CHS Breaks Earnings Record, Raises Bar for Nation’s Co-ops

The agricultural co-op’s net income totaled $1.26 billion for the fiscal year that ended in August, up 31 percent from the prior year; earnings during the fourth quarter, meanwhile, jumped 75 percent to $360.9 million.

Inver Grove Heights-based CHS, Inc., said Wednesday that its net income totaled $1.26 billion during its last fiscal year, a milestone that marks the first time a U.S. agricultural cooperative has surpassed $1 billion in annual earnings.
Net income for the fiscal year that ended August 31 rose 31 percent from the prior fiscal year’s $961.4 million, which set the previous record. CHS set a new record for revenues too, which totaled $40.6 billion in fiscal 2012—up 10 percent from the previous record of $36.9 billion reached in fiscal 2011.
The co-op attributed its strong performance to increased values for the energy, crop nutrients, grains, and other commodities that comprise the majority of its business.
“The strength of our diverse CHS business portfolio, along with a strong domestic and global footprint, combined in fiscal 2012 to allow us to successfully navigate continued market volatility and deliver record results for the U.S. farmers, ranchers, and cooperatives who own us,” CHS President and CEO Carl Casale said in a statement.
CHS supplies energy, crop nutrients, livestock feed, food, and food ingredients; it also offers various business services like insurance and financial management. Based on its earnings during the last fiscal year, it expects to return nearly $600 million in cash to its owners during fiscal 2013—representing yet another record.
Meanwhile, for the fourth quarter of fiscal 2012, CHS’ earnings totaled $360.9 million, up 75 percent, and revenue was $11 billion, up 4 percent.
CHS said that strong petroleum refining margins at its Montana and Kansas refineries helped boost performance in its energy segment, which drove overall earnings during the quarter. The co-op’s propane and transportation businesses also contributed. Meanwhile, the lubricants and renewable fuels segments lagged their performance in fiscal 2011.
CHS was the country’s largest-grossing agricultural cooperative based on 2010 revenue, which totaled $25.3 billion. Arden Hills-based Land O’Lakes ranked second with revenue totaling $11.1 billion in 2010 (its 2011 revenue was $12.8 billion). According to a report released earlier this year by the U.S. Department of Agriculture, 11 of Minnesota’s agricultural co-ops are among the 100 top-grossing in the nation based on their 2010 revenue.