Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin, and I will be your conference operator today. At this time, I would like to welcome everyone to the Farmland Partners, Inc. Q2 2025 Earnings Call. [Operator Instructions]. I would now like to turn the call over to Luca Fabbri, President and CEO. Please go ahead.

Thank you, Kelvin. Thank you, everybody, and good morning. Thanks for joining us today for this second quarter 2025 Earnings Conference Call and Webcast. I will start as usual with some customary preliminary remarks from our General Counsel, Christine Garrison. Christine?

Thank you, Luca, and thank you to everyone on the call. The press release announcing our second quarter earnings was distributed after market closed yesterday. The supplemental package has been posted to the Investor Relations section of our website under the sub header Events and Presentations. For those who listen to the recording of this presentation, we remind you that the remarks made herein are as of today, July 24, 2025, and will not be updated subsequent to this call. During this call, we will make forward-looking statements, including statements related to the future performance of our portfolio, our identified and potential acquisitions and dispositions, impact of acquisitions, dispositions and financing activities, business development opportunities as well as comments on our outlook for our business rent and the broader agricultural markets. We will also discuss certain non-GAAP financial measures, including net operating income, FFO, adjusted FFO, EBITDAre and adjusted EBITDAre. Definitions of these non-GAAP measures as well as reconciliations to the most comparable GAAP measures are included in the company's press release announcing second quarter 2025 earnings, which is available on our website, farmlandpartners.com, and is furnished as an exhibit to our current report on Form 8-K dated July 23, 2025. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations, and we advise listeners to review the risk factors discussed in our press release distributed yesterday and in documents we have filed with or furnished to the SEC. I would now like to turn the call to our Executive Chairman, Paul Pittman. Paul?

Thank you, Christine. My comments will be relatively short this morning. I'll be, of course, available in the Q&A. This is a very good quarter for us. Land values have continued to stay strong in the Midwest as is demonstrated by the gains on the asset sales we made in that geography. We also have now liquidated nearly all of the portfolio that we owned in Colorado. We still have a very modest exposure there, one cattle feedlot that we still own as well as just a handful of row crop farms. We -- as we talked about several months ago and several years ago, long-term water concerns on the Eastern Plains of Colorado drove us to decide to exit the market. I'm happy to say we did exit the market with substantial gains on sale. California is still struggling. You've seen, and I'm sure in the press release that we took a write-down on a handful of farms out there. Luca will address this a little more in his comments. Our position when we think about write-downs is really that we are long-term investors. So as long as we think a farm's value will recover, we're not concerned about some given farm in our neighborhood sold high or sold low, it doesn't really affect our direct thinking about the value of our farms. We think about most of our farms and what is the value in a 2- to 5-year or longer time frame. This group of farms, though, that we took the write-downs on, we had reached a point where we believed that due to the crop types and the fact that they are specialty crops, and the water issues in the region that we needed to take a write-down, and so we did. And what happens here just in a kind of common sense way is particularly on specialty crop farms, the idea that you can wait forever for a recovery -- value is just not true. In traditional row crop, long-term appreciation will always help you out. The problem you have in specialty crops is that while you're waiting, the trees on the ground are aging out. So you're losing a year of productivity every year, you wait and you're going to have to bulldose those trees out and replant them. And so those factors led us to take this write-down. As I said, Luca will talk a little more about it, we can touch that in the Q&A. The other thing I want to address just briefly because it's been -- it was in the press as recently as the last couple of days, is this idea that Coca-Cola is going to replace a high fructose corn syrup with regular cane sugar syrups as the sweetener in Coca-Cola. And what does that mean to the marketplace? What does it mean to corn markets, so on and so forth. So a couple of kind of important facts. First, this is, from an overall corn market perspective, an incredibly small percentage of the market. So high fructose corn syrup is around -- accounts for around 3% of total corn produced in the country. There's a University of Illinois research piece that was put out yesterday by a professor called Scott Irwin. That's where I get that number from, if you want to go look it up. So about 3% of the market. And then Coca-Cola, of course, is a fraction of that fraction. So the specific Coca-Cola issue is de minimis in the extreme. The entire high fructose corn syrup market is pretty small as well as a percentage of the overall corn production. Now just to the science of it for a second. Certainly, my view is that there's never been any really credible research that the type of sweetener has significant, meaningful, measurable impacts on health outcomes. The percentage of glucose, fructose and sucrose are modestly different in the different types of sweeteners. But the -- but there's really no difference, no research that shows any kind of health difference between those types of sweeteners. The fundamental issue is that we probably all eat too much sugar. No matter what the form. So hopefully, this doesn't turn into a significant thing, even if, I think the science will dominate at least for most food products what -- high fructose corn syrup is, is an incredibly low-cost source of sweetening, much cheaper than cane sugar in most cases. And so hopefully, like I said, the science kind of wins here. Even if it doesn't, I think the point is it's just not that big a piece of the corn market. With that, I'll turn it over to you, Luca, to make your comments.

Thank you, Paul. And just to add a couple of kind of finer points to this last topic that Paul was addressing. Coca-Cola is proposing to not replace its regular product based on HFCS, but to add a new product that uses cane sugar. And by the way, in most grocery stores, you already can find that product. It's typically referred to as Mexican Coke or Mexican Fanta because it comes from the company's manufacturing facilities in Mexico that use cane sugar. The other important thing that you have to think about is that still, this is a product that comes from agriculture, comes from -- is produced on farmland. And that's still in the overall picture of Farmland as an asset class, this is reconfirming that even in shifting consumer preferences from one product to another, whether it's HFCS Coke versus cane sugar Coke or organic versus traditional fruits and vegetables, at the end of the day, everything comes from Farmland, and that strengthens the value proposition of Farmland as an asset class, which I'll return to as a point here in a minute. Kind of going back to the performance of the company in the last quarter, specifically, as Paul mentioned, we have completed some additional asset dispositions. Year-to-date, so far, we've sold about $80 million in assets, realizing gains of approximately $25 million. And as Paul was saying, mostly these sales were in the High Plains, which is a region that we intended to exit long term anyway. And about this time, we also sold some mostly Class B soil farms in Illinois, so not the top of the kind of quality scale that in our portfolio in the corn belt. One thing that I wanted to highlight is that the buyers in the two major transactions that we've done so far this year were family offices. These are super ultra-high net worth individuals and families that have access to all sorts of assets and investment vehicles and so on and so forth. And they are choosing to put their money in Farmland. And this really strengthens the value of Farmland as both a very reliable long-term store of value as well as a long-term appreciation play. And this goes back to our kind of the reason why we started our company years ago, which is to make this asset class accessible not only to high net worth individuals, but also to everyday kind of investors, like the vast majority of our investor base. We used a portion of the proceeds from these asset sales in stock repurchases. So far this year, we bought back about 2.3 million shares, which is about 5% of our fully diluted shares outstanding prior to the buybacks at an average price of about $11.24, which we consider very attractive, and that was a total of about $26 million that we used in these stock repurchases. The last point I wanted to discuss, as Paul mentioned, this quarter, we took a relatively unusual step of recording some impairments on some of our farms. Specifically, these were four farms in California. And the vast majority of those $16.8 million impairments were on two very specific farms. One is a pistachio farm that has a kind of very delicate water situation, delicate not from a physics and physical availability of water standpoint necessarily, mostly from a regulatory standpoint, meaning that because of California regulations on water access, this farm will be progressively more and more challenged in accessing the -- in being able to use water to the extent necessary to support production farm-wide. And which is why we decided to take this impairment because we don't see this water situation resolving at all, given that, it's regulatory driven. The other one is a much smaller farm, our only walnut farm in our portfolio. And there, in addition to the regulatory water issue that led to the impairment of the first farm, we also had a longer-term view that walnuts as a crop are in a delicate position, especially in the U.S., given the significant production worldwide that emerged in China and therefore, has made that crop relatively less attractive as an investment in the U.S. So we don't see that situation resolving itself. Those were all the comments I wanted to highlight. So with that, I will now turn the call over to our Chief Financial Officer, Susan Landi, for her overview of the company's financial performance. Susan?

Thank you, Luca. I'm going to cover a few items today, including a summary of the three and six months ended June 30, 2025, a review of capital structure, comparison of year-to-date revenue and updated guidance for 2025. I'll be referring to the supplemental package, which is available in the Investor Relations section of our website under the sub header Events and Presentations. First, I'll share a few financial metrics that appear on Page 2. For the three months ended June 30, 2025, net income was $7.8 million or $0.15 a share available to common shareholders, which is higher than the same period for 2024, primarily due to gains on dispositions of 32 properties during the current quarter in addition to lower G&A costs and interest expenses and higher interest income. AFFO was $1.3 million or $0.03 per weighted average share, which is higher than the same period of 2024. AFFO was positively impacted by significantly lower interest expense as a result of our debt reductions and higher interest income due to increased activity under the FPI Loan Program. For the six months ended June 30, 2025, net income was $9.9 million or $0.18 a share available to common stockholders, which is higher than the prior year, largely due to the impact of 34 dispositions that occurred in the current year-to-date period. In addition to significant debt reductions resulting in interest savings, lower G&A expenses as well as interest -- increased interest income due to a higher balance on loans under the FPI Loan Program. AFFO was $3.6 million or $0.08 per weighted average share, which is higher than the same period for 2024. AFFO was positively impacted by lower interest expense, higher interest income and proceeds from a solar lease arrangement with a tenant. Next, we'll cover some operating expenses and other items that you can find on Page 5. Gain on disposition of assets is higher due to the dispositions of the 34 properties in 2025 that had an aggregate consideration of $81.6 million, resulting in a net gain on sale of $25 million compared to a loss of $0.1 million in 2024, which was related to the sale of fixed assets. There were no property dispositions in the first half of 2024. As a result of significant reductions in debt that occurred since October of 2024, interest expense decreased $2.8 million during the quarter versus the same quarter in the prior year and $5.2 million year-to-date versus the prior year. In addition, the dispositions resulted in lower property operating expenses and depreciation expenses. General and administrative expenses decreased for the three and six months ended June 30, 2025, primarily due to a onetime severance expense of $1.4 million during the 6-month period in June of 2024, which is partially offset by slight increases in other expenses in the current period. Moving on to Page 12. There's a few capital structure items that I'd like to point out. We had undrawn capacity on the lines of credit of approximately $160 million as of June 30, 2025. We had no debt subject to interest rate resets in 2025 and as a result of our swap, no exposure to variable interest rates with the exception of whatever we draw on our line of credit. In addition, we have repaid our lines of credit in full with payments totaling $23 million in early July. Page 14 will break down the different revenue categories then along with some comments at the bottom to describe the differences between those periods. A few points to highlight are, as expected, fixed farm rent decreased largely due to dispositions in the last half of 2024 and thus far in 2025. Solar, wind and recreation changes were caused primarily by proceeds from the solar revenue sharing arrangement with the tenant that we received in the first quarter of 2025 and partially offset by dispositions. Management fees and interest income increased primarily due to the increased loan activity under the FPI Loan Program. Page 15 has our outlook -- our updated outlook for 2025. You can find the assumptions listed at the bottom of the page. On the revenue side, changes from the May guidance include the expected decrease in fixed farm rent as well as solar, wind and recreation rent due to property dispositions that occurred in the current period, an increase in management fees and interest income as a result of increased activity on the FPI Loan Program and changes in variable payments, crop sales and crop insurance as a result of updated outlook on properties with variable rent and properties that we directly operate. On the expense side, changes from the May guidance include an increase in impairment related to the current period impairment expense for certain properties in the West Coast, an increase in the gain/loss on disposition of assets due to the 32 property dispositions that closed in Q2, a decrease in interest expense due to a lower average balance outstanding on the debt as a result of principal repayments during the current quarter and subsequently in July and a decrease in weighted average shares related to the impact of the share repurchases that we've made since May. The forecasted range of AFFO is $12.8 million to $15.5 million or $0.28 to $0.34 per share. This summarizes where we stand today. We will keep you updated as we progress through the year. This does wrap up our comments for this morning. Thank you all for participating. Operator, you can now begin the Q&A session.

Ladies and gentleman we will now began the question and answer session. [Operator Instructions]. Your first question comes from the line of Robert Stevenson with Janney.

Luca, how much more can you guys sell in 2025 given the multiyear disposition program that you guys have been operating under?

So, so far this year, we've -- we actually have done three sale transactions that count under the rules. So we are -- we have four more transactions. So we are really relying this year on the safe harbor, based on seven transactions rather than the dollar amount because of the prior history on sales. And therefore, the total dollar amount will, of course, very much depend on the potential size of each of those remaining four transactions, assuming that we do all the four..

Okay. And if you do all four of those, is that trending towards needing to pay a special dividend again at the end of the year -- this year?

Very hard to say because it also depends on -- given the dynamics between GAAP accounting and tax accounting. For example, if we end up selling some of the farms where we recorded impairments, those impairments will turn into tax -- we will have a tax impact. And so it's really hard to tell at this point.

Okay. And then I guess the opposite side of that coin, how are you guys thinking about acquisitions? Does anything really make sense at this point, especially versus repaying debt and buying back stock? How are you guys thinking about capital deployment in the back half of this year?

Luca, I'll take this one. So as far as capital deployment goes, Rob, we are very disciplined in terms of acquisition strategy right now. a farm that joins something we already own comes up, or especially good bargain for some reason comes up, we'd certainly look at it. But we're pretty slow in terms of our pursuit of acquisition opportunity for the reasons you stated. Buying back stock is a more -- in most cases, more effective. We're still long-term believers as you can see with what we've done in the last year or two, we are much, much more concentrated on the U.S. Midwest, Illinois, in particular, part of the marketplace. That gives us a much, much safer and more stable portfolio than we have had in the past. The only downside is it's relatively low current yield because cap rates in that margin -- in that region because of the safety are pretty low. But the long-term appreciation in that region is better than anywhere else. And so long-winded answer, but we're just not very acquisitive and not likely to be.

Okay. Susan, the legal and accounting guidance went up about $300,000 at both the low and high end. Anything major driving that increase?

Again, I'll just address that. Nothing really significant. We have an ongoing tenant dispute on a Louisiana farm from long ago and not -- we don't believe we did anything wrong. We've never been -- never had one of these disputes in the past. That being said, we thought it was appropriate to kind of expect to pay some money at some point in the future because we'll probably settle it at some point. So that's what's driving that.

All right. And then the last one for me. The preferred units are eligible for conversion in a little over six months. Any thoughts at this point on how you guys might address those?

Yes. There will be almost no chance that we convert those into shares. Given that our stock is so deeply undervalued, we will pay that off either with cash from asset sales or from borrowings under our lines of credit. There is no -- I shouldn't probably say 100%. So there's a 99% probability that, that is not going to be converted.

Your next question comes from the line of Craig Kucera of Lucid Capital Markets.

I want to circle back to the pickup in variable payment expectations. Was that entirely due to sort of an improved outlook on the citrus and avocados? Or did you restructure any leases to have a larger variable payment component like one of your competitors has been doing?

Susan or Luca, you need to take that, I don't know the specific facts.

Yes. No, we haven't -- we haven't had the need to restructure any lease arrangements. So it's just essentially based on crop dynamics. And as we refined our views throughout the year, we have a better view on crop yields and crop prices. Susan, I don't know if there's anything else you want to add?

No, I don't have anything else.

Okay. That's helpful. Changing gears, we're hearing more and more about some tighter lending to farmers and your loan portfolio has nearly tripled since the third quarter of last year. Are you seeing rising demand? And is there a ceiling on what that portfolio might be as a percentage of assets?

Yes, I'll take that. So yes, we do see more and more inquiries about farm lending. There's -- we're in a somewhat difficult, I won't say very difficult, but somewhat difficult operating environment for farmers, for row crop farmers in particular. So we would expand that lending program, if there were good loans to make modestly. That being said, we don't want that to become too big a percentage of our portfolio at any point in time, just because it's -- our core business is owning farmland, not loans. We like that business. We like the loan business because of the returns. It certainly helps us generate cash flow for dividends and operating overheads, but we're not likely to expand it significantly. No.

Okay. Got it. I want to circle back to the impairment charges you took in California, kind of the back of the envelope, looks like it was about 6% of your sort of total cost basis there. But you mentioned most of it was at two farms. Can you give us a sense of what the write-down was on a percentage basis at those farms? Is it somewhere in the order of 30% at several?

On one farms where we took the majority of that impairment was actually a little over 50%. We were very aggressive. We want to just take -- bite the bullet once, to be honest. I don't know if you have handy the details, that's the one I remember off the top of my head.

Yes. They're both in the neighborhood of about 50%, the two large ones.

When you -- let me just add to that. When you see the regulatory environment fundamentally take away about half of your water on a California farm, it is incredibly detrimental to the value. And that's what's going on out there. And so that's -- we took pretty significant write-downs on those farms for that reason.

Got it. And just one more for me. I mean, just given you took the charges, I know you look longer term, 2 to 5 years or even longer. Are you actively looking to sell some farms in California? And is there a bid?

Yes, there's -- we are actively looking. We've got a couple of the farms we took the impairments on actually listed, and we're trying to see if we can get them sold because we just -- when we decide a farm isn't going to -- you don't want to day trade, if you will, farmland. That's not how to do it. You don't even want a yearly trade farmland. What you want to do is basically hold for long-term appreciation potential. But once you decide that something is in trouble and going to stay in trouble for a meaningful period of time, half a decade or more, and you're losing money on it owning it when you think about your cost of capital and everything else, you just got to get rid of it. And so we're going to get rid of it. And yes, there are bids out there. You just have to be disciplined on not asking too much. I think some investors are unwilling to do what we did and just take the write-down and then reprice the asset and see if you can move it.

Your next question comes from the line of John Massocca of B. Riley Securities.

If I look at the full year outlook, like not that there were huge moves, but variable payments kind of increased versus your last providing guidance in crop sales came down a little bit. And I'm guessing I'm imagining that's just crop type mix. And maybe can you provide any color on kind of how the various pushes and pulls are there in terms of crop type, what's doing well, what's doing poorly and maybe kind of why?

Yes. Let me just address that in a very general sense. And if somebody wants to add specifics from the rest of the team, they can. What happens here is about once each quarter, we reevaluate the budget for both the farms we're operating, which is crop sales, generally speaking, a handful of farms that we direct operate. And again, for everybody's benefit, direct operate doesn't mean we have employees. It means we have a contract with some farmer, but we're taking the economic risk on the crop. And then variable payments is, of course, crop share leases or bonus leases in California. So what happens on that once-a-quarter review is the crop, you start with a good base budget-- base budget based on what happened last year and what happened in average in the last five years, et cetera, et cetera. And then you refine it as you get into the crop season and you actually can see the fruit on the trees. And so all that's happening here is we're seeing certain types of farms do a little better than we expected. In the second quarter, in particular, you see the citrus harvest get essentially completed. It goes on in the first and second quarter. You now can look at the tree nuts, which are of late summer or early fall harvested crop. You can start seeing whether you've got a really high volume of nuts on the tree or not, so on and so forth. And we make some adjustments and budgeting updates based on that, and that's what's driving those numbers.

That makes sense. Maybe on California specifically, how much kind of--how long was kind of the outlook into some of these water issues in some of the farms that you took the write-down in? And I guess, are there any other farms in the portfolio today that are at risk of kind of having some of these issues with access to water just given the regulatory change? Or is it something that's -- I guess, kind of how sudden is it? And how much kind of -- how far over the horizon can you see when some of these water regulatory issues are going to occur?

Well, so on the water regulatory issue, most of this is based on what's called SGMA, which was a groundwater management law that was put into place four or five years ago now. And then as -- and the implementation of SGMA is largely based on water districts or counties, kind of smaller subunits, not the whole state, coming up with plans. As those plans are developed, you basically hopefully get to a point in which you've got maybe a worse water situation than you used to have based on the regulations, but at least you now have predictability and certainty. So that process is largely well underway in most water districts and counties in California. So what we were seeing here and like take -- in particular, the pistachio farm, what came out of that regulatory process and that water district process as it came to the final rules related to the SGMA law was pretty negative. And that's why we took that big write-down on the pistachio farm. So if we believe there was a need to write something else down, we would have already done it. So hard to answer with certainty, but we don't see anything we're going to write down right away where we would have done it now. I can't tell you because it's this whole SGMA thing is probably 75% done, not 100% done at this point, what other sort of turn may occur that leads us to need to write something down. But right now, we don't see any need to.

Okay. And when you say like -- I know you're using rough numbers, but the SGMA thing is about 75% done. Is that like 75% of water districts kind of already have their plans in place? Or is that something are we...

Yes, that's what I meant by that. And...

And then last one is on the balance sheet. How should we kind of think about utilization of the $50 million of cash you kind of have on hand today, just given prior comments on the Series A versus maybe the attractiveness of buying back stock versus debt. I mean I'm just kind of thinking like, is there a potential that you carry a relatively large cash balance through the remainder of the year, just given the preferred unit -- potential need to repay the preferred units next year?

Luca, I'm going to turn that over to you because you talk about that all the time.

Yes. As always, my answer to that question is that we -- this is a juggling of different balls, meaning of different variables on an ongoing basis. Whenever we have liquidity available, we always look at the stock price to evaluate how attractive is to go in the market and do stock repurchases to create value for the remaining shareholders, what are interest rates, what are our specific repayment opportunities on specific pieces of debt. So for example, of the $50-odd million that we have on the balance sheet as of the end of the quarter, we already used some to pay down lines of credit. So now we don't have any expensive -- pretty expensive debt outstanding at this point in time. So it's -- I know it's not the clean answer that you can plug into your model, but unfortunately, the world is not as clean and straightforward. It's just an optimization model that we run in our discussions on an ongoing basis.

Let me just add one thing to that because it's important. Right now, we're investing that cash at a positive spread above what the cost of the preferred is. So just sitting on a bunch of cash kind of waiting to pay off that preferred next year is actually making us a little bit of money right now. So that's worth keeping in mind.

There are no further questions at this time. And with that, I will turn the call back to Luca Fabbri for closing remarks. Please go ahead.

Thank you, Kelvin. We appreciate your interest in our company. Thank you again for joining us today, and we look forward to updating you on our [indiscernible] results in the coming quarters. Have a great rest of your day.

Ladies and gentlemen, this concludes today's conference call. We thank you for participating and ask that you please disconnect your lines.