Duxton Farms Reports $9.2M Operating Deficit, Advances 650ha Pistachio Orchard

Operational Challenges and Crop Progress

Duxton Farms Limited has released its Q2 FY2026 activities report, revealing a quarter marked by both agricultural challenges and strategic progress. The company’s winter crops, particularly in the Forbes aggregation of New South Wales, faced significant stress from hot and dry weather despite ongoing irrigation efforts. While these conditions limited overall crop performance, the cotton harvest from the previous summer delivered positive yields, and preparations for the 2026 cotton crop are well underway with fertiliser applications and land preparations progressing.

Meanwhile, in Northern Australia, favourable weather supported a strong finish to the cotton crop in the Ord region, with harvesting commencing and ginning operations moving to the new Kununurra facility. The cattle herd at Mountain Valley Station showed promising growth, supported by supplementary feeding, with livestock sales continuing as part of ongoing portfolio management.

Strategic Asset Rotation and Portfolio Focus

Reflecting its strategic pivot, Duxton Farms has continued to divest from broadacre farming assets, including the sale and liquidation of livestock at Merriment and Cowaribin properties. This capital rotation supports the company’s stated objective to deepen exposure in horticulture, apiculture, viticulture, and Northern Australian developments. The company is actively progressing the sale of additional properties valued at over $65 million, expected to settle within the calendar year, bolstering liquidity and funding for growth initiatives.

Horticulture and Apiculture Developments

Significant progress was made in the horticulture segment, with the Piambie pistachio orchard advancing its fourth planting stage. Upon completion, the orchard will span nearly 650 hectares, positioning Duxton Farms as a major player in Australia’s pistachio industry. Walnut plantations at Yarramundee are maturing well, with the first commercial harvest anticipated in 2027. Apple orchards at Loxton and Nangwarry remain resilient despite labour shortages, with harvest expected to commence in February 2026.

Viticulture operations benefited from ideal growing conditions, with dried grape yields on track and harvest preparations underway. In apiculture, the company exceeded expectations in fulfilling almond pollination contracts and secured over 40,000 beehive placements for the upcoming season, signaling robust growth. However, honey production was slightly below budget due to dry conditions in New South Wales, though rising bulk honey prices and expansion of the Fuzzy Bum branded product offer offsetting revenue opportunities.

Financial Overview and Capital Management

Financially, Duxton Farms recorded a $9.2 million operating cash flow deficit for the quarter, primarily attributed to seasonal harvest costs, crop development expenses, and investments in pistachio and Northern Australian projects. The company completed a $63.7 million merger with four other agricultural businesses, largely settled through share issuance, and refinanced its debt facilities, drawing $66 million and repaying $59.3 million to optimise capital structure.

Liquidity management remains a focus, with cash reserves at negative $5.2 million offset by $5.8 million in unused financing facilities. The company anticipates strengthening its cash position through property sales, including the recent $5.1 million settlement of the Merriment property and ongoing negotiations for Cowaribin. Duxton Farms expects to maintain current operating cash flow levels while continuing to fund its growth strategy.

Outlook

Duxton Farms is navigating a complex agricultural environment with a clear strategic direction towards diversified, high-value farming sectors. The company’s ability to manage weather-related crop risks, execute asset rotations, and integrate recent mergers will be critical to delivering sustainable returns. Investors will be watching closely how these factors influence operational yields and capital appreciation in the coming quarters.