Farmland Partners REIT Falls to New 2022 Low

Is farmland an inflation hedge? Owners of Farmland Partners Inc. (NYSE: FPI) think so.

Unfortunately for them, it’s not working out right now as the real estate investment trust (REIT) has fallen from $16.25 in April to its current price of $12.59. That’s a 22.5% loss in just five months – more than the rate of inflation, annual or otherwise.

Farmland Partners owns “quality North American farmland” and provides loans to farmers secured by farm real estate.

The company owns approximately 155,000 acres in 16 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina, South Dakota and Virginia .

Farmland Partners oversees 26 crop varieties and has more than 100 tenants.

An insider recently bought stock in the company: Thomas Heneghan, director of the firm, picked up 708 shares. Purchased at $14.10 per share on September 23rd. That’s not that many shares when you consider that 1,335,383 shares are now his total ownership of Farmland Partners.

The REIT pays a 1.86% dividend.

Here is the daily price chart for Farmland Partners Inc.:

This week, the REIT pared its June and July lows just above the $13.25 level, a previous buying support area. With that level breached, sellers have clearly taken control, which is not a good sign. It could be a positive sign that buyers showed up on September 27 at the $12.25 area and that the relative strength indicator (RSI), below the chart, is now signaling oversold.

See also: This Well-known Small REIT Has Produced Double-Digit Annual Returns For Five Years

For a slightly longer term view, here is the weekly price chart for Farmland Partners:

The picture is bleaker here as the relative strength indicator and moving average convergence/divergence indicator are showing negative divergences in relation to price. If Farmland Properties continues to sell off, the next support level appears to be January 22, $10.50.

Interest rate hikes by the Federal Reserve are felt in this sector as higher mortgage rates are likely to lead to fewer loans. As less farmland is expected to be purchased, underlying property values ​​may not rise.

Read next: New Farmland Investment Offer For 390-Acre Forage Crop Farm In Idaho

Charts courtesy of StockCharts

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