CHS Inc. reported net income of $1.9 billion for the fiscal year ending Aug. 31, 2023, surpassing the previous high, which was the prior year’s $1.7 billion. Revenues were down at $45.6 billion from the year-ago $47.8 billion.
“The support of our member cooperatives and farmer-owners, dedication of our employees, exceptional operational performance, and favorable market conditions enabled us to achieve the strongest earnings in our history during fiscal year 2023,” said Jay Debertin, President and CEO. “As a result, CHS intends to return $730 million in cash patronage and equity redemptions to our member cooperatives and farmer-owners in fiscal year 2024, demonstrating our commitment to sharing profits with the producers, local cooperatives and rural businesses that work with us to help feed people around the world.”
“Our shared success showcases the unique power of the cooperative system to keep adapting and advancing through the uncertainties that can come with agriculture,” he added. “We will continue to collaborate, innovate, and invest to meet the growing global demand for agricultural products. A diversified portfolio, coupled with strategic investments in supply chain capabilities and emerging market opportunities, positions CHS to create a better company for the future and to maximize value for our owners and customers.”
The CHS Energy segment posted earnings of $1.075 billion, up from the year-ago $616.6 million. CHS cited a significant increase in refined fuels income due to higher refining margins and favorable pricing of heavy Canadian crude oil, partially offset by the impact of decreased production volumes at its Montana refinery due to major planned maintenance. The segment also saw higher margins for its propane business, which was attributed to favorable market conditions.
Earnings from the Ag segment were off 37%, to $411.8 million from $657.6 million. CHS cited decreased margins for wholesale and retail agronomy products, which experienced market-driven price declines compared to historically high prices in the previous year.
Lower margins for ethanol were reported as market prices declined, and there was a negative impact of mark-to-market adjustments on grain and oilseeds. However, margins increased in the oilseed processing business, bolstered by strong meal and oil demand.
Nitrogen Production earnings were off 45%, to $260.8 million from the year-ago $478 million. This reflected lower equity income from the CHS investment in CF Nitrogen attributed to decreased market prices for urea and UAN.
As for the $730 million in patronage, CHS had reported that figure back in September and at that time said it would be split $365 million in cash patronage and $365 million as equity redemptions (GM Sept. 15, p. 26). The $730 million patronage was down from the prior year’s $1 billion, which included $500 million each as cash equity and equity redemptions.
In total, CHS said it will have returned some $3.2 billion to its owners over the past 10 years.