Dax Cooke’s 04/24/2017 CEO Update
I just returned from the farm and I can tell you that I have never been more excited and confident about this project. When Farmfolio started, I knew that we had the potential to change the world. This week, I saw it happening right before my own eyes! This wasn’t a typical visit to the farm. I wasn’t the CEO of Farmfolio this week, I was a farm hand! I planted coconut trees, participated in teak thinning, herded cattle, and even played in the local softball game. Experiencing this angle of our project from a local prospective opened my eyes to the impact that we have on the community in which we launch projects. The people are excited, they are working together as a team, and they are proud to say they work for Farmfolio. They are even talking about “The Process”, which would make even Coach Saban smile! Colombia has endured some very difficult times and 99% of the people in the country had nothing to do with the violence and problems of the past. Perception and reality are two very different things. The future for our project and this country are tremendous. I truly believe this project will be a model for change and I am certain that it won’t be long before Farmfolio is recognized internationally as way to transform poor rural communities into productive and skilled societies. I want each of you to know that you have invested in something that will not only be very profitable, but your investments are changing lives and creating a future for many!
Ok, now on to the business…
Coconuts are in the ground! We have been working 9 months for this day. Throughout the last 2 weeks, our engineering team has staked the locations for each plant and has been digging the holes. Therefore, we began planting on Monday, March 27th, which was 2 weeks ahead of schedule. We are planting approximately 300-400 coconuts per day, which means the first 50 hectares will be complete by April 17th. The wells are also being finished this week, which means we can begin the irrigation setup shortly after. We struck water at approximately 60 meters below the surface, which, according to our well’s expert, means there is a large reserve of underground water. Based on his report we should not even need the reservoir to support irrigation. However, we are continuing with the planned reservoir as a backup water source.
Per the recommendation of our coconut expert, Germain Terazona, we decided to finalize the spacing of our trees at 8 meters by 8 meters in a triangular planting shape. With 250 hectares to plant, we are going to end up with approximately 43,750 trees. We anticipate that each tree will yield more than 150 coconuts annually, which projects to 6,562,500 coconuts per year! The current domestic price of whole coconuts has increased to 2,200-2,400 Colombian Pesos (COP), which is approximately $0.75-0.82 USD. I would like to remind everyone that we projected a price of 1,000 COP or $0.30 USD in our original estimates and we are still going to keep those projections in the valuations for the time being.
The initial designs of the employee housing and new administrative offices have been completed and approved. We opted to go with the containers instead of building a permanent structure. We did this for two reasons. First, retrofitted containers provide us the opportunity to use sustainable materials at the ranch. Second, we may want to expand or move the location at some point in the future and this design provides us the opportunity to do just that. The compound will be comprised of four, 20-foot containers, which will have an administrative office, four bedrooms, and two bathrooms. Delivery and installation will take place by mid-march.
During the month of March, we have experienced early rains, due to a La Niña year here in Colombia. This has sent the cattle market into a buying frenzy driving per kilo price up to 4,700 COP at the auction houses. This has been great for sales prices during the month of March. However, it has also raised our purchasing price. The local market is anticipating a sustained price above 4,500 COP and we plan to purchase 400 animals per month over the next several months. Our strategy is to dollar cost average into the market. We have liquidated all animals weighing over 280 kilos, leaving us with a current count of approximately 500 head. Finally, we plan to have one more cattle sale before declaring our first dividend.