Cash crop

Farm co-op gives $278,000 to members

CHS-Kalispell and 1,384 of its members got a $278,000 windfall this week.

The national energy and grain-based foods company that the local stores belong to, CHS Inc., announced Tuesday it is distributing $298 million in cash returns to more than 1,300 member companies and 40,000 individuals in 48 states. Montana's share is $24 million.

Mark Lalum, general manager for the local CHS, said on Wednesday that most of his member farmers have the distribution in their hands now - 35 percent of it in cash and the other 65 percent reinvested as their share in the company.

Some $97,457 was returned as cash to the members and $189,991 was reinvested.

"It's exciting to see the dollars come to them," Lalum said.

"I know financially it helps them out. They had some 'struggle' years but they're having a good year now, and when you [can distribute this dividend] it helps agriculture become a little more financially sound."

Lalum encouraged members who have reached age 70 to contact the CHS Patron Equities staff to claim the cash payment for the full value of their shares in the cooperative. These equity payments are made throughout the year, but members must contact the company.

This week's dividends translate to 18 cents a gallon rebated for every gallon of diesel fuel that CHS-Kalispell members bought in fiscal 2007, or 13 to 14 cents a bushel on winter wheat and spring wheat, or about 20 cents a bushel for barley.

Under the cooperative's profit-sharing form of business, each member's share is based on how much business he or she did with CHS during the year.

The national action marks the largest distribution to owners ever made by a U.S. cooperative and the fourth consecutive record by CHS Inc. It's coming because of especially strong net income reported at $756.7 million for the cooperative's fiscal year that ended on Aug. 31, 2007.

"We are a local cooperative that is regionalized, so [our members] actually get to share in what happens with the parent company," Lalum said.

"Their return is part of the money the company made on the refinery … They get to share in the profitability overseas. It's neat to be handing out a little less than $100,000 in cash to these folks."

Business is good for CHS Inc., Lalum said, because of internal company growth, its sound organizational and management business structure, and the strength in its fuel refinery as reflected in the global fuel markets.

The refinery grew so much in fiscal 2007, he said, that it moved up to the status of a Fortune 500 company.

With the larger share of dividends being reinvested in CHS-Kalispell, Lalum said the company is able to better serve its members - defined as customers who generate at least 50 percent of their income from the land.

"The more money invested, the more equipment we can buy and stay updated with their needs," Lalum said.

"It allowed us to update our TerraGators, our sprayers, our propane equipment" and other capital purchases, he said. "We're a type of business that when people within the community do business with us it actually, to some degree, makes the ag community stronger."

Not only did 2007 top a four-year run on record dividend levels, but also CHS is on track to return as much as $345 million to members from business done in fiscal 2008.

CHS Inc., known as Cenex Harvest States until August 2003, is a diversified energy, grains and foods company. It is owned by farmers, ranchers, cooperatives and preferred stockholders from the Great Lakes to the Pacific Northwest and from the Canadian border to Texas.

Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com