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In this episode hosts Casey Seymour and Aaron Fintel of Moving Iron LLC discuss how price increases are impacting used equipment values.  

In addition to looking at how tractor prices are increasing and changing used equipment values, they also discuss how the rising cost of used sprayers may have some customers questioning whether it would be more cost effective to contract out their spraying vs. replacing their sprayer. 

Full Transcript 

Kim Schmidt:

I'm Kim Schmidt, executive editor of Farm Equipment. Welcome to Farm Equipment's Used Equipment Remarketing Roadmaps podcast. In this episode, hosts Casey Seymour and Aaron Fintel of Moving Iron, LLC, discuss how price increases affect the used equipment market. If this is your first time listening, you can subscribe to the podcast on any of your favorite podcast platforms. Okay. Let's jump in. Here's Casey and Aaron talking about what's happening with pricing and used equipment values.

Casey Seymour:

What we did on 255 last time is we talked about pricing increases, right? I mean, that's the one thing that we've never really discussed here much on the Moving Iron podcast as to what that looks like and the myth out there is that if you raise prices by a certain percentage, all the used equipment comes right along with it. And that's true in this particular environment we're in right now. Whatever you raise the price increase, the used equipment falls right along with it.

Aaron Fintel:

To a point.

Casey Seymour:

To a point. Right. It's not like a one for one deal, but a one and one deal-

Aaron Fintel:

And it depends on what segment.

Casey Seymour:

...sure does. Absolutely. Each segment's going to be more. Right now, if you're talking tractors, especially high horsepower row crop tractors, it's a one to one ratio.

Aaron Fintel:

Right. [crosstalk 00:01:10] If anything, the used is ahead.

Casey Seymour:

Sure. Oh yeah.

Aaron Fintel:

And there's been a lot of increases.

Casey Seymour:

Yep. And that's one thing there. So if you're talking... So we'll just start there with tractors. Right? So tractors have a one to one ratio right now. And I would agree. I mean, I'd argue that with anybody that if you start looking at the 300-plus horsepower row crop tractor, even some of the smaller 225 to 275, 280, in that range, you're still seeing the same similar deal that [inaudible 00:01:46] there. Oddly enough, the one deal where I would say that... And it's been the calmest market probably in this whole thing and I think that a lot of it has to do with the fact that the used marketplace is a little bit more available than others, is some of these loader tractor ranges, right?

Aaron Fintel:

Yeah.

Casey Seymour:

To some extent. I mean, anymore right now, everything's kind of bare, but up until probably, I would say, two months ago, a loader tractor was relatively available.

Aaron Fintel:

Yeah. And it's funny to see, because so much of the... What we call a loader tractor, to us, so everybody knows, is typically 130 to 160 PTO horse size tractor.

Casey Seymour:

Right.

Aaron Fintel:

So 7800s, 4440s.

Casey Seymour:

Right.

Aaron Fintel:

On up to 61, 75Rs. So many of those are state mowers.

Casey Seymour:

Right.

Aaron Fintel:

So it's funny. The marketplace will be like, "Wow, there's like three out there. What are we going to do?"

Casey Seymour:

Right.

Aaron Fintel:

We've already had our two waves. And then, oh, three other dealers had their wave and now there's tons of them out there. So it's really cyclical because of that. And then the other thing, as far as readily available being like you said, the under a hundred, yeah, there's available. You can get something bought. That kind of thing. But in that, say, 140-plus engine horsepower, 140 to 200, that is really hard.

Casey Seymour:

Yep. It's definitely gotten to be a point where there's significantly less amount of those than there were and it kind of goes back to the state tractors come off.

Aaron Fintel:

Right.

Casey Seymour:

They sat on a lot for a little bit. Guys kind of walked their way through what was out there and kind of checked down to what they needed next. And here, of late, the cattle buyer, they've come to the table and bought a lot of those up. I mean, they've upgraded from the aught series to an R series in a lot of cases. But a lot of those have 10,000, 12,000, 15,000 hours on them and they've got-

Aaron Fintel:

And the one that just left the dealership will have that many before it comes back through.

Casey Seymour:

...exactly right. Yeah. Yeah. So that's the thing there. But I would say overall, when you're looking at tractors, for the most part, it's a one to one ratio.

Aaron Fintel:

Yeah.

Casey Seymour:

Now, in normal times, when you go back to a normal used equipment period, and I would say... I'm going to preface this, when I'm talking normal used equipment periods, I'm talking 2000, not 2014, 15, 16. Right? I think those were... That was a dip.

Aaron Fintel:

Yeah, that was a big dip. [crosstalk 00:04:38]

Casey Seymour:

I'm going to talk 'late 17 into '19. I would call that a normal period. Right?

Aaron Fintel:

Yeah.

Casey Seymour:

A normal period.

Aaron Fintel:

Or maybe five to eight.

Casey Seymour:

Yeah. That'd be another good period of time as well. Where-

Aaron Fintel:

Five to eight, you were kind of clamming up.

Casey Seymour:

Yeah.

Aaron Fintel:

And the '17 to '19. Actually '17 to '19 was pretty level. If not, you were ever so slightly ticking just half a degree up.

Casey Seymour:

Right. And because what you saw there was you still had the 14s, 15s, and 16s... I'm sorry. The 12, 13, 14 model machines were still play. They're still out there, still an issue that we were dealing with providing through. But-

Aaron Fintel:

But they were thinning out.

Casey Seymour:

...but the manufacturers were... They were coming off 15, 16, and 17, some very lean years of manufacturing equipment. So you had a pretty steady supply coming back in, right?

Aaron Fintel:

Yeah. There was no flood to worry about because there just wasn't the machine population.

Casey Seymour:

You had very manageable machine population.

Aaron Fintel:

Right. Absolutely. [crosstalk 00:05:42]

Casey Seymour:

Whatever you were talking about, whatever you were doing at the time, you had a very easy, comprehensive way to go through that and check down. Now you're still fighting the 12, still fighting the 13, still fighting the 14s. But you're still able to check down and work your way through some 15s and some 16s and some 17s and the one year old 18s or the one year old 19s. And then all the wheels fell off in 20 and we had that whole thing happened, but with the coronavirus and everything else kind of slowing things down, but 20 things sped up because we there's a lot of CFAP money that showed up.

Aaron Fintel:

Yes.

Casey Seymour:

That pushed a lot of guys into some profitable levels where they were like, "Okay. I'm going to go get my new tractor now."

Aaron Fintel:

Yep.

Casey Seymour:

Or newer tractor.

Aaron Fintel:

Exactly.

Casey Seymour:

Whatever you want. Whatever the situation might be. So that's one thing. But even then, I would say that whatever the price increase was on a tractor, you're probably going to recognize somewhere between 60% and 75%, I would guess, of that overall price increase. So if it's a 4% price increase, you're going to get 2.5% to 3% of that back to the tractor.

Aaron Fintel:

I would say with a tractor with a row crop tractor, a Magnum, an 8000, a T8, whatever. With those tractors, in the leanest of times, you're probably down at 50.

Casey Seymour:

Right.

Aaron Fintel:

And at the greatest times, you're probably 75.

Casey Seymour:

Probably.

Aaron Fintel:

Normal, normal.

Casey Seymour:

Normal.

Aaron Fintel:

Normal good times, not ridiculousness that we currently reside in.

Casey Seymour:

Right. Yeah. Yeah. So that's one thing you look at there. So let's jump over and take a look at what we see happening, in my opinion, would be the next... We're going to save combines for last because that's a whole podcast by itself, but.

Aaron Fintel:

Bring your scale.

Casey Seymour:

Let's talk about sprayers. Sprayers and four wheel drives to me, I think, are two machines that when you are talking about these two rigs, for whatever reason, if one is hot, another one's not. And it's just been like that since I've been in this business. I think-

Aaron Fintel:

And that's because they bounce off each other, I said.

Casey Seymour:

...they really do. Yeah. They really do.

Aaron Fintel:

Because take the month of April. You're either tilling it or you're burning down.

Casey Seymour:

Right.

Aaron Fintel:

You're not doing both typically.

Casey Seymour:

Right. Yeah.

Aaron Fintel:

So there you go.

Casey Seymour:

And I would say that the four wheel drive has gotten to be a little more commonplace on a lot of farms than [crosstalk 00:08:16] they have been because they're very versatile now. I mean, guys are putting three points of PTOs on them, they're using them as grain car tractors, tillage tractors, planting tractors.

Aaron Fintel:

There's a lot of four wheel drives anymore that are planting tractors, man.

Casey Seymour:

Yeah. A lot.

Aaron Fintel:

Quite a few.

Casey Seymour:

Quite a few. And if you're looking at those things... So those two things to me, I mean, those things will fluctuate. Right now, obviously, if it's a four wheel drive or sprayer, either one, and it's available, you probably have a buyer for it.

Aaron Fintel:

Right. Oh, absolutely.

Casey Seymour:

You know what I mean? It's just-

Aaron Fintel:

Especially the four wheel drive.

Casey Seymour:

...yeah. It's just a crazy time that we live in and that is so.

Aaron Fintel:

A sprayer really kind of depends what it is. Four wheel drive, though, I would say if it's a decent 9R under 5,000 hours.

Casey Seymour:

Yeah. So let's talk about price increase. Right now, I think the price increase on a four wheel drive to me is probably 85 to 90% right now of that price increase is being recognized by the use on both of those, four wheel drives and sprayers both.

Aaron Fintel:

Yeah. I would say maybe a little higher on the tractors, and there again, it's very spec specific.

Casey Seymour:

Very spec. Very spec.

Aaron Fintel:

Specification specific.

Casey Seymour:

That's right.

Aaron Fintel:

Wow.

Casey Seymour:

And I mean, we've had lots of guys that walked away from a four wheel drive because it didn't have PTO.

Aaron Fintel:

Oh, yeah.

Casey Seymour:

You know what I mean?

Aaron Fintel:

And PTOs less of a deal because you can throw that on. You can throw a three point on. Lord knows if you do both of those, it's six digits almost anymore. Used to be able to do both of them for 25, but those days are gone. But the bigger thing is the high flow because you can't add that.

Casey Seymour:

No. And those are things that are just anymore with hydraulic the size and speed of what we're doing, the hydraulic need for these machines has just grown and grown and grown.

Aaron Fintel:

Exactly.

Casey Seymour:

So I would say in normal times, when I'm looking at a four wheel drive, depending on if they're hot or cold, that you're probably going to get somewhere between, I would say 50 to 60% of that price increase will be recognized there. And the sprayer, again, sprayers kind of go in waves a little bit, almost like planters to some extent where we flood the market with sprayers and we wash out and then we totally drain the marketplace of sprayers and then go back and sell a bunch more sprayers and then that kind of creeps back up and then it kind of comes back out again.

Aaron Fintel:

Yeah. Sprayers very rarely have a steady, healthy market.

Casey Seymour:

No, either we have way too many or not enough.

Aaron Fintel:

Right.

Casey Seymour:

And I think a lot of that is in the past so many of these-

Aaron Fintel:

Commercial application.

Casey Seymour:

Yeah. They'll go out and get their own and they'll be doing good. And they'll say, "You know what? I can afford that sprayer now. I'm going to go ahead and get that sprayer. I'm going to go use it. This, that and other thing." And then when it comes time to get a new sprayer, they're like, "You know what, it's cost me about as much to have the commercial guy come do it. When I look at payment and this other things and blah, blah, blah, my cost per acre, it might be a little more for the guy to come do it, but I'm not going to upgrade my sprayer. I'm going to keep the one I've got and what I can't get to, I'm going to hire the coop."

Aaron Fintel:

Right.

Casey Seymour:

Right. And you see a lot of that. That back and forth there. So, to me, I think-

Aaron Fintel:

Having my own sprayer was a great idea until I got that third-year inspection.

Casey Seymour:

...and I think that's when, to me, I think when you're looking at sprayers, it really depends on where you're at in that thing. But I, again, I would echo that 50 to 60% of the spray-

Aaron Fintel:

Sprayers, more so than the tractors. Of course you're only dealing with, what, four of the most common ones probably.

Casey Seymour:

...sure.

Aaron Fintel:

60, 44, 45, 38. For us. We don't do much for thirties and no 23s.

Casey Seymour:

Right.

Aaron Fintel:

Of the previous regime.

Casey Seymour:

Right.

Aaron Fintel:

Well, that's what would be out there use so it's appropriate. I didn't screw up yet. When you look at those units, it's so hit or miss. When 44s first came out, you could have put half a mill on a used one and got rid of it if it had the right stuff. Same on a 60. 45s, you either cannot give those things away or you're trying to buy 30 of them to somehow touch demand. And through the years, the 38, when that series came out, was the end all beat all. That's the one you got to have. And every year, it loses a little mystique. Have you noticed that at all?

Casey Seymour:

Well, I think because tank sizes. People want bigger tank size.

Aaron Fintel:

Right. But it used to be the big complaint was that the 49s. Okay. Back then, they're too heavy. They're too heavy. They're too heavy. Well, a 45 isn't lighter, but now it doesn't matter. Ah, hell. Just [crosstalk 00:13:21]. Now we need the big one, so just deal with it.

Casey Seymour:

And I think that was part of it. I mean, you look at some of that [inaudible 00:13:27]. You want 800 gallon tank was kind of the mainstay for a while. I want 800 gallons. And then the ASPs were getting, "I'm going to get that thousand" and then the farmer was like, "I want a thousand."

Aaron Fintel:

Right.

Casey Seymour:

And the ASP is like, "I want 1200 gallons." And now you're kind of running an even mix between 1000, 1200 gallon, depending on where they're at, what they're doing, what's a crop thing. What are they spraying? All these different things come into play. And you're seeing more people adopt the 1200 gallon tank size of machine. Now you got this big 1600 gallon tank it's come out now and that's going to be for the folks that have got a lot of acres to cover or I could see some more ASPs going down that road, but, again, it comes back to a weight issue and what are their trailers rated at and all those kind of.

Aaron Fintel:

Exactly. The other thing. This is probably why the slight downturn of the 38 is. Back in the 30 series, when that 48 came out, that was everybody's dream, dream, dream, dream, dream. Until your field was wet and it was full.

Casey Seymour:

Right.

Aaron Fintel:

Because they had a lot with that thousand gallon tank. It was a lot of extra weight on that same chassis, pretty much. So the 38 comes out and your 47 guys, a lot of them jump to that, and your 48 guys are like, "Okay, cool. Now it's not uphill battle all day." And as those guys have either... You're dealing with a 47 size guy, 4720, 4730, he might now be teamed up with another 47 guy or maybe he's the guy that, yeah, it's got 3000 hours and it's in the back corner and they called co-op to come spray.

Casey Seymour:

Right. Yep.

Aaron Fintel:

I help as needed type deal. So that could be part of it too. It's just that you took 10 guys, made them five and three of them are still trading.

Casey Seymour:

So I think from a price increase standpoint and how it affects the use, the more we talk about this, the more I think about it and it's so pocketed.

Aaron Fintel:

Yeah. Right now, of the use sprayers, going from highest percent to new, to lowest, I would say 60. I would go just right down backwards down the list.

Casey Seymour:

Yep.

Aaron Fintel:

Maybe 44 above 45, if it's the right 44.

Casey Seymour:

If you're in the south.

Aaron Fintel:

Yeah.

Casey Seymour:

The smaller tank size is a bigger deal than [inaudible 00:16:22], you know what I'm saying?

Aaron Fintel:

Yeah.

Casey Seymour:

It's a swap. Here, we want the most gallons we can go out and spray because we have huge open fields to go spray.

Aaron Fintel:

Exactly.

Casey Seymour:

We got 132-foot booms. We're out there just getting after it. And then you go down south, though, like Mississippi, for example and you talking to somebody down there, they're still running four and 500 gallon tanks.

Aaron Fintel:

Oh yeah. Like 6,700. [crosstalk 00:16:45] So he'll sit on top of the hood and you know what's funny? If a sprayer that we would have such a hard time selling in territory, and I wish we had 10 of them a year, because I can sell every one of them, is a 4030 with a 90-foot boom.

Casey Seymour:

And a poly tank.

Aaron Fintel:

I ended up poly tank. Well, not so much that.

Kim Schmidt:

We'll get back to Casey and Aaron in a moment, but I wanted to take a quick moment to invite you to this year's dealership minds summit, next level service management. This year's event will be in Iowa City on July 26 through 27. To learn more and to register, head over to dealershipmindssummit.com. Hope to see you there. Now back to Casey and Aaron as they continue their conversation, shifting gears slightly to talk about sprayers and the decision customers are needing to make about whether they can afford a sprayer or if it makes more sense to contract the job out.

Casey Seymour:

Depending on where you're at, that price increase is going to have a bigger effect.

Aaron Fintel:

Right. Exactly.

Casey Seymour:

On what it is that you're doing. You get up into the northeast, you get into Pennsylvania, Delaware.

Aaron Fintel:

They would have no idea what they're going to do with that 4060.

Casey Seymour:

I mean, maybe they'd be spraying a field and-

Aaron Fintel:

Take the outer take the outer booms off.

Casey Seymour:

...some of these fields, I mean, I've had folks on from up there and they're talking about the field sizes they work with.

Aaron Fintel:

Oh yeah.

Casey Seymour:

So it's a whole different thing. So pretty much what you see in the Midwest, the high plains in the Midwest and those kind of things, when you kind of get out on the peripherals of that, the east and the west side of that, size really shrinks. Really, really shrinks.

Aaron Fintel:

Oh yeah.

Casey Seymour:

And so that's going to have a big kind of caveat as to what that looks like.

Aaron Fintel:

You get more people too.

Casey Seymour:

Yep. And same with four wheel drives.

Aaron Fintel:

Yeah.

Casey Seymour:

Someone runs a four wheel drive in some of these areas, bigger row crop areas like in the south, for example, they don't see a lot of four wheel drives down there farming.

Aaron Fintel:

Yep.

Casey Seymour:

You see a lot of four drives down there building dykes and-

Aaron Fintel:

Yeah. If it's a four wheel drive, it's got a pan.

Casey Seymour:

...right. And so you see those kinds of things, but you get into Ohio, I mean, four wheel drive isn't necessarily that out of whack. It's not necessarily-

Aaron Fintel:

No, there's lots of even small farms got one.

Casey Seymour:

...well, that's where the 9410 was a three point PTO and 480 rubber was that area.

Aaron Fintel:

Yep.

Casey Seymour:

That whole area.

Aaron Fintel:

Well, and that's what... That tractor, that's what makes that tractor so cool because from sea to sea, it's used somewhere.

Casey Seymour:

Right.

Aaron Fintel:

It's a planting tractor from here to the Mississippi.

Casey Seymour:

Yep.

Aaron Fintel:

Then it's either a planting tractor or it's the tillage tractor and then you get into the Eastern time zone and it is a tillage tractor.

Casey Seymour:

Yeah. So depending on where you're at, price increase is going to play a big effect, in my opinion, on sprayers and four wheel drives.

Aaron Fintel:

Yep.

Casey Seymour:

More so than anything else. Right. All right. So now we'll drops down to planters, right? Planters and seeding equipment, as a whole. Planters, drills, discs. Or not drills.

Aaron Fintel:

Air seeders.

Casey Seymour:

Air seeders and box drills, those kind of things. They're all going to start playing effect there. So the air seeder marketplace is a wheat area, right? So if you're a big wheat area, the price increase is going to have an effect on the use. If it's not a big wheat area, I don't know that price increase really has that big of a play because you're looking at your customer base and what that looks like. Right.

Aaron Fintel:

Exactly.

Casey Seymour:

Right. So if you're in south central Kansas and you have a 60-foot air drill, you probably have a better marketable area.

Aaron Fintel:

You must not have it advertised.

Casey Seymour:

And then if you're in even up here where we're at, I mean, there's wheat where we're at, but it's not as dominant of a crop as what [crosstalk 00:20:37]-

Aaron Fintel:

I've noticed we still, to this day, still sell way more 42s than 50s and 60s.

Casey Seymour:

...sure.

Aaron Fintel:

Big time.

Casey Seymour:

Yep. And those big 60s, that's the west Texas and Oklahoma panhandle, western Kansas, that kind of stuff, where you're doing-

Aaron Fintel:

Middlebury, Connecticut.

Casey Seymour:

...yeah. I don't know about that.

Aaron Fintel:

I don't know if you could unfold that in the state.

Casey Seymour:

You'd have some problems there, but so to me, I think, the seed, wheat, seeding stuff, to me, air drills, those kind of things, that's a pocketed deal where you don't have... It just depends on where you're at and what that looks like.

Aaron Fintel:

I would even maybe say maybe it plays off the actual crop market a bit more than corn soybean stuff.

Casey Seymour:

What do you mean?

Aaron Fintel:

For instance, air drills, rigid drapers. Take those two things. I feel like if the poverty grass, if you will, if the price is good on it, you're going to realize a lot of, maybe even extra, of price increase, but if it truly is poverty grass, you're going to get zero, zero, zero.

Aaron Fintel:

[crosstalk 00:22:07] That's what I mean. There is a point with that stuff where it's... We've been there. We've been to a point where, "Please do not trade another air seeder. Oh, look, it's another 42 foot, 10 inch. Awesome. Can't wait. Park it by the rest." We've lived in that world where there is zero increased realization and that's because of the actual market.

Casey Seymour:

Right. Yep. Yeah. I think that's probably a good point where you're at market base wise because you're not selling a rigid dripper head or a rigid pickup head or anything like that, finger pick-up or something like that or bat reels or something like that. You're not selling something like that [crosstalk 00:22:54] unless you're going into some kind of a grass crop, whatever that is, if it's weed or rice or whatever.

Casey Seymour:

There's all that stuff that you got to play into. So, okay. Planters. Now planter is more universal, right, because if you're planting corn or soybeans or whatever it is that you're planting, row crop wise, you're using a planter, right?

Aaron Fintel:

Oh yeah.

Casey Seymour:

Some guys will use their air seeder to plant soybean and some guys will... Even knew a guy once that used an air seeder to plant corn, but.

Aaron Fintel:

Yeah, I've seen it.

Casey Seymour:

So wasn't the prettiest field on the planet, but it worked. Right.

Aaron Fintel:

Yeah.

Casey Seymour:

So now if you're looking at those things and you're figuring out what's going on there, the planter market right now, I think the price increase on planters has been one for one for a long time. And it's been that way strictly because of sheer numbers.

Aaron Fintel:

Right. Yeah.

Casey Seymour:

So since 2018, I would say, the price increase has been pretty close to a one to one deal.

Aaron Fintel:

Right. Planters have kind of been living in a world that everything else has now joined.

Casey Seymour:

Yeah. They're like, "Hey, what do you guys, yo, you're just not starting to perform. Cool. Well, we've been doing it for a while."

Aaron Fintel:

Right.

Casey Seymour:

We're what you call a dynasty.

Aaron Fintel:

Yeah, exactly.

Casey Seymour:

So I think planters are... And the thing about planters, too, is that the used market is getting to be a little bit more receptive to some of the stuff that you can put on planters.

Aaron Fintel:

Fancy.

Casey Seymour:

You know what I mean? Some of that stuff... I wouldn't say it's all universal, because planters are probably the most fingerprint thing on the planet, but when you start looking at fertilizer systems.

Aaron Fintel:

You have guys making that jump. What we always talk about with combines. The 9600 to S670 jump. You have guys doing that with planters now. They have heavy duty down pressure springs. Mechanical drive. And they're like, "Well, if I'm going to trade planters, why stop halfway?"

Casey Seymour:

Yep. Exactly.

Aaron Fintel:

"I want the EE, man."

Casey Seymour:

Yep. And I think that's the one driving factor that we're seeing in planters, and I think-

Aaron Fintel:

If they have the tractor for it.

Casey Seymour:

...if they have the tractor for it. And that's the thing where I think that you start looking at some of the stuff that... You got to look at, even on some of these row crop tractors that they're pulling 24 row planters with, yeah, you're able to go eight to 10 miles an hour, no problem, but you start running your hydraulic EE. You know what I mean? That's just like what we talked about earlier. So those things all have a huge effect into what's happening there.

Casey Seymour:

So I'd say planters right now are one for one. If not, they're eight to one.

Aaron Fintel:

Yeah.

Casey Seymour:

80, 90% of that price increase is recognized on the backside of that, so. All right. So that leaves us with combines. And combines, to me, are a-

Aaron Fintel:

Commodity.

Casey Seymour:

...yeah. Even where we're at right now, your overall marketplace is going to continue to struggle to. It's better than it's been. Don't get me wrong, but.

Aaron Fintel:

In a daily battle on the front lines of combine world, there are still problem units out there.

Casey Seymour:

Yeah.

Aaron Fintel:

Tons of them.

Casey Seymour:

Sure.

Aaron Fintel:

Twelves and thirteens still suck.

Casey Seymour:

Yeah.

Aaron Fintel:

They didn't all of a sudden become worth 150.

Casey Seymour:

Right. Yep.

Aaron Fintel:

They are now. They're not 65 soft, but they're not a hundred plus soft. Strong either.

Casey Seymour:

Right.

Aaron Fintel:

So they have bounced a little bit, but with that price realization thing, right now, you certainly have it in a one year old. By the time you get to two year old, it's a year, hours.

Casey Seymour:

Right. Yep. So I would say in the best of times, where we're at right now, my opinion, I think a used combine recognizes probably 50 to 60% of the overall thing. And that really comes down to what's available where you're at, in my opinion.

Aaron Fintel:

Yeah. I get it.

Casey Seymour:

If you're in an area where you have hardly any one or two year old 750, 500 separator or less combines laying around, I think that your demand is going to be way stronger. I think you're going to recognize way more of that price increase. Right?

Aaron Fintel:

Yep.

Casey Seymour:

If you're in an area where you already have a bunch of... You know what I mean by a bunch of mean, like you have some sitting on the yard, right, of that thing.

Aaron Fintel:

Yeah.

Casey Seymour:

Who knows? You're probably going to play that back and forth a little bit, but in normal times, I think you're lucky to get 40 to 50% of the combine of the price increase to be recognized.

Aaron Fintel:

I was going to say 25 to 30 and that's because you'd get mad if I said zero.

Casey Seymour:

Well, I mean, don't me wrong. There were times in '12, or see, '14 and '15 where they didn't have any change in pricing.

Aaron Fintel:

Right.

Casey Seymour:

The new one went up, but the used one didn't follow it up.

Aaron Fintel:

No. No.

Casey Seymour:

It just didn't happen. And most of the time you didn't recognize that until you were into the second trade before you really recognized that.

Aaron Fintel:

Yeah.

Casey Seymour:

That, you know what, I didn't really see.

Aaron Fintel:

Well, back then that might have been a Bullet Rotor 60 series, and that does have a little premium to go south.

Casey Seymour:

Yeah. Might have been. So that's my 2 cents on what we see as price increases go. I mean, we could talk hay equipment and those kind of things, but I think hay equipment is very... I think the price increase is levied by what the ability to produce hay for that year is.

Aaron Fintel:

Right. It's kind of like the wheat thing.

Casey Seymour:

Yep. I think if you're in a heavily irrigated alfalfa area, that's a whole different conversation than if you're [crosstalk 00:28:59] baling grass hay.

Aaron Fintel:

Oh yeah. It's also kind of a whole different line of machinery too.

Casey Seymour:

Oh yeah. It is. Totally different. Totally different deal. So that's that there. So, with that, I feel like it's a good stopping point. Aaron, if folks want to reach out to you and get more information about what is it you're doing, what's the best way to do that.

Aaron Fintel:

I'm pretty active on the Twitterverse @aaronfintel. Also under that on Facebook and LinkedIn. And you can call me, text me. (308) 760-1193, or email me. Aaron.Fintel@movingironllc.com.

Casey Seymour:

Outstanding. I'm Casey Seymour with Moving Iron podcast. Make sure to check me on Facebook, Twitter and Instagram. All that's at Moving Iron LLC. Go to LinkedIn, if you follow me there. That's the Moving Iron podcast on LinkedIn and then there's the Moving Iron YouTube channel called The Moving Iron Podcast YouTube channel. So check that out. Also, I'm on Snapchat as olecase. Check me out there and you can find me there.

Casey Seymour:

You can do that. And, last but not least, if you're interested in coming to the Moving Iron Summit in Nashville, Tennessee, well worth your time. We talk about the same kind of stuff we talk about on here. And, plus, you get a lot of good information from some people out there that are going to tell you about the economic drivers that you see happening that are going to shape and mold this business throughout the next year. So well with your time doing that.

Casey Seymour:

If you want to check that out, go to movingironllc.com. Go over to the Moving Iron Summit tab, click on that, scroll down and you'll get all that information that you need there, how to sign up and those kind of things. So check it out. If there's any information that you want to hear more about that on these, the iron comps stuff from tractor zoom, that we're putting out here, then hit me up at movingironpodcast@movingironpodcast.com and I will be sure to research that for you and we'll talk about it on the podcast. So, with that, I am Casey Seymour with Aaron Fintel. Let's go get some iron, folks.

Kim Schmidt:

Thanks to Casey and Aaron for sharing their conversation with us. You can keep up on the latest industry news by registering online to receive our free newsletters. Visit www.farm-equipment.com. For Casey and Aaron, as well as our entire staff here at Farm Equipment, I'm Kim Schmidt. Thanks for listening.

Sound Effects: Jahzzar - Magic Mountain