Farmland Partners(US:FPI)2021-08-05 21:18Financial Data and Key Metrics Changes - The company reported an AFFO of negative $0.02 year-to-date, an improvement from negative $0.03 for the same period last year [18][19] - Total indebtedness decreased by $6 million year-to-date, aligning with the company's intent to gradually reduce leverage [21] - The company has approximately $40 million of liquidity available for acquisitions and other purposes as of the end of the second quarter [21] Business Line Data and Key Metrics Changes - The company completed four acquisitions totaling nearly $30 million and sold 15 properties for $31 million, resulting in a gain of $3.5 million [20] - Lease renewals are expected to see increases in low crop rents ranging from 7% to 10%, with some as high as 20% [9][25] Market Data and Key Metrics Changes - Farmer profitability has significantly increased, returning to levels seen in 2012 and 2013, primarily driven by rising grain prices [8] - The Midwest region is experiencing the strongest rent increases, particularly in Illinois, where increases are running at 10% or better [27] Company Strategy and Development Direction - The company is focused on maintaining a diversified portfolio, targeting a mix of 70% row crops and 30% specialty crops [36] - The company is actively pursuing opportunities in the Southeast and Delta regions, while still growing its portfolio in the Midwest [37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's position, citing a strong agricultural economy and the potential for continued land value appreciation [10][11] - The company plans to expand its loan program, which has historically met farmers' needs, and aims to grow this business further [13][56] Other Important Information - The company has reopened its loan program after previously suspending it due to litigation concerns, indicating strong demand for such loans [56] - Management discussed ongoing litigation, noting that costs are expected to moderate in the coming quarters [41][42] Q&A Session Summary Question: Can you provide more detail on the leasing spreads and regional performance? - Management indicated that the 7% to 10% increase in rents is based on a conservative estimate, with the Midwest showing the strongest increases [25][26] Question: What does the acquisition pipeline look like? - The company has a pipeline of deals measured in the kind of $50 million plus, indicating a robust acquisition strategy [33] Question: How are drought conditions affecting your markets? - Management noted that row crop regions have experienced adequate rainfall, while specialty crops in California face challenges due to water costs [60][63] Question: What is the company's strategy regarding equity issuance? - Management emphasized the importance of balancing equity issuance with maintaining shareholder value, particularly as stock prices approach NAV [65][66]