CHS Insights

CHS owners consistently report that the annual meeting provides one of the best opportunities of the year to network with fellow ag professionals.

Attendees were able to learn more about CHS and how its aligned cooperative system is investing for owner growth, to absorb information about industry trends and issues, and to discuss and debate and vote on CHS business matters.

In breakout sessions or on the Expo floor, CHS staff and other industry experts provided the latest industry information to approximately 2,500 annual meeting attendees regarding energy supplies and prices, the value of ethanol to owners, and commodity price trends.

The discussion about proposed changes to CHS Articles and Bylaws captured the greatest interest but modules covering politics and policies, board and employee growth and succession, recent CHS investments, and personal effectiveness drew significant attention as well.

Much of this year’s content was developed based on feedback and questions received following last year’s annual meeting or during this summer’s series of town hall meetings throughout the country.

During the CHS Annual Meeting in December, owners helped shape CHS public policy positions on a broad range of cooperative business issues. The Resolutions Committee, representing all CHS regions, formulated nearly 30 public policy resolutions for 2016 addressing a broad range of issues categorized in the resolutions as Grain and Foods, Energy and Agronomy, and the Cooperative Business Model. The work of the committee was ultimately adopted by unanimous vote of the delegates participating in the annual meeting.

The 2015 approved resolutions can be viewed from the “legislative position statements” link at chsinc.com/our-company/government-affairs. Committee members included Nathan Schulte, Iowa, chair; Phil Rogness, S.D., secretary; Tony Rossman, Minn.; Ron Tempel, Mont.; Mark Holkup, N.D.; Tracy Jones, Ill.; Paul Kilian, Wash.; and Bobby Kurten, Texas.

Never wavering from the company’s three-part commitment to deliver economic benefits, strategic investments and a strong financial foundation, CHS leadership reported solid performance for fiscal 2015 to member-owners at its recent annual meeting in Minneapolis.

“That level of commitment – from our owners, by your board, management team and CHS employees – has been the engine driving the tremendous growth, success and change your company has experienced,” CHS Board Chairman David Bielenberg told the audience.

In his remarks, Executive Vice President and Chief Financial Officer Tim Skidmore noted that the solid performance was very positive, “when you put it in the context of the softer environment we’re facing across the markets we operate in globally.”

For fiscal 2015 (Sept. 1, 2014 – Aug. 31, 2015), CHS reported net income of $781 million on revenues of $34.6 billion. The company also returned $533.8 million to its owners in fiscal 2015, based on 2014 results. CHS expects to distribute an estimated $519 million in fiscal 2016, consisting of cash patronage, equity redemptions and preferred stock dividends.

The upcoming record $2.8 billion CHS investment in CF Nitrogen – which will be finalized Feb. 1, 2016 – was a focus of leadership reports and breakout sessions.

“In making this investment,” said Carl Casale, CHS president and CEO, “we’ve completed the ‘say what you’ll do and do what you say’ journey that began more than three years ago when we committed to securing an ownership stake in nitrogen fertilizer manufacturing that not only enhances supply, but creates patronage opportunities for eligible owners.”

CHS earnings for fiscal 2015 (Sept. 1, 2014 – Aug. 31, 2015) of $781 million were down 28 percent from more than $1.1 billion for fiscal 2014, reflecting singular events as well as lower margins across CHS energy and agriculture businesses. Revenues for the year were $34.6 billion, down 19 percent from $42.7 billion for fiscal 2014, primarily due to lower values for the commodity energy and grains products.

CHS producer- and member-cooperative owners re-elected five farmers to new three-year terms as directors during the 2015 CHS Annual Meeting held Dec. 4 in Minneapolis.

Re-elected were Don Anthony, Lexington, Neb.; David Bielenberg, Silverton, Ore.; Steve Fritel, Barton, N.D.; David Johnsrud, Starbuck, Minn.; and David Kayser, Alexandria, S.D.

Following the annual meeting, the CHS Board elected Bielenberg to a fourth one-year term as chairman. Other directors selected as officers for 2016 were:

The CHS Board of Directors is considering next steps regarding proposed amendments to the CHS Articles of Incorporation and Bylaws. Proposed amendments were under consideration at the CHS Annual Meeting in December.

The CHS Board recommended approval of proposed amendments to the Articles and Bylaws. The primary change proposed would revise the CHS membership definition to allow current CHS member cooperatives who have less than 100 percent producer membership to remain CHS members. During the business portion of the annual meeting, delegates voted to postpone consideration of these proposed amendments.

In a letter to members, Chairman David Bielenberg noted that, “The process was grassroots democracy in action in keeping with the responsibility and privilege of being cooperative owners.”

As a result of the vote, the CHS Board will determine next steps in an expeditious manner when it reconvenes in 2016.

Developing a strong board is one of the most important actions an organization undertakes, and it requires a commitment to continuous improvement. Cooperative directors – and aspiring directors – have a prime opportunity to broaden their leadership abilities at an upcoming board development event being held at The Phoenician resort in Scottsdale, Ariz., on Feb. 21-23.

Your CHS Experience features speakers that will stretch your perspectives, including Goeff Colvin, senior editor at large for Fortune and one of the most respected voices in business journalism, and Michael Abrashoff, former naval commander and author of “It’s Your Ship,” who will share an inspiring lesson on transforming a crew to achieve positive results. (Full agenda is posted at your-chs-experience.com.) If interested in attending, contact the CEO or general manager at your local cooperative.