Greetings, and welcome to the Gladstone Land second quarter earnings and webcast conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Gladstone, Chief Executive Officer and President. Thank you, sir. You may begin.
Thank you, Latonya, for that nice introduction. This is David Gladstone, and welcome to the conference call for Gladstone Land. Thank you all for calling in today. We appreciate you taking time out of your busy day to listen to our presentation. We always start out with Michael LiCalsi. He's our General Counsel and Secretary, and he's also President of the administration side of the business. Michael.
Thanks, David. Good morning, everybody. Today's report may include forward-looking statements under the Securities Act of 1933 and the Securities Exchange Act of 1934, including those regarding our future performance. These forward-looking statements involve certain risks and uncertainties that are based on our current plans, which we believe to be reasonable. Unforeseen factors may cause our actual results to be materially different from any future results expressed or implied by these forward-looking statements, including all risk factors in our Forms 10-Q and 10-K that we file with the SEC, and find them on the investors page of our website at GladstoneLand.com. You'll also find them on the SEC's website, and that's sec.gov. We undertake no obligation to publicly update or revise any of these forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
Today, we'll discuss FFO, which is funds from operations. Now, FFO is a non-GAAP accounting term defined as net income, excluding the gains or losses from the sale of real estate and any impairment losses from property, plus depreciation and amortization of real estate assets. We may also discuss core FFO, which is generally FFO adjusted for certain non-recurring revenues and expenses, and adjusted FFO, which further adjusts core FFO for certain non-cash items such as converting GAAP rents to normalized cash rents. We believe these are better indications of our operating results and allow better comparability of our period-over-period performance. Please take the opportunity to visit our website, once again, GladstoneLand.com. Sign up for our email notification service so you can stay up-to-date on the company. You'll also find us on Facebook. Keyword there is the Gladstone Companies, and on Twitter is @GladstoneComps.
Today's call is an overview of our results, so we ask that you review our press release and 10-Q, both issued yesterday, for more detailed information. Again, go to the investors page of our website to find them there. Now, with that, I'll turn the presentation back to David Gladstone.
Okay. Thank you, Michael. We'll start with a brief note, as I do each time. We currently own over 115,000 acres of farmland in the United States and 169 farms. In addition to that, as some of you will remember, we have 45,000 acre-feet of banked water. That's, acre-foot is equal to 325,861 gallons of water. That pencils out to about 14.6 million gallons of water that we have stored in the ground. Together, those two are valued at over $1.5 billion for this quarter-end. That's both the land and the water. Our farms are in 15 different states, and more importantly, they're in 29 different farming areas.
Farms continue to be 100% occupied and leased to 90 different tenant farmers, all of whom are unrelated to us. The tenants on these farms are growing over 60 different crops. Mostly those fit into fruits and vegetables and nuts. Given the number of different growing regions, tenants, types of crops on these farms, we think we are sufficiently diversified to provide safety and security for the cash flows coming from the rents. We believe that diversification helps us protect the dividends that we pay to our shareholders. As we mentioned last quarter, and we continued to do it this quarter and still doing it today, we are much more selective in the type of farms that we're looking to buy. In light of the uncertainties in the economy, we believe a good time to be more conservative with our capital.
The team purchased five farms of about $60 million this year. From an operating standpoint, it was the strongest quarter we've had in a while. We don't generally have much in the way of interest patronage from our banks, or participation rents during the second quarter of every year. This is a pretty straightforward quarter, for FFO and AFFO per share basis, and it's one of our strongest, second quarters in several years. We continue to be able to renew all the expiring leases without incurring any downtime of any of the farms. For farms in our primary regions, along each of the coasts in the United States, both California and Florida, we continue to execute renewals at higher rental rates. Overall operations on our farms remain strong, and the demand for products grown on most of our farms remains high.
These are products like berries, vegetables, and nuts, and prices of these, like many other types of foods, continues to increase. The latest headline inflation number of 9.1% shocked us all, obviously. It's the highest in nearly 43 years. In the category, though, which is called food at home, that category was up 12.2%. I'm sure those of you who shop at grocery stores will echo that this category is where all of us are just shocked. This category where the crops are grown on our farms falls into that. Most of our crops are sold in what is called grocery stores. That includes a lot of small grocery stores as well as the big ones. Farmers are adjusting to the changes in our economy as many of their input costs are increasing.
First of all, the banks have increased the interest rates on all these lines of credit that farmers have, which they draw down when it's time to plant their crops. They also draw down additional funding from the banks for harvesting costs. Of course, there's all kind of things that they do during the year that they need extra money before they start harvesting. Farmers are also paying much more for fertilizer. It's just outrageous, the price. In some places, what you paid last year is now costing you three times what you paid last year in fertilizer. Fertilizer obviously brings in more crops, but at some price, it's prohibitive. Gas prices are also extremely high, especially out west. Obviously, our growers need the gas in order to run their trucks and tractors and harvesting equipment.
Water costs have increased, especially in the West, but our farms seem to be okay today. Farmers have passed on many of the increased costs to the food sellers like grocery stores, and every family is feeling this extra cost that's driven through the economy. We've slowed the purchases of farms due to worry that inflation will reduce many farmers' ability to pay rent. Currently, we have two farmers who are slow on their paid rent. It's below 3% of our rents. One of them tells us that the payment's on the way. Of course, that seems to be the answer for a lot of the farmers when they get a little behind. It's just slightly behind. This fellow sells almonds outside the United States.
About half of the almonds that are grown in the United States are sold outside the United States. That's the closest thing we have to being dependent on other nations. We have one farmer that was in a catastrophic accident, so his son's working the farm now, but it's coming along, and I think we'll be paid soon enough. In the meantime, we're looking for ways to adjust our overall cost of capital to better match the changes that we're seeing in the farmland acquisition market. Our issues is that our preferred stock and our borrowings have both become expensive for current farmland prices and rents. We have lines of credit. We're not using them.
We've left them all fallow and just no reason for us to draw down money and put it to work if we can't put it to work some spread from what we're paying, to the money that's coming in. We're currently discussing internally a strategy for better managing our cost of capital, and if we make some big changes, we'll be back to you on that. During the second quarter, our team acquired one farm in California for about $25 million. In addition, right after the quarter end, we acquired four more farms in Washington State and Oregon. We paid about $37 million for that. Overall, the initial cash yields to us on these investments is about 6%.
In addition, all of the leases on these farms contain certain provisions such as participation rents or annual escalations that should push that figure higher as we move forward. On the leasing front, since the beginning of the second quarter, we renewed 2 leases, which in total are expected to result in increase in annual rent and operating income for us, so about $179,000 based on the prior leases that we had on the property. Looking ahead, we only have 1 lease scheduled to expire in the next six months, and that makes up less than 1% of our total annualized lease revenue. We're in discussions with potential tenants for this farm, and we aren't currently expecting any downtime on that.
A couple of other items that you always ask about, we continue to monitor the ongoing drought in the West. They had a very nice wet winter out there, but that's about the last of it. Every now and then, they get a little bit of rain. It's very, very dry since then. All of our properties in California continue in the position where the farmer has enough water to complete the current crop year. Of course, we never know what next year is gonna look like, but water remains a premium out West. When I look at the valuations of our farms, and as performed by the independent appraisers, we continue to see a steady increase in the value of the land.
The appraisal value aren't moving very fast, though, as quickly as I would like them to pick up the current prices we're seeing. Really, the problem is that most of the appraisers rely on past transactions. They don't do much with current things that are going on. Their values can be sometimes lagging quite a bit. Regarding the progress of our ESG policy, we continue to work on that, developing formal prices, policies, and related disclosures we consider to be relevant. I just want to have for that to be able to tell our story. Just so you know, several of our farms have solar arrays on them that are used to power operations on the farm.
We recently reached an agreement with a group that looked at one of our farms and wants to put both wind and solar energy facilities on the farm. We always want to be careful that we enter into an agreement that aren't going to disturb our tenant. Well, maybe a small disturbance, but tenant's currently on our farm because that's our primary business partner, is the tenant, not the guy who's gonna put some solar arrays on the property. We're working that and trying to make sure that we can gather more there. There are a lot of folks out there trying to aggregate these, so we get bombarded with letters and phone calls. As mentioned on previous calls, we sometimes come across farmland owners who wanna sell both their farmland to us as well as the operation as a package deal.
As a real estate investment trust, Gladstone Land is limited in its ability to own operating companies, because the operations generate operating income that is very limited in a real estate investment trust. Well, I'm gonna stop here as that's enough on operations, and now I'll turn it over to our CFO, Lewis Parrish, to talk to you more about the numbers. Lewis.
Thank you, David, and good morning, everyone. I'll begin by briefly mentioning our financing activity. During the quarter, we received about $5 million in loan proceeds. Those proceeds are expected to bear interest at an effective rate of 2.89%, which is fixed for the next 5 years. On the equity side, since the beginning of the second quarter, we've raised about $770 million of net proceeds from sales of the Series C common stock. Moving on to our operating results. First, I'll note that for the second quarter, we had net income of about $613 thousand and a net loss to common shareholders of $3.9 million or $0.112 per common share.
On a quarter-over-quarter basis, Adjusted FFO for the second quarter was approximately $4.5 million compared to $6.4 million in the first quarter. AFFO per share was $0.129 in the second quarter versus $0.185 in the first quarter. Dividends declared per share were about $0.136 in both quarters. Primary driver behind the decrease in AFFO was about $2.8 million of interest patronage or refunded interest recorded during the first quarter related to our loans from Farm Credit, and was partially offset by a $1.1 million incentive fee earned by our advisor in the prior quarter versus none in the second quarter. Fixed base cash rents increased by about $320 thousand or 2%, primarily driven by additional revenues earned from recent lease amendments and renewals.
On the expense side, excluding reimbursable expenses and certain non-recurring non-cash expenses, our core operating expenses decreased by about $1 million on a quarter-over-quarter basis. Most of this was driven by a decrease from related party fees due to the incentive fee earned during the first quarter. While G&A expenses increased by about $77,000, this was mostly related to the annual shareholders meeting. Other related party fees and property operating expenses remained relatively flat on a quarter-over-quarter basis. Moving on to net asset value. We had 61 farms revalued during the quarter. These are all via third party appraisals. Overall, the values of these farms remain relatively flat from their previous valuations from about a year ago, increasing by about $500,000.
As of June thirtieth, our portfolio was valued at just over $1.5 billion, all of which was supported by either third-party appraisals or the purchase prices. Based on these updated valuations, and then also including the fair value of our debt and all preferred stocks, our net asset value per common share at June thirtieth was $15.60, which is up by $0.06 from last quarter. Primary driver of this increase was the impact of increases in market interest rates on the fair value of our fixed long-term borrowings. It was partially offset by the impact of preferred equity issuances and ongoing capital improvement projects on certain farms that have not yet been revalued. Turning to our capital makeup and overall liquidity.
From a leverage standpoint and with respect to our borrowings, our loan-to-value ratio on our total farmland holdings on a fair value basis and net of cash was 38% at June 30. Over 99% of our borrowings are currently at fixed rates. On a weighted average basis, these rates are fixed at 3.26% for another 5+ years. With regards to our current debt load, we've fortunately been pretty well protected against the recent interest rate hikes and should be for the near-term future. Regarding upcoming debt maturities, we have about $55 million coming due over the next 12 months. However, about $31 million of that represents various loan maturities, and the properties collateralizing these loans have increased in value by a total of $12 million since their respective acquisitions.
We do not foresee any problems refinancing any of these loans if we choose to do so. Removing those maturities, we only have about $24 million of amortizing principal payments coming due over the next 12 months. From a liquidity standpoint, including availability on our lines of credit and other undrawn notes, we currently have about $135 million of dry powder. That is in addition to $129 million of unpledged properties. Finally, I'll touch on our common distributions. We recently raised our common dividend again to 4.56 cents per share per month. Over the past 30 quarters, we have raised our common dividend 27 times, resulting in an overall increase of more than 52% over this time.
Farmland continues to be a stable asset class and continues to perform well in the midst of all the uncertainty and volatility currently in the markets. We continue to believe this stock offers a compelling investment alternative, and especially in light of today's inflationary and recessionary concerns. With that, I'll turn the program back over to David.
All right. Thank you, Lewis. Nice presentation. As I mentioned before, we're still actively seeking new farms to buy, but as mentioned over and over again, we are being much more cautious in the acquisition front these days. We have some offer letters out to a few sellers these days, and we'll try to continue moving forward with those, but may be a good time to continue to go slow. Just a few final points I'd like to make. We believe investing in farmland and growing crops that contribute to a healthy lifestyle, such as fruits and vegetables and nuts, follows the trends that we're seeing in the marketplace today. Overall demand for prime farmland, growing berries and vegetables remains stable to strong in almost all the areas that we farm in, and particularly including places like California, Oregon, State of Washington, and the East Coast, especially Florida.
Overall, farmland continues to perform well compared to the other asset classes. The NCREIF Farmland Index, which has about $14.6 billion worth of agricultural properties, including all of those that we've listed with them, so that they have ours as well as others in the business, have been averaging about a 12.6% overall return over the last 20 years, with no negative years. As you may know, some of the indexes have gone negative during the year. This is higher than both the S&P index and the overall REIT index, both of which have had three or four negative years, the same time periods of time, versus 0 for farmland index. Please remember that purchasing stock in this company is a long-term investment in farmland. I think an investment in stock such as ours has two parts.
One, it's similar to hard assets like gold. I mean, after all, farmland is mostly just dirt, and that's an intrinsic value because there's a limited amount of good farmland, and it's being used up. I call it used up. It's been taken over by people who are developing houses as well as other properties in California and Florida, where we have many of our farms. Unlike gold, most alternative assets, it's an active investment, which cash flows come into investors. We believe that's better than a bond fund because we keep increasing the dividend as more money comes into us. We expect inflation, particularly in the food sector, to continue to increase, and we expect the values of the underlying farmland to increase as a result. As we expected, this to especially be true in the fresh produce food section.
Trend is more people are eating healthy foods and continuing to grow healthy foods. Now we'll have some questions from those who follow us. Operator, if you'll come on and give instructions how people can ask us questions, we'd appreciate that.
Thank you. We will now conduct a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in a question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star one at this time. One moment while we poll for our first question. Our first question comes from Rob Stevenson with Janney. Please proceed.
Guys. David, where is pricing for farms that you're interested in today versus what it would've been for the same farm last year or two years ago?
It's up at least 20%, from what it was a year ago. It's continuing to go up. Unfortunately, most of the farmers that we bought from in the past, who have wanted to raise money, don't need to raise as much money as 'cause they're just not interested in expanding until they can see which way inflation as well as prices are gonna go. It's a bit of a stagnant marketplace today, but up at least 20%. I think the number and as you well know, we don't do much in the way of corn and wheat and rice, and those farmlands have gone up at least 20%, if you looked at what's going on in Iowa, which is easily the best dirt for farming in the world. Anyway, that's about where we are, Rob.
Okay. Pricing's up 20%, and then, you know, it's tough to see, you know, it's not like apartments or, you know, office or whatever, where there's reliable volume data. In terms of stuff that either has come to market or potentially would come to market if the bid was there, I mean, what are you seeing in terms of, you know, volumes or, you know, availability of farms? If the pricing's up, is availability down as well? Are the farmers holding on to the assets relative to what they would've been years ago? Is there not as much trading right now or not as much that the farmers are willing to sell? How would you characterize the sort of availability of assets independent of price?
Well, if you look at our business, it's different from the business that most people are in when they're in farming. They're in wheat and all the seed areas. We're not in that business, and that one has really taken off. You've probably seen where the amount of wheat and corn is down dramatically in the marketplace, and therefore, prices have gone through the roof. The happy farmers that are farming those products now have money and not as bad as drunken sailors on a Saturday night, but they're out spending money for all kind of things. I guess Deere and other manufacturers of farming equipment are having really good years. The bottom line is these products that we're in don't come up that often to begin with, so we're out talking to the farmers. You have to go.
If you're in Iowa, there's usually a farm or an auction that's going on for the farmland there. If you're in California or Florida, there's not that much in the way of any of auctions. We've been to one that I remember in the last 20 years. It's a fairly dominant marketplace for those who will figure out what might be for sale. That's what we do. We go to the farmers, talk with the farmers, and spend time with the farmers. It's a wonderful place because the farmers are all good-natured people. I think I've met maybe five or six farmers in the last 20 years who I would not deal with, and the others have been good people. We're happy with that.
I think if you looked at what's going on in our particular marketplace, you'd see people just saying to themselves, "I can get more for blueberries, I can get more for strawberries, cabbage is up." All of those products that you'd see in a grocery store produce section have gone up, and therefore, they are waiting to see how high it will go before they get out there and start selling. We've met some of them, and they just want. I don't know. We've seen one farm in California, which we have a lot of places around that farm, just went for over $1,000 an acre. $100,000 an acre, excuse me, $101,000. We've got some of ours valued, at best, 70,000, 80,000 an acre in that area, so you can see the disparity between those.
It's a very interesting marketplace today because you can't get inside the brain of those people who might be selling. We get our best chances when one of our farmers will call up and say, "Joe next door is thinking about selling his farm, but I don't have the money. Would you buy it and let me rent it?" That's where we're concentrating on talking to farmers. I think our guys are on the phone with somebody every day trying to figure out what might come up. When it comes up, there's at least a 50/50 chance that it'll be priced in a way that we won't be able to compete because our cost of money is too high, and we have to wait for it to come down.
There was one guy in California that I worked with for a good 10 years trying to get him to sell. Finally, I mean, this sounds harsh, but he died and his sister sold the farm to me. It's a different area. People buy land, whole land, and if you know the story of California farmers, many of them have been on the farm there for two or three or four generations, and some of them are really complicated. We have a couple of farms that I'd like to buy, have as many as 20 people that own a piece of it, and you can't sell it till everyone agrees. Trying to get 20 people to sign off on a sale is just very, very difficult. We're around, and of course, this is a forever corporation.
There's no reason for us to have to sell anything we have. We'll be there when the time comes. Most of the farmers in the farming areas that we're in, as I mentioned before, we're in different farming areas now. They all know who we are, and they know they test us out from time to time. "What'll you pay for the farm now?" We give them a number, but they're just not willing to sell. Most of them are just sitting back and enjoying the rents that are coming in, but others are ready to sell. I remember years ago, I bought a farm from a mother and father who were in their sixties and had two children that were part owners of the farm.
The children didn't want the farm, and they told mom and dad, you know, "Sell the farm and enjoy the money now." We bought it, and it has been a very nice deal for us. They had been renting out the farm. They weren't actually farming it. We look for those opportunities. We know of some that are out there. We've priced things to people, and sometimes they're just testing to see what it might be worth. We're active in the business. As you know, we have a full staff in California, a pretty good group of people in Florida. As a result, we're in touch with a lot of the people there. I can't give you, Rob, I just can't give you much in the way of what a farm would go for today, but we're buying them.
We spent $37 million at the end of the year to buy farms in the state of Washington and in Oregon. We're out there, we're buying, and if it comes up for sale, we usually get word that it's gonna go. That's the best I can do to give you a heads-up on what we might be able to close in the rest of the year.
Okay. Then given your comments being about being more cautious today with acquisitions, are there certain crops or geographies that you were happy to buy last year or even in 2020 that you probably wouldn't be as interested in today?
No, there's every crop has its own statistics with it. As long as it falls in those areas of that statistics on how you grow that crop and sell it, we're interested. We haven't said, you know, "No more of this," or, "No more of that." We are getting a little heavy in some of the nut crops. I don't wanna be a nut business, but it's a good business as well. The bottom line is, no, everything's on the table. We want to be in the areas where they grow a lot of strawberries and vegetables simply because we know that business very well.
We're not in Kansas trying to grow strawberries, even though they could grow strawberries there, but the season is maybe 3 weeks long and growing strawberries in Kansas, whereas it's 9 months in California. The bottom line is, every one of these deals that we do has its own peculiarities, and you just have to look at it, analyze it. We've got some good people that can do that. There's nothing off the table right now other than I don't wanna be in Texas, don't wanna be more in, some of the other grain crop areas. We're not grain people.
Okay. The last one from me. You guys have talked about in the past and in business updates about, you know, adding wind turbines and solar panels to properties. Are those generally going on undevelopable land? Is this in place of crops? How should we be thinking about how that sort of fits in? Are these just on the roofs of barns? How should we be thinking about when we see you guys putting wind turbines or solar panels up? Are they in lieu of a crop in a field, or are they on land that would not otherwise be developable for crops?
No, everything is. For example, we do wind turbines. You have to put a wind turbine where the wind is, obviously. It blows pretty steadily. We have some farms in the Midwest that are very windy, and we get calls from a lot of the power generating people that wanna put turbines up. It's fine. You can build a turbine, and if you get the tall ones that are a couple stories tall, it's okay. It works. You kill a lot of birds unless you get up around three stories. As a result, we're not very happy doing short turbines. We've got a turbine company that wants to put probably a dozen turbines at the top of the hill on one of our farms.
They're willing to pay us, I think it's $350 a month. Is it or a year?
$332,000 per year.
32,000?
$332,000 per year.
$332,000 to save the place for them to put the turbines up. We haven't even dusted the dirt out of the way for them to put the turbines up. It's getting to be a very telling area. In New Jersey, the government subsidizes all of these things, and they finally had to pass a law that says that you can't do that anymore for farmland. We want them to grow farmland products 'cause they were taking the farms and just putting, I mean, they were everywhere. There was no room for a crop. We're in New Jersey, and we have crops in New Jersey. We grow strawberries in New Jersey, if you can believe it, and blueberries. But after all, it is the
Garden State.
...the Garden State of New Jersey. Anyway, great place. I think at the end of the day, when you look at these turbines and all of those are wonderful ways to capture the wind and capture the sun. They're not gonna take over for quite a while as a mainstay for us or anybody else to generate electricity. Not much I can say other than that, Rob.
Okay. Thanks, guys. Appreciate the time.
Okay, we can hear question number two. Anybody?
Our question comes from Edward Riley with EF Hutton. Please proceed.
Morning, guys. Sorry, just some housekeeping. How much of your debt did you say was variable versus fixed?
Now, almost all of our debt's fixed. Isn't it, Lewis? What did you say?
99.98% of it is fixed on average for a little over five years from now.
Okay. Gotcha. Wondering if you could give us an expectation for participation rents this year versus last year that you expect.
If I can believe what we're being told by all the farmers and the people who are following them, it's gonna be up substantially.
Okay. I just wanna dig in a little bit more on that question. Do you know how many more farms you have with participation rents versus last year?
I forget how many we had last year. I think we have about 40 farms that have participation rent components. I'd have to go back to the 10-K to see what it was for 2021. As Lewis said, we are expecting to be up, and that's largely a factor of a lot of the farms we purchased recently. You know, they're either coming into full maturity or that participation rent component is now coming online for the first time this year, or just it's a lot of that driver is just the pure number of acres and farms that are falling into that participation rent category. I think the number is 40 as of today.
Okay, thanks. When you're talking with your farmers, how do they mention their expectation for harvest yield this year versus last year? Is it roughly the same or lower or?
I think it's about the same. There's not a huge amount of difference from last year.
I think it's a little bit higher.
Well, what's higher too is we have more farms this year than we had last year, so that's adding to the increase. I don't know, Ed. It's a guessing game we play every year, and you never know who's gonna have a big year and who's not. I can say that the guys in the grain side. There's a huge increase this year in corn and wheat prices, so they're gonna be really happy. Many of them have already sold their pieces of their crop. They sell 60, 70% of the crop before they even know it's out of the ground. It's an interesting business from that side. We don't have anybody doing that. They're not selling 20% of their strawberry crop in the beginning of the year.
We've done some of that over the years, but it's a different game and so we stayed away from it. I don't think there's any way to predict how many I mean, sure, if we were having a drought like they had in the thirties, you could say we're gonna get nothing. Right now, with all the irrigation equipment we have, and we don't buy unirrigated farms, so as a result, if you've got water and decent dirt in California and Florida, you're probably gonna produce a pretty good crop. It's a given. We think we're gonna be at least as good as we were last year. We may be a little bit better. We should be better in the sense that we've got more dirt than we had last year.
Okay, great. That's it for me. Thanks.
Okay. Have we got a third question?
Our next question comes from John Massocca with Ladenburg Thalmann. Please proceed.
Good morning.
Morning, John.
Maybe going back to the wind turbines and solar arrays, I mean, how big is the opportunity set for similar deals to the one in Colorado? Is that something that could kind of add a little bit of incremental rents beyond that transaction, you know, a quarter here, a quarter there?
If the power company comes in, they'll rent the whole farm, and we'll make much more money than we would growing something on the farm. It's an opportunity. You just don't have power companies like those that have a lot of money in their system that can do stuff like that. But a lot of people know that they've got to have wind and solar done in order to pass the test from their stockholders, 'cause stockholders, at least some of them, are demanding that they move in that direction. We are getting better deals than we got two years ago, and I think it'll keep going that way. Probably cover the whole nation with wind power one day. We'll be like the guys in Europe who are putting up all of those things.
Anyway, John, there's just no good way of knowing how many wind turbines we're gonna be able to put up, and I think quite frankly they'll put more wind turbines up off the coast, you know, like in Massachusetts, where you can see them from the beach. People are excited about that. I think it's gonna be a while before we get a lot. I don't know what it is. What is it, 9% now that we've got wind or solar that's producing for us? Of course, we're one of the few nations that do that kind of stuff. As a result, there's other countries where they're still burning lots of coal, like China. I think they open up a new coal mine every week.
As a result, I don't think we're gonna do much for the world in terms of, shutting down the use of, all of these things that put so much dust in the air. I wished I could give you better outlook. We debate it every now and then, especially when somebody comes in and wants to take one of the farms and put stuff up. I mean, you can farm right up, right up against it, so there's no problem with, pushing out the farmer. They like the idea that the farmer's gonna stay and continue farming, and they're gonna just pick up the wind. It's a question that comes up a lot for us now.
Do you need farmer or tenant consent to put these projects in if they're at you know already leased properties?
Oh, sure. You gotta go talk to your farmer before you drive big trucks in and haul in, and you gotta have ways of putting those things up. Usually they can do it in an off-season, so it doesn't disturb them. That works. During the season, unless the wind is really making a lot of racket with the windmills, it's nothing. You don't wanna put them too close to houses because people don't want the noise. It's a developing area, and like all development areas, we don't know what's gonna happen. We know there continue to be pressure to move more and more toward those, and hopefully we're the beneficiary of that.
Okay. In terms of, you know, lease expirations, particularly looking into 2023 at this point, what are you seeing in terms of rent versus kind of, currently in place rent, just especially given some of your comments on, farmland values and, you know, crop inflation, et cetera?
I think we'll get many more increases than we will decreases. As a result, I think you should be bullish on that area of increasing rents.
Okay. That's it for me. Thank you very much.
Okay. Do we have another question?
Our next question comes from Tony Dibon, a private investor. Please proceed.
I'm sorry. My question was previously answered, so I have no further question. All right, Tony, if you don't have any questions, we'll move to the next one.
Mr. Gladstone, there are no further questions in queue at this time. I would like to turn it back to you for closing comments.
All right. Well, thank you all for calling in, and go out and buy lots of strawberries and blueberries and eat lots of vegetables. Don't forget the nuts, 'cause we need all the help we can get. Help us from that side as well as buy some more stock. That's the end of this presentation, and we'll see you next quarter.
Thank you, ladies and gentlemen. This concludes today's teleconference and webcast. You may disconnect at this time, and have a great day.