CHS Inc.
07/08/2026 | Press release | Distributed by Public on 07/08/2026 09:46
Quarterly Report for Quarter Ending May 31, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is intended to provide a reader of our financial statements with a narrative from the perspective of our management regarding our financial condition and results of operations, liquidity and certain other factors that may affect our future results. Our MD&A is presented in the following sections:
•Overview
•Business Strategy
•Fiscal 2026 Third Quarter Highlights
•Fiscal 2026 Trends Update
•Operating Metrics
•Results of Operations
•Liquidity and Capital Resources
•Critical Accounting Policies
•Recent Accounting Pronouncements
Our MD&A should be read in conjunction with our Annual Report on Form 10-K for the year ended August 31, 2025 (including the information presented therein under Risk Factors), as well as the condensed consolidated financial statements and the related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q.
Overview
CHS Inc. is a diversified company that provides grain, food, agronomy and energy resources to businesses and consumers on a global scale. As a cooperative, we are owned by farmers, ranchers and member cooperatives across the United States. We also have preferred shareholders who own our five series of preferred stock, all of which are listed and traded on the Global Select Market of The Nasdaq Stock Market LLC ("Nasdaq").
Effective September 1, 2025, we changed the internal financial information reviewed by our chief operating decision maker ("CODM"), our Chief Executive Officer, to evaluate performance and allocate resources to our operating segments. As a result of this change, all prior period segment information has been recast to conform to the current year presentation. We have three reportable segments: Energy, Grains and Agronomy.
•The Energy segment consists of our wholesale and retail activities within the refined fuels, propane and lubricants product lines. The refined fuels product line includes petroleum refining, pipelines and terminals and markets gasoline, diesel fuel and renewable fuels under the Cenex® brand to member cooperatives and other independent retailers. The lubricants product line includes the blending, sale and distribution of primarily Cenex® brand lubricants, and the propane product line markets propane and other natural gas liquids through wholesale and retail market channels. Previously, this segment included our transportation services business, which is now reported under Corporate and Services.
•The Grains segment comprises our global grain marketing and processing activities as part of the feed grains, oilseeds, wheat, specialty grains and animal nutrition product lines. The Grains segment connects producers to domestic and global grain markets through a broad origination and distribution network. It markets commodities such as wheat, corn, ethanol, soybeans, oilseeds and specialty grains. The segment operates grain facilities and trading offices across five continents, serving processors, food manufacturers and renewable fuel producers. Further, the Grains segment produces ethanol and is one of the nation's largest suppliers of ethanol inputs into gasoline products, while also specializing in soybean and canola processing. These results were previously included within the former Ag segment.
•The Agronomy segment consists of our wholesale and retail agronomy activities within the crop nutrients and crop protection product lines. The Agronomy segment provides crop inputs and agronomy services to farmers, member cooperatives and other retailers. It offers crop nutrients, crop protection products and seed, including both proprietary and third-party brands. The Agronomy segment also includes our Nitrogen Production business consisting of our equity method investment in CF Nitrogen. Our supply agreement with CF Nitrogen requires us to purchase a specified quantity of granular urea and urea ammonium nitrate annually from CF Nitrogen. These results were previously included within the former Ag and Nitrogen Production segments.
•Our ag retail business, which was included in our former Ag segment, is now incorporated into the Energy, Grains and Agronomy segments based on the specific products sold and their relevant product lines.
The Company's remaining operations are not reportable segments, as defined by the applicable accounting standard, and are classified within Corporate and Services. Corporate and Services primarily represents our financing and hedging businesses, which provide services to our members and consist of a financial services business and a U.S. Commodity Futures Trading Commission-regulated futures commission merchant ("FCM") for agricultural commodities hedging. Our nonconsolidated investments in Ventura Foods, LLC ("Ventura Foods"), and Ardent Mills, LLC ("Ardent Mills"), are also included in our Corporate and Services category. All other nonconsolidated investments are included in our Energy, Grains and Agronomy segments.
Management's Focus. When evaluating our operating performance, management focuses on gross profit and income before income taxes ("IBIT"). As a company that operates heavily in global commodities, there is significant unpredictability and volatility in pricing, costs and global trade volumes. Consequently, we focus on managing the margin we can earn and the resulting IBIT. We also focus on ensuring balance sheet strength through appropriate management of financial liquidity, leverage, capital allocation and cash flow optimization.
Seasonality. Many of our business activities are highly seasonal and our operating results vary throughout the year. Our revenues and IBIT generally trend lower during the second fiscal quarter and increase in the third fiscal quarter. For example, in our Grains segment, our retail business generally experiences higher volumes and revenues during the fall harvest, which generally corresponds to our first fiscal quarter, and our global grain and processing operations within Grains are subject to fluctuations in volumes and revenues based on producer harvests, world grain prices, global demand and international trade relationships. Our Agronomy segment generally experiences higher volumes and revenues during the spring planting season. Our Energy segment generally experiences higher volumes and revenues in certain operating areas, such as refined fuel products, in the spring, summer and early fall when gasoline and diesel fuel use by agricultural producers is highest and is subject to global supply and demand forces. Other energy products, such as propane, generally experience higher volumes and revenues during the winter heating and fall crop-drying seasons. The tables below demonstrate the historical trend of seasonality inherent in our businesses.
| Quarterly revenues as a percentage of annual total | Fiscal Year 2025 | Fiscal Year 2024 | Fiscal Year 2023 | 3-Year Average | |||||||||||||||||||
| Q1 | 26 | % | 29 | % | 28 | % | 28 | % | |||||||||||||||
| Q2 | 22 | % | 23 | % | 25 | % | 23 | % | |||||||||||||||
| Q3 | 28 | % | 25 | % | 26 | % | 26 | % | |||||||||||||||
| Q4 | 24 | % | 23 | % | 21 | % | 23 | % | |||||||||||||||
| Quarterly IBIT as a percentage of annual total | Fiscal Year 2025 | Fiscal Year 2024 | Fiscal Year 2023 | 3-Year Average | |||||||||||||||||||
| Q1 | 42 | % | 47 | % | 41 | % | 43 | % | |||||||||||||||
| Q2 | (14) | % | 17 | % | 16 | % | 6 | % | |||||||||||||||
| Q3 | 42 | % | 28 | % | 28 | % | 33 | % | |||||||||||||||
| Q4 | 30 | % | 8 | % | 15 | % | 18 | % | |||||||||||||||
Pricing and Volumes. Our revenues, assets and cash flows can be significantly affected by global market prices and sales volumes of commodities such as petroleum products, natural gas, grain, oilseed products and agronomy products. Changes in market prices for commodities we purchase without a corresponding change in the selling prices of those products can affect revenues and operating earnings. Similarly, increased or decreased sales volumes without a corresponding change in the purchase and selling prices of those products can affect revenues and operating earnings. Commodity prices and sales volumes are affected by a wide range of factors beyond our control, including weather; crop damage due to plant disease or insects; drought; availability/adequacy of supply of a commodity; availability of reliable rail, river, truck and ocean transportation networks; disease outbreaks; government regulations and policies; global trade disputes; global competition; wars and civil unrest; and general political and/or economic conditions.
Business Strategy
Our business strategies focus on an enterprisewide effort to create an experience that empowers customers to make CHS their first choice, expand market access to add value for our owners and transform and evolve our core businesses by capitalizing on changing market dynamics. To execute these strategies, we are focused on implementing agile, efficient and sustainable technology platforms; building robust and efficient supply chains; hiring, developing and retaining high-performing, diverse and passionate teams; achieving operational excellence and continuous improvement; and maintaining a strong balance sheet.
Fiscal 2026 Third Quarter Highlights
•Our Energy segment benefited from strong crack spreads driven by global market dynamics, which were mostly offset by record-high expenses for renewable energy credits.
•Grains performance was driven by continued global headwinds affecting grain margins, partially offset by strong oilseed crush margins.
•Continued strong performance by our CF Nitrogen equity method investment was partially offset by lower sales volumes of agronomy products, due to higher prices and ongoing weakness in the U.S. farm economy.
Fiscal 2026 Trends Update
Our segments operate in cyclical environments in which market conditions can change rapidly with significant positive or negative impacts on our results. We anticipate various macroeconomic factors will continue to drive uncertainty and instability in global energy and agricultural commodity markets, as well as global financial markets, which could have a significant impact on each of our segments during fiscal 2026 and beyond. These factors include, among others, the ongoing war between Russia and Ukraine and conflict in the Middle East and other regions; shifts in global trade flows for commodities, including global economic impacts from supply disruptions associated with access to the Strait of Hormuz; global competitiveness giving rise to a weak export market for U.S.-sourced agricultural products; potential changes in U.S. trade policy, including increased or fluctuating tariffs; a changing interest rate environment; and continued pricing pressures impacting costs of labor, freight and materials. These factors, or any form of them, could cause significant margin pressure and lower profitability. To mitigate these impacts, we evaluate the economic environment and adjust our operations and business strategies to help improve our position in the market. In addition to these broad macroeconomic factors, other factors could impact demand and pricing for agricultural inputs and outputs, as well as our ability to supply those inputs and outputs while remaining profitable. These include the cost of renewable energy credits, the price of which has been volatile in recent years and could positively or negatively impact our profitability. For example, the U.S. Environmental Protection Agency ("EPA") issued a renewable volume obligation ("RVO") in March 2026, which, as discussed in the MD&A Operating Metrics section, creates price uncertainty and volatility, while also significantly increasing the cost of our compliance with the program. Given the nature of our business, market dynamics and other mechanisms, it is possible the potential RVO compliance costs may be partially or wholly offset by certain other opportunities in our Energy and Grains businesses, but it is unknown if those opportunities will materialize. Additional factors that could impact demand and pricing of agricultural inputs and outputs include a weaker farm economy and regional factors, such as unpredictable weather conditions, including those due to climate change. We currently expect global economic factors impacting energy and agricultural commodities to be volatile and have the potential to be headwinds and/or tailwinds dependent on future global market conditions as they evolve throughout the remainder of fiscal 2026 and into fiscal 2027. Further, in light of uncertainty in the markets we serve, we are unable to predict how long the current environment will last or the significance of the financial and operational impacts to us; however, we currently expect the trend of volatile energy and agricultural commodities to persist throughout fiscal 2026 and into fiscal 2027. Refer to Item 1A of our Annual Report on Form 10-K for the year ended August 31, 2025, for additional considerations these and other risks may have on our business operations and financial performance.
We will continue to execute our enterprise priorities for fiscal 2026, including maximizing our segments through our integrated supply chains and capitalizing on domestic and global opportunities, as we navigate uncertain market conditions for energy and agricultural commodities.
Operating Metrics
Energy
Our Energy segment operations primarily include our refineries in Laurel, Montana, and McPherson, Kansas, which process crude oil to produce refined products, including gasoline, distillates and other products. To ensure the reliability of our refineries, we perform major maintenance activities every two to five years, which require a temporary shutdown of operations. These planned shutdowns allow us to extend the life, increase the capacity and improve the safety and efficiency of our refinery processing assets. They also minimize unplanned business interruptions and are essential to the long-term reliability and profitability of our Energy segment.
During periods of maintenance, utilization rates, throughput volumes and refined fuel yields are lower, and we may purchase refined petroleum products from third parties to meet the needs of our customers. These third-party purchases may result in lower margins than for products produced by our refineries, which reduces our profitability.
The following table provides information about our consolidated refinery operations.
| Three Months Ended May 31, | Nine Months Ended May 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Refinery throughput volumes* | (Barrels per day) | ||||||||||||||||||||||
| Heavy, high-sulfur crude oil | 92,204 | 82,160 | 105,357 | 99,637 | |||||||||||||||||||
| All other crude oil | 72,752 | 30,767 | 72,008 | 55,682 | |||||||||||||||||||
| Other feedstocks and blendstocks | 13,186 | 3,560 | 16,852 | 12,002 | |||||||||||||||||||
| Total refinery throughput volumes | 178,142 | 116,487 | 194,217 | 167,321 | |||||||||||||||||||
| Refined fuel yields* | |||||||||||||||||||||||
| Gasolines | 79,915 | 50,506 | 89,705 | 77,114 | |||||||||||||||||||
| Distillates | 80,851 | 50,226 | 86,287 | 73,146 | |||||||||||||||||||
*Lower refinery throughput and refined fuels yields experienced during 2025 and 2026 are primarily due to planned major maintenance at our McPherson, Kansas, and Laurel, Montana, refineries, respectively.
We are subject to the Renewable Fuel Standard that requires refiners to blend renewable fuels (e.g., ethanol and biodiesel) into their finished transportation fuels or purchase renewable energy credits, known as renewable identification numbers ("RINs"), in lieu of blending. The EPA generally establishes new annual renewable fuel percentage standards for each compliance year in the preceding year. In March 2026, the EPA issued a final RVO for calendar years 2026 and 2027 that increased the renewable fuel percentage standards compared with the previous RVO. The new RVO represents the highest blending obligation ever issued by the EPA.
We generate RINs through our blending activities, but we cannot generate enough RINs to meet the needs of our refining capacity; therefore, RINs must be purchased on the open market. The price of RINs can be volatile, with prices for D6 ethanol RINs and D4 biodiesel RINs increasing by 95% and 85%, respectively, during the three months ended May 31, 2026, compared to the same period during the prior fiscal year. The final RVO has impacted the demand for RINs, and we expect continued price volatility along with elevated and potentially increasing RINs prices for the remainder of fiscal 2026 and into fiscal 2027. Estimates of our RINs expense are calculated using an average of RINs prices each month.
In addition to our internal operational reliability, the profitability of our Energy segment is largely driven by crack spreads (i.e., the price differential between refined products and crude oil inputs) and Western Canadian Select ("WCS") crude oil discounts (i.e., the price discount for WCS crude oil relative to West Texas Intermediate ("WTI") crude oil), which are driven by supply and demand of refined products. Supply and demand dynamics in the global and North American refined product markets resulted in increased crack spreads during both the three and nine months ended May 31, 2026, compared to the same periods of the prior year. The table below provides information about average market reference prices and differentials that impacted our Energy segment.
| Three Months Ended May 31, | Nine Months Ended May 31, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Market indicators | |||||||||||||||||||||||
| WTI crude oil (dollars per barrel) | $ | 96.03 | $ | 63.99 | $ | 72.63 | $ | 68.71 | |||||||||||||||
| WTI - WCS crude oil discount (dollars per barrel) | $ | 14.36 | $ | 11.69 | $ | 12.87 | $ | 12.28 | |||||||||||||||
| Group 3 2:1:1 crack spread (dollars per barrel)* | $ | 39.03 | $ | 23.88 | $ | 27.56 | $ | 18.35 | |||||||||||||||
| Group 3 5:3:2 crack spread (dollars per barrel)* | $ | 36.19 | $ | 23.40 | $ | 25.26 | $ | 17.66 | |||||||||||||||
| D6 ethanol RIN (dollars per RIN) | $ | 1.7985 | $ | 0.9242 | $ | 1.3349 | $ | 0.7633 | |||||||||||||||
| D4 biodiesel RIN (dollars per RIN) | $ | 1.8339 | $ | 0.9899 | $ | 1.3688 | $ | 0.7935 | |||||||||||||||
*Group 3 refers to the oil refining and distribution system serving Midwest markets from the Gulf Coast through the Plains states.
Grains
Our Grains segment is primarily composed of our global grain marketing, processing and retail grains activities for our feed grains, oilseeds, wheat, specialty grains and animal nutrition product lines. The Grains segment connects producers to domestic and global grain markets through a broad origination and distribution network and markets commodities such as wheat, corn, soybeans, oilseeds and specialty grains. We operate grain facilities and trading offices across five continents, serving processors, food manufacturers and renewable fuel producers. Profitability in our Grains segment is largely driven by throughput and production volumes, as well as commodity price spreads; however, revenues and cost of goods sold ("COGS") are largely affected by market-driven commodity prices and weather-related conditions outside our control.
The table below provides information about average market prices for agricultural commodities, as well as sales and throughput volumes that impacted our Grains segment.
| Three Months Ended May 31, | Nine Months Ended May 31, | ||||||||||||||||||||||||||||
| Market Source* | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Commodity prices | |||||||||||||||||||||||||||||
| Corn (dollars per bushel) | Chicago Board of Trade | $ | 4.56 | $ | 4.56 | $ | 4.40 | $ | 4.47 | ||||||||||||||||||||
| Soybeans (dollars per bushel) | Chicago Board of Trade | $ | 11.80 | $ | 10.30 | $ | 11.15 | $ | 10.19 | ||||||||||||||||||||
| Wheat (dollars per bushel) | Chicago Board of Trade | $ | 6.17 | $ | 5.28 | $ | 5.62 | $ | 5.47 | ||||||||||||||||||||
| Ethanol (dollars per gallon) | Chicago Platts | $ | 1.99 | $ | 1.73 | $ | 1.84 | $ | 1.68 | ||||||||||||||||||||
| Volumes | |||||||||||||||||||||||||||||
| Grain and oilseed (thousands of bushels) | 654,971 | 604,009 | 1,961,042 | 1,805,800 | |||||||||||||||||||||||||
| North American grain and oilseed port throughput (thousands of bushels) | 252,136 | 190,979 | 771,562 | 576,610 | |||||||||||||||||||||||||
| Ethanol (thousands of gallons) | 153,826 | 138,254 | 478,556 | 418,266 | |||||||||||||||||||||||||
*Market source information represents the average week-end or month-end price during the period.
Agronomy
Our Agronomy segment is primarily composed of our wholesale and retail agronomy activities within our crop nutrients and crop protection product lines. This segment provides innovative agriculture solutions to farmers, cooperatives and other retailers. Dedicated to supporting farmer success with effective agronomy practices, we offer crop nutrients, crop protection products and seed, including both proprietary and third-party brands. Our Agronomy segment includes our Nitrogen Production business consisting of our equity method investment in CF Nitrogen. Products in the Agronomy segment are supported by wholesale and retail channels from investment in domestic manufacturing and strategic relationships with suppliers around the world. Profitability in our Agronomy segment is largely driven by the relationship between global and regional supply and demand for the underlying products and raw materials, costs of inputs used in the fertilizer manufacturing process and strength of the agricultural industry throughout the trade territories in which we operate. The table below provides information about average market prices for agricultural commodities, as well as sales and throughput volumes for our Agronomy segment.
| Three Months Ended May 31, | Nine Months Ended May 31, | ||||||||||||||||||||||||||||
| Market Source* | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Commodity prices | |||||||||||||||||||||||||||||
| Urea (dollars per ton) | Green Markets NOLA | $ | 598.92 | $ | 397.00 | $ | 463.71 | $ | 355.93 | ||||||||||||||||||||
| Urea ammonium nitrate (dollars per ton) | Green Markets NOLA | $ | 465.60 | $ | 326.95 | $ | 369.92 | $ | 267.40 | ||||||||||||||||||||
| Volumes | |||||||||||||||||||||||||||||
| Wholesale crop nutrients (thousands of tons) | 2,177 | 2,316 | 5,372 | 5,802 | |||||||||||||||||||||||||
*Market source information represents the average week-end or month-end price during the period.
Results of Operations
Three Months Ended May 31, 2026 and 2025
| Three Months Ended May 31, | |||||||||||||||||||||||
| 2026 | % of Revenues* | 2025 | % of Revenues* | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Revenues | $ | 11,582,089 | 100.0 | % | $ | 9,766,421 | 100.0 | % | |||||||||||||||
| Cost of goods sold | 11,171,469 | 96.5 | 9,436,610 | 96.6 | |||||||||||||||||||
| Gross profit | 410,620 | 3.5 | 329,811 | 3.4 | |||||||||||||||||||
| Marketing, general and administrative expenses | 302,283 | 2.6 | 258,850 | 2.7 | |||||||||||||||||||
| Operating earnings | 108,337 | 0.9 | 70,961 | 0.7 | |||||||||||||||||||
| Interest expense | 49,725 | 0.4 | 44,109 | 0.5 | |||||||||||||||||||
| Other income | (21,775) | (0.2) | (27,398) | (0.3) | |||||||||||||||||||
| Equity income from investments | (201,826) | (1.7) | (204,605) | (2.1) | |||||||||||||||||||
| Income before income taxes | 282,213 | 2.4 | 258,855 | 2.7 | |||||||||||||||||||
| Income tax expense | 14,717 | 0.1 | 27,175 | 0.3 | |||||||||||||||||||
| Net income | 267,496 | 2.3 | 231,680 | 2.4 | |||||||||||||||||||
| Net income (loss) attributable to noncontrolling interests | 130 | - | (504) | - | |||||||||||||||||||
| Net income attributable to CHS Inc. | $ | 267,366 | 2.3 | % | $ | 232,184 | 2.4 | % | |||||||||||||||
*Amounts less than 0.1% are shown as zero percent. Percentage totals may differ due to rounding.
The table below details revenues, net of intersegment revenues, and IBIT by segment for the three months ended May 31, 2026.
| Energy | Grains | Agronomy | Corporate and Services | Total | |||||||||||||||||||||||||
| Three Months Ended May 31, 2026 | (Dollars in thousands) | ||||||||||||||||||||||||||||
| Revenues | $ | 3,307,979 | $ | 5,660,619 | $ | 2,566,264 | $ | 47,227 | $ | 11,582,089 | |||||||||||||||||||
| Income (loss) before income taxes | $ | 10,099 | $ | (33,564) | $ | 275,044 | $ | 30,634 | $ | 282,213 | |||||||||||||||||||
Operating Segments
Energy
| Three Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Revenues | $ | 3,307,979 | $ | 1,915,096 | $ | 1,392,883 | 72.7 | % | |||||||||||||||
| Income (loss) before income taxes | $ | 10,099 | $ | (56,515) | $ | 66,614 | 117.9 | % | |||||||||||||||
The following commentary presents the changes in our Energy segment for the three months ended May 31, 2026, compared to the three months ended May 31, 2025.
| Revenues | IBIT | ||||||||||
| For the three months ended May 31, 2026: | (Dollars in thousands) | ||||||||||
| Volume | $ | 597,018 | $ | 1,147 | |||||||
| Price impact on revenues and margin impact on IBIT | 795,865 | 77,542 | |||||||||
| Other IBIT | - | (12,075) | |||||||||
| Total change | $ | 1,392,883 | $ | 66,614 | |||||||
Total Energy segment revenues increased $1,392.9 million, or 72.7%, during the three months ended May 31, 2026, compared to the three months ended May 31, 2025, primarily due to the following:
•Higher market prices for refined fuels products, due to geopolitical events in the current quarter, improved Energy segment revenues.
•Strong bulk refined fuels and propane sales volumes also drove revenues growth.
Energy segment IBIT increased $66.6 million, or 117.9%, during the three months ended May 31, 2026, compared to the three months ended May 31, 2025, primarily due to the following:
•Improved sales mix of higher-margin refined fuels products, higher crack spreads and favorable WCS discounts contributed to an increase in IBIT.
•These benefits were largely offset by significantly higher RINs expense and unrealized hedging losses.
Grains
| Three Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Revenues | $ | 5,660,619 | $ | 5,292,301 | $ | 368,318 | 7.0 | % | |||||||||||||||
| Loss before income taxes | $ | (33,564) | $ | (32,856) | $ | (708) | (2.2 | %) | |||||||||||||||
The following commentary presents the changes in our Grains segment for the three months ended May 31, 2026, compared to the three months ended May 31, 2025.
| Revenues | IBIT | ||||||||||
| For the three months ended May 31, 2026: | (Dollars in thousands) | ||||||||||
| Volume | $ | 455,110 | $ | (2,170) | |||||||
| Price impact on revenues and margin impact on IBIT | (86,792) | (3,629) | |||||||||
| Other IBIT | - | 5,091 | |||||||||
| Total change | $ | 368,318 | $ | (708) | |||||||
Total Grains segment revenues increased $368.3 million, or 7.0%, during the three months ended May 31, 2026, compared to the three months ended May 31, 2025, primarily as a result of the following:
•Strong volumes from feed grains exports and oilseed processing demand increased Grains segment revenues but were partially offset by weaker wheat sales.
•Lower selling prices for feed grains and oilseed commodities contributed to a decrease in Grains segment prices.
Grains segment IBIT decreased $0.7 million, or 2.2%, during the three months ended May 31, 2026, compared to the three months ended May 31, 2025, primarily as a result of the following:
•Lower margins associated with wheat, feed grains and specialty products decreased IBIT.
•These impacts were mostly offset by strong oilseed crush margins driven by RVO-related processing demand, higher interest income and improved performance by our equity method investments.
Agronomy
| Three Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Revenues | $ | 2,566,264 | $ | 2,514,021 | $ | 52,243 | 2.1 | % | |||||||||||||||
| Income before income taxes | $ | 275,044 | $ | 247,395 | $ | 27,649 | 11.2 | % | |||||||||||||||
The following commentary presents the changes in our Agronomy segment for the three months ended May 31, 2026, compared to the three months ended May 31, 2025.
| Revenues | IBIT | ||||||||||
| For the three months ended May 31, 2026: | (Dollars in thousands) | ||||||||||
| Volume | $ | (220,087) | $ | (21,302) | |||||||
| Price impact on revenues and margin impact on IBIT | 272,330 | 24,634 | |||||||||
| Other IBIT | - | 24,317 | |||||||||
| Total change | $ | 52,243 | $ | 27,649 | |||||||
Total Agronomy segment revenues increased $52.2 million, or 2.1%, during the three months ended May 31, 2026, compared to the three months ended May 31, 2025, primarily due to the following:
•Higher wholesale and retail crop nutrients prices, due to tight market supply, increased Agronomy segment revenues.
•This was partially offset by lower sales volumes, driven primarily by deferred demand and a weaker U.S. farm economy, which decreased revenues.
Total Agronomy segment IBIT increased $27.6 million, or 11.2%, during the three months ended May 31, 2026, compared to the three months ended May 31, 2025, primarily due to the following:
•Continued strong performance from our investment in CF Nitrogen, driven by higher urea and UAN prices, and improved margins across crop nutrients and crop protection products increased IBIT.
•These benefits were partially offset by volume declines, due largely to higher product costs, which led to deferred demand.
Other Business Activities
| Three Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Corporate and Services revenues | $ | 47,227 | $ | 45,003 | $ | 2,224 | 4.9 | % | |||||||||||||||
| Corporate and Services IBIT | $ | 30,634 | $ | 100,831 | $ | (70,197) | (69.6 | %) | |||||||||||||||
During the three months ended May 31, 2026, compared to the same period in the prior fiscal year, performance by CHS Capital positively impacted Corporate and Services revenues, while IBIT decreased due to the gain from the sale of a business by our equity investment, Ventura Foods, during the prior fiscal year that did not reoccur in the current year.
Cost of Goods Sold
| Three Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Cost of goods sold | $ | 11,171,469 | $ | 9,436,610 | $ | 1,734,859 | 18.4 | % | |||||||||||||||
Consolidated cost of goods sold increased $1,734.9 million, or 18.4%, during the three months ended May 31, 2026, compared to the three months ended May 31, 2025, primarily due to the following:
•Increased bulk sales volumes of refined fuels and propane products, increased RINs expense, higher commodity prices and unrealized hedging losses increased COGS in our Energy segment.
•Higher sales volumes of feed grains and oilseed products, along with increased wheat prices, contributed to increased COGS in our Grains segment.
•Higher crop nutrients prices increased COGS in our Agronomy segment.
Marketing, General and Administrative Expenses
| Three Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Marketing, general and administrative expenses | $ | 302,283 | $ | 258,850 | $ | 43,433 | 16.8 | % | |||||||||||||||
Marketing, general and administrative expenses increased during the three months ended May 31, 2026, driven primarily by incentive compensation and benefit expenses.
Interest Expense
| Three Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Interest expense | $ | 49,725 | $ | 44,109 | $ | 5,616 | 12.7 | % | |||||||||||||||
Interest expense increased during the three months ended May 31, 2026, as a result of higher long-term debt balances compared to the same period in the prior fiscal year.
Other Income
| Three Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Other income | $ | 21,775 | $ | 27,398 | $ | (5,623) | (20.5 | %) | |||||||||||||||
Other income decreased during the three months ended May 31, 2026, primarily due to lower gains on investments, partially offset by increased interest income as a result of a larger cash balance compared to the same period in the prior fiscal year.
Equity Income from Investments
| Three Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Equity income from investments* | $ | 201,826 | $ | 204,605 | $ | (2,779) | (1.4 | %) | |||||||||||||||
*For additional information, see Note 5, Investments, of the notes to the condensed consolidated financial statements that are included in this Quarterly Report on Form 10-Q.
Equity income from investments decreased during the three months ended May 31, 2026, as compared to the same period during the prior fiscal year, primarily due to the non-recurring gain on the sale of a business by our equity investment, Ventura Foods, during the prior fiscal year, largely offset by strong performance from our investment in CF Nitrogen.
Income Tax Expense
| Three Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Income tax expense | $ | 14,717 | $ | 27,175 | $ | (12,458) | (45.8 | %) | |||||||||||||||
Decreased income tax expense during the three months ended May 31, 2026, reflects the mix of full-year earnings projected across business units relative to the prior year and current equity assumptions, along with benefits associated with certain tax credits. Effective tax rates for the three months ended May 31, 2026 and 2025, were 5.2% and 10.5%, respectively. Federal and state statutory rates of 24.2% and 24.5% were applied to nonpatronage business activity for the three months ended May 31, 2026 and 2025, respectively. Income tax expense and effective tax rates vary each year based on profitability, changes in tax law, income tax credits and patronage business activity.
Results of Operations
Nine Months Ended May 31, 2026 and 2025
| Nine Months Ended May 31, | |||||||||||||||||||||||
| 2026 | % of Revenues* | 2025 | % of Revenues* | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Revenues | $ | 28,799,984 | 100.0 | % | $ | 26,856,724 | 100.0 | % | |||||||||||||||
| Cost of goods sold | 27,974,194 | 97.1 | 26,049,922 | 97.0 | |||||||||||||||||||
| Gross profit | 825,790 | 2.9 | 806,802 | 3.0 | |||||||||||||||||||
| Marketing, general and administrative expenses | 838,012 | 2.9 | 769,968 | 2.9 | |||||||||||||||||||
| Operating earnings | (12,222) | - | 36,834 | 0.1 | |||||||||||||||||||
| Interest expense | 130,833 | 0.5 | 96,962 | 0.4 | |||||||||||||||||||
| Other income | (91,588) | (0.3) | (74,138) | (0.3) | |||||||||||||||||||
| Equity income from investments | (440,891) | (1.5) | (418,970) | (1.6) | |||||||||||||||||||
| Income before income taxes | 389,424 | 1.4 | 432,980 | 1.6 | |||||||||||||||||||
| Income tax expense | 8,661 | - | 31,710 | 0.1 | |||||||||||||||||||
| Net income | 380,763 | 1.3 | 401,270 | 1.5 | |||||||||||||||||||
| Net (loss) income attributable to noncontrolling interests | (34) | - | 50 | - | |||||||||||||||||||
| Net income attributable to CHS Inc. | $ | 380,797 | 1.3 | % | $ | 401,220 | 1.5 | % | |||||||||||||||
*Amounts less than 0.1% are shown as zero percent. Percentage totals may differ due to rounding.
The table below details revenues, net of intersegment revenues, and IBIT by segment for the nine months ended May 31, 2026.
| Energy | Grains | Agronomy | Corporate and Services | Total | |||||||||||||||||||||||||
| Nine Months Ended May 31, 2026 | (Dollars in thousands) | ||||||||||||||||||||||||||||
| Revenues | $ | 7,764,425 | $ | 16,053,061 | $ | 4,836,342 | $ | 146,156 | $ | 28,799,984 | |||||||||||||||||||
| Income (loss) before income taxes | $ | 28,804 | $ | (15,258) | $ | 300,356 | $ | 75,522 | $ | 389,424 | |||||||||||||||||||
Operating Segments
Energy
| Nine Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Revenues | $ | 7,764,425 | $ | 6,026,408 | $ | 1,738,017 | 28.8 | % | |||||||||||||||
| Income (loss) before income taxes | $ | 28,804 | $ | (120,257) | $ | 149,061 | 124.0 | % | |||||||||||||||
The following commentary presents the changes in our Energy segment for the nine months ended May 31, 2026, compared to the nine months ended May 31, 2025.
| Revenues | IBIT | ||||||||||
| For the nine months ended May 31, 2026: | (Dollars in thousands) | ||||||||||
| Volume | $ | 1,109,301 | $ | (1,471) | |||||||
| Price impact on revenues and margin impact on IBIT | 628,716 | 176,895 | |||||||||
| Other IBIT | - | (26,363) | |||||||||
| Total change | $ | 1,738,017 | $ | 149,061 | |||||||
Total Energy segment revenues increased $1,738.0 million, or 28.8%, during the nine months ended May 31, 2026, compared to the nine months ended May 31, 2025, primarily due to the following:
•Strong sales volumes of refined fuels and propane products, driven by heavy fall harvest activity and higher bulk sales volumes, increased Energy segment revenues.
•Higher market prices for refined fuels products, due to geopolitical events in the current year, also drove revenues growth, but were partially offset by lower propane prices.
Energy segment IBIT increased $149.1 million, or 124.0%, during the nine months ended May 31, 2026, compared to the nine months ended May 31, 2025, primarily due to the following:
•Higher crack spreads, improved sales mix of higher-margin refined fuels products and favorable WCS discounts contributed to an increase in IBIT.
•These benefits were partially offset by significantly higher RINs expense and unrealized hedging losses.
Grains
| Nine Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Revenues | $ | 16,053,061 | $ | 15,947,458 | $ | 105,603 | 0.7 | % | |||||||||||||||
| (Loss) income before income taxes | $ | (15,258) | $ | 125,751 | $ | (141,009) | (112.1 | %) | |||||||||||||||
The following commentary presents the changes in our Grains segment for the nine months ended May 31, 2026, compared to the nine months ended May 31, 2025.
| Revenues | IBIT | ||||||||||
| For the nine months ended May 31, 2026: | (Dollars in thousands) | ||||||||||
| Volume | $ | 672,728 | $ | 947 | |||||||
| Price impact on revenues and margin impact on IBIT | (567,125) | (150,116) | |||||||||
| Other IBIT | - | 8,160 | |||||||||
| Total change | $ | 105,603 | $ | (141,009) | |||||||
Total Grains segment revenues increased $105.6 million, or 0.7%, during the nine months ended May 31, 2026, compared to the nine months ended May 31, 2025, primarily as a result of the following:
•Higher volumes increased Grains segment revenues, driven by strong feed grains exports.
•These benefits were partially offset by lower selling prices for feed grains and oilseed commodities, as well as lower oilseed volumes in the first half of the current fiscal year.
Grains segment IBIT decreased $141.0 million, or 112.1%, during the nine months ended May 31, 2026, compared to the nine months ended May 31, 2025, primarily as a result of the following:
•Lower oilseed export volumes, soft crush margins during the first half of our fiscal year, weaker retail and wholesale wheat margins and timing of mark-to-market adjustments associated with commodity derivatives decreased IBIT.
Agronomy
| Nine Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Revenues | $ | 4,836,342 | $ | 4,723,164 | $ | 113,178 | 2.4 | % | |||||||||||||||
| Income before income taxes | $ | 300,356 | $ | 264,144 | $ | 36,212 | 13.7 | % | |||||||||||||||
The following commentary presents the changes in our Agronomy segment for the nine months ended May 31, 2026, compared to the nine months ended May 31, 2025.
| Revenues | IBIT | ||||||||||
| For the nine months ended May 31, 2026: | (Dollars in thousands) | ||||||||||
| Volume | $ | (359,025) | $ | (24,210) | |||||||
| Price impact on revenues and margin impact on IBIT | 472,203 | 7,592 | |||||||||
| Other IBIT | - | 52,830 | |||||||||
| Total change | $ | 113,178 | $ | 36,212 | |||||||
Total Agronomy segment revenues increased $113.2 million, or 2.4%, during the nine months ended May 31, 2026, compared to the nine months ended May 31, 2025, primarily due to the following:
•Crop nutrients, driven primarily by higher crop nutrients prices, increased Agronomy segment revenues.
•This increase was partially offset by lower sales volumes, reflecting a weaker U.S. farm economy.
Total Agronomy segment IBIT increased $36.2 million, or 13.7%, during the nine months ended May 31, 2026, compared to the nine months ended May 31, 2025, primarily due to the following:
•Strong performance from our investment in CF Nitrogen, driven by higher urea and UAN prices, increased IBIT.
•This increase was partially offset by volume declines of crop nutrients products, due largely to higher product costs, which contributed to deferred demand.
Other Business Activities
| Nine Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Corporate and Services revenues | $ | 146,156 | $ | 159,694 | $ | (13,538) | (8.5 | %) | |||||||||||||||
| Corporate and Services IBIT | $ | 75,522 | $ | 163,342 | $ | (87,820) | (53.8 | %) | |||||||||||||||
During the nine months ended May 31, 2026, as compared to same period in the prior fiscal year, lower transportation volumes negatively impacted Corporate and Services revenues, while IBIT decreased due to performance from our equity method investments and the gain on the sale of a business by our equity investment, Ventura Foods, during the prior fiscal year which did not reoccur in the current year.
Cost of Goods Sold
| Nine Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Cost of goods sold | $ | 27,974,194 | $ | 26,049,922 | $ | 1,924,272 | 7.4 | % | |||||||||||||||
Consolidated cost of goods sold increased $1,924.3 million, or 7.4%, during the nine months ended May 31, 2026, compared to the nine months ended May 31, 2025, primarily due to the following:
•Increased bulk sales volumes of refined fuels and propane products, increased RINs expense, higher commodity prices and unrealized hedging losses increased COGS in our Energy segment.
•Increased feed grains and wheat sales volumes increased COGS in our Grains segment but were partially offset by oilseed price and volume impacts.
•Higher crop nutrients per-ton prices increased COGS in our Agronomy segment.
Marketing, General and Administrative Expenses
| Nine Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Marketing, general and administrative expenses | $ | 838,012 | $ | 769,968 | $ | 68,044 | 8.8 | % | |||||||||||||||
Marketing, general and administrative expenses increased during the nine months ended May 31, 2026, driven primarily by incentive compensation and benefit expenses and amortization related to our enterprise resource planning system.
Interest Expense
| Nine Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Interest expense | $ | 130,833 | $ | 96,962 | $ | 33,871 | 34.9 | % | |||||||||||||||
Interest expense increased during the nine months ended May 31, 2026, as a result of higher long-term debt balances compared to the same period in the prior fiscal year.
Other Income
| Nine Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Other income | $ | 91,588 | $ | 74,138 | $ | 17,450 | 23.5 | % | |||||||||||||||
Other income increased during the nine months ended May 31, 2026, primarily due to increased interest income as a result of a larger cash balance compared to the same period in the prior fiscal year.
Equity Income from Investments
| Nine Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Equity income from investments* | $ | 440,891 | $ | 418,970 | $ | 21,921 | 5.2 | % | |||||||||||||||
*For additional information, see Note 5, Investments, of the notes to the condensed consolidated financial statements that are included in this Quarterly Report on Form 10-Q.
Equity income from investments increased during the nine months ended May 31, 2026, as compared to the same period during the prior fiscal year, primarily due to higher equity income from our investment in CF Nitrogen as a result of higher urea and UAN prices, partially offset by natural gas costs. This was also partially offset by the gain on the sale of a business by our equity investment, Ventura Foods, during the prior fiscal year that did not recur in the current year.
Income Tax Expense
| Nine Months Ended May 31, | Change | ||||||||||||||||||||||
| 2026 | 2025 | Dollars | Percent | ||||||||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Income tax expense | $ | 8,661 | $ | 31,710 | $ | (23,049) | (72.7 | %) | |||||||||||||||
Decreased income tax expense during the nine months ended May 31, 2026, reflects the mix of full-year earnings projected across business units relative to the prior year and current equity assumptions, along with benefits associated with certain tax credits. Effective tax rates for the nine months ended May 31, 2026 and 2025, were 2.2% and 7.3%, respectively. Federal and state statutory rates of 24.2% and 24.5% were applied to nonpatronage business activity for the nine months ended May 31, 2026 and 2025, respectively. Income tax expense and effective tax rates vary each year based on profitability, changes in tax law, income tax credits and patronage business activity.
Liquidity and Capital Resources
In assessing our financial condition, we consider factors such as working capital, internal benchmarking related to our applicable covenants and other financial information. The following financial information is used when assessing our liquidity and capital resources to meet our capital allocation priorities, which include maintaining the safety and compliance of our operations, meeting debt maturity obligations, paying interest on debt and preferred stock dividends, returning cash to our member-owners in the form of cash patronage and equity redemptions and taking advantage of strategic opportunities that benefit our member-owners.
|
May 31, 2026 |
August 31, 2025 |
||||||||||
| (Dollars in thousands) | |||||||||||
| Cash and cash equivalents | $ | 497,614 | $ | 327,826 | |||||||
| Notes payable | 1,589,756 | 1,152,457 | |||||||||
| Long-term debt including current maturities | 2,133,582 | 1,835,833 | |||||||||
| Total equities | 11,205,581 | 11,080,174 | |||||||||
| Working capital | 3,171,972 | 2,803,865 | |||||||||
| Current ratio* | 1.5 | 1.5 | |||||||||
*Current ratio is defined as current assets divided by current liabilities.
Summary of Our Major Sources of Cash and Cash Equivalents
We fund our current operations primarily through our cash flows from operations and with short-term borrowings through our committed and uncommitted revolving credit facilities, including our securitization facility with certain unaffiliated financial institutions and our repurchase facility. We fund certain of our long-term capital needs, primarily those related to acquisitions of property, plant and equipment, with cash flows from operations and by issuing long-term debt. See Note 6, Notes Payable and Long-Term Debt, of the notes to the unaudited condensed consolidated financial statements that are included in this Quarterly Report on Form 10-Q for additional information on our short-term borrowings and long-term debt. We will continue to consider opportunities to further diversify and enhance our sources and amounts of liquidity.
Summary of Our Major Uses of Cash and Cash Equivalents
The following is a summary of our primary cash requirements for fiscal 2026:
•Capital expenditures. We expect total capital expenditures for fiscal 2026 to be approximately $494.5 million, compared to capital expenditures of $728.6 million in fiscal 2025, as we continue to invest in capital expenditures for projects to meet the evolving needs of our owners and customers and enhance value for the cooperative system during fiscal 2026. During the nine months ended May 31, 2026, we acquired $344.3 million of property, plant and equipment.
•Major maintenance. We expect total major maintenance for fiscal 2026 to be approximately $73.4 million, compared to major maintenance of $271.4 million in fiscal 2025. Decreased major maintenance for fiscal 2026 is due to significantly reduced turnaround activities at our refineries compared to the turnaround at our McPherson refinery during fiscal 2025. During the nine months ended May 31, 2026, we had $56.3 million in major maintenance largely due to the planned partial turnaround at our Laurel refinery.
•Debt and interest. We expect to repay approximately $91.8 million of long-term debt and finance lease obligations and incur interest payments related to long-term debt of approximately $102.5 million during fiscal 2026. During the nine months ended May 31, 2026, we repaid $9.3 million of scheduled long-term debt maturities and finance lease obligations.
•Preferred stock dividends. We had approximately $2.3 billion of preferred stock outstanding as of May 31, 2026. We expect to pay dividends on our preferred stock of approximately $168.7 million during fiscal 2026. Dividends paid on our preferred stock during the nine months ended May 31, 2026, were $126.5 million.
•Patronage. Our Board of Directors authorized approximately $30.0 million of our fiscal 2025 patronage-sourced earnings to be paid to our member-owners during fiscal 2026. During the nine months ended May 31, 2026, we distributed $30.0 million of cash patronage related to the year ended August 31, 2025.
•Equity redemptions. Our Board of Directors authorized approximately $90.0 million of equity redemptions to be distributed in fiscal 2026 in the form of redemptions of qualified and nonqualified equity owned by individual producer-members and association members. During the nine months ended May 31, 2026, we redeemed $80.6 million of member equity.
We believe cash generated by operating and investing activities, along with available borrowing capacity under our credit facilities, will be sufficient to support our short-term (the next 12 months) and long-term (beyond 12 months) operations. Our notes payable and long-term debt are subject to various restrictive requirements for maintenance of minimum consolidated net worth and other financial ratios. We were in compliance with all debt covenants and restrictions as of May 31, 2026. Based on our current fiscal 2026 projections, we expect continued covenant compliance.
Working Capital
We measure working capital as current assets less current liabilities as each amount appears on our condensed consolidated balance sheets. We believe this information is meaningful to investors as a measure of operational efficiency and short-term financial health. Working capital is not defined under U.S. generally accepted accounting principles and may not be computed the same as similarly titled measures used by other companies. Working capital as of May 31, 2026, and August 31, 2025, was as follows:
|
May 31, 2026 |
August 31, 2025 |
Change | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Current assets | $ | 9,943,293 | $ | 8,086,351 | $ | 1,856,942 | |||||||||||
| Less current liabilities | 6,771,321 | 5,282,486 | 1,488,835 | ||||||||||||||
| Working capital | $ | 3,171,972 | $ | 2,803,865 | $ | 368,107 | |||||||||||
As of May 31, 2026, working capital increased by $368.1 million compared to August 31, 2025. Changes in current asset balances increased working capital by $1.9 billion, primarily due to increases in receivables, other current assets and inventories, which were driven by seasonality in our business. Current liability balance changes decreased working capital by $1.5 billion, primarily due to increases in other current liabilities, notes payable and accounts payable, which were also driven by seasonality in our business.
We finance our working capital needs through committed and uncommitted lines of credit with domestic and international banks. We believe our current cash balances and available capacity on our committed and uncommitted lines of credit will provide adequate liquidity to meet our working capital needs.
Contractual Obligations
For information regarding our estimated contractual obligations, see the MD&A discussion included in Item 7 of Part II of our Annual Report on Form 10-K for the year ended August 31, 2025. No material changes occurred during the nine months ended May 31, 2026.
Cash Flows
The following table presents summarized cash flow data for the nine months ended May 31, 2026 and 2025:
| Nine Months Ended May 31, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 201,214 | $ | (635,272) | $ | 836,486 | |||||||||||
| Net cash used in investing activities | (503,649) | (552,160) | 48,511 | ||||||||||||||
| Net cash provided by financing activities | 511,065 | 724,692 | (213,627) | ||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 2,961 | (6,973) | 9,934 | ||||||||||||||
| Increase (decrease) in cash and cash equivalents and restricted cash | $ | 211,591 | $ | (469,713) | $ | 681,304 | |||||||||||
Cash flows from operating activities can fluctuate significantly from period to period as a result of various factors, including seasonality and timing differences associated with purchases, sales, taxes and other business decisions. The $836.5 million year-over-year increase in cash provided by operating activities primarily reflects increased accounts payable and accrued expenses, which was partially offset by changes in accounts receivable, during the first nine months of fiscal 2026 as compared to the same period during fiscal 2025.
The $48.5 million decrease in cash used in investing activities primarily reflects decreased expenditures for major maintenance, business acquisitions and acquisitions of property, plant and equipment, mostly offset by decreased proceeds from the sale and maturity of short-term and other investments, increased purchases of short-term investments and increases in CHS Capital notes receivable during the first nine months of fiscal 2026 compared to the same period during fiscal 2025.
The $213.6 million decrease in cash provided by financing activities primarily reflects decreased net cash inflows associated with our notes payable and short-term funding needs for working capital, partially offset by decreased cash patronage dividends paid and redemptions of equities during the first nine months of fiscal 2026 compared to the same period during fiscal 2025.
Preferred Stock
The following is a summary of our outstanding preferred stock as of May 31, 2026, all shares of which are listed on the Global Select Market of Nasdaq.
| Nasdaq Symbol | Issuance Date | Shares Outstanding | Redemption Value | Net Proceeds (a) |
Dividend Rate (b) (c) |
Dividend Payment Frequency | Redeemable Beginning (d) | |||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 8% Cumulative Redeemable | CHSCP | (e) | 12,272,003 | $ | 306.8 | $ | 311.2 | 8.00 | % | Quarterly | 7/18/2023 | |||||||||||||||||||||||||||||||||||||||
| Class B Cumulative Redeemable, Series 1 | CHSCO | (f) | 21,459,066 | $ | 536.5 | $ | 569.3 | 7.875 | % | Quarterly | 9/26/2023 | |||||||||||||||||||||||||||||||||||||||
| Class B Reset Rate Cumulative Redeemable, Series 2 | CHSCN | 3/11/2014 | 16,800,000 | $ | 420.0 | $ | 406.2 | 7.10 | % | Quarterly | 3/31/2024 | |||||||||||||||||||||||||||||||||||||||
| Class B Reset Rate Cumulative Redeemable, Series 3 | CHSCM | 9/15/2014 | 19,700,000 | $ | 492.5 | $ | 476.7 | 6.75 | % | Quarterly | 9/30/2024 | |||||||||||||||||||||||||||||||||||||||
| Class B Cumulative Redeemable, Series 4 | CHSCL | 1/21/2015 | 20,700,000 | $ | 517.5 | $ | 501.0 | 7.50 | % | Quarterly | 1/21/2025 | |||||||||||||||||||||||||||||||||||||||
(a) Includes patron equities redeemed with preferred stock.
(b) Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 2 accumulated dividends at a rate of 7.10% per year until March 31, 2024, and subsequently fixed at a rate of 7.10% based on the terms of the contract and application of the Adjustable Rate (LIBOR) Act.
(c) Class B Reset Rate Cumulative Redeemable Preferred Stock, Series 3 accumulated dividends at a rate of 6.75% per year until September 30, 2024, and subsequently fixed at a rate of 6.75% based on the terms of the contract and application of the Adjustable Rate (LIBOR) Act.
(d) All series of preferred stock are redeemable for cash at our option, in whole or in part, at a per-share price equal to the per-share liquidation preference of $25.00 per share, plus all dividends accumulated and unpaid on that share to and including the date of redemption, beginning on the dates set forth in this column.
(e) The 8% Cumulative Redeemable Preferred Stock was issued at various times from 2002 through 2010.
(f) Shares of Class B Cumulative Redeemable Preferred Stock, Series 1 were issued on September 26, 2013; August 25, 2014; March 31, 2016; and March 30, 2017.
Critical Accounting Policies
Our critical accounting policies as presented in the MD&A in our Annual Report on Form 10-K for the year ended August 31, 2025, have not materially changed during the nine months ended May 31, 2026.
Recent Accounting Pronouncements
Refer to Note 1, Basis of Presentation and Significant Accounting Policies, included in Item 1 of Part I of this Quarterly Report on Form 10-Q for a discussion of applicable standards issued and not yet adopted.
CHS Inc. published this content on July 08, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 08, 2026 at 15:46 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]