Newest Addition to Agronomy Sales, Jacob

On December 20, we welcomed Jacob Petrie to the agronomy sales staff. Jacob graduated from UW-Platteville in 2015. He has a double major in Soil Crop Sciences and Agri business. He now resides in the Neenah area. 

Before starting with CHS Larsen he worked for two years as an agronomist at a neighboring cooperative. Then he worked for a retailer for another seed dealer in the Chilton area for 3 years. He wanted to work for CHS Larsen because he felt we are a well-organized company where he would fit into the position well. He also enjoyed working in the cooperative system and wanted to get back into it.

His ag interest developed when he was able to keep a steer at his uncles farm, to show at the county fair, and it grew from there. In his free time he enjoys the outdoors – fishing, sports and fitness. Fun fact about Jacob is he is getting married in October 2020.

He is looking forward to meeting everyone and developing relationships in the future. Feel free to reach out to Jacob with your agronomy needs.

Grain Department Welcomes, Jona

On December 30, we welcomed Jona Hodgen to our grain department as an originator. Jona graduated from UW Oshkosh with a major in Communication and a minor in Spanish and Business.  She started in the agriculture industry in 2008 as a scale clerk for ADM, she continued to work for them while attending school and transitioned into an Agronomy Sales Specialist in 2013. For the past 7 years she had been in Agronomy Sales and thoroughly enjoyed it but wanted to transition to the grain side of the business and help customers most effectively market their grain.   

Jona grew up watching her father working in agriculture which is where her passion for agriculture grew. She is very excited to join the CHS team and looks forward to being face to face with growers to discuss grain marketing options.  She will office out of Readfield. 

In her free time she enjoys spending time with her family and all outdoor activities including, fishing, boating, and hunting. She also has an eight-month-old baby girl at home and her favorite thing to do is spend time with her and watch her grow. She grew up in the Omro area and is looking forward to keeping relationships and creating connections for farmers to CHS.

We are excited to have Jona join our team to help us stay connected to our grain customers. At this time, she isn’t assigned to one specific territory. She will be working with Mike Steingraber, Origination Manager, to get started by meeting our current customers. As you meet Jona, please give her a warm welcome. We invite you to grab the opportunity to meet Jona in person at our Grain Marketing Meeting in February.

Welcome Tiana to Energy Sales

We are very excited to announce that on January 6, 2020, we welcome Tiana Schroeder to our energy sales team. Tiana comes with 20 years of experience in propane sales and service. In her pervious employment she managed four district propane offices along with two satellite locations. Throughout her 20 years, she was involved with all customer service, operations and financials happenings within the company. With her strong management skills in operations she will be a great asset to our team.

Tiana is eager to work for CHS Larsen Cooperative to be a part of the positive culture. She is looking forward to creating connections with our small business owners and farmers by working for the local cooperative. She values relationships and wants to help build opportunities for our customers in central Wisconsin.

In her free time, she enjoys spending time with family, including her two grandbabies. She grew up on a small dairy operation with horses and still enjoys riding them from time to time. In the summer, her family likes camping and boating on the local lakes.

As Tiana gets started, she will be stopping out to meet you in person and learn more about your needs and how we can service you better. If you wish to contact Tiana feel free to reach out to her.

CHS reports $177.9 million in first quarter net income

Truck delivering propane to residential home in winter

Significant increase in fall propane demand helped balance difficult market conditions

CHS reported net income of $177.9 million for the first quarter of fiscal year 2020 that ended Nov. 30, 2019. This compares to net income of $347.5 million in the first quarter of fiscal year 2019.

The results for the first quarter of fiscal year 2020 reflect:

  • Revenues of $7.6 billion compared to revenues of $8.5 billion for the first quarter of fiscal year 2019.
  • Strong supply chain performance in our propane business that was a positive contributor resulting from efficient sourcing of propane during significantly increased fall demand – brought on by unseasonably early cold and wet weather during harvest – for crop drying and home heating.
  • Less advantageous market conditions in our refined fuels business compared to the first quarter of fiscal year 2019, during which the company experienced historically wide pricing spreads between Canadian crude oil and crude oil from the United States. CHS processes Canadian crude oil at its refineries in Laurel, Montana, and McPherson, Kansas.
  • Poor weather conditions that occurred in fiscal year 2019 and the first quarter of fiscal year 2020 continued to negatively impact our Ag segment’s operations, resulting in lower crop yields, poor grain quality in some areas and lower fall crop nutrients sales.
  • Pressure on grain volume and margins due to slow movement of grain associated with unresolved trade issues between the United States and foreign trading partners.
  • Decreased fertilizer volumes compared to the first quarter of fiscal year 2019 due to a slow harvest in the first quarter of fiscal year 2020.

“We are not immune to the challenges of our industry, and our first quarter results reflect the difficulties brought on by fall weather and ongoing trade tensions,” said Jay Debertin, president and CEO of CHS Inc. “The cooperative system, however, provides CHS and its owners stability to withstand these difficult times. Our focus remains on building efficiencies in our supply chain and on operating in this challenging agricultural environment.

“During a cold and wet harvest, we leveraged our supply chain to meet the significant increase in propane needs of our owners and customers,” Debertin continued. “Our focus on meeting the needs of our owners helped deliver the successful launch of two products – Acuvant™ and Trivar™ – that will be available for spring planting.

“We know the remainder of fiscal year 2020 will continue to present challenges, and we are confident in our ability to find opportunities in those challenges, to help our owners grow their businesses and to continue to strengthen our company,” he said. “No one feels those challenges more than our owners. We remain committed to supporting communities and experts as they address the stress felt across rural America.”

First Quarter Fiscal 2020 Business Segment Results

The following segment results were reported for the first quarter of fiscal year 2020 as compared to the first quarter of fiscal year 2019.

Energy
Pretax earnings of $162.2 million in the first quarter of fiscal year 2020 compared to $232.5 million for the first quarter of fiscal year 2019 reflect:

  • Significantly less advantageous market conditions, driven primarily by decreased crude oil spreads on heavy Canadian crude oil processed at our refineries and, to a lesser extent, decreased crack spreads in our refined fuels business compared to the same period during fiscal year 2019. The decreased crude oil differentials and lower crack spreads were partially offset by favorable hedging activity in refined fuels.
  • The decrease in pretax income for refined fuels was partially offset by significantly improved propane margins from a late, wet crop combined with unseasonably cold weather across much of CHS service area that led to increased fall demand for crop drying and home heating compared to the first quarter of fiscal year 2019.

Ag
Pretax loss of $13.9 million compared to pretax earnings of $80.3 million in the first quarter of fiscal year 2019 reflects:

  • Poor weather conditions in fiscal year 2019 that culminated in a late and smaller fall harvest, resulting in decreased demand for farm supplies and crop nutrient products.
  • Ongoing global trade tensions between the United States and foreign trading partners continued to negatively impact grain volumes and margins.
  • Lower margins in our processing and food ingredients business.

Nitrogen Production
Pretax earnings of $16.5 million compared to pretax earnings of $23.7 million in the first quarter of fiscal year 2019 reflect:

  • Lower equity income from our investment in CF Nitrogen, of which CHS has partial ownership, attributable to decreased market pricing of urea and urea ammonium nitrate, which are produced and sold by CF Nitrogen.

Corporate and Other
Pretax earnings of $20.7 million compared to pretax earnings of $30.8 million in the first quarter of fiscal year 2019 reflect:

  • Results primarily from lower equity income from our investments in Ardent Mills and Ventura Foods and decreased income in our financing and hedging businesses due to market-driven interest rate reductions and lower trading activity, respectively.
CHS 1st quarter balance sheet

Diesel Gelling and How to Stop It This Winter

There’s no worse sound on a cold winter morning than the sputter of a diesel engine that won’t start. Whether you’ve got a foot of snow to plow from the farmyard or a load of freight to deliver six hours away, neither job is getting done if cold weather gets the best of your equipment.

It’s no secret that diesel engines can be temperamental in the winter. Every year, farmers and fleet owners get an unwelcome reminder of this. But your operation doesn’t have to hinge on the mercy of Old Man Winter. Here’s what you need to know to put cold weather diesel problems on ice.

Why cold weather causes diesel problems
Before diesel fuel enters an engine, it passes through a filter to strain out impurities. This filter is an incredibly important part of your equipment, but it’s also a prime target for cold weather to wreak havoc.

There’s a naturally occurring substance in No. 2 diesel fuel called paraffin wax. Under normal conditions, this wax remains in liquid form, so it’s harmless to your equipment. The problem occurs when cold temperatures cause paraffin wax to solidify and bind together into larger crystals that can’t flow through the filter. When diesel users talk about gelling, this is the issue they’re referring to.

Gelling starts to occur at a specific temperature known as the cloud point, coined after the white haze — or “cloud” — that appears as paraffin wax crystalizes. No. 2 diesel fuel has a cloud point of 14 degrees Fahrenheit.

If the temperature continues dropping, it will eventually reach a point where wax crystals collect rapidly on the fuel filter, starving the engine of fuel. This threshold is known as the cold filter plugging point (CFPP), and it indicates the lowest possible temperature at which a given diesel fuel can still pass through a 45-micron filter. For most No. 2 diesel fuels, the CFPP is typically within a few degrees of the cloud point.

While CFPP is an industry-wide measurement, it can be less accurate for some modern rigs. Today’s high-performance diesel engines require finer filters than those used in measuring CFPP, meaning a new diesel engine can potentially plug at a warmer temperature than its fuel’s documented CFPP. While CFPP can be a helpful measurement in some instances, keep in mind its limitations.

It should be noted that both cloud point and CFPP are natural properties of a fuel and thus impossible to change. Paraffin wax will always crystalize when the temperature gets cold enough. How, then, do you stop wintertime gelling and filter plugging? Even though you can’t change cloud point or CFPP, there’s a third factor you can change.

How to prevent diesel from gelling
The solution to cold-weather gelling and filter plugging lies in one key metric: operability. Defined as the lowest possible temperature a piece of equipment can function at without a loss of power, operability is the variable diesel equipment owners have power over.

But if you can’t stop paraffin wax from crystallizing, how is it possible to lower a rig’s minimum operating temperature? Well, even though you can’t get rid of the wax crystals in a No. 2 diesel, you can change their shape. Therein lies the secret to improving your rigs’ cold weather operability.

There’s a special fuel additive called a cold flow improver (CFI) that dissolves the bonds in paraffin wax. By breaking up larger crystals into many smaller parts, a CFI enables paraffin wax to pass smoothly through the filter. Typically, a CFI is effective down to about zero degrees Fahrenheit.

Steps to winterize your diesel fuel
Adding a CFI is the first step to fully protecting your diesel against cold-weather gelling and filter plugging. As temperatures continue to drop, you’ll want to replace your No. 2 diesel with a No. 1, which is free of paraffin wax and therefore offers the best operability during the coldest parts of winter.

You don’t want to make the switch all at once, though. It’s important to transition your equipment from a No. 2 to a No. 1 diesel gradually. Here are the steps you’ll want to take:

  • Once the temperature falls below 35 degrees Fahrenheit, use a blend of about 70 percent No. 2 diesel and 30 percent No. 1, along with a CFI. For an even better solution, try Cenex ROADMASTER XL® SEASONALLY ENHANCED or RUBY FIELDMASTER® SEASONALLY ENHANCED premium diesel fuels, which are enhanced not only with a CFI, but also a complete additive package.
  • As winter sets in, blend 30 percent No. 2 with 70 percent No. 1, continuing to mix in a CFI. For enhanced low-temperature operability, try Cenex WINTERMASTER® winterized premium diesel fuel. Formulated with the optimal diesel fuel blend for the cold, Wintermaster also contains a complete additive package designed to keep engines protected.
  • Anytime the temperature drops below -30 degrees Fahrenheit, use straight No. 1 diesel. To keep additives at proper levels, try NO. 1 DIESEL FUEL WITH CENEX® PREMIUM DIESEL FUEL ADDITIVE.

Watch for diesel fuel icing
On a related note, it’s also important to keep an eye on your rigs for signs of fuel icing. Often, icing can be mistaken for gelling because it produces similar engine-stalling symptoms. The difference with icing is that, instead of wax crystals building up on the fuel filter, it’s ice crystals. Icing is a major concern because it means water has gotten into your fuel. If you find water in your fuel system, be sure to consult a licensed mechanic.

Winter can be rough on diesel equipment. The good news is that you don’t have to gamble with your operation. For fuel that works as hard as you do, use CENEX WINTERIZED PREMIUM DIESEL, and you can leave fuel gelling and filter plugging out in the cold.

Originally posted on CENEXPERTS® BLOG

Utilizing the Entire Package

For many growers 2019 is finally in the books and preparation for 2020 is beginning with seed orders, chemical and fertilizer prepay as well as some end of year equipment upgrading. Others still have begun these steps while finishing up the last of their acres. 2019 was a year of windows; there were only a few windows to plant, and many acres around here never even had that window. Many times, this past summer I spoke with growers and the same comments arose “it only needed 2 good days of sun.” But for some that was never given. Then the windows of application and side dress came and went, and many acres of corn didn’t get the treatments that were needed. Harvest has come and went as one of the wettest falls on record and became a difficult task for many to complete. With the year of 2019 behind us I look to the adoption of technology on the farm, whether that is in actual hardware on a planter, combine or tractor, or if it is the adoption of technology in the data and information side. Many growers still adopted technology this year or began to utilize technology that they previously adopted.  

Looking into previously adopted technology, is the entire package of the information you adopted being used on your farm? 2020 is beginning as a year that we may need to tighten our belts and maximize the margin of profit on farm. Utilizing every bit of the information collected on your farm to make sound decisions is one way to increase this margin. If you have a precision planter, or a yield monitor on your combine, or even a GPS monitor in a tractor, are you utilizing the data collected? Or are you just letting the information sit on the monitors or as maps collected? This information collected on farm from your technology has a large amount of value if utilized to complete a cropping plan for 2020 and builds a larger amount of ROI on the technology compared to the basic utilization. Yield data is an important piece of information to maximize the production of a field, by validating the areas of the field that could benefit from increased fertility or seeding rates. Utilizing these variable rate seeding rates, then can be utilized to maximize placement of in season fertilizer rates.  

On a different note, soil sampling and software on farm is one of the least utilized pieces of information that I see from farm to farm. If your farm has GPS soil samples, why not utilize the sampling for your benefit by working with one of our YieldPoint® techs to create variable rate fertility plans for your fields. The software you select to manage your data is an important step into tracking your margins and building a field history to make better decisions in the future. As margins tighten up on corn and soybeans, using the complete package of the information you collect on your farm can be the key to maximizing the profit on a per acre basis.  

Written by Alex Yost, YieldPoint® Specialist

Trivar™ nominated for AgPro’s 2019 New Product of the Year

Free Your Phosphorus - Trivar, powered by Levesol.

AgPro magazine has nominated Trivar™ fertilizer additive from CHS Agronomy as one of 10 finalists for its 2019 New Product of the Year award!

The AgPro New Product of the Year competition puts the best new inputs, equipment, technologies and other products head-to-head against each other in a people’s choice contest.

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The Benefits of Maxtron® THF+

With the colder temperatures setting in across the United States, your equipment is most likely feeling the stress.

Cenex® premium full-synthetic tractor hydraulic fluid, Maxtron® THF+, is built to provide superior protection and enhanced performance in all weather conditions. Formulated with premium synthetic base oils and an advanced additive package that provides outstanding anti-wear and anti-oxidation properties, Maxtron THF+ delivers exceptional pumping efficiency and precision to keep operations running during peak times.

Watch this short video to learn about the value and benefits of switching to Maxtron THF+.

CHS Inc. owners elect five board members during annual meeting

Portrait of newly and re-elected CHS Board Members

CHS owners elected five board members to three-year terms during the cooperative’s 2019 Annual Meeting held Dec. 5-6 in Minneapolis. Pictured (l. to r.) are: Kevin Throener, Hal Clemesen, Mark Farrell, Alan Holm and Steve Riegel.

Officers of board also elected by board peers following Annual Meeting

CHS owners elected five board members to three-year terms during the cooperative’s 2019 Annual Meeting held Dec. 5-6 in Minneapolis. Newly elected to three-year terms are:

Hal Clemensen succeeds former director Randy Knecht, who retired from the CHS Board of Directors on Dec. 6. Clemensen represents Region 4, covering South Dakota, and has been the president of the board of directors of Agtegra Cooperative since its formation in 2018. He was president of the South Dakota Wheat Growers Association from 2005 until its merger with North Central Farmers Elevator in 2018. He is a past director and is an active member of the South Dakota Soybean Association and an active member of South Dakota Corn Growers. In 2015, the National Council of Farmer Cooperatives named him Farmer Cooperative Director of the year. He raises corn, soybeans and wheat near Conde, South Dakota. He holds a Bachelor of Science in Agricultural Economic and Agricultural Business from South Dakota State University. Clemensen was appointed to the CHS Board’s Government Relations and Corporate Risk committees.

Kevin Throener succeeds former director Dennis Carlson, who retired from the board on Dec. 6, and represents Region 3, which covers North Dakota. Throener has been a director of CHS Dakota Plains Ag since 2014 and served as vice president of the Sargent County Farmers Union Board of Directors since 2007. He has also served on the Cogswell, North Dakota, Volunteer Fire Department since 1997 and was its chief from 2010 to 2018. Throener raises corn, soybeans and alfalfa and operates a feedlot and cow/calf business near Cogswell, North Dakota. Throener and his wife Ronda are first-generation farmers who built their operation from the ground up. He studied Agricultural Systems Management at North Dakota State University. He was appointed to the CHS Board’s Governance Committee and the CHS Foundation Board of Trustees.

Reelected to three-year terms are:

  • Mark Farrell, who operates a corn, soybean and wheat farm in Dane County, Wisconsin, representing Region 5.
  • Alan Holm, who operates a corn, soybean, sweet corn, peas and hay operation and has a cow-calf herd near Sleepy Eye, Minnesota, representing Region 1.
  • Steve Riegel, who raises corn, soybeans, alfalfa, dryland wheat and milo near Ford, Kansas, representing Region 8.

Following the Annual Meeting, the board held its annual re-organization meeting. Each of the following board members was elected to one-year officer terms:

  • Dan Schurr, chair
  • C.J. Blew, first vice chair
  • Jon Erickson, second vice chair
  • Russ Kehl, secretary-treasurer
  • Steve Riegel, assistant secretary-treasurer

CHS Board announces fiscal 2019 equity management decisions

CHS will return $180 million in cash patronage and equity redemptions to its owners based on fiscal 2019 earnings.

Of that $180 million, $90 million will be distributed in cash patronage and $90 million will be distributed through equity redemptions.

  • Of the $90 million in equity redemptions, $63 million will be returned to member cooperatives and $27 million to individual members.
    • The $27 million in redemptions of individual producer member equity will be provided based on qualifying requests from individual members (estates and age 70+).
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© 2020 CHS Inc.