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

DBF NAV $1.82
Change   Fair Market NAV Per Share as at 30 June 2020

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, geographic diversification 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 two major geographic aggregations. The aggregations are located in NSW, between Forbes and West Wyalong; and in South Australia, near Naracoorte.

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

This Month on the Farm



During July, the winter crops have continued to develop well in the wet conditions. The above average rainfall over recent months has delivered a full soil moisture profile, providing favourable conditions for the upcoming season. Most crops have received an application of nitrogen-based fertiliser to promote growth. DBF has had no issues securing supplies of fertiliser or chemical inputs for the winter cropping program.At DBF’s South Australian property crop and pasture growth were strong at the start of the month as warmer temperatures promoted growth. Later in July dry weather and early morning frost hampered growth.

During the month the early planted cotton commenced defoliation. Defoliation assists in improving picking efficiency and reduces the amount of leaf litter which can affect cotton grades. Recent rainfall has resulted in delays to defoliation in some areas. The small trial plot of cotton under a fully biodegradable/dissolvable film is developing well and will continue to be monitored during the season.

Picking continues to be delayed this year due to wet soil conditions as the farms received an additional 58.2mm of rainfall in July. By the end of July, 88% of the cotton crop has been picked with the remaining field being delayed due to continued wet soil conditions. All cotton that has been picked has been processed. Preparations are beginning for next seasons cotton fields as conditions allow. The small trial plot of cotton that developed under a fully biodegradable/dissolvable film has been picked. Once processing is completed the results of the trial area will be analysed.

DBF is continuing to take advantage of the recent high livestock prices by selling livestock that meet market requirements, while also acquiring additional stock as favourable opportunities arise. Pasture that was planted during May has continued to develop well in the wet conditions. The pasture will assist in ensuring adequate feed is maintained over winter.

DBF continues to maintain adequate reserves of fodder for livestock to facilitate the ongoing fattening and wellbeing of stock. At Boorala, good pasture growth has contributed to both ewes and lambs being in very good condition. The ample supply of pasture is promoting early development in lambs. Steers purchased recently are benefiting from the high quality of paddock feed.

Central-west New South Wales (NSW) recorded July rainfall of 58.2mm which is 19.6mm above the long-term average. As shown in the below graph, Forbes has now received 113% more rain than the region did for all of 2019 and is significantly above the 15-year average. The mean temperature for July was 14.8°C, above the long-term average of 14.7°C. In south-east South Australia (SA), July recorded rainfall of 49.4mm compared to the historic average of 60.7mm. The mean temperature for July was 13.9°C. This is below the long-term average for the region by 0.2°C.