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CHS INC

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Business Summary

CHS Inc. is the nation's leading integrated agricultural cooperative, providing grain, food, agronomy, and energy resources globally . The company is owned by farmers, ranchers, and member cooperatives across the United States, and also has preferred shareholders whose shares are traded on Nasdaq . CHS generates revenue by buying commodities from and providing products and services to individual agricultural producers, local cooperatives, and other companies, including members and nonmember customers, both domestically and internationally . Its business model involves a wide range of products and services, from agricultural inputs like fuels, farm supplies, crop nutrients, and crop protection products, to agricultural outputs such as grain and oilseed, processed grain and oilseed, renewable fuels, and food products . A portion of its operations are conducted through equity investments and joint ventures, with their income or loss included in net income using the equity method of accounting . Earnings from cooperative business are allocated to members and patronage-basis nonmembers, primarily as patronage refunds in cash or capital equity certificates, which may be redeemed over time at the Board's discretion . Non-patronage earnings are taxed and retained as unallocated capital reserves .

The Energy segment derives its revenues from refining, wholesaling, and retailing petroleum products . This includes processing crude oil into refined products at refineries in Laurel, Montana, and McPherson, Kansas, and selling them under the Cenex® brand to member cooperatives and independent retailers . The Laurel refinery processes approximately 65,000 barrels of crude oil per day , producing about 38% gasoline, 43% diesel fuel and other distillates, 12% asphalt, 6% petroleum coke, and 1% other products . The McPherson refinery processes approximately 115,000 barrels of crude oil per day , yielding about 50% gasoline, 43% diesel fuel and other distillates, 5% petroleum coke, and 2% other products . In fiscal 2025, Energy segment revenues, after intersegment eliminations, were $7.6 billion . Approximately 75% of refined fuel products are marketed to members, with the remainder sold to nonmembers . The segment sold approximately 1.5 billion gallons of gasoline and 1.7 billion gallons of diesel fuel in fiscal 2025 .

The Ag segment encompasses global grain and processing, ag retail, and wholesale agronomy businesses, facilitating the production, purchase, sale, and use of agricultural products . Its global grain marketing operations purchase grain and oilseed directly from agricultural producers and elevator operators, primarily in the midwestern and western United States . The processing business crushes approximately 147 million bushels of soybeans and canola annually, producing about 3.1 million short tons of meal and flour and 1.9 billion pounds of edible and inedible oil . The renewable fuels business annually produces 267 million gallons of fuel-grade ethanol, 71 million pounds of inedible corn oil, and 645,000 tons of dried distillers grains with solubles (DDGS) . The ag retail business operates approximately 400 agri-operations locations across 28 business units . The wholesale agronomy business delivers crop nutrients and crop protection products from manufacturers or through 11 warehouse terminals . In fiscal 2025, Ag segment revenues, after intersegment eliminations, were $27.7 billion .

The Nitrogen Production segment consists of an approximate 8.38% membership interest in CF Industries Nitrogen, LLC ("CF Nitrogen") , a strategic venture with CF Industries Holdings, Inc. . This investment, valued at approximately $2.5 billion on August 31, 2025 , entitles CHS to purchase up to 1.1 million tons of granular urea and 580,000 tons of urea ammonium nitrate ("UAN") annually through fiscal 2096 . Other business operations, including financing and hedging, and nonconsolidated joint ventures like Ventura Foods, LLC (50% interest, $527.2 million investment on August 31, 2025 ) and Ardent Mills, LLC (12% interest, $237.1 million investment on August 31, 2025 ), are aggregated in Corporate and Other .

For the fiscal year ended August 31, 2025, total revenues were $35.462 billion , a decrease from $39.261 billion in fiscal 2024 . Cost of goods sold was $34.325 billion , resulting in a gross profit of $1.136 billion and a gross margin of 3.2% . Marketing, general and administrative expenses were $1.046 billion . Operating earnings were $90.755 million , representing an operating margin of 0.3% . Interest expense was $146.079 million , and other income was $100.431 million . Equity income from investments contributed $569.665 million . Income before income taxes was $614.772 million . Income tax expense was $16.777 million , leading to a net income of $597.995 million . Net income attributable to CHS Inc. was $597.917 million . Cash and cash equivalents stood at $327.826 million as of August 31, 2025, down from $794.865 million in 2024 . Total notes payable were $1.152 billion , and long-term debt, including current maturities, was $1.835 billion . Total equities were $11.080 billion . Net cash provided by operating activities was $635.787 million .

Year-over-year, total revenues decreased by $3.798 billion from $39.261 billion in fiscal 2024 to $35.462 billion in fiscal 2025 . Gross profit decreased by $614.513 million from $1.751 billion in fiscal 2024 to $1.136 billion in fiscal 2025 , with gross margin contracting from 4.5% to 3.2% . Operating earnings declined significantly from $584.358 million in fiscal 2024 to $90.755 million in fiscal 2025 . The Energy segment's revenues decreased by $1.131 billion (12.9% ) to $7.635 billion , primarily due to decreased selling prices for refined fuels . The Ag segment's revenues decreased by $2.668 billion (8.8% ) to $27.748 billion , driven by decreased selling prices across most product categories, including a $2.7 billion decrease for grain and oilseed , a $453.5 million decrease for oilseed processing , and a $111.3 million decrease for renewable fuels . These decreases were partially offset by increased volumes, including $590.7 million for wholesale and retail agronomy products and $446.7 million for grain and oilseed . Equity income from investments increased by $89.802 million (18.7% ) to $569.665 million , largely due to a gain on the sale of a business recognized by Ventura Foods . Interest expense increased by $42.015 million (40.4% ) to $146.079 million due to a higher short-term notes payable balance and higher weighted-average interest rates .

During fiscal 2025, the company completed a planned major maintenance shutdown at its McPherson, Kansas, refinery during the third quarter, which reduced refined fuels production volumes and the sales mix of higher-margin, produced refined fuels products . The EPA granted petitions for an extension of the small refinery exemption ("SRE") for the Laurel, Montana, refinery for compliance years 2019 through 2024, resulting in an approximately $90 million benefit during the fourth quarter of fiscal 2025 . The company acquired West Central Ag Services ("WCAS") during the second quarter of fiscal 2025, which included $59.5 million in goodwill 84 and $62.5 million in intangible assets . The company also announced a mutual agreement with MKC to begin the process of ending their joint venture in Producer Ag on October 10, 2025 .

Business Outlook

The company anticipates that various macroeconomic factors will continue to drive uncertainty and instability in global energy and agricultural commodity markets, as well as global financial markets, which could significantly impact each of its segments during fiscal 2026 . These factors include the ongoing war between Russia and Ukraine, further conflict in the Middle East, shifts in global trade flows for commodities, potential changes in U.S. trade policy, increased or fluctuating tariffs, a changing interest rate environment, and continued pricing pressures impacting costs of labor, freight, and materials . The company currently expects global supply and demand factors impacting energy and agricultural commodities to be unfavorable in fiscal 2026, with a trend of reduced margins for energy and agricultural commodities expected to persist .

For fiscal 2026, the company expects total capital expenditures to be approximately $575.1 million , a decrease from $728.6 million in fiscal 2025 . Major maintenance expenditures are projected to be approximately $53.3 million , significantly lower than $271.4 million in fiscal 2025 , due to reduced turnaround activities at its refineries compared to the McPherson refinery turnaround in fiscal 2025 . The Board of Directors authorized approximately $30.0 million of fiscal 2025 patronage-sourced earnings to be paid to member-owners during fiscal 2026 . Additionally, approximately $90.0 million of equity redemptions are authorized for distribution in fiscal 2026 . The company expects to pay approximately $168.7 million in preferred stock dividends during fiscal 2026 .

Risk Factors

The company faces significant risks from changes in commodity prices for crude oil, natural gas, ethanol, fertilizer, grain, oilseed, flour, and crude and refined vegetable oils, which are influenced by factors beyond its control such as weather, plant disease, supply adequacy, transportation, inflation, government regulation, and international conflicts . Global operations expose the company to political, economic, and legal risks, including terrorism, war, civil unrest, changes in social or economic conditions, currency fluctuations, price and export controls, and logistics challenges . Ongoing global conflicts, such as those in Ukraine and the Middle East, have caused inflationary pressures, impacted fertilizer purchasing in the global market, and increased the risk of inadvertently trading with sanctioned partners . Demand for products is highly dependent on global and regional demographics and macroeconomic conditions, with a significant downturn potentially reducing demand and adversely affecting financial condition . Declines in farm income, influenced by commodity prices, crop yields, input costs, and government policies, can reduce producers' cash flows and limit investment, potentially causing members to exit agricultural activities . Fluctuations in freight and logistics costs, supply chain disruptions, and adverse weather conditions, including those due to climate change, can impact business and operations . Inflation is expected to continue affecting costs such as labor, freight, natural gas, and materials, with higher interest rates increasing borrowing costs . The company operates in highly competitive markets, and competitors may develop superior products, marketing, or supply chain capabilities, potentially restricting pricing power and reducing margins . There is a risk that members may choose to do business with other companies, adversely affecting revenues and cash flows . Declining demand for refined petroleum products due to alternative energy sources or government policies aimed at decreasing reliance on petroleum could materially affect revenues . Consolidation among producers and customers could lead to less favorable pricing and supply terms, or direct sales from input manufacturers to cooperative customers, bypassing the company . The company is exposed to the risk of nonperformance and nonpayment by counterparties, including the inability or refusal to pay due to financial condition, operational failures, or cybersecurity events . Its risk management strategies, including hedging, may not be effective in mitigating exposure to commodity price fluctuations, transportation costs, energy prices, foreign currency exchange rates, and interest rates . Actual or perceived quality, safety, or health risks associated with products could lead to significant liability and reputational damage, especially with the rapid spread of information through social media . Operations are subject to business interruptions from events like natural disasters, cyberattacks, equipment failures, and labor disputes, with uninsured losses or losses exceeding coverage limits possible . Epidemics, pandemics, and public health developments could disrupt transportation, increase costs, and limit the ability to meet customer demand . Challenges in hiring, developing, and retaining employees, exacerbated by the rural nature of the business and increased remote work opportunities, could negatively impact operations . Technological improvements and sustainability initiatives, such as genetically engineered seeds or alternative energy sources, could decrease demand for agronomy and energy products . Advancements in Artificial Intelligence (AI) bring risks of system failure, data breaches, and inadvertent disclosure of sensitive information . The ongoing multiyear implementation of an enterprise resource planning system (ERP) requires significant capital and human resources, with potential flaws posing risks to operations and internal controls . Increasing scrutiny and changing expectations regarding environmental, social, and governance (ESG) practices may expose the company to new risks, regulatory fines, and reputational damage . Failures or delays in achieving climate change strategies or complying with evolving environmental regulations, such as the EU deforestation-free regulation ("EUDR") or the Renewable Fuel Standard ("RFS"), could increase costs, operational burdens, and litigation risk . Environmental liabilities and litigation, including lawsuits related to agricultural chemicals, could have a material adverse effect . The business is capital-intensive and relies on cash from operations and external financing, with access to capital potentially affected by financial institutions' policies concerning energy-related businesses . The cooperative structure limits the ability to access equity capital, as common stock cannot be sold, and preferred stock dividends are limited to 8% per annum .

Management Priorities

Management's focus is on income before income taxes ("IBIT") due to the significant unpredictability and volatility in pricing, costs, and global trade volumes inherent in global commodities, emphasizing managing margins and ensuring balance sheet strength through liquidity, leverage, capital allocation, and cash flow optimization . The company's business strategies center on empowering customers to make CHS their first choice, expanding market access to add value for owners, and transforming core businesses by capitalizing on changing market dynamics . To execute these strategies, the company is focused on implementing agile, efficient, and sustainable technology platforms; building robust and efficient supply chains; hiring, developing, and retaining high-performing, diverse, and passionate teams; achieving operational excellence and continuous improvement; and maintaining a strong balance sheet . For fiscal 2026, management expects global supply and demand factors impacting energy and agricultural commodities to be unfavorable, with a trend of reduced margins for these commodities expected to persist . The company will continue to execute its enterprise priorities for fiscal 2026, including maximizing platforms through integrated supply chains and capitalizing on domestic and global opportunities, as it navigates less favorable market conditions . Total capital expenditures for fiscal 2026 are expected to be approximately $575.1 million , and major maintenance is projected at approximately $53.3 million . The Board of Directors authorized approximately $30.0 million of fiscal 2025 patronage-sourced earnings and approximately $90.0 million of equity redemptions to be distributed in fiscal 2026 . Preferred stock dividends of approximately $168.7 million are expected to be paid during fiscal 2026 .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — THE COMPANY
  2. [2] Item 1, Business — THE COMPANY
  3. [3] Item 1, Business — THE COMPANY
  4. [4] Item 1, Business — THE COMPANY
  5. [5] Item 1, Business — THE COMPANY
  6. [6] Item 1, Business — THE COMPANY
  7. [7] Item 1, Business — THE COMPANY
  8. [8] Item 1, Business — ENERGY Overview
  9. [9] Item 1, Business — ENERGY Overview
  10. [10] Item 1, Business — Laurel refinery.
  11. [11] Item 1, Business — Laurel refinery.
  12. [12] Item 1, Business — McPherson refinery.
  13. [13] Item 1, Business — McPherson refinery.
  14. [14] Item 1, Business — ENERGY Overview
  15. [15] Item 1, Business — Sales and Marketing: Customers
  16. [16] Item 1, Business — Sales and Marketing: Customers
  17. [17] Item 1, Business — AG Overview
  18. [18] Item 1, Business — Operations Global grain and processing.
  19. [19] Item 1, Business — Operations Global grain and processing.
  20. [20] Item 1, Business — Operations Global grain and processing.
  21. [21] Item 1, Business — Ag retail.
  22. [22] Item 1, Business — Wholesale agronomy.
  23. [23] Item 1, Business — AG Overview
  24. [24] Item 1, Business — NITROGEN PRODUCTION Overview
  25. [25] Item 1, Business — NITROGEN PRODUCTION Overview
  26. [26] Item 1, Business — NITROGEN PRODUCTION Overview
  27. [27] Item 1, Business — NITROGEN PRODUCTION Overview
  28. [28] Item 1, Business — Corporate and Other Foods.
  29. [29] Item 1, Business — Corporate and Other Wheat milling.
  30. [30] Item 1, Business — THE COMPANY
  31. [31] Item 7, MD&A — Consolidated Statements of Operations
  32. [32] Item 7, MD&A — Consolidated Statements of Operations
  33. [33] Item 7, MD&A — Consolidated Statements of Operations
  34. [34] Item 7, MD&A — Consolidated Statements of Operations
  35. [35] Item 7, MD&A — Consolidated Statements of Operations
  36. [36] Item 7, MD&A — Consolidated Statements of Operations
  37. [37] Item 7, MD&A — Consolidated Statements of Operations
  38. [38] Item 7, MD&A — Consolidated Statements of Operations
  39. [39] Item 7, MD&A — Consolidated Statements of Operations
  40. [40] Item 7, MD&A — Consolidated Statements of Operations
  41. [41] Item 7, MD&A — Consolidated Statements of Operations
  42. [42] Item 7, MD&A — Consolidated Statements of Operations
  43. [43] Item 7, MD&A — Consolidated Statements of Operations
  44. [44] Item 7, MD&A — Consolidated Statements of Operations
  45. [45] Item 7, MD&A — Consolidated Statements of Operations
  46. [46] Item 7, MD&A — Liquidity and Capital Resources
  47. [47] Item 7, MD&A — Liquidity and Capital Resources
  48. [48] Item 7, MD&A — Liquidity and Capital Resources
  49. [49] Item 7, MD&A — Liquidity and Capital Resources
  50. [50] Item 7, MD&A — Liquidity and Capital Resources
  51. [51] Item 7, MD&A — Cash Flows
  52. [52] Item 7, MD&A — Consolidated Statements of Operations
  53. [53] Item 7, MD&A — Consolidated Statements of Operations
  54. [54] Item 7, MD&A — Consolidated Statements of Operations
  55. [55] Item 7, MD&A — Consolidated Statements of Operations
  56. [56] Item 7, MD&A — Consolidated Statements of Operations
  57. [57] Item 7, MD&A — Consolidated Statements of Operations
  58. [58] Item 7, MD&A — Consolidated Statements of Operations
  59. [59] Item 7, MD&A — Consolidated Statements of Operations
  60. [60] Item 7, MD&A — Consolidated Statements of Operations
  61. [61] Item 7, MD&A — Consolidated Statements of Operations
  62. [62] Item 7, MD&A — Revenues by Segment Energy
  63. [63] Item 7, MD&A — Revenues by Segment Energy
  64. [64] Item 7, MD&A — Revenues by Segment Energy
  65. [65] Item 7, MD&A — Revenues by Segment Energy
  66. [66] Item 7, MD&A — Ag Revenues
  67. [67] Item 7, MD&A — Ag Revenues
  68. [68] Item 7, MD&A — Ag Revenues
  69. [69] Item 7, MD&A — Ag Revenues
  70. [70] Item 7, MD&A — Ag Revenues
  71. [71] Item 7, MD&A — Ag Revenues
  72. [72] Item 7, MD&A — Ag Revenues
  73. [73] Item 7, MD&A — Ag Revenues
  74. [74] Item 7, MD&A — Equity Income from Investments
  75. [75] Item 7, MD&A — Equity Income from Investments
  76. [76] Item 7, MD&A — Equity Income from Investments
  77. [77] Item 7, MD&A — Equity Income from Investments
  78. [78] Item 7, MD&A — Interest Expense
  79. [79] Item 7, MD&A — Interest Expense
  80. [80] Item 7, MD&A — Interest Expense
  81. [81] Item 7, MD&A — Interest Expense
  82. [82] Item 7, MD&A — Energy Operating Metrics
  83. [83] Item 7, MD&A — Energy Operating Metrics
  84. [8] Item 8, Note 8 — Goodwill
  85. [85] Item 8, Note 8 — Other Intangible Assets
  86. [86] Item 8, Note 6 — Ardent Mills and Producer Ag
  87. [87] Item 7, MD&A — Fiscal 2026 Outlook
  88. [88] Item 7, MD&A — Fiscal 2026 Outlook
  89. [89] Item 7, MD&A — Fiscal 2026 Outlook
  90. [90] Item 7, MD&A — Summary of Our Major Uses of Cash and Cash Equivalents
  91. [91] Item 7, MD&A — Summary of Our Major Uses of Cash and Cash Equivalents
  92. [92] Item 7, MD&A — Summary of Our Major Uses of Cash and Cash Equivalents
  93. [93] Item 7, MD&A — Summary of Our Major Uses of Cash and Cash Equivalents
  94. [94] Item 7, MD&A — Summary of Our Major Uses of Cash and Cash Equivalents
  95. [95] Item 7, MD&A — Summary of Our Major Uses of Cash and Cash Equivalents
  96. [96] Item 7, MD&A — Summary of Our Major Uses of Cash and Cash Equivalents
  97. [97] Item 7, MD&A — Summary of Our Major Uses of Cash and Cash Equivalents
  98. [98] Item 1A, Risk Factors — Our revenues, results of operations and cash flows could be materially and adversely affected by changes in commodity prices.
  99. [99] Item 1A, Risk Factors — We are subject to political, economic, legal and other risks of doing business globally.
  100. [100] Item 1A, Risk Factors — Ongoing wars and global conflicts may adversely affect our business, financial condition and results of operations.
  101. [101] Item 1A, Risk Factors — Our business and operations and demand for our products are highly dependent on certain global and regional factors that are outside our control and could adversely impact our business.
  102. [102] Item 1A, Risk Factors — Our business and operations and demand for our products are highly dependent on certain global and regional factors that are outside our control and could adversely impact our business.
  103. [103] Item 1A, Risk Factors — Our business and operations and demand for our products are highly dependent on certain global and regional factors that are outside our control and could adversely impact our business.
  104. [104] Item 1A, Risk Factors — Inflation may result in increased costs, which could have a material and adverse effect on our results of operations.
  105. [105] Item 1A, Risk Factors — We participate in highly competitive business markets and we may not be able to continue to compete successfully, which could have a material adverse effect on us.
  106. [106] Item 1A, Risk Factors — Our revenues, margins, results of operations and cash flows could be materially and adversely affected if our members were to do business with other companies rather than with us.
  107. [107] Item 1A, Risk Factors — If our customers choose alternatives to our refined petroleum products, our revenues, results of operations and cash flows could be materially and adversely affected.
  108. [108] Item 1A, Risk Factors — Consolidation among producers of products we purchase and customers for products we sell could materially and adversely affect our revenues, results of operations and cash flows.
  109. [109] Item 1A, Risk Factors — We are exposed to risk of nonperformance and nonpayment by counterparties.
  110. [110] Item 1A, Risk Factors — Our risk management strategies may not be effective.
  111. [111] Item 1A, Risk Factors — Actual or perceived quality, safety or health risks associated with our products could subject us to significant liability and damage our business and reputation.
  112. [112] Item 1A, Risk Factors — Our operations are subject to business interruptions, casualty losses and supply chain issues. We do not insure against all potential losses and could be seriously harmed by unanticipated liabilities.
  113. [113] Item 1A, Risk Factors — Our business and operations have been, and may in the future, be adversely affected by epidemics, pandemics, outbreaks of disease and other adverse public health developments.
  114. [114] Item 1A, Risk Factors — We are subject to workforce factors that could adversely affect our business and financial condition.
  115. [115] Item 1A, Risk Factors — Technological improvements and sustainability initiatives could decrease demand for our agronomy and energy products.
  116. [116] Item 1A, Risk Factors — Artificial Intelligence (“AI”), including generative AI, advancements are progressing at an unprecedented pace, which brings risks that could subject us to loss through various technical, legal, and opportunistic-related risks.
  117. [117] Item 1A, Risk Factors — We utilize information technology systems to support our business. The ongoing multiyear implementation of an enterprisewide resource planning system, reliance on multiple legacy business systems as well as third-party data management providers and other vendors, security breaches or other disruptions to our information technology systems or assets could interfere with our operations, compromise the security of our customers' or suppliers' information and expose us to liability that could adversely impact our business and reputation.
  118. [118] Item 1A, Risk Factors — Increasing scrutiny and changing expectations from stakeholders with respect to our environmental, social and governance practices may expose us to new or additional risks.
  119. [119] Item 1A, Risk Factors — Failures or delays in achieving our strategies or expectations related to climate change and other environmental matters could adversely affect our business, operations and reputation, and increase risk of litigation.
  120. [120] Item 1A, Risk Factors — Environmental liabilities and litigation could have a material adverse effect on us.
  121. [121] Item 1A, Risk Factors — Our business is capital-intensive and we rely on cash generated from our operations and external financing to fund our strategies and ongoing capital needs.
  122. [122] Item 1A, Risk Factors — Our cooperative structure limits our ability to access equity capital.
  123. [123] Item 7, MD&A — Management's Focus
  124. [124] Item 7, MD&A — Business Strategy
  125. [125] Item 7, MD&A — Business Strategy
  126. [126] Item 7, MD&A — Fiscal 2026 Outlook
  127. [127] Item 7, MD&A — Fiscal 2026 Outlook
  128. [128] Item 7, MD&A — Summary of Our Major Uses of Cash and Cash Equivalents
  129. [129] Item 7, MD&A — Summary of Our Major Uses of Cash and Cash Equivalents
  130. [130] Item 7, MD&A — Summary of Our Major Uses of Cash and Cash Equivalents
  131. [131] Item 7, MD&A — Summary of Our Major Uses of Cash and Cash Equivalents

Analysis on 5/20/2026