If you do a search in Google News..."California water" you will see real time what is happening. The a few things will happen this next year that effects all in the US and Canada. Your Big Mac will not have lettuce and tomatoes. Pizza sauce will be very hard to find and costly. Salsa will not be there for a couple of years. You will be limited with your fresh vegetables at the store. You will be eating a lot more canned vegetables...
1-FPI is considerably cheaper than LAND. After the fall in LAND it's still way above NAV while FPI is near NAV. Fall was from an unrealistic valuation. 2-As Cabin talked about, water is not nearly as secure as it may seem. CA politicians will run over any water rights if they have more important needs. See what they did to our rights during covid? CA is already paying some farmers to idle acres. Not sure how that would affect the revenue/income if LAND did the same. Tough to do that with tree land though. 3-The valuations you used based on an olive orchard can be misleading as "tree properties" can be significantly more valuable than annual crops like vegetables. Their land is a mix of annual & permanent. 4-"unless the farmer goes broke, it shouldn't matter." If the landowner can't provide the water promised, the farmer won't be required to farm the land or pay the rent. 5-"lessee is responsible for all the costs" On a permanent crop (olives, almonds, apples, etc...), LAND owns the trees so if they die from drought, bugs, etc... LAND is responsible for replacement. 6-SeekingAlpha has good articles on LAND & FPI. Here's a recent one talking about the risks with LAND. https://seekingalpha.com/article/4533556-gladstone-land-h1-2022-review-worrying-trends https://seekingalpha.com/article/4519519-buy-farmland-partners-for-its-assets-not-its-cash-flow ***FPI is my largest equity holding. Sold LAND before the big move higher :-( ***FPI may do a stock offering if it trades 15.5-16 IMO.
I may sound like a nut...But I went to Walmart today. I loaded up on salsa and tomato sauce. Both will expire in 2024...The sauce was from Mexico (they were trying to unload it (a good price).
That's really interesting, especially #4 and #5, I didn't think of that. Of course those things could be spelled out in the individual contracts, but if its the standard in the industry, absolutely. Good points. The net asset value though, I wanna say I saw it their report for right around 1.2B, I chuckled because I came in pretty close just ballparking those figures above. You're probably right though since you've followed these things. Colorado is no picnic with water either. They'll be ok in FL though.
"I think I mentioned this to you before, but you should wait before you sell the calls, ie not the same day you bought the stock. Especially this stock. I'd just sit on it, wait till it gets to $28, and then sell the leaps. Will it make it to $28 anytime soon? I think there's a good chance it will." I've thought about and done this over the years. The problem arises when you buy the stock then it drops. It will keep dropping and stay down for months or years!! This has happened to me. I would get no "income" (yeah, I KNOW it's not income...But you get the idea [money]) from the option. Also, there are no leaps with LAND...Feb 23 is the longest out there.
I'll just add to this thread rather than start a new one. Most of my portfolio was red today...Not a surprise. But, Seneca Foods was up...About 1/2 of a percent (SENEA). No options on this company... We are so use to fresh fruits and vegetables...We may have to look to those old style (canned/frozen) foods for awhile. https://www.senecafoods.com/ I hate to say it, but it looks like food you would eat in a rest home...
Just some more info about crops... Farmers, agricultural economists and others taking stock of this summer’s growing season say drought conditions and extreme weather have wreaked havoc on many row crops, fruits and vegetables, with the American Farm Bureau Federation suggesting yields could be down by as much as a third compared with last year. American corn is on track to produce its lowest yield since the drought of 2012, according to analysts at Rabobank, which collects data about commodity markets. This year’s hard red winter wheat crop was the smallest since 1963, the bank’s analysts said. In Texas, cotton farmers have walked away from nearly 70 percent of their crop because the harvest is so paltry, according to the U.S. Department of Agriculture. The California rice harvest is half what it would be in a normal year, an industry group said. The poor yields are likely more than a one-year blip, as climate change alters weather patterns in agriculturally important parts of the country, contributing to higher food prices that experts don’t see ebbing any time soon. Drought has consumed 40 percent of the country for the past 101 weeks, USDA meteorologist Brad Rippey said. But precisely where that 40 percent is has shifted over time, meaning different swaths of the country’s agricultural land have been affected at different times, spreading pain and difficult choices geographically and by crop. “Spring wheat, durum wheat, barley [in the Northeast] — those were just hammered in 2021. For some of those crops it was the lowest yields we’ve seen since the 1980s,” Rippey said. “The biggest impacts this year have been the Central and Southern Great Plains — Nebraska southward through Texas — and the two big crops hit this year are grain sorghum [primarily used for animal feed] and cotton.” Based on last month’s numbers, he said, it looks like abandonment of the Texas cotton crop will be the highest on record, around 69 percent: “That’s when farmers just walk away.” California’s ‘Cantaloupe Center’ struggles to reign supreme as drought pummels agriculture across the West In California, farmers are making tough choices to give up on their strawberries and tomatoes, lettuces and melons, so that whatever water they get goes to crops like almonds, grapes and olives, where they’ve sunk multiyear investments and the payoff is better, Rippey said. Even with recent rains, a lot of the western United States is still looking at a long-term drought, said Curtis Riganti, a climatologist at the National Drought Mitigation Center. “We’re seeing widespread extreme and exceptional drought in California’s Central Valley, parts of Nevada, central and southern Oregon, the central High Plains, southern Oklahoma and Texas,” he said. “And while we’ve seen a pretty active monsoon season this year over New Mexico, Arizona and southern Colorado, in terms of refilling reservoirs it doesn’t do a ton of good.” Every August for the past 30 years, a group of agricultural experts and volunteer farmers in the Midwest hop in their cars and convoy across seven states, a boots-on-the-ground backstop for the USDA’s ongoing predictions about annual crop yields. The USDA had reduced its corn forecast last month because of this summer’s drought. But the Pro Farmer Crop Tour, which concluded Aug. 25, found the corn yield was even worse than that lowered expectation. The on-the-ground inspectors also found the corn quality had suffered as a result of heat and dry conditions, with cobs carrying small grains and many suffering from “tipback,” when kernels are missing from the outer edge. Wheat has taken a walloping this year, with rains impeding spring planting after a protracted La Niña weather pattern meant several years of hotter and drier weather over key production areas. Drought is also having a dramatic effect on California rice, which is grown mostly in the Sacramento Valley. The state, which grows medium grain rice like sushi rice, is at about half of a normal year’s production, said Katie Cahill, spokeswoman for the California Rice Commission. Many growers decided to fallow their fields and sell their water to perennial crops like almonds to defray their losses. The federal government operates a system of dams, reservoirs and canals in California that the state relies on for agriculture and drinking water. Water agencies contract with the federal government for certain amounts of water each year. The federal government fulfills the contracts based on how much water is available. This year, as the state’s megadrought dragged into its third year, the government said it had no water to give farmers. Inflation gobbles up fresh produce, driving up price of Super Bowl guacamole Last summer was a disappointment for tomato growers, said Aaron Barcellos, partner at A-Bar Ag Enterprises in Firebaugh, in Fresno County, Calif., “and we’re still in a worse water situation than last summer.” “Even the river water has been cut back. Other crops are competing for that same water, other crops that have better returns,” he said. On his own farm, he has cut back from 2,000 acres of tomatoes in 2020 to 900 last year. This year he has only 530 acres of canning tomatoes. “Some of that land has gone to garlic and Pima cotton, the rest of it has gone fallow,” he said. Contracts with canners are negotiated before the season starts, so an exceptionally tough year leaves growers in a hole financially. “We have contracts and those prices aren’t viable now. A lot of growers are leaving the tomato industry because of the past several years,” Barcellos said. The USDA recently estimated that the tomato harvest this year will be 10.5 million tons, more than a million tons shy of a normal season, which will be reflected in the next year’s pizza, spaghetti sauce and ketchup prices. Get ready to pay more for tomatoes, as California growers reel from extreme weather Harvest of the new potato crop is underway and Rabobank analysts say the harvested area is projected to drop 4 percent from last year (and last year’s crop was a decade’s low). Its analysts also said year-to-date shipments of carrots are down 45 percent, sweet corn down 20 percent, sweet potatoes down 13 percent, and celery down 11 percent, all an indication of short supply. And according to the USDA, total peach production was down 15 percent from 2021, mostly because of California’s small crop. One bright spot is soybeans. Gro Intelligence’s modeling put a total soybean forecast at 4.30 billion bushels, lower than the USDA’s 4.53 billion bushels but slightly higher than last year. But the bad news extends to cattle, portending bad news for next year’s beef prices. When weather is dry and hot, there’s not enough natural feed to go around. To sustain a herd, ranchers must bring in hay, and feed prices soar, prompting ranchers to sell their animals a little early, and often to sell heifers, the young females, rather than keep them as breeding stock, said Sarah Little, spokeswoman for the North American Meat Institute, a trade association. This has resulted in lower beef prices to consumers in the short term, but signals that there will likely be a tighter supply next year. A recent Farm Bureau survey found that the largest herd decline is in Texas (reported down 50 percent), followed by New Mexico (down 43 percent) and Oregon (down 41 percent), largely due to scarce forage and water, which cuts into operational income for ranchers. “Producers are especially hard hit because food, fuel and fertilizer costs have been rising, so although they are getting record prices for cattle, inflation has hurt their income,” Little said.
LAND up post earnings (over 4%). They added properties in OR and WA. It's been raining in California!! Boring company (watching paint dry), but good option money and fair dividend... https://www.gladstonefarms.com/ Third Quarter 2022 Activity: Portfolio Activity: Property Acquisitions: Acquired four new farms, consisting of 1,317 gross acres in two different states (Washington and Oregon), and a 40-acre parcel in Arizona adjacent to an existing farm for a total of approximately $37.4 million. On a weighted-average basis, these acquisitions will yield an initial, minimum net capitalization rate of 6.2%; however, the leases on these farms contain certain provisions (e.g., annual rent escalations, CPI adjustments, or participation rents) that are expected to drive cash rents higher in future years. Lease Activity: Executed six new or amended leases (including one early termination and immediate re-leasing of the respective property) on certain of our farms in three different states (AZ, CA, and FL) that are expected to result in an aggregate increase in annual net operating income of approximately $281,000, or 9.8%, over that of the prior leases. Debt Activity-Loan Repayments: Repaid approximately $16.9 million of maturing loans. On a weighted-average basis, these borrowings bore interest at an effective interest rate (after interest patronage) of 2.89%. Equity Activity: Series C Preferred Stock: Amended certain terms of the offering of our 6.00% Series C Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock") to (i) reduce the size of the offering from a maximum of 26.0 million shares (up to $650 million) to a maximum of 10.4 million shares (up to $260 million), and (ii) shorten the duration of the offering so that the offering will terminate no later than December 31, 2022. Sold 2,470,908 shares of our Series C Preferred Stock for net proceeds of approximately $56.2 million. Common Stock-ATM Program: Sold 183,937 shares of our common stock for net proceeds of approximately $4.6 million under our "at-the-market" program (the "ATM Program"). Increased and Paid Distributions: Increased the distribution run rate on our common stock (including OP Units held by non-controlling OP Unitholders, if any) by a total of 0.44% and paid monthly cash distributions totaling $0.1368 per share of common stock during the quarter ended September 30, 2022. Third Quarter 2022 Results: Net income for the quarter was approximately $1.8 million, compared to approximately $0.6 million in the prior quarter. Net loss to common stockholders during the quarter was approximately $3.6 million, or $0.10 per share, compared to approximately $3.9 million, or $0.11 per share, in the prior quarter. AFFO was approximately $7.2 million for the current quarter, an increase of approximately $2.7 million, or 60.3%, from the prior quarter, while AFFO per common share increased to approximately $0.21 for the current quarter, compared to approximately $0.13 for the prior quarter. Common stock dividends declared also increased to approximately $0.137 for the current quarter, compared to approximately $0.136 for the prior quarter. The increase in AFFO was primarily driven by higher lease revenues recorded during the current quarter, partially offset by increases in dividends paid to preferred shareholders and certain related-party fees. Total cash lease revenues increased by approximately $3.9 million, or 19.7%, primarily driven by participation rents recorded during the current quarter of approximately $3.0 million, versus approximately $20,000 in the prior quarter. Fixed base cash rents increased quarter-over-quarter by approximately $877,000, or 4.5%, primarily due to additional rental receipts attributable to recent acquisitions and additional rents earned on capital improvements completed on certain of our farms. Aggregate related-party fees increased by approximately $629,000 from the prior quarter, primarily driven by an incentive fee earned by our investment advisor in the current quarter (due to our pre-incentive fee FFO surpassing the required hurdle rate), versus no fee earned during the prior quarter, and an increase in the administration fee paid to our Administrator due to hiring additional personnel and using a higher overall share of our Administrator's resources in relation to those used by other funds and affiliated companies serviced by our Administrator. Excluding related-party fees, our recurring core operating expenses decreased by approximately $95,000 from the prior quarter, primarily due to lower general and administrative expenses as a result of additional costs incurred related to the annual shareholders' meeting in the prior quarter. The increase in AFFO was also attributable to approximately $113,000 of interest patronage received during the current quarter, as certain Farm Credit associations paid a portion of the 2022 interest patronage (which relates to interest accrued during 2022 and is typically received in the first half of the following calendar year) early. Additionally, cash dividends declared on our Series C Preferred Stock increased due to additional stock issuances during and since the prior quarter. Cash flows from operations for the current quarter decreased by approximately $8.1 million from the prior quarter, primarily due to the timing of when certain rental payments are scheduled to be paid pursuant to their respective leases and an increase in the amount of cash payments made for interest. Our estimated NAV per share increased by $0.96 from the prior quarter to $16.56 at September 30, 2022, primarily due to a decrease in the net fair value of our fixed, long-term borrowings as a result of increases in market interest rates and valuation increases in certain of our farms that were re-appraised during the current quarter, partially offset by ongoing capital improvements made on certain of our farms, which will not be reflected in the properties' fair values until the respective projects are complete. PS Not too much damage in their Florida properties...