As we look forward to another planting season, we would like to talk about an important part of our business – SAFETY. In today’s agribusiness, the safety of our employees and our customers has become a huge part of our culture. In an effort to focus on being compliant with OSHA standards and regulations from the MN Department of Agriculture, CHS feels communication is the best avenue.
Anhydrous ammonia has long been a great fertility tool for many producers, while also presenting the greatest of scrutiny and risk to those of us handling the product. We continue to see tougher restrictions and penalties for those who do not follow proper protocol when it comes to the safety of handling NH3. OSHA rulings state that we as a retailer must operate under the same regulations as a manufacturer. Along with this letter is a checklist from the Department of Agriculture that our business must follow when evaluating NH3 equipment and tanks at our locations. We will not be able to fill tanks that do not meet the standards on the checklist. Our employees will be very diligent in making sure we are compliant with these standards. The hope is that you, our valued grower can use this list when evaluating your NH3 equipment for this spring. Our staff will be happy to provide resources to help you in getting your tanks up to code. CHS is dedicated to everyone’s safety, and if we work together, we can succeed in keeping NH3 a viable resource now and in the future.
Grain markets since the beginning of the year have been on a tear. Opportunity has been abundant to retain profits, forward contract new crop for profitable values, and to manage risk. The recent planting intentions report from March 31st paints the picture of continued tight stocks for the 21/22 growing season. Both domestic and export demand continues to be strong for corn and soybeans as we enter the planting season. All signs point to steady/ firmer markets. But also keep in mind a good growing season should bring quality yields. With the recent rally we may see the planting report on June 30th show larger planted acres of corn and soybeans than were noted on the March 31st report which might bring pressure to markets come late June into July.
The next big wild card is weather. A lot of conversation of drought pressure and warmer temps throughout the summer which could put pressure on pollination. As we can’t predict the future, one thing we can do is protect profits. There are certainly contracts available to protect profitable values as well as leave room for further improvement. Our Compass programs can bring added value like the foundation, price builder, and daily price contracts. Min price contracts could be used to open up participation in any rally to come. Min/max offers a floor to protect profitability today, but allows room for further participation in any rally. Bullish markets are exciting and fun. Don’t let the party end and be left without a way home. Sales in the next 60 days should be considered as we begin to finalize some unknowns like planting progress, export demand strength, feed usage, and early growing season moisture levels.
You can contact our grain team to help you decide what contracts would fit best for you!
Over the last year, we have all seen and almost become accustomed to disruptions in the supply chains for goods and services. Because of this we want to inform our customers on some of the challenges we are facing in the supply chains of the products we use each day in your fields.
It comes as no surprise that agricultural products are not immune to supply challenges. There are several reasons for these delays, and they all compile into a domino effect of sorts. Here we’ll highlight some of the main challenges, but please keep in mind CHS is in a good position on most of these products today and are continually sourcing more with the help of our teammates at CHS Agronomy.
Many of the ingredients needed for this product are made at a factory in Texas. The cold snap Texas had caused severe plant damage and ultimately product loss. Most wholesale companies have removed this product from their price sheets and retailers are not able to order any.
Remedy – We are fortunate that as CHS we have access to our own branded Levesol Zinc and have ample supply of this superior product.
A factory that makes large quantities of these products had a massive fire late in February. This put pressure on other manufactures of these products late in the production season.
Remedy – CHS took early positions on BASF Liberty 280SL late last summer and have enough on hand to cover prepays. We also are fortunate to partner with CHS Agronomy for our Clethodim needs (Gatlin). We also have access to Fusilade DX from Syngenta that is an excellent volunteer corn herbicide.
Many brands are running out of supply of these products. A decrease in demand over the past 5-7 years has reduced production. Crop prices and insect pressure have increased significantly combined with delayed logistics have caused a severe bottleneck in the system.
Remedy – CHS Agronomy planned for some of this and does have supply of a couple brands, but they are selling quickly. If you have not already planned your needs for these products please do so with your agronomist, we have only two types available.
All other products
Raw ingredients are challenged for multiple reasons, some because of Covid shutdowns, some do to freight logistics and others do to consumer products commanding a larger portion of the shipping availabilities. We are also seeing some issues in the availability of packaging products. So, once the herbicides/insecticides are manufactured they are being held up because there aren’t enough plastic jugs or even cardboard boxes available.
I do not write this with intention of using scare tactics to make you run out and buy more products just to have. My goal is to inform you of the supply challenges we are working with and through. My ask is if you have concerns please contact your agronomist and make sure you have a plan in place. Please know and understand that we are working with our vendors to make sure we minimize the impact of these challenges.
Thank you for your continued business and support!
Written by Jordan Thiel, CHS Agronomy Sales Manager
CHS Inc., the nation’s leading agribusiness cooperative, today released results for its fiscal second quarter ended Feb. 28, 2021. The company reported a net loss of $38.2 million versus net income of $125.4 million in the same quarter in fiscal 2020. Significant year-over-year earnings increases in Ag and Nitrogen Production segments and Corporate and Other businesses were offset primarily by ongoing COVID-19 pandemic-related impacts in Energy.
“Improved trade relations between the United States and foreign trade partners combined with our operating efficiency initiatives led to record grain and oilseed volume increases and continued price gains, significantly improving our Ag segment earnings over the prior year,” said Jay Debertin, president and CEO of CHS Inc. “Additionally, favorable growing conditions and overall strength in agriculture, helped drive demand for crop inputs, including crop nutrients and crop protection products and services.
“Our Energy segment, while showing improvement over the previous quarter, continues to experience unfavorable refined fuels market conditions related to the COVID-19 pandemic and exceptionally higher costs for renewable energy credits. These factors resulted in volume and margin declines that significantly reduced earnings compared to the prior year.”
Fiscal 2021 second-quarter results reflect:
Revenues of $8.3 billion versus $6.6 billion in fiscal 2020 second quarter, a 26.1% increase.
Energy segment impacts that include:
Continued low refining margins stemming from COVID-19-impacts on global energy demand.
Exceptionally high costs of renewable energy credits, which decreased margins.
Decreased propane margins and volumes due to warm winter weather conditions across the CHS trade territory during most of the fiscal 2021 second quarter.
Modest improvements over fiscal 2021 first quarter as volumes and margins began to rebound.
Ag segment impacts that include:
Favorable weather conditions and improved relations between the U.S. and foreign trade partners, including China, that increased volumes of grain and oilseed commodities as well as feed and farm supplies.
Higher margins for certain agricultural products, including processing and food ingredients, which improved because of soybean crush strength.
Enterprisewide initiatives that include:
Focused cost-reduction initiatives launched in fiscal 2021 that helped reduce marketing, general and administrative costs.
COVID-19-related working arrangements and increased hygiene and infection-control processes to mitigate risk and support business continuity – all CHS operations were deemed to be essential infrastructure industries by federal and state governments.
For the six-month period ending Feb. 28, 2021, CHS reported net income of $31.4 million versus $303.3 million for the same period in fiscal 2020. Revenues for the first six months of fiscal 2021 rose to $17.0 billion, a $2.8 billion, or 19.8%, increase from $14.2 billion in the same period the previous year.
“I am encouraged by the resilience of our employees and their commitment to owners in what continues to be a challenging operating environment,” said Debertin. “We are cautiously optimistic about the rollout of COVID-19 vaccines and other progress being made in response to the pandemic in the U.S. and around the world and the potential impact on our domestic and global businesses.
“As we look ahead to the second half of fiscal 2021, we remain committed to protecting the financial health of CHS, adding efficiency throughout our enterprise to benefit owners and customers, and caring for those who depend on us as we continue creating connections to empower agriculture.”
This document and other CHS Inc. publicly available documents contain, and CHS officers and representatives may from time to time make, “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Report Act of 1995. Forward-looking statements can be identified by words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on CHS current beliefs, expectations and assumptions regarding the future of its businesses, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of CHS control. CHS actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause CHS actual results and financial condition to differ materially from those indicated in the forward-looking statements are discussed or identified in CHS filings made with the U.S. Securities and Exchange Commission, including in the “Risk Factors” discussion in Item 1A of CHS Annual Report on Form 10-K for the fiscal year ended August 31, 2020. Any forward-looking statements made by CHS in this document are based only on information currently available to CHS and speak only as of the date on which the statement is made. CHS undertakes no obligation to update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise except as required by applicable law.
Nothing is better than stepping inside a feed store and catching that whiff of strong earthy smells that conjure up memories of rural living.
The unassuming one-story white building with the loading dock door wide open between Dairy Queen and Cabin Coffee is CHS Farm and Feed store. CHS is conveniently open from 8:00 am to 5:00 pm Monday through Friday and 8 am -12 noon on Saturday.
A mind-boggling number of farm and feed items fills the store’s two thousand square feet of indoor retail space.
“It is that time of the year when people are thinking of spring,” explains Greg Leth, CHS Feed Manager.
After only a few months at CHS Chatfield, Leth is knowledgeable about every product that is in the store’s inventory.
CHS employee, Chatfield resident Mark Apenhorst has worked at CHS Chatfield for the past seven years and welcomes customers by first name.
“We take pride in providing useful information, so our customers can succeed. We are here to support our customers,” shared Leth.
It is safe to say that mosquitos have created unforgettable memories for all of us. The Spartan Mosquito Eradicator, a do-it-yourself mosquito control gadget is a much-needed tool in Minnesota, home to 51 types of mosquitoes.
Aisles by aisles there are shelves lined with gopher traps and bait, tank de-ice, fencing supplies, milk replacer for baby goats and lambs and milk replacer for cattle, nipples, bags of dog and cat food, birdseed, bird feeders, Cenex lubricants, boots, and gloves.
Customers can find a full line of NutriSource and Tuffy’s pet food brand for cats and dogs. NutriSource and Tuffy’s brands are manufactured in Perham, Minnesota. The Minnesota company has been producing healthy pet foods since 1964.
Fans of wild birds will find shelves of bird food including peanuts in shells and unshelled and a selection of bird feeders to care for the wild birds that call their home, home. Squirrels are also taken care of at CHS with small bags of corn on the cob.
Mice problems? CHS can help. The store sells necessary mice and rat bait.
Customers will also find a selection of hand tools – snow shovel, pitchforks, shovels, and a large selection of gloves and overshoes. Eye-catching bags of colorful ear tags occupy a section of one wall.
Baby chicks are not kept at feed stores as they were in the past, but baby chickens, ducks, geese, turkeys, Guinea, peacocks, partridges, both layers, and fryers, can be ordered. According to a Facebook post the 2021 hatchery catalogs arrived in February, and most orders begin in March. Leth mentions that “Feeders and waterers are also available to get your birds off to a good start.” Fowl need proper nutrition and CHS offers and array of excellent feed choices for all poultry species and stages of life.
The store carries a complete inventory of CHS Cenex lubricants. A Facebook post encourages CHS followers to “Stop in get what you need to prepare your equipment for spring!”
For your lawn needs. Grass seed, fertilizer, turf seed, and weed and insect control are always in stock.
Heading to the building’s unheated section were bags of softening salt and ice melt, with Leth pointing out that they are competitively priced. Continuing the tour, Leth pointed out the bags of feed for horses, beef, and chicken feed, as well as lick tubs for horses and cattle. Wood shavings for bedding are available at the store.
Standing next to the dock, Leth emphasized that at CHS as compared to large farm stores, customers can pull right up to the loading dock, and CHS staff will load their order into their car or truck.
Leth pointed out that “It is important for the community to know that we fill LP tanks for bar-b-que grills.”
CHS supports community organizations – local and national FFA efforts, 4-H, County Fairs. Seeds for Stewardship the company’s foundation.
“In the end, it is our goal to provide that something extra, to help our customers’ outdoor experience be a little more enjoyable and their projects more successful,” shared Leth.
Written by Charlene Corson Selbee for FILLMORE COUNTY JOURNAL
The interior of a grain bin is one of the most hazardous places on a farm, so the best way to resolve situations with stored grain is safely outside. If you must enter a bin, be sure to know what you might find and plan accordingly.
Pay Online is now available through the MyCHS app.
With Pay Online, anyone who has signed up for MyCHS can now easily pay statements or current balances securely from single or multiple bank accounts, view scheduled payments, and look up past online payments.
Pay Online saves you time and money as you no longer need to write and mail checks. Find the Pay Online feature in the lower-left hand corner. It’s easy to set up bank accounts so gather up your bank account number and routing number to get started today!
CHS is kicking off the new year with a series of educational grain marketing webinars.
Tune in to hear from grain experts across CHS as they dive into all aspects of grain marketing, from futures to basis and all things in between. They will also be discussing grain marketing contracts and the benefits and strategies behind each type. All of this is designed to help you get the most out of every bushel.
Do I really need to contract? When is the right time to contract? How do I know if I’m getting a good price? Why is the price of the contract higher than today’s price?
Over the years, there has been a lot of discussion and even a slight bit of controversy over the subject of fuel contracting on the farm. Let me tell you this, there are no right or wrong answers to these questions. I honestly don’t know if these are even the questions you want to be asking yourself when thinking about contracting.
This time last year crude oil was hanging out around $60/barrel, which was about the average for 2019, and the beginning of 2020. Until Covid hit the US, and along with it came the potential for an economic disaster that could top the Great Depression. On April 20, 2020 the crude market made history; closing the day at -$36.98. For 1-day crude oil was worth less than nothing! What a day, filled with fear and uncertainty. Since this day the markets have seen a slow steady recovery, very slow. Non the less, we are currently hanging out around $45/barrel. With no sign of complete economic recovery in the near future, the market has bounced a bit in the past few months; but seems to really like that $45/barrel marker.
Though the energy markets seem very content under $50/barrel right now, we have to ask ourselves, what does the next 9 -12 months actually have in store for us? Will the US continue to struggle financially? Will Covid continue to rule the energy markets? Will the new administration bring in new changes that will ultimately affect the markets? The unknown can be quite scary.
So, let’s go back to the original questions:
Do I really need to contract?
That depends, how will you be affected by a price spike that could bring diesel fuel up over $1+/gallon higher than the current price?
Does contracting give you piece of mind? Do you like to gamble? When is the right time to contract?
There is no right or wrong time to contract. Historically, pricing is at it’s best between December & March…but history doesn’t always repeat itself! If 2020 taught us anything, it taught us that! Leaning on your energy sales consultant is the best idea.
How do I know if I’m getting a good price? What is a good price?
The question you really need to ask yourself is; does this price work with my annual budget? In other words, can I spend this much for fuel and still make the necessary profit for my business.
Why is the price of the contract higher than today’s price?
Contract prices can sometimes be higher than the current rack price (not always) because we are buying “futures”. With “futures” purchase there is always a risk, and risky behavior comes with a higher price-tag! Speculations of the futures markets can also wreak havoc on contract pricing-will there be supply issues in spring or fall? Will there be a bumper crop and cause for higher demand for fall? Will the prospect of a new administration cutting US drilling cause prices to skyrocket? These types of conversations will definitely raise eyebrows and lock in pricing!
Back to the original question of “is contracting your fuel important?”
The answer is = YES, it is important, but it is not the best option for everyone. Only you can make that decision if contracting is right for you.
One statement I make to my customers: DON’T LOOK BACK! What I mean by this, if you lock in your fuel at a price that you are comfortable with, stop shopping. There is no reason to waste precious time looking for the cheaper price, there is always going to be a cheaper price, but there is always going to be a higher price too. For your own piece of mind, lock it in and forget about it. DON’T LOOK BACK, you might trip over something in front of you!
Written by Kim Leisner, Certified Energy Specialist