Copyright Star Tribune
The nation’s largest ag co-operative sees another down year on the horizon as American tariffs reshape global trade. Inver Grove Heights-based CHS warns of “a weak export market for U.S.-sourced agricultural products” amid a glut of cheap grain from other countries, according to the annual report released Wednesday. For CHS, that means another year of hard-won profits. “We currently expect global supply and demand factors impacting energy and agricultural commodities to be unfavorable for us,” the company wrote. For the fiscal year that ended in August, CHS profits fell 45% to $598 million. Revenue dropped 11% to $35.5 billion even as the co-operative was able to move more grain — just not enough to offset lower prices. “In a year shaped by unfavorable market conditions, including international trade and tariffs, CHS delivered strong volumes across our businesses, demonstrating the resilience of our operations and the co-operative system,“ CEO Jay Debertin said in a statement Wednesday. Even with the profit-margin pressure, CHS has not announced any restructuring or layoffs like fellow agribusinesses ADM and Cargill have in the past year. Headcount at CHS remained steady at around 10,700 employees as of the end of August, according to the annual report. “In a challenging market environment, we’re focused on delivering value through operational excellence and cost management to support our growth initiatives on behalf of our owners,” Debertin said. The cooperative sells crop inputs and agronomy services; buys, moves and markets grain globally; owns two oil refineries and the Cenex brand; and produces nitrogen fertilizer in a joint venture. “CHS has a strategic path forward and is committed to advocating on behalf of U.S. agriculture while building even stronger supply chains in grain, agronomy and energy to serve our owners,” Debertin said. Patronage has fallen to its lowest level in years, however, with $120 million going to farmer-owners and member co-operatives through the next year.
