CHS INC

CHS Inc. Annual Report Summary – Plain Talk for Investors

Hey there! Let’s break down CHS Inc.’s year in a way that’s actually understandable. No fancy jargon, just the stuff you care about: Are they making money? Are they a good bet?

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1. What does CHS do, and how was their year?

CHS is a farmer-owned co-op that handles everything from seeds and fertilizer to renewable fuels and crop processing. This year was a mixed bag: their energy division (gasoline, biodiesel) thrived, but low crop prices hurt their farming side. Overall, they held steady—no fireworks, but no disasters either.

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2. Money talk: Are they growing?

• Revenue: $47 billion (up slightly from last year).
• Profit: $1.1 billion (down 15% from last year).
• Why? Energy profits (thanks to high fuel prices) offset struggles in crop sales.

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3. Biggest wins vs. headaches

Wins ✅

• Renewable fuels (like biodiesel) boomed.
• Paid $300 million in dividends to farmer-owners.
• Managed costs well despite inflation.

Challenges ❌

• Low crop prices led farmers to plant less, hurting sales.
• Supply chain delays caused headaches for equipment orders.
• Droughts shrank harvests in key regions.

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4. Financial health check

• Cash cushion: $2.8 billion in working capital (down from $3.3 billion last year). Still enough to cover bills, but tighter.
• Debt: Up slightly, but manageable. They’re paying it off comfortably.
• Dividends: Consistent payments (good for income-focused investors).
• Safety net: $10.7 billion in equity to absorb shocks.
  Verdict: Solid, but less cash than last year.

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5. Risks to watch

• Crop prices: If they stay low, farmers may keep cutting back.
• Energy markets: A drop in fuel demand could hit profits.
• Weather: Another bad drought or flood would hurt harvests.
• Trade wars: Tariffs could slam global sales.
• Dividend strain: $2.3 billion in preferred stock dividends could pressure cash if profits dip.

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6. How do they stack up against competitors?

CHS isn’t as flashy as giants like ADM or Cargill, but their co-op structure means loyal farmer-customers. This year, they lagged in crop sales but led in renewable energy. Middle of the pack overall.

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7. Leadership & strategy changes

No CEO shakeups, but they’re doubling down on renewable energy (smart for long-term growth). Sold off underperforming facilities to focus on core businesses.

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8. What’s next?

• Spending: $575 million on upgrades (focus: tech to help farmers cut costs).
• Dividends: Likely to continue, but growth depends on crop/energy markets.

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9. Market trends affecting CHS

• Green energy push: Biodiesel demand could soar with government support.
• Farm tech: Investing in tools like GPS-guided tractors to boost efficiency.
• Regulations: New climate rules may help renewables… or add costs.

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Bottom Line for Investors

CHS is for you if:

• You want steady dividends and don’t mind slow growth.
• You believe in renewable energy and farming long-term.
• You prefer “boring but stable” over high-risk, high-reward.

Think twice if:

• You’re chasing rapid growth or trendy stocks.
• You’re nervous about weather or commodity price swings.

Final take: A reliable player in essential industries, but not a thrill ride. Worth a look for patient investors.

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Still have questions? Imagine we’re chatting over coffee—I’m here to help! ☕