Participants

Luca Fabbri; President, Chief Executive Officer, Director; Farmland Partners Inc

Christine Garrison; General Counsel & Corporate Secretary; Farmland Partners Inc

Paul Pittman; Executive Chairman of the Board; Farmland Partners Inc

Susan Landi; CFO; Farmland Partners Inc

Rob Stevenson; Analyst; Janney Montgomery Scott

Buck Horne; Analyst; Raymond James

Darren Rabenou; Analyst; DTR Partners

Craig Kucera; Analyst; Lucid Capital Markets

Presentation

Operator

Thank you for standing by. My name is Gail, and I will be your conference operator today. At this time, I would like to welcome everyone to the Farmland Partners Incorporated Q4 in fiscal year 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. (Operator Instructions)
I will now turn the call over back to Luca Fabbri, President and CEO of Farmland Partners. Please go ahead.

Luca Fabbri

Thank you, Gail. Good morning, everybody, and welcome to Farmland Partners full year 2024 earnings conference call and webcast. We truly appreciate your taking the time to join us for these calls because we see them as a very important opportunity to share with you our thinking and our strategy in a format somewhat less formal and more interactive than public filings of press releases.
I will now turn over the call to our General Counsel, Christine Garrison for some customary preliminary remarks. Christine.

Christine Garrison

Thank you, Luca, and thank you to everyone on the call. The press release announcing our fourth quarter earnings was distributed after market closed yesterday. The supplemental package has been posted to the investor relations section of our website under the sub header Events and Presentations.
For those who listen to the recording of this presentation, we remind you that the remarks made herein are as of today, February 20, 2025, and will not be updated subsequent to this call.
During this call, we will make forward-looking statements, including statements related to the future performance of our portfolio, our identified and potential acquisitions and dispositions, impact of acquisitions, dispositions, and financing activities, business development opportunities, as well as comments on our outlook for our business rents and the broader agricultural markets.
We will also discuss certain non-GAAP financial measures, including net operating income, FFO, adjusted FFO, EBITDAre, and adjusted EBITDAre.
Definitions of these non-GAAP measures as well as reconciliations to the most comparable GAAP measures are included in the company's press release announcing full year 2024 earnings, which is available on our website, FarmlandPartners.com and is furnished as an exhibit to our current report on Form 8K dated February 19, 2025.
Listeners are cautioned that these statements are subject to certain risks and uncertainties. Many of which are difficult to predict and generally beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations, and we advise listeners to review the risk factors discussed in our press release distributed yesterday and in documents we have filed with or furnished to the SEC.
I would now like to turn the call over to our Executive Chairman, Paul Pittman.
Paul.

Paul Pittman

Thank you, Christine. So, my comments this morning will be a little bit shorter than normal. I'll let the rest of the team go through the details of the success of the year, but I want to hit a couple of high points. We have said for a long time that owning farmland is fundamentally a total return story.
I think the last 12 months truly proved that to our shareholders. We did a substantial amount of asset sales at very high gains. We distributed basically all of that cash to our shareholders in the form of a $1.15 special dividend early in January. And if you recall, we did a similar but somewhat smaller distribution a year earlier, also based on asset sales at very good prices.
Farmland is a function of current yield plus appreciation. The public markets for most of our life have frankly ignored the second element. It is the bigger return element of the asset class. We've always said it's there. Now two years in a row, we've delivered on that.
We also have focused very hard on driving revenue higher and therefore AFFO higher. That's all about increasing rents through time and getting very good pricing in, our specialty crops, at least for the most recent year.
The other thing we focused on is reducing cost. All of that has delivered to shareholders a substantial increase in stock price, particularly in the context of having handed out $1.15 this year, which is fundamentally should make your stock kind of go down when you think about the distribution of the underlying assets of the company.
The, we've delivered substantially and bought back quite a bit of stock, and all of these things together have delivered very substantially for all shareholders, including myself, of which we should all be quite happy, with that. I'll turn it over to Luca and the rest of the team to make some more comments, and I'll see you all in the Q&A.

Luca Fabbri

Thank you, Paul.
I just want to highlight a couple of points that Paul already alluded to. This 2024 has been a very strong year for the company. And if I had to kind of point at space and very specific elements that drove this performance, one would certainly be the fact that now for several years we've had very strong performance in our rent renewals, and that is showing up in the numbers for our base rent revenue.
This year we also had a very strong performance of some of our specialty crop farms, delivering very good returns in terms of variable rents as well as direct operation, revenue. So, that all contributed to the strong performance, including also some structural cost reductions that we were able to perform this year.
Looking more broadly at what we've done this year, we've done significant asset sales, as you're all aware, and we were able to not only, as Paul mentioned, deliver some of that gain to our shareholders in form of a special dividend. But we also that created some liquidity that allowed us to reduce our indebtedness and also do some stock buybacks.
That has resulted also in a much-reduced interest expense in conjunction with the reduced interest rates that we all saw. If I look at the forward at 2025, you will see that we are putting out a guidance for the year in terms of AFFO per share of between $0.25 and $0.30.
That is above our current dividend rate of $0.24, as you're all aware, dividends are decided by the board on a quarter-to-quarter basis for the time being we are kind of staying on course with the $0.24 per share, but the board will, of course, as the year progresses, evaluate, a different approach on dividend. But again, that will be on a on a quarter by quarter basis, a decision made by the whole board.
With that, I will turn the call over to Susan Landi, our Chief Financial Officer, for her overview of the company's financial performance.
Susan.

Susan Landi

Thank you, Luca. I'm going to cover a few items today, including summary of the full year for 2024, review of capital structure, a comparison of full year revenue, and guidance for 2025. I'll be referring to the supplemental package which is available in the investor relations section of our website under the subheader Events and Presentations.
First, I will share a few financial metrics that appear on page two. For the full year ended December 31, 2024, net income was $61.5 million or $1.19 per share available to common stockholders, which is high. Higher than the same period for 2023, largely due to the impacts of dispositions that occurred in the fourth quarter of 2024.
The significant debt reductions, which resulted in interest savings, and the impact of several years of strong lease renewals. AFFO was $14.1 million or $0.29 per weighted average share, which was significantly higher than the same period for 2023.
AFFO was positively impacted by lower property taxes, lower interest expenses a result of the debt reductions, increased volume of avocado and citrus sales on our directly operated properties and increased variable farm rents.
Next, we will review some of the operating expenses and other items shown on page five. Gain on disposition of assets was higher due to dispositions of 54 properties in 2024, with an aggregate gain on sale of $54.1 million compared to dispositions of 74 properties in 2023, with an aggregate gain on sale of $36.1 million.
As a result of these meaningful dispositions, we were able to lower interest expense by reducing our outstanding debt by $158.5 million net of borrowings. In addition, the dispositions lowered both property operating expenses and depreciation expense.
General and administrative expenses increased due to a one-time severance expense of $1.4 million and a special bonus of $2.1 million to executive officers during the year ended December 31, 2024, partially offset by lower compensation and travel expense throughout the year.
The severance expense was incurred in connection with the previously announced departure of the company's former CFO and treasurer as part of the company's cost cutting initiative.
Next, moving on to page 12, there are a few capital structure items to point out. We had undrawn capacity on the lines of credit of approximately $167 million at the end of the year. We have no debt that is subject to interest rate recess during 2025.
Page 14 breaks down the different revenue categories with comments at the bottom that describe the differences between the periods. A few points that I'd like to highlight are, as expected, fixed farm rent did decrease, and that's because of the dispositions in 2023. The decrease was partially offset by several years of strong lease renewal rates.
Note that the company negotiated to retain the full year of 2024 rent for the property sold in October of 2024. Management fees and interest income increased primarily due to the increase in loan issuances in 2024 under the FPI loan program.
Direct operations is the combination of crop sales, crop insurance, and cost of goods sold. It was up relative to 2023, largely due to an increase in sales of citrus, avocado, and walnuts, as well as lower impairment and cost of sales.
Page 15 is our outlook for 2025. The assumptions are listed at the bottom of the page. On the revenue side, fixed farms, solar, wind, and recreation rent reflects the full year impact of 2024 transactions as well as lease renewals. Management fees and interest income is higher due to the increased activity in the on the FPI loan program.
Variable payments decrease due to the outlook for citrus and rope crops, plus the absence of grape farms sold. The change in direct ops, again, that's crop sales, crop insurance minus cost of goods sold, is primarily due to increased costs associated with maintenance and water.
On the expense side, property operating expenses decreased as a result of savings on the sales that occurred during the year. GNA decreased due to events such as the one-time $1.4 million severance expense and the $2.1 million special bonus.
Interest expense declined primarily due to realizing a full year impact of debt reductions that occurred in Q4 of 2024, and the weighted average shares also decreased, with the full year impact of the 2024 share buybacks. The forecasted range of AFFO is $12.1 million to $14.7 million, or $0.25 to $0.30 per share.
This summarizes where we stand today. We will keep you updated as we progress through the year. This wraps up our comments this morning. Thank you all for participating. Operator, you can now begin the Q&A session.

Question and Answer Session

Operator

(Operator Instructions)
Rob Stevenson, Janney Montgomery Scott

Rob Stevenson

Good morning, guys. Just to love to get your thoughts right now on where the pricing environment is, relative to where you needed to be to do net acquisitions in 2025 and if there's any sort of areas of the country or crop types that you want to be in longer term that are making sense to do deals today versus the ones that are just far too pricey.

Paul Pittman

Yeah, let me take that one. Luca may have additional comments. Hi, Rob. So, if you looked at our portfolio to, overall, today, it is extremely focused on the state of Illinois and a little bit more broadly Indiana and Missouri. A small set of holdings is still in eastern Colorado, and then basically California.
So, Illinois is incredibly strong. We've talked about this in the past. We've kind of reached a plateau stage in terms of valuations in Illinois, meaning the market's not driving higher, not every single sale is a new record, but the prices, particularly for good properties, remain very strong.
We would continue to buy in Illinois, if the valuations make sense, as we all know, it's a relatively low current yield environment, but a very high appreciation environment. And when you think about the port for all investors, when you think about the portfolio today, recognize that the gains we achieved on the sale of the portfolio, at the end of last year.
We sold essentially the Southeast, United States, most of Nebraska, and most, of our delta, Arkansas, Louisiana, Mississippi properties. Those were very high gains, but that's not the best assets with the most embedded value gain that we own. Best assets with the most embedded value gain since we bought owned them, is really our Illinois properties where, we own approaching 40,000 acres.
Turning to Colorado is, frankly, a little bit, it's like Goldilocks, not too hot, not too cold. We are long term, not particularly excited about that region because of water limitations and their likelihood that the water limitations just get to be more extensive through time, I think we will likely gradually exit the High Plains region.
If we were going to buy more in any of the regions that we, where we sold a lot of properties last November, the place we would go back into is the delta, super high-quality farms in particular, Northeast Louisiana and southeast Arkansas are very attractive. They have many of the characteristics of the Midwest, with a slightly higher current yield.
Now turning to California, California remains an area of concern. We've talked about this in the last, probably three or four at least, if not, a couple of years' worth of conference calls. California has a variety of challenges.
Water being probably the first and biggest challenge, the second being overplanting of many of those crops around the world, and the third being sort of labour challenges as labour and regulatory challenges, particularly in the state of California. What that has done is that's put a lot of pressure on asset values in that region. We think in many cases institutional investors are very scared of that region right now.
There are people exiting that region. So, that's a place in our portfolio where we continue to monitor it. We're not going to be, we're long-term value players. I don't get excited about whether the values up or down in the last 90 days, that's not, every time I read an article like that, I kind of recognize it's written by somebody that doesn't understand the asset class.
Nothing moves on a 90-day cycle in this asset class. So, we're going to kind of monitor, watch it. If we get approached at a fair price on something we own, we'll likely lighten our exposure to California. We're very unlikely to buy additional assets in California right now. But it would lighten up there.
I hope that Rob kind of answers the question.

Rob Stevenson

Yeah, that's very helpful. And I guess the other question regarding deployment of capital is how are you thinking about you guys bought the Ohio deer dealerships. How are you guys thinking about that business and, it's hitting whatever return thresholds that you were looking for and coverage, etc.
And whether or not you would expand and do more of those either in Ohio and or other states or something of that sort of bent going forward to deploy capital.

Paul Pittman

So, a couple of thoughts on that. And I've talked to many individual investors, particularly our largest ones about this, and some of them, frankly, love the idea of doing more of that and some of them hate the idea. So, here's the kind of intellectual challenge when you think about it. One of the problems we face as a company is not enough current income in any given year.
Those assets are solid 6% yield sorts of assets, maybe even 6.5%. in some cases, they're great, current yield tools for us, and we believe, particularly I believe that the long-term appreciation of a John Deere dealership footprint, we don't own the dealership, we own the land underneath in the buildings, as long as you pay fair value going in and fair value is, about appraised value in this case, really not just cap rate on the lease payment.
As long as you pay a fair price for that. My view is that asset is likely to appreciate more or less with farmland or even higher than Farmland. Many of these dealerships are located, at important highway intersections or things like that. There's no reason to think they won't go up as land values go up. The base value of the underlying asset won't go up, as land values in the parts of the United States go up.
So, that would be the, that's the argument to do more of that. We don't have very much exposure to that in the overall portfolio since today. And the counterargument, which is also sensible, it's not the argument I believe in, but it's a sensible argument, is that look, stick to your knitting. At some level, that John Deere dealership is really just a triple net industrial lease.
Don't confuse it with farmland, stay away from it. Both of those things are true. So, to answer your question, Rob, is, I think we might do a few more of those. I don't think you'll see us get into it super aggressively, because, if I was having this conversation with the board and the rest of management. You would have, people in amongst that group of, six or seven people with both points of view that I expressed.
So, I guess as we may do a few more of those if they're particularly attractive, but don't expect us to do a lot of them.

Rob Stevenson

Okay, that's helpful. And then one last one for me for Susan. What is your incremental borrowing rate today? If you had, if you needed $20 million of debt, what would that cost you today and how would you sort of get that? Where's the best sort of pricing and availability to you today? On the debt side and.

Luca Fabbri

Well, let me [chime] in while Susan here kind of pulls up the correct number. You have to look at it in two different ways because we have liquidity that is immediately available to us under the lines of credit. And that's a short term, kind of spread over so kind of rate.
But we can also, if we are to structurally increase our debt again, we would actually use more traditional, kind of loan agreements on three plus years terms that will come at with different interest rate rates and different interest rate exposure risks. Having said that, Susan.

Susan Landi

Yeah, we're right around 6% right now for the incremental borrowing rate.

Rob Stevenson

Okay, that's very helpful. Thanks guys. Appreciate the time this morning.

Paul Pittman

Rob, just I want to connect. I'm not in the same room as Susan and Luca. I want to just connect what Luca said, and Susan said to your question for a second. So, if you wanted to go borrow really quickly, it's right around that 6% rate. If we turned it out, I think we would beat that rate.

Rob Stevenson

Okay, that's helpful, guys. I appreciate it.

Operator

(Operator Instructions)
Buck Horne, Raymond James.

Buck Horne

Hey guys, good morning. Congrats on the great quarter and all the progress last year with the asset sales, great job. Curious if you could just share maybe a few high-level thoughts on some of the headlines and articles that are out there about, the freezing of funding that seems to be going around for the various USDA programs that a lot of farmers had been exposed to and some sort of sort of cost sharing agreements and wondering if that.
If you know if there are any particular tenants or farmers in your portfolio that are exposed to any sort of funding freezes or how do you think that plays out over the course of the year?

Paul Pittman

Yeah, so, Buck, thank you for your kind words and, here's kind of my perspective on that. So, the, when you look at the USDA budget, you got to think about it in two relatively large separate buckets.
The first bucket is SNAP. That's basically food stamps, aid to low income people and food purchasing. That is a huge percentage of the budget. I don't have it off the top of my head what it is, but it's a large percentage of the overall USDA budget.
I think there is a sense in Washington DC under the Trump administration that there needs to be a little bit less of that. Not, nobody wants to be Scrooge, I don't think, but they think there is some waste, fraud, abuse, in that program there, and I'm pretty sure there is. They also think one of the, if you remember back to the Clinton administration, I'm older than most of you on the call.
Bill Clinton got very focused on the fact that that providing a food stamp program forever disincentivizes these human beings to go out and create, a successful and fulfilling life for themselves. And so maybe we need some program changes that make it a short-term safety net, not a forever safety net. And I think those things are coming, back around.
The second bucket of the farm program is, things that are delivered to farmers, and there's a lot of different pieces of that. There's direct payments, there's ad hoc disaster payments, and there's crop insurance. At least to my way of thinking, the most important piece of that is crop insurance. That is a very good program. It is a good program for farmers, but it is a good program for all US citizens.
And the reason for that is that program really cements food security. We are such a productive country in terms of food production that one bad year does not cause a problem in terms of food supply. It causes a little bit increase in pricing, but nobody's going to go hungry.
Where we would have a problem is the United States is if we had two bad years in a row, and what crop insurance does is it lets that farmer who had a really bad year go back and plant again the next year, therefore making sure we have it, don't have two bad years in a row. And so that program is, very good.
Again, in direct payments and ad hoc emergency payments in particular and to some degree in crop insurance, there is, waste, fraud and abuse there.
I'm sure that the current USDA team is going to focus on getting rid of that. I mean, I think everybody in Washington is focused on that, or at least should be. We as a company partly because I was a real farmer for a long time, we just stay away from tenants who are, we think of using the system at all. We don't want anything to do with the tenant who's doing what they call insurance farming.
So, we don't have any of those tenants. So, we just, and we also, are very focused on making sure we've got farmers which have sort of sensible economic, results without regard to government payment on their farms.
So, I don't think anything that's done in that area hurts us in any kind of meaningful way. In fact, it might Help, people like us that have relatively speaking, higher quality land in the highest quality farming regions. Long-winded answer, but I hope it helps.

Buck Horne

No, that definitely helps, and I appreciate the thoughts. I just want to also, I kind of want to clarify maybe I wasn't clear in the question because I was, the intent I think was more thinking through, these inflation reduction Act CapEx projects that a lot of farmers had undertaken.
Putting in a lot of money to, whether it's, doing environmental upgrades or fencing or some other money that they were putting up front that they were going to do a cost sharing arrangement with the government on just wondering if any of your portfolio farms had.
Taking advantage of that program or spend a lot of CapEx money or, it's some sort of financial risk due to, funding being cut back.

Paul Pittman

No, so the quick answer is no. I mean, we as a company do not, incredibly rare circumstance would we ever directly pursue, some sort of government program payment, either by pushing a tenant to get it and share it with us or by getting it directly, although seldom are we eligible, for any kind of directing, so we just don't want to play in that space.
That we just really don't. Now, I mean, to be fair, if you have massive reduction in cash flow coming from the USDA to the agriculture community, it has a negative impact on a large landowner like us, because there's just less capital in that system. But I mean, the impact on us is very muted for the reasons I just explained.
As to the specifics, again, I don't know exactly what the administration the USDA will do, but my sense is that anything that's sort of a pre-existing contractual obligation, a cost share on something, they're going to fulfil the obligation, and that's just a contract. I think it's going forward, will those programs change is, the more relevant question.

Buck Horne

Got you, very helpful. I appreciate that and just one quick last one is, if you could share, kind of what your renewal lease terms in terms of your kind of asking rates on new renewals for this spring or going out at and kind of how you think that plays through for the year.

Paul Pittman

Sure, so on renewal rates, if you look back over the last couple of years, the three-year average on renewal rates is up 12.4%. that is based on incredibly strong renewals in the last two years prior to the 2024 year. 2024 year was essentially flat to slightly down. We had about a 0.8 negative rent renewal rate.
Now we recognize that number is really kind of weird this year because we had, worked our way through renewing most of the rents on those properties we sold. Then we, those were very high-quality properties, we sold those properties so they're not in that statistic.
So, it's kind of a sloppy statistic this year with that selling a 25% or 30% of the portfolio. But yeah, but the big takeaway is really strong rental increases three years ago and two years ago and sort of flattish this year because even if we'd have, had all those properties we sold still in the statistic, it might have been slightly positive, but it wasn't going to be 10% or 12% again.
So, we're kind of like I made the comment about plateau and land values, you got that kind of plateau and rents as well. Now for the coming year I think we're going to be back in a cycle where we can push rent increases again. If you pull up a soybean or corn chart, corn in particular, over the last six months, you've seen a relatively significant increase in corn price, therefore increasing profitability of farmers.
And, when you go out to have that rent roll discussion, particularly in our portfolio, which is very low crop centric. The happiness related to grain price makes that rent negotiation easier.

Buck Horne

Got it. Very helpful guys. Congrats again on all the progress, great job.

Operator

Darren Rabenou, DTR Partners.

Darren Rabenou

Thank you for your comments today following up on you said that you think you can raise rents. How do you think of that in terms of income levels being, hit so badly in the last year? I mean, do you think that's changed going to be changing on a go forward basis?
And I'm asking that because, what can we think about dividends being paid through cash flow versus selling of assets or, historically being able to access the credit markets which, with interest rates this high, I assume you're not going to want to do that. So, where do you see farmers' income, you mentioned that you think farmers' income and corn is going to go up.
Is that more looking forward that income levels have bottoming out given where commodity prices are that and labor and etc.

Paul Pittman

Yeah, so, recent data coming out of the USDA and other places actually suggests that farm incomes kind of climbing back up. That's partly these large direct payments, that were, authorized at the end of last year, but it's also kind of increasing grain prices and that's kind of been. And then, it depends whether you're looking through something, a wide angle lens or a narrow angle lens.
If you look at the narrow angle lens, we're probably a little better than we were last year. But now let's look at the wide-angle lens because that's what's really important. This idea that farmers are on their last legs is just, it's just so overdone.
We are right now in certainly the TOP10 economic return years ever for American farmers. I read something recently that said without government payments it'd be the eight best years ever and with government payments, it's the sixth best year ever.
So, I just, be blunt, I don't care. I mean, I'm somebody who really understands these statistics. Our company understands these statistics. This is just blown totally out of proportion. Farmers are, grain prices are going up, profitability is going up, you'll be able to push rents up a little bit.
Things are grain prices are going down; profitability is going down. You're probably not going to be able to push rents very far, which is the year we just kind of went through.
And so, this is why us as a company, anytime times are good, grab those rent increases while you can, and then, be a little more gentle, in a year where you can, and so that's kind of our approach. So, we think we'll be able to continue to push up rents, to give you context, a long-term average rent increase, 3% or 4% a year, we see a 10% or 12% a year.
Don't think about that as 10% or 12% forever in your model. Think about it as that's making up for the year of zero and so it's long-term average if you're modelling it it's going to kind of 3% or 4% or something like that.

Darren Rabenou

And are you seeing the stress fires coming in into California at all which maybe signals a bottom of the market? Because you know the banks are giving away assets right now. I mean, is that what your kind of looking for?

Paul Pittman

Luca, you want to take this question? I mean, I've thought about it, but you might have thought about it more, so go ahead. I'll talk to you--

Luca Fabbri

Yeah, that's right. That's fine. I'm used to it. The, we see the California Farmland market is still being fairly dislocated. There is a lot of, as you probably know very well, there are lots of properties on the market. There are probably willing buyers that are not, they haven't stepped into the market yet. So, there is a fundamental, misalignment between supply and demand for farmland assets.
That will take probably a little longer to resolve. The, unfortunately the long-term uncertainties there regarding sigma and water availability and so on and so forth kind of remain kind of top of mind for a lot of operators. However, good performance, for example, walnuts have performed better than expected, almonds have performed pretty well in 2024.
We are expecting a little bit of picking up of interest. What we are seeing specifically more than from investors is from smaller operators that had a pretty decent 2024 and now they're now looking to buy little parcels here and there.
We so far, we haven't seen really any big investors swooping into the market to buy in large quantities, mostly because a lot of those investors are already present in in California and therefore, they already feel they have quite a bit of exposure to the market.
But to your specific question, I think we're at or near the bottom, right now, but it's, you never can predict exactly where the bottom is.

Darren Rabenou

Sure, thank you.

Operator

Craig Kucera, Lucid Capital Markets.

Craig Kucera

Yeah, good morning, guys. I'd like to talk a bit about the FPI loan program. You had a pretty sizable increase, in your loans outstanding in the fourth quarter and would just like to get your thoughts on where you see demand. Do you expect to see continued higher demand in that segment?

Paul Pittman

Yeah, we, I mean, it's partly demand, Craig, and it's partly focus on it. As we have shrunk the portfolio, we've done a good job controlling cost, but we are a public company, so there is a floor to, how much we can lower costs, being public is expensive in terms of a board outside legal filing fees, accounting, etc.
And so, we actively, as we got deep into the transaction, we did last, fall and, where we sold such a large portion of the portfolio, we consciously said we've got to reach out and increase loan program.
Obviously not by taking on a tonne of additional risk we hope, but by, making loans at higher at high interest rates and with fees and things like that in a way that helps us on our cash flow, with the sale of so many properties that was important. And so that's what we did and that's what you really see in the numbers, again, we're an asset-based lender.
What we do is we serve a role in the marketplace, where, farmers are often and people who own that land are often very sort of cash poor, but asset rich. Most lenders don't want to touch that. It's not because it's a bad loan, but it's because they are not in a position to own that asset if necessary.
We, on the other hand, are in the business of owning agriculture assets. So, as long as I and our team feel like we're very covered, in terms of collateral value we'll make a loan, and that's what we do. We're not scared of, taking the property if we have to, and so, that's why we're able to kind of expand.
There's just not many people that will take that asset value approach to lending, and the reason when we take that approach, it's not that. The obvious question, how do you get paid back if the guy's cash flow is terrible? Well, the reality is he's got lots of, that borrower probably has lots of assets, and what he's really doing is trying to buy a little time.
You can either sell the asset you lend him money against or sell some other asset and clean up the family business balance sheet, and that's the kind of role we play in the market. And as I said, as long as we've got, good position on the terms of loan to value, doesn't scare us at all, and we can generate, very strong interest rates and fees related to those transactions.

Craig Kucera

Right, I know that that's always been a program you hope to grow more than it had in the past. Just one more for me, has there been any increase maybe an inbound call since the administration change and all the shake-up going on that we've discussed on the call today?

Paul Pittman

Luca, you may be, Luca runs the company on a day-to-day basis now. I don't, Luca, I don't know the answer you have a point of view, express it.

Luca Fabbri

Yeah, we've seen a little bit of an uptick in inbound inquiries related to the loan program. I don't really think personally that it's related to the administration change. It's just more of a, some marginal operators have felt a little squeezed in 2024, and that has increased the need for the type of product that we offer.
Not sure what's going to happen here in the coming months, especially given the fact that commodity prices have kind of bounced back quite a bit.

Craig Kucera

Okay, great. Thanks for the color.

Paul Pittman

Thanks, Craig.

Operator

Thank you everyone, and that concludes our Q&A session for today. I will now turn the call over back to Luca Fabbri, President and CEO of Farmland Partners. Please go ahead.

Luca Fabbri

Thank you, Gail, and thank you, everybody. We appreciate your interest in our company and look forward to updating you on our activities and results in the coming quarters. Have a great day.

Operator

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. Have a nice day, everyone.