David Gladstone, chairman, president, and CEO of Gladstone Land Corp. (Nasdaq: LAND), participated in a video interview in conjunction with Nareit’s REITweek: Virtual Investor Conference (held June 2-4).
Most of Gladstone Land’s farm tenants are selling to grocery stores rather than restaurants, schools, and institutions, the CEO explained.
“Our farmers have risen to the occasion and they’re shipping, their prices are up, so they’re very happy,” Gladstone said. At the same time, the REIT has received 100% of rents. “Our farmers seem to be in great shape,” he added.
Produce prices have gone up “pretty dramatically,” Gladstone said, and are now about 10% higher than normal. He said prices are likely to remain elevated until the economy has more fully reopened.
Meanwhile, Gladstone said organic produce will play an increasingly important role for its farm portfolio.
“We’re very heavy in organics, we like it, and I think more and more farmland will convert to organics,” Gladstone said. He noted that California, a state where Gladstone Land is particularly active, has a regulatory environment that encourages organic farming.
Gladstone also commented on the long-term relationships built between its farm tenants and supermarket chains. Those relationships are well-established, and while there have been a few new entrants during the crisis, “we don’t give up our position easily.”