Farmland Partners (NYSE:FPI) executives said first-quarter results were largely in line with internal expectations, while also addressing investor questions around the agricultural outlook amid geopolitical uncertainty and the company’s credit-loss reserves tied to its loan program.
Management characterized the quarter as “pretty good”
Executive Chairman Paul Pittman said the company delivered “all in all a pretty good quarter,” before spending much of his prepared remarks discussing questions the company has received about how the war in Iran could affect fertilizer availability, grain prices, and the broader farm economy.
Series A preferred redemption and liquidity
Fabbri said Farmland Partners completed the redemption of its Series A preferred units in cash, calling the preferred units “a significant overhang on the company” because of the possibility they could have been converted into common equity “at prices that we consider at a significant discount to our intrinsic value.”
Fabbri said the company had prepared for the redemption “for a long time by shoring up our liquidity reserves” and emphasized that the company still has what he described as a strong liquidity position. CFO Susan Landi reported that Farmland Partners ended the quarter with approximately $114 million of undrawn capacity on its lines of credit, and said borrowings during the quarter were primarily used to redeem the remaining Series A preferred units.
Financial results and updated 2026 guidance
Landi reported net income of $0.6 million, or $0.01 per share available to common stockholders, for the three months ended March 31, 2026, down from the prior-year period. Adjusted funds from operations (AFFO) totaled $2.1 million versus $2.3 million a year earlier, equating to $0.05 per weighted average share, which she said was unchanged from the first quarter of 2025.
Discussing year-over-year drivers, Landi said revenue benefited from:
- Higher interest income due to a higher average balance on loans under the FPI Loan Program and financing receivables
- Increased amortization of points
- Higher proceeds from oil and gas royalties
Those gains were partially offset by lower rental income due to asset dispositions, as well as the absence of auction brokerage and third-party management income following the sale of MWA in the fourth quarter of 2025, Landi said.
On expenses, Landi said operating costs were “slightly higher” year over year due to an increase in the allowance for credit losses related to loans under the FPI Loan Program. She added that this was partially offset by lower property operating and depreciation expenses (attributed to dispositions) and savings on corporate and travel expenses following the MWA sale.
For 2026, Landi provided updated guidance, citing changes since February. She said management fees and interest income assumptions increased due to “the amendment and extensions of loans under the FPI loan program,” while expense assumptions rose due to an increased provision for credit loss allowance stemming from “higher allowance on potential credit losses of loans.”
The company’s updated AFFO outlook is $13.2 million to $15.2 million, or $0.30 to $0.35 per share. Landi said the range represents a decrease “from the prior quarter on both the high and low end of the range.”
Portfolio moves and views on farmland resilience
Fabbri said the company continues to “marginally improve the overall quality of our portfolio” and disclosed another California property disposition. He described California as a region the company views as “subject to volatility and to risks,” adding that management “welcome[s] the reduction to that kind of exposure.”
Despite broader uncertainty, Fabbri said farmland “continues to demonstrate its strength and its resilience,” and reiterated management’s confidence in the asset class.
Q&A: loan-loss reserves, macro questions, and capital allocation
During the Q&A, B. Riley Securities analyst John Massocca asked about the increase in loan-loss reserves and whether it reflected changing views on farm valuations. Pittman said the additional reserves were not driven by direct concerns about collection, but rather caution given the risk profile of the loan program.
He added that one borrower “continues to have…critical challenges” and has faced a “negative news cycle.” Pittman said that while the company may feel secure about its specific loans, borrower complications with other lenders can make situations more complex and “in a non sort of defined way increases risk.” Pittman later clarified the issues were “very specific to that borrower” and “not a crop type issue.”
Massocca also asked whether geopolitical events were affecting farmland transaction markets. Pittman said the conflict in the Middle East does not have a “direct line of sight impact” on farmland transactions. Instead, he pointed to a “somewhat challenging farm economy based on crop price versus cost of operation,” which can make farmers less aggressive bidders. Pittman emphasized that farmland values tend to move slowly, with “a very slow, steady upward march” driven by land scarcity and food demand.
On the potential farm input impact from the war in Iran, Pittman said most U.S. fertilizer does not come from the Middle East or the Gulf, and he had not heard reports of fertilizer shortages. He did note that higher fertilizer prices could influence crop decisions, potentially favoring soybeans over corn. Pittman also referenced recent grain price increases, particularly in wheat, while attributing corn and wheat price strength at least partly to drought conditions in the southeastern U.S., which he described as “very, very significant.”
Asked about diesel prices, Pittman said diesel is “a relatively small portion” of a farmer’s crop budget—estimating around 10% or less—and noted that many farmers hedge or pre-buy fuel, which can delay the impact of price increases on farm financials.
Raymond James analyst Susie Hyde asked about capital allocation priorities as loan program repayments come in later in the year. Pittman said most returned capital is likely to be used for “continued deleveraging of the balance sheet,” though he said share repurchases could be considered depending on the stock price. Fabbri agreed, saying deleveraging is the current priority while the company remains “very, very opportunistic” regarding potential stock repurchases.
Finally, Massocca asked about the expected rate on the repricing of the MetLife term loan number seven in June. Landi said the company expects it to be “fairly in line with what we did with the two that occurred in Q1.” Landi also said the rate locks “just before,” with Fabbri indicating the timing would be “late May, early June.”
About Farmland Partners (NYSE:FPI)
Farmland Partners Inc is a real estate investment trust (REIT) that acquires and manages high-quality farmland in the United States. The company’s primary business activity is the ownership of agricultural land, which it leases to farmers under various rental arrangements designed to generate stable cash rents and long-term capital appreciation. By focusing on farmland as a real asset, the company seeks to benefit from rising global demand for food, fiber and renewable fuels.
Founded in 2013 and headquartered in Scottsdale, Arizona, Farmland Partners completed its initial public offering in June 2017 and began trading on the New York Stock Exchange under the ticker FPI.
