In September 2019 we purchased on behalf of our investors a 19-acre almond orchard in El Nido, Merced County, California. In this post, we lay out the results and payout from our first farmland deal crowdfunded on the FarmTogether platform.
In our underwriting, we always aim to be conservative in our assumptions, focusing on capital preservation, and then growth and income opportunities.
In this screenshot you can see the previous projected numbers:
We are proud to report that we recorded harvest that was 13% and 5% higher vs. our projected yield and price, respectively.
The FarmTogether team visited the property recently and completed a drone flyby.
The operator, TriNut, has installed a fertilizer container, has marked all the trees for replanting later in 2020 and hired a new local worker (creating jobs thanks to our investors) that will help him manage the property. The recent rains have been helpful in improving soil quality which may help us come below budgeted on labor and treatment costs. The operator found an opportunity to upgrade the well for a cost-effective price, potentially (i) lowering future labor costs, (ii) increasing soil quality and (iii) improving tree uniformity, ultimately potentially leading to better performance vs. projected.
The operator has been incredibly responsive to us and on top of every detail of this orchard. While small compared to their total footprint, this orchard is a showcase project for TriNut and FarmTogether and we remain confident that TriNut will continue their outstanding performance on this contract.
We are continuing to work on adding a 2nd water source, but this is a long-term value-add at the sale that we want to get at the right price. This doesn't influence our current operations in any way.
Using proceeds from the harvest, we completed our first payout to our investors accelerating the payout vs. scheduled.
Investors in our first deal were also entitled to 7 pounds of their own almonds a year and we personally packaged and shipped the first harvest before New Year. They are delicious, roasted, with a nice juicy kernel, and are fairly large vs. a lot of the almonds you typically see in the store. As one investor put it - "Better than WholeFoods!".
Disclaimer: FarmTogether is not a registered broker-dealer, investment adviser or investment manager. FarmTogether does not provide tax, legal or investment advice. This material has been prepared for informational and educational purposes only. You should consult your own tax, legal and investment advisors before engaging in any transaction.