CHS Inc. reported that wholesale crop nutrient volumes were up 26 percent for the six months ending Feb. 28, 2011. CHS cited good weather during the fall fertilizer season. Revenues were $986.5 million, up from the year-ago $620 million. CHS cited higher fertilizer prices and increased volumes. The average price reflected an increase of $87/st or 27 percent over the year-ago period.
Six month wholesale crop nutrient earnings improved $21.9 million from the year-ago period due to increased volumes and improved margins. Country operations earnings were up $38.7 million, due to higher grain volumes and increased margins, including new acquisitions.
Wholesale crop nutrient volumes were off 2 percent during the second quarter ending Feb. 28, however, revenues were up at $427.5 million from the year-ago $339 million. The increase was attributed to higher fertilizer prices, with the average sales price of all fertilizer sold reflecting an increase of $96/st or 29 percent over the year-ago period.
Earnings from the wholesale crop nutrients business improved $9 million for the three months ending Feb. 28, compared to the year-ago period, primarily due to improved margins. Its country operations earnings increased $8.6 million over the year-ago quarter, primarily due to higher grain volumes, increased retail margins, and new acquisitions.
CHS reported a 57 percent increase in crop nutrient derivative contracts for both purchase and sales agreements as of Feb. 28, 2011. Crop nutrient tons under the purchase contracts were 1.63 million st on that date versus the year-ago 1.04 million st. Sales contracts were 2.22 million st, up from 1.42 million st a year ago.
Crop nutrient inventories as of Feb. 28 were valued at $381.5 million, up from the year-ago $246.2 million.
As of March 31, 2011, CHS said it has dissolved its United Harvest joint venture which operated two grain export facilities in Washington. As a result, CHS is now operating its Kalama, Wash., export facility and its jv partner is operating the Vancouver, Wash., facility. CHS said during the next 18-24 months it will continue building upgraded infrastructure and additional capacity at Kalama. Until that construction is complete, CHS says reduced exports in that region will have a negative impact on earnings of the Ag Business unit, but it does not believe the impact will be material.
CHS also confirmed that it’s signed a definitive agreement on March 17 to sell its 45 percent stake in Multigrain S.A. to one of its joint venture partners, Mitsui & Co. Ltd. for $225 million. It expects the Ag Business unit will recognize a significant gain from this in the third quarter. Mitsui had said earlier that it had agreed to buy the unit (GM Jan. 31, 2011).