Company: LANDO
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001495240-25-000028
Chunk: 61

Company: GLADSTONE LAND Corp
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 1
Chunk 61
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4%.  In addition, the U.S. Department of Agriculture’s August 2025 Land Values Summary reported that nationwide farm real estate values increased 4.3% year-over-year, while cropland values rose 4.7%.  These data suggest that farmland values continue to appreciate, though at a more moderate pace than in prior years, with inflationary pressures continuing to be reflected in land valuations.  While elevated input costs remain a concern for farm operators, we believe these costs are being partially mitigated as long as food prices continue to match or exceed the broader inflation rate.

Interest Rates

The Federal Reserve (the “Fed”) recently resumed monetary easing, lowering the target range for the federal funds rate by 25 basis points in each of September and October 2025, bringing the range to 3.75% to 4.00%.  These actions marked the first sustained rate-cutting phase since 2024 and reflected the Fed’s effort to support slowing economic growth while maintaining flexibility in response to persistent inflation pressures.  Benchmark yields have declined modestly in response, with the 10-year U.S. Treasury yield recently fluctuating around 4.0%, compared with levels consistently above 4.4% earlier in the year.  Although borrowing costs have eased somewhat, credit availability remains selective, and long-term spreads continue to reflect lender caution.  As a result, while financing conditions have improved relative to a year ago, access to debt on favorable terms remains uneven and continues to limit our ability to pursue new farmland acquisitions.

Currently, over 99.9% of our borrowings are at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate of 3.39% for another 3.0 years.  As a result, our existing debt portfolio has remained largely insulated from recent interest rate volatility, and we believe we are well positioned to withstand a potential prolonged period of elevated interest rates.

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Tariffs and Trade

Ongoing trade tensions and the implementation of new tariffs continue to introduce uncertainty into U.S. agricultural exports markets.  Certain crops grown on our farms, including almonds and pistachios, are particularly exposed to these risks, as approximately 60% to 80% of U.S.-produced almonds and pistachios are exported annually.  In contrast, crops with strong domestic demand, such as fresh produce (including berries and vegetables), are generally less affected by trade-related disruptions.

Although international trade developments have influenced sentiment in