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 extensionagents 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 interest rates rose and he needed to refinance operating debt at higher rates? James was looking at the best case scenario and assuming it would
always be the case. Earl, who’d lived through depression and multiple farmer sessions, knew better. When James told his father he’d order the tractors, Earl’s reaction was immediate and volcanic. They were standing in the kitchen of the farmhouse, and Earl slammed his coffee cup down so hard it cracked the saucer.
You did what? James, expecting resistance but not this level of anger, tried to stay calm. Dad, I ordered two new tractors. The 4010 and the 4020 are worn out. We need modern equipment to stay efficient. Earl’s face went red. Worn out. I rebuilt that 4,000 102 years ago. It runs perfect. And the 4020 has maybe 5,000 hours on it.
There’s nothing wrong with those tractors except they’re not shiny and new. James shook his head. They’re old. They’re inefficient. They break down. We’re losing time and money. Running outdated equipment. Earl stood up, his chair scraping loudly against a lenolium floor. How much? How much? What? How much did you borrow? James hesitated.
85,000 for both tractors. 10-year note at 9 12%. Earl went quiet, dangerously quiet. When he finally spoke, his voice was low and hard. You put $85,000 of debt on this farm without asking me. James bristled. You said the farm was mine to run. I said you could run it. I didn’t say you could mortgage it.
This land has been debt-free for 43 years. I swore when my father lost his land that I’d never let it happen again. and you just walked into a dealership and sign away our future. The argument escalated. James accused his father of being stuck in the past, of refusing to adapt, of holding the farm back out of a rational fear.
Earl accused James of being reckless, arrogant, and foolish, of believing salesmen and bankers, instead of listening to someone who’d actually survived hard times. It ended with James storming out, shouting that the tractors were coming whether Earl liked it or not, and Earl shouting back, “Not on my land, they’re not.
” Which brings us back to that Tuesday morning in April when the delivery truck rolled down County Road 14 with $85,000 worth of shiny new iron on the trailer. James wasn’t home. He’d gone into town for parts, assuming the tractors would be delivered and unloaded by the time he got back. But Earl had been watching.
When he saw that truck turn onto the drive, he walked out and stood in the middle of the gravelroad and he stopped it. The truck driver, a guy named Mike Sorenson, who’d been hauling equipment for 15 years, climbed down from the cab. Mr. Patterson, I don’t want any trouble. I’m just doing my job. Your son ordered these tractors.
They’re paid for, well, finance, and I’m supposed to deliver them. Earl shook his head. I understand you’re doing your job, son, but this is my property. Those tractors were ordered without my permission, and they’re not staying here. You need to turn around and take them back to the dealership. Mike looked genuinely distressed.
Sir, I can’t do that. I’ve got delivery papers signed by James Patterson. If I don’t deliver these, I’ll lose my job. Earl’s expression softened slightly. I’m not trying to get you fired, but I’m not letting those tractors onto this land. Here’s what’s going to happen. You’re going to call your dispatcher. Your dispatcher is going to call Rick Holloway at the dealership and Rick is going to call my son and then we’ll see what happens.
Mike, not seeing any other option, made the calls. Within 20 minutes, Rick Holloway’s pickup truck came roaring down the county road, followed a few minutes later by James and his truck. The scene that unfolded was later described by Mike Sorenson to at least a dozen people at the cafe in town and it entered local legend. James jumped out his truck, furious.
Dad, what the hell are you doing? These are my tractors. Earl stood his ground. They’re not your tractors. They’re the bank’s tractors. You’re just making payments on them, and they’re not coming onto land that I own. James is face flushed. You said I could run the farm. I said you could farm the land.
I didn’t say you could leverage it. There’s a difference and you’re about to learn it the hard way. Rick Holloway, sensing the sale falling apart, tried to intervene. Gentlemen, let’s all calm down. Mr. Patterson Earl, I understand your concerns, but James is a grown man. He’s made a business decision. These tractors will increase productivity, reduce costs in the long run.
Earl turned to Rick with a look. that could have melted steel. Rick, you sold my son $85,000 worth of equipment he doesn’t need and can’t afford. And you did it knowing damn well I’d never have approved it. You want to help? Get in your truck and get off my property. Rick, for the first time looked uncertain. The contract is signed. The loan is approved.
