80 acresRichard Oswald on his new 80 acres.

Another day older and deeper in debt. That description fits me to a “T.”

I signed my first promissory note in 1967. I was 17 years old. To the best of my memory I have not been out of debt since. When my youngest son, Brandon, decided to leave the farm to attend college I resigned myself to the fact that I would probably be the last farmer in our family. I was prepared to settle into a conservative life style of zero debt, modest living, and certificates of deposit, with my wife of 40 years, Linda, by my side. Then Brandon’s renewed friendship with a girl from Oklahoma turned into love, marriage, and the desire to raise a family on the farm. Another family meant earning another living, more land…and more debt.

(To hear Richard’s Marketplace commentary on his 80 acres, go here.)

There’s nothing cheap about farming. Compared to the cost of land, machinery, fertilizer, and seed, the crops we grow are the cheapest things on the farm.

Manufacturer financed at 5.9 percent interest, harvesters costing $200,000 are a bargain. Seed purchases, direct from the company at $4 per pound, are financed at prime plus two percent. Fertilizer, fuel and the rest? My friendly aggie banker is happy to oblige. In the Midwest today the average farm covers about 750 high priced acres, which points out the fact that some things shouldn’t be bought, not even by a chronic debtor like me.

For instance:

Our neighbors, Herman and Betty, have passed away, but their daughter kept the farm. Then we noticed her driving around with a realtor the other day. When we called to see what was up, we learned she hopes to turn the farm into cash at the rate of $4,000 per acre. After a sleepless night I rose in the wee hours knowing that there was no way in hell that I could afford the added debt of 240 acres at a price of nearly $1 million. A downturn in the farm economy and land prices, like I’ve already seen two or three times already, could take everything we own and leave us bankrupt. Investors are satisfied with a 4 5/8 percent return on their money, and right now, $4,000 an acre land will earn that premium.

But farm mortgage rates are more than 7 percent. Based on history, I figured the big farmers around here would buy the farm anyway. So I did the best I could and offered $3,800 for the 80-acre field across the road.

She took it. Relief turned to dread, and then resignation. Now all I have to do is borrow and repay $304,000.

Now I’m deeper in hock than ever and loving every minute of it. It’ll be a long time before I see a return from my labor on the neighboring 80 acres. But that’s the way it is here in Middle America, where we’re willing to give our time away just to do the work we were born to do.

I guess you could say I owe my soul to the company store.

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