Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 14, 2017 | |
Document Information [Line Items] | ||
Entity Registrant Name | LAKE AREA CORN PROCESSORS LLC | |
Entity Central Index Key | 1,156,174 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 29,620,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 10,923,233 | $ 9,993,335 |
Accounts receivable | 1,559,495 | 4,054,667 |
Other receivables | 13,880 | 25,216 |
Inventory | 7,463,472 | 6,212,619 |
Derivative financial instruments | 707,585 | 1,057,465 |
Prepaid expenses | 78,645 | 237,823 |
Total current assets | 20,746,310 | 21,581,125 |
PROPERTY AND EQUIPMENT | ||
Land | 874,473 | 874,473 |
Land improvements | 8,639,219 | 9,449,920 |
Buildings | 8,955,206 | 8,955,206 |
Equipment | 53,037,611 | 52,614,358 |
Construction in progress | 1,862,994 | 0 |
Gross Property and Equipment | 73,369,503 | 71,893,957 |
Less accumulated depreciation | (39,238,714) | (37,069,755) |
Net property and equipment | 34,130,789 | 34,824,202 |
OTHER ASSETS | ||
Goodwill | 10,395,766 | 10,395,766 |
Investments | 19,709,685 | 11,192,032 |
Other | 54,304 | 122,964 |
Total other assets | 30,159,755 | 21,710,762 |
TOTAL ASSETS | 85,036,854 | 78,116,089 |
CURRENT LIABILITIES | ||
Outstanding checks in excess of bank balance | 1,376,741 | 1,035,671 |
Accounts payable | 4,821,573 | 7,670,550 |
Accrued liabilities | 456,181 | 592,749 |
Derivative financial instruments | 689,178 | 827,786 |
Current maturities of notes payable | 995,333 | 0 |
Other | 91,323 | 141,323 |
Total current liabilities | 8,430,329 | 10,268,079 |
LONG-TERM LIABILITIES | ||
Notes payable | 6,985,445 | 1,000 |
Other | 21,556 | 25,556 |
Total long-term liabilities | 7,007,001 | 26,556 |
COMMITMENTS AND CONTINGENCIES | ||
MEMBERS' EQUITY (29,620,000 units issued and outstanding) | 69,599,524 | 67,821,454 |
TOTAL LIABILITIES AND MEMBERS' EQUITY | $ 85,036,854 | $ 78,116,089 |
Consolidated Balance Sheets Par
Consolidated Balance Sheets Parenthetical - shares | Sep. 30, 2017 | Dec. 31, 2016 |
MEMBERS' EQUITY, units issued and outstanding | 29,620,000 | 29,620,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
REVENUES | $ 19,479,798 | $ 20,983,806 | $ 63,806,023 | $ 64,551,832 |
COSTS OF REVENUES | 17,511,118 | 18,177,658 | 57,594,260 | 57,677,492 |
GROSS PROFIT | 1,968,680 | 2,806,148 | 6,211,763 | 6,874,340 |
OPERATING EXPENSES | 834,459 | 878,318 | 2,711,909 | 2,647,867 |
INCOME FROM OPERATIONS | 1,134,221 | 1,927,830 | 3,499,854 | 4,226,473 |
OTHER INCOME (EXPENSE) | ||||
Interest and other income | 12,944 | 5,626 | 52,575 | 31,197 |
Equity in net income of investments | 668,512 | 678,201 | 1,189,949 | 1,546,049 |
Interest expense | (330) | (1,262) | (2,308) | (3,785) |
Total other income | 681,126 | 682,565 | 1,240,216 | 1,573,461 |
NET INCOME | $ 1,815,347 | $ 2,610,395 | $ 4,740,070 | $ 5,799,934 |
BASIC AND DILUTED EARNINGS PER UNIT | $ 0.06 | $ 0.09 | $ 0.16 | $ 0.20 |
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING FOR THE CALCULATION OF BASIC & DILUTED EARNINGS PER UNIT | 29,620,000 | 29,620,000 | 29,620,000 | 29,620,000 |
DISTRIBUTIONS DECLARED PER UNIT | $ 0 | $ 0.10 | $ 0.10 | $ 0.20 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
OPERATING ACTIVITIES | ||
Net income | $ 4,740,070 | $ 5,799,934 |
Changes to net income affecting cash and cash equivalents | ||
Depreciation and amortization | 2,237,618 | 2,700,166 |
Distributions in excess of earnings from investments | 1,535,051 | 2,682,701 |
(Increase) decrease in | ||
Receivables | 2,506,509 | (2,472,441) |
Inventory | (1,250,853) | 2,708,598 |
Prepaid expenses | 159,178 | 165,055 |
Derivative financial instruments | 211,272 | 606,548 |
Accounts payable | (2,914,330) | (5,463,377) |
Accrued and other liabilities | (190,569) | (52,884) |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 7,033,946 | 6,674,300 |
INVESTING ACTIVITIES | ||
Insurance proceeds received for damage to equipment | 0 | 1,318,955 |
Purchase of property and equipment | (1,410,191) | (3,383,088) |
Purchase of Investments | 10,052,704 | 0 |
NET CASH (USED IN) INVESTING ACTIVITIES | (11,462,895) | (2,064,133) |
FINANCING ACTIVITIES | ||
Increase in outstanding checks in excess of bank balance | 341,069 | 385,370 |
Notes Payable Issued | 7,979,778 | 0 |
Principal payments on long-term notes payable | 0 | 55,475 |
Distributions paid to members | (2,962,000) | (5,924,000) |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 5,358,847 | (5,594,105) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 929,898 | (983,938) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 9,993,335 | 8,329,166 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 10,923,233 | 7,345,228 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid during the period for interest | 2,306 | 3,783 |
Capital expenditures in accounts payable | $ 135,003 | $ 656,954 |
Consolidated Statements of Cas6
Consolidated Statements of Cash Flows (Unaudited) Cash Flow Supplemental - USD ($) | 3 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest Paid, Capitalized | $ 52,704 | $ 0 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2017 | |
Nature of Operations [Abstract] | |
Nature of Operations | NATURE OF OPERATIONS Principal Business Activity Lake Area Corn Processors, LLC and subsidiary (the "Company") is a South Dakota limited liability company. The Company owns and manages Dakota Ethanol, LLC ("Dakota Ethanol"), a 40 million -gallon (annual nameplate capacity) ethanol plant, located near Wentworth, South Dakota. Dakota Ethanol sells ethanol and related products to customers located in North America. In addition, the Company has investment interests in six companies in ethanol-related industries. See note 4 for further details. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The unaudited financial statements contained herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America although the Company believes that the disclosures are adequate to make the information not misleading. In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the accompanying financial statements. All adjustments are of a normal and recurring nature. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for a full year. These financial statements should be read in conjunction with the financial statements and notes included in the Company’s audited financial statements for the year ended December 31, 2016 , contained in the annual report on Form 10-K for 2016. Principles of Consolidation The consolidated financial statements of the Company include the accounts of its wholly owned subsidiary, Dakota Ethanol. All significant inter-company transactions and balances have been eliminated in consolidation. Revenue Recognition Revenue from the production of ethanol and related products is recorded when title to the goods and the risks of ownership transfers to customers. Generally, ethanol and related products are shipped FOB shipping point, based on written contract terms between Dakota Ethanol and its customers. Collectability of revenue is reasonably assured based on historical evidence of collectability between Dakota Ethanol and its customers. Interest income is recognized as earned. Shipping costs incurred by the Company in the sale of ethanol, dried distillers grains and corn oil are not specifically identifiable and as a result, revenue from the sale of those products is recorded based on the net selling price reported to the Company from the marketer. Cost of Revenues The primary components of cost of revenues from the production of ethanol and related co-product are corn expense, energy expense (natural gas and electricity), raw materials expense (chemicals and denaturant), and direct labor costs. Shipping costs on modified and wet distillers grains are included in cost of revenues. Inventory Valuation Inventories are generally valued using methods which approximate the lower of cost (first-in, first-out) or net realizable value. In the valuation of inventories and purchase commitments, net realizable value is based on estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. Investment in commodities contracts, derivative instruments and hedging activities The Company is exposed to certain risks related to our ongoing business operations. The primary risks that the Company manages by using forward or derivative instruments are price risks on anticipated purchases of corn and natural gas and the sale of ethanol, distillers grains and distillers corn oil. The Company is subject to market risk with respect to the price and availability of corn, the principal raw material the Company uses to produce ethanol and ethanol by-products. In general, rising corn prices result in lower profit margins and, therefore, represent unfavorable market conditions. This is especially true when market conditions do not allow us to pass along increased corn costs to our customers. The availability and price of corn is subject to wide fluctuations due to unpredictable factors such as weather conditions, farmer planting decisions, governmental policies with respect to agriculture and international trade and global demand and supply. Certain contracts that literally meet the definition of a derivative may be exempted from derivative accounting as normal purchases or normal sales. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from the accounting and reporting requirements of derivative accounting. The Company does not apply the normal purchase and sales exemption for forward corn purchase contracts. As of September 30, 2017 , the Company is committed to purchasing approximately 2.6 million bushels of corn on a forward contract basis with an average price of $3.32 per bushel. The total corn purchase contracts represent 14% of the annual projected plant corn usage. The Company enters into firm-price purchase commitments with natural gas suppliers under which the Company agrees to buy natural gas at a price set in advance of the actual delivery. Under these arrangements, the Company assumes the risk of a price decrease in the market price of natural gas between the time the price is fixed and the time the natural gas is delivered. At September 30, 2017 , the Company does not have any firm-price purchase commitments for natural gas. The Company accounts for these transactions as normal purchases, and accordingly, does not mark these transactions to market. The Company enters into firm-price sales commitments with distillers grains customers under which the Company agrees to sell distillers grains at a price set in advance of the actual delivery. Under these arrangements, the Company assumes the risk of a price increase in the market price of distillers grain between the time the price is fixed and the time the distillers grains are delivered. At September 30, 2017 , the Company is committed to selling approximately 50,000 dry equivalent tons of distillers grains with an average price of $99 per ton. The Company accounts for these transactions as normal sales, and accordingly, does not mark these transactions to market. The distillers grains sales represent approximately 35% of the projected annual plant production. The Company enters into firm-price sales commitments with distillers corn oil customers under which the Company agrees to sell distillers corn oil at a price set in advance of the actual delivery. Under these arrangements, the Company assumes the risk of a price increase in the market price of distillers corn oil between the time the price is fixed and the time the distillers corn oil is delivered. At September 30, 2017 , the Company is committed to selling approximately 1,794,000 pounds of distillers corn oil with an average price of $0.29 per pound. The Company accounts for these transactions as normal sales, and accordingly, does not mark these transactions to market. The distillers corn oil sales represent approximately 16% of the projected annual plant production. The Company does not have any firm-priced sales commitments for ethanol as of September 30, 2017 . The Company enters into short-term forward, option and futures contracts for ethanol, corn and natural gas as a means of managing exposure to changes in commodity and energy prices. All of the Company's derivatives are designated as non-hedge derivatives, and accordingly are recorded at fair value with changes in fair value recognized in net income. Although the contracts are considered economic hedges of specified risks, they are not designated as and accounted for as hedging instruments. As part of our trading activity, the Company uses futures and option contracts offered through regulated commodity exchanges to reduce risk of loss in the market value of inventories and purchase commitments. To reduce that risk, the Company generally takes positions using forward and futures contracts and options. Derivatives not designated as hedging instruments at September 30, 2017 and December 31, 2016 were as follows: Balance Sheet Classification September 30, 2017 December 31, 2016* Forward contracts in gain position $ 5,426 $ 6,491 Futures contracts in gain position 170,463 246,900 Futures contracts in loss position (6,525 ) (12,575 ) Total forward and futures contracts 169,364 240,816 Cash held by broker 538,221 816,649 Current Assets $ 707,585 $ 1,057,465 Forward contracts in loss position (Current Liabilities) $ (689,178 ) $ (827,786 ) *Derived from audited financial statements. Futures contracts and cash held by broker are all with one party and the right of offset exists. Therefore, on the balance sheet, these items are netted in one balance regardless of position. Forward contracts are with multiple parties and the right of offset does not exist. Therefore, these contracts are reported at the gross amounts on the balance sheet. Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas purchases are included as a component of cost of revenues and derivative contracts related to ethanol sales are included as a component of revenues in the accompanying financial statements. Statement of Operations Three Months Ended September 30, Classification 2017 2016 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ 355,428 $ 1,128,300 Forward contracts Cost of Revenues (736,938 ) (598,874 ) Statement of Operations Nine Months Ended September 30, Classification 2017 2016 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ 451,365 $ 1,858,623 Forward contracts Cost of Revenues (962,864 ) (1,765,789 ) Investments The Company has investment interests in six companies in related industries. All of these interests are at ownership shares less than 20%. These investments are all flow-through entities. Per ASC 323-30-S99-1, they are being accounted for by the equity method of accounting under which the Company’s share of net income is recognized as income in the Company’s statements of income and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account. The Company consistently follows the practice of recognizing the net income from investments based on the most recent reliable data. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the fair value of derivative financial instruments, lower of cost or net realizable value accounting for inventory and forward purchase contracts and goodwill impairment evaluation. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) , requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. Generally Accepted Accounting Principles (GAAP) when it becomes effective and permits the use of either a full retrospective or retrospective with cumulative effect transition method. Early adoption is not permitted. The updated standard becomes effective for the Company in the first quarter of fiscal year 2018. The Company is currently evaluating the transition methods. The Company anticipates using the retrospective with cumulative effect transition method. The Company expects to have enhanced disclosures but does not expect this standard to have a material impact on the Company's consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02, "Leases (Topic 842)” (ASU 2016-02). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. The Company does not expect this standard to have a material impact on the Company's consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15 (ASU 2016-15), "Statement of Cash Flows (Topic 230)" (ASU 2016-15). ASU 2016-15 clarifies and provides guidance for specific cash flow issues. The guidance addresses classification for proceeds from insurance settlements and distributions received from equity method investees. ASU 2016-15 is effective for fiscal periods beginning after December 15, 2017. The Company has chosen to early adopt the standard. The Company has chosen the nature of distributions approach for equity method distributions. The Company has also adopted the insurance settlement guidance which includes retrospective application to the 2016 cash flow statement. As a result of this retrospective application, cash provided by operations decreased and cash provided by investing activities increased for the nine months ended September 30, 2016, by approximately $1,319,000 from amounts previously reported on the Company's Form 10-Q for the quarter ended September 30, 2016. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2017 | |
Inventory [Abstract] | |
Inventory | INVENTORY Inventory consisted of the following as of September 30, 2017 and December 31, 2016 : September 30, 2017 December 31, 2016* Raw materials $ 4,114,722 $ 3,217,822 Finished goods 1,552,504 1,124,660 Work in process 462,320 593,197 Parts inventory 1,333,926 1,276,940 $ 7,463,472 $ 6,212,619 *Derived from audited financial statements. |
Investments (Notes)
Investments (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Investments [Abstract] | |
Investments | INVESTMENTS Dakota Ethanol has a 7% investment interest in the Company’s ethanol marketer, Renewable Products Marketing Group, LLC (RPMG). The net income which is reported in the Company’s income statement for RPMG is based on RPMG’s June 30, 2017 unaudited interim results. The carrying amount of the Company’s investment was approximately $1,366,000 and $1,283,000 as of September 30, 2017 and December 31, 2016 , respectively. Dakota Ethanol has a 6% investment interest in Prairie Gold Venture Partnership, LLC (PGVP), a venture capital fund investing in cellulosic ethanol production. The net income which is reported in the Company’s income statement for PGVP is based on PGVP’s December 31, 2016 unaudited interim results. The carrying amount of the Company’s investment was approximately $308,000 as of September 30, 2017 and December 31, 2016 . Dakota Ethanol has a 10% investment interest in Lawrenceville Tanks, LLC (LT), a partnership to operate an ethanol storage terminal in Georgia. The net income which is reported in the Company’s income statement for LT is based on LT’s September 30, 2017 unaudited interim results. The carrying amount of the Company’s investment was approximately $405,000 and $460,000 as of September 30, 2017 and December 31, 2016 , respectively. Lake Area Corn Processors has a 10% investment interest in Guardian Hankinson, LLC (GH), a partnership to operate an ethanol plant in North Dakota. The net income which is reported in the Company’s income statement for GH is based on GH’s September 30, 2017 unaudited interim results. The carrying amount of the Company’s investment was approximately $7,545,000 and $9,108,000 as of September 30, 2017 and December 31, 2016 , respectively. Lake Area Corn Processors has a 17% investment interest in Guardian Energy Management, LLC (GEM), a partnership to provide management services to ethanol plants. The net income which is reported in the Company’s income statement for GEM is based on GEM’s September 30, 2017 unaudited interim results. The carrying amount of the Company’s investment was approximately $33,000 as of September 30, 2017 and December 31, 2016 . Lake Area Corn Processors has an 11% investment interest in Ring-neck Energy and Feeds, LLC (REF), a partnership to operate an ethanol plant in South Dakota. The net income which is reported in the Company’s income statement for REF is based on REF’s September 30, 2017 unaudited interim results. The carrying amount of the Company’s investment was approximately $10,053,000 as of September 30, 2017 . 2017 is the initial year for the investment in REF and it is currently under construction. Condensed, combined unaudited financial information of the Company’s investments in RPMG, PGVP, LT, GH, GEM and REF is as follows: Balance Sheet September 30, 2017 December 31, 2016 Current Assets $ 224,363,318 $ 178,539,108 Other Assets 169,250,980 151,378,628 Current Liabilities 130,572,608 140,898,148 Long-term Liabilities 56,567,493 49,924,355 Members' Equity 206,474,197 139,095,233 Three Months Ended Income Statement September 30, 2017 September 30, 2016 Revenue $ 65,571,510 $ 61,531,795 Gross Profit 9,661,047 13,923,350 Net Income 5,992,656 6,885,415 Nine Months Ended Income Statement September 30, 2017 September 30, 2016 Revenue $ 190,698,705 $ 181,299,712 Gross Profit 20,668,677 37,666,064 Net Income 11,491,803 16,159,237 The following table shows the condensed financial information of Guardian Hankinson, which represents greater than 10% of the Company's net income for the three and nine months ended September 30, 2017 : Balance Sheet September 30, 2017 December 31, 2016 Current Assets $ 23,566,347 $ 31,337,860 Other Assets 121,646,932 133,415,881 Current Liabilities 13,893,874 23,822,812 Long-term Liabilities 56,228,418 49,856,355 Members' Equity 75,090,987 91,074,574 Three Months Ended Income Statement September 30, 2017 September 30, 2016 Revenue $ 62,471,512 $ 58,019,407 Gross Profit 7,782,145 11,684,449 Net Income 6,229,570 5,936,832 Nine Months Ended Income Statement September 30, 2017 September 30, 2016 Revenue $ 180,821,741 $ 169,833,142 Gross Profit 14,680,187 30,394,537 Net Income 10,369,094 12,786,712 The Company recorded equity in net income of approximately $623,000 and $1,037,000 from GH for the three and nine months ended September 30, 2017 , respectively. The Company recorded equity in net income of approximately $593,000 and $1,278,000 from GH for the three and nine months ended September 30, 2016, respectively. The Company recorded equity in net income of approximately $45,000 and $153,000 from its other investments for the three and nine months ended September 30, 2017 , respectively. The Company recorded equity in net income of approximately $85,000 and $268,000 from its other investments for the three and nine months ended September 30, 2016, respectively. |
Short Term Note Payable
Short Term Note Payable | 9 Months Ended |
Sep. 30, 2017 | |
Short Term Note Payable [Abstract] | |
Revolving Operating Note | REVOLVING OPERATING NOTE On November 1, 2016, Dakota Ethanol executed a revolving promissory note from Farm Credit Services of America (FCSA) in the amount up to $10,000,000 or the amount available in accordance with the borrowing base calculation. Interest on the outstanding principal balance will accrue at 300 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 4.25% at September 30, 2017 . There is a non-use fee of 0.25% on the unused portion of the $10,000,000 availability. The note is collateralized by substantially all assets of the Company. The note expires on November 1, 2019. On September 30, 2017 , Dakota Ethanol had $0 outstanding and $2,744,000 available to be drawn on the revolving promissory note under the borrowing base. |
Long Term Notes Payable
Long Term Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Long Term Note Payable [Abstract] | |
Long Term Notes Payable | LONG-TERM NOTES PAYABLE On November 11, 2014, Dakota Ethanol executed a reducing revolving promissory note from FCSA in the amount of $15,000,000 . The amount Dakota Ethanol can borrow on the note decreases by $750,000 semi-annually starting on April 1, 2015 until the maximum balance reaches $7.5 million on October 1, 2019. The note matures on October 1, 2024. Interest on the outstanding principal balance will accrue at 325 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 4.30% at September 30, 2017 . The note contains a non-use fee of 0.5% on the unused portion of the note. On September 30, 2017 , Dakota Ethanol had $1,000 outstanding and $11,249,000 available to be drawn on the note. As part of the note payable agreement, Dakota Ethanol is subject to certain restrictive covenants establishing financial reporting requirements, distribution and capital expenditure limits, minimum debt service coverage ratios, net worth and working capital requirements. The note is collateralized by substantially all assets of the Company. On August 1, 2017, Dakota Ethanol executed a term note from FCSA in the amount of $8,000,000 . Dakota Ethanol agreed to make monthly interest payments starting September 1, 2017 and annual principal payments of $1,000,000 starting on August 1, 2018. The notes matures on August 1, 2025. Interest on the outstanding principal balance will accrue at 325 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 4.50% at September 30, 2017. On September 30, 2017, Dakota Ethanol had $8,000,000 outstanding on the note. As part of the note payable agreement, Dakota Ethanol is subject to certain restrictive covenants establishing financial reporting requirements, distribution and capital expenditure limits, minimum debt service coverage ratios, net worth and working capital requirements. The note is collateralized by substantially all assets of the Company. The balances of the notes payable are as follows: September 30, 2017 December 31, 2016* Note Payable - FCSA $ 8,001,000 $ 1,000 Less unamortized debt issuance costs (20,222 ) — 7,980,778 1,000 Less current portion (995,333 ) — $ 6,985,445 $ 1,000 *Derived from audited financial statements Principal and debt issuance cost maturities for the next five years are estimated as follows: Unamortized debt Years Ending September 30, Principal Issuance costs 2018 $ 1,000,000 $ (4,667 ) 2019 1,000,000 (4,083 ) 2020 1,000,000 (3,500 ) 2021 1,000,000 (2,917 ) 2022 1,000,000 (2,333 ) thereafter 3,001,000 (2,722 ) |
Fair Value Measurements (Notes)
Fair Value Measurements (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The Company complies with the fair value measurements and disclosures standard which defines fair value, establishes a framework for measuring fair value, and expands disclosure for those assets and liabilities carried on the balance sheet on a fair value basis. The Company’s balance sheet contains derivative financial instruments that are recorded at fair value on a recurring basis. Fair value measurements and disclosures require that assets and liabilities carried at fair value be classified and disclosed according to the process for determining fair value. There are three levels of determining fair value. Level 1 uses quoted market prices in active markets for identical assets or liabilities. Level 2 uses observable market based inputs or unobservable inputs that are corroborated by market data. Level 3 uses unobservable inputs that are not corroborated by market data. A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. Derivative financial instruments . Commodity futures and options contracts are reported at fair value utilizing Level 1 inputs. For these contracts, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the CBOT and NYMEX markets. Over-the-counter commodity options contracts are reported at fair value utilizing Level 2 inputs. For these contracts, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the over-the-counter markets. Forward purchase contracts are reported at fair value utilizing Level 2 inputs. For these contracts, the Company obtains fair value measurements from local grain terminal bid values. The fair value measurements consider observable data that may include live trading bids from local elevators and processing plants which are based off the CBOT markets. The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: Total Level 1 Level 2 Level 3 September 30, 2017 Assets: Derivative financial instruments, futures contracts $ 170,463 $ 170,463 $ — $ — forward contracts 5,426 — 5,426 — Liabilities: Derivative financial instruments, futures contracts $ (6,525 ) $ (6,525 ) $ — $ — forward contracts $ (689,178 ) $ — $ (689,178 ) $ — December 31, 2016* Assets: Derivative financial instruments, futures contracts $ 246,900 $ 246,900 $ — $ — forward contracts 6,491 — 6,491 — Liabilities: Derivative financial instruments, futures contracts $ (12,575 ) $ (12,575 ) $ — $ — forward contracts $ (827,786 ) $ — $ (827,786 ) $ — *Derived from audited financial statements. During the three and nine months ended September 30, 2017 , the Company did not make any changes between Level 1 and Level 2 assets and liabilities. As of September 30, 2017 and December 31, 2016 , the Company did not have any Level 3 assets or liabilities. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Dakota Ethanol has a 6% interest in RPMG, and Dakota Ethanol has entered into marketing agreements for the exclusive rights to market, sell and distribute the entire ethanol, dried distillers grains and corn oil inventories produced by Dakota Ethanol. The marketing fees are included in net revenues. Revenues and marketing fees related to the agreements are as follows: Three Months Ended September 30 Nine Months Ended September 30 2017 2016 2017 2016 Revenues ethanol $ 15,468,141 $ 16,064,019 $ 50,916,644 $ 49,529,339 Revenues distillers dried grains 1,010,769 1,734,033 3,786,652 3,890,337 Revenues corn oil 749,923 761,191 2,316,938 2,058,908 Marketing fees ethanol 61,260 42,057 183,780 126,171 Marketing fees distillers dried grains 6,642 10,200 28,986 23,366 Marketing fees corn oil 5,621 6,801 17,661 19,669 September 30, 2017 December 31, 2016* Amounts due included in accounts receivable $ 1,182,457 $ 3,695,561 *Derived from audited financial statements. The Company purchased corn and services from members of its Board of Directors that farm and operate local businesses. The Company also purchased ingredients from RPMG. Purchases during the three and nine months ended September 30, 2017 totaled approximately $212,000 and $898,000 , respectively. Purchases during the three and nine months ended September 30, 2016 totaled approximately $306,000 and $1,683,000 , respectively. As of September 30, 2017 and December 31, 2016, the amount we owed to related parties was approximately $47,000 and $40,000 , respectively. |
Commitments (Notes)
Commitments (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments [Abstract] | |
Commitments Disclosure [Text Block] | COMMITMENTS Dakota Ethanol has committed to a contract for the design and construction of a new regenerative thermal oxidizer (RTO) to replace its existing RTO. The value of the contract is approximately $4.6 million . There is approximately $2.9 million remaining as of September 30, 2017 . The project is expected to be completed in the second quarter of 2018. The Company will pay for the project with cash flows from operations and the long-term revolving debt currently in place. |
Subsequent Event (Notes)
Subsequent Event (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Event [Line Items] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS During November 2017, the Company declared and paid a distribution to its members of $2,962,000 , or $0.10 per capital unit, to unit holders of record as of October 1, 2017. |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements of the Company include the accounts of its wholly owned subsidiary, Dakota Ethanol. All significant inter-company transactions and balances have been eliminated in consolidation. |
Revenue Recognition | Revenue Recognition Revenue from the production of ethanol and related products is recorded when title to the goods and the risks of ownership transfers to customers. Generally, ethanol and related products are shipped FOB shipping point, based on written contract terms between Dakota Ethanol and its customers. Collectability of revenue is reasonably assured based on historical evidence of collectability between Dakota Ethanol and its customers. Interest income is recognized as earned. Shipping costs incurred by the Company in the sale of ethanol, dried distillers grains and corn oil are not specifically identifiable and as a result, revenue from the sale of those products is recorded based on the net selling price reported to the Company from the marketer. |
Cost of Revenues | Cost of Revenues The primary components of cost of revenues from the production of ethanol and related co-product are corn expense, energy expense (natural gas and electricity), raw materials expense (chemicals and denaturant), and direct labor costs. Shipping costs on modified and wet distillers grains are included in cost of revenues. |
Inventory Valuation | Inventory Valuation Inventories are generally valued using methods which approximate the lower of cost (first-in, first-out) or net realizable value. In the valuation of inventories and purchase commitments, net realizable value is based on estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal and transportation. |
Investment in commodities contracts, derivative instruments and hedging activities | Investment in commodities contracts, derivative instruments and hedging activities The Company is exposed to certain risks related to our ongoing business operations. The primary risks that the Company manages by using forward or derivative instruments are price risks on anticipated purchases of corn and natural gas and the sale of ethanol, distillers grains and distillers corn oil. The Company is subject to market risk with respect to the price and availability of corn, the principal raw material the Company uses to produce ethanol and ethanol by-products. In general, rising corn prices result in lower profit margins and, therefore, represent unfavorable market conditions. This is especially true when market conditions do not allow us to pass along increased corn costs to our customers. The availability and price of corn is subject to wide fluctuations due to unpredictable factors such as weather conditions, farmer planting decisions, governmental policies with respect to agriculture and international trade and global demand and supply. Certain contracts that literally meet the definition of a derivative may be exempted from derivative accounting as normal purchases or normal sales. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from the accounting and reporting requirements of derivative accounting. The Company does not apply the normal purchase and sales exemption for forward corn purchase contracts. As of September 30, 2017 , the Company is committed to purchasing approximately 2.6 million bushels of corn on a forward contract basis with an average price of $3.32 per bushel. The total corn purchase contracts represent 14% of the annual projected plant corn usage. The Company enters into firm-price purchase commitments with natural gas suppliers under which the Company agrees to buy natural gas at a price set in advance of the actual delivery. Under these arrangements, the Company assumes the risk of a price decrease in the market price of natural gas between the time the price is fixed and the time the natural gas is delivered. At September 30, 2017 , the Company does not have any firm-price purchase commitments for natural gas. The Company accounts for these transactions as normal purchases, and accordingly, does not mark these transactions to market. The Company enters into firm-price sales commitments with distillers grains customers under which the Company agrees to sell distillers grains at a price set in advance of the actual delivery. Under these arrangements, the Company assumes the risk of a price increase in the market price of distillers grain between the time the price is fixed and the time the distillers grains are delivered. At September 30, 2017 , the Company is committed to selling approximately 50,000 dry equivalent tons of distillers grains with an average price of $99 per ton. The Company accounts for these transactions as normal sales, and accordingly, does not mark these transactions to market. The distillers grains sales represent approximately 35% of the projected annual plant production. The Company enters into firm-price sales commitments with distillers corn oil customers under which the Company agrees to sell distillers corn oil at a price set in advance of the actual delivery. Under these arrangements, the Company assumes the risk of a price increase in the market price of distillers corn oil between the time the price is fixed and the time the distillers corn oil is delivered. At September 30, 2017 , the Company is committed to selling approximately 1,794,000 pounds of distillers corn oil with an average price of $0.29 per pound. The Company accounts for these transactions as normal sales, and accordingly, does not mark these transactions to market. The distillers corn oil sales represent approximately 16% of the projected annual plant production. The Company does not have any firm-priced sales commitments for ethanol as of September 30, 2017 . The Company enters into short-term forward, option and futures contracts for ethanol, corn and natural gas as a means of managing exposure to changes in commodity and energy prices. All of the Company's derivatives are designated as non-hedge derivatives, and accordingly are recorded at fair value with changes in fair value recognized in net income. Although the contracts are considered economic hedges of specified risks, they are not designated as and accounted for as hedging instruments. As part of our trading activity, the Company uses futures and option contracts offered through regulated commodity exchanges to reduce risk of loss in the market value of inventories and purchase commitments. To reduce that risk, the Company generally takes positions using forward and futures contracts and options. Derivatives not designated as hedging instruments at September 30, 2017 and December 31, 2016 were as follows: Balance Sheet Classification September 30, 2017 December 31, 2016* Forward contracts in gain position $ 5,426 $ 6,491 Futures contracts in gain position 170,463 246,900 Futures contracts in loss position (6,525 ) (12,575 ) Total forward and futures contracts 169,364 240,816 Cash held by broker 538,221 816,649 Current Assets $ 707,585 $ 1,057,465 Forward contracts in loss position (Current Liabilities) $ (689,178 ) $ (827,786 ) *Derived from audited financial statements. Futures contracts and cash held by broker are all with one party and the right of offset exists. Therefore, on the balance sheet, these items are netted in one balance regardless of position. Forward contracts are with multiple parties and the right of offset does not exist. Therefore, these contracts are reported at the gross amounts on the balance sheet. Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas purchases are included as a component of cost of revenues and derivative contracts related to ethanol sales are included as a component of revenues in the accompanying financial statements. Statement of Operations Three Months Ended September 30, Classification 2017 2016 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ 355,428 $ 1,128,300 Forward contracts Cost of Revenues (736,938 ) (598,874 ) Statement of Operations Nine Months Ended September 30, Classification 2017 2016 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ 451,365 $ 1,858,623 Forward contracts Cost of Revenues (962,864 ) (1,765,789 ) |
Investments | Investments The Company has investment interests in six companies in related industries. All of these interests are at ownership shares less than 20%. These investments are all flow-through entities. Per ASC 323-30-S99-1, they are being accounted for by the equity method of accounting under which the Company’s share of net income is recognized as income in the Company’s statements of income and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account. The Company consistently follows the practice of recognizing the net income from investments based on the most recent reliable data. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the fair value of derivative financial instruments, lower of cost or net realizable value accounting for inventory and forward purchase contracts and goodwill impairment evaluation |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) , requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. Generally Accepted Accounting Principles (GAAP) when it becomes effective and permits the use of either a full retrospective or retrospective with cumulative effect transition method. Early adoption is not permitted. The updated standard becomes effective for the Company in the first quarter of fiscal year 2018. The Company is currently evaluating the transition methods. The Company anticipates using the retrospective with cumulative effect transition method. The Company expects to have enhanced disclosures but does not expect this standard to have a material impact on the Company's consolidated financial statements. In February 2016, FASB issued ASU No. 2016-02, "Leases (Topic 842)” (ASU 2016-02). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. The Company does not expect this standard to have a material impact on the Company's consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15 (ASU 2016-15), "Statement of Cash Flows (Topic 230)" (ASU 2016-15). ASU 2016-15 clarifies and provides guidance for specific cash flow issues. The guidance addresses classification for proceeds from insurance settlements and distributions received from equity method investees. ASU 2016-15 is effective for fiscal periods beginning after December 15, 2017. The Company has chosen to early adopt the standard. The Company has chosen the nature of distributions approach for equity method distributions. The Company has also adopted the insurance settlement guidance which includes retrospective application to the 2016 cash flow statement. As a result of this retrospective application, cash provided by operations decreased and cash provided by investing activities increased for the nine months ended September 30, 2016, by approximately $1,319,000 from amounts previously reported on the Company's Form 10-Q for the quarter ended September 30, 2016. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Derivatives Not Designated as Hedging Instruments | Derivatives not designated as hedging instruments at September 30, 2017 and December 31, 2016 were as follows: Balance Sheet Classification September 30, 2017 December 31, 2016* Forward contracts in gain position $ 5,426 $ 6,491 Futures contracts in gain position 170,463 246,900 Futures contracts in loss position (6,525 ) (12,575 ) Total forward and futures contracts 169,364 240,816 Cash held by broker 538,221 816,649 Current Assets $ 707,585 $ 1,057,465 Forward contracts in loss position (Current Liabilities) $ (689,178 ) $ (827,786 ) *Derived from audited financial statements. |
Net realized and unrealized gains (losses) related to purchase contracts | Statement of Operations Three Months Ended September 30, Classification 2017 2016 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ 355,428 $ 1,128,300 Forward contracts Cost of Revenues (736,938 ) (598,874 ) Statement of Operations Nine Months Ended September 30, Classification 2017 2016 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ 451,365 $ 1,858,623 Forward contracts Cost of Revenues (962,864 ) (1,765,789 ) |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory [Abstract] | |
Schedule of Inventory | Inventory consisted of the following as of September 30, 2017 and December 31, 2016 : September 30, 2017 December 31, 2016* Raw materials $ 4,114,722 $ 3,217,822 Finished goods 1,552,504 1,124,660 Work in process 462,320 593,197 Parts inventory 1,333,926 1,276,940 $ 7,463,472 $ 6,212,619 *Derived from audited financial statements. |
Investments Investments (Tables
Investments Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Schedule of Equity Method Investments [Line Items] | |
Equity Method Investments | Balance Sheet September 30, 2017 December 31, 2016 Current Assets $ 224,363,318 $ 178,539,108 Other Assets 169,250,980 151,378,628 Current Liabilities 130,572,608 140,898,148 Long-term Liabilities 56,567,493 49,924,355 Members' Equity 206,474,197 139,095,233 Three Months Ended Income Statement September 30, 2017 September 30, 2016 Revenue $ 65,571,510 $ 61,531,795 Gross Profit 9,661,047 13,923,350 Net Income 5,992,656 6,885,415 Nine Months Ended Income Statement September 30, 2017 September 30, 2016 Revenue $ 190,698,705 $ 181,299,712 Gross Profit 20,668,677 37,666,064 Net Income 11,491,803 16,159,237 The following table shows the condensed financial information of Guardian Hankinson, which represents greater than 10% of the Company's net income for the three and nine months ended September 30, 2017 : Balance Sheet September 30, 2017 December 31, 2016 Current Assets $ 23,566,347 $ 31,337,860 Other Assets 121,646,932 133,415,881 Current Liabilities 13,893,874 23,822,812 Long-term Liabilities 56,228,418 49,856,355 Members' Equity 75,090,987 91,074,574 Three Months Ended Income Statement September 30, 2017 September 30, 2016 Revenue $ 62,471,512 $ 58,019,407 Gross Profit 7,782,145 11,684,449 Net Income 6,229,570 5,936,832 Nine Months Ended Income Statement September 30, 2017 September 30, 2016 Revenue $ 180,821,741 $ 169,833,142 Gross Profit 14,680,187 30,394,537 Net Income 10,369,094 12,786,712 |
Long Term Notes Payable (Tables
Long Term Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Long Term Note Payable [Abstract] | |
Schedule of Long-term Debt Instruments | September 30, 2017 December 31, 2016* Note Payable - FCSA $ 8,001,000 $ 1,000 Less unamortized debt issuance costs (20,222 ) — 7,980,778 1,000 Less current portion (995,333 ) — $ 6,985,445 $ 1,000 *Derived from audited financial statements |
Schedule of Principal repayment and amortization of debt issuance cost | Unamortized debt Years Ending September 30, Principal Issuance costs 2018 $ 1,000,000 $ (4,667 ) 2019 1,000,000 (4,083 ) 2020 1,000,000 (3,500 ) 2021 1,000,000 (2,917 ) 2022 1,000,000 (2,333 ) thereafter 3,001,000 (2,722 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | Total Level 1 Level 2 Level 3 September 30, 2017 Assets: Derivative financial instruments, futures contracts $ 170,463 $ 170,463 $ — $ — forward contracts 5,426 — 5,426 — Liabilities: Derivative financial instruments, futures contracts $ (6,525 ) $ (6,525 ) $ — $ — forward contracts $ (689,178 ) $ — $ (689,178 ) $ — December 31, 2016* Assets: Derivative financial instruments, futures contracts $ 246,900 $ 246,900 $ — $ — forward contracts 6,491 — 6,491 — Liabilities: Derivative financial instruments, futures contracts $ (12,575 ) $ (12,575 ) $ — $ — forward contracts $ (827,786 ) $ — $ (827,786 ) $ — |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Three Months Ended September 30 Nine Months Ended September 30 2017 2016 2017 2016 Revenues ethanol $ 15,468,141 $ 16,064,019 $ 50,916,644 $ 49,529,339 Revenues distillers dried grains 1,010,769 1,734,033 3,786,652 3,890,337 Revenues corn oil 749,923 761,191 2,316,938 2,058,908 Marketing fees ethanol 61,260 42,057 183,780 126,171 Marketing fees distillers dried grains 6,642 10,200 28,986 23,366 Marketing fees corn oil 5,621 6,801 17,661 19,669 September 30, 2017 December 31, 2016* Amounts due included in accounts receivable $ 1,182,457 $ 3,695,561 |
Nature of Operations (Details)
Nature of Operations (Details) gal in Millions | 9 Months Ended |
Sep. 30, 2017gal | |
Product Information [Line Items] | |
Equity Method Investments, Number of Entities | 6 |
Ethanol [Member] | Product [Member] | |
Product Information [Line Items] | |
Annual production capacity | 40 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies Investments (Details) bu in Millions | Sep. 30, 2017buT$ / usd_per_lb$ / bu$ / T |
Derivative [Line Items] | |
Equity Method Investments, Number of Entities | 6 |
Corn [Member] | |
Derivative [Line Items] | |
Derivative, Nonmonetary Notional Amount | bu | 2.6 |
Derivative, Average Forward Price | $ / bu | 3.32 |
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage | 14.00% |
Distillers Grain [Member] | |
Derivative [Line Items] | |
Derivative, Nonmonetary Notional Amount | T | 50,000 |
Derivative, Average Forward Price | $ / T | 99 |
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage | 35.00% |
Corn Oil [Member] | |
Derivative [Line Items] | |
Derivative, Nonmonetary Notional Amount | 1,794,000 |
Derivative, Average Forward Price | $ / usd_per_lb | 0.29 |
Derivative, Nonmonetary Notional Amount, Percent of Required Need, Coverage | 16.00% |
Derivative Instruments - Balanc
Derivative Instruments - Balance Sheet (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments and Hedges, Liabilities | $ 689,178 | $ 827,786 |
Derivative Instruments and Hedges, Assets | 707,585 | 1,057,465 |
Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Cash held by broker | 538,221 | 816,649 |
Current Assets [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Current | 169,364 | 240,816 |
Derivative Instruments and Hedges, Assets | 707,585 | 1,057,465 |
Other Current Liabilities [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments and Hedges, Liabilities | 689,178 | 827,786 |
Forward Contracts [Member] | Current Assets [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Current | 5,426 | 6,491 |
Futures contracts in gain position [Member] | Future [Member] | Current Assets [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets, Current | 170,463 | 246,900 |
Futures Contracts held in loss position [Member] | Future [Member] | Other Current Liabilities [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Current | $ 6,525 | $ 12,575 |
Derivative Instruments - Income
Derivative Instruments - Income Statement (Details) - Not Designated as Hedging Instrument [Member] - Cost of Sales [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Forward Contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ (736,938) | $ (598,874) | $ (962,864) | $ (1,765,789) |
Future [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ 355,428 | $ 1,128,300 | $ 451,365 | $ 1,858,623 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies Recently Issued Accounting Pronouncements (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Recently Issued Accounting Pronouncements [Abstract] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 1,319,000 |
Inventory (Details)
Inventory (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory [Abstract] | ||
Raw Materials | $ 4,114,722 | $ 3,217,822 |
Finished Goods | 1,552,504 | 1,124,660 |
Work in Process | 462,320 | 593,197 |
Parts Inventory | 1,333,926 | 1,276,940 |
Inventory | $ 7,463,472 | $ 6,212,619 |
Investments (Details)
Investments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Schedule of Equity Method Investments [Line Items] | |||||
Investments | $ 19,709,685 | $ 19,709,685 | $ 11,192,032 | ||
Equity in net income of investments | 668,512 | $ 678,201 | 1,189,949 | $ 1,546,049 | |
Equity Method Investment, Summarized Financial Information, Current Assets | 224,363,318 | 224,363,318 | 178,539,108 | ||
Equity Method Investment, Summarized Financial Information, Noncurrent Assets | 169,250,980 | 169,250,980 | 151,378,628 | ||
Equity Method Investment, Summarized Financial Information, Current Liabilities | 130,572,608 | 130,572,608 | 140,898,148 | ||
Equity Method Investment, Summarized Financial Information, Noncurrent Liabilities | 56,567,493 | 56,567,493 | 49,924,355 | ||
Equity Method Investment Summarized Financial Information, Equity | 206,474,197 | 206,474,197 | 139,095,233 | ||
Equity Method Investment, Summarized Financial Information, Revenue | 65,571,510 | 61,531,795 | 190,698,705 | 181,299,712 | |
Equity Method Investment, Summarized Financial Information, Gross Profit (Loss) | 9,661,047 | 13,923,350 | 20,668,677 | 37,666,064 | |
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | $ 5,992,656 | 6,885,415 | $ 11,491,803 | 16,159,237 | |
Renewable Products Marketing Group, LLC (RPMG) [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 7.00% | 7.00% | |||
Investments | $ 1,366,000 | $ 1,366,000 | 1,283,000 | ||
Prairie Gold Venture Partnership, LLC (PGVP) [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 6.00% | 6.00% | |||
Investments | $ 308,000 | $ 308,000 | 308,000 | ||
Lawrenceville Tanks, LLC [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 10.00% | 10.00% | |||
Investments | $ 405,000 | $ 405,000 | 460,000 | ||
Guardian Hankinson, LLC [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 10.00% | 10.00% | |||
Investments | $ 7,545,000 | $ 7,545,000 | 9,108,000 | ||
Equity in net income of investments | 623,000 | 593,000 | 1,037,000 | 1,278,000 | |
Equity Method Investment, Summarized Financial Information, Current Assets | 23,566,347 | 23,566,347 | 31,337,860 | ||
Equity Method Investment, Summarized Financial Information, Noncurrent Assets | 121,646,932 | 121,646,932 | 133,415,881 | ||
Equity Method Investment, Summarized Financial Information, Current Liabilities | 13,893,874 | 13,893,874 | 23,822,812 | ||
Equity Method Investment, Summarized Financial Information, Noncurrent Liabilities | 56,228,418 | 56,228,418 | 49,856,355 | ||
Equity Method Investment Summarized Financial Information, Equity | 75,090,987 | 75,090,987 | 91,074,574 | ||
Equity Method Investment, Summarized Financial Information, Revenue | 62,471,512 | 58,019,407 | 180,821,741 | 169,833,142 | |
Equity Method Investment, Summarized Financial Information, Gross Profit (Loss) | 7,782,145 | 11,684,449 | 14,680,187 | 30,394,537 | |
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | 6,229,570 | 5,936,832 | 10,369,094 | 12,786,712 | |
GEM, LT, PGVP, RPMG Combined [Domain] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity in net income of investments | $ 45,000 | $ 85,000 | $ 153,000 | $ 268,000 | |
Guardian Energy Management [Member] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 17.00% | 17.00% | |||
Investments | $ 33,000 | $ 33,000 | $ 33,000 | ||
Ring-Neck Energy and Feeds, LLC [Domain] | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 11.00% | 11.00% | |||
Investments | $ 10,053,000 | $ 10,053,000 |
Short Term Note Payable (Detail
Short Term Note Payable (Details) - Farm Credit Services of America [Member] - Line of Credit [Member] | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Line of Credit Facility [Line Items] | |
Debt Instrument, Basis Spread on Variable Rate | 3.00% |
Line of Credit Facility, Maximum Borrowing Capacity | $ 10,000,000 |
Line of Credit Facility, Interest Rate at Period End | 4.25% |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.25% |
Line of Credit Facility, Amount Outstanding | $ 0 |
Line of Credit Facility, Remaining Borrowing Capacity | $ 2,744,000 |
Long Term Note Payable (Details
Long Term Note Payable (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months | $ 1,000,000 | $ 1,000,000 | |
Amortization of Debt Issuance Costs | (4,667) | ||
Long-term Debt, Gross | 8,001,000 | 8,001,000 | $ 1,000 |
Long-term Debt | 7,980,778 | 7,980,778 | 1,000 |
Unamortized Debt Issuance Expense | (20,222) | (20,222) | 0 |
Long-term Debt, Current Maturities | (995,333) | (995,333) | 0 |
Long-term Debt, Excluding Current Maturities | 6,985,445 | 6,985,445 | $ 1,000 |
Long-term Debt, Maturities, Repayments of Principal in Year Two | 1,000,000 | 1,000,000 | |
Amortization of Debt Issuance costs in year two | (4,083) | ||
Long-term Debt, Maturities, Repayments of Principal in Year Three | 1,000,000 | 1,000,000 | |
Amortization of Debt Issuance costs in year three | (3,500) | ||
Long-term Debt, Maturities, Repayments of Principal in Year Four | 1,000,000 | 1,000,000 | |
Amortization of Debt Issuance costs in year four | (2,917) | ||
Long-term Debt, Maturities, Repayments of Principal in Year Five | 1,000,000 | 1,000,000 | |
Amortization of Debt Issuance costs in year five | (2,333) | ||
Long-term Debt, Maturities, Repayments of Principal after Year Five | 3,001,000 | 3,001,000 | |
Amortization of Debt Issuance costs after year five | (2,722) | ||
Farm Credit Services of America [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Current Borrowing Capacity | 15,000,000 | 15,000,000 | |
Periodic decrease in line of credit availability | 750,000 | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 7,500,000 | $ 7,500,000 | |
Line of Credit Facility, Interest Rate at Period End | 4.30% | 4.30% | |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.50% | ||
Line of Credit Facility, Amount Outstanding | $ 1,000 | $ 1,000 | |
Line of Credit Facility, Remaining Borrowing Capacity | 11,249,000 | $ 11,249,000 | |
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||
Farm Credit Services of America [Member] | Medium-term Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||
Medium-term Notes | 8,000,000 | $ 8,000,000 | |
Debt Instrument, Annual Principal Payment | $ 1,000,000 | 1,000,000 | |
Debt Instrument, Interest Rate During Period | 4.50% | ||
Medium-term Notes, Current | $ 8,000,000 | $ 8,000,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Future [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | $ 170,463 | $ 246,900 |
Derivative Liability | 6,525 | 12,575 |
Future [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 170,463 | 246,900 |
Derivative Liability | 6,525 | 12,575 |
Future [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 0 | 0 |
Derivative Liability | 0 | 0 |
Future [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 0 | 0 |
Derivative Liability | 0 | 0 |
Forward Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 5,426 | 6,491 |
Derivative Liability | 689,178 | 827,786 |
Forward Contracts [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 0 | 0 |
Derivative Liability | 0 | 0 |
Forward Contracts [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 5,426 | 6,491 |
Derivative Liability | 689,178 | 827,786 |
Forward Contracts [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Asset | 0 | 0 |
Derivative Liability | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||||
Related Party Transaction, Purchases from Related Party | $ 212,000 | $ 306,000 | $ 898,000 | $ 1,683,000 | |
Due from Related Parties, Current | 1,182,457 | 1,182,457 | $ 3,695,561 | ||
Due to Related Parties | $ 47,000 | $ 47,000 | $ 40,000 | ||
Renewable Products Marketing Group, LLC (RPMG) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 6.00% | 6.00% | |||
Ethanol [Member] | Renewable Products Marketing Group, LLC (RPMG) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from Related Parties | $ 15,468,141 | 16,064,019 | $ 50,916,644 | 49,529,339 | |
Marketing Expenses from Transactions with Related Party | 61,260 | 42,057 | 183,780 | 126,171 | |
Distillers Grain [Member] | Renewable Products Marketing Group, LLC (RPMG) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from Related Parties | 1,010,769 | 1,734,033 | 3,786,652 | 3,890,337 | |
Marketing Expenses from Transactions with Related Party | 6,642 | 10,200 | 28,986 | 23,366 | |
Corn Oil [Member] | Renewable Products Marketing Group, LLC (RPMG) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from Related Parties | 749,923 | 761,191 | 2,316,938 | 2,058,908 | |
Marketing Expenses from Transactions with Related Party | $ 5,621 | $ 6,801 | $ 17,661 | $ 19,669 |
Commitments (Details)
Commitments (Details) - Capital Addition Purchase Commitments [Member] $ in Millions | Sep. 30, 2017USD ($) |
Long-term Purchase Commitment [Line Items] | |
Purchase Commitment, Remaining Minimum Amount Committed | $ 2.9 |
Other Commitment | $ 4.6 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Subsequent Event [Line Items] | |||||
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Paid | $ 2,962,000 | $ 5,924,000 | |||
Distribution Made to Limited Liability Company (LLC) Member, Distributions Paid, Per Unit | $ 0 | $ 0.10 | $ 0.10 | $ 0.20 | |
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Paid | $ 2,962,000 | ||||
Distribution Made to Limited Liability Company (LLC) Member, Distributions Paid, Per Unit | $ 0.10 |