PINGREE, N.D.-David Glinz worries that farmers are coming dangerously close to reliving the 1980s farm credit crisis.
He knows all about that.
Glinz, 73, farms as Glinz Farms LLC, near Pingree, and is the only farming survivor in an epic farming meltdown. He and his audacious father, Arvel, and his younger brother, Bruce, together controlled 75,000 acres in North Dakota, South Dakota and Minnesota.
Individually, David was farming more than 50,000 acres of non-irrigated wheat in 1982, when his banker said he'd have to pay off a whopping $20 million of debt in 30 days. He said, "No way," and negotiated to forfeit 10,000 acres in exchange for a write-down, which forgives some debt while holding him liable for the balance of debt.
Arvel and sons
David's father, Arvel, out of the military after WWII, started farming in Bottineau County in the 1950s and amassing 4,000 acres. He sold out in 1960 to buy 4,000 acres in the Jamestown area in a tax foreclosure for former farming titan Fay Heasley.
In 1962, Arvel made headlines (and a company movie) when he was the first in the nation to buy a John Deere 5010 tractor rated at 117 horsepower-the biggest in its day. "My dad was always ahead of his time," David recalls.
In 1969, Arvel "ran out of cash flow" because of low prices and his appetite for land. Arvel sold his machinery. The bank turned to David, then age 28, to take a loan as primary operator of the 13,000 acres.
"I bought two, Steiger 3300 tractors for $28,000 apiece," David recalls. He seeded 13,000 acres by running "night and day" with a 56-foot drill and one field cultivator. He proudly posed with his six Steiger tractors in 1973. In the late 1970s, he'd run 11 combines for the harvest-eight of his own and three from a custom combiner.
In 1974, Russia bought U.S. wheat and prices skyrocketed-for a year. Machinery prices shot up. David and his brother Bruce gained fame for holding a machinery auction sale that filled the Jamestown Civic Center.
"I bought all new machinery that day," David says.
"To be honest, I didn't appreciate it that day," David recalls. "I just thought, 'We're going to do this again.'"
He sought more research to combat wild oats. He pushed for a higher loan value for wheat, the commodity that was still king in North Dakota.
Eventually, Arvel rented much of his farmland to David and shifted into real estate, both farm and urban.
In 1982, even as Norwest Bank (later Wells Fargo), put the pressure on, David was still optimistic. He calculated a return from the $4.05 per bushel federal grain loan rate plus a 26.5 cent per bushel annual federal storage payment, and thought the returns would increase from that level. "In my mind, with inflation, in a year or two down the road, we'd have $4.50 (per bushel) to $4.80 loan rate on wheat." The U.S. loan rate for several years was within about one cent of the world price for wheat.
Instead of going up, under the Reagan administration, the loan rate declined to $3.70 in 1983, $3.30 in 1984 and $2.70 in 1985.
"It didn't work at all," David says.
'It was crazy!'
The land value had peaked at $750 an acre and was falling fast. Buyers with the capacity to buy it held back, thinking it would go lower if they waited, and they were right.
There was only a brief respite from a federal "payment-in-kind" program that flushed federal farmer-owned reserve grain from on-farm storage, putting money in farm pockets and sending farmers literally flying across the country to counties where they could get the best deal on PIK "certificates," They'd use the "certs" to "redeem" stored grain in what was called the "quick PIK-and-roll" play.
A pivotal disaster for the Glinzes happened when Arvel set up Bruce in 2,000 acres in the Hallock, Minn., and Drayton, N.D., area of the northern Red River Valley. The land had been owned by Jamestown friend Freddie Mutschler, who had filed Chapter 11 bankruptcy on Jan. 6, 1983. The land turned out to be too wet to seed. Without today's prevent-plant crop insurance, the Glinzes suffered a big loss.
Bruce filed Chapter 11 bankruptcy on Jan. 28, 1983, converted to a Chapter 7 liquidation a few months later.
Glinz, Mutschler show
There were more than 60 tractors and farm vehicles and about 100 farmers into a tractorcade. Arvel (later bankrupted with $13 million in debt) and Mutschler ($6.5 million in debt) supplied the people to run the machines that circled banks and disrupted business for part of a day.
Maynard Helgaas, a director of Stutsman County Bank, and also the John Deere dealership at the time, after "confronting" the angry farmers at the entrance to the bank. He told the Fargo Forum that the tractorcade was his two mega-farmer customers-Mutschler and Glinz-and that they'd borrowed tractors from his dealership for the event. (Helgaas today is the father-in-law of current North Dakota Gov. Doug Burgum.)
On March 18, 1983, Arvel and his wife filed for Chapter 11 bankruptcy. They ended up with little or nothing and blamed their attorney, Frederick Dale Kraemer, who went on to be disbarred in June 1985 for federal mail fraud and other charges stemming from an unrelated case.
Seeing the money and time that Arvel and Bruce spent in bankruptcy motivated David to stay out of it. But he used the threat of bankruptcy as a negotiating point. Lenders "were always scared that you'd file bankruptcy," David says, due to high legal costs and dubious returns.
In 1983, David slimmed down to about 32,000 acres and in 1989, too, to the 13,000 acres he farms today.
As "backup plans," from 1986 to 1991, he attended Jamestown College, thinking he might become an ag banker.
In the 1990s, David tried to right his financial ship by buying into farmer-owned value-added cooperatives that were started to add value to the region's crops. "The only good one was Dakota Growers Pasta Co.," he says. "All of the rest of them lost money."
David and his wife Barbara went into the trucking business, running 12 hopper bottoms from coast to coast. They invested $1.5 million over a five-year period to build more than 4 million bushels of commercially-licensed storage, storing for companies like CHS, Cargill, and Archer Daniels Midland.
Things were different for the Glinzes after the 1980s.
Bruce attempted farming again but died in a car crash on Sept. 16, 1999. Arvel continued in a real estate, owning land around Jamestown that wasn't developed in his time. He died in August 2010 at age 89.
Barbara, who had been active in the farm, now has advanced stages of Alzheimer's disease.
In July 2017, a loan officer and accountant from his lending agency met with David and the group strongly told him it was time to pull back on farming.
"It was a wake-up call-tough love," David says. "I'd been losing money the last few years," he says, shrugging. "It seems like every acre of corn I'm losing money on."
In March 2018, David sold 1,800 acres off and a line of machinery. He now farms about 11,500 acres. He has gone back to 30-year-old combines-five John Deere 9610s. He shifted to soybeans, which has been a challenge during the Trump tariff and trade wars.
His daughter, Sasha, 45, started into farming 320 acres in 2018 and will double that in 2019. "When you're not used to it, it's hard to jump into multi-million-dollars worth of debt," David says.
David is concerned about today's environment of high-priced new equipment, and high-priced labor and parts. Investing in the latest precision agriculture tools is expensive. He doesn't expect interest rates will skyrocket to the 20 percent level in the 1980s. He says even a 1 percentage point increase from a 4 percent interest rate is a 20 percent increase on bigger amounts of money.
One thing's for sure, he says, chuckling: he'll "avoid the temptation" of refinancing his farm this time around.
Read the other parts of Mikkel Pates's series on the 1980s farm crisis: