Energy sales, including at the Laurel refinery, helped CHS Inc. more than double its earnings for the last quarter.
But having a 106 percent increase in profits in one quarter won't last, according to CHS corporate communications director Lani Jordan at headquarters in St. Paul, Minn.
"We had a really excellent quarter in our energy business, but the domestic energy picture has changed," she said. "If you look nationwide at the refining business, we've seen a tremendous narrowing of the profit spread."
That means the price spread between a barrel of crude oil and the refined product is less. Demand also has dropped since last fall, she said.
"The energy picture looks very, very different now," Jordan said. "On the East Coast, you see some refiners actually closing down refineries."
CHS's fiscal year starts on Sept. 1, so its first quarter ended Nov. 30, 2011.
For those three months, the farmer/rancher cooperative earned $416 million on its U.S. and international sales, up from nearly $202 million the previous year.
Earnings on grains, oilseeds and retail store sales dropped. So, did earnings in food manufacturing. But CHS' earnings in energy were hot for that quarter, jumping from $57 million the previous year to $397 million.
The majority of that growth came from two refineries, the one in Laurel and one in Kansas.
Jordan said the company doesn't disclose sales figures for individual plants, including Laurel. But, she said completing Laurel's $400 million coker upgrade has boosted production. During the coker's dedication in 2008, company officials said it would increase production by as much as 20 percent.
"Being in a rural area and being a primary supplier to agriculture, diesel is the main product our customers want," she said.
About 345 people work at the Laurel refinery, pipeline and related businesses, according to refinery manager Pat Kimmet.
CHS doesn't have access to the crude oil from the Bakken wells in western North Dakota and Eastern Montana to feed its refineries, she said.
But the co-op sells refined petroleum products to the oil fields.
Last year, CHS budgeted nearly $50 million to improve delivery systems for its refined products in Montana and North Dakota, including building more storage tanks in Laurel, Glendive and Minot, N.D.
At the Laurel refinery, CHS is installing two storage tanks, each capable of holding 120,000 barrels, and is building a new loading rack. The tanks should be installed early this year. The ramp should be completed by the fall of 2013.
At its Glendive pipeline terminal, CHS has increased capacity so it can load up to 18 railroad cars per day. And by spring, new pumps and pipes will boost loading rates for trucks by 50 percent.