Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| We believe that we will have pretty strong crops out in those markets this year |
| Very consistent and predictable rents and rent growth |
| And so we've had three years of very strong rent increases |
| Obviously, good opportunities, as you look at the world crops going forward here |
| Philosophically, we as an institution believe that increasing scale is well rewarded over time, both in higher rents and in the first quarter, for example, will come -- we'll have been a farmer joining something we already have |
| I think we'll see in 2024 on the specialty crops, slightly better yields and price than we have had in recent years |
| For the full year ended December 31, 2023, net income was up over 160% to $31.7 million and net income per share available to common stockholders increased to $0.55, largely due to gains on disposition of assets, as Luca mentioned a minute ago |
| We will continue to purchase assets whenever we see the good strong opportunities which always come up |
| Those regions are very strong grain producers |
| It also lowers our property operating expenses |
| So, we try to be reasonably realistic in our assumptions, but we -- there is always the potential for some better than or worse than expected returns |
| We think they will continue to appreciate rapidly as farmland becomes ever more scarce, and they are very, very easy to operate, particularly in the Midwest, very low property operating costs, very low overheads to manage those properties |
| Gain on disposition was up significantly compared to 2022, demonstrating the appreciation of farmland sales values over net book value |
| It's really good color |
| We will continue to lower the overheads of the company, and we will -- we believe we will see late in this year a gradual reduction in our interest cost, substantial amount of our debt is variable, and that will hopefully start to flow through and give us wind at our backs in terms of our AFFO per share |
| So we are highly attractive to those regions and we'll continue to invest there |
| Some of the places have very, very strong water, have surface water rights, groundwater rights that make the farms highly productive |
| So the first point is we continue to be significantly undervalued comparing ourselves to the underlying asset value of the portfolio |
| So while it's down a little bit, farmers are still doing pretty well, but maybe not as well |
| We try as hard as we can to negotiate that down and we've got – we certainly do what we can to bring competitive lenders to bear to make sure we're getting good execution |
| Direct operations again that's crop sales plus crop insurance less cost of goods sold is up slightly due to higher expected performance in citrus farms under direct operations |
| We've got a good dynamic with all the lenders, MetLife included and we engage with them early and often |
| We are now in the second year of reasonably strong rainfall on the West Coast of the United States particularly in California |
| Again could surprise us to the upside could surprise us to the downside, but we're I think being prudently conservative there |
| That will help the water situation and that will help the yield situation |
| We will further reduce overhead expenses |
| Thank you everybody and have a great day |
| It's a unique climate environment |
| We appreciate your interest in our company |
| We started to push rent increases very strongly now three years ago |
| Statement |
|---|
| Travel was down significantly in the past year |
| Farmers are -- look, outlook for profitability is down a little bit |
| And the reasons for that are number one water; number two, we do think there is significant over planting of many of those commodities going on across the world, which leads to a tough pricing |
| And that's going to be a little more negative due to lower grain prices than it has been in the past couple of years |
| Although continues to be price pressure due to over planting of many of those commodities across the world |
| But the focus of those asset sales were to unload properties that we think had significant water challenges |
| AFFO was down $8.1 million and AFFO per weighted average share was down to $0.16, largely due to elevated interest expense and lower revenue in the non-fixed payment categories, as we will review in a couple of minutes |
| And so it makes it challenging to do acquisitions |
| Second, in the fourth quarter of 2023, after reviewing the portfolio, as we do every year, we decided to take $2 million impairment on one farm in California, due to our estimate of a decrease in value |
| That's down from approximately 24% at the end of the third quarter and down from approximately 32% at the end of the second quarter |
| So think of that as starting about halfway across Nebraska, water starts to become a challenge |
| I suppose Paul was mentioning is because the they were water challenged, they had some uncertainties about long-term appreciation potential or because there were about crops that in regions where, frankly, we did not believe that there was a significant potential for recovery, like, for example, Blueberries in Michigan |
| First, as we covered on last quarter's call, there was a sale transaction that closed in early Q4 of 2023 that resulted in a $3.8 million loss |
| Land values across the country have continued to go up in the green producing regions of the country, the growth rate slowed some in 2023 |
| So, projected outlook for that sort of citrus farm is a little bit lower |
| It will slow the appreciation of farmland values |
| It will make rent increases more difficult to get, but not impossible |
| Q4, 2023 was down compared to 2022 largely due to Almonds |
| The challenge is that, despite the fact that I am a huge believer in the appreciation story of agriculture is frankly as a personal matter, made me wealthy over the last 20 or 30 years |
| There's plenty of opportunity but our cost of capital makes it difficult |
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