Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 13, 2020 | |
Subsequent Event [Line Items] | ||
Entity Filer Category | Non-accelerated Filer | |
Entity Registrant Name | LAKE AREA CORN PROCESSORS, LLC | |
Entity Central Index Key | 0001156174 | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | SD | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Address, Address Line One | 46269 SD Highway 34 | |
Entity Address, Address Line Two | P.O. Box 100 | |
Entity Address, City or Town | Wentworth | |
Entity Address, State or Province | SD | |
Entity Address, Postal Zip Code | 57075 | |
City Area Code | (605) | |
Local Phone Number | 483-2676 | |
Entity Tax Identification Number | 46-0460790 | |
Entity File Number | 000-50254 | |
Entity Common Stock, Shares Outstanding | 29,620,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 2,114,153 | $ 12,823,653 |
Accounts receivable | 1,919,969 | 1,576,093 |
Inventory | 5,497,765 | 10,543,422 |
Derivative financial instruments | 445,901 | 505,025 |
Prepaid expenses | 198,085 | 479,422 |
Total current assets | 10,175,873 | 25,927,615 |
PROPERTY AND EQUIPMENT | ||
Land | 874,473 | 874,473 |
Land improvements | 8,631,224 | 8,631,224 |
Buildings | 9,316,576 | 9,316,576 |
Equipment | 95,849,293 | 95,395,121 |
Construction in progress | 0 | 150,925 |
Gross Property and Equipment | 114,671,566 | 114,368,319 |
Less accumulated depreciation | (51,910,690) | (47,660,838) |
Net property and equipment | 62,760,876 | 66,707,481 |
OTHER ASSETS | ||
Goodwill | 10,395,766 | 10,395,766 |
Investments | 16,212,660 | 16,682,169 |
Other | 85,293 | 97,287 |
Total other assets | 26,693,719 | 27,175,222 |
TOTAL ASSETS | 99,630,468 | 119,810,318 |
CURRENT LIABILITIES | ||
Outstanding checks in excess of bank balance | 1,604,126 | 1,155,264 |
Accounts payable | 3,637,967 | 13,812,388 |
Accrued liabilities | 857,091 | 933,668 |
Derivative financial instruments | 3,450 | 698,850 |
Current maturities of notes payable | 1,074,853 | 1,000,000 |
Other | 4,000 | 4,000 |
Total current liabilities | 7,181,487 | 17,604,170 |
LONG-TERM LIABILITIES | ||
Notes payable | 28,687,283 | 37,989,208 |
Other | 0 | 4,000 |
Total long-term liabilities | 28,687,283 | 37,993,208 |
MEMBERS' EQUITY (29,620,000 units issued and outstanding) | 63,761,698 | 64,212,940 |
TOTAL LIABILITIES AND MEMBERS' EQUITY | $ 99,630,468 | $ 119,810,318 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Members' equity outstanding (units) | 29,620,000 | 29,620,000 |
Members' equity issued (units) | 29,620,000 | 29,620,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
REVENUES | $ 33,917,787 | $ 32,441,510 | $ 91,798,857 | $ 80,151,796 |
COSTS OF REVENUES | 27,871,295 | 34,256,712 | 87,990,082 | 78,218,717 |
Gross Profit | 6,046,492 | (1,815,202) | 3,808,775 | 1,933,079 |
OPERATING EXPENSES | 992,023 | 971,662 | 3,277,570 | 2,906,424 |
INCOME (LOSS) FROM OPERATIONS | 5,054,469 | (2,786,864) | 531,205 | (973,345) |
OTHER INCOME (EXPENSE) | ||||
Interest and other income | 42,419 | 12,320 | 388,449 | 163,385 |
Equity in net income (loss) of investments | 1,019,662 | (349,123) | (206,140) | (425,776) |
Interest expense | (306,124) | (476,122) | (1,164,756) | (766,746) |
Total other income (expense) | 755,957 | (812,925) | (982,447) | (1,029,137) |
NET INCOME (LOSS) | $ 5,810,426 | $ (3,599,789) | $ (451,242) | $ (2,002,482) |
BASIC AND DILUTED EARNINGS (LOSS) PER UNIT (in dollars per unit) | $ 0.20 | $ (0.12) | $ (0.02) | $ (0.07) |
WEIGHTED AVERAGE NUMBER OF UNITS OUTSTANDING FOR THE CALCULATION OF BASIC & DILUTED EARNINGS (LOSS) PER UNIT (units) | 29,620,000 | 29,620,000 | 29,620,000 | 29,620,000 |
DISTRIBUTIONS DECLARED PER UNIT (in dollars per unit) | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Members' Equity (Unaudited) | USD ($) |
Balance at the beginning of period at Dec. 31, 2018 | $ 68,037,124 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Net Income | 1,790,204 |
Balance at the end of period at Mar. 31, 2019 | 69,827,328 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Net Income | (192,897) |
Balance at the end of period at Jun. 30, 2019 | 69,634,431 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Net Income | (3,599,789) |
Balance at the end of period at Sep. 30, 2019 | 66,034,642 |
Balance at the beginning of period at Dec. 31, 2019 | 64,212,940 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Net Income | (10,475,043) |
Balance at the end of period at Mar. 31, 2020 | 53,737,897 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Net Income | 4,213,375 |
Balance at the end of period at Jun. 30, 2020 | 57,951,272 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |
Net Income | 5,810,426 |
Balance at the end of period at Sep. 30, 2020 | $ 63,761,698 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
OPERATING ACTIVITIES | ||
Net income | $ (451,242) | $ (2,002,482) |
Adjustments to reconcile net income to cash provided by operating activities | ||
Depreciation and amortization | 4,295,699 | 3,529,356 |
Distributions in excess of earnings from investments | 469,510 | 617,091 |
(Increase) decrease in | ||
Accounts receivable | (343,878) | (2,956,690) |
Inventory | 5,045,657 | (1,176,060) |
Prepaid expenses | 281,337 | 161,541 |
Increase (Decrease) in Derivative Assets and Liabilities | (636,276) | (226,499) |
Accounts payable | (10,174,421) | (14,951) |
Accrued and other liabilities | (80,577) | 80,778 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | (1,594,191) | (1,987,916) |
INVESTING ACTIVITIES | ||
Purchase of property and equipment | (334,571) | (8,868,064) |
Purchase of investments | 0 | (633,924) |
NET CASH (USED IN) INVESTING ACTIVITIES | (334,571) | (9,501,988) |
FINANCING ACTIVITIES | ||
Increase (decrease) in outstanding checks in excess of bank balance | 448,862 | 873,922 |
Borrowings on notes payable | 43,770,400 | 47,500,000 |
Principal payments on notes payable | (53,000,000) | (33,099,076) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | (8,780,738) | 15,274,846 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect | (10,709,500) | 3,784,942 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 2,114,153 | 5,482,879 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 12,823,653 | 1,697,937 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid during the period for interest, net of capitalized interest of $128 and $830,432 in 2020 and 2019, respectively. | 1,245,296 | 356,215 |
Capital expenditures in accounts payable | $ 0 | $ 81,387 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Capitalized interest | $ 114 | $ 830,432 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2020 | |
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 90 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 five companies in related industries. See note 4 for further details. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 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, 2019, contained in the annual report on Form 10-K for 2019. 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 The Company has adopted the guidance of ASC Topic 606, Revenue from Contracts with Customers (Topic 606). Topic 606 requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires the Company to apply the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies a performance obligation. The Company generally recognizes revenue at a point in time. The Company’s contracts with customers have one performance obligation and a contract duration of one year or less. The following is a description of principal activities from which we generate revenue. Revenues from contracts with customers are recognized when control of the promised goods or services are transferred to our customers in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. Generally, ethanol and related products are shipped FOB shipping point and the control of the goods transfers to customers when the goods are loaded into trucks or rail cars are released to the railroad. Consideration is based on predetermined contractual prices or on current market prices. • sales of ethanol • sales of distillers grains • sales of distillers corn oil Disaggregation of revenue: All revenue recognized in the income statement is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue according to product line: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues ethanol $ 26,424,724 $ 25,563,757 $ 69,910,876 $ 62,573,333 Revenues distillers grains 6,131,560 5,634,315 17,866,954 14,539,232 Revenues distillers corn oil 1,361,503 1,243,438 4,021,027 3,039,231 $ 33,917,787 $ 32,441,510 $ 91,798,857 $ 80,151,796 Contract assets and contract liabilities: The Company has no significant contract assets or contract liabilities from contracts with customers. The Company receives payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract. Shipping costs Shipping costs incurred by the Company in the sale of ethanol, dried distiller's 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. When the Company performs shipping and handling activities after the transfer of control to the customers (e.g., when control transfers prior to delivery), they are considered fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. Operating Segment The Company uses the "management approach" for reporting information about segments in annual and interim financial statements. The management approach is based on the way the chief operating decision-maker organizes segments within a company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure and any other manner in which management disaggregates a company. Based on the "management approach" model, the Company has determined that its business is comprised of a single operating segment. Costs of Revenues The primary components of costs of revenues from the production of ethanol and related co-products are corn, energy (natural gas and electricity), raw materials (chemicals and denaturant), and direct labor costs. Shipping costs on modified and wet distiller's grains are included in costs 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. Receivables and Credit Policies Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within fifteen days from the invoice date. Unpaid accounts receivable with invoice dates over thirty days old bear interest at 1.5% per month. Accounts receivable are stated at the amount billed to the customer. Payments of accounts receivable are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoices. The carrying amount of trade receivables is reduced by a valuation allowance that reflects management’s best estimate of the amounts that will not be collected. Management regularly reviews trade receivable balances and based on an assessment of current creditworthiness, estimates the portion, if any, of the balance that will not be collected. The valuation allowance was zero as of September 30, 2020 and December 31, 2019. Investment in commodities contracts, derivative instruments and hedging activities The Company is exposed to certain risks related to its 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, 2020, the Company is committed to purchasing approximately 1.5 million bushels of corn on a forward contract basis with an average price of $3.22 per bushel. The total corn purchase contracts represent 5% 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, 2020, the Company is committed to purchasing approximately 336,000 MMBtus of natural gas with an average price of $2.12 per MMBtu. The Company accounts for these transactions as normal purchases, and accordingly, does not mark these transactions to market. The natural gas purchase contracts represent 17% of the annual plant requirements. 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, 2020, the Company is committed to selling approximately 49,000 dry equivalent tons of distillers grains with an average price of $117 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 23% 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, 2020, the Company is committed to selling approximately 3.1 million pounds of distillers corn oil with an average price of $0.28 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 14% of the projected annual plant production. The Company does not have any firm-priced sales commitments for ethanol as of September 30, 2020. 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, 2020 and December 31, 2019 were as follows: Balance Sheet Classification September 30, 2020 December 31, 2019* Forward contracts in gain position $ 224,549 $ 160,687 Futures contracts in gain position 63 33,338 Futures contracts in loss position (471,725) (1,500) Total (247,113) 192,525 Cash held by broker 693,014 312,500 Current Assets $ 445,901 $ 505,025 Forward contracts in loss position (Current Liabilities) $ (3,450) $ (698,850) *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. Gains and losses related to derivative contracts related to corn are included as a component of costs of revenues. Statement of Operations Three Months Ended September 30, Classification 2020 2019 Net realized and unrealized (losses) related to purchase contracts: Futures contracts Cost of Revenues $ (258,881) $ (788,253) Forward contracts Cost of Revenues (57,419) (424,895) Statement of Operations Nine Months Ended September 30, Classification 2020 2019 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ 1,177,383 $ (113,672) Forward contracts Cost of Revenues (2,427,909) 53,655 Investments The Company has investment interests in five 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 operations 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 based on the most recent reliable data. Goodwill Annually, as well as when an event triggering impairment may have occurred, the Company performs an impairment test on goodwill which compares the fair value of the reporting unit with its carrying amount. An impairment charge is recognized, if necessary, for the amount by which the carrying value exceeds the fair value up to the amount of the goodwill attributed to the reporting unit. The Company performs the annual analysis as of December 31 of each fiscal year. A triggering event was determined to have occurred during the first quarter of 2020 and an impairment test was performed as of March 31, 2020. The Company determined there was no impairment. 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 January 2017, FASB issued ASU No. 2017-04, "Intangibles-Goodwill and Other (Topic 350)" (ASU 2017-04). ASU 2017-04 simplifies the test for goodwill impairment. It eliminates the two-step process of assessing goodwill impairment and replaces it with one step which compares the fair value of the reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the fair value up to the amount of the goodwill attributed to the reporting unit. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, and for interim periods within that fiscal year. Dakota Ethanol found it preferable to adopt ASU 2017-04 because the benefits of this standard to users of the financial statements will outweigh the costs of following the pre-existing guidance. The standard has not had a material impact on the Company's consolidated financial statements. In August 2018, FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement" (ASU 2018-13). ASU 2018-13 improves the effectiveness of the fair value disclosures in the financial statements. It adds, removes and modifies various disclosure requirements relating to the fair value hierarchy. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, and for interim periods within that fiscal year. The standard has not had a material impact on the Company's consolidated financial statements. Risks and Uncertainties The Company has certain risks and uncertainties that it will experience during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distiller grains to customers primarily located in the United States. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. For the three months ended September 30, 2020, ethanol sales averaged approximately 78% of total revenues, while approximately 18% of revenues were generated from the sale of distiller grains and 4% of revenues were generated from the sale of corn oil. For the nine months ended September 30, 2020, ethanol sales averaged approximately 76% of total revenues, while approximately 20% of revenues were generated from the sale of distiller grains and 4% of revenues were generated from the sale of corn oil. The Company's operating and financial performance is largely driven by the prices at which it sells ethanol and the net expense of corn. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and unleaded gasoline and the petroleum markets. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The Company's largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, weather, and government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities. On January 30, 2020, the World Health Organization declared the coronavirus outbreak (COVID-19) a “Public Health Emergency of International Concern” and on March 11, 2020, declared COVID-19 a pandemic. The impact of COVID-19 has negatively impacted the Company’s operations, suppliers or other vendors, and customer base. Gasoline demand has been reduced in the United States which has forced the Company to reduce ethanol production accordingly. Any quarantines, labor shortages or other disruptions to the Company’s operations, or those of their customers, may adversely impact the Company’s revenues, ability to provide its services and operating results. In addition, a significant outbreak of epidemic, pandemic or contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, including the geographical area in which the Company operates, resulting in an economic downturn that could affect demand for its goods and services. The extent to which the coronavirus impacts the Company’s long-term results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and actions taken to contain the coronavirus or its impact, among others. |
Goodwill and Intangible Assets Disclosure [Text Block] | Goodwill Annually, as well as when an event triggering impairment may have occurred, the Company performs an impairment test on goodwill which compares the fair value of the reporting unit with its carrying amount. An impairment charge is recognized, if necessary, for the amount by which the carrying value exceeds the fair value up to the amount of the goodwill attributed to the reporting unit. The Company performs the annual analysis as of December 31 of each fiscal year. A triggering event was determined to have occurred during the first quarter of 2020 and an impairment test was performed as of March 31, 2020. The Company determined there was no impairment. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | INVENTORY Inventory consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019* Raw materials $ 1,649,869 $ 4,968,731 Finished goods 1,946,490 3,505,224 Work in process 784,258 952,319 Parts inventory 1,117,148 1,117,148 $ 5,497,765 $ 10,543,422 *Derived from audited financial statements. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2020 | |
Investments [Abstract] | |
Investments | INVESTMENTS Dakota Ethanol has a 5% 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, 2020 unaudited interim results. The carrying amount of the Company’s investment was approximately $1,197,000 and $1,295,000 as of September 30, 2020 and December 31, 2019, respectively. 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, 2020 unaudited interim results. The carrying amount of the Company’s investment was approximately $194,000 and $251,000 as of September 30, 2020 and December 31, 2019, 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, 2020 unaudited interim results. The carrying amount of the Company’s investment was approximately $4,874,000 and $4,991,000 as of September 30, 2020 and December 31, 2019, 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, 2020 unaudited interim results. The carrying amount of the Company’s investment was approximately $88,000 and $53,000 as of September 30, 2020 and December 31, 2019, respectively. 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, 2020 unaudited interim results. The carrying amount of the Company’s investment was approximately $9,860,000 and $10,093,000 as of September 30, 2020 and December 31, 2019, respectively. REF commenced operations during the second quarter of 2019. Prior to then, the ethanol plant was under construction. The carrying amount of the investment exceeds the underlying equity in net assets by approximately $1,072,000. The excess is comprised of a basis adjustment of approximately $440,000 and capitalized interest of $632,000. The excess is amortized over 20 years from May 2019, the time the plant became operational. The amortization is recorded in equity in net income of investments. Amortization was $14,416 for both the three months ended September 30, 2020 and 2019, and $43,247 and $24,026 for the nine months ended September 30, 2020 and 2019, respectively. Condensed, combined unaudited financial information of the Company’s investments in RPMG, LT, GH, GEM and REF are as follows: Balance Sheet September 30, 2020 December 31, 2019 Current Assets $ 226,285,312 $ 219,618,012 Other Assets 207,847,399 226,475,383 Current Liabilities 210,208,306 187,381,453 Long-term Liabilities 66,284,372 95,219,540 Members' Equity 157,640,033 163,492,402 Three Months Ended Income Statement September 30, 2020 September 30, 2019 Revenue $ 93,946,470 $ 94,474,407 Gross Profit 15,327,809 5,266,631 Net Income (Loss) 9,367,336 (2,645,668) Nine Months Ended Income Statement September 30, 2020 September 30, 2019 Revenue $ 236,109,319 $ 230,715,486 Gross Profit 17,650,973 14,095,945 Net (Loss) (2,106,037) (2,933,142) |
Revolving Operating Note
Revolving Operating Note | 9 Months Ended |
Sep. 30, 2020 | |
Short Term Note Payable [Abstract] | |
Revolving Operating Note | REVOLVING OPERATING NOTEOn February 6, 2018, Dakota Ethanol executed a revolving promissory note with 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, whichever is less. Dakota Ethanol amended the note agreement with FCSA in June of 2020. Under the amendment, the available credit under the revolving operating note was reduced to $2,000,000. Interest on the outstanding principal balance will accrue at 300 basis points above the one-month LIBOR rate and is not subject to a floor. The rate was 3.15% at September 30, 2020. There is a non-use fee of 0.25% on the unused portion of the $2,000,000 availability. The note is collateralized by substantially all assets of the Company. The note expires on November 1, 2021. On September 30, 2020, Dakota Ethanol had no balance outstanding and approximately $2,000,000 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, 2020 | |
Long Term Note Payable [Abstract] | |
Long-Term Notes Payable | LONG-TERM NOTES PAYABLE 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 payment on August 1, 2020 is no longer due after the note was amended with FCSA and is now due on August 1, 2025. The notes matures on August 1, 2025. Interest on the outstanding principal balance will accrue at 325 basis points above the one-month LIBOR rate until February 1, 2023 and increases to 350 basis points thereafter until maturity. The interest rate is not subject to a floor. The rate was 3.40% at September 30, 2020. On September 30, 2020, Dakota Ethanol had $6,000,000 outstanding on the note. On February 6, 2018, Dakota Ethanol executed a reducing revolving promissory note from FCSA in the amount up to $40,000,000 or the amount available in accordance with the borrowing availability under the credit agreement. Dakota Ethanol amended the note agreement with FCSA in June of 2020. Under the amendment, the available credit on the reducing revolving note was increased to $48,000,000. The amount Dakota Ethanol can borrow on the note decreases by $1,750,000 semi- annually starting on July 1, 2021 until the maximum balance reaches $32,250,000 on July 1, 2025. The note matures on January 1, 2026. Interest on the outstanding principal balance will accrue at 325 basis points above the one-month LIBOR rate until February 1, 2023 and the basis increases to 350 points thereafter until maturity. The interest rate is not subject to a floor. The rate was 3.40% at September 30, 2020. The note contains a non-use fee of 0.50% on the unused portion of the note. On September 30, 2020, Dakota Ethanol had $23,000,000 outstanding and $25,000,000 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. The note payable agreement was amended in June 2020 with modifications to the requirements. The working capital covenant was reduced to $11,000,000 and the net worth covenant was reduced to $18,000,000. The next measurement date for the debt service coverage ratio was deferred until December 31, 2021. Management's current financial projections indicate that we will be in compliance with our revised financial covenants for the next 12 months and we expect to remain in compliance thereafter. The Company entered into a loan agreement with the Small Business Association through First State Bank, Gothenburg, NE on April 4, 2020 for $760,400 as part of the Paycheck Protection Program under Division A, Title I of the Coronavirus Aid, Relief and Economic Security Act (CARES Act). The loan matures in January 2023 and has an interest rate of 1%. Proceeds of the loan are restricted for use towards payroll costs and other allowable uses such as covered utilities for incurred before December 31, 2020 under the Paycheck Protection Program Rules. Provisions of the agreement allow for a portion of the loan to be forgiven if certain qualifications are met. The Company has applied for forgiveness of this loan. The Paycheck Protection Program Flexibility Act, which was put into effect on June 5, 2020, may effect the terms of our loan. The Company also received an Economic Injury Disaster Loan (EIDL) in the amount of $10,000 in June 2020. Repayment of the loan will begin in June 2021 and has a 30 year term at 3.75% interest. The balances of the notes payable are as follows. The balances reflect the updated agreement: September 30, 2020 December 31, 2019* Notes Payable - FCSA $ 29,000,000 $ 39,000,000 Notes Payable - Other 770,400 — Less unamortized debt issuance costs (8,264) (10,792) 29,762,136 38,989,208 Less current portion (1,074,853) (1,000,000) $ 28,687,283 $ 37,989,208 *Derived from audited financial statements Principal maturities for the next five years are estimated as follows. Years Ending September 30, Principal 2021 $ 1,074,853 2022 1,509,216 2023 1,176,910 2024 1,000,208 2025 2,000,215 thereafter 23,008,998 $ 29,770,400 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
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 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, 2020 and December 31, 2019 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, 2020 Assets: Derivative financial instruments, futures contracts $ 63 $ 63 $ — forward contracts $ 224,549 $ — $ 224,549 Liabilities: Derivative financial instruments, futures contracts $ 471,725 $ 471,725 $ — forward contracts $ 3,450 $ — $ 3,450 December 31, 2019* Assets: Derivative financial instruments, futures contracts $ 33,338 $ 33,338 $ — $ — forward contracts $ 160,687 $ — $ 160,687 $ — Liabilities: Derivative financial instruments, futures contracts $ 1,500 $ 1,500 $ — $ — forward contracts $ 698,850 $ — $ 698,850 $ — *Derived from audited financial statements. During the three and nine months ended September 30, 2020, the Company did not make any changes between Level 1 and Level 2 assets and liabilities. As of September 30, 2020 and December 31, 2019, the Company did not have any Level 3 assets or liabilities. Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Financial assets and financial liabilities measured at fair value on a non-recurring basis were not significant at September 30, 2020. Disclosure requirements for fair value of financial instruments require disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non-recurring basis are discussed above. The Company believes the carrying amount of cash and cash equivalents (level 1), accounts receivable (level 2), other receivables (level 2), accounts payable and accruals (level 2) and short-term debt (level 3) approximates fair value. The carrying amount of long-term obligations (level 3) at September 30, 2020 of $29,770,400 had an estimated fair value of approximately $29,770,400 based on estimated interest rates for comparable debt. The carrying amount of long-term obligations at December 31, 2019 of $39,000,000 had an estimated fair value of approximately $39,000,000. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONSDakota Ethanol has a 5% interest in RPMG, and Dakota Ethanol has entered into marketing agreements for the exclusive rights to market, sell and distribute the entire ethanol, dried distiller's grains and corn oil inventories produced by Dakota Ethanol. The marketing fees are included in net revenues. The Company also purchases denaturant from RPMG. Revenues and marketing fees related to the agreements as well as denaturant purchases are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues ethanol $ 26,484,451 $ 25,602,911 $ 70,050,239 $ 62,706,692 Revenues distillers dried grains 2,938,941 2,158,001 6,617,691 3,333,325 Revenues corn oil 1,374,468 1,253,882 4,051,885 3,064,398 Marketing fees ethanol 59,727 60,960 139,363 182,880 Marketing fees distillers dried grains 25,010 16,338 48,929 25,278 Marketing fees corn oil 12,965 10,431 30,858 25,007 Denaturant purchases 216,345 243,052 908,238 579,137 September 30, 2020 December 31, 2019* Amounts due from RPMG $ 1,405,719 $ 891,227 Amounts due to RPMG $ 30,057 $ 46,234 *Derived from audited financial statements. The Company purchased corn and services from members of its Board of Managers that farm and operate local businesses. Purchases during the three and nine months ended September 30, 2020 totaled approximately $425,000 and $801,000, respectively. Purchases during the three and nine months ended September 30, 2019 totaled approximately $166,804 and $830,478, respectively. As of September 30, 2020 and December 31, 2019, the amount we owed to other related parties was approximately $0 and $0, respectively. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | Goodwill Annually, as well as when an event triggering impairment may have occurred, the Company performs an impairment test on goodwill which compares the fair value of the reporting unit with its carrying amount. An impairment charge is recognized, if necessary, for the amount by which the carrying value exceeds the fair value up to the amount of the goodwill attributed to the reporting unit. The Company performs the annual analysis as of December 31 of each fiscal year. A triggering event was determined to have occurred during the first quarter of 2020 and an impairment test was performed as of March 31, 2020. The Company determined there was no impairment. |
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 The Company has adopted the guidance of ASC Topic 606, Revenue from Contracts with Customers (Topic 606). Topic 606 requires the Company to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires the Company to apply the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the Company satisfies a performance obligation. The Company generally recognizes revenue at a point in time. The Company’s contracts with customers have one performance obligation and a contract duration of one year or less. The following is a description of principal activities from which we generate revenue. Revenues from contracts with customers are recognized when control of the promised goods or services are transferred to our customers in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. Generally, ethanol and related products are shipped FOB shipping point and the control of the goods transfers to customers when the goods are loaded into trucks or rail cars are released to the railroad. Consideration is based on predetermined contractual prices or on current market prices. • sales of ethanol • sales of distillers grains • sales of distillers corn oil Disaggregation of revenue: All revenue recognized in the income statement is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue according to product line: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues ethanol $ 26,424,724 $ 25,563,757 $ 69,910,876 $ 62,573,333 Revenues distillers grains 6,131,560 5,634,315 17,866,954 14,539,232 Revenues distillers corn oil 1,361,503 1,243,438 4,021,027 3,039,231 $ 33,917,787 $ 32,441,510 $ 91,798,857 $ 80,151,796 Contract assets and contract liabilities: The Company has no significant contract assets or contract liabilities from contracts with customers. The Company receives payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract. Shipping costs Shipping costs incurred by the Company in the sale of ethanol, dried distiller's 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. When the Company performs shipping and handling activities after the transfer of control to the customers (e.g., when control transfers prior to delivery), they are considered fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. |
Operating Segment | Operating Segment The Company uses the "management approach" for reporting information about segments in annual and interim financial statements. The management approach is based on the way the chief operating decision-maker organizes segments within a company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure and any other manner in which management disaggregates a company. Based on the "management approach" model, the Company has determined that its business is comprised of a single operating segment. |
Cost of Revenues | Costs of Revenues The primary components of costs of revenues from the production of ethanol and related co-products are corn, energy (natural gas and electricity), raw materials (chemicals and denaturant), and direct labor costs. |
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. |
Receivables and Credit Policies | Receivables and Credit Policies Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within fifteen days from the invoice date. Unpaid accounts receivable with invoice dates over thirty days old bear interest at 1.5% per month. Accounts receivable are stated at the amount billed to the customer. Payments of accounts receivable are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoices. |
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 its 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, 2020, the Company is committed to purchasing approximately 1.5 million bushels of corn on a forward contract basis with an average price of $3.22 per bushel. The total corn purchase contracts represent 5% 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, 2020, the Company is committed to purchasing approximately 336,000 MMBtus of natural gas with an average price of $2.12 per MMBtu. The Company accounts for these transactions as normal purchases, and accordingly, does not mark these transactions to market. The natural gas purchase contracts represent 17% of the annual plant requirements. 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, 2020, the Company is committed to selling approximately 49,000 dry equivalent tons of distillers grains with an average price of $117 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 23% 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, 2020, the Company is committed to selling approximately 3.1 million pounds of distillers corn oil with an average price of $0.28 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 14% of the projected annual plant production. The Company does not have any firm-priced sales commitments for ethanol as of September 30, 2020. 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, 2020 and December 31, 2019 were as follows: Balance Sheet Classification September 30, 2020 December 31, 2019* Forward contracts in gain position $ 224,549 $ 160,687 Futures contracts in gain position 63 33,338 Futures contracts in loss position (471,725) (1,500) Total (247,113) 192,525 Cash held by broker 693,014 312,500 Current Assets $ 445,901 $ 505,025 Forward contracts in loss position (Current Liabilities) $ (3,450) $ (698,850) *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. Gains and losses related to derivative contracts related to corn are included as a component of costs of revenues. Statement of Operations Three Months Ended September 30, Classification 2020 2019 Net realized and unrealized (losses) related to purchase contracts: Futures contracts Cost of Revenues $ (258,881) $ (788,253) Forward contracts Cost of Revenues (57,419) (424,895) Statement of Operations Nine Months Ended September 30, Classification 2020 2019 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ 1,177,383 $ (113,672) Forward contracts Cost of Revenues (2,427,909) 53,655 |
Investments | Investments The Company has investment interests in five 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 operations 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 based on the most recent reliable data. |
Use of Estimates | Use of EstimatesThe 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 | Recently Issued Accounting Pronouncements In January 2017, FASB issued ASU No. 2017-04, "Intangibles-Goodwill and Other (Topic 350)" (ASU 2017-04). ASU 2017-04 simplifies the test for goodwill impairment. It eliminates the two-step process of assessing goodwill impairment and replaces it with one step which compares the fair value of the reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying value exceeds the fair value up to the amount of the goodwill attributed to the reporting unit. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, and for interim periods within that fiscal year. Dakota Ethanol found it preferable to adopt ASU 2017-04 because the benefits of this standard to users of the financial statements will outweigh the costs of following the pre-existing guidance. The standard has not had a material impact on the Company's consolidated financial statements. In August 2018, FASB issued ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement" (ASU 2018-13). ASU 2018-13 improves the effectiveness of the fair value disclosures in the financial statements. It adds, removes and modifies various disclosure requirements relating to the fair value hierarchy. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, and for interim periods within that fiscal year. The standard has not had a material impact on the Company's consolidated financial statements. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Risks and Uncertainties The Company has certain risks and uncertainties that it will experience during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distiller grains to customers primarily located in the United States. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. For the three months ended September 30, 2020, ethanol sales averaged approximately 78% of total revenues, while approximately 18% of revenues were generated from the sale of distiller grains and 4% of revenues were generated from the sale of corn oil. For the nine months ended September 30, 2020, ethanol sales averaged approximately 76% of total revenues, while approximately 20% of revenues were generated from the sale of distiller grains and 4% of revenues were generated from the sale of corn oil. The Company's operating and financial performance is largely driven by the prices at which it sells ethanol and the net expense of corn. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and unleaded gasoline and the petroleum markets. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The Company's largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, weather, and government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities. On January 30, 2020, the World Health Organization declared the coronavirus outbreak (COVID-19) a “Public Health Emergency of International Concern” and on March 11, 2020, declared COVID-19 a pandemic. The impact of COVID-19 has negatively impacted the Company’s operations, suppliers or other vendors, and customer base. Gasoline demand has been reduced in the United States which has forced the Company to reduce ethanol production accordingly. Any quarantines, labor shortages or other disruptions to the Company’s operations, or those of their customers, may adversely impact the Company’s revenues, ability to provide its services and operating results. In addition, a significant outbreak of epidemic, pandemic or contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, including the geographical area in which the Company operates, resulting in an economic downturn that could affect demand for its goods and services. The extent to which the coronavirus impacts the Company’s long-term results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and actions taken to contain the coronavirus or its impact, among others. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
Disaggregation of Revenue | All revenue recognized in the income statement is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue according to product line: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues ethanol $ 26,424,724 $ 25,563,757 $ 69,910,876 $ 62,573,333 Revenues distillers grains 6,131,560 5,634,315 17,866,954 14,539,232 Revenues distillers corn oil 1,361,503 1,243,438 4,021,027 3,039,231 $ 33,917,787 $ 32,441,510 $ 91,798,857 $ 80,151,796 |
Derivatives Not Designated as Hedging Instruments | Derivatives not designated as hedging instruments at September 30, 2020 and December 31, 2019 were as follows: Balance Sheet Classification September 30, 2020 December 31, 2019* Forward contracts in gain position $ 224,549 $ 160,687 Futures contracts in gain position 63 33,338 Futures contracts in loss position (471,725) (1,500) Total (247,113) 192,525 Cash held by broker 693,014 312,500 Current Assets $ 445,901 $ 505,025 Forward contracts in loss position (Current Liabilities) $ (3,450) $ (698,850) *Derived from audited financial statements |
Net realized and unrealized gains (losses) related to purchase contracts | Statement of Operations Three Months Ended September 30, Classification 2020 2019 Net realized and unrealized (losses) related to purchase contracts: Futures contracts Cost of Revenues $ (258,881) $ (788,253) Forward contracts Cost of Revenues (57,419) (424,895) Statement of Operations Nine Months Ended September 30, Classification 2020 2019 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ 1,177,383 $ (113,672) Forward contracts Cost of Revenues (2,427,909) 53,655 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | INVENTORY Inventory consisted of the following as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019* Raw materials $ 1,649,869 $ 4,968,731 Finished goods 1,946,490 3,505,224 Work in process 784,258 952,319 Parts inventory 1,117,148 1,117,148 $ 5,497,765 $ 10,543,422 *Derived from audited financial statements. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Investments [Abstract] | |
Equity Method Investments | Condensed, combined unaudited financial information of the Company’s investments in RPMG, LT, GH, GEM and REF are as follows: Balance Sheet September 30, 2020 December 31, 2019 Current Assets $ 226,285,312 $ 219,618,012 Other Assets 207,847,399 226,475,383 Current Liabilities 210,208,306 187,381,453 Long-term Liabilities 66,284,372 95,219,540 Members' Equity 157,640,033 163,492,402 Three Months Ended Income Statement September 30, 2020 September 30, 2019 Revenue $ 93,946,470 $ 94,474,407 Gross Profit 15,327,809 5,266,631 Net Income (Loss) 9,367,336 (2,645,668) Nine Months Ended Income Statement September 30, 2020 September 30, 2019 Revenue $ 236,109,319 $ 230,715,486 Gross Profit 17,650,973 14,095,945 Net (Loss) (2,106,037) (2,933,142) |
Long-Term Notes Payable (Tables
Long-Term Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Long Term Note Payable [Abstract] | |
Schedule of Long-term Debt Instruments | The balances of the notes payable are as follows. The balances reflect the updated agreement: September 30, 2020 December 31, 2019* Notes Payable - FCSA $ 29,000,000 $ 39,000,000 Notes Payable - Other 770,400 — Less unamortized debt issuance costs (8,264) (10,792) 29,762,136 38,989,208 Less current portion (1,074,853) (1,000,000) $ 28,687,283 $ 37,989,208 *Derived from audited financial statements |
Schedule of Principal repayment and amortization of debt issuance cost | Principal maturities for the next five years are estimated as follows. Years Ending September 30, Principal 2021 $ 1,074,853 2022 1,509,216 2023 1,176,910 2024 1,000,208 2025 2,000,215 thereafter 23,008,998 $ 29,770,400 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 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, 2020 Assets: Derivative financial instruments, futures contracts $ 63 $ 63 $ — forward contracts $ 224,549 $ — $ 224,549 Liabilities: Derivative financial instruments, futures contracts $ 471,725 $ 471,725 $ — forward contracts $ 3,450 $ — $ 3,450 December 31, 2019* Assets: Derivative financial instruments, futures contracts $ 33,338 $ 33,338 $ — $ — forward contracts $ 160,687 $ — $ 160,687 $ — Liabilities: Derivative financial instruments, futures contracts $ 1,500 $ 1,500 $ — $ — forward contracts $ 698,850 $ — $ 698,850 $ — |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Revenues and marketing fees related to the agreements as well as denaturant purchases are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenues ethanol $ 26,484,451 $ 25,602,911 $ 70,050,239 $ 62,706,692 Revenues distillers dried grains 2,938,941 2,158,001 6,617,691 3,333,325 Revenues corn oil 1,374,468 1,253,882 4,051,885 3,064,398 Marketing fees ethanol 59,727 60,960 139,363 182,880 Marketing fees distillers dried grains 25,010 16,338 48,929 25,278 Marketing fees corn oil 12,965 10,431 30,858 25,007 Denaturant purchases 216,345 243,052 908,238 579,137 September 30, 2020 December 31, 2019* Amounts due from RPMG $ 1,405,719 $ 891,227 Amounts due to RPMG $ 30,057 $ 46,234 |
Nature of Operations (Details)
Nature of Operations (Details) gal in Millions | 9 Months Ended |
Sep. 30, 2020gal | |
Product Information [Line Items] | |
Equity Method Investments, Number of Entities | 5 |
Product [Member] | Ethanol [Member] | |
Product Information [Line Items] | |
Annual production capacity | 90 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Revenue from customers (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | $ 33,917,787 | $ 32,441,510 | $ 91,798,857 | $ 80,151,796 |
Ethanol [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | 26,424,724 | 25,563,757 | 69,910,876 | 62,573,333 |
Distillers Grain [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | 6,131,560 | 5,634,315 | 17,866,954 | 14,539,232 |
Corn Oil [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from Contract with Customer, Including Assessed Tax | $ 1,361,503 | $ 1,243,438 | $ 4,021,027 | $ 3,039,231 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Receivables and Credit Policies (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | ||
Payment term | 15 days | |
Payment term before interest is applied | 30 days | |
Trade Receivable, Unpaid Balance, Interest Rate | 1.50% | |
SEC Schedule, 12-09, Valuation Allowances and Reserves, Amount | $ 0 | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Derivative Instruments - Balance Sheet (Details) bu in Millions | Sep. 30, 2020USD ($)buMMBTUT | Dec. 31, 2019USD ($) |
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments and Hedges, Assets | $ 445,901 | $ 505,025 |
Derivative Instruments and Hedges, Liabilities | 3,450 | 698,850 |
Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Cash held by broker | 693,014 | 312,500 |
Current Assets [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, current | (247,113) | 192,525 |
Derivative Instruments and Hedges, Assets | 445,901 | 505,025 |
Other Current Liabilities [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Instruments and Hedges, Liabilities | $ 3,450 | 698,850 |
Corn [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Number of instruments held | bu | 1.5 | |
Purchase Commitment, Per unit | $ 3.22 | |
Percent of required need, coverage | 5.00% | |
Natural Gas [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Number of instruments held | MMBTU | 336,000 | |
Purchase Commitment, Per unit | $ 2.12 | |
Percent of required need, coverage | 17.00% | |
Distillers Grain [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Purchase Commitment, Per unit | $ 117 | |
Percent of required need, coverage | 23.00% | |
Corn Oil [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Purchase Commitment, Per unit | $ 0.28 | |
Forward Contracts [Member] | Current Assets [Member] | Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, current | $ 224,549 | 160,687 |
Distillers Grain [Domain] | ||
Derivatives, Fair Value [Line Items] | ||
Number of instruments held | T | 49,000 | |
Distillers Corn Oil [Domain] | ||
Derivatives, Fair Value [Line Items] | ||
Number of instruments held | bu | 3.1 | |
Percent of required need, coverage | 14.00% | |
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 | $ 63 | 33,338 |
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 | $ 471,725 | $ 1,500 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Derivative Instruments - Income Statement (Details) - Not Designated as Hedging Instrument [Member] - Cost of Sales [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Future [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ (258,881) | $ (788,253) | $ 1,177,383 | $ (113,672) |
Forward Contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss) on Derivative, Net | $ (57,419) | $ (424,895) | $ (2,427,909) | $ 53,655 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Investments (Details) | Sep. 30, 2020 |
Accounting Policies [Abstract] | |
Equity Method Investments, Number of Entities | 5 |
Ownership percentage in equity method investments (less than) | 20.00% |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies Revenue Recognition (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Policy Text Block] | no |
Summary of Significant Accou_10
Summary of Significant Accounting Policies Concentration Risk (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020Rate | Sep. 30, 2020Rate | |
Ethanol [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 78.00% | 76.00% |
Distillers Grain [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 18.00% | 20.00% |
Corn Oil [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 4.00% | 4.00% |
Inventory (Details)
Inventory (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory [Line Items] | ||
Raw Materials | $ 1,649,869 | $ 4,968,731 |
Finished Goods | 1,946,490 | 3,505,224 |
Work in Process | 784,258 | 952,319 |
Parts Inventory | 1,117,148 | 1,117,148 |
Inventory, Net | 5,497,765 | 10,543,422 |
Corn [Member] | ||
Inventory [Line Items] | ||
Inventory Adjustments | 0 | 424,000 |
Ethanol [Member] | ||
Inventory [Line Items] | ||
Inventory Adjustments | 0 | 167,000 |
Distillers Grain [Member] | ||
Inventory [Line Items] | ||
Inventory Adjustments | 0 | 72,000 |
Corn Oil [Member] | ||
Inventory [Line Items] | ||
Inventory Adjustments | $ 0 | $ 0 |
Investments (Details)
Investments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | |
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage | 20.00% | 20.00% | ||||||||
Investments | $ 16,212,660 | $ 16,212,660 | $ 16,682,169 | |||||||
Equity in net income (loss) of investments | 1,019,662 | $ (349,123) | (206,140) | $ (425,776) | ||||||
Assets, Current | 10,175,873 | 10,175,873 | 25,927,615 | |||||||
Liabilities, Current | 7,181,487 | 7,181,487 | 17,604,170 | |||||||
Liabilities, Noncurrent | 28,687,283 | 28,687,283 | 37,993,208 | |||||||
Members' Equity | 63,761,698 | 66,034,642 | 63,761,698 | 66,034,642 | $ 57,951,272 | $ 53,737,897 | 64,212,940 | $ 69,634,431 | $ 69,827,328 | $ 68,037,124 |
REVENUES | 33,917,787 | 32,441,510 | 91,798,857 | 80,151,796 | ||||||
Gross Profit | 6,046,492 | (1,815,202) | 3,808,775 | 1,933,079 | ||||||
Equity Method Investments | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Assets, Current | 226,285,312 | 226,285,312 | 219,618,012 | |||||||
Other Assets | 207,847,399 | 207,847,399 | 226,475,383 | |||||||
Liabilities, Current | 210,208,306 | 210,208,306 | 187,381,453 | |||||||
Liabilities, Noncurrent | 66,284,372 | 66,284,372 | 95,219,540 | |||||||
Members' Equity | 157,640,033 | 157,640,033 | 163,492,402 | |||||||
REVENUES | 93,946,470 | 94,474,407 | 236,109,319 | 230,715,486 | ||||||
Gross Profit | 15,327,809 | 5,266,631 | 17,650,973 | 14,095,945 | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest | $ 9,367,336 | (2,645,668) | $ (2,106,037) | (2,933,142) | ||||||
Renewable Products Marketing Group, LLC (RPMG) [Member] | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage | 5.00% | 5.00% | ||||||||
Investments | $ 1,197,000 | $ 1,197,000 | 1,295,000 | |||||||
Lawrenceville Tanks, LLC [Member] | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage | 10.00% | 10.00% | ||||||||
Investments | $ 194,000 | $ 194,000 | 251,000 | |||||||
Guardian Hankinson, LLC [Member] | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage | 10.00% | 10.00% | ||||||||
Investments | $ 4,874,000 | $ 4,874,000 | 4,991,000 | |||||||
Guardian Energy Management [Member] | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage | 17.00% | 17.00% | ||||||||
Investments | $ 88,000 | $ 88,000 | 53,000 | |||||||
Ring-Neck Energy and Feeds, LLC [Domain] | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage | 11.00% | 11.00% | ||||||||
Ring-neck Energy and Feeds [Member] | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Investments | $ 9,860,000 | $ 9,860,000 | $ 10,093,000 | |||||||
Equity Method Investment, Difference Between Carrying Amount and Underlying Equity, Accounting Treatment | 1,072,000 | |||||||||
Basis adjustment | $ 440,000 | |||||||||
Capitalized interest | $ 632,000 | |||||||||
Amortization period for amortization of investment premium | 20 years | |||||||||
Amortization | 14,416 | $ 14,416 | $ 43,247 | $ 24,026 | ||||||
Other Investments Combined [Member] | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Equity in net income (loss) of investments | $ 1,020,000 | $ (206,000) |
Revolving Operating Note (Detai
Revolving Operating Note (Details) - Farm Credit Services of America [Member] - Line of Credit [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Feb. 06, 2018 | |
Line of Credit Facility [Line Items] | ||
Maximum borrowing capacity | $ 2,000,000 | $ 10,000,000 |
Basis spread on variable rate | 3.00% | |
Interest rate at period end | 3.15% | |
Unused capacity, commitment fee percentage | 0.25% | |
Amount outstanding | $ 0 | |
Remaining borrowing capacity | 2,000,000 | |
Line of Credit Facility, Periodic Payment, Principal | $ 2,000,000 |
Long-Term Notes Payable (Detail
Long-Term Notes Payable (Details) - USD ($) | Feb. 01, 2023 | Sep. 30, 2020 | Jun. 01, 2020 | Dec. 31, 2019 | Feb. 06, 2018 |
Debt Instrument [Line Items] | |||||
Debt Instrument, Description of Variable Rate Basis | LIBOR | ||||
Long-term debt, gross | $ 29,000,000 | $ 39,000,000 | |||
Long-term debt | 29,762,136 | 38,989,208 | |||
Unamortized debt issuance expense | (8,264) | (10,792) | |||
Long-term debt, current maturities | (1,074,853) | (1,000,000) | |||
Long-term debt, excluding current maturities | 28,687,283 | 37,989,208 | |||
2020 | 1,074,853 | ||||
2021 | 1,509,216 | ||||
2022 | 1,176,910 | ||||
2023 | 1,000,208 | ||||
2024 | 2,000,215 | ||||
thereafter | 23,008,998 | ||||
Notes Payable | 770,400 | $ 0 | |||
Economic Injury Disaster Loan [Member] | |||||
Debt Instrument [Line Items] | |||||
Notes Payable | $ 10,000 | ||||
Debt Instrument, Interest Rate During Period | 3.75% | ||||
Small Business Administration [Member] | |||||
Debt Instrument [Line Items] | |||||
Notes Payable | $ 760,400 | ||||
Debt Instrument, Interest Rate During Period | 100.00% | ||||
Farm Credit Services of America [Member] | Medium-term Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Medium-term notes | $ 8,000,000 | ||||
Annual principal payment | $ 1,000,000 | ||||
Interest rate | 3.40% | ||||
Basis spread on variable rate | 3.25% | ||||
Medium-term notes, current | $ 6,000,000 | ||||
Farm Credit Services of America [Member] | Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 3.25% | ||||
Current borrowing capacity | $ 40,000,000 | ||||
Periodic decrease in line of credit availability | $ 1,750,000 | ||||
Maximum borrowing capacity | $ 48,000,000 | ||||
Interest rate at period end | 3.40% | ||||
Unused capacity, commitment fee percentage | 0.50% | ||||
Amount outstanding | $ 23,000,000 | ||||
Remaining borrowing capacity | 25,000,000 | ||||
Minimum Net Worth Required for Compliance | $ 18,000,000 | ||||
Debt Instrument, Covenant Description | 11,000,000 | ||||
Farm Credit Services of America [Member] | Revolving Promissory Note [Member] | |||||
Debt Instrument [Line Items] | |||||
Remaining borrowing capacity | $ 32,250,000 | ||||
Line of Credit [Member] | Farm Credit Services of America [Member] | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 3.00% | ||||
Maximum borrowing capacity | $ 2,000,000 | $ 10,000,000 | |||
Interest rate at period end | 3.15% | ||||
Unused capacity, commitment fee percentage | 0.25% | ||||
Amount outstanding | $ 0 | ||||
Remaining borrowing capacity | 2,000,000 | ||||
Line of Credit Facility, Periodic Payment, Principal | $ 2,000,000 | ||||
Subsequent Event [Member] | Farm Credit Services of America [Member] | Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 3.50% |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, gross | $ 29,000,000 | $ 39,000,000 |
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, gross | 29,770,400 | 39,000,000 |
Long-term debt, fair value | 29,770,400 | 39,000,000 |
Fair Value, Recurring [Member] | Future [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 63 | 33,338 |
Derivative liability | (471,725) | (1,500) |
Fair Value, Recurring [Member] | Future [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 63 | 33,338 |
Derivative liability | (471,725) | (1,500) |
Fair Value, Recurring [Member] | 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 |
Fair Value, Recurring [Member] | Future [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | |
Derivative liability | 0 | |
Fair Value, Recurring [Member] | Forward Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 224,549 | 160,687 |
Derivative liability | (3,450) | (698,850) |
Fair Value, Recurring [Member] | 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 |
Fair Value, Recurring [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 224,549 | 160,687 |
Derivative liability | (3,450) | (698,850) |
Fair Value, Recurring [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | |
Derivative liability | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||||
Ownership percentage | 20.00% | 20.00% | |||
Related Party Transaction, Due from (to) Related Party | $ 1,405,719 | $ 1,405,719 | $ 891,227 | ||
Due to related parties | $ 30,057 | $ 30,057 | 46,234 | ||
Renewable Products Marketing Group, LLC (RPMG) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Ownership percentage | 5.00% | 5.00% | |||
Purchases from related party | $ 425,000 | $ 166,804 | $ 801,000 | $ 830,478 | |
Due to related parties | 0 | 0 | $ 0 | ||
Ethanol [Member] | Renewable Products Marketing Group, LLC (RPMG) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue, related party | 26,484,451 | 25,602,911 | 70,050,239 | 62,706,692 | |
Marketing fees, related party | 59,727 | 60,960 | 139,363 | 182,880 | |
Distillers Grain [Member] | Renewable Products Marketing Group, LLC (RPMG) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue, related party | 2,938,941 | 2,158,001 | 6,617,691 | 3,333,325 | |
Marketing fees, related party | 25,010 | 16,338 | 48,929 | 25,278 | |
Corn Oil [Member] | Renewable Products Marketing Group, LLC (RPMG) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue, related party | 1,374,468 | 1,253,882 | 4,051,885 | 3,064,398 | |
Marketing fees, related party | 12,965 | 10,431 | 30,858 | 25,007 | |
Denaturant [Member] | Renewable Products Marketing Group, LLC (RPMG) [Member] | |||||
Related Party Transaction [Line Items] | |||||
Marketing fees, related party | $ 216,345 | $ 243,052 | $ 908,238 | $ 579,137 |