Agridime Investment review: We have questions
Moneywise.com / Moneywise.com
There's no denying that U.S. consumers love their beef products. After all, according to the U.S. Department of Agriculture, cattle production is consistently the largest agricultural commodity in the country.
But what if the beef you buy could do more than just sizzle on the grill during your next backyard barbecue?
That's where companies like Agridime come into play. With Agridime, investors can buy heads of cattle and earn 20% or more in profit from the raising and selling of that cattle. And Agridime's network of farmers and meat buyers handle every step of the process, meaning it's a completely passive investment.
Our Agridime review is covering how the process works as well as the risks and rewards you should consider.
3.3
3.3
Commissions & fees5
Potential returns4
Ease-of-use4
Due diligence2
Liquidity2.5
Agridime lets you invest in cattle by purchasing calves at $2,000 per head and profiting when the beef eventually sells. The company states you get 15% to 20% or more in guaranteed profits.
Pros & Cons
Pros
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Agridime guarantees 15% to 20% or more in profits
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Open to non-accredited investors
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Completely passive investment
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Relatively short 12-month investing periods
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The historical price of beef has generally increased over the last 20 years
Cons
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We haven't been able to confirm that any investors have been paid back
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Cattle cost $2,000 per head so you need some upfront capital
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Agridime is a younger company, so it's uncertain what might happen in the case of insolvency
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No secondary marketplace or way to get out of your investment
About Agridime
Agridime is a meat distribution and animal supply chain management company that operates out of Fort Worth, Texas. The company was founded in 2017 and specializes in wholesale meat brokering.
And for investors, Agridime lets you add cattle to your portfolio. The company lets you invest in heads of cattle, promising handsome, guaranteed returns through its profit-sharing model.
Agridime also has a consumer-facing shop on its website where you can buy boxes of farm-to-table beef, pork, and chicken and have meat shipped to your door.
Who is Agridime for?
If you want to diversify your portfolio and invest in cattle, Agridime is for you. It currently promotes a guaranteed 15% to 20% return after 12 months for cattle purchases in Q2, 2022. However, cattle cost $2,000 a head, so this isn't a viable option for investing a small amount of money.
How does Agridime work?
The idea behind Agridime is to let investors make money by raising cattle without actually having to do the work of raising them. As an investor, you help finance Agridime's meat supply chain. From there, Agridime uses its connections to help supply retail outlets, restaurant food service companies, and meat distributors with fresh beef.
Cattle costs $2,000 per head, and you're purchasing cows that are already around 500 pounds. Agridime contracts each cow into its supply chain and livestock are raised on partner farms in Kansas until they're ready for butchering. Following processing, Agridime sells beef to online store and grocery customers.
At the time of writing, Agridime guarantees 15% to 20% profits after 12 months for cattle purchased during Q2 2022. It also offers 20% profits on contracts of 50 cattle or more ($100,000+).
This might sound too good to be true or impossible, but here's how the math breaks down:
- 1.
Your $2,000 investment covers the cost to purchase, raise, and process one steer or heifer
- 2.
This process yields approximately 500 pounds of meet
- 3.
Agridime can sell this product for approximately $6 per pound, netting $3,000 in revenue per head
- 4.
Investors get $300 to $400 of the profit (15% to 20%) and Agridime keeps approximately $600
Again, Agridime says its investors averaged over 20% profit on more than 5,000 head of cattle last year, which is certainly an impressive rate of return.
Have any investors actually gotten paid from Agridime?
This is the burning question that we've been trying to get answered, especially since a cattle Ponzi scheme was busted by the DOJ in August 2022. And we're not the only ones who are concerned. Lots and lots of people on Facebook have been asking for payment verification, like this person:
But despite Agridime's original post having 2.1k comments (and we, painfully, read most of them), we couldn't find one person who was able to say a simple, “Yep, I can confirm I was paid!”
…That is other than this person:
Unfortunately, when asked repeatedly to verify her comment, Carol seemed to disappear:
Here's one more person begging Carol to provide some much-needed reassurance:
Again, no response. Of all the other risks that we've covered so far of investing with Agridime, this is the one that concerns us most. Furthermore, we've seen comments from multiple actual ranchers who seem baffled as to how Agridime is able to pay the kinds of returns that they're promising.
Some commenters have said that Agridime's “vertical integration” (the fact that they raise the cattle, process the meat, and distribute to buyers all in-house) is their secret sauce. But, still, the returns seem high.
And it causes one to wonder: if the returns really are that high, why would Agridime offer to share 20% of the profits with investors rather than take out business loans at a much lower interest rate?
In any case, until we can confirm that at least one investor has received their principal back (and hopefully their promised interest as well), we can't recommend Agridime to our readers.
Update: On September 8, 2022, one additional person responded to Agridime's Facebook post to say that he had been paid as agreed. While that's somewhat encouraging, we still haven't seen any verification documents as as of yet. We'll continue monitoring Agridime's website and Facebook page for more information.
Are there any fees?
Agridime doesn't charge investors with fees. Instead, it takes a majority of profits from beef sales and shares 15% to 20% with investors. In this sense, Agridime is basically a crowdfunding website, just for cattle instead of real estate or private equity.
Agridime's insurance policy
You get a contract from Agridime after you invest in cattle that certifies and describes how profit payments will work. To be clear, we'd like for this contract to be publicly available for review before you invest. But we did some digging in the comments of one of Agridime's Facebook posts and a commenter posted this sample contract:
While that contract looks legit, we didn't receive it ourselves so we can't verify its authenticity. However, you'll notice that Agridime says that “All cattle are insured for death loss.” If this is true, this would be a major investment protection.
In any case, there's no further information about how comprehensive these insurance policies are. What would happen, for example, if an entire herd of cattle became sick or died? We have reached out to Agridime for clarification and will update this review if we receive a response.
Update: Agridime has confirmed that it has its own internal herd of cattle. Should your cattle die, it can replace your loss with its own cows, protecting your investment and honoring the contract.
Performance & historical returns
There isn't any historical performance data on Agridime's website other than the claim that investors averaged over 20% in profits for more than 5,000 cattle in 2021. At $2,000 a head, this means Agridime's investors contributed over $10 million last year, netting over $2 million in profit.
What are the risks?
Agridime is a newer company that began in 2017 and its cattle investing side of the business is even newer. There's no telling what might happen if Agridime suffers insolvency.
On the bright side, the risk of beef prices crashing seems like a smaller risk. According to Bureau of Labor Statistics data, the average price of beef in the United States has steadily risen since around 2000. Below, you'll find the historical chart for ground beef prices followed by the price chart for steak products.
These charts are encouraging, but it's also important to note that prices increased faster than normal in 2020 and 2021. If this growth slows down, it's once again uncertain what might happen to Agridime's profit margins. Changes in the beef market are certainly an underlying risk for investors, but if Agridime's contract truly guarantees profits, that's a form of protection.
Best alternatives
There isn't really another platform that lets you invest directly in cattle like Agridime. Livestock Wealth is the closest alternative, and this South African-based crowdfunding platform lets you invest in cattle, macadamia nut trees, and connected gardens. It currently advertises up to 14% returns for its cattle investments. And, like Agridime, its website also guarantees profits and explains that if your investments should perish, insurance at least covers your initial purchase price.
Outside of these two alternative investing platforms, you can also invest in farmland through companies like AcreTrader and FarmTogether. You have to be an accredited investor, but each company provides access to income-generating farmland.
Finally, you could always invest directly in beef companies or farmland REITs by using your online stock broker. For example, BRF (BRFS), a global food processing company, has a market cap of over $15 billion. U.S. companies like Tyson Foods (TSN) are also publicly traded with a market cap of over $30 billion at the time of writing. And for a completely different take on this industry, there's always lab-grown meat stocks you can consider.
That said, investing in beef certainly falls under the alternative asset class more than a traditional investment. You should never invest more than you can afford to lose, and always do your due diligence if using an alternative investing platform.
Bottom line
Anytime I see “guaranteed returns” somewhere, I normally run for the hills. And generally speaking, I think this is a good rule of thumb to follow.
But Agridime's business model at face value, it's very interesting. It uses its wholesale capabilities to buy cattle at low prices. From there, there's a wide enough profit margin for both early investors and Agridime to still earn a return even if the price of beef fluctuates downward.
Still, I wish there was more information on Agridime's website about its contracts and how cattle insurance works. And more historical performance data in the future will be very helpful. Personally, I suggest contacting Agridime with any and all questions before investing. You can call the company at 888-664-6621 or use the contact page on its website to get in touch.
There's certainly the potential for some amoo-zing returns (I couldn't resist) based on what Agridime promises on its website. But, personally, I have lots of questions that I'd want to have answered first before I'd be willing to hand over $2,000 of my own money to Agridime.
Tom Blake is a staff writer who specializes in cryptocurrency, investing, and passive income.
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