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Price Increase Imminent For Mango Investment In Panama

Turnkey Agricultural Investment In My Favorite Safe Haven Earns Up To 30% Per Year

With drought in California, food prices in the region are rising.

This current crisis will pass, but it helps to make the point: An investment in agricultural property is a better idea every day.

I’ve been strongly recommending you make productive land part of your investment portfolio for more than five years now. My preference (and beat) is land outside the United States in locations where water sources are more secure and more stable than in places like the Southwest United States.

Panama qualifies. I’ve invested in timber in this country and, more recently, mangos.

I’ve recommended this mango opportunity to you in the past. The developer has been busy over the past four months preparing the land for planting. These are serious guys proceeding carefully and meticulously. Their plantation preparations have included sending up a drone every week to map the land to ensure they’re getting the drainage slopes right.

The next step is to put the trees in the ground. This works begins tomorrow.

Now that they’ve reached this important phase of development, the developer is planning a price increase. I’m writing today to let you know that I have talked them into postponing this for Live and Invest Overseas readers. I believe this is one of the best agri-land investment opportunities you’ll find right now, and I want to be sure you have a chance to get in on the ground floor, so to speak.

I also, as you know, recommend that you buy what you see…meaning you should, if you can, come see this organic mango plantation for yourself. The developer is offering a tour of the property in September and have agreed to hold current pricing for Live and Invest Overseas readers through the dates of that tour.

One key risk in any agricultural project is implementation. In this case, at this stage, this risk has been minimized significantly. With planting underway, you can have a higher degree of confidence that your trees will be planted according to the contractual timeline.

Another risk for any agricultural project is water, as I’ve mentioned. Farmers in California are having a rough time right now thanks to the prolonged drought. Panama is in the tropics and enjoys significant rainfall every year. Nevertheless, the developer here chose for his mango plantation land with several rivers running through it, including a river that runs year-round, even through the dry season. They have the rights to take as much water from it as they need.

Market risk is something else to consider with any turnkey project. With an agricultural project, this translates to: Who is going to buy your product?

Mangos are the most eaten tree fruit in the world. The market is large. That said, the tropical fruit markets in the United States and Europe could be considered in their infancy…but expanding big time. The USDA’s figures for mango consumption between 1980 and 2012 show an increase of a staggering 896% (from 0.25 pounds per person to 2.49 pounds per person, on average), and the demand continues to grow. In 2013, mangos made up 39% of this market.

Not all mangos are created equal. The agricultural partner of the developer behind the plantation in Panama has created a variety of the fruit that has more meat and is naturally sweeter than most any other mango you’ll find.

A quality product and a big and growing demand aren’t a guarantee that you’ll be able to sell your inventory, right? You have to have access to buyers. In this case, the developer already has a 350-hectare mango plantation in production and is selling those mangos to juice companies in Panama. These same outlets have said they’ll take as many additional mangos as the developer can produce. Right now those juice companies have to import the vast majority of their mangos for processing, which is far more costly than buying locally grown fruit.

While having that ready-made outlet available is great, it’s not the most profitable strategy. Therefore, the developer is in discussion with several groups in the United States, from dried fruit wholesalers to grocery stores, lining up contracts for selling your mangos directly into the U.S. marketplace where they would be able to charge substantially more than the local Panama juice companies are paying.

Selling directly into U.S. markets would mean a more profitable operation; however, the financial projections the developer has put together are based on selling at local Panama prices. In other words, the projections are conservative. Using those numbers, the projected annualized yield (or IRR) through 15 years (although the project will produce for 60 to 80 years) is 16.52% at the current investment price. The mango trees don’t start producing until year four, but, when they do, the annual cash flow is very healthy. By year five, when the trees are fully producing, the yield on your original investment is projected at 30% per year.

The investment price is US$33,500 per hectare right now. The developer hasn’t finalized the plan for the coming price increase, but it will be at least 10%. As he’s sold out phase one already and has started selling phase two, it’s been a tough conversation to persuade him to hold the original launch price for a couple of months more for Live and Invest Overseas readers. But, as I said, he has agreed.

If you’re interested in an agricultural investment and like the idea of mangos or Panama, now is the time to take action.

You can find out more here.

Lief Simon

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