Farmfolio Quarterly Newsletter Q1 2025

From The CEO

It’s good to be back! First off, sorry for the lack of comms - we’ve been busy. Really busy. In fact, last year we switched over all of our farms from third-party management to an in-house team. That took up a lot of our time, so we weren’t able to publish as much content as we would have liked. 

But now that the transition is complete, we’re freed up to start working on some critical priorities that will shape our 2025. Firstly, we wanted to create this quarterly publication to keep people up to speed on our activities and goings-on in Colombia. There’s a lot to talk about, so we hope you enjoy. 

Q1 of 2025 has seen some historic milestones, from the first export of fresh, dry coconut from Colombia to the U.S. to a new partnership we believe is going to solve problems within our supply chain and create value for farmowners and investors. We’re glad to have you as we take the next step in the Farmfolio journey! 

Sincerely, 

Oscar Baracaldo, CEO

In-Company News

Farmfolio Business Network Achieves Historic First Export Of Fresh Dry Coconut From Colombia

Farmfolio’s Pietrasanta farm network has reached a historic milestone, conducting Colombia’s first-ever export of fresh, dry coconut to the United States. Although exported volume has been minimal so far, there is major potential in the U.S. market, and Farmfolio expects to be able to ramp up its exports going forward.

“We’re very proud of what the team has accomplished,” said Jessica Valencia, head of coconut processing operations. “It’s been a long process. We’ve obtained ICA (Colombia’s FDA) certifications for the Pietrasanta farm to be able to export, and we had to prove compliance with a lot of different regulations.”

 Currently, coconut is being processed at the Burroteka facility, which is an ideal location due to its logistical access. Although Burroteka’s teak operation unfortunately didn’t survive COVID, Farmfolio is transforming the asset into a central hub for Colombia’s growing coconut industry. With plans in place to begin consolidating volume from third-party growers as well as the Pietrasanta farms, this operation is in place to rapidly expand. 

“We’ve outfitted Valle Verde to be able to process coconut, which is a big step for the facility,” said Diana Osoria, Farmfolio’s Director of Operations. “Through the end of March, we’ve exported a total of 16 pallets, which is a good result for this early stage. We also obtained our PRIMUS certification, which is more focused on agricultural goods, as well as FSMA, which is issued by the FDA. Having this level of international compliance will be a big help for us.”

Although significant progress has been made, coconut exports from Colombia are still in the exploratory phase. “We’re really just testing the waters,” said Farmfolio CEO Oscar Baracaldo. “There’s a lot to learn about the market, and about how our coconut will behave in transit. So far the results have been good, but there’s a long way to go. The domestic market has been great, and is showing some great signs, but having the extra diversification will go a long way.”

Farmfolio Launches Partnership With Pratt Standard

Farmfolio expanded its horizons last month with a groundbreaking partnership that will help the company’s lime businesses achieve greater efficiencies and higher prices on fruit sales. This partnership is with a company called Pratt Standard, a rapidly growing supplier of craft cocktail mixes, syrups, and, most importantly, citrus juices.

This partnership allows lime businesses within the Farmfolio network to more profitably commercialize a type of fruit that so far has gone underutilized - juicing-quality fruit. The retail market for limes is highly visual, and a large volume of high-quality fruit goes unsold due to minor visual imperfections that have no real impact on quality. Juicing-quality fruit is just as flavorful and fresh, but doesn’t need to adhere to the same strict visual standards.

“We couldn’t be happier about this partnership,” said Oscar Baracaldo, Farmfolio CEO. “In fact, we’ve been looking for a solution in the juicing space for quite some time. We even thought about trying to do it ourselves,” he continued. “But Pratt has the experience and the know-how to do it right. Their solution is going to turn the whole fresh lime juice market upside down.”

“This partnership will create value for everyone in our lime businesses,” added Oscar. “For Valle Verde, we’ll be able to fill containers more efficiently and minimize issues with claims. And for the lime LOTs farms, we’ll see higher average prices and less waste.”

“This was the missing piece of the puzzle for us,” said Tory Pratt, founder and CEO of Pratt Standard. “Citrus juices are our cornerstone product line. But the fly in the ointment has been the cost of raw materials. Going through wholesalers and middlemen was just too expensive. Plus, we were paying for visually perfect fruit, which we didn’t really need,” she said. 

“Our proprietary juicing process adds shelf life without sacrificing quality,” she continued. “It’s the perfect medium between in-house juicing, which is too expensive, and high-pressure pasteurization, which detracts heavily from quality. Our juice is shelf-stable, saves time, and is cheaper compared to in-house juicing,” she added.

“It’s the perfect product for market entry, because it allows us to create value for customers right off the bat. After they see how much they can save on juices, they’re eager to hear about our mixes and syrups,” she said. “Right now, we’re set to expand from the D.C. area into the rest of the Northeast and with time, the entire country.”

Pratt Standard is preparing to conduct a Series A financing round, offering convertible debt notes at an interest rate of 12%. Members of the Farmfolio network are invited to participate, and will be first in line for this offering.

Farmfolio Appoints Erik Miller As FOA Administrator

Farmfolio made a major shift in its top personnel last week, appointing former Investor Relations lead Erik Miller as FOA Administrator for the company’s LOTs farmland opportunities. As FOA Administrator, Erik will represent the interests of LOT owners, collect and distribute information regarding LOTs status, and oversee the issuance of harvest payments to members of the FOA. 

“This is a big role, but Erik is ready for it. He’s very nearly our most tenured employee, and he has visibility of everything the company does. He’s been deeply involved in LOTs from the beginning, and he’s in constant contact with the farm administration teams from our head office in Medellin,” said Oscar Baracaldo, Farmfolio CEO. 

“I’ve been leading the LOTs reporting for some time, and I will continue to do so,” Erik continued. “We understand that not all of our farms are performing to the expectations of LOT owners, and we’re working hard to correct that. Nonetheless, these are still incredible assets, and we’re going to do more to communicate the value that we’re creating at these farms.” 

“As a LOT owner myself, I have a vested interest in making sure that LOTs reach their full potential in terms of performance,” he noted. “We’re going to be turning over every stone looking for efficiencies, cost savings, higher pricing, etc. We’re going to be doing a lot of analysis.”

“We are also going to improve communication with LOT owners and invite people to get more involved in their farms. There are a lot of day-to–day things that owners don’t really need to make decisions on, but there are also areas where they can get more involved. That’s going to mean meetings, webinars, voting, visits, things of that nature.”

“Another focus will be on increasing the liquidity of LOTs. While LOTs are really intended for a long-term hold, circumstances change, especially with all of the volatility in markets. We’re going to expand our LOTs resale process to create solutions for people who need to exit their ownership.”

“Lastly, as we gear up for further payments, I’d like to invite LOT owners to review their bank information on the Appfolio platform. Once everyone gets their info loaded in, we can make payments directly from the platform.”

Farmfolio looks forward to building closer relationships with LOT owners via this new appointment.  

Colombia & The World

Trump vs. Everyone: The Tariff Situation

Over two months into his second term, Trump’s return has, predictably, been largely unpredictable. Following what’s been dubbed “Liberation Day”, the world economy is reeling from widespread and in some cases extraordinarily high tariffs. 

Colombia is no exception. Although no reciprocal tariffs have been applied to Colombia so far, the country does fall within the 10% ‘baseline’ tariffs that applies to all countries that export to the United States. 

According to the Trump team, the administration’s strategy is to force companies to re-shore their manufacturing, which is part of a larger move to re-industrialize the country and bring back jobs that were shipped to low-cost environments. Needless to say, it’s been a divisive move. 

Fortunately, it seems Colombia has avoided the worst of the fallout of the trade war. Although exporters - including Farmfolio companies - will have to bear some of this burden, the resulting increase in value of the U.S. dollar against the Colombian peso will help offset the impact. Additionally, tariffs will also apply to foreign competitors, leveling the playing field for the company’s existing relationships. 

Given that Farmfolio subsidiary Farm Direct Partners (FDP) imports fruit shipped from Valle Verde, it will fall to FDP to absorb these cost increases. However, the company’s advisors have determined that tariffs apply only to boxed fruit, not to logistics and other costs. Farmfolio is closely monitoring the situation and is prepared to quickly adjust to any new developments. 

Given the ongoing chaos in markets, Farmfolio’s network is eager to get a sense of the long-term implications of these tariffs. Although Trump’s vision is to restore industries and productive capacity to the United States, there are some goods that the country is simply not equipped to produce. Fresh fruit such as lime and coconut does not grow well in most regions of the U.S., and the cost environment is not conducive to large-scale production. 

All that to say that no matter how high tariffs rise, the United States is not going to re-shore its lime production. Neither is it going to stop consuming limes. Furthermore, if Mexico provokes the ire of the Trump administration, it is entirely possible that Colombia’s major competitor in the lime space will face increased tariffs once again.

Colombian Infrastructure Projects Gaining Ground

Colombia celebrated a major milestone in its infrastructure development last month with the opening of a new stretch of highway in the crucial Titiribí area. This new section constitutes a crucial portion of the Pacifico 1 highway network, which will connect the growing regions of Caldas, Risaralda, and Valle del Cauca with the Caribbean coasts and its key ports of Cartagena and Santa Marta.

“We’re celebrating a great day in the history of our country's infrastructure. We’re opening the second unit of the Pacifico 1 project, which will permit the connection of the southwestern regions with the north and their passage through Antioquia,” said a representative of Covipacífico, the construction contractor, in a public statement. 

At a total of 13 kilometers, the Titiribí roadway might not seem like much - but in Colombia’s landscape of dense jungle and winding mountains, the stretch is a major achievement. The roadway features 21 bridges and two tunnels, pushing the Pacifico 1 project to 96% completion according to local sources. 

This highway system will complement the Pacifico 2 project, which is currently 86% complete, and the Pacifico 3 system, which finished construction last year. Once fully operational, this highway system will reduce transport times from the country’s growing regions to the coast by nearly 50%. The project has also had a significant social impact, creating over 8,000 jobs and receiving carbon neutral certification due to its fuel-saving benefits. 

“This will be a major benefit for our farms,” said Juan Pablo Vargas, Farmfolio’s Director of Logistics & Infrastructure. “When we send fruit from the farms to the packhouse, there’s always a bit of shrinkage. The road networks are still difficult in some places, which raises the amount of damage in transit for our fruit. But with these new highways, that damage will be significantly reduced. That’s not to mention the fruit that goes bad en route, which we expect to decline substantially with these new roads.” 

These infrastructure developments will go hand-in-hand with the opening of a massive, $764 million dollar port project known as the Port of Antioquia. Located a stone’s throw from the Valle Verde facility, this port will be a massive boon to Colombian exports of all kinds. The port is expected to commence operations this year, and the incoming 4G development projects will implement modern roadways straight to its door. 

“The logistical efficiencies are going to be huge,” said Oscar Baracaldo, Farmfolio CEO. “But what we’re also excited about is the appreciation factor. Properties like our LOTs farms are going to benefit massively from these installations, and whole regions of the country will become accessible. The highways will affect everything: market access, tourism, heavy industry, development, and more. We expect it to have a big impact on valuations.”

Farmfolio will be closely monitoring property values across Colombia’s farmland regions, and will be issuing updated valuations of all LOTs properties this year. 

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