Farmland Partners reports solid Q3 2025 performance with special dividend plans, yet signals potential headwinds for next year's earnings.

Jim - Operator - (00:01:42)

Good day everyone and thank you for joining this Farmland Partners Q3 2025 earnings call. My name is Jim and I'll be the operator for today's session. A reminder that all lines have been placed in a muted or listen only mode to reduce background noise and later you will have the opportunity to ask questions. Also a reminder, today's session is being recorded. It is now my pleasure to turn the floor over to our Host, President and CEO, Mr. Luca Fabbri. Please go ahead, sir.

Luca Fabbri - President and CEO - (00:02:11)

Thank you Jim Good morning and welcome to Farmland Partners Third Quarter 2025 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. I will now turn over the call to our General Counsel Christine Garrison for some customary preliminary remarks.

Christine Garrison - General Counsel - (00:02:35)

Thank you, Luca, and thank you. To everyone on the call. The press release announcing our third quarter earnings was distributed after market closed 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 October 30, 2025 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 market. We will also discuss certain non GAAP financial measures including Net Operating Income, FFO, Adjusted FFO, EBITDAre, and Adjusted EBITDAre. 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 third quarter 2025 earnings, which is available on our website farmlandpartners.com and is furnished as an exhibit to our current report on Form 8K dated October 29, 2025. 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 or furnished to the sec. I would now like to turn the call to our Executive Chairman Paul Pittman, Paul.

Paul Pittman - Executive Chairman - (00:04:15)

Thank you, Christine. Good morning everyone. This is again a very strong quarter for us from the standpoint of AFFO performance. I'll let the rest of the team make some more specific comments about that. I want to make a couple of comments though. As you all read overnight, appears to be some sort of a China trade deal involving agriculture, commodities. I think that that's obviously going to be beneficial for American farmers. It's a little unclear. It looks like maybe a one year deal and quite a bit of soybean sales. I tried to find this morning in the news more detail. There doesn't seem to be much. You know, my sense is if you looked back to the last time the Chinese were really aggressive in terms of soybean buying, which is I think the 21 year, the 2021 year. You know, this will be a material bump in the exports of soybeans from the US to China over the next few months. I don't think it's sort of earth shattering in terms of positive for farmers. It's certainly good news. But since it's only a one year deal, it's hard to see whether it'll have a real impact on long term rents or land values. You know, land values continue to go up despite the fact it's been a somewhat tough, you know, tough farm economy for operating farmers this year. The, you know, the other, the other comment I would like to make about this year's AFFO. While we are thrilled with how strong it is, it is, you know, based on some very positive operating events that occurred during the year on some of these farms and also the expansion of our loan program with some, you know, sort of opportunistic lending. The caution I want to give everyone is, is, you know, while we're thrilled with this year, it's based on some one time events. So you know, frankly I think next year will, you know, we'll start out next year with kind of the same place we started this year, which is a sort of more modest aff than what we're actually ending up with. You know, we'll do our best to find the one time events next year that bump that number but you know, you can't promise them since they are one time events. With that I'm going to turn it over to you Luca, to go through things in more detail. Thank you Paul.

Luca Fabbri - President and CEO - (00:06:57)

I will of course echo Paul's both kind of celebration of a very strong financial performance for the quarter and for the year as well as a little bit of a caution note regarding performance next year. As you know, we always strive to do our best to build on top of a very strong bedrock of operating performance, good things every year, but you never know whether we can pull that off. A couple of things that I wanted to highlight for this quarter is number one, the sale of our brokerage and third party farm management subsidiary, Murray Wise Associates. I think this is a very good outcome for our shareholders in terms of getting a good price for this subsidiary for this business, as well as simplifying significantly our operations. And this is very much in line with our strategy of simplification that we've been pursuing now for several years. This is also a very strong outcome for another set of very important stakeholders in the company, which is the employees. I think that this sale gives the team at NWA a very strong platform to continue their professional growth while maintaining our access to their collective knowledge and experience and in our relationship with them because we plan to continue using their services in the future. The second is transaction I want to highlight is that we exchanged $31 million wor of our Series A Preferred units for a set of properties in Illinois that were actually originally part of the transaction that kind of led to the issuance of the Series A Preferred. And I want to highlight that the properties were sold at a much appreciated value compared to the value 10 years ago appreciated by about 56%. This again is a very tangible proof of the appreciation potential in this asset class that we continue to prove to the market and to deliver that, you know, efforts to deliver that value to our shareholders. In that vein, we are also announcing that we are planning to issue a special dividend for this year, which is very much in line with what we did two years ago and last year. This year we are targeting a range of between 18 and 22 cents per share to be issued in January 2026 alongside with the regular dividend. Again, this is very much in line with our commitment to deliver value to our shareholders. And with that I will turn over the call to our CFO Susan Landy, for her overview of the company's financial.

Susan Landy - Chief Financial Officer - (00:10:14)

Susan thank you Luca. I'm going to cover a few items today which include the Summary of the three and nine months ended September 30, 2025, a review of our capital structure, a comparison of year to date revenue, 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 subheader Events and Presentations. First, I will share a few financial metrics that appear on page 2 for the three months ended September 30, 2025, net income was a half a million or zero per share available to common shareholders, which was lower than the same period for 2024, largely due to the recognition of deferred gains from 2023 property dispositions of 2 million versus the current period dispositions resulting in a loss of a half a million. Note that the decrease in disposal gains is partially offset by interest savings associated with our lower average debt balance. AFFO was 2.9 million or $0.07 per weighted average share, which was higher than the same period for 2024. AFFO was positively impacted by significantly lower interest expense as a result of debt reductions, lower property operating costs, and increased interest income due to a higher average balance on loans under the FBI Loan program. For the nine months ended September 30, 2025, net income was 10.4 million or $0.18 per share available to common shareholders, which was higher than the same period for 2024, largely due to net gains on dispositions of 35 properties that occurred in the current year. Significant debt reductions resulting in interest savings as well as increased interest income due to the higher balance under on loans under the FBI loan program. AFFO was 6.5 million or $0.14 per weighted average share, which was higher than the same period for 2024. AFFO was positively impacted by lower property taxes, lower general and administrative expenses, and lower interest expense as a result of significant debt reductions. Next will review some of the operating expenses and other items shown on page 5. Gain on disposition of assets was higher during the nine months ended September 30, 2025 than the same period in 2024 due to the dispositions of 35 properties in 2025 with aggregate consideration of 85.5 million, which resulted in a net gain on sale of 24.5 million compared to a gain of 1.9 million in 2024. The net loss on disposition of assets during the three months ended September 30, 2025 was due to the sale of a West coast property as a result of significant reductions in debt that have occurred since October of 2024. Interest expense decreased 3.2 million for the three months ended September 30, 2025 and 8.4 million for the nine months ended September 30, 2025. In addition, the dispositions resulted in lower property operating expenses and depreciation expense. General and Administrative expenses decreased 0.4 million for the three months ended September 30, 2025, primarily due to the accelerated stock compensation that was recognized during the prior year period. General and administrative expenses decreased 1.7 million for the nine months ended September 30, 2025 compared to the same period in the prior year due to a one time severance expense of 1.4 million plus the accelerated stock based compensation that was recorded in the prior year. Next, moving on to page 12, there are a few capital structure items to point out. Having repaid our lines of credit in full with repayments totaling 23 million in July, we had full undrawn capacity on the lines of credit of approximately 159 million at the end of Q3 2025. We have no debt subject to interest rate resets in 2025 and as a result of our swap, no exposure to variable interest rates. Page 14 breaks down different revenue categories with comments at the bottom to describe the differences between periods. A few points that I'd like to highlight include Fixed farm rent decreased as expected because of the dispositions in Q4 of 2024 and thus far in 2025. Solar, wind and recreation increased primarily due to proceeds from a solar revenue sharing arrangement with the tenant in the first quarter of 2025, but that was also partially offset by dispositions. Management fees and interest income increased primarily due to the increase in loan issuances under the FBI Loan program and finally Direct ops, which is a combination of crop sales, crop insurance and cost of goods sold. Crop sales did increase as a result of higher prices and yield on citrus and avocados as well as sales occurring earlier in 2025 than in 2024. While the cost of goods sold increased due to higher maintenance costs, this increase in cost of goods sold was partially offset by lower impairment on inventory. Page 15 has our updated outlook for 2025. You can find the assumptions listed at the bottom of the page. On the revenue side, changes from the July guidance include an increase in management fees and interest income as a result of the higher loan balance under the FBI Loan program. Increases in variable payments, crop sales and crop insurance as a result of updated outlook on properties with variable rent and properties that we directly operate. The decrease in other items is primarily due to less auction and brokerage revenues as a result of the upcoming sale of Murray Wise and Associates. On the expense side, changes from the July guidance include an increase in impairment related to the current period impairment expense for certain properties on the west coast as a result of updated market information and this was primarily offset by a decrease in property operating and depreciation expenses related to property dispositions. The forecasted range of AFFO is 14.5 million to 16.6 million or $0.32 to $0.36 per share, which is an increase from the prior quarter on both the high and low end of the range. This 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 and A session.

OPERATOR - (00:17:17)

Thank you, Ms. Landy, and thank you, gentlemen to our phone audience. At this time, if you would like to ask a question, simply press the star and the digit 1 on your telephone keypad. Pressing star and 1 will place your line into a queue and I will open your lines individually. Once again, ladies and gentlemen, that is star and one on your telephone keypad. We'll hear first from Rob Stevenson at Janney Montgomery Scott.

Rob Stevenson - Equity Analyst - (00:17:42)

Good morning, guys. Luca or Paul. When does the 23 farm sale and the retirement of the Series A Preferred units close? Is that sometime sooner rather than later in the fourth quarter? Does that extend into early first quarter? How should we be thinking about timing there?

Paul Pittman - Executive Chairman - (00:17:59)

Luca, why don't you handle that question and I'll comment as necessary.

Christine Garrison - General Counsel - (00:18:05)

Christine, I think you have the date. That Transaction will close. December 10th.

Paul Pittman - Executive Chairman - (00:18:10)

Yeah.

Rob Stevenson - Equity Analyst - (00:18:13)

Okay.

Paul Pittman - Executive Chairman - (00:18:13)

The important, the important additional fact there is that we in that negotiation, we were able to agree with the party that we are making the exchange with that we will not have to pay the dividends on that preferred. From I begin, I believe it was from August 1st, maybe September 1st, but we got a little.

Christine Garrison - General Counsel - (00:18:37)

August 1st.

Paul Pittman - Executive Chairman - (00:18:38)

Yeah, August 1st. So we have a little benefit there in terms of not having to pay the dividend as well.

Rob Stevenson - Equity Analyst - (00:18:46)

That's great. And then any additional sales that you guys are expected to complete in the fourth quarter, are you basically done with sales for this year with this 23 farm disposition?

Paul Pittman - Executive Chairman - (00:18:57)

Well, we're sort of. The 23 farm disposition luckily did not count as our 1 of 7 under the tax law, you know, because we're limited to seven transactions a year in most cases. So it didn't count because the way it's done is an exchange. So we, I think we've done maybe five or six transactions so far. We've got a few other small ones in the hopper. Hopefully something else happens between now and the end of the year, but not likely to be on the scale of that 23 farm deal. There'll be, you know, single digit million kind of transactions if something else happens.

Rob Stevenson - Equity Analyst - (00:19:34)

And would that at this point, given that it's small, is that still within. Would be within the special dividend, the range that you guys gave in the.

Paul Pittman - Executive Chairman - (00:19:46)

Yeah, we're likely to stick with that range at this point with, without regard to what happens with one additional acquisition or I mean.

Rob Stevenson - Equity Analyst - (00:19:57)

And then what are you guys planning on doing with the MetLife term loan, one that matures in March?

Paul Pittman - Executive Chairman - (00:20:05)

Luca, you want to handle that?

Luca Fabbri - President and CEO - (00:20:07)

Yeah, we are, we are planning to renew it probably with MetLife themselves or with one of our other lenders.

Rob Stevenson - Equity Analyst - (00:20:17)

And where does pricing today look for you guys relative to the 555 that it's currently costing you?

Luca Fabbri - President and CEO - (00:20:28)

We're still kind of interest rates are kind of moving a little bit and that renewal is not scheduled for another couple of months at least. We are expecting spreads to stay fundamentally consistent.

Rob Stevenson - Equity Analyst - (00:20:43)

Okay, that's helpful. And then you guys raised the guidance. But I think in the, in the commentary talked about the, the guidance decrease for the other items from the sale of Murray Wise. Is that running at somewhere close to a million dollars a quarter? How should we be thinking about how we should be looking at that on a quarterly Runway going forward as we adjust our models, removing Murray Wise from the expense and revenue lines.

Paul Pittman - Executive Chairman - (00:21:15)

Luca, please, please handle that. And it may be more detailed than you can do on this call and we could follow up later. But.

Luca Fabbri - President and CEO - (00:21:24)

Yeah, looking at Susan, she's pulling up some, some numbers.

Susan Landy - Chief Financial Officer - (00:21:28)

So Murray Wise, so the revenues are somewhat lumpy. So there's not really a good answer for that. I mean, it's the nature of auction and brokerage. Right. It's not, it's not going to be a cons usually that's going to be more of a Q4, Q1 type of activity. So looking at, so, you know, I don't know that it's going to have a significant impact on our bottom line overall with that removal. We haven't as far as like more specifics, I'm not sure that I. Yeah.

Luca Fabbri - President and CEO - (00:22:01)

And so let me add to that in terms of the remainder of this year, it's going to be a little noisy, but truly minimal, given that this transaction is expected to close in November 15th. As far as next year is concerned, we were always very cautious in projecting the performance of that business. So with typically revenues only slightly ahead of costs. So overall the impact of the transaction is going to be, relatively speaking, negligible in the context of the overall P and L in 2026.

Rob Stevenson - Equity Analyst - (00:22:38)

Okay. And then last one for me in the, in the detailed assumptions on the outlook, you guys, increased legal and cowling due to increased litigation spend, is that, is that more stuff off the, the Short and distort stuff or is that something else that you guys are litigating at this point?

Paul Pittman - Executive Chairman - (00:23:00)

How should we be thinking about that at future costs? We have, yeah, we have, we continue to have some legal costs related to the short and distort but they're, they're frankly modest certainly compared to where they used to be. And you know, I think we're, we're hopefully getting closer to winning so to speak in that regard. Then we've also got an ongoing legal dispute in Louisiana on one of the farms that has, you know, it's local council so it's not extremely high numbers but it's a number we hadn't budgeted for that were that we're spending defending that situation. That's just, just a small, a small uptick but, but you know, a negative surprise. So wasn't really budgeted for.

Rob Stevenson - Equity Analyst - (00:23:48)

Okay, thanks guys. I appreciate the time this morning.

Paul Pittman - Executive Chairman - (00:23:52)

Thanks Rob.

OPERATOR - (00:23:54)

Once again, ladies and gentlemen, that is star and one on your telephone keypad if you would like to ask a question. We'll hear next from the line of Craig Kucera at Lucid Capital Market Markets.

Craig Kucera - Equity Analyst - (00:24:06)

Yeah. Hey, good morning guys. I wanted to follow up and get a little more color on the Series A Preferred transaction. I, I know they can convert the remaining preferreds into common op units in the first quarter. You know, in their discussions with, with them have they indicated they're looking to convert? I mean just trying to figure out from a share account preferred dividends perspective from a model next year. They it's not that they have the right to convert, it's that we have the right to pay them off or convert them. We will, you know, I won't say 100% but I'll say 99% probability that we just pay that, you know, pay that off and it does not get converted because I believe the stock price it would get converted at is below intrinsic value. So that's on the upcoming conversion. Craig, as far as the transaction itself, you know this is a, a gentleman that we very successful you know, agriculture but also other, other industries guy from Illinois that we bought these farms from, you know, 10 years ago now basically and we've maintained a very good relationship with him. He was a, for, for a time a decent sized common shareholder and then certainly as, as owned as preferred and he's been a, you know, good, good long term partner. He you know, for his own sort of family wealth planning what he wanted to buy back were the farms closest to his traditional family home because you know, 10 years later I think he decided he could, you know, frankly afford to re own them and pass them on to his children. And so he did that. And, you know, that's where the 31 million of farms came from. And as Luca said earlier, you know, great transaction for us. We got it, you know, 5, 5 to 6% a year kind of appreciation during the hold period. You know, and fundamentally, a lot of that transaction was financed with a. With a 3% coupon preferred, which were, you know, which we're now trading him back for those farms. So, you know, huge win for shareholder value in the transaction.

Luca Fabbri - President and CEO - (00:26:15)

Just as a follow up, Craig, of course, we've known that this was coming for a long, long time in terms of the expiration, if you will, of the Series A preferred. So we are very well prepared with our liquidity access through our lines of credit to pay down to extinguish the Series A preferred in cash. Of course, they will have as an impact on the P and L, at least for a while, because we are trading at 3% preferred with the borrowing on lines of credit and now call it, are on at a blended, you know, in the mid fives. But we're prepared to manage that as well.

Craig Kucera - Equity Analyst - (00:26:58)

Okay, I appreciate that. Color. That's helpful. Changing gears, there's a mention there, obviously crop sales were significantly better than we were looking for. And in the footnote, it references the sale of a walnut property, which accelerated some recognition of revenue and expenses. Can you give us some color on how much that impacted crop sales, revenue, and the cost of goods this quarter? Susan, you want to handle that one?

Susan Landy - Chief Financial Officer - (00:27:25)

Yeah, bear with me for a minute while I pull the figures.

Paul Pittman - Executive Chairman - (00:27:30)

While she's pulling the figures, I'll make a general comment. You know, basically, when you sell off a farm like that that has inventory on the trees, you do a transaction related to that inventory, and so it gets done more quickly than it would have been if it had actually waited around to pick the walnuts. I mean, that's the big picture on the ground reason it was accelerated. Susan, you can make financial comments as appropriate.

Susan Landy - Chief Financial Officer - (00:28:01)

So we recognized about $0.2 million on the sale of the Blue Heron, our property in California, the Walnut property.

Craig Kucera - Equity Analyst - (00:28:14)

Okay, so not that material.

Susan Landy - Chief Financial Officer - (00:28:17)

It's for the accelerated portion.

Craig Kucera - Equity Analyst - (00:28:20)

Yeah. Okay, that's helpful. And just one more for me. You know, looking at the guidance, one. Of the main increases in revenue is related to management fees and interest income. It doesn't look like you funded any loans on a net basis here in the third quarter. Does that imply you were seeing a pickup in the loan Pipeline expected to close in fourth quarter or maybe something. That you thought was going to pay off, didn't pay off.

Paul Pittman - Executive Chairman - (00:28:41)

Just some color there would be helpful. Yeah, it's really the second thing that you said. Somebody, somebody came to us and said we'd like to continue to extend this loan. You know, subject to us having a strong security position and being comfortable with the loan, we're almost always willing to do that because we are a high cost lender and as long as we're comfortable with the security position, we're happy to keep making the money. So we extended somebody out and that led to the move of the projections. Okay, that's it for me. Thank you, ladies and gentlemen.

OPERATOR - (00:29:20)

That's Star and One. If you would like to ask a question, we'll move forward to John Masoka at B. Riley Securities.

John Masoka - Equity Analyst - (00:29:28)

Good morning. Maybe kind of continuing with the line of questions about the loan portfolio.

Paul Pittman - Executive Chairman - (00:29:34)

Are you expecting or are there significant kind of maturities upcoming in kind of the loan receivables in 2026? Well, we, you know, as we have, we've mentioned this in prior conference calls, so I'll mention it again. You know, we are gradually shrinking the portfolio because it's, you know, we're arbitraging private market value to, you know, against public market discount and you know, through stock buybacks or special dividends, distributing that cash back to our shareholders or that profit back to our shareholders. So in that process, obviously we're shrinking the revenue line of the company. And so we've focused on expanding this loan program a little bit because it's high current yield. Right? You don't, you don't get the appreciation, but you get quite a bit of high current yield from doing that. And so we've, we've done that, you know, we've done that intentionally and we'll kind of continue to do it because as we shrink portfolio size, we still have to frankly cover the overheads and that, and that loan program helps us do that. So that's, you know, so we're so pretty intentional about actually expanding that loan program gradually as time moves on. You know, we don't want to take on too much risk, of course, but with loans with good assets underneath, I'm happy to do it. Okay, enemy switching gears a little bit. Like bigger picture, what's the exposure in the portfolio either by acreage or rent or however you want to measure it, to soybean farms and farmers? Well, that, so, so when you look in the Corn belt, you know, which is now, with the exception of California the overwhelming majority of what we own, meaning Illinois mostly, a little bit in Missouri. Those farms are, generally speaking, on a, every other year rotation between corn and soybeans. So the quick answer would be approximately 50%. Now, corn is consistent for the farmer. Corn is a consistently more profitable crop. And so it's really not 50, 50. It's probably more like 60% corn in any given year, 40% soybeans, because most of those row crop corn, soybean farmers will occasionally do corn on corn to increase the percentage of corn acres they have. It just, it's an overall revenue and profitability, a slightly more profitable crop in nine out of 10 years. So, you know, if they can get away with it, they'll do corn two years in a row in some fields. So it shifts that, it shifts it from the 5050 to something slightly more weighted to corn.

Luca Fabbri - President and CEO - (00:32:30)

I know that you are, John, I know you are very familiar with the concept I'm about to explain. So I'm saying this more for the benefit of other listeners. The, the, I think the 100% of our row crop leases with farmers that would farm soybeans are fixed cash rents. So our exposure to soybean, especially trade wars and so on and so forth, is very much indirect, is not through crop shares and so on and so forth, is through the overall financial health and strength of the farmers, which is in any case backed by crop insurance.

John Masoka - Equity Analyst - (00:33:10)

Okay. But as we think about kind of maybe the exposure to any distress in that space or any kind of recovery. In that space, it really touches on.

Paul Pittman - Executive Chairman - (00:33:20)

Pretty much everything, you know, from a commodity crop basis in your row crop portfolio. Just because they are potentially rotating that planting in a given year. Yeah, it's actually, it's actually so, you know, what Lucas said is an incredibly important point. We have no direct exposure to speak of to soybean prices, but we have significant indirect exposure to farmer profitability. And soybean prices are a piece of that. But it's not really a story about soybeans. It's a story about farmer profitability. And so if the Chinese re. Enter the market and the Chinese are the world's largest consumer of soybeans, that will be good for US Farmers. Now, it's not, it's not as good as you might think. However, and I've said this in other conference calls, the, if the, if the Chinese are buying all their soybeans from Brazil, somebody else used to be buying from Brazil. That shifted to buying from the US So the negative impacts of what China does vis a vis the US share of our exports, it mutes it because other buyers come back into the market to replace the soybean. So that got pushed out. And then the flip side is also true. They start buying here, it'll modestly elevate pricing, but it's going to shift away. You know, they're just not. There's a kind of a defined universe of soybeans in the world and you're really kind of moving the shells around on the, on the board, not fundamentally making massive changes in overall demand on the margin. Don't get me wrong, when the Chinese stop buying from the US that is marginally bad. And when they start buying from the US it is marginal good because they're such a power in the marketplace. But it's not massive dramatic shift. The other thing is, and that's why I said it's about profitability, not about soybeans per se. If soybeans become more profitable to farm, the corn market through the, you know, through the Chicago Board of Trade basically has to buy corn acres by increasing the profitability of corn farming. You know, it's econ 101. And so, so, you know, because it's, those two crops are competing for the land base in the Midwest. And so soybean prices go up, it'll move corn prices up. Corn prices go up and move soybean prices up. So again, this is all a good thing. But you know, the story for, for us and our company is always this global food demand just keeps gradually increasing. And you know, global demand for the commodity, for the products made from corn and soybeans in particular just keeps increasing, whether it's ethanol or food. And there is a scarce and gradually declining land base of the really high quality soils. And we own a lot of it. And that's why you see, you know, back to the transaction we did with the preferred. That's why you see this kind of 5 to 6% per annum appreciation of those farms and it kind of goes on no matter what because it's, it's not connected to soybean price. It's connected to long term farmer profitability and the, and you cannot turn the world's breadbasket to negative margin for very long. Don't, don't believe everything you read in the press. There's not much farmer bankruptcy by the way, as an example. It just isn't the detail on that. Just one last one apologies. Maybe I missed it earlier in the call on the buyback. I understand it's not in the updated guidance, but any more Runway for buyback in 4Q and maybe even heading into 2026, just off the back of kind of capital raised to dispositions done earlier in the year. Luke, I'll let you handle that.

Luca Fabbri - President and CEO - (00:37:34)

Yeah. So our decisions on buybacks is something that we do on an ongoing basis. If wheel we still see the current stock price and the discount to nav as being a very, very strong proposition for buybacks. It's our own stock, as we unfortunately joke, is the cheapest farmland we can buy. But with the expiration of the series A preferred and rolling debt into the lines of credit, we are increasing our interest expense. So that also comes into the equ. Fundamentally, our buyback activity going forward will be driven as usual by potential additional dispositions and therefore proceeds from those dispositions. And you know, if we wear knocking on wood, we're working to, to increase our stock price, of course, but if we were to see the stock price dip, we would definitely jump in and probably and use our further access to lines of credit to do a harvested opportunity.

Paul Pittman - Executive Chairman - (00:38:44)

Yeah, And I appreciate that. Yes. Let me just add one thing to that. I mean, if you, if you think about this as really distribution of cash to shareholders, I mean, that's what the buy, what a buyback fundamentally is. And obviously we try to manage it against low stock price versus higher, higher stock price. You know, with the, with the idea that an upcoming special dividend is coming, we're going to trade probably at a slight elevated basis for the next few months. So it sort of lessens the probability of buybacks. And the flip side, and in addition to that, you know, during this time of year, our methodology of getting money that out to shareholders based on the profits that we've made from sales. The way to do that, the special, this is a special dividend and you get out in the rest of the year. The way to do that is the buyback. And so you know this at this particular time and for all the reasons Luca said, plus that sort of general view that, that you know, not likely to be doing a lot of buybacks right on top of the special dividend, you know, I don't think there'll be a lot of that in the next quarter. But as Lucas said, if you saw the stock price decline substantially, you know, we probably step into the market. I appreciate all that color. That's it for me. Thank you.

OPERATOR - (00:40:03)

Our next question today will come from the line of Towsley Hyde at Raymond James.

Towsley Hyde - (00:40:08)

Hey guys, thanks for taking my question. Just got a quick one here. In the past you mentioned that the long term average Rate increases somewhere around 3 to 4%. I was just kind of curious as.

Paul Pittman - Executive Chairman - (00:40:18)

You pare down the portfolio, how that average might skew going forward, if at all. It'll, it'll stay consistent that, you know, these averages are largely, the nationwide averages are largely dominated frankly by row crop Midwest because that's the biggest piece of the farmland economy. You know, overall, California's, California especially crop and total economic impact, you know, to the nation is probably somewhat similar, but much lumpier because it's, it's different crops and every crop has its own cycle. So, you know, as our portfolio gets more and more weighted to the Midwest, it probably, you know, sticks closer to those kinds of averages rather than farther apart.

Towsley Hyde - (00:41:11)

Got it.

Paul Pittman - Executive Chairman - (00:41:12)

Okay, that's helpful. Thanks for that. And do you have any updates you can share on the renewal progress for this year? Yeah, you know, this is a year in which these renewals are largely done by now, you know, because you're prepping the soils in many cases, you know, for next year's crop already. So the renewals are, you know, kind of pretty much behind us or being finished as we speak. Looks, looks to us like in the row crop region of the country where we, where we have rollovers, it'll be more or less flat with last year, which is, you know, last few years we've been getting great big rent increases. We won't get those this year. You know, we, what we do though, when we're in a cycle where you're negotiating those rents in a somewhat tough economic cycle for the farmers, we just cut them. We cut the negotiations of the new rent, new lease to a one year extension. That way what we're not doing is signing up in a difficult economic negotiating cycle for another three year lease. We just extend it out one year and then, and you know, this China news, for example, probably is going to make the negotiation cycle that starts late next summer easier than it was this year. Easier meaning higher rents are possible. Got it.

Towsley Hyde - (00:42:39)

Makes sense. I appreciate it. That's all I got.

OPERATOR - (00:42:44)

That was our final question in the queue today. Mr. Fabbri. I'm happy to turn it back to you, sir, for any additional or closing remarks.

Jim - Operator - (00:42:52)

Thank you, Jim.

Luca Fabbri - President and CEO - (00:42:53)

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.

OPERATOR - (00:43:02)

This does conclude today's Farmland Partners Inc. Conference call. We thank you all for your participation and you may now disconnect your lines.

UNKNOWN - (00:44:33)

R.A.