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Watch consumers' response to food costs, executive says

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Dickinson,North Dakota 58602
The Dickinson Press
Watch consumers' response to food costs, executive says
Dickinson North Dakota 1815 1st Street West 58602

FARGO -- U.S. farmers need to monitor how consumers respond to rising food prices, the leader of one of America's most prominent cooperatives says.


"I don't know what that (response) will be. You need to keep an eye on it," said John Johnson, president and chief executive officer of Inver Grove Heights, Minn.-based CHS.

Johnson spoke Wednesday morning in Fargo to a group of area farmers, farm group leaders, and North Dakota State University students and officials.

CHS, a Fortune 200 company, had record net income of $756.7 million in the 12 months ending Aug. 31, 2007.

CHS - owned by farmers, ranchers, cooperatives and preferred shareholders - is a diversified energy, grains and food company.

Among other things, CHS is North America's third-largest grain exporter and owns

8 percent of Brookings, S.D.-based VeraSun Energy Corp., which by year's end expects to be the nation's largest ethanol producer.

CHS also manufactures, markets and distributes Cenex brand fuels. More than 1,600 retail locations now carry the Cenex brand.

Farmers usually understand what CHS and Cenex are all about, although that's often not the case with urban residents, said Kent Satrang, chief executive officer of PetroServe USA of Fargo, which operates 12 stores, including seven with the Cenex brand, in Cass and Clay counties.

Satrang described Johnson as "a great leader."

Johnson is a native of Rhame in southwestern North Dakota and a graduate of Blacks Hills State University in Spearfish, S.D.

He told NDSU students Wednesday that his experience shows "there are a lot of opportunities for people who didn't graduate from Harvard or Stanford."

Johnson joined the company in 1976 as a feed consultant. He rose through the ranks and became president in 1998.

Johnson said he's a big supporter of alternative fuels.

But, "I am kind of concerned about ethanol," he said.

Eighteen months ago, ethanol enjoyed great momentum. Today, the fuel, mostly made from corn, frequently comes under attack, he said.

Strong crop prices boosted CHS profits last year.

Johnson said he's determined for CHS to foster a culture of enterprise that will help the company when crop prices aren't good.

The Forum and The Dickinson Press are both owned by Forum Communications Co.