Duxton Farms Expands NT Holdings, Sells $38M Assets Amid Mixed Crop Conditions
Duxton Farms reported a strategic property acquisition in the Northern Territory alongside a $38 million sale of its Kentucky aggregation, navigating challenging weather and mixed commodity prices in Q3 FY2025.
- Acquisition of 2,386 ha NT Portion 8554 property completed
- Sale of majority Kentucky aggregation settled for $38 million
- Operating cash flow deficit of $2.155 million due to crop preparation costs
- Cotton harvest yields align with budget despite weather delays
- Mixed commodity price movements: wheat and barley up, cotton down
Portfolio Expansion and Asset Sales
Duxton Farms Limited (ASX:DBF) has taken a significant step in its Northern Territory growth strategy with the acquisition of a 2,386-hectare property in the Top End, settled during the quarter for $10.25 million. This addition complements its existing holdings near the Wildman Agricultural Precinct, reinforcing the company’s footprint in a region poised for agricultural development.
Simultaneously, Duxton Farms completed the sale of the majority of its Kentucky aggregation for $38 million, including 6,020 hectares of arable land and water entitlements. The proceeds are earmarked for debt reduction, shareholder distributions, and reinvestment into new and existing opportunities, signaling a balanced approach to capital management and growth.
Operational Challenges and Crop Updates
The quarter was marked by hot and dry conditions across key NSW cropping areas, notably Forbes, where rainfall was significantly below average and temperatures exceeded historical norms. These conditions delayed the sowing of the 2025 winter crop and prevented canola planting, prompting a shift to grain in the crop rotation.
Despite these challenges, the cotton harvest at Walla Wallah commenced with yields meeting budget expectations. The dry weather facilitated crop maturation and drying, although isolated spray drift damage was observed. Livestock sales continued steadily with improved pricing, particularly for well-conditioned stock, though the company has paused further trading to focus on targeted breeding management.
Financial Performance and Cash Flow
Duxton Farms reported an operating cash flow deficit of $2.155 million for the quarter, primarily due to upfront expenditures on tillage, seed, fertilizer, and other inputs for the upcoming 2026 winter crop. Investing activities reflected the recent property acquisition and further investment in Duxton Dried Fruits Pty Ltd, while financing activities included proceeds from borrowings and repayments, resulting in a net cash decrease of $1.784 million.
The company maintains secured financing facilities totaling $51 million, with approximately 3.4 quarters of funding available based on current cash flow burn rates, providing a comfortable liquidity buffer amid operational investments and market uncertainties.
Market Conditions and Commodity Prices
Nationally, wheat and barley prices showed positive momentum, with wheat at Port Kembla rising 5% year-on-year and barley up 5%. Conversely, cotton prices declined by 16% over the past year, reflecting global supply dynamics and pricing pressures. Livestock prices experienced a slight quarterly dip but remain elevated compared to the previous year, with beef and lamb prices up 11% and 25% respectively year-on-year.
Australia’s winter crop plantings reached a record high, with forecasts indicating the third-largest crop on record, driven by strong production rebounds in New South Wales and Western Australia. However, weather variability and international market uncertainties continue to pose risks to yield and pricing stability.
Strategic Outlook
Duxton Farms’ recent transactions and operational updates underscore its commitment to scaling a diversified agricultural portfolio while managing market and environmental challenges. The company’s focus on irrigation improvements, crop rotation adjustments, and livestock management positions it to capitalize on favorable commodity trends and emerging opportunities in the Northern Territory.
Investors will be watching closely how Duxton navigates the delayed sowing season and integrates its new property assets into production, alongside monitoring the impact of commodity price fluctuations on revenue and margins.
Bottom Line?
Duxton Farms’ strategic asset moves and operational resilience set the stage for navigating a complex agricultural market in FY2025.
Questions in the middle?
- How will delayed sowing and weather conditions impact Duxton Farms’ 2025 crop yields and revenue?
- What is the timeline and scale for shareholder distributions from the Kentucky aggregation sale proceeds?
- How will the newly acquired Northern Territory property integrate operationally and financially into Duxton’s portfolio?