May 15, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Farmland Partners Inc. (FPI) is a real estate investment trust (REIT) that owns and seeks out high-quality farmland in North America, and makes loans to farmers secured by farm real estate. 

FPI has had a storied history in recent years. Highlights include, in 2016, the company merged with American Farmland Company (AFCO) to form the largest public farmland REIT in the U.S. at the time. The deal was highly complementary bringing together Farmland Partners’ portfolio that was mainly row crop farmland, with American Farmland’s portfolio of predominantly specialty and permanent crop farms – resulting in a combined portfolio of approximately 75 percent row crop and 25 percent specialty crop farms by value.

The following year, FPI executed a highly significant deal, when it acquired 5,100 acres of permanent crop farmland producing almonds, pistachios, and walnuts in California’s Central Valley from Olam International Limited for $110 million.

However, in 2021, it came to light that back in 2018, an anonymous writer using the pen name Rota Fortunae – Latin for ‘wheel of fortune’ – (later revealed to be Quinton Mathews), wrote a defamatory attack against Farmland Partners (FPI) which was published on the financial website Seeking Alpha. 

This “short and distort” scheme targeting FPI management and its stockholders was rife with false statements, according to Mathews own admission, that drove FPIs stock down by 39 percent on the day of publication – enabling Mathews and his clients, including his co-conspirators, such as the hedge fund Sabrepoint Capital that focused his attention on FPI, to profit from their short positions established prior to publication.

Most targets of such schemes will usually take the hit and regroup. However, after Farmland Partners lost as much as $115 million of its market value as a result of Mathew’s action, the firm pursued him in court. And, in a rare outcome,  to settle the lawsuit, Mathews agreed to pay FPI restitution equal to “a multiple” of the profits he’s gained since 2018.

The money returned to FPI by Mathews included not only the gains made through his trading, but also the profits realized by his business partner Keith Killing, and his father, who also shorted FPI prior to the article’s publication.

Paul Pittman, who was CEO of FPI at the time, stated, “The outrageous acts of Mr. Mathews and his co-conspirators, together with the blind and misguided trust Plaintiffs’ lawyers placed on Mr. Mathews’ statements have damaged innocent shareholders. We intend to continue to vigorously seek to right this wrong.”

Having weathered and prevailed over this attack, FPI began to announce further deals, acquiring 100 percent of Murray Wise Associates through a deal valued at $8 million in November 2021 that created an unparalleled platform for farmland investing. 

Then came more farmland acquisitions, including a $2.4 million deal in May 2022 for a 166-acre Illinois corn and soybean farm located in Bureau County, including a 16,000-bushel grain bin, and a $12.1 million deal in December 2022 for 3,843 acres of farmland in Texas.

Today, FPI owns, operates, and manages nearly 195,000 acres in 20 states growing 26 crops types by more than 100 tenants in Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, Texas, and Virginia. Additionally, the company owns land and buildings for four agriculture equipment dealerships in Ohio leased to Ag Pro under the John Deere brand. 

Most recently, the company announced that it sold 2.426 acres of farmland in Nebraska and South Carolina to the tenants who rented the properties through transactions totaling $16.2 million, representing a total gain of $3.1 million, or approximately 24 percent over book value.

The company also completed two property dispositions for $7.1 million and a total gain of $1.8 million in the quarter ending March 31, 2023. 

“These transactions highlight the appreciation power of farmland, as well as the health of the farm economy in general,” said Luca Fabbri, president and CEO, FPI. The proceeds from these asset sales are being used to generate value for our shareholders, reducing indebtedness and buying back stock at a discount to our estimate of its value. Additional dispositions will be forthcoming, but we continue to look for smart additions for our portfolio as well.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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