Q1 2025 Farmland Partners Inc Earnings Call
Thank you for standing by my name is Amy and I will be your conference operator for today at this time I would like to welcome everyone to the farmland partners first quarter 'twenty 25 earnings call. All participants have been placed in a listen only mode.
Speaker Change: After the Speakers' remarks, we will conduct a question and answer session. So if you have any questions or would like to join the queue simply press star followed by the number one on your telephone keypad. It is now my pleasure to turn the call over to Luca Fabbri with the President and CEO with farmland partners you may begin.
Luca Fabbri: Thank you Amy good morning, and welcome everybody to farmland partners first quarter 2025 earnings conference call and webcast. We truly appreciate your taking the time to join US for these calls because we see them as a very important opportunity to share with you our thinking and our strategy in a format less formal and more interactive than public filings and press.
Speaker Change: Releases I will now turn to.
Speaker Change: Call over to our GC Kristine garrison for some customary preliminary remarks Christine.
Kristine Garrison: Thank you Luca and thank you to everyone on the call. The press release announcing our first quarter earnings was distributed after market close yesterday. The supplemental package have been posted to the Investor Relations section of our website under the sub head or events presentation for those who listen to the recording of this presentation. We remind you that the remarks made herein are.
Speaker Change: As of today May eight 2025.
Speaker Change: Not be updated subsequent to this call. During this call we will make forward looking statements, including statements related to the future performance of our portfolio, our identified and potential acquisitions and dispositions impact of acquisitions dispositions and financing activities business development opportunities as well as comments on our outlook for our.
Speaker Change: Business rents and the broader agricultural markets. We will also discuss certain non-GAAP financial measures, including net operating income S. F O. Adjusted F. F O EBITDA Ari and adjusted EBITDA Ari definitions of these non-GAAP measures as well as reconciliations to the most comparable GAAP measures are included in the company's.
Speaker Change: Press release announcing first quarter 2025 earnings which is available on our website farmland partners Dot com and is furnished as an exhibit to a current report on form 8-K dated may seven 2025.
Speaker Change: Listeners are cautioned that these statements are subject to certain risks and uncertainties many of which are difficult to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations and we advise listeners to review the risk factors discussed in our press release distributed yesterday and in documents, we have filed with us.
Speaker Change: That said I would now like to turn the call to our executive Chairman Paul Pittman Paul.
Speaker Change: Okay.
Paul Pittman: Thank you Christine and good morning, everyone I'm going to answer a sort of series of questions that different investors have E. Mailed me over the past few days and all basically just do them in the order that they have come in or the prevalence of the question because we get a lot of the same questions.
Paul Pittman: This was these conference calls is just a very good opportunity to answer questions like this without creating any sort of inside information.
Paul Pittman: So you know one of the questions, we're getting quite a bit it's about tariffs and potentially about stagflation, which keeps getting talked about and what might those effects beyond the value of our portfolio where farmers in general.
Paul Pittman: So let me let me start with tariffs because it's really a different answer from two different issues.
Paul Pittman: On tariffs.
Paul Pittman: Look getting in a battle with one of the largest from consumers in the world.
Paul Pittman: Meaning China is never good for the export market.
Paul Pittman: In the United States.
Paul Pittman: Food is one of them, we do export quite a bit about the U S that being said.
Paul Pittman: We've been through this before in the prior Trump administration.
Paul Pittman: The reality is we are not in a huge surplus situation for the basic foodstuffs and a world wide basis.
Paul Pittman: Anything China doesn't buy from us they are likely to buy from someone else are Brazil, South Africa, Argentina.
Paul Pittman: Sarah and whoever used to be buying those crops from those countries will need to shift.
Paul Pittman: They're purchasing to us.
Paul Pittman: All in all.
Paul Pittman: We've got kind of mediocre pricing for the key commodities in this right now not really bad, but it's certainly not as good as it was a few years ago.
Paul Pittman: And so you know farmers are under some level of financial pressure.
Paul Pittman: One another question that I get is rent increases I mean, we're predicting that in this calendar year on the row crop side of the portfolio, we hope to Eke out very modest increases in rents, but even that will be a bit of a challenge.
Paul Pittman: Yeah.
Paul Pittman: The fact is the better way to think about rents is to look at kind of that three to five year long term rolling average and so remember we got 20% increases in a couple of a couple of years ago, 15%.
Paul Pittman: A couple of years ago in a different year.
Paul Pittman: We've got some very very strong rent increases and now we're in a little more of a pause in terms of our ability to push rents it'll.
Paul Pittman: It will come back it always does.
Paul Pittman: And we're not really concerned about it but thats the answer to that question.
Speaker Change: Greg inflation now take place in a completely different story.
Paul Pittman: Last time, we saw stagflation.
Paul Pittman: In the 19 seventies.
Paul Pittman: And the high inflation environment, and a slower economy generally.
Paul Pittman: That was that turbo charged land values.
Paul Pittman: One of the probably the decade with the highest appreciation over the decade of farmland ever was the 19 seventies. So if we get ourselves in a high inflation environment. It will be very very.
Paul Pittman: Powerful for farmland, it's my expression, you've all heard me say before we're essentially gold with a coupon that's what farmland is.
Paul Pittman: And so in an inflation environment.
Paul Pittman: It'll be strong now.
Paul Pittman: Another question I'm getting is how many transactions maybe we do this year, if we decide to sell land.
Paul Pittman: The answer is we can do a total of approximately seven there are some complicated tax rules under the REIT rules that relate to that.
Speaker Change: 10, 31 exchange transactions are excluded.
Big picture as we can do about seven transactions during the calendar year.
Speaker Change: Many of you may have seen that we won the case one part of the case in the Appeals court in Texas.
Speaker Change: But dating back.
Speaker Change: On the road a fortune a.
Speaker Change: Sort of situations from long long ago.
Speaker Change: We won that case pretty strongly it may in fact be appealed basically our view is that sabre point the true perfect trader here in our opinion frac.
Speaker Change: Frankly has nothing left in their quiver, except delay tactics. So I don't know if they'll appeal or not.
Speaker Change: Eventually justice is coming from them and we are going to continue to pursue it and we spent the big money already to get to where we are.
Speaker Change: And we don't intend to kind of let them off the hook.
Speaker Change: There is a second part of that case that that got remanded, we anticipate frankly, winning that it's not a very complicated question you can never say with 100% certainty since it's a quartz.
Speaker Change: But we certainly have the.
Speaker Change: Overwhelming the upper hand in that remanded piece of that case.
Speaker Change: California land values as another question on that are they recovering because I've made relatively negative comments about California. In recent conference calls are the answer is no. They unfortunately are not recovering they're not getting really any worse.
Speaker Change: Youre starting to see capitulation on some sellers, which is a good thing.
Speaker Change: The bottom of the market starting to get put in.
Speaker Change: Then at least the market will get open again and they'll start to be transactions is what we believe is going on in California assets, It's still.
Speaker Change: Our California position is relatively large on the.
Speaker Change: Our balance sheet, but essentially half of that all our position or almost half of that position as a single transaction, we did long ago with old one.
Speaker Change: That's a very long term lease incredibly high quality properties with one with good water. Good production high returns that arent very volatile to us and and now additional solar income, which some of the other members of the team will talk about.
Speaker Change: So.
Speaker Change: We're just we're not we wish California was better but it's just the part of California, that's risky to us which is the non <unk>.
Speaker Change: Arm.
Speaker Change: Farms is a relatively modest portion of our portfolio. We will frankly continue to lessen our exposure to California for the reasons, we've talked about in the past.
Speaker Change: And of the.
Speaker Change: The portfolio haven't directly address this in the last couple of conference calls a couple of people ask me so I'll do it here.
Speaker Change: We would say that the portfolio today is in the mid Fourteens.
Speaker Change: Just kind of connecting the dots and to explain a little bit why we quit talking about it.
Speaker Change: The value of your portfolio track quarter to quarter gets a little bit strange when you pay out $1 15 dividend.
Speaker Change: So we're lower than the last time I talked about this but we gave you all $1 15, a share which came from somewhere.
Speaker Change: Obviously reduced our.
Speaker Change: Overall asset value under current market prices of the portfolio. So we think we're in a kind of mid mid Fourteens is portfolio value today and then the final thing I want to address Youll hear more about this you may have read it one of the one of the items on our proxy did not pass the item that did not.
Speaker Change: Pass is the compensation advisory vote.
Speaker Change: The reason it didn't pass in our opinion is that ISS has recommended voting against it by the way it was 48, 5% in favor.
Speaker Change: It was close to passing.
Speaker Change: We firmly believe ISS has that recommendation wrong.
Speaker Change: We beg U S shareholders that youre going to vote against management and Board's recommendation remember that I in particular, one as many shares as you do.
Speaker Change: We are not doing things that we think are detrimental to the value of shareholders because I am one of the top shareholders in the company and we are honest people doing what we believe please call us Hershey vote against the recommendation because here are the facts.
Speaker Change: ISS has recommended against that because we have a single trigger in the new CFO that we put in place about a year ago Susan Landy.
Speaker Change: If you recall.
Speaker Change: She is an internal promotion after we laid off our prior.
Speaker Change: CFO.
Speaker Change: We did it as a cost cutting measure and you can all see this if you go back and look at the proxies, Susan ex materially less than the prior CFO number one.
Speaker Change: So youre going to come to me for a salary increases after I finished the speech Unfortunately, but number two she makes materially less than any other CFO amongst our peers.
Speaker Change: Materially less.
Speaker Change: Number three for change of control payment is.
Speaker Change: Not even a whole number it is five times her for compensation, meaning a half a year.
Speaker Change: ISS is very formulaic and got this just wrong.
Speaker Change: And shareholders without contacting us we're thinking about it.
Speaker Change: We went ahead and followed the recommendation and Thats why it failed so.
Speaker Change: So I'm not going to say anything more about that if any investor would like to call and talk about it we're happy to.
Speaker Change: But the ISS recommendation.
Speaker Change: I don't know what they do they should be slightly for holistic to recommend against the voting on that issue and we have what is probably one of the lower paid cfos in the entire New York stock exchange.
Speaker Change: Is that is kind of ridiculous.
Speaker Change: So with that I'm going to turn it over.
Speaker Change: Luca.
Luca Fabbri: To pick up on the performance of the quarter and other matters Luca.
Paul Pittman: Thank you Paul.
Paul Pittman: This first quarter of this year was indeed very very strong in terms of financial performance I will let.
Speaker Change: Suzanne Landy, who is already diabetes must evolve and I'll ask you to put a salary increase.
Speaker Change: <unk> the more details about the performance, but it was enough.
Speaker Change: Strong cost is to allow us to actually raise guidance by several cents for the full year.
Speaker Change: This reflects our also our fundamental belief that remains as strong as ever.
Speaker Change: This is an exceptionally strong asset classes, especially in times of uncertainty and turbulence.
Speaker Change: Right now.
Paul Pittman: Building on Paul's comments.
Speaker Change: He leaves in their world.
Speaker Change: Fundamental.
Speaker Change: Meanwhile, surpluses in food production and moving forward are down in the next few years and decades.
Speaker Change: Well population expect excited to expand and the ability to produce <unk>.
Speaker Change: Expanding nearly at the same rate, we still need to produce every single.
Speaker Change: We'll show or kilo ground more call on those things that we can on a worldwide basis, the world simply cannot afford the reduction of the food production of the largest producer in the world The United States.
Speaker Change: The marked up significantly or taken out of the global market altogether, So again remember that while.
Speaker Change: Farmer profitability in the short term might be influenced by trade wars is not offset by the federal government.
Speaker Change: Donnie prior administrations.
Speaker Change: The fundamentals valley is that all of the.
Speaker Change: Of the land that we are not really dependent on long term.
Speaker Change: Patients about world population with demand and so on and so forth.
Speaker Change: Our strategy for this year again also remains fundamentally unchanged.
Speaker Change: We will continue to deploy capital.
Speaker Change: <unk> when it makes sense to do so for example, we've done some.
Speaker Change: Small acquisitions, we deployed capital in our loan program.
Speaker Change: They were both.
Speaker Change: Opportunities that we found very accretive even though they are relatively minor in terms of size.
Speaker Change: And we will continue to evaluate dispositions.
Speaker Change: From our portfolio using proceeds to.
Speaker Change: And for general corporate purposes, including also buying back stock.
Speaker Change: When you look at our.
Speaker Change: The gap between the <unk>.
Speaker Change: As Paul indicated and our stock price, we continue to believe that our installed base.
Speaker Change: Do you believe that this farmland weekend bye.
Speaker Change: And we will probably continue to do so as appropriate and as it makes sense.
Speaker Change: With that I will now turn the call over to our CFO who's on land before her overview of the company's financial performance.
Speaker Change: Thank you Luca I'm going to cover a few items today, including a summary of the three months ended March 31, 2025, a review of capital structure and updated guidance for 2025, I'll be referring to the supplemental package, which is available in the Investor Relations section of our website under the subheading events and presentations.
Speaker Change: First I'll share a few financial metrics that are that appear on page two.
Speaker Change: For the three months ended March 31, 2025, net income was $2 1 million or <unk> <unk> per share available to common shareholders, which was higher than the same period for 2024, largely due to higher interest income on loans under the Spi loan program proceeds from a solar lease arrangement with the tenant and lower interest expense.
Speaker Change: And gains on disposition to properties that occurred in the first quarter of 2025, <unk> with $2 3 million or five cents per weighted average share.
Speaker Change: <unk> was lower than the same period for 2024.
Speaker Change: Next we will review some of the operating expenses and other items shown on page five.
Speaker Change: Result of reductions in debt of $189 4 million that occurred in the fourth quarter of 2024 interest expense decreased $2 4 million for the three months ended in the first quarter compared to the same period in the prior year. In addition, the dispositions in 2024 resulted in lower property operating expenses.
Speaker Change: And depreciation expenses during the current year.
Speaker Change: G&A expenses decreased primarily due to lower travel and consulting fees.
Speaker Change: Next moving on to page 12, there are a few capital structure items to point out we had undrawn capacity on our lines of credit of approximately $167 million at the end of Q1 of 2025.
Speaker Change: We have no debt subject to interest rate reset in 2025, and as a result of our slot. We don't have any exposure to variable interest rates page 14 breaks down different revenue categories. The comments at the bottom to describe the differences between periods.
Speaker Change: A few points that I'd like to highlight our as expected fixed farmer decreased due to dispositions in 2020 for solar wind and recreation increased primarily due to proceeds from a solar lease arrangement with a tenant.
Speaker Change: But that was also partially offset by dispositions that occurred in 2020 for management fees and interest income increased primarily due to the increase in loan issuances under the Spi loan program direct operations is a combination of craft sales crop insurance and cost of goods sold it was up relative to 2024, largely due to the increased price of oil.
Speaker Change: But partially offset by higher cautionary water and maintenance of permanent planting.
Speaker Change: Page 15 is our updated outlook for 2025 assumptions are listed at the bottom of the page on the revenue side changes from the February guidance include an increase in solar wind and recreation due to the proceeds from the solar lease arrangement with a tenant.
Speaker Change: An increase in management fees and interest income as a result of increased activity under the loan program and an.
Speaker Change: An increase in other items due to higher amortization of points income for the loans under the loan program on the expense side changes from the February guidance include an increase in G&A for payroll related costs and allowances for losses on additional on an additional 100 loan program an increase in the gain loss on disposition.
Speaker Change: <unk> of assets due to two property dispositions that closed in Q1 of the current year.
Speaker Change: An increase in interest expense due to a higher weighted average interest rate.
Speaker Change: The forecasted range of <unk> is $13 3 million to $15 9 million or <unk> 28 to 34 per share, which is an increase of <unk> <unk> and <unk> on the low and high end of the range respectively from the last quarter.
Speaker Change: It summarizes where we stand today, we will keep you updated as we progress through the year. This wraps up our comments. This morning. Thank you all for participating operator, you can now begin the Q&A session.
Speaker Change: Thank you the floor is now open for questions as a reminder to enter the queue. Please press star followed by the number one on your telephone keypad.
You are called upon to ask your question. Please ensure that your phone is not on mute when asking your question, we'll pause for just a moment to compile the Q&A roster.
Speaker Change: Your first question comes from the line of Craig <unk>.
Speaker Change: Chair out with lucid capital markets. Your line is now open.
Speaker Change: Yeah, Hey, good morning, guys.
Speaker Change: You noted that the other revenue was up due to the amortization of the FBI loan points.
Speaker Change: Can you give us a sense of what that amount is amortized here in the first quarter and what the schedule looks like going forward.
Speaker Change: Okay.
Speaker Change: Luca or Susan you want to take that question I may make a general comment or do you want me to make a general comment why you look at the facts.
Speaker Change: You can make a general comment well, we need to look up the information.
Speaker Change: So we have made.
Speaker Change: One is one of the things we are managing toward as we gradually shrink this portfolio was maintaining our cash flows.
Speaker Change: To that <unk> and ability to pay dividends stays high and frankly, it's higher than it's been in the most of the life of the company right now.
Speaker Change: What that means is we have shifted some of our investment to making a few more loans as opposed to property purchases because the loans of course give us quite a bit higher current yield then.
Speaker Change: Owning a far we don't give depreciation of course, but we do get a higher current yield and it's helping us maintain our cash flow. So we've made a series of loans with relatively high interest rates. The headline interest rate is often in the neighborhood of 10% or so eight to 10 usually.
Speaker Change: And then we usually have points as well many of these loans are reasonably short term are less than a couple of years, so the amortization pace of that.
Speaker Change: Those points is pretty fast.
Speaker Change: Meaningful impact on quarters.
Speaker Change: Some of these loans may be getting us in the high teens, even almost 20%.
Speaker Change: Total return per annum.
Speaker Change: With that Susan do you want to give any more specific information feel free.
Susan Landy: Yes so.
Speaker Change: We are expecting to recognize amortization of points income for the year.
Susan Landy: Approximately $2 4 million.
Susan Landy: Okay great.
Susan Landy: And then just a follow up on the increase in the guide on the solar wind and recreational rent.
Susan Landy: You mentioned that there was an arrangement with a solar tenant is that a recurring situation, where we might see that in 2006 or is that more of a one timer.
Speaker Change: It's a little of both Craig Let me answer the question. So just for everybody. It's not a solar tenant is in fact a.
Susan Landy: A large AG tenants.
Susan Landy: Who asked to turn some of the property into solar for their own usage and to offset their own electricity costs for running pumps and other items on the farm.
Susan Landy: We agreed with that tenant they could do that.
Susan Landy: Only under the circumstances that we got a.
Susan Landy: Share of the benefit of having turned a portion of the farm into solar.
Susan Landy: Just so happens with the amount of electricity they avoided paying for and electricity pricing, we got a little bit of a windfall.
Susan Landy: So it is recurring but it won't be at the same scale as my prediction.
Susan Landy: We saw in this most recent year, where like in the ups were in the startup phase. So there's probably slightly more than a 12 month period in the in the amount that we were running through the P&L.
Susan Landy: And obviously it was a little bit speculative until it got running so we didn't.
Susan Landy: <unk>, we just took it and when it got paid.
Susan Landy: Or at least no.
Susan Landy: So so recurring yes, but not quite this quantity.
Susan Landy: Got it.
Susan Landy: And just a housekeeping item I saw that you repaid the April 25 debt maturities did you use the line of credit or where those refinanced at similar sorts of instruments.
Susan Landy: Yes.
Susan Landy: Yes.
Susan Landy: We did draw on our line of credit partially to repay that but we also used funds from our operations to pay for another portion of it.
Speaker Change: We drove a $14 million and then the Delta was.
Susan Landy: From operations.
Susan Landy: Got it.
Susan Landy: One more for me I know you had smaller acquisitions and dispositions this quarter, but.
Susan Landy: Can you give us any color directionally on how cap rates have moved maybe not.
Susan Landy: Year to date versus maybe the last six months of last year.
Susan Landy: So cap rates on land values on the row crop portfolio are basically staying the same.
Susan Landy: Markets the market for row crop is not as frothy as it was.
Speaker Change: But we're not often when I say frothy I mean, the number of $20000 plus sales in Illinois for example.
Speaker Change: We're making a sale to a sophisticated party and frankly farmer buyers are sophisticated usually unless they are in a fight with a neighbor over a piece of land right next door and certainly buyers.
Speaker Change: Other institutional buyers, who buy from us our disciplined we never we're getting most frothy numbers anyway, we are getting really strong numbers, we might get 18000, an acre for example on our high quality and when required but we're not get in 'twenty.
Speaker Change: So that very top.
Top end is kind of gone, but thats not the real market never was we never treated as the REO market.
Speaker Change: The mark to market in that Super high quality land.
Speaker Change: Our portfolio is ever more concentrated towards the best stuff in the Midwest.
Speaker Change: The market's very strong.
Speaker Change: Occasionally a bargain because it's just not as many buyers as it did two years ago.
Speaker Change: So that's how we ended up buying farms now and then we see something that we think is going on frankly pretty cheap and we step into buyer kind of and that's what we do.
Speaker Change: But the markets markets in the same place, California, as I said that market has been largely closed.
Speaker Change: And I won't start to see us.
Speaker Change: Capitulation on the part of some sellers starting to be some transactions out there.
Speaker Change: And you know that that is incredibly property and sort of account specific in the California Central Valley.
Speaker Change: And then one of the areas with really good water prices are still pretty strong not much going on in terms of a value declines if youre in one of the areas that's water constrained.
Speaker Change: And facing what they call Sigma regulation thats their groundwater regulation regime.
Speaker Change: <unk> seen prices.
Speaker Change: Decline and.
Speaker Change: And we're now kind of finding out how far they've declined.
Speaker Change: In those markets as we start to see a few transactions happen.
Speaker Change: Yes.
Speaker Change: Okay. Thanks for the color I appreciate it.
Speaker Change: Yes.
Speaker Change: Thank you. Your next question comes from the line of John Musk Masako with.
Speaker Change: RB Securities.
Speaker Change: Your line is now open.
Speaker Change: Thanks to that B Riley Securities.
Speaker Change: Just a quick question on the buyback just given where the cash levels are today I mean, how are you thinking about that versus.
Speaker Change: Catering to hold some dry powder, if you will for.
Speaker Change: Any kind of attractive.
Speaker Change: Land investments that May come your way, particularly given some of the uncertainty in the macro environment.
So Luca Luca alluded to this.
Speaker Change: Today.
Speaker Change: When I say there is a bargain out there in the fall.
Speaker Change: <unk> world that might be trading at a five or 10% below what we really think its worth.
Speaker Change: We think our stock.
Speaker Change: Is trading at.
Speaker Change: 25%, 30% discount to what we think it's really works.
Speaker Change: And so we're more likely to be stock buyback focused than land purchase focused obviously, you got a balanced cost the cost of money because we do have that so we could be paying off debt, but the cash but there is a serious bargain we sold a bunch of prop.
Speaker Change: <unk> for example, I would group would certainly be advocating that quite a bit of that money go into buybacks.
Speaker Change: Because.
Speaker Change: <unk>.
Speaker Change: Such a huge discount.
Speaker Change: To our to what we think the underlying value is at this point in time.
Speaker Change: That's driven as much by that.
Speaker Change: Macro environments.
Speaker Change: That we're facing with.
Speaker Change: Sort of an.
Speaker Change: Uncertainty in the marketplace overall, and when I say the marketplace settlement farmland in the New York stock exchange and the NASDAQ.
Speaker Change: Okay.
Speaker Change: And then in terms of the portfolio and maybe future.
Speaker Change: Acquisitions, I mean, what's kind of the difference in the reaction to some of these.
Speaker Change: Tariff headwinds or tariff noise between.
Speaker Change: Some of the core row crop assets versus things in the permanent crop basis and maybe.
Speaker Change: It sounded like a lot of stuff in California, maybe has more to do with water then concerns about tariffs, but just kind of interesting because I feel like some of those trina.
Speaker Change: Arms are a little more relying on exports.
Actually it's to some degree the other way around.
Speaker Change: So what you may see happen here.
Speaker Change: Crop by crop, but many of the specialty crops grown in the United States are consumed in the United States.
Speaker Change: Higher labor cost producer than many other agriculture regions on any sort of specialty crop that requires any level of hand picking or sorting, we're likely to have a higher cost in the production.
Speaker Change: As you see tariffs I'll use avocado is just as an example.
Speaker Change: A huge amount of the avocados consumed in the United States come from Mexico.
Speaker Change: Avocado are now more expensive unless they get exempted somehow from the tariff regime than they were.
Speaker Change: You have to factor in the fact that the avocados from Mexico kind of hit the grocery store shelves that are slightly different calendar time than the U S avocados, but.
Speaker Change: A lot of those specialty crops have a chance to benefit at least temporarily from the increased tariff regime and face less competition competition.
Speaker Change: In from outside the country Pistachios in particular would be another example, lauder import a lot of competition from Iran and other places on the <unk>.
Speaker Change: And youre going to see a lot less of that competition, particularly from Iran.
Speaker Change: So so we could see some benefit for citrus U S grown citrus is almost entirely consumed inside the United States U S grown strawberries also almost entirely consumed inside the United States. So so proud.
Speaker Change: I'll be a little bit of benefit there now remember, we don't think and I don't think anybody thinks that the tariff regime will go on.
Speaker Change: In the current format at least for writing extremely long period of time.
Speaker Change: I don't know if that changes the value of those farms, but it may make the performance for this given year a little bit better.
Speaker Change: Hope that answers your question.
Speaker Change: No I appreciate all that color and then kind of last kind of bad.
Speaker Change: Balance sheet related one.
Speaker Change: The farmer Mac facility here, you've got nothing outstanding on any matures in December.
Speaker Change: There are potentially you just let that roll off is there some kind of fee savings potentially from that or given the the.
Speaker Change: The spread on that facility would you want to keep that and renew it.
Speaker Change: I think Susan Luca feel free to add to this but I think we're likely to likely to leave it in place we leave it in place for a couple of reasons, we have the upcoming repayment of the preferred at some point early next year, but also look just having liquidity is.
Speaker Change: Somewhat large public company is a good idea.
Speaker Change: Rainy day money as I call it and.
Speaker Change: So what I would say odds on that we will leave that in place maybe at a slightly different size or something like that but it's probably going to continue.
Speaker Change: Going forward.
Speaker Change: Susan and Luca if you have a different opinion feel free to share it but that's what I think.
Speaker Change: No.
Speaker Change: You are right on point that we see maintaining liquidity access to liquidity.
Speaker Change: It is important.
Speaker Change: So the elements of our strategy that allows us that gives us a lot of flexibility in capital deployment.
Speaker Change: Balance sheet.
Speaker Change: Kind of strategies.
Speaker Change: They are likely to renew it.
Speaker Change: Okay that makes sense that's it for me. Thank you very much.
Speaker Change: Thank you just as a reminder, if you would like to ask a question. Please press star followed by the number one on your telephone keypad.
Speaker Change: Okay.
Speaker Change: Alright. Thank you it looks like there are no further questions I would like to turn the call back over to Luca Fabbri for closing remarks.
Speaker Change: Thank you Amy and thank you everybody. We appreciate your interest in our company and look forward to updating you on our activities our results in the coming quarters have a great day.
Speaker Change: Thank you that does conclude today's conference call you may now disconnect.
Speaker Change: [music].
Speaker Change: Sure.
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Speaker Change: Okay.
Speaker Change: [music].