On Thursday, January 29 the CRMER group had the opportunity to meet with Lee Borck one of the giants within the livestock industry. Lee is the Chairman and founder of Innovative Livestock Services, a company that has grown into a diversified and well structured corporation. We sat down with Lee and listened to his insight on risk management and how he began working in the livestock industry.
As the evening began Lee spoke about his experience working as a credit agent and how he became involved with Ward Feeders marking his first partnership. One of the things he emphasized about the success of his endeavors was the quality of people he surrounded himself with, not completely due to any special gift he had. He emphasized the importance of how having highly skilled, intelligent, and driven partners allowed him to grow and expand ILS into industries as foreign to him as organic pet food. Time and time again during our conversation he stressed the importance of human capital and how having partners can bring in fresh perspectives to a company.
Over the period of two hours the group received an informal audience with him allowing us the opportunity to interact and ask questions. After Thursday night its easy see that Lee is much more than meets the eyes. The humility and sincerity that Lee conveyed truly showed his character and had everyone engaged in the conversation. Throughout the evening he took time to answer any and all questions that we had for him, ranging from current environmental projects, such as the phosphorus reduction machine that refines cattle waste into a uniform fertilizer source; to his opinion of how the recent change in daily trading limits for Feeder cattle and Live cattle contracts impacts the industry as whole.
Lee also gave the group a first person account of how he put together the Beef Marketing Group and developed a new and innovative relationship with the meat processing companies. Ward Feeders along with 9 other feedlots formed the BMG to use their collective bargaining strength to increase the selling price of their cattle. Traditionally, large feeder operations in western Kansas were able to market their larger cattle numbers and get an additional 25 cents per hundred weights. This left small feeders like Ward Feeders out in the rain, in a manner of speaking. Lee saw an opportunity to change the entire structure of the Kansas beef market and he did, but he didn’t stop there. He brokered a system for forward contracting his cattle allowing him to focus on one of the true plagues in the cattle industry. RISK! The cattle industry was notorious for its boom and bust cycles throughout the 80s and 90s creating and destroying countless fortunes. Lee took his ability to contract his customers’ cattle and combined that with the futures markets and implemented a strict hedging program minimizing his risk. Today risk management has become a cornerstone of Lee’s operation.
The evening concluded with Lee stressing the importance of Kansas State University and the role that it has played in his life. He explained his motives for giving back to the university as an alumni and spoke to us about the importance of family. His love for K-State and his love for helping others was evident in the way that he spoke about family. It’s not often in this world that a man as successful as Lee, someone who has literally built a company from the ground up, believes that the greatest achievements in his life have been a direct result of giving back to others.