Head Shepherd
Mark Ferguson from neXtgen Agri brings you the latest in livestock, genetics, innovation and technology. We focus on sheep and beef farming in Australia and New Zealand and the people doing great things in those industries.
Head Shepherd
Life Lessons with John McKillop
Our guest this week is esteemed agribusiness leader, John McKillop, and this episode is an inspiring listen.
John has had an incredible career leading many agribusinesses around the globe and, as Mark puts it, “If there's a big name in ag that you haven't worked for, I'm not sure who they are.”
From his beginnings on a family farm in western NSW to leading global corporations, John's journey in the agriculture sector offers valuable, and often humorous, insights. His career is a testament to resilience, determination and his love for the industry. He shares his lifetime of experiences with Ferg and offers some advice from those life lessons.
1. Negotiation matters: “In life and business, remember: you don't get what you deserve; you get what you negotiate. The art of negotiation is essential, so do your homework and understand what you want before the negotiation begins."
2. Commit to continuous learning: "Commit to a lifetime of learning. Formal qualifications and continuous education stimulate your mind and keep you ahead in the industry, whether you're working for others or running your own farm."
3. Make a difference: "Don't shy away from hard work. It's the key to adding value and achieving success. Find out how you can make a difference, even if it's beyond your job description."
4. Maintain dignity and relationships: "Maintain your dignity and never burn bridges in the agriculture industry. You might need to cross that bridge again and maintaining your reputation is crucial."
5. Networking and immersion: "Networking is vital for success. Immerse yourself in your industry, engage with others and build meaningful relationships. It's a valuable habit for personal and professional growth."
6. Integrity is non-negotiable: "Maintaining integrity is a non-negotiable. If you feel your integrity is compromised, it's time to move on. Your reputation and values matter in the long run."
7. Understand your motivation: "Know yourself and what motivates you. Is it love, money, power or respect? Understanding your motivation can guide your decisions and actions in life."
John McKillop's career shows that success in agriculture often involves perseverance and a willingness to adapt to changing circumstances. His insights shed light on the industry's complexities and opportunities.
John concludes with some wisdom for those who may feel a little defeated.
“You know, I've been sold up a few times and taken a few wrong moves in my career. But I don't think that defines me. I think you are defined by the fact you get up again and you go out and have another crack because that's what you love doing. And if you're doing what you love doing, you'll stick to it and eventually the fruits will be born. There will be times when you feel like there's too much pressure. But then that will lift, you'll take a breath and get back out there again.”
Head Shepherd is brought to you by neXtgen Agri International Limited. We help livestock farmers get the most out of the genetics they farm with. Get in touch with us if you would like to hear more about how we can help you do what you do best: info@nextgenagri.com.
Thanks to our sponsors at MSD Animal Health and Allflex, and Heiniger Australia and New Zealand. Please consider them when making product choices, as they are instrumental in enabling us to bring you this podcast each week.
Check out Heiniger's product range HERE
Check out the MSD range HERE
Check out Allflex products HERE
Welcome to the Head Shepherd podcast. I'm your host, mark Ferguson, ceo at Next Gen Agri International, where we help livestock managers to get the best out of their stock. I want to take this opportunity to thank our friends at MSD Animal Health in Orflex for sponsoring Head Shepherd again this season, and I'm also excited to introduce our mates at Heinegger as brand new sponsors of the show. Msd in Orflex, or perhaps better known as Cooper's Animal Health in Australia, offer one of New Zealand, australia's, largest livestock product portfolios, with a comprehensive suite of animal health and management products connected through identification, traceability and monitoring solutions. Like us, they see how the wealth and breadth of information born out of this podcast can help their men and their farming clients achieve their mission of the science of healthier animals. Heinegger will need a little introduction to our audience. A market leader and one-stop shop for wool harvesting and animal fibre removal, together with an expanding range of agricultural products and inputs, the Heinegger name is synonymous with quality, reliability and precision. The Heinegger team have a deep understanding of livestock agriculture, backed by Swiss engineering and a family business dedicated to manufacturing the best. It's fantastic to have both of these sponsors supporting us and bringing Head Shepherd to each week, and now it's time to get on with this week's episode.
Mark Ferguson:Welcome back to Head Shepherd, thrilled this week to be welcoming John McKillip to the show. Welcome, john, thanks. Very good to be with you. John, you're an Heinegger business leader. If there's a big name and egg that you haven't worked for, I'm not sure who they are, but we'll start back where it all began, maybe Just, I guess. Yeah, if we could just, I guess, wander through how you ended up so involved in agriculture, and then we'll go through the various chapters of the career today.
John McKillop:Sure, yeah, we'll start out family farm out in western New South Wales. We've been out there for 140, 50 years sort of. Went out there in about 1858, I think was the first time they took land up there, true squatters in the true sense of it. The government took half of them off it to put a railway line through and the government took the west of the railway line. So yeah, so that was a good experience. But because over those years that the family farm had been made smaller and smaller through, I think probably being Catholic, I think had too many kids in the family. So we had a little bit of everything and I would say not enough of anything. A few thousand breeding news and 80 cows and a bit of irrigation, a thousand megalitre license and the dad just took a muck around with a bit of pasture. Sometimes there was soy beans, sometimes eventually cotton, but it was. So.
John McKillop:My intention was to stay on the family farm and I'd always thought it just sort of happened. You went from working for your father, for your family, and then somehow you ended up in the box seat and everyone else seemed to. The siblings seemed to be taken care of. But I suppose I got to 27 and I couldn't work out how that was going to happen. So I'm 59 now. So when I was 27, the interest rates were 18%. It was pretty negative time. Someone knew someone had gone broke, or in the Phillips River papers there was just continuous pages of mortgage imposition and I suppose my biggest fear was probably getting to the age of mid 40s or 50s and not being able to make it, having to sell up and not having any skills or experience, and it was probably more being risk averse that I decided that I'll go off and make my own way. So I'd actually been to Orange Ag College and studied farm management there, but I always loved agriculture. I really couldn't see doing anything else. So I went off into the big wide world and the first job I got was as a rural financial councillor and that was helping farmers out with debt mediation and banks and trying to get some support from them where possible. It was a really interesting three years. He ended up with a fairly distorted view of agriculture because it was the end that were in trouble. But it was really good for me managing and understanding people because I used to like it like standing in the round yards of a cattle yard. Well, you knew they had to go through that gate, but you had to show them the other five or six gates and at first and let them come to the conclusion themselves that that's the gate they needed to go out. And sometimes that would take a few months and sometimes it took a couple of years in cases to get people to that point.
John McKillop:I recall one conversation with one guy and he was going John, I just can't keep going. I'm so stressed that every day I've got the bank chasing me. It's not the bank, it's the machinery dealer. It's not that I'm my small creditors and my wife's not talking to me and it's just so stressful and only went. And I said so why do you want to stay in it? He said oh, for the lifestyle. I said just listen to yourself. You've just been half an hour about how bad it is now stressful. Wouldn't all that stress disappear if you made that decision to take your record and go? And so that was an interesting role. Three years was enough. I thought I'd better go and start dealing with those who aren't in trouble. So off I went. So I was lucky enough to eventually end up at KVMG, a consulting in Brisbane. At that stage. I'd finished an undergraduate in business and I was half a master's and MBA. So I'd studied for 11 years.
John McKillop:After I left the family farm and then, through a series of roles that are done with Granko slash KVMG, I ended up working for a company called Stambrate Pastoral Company, which most Australians in the industry will know of, but probably not many on the other side of the ditch. It was at the time the world's largest cattle company. We ran 13.7 million hectares, 525,000 cattle, including 225,000 breeding cows. You know, it's another mind boggles, doesn't it? And it did for me.
John McKillop:And I'm going to say when I was approached for the role, I spit hesitant about it, but then I thought I'm actually going to get paid to go and see some country that people pay to go and see. You know, I'm going to actually. So what a fantastic opportunity to go up and spend time up on cattle stations in the Gulf, on the Barkley Tablelands, you know, out of the channel country. So I took that role, you know, and I was nervous. As you know, I said we ran 80 cows at home and suddenly I mean this one where we run, you know, I think our daily death rate would have been about 80 cows.
Mark Ferguson:Yeah, certainly wasn't counted down to that level anyway.
John McKillop:So it was really interesting to get strung in the deep end and I was very fortunate that the managing director of Stambrough Agriculture Stambrough Pastoral Company at the time was John Cox. John was very good at just throwing people in the deep end and supporting them, but make them swim. My first day he said, okay, the role you've got is commercial manager, but I also want you to look after the feedlot and the two background operations. Suddenly I had this portfolio of businesses and three or four staff reporting to me. It's quickly alert that you just need to work out where you had value in a role.
John McKillop:I wasn't going to teach the feedlot manager how to run a feedlot and I wasn't going to teach the backgrounding team how to background cattle, but I could teach them a bit more about business skills. I teach them about business case analysis and understanding profits and understanding human resource management. That was where I came from very much a business orientation towards that approach. Of course, there was a large degree of bluffing. I don't mean bluffing as I've left my way through, but I felt like a complete fraud in there.
Mark Ferguson:Fake it to your, make it to people, yes, sort of.
John McKillop:I do remember when the Caliards had a jackery overseas in a field day for a few days. They came to the feedlot and it was about 50 of them standing around and were talking about cattle quality with a feedlot manager. One of the overseas said I'd be interested to know what Mr McKillop thinks of that cattle. I was sure that I had four legs. I was completely inadequate to answer it so I just had to sort of sidestep it and not try and claim it. I knew anything because I really wasn't the value that I was able to add. For me that was the first lesson of real one work out where you can add value. If you do that, then invariably someone will recognize it, or many people will recognize it, until you actually enjoy your work a lot more. If you're just turning up and trying to do the exact job you're employed to do, if you're not very good at it and you don't think it's adding value, then ultimately you're either going to fail or either someone's going to realize you're failed and get rid of you, or you're going to get bored, stiffen and leave. It was a really interesting time. Then, two years after I joined and 38 years after AMP, the finance company at Ownstab wrote that I decided to sell. I was then right in the middle of this. By the time was Australia's largest rural transaction. There were syndicates going around and I was because my role was in that commercial field. So I ended up right in the center of that where at Rao Boe Bakers the advisors, we had AMP who were the sellers, and then you had the stamp broken.
John McKillop:He'd ended up being purchased by a group, peter Managazo, and then Jack Cowan from Hulker Jacks fame, and then a group called the Nebo Group for 490 million. The problem is they actually met each other. The deal was put together literally the weekend before the deal was closed. It was just never going to work. Peter Managazo ended up buying them out at a premium it's well publicized with a $90 million premium.
John McKillop:I think is, as Peter put it, 244 gallerums of money. Peter then put me in as the CEO, which is probably a bit of a poison chalice to go into that sort of organization at the time when Peter was intending to sell most of it off. Peter, to his credit, did incredibly well out of that deal. It's unfortunate that Peter and his wife Angela, and both a lovely couple that were killed in a plane crash about 18 months later, maybe two years later, but they certainly left a legacy for their children Incredible. They probably made at the time $200 million out of that deal 20 years ago. Interesting one of the properties that they kept, brandon Managazo, recently sold for a reported $215 million.
Mark Ferguson:Of course it changed a bit.
John McKillop:Yeah, absolutely so. Then I was fortunate, struggling there, thinking, well, I've finished that role. I did a year with Peter. That was probably enough. It was a good lesson. If you're the CEO of a company where the major shareholder is in the office next door, you're probably the CEO, isn't the right title? No, yeah.
Mark Ferguson:Well, General Manager might be it.
John McKillop:General Manager, you know, often you find out what happened rather than you make things happen. Yeah, yeah.
John McKillop:Yeah, that's not begrudging, it was Peter who put everything on the line for it. Yeah, one of the interesting things was the simplicity of the way something will think and just have brilliant. That is, we had all this financial modeling done, all the purchases did by PWC, and I said to Peter Managazo one day I said, peter, did you go through all those financial models? He said, ah, john, that's just for the banks. No, I didn't look at that. I said well, how did you decide to make that decision? He put everything on the line. He said, well, it ran $500,000 head. I figured it was worth $1,500 a head including the animal. So back $750 million. If I bought it for less than that, it was cheap. And I went yeah, that's about right, you just bypassed a spreadsheet. But yeah, you probably would have to say that. And that was a simple way he looked at it. You know it was no more complicated than that. He did that calculation in about 30 seconds and the rest is history. So, yeah, they spent.
John McKillop:Then I ended up getting a role with elders in Adelaide, a role I found quite frustrating. It was a different culture and probably not a great culture of the climate elders. You know, I often think that I spent three years. I've achieved almost nothing in that three years. You know which is getting. You know try to work out how to add value, getting really quite work out where that was and because of the politics of the place.
John McKillop:And so I was fortunate then that a role came along to run Clyde Agriculture. And it's a Clyde Agriculture. I had a lot of country around where I grew up so I was familiar with it. I sort of grown up with the name of Clyde Agriculture. It was a company that had always said I wanted to run one day and then the opportunity came up to do so and so it was owned by the Swire family, hong Kong and London based Swire shipping. Cathay Pacific yeah, worldwide they have 130,000 staff, incredibly nice family that are very humble, low-key and Clyde Agriculture. So we ran at the time of about 200,000 sheep, 30,000 cattle, depending on the season, cropped about 30,000 hectares of dry land and grew cotton out of birch. How much cotton? Well, zero through to 8,000 hectares depending on the year. So that was probably certainly back more in my comfort zone where it was cropping and it was cotton, and certainly in the geographical valley area that I knew.
John McKillop:The problem is it had lost a lot of money in the preceding six years. So the global chair, james at the time, james Hughes Hallett, said to me very English way John, look, the Swires love Clyde but quite frankly they're not putting any more money in, so come back in six months and tell us what you want to do. So over the next six months we went through fairly in-depth analysis discounted cash flows, looking at what's performed, what hasn't performed, why hasn't it performed? Can we turn it around? And came up with a restructure that involved about 25% of the portfolio going with the intent to then redeploy that capital elsewhere. So we got the first part of that done. It would freed up the capital.
John McKillop:And then after 18 years two years after I joined in, 18 years after the Swires had created Clyde Agricultural Round they decided to exit again. So I went through my second exit in five years yes, that's where it's more to come. So I again went through that, decided that I wasn't going to pay some bank to a million bucks to go and do that, so took most of it on myself by finding buyers and then breaking it up into various components. Some of it went to Macquarie Bank, some of it went to the Bell Group in Bell Potter Group and others went to just individuals. So we ended up breaking that up into various shapes and forms and that concluded with about, I think, $350 million by the time we wound it all up.
John McKillop:One of the early sales we did was an interesting one. It was a place called Turrell or Turrell-E, depending which school you went to, I think between Burke and Wilcania or Burke and Lout. It had to be a re-regatiation on it, but basically we'd lost money on it hand over fist and it seemed to pick up the interest of the environmentalists at the time that this place is sucking the Murray-Darling base and dry and the Darling River doesn't flow because of Turrell. And so we jumped on that bandwagon and we put out a fair bit of publicity. We actually developed a whole campaign around trying to get the government on the hook for it, and the night before the auction I thought we've blown it and at about four o'clock they called and said can we come and talk? And so in they came and I think it was eight of them and just myself in the boardroom, and we had a valuation on it and a reserve of about 15 million. And they came along and said look, we've been instructed to start at 19. And I went no, we just can't do business. I'm sorry, but I appreciate that thought anyway. But, thank you, we'll see you at the auction tomorrow. They have a straight face too, actually, and the time we finished the deal worked 23.75 million an hour later. So, yeah, so it was interesting in negotiations and I'll talk about that a bit later on.
John McKillop:But it was trying to figure out what they wanted and what it was worth to them and trying to build that anticipation. I knew what we wanted. It was a fair bit lower, but that wasn't what I was going after. I was going after what they wanted, and I'll talk about that a bit later on. If we remember to just sort of lessons in life, I suppose yeah, and I'll see you in the next one.
John McKillop:Then, once Clyde was sold, I was starting to focus on board roles. I was starting to be too young for it, but I ended up getting on the board of Covey Station, which is the cotton place up in Durham, bandy Mead and Lifestyle Australia Dairy Australia. Again, I've been to one Dairy for once in my life, but again, it was a lesson in trying to figure out where you add value. So the recruiter rang and said John, I've got a role you might be interested in. And I knew the recruiter and he sent me the ad and rang him back and I said, mike, let me read this to you Must have debunked the standing of the dairy industry.
Mark Ferguson:Eating cheese doesn't count.
John McKillop:Yeah, eating cheese doesn't count Exactly. You know, I don't even have a bilken like coffee. So he said no, what they really wanted is someone who's working in the corporate ad space and how do they corporateize you know how do we corporateize this model of farming and to attract more outside capital etc. So, yeah, so that was great and I really enjoyed learning about the dairy industry. You know it's a fascinating industry and I absolutely respect all dairy balas who do what they do 365 days of the year and I hope you make good money out of it because you certainly deserve to so.
John McKillop:And then, yeah, then it did a part-time role with the state of the lag fund Again, probably lesson in that one was every time I've gone into a role I thought I'm going to tell this is a bit I'm not going to like and this is a role I thought there's got some hairs on it and probably not going to enjoy it, and I didn't enjoy it. You know it was meant to be part-time, but you know that never quite works. We want you to be paid part-time but work full-time. And so I ended up moving on from that after about 18 months and then again sort of probably just worked on trying to get board roles etc. And then, if I just go back a step, when we're selling, breaking up quite agriculture. One of the sales we did early on was a place called Clavidowns at Canamulla and to as we were, verips from Hassad Australia and we ended up having a bit of a stout over it, only because, you know, over a news article that went out which I thought they had approved it's great, a great dubbing by Matthew Cranston from the Finn Review, which I remind him of every now and again I fell for his trap, confirmed the sale. I, assuming that the Katari said, actually confirmed it. It wasn't End up in a stout for them. You know they were yelling down the phone of me, and in Arabic and you know so then. So after I left the sale, I got a call from the recruiter saying oh, look, hassad Australia's little CEO which would be interesting. I said, look, I might be interested, but I can tell you they won't be interested in me. And anyway, as it turned out, they cleared that and they said no, no, we actually quite respect the fact that you did what you did because you're acting in your shareholder's best interests. I would well. It was a quite ripe and I'm glad you see it that way. They ended up as the CEO of Hassad Australia and just put that in context again.
John McKillop:Probably 250,000 sheet. Unfortunately, most of them are those fat-tailed wasses which are a difficult to read your leg money out of because they have lambing rates of around 70%. The purer you get them, the more medulated the fiber is, to the point where we're at 40 micron 100% medulated fiber, and so our market was competing with recycled plastic bottles in that sort of fiber market. In fact, I still remember we sent one lot in a wool into the broker and it sold and we got a bill for it Compost to me. Yeah, yeah so, but that was a cropped 75,000, 76,000 hectares across Australia. The first year I was there we grew 185,000 tons of grain and all seeds of pulses. It was a big cropping operation and the Qataris were different to deal with.
John McKillop:They were an interesting bunch. I mean we think of them as the Arabs in the Middle East, but most of them are educated in America or the UK or the Qataris are very, very wealthy little country. Put in context, there's only 350,000 Qataris and they have about a trillion dollars They'll never say this, but about a trillion dollars in their equivalent of their future fund. That's about 30 million for every man, woman, child. So there was a story about the kids at school in Qatar, one of the Western schools, and what do they want to do when they grow up? And one said I want to be a farmer, and, of course. And one said he wants to be a placement and one said I just want to be a Qatarer. It's pretty simple, but again, they were different.
John McKillop:So the chair at the time, mr Nasa Ahraji, you know, as any 60s, grew up as a better one. You know I can say the first half of his life is better than the second half, flying jets around, incredible. But you know when, over there, I used to go over there every couple of months and go through budgets and numbers and strategy with them, and he said to me one day John John, you live too fast, you make too many changes, you must slow down. And I said, oh, you appreciate it, mr Nasa, but there's a point I want to get to. You know, by December this year, and, john, john, in Qatar we have plenty of two things sand and time. So that was interesting.
John McKillop:They just think differently, you know. We just assume that they're just like us Westerners, and you know there's a deadline and you work 12 hours a day. You know, not saying they're lazy, they just have probably have a better balance than us. You know they might start work at nine and some of they finish at three or four, and you know that's just the way they work. I think they're probably changing a little bit. I saw the new mode of a new chair came in. He was probably more Westernized, he'd spent a fair bit of time in the States and he was probably more in there at seven and leave at seven, sort of thing. But the older school were a bit more laid back Crazy, anyway. So look, and you know what I'm going to say next, don't you? So, after eight years of owning a star?
Mark Ferguson:I actually knew about this one, yeah.
John McKillop:And two years after I joined they decided to sell.
Mark Ferguson:So I reckon we'll get a title for this podcast. There'll be something about the business who to call?
John McKillop:So yeah.
John McKillop:So look they were. They were. That was an interesting process. Again sold mostly to Macquarie Bank, took a couple of their funds, viridus Fund and Paro Way Fund. I think about a third of the Paro Way Fund at some point I've managed. So they certainly just pick it all up and they probably do a better job than I do. So they're good luck to them.
John McKillop:So I went through that sale process and I stayed on the board because I had to have an Australian director for another year after that and then finished up with Hasard and then again was just not sure what I was going to do. So I ended up jokingly said to Vic Danny Thomas one day, you know, when he said what are you going to do after Hasard? I said I'm going to come and chair CBRA Agri Business. Yeah, so we ended up. I ended up doing that and I ended up on the board of Compass Agri Business, which is a part of New Zealand business out of Arrowtown and Melbourne. Ended up on Kilroy Spines, which is a Victoria's Largest Egg Producer, their advisory board and a few other bits and pieces. But then we did say one time you know, I'm not sure why you guys are part of CBRA. I'm not sure they added anything to you. Why don't you go out by yourself Unless? Well, actually we were thinking about it. So we ended up setting up LAWD and from scratch, which is interesting for me because, you know, I've spent 20 years serving this corporate end, where your IT department took care of IT and your CFO took care of the. You know the insurance and, and suddenly I had to make the decision about what monitors we'd get and what computer system I have. I had to get insurance and, and not only that, I did then install the monitors as well. So it was really, it was actually a lot of fun, you know was actually getting right back to employment agreements. You know, putting policies in place.
John McKillop:But one of the things we we did from the start was we ran it as a corporate with a full, proper board. I bet you know most those. There were no independence on it, but the board was we had agendas, we had resolutions, we had minutes, we had action items, exactly as you have an aboard, you know, on a on a board that have been going for many years and you know what we had all that policies. You know took a while to get some policies in place. But we developed the policies in place and we got all those systems in place and we strictly worked on culture, you know, and to attract the right people and to work out who we wanted and who we didn't want in that firm.
John McKillop:And the the week we signed the lease in in Melbourne, we went into lockdown and I remember thinking, oh, this shit, what have we done? We've just signed a six-year lease for 220,000 dollars a year, plus it about to do one in Brisbane as well and, yeah, we're just gonna be out of work anyway. We somehow got through it and within world proper rule first year and by the time I left, when I went to work for Hancock where we had 36 staff and I think that well, until we have a 70 or 80 now, yeah, that's incredible story and it's just. It's really about Attracting really good people together, people who want to work there, people that want to work together. It was, it was actually gonna say. Someone asked me on the day what they, what the highlight of my career was, and I'd say was probably Setting up LA W D from scratch.
Mark Ferguson:It's just a bit of a start-up start-up mode is good fun.
John McKillop:Yeah, yeah, yeah, particularly if you've got good people behind you. I mean, you know I have no skills, you know I'm not, I'm not a value and I'm not an agent. And what's the firm? It's, it's a valuation and agency. So you know, yeah, so I, yeah, so I was just lucky that some very good people came along with me.
John McKillop:So so then, look, then I was approached to the role of Hancock agriculture. So, most of you aware, it's owned, 100% owned, by Gina Reinhart. Yeah, roughly there's a billion dollars of assets because it owns two-thirds of this Kidman and Co as well. The other third is owned by A Chinese company, but it's all run together. You know, it's all Hancock agriculture, incorporating S Kidman and Co.
John McKillop:Look, I knew there was a an element of risk in taking all that role, but I did think well, you know, it's probably a billion dollars of assets. She's supposedly worth 40. I'll probably never hear from her. It's only two or three percent. Yeah, that turned out not to be the case, anyway. So there was a an interesting role where I thought I had done enough due diligence. I thought I had a cupboard, but I still knew there was a risk, and and I I did a year there. But that was really enough for me. You know so bright people in that company.
John McKillop:I just didn't. I'd wanted to be employed as the CEO of an agricultural company. I didn't want to do all the referral things that were probably required of All the expected by the chairman in that, in that role. So so then I. So now I'm back to to where I was and I'm going back. So at the same time I Maintained the the role as the independent chair of the RedMete advisory council.
John McKillop:Redmete advisory council is the peak council of sheep producers, cattle Australia, feedlots, processes, etc. Also maintain a role as the chair of black box, which is a, an ag tech startup. And and then I've just gone back onto the Compass agribusiness board again, although that New Zealand side's gone, so it's just a domestic bay now in Australia, and I've taken a part-time role with her and talk about the valuation firm and starting to build up a few more other non executive roles and and that's basically where I'm going to stay in non executive roles and have that flexibility and, I suppose, interest in different, in different areas. So you know, I'll be covering a bit of dairy, a bit of valuation, cattle, redmete so, and a bit of tech. So yeah, so that's. I'm actually looking forward to this next phase. I'm 59 now. I don't think it's too early to start a full-time non-exec. I've sort of had been down that path a little bit before, and so yeah, so that's. That brings us to today, and then the whole art of my life has now been interviewed by Fertick.
Mark Ferguson:You know you've made it when that's the best part of your day, but Fantastic, yeah, awesome.
Mark Ferguson:Thanks for all the detail there and yeah, a lot of a lot of gems amongst amongst that chat. A quick interruption here to remind you of head shepherd premium and our consulting services at next to Niagara International. If you love this podcast and want to hear more of them, visit the hub next to nexternagrycom and sign up for head shepherd premium and get an extra podcast each week. If you're listening to this and thinking you really do want to maximize the journey gain of your livestock and feel more confident around the decisions you're making on farm, then send me an email at mark at next to nexternagrycom and we'll get in touch and see see where that takes us. I guess that role give that shift in gear from from director or from action on the ground to standing back and having other people do it out of. How do you go when you make that gear change? Yeah, it's.
John McKillop:Interesting. I was going through an interview process the other day which is ongoing, with a very observant person we're in those super bright people and he said he said you clearly like being in the action and I said, yes, I do. He said to how are you going to do that? I do. He said to how will you go as a, as a is a non executive in this role? He said I'm assuming that you'd prefer to be chair rather than non-executive and I said actually, you're right, you're absolutely right.
John McKillop:I find sometimes just non-executive to be a little bit frustrating, because you turn up to a board meeting once a month. Now, executive, you're in it every day. Non-executive, you're once every month or two months or something, whereas a chair is somewhere in between. So I think that's probably why I know I'm probably chairing four different organizations, because I like that. I like that mix of being a little bit more hands-on than just turning up to a board meeting but not the full time in the details every day. So I'm hoping it's a good transition and, as I said, I've been doing those roles for a few years now and sometimes successfully. Sometimes it's things I wish I'd done a bit better, but I think the main thing is you learn from each time you make a mistake and don't beat yourself up over it too much and pick yourself up and go again.
Mark Ferguson:Yeah, for sure. You talked a bit about culture and a bit about having the right people, or a lot about both those things. Really, I guess what are the? Have you got some tips for the others out there? How do you get that A-list working for you and how do you build that culture? What's the any gems in there?
John McKillop:Well, I think you've got to be ruthless at recruitment. You know, I've said to staff for many years we will recruit for culture first and skills second. And that was absolutely the case when we did LAWD. You know, we didn't care if there was an agent out there. You'd write a million dollars with a fees a year. If they didn't want to be part of the team and they didn't want to turn up in the office and they didn't want to share that information across the rest of the team, then we didn't want them in there.
John McKillop:It was ultimately the other ones that pisses everyone off, you know, and there were certainly those people out there, and the people came to us and said, can we all be part of it? And yeah, just provide the back shot, I'll do everything, else you go. No, no, that's not where we want to be. And so it was really that culture of being part of a team and wanting to be part of a team first and foremost. Everything also flowed from that, you know. So if you have a good team that wants to turn up to work every day and enjoys turning up to work every day, it'll be successful. Follow, assuming you've got the right strategy and you know, everything else falls into place, but you know, but yeah, so that's my culture first, skills second yeah, cool.
Mark Ferguson:You mentioned back in one of the camera which example we're going through, but you talked about negotiation and focusing on what they want, and you're going to come back to that.
John McKillop:Yeah, so I sort of wrote down some lessons in life. You know that have gone. Maybe it's best to step through those burgers That'll be good.
John McKillop:So the first one I say is in life, you know, in business as in life, you don't get what you deserve. You get what you negotiate. And to learn the art of negotiation and that is hard work, and I suppose that's one of the lessons is do the work. Do the work before you turn up for a negotiation, so you know in your own head what you want and that's called your minimum settlement point. What you're trying to do is work out what they want. What's their drivers? Why have they turned up for this negotiation? And don't always assume it's the same reason that you've turned up. You know, often people just think it's about I'm trying to buy something, you're trying to sell something and it's all about a dollar, and every dollar I get is $1. You lose, whereas often that's not the case and you'll have people say, well, it's not. What I really want is I want somewhere for my children to go to after that. So I don't want to settle until this date and I want that and I want this. And you know, I really want to keep this the livestock, or whatever it happens to be, once you delve into it. See, what you're trying to do in negotiation is find out as much information as you possibly can about what they want out of this transaction, and the last thing you talk about is the very thing you want. You don't reveal your hand because you've given away too much information at that point, and so a good negotiator on the other side will be trying to do exactly the same, trying to find out as much information about what you want. So you do really need to start this negotiation well and truly before you walk into that room and trying to understand.
John McKillop:Second lesson in life about just keep going on. These is study and for me I went down a career of working for other people, but I don't think it's that much different if you go to work back on your own farm or in your own business. You still need to commit to a lifetime of learning. I mean, I've done formal qualifications, you know, ended up doing the Diploma of Farm Management, the Bachelor of Business, the MBA, and then I've gone off and now probably mostly focus on not on directorship sort of studies. But I'm always looking for the next study. I'm not going to do that all the time, but I'll look for the next course to do, and there might be six months away or something like that and I just think you need to continue that because it just stimulates your brain and it stimulates your mind and networks, which is, you know.
John McKillop:Then lesson three is work hard. You know, do the work. You just don't get anywhere by slacking, you know, and you don't feel good about yourself either. You know. I know days when I've had probably had one of those bits today where I just haven't quite run as hard as I should, and you know they feel great about us. You know you sort of need to do the work and you need to figure out how to add value, as I talked about before. You know, and it may not be where you're employed to do, but you'll. You've got to figure that out pretty quickly. And don't burn a bridge, you know, particularly in ag, because it's almost inevitable that you'll want to cross that bridge again one day and the person you abused as you left the company will tell five other people that you abused them as you left the company. You might feel good because you told them they were a dickhead and you never want to see them again, but the next person you walk into could be their best friend or could be there. You know, have worked with them at some other stage. So you know, maintain your dignity, don't burn a bridge, you know, and, and you know, as I say, get over that imposter syndrome. You know we've all had it. We all have it, but you've just got to work out how to add value and things will fall into place.
John McKillop:The other rule I have is, or advice I give to young people, is you've got a network, and I mean by that you immerse yourself in your industry. You know your friends are from the industry, your social life is almost the industry, and I used to consciously do it when I first started out. You know I would make myself ask a question at a conference, you know, and I'd be shitting myself doing it. You know you're standing up in front of 500 people asking a question. You know I'm John McHillip, from wherever, and my question is this but it? But it's really good because it overcomes that fear after a while. It actually also makes you listen to the speaker because you don't want to be told that well, I just answered that dickhead, so you were, and then it just takes you out of your comfort zone, and so I think that's a really good, good thing to force a habit to do. But, you know, immerse yourself, network, you constantly meet people and engage in the industry.
John McKillop:You know, maintain your integrity. With my other one, you know, if you're in a position which probably where I felt in the last role that my dignity, my integrity, wasn't being maintained, and probably it caused me to some grief in my personal life as well, so you know, so I I moved on from that role, but probably I'd probably already gone too far anyway. So I think, yeah, maintaining that's not always easy to do, but maintaining your integrity inspires, you can. And the final point is to know yourself. I think Socrates said know thyself, and I think that's. And what that means is you need to understand what motivates you in life and, being the amateur psychologist that I am, I sort of narrowed it down to four types of motivations and not one or the other, to blend of these.
John McKillop:But I think there are people that I know that work for love, and they tend to be in the humanitarian sector, the healthcare sector, the childcare sector. They want to help people. There's people we know who just want money. Their motivation is money and often they're in sales or they're in other sort of roles where it's just transactional and it's just making the money, because their enjoyment comes from spending that money. And then I think there's those who want power, and you do see some CEOs, certainly a lot of politicians, I think, fit into that category. They love the buzz of the power.
John McKillop:And then I think there's those who want respect, and I'm probably mostly into that category. I would rather forego money, probably some extent love and certainly power, because I want to be respected. I necessarily care of people like me who work for me. That's a bonus if they do, but I do want them to respect me and if I've had to move someone on from a role, I want to explain to them why I've done that and why I've made that decision. I said they might not like me and they might not like that decision, but hopefully they respect that decision and respect me. So that's what motivates me and has probably kept me true to myself as much as possible. And he hasn't certainly been far from perfect data, but that's been my motivation in life and that maybe comes from going right into it. I can remember twice in my life my father saying to me I'm proud of your son, and that's something I've probably always craved more of.
John McKillop:I think it comes from that sort of upbringing.
Mark Ferguson:Interesting stuff. There are absolutely golden there, john. There's going to be some. I'm sure this episode is going to get listened to more than once. So, yeah, absolutely loving listening to it. As it happens, live, I guess, if we do start moving to the future, it's a relatively tough time in Australia now at the moment. It's probably a combination of well reduced prices, seasons turning. I guess you're obviously still pretty buoyant about how we'll go through a little tough phases. We always have and always will. But I think the long term outcome for a long time outlook for red meat and our production generally is still as good as it's ever been.
John McKillop:I think that's right, if I should. Unfortunately in Australia we have these huge wings around about season-wise. If you look at what happened, particularly in the beef sector over the last three years, people retained heifers, people retained male stock to put more weight on. Someone said to me some years ago cattle people can handle floods and droughts, they just can't handle grass. I just got to go out and buy cattle and people buy the wing as $2,000 a head and they're probably now selling those wing as at $1,200 or $1,500, if they're lucky be selling them, having hand them for a year and fed them for a year, and they sell them for less than they paid for them. But it's hard. You're sitting out there looking at your best season in five years and you think I've just got to put something on it. And of course what happens is that in Australia probably more so than most other places, because we have 50% of our production is grain fed thereabouts. But that doesn't still not smooth it out. When you have a drought we'll process eight to nine million cattle. You have a drought, we have a good season which we've had, our kill last year with the lowest since 1983, I think it was. So the processes of leading and then suddenly it stops raining and the producers stop making money and the processes start making money. It's just this continuum between who's making money and if they're both making money. It's only a point in time. That's where they cross and that's typically a three to five year cycle. That's not a hard and fast rule. That's typically what you see.
John McKillop:Sheik tends to be a bit more seasonal than that, but we have now built up to the largest flock in a number of years. You had nowhere near where we were back in the late eighties, early nineties, where 180 million sheep then were now at 78 or something. But the big change has been that back then roughly two thirds were marinos producing wool, and now about one third of that of half as many sheep. So we've got a lot more meat sheep out there than we have, and while we've got a great job finding new markets for them and exploring markets, it's still been tough enough because as the global economy slows down a bit, people start eating a bit less. Plus, we've got this massive numbers of cattle coming in. So the two together it's a bit of a tough time. It'll come back around again. I think it might be two to three years of lower cattle prices. So I think we've seen the bottom of it now and I think sheep will be a year or so we'll be back around again. So I'm still optimistic.
John McKillop:In other sectors cotton is still doing well. It's just going to be the cotton rip. This morning, $700 a bale, everyone's got 100% water. We'll do another five plus million bale this coming season. So where are we now? People will be in the middle of planting now. It'll be one of the biggest crops we've ever had. Prices right, water's right, so everything's good there. Cropping wise, we will be down again.
John McKillop:There's a fairly strong basis between Chicago and domestic. At the moment we're $100 above that where we should be if it was export parity, and that's largely just those domestic conditions. People are looking at it going well, where's the grain going to come from? But overall it all swings around about the things that below average season is abnormal, obviously has a sudden mass.
John McKillop:It wasn't my best subject but I can certainly understand that Working out. You can't have above average every year. It just doesn't work. So it gave me a long time to realize this thing. But I really honestly believe that agriculture is about longer term wealth creation through capital gain. And what profit does you don't know. We should just stay in the game. If you don't make a profit, you can't pay your interest bills or you can't acquire the next door neighbors or whatever it is, and therefore you don't get to share in that longer term wealth creation. Because some of the people that I've worked with and seen they've created phenomenal wealth and a little bit of it's been out of profit. But what that profit's done is help them leverage into more assets. It's sometimes that's a dangerous game, because if you leverage it the wrong time and the season goes with you and the interest rates go against you, then you risk losing it. But if you can stay in the game and you're conservative, then longer term it's a fantastic game to be in.
Mark Ferguson:Yeah, as Bill Malcolm says, the money's in the risk. If there's no risk, there's no money, that's it.
John McKillop:That's nothing for free and hopefully we'll never see what I saw back in my early career 18 to 20% interest rates again. Yeah, I'm not going to say never, but that was an extraordinary time.
Mark Ferguson:Yeah, yeah, mum and dad bought a bit of extra land about then and yeah, yeah, that was, yeah, very, very, very tough times. One thing that interests me, because I rarely see a good example of it, and that's corporate scar, whether it's family owned or however that ownership is, but shape seemed to be hard to corporatize much more than cattle. Is that a rash generalization, or is that? I hear you say lot start, but not many last a couple of decades. Yeah, there's probably.
John McKillop:Yes, I'd say Paraguay do a good job. They're about a fairly large shape block and haven't been. I'm close to people in Paraguay, but I think they've sort of got that model worked out.
Mark Ferguson:Yes, that's a good example. Yeah.
John McKillop:Yeah, I think the McBride family I mean they're a family, but it's a large, corporate, corporatized family with lots of different shareholders. They bought to load the downs out of the Saat portfolio for $80 million. I think they do a fantastic job but again, yeah, they have that really lean culture, so I think it's probably different. The other one is the Lachlan family. Run large sheep enterprises but again, family bent to it, but in terms of the pure corporates with external shareholders and external boards, yeah, it is, you're right, it's a tough model and I think Paraguay's probably the closest you've gotten out to a great example, but it's taken them another time to get there.
Mark Ferguson:Yeah, I often wonder why it is, whether it's just that I mean, yeah, you can run 20,000 sheep on hard work, but you can't run 200,000 sheep on hard work because you need lots of other people to do hard work as well.
John McKillop:Particularly if they're maritos. You know, and you've got to share them, and it's hard work.
Mark Ferguson:Yeah, yeah, yeah, Anyway, excellent. I reckon we've covered a lot of ground and it's all been awesome, so I reckon we might pull it up there before we crack out an hour. We don't. This is anything we should be covering. We haven't.
John McKillop:I suppose I just yeah, probably the last lesson for me, and I have told the story a few times, but you know, to me it just sums it up. So I've been living down at Barwon Heads, which is on the surf coast, for a number of years and he's talking to a surfie. One day, in a big swell, and he said you just got dumped. And I said what happened? He said I caught a great wave. I got dumped off it. I got pinned to the ground. You know, my back was against the rocks, he said, and the water was almost crushing my chest. And from over there, he said I thought I could die. And then suddenly the water pressure lifted and he rose to the top and he said he took the biggest rest of his life, you know, and just inhaled it and actually enjoyed that oxygen going into his lungs. And then I said to him so what'd you do? Then he said I went straight back out again and I said why? Why would you do that? He said because it's what I'm up doing and I suppose that was for me.
John McKillop:You know we've all been through tough times. You know I've been sold up a few times and taken a few wrong moves in my career. But I don't think that defines me. I think you define by the fact you get up again and you go out and have another crack, because that's what you love doing. And if you're doing what you love doing, you'll stick to it and eventually, you know, the fruits will be born. So yeah, that's my little analogy for lessons in life. I think you know, put the pressure on yourself, you know, but there'll be times when you feel like there's too much pressure. But then that water or lift, you'll take a breath and get back out there again.
Mark Ferguson:Awesome, mate. That's got to be the best way I've ever finished a podcast, so we'll leave it there, but thank you very much for your time, john. Yeah, all the best with those various roles, and I'm sure any business you're involved with is going to definitely get a lot of value and go well. But, yeah, look forward to catching up at the next Zander conference. Yeah, we're at Obi-Wanstein, aren't we? March Queen's Down in March. Yeah, that's great. See you then, finny. Thank you, see you. Thanks again to our mates at Heinegger, who are proud world leaders in the manufacturing and supply professional sheep shearing and clipping equipment. They understand that their customers rely on the quality and performance of their products each and every day. Also, thanks to our friends at MSD Animal Health in Orflix, they offer an extensive livestock portfolio focused on animal health and management, all backed up by exceptional service. Both of these companies are wonderful supporters of the Australian and New Zealand livestock industries and we thank them for sponsoring the HLP podcast.
