At its September meeting, the CHS Board of Directors made a number of decisions regarding equity management. The following letter from CHS Board Chairman Dan Schurr outlines these decisions:

Dear Cooperative Owner,

CHS was built on the shared values of managing our business with the highest integrity, building lasting and mutually rewarding relationships, and partnering for our collective success.

These values guide every decision your CHS Board of Directors makes on your behalf. Thanks to the dedication and hard work of those owners and employees that came before us, CHS is a cooperative that’s been built for the long haul. Your Board of Directors will ensure that tradition continues. It’s with this spirit that we share recent Board decisions around equity management.

Despite solid performance in our core businesses, a few large events have resulted in substantial fiscal 2017 financial losses in certain patronage-based businesses. These events included a loss attributed to a large producer loan and business unit asset impairments in the United States.

It has been the Board’s practice to offset patronage-sourced operating losses against the income in patronage allocation units. This practice will continue for fiscal year 2017, with some modification due to the size of the operating losses. Specifically, some of these patronage-based business operating losses will be offset against patronage income from specific allocation units and some will be offset against the unallocated capital reserve. In addition, the CHS Board made the following patronage-related decisions at its September meeting:

• The CHS Board will retain 10 percent of patronage-sourced earnings to the unallocated capital reserve, as in years past.
• CHS will issue non-qualified equity certificates for FY17 patronage-based earnings. No cash patronage will be issued in 2018 based on FY17 performance.These non-qualified equity certificates will be included in the equity revolvement program and will be redeemed at the discretion of the CHS Board. Non-qualified equity certificates are generally not taxed until redeemed.
• The CHS Board has designated a $10 million cap for individual member redemption for estates and age 70 retirements, per the established redemption policy. No member-cooperative equity will be redeemed in 2018. The Board will continue to review equity retirements on a quarterly basis.
• Eligible CHS owners will share in the benefit of unused IRS Sec. 199/DPAD deductions. 

These decisions were not made lightly and came after much discussion and assessment about how best to serve CHS and all of our owners for the long term.

While CHS experienced a challenging year, we are taking necessary steps to restore financial flexibility and minimize operational risk to ensure a strong future for our owners.

Your CHS Board of Directors remains committed to serving you. Your continued business is vital to the strength and growth of CHS, and is greatly valued. If you have questions specific to your equity, please feel free to contact CHS Patron Equities at 800-328-6539, ext. 6124.

Sincerely,
Dan Schurr
Chairman, CHS Board of Directors

The CHS Foundation, funded by charitable gifts from CHS Inc., is committed to developing the next generation of leaders in agriculture. As part of the foundation’s work centered on advancing agriculture education, it has awarded scholarships to 14 Minnesota high school graduates. The Minnesota students are among 100 students representing 23 states and Canada. Each will receive a $1,000 scholarship to cover expenses associated with their freshman year of college.

“The success of our hometown communities and rural America depends on students with a strong interest in agriculture to pursue ag-focused degrees and be the innovators to feed the world into the future,” says Nanci Lilja, president, CHS Foundation. “We’re pleased to recognize these students with scholarships and join their communities in looking forward to the important contributions they’ll make to the ag industry.”

These Minnesota high school students are among the 2017 CHS scholarship winners:

Erica Earley, Wykoff, Minn.; Northeast Iowa Community College; Agriculture Business and Beef Science

Jacey Edlin, Jackson, Minn.; South Dakota State University; Agricultural Education

Mikayla Erf, Oakdale, Minn.; University of Minnesota, Twin Cities; Animal Science

Dillon Gratz, Atwater, Minn.; South Dakota State University; Dairy Science

Kylee Kohls, Litchfield, Minn.; South Dakota State University; Agriculture Education, Communications & Leadership

Adam Kroll, Royalton, Minn.; North Dakota State University; Ag Economics

Holly Larson; Medford, Minn.; South Dakota State University; Agricultural Education

Madeline Patterson, Kenyon, Minn.; North Dakota State University; Agricultural Communication

Kourtney Pederson, Farmington, Minn.; Iowa State University; Agribusiness

Joshua Schlumpberger, Bowlus, Minn.; University of Minnesota, Twin Cities; Computer Science

John Toelle, Brown’s Valley, Minn.; North Dakota State College of Science; Farm Management

Jared Troendle, Lanesboro, Minn.; South Dakota State University; Agricultural Business

Madeline Weninger, Buffalo, Minn.; South Dakota State University; Agricultural Education

Sierra Williamson, Sherburn, Minn.; University of Minnesota, Twin Cities; Agricultural and Food Business Management

An independent, external committee selected recipients based on their career goals, essays, extracurricular involvement, transcripts and reference letters.  In addition to high school scholarships, the CHS Foundation funds an additional 200 scholarships for students enrolled in an agricultural-related program at colleges across the country.  These scholarships range from $1,000 to $2,000 and are directly administered by more than 30 CHS partner schools.  Click here for more information.

About the CHS Foundation

The CHS Foundation is funded by charitable gifts from CHS Inc., the nation’s leading farmer-owned cooperative and a global energy, grains and foods company. As a part of the CHS stewardship focus, the CHS Foundation supports organizations that develop future leaders for agriculture through education and leadership programs, improve agricultural safety and enhance community vitality in rural America. Learn more at chsinc.com/stewardship.