On the Road with Ripley: Risk Management in Australian Livestock

Video transcript

I bought this hat before I went and worked in the territory with one of my best mates, on a Highsbury cattle company station.

So it's eight or nine years old now, has been through a little bit. I left it in a feed bin. The horse ate it. It's been trampled a fair bit.

It's saved my neck a couple of times with cattle that didn't like me for whatever reason. So, yeah, it has has been very handy. It's probably the time for a new one.

I've grown up in agriculture. I've lived and breathed it, my entire life. And being able to connect that and then help my clients with that experience and background I have, I find it really rewarding.

Some weeks to get to certain clients, it's taken me two, two and a half days to get to where they are. But it's just good to be in front of people, and I think that's a really important part of developing trust and business relationships. You know, being in Sydney, it's not exactly the heartland of beef country in Australia. So you've gotta you gotta travel. You gotta get on the road or get on a plane and then jump in a car. And I think my clients value the fact that I'll make the effort to get out there and see them, but it's really important to grow the the Australian business through that presence in Sydney because that that gives a really solid foundation, to be recognized as a leader in in the finance sector within Australia as we build our brand.

In Australia, we have three offices. The headquarters being Sydney. We also have Melbourne and recently opened Brisbane as well. We now have sixty five people, and we've gone from being a kind of external satellite office to now being a hub for APAC. And we continue to add new product lines down here. One of them being our Australian Cattle Swap, which we developed a couple of years ago, which is now providing a key risk management tool for the cattle industry down here, which they haven't had before.

Australian agriculture and the livestock sector specifically is a massive part of the economy and plays a really important role in regional and rural communities across the country. We're an eighty two billion dollar sector, and my clients are really varied both in scale, location, and what they actually do. And it just shows the capacity for Stonex to help different size clients. It's not a one size fits all approach. We can be very customizable to different clients of different scales, and they're really grateful when I can get out and sit down with them.

So at the minute, I'm on the road to Morton Coast Grasdale Feedlot going to catch up with Jack Wilkinson, the livestock manager today and the team to see them talk a bit of business and, get a few things done.

Jacko, how are you, mate?

Hello, mate.

Nice to see you. Thanks for having me. It's on. Yeah.

Grasdale's a, seventy eight thousand head feedlot, so per week there's about five thousand head that we, bring in and out.

Grasdale is the largest feedlot in Australia. We pride ourselves on on what we do in terms of animal welfare, how we treat our staff. We're employing over a hundred people on-site here. We feed about a thousand ton of mixed commodities a day, grain, hay, cotton seeds, so we're certainly in the market purchasing those commodities.

Day to day, there's there's always challenges that pop up here. If we just talk in my world commodities, it's supply. Supply is a crucial element, so we have to make sure that the cattle are fed every single day, their right rations. We've got weather impacts like everyone in the world.

We're very exposed to currency, very exposed to international markets. So, yeah, we're always trying to manage risk.

The focus for the livestock desk in Australia is certainly, the the Australian cattle swap, the feeder cattle swap. And, obviously, their inductions of cattle and the volume of cattle that they deal in each week and each month is significant. They need to be able to manage that risk exposure to price that they have, and that's where Stonex and Myrol fits in.

From a beef perspective, swaps have not been done before in the beef industry. So what Ripley and Stonex are doing is a bit foreign to me. But what Ripley does is communicate very well in terms of what the market's doing, what his perspective.

It's gaining the bigger understanding through his education of what the swaps can achieve for us that you become more comfortable. So with the great communication that Ripley's doing, it it's building that good foundation of trust into the product.

With the markets that we are in, they're extremely complex, and and one solution doesn't provide a complete offering to what customers are after. We need to be nimble. We need to be entrepreneurial, and we need to be able to develop products that suit the customer's needs and risk profile.

So main reason for me to get out today, to the Kiran operation is really to get into a fair bit of detail and look at a few ways we can maximize some opportunity on both the buy and sell side in in a swaps market for a hedge against some different cattle types, which I'm I'm pretty excited for.

One of the things that we've been working towards is taking those extremes out of the business, and I don't think Australia is any different to anywhere else in the world. I think the number one thing for farmers now across the world is learning how to manage volatility in their business, and that's where the, profit comes from these days.

The first time I ever heard of Ripley was he wrote an article. I'm pretty sure it was in Beef Central. And I read it, and I went, oh, that's a pretty curious thing to write. So from then on, I started following him on social media and then did a bit of, background and found out that he worked for a company called Stainx, and then rang up and found out what they do.

And since that first phone call, we've just been on a learning journey. And that journey is one of taking the variability out of our income and adding more security of price into our business.

No one knows what the market will be in the future.

And the way Stonex can assist those clients, remove that risk and those potential problems is through the use of of a tool like a swap.

The buyer, the feedlot or processor, could go back into the market and buy those cattle at three thirty. But what he did for him and both for me, we locked in the extremes of the market. The extremes and volatility of the market didn't hurt us one bit.

We actually ended up with a win win for both of us.

It's generally a foreign concept to a lot of participants in the beef industry, and the momentum and chatter Stonex is creating about swaps and the cattle swap or the feeder swap we offer is certainly the the engagement I'm getting.

As you get older, you reflect on what's going on. I reckon your number one thing in, farming is to always stay curious. Keep learning no matter what age you get. And for my learning now is risk management. That is the number one enterprise that we now manage is managing risk. Because if we can have a consistent four percent return on assets managed with high land values, you've got an absolute cracking agricultural business.

So I'm on the way to Nunndal at the minute, hometown where I grew up.

A lot of memories, swimming carnivals down the hill behind me, you know, Friday nights, hot chips afterwards in the park. It's a wonderful community, a great group of people and where I sort of got my first taste of agriculture and and beef cattle.

Ripley used to come up and do a lot of work here, and he's the same age as my son, Will. So, we sort of with the growing up just down the road, they were always been pretty good mates.

It's just one of those things, I guess, in in life that if you get those kinda, like, good friends, then you gotta look after them and and they'll look after you. So he's just someone I can always rely on and trust. So I really cherish that friendship.

I'm looking forward to getting to the pub tonight. It's gonna be good.

Typically in in locations like this, agriculture, and specifically beef cattle production is the core of the town. So farming families and agriculture really are the heartbeat of the town to keep it going.

You know, it's building things that that hopefully for the future, that will support your family and then their family and their family and, that's sort of really what drives us, you know. We love what we do, but looking after what we have is a huge part of what we do. You've gotta have your animals healthy. You've gotta have them doing well, and the land is the same, you know. If you don't look after the ground, if you're overgrazing it and and and always hammering it too hard, you end up going backwards.

You're always one step behind everybody else.

Stonex has got to play a role in helping farmers manage their risk, and that's the beauty of having that connection. It shows a global company can be engaged in a little community like this with a couple hundred people.

Now, Rip's been able to help, you know, probably for me and my old man keep updated, you know, with how things are travelling in the market and numbers wise, like, what the supplier is doing and how we should be actually looking at whether we should be decreasing or increasing, you know, cattle on the property. So being able to put, you know, things in place that decrease or let you protect yourself a little bit from that risk, that's kind of a bit of a goal for me is trying to look at that risk and going, well, how do we mitigate that not just for myself but for the further generations?

So Our market intelligence and insights at a global level can keep the producer informed and ahead of the game.

And then when you include the fact that I have been involved in the local community, I understand the producers and the the individuals, the sweeter the service Stonex can offer is second to none.

And it's the quality of the people that you do business with, whether it's selling cattle or a Stonex trade. You've gotta deal with the best people to make your business work. You know, companies like Stonex, have got a great reputation. You surround yourself with with good people. It makes it a lot easier.

It was a really good couple of hours with John and Will. We got serious and and talked business, but, you know, I think it's really important to have a laugh and and just have a bit of fun. A lot of people I work with and specifically the Sylvesters, you know, some of my best mates and, you know, enjoy it because it is. It's it's great fun.

Really good week this week. It was great to be able to get out, shake some hands, get on the road, see a bit of country, see some cattle, and just catch up with people. I always you always get back to the office and feel really motivated after spending a bit of time face to face with people. But in saying that, there's a bit of work to do.

I think boots on the ground is incredibly important. Our customers wanna have that connection with us, and we can't do that from satellite office across the world. We need to have that constant engagement, and we need to be going out and seeing the customers to really understand their businesses.

In terms of market insights and boots on the ground, in terms of of Ripley, who he's talking to on a weekly basis, the insights that each other can get off each other is good for the business going forward. What I love about what Ripley's doing is he can't win unless we win. And the more we win, the more he wins.

So it's a win win for both of us.

So just put some trust in people that are good at doing what they do. You may be really good at being a farmer, but I can't do everything, and I can't be across everything. So I'd rather employ people to help me get there. I've been interested in what Ripley and Stonex offers.

We've been looking for products that we can hedge our beef against, And so it's been an interesting ride so far, and we've look we look forward to expanding that.

You couldn't do what we're doing here in Australia without having someone's knowledge and background to deliver that. So you need to be able to to have that boots on the ground experience, but then also importantly leverage the capacity and the tools Stonex has to deliver that.