Iron melts at temperature of 1530 degrees Celsius. It is definitely possible to produce this kind of temperature using an appropriate propane torch, capable of burning sufficient amount of propane to generate the heat required to melt a steel or iron machete.
Process of melting will be faster if the flame of torch is applied directly to the iron machete. But it will not be possible to contain the molten metal. to solve this problem the machete can be kept in a suitable container such as a crucible and the flame of the torch can be applied directly to the machete or to the crucible. The amount of heat required will be higher when the melting is done by applying the heat to the crucible rather than directly to machete.
Most probably a pencil neck torch will not be able to produce enough heat to melt substantial amount of iron, such as a big steel machete. But it should be possible to melt at least a part of it, if the flame is directed at a single spot.