CHS reports a net income of $346.7 million for the first half of fiscal 2018

CHS income fiscal 2018

CHS Inc., the nation’s leading farmer-owned cooperative and a global energy, grains and foods company, today reported net income of $346.7 million for the first half of its 2018 fiscal year (six-month period ended Feb. 28, 2018), compared to net income of $223.7 million for the same time period a year ago.

Consolidated revenues for the first half of fiscal 2018 were $14.9 billion, down from $15.4 billion for the first half of fiscal 2017. Pretax income was $185.0 million and $249.1 million for the first half of fiscal 2018 and 2017, respectively.

“CHS made meaningful progress in the first half of fiscal year 2018 as we continue to position CHS for higher performance,” said CHS President and CEO Jay Debertin. “The global environment for our businesses serving agriculture remains challenged and we continue to drive towards our priorities of better efficiency, strengthening relationships, and a more focused business portfolio.  We have more work to do and we are seeing improvement that will make us a stronger company.”

For the second quarter of fiscal 2018 (Dec. 1, 2017 through Feb. 28, 2018), CHS reported net income of $166.7 million compared with earnings of $14.6 million for the same period in fiscal 2017. Revenues for the second quarter of fiscal 2018 were $6.9 billion, down from $7.3 billion for the second quarter of fiscal 2017.

Results for the quarter were attributed to:

  • Increased margins at the Company’s refineries.
  • Decreased volumes and margins within the Ag segment.
  • A significant tax benefit recorded during the quarter related to the Tax Cuts and Jobs Act of 2017.

For the first half of fiscal 2018, reporting segment results include:

Energy

  • Energy generated pretax income of $122.1 million during the first half compared to $86.6 million during the same period last year.
  • The $35.5 million increase reflects improved market conditions in the company’s refined fuels business, primarily driven by wider manufacturing margins in our refining operation.

Ag

  • The Ag segment, which includes domestic and global grain marketing and crop nutrients businesses, renewable fuels, local retail operations and processing and food ingredients, generated pretax income of $43.6 million for the six months ending Feb. 28, 2018. That compares to $99.9 million for the same period the previous fiscal year.
  • The $56.3 million decrease was primarily the result of a decline in grain and oilseed volumes in the grain marketing and country operations businesses, and lower prices across the majority of the Ag sub-segments.

Nitrogen Production

  • This segment is comprised of the Company’s investment in CF Industries Nitrogen, LLC (CF Nitrogen) and generated pretax income of $10.2 million during the first half of fiscal 2018 compared to $32.4 million during the same time in fiscal 2017.
  • The $22.3 million decrease in earnings was primarily due to a gain in fiscal 2017 of $29.1 million associated with an embedded derivative asset that did not reoccur in fiscal 2018. This was partially offset by improved prices on urea, produced by CF Nitrogen.

Corporate and Other

  • This category is primarily comprised of the company’s wheat milling joint venture (Ardent Mills), its investment in Ventura Foods, LLC (Ventura Foods) and its financing, hedging and insurance operations. Corporate and Other generated pretax income of $9.1 million in the first half of 2018 compared to $30.2 million for the same period of fiscal 2017.
  • The $21.1 million decrease was due to reduced interest revenue from the company’s financing business resulting from the sale of loans receivable and lower earnings from our investment in Ventura Foods.

CHS Elburn Harvest for Hunger raises over 700 pounds of food for local food banks


Students from Millbrook Junior High School’s 5th grade class enjoy their victory pizza party.

CHS Elburn partnered with Millbrook Junior High School to help fill local shelves. Millbrook Junior High School students raised over 400 pounds of food, approximately 445 items, for CHS Harvest for Hunger annual food, funds and grain drive organized by the Country Operations division of CHS, the nation’s leading farmer-owned cooperative.

Since the launch of CHS Harvest for Hunger drive in 2011, more than $4.7 million and 3.4 million pounds of food have been raised.

The food drive was a competition among grade levels with the school’s anti-bully group running the competition. Daily totals announced over the PA system encouraged the students to continue to bring in donations to help their class. The 5th grade class collected the most items and received a pizza party provided by CHS Elburn.

CHS Elburn locations also collected non-perishable donations at its facilities. This year the cooperative, combined with the donations from Millbrook Junior High, raised just over 700 pounds of food.  The food was distributed to pantries in the communities we do business in.

“Giving back to the communities in which we live and work is a core value for us.  Hunger is a reality for many in our communities and we may not even know it,” says Phil Farrell, CHS Elburn general manager.  “Through CHS Harvest for Hunger, we can make a difference.”

 

Demonstrating safety in the communities where we work

ResponsibleAg

CHS now has more than 100 ResponsibleAg certified facilities from its CHS Country Operations and CHS Agronomy divisions. Out of all U.S. fertilizer facilities receiving this certification, CHS represents 12 percent of the total.

ResponsibleAg was started in 2014 to assist agribusinesses as they sought to comply with federal environmental, health, safety and security rules regarding the safe handling and storage of fertilizer products. The rigorous application process includes a checklist of more than 320 questions about federal regulatory requirements. To be certified as a ResponsibleAg facility, locations must be 100 percent compliant with the entire checklist.

“We strongly believe in defending the value of our owners’ assets,” said Pete Mutschler, director, Environment, Health and Safety, CHS Country Operations, and secretary of the ResponsibleAg Board of Directors. “We feel we are doing a very good job of managing fertilizer in a responsible way and felt strongly about joining an organization that will verify that we are doing things in the right way. ResponsibleAg gave us the actions we needed to back up our words. It also demonstrates to the communities in which we operate that we value their relationships as neighbors.”

CHS Ag Services based out of Warren, Minn., has 18 of 19 agronomy facilities certified through ResponsibleAg.

“It gives us another chance to look through our facilities from a different perspective,” said Bernie Perrault, safety coordinator, CHS Ag Services. “Talking with all of the location managers, they have actually picked up a few items that we probably never would have looked at before. It’s been a good learning experience.”

CHS sought out certification as a way to show its owners how serious the co-op is about safety and protecting the value of owners’ assets.

Students storm the Hill with fresh perspectives and CHS support

When people ask CHS Government Affairs staff what it’s like to work as a lobbyist in Washington, D.C., they’re always curious about how the political landscape has changed in recent years. Sarah Gallo, director, CHS Government Affairs, is happy to share anecdotes, but she’d rather discuss how the conversation about agriculture has evolved. Students, farmers and the ag industry will carry that message to Capitol Hill on National Ag Day, to be celebrated March 20 in Washington, D.C., and across the country.

“In meetings with policy makers, the viewpoints of producers are considered alongside those of both traditional and non-traditional allies and opponents,” Gallo said. “And while the diversity of voices should be applauded, it also serves as a reminder that being present in policy and regulatory conversations is critical.”

Gallo said the 100 FFA and AFA (Agriculture Future of America) students visiting legislators on National Ag Day sends a powerful message. She will meet with the students to share tips on how to succinctly deliver talking points to time-starved members of the Senate, the House of Representatives, their staff and aides.

“Agriculture is an exciting and innovative sector in our country. Students participating in Congressional meetings during National Ag Day activities can provide important perspectives as lawmakers craft legislation and regulations that will shape the farming industry for decades to come,” Gallo said. CHS has sponsored National Ag Day events for the past 25 years.

Gallo joined CHS in 2013, and said the fast pace and work is invigorating. “There is a certain thrill about walking the halls of Congress and participating in the democratic process. I am proud to work for CHS and have opportunities to interact with producers, particularly when the conversations are centered on navigating the complex, and often confusing, intersection of policy and politics. I strongly believe that this close connection to the people for whom I advocate has made me a more effective lobbyist.”

Gallo shares her commitment to agriculture in a blog, saying National Ag Day is a great way for all Americans to recognize and celebrate the value of American farmers and the agricultural industry. But, she said, it doesn’t have to end there. “Being an advocate for agriculture at home, in your neighborhood and in your community is what shifts the minds of lawmakers and transforms the landscape so that future generations can thrive in rural America.”

CHS also sponsors the National Ag Day essay contest, awarding $1,000 scholarships to two students submitting the winning written or video essays.

Hunger happens everywhere. Farmers, CHS team up to fight hunger in rural America

 

CHS Harvest for Hunger fights hunger in rural America

 

CHS is teaming up with local farmers to fight hunger in rural America. The CHS Harvest for Hunger food, grain and fund drive begins March 1 and continues through March 20 at your nearest CHS location.

“CHS does much of its business in rural America, and even though these rural communities are growing the crops that feed a hungry world, that doesn’t mean there isn’t hunger right here — the family next door, the neighbor down the street,” says Rick Dusek, executive vice president, CHS Country Operations. “We may not know who in our communities are going hungry, but through our CHS Harvest for Hunger campaign, we are helping local and regional food shelves feed those people in need.”

CHS Harvest for Hunger logo

Food insecurity exists in every country in America, according to Feeding America, but food insecurity is generally higher in rural households than urban. And one in six children in the U.S. face hunger.

Since 2011, CHS has raised more than $4.7 million and 3.4 million pounds of food through its Country Operations business units. Again this year, CHS locations across the United States are planning fun and interactive ways to rally the communities where they live and work to raise food and funds to fight hunger.

Financial donations are encouraged as they give food banks additional buying power to provide nutritious food at deeply discounted rates; $1 equals 6 pounds of food for area food banks. But food and grain donations are also accepted. Every donation counts.

“The food and funds raised by CHS Harvest for Hunger go directly back to local and regional food banks to help fill their shelves,” Dusek. “We are proud to partner with them to make every dollar stretch further.”

CHS Elburn will accept non-perishable goods from March 1 through March 20 at the following locations: Sycamore Agronomy, Sycamore Main Office, Elburn Office, Meredith Road, Newark Agronomy and Newark Grain. The food will be delivered to local food pantries.. When rural communities work together, they make a huge impact in the lives of those in need.

Help CHS Elburn Fight Hunger through CHS Harvest for Hunger 2018

CHS Elburn is gathering donations of food to help fight hunger. As part of CHS Harvest for Hunger food and fund drive, CHS Elburn will accept non-perishable goods from March 1 through March 20 at the following locations: Sycamore Agronomy, Sycamore Main Office, Elburn Office, Meredith Road, Newark Agronomy and Newark Grain. The food will be delivered to local food pantries.

Hunger is a reality for more than 40 million people in America, including 13.1 million children. Every pound raise through CHS Harvest for Hunger will go to local shelves to help friends and neighbors right here in our community. Help us fill the shelves by dropping off a donation at a location near you!

CHS Elburn Announces Board Election Results

Kent Kleckner Roger Nelson

CHS Elburn is pleased to announce the election of two new members to our Board of Directors: Roger Nelson and Kent Kleckner. Nelson and Kleckner were elected to a three-year term on the 7-member board at the CHS Elburn Annual Meeting on Feb. 12.

Kent Kleckner began farming in 1994 with his father in Maple Park, Illinois. In 2011 his father retired, and Kent is now farming 1,400 acres of corn and soybeans. He graduated from Joliet Junior College with a degree in Agricultural Business.

Roger Nelson began farming in 1975 with his brother as Nelson Partnership in Malta, IL. He farms 1,200 acres of corn and soybeans. Roger and his brother were farrow to finish hogs until 1997 and joined a sow center and presently are wean to finish marketing 3000 plus per year. Roger received his Bachelor’s degree in Agronomy and Ag Economics from University of Illinois Champaign Urbana

Other directors selected as offices for 2018 were:

  • Chris Gould, Board Chair
  • Richard Biddle, Vice Chair

 

CHS Elburn would also like to thank outgoing board members, Ed Gorenz and Mark Schramer, for their time spent on the CHS Elburn board.

CHS Elburn Annual Meeting

Top 4 reasons to attend your annual meeting

On February 12, 2018, CHS Elburn will hold our annual meeting at 5:30pm at the Sycamore main office located at 108 N. Main Street, Sycamore, IL. As an owner, you’re invited. Here are the top four reasons why you should make a point to attend:

#4: Network with other co-op members, who often are your friends and neighbors. It’s a great time to share news and new ideas over a cup of coffee. And we’ll have lots of coffee.

#3: Hear the latest on products and services, capital projects, budgets, how our co-op performed last year and much more.

#2: Make your voice heard. Ask questions and take the opportunity to comment on proposed plans and strategies for our co-op’s future. No other kind of business lets you have a say in how it works, so speak up!

#1:Find out the results of the Producer Board election. In a co-op, you get to choose who sets the policies and direction for the organization when you vote for your producer board. We sent the ballots out in early January, come see who your new board members are!

We hope to see you there!

Now Accepting Applications | CHS Elburn Scholarship Fund

chs_elburn_2c

CHS Elburn is proud to announce that we will be offering graduating high school seniors and students currently enrolled as an undergraduate at a university, a chance to apply for a CHS Elburn Scholarship. Last year, 12 students were awarded with a $1,000 scholarship.

The CHS Elburn Scholarship fund was created through an endowment with the DeKalb County Community Foundation, a nonprofit foundation that enhances the quality of life in DeKalb County through endowments and donor services, stewardship, grantmaking and community initiatives. The fund was created as a lasting memory to the legacy created by Elburn Cooperative and to support the communities that strengthen the cooperative.

In order to qualify DCCF Logofor these scholarships, the applicants must meet the following criteria:

  • Be a family member of a current CHS Elburn customer who conducts a minimum of $10,000 of business per year or be a family member of a current CHS Elburn employee.
  • Be a graduating high school senior or student currently enrolled as an undergraduate in an accredited college or university anywhere in the United States.
  • Pursuing an undergraduate degree in any field of study. Preference may be give to those in Agriculture-related fields.
  • Previous scholarship recipients may apply, although preference may be given to those who have not been awarded a scholarship in the past.

 

The CHS Elburn Scholarship Application can be found on the DeKalb County Community Foundation website. The completed scholarship application must be returned to the DeKalb County Community Foundation at 475 DeKalb Ave., Sycamore, IL 60178 by 5:00 p.m. on March 15, 2018.

We are proud to support our local youth in agriculture. It pays to invest in our local future agricultural business leaders.

 

 

CHS reports $180.1 million first quarter earnings for fiscal 2018

CHS President and CEO, Jay Debertin

CHS reported net income of $180.1 million for the first quarter of its 2018 fiscal year (three-month period ended Nov. 30, 2017), compared to net income of $209.2 million for the same period a year ago.

Consolidated revenues for the first quarter of fiscal 2018 were $8.0 billion, the same as fiscal 2017. Pretax income was $199.6 million and $225.6 million for the first quarter of fiscal 2018 and 2017, respectively.

“Despite challenging market conditions, CHS experienced a solid first quarter thanks to our continued focus on three key priorities: strengthening relationships, sharpening operational excellence and restoring financial flexibility,” said CHS President and Chief Executive Officer Jay Debertin. “In the first quarter, we recorded solid earnings from our businesses and reduced long-term debt. These actions are helping to strengthen and grow CHS.”

 

For the first quarter of fiscal 2018, reporting segment results were:

Energy

  • Energy generated pretax income of $113.1 million during the first quarter, compared to $70.0 million during the same period last year.
  • The $43.1 million increase was primarily driven by improved margins within refined fuels.

Ag

  • The Ag segment, which includes domestic and global grain marketing and crop nutrients businesses, renewable fuels, local retail operations, and processing and food ingredients, generated pretax income of $74.5 million for the three months ended Nov. 30, 2017, compared to $109.2 million for the same period the previous fiscal year.
  • The $34.7 million decrease was primarily the result of lower margins in grain marketing, processing and food ingredients and renewable fuels. Lower volumes in grain marketing and processing and food ingredients also contributed to the decrease.
  • The decrease was partially offset by an increase in earnings in the crop nutrients and country operations businesses.

Nitrogen Production

  • This segment is comprised of the company’s investment in CF Industries Nitrogen, LLC (CF Nitrogen), and generated pretax income of $5.7 million during the first quarter of fiscal 2018, compared to $27.0 million during the same time in fiscal 2017.
  • The decrease in earnings was primarily due to a gain of $29.1 million from an embedded derivative associated with CF Nitrogen that was recognized in fiscal 2017. There was no comparable gain in the current fiscal year.
  • This decrease was partially offset by higher urea and urea ammonium nitrate prices.

Food

  • This segment is comprised of the company’s investment in Ventura Foods, LLC (Ventura Foods), and generated pretax income of $1.0 million in the first quarter of fiscal 2018, compared to $10.6 million during the same period of fiscal 2017.
  • The decrease in earnings was due to lower margins at Ventura Foods.

Corporate and Other

  • This category is primarily comprised of the company’s wheat milling joint venture and its financing, hedging and insurance operations, and generated pretax income of $5.3 million in the first quarter of 2018, compared to $8.7 for the same period of fiscal 2017.
  • The decrease in earnings was due to lower earnings from the wheat milling joint venture and less interest revenue due to amending a receivables securitization agreement in late FY17, pursuant to which we no longer receive interest income from those receivables.

CHS Inc. Earnings (millions $)

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