CHS was just wrapping up a profitable quarter as Russian forces invaded Ukraine at the end of February, roiling two businesses at the heart of its operations — energy and grain.
CHS wraps up profitable quarter as war in Ukraine unsettles key energy and grain segments
The Minnesota agricultural firm's second quarter ended before the effects of the conflict could be felt. Improved energy demand, commodity and fertilizer prices drove CHS profits in the first months of 2022.
April 6, 2022 at 7:20PM
The Inver Grove Heights-based agribusiness has since been working to ensure the safety of its 46 employees in Ukraine, where it has a presence as a grain trader.
"Their safety, like all companies with operations and people there, is first and foremost for us," CHS Chief Executive Jay Debertin said Wednesday. "We're focused on how to help them evacuate the country if they want and if they can. And if they stay, help them remain safe."
While higher prices in the grain and oil markets might at times be good for business, Debertin said, "We're quick to remind ourselves and remind everybody of the suffering of the people of Ukraine.
"We're very mindful of the tragic circumstances in Ukraine that are part of the circumstances for us in the agricultural space."
CHS has no investments or employees in Russia, he said.
Both countries are major grain exporters, and the war has led some analysts to predict a looming wheat shortage and continued high global commodity prices, which translates into higher food prices for consumers.
"The United States needs to have a good crop with likely supply disruptions around the world," Debertin said. "Those of us in agriculture are going into a spring like this with a hopeful attitude."
For the second quarter ended Feb. 28, CHS on Wednesday reported a $219 million profit, a major turnaround from the $38 million loss over the same three months a year ago.
The performance was fueled by high prices for fertilizer and greater demand for energy; CHS refines U.S. and Canadian oil for Cenex gas stations and farm customers.
"Really robust global demand, a lot of market volatility and higher commodity prices have resulted in very strong earnings within our ag segment," Debertin said.
The company reported $10.3 billion in revenue during the quarter, a nearly 25% jump over the prior year.
New York Police Department still searching for the shooter; executives were meeting for investor conference, which was closed abruptly.
