At the 2023 Agricultural Symposium of the Federal Reserve Bank of Kansas City, CHS, Inc. CEO Jay Debertin shared his insights into the global trade landscape, which is undergoing significant changes driven by recent geopolitical events. Despite these shifts, Debertin highlighted the strong position of U.S agriculture amid the turmoil.
During his keynote address, Debertin underscored the geopolitical disruptions to trade flows, labeling them as “historical in speed, scale and market impact.” The CHS head pointed to the ongoing trade rift between the United States and China and the repercussions of Russia’s invasion of Ukraine in 2022 as key contributors to these seismic shifts.
Debertin noted that, despite these disruptions, the U.S agriculture sector has been in and remains in a favorable position. This is due to the combination of higher input costs, high commodity prices, and volatility which have amplified the grower’s ability to manage margins. According to the USDA, while farm income is projected to decline in 2023, 2022 marked the best year on record for inflation-adjusted net farm income since 1973, driven by strong global demand and high commodity prices.
Furthermore, the CHS, Inc. CEO detailed the situation in Ukraine and Russia – two critical players in global grain markets – and their role in the global agricultural market amid ongoing warfare. Debertin stressed the harsh impact of the conflict on the Ukrainian farmer and the potential for large trade flow adjustments.
The CEO of the diversified global agribusiness – the largest farmer-owned cooperative in the United States, generating $47.8 billion in revenues in 2022 – also spoke about the financial performance of CHS. The company experienced increased net income during the second quarter of fiscal year 2023, buoyed mainly by its Energy segment. However, the Ag segment reported a decline from its historic high in the same period a year ago.
In terms of expansion, CHS announced several key initiatives aimed at growing the company’s Ag segment. These include the construction of a 1.1-million-bushel grain shuttle facility in southeast South Dakota, US, and the addition of Cargill’s export terminal in Houston, Texas, to the company’s joint venture, TEMCO LLC. These expansions will bolster the company’s export capabilities for grains, oilseeds, and byproducts.
CHS operates 230 licensed grain storage facilities with a total storage capacity of 403.01 million bushels, making it the second-largest grain storage company in North America.
Brief about CHS Inc.
CHS Inc., a Fortune 500 company, is a globally diversified agribusiness owned by U.S. farmers, ranchers, and cooperatives. Headquartered in Inver Grove Heights, Minnesota, CHS’s operations span food processing, farm supply, financial services, and retail businesses. As one of North America’s largest convenience store networks, it distributes Cenex brand fuel in 19 states. CHS’s history traces back to 1931, and it co-brands with the Missouri-based convenience store chain, Eagle Stop.
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