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What changed in Farmland Partners Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Farmland Partners Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+209 added−204 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-29)

Top changes in Farmland Partners Inc.'s 2024 10-K

209 paragraphs added · 204 removed · 182 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

45 edited+1 added−1 removed86 unchanged
Biggest changeAggregate cash consideration for these acquisitions totaled $22.2 million ; ● We repurchased 6,551,087 shares of our common stock at a weighted average price of $11.00 per share; ● Total in debtedness decreased $76.4 million from $439.5 million at December 31, 2022 to $363.1 million at December 31, 2023; ● We increased liquidity to $206.6 million as of December 31, 2023, compared to $176.7 million as of December 31, 2022; and ● We renewed fixed cash farm leases expiring in 2023 at average rent increases of approximately 20%.
Biggest changeAggregate cash consideration for these acquisitions totaled $17.9 million ; ● We repurchased 2,240,295 shares of our common stock at a weighted average price of $12.25 per share; ● Total in debtedness decreased $158.5 million from $363.1 million at December 31, 2023 to $204.6 million at December 31, 2024; ● We increased liquidity to $245.8 million as of December 31, 2024, compared to $206.6 million as of December 31, 2023; and ● We declared a one-time special dividend of $1.15 per share of common stock and Class A Common OP Unit in December 2024, which was paid in January 2025.
Lastly, we believe that in most major U.S. agricultural markets, multiple quality farm-operator tenants compete for farmland lease opportunities. ​ We may consider investing in farmland in other countries, such as Canada, Australia or New Zealand, that, like the United States, offer virtually no land title risk, a sophisticated farm-operator tenant environment and attractive rental rates. 8 Table of Contents ​ Leased Properties ​ The business of farming carries materially more operating risk than owning and leasing farmland to farm operators, although such risk can be mitigated through crop insurance and other risk management tools.
Lastly, we believe that in most major U.S. agricultural markets, multiple quality farm-operator tenants compete for farmland lease opportunities. ​ 8 Table of Contents We may consider investing in farmland in other countries, such as Canada, Australia or New Zealand, that, like the United States, offer virtually no land title risk, a sophisticated farm-operator tenant environment and attractive rental rates. ​ Leased Properties ​ The business of farming carries materially more operating risk than owning and leasing farmland to farm operators, although such risk can be mitigated through crop insurance and other risk management tools.
As part of our acquisition due diligence process, we evaluate properties for water availability and any associated ground or surface water rights. Where appropriate, we may also invest in irrigation infrastructure to improve the productivity 10 Table of Contents of properties we own.
As part of our acquisition due diligence process, we evaluate properties for water availability and any associated ground or 10 Table of Contents surface water rights. Where appropriate, we may also invest in irrigation infrastructure to improve the productivity of properties we own.
Tenant credit risk is further mitigated by the farming industry practice of purchasing crop insurance in almost every circumstance because it is required by lenders who provide working capital financing to our tenants and due to requirements in our leases.
Tenant credit risk is further mitigated by the farming industry practice of tenants purchasing crop insurance in almost every circumstance because it is required by lenders who provide working capital financing to our tenants and due to requirements in our leases.
The terms of leases that include variable rent payments generally require the tenant to carry crop insurance protecting against crop failures and/or crop price declines. ​ 13 Table of Contents Regulation ​ Farming Regulations ​ The farmland that we own and intend to acquire in the future is typically used for growing crops and is subject to the laws, ordinances and regulations of state, local and federal governments, including laws, ordinances and regulations involving land use and usage, water rights, treatment methods, disturbance, the environment and eminent domain. ​ Farmland is principally subject to environmental and agricultural laws, ordinances and regulations.
The terms of leases that include variable rent payments generally require the tenant to carry crop insurance protecting against crop failures and/or crop price declines. ​ Regulation ​ Farming Regulations ​ The farmland that we own and intend to acquire in the future is typically used for growing crops and is subject to the laws, ordinances and regulations of state, local and federal governments, including laws, ordinances and regulations involving land use and usage, water rights, treatment methods, disturbance, the environment and eminent domain. 13 Table of Contents ​ Farmland is principally subject to environmental and agricultural laws, ordinances and regulations.
In addition, we offer a loan program (the “FPI Loan Program”) pursuant to which we make loans to third-party farmers (both tenant and non-tenant) to provide financing for property acquisitions, working capital requirements, operational farming activities, farming infrastructure projects and for other farming and agricultural real estate related projects. ​ FPI Agribusiness Inc., a wholly owned subsidiary (the “TRS” or “FPI Agribusiness”), is a taxable REIT subsidiary that was formed to provide volume purchasing services to the Company’s tenants and to directly operate farms under certain circumstances.
In addition, we offer a loan program (the “FPI Loan Program”) pursuant to which we make loans to third-party farmers (both tenant and non-tenant) and landowners to provide financing for property acquisitions, working capital requirements, operational farming activities, farming infrastructure projects and for other farming, agricultural and other real estate related projects. ​ FPI Agribusiness Inc., a wholly owned subsidiary (the “TRS” or “FPI Agribusiness”), is a taxable REIT subsidiary that was formed to provide volume purchasing services to the Company’s tenants and to directly operate farms under certain circumstances.
We believe that diversification within and across core farming regions and crop types provides significant annual and long-term risk mitigation to our investors. Nevertheless, our farmland may experience periodic droughts and other significant weather events, such as tornadoes, hurricanes and floods. ​ We perform a due diligence review with respect to each potential property acquisition.
We believe that diversification within and across core farming regions and crop types provides significant annual and long-term risk mitigation to our investors. Nevertheless, our farmland may experience periodic droughts and other significant weather events, such as tornadoes, hurricanes, wildfires and floods. ​ We perform a due diligence review with respect to each potential property acquisition.
If we fail to qualify for taxation as a REIT in any taxable year and do not qualify for certain statutory relief provisions, our income for that year will be subject to tax at regular corporate rates, and we would be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify as a REIT.
However, if we fail to qualify for taxation as a REIT in any taxable year and do not qualify for certain statutory relief provisions, our income for that year will be subject to tax at regular corporate income tax rates, and we would be disqualified from taxation as a REIT for the four taxable years following the year during which we ceased to qualify as a REIT.
Laws related to upkeep, safety and taxation requirements may result in significant unanticipated expenditures, loss of our properties or other impairments to operations, any of which would adversely affect our cash flows from operating activities. ​ Environmental Matters ​ As an owner of real estate, we will be subject to various federal, state and local environmental laws, regulations and ordinances and also could be liable to third parties resulting from environmental contamination or noncompliance at our properties.
Laws related to upkeep, safety and taxation requirements may result in significant unanticipated expenditures, loss of our properties or other impairments to operations, any of which would adversely affect our cash flows from operating activities. ​ Environmental Matters ​ As an owner of real estate, we are subject to various federal, state and local environmental laws, regulations and ordinances and also could be liable to third parties resulting from environmental contamination or noncompliance at our properties.
While we do not believe that such non-farming lease income will constitute a significant percentage of our total revenues, they offer opportunities to enhance returns to stockholders at little or no cost to us. ​ 9 Table of Contents Family-Owned Properties ​ According to America’s Farms and Ranches at a Glance 2023 Edition, a USDA report, family farms accounted for approximately 97% of the total farms in the United States.
While we do not believe that such non-farming lease income will constitute a significant percentage of our total revenues, they offer opportunities to enhance returns to stockholders at little or no cost to us. 9 Table of Contents ​ Family-Owned Properties ​ According to America’s Farms and Ranches at a Glance 2024 Edition, a USDA report, family farms accounted for approximately 97% of the total farms in the United States.
However, in some circumstances, we may be exposed to tenant credit risk and may be subject to farming operation risks, such as adverse weather conditions and declines in commodity prices, particularly with respect to leases that do not require advance payment of 100% of the annual rent, variable-rent leases for which the rent is based on a percentage of a tenant's farming revenues and leases with terms greater than one year.
However, in some circumstances, we may be exposed to tenant credit risk and may be subject to farming operation risks, such as adverse weather conditions, water shortages and declines in commodity prices, particularly with respect to leases that do not require advance payment of 100% of the annual rent, variable-rent leases for which the rent is based on a percentage of a tenant's farming revenues and leases with terms greater than one year.
Sustainability is considered a high priority topic at all levels of our organization, with a commitment formulated by the Board of Directors and senior management team. ​ Social Impact, Human Rights, and Company Culture ​ Utilizing land for farming creates a more sustainable future for all by affordably feeding the world’s growing population and supplying food products that support better nutrition.
Sustainability is considered a high priority topic at all levels of our organization, with a commitment formulated by our Board of Directors and senior management team. ​ 14 Table of Contents Social Impact, Human Rights, and Company Culture ​ Utilizing land for farming creates a more sustainable future for all by affordably feeding the world’s growing population and supplying food products that support better nutrition.
Over the long term, we expect that our farmland portfolio will continue to be comprised of approximately 70% primary crop farmland and 30% specialty crop farmland by value, which we believe will give investors the economic benefit from increasing global food demand in the face of growing scarcity of high quality farmland and will reflect the approximate allocation of U.S. agricultural output between primary crops and animal protein (whose production relies principally on primary crops as feed), on one hand, and specialty crops, on the other. ​ Primary Crops ​ The most widely grown crop in the United States is corn, at approximately 93 million acres.
Over the long term, we expect that our farmland portfolio will continue to be comprised of approximately 60% primary crop farmland and 40% specialty crop farmland by value, which we believe will give investors the economic benefit from increasing global food demand in the face of growing scarcity of high quality farmland and will reflect the approximate allocation of U.S. agricultural output between primary crops and animal protein (whose production relies principally on primary crops as feed), on one hand, and specialty crops, on the other. ​ Primary Crops ​ The most widely grown crop in the United States is corn, at approximately 89 million acres.
Soybean oil is used for food, biofuel, and is exported. ​ The third most widely grown crop in the United States is wheat, at approximately 51 million acres.
Soybean oil is used for food, biofuel, and is exported. ​ The third most widely grown crop in the United States is wheat, at approximately 49 million acres.
These firms engage in the acquisition, asset management, valuation and disposition of farmland properties. ​ 15 Table of Contents Human Capital Resources ​ Our employees are vital to our success. Our goal is to ensure that we have the right talent, in the right place, at the right time.
These firms engage in the acquisition, asset management, valuation and disposition of farmland properties. ​ Human Capital Resources ​ Our employees are vital to our success. Our goal is to ensure that we have the right talent, in the right place, at the right time.
We also offer employees the opportunity to participate in conferences and continuing education. ​ We seek to retain our employees by using their feedback to create and continually enhance programs that support their needs. We have a formal performance review process for our employees. We have a values-based culture, an important factor in retaining our employees.
We also offer employees the opportunity to participate in conferences and continuing education. 15 Table of Contents ​ We seek to retain our employees by using their feedback to create and continually enhance programs that support their needs. We have a formal performance review process for our employees. We have a values-based culture, an important factor in retaining our employees.
As of December 31, 2023, we managed approximately 38,300 acres on behalf of third parties. ​ Brokerage and Auction Services ​ The acquisition of Murray Wise Associates, LLC (“MWA”) in November 2021 also added brokerage and auction business activities for clients seeking to sell farmland.
As of December 31, 2024, we managed approximately 48,300 acres of farmland on behalf of third parties. ​ Brokerage and Auction Services ​ The acquisition of Murray Wise Associates, LLC (“MWA”) in November 2021 also added brokerage and auction business activities for clients seeking to sell farmland.
These and other risks related to environmental matters are described in more detail in “Item 1A. Risk Factors.” ​ 14 Table of Contents Sustainability ​ We believe a strong commitment to multi-faceted sustainability supports our business model and promotes environmental stewardship.
These and other risks related to environmental matters are described in more detail in “Item 1A. Risk Factors.” ​ Sustainability ​ We believe a strong commitment to multi-faceted sustainability supports our business model and promotes environmental stewardship.
Our qualification as a REIT will depend upon our ability to meet, on a continuing basis, through actual investment and operating results, various complex requirements under the Code, relating to, among other things, the sources of our gross income, the composition and values of our assets, our distribution levels and the diversity of ownership of our capital stock.
Our qualification as a REIT will depend upon our ability to meet, on a continuing basis, various complex requirements under the Code, relating to, among other things, the sources of our gross income, the composition and values of our assets, our distribution levels and the diversity of ownership of our capital stock.
We expect to continue to take advantage of opportunities to place solar panels and windmills on farmland owned by FPI. ​ We place significant emphasis on the support of biodiversity and wildlife. Our portfolio supports biodiversity through the enrollment of acres, in partnership with our tenants, in the U.S. Department of Agriculture’s Conservation Reserve Program (CRP).
We expect to continue to take advantage of opportunities to place solar panels and windmills on farmland owned by FPI. ​ We place significant emphasis on the support of biodiversity and wildlife. Our portfolio supports biodiversity through the enrollment of acres, in partnership with our tenants, in the USDA’s Conservation Reserve Program (CRP).
According to the United States Department of Agriculture (“USDA”) forecast data from February 2024, real estate debt on farms is $377 billion, compared to a real estate value of $3.6 trillion, representing a 10% debt-to-equity ratio. The United States has the largest, lowest-cost grain transportation infrastructure in the world, leaving more margin to the grain producer and landowner.
According to the United States Department of Agriculture (“USDA”) forecast data from December 2024, real estate debt on farms is $360 billion, compared to a real estate value of $3.5 trillion, representing a 10% debt-to-equity ratio. The United States has the largest, lowest-cost grain transportation infrastructure in the world, leaving more margin to the grain producer and landowner.
Also, during the year ended December 31, 2023, the Company completed acquisitions consisting of four properties in the Corn Belt and Delta and South regions. Aggregate cash consideration for these acquisitions totaled $22.2 million. See “Management’s Discussion and Analysis of Financial 12 Table of Contents Condition and Results of Operations” for more information about our portfolio.
Also, during the year ended December 31, 2024, the Company completed acquisitions consisting of four properties in the Corn Belt and Delta and South regions. Aggregate cash consideration for these acquisitions totaled $17.9 million. See “Management’s Discussion and Analysis of Financial Condition and Results of 12 Table of Contents Operations” for more information about our portfolio.
Delta and South includes farms located in Arkansas, Louisiana, Mississippi and Oklahoma. High Plains includes farms located in Colorado, Kansas and Texas. Southeast includes farms located in Florida, North Carolina and South Carolina. West Coast includes farms located in California.
Delta and South includes farms located in Arkansas, Louisiana and Mississippi. High Plains includes farms located in Colorado, Kansas and Texas. Southeast includes farms located in North Carolina, South Carolina and West Virginia. West Coast includes farms located in California.
All of FPI’s assets are held by, and its operations are primarily conducted through, the Operating Partnership and the wholly owned subsidiaries of the Operating Partnership. As of December 31, 2023, FPI owned a 97.6% interest in the Operating Partnership.
All of FPI’s assets are held by, and its operations are primarily conducted through, the Operating Partnership and the wholly owned subsidiaries of the Operating Partnership. As of December 31, 2024, FPI owned a 97.5% interest in the Operating Partnership.
As of December 31, 2023, the TRS performed direct farming operations on 2,103 acres of permanent crop farmland owned by the Company located in California. ​ FPI strategically seeks opportunities to promote environmentally friendly usage of our farmland.
As of December 31, 2024, the TRS performed direct farming operations on 2,103 acres of permanent crop farmland owned by the Company located in California. ​ 6 Table of Contents FPI strategically seeks opportunities to promote environmentally friendly usage of our farmland.
The uses of soybeans projected for the 2023/2024 marketing year (September 2023 to August 2024) are as follows: crushings (52%); exports (39%); seed and residual (3%); and ending stocks or inventory (6%). The process of crushing soybean produces soybean oil, soybean meal, hulls and waste. Soybean meal is used as animal feed both domestically and in the export market.
The uses of soybeans projected for the 2024/2025 marketing year (September 2024 to August 2025) are as follows: crushings (51%); exports (39%); seed and residual (2%); and ending stocks or inventory (8%). The process of crushing soybean produces soybean oil, soybean meal, hulls and waste. Soybean meal is used as animal feed both domestically and in the export market.
The uses of corn projected for the 2023/2024 marketing year (September 2023 to August 2024) are as follows: animal feed and residual products (34%); ethanol and its animal feed byproducts known as distillers’ dried grains with solubles or DDGS (32%); exports (13%); other sugars, starches, cereals, seeds (8%); and ending stocks or inventory (13%). ​ The second most widely grown crop in the United States is soybeans, at approximately 83 million acres.
The uses of corn projected for the 2024/2025 marketing year (September 2024 to August 2025) are as follows: animal feed and residual products (35%); ethanol and its animal feed byproducts known as distillers’ dried grains with solubles or DDGS (33%); exports (15%); other sugars, starches, cereals, seeds (8%); and ending stocks or inventory (9%). ​ The second most widely grown crop in the United States is soybeans, at approximately 86 million acres.
Investment firms that we might compete directly against for investment capital to be deployed in farmland could include agricultural investment firms such as Westchester Agriculture Asset Management (a TIAA company), Manulife Investment Management, International Farming Corporation, Ceres Partners, Gladstone Land Corporation, UBS Agrivest, AgIS Capital, Homestead Capital, and Goldcrest Farm Trust Advisors.
Investment firms that we might compete directly against for investment capital to be deployed in farmland could include agricultural investment firms such as Nuveen Natural Capital, Manulife Investment Management, International Farming Corporation, Ceres Partners, Gladstone Land Corporation, UBS Agrivest, AgIS Capital, Homestead Capital, and Goldcrest Farm Trust Advisors.
The uses of wheat projected for the 2023/2024 marketing year (June 2023 to May 2024) are as follows: food (38%); exports (29%); seed, feed and residual (7%); and ending stocks or inventory (26%). ​ Annual vs. Permanent Crops Our portfolio includes farms that produce both annual and permanent crops.
The uses of wheat projected for the 2024/2025 marketing year (June 2024 to May 2025) are as follows: food (35%); exports (30%); seed, feed and residual (7%); and ending stocks or inventory (28%). ​ Annual vs. Permanent Crops Our portfolio includes farms that produce both annual and permanent crops.
Our financial performance should be evaluated on an annual basis, which eliminates impacts of seasonality and other similar factors that may cause our quarterly results to vary during the course of the year. ​ Our Properties ​ As of December 31, 2023, we owned farms with an aggregate of approximately 132,800 acres in Arkansas, California, Colorado, Florida, Illinois, Indiana, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina and Texas.
Our financial performance should be evaluated on an annual basis, which eliminates impacts of seasonality and other similar factors that may cause our quarterly results to vary during the course of the year. ​ Our Properties ​ As of December 31, 2024, we owned farms with an aggregate of approximately 93,500 acres in Arkansas, California, Colorado, Illinois, Indiana, Kansas, Louisiana, Missouri, Nebraska, South Carolina, Texas and West Virginia.
We are committed to having a diverse workforce, and an inclusive work environment is a natural extension of our culture. ​ At December 31, 2023, we had 26 employees, 25 of which are full time.
We are committed to having a diverse workforce, and an inclusive work environment is a natural extension of our culture. ​ At December 31, 2024, we had 24 employees, 23 of which are full time employees.
Under the terms and conditions of the leases on our current properties, tenants are generally required, at their expense, to obtain and keep in full force during the term of the lease liability insurance and to name us an additional insured party. To the extent required, tenants also maintain workers’ compensation policies for their businesses.
Under the terms and conditions of the leases on our current properties, tenants are generally required, at their expense, to obtain and keep in full force during the term of the lease liability insurance and to name us an additional insured party.
However, we may be exposed to tenant credit risk and farming operation risks, particularly with respect to leases that do not require advance payment of 100% of the fixed rent, variable rent arrangements and leases with terms greater than one year. ​ Full Year 2023 Highlights ​ During 2023: ● Net income increased 164.9% from $12.0 million for the year ended December 31, 2022 to $31.7 million for the year ended December 31, 2023; ● Adjusted Funds from Operation ("AFFO") decreased 48.4% from $15.8 million for the year ended December 31, 2022 to $8.1 million for the year ended December 31, 2023; ● We completed dispositions consisting of 74 properties in the Corn Belt, Delta and South, High Plains, Southeast and West Coast regions.
However, we may be exposed to tenant credit risk and farming operation risks, particularly with respect to leases that do not require advance payment of 100% of the fixed rent, variable rent arrangements and leases with terms greater than one year. ​ Full Year 2024 Highlights ​ During 2024: ● Net income increased 94% from $31.7 million for the year ended December 31, 2023 to $61.5 million for the year ended December 31, 2024; ● Adjusted Funds from Operation ("AFFO") increased 72.9% from $8.1 million for the year ended December 31, 2023 to $14.1 million for the year ended December 31, 2024; ● We completed dispositions consisting of 54 properties in the Corn Belt, Delta and South, High Plains and Southeast regions.
As of December 31, 2023, the Operating Partnership owned a 9.97% equity interest in Promised Land Opportunity Zone Farms I, LLC (the “OZ Fund”), an unconsolidated equity method investment, that holds 12 properties (see “Note 1, Convertible Notes Receivable”).
As of December 31, 2024, the Operating Partnership owned a 9.97% equity interest in Promised Land Opportunity Zone Farms I, LLC (the “OZ Fund”), an unconsolidated equity method investment, that holds 11 properties (see “Note 1—Organization and Significant Accounting Policies—Equity Method Investments”).
As shown below, small family farms represent the greatest number of farms and amount of land, while large-scale family farms represent the greatest value of production. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Farm Category Annual Gross Farm Cash Income Number of Farms Percent of Farms ​ Percent of Land Area ​ Value of Production ​ Small Family Farms ​ Less than $350,000 ​ 1,756,441 ​ 88.1 % ​ 46.5 % ​ 18.7 % Midsize Family Farms ​ Less than $1,000,000 ​ 115,595 ​ 5.8 % ​ 21.4 % ​ 19.1 % Large-Scale Family Farms ​ Greater than $1,000,000 ​ 67,936 ​ 3.4 % ​ 24.8 % ​ 51.8 % Nonfamily Farms ​ ​ ​ 54,450 ​ 2.7 % ​ 7.3 % ​ 10.4 % Total ​ ​ ​ 1,994,422 ​ 100.0 % ​ 100.0 % ​ 100.0 % ​ Farmland leases allow farm operators to unlock personal or family capital/net worth that would otherwise be tied up in land ownership while retaining the ability to conduct their livelihoods on land that is familiar to them.
As shown below, small family farms represent the greatest number of farms and amount of land, while large-scale family farms represent the greatest value of production. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Farm Category Annual Gross Farm Cash Income Number of Farms Percent of Farms ​ Percent of Land Area ​ Value of Production ​ Small Family Farms ​ Less than $350,000 ​ 1,626,608 ​ 86.1 % ​ 40.7 % ​ 17.2 % Midsize Family Farms ​ Less than $1,000,000 ​ 112,185 ​ 5.9 % ​ 18.2 % ​ 18.5 % Large-Scale Family Farms ​ Greater than $1,000,000 ​ 84,030 ​ 4.5 % ​ 30.6 % ​ 47.5 % Nonfamily Farms ​ ​ ​ 66,977 ​ 3.5 % ​ 10.5 % ​ 16.8 % Total ​ ​ ​ 1,889,800 ​ 100.0 % ​ 100.0 % ​ 100.0 % ​ Farmland leases allow farm operators to unlock personal or family capital/net worth that would otherwise be tied up in land ownership while retaining the ability to conduct their livelihoods on land that is familiar to them.
As of December 31, 2023, we owned farms with an aggregate of approximately 132,800 acres in Arkansas, California, Colorado, Florida, Illinois, Indiana, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina and Texas.
As of December 31, 2024, we owned farms with an aggregate of approximately 93,500 acres in Arkansas, California, Colorado, Illinois, Indiana, Kansas, Louisiana, Missouri, Nebraska, South Carolina, Texas and West Virginia.
As of December 31, 2023, we leased acres to support 3 solar energy operational projects across 11 farms and 2 wind energy projects across 4 farms, which have the capacity to generate approximately 214 and 30 megawatts of renewable energy, respectively. We own 16 additional farms which have options for future solar projects.
As of December 31, 2024, we leased acres to support 2 solar energy operational projects across 10 farms and 1 wind energy project on 1 farm, which have the capacity to generate approximately 207 megawatts of renewable energy, respectively. We own 9 additional farms which have options for future solar projects.
These policies include liability coverage for bodily injury and property damage arising out of the ownership, use, occupancy or maintenance of the properties and all of their appurtenant areas.
These policies include liability coverage for bodily injury and property damage arising out of the ownership, use, occupancy or maintenance of the properties and all of their appurtenant areas. To the extent required by state law, tenants also maintain workers’ compensation policies for their businesses.
As of December 31, 2023, approximately 70% of our owned portfolio (by value) was used to grow primary crops, such as corn, soybeans, wheat, rice and cotton, and approximately 30% was used to produce specialty crops, such as almonds, citrus, blueberries, and vegetables.
As of December 31, 2024, approximately 60% of our owned portfolio (by value) was used to grow primary crops, such as corn, soybeans, wheat, rice and cotton, and approximately 40% was used to produce specialty crops, such as almonds, pistachios, citrus, avocados, strawberries, and edible beans.
In addition, as of December 31, 2023, we owned land and buildings for four agriculture equipment dealerships in Ohio leased to Ag-Pro Ohio, LLC (“Ag Pro”) under the John Deere brand and served as property manager for approximately 38,300 acres, including farms in Iowa (see “Note 4—Related Party Transactions”).
In addition, as of December 31, 2024, we owned land and buildings for four agriculture equipment dealerships in Ohio leased to Ag-Pro Ohio, LLC (“Ag Pro”) under the John Deere brand and served as property manager for approximately 48,300 acres of farmland, including farms in Colorado, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, North Carolina, Ohio and South Carolina.
In addition, as of December 31, 2023, we owned land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand and served as property manager for approximately 38,300 acres, including farms in Iowa (see “Note 4—Related Party Transactions”).
In addition, as of December 31, 2024, we owned land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand and served as property manager for approximately 48,300 acres of farmland, including farms in Colorado, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, North Carolina, Ohio and South Carolina.
During the year ended December 31, 2023, the Company completed dispositions, consisting of 74 properties, in the Corn Belt, Delta and South, High Plains, Southeast and West Coast regions. We received $195.5 million in aggregate consideration, including $11.8 million in seller financing, and recognized an aggregate gain on sale of $36.1 million.
During the year ended December 31, 2024, the Company completed dispositions, consisting of 54 properties, in the Corn Belt, Delta and South, High Plains and Southeast regions. We received $312.0 million in aggregate consideration, and recognized an aggregate gain on sale of $54.1 million, including $2.1 million in connection with properties sold in 2023 whereby the gain was deferred.
We received $195.5 million in aggregate consideration, including $11.8 million in seller financing, and recognized an aggregate gain on sale of $36.1 million ; ● We completed acquisitions consisting of four properties in the Corn Belt and Delta and South regions.
We received $312.0 million in aggregate consideration, and recognized an aggregate gain on sale of $54.1 million, including $2.1 million in connection with properties sold in 2023 whereby the gain was deferred ; ● We completed acquisitions consisting of four properties in the Corn Belt and Delta and South regions.
We have long-term lease arrangements on certain farm properties pursuant to which operators engage in solar and wind energy production. 6 Table of Contents As of December 31, 2023, 15 of our farms, which collectively comprised approximately 10,150 acres, had leases for operational or under-construction renewable energy production, and 16 of our farms, which collectively comprise approximately 12,875 acres, had options for potential future solar or wind development and operating lease.
As of December 31, 2024, 11 of our farms, which collectively comprised approximately 8,050 acres, had leases for operational or under-construction renewable energy production, and 10 of our farms, which collectively comprise approximately 4,330 acres, had options for potential future solar or wind development and operating lease.
The distribution of farms owned by regions is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Region (1) Owned Acres Managed Acres ​ Total Acres Corn Belt (2) ​ 44,527 ​ 22,027 ​ ​ 66,554 Delta and South ​ 26,427 ​ 8,763 ​ ​ 35,190 High Plains ​ 21,831 ​ 1,380 ​ ​ 23,211 Southeast ​ 28,825 ​ 6,107 ​ ​ 34,932 West Coast ​ 11,189 ​ — ​ ​ 11,189 ​ ​ 132,799 ​ 38,277 ​ ​ 171,076 (1) Corn Belt includes farms located in Illinois, Indiana, Iowa, Missouri and eastern Nebraska.
The distribution of farms owned and managed by region is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Region (1) Owned Acres Managed Acres ​ Total Acres Corn Belt (2) ​ 42,288 ​ 29,412 ​ ​ 71,700 Delta and South ​ 9,001 ​ 8,763 ​ ​ 17,764 High Plains ​ 20,870 ​ 4,352 ​ ​ 25,222 Southeast ​ 10,177 ​ 5,772 ​ ​ 15,949 West Coast ​ 11,189 ​ — ​ ​ 11,189 ​ ​ 93,525 ​ 48,299 ​ ​ 141,824 (1) Corn Belt includes farms located in Illinois, Indiana, Iowa, Missouri, eastern Nebraska and Ohio.
Removed
Under the Code, REITs are subject to numerous organizational and operational requirements, including a requirement that they distribute on an annual basis at least 90% of their REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gains.
Added
We have long-term lease arrangements on certain farm properties pursuant to which operators engage in solar and wind energy production.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAlthough rental payments under the majority of our leases typically are not based on the quality or profitability of our tenants' harvests, any of these factors could adversely affect our tenants' ability to meet their obligations to us and our ability to lease or re-lease properties on favorable terms, or at all, which could have a material adverse effect on the value of our properties, our results of operations and our ability to make distributions to our stockholders. ​ The impacts of trade disputes and geopolitical conflicts, such as the ongoing war in Ukraine and in the Middle East, could adversely affect the profitability of our tenants’ farming operations, which could have a material adverse effect on our results of operations, financial condition, ability to make distributions to our stockholders and the value of our properties . ​ The potential for trade disputes between the United States and its primary agricultural trade partners has increased in recent years.
Biggest changeContinued deterioration in the domestic or international economic environment may cause decreased demand for our tenants’ crops, which could result in lower sales volume and lower prices for their crops, as well as increase the cost of operating their businesses and a corresponding adverse effect on their ability to make rental payments to us, which would adversely impact our financial condition and results of operations. ​ The impacts of changes in trade policy (such as the imposition of tariffs), trade disputes and geopolitical conflicts (such as the ongoing war in Ukraine and the conflicts in the Middle East) could adversely affect the profitability of our tenants’ farming operations, which could have a material adverse effect on our results of operations, financial condition, ability to make distributions to our stockholders and the value of our properties . ​ The potential for trade disputes between the United States and its primary agricultural trade partners has increased in recent years.
If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Code. 17 Table of Contents ​ Our debt financing agreements restrict our ability to engage in certain business activities, including our ability to incur additional indebtedness, make capital expenditures and make certain investments. ​ Our existing debt financing agreements contain, and other debt financing agreements we may enter into in the future may contain customary negative covenants and other financial and operating covenants that, among other things: ​ ● restrict our ability to incur additional indebtedness; ● restrict our ability to incur additional liens; ● restrict our ability to make certain investments (including certain capital expenditures); ● restrict our ability to merge with another company; ● restrict our ability to sell or dispose of assets; ● restrict our ability to make distributions to stockholders; and ● require us to satisfy minimum financial coverage ratios, minimum tangible net worth requirements and maximum leverage ratios. ​ Increases in benchmark interest rates will increase our borrowing costs, which will negatively impact our financial condition, results of operations, growth prospects and ability to make distributions to stockholders. ​ Beginning in 2022, the Board of Governors of the United States Federal Reserve Bank (the “Federal Reserve”) has undertaken a significant tightening of monetary policy, which has increased borrowing costs (through the resulting increase in interest rates) and decreased credit availability.
If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Code. ​ Our debt financing agreements restrict our ability to engage in certain business activities, including our ability to incur additional indebtedness, make capital expenditures and make certain investments. ​ Our existing debt financing agreements contain, and other debt financing agreements we may enter into in the future may contain customary negative covenants and other financial and operating covenants that, among other things: ​ ● restrict our ability to incur additional indebtedness; ● restrict our ability to incur additional liens; 17 Table of Contents ● restrict our ability to make certain investments (including certain capital expenditures); ● restrict our ability to merge with another company; ● restrict our ability to sell or dispose of assets; ● restrict our ability to make distributions to stockholders; and ● require us to satisfy minimum financial coverage ratios, minimum tangible net worth requirements and maximum leverage ratios. ​ Increases in benchmark interest rates will increase our borrowing costs, which will negatively impact our financial condition, results of operations, growth prospects and ability to make distributions to stockholders. ​ Beginning in 2022, the Board of Governors of the United States Federal Reserve Bank (the “Federal Reserve”) has undertaken a significant tightening of monetary policy, which has increased borrowing costs (through the resulting increase in interest rates) and decreased credit availability.
We can provide no assurances that any of our key personnel will continue their employment with us. In particular, the loss of the services of Mr. Paul A. Pittman, our Executive Chairman of the Board of Directors, or Mr.
We can provide no assurances that any of our key personnel will continue their employment with us. In particular, the loss of the services of Mr. Paul A. Pittman, our Executive Chairman of our Board of Directors, or Mr.
Disputes 24 Table of Contents between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business.
Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent 24 Table of Contents our officers and directors from focusing their time and effort on our business.
While we believe we have remediated all past material weaknesses, we cannot give any assurances that other material weaknesses will not be identified in the future in connection with our compliance with the provisions of Section 404 of the Sarbanes-Oxley Act.
We have identified material weaknesses in the past. While we believe we have remediated all past material weaknesses, we cannot give any assurances that other material weaknesses will not be identified in the future in connection with our compliance with the provisions of Section 404 of the Sarbanes-Oxley Act.
Some of these laws could subject us to: ​ ● responsibility and liability for the cost of removal or remediation of hazardous substances released on our properties, generally without regard to our knowledge of or responsibility for the presence of the contaminants; ● liability for the costs of investigation, removal or remediation of hazardous substances or chemical releases at disposal facilities for persons who arrange for the disposal or treatment of these substances; and 28 Table of Contents ● potential liability for claims by third parties for damages resulting from environmental contaminants. ​ Environmental site assessments were not conducted on all the farms in our portfolio and we do not expect to conduct environment site assessments on all farms we acquire in the future.
Some of these laws could subject us to: ​ ● responsibility and liability for the cost of removal or remediation of hazardous substances released on our properties, generally without regard to our knowledge of or responsibility for the presence of the contaminants; ● liability for the costs of investigation, removal or remediation of hazardous substances or chemical releases at disposal facilities for persons who arrange for the disposal or treatment of these substances; and ● potential liability for claims by third parties for damages resulting from environmental contaminants. 28 Table of Contents ​ Environmental site assessments were not conducted on all the farms in our portfolio and we do not expect to conduct environment site assessments on all farms we acquire in the future.
The 34 Table of Contents Code sets forth a safe harbor for REITs that wish to sell property without risking the imposition of the 100% tax. A principal requirement of the safe harbor is that the REIT must hold the applicable property for not less than two years prior to its sale for the production of rental income.
The Code sets forth a safe harbor for REITs that wish to sell property without risking the imposition of the 100% tax. A 34 Table of Contents principal requirement of the safe harbor is that the REIT must hold the applicable property for not less than two years prior to its sale for the production of rental income.
The price of our common stock could be subject 37 Table of Contents to wide fluctuations in response to a number of factors, including those listed in this “Risk Factors” section of this Annual Report on Form 10-K and others such as: ​ ● actual or anticipated variations in our quarterly results of operations or dividends; ● changes in our funds from operations or earnings estimates; ● changes in government regulations or policies affecting our business or the farming business; ● publication of research reports about us or the real estate or farming industries; ● sustained decreases in agricultural commodity and crop prices; ● increases in market interest rates that lead purchasers of our common stock to demand a higher yield; ● changes in market valuations of similar companies; ● adverse market reaction to any additional debt we incur in the future; ● additions or departures of key management personnel; ● actions by institutional stockholders; ● speculation in the press or investment community; ● the realization of any of the other risk factors presented in this Annual Report on Form 10-K; ● the extent of investor interest in our securities; ● the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate-based companies; ● our underlying asset value; ● investor confidence in the stock and bond markets generally; ● changes in tax laws; ● future equity issuances; ● failure to meet earnings estimates; ● failure to meet and maintain REIT qualifications and requirements; ● low trading volume of our common stock; and ● general market and economic conditions, including conditions that are outside of our control, such as the impact of public health and safety concerns. ​ In the past, securities class action litigation has often been instituted against companies following periods of volatility in the price of their common stock.
The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those listed in this “Risk Factors” section of this Annual Report on Form 10-K and others such as: ​ ● actual or anticipated variations in our quarterly results of operations or dividends; ● changes in our funds from operations or earnings estimates; ● changes in government regulations or policies affecting our business or the farming business; ● publication of research reports about us or the real estate or farming industries; ● sustained decreases in agricultural commodity and crop prices; ● increases in market interest rates that lead purchasers of our common stock to demand a higher yield; ● changes in market valuations of similar companies; ● adverse market reaction to any additional debt we incur in the future; ● additions or departures of key management personnel; 37 Table of Contents ● actions by institutional stockholders; ● speculation in the press or investment community; ● the realization of any of the other risk factors presented in this Annual Report on Form 10-K; ● the extent of investor interest in our securities; ● the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate-based companies; ● our underlying asset value; ● investor confidence in the stock and bond markets generally; ● changes in tax laws; ● future equity issuances; ● failure to meet earnings estimates; ● failure to meet and maintain REIT qualifications and requirements; ● low trading volume of our common stock; and ● general market and economic conditions, including conditions that are outside of our control, such as the impact of public health and safety concerns. ​ In the past, securities class action litigation has often been instituted against companies following periods of volatility in the price of their common stock.
In addition, at the time we no longer qualify as a smaller reporting company, we will be required to include an auditor attestation report pursuant to Section 404 of the Sarbanes Oxley Act, which will cause us to incur additional expenses, which may be significant. ​ Under the FPI Loan Program, we provide loans to third-party farmers, which exposes us to risks associated with being a lender, including the risk that borrowers default on their obligations to us, which could adversely affect our results of operations and financial condition. ​ Under the FPI Loan Program, we make loans to third-party farmers (both tenant and non-tenant) to provide financing for borrowers’ working capital requirements and operational farming activities, farming infrastructure projects, and for other farming and agricultural real estate related purposes.
In addition, at the time we no longer qualify as a smaller reporting company, we will be required to include an auditor attestation report pursuant to Section 404 of the Sarbanes Oxley Act, which will cause us to incur additional expenses, which may be significant. ​ Under the FPI Loan Program, we provide loans to third-party farmers and landowners, which exposes us to risks associated with being a lender, including the risk that borrowers default on their obligations to us, which could adversely affect our results of operations and financial condition. ​ Under the FPI Loan Program, we make loans to third-party farmers (both tenant and non-tenant) and landowners to provide financing for borrowers’ working capital requirements and operational farming activities, farming infrastructure projects, and for other farming, agricultural and other real estate related purposes.
Even if we successfully foreclose on the collateral securing our mortgage loans, foreclosure-related costs, high loan-to-value ratios or 26 Table of Contents declines in property values could prevent us from realizing the full amount of our mortgage loans, and we could be required to record a valuation allowance for such losses. ​ Liability for uninsured or underinsured losses could materially and adversely affect our financial condition and cash flow. ​ Our properties may be damaged by adverse weather conditions and natural disasters, such as earthquakes, floods and tornadoes.
Even if we successfully foreclose on the collateral securing our mortgage loans, foreclosure-related costs, high loan-to-value ratios or declines in property values could prevent us from realizing the full amount of our mortgage loans, and we could be required to record a valuation allowance for such losses. ​ 26 Table of Contents Liability for uninsured or underinsured losses could materially and adversely affect our financial condition and cash flow. ​ Our properties may be damaged by adverse weather conditions and natural disasters, such as earthquakes, floods, wildfires and tornadoes.
Because we do not monitor and evaluate the credit risk exposure related to farm-operator tenants on an ongoing basis, we are subject to the risk that our tenants, particularly those that may depend on leverage to finance their operations, could be susceptible to bankruptcy in the event that their cash flows are insufficient to satisfy their financial obligations, including meeting their obligations to us under their leases.
Because we do not continuously monitor and evaluate the credit risk exposure related to farm-operator tenants on an ongoing basis, we are subject to the risk that our tenants, particularly those that may depend on leverage to finance their operations, could be susceptible to bankruptcy in the event that their cash flows are insufficient to satisfy their financial obligations, including meeting their obligations to us under their leases.
Please refer to the section entitled “Special Note Regarding Forward-Looking Statements” at the beginning of this Annual Report on Form 10-K. ​ 16 Table of Contents Risks Related to Our Business and Properties ​ Our business is dependent in part upon the profitability of our tenants' farming operations, and a sustained downturn in the profitability of their farming operations could have a material adverse effect on the amount of rent we can collect and, consequently, our cash flow and ability to make distributions to our stockholders. ​ We depend on our tenants to operate the farms we own in a manner that generates revenues sufficient to allow them to meet their obligations to us, including their obligations to pay rent and real estate taxes, maintain certain insurance coverage and maintain the properties generally.
Please refer to the section entitled “Special Note Regarding Forward-Looking Statements” at the beginning of this Annual Report on Form 10-K. ​ Risks Related to Our Business and Properties ​ Our business is dependent in part upon the profitability of our tenants' farming operations, and a sustained downturn in the profitability of their farming operations could have a material adverse effect on the amount of rent we can collect and, consequently, our cash flow and ability to make distributions to our stockholders. ​ We depend on our tenants to operate the farms we own in a manner that generates revenues sufficient to allow them to meet their obligations to us, including their obligations to pay rent and real estate taxes, maintain certain insurance coverage and maintain the properties generally.
If demand for one type of permanent crop decreases, the permanent crop farmer cannot easily convert the farm to another type of crop because permanent crop farmland is dedicated to one crop during the lifespan of the trees or vines and therefore cannot easily be rotated to adapt to changing environmental or market conditions. ​ 19 Table of Contents Our failure to continue to identify and consummate suitable acquisitions would significantly impede our growth and our ability to further diversify our portfolio by geography, crop type and tenant, which could materially and adversely affect our results of operations and cash available for distribution to our stockholders. ​ Our ability to expand through farmland acquisitions is important to our business strategy and requires that we identify and consummate suitable acquisition or investment opportunities that meet our investment criteria and are compatible with our growth strategy.
If demand for one type of permanent crop decreases, the permanent crop farmer cannot easily convert the farm to another type of crop because permanent crop farmland is dedicated to one crop during the lifespan of the trees or vines and therefore cannot easily be rotated to adapt to changing environmental or market conditions. ​ Our failure to continue to identify and consummate suitable acquisitions would significantly impede our growth and our ability to further diversify our portfolio by geography, crop type and tenant, which could materially and adversely affect our results of operations and cash available for distribution to our stockholders. ​ Our ability to expand through farmland acquisitions is important to our business strategy and requires that we identify and consummate suitable acquisition or investment opportunities that meet our investment criteria and are compatible with our growth strategy.
We may be unsuccessful in managing farmland properties on behalf of third-parties or leasing out agricultural equipment dealerships, which could have a material adverse effect on our results of operations and we may be liable and/or our status as a REIT may be jeopardized if the third-party farmland management or agricultural equipment dealership facilities cause us to fail to comply with various tax or other regulatory matters. ​ 25 Table of Contents If we fail to maintain effective internal controls over financial reporting, we may not be able to accurately report our financial results, which may adversely affect investor confidence in our Company and, as a result, the value of our common stock. ​ Our management is responsible for establishing and maintaining adequate internal controls over financial reporting.
We may be unsuccessful in managing farmland properties on behalf of third-parties or leasing out agricultural equipment dealerships, which could have a material adverse effect on our results of operations and we may be liable and/or our status as a REIT may be jeopardized if the third-party farmland management or agricultural equipment dealership facilities cause us to fail to comply with various tax or other regulatory matters. ​ If we fail to maintain effective internal controls over financial reporting, we may not be able to accurately report our financial results, which may adversely affect investor confidence in our Company and, as a result, the value of our common stock. ​ Our management is responsible for establishing and maintaining adequate internal controls over financial reporting.
As a result, we may have difficulties executing our business strategy in these new markets, which could have a negative impact on our results of operations and ability to make distributions to our stockholders. ​ We do not continuously monitor and evaluate tenant credit quality, and our financial performance may be subject to risks associated with our tenants' financial condition and liquidity position. ​ Certain of our leases do not require the full payment of rent in cash in advance of the planting season, which subjects us to credit risk exposure to our farm-operator tenants and the risks associated with farming operations, such as weather, commodity price fluctuations and other factors.
As a result, we may have difficulties executing our business strategy in these new markets, which could have a negative impact on our results of operations and ability to make distributions to our stockholders. ​ We do not continuously monitor and evaluate tenant credit quality, and our financial performance may be subject to risks associated with our tenants' financial condition and liquidity position. ​ Certain of our leases do not require the full payment of rent in cash in advance of the planting season, which subjects us to credit risk exposure to our farm-operator tenants and the risks associated with farming operations, such as weather, 20 Table of Contents commodity price fluctuations and other factors.
However, for taxable years prior to 2026, individual stockholders are generally allowed to deduct 20% of the aggregate amount of ordinary dividends distributed by us, subject to certain limitations, which would reduce the maximum marginal effective federal income tax rate for individuals on the receipt of such ordinary dividends to 29.6%. ​ 36 Table of Contents Changes to the U.S. federal income tax laws, including the enactment of certain tax reform measures, could have an adverse impact on our business and financial results. ​ In recent years, numerous legislative, judicial and administrative changes have been made to the U.S. federal income tax laws applicable to investments in real estate and REITs.
However, for taxable years prior to 2026, individual stockholders are generally allowed to deduct 20% of the aggregate amount of ordinary dividends distributed by us, subject to certain limitations, which would reduce the maximum marginal effective federal income tax rate for individuals on the receipt of such ordinary dividends to 29.6%. ​ Changes to the U.S. federal income tax laws, including the enactment of certain tax reform measures, could have an adverse impact on our business and financial results. ​ In recent years, numerous legislative, judicial and administrative changes have been made to the U.S. federal income tax laws applicable to investments in real estate and REITs.
The conversion of such Series A preferred units and potential redemption of the converted Common units for shares of common stock could have an immediate dilutive effect on the ownership interests of our common stockholders. ​ On or after February 10, 2026 (the “Conversion Right Date”), holders of the Series A preferred units have the right to convert each Series A preferred unit into a number of Common units equal to (i) the $1,000 liquidation preference plus all accrued and unpaid distributions, divided by (ii) the volume-weighted average price per share of the Company’s common 18 Table of Contents stock for the 20 trading days immediately preceding the applicable conversion date.
The conversion of such Series A preferred units and potential redemption of the converted Common units for shares of common stock could have an immediate dilutive effect on the ownership interests of our common stockholders. ​ On or after February 10, 2026 (the “Conversion Right Date”), holders of the Series A preferred units have the right to convert each Series A preferred unit into a number of Common units equal to (i) the $1,000 liquidation preference plus all accrued and unpaid distributions, divided by (ii) the volume-weighted average price per share of the Company’s common stock for the 20 trading days immediately preceding the applicable conversion date.
By value, approximately 30% of our portfolio is used for permanent crops, and, in the future, we may add to our investments in farmland used for permanent crops, as opposed to annual row crops. Permanent crops have plant structures (such as trees, vines or bushes) that produce yearly crops without being replanted. Examples include blueberries, oranges, apples, almonds and grapes.
By value, approximately 40% of our portfolio is used for permanent crops, and, in the future, we may add to our investments in farmland used for permanent crops, as opposed to annual row crops. Permanent crops have plant structures (such as trees, vines or bushes) that produce yearly crops without being replanted. Examples include blueberries, oranges, apples, almonds and grapes.
The per share trading price of our common stock may decline significantly when we register the shares of our common stock issuable upon redemption of outstanding Common units. ​ Future offerings of debt, which would be senior to our common stock and any outstanding preferred equity securities upon liquidation, which may be senior to our common stock for purposes of dividend distributions or upon liquidation, and Common units in connection with future acquisitions may materially adversely affect us, including the per share trading price of our common stock. ​ In the future, we may attempt to increase our capital resources by making additional offerings of debt or equity securities (or causing our Operating Partnership to issue debt securities), including medium-term notes, senior or subordinated notes and classes or series of preferred stock.
The per share trading price of our common stock may decline significantly when we register the shares of our common stock issuable upon redemption of outstanding Common units. 38 Table of Contents ​ Future offerings of debt, which would be senior to our common stock and any outstanding preferred equity securities upon liquidation, which may be senior to our common stock for purposes of dividend distributions or upon liquidation, and Common units in connection with future acquisitions may materially adversely affect us, including the per share trading price of our common stock. ​ In the future, we may attempt to increase our capital resources by making additional offerings of debt or equity securities (or causing our Operating Partnership to issue debt securities), including medium-term notes, senior or subordinated notes and classes or series of preferred stock.
Presidential administration and the Federal Reserve to curb inflation or the impact of future public health crises; ● novel and unforeseen market volatility and trading strategies, such as short squeeze-rallies caused by retail investors on retail trading platforms; ● the market’s view of the quality of our assets; ● the market’s perception of our growth potential; ● our debt levels; ● our current and expected future earnings; ● our cash flow and cash distributions; and ● the market price per share of our common stock. ​ If we cannot obtain capital from third-party sources, we may not be able to acquire properties when strategic opportunities exist, meet the capital and operating needs of our existing properties, satisfy our debt service obligations or make the cash distributions to our stockholders necessary to qualify and maintain our qualification as a REIT. ​ 21 Table of Contents Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties and harm our financial condition. ​ The real estate investments made, and to be made, by us may be difficult to sell quickly.
Presidential administration and the Federal Reserve to impose tariffs and/or curb inflation or the impact of future public health crises; ● novel and unforeseen market volatility and trading strategies, such as short squeeze-rallies caused by retail investors on retail trading platforms; ● the market’s view of the quality of our assets; ● the market’s perception of our growth potential; ● our debt levels; ● our current and expected future earnings; ● our cash flow and cash distributions; and ● the market price per share of our common stock. ​ If we cannot obtain capital from third-party sources, we may not be able to acquire properties when strategic opportunities exist, meet the capital and operating needs of our existing properties, satisfy our debt service obligations or make the cash distributions to our stockholders necessary to qualify and maintain our qualification as a REIT. ​ Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties and harm our financial condition. ​ The real estate investments made, and to be made, by us may be difficult to sell quickly.
Though a sale of such property by a TRS likely would mitigate the risk of incurring a 100% penalty tax, the TRS itself would be subject to regular corporate income tax at the U.S. federal level, and potentially at the state and local levels, on the gain recognized on the sale of the property as well as any income earned while the property is operated by the TRS.
Though a sale of such property by a TRS likely would mitigate the risk of incurring a 100% penalty tax, the TRS itself would be subject to regular corporate income tax at the U.S. federal, state and local levels on the gain recognized on the sale of the property as well as any income earned while the property is operated by the TRS.
In addition, as of December 31, 2023, other than the Common units held by us, approximately 1.2 million Common units in our Operating Partnership were outstanding, 1.2 million of which currently may be tendered for redemption by the holders, for cash, or at our option, for shares of our common stock, on a one-for-one basis.
In addition, as of December 31, 2024, other than the Common units held by us, approximately 1.2 million Common units in our Operating Partnership were outstanding, 1.2 million of which currently may be tendered for redemption by the holders, for cash, or at our option, for shares of our common stock, on a one-for-one basis.
If cash available for distribution generated by our assets is less than our current estimate, or if such cash available for distribution decreases in future periods from expected levels, our inability to make the expected distributions could result in a decrease in the market price of our common stock. ​ Continued increases in market interest rates may have an adverse effect on the market price of our common stock. ​ One of the factors that investors may consider in deciding whether to buy or sell our common stock is our distribution yield, which is our distribution rate as a percentage of the share price of our common stock, relative to market interest rates.
If cash available for distribution generated by our assets is less than our current estimate, or if such cash available for distribution decreases in future periods from expected levels, our inability to make the expected distributions could result in a decrease in the market price of our common stock. ​ Elevated market interest rates may have an adverse effect on the market price of our common stock. ​ One of the factors that investors may consider in deciding whether to buy or sell our common stock is our distribution yield, which is our distribution rate as a percentage of the share price of our common stock, relative to market interest rates.
If we cease to qualify as a REIT, we would become subject to U.S. federal income tax on our taxable income at regular corporate rates and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on our total return to our stockholders. ​ 35 Table of Contents If our Operating Partnership were classified as a “publicly traded partnership” taxable as a corporation for U.S. federal income tax purposes, we would fail to qualify as a REIT and would suffer other adverse tax consequences. ​ We intend for our Operating Partnership to be treated as a “partnership” for U.S. federal income tax purposes.
If we cease to qualify as a REIT, we would become subject to U.S. federal income tax on our taxable income at regular corporate rates and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on our total return to our stockholders. ​ If our Operating Partnership were classified as a “publicly traded partnership” taxable as a corporation for U.S. federal income tax purposes, we would fail to qualify as a REIT and would suffer other adverse tax consequences. ​ We intend for our Operating Partnership to be treated as a “partnership” for U.S. federal income tax purposes.
These requirements could cause us to distribute amounts that otherwise would be spent on acquisitions of properties and it is possible that we might be required to borrow funds, use proceeds from the issuance of securities, pay taxable dividends of our stock or debt securities or sell assets in order to distribute enough of our taxable income to maintain our qualification as a REIT and to avoid the payment of U.S. federal income and excise taxes. ​ Future sales of properties may result in penalty taxes or may be made through TRSs, each of which would diminish the return to you. ​ It is possible that one or more sales of our properties may be “prohibited transactions” under provisions of the Code.
These requirements could cause us to distribute amounts that otherwise would be spent on acquisitions of properties and it is possible that we might be required to borrow funds, use proceeds from the issuance of securities, or sell assets in order to distribute enough of our taxable income to maintain our qualification as a REIT and to avoid the payment of U.S. federal income and excise taxes. ​ Future sales of properties may result in penalty taxes or may be made through TRSs, each of which would diminish the return to you. ​ It is possible that one or more sales of our properties may be “prohibited transactions” under provisions of the Code.
Additional states may, in the future, pass similar or more restrictive laws, and we may not be legally permitted, or it may become overly burdensome or expensive, to acquire properties in these states, which could impede the growth of our portfolio and our ability to diversify geographically in states that might otherwise have attractive investment opportunities. ​ Our farms are subject to adverse weather conditions, seasonal variability, crop disease and other contaminants, natural disasters and other natural conditions, including the effects of climate change and water availability, which may adversely affect the amount of variable rent or income from direct operations and/or our tenants' ability to pay fixed or variable rent and thereby have a material adverse effect on our results of operations, financial condition, and our ability to make distributions to stockholders. ​ Crops are vulnerable to adverse weather conditions, including windstorms, tornados, floods, drought and temperature extremes, which are common but difficult to predict, and may occur with higher frequency or be even less predictable in the future due to the effects of climate change.
Additional states may, in the future, pass similar or more restrictive laws, and we may not be legally permitted, or it may 22 Table of Contents become overly burdensome or expensive, to acquire properties in these states, which could impede the growth of our portfolio and our ability to diversify geographically in states that might otherwise have attractive investment opportunities. ​ Our farms are subject to adverse weather conditions, seasonal variability, crop disease and other contaminants, natural disasters and other natural conditions, including the effects of climate change and water availability, which may adversely affect the amount of variable rent or income from direct operations and/or our tenants' ability to pay fixed or variable rent and thereby have a material adverse effect on our results of operations, financial condition, and our ability to make distributions to stockholders. ​ Crops are vulnerable to adverse weather conditions, including windstorms, tornadoes, floods, drought, wildfires and temperature extremes, which are common but difficult to predict, and may occur with higher frequency or be even less predictable in the future due to the effects of climate change.
These requirements make it more difficult to change our senior management by removing and replacing directors and may prevent a change in control of our Company that is in the best interests of our stockholders. ​ Our Operating Partnership may issue additional Common units or one or more classes of preferred units to third parties without the consent of our stockholders, which would reduce our ownership percentage in our Operating Partnership and could have a dilutive effect on the amount of distributions made to us by our Operating Partnership and, therefore, the amount of distributions we can make to our stockholders. ​ As of December 31, 2023, we owned approximately 97.6% of the outstanding Common units in our Operating Partnership (on a fully diluted basis).
These requirements make it more difficult to change our senior management by removing and replacing directors and may prevent a change in control of our Company that is in the best interests of our stockholders. ​ Our Operating Partnership may issue additional Common units or one or more classes of preferred units to third parties without the consent of our stockholders, which would reduce our ownership percentage in our Operating Partnership and could have a dilutive effect on the amount of distributions made to us by our Operating Partnership and, therefore, the amount of distributions we can make to our stockholders. ​ As of December 31, 2024, we owned approximately 97.5% of the outstanding Common units in our Operating Partnership (on a fully diluted basis).
It is difficult to predict the occurrence or severity of such product recalls, fines or litigation as well as their impact upon our tenants. ​ We are particularly susceptible to adverse weather conditions (such as windstorms, tornados, floods, drought, hail and temperature extremes), transportation conditions (including navigation of the Mississippi River), crop disease, pests and other adverse growing conditions in California, Illinois, North Carolina, Colorado and Arkansas, which generate a significant portion of our revenues. ​ While many of our leases are on a fixed-rent basis that does not change based on the success of the farming operations, we also utilize variable-rent leases pursuant to which the amount of the rent depends on crop yields and prices in regions where such arrangements are prevalent.
It is difficult to predict the occurrence or severity of such product recalls, fines or litigation as well as their impact upon our tenants. ​ We are particularly susceptible to adverse weather conditions (such as windstorms, tornadoes, floods, drought, hail, wildfires and temperature extremes), transportation conditions (including navigation of the Mississippi River), crop disease, pests and other adverse growing conditions in California, Illinois, Colorado and Arkansas, which generate a significant portion of our revenues. ​ While many of our leases are on a fixed-rent basis that does not change based on the success of the farming operations, we also utilize variable-rent leases pursuant to which the amount of the rent depends on crop yields and prices in regions where such arrangements are prevalent.
This would substantially reduce the cash available to pay distributions to our stockholders. ​ Complying with the REIT requirements may cause us to forego otherwise attractive opportunities or sell properties earlier than we wish. ​ To maintain our qualification as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of shares of our stock.
This would substantially reduce the cash available to pay distributions to our stockholders. ​ 35 Table of Contents Complying with the REIT requirements may cause us to forego otherwise attractive opportunities or sell properties earlier or later than we wish. ​ To maintain our qualification as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of shares of our stock.
The ability of our tenants to fulfill their obligations under our leases depends, in part, upon the overall profitability of their farming operations, which could be adversely impacted by, among other things, adverse weather conditions, crop prices, crop disease, pests, and unfavorable or uncertain political, economic, business, trade or regulatory conditions.
The ability of our tenants to fulfill their obligations under our leases 16 Table of Contents depends, in part, upon the overall profitability of their farming operations, which could be adversely impacted by, among other things, adverse weather conditions, crop prices, crop disease, pests, and unfavorable or uncertain political, economic, business, trade or regulatory conditions.
To the extent the Series A preferred units are converted to Common units and such Common units are redeemed for shares of common stock, our existing common stockholders would experience an immediate, and potentially significant, dilutive effect on their ownership interest in the Company, which could cause the market price of our common stock to be materially adversely affected. ​ Global economic conditions, including inflation and supply chain disruptions, could adversely affect our and our tenants’ operations. ​ General global economic downturns and macroeconomic trends, including heightened inflation, volatility in the capital markets, interest rate and currency rate fluctuations, the war in Ukraine and the ongoing conflict in the Middle East, changes in trade policies among nations that import and/or export agricultural products and economic slowdown or recession, may result in unfavorable conditions that could negatively affect demand for our tenants’ crops and exacerbate some of the other risks that affect our business, financial condition and results of operations.
To the extent the Series A preferred units are converted to Common units and such Common units are redeemed for shares of common stock, our existing common stockholders would experience an immediate, and potentially significant, dilutive effect on their ownership interest in the Company, which could cause the market price of our common stock to be materially adversely affected. ​ 18 Table of Contents Global economic conditions, including elevated levels of inflation and supply chain disruptions, could materially and adversely affect our and our tenants’ operations. ​ General global economic downturns and macroeconomic trends, including heightened inflation, volatility in the capital markets, interest rate and currency rate fluctuations, the war in Ukraine and the ongoing conflicts in the Middle East, changes in trade policies among nations that import and/or export agricultural products and economic slowdown or recession, may result in unfavorable conditions that could negatively affect demand for our tenants’ crops and exacerbate some of the other risks that affect our business, financial condition and results of operations.
In addition, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment. ​ As a result, any downturn in the profitability of the farming operations of our tenants or a downturn in the farming industry as a whole could have a material adverse effect on our financial condition, results of operations, cash flow and ability to make distributions to our stockholders. ​ We have a substantial amount of indebtedness outstanding, which may expose us to the risk of default under our debt obligations, restrict our operations and our ability to grow our business and revenues and restrict our ability to pay distributions to our stockholders. ​ As of December 31, 2023, we had approximately $363.1 million of outstanding indebtedness excluding debt issuance costs, most of which is secured by mortgages on our farms.
In addition, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment. ​ As a result, any downturn in the profitability of the farming operations of our tenants or a downturn in the farming industry as a whole could have a material adverse effect on our financial condition, results of operations, cash flow and ability to make distributions to our stockholders. ​ We have a substantial amount of indebtedness outstanding, which may expose us to the risk of default under our debt obligations, restrict our operations and our ability to grow our business and revenues and restrict our ability to pay distributions to our stockholders. ​ As of December 31, 2024, we had approximately $204.6 million of outstanding indebtedness excluding debt issuance costs, most of which is secured by mortgages on our farms.
As a result, we are required to frequently re-lease our 20 Table of Contents properties upon the expiration of our leases, which will make us more susceptible to declines in market rental rates than we would be if we were to enter into longer term leases.
As a result, we are required to frequently re-lease our properties upon the expiration of our leases, which will make us more susceptible to declines in market rental rates than we would be if we were to enter into longer term leases.
As a result, any development or situation that adversely affects the value of properties generally, or the prices of corn, soybeans, wheat, rice or cotton, could have a more significant adverse impact on us than if our portfolio had less exposure to primary crops, which could materially and adversely impact our financial condition, results of operations and ability to make distributions to our stockholders. ​ Investments in farmland used for permanent/specialty crops have a different risk profile than farmland used for annual row crops.
As a result, any development or situation that adversely affects the value of properties generally, or the prices of corn, soybeans, wheat, rice or cotton, could have a more significant adverse impact on us than if our portfolio had less 19 Table of Contents exposure to primary crops, which could materially and adversely impact our financial condition, results of operations and ability to make distributions to our stockholders. ​ Investments in farmland used for permanent/specialty crops have a higher risk profile than farmland used for annual row crops.
The success of the farmland or farm-related property may be affected by many factors outside the control of the borrower, including adverse weather conditions that prevent the planting of a crop or limit crop yields, declines in market prices for agricultural products (both domestically and internationally) and the impact of government regulations (including changes in price supports, subsidies and environmental regulations).
The success of the farmland, farm-related property and other real estate, may be adversely affected by many factors outside the control of the borrower, including adverse weather conditions that prevent the planting of a crop or limit crop yields, declines in market prices for agricultural products (both domestically and internationally) and the impact of government regulations (including changes in price supports, subsidies and environmental regulations).
Any debt we incur will increase our leverage, expose us to the risk of default and may impose operating restrictions on us, and any additional equity we raise (including the issuance of common or preferred units) could be dilutive to existing stockholders.
Any debt we incur will increase our leverage, expose us to the risk of default and may impose operating restrictions on us, and 21 Table of Contents any additional equity we raise (including the issuance of common or preferred units) could be dilutive to existing stockholders.
Damages to tenants’ crops may vary in severity and effect, depending on the stage of production at the time of infection or infestation, the type of treatment applied and climatic conditions. The costs to control these infestations vary depending on the severity of the damage and the extent of the 22 Table of Contents plantings affected.
Damages to tenants’ crops may vary in severity and effect, depending on the stage of production at the time of infection or infestation, the type of treatment applied and climatic conditions. The costs to control these infestations vary depending on the severity of the damage and the extent of the plantings affected.
On June 30, 2023, the Court of Appeals granted the 27 Table of Contents Company’s appeal, determining that the Company’s claims against Sabrepoint are not barred, reversing the trial court and remanding the case for further proceedings on the merits.
On June 30, 2023, the Court of Appeals granted the Company’s appeal, determining that the Company’s claims against Sabrepoint are not barred, reversing the trial court and remanding the case for further proceedings on the merits.
There can be no assurances as to the impact of any change in trade policy on market prices of crops. ​ Similarly, our and our tenants’ operations are subject to risks stemming from geopolitical conflicts, such as the ongoing war in Ukraine and the conflict in the Middle East.
There can be no assurances as to the impact of any change in trade policy, including the effects of tariffs, on market prices of crops. ​ Similarly, our and our tenants’ operations are subject to risks stemming from geopolitical conflicts, such as the ongoing war in Ukraine and the ongoing conflicts in the Middle East.
As of December 31, 2023, we owned 320 acres of farmland in Kansas, 815 acres in Missouri and 2,114 acres in Oklahoma, and our ownership of those farms may be challenged under Kansas, Missouri or Oklahoma law, in which case we may be required to sell those farms at an unfavorable time and on unfavorable terms.
As of December 31, 2024, we owned 320 acres of farmland in Kansas and 815 acres in Missouri and our ownership of those farms may be challenged under Kansas or Missouri law, in which case we may be required to sell those farms at an unfavorable time and on unfavorable terms.
Payments on such loans depend on the profitable operation or management of the farmland or farmland-related property securing the loan or the maintenance of any equipment, or other assets securing the loan.
Payments on such loans depend on the profitable operation or management of the farmland, farmland-related property, and other real estate securing the loan or the maintenance of any equipment, or other assets securing the loan.
While we have sought to engage regulators to address activities that we believe are intentionally misleading, we can make no guarantees that regulatory authorities will take action on these types of activities, and we cannot guarantee that any action taken by regulators or legislators will timely address damage done by the activities of these websites and authors. ​ 38 Table of Contents The number of shares of our common stock available for future issuance or sale may have adverse effects on the market price of our common stock. ​ As of December 31, 2023, approximately 48.0 million shares of our common stock were outstanding.
While we have sought to engage regulators to address activities that we believe are intentionally misleading, we can make no guarantees that regulatory authorities will take action on these types of activities, and we cannot guarantee that any action taken by regulators or legislators will timely address damage done by the activities of these websites and authors. ​ The number of shares of our common stock available for future issuance or sale may have adverse effects on the market price of our common stock. ​ As of December 31, 2024, approximately 45.9 million shares of our common stock were outstanding.
If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax. ​ As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, and would substantially reduce our ability to make distributions to our stockholders. ​ To qualify as a REIT and to avoid the payment of U.S. federal income and excise taxes, we may be forced to borrow funds, use proceeds from the issuance of securities, pay taxable dividends of our stock or debt securities or sell assets to make distributions, which may result in our distributing amounts that may otherwise be used for our operations. ​ To obtain the favorable tax treatment accorded to REITs, we normally are required each year to distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and by excluding net capital gains.
Additionally, we would no longer be required to make distributions under the Code. ​ As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, and would substantially reduce our ability to make distributions to our stockholders. ​ To qualify as a REIT and to avoid the payment of U.S. federal income and excise taxes, we may be forced to borrow funds, use proceeds from the issuance of securities, pay taxable dividends of our stock or debt securities or sell assets to make distributions, which may result in our distributing amounts that may otherwise be used for our operations. ​ To obtain the favorable tax treatment accorded to REITs, we normally are required each year to distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and by excluding net capital gains.
Mortgage debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties subject to mortgage debt. ​ As of December 31, 2023, we had approximately $363.1 million of outstanding mortgage indebtedness excluding debt issuance costs.
Mortgage debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties subject to mortgage debt. ​ As of December 31, 2024, we had approximately $204.6 million of outstanding mortgage indebtedness excluding debt issuance costs.
While our Annual Report on Form 10-K for the year ended December 31, 2019 contained an independent auditor’s attestation report pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), we are not required to include such an audit report in this Annual Report. We have identified material weaknesses in the past.
While our Annual Report on Form 10-K for the year ended December 31, 2019 contained an independent auditor’s 25 Table of Contents attestation report pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), we are not required to include such an audit report in this Annual Report.
As of December 31, 2023, the remaining loan balances total $13.9 million (representing 1% of our total assets as of December 31, 2023), of which $13.4 million were secured by senior first-lien mortgages and $0.5 million was secured by a second mortgage. We intend to make similar loans under the FPI Loan Program in the future.
As of December 31, 2024, the remaining loan balances total $32.7 million (representing 4% of our total assets as of December 31, 2024), of which $32.2 million were secured by senior first-lien mortgages and $0.5 million was secured by a second mortgage. We intend to make similar loans under the FPI Loan Program in the future.
However, we can provide no assurances that this increased profitability is sustainable in light of inflationary pressures on farming costs, rising interest rates and other economic factors or that such increase will result in commensurate increases in rental rates. ​ A reduction in crop prices could adversely affect the profitability of our tenants and negatively impact their ability to make rental payments as they come due.
While U.S. farmers have seen increased profitability as a result of higher prices that stemmed from such conflicts, we can provide no assurances that this increased profitability is sustainable in light of inflationary pressures on farming costs, elevated interest rates and other economic factors or that such increase will result in commensurate increases in rental rates. ​ A reduction in crop prices could adversely affect the profitability of our tenants and negatively impact their ability to make rental payments as they come due.
The petition is now fully briefed and pending a decision from the court. For more information see “Note 8—Commitments and Contingencies” to our Consolidated Financial Statements included in Part IV, Item 8 of this Annual Report on Form 10-K. We may not be successful in this litigation, in which case we would have incurred significant costs and expenses.
For more information see “Note 8—Commitments and Contingencies” to our Consolidated Financial Statements included in Part IV, Item 8 of this Annual Report on Form 10-K. We may not be successful in this litigation, in which case we would have incurred significant costs and expenses.
On October 13, 2023, Sabrepoint filed a Petition for Review with the Texas Supreme Court, requesting the court to review the Court of Appeals’ decision. The Company filed a response to the Sabrepoint Petition for Review with the Texas Supreme Court on December 27, 2023, and on February 16, 2024, the Texas Supreme Court requested a briefing on the merits.
On October 13, 2023, Sabrepoint filed a Petition for Review with the Texas Supreme Court, requesting the court to review the Court of Appeals’ decision. The Company filed a 27 Table of Contents response to the Sabrepoint Petition for Review with the Texas Supreme Court on December 27, 2023.
In addition, during 2022 and 2023 the Federal Reserve repeatedly raised interest rates in response to concerns about inflation. Interest rate increases or other government actions taken to reduce inflation could also result in an economic recession. ​ Our tenants have experienced challenges in their supply chains and related price increases.
Future interest rate increases or other government actions taken to reduce inflation could also result in an economic recession. ​ Our tenants have experienced challenges in their supply chains and related price increases.
If market interest rates continue to stay elevated or increase further, prospective investors may desire a higher distribution yield on our common stock or may seek securities paying higher dividends or interest.
However, interest rates remain high and there can be no certainty as to the occurrence, timing, or magnitude of future rate cuts by the Federal Reserve. If market interest rates continue to stay elevated or increase, prospective investors may desire a higher distribution yield on our common stock or may seek securities paying higher dividends or interest.
We cannot predict whether, when or to what extent any new U.S. federal tax laws, regulations, interpretations or rulings will impact the real estate investment industry or REITs. Prospective investors are urged to consult their tax advisors regarding the effect of potential future changes to the federal tax laws on an investment in our shares.
Prospective investors are urged to consult their tax advisors regarding the effect of potential future changes to the federal tax laws on an investment in our shares.
In addition, we generally would be disqualified from treatment as a REIT for the four taxable years following the year in which we lost our REIT status. Losing our REIT status would reduce our net earnings available for investment or distribution because of the additional tax liability.
Losing our REIT status would reduce our net earnings available for investment or distribution because of the additional tax liability.
As a result of the manner in which we acquired the Hudye Farm in 2014, a subsequent taxable disposition by us of any such assets generally would be subject to the foregoing built-in gain rules. ​ In certain circumstances, we may be subject to U.S. federal and state income taxes as a REIT, which would reduce our cash available for distribution to our stockholders. ​ Even if we qualify as a REIT, we may be subject to U.S. federal income taxes or state taxes.
No assurances can be provided that we would be able to successfully avoid the 100% penalty tax through the use of TRSs. ​ In certain circumstances, we may be subject to U.S. federal and state income taxes as a REIT, which would reduce our cash available for distribution to our stockholders. ​ Even if we qualify as a REIT, we may be subject to U.S. federal income taxes or state taxes.
As of December 31, 2023, $136.0 million of our outstanding indebtedness was subject to interest rates that reset from time to time (excluding our floating rate debt), of which $43.9 million was subject to interest rates that will be reset in 2024.
As of December 31, 2024, $78.9 million of our outstanding indebtedness was subject to interest rates that reset from time to time (excluding our floating rate debt). There is no debt subject to interest rate resets in 2025 (for more information on rate resets see “Note 7—Mortgage Notes, Lines of Credit and Bonds Payable”).
Furthermore, prolonged trade disputes or geopolitical conflicts that lead to a continuation of depressed crop prices could materially and adversely affect the underlying value of our properties. 23 Table of Contents ​ Adverse changes in government policies related to farming could affect the prices of crops and the profitability of farming operations, which could materially and adversely affect the value of our properties and our results of operations. ​ There are a number of government programs that directly or indirectly affect the profitability of farm operators.
Although rental payments under the majority of our leases typically are not based on the quality or profitability of our tenants' harvests, any of these factors could adversely affect our tenants' ability to meet their obligations to us and our ability to lease or re-lease properties on favorable terms, or at all, which could have a material adverse effect on the value of our properties, our results of operations and our ability to make distributions to our stockholders. ​ 23 Table of Contents Adverse changes in government policies related to farming could affect the prices of crops and the profitability of farming operations, which could materially and adversely affect the value of our properties and our results of operations. ​ There are a number of government programs that directly or indirectly affect the profitability of farm operators.
The Federal Reserve has maintained elevated benchmark interest rates during 2022 and 2023 to help curb inflation, and although the Federal Reserve may reduce benchmark interest rates in 2024, there are no assurances that interest rates will be reduced on the anticipated timeline, and interest rates remain high.
The Federal Reserve maintained elevated benchmark interest rates during 2022 and 2023 to help curb inflation. In September, November and December 2024, the Federal Reserve lowered benchmark interest rates, and has signaled the possibility of future rate cuts.
In addition, distributions would no longer qualify for the dividends paid deduction, and we would no longer be required to make distributions.
In addition, distributions would no longer qualify for the dividends paid deduction, which would result in an increase in our tax liabilities. If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax.
Continued deterioration in the domestic or international economic environment may cause decreased demand for our tenants’ crops, which could result in lower sales volume and lower prices for their crops, as well as increase the cost of operating their businesses and a corresponding adverse effect on their ability to make rental payments to us, which would adversely impact our financial condition and results of operations. ​ Approximately 70% of our portfolio is comprised of properties used to grow primary crops such as corn, soybeans, wheat, rice and cotton, which subjects us to risks associated with primary row crops. ​ By value, approximately 70% of our portfolio is used for primary crops, such as corn, soybeans, wheat, rice and cotton.
Furthermore, prolonged trade disputes or geopolitical conflicts that lead to a continuation of depressed crop prices could materially and adversely affect the underlying value of our properties. ​ Approximately 60% of our portfolio is comprised of properties used to grow primary crops such as corn, soybeans, wheat, rice and cotton, which subjects us to risks associated with primary row crops. ​ By value, approximately 60% of our portfolio is used for primary crops, such as corn, soybeans, wheat, rice and cotton.
These loans consist of: 15 loan agreements which were originally secured by senior first-lien mortgage loans secured against farmland; one loan is secured by a second mortgage secured against farmland and a personal guaranty; three loan agreements which were originally secured by working capital assets of the borrower; and one loan agreement which was originally secured by equipment of the borrower.
These loans consist of loan agreements which were originally secured by first or second lien mortgage loans secured against farmland or other real estate properties and first liens on crops and insurance proceeds. In many cases, loan security is supplemented with personal guarantees.
This impacts the volatility of the market prices of certain crops that our tenants grow on our properties.
For example, Canada and the European Union have recently announced their intention to implement retaliatory tariffs on the United States. Tariffs and trade restrictions impact the volatility of the market prices of certain crops that our tenants grow on our properties.
Removed
As of December 31, 2023, the weighted average interest rate of the indebtedness subject to interest rate resets in 2024 was 3.07%, which we expect to increase significantly if benchmark interest rate levels remain constant as we expect them to during the course of 2024 (for more information on rate resets see “Note 7—Mortgage Notes, Lines of Credit and Bonds Payable”).
Added
However, interest rates remain high and there can be no certainty as to the occurrence, timing, or magnitude of future rate cuts by the Federal Reserve.
Removed
Food prices were at near record highs before the beginning of the war in Ukraine and have increased as a result of the war. U.S. farmers have seen increased profitability as a result of rising prices.
Added
In addition, during 2022 and 2023 the Federal Reserve repeatedly raised interest rates in response to concerns about inflation.
Removed
As of December 31, 2023, we have made loans to twelve distinct borrowers with original principal amounts totaling $36.7 million.
Added
Although the Federal Reserve lowered interest rates in September, November and December 2024 and has signaled the possibility of further rate cuts, interest rates remain high and there can be no certainty as to the occurrence, timing, or magnitude of future rate cuts by the Federal Reserve.
Removed
No assurances can be provided that we would be able to successfully avoid the 100% penalty tax through the use of TRSs. ​ In addition, if we acquire any asset from a C corporation ( i.e. , a corporation generally subject to full corporate-level tax) in a merger or other transaction in which we acquire a basis in the asset determined by reference either to the C corporation’s basis in the asset or to another asset, we will pay tax, at the highest U.S. federal corporate income tax rate, on any built-in gain recognized on a taxable disposition of the asset during the 5-year period after its acquisition.
Added
Further, the recent imposition by the United States of tariffs on imported goods from China and efforts to impose tariffs on goods from certain other countries may strain international trade relations. Such tariffs also increase the risk that foreign governments will implement retaliatory tariffs on goods imported from the United States.
Added
As of December 31, 2024, we have made loans to 14 distinct entities. In certain cases, the entities consist of a single borrower and in other cases the entities are comprised of distinct individuals or business entities that are managed by a single individual or family. The original principal amounts have totaled $67.3 million over the life of the program.
Added
Sabrepoint filed a reply in support of its petition on January 25, 2024, and on February 16, 2024, the court requested a briefing on the merits. On January 16, 2025, the Texas Supreme Court held oral arguments, and Sabrepoint's appeal is now fully briefed and pending a decision by the court.
Added
In addition, various provisions of the Code are set to expire at the end of 2025, including the 20% deduction described above and other provisions that are favorable to REITs and their shareholders.
Added
We cannot predict whether, when or to what extent any new U.S. federal tax laws, regulations, interpretations or rulings will impact the real estate investment industry or REITs, including whether various favorable U.S. federal tax laws 36 Table of Contents will be extended.
Added
The Federal Reserve maintained elevated benchmark interest rates during 2022 and 2023 to help curb inflation. In September, November and December 2024, the Federal Reserve lowered benchmark interest rates, and has signaled the possibility of future rate cuts.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+1 added−0 removed6 unchanged
Biggest changeThe Company generally approaches cybersecurity threats through a comprehensive approach, with the specific goals of: (i) identifying, preventing and mitigating cybersecurity threats to the Company; (ii) preserving the confidentiality, security and availability of the information that we collect and store to use in our business; (iii) protecting the Company’s intellectual property; (iv) maintaining the confidence of our customers, clients and business partners; and (v) providing appropriate public disclosure of cybersecurity risks and incidents when required. 39 Table of Contents Risk Management and Strategy Consistent with overall risk management policies and practices, the Company’s cybersecurity program focuses on the following areas: ● Vigilance: The Company employs tools to identify, prevent and mitigate cybersecurity threats and respond to cybersecurity incidents in accordance with our internal cybersecurity policies and controls. ● Systems Safeguards: The Company and its third party vendors deploy systems safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved on an ongoing basis. ● Third-Party Risk Management: The Company ensures that all third party vendors that process or have access to sensitive information have appropriate cybersecurity risk controls in place. ● Training: The Company communicates regularly with employees to increase awareness around phishing and spoofing attempts and other cybersecurity schemes.
Biggest changeRisk Management and Strategy Consistent with overall risk management policies and practices, the Company’s cybersecurity program focuses on the following areas: ● Vigilance: The Company employs tools to identify, prevent and mitigate cybersecurity threats and respond to cybersecurity incidents in accordance with our internal cybersecurity policies and controls. ● Systems Safeguards: The Company and its third party vendors deploy systems safeguards that are designed to protect the Company’s information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, anti-malware functionality and access controls, which are evaluated and improved on an ongoing basis. 39 Table of Contents ● Third-Party Risk Management : The Company ensures that all third party vendors that process or have access to sensitive information have appropriate cybersecurity risk controls in place. ● Training: The Company communicates regularly with employees to increase awareness around phishing and spoofing attempts and other cybersecurity schemes.
Employees are encouraged to report suspicious emails or incidents to the General Counsel or the President and Chief Executive Officer. ● Incident Response Policies: The Company has established and maintains incident response policies that address the Company’s response to a cybersecurity incident. ● Communication, Coordination and Disclosure: The Company promotes awareness and surveillance over cybersecurity risk at all levels of the organization, including staff, senior management and the Board.
Employees are encouraged to report suspicious emails or incidents to the General Counsel or the President and Chief Executive Officer. ● Incident Response Policies: The Company has established and maintains incident response policies that address the Company’s response to a cybersecurity incident. ● Communication, Coordination and Disclosure: The Company promotes awareness and surveillance over cybersecurity risk at all levels of the organization, including staff, senior management and our Board of Directors.
Garrison monitor the prevention, detection, mitigation and remediation of cybersecurity incidents in real time, and report such incidents to the Board and applicable regulatory authorities when appropriate. The Company has in the past experienced cyberattacks on its computer networks and, although none to date have been material, the Company expects that additional cyberattacks will occur in the future.
Garrison monitor the prevention, detection, mitigation and remediation of cybersecurity incidents in real time, and report such incidents to our Board of Directors and applicable regulatory authorities when appropriate. The Company has in the past experienced cyberattacks on its computer networks and, although none to date have been material, the Company expects that additional cyberattacks will occur in the future.
Governance The Board oversees the management of risks from cybersecurity threats, including the policies, standards, processes and practices that the Company’s management implements to address risks from cybersecurity threats. The Board receives presentations on cybersecurity issues and developments as needed.
Governance Our Board of Directors oversees the management of risks from cybersecurity threats, including the policies, standards, processes and practices that the Company’s management implements to address risks from cybersecurity threats. Our Board of Directors receives presentations on cybersecurity issues and developments as needed.
Garrison and the Company’s Chief Financial Officer each hold degrees in their respective fields, and each have over 15 years of experience with managing risks at the Company and in environments similar to the Company’s, including risks arising from cybersecurity threats. 40 Table of Contents Mr.
Garrison and the Company’s Chief Financial Officer each hold degrees in their respective fields, and each have over 15 years of experience with managing risks at the Company and in environments similar to the Company’s, including risks arising from cybersecurity threats. Mr.
Fabbri works in coordination with the Company’s General Counsel, Christine Garrison, to assess and respond, including by reporting this incident to the Board and/or applicable regulatory authorities, as necessary or required. Mr. Fabbri has a high level of exposure to cybersecurity oversight through his current and previous work in the technology sector. Mr.
Fabbri works in coordination with the Company’s General Counsel, Christine Garrison, to assess and respond, including by reporting the breach or incident to our Board of Directors and/or applicable regulatory authorities, as necessary or required. Mr. Fabbri has a high level of exposure to cybersecurity oversight through his current and previous work in the technology sector. Mr.
Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and are not reasonably likely to affect the Company, including its business strategy, results of operations, or financial condition. ​
Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected and are not reasonably likely to affect the Company, including its business strategy, results of operations, or financial condition. ​ 40 Table of Contents
Fabbri, in coordination with the Board, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents. Mr. Fabbri and Ms.
Fabbri, in coordination with our Board of Directors, works collaboratively across the Company to implement a program designed to protect the Company’s information systems from cybersecurity threats and to promptly respond to any cybersecurity incidents. Mr. Fabbri and Ms.
At least once each year, the Board discusses the Company’s approach to cybersecurity risk management with the Company’s President and Chief Executive Officer and General Counsel.
At least once each year, our Board of Directors discusses the Company’s approach to cybersecurity risk management with the Company’s President and Chief Executive Officer and General Counsel.
The Board also will receive prompt and timely information regarding any cybersecurity incident that meets established reporting materiality thresholds, as well as ongoing updates regarding such incident until it has been addressed.
Our Board of Directors also will receive prompt and timely information regarding any cybersecurity incident that meets established reporting materiality thresholds, as well as ongoing updates regarding such incident until it has been addressed.
Added
The Company generally approaches cybersecurity threats through a comprehensive approach, with the specific goals of: (i) identifying, preventing and mitigating cybersecurity threats to the Company; (ii) preserving the confidentiality, security and availability of the information that we collect and store to use in our business; (iii) protecting the Company’s intellectual property; (iv) maintaining the confidence of our customers, clients and business partners; and (v) providing appropriate public disclosure of cybersecurity risks and incidents when required.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of December 31, 2023, we had $83.3 million of availability under the program. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands except per share amounts) Total Number of Common Shares Purchased ⁽ ¹ ⁾ Average Price Paid per Share Total Number of Preferred Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Share Repurchase Program October 1, 2023 - October 31, 2023 ​ 152 ​ $ 10.28 ​ — ​ $ — ​ 152 ​ $ 45,459 November 1, 2023 - November 30, 2023 ​ 186 ​ ​ 11.72 ​ — ​ ​ — ​ 185 ​ ​ 83,283 December 1, 2023 - December 31, 2023 ​ — ​ ​ — ​ — ​ ​ — ​ — ​ ​ 83,283 Total ​ 338 ​ $ 11.07 ​ — ​ $ — ​ 337 ​ ​ ​ ⁽¹⁾ The total number of shares purchased includes shares of our common stock transferred to us in order to satisfy tax withholding obligations incurred upon the vesting of restricted stock awards held by our employees. ​ Subsequent to December 31, 2023, we did not repurchase any shares of common or preferred stock. ​
Biggest changeAs of December 31, 2024, we had $55.8 million of availability under the program. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands except per share amounts) Total Number of Common Shares Purchased ⁽ ¹ ⁾ Average Price Paid per Share Total Number of Preferred Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Share Repurchase Program October 1, 2024 - October 31, 2024 ​ — ​ $ — ​ — ​ $ — ​ — ​ $ 83,283 November 1, 2024 - November 30, 2024 ​ 2,096 ​ ​ 12.32 ​ — ​ ​ — ​ 2,096 ​ ​ 57,404 December 1, 2024 - December 31, 2024 ​ 145 ​ ​ 11.32 ​ — ​ ​ — ​ 145 ​ ​ 55,752 Total ​ 2,241 ​ $ — ​ — ​ $ — ​ 2,241 ​ ​ ​ ⁽¹⁾ The total number of shares purchased includes shares of our common stock transferred to us in order to satisfy tax withholding obligations incurred upon the vesting of restricted stock awards held by our employees. ​ Subsequent to December 31, 2024, we repurchased an additional 63,023 shares of common stock at a weighted average price of $11.74 per share. ​
On 43 Table of Contents November 1, 2023, our Board of Directors approved a $40.0 million increase in the total authorization available under the program, increasing the total availability under the share repurchase program to approximately $85.0 million as of such date.
On November 1, 2023, our Board of Directors approved a $40.0 million increase in the total authorization 43 Table of Contents available under the program, increasing the total availability under the share repurchase program to approximately $85.0 million as of such date.
Our repurchase activity for the three months ended December 31, 2023 under the share repurchase program is presented in the following table.
Our repurchase activity for the three months ended December 31, 2024 under the share repurchase program is presented in the following table.
As of February 23, 2024, there were five holders of our Series A preferred units. ​ Issuer Purchases of Equity Securities ​ Share Repurchase Program ​ On March 15, 2017, our Board of Directors approved a program to repurchase up to $25.0 million in shares of our common stock.
As of February 14, 2025, there were five holders of our Series A preferred units. ​ Issuer Purchases of Equity Securities ​ Share Repurchase Program ​ On March 15, 2017, our Board of Directors approved a program to repurchase up to $25.0 million in shares of our common stock.
However, because many shares of our common stock are held by brokers and other institutions on behalf of stockholders, we believe there are substantially more beneficial holders of our common stock than record holders. As of February 23, 2024, there were approximately 11 holders (other than our Company) of our Common units.
However, because many shares of our common stock are held by brokers and other institutions on behalf of stockholders, we believe there are substantially more beneficial holders of our common stock than record holders. As of February 14, 2025, there were approximately 11 holders (other than our Company) of our Common units.
As a result, the gain (or loss) recognized on a sale of that common stock or upon our liquidation would be increased (or decreased) accordingly. ​ Stockholder Information ​ As of February 23, 2024, there were approximately 53 direct holders of record of our common stock.
As a result, the gain (or loss) recognized on a sale of that common stock or upon our liquidation would be increased (or decreased) accordingly. ​ Stockholder Information ​ As of February 14, 2025, there were approximately 44 direct holders of record of our common stock.
On August 1, 2018, our Board of Directors increased the authority under the share repurchase to $38.5 million. On November 7, 2019, the Board of Directors approved an additional $50 million under the share repurchase program.
On August 1, 2018, our Board of Directors increased the authority under the share repurchase to $38.5 million. On November 7, 2019, our Board of Directors approved an additional $50 million under the share repurchase program. On May 3, 2023, our Board of Directors approved a $75.0 million increase.
Our common stock began trading on the NYSE on September 8, 2015 and was previously traded on the NYSE MKT following our initial public offering on April 19, 2014. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Farmland Partners Inc. 100.00 153.84 203.17 283.83 301.19 313.12 S&P 500 Index 100.00 131.47 155.65 200.29 163.98 207.04 Dow Jones Equity All REIT Index 100.00 128.74 122.57 173.07 129.79 144.46 ​ Distribution Information ​ Since our initial quarter as a publicly traded REIT, we have made regular quarterly distributions to our stockholders.
Our common stock began trading on the NYSE on September 8, 2015 and was previously traded on the NYSE MKT following our initial public offering on April 19, 2014. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Farmland Partners Inc. 100.00 132.07 184.50 195.79 203.54 214.95 S&P 500 Index 100.00 118.39 152.34 124.73 157.48 196.85 Dow Jones Equity All REIT Index 100.00 95.21 134.44 100.82 112.21 117.66 ​ Distribution Information ​ Since our initial quarter as a publicly traded REIT, we have made regular quarterly distributions to our stockholders.
Removed
On May 3, 2023, our Board of Directors approved a $75.0 million increase resulting in total availability under the share repurchase program of approximately $88.0 million as of such date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIn addition, the Company redeemed 34,000 Common units in exchange for cash of approximately $0.4 million. ​ Consolidated Indebtedness ​ For further details relating to our consolidated indebtedness refer to “– Recent Developments – Financing Activity” and Note 7 – Mortgage Notes, Line of Credit and Bonds Payable included in the financial statement section of this Annual Report on Form 10-K. ​ 54 Table of Contents Sources and Uses of Cash and Cash Equivalents ​ The following table summarizes our cash flows for the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (in thousands) 2023 2022 Net cash and cash equivalents provided by operating activities ​ $ 12,887 ​ $ 17,051 Net cash and cash equivalents provided by (used in) investing activities ​ $ 158,461 ​ $ (60,398) Net cash and cash equivalents provided by (used in) financing activities ​ $ (173,513) ​ $ 20,830 ​ Comparison of the year ended December 31, 2023 to the year ended December 31, 2022 ​ As of December 31, 2023, we had $5.5 million of cash and cash equivalents compared to $7.7 million at December 31, 2022. ​ Cash Flows from Operating Activities ​ Net cash and cash equivalents provided by operating activities decreased by $4.2 million primarily as a result of the following: ​ ● Receipt of $39.8 million in fixed rents, $9.0 million in variable rent and $2.2 million in tenant reimbursements for the year ended December 31, 2023 as compared to the receipt of $35.8 million in fixed rents, $9.5 million in variable rents, and $2.2 million in tenant reimbursements for the year ended December 31, 2022; ● A change in depreciation, depletion and amortization of $7.5 million for the year ended December 31, 2023 compared to $7.0 million for the year ended December 31, 2022; ● (Gain) on disposition of assets, net during the year ended December 31, 2023 of $36.1 million as compared to $2.6 million during the year ended December 31, 2022; ● A change in accounts receivable of $0.9 million for the year ended December 31, 2023 compared to $(2.3) million for the year ended December 31, 2022; ● A change in accrued interest of $0.6 million for the year ended December 31, 2023 compared to $1.4 million for the year ended December 31, 2022; and ● A change in deferred revenue of $0.6 million for the year ended December 31, 2023 compared to $0.1 million for the year ended December 31, 2022. ​ Cash Flows from Investing Activities ​ Net cash and cash equivalents provided by (used in) investing activities increased by $218.9 million primarily as a result of the following: ​ ● Property acquisitions during the year ended December 31, 2023 of $22.2 million as compared to $54.4 million during the year ended December 31, 2022 ; ● Property dispositions during the year ended December 31, 2023 for cash consideration of $195.5 million as compared to $17.0 million during the year ended December 31, 2022 ; ● An increase of $1.6 million in real estate improvements during the year ended December 31, 2023 as compared to the year ended December 31, 2022; and ● Issuances of notes receivable under the FPI Loan Program and financing receivables of $11.8 million during the year ended December 31, 2023 as compared to $20.8 million during the year ended December 31, 2022. ​ 55 Table of Contents Cash Flows from Financing Activities ​ Net cash and cash equivalents provided by (used in) financing activities increased by $194.3 million primarily as a result of the following: ​ ● Borrowings from mortgage notes payable during the year ended December 31, 2023 of $79.5 million as compared to $223.0 million during the year ended December 31, 2022; ● Repayments on mortgage notes payable during the year ended December 31, 2023 of $155.9 million as compared to $296.9 million during the year ended December 31, 2022; ● Net proceeds from the ATM Program during the year ended December 31, 2023 of $0.0 million as compared to $121.3 million during the year ended December 31, 2022; ● Common stock repurchases during the year ended December 31, 2023 of $72.2 million as compared to $0.0 million during the year ended December 31, 2022; ● Redemption of Series A preferred units during the year ended December 31, 2023 of $8.1 million as compared to $10.2 million during the year ended December 31, 2022; and ● Dividends on common stock during the year ended December 31, 2023 of $12.3 million as compared to $11.1 million during the year ended December 31, 2022. ​ Non-GAAP Financial Measures ​ Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”) ​ We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or Nareit.
Biggest changeAs of December 31, 2024, we had authority to repurchase up to an aggregate of $55.8 million in additional shares of our common stock. ​ Consolidated Indebtedness ​ For further details relating to our consolidated indebtedness refer to “– Recent Developments – Financing Activity” and Note 7 – Mortgage Notes, Line of Credit and Bonds Payable included in the financial statement section of this Annual Report on Form 10-K. ​ Sources and Uses of Cash and Cash Equivalents ​ The following table summarizes our cash flows for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (in thousands) 2024 2023 Net cash and cash equivalents provided by operating activities ​ $ 16,142 ​ $ 12,887 Net cash and cash equivalents provided by investing activities ​ $ 268,754 ​ $ 158,461 Net cash and cash equivalents (used in) financing activities ​ $ (211,944) ​ $ (173,513) ​ Comparison of the year ended December 31, 2024 to the year ended December 31, 2023 ​ As of December 31, 2024, we had $78.4 million of cash and cash equivalents compared to $5.5 million at December 31, 2023. 54 Table of Contents ​ Cash Flows from Operating Activities ​ Net cash and cash equivalents provided by operating activities increased by $3.3 million primarily as a result of the following: ​ ● Receipt of $34.3 million in fixed rent, $10.1 million in variable rent and $5.1 million in tenant reimbursements for the year ended December 31, 2024 as compared to the receipt of $39.8 million in fixed rent, $9.0 million in variable rent, and $2.2 million in tenant reimbursements for the year ended December 31, 2023; ● A change in depreciation, depletion and amortization of $5.6 million for the year ended December 31, 2024 compared to $7.5 million for the year ended December 31, 2023; ● (Gain) loss on disposition of assets, net during the year ended December 31, 2024 of $54.1 million as compared to $36.1 million during the year ended December 31, 2023; ● Income from forfeited deposits during the year ended December 31, 2024 of $1.2 million as compared to $0.0 million during the year ended December 31, 2023; ● Losses on modification and extinguishment of debt during the year ended December 31, 2024 of $0.9 million as compared to $0.0 million during the year ended December 31, 2023; ● A change in accounts receivable of $2.9 million for the year ended December 31, 2024 compared to $0.9 million for the year ended December 31, 2023; ● A change in accrued interest of $(2.0) million for the year ended December 31, 2024 compared to $0.6 million for the year ended December 31, 2023; ● A change in accrued expenses of $(0.6) million for the year ended December 31, 2024 compared to $(1.5) million for the year ended December 31, 2023; and ● A change in deferred revenue of $(0.3) million for the year ended December 31, 2024 compared to $0.6 million for the year ended December 31, 2023. ​ Cash Flows from Investing Activities ​ Net cash and cash equivalents provided by investing activities increased by $110.3 million primarily as a result of the following: ​ ● Property acquisitions during the year ended December 31, 2024 of $17.9 million as compared to $22.2 million during the year ended December 31, 2023 ; ● Property dispositions during the year ended December 31, 2024 of $312.0 million as compared to $195.5 million during the year ended December 31, 2023 ; ● A decrease of $4.3 million in real estate improvements during the year ended December 31, 2024 as compared to the year ended December 31, 2023; ● Collections on notes receivable under the FPI Loan Program of $11.8 million during the year ended December 31, 2024 as compared to $2.7 million during the year ended December 31, 2023; and ● Issuances of notes receivable under the FPI Loan Program and financing receivables of $35.8 million during the year ended December 31, 2024 as compared to $11.8 million during the year ended December 31, 2023. ​ Cash Flows from Financing Activities ​ Net cash and cash equivalents (used in) financing activities increased by $38.4 million primarily as a result of the following: ​ ● Borrowings from mortgage notes payable during the year ended December 31, 2024 of $81.0 million as compared to $79.5 million during the year ended December 31, 2023; ● Repayments on mortgage notes payable during the year ended December 31, 2024 of $239.5 million as compared to $155.9 million during the year ended December 31, 2023; 55 Table of Contents ● Common stock repurchases during the year ended December 31, 2024 of $27.5 million as compared to $72.2 million during the year ended December 31, 2023; ● Redemption of Series A preferred units during the year ended December 31, 2024 of $0.0 million as compared to $8.1 million during the year ended December 31, 2023; and ● Dividends on common stock during the year ended December 31, 2024 of $21.6 million as compared to $12.3 million during the year ended December 31, 2023. ​ Non-GAAP Financial Measures ​ Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”) ​ We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or Nareit.
In addition, under the FPI Loan Program, we make loans to third-party farmers (both tenant and non-tenant) to provide financing for property acquisitions, working capital requirements, operational farming activities, farming infrastructure projects and for other farming and agricultural real estate related projects. ​ FPI was incorporated in Maryland on September 27, 2013, and is the sole member of the sole general partner of the Operating Partnership, which is a Delaware limited partnership that was formed on September 27, 2013.
In addition, under the FPI Loan Program, we make loans to third-party farmers (both tenant and non-tenant) and landowners to provide financing for property acquisitions, working capital requirements, operational farming activities, farming infrastructure projects and for other farming, agricultural and other real estate related projects. ​ FPI was incorporated in Maryland on September 27, 2013, and is the sole member of the sole general partner of the Operating Partnership, which is a Delaware limited partnership that was formed on September 27, 2013.
Nareit defines FFO as net income (loss) (calculated in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, real estate related depreciation, depletion and amortization (excluding amortization of deferred financing costs), impairment write-downs of depreciated property, and adjustments for unconsolidated partnerships and joint ventures. FFO is a supplemental non-GAAP financial measure.
Nareit defines FFO as net income (loss) (calculated in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, real estate related depreciation, depletion and amortization (excluding amortization of deferred financing costs), impairment write-downs of depreciated property, and adjustments associated with impairment write-downs for unconsolidated partnerships and joint ventures. FFO is a supplemental non-GAAP financial measure.
While the pace of appreciation and transaction volume slowed in 2023, these metrics remain strong relative to long-term trends. ​ We believe quality farmland in the United States has a near-zero vacancy rate as a result of the supply and demand fundamentals discussed above.
While the pace of appreciation and transaction volume slowed in 2023 and 2024, these metrics remain strong relative to long-term trends. ​ We believe quality farmland in the United States has a near-zero vacancy rate as a result of the supply and demand fundamentals discussed above.
Intangible assets with indefinite lives is not amortized, but rather tested for impairment annually in the fourth quarter and when events or changes in circumstances indicate that the fair value of the asset is below its carrying value.
Intangible assets with indefinite lives are not amortized, but rather tested for impairment annually in the fourth quarter and when events or changes in circumstances indicate that the fair value of the asset is below its carrying value.
There was $5.8 million and $0.0 million of impairment recognized on real estate assets in the accompanying financial statements during the years ended December 31, 2023 and 2022, respectively. ​ Impairment of Goodwill and Intangible Assets with Indefinite Lives ​ Goodwill is not amortized, but rather tested for impairment annually in the fourth quarter and when events or changes in circumstances indicate that the fair value of a reporting unit with goodwill has been reduced below its carrying value.
There was $0.2 million and $5.8 million of impairment recognized on real estate assets in the accompanying financial statements during the years ended December 31, 2024 and 2023, respectively. ​ Impairment of Goodwill and Intangible Assets with Indefinite Lives ​ Goodwill is not amortized, but rather tested for impairment annually in the fourth quarter and when events or changes in circumstances indicate that the fair value of a reporting unit with goodwill has been reduced below its carrying value.
Although farmland prices may show a decline from time to time, we believe that any reduction in U.S. farmland values overall is likely to be short-lived as global demand for food and agricultural commodities typically exceeds global supply and quality farmland becomes scarcer. ​ Food Demand ​ We expect that global demand for food, driven primarily by significant increases in the gross domestic product (“GDP”) per capita and global population, will continue to be the key driver of farmland values.
Although farmland prices may show a decline from time to time, we believe that any reduction in U.S. farmland values overall is likely to be short-lived as global demand for food and agricultural commodities typically exceeds global supply and quality farmland becomes scarcer. 46 Table of Contents ​ Food Demand ​ We expect that global demand for food, driven primarily by significant increases in the gross domestic product (“GDP”) per capita and global population, will continue to be the key driver of farmland values.
Acquisition (including audit fees associated with these acquisitions) and due diligence costs are incurred for investment purposes and, therefore, do not correlate with the ongoing operations of our portfolio. The Company incurred an immaterial amount of acquisition and due diligence costs during the years ended December 31, 2023 and 2022.
Acquisition (including audit fees associated with these acquisitions) and due diligence costs are incurred for investment purposes and, therefore, do not correlate with the ongoing operations of our portfolio. The Company incurred an immaterial amount of acquisition and due diligence costs during the years ended December 31, 2024 and 2023.
We generally see firm demand for high quality properties across all regions and crop types. ​ Farmland values are typically very stable, often showing modest increases even in years of commodity price weakness. We expect this trend to continue, with modest but consistent annual increases that compound into significant appreciation 47 Table of Contents in the long term.
We generally see firm demand for high quality properties across all regions and crop types. ​ Farmland values are typically very stable, often showing modest increases even in years of commodity price weakness. We expect this trend to continue, with modest but consistent annual increases that compound into significant appreciation in the long term.
We may utilize various sources, including third-party appraisals, our own analysis of recently acquired or developed properties and existing comparable properties in our portfolio, other market data and property specific characteristics such as soil types, water availability and the existence of leases acquired with 50 Table of Contents the acquisition.
We may utilize various sources, including third-party appraisals, our own analysis of recently acquired or developed properties and existing comparable properties in our portfolio, other market data and property specific characteristics such as soil types, water availability and the existence of leases acquired with the acquisition.
The highly seasonal nature of the agriculture industry causes seasonality in our business to some extent. Our financial performance should be evaluated on an annual basis, which eliminates impacts of seasonality and other similar factors that may cause our quarterly results to vary during the course of the year. ​ 59 Table of Contents
The highly seasonal nature of the agriculture industry causes seasonality in our business to some extent. Our financial performance should be evaluated on an annual basis, which eliminates impacts of seasonality and other similar factors that may cause our quarterly results to vary during the course of the year. ​
See “Note 9—Stockholders’ Equity and Non-controlling Interests” within the notes to the consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding the non-controlling interests. ​ FPI has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its short taxable year ended December 31, 2014. ​ Recent Developments ​ 2023 Dispositions ​ During 2023, we completed dispositions consisting of 74 properties in the Corn Belt, Delta and South, High Plains, Southeast and West Coast regions.
See “Note 9—Stockholders’ Equity and Non-controlling Interests” within the notes to the consolidated financial statements included in this Annual Report on Form 10-K for additional information regarding the non-controlling interests. ​ FPI has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its short taxable year ended December 31, 2014. ​ Recent Developments ​ 2024 Dispositions ​ During 2024, we completed dispositions consisting of 54 properties in the Corn Belt, Delta and South, High Plains and Southeast regions.
We believe that due to the relatively high fixed costs associated with farming operations (including equipment, labor and knowledge), many farm operators choose to rent additional acres of farmland when it becomes available in order to allocate their fixed costs over additional acres.
We believe that due to the relatively high fixed costs associated with farming operations (including equipment, labor and knowledge), many farm operators choose to rent additional acres of farmland when it 47 Table of Contents becomes available in order to allocate their fixed costs over additional acres.
Notwithstanding GAAP accounting requirements to spread rental revenue over the lease term, a significant portion of fixed rent is received in a lump sum before planting season, in the first quarter, and after harvest, in the fourth quarter.
Notwithstanding GAAP accounting requirements to spread rental revenue over the lease term, a significant portion of fixed rent is received in a lump sum before planting season, in the first quarter, and after 59 Table of Contents harvest, in the fourth quarter.
Therefore, in addition to EBITDAre, management uses Adjusted EBITDAre, a non-GAAP measure. ​ 58 Table of Contents We further adjust EBITDAre for certain additional items such as stock-based compensation and incentive, indirect offering costs, real estate acquisition related audit fees and real estate related acquisition and due diligence costs (for a full discussion of these adjustments, see AFFO adjustments discussed above) that we consider necessary to understand our operating performance.
Therefore, in addition to EBITDAre, management uses Adjusted EBITDAre, a non-GAAP measure. ​ We further adjust EBITDAre for certain additional items such as stock-based compensation and incentive, indirect offering costs, real estate acquisition related audit fees and real estate related acquisition and due diligence costs and severance expense (for a full discussion of these adjustments, see AFFO adjustments discussed above) that we consider necessary to understand our operating performance.
However, our business model anticipates that over time the value of our farmland will increase, as it has in the past, at a rate that is equal to or greater than the rate of inflation, which may in part offset the impact of rising interest rates on the value of our farmland, but there can be no guarantee that this appreciation will occur to the extent that we anticipate or at all. ​ International Trade ​ After a 33% decrease in exports of corn for the 2022/2023 marketing year (September 2022 to August 2023), the USDA estimates corn exports will be up 26% for the 2023/2024 marketing year (September 2023 to August 2024).
However, our business model anticipates that over time the value of our farmland will increase, as it has in the past, at a rate that is equal to or greater than the rate of inflation, which may in part offset the impact of rising interest rates on the value of our farmland, but there can be no guarantee that this appreciation will occur to the extent that we anticipate or at all. ​ International Trade ​ After a 37% increase in exports of corn for the 2023/2024 marketing year (September 2023 to August 2024), the USDA estimates corn exports will increase for the 2024/2025 marketing year (September 2024 to August 2025).
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.
However, while EBITDAre is a performance measure widely used across the Company’s industry, the Company does not believe that it correctly captures the 58 Table of Contents 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.
The allocations of purchase price are sensitive and involve a degree of uncertainty due to the nature of the inputs and judgements, as well as the number, magnitude and complexity of these inputs and judgements made by management.
The allocations of purchase price are sensitive and involve a degree of uncertainty due to the nature of the 50 Table of Contents inputs and judgements, as well as the number, magnitude and complexity of these inputs and judgements made by management.
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 56 Table of Contents how our operating performance could be allocated to potential shares outstanding at a specific point in time.
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 our operating performance could be allocated to potential shares outstanding at a specific point in time.
All of FPI’s assets are held by, and its operations are primarily conducted through, the Operating Partnership and its wholly owned subsidiaries. As of December 31, 2023, FPI owned 97.6% of the Common units and none of the Series A preferred units.
All of FPI’s assets are held by, and its operations are primarily conducted through, the Operating Partnership and its wholly owned subsidiaries. As of December 31, 2024, FPI owned 97.5% of the Common units and none of the Series A preferred units.
We are currently in an 46 Table of Contents environment of appreciating land values, driven by, among other things, inflation, strong commodity prices (further exacerbated by the war in Ukraine) and an outlook for high levels of farmer profitability. Sustained high interest rates can serve as a counter-balancing external factor to this favorable environment.
We are currently in an environment of appreciating land values, driven by, among other things, inflation, strong commodity prices and an outlook for high levels of farmer profitability. Sustained high interest rates can serve as a counter-balancing external factor to this favorable environment.
However, we believe that growth in GDP per capita and global population will be more significant drivers of global demand for primary crops over the long term. ​ Despite advances in income, according to “The State of Food Security and Nutrition in the World 2023,” a report by the UN FAO, 2.4 billion people were facing moderate to severe food insecurity in 2022.
However, we believe that growth in GDP per capita and global population will be more significant drivers of global demand for primary crops over the long term. ​ Despite advances in income, according to “The State of Food Security and Nutrition in the World 2024,” a report by the United Nations Food and Agriculture Organization, 2.33 billion people were facing moderate to severe food insecurity in 2023.
In addition, a sustained material increase in interest rates may cause farmland prices to decline if the rise in real interest rates (nominal interest rates minus the inflation rate) is not accompanied by rises in the general levels of inflation.
In addition, if interest rates begin to rise again, farmland prices may decline if the rise in real interest rates (nominal interest rates minus the inflation rate) is not accompanied by rises in the general levels of inflation.
Exports to China for fiscal year 2024 are forecast to decrease to $30 billion, while exports to Mexico and Canada are expected to decrease slightly to $27.9 billion and $27.7 billion, respectively. ​ Critical Accounting Policies and Estimates ​ The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period.
Exports to Mexico are expected to decrease slightly to $29.9 billion, while exports to Canada are expected to increase slightly to $29.2 billion. ​ Critical Accounting Policies and Estimates ​ The preparation of financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period.
This increase in rates has significantly increased the cost of our floating rate debt and has also significantly increased the cost of certain of our MetLife debt with interest rates that have been reset since the beginning of 2022.
This increase in rates has significantly increased the cost of our floating rate debt and has also significantly increased the cost of certain of our MetLife debt with interest rates that have been reset since the beginning of 2022. However, we have recently repaid most of our floating rate debt with the proceeds from dispositions.
As a result, we believe that the effect on us of inflationary increases in operating expenses are borne largely by our tenants under the terms of their leases. We believe that inflationary increases in farmer profitability will continue to impact lease renegotiations upon renewals, as we have seen in the most recent renewal cycle in late 2023.
As a result, we believe that the effect on us of inflationary increases in operating expenses are borne largely by our tenants under the terms of their leases, and inflationary increases in farmer profitability generally lead to increased rents upon lease renewals, as we experienced in the most recent renewal cycle in late 2023.
In addition, the Company redeemed 34,000 Common units in exchange for cash of approximately $0.4 million. ​ 45 Table of Contents Deleveraging and Maintained Liquidity Position ​ During the year ended December 31, 2023, we reduced our overall indebtedness by $76.4 million, largely with proceeds from the asset dispositions described above, resulting in an increase in liquidity. ​ As of December 31, 2023, we had access to liquidity of $206.6 million, consisting of $5.5 million in cash and $201.1 million in undrawn availability under our credit facilities with Federal Agricultural Mortgage Corporation and its wholly owned subsidiary, Farmer Mac Mortgage Securities Corporation (collectively, “Farmer Mac”), Metropolitan Life Insurance Company (“MetLife”), and Rutledge Investment Company (“Rutledge”) compared to cash of $7.7 million and $169.0 million in undrawn availability under our credit facilities as of December 31, 2022.
As of December 31, 2024, we had approximately $55.8 million of capacity remaining under the stock repurchase plan. 45 Table of Contents ​ Deleveraging and Maintaining Liquidity Position ​ During the year ended December 31, 2024, we reduced our overall indebtedness by $158.5 million, largely with proceeds from the asset dispositions described above, resulting in an increase in liquidity. ​ As of December 31, 2024, we had access to liquidity of $245.8 million, consisting of $78.4 million in cash and $167.4 million in undrawn availability under our credit facilities with Federal Agricultural Mortgage Corporation and its wholly owned subsidiary, Farmer Mac Mortgage Securities Corporation (collectively, “Farmer Mac”), Metropolitan Life Insurance Company (“MetLife”), and Rutledge Investment Company (“Rutledge”) compared to cash of $5.5 million and $201.1 million in undrawn availability under our credit facilities as of December 31, 2023.
In addition, as of December 31, 2023, we owned land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand and served as property manager for approximately 38,300 acres, including farms in Iowa.
In addition, as of December 31, 2024, we owned land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand and served as property manager for approximately 48,300 acres of farmland, including farms in Colorado, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, North Carolina, Ohio and South Carolina.
We compensate for these limitations by relying primarily on our GAAP results of operations and using EBITDAre and Adjusted EBITDAre only as a supplemental measure of our performance. ​ The following table sets forth a reconciliation of our net income to our EBITDAre and Adjusted EBITDAre for the periods indicated below (unaudited): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (in thousands) 2023 2022 Net income ​ $ 31,681 ​ $ 11,960 Interest expense ​ ​ 22,657 ​ 16,143 Income tax (benefit) expense ​ ​ (166) ​ 227 Depreciation, depletion and amortization ​ ​ 7,499 ​ 6,960 Impairment of assets ​ ​ 5,840 ​ — (Gain) on disposition of assets, net ​ ​ (36,133) ​ ​ (2,641) EBITDAre ​ $ 31,378 ​ $ 32,649 ​ ​ ​ ​ ​ ​ ​ Stock-based compensation and incentive ​ ​ 2,008 ​ ​ 1,999 Real estate related acquisition and due diligence costs ​ ​ 17 ​ ​ 111 Adjusted EBITDAre ​ $ 33,403 ​ $ 34,759 ​ Seasonality ​ We recognize rental revenue from fixed-rate farmland leases on a pro rata basis over the non-cancellable term of the lease in accordance with accounting principles generally accepted in the United States (“GAAP”).
We compensate for these limitations by relying primarily on our GAAP results of operations and using EBITDAre and Adjusted EBITDAre only as a supplemental measure of our performance. ​ The following table sets forth a reconciliation of our net income to our EBITDAre and Adjusted EBITDAre for the periods indicated below (unaudited): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (in thousands) 2024 2023 Net income ​ $ 61,450 ​ $ 31,681 Interest expense ​ ​ 18,854 ​ 22,657 Income tax benefit ​ ​ (16) ​ (166) Depreciation, depletion and amortization ​ ​ 5,588 ​ 7,499 Impairment of assets ​ ​ 790 ​ 5,840 (Gain) on disposition of assets, net ​ ​ (54,148) ​ ​ (36,133) EBITDAre (1) ​ $ 32,518 ​ $ 31,378 ​ ​ ​ ​ ​ ​ ​ Stock-based compensation and incentive ​ ​ 1,963 ​ ​ 2,008 Real estate related acquisition and due diligence costs ​ ​ 28 ​ ​ 17 Severance expense ​ ​ 1,373 ​ ​ — Adjusted EBITDAre (1) ​ $ 35,882 ​ $ 33,403 (1) The year ended December 31, 2024 includes approximately $1.2 million of income from forfeited deposits due to the termination of a repurchase agreement . ​ Seasonality ​ We recognize rental revenue from fixed-rate farmland leases on a pro rata basis over the non-cancellable term of the lease in accordance with GAAP.
Changes in government regulations and policy, fluctuations in global prosperity, fluctuations in foreign trade and export markets and eruptions of military conflicts, such as the war in Ukraine, or civil unrest also impact crop prices. ​ Interest Rates ​ The Federal Reserve has engaged in a series of significant increases in the discount rate, which is the rate the Federal Reserve charges member banks for overnight funds.
Changes in government regulations and policy, fluctuations in global prosperity, fluctuations in foreign trade and export markets and eruptions of military conflicts, such as the war in Ukraine and the ongoing conflicts in the Middle East, or civil unrest also impact crop prices. ​ Interest Rates ​ The Federal Reserve engaged in a series of significant increases in the federal funds rate between March 2022 and July 2023.
Ukraine and the Russian Federation represent large portions of global trade in a variety of agricultural products (e.g., 34% of global wheat exports, according to the International Food Policy Research Institute).
Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”. ​ Impact of the War in Ukraine ​ Ukraine and the Russian Federation represent large portions of global trade in a variety of agricultural products (e.g., 34% of global wheat exports, according to the International Food Policy Research Institute).
After a 7% decrease in exports of soybeans for the 2022/2023 marketing year, the USDA estimates soybean exports will be down 12% for the 2023/2024 marketing year, due to lower production. ​ According to the USDA Outlook for Agricultural Trade, the top three export countries from the United States are China, Mexico, and Canada.
After a 14% decrease in exports of soybeans for the 2023/2024 marketing year, the USDA estimates soybean exports will increase 8% for the 2024/2025 marketing year, due to less competition from South American production. ​ According to the USDA Outlook for Agricultural Trade, the top three export countries from the United States were China, Mexico, and Canada.
As of December 31, 2023, we owned farms with an aggregate of approximately 132,800 acres in Arkansas, California, Colorado, Florida, Illinois, Indiana, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina and Texas.
As of December 31, 2024, we owned farms with an aggregate of approximately 93,500 acres in Arkansas, California, Colorado, Illinois, Indiana, Kansas, Louisiana, Missouri, Nebraska, South Carolina, Texas and West Virginia.
As of December 31, 2023, approximately 70% of our portfolio (by value) was used to grow primary crops, such as corn, soybeans, wheat, rice and cotton, and approximately 30% was used to produce specialty crops, such as almonds, citrus, blueberries, and vegetables.
As of December 31, 2024, approximately 60% of our portfolio (by value) was used to grow primary crops, such as corn, soybeans, wheat, rice and cotton, and approximately 40% was used to produce specialty crops, such as almonds, pistachios, citrus, avocados, strawberries, and edible beans.
Crop yield trends in corn and soybeans have been steadily increasing over the last thirty years. After yields for the 2022/2023 marketing year (September 2022 to August 2023) decreased slightly for both corn and soybeans compared to the previous year, the U.S. Department of Agriculture projects yields to increase slightly for the 2023/2024 marketing year (September 2023 to August 2024).
Crop yield trends in corn and soybeans have been steadily increasing over the last thirty years. After yields for the 2023/2024 marketing year (September 2023 to August 2024) increased slightly for both corn and soybeans compared to the previous year, the USDA projects that yields will not change significantly for the 2024/2025 marketing year (September 2024 to August 2025).
The conversion of Series A preferred units is excluded from the calculation of common shares fully diluted as they are not participating securities, and therefore do not share in the performance of the Company and their impact on shares outstanding is uncertain. ​ 57 Table of Contents The following table sets forth a reconciliation of net income (loss) to FFO, AFFO and net income (loss) available to common stockholders per share to AFFO per share, fully diluted, the most directly comparable GAAP equivalents, respectively, for the periods indicated below (unaudited): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (in thousands except per share amounts) 2023 2022 Net income ​ $ 31,681 ​ $ 11,960 (Gain) on disposition of assets, net ​ ​ (36,133) ​ ​ (2,641) Depreciation, depletion and amortization ​ 7,499 ​ ​ 6,960 Impairment of assets ​ 5,840 ​ ​ — FFO ​ $ 8,887 ​ $ 16,279 ​ ​ ​ ​ ​ ​ ​ Stock-based compensation and incentive ​ 2,008 ​ ​ 1,999 Deferred impact of interest rate swap terminations ​ ​ 198 582 Real estate related acquisition and due diligence costs ​ ​ 17 ​ ​ 111 Distributions on Preferred units and stock ​ ​ (2,970) ​ ​ (3,210) AFFO ​ $ 8,140 ​ $ 15,761 ​ ​ ​ ​ ​ ​ ​ AFFO per diluted weighted average share data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AFFO weighted average common shares ​ 51,810 ​ 52,531 ​ ​ ​ ​ ​ ​ ​ Net income available to common stockholders of Farmland Partners Inc. ​ $ 0.55 ​ $ 0.16 Income available to redeemable non-controlling interest and non-controlling interest in operating partnership ​ ​ 0.08 0.08 Depreciation, depletion and amortization ​ 0.14 ​ 0.13 Impairment of assets ​ 0.11 ​ 0.00 Stock-based compensation and incentive ​ 0.04 ​ 0.04 (Gain) on disposition of assets, net ​ ​ (0.70) ​ ​ (0.05) Distributions on Preferred units and stock ​ (0.06) ​ ​ (0.06) AFFO per diluted weighted average share ​ $ 0.16 ​ $ 0.30 ​ The following table sets forth a reconciliation of AFFO share information to basic weighted average common shares outstanding, the most directly comparable GAAP equivalent, for the periods indicated below (unaudited): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (in thousands) ​ 2023 ​ 2022 Basic weighted average shares outstanding ​ 50,243 50,953 Weighted average OP units on an as-if converted basis ​ 1,220 1,292 Weighted average unvested restricted stock ​ 347 286 AFFO weighted average common shares ​ 51,810 52,531 ​ 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.
We believe that excluding these costs from AFFO improves the comparability of our results over each reporting period. ​ ​ 57 Table of Contents The following table sets forth a reconciliation of net income (loss) to FFO, AFFO and net income (loss) available to common stockholders per share to AFFO per share, fully diluted, the most directly comparable GAAP equivalents, respectively, for the periods indicated below (unaudited): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (in thousands except per share amounts) 2024 2023 Net income ​ $ 61,450 ​ $ 31,681 (Gain) on disposition of assets, net ​ ​ (54,148) ​ ​ (36,133) Depreciation, depletion and amortization ​ 5,588 ​ ​ 7,499 Impairment of assets ​ 790 ​ ​ 5,840 FFO (1) ​ $ 13,680 ​ $ 8,887 ​ ​ ​ ​ ​ ​ ​ Stock-based compensation and incentive ​ 1,963 ​ ​ 2,008 Deferred impact of interest rate swap terminations ​ ​ — 198 Real estate related acquisition and due diligence costs ​ ​ 28 ​ ​ 17 Distributions on Preferred units and stock ​ ​ (2,970) ​ ​ (2,970) Severance expense ​ ​ 1,373 ​ ​ — AFFO (1) ​ $ 14,074 ​ $ 8,140 ​ ​ ​ ​ ​ ​ ​ AFFO per diluted weighted average share data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ AFFO weighted average common shares ​ 49,127 ​ 51,810 ​ ​ ​ ​ ​ ​ ​ Net income available to common stockholders of Farmland Partners Inc. ​ $ 1.19 ​ $ 0.55 Income available to redeemable non-controlling interest and non-controlling interest in operating partnership ​ ​ 0.07 0.08 Depreciation, depletion and amortization ​ 0.11 ​ 0.14 Impairment of assets ​ 0.02 ​ 0.11 Stock-based compensation and incentive ​ 0.04 ​ 0.04 (Gain) on disposition of assets, net ​ ​ (1.10) ​ ​ (0.70) Distributions on Preferred units and stock ​ (0.07) ​ ​ (0.06) Severance expense ​ ​ 0.03 ​ ​ 0.00 AFFO per diluted weighted average share (1) ​ $ 0.29 ​ $ 0.16 (1) The year ended December 31, 2024 includes approximately $1.2 million of income from forfeited deposits due to the termination of a repurchase agreement . ​ The following table sets forth a reconciliation of AFFO share information to basic weighted average common shares outstanding, the most directly comparable GAAP equivalent, for the periods indicated below (unaudited): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, (in thousands) ​ 2024 ​ 2023 Basic weighted average shares outstanding ​ 47,546 50,243 Weighted average OP units on an as-if-converted basis ​ 1,203 1,220 Weighted average time-based unvested restricted stock ​ 346 347 Weighted average performance-based unvested restricted stock ​ ​ 32 — AFFO weighted average common shares ​ 49,127 51,810 ​ 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.
During the year ended December 31, 2023, we sold no shares under the ATM Program and had $50.5 million in shares of common stock available for issuance under the ATM Program. ​ Our ability to incur additional debt will depend on a number of factors, including our degree of leverage, the value of our unencumbered assets, compliance with the covenants under our existing debt agreements, borrowing restrictions that may be imposed by lenders and the conditions of debt markets. ​ When material debt repayments are due within the following 12 months, we work with current and new lenders and other potential sources of capital sufficiently in advance of the debt maturity to ensure that all of our obligations are satisfied in a timely manner.
The Company also has an effective shelf-registration statement that it may use to issue equity or debt securities to raise capital from time to time. ​ Our ability to incur additional debt will depend on a number of factors, including our degree of leverage, the value of our unencumbered assets, compliance with the covenants under our existing debt agreements, borrowing restrictions that may be imposed by lenders and the conditions of debt markets. ​ When material debt repayments are due within the following 12 months, we work with current and new lenders and other potential sources of capital sufficiently in advance of the debt maturity to ensure that all of our obligations are satisfied in a timely manner.
The Federal Reserve may continue this policy of maintaining elevated rates, which would further increase interest expense for many businesses, including the Company. ​ Factors That May Influence Future Results of Operations and Farmland Values ​ The principal factors affecting our operating results and the value of our farmland include long-term global demand for food relative to the global supply of food; farmland fundamentals and economic conditions in the markets in which we own farmland; and our ability to increase or maintain rental revenues while controlling expenses.
However, interest rates remain high, and the Federal Reserve has most recently signaled that it will not be making rate cuts over the next several quarters. ​ Factors That May Influence Future Results of Operations and Farmland Values ​ The principal factors affecting our operating results and the value of our farmland include long-term global demand for food relative to the global supply of food; farmland fundamentals and economic conditions in the markets in which we own farmland; and our ability to increase or maintain rental revenues while controlling expenses.
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 a measure of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make distributions.
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 a measure of our liquidity, nor are they indicative of funds available to fund our cash needs, including our ability to make distributions. 56 Table of Contents AFFO is calculated by adjusting FFO to exclude or include the income and expenses that we believe are not reflective of the sustainability of our ongoing operating performance, as further explained below: ​ ● Real estate related acquisition and due diligence costs.
This increase was driven by non-recurring adjustments in the second and third quarters of 2023 and more depreciable assets placed into service, partially offset by asset dispositions and more assets becoming fully depreciated. ​ Property operating expenses increased $0.5 million, or 5.7%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, resulting from higher tax, insurance, and cost sharing on a West Coast farm, partially offset by lower utilities expense. ​ Cost of goods sold decreased $1.2 million, or 20.3%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
This decrease was a result of asset dispositions in 2023 and 2024 and more assets becoming fully depreciated, partially offset by depreciable assets being placed into service. ​ Property operating expenses decreased $1.3 million, or 14.9%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, resulting from lower tax and insurance expense primarily due to dispositions that occurred in 2023 and 2024. ​ Cost of goods sold decreased $0.8 million, or 17.2%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
We can provide no assurances as to whether this anticipated increase in profitability will have an impact on rental rates in the regions in which we operate. ​ Inflation and Interest Rates ​ Most of our farming leases have lease terms of three years for row crops and up to seven years for permanent crops, pursuant to which each tenant is responsible for substantially all of the operating expenses related to the property, including maintenance, water usage and insurance.
United States farmers, including our tenants, however, generally source fertilizers from the United States and Canada. ​ Inflation and Interest Rates ​ Most of our farming leases have lease terms of three years for row crops and up to seven years for permanent crops, pursuant to which each tenant is responsible for substantially all of the operating expenses related to the property, including maintenance, water usage and insurance.
We expect to meet our liquidity needs through cash on hand, undrawn availability under our lines of credit ($201.1 million in availability as of December 31, 2023), operating cash flows, borrowings, proceeds from equity issuances and selective asset dispositions where such dispositions are deemed to be in the best interests of the Company. ​ On May 6, 2022, we entered into equity distribution agreements under which we may issue and sell from time to time, through sales agents, shares of our common stock having an aggregate gross sales price of up to $100.0 million (the “ATM Program”).
We expect to meet our liquidity needs through cash on hand, undrawn availability under our lines of credit ($167.4 million in availability as of December 31, 2024), operating cash flows, borrowings, proceeds from equity issuances and selective asset dispositions where such dispositions are deemed to be in the best interests of the Company.
Furthermore, high levels of inflation have prompted the Board of Governors of the Federal Reserve to increase the Federal Reserve’s discount rate, which has led to a significant increase in market short- and long-term interest rates since the beginning of 2022.
Furthermore, high levels of inflation prompted the Federal Reserve to increase the federal funds rate (the rate the Federal Reserve charges member banks for overnight funds) eleven times between March 2022 and July 2023, which led to a significant increase in market short- and long-term interest rates beginning in early 2022.
Year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. ​ 51 Table of Contents Comparison of the year ended December 31, 2023 to the year ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ ​ ​ ​ ($ in thousands) 2023 2022 $ Change % Change ​ OPERATING REVENUES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rental income ​ $ 49,185 ​ $ 48,879 ​ $ 306 0.6 % Crop sales ​ ​ 2,257 ​ ​ 5,372 ​ ​ (3,115) ​ (58.0) % Other revenue ​ 6,024 ​ 6,959 ​ (935) (13.4) % Total operating revenues ​ 57,466 ​ 61,210 ​ (3,744) (6.1) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATING EXPENSES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation, depletion and amortization ​ 7,499 ​ 6,960 ​ 539 7.7 % Property operating expenses ​ 8,660 ​ 8,190 ​ 470 5.7 % Cost of goods sold ​ ​ 4,754 ​ ​ 5,966 ​ ​ (1,212) ​ (20.3) % Acquisition and due diligence costs ​ 17 ​ 111 ​ (94) (84.7) % General and administrative expenses ​ 11,274 ​ 12,005 ​ (731) (6.1) % Legal and accounting ​ 1,279 ​ 2,874 ​ (1,595) (55.5) % Impairment of assets ​ 5,840 ​ — ​ 5,840 NM ​ Other operating expenses ​ ​ 144 ​ ​ 130 ​ ​ 14 ​ 10.8 % Total operating expenses ​ 39,467 ​ 36,236 ​ 3,231 8.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OTHER (INCOME) EXPENSE: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other (income) ​ ​ (39) ​ ​ (663) ​ ​ 624 ​ (94.1) % (Income) from equity method investment ​ ​ (1) ​ ​ (52) ​ ​ 51 ​ (98.1) % (Gain) on disposition of assets, net ​ ​ (36,133) ​ ​ (2,641) ​ ​ (33,492) ​ NM ​ Interest expense ​ 22,657 ​ 16,143 ​ 6,514 40.4 % Total other expense ​ (13,516) ​ 12,787 ​ (26,303) NM ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income before income tax (benefit) expense ​ ​ 31,515 ​ ​ 12,187 ​ ​ 19,328 ​ 158.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax (benefit) expense ​ ​ (166) ​ ​ 227 ​ ​ (393) ​ NM ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INCOME ​ $ 31,681 ​ $ 11,960 ​ $ 19,721 164.9 % NM = Not Meaningful ​ Our net income for the year ended December 31, 2023 was affected partially by acquisitions and dispositions that occurred since December 31, 2022, as well as lower crop sales, cost of goods sold, auction and brokerage revenue, legal and accounting expense, higher interest expense and the impairment of certain properties. ​ Rental income increased $0.3 million, or 0.6%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, resulting primarily from increased fixed farm rent, solar rent and revenue recognized from tenant reimbursements, partially offset by lower variable rent. ​ Crop sales decreased $3.1 million, or 58.0%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. ​ 51 Table of Contents Comparison of the year ended December 31, 2024 to the year ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ ​ ​ ​ ($ in thousands) 2024 2023 $ Change % Change ​ OPERATING REVENUES: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rental income ​ $ 47,119 ​ $ 49,185 ​ $ (2,066) (4.2) % Crop sales ​ ​ 5,027 ​ ​ 2,257 ​ ​ 2,770 ​ 122.7 % Other revenue ​ 6,080 ​ 6,024 ​ 56 0.9 % Total operating revenues ​ 58,226 ​ 57,466 ​ 760 1.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OPERATING EXPENSES ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Depreciation, depletion and amortization ​ 5,588 ​ 7,499 ​ (1,911) (25.5) % Property operating expenses ​ 7,368 ​ 8,660 ​ (1,292) (14.9) % Cost of goods sold ​ ​ 3,937 ​ ​ 4,754 ​ ​ (817) ​ (17.2) % Acquisition and due diligence costs ​ 28 ​ 17 ​ 11 64.7 % General and administrative expenses ​ 14,071 ​ 11,274 ​ 2,797 24.8 % Legal and accounting ​ 1,654 ​ 1,279 ​ 375 29.3 % Impairment of assets ​ 790 ​ 5,840 ​ (5,050) (86.5) % Other operating expenses ​ ​ 103 ​ ​ 144 ​ ​ (41) ​ (28.5) % Total operating expenses ​ 33,539 ​ 39,467 ​ (5,928) (15.0) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OTHER (INCOME) EXPENSE: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other (income) ​ ​ (123) ​ ​ (39) ​ ​ (84) ​ 215.4 % (Income) from equity method investment ​ ​ (125) ​ ​ (1) ​ ​ (124) ​ NM ​ (Gain) on disposition of assets, net ​ ​ (54,148) ​ ​ (36,133) ​ ​ (18,015) ​ 49.9 % (Income) from forfeited deposits ​ ​ (1,205) ​ ​ — ​ ​ (1,205) ​ NM ​ Interest expense ​ 18,854 ​ 22,657 ​ (3,803) (16.8) % Total other (income) ​ (36,747) ​ (13,516) ​ (23,231) 171.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income before income tax benefit ​ ​ 61,434 ​ ​ 31,515 ​ ​ 29,919 ​ 94.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income tax benefit ​ ​ (16) ​ ​ (166) ​ ​ 150 ​ (90.4) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INCOME ​ $ 61,450 ​ $ 31,681 ​ $ 29,769 94.0 % NM = Not Meaningful ​ Our net income for the year ended December 31, 2024 was primarily affected by dispositions that occurred in 2023 and 2024, as well as higher crop sales, income from forfeited deposits, lower interest expense and lower cost of goods sold, partially offset by severance expense of $1.4 million and $2.3 million of special bonuses.
Assessing the fair value of the asset involves a high degree of subjectivity regarding the significant assumptions including future cash flow and the discount rate.
Assessing the fair value of the asset involves a high degree of subjectivity regarding the significant assumptions including future cash flow and the discount rate. There have been no goodwill impairments recognized in the accompanying financial statements during the years ended December 31, 2024 and 2023.
This change is due to tax adjustments of prior period estimates. 53 Table of Contents ​ Liquidity and Capital Resources ​ Overview ​ Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay any outstanding borrowings, fund and maintain our assets and operations, acquire new properties, make distributions to our stockholders and unitholders, and fund other general business needs. ​ High levels of inflation have prompted the Federal Reserve to increase interest rates which has resulted in, and may continue to result in, increased interest expense.
This decrease is due to tax adjustments in 2023 related to estimates. ​ Liquidity and Capital Resources ​ Overview ​ Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay any outstanding borrowings, fund and maintain our assets and operations, acquire new properties, make distributions to our stockholders and unitholders, and fund other general business needs. ​ Despite cuts in the federal funds rate by the Federal Reserve in September, November and December 2024, interest rates remain high, and there can be no certainty as to the occurrence, timing or magnitude of future rate cuts by the Federal Reserve.
As of December 31, 2023, our portfolio had the following lease expirations as a percentage of approximate acres leased and annual minimum fixed rents: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ($ in thousands) ​ ​ ​ ​ ​ ​ ​ ​ Year Ending December 31, Approximate Acres % of Approximate Acres Annual Fixed Rents % of Annual Fixed Rents 2024 ​ 38,961 ​ 29.3 % $ 12,017 36.1 % 2025 28,066 ​ 21.1 % ​ 7,124 21.4 % 2026 32,625 ​ 24.6 % ​ 6,432 19.3 % 2027 ​ 19,519 ​ 14.7 % ​ 4,751 14.3 % 2028 ​ 143 ​ 0.1 % ​ 59 ​ 0.2 % Thereafter ​ 13,485 ​ 10.2 % ​ 2,888 ​ 8.7 % ​ 132,799 ​ 100.0 % $ 33,271 ​ 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rental Revenues ​ Our revenues are primarily generated from renting farmland to operators of farming businesses.
As of December 31, 2024, our portfolio had the following lease expirations as a percentage of approximate acres leased and annual minimum fixed rents: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ($ in thousands) ​ ​ ​ ​ ​ ​ ​ ​ Year Ending December 31, Approximate Acres % of Approximate Acres Annual Fixed Rents % of Annual Fixed Rents 2025 ​ 19,741 ​ 21.1 % $ 4,708 20.5 % 2026 19,013 ​ 20.3 % ​ 5,039 22.1 % 2027 28,215 ​ 30.2 % ​ 9,336 40.9 % 2028 ​ 91 ​ 0.1 % ​ 71 0.3 % 2029 ​ 6,184 ​ 6.6 % ​ — ​ — % Thereafter ​ 20,281 ​ 21.7 % ​ 3,695 ​ 16.2 % ​ 93,525 ​ 100.0 % $ 22,849 ​ 100.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rental Revenues ​ Our revenues are primarily generated from renting farmland to operators of farming businesses.
Exports to China for fiscal year 2023 (October 2022 to September 2023) were $33.7 billion, down 7% from 2022. Exports to Canada were $27.9 billion, down 3% from 2022. Exports to Mexico were $28.2 billion, up 1% from 2022.
Exports to China for fiscal year 2024 (October 2023 to September 2024) were $25.7 billion, down 23% from 2023. Exports to Canada were $29.0 billion, up 3% from 2023. Exports to Mexico were $30.0 billion, up 7% from 2023. Exports to China for fiscal year 2025 (October 2024 to September 2025) are forecast to decrease to $23.3 billion.
As of December 31, 2023, the weighted average interest rate of the indebtedness subject to interest rate resets in 2024 was 3.07%. ​ At December 31, 2023, $80.5 million, or 22.2%, of our debt had variable interest rates, however, as stated in “Note 10—Hedge Accounting” to the accompanying consolidated financial statements, the Company has an interest rate swap with Rabobank for $33.2 million, which reduces floating rate exposure to $47.3 million.
There is no debt subject to interest rate resets in 2025. ​ At December 31, 2024, $11.8 million, or 5.7%, of our debt had variable interest rates, however, as stated in “Note 10—Hedge Accounting” to the accompanying consolidated financial statements, we have an interest rate swap with Rabobank for $11.8 million, which effectively reduces floating rate exposure to $0.0 million. ​ We expect that future changes in interest rates will impact our overall operating performance by, among other things, affecting our borrowing costs and borrowing costs of our tenants.
This increase was the result of an increase in interest rates, partially offset by a lower average balance on outstanding debt. ​ Income tax (benefit) changed from income tax expense of $0.2 million for the year ended December 31, 2022 to income tax benefit of $0.2 million for the year ended December 31, 2023.
This decrease was the result of lower outstanding debt primarily attributable to debt repayments totaling $239.5 million during the year ended December 31, 2024, partially offset by higher interest rates. ​ 53 Table of Contents Income tax benefit decreased $0.2 million, or 90.4%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The Company has no material debt maturities due before 2025. ​ During the year ended December 31, 2023, the Company repurchased 6,551,087 shares of its common stock at a weighted average price of $11.00 per share. We currently have authority to repurchase up to an aggregate of $83.3 million in additional shares of our common stock.
We have $25.0 million in debt maturities due within the next 12 months. ​ During the year ended December 31, 2024, we repurchased 2,240,295 shares of our common stock at a weighted average price of $12.25 per share.
This increase was the result of certain properties being written down to their estimated fair value. ​ Other operating expenses remained flat at $0.1 million for each of the years ended December 31, 2023 and 2022. ​ Other income decreased $0.6 million, or 94.1%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
This increase was the result of a higher volume of walnut, citrus and avocado sales on our directly operated properties. ​ Other revenue remained relatively flat at $6.1 million and $6.0 million for the years ended December 31, 2024 and 2023, respectively. ​ 52 Table of Contents Depreciation, depletion and amortization decreased $1.9 million, or 25.5%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
This decrease was the result of a lower volume of crop sold on citrus farms and the conversion of blueberry farms from direct operations to third party leases, partially offset by an increase in walnuts in the year ended December 31, 2023 compared to the year ended December 31, 2022. ​ Acquisition and due diligence costs remained relatively flat at $0.0 million and $0.1 million for the years ended December 31, 2023 and 2022, respectively. ​ General and administrative expenses decreased $0.7 million, or 6.1%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
This decrease was the result of a lower impairment expense as well as the sale of blueberry farms that were previously directly operated. ​ Acquisition and due diligence costs were negligible during the year ended December 31, 2024 and remained relatively consistent compared to the year ended December 31, 2023. ​ General and administrative expenses increased $2.8 million, or 24.8%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
We received $195.5 million in aggregate consideration, including $11.8 million in seller financing, and recognized an aggregate gain on sale of $36.1 million. In connection with the foregoing seller-financed transactions, we deferred an additional net gain on sale of $2.1 million.
We received $312.0 million in aggregate consideration, and recognized an aggregate gain on sale of $54.1 million, including $2.1 million in connection with properties sold in 2023 for which the gain was deferred. ​ 2024 Acquisitions ​ During 2024, we completed acquisitions consisting of four properties in the Corn Belt and Delta and South regions.
There have been no goodwill or intangible asset impairments recognized in the accompanying financial statements during the years ended December 31, 2023 and 2022. ​ Results of Operations ​ This section of this Annual Report on Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
Level 3 is defined as inputs to the valuation methodology that are unobservable, supported by little or no market activity and are significant to the fair value measurement. ​ Results of Operations ​ This section of this Annual Report on Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
These increases affect all borrowing rates, and for variable rate debt and debt with rates that reset periodically, such increases have a direct and relatively immediate impact. ​ 49 Table of Contents As of December 31, 2023, $136.0 million of our outstanding indebtedness was subject to interest rates that reset before maturity (excluding our floating rate debt), of which $43.9 million was subject to interest rates that will be reset in 2024.
The Federal Reserve lowered the federal funds rate from recent highs in September 2024, which was followed by additional rate cuts in November and December 2024, and has signaled 49 Table of Contents the possibility of further rate cuts, but interest rates remain high, and there can be no certainty as to the occurrence, timing or magnitude of future rate cuts by the Federal Reserve. ​ As of December 31, 2024, $78.9 million of our outstanding indebtedness was subject to interest rates that reset before maturity (excluding our floating rate debt).
This decrease is primarily due to proceeds from a property insurance claim received during the year ended December 31, 2022, due to weather-related damage, partially offset by loss on early extinguishment of debt during the year ended December 31, 2022. ​ Income from equity method investment remained relatively flat at $0.0 million and $0.1 million for the year ended December 31, 2023 and 2022, respectively. ​ Gain on disposition of assets, net increased $33.5 million for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due the appreciation of farmland value on properties sold relative to book value as well as a greater number of property dispositions during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Impairment during the year ended December 31, 2023, was the result of a property classified as held for sale and written down to its estimated fair value less costs to sell, while impairment during the year ended December 31, 2024 was related to the write-down on the value of trade names associated with Murray Wise Associates, LLC and impairment of irrigation assets held for sale at year-end. ​ Other operating expenses remained flat at $0.1 million for the years ended December 31, 2024 and 2023. ​ Other income remained relatively flat at $0.1 million and $0.0 million for the years ended December 31, 2024 and 2023, respectively. ​ Income from equity method investment increased $0.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. ​ Gain on disposition of assets, net increased $18.0 million, or 49.9%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to the dispositions of 54 properties in 2024 yielding an aggregate gain on sale of $54.1 million as compared to the dispositions of 74 properties in 2023 resulting in an aggregate gain on sale of $36.1 million.
Removed
The deferred gain will be recognized at such time as we consider collection of the seller-financed portion of the sale price to be probable under applicable accounting standards. ​ Share Repurchases ​ During the year ended December 31, 2023, we repurchased 6,551,087 shares of our common stock at a weighted average price of $11.00 per share.
Added
Aggregate cash consideration for these acquisitions totaled $17.9 million. ​ Share Repurchases ​ During the year ended December 31, 2024, we repurchased 2,240,295 shares of our common stock at a weighted average price of $12.25 per share.
Removed
As of December 31, 2023, the Company had approximately $83.3 million of capacity remaining under the stock repurchase plan.
Added
Moreover, the Federal Reserve lowered the federal funds rate in September, November and December 2024. We anticipate any future rate cuts will have a favorable impact on the cost of debt for the Company moving forward.
Removed
Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources”. ​ Lease Renewals ​ During the year ended December 31, 2023, we renewed fixed cash farm leases expiring in 2023 at average rent increases of approximately 20%. ​ Impact of the War in Ukraine ​ Food prices were near record highs even before the invasion of Ukraine.
Added
The federal funds rate is the rate the Federal Reserve charges member banks for overnight funds. Changes to the federal funds rate affect all borrowing rates, and for variable rate debt and debt with rates that reset periodically, such changes have a direct and relatively immediate impact.
Removed
United States farmers, including our tenants, however, generally source fertilizers from the United States and Canada. ​ We anticipate that U.S. farmers will continue to be an important contributor to global food imports as Russia continues its aggression against Ukraine, and high demand for primary crops, which are the core of our business, together with high commodity prices, will sustain high levels of profitability for U.S. farmers.
Added
During the quarter ended September 30, 2023, the Company was under contract to sell an asset for less than its carrying amount, resulting in an impairment of $3.8 million. The estimated fair value of this asset was $3.6 million. The asset was sold during the fourth quarter of 2023.
Removed
After adjusting the $33.2 million of swapped Rabobank debt as fixed rate debt, the ratio of floating rate debt to total debt decreased to 13.0%.
Added
During the quarter ended December 31, 2023, the Company determined that one of its assets had an estimated fair value of $9.8 million, resulting in an impairment of $2.0 million. This is considered a Level 3 measurement under the fair value hierarchy.
Removed
Assuming no increase in the level of our variable rate debt spreads, if SOFR increased by 1.0%, our cash flow would decrease by approximately $0.5 million per year, and if SOFR decreased by 1.0%, our cash flow would increase approximately $0.5 million per year. ​ We expect that future changes in interest rates will impact our overall operating performance by, among other things, affecting our borrowing costs and borrowing costs of our tenants.
Added
Level 3 is defined as inputs to the valuation methodology that are unobservable, supported by little or no market activity and are significant to the fair value measurement. The asset was valued based upon a market assessment of similar properties.
Removed
This decrease was the result of a lower volume of crop sold on citrus farms and the conversion of blueberry farms from direct operations to third party leases. ​ Other revenue decreased $0.9 million, or 13.4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Added
During the years ended December 31, 2024 and 2023, the Company recorded impairment of $0.6 million and $0.0 million, respectively, on intangible assets. The fair value of trade names was determined to be $1.2 million at December 31, 2024.
Removed
This decrease was primarily due to a decrease of $1.6 million in auction and brokerage income, and a decrease of $0.3 million in crop insurance proceeds, partially offset by an increase of $1.0 million in management fees and interest income. ​ 52 Table of Contents Depreciation, depletion and amortization increased $0.5 million, or 7.7%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Added
The Company utilized the relief from royalties method to determine the present value of cash flows and the through 2049 and the present value of residual cash flows, utilizing a discount rate of 8.7% and an average long-term revenue growth rate range of 0-3% per year. This is considered a Level 3 measurement under the fair value hierarchy.
Removed
This decrease was primarily driven by lower bonus, stock-based compensation and travel expense partially offset by higher payroll costs. ​ Legal and accounting expenses decreased $1.6 million, or 55.5%, for the year ended December 31, 2023 compared to the year ended December 31, 2022, due primarily to the successful defense and termination of the stockholder class action litigation that was pending against the Company from July 2018 until dismissal of the litigation by a federal judge on April 6, 2022. ​ Impairment of assets increased $5.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Added
The severance expense was incurred in connection with the previously announced departure of the Company’s former Chief Financial Officer and Treasurer as part of the Company's cost-cutting initiative. ​ Rental income decreased $2.1 million, or 4.2%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, resulting primarily from dispositions that occurred in 2023 and 2024, partially offset by increased variable rent. ​ Crop sales increased $2.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Removed
In connection with the sale of two farms in December 2023 pursuant to which we provided $9.5 million of seller financing, we deferred an additional net gain on sale of $2.1 million.
Added
This increase was driven by a one-time severance expense of $1.4 million and $2.3 million of special bonuses during the year ended December 31, 2024, partially offset by lower compensation and travel expense.
Removed
The deferred gain will be recognized at such time as we consider collection of the seller-financed portion of the sale price to be probable under applicable accounting standards. ​ Interest expense increased $6.5 million, or 40.4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Added
The severance expense was incurred in connection with the previously announced departure of the Company’s former Chief Financial Officer and Treasurer as part of the Company's cost-cutting initiative. ​ Legal and accounting expenses increased $0.4 million, or 29.3%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Removed
The ATM Program is intended to provide cost-effective financing alternatives in the capital markets. We intend to continue to utilize the ATM Program when the market price of our common stock remains at levels which are deemed appropriate by our Board of Directors. We may increase the size of the ATM Program in the future.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+1 added−2 removed3 unchanged
Biggest changeWe do not use such derivatives for trading or other speculative purposes. ​ At December 31, 2023, $80.5 million, or 22.2%, of our debt had variable interest rates, however, as stated in “Note 10—Hedge Accounting” to the accompanying consolidated financial statements, the Company has an interest rate swap with Rabobank for $33.2 million, which reduces floating rate exposure to $47.3 million.
Biggest changeHowever, as stated in “Note 10—Hedge Accounting” to the accompanying consolidated financial statements, the Company has an interest rate swap with Rabobank for $11.8 million, which effectively reduces floating rate exposure to $0.0 million. ​ Item 8.
Removed
After adjusting the $33.2 million of swapped Rabobank debt as fixed rate debt, the ratio of floating rate debt to total debt decreased from 22.2% to 13.0%.
Added
We do not use such derivatives for trading or other speculative purposes. ​ At December 31, 2024, $11.8 million, or 5.7%, of our debt had variable interest rates.
Removed
Assuming no increase in the level of our variable rate debt spreads, if SOFR increased by 1.0%, our cash flow would decrease by approximately $0.5 million per year, and if SOFR decreased by 1.0%, our cash flow would increase approximately $0.5 million per year. ​ Item 8.

Other FPI 10-K year-over-year comparisons