They Ignored Him When He Said ‘Never Finance a Tractor’… Then the Bills Came

0:00 The dealer demonstration was on a

0:02 The dealer demonstration was on a

0:02 The dealer demonstration was on a Tuesday in March 1973. Elton Junction,

0:06 Tuesday in March 1973. Elton Junction,

0:06 Tuesday in March 1973. Elton Junction, South Dakota, population 847.

0:10 South Dakota, population 847.

0:10 South Dakota, population 847. Curtis Lindberg stood at the back of the

0:11 Curtis Lindberg stood at the back of the

0:12 Curtis Lindberg stood at the back of the crowd, arms crossed, watching. 23

0:15 crowd, arms crossed, watching. 23

0:15 crowd, arms crossed, watching. 23 farmers packed into Jean's equipment,

0:18 farmers packed into Jean's equipment,

0:18 farmers packed into Jean's equipment, all staring at the new Case 1370 like it

0:20 all staring at the new Case 1370 like it

0:20 all staring at the new Case 1370 like it was the second coming. 135 horsepower

0:24 was the second coming. 135 horsepower

0:24 was the second coming. 135 horsepower 8-speed transmission. that turbocharged

0:27 8-speed transmission. that turbocharged

0:27 8-speed transmission. that turbocharged diesel that could pull a 24 ft chisel

0:29 diesel that could pull a 24 ft chisel

0:29 diesel that could pull a 24 ft chisel plow through Gumbo without downshifting.

0:32 plow through Gumbo without downshifting.

0:32 plow through Gumbo without downshifting. The dealer had brought three of them

0:34 The dealer had brought three of them

0:34 The dealer had brought three of them down from Sou Falls. Bright orange

0:37 down from Sou Falls. Bright orange

0:37 down from Sou Falls. Bright orange chrome exhaust stack catching the

0:39 chrome exhaust stack catching the

0:39 chrome exhaust stack catching the morning sun. Curtis had seen this

0:41 morning sun. Curtis had seen this

0:41 morning sun. Curtis had seen this before, not with tractors as big or this

0:43 before, not with tractors as big or this

0:43 before, not with tractors as big or this expensive, but he'd seen the pitch. His

0:47 expensive, but he'd seen the pitch. His

0:47 expensive, but he'd seen the pitch. His father had shown him the auction notices

0:49 father had shown him the auction notices

0:49 father had shown him the auction notices from 1934. men who bought new equipment

0:52 from 1934. men who bought new equipment

0:52 from 1934. men who bought new equipment in 1928 and 1929, thinking the boom

0:56 in 1928 and 1929, thinking the boom

0:56 in 1928 and 1929, thinking the boom would last forever. Curtis was 58 years

0:58 would last forever. Curtis was 58 years

0:58 would last forever. Curtis was 58 years old. He'd been farming since he was 12.

1:01 old. He'd been farming since he was 12.

1:02 old. He'd been farming since he was 12. He'd never financed a tractor in his

1:03 He'd never financed a tractor in his

1:04 He'd never financed a tractor in his life. He wasn't about to start now. The

1:06 life. He wasn't about to start now. The

1:06 life. He wasn't about to start now. The dealer's voice carried across a lot. 8

1:09 dealer's voice carried across a lot. 8

1:09 dealer's voice carried across a lot. 8 12% APR, 15% down, 7 years to pay.

1:14 12% APR, 15% down, 7 years to pay.

1:14 12% APR, 15% down, 7 years to pay. Gentlemen, at current wheat prices, this

1:16 Gentlemen, at current wheat prices, this

1:16 Gentlemen, at current wheat prices, this machine pays for itself in three

1:18 machine pays for itself in three

1:18 machine pays for itself in three seasons. Curtis turned and walked back

1:20 seasons. Curtis turned and walked back

1:20 seasons. Curtis turned and walked back to his truck. A 1967 Ford F250 paid for.

1:25 to his truck. A 1967 Ford F250 paid for.

1:25 to his truck. A 1967 Ford F250 paid for. In the bed sat a toolbox that had

1:27 In the bed sat a toolbox that had

1:27 In the bed sat a toolbox that had belonged to his father. Curtis Lindberg

1:30 belonged to his father. Curtis Lindberg

1:30 belonged to his father. Curtis Lindberg didn't believe in debt. Not for

1:32 didn't believe in debt. Not for

1:32 didn't believe in debt. Not for equipment. Not ever. By the end of 1975,

1:36 equipment. Not ever. By the end of 1975,

1:36 equipment. Not ever. By the end of 1975, that belief would be the only thing

1:37 that belief would be the only thing

1:37 that belief would be the only thing standing between him and the auctioneers

1:40 standing between him and the auctioneers

1:40 standing between him and the auctioneers gavel. If you were farming in the early

1:42 gavel. If you were farming in the early

1:42 gavel. If you were farming in the early '7s, you remember what this felt like.

1:45 '7s, you remember what this felt like.

1:45 '7s, you remember what this felt like. the pressure to upgrade, the promises

1:47 the pressure to upgrade, the promises

1:47 the pressure to upgrade, the promises from dealers who genuinely believe their

1:49 from dealers who genuinely believe their

1:49 from dealers who genuinely believe their own numbers. What was the moment you

1:52 own numbers. What was the moment you

1:52 own numbers. What was the moment you realized the rules were about to change?

1:54 realized the rules were about to change?

1:54 realized the rules were about to change? Tell me in the comments. Now, before we

1:57 Tell me in the comments. Now, before we

1:58 Tell me in the comments. Now, before we go further, you need to understand

2:00 go further, you need to understand

2:00 go further, you need to understand something about what I'm telling you.

2:01 something about what I'm telling you.

2:02 something about what I'm telling you. What follows is based on documented

2:03 What follows is based on documented

2:03 What follows is based on documented patterns that repeated across rural

2:05 patterns that repeated across rural

2:05 patterns that repeated across rural America between 1973 and 1976. While

2:10 America between 1973 and 1976. While

2:10 America between 1973 and 1976. While I've constructed this narrative from

2:11 I've constructed this narrative from

2:11 I've constructed this narrative from multiple real cases and added specific

2:13 multiple real cases and added specific

2:14 multiple real cases and added specific details for clarity, every financial

2:16 details for clarity, every financial

2:16 details for clarity, every financial mechanism you'll hear about, every piece

2:18 mechanism you'll hear about, every piece

2:18 mechanism you'll hear about, every piece of equipment, every interest rate shift

2:20 of equipment, every interest rate shift

2:20 of equipment, every interest rate shift comes from Federal Reserve agricultural

2:22 comes from Federal Reserve agricultural

2:22 comes from Federal Reserve agricultural lending data, USDA farm census records,

2:25 lending data, USDA farm census records,

2:25 lending data, USDA farm census records, and implement dealer association reports

2:27 and implement dealer association reports

2:27 and implement dealer association reports from this period. The conversations are

2:30 from this period. The conversations are

2:30 from this period. The conversations are dramatized, but the economics are real.

2:33 dramatized, but the economics are real.

2:33 dramatized, but the economics are real. The Agricultural Finance Review from the

2:35 The Agricultural Finance Review from the

2:35 The Agricultural Finance Review from the Kansas City Fed documented that farm

2:37 Kansas City Fed documented that farm

2:37 Kansas City Fed documented that farm machinery debt increased by 142% between

2:41 machinery debt increased by 142% between

2:41 machinery debt increased by 142% between 1970 and 1975. Interest rates on farm

2:45 1970 and 1975. Interest rates on farm

2:45 1970 and 1975. Interest rates on farm equipment loans went from an average of

2:46 equipment loans went from an average of

2:46 equipment loans went from an average of 7.8% in January 1973 to 12.5% by

2:51 7.8% in January 1973 to 12.5% by

2:51 7.8% in January 1973 to 12.5% by December 1975. What happened in Elkton

2:55 December 1975. What happened in Elkton

2:55 December 1975. What happened in Elkton Junction happened everywhere. Curtis

2:58 Junction happened everywhere. Curtis

2:58 Junction happened everywhere. Curtis Lindberg farmed 1600 acres in Grafton

3:01 Lindberg farmed 1600 acres in Grafton

3:01 Lindberg farmed 1600 acres in Grafton County. Not a big operation by South

3:03 County. Not a big operation by South

3:03 County. Not a big operation by South Dakota standards, but respectable.

3:06 Dakota standards, but respectable.

3:06 Dakota standards, but respectable. Wheat, corn, some soybeans. His

3:08 Wheat, corn, some soybeans. His

3:08 Wheat, corn, some soybeans. His equipment was old. Not ancient, but old.

3:12 equipment was old. Not ancient, but old.

3:12 equipment was old. Not ancient, but old. A 1968 International Harvester 1066.

3:17 A 1968 International Harvester 1066.

3:17 A 1968 International Harvester 1066. 100 horsepower paid for in 1970. A 1965

3:22 100 horsepower paid for in 1970. A 1965

3:22 100 horsepower paid for in 1970. A 1965 John Deere 4020 paid for in 1967. A 1959

3:28 John Deere 4020 paid for in 1967. A 1959

3:28 John Deere 4020 paid for in 1967. A 1959 Minneapolis Marine that he kept for

3:30 Minneapolis Marine that he kept for

3:30 Minneapolis Marine that he kept for lighter work. paid for before Curtis's

3:33 lighter work. paid for before Curtis's

3:33 lighter work. paid for before Curtis's father died in 1963. His combine was a

3:36 father died in 1963. His combine was a

3:36 father died in 1963. His combine was a 1969 Massie Ferguson 410 paid for in

3:40 1969 Massie Ferguson 410 paid for in

3:40 1969 Massie Ferguson 410 paid for in 1972. Every machine on Curtis's farm had

3:44 1972. Every machine on Curtis's farm had

3:44 1972. Every machine on Curtis's farm had one thing in common. No bank held the

3:46 one thing in common. No bank held the

3:46 one thing in common. No bank held the title. His neighbors thought he was

3:48 title. His neighbors thought he was

3:48 title. His neighbors thought he was cheap. They said it to his face

3:51 cheap. They said it to his face

3:51 cheap. They said it to his face sometimes. Lloyd Peterson ran 2400 acres

3:55 sometimes. Lloyd Peterson ran 2400 acres

3:55 sometimes. Lloyd Peterson ran 2400 acres two miles south. Lloyd had bought a new

3:57 two miles south. Lloyd had bought a new

3:57 two miles south. Lloyd had bought a new white 2 to 155 in 1972. Finance

4:03 white 2 to 155 in 1972. Finance

4:03 white 2 to 155 in 1972. Finance 155 horsepower four-wheel drive cost him

4:07 155 horsepower four-wheel drive cost him

4:07 155 horsepower four-wheel drive cost him $28,000 with $8,000 down at wheat prices

4:10 $28,000 with $8,000 down at wheat prices

4:10 $28,000 with $8,000 down at wheat prices of $4.20 a bushel. Lloyd figured he'd

4:13 of $4.20 a bushel. Lloyd figured he'd

4:14 of $4.20 a bushel. Lloyd figured he'd clear that debt in four years, maybe

4:16 clear that debt in four years, maybe

4:16 clear that debt in four years, maybe five. Dennis Kowalsski, three miles

4:19 five. Dennis Kowalsski, three miles

4:19 five. Dennis Kowalsski, three miles east, had just signed the papers on that

4:21 east, had just signed the papers on that

4:21 east, had just signed the papers on that case 1370, $19,500,

4:26 case 1370, $19,500,

4:26 case 1370, $19,500, 15% down, $2900 upfront, the rested 8

4:30 15% down, $2900 upfront, the rested 8

4:30 15% down, $2900 upfront, the rested 8 12% over 7 years, monthly payment of

4:34 12% over 7 years, monthly payment of

4:34 12% over 7 years, monthly payment of $263.

4:36 $263.

4:36 $263. Dennis was 42 years old. He'd been

4:38 Dennis was 42 years old. He'd been

4:38 Dennis was 42 years old. He'd been farming for 20 years and had never owned

4:41 farming for 20 years and had never owned

4:41 farming for 20 years and had never owned a tractor with more than 100 horsepower.

4:44 a tractor with more than 100 horsepower.

4:44 a tractor with more than 100 horsepower. The 1370 felt like stepping into the

4:47 The 1370 felt like stepping into the

4:47 The 1370 felt like stepping into the future. March 1973. Wheat was trading at

4:50 future. March 1973. Wheat was trading at

4:50 future. March 1973. Wheat was trading at 450 a bushel. The Russian grain deal had

4:53 450 a bushel. The Russian grain deal had

4:54 450 a bushel. The Russian grain deal had just gone through. The Soviets were

4:56 just gone through. The Soviets were

4:56 just gone through. The Soviets were buying everything they could get their

4:57 buying everything they could get their

4:57 buying everything they could get their hands on. Corn was at 240. Soybeans had

5:01 hands on. Corn was at 240. Soybeans had

5:01 hands on. Corn was at 240. Soybeans had hit $7. The commodity boom was real.

5:04 hit $7. The commodity boom was real.

5:04 hit $7. The commodity boom was real. Curtis watched it all with the same

5:06 Curtis watched it all with the same

5:06 Curtis watched it all with the same expression his father had worn in 1928

5:08 expression his father had worn in 1928

5:08 expression his father had worn in 1928 when wheat hit 148. His father had told

5:12 when wheat hit 148. His father had told

5:12 when wheat hit 148. His father had told him a story once about a neighbor who

5:14 him a story once about a neighbor who

5:14 him a story once about a neighbor who bought three new tractors on credit in

5:17 bought three new tractors on credit in

5:17 bought three new tractors on credit in 1929. The neighbor was gone by 1933. The

5:21 1929. The neighbor was gone by 1933. The

5:21 1929. The neighbor was gone by 1933. The tractor sold at auction for 30 cents on

5:23 tractor sold at auction for 30 cents on

5:23 tractor sold at auction for 30 cents on a dollar. Times are different now. Lloyd

5:26 a dollar. Times are different now. Lloyd

5:26 a dollar. Times are different now. Lloyd Peterson told Curtis at the co-op in

5:28 Peterson told Curtis at the co-op in

5:28 Peterson told Curtis at the co-op in April. We're not in a depression. Hell,

5:31 April. We're not in a depression. Hell,

5:31 April. We're not in a depression. Hell, we're exporting more grain than we ever

5:33 we're exporting more grain than we ever

5:33 we're exporting more grain than we ever have. The Russians need us. The Chinese

5:37 have. The Russians need us. The Chinese

5:37 have. The Russians need us. The Chinese are buying. This isn't speculation,

5:39 are buying. This isn't speculation,

5:39 are buying. This isn't speculation, Curtis. This is reality. Curtis didn't

5:42 Curtis. This is reality. Curtis didn't

5:42 Curtis. This is reality. Curtis didn't argue. He just said, "Maybe." Then he

5:45 argue. He just said, "Maybe." Then he

5:45 argue. He just said, "Maybe." Then he went home and wrote another check to

5:47 went home and wrote another check to

5:47 went home and wrote another check to himself every month. Curtis took what

5:50 himself every month. Curtis took what

5:50 himself every month. Curtis took what would have been a tractor payment, $250,

5:53 would have been a tractor payment, $250,

5:53 would have been a tractor payment, $250, and put it in an envelope in his desk

5:55 and put it in an envelope in his desk

5:55 and put it in an envelope in his desk drawer. He'd been doing it since 1970.

5:59 drawer. He'd been doing it since 1970.

5:59 drawer. He'd been doing it since 1970. By April 1973, he had $9,400

6:03 By April 1973, he had $9,400

6:03 By April 1973, he had $9,400 in that drawer. Lloyd Peterson thought

6:06 in that drawer. Lloyd Peterson thought

6:06 in that drawer. Lloyd Peterson thought Curtis was being foolish. That money

6:08 Curtis was being foolish. That money

6:08 Curtis was being foolish. That money could be earning interest in a bank.

6:11 could be earning interest in a bank.

6:11 could be earning interest in a bank. Curtis thought about his father's

6:12 Curtis thought about his father's

6:12 Curtis thought about his father's auction notices from 1934 and kept

6:15 auction notices from 1934 and kept

6:15 auction notices from 1934 and kept putting cash in the drawer. The summer

6:17 putting cash in the drawer. The summer

6:17 putting cash in the drawer. The summer of 1973 was good. Wheat came off at 38

6:20 of 1973 was good. Wheat came off at 38

6:20 of 1973 was good. Wheat came off at 38 bushels to the acre. Curtis's 1069 ran

6:24 bushels to the acre. Curtis's 1069 ran

6:24 bushels to the acre. Curtis's 1069 ran steady. No breakdowns. His 4020 handled

6:27 steady. No breakdowns. His 4020 handled

6:27 steady. No breakdowns. His 4020 handled the cultivating without complaint. Lloyd

6:30 the cultivating without complaint. Lloyd

6:30 the cultivating without complaint. Lloyd Peterson's white 2 to 155 pulled a 40ft

6:33 Peterson's white 2 to 155 pulled a 40ft

6:34 Peterson's white 2 to 155 pulled a 40ft cultivator like it wasn't even there.

6:36 cultivator like it wasn't even there.

6:36 cultivator like it wasn't even there. Dennis Kowolski's case 1370 became the

6:38 Dennis Kowolski's case 1370 became the

6:38 Dennis Kowolski's case 1370 became the talk of the county. That machine could

6:40 talk of the county. That machine could

6:40 talk of the county. That machine could work ground faster than anything anyone

6:43 work ground faster than anything anyone

6:43 work ground faster than anything anyone had ever seen. Dennis finished his

6:45 had ever seen. Dennis finished his

6:45 had ever seen. Dennis finished his spring work 10 days earlier than usual.

6:48 spring work 10 days earlier than usual.

6:48 spring work 10 days earlier than usual. He planted an extra 80 acres because he

6:51 He planted an extra 80 acres because he

6:51 He planted an extra 80 acres because he had time. His corn looked perfect by

6:53 had time. His corn looked perfect by

6:53 had time. His corn looked perfect by July at the Elks Lodge in August. The

6:56 July at the Elks Lodge in August. The

6:56 July at the Elks Lodge in August. The conversation was all optimism. Wheat was

6:59 conversation was all optimism. Wheat was

6:59 conversation was all optimism. Wheat was still over $4. Corn was pushing three.

7:03 still over $4. Corn was pushing three.

7:03 still over $4. Corn was pushing three. Dennis Kowalsski was planning to add

7:05 Dennis Kowalsski was planning to add

7:05 Dennis Kowalsski was planning to add another quarter section next year. Lloyd

7:07 another quarter section next year. Lloyd

7:07 another quarter section next year. Lloyd Peterson was thinking about a new

7:09 Peterson was thinking about a new

7:09 Peterson was thinking about a new combine. Curtis Lindberg sat in the

7:11 combine. Curtis Lindberg sat in the

7:11 combine. Curtis Lindberg sat in the corner drinking his beer, saying nothing

7:15 corner drinking his beer, saying nothing

7:15 corner drinking his beer, saying nothing when someone asked him if he was going

7:16 when someone asked him if he was going

7:16 when someone asked him if he was going to upgrade his equipment. Curtis just

7:19 to upgrade his equipment. Curtis just

7:19 to upgrade his equipment. Curtis just shook his head. I'm good with what I've

7:21 shook his head. I'm good with what I've

7:21 shook his head. I'm good with what I've got. You're leaving money on the table.

7:23 got. You're leaving money on the table.

7:24 got. You're leaving money on the table. Dennis said, "Not mean. Just stating a

7:26 Dennis said, "Not mean. Just stating a

7:26 Dennis said, "Not mean. Just stating a fact. I planted 80 more acres this year

7:30 fact. I planted 80 more acres this year

7:30 fact. I planted 80 more acres this year because of that 1370. That's $10,000 in

7:34 because of that 1370. That's $10,000 in

7:34 because of that 1370. That's $10,000 in extra revenue right there. One season.

7:37 extra revenue right there. One season.

7:37 extra revenue right there. One season. Curtis nodded. What if wheat goes to $3

7:40 Curtis nodded. What if wheat goes to $3

7:40 Curtis nodded. What if wheat goes to $3 next year? Then I'll still clear $7,000

7:43 next year? Then I'll still clear $7,000

7:43 next year? Then I'll still clear $7,000 on those 80 acres. Still worth it. What

7:46 on those 80 acres. Still worth it. What

7:46 on those 80 acres. Still worth it. What if it goes to 250? Dennis laughed. It's

7:50 if it goes to 250? Dennis laughed. It's

7:50 if it goes to 250? Dennis laughed. It's not going to 250. The world needs grain.

7:53 not going to 250. The world needs grain.

7:53 not going to 250. The world needs grain. The Russians need grain. We're exporting

7:55 The Russians need grain. We're exporting

7:56 The Russians need grain. We're exporting record amounts. Curtis, I respect what

7:58 record amounts. Curtis, I respect what

7:58 record amounts. Curtis, I respect what your dad taught you, but this is a 1930.

8:01 your dad taught you, but this is a 1930.

8:01 your dad taught you, but this is a 1930. Curtis finished his beer. You're

8:03 Curtis finished his beer. You're

8:03 Curtis finished his beer. You're probably right. But he drove home and

8:06 probably right. But he drove home and

8:06 probably right. But he drove home and put another $250 in the envelope.

8:09 put another $250 in the envelope.

8:09 put another $250 in the envelope. October 1973 changed everything. Most

8:13 October 1973 changed everything. Most

8:13 October 1973 changed everything. Most people remember the oil embargo as gas

8:15 people remember the oil embargo as gas

8:15 people remember the oil embargo as gas lines and odd rationing. Farmers

8:18 lines and odd rationing. Farmers

8:18 lines and odd rationing. Farmers remember it as the day diesel prices

8:20 remember it as the day diesel prices

8:20 remember it as the day diesel prices went from 35 cent a gallon to 55 cents

8:23 went from 35 cent a gallon to 55 cents

8:23 went from 35 cent a gallon to 55 cents overnight, then 60, then 65. By

8:27 overnight, then 60, then 65. By

8:27 overnight, then 60, then 65. By November, some co-ops were paying.7

8:30 November, some co-ops were paying.7

8:30 November, some co-ops were paying.7 cents. Curtis's 1066 burned about six

8:34 cents. Curtis's 1066 burned about six

8:34 cents. Curtis's 1066 burned about six gallons an hour on load. Lloyd

8:36 gallons an hour on load. Lloyd

8:36 gallons an hour on load. Lloyd Peterson's White 2 to 155 burn nine.

8:40 Peterson's White 2 to 155 burn nine.

8:40 Peterson's White 2 to 155 burn nine. Dennis Kowalsski's case 1370 burned 8

8:43 Dennis Kowalsski's case 1370 burned 8

8:43 Dennis Kowalsski's case 1370 burned 8 and a2. The fuel bill wasn't theoretical

8:46 and a2. The fuel bill wasn't theoretical

8:46 and a2. The fuel bill wasn't theoretical anymore. Dennis did the math in

8:48 anymore. Dennis did the math in

8:48 anymore. Dennis did the math in December. His monthly tractor payment

8:50 December. His monthly tractor payment

8:50 December. His monthly tractor payment was $263.

8:52 was $263.

8:52 was $263. His diesel bill for October and November

8:54 His diesel bill for October and November

8:54 His diesel bill for October and November combined had been $1,800 more than he

8:57 combined had been $1,800 more than he

8:57 combined had been $1,800 more than he budgeted. That was because he'd run that

9:00 budgeted. That was because he'd run that

9:00 budgeted. That was because he'd run that 1370 hard, trying to finish a drainage

9:02 1370 hard, trying to finish a drainage

9:02 1370 hard, trying to finish a drainage project before freeze up. The extra

9:05 project before freeze up. The extra

9:05 project before freeze up. The extra capacity of the big tractor had let him

9:07 capacity of the big tractor had let him

9:07 capacity of the big tractor had let him take on custom work he couldn't have

9:09 take on custom work he couldn't have

9:09 take on custom work he couldn't have handled before. But the fuel costs were

9:11 handled before. But the fuel costs were

9:11 handled before. But the fuel costs were eating into the profit margin faster

9:14 eating into the profit margin faster

9:14 eating into the profit margin faster than he'd expected. Curtis's fuel bill

9:16 than he'd expected. Curtis's fuel bill

9:16 than he'd expected. Curtis's fuel bill had gone up, too. But Curtis's 1066 was

9:19 had gone up, too. But Curtis's 1066 was

9:19 had gone up, too. But Curtis's 1066 was paid for. The $250 Curtis had been

9:22 paid for. The $250 Curtis had been

9:22 paid for. The $250 Curtis had been putting in that drawer every month since

9:25 putting in that drawer every month since

9:25 putting in that drawer every month since 1970, that covered the extra diesel cost

9:28 1970, that covered the extra diesel cost

9:28 1970, that covered the extra diesel cost with money left over. Curtis didn't say

9:30 with money left over. Curtis didn't say

9:30 with money left over. Curtis didn't say anything to Dennis. Didn't need to.

9:33 anything to Dennis. Didn't need to.

9:33 anything to Dennis. Didn't need to. Dennis could do math. January 1974, the

9:37 Dennis could do math. January 1974, the

9:37 Dennis could do math. January 1974, the Federal Reserve raised interest rates.

9:39 Federal Reserve raised interest rates.

9:39 Federal Reserve raised interest rates. The Wall Street Journal ran the

9:41 The Wall Street Journal ran the

9:41 The Wall Street Journal ran the announcement on page three. Most farmers

9:44 announcement on page three. Most farmers

9:44 announcement on page three. Most farmers never saw it, but the bankers saw it.

9:46 never saw it, but the bankers saw it.

9:46 never saw it, but the bankers saw it. And the bankers started making phone

9:48 And the bankers started making phone

9:48 And the bankers started making phone calls. See, when interest rates go up,

9:51 calls. See, when interest rates go up,

9:52 calls. See, when interest rates go up, the cost of money goes up. The implement

9:54 the cost of money goes up. The implement

9:54 the cost of money goes up. The implement dealers who financed all those tractors,

9:56 dealers who financed all those tractors,

9:56 dealers who financed all those tractors, they didn't hold those loans. They sold

9:59 they didn't hold those loans. They sold

9:59 they didn't hold those loans. They sold them to banks. And the banks sold them

10:01 them to banks. And the banks sold them

10:01 them to banks. And the banks sold them to larger banks. And when the Fed raises

10:04 to larger banks. And when the Fed raises

10:04 to larger banks. And when the Fed raises rates, everyone in that chain wants a

10:06 rates, everyone in that chain wants a

10:06 rates, everyone in that chain wants a higher return. Dennis Kowalsski got a

10:09 higher return. Dennis Kowalsski got a

10:09 higher return. Dennis Kowalsski got a letter in February. His interest rate on

10:11 letter in February. His interest rate on

10:11 letter in February. His interest rate on the case 1370 was adjustable. He hadn't

10:14 the case 1370 was adjustable. He hadn't

10:14 the case 1370 was adjustable. He hadn't focused on that part when he signed, 8

10:17 focused on that part when he signed, 8

10:17 focused on that part when he signed, 8 1.5% for the first year, then tied to

10:19 1.5% for the first year, then tied to

10:19 1.5% for the first year, then tied to prime rate plus two points. Prime rate

10:22 prime rate plus two points. Prime rate

10:22 prime rate plus two points. Prime rate had been 6% when Dennis signed. Prime

10:25 had been 6% when Dennis signed. Prime

10:25 had been 6% when Dennis signed. Prime rate was now 8 and a4. Dennis's interest

10:28 rate was now 8 and a4. Dennis's interest

10:28 rate was now 8 and a4. Dennis's interest rate was now 10 and a4%. His monthly

10:32 rate was now 10 and a4%. His monthly

10:32 rate was now 10 and a4%. His monthly payment went from $263

10:34 payment went from $263

10:34 payment went from $263 to $298.

10:37 to $298.

10:37 to $298. $35 doesn't sound like much. over 7

10:40 $35 doesn't sound like much. over 7

10:40 $35 doesn't sound like much. over 7 years that an extra $2,940.

10:44 years that an extra $2,940.

10:44 years that an extra $2,940. Dennis had just paid for the tractor

10:46 Dennis had just paid for the tractor

10:46 Dennis had just paid for the tractor twice. Lloyd Peterson's loan on the

10:48 twice. Lloyd Peterson's loan on the

10:48 twice. Lloyd Peterson's loan on the white 2 to1 155 was fixed rate, but his

10:51 white 2 to1 155 was fixed rate, but his

10:52 white 2 to1 155 was fixed rate, but his combined loan wasn't. Lloyd had bought a

10:54 combined loan wasn't. Lloyd had bought a

10:54 combined loan wasn't. Lloyd had bought a new international 915 combined in 1972.

10:58 new international 915 combined in 1972.

10:58 new international 915 combined in 1972. $26,000

11:00 $26,000

11:00 $26,000 financed at 8% fixed for 5 years, or so

11:03 financed at 8% fixed for 5 years, or so

11:03 financed at 8% fixed for 5 years, or so he thought. Turns out the fixed rate was

11:06 he thought. Turns out the fixed rate was

11:06 he thought. Turns out the fixed rate was only fixed if Prime stayed below 7%.

11:09 only fixed if Prime stayed below 7%.

11:09 only fixed if Prime stayed below 7%. Lloyd's payment jumped from $384

11:13 Lloyd's payment jumped from $384

11:13 Lloyd's payment jumped from $384 to $446 a month. Lloyd called the bank.

11:17 to $446 a month. Lloyd called the bank.

11:17 to $446 a month. Lloyd called the bank. The bank said, "Read the contract."

11:19 The bank said, "Read the contract."

11:20 The bank said, "Read the contract." Lloyd read the contract. The bank was

11:22 Lloyd read the contract. The bank was

11:22 Lloyd read the contract. The bank was right. March 1974,

11:25 right. March 1974,

11:25 right. March 1974, wheat was at $410.

11:28 wheat was at $410.

11:28 wheat was at $410. Still good. Still profitable. But diesel

11:31 Still good. Still profitable. But diesel

11:31 Still good. Still profitable. But diesel was now 75 cent a gallon. and interest

11:34 was now 75 cent a gallon. and interest

11:34 was now 75 cent a gallon. and interest rates were still climbing. Curtis

11:36 rates were still climbing. Curtis

11:36 rates were still climbing. Curtis Lindberg kept farming with his 1066 and

11:39 Lindberg kept farming with his 1066 and

11:39 Lindberg kept farming with his 1066 and his 4020 and his Minneapolis Molen. He

11:42 his 4020 and his Minneapolis Molen. He

11:42 his 4020 and his Minneapolis Molen. He spent more time in the shop than Lloyd

11:44 spent more time in the shop than Lloyd

11:44 spent more time in the shop than Lloyd or Dennis did. Old equipment breaks

11:46 or Dennis did. Old equipment breaks

11:46 or Dennis did. Old equipment breaks more. Curtis knew how to weld. He knew

11:49 more. Curtis knew how to weld. He knew

11:49 more. Curtis knew how to weld. He knew how to rebuild a hydraulic pump. He knew

11:51 how to rebuild a hydraulic pump. He knew

11:51 how to rebuild a hydraulic pump. He knew how to source used parts from salvage

11:53 how to source used parts from salvage

11:53 how to source used parts from salvage yards in three states. Lloyd Peterson

11:56 yards in three states. Lloyd Peterson

11:56 yards in three states. Lloyd Peterson once calculated that Curtis spent 400

11:58 once calculated that Curtis spent 400

11:58 once calculated that Curtis spent 400 hours a year working on equipment. Lloyd

12:01 hours a year working on equipment. Lloyd

12:01 hours a year working on equipment. Lloyd spent maybe 40. Your time is worth

12:04 spent maybe 40. Your time is worth

12:04 spent maybe 40. Your time is worth something," Lloyd told him. Curtis

12:06 something," Lloyd told him. Curtis

12:06 something," Lloyd told him. Curtis agreed. But Curtis's time didn't cost

12:09 agreed. But Curtis's time didn't cost

12:09 agreed. But Curtis's time didn't cost him $298 a month, plus interest. Curtis

12:13 him $298 a month, plus interest. Curtis

12:13 him $298 a month, plus interest. Curtis was 58 years old that winter of 1974. He

12:16 was 58 years old that winter of 1974. He

12:16 was 58 years old that winter of 1974. He had started working with his father at

12:18 had started working with his father at

12:18 had started working with his father at 12, 46 years carrying 20 lb tools, lying

12:22 12, 46 years carrying 20 lb tools, lying

12:22 12, 46 years carrying 20 lb tools, lying on icy concrete under transmissions,

12:25 on icy concrete under transmissions,

12:25 on icy concrete under transmissions, forcing stuck bolts with a 5 foot long

12:28 forcing stuck bolts with a 5 foot long

12:28 forcing stuck bolts with a 5 foot long torque wrench for 100 hours a year every

12:31 torque wrench for 100 hours a year every

12:31 torque wrench for 100 hours a year every year for 46 years. If you grew up doing

12:34 year for 46 years. If you grew up doing

12:34 year for 46 years. If you grew up doing this kind of work, the kind where rest

12:37 this kind of work, the kind where rest

12:37 this kind of work, the kind where rest just meant switching which body part was

12:39 just meant switching which body part was

12:39 just meant switching which body part was being destroyed that day, I've put

12:41 being destroyed that day, I've put

12:41 being destroyed that day, I've put something in the description. It's a few

12:43 something in the description. It's a few

12:43 something in the description. It's a few simple questions about changes you

12:45 simple questions about changes you

12:45 simple questions about changes you probably noticed but never really paid

12:47 probably noticed but never really paid

12:47 probably noticed but never really paid attention to. It takes 90 seconds. The

12:50 attention to. It takes 90 seconds. The

12:50 attention to. It takes 90 seconds. The pattern you'll see might be important or

12:52 pattern you'll see might be important or

12:52 pattern you'll see might be important or it might be nothing, but at least you'll

12:54 it might be nothing, but at least you'll

12:54 it might be nothing, but at least you'll know. This is where I want your opinion.

12:57 know. This is where I want your opinion.

12:57 know. This is where I want your opinion. When you're surrounded by neighbors

12:58 When you're surrounded by neighbors

12:58 When you're surrounded by neighbors upgrading, all making it work.

13:01 upgrading, all making it work.

13:01 upgrading, all making it work. Everyone's yields going up. Is the

13:03 Everyone's yields going up. Is the

13:03 Everyone's yields going up. Is the cautious man smart or just scared? Tell

13:05 cautious man smart or just scared? Tell

13:06 cautious man smart or just scared? Tell me what you think in the comments. The

13:08 me what you think in the comments. The

13:08 me what you think in the comments. The spring of 1974 was wet. Planting dragged

13:11 spring of 1974 was wet. Planting dragged

13:11 spring of 1974 was wet. Planting dragged into May. Dennis Kowalsski's case 1370

13:14 into May. Dennis Kowalsski's case 1370

13:14 into May. Dennis Kowalsski's case 1370 worked mud better than Curtis's 1066.

13:18 worked mud better than Curtis's 1066.

13:18 worked mud better than Curtis's 1066. Dennis finished planting on May 18th.

13:21 Dennis finished planting on May 18th.

13:21 Dennis finished planting on May 18th. Curtis finished on May 26th, 8 days

13:23 Curtis finished on May 26th, 8 days

13:24 Curtis finished on May 26th, 8 days later, Dennis's corn had eight more days

13:26 later, Dennis's corn had eight more days

13:26 later, Dennis's corn had eight more days of growing season. Come September, that

13:29 of growing season. Come September, that

13:29 of growing season. Come September, that would matter. Dennis reminded himself of

13:31 would matter. Dennis reminded himself of

13:31 would matter. Dennis reminded himself of that when he wrote the check for $298

13:35 that when he wrote the check for $298

13:35 that when he wrote the check for $298 on June 1st, the tractor was working.

13:38 on June 1st, the tractor was working.

13:38 on June 1st, the tractor was working. The tractor was earning its keep. The

13:40 The tractor was earning its keep. The

13:40 The tractor was earning its keep. The payment hurt, but it was manageable.

13:43 payment hurt, but it was manageable.

13:43 payment hurt, but it was manageable. Curtis wrote out his $250 check to

13:45 Curtis wrote out his $250 check to

13:45 Curtis wrote out his $250 check to himself on June 1st. Put it in the

13:48 himself on June 1st. Put it in the

13:48 himself on June 1st. Put it in the envelope. The envelope was getting

13:50 envelope. The envelope was getting

13:50 envelope. The envelope was getting thick. Curtis had been doing this for 4

13:53 thick. Curtis had been doing this for 4

13:53 thick. Curtis had been doing this for 4 years. Even after pulling some out for

13:55 years. Even after pulling some out for

13:55 years. Even after pulling some out for diesel costs, he had $14,300

13:59 diesel costs, he had $14,300

13:59 diesel costs, he had $14,300 in that drawer. He thought about his

14:01 in that drawer. He thought about his

14:01 in that drawer. He thought about his father's auction notices from 1934. He

14:04 father's auction notices from 1934. He

14:04 father's auction notices from 1934. He put the envelope back in the desk. July

14:07 put the envelope back in the desk. July

14:07 put the envelope back in the desk. July 1974, wheat started falling 410 in

14:10 1974, wheat started falling 410 in

14:10 1974, wheat started falling 410 in March, 380 in July, 350 by August. The

14:15 March, 380 in July, 350 by August. The

14:15 March, 380 in July, 350 by August. The US government, worried about domestic

14:17 US government, worried about domestic

14:17 US government, worried about domestic food prices, had started limiting

14:19 food prices, had started limiting

14:19 food prices, had started limiting exports. The Russians were still buying,

14:21 exports. The Russians were still buying,

14:22 exports. The Russians were still buying, but not at the same pace. The boom was

14:24 but not at the same pace. The boom was

14:24 but not at the same pace. The boom was softening, not crashing, just

14:27 softening, not crashing, just

14:27 softening, not crashing, just [clears throat] softening. Dennis

14:28 [clears throat] softening. Dennis

14:28 [clears throat] softening. Dennis Kowalsski's pencil work in August showed

14:30 Kowalsski's pencil work in August showed

14:30 Kowalsski's pencil work in August showed he'd still be fine. Weed at 350 still

14:34 he'd still be fine. Weed at 350 still

14:34 he'd still be fine. Weed at 350 still covered his costs barely. If corn came

14:37 covered his costs barely. If corn came

14:37 covered his costs barely. If corn came in strong, he'd be okay. His 80 extra

14:40 in strong, he'd be okay. His 80 extra

14:40 in strong, he'd be okay. His 80 extra acres would save him. Curtis's costs

14:42 acres would save him. Curtis's costs

14:42 acres would save him. Curtis's costs were lower. His 1066 might burn more

14:45 were lower. His 1066 might burn more

14:45 were lower. His 1066 might burn more fuel per acre than Dennis's 1370 because

14:48 fuel per acre than Dennis's 1370 because

14:48 fuel per acre than Dennis's 1370 because it was less efficient. But Curtis didn't

14:50 it was less efficient. But Curtis didn't

14:50 it was less efficient. But Curtis didn't have a $298 monthly payment hanging over

14:53 have a $298 monthly payment hanging over

14:53 have a $298 monthly payment hanging over him. Curtis's break even price on wheat

14:55 him. Curtis's break even price on wheat

14:56 him. Curtis's break even price on wheat was $2.30 a bushel. Dennis's was $2.85.

15:00 was $2.30 a bushel. Dennis's was $2.85.

15:00 was $2.30 a bushel. Dennis's was $2.85. That 55 cent difference was everything.

15:03 That 55 cent difference was everything.

15:03 That 55 cent difference was everything. September 1974

15:06 September 1974

15:06 September 1974 harvest. Dennis's corn came off at 142

15:09 harvest. Dennis's corn came off at 142

15:09 harvest. Dennis's corn came off at 142 bushels to the acre. Beautiful. His 80

15:12 bushels to the acre. Beautiful. His 80

15:12 bushels to the acre. Beautiful. His 80 extra acres yielded 11,360

15:15 extra acres yielded 11,360

15:15 extra acres yielded 11,360 bushels. At $3 a bushel, that was 34,080

15:20 bushels. At $3 a bushel, that was 34,080

15:20 bushels. At $3 a bushel, that was 34,080 gross revenue. Curtis's corn average 138

15:24 gross revenue. Curtis's corn average 138

15:24 gross revenue. Curtis's corn average 138 bushels to the acre for bushels less.

15:27 bushels to the acre for bushels less.

15:27 bushels to the acre for bushels less. Dennis had been right about the planning

15:28 Dennis had been right about the planning

15:28 Dennis had been right about the planning date advantage. The case 1370 had made a

15:32 date advantage. The case 1370 had made a

15:32 date advantage. The case 1370 had made a real measurable difference. But then

15:35 real measurable difference. But then

15:35 real measurable difference. But then October happened. Corn prices dropped to

15:37 October happened. Corn prices dropped to

15:37 October happened. Corn prices dropped to 240. Then 225. The market was flooded.

15:42 240. Then 225. The market was flooded.

15:42 240. Then 225. The market was flooded. Everyone had planted fence row. Defense

15:44 Everyone had planted fence row. Defense

15:44 Everyone had planted fence row. Defense row. The grain elevators were full. The

15:47 row. The grain elevators were full. The

15:47 row. The grain elevators were full. The export market had materialized the way

15:49 export market had materialized the way

15:49 export market had materialized the way the USDA had projected. By November,

15:52 the USDA had projected. By November,

15:52 the USDA had projected. By November, corn was at $218.

15:55 corn was at $218.

15:55 corn was at $218. Dennis's 80 extra acres, which should

15:58 Dennis's 80 extra acres, which should

15:58 Dennis's 80 extra acres, which should have netted him 34,000 gross, actually

16:01 have netted him 34,000 gross, actually

16:01 have netted him 34,000 gross, actually brought in 24,688.

16:04 After seed, fertilizer, fuel, and time,

16:07 After seed, fertilizer, fuel, and time,

16:07 After seed, fertilizer, fuel, and time, Dennis cleared about 9,000 on those

16:09 Dennis cleared about 9,000 on those

16:09 Dennis cleared about 9,000 on those acres. Still profitable, still worth it,

16:12 acres. Still profitable, still worth it,

16:12 acres. Still profitable, still worth it, but the margin was thinning. Curtis

16:15 but the margin was thinning. Curtis

16:15 but the margin was thinning. Curtis hadn't planted any extra acres. Curtis

16:18 hadn't planted any extra acres. Curtis

16:18 hadn't planted any extra acres. Curtis had planted what he always planted. His

16:20 had planted what he always planted. His

16:20 had planted what he always planted. His yields were four bushels lower per acre,

16:22 yields were four bushels lower per acre,

16:22 yields were four bushels lower per acre, but his costs were also lower. Curtis

16:25 but his costs were also lower. Curtis

16:25 but his costs were also lower. Curtis cleared about the same per acre as

16:27 cleared about the same per acre as

16:27 cleared about the same per acre as Dennis. The efficiency advantage of the

16:29 Dennis. The efficiency advantage of the

16:29 Dennis. The efficiency advantage of the bigger tractor was disappearing under

16:31 bigger tractor was disappearing under

16:31 bigger tractor was disappearing under the weight of the monthly payment.

16:33 the weight of the monthly payment.

16:33 the weight of the monthly payment. January 1975,

16:36 January 1975,

16:36 January 1975, Federal Reserve raised rates again.

16:38 Federal Reserve raised rates again.

16:38 Federal Reserve raised rates again. Prime hit 9%. Dennis Kowalsski's

16:41 Prime hit 9%. Dennis Kowalsski's

16:41 Prime hit 9%. Dennis Kowalsski's adjusted rate on the case 1370 went to

16:44 adjusted rate on the case 1370 went to

16:44 adjusted rate on the case 1370 went to 11%. His monthly payment became $322.

16:49 11%. His monthly payment became $322.

16:49 11%. His monthly payment became $322. Dennis sat at his kitchen table with a

16:51 Dennis sat at his kitchen table with a

16:51 Dennis sat at his kitchen table with a pencil and paper. 72 months left on the

16:54 pencil and paper. 72 months left on the

16:54 pencil and paper. 72 months left on the loan. $322

16:56 loan. $322

16:56 loan. $322 a month. That was $23,184

17:01 for a tractor that cost $19,500.

17:04 for a tractor that cost $19,500.

17:04 for a tractor that cost $19,500. When he bought it, he'd already paid

17:06 When he bought it, he'd already paid

17:06 When he bought it, he'd already paid 5,200.

17:08 5,200.

17:08 5,200. He was going to pay 28,384

17:11 He was going to pay 28,384

17:11 He was going to pay 28,384 total for a tractor that was now 2 years

17:14 total for a tractor that was now 2 years

17:14 total for a tractor that was now 2 years old and probably worth 11,000 on the

17:16 old and probably worth 11,000 on the

17:16 old and probably worth 11,000 on the used market. Lloyd Peterson's white 2

17:19 used market. Lloyd Peterson's white 2

17:19 used market. Lloyd Peterson's white 2 to1 155 payment hit $492

17:23 to1 155 payment hit $492

17:23 to1 155 payment hit $492 a month. Lloyd had 26 payments left, but

17:27 a month. Lloyd had 26 payments left, but

17:27 a month. Lloyd had 26 payments left, but Lloyd also had combined payment. And

17:29 Lloyd also had combined payment. And

17:29 Lloyd also had combined payment. And Lloyd had just financed a new grain

17:31 Lloyd had just financed a new grain

17:31 Lloyd had just financed a new grain truck. Lloyd's total monthly equipment

17:34 truck. Lloyd's total monthly equipment

17:34 truck. Lloyd's total monthly equipment debt was $840.

17:37 debt was $840.

17:37 debt was $840. Lloyd farmed 2400 acres. Good acres. But

17:41 Lloyd farmed 2400 acres. Good acres. But

17:41 Lloyd farmed 2400 acres. Good acres. But $840 a month is $10,80 a year. every

17:45 $840 a month is $10,80 a year. every

17:45 $840 a month is $10,80 a year. every year, whether wheat is $4 or $2.

17:49 year, whether wheat is $4 or $2.

17:49 year, whether wheat is $4 or $2. February 1975,

17:52 February 1975,

17:52 February 1975, Curtis's 1066 threw a rod. Catastrophic

17:55 Curtis's 1066 threw a rod. Catastrophic

17:55 Curtis's 1066 threw a rod. Catastrophic engine failure. The tractor seized up in

17:57 engine failure. The tractor seized up in

17:58 engine failure. The tractor seized up in the middle of a field. Curtis had it

17:59 the middle of a field. Curtis had it

18:00 the middle of a field. Curtis had it towed back to the shop. A rebuilt engine

18:02 towed back to the shop. A rebuilt engine

18:02 towed back to the shop. A rebuilt engine would cost $2,200 plus labor. Curtis

18:05 would cost $2,200 plus labor. Curtis

18:05 would cost $2,200 plus labor. Curtis could do the labor himself, but he'd

18:07 could do the labor himself, but he'd

18:07 could do the labor himself, but he'd need three weeks. Or he could buy a used

18:11 need three weeks. Or he could buy a used

18:11 need three weeks. Or he could buy a used tractor. Curtis drove to Watertown.

18:13 tractor. Curtis drove to Watertown.

18:13 tractor. Curtis drove to Watertown. There was an auction, estate sale,

18:16 There was an auction, estate sale,

18:16 There was an auction, estate sale, farmer had died. The family was selling

18:19 farmer had died. The family was selling

18:19 farmer had died. The family was selling everything. Curtis looked at a 1970

18:22 everything. Curtis looked at a 1970

18:22 everything. Curtis looked at a 1970 International 1456

18:25 International 1456

18:25 International 1456 130 horsepower turbo diesel clean

18:28 130 horsepower turbo diesel clean

18:28 130 horsepower turbo diesel clean tractor. The bidding opened at 4500.

18:31 tractor. The bidding opened at 4500.

18:31 tractor. The bidding opened at 4500. Curtis watched the price climbed to

18:34 Curtis watched the price climbed to

18:34 Curtis watched the price climbed to 6,200. 7,7500.

18:38 6,200. 7,7500.

18:38 6,200. 7,7500. Curtis raised his hand. 8,000. Someone

18:41 Curtis raised his hand. 8,000. Someone

18:41 Curtis raised his hand. 8,000. Someone else bid $8,200. Curtis bid $8,500. The

18:45 else bid $8,200. Curtis bid $8,500. The

18:45 else bid $8,200. Curtis bid $8,500. The other guy shook his head. Curtis bought

18:48 other guy shook his head. Curtis bought

18:48 other guy shook his head. Curtis bought the tractor for $8,500.

18:50 the tractor for $8,500.

18:50 the tractor for $8,500. He went to his truck, opened the glove

18:52 He went to his truck, opened the glove

18:52 He went to his truck, opened the glove box, pulled out the envelope that had

18:55 box, pulled out the envelope that had

18:55 box, pulled out the envelope that had been sitting in his desk drawer. He

18:57 been sitting in his desk drawer. He

18:57 been sitting in his desk drawer. He count out $8,500 in cash, paid for the

19:01 count out $8,500 in cash, paid for the

19:01 count out $8,500 in cash, paid for the tractor on the spot, drove it home that

19:03 tractor on the spot, drove it home that

19:03 tractor on the spot, drove it home that afternoon. Dennis Kowalsski heard about

19:05 afternoon. Dennis Kowalsski heard about

19:05 afternoon. Dennis Kowalsski heard about at the co-op. You paid cash for a

19:08 at the co-op. You paid cash for a

19:08 at the co-op. You paid cash for a tractor? Paid cash. Curtis confirmed.

19:11 tractor? Paid cash. Curtis confirmed.

19:11 tractor? Paid cash. Curtis confirmed. Where' you get $8,500?

19:14 Where' you get $8,500?

19:14 Where' you get $8,500? Saved it. Dennis thought about his $322

19:18 Saved it. Dennis thought about his $322

19:18 Saved it. Dennis thought about his $322 monthly payment. Thought about the

19:19 monthly payment. Thought about the

19:20 monthly payment. Thought about the $23,000 he still owed on a tractor that

19:23 $23,000 he still owed on a tractor that

19:23 $23,000 he still owed on a tractor that was losing value every month. You've

19:25 was losing value every month. You've

19:25 was losing value every month. You've been saving equipment money all this

19:27 been saving equipment money all this

19:27 been saving equipment money all this time. Every month. Why would I paid to a

19:30 time. Every month. Why would I paid to a

19:30 time. Every month. Why would I paid to a bank? I paid to myself. Been doing it

19:33 bank? I paid to myself. Been doing it

19:33 bank? I paid to myself. Been doing it since 1970.

19:35 since 1970.

19:35 since 1970. Dennis didn't say anything, but he did

19:37 Dennis didn't say anything, but he did

19:37 Dennis didn't say anything, but he did the math. 5 years, $250 a month. That

19:42 the math. 5 years, $250 a month. That

19:42 the math. 5 years, $250 a month. That was $15,000.

19:44 was $15,000.

19:44 was $15,000. Curtis had spent $8,500 on the 1456.

19:48 Curtis had spent $8,500 on the 1456.

19:48 Curtis had spent $8,500 on the 1456. That left 6,500 in the fund. Curtis had

19:51 That left 6,500 in the fund. Curtis had

19:52 That left 6,500 in the fund. Curtis had just replaced his primary tractor with a

19:54 just replaced his primary tractor with a

19:54 just replaced his primary tractor with a newer, bigger, more powerful machine, no

19:57 newer, bigger, more powerful machine, no

19:57 newer, bigger, more powerful machine, no loan, no payment, no interest. If you've

20:01 loan, no payment, no interest. If you've

20:01 loan, no payment, no interest. If you've noticed your own body doesn't bounce

20:02 noticed your own body doesn't bounce

20:02 noticed your own body doesn't bounce back like it did when you were pulling

20:04 back like it did when you were pulling

20:04 back like it did when you were pulling wrenches and wrestling old equipment

20:06 wrenches and wrestling old equipment

20:06 wrenches and wrestling old equipment every day, I left a short quiz in the

20:09 every day, I left a short quiz in the

20:09 every day, I left a short quiz in the description. 10 simple questions about

20:11 description. 10 simple questions about

20:11 description. 10 simple questions about how your joints actually function now.

20:13 how your joints actually function now.

20:14 how your joints actually function now. Takes about 90 seconds. No diagnosis,

20:18 Takes about 90 seconds. No diagnosis,

20:18 Takes about 90 seconds. No diagnosis, just patterns that might be worth

20:19 just patterns that might be worth

20:19 just patterns that might be worth recognizing. Spring 1975,

20:23 recognizing. Spring 1975,

20:23 recognizing. Spring 1975, wheat was at 320 a bushel. Corn was at

20:26 wheat was at 320 a bushel. Corn was at

20:26 wheat was at 320 a bushel. Corn was at 240. The recession had bottomed.

20:28 240. The recession had bottomed.

20:28 240. The recession had bottomed. Unemployment was at 9% nationally. In

20:32 Unemployment was at 9% nationally. In

20:32 Unemployment was at 9% nationally. In rural South Dakota, it was worse. The

20:34 rural South Dakota, it was worse. The

20:34 rural South Dakota, it was worse. The implement dealers were quiet. Nobody was

20:37 implement dealers were quiet. Nobody was

20:37 implement dealers were quiet. Nobody was buying new tractors. The dealers who'd

20:39 buying new tractors. The dealers who'd

20:39 buying new tractors. The dealers who'd written all those loans in 1973 and 1974

20:44 written all those loans in 1973 and 1974

20:44 written all those loans in 1973 and 1974 were now watching farmers struggle to

20:46 were now watching farmers struggle to

20:46 were now watching farmers struggle to make payments. Dennis Kowalsski planted

20:49 make payments. Dennis Kowalsski planted

20:49 make payments. Dennis Kowalsski planted in April. His case 1370 ran fine. The

20:52 in April. His case 1370 ran fine. The

20:52 in April. His case 1370 ran fine. The machine itself wasn't a problem. The

20:55 machine itself wasn't a problem. The

20:55 machine itself wasn't a problem. The machine was still one of the best

20:56 machine was still one of the best

20:56 machine was still one of the best tractors made. But every time Dennis

20:59 tractors made. But every time Dennis

20:59 tractors made. But every time Dennis wrote that $322 check, he felt it. He'd

21:02 wrote that $322 check, he felt it. He'd

21:02 wrote that $322 check, he felt it. He'd done the math. If he'd saved that money

21:05 done the math. If he'd saved that money

21:05 done the math. If he'd saved that money instead of making payments, he could

21:06 instead of making payments, he could

21:06 instead of making payments, he could have bought a good used tractor outright

21:08 have bought a good used tractor outright

21:08 have bought a good used tractor outright by now. But he hadn't. He believed the

21:11 by now. But he hadn't. He believed the

21:11 by now. But he hadn't. He believed the dealer. He believed the boom would last.

21:14 dealer. He believed the boom would last.

21:14 dealer. He believed the boom would last. Curtis planted with his 1456.

21:17 Curtis planted with his 1456.

21:17 Curtis planted with his 1456. The tractor ran strong.

21:20 The tractor ran strong.

21:20 The tractor ran strong. 130 horsepower, plenty for 1,600 acres.

21:23 130 horsepower, plenty for 1,600 acres.

21:23 130 horsepower, plenty for 1,600 acres. Curtis's equipment fund still had $6,500

21:27 Curtis's equipment fund still had $6,500

21:27 Curtis's equipment fund still had $6,500 in it. He kept putting $ 250 a month

21:29 in it. He kept putting $ 250 a month

21:29 in it. He kept putting $ 250 a month back in. By the end of 1975, he'd have

21:33 back in. By the end of 1975, he'd have

21:33 back in. By the end of 1975, he'd have $9,000. He was already thinking about a

21:35 $9,000. He was already thinking about a

21:36 $9,000. He was already thinking about a better combine. The used market was

21:38 better combine. The used market was

21:38 better combine. The used market was getting interesting. Farmers were

21:40 getting interesting. Farmers were

21:40 getting interesting. Farmers were selling. Prices were dropping. June

21:43 selling. Prices were dropping. June

21:43 selling. Prices were dropping. June 1975,

21:45 1975,

21:45 1975, Lloyd Peterson got a call from his bank.

21:47 Lloyd Peterson got a call from his bank.

21:47 Lloyd Peterson got a call from his bank. The bank wanted to review his loan

21:49 The bank wanted to review his loan

21:49 The bank wanted to review his loan portfolio. Lloyd drove into Elkton

21:52 portfolio. Lloyd drove into Elkton

21:52 portfolio. Lloyd drove into Elkton Junction, sat down with the loan

21:54 Junction, sat down with the loan

21:54 Junction, sat down with the loan officer. The bank was concerned. Lloyd's

21:57 officer. The bank was concerned. Lloyd's

21:57 officer. The bank was concerned. Lloyd's debt to equity ratio had shifted. Land

22:00 debt to equity ratio had shifted. Land

22:00 debt to equity ratio had shifted. Land values had flattened. Commodity prices

22:02 values had flattened. Commodity prices

22:02 values had flattened. Commodity prices had fallen. Lloyd's cash flow

22:04 had fallen. Lloyd's cash flow

22:04 had fallen. Lloyd's cash flow projections assumed wheat at 350 and

22:07 projections assumed wheat at 350 and

22:07 projections assumed wheat at 350 and corn at 260. Current prices were below

22:10 corn at 260. Current prices were below

22:10 corn at 260. Current prices were below that. The bank wanted Lloyd to bring his

22:12 that. The bank wanted Lloyd to bring his

22:12 that. The bank wanted Lloyd to bring his operating loan current. Lloyd owed

22:15 operating loan current. Lloyd owed

22:15 operating loan current. Lloyd owed 14,000 on the operating loan. The bank

22:18 14,000 on the operating loan. The bank

22:18 14,000 on the operating loan. The bank wanted it paid down at 8,000. By August,

22:22 wanted it paid down at 8,000. By August,

22:22 wanted it paid down at 8,000. By August, Lloyd explained that harvest was in

22:24 Lloyd explained that harvest was in

22:24 Lloyd explained that harvest was in September. He'd have the money then. The

22:27 September. He'd have the money then. The

22:27 September. He'd have the money then. The bank said they understood, but policy

22:29 bank said they understood, but policy

22:29 bank said they understood, but policy was policy. $6,000 by August or they'd

22:33 was policy. $6,000 by August or they'd

22:33 was policy. $6,000 by August or they'd have to reconsider his credit line for

22:34 have to reconsider his credit line for

22:34 have to reconsider his credit line for next year. Lloyd left the bank and drove

22:37 next year. Lloyd left the bank and drove

22:37 next year. Lloyd left the bank and drove home. He sat at his kitchen table. He

22:40 home. He sat at his kitchen table. He

22:40 home. He sat at his kitchen table. He had $4,000 in his checking account. He

22:43 had $4,000 in his checking account. He

22:43 had $4,000 in his checking account. He needed $6,000. He called his brother in

22:46 needed $6,000. He called his brother in

22:46 needed $6,000. He called his brother in Omaha, borrowed 2,000, paid the bank,

22:50 Omaha, borrowed 2,000, paid the bank,

22:50 Omaha, borrowed 2,000, paid the bank, wrote the check on August 15th. Wheat

22:53 wrote the check on August 15th. Wheat

22:53 wrote the check on August 15th. Wheat harvest started August 20th. Lloyd's

22:55 harvest started August 20th. Lloyd's

22:55 harvest started August 20th. Lloyd's wheat came off at 34 bushels the acre at

22:58 wheat came off at 34 bushels the acre at

22:58 wheat came off at 34 bushels the acre at $3.20 a bushel. That was $18.80

23:03 $3.20 a bushel. That was $18.80

23:03 $3.20 a bushel. That was $18.80 per acre. Lloyd had 800 acres of wheat.

23:06 per acre. Lloyd had 800 acres of wheat.

23:06 per acre. Lloyd had 800 acres of wheat. Gross revenue $87,040.

23:10 Gross revenue $87,040.

23:10 Gross revenue $87,040. Sounded good. But Lloyd's costs were $58

23:13 Sounded good. But Lloyd's costs were $58

23:13 Sounded good. But Lloyd's costs were $58 an acre. Seed, fertilizer, fuel,

23:16 an acre. Seed, fertilizer, fuel,

23:16 an acre. Seed, fertilizer, fuel, chemicals, insurance, loan payments. Net

23:20 chemicals, insurance, loan payments. Net

23:20 chemicals, insurance, loan payments. Net $50.80 per acre. Total net $40,640.

23:27 Not bad. But Lloyd owed his brother

23:29 Not bad. But Lloyd owed his brother

23:30 Not bad. But Lloyd owed his brother 2,000. Lloyd's equipment payments for

23:32 2,000. Lloyd's equipment payments for

23:32 2,000. Lloyd's equipment payments for the year totaled 10,000. Lloyd had

23:35 the year totaled 10,000. Lloyd had

23:35 the year totaled 10,000. Lloyd had 40,000. 640 coming in and 12,000 going

23:39 40,000. 640 coming in and 12,000 going

23:39 40,000. 640 coming in and 12,000 going out immediately. That left 28,640

23:43 out immediately. That left 28,640

23:43 out immediately. That left 28,640 for everything else. Property taxes,

23:46 for everything else. Property taxes,

23:46 for everything else. Property taxes, living expenses, repairs, winter fuel,

23:51 living expenses, repairs, winter fuel,

23:51 living expenses, repairs, winter fuel, operating loan for next spring. Curtis

23:53 operating loan for next spring. Curtis

23:53 operating loan for next spring. Curtis harvested in late August. His wheat came

23:56 harvested in late August. His wheat came

23:56 harvested in late August. His wheat came off at 33 bushels per acre, one bushel

23:59 off at 33 bushels per acre, one bushel

23:59 off at 33 bushels per acre, one bushel less than Lloyd's. Curtis had 600 acres

24:01 less than Lloyd's. Curtis had 600 acres

24:01 less than Lloyd's. Curtis had 600 acres of wheat. Gross revenue $63,360.

24:07 Curtis's costs were $41 per acre. Lower

24:10 Curtis's costs were $41 per acre. Lower

24:10 Curtis's costs were $41 per acre. Lower input costs, no equipment payments. Net

24:14 input costs, no equipment payments. Net

24:14 input costs, no equipment payments. Net $62.20

24:15 $62.20

24:16 $62.20 per acre. Total net $37,320.

24:21 Curtis had no equipment debt, no loan to

24:24 Curtis had no equipment debt, no loan to

24:24 Curtis had no equipment debt, no loan to pay back, no brother in Omaha covering

24:27 pay back, no brother in Omaha covering

24:27 pay back, no brother in Omaha covering gaps. Curtis's 37,000 was actually his.

24:31 gaps. Curtis's 37,000 was actually his.

24:32 gaps. Curtis's 37,000 was actually his. October 1975,

24:34 October 1975,

24:34 October 1975, Dennis Kowalsski's corn came off at 134

24:37 Dennis Kowalsski's corn came off at 134

24:37 Dennis Kowalsski's corn came off at 134 bushels to the acre, down from 142 the

24:40 bushels to the acre, down from 142 the

24:40 bushels to the acre, down from 142 the year before. Too much rain in July,

24:43 year before. Too much rain in July,

24:43 year before. Too much rain in July, still respectable, but corn was at

24:45 still respectable, but corn was at

24:45 still respectable, but corn was at $2.35.

24:48 $2.35.

24:48 $2.35. Dennis's margin was gone. He cleared $19

24:51 Dennis's margin was gone. He cleared $19

24:51 Dennis's margin was gone. He cleared $19 an acre after costs on $1,200 acres of

24:55 an acre after costs on $1,200 acres of

24:55 an acre after costs on $1,200 acres of corn. That was $22,800.

24:59 corn. That was $22,800.

24:59 corn. That was $22,800. Dennis's equipment payments for the year

25:01 Dennis's equipment payments for the year

25:02 Dennis's equipment payments for the year were $3,864.

25:04 were $3,864.

25:04 were $3,864. Add his operating loan, and Dennis

25:06 Add his operating loan, and Dennis

25:06 Add his operating loan, and Dennis netted about $16,000 for the year. He'd

25:09 netted about $16,000 for the year. He'd

25:09 netted about $16,000 for the year. He'd worked 1,600 acres and netted $16,000,

25:14 worked 1,600 acres and netted $16,000,

25:14 worked 1,600 acres and netted $16,000, $10 an acre. Curtis's corn came off at

25:17 $10 an acre. Curtis's corn came off at

25:17 $10 an acre. Curtis's corn came off at 130 to the acre, slightly lower than

25:19 130 to the acre, slightly lower than

25:20 130 to the acre, slightly lower than Dennis, but Curtis's costs were lower.

25:23 Dennis, but Curtis's costs were lower.

25:23 Dennis, but Curtis's costs were lower. Curtis netted $24 per acre on,00 acres.

25:27 Curtis netted $24 per acre on,00 acres.

25:27 Curtis netted $24 per acre on,00 acres. That was $26,400.

25:31 Curtis had worked fewer acres than

25:33 Curtis had worked fewer acres than

25:33 Curtis had worked fewer acres than Dennis and netted more money. November

25:35 Dennis and netted more money. November

25:35 Dennis and netted more money. November 1975.

25:37 1975.

25:37 1975. Dennis Kowalsski sat in his shop looking

25:39 Dennis Kowalsski sat in his shop looking

25:40 Dennis Kowalsski sat in his shop looking at the case. 1370. Beautiful machine.

25:43 at the case. 1370. Beautiful machine.

25:43 at the case. 1370. Beautiful machine. Still ran like new. He maintained it

25:45 Still ran like new. He maintained it

25:45 Still ran like new. He maintained it perfectly, but that monthly payment was

25:48 perfectly, but that monthly payment was

25:48 perfectly, but that monthly payment was killing him. $322

25:51 killing him. $322

25:51 killing him. $322 a month. 60 months left. $19,320

25:56 a month. 60 months left. $19,320

25:56 a month. 60 months left. $19,320 remaining. The tractor was worth maybe

25:59 remaining. The tractor was worth maybe

25:59 remaining. The tractor was worth maybe $9,000 on the used market now. Dennis

26:01 $9,000 on the used market now. Dennis

26:02 $9,000 on the used market now. Dennis was underwater by $10,000.

26:04 was underwater by $10,000.

26:04 was underwater by $10,000. He drove to Curtis's farm. Curtis was in

26:07 He drove to Curtis's farm. Curtis was in

26:07 He drove to Curtis's farm. Curtis was in the shop changing oil on the 1456.

26:10 the shop changing oil on the 1456.

26:10 the shop changing oil on the 1456. Dennis watched him work for a minute,

26:12 Dennis watched him work for a minute,

26:12 Dennis watched him work for a minute, then said, "You tried to tell us."

26:15 then said, "You tried to tell us."

26:15 then said, "You tried to tell us." Curtis wiped his hands on a rag. Wasn't

26:18 Curtis wiped his hands on a rag. Wasn't

26:18 Curtis wiped his hands on a rag. Wasn't trying to tell anybody anything. I was

26:20 trying to tell anybody anything. I was

26:20 trying to tell anybody anything. I was just doing what I knew. The rest of us

26:22 just doing what I knew. The rest of us

26:22 just doing what I knew. The rest of us thought you were cheap. I know you

26:25 thought you were cheap. I know you

26:25 thought you were cheap. I know you weren't cheap. You were smart. Curtis

26:28 weren't cheap. You were smart. Curtis

26:28 weren't cheap. You were smart. Curtis didn't answer right away. Then he said,

26:31 didn't answer right away. Then he said,

26:31 didn't answer right away. Then he said, "My dad used to say something. He'd say,

26:34 "My dad used to say something. He'd say,

26:34 "My dad used to say something. He'd say, the only debt that doesn't hurt is debt

26:36 the only debt that doesn't hurt is debt

26:36 the only debt that doesn't hurt is debt you don't have." I didn't really

26:38 you don't have." I didn't really

26:38 you don't have." I didn't really understand it until I was older, but

26:41 understand it until I was older, but

26:41 understand it until I was older, but once I understood it, I couldn't unhear

26:43 once I understood it, I couldn't unhear

26:43 once I understood it, I couldn't unhear it. Dennis looked at the 1370 through

26:46 it. Dennis looked at the 1370 through

26:46 it. Dennis looked at the 1370 through the shop window. I can't get out from

26:48 the shop window. I can't get out from

26:48 the shop window. I can't get out from under it. Even if I sold it tomorrow,

26:50 under it. Even if I sold it tomorrow,

26:50 under it. Even if I sold it tomorrow, I'd still owe 10,000. Can you make the

26:53 I'd still owe 10,000. Can you make the

26:53 I'd still owe 10,000. Can you make the payments this year? Yeah, next year. If

26:57 payments this year? Yeah, next year. If

26:57 payments this year? Yeah, next year. If prices stay where they are, maybe if

26:59 prices stay where they are, maybe if

26:59 prices stay where they are, maybe if they drop anymore, Dennis didn't finish

27:02 they drop anymore, Dennis didn't finish

27:02 they drop anymore, Dennis didn't finish the sentence. Curtis finished it for

27:04 the sentence. Curtis finished it for

27:04 the sentence. Curtis finished it for him. Then you'll be in trouble. Then

27:07 him. Then you'll be in trouble. Then

27:07 him. Then you'll be in trouble. Then I'll be in real trouble. December 1975.

27:11 I'll be in real trouble. December 1975.

27:11 I'll be in real trouble. December 1975. Curtis added another $250 to his

27:14 Curtis added another $250 to his

27:14 Curtis added another $250 to his equipment fund. The fund now had $11,200

27:18 equipment fund. The fund now had $11,200

27:18 equipment fund. The fund now had $11,200 in it. Curtis saw a Gleaner L2 combined

27:21 in it. Curtis saw a Gleaner L2 combined

27:21 in it. Curtis saw a Gleaner L2 combined at an auction in Hiron. Clean machine,

27:24 at an auction in Hiron. Clean machine,

27:24 at an auction in Hiron. Clean machine, low hours, opened at 12,000 went for

27:27 low hours, opened at 12,000 went for

27:28 low hours, opened at 12,000 went for $14,05.

27:29 $14,05.

27:29 $14,05. Curtis didn't bid too high, but he

27:32 Curtis didn't bid too high, but he

27:32 Curtis didn't bid too high, but he watched who bought it. Cash buyer from

27:34 watched who bought it. Cash buyer from

27:34 watched who bought it. Cash buyer from Minnesota. The used equipment market was

27:37 Minnesota. The used equipment market was

27:37 Minnesota. The used equipment market was changing. The guys with cash were

27:39 changing. The guys with cash were

27:39 changing. The guys with cash were finding deals. The guys with debt were

27:42 finding deals. The guys with debt were

27:42 finding deals. The guys with debt were trying to hang on. January 1976,

27:45 trying to hang on. January 1976,

27:46 trying to hang on. January 1976, Federal Reserve held rates steady. That

27:48 Federal Reserve held rates steady. That

27:48 Federal Reserve held rates steady. That was the good news. The bad news was that

27:51 was the good news. The bad news was that

27:51 was the good news. The bad news was that steady meant prime at 9 and a4%. Dennis

27:54 steady meant prime at 9 and a4%. Dennis

27:54 steady meant prime at 9 and a4%. Dennis Kowolski's rate stayed at 11. His

27:56 Kowolski's rate stayed at 11. His

27:56 Kowolski's rate stayed at 11. His payment stayed at $322.

27:59 payment stayed at $322.

27:59 payment stayed at $322. Dennis had 58 months left, $18,676,

28:05 remaining on a tractor worth $8,000.

28:08 remaining on a tractor worth $8,000.

28:08 remaining on a tractor worth $8,000. Lloyd Peterson's white 2 to 155 payment

28:11 Lloyd Peterson's white 2 to 155 payment

28:11 Lloyd Peterson's white 2 to 155 payment was still $4.92 a month, but Lloyd's

28:14 was still $4.92 a month, but Lloyd's

28:14 was still $4.92 a month, but Lloyd's combine was paid off as a January. That

28:17 combine was paid off as a January. That

28:17 combine was paid off as a January. That freed up $446

28:19 freed up $446

28:19 freed up $446 a month. Lloyd breath easier for the

28:22 a month. Lloyd breath easier for the

28:22 a month. Lloyd breath easier for the first time in 2 years, but he paid

28:24 first time in 2 years, but he paid

28:24 first time in 2 years, but he paid $41,300

28:26 $41,300

28:26 $41,300 total for a combine he bought for

28:28 total for a combine he bought for

28:28 total for a combine he bought for $26,000. Interest and adjustable rates

28:31 $26,000. Interest and adjustable rates

28:31 $26,000. Interest and adjustable rates had cost Lloyd $15,000.

28:34 had cost Lloyd $15,000.

28:34 had cost Lloyd $15,000. Lloyd tried not to think about it.

28:36 Lloyd tried not to think about it.

28:36 Lloyd tried not to think about it. Spring 1976.

28:38 Spring 1976.

28:38 Spring 1976. Curtis bought a used gleaner El Combine.

28:41 Curtis bought a used gleaner El Combine.

28:41 Curtis bought a used gleaner El Combine. Private sale. Farmer retiring. $13,500.

28:47 Private sale. Farmer retiring. $13,500.

28:47 Private sale. Farmer retiring. $13,500. Curtis paid cash. His equipment fund

28:49 Curtis paid cash. His equipment fund

28:49 Curtis paid cash. His equipment fund took the hit but didn't empty. He kept

28:51 took the hit but didn't empty. He kept

28:51 took the hit but didn't empty. He kept putting $250 a month back. The fund was

28:54 putting $250 a month back. The fund was

28:54 putting $250 a month back. The fund was self-sustaining now. Curtis had figured

28:56 self-sustaining now. Curtis had figured

28:56 self-sustaining now. Curtis had figured out what his father had known. If you

28:58 out what his father had known. If you

28:58 out what his father had known. If you save what you paid in debt, eventually

29:00 save what you paid in debt, eventually

29:00 save what you paid in debt, eventually you could buy outright. And buying

29:03 you could buy outright. And buying

29:03 you could buy outright. And buying outright meant no interest, no bank, no

29:06 outright meant no interest, no bank, no

29:06 outright meant no interest, no bank, no risk. Dennis Kowalsski watched Curtis

29:09 risk. Dennis Kowalsski watched Curtis

29:09 risk. Dennis Kowalsski watched Curtis unload the gleaner. You just replace

29:11 unload the gleaner. You just replace

29:11 unload the gleaner. You just replace your whole equipment line in 2 years

29:14 your whole equipment line in 2 years

29:14 your whole equipment line in 2 years without taking a loan. Didn't replace

29:16 without taking a loan. Didn't replace

29:16 without taking a loan. Didn't replace everything. Still got the 4020. Still

29:19 everything. Still got the 4020. Still

29:20 everything. Still got the 4020. Still got the amum. You know what I mean?

29:23 got the amum. You know what I mean?

29:23 got the amum. You know what I mean? Curtis did know. Curtis had just

29:25 Curtis did know. Curtis had just

29:25 Curtis did know. Curtis had just upgraded two major pieces of equipment

29:27 upgraded two major pieces of equipment

29:27 upgraded two major pieces of equipment for a combined $20,000.

29:30 for a combined $20,000.

29:30 for a combined $20,000. Paid cash. Dennis was still paying on a

29:33 Paid cash. Dennis was still paying on a

29:33 Paid cash. Dennis was still paying on a single tractor and would be for another

29:35 single tractor and would be for another

29:35 single tractor and would be for another 4 and 1/2 years. The summer of 1976 was

29:38 4 and 1/2 years. The summer of 1976 was

29:38 4 and 1/2 years. The summer of 1976 was dry. Wheat yields dropped. Curtis's

29:41 dry. Wheat yields dropped. Curtis's

29:41 dry. Wheat yields dropped. Curtis's wheat came off at 28 bushels to the

29:43 wheat came off at 28 bushels to the

29:44 wheat came off at 28 bushels to the acre. Lloyd Peterson's came off at 29.

29:47 acre. Lloyd Peterson's came off at 29.

29:47 acre. Lloyd Peterson's came off at 29. Dennis Kowolski's came off at 30. Wheat

29:50 Dennis Kowolski's came off at 30. Wheat

29:50 Dennis Kowolski's came off at 30. Wheat was at $35.

29:52 was at $35.

29:52 was at $35. Nobody was making much money. Curtis

29:54 Nobody was making much money. Curtis

29:54 Nobody was making much money. Curtis cleared $38 an acre. Lloyd cleared 23.

29:59 cleared $38 an acre. Lloyd cleared 23.

29:59 cleared $38 an acre. Lloyd cleared 23. Dennis cleared 9. The efficiency of

30:01 Dennis cleared 9. The efficiency of

30:01 Dennis cleared 9. The efficiency of Dennis's bigger tractor couldn't

30:03 Dennis's bigger tractor couldn't

30:03 Dennis's bigger tractor couldn't overcome the weight of the payment. Not

30:05 overcome the weight of the payment. Not

30:05 overcome the weight of the payment. Not in a year when yields were down and

30:07 in a year when yields were down and

30:07 in a year when yields were down and prices were flat. September 1976,

30:11 prices were flat. September 1976,

30:11 prices were flat. September 1976, Curtis's corn came off at 112 bushels to

30:14 Curtis's corn came off at 112 bushels to

30:14 Curtis's corn came off at 112 bushels to the acre. Terrible year, but corn was at

30:17 the acre. Terrible year, but corn was at

30:17 the acre. Terrible year, but corn was at 250, up from 235 the previous fall.

30:20 250, up from 235 the previous fall.

30:20 250, up from 235 the previous fall. Curtis netted $18 an acre. Not great,

30:24 Curtis netted $18 an acre. Not great,

30:24 Curtis netted $18 an acre. Not great, but Curtis had no debt. $18 an acre on

30:27 but Curtis had no debt. $18 an acre on

30:27 but Curtis had no debt. $18 an acre on 1100 acres was $19,800.

30:31 Add the weed income and Curtis netted

30:34 Add the weed income and Curtis netted

30:34 Add the weed income and Curtis netted about $42,000 for the year. He'd worked

30:37 about $42,000 for the year. He'd worked

30:37 about $42,000 for the year. He'd worked the same acres as always and cleared

30:39 the same acres as always and cleared

30:39 the same acres as always and cleared 42,000. Dennis Kowalsski worked 1600

30:43 42,000. Dennis Kowalsski worked 1600

30:43 42,000. Dennis Kowalsski worked 1600 acres and netted 14,000. The equipment

30:46 acres and netted 14,000. The equipment

30:46 acres and netted 14,000. The equipment payment was the difference. By the end

30:48 payment was the difference. By the end

30:48 payment was the difference. By the end of 1976,

30:50 of 1976,

30:50 of 1976, the pattern was clear. Curtis Lindberg

30:52 the pattern was clear. Curtis Lindberg

30:52 the pattern was clear. Curtis Lindberg was farming profitably with older, paid

30:55 was farming profitably with older, paid

30:55 was farming profitably with older, paid for equipment. His neighbors with

30:57 for equipment. His neighbors with

30:57 for equipment. His neighbors with financed tractors were working harder,

30:59 financed tractors were working harder,

30:59 financed tractors were working harder, farming more acres and netting less. The

31:02 farming more acres and netting less. The

31:02 farming more acres and netting less. The math didn't lie. The efficiency gains

31:04 math didn't lie. The efficiency gains

31:04 math didn't lie. The efficiency gains from bigger tractors couldn't overcome

31:06 from bigger tractors couldn't overcome

31:06 from bigger tractors couldn't overcome the compound effect of interest and debt

31:08 the compound effect of interest and debt

31:08 the compound effect of interest and debt service. Not when commodity prices were

31:11 service. Not when commodity prices were

31:11 service. Not when commodity prices were flat or falling. Dennis Kowalsski made

31:13 flat or falling. Dennis Kowalsski made

31:13 flat or falling. Dennis Kowalsski made it through 1977. Barely. He sold 40

31:17 it through 1977. Barely. He sold 40

31:17 it through 1977. Barely. He sold 40 acres to make a balloon payment on his

31:20 acres to make a balloon payment on his

31:20 acres to make a balloon payment on his operating loan. That hurt, but it kept

31:22 operating loan. That hurt, but it kept

31:22 operating loan. That hurt, but it kept him farming. Lloyd Peterson made it

31:24 him farming. Lloyd Peterson made it

31:24 him farming. Lloyd Peterson made it through two, but Lloyd stopped sleeping

31:27 through two, but Lloyd stopped sleeping

31:27 through two, but Lloyd stopped sleeping well. The white two to 155 will be paid

31:31 well. The white two to 155 will be paid

31:31 well. The white two to 155 will be paid off in 1978. Lloyd counted days. Curtis

31:35 off in 1978. Lloyd counted days. Curtis

31:35 off in 1978. Lloyd counted days. Curtis kept farming, kept saving. By 1978, his

31:39 kept farming, kept saving. By 1978, his

31:39 kept farming, kept saving. By 1978, his equipment fund had $18,000 in it. He

31:42 equipment fund had $18,000 in it. He

31:42 equipment fund had $18,000 in it. He bought a used four-wheel drivetractor

31:44 bought a used four-wheel drivetractor

31:44 bought a used four-wheel drivetractor that year. Versatile 700. Good machine,

31:48 that year. Versatile 700. Good machine,

31:48 that year. Versatile 700. Good machine, 13,000. Paid cash. Curtis now had a

31:51 13,000. Paid cash. Curtis now had a

31:51 13,000. Paid cash. Curtis now had a four-wheel drive tractor, two

31:53 four-wheel drive tractor, two

31:53 four-wheel drive tractor, two conventional tractors, and a modern

31:55 conventional tractors, and a modern

31:55 conventional tractors, and a modern combine, zero debt. His neighbors had

31:58 combine, zero debt. His neighbors had

31:58 combine, zero debt. His neighbors had newer equipment and debt that wouldn't

32:01 newer equipment and debt that wouldn't

32:01 newer equipment and debt that wouldn't end until the early 1980s. The story

32:03 end until the early 1980s. The story

32:03 end until the early 1980s. The story doesn't have a dramatic ending because

32:05 doesn't have a dramatic ending because

32:06 doesn't have a dramatic ending because the lesson isn't dramatic. It's

32:08 the lesson isn't dramatic. It's

32:08 the lesson isn't dramatic. It's arithmetic. Curtis Lindberg had learned

32:10 arithmetic. Curtis Lindberg had learned

32:10 arithmetic. Curtis Lindberg had learned from his father who had learned from the

32:12 from his father who had learned from the

32:12 from his father who had learned from the 1930s. Never finance a tractor. Never

32:16 1930s. Never finance a tractor. Never

32:16 1930s. Never finance a tractor. Never finance equipment. If you can't pay

32:18 finance equipment. If you can't pay

32:18 finance equipment. If you can't pay cash, you can't afford it. Save the

32:20 cash, you can't afford it. Save the

32:20 cash, you can't afford it. Save the payment instead. Eventually, you'll have

32:23 payment instead. Eventually, you'll have

32:23 payment instead. Eventually, you'll have cash, and cash buys you freedom. Dennis

32:26 cash, and cash buys you freedom. Dennis

32:26 cash, and cash buys you freedom. Dennis Kowalsski made his last payment on the

32:28 Kowalsski made his last payment on the

32:28 Kowalsski made his last payment on the case 1370 in February 1981. Total paid

32:33 case 1370 in February 1981. Total paid

32:33 case 1370 in February 1981. Total paid $29,000 for $112 for a tractor that cost

32:37 $29,000 for $112 for a tractor that cost

32:37 $29,000 for $112 for a tractor that cost 19,500

32:38 19,500

32:38 19,500 new. The tractor was now 8 years old,

32:41 new. The tractor was now 8 years old,

32:41 new. The tractor was now 8 years old, worth maybe 5,000 on the used market.

32:44 worth maybe 5,000 on the used market.

32:44 worth maybe 5,000 on the used market. Dennis had paid six times its current

32:46 Dennis had paid six times its current

32:46 Dennis had paid six times its current value when you factored in opportunity

32:48 value when you factored in opportunity

32:48 value when you factored in opportunity cost and inflation. The tractor still

32:51 cost and inflation. The tractor still

32:51 cost and inflation. The tractor still ran fine. But every time Dennis climbed

32:53 ran fine. But every time Dennis climbed

32:54 ran fine. But every time Dennis climbed into that seat, he thought about what

32:56 into that seat, he thought about what

32:56 into that seat, he thought about what Curtis had tried to tell them in 1973.

32:59 Curtis had tried to tell them in 1973.

32:59 Curtis had tried to tell them in 1973. Curtis Lindberg farmed until 1989. He

33:02 Curtis Lindberg farmed until 1989. He

33:02 Curtis Lindberg farmed until 1989. He never financed a piece of equipment in

33:04 never financed a piece of equipment in

33:04 never financed a piece of equipment in his life. His equipment fund strategy

33:07 his life. His equipment fund strategy

33:07 his life. His equipment fund strategy became legendary in Grafton County. By

33:10 became legendary in Grafton County. By

33:10 became legendary in Grafton County. By the mid 1980s, younger farmers started

33:13 the mid 1980s, younger farmers started

33:13 the mid 1980s, younger farmers started asking him how he did it. Curtis always

33:15 asking him how he did it. Curtis always

33:15 asking him how he did it. Curtis always gave the same answer. Decide what you'd

33:18 gave the same answer. Decide what you'd

33:18 gave the same answer. Decide what you'd be willing to pay a bank every month.

33:20 be willing to pay a bank every month.

33:20 be willing to pay a bank every month. Then pay yourself instead. Do it long

33:22 Then pay yourself instead. Do it long

33:22 Then pay yourself instead. Do it long enough and eventually you don't need the

33:25 enough and eventually you don't need the

33:25 enough and eventually you don't need the bank. The implement dealers in Elkton

33:27 bank. The implement dealers in Elkton

33:27 bank. The implement dealers in Elkton Junction didn't like Curtis much. He

33:30 Junction didn't like Curtis much. He

33:30 Junction didn't like Curtis much. He bought used. He paid cash. He never

33:33 bought used. He paid cash. He never

33:33 bought used. He paid cash. He never signed financing papers. But Curtis

33:36 signed financing papers. But Curtis

33:36 signed financing papers. But Curtis didn't care what the dealers thought. He

33:38 didn't care what the dealers thought. He

33:38 didn't care what the dealers thought. He cared about what the auctioneer thought.

33:40 cared about what the auctioneer thought.

33:40 cared about what the auctioneer thought. And in 37 years of farming, Curtis

33:43 And in 37 years of farming, Curtis

33:43 And in 37 years of farming, Curtis Lindberg never once had to worry about

33:45 Lindberg never once had to worry about

33:45 Lindberg never once had to worry about the auctioneer showing up at his place.

33:47 the auctioneer showing up at his place.

33:47 the auctioneer showing up at his place. The bills came for Dennis Kowalsski and

33:49 The bills came for Dennis Kowalsski and

33:49 The bills came for Dennis Kowalsski and Lloyd Peterson. They made it through,

33:52 Lloyd Peterson. They made it through,

33:52 Lloyd Peterson. They made it through, but they paid a price. Curtis Lindberg

33:54 but they paid a price. Curtis Lindberg

33:54 but they paid a price. Curtis Lindberg tried to tell them in 1973. They didn't

33:57 tried to tell them in 1973. They didn't

33:57 tried to tell them in 1973. They didn't listen. Not because they were stupid.

34:00 listen. Not because they were stupid.

34:00 listen. Not because they were stupid. They weren't. They listen to dealers who

34:02 They weren't. They listen to dealers who

34:02 They weren't. They listen to dealers who believe in their own products and

34:04 believe in their own products and

34:04 believe in their own products and bankers who believe in the commodity

34:06 bankers who believe in the commodity

34:06 bankers who believe in the commodity boom. Curtis listened to his father,

34:08 boom. Curtis listened to his father,

34:08 boom. Curtis listened to his father, who'd seen what happened when you

34:10 who'd seen what happened when you

34:10 who'd seen what happened when you borrowed against a future you couldn't

34:12 borrowed against a future you couldn't

34:12 borrowed against a future you couldn't control. Being right didn't make Curtis

34:15 control. Being right didn't make Curtis

34:15 control. Being right didn't make Curtis wealthy. It just meant he was still

34:17 wealthy. It just meant he was still

34:17 wealthy. It just meant he was still farming when others weren't. Sometimes

34:20 farming when others weren't. Sometimes

34:20 farming when others weren't. Sometimes that's what winning looks like. This

34:22 that's what winning looks like. This

34:22 that's what winning looks like. This channel exists because these stories,

34:24 channel exists because these stories,

34:24 channel exists because these stories, the warnings that went unheard, the debt

34:27 the warnings that went unheard, the debt

34:27 the warnings that went unheard, the debt that looked manageable until it wasn't

34:29 that looked manageable until it wasn't

34:29 that looked manageable until it wasn't matter. These are the financial

34:31 matter. These are the financial

34:31 matter. These are the financial histories that shaped American

34:32 histories that shaped American

34:32 histories that shaped American agriculture. If you think preserving

34:35 agriculture. If you think preserving

34:35 agriculture. If you think preserving this is worth doing, subscribe.