The Evolved Leadership Podcast
At the Evolved Leadership Podcast, we talk to successful business owners and executives who make the world a better place. David McDermott is the host of the Evolved Leadership podcast. David’s inspiration for the podcast came from a life-changing experience during his involvement in a youth leadership charity in his early twenties that challenged ambitious young leaders to not only achieve personal success as leaders in the world, but to also lead their organisations to give back to humanity in a meaningful way. After that experience David spent two decades coaching and consulting to a wide range of organisations in both the private and social sectors, where it became quickly obvious to him that his most satisfying coaching engagements occurred when he worked with leaders who had a meaningful purpose and mission that they were focused on in the organisations they led. The Evolved Leadership approach combines David's experience of what it takes to lead a successful enterprise, with his deep belief that the definition of a truly effective leader in today's world must include making the world a better place in a meaningful and practical way, at scale. David is also the CEO of Evolved Strategy, a business and executive coaching firm dedicated to empowering leaders to run successful organisations and to demonstrate an Evolved Leadership approach to their work in the world. This includes coaching development work that helps leaders to think strategically, develop a meaningful organisational purpose, and lead high-performing teams. The Evolved Leadership podcast is part of the Evolved Leadership Project, a research study of 100 interviews with successful business owners and executives who contribute positively to the uplift of the planet both as individuals and through the organisations they lead. The study aims to show that leaders and organisations who focus on contribution as well as profit, achieve much more satisfying outcomes for everyone they interact with, both internally and externally. Check out our podcast episodes and enjoy this storehouse of leadership wisdom from successful business owners and executives who are showing the world what it takes live as an Evolved Leader. To browse our wide range of articles and resources, as well as other podcast episodes, go to: https://www.evolvedstrategy.com.au
The Evolved Leadership Podcast
#44 Leadership, Trade Wars & Food Security, with Zach Whale, GM of Policy at Grain Growers
My guest in this episode is Zach Whale. Zach is GM of Policy at Grain Growers, a key representative body for all grain growing farmers in Australia.
Highlights of our conversation include how a great suggestion from Zach's mum led to his passion for grain growing, riffing with Banjo Patterson, the impact of Trump's tariffs on global trade, the serious issue of international food security, and how the Russia-Ukraine war affects global grains trading.
Enjoy the conversation.
To find out more about Grain Growers go to: https://www.graingrowers.com.au
To learn more about what it takes to be an evolved leader, and to check out our other podcast episodes, go to: https://www.evolvedstrategy.com.au
Hi guys, welcome to the show. I'm delighted to welcome Zach Whale to the show today. Zach is the GM of policy for grain growers.
10:12.16
David McDermott
Grain growers are a key representative body for all grain growing farmers in Australia. And just to put that in perspective, and Zach can correct me if I get this wrong, but as I understand, that's approximately half of Australian farmers.
10:27.41
David McDermott
So if you think of all the and all the farming that occurs in Australia, including marine, know, aquaculture. that's all the the fishing that goes on. Grain growing is actually half of that. So it's pretty significant. So, Zach, welcome to the show. It's great to have you on.
10:44.35
David McDermott
and Tell us a bit about who are you and, you know, i what what is Grain Growers?
10:50.91
Zach
Yeah, thanks so much, David. I mean, ah my you know the best day of my life is a day I get to speak about the grains industry and my place in it. So ah pretty excited. You were almost right. ah We probably account for about 50% of the agricultural value of production.
11:07.62
Zach
um We don't account for 50% of the number of farmers. So that's um that's that's me being technical there. But if you look at all of the the gross domestic product generated from Australian agriculture,
11:18.54
Zach
um Grain farming, um you know, alongside red meat um are definitely the behemoths of the Australian grains industry. So that sort of equates to a around 50 million tonnes of grain ah per annum, $33 billion dollars um of gross domestic product.
11:34.92
Zach
um 22,500 grain growing entities and then employing um thousands and thousands more through the value chain. So it's not an insignificant industry. um And curiously, a lot of people don't realise its importance or or how it fits into the broader economy. But every time you're drinking a beer, um it's probably got malt barley in it, or in some instances, wheat. Every time you eat rolled oats, that would be grown um from from an Australian farmer. Every loaf of bread um every Every pasta you eat, you know, overwhelmingly, um that that involves an Australian farmer.
12:06.68
David McDermott
Yep.
12:11.50
Zach
And you could be sitting in a noodle restaurant in Japan, and that would have a ah highly specific grain that's possibly come from Australia. um You know, Indonesia um would would also be buying a lot of Australian grain.
12:24.19
Zach
So it really is a mainstay in the pantries and in the diets of of every Australian almost.
12:28.85
David McDermott
yeah
12:30.41
Zach
and and so many people um internationally. But we'll probably dive into that and and why that matters a bit later, David. um So as you said, I'm the general manager of of advocacy and and policy at Grain Growers and and Grain Growers seeks to represent um our grain farmers are here in Australia and basically look to Canberra and look to that federal regulatory environment
12:46.95
David McDermott
Thank you.
12:55.76
Zach
and make sure that it's optimised for ah the profitability and sustainability of Australian farming. So that that is really all-encompassing. It includes you know capacity building and making sure that we have the right talent pipeline so that people have the skills and education they need to to participate in the industry.
13:15.33
Zach
It involves making sure that You know, the various crop protection products that farmers need to use on their farm are regulated in an appropriate way. Biosecurity, and and a lot of people may not necessarily know what biosecurity technically is.
13:30.90
Zach
They might think about the Ruby Princess or COVID um issues, but biosecurity is any of the living hazards that
13:33.19
David McDermott
Thank you.
13:37.60
Zach
um that impact what we do in Australia. So um pests and diseases that impact crops, um insects that get into stored grain and can can damage their quality, um all manner of things um that can come into Australia and wreak havoc in our agricultural industries or wreak havoc for our import markets and those other countries that we export to. So biosecurity um you know, is absolutely fundamental. So we spend a lot of time on those sorts of issues with with Commonwealth ah regulators and legislators.
14:09.17
Zach
And ideally, then um making sure that that, you know, as I said, that that production environment ah is optimised. There's an an awful lot of interdependencies and moving parts in any business.
14:21.76
Zach
In agriculture, you know, that's especially the case. You might have key inputs coming from the Middle East. You might have a small, um you know, machinery part coming from um the United States. You might have a worker coming from France. You you might have...
14:39.29
Zach
a market on the other side of the world and a whole lot of processes that need to come together perfectly, um you know, for that system to work. So never a dull moment. um And I certainly have a really interesting day job ah trying to understand those issues from the paddock and from from the um on the ground member perspective, and then also understand what policymakers are thinking about and what's happening in the political domain.
15:05.07
Zach
And then how do you sort of bring those two things together ah in a harmonious way. So long answer, David, but um yeah, certainly a a fascinating, ah fascinating day job.
15:16.35
David McDermott
Well, it's it's a great answer and I love you your, i think, first comment that your favourite day is a day that you're talking about grains. And you've mentioned already quite a number of things that I'm really looking forward to diving into.
15:30.76
David McDermott
um But I did just want to ask, and I know you have a story around you know how you actually got into the grains industry and and your passion there. can Can you share some of that by way of a bit more introduction?
15:43.33
Zach
ah I'd love to, and I have to caveat with this, that there's no offence to jackaroos and and people that ride horses for a living, but um i I don't know if this is the case for everybody, but I vividly remember the moment when what I wanted to do when I grew up changed forever. So,
16:01.15
Zach
I grew up as ah as a country boy. My mum's been a principal of of small country town schools. My dad ah has been a farmer for his whole ah life and and I grew up riding horses um and camp drafting and and immensely involved in agriculture.
16:15.15
Zach
And I wanted to be a jackaroo. And and for the uninitiated, a jackaroo is... is a person that basically rides a horse, manages livestock. um They might spend time droving, pushing large herds of cattle along um Australia's travelling stock route network, which is worth a Google if you want something interesting ah to read about agriculture.
16:35.51
Zach
That's a whole different podcast in itself. But, you know, picture your most romanticised notion of an Australian and um farmer ah on a horse.
16:37.82
David McDermott
Mm-hmm.
16:45.51
Zach
Imagine a Banjo-Patterson or a Henry Lawson poem. That's what I was pretty convinced ah was going to be my life. um I went to cattle shows and pony club and um camp drafts and all of those things.
16:58.34
Zach
And I was in late high school and I wasn't particularly book smart. I wasn't winning any ah awards for my intellect. I actually found large aspects of school quite quite difficult.
17:10.21
Zach
And my mum suggested I go in a public speaking competition called the Lions Youth of the Year competition. And it involved... a five-minute pre-prepared speech, which I wrote on on youth suicide, especially in regional Australia, which was which was a problem then and is unfortunately still a problem now.
17:27.12
Zach
And you had to answer two impromptu questions in front of a live audience, and then you had to have an interview. So was sort of three stages, read a speech, two impromptu questions of about two minutes, and you had about 15 or 20 seconds to prepare, give your answer to the live audience, and then and then have it have an interview.
17:44.17
Zach
And my mum suggested that, well, what's your general knowledge like? um And I always had ah had an affinity with older people and my parents' friends, and I often listened and talked to them as much as people my own age, so I probably didn't have a bad grasp of general knowledge. But mum said, well, why don't you get the Australian newspaper in the morning when you get to school? You could get it for, you know, a dollar a day or something.
18:05.41
Zach
read an hour and a half bus trip. we We went to school quite away from where we lived. So an hour and a half bus trip home, read the newspaper. And then while I'm cooking you dinner, I'll ask you random questions that are in the news and you can practice your impromptu responses.
18:20.22
Zach
And so I thought, yeah, okay, that's a fantastic idea. And day one, you know, I go to the current affairs page of the newspaper and I start reading and I don't know exactly what I was reading about, but You know, it could have been um conflict in the Middle East. it It was probably around the time that George george W. Bush was president and and I would have been reading about all of that and and instantly, like literally instantly, I was like, oh my, like this is just absolutely fascinating.
18:46.12
Zach
And as the month went, you know, I won a couple of stages of that public speaking competition and and my general knowledge went through the roof and I i then absolutely loved reading the that the the sort of,
18:59.18
Zach
International, i enjoyed reading all of all of the news and current affairs, but in particular, ah the international affairs and and sort of international relations components, what the UN was doing, um what was happening in the Middle East, how you know UK prime ministers or US presidents were posturing.
19:15.30
Zach
um And it fundamentally changed everything. I then wanted to become a diplomat. um And all I wanted to do was work for the Australian government, Department of Foreign Affairs and Trade, be a diploma diplomat and and um broker for Australia's interest on the international stage.
19:28.80
Zach
And and the the romantic notions of being a jackaroo riding a horse and droving sort of dissipated. And I still love doing those sorts of things. But ah but I think I just realised that for me and my curiosity, I had a different path.
19:43.33
Zach
And so i tried to get a graduate job with the Department of Foreign Affairs and Trade and that didn't quite work out. And I did get a graduate program with the Australian Department of Agriculture.
19:53.99
Zach
And I thought, well, I am a rural boy. I love agriculture. i know an awful lot about it. I've got an affinity with it. I didn't study it at university, but that's okay. I'm a fast learner.
20:05.58
Zach
um I did study international relations and politics. And and so i I walked into the Department of Agriculture for day one of my first white collar job. And I absolutely fell in love with agriculture as a subject matter and spending. And I imagine I'll spend the rest of my career working in it in different ways.
20:23.72
Zach
And it's just one of those sliding doors moments when you think back as to what could have been and what ended up happening. I mean, no, I'm not on a horse, but I'll probably give my entire career to, you know, in the service of agriculture.
20:30.54
David McDermott
you
20:34.08
Zach
And it's just nothing could make me more passionate or excited or interested in in the complexities that go with it. So I sort of just, I don't know if everyone can telegraph the moment um where their trajectories change, but that's mine.
20:46.71
Zach
um And as I said, I don't think I'll be able to shake the yeah agricultural addiction, um but who knows?
20:53.33
David McDermott
Well, what an amazing story and and two and very contrasting roles. the the i guess the drover's or jackaroo's life of being on the horse, rounding up cattle.
21:06.26
David McDermott
As you say, badjo the Banjo-Patterson, you sort of romantic ideal of of the jackaroo versus, know, actually, i guess, being literally ah in policy and and and in the in the system side, the policy side and how it impacts on all those that you know, and really farmers and, you know, just a bit of context from um what my knowledge of grain growers so far.
21:35.28
David McDermott
It's great the farming, the grain growing farming community are primarily sort of multi-million dollar farming operations, usually not gigantic. You know, we're not talking hundred million or billion dollar enterprises. They're usually family businesses.
21:49.49
David McDermott
They're not tiny businesses, ah sort of usually a few million, you know, that or or a bit more. The machinery is pretty expensive to um to run these sorts of operations.
22:00.38
David McDermott
So these are, the I guess, the modern day grain growing jackaroos. yeah They're not necessarily on the horse, but they're they're in their you know, fancy tractors and harvesters and combine harvesters, et cetera, et cetera.
22:13.27
Zach
Yep.
22:13.78
David McDermott
You mentioned Banjo-Patterson. I grew up also with all sorts of influences, one being Banjo-Patterson. ah just really remembered his famous poet poem or some lines from one of his poems where he talks about exactly as you described, the drover's life. And he says that, know,
22:33.70
David McDermott
the drover's life hath pleasures that the townsfolk never know. And he talks about, you know, the townsfolk with doing the round eternal of the cash book and the journal, whereas the drover gets to enjoy the visions, you know, the sunlit plains extended, the visions splendid of, you know, the wondrous glory of the everlasting stars.
22:48.15
Zach
Our vision's splendid.
22:51.18
Zach
Yeah.
22:53.31
David McDermott
So all of those images and memories flooded back.
22:56.53
Zach
Yeah.
22:56.70
David McDermott
Exactly.
22:57.05
Zach
I doubt it'd suit the office, Clancy the Overflow. It's it's a it's a great poem and all and i I doubt I would have um suited the drover's life.
23:00.07
David McDermott
Exactly.
23:04.79
Zach
And I think that's the that's one of my favourite poems because, you know, I'm on that in reverse. I think the loneliness, and and this is probably something that our our members would reflect on far better than me because I've lived a very urban life
23:12.95
David McDermott
Yeah.
23:17.01
Zach
um you know, since I left home. um But it's often, there's a lot of solitude and there's a lot of ah isolation that comes with Australian agriculture, not exclusively, but but especially the broadacre parts of agriculture.
23:24.23
David McDermott
Hmm. Hmm.
23:30.92
Zach
It can it can be lonely um and isolating. And I think for some people, you know, that that's probably a real challenge. and And it definitely was for me. I spent a couple of months before university looking after a farm while the owners were in Europe.
23:44.85
Zach
And it was an incredibly, um I was honoured to have, I guess, the property entrusted to me. But basically, I spent two months by myself as an 18-year-old and I almost went um around the bend.
23:57.56
Zach
um And so it was it was probably a good insight to me that, you know, some people probably love and thrive off that.
23:57.85
David McDermott
Yes. Yeah.
24:03.08
Zach
And and I think for me personally, you know, I realised that I might need a more urban existence with proximity to to people. and And that's just, you know, everyone has their own proclivities and and personality traits.
24:11.14
David McDermott
yes
24:15.71
Zach
And mine probably requires ah density of people.
24:16.63
David McDermott
yeah
24:20.85
David McDermott
Yes, and I would say you're probably in the majority there, and myself included. So moving to a ah more an organisational view and and beyond organisational, ah and national and global view, let's um bring in the you know the reality of the tariffs that are a really hot topic globally now with Trump and signing a whole range of executive orders and some of those being tariffs. We've got ah Canada, Mexico and China you know being the focus of the tariffs at the moment with a 25% tariff on and Canada and Mexico delayed for a month, but said to now come come into effect on the 4th of March. And both those, you know the leaders of those countries ah
25:09.00
David McDermott
and strongly communicating that they hope that that will not be the case. But at the moment, that's what's the communication from from Trump and his administration, as well as an an additional 10% tariff on China. So there's already a 10% tariff on China that's been imposed and now and Trump's declaring there's it going to be an additional 10% imposed shortly.
25:31.85
David McDermott
and So can you speak a bit to, I guess, both at Australian level and globally, what you see the impact of those tariffs, should they and genuinely come into effect, what you see the impact being on Australia, Australian grain-growing farmers and how that ripples out you know in the to the spiderweb of all the grain growing touches, as well as globally, trade routes, et cetera, et cetera.
25:57.83
David McDermott
um can you Can you speak a bit to that, Zach?
26:01.40
Zach
I can, and and it'll only take a couple of hours to to to cover all of that.
26:05.30
David McDermott
Hmm.
26:06.73
Zach
I think I might rewind um a tiny bit and then I'll speak specifically to what's happening in the United States now and and its possible implications. Australia's historically sold um the vast majority of of specific commodities to individual markets. So a few years ago, Australia,
26:24.36
Zach
We would sell most of our chickpeas, which are grown predominantly in Northern Australia to India. We sold most of our wheat to Indonesia, and we sold most of our barley to China, and we sold most of our oilseed, so think of um canola or rapeseed as it's known in in Europe and North America, um into the European Union.
26:41.06
David McDermott
Mm-hmm.
26:42.78
Zach
So of our biggest crop commodities, we sold most of them to one market. And then in some instances that could be as high as 80%, and then the 20% residual would be dispersed across a whole heap of markets.
26:56.35
Zach
and some yeah and And so, you know, China was was that for barley. And um China put a tariff on Australian barley and that market was was effectively blocked.
27:07.98
Zach
It doesn't have to technically be blocked because you could put the tariff on the commodity and and try. But when when tariffs are are of of high volume, usually they're trade stopping. And so it means the trade will be diverted elsewhere.
27:21.38
Zach
um because that tariff, you know, it just is commercially unviable for for any person ah in that market to purchase the goods, which was definitely the case for Australian barley into China and prior to that Australian chickpeas into India.
27:37.49
Zach
And so what ah what ultimately happened was Australia started selling its barley to Saudi Arabia. Previously, French barley was going into Saudi Arabia. That French barley then moved into China and Australian barley moved into Saudi saudi Arabia.
27:51.31
Zach
So if the demand equation doesn't change, so the the world still needs the same amount of barley and the pricing structures or the artificial pricing structures by tariffs come in, then ultimately the grain flows will just change and adjust.
28:06.75
Zach
um and China still gets its its malt barley. They just get it from so from from France. Saudi Arabia gets its barley, but it gets it from Australia. Australian farmers lost money because China was a premium market.
28:15.19
David McDermott
Mm-hmm.
28:18.08
Zach
The Chinese consumers probably lost quality because they had become quite reliant and highly satisfied with Australian barley, and they probably would have preferred that to French barley. The Saudi Arabians were buying a lower quality product ah for a different purpose. So they were probably getting better quality Australian product that they didn't need to be of that quality because they were using it for a different purpose. They were using it for feed. They weren't making beer out of it.
28:42.80
Zach
But long story short, Australian farmers lost money. Everybody else gets what they need. Quality's compromised and everything's less efficient. um India, similar story with our chickpeas. We started selling higher volumes of our chickpeas into Pakistan and Bangladesh um and we were locked out of India. We're currently back in India um for the time being, but there'll come a point where we'll be we'll be locked out again.
29:07.53
Zach
Why am I saying this? I'm saying this because Australian farmers across almost all commodities, not just grains, are trade exposed. We export the vast majority of what we produce, I think, on aggregate across all of Australian agriculture.
29:21.17
Zach
It's around 88% is exported. So we're highly food secure in ah in a general sense.
29:25.11
David McDermott
Mm-hmm.
29:27.14
Zach
we We produce more on aggregate than we need, and therefore we export a lot. We tend to sell to one predominant market um and they invariably pay the most. And then if that market gets interrupted for whatever reason, either because of political issues or or for other geopolitical factors, then we have to scramble to find alternate markets.
29:48.83
Zach
um I'll probably talk in a second about how we de-risk that or what can we do about it, this the so what. But I think it's just important to note because what what we effectively did when, say, we were blocked out of the Chinese barley market, ah we went to the World Trade Organization and we said, World Trade Organization, there is a rule book.
30:10.17
Zach
ah We don't believe that China's case for putting the tariffs on Australia was well-founded, and we would like this to be reviewed in an independent and impartial way. That process ran its course, and ultimately the tariffs were removed by China and Australia got to regain entry.
30:27.35
Zach
um This, at a really generic level, in inverted commas, is called the rules-based order. It's the trade rules that have been set up and agreed upon from around the last half of last century to now.
30:40.52
Zach
And over the last couple of years, we've seen, and what what political sort of international international relations experts call the dance of the giants, we're seeing a few monstrous markets, um India, China, and definitely the United States and a couple of others, having huge influence and starting to play by their own rules.
31:01.52
Zach
um So the United States hasn't um been as committed behind the World Trade Organization for the last few years. um There's sort of vacancies in some of the special committees that exist under that structure.
31:12.35
Zach
That's sort of been grinding to a halt. And now you see um a Trump administration basically throw that rules-based order out, ah which leaves the rest of the world with a much more difficult operating environment.
31:26.76
Zach
Now, if you're China or the United States, and maybe to a lesser extent, um the next couple of economies, you are so big, You can possibly run your own race still win.
31:38.72
Zach
I'm not saying everyone in the United States is going to win, but you are big enough, and ugly enough to manage that. Australia is a classic middle power. We're not insignificant, but we certainly don't write the rules.
31:50.51
Zach
And we rely on that international rules-based order or that architecture to give us certainty for how we trade. And because we trade so much of almost everything we produce, be it iron ore,
32:01.76
Zach
um you know even though it's a small amount. Comparatively, the the steel we produce and export, which will get caught up in steel and aluminium tariffs, um you know whatever it is, when you take that rulebook away, it creates a really opaque environment.
32:17.57
David McDermott
Yes.
32:17.85
Zach
In the short term, that could be beneficial for some commodities because in the chaos, our commodities will be sought after and we'll slip into markets and and then we'll be great. But at the macro level, if you zoom out,
32:28.77
Zach
It means we're all going to have uncertainty and risk to manage with no idea how disputes will be resolved.
32:40.20
David McDermott
So, yeah, if I understand right, I mean, it's interesting you're talking about historically the World Trade Organization has been, it sounds like, an effective, I guess, mediator of of tariffs coming in. And you it's a great example, the China example, you know, where you actually disputed that and you went and there was a governing body that had authority and you said, look, we don't feel that this is, um yeah I guess, fair or equitable. I'm not sure that's exactly the right word, but whatever the case, it was reviewed and the outcome was that trade was able to resume and the tariff was removed.
33:18.55
David McDermott
It sounds like and now with the recent tariffs, the World Trade Organization doesn't have the same clout with the US. And um It's a very different scenario. The US is effectively you know doing what they want. Is that the case?
33:34.32
Zach
That's absolutely the case. um those
33:36.20
David McDermott
So what's what's the difference? Why why did ah the World Trade Organization or how did they have the power to actually, I guess, override China's decision? But in this case, they do not have the power to override the US's decision.
33:49.85
Zach
I think it's probably a little bit like the United Nations because that's probably a simple example that everyone knows far more about. It's only as strong as its strongest as its strongest supporter.
34:00.91
Zach
So the moment big players start to pull away from it, it just undermines the strength of of the institution.
34:01.26
David McDermott
Um,
34:08.40
Zach
So if if you take one of the biggest economies in the world – if they start to play by a different set of rules, the legitimacy and the ability for that entity um to do its thing starts to corrode.
34:21.71
Zach
And then following that, other markets, other countries similarly we will rely upon that instrument less and less.
34:22.31
David McDermott
um,
34:29.80
Zach
um So it's just a corrosive um impact. and And that would be the same if if if China and and other big players started to pull away from it too, it would have the same impact. There was a funny anecdote the other day that it's kind of a bit ironic these days, but you know China is now the arbiter of a rules-based order and international cohesiveness and and the US is a force of destabilization.
34:50.84
Zach
Who would have thought that would have happened if you rewinded 20 or 30 years ago, that would have been a laughable proposition, but the world is an uncertain place and and here we are.
34:52.58
David McDermott
yes
34:59.83
Zach
And I think the message is, and I'm i'm assuming it's the same across so many businesses, I think we just have to pay attention to what's happening. It's going to be increasingly hard to predict and we're going to have to be increasingly nimble um to respond to whatever's thrown at us.
35:14.67
Zach
In our sector specifically, the Australian government invests heavily in um agricultural expertise in market. And we would say now more than ever, we need experts in as many exporting ah sorry in as many importing nations as possible so that if we're displaced from other markets, we've got deep relationships and business-to-business relationships in those smaller markets that previously may not have been particularly useful to us.
35:28.75
David McDermott
Yep.
35:39.16
Zach
But they'll certainly be useful to us if a bigger, more lucrative market is flipped. um And so, you know, our message to the Australian government is we we need capability and investment across as many markets as possible so that we can respond to the uncertainty.
35:44.59
David McDermott
Yep.
35:53.61
Zach
And look, in credit to the Australian government, there's been a lot of investment in that space.
35:53.99
David McDermott
yep
35:58.60
Zach
so So we think we're well positioned, but it's going to be, it's more important now than ever.
36:04.67
David McDermott
So um i know another hot topic when it relates to grains is, and and I guess all food, is international food security. and ah you know there's a I think the the data is around 50 million people are projected to face food insecurity in Western and Central Africa. i What's,
36:26.80
David McDermott
you know the I guess, the role that grain growers focus in Australia have to play around addressing the challenge of international food security. Can you um give your views on that, Zach?
36:38.92
Zach
ah it's it's such such an It's such a good question and such an important topic. Australia on international terms is is not a big grain producer. Around 3% of international grains is produced in Australia, but between 10% and 15% of internationally traded grain comes from Australia.
36:57.87
Zach
Now, that might raise an eyebrow. How does that work? The biggest grain producing nations also have the biggest domestic populations. So India and China are huge producers,
37:05.22
David McDermott
Uh-huh. They eat a lot of their grain that they produce.
37:08.24
Zach
They eat what they grow and they import the balance.
37:09.31
David McDermott
Yeah.
37:11.72
Zach
um
37:11.71
David McDermott
Yeah.
37:12.45
Zach
ah Australia has a very small domestic population, um so we export a greater percentage. So we are important on an international scale for grain. And grain ostensibly will be made into a food product or fed to an animal which will become a food product or will be, in the case of our oil seeds to Europe, it'll it'll create biodiesel.
37:33.00
Zach
But there's also byproducts that will be eaten by animals and you know, different meals and byproducts. So highly linked to food. um If you take a country in the Middle East like Egypt, um they have a ah complex tender system to to procure their wheat.
37:44.10
David McDermott
you
37:48.91
Zach
And if they can't procure enough of it, there are instantaneous and real impacts on the street. um If you look closer to home, one of our, traditionally one of our biggest wheat markets, Indonesia, they consume a huge amount of Australian wheat.
38:04.66
Zach
Let's just pause and imagine for two seconds if they couldn't access the amount of grain they needed. what What would that mean for them and their food security and the stability of our of our region and our nearest neighbor?
38:18.32
Zach
That would be a very ugly proposition. So the world requires a huge amount of grain. And if the world can't get it because of drought, famine, political conflict, trade disruptions, or any other black swan event like COVID and and, say, not being able to get the ships in the right places to get the grain where it needs to go, there are real ramifications.
38:41.97
Zach
And so we think about this in terms of, again, like I said at the very start, we think about federal legislation and regulations. We think, well, how are we de-risking our food system and how are we de-risking our supply chains and how we making sure we have contingency built into what we do so that if anything unexpected happens, we can still provide critical you know food to our our local Australian market and our international customers that rely on it.
38:54.50
David McDermott
Thank you.
39:11.15
Zach
Now, it may not always be Australian grain that goes to the feminine impacted country that needs the grain, But back to my earlier example about if demand doesn't change, our grain is going to someone.
39:22.59
Zach
And if our grain doesn't go to someone, then they buy grain from someone else who would have previously sold to someone else. So we mightn't sell to Egypt, but if we can't sell our grain to our customers, the grain that Egypt eventually was going to get goes to somewhere else.
39:28.05
David McDermott
Yes.
39:35.05
Zach
um
39:34.94
David McDermott
yeah
39:36.32
Zach
Russia and Ukraine, between them, I think it's 30% of total grain production worldwide comes out of the Black Sea. So an ongoing conflict between Russia and the Ukraine, in a worst case scenario, could take 30% of grain out of the world market.
39:52.52
Zach
That increases the importance of Australian grain on the international market considerably. Now, a simplistic approach would be, well, that would lead to upward pressure on domestic pricing, which is great for our members, and we represent them and their interests.
40:06.12
Zach
But at another level, who's not getting fed um and what ripples does that have? So I think it's a fascinating topic, and Australia is never going to feed the world.
40:16.69
Zach
um We're not even going to feed Asia, but we are going to play a big role Australia.
40:17.11
David McDermott
Exactly. Yep.
40:21.09
Zach
ah in helping feed both of those markets, including ourselves.
40:23.37
David McDermott
Yes.
40:24.65
Zach
So, you know, note for policymakers, ah increased climate instability, rail links between Adelaide and Perth getting washed out, the Bruce Highway in Queensland with the weather events recently.
40:25.07
David McDermott
Yes.
40:34.82
David McDermott
Mm.
40:37.31
Zach
You know, these things should all be, and COVID itself, ah we don't talk about it as much these days, thank goodness, but... You know, we should be thinking about these things every minute and saying, are we investing enough and are we preparing enough um so that this system can keep working?
40:43.78
David McDermott
Mm.
40:51.79
Zach
Because if it doesn't work, um it's fundamental to to everything.
40:53.59
David McDermott
Yeah.
40:56.67
David McDermott
Yeah. So let's just probe into the Russia-Ukraine topic a little more. And that, you know you presented, and i guess, in a way, a positive in that worst case scenario of if if Russia and Ukraine suddenly stop exporting grain to the rest of the world, know, I guess,
41:16.62
David McDermott
A positive for Australian grain growing farmers is their grain will suddenly be much more valuable and there'll be a price increase that they'll be able to put on that. However, as you say, then um looking globally and a ah major negative is there won't be enough grain to feed the world. um There'll be a huge gap in Australia.
41:36.35
David McDermott
ingrained getting to where it needs to go to. Just on the conflict itself, i I mean, I'm not a military expert, but I have been following, you know, lead leading and figures in the space who who are very aware of what's going on in in Russia and the Ukraine.
41:52.01
David McDermott
And what I've heard so far is that this year, 2025 of all years, after and have there have been ah significant numbers of lives lost ah so far in this conflict, huge numbers on the Russian side, yeah as well as significant Ukrainian lives, and and a really tragic situation.
42:12.84
David McDermott
it It is the year that yeah certain leading figures are saying could be the the year that ah some form of truce is, or a settlement effectively is negotiated, which would of course would be a good scenario after you know such a ah tragic event.
42:31.05
David McDermott
and However, In terms of a worst case scenario of the conflict continuing in a scenario where um food exports stop from both countries, what could that know ripple out to in terms of the effects on the rest of the world? Can you, I guess, paint that what might be a doomsday or grim scenario? What does it exactly look like if that remains the case for the the foreseeable future?
42:59.57
Zach
Yeah, i'm I'm not an expert on on the the the sort of specifics, but i would I would Google food instability in countries like Egypt and I would look at images of ah people lining the docks waiting for shipments of wheat to arrive. I think there's there's examples like that um that that are that are everywhere. It would lead to ah shortage of grain and it would lead to those, especially those lowest cost lowest quality markets being being short.
43:31.87
Zach
um And they would they would have to scramble and that would lead to you know increased you know ah malnutrition and and food insecurity. So it it happens. there's There's examples of of where these ah supply chain shocks have very real impacts on on on customers. It's hard to imagine for us um I think the biggest issue we had during COVID at a household level was, you know scarcity of toilet paper.
44:00.31
Zach
um It would have been a very different scenario for us if we weren't able to buy bread and rice.
44:00.24
David McDermott
Yes.
44:05.28
Zach
um Now, yes, we all worked walked into supermarkets at different times where, you know, there were limited things on the shelves, but I'm um at least in my case, and again, i i lived I've always lived in highly urbanised centres, there was always something that,
44:21.86
Zach
um And so I think it's thinking about well what if there was nothing. um And I think for markets in other parts of the world, that's that's ah that's a reality um that they have all all the time.
44:26.89
David McDermott
Yep.
44:33.29
Zach
And I think it then just makes us think about ourselves, not just in the sense of how do we um extract profits and thrive as businesses, but how do we think about Australia and our our our crucial role in in contributing to
44:33.60
David McDermott
yeah
44:48.37
Zach
you know, international stability and provision of of nutrition, which which we are in a driving seat to do. And I think it's something we should be really proud of and excited about.
44:56.56
David McDermott
Yeah.
44:59.76
David McDermott
Yes, indeed. And I want to ask a couple of questions about that shortly. Without wanting to you know remain too heavy and grim, I mean, look at communist China and their history and Chairman Mao and you know the great ideal of communism, which is equality for all. But the reality was you know that under Chairman Mao, the country got to the point where there was mass starvation,
45:25.31
David McDermott
yeah the strategy for ah so ah distribution to all of you know enough food to to live a decent life failed and the result was a lot of deaths due to starvation.
45:38.87
David McDermott
If 30% of grain suddenly stopped getting out to the world, would we be talking about that level of ah impact yeah in certain regions of the world or would people simply look at alternative foods and and still be able to to survive rather than starve
45:56.33
Zach
ah it's ah It's a really good question. I think the the optimistic answer to that is we scramble and and we always make do. There have been droughts and famines forever and there have been impacts, but there's also been human ingenuity and responsiveness and adaptation.
46:15.46
Zach
So I think that the the the sort of optimistic answer is, of course, economies and markets will scramble to get what they need.
46:15.89
David McDermott
yeah
46:23.68
Zach
The way in which they get nutrition will absolutely change if there's an acute shortage. um So I think i think that's you know that's a That's always the case.
46:34.84
Zach
And that was the same for us when when the shelves are empty of, say, a certain fresh produce and we we started eating more canned food. It's just at a different level of severity. So I think the optimist in me says markets scramble and and adapt.
46:44.49
David McDermott
yeah
46:49.58
David McDermott
Yeah, that that's fair. So, um and Zach, I'll just edit this little bit out. I got a bit excited around that topic. But your your previous point, which I'd said I'd ask a couple of questions about, just suddenly slipped my mind. what What was that point that you made there?
47:05.27
Zach
was it Was it still on food security?
47:07.37
David McDermott
Yeah, it was just when i before i asked about him and I talked about Chairman mao and Chinese point.
47:13.74
Zach
No.
47:13.97
David McDermott
it's It's all right if if it slipped. um We can just move on to it. I might actually ask a bit more. I mean, you talked about aluminium, tin, coal, wine in relation to international food security.
47:24.57
David McDermott
du Could you speak on that or we could move to you know some some more of your leadership insights?
47:34.51
Zach
Yeah, I can.
47:35.03
David McDermott
sweet Yeah, and sort of terms of bit more on international food security.
47:41.71
Zach
Well, I think broader agricultural impacts maybe.
47:44.37
David McDermott
that Yeah, so that's what we'll lead into. So here we go. Three, two, one. So, Zach, in terms of um broader agricultural impacts, I know in previous discussions you and I have had and on this topic, you've you've mentioned a number of key points. what what What do you have to say, i guess, beyond the international food security when you when we look more broadly that topic?
48:07.64
David McDermott
and the at that topic
48:09.91
Zach
I think it's just similar a similar set of issues. it's It's just a different commodity. So if you look at the Australian wine industry, um that that's got huge that that's got a huge export footprint.
48:21.07
Zach
um And so as instability increases, and I should say um wine also had the same issues with with China that the Australian barley industry did. So um the Australian wine industry followed a very similar path about six months behind the grains industry in dealing with its trade dispute into China.
48:36.30
Zach
um the the beef We export um a huge amount of of of premium and lower quality Australian beef um to to world markets. So any of these markets will be constantly thinking about, um you know, what does this situation mean? And some of those products won't be as vital for...
48:53.17
Zach
um you know food security as others. um we We export a huge amount of um raw minerals. ah Increasingly, we export a large amount of um sort of precious ah minerals that are used um in in a range of um sources from renewables to microchips to everything else.
49:06.56
David McDermott
Thank you.
49:09.56
Zach
um you know We have a small um export steel and and aluminium industry. So you know all of these sectors will be thinking about exactly the same stuff as as the Australian grains industry in um how do we navigate this um because our our domestic markets um are quite small in a lot of instances.
49:28.59
Zach
and And if we lose or have significant disruption in that international environment, um that that has real ramifications for you know for those businesses. So I think we're all in it together. It's not just Australian agriculture. I think it's you know ah our trade exposed a trade Australian economy at large.
49:46.25
Zach
um And there's a there's a monumentous challenge for the Australian government and industry um to be really smart ah in the next couple of years to to work out how we navigate the the increasing uncertainty.
49:57.92
David McDermott
Yep. So... We don't have a great deal of time left, unfortunately, but I do just want to touch on you as an individual leader. We've mainly focused on yeah the fascinating topic of grains and how that impacts at a national and global level.
50:14.62
David McDermott
um But ah can i ask just a couple of questions before we finish, Zach? One being around you know your day-to-day business. um I mean, grain growers interacts politically, as I understand.
50:27.94
David McDermott
i mean, do do you get to the point of stepping into parliament you know or yeah know at least being consulted? how How does your role interact at ah at the political level?
50:37.66
Zach
Yeah, it's it's a great question. We we regularly, at an academic level, um Well, that's probably the wrong word, but but we regularly prepare submissions to parliamentary and government inquiries. So in the first instance, we work with our members and and our it's called a national policy group. It's a group of 15 elected members that help us shape our policy direction. We work with them on and on issues, develop principles and beliefs on on key topics.
51:02.21
Zach
We write submissions about that. And then invariably, we end up ah standing in front of parliamentary inquiries and government inquiries talking about those issues that matter. um and and also speak to key ministers ah and and key parliamentarians ah every other day to make sure that they understand the complexity within our sector.
51:22.83
Zach
Sometimes they come to us and and say, this is complicated, we we would love your input. And sometimes we we go to them and say, this is what we're hearing from our members. This is what we think is a problem.
51:33.87
Zach
How do we work together ah to get good outcomes? um We increasingly think of ourselves almost as a knowledge broker. It's a complicated industry that we know a lot about and government and and politicians are busy trying to work on a whole range of things simultaneously.
51:49.23
Zach
How do we help them understand the complexity of our industry um so that government can make the best decision possible to achieve their objectives? They've got different objectives to us. I think everyone acknowledges that.
52:01.73
Zach
but how do we give them the information they need? And and that's a really exciting role. It's not always about being at the table and saying, you know, you you must do X, Y, and Z. Sometimes it's about, you know, did you know did you know this? Do you understand how this works? How how can we help you manage this effectively?
52:19.05
Zach
um And that's that's really exciting. I think being a knowledge broker is is a great sort of position to be in, you build trust and legitimacy, um you make sure you're communicating member issues um as authentically as possible.
52:31.17
Zach
um and And politicians and decision makers take that seriously, because that they will ultimately, every politician, despite what you might think of the colour of their party, ultimately, they want to make the best decision possible.
52:45.51
David McDermott
And in terms of ah leadership, Zach, so is there insight, whether it's in your time at Grain Growers or um in in your history prior to Grain Growers, is there an insight that you can leave listeners with from a leadership perspective, whatever comes to your mind in response to that question?
53:04.69
Zach
He...
53:07.86
Zach
Yeah, it's so simple. that There's two things that have, that have um one I learnt early and have clung on to for dear life and the other has taken a lot longer to learn and and I'm still on a learning journey with it. I worked with a fabulous manager when I was ah a bureaucrat in Canberra early on in my career and he was never to be seen when we were succeeding.
53:28.11
Zach
um He was almost lazy in some respects. He was he was never to be seen. Everything was good and this guy was was just um nowhere. And I remember thinking to myself that, you know, I don't know if he's really pulling his weight. And then something would go wrong and he would materialize right before our very eyes, stand in front of us and help us through it.
53:48.31
Zach
And then the moment it was smooth sailing again, he would just slip in the background. Now, history tells me he was working hard the whole time, probably understanding what's an important risk and what's not. um but we didn't see him when we were winning.
54:00.67
Zach
We only saw him standing in front of us when we were losing. Now, gee, talk about a way to empower your staff. Everyone that worked for him would have walked walked over glass for him. um And I just never, ever saw one person waver in their commitment to him because of how he treated us and how he let us have the credit, um but then also helped us manage risk and uncertainty.
54:23.54
Zach
So that that's the number one thing. I had a colleague the other day was was worried about something going awry. And I said, oh, well, if it comes out on top, it's all because of you. And if if if it comes out... ah badly, well, you know, blame me.
54:36.62
Zach
And it was a little bit tongue in cheek, but that's that's what happens with leadership. if If it ultimately failed, well, that was on my watch and and and I'm partially to blame for that. And yes, similarly, I'm partially to blame for the success, but um you know, I don't ah don't need to bask in the glory of of that.
54:51.81
Zach
So I'm happy to share that.
54:53.01
David McDermott
yeah
54:53.65
Zach
So that that's not always easy to do. I think sometimes we all want credit for good work, but but that's something that I've tried to do. and of and And that's just stuck with me um really clearly.
55:04.40
Zach
The other challenge I've had is to try to be the smartest person in the room. I've had brilliant people work with me um and and work under me as i as I started to get promoted into roles where I had staff.
55:16.17
Zach
And sometimes I wanted to be better at what the staff were great at And I spent a long time really stressing about not being able to match them for intellect or match them at what they were good at.
55:25.15
David McDermott
um
55:26.81
Zach
and And it was just... You know, obviously this is a cliche and everyone talks about it. You don't need two geniuses of the same form of genius in the room at the same time. You only need one. and I'd rather diversity of thought and a team that together covers all bases.
55:42.41
Zach
I have things I'm great at. Um, I don't employ people that are also great at those things. That doesn't make a lot of sense. But I've got a team that have got diverse skills that far outstrip mine in certain areas.
55:54.75
Zach
And and if if I can empower them to do good work and they know that I can round them out for the things that they're, you know, less adept at, then, um you know, happy days. So I think that's, that's you know, they're they're the two bits for me. Yeah.
56:11.47
Zach
You know, the the latter the latter is harder than the former, um but I think you just have chip away at it.
56:14.76
David McDermott
Yes.
56:17.55
David McDermott
And it's really interesting. There are two really great points that you just made, Zach. And yeah on the second point around, I guess, at bringing a team around you or you not not needing to um to be the best at everything, however you may frame that.
56:36.66
David McDermott
ah Founding CEOs, particularly, that I've seen do their job really well, they get that they don't they They really can be you know the least smart person in the room in terms of overall skill set and various functionalities, but their their skill set is to attract and and get commitment and buy into the enterprise from arrange the right team of people who who have the skill sets to get the job done.
57:03.74
David McDermott
Get the right people on the ship, as Jim Collins says, before you actually set sail. So um it's it's a really great point. And on the first point around, you know, your...
57:15.19
David McDermott
and your own, I guess, supervisor or met leader at the time, historically, who was there when i there was a problem, but disappeared when things were flowing well.
57:29.81
David McDermott
um It's so rare from my observation over i two decades of consulting to businesses now and at all levels, that you see a leader who really has those traits and who actually shows up fundamentally seeing their role as to be supportive when support's needed and to step back and empower when it's not.
57:51.24
David McDermott
And of course, they've got but when things are flowing, they've got their own stuff that they're focused on. Often a mistake that I see as a pattern, and it and it really is destructive, is and particularly fit for CEOs, they're they're not just being a CEO, they're being a CEO, but they have a particular interest and passion in you know sales or business development or a technical aspect or the R&D or innovation. And they they focus on that at the cost of the supportive role, which is the primary focus focus for their CEO role.
58:23.95
David McDermott
It can certainly work to have, ah I guess, a secondary passion as a CEO and to help out and step in when time allows. But the number one role of the CEO is exactly what you just described, is to be there to support when needed and to step back and empower when when not needed in it And it's rare that you find that. so really great point.
58:47.49
Zach
simple Simple in theory, like so many of these things.
58:50.85
David McDermott
Exactly.
58:52.14
Zach
Yep.
58:52.64
David McDermott
yeah Yeah, that's right. thank you so much for your time today, Zach. That was a ah really, really stimulating interview and and hopefully listeners will have a good think about it, you know, what and and what you spoke about in terms of ah grain at one level, but exports, trade and, and you know, how how that impacts globally and some of the global topics which we discussed today. So thanks very much for for really raising the bar of thinking today.
59:21.88
Zach
ah Absolute pleasure. Thanks for having me.