CHS Inc. reported net income of $522.9 million on revenues of $11.4 billion for the first quarter ended Nov. 30, 2023, down from the prior year’s record $782.6 million and $12.8 billion, respectively. The cooperative posted record earnings of $1.9 billion for the year-ending Aug. 31, 2023 (GM Nov. 10, 2023).
“CHS earnings were strong for the first quarter, despite a relative decline from last year’s record earnings,” said Jay Debertin, CHS President and CEO. “Our focus on execution and efficiency improvements bolstered results across all operations. We continue to see the benefits of our diversified ag and energy portfolio, our strategic footprint, and investments in our supply chain.”
Nitrogen Production pretax earnings were $36.5 million, down 62% from the year-ago $96.9 million, reflecting lower equity income from CF Nitrogen due to decreased UAN and urea market prices.
Ag segment pretax earnings were $169.7 million, off 41% from the year-ago $287.3 million. Revenues were $8.7 billion versus the year-ago $9.6 billion.
CHS reported increased demand for wholesale and retail agronomy products. Wholesale crop nutrient sales volumes were up 16% during the quarter, to 1.87 million st from the year-ago 1.61 million st. However, selling prices remained lower due to global market conditions.
Robust meal and oil demand drove strong earnings in the oilseed processing business that were offset by weak US export demand for grains and oilseeds. Margins were down for grain, oilseed, and oilseed processing. In addition to exports, margins were also impacted by mark-to-market timing adjustments.
“The success of our domestic soybean and canola processing business and our international origination capabilities have helped us add value to our farmer-owners’ businesses,” Debertin said.
Energy pretax earnings were $266.8 million, down 33% from the year-ago $396.6 million. Total revenues were $2.92 billion, down from $3.34 billion. The unit experienced favorable market conditions in its refined fuels business, reflecting sustained global demand. Refining margins, however, decreased compared to the highs in the previous year due to trade flows returning to more normal levels.
CHS reported favorable costs for renewable energy credits and higher margins in the propane business.