CHS Inc. reports that wholesale crop nutrient volumes were up 17 percent for the second quarter ending Feb. 28, 2010. Revenues were $339 million, up from the year-ago $325 million, while earnings improved $37.8 million over the year-ago quarter. The average fertilizer price during this period was off $40/st, or 11 percent, from the year-ago quarter.
Wholesale crop nutrients recorded a lower-of-cost adjustment of $2 million during second quarter 2010, versus $56.8 million in second quarter 2009.
Six-month wholesale crop nutrient revenues were down to $620 million from the year-ago $959.3 million. Earnings improved $77.3 million over the year-ago period. The average price of fertilizer for the period was off $201/st, or 38 percent. Volumes increased 4 percent.
Crop nutrient inventories were valued at $246.2 million as of Feb. 28, 2010, versus the year-ago $380.4 million. Inventories as of Aug. 31, 2009, were $114.8 million.
As of Feb. 28, 2010, CHS said fertilizer commodity prices affecting its wholesale crop nutrients and country operations retail businesses generally increased between 9-39 percent, depending on specific product, compared to prices on Aug. 31, 2009, with the exception of potash, which decreased about 20 percent.
Agriliance LLC continues to exist as a 50-50 joint venture with Land O’Lakes Inc. As of March 2010, it has sold most of its retail facilities, with some still available for repositioning in Florida. During the six months ending Feb. 28, 2010, CHS received $90 million in cash distributions from Agriliance as a return on capital, primarily from the sale of retail facilities. CHS received $13.7 million as a gain on investment from the sale of the retail outlets.
The CHS Ag Business sector, which includes crop nutrients, saw a healthy uptick in income before taxes for the second quarter ending Feb. 28, 2010, to $70.1 million on sales of $3.6 billion from the year-ago $13.9 million and $3.4 billion.
Despite the Ag uptick, CHS overall saw a drop in net income, to $86.2 million on sales of $5.9 billion from the year-ago $101.6 million and $5.2 billion, respectively. The drop was due to other CHS units – Energy down to $16.4 million from $93.6 million, and Processing at $6.2 million, down from $9.2 million.
Six-month Ag income was $161.8 million on sales of $7.4 billion, up from the year-ago $33.6 million and $8.4 billion.
Six-month CHS net income was $208.7 million on sales of $12.1 billion, down from the year-ago $261 million and $12.9 billion. Energy saw a huge drop in income, to $30.6 million from the year-ago $300.5 million, while Processing saw a significant improvement, to $37 million from a year-ago loss of $43.5 million.