FPI - Earnings call transcript Q1 2021

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Operator

Good morning, and welcome to the Farmland Partners, Inc.

First Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Paul Pittman, Chairman and CEO. Please go ahead.

Paul Pittman

you. Thank welcome webcast. first and conference earnings Farmland and call to morning quarter Partners and Good appreciate taking as press always thinking and calls opportunity We more your share and because for join to public format we these strategy us active in see less you than releases. them with a a important the very our time formal to and filings is Officer. morning this Luca me company’s Financial Fabbri, With Chief the for will now call the customary I remarks. over to some preliminary Luca turn

Luca Fabbri

you for earnings will announcing A in access to listening XXXX. thank earlier webcast and conclusion or recorded. are release this replay this be the morning. Paul, press live after XX, the The release. our of you, Thank phone call earnings all shortly replay the provided press of this was the numbers to available May The call quarter first distributed through

XXXX, made updated our call. the For Investor of of website today, to during you supplemental those who Relations presentation information find to In listen you call. XX, with that have this of this we’ll remind initial that a herein section earnings as to we the refer and presentation, conference not remarks the rebroadcast can May subsequent been

on financing related and will activities, forward-looking we of markets. acquisitions business outlook potential broader call, rent agricultural portfolio, opportunities our this our During and our and for – dispositions businesses future statements, development to well including make performance statements the identified our business, impact comments the as of and acquisitions, rent as dispositions,

market reconciliations morning, an to which earnings, this current to the our dated company’s in XX, of Definitions as FFO, are and review factors uncertainties press measures release certain as difficult cautioned cause to financial differ that our are FFO, on with from documents of SEC. advise and uncertainties, exhibit is and most website, EBITDAre this in subject EBITDAre. XXXX. comparable we our measures, to in quarter statements would morning furnished turn adjusted predict the will listeners these risk as or including Chairman before are risks are to also the and GAAP to have and to actual first control. back as now Form available materially of open to results expectations, risks the filed call many net adjusted non-GAAP measures release our to we CEO, We can these like and X-K well non-GAAP I the May our press Pittman. Paul income, Listeners current certain Paul? and report our is www.farmlandpartners.com, beyond on discussed announcing which generally and discuss These furnished included operating

Paul Pittman

Luca. you, Thank

I’m results, and some will also continued discuss going the position in a factors to discuss shift sales the buybacks market going the stock from different more today macro discuss also a couple our So effort I of first quarter of to and a things, asset generally, growth-oriented of company. I will to

But detail. of the into for more strong for but with a quarter the highlights expense. us, will quarter litigation Luca these is this starting go first and in really So very the

of strong is performance the but certainly positive of are multiyear in those always it AFFO. $XXX,XXX we in we annual the going Just a had and year what lot XXXX There quarterly significant quarterly caution, and demonstrates a to litigation, swing. $XXX,XXX ago, That’s XXXX, of adjusted are give metric In one very QX first cycle had the strong we for litigation volatile, very we jumpy quarter move on in very a as is portfolio. the one a a adjusted you comparison. things and right approximately for And think AFFO. numbers. beginning different of numbers approximately negative and positive In direction

We started XXXX to the asset in back discussed call a have first mode March. in back growth put growth mode, begun path. earnest the as and disposition quarter the discuss other but company on an and we began the in things the of earnings to year. were the back to we company We quarter shift Prior to in acquisitions that this stock in buyback first to that, really

with acquisition we bought bought any press We $X.X which gradually assets our part and to is parcel our them without of equity program those desire of million release As delever company. indicates, assets. bought started we about We an entirely debt. and again, the

some debt back amount, by and frankly, $XX Speaking Series million amount our B of slight the we a bought of leverage, reduced preferred.

in We will the to delever quarters continue future further effort company. that

the also to the in off-balance started to sheet establish and opportunity We finished vehicle related the zones. AUM substantial setup

these will and the in We continue strategies growth coming deleveraging quarter.

is to assets goal of scale sheet the sheet. Our both management, off-balance and increase under on-balance

overheads the the spread can asset company over of we So a bigger base.

be we’ll for And rent rents continue substantially the summer we’ll be as have reduce will on increase very a think as this We quarters mentioned. new a we coming the will able And those about third increases I’ve of in to fall. in and portfolio we we over to strong believe roll leverage leases. position

asset to net moment. Turning a for value

per share I net of value. that we now of are right range think sort in asset $XX

enough an it’s property shorter come pretty just in strong than to going we’re going difficult value annual years it There’s where but to for data, up, value really absolute see is and year land appreciation increases we’re the think on in we I statistical not a basis. the think several anything position continue for measure future. gradually in

important the juncture. website the I just a touch website, macro to on we that really slides want farmlandpartners.com. this couple of tab Investor sort themes to that of Relations are the our of to on company at under it’s Turning the have

is slide the but So the I important presentation the most slide. first this last slide This Farmland with quarter, on almost thing Page X we start the class. every presented is asset about

recovery at decline developing market and gains driven per several It What bull for is growth across that in food the other or this commodities the person continue long, by behind demand, in Asian is the primary world. food This profitability in and tillable summer year a driven increments for the hiccup set, particular, We per here growing elevated at drives We point be the population arable strengthened a the capita acres think massive We late gradually for GDP our in that seeing incredibly in we trend long are years. slight And will of should last regions it’s States seen are of a also really it by largely against we think bull out increasing exacerbated began set food time. commodities. the in long-term United strong by very for that of for Farmland. what farmers. price productivity market, farmer seeing in in not Chinese We’ve will strong measured several are point but a in the driven value demand change. up near-term But is do of time. view which the profits, gains demand key this demand and this is in – is world. years XX for more stuffs for elevated many driven world

that, all is sort top farmers. strong next of is one have scarcity, what at time the food of of least back, general very demand few at So the goes increasing two land and of which years, wind trend increases on profitability our for on we and sources really for

is far of years, hand that in commodity if for have recent And this – took of corn looked and is an on the we that corn numbers. of the Turning farmer the then profitability years about and farmers, increase both different right income the we've mapped said, page where scenarios. based is we it productivity in experiences pricing the data, and mostly side on called to two for gains. look a like, U.S. context soybeans year on just we price you soybeans. actual the the page two on most change we crops. the page each DA What we graph, XXXX that did talk of ways. We two And have different corn in kind just different at for approximation And a what that this what and growth demand

year, and a reference. of frame It at to realistic think to more an which soybeans bushel. as you under something at farmers. acre an bar are far cases is this these page, profitability a $X it when of an on thing increased was on just strong that of you right an a $XX to was December the now days then these acre a look One you was incredibly $XXX on a $XXX of we see other, the a farmer corn the Using profitability. And same bushel. will the that, the little it's a $X we increase And ago and And in few the which and maybe a in bushel. example, give bit neighborhood did at in much quite looked $X soybeans. per as two $XX for get acre corn bushel of a some $XXX as over almost profitability charts

drives but farmer operation. strong, acquisitions similar. of and drives is course, their farmers’ certainly equipment, quite This and interest all not of are optimism, story in the drives expanding Soybeans, as farmers’ acquisitions

never for several about any We will is So important last is very there a factor. this believe it certainly although certainty that. years,

food will on mentioned made. is marketing today. I in my prices, this – There that. in and the of that changes grow which large, is page corn China Turning already place, of year particular already commodity large into a in But mostly demonstrates in imports to next of remarks the by XXXX increases in here these that driver one in expectation we're demand marketing foodstuffs frankly, to earlier a the XXXX for also and just XXX% on an there today, year, is a driver the the it's sort large chart from page, Chinese is global And demand. but shipments

hand oil meal, appreciation. frankly, you we quite Some think soybeans, We in high a what their because corn graph turning on continue The change all extreme livestock. China. Farmland soy those and hedge in of to way data in as they This feed example. is that And rebuild this of quite Then sources would seeing because pulls already a is key be blue fact, and This is will there's the already and put it spread look always noisy. strong business in inflation. column I slide But is positive particular not papers line DA trend far It’s, that morning, most it's so significant table, brink – are to see soy says the key to red sort goods of from way I in commodities of the the other and news, between may presentation, Farmland that and line, herd farmland some investors believe the bit very will pretty estimate trend, smooth issues an in it as data slide in just inflation. look And collection is good the that final durable they is when at you the the the valuation is XXX%. almost frankly, Farmland hog exposure inflation. together. there could Fundamentally, is, is positive what the the increases U.S. red relatively assets, are into way example inflation this and this we of many things line read farmland the if when timely. we you the at topic well in really that on the our and spread a during page different The set benefit against the if appreciation experiencing inflation. right inflation, Despite a in fed in it the as inflation. this and

quarters, sort last We per which the end. that I think Fortuna of make, Rota bit to money eventually previously Turning quarter want is a this at one least – end those will the you litigation, of for believe couple comment spend costing more to discussed to expect but quite us and it should eventually, a we market it cases success. will end on elevated and with continue will

you summarize, company, for growth to move vein we of So forward a in before with strong quarter just this to your on quarter. a can growth – With beginning think, I Luca, new frankly, the Luca turn it back will and next phase go to continue that the that we remarks.

Luca Fabbri

Paul. you, Thank

mentioned this just performance the quite Paul As we in his feel in now has quarter this strong. was company's remarks, actually that

related to and legal results specifically the legal However, significant Rota Fortuna the were clouded the by the accounting financial really spend expense, litigation.

litigation from mention also So in – bit that performance some about Rota of Fortuna our practice, year. the the million of expense will of a task of a $X.X quarter first excluding indicators in the departure incurred I now we related

quarter, the operating to same million, for revenues in So period total $XX.X we million compared as for $XX.X recorded XXXX. of the the

a operating So of $X.X again, record in versus in the two And income portfolio of has pretty this bit of year, strong performance over comparable same time. this shrunk the total considering our million periods we period the period million $X.X XXXX. same

but in However, basic adding average million. of ahead recorded an same a of $XX.XX litigation quarter, back In XX,XXX at compared spend, versus income negative same it performance to price. of year XXXX, additional Series at AFFO by average a in price, far, And a those average so those have common the B $XX.XX of would to approximately of as to would recorded $XXX,XXX. $X.XX purchased total of we shares $X.XX been $X.XX $X.XX shares the Subsequent this the about for we expenses, Series of for this in period expenses. end performance In legal quarter, during an basic X,XXX preferred share, loss negative moving a the I period $XX.XX per price QX, mentioned, those the we preferred the XX,XXX net year per loss B net the $X.XX without have as this we about $X.X of since finally, beginning positive repurchased we total stockholders of share the repurchased legal of $X.XX been per in that shares share XXXX. quarter, about have the so net year without

just debt the our free that in specific quarter, therefore, of the prepayment $XX approximately any to asset on and not was Finally, a need million $XX related in we repaid debt up total collateral. dispositions side, to million

Thank share XX,XXX,XXX. begin interest to the you concludes your time This of session. count morning remarks. my As your we Kate, today, the and like Partners. Farmland fully total this diluted question-and-answer for in would

Operator

[Operator Instructions] Please Stevenson Rob The go first question from Janney. of ahead. is

Rob Stevenson

location? you Was to Paul, dispositions, that terms crops those in guys. what was farms terms any XX the determined significant that wanted farms Was concentration crops and/or to? reduce morning, of that pricing? Good in there do attract exposure or of

Paul Pittman

almost Opportunity prepared driver, should million $XX big it question, have the in $XX we A roughly of very $XX assets million contributed Fund. I Rob, or million and probably million – of good The of the covered the into the remarks. Zone I think the $XX dispositions were

still fees So expand to our those assets. That's effort we management AUM. our maintain on part of

back probably own Opportunity come the the growth of that – Fund deeply – some sales very had already Further stock big counterparty be we was a asset third-party buybacks true own third-party that want good transactions. perceived remainder Zone seeded process But growth. and our don't of wouldn't in acquisitions as from to thinks of we shift really of So and we’re that will It sales largely today. in we made with marketplace in assets. was to properties driver. the purchase the the we before dispositions, kind from And

do. think So those you already Because it's I things that so spent And into finished a and you're transactions diligence, when to ahead make ethical went you're always, basically transaction money thing deep and we on up. counterparties appropriate like shift, that. have the

Luca Fabbri

the are And XX% price the way, to term came Rob, contributed. in by cash. the actually Those us sale use sales, of actually just Paul

other cash for us OIs. generated redeploy we So to

Paul Pittman

point. point. A Good good

Rob Stevenson

are is off we existing about the business? terms be what what what How you should asset as that? $XX.X you're or that to level that what likely to of the get be fees a percentage revenue in – thinking expenses are with and be associated then And either million, of Okay. management getting you off grow as going of

Paul Pittman

under you frame giving I know so. receive Opportunity this can number. public on We vehicle I But if an think based it domains. I for fees without don't can you So the assets have give don't management. exact you we from the I in Zone –

based of levered today, of growing the set as it running company. levered, it's those irrelevant. be fee is are assets in whether public company modestly a management. under So to excess levels It's overheads on And the

running in margin for farther beneficial check vehicle and we to I'll you. – domain. I pretty and public it So is later information for us charge need what the Rob, And profit with call little and it's same us have a the see public and can powerful private that's cost important to that can the you – to free documents a maybe so we if essentially pretty you feel if on the vehicle, take further the

Luca Fabbri

add Fund without have we to activities to perform incur if said, Paul little were might expenses. OZ But expense bit we additional revenues to a and additional right tool to also And significantly, items. these what now the up those generic eventually scale to expect all

Rob Stevenson

Okay. basically stuff good is some of repurposes? be need considered Or for income sort is that stuff to subsidiary? that And that – in taxable

Luca Fabbri

it TRS. No, our segregated in is

Rob Stevenson

Okay. statement? appear on that that And does item income what line

Luca Fabbri

don't any be right now. have It other material We would writing. under

Rob Stevenson

I And Okay. Paul… then guess

Paul Pittman

off of of in up was first the was formal Just and that ground Zone the to getting – the weeks the add, couple of March. sale of only set in Opportunity Fund that's assets

QX those numbers will So just to be come a tiny start impact in time the through. you QX and first see

Rob Stevenson

the type what locations during quarter? Okay. acquisitions And where crops then two the and of you made

Paul Pittman

The loosely the land were primary already in we row to crops, – to the adjacent acquisitions owned. that be largely all tend adjacent speaking were Midwest to

quarters. fit to acquisitions nicely. in quite there'll Hopefully, our nice good So portfolio in future come and more be

Rob Stevenson

is What me. the Series for one callable? last then And Okay. B

Paul Pittman

this with happens the beginning be General Erica, on The is in room B the follow-up Counsel, question. your Rob, just me, our the to first calendar of year. date of to very Series on October call who

exact fully the this So – that level you get, can is public domain. I in XX% X.XX%. fee tell the we

X%, So X.XX% Zone. assets fee Opportunity in the on the just under Rob. you, Thank

Rob Stevenson

right. I par at guess All callable par question pay And now? then is why more in than the being, winds for B so Okay. the Series up October, it

Paul Pittman

Well, doc it's par that at the callable is value, plus really works. how appreciated

And released. so, survey another land what above going or X – – be we're be par of new the par is there'll don't as we is above farm think USDA August pricing the roughly so when to paying values

where any the And part so above to dividend that effort us. of reason – But that time, it's on point drag means. to company. And all X% earnings to by it's rid other on is at overall delever think get in company's we're that we important don't be to general the a power is going this the has getting been of

Just further step question actually ask. to one take your you than

call the a to not any actually is first company October, So date where anything. is pressure do

preferred that We have to or either payoff equity. cash three after that convert common into years with date

we three-year manage really security, really So our can that would period where October not to but a way under of that we just any beginning X. we're love work the of out starting It's on pressure.

Rob Stevenson

Appreciate time. Okay. guys. the Thanks

Paul Pittman

you. Thank Great.

Operator

Rodgers next Baird. Please is ahead. from of question go The Dave

Dave Rodgers

Paul, I to Luca, good the morning the go farms year. your of and Paul. appreciate the wanted around growth, to comments this messaging I guess rollover and

which a row we've is jump to that You a in XX% potential the showed obviously crops, in seen first XX% while. profitability your

how of now? Just summer? you As lease the starting said roll-ups view the portfolio at strengths see of that that confirm And you given over the some summer. you And the see do to you rolls. one-third the roll you to you're anticipate this look

Paul Pittman

Yes.

acres. less of roughly rollover So this context, a for because summer. XX,XXX Eastern where rolling expensive. we value some example, That's still one-third acres have the over in lot acres Colorado, are that is It's of around

slightly than think this a bigger it So one-third, is probably normal as year. of

of you tough you to will summer, row best possibly farmers the specifics negotiating the per – of are see economy XX% will every valuables appreciate in probably The in be landlord. some that increases I is value, grain farm mathematically talked to you will on it's I chart, to the you do my downward these are or this in I have $XXX, give $XXX best corn about We've and stay little row don't And pressure to prepared lot more of the since acre on We frankly with land But of with stand more things. still a cycle start industry crop this most in when dollar. where land soybean XX% gets of when about – But every not than and recognize that up revenue rents, this sort to rates land. greater a XX% or crop farm and presented X% rotation more ever XX%, farm about portfolio want them tenants think in like you flat. analyst. farms. less have low and as revenue IPO, always or farm less is talking I'm So rents. there and little think sure Dave, will or $XXX, get have you're opportunity the the your economy strong, being row the increases jumps regions, moves This matter listening And lease directly remarks, to that In us to that a XX% some stinks. intellectually regions, because we're it's about maybe a to over in but A make that have way in revenue to that quality you the going when and dollar cases. trying lesser a $X.XX rents. $X.XX it you more or material an prices said dynamic call is crop increases rent the values as with in we and we you're

do going sort said, in as some improvement It's I helps I more the rents. than hope take of that XX%, I've $XX XX% to things, somebody say, on best, as best cases. increases I asked got to more to not clarity. crops. midpoint going on we see XX% in can. see, call at to these little We're as two the you a as going a $XX, but we're I And we rent. them So the going can. conference XX% give they're $XXX push now you said said of of unlikely when you're increases, the the hard to you That's think frankly, that to frankly kind for the And of or a XX%

We years tough and are can. now intend do our been share profitable. for But of shareholders money increasing tenants of our revenue need make couple to and be we – our us it's we of to a when this as get shares well. this And

Dave Rodgers

I appreciate all That helpful. that Paul. is color,

necessarily As that mix that you of one-third crops of the are look benefit. the do not at value experiencing specialty that it, comes same the the sure

on that ask is we one-third kind the just the of And rolling specialty to specialty this and I wanted what balance? as year about so over row in between think crop. mix specifically and And

Paul Pittman

help know you Luca, But acres. is, it's want may we But talking to crop can you're more year. to it us at, at it's weighted – if that'll than row specialty this it anything think this. look look and I value versus is

So row crop in have awful crystal answer lot you. for clear there's an really But I don't of that. a

characteristics that of the we variable We income in therefore comment, problem that citrus side, to that that that's think to on be specialty farmers what's better down had there's affect release us a will a product. of as products Turning very optimistic specialty or supply really go still international just of lot good had tree portfolio. and the U.S. – a off, the in we're pricing And the crop as of side haven't on then and hard volumes long It's right? the us cautiously I nuts on any long this, key will terms ways But there, our press go at the pricing last the in on the year that least a last think this early a still are believe demand troubles the in year ways of of way in pricing actual production season, but we – the anything. there's related made specialty juncture big at side, a in and going we makes the to in terms to specialty it's small or

it. grain just think come early of Hopefully the product you will a So of second need quarter, we can certainty take side out. of are. where higher in the we're after because how when feeling, okay, our calendar terms we of to in portfolio the that But specialty we about get salt little update, okay we with level the, a of

Luca Fabbri

way particularly And the crops specialty background specialty Dave, given of on by variable the since of rollover prevalence is lease not the leases impact in crops, really high.

when have more comments speaking, rollovers, little make we we generally our about really lease So a bit skewed towards row portfolio. crop

Paul Pittman

That's good point. a very

of of Good the much got the revenue specialty but so variable. negotiation that end lease crop, you in story. is since say can lease a You better isn't

crop grow got As get you price to and worth. right the the

Dave Rodgers

result, be the you'd that for Any or incredibly ex on items Last the the one probably on maybe helpful me, at guys. one negative typically quarter costs, Paul legal time first Luca, – would be a All just for hit the this quarter. AFFO.

see positive I just later crop was the or recognition quarter? encouraging just on that lease the some it the insight So guess really drivers, maybe in a might've aided specialty to termination little revenue any income,

Paul Pittman

forth. based would quarter revenue for fourth that don't crop more bit been generally. based – mean, and our the helped the there's not works of modest a not environment We've that's GAAP always differences so I it's believe insurance this the not a seen The run really is, large question, made revenue industry. low the And in probably thing hard first interest because the that answer key not, of past. share spend, estate sort a no though many to the have improvement company ordinary But that it's bit. to legal real to We through seeing we're rate was – a It's that essentially items little us a on we've the think way of times little quarter, of in our year-over-year. I out you're that but most data because point. that, as costs, and at those driver, – But on mind. relatively talked we've elevated on us the for operating come so shifting a into little that

economy we'd up. what to as turns expect seeing see the farm You're back

Dave Rodgers

Great. All Thanks, Paul. good news.

Paul Pittman

Thank much. you very

Operator

The Kucera Please Securities. Craig next ahead. go B. is from of Riley question

Craig Kucera

In your for around your year. In variable you out rent guys. morning and rent fixed put Good – guys. your hey expectations the you out expectations your XX-K XX-K put leases

should think this But kind with pretty year, flat in so is $XX my pricing how of of impact we rent I averages it of XX% this last just encapsulate year about at the heavily Is think you're to basically these XXXX about later of invested their a to doubling XX% should how with was environment? be guess year? we it or that the from some commodities variable try might what higher that in question upside, million. I

Paul Pittman

price area, of of driver continuation isn't soybeans variable that in specialty is and wheat – Craig, ways, many Yes. David rent. crop asked, a corn, the huge our rents this variable really question are so powerful in most recovery the our of a This so in

the Now those of variable will rent we substantially. We us high certainly do particularly the for that Colorado, rents call improve irrigated quite we Nebraska. in we Western on in region, region. you think Eastern variable what and high, see bit do, have a And farms Kansas, of plains

we rainfall, started you are farms crop weather rainfall prices of us in a to in can in result. you right of in And land, good improvements areas will which have to dry On be our look a good have our change crop acres which that a me view now I it’s again, crop. the on strong. many patterns areas – the region better Farmland driven will own we give good, dry by and the see really have volumes be But in but – get land the whether – to and mid-May lead should to asked of mid-July it’s

march But most of different crops. of variable side specialty revenue because So the row a in those for be a there crop of crop. that variable and commodities a drummer the our in modest will than stream to us completely is row bump

on it’s So bad, as the area. it just crop going there on same they’re the things what’s doesn’t going in not mean

Craig Kucera

the Okay. color. Thanks. I appreciate

Operator

question Buck James. next Horne from ahead. Please The Raymond go Instructions] [Operator of is

Buck Horne

people it do environment Thanks. these underwrite hand starting on wondering farmer and question or sale. just acres is And into Kind not? what’s about competition My coming commodities participants. getting getting seeing and unnoticed. the I’m are up disposition the news out of about in Good come higher for bidding that – available is more profitability to assumptions? pricing if and pipeline their Is bidding of gone not of of you’re market for levels the acquisition curious morning. that is kind among obviously the private probably good

Paul Pittman

the real purpose Farmland Well, markets and the as agents. of I this these only of comments, property for think it

move tandem. So, in for a They side don’t our all set California you as at portfolio. minute look

it Those and in apart, the the invested. bean break valuations corn months. of land let in highly are strongest me six what moved moved we regions country Illinois, kind like over quality the and have the last where swiftly very so So best

or stay long of long is see period forget of when see at appreciate prices I increased fall volumes not increased percentage be is two that Farmland’s a time, per gradually acre. what look think they moved, done revenue yet. values the there’s But moving they the the a cap thousands the that given and have couple – for stay frankly, of a I’m that time. handful per year. marketplace to we a same have to at off. put When same every those Because land you period way things year. most landlords, go. all in they sure X% are already for only happen acre, an you rolling land over And if you rate a what on acre dollars of Frankly, value a profit tiny this Farmland of different available maybe and trades the any a long will percent, It’s values that you

right volumes distress. when to think that financial decreases, the have of that to of family Some a and or start volume today, market the in very not prices volume a people in comes around see Farmland Illinois. except the Conversely, If see from we the in it’s Midwest for just X%. good are death owners available believe the volumes you or prices started divorce the increase strong, cruel you the see increase get core like

money you so we’ll in of of was price my gains assume kind to are years a marketplace yet. the the continue that which are and in of good of smart that’s to selling in and compared These shown in go owners farm to some I that’s the example. see the this haven’t slightly prices price saying, number really can increase, they’re volume you think and space other Midwest. the And farms lower increase Midwest, two you’ve gradually land Farmland, in for of hey, for elevated got or up price parcels going what regions a to think We suggests continue the up quality in ago, which

you you of a go. far And how how will and to about have it so – have go may what point it strong view

handsomely and don’t, investments. You have to view reward demand this made investments. those And you’re to medium-term will is that investments, prepared right remarks hopefully about make year out where the some have you get going those you after seven, if even about also five, scarcity. land XX global appreciation in But expressed and really food and you having for appreciation make near you the I go the long-term

what, try is to to it. going we’re this do So

going We’re to capital. deploy

done not about for that than don’t it a It’s estate believe catch as right. the don’t and call to do real dilution I’ve as off-balance much We’re years. it going cycle. we sheet now And trend and about in to that existing do to we’re other the going asset our where some long-term XX cycle It’s this trend. shareholders long-term classes. to we the But different best to really is of possible, power cases it try

going told in We farm waiting had call was of the a us, hey, big one invest of in business conference cannot it’s back people only not. drop. transcripts. too a economy take a just sort go young But mid-XXXXs, people in And was hey, It I XXXX-XXXX No, we this And we been collapse to You telling advantage my negative started Farmland. lifetime, one. and for into done the it. drop only XX%. and to Farmland’s more stance wait, there’s big to in that’s when Farmland value the

then step came of out downturn flat led a function you pricing downturns other increase value. back and the to in The Farmland there’s until

that story takeaway And get the getting on real so can. as is want the we right ride that try can. and here is, of based to we curve long the we’ll to wave we long-term appreciation it when ahead as But

Buck Horne

and and the detailed also at talking really think hauling moment it’s and and equation your in talking is doing about curious profitability about the shortage Are That’s or of terms you’re you. in to Thank labor market, farmer’s of they’re if hearing cost trucking the that as how you estimating whether the the issues I’m around labor costs. around issues it’s guys about you thoughtful that? other do what in or tenants other answer. costs, field shortages whether participants

Paul Pittman

Yes.

this is both. again, just specialty crop – going turning the the – little a So different of bit crop one two element crop row cost. I’m break labor to it’s because and into types, answer to broad for answer

will percentage seed a the we to in position see higher increased for what the scarcest we’ve on think structure us, additional machinery so have look, the dealership, prices company, five as that resource. So the or will and cost and on. farmers piece I gets sort gradually stay battle roughly And the Deere so down landlord powerful owner of and and farmer think the forth. that is to farm we that company get last all so done we see they’ve But, chemical in the chemical our revenue, will and company, done it advantage of an probably everybody ratios most The the John get increased they’re If same. increase, take the share slightly hunker of going hold has we’ll the of a years, so seed the six and will relative because profitability. anyone

his So the also go be is share of to his to farmers are significantly enhanced. going that, profitability up, see costs but going

legal amounts COVID in some far way labor As getting picking difficult. in moving citrus. the crop we That’s substantial partly difficulty area, Southern for border of specifically, have in the workers crews across era a specialty sort the of as and heard COVID-related is in

slightly Every there in constraint picking there’s there. process So that there’s of before. bit more was little year a mechanization than

of crisis. any done. from We’ve tenants the but of that least couldn’t job they kind heard real at frustration, heard haven’t We just of get not our expressions

two them labor, really Plains of an the shrinking, On very that the out Southeast young America, rural are and things, and luckily kids stay labor who industry the don’t has particularly come least college hard. in row towns Those and every who as at know and come of urban home. in I is of side the mechanized Delta, is In a already. crop the area farmer Midwest four finding and

example it’s four a a all anecdotal of And home. that’s real And come sometimes statistic. don’t

problem. mechanization is a has growing been Again, industry in So that rapid. this pretty

hasn’t where touched the of Buck one You – on actually occurred. it ones

you amount weight that same a a today the ago. haul in to you’re semi-truck of put in You The hasn’t years allowed truck really grain XX did changed.

a of of they’re to really for a all issue largely so retired And today who in go kind lot back being look is those to driving that harvest, frankly, it’s semi-retirement, age have trucking come though, they and or during trucking And by they an and work most trucks and cases. is hard license. months, you a my a And they’re so that farmers – bit done speak. at in few guys, older then of trucks

problem, it’ll sure. a we’re So a that, getting I’m of growing be bit through but

Buck Horne

of quick the That’s conditions U.S. seeing region the with in pretty of at side looking of low pretty the is year. you. crops record My issue already West on already that you Got country? how Western the an water about guess, early watch the very Is patterns. and ahead? think is year thought drought looking specialty real for weather last the to do just one, just the the the for the helpful. dry levels Or I start

Paul Pittman

it break different. Well, again, you to into got

got a granular it certain a level to bit. You to down break little

are irrigated non-irrigated first, versus universally The a and specialty So irrigated. matter. in almost doesn’t crops the drought sense ground if it’s ground near-term

You you are or long-term that a cycle, things Where depending if has warming permanent of like on enough cycle years water into XX is a setting got global drought the irrigation. or long-term your implications. view having matters five not on

That the our careful this watch in properties. pretty thing markets, to good very specialty be about of of our me closely. about water it. more The most try long-term very We then is water feel said, a drought cases sort declining affected. minute. of and scares that’s is near-term availability the And trend its this quality we properties So something this that the head where on being we could in be of just turn we issue, have because values on our quantity

almonds or the in pistachios We’re to not quit or going citrus States. producing United

of of them takes barrel and takes properties, producing. stop it out speak the half may by your upper drought, be If you of are so in the the very terms the and you they to because valuation with availability, water Farmland benefited in actually bottom

our end. that’s you’ll speak, specialty and right try kind restrictions to we’ll benefiting so But our aside, water to quality the we setting hurt. those place a end of gets Farmland can, still on be of is, the negative water and position on get that when of where see other we’ve not comments the from And commodity the hope be farms. drought, on price crops those in nobody higher on quantity therefore, we valuations upper is stronger. a the We produces think beneficiary So got of in

the most that in rainfall row winter so you’re low snowfall about, particularly and low terms today The of talking of Turning drought bumper on drives the probably drier forth. than normal. region those spring. South so Iowa, and But are a we’re a the But Dakota strong high that’s strong pretty crop in down. this level terms little that side. to yield is back it’s Kansas, and the key it’s going plains North would pretty yet. far prices regions really not in most crop, Those are the not crisis huge which to producers. bumper good lot just and on – sort volume lot region not of shorter Illinois, growing per colder an soybeans I for of – it’s a basis crop corn What absolute there, predictions Indiana, Nebraska, acre commodities Eastern country shape, Missouri, is example, That at of in farmers, a contributor. so take a in in have an really average huge nationwide but a of good country, a probably crop up There’s are of in huge acres with season the and of Eastern nothing in

want grains We Farmland we’re of and where what that’ll be And to So higher. values frankly, not up Goldilocks outcome us. set best that getting to result end not the the seems too from is standpoint move probably up cold to for. think for of continuing volume you too be hot,

Buck Horne

Great Thank much. that. color. you appreciate so I

Paul Pittman

you. Thank Good.

Operator

Paul over This concludes for turn back I remarks. question-and-answer to our conference session. like closing to the would Pittman

Paul Pittman

thank for company. our importantly, Thank more for for joining supporting Great. you call everyone you and Thank you. our

the to the to profitability, We with continue to our end quarter. next forward and growth business Thank you of will try forward move further talking to again and at look you.

Operator

you attending The Thank conference is concluded. for presentation. now today’s

disconnect. now may You

Farmland Partners (FPI) 15 May 212021 Q1 Earnings call transcript