Join CHS Larsen Cooperative to help fight hunger through CHS Harvest for Hunger

CHS Larsen Cooperative is gathering donations of money and food to help fight hunger. As part of CHS Harvest for Hunger food and fund drive, CHS Larsen Cooperative will accept contributions from March 1 through March 20 at its locations in New London, Readfield, Center Valley, Weyauwega, Larsen, and Oconto Falls; they will then deliver all collections to the local food pantries.

“Hunger is a reality for more than 40 million people in America, including 13.1 million children. Every dollar we raise through CHS Harvest for Hunger can purchase six pounds of food through our food banks,” says David Neal, general manager, CHS Larsen Cooperative. “That’s making a real difference for those in need.”

Financial donations are encouraged because they enable food banks to leverage their buying power to provide nutritious food at deeply discounted rates. In 2019, CHS Larsen Cooperative raised $4,946 and over 3000 pounds of food This all stayed in the communities in which they reside.

“Our local communities also win when CHS Country Operations makes a contribution to help friends and neighbors right here in our community. Fighting hunger in our communities’ ties directly to what farmers and ranchers do every day, raising crops and livestock to feed the world,” adds Neal.

Donations can be made at CHS Larsen Cooperative’s locations in New London, Readfield, Center Valley, Weyauwega, Larsen and Oconto Falls. If you would like to donate to this cause but are unable to drop it off at one of our locations, please contact Anne Moore at our main office 920-982-1111 and she will send someone out to pick up the donation. Or you may mail a check to CHS Larsen Cooperative Attn: Harvest for Hunger P.O. Box 308 New London WI, 54961 or call 920-982-1111 for more information on how you can help.

For more information go to our community tab.

Learn ways to stay safe during Grain Bin Safety Week

grain bin safety training

Grain bins can be dangerous places. Purdue University researchers report that bin-related injuries such as entrapments, equipment entanglements and asphyxia are on the rise – more than 60 incidents occurred in the U.S. in 2018. 

As part of our commitment to safety as a core value, CHS is partnering with other ag industry leaders to support Grain Bin Safety Week, Feb. 16-22. Here are the top three things you can do to promote safe practices around grain bins:

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Freeze warning

Decrease the risk of cold-weather downtime with the right diesel.

use the right premium diesel during cold weather

When temperatures drop, a farmer’s work doesn’t stop. Keeping equipment running at its peak during colder weather requires a watchful eye on what’s in your fuel tank.

Here’s the main problem that comes when temperatures drop: Diesel fuel hits its cloud point — the temperature at which wax crystals begin to appear in the fuel, also known as gelling. Cloud point is reached in #2 diesel fuel when fuel temperatures hit 4 to 14 degrees Fahrenheit, depending on where you buy your fuel, says Chad Christiansen, manager of product quality and additives for CHS.

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Five winter propane safety tips

Good tips to keep in mind throughout this winter season.

1. Clearly mark propane tanks

When a winter storm hits, finding a propane tank under feet of snow can be a difficult job. To make tanks easier to spot, customers should mark the location of their tanks with flags, poles or stakes. When selecting a marker, they should make sure to choose something that’s taller than the average snowfall in their area.

2. Remove snow and ice from propane tanks

In the event that a propane tank becomes covered in snow, it should get cleared it off using a broom — not a shovel — to prevent damage to system components. Regulators, regular vents, piping, tubing and valves should all be kept exposed. For easy access to tanks, customers should always maintain a clear and plowed pathway to them.

3. Notify snowplow contractors of propane tanks

After a heavy snowfall, it’s possible for a snowdrift to completely hide a propane tank. Customers who utilize snowplow contractors should make sure the operator knows the locations of all propane tanks on the property. If a snowplow were to come into contact with a propane tank, it could become a potentially serious safety hazard.

4. Consider a propane-powered generator

When a storm knocks out the power, it can sometimes take days for rural roads to be accessible to repair crews. A propane-powered backup generator can provide customers with peace of mind that they won’t be stuck without power in the event of a blackout. Remember, even if a generator is portable, these should never be used indoors or in an enclosed space.

5. Maintain an adequate propane supply

Even after a winter storm is over, roads can still be inaccessible by delivery trucks for days. To sustain any periods of interrupted deliveries, it’s important for customers not to let their propane tanks get too low. Suppliers who offer automatic deliveries can suggest this solution to help their customers ensure their tanks are topped off adequately.

Safety tips adapted from online LPGas article “Building Customer Trust Starts with Safety”

Covering Your Energy Needs for 2020

To contract or not to contract, that is the question…or is the real question: when to contract? or at what price to contract??? 

These things can lead to a lot of stress, not only for the consumer, but for the energy consultant too!  Over the years I have developed a strategy that helps answer some of these questions and alleviate the stress associated with planning out your annual energy budget.  Let’s look at some of the tools that have helped me assist my customers with making educated decisions.

Recently, I spoke with a customer who has contracted for almost two decades. Though he feels contracting is usually a good option, he still remembers the time about 6/7 years ago when he locked in and the market tanked.  His contract ended up being higher priced than the local market.  This made him feel like he “lost”. I reminded him that other years his contract price was lower than the local market, so I guess you could say that he “won” during those years?  I am not a huge fan of the “winning/losing” outlook.  Customers will actually benefit more from a contract if they use it to set their budget for the year.  When contracting time comes around and someone is ready to lock in their pricing for the year, I ask them a few questions:

  • Is this a price you feel comfortable locking in? 
  • Will this price work with your annual budget?  If not, what price will?
  • Do you have a target we should be looking at?

When is a good time to contract? Again, I look at historical pricing.  Fuel pricing futures tend to be at a lower level Dec-Feb.  Though, this may not always be the “winner”, it is a great tool to utilize when making buying decisions.  FYI: the best contract price offered last year was 12/29/19, but not this year, futures pricing saw a steady to stronger outlook though the first of the year. They remained strong up until the past few weeks. With talks of a less volatile year, fears of travel bans due to the Coronavirus (China) and possibly, just an all over relief that 2019 harvest is over, we are finally seeing crude oil looking for a reason to finally drop below that $55/barrel marker.  So, this is not perfect, but it gives us a darn good idea of when; not to lock in futures pricing.

My suggestion is to talk to your local energy consultant and clearly explain your needs for the upcoming year.  Together, you can come up with a plan for your spring/fall 2020 fuel needs.  Again, I want to stress that locking in your fuel supply is not about winning or losing, but focusing on setting a budget for the upcoming season. 

My final advice that I give to all of my customers is DON’T LOOK BACK!  What I mean by that is; after you decide to lock in your fuel price at a value that works for you and your business, don’t drive yourself crazy by watching the market and constantly second guessing yourself and the decision you made.  Please feel confident that you made a good decision and though pricing may or may not drop lower, you are going to be OK and a few extra pennies per gallon either way will not make or break your business!

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

© 2020 CHS Inc.

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