The proxy is solicited by the board of governors (the "Board") of Red Trail Energy, LLC (the "Company") for use at the 20212022 annual meeting of members of the Company to be held electronically on Thursday, March 25, 202124, 2022 (the "2021"2022 Annual Meeting"), and at any adjournment thereof. Due to concerns regarding the ongoing COVID-19 pandemic, and current state restrictions on public gatherings, the 20212022 Annual Meeting will be held electronically. There will be no in person meeting. The 20212022 Annual Meeting will commence at approximately 12:301:00 p.m. CST. In order to join the 20212022 Annual Meeting, you must first register for the meeting. Directions to register for and join the 20212022 Annual Meeting are provided below. Votes will not be accepted at the electronic meeting. If you wish to vote, you must submit a proxy card.

This solicitation is being made pursuant to the SEC's internet availability of proxy materials rules, however the Company may also use its officers, directors and employees (without providing them with additional compensation) to solicit proxies from members in person or by telephone, facsimile, email or letter. Distribution of this proxy statement and a proxy card is scheduled to begin on or about January 28, 20212022 at which time the proxy statement and proxy card will be available for printing and viewing at the Company's website at www.redtrailenergy.com.

The Company has seven governors.  Each governor is elected to a three year term.  The terms of the governors are staggered, so that the terms of no more than three governors expire every three years. The staggering of the terms of the governors commenced at the annual meeting of the members which was held on May 30, 2007, at which meeting two governors were elected to an initial one year term (Group I), two governors were elected to an initial two year term (Group II), and three governors were elected to an initial three year term (Group III). The Company's current governors, listed by group, are as follows:

The Nominating Committee of the Board is comprised of Ron Aberle, Ambrose Hoff, Frank Kirschenheiter, Sid Mauch,Mike Appert and Anthony MockWilliam Price and is responsible for selecting candidates for governor. The Nominating Committee undertook a review of all prospective nominees.  Mike AppertFrank Kirschenheiter, Sid Mauch and William Price,Anthony Mock, the Group IIIII incumbent governors, were considered for nomination to their existing seats. In addition, the Nominating Committee nominated Lynn Bergman and Syd Lawler.

Based on this evaluation of the nominees, the Nominating Committee recommendedbelieves that Mike Appert and William Price be nominated for election as Group II governors,each of the nominees is qualified to serve untilon the 2024 annual meeting or until their successors are duly electedBoard. Lynn Bergman, Frank Kirschenheiter, Syd Lawler, Sid Mauch and qualified.  Mike Appert and William PriceAnthony Mock have each consented to being named in the proxy statement and to serve if elected. The Board recommends that members vote their units in favor of the election of the incumbent governors Mike Appert and William Price.

The twothree nominees who receive a plurality of the votes for the election of governors will be elected to the position of governor.  If you fail to mark a vote, the proxies solicited by the Board will be voted in favor of the Board's recommended nominees andas withheld votes, but your units will be equally distributed betweenincluded for purposes of determining whether a quorum is present at the two Board recommended nominees.meeting. If you do not submit a proxy card, your vote will not be counted as a vote for or against any nominee and you will not be counted as present for purposes of determining a quorum. If you withhold your vote, your vote will not be counted as a vote for or against any nominee but will be counted for purposes of determining a quorum.

The following table contains certain information with respect to the nominees for election to the Board at the 20212022 Annual Meeting:

Mr. Appert currently serves as vice chairman of the Board and has served as a governor since our inception. Mr. Appert's term as a governor will expire at the 20212024 annual meeting. Mr. Appert will continue as the Company's vice chairman until his earlier resignation or removal.  He previously served as chairman and secretary.  Mr. Appert is also a member of our Compensation and Risk Management Committees.

Mr. Appert has been the owner and president of Appert Acres, Inc., a corn, soybean, sunflowers and small grains farming operation since 1991, as well as operating a Mycogen Seeds Dealership.  He also serves on several boards which include the Hazelton Airport Authority as president, the Goose Lake Chapter Pheasants Forever as treasurer, the St. Paul Catholic Church Finance Council, and the North Dakota Soybean Council. Mr. Appert has a degree in Financial Management from the University of North Dakota. Mr. Appert was selected as a nominee based on his prior experience with the Company and the ethanol industry as well as his business and agricultural experience and he has agreed to serve if he is elected.

Mr. Price has served as a governor since our inception. Mr. Price's term as a governor will expire at the 20212024 annual meeting. Mr. Price currently serves as a member of the Audit and Compensation Committees.  Mr. Price served as vice president from inception of the Company until May 2007, and until recently served as secretary.

Since 1980, Mr. Price has been the managing partner and is currently vice president of Price Cattle Ranch LLP, a cattle operation.  Since 1997, he has been the managing partner and is currently the president of Missouri River Feeders LLP, a feedlot and diversified farm.  He also serves as a governor of Dakota Beef Growers, LLC, a specialized beef operation, and is a governor of Sunnyside Feeds, LLC, a custom feed plant.  Mr. Price is also a governor of North Dakota Sow Center LLLP, a 10,000 head ISO wean facility.  Mr. Price is a member of multiple associations, including the North Dakota Stockmen's Association, the National Cattlemen's Beef Association, and the Great Bend Irrigation District, and has served on the Missouri Slope Irrigation Board of Governors and served as chairman of the North Dakota Feeder Council. Mr. Price was selected as a

Mr. Bachmeier has served as the Company's Chief Executive Officer since July 2010 and has been involved in the ethanol industry for the past twenty-eightthirty-one years. He has served as a Plant Manager of Morris Ag Energy and Chief Marketing Manager of United Ethanol Sales. He was instrumental in the design, formation and construction of DENCO, LLC and was the major role player for the acquisition of Morris Ag Energy. Mr. Bachmeier has held various board positions with many industry trade groups including the Renewable Fuels Association and the Minnesota Coalition for Ethanol. Mr Bachmeier currently serves on the board for the Renewable Fuels Marketing Group and the North Dakota Ethanol Council, and is the current President of the North Dakota Ethanol Producers Association. Mr. Bachmeier serves at the pleasure of the Board until his earlier resignation or removal and pursuant to the terms of his employment contract.

Ms. Johnson has served as the Company's Chief Financial Officer since April 2013. She is a Certified Public Accountant who operated her own tax preparation service for the last six years where she prepared tax returns and provided other financial services for her clients. Ms. Johnson was also the Accounting Assistant and then Controller for the Theodore Roosevelt Medora Foundation since August 2004 where she prepared financial statements, supervised other accounting staff and performed other accounting related duties. Ms. Johnson serves at the pleasure of the Board until her earlier resignation or removal.

Mr. Willett has served as the Company's Chief Operating Officer since June 2016. Prior to becoming the COO he served as the Company's Maintenance Manager since March 2013. Mr. Willett was a General Foremen for Industrial Contractors Inc. for eight years prior to beginning his employment with the Company. Mr. Willett serves at the pleasure of the Board until his earlier resignation or removal.

Mr. Wiege has served as the Company's Grain Merchandiser since December 2008 and currently servers on our Risk Management Committee. Prior to his employment with the Company he worked at the Bobcat Company in Bismarck as an Assembly Mechanic for four years. Mr. Wiege serves at the pleasure of the Board until his earlier resignation or removal.

For purposes of our governors, governor nominees, management and members who beneficially own 5% or more of the membership units, beneficial ownership is determined in accordance with the rules of the SEC. Except as indicated by footnote, a person named in the tables below has sole voting and sole investment power for all membership units beneficially owned by that person. In addition, unless otherwise indicated, all persons named below can be reached at Red Trail Energy, LLC at 3682 Highway 8 South, P.O. Box 11, Richardton, ND 58652.

There are no persons known by management that have beneficial ownership of 5% or more of the outstanding membership units as of January 28, 2021.

The Board generally meets once per month. The Board held twelveeleven regularly scheduled meetings and fourone special meetingsmeeting during the fiscal year ended September 30, 2020.2021. Each governor attended at least 75% of the meetings of the Board during the fiscal year ended September 30, 2020.2021.

The Board does not have a formalized process for holders of membership units to send communications to the Board. The Board feels this is reasonable given the accessibility of our governors. Members desiring to communicate with the Board are free to do so by contacting a governor. The names of our governors are listed on the Company's website at www.redtrailenergyllc.com/investors/board_of_directorshttps://redtrailenergy.com/fccp-board-directors-20592 or are available by calling the Company's office at (701) 974-3308.

The Board does not have a policy with regard to governors' attendance at annual meetings. Last year, all seven governors attended the Company's annual meeting. Due to this high attendance record, it is the view of the Board that such a policy is unnecessary.

All of our governors and nominees are independent, as defined by our Audit Committee Charter. In evaluating the independence of our governors and nominees, we considered the following factors: (i) the business relationships of our

We do not have a policy prohibiting our directors, officers or employees from purchasing financial instruments that are designed to hedge or offset any decrease in the market value of the Company's membership units held by such persons.  As a limited liability company, we are required to restrict the transfers of our membership units in order to preserve our partnership tax status. Our membership units may not be traded on any established securities market or readily traded on a secondary market (or the substantial equivalent thereof). Because there is no public market for our units, it is the view of the Board that such a policy is unnecessary.

The Company is managed by a Chief Executive Officer that is separate from the Chairman of the Board. The Board has determined that its leadership structure is effective to create checks and balances between the executive officers of the Company and the Board. The Board is actively involved in overseeing all material risks that face the Company. The Board administers its oversight functions by reviewing the operations of the Company, by overseeing the executive officers' management of the Company, and through its risk management committee.

The Company has adopted a Code of Business Conduct that applies to all of our employees, officers and governors, and a Code of Ethics for Senior Financial Officers that applies to our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Grain Merchandiser and other persons performing similar functions.  The Code of Business Conduct and Code of Ethics are available on the Investors section of our website at www.redtrailenergyllc.com/investors/how_to_invest.https://redtrailenergy.com/fccp-how-invest-20588.  

The Board has four standing committees: the Audit Committee, Compensation Committee, Nominating Committee and Risk Management Committee. Each committee member attended at least 75% of the committee meetings for all committees on which they served.

The Audit Committee of the Board operates under a charter adopted by the Board on December 22, 2010. A copy of our Audit Committee charter is posted on our website at www.redtrailenergyllc.com/investors/how_to_invest.https://redtrailenergy.com/fccp-how-invest-20588. Under the charter, the Audit Committee must have at least three members.  Our Audit Committee members are Ronald Aberle, Ambrose Hoff and William Price. The chairperson of the Audit Committee is Mr. Aberle. Our Audit Committee currently does not have an individual designated as a financial expert and has communicated this to the Nominating Committee for their consideration as they review potential nominees for the Board.  The reason the Audit Committee does not have a financial expert is that none of our current governors qualify as a financial expert. Since the Company is not registered with a national securities exchange, the Audit Committee is exempt from the independence listing standards required by such national securities exchanges. Our Audit Committee charter requires a majority of our committee members to be independent as defined in the Audit Committee charter. All three members of our Audit Committee are independent as required by our Audit Committee charter.

The Audit Committee held five meetings during the fiscal year ended September 30, 2020.2021.  Each audit committee member attended at least 75% of the audit committee meetings during the fiscal year ended September 30, 2020.2021.

The Audit Committee delivered the following report to the Board of the Company on December 18, 2019.14, 2021. The following report of the Audit Committee shall not be deemed to be incorporated by reference in any previous or future documents filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates the report by reference in any such document.

The Audit Committee reviews the Company's financial reporting process on behalf of the Board. Management has the primary responsibility for the financial statements and the reporting process.  The Company's independent auditors are responsible for expressing an opinion on the conformity of the audited financial statements to generally accepted accounting principles.  The Audit Committee reviewed and discussed with management the Company's audited financial statements as of and for the fiscal year ended September 30, 2020.2021.  The committee has discussed with Eide Bailly LLP, its independent

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements referred to above be included in the Company's annual report on Form 10-K for the fiscal year ended September 30, 2020.2021.

The Audit Committee has selected Eide Bailly LLP as the independent registered public accountants for the fiscal year October 1, 20202021 to September 30, 2021.2022. A representative of Eide Bailly LLP is expected to be represented at the 20212022 Annual Meeting to respond to questions from the members and will have an opportunity to make a statement if they desire.

The Board is required to pre-approve all audit and non-audit services performed by the Company's independent auditor to assure that the provision of such services does not impair the auditor's independence.  All audit and non-audit services performed by the Company's independent auditor during 2020 and 2021 were pre-approved by the Board. The Board will not authorize the independent auditor to perform any non-audit service which independent auditors are prohibited from performing under the rules and regulations of the Securities and Exchange Commission or the Public Company Accounting Oversight Board. The Board may delegate its pre-approval authority to one or more of its governors, but not to management. The governor or governors to whom such authority is delegated shall report any pre-approval decisions to the Board at its next scheduled meeting.

The Company's standing Compensation Committee consists of all members of the Board. Sid Mauch serves as the chairman of the Compensation Committee. The Compensation Committee has the overall responsibility for approving and evaluating the Company's governorgovernors' and Chief Executive Officer's compensation. Each member of the Compensation Committee is independent pursuant to the independence standard included in the Company's Audit Committee charter. The Compensation Committee has delegated to the Chief Executive Officer the authority to set compensation for lower executive officers, including the Company's Chief Financial Officer, Chief Operating Officer and Grain Merchandiser, and also the authority to implement compensation plans, policies and programs consistent with the Company's philosophy and objectives. The Compensation Committee has not engaged compensation consultants or any other person to assist in determining or recommending the amount or form of executive or governor compensation, but would consider doing so in those situations where it felt such an engagement was warranted or appropriate.  

The Compensation Committee does not operate under a charter and is exempt from the independence listing standards because the Company's securities are not listed on a national securities exchange or listed in an automated inter-dealer quotation system or a national securities association or to issuers of such securities. The Compensation Committee held one meeting during the fiscal year ended September 30, 20202021 and each member of the Compensation Committee attended the meeting.

The Nominating Committee of the Board consists of Ron Aberle, Mike Appert, Ambrose Hoff Frank Kirschenheiter, Sid Mauch, and Anthony Mock.William Price. Mr. MauchAppert serves as chairman of the Nominating Committee. Each member of the Nominating Committee is independent pursuant to the independence standard included in the Company's Audit Committee charter. The Nominating Committee held one meeting during the fiscal year ended September 30, 20202021 and each member of the Nominating Committee attended the meeting.  The Nominating Committee does not operate under a written charter.

 

Our Nominating Committee will consider governor candidates recommended by members.members in accordance with the Company's Operating Agreement.  Members interested in submitting the name of a candidate for consideration as governor should send a letter to the Secretary of the Company, P.O. Box 11, 3682 Highway 8 South, Richardton, ND 58652, and specify that the letter should be forwarded to the chairman of the Nominating Committee.  The Board has not yet adopted a formal policy regarding qualifications of governor candidates and we do not have a policy regarding considering diversity in governor nominees.  In evaluating governor nominees, the nominatingNominating Committee and the Board considers a variety of factors, including the appropriate size of the Board; our needs with respect to the particular talents and experience of our governors; the knowledge, skills and experience of nominees, including experience in the ethanol, corn or feed industries, finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the Board; experience with accounting rules and practices; and the desire to balance the benefit of continuity with the periodic injection of the fresh perspective provided by new Board members.  To date, we have not engaged third parties to identify or evaluate or assist in identifying potential nominees, although we reserve the right in the future to retain a third party search firm, if necessary.

On July 31, 2008, the Board adopted an Amended and Restated Operating Agreement, which provided that members must give advance notice to the Company of any business that they propose to bring before an annual meeting or of any person that they propose be nominated as a governor.  Under the advance notice provision, to be timely a member's notice must be received at the principal executive offices of the Company not less than 60 days nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting of members.  With regard to governor nominations, the notice must also set forth (a) the name and address of the member who intends to make the nomination, (b) the name, age, business address and, if known, residence address of each person so proposed, (c) the principal occupation or employment of each person so proposed for the past five years, (d) the number of membership units of the Company beneficially owned by each person so proposed and the earliest date of acquisition of any such membership units, (e) a description of any arrangement or understanding between each person so proposed and the member(s) making such nomination with respect to such person's proposal for nomination and

     

The Risk Management Committee of the Board consists of Ronald Aberle, Mike Appert, Sid Mauch and Anthony Mock. Mr. Appert serves as chairman of the Risk Management Committee. The Risk Management Committee is involved in setting the direction for the Company in relation to its corn and ethanol hedging strategies. The Risk Management Committee met fifty-ninesixty-two times during our fiscal year ended September 30, 20202021 and each committee member attended at least 75% of the committee meetings.

The Board has adopted a written policy requiring all governors, officers and employees, and their immediate family members to notify the Board about any transaction, of any size, with the Company.  The Board is responsible for enforcing this policy. Some of our governors, officers and employees and their immediate family members have sold corn to the Company or purchased E85 or distillers grains from the Company.  These purchases and sales were made on terms available to all parties that do business with the Company, and were as follows for our 20202021 fiscal year:

 

Ronald Aberle, a governor, and nominee, and a company owned in part by Mr. Aberle, sold corn to the Company in an amount equal to $2,474,633$2,669,247 during our fiscal year ended September 30, 2020.2021.

 

Mike Appert, a governor, and various companies owned in part by Mr. Appert, sold corn to the Company in an amount equal to $3,803,043$1,613,967 and had E85 purchases in an amount equal to $8,490$7,900 during our fiscal year ended September 30, 2020.2021.

Ambrose Hoff, a governor, and nominee, sold corn to the Company in an amount equal to $163,509$210,325, received land rent for the CCS project of $6,936, and had E85 purchases of $1,016$1,155 during our fiscal year ended September 30, 2020.2021.

Anthony Mock, a governor and nominee, and a company owned in part by Mr. Mock, sold corn to the Company in an amount equal to $342,775$399,961 and had E85 purchases in an amount equal to $2,930$2,100 during our fiscal year ended September 30, 2020.2021.

Gerald Bachmeier, the Company's Chief Executive Officer, and a company owned in part by Mr. Bachmeier, had E85 purchases in an amount equal to $108 and distillers purchases in an amount equal to $10,904$13,460 during our fiscal year ended September 30, 2020.2021.

William Price, a governor, and a company owned in part by Mr. Price, had distillers purchases in an amount equal to $54,463$152,998 during our fiscal year ended September 30, 2020.2021.

Ryan Wiege, the Company's Grain Merchandiser, had E85 purchases in an amount equal to $969$460 during our fiscal year ended September 30, 2020.2021.

Dustin Willett, the Company's Chief Operating Officer, had E85 purchases in an amount equal to $3,047$1,265 during our fiscal year ended September 30, 2020.2021.

Throughout this proxy statement, the individuals who serve as our Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and Grain Merchandiser are referred to as the "executive officers". The Compensation Committee has responsibility for establishing, implementing and regularly monitoring adherence to the Company's compensation philosophy and objectives.

In setting compensation, the Compensation Committee took into account the member vote at our 2020 annual member meeting called the "Say-on-Pay," where the Company's members overwhelming voted to endorse the Company's system of compensating its executive officers.

Our compensation programs are designed to achieve the following objectives:

The Compensation Committee is responsible for determining the nature and amount of compensation for the Company's Chief Executive Officer and has delegated to the Chief Executive Officer the authority to set compensation for lower executive officers, including the Company's Chief Financial Officer, Chief Operating Officer and Grain Merchandiser. The Compensation Committee has also delegated to the Chief Executive Officer the authority to implement compensation plans, policies and programs consistent with the Company's philosophy and objectives.

The Compensation Committee recommended that the Company enter into an employment agreement with the Company's Chief Executive Officer effective July 8, 2010. On April 26, 2017, the agreement was extended until December 31, 2022. The employment agreement provides for an annual base salary and a year-end bonus based on the Company's net income.

The evaluation of the Chief Executive Officer's employment agreement was based on the scope of the chief executive's roles, responsibilities, experience levels and performance, and taking into account competitive market compensation paid by comparable companies for similar positions.

In addition to the base salary, the evaluation of the Chief Executive Officer's employment agreement also included the potential to earn a year-end bonus based on the Company's net income. The Compensation Committee believes that the alignment of bonus potential with the Company's financial performance is consistent with the Company's compensation philosophy and objectives.

None of our executive officers, governors, or employees receives compensation in excess of $1,000,000 and therefore the entire amount of their compensation is deductible by the Company as a business expense. Certain large executive compensation awards are not tax deductible by companies making such awards. None of our compensation arrangements are likely to reach this cap in the foreseeable future.

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management.  Based upon this review and discussion, the Board determined that the Compensation Discussion and Analysis should be included in this proxy statement.

None of the members of the executive compensation committee is or has been an employee of the Company. There are no interlocking relationships between the Company and other entities that might affect the determination of the compensation of our executive officers.

The Company entered into an employment agreement with Gerald Bachmeier for the position of Chief Executive Officer of the Company effective July 8, 2010. The term of this agreement terminates on December 31, 2022 and is subject to customary termination provisions.    The employment agreement provides for an annual base salary as well as a year-end bonus based on the Company's net income.

We do not have any employment agreements with any other officer or governor.

Pursuant to our governor compensation policy, we currently pay governor fees as follows:

The compensation policy also provides for reimbursement to governors for all out-of-pocket costs and mileage for travel to and from meetings and other locations to perform these tasks.

 

In the fiscal year ended September 30, 2020,2021, the Company had incurred an aggregate of $116,764$140,125 in governor fees and related expenses.

The Company's annual report to the Securities and Exchange Commission on Form 10-K, including the financial statements and the notes thereto, for the fiscal year ended September 30, 2020,2021, accompanies this proxy statement.