##### Table of Contents





UNITED STATES
    SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C.
    20549
  Form 10-Q
  (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934for the quarterly period ended
    May 31, 2009.oro

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 Drive
    Inver Grove Heights, MN 55077(Address of principal
    executive offices,
    including zip code)

(651) 355-6000(Registrants telephone
    number,
    including areacode)   þ o
  Regulation S-T o o
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer þ
    Smaller
    reporting
    company o   Rule 12b-2 o þ
    Number of shares outstanding atClass

July 9, 2009NONE

NONE




---



##### 



INDEX
   
 Page No.PART I. FINANCIAL INFORMATIONItem 1.

Financial Statements (unaudited)


3Consolidated Balance Sheets as of May 31,
    2009, August 31, 2008 and May 31, 2008


3Consolidated Statements of Operations for the
    three months and nine months ended May 31, 2009 and 2008


4Consolidated Statements of Cash Flows for the
    nine months ended May 31, 2009 and 2008


5Notes to Consolidated Financial Statements


6Item 2.

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


22Item 3.

Quantitative and Qualitative Disclosures about
    Market Risk


43Item 4T.

Controls and Procedures


43PART II. OTHER INFORMATIONItem 1.

Legal Proceedings


44Item 1A.

Risk Factors


44Item 6.

Exhibits


44SIGNATURE PAGE


45EX-31.1EX-31.2EX-32.1EX-32.2   1




---



##### Table of Contents



PART I.
    FINANCIAL INFORMATION  SAFE
    HARBOR STATEMENT UNDER THE PRIVATE
    SECURITIES LITIGATION REFORM ACT OF 1995
  Form 10-Q Form 10-Q
 2




---



##### Table of Contents



Item 1.
    Financial
    Statements  CHS INC.
    AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
 (Unaudited)
  May 31,


August 31,


May 31,2009


2008


2008(dollars in thousands)ASSETSCurrent assets:Cash and cash equivalents

$
166,480


$
136,540


$
249,715Receivables


2,089,913



2,307,794



2,234,061Inventories


2,022,804



2,368,024



2,165,907Derivative assets


274,913



369,503



683,065Other current assets


682,538



667,338



532,426Total current assets


5,236,648



5,849,199



5,865,174Investments


757,848



784,516



784,091Property, plant and equipment


2,054,692



1,948,305



1,923,637Other assets


321,241



189,958



231,340Total assets

$
8,370,429


$
8,771,978


$
8,804,242LIABILITIES AND EQUITIESCurrent liabilities:Notes payable

$
554,981


$
106,154


$
405,877Current portion of long-term debt


95,821



118,636



111,973Customer credit balances


235,012



224,349



164,379Customer advance payments


487,730



644,822



623,995Checks and drafts outstanding


153,735



204,896



153,639Accounts payable


1,223,207



1,838,214



1,785,115Derivative liabilities


352,545



273,591



400,482Accrued expenses


308,644



374,898



296,215Dividends and equities payable


108,701



325,039



263,386Total current liabilities


3,520,376



4,110,599



4,205,061Long-term debt


1,026,402



1,076,219



1,123,609Other liabilities


412,119



423,742



409,174Minority interests in subsidiaries


248,237



205,732



200,924Commitments and contingenciesEquities


3,163,295



2,955,686



2,865,474Total liabilities and equities

$
8,370,429


$
8,771,978


$
8,804,242    3




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (Unaudited)
  For the Three Months Ended


For the Nine Months EndedMay 31,


May 31,2009


2008


2009


2008(dollars in thousands)Revenues

$
6,163,119


$
9,336,609


$
19,074,107


$
22,753,340Cost of goods sold


6,004,851



9,055,967



18,380,355



21,900,436Gross profit


158,268



280,642



693,752



852,904Marketing, general and administrative


90,417



86,571



277,131



228,035Operating earnings


67,851



194,071



416,621



624,869Loss (gain) on investments


3,726



(5,305
)


55,701



(100,483
)Interest, net


16,312



22,183



50,262



53,786Equity income from investments


(42,985
)


(51,820
)


(74,096
)


(128,423
)Minority interests


12,105



16,666



53,650



52,476Income before income taxes


78,693



212,347



331,104



747,513Income taxes


14,124



23,631



47,004



89,866Net income

$
64,569


$
188,716


$
284,100


$
657,647    4




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (Unaudited)
  For the Nine Months EndedMay 31,2009


2008(dollars in thousands)Cash flows from operating activities:Net income

$
284,100


$
657,647Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


144,683



130,005Amortization of deferred major repair costs


18,324



21,652Income from equity investments


(74,096
)


(128,423
)Distributions from equity investments


57,214



72,777Minority interests


53,650



52,476Noncash patronage dividends received


(3,229
)


(1,619
)Gain on sale of property, plant and equipment


(3,453
)


(5,707
)Loss (gain) on investments


55,701



(100,483
)Deferred taxes


17,814



89,866Other, net


2,665



233Changes in operating assets and liabilities:Receivables


505,076



(765,766
)Inventories


366,904



(317,696
)Derivative assets


94,589



(435,983
)Other current assets and other assets


(46,230
)


(416
)Customer credit balances


8,652



53,531Customer advance payments


(161,799
)


256,236Accounts payable and accrued expenses


(716,003
)


604,352Derivative liabilities


78,954



321,084Other liabilities


(5,276
)


8,342Net cash provided by operating activities


678,240



512,108Cash flows from investing activities:Acquisition of property, plant and equipment


(225,888
)


(255,818
)Proceeds from disposition of property, plant and equipment


8,902



8,132Expenditures for major repairs


(34
)


(21,662
)Investments


(115,657
)


(336,117
)Investments redeemed


10,836



35,498Proceeds from sale of investments


41,612



120,758Joint venture distribution transaction, net


850



(4,737
)Changes in notes receivable


71,454



(62,478
)Acquisition of intangibles


(1,320
)


(2,463
)Business acquisitions, net of cash received


(76,364
)


(45,891
)Other investing activities, net


820



(3,813
)Net cash used in investing activities


(284,789
)


(568,591
)Cash flows from financing activities:Changes in notes payable


60,758



(265,299
)Long-term debt borrowings






600,000Principal payments on long-term debt


(68,572
)


(54,639
)Payments for bank fees on debt


(1,584
)


(3,486
)Changes in checks and drafts outstanding


(52,412
)


10,105Distributions to minority owners


(18,610
)


(55,437
)Costs incurred  capital equity certificates redeemed


(130
)


(135
)Preferred stock dividends paid


(14,536
)


(11,764
)Retirements of equities


(40,835
)


(75,899
)Cash patronage dividends paid


(227,590
)


(194,960
)Net cash used in financing activities


(363,511
)


(51,514
)Net increase (decrease) in cash and cash equivalents


29,940



(107,997
)Cash and cash equivalents at beginning of period


136,540



357,712Cash and cash equivalents at end of period

$
166,480


$
249,715    5




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 (dollars
    in thousands)
  Note 1.
    Accounting
    Policies      Form 10-K,
  Derivative
    Instruments and Hedging Activities
      No. FIN 39-1
    Purchase


SalesContracts


Contracts(units in thousands)Grain and oilseed  bushels


565,847



778,279Energy products  barrels


14,270



15,658Crop nutrients  tons


495



739Ocean and barge freight  metric tons


3,229



1,478  6




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Gross FairValuesDerivative Assets:Commodity and freight contracts

$
412,148Foreign exchange contracts


91$
412,239Derivative Liabilities:Commodity and freight contracts

$
483,632Foreign exchange contracts


749Interest rate contracts


5,490$
489,871     Location of

Amount ofGain (Loss)

Gain (Loss)Commodity and freight contracts

Cost of goods sold

$
(38,047
)Foreign exchange contracts

Cost of goods sold


(2,754
)Interest rate contracts

Interest, net


(1,145
)$
(41,946
)   Commodity
    and Freight Contracts:
     7




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
        Foreign
    Exchange Contracts:
    Interest
    Rate Contracts:
   8




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Goodwill
    and Other Intangible Assets
      Recent
    Accounting Pronouncements
    SFAS No. 141R-1, SFAS No. 141R-1
   9




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
      
    FSP
    No. SFAS 157-4,
    Determining Fair Value When the Volume and Level of
    Activity for the Asset or Liability Have Significantly Decreased
    and Identifying Transactions That Are Not Orderly,
    provides additional guidance on measuring the fair value of
    financial instruments when market activity has decreased and
    quoted prices may reflect distressed transactions. It reaffirms
    that the exit price remains the objective of a fair-value
    measurement;
    FSP
    No. SFAS 115-2
    and
    FAS 124-2,
    Recognition and Presentation of Other-Than-Temporary
    Impairments, amends the other-than-temporary impairment
    accounting guidance for debt securities. This FSP requires that
    other-than-temporary impairment be separated into the amount of
    the total impairment related to credit losses and the amount of
    the total impairment related to all other factors. The amount of
    the total impairment related to credit losses is recognized in
    earnings and the amount related to all other factors is
    recognized in other comprehensive income. This FSP also enhances
    existing disclosures for other-than-temporary impairments on
    debt and equity securities; and
    FSP
    No. SFAS 107-1
    and APB
    No. 28-1,
    Interim Disclosures about Fair Value of Financial
    Instruments, requires disclosures about fair value of
    financial instruments at interim reporting periods, including
    disclosure of the significant assumptions used to estimate the
    fair value of those financial instruments. The guidance relates
    to fair value disclosures for any financial instruments that are
    not currently reflected on the balance sheet at fair value.  SFAS 157-4, SFAS 115-2 124-2, SFAS 107-1 28-1
       10




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
      Reclassifications
    Note 2.
    Receivables  May 31,


August 31,


May 31,2009


2008


2008Trade accounts receivable

$
1,680,703


$
2,181,132


$
2,140,795Cofina Financial notes receivable


386,733Other


122,733



200,313



165,6462,190,169



2,381,445



2,306,441Less allowances and reserves


100,256



73,651



72,380$
2,089,913


$
2,307,794


$
2,234,061    11




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Note 3.
    Inventories  May 31,


August 31,


May 31,2009


2008


2008Grain and oilseed

$
900,394


$
918,514


$
887,765Energy


504,039



596,487



617,238Crop nutrients


175,812



399,986



289,010Feed and farm supplies


346,519



371,670



310,696Processed grain and oilseed


86,712



74,537



55,147Other


9,328



6,830



6,051$
2,022,804


$
2,368,024


$
2,165,907       Note 4.
    Investments     12




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
            For the Three Months Ended


For the Nine Months EndedMay 31,


May 31,2009


2008


2009


2008Net sales

$
342,459


$
389,113


$
541,999


$
787,363Gross profit


36,073



59,414



47,234



113,651Net gain (loss)


2,963



20,893



(39,167
)


(26,293
)   May 31,


August 31,


May 31,2009


2008


2008Current assets

$
585,640


$
456,385


$
678,267Non-current assets


35,923



40,946



42,044Current liabilities


273,933



119,780



322,813Non-current liabilities


12,048



12,421



10,201   Note 5.
    Notes
    Payable  May 31,


August 31,


May 31,2009


2008


2008Notes payable

$
278,447


$
106,154


$
405,877Cofina Financial notes payable


276,534$
554,981


$
106,154


$
405,877   364-day
 13




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
        Note 6.
    Interest,
    net  For the Three Months Ended


For the Nine Months EndedMay 31,


May 31,2009


2008


2009


2008Interest expense

$
18,584


$
24,798


$
58,701


$
65,227Interest income


2,272



2,615



8,439



11,441Interest, net

$
16,312


$
22,183


$
50,262


$
53,786   Note 7.
    Equities    Fiscal 2009


Fiscal 2008Balances, September 1, 2008 and 2007

$
2,955,686


$
2,475,455Net income


284,100



657,647Other comprehensive loss


(15,916
)


(95,424
)Patronage distribution


(643,444
)


(555,419
)Patronage accrued


652,000



550,000Equities retired


(40,835
)


(75,899
)Equity retirements accrued


90,781



165,511Equities issued in exchange for elevator properties


6,344



1,909Preferred stock dividends


(14,536
)


(11,764
)Preferred stock dividends accrued


3,016



2,413Accrued dividends and equities payable


(105,659
)


(249,516
)Other, net


(8,242
)


561Balances, May 31, 2009 and 2008

$
3,163,295


$
2,865,474    14




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Note 8.
    Comprehensive
    Income    Note 9.
    Employee
    Benefit Plans    Qualified


Non-QualifiedPension Benefits


Pension Benefits


Other Benefits2009


2008


2009


2008


2009


2008Components of net periodic benefit costs for the three months
    ended May 31, 2009 and 2008:Service cost

$
4,117


$
3,847


$
309


$
312


$
264


$
358Interest cost


5,745



5,311



611



548



521



510Expected return on plan assets


(8,232
)


(7,824
)Prior service cost (credit) amortization


528



541



137



144



(49
)


(79
)Actuarial loss (gain) amortization


1,313



1,218



176



210



(78
)


5Transition amount amortization


















234



234Net periodic benefit cost

$
3,471


$
3,093


$
1,233


$
1,214


$
892


$
1,028Components of net periodic benefit costs for the nine months
    ended May 31, 2009 and 2008:Service cost

$
12,239


$
11,540


$
901


$
935


$
821


$
881Interest cost


17,127



15,935



1,799



1,643



1,642



1,360Expected return on plan assets


(23,340
)


(23,475
)Prior service cost (credit) amortization


1,586



1,623



410



433



(148
)


(239
)Actuarial loss (gain) amortization


3,839



3,653



500



631



(161
)


(124
)Transition amount amortization


















702



702Net periodic benefit cost

$
11,451


$
9,276


$
3,610


$
3,642


$
2,856


$
2,580   Employer
    Contributions:
   15




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Note 10.
    Segment
    Reporting               16




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Ag





Corporate


ReconcilingEnergy


Business


Processing


and Other


Amounts


TotalFor the Three Months Ended
    May 31, 2009Revenues

$
1,564,568


$
4,388,338


$
252,067


$
11,630


$
(53,484
)

$
6,163,119Cost of goods sold


1,482,775



4,326,980



249,437



(857
)


(53,484
)


6,004,851Gross profit


81,793



61,358



2,630



12,487







158,268Marketing, general and administrative


31,876



38,704



6,667



13,170







90,417Operating earnings (losses)


49,917



22,654



(4,037
)


(683
)






67,851Loss on investments






112



3,614











3,726Interest, net


(67
)


10,285



8,337



(2,243
)






16,312Equity income from investments


(1,079
)


(11,396
)


(30,197
)


(313
)






(42,985
)Minority interests


12,221



(116
)














12,105Income before income taxes

$
38,842


$
23,769


$
14,209


$
1,873


$



$
78,693Intersegment revenues

$
(48,384
)

$
(4,533
)

$
(567
)





$
53,484


$
For the Three Months Ended
    May 31, 2008Revenues

$
3,058,367


$
6,005,755


$
353,475


$
7,095


$
(88,083
)

$
9,336,609Cost of goods sold


3,000,380



5,811,948



332,188



(466
)


(88,083
)


9,055,967Gross profit


57,987



193,807



21,287



7,561







280,642Marketing, general and administrative


28,250



44,126



6,704



7,491







86,571Operating earnings


29,737



149,681



14,583



70







194,071(Gain) loss on investments


(18
)


(5,848
)


562



(1
)






(5,305
)Interest, net


1,739



15,310



6,471



(1,337
)






22,183Equity income from investments


(753
)


(40,101
)


(9,593
)


(1,373
)






(51,820
)Minority interests


16,265



401















16,666Income before income taxes

$
12,504


$
179,919


$
17,143


$
2,781


$



$
212,347Intersegment revenues

$
(75,557
)

$
(11,671
)

$
(855
)





$
88,083


$
For the Nine Months Ended
    May 31, 2009Revenues

$
5,661,267


$
12,758,575


$
833,585


$
35,209


$
(214,529
)

$
19,074,107Cost of goods sold


5,229,906



12,563,133



804,056



(2,211
)


(214,529
)


18,380,355Gross profit


431,361



195,442



29,529



37,420







693,752Marketing, general and administrative


93,369



125,812



20,946



37,004







277,131Operating earnings


337,992



69,630



8,583



416







416,621(Gain) loss on investments


(15,748
)


(2,889
)


74,338











55,701Interest, net


5,110



33,718



15,442



(4,008
)






50,262Equity income from investments


(2,906
)


(18,501
)


(51,936
)


(753
)






(74,096
)Minority interests


52,858



792















53,650Income (loss) before income taxes

$
298,678


$
56,510


$
(29,261
)

$
5,177


$



$
331,104Intersegment revenues

$
(189,989
)

$
(22,644
)

$
(1,896
)





$
214,529


$
Goodwill

$
1,983


$
8,065






$
6,898






$
16,946Capital expenditures

$
170,373


$
47,929


$
5,684


$
1,902






$
225,888Depreciation and amortization

$
87,404


$
38,889


$
12,503


$
5,887






$
144,683Total identifiable assets at May 31, 2009

$
2,681,788


$
3,842,218


$
691,711


$
1,154,712






$
8,370,429 17




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Ag





Corporate


ReconcilingEnergy


Business


Processing


and Other


Amounts


TotalFor the Nine Months Ended
    May 31, 2008Revenues

$
7,979,099


$
14,114,990


$
886,820


$
23,868


$
(251,437
)

$
22,753,340Cost of goods sold


7,696,745



13,618,477



838,947



(2,296
)


(251,437
)


21,900,436Gross profit


282,354



496,513



47,873



26,164







852,904Marketing, general and administrative


75,650



110,722



18,722



22,941







228,035Operating earnings


206,704



385,791



29,151



3,223







624,869(Gain) loss on investments


(35
)


(100,393
)


943



(998
)






(100,483
)Interest, net


(7,845
)


47,855



16,936



(3,160
)






53,786Equity income from investments


(3,069
)


(66,775
)


(54,051
)


(4,528
)






(128,423
)Minority interests


51,948



528















52,476Income before income taxes

$
165,705


$
504,576


$
65,323


$
11,909


$



$
747,513Intersegment revenues

$
(224,880
)

$
(25,521
)

$
(1,036
)





$
251,437


$
Goodwill

$
3,654


$
150














$
3,804Capital expenditures

$
207,527


$
40,970


$
4,015


$
3,306






$
255,818Depreciation and amortization

$
76,134


$
37,374


$
11,720


$
4,777






$
130,005Total identifiable assets at May 31, 2008

$
3,097,313


$
4,197,684


$
710,419


$
798,826






$
8,804,242   Note 11.
    Fair
    Value Measurements  No. 157-2,
      Level 1:
 18




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  Level 2:
  Level 3:
    Fair Value Measurements at May 31, 2009Quoted Prices inActive Markets for


Significant Other


SignificantIdentical Assets


Observable Inputs


Unobservable Inputs(Level 1)


(Level 2)


(Level 3)


TotalAssets:Readily marketable inventories





$
987,106






$
987,106Commodity, freight and foreign currency derivatives

$
45,891



229,022







274,913Short-term investments









$
2,410



2,410Rabbi Trust assets


43,779











43,779Available-for-sale investments


6,257











6,257Total Assets

$
95,927


$
1,216,128


$
2,410


$
1,314,465Liabilities:Commodity, freight and foreign currency derivatives

$
91,593


$
255,462






$
347,055Interest rate swap derivatives






5,490







5,490Total Liabilities

$
91,593


$
260,952






$
352,545   Readily marketable inventories 
  Commodity, freight and foreign currency
    derivatives 
 19




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
  and/or
  Short-term investments 
  Available-for-sale investments 
  Rabbi Trust assets 
  Interest rate swap derivatives
    Level 3 InstrumentsShort-Term InvestmentsBalance, September 1, 2008

$
7,154Total losses (realized/unrealized) included in marketing,
    general and administrative expense


(908
)Purchases, issuances and settlements


(3,836
)Transfer in (out) of Level 3Balance, May 31, 2009

$
2,410     Note 12.
    Commitments
    and Contingencies  Guarantees
   20




---



##### Table of Contents



CHS INC.
    AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
    (Unaudited)  (Continued)
    Guarantee/


Exposure onMaximum


May 31,






Triggering

Recourse

Assets HeldEntities

Exposure


2009


Nature of Guarantee

Expiration Date

Event

Provisions

as CollateralMountain Country, LLC

$
150


$
6


Obligations by Mountain Country, LLC under credit agreement

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

Credit agreement default

Subrogation against Mountain Country, LLC

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

$
377



377


Obligations by Morgan County Investors, LLC under credit
    agreement

When obligations are paid in full, scheduled for year 2018

Credit agreement default

Subrogation against Morgan County Investors, LLC

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

$
5,000






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

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

Nonperformance under flour sales agreement

Subrogation against Horizon Milling, LLC

NoneTEMCO, LLC

$
35,000






Obligations by TEMCO under credit agreement

None stated

Credit agreement default

Subrogation against TEMCO, LLC

NoneTEMCO, LLC

$
1,000



1,000


Obligations by TEMCO under counterparty agreement

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

Nonpayment

Subrogation against TEMCO, LLC

NoneThird parties


*



1,000


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

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

Nonpayment

Subrogation against affiliates

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

$
800



800


Obligations by individual producers under credit agreements for
    which CHS guarantees a certain percentage.  Obligations are for
    livestock production facilities where CHS supplies the nutrition
    products

Various

Credit agreement default by individual producers

Subrogation against borrower

NoneCofina Financial, LLC

$
16,500



12,184


Loans made by Cofina to our customers that are participated with
    other lenders

None stated

Credit agreement default

Subrogation against borrower

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

$
5,674



5,674


Outstanding letter of credit from CoBank to Agriliance LLC

None stated

Default under letter of credit reimbursement agreement

Subrogation against borrower

NoneAgriliance LLC

$
500



500


Vehicle operating lease obligations of Agriliance LLC

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

Lease agreement default

Subrogation against Agriliance LLC

None$
21,541     *
    
    The maximum exposure on any give date is equal to the actual
    guarantees extended as of that date, not to exceed
    $1.0 million. 21




---



##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  General
  Form 10-Q, Form 10-K, Form 10-Q.
    ®
           22




---



##### Table of Contents



Results
    of Operations
  Comparison
    of the three months ended May 31, 2009 and
    2008
  General.
    lower-of-cost
 23




---



##### Table of Contents



Net Income.
  Revenues.
     24




---



##### Table of Contents



Cost of Goods Sold.
   25




---



##### Table of Contents



lower-of-cost lower-of-cost
      Marketing, General and
    Administrative.
  Loss (Gain) on Investments.
 26




---



##### Table of Contents



Interest, net.
  Equity Income from Investments.
         27




---



##### Table of Contents



Minority Interests.
  Income Taxes.
  Comparison
    of the nine months ended May 31, 2009 and
    2008
  General.
    lower-of-cost
 28




---



##### Table of Contents



Net Income.
  Revenues.
     29




---



##### Table of Contents



Cost of Goods Sold.
   30




---



##### Table of Contents



lower-of-cost lower-of-cost
      Marketing, General and
    Administrative.
  Loss (Gain ) on Investments.
  available-for-sale
  Interest, net.
 31




---



##### Table of Contents



Equity Income from Investments.
          Minority Interests.
 32




---



##### Table of Contents



Income Taxes.
  Liquidity
    and Capital Resources
    364-day 364-day
    Cash
    Flows from Operations
     33




---



##### Table of Contents



Cash
    Flows from Investing Activities
     34




---



##### Table of Contents



35




---



##### Table of Contents



Cash
    Flows from Financing Activities
  Working
    Capital Financing
  364-day
   36




---



##### Table of Contents



Cofina
    Financial Financing
        Long-term
    Debt Financing
           37




---



##### Table of Contents



Form 10-K
      Other
    Financing
       38




---



##### Table of Contents



Form S-1
    Off
    Balance Sheet Financing Arrangements
  Lease
    Commitments:
  Form 10-K
  Guarantees:
    Debt:
   39




---



##### Table of Contents



Cofina
    Financial:
    Contractual
    Obligations
  Form 10-K
  Critical
    Accounting Policies
  Form 10-K
  Effect of
    Inflation and Foreign Currency Transactions
    Recent
    Accounting Pronouncements
    SFAS No. 141R-1, SFAS No. 141R-1
   40




---



##### Table of Contents




    FSP
    No. SFAS 157-4,
    Determining Fair Value When the Volume and Level of
    Activity for the Asset or Liability Have Significantly Decreased
    and Identifying Transactions That Are Not Orderly,
    provides additional guidance on measuring the fair value of
    financial instruments when market activity has decreased and
    quoted prices may reflect distressed transactions. It reaffirms
    that the exit price remains the objective of a fair-value
    measurement;
    FSP
    No. SFAS 115-2
    and
    FAS 124-2,
    Recognition and Presentation of
    Other-Than-Temporary
    Impairments, amends the
    other-than-temporary
    impairment accounting guidance for debt securities. This FSP
    requires that
    other-than-temporary
    impairment be separated into the amount of the total impairment
    related to credit losses and the amount of the total impairment
    related to all other factors. The amount of the total impairment
    related to credit losses is recognized in earnings and the
    amount related to all other factors is recognized in other
    comprehensive income. This FSP also enhances existing
    disclosures for
    other-than-temporary
    impairments on debt and equity securities; and
    FSP
    No. SFAS 107-1
    and APB
    No. 28-1,
    Interim Disclosures about Fair Value of Financial
    Instruments, requires disclosures about fair value of
    financial instruments at interim reporting periods, including
    disclosure of the significant assumptions used to estimate the
    fair value of those financial instruments. The guidance relates
    to fair value disclosures for any financial instruments that are
    not currently reflected on the balance sheet at fair value.  SFAS 157-4, SFAS 115-2 124-2, SFAS 107-1 28-1
       41




---



##### Table of Contents



CAUTIONARY
    STATEMENTS FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE
    SECURITIES LITIGATION REFORM ACT
    Form 10-K
  
    Our revenues and operating results could be adversely affected
    by changes in commodity prices.
    Our operating results could be adversely affected if our members
    were to do business with others rather than with us.
    We participate in highly competitive business markets in which
    we may not be able to continue to compete successfully.
    Changes in federal income tax laws or in our tax status could
    increase our tax liability and reduce our net income.
    We incur significant costs in complying with applicable laws and
    regulations. Any failure to make the capital investments
    necessary to comply with these laws and regulations could expose
    us to financial liability.
    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. 42




---



##### Table of Contents




    Our cooperative structure limits our ability to access equity
    capital.
    Consolidation among the producers of products we purchase and
    customers for products we sell could adversely affect our
    revenues and operating results.
    If our customers choose alternatives to our refined petroleum
    products our revenues and profits may decline.
    Operating results from our agronomy business could be volatile
    and are dependent upon certain factors outside of our control.
    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 3.
    Quantitative
    and Qualitative Disclosures About Market Risk  Form 10-K
  Item 4T.
    Controls
    and Procedures  Rule 13a-15(e)
  Rule 13a-15(f)
 43




---



##### Table of Contents



PART II.
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings    Item 1A.
    Risk
    Factors  Form 10-K
  Item 6.
    Exhibits  Exhibit

Description10
.1

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)31
.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 200231
.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 200232
.1

Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 200232
.2

Certification Pursuant to 18 U.S.C. Section 1350, as
    Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002  44




---



##### Table of Contents



SIGNATURES    CHS Inc.
  John
    Schmitz
   Executive Vice President and
 Chief Financial Officer
   45