Say What You’ll Do, Do What You Say

CHS has demonstrated commitment to helping our owners grow through our deeply held rural value of saying what you’ll do and then doing what you say.

We laid out our strategy five years ago and worked together to build stronger producers, stronger co-ops and a stronger CHS. Our commitment serves as the rudder we will need to navigate the rapidly churning waters of the ag industry, which is expected to undergo significant change in the coming years.

As I shared at the CHS Annual Meeting, we’ve kept our commitment to growing our core CHS businesses on your behalf. In energy, over a few short years, we’ve invested more than $2 billion in our petroleum refining, pipeline, storage and distribution systems, including gaining full ownership of the McPherson, Kan., refinery, and expanding capacity at the McPherson and Laurel refineries.

We grew our domestic and global commodities platform to create greater enterprise value by boosting our domestic and global export capacity and adding domestic and foreign grain origination capacity. We also acquired an export terminal in Romania and are developing a partnership in Ukraine. This includes small grains origination capacity in Australia, as you’ll read in this issue of C.

We fulfilled our commitment to enter the nitrogen fertilizer manufacturing space on your behalf by investing $2.8 billion in CF Industries Nitrogen, LLC, which will enhance supply and create immediate patronage opportunities.

And we added value to what our owners grow by increasing our soy flour production capacity, expanding our sunflower business and acquiring a canola processing plant. On the wheat side, the 18-month-old Ardent Mills joint venture continues to deliver excellent results for our member co-ops and producers who are its primary wheat suppliers.

The next five years will likely bring waters far more turbulent, however. A significant decline in global commodity prices may lead to one of the more momentous consolidations in our industry’s history, from the producer level to individual cooperatives to agribusiness, testing the viability of companies in our sector. One potential harbinger is now unfolding in front of us.

In early December, Dow Chemical and DuPont — suppliers to CHS and its owners — announced a $130 billion merger that, if successful, will result in three separate companies, focusing on agriculture, material science and specialty products. I understand the purpose and value behind this merger but, more important, I believe that more of this activity will take place in the future.

Together, we’ve built a sturdy ship, through a strong, aligned cooperative system that leverages the CHS enterprise to help our member cooperative- and producer-owners grow. As we move beyond 2015, company leadership will revisit and update CHS operating strategies and aspirations, akin to “checking one’s compass,” to ensure that we have the vision and wherewithal to navigate through storms, take advantage of opportunities that arise and help you stay relevant in the global marketplace.

While the ag business waters may roil in the coming years, our commitment to you will be steadfast. We are dedicated to living the core rural value of saying what you’ll do and then doing it. And doing it right. Always.

The past five years were an example of this cooperative system at its finest and this will continue, even in a competitive marketplace undergoing change. I’m proud and humbled to be part of the commitment we make together every day.