New Turnkey Agriculture Investment In Panama Plays To Big Supply Gap
We are in the midst of a boom in demand for organic foods…
And it’s just getting started.
The agricultural group in Panama that we’ve been working with for the last four years is just barely able to keep up with this demand.
They have either sold out or closed out all of their active plantations that were available to individual investors in 2017.
These included all of the avocado and mango plantation opportunities previously available. Those that did not sell out to investors were closed to future investment.
Yes, that’s how much the development group behind these turnkey organic agricultural offerings believes in the product: They chose to keep any balances available themselves.
Meantime, we have worked closely with this group over the past few months to help conceive a next opportunity…
New For 2018: Organic Opportunity Earns You
17.8% Annually
I’m writing to you today to alert you first to this group’s next plantation: Rainforest Limes.
Actually, the group offered a Rainforest Limes plantation back in 2015.
That offer sold out to our Live and Invest Overseas readership in less than three weeks.
That plantation will begin producing fruit next year.
Meantime, the developer’s buyers are asking for more limes than that first plantation will produce… hence this latest opportunity.
The 2015 plantation required capital of US$39,000. The plan was to increase the price to US$44,000 after two months of sales.
However, that price increase was never implemented because the plantation sold out so quickly.
For this new lime plantation, the developer has agreed to maintain the original (now 2-year-old) launch price of US$39,000 (plus closing costs).
However, this price rollback is in place for the first 100 hectares sold only.
After that the price will go up to US$44,000 (plus closing costs).
Again, the last time limes were available to our readership, they sold out in about three weeks. We expect the first 100 hectares of this plantation to sell even faster.
A Perfect Storm—Booming Demand And National Shortages
The group we’re working with continues to create new plantations based on what their wholesale fruit buyers in the United States are requesting.
That’s how they decided on the first Rainforest Limes plantation in 2015, and that’s why they’re planting more today.
The buyers want more limes. Specifically, organic limes.
Greening (that is, a fungus attacking citrus crops) is causing shortages of limes in the United States…
Meantime, demand continues to grow, especially for organic limes. Lime consumption in the United States has increased tenfold since 1980, according to the USDA, and lime prices have doubled since 2014, thanks to the reduced supply and the growing demand.
Demand is so great and supply so limited that wholesale buyers in the United States can’t source what they need today and want to put in place a more secure source for the future.
In other words, the developer already has a limes buyer… they just need to grow limes.
That’s where you come in…
Turnkey Cash Flow For Decades… This Model Is A Win-Win
The business model that this developer has implemented so successfully—whereby individuals own their own small farms with turnkey management—has helped the group’s produce business to grow significantly over the last four years.
Most countries have many small producers of fruit. These individual farmers sell to processors who export the fruit to various markets.
Historically, however, Panama has not had these kinds of small producers.
This developer recognized the opportunity gap and filled it.
The model the developer conceived and developed allows for rapid economies of scale that can supply the volumes being demanded by the marketplace (wholesale fruit companies in the United States and Europe).
As with all this group’s previous plantation offerings in Panama, you own the land and the trees. The developer prepares the land and plants the trees, then the plantation is handed over to the management company, which cares for the trees.
The lime trees start producing in year 4, with production jumping in year 5 and increasing slightly each year thereafter until year 10.
The annualized ROI (or IRR) projection over the first 30 years of the plantation is 17.8%.
Once cash starts flowing, the projected annual yields start at 15.1%.
I’d call that excellent cash flow… ideal as a supplement for retirement.
The developer has successfully offered more than a half-dozen plantations in Panama to individual buyers. They have their systems down for clearing and planting the land. They have a track record.
And they have buyers lined up for the harvests from this lime plantation, even though the first crop won’t be available for four years.
Meanwhile, the farm management company continues to speak with other buyers from around the world.
What Are The Risks?
For any investment like this one, you should consider location risk and crop risk.
In this case, the location is Panama. In my mind, that’s not a risk… but a plus.
Panama has suffered some bad press over the last year thanks to the unfortunately called Panama Papers, but that has to do with offshore industry, not the country itself.
The country of Panama remains stable and forward-looking. Panama continues to grow and prosper thanks to its position on the map, and it continues to put all its Canal cash to good use, investing aggressively in its infrastructure and future.
I am more bullish on Panama as an investment market than ever.
That leaves crop risk.
The limes being planted are a variety of a Persian lime that is resistant to disease and pests thanks to its thicker rind. However, the developer will replant any trees that die in the first 10 years.
Furthermore, as this is an organic farm, the conditions that have allowed for the greening effect that has hit Florida farms don’t exist.
Agriculture and productive land investments have been my focus and my overriding recommendation for the past decade. This is the smartest play in our world today for generating a cash yield.
The very big downside typically, historically, is that you have to invest in and farm your own plantation. This is your chance to invest in a turnkey opportunity where you own the land and the trees… and someone else manages the farm and the harvests for you.
Again, the first 100 hectares of this latest lime plantation are being offered at US$39,000. Once those 100 hectares are gone, any future plantations will be priced at U$44,000, at least.
Lief Simon
