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

DBF NAV $2.51
Change   Fair Market NAV Per Share as at 31 December 2021

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

SQM Research rates Duxton Farms 4 stars high investment grade

Duxton 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 Farms and teamed with potential up-lift in local land values, this should result in stronger returns for investors over time.

Our Properties

Duxton Farms 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



Duxton Farms’ winter crop harvest was completed in February, with wheat and barley now held in storage to be sold over the coming months. Low rainfall has allowed areas that were previously wet to dry out, allowing land preparations for the next season to continue. Land preparations have dried out the surface of some cropping areas but it is pleasing to note that subsoil moisture has been retained. Offset discing has progressed further than would usually be expected at this stage in the season given the increased presence of weeds and high chemical input costs, which has made discing the most effective option.

March saw dry conditions across the farms, with intermittent rainfall. Central-west New South Wales recorded 30.2mm of rainfall for the month, compared to the monthly long-term average of 54.6mm. For 2021, central-west New South Wales (Forbes Airport AWS) recorded 1,052mm of rainfall, over double the previous 15-year average. The year has also started out slightly cooler than the long-term average for the area, with January and February recording below average temperatures for the area. March was slightly warmer than the long-term average, with an average mean temperature of 29.6°C compared with the long-term average of 29.3°C.

Following a cooler end of the month in February, warm weather over March was beneficial for cotton growth. Flood damage earlier in the season has led to the abandonment of 23 hectares of the Company’s cotton, with 242 hectares remaining. Cotton has been irrigated as required, with on-farm water storages being drawn down as a result. This follows reduced irrigation requirements earlier this season due to above average rainfall. The crops are at a stage that they will not need further irrigation before harvest. Drier conditions have allowed land preparation to commence on the fields to be used for the upcoming cotton season.

Pasture growth over March progressed well, with lucerne crops being irrigated as required given the drier conditions. Livestock continue to be shifted between properties to best utilise available feed and take advantage of favourable field conditions. Livestock continue to be sold as they meet market specifications at good to exceptional prices. Additional purchases will be made as and when attractive pricing opportunities arise.