thor - 7/7/2020 08:05

He farmed about 900 acres consistently grossed 90000 to $120000. He typically had a net of 17 to $25000, Many considered him wealthy. 1974 hit and a lot of the wheat was contracted at $2.30 to .40, people thought they hit a home run with that but as we all know wheat went to $5+ and many of the other commodity's followed. Some of the people who today are wealthy didnt honor those contracts, delivering to other elevators for $5. There are a few of us that remember that but of what value? Unfortunately just like $5+ corn most costs doubled, fertilizers went through the roof and machinery values exploded. Those guys; A. didnt farm enough to bankroll large stockpiles of working capital  B. Spent any extra cash on new machines that have long been disposed of.  4430s and 1066s were introduced about 72. C. Much of the machinery was financed as were land purchases. D. Even fixed loans were called if there was a short covering from the collateralized asset. In most cases this caused a refinance at a higher interest.

Land in 71 sold for $150 to $300 per acre, Rent was 15 to $30, by 74 land sold for $1000 to $1500 and rents went to $80. By 76 wheat was around $3 and all other cost stayed up. My Dad had purchased a new 806 in 69 for $6500, in 1977 i was working for the local IH dealer as a salesman. I still remember, i could sell a new 1086 for $21500 and a 1482 combine for about the same. New 1480 combines were $44000, JDs were typically 10% higher. I bought my first land in 81 (sales was not for me) for $1450 ac and it peaked that fall at about $1900. Obviously all this info is relative to "here" but the scenario was the same no matter where "here" is. By the mid 90s land had retracted to about 60% of the peak in 81 and of course there was a ton of interest paid in the previous decade which had a lot to do with the retracement. 

This was the long way of saying there was a lot of pain, farmers in that time period had little education, what they knew about business was instincts in most cases. Both my father and fil had to quit school in the 8th grade, they were needed on the farm because older brothers had gone off to wars. Were we to see 8% interest again, those would look like good days, dont be so smug.