Odd Lots - How Chinese Buying Is Causing a Boom in Agricultural Commodities

Episode Date: February 25, 2021

There are lots of hot areas in the market, which everybody knows. Stocks are obviously hot, as are industrial commodities like copper. Agricultural commodities are surging as well. If you look at a chart of corn or soy or even oats, they've been on a tear. One big factor: Chinese demand, in part driven by a desire to stock up on supplies. Meanwhile, China is launching agricultural futures of its own, including a new contract on hogs. On this episode, we speak about what's going on right now in agricultural commodities with Scott Irwin, an economist at the University of Illinois, who helps us break it all down.See omnystudio.com/listener for privacy information.

Thanks for listening to OddLots. Follow the show on Amazon Music for more future episodes or just ask Alexa play the podcast, OddLotts on Amazon Music. Hello and welcome to another episode of the Odd Lots podcast. I'm Tracy Alloway. And I'm Joe Wisenthal. So Joe, I know there's been a lot going on this year. You know, we obviously have a new U.S. president. We had the GameStop saga in markets. But I think we can all agree that the big news of 2021 has been that China's new live hog futures started trading. Yeah, I mean, that's obviously what I was going to say as well. I mean, that's how, you know, that's sort of the big thing that everyone is talking about so far this year. Yeah. Okay. So clearly we are joking. But I will say these new futures contracts were something like 20 years in the making. So they took a really long time to get here. One of the reasons that China is so interested in.

starting futures contracts for pork is because they've basically had their pig supply absolutely decimated in recent years by African swine fever. So the whole idea is that the futures contract will come in. It'll allow some standardization of pigs and it will allow farmers to hedge and things like that. And they'll be able to rebuild their pork supply. Standardization of pigs. I'm very intrigued by this. Yes. Okay, welcome to agricultural all thoughts. So we're going to be talking about the pig futures contract, but we're going to be talking about food price inflation more generally because, of course, we've seen pork prices in China absolutely a surge recently. It's starting to come down now. But globally, as you know, Joe, there's been a massive rise in food prices. Yeah. And I would say if I were to actually, from an eco standpoint, if I were to say what is the biggest story in 2020? or in the economy right now,

it would be all of the different bottlenecks price increases we're seeing at the producer side. We've talked about it with shipping, and we've talked about it with semiconductors. We've talked about it with Jeff Curry with industrial commodities. And, of course, we're also seeing it in agriculture commodities. If you look at the last year in the U.S.,

soy futures up from 900, I guess it's per futures contract, per bushel, 900 to 1400, corn is up by a lot, hogs are up by a lot, cattle is up by a lot. So there is almost, you know, all these different categories. We're seeing this upward price pressure issues relating to, of course, supply chain disruption, still doing with COVID. Massive recovery and demand around the world, particularly in China, but also where. And now as of the time that we're recording this, and I think we're going to talk about it, too, the extraordinary scenes that we're seeing out of Texas. and the freeze, which is really disrupting the economy of the entire central part of the United States.

Yeah, a perfect storm of factors coming together to increase food prices. Storm might not be the right phrase there. But it is, I mean, you are starting to see actual impacts of this. So here in Hong Kong, McDonald's isn't offering hash browns in its breakfast anymore. So, you know, things are very serious. More seriously, we've seen some countries starting to talk. about putting price caps on food prices. I think Russia is already doing it. The UAE was talking about doing it as well. So it is beginning to affect people's lives and it is causing problems

for some governments. So we're going to dive in to the whole issue of food price inflation as well as the new Dallion Hog Futures contract by popular request. We're going to be speaking to Scott Irwin. He's an agricultural economist at the University of Illinois. Scott, welcome to the show. Glad to be here. So, Scott, in addition to being an agricultural economist, you're also an actual farmer from Iowa. Is that correct? Well, I try technically speaking.

I don't actually get much tractor driving and physical participation, but it's an interesting situation. I, from the landlord's side of my family's farm out in Iowa, my 85-year-old mother and I provide the management and do all the marketing of the crops. So I live through the ups and downs of the grain markets like everybody else. Plus, I get to try to work the markets with my card playing 85-year-old mother. That sounds extremely satisfying and fun. You know, right now, you know, sort of mentioned this round. that we're seeing is pretty intense across various soft commodities, agriculture commodities.

What do you give us the sort of basic big picture of what's going on, what's driving this bid? China. Perfect. Is that as succinct as you? It's not the only factor, of course. But in the ag markets, that's the number one driving force. We've seen just a explosion in grain exports to China basically started about last July and has shown little signs of cooling off. Some of that related to their phase one trade agreement that was negotiated in the previous Trump administration.

some of it also related to rebuilding of their hog herd because of the African swine fever, and then some of it is also related to just their desire to rebuild some of their reserve stocks as well. But that's the number one fact. So one thing I always wondered about, you see these headlines that China is building up its grain reserves. And I don't know, I can kind of see why countries would do that. but I always wonder how useful those reserves are over the long term and how they actually use them. Can you give us a sort of like potted summary of what building up reserves actually means? Well, it's a classic example of something that sounds good in theory and rarely works well in practice.

We have many decades of experience with different kinds of reserve schemes here in the U.S. they've tried it in metals, grains, and all sorts of commodities, soft commodities over the years. So they're called buffer stock schemes. And the problem is, you know, the idea is, is you build it. You know, it's kind of the seven fat years and the seven lean years, a biblical example, put in practice. And so that all sounds good in theory, but it all becomes very political. And governments have a tendency to not want to release the buffer stocks when they really ought to, to maybe calm markets down because then farmers are mad because you're driving the price down.

And so it's just, it's a deeply political and it rarely works as well as it sounds in theory. So why do they do it and when do they do it? So if this is a scheme or if this idea of building up huge reserves is not even really particularly sound and doesn't work well in practice as maybe they think, why do they occasionally do this? Because I think, I was just looking at a chart. I think like in 2011, didn't they like buy a crazy amount of cotton sending the cotton prices soaring? What catalyzes them at one moment or another to say, okay, we're really just going to go out in the market and buy? fear. It's just driven. You'll see that those kinds of big buildups and reserves typically follow price spikes. Think of the U.S. Strategic Petroleum Reserve. When is there intense pressure

to build that up? It started in 06, 07,08 when crude oil prices were spiking. And that's the typical pattern. And, you know, the other thing is, is with China, they have huge stocks, which I'm not even sure that the Chinese government really knows the size of their stocks of basic commodities. We know that their statistics are way off. I mean, the USDA and other international organizations try to track these ingrains will occasionally just go through these massive revisions. Did you wake up and China has, you know, 100 million less tons of feed grains on hand than you thought they did yesterday based on the official statistics? So on top of, I think, the difficulty of making those work really well in practice,

in China you have the extra problem of trying to figure out what the real number is. So one thing I've always wondered, you know, when we talk about food prices being at a six-year high, do farmers actually benefit from that? Well, I think when you see something like that headline of food prices at a six-year high, we have to be really careful because that's reflecting various indices of the cost of what I call farm-level prices. So it's like the price of corn and soybeans in central Illinois that farmers here can sell their corn and soybeans for or hogs or anything at the farm level. There's a vast difference between that price and the price you pay in your local grocery store. And a rough rule of thumb is that about only 20% of

what you come home with from the grocery store that's food is represented by the farm level share of the cost. So you can have a six-year high in the raw price of most foods, and it doesn't budge the grocery or retail-level price all that much. Now, that's not strictly true for all commodities. Things like milk, meat, and eggs are most directly related to the price at the farm level because they're obviously very perishable and consumed close to the raw form. The more processing you have, the more that that distance from retail price or grocery store price to the farm price gets. I'm going to ask another very remedial question about commodity economics. And it's this, which is that when people talk about the existence of the futures market, and I quoted some soy futures and corn future prices in the intro, it's like, they're like, well, the farm.

farmer has to hedge their production because they don't know what the weather's going to be like and the buyer wants to hedge, et cetera, because they don't know this. And that's why the futures market exists and so on. Does the futures market actually work as such in practice, such that farmers who are out there on the land and some level or another use it to actually manage risk? Great question. That's the classic textbook example that everyone from the exchanges on used to motivate futures markets and why people hedge. And it actually isn't a very good picture of how those markets actually work. Most producers here in the U.S., even the most sophisticated ones, don't use the futures markets directly themselves very much. They do it indirectly through something called forward contracting with, say, their local grain elevator. But even then, they might, maybe at most, sell forward 15, 20, 25% of their production. So the vast majority of the trading volume on what we would call the commercial or hedging side is actually done by what I like to call grain merchants. These are the big and the small companies that are involved in the basic transformation of a commodity in time, form, and space. Those are the people that really use the futures markets. That's the core community.

So this is something that I actually wanted to ask you about, which is we have all these different futures contracts out there. So, you know, the CME famously had its physically delivered contract for live hogs, and then that got converted into cash settlement. What actually is, what actually is, you actually makes a successful futures contract? And how do you judge success? Well, you can look at it the way an economist looks at it, but the simplest way to look at it from exchange and traders at a futures exchange is simple, volume. That's their measure of success.

It's easy. Do people want to trade it? And are there rising in large volumes of contracts exchange? very simple objective function from their perspective. An economist looks at a little bit more broadly and asks, does the contract fulfill an important role in helping to discover prices for that commodity? And is it a good vehicle that a broad swath of people in that commodity sector can use to manage their risks? So those are the two economic functions that we look at as an economist, but an extremely,

change looks at it very simply. Folly. You know what I really like about this podcast is like ostensibly we're like, oh, what's going on in grains and food and everything? But I love that we just get to use this as a time to ask really basic questions that like we would probably never ask it any other form. Like, how does the futures market work and who actually trades it? Because I can't think of any other opportunity where I would like get to ask that question except this podcast.

So I just want to say it's one reason I really enjoyed doing it. So, Tracy, I know. It's really great. I was just like, when else would I get to do this? Like, if I said this on air or on TV, I would be laughed at, and I wouldn't have the time. Okay, so let's get to the big question, which is, why should we care about, say, the introduction of China's new live hog futures, which have been trading for just over a month that looks like? Well, there you get to the real basic question of, you know, what's the purpose in the largest sense? What's the value of commodity futures markets to an economy and to a society? And if it's doing its job right, it basically makes the marketing system more efficient.

In other words, producers will get higher prices and consider. consumers will pay lower prices. That margin between the farm price and the ultimate consumer price gets a little bit more efficient, a little more competitive and cost efficient. That's the core value of a futures market that's working well. Hello, I'm Michelle Hussein, and for more than 20 years, I was at the BBC. But all the time I was delivering the headlines, I wanted to go first. further than the news of the day, to spend more time with the people shaping our world. And that's what I'm doing here on this podcast, speaking to people from Nigel Farage.

Russia needs to be taught a lesson. To tech journalist Karaswisher. And the tech industry is running wild. You know, they've gotten what they wanted and they've seen a huge run-up in their stock prices. This will be a place where every weekend you can count on one essential conversation. to help make sense of the world. So please join me, listen and subscribe to the Michelle Hussein show from Bloomberg Weekend,

wherever you get your podcast. You certainly ask interesting questions. So one thing I wanted to ask you about is how the Dallion contract actually works. So I think the size is for 16 tons of pork, which is about, or 16 tons of pigs, I should say, which apparently is equal to one truck full of hogs. So again, like, this kind of gets to the standardization element,

but how are they actually taking delivery of actual hogs, and do you think it will help standardize China's pork market? Again, you know, I'm not an expert on that particular futures contract. But what I've read is it seems like the size is, comparable to what the CME lean hog contract is in terms of the number of hogs it represents, roughly a truckload is kind of a common size. So that makes sense. I think China's challenge will be is that their pork sector is far less industrialized than, say, here in the U.S. that they have millions upon millions of very, very small pork producers.

And they're not going to use a futures market. A futures market will be used by the very large industrialized pork operations to China, which are growing rapidly, but there's still a relatively small share of that country's total pork production. And you'll see slaughtering plants and, you know, what I'd like to call that, those middle operators or what I call merchants, those will in almost every futures market, tend to be the biggest users. And so that's the community I would look to to see if it's going to be successful. So I'm really fascinated by this point about the sort of the inconsistency of, or the,

I guess, diversity, the inconsistency of the domestic pork operations and how that fits into, I guess, a standardized futures contract, you buy a, you know, however many tons of hogs and you expect a certain like quality and consistency. But I guess that's, that must be an issue across all futures, always, whether it's corn or soy, you buy a certain amount, you expect a certain grade, a certain quality, and every ear of corn, I guess could theoretically be slightly different. how do commodity traders across the futures markets and sort of commercial buyers of them, how does that get worked out over time such that the deliveries of the actual goods become predictable and standard? And how does the futures contract itself, as Tracy alluded to in the intro, sort of accelerate that predictableness?

Right. Well, the first thing to remember is that the vast majority of, futures contracts are never fulfilled by physical delivery. Like in the grains, maybe one or two percent of all the contracts that are traded actually end up resulting in physical delivery. And that's by design. That doesn't mean there's something wrong with the contract because the futures market is, in simplest terms, designed to be a parallel market organization or vehicle where you can place side bets if you're a producer or a middle operator. And those side bets allow you to, in essence, manage your price risk. So you're over here in the futures markets, taking long and short positions to manage the price risk of whatever is your underlying cash position.

And what you really are interested in then is, do my cash prices and my futures prices go roughly in parallel so that if I'm long in the cash and I go short in the futures, then the price movements roughly offset one another. That's all you care about. You're not using it as a merchandising vehicle to actually get the physical commodity, but at the same time, why the terms of the contracts, the things you were talking about, are critical because if you're going to manage your risk over here in the cash market side with the futures contract, you need a futures contract that has terms and reflects the prices as closely as you can get

to what you're doing over here in the cash market. Got it. I wanted to widen out the conversation once again and talk more about agricultural prices generally. So we are seeing lots of talk about aglation. I guess my question is, what could be done at this moment in time, in your opinion, to bring food prices down? Well, I don't think that there's probably a lot that governments can do around the world because there aren't large excess stocks laying around in these kind of buffer stock schemes except maybe inside China. I'm not myself very concerned at this point about, I love the term you had agflation. We have seen large increases in prices, but let's just kind of wait.

Coming on the other side of this is going to be a monstrous supply response around the world and things like corn and soybeans and on the livestock. And you just got to give the system a little time. I mean, it's very important to remember. Standing around mid-August, we thought here in Illinois we were going to have in 2021 one of the worst years we've had for a long, long time on income. That wasn't very long ago. And then corn and soybean prices started shooting up. And we're going to see a big excrease in acreage. Farmers are going to pour the inputs in. And if we get any kind of decent weather here in the

U.S., we're going to have a big crop. And it looks like, you know, the first cut at the big high prices was in South America. And other than maybe some problems in Argentina, they look like they're going to have pretty good crops. So I don't see anything in this yet that really deeply concerns me about long-term eggflation. So is there a way to sort of anticipate how long the stocking cycle goes? So obviously we'll get this in hopefully we get a robust supply response to the demand. What about the demand side itself? Can economists, can you anticipate?

how much more China has left to buy before it will be satisfied with its attempt to sort of build up a buffer? Or is that inherently unpredictable due to how political it is? With China in particular, that is wildly hard to predict because you're purely predicting, you know, inside the Chinese Communist Party, what are going to be their political decisions on these key kinds of variables. and the data is just so poor, at least in the public domain, give you an idea of how hard this thing is to assess in China. I have some colleagues that work in hedge funds, and when the African swine fever started taking off, you know,

there's a huge hedge fund. They had no idea, so they started having regular calls with veterinarians. They could get a hold of inside China directly, and they just tried to build up a network and start talking to people. So it's very hard. You know, it's very volatile and uncertain situation when the world's largest consumer is this kind of opaque. There's one other big thing going on at the moment or that has the potential to actually happen and impact food prices and the farming community. And that's the new U.S. President Biden coming in presumably with some sort of new agricultural policy.

He definitely seems to have a focus on climate change, which would impact things like soy beans. How do you see that playing out? Well, I think that's going to be very interesting. And it's going to be layered on top of our ongoing what I call RFS wars here in the U.S. politically over the renewable fuels mandates that we already have here in the U.S. by law. So we have that that's ongoing. And then you have layered on top of that things like the California low carbon fuel standard. Some talk of that being expanded going forward. You have something called renewable diesel plants being built at a wild pace right now in responding to these policy incentives.

So this is definitely an area that I'm paying really close attention to. And I think has the potential to be probably the biggest demand game changer, both negatively and positively, for ag in the next few years. Can you actually explain that a little bit further? What could change policy-wise that's on the horizon making either ag demand go sharply higher or lower? Well, probably the first thing I'd come up is, you know, what's the Biden administration going to do with ethanol? Right. You know, I hear chatter that there's certainly, the ag groups are going to really be pushing, moving from a de facto 10% standard on gasoline to 15%. What a Biden administration for climate change reasons and domestic political reasons go along with that?

That could be huge. Secondly, what is the new Biden administration's position going to be in terms of how we implement our renewable fuel mandates? Under the Trump administration, who was very closely allied with the crude oil refiners, basically their entire strategy was to give it as big a haircut as possible, you know, reduce it. We're still kind of trying to find out where the Biden administration is going to fall on all of the Plus, we have a big case in front of the Supreme Court on the Renewable Field Standards, so there's a lot of moving pieces on that right now.

On April 4, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, The Killing of Bob Lee, beginning April 16. What separates good leaders from transformational ones? I'm Jessica Chen, and in season two of Leading By Example, we'll sit down with executives like Grace Chen of Bertie Gray to find out. It's important to understand where you spike, but also really acknowledge where you don't and find people who can fill those gaps.

Listen to leading by example, executives making an impact on the IHeart radio app, Apple Podcast, or wherever you get your podcast. So one of the few things I know about the farming community is that they seem to be, how do I put this? Like for the past few years, they seem to be, they seem to feel bad. What would it take to get, I guess, the sort of like happy days. sentiment back into the farming community in the U.S.? Oh, you know, there's always a lot of things that contribute to farmer's grumpiness having grown up and being kind of technically one myself. So that's a complicated question on a personal level.

But more seriously, high prices. That always takes care of it, doesn't it? Yeah, high prices. So, you know, I can give you some round numbers that would help here in Illinois. If you could assure Illinois farmers of $4 corn and $11 or $12 soybeans, there'd be a lot of smiles. And what are we at right now? We're actually above those levels right now in terms of the cash prices. They're looked, you know, quite a bit higher than that.

We're looking at over $5 corn and I just check, I think, right around $13 for beans. So farmers are very happy with those prices. right now. So the other thing that's going on, obviously, this sort of horrific Arctic blast that's really affecting the entire central part of the United States, actually a huge swath of the country, particularly brutal in Texas, all kinds of spillovers recording this February 17th, just an hour or two ago. I saw the Texas governor declaring no natural gas exports would be allowed from the state, so it's going to spillover into other states. I saw there were issues with getting feedstock to the ethanol plant.

due to the freeze. What are some of the implications that you're already seeing as a result of this? And how long could we be sort of dealing with the aftermath, even if it, you know, warms up in the next couple of days? I don't think that the natural gas-related disruptions that we've seen will last very long, simply because it's going to warm up. selection of week. It's just that's not going to last too long. Probably in an ag side, I would say there would be two main impacts that will have to be assessed to see how long lasting. First off, I mean, this was a absolutely brutally cold event that went right straight down the middle of the Great Plains. So what kind of losses are we looking at in cattle feed yards and literally death and freezing or cow calf operations and slow down in rates

of gain, things like that. Those are going to play out for a while. Hogs are almost entirely in confinement buildings so there's not going to be chickens the same way, not much. One that's really only now, I think, you know, the futures market's been thinking about it, but one of the ones that might have the longest lasting impacts is what did this do to the winter wheat production here in the U.S.? You know, normally it's extremely hardy crop. It's like a friend of mine says, you know, you can kill the wheat crop seven times a year with bad weather.

But this was a length of low temperatures that was extraordinarily long, even by Great Plains standards. And, you know, a dormant wheat is supposed to be very hardy. You know, it's literally dormant, but it can still be killed if the temperatures are low enough, long enough. And so there's a lot of debate about that. That's the one I would really be looking for long run is to see, you know, how much what they call winter kill did we really get with the U.S. Winter Week crop. I think that was fantastic.

I learned a lot from that. Well, hopefully not too wordy. Professors tend to do that, I know. No, it's perfect. Thanks so much, Scott. All right. Take care, Scott. Joe, I love talking about commodities.

I think I secretly always wanted to be a commodities reporter, and I never really got the chance. Do you know, oh, Tracy, I meant to tell you, speaking of being a reporter, remember a while back on one of our episodes, you said if you were starting as a journalist, now you'd be a semiconductor reporter? Oh, yeah. Someone DM me the other day and said they heard that, and they were inspired, and they wanted to. wanted to get into, they heard you say that, and they were going to start writing about semiconductors. So you may have launched someone's career. Yeah.

I respond to a whole generation of semiconductor reporters. That's great. Let's chill out. At least one. Maybe one. All right. But commodities. So here, the thing I like about commodities, I think is it brings a lot of these sort of market ideas and market structure.

theories to life, right? Because you're talking about an actual product, and you can think about holding, well, maybe not a live pig in your hand, but you could think about holding corn or soybeans in your hand, and you can actually connect that to the way the futures market works and to the way markets generally functioned. Tracy, you're going to take delivery of a live pig, right? I can see that. I can see that.

Yeah, I know you would. No, I'm not, but I totally would, actually, if I had a place to, uh, to put it, but you see what I mean, right? Like this physical aspect of the commodities market. Totally. And I actually thought that was a really interesting point, he said, about the goal of a commodities market is not about taking delivery of the physical commodity itself via the end commercial buyer of the future,

but about having a contract running parallel to the cash market such that the fluctuations should be in the same direction. So you could get a delivery of pigs and maybe they're a little bit inconsistent, but as long as sort of directionally the cost of the actual cash pigs, I guess, and the pig futures are moving in the same way, then the futures market serves its purpose for the participants, which I thought was interesting. But then, of course, you know, you could see how over time the desire to,

I guess, I guess you would arb the cash, What is, what is, our, the cash future spread would encourage participants to start delivering pigs or any other commodity that are, you know, in line with the, the specs, the specification. So you could see how it serves that purpose. I was just thinking it'd be funny if you saw live hog prices or lean hog prices go negative and suddenly everyone had to take delivery of a bunch of pigs. Yeah, it would be hilarious. It would be amusing, like with oil. The other thing I liked is I finally got to ask the question about whether the hedging farmer is a myth. Because I've always sort of suspected that farmers don't really hedge like they do in the textbooks.

And I'm glad he confirmed that. But that was great. That was great. I actually could have listened to him for a lot longer. Well, we'll have him back on for sure the next time we have a big agricultural development. We'll start our all thoughts farming spin off. I like when you're asking what would make farmers happy and he's just like a higher price. That was good.

Well, look, I feel entitled to ask that question because actually my granddad in Texas was a cattle farmer. And they tend to be, I mean, Scott's use of the word grumpy was correct as far as I could tell. They tend to be a pretty pessimistic bunch. And of course, we've seen them complain a lot over the years. So I'm genuinely curious, like, what do they want to see? There's always a drought, right? There's always a drought. Right.

There's always consolidation and probably the large industrial ag factory firms are probably always sort of making life miserable and somewhere another for the small farmer. There's probably, and we could have gone into this, but I have to imagine, and maybe we could even do another episode, concentration, particularly when it comes to, and I remember this was an issue this past summer and spring, with the coronavirus, but sort of the concentrated buying power of the slaughterhouses as a form of leverage over the farmer, essentially. So if you don't have, you know, if you have sort of this monopsony buyer of your wares, of your, you know, your cows, then that's an issue. So I think in addition to higher, low prices, there's all kinds of structural things that probably upset the sort of the day-to-day farmer. Okay, look, well, episode one of All Thoughts Farming series will be why are farmers so grumpy. I'm into it. This has been another episode of the All Thoughts podcast.

I'm Tracy Allo. You can follow me on Twitter at Tracy Allaway. And I am Jill Wisenthall. You can follow me on Twitter at the stalwart. Follow our guest, Scott Irwin on Twitter. He's at Scott Irwin, U.I. Follow our producer, Laura Carlson. She's at Laura M. Carlson.

Follow the Bloomberg head of podcast, Francesca Levy, at Francesca Today. And check out all of our podcasts at Bloomberg under the handle at podcasts. Thanks for listening. A lot of short daily news podcasts focus on just one story. But right now, you probably need more. On Up First from NPR, we bring you three of the world's top headlines every day in under 15 minutes. Because no one's story can capture all that's happening. in this big, crazy world of ours on any given morning.

Listen now to the Up First podcast from NPR. What separates good leaders from transformational ones? I'm Jessica Chen, and in season two of Leading By Example, we'll sit down with executives like Grace Chen of Bertie Gray to find out. It's important to understand where you spike, but also really acknowledge where you don't and find people who can fill those gaps. Listen to leading by example executives making an impact on the IHeart radio app, Apple Podcast, or wherever you get your podcasts.