COVID-19 / April 15, 2020

Q1 Update: Confronting COVID-19 Challanges

A Message from our Founder,

When I began this Farmfolio journey 5 years ago, a core tenant of my thesis was the common-sense idea that human beings will always update need food and shelter. Regardless of the economic situation.  A little over 4 years since officially launching Farmfolio, we are now staring down the barrel of one of the worst economic interruptions in recent memory. Though the world is shut down, food and shelter are as important as ever.

Having been a contrarian for most of my adult life, I’ve learned that the difference between success and failure can be as simple as timing. When we began in 2016, I knew we might have been a little early on the meltdown clock. But I also knew it would take time to build a foundation that would be ready to scale at the right moment. As we watched the markets tumble in March, I must have felt just a hint of what the guys who shorted the housing bubble felt. It’s hard to get excited when you’re watching the world economy burn, but it’s not so bad when you’re not on fire.

When I first heard of the Coronavirus,

I was on my way to Germany for Fruit Logistica, which was in early February. In my wildest imagination, I never thought the world would literally shut down for two full months. But, as you think back to 2008, could you have imagined the entire banking system would collapse? In 2001 did you think it was possible that someone could fly two planes into the World Trade Center? Of course not. The human mind wants to believe something terrible can’t happen until it does. Murphy’s Law: If something can go wrong, it will go wrong.

This crisis has provided an opportunity for people to reflect

on the importance of a lot of things in life. It’s been a time to reflect on our decisions and how to adjust going forward. Many people are wondering if life will be the same and how long will it take to get there. Our luxuries might take some time to come back, but our necessities have never gone away, and they never will.

With all this talk of essential industries, it is important to remember that agriculture is perhaps the most essential of them all. Although the crisis has been difficult, it has served as a reminder of why we got into this business in the first place – to provide access to non-correlated, tangible assets in a sector that simply must remain productive, even in the worst of times.

As we show our gratitude for all of the healthcare professionals and other front line workers, please take a minute to think of the farmers as well. Every morning, our farm teams rise before the sun, not only to ensure that our investments are performing, but also that the food supply is uninterrupted.

Our operations team in Panama,

led by Paul Vergara, has maneuvered skillfully to adapt to the situation, and I’m very proud of the leadership he’s shown during this difficult period. In addition, our sales team in Europe, led by Tom Connell, has been steadfast in redirecting shipments and working on solutions to many of the new challenges as well. Lastly, our administrative team in Colombia, led by Andrea Valencia, has done a phenomenal job of moving quickly to adjust to government protocols and minimize downtime at our operations in Colombia. Our team is the greatest asset we have, and I am confident that the future will be bright for all of our stakeholders, no matter what lies ahead.

We would like to extend warm wishes and condolences to all those affected by the pandemic.  Stay inside, stay safe, and together we’ll exit this crisis stronger than we came into it.

Dax Cooke, CEO

Farmfolio Grows

Our team is growing. We’d like to introduce Roman Gaus & Brad St. Onge.

Roman Gaus, Head of Investment Strategies. 

Q1 saw the addition of some great people to the Farmfolio team. This quarter we welcomed Roman Gaus as our new Head of Investment Strategies. Based in Switzerland, Roman has a great perspective on institutional investment and ESG analysis, and we look forward to building new opportunities together.

Brad St. Onge, Head of New Investor Relations

We also welcomed Brad St Onge as Head of Investor Relations. Brad’s extensive background in finance and passion for the agricultural sector make him an excellent addition to our team, and he will be managing relationships with new and existing clients going forward.


La Dona
Farmfolio’s Premium Tropical Fruits Brand

In spite of the Coronavirus pandemic, La Dona performed very well in Q1. The brand is expanding its market share within its existing customer base, and our pineapples are outperforming competitors in the highly competitive markets of Paris and Milan. It has become clear that focusing on artisan-style quality was the right decision, as the sweetness and color of our pineapples are quickly making La Dona a brand asked for by name.

Another highlight of the quarter was a visit from Peter Badger of Global Investor Alliance, who accompanied a shipment of La Dona’s Air Pineapples all the way from the farm in Panama to the Rungis market in Paris. We enjoy providing our investors with a first-hand look at our operations, and the trip was a great opportunity to show off the inner workings of our business. Peter’s own analysis of the situation can be found here.



Fruit Logistica

The first major milestone of the year was FRUIT LOGISTICA, a massive gathering of industry insiders from all over the world featuring products, services, and technologies from across the fresh produce sector. Every year our team comes away with new insights, perspectives, and relationships, and this year was no different.

Firstly, our specialty Air Pineapple from Panama has generated strong interest in European markets. Shipping by air freight allows us to leave our fruits on the vine until just days before sale, making them incredibly sweet. Many in Europe have never tried this type of pineapple before, and markets are showing a very positive reaction.

More good news came in our assessment of lime markets. Colombia’s peak production times coincide perfectly with the high summer season in Europe, when high levels of tourism and domestic consumption push prices to their highest point during the year. This knowledge, together with our existing distribution channels for pineapple, will allow us to confidently enter markets with lime this year.

FRUIT LOGISTICA had a lot to teach us about market preferences. Some countries, for example, prefer lighter-skinned limes. Others prefer darker, juicier limes. Some buyers like bigger limes, some like smaller limes. Gaining insight on the intricacies of these markets will allow us to tailor our product to buyers across Europe.


Dealing with COVID-19

Due to the COVID-19 pandemic, the price of air freight skyrocketed in the third week of March, as the planes were being filled with medical supplies destined for Europe. Prices more than doubled within a week, reaching over $2.00 per kilo.

The La Dona team was prepared for this contingency. We quickly switched our air freight to shipment by sea container. We moved 60 pallets from air freight to sea container the week of March 15th, losing no fruit and continuing weekly shipments.

The following week, Farmfolio management was able to negotiate lower rates for air freight. Owing in part to the high volumes of business we had been conducting with the airlines in question. The team simultaneously negotiated for our customers to absorb most of the higher shipping costs, effectively leaving our margins for air freight unchanged.

Redirecting Product

La Dona was also able to redirect fruit from the Rungis market to other channels when the initial shock of the virus hit France. When the pandemic began to take hold, the Rungis market was paralyzed. So La Dona made the decision to redirect fruit to other buyers, mainly in Italy. About 50% of the fruit destined for the Rungis market was redirected during the final week of March. As two customers in France continued with purchases.

Our experience with the Italian market provided us with a model that we used to anticipate future reactions to the pandemic. The initial shock phase, in which confusion reigns and markets become entirely paralyzed, gives way to a recuperation phase. In which wholesalers switch to direct delivery and markets over-order to make up for lost time. Gradually the supply chain adapts, and prices and volumes stabilize.

The Coronavirus situation has proven the value of Farmfolio’s vertical integration model and the importance of being able to distribute via our own channels. Simply put, if we had been relying on wholesalers and importers during the COVID-19 crisis, we would not have been able to place our fruit in markets. Having options when it comes to logistics has proven to be a huge advantage for La Dona.

By continuing to deliver weekly shipments throughout the pandemic, La Dona has solidified itself a brand based not only on quality, but on consistency. As we move forward, we will benefit tremendously from our established customer base, stable sea-freight prices, and ability to respond quickly to market volatility.



Monteria, Colombia

Operationally, the Burroteka project saw numerous developments this quarter. The most significant of these was the purchase of new machinery, which came as a result of the secondary capital raise initiated in January. With two new horizontal band saws and a sharpening machine for the sawblades, Burroteka has been able to improve the quality of its production.

New Machinery

Most importantly, the new band saws allow Burroteka to finish its cuts on four sides, completely eliminating rough cut pieces. It had led to issues with claims in the past. The facility can now produce 100% clean-cut wood, which fetches a significantly higher price. And will reduce issues with claims in the future.

Quality Control

In addition, Burroteka has increased its quality control requirements for log purchases. Our forestry team now consists of two full-time ‘teak wranglers’. They travel to each plantation to inspect the quality of potential purchases. By taking on-site measurements of hardwood content, straightness, length, diameters, and pest presence. Burroteka has been able to streamline the invoicing process and increase the efficiency of the processing line.

Quality Conservation

The dry season has also led the project to increase its quality conservation measures. In order to prevent the degradation of the processed wood, our team is now applying a mix of sawdust and glue to the crosscuts, which prevents them from cracking due to exposure to sunlight.We are also using larger stickers, which separate the finished pieces and prevent decay. Finally, the piles are wrapped in Polisombra, a mesh material that helps block the sunlight.


On the Teak Road with Oscar Baracaldo

“One of the most significant events for Burroteka this quarter was my month-long trip through Europe and India. I began in Europe, where I attended the DOMOTEX timber and flooring trade show in Hannover, gaining valuable knowledge about the demand for plantation teak products and the viability of deck tiles for direct sale.

During my visit to India and Europe,

huge progress was made towards the betterment of our timber business. In Germany, I gained a greater understanding of requirements and the position of our product. In India, I saw first-hand some tricks of the trade which will help us increase our yields and quality.

Europe’s focus on sustainability gives us a very clear picture of the timber materials that will continue to thrive in the indoor and outdoor construction space. Market trends strongly favor materials that evoke a more natural feel and bring warmth, joy, and style to a wide array of spaces. We will continue to focus on distributing our more finished products to high-end markets in the US and Europe. As a result of this trip, various visits to our site in Colombia were scheduled, however, given the COVID-19 pandemic, we decided to postpone all foreign commercial visits to the mill until further notice.

Continuing on to India,

I visited teak markets, mills, and other facilities in Chennai, Trichy, Bangalore, and Hyderabad. The main objective of my trip was to sell the material that had arrived at warehouses across India. Ando also to discuss claims on some of the material with our new customers. I am happy to report that we were able to sell the entirety of the lot. With the help of our local representative Ratha Krishna, we have achieved a better understanding of the Indian market requirements for structural construction. We have further developed our relationship with new customers going forward”.

Oscar Baracaldo, COO


Teak has a long history of traditional use in India. The insights gained and relationships built on our India trip have been indispensable for Burroteka. Namely, the project has secured contracts that pay in advance. Eliminating the long accounts receivables cycles that had previously created difficulties.

Oscar Baracaldo at Sri Ranganatha Swamy Temple, Tiruchirappalli, India.



COVID-19 Impact

Like many businesses, Burroteka was forced to close when the nationwide lockdown began on March 25th. In order to minimize overhead, all employees were shifted to vacation status.  However, teak processing was declared an essential industry not long after, and Burroteka was able to reopen on April 6th. After 12 days of closure, Burroteka has resumed operations, and is gradually recovering for lost time.

HOPPUS is a system of measuring sapwood content of timber.
Like our other projects, Burroteka has implemented a strict COVID-19  protocol to protect its workers. At the beginning and end of each shift, the security guards at the entrance of the property must question all entering workers about their health status. Any workers displaying flu-like symptoms such as coughing and sneezing are barred from entering the facility.
Burroteka’s new machinery has helped increase outputs.
In addition, Burroteka has provided masks, antibacterial gel, and disinfectant to employees, and is maintaining a policy of social distancing within the facility. Employees must also obtain a health certificate verifying their status before they are allowed to return to work.
Burroteka’s monthly sales volumes for Q1.
Burroteka has made tremendous progress in terms of quality control, quality conservation, and quality of production. The new machinery will increase efficiency and add value to the production line. And our expanding relationships with clients in India bode well for the future of the project. As we move forward, we will continue to establish ourselves as Colombia’s foremost provider of sawn teak products.

Valle Verde
Antioquia, Colombia

Valle Verde made considerable progress on the construction of its packhouse this quarter. The facility, located in the Free Trade Zone near Urabá, Colombia. It has completed the construction of the packhouse’s foundation, first-floor columns, and initial cement pouring. The construction of the packhouse is currently estimated at 35% completion.

Construction Operations

Construction of Valle Verde’s packhouse un Apartado, Colombia was halted on March 24 when the government of Colombia instituted an obligatory lockdown. This lockdown was initially scheduled to last until April 13, but was recently extended by three weeks. The lockdown is currently slated to expire on April 27th.

These setbacks will delay the opening of the project. Our new target is mid-June, depending on the situation. If the lockdown is extended once again, or if the government implements a partial lockdown, the progress of packhouse construction could be delayed once again.















To accommodate for this delay, the construction company has agreed to work for 24 hours a day when the quarantine is lifted. Divided into 4 shifts of 6 hours each, this continuous construction will mitigate the time lost.
Packing Line

Although construction is momentarily paused, Valle Verde’s packing line is complete, and is awaiting shipment to Colombia. This top-of-the-line machine is equipped with sorting, sanitizing, drying, waxing, and classifying modules. And will help us implement a highly automated and efficient process. Valle Verde’s cold room is also under construction and will be completed on time.

After further negotiations, the Valle Verde project has agreed to purchase machinery that will double the capacity of the production line. As well as a de-marbler that will mitigate line jamming and overflow of inbound product. Although our projections state a capacity of 200,000 to 400,000 kilos per month of output, this machine will be able to handle up to 1 million kilos of total mechanical output. Juan Carlos Rico, Farmfolio’s correspondent in Mexico. He has been working on-site with the manufacturer of our packing line to ensure that it meets our exact specifications.


Procurement & Agronomy Program

While construction operations are paused, the project has taken the opportunity to advance its agronomy program. Strengthening its relationships with local growers who will supply the packhouse with limes. The lime sector in Colombia is still highly informal. Valle Verde has taken steps to integrate growers with global supply chains via its program.

The first step in this process is certification.

The project is currently in contact with 36 different growers. 5 of these are certified through ICA (the Colombian Agriculture Institute). 2 of these are Global GAP certified. As the project moves forward, the focus will be on helping a select group of growers obtain Global GAP certification. These growers will also be working towards other international certifications such as Global GRASP that will add value to the product.

Infofruta Bulletin

To accomplish the formalization of the lime supply chain in Colombia, Farmfolio has created a special news bulletin. It inform growers of prices, agricultural best practices, methods of acquiring certification, etc. Trust is an important factor in this process. As many growers are from isolated rural areas and have never exported fruit before. The bulletin will be an important method of building trust with local growers in Colombia.


Initial Shipments

To gain a greater awareness of market conditions and logistical efficiencies, Farmfolio has already begun shipping lime to European markets. Distributing through the La Dona brand, Farmfolio shipped a container of lime in December and will ship another two in late April-early May. It depends on weather conditions. European markets have shown a stable demand for lime, and Colombian lime possesses unique qualities such as rich color and high juice content.

The project intends to begin shipping limes in line with our original projections. However, due to lockdown delays, we will be utilizing a different packhouse. Since this is not an owned facility, our margins will be affected slightly, and the project plans to export additional volumes to mitigate the extra costs.

Free Trade Zone Status

Lastly, we have submitted our application for tax-free status within the Zona Franca, or Free Trade Zone, in Urabá. Establishing ourselves in the Free Trade Zone is a crucial step for the project, and we expect our application to be approved by the end of April.

Despite the delays caused by the COVID-19 pandemic, the future looks promising for Valle Verde. The backtesting of the project was highly encouraging. And also our efforts to formalize and centralize the lime supply chain in Colombia will establish us at the forefront of the industry. We are looking forward to getting back on track with construction, and opening the project next quarter.


Monteria, Colombia

Pietrasanta, being the most geographically isolated of Farmfolio’s projects. It has also been the least affected by the COVID-19 pandemic, and operations on the farm have continued normally. Beyond providing masks, antibacterial gels, and hygiene training to employees, additional measures have not been necessary, and the availability of labor remains unrestricted.

Irrigation Systems

Nonetheless, there have been some significant developments on the farm. The summer months have persisted beyond our initial expectations. The warm, dry weather that was anticipated to end in March has continued into April. Fortunately, the two groundwater wells constructed last year have been instrumental in maintaining proper irrigation. The wells, which can deliver a total of 9,360 liters of water in a day, will help ensure a low level of plant mortality.

Irrigation efforts on the Pietrasanta farm have been carried out by the operations team with the help of one 5,000-liter tank and one 10,000 liter tank, mobilized by the farm’s trucks and tractors. Our daily and extensive irrigation practices have helped offset the effects of the longer summer. And as we near the end of the most dangerous season of the year, we have experienced a mortality rate of only 20 plants.
New fertilizer applications will encourage robust of the coconut trees. Regular cleaning and maintenance operations continued this quarter, as well as the implementation of new fertilizer applications. HOLR, the new fertilizer, is an organic composite of nitrogen, phosphorus, carbon, calcium, potassium. And other minerals that will help the trees produce healthy coconuts in large quantities. Preventative measures against pests, such as mulching, also continued normally.


Floration & Harvest Schedules
The first florations on our coconut plantation began last year, and the El Principio and Vista Hermosa lots have shown particularly strong florations so far. Totaling 50 hectares, floration has occurred in roughly 15% of the plants, and we anticipate high yields once we reach harvest in 2021.


Cattle Phase-Out

During Q1, the Pietrasanta project completed its goal of phasing out cattle operations. And also sold off 21 of its remaining 23 heads of cattle. The project has no plans to acquire additional cattle. It setting its sights on other, more productive uses for the pasture land. As the annual cleaning of the teak plantation will not occur until later this year. There was no notable activity with regard to teak.

As Pietrasanta continues towards coconut production, maintaining plant health through irrigation and fertilizer applications will be critical. Although the effects of the COVID-19 situation on the Pietrasanta project have been limited, we are still taking precautionary measures, and will continue to monitor the situation closely.

Panama Golden Pineapple

La Chorrera, Panama

The Panama Golden project started off strong this year, expanding its air freight business and modifying its farming practices to better suit the air freight niche. The strong customer relationships built by the La Dona brand have been instrumental in allowing the farm to operate at high efficiency. The technical expertise of project manager Paul Vergara has ensured that PGP produces some of the best pineapples anywhere.
COVID-19 Mitigation Plan

However, the quarter was not without its setbacks. In mid-March, the government of Panama implemented a strict COVID-19 mitigation plan that has hampered our operations. The most significant impact of the plan is a reduction in work hours. As all employees must be safely quarantined in their homes by 5:00 PM. As some employees live up to 50 KM away from the farm, work must stop by 2:00 PM in order to ensure the safety of all employees.

The PGP project has gone above and beyond to protect the health of its workers. Project Manager Paul Vergara has implemented a 15-point plan to mitigate the risk of the virus; while continuing with work on the farm as much as possible.

The mitigation plan has so far been highly effective. The project is using its own vehicles to transport employees to their homes so that they can avoid the increased risk of exposure that comes with public transportation. These three vehicles are disinfected every day for maximum safety.

All employees have been provided facemasks, which they are required to wear at work and while commuting. Social distancing has been enforced as much as possible. And also the entire team underwent a mandatory training protocol to improve their awareness of methods that can mitigate the virus. Work also pauses every two hours for a mandatory hand-washing session.


Coronavirus Task Force

In addition to these methods, Paul has created a 6-person task force to manage the mitigation effort. The task force is charged with implementing the measures laid out in the mitigation plan. As well as closely communicating the health status of each employee to management. Any employee displaying any flu-like symptoms is immediately sent home for a 15-day mandatory vacation.

The project has also provided the opportunity for employees to purchase food at the farm. In order to eliminate the need for employees to go to crowded grocery stores. The task force has arranged for distributors to come to the farm itself, and employees can then buy their weekly groceries directly.

The health and safety of employees are paramount for PGP, and for all of Farmfolio’s projects. As this situation develops, we will continue to impose the highest standards of mitigation in order to protect our staff.

As part of the COVID-19 mitigation plan, our tractors, vehicles, and other spaces undergo regular cleaning.


Confronting COVID-19
The PGP team has done an excellent job of mitigating the effects of the COVID-19 pandemic. Overall, PGP shipped 138 air pallets in March, when the disruptions occurred, compared to 198 in February. This reduction of only 30% is a huge victory for PGP, considering that most exporters were unable to ship by air at all. The remaining fruit was sold via sea container or domestically.

La Dona, the primary vehicle for PGP’s products. It successfully negotiated for our customers to absorb almost all of the higher cost of air freight. PGP was also able to transfer fruit intended for air freight to sea containers. It was during the third week of March when air routes were temporarily unavailable. We expect to receive $8.00 per kilo for this fruit instead of the $10.80 we receive for air freight.

Due to the temporary shock to the supply chain caused by the global pandemic, the project has pursued other avenues of distribution, domestically and internationally. One such avenue comes in the form of local sales via direct delivery.

has begun shipping a small portion of its product to an online delivery service based in Panama City. This service allows customers to enjoy plant-ripened fruit delivered directly to their homes. The project is looking to increase our business with this client in the near future. The Pineapple Pack that PGP is using for domestic sales through a home delivery service.

The project is also pursuing sales channels in Asia. And will begin shipping to Chinese clients towards the end of April. Beginning with individual containers of sea-freighted fruit, opening the Chinese market will allow PGP to mitigate the effects of the pineapple off-season in Europe. It occurs when summer fruits such as strawberry, watermelon, and mango enter the market.

Sales numbers for the PGP project will be sent via a private message to PGP investors.

Changes in Farming Techniques

Disruptions in the supply chain necessitated certain changes to our farming techniques. In late March, the operations team began applying a product called gibberellic acid to the plants. It is intended to delay maturation. This allowed us to postpone harvesting until conditions improved. And the order was given to resume maturing fruit for air shipment on April 6th.

The application of gibberellic acid also helps mitigate the effects of waterlogging. It occurs when plants are exposed to excess water too quickly. Waterlogging is often seen after an abrupt transition from the dry season to the rainy season, and can cause problems with plant maturation and health.

Despite the global pandemic, PGP finished strong this quarter. Our air freight business posted stellar numbers up until the supply chain constraints began, and we were able to accurately anticipate the disruptions to air routes and adapt accordingly. As the project moves forward, our goal will be to continue building our air business and pursue diversification in terms of sales channels. On the farm, we will continue to prioritize the health and safety of our employees.

Stay tuned and please reach out to us if you have any questions or ideas!

Sincerely, the Farmfolio Team,