, you know, all through 25 into 26, you know, nothing really changed, right? I mean, the market really didn't go anywhere. It kind of stayed where it was at. So I mean, for the most part, it's good now. I mean, today, I mean, the market we're in today, it's pretty, it's an ever evolving marketplace. So, you know, what we did have may not be available or we had five, now we got two, like, you know, those kind of things are coming into play. I would say that those quotes are typically good for 30 days, you know, and I would have that idea that's there. Now, if it's still sitting there 30 days later, I'm still going to sell it to you for the same price, but for the most part, unless something changes, because what really changes in those 30-day periods are programming that come along with that, right? Always rolling out new programs. Interest rates have moved, like, you know, we talked about two podcasts ago, had an interest rate hike, so that changed the interest rate, you know, from what was available out there. So those kind of things are really what drive those quotes into being if they're good or not still. That's something to pay close attention to. But for the most part, I would say this as you're looking through where things are moving to and towards, it's worth revisiting those things again one more time just to make sure because we've, you know, I've seen a lot of dealerships rolling out 1.9 and zero for 24 and that kind of, you know, a lot of these lower interest rates start to pop up because now there's a little bit of movement in the marketplace. It's not on fire by any means. So, don't read into that that I'm saying that, but you are seeing some movement in and to keep that momentum going. You're seeing some programming stuff come out, interest rates and those kind of things that drive it.
Yeah. No, absolutely. Well, we did get word about some payment rates for ARC and PLC payments. And so, there does look to be a little bit of an infusion of capital maybe along with harvest and along with, you know, what we saw a little bit of a bump up in prices over a month ago. So yeah, even though we're down just, you know, 20, 30 cents here off the highs, that doesn't mean that there's not some capital moving, you know, through the industry here. And it's been a while as you've been talking about, Casey. It's been a while since we've refreshed a lot of these fleets. And maybe that's some interest there between now and the end of the year. What else? Any other takeaways this week as we get people ready to turn the page into November and start thinking about the end of the year?
Yeah. I think another thing too is after you've kind of gone through these last couple years, I'd take a hard look at where you're at as far as technology is on your farm and start looking at what 27 looks like for you. And I'm a big proponent of upgrade kits. You know, some guys I work with think I'm crazy when I want to talk about this, but you know, as I'm looking at upgrade kits, to me, it's a great way to really ease your way into what technology you need on your farm, you know, and, you know, I think I'll use a sprayer, for example, and there's all kinds of upgrade kits for sprayers, right? All kinds of things you can do for them. And you could over a three to five year period, you can take your sprayer from, you know, not quote unquote very smart to as good as what's coming off the factory line, and you can stair step that into your operation as you see fit for the technology that you're really looking for. When I first, you know, 10, 15 years ago, when you started going down this path, if you wanted new technology, you had to buy whatever it was, the one year old or two or three year old piece of equipment that you could now afford, you know, gen two or three or four generation technology. And I look at this now as just a great way to say, hey, I want whatever for my sprayer. I want See & Spray or whatever it is, right? All right, I'm going to go get See & Spray. Hey, I want to put, you know, ExactApply, whatever those kind of things are on my machine. Instead of me having to go spend six or 700,000 bucks or four or $500,000 on a used sprayer, I can now spend $50,000 here or $10,000 here or $14,000 over there. And I can ease my way into that. And that plan will give you all the latitude and runway you need to be efficient and successful on your farm without having to spend a tremendous amount of money. So, I would highly recommend anyone that's looking at, hey, I'm going to upgrade something. You might take a hard look at what you already have and does it make sense to upgrade what you have or does it make sense to still get a new one and work your way through a new one. I would highly recommend that.
Well, this, you know, aftermarket, like the retrofit and upgrade stuff. I mean, those kits continue to get better and it does seem like there's a pretty good interest there and, you know, whenever you're able to do that, you know, that ROI is obviously technology is great but you have to make sure that it'll pay you back in a certain amount of time and because not everybody can afford to do it, but maybe this is a way to stair step your way in there and start to get the benefits of, you know, things like See & Spray or ExactApply and start to, you know, see that return on investment without having to go out there and buy a full brand new piece of equipment, you know, and that, like you said, hasn't always been the case, Casey. Like, I mean, this is kind of a new opportunity in many ways.
Yeah. I think too, I think the idea behind that would be one of the conversation points I hear when I talk to guys and my friends that are in the business too told me about the same thing. I've got so much technology now, I don't know how to use half the stuff I already have. Right? And this gives you an opportunity to do it this way where you can say, "Hey, I'm going to really learn this and maximize this into my operation." And then next piece, I'm going to really learn that and maximize these two things in my op, you know, so on and so forth as you go down the line. And you can start drawing back ROI directly to those things you're using. And you know, one of the things you hear a lot of guys say is like, you know, my account can do all kinds of stuff, but there's just, I don't, sometimes I get lost in what's all there. And there's so much. I mean, it's just so much technology. If you can streamline it all and make it all work for you, there's some huge savings there as far as efficiencies go and redundancies and those kind of things that come into play. But this information that's out there now and the data that you can collect and how that starts shaping the next step to different things. Some of this technology on these machines, you start looking at these upgrade kits really start positioning you into what autonomy looks like and how you're going to put that onto your farm. And that's another big thing to start thinking about too because that's not, I mean, it's out there three to five years away from it being a mainstream thing.
Well, and it, yeah, it's gone from science fiction to attainable in pretty fast order. And it, you know, we've seen that in so many different areas of technology where, you know, it's really bleeding edge when it comes out. And, you know, sometimes it takes 10 years, but sometimes it only takes two to really get adopted. And yeah, you're right. The autonomy story seems like something that, okay, we've talked about it for a long time. Now it's getting to the point where yeah, there might be something actually worth looking at.
