Simply Natural Farms: Update on My Panama Investment

Shortly after booking my flight to Panama, I learned that there had been a fire on the Simply Natural Farms lands.  Oh boy.

The first report I got was that my hectare of mangos had been severely impacted.  Oh crap.

So, I was really dreading my farm inspection during the two-hour-plus drive from Panama City to Penonomé (where the main farm offices are located).  Once we got to the offices, I was told by Mario, the head of the company’s irrigation systems, that my land was mostly fine and that my pump and irrigation controller survived the fast-moving fire.  Whew!

A damaged one-inch irrigation supply line.

Nonetheless, I was practically holding my breath during the fifteen-minute drive from the office to see my mango trees.  As it turns out, I only lost a handful of trees plus the irrigation supply lines that lay on top of the ground were melted.  For the most part, the trees look good and just need water.  Fortunately, the rainy season has begun.

Like many fires I saw in the mountains of Montana where I grew up, the fire moved quickly and mostly burned grass, small bushes and the lowest limbs of the trees.  Even trees like the one below might be able to be saved as long as it is green on the inside of the trunk.

One of the more severely burned trees.

For those trees that were in the path of the fire, there are basically three long-term scenarios:

• The tree completely burned:  the tree is not salvageable and must be cut down and replaced
• The tree is sufficiently burned that the limbs will never be the same, but the interior is alive:  the top of the tree will be cut off and a new scion will be grafted to the existing tree.
• The lower limbs are burned but the tree is generally in good condition:  the tree will be trimmed and monitored, but will go on to produce in the coming years.

The melted remnants of the one-inch irrigation lines.

The grafting option is an interesting one.  In anticipation of some future event, the company’s R&D group did a trial a few years ago by cutting off the tops and re-grafting dozens of trees already in the field.  The result was 100% success.

I was aware of the experiment but never dreamed they would need to implement it.  Even if the success rate isn’t that high when re-grafting the burned trees, it means that most will be saved because the root system will remain intact.

Although the pump and controller on my irrigation system were unharmed, they will still need to replace the one-inch feeder lines that lay on top of the ground, the individual drip lines that go to each tree and the sensors that are buried throughout the hectare of land.

Irrigation supervisor, Mario, explaining the pump and controller systems.

The three-inch main line coming into the pump is split in two with a line going to each side of my property.  The one-inch lines come up in front of each row of trees and then the drip lines are attached near the trunk of each tree.  The sensors will need to be individually dug up and tested.

The sensors are a critical part of the irrigation system because they measure how much water is being consumed by the trees.   Weather stations located throughout the farms measure temperature, solar gain, wind, rain and humidity.  The weather station and sensors work in tandem as the data is fed into the controllers to completely automate the irrigation system.

Data is collected every ten minutes and instructions are given to the irrigation system using artificial intelligence algorithms to make sure every plant receives exactly what it needs.  Millions of data points are compared using not only the information gleaned from the systems installed on the farms in Panama, but also from systems growing the same crops across the world.

Most trees still had a lot of flowers that will develop into fruit. Simply Natural Farms grows eight different varieties of mango. My mangos are the My Fair Lady variety, created by Simply Natural Farms.

In addition to the fact that most of my trees are in great shape, most of them are also flowering.  There are some fruit on my trees, but since the fire happened during the flowering season, they were delayed because the irrigation system was destroyed.

While I doubt I will get much of a crop this year, Mario said that most of the irrigation lines that were destroyed across the 30-or-so hectares impacted by the fire will be replaced by the end of the year so that next year’s crop (barring another fire or other catastrophe) should be solid.

Not a surprise… the vinyl perimeter fences did not fare well.

There are a lot of mango saplings ready to go in the nursery.  The problem is that these were intended for yet-to-be-planted hectares, not as replacements for burned trees.

They will be planting more seedlings, but that takes time.  The rootstock is grown from local Panamanian tree seeds because they are well adapted to Panama’s weather and soil.  Once the trees are about eighteen inches tall, the top is cut off and a scion of the desired mango variety is grafted to the rootstock.  After another few months, they will be planted in the field, but that whole process takes anywhere from 18 to 24 months.

Mango saplings in the nursery, ready to plant.

I also visited the area where my lime trees are planted.  Fortunately, the fires didn’t damage the Toza lime plantation and I should get a decent harvest payment this year.

I found the lime trees in good health with many limes on the trees and many more flowers that will yield more fruit in the coming months.  The Rainforest Lime variety is an everbearing tree; it produces throughout the year.

Lime grove at the Toza plantation. No fire here.

While I was at the Toza lime plantation, crews were busy installing irrigation lines further up the hillside.  They are taking advantage of the relative lack of rain to get into difficult terrain while they still can.  Once the irrigation lines are installed, the area can be planted.

Like all the plantations, the Toza farms have their own irrigation system just like the one installed where my mangos are being grown.  Simply Natural Farms sells a lot of limes to local bars and restaurants.

The Rainforest Lime variety is everbearing, meaning they grow and are harvested throughout the year.

My final stop on the tour of the Simply Natural Farms plantations was the greenhouse complex.  Spreading across nearly twenty hectares (almost fifty acres), the greenhouses grow primarily cucumbers and melons but can be switched out at any point to grow other crops like tomatoes or peppers.

The Simply Natural greenhouses use the same SupPlant irrigation system that is used in the fields.  This system is the epitome of high technology being applied to agriculture.

The greenhouses also house an R&D facility and all of the mango, lime and avocado saplings are started and grafted before being transplanted into the field.  This ensures that the samplings are healthy prior to being planted and give them the best possible chance of growing successfully.

Post-harvest greenhouse. The old plants have been removed, new growing medium has been installed and the greenhouse is ready for planting.

My company, Alternative Ag Investors, sells managed farmland and represents Simply Natural Farms and Paraguay AG Invest in addition to Teak Hardwoods and Agro Nosotros (coffee and cacao investments). 

Agri Terra Greenhouse: A Paraguay Inspection Tour

The greenhouse structure.  Note the weather station antenna on the third nave peak.

Most of my blog posts are topical, but this week I’m writing about my inspection tour of the greenhouse that my wife and I own outside of Nueva Italia, Paraguay.  We bought in early 2020 and after some Covid-related shipping delays, our greenhouse arrived and our tomatoes were planted on February 18 of this year. 

It was an amazing trip and the German-based management company Agri Terra is doing a tremendous job of delivering for their investors.  You can read more about their investment opportunities Here and Here.

When we purchased, we didn’t know precisely what would be planted in our vegetable greenhouse since the company grows peppers, cucumbers and a variety of tomatoes.  Ours turned out to be tomatoes and I was awestruck by the overall operation.

Proud “farmer” inspecting his crop.

Like many hydroponic set-ups, the vegetable plants are grown in a shredded coconut husk medium.  The irrigation system provides both the water and just the right balance of nutrients. 

A system of fans, retractable overhead covers and sidewalls that can be dropped in times of high wind help maintain the perfect growing environment.  A miniature weather station atop each greenhouse along with sensors inside feed data into the automated system.  

Each greenhouse is 1,250 square meters. The greenhouses have weather stations that feed data into the controllers, which then open and close vents, and influence the irrigation frequency.

Theoretically, the greenhouses could be left unattended for quite some time and the control system would keep dosing each plant with the water and fertilizer solution, the proper temperature will be maintained and the plants will keep growing.  Of course, that would never happen, but the way the system works a lot of the growing tasks are completely automated. 

The plants are grown from seed, which are currently sourced from the outside but they have an R&D section that is working on perfecting their own process of growing new seedlings so the end-to-end process will eventually be in-house.

The fertigation plant. Each variety of plant has its own mix of natural fertilizers that are automatically fed into the drip system.

Once the seedlings are planted in the greenhouse growing medium, they are trained to grow vertically by being attached to support cables using plastic clips.  The plants are pruned weekly, pulled up and attached to the cable trellis system and, since flowering is unpredictable, the plants are pollinated daily.

I was naturally excited to see my first crop but I also picked up a lot of information along the way that just confirmed this is one of the best agricultural purchases I have made. 

In addition to being able to see the greenhouse complex and related facilities, I was able to spend some time with Carsten Pfau, the president of the company, and one of their senior agronomists.  Very impressive.  Carsten not only provided big picture context to the company’s mission but Christian, the agronomist, was able to give very detailed answers regarding the technology involved and the growing process.

The morning’s harvest from the day I arrived.

Agri Terra not only operates the greenhouses, they also have lime, lemon, mandarin and orange groves.  We didn’t spend as much time in the citrus groves but the trees we saw were healthy, properly pruned and had just recently been harvested. 

These trees were about three years old so the harvest isn’t yet marketable because the fruit isn’t yet of retail quality; that comes in the fourth and fifth years when the Brix level (a test of sweetness used in the produce industry) has risen sufficiently.  I found that explanation interesting since I planted an orange tree in my backyard last year which produced a single piece of fruit.  It was OK, but wasn’t as sweet as I had hoped.  Now I know why; sweetness and overall quality improve as the trees age.

These tomatoes were planted in a different greenhouse about four weeks before mine.

The company recently bought a juicing plant and a water company with the intention of producing a line of sports drinks in addition to juiced citrus products.  They are currently selling strawberry greenhouses but are focused on completing the vegetable greenhouses first.  Orange groves are available for investors and other citrus may be available in the future depending on market demand.

They are also building a new processing plant right next to the greenhouses and will have the ability to do fruit purees in septic plastic containers as well as individually quick frozen (IQF) products, both of which have a long shelf life and can be exported.

Agri Terra tomatoes are sold at their Granja Direct stores. The conversion when I was there was 6,800 Guaraní to the dollar. So these tomatoes are selling for $2.57 per kilo or about $1.17 per pound.

If that weren’t enough, they have started a line of small grocery stores that focus on high-quality produce.  There are currently three Granja Direct stores, which are being used to test marketing and sales techniques before expanding further.  This cautious-growth approach to the company’s long-term plans impressed me. 

I asked Carsten if there were plans to offer new products after the strawberry greenhouses are built and he said he didn’t know; he wants to complete all the greenhouses, build the processing plant and expand the juicing operation before expanding further.  He was quite insistent that he needed to stabilize the current projects in the pipeline before moving on to the next ones and that his plans need to be fluid based on what he learns from bringing his current plans to fruition.

his is in a greenhouse planted about 4 weeks before ours. The plants are pollinated daily, trimmed weekly and attached to the cable supports.

Part of my reason for buying into the Agri Terra project is the fact that all the financial transactions are completed via German banks and the contracts are written in accordance with EU law.  In other words, as an owner, you have a business relationship with a German company; if things go sideways, you’ll be dealing with a German court, not one in Paraguay.

Part of what made this trip so much fun was the amazing people I traveled with, both investors and those who are thinking about investing.  It was quite the international group including folks from Finland, Italy, Australia, the U.S., Bolivia and Columbia.  Each person had questions and I learned a lot from the different perspectives and experiences of my travel companions. 

Content label on the greenhouse.

The vegetable greenhouses are sold out and there are only a dozen or so of the new strawberry greenhouses still available, so if you’re interested, you’ll need to act fast.  They seem to have plenty of orange groves for sale.  For more information, click HERE.  Please don’t hesitate to reach out if you have any questions.

My company, Alternative Ag Investors, sells managed farmland and represents Simply Natural Farms and Paraguay AG Invest in addition to Teak Hardwoods and Agro Nosotros (coffee and cacao investments). 

Back to Panama and Paraguay for Another Round of Farm Inspections

Wow!  I didn't realize how long it's been since my last post!!!

A lot has happened in my life since then and I'm going to try to get it all down on "paper" soon, but in the meantime, I want to share some details about my next visit to Panama.

I'm headed back down to Panama and Paraguay the first ten days of May.  The trip is partly to see friends but mainly to check up on some of my farmland investments and see how things are going.  I can't wait. 

I have a permanent residency visa and would have moved there by now but I met the most wonderful woman in the world and got married instead.  It's turned out to be a pretty good tradeoff.   😊 

While I’m in Panama City I also have an appointment with the American Consulate to get my Florida driver’s license validated, which is the first step toward getting a Panama license.  Like everything in Panama, the bureaucratic nonsense for such a simple task is unbelievable… I even have to provide proof of my blood type to get a license!

That’s another whole story that I won’t go into now, so back to my farmland.

Simply Natural Farms

I first invested in Simply Natural in 2015.  Over the years I have purchased multiple hectares of land to grow limes, mangos, plantains and avocados.

Unfortunately, the pandemic lock-downs have been especially hard on this company.  Panama hyped COVID-19 as if it were the Black Plague.  Unless designated as an essential worker, residents were allowed out of their houses a grand total of six hours per week; women could go out for two hours on Monday, Wednesday and Friday, and men could go out on Tuesday, Thursday and Saturday.

When I say “go out” I mean go to the store, doctor or pharmacy and the hour of day was determined by the last digit of your national ID card.  That was pretty much it.  They weren’t even allowed to walk their dogs.

It took weeks and weeks to get the government papers that would allow essential workers to drive to and from work.  Even then, some provinces (including Coclé Province where the farm offices are) wouldn’t accept the national travel papers.

A great many Panamanians don’t own a vehicle and depend on buses and vans for transportation.  Well, if you used to take a 16-passenger van to work, now they can only take four people at a time because of strict social distancing rules.  Many farmworkers who were scheduled to begin their shift at 7:00 AM showed up at noon or later.

As time went on, many Panamanians were so freaked out that even essential workers like those working on farms just quit.  The government and local agencies were providing food and they didn’t need to pay rent or utilities, so why take the risk?

As a result, crucial crop maintenance went undone.  Rains that created mild flooding and under normal conditions required a couple of guys with shovels to divert the excess became major problems.  Without this simple maintenance, the roots of mango trees remained submerged for weeks on end resulting in root rot and destructive fungus.  I lost one hectare of mangos because of this.

None of this was Simply Natural’s fault but they stepped up anyway and decided to offer a swap of affected hectares for a new greenhouse project growing dragon fruit.

The upside to this is that those who were faced with replanting crops will be able to get a payout much earlier than waiting four to five years for new trees to grow.  The downside is that the payouts aren’t quite as high and you no longer own the land, just the greenhouse and related systems.

When I visited last May (see Back to My Farms in Panama), the nine-month lockdown had been lifted and things had opened up quite a bit.  I still had to wear a mask just walking down the street and going into a store required that I have my temperature taken and that I slather on hand sanitizer.

After spending two days on the various plantations, I believe the long-term outlook for Simply Natural is positive.  Despite the lockdowns they managed to complete a major irrigation project, stage the piping for the next pumping complex, complete a number of greenhouses and resumed routine maintenance of the field crops.

At any rate, I’m anxious to see my hectares that weren’t impacted and to see the construction of the new dragon fruit greenhouses.  By the time I get there, the excavation should be nearly completed along with some of the foundations and hopefully some of the structures will be started.  The seedlings will be planted by year’s end and the first crops harvested in 2023.

This will be my sixth farm inspection tour since 2015 and I will be hosted by the President of Simply Natural as well as their Director of Client Relations.

Paraguay AG Invest

The greenhouse that my wife and I own in Paraguay should be fully implemented by the time I get there.  The construction was delayed a bit by COVID-19 restrictions that impeded shipment of the structure and created a challenge for the workers, but overall Paraguay AG Invest has done an amazing job of getting the greenhouses built, irrigation and environmental systems installed and the first crops planted.

Paraguay instituted a six-week lockdown in 2020 in response to the pandemic but overall wasn’t nearly as draconian in their pandemic restrictions when compared to Panama.

The country has some of the lowest per capita spending on health in Latin America according to the World Health Organization.  As a result, there were widespread protests in 2021 in response to a lack of vaccines, hospital beds and the overall medical response to COVID-19.

Despite these obstacles, Paraguay AG Invest managed to get their crops harvested, maintain the existing greenhouses and begin construction on new ones.

The Agri Terra Group, the parent company of Paraguay AG Invest, hasn’t been sitting on their hands during the pandemic, either.  Not only have they moved forward with new projects, but they have also opened their own chain of produce stores and purchased an existing processing plant for packing, canning and juicing.

I really love this project and the company.  Not only are the verified returns substantial (a 21.5% average annual return on investment) but the crops and structure are fully insured against fire and force majeure.  My greenhouse will grow tomatoes, cucumbers, peppers and other produce, and uses an advanced drip irrigation system to conserve water and provide direct fertilization.

I’ll be in Asuncion for three days.  In addition to inspecting their greenhouse project and orange groves, I’ll be meeting with the company president and get a briefing on their new strawberry greenhouses.

Follow-up

My company, Alternative Ag Investors, sells managed farmland and represents both Simply Natural and Paraguay AG Invest in addition to Teak Hardwoods.

I’ll give a full report when I get back in mid-May so that fellow investors can have the benefit of my analysis of both operations.