Machinery Pete “Used Value Index”

* 4th Quarter 2012 *Machinery Pete: covering the used farm equipment market since 1989

Machinery Pete:“The Auction Price Guy”

• Sale Price Data Machinery Pete has compiled over 500,000 auction sale prices on ALL types of used farm & construction equipment sold throughout North America since 1989

• Sources Pete has built a network of 800+ regional auctioneers, 600+ ag lenders, 400+ implement dealers and thousands of farmers throughout the U.S. & Canada

• Trusted Commentator Machinery Pete has written a popular monthly column in national farm magazines since 1992 on current & historical trends with used equipment values (2001-present Successful Farming; late 1990’s to present Implement & Tractor). Pete writes a weekly online column for Agriculture.com

• Cable TV Pete appears each week on the “Machinery Show” on RFD-TV cable channel, talking about auction prices & trends in used equipment values

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4th Qtr. 2012 “Used Value Index”(Overall Index Rating: includes all types of farm equipment)

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4th Qtr. 2012 “Used Value Index”Overall Used Equipment Market

Last Decade Qtr. By Qtr.

• Index rating shoots HIGHER 4th Qtr. each of past 10 years

Qtr. 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20121st 4.5 4.5 4.5 5.5 7.3 7.3 7.7 9.5 9.5 9.0 9.3 9.42nd 4.5 4.5 4.4 6.6 6.8 7.2 7.5 9.2 9.1 8.3 8.8 9.03rd 4.4 4.4 4.6 7.1 6.7 7.0 7.5 9.3 8.7 8.6 9.3 8.74th 4.2 4.2 5.9 7.2 7.3 7.5 9.3 9.5 9.2 9.3 9.4 9.1

The results: 4th Qtr. 2012 market conditions

Big jump from 8.7 Index rating 3rd Qtr. ‘12

Factors Driving Used Equipment Values 4th Qtr. 2012

• TAX motivated buyers. Extremely strong push to maximize Sec 179 IRS tax write off limit. Big fear of dropping write off limits that were in place for 2013, fear write off could go away

• Used Tractor values push towards all time HIGHS. Extremely TIGHT used market

• Used Combine values stabilized 4th Qtr. after significant drop in value 3rd Qtr. ‘12

Look Ahead to 1st Qtr ‘13: Used Values Remain HighMachineryPete.com

Overall Index rating: 9.1

Used Equipment Categories• Tractors: 4WD• Tractors: 200+ HP• Tractors: 130-200 HP• Tractors: 100 HP• Combines• Grain Handling Equipment• Hay/Forage• Tillage• Planting/Seeding Equipment• Garden Tractors• Construction Equipment• Skid Steers• ATVS• Pickup Trucks

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Used 4WD Tractor Values

Used 4WD Tractor Values

Results: Used values near all time High

Strong buyer demand for nice condition used 4WD tractors no matter how old they are…3, 5, 10, 15, 20, 30+ years old, all UP in value 4th Qtr. 2012

Outlook for 1st Qtr. 2013Pete’s Take: “Used 4WD Tractor values should remain at this elevated level.”

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Tractors: 4WD

1999 CaseIH 9350 with 4,755 hours, sold: $82,500

12/29/12 farm auction in west-central Illinois

Tied 2nd highest auction price in past 10+ years

12/12/12 farm sale in southeast Minnesota…record auction price on 1994 Ford-NH 9880 with 1826 hours: $98,000…previous high price: $83,500. Same auction…1998 CaseIH 9380 with 3484 hours sold: $100,000…highest sale price in 11 ½ years

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Used Tractor Values 200+ HP

Used Tractor Values 200+ HP

Results: Used values Push Higher

• Used values spike higher year end after having dipped just below super high 9.0 Index rating for 1st time in 2 years 3rd Qtr. ‘12

Outlook for 1st Qtr. 2013Pete’s Take: “I don’t see a change here early 2013…used values in this HP Class will remain very strong.”

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Tractors: 200 HP+

2000 JD 8310 with 1,209 hours, sold: $151,000

12/12/12 farm estate auction north-central Illinois

New record auction sale price

Shattered previous record high auction sale price by $46,000!

2000 JD 8410 with 2,836 hours, sold $130,000

11/17/12 farm auction northwest Ohio

2nd highest auction price ever

Only JD 8410 to sell higher at auction…9/11/10 farm auction northwest Illinois, 2000 model 8410 with only 584 hours on it, sold $136,000….now look how close the 8410 on 11/17/12 Ohio auction came on price despite having 2,200+ more hours on it….this speaks to growing buyer demand

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Used Tractor Values 130-200 HP

Used Tractor Values 130-200 HP

Results: Blistering Buyer Demand

Off the charts buyer demand continues for good condition used Tractors in this 130-200 HP segment. Fevered auction bidding late in 2012

Outlook for 1st Qtr. 2013Pete’s Take: “Absolutely no slow down in sight early in 2013. Very low number of machinery auctions (Jan. ‘13 one of slowest months I’ve ever seen) works to keep buyer demand focused.”

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Tractors: 130-200 HP

1990 CaseIH 7130 with 3,886 hours, sold: $68,000

12/7/12 farm auction southeast Nebraska

New record auction price

This was 3rd time record price was broken since August ‘12. Record had been $56,000 since September 1996:

• $62,000: 8/23/12 southeast MN• $66,000: 11/24/12/ southeast IA• $68,000: 12/7/12 southeast NE

1998 CaseIH 8930 with 2,990 hours, sold: $84,500

11/10/12 farm auction northwest Iowa

New record sale price by $10,500

Perspective…..previous record sale price was $74,000, all the way back on 12/21/98 auction in southeast Missouri for a 1-year old CaseIH 8930 with only 5 hours on it!

1999 JD 7810 2WD with 2,200 hours, sold: $87,500

11/3/12 farm auction north-central Iowa

New record auction price (2WD)

Noticeable bump in buyer demand for good condition 2WD used Tractors

JD 4440 with 5,333 hours, sold: $42,000

10/25/12 farm sale south-central Wisconsin

4th Highest Auction Price Ever

Real nice JD 4440…but 5,333 hours! I have seen 1,145 JD 4440’s sell at auction going back 17 years…only (3) I’ve seen sold higher at auction all sold on famous 3/6/09 farm auction in west-central Illinois….those (3) 4440’s had 1,843, 692 & 47 hours on them

Tractors: 100 HP & Under

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Used Tractor Values (100 HP & Under)

Used Tractor Values (100 HP & Under)

Results: Used values inch higher

• Used values began climb from long-held stagnant/flat position late in 2010, continued higher late 2011 and steadily rose throughout 2012

OUTLOOK FOR 1st Qtr. 2013Pete’s Take: “I see pretty much the same thing here as for other segments of the used Tractor market early in 2013…continued strength.”

Combines

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Used Combine Values

Used Combine Values

Machinery Pete “Used Value Index”Combine Ratings

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Used Values Holding – But Over Supply Issue Still There

• Factors that helped used Combine values 4th Qtr. 2012:– Very strong year end tax buyer push– Commodity prices shot higher mid August…more buyer optimism followed– Drought/Insurance: much brighter buyer outlook end of year vs. mid year

• Lingering issue of Over Supply of Late Model Used Combines on Dealer Lots– Mfg. gets proactive, offer dealers $$ incentive for each used Combine sold at auction late ’12

• Uptick in No. of large Dealer/Consignment auctions late ‘12 - high No. of late model used units

1st Qtr. 2013 Outlook:• “Hold Steady”……for now. Used values likely to dip 2nd & 3rd Qtr. ’13, just like 2010 & 2012

• SAME AS I SAID LAST QTR: Finding homes for the “off roll” program late-model used units will continue to be a challenge on into 2013. Tough task to goose the absorption rate

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Combines: Used Values in 4th Qtr.

67.6% More JD 9870 STS Combines Sold at Auction in 2012 vs. 2011

JD 9870 STS Combine Values• Ave. Auction Price 2012: $173,007• Ave. Auction Price 2011: $188,071----------------• Ave. Dealer Ad Price ‘12: $256,768• Ave. Dealer Ad Price ‘11: $257,350

Ratio Ave. Auction Price/Ave. Dealer Advertised Price:

2012: 67.4%2011: 73.1%

This falling ratio % speaks to the continuing over supply issue of late model used Combines on dealer lots. Many very large dealer/consignment auctions June – December 2012….more will follow in 2013

2011 JD 9770 STS Combine with 0 Hours, sold $269K

11/16/12 farm auction east-central Minnesota

Strong Sale Price

$269,000 auction sale price was quite a bit off retail value, but higher than I was expecting going into the sale. Evidence of “firming used values” 4th Qtr. 2012

2000 CaseIH 2366 with 1,120 engine hours, sold $135,000

12/12/12 farm auction north-central Illinois

2nd Highest Auction Price Ever

Example of still strong buyer demand for slightly older/smaller used Combines in very good condition. Bidders from as far away as Kansas drove to this Illinois auction for this combine

Recap: Trends in Used Tractor/Combine values

Market action4th Quarter 1st Qtr. 2013

Tractors: 4WD Strong/Rising Stay StrongTractors: 200 HP+ Strong/Rising Stay StrongTractors: 130-200 HP Red Hot Stay StrongTractors: 100 HP Inching Higher Hold to Slow

Rise Continues

Combines Stabilized Hold…for now

Used Grain Handling Equip. Values Very Strong

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Used Grain Handling Equipment Values

Used Grain Handling Equipment Values

Category includes: Grain carts, gravity wagons, grain trailers, grain vacs, augers

Values Up in 4th Qtr. 2012

OUTLOOK FOR 1st Qtr. 2013Pete’s take: “Used Grain Handling Equipment values shot up 4th Qtr. 2007 and have remained high, between 8.5 – 9.0 Index Rating since. I’m looking for used values to remain in this range early in ‘13.”

Walinga 614 Grain Vac, sold: $13,500

11/16/12 farm auction east-central Minnesota

Record auction price

$3,000 above previous record high auction sale price of $10,500 on 11/28/07 farm auction west-central Iowa

Hay/Forage EquipmentUsed Values Hold Even

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Used Hay/Forage Equipment Values

Used Hay/For-age Equipment Values

Category includes: Hay balers, Hay Stacking Equipment, Hay Racks, Rakes, Mower/Conditioners, Tedders, Inverters, Haybines, Forage Choppers, Forage Boxes, Forage Blowers

Spotty Buyer Demand

OUTLOOK FOR 1st Qtr. 2013Pete’s Take: “I’m looking for some continuing “softness” with used Round Baler values, but for most other areas of this equipment sector I’d say we’ll see continued slightly/slowly rising used values.”

JD 336 square baler, sold for $4,900

11/24/12 farm auction southeast Minnesota

New record auction price

Also on this 11/24/12 farm auction in southeast MN, a New Holland 28 Forage Blower sold for $1,200…highest sale price I’ve seen in 13 years

Tillage EquipmentUsed Values Dip Slightly

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Used Tillage Equipment

Used Tillage Equipment

Category includes: Cultivators, Disks, Disc Chisels, Drags, Finishers, Mulchers, Plows, Rotary Hoes, V Rippers, Vertical Tillage Tools

High Used Values for 5 Years

OUTLOOK FOR 1st Qtr. 2013Pete’s Take: “A mini glut of late model used Tillage (Disc Chisels) sold on late 2012 big dealer/consignment auctions dragged own values a bit in this category. I look for values to hold or bounce slightly higher early ‘13.”

Construction Equipment:Used Values Creep Higher

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Used Construction Equipment Values

Used Construc-tion Equipment Values

Category includes: Dozers, Crawlers, Backhoes, Payloaders, Road Graders, Forklifts, Tractor/Loader/Backhoes, Cranes, Trenchers, Telehandlers

• Strong Rebound Continues

•OUTLOOK FOR 1st Qtr. 2013•Pete’s Take: “Used values been working their way slowly up since 4th Qtr. 2010. I see more of the same for early 2013.”

1977 Fiat-Allis 11B Dozer, overhauled, sold: $25,000

12/1/12 farm auction north-central Missouri

Record Auction Price

$25,000 was WAY above what the auctioneer expected on this good used Dozer. Just shows the increased buyer demand for farmer use heavy Construction Equipment

Skid Steers:Used Values Rise Slowly

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Used Skid Steer Values

Used Skid Steer Values

Premiums Paid for Good Ones

OUTLOOK FOR 1st Qtr. 2013Pete’s Take: “My take is used Skid Steer values will remain in this 7.0 range, possibly inch bit higher early in 2013..”

2000 Bobcat 873 with 1,830 hours, sold: $18,250

12/22/12 farm sale northeast Nebraska

2nd Highest Price Since March ‘07

Topped by 2002 Bobcat 873 with 1,761 hours sold for $22,500 on 11/28/12 consignment auction in east-central North Dakota….sure sign of a RISING market when you see premium price on a consignment auction

Planting/Seeding Equip:Used Values Fall Slightly

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Used Planting/Seeding Equipment Values

Used Planting/Seed-ing Equipment Values

Category includes: Planters, Drills, Air Drills

Higher Volume Sold Late 2012

OUTLOOK FOR 1st Qtr. 2013Pete’s Take: “The big increase in No. of very large dealer/consignment auctions in December 2012 did bring more late model larger used Planters into play, dropping values slightly, but no nosedive. My guess is values will stabilize early in 2013.”

CaseIH 1250 24-Row, 3,987 acres, sold $140,000

12/27/12 dealer auction north-central Iowa

Highest of (5) Sold on This Sale

The other (4) CaseIH 1250 24-Row models sold on this 12/27/12 dealer auction in north-central Iowa went for between $72,500 - $101,000

Garden Tractors:Used Values Continue Climb Higher

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Used Garden Tractor Values

Strengthening Used Values

OUTLOOK FOR 1st Qtr. 2013Pete’s Take: “Rising home values, rising 401K accounts helping conditions in this segment in metro areas, used values bumping bit higher from lows back 2nd Qtr. 2010. I think used values will hold in their current range early in 2013.”

ATVS/Utility Vehicles:Used Values Healthy

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Used ATV/Utility Vehicle Values

Used ATV Values

Category includes: ATVS, utility vehicles

Steady as She Goes

OUTLOOK FOR 1st Qtr. 2013Pete’s Take: “Early 2013 should look much like late 2012…used values hold to inch higher.”

Pickup Trucks:Used Values Bump Up

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Used Pickup Values

Used Pickup Values

Strong Demand for Good Used

OUTLOOK FOR 1st Qtr. 2013Pete’s Take: “I continue to see very high demand for nice condition, mid to lower mileage used Pickups when available on farm auctions. Strong buyer demand should continue in early 2013..”

Quarterly Index ratings are assigned on a scale of 1 to 10 to show relative strength of current and historical used equipment values. 6.0 = “stable/normal” used values. There are two levels...

• Comprehensive Index rating for overall used farm equipment values

• Index ratings broken down by equipment sectors

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