Investing in the Future of Agribusiness

Because farm investments are different than stocks, as an investor, I approach them in a different way. While I often value short-term opportunism when considering stock picking, I know that agriculture is ultimately a long-term game. And for me, it’s a great hedge against the volatile financial markets. With farm investments, I look for sustainable operating models and preferably organic plantations. Maintaining a healthy farm season after season requires a deep base of knowledge and attentive care. It has to last, which makes organic management a plus and a stable legal environment a must.

In addition to what it takes to professionally manage a farm, agricultural investment projects require additional areas of competence and success factors: investment and marketing know-how need to come in, access to diverse markets (local and international), and the logistics to get products to their markets should be in place. It needs a highly committed and multi-disciplinary team to bring it all to fruition.

I learned of Panama Golden Pineapple (PGP) in the Farmfolio investment newsletter in early 2018. What I liked most about PGP was the Vergara family’s history. Because projects like this require years of farming experience and so much human commitment, getting to know the people behind the operation is one of the most important aspects of conducting due diligence. The Vergara family does a great job. After spending time on location and talking to them in person, I am 100% confident in the way they understand and conduct their pineapple business.

These interactions with the whole team topped my visit at the Farmfolio PGP operations in February 2019. The best part of my trip was getting to know Oscar, Dax, Paul, and Edna in person. Online Q & A can be helpful for your due diligence, but it can’t compare to actually asking questions and receiving answers from the Farmfolio team while driving around the large site and seeing the fields. This was an impressive experience; I felt really close to the team and the operations. I could see the opportunities that this pineapple plantation will deliver in the near and further future.

The combination of a quite significant minimal investment for a farming project in a former “banana republic” and a load of comprehensive contract documents may be enough to make potential investors balk. Not being familiar with many legal and contractual expressions in a foreign language, it took me several hours to dig through this paperwork—and some courage not to walk away. But the Farmfolio team, in particular, Head of Operations Oscar Baracaldo, did their best to answer all my questions. They helped me see that PGP is stewarded by the generational insights of the Vergara family and offers attractive short-to-long-term profits due to a top-quality product that is in demand in multiple and growing global markets.

Later in 2018, I learned of the diversified opportunities of the Ganaderia Pietrasanta (GP) project—organic coconuts, cattle, teak and more—in Colombia. Finally, at my PGP visit, I met the people that make this all possible. The Farmfolio team is constantly striving to develop their current projects and to discover new, added business potential. They are also committed to cultivating their relationships with investors, like myself, and providing steady updates to keep us informed.

In short, in visiting Panama I saw what I needed to see: steady growth and a promising future. In my book, Panama is (of course) still no Singapore, but the country is on its way up and with the dedication of teams like this, I hope it will be getting there one day.

I have managed my own investment portfolio for the past eight years, and as I weigh a new investment I have learned to look for three key conditions: limited downside risk, reasonable return, and diversification.

While researching agricultural investments, I saw Farmfolio mentioned in Agri Investor magazine and I was quickly impressed by the diversification Pietrasanta offers. Many investments require complete buy-in on one market; that makes the security of diversity—cattle, coconuts, and teak—all the more attractive.

In the agricultural sector, it is important to me to choose products that demonstrate a steady or growing market, that is sourced from a country with a stable government, and are grown in ideal climatic conditions (limited severe weather changes, pests, diseases, etc.).

Panama Golden Pineapple (and Pietrasanta) met and exceeded these expectations. In addition to beautiful settings, it was clear that these projects are maintaining the commitment of the original family farmers. For someone coming in from the outside, witnessing that level of on-the-ground investment and history is confidence inspiring.

A difficult aspect of foreign investment can be the intangible nature of the process. I did my homework before investing (phone calls, photos, videos, internet research), and Farmfolio does a great job communicating through these interfaces, but none of that compares to driving through the fields and getting to see your investment at work. Especially when committing funds for a longer period of time, being able to walk the land and meet directly with those responsible for stewarding my investment is a must.

At the Panama Golden Pineapple farm, Paul Vergara thoroughly answered every question I had. You don’t have to talk with Paul long to realize that he is an expert. He knows the field and is passionate about this business. The farm setting is spectacular, and the fields and plants are very well maintained.

Before visiting the PGP farm, my only ties to Panama were a college roommate who grew up in the country and a brief transit through the canal many years ago. The tour experience was excellent, and getting to share it with another investor was an added bonus.

However, the most valuable part of the whole trip wasn’t meeting with Paul, or even seeing the fields myself, it was getting my wife’s approval. She is a tough critic and has been skeptical of my overseas investments. Having a chance to experience everything firsthand—together—gave us both a much better perspective on the quality of the operation we have committed to.

At Global Investor Academy, we evaluate investment opportunity based on three levels of risk and opportunity: One, do we believe in the industry—i.e. is it good for the 3 P’s: people, planet, and profit? Two, does it solve a problem or provide a solution in a unique and innovative way that differentiates it from others in the industry? And three, what is the management like? Are they creative, open minded, and agile in their approach? Are they aggressive in their innovation and reasonably conservative in their risk & financial management?

We learned about PGP and Pietrasanta from Tom Connell, who we met years back. We have previously purchased other organic farmland in Panama through Tom, and recognize him as a straight shooter we both like and trust. This personal connection was crucial in our decision making process, because I highly recommend that all investors take the time to get to know multiple members of any investment management team so they can fully understand the operations, the financials, short and long term strategy, and exit plan.

Our experience owning organic avocado and mango trees in Panama, as well as a coffee farm investment in Colombia, made us comfortable investing in both regions. We like Panama for farmland due to its plentiful fresh water sources, untainted soils and proximity to the Panama Canal for wide distribution. Colombia has many of the
same benefits as Panama for ag investing; plus, it’s quite a favorable currency position for US dollar holders. We also like Colombia because of the smart, educated, hard working, and entrepreneurial people. It’s definitely a place we’d consider investing in residential real estate in order to live there part-time.

When reviewing Farmfolio’s opportunities, I particularly liked the diversification within the Pietrasanta project. I love to see multiple independent income streams! After spending time at PGP and GP, I found the operators to be knowledgeable and passionate about what they do. I am proud to invest in their business and support
their efforts.

My favorite part about the trip was hands down the horseback ride! Especially when we had to have one of the crew race off on horseback to outrun a motorbike and rescue our drone (which had landed in the road) before it was run over. Thank God, because we got great footage from that day!

I encourage other investors to make the journey to Panama and Columbia, because the thing about real estate (and agricultural projects) is that pictures never quite do it justice. You’ve got to put your boots on the ground and feel the energy of a place to really know it and assess whether it’s right for you. Meet the people that make it happen day to day. You’ll be richer and smarter for having had the experience. And if you can’t…then join Peter & Karen’s Global Investor Academy, and we’ll walk you through the due diligence leg work we do for every deal—including onsite videos with tutorials of the farm operations, interviews with management, and a review of the investment financials.

Make sure your potential investment partners are ethical and transparent in their words and actions, demonstrating transparency and seeking to serve their customers, employees, partners & investors well. And then, by all means…ACT.
Don’t fall into analysis paralysis.

Sincerely,

Peter and Karen Williams

I met Dax and Oscar at Financial Fest in Phoenix, Arizona. While I was very impressed by the virtual reality “tour” of the farm at Ganaderia Pietrasanta they offered that day, a headset and screen pale in comparison to a horseback tour of the real thing. Riding through the coconut groves (alongside my wife in the truck) was the best way to experience my investment firsthand.

Experiencing that commitment in-person is important to me as an investor. The nature of foreign agricultural investments means that money is not under my control and not liquid; because of that, I take precautions, like only investing what I could conceivably lose without changing my current standard of living. But that’s also why it is so important that I have opportunities to talk with the people running the projects so I can judge whether I think I can trust them.

Another feature I look for in a foreign investment, a feature that sets it apart from the usual investment that is based on risk/reward numbers to one that has the potential for also being fun and exciting, is whether it is an interesting concept in a location I would like to visit. The Farmfolio projects check both these boxes. Both Colombia and Panama are beautiful countries and appear to be very stable.

Panama Golden Pineapple Tour

For Panama Golden Pineapple, the partnership with the Vergara family—and their many years of experience successfully growing and selling pineapples—was part of what attracted me to the investment (in addition to the very attractive projected returns).

Listening to COO Paul Vergara’s passion for the business was my favorite part of the visit to the pineapple farm. Paul is very excited about the prospects for getting great returns and the plants were very healthy. He’s also very excited about developing and maintaining a distribution network. I could tell that he expects to be successful, and I am confident that he will be. It’s fun to be partnered with such a motivated person!

For me, the opportunity to visit the farms was the premier reason for investing. I met some wonderful people at PGP and Pietrasanta. To anyone that hasn’t already decided that they want to travel to Panama and Colombia, I’d say they should do it.

The teams at the farms are so welcoming and will make your time a delight. Paul was a wonderful host in Panama, as was Oscar at Pietrasanta. Both countries are so different, in both climate and culture, than what I see in the US.

Experiences like these put a zest in life.
Sincerely,

Tim and Cathy Faust