CHS Inc - 8% Cumulative Redeemable
CHS Inc. is a farmer- and cooperative-owned agricultural business that moves grain, oilseeds, fuels, crop inputs, and fertilizer through a network serving producers, local cooperatives, and industrial customers. Its operations span three core reportable segments: Ag, Energy, and Nitrogen Production, with additional financing, hedging, and joint-venture activities in Corporate and Other. The company buys commodities from agricultural producers and member cooperatives, then further processes, stores, transports, markets, or resells those products into domestic and international markets. CHS also provides risk-management, financing, and market-advisory services that support customers exposed to volatile commodity prices. Its business model is built around handling physical commodities and helping members manage supply, logistics, and price risk across the agricultural value chain.
Fiscal year 2025 · change from previous year
Development 2020–2025
Business
Share of revenueCrop nutrients, crop protection, seed, and related agronomy products sold to producers and cooperatives.
Origination, storage, processing, merchandising, and resale of grain and oilseed.
Refined petroleum products, wholesale fuels, transportation, and retail fuel distribution.
Ethanol and other renewable fuel-related activities, including processing and marketing.
Equity-method participation in CF Nitrogen and long-term supply of urea and UAN.
Commodity hedging, market advisory, and producer financing services.
Customers
CHS sells to a mix of farmer-owners, member cooperatives, local retailers, and nonmember agricultural producers that need inputs, marketing channels, and risk management. Its grain and oilseed businesses serve producers and cooperatives that want reliable origination, storage, and access to domestic and export markets. The Energy segment serves wholesale fuel customers, transportation channels, and retail gasoline buyers, with competition driven by price, logistics, and distribution reach. CHS Hedging and CHS Market Advisors support agricultural producers and agribusinesses that need to manage commodity volatility, while CHS Capital provides loans for operating needs, crop inputs, and margin calls. The customer base is tied to commodity cycles, seasonal farm demand, and the ability to deliver products and services through a broad cooperative network.
Primary wholesale customers that buy grain, agronomy products, fuels, and related services to resell to local farm customers.
Farmers and ranchers buying crop inputs, fuel, financing, and hedging services to support planting, production, and marketing.
Commercial and distribution customers purchasing refined products and transportation services for downstream resale or use.
Food, feed, and agricultural businesses that buy grain, oilseed, and advisory services to manage supply and price risk.
Customers outside the cooperative system that purchase fuels, agronomy products, or commodity services where CHS has market access.
Strategy
CHS is focused on managing margin rather than absolute commodity price levels, because its revenues and costs move with volatile grain, fuel, fertilizer, and energy markets. The company emphasizes balance sheet strength, liquidity, leverage management, capital allocation, and cash flow optimization to support a cyclical commodity business. It is also investing in long-term fertilizer supply through its CF Nitrogen stake and supply agreement, which helps secure dependable access to nitrogen products for members and customers. Financing, hedging, and market-advisory services extend the cooperative relationship beyond physical product sales and help customers manage price and supply risk. Capital spending is directed toward targeted growth and infrastructure that improve service to owners and customers and strengthen the cooperative system.
Nitrogen is a critical input for members, and supply security improves resilience and bargaining power in a tight fertilizer market.
Commodity prices are outside management control, so profitability depends on spreads, throughput, and disciplined capital allocation.
Financing, hedging, and advisory offerings deepen customer relationships and reduce churn in a competitive cooperative market.
Geography
CHS is headquartered in the United States and its cooperative ownership base is concentrated across U.S. farmers, ranchers, and member cooperatives. The company’s operations are primarily domestic, but it also serves global grain and energy markets and buys and sells commodities internationally. Its Energy business is tied to Midwest and Plains distribution corridors, including refining and transportation links from the Gulf Coast through the Plains states. The Ag segment explicitly operates within the United States and internationally, reflecting exposure to export channels, global commodity pricing, and cross-border trade flows. Geography matters because CHS depends on logistics, proximity to producers, and access to transport infrastructure, while its commodity businesses are exposed to regional supply disruptions and international market volatility.
Risks
CHS is highly exposed to commodity price swings because its revenues, margins, and inventory values move with grain, fuel, fertilizer, and energy markets. Its operations also face physical and logistical disruption risk from fires, explosions, weather, labor disputes, pipeline interruptions, transportation delays, and cyberattacks, any of which can interrupt refining, storage, or distribution. Consolidation among producers, distributors, cooperatives, and retailers can weaken CHS’s negotiating position, reduce customer count, and increase direct-to-customer competition. The company’s energy and agricultural businesses are also exposed to regulatory, environmental, and safety risks tied to refining, commodity handling, and hazardous materials. Because CHS relies on large inventories, fixed assets, and joint ventures, impairment risk and counterparty or supply-chain stress can also affect reported results.
- Commodity price volatilityImpact: HighLikelihood: Medium
CHS buys and sells physical commodities, so changes in grain, fuel, fertilizer, and energy prices directly affect margins, inventory values, and cash flow.
Exposure - Business interruption and supply chain disruptionImpact: HighLikelihood: Medium
Refineries, terminals, transportation assets, and grain facilities can be disrupted by weather, accidents, labor issues, or infrastructure failures.
Exposure: Energy and Ag logistics
- Cybersecurity incidentsImpact: HighLikelihood: Medium
The company depends on IT systems, third-party vendors, and cloud services for trading, logistics, and operations, creating attack surface risk.
Exposure: Enterprise systems and trading operations
- Customer and supplier consolidationImpact: MediumLikelihood: Medium
Fewer large buyers and sellers can pressure pricing, reduce volumes, and increase the chance of disintermediation.
Exposure: Ag and wholesale customer base
- Asset impairment and valuation riskImpact: MediumLikelihood: Medium
Large long-lived assets, investments in affiliates, and joint ventures require judgment on recoverability and fair value.
Exposure
Accounting
Judgemental itemsCommodity inventories can change value quickly, so reserve estimates and lower-of-cost-or-market style judgments affect reported margins.
Impact: Gross profit and working capital
CHS uses futures and other risk-management instruments to manage commodity exposure, and hedge timing can create earnings volatility.
Impact: Revenue, cost of goods sold, and IBIT
Purchases, sales, and tax timing create quarter-to-quarter swings in cash flow and comparability.
Impact: Operating cash flow and liquidity analysis
Ventura Foods and CF Nitrogen are not fully consolidated, so earnings depend on equity income and carrying-value judgments.
Impact: Net income and investment balance
Refining assets, goodwill, and other long-lived assets require recoverability assessments that can lead to noncash write-downs.
Impact: Operating income and asset values
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Last updated: 24/09/2026