20 September 2024
ATR Raining money on farmers, Fertilizer Drone Spies from China, a new tariff war? @MachineryPete - E388
This Week's Ag Tribes Report with Vance Crowe features a special co-host, Greg Peterson, better known as Machinery Pete. Greg is the visionary behind a leading marketplace that connects buyers and sellers of used farm equipment. His platform provides an extensive array of equipment listings, coupled with advanced search tools, ensuring farmers can swiftly find and purchase the equipment they need.
In this episode, Vance and Greg delve into critical agricultural issues:
Farm Bill Deliberations: They discuss how lawmakers are contemplating emergency farm aid as negotiations on the new Farm Bill continue to be stalled, impacting agricultural communities nationwide.
U.S.-China Trade Tensions: The duo explores the severe implications of potential U.S. tariffs on commodity trade with China, analyzing how this could disrupt global agricultural markets.
National Security Concerns: They address the controversial topic of fertilizer drones manufactured in China, examining whether these technologies pose a national security risk.
List of Worthy adversaries: https://x.com/i/lists/1815850820195475962
Vance Crowe (00:10.93)
Welcome to the Ag Tribes Report. I'm your host, Vance Crowe. Each week I bring a co -host that represents the perspective of one of the many Ag Tribes that collectively make up U .S. and Canadian agriculture. This week I'm joined by Greg Peterson, aka Machinery Pete, the founder of a marketplace for buyers and sellers of used farm equipment, offering farmers a vast selection of equipment listings in one place with a search tool that makes it easy and fast to find relevant equipment.
Machinery Pete, welcome to the Ag Tribes Report.
Machinery Pete (00:44.495)
Hey, honor to be here, Vance. Thanks for the invitation.
Vance Crowe (00:48.596)
Today, we're gonna be covering how the farm aid that's going to be offered by lawmakers possibly, we're gonna go through how grain markets might be impacted if the US does end up putting tariffs on like they're claiming they're just about to do. And we're gonna talk about the DJI agricultural drones that may be banned for suspicion that they could be used by the Chinese government for nefarious purposes.
We're going to get to all of that and we'll also discuss the Bitcoin land price report. Pete's worthy adversaries and what is one thing he believes that almost nobody he knows agrees with him on. So to kick it off right off the beginning, we're going to start with farm policy news with a headline that is lawmakers considered farm aid as farm bill remains stalled. So AgriPulse's Phil Brashear reported on Monday that a senior Republican on the Senate Appropriations Committee
said that lawmakers are considering attaching a package of farm income support to a farm bill extension that could get enacted at the end of the year. So instead of passing the farm bill, what they're talking about doing is actually just putting a rider on there that would potentially send money directly to farmers. Senator Stabenow recognizes that farmers can't wait for another extension. And so all the talk is going, how can we make sure that farmers are staying afloat?
when there has been a trade deficit of 30 billion this year and 42 .5 billion is expected in 2025. So machinery prices are going down, supply of grains is really high. What do you think about the government doing an end run around the reason to get the farm bill done to begin with, which is to get farmers money? What do you think about their plans here?
Machinery Pete (02:37.773)
Well, unfortunately, it seems like par for the course with our political situation here of the last number of years. You know, I've always taken a little hope, Fanson, that at least it seemed like it to a much higher degree agriculture has been the one area where maybe both sides can kind of work together. But what you described there, that kind of tack on extension, apparently that's become more of a
you know, kind of the par for the course, you know, if that's to the extent that's not addressing the key issues that need to be addressed in the farm bill, that's, you know, very unfortunate.
Vance Crowe (03:14.038)
Yeah, I mean, it's clear that even when they were getting excited this summer, like, it looks like we're making progress on the farm bill. I don't think anybody thought that that was going to happen until after this presidential election. But the big challenge is it's kind of hard to explain to all of Americans that are suffering, that have high prices and their input costs are high as well, how it's logical or fair that landowners that are sitting out in the countryside deserve to have payments.
What do you think, how will this go with regular consumers out in the world that watch farmers get checks like this?
Machinery Pete (03:48.333)
Well, people still like to eat. That's one thing from a data standpoint that I guess I monitor every day. no, again, it's interesting. I've been monitoring our market farm machinery values and trends for three and a half decades now.
It's interesting as it occurs to me, tend, you know, we're drifting farther away from the farm. So folks that live in the cities, when I was coming up, it used to be, well, my dad was a farmer, my uncle. Now that's maybe moved to the second to third gen. And as that happens, and of course our world has changed greatly with social media and the internet, there's a disconnect there for sure. But even so, I still think that that poll,
reality of what farmers need to survive, there's still a high level of care there, as there should be politically and from people hopefully understanding the business end, which is very difficult for non -ag folks to understand the business of farming and government involvement. no, guess I'm hopeful there that it won't go.
further sideways with how people think about farming and government support.
Vance Crowe (05:10.199)
Yeah, I think that you're exactly right about the number of people that used to be connected with ag. It's just every single year goes lower and lower, whereas it used to be my uncle or somebody you were connected with and now we have less and less people. And I think a lot of that has to do with hyper specialization that comes in ag. Even if you know somebody that's related to ag, people don't always make that connection because it's not the picture that they have in their minds of a farmer raising.
pigs and cows and raising crops and having the horses to raise those crops. there's a, it's just the people that are working in ag don't always get associated with being a farmer and yet they're still doing ag related work.
Machinery Pete (05:50.787)
Yeah, think, the, you know, one thing that I think, just again, I'm thinking back over the three and a half decades I've been doing this, but I think that the non -AG folks, well, I don't know, it's just maybe all the resources out there to get information,
Hopefully understanding just even a little bit better the risk involved for production agriculture, whether it's beef or corn or beans, wheat, whatever, that that risk is just, mean, to the degree that they just can't fathom unless they start to read a little bit about it. And then it's like, yeah, that's obviously we've, this is not just like any industry. So.
You know, like I said, people like to eat. I don't think that'll ever change.
Vance Crowe (06:40.921)
All right, well, let's move on to headline two because actually this week all the headlines seem to be kind of going in the same direction. This comes from Joe Valaklavic from the grain markets and other stuff. He has a daily podcast. It's really exceptional talking about different markets. And he brought up the subject, will US tariffs decimate the commodity trade with China? So it's been in the news for months and months. The Biden administration is planning on adding tariffs
on China. Back in May, the White House put out a statement saying, American workers and businesses can out -compete anyone as long as they have fair competition. But for too long, China's government has used unfair non -market practices, forced technology transfer and intellectual property theft that has made them have control of 70 to 90 % of global production for critical inputs necessary for our technological infrastructure, things like energy and healthcare.
Well, that seemed like just something they were putting out there as a threat, but as it turns out, not only have they kept all of the tariffs that Trump put on, or almost all of them, but now starting on, I believe, September 27th, they are planning on putting a 100 % tariff on EVs, 50 % on solar cells, 25 % on steel, aluminum, and other key metals. When Canada did this, it turns out that, put some tariffs on China.
The Chinese just stopped buying canola seed and the oils associated with it and there was a market crash around canola. So machine repeat, what do you think? How will tariffs on these sorts of solar, EV stuff impact the American farmer?
Machinery Pete (08:23.629)
Well, know, American farmer would prefer to, you know, produce the best product in the world and sell it for a fair price to anyone in the world. And I think on the one hand, you know, the amazing work of like,
American Soybean Association back over the decades longer than I've been doing what I do to build these markets whether it's China or other markets hugely hugely valuable But you know the world has changed and I like you said I mean the left of the aisle politically now has come around to see value in tariffs to protect industries So, you know, it puts the farmer in a tough spot
But like I said before, even the Chinese, as far as I can tell, they still like to eat. the options, if you're not getting your soybeans from here, yes, you can shift it around. it's just, we all want...
more fluid, efficient markets. And I think farmers are just, you know, they're used to this now. It's been a number of years. So I did read, I don't know if it was Wall Street Journal or something about that EV issue you brought up, the Chinese, and I don't know, frankly, much at all about EVs, but I just read that their product was very, very good.
But the government was subsidizing it to such a level that it scared the bejesus out of Detroit over here. Like, we can't deal with that. So it is interesting to see the government be pretty quick to these issues to help our industries, our workers, again, against unfair competition. And one last thing on China. Again, I'm old.
Machinery Pete (10:09.743)
pushing 60 here, but as China became China, even in my sector that I do report on used farm equipment, you can go back 20 years to 2004 and we saw a spike in used farm equipment values. And the reason for that spike was because China's growth.
back 20 years ago, immense huge growth, their need and appetite for steel. So that was beginning to affect cost of new grain carts and grain trailers. So the used ones that I report on, they were just going through the roof. So the growth of China has been huge there, but in US corporations wanted a piece of that pie with all the rising cost of living with China over there. I personally was frustrated
frustrated all those years by, know, because China was pretty, very transparent. They were like, okay, you can do business here, but we get access to your intel. And I was like, well, why would you do business that way? And as a board of a corporation or the management of those corporations, yeah, you want to sell all that stuff, but that's not a good long -term business play to give away your secrets. Just say no.
Is that naive for me to say that? I don't know, but why does it have to be a government protecting? Corporations should act in their own best long -term interests too. But then again, you've got bonuses set up for management people, and they need that Asian market, that Chinese market to grow, hit.
You have to dive in really deep there and see what are the incentives for the people managing these companies. And I don't think that gets talked about enough.
Vance Crowe (11:57.09)
I am completely with you on that, that we need our companies that are from the United States to really be thinking about themselves as US companies. When Monsanto went to sell to Bayer, there was so much pressure around them becoming a monopoly that these countries all had to approve the sale. Otherwise, you'd have to have two separate companies in Russia where instead of them being merged together.
And so what these countries did is they said, we'll let you do that as long as you hand over your technology on how you did those GMOs or you build a laboratory here and start doing some of your scientific research here. So the Monsanto, which was a national treasure in terms of innovation, know, their seed ownership, all of the technology that they built, they handed it over in order to make that merger happen. And we'll never get that technological advantage back. That's something that's gone forever.
Machinery Pete (12:53.315)
Yeah, again, like I say, look at the incentives. I live in Minnesota here, grew up here, and our state is pretty, you know, it's a liberal state. But the Daily Newspaper for years, it's been interesting. They have a CEO pay watch, which they just report on, you know.
across all types of industries, ag and every other industry. And you know, our culture, we're at this point where, you know, and we are capitalistic and believe me, I've built my business for 35 years, I get at risk and reward. That's farming, that's life. But, you know, when some of the management, you know, is incentivized with bonuses or stock options or whatever, I mean, to a level that's like, whoa.
you know, does that, how does that affect decisions they make in the short term for their, whatever corporation it is. well we'll dance with those folks because we're going to sell a lot more. I mean, so that gets to something that frustrates me. And I try not to be a grouchy old gray hair guy, but you know, there's longterm and there's short term. We've discounted longterm.
for too long, whether it's politically or business or personally. And we live in a world that's like short term, just boom, right now that's all people can see. And that's not right. And when you over -focus on the short term, things are gonna get gumbled up long term and that ain't good for anybody, in my opinion.
Vance Crowe (14:28.829)
Yeah, I think that that's at the very core of life is balancing what do you need to do right now and how can you be thinking about the future? And if you are so focused on what's going on today and you sell out everything, it's a bad gig. It's not a good way to build a nation.
Machinery Pete (14:46.197)
I don't think so either.
Vance Crowe (14:49.051)
All right, moving on to our third and final headline. This one comes from dronelife .com. DJI agricultural drones, maybe getting banned? The agricultural drones that have been starting to be used for things like fertilizer applications or pesticides are coming under question as Congress members send a letter to the USDA and CISA, C -I -S -A, that they have national security concerns.
about the way these drones are potentially either being operated, how much information they're sending back to China about our fields, and could they be used in some sort of attack against American infrastructure? Now, this might've seemed absurd just a week ago, but when you consider what was done with those tiny little pagers where their batteries were laced with some explosives,
All of sudden you took something that seemed like a regular piece of equipment in people's pockets and you turned it into a bomb. So Greg, what do you think? Is this questioning DJI agricultural drones, is this just protectionism for US drones, a real security threat or something else going on here?
Machinery Pete (15:59.779)
Well, I'm with you Vance on the our eyes being collectively opened here this past week by the pager issue and in with Israel and Lebanon there and I mean it's a different world and I think in a country, know, of course the the the fear of Chinese growing influence and control is is valid and obviously very, you know, legitimate. So drones are.
becoming an ever more important piece of every industry. We chatted a little bit before we went on air. I've been...
advocating for the use of drones to help buy and use farm machinery for a decade. And that doesn't seem to make sense. But I remember a decade ago thinking, these drones are going to change everything. And now, obviously, with spraying these big, huge drones, we're all for the efficiency they can bring, as it's difficult to find people to help on the farms. But yeah, technologically, I guess whatever concerns have to be addressed there.
Vance Crowe (17:04.925)
You know, if I could interrupt, I'd actually be interested in hearing your state of the drone world right now. The last time I checked in with drones, there were people flying them to be able to map their fields, but how sophisticated have they become?
Machinery Pete (17:17.539)
Well, to me they've gone from just kind of a novelty, like, that's cool that someone could fly a drone over my farm and almost like a vanity thing. Almost like the old days on farm country where you'd see them now, you'd go into a farmhouse and there's a picture, a flyover picture. So these companies that would fly airplanes and they'd say, hey, for whatever amount of money, we'll give you this cool airplane shot of your farm.
That's, think, how people perceive drones initially. And my take was just the opposite. I was like, this is a tool. So in my world, again, which is a specific, know, compiling auction prices, what is an asset, a piece of equipment worth? It might be a one -year -old combine, sells for 600 ,000, might be a 80 -year -old antique tractor, but.
When you're talking about people buying and selling things, there's emotion involved. We're human beings. And that's why the auction method of selling has been around for over a couple centuries, and it's vital and growing is because it's emotional. So when you're looking at selling something, to me drones were this.
new frontier. I told people 10 years ago, if I were a farm equipment dealer, I would hire a 21 year old kid and say, guess what, you're a drone guy or gal. And you go to these 20 key customers of ours and you film them planting and harvesting. To give them the video, which is cool, like, hey,
customer, Bob, here you go, thanks for being a customer of our dealership. But more so when that guy wanted to trade in that combine and tractor, now it's not just, you might, you go to our website now, there might be 400 John Deere S670 combines for sale, but there's only one that's Vans's.
Machinery Pete (19:00.815)
And if you have video of that thing on a beautiful day in whatever, Georgia, Minnesota, South Dakota rolling through, you know, doing its thing, guess what? That S670 has now become more attractive than all the other ones. So to me, it was just silly not to think about how to utilize drones to help sell things. And now, of course, again, on the spraying front, unbelievable things they can do there. So I'm just, you know, a fan of the advancing technology as long as, again,
kept between the buoys and there's not any nefarious, you know, intel being shared with folks that it shouldn't be shared with.
Vance Crowe (19:38.251)
Well, I think there's gonna be a lot more to come on this because it seems like a really important technology as you said, as labor becomes more and more complicated. But at the same time, like now that we know what somebody can do, I think our imaginations were just blown wide open for how dangerous trusting another country with your technology can be.
Machinery Pete (20:00.077)
Yeah, and not just other countries, but the businesses that you choose to deal with. What are they doing with your data? And again, in farm country, these awareness, these concerns have been obviously there with the data piece and farm equipment. And yeah, they just seem to keep growing and sprouting in different directions monthly here.
Vance Crowe (20:24.247)
Well, that's gonna do it for the news headlines part of the show. If you are interested in a story that you think we should be covering on this, just DM me on x at Vance Crow. Now onto the Bitcoin land price report. This is where we try to find a way to figure out what is going on with the price of land when we detach it from the US dollar whose value goes up and down on the whims of the federal reserve. So,
Machinery Pete, what is an acre of good quality farm ground going for in your area?
Machinery Pete (21:01.615)
Well, I live in Southeast Minnesota, Vance and Rochester, which we're very growing mini metro area here. We're about 130 ,000 people. right in my local area on the edges of town, which had been farm ground forever, those values are for developers have been going crazy. As you drift out into farm country, know, land values are still been very high. Obviously so many factors. I've tried to anecdotally keep tabs on it these last 35 years, because we work with 1100 auctioneers.
years, we're compiling the machinery values, but land values, around here you might see anywhere from like 9 ,500 to 14 ,500, just again depending on the ground. And generally speaking, what I've seen is that land values have held stubbornly high. I mean in ag country they've been pretty much coming off all time highs. They're coming down a little, but not as much as people maybe would hope.
or seem reasonable with the tightening in the ag economy.
We chatted about it a little bit for Vance, but to me it makes sense because we see the same thing with good use of machinery, maybe not falling as much as people think it would have. But to me what this signals is there's a lot of old money out there in farm country. Now I don't mean to be disrespectful when I say old because I'm pushing 60 myself, but farmers are as smart as operators, businessmen, women as you'll ever see to survive through the decades, the ups and downs. They're very smart.
good years. So now when that piece of land that's just the right piece of land comes up, again you got one crack at it and it's not just you that wants it, it's five, six. So that's why I think we see it. Again the auction method doesn't matter what we think a piece of land is worth or what a tractor is worth. You put it up for sale, we all know when that gavel falls that that's what it's worth on that day.
Vance Crowe (23:00.299)
Well, I find that land prices are one of those things that's really difficult because now with people knowing that their money can be inflated, they try and find a place where they can put money where it won't lose value. And one of the scarcest assets in the world is high quality farmland. And I like to make the comparison with Bitcoin. I don't know how comfortable you are with it, but if we were to, are you comfortable with it? Do you know very much about it?
Machinery Pete (23:22.575)
I am not a Bitcoin expert Vance. I will freely admit.
Vance Crowe (23:27.546)
So as it turns out, if we kind of average what you were saying about the prices and we say it's about $12 ,000, then that would mean that it's about .1898 bitcoins per acre. The Bitcoin price as of press time was $63 ,224. So in other words, one Bitcoin would buy you about 5 .2 acres of farmland around where you're at. So I just like to do that because I think it's a way to detach our
pricing of land away from just US dollars and give it another way to tell is it getting more expensive? Is it getting cheaper? Because it's hard to tell when you when you're basing it against an inflating currency.
Machinery Pete (24:09.423)
Well, inflation, that's an interesting topic because obviously it's kind of the source reporting on used equipment values and occasionally on land values we report. And it's not uncommon for people then on social media, which we're pushing 400 ,000 followers out there across platforms to get discussions going. And people will say, well, that tractor, that 15 -year -old tractor,
you're not accounting for inflation on that.
I understand when that comes up, but that's why I've always wanted to compile not one data point, whether it's land or machine. It's like I want to compile every data point. So to then give you an average, a high and a low in US dollars, and however you want or anyone wants to consider inflation over time, I do find the inflation argument
As you look back through the decades, though, we've definitely seen periods of deflation and severe deflation in our sector with used farm machinery, whereas the U .S. economy, no. So then it's like, how do you make the correlation? You can't pick and choose and say, inflation is the answer now, but it well, wasn't 10 years ago because of X. It's just...
you put it up for sale it brought X whether that's in Bitcoin or US dollars you have to have a continuum and that's what I've tried to provide for 35 years a continuum at least so you know people you know whether you're buying or selling you go okay well this is the range I'm looking at.
Vance Crowe (25:53.466)
love it. I love the perspective of nobody brings up the deflation that happens or the downturn in pricing at least. Now on to the Peter Thiel paradox. This is where I ask my guest, what is one thing that you believe that almost nobody in your tribe agrees with you on?
Machinery Pete (26:11.855)
Well, you know, right now I would say Vance, would probably be because the people in farm country are looking to me now, they're, obviously 2024 things are different. We're coming off of, you know, corn and beans were at a different place a year ago, two years ago, three years ago. And now things are changing. I call it the year of recalibrating, you know, used equipment values. And what people are thinking is that this is the biggest drop ever.
that they've ever seen. And it really isn't. And again, think a part of this is our culturally our
however you describe it, but everyone is so short -term. All we see is like today and yesterday.
And what people are forgetting is that 10 years ago in late 13, 14, 15, that was the biggest drop in used equipment values I've ever seen. And again, that's not my opinion. That's what our data showed. Two years in a row in 14 and 15, large late model farm equipment fell 20 to 25 % year over year, two years in a row. And when you look at our auction price data right now, for example, you could look at a John Deere 8R410 tractor, a couple years old, big horse. Average auction price so far this year is down
11 .5 percent and again ten years ago it was more like 20 percent. So when I share that people the reason they're it's disconnected is what in their heads people are comparing to is the is the list price new which has skyrocketed. I mean the price of new farm equipment I always used to figure it was going up four percent a year and when we hit the supply chain mess on the
Machinery Pete (27:55.919)
middle back end of COVID, I mean that became unhinged. So the price of new everything once just went through the roofs and farm equipment was maybe at the fore. So and now those costs of new have they haven't come down yet. So if you're sitting there looking at a new tractor 800 ,000 and then machinery repeats reporting at auction of a John Deere X9 -1100 combine that just dipped under 400, yes that is a huge drop.
But they're comparing it to the price of new, not to the advertised price on a dealer lot used. And I measure the gap between put it up for sale today at auction and what dealers are asking for it on the lot. And the gap isn't as big as it was 10 years ago. So that's what people.
They just, it takes them by surprise. Now I say that we may get to that same gap. It could well happen here, because I think we're going to keep readjusting the rest of 24, definitely into 25. But structurally, there's a couple of differences versus 10 years ago that are making this used equipment market turn. The rate of turn is astronomically faster than it was 10 years ago, which I think has the potential to make the downturn shorter.
Vance Crowe (29:14.307)
that's fascinating because there's so much more churn going over so the pricing matches up with the rest of the market faster.
Machinery Pete (29:22.511)
Well, when I say turn, so 10 years ago, we have to pull back here again. We all, again, just look at our phones and that's all we think about today. Well, let's just stop. Let's rewind this and go back to 2014. And let's think about the realities with farm equipment dealers. So here's where your audience, your farm audience is gonna start going, yep, there were a lot more dealers 10 years ago. So the rate of consolidation in the farm equipment world was just breathtaking.
You know, 10 years ago, if you had four five stores, you know, you were a good sized dealer. Well, that's just, there's hardly any of those left. Now these dealers, you know, God bless them, they're 30, 40, 50, 60, 80 stores. When you are...
an organization of that scale, you're capitalized different than you were back when it was kind of a mon -pa. You had three, four stores. So back then when things, when the ag economy turned, like corn and beans fell in spring of 13, dealers had too much used inventory back then, just like they do now. But what I'm measuring is the raw number of one and two -year -old farm equipment.
pieces of equipment that have been taken to auction. And I've got 35 years of data. So what we're seeing right now through the month of August, the number of one and two year old farm equipment units sold at auction is up 98 % versus last year and up almost 500 % versus 10 years ago.
Now 10 years ago if you had four stores, if you were a dealer and you looked out on your lot and you're like, dang, we got 35 too many combines, you couldn't take them to auction and sell them all because you'd have been out of business. You just had to sit tight and hope and wait. And now that's different. Now dealers here the last 18, well 12 months, 12 months going on 14, they've been super aggressive.
Machinery Pete (31:13.647)
and they look out and they go, we've got 70 stores, we've got to move this stuff. So they take it out to auction and it's moving. So this is the tricky part. Now if you're a farmer and you think back through your career or your dad or your grandpa's career, your uncle, the wisdom was when things got tight as it pertains to equipment, just tighten your belt, stay with what you got. There'll be deals all over the place.
and just hang in there. Now there are better deals now for sure, but you should not be thinking that it's going to drag on as long because this rate of turn is just astronomically quicker now, which is a good thing if you're selling new equipment, if you're John Deere Case, class, whoever, Aco, because the used stuff is moving out quicker. To me, the farm equipment space has become more like the automobile space.
So what's happened with the dealers is one piece of it. The other piece is the online bidding piece. And that was because of the pandemic. So we'd already had online bidding for 15, 20 years. But when the pandemic shut everything, and this is why I love compiling auction prices, because literally, Vance, it took about four days. And I went, whoa.
Auction prices are shooting up. There's no corn and beans haven't gone up. Why are auction prices going up around North America? And it was because everything went online and we live on these phones and farmers are competitive people. And like I said, auctions are emotional events. And now when you're bidding on that piece of equipment, no one is seeing me bid on it. They're not going to talk about it in church or at the coffee shop.
and you get your hooks on something, I want that skid steer. The inclination to click the bid button one more time is just through the roof. once we train the farm audience on this, now there's never be any going back. So that helps lift pricing and it also widen your buying pool. So now guys in Alabama don't blink about clicking a button to buy something in Saskatchewan. They just don't.
Machinery Pete (33:30.839)
And that makes the whole thing move faster.
Vance Crowe (33:33.236)
Well, that was a fascinating lesson on the update on what's going on in the ag auction market. We got to leave it there because we've got one more section to complete, which is the worthy adversaries. This is where I ask my guest, Machinery Pete, who is somebody on social media that you respect but that you don't agree with?
Machinery Pete (33:54.721)
Well, here's where my Minnesota -ness might kick in Vance. On the one hand, I guess I'm fortunate I don't have people coming at me negatively. Like, hey, machine repeat, you're full of beans because it's database. So you don't have to like the data, but data is data. That's why we present it. The other piece is that
I I completely understand the segment, what you're doing, and it is great to widen our field of vision, no question. I've sort of rolled by the, if you don't got something nice to say, just keep your yap shut. So that's me personally. Now there's of course folks on social that I don't agree with. I like paying attention to what they're saying.
Vance Crowe (34:36.737)
haha
Machinery Pete (34:48.909)
What I just am growing increasingly weary of is the fighting -ness of it. I'm done with that. I don't have time for that. So if someone has a hot take on something...
Well, even that term hot take, it's like, this will go crazy on social media. I don't give a rip about that stuff. People are building their following that way, and it's like, that's not, I've posted every day on social media since the first week of August in 2009. It's like 80 -some thousand posts. And I'm not doing it for clicks. I'm just presenting content that I think is going to be interesting or helpful.
So like I say, I try actively to steer clear of, know, I don't agree with that and get all worked up. That's just not, I don't have, I just don't have time for that. Sorry if that doesn't fit nicely into the cubicle.
Vance Crowe (35:46.89)
No, this is the joy of doing the Ag Tribes Report, right? All of Ag is made up of all kinds of different groups of people, different ways of thinking. And if you don't find out that there are people out there that are on social media that couldn't care less about people getting hot about things, then you would just think, well, everybody I see in Ag does get hot about things. So I think it's an important contribution and I'm glad you shared it.
That is going to do it for the Ag Tribes Report. I want to thank Machine and Repeat so much for coming on. And I also want to thank our sponsors, farmtest .ag, where they allow you to test your farm fields for different products that you're using so you don't have to rely on the marketing companies. You can find out more about them at farmtest .ag. And Legacy Interviews, where we record individuals and couples sharing their life stories.
so that future generations have the opportunity to know their family stories. So as we head out, machine repeat, if people wanted to know more about your data and about what you're learning on farm auctions, where can they find you?
Machinery Pete (36:51.375)
Just Machine Repeat, any platform or Google it. Our website is machinerepeat .com. I got to give you a shout out Vance. Legacy Interviews, your sponsor. I can't, I 1 million percent advocate for that, what you're doing there. And I've been telling our farm audience, I try to blog every Thanksgiving to record your grandpa and grandma and uncle.
get them in voice, because you're going to want to hear that voice. So hats off to what Legacy Interview is doing and sponsoring your great show. that's, like I say, that's so, so needed.
Vance Crowe (37:25.58)
Well, thank you so much for saying that. It's been a pleasure to have found that company and to have done it. And so to have it sponsor the Ag Tribes Report and have it resonate with you really means a lot to me. So that's gonna do it. We'll be back next week with another guest co -host. And as always, feel free to disagree.
Welcome to the Ag Tribes Report. I'm your host, Vance Crowe. Each week I bring a co -host that represents the perspective of one of the many Ag Tribes that collectively make up U .S. and Canadian agriculture. This week I'm joined by Greg Peterson, aka Machinery Pete, the founder of a marketplace for buyers and sellers of used farm equipment, offering farmers a vast selection of equipment listings in one place with a search tool that makes it easy and fast to find relevant equipment.
Machinery Pete, welcome to the Ag Tribes Report.
Machinery Pete (00:44.495)
Hey, honor to be here, Vance. Thanks for the invitation.
Vance Crowe (00:48.596)
Today, we're gonna be covering how the farm aid that's going to be offered by lawmakers possibly, we're gonna go through how grain markets might be impacted if the US does end up putting tariffs on like they're claiming they're just about to do. And we're gonna talk about the DJI agricultural drones that may be banned for suspicion that they could be used by the Chinese government for nefarious purposes.
We're going to get to all of that and we'll also discuss the Bitcoin land price report. Pete's worthy adversaries and what is one thing he believes that almost nobody he knows agrees with him on. So to kick it off right off the beginning, we're going to start with farm policy news with a headline that is lawmakers considered farm aid as farm bill remains stalled. So AgriPulse's Phil Brashear reported on Monday that a senior Republican on the Senate Appropriations Committee
said that lawmakers are considering attaching a package of farm income support to a farm bill extension that could get enacted at the end of the year. So instead of passing the farm bill, what they're talking about doing is actually just putting a rider on there that would potentially send money directly to farmers. Senator Stabenow recognizes that farmers can't wait for another extension. And so all the talk is going, how can we make sure that farmers are staying afloat?
when there has been a trade deficit of 30 billion this year and 42 .5 billion is expected in 2025. So machinery prices are going down, supply of grains is really high. What do you think about the government doing an end run around the reason to get the farm bill done to begin with, which is to get farmers money? What do you think about their plans here?
Machinery Pete (02:37.773)
Well, unfortunately, it seems like par for the course with our political situation here of the last number of years. You know, I've always taken a little hope, Fanson, that at least it seemed like it to a much higher degree agriculture has been the one area where maybe both sides can kind of work together. But what you described there, that kind of tack on extension, apparently that's become more of a
you know, kind of the par for the course, you know, if that's to the extent that's not addressing the key issues that need to be addressed in the farm bill, that's, you know, very unfortunate.
Vance Crowe (03:14.038)
Yeah, I mean, it's clear that even when they were getting excited this summer, like, it looks like we're making progress on the farm bill. I don't think anybody thought that that was going to happen until after this presidential election. But the big challenge is it's kind of hard to explain to all of Americans that are suffering, that have high prices and their input costs are high as well, how it's logical or fair that landowners that are sitting out in the countryside deserve to have payments.
What do you think, how will this go with regular consumers out in the world that watch farmers get checks like this?
Machinery Pete (03:48.333)
Well, people still like to eat. That's one thing from a data standpoint that I guess I monitor every day. no, again, it's interesting. I've been monitoring our market farm machinery values and trends for three and a half decades now.
It's interesting as it occurs to me, tend, you know, we're drifting farther away from the farm. So folks that live in the cities, when I was coming up, it used to be, well, my dad was a farmer, my uncle. Now that's maybe moved to the second to third gen. And as that happens, and of course our world has changed greatly with social media and the internet, there's a disconnect there for sure. But even so, I still think that that poll,
reality of what farmers need to survive, there's still a high level of care there, as there should be politically and from people hopefully understanding the business end, which is very difficult for non -ag folks to understand the business of farming and government involvement. no, guess I'm hopeful there that it won't go.
further sideways with how people think about farming and government support.
Vance Crowe (05:10.199)
Yeah, I think that you're exactly right about the number of people that used to be connected with ag. It's just every single year goes lower and lower, whereas it used to be my uncle or somebody you were connected with and now we have less and less people. And I think a lot of that has to do with hyper specialization that comes in ag. Even if you know somebody that's related to ag, people don't always make that connection because it's not the picture that they have in their minds of a farmer raising.
pigs and cows and raising crops and having the horses to raise those crops. there's a, it's just the people that are working in ag don't always get associated with being a farmer and yet they're still doing ag related work.
Machinery Pete (05:50.787)
Yeah, think, the, you know, one thing that I think, just again, I'm thinking back over the three and a half decades I've been doing this, but I think that the non -AG folks, well, I don't know, it's just maybe all the resources out there to get information,
Hopefully understanding just even a little bit better the risk involved for production agriculture, whether it's beef or corn or beans, wheat, whatever, that that risk is just, mean, to the degree that they just can't fathom unless they start to read a little bit about it. And then it's like, yeah, that's obviously we've, this is not just like any industry. So.
You know, like I said, people like to eat. I don't think that'll ever change.
Vance Crowe (06:40.921)
All right, well, let's move on to headline two because actually this week all the headlines seem to be kind of going in the same direction. This comes from Joe Valaklavic from the grain markets and other stuff. He has a daily podcast. It's really exceptional talking about different markets. And he brought up the subject, will US tariffs decimate the commodity trade with China? So it's been in the news for months and months. The Biden administration is planning on adding tariffs
on China. Back in May, the White House put out a statement saying, American workers and businesses can out -compete anyone as long as they have fair competition. But for too long, China's government has used unfair non -market practices, forced technology transfer and intellectual property theft that has made them have control of 70 to 90 % of global production for critical inputs necessary for our technological infrastructure, things like energy and healthcare.
Well, that seemed like just something they were putting out there as a threat, but as it turns out, not only have they kept all of the tariffs that Trump put on, or almost all of them, but now starting on, I believe, September 27th, they are planning on putting a 100 % tariff on EVs, 50 % on solar cells, 25 % on steel, aluminum, and other key metals. When Canada did this, it turns out that, put some tariffs on China.
The Chinese just stopped buying canola seed and the oils associated with it and there was a market crash around canola. So machine repeat, what do you think? How will tariffs on these sorts of solar, EV stuff impact the American farmer?
Machinery Pete (08:23.629)
Well, know, American farmer would prefer to, you know, produce the best product in the world and sell it for a fair price to anyone in the world. And I think on the one hand, you know, the amazing work of like,
American Soybean Association back over the decades longer than I've been doing what I do to build these markets whether it's China or other markets hugely hugely valuable But you know the world has changed and I like you said I mean the left of the aisle politically now has come around to see value in tariffs to protect industries So, you know, it puts the farmer in a tough spot
But like I said before, even the Chinese, as far as I can tell, they still like to eat. the options, if you're not getting your soybeans from here, yes, you can shift it around. it's just, we all want...
more fluid, efficient markets. And I think farmers are just, you know, they're used to this now. It's been a number of years. So I did read, I don't know if it was Wall Street Journal or something about that EV issue you brought up, the Chinese, and I don't know, frankly, much at all about EVs, but I just read that their product was very, very good.
But the government was subsidizing it to such a level that it scared the bejesus out of Detroit over here. Like, we can't deal with that. So it is interesting to see the government be pretty quick to these issues to help our industries, our workers, again, against unfair competition. And one last thing on China. Again, I'm old.
Machinery Pete (10:09.743)
pushing 60 here, but as China became China, even in my sector that I do report on used farm equipment, you can go back 20 years to 2004 and we saw a spike in used farm equipment values. And the reason for that spike was because China's growth.
back 20 years ago, immense huge growth, their need and appetite for steel. So that was beginning to affect cost of new grain carts and grain trailers. So the used ones that I report on, they were just going through the roof. So the growth of China has been huge there, but in US corporations wanted a piece of that pie with all the rising cost of living with China over there. I personally was frustrated
frustrated all those years by, know, because China was pretty, very transparent. They were like, okay, you can do business here, but we get access to your intel. And I was like, well, why would you do business that way? And as a board of a corporation or the management of those corporations, yeah, you want to sell all that stuff, but that's not a good long -term business play to give away your secrets. Just say no.
Is that naive for me to say that? I don't know, but why does it have to be a government protecting? Corporations should act in their own best long -term interests too. But then again, you've got bonuses set up for management people, and they need that Asian market, that Chinese market to grow, hit.
You have to dive in really deep there and see what are the incentives for the people managing these companies. And I don't think that gets talked about enough.
Vance Crowe (11:57.09)
I am completely with you on that, that we need our companies that are from the United States to really be thinking about themselves as US companies. When Monsanto went to sell to Bayer, there was so much pressure around them becoming a monopoly that these countries all had to approve the sale. Otherwise, you'd have to have two separate companies in Russia where instead of them being merged together.
And so what these countries did is they said, we'll let you do that as long as you hand over your technology on how you did those GMOs or you build a laboratory here and start doing some of your scientific research here. So the Monsanto, which was a national treasure in terms of innovation, know, their seed ownership, all of the technology that they built, they handed it over in order to make that merger happen. And we'll never get that technological advantage back. That's something that's gone forever.
Machinery Pete (12:53.315)
Yeah, again, like I say, look at the incentives. I live in Minnesota here, grew up here, and our state is pretty, you know, it's a liberal state. But the Daily Newspaper for years, it's been interesting. They have a CEO pay watch, which they just report on, you know.
across all types of industries, ag and every other industry. And you know, our culture, we're at this point where, you know, and we are capitalistic and believe me, I've built my business for 35 years, I get at risk and reward. That's farming, that's life. But, you know, when some of the management, you know, is incentivized with bonuses or stock options or whatever, I mean, to a level that's like, whoa.
you know, does that, how does that affect decisions they make in the short term for their, whatever corporation it is. well we'll dance with those folks because we're going to sell a lot more. I mean, so that gets to something that frustrates me. And I try not to be a grouchy old gray hair guy, but you know, there's longterm and there's short term. We've discounted longterm.
for too long, whether it's politically or business or personally. And we live in a world that's like short term, just boom, right now that's all people can see. And that's not right. And when you over -focus on the short term, things are gonna get gumbled up long term and that ain't good for anybody, in my opinion.
Vance Crowe (14:28.829)
Yeah, I think that that's at the very core of life is balancing what do you need to do right now and how can you be thinking about the future? And if you are so focused on what's going on today and you sell out everything, it's a bad gig. It's not a good way to build a nation.
Machinery Pete (14:46.197)
I don't think so either.
Vance Crowe (14:49.051)
All right, moving on to our third and final headline. This one comes from dronelife .com. DJI agricultural drones, maybe getting banned? The agricultural drones that have been starting to be used for things like fertilizer applications or pesticides are coming under question as Congress members send a letter to the USDA and CISA, C -I -S -A, that they have national security concerns.
about the way these drones are potentially either being operated, how much information they're sending back to China about our fields, and could they be used in some sort of attack against American infrastructure? Now, this might've seemed absurd just a week ago, but when you consider what was done with those tiny little pagers where their batteries were laced with some explosives,
All of sudden you took something that seemed like a regular piece of equipment in people's pockets and you turned it into a bomb. So Greg, what do you think? Is this questioning DJI agricultural drones, is this just protectionism for US drones, a real security threat or something else going on here?
Machinery Pete (15:59.779)
Well, I'm with you Vance on the our eyes being collectively opened here this past week by the pager issue and in with Israel and Lebanon there and I mean it's a different world and I think in a country, know, of course the the the fear of Chinese growing influence and control is is valid and obviously very, you know, legitimate. So drones are.
becoming an ever more important piece of every industry. We chatted a little bit before we went on air. I've been...
advocating for the use of drones to help buy and use farm machinery for a decade. And that doesn't seem to make sense. But I remember a decade ago thinking, these drones are going to change everything. And now, obviously, with spraying these big, huge drones, we're all for the efficiency they can bring, as it's difficult to find people to help on the farms. But yeah, technologically, I guess whatever concerns have to be addressed there.
Vance Crowe (17:04.925)
You know, if I could interrupt, I'd actually be interested in hearing your state of the drone world right now. The last time I checked in with drones, there were people flying them to be able to map their fields, but how sophisticated have they become?
Machinery Pete (17:17.539)
Well, to me they've gone from just kind of a novelty, like, that's cool that someone could fly a drone over my farm and almost like a vanity thing. Almost like the old days on farm country where you'd see them now, you'd go into a farmhouse and there's a picture, a flyover picture. So these companies that would fly airplanes and they'd say, hey, for whatever amount of money, we'll give you this cool airplane shot of your farm.
That's, think, how people perceive drones initially. And my take was just the opposite. I was like, this is a tool. So in my world, again, which is a specific, know, compiling auction prices, what is an asset, a piece of equipment worth? It might be a one -year -old combine, sells for 600 ,000, might be a 80 -year -old antique tractor, but.
When you're talking about people buying and selling things, there's emotion involved. We're human beings. And that's why the auction method of selling has been around for over a couple centuries, and it's vital and growing is because it's emotional. So when you're looking at selling something, to me drones were this.
new frontier. I told people 10 years ago, if I were a farm equipment dealer, I would hire a 21 year old kid and say, guess what, you're a drone guy or gal. And you go to these 20 key customers of ours and you film them planting and harvesting. To give them the video, which is cool, like, hey,
customer, Bob, here you go, thanks for being a customer of our dealership. But more so when that guy wanted to trade in that combine and tractor, now it's not just, you might, you go to our website now, there might be 400 John Deere S670 combines for sale, but there's only one that's Vans's.
Machinery Pete (19:00.815)
And if you have video of that thing on a beautiful day in whatever, Georgia, Minnesota, South Dakota rolling through, you know, doing its thing, guess what? That S670 has now become more attractive than all the other ones. So to me, it was just silly not to think about how to utilize drones to help sell things. And now, of course, again, on the spraying front, unbelievable things they can do there. So I'm just, you know, a fan of the advancing technology as long as, again,
kept between the buoys and there's not any nefarious, you know, intel being shared with folks that it shouldn't be shared with.
Vance Crowe (19:38.251)
Well, I think there's gonna be a lot more to come on this because it seems like a really important technology as you said, as labor becomes more and more complicated. But at the same time, like now that we know what somebody can do, I think our imaginations were just blown wide open for how dangerous trusting another country with your technology can be.
Machinery Pete (20:00.077)
Yeah, and not just other countries, but the businesses that you choose to deal with. What are they doing with your data? And again, in farm country, these awareness, these concerns have been obviously there with the data piece and farm equipment. And yeah, they just seem to keep growing and sprouting in different directions monthly here.
Vance Crowe (20:24.247)
Well, that's gonna do it for the news headlines part of the show. If you are interested in a story that you think we should be covering on this, just DM me on x at Vance Crow. Now onto the Bitcoin land price report. This is where we try to find a way to figure out what is going on with the price of land when we detach it from the US dollar whose value goes up and down on the whims of the federal reserve. So,
Machinery Pete, what is an acre of good quality farm ground going for in your area?
Machinery Pete (21:01.615)
Well, I live in Southeast Minnesota, Vance and Rochester, which we're very growing mini metro area here. We're about 130 ,000 people. right in my local area on the edges of town, which had been farm ground forever, those values are for developers have been going crazy. As you drift out into farm country, know, land values are still been very high. Obviously so many factors. I've tried to anecdotally keep tabs on it these last 35 years, because we work with 1100 auctioneers.
years, we're compiling the machinery values, but land values, around here you might see anywhere from like 9 ,500 to 14 ,500, just again depending on the ground. And generally speaking, what I've seen is that land values have held stubbornly high. I mean in ag country they've been pretty much coming off all time highs. They're coming down a little, but not as much as people maybe would hope.
or seem reasonable with the tightening in the ag economy.
We chatted about it a little bit for Vance, but to me it makes sense because we see the same thing with good use of machinery, maybe not falling as much as people think it would have. But to me what this signals is there's a lot of old money out there in farm country. Now I don't mean to be disrespectful when I say old because I'm pushing 60 myself, but farmers are as smart as operators, businessmen, women as you'll ever see to survive through the decades, the ups and downs. They're very smart.
good years. So now when that piece of land that's just the right piece of land comes up, again you got one crack at it and it's not just you that wants it, it's five, six. So that's why I think we see it. Again the auction method doesn't matter what we think a piece of land is worth or what a tractor is worth. You put it up for sale, we all know when that gavel falls that that's what it's worth on that day.
Vance Crowe (23:00.299)
Well, I find that land prices are one of those things that's really difficult because now with people knowing that their money can be inflated, they try and find a place where they can put money where it won't lose value. And one of the scarcest assets in the world is high quality farmland. And I like to make the comparison with Bitcoin. I don't know how comfortable you are with it, but if we were to, are you comfortable with it? Do you know very much about it?
Machinery Pete (23:22.575)
I am not a Bitcoin expert Vance. I will freely admit.
Vance Crowe (23:27.546)
So as it turns out, if we kind of average what you were saying about the prices and we say it's about $12 ,000, then that would mean that it's about .1898 bitcoins per acre. The Bitcoin price as of press time was $63 ,224. So in other words, one Bitcoin would buy you about 5 .2 acres of farmland around where you're at. So I just like to do that because I think it's a way to detach our
pricing of land away from just US dollars and give it another way to tell is it getting more expensive? Is it getting cheaper? Because it's hard to tell when you when you're basing it against an inflating currency.
Machinery Pete (24:09.423)
Well, inflation, that's an interesting topic because obviously it's kind of the source reporting on used equipment values and occasionally on land values we report. And it's not uncommon for people then on social media, which we're pushing 400 ,000 followers out there across platforms to get discussions going. And people will say, well, that tractor, that 15 -year -old tractor,
you're not accounting for inflation on that.
I understand when that comes up, but that's why I've always wanted to compile not one data point, whether it's land or machine. It's like I want to compile every data point. So to then give you an average, a high and a low in US dollars, and however you want or anyone wants to consider inflation over time, I do find the inflation argument
As you look back through the decades, though, we've definitely seen periods of deflation and severe deflation in our sector with used farm machinery, whereas the U .S. economy, no. So then it's like, how do you make the correlation? You can't pick and choose and say, inflation is the answer now, but it well, wasn't 10 years ago because of X. It's just...
you put it up for sale it brought X whether that's in Bitcoin or US dollars you have to have a continuum and that's what I've tried to provide for 35 years a continuum at least so you know people you know whether you're buying or selling you go okay well this is the range I'm looking at.
Vance Crowe (25:53.466)
love it. I love the perspective of nobody brings up the deflation that happens or the downturn in pricing at least. Now on to the Peter Thiel paradox. This is where I ask my guest, what is one thing that you believe that almost nobody in your tribe agrees with you on?
Machinery Pete (26:11.855)
Well, you know, right now I would say Vance, would probably be because the people in farm country are looking to me now, they're, obviously 2024 things are different. We're coming off of, you know, corn and beans were at a different place a year ago, two years ago, three years ago. And now things are changing. I call it the year of recalibrating, you know, used equipment values. And what people are thinking is that this is the biggest drop ever.
that they've ever seen. And it really isn't. And again, think a part of this is our culturally our
however you describe it, but everyone is so short -term. All we see is like today and yesterday.
And what people are forgetting is that 10 years ago in late 13, 14, 15, that was the biggest drop in used equipment values I've ever seen. And again, that's not my opinion. That's what our data showed. Two years in a row in 14 and 15, large late model farm equipment fell 20 to 25 % year over year, two years in a row. And when you look at our auction price data right now, for example, you could look at a John Deere 8R410 tractor, a couple years old, big horse. Average auction price so far this year is down
11 .5 percent and again ten years ago it was more like 20 percent. So when I share that people the reason they're it's disconnected is what in their heads people are comparing to is the is the list price new which has skyrocketed. I mean the price of new farm equipment I always used to figure it was going up four percent a year and when we hit the supply chain mess on the
Machinery Pete (27:55.919)
middle back end of COVID, I mean that became unhinged. So the price of new everything once just went through the roofs and farm equipment was maybe at the fore. So and now those costs of new have they haven't come down yet. So if you're sitting there looking at a new tractor 800 ,000 and then machinery repeats reporting at auction of a John Deere X9 -1100 combine that just dipped under 400, yes that is a huge drop.
But they're comparing it to the price of new, not to the advertised price on a dealer lot used. And I measure the gap between put it up for sale today at auction and what dealers are asking for it on the lot. And the gap isn't as big as it was 10 years ago. So that's what people.
They just, it takes them by surprise. Now I say that we may get to that same gap. It could well happen here, because I think we're going to keep readjusting the rest of 24, definitely into 25. But structurally, there's a couple of differences versus 10 years ago that are making this used equipment market turn. The rate of turn is astronomically faster than it was 10 years ago, which I think has the potential to make the downturn shorter.
Vance Crowe (29:14.307)
that's fascinating because there's so much more churn going over so the pricing matches up with the rest of the market faster.
Machinery Pete (29:22.511)
Well, when I say turn, so 10 years ago, we have to pull back here again. We all, again, just look at our phones and that's all we think about today. Well, let's just stop. Let's rewind this and go back to 2014. And let's think about the realities with farm equipment dealers. So here's where your audience, your farm audience is gonna start going, yep, there were a lot more dealers 10 years ago. So the rate of consolidation in the farm equipment world was just breathtaking.
You know, 10 years ago, if you had four five stores, you know, you were a good sized dealer. Well, that's just, there's hardly any of those left. Now these dealers, you know, God bless them, they're 30, 40, 50, 60, 80 stores. When you are...
an organization of that scale, you're capitalized different than you were back when it was kind of a mon -pa. You had three, four stores. So back then when things, when the ag economy turned, like corn and beans fell in spring of 13, dealers had too much used inventory back then, just like they do now. But what I'm measuring is the raw number of one and two -year -old farm equipment.
pieces of equipment that have been taken to auction. And I've got 35 years of data. So what we're seeing right now through the month of August, the number of one and two year old farm equipment units sold at auction is up 98 % versus last year and up almost 500 % versus 10 years ago.
Now 10 years ago if you had four stores, if you were a dealer and you looked out on your lot and you're like, dang, we got 35 too many combines, you couldn't take them to auction and sell them all because you'd have been out of business. You just had to sit tight and hope and wait. And now that's different. Now dealers here the last 18, well 12 months, 12 months going on 14, they've been super aggressive.
Machinery Pete (31:13.647)
and they look out and they go, we've got 70 stores, we've got to move this stuff. So they take it out to auction and it's moving. So this is the tricky part. Now if you're a farmer and you think back through your career or your dad or your grandpa's career, your uncle, the wisdom was when things got tight as it pertains to equipment, just tighten your belt, stay with what you got. There'll be deals all over the place.
and just hang in there. Now there are better deals now for sure, but you should not be thinking that it's going to drag on as long because this rate of turn is just astronomically quicker now, which is a good thing if you're selling new equipment, if you're John Deere Case, class, whoever, Aco, because the used stuff is moving out quicker. To me, the farm equipment space has become more like the automobile space.
So what's happened with the dealers is one piece of it. The other piece is the online bidding piece. And that was because of the pandemic. So we'd already had online bidding for 15, 20 years. But when the pandemic shut everything, and this is why I love compiling auction prices, because literally, Vance, it took about four days. And I went, whoa.
Auction prices are shooting up. There's no corn and beans haven't gone up. Why are auction prices going up around North America? And it was because everything went online and we live on these phones and farmers are competitive people. And like I said, auctions are emotional events. And now when you're bidding on that piece of equipment, no one is seeing me bid on it. They're not going to talk about it in church or at the coffee shop.
and you get your hooks on something, I want that skid steer. The inclination to click the bid button one more time is just through the roof. once we train the farm audience on this, now there's never be any going back. So that helps lift pricing and it also widen your buying pool. So now guys in Alabama don't blink about clicking a button to buy something in Saskatchewan. They just don't.
Machinery Pete (33:30.839)
And that makes the whole thing move faster.
Vance Crowe (33:33.236)
Well, that was a fascinating lesson on the update on what's going on in the ag auction market. We got to leave it there because we've got one more section to complete, which is the worthy adversaries. This is where I ask my guest, Machinery Pete, who is somebody on social media that you respect but that you don't agree with?
Machinery Pete (33:54.721)
Well, here's where my Minnesota -ness might kick in Vance. On the one hand, I guess I'm fortunate I don't have people coming at me negatively. Like, hey, machine repeat, you're full of beans because it's database. So you don't have to like the data, but data is data. That's why we present it. The other piece is that
I I completely understand the segment, what you're doing, and it is great to widen our field of vision, no question. I've sort of rolled by the, if you don't got something nice to say, just keep your yap shut. So that's me personally. Now there's of course folks on social that I don't agree with. I like paying attention to what they're saying.
Vance Crowe (34:36.737)
haha
Machinery Pete (34:48.909)
What I just am growing increasingly weary of is the fighting -ness of it. I'm done with that. I don't have time for that. So if someone has a hot take on something...
Well, even that term hot take, it's like, this will go crazy on social media. I don't give a rip about that stuff. People are building their following that way, and it's like, that's not, I've posted every day on social media since the first week of August in 2009. It's like 80 -some thousand posts. And I'm not doing it for clicks. I'm just presenting content that I think is going to be interesting or helpful.
So like I say, I try actively to steer clear of, know, I don't agree with that and get all worked up. That's just not, I don't have, I just don't have time for that. Sorry if that doesn't fit nicely into the cubicle.
Vance Crowe (35:46.89)
No, this is the joy of doing the Ag Tribes Report, right? All of Ag is made up of all kinds of different groups of people, different ways of thinking. And if you don't find out that there are people out there that are on social media that couldn't care less about people getting hot about things, then you would just think, well, everybody I see in Ag does get hot about things. So I think it's an important contribution and I'm glad you shared it.
That is going to do it for the Ag Tribes Report. I want to thank Machine and Repeat so much for coming on. And I also want to thank our sponsors, farmtest .ag, where they allow you to test your farm fields for different products that you're using so you don't have to rely on the marketing companies. You can find out more about them at farmtest .ag. And Legacy Interviews, where we record individuals and couples sharing their life stories.
so that future generations have the opportunity to know their family stories. So as we head out, machine repeat, if people wanted to know more about your data and about what you're learning on farm auctions, where can they find you?
Machinery Pete (36:51.375)
Just Machine Repeat, any platform or Google it. Our website is machinerepeat .com. I got to give you a shout out Vance. Legacy Interviews, your sponsor. I can't, I 1 million percent advocate for that, what you're doing there. And I've been telling our farm audience, I try to blog every Thanksgiving to record your grandpa and grandma and uncle.
get them in voice, because you're going to want to hear that voice. So hats off to what Legacy Interview is doing and sponsoring your great show. that's, like I say, that's so, so needed.
Vance Crowe (37:25.58)
Well, thank you so much for saying that. It's been a pleasure to have found that company and to have done it. And so to have it sponsor the Ag Tribes Report and have it resonate with you really means a lot to me. So that's gonna do it. We'll be back next week with another guest co -host. And as always, feel free to disagree.
