The Son Ordered Two New John Deere's… BUT The Dad Sent The Truck Back Before Entering The Farm

On a Tuesday morning in April 1978, a

gleaming red semi-truck pulled onto

County Road 14 in Marshall County, Iowa,

hauling two brand new John Deere

tractors that cost more than most people

in the county would earn in a decade.

The driver had delivery instructions to

the Patterson farm, a 640 acre operation

that had been in the same family since

1889. He was supposed to drop off a new

John Deere 4440 and a new John Deere

4240 $14700

and $38,000 respectively. Total value

$85,000 before tax at the main equipment

shed. The driver had done this route

before. He knew the farm. He turned onto

gravel drive that led through a tunnel

of oak trees toward the white farmhouse

and the big red barn. But he never made

it to the barn because standing in the

middle of that gravel drive about 300 yd

from a county road was a 73-year-old man

named Earl Patterson. And Earl was

holding up his hand like a traffic cop.

The truck stopped. The driver leaned out

the window. Mr. Patterson, I've got your

delivery. Earl shook his head. Not my

delivery. my sons and you're not

bringing them onto this property. The

driver blinked, confused. Sir, I've got

paperwork here. Two tractors ordered by

James Patterson. Delivery addressed this

location. Earl's expression didn't

change. I know what the paperwork says,

"But this is my land, and those tractors

aren't coming on it. Turn around and

take them back to the dealership." What

happened in the next 45 minutes became

legendary in Marshall County. And the

lesson it taught is one that every

farmer, young or old, needs to hear

before they make the biggest financial

mistake of their life. Before I explain

exactly what happened between Earl

Patterson and his son that morning, you

need to understand the agricultural

environment of the late 1970s because

this wasn't just a family dispute. This

was a collision between two completely

different philosophies of farming

happening at the exact moment when

American agriculture was splitting into

two camps. Those who believed debt and

expansion were the path to survival and

those who believed debt was a noose

waiting to tighten. By 1978, the boom

years of the early '7s were over. Corn

prices, which had peaked above $3 per

bushel in 1973 to74, had settled back to

around $210

to $230.

Land values were still high. Iowa

farmland was averaging $1,800

to $2,000 per acre, but the explosive

appreciation had slowed. Interest rates

were creeping upward as the Federal

Reserve tried to control inflation, and

equipment prices had gone through the

roof. That John Deere 4440 that cost

$47,000 in 1978. A comparable tractor in

1970 would have cost about $12,000.

Equipment costs had nearly quadrupled

while commodity prices had barely

doubled. But here's what made 1978

particularly dangerous. The agricultural

lending industry was still operating on

the assumption that the boom would

continue. Banks were eager to lend to

farmers, especially young farmers who

wanted to expand and modernize. The term

progressive farmer was thrown around

like a badge of honor. If you weren't

expanding, if you weren't upgrading to

bigger equipment, if you weren't

planning fence row to fence row, you

were considered backward, old-fashioned,

destined to be left behind. The John

Deere dealerships and the farm credit

lenders had basically formed a

partnership. The dealers would sell the

dream of modern farming and the lenders

would finance it with 7 to 10 year loans

that seem manageable when you looked at

the monthly payment in isolation. What

they didn't emphasize was a total debt

burden or what would happen if prices

dropped or how quickly things could

unravel if you had even one or two bad

years. Earl Patterson had started

farming in 1927 when he was 22 years

old, right before the Great Depression.

He'd watched his father lose 160 acres

in 1932 because of debt incurred during

the 1920s boom. He'd survived a

depression by farming small, spending

nothing he didn't have and treating debt

like poison. He'd built the Patterson

farm from 160 acres in 1935 to 640 acres

by 1960. And he'd done it without ever

taking a loan for equipment. Not once,

not ever. He bought used tractors, fix

them himself, and ran them until they

literally couldn't be repaired anymore.

His current equipment roster in 1978

included a 1960 John Deere 4010, a 1965

John Deere 4020, and a 1953 John Deere

70, plus implements that range from

serviceable to barely functional.

Nothing was new, nothing was financed,

and the farm was completely paid off.

640 acres, free and clear, worth over a

million dollars with zero debt. His son,

James Patterson, was 34 years old in

1978. He'd grown up on the farm, worked

alongside his father since he was old

enough to drive a tractor, and had every

intention of taking over the operation

when Earl retired. But James represented

a different generation. One that had

come of age during the boom years of the

early 70s. One that had been taught by

agricultural colleges and extension

agents that modern farming required

modern equipment, modern techniques,

modern thinking. James had attended Iowa

State, majored in agricultural business,

and come home with ideas that made Earl

deeply uncomfortable. James talked about

economies of scale and capital

efficiency and leveraging appreciating

assets. Earl talked about not owing

anyone a damn thing. The tension had

been building for years, but came to a

head in March of 1978 when Earl

announced he was stepping back. He was

73. His knees were shot, his hands had

arthritis, and he wanted to slow down.

He told James a farm was his to run with

one non-negotiable condition. You don't

take on debt. Period. You want new

equipment, you save for it. You want to

expand, you do it slow with cash. But

this farm stays debtree. James heard the

words, but he didn't really listen. He'd

already been talking to the John Deere

dealer in town, a smoothtalking salesman

named Rick Holloway, who convinced James

that the farm needed to modernize to

stay competitive. Your dad did great,

Rick had said. But he's from a different

era. Today, you need horsepower. You

need efficiency. You need equipment that

can cover ground fast, plan precise,

harvest quick. That 04010,

it's 30 years behind the curve. Rick had

shown James a new 4440, a 130 horsepower

beast with a turbocharged diesel engine,

powers shift transmission, and a cab

with air conditioning and a stereo. He'd

shown him the 4,240,

slightly smaller at 100 horsepower, but

still a massive upgrade over the old

equipment. and he'd shown James the

financing options. 10-year loan at 9.5%

interest, monthly payments of about

$1,100

for both tractors combined. You're

farming 640 acres. Rickett said you'll

cover that payment easy, even in a bad

year. And in good years, you'll make

enough extra from increased efficiency

to pay it off early. James had run the

numbers. At 640 acres, averaging 115

bushels of corn per acre. At $2.20 per

bushel, he'd gross about $162,000.

Operating costs seed fertilizer, fuel,

chemicals, maybe $80,000.

That left $82,000 before equipment

payments. Annual payment on the

tractors, $13,200.

still left $68,800

seemed like a no-brainer. What James

didn't calculate. What Rick Holloway

conveniently didn't mention was how much

those numbers could change. What if

yields dropped to 90 bushels in a

drought year? What if corn fell to $180?

What if fuel prices spiked? What if the

tractors needed major repairs that

weren't covered by warranty? What if