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>>> Wheat Sinks to Pre-War Levels as Recession Fears Grow
Chicago corn tumbles to a five-month low as US acres expand
Soybeans fall as much as 4.6% in spite of smaller US acreage
Bloomberg
By Kim Chipman and Michael Hirtzer
7-1-22
https://www.bloomberg.com/news/articles/2022-07-01/food-inflation-gets-a-break-as-wheat-corn-and-soy-oil-tumble
Crop futures sank in the US, with wheat closing the week at levels not seen since before Russia’s invasion of Ukraine, as concern mounts that a global economic slump might hobble demand for farm commodities.
The worry hits as anxiety about possible grain shortages is easing. Two key reports from the US Department of Agriculture on Thursday indicated bigger-than-expected grain supplies.
Even as uncertainty persists over how the ongoing war will impact exports, nervousness is growing that a recession could crimp crop demand. Futures are down from near-record highs, which could help pause the food inflation that escalated earlier this year. In the nearer term, traders on Friday were busy positioning ahead of the three-day holiday weekend in the US.
“Buyers are not to be found right now,” said Arlan Suderman, chief commodities economist at StoneX. “It’s all about trading chart signals and momentum. Nobody wants to step in front of this freight train.”
Even soybeans plummeted, despite the USDA estimating smaller acreage than initially expected. The seedings still would be the third-biggest on record if realized.
Grains, oilseeds extend declines in signal of food-inflation relief
Most-active benchmark wheat settled down 4.9% to $8.41 a bushel in Chicago, the lowest since Feb. 18, a few days before the invasion upended commodity markets. The futures jumped to an all-time intraday high of $13.635 a bushel in early March, spurring food cost spikes, grain hoarding and widespread fear of severe supply shortages.
Both corn and soybeans ended the trading day at their lowest levels since late January, as did the soybean oil relied on for processing food and making climate-friendly diesel. Soy meal, used to help feed hogs and chickens, plunged 4.1%, the biggest drop in almost a year.
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>>> Why Farmers Are Turning Away From Organic Milk Despite Popularity
MSN.com
by Michelle Welsch
June 2022
https://www.msn.com/en-us/health/nutrition/why-farmers-are-turning-away-from-organic-milk-despite-popularity/ar-AAYRCJa?cvid=0efedb85094b44b7963cf2c05c909ed4
The pandemic ushered in demand for organic milk among American consumers and provided an incentive to dairy farmers worldwide, per VTDigger. In 2021, organic dairy production reached a record $22 billion in global market value, according to Statista, and this figure is only expected to grow. Yet the challenges farmers face in running successful businesses are many, and some entrepreneurs are calling it quits, reports William Reed's Food Navigator.
After analyzing more than a decade of data collected from Vermont dairies, agricultural researchers pinpointed several major contributors to whether a farm would become profitable: farm size, feeding and farm management, milk price, and input costs. According to a paper published on Sustainable Farming, organic dairy farms have the potential to do better financially than conventional dairy producers. So what's the problem?
Maine Organic Farmers and Gardeners record that in 2003, more than 90% of farms transitioned out of the organic category for economic reasons. And many organic dairy farmers resorted to non-dairy farming activities to support themselves -- 43% reported off-farm income streams. As documented by Time, small farms are struggling to stay afloat.
A Risky Endeavor
"Farmers are facing steeply rising input costs due to global politics and economic conditions, climate variation and weather events, and farm improvement investments that are required, necessary, or both," writes NOFA-VT Director Jen Miller on NODPA. The Australian Farm Business Management Journal echoes similar challenges for farmers throughout the European Union.
NODPA, the Massachusetts-based nonprofit, lists feed as farmers' biggest expense. For an organic dairy farm to succeed, explains eOrganic, the cows must be fed quality foods. These could be organic-certified fields set aside for grazing or quality forage that provide the nutrition cattle need to stay healthy and meet supply demands. The cowscan't be fed anything genetically modified for one year before a farm is organically certified, and it's not only the feed — the land on which livestock live must also qualify, per Darigold. No chemicals, pesticides, or herbicides can be used for three years before and after land certification.
American dairy farmer Cornell Kasbergen told LiveKindly, "You're better off putting your money into trees... almonds, pistachios, grapes. There are a lot of alternatives that provide a higher return than milking cows."
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>>> EU Aims to Halve Pesticide Use by 2030 Under Green Food Plan
Bloomberg
by Lyubov Pronina and Áine Quinn
June 22, 2022
https://www.yahoo.com/now/eu-aims-require-halving-pesticide-184723605.html
(Bloomberg) -- The European Union is sticking with a plan to halve the use of the pesticides by 2030 even as agriculture comes under pressure from shortages sparked by Russia’s tactics in its war against Ukraine.
The European Commission on Wednesday proposed to use legally binding targets to reach its plan, which stops short of an overall ban on pesticides and focuses instead on organic products and other alternatives. The plan would prohibit using pesticides in public spaces and around facilities like schools and hospitals.
“We will replace chemical pesticides with safe alternatives,” Health Commissioner Stella Kyriakides said. “Farmers will be fully supported with unprecedented EU funding possibilities to cover the cost of the transition.”
It’s the first legislation to come out of EU’s sustainable food plan aimed at reducing agriculture’s environmental impact, and the new rules would take into account the historic progress and national pesticide use of each member state when it comes to setting national targets. The cost of the transition to new rules for farmers will be covered by the bloc for at least five years under the Common Agricultural Policy, according to the plan from the EU’s executive arm.
Governments are grappling with food prices near record highs as the war in Ukraine has disrupted trade, fueling hunger and worsening a cost-of-living crisis. The EU had delayed the pesticides directive, which was due in the first quarter. It will have to be approved by the European Parliament and member states before it comes into effect and could still be changed or weakened during the debate.
Pests and diseases reduce crop yields by 20% to 40% globally, according to CABI, a UK-based nonprofit that researches agriculture. But as insects become more resistant to pesticides, farmers use more chemicals, raising concerns about the impact on wildlife and human health. In the EU, 50% of land cultivated with crops dependent on pollinators already face a pollination deficit, according to the commission.
The US Environmental Protection Agency recently said that some commonly used insecticides are likely harmful to thousands of endangered animals and plants, while Bayer AG’s weedkiller Roundup is the subject of tens of thousands of lawsuits alleging it causes cancer, which the company denies.
Requirements to reduce fertilizer and pesticide use could cut EU wheat yields by about 15% by 2030, and flip the bloc into a net grain importer, Philippe Mitko, the president of Coceral, an association representing the agriculture trade, said last year.
EU officials have said the changes are ambitious, but they will be gradual and feasible. The bloc will provide guidance, training and support, but it will be up to the member states to set their national targets and implement them.
The plan won’t put the continent’s food production at risk, the officials insisted, noting there is no alternative to acting since the decline of pollinators caused by pesticides is a serious threat to food supplies in the longer term.
Separately, the commission adopted proposals to restore damaged ecosystems such as wetlands, rivers, forests and urban environments, by 2050 to prevent the worst impacts of climate change and biodiversity loss. The aim is to cover at least 20% of the bloc’s land and sea areas by 2030.
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>>> Why Scotts Miracle-Gro Stock Is Wilting Today
Motley Fool
By Howard Smith
Jun 8, 2022
https://www.fool.com/investing/2022/06/08/why-scotts-miracle-gro-stock-is-wilting-today/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Lower sales of higher-priced and high-margin products are pressuring overall results.
Scotts Miracle-Gro cut its sales and earnings guidance for the year, despite strong consumer retail sales.
What happened
Last month, lawn and garden care giant Scotts Miracle-Gro (SMG -0.99%) announced record fiscal second-quarter sales in its U.S. consumer segment. But today the company said that while consumer transactions of its core lawn and garden brands surged in May, the product mix has forced the company to reset expectations for the fiscal year. The news caused the stock to tank as much as 12% today. Scotts Miracle-Gro shares were still lower by 10% as of 1:13 p.m. ET.
So what
Management said its sales for fiscal 2022 won't meet previously announced projections for matching 2021 levels, "due primarily to above average declines in lawn fertilizer and grass seed, which command higher prices and margins but also tend to be more susceptible to poor spring weather."
Now what
The month of May helped Scotts close the gap in point-of-sales (POS) data versus the prior-year period. By the end of May, the year-over-year drop in POS was 6% in absolute dollars and 9% in units. But prior to the May results, those declines were double those levels. The improvement came thanks to strong results in all of its major markets in the Midwest and Northeast.
Due to the product mix, however, the company said it was disappointed with the level of replenishment orders sales. Additionally, due to rising commodity costs partly related to the war in Ukraine, the company expects adjusted earnings for the fiscal year of between $4.50 to $5 per share, well below its previous target of $8 per share. Investors weren't happy with the drastic change in such a short time, and the stock is reflecting that today.
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Farmland Partners - >>> 838-Acre Nebraska Farm Added to Farmland Partners Portfolio
BusinessWire
June 2, 2022
https://finance.yahoo.com/news/838-acre-nebraska-farm-added-111000124.html
DENVER, June 02, 2022--(BUSINESS WIRE)--Farmland Partners Inc. (NYSE: FPI) (the "Company" or "FPI") on Wednesday completed its seventh farm acquisition of the year when it purchased 838 acres of Nebraska farmland for $11.6 million.
The row crop farm is the Company’s first in Hamilton County, which sits in the middle of a fertile seed corn production area and is known for good soils and water availability. The farm consists of nine individual tracts with several improvements, including irrigation, a grain storage system, and ample equipment storage. The acquisition also encompassed a house, office building, and heated shop.
"This is a turn-key operation and is among the nicest properties in our portfolio," said FPI Chairman and CEO Paul Pittman. "We have an excellent tenant in place and are looking forward to a bright future in Hamilton County."
FPI now owns 31 farms in Nebraska, spanning 7,216 acres. It is the nation’s largest publicly traded farmland REIT by U.S. acreage.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owns and/or manages nearly 185,000 acres in 18 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Carolina, South Carolina, and Virginia. We have approximately 26 crop types and more than 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.
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>>> Corteva, Inc. (CTVA) operates in the agriculture business. It operates through two segments, Seed and Crop Protection.
The Seed segment develops and supplies advanced germplasm and traits that produce optimum yield for farms. It offers trait technologies that enhance resistance to weather, disease, insects, and herbicides used to control weeds, as well as food and nutritional characteristics. This segment also provides digital solutions that assist farmer decision-making with a view to optimize product selection, and maximize yield and profitability.
The Crop Protection segment offers products that protect against weeds, insects and other pests, and diseases, as well as enhances crop health above and below ground through nitrogen management and seed-applied technologies. This segment provides herbicides, insecticides, nitrogen stabilizers, and pasture and range management herbicides. It serves agricultural input industry.
The company operates in the United States, Canada, Latin America, the Asia Pacific, Europe, the Middle East, and Africa. Corteva, Inc. was incorporated in 2018 and is headquartered in Indianapolis, Indiana. (Dupont)
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>>> Farmland Partners Buys Illinois Farm, Sells Farm in South Dakota
BusinessWire
May 27, 2022
https://finance.yahoo.com/news/farmland-partners-buys-illinois-farm-111000192.html
DENVER, May 27, 2022--(BUSINESS WIRE)--Farmland Partners Inc. (NYSE: FPI) (the "Company" or "FPI") today announced it closed two transactions this week – an acquisition in Illinois and a disposition in South Dakota.
The 78.5-acre row crop farm in Illinois was purchased on Tuesday for $685,000. It is the Company’s first acquisition in Will County, which is in the northeastern part of the state and sits in the Chicago Metropolitan Statistical Area, as designated by the U.S. Census Bureau.
On Wednesday, FPI sold 1,690 acres of South Dakota farmland for $7.8 million to the farmer who was renting the land. The transaction resulted in an approximately 16% gain for the Company.
"We are often willing to sell farmland at a fair price to good tenants as a way to help them grow and improve their businesses," said FPI Chairman and CEO Paul Pittman. "Even with this sale, the Company continues to be in growth mode, and we are actively seeking new acquisition targets. The recent purchase in Illinois is a prime example of the kind of asset we’re looking for – it’s a productive farm strategically located near marketing hubs and a vibrant tenant base."
FPI is the nation’s largest publicly traded farmland REIT by U.S. acreage.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owns and/or manages approximately 184,000 acres in 18 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Carolina, South Carolina, and Virginia. We have approximately 26 crop types and more than 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.
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>>> ETFs For A Global Food Catastrophe
ETF.com
by Heather Bell
May 23, 2022
https://finance.yahoo.com/news/etfs-global-food-catastrophe-191500987.html
A global food crisis may be coming, but some ETFs can help successfully navigate the potential fallout.
Russia’s invasion of Ukraine has rattled the world in more ways than one with troubling issues of violence and human rights abuses.
But from a global perspective, Russia and Ukraine are also key sources of agricultural products, and the disruption is having major consequences in terms of food supply and inflation.
Consider that, together, Ukraine and Russia account for 12% of traded calories, including 28% of wheat, 29% of barley, 15% of corn and 75% of sunflower oil, according to an article in The Economist. The disruption to the global food supply is also likely driving inflation.
The Economist article also notes that increased food costs have driven food insecurity up, from affecting 440 million people to affecting 1.6 billion, and it says 250 million are literally on the brink of famine. That suggests food inflation isn’t going anywhere. Hedging away at least part of the threat that food inflation represents to an investor’s personal wealth could be a matter of finding the right ETF.
Equity ETFs To Consider
The simplest way is to find a long-only equity strategy, and there are a few choices in this area, the largest being the $2 billion VanEck Agribusiness ETF (MOO). There’s also the $297 million iShares MSCI Global Agriculture Producers ETF (VEGI) and the $293 million Invesco Dynamic Food & Beverage ETF (PBJ).
MOO comes with an expense ratio of 0.56%, while VEGI charges 0.39%. PBJ is the most expensive, at 0.63%. MOO’s daily average dollar volume at $39.5 million is roughly five times that of VEGI’s. The former is older and more established, having launched in mid-2007, while VEGI rolled out in early 2012. PBJ is the oldest fund, having launched in mid-2005; its average daily dollar volume is $9.28 million.
But MOO has just 56 holdings versus VEGI’s 143. Both have weightings to the U.S. that are close to 60% (58.75% for VEGI and 60.39% for MOO). Canada and Norway claim the Nos. 2 and 3 spots, respectively, for VEGI at 9.39% and 5.42%. Meanwhile, MOO weights Germany at 9.61% and Canada at 6.43%. Whereas Norway has a 5.31% weighting in MOO and is its fourth-largest country, VEGI doesn’t even include Germany in its top 10 countries. PBJ is an exclusively U.S. fund, with just 31 holdings.
Digging into the underlying sectors for these funds shows that process industries is the largest sector, based on the Thomson Reuters classification system, for both MOO and VEGI, with the former weighting the sector at 47% and the latter weighting it at 61%. Process Industries has a weight of 11% in PBJ and is its third-largest sector.
MOO and VEGI have 33 holdings in common but have only five to six in common with PBJ. Among the top 10 holdings of both MOO and VEGI are Deere & Co., Nutrien Ltd., Archer-Daniels-Midland Co., Corteva Inc. and Mosaic Co. Of those, PBJ only includes Archer-Daniels-Midland in its top 10 holdings.
If you look at the factor exposures of the three equity funds, there’s a certain amount of similarity among the leading factors. The top three factor exposures for MOO are momentum at 0.69, low size at 0.22 and low volatility at 0.14. For VEGI, the top three exposures are momentum at 0.88, low size at 0.33 and value at 0.13. PBJ’s top three factor exposures are low size at 0.94, low volatility at 0.89 and momentum at 0.57.
Ultimately, MOO and VEGI represent the production end of the food chain, while PBJ’s holdings more strongly resemble a list of products you’d find in a U.S grocery store.
The global nature of the potential food crisis seems to call for a globally oriented investment product, but PBJ’s domestic focus may also be a way to more directly hedge the impact of inflation on a U.S. investor’s personal consumption. Food inflation in the U.S. was at 9.4%, while the overall CPI was at 8.3%. Both numbers are highs not seen since the early 1980s.
A Commodity ETF Possibility
If you want to get to the roots of what’s going on with rising food prices though, the commodity market may be the way to go. However, commodity futures tend to be volatile, with roll costs and additional tax implications.
The commodity market in general has been on fire, as Russia in particular is a source of many nonagricultural commodities. With the country now excluded from a wide range of markets at the global level, commodities have gotten a major boost. But the biggest bump could ultimately come from agriculture.
The $2.4 billion Invesco DB Agriculture Fund (DBA) comes with an expense ratio of 0.93%, making it significantly more expensive than the equity funds mentioned in this article. Its average daily dollar volume is also significantly higher than that of MOO, at more than $64 million.
There are a number of futures-based agricultural commodity products available, but with 10 separate futures contracts covered, DBA takes the most comprehensive view of the space. Its list of futures contracts includes corn, soybeans, wheat, Kansas City wheat, sugar, cocoa, coffee, cotton, live cattle, feeder cattle and lean hogs.
Performance
Among these four funds, the performance has been somewhat scattered; however, all four have seen significant year-to-date inflows.
DBA has pulled in $1.2 billion in less than five months, while MOO has pulled in $791.8 million and VEGI gained $218.8 million. PBJ took in $195.2 million.
And it’s really DBA that has had the best performance, with a gain of 13.26% year to date and a gain of 22.35% over the past 12 months. VEGI was trailing behind, with a YTD return of 8.77% and a 12-month return of 9.88% during two periods when the broader global equity market was sharply down.
PBJ’s focus on solely the U.S. and MOO’s smaller component list may have put dampers on performance, while VEGI has benefited from its broader range of holdings that still overlaps quite a bit with MOO’s component list (holdings in common with MOO represent almost a quarter of VEGI’s portfolio). PBJ is down nearly 2% year to date and is up less than 5% over the one-year period, while MOO has returned 0.92% and 5.27% for those periods, respectively.
Final Thoughts
VEGI seems like a strong choice for an investor who wants to alleviate the impact of the potential coming global food scarcity issues on their own portfolio or lifestyle.
While DBA is a clear winner in terms of recent performance and focuses on the raw materials of food products, it is still a commodity futures fund, with all the issues that come with that type of product. MOO is certainly the stalwart in the space, but its recent performance, narrower portfolio and higher expense ratio make it a close second to VEGI.
PBJ would be great if you wanted specific exposure to U.S. food and beverage consumption, but given this is a global trend, it seems like it is best captured by a product that focuses on the early stages of the food supply chain at the global level.
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LAND, FPI - >>> Believe It or Not, This is Actually a Great Real Estate Investment
Motley Fool
By Margaret Jackson
May 6, 2022
https://www.fool.com/investing/2022/05/06/believe-it-or-not-this-is-actually-a-great-real-es/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Investing in farmland can offer attractive returns for real estate investors who are looking to make passive income.
Investors who don't want to put all their eggs in one basket might consider diversifying their portfolios by investing in farmland.
You can own farmland by investing in a real estate investment trust (REIT) or through a crowdfunding platform. Both are vehicles that let everyday people and accredited investors own a piece of Americana -- and potentially reap the profits of what they've sown.
Farmland assets have outperformed the stock market for decades, returning an average annual return of 12.6%, compared to the S&P 500 average of 11.1%.
Of the roughly 911 million acres of farmland in the United States, about 283 million acres, or 30%, is owned by non-operator landlords looking to capitalize on the investment opportunity without actually farming, according to the U.S. Department of Agriculture.
Rising food prices could make farmland an attractive investment if you're looking for diversity in your portfolio.
Over time, farmland returns on investment have been consistently positive since 1991 compared with the value of gold or the stock market, which can rise or fall by up to 50% in a single year.
Farm out the work to REITs
Real estate investment trusts (REITs) are created to own and operate real estate. As its name implies, a farmland REIT invests in farms. Just as with any other type of REIT, a farmland REIT takes care of the management, and investors receive dividends.
Gladstone Land Corporation (LAND 1.90%) owns 164 farms in 15 states, totaling about 113,000 acres. The REIT's farms are 100% leased to 85 tenants and growing more than 60 different types of crops.
Gladstone, which has a history of steadily growing its dividend, focuses on buying high-value farmland that generates above-average revenue and profits. It looks for properties with an adequate, clean water supply; fertile, nutrient-rich soil; and good weather with long growing seasons in established markets.
Since its IPO in 2013, Gladstone has made 108 consecutive monthly cash distributions, increasing the rate 25 times for a total of 51%.
While Gladstone's stock price declined 0.53% over the past month (try 45%!), it's up 81.96% over the last year.
Denver-based Farmland Partners (FPI 1.56%), the biggest of the farmland REITs, buys high-quality farmland throughout North America. It owns about 160,000 acres in 17 states that are farmed by more than 100 tenants who grow 26 major commercial crops. Farmland Partners also manages 26,000 acres.
While the REIT has a troubled past, its portfolio of high-quality farmland and strong balance sheet with 60% equity and $40% debt -- a good mix for quality farmland -- could make it ripe for the picking.
Farmland Partners stock is up about 12% in the last month and about 27% in the last year. The REIT's operating revenue increased to $13.89 million during the first quarter, up from $11.58 million during the same period a year ago.
Farmland crowdfunding platforms
AcreTrader gives accredited investors access to farmland. Most of the crowdfunding platform's offerings require an investor to purchase 10 shares, equivalent to 1 acre of land, which typically costs $3,000 to $10,000 an acre.
AcreTrader distributes excess annual income to its investors and generally expects a yield of up to 5% for lower-risk properties -- in addition to the expected annual appreciation of the property.
Taking value appreciation into account, AcreTrader shoots for an internal rate of return of 7% to 9%, compared to a historical IRR of 12% because of depressed commodity prices and the platform's conservative underwriting.
AcreTrader investors generally sell their ownership in five to 10 years. When the property is sold, they get their principal and any appreciation realized over the hold period.
If you invested $10,000 in 1991, it would be worth $215,800 today.
AcreTrader says, "with a growing global population and shrinking U.S. farmland acreage, the laws of supply and demand are clearly in favor of farmland investing." If you're looking for a new form of real estate investing that doesn't involve excessive property maintenance or hands-on work, investing in farmland may be an attractive and lucrative option.
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>>> Bunge prepares for renewable diesel demand
World-Grain.com
05.23.2022
By Susan Reidy
https://www.world-grain.com/articles/16940-bunge-prepares-for-renewable-diesel-demand
NEW YORK CITY, NEW YORK, US — With the renewable diesel market expected to soar, Bunge is positioning itself to be at the forefront of feedstock supply and innovation.
“We're the largest global oilseed crusher,” said Greg Heckman, Bunge chief executive officer and director during a May 18 presentation during the BMO Capital Markets Global Farm to Market Conference in New York. “We need to lead like an industry leader and have the origination and the distribution capabilities to support that and then really lean into our platforms around specialty fats and oils, our growing plant proteins business and then, of course, renewable feedstocks.
Heckman said he’s glad the company did the heavy lifting early on, especially given world events the last two years. The beginning of Bunge’s turnaround started three years ago with a trade war, then African swine fever, the COVID-19 pandemic and now the war in Ukraine and inflation.
“I think it says something about the resilience of the global footprint of Bunge and we’ve put in place from an operating model and a team to be able to perform in all of those while continuing to improve the asset base,” he said. “There's no doubt the cycles will always go up and down in these industries, but what we're going to make sure is that we can perform as well or better than anyone regardless of the cycle.”
Bunge’s future projects span all four platforms, Heckman said. With demand expected to increase for renewable diesel, Bunge will add crush on both soy and softseeds. It’s also working on improving origination and the distribution of meals and oils.
“There’s going to be a lot of dislocation as the oil markets adjusts to renewable diesel demand in the US,” Heckman said. “And being basic in all oils is shifting those global flows. That'll be a real opportunity for us.”
As the largest global oilseed crusher, Bunge has had the benefit of talking with all the energy companies.
“The one thing that is absolutely certain is that they see renewable feedstocks and vegetable oil as one of the levers that they can pull in the transition to a lower carbon business over the next 10 to 15 years in liquid fuels,” Heckman said. “They’re making investments in assets, and it’s gaining momentum.”
Heckman said the more Bunge learns about it, the more respect it has for renewable diesel.
“We’re excited to have a great partner like Chevron,” he said. “It’s really opened our eyes to have that kind of partnership.”
The joint venture, which closed at the beginning of May, aims to establish a reliable supply chain from farmer to fueling station.
“We're excited about where that relationship can go and things that we'll begin to look to do maybe other places in the globe,” Heckman said.
Another exciting aspect of renewable feedstocks, he said, is that it’s not even clear what all the products and services are going to be.
“We’re doing things now on CoverCress and developing that. I think we’re going to see a number of other things where this demand is going to be in place and sustained, and long-lived capital will be willing to go to work,” Heckman said. “Part of the demand will be solved by seed technology, some of it by expanding current industry.”
It’s going to take a little bit of everything to meet the feedstock demands for vegetable oil.
“We’re going to add capacity in soy. There will be softseed capacity added. Cover crops will be developed,” Heckman said. “Some of the existing seeds will probably be technology-changed to be able to grow softseeds in different areas. You may see some of the existing seeds at higher percent oil.”
Oil is going to have a higher percent of the crush, and North America is not going to be an exporter, he said.
“There's no one silver bullet, but there will be investment, and there will be innovation,” Heckman said. “And the price signals will be there, and the market will do its work.”
When asked about the war in Ukraine and its impact on the agriculture cycle, Heckman said a big crop is needed in North America this year along with another large crop in South America next year.
“I think we need two good cycles to start to alleviate some of the pressure,” he said. “I think the market is sending the signal to the farmer. Historically, if you look, farmers have responded with production, and we’ll start to curb some demand and we’ll pull stocks out. So the market is starting to do its work there.”
Bunge has more than 1,100 employees in the region, and all of its facilities are shut down. But, where it can, the company is trying to run a little bit and supply vegetable oil for humanitarians, supply wheat to flour millers to create bread for humanitarian efforts and trying to open up some of the export lanes.
“It’s a trickle, probably less than 10%,” he said. “That dislocation, until it is solved, definitely makes a tighter global situation.”
Sunflower oil has probably been the biggest shock, and now feed grains and wheat as well, Heckman said.
“It will elongate the tightness, the cycle of volatility and elevated prices,” he said. “We can’t predict when Ukraine will come back online.”
When it does, the company will have to assess the condition of the infrastructure. There’s definitely been damage to roadways, railways and bridges, but not too much damage yet in ports, he said.
“There will be a period of time to get it back up to seed in the investments and just untangling-getting the mines out of the ports and untangling the logjam of all the vessels that are there,” Heckman said. “So it's many months to get it back to not full capacity once we can assess that, and then there’ll be investment.”
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Goya Foods CEO - "We are on the precipice of a global food crisis" -
>>> “We Are on the Precipice”
BY JAMES RICKARDS
MAY 17, 2022
https://dailyreckoning.com/we-are-on-the-precipice/
“We Are on the Precipice”
I don’t believe many people grasp the enormity of the global food crisis we’ll be facing in the months ahead. But the world could be on the verge of a massive humanitarian crisis. Let’s dive in…
The supply chain collapse preceded the war in Ukraine, but the war has only intensified the problems. You can see it with your own eyes when you walk into a supermarket and find long stretches of empty shelves in stores that used to be chock-full of food and other merchandise.
Even goods that are available such as gasoline are being sold at much higher prices. Prices for gasoline (and diesel, which is critical for goods transportation) have more than doubled in the past nine months. All of this is clear. The question is will it get worse from here?
Unfortunately, the answer is yes.
Bob Unanue is the CEO of Goya Foods, which is one of the largest food distributors in the world. Few people are better positioned to assess the global food situation than Unanue, who deals with raw food deliveries on the one hand and retail customers on the other.
Unanue is now warning, “We are on the precipice of a global food crisis.” Other experts are quoted making a similar point. That’s not hyperbole or fearmongering, but a serious analysis. Here’s why…
29% of All Wheat Exports in Jeopardy
In the Northern Hemisphere, the planting season for 2022 is well underway. Crops were planted (or not) in March and April. Based on that, you can already form estimates of output next September and October during the harvest season (subject to some variability based on weather and other factors).
Plantings have been far below normal in 2022, either due to a lack of fertilizer or to much higher costs for fertilizer where farmers simply chose to plant less. This predictable shortage is in addition to the much greater shortages due to the fact that Russian output is sanctioned and Ukrainian output is nonexistent because it’s at war.
Russia and Ukraine together account for 29% of global wheat and 19% of global corn exports.
Russia and Ukraine together produce 29% of all the wheat exports in the world. That doesn’t mean they grow 29% of the wheat in the world. It means they grow 29% of the wheat exports.
The U.S., Australia, Canada and others grow a lot of wheat but consume most of it themselves. They export relatively little. Importantly, they don’t simply eat it. They feed it to their farm animals. People don’t often make the connection between grain and animal products, but it’s critical.
Many countries get 70–100% of their grains from either Russia or Ukraine or both. Lebanon gets 100%. Egypt is over 70%. Kenya, Sudan, Somalia, many central African countries and Jordan and other Middle Eastern countries receive much of their grain from Russia or Ukraine.
No Planting, No Crops
But it’s worse than that because not only are many Ukrainian exports shut down now, but the planting season is nearly over. And you’re not going to get any grain in October if you didn’t plant it in April or May. And they didn’t for obvious reasons.
What that means is you project ahead to October, November, December of this year, those countries I mentioned are not going to be able to get their grain supplies. There simply aren’t going to be any, or they’ll be greatly reduced. The combined population of countries that get between 70% and 100% of their imports from Russia or Ukraine is 700 million people.
That’s 10% of the global population. So you’re looking at mass starvation. You’re looking at a humanitarian crisis of unprecedented proportions, probably the worst since the Black Death of the 14th century. That’s coming down the road, even if most people can’t see it coming or fully fathom the depths of the coming crisis.
In short, we know enough now to predict much higher prices, empty shelves and, in some cases, mass starvation in the fourth quarter of this year and beyond.
Beyond the humanitarian aspect of the coming food shortages, there are also potentially serious social and geopolitical ramifications.
Another Arab Spring?
You remember the “Arab Spring” starting in 2010. It started in Tunisia and spread from there. Well, it was triggered by a food crisis. There was a shortage of wheat, which triggered the protests.
There were underlying problems in these societies, but a food crisis was the catalyst for the protests.
Now, many poorer countries in the Middle East and Africa are facing a much greater crisis as the impact of shortages manifests itself later this year and into next year. Will we see even more social unrest than in 2011?
It’s very possible, and it could be even more destabilizing than the Arab Spring. We could also see waves of mass migration from Africa and the Middle East as desperate and hungry people flee their homelands.
Europe endured a wave of mass immigration in 2015. Many migrants were attempting to flee the war in Syria, but there were great amounts of people who weren’t affected by the war. They were just seeking better lives in the welfare states of Europe.
Mass starvation could trigger an even greater migration, which would present Europe with enormous challenges.
The United States could also witness another wave of migration at the southern border, which is currently being inundated by migrants. A global food crisis could send the numbers spiraling to uncontrollable limits.
What if the War Drags On?
And what if the war in Ukraine drags on well into next year? Next year’s growing season would also be disrupted and the shortages could extend into late 2023 and beyond.
Well, maybe some would argue that other nations could pick up the slack and grow additional grain. That’s nice in theory, but it’s not that simple.
Russia is the largest exporter of fertilizer, and sanctions are cutting off supplies. Many farmers cannot get fertilizer at all, and those who can are paying between twice and three times last year’s price.
That means that crops actually produced will have much higher prices because of the higher price of inputs such as fertilizer, and the higher transportation costs due to higher prices for diesel and gasoline.
Like I said earlier, we’re looking at a humanitarian crisis of unprecedented proportions, probably the worst since the black death of the 14th century.
And we’re not prepared to handle it.
Regards,
Jim Rickards
for The Daily Reckoning
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>>> Deere Plunges Most Since 2008 on Supply Chain Snarls, Inflation
Bloomberg
by Joe Deaux
May 20, 2022
https://finance.yahoo.com/news/deere-plunges-most-since-2008-211624539.html
(Bloomberg) -- Deere & Co. slid the most in 14 years after the world’s largest manufacturer of agricultural equipment was the latest major US company bruised by supply chain snags and rising inflation.
Shares fell 14% Friday, erasing a record $15.7 billion in market capitalization after the company posted disappointing quarterly sales and said that supply chain challenges will persist through the end of the year. Ongoing chip shortages continue to prevent Deere from producing more tractors to meet customer needs, and continuing problems with trucking and ocean shipments have forced the company to use more costly air freight to get key components to its plants.
“Very surprising -- Deere was viewed as a relative safe-haven in a volatile market,” said Larry De Maria, an analyst at William Blair. Now the company will be forced to rely more heavily on boosting production in the second half “in a supply chain challenged world to achieve its targets,” he said.
Deere became the latest big US corporate name to warn on the effects of inflation and supply chain issues. Walmart Inc., Target Corp. and Cisco Systems Inc. this week cut their profit forecasts, stoking a selloff across the stock market. The company also said it suffered from higher production costs as supply chain snags continue to hound the manufacturer.
The interruptions are hindering sales just as US farmers are poised for another year of profit as war and global weather challenges have extended the 2021 crop price rally. At the same time, disruption from Russia’s invasion of Ukraine has elevated the cost of fuel and fertilizer, threaten to limit farmers’ spending power. Surging diesel prices mean some farmers are paying twice as much as they did a year ago to fill up their tractor. The costs of weedkillers, insecticides and nitrogen fertilizer are also soaring.
“The problem is more around supply chain constraints,” Stephen Volkmann, an analyst at Jefferies, said by phone. “The good news is they can sell whatever they can make, but the bad news is they’re constrained on what they can make.”
Deere forecast 2022 net income between $7 billion and $7.4 billion, above analysts’ average estimate of $6.99 billion and up from a prior range of $6.7 billion to $7.1 billion. The company also cited impairments related to the Russian invasion of Ukraine. It told investors in March that it halted shipments of its equipment to Russia.
On its earnings call, company executives said they haven’t seen demand for large farm machinery cool off, and expect strong agriculture demand into 2023.
“It’s definitely not a market to release an earnings miss” into, said Matt Arnold, an analyst at Edward Jones. The selloff “was an overreaction that creates a buying opportunity,” he said. “Demand remains very strong, and earnings are eventually going to reflect that strength.”
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>>> Farmland Partners to Be Added to the MSCI REIT Index (RMZ)
Businesswire
May 16, 2022
https://finance.yahoo.com/news/farmland-partners-added-msci-reit-111000870.html
DENVER, May 16, 2022--(BUSINESS WIRE)--Farmland Partners Inc. (NYSE: FPI) (the "Company" or "FPI") today announced that it will be included in the Morgan Stanley Capital International (MSCI) US REIT Index (the "RMZ") as of the close of the market on May 31, 2022.
The RMZ is a free float-adjusted market capitalization weighted index that is comprised of equity real estate investment trusts (REITs) and is one of the most broadly adopted benchmarks for the stock market performance of the REIT sector.
"Our inclusion in the RMZ represents a significant milestone for the Company," said FPI Chairman and CEO Paul Pittman. "It is a testament to the Company’s growth strategy, and inclusion in the index should provide enhanced visibility to the investment community and could attract further capital deployed through passive strategies."
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owns and/or manages approximately 185,000 acres in 19 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Carolina, South Carolina, South Dakota and Virginia. We have approximately 26 crop types and more than 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.
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LAND, FPI - >>> One Sector Where Real Estate Billionaires Have Made a Ton of Money
Motley Fool
By Mike Price
Apr 29, 2022
https://www.fool.com/investing/2022/04/29/one-sector-where-real-estate-billionaires-have-mad/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
KEY POINTS
Billionaires like Bill Gates and Jeff Bezos are buying farmland.
Farmland not only acts as an inflation hedge but also a portoflio diversifier.
Gladstone Land and Farmland Partners are REITs that allow individual investors to invest in farmland.
Here's how you can buy farmland along with them.
Billionaires have the kinds of investment choices that individual investors can't even dream of -- custom derivatives, private placements, even entire social media networks. So, what real estate sector are they flocking to now as inflation ramps up? Farmland.
Farmland may seem boring, but it is one of the best historical investments for inflation protection. Let's discuss which billionaires are investing in farmland, the case for it as an investment, and how you can get it in on it, too, with real estate investment trusts (REITs) Gladstone Land (LAND -2.48%) and Farmland Partners (FPI 0.03%).
The billionaires
Shahid Kahn started automotive parts company Flex 'N Gate in Urbana, Illinois but is probably more famous for being the owner of the NFL's Jacksonville Jaguars. Recently, a spokesperson confirmed that one of his entities had purchased 24,000 acres of farmland.
Urbana is smack dab in the middle of Central Illinois farm country, so Kahn should be very familiar with the investment. As of April 2021, Kahn had purchased $84 million of farmland across 10 Central Illinois counties. The purchases began in 2015, and he has likely purchased more since April 2021.
Our next billionaire is Bill Gates, who, with Melinda Gates, was the country's largest farmland owner prior to their divorce. Gates' investment management company has reportedly purchased over 269,000 acres of farmland over the past 10 years.
Finally, Jeff Bezos has recently gotten in on the farmland buying spree as well. Bezos blew past Gates' levels of ownership earlier this year and now owns 420,000 acres of farmland.
The case for investing in farmland
The best case right now is that farmland is inflation protection. Farmland is leased to a farmer with contingencies for rising prices. If food prices skyrocket, as they are right now, the lessor gets to share in the windfall profits.
Of course, all businesses with primarily fixed costs hope to see windfall profits as prices go up. What sets farmland apart is the elasticity of the demand curve. When food prices go up, people can't stop eating. In many industries with elastic demand, when prices go up, demand drops. When the food prices go up, people will start to conserve more, but demand shouldn't drop nearly as much.
Inflation protection isn't the only reason to invest in farmland. The asset also allows investors to diversify their portfolios. The less correlated your various investments are, the more consistent your returns will be over time. According to a white paper by fund manager Nuveen, farmland has had consistently positive returns and higher yields than the most popular government bonds during the past four US recessions. It also has lower average volatility than both US stocks and 10-year treasury bonds since 2007. If the stock market crashes, farmland may also take a temporary hit, but it likely won't end up in the same bear market.
How you can get in on farmland
Unlike custom derivatives and entire social media networks, there are ways for individuals to invest in farmland. The most popular is Gladstone Land. Gladstone owns over 110,000 acres of farmland across 164 farms. Its stock is up almost 70% over the last six months as investors have piled in for inflation protection.
That doesn't mean it's a bad value today. The dividend yield is still 1.4%, and it trades for just over two times book value. Remember that its book value is based on the price it paid for farmland. According to a recent management presentation, the value of some of that land could be up 162% since 2000.
As food prices continue to increase, Gladstone's profits will follow, and more investors will likely buy farmland, pushing the prices of its assets up as well. Profits and assets both give the company more capacity to build its portfolio and continue to grow.
Farmland Partners is another way to get exposure to farmland. It is a more vertically integrated option. In addition to owning 160,000 acres of farmland, it also recently got into the farmland management business (it currently manages another 26,000 acres) and will manage farmland auctions and brokering as well.
Farmland Partners has the same exposure to increased food prices in its leases as Gladstone, but it also has more direct exposure to both rising food prices (with the land it manages) and rising farmland prices (with its auction and brokerage businesses)
It's worth noting that neither of these REITs has been a perfect vehicle for farmland investing so far. Farmland Partners spent years in a legal feud with a short seller that published incorrect information. Gladstone Land has remarkable returns over the past year or so, since inflation fears started to ramp up, but it lagged the market in the seven years before that.
It's possible that the two REITs will be duds unless there are substantial macroeconomic headwinds (like rising food prices) to attract investors. It's also possible that recent events have given the companies the catalyst they needed to move into a new growth phase.
Diversify, diversify, diversify
If the No. 1 rule of real estate investing is "location, location, location," the No. 1 rule of investing, in general, should be "diversify, diversify, diversify." Farmland offers investors the opportunity to not only protect their portfolios from inflation but also potentially shield returns during other market crashes as well. Billionaires are investing in the sector, and if you can handle market lagging returns during bull markets, Gladstone and Farmland Partners could offer bear market protection in your portfolio as well.
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Home ownership too>>>
Who Will Eventually Own Everything, Including You?
STORY AT-A-GLANCE
The vast majority of the world’s assets are owned by just two investment firms — BlackRock and the Vanguard Group. Combined, they have ownership in nearly 90% of all S&P 500 firms, and through their investment holdings they secretly wield monopoly control over all industries
By now you may be familiar with the World Economic Forum slogan, “By 2030, you will own nothing.” To that end, BlackRock and other investment firms are buying up every single-family home they can find, making cash offers of 20% to 50% above asking price
Buying a home has been part of the American dream since the founding of this country. It’s been a significant part of financial success, security and freedom. George Washington declared that “Private Property and freedom are inseparable.” Now, lower to middle class Americans are being intentionally positioned to become permanent renters, which means they cannot build equity
This is wealth redistribution from the low- and middle-class to the upper, and it’s in line with plans for societal reorganization described under banners such as The Great Reset, Build Back Better, Agenda 21 and the 2030 Agenda for Sustainable Development
These agendas all work together toward the same goal, which is a global monopoly on ownership and wealth, with a clear separation of the haves and have nots; the owners and the owned; the rulers and the ruled; the elite and the serfs
>>> A String of Fires Destroys Food Processing Facilities Across America
Vision Times
By Neil Campbell
April 21, 2022
https://www.visiontimes.com/2022/04/21/fires-destroy-food-processing-centers.html
A string of fires have destroyed US food processing facilities in a string of isolated incidents.
A curious string of fires and plane crashes over the last month have destroyed the facilities of at least five major food processors across four different states, exacerbating an escalating inflation and supply chain crisis that is quickly becoming chronic.
The most recent instance appears to be the destruction of Oregon-based Azure Standard’s joint headquarters and warehouse facilities during the night of April 18.
Azure Standard Headquarters
In the text of an email alerting affiliates to the damage, the company describes itself as “the USA’s largest independent food distributor.”
It notes that “basically any…liquid product,” such as honey, oil, and vinegar, will be out of stock as a result of the damage.
Azure Standard also states it lost its fruit packing and carob product facility in the blaze, but expects limited effect as a result of the fruit harvesting season not yet being in swing.
The blaze appears to have received almost zero media attention, only being covered in a terse rewrite of the press release by small town media outlet Columbia Gorge News and the Columbia Community Connection News (CCC) blog.
CCC reported that records from the local county Sheriff’s log stated “Lights flickered; They heard a pop and went up there to check it out and there was a fire.” By the time fire responders arrived, with only one truck and four men, there was already a hole in the roof with flames bursting forth.
It took approximately 45 minutes for reinforcement units to arrive.
According to the outlet, company CEO David Steltzer was on the scene when the fire occurred.
Additionally, Fire Chief Jon Keyser Jr. was paraphrased as stating that “Steltzer was removing paperwork from the building” when his initial crew arrived on scene.
Keyser was further paraphrased as stating the building was “loaded with fuels including vegetable and nut oils made from canola, coconut and olives,” which made the fire difficult to handle with water as foam-based products are required to smother the flames.
Taylor Farms
On April 13, a major food California processing plant belonging to Taylor Farms burned almost completely to the ground. USA Today affiliate The Californian quoted Deputy Fire Chief Sam Klemek as saying, “About 85% to 95% of the building is a total loss.”
The article states the facility employed almost 1,000 people.
“There are parts of the building that are separate, that are still operational. As far as the main processing facility, it’s considered a total loss,” added Klemek.
The blaze was especially significant as local residents fell under a shelter-in-place order resulting from the risk of 35,000 pounds of anhydrous ammonia held on site, which although fortunately avoided catching fire and exploding disastrously, nonetheless suffered a “moderate leak” that “has been secured on site,” said Klemek.
Taylor Farms is a major player in the food supply chain for both Canada and the United States. According to a company press release, the firm was recognized by Walmart as its 2022 Food Supplier of the Year in March.
Although the company is a private firm and does not publicly disclose financial reports for shareholders, websites such as Zippia and Zoominfo estimate annual revenues at between $2 and $3 billion.
Industry outlet Western Farm Press described the facility as one that “manufactures wholesale products like bulk salads and shredded lettuce used by restaurants and schools,” adding the company expected to rebuild and be operational again as early as spring of 2023.
Gem State Processing
The same day as the Taylor Farm fire, an airplane crashed into Idaho’s Gem State Processing plant. A release by the local police department said that while the pilot did not survive, no employees were injured.
April 18 reporting by Daily Mail identified the pilot as a 30-year-old woman with 11 years of flight experience who was transporting UPS packages from Salt Lake City.
The woman’s “distraught” father attributed the cause of the crash to a 60-foot chimney on the roof of the plant that allegedly disburses a large amount of steam.
Local authorities were paraphrased as stating the woman “was flying too low while attempting to land.”
The website for the company describes itself as processing 18,000 acres worth of potatoes each year.
The facility appears to have been largely undamaged in the incident.
Maricopa Food Pantry
On March 28, Maricopa Food Pantry, a local food bank in Arizona, lost 50,000 pounds worth of food in a fire that occurred “just 15 minutes after their food bank closed,” according to CBS affiliate Arizona’s Family.
Company President Mike Connelly described the blaze as one “40-50 feet in the air, just pure black smoke,” that “engulfed the entire neighborhood.”
The article at the time stated the cause of the fire was unknown, but paraphrased Connelly as positing “trailers with more than a hundred gallons of diesel fuel to refrigerate food made it much worse.”
AZCentral cited CEO Jim Shoaf in stating that 15,000 pounds of meat and 40,000 pounds of canned goods and “other commodities” were lost in the blaze.
April 20 reporting by ABC15 said that Phoenix-based St. Mary’s Food Bank had replenished the three trailers and 50,000 pounds of food lost with inventory from its own supply.
Shearer’s Foods
On March 22, Tri-City Herald reported that the Shearer’s Foods potato chip plant in Hermiston, Oregon was “gone” after a boiler explosion and its subsequent fire annihilated the facility.
The outlet reported that the boiler was fueled by natural gas and that the company supplied potato and corn chips throughout the western United States.
Seven employees were hospitalized in the blast. The Herald stated the facility is home to nearly 400 employees.
The webpage for a local lawyer commencing legal proceedings against the company on behalf of two of the injured staffers alleged the boiler “was an inherently dangerous defective product apparently owned by a third party.”
The firm further alleges that the boiler was utilized to power fryers for kettle chips and that it “was installed in a hallway rather than in an enclosed boiler room.”
It added that the company “manufactures Shearer, Kettle, Frito-Lay, Delicious and Vista branded snack foods, as well as for several private label brands including Walmart and Costco” and brings in estimated revenues in the range of $500 million per year.
Far from isolated incidents
There are also several additional instances of similar calamities in recent weeks.
On March 31 Texas-based Rio Fresh suffered a fire that severely damaged an onion processing facility.
Local media outlet KRGV reported the site employed 300 people and that “hundreds of thousands of warehouse space and structure was damaged from the fire.”
One staff member was quoted as stating, “If I had to guess, anywhere from 50 to 100 hundred truckloads of onions were lost in the fire, you can see them still burning in the distance.”
On March 16, a massive fire wiped out much of a Walmart fulfillment center in Plainfield Indiana, an event serious enough that it brought in the ATF to investigate.
For New Hampshire’s East Conway Beef and Pork, disaster struck on April 11 when a fire broke out serious enough that it took respondents 16 hours to extinguish.
Local news outlets, however, described the company as merely a local butcher shop.
Two cows were lost in the disaster.
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>>> Food Processing Plants Burning Across U.S., Threatening Meat Supply
2-23-22
American Faith
https://americanfaith.com/food-processing-plants-burning-across-u-s-threatening-meat-supply/
There has been an outbreak of fires in food processing facilities across the nation in the last six months as food prices soar and supply chains are stressed to their limits.
The fires began showing up regularly in the news after a fire closed a Tyson Foods meat processing plant in Kansas. The location was a primary beef processing location for the company and the U.S. supply chain, providing about 6% of U.S. beef.
After the fire, analysts began speculating that the impact could drive up market prices for meat nationwide. Dan Norcini, part of the beef and poultry trading markets, said the cattle market would likely “respond negatively” to news of the fire. He said the long-term impact would depend on how long the plant stays closed.
Just days later, in August of 2021, the Patak Meat Processing facility burned near Atlanta. The media took notice because the family-owned business is beloved in its community locally, and its products are purchased nationwide.
The fire in Georgia barely had a minor impact on the food supply chain nationwide. But, in September, a fire at JBS USA, a meat processing facility in Nebraska, threatened the meat supply for the entire nation profoundly. The plant reportedly processes about 5% of the nation’s beef, and closure would directly impact the supply chain.
The trend has continued repeatedly through the end of 2021 and into 2022.
In February, Shearer’s Food Processing Plant in Hermiston, Oregon, burned down, leaving two employees injured. On April 13, Taylor Farms Food Processing Plant in Salinas, California, burned and prompted evacuations. On April 19, the Headquarters of Azure Standard Food Processing Plant in Dufur, Oregon, also burned.
People are beginning to notice because the fires are threatening an already stressed supply chain of food in the U.S.
The trend continues: on March 16, a massive fire wiped out much of a Walmart fulfillment center in Plainfield, Indiana. The event was severe enough to warrant the ATF to investigate.
Another incident occurred on April 11, at New Hampshire’s East Conway Beef and Pork, when a fire so large broke out that it took respondents 16 hours to extinguish.
At least 16 such disasters have taken place at food processing facilities nationwide. While most of the incidents have shown no foul play after investigation, the trend presents a curious string of events across the country.
It remains to be seen what the direct impact will be. Still, as the nation continues to face soaring food prices and trouble with supply chain operations, there could be a significant impact on the cost and availability of food for Americans.
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>>> Same Shady People Who Own Pharma and Media Want Your House <<<
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=164915730
>>> Gladstone Land Announces Increase in Monthly Cash Distributions for April, May and June 2022 and First Quarter Ended March 31, 2022, Earnings Release and Conference Call Dates
Accesswire
April 13, 2022
https://finance.yahoo.com/news/gladstone-land-announces-increase-monthly-174500757.html
MCLEAN, VA / ACCESSWIRE / April 13, 2022 /Gladstone Land Corporation (NASDAQ:LAND) ("Gladstone Land" or the "Company") announced today that its board of directors declared the following cash distributions for each of April, May and June 2022 and also announced its plan to report earnings for its first quarter ended March 31, 2022.
Monthly Cash Distributions:
Common Stock: $0.0454 per share of common stock for each of April, May and June 2022, payable per the table below:
The Company has paid 110 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013 and has increased its common stock distributions 26 times over the prior 29 quarters. The Company offers a dividend reinvestment plan (the "DRIP") to its common stockholders. For more information regarding the DRIP, please visit www.GladstoneFarms.com...
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>>> Farmland Partners Sells 303 Acres to Solar Power Company, Achieves 132% Gain
BusinessWire
April 11, 2022
https://finance.yahoo.com/news/farmland-partners-sells-303-acres-111000130.html
DENVER, April 11, 2022--(BUSINESS WIRE)--Farmland Partners Inc. (NYSE: FPI) (the "Company" or "FPI") sold approximately 303 acres of North Carolina farmland to a large solar power developer for $4 million on Wednesday. The Company realized a net gain of nearly $2.3 million, or 132%, on the disposition.
The parcel was part of a 944-acre farm that FPI acquired in 2015. It will continue to rent the remaining farmland to a local farmer.
"This sale is great news for our shareholders because of the more than 2X gain we achieved," said FPI Chairman and CEO Paul Pittman. "It’s also emblematic of our Company’s strategy to work with renewable energy producers, when possible, to maximize returns and benefit the environment."
FPI also leases land to renewable energy producers. Its portfolio includes five solar and three wind projects, which collectively have the capacity to generate more than 110 megawatts of electricity.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owns and/or manages nearly 187,000 acres in 19 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Carolina, South Carolina, South Dakota and Virginia. We have approximately 26 crop types and more than 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014. Additional information:
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I think you made two good sells on LAND and FPI. Even if they go up more, a year or less later they could be substantially lower.
In the late 90's I got bearish and missed out on the internet stock boom. By the end of 2002, most were much lower. than in 98.
Harder to pick a good sale point than buy point? Yep. Roy has doen well a a long term holder.
>> Land, FPI <<
I actually sold them on Friday, as part of a change to my asset allocation. But some nice gains, so no complaints here :o)
Btw, looks like BABYF is back down to 'baseline' again, so not too inspiring at the moment.
RIBT has at least entered into an uptrend since bottoming in late Jan. Nice move today. I was figuring it may bounce around between the 50 and 200 MAs for a period of time. But those MAs are converging so it will have to decide which direction to go soon. Based on the chart it appears most likely to be an upward breakout, but you said the stock has become a vehicle for the Robinhood type crowd, so anything can happen. Better to have company news flow driving the stock.
Fwiw, I've become more concerned about the hawkish Fed so have dropped my stock allocation way down. At my age, I figure preservation of capital is most important, along with ulcer avoidance :o)
FPI, like LAND, nice 2 year stock rise
https://stockcharts.com/h-sc/ui?s=FPI&p=D&yr=4&mn=0&dy=0&id=p00306092353
Farmland Partners - >>> Denver company wins court victory over 'short-and-distort scheme' against its stock
A ruling may end a yearslong legal fight over a short seller's report, a 40% stock drop and lawsuit.
By Greg Avery
Denver Business Journal
Apr 8, 2022
https://www.bizjournals.com/denver/news/2022/04/08/farmland-partners-short-seller-lawsuit-victory.html?ana=yahoo
A Denver company won dismissal of a class-action lawsuit this week after a court concluded the company and its executives had been the victim of false claims motivated by short-selling the company’s stock.
Farmland Partners Inc. (NYSE: FPI) won a summary judgment in U.S. federal court in Denver, ending a 2018 class-action lawsuit shareholders had brought against the company and two of its founding executives after its stock price plummeted in 2018 following the publication of a short seller’s article that has since shown to be false.
“After nearly four years, this judgment on the merits should finally slam the door on the baseless attacks against our company, its leadership, and most importantly its shareholders,” said Paul Pittman, FPI chairman and CEO, in a statement that labeled the incident a “short-and-distort scheme."
Pittman, who founded FPI, was named a defendant in the shareholder lawsuit alongside the company and Chief Financial Officer Luca Fabbri.
Farmland Partners is a real estate investment trust that focuses on agricultural land, owning property worth more than $1.1 billion.
The 25-employee company owns 187,000 acres in 19 states, generating money from the lease payments of tenant farmers working the land. It also owns a couple of small cattle feedlots, a farm auction business and lends money to finance farm operations.
In 2018, a short seller's report, published on the website Seeking Alpha under the pseudonym Rota Fortunae, alleged the Farmland Partners loan program included lending to people who were not third-party borrowers, suggesting parties related to the company had loaned money without proper disclosure and that FPI board members had quit, and the company’s accounting firm had resigned over it.
Information in the anonymous report was false, concluded the April 5 ruling by Judge David Ebel.
Two accounting firms had reviewed and approved of Farmland’s loan reporting, and Farmland Partners had itself switched accounting firms to save money; board departures had nothing to do with the loan program, the ruling summarized.
But readers of the anonymous 2018 report wouldn’t know that, and Farmland Partners stock dropped 40% after its publication.
“The author also stated that he and his clients — particularly a hedge fund called Sabrepoint Capital — shorted Farmland stock before the report was published and profited off the ensuing price drop,” the court judgment said.
Shareholders filed their class-action lawsuit against Farrnland the next month.
The court case over the stock’s drop dragged on, after even FPI identified the author of the report, David Quinton Matthews, and in 2021 he settled a lawsuit brought against him by FPI and published an article on Seeking Alpha admitting to the inaccuracies of his 2018 report.
Matthews, in last year’s retraction, said he was paid $100,000 by Sabre Point Capital to criticize companies the fund held short positions on, and that he also shorted companies’ stock. As part of the settlement with FPI, Matthews also pledged not to comment on FPI, its employees or its stock performance again.
“Even though we were successful in unmasking the perpetrators and the falsity of this blatantly manipulative scheme, we nevertheless have had to continue to defend the resulting class-action lawsuit at significant corporate expense,” Pittman said in his statement. “We are thankful that the court rightly ruled in our favor and put an end to this frivolous litigation and its continuing cost to our shareholders.”
FPI says it’s still pursuing litigation against Sabrepoint Capital over the article and short-selling.
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Dew, Thanks. It's good to hear that Blade is OK :o)
Concerning the stock market, a long term buy/hold approach has historically been the best strategy by far, so wanting to delay those cap gain taxes may be a blessing.
On the other hand, Warren Buffett's Rule #1 of investing is 'Don't lose money', so I guess there is something to be said for T-bills now and again :o)
Dew, Just curious if you have modified your allocation strategies in light of current developments? Thanks.
It will be difficult to sit pat with a large stock allocation knowing that a key Fed goal is to tank the stock market.
Much of the recent inflation has been due to the Covid supply chain and labor disruptions, and now compounded by the upheaval in the oil/gas markets. The Fed has no control over these factors, so they will use the tools they have - tightening credit, replacing QE with QT, plus deliberately tanking the stock market (yikes). So a bear market could be looming ahead for stocks, though I guess on the bright side there should be a lot of bargains created.
Btw, just curious if you have heard anything from Bladerunner? I know he's had cancer, and his last post was in Jan. Hopefully he's OK.
It's tough to counter Dudley's contention.
>> LAND <<
Yes, nice move, and looks like FPI is breaking out also.
But this recent article by the former NY Fed chief (Bill Dudley) has me spooked. He basically says the Fed will need to tank the stock market in order to get the inflation rate down. They believe stock market buoyancy works against their efforts, and want the market lower -
>>> If Stocks Don’t Fall, the Fed Needs to Force Them
Tightening financial conditions will be key to getting inflation under control.
Bloomberg
By Bill Dudley
April 6, 2022
https://www.bloomberg.com/opinion/articles/2022-04-06/if-stocks-don-t-fall-the-fed-needs-to-force-them
It’s hard to know how much the U.S. Federal Reserve will need to do to get inflation under control. But one thing is certain: To be effective, it’ll have to inflict more losses on stock and bond investors than it has so far.
Market participants’ heads are already spinning from the rapid change in the outlook for the Fed’s interest-rate policy. As recently as a year ago, they expected no rate increases in 2022. Now, they foresee the federal funds rate reaching about 2.5% by the end of this year and peaking at more than 3% in 2023.
Whether that proves right will depend on a number of hard-to-predict developments. How quickly will inflation come down? Where will it bottom out as the economy reopens, demand shifts from goods to services, and supply-chain disruptions ease? What will happen in the labor market, where annual wage inflation is running at more than 5% and the unemployment rate is on track to reach its lowest level since the early 1950s within a few months? Will more people come off the sidelines, boosting the labor supply? Together with moderating inflation, this could allow the Fed to stop raising rates at a neutral level of about 2.5%. Or a tightening labor market and stubborn inflation could force the Fed to be a lot more aggressive.
Among the biggest uncertainties: How will the Fed’s tightening affect financial conditions, and how will those conditions affect economic activity? This is central to Fed Chair Jerome Powell’s thinking about the transmission of monetary policy. As he put it in his March press conference: “Policy works through financial conditions. That’s how it reaches the real economy.”
He’s right. In contrast to many other countries, the U.S. economy doesn’t respond directly to the level of short-term interest rates. Most home borrowers aren’t affected, because they have long-term, fixed-rate mortgages. And, again in contrast to many other countries, many U.S. households do hold a significant amount of their wealth in equities. As a result, they’re sensitive to financial conditions: Equity prices influence how wealthy they feel, and how willing they are to spend rather than save.
So far, the Fed’s removal of stimulus hasn’t had much effect on financial conditions. The S&P 500 index is down only about 4% from its peak in early January, and still up a lot from its pre-pandemic level. Similarly, the yield on the 10-year Treasury note stands at 2.5%, up just 0.75 percentage point from a year ago and still way below the inflation rate. This is happening because market participants expect higher short-term rates to undermine economic growth and force the Fed to reverse course in 2024 and 2025 — but these very expectations are preventing the tightening of financial conditions that would make such an outcome more likely.
Investors should pay closer attention to what Powell has said: Financial conditions need to tighten. If this doesn’t happen on its own (which seems unlikely), the Fed will have to shock markets to achieve the desired response. This would mean hiking the federal funds rate considerably higher than currently anticipated. One way or another, to get inflation under control, the Fed will need to push bond yields higher and stock prices lower.
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>>> Farmland Partners Purchases 439-Acre Nebraska Farm
Business Wire
March 25, 2022
https://finance.yahoo.com/news/farmland-partners-purchases-439-acre-111000593.html
DENVER, March 25, 2022--(BUSINESS WIRE)--Farmland Partners Inc. (NYSE: FPI) (the "Company" or "FPI") yesterday purchased a 439-acre farm located in Colfax County, Nebraska, for approximately $2.6 million.
The corn and soybean farm includes 425 tillable acres, 350 of which are pivot irrigated. It is being rented back to the seller on a one-year lease with a gross capitalization rate of 5.2 percent.
"Our Company is in growth mode and this purchase is exactly what we’re seeking for our investors," said FPI Chairman and CEO Paul Pittman. "It was acquired at a fair price in an appreciating market, it has a high-yielding lease, and it further diversifies our holdings in Nebraska and across the country."
FPI also expects the value of the newly acquired farmland to grow over the long-term. U.S. agriculture land has appreciated at a compound annual growth rate of approximately 5.7 percent since 1970, based on U.S. Department of Agriculture data.
The deal comes on the heels of two farmland purchases in Illinois within the past week, and Pittman noted that the Company is actively working on additional acquisitions.
FPI is the nation’s largest publicly traded farmland REIT by U.S. acreage. It now owns 30 farms in Nebraska across 8 counties.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owns and/or manages approximately 187,000 acres in 19 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Carolina, South Carolina, South Dakota and Virginia. We have approximately 26 crop types and more than 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.
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Farmland Partners - >>> 7 Wheat Stocks to Buy as the World Faces a Shortage of the Amber-Colored Grain
Investor Place
by Alex Sirois
March 17, 2022
https://finance.yahoo.com/news/7-wheat-stocks-buy-world-113020763.html
Farmland Partners is a real estate investment trust (REIT) that focuses on cropland real estate. It manages and acquires farmland and agricultural property that covers basic crops including corn, soybeans, wheat, rice, and cotton.
And the Ukraine invasion has sent its share prices moving upward. To be fair, FPI stock had already reached new highs throughout 2021. Its prices essentially doubled as investors became more interested due to the narrative about farmland real estate future value appreciation. I’m not implying that isn’t the case, only providing background.
And FPI could certainly rise higher on renewed narratives about domestic cropland in the wake of the invasion. Farmland Partners had a strong 2021 in which net income increased 36% to $10.2 million.
If the company can control expenses during this period, those net income figures should rise again as its top line is likely to increase. The only word of caution here is that FPI stock is already fully priced at $12.92. That said, it could easily rise and the high analyst price does reach $16.
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Farmland Partners - >>> This Colorado CEO grew a farmland REIT into a billion-dollar public company
Colorado CEO's 25-employee public company owns $1.1 billion in land in 17 states.
By Greg Avery
Denver Business Journal
Mar 25, 2022
https://www.bizjournals.com/denver/news/2022/03/25/colorado-paul-pittman-farmland-partners-inc.html?ana=yahoo
Paul Pittman brought a combination of Midwestern farming and corporate finance together in a public company in Denver.
He’s the top executive of one of the few companies connecting the world of finance to farming and agriculture, a real estate company that’s a landlord to tenant farmers around the country and allows investors to benefit from the farmers’ success feeding people.
The business is a culmination of the lifetime of experience for Pittman, one that embodies his belief that "everybody gets to eat" and is tied to Colorado because of his passion for the state’s iconic sport, skiing.
Pittman grew up around farms in Illinois, the son of a schoolteacher who partly owned a family farm. He worked on a dairy farm as a teenager and went to college at the University of Illinois to study agriculture.
But U.S. agriculture was in crisis, a time when it seemed the traditional family farm might not survive.
“I graduated in 1985, the worst year for agriculture since the Great Depression, maybe even worse than then,” he said. “It was a terrible time to go into farming.”
The first Farm Aid concert was held the same year in a field in Illinois to raise money and awareness about a wave of U.S. farm failures.
Pittman was a good student, though, so he studied more. He attended graduate school at Harvard University and then law school at the University of Chicago before establishing a career in Wall Street finance that took him to live in New York City and London.
His company, Farmland Partners Inc. (NYSE: FPI) is one of only a couple of real estate investment trusts that focus on agricultural land.
The 25-employee company owns 160,200 acres in 17 states and generates money from the lease payments of tenant farmers working the land. The company’s land holdings are worth $1.1 billion. It also owns a couple of small cattle feedlots, a farm auction business and lends money to finance farm operations.
Investors can buy shares in Farmland Partners and invest in agriculture in the same way that other REITs allow investors to buy into multifamily or commercial real estate.
The only other agricultural REIT in the U.S. invests in specialty cropland. Farmland Partners is unique in that it aims to own productive land that mirrors the geography and crops of the nation, Pittman said. That ties the company to everything from corn, wheat, soybeans and cotton to cattle and potatoes.
Living internationally when he worked in M&A finance, he needed a U.S. home to return to, he said. He’d developed a passion for skiing, and nowhere had a higher concentration of world-class resorts than Colorado, so Pittman made his domestic residence in Breckenridge.
He focused on international mergers and acquisitions, which in the early 2000s pulled him into being an executive at technology businesses, including Denver-based building industry software company HomeSphere.
By 2008, he was among the executives running Southern California semiconductor maker Jazz Technologies, a company that included Apple co-founder Steve Wozniak as chief technology officer. After the management sold that business, Pittman’s roots called him.
“I told my wife I’m going back to do what I always wanted to do, and farm,” he said.
He’d assembled some land in southern Illinois and started farming there. He understood what made good farmland — good quality soil, plus access to abundant, predictable and replenishable water supplies. He farmed for six years, learning something new about himself.
“I was an OK farmer, not a great one,” Pittman said, “but I was a good land guy.”
Pittman started investing more broadly in farmland, acquiring properties in Nebraska and Colorado that would become part of Farmland Partners.
The company went public in 2014, based in Denver where it was easy to find skilled employees, and a city with a strong connection to agriculture. Denver’s location and airport access meant equally easy access to U.S. farm country and skiing, Pittman said.
Farm fields in areas with many successful farmers always attract tenants who can make the land productive, Pittman said. With a growing population needing to eat and cities growing into rural areas, that makes good farmland a terrific investment.
“If you have ever-increasing demand for the product coming off the land and an ever-decreasing supply of the land, it’s a great long-term opportunity,” Pittman said.
The company’s been able to acquire farm properties from other local investors, often successful doctors or dentists from rural areas who invested, or people who inherited farmland but don’t work it themselves.
“We’re primarily buying from remote owners,” Pittman said. “The perception is that we buy land from farmers, the guy driving the tractor, but that’s rarely what happens.”
The land itself is valuable because of the farming on it and the leases farmers commit to on the land. Farmland Partners relies on having good relations with successful farmers in each area where it owns land, which helps ensure there’s a tenant for all Farmland Partners’ acreage.
That requires an understanding of agriculture, local knowledge of the community, a willingness to do deals considered small by Wall Street standards, and a view of farmland as a long-term investment. That’s not a combination commonly found in many investment funds, Pittman said.
Pittman is married to Julie Levenson Pittman, who runs her own investment bank. The couple has two daughters, one in college and another in high school.
Pittman's free time often involves being outside, skiing in winter and lake fishing in warm seasons.
He’s been involved in winter sports program in Breckenridge over the years.
Pittman’s guilty pleasure is also on the slopes. When he can, Pittman takes heli-skiing trips to carve turns in untracked mountain snowfields.
“There’s an absolute child-like joy in descending in deep powder,” he said. “Plus, it doesn’t hurt when I fall.”
He’s a voracious reader, a habit he says he learned in law school, especially of history. He’s particularly fascinated by Winston Churchill, Britain’s leader in World War II, who Pittman finds laudable because Churchill was willing to resist public sentiment, confront fascism and played an outsized role in preserving a free and democratic Western world.
Pittman’s long been involved in Colorado Concern, a group that advocates for public policies that support business and entrepreneurs, because he believes business, and the wealth it allows people to create, is the engine of advancement for society.
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>>> Farmers On The Brink
Zero Hedge
MAR 27, 2022
https://www.zerohedge.com/commodities/farmers-brink
It was a spooky time to be out at sea off the US East Coast on Halloween in 1991. A strong storm system over the maritime provinces in Canada merged with the remnants of Hurricane Grace, forming a new, epic, and dangerous Nor’easter. The winds of this new storm breached 70 miles per hour and a wave as high as 100 feet was measured off the coast of Nova Scotia, but the storm was not renamed as either a tropical storm or a hurricane – instead, it is known only colloquially as simply the Perfect Storm. Six fishermen from Massachusetts perished when their vessel Andrea Gail sunk in open waters, and the story of the storm and of that tragedy became the subject of a best-selling book and a blockbuster feature film.
While the concept of a perfect storm is often too casually assigned in popular culture, it is difficult to find a more apt description of what has been unfolding in the global agriculture markets over these past several months. The tempest caused by the European energy disaster has merged with the hurricane of consequences flowing from Russia’s invasion of Ukraine, forming the genesis of a generational crisis in food that will leave few unaffected. While we’ve been warning about just such a scenario for some time, after spending the past two weeks traveling across the US Midwest and conferring with our contacts in the agricultural sector, even we are a little spooked by what we’ve learned. In a financial crash, the correlation between all asset classes converges to one. The coming crash in global food supply will be driven by a similar phenomenon across virtually every input into farming – they are all spiking to historic highs simultaneously, supply availability is diminishing across the spectrum, and the time to reverse the worst of the upcoming consequences is rapidly running short.
Other than that, things are great.
We begin with the price of fertilizer, which has been soaring to record highs across the globe. Key sources of nitrogen, potassium, and phosphorous – important inputs into soil fertility, crop yield, and plant maintenance – have all gone vertical. Ammonia is derived directly from natural gas, and the price of natural gas outside of the US has gone vertical. It's no surprise that the price of ammonia has tripled over the past twelve months. Belarus is the third-largest supplier of potash in the world and its state-owned miner, Belaruskali, declared force majeure after sanctions were imposed by the US and Europe. The number two supplier of potash globally? Russia. Perhaps front-running the Russian move on Ukraine, China halted phosphate exports last fall in an effort to ensure adequate domestic supply. The combined impact of these events can be seen in the Green Markets North American Fertilize Index, which tracks a blend of fertilizer prices globally:
Weed control is an important element of farming, and herbicides are an irreplaceable tool in the farmer’s repertoire. The most heavily used herbicide in the world is the controversial molecule glyphosate, known widely by its retail brand name Roundup. Invented by Monsanto (which is now owned by Bayer) in the 1970s, glyphosate has been linked to certain blood cancers and is targeted for elimination by many environmental groups. Despite these concerns, glyphosate remains a systemically important molecule – many seeds have been genetically modified to be resistant to it, allowing for its widespread use while minimizing damage to crops, and generics have expanded the market as it came off Monsanto’s patent.
Glyphosate is effectively little more than an elegantly modified fertilizer, containing both phosphorous and nitrogen. It is derived from similar starting materials – including ammonia – and, as such, its price has soared amid chronic supply shortages. This has caused the price of other herbicides to rise as farmers desperately seek substitutes, as described by this article in The Western Producer (emphasis added throughout):
“The much-ballyhooed glyphosate shortage is just the first domino to fall, according to a leading crop protection company.
‘The knock-on effect on basically every other herbicide molecule is starting to manifest itself,’ said Cornie Thiessen, general manager of ADAMA Canada. ‘We are seeing quite a domino effect in the market because of the glyphosate challenges.’
Bayer was already warning customers in late 2021 about a potential glyphosate shortage.”
If farmers skimp on herbicides to get by this season, it only makes dealing with weeds more challenging in the future. As one expert warned us, it only takes one year of negligence to do several years of damage to a field.
Diesel is another significant input into farming, and it too is facing a global supply crunch. Javier Blas, an energy and commodities columnist at Bloomberg whose Twitter account is an absolute must-follow, recently published an editorial sounding the alarm:
“The dire diesel supply situation predates the Russian invasion of Ukraine. While global oil demand hasn’t yet reached its pre-pandemic level, global diesel consumption surged to a fresh all-time high in the fourth quarter of 2021. The boom reflects the lopsided Covid economic recovery, with transportation demand spiking to ease supply-chain messes.
European refineries have struggled to match this revival in demand. One key reason is pricey natural gas. Refineries use gas to produce hydrogen, which they then use to remove sulphur from diesel. The spike in gas prices in late 2021 made that process prohibitively expensive, cutting diesel output.”
Once again, we discover the vital role natural gas plays in many downstream verticals, a key theme of many Doomberg pieces. With inventories at record lows and supplies constrained, the retail price of diesel in the US smashed previous record highs. In Europe, which depends heavily on Russian imports for both diesel and its semi-processed oil precursor, the wholesale market is on the verge of breaking. Here’s an updated version of the chart in Blas’ editorial:
As expensive as it is to fuel the field equipment needed to farm, keeping them operational at all is becoming an ever-growing challenge. The same chip shortage constraining automobile production has struck the farming equipment industry, making new equipment and spare parts harder to come by. Farmers in Iowa recently vented their frustration at a Republican forum on agriculture:
“…they bemoaned the hit-and-miss availability of parts to fix their equipment — the result of pandemic disruptions in the production of those parts. Iowa Rep. Ross Paustian, R-Walcott, is a farmer who said his neighbor was forced to buy a hydraulic pump for his tractor from a Nebraska dealership because it was the only place in the country that had it stocked.
Jim Boyer, an Emmet County farmer, had a similar, personal anecdote. He’s awaiting a $40 emissions-related sensor for his tractor, and he’s not sure if it will arrive anytime soon.
‘I cannot drive that tractor — a quarter-million-dollar piece of equipment — because I cannot get that sensor,’ he said.”
Compounding these challenges with machinery is a burgeoning labor shortage that is rapidly adding pressure to this brewing catastrophe. Although the labor issues in the US span well beyond agriculture, there are aspects that exacerbate the impact on farmers, including the physical labor intensity and seasonality of many roles, as well as the reliance on foreign laborers to fill key positions US citizens have historically shunned. This is especially challenging in light of vaccine mandates at border crossings. Here’s a recent report from Wisconsin Public Radio which describes the challenges well:
“While some farms employ workers all year round, Strader said many jobs are seasonal, starting in March and April and going until late fall when harvest ends.
With producers on edge about hiring for this year, Strader said many farms started recruiting earlier than usual and developed a contingency plan for how to make it through the season without employees. That could mean discontinuing certain markets or scaling back the variety of produce that they’re growing.”
Farmers are also competing with other sectors for a limited pool of labor. The gap between job openings and unemployed but willing workers across the entire US continues to widen:
Even generously assuming farmers can cobble together enough fertilizer, herbicide, machinery, and labor to produce a good harvest this fall, they may be left to deal with yet another crisis of supply that few off the field have on their radar: propane. As Tracy Schuchart – yet another absolute must-follow on Twitter – has been flagging for several months, the US exits the winter of 2021-2022 with concerningly low levels of propane inventory, well-below typical averages for this time of year:
Here is the supply situation in chart form, with the shaded region signifying the high- and low-inventory levels over the past seven years:
What does propane supply have to do with farming? Grain drying. Here’s a primer on the importance of drying, from Wikipedia:
“Hundreds of millions of tonnes of wheat, corn, soybean, rice and other grains as sorghum, sunflower seeds, rapeseed/canola, barley, oats, etc., are dried in grain dryers. In the main agricultural countries, drying comprises the reduction of moisture from about 17-30% w/w to values between 8 and 15% w/w, depending on the grain. The final moisture content for drying must be adequate for storage.”
Many farms are located in rural areas without ready access to natural gas, and thus some 80% of grain dryers in the US, for example, rely on propane as a fuel. In a piece we wrote in December called An Urgent Call on Line 5, we chronicled how progressive politicians and environmental groups were targeting an important pipeline artery that runs from Canada, under the Straits of Mackinac, and across the State of Michigan. Line 5 is crucial to the stability of the US supply of propane, and yet – despite the catastrophic energy crisis we find ourselves in – the Attorney General of Michigan was recently captured on video spouting unserious nonsense:
“Acknowledging the legal battle she’s waging against Line 5 is an uphill and unpopular battle, Michigan Attorney General Dana Nessel blamed ‘propaganda’ from the pipeline’s proprietor, which she said has ‘really changed public perception and opinion.’
Nessel vowed to continue the fight against Line 5 and defended the attempts by Gov. Gretchen Whitmer’s administration to shut down the nearly 70-year-old pipeline during a recorded video chat with the Royal Oak Area Democratic Club. The conservative group Michigan Rising Action shared the video with Breitbart.”
We believe we are at the onset of a global famine of historic proportions. In a staggering defiance of logic, many US politicians are still attacking the lifeblood of our own energy production infrastructure, looking to score political points against “the other team,” blaming price-taking producers of global commodities for gouging, threatening producers of energy with windfall profits taxes, resisting calls to remove bureaucratic hurdles to new production, and refusing to open an introductory physics textbook to help guide them through the suite of policy choices that require true leadership to get right. They remain stuck in an endless loop of platitudes, blamestorming, corruption, and ignorance.
As Eisenhower aptly identifies in our opening quote, distance has an anesthetizing effect on the observer of any occurrence. One wonders how many people will starve before our politicians get serious. The populations most at risk of falling off the edge are half a world away and we worry that that number is uncomfortably high.
At Doomberg, we pride ourselves on seeing patterns early and being months ahead of the news flow. We are consistently human-centric. Never have we been more certain in our beliefs while fervently wishing that we are wrong. A global famine is no joke, and correctly forecasting one would bring no joy.
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Farmland Partners (FPI) - >>> "Rota Fortunae," Author of July 2018 Attack on Farmland Partners, Retracts Short and Distort Article, Admits Article's Falsity, and Returns Multiples of Trading Profits He Gained from Attack
NEWS PROVIDED BY
Farmland Partners Inc.
Jun 21, 2021
https://www.prnewswire.com/news-releases/rota-fortunae-author-of-july-2018-attack-on-farmland-partners-retracts-short-and-distort-article-admits-articles-falsity-and-returns-multiples-of-trading-profits-he-gained-from-attack-301316131.html
DENVER, June 21, 2021 /PRNewswire/ -- Farmland Partners Inc. (NYSE: FPI) ("FPI" or the "Company") today announced the successful resolution of its litigation against Quinton Mathews, the previously anonymous author of an attack published on the financial website "Seeking Alpha" on July 11, 2018 as part of a "short and distort" scheme targeting FPI, management and its stockholders. As Mr. Mathews acknowledged publicly (https://seekingalpha.com/instablog/47800059-rota-fortunae/5605955-mathews-settlement-press-release), the July 2018 Article was full of false statements that drove down FPI's stock price, allowing Mr. Mathews and his clients, including the hedge fund who focused his attention on FPI, to profit when their short positions in FPI's stock gained value in the wake of the defamatory article's publication.
Through this settlement, Mr. Mathews has agreed to pay to the Company a multiple of the profits he made when his defamatory "article" artificially drove the price of FPI stock down 39% on the day of publication, enabling him, his clients, and his co-conspirators to profit from the short positions they established in advance of the article's publication. As explained below, FPI continues to pursue its claims in Texas federal court against the hedge fund with which Mr. Mathews collaborated, and the Company will continue to vigorously defend the baseless lawsuits filed immediately after the article was published that piggybacked on statements Mr. Mathews now acknowledges were false.
Mr. Mathews—who published the article under the pseudonym "Rota Fortunae" and only revealed his true name and the names of his profiting clients after a court compelled him to do so last year—has now acknowledged the defamatory statements contained in his article were false, including unfounded statements that FPI manipulated its publicly filed financial statements, misstated cash flows and ability to cover its dividend, and failed to properly disclose purported related party transactions in the company's audited financial statements. Mr. Mathews also acknowledges the falsity of the article's baseless headline claiming FPI faced a threat of insolvency.
"With a stock price now more than double the closing price on July 11, 2018, it is clear investors already recognize that the Company was the victim of a short and distort scheme," FPI CEO Paul Pittman explained. Pittman continued: "The outrageous acts of Mr. Mathews and his co-conspirators, together with the blind and misguided trust Plaintiffs' lawyers placed on Mr. Mathews' statements, have damaged innocent shareholders. We intend to continue to vigorously seek to right this wrong. Plaintiffs who filed a lawsuit against FPI based on Mr. Mathews' statements should acknowledge the falsity of the statements and rethink the ethics of continuing their cases, and move on from their frivolous pursuit of FPI stockholders' money."
The money Mr. Mathews will return to FPI includes not only the profits he made through his trading, but also the profits realized by his business partner, Keith Dilling, and his father, who placed similar bets against FPI's stock in advance of the article's publication. Critically, the Company remains free to continue to pursue its claims against the hedge fund that focused Mr. Mathews' attention on FPI. The fund—which Mr. Mathews admits paid him more than $100,000 in 2018 alone for his work on FPI and other companies—collaborated with Mr. Mathews for months prior to the release of the hit piece on FPI after working with him on research into other companies Mr. Mathews attacked via Seeking Alpha, and furthered the scheme against FPI by retweeting false and defamatory statements to amplify the impact of that attack. FPI's claims against the hedge fund are currently pending in Texas federal court.
The Company appreciates the support expressed by many other companies who have been victims of similar attacks from Mr. Mathews and others like him, and of the many investors who stuck with the Company in the face of the short and distort attack. While the Company waits for the relevant government agencies to take the necessary steps to meaningfully protect companies like FPI from these kinds of attacks, FPI will continue to protect itself and its stockholders by pursuing further restoration of its reputation and recovery of ill-gotten gains from the hedge fund that worked with Mr. Mathews for years, and any others who may have wrongfully profited from the artificial decline in FPI's share price caused by the false and misleading attack on the Company. In addition, the Company will consider all appropriate relief against those who continue to prosecute shareholder claims against the Company where such claims are based on statements by Mr. Mathews that have now been retracted and admitted to be false by their author.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owns approximately 157,000 acres in 16 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina, South Dakota and Virginia. We have approximately 26 crop types and over 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014. Additional information: www.farmlandpartners.com or (720) 452-3100.
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>>> Farmland Partners Inc. Reports Fourth Quarter and Fiscal Year 2021 Results
Yahoo Finance
February 22, 2022
https://finance.yahoo.com/news/farmland-partners-inc-reports-fourth-233400064.html
DENVER, Feb. 22, 2022 /PRNewswire/ -- Farmland Partners Inc. (NYSE: FPI) ("FPI" or the "Company") today reported financial results for the year ended December 31, 2021.
Selected Q4 and Full Year 2021 Highlights
During the fourth quarter of 2021, the Company:
recorded total operating revenue of $20.0 million, compared to $17.9 million for the same period in 2020, an increase of 12%;
recorded operating income of $11.3 million, compared to $9.7 million for the same period in 2020, an increase of 17%;
recorded net income of $13.2 million, compared to $6.4 million for the same period in 2020;
recorded net income excluding litigation-related items of $14.6 million1, compared to $8.3 million2 for the same period in 2020;
recorded Adjusted Funds from Operations ("AFFO") of $8.9 million, compared to $5.0 million for the same period in 2020;
recorded AFFO excluding litigation-related items of $10.3 million1, compared to $6.9 million2 for the same period in 2020;
converted its 6.00% Series B Preferred Stock into shares of common stock, eliminating the most expensive security in the capital structure, increasing cash flow after common dividends by over $6 million on an annualized basis, reducing leverage, and increasing equity market capitalization; and
completed the acquisition of Murray Wise Associates LLC for $8.1 million, increasing FPI's farm management capabilities, and adding brokerage and auction business activities.
During the year ended December 31, 2021, the Company:
recorded net income of $10.2 million, compared to $7.5 million for the same period in 2020;
recorded net income excluding litigation-related items of $18.5 million3, compared to $10.2 million4 for the same period in 2020;
recorded AFFO of $0.4 million, compared to $1.8 million for the same period in 2020;
recorded AFFO excluding litigation-related items of $8.6 million3, compared to $4.5 million4 for the same period in 2020;
completed 12 property acquisitions, for total consideration of $81.2 million;
completed 20 property dispositions, for cash consideration of $70.6 million and $2.4 million of convertible notes receivable, for total consideration of $73.0 million, and total gain on sale of $9.3 million;
grew the asset management business's assets under management to over $50 million;
reopened FPI Loan Program to enhance farmers' access to liquidity, extending $3.7 million in loans during 2021; and
reached a settlement with Quinton Mathews regarding the falsity of claims that were used to launch the "short and distort" scheme targeting FPI, its management, and its stockholders (FPI press release). We believe Quinton Mathews' public admission regarding the falsity of his claims weakens the pending class action case against us.
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1 For the quarter ended December 31, 2021, legal and accounting expense included $1.4 million related to litigation.
2 For the quarter ended December 31, 2020, legal and accounting expense included $1.9 million related to litigation.
3 For the year ended December 31, 2021, legal and accounting expense included $8.8 million related to litigation and revenue included $0.6 million of litigation settlement proceeds related to Rota Fortunae, resulting in a net impact of $8.2 million.
4 For the year ended December 31, 2020, legal and accounting expense included $2.7 million related to litigation.
CEO Comments
Paul A. Pittman, Chairman and CEO said: "2021 was a good year for the Company, marked by asset appreciation, rent increases, financial growth over 2020, and several initiatives to help drive future performance. As discussed previously, performance of specialty crops, such as tree nuts and citrus, improved relative to 2020. Improving farmer profitability in 2021 and land scarcity drove farmland appreciation and rate increases of over 10% for our 2021 lease renewals. Though we are early in the year, the outlook for 2022 remains positive."
Macro Comments
Farm Sector Income: According to USDA data, row crop farmers continue to experience strong profitability, especially in corn and soybeans, but also wheat, rice, and cotton, driven by improving prices and yields that are forecast to remain elevated. Net cash farm income, as reported by the USDA, is forecast to increase by 14.5% to $134 billion in 2021 and an additional 1.4% to $136 billion in 2022.
Farmland Appreciation: According to February 2022 publications by the Federal Reserve Banks of Chicago and Kansas City, year-over-year farmland appreciation was approximately 20%.
Financial and Operating Results
The table below shows financial and operating results for the years ended December 31, 2021 and 2020. The values are shown as reported and after adjusting for litigation items.
Legal and accounting expense for the years ended December 31, 2021 and 2020 included $8.8 million and $2.7 million, respectively, related to litigation. Revenue for the years ended December 31, 2021 and 2020 included $0.6 million and $— million, respectively, of litigation settlement proceeds related to Rota Fortunae resulting in a net impact of $8.2 million and $2.7 million, respectively.
See "Non-GAAP Financial Measures" for complete definitions of AFFO, Adjusted EBITDAre, and NOI and the financial tables accompanying this press release for reconciliations of net income to AFFO, Adjusted EBITDAre and NOI.
Acquisition and Disposition Activity
During the year ended December 31, 2021, the Company completed 12 property acquisitions for total consideration of $81.2 million.
During the year ended December 31, 2021, the Company completed 20 property dispositions for cash consideration of $70.6 million and $2.4 million of convertible notes receivable, for total consideration of $73.0 million, and total gain on sale of $9.3 million. The Company retained property management over 10 of the disposed assets.
Balance Sheet
During the year ended December 31, 2021, the Company sold 2,112,773 shares of common stock at a weighted average price of $12.93 for aggregate net proceeds of $27.3 million under its "at-the-market" offering programs.
As the date of this press release, the Company has 47,019,660 shares of common stock outstanding on a fully diluted basis.
The Company had total debt outstanding of $513.4 million at December 31, 2021, compared to total debt outstanding of $508.2 million at December 31, 2020.
The Company had total preferred outstanding of $120.5 million at December 31, 2021 compared to total preferred outstanding of $260.3 million at December 31, 2020.
Dividend Declarations
The Company's Board of Directors declared a quarterly cash dividend of $0.05 per share of common stock and per Class A Common OP unit. The dividends are payable on April 15, 2022, to stockholders and common unit holders of record on April 1, 2022.
Conference Call Information and Supplemental Package
The Company has scheduled a conference call on February 23, 2022, at 11:00 a.m. (Eastern Time) to discuss the financial results and provide a company update.
The call can be accessed by dialing 1-844-200-6205 (USA), 1-833-950-0062 (Canada), or 1-929-526-1599 (other locations) and using the access code 291985. The conference call will also be available via a live listen-only webcast and can be accessed through the Investor Relations section of the Company's website, www.farmlandpartners.com.
A replay of the conference call will be available beginning shortly after the end of the event until March 2, 2022, by dialing 1-866-813-9403 (USA), 1-226-828-7578 (Canada), or +44 (20) 4525-0658 (other locations) and using the access code 633871. A replay of the webcast will also be accessible on the Investor Relations section of the Company's website for a limited time following the event.
A supplemental package can be accessed through the Investor Relations section of the Company's website.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. As of the date of this release, the Company owns and/or manages approximately 186,000 acres in 19 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, North Carolina, Nebraska, South Carolina, South Dakota, and Virginia. We have approximately 26 crop types and over 100 tenants. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014. Additional information: www.farmlandpartners.com or (720) 452-3100.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the federal securities laws, including, without limitation, statements with respect to our outlook and the outlook for the farm economy generally, proposed and pending acquisitions and dispositions, the benefits of the conversion of the Company's Series B Preferred Stock to common stock, financing activities, crop yields and prices and anticipated rental rates. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "should," "could," "would," "predicts," "potential," "continue," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" or similar expressions or their negatives, as well as statements in future tense. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and our actual results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such a difference include the following: general volatility of the capital markets and the market price of the Company's common stock, changes in the Company's business strategy, availability, terms and deployment of capital, the Company's ability to refinance existing indebtedness at or prior to maturity on favorable terms, or at all, availability of qualified personnel, changes in the Company's industry, interest rates or the general economy, adverse developments related to crop yields or crop prices, the degree and nature of the Company's competition, the timing, price or amount of repurchases, if any, under the Company's share repurchase program, the ability to consummate acquisitions or dispositions under contract and the other factors described in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and the Company's other filings with the Securities and Exchange Commission. Any forward-looking information presented herein is made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
Common stock, $0.01 par value, 500,000,000 shares authorized; 45,474,145 shares
Non-GAAP Financial Measures
The Company considers the following non-GAAP measures as useful to investors as key supplemental measures of its performance: FFO, NOI, AFFO, EBITDAre and Adjusted EBITDAre. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss as a measure of the Company's operating performance. FFO, NOI, AFFO, EBITDAre and Adjusted EBITDAre, as calculated by the Company, may not be comparable to other companies that do not define such terms exactly as the Company.
FFO
The Company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as net income (loss) (calculated in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, plus real estate related depreciation, depletion and amortization (excluding amortization of deferred financing costs), and after adjustments for unconsolidated partnerships and joint ventures. Management presents FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring the Company's operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from sales of depreciable operating properties, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. The Company also believes that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare the Company's operating performance with that of other REITs. However, other equity REITs may not calculate FFO in accordance with the NAREIT definition as the Company does, and, accordingly, the Company's FFO may not be comparable to such other REITs' FFO.
AFFO
The Company calculates AFFO by adjusting FFO to exclude the income and expenses that the Company believes are not reflective of the sustainability of the Company's ongoing operating performance, including, but not limited to, real estate related acquisition and due diligence costs, stock-based compensation, deferred impact of interest rate swap terminations, and distributions on the Company's Series A preferred units. For the avoidance of doubt, $5.7 million non-cash redemption of Series B Participating Preferred Stock is not included in AFFO.
Changes in GAAP accounting and reporting rules that were put in effect after the establishment of NAREIT's definition of FFO in 1999 result in the inclusion of a number of items in FFO that do not correlate with the sustainability of the Company's operating performance. Therefore, in addition to FFO, the Company presents AFFO and AFFO per share, fully diluted, both of which are non-GAAP measures. Management considers AFFO a useful supplemental performance metric for investors as it is more indicative of the Company's operational performance than FFO. AFFO is not intended to represent cash flow or liquidity for the period and is only intended to provide an additional measure of the Company's operating performance. Even AFFO, however, does not properly capture the timing of cash receipts, especially in connection with full-year rent payments under lease agreements entered into in connection with newly acquired farms. Management considers AFFO per share, fully diluted to be a supplemental metric to GAAP earnings per share. AFFO per share, fully diluted provides additional insight into how the Company's operating performance could be allocated to potential shares outstanding at a specific point in time. Management believes that AFFO is a widely recognized measure of the operations of REITs and presenting AFFO will enable investors to assess the Company's performance in comparison to other REITs. However, other REITs may use different methodologies for calculating AFFO and AFFO per share, fully diluted and, accordingly, the Company's AFFO and AFFO per share, fully diluted may not always be comparable to AFFO and AFFO per share amounts calculated by other REITs. AFFO and AFFO per share, fully diluted should not be considered as an alternative to net income (loss) or earnings per share (determined in accordance with GAAP) as an indication of financial performance, or as an alternative to net income (loss) earnings per share (determined in accordance with GAAP) as a measure of the Company's liquidity, nor are they indicative of funds available to fund the Company's cash needs, including its ability to make distributions.
EBITDAre and Adjusted EBITDAre
The Company calculates Earnings Before Interest Taxes Depreciation and Amortization for real estate ("EBITDAre") in accordance with the standards established by NAREIT in its September 2017 White Paper. NAREIT defines EBITDAre as net income (calculated in accordance with GAAP) excluding interest expense, income tax, depreciation and amortization, gains or losses on disposition of depreciated property (including gains or losses on change of control), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in value of depreciated property in the affiliate, and adjustments to reflect the entity's pro rata share of EBITDAre of unconsolidated affiliates. EBITDAre is a key financial measure used to evaluate the Company's operating performance but should not be construed as an alternative to operating income, cash flows from operating activities or net income, in each case as determined in accordance with GAAP. The Company believes that EBITDAre is a useful performance measure commonly reported and will be widely used by analysts and investors in the Company's industry. However, while EBITDAre is a performance measure widely used across the Company's industry, the Company does not believe that it correctly captures the Company's business operating performance because it includes non-cash expenses and recurring adjustments that are necessary to better understand the Company's business operating performance. Therefore, in addition to EBITDAre, management uses Adjusted EBITDAre, a non-GAAP measure.
The Company calculates Adjusted EBITDAre by adjusting EBITDAre for certain items such as stock-based compensation and real estate related acquisition and due diligence costs that the Company considers necessary to understand its operating performance. The Company believes that Adjusted EBITDAre provides useful supplemental information to investors regarding the Company's ongoing operating performance that, when considered with net income and EBITDAre, is beneficial to an investor's understanding of the Company's operating performance. However, EBITDAre and Adjusted EBITDAre have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company's results as reported under GAAP.
In prior periods, the Company has presented EBITDA and Adjusted EBITDA. In accordance with NAREIT's recommendation, beginning with the Company's reported results for the three months ended March 31, 2018, the Company is reporting EBITDAre and Adjusted EBITDAre in place of EBITDA and Adjusted EBITDA.
Net Operating Income (NOI)
The Company calculates net operating income (NOI) as total operating revenues (rental income, tenant reimbursements, crop sales and other revenue) less property operating expenses (direct property expenses and real estate taxes). Since net operating income excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other income and losses and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and leasing farmland real estate, providing a perspective not immediately apparent from net income. However, net operating income should not be viewed as an alternative measure of the Company's financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, other income and losses.
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An RIBT shareholder I trust put up the following abd he is not a pumper.>>>>>
I called their investors hotline name was Rob. He spoke on a lot of things was pretty limited on what He could say with ER 1 week out. They can say what ever they want but he sound pretty good on the out look. Thought the price would be over $1 before ext was done. Limited chance of reverse spilt. Talked about moving towards human consumption side and the bigger margins then animal foods.Spoke on other stuff and mention some PR should be coming. Take it for what its worth but that was what was relayed.
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=168157429
Rumors or staements the pas year that could lead to a deal.
1. At a CC, I think last May, the head man Bradley said they athey are looking at the parent company that used to sell RIBT Organic rice. The mill was in Thailand, Urmatt, but the parent company is Narula. Narula is like bigger that Cargil and sort of an approved company by the governent of India, they are pricate and huge, ties to most of Asia.
2. A statement from a SH that talked to the IR about 6 months ago, RIBT has a new product and if it works in food deals could come from it.
3 like 11 months ago, from Rob(IR) to another again SH. In 6 to 9 months you won't be able to recognise this company.
Read my recent post at iHub.>>
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=168175961
Am I buying more? No, I got a ton already.But Virtu buying the stock and 3 big failed spikes the last two weeks make me go hmmmmmmm. The stock was up nicely for that 2 weeks though.
Some interesting activity in RIBT. I saw your post about the Virtu and Sigma positions, and how they coincided with the recent spike in the stock.
Do you sense some significant news flow coming from their Mar 17 conference call? Just curious if they usually have a conference call, or only a press release? Thanks.
LAND closed at an all time high Friday!!!!!
>>> Gladstone Land Announces Fourth Quarter and Year Ended 2021 Results
Accesswire
February 22, 2022
https://finance.yahoo.com/news/gladstone-land-announces-fourth-quarter-211000923.html
MCLEAN, VA, / ACCESSWIRE / February 22, 2022 / Gladstone Land Corporation (Nasdaq:LAND) ("Gladstone Land" or the "Company") today reported financial results for the fourth quarter and year ended December 31, 2021. A description of funds from operations ("FFO"), core FFO ("CFFO"), adjusted FFO ("AFFO"), and net asset value ("NAV"), all non-GAAP (generally accepted accounting principles in the United States) financial measures, appear at the end of this press release. All per-share references are to fully-diluted, weighted-average shares of the Company's common stock, unless noted otherwise. For further detail, please refer to the Company's Annual Report on Form 10-K (the "Form 10-K"), which is available on the Investors section of the Company's website at www.GladstoneLand.com.
Highlights for Fiscal Year 2021:
Portfolio Activity:
Property Acquisitions: Acquired 27 new farms, consisting of 11,463 total acres in seven different states, and 45,000 acre-feet (equal to approximately 14.7 billion gallons) of banked water for approximately $294.5 million. On a weighted-average basis, these acquisitions will yield an initial, minimum net capitalization rate of 5.2%. However, all of the leases on these farms contain certain provisions (e.g., annual rent escalations, CPI adjustments, or participation rents) that are expected to drive cash rents higher in future years.
Leasing Activity-Lease Renewals: Executed 17 new lease agreements on certain of our farms in four different states (CA, CO, FL, and MI) that are expected to result in an aggregate increase in annual net operating income of approximately $369,000, or 5.9%, over that of the prior leases.
Lease Revenue-Participation Rents: Recorded approximately $5.2 million of revenue from participation rents, compared to approximately $2.4 million in the prior year.
Debt Activity:
New Long-term Borrowings: Secured new long-term borrowings from seven different lenders resulting in total proceeds of approximately $67.8 million. On a weighted-average basis, these loans will bear interest at an expected effective interest rate of 3.05% and are fixed for the next 9.4 years.
Issuance of Series D Term Preferred Stock and Redemption of Series A Term Preferred Stock: Completed a public offering of 2,415,000 shares of 5.00% Series D Cumulative Term Preferred Stock (the "Series D Term Preferred Stock") for total net proceeds of approximately $58.3 million. Approximately $28.8 million of these proceeds were used to redeem all of our then-outstanding shares of 6.375% Series A Cumulative Term Preferred Stock (the "Series A Term Preferred Stock").
Interest Patronage: Recorded approximately $2.2 million of interest patronage, or refunded interest, related to our 2020 borrowings from various Farm Credit associations (collectively, "Farm Credit"). In addition, during the three months ended September 30, 2020, we recorded approximately $306,000 of 2020 interest patronage, as certain Farm Credit associations prepaid a portion of the 2020 interest patronage (which related to interest accrued during 2020 but is typically received in 2021). In total, we recorded approximately $2.5 million of 2020 interest patronage related to loans from Farm Credit, which resulted in a 28.7% reduction (approximately 135 basis points) to the stated interest rate on such borrowings.
Equity Activity:
Series C Preferred Stock: Sold 2,407,027 shares of our 6.00% Series C Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock") for net proceeds of approximately $54.8 million.
OP Units: Issued 204,778 common units of limited partnership interest in our operating partnership ("OP Units") in connection with an acquisition during the year, constituting a total fair value of approximately $4.0 million.
Common Stock-ATM Program: Amended our "at-the-market" program (the "ATM Program") to allow us to sell up to $160.0 million of additional shares of our common stock (expanding the aggregate offering price to up to $260.0 million) and sold 7,990,994 shares of our common stock for net proceeds of approximately $171.7 million under the ATM Program.
Increased and Paid Distributions: Increased the distribution run rate on our common stock (including OP Units held by non-controlling OP Unitholders) by a total of 0.67% and paid monthly cash distributions totaling $0.54075 per share of common stock during the year ended December 31, 2021.
Fourth Quarter 2021 Results:
Net income for the quarter was approximately $2.0 million, compared to approximately $1.5 million in the prior quarter. Net loss to common stockholders during the quarter was approximately $1.4 million, or $0.04 per share, compared to approximately $1.6 million, or $0.05 per share, in the prior quarter.
AFFO was approximately $6.7 million for the current quarter, an increase of approximately $1.5 million, or 28.4%, over the prior quarter, while AFFO per common share increased to approximately $0.20 for the current quarter, compared to $0.17 for the prior quarter. Common stock dividends declared were approximately $0.136 per share for the fourth quarter, compared to approximately $0.135 per share for the third quarter. The increase in AFFO was primarily driven by higher lease revenues recorded during the current quarter, partially offset by an increase in certain related-party fees. AFFO per common share for the current quarter was further impacted by an increase in the amount of shares of common stock outstanding as a result of additional shares issued under our ATM Program during the quarter.
Total cash lease revenues increased by approximately $2.8 million, or 14.5%, primarily driven by participation rents recorded during the current quarter of approximately $3.4 million, versus approximately $1.8 million in the prior quarter. Fixed base cash rent increased quarter-over-quarter by approximately $1.2 million, or 6.9%, primarily due to additional rental receipts from recent acquisitions. Aggregate related-party fees increased by approximately $935,000 from the prior quarter, primarily driven by a higher incentive fee earned by our investment adviser during the current quarter due to our pre-incentive fee FFO surpassing the required hurdle rate by a higher margin than in the prior quarter. Excluding related-party fees, our recurring core operating expenses decreased by approximately $255,000 from the prior quarter, primarily due to lower property operating expenses. The decrease in property operating expenses was primarily driven by a decrease in water costs incurred on one property in Colorado, partially offset by additional costs incurred in connection with protecting water rights on certain farms in California. Additionally, interest expense and dividends declared on our Series C Preferred Stock increased due to additional borrowings secured and stock issuances, respectively, during and since the prior quarter.
Cash flows from operations for the current quarter increased by approximately $8.6 million over the prior quarter, primarily due to the timing of when certain rental payments are scheduled to be paid pursuant to their respective leases. Our estimated NAV per share increased by $0.51 from the prior quarter to $14.31 at December 31, 2021, primarily driven by common equity issuances at net offering prices above our estimated NAV per common share at September 30, 2021.
Fiscal Year 2021 Results:
Net income for the year was approximately $3.5 million, compared to approximately $5.0 million in the prior year. Net loss to common stockholders during the year was approximately $8.7 million, or $0.29 per share, compared to approximately $4.4 million, or $0.20 per share, in the prior year.
AFFO was approximately $20.4 million for the current year, an increase of approximately $6.1 million, or 42.2%, over the prior year, while AFFO per common share was approximately $0.67 for the current year, compared to approximately $0.64 in the prior year. During 2020, we received a non-recurring early lease termination fee of approximately $3.0 million, which resulted in a net increase to 2020 AFFO of approximately $0.10 per share. Common stock dividends declared were approximately $0.541 per share for 2021, compared to approximately $0.537 per share for 2020.
The increase in AFFO was primarily driven by higher lease revenues earned on recent acquisitions, partially offset by increases in interest expense (due to additional borrowings), related-party fees (higher base management fee due to additional assets acquired and higher incentive fee due to our pre-incentive fee FFO surpassing the required hurdle rate by a larger margin than in the prior year), and preferred dividends (due to additional share issuances). On a same-property basis, excluding lease termination income, lease revenues increased by approximately $2.3 million, or 4.6%, over last year due to additional income earned from recent acquisitions and an increase in participation rents. Revenue from participation rents was approximately $5.2 million in 2021, compared to approximately $2.4 million in the prior year. The year-over-year increase was primarily due to several additional farms becoming active during 2021. Excluding related-party fees, recurring core operating expenses increased by approximately $652,000. This increase was primarily due to additional water costs incurred on certain properties and an increase in property tax expense due to certain recent acquisitions and changes in certain lease structures. During 2021, we incurred approximately $572,000 of additional water costs related to a property in Colorado, which we do not expect to continue into 2022. Additionally, we recorded approximately $282,000 of costs related to protecting our water rights on certain farms in California. We currently anticipate these costs continuing at similar levels for the next few years. Cash flows from operations increased by approximately $7.4 million, or 29.5%, over the prior year, primarily due to additional rental payments received related to new acquisitions.
Subsequent to December 31, 2021:
Portfolio Activity-Lease Renewals: Executed five new lease agreements on certain of our farms in three different states (CO, MI, and NE) that are expected to result in an aggregate decrease in annual net operating income of approximately $659,000 from that of the prior leases. The majority of this decrease is due to one lease renewal in which we agreed to pay a fixed amount to cover the majority of the farm's operating expenses in exchange for adding a significant participation rent component to the lease, the result of which will not be known until later in 2022. Excluding this lease renewal, the other lease renewals executed subsequent to December 31, 2021 , are expected to result in an aggregate decrease in annual net operating income of approximately $25,000, or 2.8%, from that of the prior leases.
Debt Activity:
New Long-term Borrowings: Secured new long-term borrowings from two different lenders resulting in total proceeds of approximately $3.4 million. On a weighted-average basis, these loans will bear interest at an expected effective interest rate of 3.35% and are fixed for the next 9.4 years.
MetLife Facility: Increased the size of our credit facility with Metropolitan Life Insurance Company
("MetLife") through the addition of a new $100.0 million long-term note payable.
Equity Activity-Series C Preferred Stock: Sold 663,508 shares of our Series C Preferred Stock for net proceeds of approximately $15.1 million.
Increased Distributions: Increased our distribution run rate by 0.22%, declaring monthly cash distributions of $0.0453 per share of common stock (including OP Units held by non-controlling OP Unitholders) for each of January, February, and March 2022. This marks our 25th distribution increase over the past 28 quarters, during which time we have increased the distribution run rate by 51.0%.
Comments from David Gladstone, President and CEO of Gladstone Land: "We ended the year on a high note with another active quarter of acquisitions and a strong turnout from our participation rents. We acquired $294 million of additional farms during 2021, the third straight year in which we've had over $250 million in acquisitions. And we recorded $5.2 million in participation rents during the year, which was more than twice the amount we recorded in each of the prior two years. This increase was largely due to the participation rent component on certain farms we purchased in the past few years becoming active for the first time in 2021 and was particularly aided by strong yields and pricing from our pistachio crop. We have a few more farms with participation rents scheduled to come online in 2022, but it's too early for us to know what the results will be at this time. Despite record-breaking storms that came toward the end of 2021, California remains under drought conditions. However, all of our farms continue to have sufficient water. We are working hard to replenish our backlog of potential farm acquisitions, and we are looking forward to another successful year in 2022."
Includes (i) cash dividends paid on our Series B and Series C Preferred Stock, (ii) the value of additional shares of Series C Preferred Stock issued pursuant to the dividend reinvestment program, and (iii) the pro-rata write-off of offering costs related to shares of Series C Preferred Stock that were redeemed.
Represents our pro-rata share of depreciation expense recorded in unconsolidated entities during the period.
Consists of insurance recoveries related to damage caused to certain buildings by natural disasters on certain of our properties.
This adjustment removes the effects of straight-lining rental income, as well as the amortization related to above-market lease values and lease incentives and accretion related to below-market lease values, deferred revenue, and tenant improvements, resulting in rental income reflected on a modified accrual cash basis. The effect to AFFO is that cash rents received pertaining to a lease year are normalized over that respective lease year on a straight-line basis, resulting in cash rent being recognized ratably over the period in which the cash rent is earned.
Consists of (i) the pro-rata write-off of offering costs related to shares of Series C Preferred Stock that were redeemed, which were noncash charges, (ii) the amount of dividends on the Series C Preferred Stock paid via issuing new shares (pursuant to the dividend reinvestment program), and (iii) our remaining pro-rata share of income (loss) recorded from investments in unconsolidated entities during the period.
Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for accumulated depreciation and amortization.
Consists of the principal balances outstanding of all indebtedness, including our lines of credit, notes and bonds payable, and our Series D Term Preferred Stock.
Includes (i) cash dividends paid on our Series B and Series C Preferred Stock, (ii) the value of additional shares of Series C Preferred Stock issued pursuant to the dividend reinvestment program, and (iii) the pro-rata write-off of offering costs related to shares of Series B and Series C Preferred Stock that were redeemed.
Represents our pro-rata share of depreciation expense recorded in unconsolidated entities during the period.
Consists primarily of (i) net property and casualty recoveries recorded (net of the cost of related repairs expensed) as a result of the damage caused to certain improvements by natural disasters on certain of our farms, (ii) one-time listing fees related to our Series D Term Preferred Stock, (iii) the write-off of certain unallocated costs related to a prior universal registration statement and, in 2020 only, costs expensed during the year related to an aborted offering, and (iv) certain one-time costs related to the early redemption of our Series A Term Preferred Stock.
This adjustment removes the effects of straight-lining rental income, as well as the amortization related to above-market lease values and lease incentives and accretion related to below-market lease values, deferred revenue, and tenant improvements, resulting in rental income reflected on a modified accrual cash basis. The effect to AFFO is that cash rents received pertaining to a lease year are normalized over that respective lease year on a straight-line basis, resulting in cash rent being recognized ratably over the period in which the cash rent is earned.
Consists of (i) the pro-rata write-off of offering costs related to shares of the Series B and Series C Preferred Stock that were redeemed, which were noncash charges, (ii) the amount of dividends on the Series C Preferred Stock paid via issuing new shares (pursuant to the dividend reinvestment program), and (iii) our remaining pro-rata share of income (loss) recorded from investments in unconsolidated entities during the period.
Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for accumulated depreciation and amortization.
Consists of the principal balances outstanding of all indebtedness, including our lines of credit, notes and bonds payable, and our Series A Term Preferred Stock.
Based on gross acreage.
Conference Call for Stockholders: The Company will hold a conference call on Wednesday, February 23, 2022, at 8:30 a.m. (EST) to discuss its earnings results. Please call (877) 407-9046 to join the conference call. An operator will monitor the call and set a queue for any questions. A conference call replay will be available after the call and will be accessible through March 2, 2022. To hear the replay, please dial (877) 660-6853, and use playback conference number 13725346. The live audio broadcast of the Company's conference call will also be available online at the Company's website, www.GladstoneLand.com. The event will also be archived and available for replay on the Company's website.
About Gladstone Land Corporation:
Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. and leases its properties to unrelated third-party farmers. The Company, which reports the aggregate fair value of its farmland holdings on a quarterly basis, currently owns 164 farms, comprised of over 113,000 acres in 15 different states and 45,000 acre-feet of banked water in California, valued at a total of approximately $1.5 billion. Gladstone Land's farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The Company also owns farms growing permanent crops, such as almonds, apples, cherries, figs, lemons, olives, pistachios, and other orchards, as well as blueberry groves and vineyards, which are generally planted every 10 to 20-plus years and harvested annually. Approximately 40% of the Company's fresh produce acreage is either organic or in transition to become organic, and over 10% of its permanent crop acreage falls into this category. The Company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. Gladstone Land pays monthly distributions to its stockholders and has paid 108 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The Company has increased its common distributions 25 times over the prior 28 quarters, and the current per-share distribution on its common stock is $0.0453 per month, or $0.5436 per year. Additional information, including detailed information about each of the Company's farms, can be found at www.GladstoneLand.com.
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>>> BDC and REIT manager The Gladstone Companies files IPO
MarketWatch
Feb. 22, 2022
By Steve Gelsi
https://www.marketwatch.com/story/bdc-and-reit-manager-the-gladstone-companies-files-ipo-2022-02-22?siteid=yhoof2
The Gladstone Companies on Monday filed its initial public offering to trade on the Nasdaq under the symbol GC, with underwriter EF Hutton, a division of Benchmark Investments LLC. The McLean, Va.-based company, headed by CEO David Gladstone, manages four publicly traded funds including two investment trusts, Gladstone Commercial Corp. GOOD, and Gladstone Land Corp. LAND, as well as specialty finance company Gladstone Capital Corp. GLAD, and Gladstone Investment Corp, a business development company. Gladstone Securities LLC is an affiliated broker-dealer of The Gladstone Companies. The Gladstone Companies reported total assets under management of $4 billion as of Dec. 31. Its compound annual growth rate for its AUM is 18% over the past 20 years.
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Farmland Partners - >>> Spring Cleaning Is Almost Here: Time to Get These Stocks Out of Your Portfolio
If you own this trio of REITs, it might be time to find better alternatives. Here are some options you'll want to consider.
Motley Fool
by Reuben Gregg Brewer
Mar 5, 2022
https://www.fool.com/investing/2022/03/05/spring-cleaning-is-almost-here-time-to-get-these-s/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
Global Net Lease cut its dividend in 2020 and still has a high payout ratio.
Farmland Partners is in an attractive niche, but its business is getting increasingly complicated.
Whitestone REIT is small and lacks diversification.
Real estate investment trusts (REITs) are meant to pass income on to investors and, thus, should really be conservatively managed. Only that's not exactly what you'll get from Global Net Lease (NYSE:GNL), Farmland Partners (NYSE:FPI), and Whitestone REIT (NYSE:WSR). If you own this trio of REITs, here's why you might want to dump them, as well as three alternatives that are likely to be more reliable over time.
1. Going global the safe way
Diversification is good for your portfolio, and it's good for a REIT's portfolio, too. So, on the surface, you'd think that Global Net Lease would be a slam-dunk investment option, particularly given its hefty 11.3% dividend yield. Only that outsized yield reflects the risks of this aggressively managed REIT.
On the positive side, Global Net Lease spreads its portfolio across the industrial (54% of rents), office (42%), and retail sectors (4%). Roughly 40% of rents, meanwhile, are derived from outside the U.S. But the externally managed REIT ended up cutting its dividend in 2020 and still has a fairly high adjusted funds from operations (FFO) payout ratio of 90%. Adjusted FFO, meanwhile, fell slightly between 2020 and 2021, which is the exact opposite of what you would expect, given that the pandemic was such a headwind in 2020.
Investors looking for more consistency would probably be better off with larger, more diversified peer W.P. Carey (NYSE:WPC), even though its yield is only 5.4%. Unlike Global Net Lease, W.P. Carey has increased its dividend every year since its initial public offering in 1998, including each quarter in 2020.
2. Farms the simple way
Next up on the house cleaning list is Farmland Partners, which owns exactly what its name implies -- farms. However, there are a couple of problems here.
First, the company is still dealing with the fallout from a short-seller report that caused it to cut its dividend in 2019. The second, bigger issue is that the REIT recently agreed to buy a company that will expand its business to include things like farmland brokerage and farm management. The goal is for the REIT to become a one-stop shop for anyone looking for farm services, which is great. But it is no longer a simple REIT story.
If you want to own farmland and simply collect rent checks, you will have to look elsewhere. The best option would likely be peer Gladstone Land (NASDAQ:LAND), which is focused on owning farms that grow things like fruits, vegetables, and nuts.
That said, Gladstone Land's stock has shot up of late, and the yield is near its historical lows at 1.8% or so. That's around what you'd get from Farmland Partners, without the added complications of the services business.
If you want to maintain the farmland exposure, this shift could end up being a net benefit. But, given the big run, you might want to consider moving out of Farmland Partners and just putting Gladstone Land on your wish list for the next broad sell-off.
3. Better options are available
Whitestone REIT owns strip malls. It is a tiny player in the industry, with a market cap of just over $600 million. While its Sun Belt focus might be of interest to some, it really only has operations in Arizona and Texas, making it highly concentrated. And on top of that, Whitestone REIT ended up cutting its dividend in 2020.
While the actual assets it owns might be just fine, there are negatives here that you can easily avoid by owning one of this REIT's larger peers. And with a roughly 3.9% yield, you aren't really getting paid much to stick around here anyway.
One alternative includes the Dividend King, Federal Realty Investment Trust (NYSE:FRT), which also has a fairly small portfolio but is filled with great assets in top-tier markets around the country. Notably, this sharpshooter has a longer dividend streak than any other public REIT. It yields 3.7% or so.
Kimco (NYSE:KIM) and Regency Centers (NASDAQ:REG) are two other options, sporting 3.3% and 3.8% yields, respectively. Both have large regionally diversified portfolios, including assets in the Sun Belt, for those who believe bigger portfolios are better. Any one of this trio is likely to be a stronger option for conservative income investors over the long term.
Go with the best
I could argue that Global Net Lease, Farmland Partners, and Whitestone REIT are just bad REITs to own, but the truth is that would really depend on the investor. However, for most income investors, there is a strong case to be made that there are better alternatives. And as you get ready to spring-clean your portfolio, you might want to take a look at some of those other options if you own this trio. Sometimes, trading up makes total sense.
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>>> John Deere Is Facing a Farmer Revolt
First its workers demanded and won better wages. Now its customers are suing for the right to repair their machines, endangering a key revenue stream.
Bloomberg
By Michael Byhoff
January 20, 2022
https://www.bloomberg.com/news/articles/2022-01-20/john-deere-is-facing-a-farmer-revolt-over-the-right-to-repair
Farm equipment giant John Deere boasted record profits in 2021 as the global pandemic made consumers and countries more reliant than ever on a functioning agricultural sector. Also last year, unionized workers demanded a piece of the company’s growing pie, and after a strike forced John Deere to provide better compensation to the men and women who make its products.
But now the company has another, potentially bigger problem: farmers. These customers are revolting against restrictions on how they repair increasingly complex equipment. On this episode of Bloomberg’s The Breakdown, we explore how lawsuits and legislation may soon threaten this key revenue stream for John Deere.
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>>> Gladstone Land Announces Increase in Monthly Cash Distributions for January, February and March 2022 and Fourth Quarter Ended December 31, 2021, Earnings Release and Conference Call Dates
Accesswire
January 11, 2022
https://finance.yahoo.com/news/gladstone-land-announces-increase-monthly-210500762.html
MCLEAN, VA / ACCESSWIRE / January 11, 2022 /Gladstone Land Corporation (Nasdaq:LAND) ("Gladstone Land" or the "Company") announced today that its board of directors declared the following cash distributions for each of January, February and March 2022.
Monthly Cash Distributions:
Common Stock: $0.0453 per share of common stock for each of January, February and March 2022, payable per the table below:
Summary of Common Stock Cash Distributions
Record Date
Payment Date
Amount
January 21
January 31
$ 0.0453
February 18
February 28
0.0453
March 23
March 31
0.0453
Total for the Quarter:
$ 0.1359
The Company has paid 107 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013 and has increased its common stock distributions 25 times over the prior 28 quarters. The Company offers a dividend reinvestment plan (the "DRIP") to its common stockholders. For more information regarding the DRIP, please visit www.GladstoneLand.com.
Series B Preferred Stock(Nasdaq LANDO): $0.125 per share of Series B Preferred Stock for each of January, February and March 2022, payable per the table below:
Summary of Series B Preferred Stock Cash Distributions
Record Date
Payment Date
Amount
January 21
January 31
$ 0.125
February 18
February 28
0.125
March 23
March 31
0.125
Total for the Quarter:
$ 0.375
The Company has not skipped, reduced, or deferred a monthly Series B Preferred Stock distribution to date.
Series C Preferred Stock(Unlisted): $0.125 per share of Series C Preferred Stock for each of January, February and March 2022, payable per the table below:
Summary of Series C Preferred Stock Cash Distributions
Record Date
Payment Date
Amount
January 26
February 4
$ 0.125
February 24
March 4
0.125
March 25
April 4
0.125
Total for the Quarter:
$ 0.375
The Company has not skipped, reduced, or deferred a monthly Series C Preferred Stock distribution to date.
Series D Preferred Stock (Nasdaq:LANDM): $0.104167 per share of Series D Preferred Stock for each of January, February and March 2022, payable per the table below:
Summary of Series D Preferred Stock Cash Distributions
Record Date
Payment Date
Amount
January 21
January 31
$ 0.104167
February 18
February 28
0.104167
March 23
March 31
0.104167
Total for the Quarter:
$ 0.312501
The Company has not skipped, reduced, or deferred a monthly Series D Preferred Stock distribution to date.
Earnings Announcement:
The Company also announced today that it plans to report earnings for its fourth quarter ended December 31, 2021, after the stock market closes on Tuesday, February 22, 2022. The Company will hold a conference call on Wednesday, February 23, 2022, at 8:30 a.m. EST to discuss its earnings results. Please call (877) 407-9046 to join the conference call. An operator will monitor the call and set a queue for questions.
A conference call replay will be available after the call and will be accessible through March 2, 2022. To hear the replay, please dial (877) 660-6853 and use playback conference number 13725346.
The live audio broadcast of the Company's conference call will also be available online at www.GladstoneLand.com.
About Gladstone Land:
Gladstone Land is a publicly-traded real estate investment trust that invests in farmland located in major agricultural markets in the U.S., which it leases to farmers. The Company currently owns 164 farms, comprised of approximately 113,000 acres in 15 different states and 45,000 acre-feet of banked water in California, valued at approximately $1.5 billion, in the aggregate. Additional information can be found at www.GladstoneLand.com.
For stockholder information on Gladstone Land, call (703) 287-5893. For Investor Relations inquiries related to any of the monthly dividend-paying Gladstone funds, please visit www.GladstoneCompanies.com.
For further information: Gladstone Land Corporation, +1-703-287-5893
SOURCE: Gladstone Land Corporation
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ZTS is still too pricey for me.
Dew, Yes, Gladstone (LAND) looks like a better bet. It's already had a big move, but there aren't many passive vehicles available for investing in farmland.
Gladstone focuses mainly on fresh produce, which is more profitable than commodity crops like corn, wheat, soy, etc. I figure having some Gladstone could make sense as part of a broader strategy using agro related ETFs (MOO), individual stocks (DE), etc.
Btw, any thoughts on Zoetis? That has been a great long term stock, and the recent selloff has it in oversold territory.
The acquisition eliminates any interest I might have had in buying FPI.
Farmland Partners - >>> This Farm REIT Just Made a Giant Change
Farmland Partners has recently been dealing with unusually complicated issues, but the REIT just completed a deal that makes the company even more complex.
Motley Fool
by Reuben Gregg Brewer
Jan 6, 2022
https://www.fool.com/investing/2022/01/06/this-farm-reit-just-made-a-giant-change/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
Farmland Partners is working through some legal issues after successfully defending itself against a short seller.
The farmland REIT just bought a new business, expanding its reach.
Farmland Partners is now even more complex, which could be good or bad, depending on how you look at investing.
Farmland is an interesting asset class that has been gaining the attention of institutional buyers. The logic is pretty simple: No new farmland is being created. In fact, farmland is often repurposed for homes and other types of real estate development.
Real estate investment trust (REIT) Farmland Partners (NYSE:FPI) is looking to take advantage of this scarcity -- only this REIT's story isn't quite so simple.
The value of a farm
Farmland Partners estimates that there's about $2.5 trillion worth of farmland in the U.S., a valuation that's on par with the rental-apartment market. Of that amount, only about 1% of farmland is owned by institutions like pension funds, versus 5% for apartments. So there's material opportunity for growth here.
There's also material appeal on a risk-adjusted basis. During the past 30 years, the standard deviation, a measure of volatility, for farmland is about 7.5%, compared to nearly 22% for the S&P 500 Index. This difference leads to a Sharpe ratio, a measure of risk-adjusted performance, of 1.2 for farmland versus 0.4 for the S&P 500 Index.
Notably, the average REIT has a Sharpe ratio of 0.4 as well, so this is really about the unique nature of farmland, not property in general. Basically, if you are looking for slow and steady growth, farmland fits the bill. And, even better, farmland returns don't correlate highly with other assets, meaning they can help with diversification.
On that basis, you'd think Farmland Partners would be a slam-dunk investment option. Unfortunately, it was hit by a short-selling scheme a few years ago that necessitated a dividend cut to ensure liquidity during a legal battle. By comparison, peer Gladstone Land has been able to continue growing and raising its dividend in the absence of legal distractions.
Farmland Partners' efforts to fight back was largely successful, getting a damaging report about the company retracted. Unfortunately, the company is still battling related shareholder-class action lawsuits, even though the short-seller claims were debunked. So this REIT is something of a turnaround play in that regard.
A big change
That said, Farmland Partners just made an acquisition that shifts the picture even more than the short-seller fiasco. In late 2021, Farmland Partners bought Murray Wise Associates. According to the news release announcing the deal, Murray Wise, the chief executive officer of Murray Wise Associates, founded Westchester Group, which is the largest institutional farmland asset manager. He started Murray Wise Associates as a spinoff of Westchester Group's brokerage, auction, and farm-management business when Westchester was acquired by the pension fund Teachers Insurance and Annuity Association in 2010.
Essentially, the goal here is for Farmland Partners to add an asset-management operation to its business. This pushes Farmland Partners beyond the typical REIT configuration, in which companies own properties and pass the income they generate from rents on to investors. Now, Farmland Partners will also help farmers buy and sell properties, create and manage institutional partnerships, and even directly manage farms on behalf of others, earning fees for the effort.
Farmland Partners is really looking to become a one-stop shop for farm investing, but that will make it a much more complicated company for investors to track and understand. If you like to keep things simple, this already complicated story just got even more complicated.
That said, for investors willing to watch their investments more closely, Farmland Partners' new business direction could be an interesting opportunity. Essentially, with one investment, you get broad exposure to farmland, including property ownership, property brokerage, and property management. That provides multiple avenues for growth in what is a large and underinvested asset class.
There's one caveat, however: The REIT is planning to focus on business growth and expects its dividend yield, now about 1.6%, to be fairly modest. So, income-focused investors probably won't like the stock.
So who should buy Farmland Partners?
At the end of the day, Farmland Partners' new business model will allow investors to access the farmland sector in a broad and diversified way. That's the good news. The bad news is that this change suggests that this already low-yielding REIT will remain that way even as it moves past its legal headwinds, limiting its appeal to growth-oriented investors and those looking for asset classes with low correlations to other investments.
If that sounds like you, then a deep dive could be appropriate. If you prefer simple investments, however, then Farmland Partners, despite operating in an interesting property niche, probably won't appeal to you.
<<<
Gladstone Land - >>> Forget Bitcoin: I'm Buying This Under-the-Radar REIT
This real estate investment trust offers similar benefits to investing in Bitcoin, with less volatility.
Motley Fool
by Matthew DiLallo
Jan 3, 2022
https://www.fool.com/investing/2022/01/03/forget-bitcoin-im-buying-this-under-the-radar-reit/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article
Key Points
Investing in farmland is a better inflationary hedge because it's less volatile and generates income.
Farmland REIT Gladstone Land is a good way to invest in farmland.
Like many people, I've been thinking about buying some Bitcoin (CRYPTO:BTC). The main reason is to hedge against inflation, which has been running hot this year. However, I haven't purchased any because it's so volatile. The cryptocurrency has had several large declines from its all-time high, including more than 50% earlier this year.
Because of that, I've started looking elsewhere than cryptocurrency for an inflation hedge. While I also considered investing in gold, I've homed in on an under-the-radar real estate investment trust (REIT) that offers many of the same benefits to buying Bitcoin, plus some additional ones without the stomach-churning volatility.
That REIT is farmland-focused Gladstone Land (NASDAQ:LAND). Here's why I plan to buy it instead of Bitcoin as an inflation hedge.
Why farmland?
Before we dig into Gladstone Land, I wanted to lay out the case for farmland as an investment. Since 1991, farmland has delivered higher cumulative returns than all other major asset classes except REITs. Further, farmland has produced those higher returns with less volatility than all but two major asset classes (CDs and AAA-rated bonds). In fact, since 1991, farmland hasn't had a single down year, whereas gold, the stock market, and Bitcoin have all experienced declines of more than 50% from their highs.
Two factors drive farmland's ability to deliver attractive returns: annual cash rent and land value appreciation. Farmland generates an income yield for its investors, making it stand out from other inflationary hedges like gold and Bitcoin, which don't produce income. Meanwhile, farmland benefits from inflation because land values tend to rise by at least the inflation rate. These factors make farmland an excellent inflation hedge.
Digging into Gladstone Land
Gladstone Land currently owns 164 farms comprising about 113,000 acres across 15 states. Its farms primarily grow fresh produce, like fruits and vegetables, or permanent crops, such as berries and nuts. These types of farms tend to be better investments than those that grow commodity crops (e.g., corn, wheat, and soy) because they experience less price volatility and government dependence, as well as lower storage costs.
Gladstone primarily leases its farms to farmers under long-term triple net leases, making the tenant responsible for insurance, maintenance, and real estate taxes. These leases typically include a fixed cash payment with annual escalations, upward market adjustments, or participation features, such as a percentage of the farm's gross revenue.
Those lease terms provide Gladstone Land with a nice inflation buffer. It typically ties annual rent escalations to the inflation rate. Meanwhile, participation features provide upside to higher prices, with fresh produce historically outpacing the historical inflation rate by 1.5 times since 1980. In addition to its inflation-protected lease income, Gladstone's farms benefit from rising land values, providing another layer of inflation protection.
However, Gladstone Land is more than an inflation hedge. The farmland REIT has a long history of growing value for shareholders by expanding its farm portfolio through acquisition. For example, it bought five new farms across three states and some additional water access for $62.3 million in the third quarter. Since its initial public offering (IPO) in 2013, Gladstone has grown its farm portfolio from less than $200 million to nearly $1.4 billion today.
Combined with rising lease income, its steady diet of acquisitions has enabled Gladstone to grow its cash flow per share and dividend at attractive rates. Gladstone has increased its monthly dividend 24 times in the last 27 quarters, raising it by 50.7% overall. It aims to continue expanding that payout in the future at a rate that outpaces inflation. Overall, Gladstone Land has delivered 14.6% compound annual total returns for its shareholders since its IPO.
All the benefits of Bitcoin (and more) -- without the volatility
One of the premises of investing in Bitcoin is it can be an inflation hedge. While the cryptocurrency's returns have certainly outpaced inflation over the years, they have been extremely volatile.
That's why I've decided to forget about using Bitcoin to hedge against inflation. Instead, I plan to invest in farmland through little-known REIT Gladstone Land. It has a long history of delivering inflation-beating returns with a lot less volatility than Bitcoin, which seems likely to continue in the future.
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https://www.facebook.com/BlackBirdBiotech/photos/a.104745075121722/236949158567979/
>>> Gladstone Land Acquires Additional Farmland in Florida
Acesswire
December 20, 2021
https://finance.yahoo.com/news/gladstone-land-acquires-additional-farmland-133000518.html
MCLEAN, VA / ACCESSWIRE / December 20, 2021 / Gladstone Land Corporation (NASDAQ:LAND) ("Gladstone Land") announced that it has acquired 1,204 gross acres of farmland, including 975 farmable acres, located north of Fort Myers, Florida, for approximately $7.4 million. In connection with the acquisition, Gladstone Land entered into a five-year, triple-net lease agreement with the seller and current tenant. The property is farmed primarily for sod, melons, and cattle.
"We are very pleased to add this versatile property to our portfolio," said Bill Frisbie, Executive Vice President of Gladstone Land. "Demand for farmable acreage in Florida continues to increase, and we are excited to partner with a very strong tenant who will manage the property well."
"The acquisition of this farm adds to our existing properties in the Southeast and is another good, long-term investment for us," said David Gladstone, President and CEO of Gladstone Land. "We have had a strong year in 2021 with acquisitions and look forward to another good year in 2022."
About Gladstone Land Corporation:
Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. and leases its properties to unrelated third-party farmers. The company, which reports the aggregate fair value of its farmland holdings on a quarterly basis, currently owns 164 farms, comprised of approximately 113,000 acres in 15 different states and 45,000 acre-feet of banked water in California, valued at approximately $1.5 billion. Gladstone Land's farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The company also owns farms growing permanent crops, such as almonds, apples, cherries, figs, lemons, olives, pistachios, and other orchards, as well as blueberry groves and vineyards, which are generally planted every 10 to 20-plus years and harvested annually. The company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. Gladstone Land pays monthly distributions to its stockholders and has paid 106 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The company has increased its common distributions 24 times over the prior 27 quarters, and the current per-share distribution on its common stock is $0.0452 per month, or $0.5424 per year. Additional information, including detailed information about each of the company's farms, can be found at www.GladstoneLand.com.
<<<
Name | Symbol | % Assets |
---|---|---|
Deere & Co | DE | 8.22% |
Zoetis Inc Class A | ZTS | 8.15% |
Bayer AG | BAYN.DE | 6.98% |
Nutrien Ltd | NTR.TO | 6.44% |
Corteva Inc | CTVA | 5.61% |
Archer-Daniels Midland Co | ADM | 5.56% |
Tyson Foods Inc Class A | TSN | 3.90% |
Kubota Corp | 6326.T | 3.64% |
Bunge Global SA | BG | 3.62% |
CNH Industrial NV | CNHI | 3.49% |
Name | Symbol | % Assets |
---|---|---|
Deere & Co | DE | 22.26% |
Archer-Daniels Midland Co | ADM | 7.88% |
Corteva Inc | CTVA | 6.92% |
Nutrien Ltd | NTR.TO | 5.69% |
Lamb Weston Holdings Inc | LW | 3.19% |
CF Industries Holdings Inc | CF | 3.12% |
Bunge Global SA | BG | 3.09% |
Kubota Corp | 6326.T | 3.07% |
CNH Industrial NV | CNHI | 2.48% |
The Mosaic Co | MOS | 2.42% |
Name | Symbol | % Assets |
---|---|---|
Deere & Co | DE | 23.41% |
Corteva Inc | CTVA | 9.83% |
Archer-Daniels Midland Co | ADM | 8.01% |
Nutrien Ltd | NTR.TO | 7.73% |
Lamb Weston Holdings Inc | LW | 5.04% |
Bunge Global SA | BG | 4.96% |
Ingredion Inc | INGR | 4.78% |
CF Industries Holdings Inc | CF | 4.45% |
The Toro Co | TTC | 4.06% |
Darling Ingredients Inc | DAR | 3.57% |
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