Background
Duxton Nuts is a walnut business across 576 planted hectares in the Murrumbidgee Irrigation Area in the Riverina region of NSW, aiming to produce 20% of Australia’s production at maturity. The orchards comprise suitable soils, Mediterranean climate and a reliable source of good quality water which are key factors associated with the success of horticulture in the region. Duxton Nuts has secured a long-term offtake agreement with a leading privately held Australian manufacturing, packaging, storage and distribution business. The offtake agreement entitles Duxton Nuts to receive the higher of a floor price and a spot price, plus profit share.
Fundamental Drivers of Value
Countercyclical Production: China and the US are the two largest walnut producers globally, accounting for 43% and 31% of total production respectively.5 Australia’s production accounts for less than 1% of global production. With global demand increasing, there is a growing need for year-round supply from counter-seasonal regions in the Southern Hemisphere.
Demand from Asia: Annual global walnut consumption has experienced an annual average growth of 6.8% since 2001, exceeding that of global production which has only increased by an average of 5.8% over the same period.6
Per capita walnut consumption has increased from 95 grams in 2004 to 280 grams in 2016 (9.4% CAGR).7
5USDA, 2018, Tree nuts: World markets and trade
6International Nut and Dried Fruit Council, 2018, Global Statistics Review 17/18; International Nut and Dried Fruit Council, 2009, Global Statistics Review 2004-2009
7 Sommer, KJ. 2012. Optimising water use of Australian Almond production through deficit irrigation strategies. Department of Primary Industries, Victoria
