Q2 2026 Farmland Partners Inc Earnings Call

July 30, 2026

Operator 3: Hello, everyone. Thank you for joining us, and welcome to the Farmland Partners Inc. Q2 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Luca Fabbri, President and Chief Executive Officer. Luca, please go ahead.

Operator: Hello, everyone. Thank you for joining us, and welcome to the Farmland Partners Inc. Q2 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Luca Fabbri, President and Chief Executive Officer. Luca, please go ahead.

Speaker #1: If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Luca Fabbri, President and Chief Executive Officer.

Speaker #1: Luca, please go ahead.

Speaker #2: Thank you, Erika. And good morning, and welcome to Farmland Partners' second quarter 2026 earnings conference call and webcast. We truly appreciate your taking the time to join us for this call 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 releases.

Luca Fabbri: Thank you, Erica, and good morning, and welcome to Farmland Partners' Q2 2026 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 releases. I will now turn over the call to our General Counsel, Christine Garrison, for some customary preliminary remarks. Christine?

Luca Fabbri: Thank you, Erica, and good morning, and welcome to Farmland Partners' Q2 2026 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 releases. I will now turn over the call to our General Counsel, Christine Garrison, for some customary preliminary remarks. Christine?

Speaker #2: I will now turn over the call to our General Counsel, Christine Garrison, for some customary preliminary remarks. Christine?

Speaker #3: Thank you, Luca, and thank you to everyone on the call. The press release announcing our second quarter earnings was distributed after market close yesterday.

Christine Garrison: Thank you, Luca, and thank you to everyone on the call. The press release announcing our Q2 earnings was distributed after market close yesterday. The supplemental package has been posted to the investor relations section of our website under the subheader Events and Presentations. For those who listen to the recording of this presentation, we remind you that the remarks made herein are as of today, 30 July 2026, and will 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 business rents and the broader agricultural markets. We will also discuss certain non-GAAP financial measures, including net operating income, FFO, adjusted FFO, EBITDAre, and adjusted EBITDAre.

Speaker #3: The supplemental package has been posted to the investor relations section of our website under the subheader "Events and Presentations." For those who listened to the recording of this presentation, we remind you that the remarks made herein are, as of today, July 30, 2026, and will not be updated subsequent to this call.

Speaker #3: 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 business, rents, and the broader agricultural markets.

Speaker #3: We will also discuss certain non-GAAP financial measures, including net operating income, SFO, adjusted SFO, EBITDA-RE, and adjusted EBITDA-RE. Definitions of these non-GAAP measures, as well as reconciliations to the most comparable GAAP measures, are included in the company’s press release announcing second quarter 2026 earnings, which is available on our website, farmlandpartners.com, and is furnished as an exhibit to our current report on Form 8-K dated July 29, 2026.

Christine Garrison: Definitions of these non-GAAP measures, as well as reconciliations to the most comparable GAAP measures, are included in the company's press release announcing Q2 2026 earnings, which is available on our website, farmlandpartners.com, and is furnished as an exhibit to our current report on 8-K dated 29 July 2026. 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've filed with or furnished to the SEC. I would now like to turn the call to our Executive Chairman, Paul Pittman. Paul?

Speaker #3: 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.

Speaker #3: 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've filed with or furnished to the SEC.

Speaker #3: I would now like to turn the call to our Executive Chairman, Paul Pittman. Paul?

Speaker #4: Thank you, Christine. This was actually a pretty good quarter for us, and, frankly, a very mundane quarter. No real surprising events. Everything's kind of performing as expected.

Paul Pittman: Thank you, Christine. This was actually a pretty good quarter for us and frankly, a very mundane quarter. No real surprising events. Everything's kind of performing as expected and as projected. You'll hear me back at the Q&A, but I'm going to turn it over to Luca so we don't end up repeating the same things.

Speaker #4: And as projected, so you'll hear me back at the Q&A, but I'm going to turn it over to Luca so we don't end up repeating the same things.

Speaker #2: Thank you, Paul. This was, you know, a pretty strong quarter performance-wise, to the extent that we actually even marginally adjusted guidance upwards on the low end for the remainder of the year for AFFO.

Luca Fabbri: Thank you, Paul. This was a pretty strong quarter performance-wise to the extent that we actually even marginally adjusted guidance upwards on the low end for the remainder of the year for AFFO. As Paul said, a relatively uneventful quarter, as typically Q2 and Q3 of the year are in the middle of the year. We continue evaluating asset dispositions through the end of the year, especially non-core assets like in California. We are also actively monitoring the conditions in the agricultural world as far as timing of our lease renewals. We have held back so far in pushing lease renewals for the next year because Financial conditions are not ideal, to say the least, among our tenants. We do have very strong tenants in our pool. This is not the first year of relatively middling performance in their financials.

Speaker #2: But as Paul said, you know, relatively uneventful quarter, as typically Q2 and Q3 of the year are. In the middle of the year. We continue evaluating asset dispositions through the end of the year, especially non-core assets like in California.

Speaker #2: And we're also. Actively monitoring the conditions in our in the agricultural world as far as timing of our lease renewals. We have held back so far in pushing lease renewals for the next year, because financial conditions are not ideal, to say the least, in among our tenants.

Luca Fabbri: We are also actively monitoring the conditions in the agricultural world as far as timing of our lease renewals. We have held back so far in pushing lease renewals for the next year because Financial conditions are not ideal, to say the least, among our tenants. We do have very strong tenants in our pool. This is not the first year of relatively middling performance in their financials. There is nothing particularly new that we expect, but we are hoping for a little bit of better news before we kick off the lease renewal cycle in higher gear. With that, I will now turn the call over to our CFO, Susan Landi, for her overview of the company's financial performance. Susan?

Speaker #2: But we do have very, very strong tenants in our pool. And this is not the first year of relatively middling performance in their financials.

Speaker #2: So there is nothing particularly new that we expect, but we are hoping for a little bit of better news before we kick off the lease renewal cycle in higher gear.

Luca Fabbri: There is nothing particularly new that we expect, but we are hoping for a little bit of better news before we kick off the lease renewal cycle in higher gear. With that, I will now turn the call over to our CFO, Susan Landi, for her overview of the company's financial performance. Susan?

Speaker #2: And with that, I will now turn the call over to our CFO, Susan Landi, for her overview of the company's financial performance. Susan?

Speaker #1: Thank you, Luca. I'm going to cover a few items today, including the summary of the 3- and 6-month periods ended June 30, 2026, a review of our capital structure, and updated guidance for 2026.

Susan Landi: Thank you, Luca. I'm going to cover a few items today, including the summary of the three and six months ended 30 June 2026, a review of our capital structure, and updated guidance for 2026. I'll be referring to the supplemental package, which is available in the investor relations section of our website under the subheader Events and Presentations. First, I want to share a few metrics that appear on page two. For the three months ended 30 June 2026, net income was $3.1 million, or $0.07 per share available to common stockholders, versus $7.8 million or $0.15 per share available to common stockholders for the same period in 2025. AFFO was $1.7 million or $0.04 per weighted average share, compared to $1.3 million or $0.03 per weighted average share for the same period in 2025.

Speaker #1: I'll be referring to the supplemental package, which is available in the investor relations section of our website under the subheader "Events and Presentations." First, I want to share a few metrics that appear on page 2.

Speaker #1: For the 3-month ended June 30, 2026, net income was $3.1 million, or $0.07 per share, available to common stockholders, versus $7.8 million, or $0.15 per share, available to common stockholders for the same period in 2025.

Speaker #1: AFFO was $1.7 million, or $0.04 per weighted average share, compared to $1.3 million, or $0.03 per weighted average share for the same period in 2025.

Speaker #1: For the six months ended June 30, 2026, net income was $3.8 million, or $0.08 per share, available to common stockholders, versus $9.9 million, or $0.18 per share, available to common stockholders for the same period in 2025.

Susan Landi: For the six months ended 30 June 2026, net income was $3.8 million or $0.08 per share available to common stockholders, versus $9.9 million or $0.18 per share available to common stockholders for the same period in 2025. AFFO was $3.8 million or $0.09 per weighted average share compared to $3.6 million and $0.08 per weighted average share for the same period of 2025. Page five shows a more comprehensive look at the main drivers of these changes year over year. On the revenue side, we were positively impacted by higher interest income, which is due to higher average balance on the loans under the FPI loan program and financing receivables, an increase in the amortization of points, and higher proceeds from oil and gas royalties. These increases were partially offset by lower rental income due to asset dispositions occurring in the prior year.

Speaker #1: AFFO was $3.8 million, or $0.09 per weighted average share, compared to $3.6 million, and $0.08 per weighted average share for the same period of 2025.

Speaker #1: Page 5 shows a more comprehensive look at the main drivers of these changes year over year. On the revenue side, we were positively impacted by higher interest income, which is due to a higher average balance on the loans under the FPI Loan Program and financing receivables.

Speaker #1: An increase in amortization of points and higher proceeds from oil and gas royalties. These increases were partially offset by lower rental income due to asset dispositions occurring in the prior year.

Speaker #1: Operating expenses declined on a quarter to quarter-to-date and year-to-date basis over prior year. Some of these declines are to be expected with the property dispositions that occurred in the prior year, but there were also other reductions to GNA and legal fees, including a reduction in property and impairment in property impairment charges.

Susan Landi: Operating expenses declined on a quarter-to-date and year-to-date basis over prior year. Some of these declines are to be expected with the property dispositions that occurred in the prior year, there were also other reductions to G&A and legal fees, including a reduction in property impairment charges. These declines were partially offset by an increase in the provision for credit loss allowance related to loans under the FPI loan program. Overall, we saw a reduction in net income and EPS for both quarter-to-date and a year-to-date basis. The primary driver for the reduction relates to a decrease in the net gain on disposition of assets as a result of fewer property dispositions in the current year versus the prior year.

Speaker #1: These declines were partially offset by an increase in the provision for credit loss allowance related to loans under the FPI Loan Program. Overall, we saw a reduction in net income and EPS for both quarter-to-date and a year-to-date basis.

Speaker #1: The primary driver for the reduction relates to a decrease in the net gain on disposition of assets, as a result of fewer property dispositions in the current year versus the prior year.

Speaker #1: AFFO per weighted average share is up by a penny for the 3 and 6-month ended period of the current year. On page 12, there are a few capital structure items that I'd like to point out.

Susan Landi: AFFO per weighted average share is up by $0.01 for the three and six months ended period of the current year. On page 12, there are a few capital structure items that I would like to point out. The first is that we had undrawn capacity on the lines of credit of approximately $122 million at the end of Q2 2026. There were repayments of $8 million during the quarter, but no borrowings. We had one MetLife loan with a rate reset occurring during the Q2. In addition, one loan was extended by one year. The average rate on these loans decreased from 5.64% to 5.25%. Moving on to page 15, it will show you the updated outlook for 2026. The assumptions are listed at the bottom of the page. On the revenue side, changes from the April guidance include an increase in our outlook on variable lease payments.

Speaker #1: The first is that we had an undrawn capacity on the lines of credit of approximately $122 million at the end of Q2, 2026. There were repayments of $8 million during the quarter but no borrowings.

Speaker #1: We had one MetLife loan with a rate reset that occurring during the second quarter. In addition, one loan was extended by 1 year. The average rate on these loans decreased from 5.64% to 5.25%.

Speaker #1: Moving on to page 15 has it'll show you the updated outlook for 2026. The assumptions are listed at the bottom of the page. On the revenue side, changes from the April guidance include an increase in our outlook on variable lease payments.

Speaker #1: On the expense side, changes from the April guidance include increases as a result of additional provision for credit loss allowances on loans receivable and an increase in impairment related to updated market valuations in connection with one of our West Coast properties. These were partially offset by a $3.6 million gain on a property disposition.

Susan Landi: On the expense side, changes from the April guidance include increases as a result of additional provision for credit loss allowances on loans receivable, and an increase in impairment related to updated market valuations in connection with one of our West Coast properties. These were partially offset by a $3.6 million gain on a property disposition. The forecasted range of AFFO is $13.5 million to 15.3 million, or $0.31 to $0.35 per share, which is an increase from the prior quarter on the low end of the range. The high end of the range remained unchanged. This summarizes where we stand today. We will keep you updated as we progress through the year. This does wrap up our comments for this morning. Thank you all for participating. Operator, you can now begin the Q&A session.

Speaker #1: The forecasted range of AFFO is $13.5 million to $15.3 million, or $31 to $35 per share, which is an increase from the prior quarter on the low end, or unchanged.

Speaker #1: This summarizes where we stand today. We will keep you updated as we progress through the year. This does wrap up our comments for this morning.

Speaker #1: Thank you all for participating. Operator, you may now begin the Q&A session.

Speaker #3: We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand.

Operator 3: We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.

Operator: We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.

Speaker #3: To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #3: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster.

Paul Pittman: Operator, while you're compiling that roster, this is Paul. I'm just going to chime in on a couple of questions that we got via email and give those answers. Then we'll go to questions and answers from the audience. We got a question regarding kind of how we're managing the building of reserves as it relates to credit losses. While we frankly, as a business matter, think we will collect 100% of all of our outstanding loans, our loan program, as you all know, is frankly a relatively high-risk program. We're making loans to people who are in distress. We're often getting 15% or 20% interest rates. We believe it's prudent to gradually build those reserves with a certain hope to reverse them.

Speaker #2: So, Operator, while you're compiling that roster, this is Paul. I'm just going to chime in on a couple of questions that we got via email and give those answers, and then we'll go to questions and answers from the audience.

Speaker #2: So, we got a question regarding kind of how we're managing the building of reserves as it relates to credit losses. And, you know, while we, frankly, as a business matter, think we will collect 100% of all of our outstanding loans, our loan program, as you all know, is, frankly, a relatively high-risk program.

Speaker #2: You know, we're making loans to people who are in distress. We're often getting 15 or 20% interest rates. And so we just believe it's prudent to gradually build those reserves.

Speaker #2: With a certain hope to reverse them. But it's better to build those reserves and reverse them later than frankly not to build any reserves and then get caught holding the bag.

Paul Pittman: It's better to build those reserves and reverse them later than, frankly, not to build any reserves and then get caught holding the bag. It's really nothing unusual. The size of our loan program today is reasonably large, a little about $60 million total. That's why you're seeing these reserves built. In this particular quarter, I don't think the additional reserve was particularly high. The other question we got over the email was a question about legal expense, which shows up on the P&L, legal and accounting, at about 312,000. Is that indicative of some significant litigation that's going on? The answer to that question is no. That 312,000 is two-thirds either audit or tax fees, which show up in the Q2. That's when we get those. That's really the bulk of it.

Speaker #2: So, it's really nothing unusual. The size of our loan program today is reasonably large, a little about 60 million dollars total. And so, yeah, that's why you're seeing these reserves built.

Speaker #2: In this particular quarter, I don't think the additional reserve was particularly high. The other question we got over the internet—or, I mean, over email—was a question about legal expense, which shows up on the P&L, legal and accounting, at about $312,000.

Speaker #2: And is that indicative of some significant litigation that's going on? And the answer to that question is no. That $312,000 is two-thirds either audit or tax fees, which is, you know, show up in the second quarter.

Paul Pittman: That 312,000 is two-thirds either audit or tax fees, which show up in the Q2. That's when we get those. That's really the bulk of it. The litigation was only about 25,000 of that 312. We continue to have the litigation on a farm in Louisiana with some prior tenant dispute. We also have, of course, the litigation regarding SabrePoint continues to go on. As you can see from that $25,000 spend, there's not a whole lot happening right now in either of those cases. With that, we can go to whatever Q&A came in with you, operator.

Speaker #2: That's when we get those. And so that's really the bulk of it. The litigation was only about $25,000 of that $312,000. We continue to have the litigation on the farm in Louisiana with some prior tenant dispute, and we also have, you know, of course, the litigation regarding Sabre Point continues to go on.

Paul Pittman: The litigation was only about 25,000 of that 312. We continue to have the litigation on a farm in Louisiana with some prior tenant dispute. We also have, of course, the litigation regarding SabrePoint continues to go on. As you can see from that $25,000 spend, there's not a whole lot happening right now in either of those cases. With that, we can go to whatever Q&A came in with you, operator.

Speaker #2: But as you can see from that $25,000 spend, there’s not a whole lot happening right now in either of those cases. With that, we can go to whatever Q&A came in with you, Operator.

Speaker #3: The first question comes from the line of Craig Cusera, a Lucid with a Lucid Capital. Your line is open. Please go ahead.

Operator 3: The first question comes from the line of Craig Kucera with Lucid Capital. Your line is open. Please go ahead.

Operator: The first question comes from the line of Craig Kucera with Lucid Capital. Your line is open. Please go ahead.

Speaker #4: Yeah, thanks. Appreciate the color on the credit loss provision. But I'm curious, you know, that was affiliated with one operator that I think you mentioned and had some trouble.

Craig Kucera: Yeah, thanks. Appreciate the color on the credit loss provision. I'm curious, that was affiliated with one operator that I think you mentioned had had some trouble. Was this for the same borrower or a different loan?

Speaker #4: Was this for the same borrower or a different loan?

Speaker #2: No, we're building it related to the same borrower for, you know, we evaluate every borrower, but the bulk of it is related to the same borrower we've talked about in the past.

Paul Pittman: No, we're building it related to the same borrower. We evaluate every borrower, but the bulk of it is related to the same borrower we've talked about in the past. We're continuing to monitor the situation. One of the things you're up against in any of these sort of distressed situations, as long as the principal that we deal with, meaning the individual human beings that we're dealing with, keep control of the situation. We're making loans with some relatively steep terms, with what we think is strong collateral and with people, strong intent to pay it back. So far in our loan program, we've been doing this now a dozen years, we haven't had anybody not pay us. The risk you face is that someone loses control of their situation to bankruptcy, for example, or something else.

Speaker #2: And we just, you know, we're continuing to monitor the situation. You know, one of the things you're up against in any of these cases in any of these sort of distressed situations as long as the principle that we deal with, meaning the individual human beings that we're dealing with, keep control of the situation, you know, we're making loans with some relatively steep terms with strong what we think is strong collateral and, you know, with people, you know, strong, strong intent to pay it back.

Speaker #2: And so far in our loan program, you know, we've been doing this now a dozen years. You know, we haven't added anybody not pay us.

Speaker #2: But the risk you face is that someone loses control of their situation to bankruptcy, for example, or something else. And then you're dealing with not, you know, a loan made to a person who we know, who has intent of paying us back.

Paul Pittman: You're dealing with not a loan made to a person who we know, who has intent of paying us back. You're just kind of dealing with a nameless, faceless court process. That's really where and why we feel it prudent to build reserves over time, as we're watching these borrowers in some sort of trouble. Our fear is that they lose control of their situation, and then our security position from a legal standpoint doesn't really change, but from a moral standpoint, if you will, does change. That's what's going on here.

Speaker #2: You're just kind of dealing with a nameless, faceless, you know, court process. And, you know, that's really where and why we feel a prudent to build reserves over time as we're watching these borrowers in some sort of trouble, our fear is that they lose control of their situation and then from a, you know, from a legal standpoint doesn't really change, but from a moral standpoint, if you will, does change.

Speaker #2: And that's what's going on here.

Speaker #4: Okay, that's helpful. I appreciate that. So, I know you guys mentioned you're looking to do more dispositions outside of California, but where was the disposition this quarter?

Craig Kucera: Okay. That's helpful. I appreciate that. I know you guys mentioned you're looking to do more dispositions out of California, but where was the disposition this quarter? Was that on the West Coast or was that elsewhere?

Speaker #4: Was that on the West Coast or was that elsewhere?

Speaker #2: Luca, you want to take that one?

Paul Pittman: Luca, you want to take that one?

Speaker #4: Yeah, no, it was elsewhere. It was actually the Sungain was related to the fact that these are a solar development on the farm, and we actually sold the farm to the developer itself.

Luca Fabbri: Yeah. No, it was elsewhere. It was actually, the strong gain was related to the fact that this is a solar development on the farm, and we actually sold the farm to the developer itself. The value to them was much higher than the agricultural value. We locked in that gain.

Speaker #4: And the value to them was much higher than the agricultural value, so we locked in that gain.

Paul Pittman: That was in Illinois, correct?

Speaker #2: That was in Illinois, correct? That's in Illinois farm.

Luca Fabbri: That is correct.

Paul Pittman: That's an Illinois farm.

Speaker #4: Okay. No, I was going to be impressed if you had it booked at 3.5 million gain out of California. So, I just wanted to double-check that.

Craig Kucera: Okay. No, I was going to be impressed if you had booked a $three and a half million gain out of California. Just wanted to double check that.

Paul Pittman: Yeah.

Luca Fabbri: We would have celebrated as well, trust me, Greg.

Speaker #4: We would have celebrated as well, trust me, Craig. Right. So, there was an increase in your expectations regarding citrus and avocado revenue flowing through the guidance on variable payments.

Craig Kucera: Right. There was an increase in your expectations regarding citrus and avocado revenue flowing through the guidance on variable payments. Is that more of a pricing or a volume situation that you're expecting?

Speaker #4: Is that more of a pricing or a volume situation that you’re expecting? The increase in variable rent is actually more related to almonds, and in particular, as the year goes on, we get better visibility on both the yield and pricing.

Luca Fabbri: The increase in variable rent is actually more related to almonds, and in particular as the year moves along, we get better visibility on both yield and pricing. We tend to be, on variable rents, very cautious at the beginning of the year. We've had some pretty bad performances a couple of years ago on almonds, for example. As I said, as the year goes along, we have a little bit more visibility into the expected performance, and that's exactly what happened in this case.

Speaker #4: So, we tend to be on variable rents very cautious at the beginning of the year. We, you know, we've had some pretty bad performances, you know, a couple of years ago on almonds, for example.

Speaker #4: And then as I said, as the year goes along, we have a little bit more visibility into the expected performance. And that's exactly what happened in this case.

Speaker #4: Okay. That's it for me. Thank you.

Craig Kucera: Okay. That's it for me. Thank you.

Speaker #3: The next question comes from the line of John Masocha with B. Riley. Your line is open. Please go ahead.

Operator 3: The next question comes from the line of John Massocca with B. Riley. Your line is open. Please go ahead.

Operator: The next question comes from the line of John Massocca with B. Riley. Your line is open. Please go ahead.

Speaker #4: Good morning, everyone. Maybe sticking with the assets that have a little bit more of a variable revenue stream, just to kind of clarify then, is the commentary around some of the citrus and avocado what's driving the slight decrease in maybe expectations for crop sales and a little bit of crop insurance coming into the guidance?

John Massocca: Good morning, everyone. Maybe sticking with the assets that had a little bit more of a variable revenue stream. Just to kind of clarify then, is the commentary around some of the citrus and avocado what's driving the slight decrease in maybe expectations for crop sales and a little bit of crop insurance coming into the guidance?

Speaker #2: Susan, do you want to chime in on the specific details? Because the big mover this quarter was on the almond side.

Luca Fabbri: Susan, do you want to chime in on the specific details? The big mover this quarter was on the almond side.

Speaker #3: Yeah. I mean, as far as the direct ops go, there was a little bit of a decline due to a softening market within the citrus and yields being down a little bit due to, you know, weather events in California.

Susan Landi: Yeah. As far as the direct ops go, there was a little bit of a decline due to a softening market within the citrus, and yields being down a little bit due to weather events in California.

Speaker #4: Okay. That makes sense. And then, you know, given the kind of capacity you have today with regards to kind of debt availability versus kind of how the stocks performed, how are you thinking about the buyback?

John Massocca: Okay. That makes sense. Then, given the kind of capacity you have today with regards to kind of debt availability versus how the stocks performed, how are you thinking about the buyback? Is that something that's more levered to disposition proceeds, or would you be comfortable kind of using leverage to reactivate that program?

Speaker #4: Is that something that's more levered to disposition proceeds, or would you be comfortable kind of using leverage to, you know, reactivate that program?

Speaker #2: Well, our buyback program is first driven by, you know, stock price, and then by cash availability. You know, we can, at any point in time, enter the market for buybacks.

Paul Pittman: Well, our buyback program is first driven by stock price and then by cash availability. We can, at any point in time, enter the market for buybacks if we think the price is highly accretive to the remaining shares outstanding. At this price, we frankly think it is pretty accretive. The borrowing cost here is reasonably steep, mid-fives, give or take a few basis points either way. We're always struggling with the, you want to borrow money to buy back a stock that's yielding on the dividend three and a half or something like that, maybe 3.4%, versus the five and a half borrowing. That's really the kind of challenge that we kind of face and struggle with there. To answer your question specifically, we will borrow to run a disciplined buyback program from time to time.

Speaker #2: You know, if we think the price is highly accretive to the remaining shares outstanding. At this price, we frankly think it is pretty accretive.

Speaker #2: But it's, you know, we, you know, the borrowing cost here is reasonably steep, you know, mid-fives, give or take, you know, a few basis points either way.

Speaker #2: And so, you know, we're always struggling with the, you know, you want to borrow money to buy back a stock that's, you know, yielding on the dividend three and a half or something like that, three maybe 3.4.

Speaker #2: You know, versus a five and a half borrowing. And so that's really the kind of challenge that we kind of face and struggle with there.

Paul Pittman: That's really the kind of challenge that we kind of face and struggle with there. To answer your question specifically, we will borrow to run a disciplined buyback program from time to time. We certainly, even if we're technically borrowing to execute on a given day, we've really got a sell assets to backfill mentality, because we don't want to run that negative spread for a long period of time.

Speaker #2: So, to answer your question specifically, we will borrow to run a kind of to run a disciplined buyback program from time to time, but we certainly, even if we're technically borrowing to execute on a given day, we've really got a sell assets to backfill mentality.

Paul Pittman: We certainly, even if we're technically borrowing to execute on a given day, we've really got a sell assets to backfill mentality, because we don't want to run that negative spread for a long period of time.

Speaker #2: Because we don't want to run that negative spread for a long period of time.

Speaker #4: Okay. And then kind of bigger picture, I know we talked about this last quarter, but as some of the macroeconomic volatility and kind of the elevated energy prices have kind of persisted, how is that kind of impacting your tenants, you kind of mentioned that you're holding off a little bit on kind of pushing renewals given the financial situation and the broader farmer industry, but I didn't know if that's something that's changed at all since we last talked or become a little bit more negative since we last talked or if it's just kind of the same theme as maybe from, call it, March of this year?

John Massocca: Okay. Kind of bigger picture, I know we talked about this last Q, as some of the macroeconomic volatility and kind of the elevated energy prices have kind of persisted, how is that kind of impacting your tenants? You kind of mentioned that you're holding off a little bit on kind of pushing renewals given the financial situation and the broader farmer industry. I didn't know if that's something that's changed at all since we last talked or become a little bit more negative since we last talked, or if it's just kind of the same theme as maybe from, call it March 2024.

Speaker #2: Yeah, it's pretty much the same theme, but let me give you a little more context. So, if we think that, you know, farmers are kind of rolling in dough and they're really happy and exuberant, when you get to the, you know, call it early summer, we will aggressively pursue leasing in the summer.

Paul Pittman: Yeah. It's pretty much the same theme, let me give you a little more context. If we think that farmers are kind of rolling in dough and they're really happy and exuberant when you get to the, call it early summer, we will aggressively pursue leasing in the summer. The reason is, you never know what's going to happen come fall. You suddenly have a huge bumper crop, prices go down. To be honest, farmers, even though they may make it back up on volume, they're depressed because corn prices and bean prices went down. Alternatively, if you find yourself in a situation in the early summer where the crop prices are kind of ho-hum, you kind of hang back and maintain your optionality.

Speaker #2: And the reason is you never know what's going to happen come fall. You suddenly have a huge bumper crop, prices go down, you know, to be honest, farmers, even though they may make it back up on volume, they're depressed because corn prices and bean prices went down.

Speaker #2: Alternatively, if you find yourself in a situation in the early summer where the crop prices are kind of ho-hum, you kind of hang back and maintain your optionality.

Speaker #2: We think you're going to see—you know, we think that this isn't going to be the same kind of bumper crop we've seen in the last couple of years, basically due to weather going on in the United States as well as kind of worldwide.

Paul Pittman: We think that this isn't going to be the same kind of bumper crop we've seen in the last couple of years, basically due to weather going on in the United States as well as kind of worldwide weather shocks, because it's a global market. Don't go trade commodities based on that statement. It's just we have a strong enough view about that we're not rushing to get the leasing process done. We think there's materially better chance of upside than downside, why not hang back? I would expect that this year's leasing process is a lot like last year's. It will be a flat year in most cases, and maybe up just a little bit. We often have cost of living adjustments in our leases over the term.

Speaker #2: Weather shocks, because it's a, you know, it's a global market. So, our tendency, you know—and don't take, don't go trade commodities based on that statement.

Speaker #2: It's just we have a strong enough view about that, that we're not rushing to get the leasing process done. We don't think we think there's materially better chance of upside than downside.

Speaker #2: So, why not hang back? You know, I would expect that this year's leasing process is a lot like last year's. It will be a flat year in most cases and maybe up just a little bit.

Speaker #2: We often have cost of living adjustments in our leases over the term. And so, even if you don't bump rent materially in the renegotiation, you'll leave the COLA clause in there, which gives you an increase over years.

Paul Pittman: Even if you don't bump rent materially in the renegotiation, you'll leave the COLA clause in there, which gives you an increase over years. That's what we think will happen right now with some hope that it actually turns out to be better than that, which is why we're not trying to lock in a ton of leases yet. By the time we get around to September, we got to get started on it just because you run out of time otherwise.

Speaker #2: But that's what we think will happen right now with a, you know, with some hope that it actually turns out to be better than that, which is why we're not trying to lock in on tunnel leases yet.

Speaker #2: But, you know, by the time we get around to September, we got to get started on it just because we run out of time otherwise.

Speaker #4: Okay. And then kind of with regards to some of the West Coast properties, particularly the tree nut assets, you know, is there any read-through to kind of the increase in your variable rent expectations in maybe some thoughts of that market is firming that could loosen up some disposition opportunities specifically there or is that still kind of a challenged market from a transaction perspective?

John Massocca: Okay. Kind of with regards to some of the West Coast properties, particularly the tree nut assets, is there any read-through to kind of the increase in your variable rent expectations and maybe some thoughts that that market is firming that could loosen up some disposition opportunities specifically there, or is that still kind of a challenged market from a transaction perspective?

Speaker #2: So, it is a challenged market from a transaction perspective. But probably less challenged than it was six months ago. I think you've reached in California I think a prior question a set of questions kind of brought this up.

Paul Pittman: It is a challenged market from a transaction perspective, probably less challenged than it was 6 months ago. I think you've reached in California, I think a prior set of questions kind of brought this up. California agriculture is in a terrible spot. I mean, it's in the worst spot I've seen it, frankly, in my lifetime. I'm 64. It is a combination of, frankly, bad policy in the state. Actual decline in water availability, more so political decline in water availability, and a state that is not supportive of how farm labor has to work. The costs of farm labor are going up dramatically in the state. What you're seeing is a real pressure on everybody that owns land in California, in the specialty crops in particular.

Speaker #2: California agriculture is in a terrible, terrible spot. I mean, it's in the worst spot I've seen it, frankly, in my lifetime. And I'm 64.

Speaker #2: It is a combination of, frankly, bad policy in the state, you know, actual decline in water availability, but more so political decline in water availability.

Speaker #2: And a state that is not supportive of, you know, you know, of how farm labor has to work. And so, the cost of farm labor are going up dramatically in the state.

Speaker #2: And so, what you're seeing is a real pressure on everybody that owns land in California in the specialty crops in particular. So, what you're seeing in terms of almond price adjustment is just a simple supply-demand of this year's almond crop.

Paul Pittman: What you're seeing in terms of almond price adjustment is just a simple supply-demand of this year's almond crop, or international crops in the last 12 months. I don't think that makes some big dramatic improvement in the market for tree nuts or citrus or anything else in California. What it does is it certainly helps on the cash flow on those assets this year. Our perspective is that, and we've been this way now for several years, and compared to other fund managers, we frankly have quite a bit less exposure in California than most of them as a percentage of our total portfolio. We're still on a process of gradually liquidating those properties in California because we are long-term bearish on California outlook.

Speaker #2: Or international crops in the last 12 months. That I don't think that makes some big dramatic improvement in the market for tree nuts or citrus or anything else in California.

Speaker #2: But what it does is, it certainly helps on the cash flow on those assets this year. Our perspective is that, and you know, we've been this way now for several years, and compared to other fund managers, we frankly have quite a bit less exposure in California than most of them.

Speaker #2: As a percentage of our total portfolio. So, you know, we're still in the process of gradually liquidating those properties in California because we are long-term bearish on California's outlook.

Paul Pittman: We're still on a process of gradually liquidating those properties in California because we are long-term bearish on California outlook. We think it's just prudent to cut back our exposure and either use that money to buy back stock or reinvest, frankly, in the core of the Midwest.

Speaker #2: And we think it's just prudent to cut back our exposure and either use that money to buy back stock or reinvest, frankly, in the core of the Midwest.

Paul Pittman: We think it's just prudent to cut back our exposure and either use that money to buy back stock or reinvest, frankly, in the core of the Midwest.

Speaker #4: Okay, I appreciate all that color. That's it for me. Thank you.

John Massocca: Okay. I appreciate all that color. That's it for me. Thank you.

Speaker #1: There are no further questions at this time. I will now turn the call back to Luca for closing remarks.

Operator 4: There are no further questions at this time. I will now turn the call back to Luca for closing remarks.

Operator: There are no further questions at this time. I will now turn the call back to Luca for closing remarks.

Speaker #3: Thank you, Erica. And thank you, everybody. We appreciate your interest in our company and look forward to updating you on our activities and results in the coming quarters.

Luca Fabbri: Thank you, Erica. Thank you everybody. We appreciate your interest in our company and look forward to updating you on our activities and results in the coming quarters. Have a great rest of your day.

Speaker #3: Have a great rest of your day.

Speaker #1: This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded. Thank you for joining Farmland Partners Incorporated Q2 2026 earnings call.

Operator 4: This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded. Thank you for joining Farmland Partners Incorporated Q2 2026 earnings call. The line will disconnect automatically.

Operator: This concludes today's call. Thank you for attending. You may now disconnect. This event has now concluded. Thank you for joining Farmland Partners Incorporated Q2 2026 earnings call. The line will disconnect automatically.

Q2 2026 Farmland Partners Inc Earnings Call

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