Q4 2021 Farmland Partners Inc Earnings Call
Base of rapidly increasing demand.
Frankly for all the users of the primary grains oil prices are back up that leads to significant ethanol demand.
Theres ever increasing amount of acreage producing soy for biodiesel in the United States and then of course.
Food and feed demand continues to grow over time.
And the additional tailwind.
Farmland as an asset class is inflation, we certainly have seen inflation my own biases that we will continue to see inflation for a period of time at least probably the rest of this year if not longer I think it's a little hard to tame once it gets started.
That has historically been a big big driver of farmland values farmland is an excellent hedge against inflation.
And I think we're going to continue to be a beneficiary of that so I'm going to turn it over to Luca to make some additional and slightly more detailed comments and then I'll come back during the Q&A and probe any questions people have a little bit more.
Deeply Luca you want to take over and talk a little bit about specific operational performance in some regions and the portfolio generally.
Yes, so David are three ideas and they would like to cover with my comments first and foremost I would like to build on pulse point of equivalent operating performance in our portfolio specifically.
Specifically with focus on California permanent crops, while our agriculture was not.
Impacted nearly as much as any as most other industries throughout the Covid pandemic in 2020, there were some specific crops to win indeed affected by the pandemic.
For example, the.
The bar trade had dramatically lower demand for citrus lane months in particular, and we saw that impact in our financials also in 2020, there were some trade disruptions that affected our returns.
We've seen a strong recovery in those crops in 2021 or 2020.
And as reflected in both variable rents as well as the.
Gross margin in the directly operated farms in our portfolio.
The second point I would like to address is our acquisition and disposition activity.
During 2021, we made 12 acquisitions totally eight totaling $81 2 million and 20 dispositions totaled $73 million across the board. So this is a very very modest increasing our portfolio size.
But specifically I would like to point out that of the $73 million in dispositions 20.
Section brokerage and other activities.
When we consider the total amount of revenue less cost of goods sold we want to point out that the lower risk parts of the business the fixed payment and that one large $6 5 million dollar contract represent approximately 85% to 95% of total for years 2020 in 2021.
Again, approximately 85% to 95% of your 2000 22021 are comprised of fixed payment and one large low risk variable rent contract.
2021 was a little bit lower than 2020 on that percentage basis, as we had greater variable payments and other items.
The chart below the table show the values of these different categories for 2021 and 2020.
You can see the fixed payments variable payments direct operations gross profit and other items again, the total on the right hand column is revenue less cost of goods sold two.
<unk> 2021 was $50 2 million compared to $47 3 million for 2020.
On the next page page 15, we telescope down into the fixed payments and variable payments, creating a variance bridge from 2020 to 2021.
For fixed payment details, we separated out the performance at the same row crop firms from other items, such as acquisitions dispositions permanent crops and farms that were non comparable between the periods.
Same row crop farms for row crop farms in the portfolio before January one 2020.
We view same row crop farms as the best way to remove the noise from the various activities that are grouped into the other category here.
And as you can see performance was up $200000 in 2020 to 2021.
It should be noted that many of the 2020 renewals that impacted this comparison between years were negotiated during the height of the COVID-19 pandemic and before the recovery of the farm economy.
Fixed payments associated associated with acquisitions dispositions and other items was down $2 $7 million.
In variable payment details begin created a bridge from 2020 to 2021.
Tree nuts improved by $2 4 million citrus improved by 900000.
<unk> declined by 100 and.
And all other crops, which includes corn soybeans and wheat were up $600000.
On the next page page 16, we provide an outlook for 2022.
The table starts with the same category as described on page 14.
Fixed payments variable payments direct operations gross profit and other.
We note that fixed payments from same row crop farms.
Yeah.
Excuse me will increase by about $1 million driven by rent increases that we talked about on this call and prior earnings calls.
Three citrus farms converted from third party contracts to direct operations in the second half of 2021 thus.
Thus for those citrus farms 2022 has a shift toward direct operations and away from fixed payments and variable payments.
Other includes auction and brokerage business from our colleagues at Murray wives Associates, an acquisition completed in Q4 2021.
The expense categories are based on assumptions included at the bottom of the page.
This results in <unk> in the $9, one to $11 $7 million range compared to <unk> 4 million in 2021.
<unk> per share would be in the range of 19 to 25.
Compared to <unk> for 2021.
We are assuming that the litigation concludes in 2022 with litigation spend in the range of $2 $4 million to $3 million.
<unk> adjusted for the midpoint of that litigation spend would be in the range of 11, eight to $14 4 million compared to $8 6 million in 2021.
<unk> per share adjusted for litigation would be in the 25% to 31% range compared to <unk> 24 for 2021.
We will update this analysis through the year as necessary and communicate the results to you.
This wraps up my comments for this morning, I will turn the call back to Paul for concluding remarks.
Thank you James just before we go to Q&A I wanted to amplify a couple of things that James said and I didn't do this in my earlier comments because it's easier.
For everyone on the phone to grasp the importance of this after James had spoken.
So we went back to publishing a supplemental and putting out guidance as we have.
Turning the corner and gone back to a growth strategy.
This will help investors.
Substantially in understanding the company and understanding the outlook when.
When you go look at the full year of 2022 outlook on the revenue side I want to amplify where the risks lie so analysts and others understand them.
As James explained our fixed payments is a relatively.
Low risk line item on our revenues and about $6 5 million of the variable payments are quite secure because there is so much coverage as it relates to that rental payment so around 85% of our revenue.
Is relatively low volatility, we still have collection risks and things like any landlord would have.
But we should be relatively close on that 85% of our revenue.
The risk to the revenue projection really comes in our crop share variable rent sections, that's mostly west coast specialty crops.
And then it also shows up in our direct operations, which is mostly west coast citrus.
The.
Issues, there that make it difficult to predict or I jokingly say it but its true. These crops are grown outdoors, we are at risk to the weather on those variable rents and on those direct operations. We will continue to update the market as we go through the year on how those.
Performance of those various.
Farms are.
Is going but again I want to emphasize that's around 15% of our revenue stream, where there is going to be some level of volatility.
As you look at the various crops.
<unk> is probably 25% of the total risk in variable exposure in the citrus harvest as those of you who.
Understand California, Citrus may know that harvest is starting right now it's actually started right around the turn of the year continues into the early summer.
And for the main part of it and so we will be able in the earnings call that occurs at the end of the first quarter to give some level of update on the volume of citrus and whether weather.
He has treated us well on those crops. The second element of course of the volatility comes from price and we'll have to wait until later in the summer to see what the pricing is on those on the citrus tree nuts tend to be harvested more late summer and early fall harvest period. So we'll have to.
Wait until later in the year to see to see the outcome there.
So.
I think we're in a very good position going forward for the year, but I just wanted to amplify and give a couple of cautionary notes on how to think about the risks embedded in those in the 2022 outlook.
Operator with that we're going to open it for questions.
Absolutely.
We will now begin the Q&A session. If you would like to ask a question. Please press star followed by one Touchtone keypad.
Anything you would like a question. Please press star followed by Keith again to ask a question press Star one.
As a reminder, if you are using a speakerphone. Please amendment to pick up your handset before.
Asking a question.
We'll pause briefly to allow questions to queue.
The first question is from the line of Rob Stevenson with Janney.
<unk>.
Good morning, guys.
If the lawsuit against Sabre tooth now over their lawyers put out a relief.
It was dismissed whats the status from year end there.
Now that that lawsuit is not over.
What they put out was it was it was quote unquote dismissed at the lowest level of state Court in Texas on a jurisdictional related ruling we are of course are appealing that ruling.
You never can tell.
It's a surprise to us.
Lower level judge dismissed at all because after Clinton Mathews.
Statement last summer, which basically admitted.
The article was largely if not entirely false and that he had been paid to write it by sabre point to believe that that dismissal will stand you would have to believe that the judicial system of America is endorsing stock manipulation and stock fraud.
But it's a court system will have to see what happens, but we are certainly appealing it and continuing to pursue them.
Okay, and then along those lines is there any.
Wrote points, along the way here for the <unk>.
Suits against the company is there anything coming up that we need to be aware of and is that still.
<unk>.
Sort of a first half thing or is that going to be throughout the year you guys think at this point.
Yes.
As James indicated what we have projected is that the lawsuits both of them will be concluded sometime in the second or third quarter of this year, probably late second or early third if I wanted to narrow the range a little bit the basic status of the.
Of the two there's all these derivative cases that I won't talk about it but of the two main cases the status is in a class action against the company.
We are at the summary judgment step, which means for the non lawyers on the phone that we have asked the judge to rule that there is no claim as a matter of law against the company.
Those those claims relate to.
Today only relate to the quote unquote loan program and there is the discovery process made it clear that there is essentially no evidence to suggest that we intended to defraud the market that we made loans to related parties that the auditors didn't fully endorsed and understand what we were doing theres just no evidence.
And we're hopeful that it will be dismissed on the basis of summary judgment, but again as I said, a moment ago, you can't guarantee that but we certainly are hopeful.
So that's what we're just waiting on.
For that.
For the wheels to turn and it will probably take several months to get to the final conclusion of that.
Assuming we win summary judgment that would end that that case unless of course, the other side appealed.
But we hopefully would think they wouldnt.
We continue frankly in the face of a.
And then ongoing department of Justice investigation, now into what happened to us and other companies by the shortened historic crowd, including.
Quintin Mathews.
It has clearly been brought up in that situation.
And the fact that there are quinton Mathews has admitted the falsity of that argument, we frankly have begged the class action lawyers and plaintiffs on the other side to drop their case against us, but it's not about lots about greed. So.
There we go on the case against Sabre point.
On the case against Sabre point, we're appealing the dismissal. We continue we will intend to continue to pursue there.
Bad actions against the company for financial recovery.
Because we absolutely believe we're right.
And as I said, there is an ongoing Doj investigation into those matters now.
It's finally, not just us who.
Recognize that paying an author to write an article that you on a company who have already shorted.
Particularly when you know that article was false when you're right it.
Shouldnt be legal.
That's the status of the two cases.
And then James I missed you.
You said, how much of the four 1% to $4 seven legal and accounting guidance is the ongoing litigation.
Yes.
Down at the bottom of that page, we give a little range.
$2 $4 million to $3 million is when we've got projected in there okay.
Perfect and then.
Look at our Paul what was the cap rate or yield on the stuff that you bought and sold in the fourth quarter.
And how much of that pricing changing throughout the year on.
Relative to what it would have been at the beginning of 2021 or even back in 2020.
So so cap rates cap rates as land values continue to increase cap rates are compressing somewhat but rents are also increasing rapidly so and the market generally.
<unk> were already pretty low on the best agriculture assets, and they're probably holding reasonably consistent in the fourth quarter. One that we did two major transactions that make up the bulk of the fourth quarters.
Sales and purchases and they were both in the Delta.
We were able to sell one farm in the Delta frankly at a higher price.
<unk> then the farm, we bought and the farm, we bought we get higher rents on than the one we sold.
So it was an absolute win.
We won on the asset value side, and we won on the.
On the revenue side and rent side.
Hard to do and we're happy we did it but we were managing frankly between somewhat motivated seller and frankly motivated buyer who wanted this specific asset that we already own.
When you get when you when you. This is about managing the portfolio I don't want to say, it's purely luck because we do try to get those things done, but there is an element of being in the right place at the right time there but.
But we've been able to sell assets at very low cap rates and buy assets at higher cap rates.
Which is the secret sauce of how we make money for investors and we hope to continue doing that.
I guess in that same vein.
<unk> looked at 2022 here, how would you thinking about pursuing on balance sheet acquisitions with cap rates.
Having compressed and more people being involved in this space relative to your cost of capital.
Do you pursue stuff with JV partners do you put stuff more acquired more stuff into the fund.
Is there still stuff out there that makes sense to buy until the cost of capital, especially the equity comes down a bit how are you guys thinking about that from a balance sheet and a financing standpoint relative to the acquisitions to where theres a big price in the market.
Yes.
We're obviously very hopeful on growing the company during 2022 year.
Certainly we will look at all sorts of kind of off balance sheet joint venture other ways to raise private capital to deploy and be paid for the management management of that capital and of course, the payments for that management flow back to our common shareholders in the form of revenue.
So we will certainly try to do that in terms of the inside the existing asset base of farmland partners today.
We will certainly continue to do transactions, but we are highly sensitive to not just creating scale, but creating value. We believe our today our stock is trading somewhat below net asset value.
We're sensitive to that.
We will from time to time raise capital for projects. We are particularly excited about in terms of our long term return and financial rewards, but we're pretty cautious about.
Scale for scale sake, we really want value to drive us and so we're probably more focused on off balance sheet basis until we see some substantial stock price recovery.
But hopefully hopefully we're in a position during the year that we're comfortable.
To grow grow the company and sort of all of its facets, both managing others capital as well as growing inside the asset base inside the public company.
Okay, and then Paul one last one for me you talked a bit about citrus.
And knowing about weather et cetera.
How much of your citrus crops have been hit by Greening and what's the outlook there given the difficulty in managing that these days.
We luckily have a citrus portfolio that is almost entirely in California, we have one very small citrus farm in Florida and it has affected negatively affected as is everybody's farms citrus farms in Florida by Greening.
In particular, they even even that farm, which is called grassy Island. If you want to look in the data about our farms and you can see it on the website.
That contains a particular Israeli variety called <unk>.
And the <unk> are I don't want to say immune to but somewhat more resistant to greening that other varieties.
That had been traditionally grown so were.
It's not a great situation on the Florida asset, but it's okay in California, California as a state the department of Agriculture, and the state of California is very strong and very proactive and may to date have largely kept citrus greening out of the state.
Vector there is a small insect basically.
Nat sized insect.
That moves the moves.
The disease around and literally in southern California, If you got that diseases identified in your backyard.
Citrus tree the tree is destroyed the tree is taken away and and probably burnt or something else in a way that eradicate the disease.
And they are very very aggressive about keeping it out of the commercial citrus.
Those of you who drive back and forth between.
Reno in the San Francisco Bay area. For example, you stop at that that AG inspection station and Thats really to make sure you're not bringing in citrus from from Florida.
In particular in the California, where it can get into the commercial production that effort to keep keep it out.
It's never perfect, but it's incredibly well done all things considered so you just haven't seen greening in our crops because they are growing in California, yet and we certainly hope you won't so.
So far we are not very effective at all.
Okay. Thanks, guys I appreciate the time.
Great.
Thank you.
The next question is from the line of Dave Rodgers with Baird. You May proceed.
Yes, good morning out there and Paul Thanks to you and the team for an excellent improvement in disclosures. This quarter wanted to follow up on the acquisition pipeline you talked about competition in the corn belt and kind of where prices were but can you talk about the overall pipeline of acquisitions, you are tracking today and whether that competition.
All those you around the country outside of the corn belt.
Yes, so I mean, we have a very very strong pipeline today like I said, we are sensitive to not just.
Growing for growth's sake, but I mean, we have several hundred million dollars of transactions that we are tracking.
The <unk> acquisition is.
Even broadened our net of capturing transaction opportunities as I've said on these phone calls in the past the primary source of our transactions today as our tenants.
The tenants are in the local markets. They like us. They know we have capital they bring us really good ideas and we frankly diligence them and sometimes we are buying sometimes we don't so we have a very robust pipeline as far as competition goes.
We are unique among institutional investors in the space with just a couple of exceptions.
In that we will buy much smaller farms, particularly in the core of the Midwest the southeast and the delta than other institutional managers, we believe that that's the right way to do it.
And the reason we believe that so strongly is that we want to own. Many many properties of different sizes. So if we ever needed to liquidate properties. It's not just liquidating two other big institutional holders of $1 billion, plus private or public vehicles, because if the market goes.
That will then get sour, it's likely to be bad for all of those institutional managers at the same time. So we really try to avoid doing what I call elephant hunting, we own some huge assets, but we also own a great deal of assets that would still be able to be purchased by success.
Full family farmers and individual investors, who want to put money into farmland. So we don't see much other institutional investment for that 500, or 1000 acre farm of which we're happy to buy if its a good farm with good tenant base.
We do see competition from farmers on those assets and so we usually.
Farmer really wants it they beat us at the auction every time.
Frankly should be.
And so but.
But we're able to just.
Broaden the universe of farms, we will consider in terms of other institutions.
We are more focused on the core of the Midwest.
Than virtually any other institutional manager.
Hartley is my personal history in the private company I had before we went public but a year like this shows that long term total return, including appreciation is stronger in the Midwest than frankly, any other region in the country.
And that means you have to be willing to take a somewhat lower cap rate, but the tenant.
The total yield the total productivity is so strong there that long term total return is very very strong there most.
Of our institutional competitors don't participate nearly as.
As aggressively in the Midwest as we do the.
The competition, we face in the Midwest is actually from the smartest private family offices.
The the really high.
Ultra Ultra high net worth folks have historically bought those those farms because of the security of the long term ease of management and the long term total return they compete in that market and then historically the longest term manager institutional Mahindra in farmland into the Mormon Church as I've said.
And they are always strong in the Midwest as well.
So we feel good about our pipeline.
And hopefully we will have.
Plenty of capital available to.
To pursue that.
Yes.
Maybe one follow up question for you or for Jean Paul on the 22 lease roll I think you said it kind of comparable to what you saw in 'twenty. One maybe you can dive a little bit deeper on that and then.
Follow up to that maybe for Jamie when we look at the 2020 number growing on a same store basis, obviously fairly anemic and you explained why in your comment what does that look like on a like for like basis into 'twenty two adjusting for the arms that will be put into the direct operation I guess, what I'm asking for is what are the true comp for same store.
<unk> revenue look like for 2022, thank you.
Yes, So let me let me just start with that and then James I'm going to turn it over to you if you want to.
I'm trying to do a little math to help Dave while I'm talking.
So first <unk>.
James alluded to this in his prepared comments, but I want to reinforce Dave's. Since you asked the question. We have historically presented the same store sales number looking at kind of everything we owned for two full years.
Simple rule of what was in the same store sales bucket.
It dawned on us.
I regret that it took seven years I'll blame that on myself, but what was happening is we were what investors really want to know is what's happening in the fixed rents, where we drive those rents up or down based on negotiations with our tenants and what our same store sales number was reporting was largely weather.
We are getting swamped that same store sales numbers getting swamped by what was going on on the west coast specialty crops. Because they are big dollar amounts. If you have a good drop versus a bad crop. So what we're trying to do here is to say, let's focus on.
Reporting to the market, what's going on with fixed rent, which is largely a row crop measure or it's a fixed cash rep and is it going up when we renegotiate or down on a year over year basis and remember this is all gap. So on a cash basis. Our rents are almost always going up because we have cost of living adjustment.
In those rents, but the way GAAP reports of course through straight lining lose that effect.
But the 'twenty and I'll, just reemphasize, what James said in 'twenty, one we did not get the benefit of renegotiating leases higher because the lease renegotiation cycle is largely late summer.
And so in the late summer of 2020 hard to hard to believe but that was I mean, it seems like a long time ago, but that was the sort of depths of the COVID-19 crisis.
And the farm economy hadn't really started to recover so we have a we can in that negotiation and therefore eked out not particularly good rent increases in the summer of 2020.
In the summer of 2021, we as we disclosed pushed approximately 10, 5% increases on those rents and that will flow into the 2022 revenue cycle and then as I said, we'll do it again in 2022, which will which will up the revenue cycle for 2023.
James you want to go a little deeper if you can.
On the rest of Dave's question.
Yes sure.
We anticipate that the same row crop fixed payments.
That kind of.
Metric that the policy, describing qualitatively will be up $1 million in 2022.
And the 2022 increases that will take place in that sort of late summer fall timeframe will really impact the following year 2023.
And as I said, Dave I would expect that we're at at or above that number for the 2023 year as based on the increases we hope to get in 2022.
Okay. Thank you.
Okay.
Thank you.
The next question is from the line Buck Horne Raymond James You May proceed.
Hey, Thanks, guys. Good morning, just wanted to clarify a couple of things in the guidance if I could within the revenue guide for 2022 is there any new net.
M&A activity on the acquisition or disposition side that is embedded in the guidance for this year.
No we did not and James feel free to add on to this but we did not project capital raises debt equity capital raises debt issuances acquisitions or dispositions, we will update as we do those things through the year what.
What we wanted to do here was to present fact, frankly a baseline.
And then move.
<unk> moved from there as events idiosyncratic events like those things occur during the year.
James anything you want to add to that answer.
No no.
Yeah.
Got it got it that's helpful. Thanks, I appreciate that.
And then also just going back to the guidance maybe help me understand the kind of the variance that's happening from year to year in the general administrative but just the G&A number from from what it was last year or two the projected this year.
I know there's moving parts.
I don't know if there is.
Different line items.
Okay.
Yeah, I'll hit the I'll hit the big points.
So.
So first.
Second litigation aside on the cost structure side.
And our guidance litigation is the risky line the rest of this is reasonably.
Predictable and easier to understand turning to general and administrative specifically the increase year over year from 'twenty one to 'twenty. Two is driven by really kind of three relatively significant impacts.
The first is we have added some level of senior staff in the company as we went back to a growth oriented company.
James joined US Luca became president so one additional.
High quality, but not inexpensive staff member. We've also added some other people in the public relations area.
So on and so forth. So we've added some staff in the core business of Spi.
We are still small we were.
<unk> thousand 14 employees and that were 15% or 16, but it's.
The asset base, we have efficiently manage but we added some staff.
Number two the Murray wise acquisition.
Did add and that's of course, where it flows through our P&L now we believe that will be a overall profit contributor to the company.
And a growing profit contributor, but just the base.
Farm management and real estate brokerage business. They have added some staff and added obviously costs, but will also add revenue in excess of those costs and then the third thing is as we've made some some increases in the size of our board.
Under various ESG initiatives as well as the rounding out the talent level of the board and in that.
That always incrementally adds a little bit of additional additional costs, but those are the big the big movers in the G&A line got it got it.
Very very helpful color I appreciate that.
But all for me thanks, guys.
Okay.
Thank you.
The next question is from the line of Craig.
B Riley Securities you May proceed.
Yeah, Hey, good morning, guys. I also wanted to circle back to the guidance specifically as it relates to the other.
Income Slash revenue line item is that just revenue coming off of your expectations for Mary wise or are you expecting to rollout a little bit more on the loan program in 2022.
James I'm going to flip that question over to you because I don't honestly know the specific answer give us give as much color as you're comfortable with.
Yes, sure, it's mostly from the auction brokerage activities.
So, it's really kind of marry wise activities and.
Throughout the year there is from time to time, a little bit of miscellaneous revenue that would show up in that line too, but we don't have any projected in that regard.
Got it and I think the rest of mine were answered. Thank you.
Yes.
Alright, Thank you Greg.
Thank you.
The next question is from the line of Bryan Watson.
<unk> investment advisors you May proceed.
Hey, Paul I think you've actually covered everything but let me ask you. One question you mentioned that the.
The Doj has the Doj notified if it's investigating third point.
Yes.
No. We haven't we haven't been notified nor would we expect to be.
Specifically notified.
We largely know the same things you are all seeing in the newspapers.
We didn't we didn't sort of publicize this on our website or anything but there was several weeks ago. There was a relatively long Bloomberg article a few weeks after that there was a wall Street Journal article on it and then in the last few days there's been a.
A significant Reuters article that talks about potential Rico charges.
You'd have to go back and read those articles that you want to look for them.
C whose named Ware.
But but.
What happened to US is always as discussed in most of those articles and we know what happened to us and others as is.
Part of that.
At least related to that investigation as you would expect the doj's.
Appropriately.
Wyatt about these things.
As they're going through their process.
From our perspective, it's been a long long time, but we're certainly happy and optimistic.
We feel like we've sort of been vindicated already I don't know.
What more there's not a lot more that can be said.
Beyond what went in Mathews already admitted but it sure would be nice.
To see sort of the final step in the in the justice process occur.
Again to the people who did this.
It destroyed an immense amount of value.
For shareholders in our company and we are.
We still believe and continue to stand up for what we think is right here.
Even at a certain cost.
Sure would be nice to see the Doj followed all the way through.
Sure I'm going to ask one follow up on.
On the previous freeze I read that 15% to 20% of Florida Citrus production is going to be cut this year I know the weather usually doesn't go that far south give any indication that the current freeze that slipped in the U S. Right now is going to impact any of your California farms and that's all for me.
It's very very interesting you asked that we the answer is we don't know we don't think so we actually are prepping for this call talked about it briefly yesterday for those of you on the call who haven't tracked it.
<unk>.
Denver for example, where were some of the team is today.
It's very very cold.
And Denver West.
West Coast.
The Intermountain region is experiencing quite a bit quite a bit of a cold snap.
<unk> will be OK the predictions are relatively short lived.
For low temperatures and.
It's probably not at a place where most citrus farms, including ours.
Have the ability to.
Theres, a big fans basically that moved the air around and stop that cold air from settling in and having a deep freeze right on your property.
Called the win win machines.
We think the citrus is fine on the <unk> side almonds or right at the point of Bloom spring in the Central Valley of California is already sort of here.
Little bit of a cold snap in the little worrisome, there, but again, we think we think we get through that without a significant problem.
And again, if you see a.
Significant.
Reduction in volume available there.
Theres, usually a price response.
That that frankly is bigger than the reduction in volume. So it's not as a revenue matter unless you were completely wiped out and necessarily a bad bad thing on the revenue side, but obviously, we hope we hope that that essentially.
Nothing comes out with something we are tracking in if you want to call me up and asked my opinion in a week, we'll be able to tell you the answer.
We will do I appreciate the color and like I said it was little bit shocked at the previous rates went that far south in Florida. Thanks, Paul.
Yes.
And we in Florida, whereas as I said in my comments, we're essentially not exposed in any significant financial way, Florida citrus, but.
But California is a different question.
Thank you.
There are no additional questions at this time I will now ask about kind of messy for any further remarks.
Sure. Thank you ma'am. Thank you all on the on the call for listening to all of US on the management team I want to congratulate James Gilligan, our CFO in particular from the high quality supplemental that we put out a lot of work for him and his team hopefully it'll help transparency and communication.
With the with that.
On on the street, so with that we'll conclude the call and look forward to talking to you folks again in the next quarter.
That concludes.
Today's conference call. Thank you and have a great day.
Okay.
Yes.
Yeah.