##### Table of Contents





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,
    2010oro

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(State or other jurisdiction of
    incorporation or organization)

41-0251095(I.R.S. Employer
    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
    YES o     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


14Employees


16Membership in CHS and Authorized Capital


16Item 1A.

Risk Factors


19Item 1B.

Unresolved Staff Comments


25Item 2.

Properties


25Item 3.

Legal Proceedings


28Item 4.

(Removed and Reserved)


28PART II.Item 5.

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


28Item 6.

Selected Financial Data


29Item 7.

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


31Item 7A.

Quantitative and Qualitative Disclosures about
    Market Risk


54Item 8.

Financial Statements and Supplementary Data


56Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


57Item 9A.

Controls and Procedures


57Item 9B.

Other Information


58PART III.Item 10.

Directors, Executive Officers and Corporate
    Governance


58Board of Directors


58Executive Officers


63Section 16(a) Beneficial Ownership Reporting
    Compliance


64Code of Ethics


64Audit Committee Matters


65Item 11.

Executive Compensation


65Item 12.

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


84Item 13.

Certain Relationships and Related Transactions
    and Director Independence


85Item 14.

Principal Accounting Fees and Services


86PART IV.Item 15.

Exhibits and Financial Statement Schedules


88SUPPLEMENTAL INFORMATION


96SIGNATURES


97EX-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
%

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


45
%

Equity MethodCHS Europe S.A.

Grain merchandising in Europe


100
%

ConsolidatedCHS Ukraine, LLC

Grain procurement and merchandising in Ukraine


100
%

ConsolidatedCHS Vostok, LLC

Grain procurement and merchandising in Russia


100
%

ConsolidatedACG Trade S.A.

Grain procurement and merchandising in Russia


50
%

Equity MethodCHSINC Iberica S.L.

Grain merchandising in Spain


100
%

ConsolidatedCHS de Argentina

Grain merchandising in Argentina


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 and distributing


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


100
%

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




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##### Table of Contents



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




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Industry;
    Competition
    Regulation.
    Competition.
   4




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##### Table of Contents



Summary
    Operating Results
    2010


2009


2008(Dollars in thousands)Revenues

$
8,799,890


$
7,639,838


$
11,499,814Cost of goods sold


8,437,504



7,110,324



11,027,459Gross profit


362,386



529,514



472,355Marketing, general and administrative


123,834



125,104



111,121Operating earnings


238,552



404,410



361,234Gain on investments


(269
)


(15,748
)


(35
)Interest, net


9,939



5,483



(5,227
)Equity income from investments


(5,554
)


(4,044
)


(5,054
)Income before income taxes

$
234,436


$
418,719


$
371,550Intersegment revenues

$
(295,536
)

$
(251,626
)

$
(322,522
)Total identifiable assets  August 31

$
3,004,471


$
3,025,522


$
3,216,852  AG
    BUSINESS    Agronomy
  Overview
   5




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true-up true-up
    50-50
      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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##### Table of Contents



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




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Products
    and Services
    Sales
    and Marketing; Customers
   9




---



##### Table of Contents



Industry;
    Competition
  Regulation.
  Competition.
       10




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##### Table of Contents



Summary
    Operating Results
    2010


2009


2008(Dollars in thousands)Revenues

$
15,678,160


$
17,196,448


$
19,696,907Cost of goods sold


15,261,056



16,937,877



19,088,079Gross profit


417,104



258,571



608,828Marketing, general and administrative


173,766



158,395



160,364Operating earnings


243,338



100,176



448,464Gain on investments


(28,807
)


(2,285
)


(100,830
)Interest, net


28,033



46,995



63,665Equity income from investments


(25,173
)


(18,222
)


(83,053
)Income before income taxes

$
269,285


$
73,688


$
568,682Intersegment revenues

$
(19,259
)

$
(39,919
)

$
(36,972
)Total identifiable assets  August 31

$
3,583,341


$
2,987,394


$
4,172,950  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
    2010


2009


2008(Dollars in thousands)Revenues

$
1,061,654


$
1,142,636


$
1,299,209Cost of goods sold


1,018,731



1,099,177



1,240,944Gross profit


42,923



43,459



58,265Marketing, general and administrative


25,764



25,724



26,089Operating earnings


17,159



17,735



32,176Loss on investments






74,338



72,602Interest, net


19,605



21,841



21,995Equity income from investments


(77,159
)


(82,525
)


(56,615
)Income (loss) before income taxes

$
74,713


$
4,081


$
(5,806
)Intersegment revenues

$
(1,900
)

$
(2,759
)

$
(338
)Total identifiable assets  August 31

$
696,738


$
685,865


$
748,989  CORPORATE
    AND OTHER  Business
    Solutions
  Financial Services.
  Cofina Financial, LLC.
  Country Hedging, Inc.
  Ag States Group.
 PRICE
    RISK AND HEDGING   14




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over-the-counter
       15




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




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Patrons
    Equities
      Governance
   17




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##### Table of Contents



Membership
      Voting
    Rights
        Debt and
    Equity Instruments
    Distribution
    of Assets upon Dissolution; Merger and Consolidation
    Certain
    Antitakeover Measures
   18




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##### Table of Contents



Tax
    Treatment
          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, 2010, 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.
 19




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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;
    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.
   20




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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.
      Changing
    environmental and energy laws and regulation, including those
    related to climate change and Green House Gas (GHG)
    emissions, may result in increased operating costs and capital
    expenditures and may have an adverse effect on our business
    operations.
   21




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cap-and-trade
  cap-and-trade
  cap-and-trade
 22




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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; 23




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
    our inability to negotiate acceptable contracts with unionized
    workers in our operations could result in strikes or work
    stoppages;
    our corporate headquarters, the facilities we own, or the
    significant inventories that we carry could be damaged or
    destroyed by catastrophic events, extreme weather conditions or
    contamination;
    someone may accidentally or intentionally introduce a computer
    virus to our information technology systems; 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.
   24




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##### Table of Contents



Operating
    results from our agronomy business could be volatile and are
    dependent upon certain factors outside of our control.
    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   25




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##### Table of Contents



Energy
    Refinery

Laurel, MontanaPropane terminals

Glenwood, Minnesota; 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 and 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

66 locations in Idaho, Minnesota, Montana, North Dakota, South
    Dakota, Washington and Wyoming, 20 of which are leased. We own
    an additional 6 locations which we do not operate, but are on
    capital leases to othersLubricant plants/warehouses

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

McPherson, KansasPetroleum terminals/storage

2 locations in Iowa and KansasPipeline

McPherson, Kansas to Council Bluffs, IowaJayhawk Pipeline, LLC

Throughout Kansas, with branches in Nebraska, Oklahoma and TexasJayhawk stations

26 locations located in Kansas, Nebraska and OklahomaOsage Pipeline (50% owned by NCRA)

Oklahoma to KansasKaw Pipeline (67% owned by NCRA)

Throughout Kansas   Ag
    Business
    Crop
    Nutrients
    
 26




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##### Table of Contents



Country
    Operations
    Grain
    Marketing
    
    
  Processing
    Oilseed
    Processing
    Wheat
    Milling
    
 27




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##### Table of Contents



Corporate
    and Other
  Business
    Solutions
    
  Corporate
    Headquarters
  33-acre
    ITEM 3.
    LEGAL
    PROCEEDINGS      ITEM 4.
    (Removed
    and Reserved) PART II.  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES       28




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ITEM 6.
    SELECTED
    FINANCIAL DATA    Summary
    Consolidated Financial Data
  2010


2009


2008


2007


2006(Dollars in thousands)Income Statement Data:Revenues

$
25,267,931


$
25,729,916


$
32,167,461


$
17,215,992


$
14,383,835Cost of goods sold


24,397,410



24,849,901



30,993,899



16,129,233



13,540,285Gross profit


870,521



880,015



1,173,562



1,086,759



843,550Marketing, general and administrative


366,582



355,299



329,965



245,357



231,238Operating earnings


503,939



524,716



843,597



841,402



612,312(Gain) loss on investments


(29,433
)


56,305



(29,193
)


(20,616
)Interest, net


58,324



70,487



76,460



31,098



41,305Equity income from investments


(108,787
)


(105,754
)


(150,413
)


(109,685
)


(84,188
)Income from continuing operations before income taxes


583,835



503,678



946,743



940,605



655,195Income taxes


48,438



63,304



71,861



37,784



59,350Income from continuing operations


535,397



440,374



874,882



902,821



595,845Income on discontinued operations, net of taxes


















(625
)Net income


535,397



440,374



874,882



902,821



596,470Net income attributable to noncontrolling interests


33,238



58,967



71,837



146,098



91,079Net income attributable to CHS Inc.

$
502,159


$
381,407


$
803,045


$
756,723


$
505,391Balance Sheet Data (August 31):Working capital

$
1,603,994


$
1,626,352


$
1,738,600


$
821,878


$
848,344Net property, plant and equipment


2,253,071



2,099,325



1,948,305



1,728,171



1,476,239Total assets


8,666,128



7,869,845



8,771,978



6,754,373



4,994,166Long-term debt, including current maturities


986,241



1,071,953



1,194,855



688,321



744,745Total equities


3,604,451



3,333,164



3,161,418



2,672,841



2,201,397  29




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##### Table of Contents



Summary
    Financial Data By Business Segment
  Energy


Ag Business2010


2009


2008


2010


2009


2008(Dollars in thousands)Revenues

$
8,799,890


$
7,639,838


$
11,499,814


$
15,678,160


$
17,196,448


$
19,696,907Cost of goods sold


8,437,504



7,110,324



11,027,459



15,261,056



16,937,877



19,088,079Gross profit


362,386



529,514



472,355



417,104



258,571



608,828Marketing, general and administrative


123,834



125,104



111,121



173,766



158,395



160,364Operating earnings


238,552



404,410



361,234



243,338



100,176



448,464Gain on investments


(269
)


(15,748
)


(35
)


(28,807
)


(2,285
)


(100,830
)Interest, net


9,939



5,483



(5,227
)


28,033



46,995



63,665Equity income from investments


(5,554
)


(4,044
)


(5,054
)


(25,173
)


(18,222
)


(83,053
)Income before income taxes

$
234,436


$
418,719


$
371,550


$
269,285


$
73,688


$
568,682Intersegment revenues

$
(295,536
)

$
(251,626
)

$
(322,522
)

$
(19,259
)

$
(39,919
)

$
(36,972
)Total identifiable assets  August 31

$
3,004,471


$
3,025,522


$
3,216,852


$
3,583,341


$
2,987,394


$
4,172,950   Processing


Corporate and Other2010


2009


2008


2010


2009


2008(Dollars in thousands)Revenues

$
1,061,654


$
1,142,636


$
1,299,209


$
44,922


$
45,298


$
31,363Cost of goods sold


1,018,731



1,099,177



1,240,944



(3,186
)


(3,173
)


(2,751
)Gross profit


42,923



43,459



58,265



48,108



48,471



34,114Marketing, general and administrative


25,764



25,724



26,089



43,218



46,076



32,391Operating earnings


17,159



17,735



32,176



4,890



2,395



1,723Loss (gain) on investments






74,338



72,602



(357
)






(930
)Interest, net


19,605



21,841



21,995



747



(3,832
)


(3,973
)Equity income from investments


(77,159
)


(82,525
)


(56,615
)


(901
)


(963
)


(5,691
)Income (loss) before income taxes

$
74,713


$
4,081


$
(5,806
)

$
5,401


$
7,190


$
12,317Intersegment revenues

$
(1,900
)

$
(2,759
)

$
(338
)Total identifiable assets  August 31

$
696,738


$
685,865


$
748,989


$
1,381,578


$
1,171,064


$
633,187  30




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##### Table of Contents



ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  Overview
  Form 10-K. Form 10-K.
    ®
           31




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860-10-65-1, 860-10-65-1
  ASC 860-10-65-1
  Results
    of Operations
  Comparison
    of the years ended August 31, 2010 and 2009
  General.
   32




---



##### Table of Contents



lower-of-cost
      Net Income attributable to CHS
    Inc.
  Revenues.
 33




---



##### Table of Contents



34




---



##### Table of Contents



Cost of Goods Sold.
      lower-of-cost
      Marketing, General and
    Administrative.
  (Gain) Loss on Investments.
 35




---



##### Table of Contents



Interest, net.
  Equity Income from Investments.
          Income Taxes.
 36




---



##### Table of Contents



Noncontrolling interests.
  Comparison
    of the years ended August 31, 2009 and 2008
  General.
    lower-of-cost
 37




---



##### Table of Contents



Net Income attributable to CHS
    Inc.
  Revenues.
     38




---



##### Table of Contents



Cost of Goods Sold.
   39




---



##### Table of Contents



lower-of-cost
      Marketing, General and
    Administrative.
  (Gain) Loss on Investments.
    Interest, net.
 40




---



##### Table of Contents



Equity Income from Investments.
          Income Taxes.
 41




---



##### Table of Contents



Noncontrolling interests.
  Liquidity
    and Capital Resources
    364-day
    Cash
    Flows from Operations
  Form 10-K,
     42




---



##### Table of Contents



43




---



##### Table of Contents



Cash
    Flows from Investing Activities
           44




---



##### Table of Contents



50-50
   45




---



##### Table of Contents



Cash
    Flows from Financing Activities
  Working
    Capital Financing:
  364-day
   46




---



##### Table of Contents



Cofina
    Financial Financing:
        Long-term
    Debt Financing:
      2011

$
112,5032012


92,4812013


101,1892014


155,0202015


154,977Thereafter


370,071$
986,241    47




---



##### Table of Contents



48




---



##### Table of Contents



Other
    Financing:
               49




---



##### Table of Contents



Off
    Balance Sheet Financing Arrangements
  Lease
    Commitments:
        Total(Dollars in millions)2011

$
42.82012


33.42013


24.22014


15.72015


10.9Thereafter


17.5Total minimum future lease payments

$
144.5   Guarantees:
    Debt:
    Cofina
    Financial:
   50




---



##### Table of Contents



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)

$
262,090


$
262,090Long-term debt(1)


986,241



112,503


$
193,670


$
309,997


$
370,071Interest payments(2)


236,747



57,479



94,903



57,825



26,540Operating leases


144,558



42,846



57,648



26,552



17,512Purchase obligations(3)


5,686,205



3,420,317



2,248,416



13,300



4,172Other liabilities(4)


336,589







97,610



91,440



147,539Total obligations

$
7,652,430


$
3,895,235


$
2,692,247


$
499,114


$
565,834     (1)
    
    Included on our Consolidated Balance Sheet.(2)
    
    Based on interest rates and long-term debt balances as of
    August 31, 2010.(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 at
    August 31, 2010, $1,561.5 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 at
    August 31, 2010, in the amount of $475.5 million, the
    timing of the payments of $138.9 million of such
    liabilities cannot be determined.  Critical
    Accounting Policies
    Inventory
    Valuation and Reserves
  last-in, first-in,
 51




---



##### Table of Contents



Derivative
    Financial Instruments
  over-the-counter
  Pension
    and Other Postretirement Benefits
    Deferred
    Tax Assets and Uncertain Tax Positions
     52




---



##### Table of Contents



Long-Lived
    Assets
      and/or and/or
  Effect of
    Inflation and Foreign Currency Transactions
    Recent
    Accounting Pronouncements
  ASC 860-10-65-3, ASC 860-10-65-3
  ASC 860-10-65-2, ASC 860-10-65-2 ASC 860-10-65-2 ASC 860-10-65-2
  No. 2010-06, No. 2010-06
 53




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##### Table of Contents



No. 2010-06
  No. 2010-20, 2010-20 2010-20
  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  COMMODITY
    PRICE RISK
    over-the-counter
 54




---



##### Table of Contents



INTEREST
    RATE RISK
   55




---



##### Table of Contents



Expected
    Maturity Date
  2011


2012


2013


2014


2015


Thereafter


Total


Fair Value(Dollars in thousands)LiabilitiesVariable rate miscellaneous short-term notes payable

$
29,776






















$
29,776


$
29,776Average interest rate


2.2
%






















2.2
%Variable rate Cofina Financial short-term notes payable

$
232,314






















$
232,314


$
232,314Average interest rate


1.8
%






















1.8
%Fixed rate long-term debt

$
112,503


$
92,481


$
101,189


$
155,020


$
154,977


$
370,071


$
986,241


$
1,020,927Average interest rate


5.9
%


5.9
%


5.9
%


5.9
%


5.9
%


6.0
%


5.9
%Interest Rate DerivativesVariable to fixed notes payable interest rate swap

$
150,000






















$
150,000


$
349Average pay rate


3.00
%Average receive rate(a)


0.28
%Variable to fixed Cofina Financial notes payable interest rate
    swaps

$
16,793


$
16,560


$
10,521


$
9,054


$
6,466


$
2,662


$
62,056


$
878Average pay rate(b)


range



range



range



range



range



rangeAverage receive rate(a)


0.28
%


0.28
%


0.28
%


0.28
%


0.28
%


0.28
%     (a)
    
    One month London Interbank Offered Rate (LIBOR) at
    August 31, 2010(b)
    
    Swaps expiring in fiscal 2011 through fiscal 2018 (15 total)
    with a range of rates from 1.00% to 5.23%  FOREIGN
    CURRENCY RISK
    ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  page F-1.
 56




---



##### Table of Contents



Regulation S-K
  November 30,


February 28,


May 31,


August 31,2009


2010


2010


2010(Unaudited)(Dollars in thousands)Revenues

$
6,195,241


$
5,878,493


$
6,575,978


$
6,618,219Gross profit


202,661



166,725



251,978



249,157Income before income taxes


138,109



93,120



181,478



171,128Net income


122,535



86,159



159,495



167,208Net income attributable to CHS Inc.


119,950



82,668



145,449



154,092   November 30,


February 28,


May 31,


August 31,2008


2009


2009


2009Revenues

$
7,733,919


$
5,177,069


$
6,163,119


$
6,655,809Gross profit


320,507



214,977



158,268



186,263Income before income taxes


178,338



115,618



90,798



118,924Net income


159,407



101,597



76,572



102,798Net income attributable to CHS Inc.


137,251



82,280



64,569



97,307   ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    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
 57




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

Age


Region


SinceBruce Anderson


58



3



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


60



8



200643970 Road 758 
    Lexington, NE 68850Robert Bass


56



5



1994E 6391 Bass Road 
    Reedsburg, WI 53959David Bielenberg


61



6



200916425 Herigstad Road NE
    Silverton, OR 97381 58




---



##### Table of Contents



DirectorName and Address

Age


Region


SinceDennis Carlson


49



3



20013255  50th Street 
    Mandan, ND 58554Curt Eischens


58



1



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


55



3



20032851  77th Street NE 
    Barton, ND 58384Jerry Hasnedl


64



1



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


51



4



200642046  257th Street 
    Alexandria, SD 57311Randy Knecht


60



4



200140193  112th Street 
    Houghton, SD 57449Greg Kruger


51



5



2008N 49494 County Road Y 
    Eleva, WI 54738Michael Mulcahey


62



1



20038109  360th Avenue 
    Waseca, MN 56093Richard Owen


56



2



19991591 Hawarden Road 
    Geraldine, MT 59446Steve Riegel


58



8



200612748 Ridge Road 
    Ford, KS 67842Daniel Schurr


45



7



20063009 Wisconsin Street 
    LeClaire, IA 52753Michael Toelle


48



1



19925085 St. Anthony Drive 
    Browns Valley, MN 56219     Bruce Anderson, secretary-treasurer
 59




---



##### Table of Contents



Donald Anthony
  Robert Bass, first vice chairman
  David Bielenberg 2002-2006.
  Dennis Carlson
  Curt Eischens, second vice chairman
  Steve Fritel
  Jerry Hasnedl, secretary-treasurer
  David Kayser
 60




---



##### Table of Contents



Randy Knecht, assistant secretary-treasurer
  Greg Kruger 80-cow
  Michael Mulcahey
  Richard Owen
  Steve Riegel
  Daniel Schurr
  Michael Toelle, chairman
 61




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##### Table of Contents



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)

Mike ToelleRegion 3 (North Dakota)

Dennis CarlsonRegion 4 (South Dakota)

Randy KnechtRegion 5 (Connecticut, Delaware, Illinois, Indiana, Kentucky,
    Maine, Maryland, Massachusetts, Michigan, New Hampshire, New
    Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont,
    Virginia, West Virginia, Wisconsin)

Bob BassRegion 8 (Colorado, Nebraska, Kansas, New Mexico, Oklahoma,
    Texas)

Steve RiegelRegion 8 (Colorado, Nebraska, Kansas, New Mexico, Oklahoma,
    Texas)

Open *     *
    
    New position created through the transfer of a directorship from
    Region 1 to Region 8.   62




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##### Table of Contents



EXECUTIVE
    OFFICERS    Name

Age

PositionJohn D. Johnson (1)


62


President and Chief Executive OfficerJay Debertin


50


Executive Vice President and Chief Operating Officer, ProcessingPatrick Kluempke


62


Executive Vice President  Corporate AdministrationThomas D. Larson (2)


62


Executive Vice President  Business SolutionsMark Palmquist


53


Executive Vice President and Chief Operating Officer, Ag BusinessJohn Schmitz (2)


59


Executive Vice President and Chief Financial OfficerLeon E. Westbrock (2)


63


Executive Vice President and Chief Operating Officer, Energy     (1)
    
    We announced in a Current Report on
    Form 8-K
    filed on June 21, 2010, that Mr. Johnson is retiring
    effective December 31, 2010.(2)
    
    We announced in a Current Report on
    Form 8-K
    filed on October 6, 2010, that Mr. Larsons and
    Mr. Westbrocks retirements are effective
    October 29, 2010, and that Mr. Schmitz is retiring
    effective December 31, 2010.  John D. Johnson,
  Jay Debertin,
  Patrick Kluempke,
  Thomas D. Larson,
 63




---



##### Table of Contents



Mark Palmquist,
  John Schmitz,
  Leon E. Westbrock,
  Section 16(a)
    Beneficial Ownership Reporting Compliance      Code of
    Ethics  Regulation S-K
      (651) 355-6000
 64




---



##### 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 65




---



##### Table of Contents




    Obtaining applicable and available survey data of similar sized
    companies  
    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
    day-to-day
 66




---



##### Table of Contents



Components
    of Compensation
  line-of-sight
  Pay Element

Definition of Pay Element

Purpose of Pay ElementBase Salary

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

   Provides the fundamental element of
    compensation based on competitive market practice and internal
    equity considerationsAnnual Variable Pay

Broad-based employee short-term performance based variable pay
    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 performance based variable pay
    program for achieving predetermined return on equity performance
    levels

   Provide a direct link between employee
    pay and CHSs profitability
       Encourage proper expense control and
    containment 67




---



##### Table of Contents



Pay Element

Definition of Pay Element

Purpose of Pay ElementLong-Term Incentive Plans

Long-term performance based variable pay 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 managementRetirement Benefits

Retirement benefits under the qualified retirement benefits 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:
     68




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##### Table of Contents



Annual
    Variable Pay:
      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%          69




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##### Table of Contents



John D. Johnson

$
1,800,000John Schmitz

$
749,980Leon E. Westbrock

$
763,146Mark Palmquist

$
823,200Jay Debertin

$
630,000   Profit Sharing:
    ProfitEquates to Net

SharingReturn On Equity

Income for Fiscal 2010

Award14.0%

$432.6 Million


5
%12.0%

$370.8 Million


4
%10.0%

$309.0 Million


3
%9.0%

$278.1 Million


2
%8.0%

$247.2 Million


1
%     ProfitEquates to Net

SharingReturn On Equity

Income for Fiscal 2011

Award14.0%

$467.0 Million


5
%12.0%

$400.3 Million


4
%10.0%

$333.6 Million


3
%9.0%

$300.2 Million


2
%8.0%

$266.9 Million


1
%   Long-Term
    Incentive Plans:
      2008-2010
  28-month
 70




---



##### Table of Contents



2008-2010
  John D. Johnson

$
1,800,000John Schmitz

$
736,914Leon E. Westbrock

$
814,800Mark Palmquist

$
804,860Jay Debertin

$
617,074   Retirement
    Benefits:
    
    CHS Inc. Pension Plan
    CHS Inc. 401(k) Plan
    CHS Inc. Supplemental Executive Retirement Plan
    CHS Inc. Deferred Compensation Plan  CHS Inc.
    Pension Plan
    pay credits investment credits
   71




---



##### Table of Contents



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
%   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.
    401(k) Plan
   72




---



##### Table of Contents



CHS Inc.
    Supplemental Executive Retirement Plan and CHS Inc. Deferred
    Compensation Plan
                Health &
    Welfare Benefits:
   73




---



##### Table of Contents



Medical
    Plans
    Dental,
    Vision, and Hearing Plan
    Life,
    AD&D and Dependent Life Insurance
    Short-
    and Long-term Disability
    Flexible
    Spending Accounts/Health Savings Accounts
    Travel
    Assistance Program
    Additional
    Benefits and Perquisites:
   74




---



##### 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)(6)

Compensation(3)(4)

TotalJohn D. Johnson


2010


$
900,000


$
3,600,000


$
2,001,285


$
251,423


$
6,752,708President &


2009



900,000



3,415,680



1,666,170



262,086



6,243,936Chief Executive Officer


2008



900,000



3,557,000



1,161,571



279,193



5,897,764John Schmitz


2010



535,700



1,486,894



438,452



115,595



2,576,641Executive Vice President &


2009



535,700



1,394,997



362,542



118,721



2,411,960Chief Financial Officer


2008



507,700



1,403,220



221,711



114,197



2,246,828Leon E. Westbrock


2010



588,000



1,577,946



1,816,363



151,712



4,134,021Executive Vice President


2009



588,000



1,588,346



1,653,176



138,083



3,967,6052008



570,700



1,576,074



1,106,259



135,199



3,388,232Mark Palmquist


2010



588,000



1,637,060



568,334



129,081



2,922,475Executive Vice President


2009



588,000



1,433,448



393,335



145,841



2,560,6242008



548,700



1,516,574



186,642



156,707



2,408,623Jay Debertin


2010



450,000



1,247,074



458,099



112,656



2,267,829Executive Vice President


2009



450,000



1,202,513



309,297



166,720



2,128,5302008



422,300



1,163,586



115,784



102,039



1,803,709     (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 nonqualified 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 2010:
    Mr. Johnson- $294,417; Mr. Schmitz- $43,836;
    Mr. Westbrock- $46,090; Mr. Palmquist- $32,787; and
    Mr. Debertin- $70,292, and above market earnings in 2009:
    Mr. Johnson- $350,846; Mr. Schmitz- $58,418;
    Mr. Westbrock- $63,714; Mr. Palmquist- $48,082; and
    Mr. Debertin- $83,791, and 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.(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 $483,286 in
    2010, $517,976 in 2009, and $585,890 in 2008.(6)
    
    The 2008 Change in Pension value is for the period July 1,
    2007 to June 30, 2008. The 2009 Change in Pension Value is
    an annualized value based on the
    14-month
    period from June 30, 2008 to August 31, 2009. The
    total change in value is annualized by multiplying by 12/14. The
    2010 Change in Pension Value is for the period September 1,
    2009 to August 31, 2010.  Material
    Terms of Named Executive Officer Employment Agreement
  Form 10-K.
   75




---



##### Table of Contents



Explanation
    of Ratio of Salary and Bonus to Total Compensation
    2010
    Grants of Plan-Based Awards
    Estimated Future Payouts Under Non-Equity Incentive Plan
    Awards
  Name

Grant Date

Threshold

Target

MaximumJohn D. Johnson


9-1-09
(1)

$
180,000


$
900,000


$
1,800,0009-1-09
(2)


180,000



900,000



1,800,000John Schmitz


9-1-09
(1)


74,998



374,990



749,9809-1-09
(2)


74,998



374,990



749,980Leon E. Westbrock


9-1-09
(1)


82,320



411,600



823,2009-1-09
(2)


82,320



411,600



823,200Mark Palmquist


9-1-09
(1)


82,320



411,600



823,2009-1-09
(2)


82,320



411,600



823,200Jay Debertin


9-1-09
(1)


63,000



315,000



630,0009-1-09
(2)


63,000



315,000



630,000     (1)
    
    Represents range of possible awards under our 2010 Annual
    Variable Pay Plan. The actual amount of the award earned for
    fiscal 2010 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
    2010-2012
    performance period. Goals are based on achieving a three-year
    ROE of 8%, 10% and 14%. Awards are earned over a three-year
    period and vest over an additional
    28-month
    period.  Grants
    Based Award Table Material Terms of Awards Disclosed in
    Table
   76




---



##### 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


33.8333


$
753,441


$
0SERP


33.8333



5,588,846



0Special SERP


33.8333



3,640,873



0John Schmitz(1)

CHS Inc. Pension Plan


35.9167



707,391



0SERP


35.9167



1,402,370



0Leon E. Westbrock(1)

CHS Inc. Pension Plan


29.1667



825,709



0SERP


29.1667



8,644,927



0Mark Palmquist

CHS Inc. Pension Plan


31.0000



625,870



0SERP


31.0000



1,591,044



0Jay Debertin

CHS Inc. Pension Plan


26.2500



477,843



0SERP


26.2500



830,726



0     (1)
    
    An executive is eligible for early retirement in both the CHS
    Inc. Pension Plan and the Supplemental Executive Retirement Plan.      Form 10-K
  
    Discount rate of 4.50%;
    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.       77




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Year

Amount2003-2007

$
263,6632008


306,1632009


350,4282010


395,481                 2 3 1 3
  2 3 1 3
 78




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##### Table of Contents



2010
    Nonqualified Deferred Compensation Table
  Executive


Registrant





Aggregate


Aggregate BalanceContributions in


Contributions in


Aggregate Earnings (Loss)


Withdrawals/


at Last Fiscal YearName

Last Fiscal Year(3)


Last Fiscal Year(1)


in Last Fiscal Year(4)


Distributions


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

$
0


$
2,600,553


$
1,026,895


$
2,305,216


$
19,334,473John Schmitz


0



797,824



251,294



0



4,523,625Leon E. Westbrock


0



893,212



264,414



0



4,775,071Mark Palmquist


0



863,113



179,115



839,824



2,978,757Jay Debertin


483,286



665,870



389,668



0



6,614,273     (1)
    
    Deferrals under the Deferred Compensation Plan are made by the
    Named Executive Officer. Amounts include 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 fund. 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 Section 409A under the Internal
    Revenue Code. Payments under the Deferred Compensation 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 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.  Post
    Employment
  12-month
 79




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##### Table of Contents



John D. Johnson

$
900,000John Schmitz

$
535,700Leon E. Westbrock

$
588,000Mark Palmquist

$
588,000Jay Debertin

$
450,000         Director
    Compensation
  Overview
    Director
    Retirement and Healthcare Benefits
       80




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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
     81




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##### Table of Contents



Director
    Compensation Table
  Change in Pension Valueand NonqualifiedFees Earned or


Deferred Compensation


All OtherName(1)

Paid in Cash(4)


Earnings(2)


Compensation(3)


TotalBruce Anderson

$
64,500


$
106,051


$
11,206


$
181,757Donald Anthony


61,200



47,275



11,206



119,681Robert Bass


71,700



91,567



12,042



175,309David Bielenberg


46,200



34,096



7,762



88,058Dennis Carlson(5)


66,300



42,972



12,004



121,276Curt Eischens


60,900



82,301



12,590



155,791Steven Fritel


67,200



58,899



14,479



140,578Jerry Hasnedl(5)


70,800



21,950



11,206



103,956David Kayser


60,750



38,078



19,226



118,054James Kile


23,300



41,220



17,300



81,820Randy Knecht


68,550



73,101



11,206



152,857Greg Kruger


66,300



22,577



250



89,127Michael Mulcahey


62,400



47,824



11,206



121,430Richard Owen


68,700



81,353



12,470



162,523Steve Riegel


67,800



45,933



12,221



125,954Daniel Schurr


60,900



31,746



19,789



112,435Duane Stenzel(5)


19,200







9,966



29,166Michael Toelle


81,000



80,613



19,226



180,839     (1)
    
    Change in board membership includes: Mr. Kile retired from
    the Board effective December 3, 2009, and
    Mr. Bielenberg was elected to the Board, effective
    December 4, 2009. Mr. Stenzel passed away
    December 12, 2009, and his vacant position has transferred
    from Region 1 to Region 8.(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 nonqualified 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, $443; Mr. Toelle,
    $118; Mr. Fritel, $52; Mr. Hasnedl, $172;
    Mr. Knecht, $116; and Mr. Mulcahey, $29.(3)
    
    All other compensation includes health and life insurance
    premiums, conference and registration fees, meals and related
    spouse expenses for trips made with a director on CHS business.
    Total amounts vary primarily due to the variations in life and
    health insurance premiums which 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, $10,956; Mr. Anthony, $10,956;
    Mr. Bass, $11,792; Mr. Bielenberg, $7,512;
    Mr. Carlson, $10,956; Mr. Eischens, $12,340;
    Mr. Fritel, $13,632; Mr. Hasnedl, $10,956;
    Mr. Kayser, $18,976; Mr. Kile, $15,396;
    Mr. Knecht, $10,956; Mr. Mulcahey, $10,956;
    Mr. Owen, $10,956; Mr. Riegel, $10,956;
    Mr. Schurr, $18,976; Mr. Stenzel, $9,716; and
    Mr. Toelle, $18,976;(4)
    
    Of this amount, the following directors defer the succeeding
    amounts to the Deferred Compensation Plan: Mr. Bass,
    $3,200; Mr. Hasnedl, $6,000; Mr. Mulcahey, $6,000; and
    Mr. Toelle, $6,000.(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. 82




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##### Table of Contents



Compensation
    Committee Interlocks and Insider Participation
      Report
    of the Corporate Responsibility Committee
  Regulation S-K Form 10-K.
        Disclosure
    for Item 402(s) of Regulation
    S-K.
  Regulation S-K. Regulation S-K.
 83




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##### Table of Contents



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


520 shares
(2)


*Bruce Anderson


351 shares



*Donald Anthony


100 shares



*Robert Bass


120 shares



*David Bielenberg


9,130 shares



*Dennis Carlson


710 shares
(2)


*Curt Eischens


120 shares



*Steve Fritel


1,655 shares



*Jerry Hasnedl


975 shares



*David Kayser


0 shares



*Randy Knecht


863 shares
(2)


*Gregory Kruger


0 shares



*Michael Mulcahey


100 shares



*Richard Owen


240 shares



*Steve Riegel


210 shares



*Daniel Schurr


0 shares



*Named Executive Officers:John D. Johnson


7,220 shares
(2)


*Jay Debertin


1,200 shares
(2)


*Patrick Kluempke


2,800 shares



*Thomas D. Larson


1,813 shares
(2)


*Mark Palmquist


283 shares



*John Schmitz


1,400 shares
(2)


*Leon E. Westbrock


3,000 shares



*Directors and executive officers as a group


32,810 shares



*     (1)
    
    As of August 31, 2010, there were 12,272,003 shares of
    8% Cumulative Redeemable Preferred Stock outstanding.(2)
    
    Includes shares held by spouse, children and Individual
    Retirement Accounts (IRA).*
    
    Less than 1%.     84




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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

$
221,003


$
10,407Donald Anthony


200,032Curt Eischens


703,315



15,549Steve Fritel


264,648



6,682Jerry Hasnedl


883,145



24,044David Kayser


1,085,868



8,149Michael Mulcahey


227,403



3,388Michael Toelle


1,101,382



72,159   Review,
    Approval or Ratification of Related Party Transaction
      Director
    Independence
   85




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##### Table of Contents



Bruce Anderson

Donald AnthonyRobert Bass

David BielenbergDennis Carlson

Steve FritelJerry Hasnedl

David KayserGreg Kruger

Randy KnechtRichard Owen

Michael MulcaheyDaniel Schurr

Steve RiegelMichael Toelle     Independence
    of CEO and Board Chairman Positions
    Board of
    Directors Role in Risk Oversight
  and/or
  ITEM 14.
    PRINCIPAL
    ACCOUNTING FEES AND SERVICES    (Dollars inthousands)Description of Fees

2010


2009Audit Fees(1)

$
2,357


$
1,609Audit  Related Fees(2)


102



90Tax Fees(3)


24



24All Other Fees






Total

$
2,483


$
1,723     (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. 86




---



##### Table of Contents



(2)
    
    Includes fees for employee benefit plan audits.(3)
    
    Includes fees related to tax compliance, tax advice and tax
    planning.     87




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##### Table of Contents



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


F-1Consolidated Balance Sheets as of August 31, 2010 and 2009


F-2Consolidated Statements of Operations for the years ended
    August 31, 2010, 2009 and 2008


F-3Consolidated Statements of Equities and Comprehensive Income for
    the years ended August 31, 2010, 2009 and 2008


F-4Consolidated Statements of Cash Flows for the years ended
    August 31, 2010, 2009 and 2008


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 Accounts2010

$
99,025


$
6,688






$
(6,178
)

$
99,5352009


73,651



32,019







(6,645
)


99,0252008


62,960



20,691







(10,000
)


73,651  88




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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.
   
     89




---



##### 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
    January 11, 2007).3
.1A

Amended Article III, Section 3(b) of Bylaws of CHS
    Inc. (Incorporated by reference to our Current Report on
    Form 8-K,
    filed May 5, 2010).3
.2

Bylaws of CHS Inc. (Incorporated by reference to our
    Registration Statement on
    Form S-1
    (File
    No. 333-156255),
    filed December 17, 2008).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

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

CHS Inc. Supplemental Executive Retirement Plan (2010
    Restatement). (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended May 31, 2010, filed
    July 8, 2010).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). 90




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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

CHS Inc. Nonemployee Director Retirement Plan. (Incorporated by
    reference to our
    Form 10-Q
    for the quarterly period ended May 31, 2010, filed
    July 8, 2010).10
.10

Trust Under the CHS Inc. Nonemployee Director Retirement
    Plan. (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended May 31, 2010, filed
    July 8, 2010).10
.11

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
.11A

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
.12

2006 Second Amended and Restated Credit Agreement (Revolving
    Loan) by and between CHS Inc. and the Syndication Parties dated
    as of June 2, 1010. (Incorporated by reference to our
    Current Report on
    Form 8-K,
    filed June 3, 2010).10
.13

2010 Credit Agreement (Revolving Loan) by and between CHS Inc.
    and the Syndication Parties dated as of June 2, 2010.
    (Incorporated by reference to our Current Report on
    Form 8-K,
    filed June 3, 2010).10
.14

$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
.14A

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
.15

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
.15A

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
.16

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
.17

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
.17A

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
.17B

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
.17C

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
.17D

Sixth 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. 333-156255),
    filed December 17, 2008).10
.17E

Seventh Amendment to 2003 Amended and Restated Credit Agreement
    between National Cooperative Refinery Association and the
    Syndication Parties (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2009, filed
    January 11, 2010). 91




---



##### Table of Contents



10
.18

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
.18A

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
.18B

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
.19

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
.20

Deferred Compensation Plan. (Incorporated by reference to our
    Registration Statement on
    Form S-8
    (File
    No. 333-121161),
    filed December 10, 2004).10
.20A

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
.20B

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
.20C

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
.20D

Fourth Amendment to CHS Inc. Deferred Compensation Plan.
    (Incorporated by reference to our
    Form 10-K
    for the year ended August 31, 2008, filed November 21,
    2008).10
.21

New Plan Participants 2008 Plan Agreement and Election Form for
    the CHS Inc. Deferred Compensation Plan (Incorporated by
    reference to our
    Form 10-K
    for the year ended August 31, 2009, filed
    November 10, 2009).10
.22

Beneficiary Designation Form for the CHS Inc. Deferred
    Compensation Plan (Incorporated by reference to our
    Form 10-K
    for the year ended August 31, 2009, filed
    November 10, 2009).10
.23

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
.24

CHS Inc. Deferred Compensation Plan Appendix B to
    Prospectus dated October 28, 2008 (Incorporated by
    reference to our
    Form 10-K
    for the year ended August 31, 2009, filed
    November 10, 2009).10
.25

New Plan Participants (Board of Directors) 2009 Plan Agreement
    and Election Form for the CHS Inc. Deferred Compensation Plan
    (Incorporated by reference to our
    Form 10-K
    for the year ended August 31, 2009, filed
    November 10, 2009).10
.26

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
.27

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
.28

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
.29

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
.30

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). 92




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10
.31

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
.32

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
.33

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
.34

$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
.34A

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
.34B

Second Amendment to $150 Million Term Loan Credit Agreement by
    and between CHS Inc., CoBank, ACB and the Syndication Parties
    dated as of June 2, 2010 (Incorporated by reference to our
    Current Report on
    Form 8-K,
    filed June 3, 2010).10
.35

$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
.36

$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
.37

$70 Million Uncommitted Transactional Facility by and between
    CHS Europe S.A. and BNP Paribas dated July 17, 2008
    (Incorporated by reference to our
    Form 10-K
    for the year ended August 31, 2008, filed November 21,
    2008).10
.38

$50 Million Private Shelf Agreement by and between CHS Inc. and
    John Hancock Life Insurance Company dated as of August 11,
    2008 (Incorporated by reference to our
    Form 10-K
    for the year ended August 31, 2008, filed November 21,
    2008).10
.39

Base Indenture dated August 10, 2005 between Cofina
    Funding, LLC as Issuer and U.S. Bank National Association as
    Trustee (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.40

Amendment No. 1 to Base Indenture dated as of
    November 18, 2005 by and among Cofina Funding, LLC (the
    Issuer), Cofina Financial, LLC (the
    Servicer), Bank Hapoalim B.M. (the Funding
    Agent) and U.S. Bank National Association, as Trustee
    (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.41

Lockbox Agreement dated August 10, 2005 between Cofina
    Financial, LLC and M&I Marshall & Isley Bank
    (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.42

Purchase and Sale Agreement dated as of August 10, 2005
    between Cofina Funding, LLC, as Purchaser and Cofina Financial,
    LLC, as Seller (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.43

Custodian Agreement dated August 10, 2005 between Cofina
    Funding, LLC, as Issuer; U.S. Bank National Association, as
    Trustee; and U.S. Bank National Association, as Custodian
    (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.44

Servicing Agreement dated as of August 10, 2005 among
    Cofina Funding, LLC, as Issuer; Cofina Financial, LLC, as
    Servicer; and U.S. Bank National Association, as Trustee
    (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009). 93




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10
.45

Omnibus Amendment and Agreement dated as of August 30, 2005
    by and among Cofina Funding, LLC (the Issuer);
    Cofina Financial, LLC (the Servicer), Cenex Finance
    Association, Inc. (the Guarantor), Bank Hapoalim
    B.M. (the Funding Agent) and U.S. Bank National
    Association, as Trustee and as Custodian (Incorporated by
    reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.46

Series 2005-A
    Supplement dated as of August 10, 2005 (to Base Indenture
    dated as of August 10, 2005) between Cofina Funding,
    LLC, as Issuer, and U.S. Bank National Association, as Trustee
    (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.47

Note Purchase Agreement dated as of August 10, 2005 among
    Cofina Funding, LLC, as Issuer; Bank Hapoalim B.M. as Funding
    Agent; and the Financial Institutions from time to time parties
    thereto (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.48

Series 2005-B
    Supplement dated as of November 18, 2005 (to Base Indenture
    dated as of August 10, 2005) between Cofina Funding,
    LLC, as Issuer, and U.S. Bank National Association, as Trustee
    (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.49

Note Purchase Agreement dated as of November 18, 2005 among
    Cofina Funding, LLC, as Issuer; Venus Funding Corporation, as
    the Conduit Purchaser; Bank Hapoalim, B.M., as Funding Agent for
    the Purchasers; and the Financial Institutions from time to time
    parties thereto (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.50

First Amendment to Note Purchase Agreement dated as of
    November 6, 2008 among Cofina Funding, LLC (the
    Issuer); Venus Funding Corporation (the
    Conduit Purchaser); Bank Hapoalim, B.M., as Funding
    Agent and as a Committed Purchaser (Incorporated by reference to
    our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.51

Omnibus Amendment and Agreement dated as of May 11, 2007
    among Cofina Funding, LLC (the Issuer); Cofina
    Financial, LLC (the Servicer), Bank Hapoalim B.M.
    (the Funding Agent); and U.S. Bank National
    Association as Trustee and as Custodian (Incorporated by
    reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.52

Omnibus Amendment and Agreement No. 2 dated as of
    October 1, 2007 among Cofina Funding, LLC (the
    Issuer); Cofina Financial, LLC (the
    Servicer), Bank Hapoalim B.M. (the Funding
    Agent); and U.S. Bank National Association as Trustee and
    as Custodian (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.53

Omnibus Amendment and Agreement No. 3 dated as of
    May 16, 2008 among Cofina Funding, LLC (the
    Issuer); Cofina Financial, LLC (the
    Servicer), Bank Hapoalim B.M. (the Funding
    Agent); Venus Funding Corporation (the Conduit
    Purchaser) and U.S. Bank National Association as Trustee
    and as Custodian (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.54

Series 2006-A
    Supplement dated as of February 21, 2006 (to Base Indenture
    dated as of August 10, 2005) between Cofina Funding,
    LLC, as Issuer, and U.S. Bank National Association, as Trustee
    (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.55

Note Purchase Agreement dated as of February 21, 2006 among
    Cofina Funding, LLC, as Issuer; Venus Funding Corporation, as
    the Conduit Purchaser; Bank Hapoalim, B.M., as Funding Agent for
    the Purchasers; and the Financial Institutions from time to time
    parties thereto (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.56

First Amendment to Note Purchase Agreement dated as of
    February 20, 2007 among Cofina Funding, LLC (the
    Issuer); Venus Funding Corporation (the
    Conduit Purchaser); Bank Hapoalim, B.M. (the
    Funding Agent); and the Committed Purchasers party
    thereto. (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009). 94




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##### Table of Contents



10
.57

Second Amendment to Note Purchase Agreement dated as of
    February 19, 2008 among Cofina Funding, LLC (the
    Issuer); Venus Funding Corporation (the
    Conduit Purchaser); Bank Hapoalim, B.M. (the
    Funding Agent); and the Committed Purchasers party
    thereto. (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.58

Series 2006-B
    Supplement dated as of May 16, 2006 (to Base Indenture
    dated as of August 10, 2005) between Cofina Funding,
    LLC, as Issuer, and U.S. Bank National Association, as Trustee
    (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.59

Note Purchase Agreement dated as of May 16, 2006 among
    Cofina Funding, LLC, as Issuer; Voyager Funding Corporation, as
    the Conduit Purchaser; Bank Hapoalim, B.M., as Funding Agent for
    the Purchasers; and the Financial Institutions from time to time
    parties thereto (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.60

First Amendment to Note Purchase Agreement dated as of
    May 15, 2007 among Cofina Funding, LLC (the
    Issuer); Voyager Funding Corporation (the
    Conduit Purchaser); Bank Hapoalim, B.M. (the
    Funding Agent); and the Committed Purchasers party
    thereto (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.61

Second Amendment to Note Purchase Agreement dated as of
    May 13, 2008 among Cofina Funding, LLC (the
    Issuer); Voyager Funding Corporation (the
    Conduit Purchaser); Bank Hapoalim, B.M. (the
    Funding Agent); and the Committed Purchasers party
    thereto (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.62

Series 2008-A
    Supplement dated as of November 21, 2008 (to Base Indenture
    dated as of August 10, 2005) between Cofina Funding,
    LLC, as Issuer, and U.S. Bank National Association, as Trustee
    (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.63

Note Purchase Agreement dated as of November 21, 2008 among
    Cofina Funding, LLC, as Issuer; Victory Receivables Corporation,
    as the Conduit Purchaser; The Bank of Tokyo-Mitsubishi UFJ,
    Ltd., New York Branch, as Funding Agent for the Purchasers; and
    the Financial Institutions from time to time parties thereto
    (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.64

Amendment No. 1 to Note Purchase Agreement
    (Series 2008-A)
    dated February 25, 2009, by and among Cofina Funding, LLC
    as the Issuer; Victory Receivables Corporation, as the Conduit
    Purchaser; and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York
    Branch, as the Funding Agent and as a Committed Purchaser
    (Incorporated by reference to our Current Report on
    Form 8-K,
    filed March 2, 2009).10
.65

Amendment No. 2 to Note Purchase Agreement
    (Series 2008-A)
    dated November 20, 2009, by and among Cofina Funding, LLC
    as the Issuer; Victory Receivables Corporation, as the Conduit
    Purchaser; and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York
    Branch, as the Funding Agent and as a Committed Purchaser
    (Incorporated by reference to our Registration Statement on
    Form S-1
    (File
    No. 333-163608),
    filed December 9, 2009).10
.66

Amended and Restated Loan Origination and Participation
    Agreement dated as of October 31, 2006 by and among AgStar
    Financial Services, PCA d/b/a ProPartners Financial; CHS Inc.;
    and Cofina Financial, LLC (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.67

Amendment dated December 11, 2006 to Amended and Restated
    Loan Origination and Participation Agreement by and among AgStar
    Financial Services, PCA d/b/a ProPartners Financial; CHS Inc.;
    and Cofina Financial, LLC (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).10
.68

Amendment dated January 5, 2007 to Amended and Restated
    Loan Origination and Participation Agreement by and among AgStar
    Financial Services, PCA d/b/a ProPartners Financial; CHS Inc.;
    and Cofina Financial, LLC (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009). 95




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##### Table of Contents



10
.69

Amendment dated December 12, 2007 to Amended and Restated
    Loan Origination and Participation Agreement by and among AgStar
    Financial Services, PCA d/b/a ProPartners Financial; CHS Inc.;
    and Cofina Financial, LLC (Incorporated by reference to our
    Form 10-Q
    for the quarterly period ended November 30, 2008, filed
    January 13, 2009).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.(*)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   96




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##### 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*

DirectorDavid
    Bielenberg*

DirectorDennis
    Carlson*

DirectorCurt
    Eischens*

DirectorSteve
    Fritel*

Director 97




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##### Table of Contents



Signature

TitleJerry
    Hasnedl*

DirectorDavid
    Kayser*

DirectorRandy
    Knecht*

DirectorGreg
    Kruger*

DirectorMichael
    Mulcahey*

DirectorRichard
    Owen*

DirectorSteve
    Riegel*

DirectorDan
    Schurr*

Director*By

/s/  John
    D. JohnsonJohn
    D. JohnsonAttorney-in-fact  98




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##### Table of Contents



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




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##### Table of Contents



Consolidated
    Financial Statements
 CONSOLIDATED
    BALANCE SHEETS
  August 312010


2009(Dollars in thousands)ASSETSCurrent assets:Cash and cash equivalents

$
394,663


$
772,599Receivables


1,908,068



1,827,749Inventories


1,961,376



1,526,280Derivative assets


246,621



171,340Other current assets


805,741



447,655Total current assets


5,316,469



4,745,623Investments


719,392



727,925Property, plant and equipment


2,253,071



2,099,325Other assets


377,196



296,972Total assets

$
8,666,128


$
7,869,845LIABILITIES AND EQUITIESCurrent liabilities:Notes payable

$
262,090


$
246,872Current portion of long-term debt


112,503



83,492Customer credit balances


423,571



274,343Customer advance payments


435,224



320,688Checks and drafts outstanding


134,250



86,845Accounts payable


1,472,145



1,289,139Derivative liabilities


286,018



306,116Accrued expenses


376,239



308,720Dividends and equities payable


210,435



203,056Total current liabilities


3,712,475



3,119,271Long-term debt


873,738



988,461Other liabilities


475,464



428,949Commitments and contingenciesEquities:Equity certificates


2,401,514



2,214,824Preferred stock


319,368



282,694Accumulated other comprehensive loss


(205,267
)


(156,270
)Capital reserves


820,049



749,054Total CHS Inc. equities


3,335,664



3,090,302Noncontrolling interests


268,787



242,862Total equities


3,604,451



3,333,164Total liabilities and equities

$
8,666,128


$
7,869,845     F-2




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##### Table of Contents



Consolidated
    Financial Statements
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
  For the Years Ended August 312010


2009


2008(Dollars in thousands)Revenues

$
25,267,931


$
25,729,916


$
32,167,461Cost of goods sold


24,397,410



24,849,901



30,993,899Gross profit


870,521



880,015



1,173,562Marketing, general and administrative


366,582



355,299



329,965Operating earnings


503,939



524,716



843,597(Gain) loss on investments


(29,433
)


56,305



(29,193
)Interest, net


58,324



70,487



76,460Equity income from investments


(108,787
)


(105,754
)


(150,413
)Income before income taxes


583,835



503,678



946,743Income taxes


48,438



63,304



71,861Net income


535,397



440,374



874,882Net income attributable to noncontrolling interests


33,238



58,967



71,837Net income attributable to CHS Inc.

$
502,159


$
381,407


$
803,045     F-3




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##### Table of Contents



Consolidated
    Financial Statements
 CONSOLIDATED
    STATEMENTS OF EQUITIES AND COMPREHENSIVE INCOME
  For the Years Ended August 31, 2010, 2009 and 2008Equity Certificates





AccumulatedCapital


Nonpatronage








OtherEquity


Equity


Patronage


Preferred


Comprehensive


Capital


Noncontrolling


TotalCertificates


Certificates


Refunds


Stock


Income (Loss)


Reserves


Interests


Equities(Dollars in thousands)Balances, September 1, 2007

$
1,265,051


$
26,646


$
357,500


$
186,411


$
13,036


$
626,811


$
197,386


$
2,672,841Dividends 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
)Distributions to noncontrolling interests


























(63,123
)


(63,123
)Changes in dividends and equities payable


























6,080



6,080Other, net


(2,057
)


(804
)














412



(4,395
)


(6,844
)Comprehensive income:Net income










652,000











151,045



71,837



874,882Other comprehensive loss


















(81,078
)






(2,053
)


(83,131
)Total comprehensive income






























791,751Dividends and equities payable


(93,823
)






(228,200
)










(3,016
)






(325,039
)Balances, August 31, 2008


1,587,779



25,342



423,800



232,775



(68,042
)


754,032



205,732



3,161,418Dividends and equity retirement determination


93,823







228,200











3,016







325,039Patronage distribution


421,289







(652,000
)










3,101







(227,610
)Equities retired


(49,291
)


(361
)






















(49,652
)Capital equity certificates exchanged for preferred stock


(49,944
)










49,944







(130
)






(130
)Equities issued


19,594



























19,594Preferred stock dividends






















(20,024
)






(20,024
)Distributions to noncontrolling interests


























(21,139
)


(21,139
)Changes in dividends and equities payable


























2,747



2,747Adoption of retirement plan measurement date change






















(2,603
)






(2,603
)Other, net


(324
)


(186
)






(25
)






414



2,960



2,839Comprehensive income:Net (loss) income


(60,000
)






426,500











14,907



58,967



440,374Other comprehensive loss


















(88,228
)






(6,405
)


(94,633
)Total comprehensive income






























345,741Dividends and equities payable


(50,122
)






(149,275
)










(3,659
)






(203,056
)Balances, August 31, 2009


1,912,804



24,795



277,225



282,694



(156,270
)


749,054



242,862



3,333,164Dividends and equity retirement determination


50,122







149,275











3,659







203,056Patronage distribution


284,128







(426,500
)










(11,522
)






(153,894
)Equities retired


(22,732
)


(403
)






















(23,135
)Capital equity certificates exchanged for preferred stock


(36,674
)










36,674







(142
)






(142
)Equities issued


616



























616Preferred stock dividends






















(23,248
)






(23,248
)Distributions to noncontrolling interests


























(4,870
)


(4,870
)Changes in dividends and equities payable


























(1,743
)


(1,743
)Other, net


(1,479
)


181















680



2,025



1,407Comprehensive income:Net income










396,500











105,659



33,238



535,397Other comprehensive loss


















(48,997
)






(2,725
)


(51,722
)Total comprehensive income






























483,675Dividends and equities payable


(67,569
)






(138,775
)










(4,091
)






(210,435
)Balances, August 31, 2010

$
2,119,216


$
24,573


$
257,725


$
319,368


$
(205,267
)

$
820,049


$
268,787


$
3,604,451     F-4




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##### Table of Contents



Consolidated
    Financial Statements
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  For the Years Ended August 312010


2009


2008(Dollars in thousands)Cash flows from operating activities:Net income including noncontrolling interests

$
535,397


$
440,374


$
874,882Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


202,922



196,350



181,263Amortization of deferred major repair costs


18,532



24,999



29,146Income from equity investments


(108,787
)


(105,754
)


(150,413
)Distributions from equity investments


89,689



80,403



110,013Noncash patronage dividends received


(9,918
)


(9,717
)


(4,083
)Gain on sale of property, plant and equipment


(5,094
)


(3,176
)


(5,668
)(Gain) loss on investments


(29,433
)


56,305



(29,193
)Deferred taxes


39,507



43,976



26,011Other, net


1,597



2,466



719Changes in operating assets and liabilities:Receivables


(123,630
)


692,540



(832,146
)Inventories


(426,328
)


895,882



(517,515
)Derivative assets


(73,597
)


198,163



(122,421
)Other current assets and other assets


(355,848
)


186,217



(98,625
)Customer credit balances


149,228



47,946



113,501Customer advance payments


114,032



(328,854
)


275,386Accounts payable and accrued expenses


221,776



(664,160
)


827,997Derivative liabilities


(25,740
)


32,525



96,382Other liabilities


(64,344
)


(51,708
)


30,152Net cash provided by operating activities


149,961



1,734,777



805,388Cash flows from investing activities:Acquisition of property, plant and equipment


(324,262
)


(315,505
)


(318,559
)Proceeds from disposition of property, plant and equipment


10,139



10,769



9,336Expenditures for major repairs


(7,554
)


(1,771
)


(21,662
)Investments


(38,062
)


(120,181
)


(370,248
)Investments redeemed


119,331



39,787



43,046Proceeds from sale of investments






41,822



122,075Joint venture distribution transaction, net






850



(4,737
)Changes in notes receivable


(41,925
)


123,307



(67,119
)Business acquisitions


(6,307
)


(76,364
)


(47,001
)Acquisition of intangibles


(1,014
)


(2,431
)


(3,399
)Other investing activities, net


65



9,273



(5,469
)Net cash used in investing activities


(289,589
)


(290,444
)


(663,737
)Cash flows from financing activities:Changes in notes payable


15,217



(251,225
)


(565,022
)Long-term debt borrowings










600,000Principal payments on long-term debt


(84,792
)


(118,864
)


(99,479
)Payments for bank fees on debt


(10,296
)


(1,584
)


(3,486
)Changes in checks and drafts outstanding


47,280



(119,301
)


61,110Distributions to noncontrolling interests


(4,870
)


(21,139
)


(63,123
)Preferred stock dividends paid


(23,248
)


(20,024
)


(16,288
)Retirements of equities


(23,135
)


(49,652
)


(81,795
)Cash patronage dividends paid


(153,894
)


(227,610
)


(195,004
)Other financing activities, net


952



370



(110
)Net cash used in financing activities


(236,786
)


(809,029
)


(363,197
)Effect of exchange rate changes on cash and cash equivalents


(1,522
)


755



374Net (decrease) increase in cash and cash equivalents


(377,936
)


636,059



(221,172
)Cash and cash equivalents at beginning of period


772,599



136,540



357,712Cash and cash equivalents at end of period

$
394,663


$
772,599


$
136,540     F-5




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  NOTES
  Note
    1
    Summary
    of Significant Accounting Policies  Organization
    Basis
    of Presentation and Reclassifications
      860-10-65-1, ASC 860-10-65-1
  ASC 860-10-65-1
  Cash
    Equivalents
    Inventories
   F-6




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  last-in, first-in,
  Derivative
    Financial Instruments and Hedging Activities
      over-the-counter
    2010


2009Purchase


Sales


Purchase


SalesContracts


Contracts


Contracts


Contracts(Units in thousands)Grain and oilseed  bushels


747,334



1,039,363



591,639



715,914Energy products  barrels


8,633



10,156



8,879



12,456Crop nutrients  tons


1,257



1,215



933



1,016Ocean and barge freight  metric tons


1,385



279



3,493



3,316     2010


2009(Dollars in thousands)Derivative Assets:Commodity and freight derivatives

$
461,580


$
296,416Derivative Liabilities:Commodity and freight derivatives

$
495,569


$
426,281Foreign exchange derivatives


222Interest rate derivatives


1,227



4,911$
497,018


$
431,192  F-7




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2010(Dollars in thousands)Derivative Liabilities:Commodity and freight derivatives

$
3,959   year-to-date
  Location ofGain (Loss)

2010(Dollars in thousands)Commodity and freight derivatives

Cost of goods sold

$
95,876Foreign exchange derivatives

Cost of goods sold


(675
)Interest rate derivatives

Interest, net


(430
)$
94,771     Commodity
    and Freight Contracts:
       F-8




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Interest
    Rate Contracts:
   F-9




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Foreign
    Exchange Contracts:
    Investments
    Property,
    Plant and Equipment
      and/or and/or
 F-10




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Goodwill
    and Other Intangible Assets
      Revenue
    Recognition
    Environmental
    Expenditures
    Income
    Taxes
   F-11




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Comprehensive
    Income
    Use of
    Estimates
    Recent
    Accounting Pronouncements
  ASC 860-10-65-3, ASC 860-10-65-3
  ASC 860-10-65-2, ASC 860-10-65-2 ASC 860-10-65-2 ASC 860-10-65-2
  No. 2010-06, No. 2010-06 ASU No. 2010-06
  No. 2010-20, 2010-20 2010-20
 F-12




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note
    2  Receivables
    2010


2009(Dollars in thousands)Trade accounts receivable

$
1,543,530


$
1,482,921Cofina Financial notes receivable


340,303



254,419Other


123,770



189,4342,007,603



1,926,774Less allowances and reserves


99,535



99,025$
1,908,068


$
1,827,749     Note
    3  Inventories
    2010


2009(Dollars in thousands)Grain and oilseed

$
983,846


$
638,622Energy


515,930



496,114Crop nutrients


135,526



114,832Feed and farm supplies


242,482



198,440Processed grain and oilseed


74,064



69,344Other


9,528



8,928$
1,961,376


$
1,526,280    F-13




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note
    4  Investments
    2010


2009(Dollars in thousands)Joint ventures:Ventura Foods, LLC

$
262,550


$
245,525Multigrain AG


148,528



141,179Horizon Milling, LLC


69,873



56,999TEMCO, LLC


29,128



27,181Horizon Milling G.P.


20,166



19,137United Country Brands, LLC (Agriliance LLC)


18,357



80,436Cooperatives:Land OLakes, Inc.


48,854



45,747Ag Processing Inc.


18,245



18,594CoBank, ACB


15,704



19,891Other


87,987



73,236$
719,392


$
727,925     2010

2009(Dollars in thousands)Current assets

$
512,554


$
441,406Non-current assets


459,346



464,356Current liabilities


166,408



141,844Non-current liabilities


308,795



303,665   2010


2009


2008(Dollars in thousands)Net sales

$
1,954,289


$
2,055,768


$
2,120,332Gross profit


259,388



269,269



162,756Net earnings


95,480



125,174



31,090Earnings attributable to CHS Inc.


47,740



62,587



15,545    F-14




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    true-up true-up
    50-50
     2010

2009(Dollars in thousands)Current assets

$
1,254,966


$
1,167,072Non-current assets


881,998



801,867Current liabilities


765,393



928,070Non-current liabilities


491,643



190,167   2010

2009

2008(Dollars in thousands)Net sales

$
7,212,848


$
6,748,412


$
9,732,635Gross profit


356,708



306,158



521,228Net earnings


150,798



128,807



313,176Earnings attributable to CHS Inc.


50,731



45,728



117,758    F-15




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      available-for-sale
     F-16




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note
    5  Property, Plant and Equipment
    2010


2009(Dollars in thousands)Land and land improvements

$
118,337


$
110,635Buildings


499,346



497,956Machinery and equipment


3,072,866



2,879,984Office and other


93,099



94,429Construction in progress


359,933



243,9294,143,581



3,826,933Less accumulated depreciation and amortization


1,890,510



1,727,608$
2,253,071


$
2,099,325       Note
    6  Other Assets
     2010


2009(Dollars in thousands)Goodwill

$
23,038


$
17,346Customer lists, less accumulated amortization of $18,666 and
    $12,336, respectively


19,392



22,689Non-compete covenants, less accumulated amortization of $4,701
    and $3,173, respectively


4,950



6,785Trademarks and other intangible assets, less accumulated
    amortization of $16,489 and $17,291, respectively


17,794



20,862Notes receivable


152,140



133,243Long-term receivable


63,072Prepaid pension and other benefits


57,729



52,934Capitalized major maintenance


19,097



30,075Other


19,984



13,038$
377,196


$
296,972      F-17




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Balance atBeginning

Cost





Balance atof Year

Deferred

Amortization

Write-Offs

End of Year(Dollars in thousands)2010

$
30,075


$
7,554


$
(18,532
)





$
19,0972009


53,303



1,771



(24,999
)






30,0752008


60,787



21,662



(29,146
)






53,303  F-18




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note
    7  Notes Payable and Long-Term Debt
    Interest Rates atAugust 31, 2010

2010


2009(Dollars in thousands)Notes payable(a)(j)

1.00% to 8.50%

$
29,776


$
19,183Cofina Financial notes payable(k)

0.85% to 2.29%


232,314



227,689$
262,090


$
246,872Long-term debt:Revolving term loans from cooperative and other banks, payable
    in equal installments beginning in 2013 through 2018(b)(j)

5.59%

$
150,000


$
150,000Private placement, payable in equal installments beginning in
    2014 through 2018(c)(j)

6.18%


400,000



400,000Private placement, payable in equal installments through
    2013(d)(j)

6.81%


112,500



150,000Private placement, payable in installments through 2018(e)(j)

4.96% to 5.60%


104,231



121,923Private placement, payable in equal installments beginning in
    2011 through 2015(f)(j)

5.25%


125,000



125,000Private placement, payable in equal installments through
    2011(g)(j)

7.43% to 7.90%


11,428



22,857Private placement, payable in its entirety in 2010(h)(j)

4.08%






15,000Private placement, payable in its entirety in 2011(h)(j)

4.39%


15,000



15,000Private placement, payable in equal installments beginning in
    2014 through 2018(h)(j)

5.78%


50,000



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

5.23%


3,925



3,925Other notes and contracts(i)

1.89% to 12.17%


14,157



18,248Total long-term debt




986,241



1,071,953Less current portion




112,503



83,492Long-term portion



$
873,738


$
988,461   2010


2009Weighted-average interest rates at August 31:Notes payable


2.24%



2.84%Cofina Financial notes payable


1.75%



1.71%Long-term debt


5.92%



5.93%     (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 was
    a five-year $1.3 billion committed facility, with no amount
    outstanding on August 31, 2009. In June 2010, the Company
    amended this facility and reduced the committed amount from
    $1.3 billion to $700 million, with the May 2011
    maturity date remaining the same, and no amount outstanding on
    August 31, 2010. Also in June 2010, the Company entered
    into a new five-year $900 million committed facility that
    expires in June 2015, which had F-19




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  no amount outstanding on August 31, 2010. The Company
    previously had a $300 million
    364-day
    revolving line of credit that expired in February 2010, which
    had no amount outstanding on August 31, 2009. In addition
    to these short-term lines of credit, the Company has a one-year
    committed credit facility dedicated to NCRA expiring in December
    2010, with a syndication of banks in the amount of
    $15.0 million, with no amounts outstanding on
    August 31, 2010 and 2009. Our wholly-owned subsidiaries,
    CHS Europe S.A. and CHS do Brasil Ltda., have uncommitted lines
    of credit to finance their normal trade grain transactions, of
    which $27.1 million and $15.7 million were outstanding
    on August 31, 2010 and 2009, respectively, and were
    collateralized by certain 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,
    2010 and 2009, there was no commercial paper outstanding.
    Miscellaneous short-term notes payable totaled $2.7 million
    and $3.5 million on August 31, 2010 and 2009,
    respectively.(b)
    
    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.(c)
    
    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.(d)
    
    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.(e)
    
    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.(f)
    
    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.(g)
    
    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.(h)
    
    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.(i)
    
    Other notes and contracts payable of $9.1 million are
    collateralized by property, plant and equipment, with a cost of
    $24.4 million, less accumulated depreciation of
    $10.0 million on August 31, 2010.(j)
    
    The debt is unsecured; however, restrictive covenants under
    various agreements have requirements for maintenance of minimum
    working capital levels and other financial ratios.(k)
    
    Cofina Funding, LLC (Cofina Funding), a wholly-owned subsidiary
    of Cofina Financial, has available credit totaling
    $200.0 million as of August 31, 2010, under note
    purchase agreements with various purchasers, through the
    issuance of short-term notes payable. Cofina Financial sells
    eligible commercial loans receivable it has originated to Cofina
    Funding, which are then pledged as collateral under the note
    purchase agreements. The notes payable issued by Cofina Funding
    bear interest at variable rates based on commercial paper, with
    a weighted-average commercial paper interest rate of 1.82% as of
    August 31, 2010. Borrowings by Cofina Funding utilizing the
    issuance of commercial paper under the note purchase agreements
    totaled $130.0 million as of August 31, 2010. As of
    August 31, 2010, $55.0 million of related loans
    receivable were accounted for as sales when they were
    surrendered in accordance with authoritative guidance on
    accounting for transfers of financial assets and extinguishments
    of liabilities. As a result, the net borrowings under the note
    purchase agreements were $75.0 million. Cofina Financial
    also sells loan commitments it has originated to ProPartners
    Financial (ProPartners) on a recourse basis. The total F-20




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  capacity for commitments under the ProPartners program is
    $120.0 million. The total outstanding commitments under the
    program totaled $90.2 million as of August 31, 2010,
    of which $71.4 million was borrowed under these commitments
    with an interest rate of 2.29%. In addition, Cofina Financial
    borrows funds under short-term notes issued as part of a surplus
    funds program. Borrowings under this program are unsecured and
    bear interest at variable rates ranging from 0.85% to 1.35% as
    of August 31, 2010, and are due upon demand. Borrowings
    under these notes totaled $85.9 million as of
    August 31, 2010.       (Dollars in thousands)2011

$
112,5032012


92,4812013


101,1892014


155,0202015


154,977Thereafter


370,071$
986,241     2010


2009


2008(Dollars in thousands)Interest expense

$
69,901


$
85,669


$
100,123Capitalized interest


(6,212
)


(5,201
)


(9,759
)Interest income


(5,365
)


(9,981
)


(13,904
)Interest, net

$
58,324


$
70,487


$
76,460   Note
    8  Income Taxes
    2010

2009

2008(Dollars in thousands)Current

$
8,931


$
19,328


$
45,850Deferred


34,691



31,665



15,578Valuation allowance


4,816



12,311



10,433Income taxes

$
48,438


$
63,304


$
71,861      F-21




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2010

2009(Dollars in thousands)Deferred tax assets:Accrued expenses

$
88,246


$
83,896Postretirement health care and deferred compensation


111,437



98,922Tax credit carryforwards


57,449



56,987Loss carryforwards


50,171



65,180Other


35,060



35,435Total deferred tax assets


342,363



340,420Deferred tax liabilities:Pension


36,341



34,103Investments


56,744



63,780Major maintenance


6,017



9,041Property, plant and equipment


337,654



308,179Other


6,647



32,681Total deferred tax liabilities


443,403



447,784Deferred tax assets valuation reserve


(36,935
)


(32,119
)Net deferred tax liabilities

$
137,975


$
139,483        F-22




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2010


2009


2008Statutory federal income tax rate


35.0
%


35.0
%


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


0.8



0.0



0.0Patronage earnings


(23.8
)


(25.5
)


(24.1
)Export activities at rates other than the U.S. statutory rate


1.0



0.3



(0.1
)Valuation allowance


0.8



2.4



1.1Tax credits


(0.2
)


(0.7
)


(2.1
)Other


(5.3
)


1.1



(2.2
)Effective tax rate


8.3
%


12.6
%


7.6
%       2010


2009


2008(Dollars in thousands)Beginning balances

$
72,519


$
5,840


$
7,259Increases for current year tax positions






1,381Increases for tax positions of prior years






65,697Reductions for tax positions of prior years










(1,419
)Reductions attributable to statute expiration


(3,162
)


(399
)Balances at August 31

$
69,357


$
72,519


$
5,840       Note
    9  Equities
   F-23




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
            Note
    10  Benefit Plans
   F-24




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Qualified


Non-QualifiedPension Benefits


Pension Benefits


Other Benefits2010


2009


2010


2009


2010


2009(Dollars in thousands)Change in benefit obligation:Benefit obligation at beginning of period

$
415,469


$
354,134


$
40,524


$
38,190


$
38,202


$
34,378Service cost


20,774



18,252



1,220



1,385



1,386



1,153Interest cost


23,034



25,296



2,235



2,781



2,153



2,971Actuarial loss (gain)


5,634



6,872



239



(2,940
)


1,016



(2,024
)Assumption change


53,587



38,815



4,995



3,274



4,368



3,317Plan amendments


392Special agreements


















1,722



283Medicare D


















105



356Benefits paid


(25,289
)


(27,900
)


(1,980
)


(2,166
)


(2,690
)


(2,232
)Benefit obligation at end of period

$
493,601


$
415,469


$
47,233


$
40,524


$
46,262


$
38,202Change in plan assets:Fair value of plan assets at beginning of period

$
410,181


$
366,550Actual gain (loss) on plan assets


23,469



(38,169
)Company contributions


70,000



109,700


$
1,980


$
2,166


$
2,690


$
2,232Benefits paid


(25,289
)


(27,900
)


(1,980
)


(2,166
)


(2,690
)


(2,232
)Fair value of plan assets at end of period

$
478,361


$
410,181


$



$



$



$
Funded status at end of period

$
(15,240
)

$
(5,288
)

$
(47,233
)

$
(40,524
)

$
(46,262
)

$
(38,202
)Amounts recognized on balance sheet:Non-current assets





$
5,404Accrued benefit cost:Current liabilities









$
(8,231
)

$
(2,936
)

$
(2,834
)

$
(2,168
)Non-current liabilities

$
(15,240
)


(10,692
)


(39,002
)


(37,588
)


(43,428
)


(36,034
)Ending balance

$
(15,240
)

$
(5,288
)

$
(47,233
)

$
(40,524
)

$
(46,262
)

$
(38,202
)Amounts recognized in accumulated other comprehensive
    loss (pretax):Net transition obligation

















$
2,586


$
3,522Prior service cost (credit)

$
13,185


$
14,985


$
638


$
1,055



(312
)


(498
)Net loss


289,853



227,803



13,527



8,912



6,199



827Noncontrolling interests


(25,112
)


(21,115
)


(184
)


(195
)


(1,997
)


(1,402
)Ending balance

$
277,926


$
221,673


$
13,981


$
9,772


$
6,476


$
2,449    F-25




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Qualified


Non-QualifiedPension Benefits


Pension Benefits


Other Benefits2010


2009


2008


2010


2009


2008


2010


2009


2008(Dollars in thousands)Components of net periodic benefit costs:Service cost

$
20,774


$
16,318


$
15,387


$
1,220


$
1,200


$
1,246


$
1,385


$
1,101


$
1,175Interest cost


23,034



22,837



21,266



2,235



2,399



2,190



2,154



2,771



1,814Expected return on assets


(36,875
)


(31,258
)


(31,274
)Special agreements






















467



1,722



283



4,000Prior service cost (credit) amortization


2,193



2,115



2,164



419



546



579



(186
)


347



(320
)Actuarial loss (gain) amortization


10,578



5,046



4,887



617



667



841



11



(215
)


(165
)Transition amount amortization


























936



936



935Net periodic benefit cost

$
19,704


$
15,058


$
12,430


$
4,491


$
4,812


$
5,323


$
6,022


$
5,223


$
7,439Adjustment to retained earnings for measurement date change





$
1,593










$
763










$
294Weighted average assumptions to determine the net periodic
    benefit cost:Discount rate


5.75%



6.05%



6.25%



5.75%



6.05%



6.25%



5.75%



6.05%



6.25%Expected return on plan assets


8.25%



8.25%



8.75%



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%Weighted average assumptions to determine the benefit
    obligations:Discount rate


4.75%



5.75%



6.75%



4.75%



5.75%



6.75%



4.75%



5.75%



6.75%Rate of compensation increase


4.50%



4.50%



4.50%



4.50%



4.50%



4.50%



4.50%



4.50%



4.50%     Qualified


Non-QualifiedPension Benefits


Pension Benefits


Other Benefits(Dollars in thousands)Amortization of transition obligation









$
936Amortization of prior service cost (benefit)

$
2,327


$
140



(123
)Amortization of net actuarial loss


15,856



998



366Noncontrolling interests


(1,634
)


(7
)


(141
)  F-26




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    1% Increase

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

$
468


$
(391
)Effect on postretirement benefit obligation


4,249



(3,710
)           Qualified


Non-Qualified


Other BenefitsPension Benefits


Pension Benefits


Gross


Medicare D(Dollars in thousands)2011

$
28,494


$
8,231


$
2,833


$
1002012


30,302



4,743



3,189



1002013


32,933



4,301



3,165



1002014


34,998



3,078



3,332



1002015


38,719



3,075



3,430



1002016-2020


227,291



18,636



18,438



600     
    optimization of the long-term returns on plan assets at an
    acceptable level of risk, and
    maintenance of a broad diversification across asset classes and
    among investment managers, and
    focus on long-term return objectives.     F-27




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  investment-grade
        Level 1


Level 2


Level 3


Total(Dollars in thousands)Mutual funds

$
459,089


$
7,158






$
466,247Real estate fund






2


$
9,407



9,409Other assets  hedge funds










2,705



2,705Total

$
459,089


$
7,160


$
12,112


$
478,361     Mutual funds:
  Real Estate funds:
  Hedge funds: and/or
    RealEstate


HedgeFunds


Funds


Total(Dollars in thousands)Balances at beginning of period

$
10,335


$
1,091


$
11,426Unrealized (losses) gains


(939
)


126



(813
)Purchases, sales, issuances and settlements, net


11



1,488



1,499Total

$
9,407


$
2,705


$
12,112  F-28




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 11
    Segment
    Reporting           F-29




---



##### 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, 2010:Revenues

$
8,799,890


$
15,678,160


$
1,061,654


$
44,922


$
(316,695
)

$
25,267,931Cost of goods sold


8,437,504



15,261,056



1,018,731



(3,186
)


(316,695
)


24,397,410Gross profit


362,386



417,104



42,923



48,108







870,521Marketing, general and administrative


123,834



173,766



25,764



43,218







366,582Operating earnings


238,552



243,338



17,159



4,890







503,939Gain on investments


(269
)


(28,807
)






(357
)






(29,433
)Interest, net


9,939



28,033



19,605



747







58,324Equity income from investments


(5,554
)


(25,173
)


(77,159
)


(901
)






(108,787
)Income before income taxes

$
234,436


$
269,285


$
74,713


$
5,401


$



$
583,835Intersegment revenues

$
(295,536
)

$
(19,259
)

$
(1,900
)





$
316,695


$
Goodwill

$
1,165


$
14,975






$
6,898






$
23,038Capital expenditures

$
197,637


$
116,175


$
6,293


$
4,157






$
324,262Depreciation and amortization

$
118,071


$
58,972


$
17,027


$
8,852






$
202,922Total identifiable assets at August 31, 2010

$
3,004,471


$
3,583,341


$
696,738


$
1,381,578






$
8,666,128For the year ended August 31, 2009:Revenues

$
7,639,838


$
17,196,448


$
1,142,636


$
45,298


$
(294,304
)

$
25,729,916Cost of goods sold


7,110,324



16,937,877



1,099,177



(3,173
)


(294,304
)


24,849,901Gross profit


529,514



258,571



43,459



48,471







880,015Marketing, general and administrative


125,104



158,395



25,724



46,076







355,299Operating earnings


404,410



100,176



17,735



2,395







524,716(Gain) loss on investments


(15,748
)


(2,285
)


74,338











56,305Interest, net


5,483



46,995



21,841



(3,832
)






70,487Equity income from investments


(4,044
)


(18,222
)


(82,525
)


(963
)






(105,754
)Income before income taxes

$
418,719


$
73,688


$
4,081


$
7,190


$



$
503,678Intersegment revenues

$
(251,626
)

$
(39,919
)

$
(2,759
)





$
294,304


$
Goodwill

$
1,983


$
8,465






$
6,898






$
17,346Capital expenditures

$
233,112


$
72,155


$
7,444


$
2,794






$
315,505Depreciation and amortization

$
118,260


$
53,421


$
16,805


$
7,864






$
196,350Total identifiable assets at August 31, 2009

$
3,025,522


$
2,987,394


$
685,865


$
1,171,064






$
7,869,845For 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
)Income (loss) before income taxes

$
371,550


$
568,682


$
(5,806
)

$
12,317


$



$
946,743Intersegment revenues

$
(322,522
)

$
(36,972
)

$
(338
)





$
359,832


$
Capital expenditures

$
251,401


$
56,704


$
5,994


$
4,460






$
318,559Depreciation and amortization

$
107,949


$
50,933


$
15,902


$
6,479






$
181,263  F-30




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2010


2009


2008(Dollars in millions)Africa

$
395


$
305


$
505Asia


2,891



3,664



3,000Europe


209



371



488North America, excluding U.S.


1,210



1,253



1,399South America


736



491



922$
5,441


$
6,084


$
6,314   Note 12
    Fair
    Value Measurements      Level 1: available-for-sale
  Level 2:
  Level 3:
   F-31




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair Value Measurements at August 31, 2010Quoted Prices in


SignificantActive Markets


Other


Significantfor Identical


Observable


UnobservableAssets


Inputs


Inputs(Level 1)


(Level 2)


(Level 3)


Total(Dollars in thousands)Assets:Readily marketable inventories





$
1,057,910






$
1,057,910Commodity and freight derivatives

$
38,342



208,279







246,621Other assets


62,612











62,612Total Assets

$
100,954


$
1,266,189






$
1,367,143Liabilities:Commodity and freight derivatives

$
79,940


$
204,629






$
284,569Foreign currency derivatives


222











222Interest rate swap derivatives






1,227







1,227Total Liabilities

$
80,162


$
205,856






$
286,018   Fair Value Measurements at August 31, 2009Quoted Prices in


SignificantActive Markets


Other


Significantfor Identical


Observable


UnobservableAssets


Inputs


Inputs(Level 1)


(Level 2)


(Level 3)


Total(Dollars in thousands)Assets:Readily marketable inventories





$
706,104






$
706,104Commodity and freight derivatives

$
68,116



103,224







171,340Short-term investments









$
1,932



1,932Other assets


53,326











53,326Total Assets

$
121,442


$
809,328


$
1,932


$
932,702Liabilities:Commodity and freight derivatives

$
27,145


$
274,060






$
301,205Interest rate swap derivatives






4,911







4,911Total Liabilities

$
27,145


$
278,971






$
306,116   Readily marketable inventories
  Commodity, freight and foreign currency
    derivatives
 F-32




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or
  Shortterm investments
  Other assets available-for-sale
  Interest rate swap derivatives
    2010


2009(Dollars in thousands)Balances, September 1

$
1,932


$
6,900Realized/unrealized losses included in marketing, general and
    administrative


38



(643
)Settlements


(1,970
)


(4,325
)Balances, August 31

$



$
1,932   Note 13
    Commitments and
    Contingencies  Environmental
      Other
    Litigation and Claims
   F-33




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Grain
    Storage
    Guarantees
    Lease
    Commitments
        EquipmentRail Cars


Vehicles


and Other


Total(Dollars in thousands)2011

$
11,531


$
22,067


$
9,248


$
42,8462012


8,560



17,132



7,749



33,4412013


6,161



12,439



5,607



24,2072014


4,069



8,111



3,507



15,6872015


3,147



4,657



3,061



10,865Thereafter


7,509



722



9,280



17,511Total minimum future lease payments

$
40,977


$
65,128


$
38,452


$
144,557  F-34




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 14
    Supplemental
    Cash Flow and Other Information    2010


2009


2008(Dollars in thousands)Net cash paid during the period for:Interest

$
65,400


$
81,146


$
79,590Income taxes


15,899



76,670



20,772Other significant noncash investing and
    financing transactions:Capital equity certificates exchanged for Preferred Stock


36,674



49,944



46,364Capital equity certificates cancelled for fiscal 2009 patronage
    losses in wholesale crop nutrients


60,154Capital equity certificates issued in exchange for Ag Business
    acquisitions


616



19,594



4,680Accrual of dividends and equities payable


(210,435
)


(203,056
)


(325,039
)   Note 15
    Related
    Party Transactions    2010

2009

2008(Dollars in thousands)Sales

$
2,276,682


$
2,528,330


$
3,451,365Purchases


961,062



1,215,786



1,248,436   2010

2009(Dollars in thousands)Receivables

$
31,792


$
14,987Payables


34,438



30,741    F-35




---



##### Table of Contents



NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 16
    Comprehensive
    Income    2010


2009


2008(Dollars in thousands)Net income including noncontrolling interests

$
535,397


$
440,374


$
874,882Pension and other postretirement, net of tax benefit of $30,847,
    $53,408 and $12,675 in 2010, 2009 and 2008, respectively


(47,667
)


(82,069
)


(19,317
)Unrealized net loss on available for sale investments, net of
    tax benefit of $477, $6,687 and $40,979 in 2010, 2009 and 2008,
    respectively


(750
)


(10,503
)


(64,366
)Amortization of treasury locks, net of tax expense of $227, $258
    and $297 in 2010, 2009 and 2008, respectively


356



405



465Energy derivative instruments qualified for hedge accounting,
    net of tax benefit of $1,540 in 2010


(2,419
)Foreign currency translation adjustment, net of tax (benefit)
    expense of $(791), $(1,570) and $56 in 2010, 2009 and 2008,
    respectively


(1,242
)


(2,466
)


87Other comprehensive loss


(51,722
)


(94,633
)


(83,131
)Total comprehensive income, including noncontrolling interests


483,675



345,741



791,751Comprehensive income attributable to noncontrolling interests


30,513



52,562



69,784Comprehensive income attributable to CHS Inc.

$
453,162


$
293,179


$
721,967     2010


2009(Dollars in thousands)Pension and other postretirement, net of tax benefit of $141,097
    and $110,250 in 2010 and 2009, respectively

$
(218,512
)

$
(170,845
)Unrealized net gain on available for sale investments, net of
    tax expense of $204 and $681 in 2010
    and 2009, respectively


320



1,070Treasury locks, net of tax benefit of $616 and $843 in 2010 and
    2009, respectively


(968
)


(1,324
)Energy derivative instruments qualified for hedge accounting,
    net of tax benefit of $1,540 in 2010


(2,419
)Foreign currency translation adjustment, net of tax (benefit)
    expense of $(34) and $757 in 2010
    and 2009, respectively


(54
)


1,188Accumulated other comprehensive loss, including noncontrolling
    interests


(221,633
)


(169,911
)Accumulated other comprehensive loss attributable to
    noncontrolling interests


(16,366
)


(13,641
)Accumulated other comprehensive loss attributable to CHS
    Inc.

$
(205,267
)

$
(156,270
)  F-36