November 2021 PO Box 100 Wentworth, SD 57075 605-483-2676 (corn) 888-539-2676 (corn) www.dakotaethanol.com Office hours: 8:00 a.m. to 5:00 p.m. (M-F) Receiving/shipping hours: 7:30 a.m. to 4:30 p.m. (M-F) Investor Relations email: investor-relations@dakotaethanol.com Contact information Do we have your current address and phone number? Have you moved? No longer have a home phone? Is your cell phone your only phone number? What is your email address? Call or send an email to investor-relations@dakotaethanol. com with your current contact information. This newsletter contains forward-looking statements. We undertake no respon- sibility to update any forward-looking statement. When used, the words “be- lieve”, “expect”, “will”, “can”, “estimate”, “anticipate” and similar expressions are intended to identify forward-looking statements. Readers should not place undue reliance on any forward-looking statements and recognize that the statements are not predictions of actual future results; which could, and likely will differ materially from those anticipated in the forward-looking statements due to risks and uncertainties, including those described in our SEC filings, copies of which are available through our website or upon request. In order to be considered for election at the 2022 annual meeting, manager nominations must be made on a Manager Nomination Petition and submitted by January 1, 2022, unless the company notifies the members of a different deadline. We suggest that manager nomina- tions be submitted by certified mail-return receipt requested. Members who intend to present a proposal at the 2022 annual meeting of members without having included a proposal in the annual meet- ing information statement, which had a Nov. 10 deadline, must provide notice of such proposal no later than January 24, 2022. Lake Area Corn Processors reserves the right to reject, rule out of order, or take appro- priate action with respect to any proposal that does not comply with these and other applicable requirements. 2022 annual meeting and manager nominations Ethanol Producer magazine features DE board member in carbon accounting discussion Dakota Ethanol board member Ron Alverson was recently featured in a story in Ethanol Pro- ducer magazine about how accurately account- ing for the value of carbon sequestration by corn on the farm can impact ethanol’s drive toward a net-zero carbon impact. This excerpt from the article, written by Susanne Retka Schill, explains how he first became interested in the topic. ~~~ Alverson got interested in the life cycle analyses of corn when the Dakota Ethanol board he served on considered the requirements of the Renewable Fuel Standard and the California Low Carbon Fuel Standard—he was one of the organizers of the ethanol plant at Went- worth, South Dakota, not far from his farm near Chester. “I started looking at the models and asking, ‘How do you determine that? What are the fac- tors that make it low carbon?’” Alverson says. “I started reading up and cracked open the GREET model. It was super intimidating for a long time, but I kept at it persistently, talking to the guys at Argonne Lab and asking a lot of questions.” Among the things he learned was that the GREET (Greenhouse Gases, Regulated Emis- sions and Energy Use in Transportation) model developed by the DOE’s Argonne National Laboratory assumes the worst-case scenario for nitrogen loss, resulting in a stiff penalty for ni- trous oxide emissions. “They make the assump- tion that we’re losing 40% of nitrogen we apply to fields to volatilization and leeching. That’s just crazy. There’s not any modern research that’s been done that would suggest we’re losing that much nitrogen,” he says. Nitrous oxide emis- sions from the projected nitrogen losses make up a big portion of corn’s carbon intensity, as the greenhouse gas impact is nearly 300 times more powerful than an equal amount of carbon dioxide. ~~~ You can read the entire story online at http:// www.ethanolproducer.com/articles/18612/ carbon-counting-on-the-farm to learn more about efforts to make on-farm efforts part of the carbon equation.
Dakota Ethanol LLC November 2021 Page 2 The third quarter provided for continued strong financial performance —as the economy has opened up, the demand for gasoline has recovered and so has ethanol production and profitability. The higher prices for crude oil and unleaded gas versus ethanol prices are supporting the margins for ethanol. Corn oil prices also contributed to the increased margins as prices were higher as a result of increased demand by the biodiesel sector. Production was steady at Dakota Ethanol, exceeding 21 million gallons of ethanol for the quarter and 66 million gal- lons for the nine months ended September 30, 2021. Distillers values were weaker based on increased supply and seasonal decreases in demand. Soybean meal put price pressure on the distillers values. Corn prices were supported by drought conditions along with other production issues throughout the corn belt this summer. Strong domestic and global corn demand have been supportive of corn prices. Natural gas prices were higher as a result of increased domestic and global demand, below average production, and overall strength in the energy sector. The increased profitability was experience at the Ring- neck and Hankinson ethanol plants also. 20-cent per unit distribution added Continued strong profitability has allowed for reduction of the balances of our long-term debt along with a distribution CFO Report: Economic rebound shows in DE profitability Balance Sheet Data 9/30/21 12/31/20 Working Capital $ 6,680,665 $ 12,348,891 Net Property, Plant & Equipment 57,553,079 61,367,497 Total Assets 109,659,600 121,857,947 Long-Term Obligations 3,994,556 35,561,237 Members’ Equity 87,713,318 65,268,579 Book Value per Capital Unit 2.96 2.20 Statement of Operations Nine Months Ended 9/30/21 Nine Months Ended 9/30/20 Revenues $ 176,648,273 $ 91,798,857 Cost of Revenues 151,181,885 87,990,082 Gross Profit (Loss) 25,466,388 3,808,775 Operating Expense 3,776,472 3,277,570 Income (Loss) From Operations 21,689,916 531,205 Other Income (Expense) 3,716,823 (982,447) Net Income (Loss) $ 25,406,739 $ (451,242) Capital Units Outstanding 29,620,000 29,620,000 Net Income (Loss) Per Capital Unit $0.86 $(0.02) Cash Distributions Per Capital Unit $0.10 $- Away for the winter? Ensure that Dakota Ethanol has your temporary address so that you receive essential com- munications in a timely manner, including information about the 2022 annual meeting. Contact the office at PO Box 100, Wentworth, SD 57075; 605- 483-2676; or investor-relations@ dakotaethanol.com. to members of $0.10 per unit in August 2021. Another distribution to members of $0.20 per unit was declared and paid in November 2021. The 2021 corn harvest in our area was highly varied, but better than expected considering the limited rainfall this past growing season.. —Rob Buchholtz, CFO There are 29,620,000 capital units issued and outstanding and approximately 1,060 unit holders. The following table contains information concerning completed unit transactions that occurred during the first three quarters of 2021. Units traded during that time represent fewer than 1 percent of the total units outstanding. For more details on Lake Area Corn Processors, LLC trading please contact Variable Investment Advisors at 1-800-859-3018, visit their website at www.agstocktrade.com or contact our office. Quarter Low Price High Price Average Units Traded First Quarter 2021 1.51 1.75 1.63 53,500 Second Quarter 2021 1.68 2.02 1.82 75,000 Third Quarter 2021 2.03 2.20 2.14 101,000 Unit trading increases in volume, price in 2021