Duxton Broadacre Farms is an Australian listed entity providing investors with exposure to a diversified portfolio of high-quality, efficient, Australian farms

DBF NAV $2.14
Change   Fair Market NAV Per Share as at 30 June 2021

Duxton Broadacre Farms Limited ("Duxton Broadacre" or "the Company") is an Australian listed entity (ASX:DBF) providing investors with exposure to a diversified portfolio of high-quality, efficient, Australian farms.

Access to a well-established portfolio of operating broadacre farms producing a diverse range of agricultural commodities.

Best in-class, on-farm management, strengthened by the global agricultural experience of the Investment Manager, Duxton Capital (Australia).

Risk is mitigated and returns optimised through mixed commodity production, long-term water security, and the strategic development of properties.

Duxton Broadacre Farms continues to seek land-rich parcels for continued growth, scale, and diversification.

SQM Research rates Duxton Broadacre Farms 4 stars high investment grade

Duxton Broadacre Farms is an Australian listed entity providing investors with exposure to a diversified portfolio of high-quality, efficient, Australian farms. Australia presents a unique investment opportunity in this space because of the low-sovereign risk and potential for value uplift. To ultimately decide on Australia as the location for this Company, Duxton Capital Australia, being the Investment Manager, looked at some of the world’s largest wheat producers, who in aggregate, produce around 520 million tonnes of wheat each year.

Using various different measures of economic and sovereign risk, we narrowed the list down:

The USA

Canada

France

Germany

And Australia

Using Savills’s 2018 global farmland index data, we then analysed these and other countries, and compared them in terms of the capital cost of gaining farmland exposure in these countries. Let’s say you have $100 million US dollars to invest.

For this, you could buy…

9,799 hectares in America

4,286 hectares in New Zealand

3,533 hectares in Germany

4,150 hectares in the UK

and an incredible 43,403 hectares in Australia

Land in Australia is incredibly well priced, but is it comparatively productive? 

We assessed this by benchmarking the capital cost required, to purchase enough land, to produce the same 1 tonne of wheat, year-on-year.

To do this, it would cost you…

$3,305 US in America

$2,978 US in the UK

$3,595 US in Germany

$2,607 US in New Zealand

But only $1,329 US in Australia

You can see why we saw opportunity to farm in Australia given the low sovereign risk, and the mis-priced land. Now the next question is do higher operating margins outside Australia justify higher land values – the short answer according to a 5-year study conducted by the Grains Research and Development Corporation.

So, you have invested your $100 million US and bought land in these, each of which provides a different level of production. Your $100 million deployed into Australian farmland based on average production will produce approximately 85,000 tonne year-in, year-out.

In Germany, your $100m converts to 28 thousand tonnes. In New Zealand, your $100m converts to 38 thousand tonnes. In the UK and the US, your $100m converts to 33 and 31 thousand tonnes respectively.

Now using the data from the GRDC study we have multiplied this by local average farmgate prices per tonne, to calculate revenue per annum, and by average cost of production per tonne, to ultimately arrive at an annual operating profit. In Germany, your $100m should convert to approximately $2.1 million of annual operating profit. In America, its only $2.2 million. In the UK, it is about the same, at $2.5 million.

Whereas in Australia, you $100 million US dollar capital investment converts to a year-on-year operating profit of around $6.2 million, assuming average prices and costs.

The Company therefore recognises potential for capital growth in the underlying land assets of the aggregations. Based on historical data, we also believe grain prices are at the bottom of the cycle, sitting near all-time low inflation adjusted prices. There are a number of catalysts which are anticipated to provide strong upward pressure on the commodities produced by Duxton Broadacre and teamed with potential up-lift in local land values, this should result in stronger returns for investors over time.

Our Properties

Duxton Broadacre owns and operates a major geographic aggregation in NSW. The aggregation is located between Forbes and West Wyalong.

These properties are comprised of dryland and irrigated land, producing a diverse range of both summer and winter crops.

This Month on the Farm



Very high rainfall and cool conditions over November have delayed the ripening of DBF’s winter crop, resulting in harvest commencing later than normal at the end of November. The main impact on DBF’s winter crop from the wet weather will be on grain quality, with downgrades expected across most of the crop. However, assisted by the high rainfall winter crops have developed well and are filling the grain to capacity. Some small areas of DBF’s crop are expected to be lost due to water inundation, however, overall yields based on harvest completed to date appear to be promising and similar in size to last year. DBF’s winter crop harvest will continue over December and may continue through to January given its later start and slower harvest conditions.

November saw heavy rainfall across central-west New South Wales with 172.6mm recorded compared to the November long term average of 50.1mm. Year to date rainfall in 2021 is over double the previous 15- year average and 32% higher than at the same time last year. Mean temperatures for November were substantially cooler than historical means, averaging 24.3°C compared to the long-term November average of 29.1°C.

Required fertiliser and chemical supplies have been secured and are held on farm. Mice populations continue to be monitored by DBF, with no activity observed over the month. The risk of mice activity may increase in the coming months as temperatures become warmer. No damage has yet been observed, however additional baitremains on hand should it be required.

Pasture growth over November continued to progress well given the high rainfall. Almost all pasture areas have been sown, with limited areas remaining unsown due to the wet weather conditions. Additional fodder was produced over the month from harvested pasture and wheat crops supplementing DBF’s reserves which remain on hand if needed. Wool produced from shearing was sold over November, with Merino wool sold at reasonable prices. Large numbers of cattle and sheep continue to remain at the West Plains and Lenborough properties taking advantage of the available feed. DBF’s continues to sell its livestock with good to exceptional pricing. Additional livestock will be purchased if attractive pricing opportunities arise.