These are pictures on our tree and these pods they same to be only around the open bark area on the tree.* We are wondering if we should spray the tree and if so with what.* Out of the 3 pictures the last pictures I pushed on the pods and the brown/red*junk comes out.* Thanks for the help
Your magnolia has magnolia scale.* Unfortunately your tree has been very poorly pruned and opened it to insect pests.* If you only have these in the one area, I would suggest you wait until the end of August and spray with an organic horticultural oil such as Organocide which is made from sesame seeds.* Don't confuse it with Organicide which is made from petroleum.
If at all possible I would suggest you have a certified arborist take a look at your tree and prune it properly.* Don't have someone with a chainsaw and a pickup truck do this, but a certified arborist who knows how to make proper pruning cuts. Whoever pruned off the large branch didn't use the 3 cut method (undercut before pruning off the large branch) and when it came off it tore away the bark.* I also see another stub above it that wasn't pruned properly and there is a dead stub left so the tree can't heal over the cut properly.* If you look at this site it shows how to properly make pruning cuts.
This video shows how to remove a branch with the 3 cut method so the bark doesn't tear as happened to your tree.
Lots of pictures to look at here about how to make pruning cuts.
Your tree also appears to be suffering from chlorosis - yellowing of the leaves with green veins.* I'm not certain from the pictures I see, but it does appear to be a problem for the tree.* Chlorosis can be caused by the lack of different nutrients.* The best way to know what is the cause is to have a soil test done.* It usually costs about $15.00 from your local extension service.
Thank you for the all the help. I will keep you posted on what we find out.
Vic, you are very welcome!* If you have an arborist look at your tree, I'd love to know what they say.*