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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-K
      þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    August 31, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission file
    number: 0-50150
      CHS Inc.
 (Exact name of registrant as specified in its charter)
  Minnesota

41-0251095(State or other jurisdiction of

(I.R.S. Employerincorporation or organization)

Identification Number)5500 Cenex DriveInver Grove Heights, Minnesota 55077(Address of principal executive office,
    including zip code)

(651) 355-6000(Registrants Telephone number,
    including area code)      SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE
    ACT: NONE
 SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE
    ACT:
  8% Cumulative Redeemable Preferred Stock

The NASDAQ Global Select Market(Title of Class)

(Name of Each Exchange on Which Registered)           YES o     NO þ
    YES o     NO þ
    YES þ     NO o
  Regulation S-K Form 10-K Form 10-K: o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer þ
    Smaller reporting
    company o (Do not check if a smaller
    reporting company)
  Rule 12b-2
  YES o     NO þ
        DOCUMENTS INCORPORATED BY REFERENCE




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##### 





INDEX
  
  PageNo.PART I.Item 1.

Business


1The Company


1Energy


2Ag Business


5Processing


11Corporate and Other


14Price Risk and Hedging


15Employees


15Membership in CHS and Authorized Capital


16Item 1A.

Risk Factors


19Item 1B.

Unresolved Staff Comments


23Item 2.

Properties


23Item 3.

Legal Proceedings


25Item 4.

Submission of Matters to a Vote of Security
    Holders


26PART II.Item 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


26Item 6.

Selected Financial Data


26Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operation


29Item 7A.

Quantitative and Qualitative Disclosures about
    Market Risk


53Item 8.

Financial Statements and Supplementary Data


55Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


55Item 9A(T).

Controls and Procedures


55Item 9B.

Other Information


56PART III.Item 10.

Directors, Executive Officers and Corporate
    Governance


57Board of Directors


57Executive Officers


61Section 16(a) Beneficial Ownership Reporting
    Compliance


62Code of Ethics


62Audit Committee Matters


63Item 11.

Executive Compensation


63Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


82Item 13.

Certain Relationships and Related Transactions
    and Director Independence


83Item 14.

Principal Accountant Fees and Services


84PART IV.Item 15.

Exhibits, Financial Statement Schedules


85SUPPLEMENTAL INFORMATION


91SIGNATURES


92EX-10.3DEX-10.10BEX-10.18DEX-10.35EX-10.36EX-21.1EX-23.1EX-24.1EX-31.1EX-31.2EX-32.1EX-32.2




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PART I. ITEM 1.  BUSINESS THE
    COMPANY           1




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##### Table of Contents



CHS


IncomeBusiness Segment

Entity Name

Business Activity

Ownership%


RecognitionEnergy

National Cooperative Refinery Association

Petroleum refining


74.5
%

ConsolidatedProvista Renewable Fuels Marketing, LLC

Ethanol marketing


100
%

ConsolidatedFront Range Pipeline, LLC

Crude oil transportation


100
%

ConsolidatedCenex Pipeline, LLC

Finished product transportation


100
%

ConsolidatedAg Business

Agriliance LLC

Retail distribution of agronomy products


50
%

Equity MethodCHS do Brasil Ltda.

Soybean procurement in Brazil


100
%

ConsolidatedUnited Harvest, LLC

Grain exporter


50
%

Equity MethodTEMCO, LLC

Grain exporter


50
%

Equity MethodMultigrain A.G.

Grain procurement and production
    farmland in Brazil


40
%

Equity MethodCHS Europe SA

Grain merchandising in Europe


100
%

ConsolidatedLLC CHS Ukraine

Grain procurement and merchandising in Ukraine


100
%

ConsolidatedProcessing

Horizon Milling, LLC

Wheat milling in U.S.


24
%

Equity MethodHorizon Milling General Partnership

Wheat milling in Canada


24
%

Equity MethodVentura Foods, LLC

Food manufacturing


50
%

Equity MethodCorporate and Other

Country Hedging, Inc.

Risk management products broker


100
%

ConsolidatedAg States Agency, LLC

Insurance agency


100
%

ConsolidatedImpact Risk Solutions, LLC

Insurance brokerage


100
%

ConsolidatedCofina Financial, LLC

Finance company


49
%

Equity Method   Form 10-K,
    ENERGY  Overview
  ® ®
  Operations
  Laurel Refinery.
   2




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McPherson Refinery.
    Provista Renewable Fuels Marketing, LLC.
  Other Energy Operations.
  Products
    and Services
    Sales
    and Marketing; Customers
   3




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Industry;
    Competition
  Regulation.
      Competition.
     4




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Summary
    Operating Results
    2008


2007*


2006*(Dollars in thousands)Revenues

$
11,499,814


$
8,105,067


$
7,414,361Cost of goods sold


11,027,459



7,264,180



6,804,454Gross profit


472,355



840,887



609,907Marketing, general and administrative


111,121



94,939



82,867Operating earnings


361,234



745,948



527,040Gain on investments


(35
)Interest, net


(5,227
)


(6,106
)


6,534Equity income from investments


(5,054
)


(4,468
)


(3,840
)Minority interests


71,805



143,230



91,588Income before income taxes

$
299,745


$
613,292


$
432,758Intersegment revenues

$
(322,522
)

$
(228,930
)

$
(242,430
)Total identifiable assets  August 31

$
3,216,852


$
2,797,831


$
2,215,800     *
    
    Adjusted to reflect adoption of FASB Staff Position No. AUG
    AIR-1; see Note 2 of the Notes to Consolidated Financial
    Statements AG
    BUSINESS    Agronomy
  Overview
   5




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50-50
  true-up true-up
        Operations
     6




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Products
    and Services
    Sales
    and Marketing; Customers
    Industry;
    Competition
  Regulation.
  Competition.
    Country
    Operations
  Overview
    Products
    and Services
  Grain Purchasing.
 7




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Other Products.
  Industry;
    Competition
  Regulation.
  Competition.
    Grain
    Marketing
  Overview
    Operations
   8




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Products
    and Services
    Sales
    and Marketing; Customers
   9




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##### Table of Contents



Industry;
    Competition
  Regulation.
  Competition.
       10




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##### Table of Contents



Summary
    Operating Results
    2008


2007


2006(Dollars in thousands)Revenues

$
19,696,907


$
8,575,389


$
6,575,165Cost of goods sold


19,088,079



8,388,476



6,401,527Gross profit


608,828



186,913



173,638Marketing, general and administrative


160,364



97,299



99,777Operating earnings


448,464



89,614



73,861Gain on investments


(100,830
)


(5,348
)Interest, net


63,665



28,550



23,559Equity income from investments


(83,053
)


(51,830
)


(40,902
)Minority interests


355



(16
)


(509
)Income before income taxes

$
568,327


$
118,258


$
91,713Intersegment revenues

$
(36,972
)

$
(18,372
)

$
(8,779
)Total identifiable assets  August 31

$
4,172,950


$
2,846,950


$
1,806,243  PROCESSING  Overview
    Regulation.
  Oilseed
    Processing
   11




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Wheat
    Milling
     12




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Foods
          Renewable
    Fuels
   13




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##### Table of Contents



Summary
    Operating Results
    2008


2007


2006(Dollars in thousands)Revenues

$
1,299,209


$
754,743


$
614,471Cost of goods sold


1,240,944



726,510



588,732Gross profit


58,265



28,233



25,739Marketing, general and administrative


26,089



23,545



21,645Operating earnings


32,176



4,688



4,094Loss (gain) on investments


72,602



(15,268
)Interest, net


21,995



14,783



11,096Equity income from investments


(56,615
)


(48,446
)


(35,504
)(Loss) income before income taxes

$
(5,806
)

$
53,619


$
28,502Intersegment revenues

$
(338
)

$
(370
)

$
(368
)Total identifiable assets  August 31

$
748,989


$
681,118


$
518,186  CORPORATE
    AND OTHER  Business
    Solutions
  Financial Services.
  Cofina Financial, LLC.
  Country Hedging, Inc.
  Ag States Group.
 14




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PRICE
    RISK AND HEDGING          EMPLOYEES     15




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MEMBERSHIP
    IN CHS AND AUTHORIZED CAPITAL  Introduction
    Distribution
    of Net Income; Patronage Dividends
       16




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Patrons
    Equities
      Governance
    Membership
      Voting
    Rights
     17




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Debt and
    Equity Instruments
    Distribution
    of Assets upon Dissolution; Merger and Consolidation
    Certain
    Antitakeover Measures
      Tax
    Treatment
         18




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ITEM 1A.  RISK
    FACTORS  CAUTIONARY
    STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS
    OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
    1995
  The information in this Annual Report on
    Form 10-K
    for the year ended August 31, 2008, includes
    forward-looking statements within the meaning of the
    Private Securities Litigation Reform Act of 1995 with respect to
    CHS. In addition, CHS and its representatives and agents may
    from time to time make other written or oral forward-looking
    statements, including statements contained in its filings with
    the Securities and Exchange Commission and its reports to its
    members and securityholders. Words and phrases such as
    will likely result, are expected to,
    is anticipated, estimate,
    project and similar expressions identify
    forward-looking statements. We wish to caution readers not to
    place undue reliance on any forward-looking statements, which
    speak only as of the date made.
  Our forward-looking statements are subject to risks and
    uncertainties that could cause actual results to differ
    materially from those discussed in the forward-looking
    statements. This Cautionary Statement is for the purpose of
    qualifying for the safe harbor provisions of the Act
    and is intended to be a readily available written document that
    contains factors which could cause results to differ materially
    from those projected in the forward-looking statements. The
    following matters, among others, may have a material adverse
    effect on our business, financial condition, liquidity, results
    of operations or prospects, financial or otherwise. Reference to
    this Cautionary Statement in the context of a forward-looking
    statement shall be deemed to be a statement that any one or more
    of the following factors may cause actual results to differ
    materially from those which might be projected, forecasted,
    estimated or budgeted by us in the forward-looking statement or
    statements.
  The following factors are in addition to any other cautionary
    statements, written or oral, which may be made or referred to in
    connection with any particular forward-looking statement. The
    following review should not be construed as exhaustive.
  We undertake no obligation to revise any forward-looking
    statements to reflect future events or circumstances.
  Our
    revenues and operating results could be adversely affected by
    changes in commodity prices.
      
    levels of worldwide and domestic supplies;
    capacities of domestic and foreign refineries; 19




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##### Table of Contents




    the ability of the members of the Organization of Petroleum
    Exporting Countries (OPEC) to agree to and maintain oil price
    and production controls, and the price and level of foreign
    imports;
    disruption in supply;
    political instability or armed conflict in oil-producing regions;
    the level of consumer demand;
    the price and availability of alternative fuels;
    the availability of pipeline capacity; and
    domestic and foreign governmental regulations and taxes.    Our
    operating results could be adversely affected if our members
    were to do business with others rather than with us.
    We
    participate in highly competitive business markets in which we
    may not be able to continue to compete successfully.
    Changes
    in federal income tax laws or in our tax status could increase
    our tax liability and reduce our net income.
    We incur
    significant costs in complying with applicable laws and
    regulations. Any failure to make the capital investments
    necessary to comply with these laws and regulations could expose
    us to financial liability.
   20




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Environmental
    liabilities could adversely affect our results and financial
    condition.
    Actual or
    perceived quality, safety or health risks associated with our
    products could subject us to liability and damage our business
    and reputation.
    Our
    operations are subject to business interruptions and casualty
    losses; we do not insure against all potential losses and could
    be seriously harmed by unexpected liabilities.
    
    our oil refineries and other facilities are potential targets
    for terrorist attacks that could halt or discontinue production;
    our inability to negotiate acceptable contracts with unionized
    workers in our operations could result in strikes or work
    stoppages; 21




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
    the significant inventories that we carry or the facilities we
    own could be damaged or destroyed by catastrophic events,
    extreme weather conditions or contamination; and
    an occurrence of a pandemic flu or other disease affecting a
    substantial part of our workforce or our customers could cause
    an interruption in our business operations, the affects of which
    could be significant.    Our
    cooperative structure limits our ability to access equity
    capital.
    Consolidation
    among the producers of products we purchase and customers for
    products we sell could adversely affect our revenues and
    operating results.
        If our
    customers choose alternatives to our refined petroleum products
    our revenues and profits may decline.
    Operating
    results from our agronomy business could be volatile and are
    dependent upon certain factors outside of our control.
   22




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##### Table of Contents



Technological
    improvements in agriculture could decrease the demand for our
    agronomy and energy products.
    We
    operate some of our business through joint ventures in which our
    rights to control business decisions are limited.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES    Energy
    Refinery

Laurel, MontanaPropane terminals

Glenwood, Minnesota (operational) and Black Creek, Wisconsin
    (leased to another entity)Transportation terminals/repair facilities

12 locations in Iowa, Kansas, Minnesota, Montana, North Dakota,
    South Dakota, Texas, Washington and Wisconsin, 3 of which are
    leasedPetroleum & asphalt terminals/storage facilities

11 locations in Montana, North Dakota and WisconsinPump stations

11 locations in Montana and North DakotaPipelines:Cenex Pipeline, LLC

Laurel, Montana to Fargo, North DakotaFront Range Pipeline, LLC

Canadian border to Laurel, Montana and on to Billings, MontanaConvenience stores/gas stations

76 locations in Idaho, Iowa, Minnesota, Montana, Nebraska, North
    Dakota, South Dakota, Washington and Wyoming, 20 of which are
    leasedLubricant plants/warehouses

3 locations in Minnesota, Ohio and Texas, 1 of which is leased  23




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Refinery

McPherson, KansasPetroleum terminals/storage

2 locations in Iowa and KansasPipeline

McPherson, Kansas to Council Bluffs, IowaJayhawk Pipeline, LLC

Throughout Kansas, with branches in Oklahoma, Texas and NebraskaJayhawk stations

26 locations located in Kansas, Oklahoma and NebraskaOsage Pipeline (50% owned by NCRA)

Oklahoma to KansasKaw Pipeline (67% owned by NCRA)

Throughout Kansas   Ag
    Business
    Crop
    Nutrients
                      Country
    Operations
    Grain
    Marketing
             24




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Processing
    Oilseed
    Processing
    Wheat
    Milling
          Corporate
    and Other
  Business
    Solutions
          Corporate
    Headquarters
  33-acre
    ITEM 3.
    LEGAL
    PROCEEDINGS   25




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ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II.  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES        ITEM 6.
    SELECTED
    FINANCIAL DATA   26




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##### Table of Contents



Summary
    Consolidated Financial Data
  2008


2007*


2006*


2005*


2004*(Dollars in thousands)Income Statement Data:Revenues

$
32,167,461


$
17,215,992


$
14,383,835


$
11,926,962


$
10,969,081Cost of goods sold


30,993,899



16,129,233



13,540,285



11,438,473



10,525,746Gross profit


1,173,562



1,086,759



843,550



488,489



443,335Marketing, general and administrative


329,965



245,357



231,238



199,354



202,455Operating earnings


843,597



841,402



612,312



289,135



240,880Gain on investments


(29,193
)


(20,616
)






(13,013
)


(14,666
)Gain on legal settlements


















(692
)Interest, net


76,460



31,098



41,305



41,509



42,758Equity income from investments


(150,413
)


(109,685
)


(84,188
)


(95,742
)


(79,022
)Minority interests


72,160



143,214



91,079



49,825



34,184Income from continuing operations before income taxes


874,583



797,391



564,116



306,556



258,318Income taxes


71,538



40,668



59,350



34,153



30,108Income from continuing operations


803,045



756,723



504,766



272,403



228,210(Income) loss on discontinued operations, net of taxes










(625
)


16,810



5,909Net income

$
803,045


$
756,723


$
505,391


$
255,593


$
222,301Balance Sheet Data (August 31):Working capital

$
1,738,600


$
821,878


$
848,344


$
766,807


$
500,315Net property, plant and equipment


1,948,305



1,728,171



1,476,239



1,359,535



1,249,655Total assets


8,771,978



6,754,373



4,994,166



4,748,654



4,047,710Long-term debt, including current maturities


1,194,855



688,321



744,745



773,074



683,818Total equities


2,955,686



2,475,455



2,053,466



1,778,879



1,643,491     *
    
    Adjusted to reflect adoption of FASB Staff Position No. AUG
    AIR-1; see Note 2 of the Notes to Consolidated Financial
    Statements 27




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##### Table of Contents



Summary
    Financial Data By Business Segment
  Energy


Ag Business2008


2007*


2006*


2008


2007


2006(Dollars in thousands)Revenues

$
11,499,814


$
8,105,067


$
7,414,361


$
19,696,907


$
8,575,389


$
6,575,165Cost of goods sold


11,027,459



7,264,180



6,804,454



19,088,079



8,388,476



6,401,527Gross profit


472,355



840,887



609,907



608,828



186,913



173,638Marketing, general and administrative


111,121



94,939



82,867



160,364



97,299



99,777Operating earnings


361,234



745,948



527,040



448,464



89,614



73,861Gain on investments


(35
)










(100,830
)


(5,348
)Interest, net


(5,227
)


(6,106
)


6,534



63,665



28,550



23,559Equity income from investments


(5,054
)


(4,468
)


(3,840
)


(83,053
)


(51,830
)


(40,902
)Minority interests


71,805



143,230



91,588



355



(16
)


(509
)Income before income taxes

$
299,745


$
613,292


$
432,758


$
568,327


$
118,258


$
91,713Intersegment revenues

$
(322,522
)

$
(228,930
)

$
(242,430
)

$
(36,972
)

$
(18,372
)

$
(8,779
)Total identifiable assets  August 31

$
3,216,852


$
2,797,831


$
2,215,800


$
4,172,950


$
2,846,950


$
1,806,243     *
    
    Adjusted to reflect adoption of FASB Staff Position No. AUG
    AIR-1; see Note 2 of the Notes to Consolidated Financial
    Statements  Processing


Corporate and Other2008


2007


2006


2008


2007


2006(Dollars in thousands)Revenues

$
1,299,209


$
754,743


$
614,471


$
31,363


$
28,465


$
31,415Cost of goods sold


1,240,944



726,510



588,732



(2,751
)


(2,261
)


(2,851
)Gross profit


58,265



28,233



25,739



34,114



30,726



34,266Marketing, general and administrative


26,089



23,545



21,645



32,391



29,574



26,949Operating earnings


32,176



4,688



4,094



1,723



1,152



7,317(Loss) gain on investments


72,602



(15,268
)






(930
)Interest, net


21,995



14,783



11,096



(3,973
)


(6,129
)


116Equity income from investments


(56,615
)


(48,446
)


(35,504
)


(5,691
)


(4,941
)


(3,942
)(Loss) income before income taxes

$
(5,806
)

$
53,619


$
28,502


$
12,317


$
12,222


$
11,143Intersegment revenues

$
(338
)

$
(370
)

$
(368
)Total identifiable assets  August 31

$
748,989


$
681,118


$
518,186


$
633,187


$
428,474


$
453,937  28




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ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Overview
  Form 10-K. Form 10-K.
    ®
           29




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50-50
  true-up true-up
       30




---



##### Table of Contents



Form 8-K FAS 115-1/124-1:
        Recent
    Events
   31




---



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Results
    of Operations
  Comparison
    of the years ended August 31, 2008 and 2007
  General.
       32




---



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Net Income.
  Revenues.
       33




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##### Table of Contents



Cost of Goods Sold.
       34




---



##### Table of Contents



Marketing, General and
    Administrative.
  Gain on Investments.
  Interest, net.
  Equity Income from Investments.
 35




---



##### Table of Contents



50-50
      Minority Interests.
  Income Taxes.
  Comparison
    of the years ended August 31, 2007 and 2006
  General.
   36




---



##### Table of Contents



Net Income.
  Revenues.
   37




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##### Table of Contents



38




---



##### Table of Contents



Cost of Goods Sold.
        Marketing, General and
    Administrative.
  Gain on Investments.
 39




---



##### Table of Contents



Interest, net.
  Equity Income from Investments.
     40




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Minority Interests.
  Income Taxes.
  Discontinued Operations.
  Liquidity
    and Capital Resources
    364-day 364-day
  Cash
    Flows from Operations
   41




---



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Form 10-K,
       42




---



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Cash
    Flows from Investing Activities
           43




---



##### Table of Contents



44




---



##### Table of Contents



available-for-sale
          Cash
    Flows from Financing Activities
  364-day
 45




---



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46




---



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2009

$
118,6362010


83,3862011


112,3292012


95,1022013


181,085Thereafter


604,317$
1,194,855            47




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##### Table of Contents



Off
    Balance Sheet Financing Arrangements
  Lease
    Commitments:
     48




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##### Table of Contents



Total(Dollars in millions)2009

$
39.62010


34.32011


25.32012


18.82013


11.3Thereafter


23.0Total minimum future lease payments

$
152.3   Guarantees:
    Debt:
    Contractual
    Obligations
    Payments Due by PeriodLess than


1 - 3


3 - 5


More thanContractual Obligations

Total


1 Year


Years


Years


5 Years(Dollars in thousands)Notes payable(1)

$
106,154


$
106,154Long-term debt(1)


1,194,855



118,636


$
195,715


$
276,187


$
604,317Interest payments(2)


362,228



58,941



118,221



93,268



91,798Operating leases


152,328



39,652



59,576



30,067



23,033Purchase obligations(3)


7,534,494



4,357,023



3,095,208



76,190



6,073Other liabilities(4)


197,481







57,704



59,552



80,225Total obligations

$
9,547,540


$
4,680,406


$
3,526,424


$
535,264


$
805,446     (1)
    
    Included on our Consolidated Balance Sheet.(2)
    
    Based on interest rates and long-term debt balances as of
    August 31, 2008.(3)
    
    Purchase obligations are legally binding and enforceable
    agreements to purchase goods or services that specify all
    significant terms, including fixed or minimum quantities; fixed,
    minimum or variable price provisions; and time of the
    transactions. Of our total purchase obligations,
    $1,954.6 million is included in accounts payable and
    accrued expenses on our Consolidated Balance Sheet.(4)
    
    Other liabilities include the long-term portion of deferred
    compensation, deferred income taxes and contractual redemptions,
    and are included on our Consolidated Balance Sheet. Of our total
    other liabilities on our Consolidated Balance Sheet in the
    amount of $423.7 million, the timing of the payments of
    $226.2 million of such liabilities cannot be determined. 49




---



##### Table of Contents



Critical
    Accounting Policies
    Allowances
    for Doubtful Accounts
    Inventory
    Valuation and Reserves
  last-in, first-in,
  Derivative
    Financial Instruments
   50




---



##### Table of Contents



Pension
    and Other Postretirement Benefits
    Deferred
    Tax Assets
    Long-Lived
    Assets
      Environmental
    Liabilities
    Revenue
    Recognition
   51




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##### Table of Contents



Effect of
    Inflation and Foreign Currency Transactions
    Recent
    Accounting Pronouncements
  FSP 157-2, FSP 157-2
  FSP 157-3, FSP 157-3 FSP 157-3 FSP 157-3
       52




---



##### Table of Contents



.
  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  COMMODITY
    PRICE RISK
       53




---



##### Table of Contents



INTEREST
    RATE RISK
      FOREIGN
    CURRENCY RISK
   54




---



##### Table of Contents



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  page F-1. Regulation S-K
  November 30,


February 29,


May 31,


August 31,2007


2008


2008


2008(Unaudited)(Dollars in thousands)Revenues

$
6,525,386


$
6,891,345


$
9,336,609


$
9,414,121Gross profit


314,637



257,625



280,642



320,658Income before income taxes


337,800



197,366



212,347



127,070Net income


300,900



168,031



188,716



145,398   November 30,


February 28,


May 31,


August 31,2006*


2007*


2007*


2007*Revenues

$
3,751,070


$
3,734,580


$
4,732,465


$
4,997,877Gross profit


222,434



147,941



330,908



385,476Income before income taxes


153,611



89,592



262,717



291,471Net income


136,379



83,673



239,596



297,075     *
    
    Adjusted to reflect adoption of FASB Staff Position No. AUG
    AIR-1; see Note 2 of the Notes to Consolidated Financial
    Statements  ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A(T).
    CONTROLS
    AND PROCEDURES  Disclosure of Controls and Procedures:
  Rules 13a-15(e) 15d-15(e)
  Form 10-K.
  Managements Annual Report on Internal Control Over
    Financial Reporting:
  Form 10-K
 55




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##### Table of Contents



Form 10-K Form 10-K.
  Change in Internal Control over Financial Reporting:
  Rule 13a-15(f)
  ITEM 9B.
    OTHER
    INFORMATION         56




---



##### Table of Contents



Form 10-Q
 PART III.  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE BOARD OF
    DIRECTORS    DirectorName and Address

Age


Region


SinceBruce Anderson


56



3



199513500  42nd St NE 
    Glenburn, ND 58740-9564Donald Anthony


58



8



200643970 Road 758 
    Lexington, NE 68850Robert Bass


54



5



1994E 6391 Bass Road 
    Reedsburg, WI 53959Dennis Carlson


47



3



20013255  50th Street 
    Mandan, ND 58554Curt Eischens


56



1



19902153  330th Street North 
    Minneota, MN 56264-1880Steve Fritel


53



3



20032851  77th Street NE 
    Barton, ND 58384Robert Grabarski


59



5



19991770 Highway 21 
    Arkdale, WI 54613Jerry Hasnedl


62



1



199512276  150th Avenue SE 
    St. Hilaire, MN 56754 -9776David Kayser


50



4



200642046  257th Street 
    Alexandria, SD 57311James Kile


60



6



1992508 W. Bell Lane 
    St. John, WA 99171Randy Knecht


58



4



200140193  112th Street 
    Houghton, SD 57449Michael Mulcahey


60



1



20038109  360th Avenue 
    Waseca, MN 56093 57




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##### Table of Contents



DirectorName and Address

Age


Region


SinceRichard Owen


54



2



19991591 Hawarden Road 
    Geraldine, MT 59446Steve Riegel


56



8



200612748 Ridge Road 
    Ford, KS 67842Daniel Schurr


43



7



20063009 Wisconsin Street 
    LeClaire, IA 52753Duane Stenzel


62



1



199362904  295th Street 
    Wells, MN 56097Michael Toelle


46



1



19925085 St. Anthony Drive 
    Browns Valley, MN 56219   Bruce Anderson, secretary-treasurer
  Donald Anthony
  Robert Bass, first vice chairman
  Dennis Carlson
  Curt Eischens
  Steve Fritel
 58




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##### Table of Contents



Robert Grabarski, assistant secretary-treasurer
  Jerry Hasnedl
  David Kayser
  James Kile, second vice chairman
  Randy Knecht
  Michael Mulcahey
  Richard Owen
  Steve Riegel
 59




---



##### Table of Contents



Daniel Schurr
  Duane Stenzel
  Michael Toelle, chairman
  Director
    Elections and Voting
    
    At the time of declaration of candidacy, the individual (except
    in the case of an incumbent) must have the written endorsement
    of a locally elected producer board that is part of the CHS
    system and located within the region from which the individual
    is to be a candidate.
    At the time of the election, the individual must be less than
    the age of 68.    
    The individual must be a member of this cooperative or a member
    of a Cooperative Association Member.
    The individual must reside in the region from which he or she is
    to be elected.
    The individual must be an active farmer or rancher. Active
    farmer or rancher means an individual whose primary
    occupation is that of a farmer or rancher, excluding anyone who
    is an employee of ours or of a Cooperative Association Member.    Region

Current IncumbentRegion 1 (Minnesota)

Curt EischensRegion 1 (Minnesota)

Jerry HasnedlRegion 2 (Montana/Wyoming)

Rich OwenRegion 3 (North Dakota)

Bruce AndersonRegion 5 (Wisconsin, Connecticut, Indiana, Illinois, Kentucky,
    Michigan, Ohio)

Robert GrabarskiRegion 7 (Iowa, Alabama, Arkansas, Florida, Louisiana, Missouri,
    Mississippi)

Dan  Schurr    60




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##### Table of Contents



EXECUTIVE
    OFFICERS    Name

Age

PositionJohn D. Johnson


60


President and Chief Executive OfficerJay Debertin


48


Executive Vice President and Chief Operating Officer, ProcessingPatrick Kluempke


60


Executive Vice President  Corporate AdministrationThomas D. Larson


60


Executive Vice President  Business SolutionsMark Palmquist


51


Executive Vice President and Chief Operating Officer, Ag BusinessJohn Schmitz


58


Executive Vice President and Chief Financial OfficerLeon E. Westbrock


61


Executive Vice President and Chief Operating Officer, Energy   John D. Johnson,
  Jay Debertin,
  Patrick Kluempke,
  Thomas D. Larson,
  Mark Palmquist,
 61




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##### Table of Contents



John Schmitz,
  Leon E. Westbrock,
 Section 16(a)
    Beneficial Ownership Reporting Compliance     Code of
    Ethics  Regulation S-K
  (651) 355-6000
 62




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##### Table of Contents



Audit
    Committee Matters        ITEM 11.
    EXECUTIVE
    COMPENSATION  Compensation
    Discussion and Analysis
  Executive
    Compensation
  Overview
    Compensation
    Philosophy and Objectives
    
    Maintaining a strong external market focus in order to attract
    and retain top talent by:  
    Aligning pay structures and total direct compensation at the
    market median through our benchmarking process
    Obtaining applicable and available survey data of similar sized
    companies 63




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##### Table of Contents




    Maintaining reasonable internal pay equity among executives in
    order to allow for broad-based development opportunities in
    support of our talent management objectives
    Driving strong business performance through annual and long-term
    incentive programs by:  
    Rewarding executives for company, business unit and individual
    performance
    Aligning executive rewards with competitive returns to our owner
    members
    Ensuring compensation components are mutually supportive and not
    contradictory
    Aligning annual and long-term results with performance goals  
    Ensuring compliance with federal and state regulations    Components
    of Executive Compensation and Benefits
       64




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##### Table of Contents



Components
    of Compensation
  pay-at-risk
  Pay Element

Definition of Pay Element

Purpose of Pay ElementBase Salary

Competitive base level of compensation provided relative to
    skills, experience, knowledge and contributions

These factors provide the fundamental element of compensation
    based on competitive market practice and internal equity
    considerationsAnnual Variable Pay

Broad-based employee short-term pay-at-risk incentive for
    achieving predetermined annual financial and individual
    performance objectives

   Provide a direct link between pay and annual business objectives
   Pay for performance to motivate and encourage the achievement of critical business initiativesProfit Sharing

Broad-based employee short-term pay-at-risk program for
    achieving predetermined Return On Equity performance levels

   Provide a direct link between employee pay and CHS profitability
   Encourage proper expense control and containmentLong-Term Incentive Plans

Long-term pay-at-risk incentive for Senior Management to achieve
    predetermined triennial Return On Equity performance goals

   Provide a direct link between senior management pay and long-term strategic business objectives
   Align management and member owner interests
   Encourage retention of key management 65




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##### Table of Contents



Pay Element

Definition of Pay Element

Purpose of Pay ElementRetirement Benefits

Retirement benefits under the qualified retirement benefits
    plans are identical to the broad-based retirement plans
    generally available to all full-time employees

These benefits are a part of our broad-based employee total
    rewards programThe supplemental plans include non-qualified retirement benefits
    that restore qualified benefits contained in our broad-based
    plans for employees whose retirement benefits are limited by
    salary caps under the Internal Revenue Code. In addition, the
    plans allow participants to voluntarily defer receipt of a
    portion of their income

These benefits are provided to attract and retain senior
    managers with total rewards programs that are competitive with
    comparable companiesHealth & Welfare Benefits

Medical, dental, vision, life insurance and disability benefits
    generally available to all full-time employees with supplemental
    executive long-term disability

These benefits are a part of our broad-based employee total
    rewards programAdditional Benefits and Perquisites

Additional benefits and perquisites provided to certain
    officers, including our Named Executive Officers

These benefits are provided to remain competitive with
    comparable companies, retain individuals who are critical to
    CHS, facilitate the executives relationships with
    customers and to support their roles in the community   Base
    Pay:
      Annual
    Variable Pay:
   66




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##### Table of Contents



CHS Company

Business Unit

Management Business

Percent of TargetPerformance Level

Performance Goal

Performance Goal

Objectives

AwardMaximum
    Target
    Threshold
    Below Threshold

14% Return on Equity
    10% Return on Equity
    8% Return on Equity

Threshold, Target and Maximum Return on Equity goals vary by
    business unit

Individual performance goals


200%
    100%
    20%
    0%             John D. Johnson

$
1,757,000John Schmitz

$
710,780Leon E. Westbrock

$
798,000Mark Palmquist

$
768,180Jay Debertin

$
591,220  67




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##### Table of Contents



Profit
    Sharing:
    ProfitEquates to Net

SharingReturn On Equity

Income for Fiscal 2008

Award14.0%

$340.6 Million


5
%12.0%

$292.0 Million


4
%10.0%

$243.3 Million


3
%9.0%

$219.0 Million


2
%8.0%

$194.6 Million


1
%     Return On Equity

Profit Sharing Award14.0%


5
%12.0%


4
%10.0%


3
%9.0%


2
%8.0%


1
%   Long-Term
    Incentive Plans:
      2006-2008
  26-month
 68




---



##### Table of Contents



2006-2008
  John D. Johnson

$
1,800,000John Schmitz

$
692,440Leon E. Westbrock

$
778,074Mark Palmquist

$
748,394Jay Debertin

$
572,366   Retirement
    Benefits:
    
    CHS Inc. Pension Plan
    CHS Inc. Savings Plan
    CHS Inc. Supplemental Executive Retirement Plan
    CHS Inc. Deferred Compensation Plan  CHS Inc.
    Pension Plan
    pay credits investment credits
      Regular
    Pay Credits
  Pay Below Social Security

Pay Above Social SecurityYears of Benefit Service

Taxable Wage Base

Taxable Wage Base1 - 3 years


3
%


6
%4 - 7 years


4
%


8
%8 - 11 years


5
%


10
%12 - 15 years


6
%


12
%16 years or more


7
%


14
%  69




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##### Table of Contents



Mid-Career
    Pay Credits
    Minimum Pay CreditPay Below Social Security

Pay Above Social SecurityAge at Date of Hire

Taxable Wage Base

Taxable Wage BaseAge 40 - 44

4%

8%Age 45 - 49

5%

10%Age 50 or more

6%

12%   Special
    Career Credits
    Total Age and ServiceAs of 1/01/1988

Additional Credit of50 - 54


1
%55 - 59


2
%60 - 64


3
%65 - 69


4
%70 or more


5
%   Investment
    Credits
  12-month
  CHS Inc.
    Savings Plan
        CHS Inc. 401(k) Plan.
  CHS Inc.
    Supplemental Executive Retirement Plan and CHS Inc. Deferred
    Compensation Plan
   70




---



##### Table of Contents



Health &
    Welfare Benefits:
    Medical
    Plans
   71




---



##### Table of Contents



Dental,
    Vision, Hearing Plan
    Life,
    Accidental Death and Dismemberment and Dependent Life
    Insurance
    Short-term
    and Long-term Disability
    Flexible
    Spending Accounts/Health Savings Accounts
    Travel
    Assistance Program
    Additional
    Benefits and Perquisites:
   72




---



##### Table of Contents



Summary
    Compensation Table
  Change in PensionValue andNon-QualifiedNon-Equity


DeferredIncentive Plan


Compensation


All OtherName and Principal Position

Year


Salary(5)


Compensation(1),(5)


Earnings(2)


Compensation(3),(4)


TotalJohn D. Johnson


2008


$
900,000


$
3,557,000


$
1,161,571


$
279,193


$
5,897,764President & Chief Executive Officer


2007



900,000



3,542,366



1,050,906



267,018



5,760,290John Schmitz


2008



507,700



1,403,220



221,711



114,197



2,246,828Executive Vice President & Chief Financial Officer


2007



492,900



1,362,386



208,021



112,868



2,176,175Leon E. Westbrock


2008



570,700



1,576,074



1,106,259



135,199



3,388,232Executive Vice President


2007



554,100



1,531,554



991,223



129,683



3,206,560Mark Palmquist


2008



548,700



1,516,574



186,642



156,707



2,408,623Executive Vice President


2007



532,700



1,481,854



193,536



143,447



2,351,537Jay Debertin


2008



422,300



1,163,586



115,784



102,039



1,803,709Executive Vice President


2007



410,000



1,126,160



123,906



107,526



1,767,592     (1)
    
    Amounts include CHS annual variable pay awards and long-term
    incentive awards.(2)
    
    This column represents both changes in pension value and
    above-market earnings on deferred compensation. Change in
    pension value is the aggregate change in the actuarial present
    value of the Named Executive Officers benefit under their
    retirement program and non-qualified earnings, if applicable.Above-market earnings represent earnings exceeding 120% of the
    Federal Reserve long-term rate as determined by the Internal
    Revenue Service (IRS) on applicable funds. The following Named
    Executive Officers had above market earnings in 2008:
    Mr. Johnson- $114,047; Mr. Schmitz- $9,951;
    Mr. Westbrock- $12,893; Mr. Palmquist- $10,502; and
    Mr. Debertin- $1,725, and above market earnings in 2007:
    Mr. Johnson- $26,787; Mr. Schmitz- $291;
    Mr. Westbrock- $835; and Mr. Palmquist- $342.(3)
    
    Amounts include CHS paid executive LTD, travel accident
    insurance, executive physical, CHS contributions to qualified
    and non-qualified defined contribution plans, car allowance,
    spousal travel, sporting tickets, club dues/memberships and
    financial planning.(4)
    
    This column includes car allowance amounts as follows:
    Mr. Johnson- $25,800; and $15,120 each for
    Mr. Schmitz, Mr. Westbrock, Mr. Palmquist and
    Mr. Debertin.(5)
    
    Amounts reflect the gross compensation and include any
    applicable deferrals. Mr. Debertin deferred $585,890 in
    2008 and $206,043 in 2007.  Material
    Terms of Named Executive Officer Employment Agreement
   73




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##### Table of Contents



Form 10-K.
  Explanation
    of Ratio of Salary and Bonus to Total Compensation
  pay-at-risk
  2008
    Grants of Plan-Based Awards
    Estimated Future Payouts Under Non-Equity Incentive Plan
    Awards
  Name

Grant Date


Threshold


Target


MaximumJohn D. Johnson


9-1-07
(1)

$
180,000


$
900,000


$
1,800,0009-1-07
(2)


180,000



900,000



1,800,000John Schmitz


9-1-07
(1)


74,998



374,990



749,9809-1-07
(2)


71,694



358,470



716,940Leon E. Westbrock


9-1-07
(1)


82,320



411,600



823,2009-1-07
(2)


79,898



399,490



798,980Mark Palmquist


9-1-07
(1)


82,320



411,600



823,2009-1-07
(2)


79,905



399,527



799,053Jay Debertin


9-1-07
(1)


63,000



315,000



630,0009-1-07
(2)


59,841



299,204



598,407     (1)
    
    Represents range of possible awards under our 2009 Annual
    Variable Pay Plan. The actual amount of the award earned for
    fiscal 2008 is presented in the Non-Equity Incentive Plan
    Compensation column of our Summary Compensation Table. The
    Annual Variable Pay Plan is described in the Compensation
    Discussion and Analysis.(2)
    
    Represents range of possible awards under our Long-Term
    Incentive Plan for the fiscal
    2007-2009
    performance period. Goals are based on achieving a three-year
    ROE of 7%, 10% and 12%. Awards are earned over a three-year
    period and vest over an additional
    26-month
    period.  Grants of
    Plan-Based Award Table Material Terms of Awards Disclosed in
    Table
   74




---



##### Table of Contents



Pension
    Benefits Table
  Number of

PresentYears of

Value of


PaymentsCredited

Accumulated


During LastName

Plan Name

Service

Benefits


Fiscal YearJohn D. Johnson(1)

CHS Inc. Pension Plan

31.6667

$
570,921


$
0SERP

31.6667


3,966,702



0Special SERP

31.6667


2,204,124



0John Schmitz(1)

CHS Inc. Pension Plan

33.7500


511,464



0SERP

33.7500


848,869



0Leon E. Westbrock(1)

CHS Inc. Pension Plan

27.0000


685,684



0SERP

27.0000


5,160,306



0Mark Palmquist

CHS Inc. Pension Plan

28.8333


398,401



0SERP

28.8333


880,170



0Jay Debertin

CHS Inc. Pension Plan

24.0833


269,252



0SERP

24.0833


388,421



0     (1)
    
    The Named Executive Officer is eligible for early retirement in
    both the CHS Inc. Pension Plan and the Supplemental Executive
    Retirement Plan.      Form 10-K
  
    Discount rate of 6.50%;
    RP-2000 Combined Healthy Participant mortality table
    (post-decrement only);
    Each Named Executive Officer is assumed to retire at the
    earliest retirement age at which unreduced benefits are
    available (age 62 for Mr. Westbrock and age 65
    for all others). The early retirement benefits under the CENEX
    formula and the Farmers Union Central Exchange, Inc.
    formula are both currently described under the Pension Benefits
    Table. The early retirement benefit under the cash balance plan
    formula is equal to the participants account balance.
    Early retirement is not defined under the Special SERP; and
    Payments under the cash balance formula of the Pension Plan
    assume a lump sum payment, and payments under the grandfather
    formula of the Pension Plan assume a single-life annuity. SERP
    benefits are payable as a lump sum.       75




---



##### Table of Contents



Year

Amount2003-2007

$
263,6632008


306,1632009


350,4282010


395,481                 2 3 1 3
   76




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##### Table of Contents



2 3 1 3
        2008
    Non-qualified Deferred Compensation Table
  Executive


Registrant


Aggregate Earnings


Aggregate


Aggregate BalanceContributions in


Contributions in


(Losses) in


Withdrawals/


at Last Fiscal YearName

Last Fiscal Year(3)


Last Fiscal Year(1)


Last Fiscal Year(4)


Distributions


End (1),(2)John D. Johnson

$
0


$
2,426,444


$
930,323


$
2,518,931


$
16,581,384John Schmitz


0



753,901



127,139



0



2,493,578Leon E. Westbrock


0



850,008



136,361



1,471,745



3,801,778Mark Palmquist


0



825,928



138,135



388,779



2,566,440Jay Debertin


585,890



617,121



(471,120
)


0



5,137,558     (1)
    
    Deferrals under the Deferred Compensation Plan are made by the
    Named Executive Officer. Amounts include Long-Term Incentive
    Plan (LTIP), retirement contributions on amounts exceeding IRS
    compensation limits, Profit Sharing, 401(k) match, plus
    Mr. Johnsons Special SERP.(2)
    
    Amounts vary in accordance with individual pension plan
    provisions and voluntary employee deferrals and withdrawals.
    These amounts include roll-overs, voluntary salary and voluntary
    incentive plan contributions from predecessor plans with
    predecessor employers that have increased in value over the
    course of the executives career. Named Executive Officers
    may defer up to 30% of their base salary and up to 100% of their
    annual variable pay to the Deferred Compensation Plan. Earnings
    on amounts deferred under the plan are determined based on the
    investment election made by the Named Executive Officer from
    five market based notional investments with a varying level of
    risk selected by CHS, and a fixed rate based on
    10-year U.S.
    Treasury Notes. Named Executive Officers may change their
    investment election daily with a maximum of 12 changes per year.
    Payments of amounts deferred are made in accordance with
    elections by the Named Executive Officer and in accordance with
    IRC §409(A). Payments under the plan may be made at a
    specified date elected by the Named Executive Officer or
    deferred until retirement, disability, or death. Payments would
    be made in a lump sum. In the event of retirement, the Named
    Executive Officer can elect to receive payments either in a lump
    sum or annual installments of up to 10 years.(3)
    
    Includes amounts deferred from salary and annual incentive pay
    reflected in the Summary Compensation Table.(4)
    
    The amounts in this column include the change in value of the
    balance, not including contributions made by the Named Executive
    Officer. 77




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##### Table of Contents



Post
    Employment
    John D. Johnson

$
900,000John Schmitz

$
507,700Leon E. Westbrock

$
570,000Mark Palmquist

$
548,700Jay Debertin

$
389,815       Director
    Compensation
  Overview
    Director
    Retirement and Healthcare Benefits
       78




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##### Table of Contents



Years of Service

Director


CHS0 to 3


100
%


0
%3 to 6


50
%


50
%6+


0
%


100
%   Director
    Life Insurance
    CHS
    Inc. Deferred Compensation Plan
     79




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##### Table of Contents



2008 Director
    Compensation Table
  Change in Pension ValueFees Earned or


and Nonqualified Deferred


All OtherName(1)

Paid in Cash(4)


Compensation Earnings(2)


Compensation(3)


TotalBruce Anderson

$
66,000


$
34,114


$
7,994


$
108,108Donald Anthony


60,900



25,172



10,142



96,214Robert Bass


69,600



28,230



12,588



110,418Dennis Carlson(5)


61,050



16,079



11,206



88,335Curt Eischens


64,050



14,824



13,425



92,299Steven Fritel


62,400



20,491



18,355



101,246Robert Grabarski


63,000



36,086



10,914



110,000Jerry Hasnedl(5)


64,650



27,277



11,279



103,206David Kayser


58,050



14,679



17,665



90,394James Kile


63,300



23,515



10,934



97,749Randy Knecht


64,200



31,341



11,698



107,239Michael Mulcahey


64,200



32,089



14,708



110,997Richard Owen


64,200



24,285



11,730



100,215Steve Riegel


62,700



22,625



10,653



95,978Daniel Schurr


60,600



9,994



17,391



87,985Duane Stenzel(5)


64,350



26,295



10,468



101,113Michael Toelle


79,500



9,630



15,461



104,591     (1)
    
    There were no changes in board membership during the year ended
    August 31, 2008.(2)
    
    This column represents both changes in pension value and
    above-market earnings on deferred compensation. Change in
    pension value is the aggregate change in the actuarial present
    value of the directors benefit under their retirement
    program, and non-qualified earnings, if applicable. The change
    in pension value will vary by director based on several factors
    including, age, service, pension benefit elected (lump sum or
    annuity- see above), discount rate and mortality factor used to
    calculate the benefit due.Above-market earnings represent earnings exceeding 120% of the
    Federal Reserve long-term rate as determined by the IRS on
    applicable funds. The following directors had above market
    earnings during the year: Mr. Bass, $114; Mr. Fritel,
    $11; Mr. Hasnedl, $37; Mr. Knecht, $25;
    Mr. Mulcahey; $6; and Mr. Toelle, $25.(3)
    
    All other compensation includes health and life insurance
    premiums and spousal travel. These amounts vary primarily due to
    the variations in life and health insurance premiums. Premium
    variations are due to several factors including the
    directors age, length of service and the number of
    dependents covered by health care benefits.-
    
    Health care premiums paid for directors include:
    Mr. Anderson, $7,552; Mr. Anthony, $8,892;
    Mr. Bass, $11,056; Mr. Carlson, $8,892;
    Mr. Eischens, $12,038; Mr. Fritel, $13,220;
    Mr. Grabarski, $8,892; Mr. Hasnedl, $8,892;
    Mr. Kayser, $15,384; Mr. Kile, $8,892;
    Mr. Knecht, $8,892; Mr. Mulcahey, $8,892;
    Mr. Owen, $8,892; Mr. Riegel, $8,892; Mr. Schurr,
    $15,384; Mr. Stenzel, $8,892; and Mr. Toelle, $15,384.-
    
    Life insurance premiums paid for directors include:
    Mr. Fritel, $2,931; and Mr. Mulcahey, $3,685.-
    
    Spousal travel includes: Mr. Anderson, $365;
    Mr. Anthony, $1,173; Mr. Bass, $1,455;
    Mr. Carlson, $2,237; Mr. Eischens, $1,310;
    Mr. Fritel, $2,127; Mr. Grabarski, $1,945;
    Mr. Hasnedl, $2,310; Mr. Kayser, $2,204;
    Mr. Kile, $1,965; Mr. Knecht, $2,729;
    Mr. Mulcahey, $2,054; Mr. Owen, $2,761;
    Mr. Riegel, $1,684; Mr. Schurr, $1,930; and
    Mr. Stenzel, $1,499.(4)
    
    Of this amount, the following directors defer the succeeding
    amounts to the Deferred Compensation Plan: Mr. Fritel,
    $2,400; Mr. Hasnedl,: $6,000; Mr. Mulcahey, $6,000;
    Mr. Riegel, $8,980; and Mr. Toelle, $6,000. 80




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##### Table of Contents



(5)
    
    Made a one-time irrevocable retirement election in 2005 to
    receive a lump sum benefit under the directors retirement
    plan. All other directors will receive a monthly annuity upon
    retirement.  Compensation
    Committee Interlocks and Insider Participation
      Report
    of the Corporate Responsibility Committee
  Regulation S-K Form 10-K.
        81




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ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    Amount andNature ofBeneficialTitle of Class

Name of Beneficial Owner

Ownership


% of Class(1)8% Cumulative Redeemable Preferred Stock

Directors:Michael Toelle


420 shares
(2)



*Bruce Anderson


351 shares




*Donald Anthony


100 shares




*Robert Bass


120 shares




*Dennis Carlson


710 shares
(2)



*Curt Eischens


120 shares




*Steve Fritel


1,655 shares




*Robert Grabarski


6,580 shares
(2)



*Jerry Hasnedl


200 shares




*David Kayser


0 shares




*James Kile


250 shares
(2)



*Randy Knecht


438 shares
(2)



*Michael Mulcahey


100 shares




*Richard Owen


240 shares




*Steve Riegel


0 shares




*Daniel Schurr


0 shares




*Duane Stenzel


850 shares




*Named Executive Officers:John D. Johnson


7,220 shares
(2)



*Jay Debertin


1,200 shares




*Patrick Kluempke


1,000 shares




*Thomas D. Larson


400 shares




*Mark Palmquist


400 shares




*John Schmitz


1,400 shares
(2)



*Leon E. Westbrock


3,000 shares




*Directors and executive officers as a group


26,754 shares




*     (1)
    
    As of August 31, 2008, there were 9,047,780 shares of
    8% Cumulative Redeemable Preferred Stock Outstanding.(2)
    
    Includes shares held by spouse, children and Individual
    Retirement Accounts (IRA).*
    
    Less than 1%.     82




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##### Table of Contents



ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE  mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law sister-in-law,
  Product Sales


PatronageName

and Purchases


DividendsBruce Anderson

$
243,915


$
6,055Curt Eischens


375,123



4,559Steve Fritel


173,849



6,757Jerry Hasnedl


1,492,944



38,588David Kayser


1,133,984



12,736Richard Owen


149,977



1,782Michael Toelle


1,051,592



30,385   Review,
    Approval or Ratification of Related Party Transaction
      Director
    Independence
   83




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##### Table of Contents



Bruce Anderson

Donald AnthonyRobert Bass

Dennis CarlsonSteve Fritel

Robert GrabarskiJerry Hasnedl

David KayserJames Kile

Randy KnechtMichael Mulcahey

Richard OwenSteve Riegel

Daniel SchurrDuane Stenzel

Michael Toelle     ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES    Description of Fees

2008


2007Audit Fees(1)

$
1,460,750


$
1,246,665Audit  Related Fees(2)


86,550



122,072Tax Fees(3)






20,850All Other Fees






Total

$
1,547,300


$
1,389,587     (1)
    
    Includes fees for audit of annual financial statements and
    reviews of the related quarterly financial statements, certain
    statutory audits, work related to filings of registration
    statements, and services for 404 readiness efforts.(2)
    
    Includes fees for employee benefit plan audits.(3)
    
    Includes fees related to tax compliance, tax advice and tax
    planning.     84




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##### Table of Contents



PART IV.  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  FINANCIAL STATEMENTS
  Form 10-K.
  Page No.CHS Inc.Report of Independent Registered Public
    Accounting Firm


F-1Consolidated Balance Sheets as of August 31,
    2008 and 2007


F-2Consolidated Statements of Operations for the
    years ended August 31, 2008, 2007 and 2006


F-3Consolidated Statements of Equities and
    Comprehensive Income for the years ended August 31, 2008,
    2007 and 2006


F-4Consolidated Statements of Cash Flows for the
    years ended August 31, 2008, 2007 and 2006


F-5Notes to Consolidated Financial Statements


F-6     FINANCIAL STATEMENT SCHEDULES
  SCHEDULE II 
    VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
  Balance at


Additions:


Additions:


Deductions:


Balance atBeginning


Charged to Costs


Charged to


Write-offs, net


Endof Year


and Expenses


Other Accounts


of Recoveries


of Year(Dollars in thousands)Allowances for Doubtful Accounts2008

$
62,960


$
20,691






$
(10,000
)

$
73,6512007


53,898



12,358







(3,296
)


62,9602006


60,041



11,414







(17,557
)


53,898  85




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm on
  Financial
    Statement Schedule
    page F-1 Form 10-K Form 10-K.
  
     86




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##### Table of Contents



EXHIBITS
  3
.1

Articles of Incorporation of CHS Inc., as amended. (Incorporated
    by reference to our Form 10-Q for the quarterly period ended
    November 30, 2006, filed on January 11, 2007).3
.2

Bylaws of CHS Inc. (Incorporated by reference to our Form 10-Q
    for the quarterly period ended November 30, 2005, filed on
    January 11, 2006).4
.1

Resolution Creating a Series of Preferred Equity to be
    Designated 8% Cumulative Redeemable Preferred Stock.
    (Incorporated by reference to Amendment No. 1 to our
    Registration Statement on Form S-2 (File No. 333-101916), dated
    January 13, 2003).4
.2

Form of Certificate Representing 8% Cumulative Redeemable
    Preferred Stock. (Incorporated by reference to Amendment No. 2
    to our Registration Statement on Form S-2 (File No. 333-101916),
    dated January 23, 2003).4
.3

Unanimous Written Consent Resolution of the Board of Directors
    Amending the Amended and Restated Resolution Creating a Series
    of Preferred Equity to be Designated 8% Cumulative Redeemable
    Preferred Stock. (Incorporated by reference to Amendment No. 2
    to our Registration Statement on Form S-2 (File No. 333-101916),
    dated January 23, 2003).4
.4

Unanimous Written consent Resolution of the Board of Directors
    Amending the Amended and Restated Resolution Creating a Series
    of Preferred Equity to be Designated 8% Cumulative Redeemable
    Preferred Stock to change the record date for dividends.
    (Incorporated by reference to our Form 10-Q for the quarterly
    period ended May 31, 2003, filed July 2, 2003).10
.1

Employment Agreement dated November 6, 2003 by and between John
    D. Johnson and CHS Inc. (Incorporated by reference to our Form
    10-K for the year ended August 31, 2003, filed November 21,
    2003).10
.1A

Amended and Restated Employment Agreement between John D.
    Johnson and CHS Inc., effective as of August 1, 2007
    (Incorporated by reference to our Current Report on Form 8-K
    filed August 10, 2007).10
.2

Cenex Harvest States Cooperatives Supplemental Savings Plan.
    (Incorporated by reference to our Form 10-K for the year ended
    August 31, 2000, filed November 22, 2000).10
.2A

Amendment No. 3 to the CHS Inc. Supplemental Savings Plan.
    (Incorporated by reference to our Form 10-Q for the quarterly
    period ended May 31, 2006, filed July 12, 2006).10
.3

Cenex Harvest States Cooperatives Supplemental Executive
    Retirement Plan. (Incorporated by reference to our Form 10-K for
    the year ended August 31, 2000, filed November 22, 2000).10
.3A

Amendment No. 4 to the CHS Inc. Supplemental Executive
    Retirement Plan. (Incorporated by reference to our Form 10-Q for
    the quarterly period ended May 31, 2006, filed July 12, 2006).10
.3B

Amendment No. 5 to the CHS Inc. Supplemental Executive
    Retirement Plan. (Incorporated by reference to our Form 10-Q for
    the quarterly period ended February 29, 2008, filed April 9,
    2008).10
.3C

Amendment No. 6 to the CHS Inc. Supplemental Executive
    Retirement Plan. (Incorporated by reference to our Form 10-Q for
    the quarterly period ended February 29, 2008, filed April 9,
    2008).10
.3D

Amendment No. 7 to the CHS Inc. Supplemental Executive
    Retirement Plan.(*).10
.4

Cenex Harvest States Cooperatives Senior Management Compensation
    Plan. (Incorporated by reference to our Form 10-K for the year
    ended August 31, 2000, filed November 22, 2000).10
.5

Cenex Harvest States Cooperatives Executive Long-Term Variable
    Compensation Plan. (Incorporated by reference to our Form 10-K
    for the year ended August 31, 2000, filed November 22, 2000).10
.6

Cenex Harvest States Cooperatives Share Option Plan.
    (Incorporated by reference to our Form 10-K for the year ended
    August 31, 2004, filed November 18, 2004).10
.6A

Amendment to Cenex Harvest States Share Option Plan, dated June
    28, 2001. (Incorporated by reference to our Registration
    Statement on Form S-2 (File No. 333-65364), filed July 18, 2001).10
.6B

Amendment No. 2 to Cenex Harvest States Share Option Plan, dated
    May 2, 2001. (Incorporated by reference to our Form 10-K for the
    year ended August 31, 2004, filed November 18, 2004).10
.6C

Amendment No. 3 to Cenex Harvest States Share Option Plan, dated
    June 4, 2002. (Incorporated by reference to our Form 10-K for
    the year ended August 31, 2004, filed November 18, 2004).10
.6D

Amendment No. 4 to Cenex Harvest States Share Option Plan, dated
    April 6, 2004. (Incorporated by reference to our Form 10-K for
    the year ended August 31, 2004, filed November 18, 2004).10
.7

CHS Inc. Share Option Plan Option Agreement. (Incorporated by
    reference to our Form 10-K for the year ended August 31, 2004,
    filed November 18, 2004).10
.8

CHS Inc. Share Option Plan Trust Agreement. (Incorporated by
    reference to our Form 10-K for the year ended August 31, 2004,
    filed November 18, 2004). 87




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##### Table of Contents



10
.8A

Amendment No. 1 to the Trust Agreement. (Incorporated by
    reference to our Form 10-K for the year ended August 31, 2004,
    filed November 18, 2004).10
.9

$225,000,000 Note Agreement (Private Placement Agreement) dated
    as of June 19, 1998 among Cenex Harvest States Cooperatives and
    each of the Purchasers of the Notes. (Incorporated by Reference
    to our Form 10-Q Transition Report for the period June 1, 1998
    to August 31, 1998, filed October 14, 1998).10
.9A

First Amendment to Note Agreement ($225,000,000 Private
    Placement), effective September 10, 2003, among CHS Inc. and
    each of the Purchasers of the notes. (Incorporated by reference
    to our Form 10-K for the year ended August 31, 2003, filed
    November 21, 2003).10
.10

2006 Amended and Restated Credit Agreement (Revolving Loan) by
    and between CHS Inc. and the Syndication Parties dated as of May
    18, 2006. (Incorporated by reference to our Form 10-Q for the
    quarterly period ended May 31, 2006, filed July 12, 2006).10
.10A

First Amendment to 2006 Amended and Restated Credit Agreement by
    and among CHS Inc., CoBank, ACB and the Syndication Parties,
    dated May 8, 2007 (Incorporated by reference to our Current
    Report on Form 8-K filed May 11, 2007).10
.10B

Second Amendment to 2006 Amended and Restated Credit Agreement
    by and among CHS Inc., CoBank, ACB and the Syndication Parties,
    dated October 18, 2007. (*)10
.10C

Third Amendment to 2006 Amended and Restated Credit Agreement by
    and among CHS Inc., CoBank, ACB and the Syndication Parties,
    dated March 5, 2008 (Incorporated by reference to our Current
    Report on Form 8-K filed March 6, 2008).10
.10D

Fourth Amendment to 2006 Amended and Restated Credit Agreement
    by and among CHS Inc., CoBank, ACB and the Syndication Parties,
    dated May 1, 2008 (Incorporated by reference to our Form 10-Q
    for the quarterly period ended May 31, 2008 filed July 10, 2008).10
.11

$200 Million Term Loan Credit Agreement dated as of June 1, 1998
    among Cenex Harvest States Cooperatives, CoBank, ACB, and St.
    Paul Bank for Cooperatives, including Exhibit 2.4 (form of $200
    Million Promissory Note). (Incorporated by Reference to our Form
    10-Q Transition Report for the period June 1, 1998 to August 31,
    1998, filed October 14, 1998).10
.11A

First Amendment to Credit Agreement (Term Loan), effective as of
    May 31, 1999 among Cenex Harvest States Cooperatives, CoBank,
    ACB, and St. Paul Bank for Cooperatives. (Incorporated by
    reference to our Form 10-Q for the quarterly period ended May
    31, 1999, filed July 13, 1999).10
.11B

Second Amendment to Credit Agreement (Term Loan) dated May 23,
    2000 by and among Cenex Harvest States Cooperatives, CoBank,
    ACB, St. Paul Bank for Cooperatives and the Syndication Parties.
    (Incorporated by reference to our Form 10-Q for the quarterly
    period ended May 31, 2000, filed July 10, 2000).10
.11C

Third Amendment to Credit Agreement (Term Loan) dated May 23,
    2001 among Cenex Harvest States Cooperatives, CoBank, ACB, and
    the Syndication Parties. (Incorporated by reference to our Form
    10-Q for the quarterly period ended May 31, 2001, filed July 3,
    2001).10
.11D

Fourth Amendment to Credit Agreement (Term Loan) dated May 22,
    2002 among Cenex Harvest States Cooperatives, CoBank, ACB and
    the Syndication Parties. (Incorporated by reference to our Form
    10-Q for the quarterly period ended May 31, 2002, filed July 3,
    2002).10
.11E

Fifth Amendment to Credit Agreement (Term Loan) dated May 21,
    2003 by and among Cenex Harvest States Cooperatives, CoBank, ACB
    and the Syndication Parties. (Incorporated by reference to our
    Form 10-K for the year ended August 31, 2004, filed November 18,
    2004).10
.11F

Sixth Amendment to Credit Agreement (Term Loan) dated as of May
    20, 2004 by and among CHS Inc., CoBank, ACB, and the Syndication
    Parties. (Incorporated by reference to our Form 10-Q for the
    quarterly period ended May 31, 2004, filed July 12, 2004).10
.11G

Seventh Amendment to Credit Agreement (Term Loan) dated as of
    May 19, 2005 by and among CHS Inc., CoBank, ACB, and the
    Syndication Parties. (Incorporated by reference to our form 10-K
    for the year ended August 31, 2005, filed on November 18, 2005).10
.11H

Eighth Amendment to Credit Agreement (Term Loan) dated as of
    November 18, 2005 by and among CHS Inc., CoBank, ACB, and the
    Syndication Parties. (Incorporated by reference to our form 10-K
    for the year ended August 31, 2005, filed on November 18, 2005).10
.11I

Ninth Amendment to Credit Agreement (Term Loan) dated as of May
    18, 2006 by and among CHS Inc., CoBank, ACB and the Syndication
    Parties. (Incorporated by reference to our Form 10-Q for the
    quarterly period ended May 31, 2006).10
.11J

Tenth Amendment to Credit Agreement (Term Loan) dated as of May
    8, 2007 by and among CHS Inc. and CoBank, ACB (Incorporated by
    reference to our Current Report on Form 8-K filed May 11, 2007). 88




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##### Table of Contents



10
.12

CHS Inc. Special Supplemental Executive Retirement Plan.
    (Incorporated by reference to our Form 10-K for the year ended
    August 31, 2003, filed November 21, 2003).10
.12A

Amendment No. 1 to the CHS Inc. Special Supplemental Executive
    Retirement Plan. (Incorporated by reference to our Form 10-Q for
    the quarterly period ended February 29, 2008, filed April 9,
    2008).10
.13

Note purchase and Private Shelf Agreement dated as of January
    10, 2001 between Cenex Harvest States Cooperatives and The
    Prudential Insurance Company of America. (Incorporated by
    reference to our Form 10-Q for the quarterly period ended
    February 28, 2001, filed April 10, 2001).10
.13A

Amendment No. 1 to Note Purchase and Private Shelf Agreement,
    dated as of March 2, 2001. (Incorporated by reference to our
    Form 10-Q for the quarterly period ended February 28, 2001,
    filed April 10, 2001).10
.14

Note Purchase Agreement and Series D & E Senior Notes dated
    October 18, 2002. (Incorporated by reference to our Form 10-K
    for the year ended August 31, 2002, filed November 25, 2002).10
.15

2003 Amended and Restated Credit Agreement ($15 million,
    2 Year Facility) dated December 16, 2003 between CoBank,
    ACB, U.S. AgBank, FCB and the National Cooperative Refinery
    Association, Inc. (Incorporated by reference to our Form 10-Q
    for the quarterly period ended February 29, 2004, filed
    April 7, 2004).10
.15A

First Amendment to the 2003 Amended and Restated Credit
    Agreement between the National Cooperative Refinery Association
    and the Syndication Parties. (Incorporated by reference to our
    Current Report on Form 8-K filed December 20, 2005).10
.15B

Third Amendment to 2003 Amended and Restated Credit Agreement
    between National Cooperative Refinery Association and the
    Syndication Parties (Incorporated by reference to our Current
    Report on Form 8-K filed December 18, 2006).10
.15C

Fifth Amendment to 2003 Amended and Restated Credit Agreement
    between National Cooperative Refinery Association and the
    Syndication Parties (Incorporated by reference to our
    Registration Statement on Form S-1 (File No. 333-148091), filed
    December 14, 2007).10
.16

Note Purchase and Private Shelf Agreement between CHS Inc. and
    Prudential Capital Group dated as of April 13, 2004.
    (Incorporated by reference to our Form 10-Q for the quarterly
    period ended May 31, 2004, filed July 12, 2004).10
.16A

Amendment No. 1 to Note Purchase and Private Shelf Agreement
    dated April 9, 2007, among CHS Inc., Prudential Investment
    Management, Inc. and the Prudential Affiliate parties
    (Incorporated by reference to our Form 10-Q for the quarterly
    period ended February 28, 2007 filed April 9, 2007).10
.16B

Amendment No. 2 to Note Purchase and Private Shelf Agreement and
    Senior Series J Notes totaling $50 million issued February
    8, 2008 (Incorporated by reference to our Current Report on Form
    8-K filed February 11, 2008).10
.17

Note Purchase Agreement for Series H Senior Notes ($125,000,000
    Private Placement) dated September 21, 2004. (Incorporated by
    reference to our Current Report on Form 8-K filed September 22,
    2004).10
.18

Deferred Compensation Plan. (Incorporated by reference to our
    Registration Statement on Form S-8 (File No. 333-121161),
    filed December 10, 2004).10
.18A

First Amendment to CHS Inc. Deferred Compensation Plan.
    (Incorporated by reference to our Registration Statement on Form
    S-8 (File No. 333-129464), filed November 4, 2005).10
.18B

Second Amendment to CHS Inc. Deferred Compensation Plan.
    (Incorporated by reference to our Form 10-Q for the
    quarterly period ended February 29, 2008, filed April 9, 2008).10
.18C

Third Amendment to CHS Inc. Deferred Compensation Plan.
    (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended May 31, 2008, filed July 10,
    2008).10
.18D

Fourth Amendment to CHS Inc. Deferred Compensation Plan. (*).10
.19

New Plan Participants 2005 Plan Agreement and Election Form for
    the CHS Inc. Deferred Compensation Plan. (Incorporated by
    reference to our Registration Statement on Form S-8 (File No.
    333-121161), filed December 10, 2004).10
.20

Beneficiary Designation Form for the CHS Inc. Deferred
    Compensation Plan. (Incorporated by reference to our
    Registration Statement on Form S-8 (File No. 333-121161), filed
    December 10, 2004).10
.21

Share Option Plan Participants 2005 Plan Agreement and Election
    Form. (Incorporated by reference to our Registration Statement
    on Form S-8 (File No. 333-129464), filed November 4, 2005).10
.22

Amended and Restated Loan and Security Agreement dated August
    31, 2006, by and between Provista Renewable Fuels Marketing, LLC
    and LaSalle Bank National Association (Incorporated by reference
    to our Form 10-K for the year ended August 31, 2006, filed
    November 22, 2006). 89




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##### Table of Contents



10
.22A

First Amendment to Amended and Restated Loan and Security
    Agreement by and among Provista Renewable Fuels Marketing, LLC
    and LaSalle Bank National Association dated January 30, 2007
    (Incorporated by reference to our Current Report on Form 8-K
    filed January 31, 2007).10
.22B

Second Amendment to Amended and Restated Loan and Security
    Agreement by and among Provista Renewable Fuels Marketing, LLC
    and LaSalle Bank National Association dated November 2, 2007
    (Incorporated by reference to our Current Report on Form 8-K
    filed November 6, 2007).10
.23

City of McPherson, Kansas Taxable Industrial Revenue Bond Series
    2006 registered to National Cooperative Refinery Association in
    the amount of $325 million (Incorporated by reference to our
    Current Report on Form 8-K filed December 18, 2006).10
.24

Bond Purchase Agreement between National Cooperative Refinery
    Association, as purchaser, and City of McPherson, Kansas, as
    issuer, dated as of December 18, 2006 (Incorporated by reference
    to our Current Report on Form 8-K filed December 18, 2006).10
.25

Trust Indenture between City of McPherson, Kansas, as issuer,
    and Security Bank of Kansas City, Kansas City, Kansas, as
    trustee, dated as of December 18, 2006 (Incorporated by
    reference to our Current Report on Form 8-K filed December 18,
    2006).10
.26

Lease agreement between City of McPherson, Kansas, as issuer,
    and National Cooperative Refinery Association, as tenant, dated
    as of December 18, 2006 (Incorporated by reference to our
    Current Report on Form 8-K filed December 18, 2006).10
.27

Commercial Paper Placement Agreement by and between CHS Inc. and
    Marshall & Ilsley Bank dated October 30, 2006 (Incorporated
    by reference to our Form 10-Q for the quarterly period ended
    November 30, 2006, filed January 11, 2007).10
.28

Commercial Paper Dealer Agreement by and between CHS Inc. and
    SunTrust Capital Markets, Inc. dated October 6, 2006
    (Incorporated by reference to our Form 10-Q for the quarterly
    period ended November 30, 2006, filed January 11, 2007).10
.29

Note Purchase Agreement ($400,000,000 Private Placement) and
    Series I Senior Notes dated as of October 4, 2007 (Incorporated
    by reference to our Current Report on Form 8-K filed October 4,
    2007).10
.30

Agreement Regarding Distribution of Assets, by and among CHS
    Inc., United Country Brands, LLC, Land OLakes, Inc. and
    Winfield Solutions, LLC, made as of September 4, 2007.
    (Incorporated by reference to our Form 10-K for the year ended
    August 31, 2008, filed November 20, 2007).10
.31

$150 Million Term Loan Credit Agreement by and between CHS Inc.,
    CoBank, ACB and the Syndication Parties dated as of December 12,
    2007 (Incorporated by reference to our Registration Statement on
    Form S-1 (File No. 333-148091), filed December 14, 2007).10
.31A

First Amendment to $150 Million Term Loan Credit Agreement by
    and between CHS Inc., CoBank, ACB and the Syndication Parties
    dated as of May 1, 2008 (Incorporated by reference to our Form
    10-Q for the quarterly period ended May 31, 2008, filed July 10,
    2008).10
.32

Credit Agreement (364-day Revolving Loan) by and between CHS
    Inc., CoBank, ACB and the Syndication Parties dated as of
    February 14, 2008 (Incorporated by reference to our Current
    Report on Form 8-K filed February 15, 2008).10
.32A

First Amendment to Credit Agreement (364-day Revolving Loan) by
    and between CHS Inc., CoBank, ACB and the Syndication Parties
    dated as of May 1, 2008 (Incorporated by reference to our Form
    10-Q for the quarterly period ended May 31, 2008, filed July, 10
    2008).10
.33

$75 Million Uncommitted Demand Facility by and between CHS
    Europe S.A. and Fortis Bank (Nederland) N.V. dated April 18,
    2008 (Incorporated by reference to our Form 10-Q for the
    quarterly period ended May 31, 2008, filed July 10, 2008).10
.34

$60 Million Uncommitted Trade Finance Facility by and between
    CHS Europe S.A. and Societe Generale dated June 6, 2008
    (Incorporated by reference to our Form 10-Q for the quarterly
    period ended May 31, 2008, filed July 10, 2008).10
.35

$70 Million Uncommitted Transactional Facility by and between
    CHS Europe S.A. and BNP Paribas dated July 17, 2008 (*).10
.36

$50 Million Private Shelf Agreement by and between CHS Inc. and
    John Hancock Life Insurance Company dated as of August 11, 2008
    (*).21
.1

Subsidiaries of the Registrant. (*)23
.1

Consent of Independent Registered Public Accounting Firm. (*)24
.1

Power of Attorney. (*)31
.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002. (*) 90




---



##### Table of Contents



31
.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002. (*)32
.1

Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002. (*)32
.2

Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002. (*)     (*)
    
    Filed herewith.  EXHIBITS
    SCHEDULES
   SUPPLEMENTAL
    INFORMATION   91




---



##### Table of Contents



SIGNATURES      By:
    /s/  John
    D. Johnson   President and Chief Executive Officer
    Signature

Title/s/  John
    D. JohnsonJohn
    D. Johnson

President and Chief Executive Officer 
    (principal executive officer)/s/  John
    SchmitzJohn
    Schmitz

Executive Vice President and Chief Financial Officer (principal
    financial officer)/s/  Jodell
    HellerJodell
    Heller

Vice President and Controller 
    (principal accounting officer)Michael
    Toelle*

Chairman of the Board of DirectorsBruce
    Anderson*

DirectorDon
    Anthony*

DirectorRobert
    Bass*

DirectorDennis
    Carlson*

DirectorCurt
    Eischens*

DirectorSteve
    Fritel*

DirectorRobert
    Grabarski*

Director 92




---



##### Table of Contents



Signature

TitleJerry
    Hasnedl*

DirectorDavid
    Kayser*

DirectorJames
    Kile*

DirectorRandy
    Knecht*

DirectorMichael
    Mulcahey*

DirectorRichard
    Owen*

DirectorSteve
    Riegel*

DirectorDan
    Schurr*

DirectorDuane
    Stenzel*

Director*By

/s/  John
    D. JohnsonJohn
    D. JohnsonAttorney-in-fact  93




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  To The Board
    of Directors and Members and Patrons of CHS inc.:
      
    F-1




---



##### Table of Contents



Consolidated
    Financial Statements
  CONSOLIDATED BALANCE SHEETS
  August 312008


2007*(Dollars in thousands)ASSETSCurrent assets:Cash and cash equivalents

$
136,540


$
357,712Receivables


2,307,794



1,401,251Inventories


2,368,024



1,666,632Derivative assets


369,503



247,082Other current assets


667,338



264,181Total current assets


5,849,199



3,936,858Investments


784,516



880,592Property, plant and equipment


1,948,305



1,728,171Other assets


189,958



208,752Total assets

$
8,771,978


$
6,754,373LIABILITIES AND EQUITIESCurrent liabilities:Notes payable

$
106,154


$
672,571Current portion of long-term debt


118,636



98,977Customer credit balances


224,349



110,818Customer advance payments


644,822



161,525Checks and drafts outstanding


204,896



143,133Accounts payable


1,838,214



1,120,822Derivative liabilities


273,591



177,209Accrued expenses


374,898



255,631Dividends and equities payable


325,039



374,294Total current liabilities


4,110,599



3,114,980Long-term debt


1,076,219



589,344Other liabilities


423,742



377,208Minority interests in subsidiaries


205,732



197,386Commitments and contingenciesEquities


2,955,686



2,475,455Total liabilities and equities

$
8,771,978


$
6,754,373     *
    
    Adjusted to reflect adoption of FASB Staff Position No. AUG
    AIR-1; see Note 2    F-2




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##### Table of Contents



Consolidated
    Financial Statements
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  For the Years Ended August 312008


2007*


2006*(Dollars in thousands)Revenues

$
32,167,461


$
17,215,992


$
14,383,835Cost of goods sold


30,993,899



16,129,233



13,540,285Gross profit


1,173,562



1,086,759



843,550Marketing, general and administrative


329,965



245,357



231,238Operating earnings


843,597



841,402



612,312Gain on investments


(29,193
)


(20,616
)Interest, net


76,460



31,098



41,305Equity income from investments


(150,413
)


(109,685
)


(84,188
)Minority interests


72,160



143,214



91,079Income from continuing operations before income taxes


874,583



797,391



564,116Income taxes


71,538



40,668



59,350Income from continuing operations


803,045



756,723



504,766Income from discontinued operations, net of taxes










625Net income

$
803,045


$
756,723


$
505,391Distribution of net income:Patronage refunds

$
652,000


$
550,000


$
374,000Unallocated capital reserve


151,045



206,723



131,391Net income

$
803,045


$
756,723


$
505,391     *
    
    Adjusted to reflect adoption of FASB Staff Position No. AUG
    AIR-1; see Note 2    F-3




---



##### Table of Contents



Consolidated
    Financial Statements



CONSOLIDATED STATEMENTS OF EQUITIES AND COMPREHENSIVE
    INCOME  For the Years Ended August 31, 2008, 2007 and 2006AccumulatedCapital


Nonpatronage








Unallocated


Other


AllocatedEquity


Equity


Preferred


Patronage


Capital


Comprehensive


Capital


TotalCertificates


Certificates


Stock


Refunds


Reserve


Income (Loss)


Reserve


Equities(Dollars in thousands)Balances, September 1, 2005*

$
1,153,709


$
27,467


$
126,688


$
142,100


$
315,893


$
4,971


$
8,050


$
1,778,878Dividends and equity retirement determination


69,856











60,900



1,650











132,406Patronage distribution


145,333











(203,000
)


(4,850
)










(62,517
)Equities retired


(55,836
)


(97
)






















(55,933
)Capital equity certificates exchanged for preferred stock


(23,824
)






23,824







(88
)










(88
)Equities issued


11,064



























11,064Preferred stock dividends


















(10,816
)










(10,816
)Other, net


(3,300
)


(197
)










221











(3,276
)Comprehensive income:Net income














374,000



131,391











505,391Other comprehensive income






















8,131







8,131Total comprehensive income






























513,522Dividends and equities payable


(116,919
)










(130,900
)


(1,955
)










(249,774
)Balances, August 31, 2006*


1,180,083



27,173



150,512



243,100



431,446



13,102



8,050



2,053,466Dividends and equity retirement determination


116,919











130,900



1,955











249,774Patronage distribution


246,802











(374,000
)


(5,860
)










(133,058
)Equities retired


(70,402
)


(382
)






















(70,784
)Capital equity certificates exchanged for preferred stock


(35,899
)






35,899







(145
)










(145
)Equities issued


10,132



























10,132Preferred stock dividends


















(13,104
)










(13,104
)Other, net


(3,203
)


(145
)










168







(9
)


(3,189
)Comprehensive income:Net income














550,000



206,723











756,723Other comprehensive income






















62,353







62,353Total comprehensive income






























819,076Adjustment to initially apply FASB Statement No. 158






















(62,419
)






(62,419
)Dividends and equities payable


(179,381
)










(192,500
)


(2,413
)










(374,294
)Balances, August 31, 2007*


1,265,051



26,646



186,411



357,500



618,770



13,036



8,041



2,475,455Dividends and equity retirement determination


179,381











192,500



2,413











374,294Patronage distribution


362,206











(550,000
)


(7,210
)










(195,004
)Equities retired


(81,295
)


(500
)






















(81,795
)Capital equity certificates exchanged for preferred stock


(46,364
)






46,364







(135
)










(135
)Equities issued


4,680



























4,680Preferred stock dividends


















(16,288
)










(16,288
)Other, net


(2,057
)


(804
)










429







(17
)


(2,449
)Comprehensive income:Net income














652,000



151,045











803,045Other comprehensive loss






















(81,078
)






(81,078
)Total comprehensive income






























721,967Dividends and equities payable


(93,823
)










(228,200
)


(3,016
)










(325,039
)Balances, August 31, 2008

$
1,587,779


$
25,342


$
232,775


$
423,800


$
746,008


$
(68,042
)

$
8,024


$
2,955,686     *
    
    Adjusted to reflect adoption of FASB Staff Position No. AUG
    AIR-1; see Note 2    F-4




---



##### Table of Contents



Consolidated
    Financial Statements



CONSOLIDATED STATEMENTS OF CASH FLOWS  For the Years Ended August 312008


2007*


2006*(Dollars in thousands)Cash flows from operating activities:Net income

$
803,045


$
756,723


$
505,391Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


181,263



140,596



126,777Amortization of deferred major repair costs


29,146



23,250



14,716Income from equity investments


(150,413
)


(109,685
)


(84,188
)Distributions from equity investments


110,013



66,693



58,240Minority interests


72,160



143,214



91,079Noncash patronage dividends received


(4,083
)


(3,302
)


(4,969
)Gain on sale of property, plant and equipment


(5,668
)


(6,916
)


(5,232
)Gain on investments


(29,193
)


(20,616
)Deferred taxes


26,011



50,868



88,323Other, net


770



4,261



460Changes in operating assets and liabilities:Receivables


(832,146
)


(278,179
)


44,650Inventories


(517,515
)


(528,288
)


(198,501
)Derivative assets


(122,421
)


(172,809
)


28,421Other current assets and other assets


(98,625
)


(81,906
)


34,552Customer credit balances


113,501



44,030



(25,915
)Customer advance payments


275,386



79,138



(48,062
)Accounts payable and accrued expenses


827,997



211,469



(101,254
)Derivative liabilities


96,382



79,399



(55,038
)Other liabilities


30,152



9,346



28,371Net cash provided by operating activities


805,762



407,286



497,821Cash flows from investing activities:Acquisition of property, plant and equipment


(318,559
)


(373,300
)


(234,992
)Proceeds from disposition of property, plant and equipment


9,336



13,548



13,911Expenditures for major repairs


(21,662
)


(34,664
)


(42,879
)Investments


(370,248
)


(95,834
)


(72,989
)Investments redeemed


43,046



4,935



7,283Proceeds from sale of investments


122,075



10,918Joint venture distribution transaction, net


(4,737
)Changes in notes receivable


(67,119
)


(29,320
)


20,955Acquisition of intangibles


(3,399
)


(9,083
)


(2,867
)Business acquisitions


(47,001
)


(15,104
)Other investing activities, net


(5,444
)


(2,051
)


3,351Net cash used in investing activities


(663,712
)


(529,955
)


(308,227
)Cash flows from financing activities:Changes in notes payable


(565,022
)


633,203



(59,025
)Long-term debt borrowings


600,000



4,050Principal payments on long-term debt


(99,479
)


(60,851
)


(36,669
)Payments for bank fees on debt


(3,486
)


(104
)


(1,997
)Changes in checks and drafts outstanding


61,110



85,412



(10,513
)Distributions to minority owners


(63,123
)


(76,763
)


(80,529
)Costs incurred  capital equity certificates redeemed


(135
)


(145
)


(88
)Preferred stock dividends paid


(16,288
)


(13,104
)


(10,816
)Retirements of equities


(81,795
)


(70,784
)


(55,933
)Cash patronage dividends paid


(195,004
)


(133,058
)


(62,517
)Net cash (used in) provided by financing activities


(363,222
)


367,856



(318,087
)Net (decrease) increase in cash and cash equivalents


(221,172
)


245,187



(128,493
)Cash and cash equivalents at beginning of period


357,712



112,525



241,018Cash and cash equivalents at end of period

$
136,540


$
357,712


$
112,525     *
    
    Adjusted to reflect adoption of FASB Staff Position No. AUG
    AIR-1; see Note 2    F-5




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1  Summary
    of Significant Accounting Policies:



Organization



CHS Inc. (CHS or the Company) is an agricultural supply, energy
    and grain-based foods cooperative company organized for the
    mutual benefit of its members. Members of the cooperative are
    located throughout the United States. The Company provides a
    wide variety of products and services, from initial agricultural
    inputs such as fuels, farm supplies and agronomy products, to
    agricultural outputs that include grains and oilseeds, grain and
    oilseed processing and food products. Revenues are both domestic
    and international.



Consolidation



The consolidated financial statements include the accounts of
    CHS and all of its wholly-owned and majority-owned subsidiaries
    and limited liability companies, including National Cooperative
    Refinery Association (NCRA), included in the Energy segment. The
    effects of all significant intercompany transactions have been
    eliminated.



The Company had various acquisitions during the three years
    ended August 31, 2008, which have been accounted for using
    the purchase method of accounting. Operating results of the
    acquisitions are included in the consolidated financial
    statements since the respective acquisition dates. The
    respective purchase prices were allocated to the assets and
    liabilities acquired based upon the estimated fair values. The
    excess purchase prices over the estimated fair values of the net
    assets acquired have been reported as identifiable intangible
    assets.



Cash
    Equivalents



Cash equivalents include short-term, highly liquid investments
    with original maturities of three months or less at the date of
    acquisition.



Inventories



Grain, processed grain, oilseed and processed oilseed are stated
    at net realizable values which approximates market values. All
    other inventories are stated at the lower of cost or market.
    Costs for inventories produced or modified by the Company
    through a manufacturing process include fixed and variable
    production and raw material costs, and in-bound freight costs
    for raw materials. Costs for inventories purchased for resale
    include the cost of products and freight incurred to place the
    products at the Companys points of sales. The costs of
    certain energy inventories (wholesale refined products, crude
    oil and asphalt) are determined on the
    last-in,
    first-out (LIFO) method; all other inventories of non-grain
    products purchased for resale are valued on the
    first-in,
    first-out
    (FIFO) and average cost methods.



Derivative
    Financial Instruments



Commodity
    Price Risk



The Company is exposed to price fluctuations on energy, grain
    and oilseed transactions due to fluctuations in the market value
    of inventories and fixed or partially fixed purchase and sales
    contracts. The Companys use of derivative instruments
    reduces the effects of price volatility, thereby protecting
    against adverse short-term price movements, while somewhat
    limiting the benefits of short-term price movements. However,
    fluctuations in inventory valuations may not be completely
    hedged, due in part to the absence of satisfactory hedging
    facilities for certain commodities and geographical areas, and
    in part to the Companys assessment of its exposure from
    expected price fluctuations.



The Company generally enters into opposite and offsetting
    positions using futures contracts or options to the extent
    practical, in order to arrive at a net commodity position within
    the formal position limits set by the Company and deemed prudent
    for each commodity. These contracts are purchased and sold
    through regulated

F-6




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
          Interest
    Rate Risk
     F-7




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Foreign
    Currency Risk
    Investments
      Property,
    Plant and Equipment
      and/or and/or
 F-8




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Goodwill
    and Other Intangible Assets
    Revenue
    Recognition
    Environmental
    Expenditures
    Income
    Taxes
    Comprehensive
    Income
    Use of
    Estimates
   F-9




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Recent
    Accounting Pronouncements
  157-2, FSP 157-2
  FSP 157-3, FSP 157-3 FSP 157-3 FSP 157-3
       F-10




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    .
  Reclassifications
    NOTE 2  Change
    in Accounting Principle  Turnarounds
    As of and For the Year Ended


As of and For the Year EndedAugust 31, 2007


August 31, 2006As


FSP AUG





As


FSP AUGPreviously


AIR-1


As


Previously


AIR-1


AsReported


Adjustment


Adjusted


Reported


Adjustment


Adjusted(Dollars in thousands)Consolidated Balance SheetsOther assets

$
147,965


$
60,787


$
208,752


$
223,474


$
51,583


$
275,057Accrued expenses


261,875



(6,244
)


255,631



249,268



(19,390
)


229,878Other liabilities


359,198



18,010



377,208



310,157



28,342



338,499Minority interests in subsidiaries


190,830



6,556



197,386



141,375



6,556



147,931Equities


2,432,990



42,465



2,475,455



2,017,391



36,075



2,053,466Consolidated Statements of OperationsCost of goods sold

$
16,139,691


$
(10,458
)

$
16,129,233


$
13,570,507


$
(30,222
)

$
13,540,285Minority interests














85,974



5,105



91,079Income from continuing operations before income taxes


786,933



10,458



797,391



538,999



25,117



564,116Income taxes


36,600



4,068



40,668



49,327



10,023



59,350Net income


750,333



6,390



756,723



490,297



15,094



505,391 F-11




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  As of and For the Year Ended


As of and For the Year EndedAugust 31, 2007


August 31, 2006As


FSP AUG





As


FSP AUGPreviously


AIR-1


As


Previously


AIR-1


AsReported


Adjustment


Adjusted


Reported


Adjustment


Adjusted(Dollars in thousands)Consolidated Statements of Cash FlowsOperating activitiesNet income

$
750,333


$
6,390


$
756,723


$
490,297


$
15,094


$
505,391Amortization of deferred major repair costs






23,250



23,250







14,716



14,716Minority interests














85,974



5,105



91,079Deferred taxes


46,800



4,068



50,868



78,300



10,023



88,323Changes in operating assets and liabilities:Other current assets and other assets


(84,116
)


2,210



(81,906
)


36,256



(1,704
)


34,552Accounts payable and accrued expenses


198,323



13,146



211,469



(87,896
)


(13,358
)


(101,254
)Other liabilities


23,746



(14,400
)


9,346



15,368



13,003



28,371Net cash provided by operating activities


372,622



34,664



407,286



454,942



42,879



497,821Investing activitiesExpenditures for major repairs






(34,664
)


(34,664
)






(42,879
)


(42,879
)Net cash used in investing activities


(495,291
)


(34,664
)


(529,955
)


(265,348
)


(42,879
)


(308,227
)   Note 3  Receivables
    2008



2007(Dollars in thousands)Trade

$
2,181,132



$
1,366,428Other


200,313




97,7832,381,445




1,464,211Less allowances for doubtful accounts


73,651




62,960$
2,307,794



$
1,401,251     2008


2007


2006(Dollars in millions)Africa

$
505


$
229


$
119Asia


3,000



1,130



904Europe


488



178



183North America, excluding U.S.


1,399



900



717South America


922



608



156$
6,314


$
3,045


$
2,079  F-12




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Note 4  Inventories
    2008


2007(Dollars in thousands)Grain and oilseed

$
918,514


$
928,567Energy


596,487



490,675Crop nutrients


399,986Feed and farm supplies


371,670



178,167Processed grain and oilseed


74,537



66,407Other


6,830



2,816$
2,368,024


$
1,666,632       Note 5  Investments
   2008


2007(Dollars in thousands)Cooperatives:Land OLakes, Inc.

$
40,542


$
41,061Ag Processing Inc.


18,799



20,416CoBank, ACB (CoBank)


13,851



12,659VeraSun Energy Corporation


74,338



138,474CF Industries Holdings, Inc.






101,986Joint ventures:Ventura Foods, LLC


156,394



134,079United Country Brands, LLC (Agriliance LLC)


147,449



182,834Horizon Milling, LLC


66,529



36,092Multigrain AG


65,573



23,082Cofina Financial, LLC


41,378



39,805TEMCO, LLC


26,969



11,957Horizon Milling G.P.


20,242



15,500Other


112,452



122,647$
784,516


$
880,592    F-13




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
           F-14




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    50-50
  true-up true-up
    (Dollars in thousands)Receivables

$
5,219Inventories


174,620Other current assets


256,390Investments


6,096Property, plant and equipment


29,682Other assets


11,717Customer advance payments


(206,252
)Accounts payable


(5,584
)Accrued expenses


(3,163
)Total net assets received

$
268,725   No. 02-16, (EITF 02-16).
 F-15




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    2008


2007(Dollars in thousands)Current assets

$
456,385


$
1,534,432Non-current assets


40,946



130,347Current liabilities


119,780



1,214,019Non-current liabilities


12,421



138,173   2008


2007


2006(Dollars in thousands)Net sales

$
1,070,892


$
4,049,088


$
3,739,632(Loss) earnings from operations


(8,143
)


116,584



76,052Net (loss) income


(15,903
)


58,701



52,268       Note 6  Property,
    Plant and Equipment
    2008


2007(Dollars in thousands)Land and land improvements

$
104,306


$
90,263Buildings


474,399



410,556Machinery and equipment


2,763,288



2,258,108Office and other


90,061



81,091Construction in progress


89,795



320,1013,521,849



3,160,119Less accumulated depreciation and amortization


1,573,544



1,431,948$
1,948,305


$
1,728,171      F-16




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Note 7  Discontinued
    Operations
      2006(Dollars in thousands)Marketing, general and administrative*

$
(1,168
)Interest, net


145Income tax expense


398Income from discontinued operations

$
625     *
    Includes a $1.6 million gain on disposition.  Note 8  Other
    Assets
    2008


2007(Dollars in thousands)Goodwill

$
3,804


$
3,804Customer lists, less accumulated amortization of $7,454 and
    $2,898, respectively


20,216



13,894Non-compete covenants, less accumulated amortization of $2,668
    and $1,826, respectively


3,265



3,201Trademarks and other intangible assets, less accumulated
    amortization of $17,215 and $7,249, respectively


25,918



15,823Prepaid pension and other benefits


64,023



101,073Capitalized major maintenance


53,303



60,787Notes receivable


12,356



5,874Other


7,073



4,296$
189,958


$
208,752      F-17




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Note 9  Notes
    Payable and Long-Term Debt
    Interest Rates atAugust 31, 2008

2008


2007(Dollars in thousands)Notes payable(a)(k)

2.43% to 3.74%

$
106,154


$
672,571Long-term debt:Revolving term loans from cooperative and other banks, payable
    in installments through 2009(b)(k)

3.96% to 7.13%

$
49,700


$
80,594Revolving term loans from cooperative and other banks, payable
    in equal installments beginning in 2013 through 2018(c)(k)

5.59%


150,000Private placement, payable in equal installments beginning in
    2013 through 2017(d)(k)

6.18%


400,000Private placement, payable in equal installments through
    2013(e)(k)

6.81%


187,500



225,000Private placement, payable in installments through 2018(f)(k)

4.96% to 5.60%


139,615



157,308Private placement, payable in equal installments beginning in
    2011 through 2015(g)(k)

5.25%


125,000



125,000Private placement, payable in equal installments through
    2011(h)(k)

7.43% to 7.90%


34,286



45,714Private placement, payable in its entirety in 2010(i)(k)

4.08%


15,000



15,000Private placement, payable in its entirety in 2011(i)(k)

4.39%


15,000



15,000Private placement, payable in equal installments beginning in
    2014 through 2018(i)(k)

5.78%


50,000Industrial revenue bonds, payable in its entirety in 2011

5.23%


3,925



3,925Other notes and contracts(j)

1.89% to 12.17%


24,829



20,780Total long-term debt




1,194,855



688,321Less current portion




118,636



98,977Long-term portion



$
1,076,219


$
589,344   2008


2007Weighted-average interest rates at August 31:Short-term debt


2.73%



6.50%Long-term debt


5.90%



6.03%      (a)
    
    The Company finances its working capital needs through
    short-term lines of credit with a syndication of domestic and
    international banks. One of these revolving lines of credit is a
    five-year $1.3 billion committed facility, with
    $75.0 million outstanding on August 31, 2008. During
    fiscal 2008, the Company increased its short-term borrowing
    capacity by establishing a
    364-day
    $500.0 million committed revolving line of credit, with no
    amount outstanding on August 31, 2008. In addition to these
    short-term lines of F-18




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  credit, the Company has a one-year committed credit facility
    dedicated to NCRA, with a syndication of banks in the amount of
    $15.0 million, with no amount outstanding on
    August 31, 2008. The Company also has a committed revolving
    line of credit dedicated to Provista in the amount of
    $25.0 million, with no amount outstanding on
    August 31, 2008. During fiscal 2008, our wholly-owned
    subsidiary, CHS Europe S.A., entered into uncommitted lines of
    credit to finance its normal trade grain transactions, of which
    $31.2 million was outstanding on August 31, 2008, and
    was collateralized by inventories and receivables. The Company
    has two commercial paper programs totaling up to
    $125.0 million with two banks participating in the
    five-year revolving credit facility. The commercial paper
    programs do not increase the committed borrowing capacity in
    that the Company is required to have at least an equal amount of
    undrawn capacity available on the five-year revolving facility
    as to the amount of commercial paper issued. On August 31,
    2008, there was no commercial paper outstanding.(b)
    
    The Company established a long-term credit agreement, which
    committed $200.0 million of long-term borrowing capacity to
    the Company through May 31, 1999, of which
    $164.0 million was drawn before the expiration date of that
    commitment. On August 31, 2008, $49.2 million was
    outstanding. NCRA term loans of $0.5 million are
    collateralized by NCRAs investment in CoBank.(c)
    
    In December 2007, the Company established a 10-year long-term
    credit agreement through a syndication of cooperative banks in
    the amount of $150.0 million.(d)
    
    In October 2007, the Company entered into a private placement
    with several insurance companies for long-term debt in the
    amount of $400.0 million.(e)
    
    In June 1998, the Company entered into a private placement with
    several insurance companies for long-term debt in the amount of
    $225.0 million.(f)
    
    In October 2002, the Company entered into a private placement
    with several insurance companies for long-term debt in the
    amount of $175.0 million.(g)
    
    In September 2004, the Company entered into a private placement
    with several insurance companies for long-term debt in the
    amount of $125.0 million.(h)
    
    In January 2001, the Company entered into a note purchase and
    private shelf agreement with Prudential Insurance Company. A
    long-term note was issued for $25.0 million and a
    subsequent note for $55.0 million was issued in March 2001.(i)
    
    In March 2004, the Company entered into a note purchase and
    private shelf agreement with Prudential Capital Group. In April
    2004, two long-term notes were issued for $15.0 million
    each. In April 2007, the agreement was amended with Prudential
    Investment Management, Inc. and several other participating
    insurance companies to expand the uncommitted facility from
    $70.0 million to $150.0 million. In
    February 2008, the Company borrowed $50.0 million
    under the shelf arrangement.(j)
    
    Other notes and contracts payable of $11.6 million are
    collateralized by property, plant and equipment, with a cost of
    $23.5 million, less accumulated depreciation of
    $7.0 million on August 31, 2008.(k)
    
    The debt is unsecured; however, restrictive covenants under
    various agreements have requirements for maintenance of minimum
    working capital levels and other financial ratios.   F-19




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        (Dollars in thousands)2009

$
118,6362010


83,3862011


112,3292012


95,1022013


181,085Thereafter


604,317$
1,194,855      2008


2007


2006(Dollars in thousands)Interest expense

$
90,364


$
51,811


$
50,562Interest income


13,904



20,713



9,257Interest, net

$
76,460


$
31,098


$
41,305   Note 10  Income
    Taxes
    2008


2007


2006(Dollars in thousands)Continuing operations:Current

$
45,527


$
(10,200
)

$
(28,973
)Deferred


15,578



42,068



91,123Valuation allowance


10,433



8,800



(2,800
)Income taxes from continuing operations


71,538



40,668



59,350Income taxes from discontinued operations










398Income taxes

$
71,538


$
40,668


$
59,748      F-20




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    2008


2007(Dollars in thousands)Deferred tax assets:Accrued expenses

$
81,554


$
81,653Postretirement health care and deferred compensation


78,732



65,339Tax credit carryforwards


51,306



50,402Loss carryforwards


286



6,427Other


15,095



15,169Total deferred tax assets


226,973



218,990Deferred tax liabilities:Pension


22,774



25,645Investments


17,722



133,018Major maintenance


15,148



32,411Property, plant and equipment


297,276



191,369Other


10,725



7,893Total deferred tax liabilities


363,645



390,336Deferred tax assets valuation reserve


(19,808
)


(9,375
)Net deferred tax liabilities

$
156,480


$
180,721         2008


2007


2006Statutory federal income tax rate


35.0
%


35.0
%


35.0
%State and local income taxes, net of federal income tax benefit


3.9



3.9



3.9Patronage earnings


(29.2
)


(27.1
)


(26.2
)Export activities at rates other than the U.S. statutory rate


(0.1
)


(1.6
)


(0.8
)Valuation allowance


1.2



1.1



(0.5
)Tax credits


(2.3
)


(3.6
)


(1.7
)Other


(0.3
)


(2.6
)


0.8Effective tax rate


8.2
%


5.1
%


10.5
%    F-21




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    2008(Dollars in thousands)Beginning balance

$
7,259Reductions for tax positions of prior years


(1,419
)Balance at August 31

$
5,840     Note 11  Equities
           F-22




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Note 12  Benefit
    Plans
      Qualified


Non-QualifiedPension Benefits


Pension Benefits


Other Benefits2008


2007


2008


2007


2008


2007(Dollars in thousands)Change in benefit obligation:Benefit obligation at beginning of period

$
346,319


$
328,125


$
35,644


$
23,381


$
28,001


$
28,315Service cost


15,387



14,360



1,246



1,023



1,175



957Interest cost


21,266



19,259



2,190



1,480



1,814



1,668Plan amendments






14,960







727Actuarial loss (gain)


3,493



(852
)


492



9,794



713



881Assumption change


(9,196
)


(5,401
)


(756
)


(37
)


(61
)


(1,482
)Special agreements










467







4,000Medicare D


















314



262Benefits paid


(23,135
)


(24,132
)


(1,093
)


(724
)


(1,578
)


(2,600
)Benefit obligation at end of measurement date

$
354,134


$
346,319


$
38,190


$
35,644


$
34,378


$
28,001Change in plan assets:Fair value of plan assets at beginning of period

$
382,431


$
345,860Actual (loss) income on plan assets


(18,045
)


45,826Company contributions


25,299



14,877


$
1,093


$
724


$
1,578


$
2,600Benefits paid


(23,135
)


(24,132
)


(1,093
)


(724
)


(1,578
)


(2,600
)Fair value of plan assets at end of measurement date

$
366,550


$
382,431


$



$



$



$
Funded status at end of measurement date

$
12,416


$
36,112


$
(38,190
)

$
(35,644
)

$
(34,378
)

$
(28,001
)Amounts recognized on balance sheet:Non-current assets

$
13,234


$
36,083Accrued benefit cost:Current liabilities









$
(1,397
)

$
(1,862
)

$
(2,412
)

$
(1,911
)Non-current liabilities


(818
)






(35,443
)


(33,119
)


(31,777
)


(25,828
)Ending balance

$
12,416


$
36,083


$
(36,840
)

$
(34,981
)

$
(34,189
)

$
(27,739
)Amounts recognized in accumulated other comprehensive income
    (pre-tax):Net transition obligation

















$
4,581


$
5,516Prior service cost (credit)

$
17,444


$
19,608


$
1,697


$
2,276



(724
)


(1,044
)Net loss (gain)


114,457



75,886



9,328



10,434



(786
)


(1,603
)Minority interest


(10,776
)


(7,191
)


(70
)


(53
)


(1,079
)


(1,226
)Ending balance

$
121,125


$
88,303


$
10,955


$
12,657


$
1,992


$
1,643    F-23




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Qualified


Non-QualifiedPension Benefits


Pension Benefits


Other Benefits2008


2007


2006


2008


2007


2006


2008


2007


2006(Dollars in thousands)Components of net periodic benefit cost:Service cost

$
15,387


$
14,360


$
14,892


$
1,246


$
1,023


$
2,195


$
1,175


$
957


$
1,024Interest cost


21,266



19,259



17,037



2,190



1,480



1,368



1,814



1,668



1,568Expected return on assets


(31,274
)


(29,171
)


(28,362
)Special agreements














467











4,000Prior service cost (credit) amortization


2,164



867



855



579



494



516



(320
)


(319
)


(305
)Actuarial loss (gain) amortization


4,887



5,766



7,513



841



77



210



(165
)


(231
)


17Transition amount amortization


























935



936



936Net periodic benefit cost

$
12,430


$
11,081


$
11,935


$
5,323


$
3,074


$
4,289


$
7,439


$
3,011


$
3,240Average assumptions:Discount rate


6.25%



6.25%



6.05%



6.25%



6.25%



6.05%



6.25%



6.25%



6.05%Expected return on plan assets


8.75%



8.75%



8.80%



N/A



N/A



N/A



N/A



N/A



N/ARate of compensation increase


4.50%



4.50%



4.50%



4.50%



4.50%



4.50%



4.50%



4.50%



4.50%     Qualified

Non-Qualified

OtherPension Benefits

Pension Benefits

Benefits(Dollars in thousands)Amortization of transition obligation

$



$



$
936Amortization of prior service cost (benefit)


2,115



546



(197
)Amortization of net actuarial loss (gain)


4,980



646



(166
)Minority interest


(618
)


(3
)


(82
)     1% Increase


1% Decrease(Dollars in thousands)Effect on total of service and interest cost components

$
260


$
(250
)Effect on postretirement benefit obligation


2,200



(2,000
)    F-24




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
       Qualified


Non-Qualified


Other BenefitsPension Benefits


Pension Benefits


Gross


Medicare D(Dollars in thousands)2009

$
24,332


$
1,397


$
2,412


$
2002010


26,290



1,975



2,632



2002011


27,412



9,483



2,845



2002012


29,886



1,476



3,040



2002013


32,332



5,235



3,192



2002014-2018


191,460



15,682



16,673



1,000     
    optimize the long-term returns on plan assets at an acceptable
    level of risk, and
    maintain broad diversification across asset classes and among
    investment managers, and focus on long-term return objectives.         F-25




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    2008


2007Cash


6.3
%


2.7
%Debt


29.6



29.7Equities


57.8



62.0Real estate


4.7



3.9Other


1.6



1.7Total


100.0
%


100.0
%       Pre-SFASNo. 158 with


SFAS No. 158


Post SFASAML Adjustments


Adoption Adjustments


No. 158(Dollars in thousands)Prepaid pension

$
131,322


$
(95,239
)

$
36,083Accrued pension liability


(47,663
)


(15,057
)


(62,720
)Intangible asset


291



(291
)Deferred tax asset


189



39,699



39,888Minority interest






8,469



8,469Accumulated other comprehensive income, net of tax


296



62,419



62,715Accumulated other comprehensive income,
    pre-tax


485



102,118



102,603   Note 13  Segment
    Reporting
       F-26




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
        Corporate


ReconcilingEnergy


Ag Business


Processing


and Other


Amounts


Total(Dollars in thousands)For the year ended August 31, 2008:Revenues

$
11,499,814


$
19,696,907


$
1,299,209


$
31,363


$
(359,832
)

$
32,167,461Cost of goods sold


11,027,459



19,088,079



1,240,944



(2,751
)


(359,832
)


30,993,899Gross profit


472,355



608,828



58,265



34,114







1,173,562Marketing, general and administrative


111,121



160,364



26,089



32,391







329,965Operating earnings


361,234



448,464



32,176



1,723







843,597(Gain) loss on investments


(35
)


(100,830
)


72,602



(930
)






(29,193
)Interest, net


(5,227
)


63,665



21,995



(3,973
)






76,460Equity income from investments


(5,054
)


(83,053
)


(56,615
)


(5,691
)






(150,413
)Minority interests


71,805



355















72,160Income (loss) from continuing operations before income taxes

$
299,745


$
568,327


$
(5,806
)

$
12,317


$



$
874,583Intersegment revenues

$
(322,522
)

$
(36,972
)

$
(338
)





$
359,832


$
Goodwill

$
3,654


$
150














$
3,804Capital expenditures

$
251,401


$
56,704


$
5,994


$
4,460






$
318,559Depreciation and amortization

$
107,949


$
50,933


$
15,902


$
6,479






$
181,263Total identifiable assets at August 31, 2008

$
3,216,852


$
4,172,950


$
748,989


$
633,187






$
8,771,978For the year ended August 31, 2007:Revenues

$
8,105,067


$
8,575,389


$
754,743


$
28,465


$
(247,672
)

$
17,215,992Cost of goods sold


7,264,180



8,388,476



726,510



(2,261
)


(247,672
)


16,129,233Gross profit


840,887



186,913



28,233



30,726







1,086,759Marketing, general and administrative


94,939



97,299



23,545



29,574







245,357Operating earnings


745,948



89,614



4,688



1,152







841,402Gain on investments






(5,348
)


(15,268
)










(20,616
)Interest, net


(6,106
)


28,550



14,783



(6,129
)






31,098Equity income from investments


(4,468
)


(51,830
)


(48,446
)


(4,941
)






(109,685
)Minority interests


143,230



(16
)














143,214Income from continuing operations before income taxes

$
613,292


$
118,258


$
53,619


$
12,222


$



$
797,391Intersegment revenues

$
(228,930
)

$
(18,372
)

$
(370
)





$
247,672


$
Goodwill

$
3,654


$
150














$
3,804Capital expenditures

$
313,246


$
44,020


$
12,092


$
3,942






$
373,300Depreciation and amortization

$
86,558


$
33,567


$
15,116


$
5,355






$
140,596Total identifiable assets at August 31, 2007

$
2,797,831


$
2,846,950


$
681,118


$
428,474






$
6,754,373 F-27




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Corporate


ReconcilingEnergy


Ag Business


Processing


and Other


Amounts


Total(Dollars in thousands)For the year ended August 31, 2006:Revenues

$
7,414,361


$
6,575,165


$
614,471


$
31,415


$
(251,577
)

$
14,383,835Cost of goods sold


6,804,454



6,401,527



588,732



(2,851
)


(251,577
)


13,540,285Gross profit


609,907



173,638



25,739



34,266







843,550Marketing, general and administrative


82,867



99,777



21,645



26,949







231,238Operating earnings


527,040



73,861



4,094



7,317







612,312Interest, net


6,534



23,559



11,096



116







41,305Equity income from investments


(3,840
)


(40,902
)


(35,504
)


(3,942
)






(84,188
)Minority interests


91,588



(509
)














91,079Income from continuing operations before income taxes

$
432,758


$
91,713


$
28,502


$
11,143


$



$
564,116Intersegment revenues

$
(242,430
)

$
(8,779
)

$
(368
)





$
251,577


$
Capital expenditures

$
175,231


$
44,542


$
13,313


$
1,906






$
234,992Depreciation and amortization

$
75,581


$
31,471


$
14,049


$
5,676






$
126,777   Note 14  Commitments
    and Contingencies
  Environmental
        Other
    Litigation and Claims
   F-28




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Grain
    Storage
    Guarantees
     F-29




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Guarantee/


Exposure onMaximum


August 31,


Nature of



Triggering

Recourse

Assets HeldEntities

Exposure


2008


Guarantee

Expiration Date

Event

Provisions

as Collateral(Dollars in thousands)Mountain Country, LLC

$
150


$
30


Obligations by Mountain Country , LLC under credit agreement

None stated, but may be terminated upon 90 days prior
    notice in regard to future obligations

Credit agreement default

Subrogation against Mountain Country, LLC

Some or all assets of borrower are held as collateral and
    should be sufficient to cover guarantee exposureMorgan County Investors, LLC

$
394



394


Obligations by Morgan County Investors, LLC under credit
    agreement

When obligations are paid in full, scheduled for year 2018

Credit agreement default

Subrogation against Morgan County Investors, LLC

Some or all assets of borrower are held as collateral and should
    be sufficient to cover guarantee exposureHorizon Milling, LLC

$
5,000






Indemnification and reimbursement of 24% of damages related to
    Horizon Milling, LLCs performance under a flour sales
    agreement

None stated, but may be terminated by any party upon
    90 days prior notice in regard to future obligations

Nonperformance under flour sales agreement

Subrogation against Horizon Milling, LLC

NoneTEMCO, LLC

$
35,000






Obligations by TEMCO under credit agreement

None stated

Credit agreement default

Subrogation against TEMCO, LLC

NoneTEMCO, LLC

$
1,000



1,000


Obligations by TEMCO under counterparty agreement

None stated, but may be terminated upon 5 days prior notice
    in regard to future obligations

Nonpayment

Subrogation against TEMCO, LLC

NoneThird parties



*


1,000


Surety for, or indemnification of surety for sales contracts
    between affiliates and sellers of grain under deferred payment
    contracts

Annual renewal on December 1 in regard to surety for one third
    party, otherwise none stated and may be terminated by the
    Company at any time in regard to future obligations

Nonpayment

Subrogation against affiliates

Some or all assets of borrower are held as collateral but might
    not be sufficient to cover guarantee exposureCofina Financial, LLC

$
17,502



14,861


Loans to our customers that are originated by Cofina and then
    sold to ProPartners, which is an affiliate of CoBank

None stated

Credit agreement default

Subrogation against borrower

Some or all assets of borrower are held as collateral but might
    not be sufficient to cover guarantee exposureCofina Financial, LLC

$
18,200



18,200


Loans made by Cofina to our customers

None stated

Credit agreement default

Subrogation against borrower

Some or all assets of borrower are held as collateral but might
    not be sufficient to cover guarantee exposureAgriliance LLC

$
5,674



5,674


Outstanding letter of credit from CoBank to Agriliance LLC

None stated

Default under letter of credit reimbursement agreement

Subrogation against borrower

NoneAgriliance LLC

$
500



500


Vehicle operating lease obligations of Agriliance LLC

None stated, but may be terminated upon 90 days prior
    notice in regard to future obligations

Lease agreement default

Subrogation against Agriliance LLC

NoneAg Business segment subsidiaries

$
5,295






Contribution obligations as a participating employer in the
    Co-op Retirement Plan

None stated

Nonpayment

None

None$
41,659     *
    
    The maximum exposure on any give date is equal to the actual
    guarantees extended as of that date, not to exceed
    $1.0 million. F-30




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   Lease
    Commitments
       Rail





EquipmentCars


Vehicles


and Other


Total(Dollars in thousands)2009

$
11,473


$
20,581


$
7,598


$
39,6522010


10,875



16,701



6,686



34,2622011


9,373



9,646



6,295



25,3142012


6,412



6,687



5,712



18,8112013


4,276



3,145



3,835



11,256Thereafter


10,685



559



11,789



23,033Total minimum future lease payments

$
53,094


$
57,319


$
41,915


$
152,328   Note 15  Supplemental
    Cash Flow and Other Information
    2008


2007


2006(Dollars in thousands)Net cash paid (received) during the period for:Interest

$
79,590


$
52,323


$
54,228Income taxes


11,226



(20,274
)


(23,724
)Other significant noncash investing and financing transactions:Capital equity certificates exchanged for preferred stock


46,364



35,899



23,824Capital equity certificates issued in exchange for Ag Business
    properties


4,680



10,132



11,064Accrual of dividends and equities payable


(325,039
)


(374,294
)


(249,774
)   Note 16  Related
    Party Transactions
    2008


2007(Dollars in thousands)Sales

$
3,451,365


$
1,639,689Purchases


1,248,436



1,176,462Receivables


105,038



50,733Payables


90,742



111,195  F-31




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##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Note 17  Comprehensive
    Income
   2008


2007


2006(Dollars in thousands)Net income

$
803,045


$
756,723


$
505,391Pension and other postretirement, net of tax (benefit) expense
    of ($11,272), ($759) and $282 in 2008, 2007 and 2006,
    respectively


(17,264
)


(1,193
)


444Unrealized net (loss) gain on available for sale investments,
    net of tax (benefit) expense of ($40,979), $41,722 and $1,138 in
    2008, 2007 and 2006, respectively


(64,366
)


65,533



1,787Interest rate hedges, net of tax expense (benefit) of $297,
    ($65) and $826 in 2008, 2007 and 2006, respectively


465



(102
)


1,298Energy derivative instruments qualified for hedge accounting,
    net of tax (benefit) expense of ($1,787) and $1,787 in 2007 and
    2006, respectively






(2,806
)


2,806Foreign currency translation adjustment, net of tax expense of
    $56, $588 and $1,142 in 2008, 2007 and 2006, respectively


87



921



1,796Other comprehensive (loss) income


(81,078
)


62,353



8,131Total comprehensive income

$
721,967


$
819,076


$
513,522     2008


2007(Dollars in thousands)Pension and other postretirement, net of tax benefit of $52,153
    and $40,881 in 2008 and 2007, respectively

$
(81,540
)

$
(64,276
)Unrealized net gain on available for sale investments, net of
    tax expense of $7,368 and $48,347 in 2008 and 2007, respectively


11,573



75,939Interest rate hedges, net of tax benefit of $1,101 and $1,397 in
    2008 and 2007, respectively


(1,729
)


(2,194
)Foreign currency translation adjustment, net of tax expense of
    $2,327 and $2,271 in 2008 and 2007, respectively


3,654



3,567Accumulated other comprehensive (loss) income

$
(68,042
)

$
13,036   F-32