Western Minnesota Farmers Already Looking to 2020 Growing Season

Seed selection is a critical part of planning

INVER GROVE HEIGHTS, Minn. (Jan. 29, 2020) — It’s hard to believe, but farmers in western Minnesota are thinking about next spring, even though last year’s harvest is not far in the past.

There are a lot of decisions to be made and planning to be done and equipment to be repaired before we ever see a tractor on the road in the spring, or before a seed ever hits the ground. What new equipment will I need to purchase, what nutrients does my soil need, what is my fertilizer strategy, what insects and weeds will I need to worry about, how will I market my crops, should I diversify — these are all going through farmers’ minds and notes between now and then.

But one of the most important decisions a farmer will make is what seed to plant. There are different companies, different brands, different maturity ratings (how long it takes from the time the seed is planted to when it’s ready to harvest), and a long list of features and benefits for each one.

Andy Clauson, a CHS Key Agronomy Specialist who is also an authority on Allegiant® seed products, offers a few tips for making seed selections.

“It’s crucial to consider data beyond your last harvest before making seed selections for next year,” Clauson said.

“During last year’s harvest, pretty much anything that could go wrong, went wrong,” he continued. “Planting was delayed. We had a wet spring. We got in as much corn as we could in a very short window before it could get wet again. It was a struggle from the beginning.”

Due to these harsh weather conditions, there has been a trend of farmers wanting to switch to early-maturity corn, in hopes of having drier corn and earlier harvesting to prevent past struggles.

“By switching to early-maturity hybrids and varieties, you potentially give up yield,” added Clauson. “Farmers need to stick with what has historically been working best in their territories. If you normally plant 95-day maturity-rating corn, plant 95-day corn.  You don’t need to go down to 87-day corn.”

Clauson explained how temperature plays a strong role in corn development, and the importance of looking at multiyear data to reduce risk.

“By looking at historical heat units within your area, we can find a hybrid that will make it to black layer [an indicator of physiological maturity] , to help ensure the best yields to be able to market that product at the end of the season,” said Clauson.

Most farmers are ready to put the difficulties of this year’s growing season behind them, and they have a lot to think about when planning for next year. Local co-ops, ag retailers and agronomists like Andy Clauson are great resources to help do that.

© 2020 CHS Inc. Allegiant® is a registered trademark of CHS Inc.

Learn ways to stay safe during Grain Bin Safety Week

Last fall, many bushels of grain went into storage in poor conditions. This increases the risk of bridging, crusting, and other grain storage dangers. Especially this year, please review the safety tips below to ensure you and your family remain safe while working with grain.

grain bin safety training

Grain bins can be dangerous places. Purdue University researchers report that bin-related injuries such as entrapments, equipment entanglements and asphyxia are on the rise – more than 60 incidents occurred in the U.S. in 2018. 

As part of our commitment to safety as a core value, CHS is partnering with other ag industry leaders to support Grain Bin Safety Week, Feb. 16-22. Here are the top three things you can do to promote safe practices around grain bins:

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Freeze warning

Decrease the risk of cold-weather downtime with the right diesel.

use the right premium diesel during cold weather

When temperatures drop, a farmer’s work doesn’t stop. Keeping equipment running at its peak during colder weather requires a watchful eye on what’s in your fuel tank.

Here’s the main problem that comes when temperatures drop: Diesel fuel hits its cloud point — the temperature at which wax crystals begin to appear in the fuel, also known as gelling. Cloud point is reached in #2 diesel fuel when fuel temperatures hit 4 to 14 degrees Fahrenheit, depending on where you buy your fuel, says Chad Christiansen, manager of product quality and additives for CHS.

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CHS reports $177.9 million in first quarter net income

Truck delivering propane to residential home in winter

Significant increase in fall propane demand helped balance difficult market conditions

CHS reported net income of $177.9 million for the first quarter of fiscal year 2020 that ended Nov. 30, 2019. This compares to net income of $347.5 million in the first quarter of fiscal year 2019.

The results for the first quarter of fiscal year 2020 reflect:

  • Revenues of $7.6 billion compared to revenues of $8.5 billion for the first quarter of fiscal year 2019.
  • Strong supply chain performance in our propane business that was a positive contributor resulting from efficient sourcing of propane during significantly increased fall demand – brought on by unseasonably early cold and wet weather during harvest – for crop drying and home heating.
  • Less advantageous market conditions in our refined fuels business compared to the first quarter of fiscal year 2019, during which the company experienced historically wide pricing spreads between Canadian crude oil and crude oil from the United States. CHS processes Canadian crude oil at its refineries in Laurel, Montana, and McPherson, Kansas.
  • Poor weather conditions that occurred in fiscal year 2019 and the first quarter of fiscal year 2020 continued to negatively impact our Ag segment’s operations, resulting in lower crop yields, poor grain quality in some areas and lower fall crop nutrients sales.
  • Pressure on grain volume and margins due to slow movement of grain associated with unresolved trade issues between the United States and foreign trading partners.
  • Decreased fertilizer volumes compared to the first quarter of fiscal year 2019 due to a slow harvest in the first quarter of fiscal year 2020.

“We are not immune to the challenges of our industry, and our first quarter results reflect the difficulties brought on by fall weather and ongoing trade tensions,” said Jay Debertin, president and CEO of CHS Inc. “The cooperative system, however, provides CHS and its owners stability to withstand these difficult times. Our focus remains on building efficiencies in our supply chain and on operating in this challenging agricultural environment.

“During a cold and wet harvest, we leveraged our supply chain to meet the significant increase in propane needs of our owners and customers,” Debertin continued. “Our focus on meeting the needs of our owners helped deliver the successful launch of two products – Acuvant™ and Trivar™ – that will be available for spring planting.

“We know the remainder of fiscal year 2020 will continue to present challenges, and we are confident in our ability to find opportunities in those challenges, to help our owners grow their businesses and to continue to strengthen our company,” he said. “No one feels those challenges more than our owners. We remain committed to supporting communities and experts as they address the stress felt across rural America.”

First Quarter Fiscal 2020 Business Segment Results

The following segment results were reported for the first quarter of fiscal year 2020 as compared to the first quarter of fiscal year 2019.

Energy
Pretax earnings of $162.2 million in the first quarter of fiscal year 2020 compared to $232.5 million for the first quarter of fiscal year 2019 reflect:

  • Significantly less advantageous market conditions, driven primarily by decreased crude oil spreads on heavy Canadian crude oil processed at our refineries and, to a lesser extent, decreased crack spreads in our refined fuels business compared to the same period during fiscal year 2019. The decreased crude oil differentials and lower crack spreads were partially offset by favorable hedging activity in refined fuels.
  • The decrease in pretax income for refined fuels was partially offset by significantly improved propane margins from a late, wet crop combined with unseasonably cold weather across much of CHS service area that led to increased fall demand for crop drying and home heating compared to the first quarter of fiscal year 2019.

Ag
Pretax loss of $13.9 million compared to pretax earnings of $80.3 million in the first quarter of fiscal year 2019 reflects:

  • Poor weather conditions in fiscal year 2019 that culminated in a late and smaller fall harvest, resulting in decreased demand for farm supplies and crop nutrient products.
  • Ongoing global trade tensions between the United States and foreign trading partners continued to negatively impact grain volumes and margins.
  • Lower margins in our processing and food ingredients business.

Nitrogen Production
Pretax earnings of $16.5 million compared to pretax earnings of $23.7 million in the first quarter of fiscal year 2019 reflect:

  • Lower equity income from our investment in CF Nitrogen, of which CHS has partial ownership, attributable to decreased market pricing of urea and urea ammonium nitrate, which are produced and sold by CF Nitrogen.

Corporate and Other
Pretax earnings of $20.7 million compared to pretax earnings of $30.8 million in the first quarter of fiscal year 2019 reflect:

  • Results primarily from lower equity income from our investments in Ardent Mills and Ventura Foods and decreased income in our financing and hedging businesses due to market-driven interest rate reductions and lower trading activity, respectively.
CHS 1st quarter balance sheet

Five winter propane safety tips

Good tips to keep in mind throughout this winter season.

1. Clearly mark propane tanks

When a winter storm hits, finding a propane tank under feet of snow can be a difficult job. To make tanks easier to spot, customers should mark the location of their tanks with flags, poles or stakes. When selecting a marker, they should make sure to choose something that’s taller than the average snowfall in their area.

2. Remove snow and ice from propane tanks

In the event that a propane tank becomes covered in snow, it should get cleared it off using a broom — not a shovel — to prevent damage to system components. Regulators, regular vents, piping, tubing and valves should all be kept exposed. For easy access to tanks, customers should always maintain a clear and plowed pathway to them.

3. Notify snowplow contractors of propane tanks

After a heavy snowfall, it’s possible for a snowdrift to completely hide a propane tank. Customers who utilize snowplow contractors should make sure the operator knows the locations of all propane tanks on the property. If a snowplow were to come into contact with a propane tank, it could become a potentially serious safety hazard.

4. Consider a propane-powered generator

When a storm knocks out the power, it can sometimes take days for rural roads to be accessible to repair crews. A propane-powered backup generator can provide customers with peace of mind that they won’t be stuck without power in the event of a blackout. Remember, even if a generator is portable, these should never be used indoors or in an enclosed space.

5. Maintain an adequate propane supply

Even after a winter storm is over, roads can still be inaccessible by delivery trucks for days. To sustain any periods of interrupted deliveries, it’s important for customers not to let their propane tanks get too low. Suppliers who offer automatic deliveries can suggest this solution to help their customers ensure their tanks are topped off adequately.

Safety tips adapted from online LPGas article “Building Customer Trust Starts with Safety”

Stay warm during cold winter weather

Tips for Staying Safe in Cold Winter Weather:

• Wear layers of clothing, a hat, gloves and waterproof, insulated boots.

• Be careful when tackling strenuous tasks like shoveling snow in cold temperatures.

• Check on any neighbors, especially elderly people living alone, people with disabilities, and children during cold snaps (added).

• Watch for hypothermia and frostbite. Hypothermia symptoms include confusion, dizziness, exhaustion and severe shivering. Frostbite symptoms include numbness, flushed gray, white, blue or yellow skin discoloration, numbness, or waxy feeling skin.

2019 Annual Meeting Information

We’d like to invite all farmer-owners to our 2019 annual meeting! Join us to learn more about what happened at your cooperative during the past year.

Date: Tuesday, January 28, 2020
Location: Broadway Ballroom, Alexandria
Start Time: 1:00 Registration, 3:00 Business Meeting

The event has a new layout this year! A detailed schedule is listed below, with a more flexible schedule so individuals can come and go as they please. The meeting will conclude no later than 5:00.

1:00Registration Opens
1:00 to 3:00Informational Booths Open; Light Lunch Served
1:30 to 2:30Keynote Speakers
1:30 to 2:00 – Dennis St. Aubin, CHS Propane
Dennis will share an update on the propane situation this past fall, including supply, demand and logistics.
2:00 to 2:30 – Brian Rydlund, CHS Hedging
Brian will share a high-level discussion on global grain markets, trade and tariffs.
3:00Business Meeting, Producer Board Voting, CHS Update
4:00Door Prize Drawing; CHS Prairie Lakes Leadership Q&A

Absentee voting ballots are available at all CHS Prairie Lakes locations the week ahead of the meeting for patrons voting in District 1 and District 3.

We’ve got door prizes you won’t want to miss – join us for a chance at a pellet smoker grill, air compressor, buddy heater and more!

Contact a member of the CHS Prairie Lakes staff to learn more about the event! Invitations will be mailed directly to farmer-owners of the cooperative.

CHS Inc. owners elect five board members during annual meeting

Portrait of newly and re-elected CHS Board Members

CHS owners elected five board members to three-year terms during the cooperative’s 2019 Annual Meeting held Dec. 5-6 in Minneapolis. Pictured (l. to r.) are: Kevin Throener, Hal Clemesen, Mark Farrell, Alan Holm and Steve Riegel.

Officers of board also elected by board peers following Annual Meeting

CHS owners elected five board members to three-year terms during the cooperative’s 2019 Annual Meeting held Dec. 5-6 in Minneapolis. Newly elected to three-year terms are:

Hal Clemensen succeeds former director Randy Knecht, who retired from the CHS Board of Directors on Dec. 6. Clemensen represents Region 4, covering South Dakota, and has been the president of the board of directors of Agtegra Cooperative since its formation in 2018. He was president of the South Dakota Wheat Growers Association from 2005 until its merger with North Central Farmers Elevator in 2018. He is a past director and is an active member of the South Dakota Soybean Association and an active member of South Dakota Corn Growers. In 2015, the National Council of Farmer Cooperatives named him Farmer Cooperative Director of the year. He raises corn, soybeans and wheat near Conde, South Dakota. He holds a Bachelor of Science in Agricultural Economic and Agricultural Business from South Dakota State University. Clemensen was appointed to the CHS Board’s Government Relations and Corporate Risk committees.

Kevin Throener succeeds former director Dennis Carlson, who retired from the board on Dec. 6, and represents Region 3, which covers North Dakota. Throener has been a director of CHS Dakota Plains Ag since 2014 and served as vice president of the Sargent County Farmers Union Board of Directors since 2007. He has also served on the Cogswell, North Dakota, Volunteer Fire Department since 1997 and was its chief from 2010 to 2018. Throener raises corn, soybeans and alfalfa and operates a feedlot and cow/calf business near Cogswell, North Dakota. Throener and his wife Ronda are first-generation farmers who built their operation from the ground up. He studied Agricultural Systems Management at North Dakota State University. He was appointed to the CHS Board’s Governance Committee and the CHS Foundation Board of Trustees.

Reelected to three-year terms are:

  • Mark Farrell, who operates a corn, soybean and wheat farm in Dane County, Wisconsin, representing Region 5.
  • Alan Holm, who operates a corn, soybean, sweet corn, peas and hay operation and has a cow-calf herd near Sleepy Eye, Minnesota, representing Region 1.
  • Steve Riegel, who raises corn, soybeans, alfalfa, dryland wheat and milo near Ford, Kansas, representing Region 8.

Following the Annual Meeting, the board held its annual re-organization meeting. Each of the following board members was elected to one-year officer terms:

  • Dan Schurr, chair
  • C.J. Blew, first vice chair
  • Jon Erickson, second vice chair
  • Russ Kehl, secretary-treasurer
  • Steve Riegel, assistant secretary-treasurer

CHS Board announces fiscal 2019 equity management decisions

CHS will return $180 million in cash patronage and equity redemptions to its owners based on fiscal 2019 earnings.

Of that $180 million, $90 million will be distributed in cash patronage and $90 million will be distributed through equity redemptions.

  • Of the $90 million in equity redemptions, $63 million will be returned to member cooperatives and $27 million to individual members.
    • The $27 million in redemptions of individual producer member equity will be provided based on qualifying requests from individual members (estates and age 70+).
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© 2020 CHS Inc.