US agri co-op reports profit of $881m for first three quarters of 2014

A leading agri business in the United States, CHS Inc reported a profit of $881m for the first nine months of its 2014 fiscal year. CHS, which came...

A leading agri business in the United States, CHS Inc reported a profit of $881m for the first nine months of its 2014 fiscal year. CHS, which came first in the annual NCB Co-op 100 listing released by the the National Cooperative Bank last year, is the nation’s biggest co-operative business in terms of turnover.

The profit represents a 1% increase from the $869.6m reported for the same period (Sept 2013-May 2014) a year ago. The turnover for the nine months amounted to $32.7bn, down 3% from $33.5b for the same period in 2013, was influenced by lower average grain prices.

Based in Minnesota, CHS was formed as a result of various mergers of farmer-owned co-operatives. In 1998 the Farmers Union Central Exchange (Cenex), which had been set up in 1931, merged with Harvest States Cooperatives to form Cenex Harvest States and changed its name to CHS Inc. in 2003.

The co-operative is owned by farmers and is active in the agricultural, food and energy sectors. It supplies energy, crop nutrients, grain marketing services, animal feed, food and food ingredients to over 75,000 producer owners and other customers, along with business solutions including insurance, financial and risk management services.

The group, which established a new flour milling joint venture, witnessed a stronger performance of its retail agronomy, wholesale crop nutrients and grain marketing businesses. This led to increased profits of $379.5m in the third quarter on 2014 (March-May), up 51 percent from $250.8 million for the same period in fiscal 2013.

Its propane, renewable fuels marketing lubricants and transportation operations also had strong performances. However, energy segment earnings declined due to lower margins in refining (the difference between the wholesale value of the oil products a refinery produces and the value of the crude oil from which they were refined).

The retail agronomy business of the group (CHS Ag) also reported increased profit for the first third quarters as a result of strong logistical performance within grain marketing, higher agronomy margins and service income generated by the company’s Country Operations retail locations, and improved wholesale crop nutrients performance.

CSH also recently announced its executive vice president, CHS Country Operations, John McEnroe, would retire at the end of the year. He will be replaced by Lynden Johnson, currently executive vice president of CHS Business Solutions. Mr McEnroe joined the co-operative as a manager trainee and held a variety of grain marketing and retail management positions, including being named regional director in 1984, vice president in 2000, and senior vice president in 2003. In 2012, he was promoted to his current role as executive vice president, CHS Country Operations. Throughout his 35-year career at CHS, he has played a significant role in this division’s growth, which currently serves 75,000 producers.

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