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About CHS Inc.

CHS is a major cooperative marketer of grain, oilseed, and energy resources in the US. It represents farmers, ranchers, and co-ops from the Great Lakes to Texas, trading grain and selling farm supplies through its stores to members. The group processes soybeans for use in food and animal feeds and grinds wheat into flour. In addition to grain marketing, it operates through joint ventures and a variety of business segments for the sale ofl soybean oil and crop nutrient products. CHS also operates petroleum refineries that sell Cenex-brand fuels, lubricants, and other energy products. The company does about 90% of its business in North America.

Operations

CHS operates through three segments: Energy, Ag, and Nitrogen Production.

The Ag segment accounts for around 75% of sales and consists of grain marketing, country operations, wholesale agronomy, processing and food ingredients, and renewable fuels. The grain marketing business buys up grain from producers and ships it from export and river terminals across the US to specified locations. The country operations business purchases grain through around 470 locations throughout the midwestern and western US and sells energy, feed, and seed products to the same producers. Crop nutrients delivers products from approximately 20 inland river warehouse terminals directly to customers. Processing and food ingredients crushes around 130 million bushels of oilseeds into meal or flour and edible oil each year. It also processes soy flour used in the snack industry. Renewable fuels produces fuel-grade ethanol and dried distillers grains and markets ethanol and dried distillers grains for third-party production plants.

The Energy segment generates almost 25% of sales and sells refined petroleum products through retail and wholesale channels. Products include petroleum, lubricants, and propane and other natural gas liquids. It has refineries in Laurel, Montana and McPherson, Kansas, and sells products under the Cenex brand through a network of around 1,500 convenience stores.

The Nitrogen Production segment consists solely of the company's investment in CF Nitrogen and does not contribute revenue to consolidated sales. The investment allows CHS to purchase granular urea and UAN (an ammonium nitrate solution) to produce and distribute nitrogen fertilizer, a commodity chemical.

Geographic Reach

CHS' corporate headquarters is located in Inver Grove Heights, MN. The company's Energy business operates terminals and storage facilities, refineries, pipelines, lubricant plants and warehouses, and convenience stores and gas stations throughout the US. The Ag business runs grain terminals, oilseed processing facilities, and ethanol plants in the US. Outside the US, CHS owns grain terminals in Argentina, Brazil, Hungary, and Romania. The company also leases grain marketing offices worldwide.

North America accounts for approximately 90% of net sales.

Sales and Marketing

CHS makes some 80% of its refined fuel sales to members. The cooperative sells about 1.5 billion gallons of gasoline and about 1.7 billion gallons of diesel fuel each year. Sales are made wholesale to member cooperatives and non-member producers, as well as local cooperatives, grain dealers, and crop nutrient retailers.

Financial Performance

Sales fell 2% in 2019to $31.9 billion. The $31.2 million decrease in Ag segment IBIT for fiscal 2019 reflects a combination of higher non-gross-profit-related expenses contributed to a $58.9 million IBIT decrease, primarily related to increased reserve and impairment charges in connection with certain loan loss reserves associated with the challenging agricultural environment in our country operations business, including the impact of an out-of-period adjustment recorded during the period increasing reserve and impairment charges (recoveries), net by $25.5 million.

Net income increased in 2019 with a more than $54 million jump to $829.9 million. The increase was due to the $207.2 million increase on their operating earnings offset by $17.9 million on their interest expense.

Cash at the end of fiscal 2019 was $299.7 million, a decrease of $244.3 million from the prior year. Cash from operations contributed $1.1 billion to the coffers while investing activities used $661.3 million. Financing activities used another $725.6 million for dividends to stockholders and the company's stock repurchase program.

Strategy

The company's business strategies focus on an enterprise-wide effort to create an experience that empowers customers to make CHS their first choice, expands market access to add value for their owners, and transforms and evolves their core business by capitalizing on changing market dynamics. To execute upon these strategies, CHS is focused on the implementation and use of agile, efficient and sustainable new technology platforms; building robust and efficient supply chains; hiring, developing and retaining high-performing, diverse and passionate teams; achieving operational excellence and continuous improvement; and maintaining a strong balance sheet.

 

 

Company Background

To help farmers through the Great Depression, the Farmers Union Terminal Association (a grain marketing association formed in 1926) created the Farmers Union Grain Terminal Association (GTA) in 1938. With loans from the Farmers Union Central Exchange (later known as CENEX) and the Farm Credit Association, the organization operated a grain elevator in St. Paul, MN. By 1939 GTA had 250 grain-producing associations as members.

GTA leased terminals in Minneapolis and Washington and built others in Wisconsin and Montana in the early 1940s. It then took over a Minnesota flour mill and created Amber Milling. GTA also began managing farming insurance provider Terminal Agency. In 1958 the association bought 57 elevators and feed plants from the McCabe Company.

Adding to its operations in 1960, GTA bought the Honeymead soybean plant. The next year the co-op acquired Minnesota Linseed Oil. In 1977 it acquired Jewett & Sherman (later Holsum Foods), which helped transform the company into a provider of jams, jellies, salad dressings, and syrups.

In 1983 GTA combined with North Pacific Grain Growers, a Pacific Northwest co-op incorporated in 1929, to form Harvest States Cooperatives. Harvest States grew in the early and mid-1990s by acquiring salad dressing makers Albert's Foods, Great American Foods, and Saffola Quality Foods; soup stock producer Private Brands; and margarine and dressings manufacturer and distributor Gregg Foods.

The company started a joint venture to operate the Ag States Agency agricultural insurance company in 1995. The next year the co-op's Holsum Foods division and Mitsui & Co.'s edible oils unit, Wilsey Foods, merged to form Ventura Foods, a distributor of margarines, oils, spreads, and other food products.

Harvest States merged in 1998 with Minnesota-based CENEX, a 16-state agricultural supply co-op that had been founded in 1931 as Farmers Union Central Exchange. (Among CENEX's major operations was a farm inputs, services, marketing, and processing joint venture with dairy cooperative Land O'Lakes formed in 1987.) CENEX CEO Noel Estenson took the helm of the resulting co-op, Cenex Harvest States Cooperatives, which soon formed a petroleum joint venture called Country Energy with Farmland Industries.

CHS members rejected a proposed merger with Farmland Industries in 1999. Also that year Cenex/Land O'Lakes Agronomy (it became Agriliance in 2000 when Farmland Industries joined the joint venture) bought Terra Industries' $1.7 billion distribution business (400 farm supply stores, seed and chemical distribution operations, partial ownership of two chemical plants).

CHS bought the wholesale propane marketing operations of Williams Companies in 2000, and the co-op paid $14 million for tortilla and tortilla chip maker Sparta Foods. Additionally, Estenson retired that year and company president John Johnson took over as CEO. CHS launched an agricultural e-commerce site (Rooster.com) in conjunction with Cargill and DuPont in 2000. The site was shut down the next year, however, because of a lack of funds. Also in 2001 the cooperative became the full owner of Country Energy by purchasing Farmland Industries' share.

In 2002 CHS acquired Agway's Grandin, North Dakota-based sunflower business and formed a wheat-milling joint venture (Horizon Milling) with Cargill. In 2003 the company changed its name from Cenex Harvest States Cooperatives to CHS Inc. and began trading on the NASDAQ. 

CHS Inc.

5500 Cenex Dr
Inver Grove Heights, MN 55077-1721
Phone: 1 (651) 355-6000

Firm Stats

Employer Type: Publicly Owned
Stock Symbol: CHSCL
Stock Exchange: , NASDAQ
First Vice Chairman: Clinton J. Blew
Second Vice Chairman: Jon Erickson
Chairman: Daniel Schurr
Employees (This Location): 763
Employees (All Locations): 10,703

Major Office Locations

Inver Grove Heights, MN

Other Locations

Burlington, CO
Denver, CO
Holyoke, CO
Idalia, CO
Sterling, CO
Coral Springs, FL
Lauderdale Lakes, FL
Council Bluffs, IA
Davenport, IA
Blackfoot, ID
Cottonwood, ID
Craigmont, ID
Grangeville, ID
Kendrick, ID
Lewiston, ID
Nezperce, ID
Post Falls, ID
Worley, ID
Carrollton, IL
Gurnee, IL
Pekin, IL
Brownsburg, IN
Blue Rapids, KS
Brewster, KS
Chase, KS
Colby, KS
Great Bend, KS
Hill City, KS
Hutchinson, KS
Mcpherson, KS
Ness City, KS
Oberlin, KS
Phillipsburg, KS
Quinter, KS
Selden, KS
Sharon Springs, KS
Wichita, KS
Melbourne, KY
Alexandria, LA
Belle Chasse, LA
Hamilton, MI
Holland, MI
Traverse City, MI
Badger, MN
Bellingham, MN
Brownsdale, MN
Byron, MN
Callaway, MN
Chatfield, MN
Clara City, MN
Claremont, MN
Crookston, MN
Donnelly, MN
Eagan, MN
Elrosa, MN
Fairmont, MN
Fergus Falls, MN
Glyndon, MN
Grand Meadow, MN
Greenbush, MN
Grygla, MN
Hallock, MN
Herman, MN
Hoffman, MN
Inver Grove Heights, MN
Kasson, MN
Kennedy, MN
Luverne, MN
Mahnomen, MN
Mankato, MN
Marshall, MN
Mazeppa, MN
Morris, MN
Oklee, MN
Park Rapids, MN
Plainview, MN
Rochester, MN
Roseau, MN
Rosemount, MN
Russell, MN
Ruthton, MN
Saint Charles, MN
Saint Hilaire, MN
Saint Paul, MN
Savage, MN
South Saint Paul, MN
Stephen, MN
Thief River Falls, MN
Tracy, MN
Twin Valley, MN
Warren, MN
Wendell, MN
Winger, MN
Winona, MN
Kansas City, MO
Greenville, MS
Mount Olive, MS
Vaiden, MS
Big Sandy, MT
Billings, MT
Broadview, MT
Brockton, MT
Chester, MT
Chinook, MT
Columbus, MT
Conrad, MT
Cut Bank, MT
Denton, MT
Drummond, MT
Fort Benton, MT
Geraldine, MT
Glasgow, MT
Glendive, MT
Great Falls, MT
Hardin, MT
Havre, MT
Kalispell, MT
Kevin, MT
Laurel, MT
Lewistown, MT
Livingston, MT
Malta, MT
Miles City, MT
Missoula, MT
Moccasin, MT
Richey, MT
Ronan, MT
Rudyard, MT
Shelby, MT
Sidney, MT
Stevensville, MT
Thompson Falls, MT
Three Forks, MT
Valier, MT
Winifred, MT
Adams, ND
Aneta, ND
Ashley, ND
Belfield, ND
Bottineau, ND
Bowbells, ND
Calvin, ND
Casselton, ND
Coteau, ND
Courtenay, ND
Devils Lake, ND
Dickinson, ND
Drayton, ND
Edgeley, ND
Edmore, ND
Englevale, ND
Fargo, ND
Galchutt, ND
Gladstone, ND
Glasston, ND
Grand Forks, ND
Hampden, ND
Harwood, ND
Hensel, ND
Hettinger, ND
Horace, ND
Kenmare, ND
Kulm, ND
Lakota, ND
Lamoure, ND
Langdon, ND
Lankin, ND
Lansford, ND
Larimore, ND
Lidgerwood, ND
Lignite, ND
Litchville, ND
Mandan, ND
Mantador, ND
Milnor, ND
Milton, ND
Minot, ND
Mohall, ND
Neche, ND
New England, ND
Norma, ND
Pembina, ND
Pisek, ND
Reeder, ND
Regent, ND
Rugby, ND
Ryder, ND
Sarles, ND
Starkweather, ND
Taylor, ND
Valley City, ND
Velva, ND
Wyndmere, ND
Alma, NE
Bertrand, NE
Bladen, NE
Blue Hill, NE
Elm Creek, NE
Holdrege, NE
Lincoln, NE
Loomis, NE
Norfolk, NE
South Sioux City, NE
Tecumseh, NE
Wausa, NE
Manlius, NY
Kenton, OH
Kingfisher, OK
Omega, OK
Harrisburg, OR
Island City, OR
Portland, OR
Tillamook, OR
Brookings, SD
Claire City, SD
Corsica, SD
Corson, SD
Dupree, SD
Eureka, SD
Faith, SD
Gettysburg, SD
Huron, SD
Lemmon, SD
Selby, SD
Sioux Falls, SD
Watertown, SD
Winner, SD
Amarillo, TX
Anton, TX
Friona, TX
Hereford, TX
Lubbock, TX
Muleshoe, TX
Plainview, TX
Richmond, TX
Ropesville, TX
Westminster Station, VT
Auburn, WA
Black Diamond, WA
Chimacum, WA
Everson, WA
Fairfield, WA
Gig Harbor, WA
Kennewick, WA
Lynden, WA
Mead, WA
Moses Lake, WA
Nooksack, WA
Othello, WA
Pasco, WA
Poulsbo, WA
Quincy, WA
Rockford, WA
Royal City, WA
Saint John, WA
Spokane Valley, WA
Tacoma, WA
Yakima, WA
Green Bay, WI
Pittsville, WI
Superior, WI
Beiseker, Canada
Burlington, Canada
Montréal, Canada
Rolling Hills, Canada
Saskatoon, Canada
Standard, Canada
Winnipeg, Canada