Good morning. My name is Sarah, and I'll be your conference operator today. At this time, I would like to welcome everyone to the AGCO Corporation 2013 Second Quarter Earnings Release and Conference Call. [Operator Instructions] Thank you. Mr. Peterson, you may begin your conference.

Thank you, Sarah. Good morning, and welcome to those of you joining us here on our second quarter earnings results call. We will be going over some slides this morning. You'll find those slides posted on our website at www.agcocorp.com on the Investors page. The non-GAAP measures that are used in the slide presentation are reconciled to GAAP measures in the last section of the presentation. We'll also be making some forward-looking statements this morning, including demand for our products and the economic and other factors that drive that demand, product development plans and timing of those plans, acquisition, expansion and modernization plans and our expectations with respect to the costs and benefits of those plans and timing of those benefits in our future revenue earnings and other financial metrics. We wish to caution you that these statements are predictions and that actual events may differ materially. We refer you to the periodic reports that we file from time to time with the Securities and Exchange Commission, including the company's Form 10-K for the year ended December 31, 2012. These documents discuss important factors that could cause the actual results to differ materially from those contained in our forward-looking statements. A replay of this call will be available on our corporate website. On the call with me this morning is Martin Richenhagen, our Chairman, President and Chief Executive Officer; and Andy Beck, our Senior Vice President and Chief Financial Officer. With that, Martin, please go ahead.

Thank you, Greg, and good morning to everyone with us on the call. Slide 3 summarizes our results for the second quarter and first 6 months of 2013. As you can see from this slide, we made significant progress in the second quarter towards both our growth and profitability improvement growth. Our record second quarter sales were 13% over the second quarter of 2012. We generated solid sales growth across all of our regions despite challenging conditions in certain markets. In addition, AGCO's focus on margin improvement produced operating margins over 10% in the second quarter. We are successfully increasing margins through purchasing actions, factory efficiency projects and new product development. Second quarter operating margins exceeded 15% in North America, were over 12% in Europe/Africa/Middle East and over 11% in South America. Sales growth and improved profitability produced record earnings in the second quarter of $2.15 per share. Performance against our working capital target is also on track, and we are positioned for another year of strong cash flow generation. As Andy Beck will discuss in more detail, we have increased both our earnings guidance and our forecast for free cash flow. I also want to emphasize that we are continuing to invest for the long term. Our product development expenses will be nearly up 15% this year and our capital expenditure program is expected to exceed $400 million for 2013. AGCO's tractor and combine production volumes are illustrated on Slide 4. Second quarter 2013 production was up about 7% compared to the second quarter of 2012. The production growth was strongest in South America, with more modest growth in our North American and European factories. I'm also very pleased to tell you that we achieved record production volumes at our new Fendt assembly facility in Germany in the second…

Thank you, Martin, and good morning to everyone. AGCO's regional net sales performance for the second quarter and first half of 2013 is outlined on Slide 6. Currency translation had a negative impact of approximately 0.5% on AGCO's consolidated net sales in the second quarter of 2013 compared to the same period in 2012. The Europe/Africa/Middle East segment reported net sales growth of approximately 12%, excluding the impact of currency translation during the second quarter of 2013 compared to the second quarter of 2012. Strong growth in France and Germany, largely enabled by Fendt's improved production capabilities, generated most of the increase. North American sales grew approximately 8% during the second quarter of 2013 compared to the same period in 2012. Sales increases experienced in the professional farming segment produced growth in sprayers, combines and high horsepower tractors. AGCO's second quarter 2013 net sales in South America grew about 28% from comparable 2012 levels, excluding currency translation impacts. Higher sales in Brazil and Argentina accounted for most of the increase. Net sales in our Asia/Pacific segment increased approximately 18% in the second quarter of 2013 compared to 2012, excluding the impact of currency. Growth in China and East Asia produced most of the increase. Parts sales were $382 million for the second quarter of 2013, an increase of approximately 7% compared to the same period of 2012, excluding currency. For the first 6 months of 2013, parts sales were $664 million, up approximately 1% compared to the same period in 2012, excluding the impact of currency translation. Slide 7 details AGCO's sales and margin performance. Gross margins improved about 60 basis points in the second quarter 2013 compared to the prior year period. Margins benefited from higher sales and production volumes, limited material inflation, pricing and cost reduction initiatives. Operating…

[Operator Instructions] Your first question comes from the line of Rob Wertheimer from Vertical Research.

Very, very strong margins in a lot of regions. I wanted to ask about EAME. And you probably, or at least I assume, you had a positive mix benefit from France and Germany being stronger and maybe had a drag from the continued ramp at Fendt. Are you able to quantify either of those? Is this sort of a normal margin or was it depressed or a little bit ahead of trend?

I would say that it's probably still a little depressed. We did still have some inefficiencies in our Fendt operations throughout the second quarter. That probably amounted to around $5 million or so but we also did have a much higher increase in sales in Fendt. So from a mix standpoint, that certainly offset that. From the rest of the business, you're right that France and Germany do provide some strong margins and also our combine sales were -- we had improved margins on the combines as well.

Will the Fendt start-up issues -- I guess, volumes are going up. Will they completely be rolled off in the back half?

Yes. Yes. Certainly, we're seeing our production levels be at really normal levels now. I think we indicated that the production was higher than ever in the second quarter and from a productivity standpoint, and we're reaching target levels now. So our second half should be what we would say normal operating business at this point. And as we compare our results to last year, that was when we had the start-up cost. So our margins will be much improved in EAME in the second half.

Exactly. And then if I can just do one last one on Fendt. I presume a lot of the strength you're seeing is share gain, it's -- I mean, maybe I'm not sure how strong the markets in Germany and France are, but are you seeing more share gains as you have more production capacity? Or is it larger farmer share are stronger?

In general is that Fendt, of course, is now also reaching out to new markets, and you can see an increased interest in Fendt, which includes also here in the U.S. So that means overall, that high-technology product, you could compare it with automotive, with cars. It's more and more attractive for farmers.

Your next question comes from the line of Jamie Cook with Crédit Suisse. Jamie L. Cook - Crédit Suisse AG, Research Division: Two questions. One, just on the pricing front, you took your forecast down modestly. Can you just talk about the drivers behind that, what region specifically and just on the -- your view on the competitive environment? And then I guess two, if you could talk about North America? One, you're assuming GSI gets better in the back half of the year. You're up this year after being down in the first half. Sort of if you could give a little more color on that. And then your margins on your core business were, I think, 12% or something like that, which is pretty strong. Can you talk about how much was sort of mix -- I mean how much was mix and then sort of the operational improvements as well?

Jamie, I'll start. You asked about pricing, and we did see kind of pricing move around. We originally -- I guess, last quarter, we're estimating about 2.5% pricing for the full year. Now we're saying somewhere between 2% and 2.5%. We saw...

We also need to find a place where to sandbag a little bit. Jamie L. Cook - Crédit Suisse AG, Research Division: I appreciate that, Martin.

Yes. So we faced a little more competitive pressure in Europe. So our pricing in Europe isn't going to be quite as rich as we thought. But -- so we saw a little pressure there. Otherwise, the pricing is similar in most of the other regions. You asked about GSI sales, the change in our forecast. A lot of the -- so we have improved. We've seen improvement in the U.S. in terms of some grain storage, as well as protein -- more in the grain storage side in the U.S. And then internationally, we've seen some improvement in Asia, Asia/Pacific region, especially in China for the protein. And the Asia sales are going to show up later this year, so there's a little bit of a timing associated with that. So I think -- does that cover most of your questions? What else did I miss? Jamie L. Cook - Crédit Suisse AG, Research Division: The margins on the core business. And then also, Martin, I wanted to say I think it's the...

Right. So our North American margins in the U.S., so we did benefit, as Andy mentioned, from some nice mix. We sold especially sprayers and high horsepower tractors helped us, and that's just a function of the high income levels for the row crop farmers. So that was the biggest deal. But we also, as Martin mentioned, too, the -- our purchasing initiatives helped us not just in North America but globally and some of the improvements we've made in our factories also helped. Jamie L. Cook - Crédit Suisse AG, Research Division: And then, Martin, just one quick question. I think it's the first quarter where you've exceeded sort of your longer-term target with margin, 10.7% margin. Can you just talk about -- does this make you more bullish on your longer-term margin assumptions? Could we see a change? Just your thoughts around that.

Jamie, on a very confidential note, just between you and I, when we launched AGCO's vision in 2005, and we still use the same one, it's high-tech solutions for professional farmers feeding the world. It was not high horsepower tractors for big American farmers. So that means in our vision, we already assumed that we would invest, if possible, in related areas. And therefore, GSI is a very meaningful acquisition for us, helping us a lot. And you will see that more in the future also in emerging markets. So when you see what the demand is -- and it's countercyclical, as Andy Beck already mentioned. So now you can ask me or you could ask me what does that vision mean? Can you be a little bit more concrete? Can you put it in numbers? And I would call that my personal, private, internal ambition, which I shared with my board last week when we were at Wall Street for our board meeting. And I think my personal ambition is $15 billion in sales. It's 12% margin and it's $10 earnings per share. What I do not want to do is tell you when that will happen and how because then I would have to report every quarter how we are making progress. But I think we're on a great path and we are on a -- we have a great growth strategy. And you will like AGCO more in the future, and you saw what we did in the past. So that means the fact that we could achieve quite some improvements over the last years makes me a little bit more confident that we also can do more in the future. And so my focus is pretty much on being #1 in margins more than being #1 in revenues. That was just between you and I.

Your next question comes from the line of Stephen Volkman with Jefferies.

Martin, I know you didn't want to tell Jamie, but just between you and me, what's that time frame on that $15 billion in revenue?

My vision is 3 years. But that is again very confidential.

While we're at it, what's the other -- the list of the other things you're sandbagging on? Actually if I can ask a different type of question, I guess obviously, people are still sort of concerned about where we are in the cycle here. So I'm wondering if you have any -- if you're hearing anything from your dealers or your customers regarding order books and so forth? Anything you could give us color-wise. We all obviously see the macro stuff, but what are you seeing vis–à–vis kind of the next several quarters of demand levels?

Yes. Well, first of all I think I'm not as concerned. People talk about farm bills in Europe and things like that. But it's nothing new for the European farmers. I think the big professional guys know how to handle it. And it could even generate some additional demand for smaller tractors in the small tractor -- for small farm segment. So overall, I'm pretty -- first of all, order books are still pretty strong. I'm pretty optimistic that also next year will be a good year. It's too early to talk about it. So everybody try to find out what's going on next year. We start at planning in October, and we will come to Wall Street in December and talk about it more in detail. But I think overall, the advantage of AGCO versus some of our other competitors is our very balanced global footprint. So that means due to the fact that we are so strong in South America this year, we can benefit from it. I personally believe that Europe will come back because some of the issues in Europe are very much related to bad weather conditions. I've been in -- I will be in England next week. So when you go to Ireland, Scotland, England, so they were really hit by a very rainy and cold spring. And so that also did hit them financially. Same a little bit for the Nordic countries. And then in Eastern Europe, some of the retail finance programs come in a little late and people, farmers, are sitting there and waiting before they place orders. So that means for the future, I would expect Europe to be up. I think that farm income in America, for American farmers, is very strong. So you recently certainly heard about a certain input cost going down in the area of fertilizers and also pesticides and chemicals. So therefore, what matters is not only commodity prices, which are still on a pretty high level, but also what [ph] factors in our lower cost for inputs. So that means overall, I think farmers will have another very good year in 2014, to me looks pretty stable. And you know, for me, I always make the statement that the farm business and our industry is not cyclical anymore. Because I'm in that business for more than 20 years, and I wasn't facing any cycle. And when the financial crisis came in, we did do much better than anybody else. So therefore, when you talk about cycles, rather talk to the car guys or the truck industry or people like that. Or maybe ski gear, they are very cyclical because they sell mainly in winter.

All right, maybe that's seasonal. But maybe a quick follow-up for Andy. How should we think about -- assuming maybe someday there might be some sort of a downturn. You guys have made a lot of margin improvement progress, but how should we think about decremental? How much of this is volume related? And how much can you kind of keep above and beyond volume?

Well, what you look at in terms of incremental margin is our incremental margins on sales, probably on a gross margin basis is in 25% to 30%. That's consistent, what we've seen over the last years. So most of the margin improvement that we're looking -- we're achieving is on productivity in our plants, it's on reducing the cost of our products through changing suppliers or renegotiating with suppliers. So none of this is volume related. There is obviously a volume aspect to our margins, our overheads run 10% to 15% of our cost of sales, and there's an element of that which is fixed. And so that's going to impact margins if our production is down. But almost all of this improvement that we're achieving is on the initiatives that we've driven internally.

Which also means that our breakeven point is much lower than it has been some years ago.

Your next question comes from the line of Andy Kaplowitz with Barclays.

So Martin or Andy, maybe if I can press you a little bit on the order book in terms of quantifying sort of what's going on. You guys are big in sprayers. Have you -- do you have an early order program here in North America? And maybe if you can give us any color on that, what's going on and more specifically in order books would be helpful.

Sure. On sprayers, I don't have any specifics. I would believe that the order program would probably be coming on a little later than now. So I don't think we would have any -- a new information there. But in general, our orders in North America are very flat with the end of last year, but up significantly over where we were a year ago. We have very good visibility in North America, about 4 to 5 months, which is above average for us. So we're feeling good about our order board as it relates to the balance of this year. Orders in South America are also up significantly and a little down in Europe compared to the end of the year 2012.

Okay, that's helpful. And then maybe specifically on Brazil, maybe you could talk about the sustainability of this year's upturn. I mean, I know, Martin, probably what you're going to say. But how much of this do you think is just low financing rates? And then politically, it seems pretty unstable down there now compared to maybe 6 months ago. Can that affect the ag market there as we go into next year?

The political turmoil is mainly in the big cities. And on the countryside, everything is unchanged and stable. So I would be very surprised if there would be any impact from those problems for our business. And then overall, as I said, I don't want to talk about 2014, but I recently talked to the guys in Brazil about next year. And I was thinking that preparing the budget discussion, they would be a little pessimistic and tell me that next year is more difficult or sales would go down, but they didn't.

Okay, that's interesting, Martin. Maybe if I could ask you about Argentina. Argentina has been a difficult country over the last year plus, but you did cite strength in Argentina in your release and on the call. So has it gotten easier to do business there? Is it just that you've been increasing your local content there and that's helping? What's going on in Argentina?

Yes. In Argentina, what's happening was the market was severely limited a year ago because of these import restrictions that were placed by the government. So we, along with our competition, were unable to get the proper amount of units into the market to fulfill demand. Because AGCO and the other competitors have taken steps to increase the local content, they have relaxed the import restrictions. So we're seeing a much more normal demand levels this year, and we're -- I think the market is up almost 100% at this point. So it's more about the loosening of the import restrictions, and that's getting us back to a normal market.

Andy, was that a pretty recent acceleration, like more in 2Q than 1Q? Or did it happen starting in the beginning of this year?

I think it's been throughout the first half.

Your next question comes from the line of Ann Duignan with JPMorgan. Ann P. Duignan - JP Morgan Chase & Co, Research Division: Most of my questions have been answered, so I'll stick with the South America. Your reported revenues, like FX was -- were up 28%, and that was significantly below the market. Martin, could you just talk a little bit about what's going on, particularly in Brazil in terms of market share, particularly in tractors, and what AGCO is doing to maybe stem the share losses and regain some share in that region?

I'm not sure whether we want to regain market share so much because what is happening is that in certain regions of Brazil, farmers are struggling, and that's mainly in Mato Grosso. And in Mato Grosso, you have a lot of farmers who suffer, who don’t make enough money, who go bankrupt. And so those are areas where we are not so much focused on market share, but some of our competitors saw it as an opportunity. So when you look into a market like Brazil, you have to basically look into profitability as much as into market share. So when you see -- when you look into retention rates, we are doing very, very well. So that means we don't lose existing customers to competition. And now the question is what do you plan in order to make sure that, that also doesn't happen in the future? We localize, we are in the process of localizing and not importing, localizing new, more advanced technologies in the country. I don't want to go into detail here because I think we have a pretty good competitive advantage, and I don't want to elaborate this strategy here over the phone. Ann P. Duignan - JP Morgan Chase & Co, Research Division: That's absolutely important, I think, for investors. And to follow-up with that, you bought a sugarcane harvesting company in Brazil not that long ago. Can you talk a little bit about the launch of those products and when those could be perhaps material?

Well, we sell already sugarcane harvesters because it was an existing factory. Of course, this is a kind of niche business. The volumes are rather small. The world market for self-propelled sugarcane harvesters is somewhere around to maybe 500, 600 units so -- and we have major share of 15%. What we are doing is we are basically improving the product and bring it up to our quality standards. And what we also like is that this business comes not only with the self-propelled sugarcane harvester but also other equipment. We basically -- sugarcane farmers need like planters, like transportation equipment and so on. So -- and therefore, also when you think about -- this is another element of our strategy for Brazil. We start or we try to broaden our full line offer. And we -- as you remember, we bought that sugarcane business. We invested into implements. We localized the self-propelled sprayer. We come in with a complete new generation of combine harvesters. So therefore, when you judge about our market participation, you need to also have in mind that it's getting broader and broader and all localized. Ann P. Duignan - JP Morgan Chase & Co, Research Division: Okay. The sprayer being localized would be important, I guess. And then just finally, a quick follow-up on GSI, the increased demand in the U.S. Any idea whether that's individual farmers? Or is it the processing customers?

I think it'd be both. There's still a lot of growth opportunities and a lot of demand on the on-farm storage. And so that's probably where it's a little more volatile. The demand with the processors is pretty regular in terms of their investments.

Your next question comes from the line of Steven Fisher with UBS.

Just coming back to Brazil, what's the timing of when the 2014 FINAME rates will be available? And how are you thinking about how the macro trends there should affect the rates? And then if the rates do end up going up materially, how do you think that would affect demand?

In terms of the FINAME rates for 2014, there has been no announcement yet and there's no specific timing or timetable. We obviously would like to get that information sooner rather than later, so farmers know what's going on and wouldn't either accelerate or delay their purchases. So from the standpoint of timing, I would say that we'd hope to see something probably early fourth quarter on what's going to happen. But there's no specific timetable. In terms of the impact, there's really -- in terms of expectations, there's no expectation that the rates are going to change materially. So we don't believe that, that will be an impact into next year's demand.

Okay. And then over to Europe, I mean, it seems like perhaps you produced ahead of where demand is or maybe in line. And I guess, can you discuss your thoughts and plans for production relative to demand in Europe going forward? I mean, it sounds like you're expecting Europe to come back around and grow next year. So does that mean we should expect to see increased production there as well?

Two things: One is we don't produce ahead of demand; and second, I still believe that Europe sales are not over yet because we have, at the end of the year, a very important farm show in Germany called Agritechnica, and this is the biggest farm show in the world. And basically, what happens is this generates some additional demand. But overall, we manufacture to demand and not ahead.

Your next question comes from the line of Andy Casey with Wells Fargo Securities.

I wanted to return to the earlier goal discussion about achieving $15 billion top line over time.

That was not a goal discussion to be precise.

The confidentiality aside.

That was my personal ambition. It could be your goal and it's also not a goal, which I have so that's what I think we want to do.

Okay. I mean, within that, Martin, in your personal ambition, the $15 billion would represent somewhere between 35% and 40% upside from where you are today, and that's to be done against a market that you consider to be flat for prolonged period. Do you think...

I didn't say that the market is flat, so that's not my statement I made.

Isn't that what a process industry means?

I didn't say that the markets in our industry will be flat in the future.

Okay. Well less cyclical, I guess. So sorry for the misinterpretation there.

I also don’t think that we are already active and participating on markets, which you also need to take into consideration. But I also don't want to discuss this ambition because as I said, this is not up for discussion. It's just what -- it's just an ambition.

Your next question comes from the line of Jerry Revich with Goldman Sachs.

Andy, can you give us an update on how you're thinking about the cost-reduction opportunities on the Fendt facilities now that you're close to the finish line in terms of getting all the start-up cost out of the way? At which point do we start to see the benefits come in? Will we get the full run rate benefits in the fourth quarter of this year? And how should we think about magnitude and timing as your thoughts have evolved based on experience there?

Sure. Yes, in the third and fourth quarter, we start to see benefits from as we -- as you look year-over-year in terms of how we perform on the Fendt business. Basically, we'll be back to normal productivity and profitability rates. And so if you recall, in the third quarter of last year, there was an impact of, I think, between $5 million and $10 million and then in the fourth quarter, more around $30 million as it relates to the Fendt impact. So we should see that be reversed here in 2013.

And Andy, just beyond the reversal, in addition to providing higher capacity because of the automated processes that you added, I believe you are targeting $15 million to $20 million of cost savings. Do I remember that right? And if so, what's the timing on when you expect to see those actual cost savings?

Those were productivity rates. And so our production and our sales are going to be higher here in the second half of the year than last year and higher than Fendt's history. And so what we do there is that we're able to grow our production really, while keeping a lot of the labor down and not having to grow labor as quickly as we would have in the past. And so that's creating the productivity gain. So as we continue to grow our production and increase our sales in Fendt, those productivity cost savings will emerge. And so there's probably some of that, that will be in the second half of 2013. But also as the Fendt business continues to grow, hopefully we'll see the majority and the rest of that productivity gain.

And Greg, in the comment that you made earlier on the North America manufacturing improvement, driving the variance this quarter, can you just give us an update on production rates out of the Jackson facility and give us an update on which additional projects are you shifting around or producing more in North America? And any other moving pieces we should think about from here?

Right. So you're probably -- in Jackson, as we talked about last year, we're now assembling our high horsepower tractors. So essentially all of our newly remodeled 2, 3 years ago, I guess, and launched tractors are being assembled in Jackson. And so we're still shipping most of the major components from Europe. And then as we go along, we'll continue to localize more and more of that. So that'll impact our cost structure and make us less exposed to some of the exchange that we currently are. And then we also talked about, I guess, a month or 2 ago about some additional investments that we'll continue to make in Jackson that'll help us improve in terms of our efficiencies. And so you'll see some savings on direct labor going forward in North America, and that will help our margins on those products as we continue to assemble those here.

Okay. And lastly, on material costs, those are coming in lower than expected across the board. I'm wondering how much of a benefit was it for your business in the quarter. And is that part of the reason why you're able to take the foot off the gas in some of the pricing actions over the balance of the year?

Yes. From a material standpoint, we saw very little cost increases, and we also have our initiatives going in terms of globalizing our purchasing activities, which is driving cost reduction. And so from the standpoint of looking at pricing versus the material cost inflation, we were -- we cleared over 100 basis points here in the second quarter and would expect that to continue in the third and fourth quarter.

Your next question comes from the line of Michael Cox with Piper Jaffray.

My first question is on Europe, and you commented on some increased competitive pressure. I was wondering if you could shed a little more light on where you're seeing that within Europe or maybe if it's on specific product categories?

We don't see increased competitive pressures. So we have -- basically, we face the same competition globally in all markets and it didn't change a lot. So no change from last year or the year before.

Okay. And then on Southern Europe, has obviously been a weak market for some time now. Is there any hint that, that might be bottoming?

Well, Southern Europe, first of all, is not so important for us. So the biggest Southern European market is basically Italy, and those are small tractors, mainly crawler tractors we even don't offer. If some survivors, local survivors, local manufacturers, and then of course, one of our competitors is big in Italy. So it doesn't hurt us so much. The market, which is more interesting for us -- and we are more into Northern Italy, where the bigger farms are. And we have a strong position there. And the market, which is important for us is not Portugal or Greece because they don't have professional farming. They're into food, wine, all those things like that and the farm size is very small. So it's Spain. And Spain actually is doing better than the other markets. I've just been there some weeks ago and we had a meeting with the Minister of Agriculture. And together, we worked on a -- on some kind of incentive on how to basically, one, help the farmers in Spain to improve. And then second also, it would create some additional demand. I don't want to go into detail here, but you will hear about it soon from the government.

Okay, very good. And lastly, a quick one for Andy. CapEx, as you look ahead to 2014 with a couple of these big projects rolling off, should we expect CapEx to decline next year?

No. We don't expect CapEx to decline in 2014. It should be at the same levels or even could be a little higher in 2014. And 2015 would be the year where we would expect some declines in our CapEx.

I would even make it more precise, from 2015 on because I think we have a lot of important projects in the pipeline. And after we have basically worked ourselves through that peak, you should see some more long-term reduction of CapEx.

Your next question comes from the line of Adam Fleck with Morningstar.

Sticking on the EAME theme, we're seeing Russia pretty weak recently. One of your competitors is talking about the fact that it's pretty dismal right now. I'm just curious, beyond the combine tariff situation, what you guys are seeing in your expectations for that market?

We don't have an issue with the combine tariff because our product is localized and we do have -- we take advantage of Russian finance, retail finance programs from the government. So we are in the process of announcing a joint venture in Russia, so that will happen somewhere in late August or early September. So I think the question on Russia is not whether there is a market. The question is when it will realize. And we talk about it for many years now, and I think we are getting closer and closer. So that means for 2014, for example, I would expect Russia to be up.

Okay, great. That's helpful. And then sticking to that segment, I know it's a much smaller piece of the business, but could you update us on your sales in Africa and the Middle East specifically? I remember, it grew at a very strong pace last year. Is that traction continuing here in the first half?

Our African sales in the first half of the year are slightly down from a year ago. So I think our expectation is it's going to be relatively flat this year.

Okay. Is that just a product of timing? Or again, I know it's very small, but just curious as to what you're seeing down there.

No it's actually also the fact that we basically just went into that joint venture in Nigeria. And so we are ramping up production. So therefore, I think midterm, you will see more favorable numbers. And then also, Africa needs a very reliable, easy to service and handle a smaller tractor, and we are in the process of developing that product, as you might know, and launch it towards the end of this year, and in steps also during the next couple of years.

Your final question comes from the line of Seth Weber with RBC Capital Markets.

Just going back to Europe, is it possible to talk about just the distinction between what you're seeing on the dairy livestock markets versus the row crop markets? And then a follow-up question, just what you're seeing on the used equipment markets, both in Europe and North America.

No issues with used equipment in Europe. Most of the used equipment goes depending on the size. The big items go East and the small items go into markets like Africa. So when it comes to North America, it's pretty much used. It's mainly going South. So overall, we are doing fine, I think. What was the other question?

Just if there's any differences between what you're seeing in Europe, between the dairy livestock farmers and the crop farmers?

Yes. Well, crop farmers are doing actually globally pretty well because of the rather strong crop prices for the last years. And in Europe, dairy farms recovered because the prices went up. Milk prices went up, and there's a lot of discussions about -- or around the idea that quality milk should be honored by higher prices. So the consumer is more prepared to accept higher prices than maybe in the U.S.

Okay. And I guess just lastly, for Fendt, are you still targeting the 18,000 units this year?

Yes.

Presenters, do you have any closing remarks at this time?

Just would like to thank everyone for their participation and encourage them to contact me with the follow-up questions. Thank you very much.

This concludes today's conference call. You may now disconnect.