CHS provides all services from farm to fork
13 August 20147 min reading
Mark Palmquist; “We believe our connection from the farmer – including the fertilizer, fuel and other products and services needed to grow and market grain – all the way to the end consumer gives us a unique place in the global marketplace and make us a great partner for our customers around the world.”
As one of the major players of the world grain industries; CHS is U.S.’s 62nd largest company giving services in many fields from fertilizer to grain marketing, from milling to production of ethanol, animal feed and food. This versatile feature makes CHS a real solution partner for farmers and food producers. Merging its milling businesses with Cargill under Horizon Milling previously and entering into a tripartite partnership (Cargill-CHS-ConAgra) with merging of Horizon with ConAgra under Ardent Mills a while ago; the company markets grain to 65 countries today. Executive vice president and chief operating officer of Ag Business of CHS Mark PALMQUIST answered our questions about their company.
CHS Inc., is one of the important players of the world grain industry. Firstly, could you tell us about the history and structure of CHS and how have you come today?
CHS is the largest U.S. cooperative, owned by about 600,000 farmers and ranchers across the United States. Our history goes back to the late 1920s when the first of our parent cooperatives were formed. CHS itself was created in 1998 with the merger of a major grain and processing cooperative with a co-op that provided energy, fertilizer and other crop production products and services. Today we are the 62nd largest company in the U.S., with revenues of nearly $45 billion for our fiscal year 2013.
You are a versatile company operating in many fields from grain marketing to processing. Could you give information on CHS’s current operation and service fields?
CHS is a very diverse organization. We have 14 business units that include petroleum refining and marketing, lubricating oils, propane gas, fertilizer, grain marketing, ethanol production, marketing and distribution, animal feed, food and food ingredients. We also offer insurance, financial and risk management services. We operate two petroleum refineries, have a network of pipelines and have a U.S. convenience store network under the Cenex® brand.
You have an important substructure and network in grain marketing. What can you say about your global distribution network and the capacity in this field?
The goal of our company is to ensure that our U.S. cooperative owners have global and domestic markets for the grain they raise every day of the year. This means we must have a strong worldwide presence in both grain origination and marketing to customers.
In addition to our long-standing North American grain origination, we also have origination capability in South America, the Black Sea and Danube River regions, and Australia. And, we have grain marketing offices in those regions as well as the Asia/Pacific region to better serve our customers. It’s important to note that we are also very involved in the fertilizer business in North America and our global origination regions. This allows us to support farmers from planting to the marketplace.
How many countries do you supply grain? Which grain products are prominent among the supplied products?
Today CHS markets grain to about 65 countries. Our major crops are corn, soybeans and wheat. We also handle many smaller grains like barley, as well as Distillers Dried Grain Solubles (DDGS) which is used in livestock feed.
Where should the mills or official agencies of the countries desiring to meet their grain need from you apply or what should they do? What are the services and privileges provided by CHS for its customers different from its competitors?
We believe that as a farmer-owned cooperative we offer the unique advantage of connecting our customers directly to the origins of the grain they needs. This allows us to provide identity preservation to meet specific requirements, if desired. We also have very strong global logistics capabilities. A list of CHS global locations and contacts is available on our website www.chsinc.com.
If we talk about your grain processing operations, for which grain products is CHS prominent in processing? Could you give information on your processing facilities and their capacities?
Our primary processing focuses at this time are soybeans and wheat. Within the soybean category, we have a global processing platform in the U.S., Israel and China. We refine more than 1.3 million pounds (590,000 metric tons) of soybean oil annually and process nearly 120 million bushels (3.3 million metric tons) of soybeans each year, the equivalent of 3 million acres (1.2 million hectares).
In addition, we produce 3 million tons (2.7 million metric tons) of soy protein products for global and domestic use in human and pet food products, including soybean meal and Honeysoy® brand soy flour at U.S. facilities in Mankato and Fairmont, Minn., and Creston Iowa; and Ultra-Soy® textured soy proteins at Hutchinson, Kan., U.S.; Ashdod, Israel, and Ningbo, China.
We also serve the functional food, beverage, nutraceutical and nutricosmetic markets with specialty soy protein concentrates and isolates and Solgen soy isoflavones from facilities in South Sioux City, Neb., U.S.; Ashdod and Ashkelon, Israel; and Ningbo, China.
We also reach consumer tables across the United States with vegetable oil-based food service and retail products produced by Ventura Foods, LLC., a joint venture company that is the nation’s leading manufacturer and marketer of branded and custom-made shortenings, oils, dressings, sauces, mayonnaise, margarines, culinary bases and pan coatings.
As CHS Inc., you merged your milling businesses with Cargill and ConAgra Foods under Ardent Mills a while ago. Could you tell us how this was decision made, its reasons and the merger process in terms of CHS?
The goal of our grain processing operations is always to add value for the farmers who own our cooperative. We have been involved in flour milling since the late 1940s. About 12 years ago we joined with Cargill to form Horizon Milling which was extremely successful. We saw being part of Ardent Mills as a means of expanding opportunities for wheat growers and co-ops because the new company's asset base will provide additional wheat sourcing opportunities. In addition, Ardent Mills' product innovation capabilities and other strengths will enable our wheat growers to further connect to the consumer marketplace.
How many of your milling businesses will give service under Ardent Mills? Do you have any grain processing or milling businesses that are not included in the merger?
CHS contributed its flour mills to the Ardent Mills joint venture. These facilities were also part of Horizon Milling. We do not own or operate other flour mills.
Are there any other investments that can attract the attention of world grain industry on CHS agenda?
In recent years, CHS has made and is continuing to make tremendous investments in its grain origination, export and processing platforms within the U.S. and in global locations. This is a foundation of our commitment to add value for both the farmers who own us and the customers around the world who depend on us for quality grain and grain-based products. We’ve made significant investments in our fertilizer supply and distribution system as well, adding import/export capacity and regional distribution warehouses.
Finally, what would you like to add about your company and services?
We believe our connection from the farmer – including the fertilizer, fuel and other products and services needed to grow and market grain – all the way to the end consumer gives us a unique place in the global marketplace and make us a great partner for our customers around the world.
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