Assertion Not checkable as stated
Philpot: AgAmerica has completed thousands of transactions with zero loan losses
“For us, I mean, we've done thousands upon thousands of transactions taking back three properties REO. I haven't lost money on a loan, knock on wood, but three loans REO.”
Insight
Philpot: Institutional farmland investors struggle because top operators own their land
“It's hard to get a high-quality manager in farming that doesn't already own a farm. Your best farmers own their own farm, own their own asset, and so you've got a labor problem.”
Insight
Philpot: Ag lenders cannot use a loan-to-own strategy due to reputation risks
“If you're going to be in this business, you cannot be a loan to own shop. I mean, I intuitively knew that. You know, you go into a rural area and you treat a farmer in that area bad, you'll never do business there again.”
Assertion Partly supported
Philpot: Farmland has one-third the volatility of commercial real estate
“Agriculture real estate is so stable. It has one third of the volatility of commercial real estate. Over a long, long period.”
Assertion Partly supported
Philpot: Farmland real estate has a 97% correlation with inflation
“Has a 97% correlation with inflation.”
Prediction Not checkable as stated
Philpot: A-quality farmland will appreciate more over the next 30 years
“The A quality dirt always holds value and becomes more pronounced in its value with the time as we move forward the next 30 years, we think.”
Assertion Partly supported
Philpot: Only sub-50-acre and 2,000-plus-acre US farms are expanding
“And there's two farm categories that are expanding and everything else is shrinking. Farms, 50 acres and smaller, that category is, is increasing, and farms, 2000 acres and more is increasing.”
Insight
Philpot: Precision ag and cover crops take 3-5 years to pay off
“Both the precision ag with the fixed costs and the cover crops and no-till practices before you see the return on that can take three to five years. And to survive, farmers are having to do that. They just got to get bigger.”
Insight
Philpot: Operational and producer risk is the primary threat in agriculture
“The biggest risk would be operational risk. Either if you're leasing out the property, the tenant ends up being not so good, or if you partnered with a farmer that they end up not being a good producer.”
Insight
Philpot: U.S. crop insurance establishes a floor against weather and price shocks
“We've got a great crop insurance system here in the U.S. That has really grown and been developed the last 30 years since the eighties, and that program covers you for major drops in commodity prices, but more importantly for weather events. And so there is a …”
Insight
Philpot: Farmland is surprisingly liquid because neighboring farmers buy available parcels
“You think, oh, it's rural America, there's not buyers, but a good parcel of land a farmer wants to sell it rarely gets to a realtor. A lot of times it's being sold to the farmer next door, and they've got, they know someone that's going to buy it. So first off…”
Insight
Philpot: Short-term leases stop tenant farmers from adopting sustainable agriculture practices
“If you're a farmer and you're leasing a farm, that's a short-term lease. I mean, all of these leases, it may be a ten-year lease, but there's a ninety-day eviction clause in there in case the landlord wants to sell, and so it doesn't induce the farmer into tak…”
Assertion Contradicted
Philpot: US has more navigable waterways than rest of world combined
“We have more navigable waterways than the world, rest of the world combined, and so we have the ability to move it around.”
Opinion
Philpot: AgAmerica's top bottleneck is finding finance talent to interface with farmers
“The ability to find high end motivated talent That wants to interface with the farmers, probably the number one challenge.”
Assertion Supported
Philpot: Bank share of agricultural real estate debt dropped from 40% to 30%
“15 years ago, 40% of the loans in agriculture, real estate were held by banks. We're down to about 30% now, and we continue to drop.”
Assertion Supported
Philpot: Farm Credit System co-ops hold about 50% of the agricultural loan market
“About 50% of the market are the co-ops, the farm credit system, and that stayed solid.”
Assertion Supported
Philpot: 60 to 70 US ag co-ops cannot lend outside their geographic areas
“So there are between 60 and 70 of these co-ops scattered around the U.S. Those co-ops cannot lend outside of their geographic area.”
Assertion Supported
Philpot: AgAmerica is the only nationwide agricultural mortgage REIT
“We're one of the Only lenders across the lower 48 and the only mortgage REIT in America that it's in agriculture.”
Assertion Not checkable as stated
Philpot: Half of AgAmerica's borrowers are currently of retirement age
“We have about half of our farmers now are retirement age.”
Assertion Supported
Philpot: The US lost several hundred thousand farms over the past decade
“Last 10 years, we've lost several 100,000 farms in America.”
Assertion Supported
Philpot: Institutional capital ignores the $3 trillion family-owned farm market
“97% of the farms are family-owned. There's really not a lot of institutional coverage in agriculture like in the other sectors of real estate, especially for a three trillion dollar real estate market.”
Assertion Partly supported
Philpot: US farmland acreage has dropped by about 30% since 1950
“Since 1950, we've dropped the number of acres in America in farmland by about 30%.”
Assertion Supported
Philpot: 30 million timberland acres changed hands in southeast US across 1990s-2000s
“During the nineties and early 2000, there were thirty million acres that changed hands in the southeast US.”
