About This Episode
Shay Foulk leans against a planter in Mineral, Illinois, to hear how Rick Childs got started. He did not particularly want to farm, but an opportunity came up down the road from where he grew up and his grandfather told him to take it. That was 1978, he was 23, fresh out of college, and running 450 acres farrow to finish with a couple thousand head of hogs and a couple hundred head of cattle a year, farming 50/50 with a landlord who was a family friend.
The 1980s shaped everything after. Childs carried no land debt and no operating debt, and the livestock is what got the operation through, but there was no extra money for equipment. His bank made him build cash flows, which he calls an eye-opener he never dropped. Early on a lender wanted 18 percent to finance cattle; the landlord told him where to send them, offered 5 percent, and in the end never charged him anything. He has used the same banker for 42 years.
Now leaning out from about 2,000 acres and renting ground to his sons Brian and Brad, Childs is working through transition with the family. He insisted both boys work off the farm first and never pushed them to come back, and he says being business-minded matters more than being a farmer. They are in their late 30s and early 40s, so the decision cannot wait much longer. His plainest lesson: when something is not working, stop riding it, and judge results over ten years rather than one.
“I think the most important thing is know your numbers.”
— Rick Childs
Key Takeaways
Childs started in 1978 at age 23 with 450 acres farrow to finish, a couple thousand hogs and a couple hundred head of cattle a year, farming 50/50 with a landlord.
He survived the 1980s because he carried no land debt and no operating debt, and because the livestock enterprise carried the crop side.
A bank once quoted him 18 percent to finance cattle. His landlord financed him at 5 percent instead and ultimately never charged him anything, which is what he now wants to do for his sons.
Cash flows the bank forced on him in the 1980s became the habit he credits most: know your numbers and never fall behind on debt you cannot service.
He required both sons to work off-farm first and never pushed them to return. Both are now in their late 30s and early 40s with the decision due.
His mistake lesson from the 1998 hog debacle: when something is not working, change sooner rather than later, and judge the operation on a ten-year average, not one year.
Full Transcript
Narrator: Hey, podcast! Thanks for tuning in to another episode of our Dad's Wisdom series. We're always thrilled to have on the guests that we do and think that there's a lot to learn from the people out there in agriculture. With that being said, if you have someone that you think would be a great candidate for Dad's Wisdom, please, please reach out to us. There's so much knowledge. We always get great things out of these conversations, and we want to make sure that we're passing that along. So if you know someone that has a great story, someone that's instilled a lot of wisdom in your life, doesn't necessarily have to be a father, could be mother, brother, aunt, uncle, or just someone in the community that's had an impact on your life, please reach out to us. We would love to share their story and love to have them on. Thanks again for tuning in to the Ag View Pitch.
Shay
Foulk: Welcome to another episode of the Ag View Pitch, and today we are in Mineral Illinois, and we're doing another Dad's Wisdom. And I'm standing here leaning against the planter because it looks like it's about ready to go with Rick Childs. And Rick, go ahead and introduce yourself. Tell us a little bit about yourself and your farm operation and a little bit about where you're located.
Rick
Childs: Well, I'm— my name is Rick Childs, and I farm about— well, I was up to around 2,000. I'm kind of leaning out now. I'm kind of winding down, so I Started renting some of my ground to the boys, and, and I'm located in Mineral, Illinois, which was in the northwest part of the state.
Shay
Foulk: Okay, so we're leaning up against the planter and the tractor is pointed at the planter. It's not really hooked up, but weather conditions here, I know last week started warming up a little bit. You getting the itch to go to the field yet here or what?
Rick
Childs: I think we were close to being able to do something. Not— I wouldn't plant, but We didn't get a lot done last fall because of conditions, and so it was really improving, but today it's rained all day, so we'll see. But we're still in good, pretty good shape.
Shay
Foulk: Yeah, well, we're here on March 9th, and, and today we had the fun of sitting down and working through some stuff with the family and having, having a good conversation. And, and so, in Dad's wisdom, what we like to do a little bit is just kind of have you tell us a little bit about your history. So I'd like to have you start out by just telling us a little bit about, you know, how you got started farming. I mean, you were talking a little bit about that earlier. Tell us a little bit about how you got started.
Rick
Childs: Well, I really didn't want to, to be honest with you, and an opportunity came up down the road from where I grew up, and my grandfather said, I think you need to take that opportunity, and So I took it and it's just worked out just great.
Shay
Foulk: So, so what year would that have been?
Rick
Childs: '78, 1978.
Shay
Foulk: Okay, so in 1978 you started farming. How old were you then?
Rick
Childs: 23.
Shay
Foulk: Pretty smart at 23, were you?
Rick
Childs: Oh yeah, I was smart. I knew it all.
Shay
Foulk: Yeah, that's good, that's good. Well, we're all pretty smart, right, until we learn that we're not as smart as, as we thought. So, so tell us a little bit about, you know, so that was 1978, you know, that Things were pretty good at that point in time, weren't they?
Rick
Childs: They were very good. I just got out of college and things were— you couldn't do anything wrong, you know. I mean, the hogs were good and the crops, the prices were good. And then it kind of changed shortly after that. The '80s came along.
Shay
Foulk: And so what did your operation look like in 1978 when you got started? What was, you know, hogs? You talked about hogs, you know, row crop and hogs.
Rick
Childs: We went from farrow to finish. It was 450 acres, farrow to finish, a couple thousand head of hogs a year, and I was feeding a couple hundred head of cattle a year too. And I was farming 50/50 with a landlord.
Shay
Foulk: That was keeping you out of trouble then too, right?
Rick
Childs: Yeah, especially with a couple kids on the ground. Well, not one kid on the ground and one on the way.
Shay
Foulk: So yeah, yeah, well, that's awesome. So, you know, you started to allude to, okay, the '70s were pretty good, you couldn't do too much wrong, and then all of a sudden '80s show up and interest rates go up and a few things. Talk a little bit about that and a little bit about the emotion that people have to deal with when you get into some of these tight times.
Rick
Childs: Well, it was really tough. The only thing, and I said this earlier, that helped me is I didn't have a lot of debt at the time. And I didn't have any land debt. And I didn't have any operating debt. And to be honest with you, the livestock is what got us through, but it was still lean. I mean, there wasn't a lot of extra money to, to buy equipment, and, and, but, you know, we made it, and, you know, and it all worked out. But for a lot of people, didn't.
Shay
Foulk: Yeah. So what do you think, you know, if, if you look at today's world, you know, we've got technology and We've got, you know, all the social media and all these things going on. And, and, you know, we're in tight times now. I mean, margins are just really tight for a lot of operations out there. And a lot of young producers are scratching their heads saying, you know, how do I do this? How do I make this work out? You know, are there any things that you learned or any mistakes you made that someone could learn from that, you know, if you said, you know, I would have maybe done this different, I would have done that different, or or just any advice that you would give, you know, young producers that are trying to get through some of these difficult times and tight margins?
Rick
Childs: Well, you just, I just, I think the most important thing is know your numbers. And I don't think, and I learned, my bank made me do cash flows back in the '80s. And that was an eye-opener. And so we just followed that and we just, Not every year did we make money, but we never fell behind. And that's the thing, you don't want to get too far in debt and fall behind and can't service that because you're going to— it's going to come back to bite you.
Shay
Foulk: Right. And so you talk about knowing your numbers, you talk about, you know, being lean, you're getting into the '80s and stuff. Talk a little bit about, you know, you had mentioned you were working with you know, somebody that's kind of helping you get going. Talk a little bit about that and how, you know, you know, having the right collaboration or the right partner is kind of an important thing, isn't it?
Rick
Childs: Yes, I was— the landlord at the time was a family friend, and I had worked for him, what most farm kids do— did back then, baling or whatever he wanted, you know, and, and He just, he came to me. I didn't seek him out because I really didn't really want to farm that bad. But, and so when we first started feeding cattle, I was borrowing money to feed cattle and the bank was charging me 18% interest. And he asked me how much they charged me and I told him and he pretty much told me to tell him to go to hell. And, and so he, he, so from then on out he financed me and And he said, I'll just charge you 5%. I said, okay. Well, come down— when it came down to it, he never charged me anything and he helped me out. And he— and that's kind of what I want to do now with my boys. I want to give them a break too.
Shay
Foulk: So, yeah. And that's one of the things too. I think that's a great piece of wisdom is that, you know, the way the tax structure is right now and things, there's a lot of things that we can do as we look at helping the next generation. And it's not just financial though. There's a lot of wisdom. That's exactly why we're having this conversation. Some things that you can pass down.
Rick
Childs: I just would like to say that maybe I've been on the very conservative side for all these years, but I think it was the '80s that taught me that. And I don't know if I'm glad I went through the '80s, but it sure did teach me a lot. And I've been conservative ever since. As far as debt or whatever else that I needed. So we just been— only did it when we could service it.
Shay
Foulk: Yeah, and that's the thing too. I think when you start out in any endeavor and things are tight in the beginning, you learn how to be a better business person as opposed to if it's really easy on the front end. If you go to Las Vegas and win $10,000 on the first pull, you're in trouble, right?
Rick
Childs: That's right, and I had a— and I've had the same banker I had 42 years ago. Oh wow. So, you know, I mean, so we've had a good working relationship, and, and I mean, he's been a good thing for me too. You know, he's on the conservative side, and, and a lot of people have left that bank because they were too conservative, you know, but I think it was the best thing for me. Yeah.
Shay
Foulk: Yeah, so talk a little bit about, about your family. You farm with your your two boys and, you know, getting to work with you guys today. You have a pretty impressive operation. Talk a little bit about the family and the importance of that. And obviously your wife, I mean, we all don't get to do this stuff without the support of our partners, do we?
Rick
Childs: She's been the best thing for me. I mean, she's very conservative too and grew up in a conservative family. And, but she's always stood beside me, helped me sort hogs. Whatever I needed, she did it, you know, and ran a combine. And but now she's involved with grandkids, so which is a good thing. But the two boys have, especially the oldest one, have always been interested in farming. And then my other son Brad, he started getting more interested as life went on. And, and, and it's something they want to carry on. And, and so that's why we're meeting today, and we want to try to work this out. So the transition can be smooth and beneficial to all of us.
Shay
Foulk: Yeah, and I think that's the key thing. You know, a lot of the operations we work with, transition is a difficult thing and there's never the right time or the, or the perfect time to, to start thinking through that and to make sure that the family is all on the same page and that everybody's got the same vision and working towards the same direction and commend you guys. You got some really neat things going here. I want to ask you too a little bit about, you know, other operations. You know, is there any advice? I mean, you've done a great job of keeping the operation going and the boys went off and have had other careers.
And a lot of times I think, you know, the dads that might be listening to this and some of the young producers that are coming out of college or, you know, those that think they want to be producers, coming out of college and, you know, what recommendation would you give them? Because, you know, sometimes it's probably not all bad to go out and work someplace else for a while, right?
Rick
Childs: That's one of the things that I was very adamant about. They had to go work somewhere else. And, but in one way, they both got such good jobs, off-farm jobs, you know, that are guaranteed income, so to speak, with benefits and stuff. You know, it makes the decision to come back more difficult, but I never pushed it. I let them make the decision. If they wanted it, fine. If they didn't, it was fine with me too. So, and that's kind of the way we've approached it. And I think you can see they want to do it and possibly grow the operation for their children.
Shay
Foulk: So yeah, and that's a key thing. I think that again, from what we see and information that seems to work really well with operations is to allow them to have older kids come back to the farm. Just because the kid's 30-something or maybe 40-something, it's not too late to come back to the farm, right?
Rick
Childs: That's where they're at. They're in their late 30s and early 40s. So, you know, so I mean it, but they need to make that decision now. You know, they probably can't wait. Much longer. So if they want to do this, I think it needs to happen now, and it's going to work out timeframe for me because of my age, you know, if that's what they want to do.
Shay
Foulk: So yeah, right. And that's the thing that, that we see so often is I think young, young people want to come back to the farm, but maybe the farm's not ready for the young people. And so it's making sure that the financial wherewithal is there, that mom and dad are okay, and that the kids have grown up, that there's some maturity there versus, you know, just coming right out of college. And nothing wrong with that, that's okay too, but there's some value to having some people come in with some executive experience, wouldn't you say?
Rick
Childs: Yes. Yeah, I would most definitely. I think they're— both of their jobs have taught them a lot and that they can use going forward here.
Shay
Foulk: Yeah, and I think that's the key, you know, when you— you can, you can have a farmer come back to take over the farm, or you can have an executive or a business-minded person come come back.
Rick
Childs: That's business-minded is the most important thing, to be honest with you, and I see that in both boys.
Shay
Foulk: Yeah, and that's, that's key, and that's something I commend you guys for. So, so let me ask maybe one or two more quick questions here. I want to, I want to ask if you were to go back in time and could change one thing about all of the things that you went through that might be helpful to other people, that it was a mistake you made, but it was actually a good mistake, you know, that you learned from Is there anything that you can think of that you can pull out of the past that, you know, hey, you know, this is what happened and, you know, you want to know what can we do? What's something that you learned from that?
Rick
Childs: Well, I think the basic thing was maybe like when something's not working, Don't keep riding it. Yeah. You know, learn to change sooner than later. I think that's about the simplest way I can put it. You know, I mean, I went through the hog debacle in 1998, and, but we made it through it and whatnot. But looking back on it, I could have changed some things prior to that that would have avoided maybe some of that mess. As far as any disasters, I don't think we've had really too many disasters. We've had off crops. Last year we had prevented planting. We're in that area, but we're gonna make it. So— Oh yeah. You know, I think you just gotta look at it on a, you can't look at it on a year-to-year basis. You gotta look at a 10-year plan. Be honest with you. You gotta put 10 years together and And average amount. Yeah, an average amount.
You can't just judge by one year, one bad thing, right?
Shay
Foulk: Right. All right. Well, anything else that I didn't ask? Is there anything— I know you were really enthused about having this conversation here, right?
Rick
Childs: Not really. No, I got nothing more to say. I just want to say the meeting went really well today, and I appreciate everything you guys did.
Shay
Foulk: Well, I appreciate that too. And you guys have a great operation, and I sincerely appreciate you taking the time to give us some Dad's Wisdom. And that's, that's really the whole point of the Dad's Wisdom, is have conversation with, with some of you guys that have seen a lot, been through a lot, and been successful in the process. And I commend you for that. So thanks a lot.
Rick
Childs: Thank you.
Shay
Foulk: You bet. And thanks everybody for listening, and we will catch you again next time on Dad's Wisdom and the Ag View Pitch.