From the desk of Jay Minton:

December 30, 2009

   If you are a member of CHS Inc, you should have received a letter from CHS dated December 14, 2009.  This letter was pertaining to IRS rules on “Production Activities Deduction” Section 199 Deduction.

 My first comment is that I suggest you discuss with your tax preparer.  You can also search the internet for information pertaining to this deduction.  I was able to find about 14 pages of the IRS code on this topic.  This did not mean much to me but I am confident that a professional tax preparation person can explain much better.

 My understanding or interpretation is that this section deals with a tax deduction for domestic manufacturing.  CHS will potentially qualify to utilize this deduction for the 2009 tax year.  The nice thing about CHS being “your business” or owned by the members it serves, is that you will potentially have the opportunity to utilize this type of deduction for tax year 2010 because you are a member of CHS and do business with it. 

 Again, please contact your tax professional and challenge them to provide you with more details on this subject.

 Sincerely,

 Jay Minton

General Manager