Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes   X       No        

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to their Form 10-K.  [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See definition of "large accelerated filer", "accelerated filer", and "smaller reporting company": in Rule 12b-2 of the Exchange Act. (Check One):

[ ] Emerging growth company  ___

The aggregate market value of common equity held by non-affiliates, computed by reference to the last sales price as reported by NASDAQ on June 30, 2016,2017, was $487,505,243.$656,675,622.

The number of shares of the registrant’s common stock, no par value ("Common Stock") outstanding as of March 3, 2017February 23, 2018 was 16,708,742.16,798,353.

The following documents are incorporated herein by reference:

The calculation of the aggregate market value of the Common Stock held by non-affiliates is based on the assumption that affiliates include directors and executive officers. Such assumption does not constitute an admission by the Company or any director or executive officer that any director or executive officer is an affiliate of the Company.

All amounts in this report, except for shares, par values, bushels, gallons, pounds, mmbtu, proof gallons, per share, per bushel, per gallon, per proof gallon, and percentage amounts are shown in thousands, unless otherwise noted.

MGP is a leading producer and supplier of premium distilled spirits and specialty wheat protein and starch food ingredients. Distilled spirits include premium bourbon and rye whiskeys and grain neutral spirits ("GNS"), including vodka and gin. MGP is also a top producer of high quality industrial alcohol for use in both food and non-food applications. Our protein and starch food ingredients provide a host of functional, nutritional, and sensory benefits for a wide range of food products to serve the packaged goods industry. Our distillery products are derived from corn and other grains, (including rye, barley, wheat, barley malt, and milo), and our ingredient products are derived from wheat flour.  The majority of our distillery and ingredient product sales are made directly, or through distributors, to manufacturers and processors of finished packaged goods or to bakeries.

We are headquartered in Atchison, Kansas, where distilled alcohol products and food ingredients are produced at our production facility ("Atchison facility"). Premium spirits are also distilled and matured at our facility in Lawrenceburg and Greendale, Indiana ("Lawrenceburg facility").

As of December 31, 2016,2017, we had two reportable segments: distillery products and ingredient solutions. Additional information about our reportable segments can be found in Management’s Discussion & Analysis ("MD&A") and Note 11. Note 11 provides detail of our foreign and domestic net sales revenue and identifiable assets.

Our sales are generally not seasonal.

Historically, our output has been transported to customers by truck and rail, most of which is provided by common carriers. We use third party transportation companies to help us manage truck and rail carriers who deliver our products to our North American customers. As of December 31, 2016,2017, we leased 207223 rail cars under operating leases.  

Our principal distillery products segment raw materials, or input costs, are corn and other grains (including rye, barley, wheat, barley malt, and milo), which are processed into food grade alcohol and distillery co-products consisting of distillers feed, fuel grade alcohol, and corn oil. Our principal ingredient solutions segment raw material is wheat flour, which is processed into starches and proteins.  The cost of grain has, at times, been subject to substantial fluctuation.

In 2016,2017, we purchased most of our grain requirements from two suppliers, Bunge Milling, Inc. ("Bunge") and Consolidated Grain and Barge Co. ("CGB"). Our current grain supply contracts with Bunge Milling and CGB both expire on December 31, 2017. These2021 and December 31, 2020, respectively. Through these contracts, permit us towe purchase grain for delivery up to 12 months into the future at negotiated prices based on a formula using several factors.  We also order wheat flour anywhere from one to 24 monthsfor delivery into the future.future at negotiated prices based on several factors.  We provide for our wheat flour requirements through a supply contract with Ardent Mills, which has a term that expires July 10, 2019. We typically enter contracts for future delivery only to protect margins on contracted alcohol sales, expected ingredient sales, and general usage.

Our principal packaging material for our distillery products segment is oak barrels. Both new and used barrels are utilized for the aging of premium bourbon and rye whiskeys. We purchase oak barrels from multiple suppliers and some customers supply their own barrels.

We also source food grade alcohol from Pacific Ethanol Central, LLC ("Pacific Ethanol"), formerly Illinois Corn Processing, LLC ("ICP"), which was our 30 percent ownedpercent-owned joint venture. See additionalventure until July 3, 2017 when it was divested and sold to Pacific Ethanol. Additional information related to ICP and the divestiture is in "Equity Method Investments" below, the MD&A, and Note 3.

We use naturalNatural gas is an input cost used to operate boilers that we use to make steam heat.  We procure natural gas for our facilities in the open market from various suppliers.  We have a risk management program whereby we may purchase contracts for the delivery of natural gas infor delivery into the future at predeterminednegotiated prices based on several factors, or we can purchase futures contracts on the exchange.  Depending on existing market conditions, in Atchison we have theuse our ability to transport gas through a gas pipeline owned by a wholly-owned subsidiary.  Historically, prices of natural gas have been higher in the late fall and winter months than during other periods. 

As of December 31, 2016,2017, we had a total of 311317 employees.  A collective bargaining agreement covering 10599 employees at the Atchison facility expires on August 31, 2019.  AnotherA collective bargaining agreement covering 6062 employees at the Lawrenceburg facility expires on December 31, 2017.2022.  We consider our relations with our personnel generally to be good.

We are subject to a broad range of federal, state, local, and foreign laws and regulations intended to protect public health and the environment.  Our operations are also subject to regulation by various federal agencies, including the Alcohol and Tobacco Tax Trade Bureau ("TTB"), the Occupational Safety and Health Administration ("OSHA"), the Food and Drug Administration ("FDA") and the U.S.United States Environmental Protection Agency ("EPA"), and by various state and local authorities.  Such laws and regulations cover virtually every aspect of our operations, including production and storage facilities, distillation and maturation requirements, importing ingredients, distribution of beverage alcohol products, marketing, pricing, labeling, packaging, advertising, water usage, waste water discharge, disposal of hazardous wastes and emissions, and other matters. In addition, beverage alcohol products are subject to customs duties or excise taxation in many countries, including taxation at the federal, state, and local level in the United States.

On April 9, 2015,July 3, 2017, we sold our 30 percent equity ownership interest in ICP obtained a $30,000 revolving credit facility with JPMorgan Chase Bank, N.A., which may be increased in the future byto Pacific Ethanol pursuant to an additional $20,000, subject to lender approval. The revolver maturesAgreement and Plan of Merger ("Merger Agreement") entered into on April 9, 2018. Simultaneous with the execution of the April 2015 revolving credit facility, ICP terminated its $15,000 amended and restated revolving credit facility withJune 26, 2017. Illinois Corn Processing Holdings, Inc., an affiliate of SEACOR which would have matured January 31, 2016. We have no obligationHoldings, Inc., held the remaining equity in ICP that was also sold pursuant to provide additional funding to ICP.the Merger Agreement (Note 3).

Our officers as of December 31, 20162017 and their ages as of March 8, 2017 are listed below.

Our business is subject to certain risks and uncertainties.uncertainties that could cause actual results and events to differ materially from forward looking statements.  The following discussion identifies those which we consider to be most important. The following discussion of risks is not all inclusive. Additional risks not currently known to us or that we currently deem to be immaterial may also materially and adversely affect our business, financial condition, or results of operations.

Although we maintain insurance coverage for various property damage and loss events, an interruption in or loss of operations at either of our production facilities or the facilities of ICP, could reduce or postpone production of our products, which could have a material adverse effect on our business, results of operations, and/or financial condition. To the extent that our value added products rely on unique or proprietary processes or techniques, replacing lost production by purchasing from outside suppliers becomes morewould be difficult.

Our customers store a substantial amount of barreled inventory of aged premium bourbon and rye whiskeys at our Lawrenceburg facility. If there was a catastrophic event at our Lawrenceburg facility, our customers' business could be adversely affected. The loss of a significant amount of aged inventory through fire, natural disaster, or otherwise could result in a significant reduction in supply of the affected product or products and if we are negligent in the custodial care of our customers' inventory, this could result in customer claims against us.

We also store a substantial amount of our own inventory of aged premium bourbon and rye whiskeys at our Lawrenceburg facility. If there was a catastrophic event at our Lawrenceburg facility, our business, financial condition, or results of operations could be adversely affected. The loss of a significant amount of our aged inventory through fire, natural disaster, or otherwise, could result in a reduction in supply of the affected product or products and could affect our long-term growth.

A disruption in transportation services could result in difficulties supplying materials to our facilities and impact our ability to deliver products to our customers in a timely manner.manner, and our business, financial condition, or results of operations could be adversely affected.

Grain and wheat flour costs are a significant portion of our costs of goods sold. Historically, the cost of such raw materials has, at times, been subject to substantial fluctuation, depending upon a number of factors which affect commodity prices in general and over which we have no control.  These include crop conditions, weather, disease, plantings, government programs and policies, competition for acquisition of inputs such as agricultural commodities, purchases by foreign governments, and changes in demand resulting from population growth and customer preferences.  The price of natural gas also fluctuates based on anticipated changes in supply and demand, weather, and the prices of alternative fuels.  Fluctuations in the price of commodities and natural gas can be sudden and volatile at times and have had, from time to time, significant adverse effects on the results of our operations. Higher energy costs could result in higher transportation costs and other operating costs.

We have signed supply agreements with Bunge Milling and CGB for our grain supply (primarily corn) and with Ardent Mills for our wheat flour. The Company also procures some textured wheat proteins through a third-party toll manufacturer in the United States. If any of these companies encounters an operational or financial issue, or otherwise cannot meet our supply demands, it could lead to an interruption in supply to us and/or higher prices than those we have negotiated or than are available in the market at the time.

 

The markets for products in which we participate are very competitive. Our principal competitors in these markets have substantial financial, marketing, and other resources, and several are much larger enterprises than us.

We are dependent on being able to generate net sales and other operating income in excess of costthe costs of products sold in order to obtain margins, profits, and cash flows to meet or exceed our targeted financial performance measures.  Competition is based on such factors as product innovation, product characteristics, product quality, pricing, color, and name.  Pricing of our products is partly dependent upon industry processing capacity, which is impacted by competitor actions to bring online idled capacity or to build new production capacity.  If market conditions make our products too expensive for use in consumer goods, our revenues could be affected.  If our principal competitors were to decrease their pricing, we could choose to do the same, which could adversely affect our margins and profitability.  If we did not do the same, our revenues could be adversely affected due to the potential loss of sales or market share. Our revenue growth could also be adversely affected if we are not successful in developing new products for our customers or as a result of new product introductions by our competitors.  In addition, more stringent new customer demands may require us to make internal investments to achieve or sustain competitive advantage and meet customer expectations.

Research activities and product launch activities are inherently uncertain.  The failure to launch a new product successfully cancould give rise to inventory write offswrite-offs and other costs and cancould affect consumer perception of an existing brand. Any significant changes in consumer preferences and failure to anticipate and react to such changes could result in reduced demand for our products.  If we were to have unsuccessful research activities or product launches, our profitabilitybusiness, financial condition, or results of operations could be adversely affected.

As of December 31, 2016,2017, approximately 165161 of our 311317 employees were members of a union.  Although our relations with our two unions are stable and our labor contracts do not expire until December 2017 and August 2019 and December 2022, there is no assurance that we will not experience work disruptions or stoppages in the future, which could have a material adverse effect on our business, andfinancial condition, or results of operations and could adversely affect our relationships with our customers.

We rely on the continued services of key personnel involved in management, finance, product development, sales, manufacturing and distribution, and, in particular, upon the efforts and abilities of our executive management team.  The loss of service of any of our key personnel could have a material adverse effect on our business, financial condition, results of operations, and on our system of internal controls.  

Our credit agreement containsarrangements (Item 5 and Note 5) contain a number of financial and other covenants that include provisions which require us, in certain circumstances, to meet certain financial tests.  These covenants could hinder our ability to operate and could reduce our profitability.  In addition, our credit agreement permits the lender to modify borrowing base and advance rates, the effect of which may limit our available credit under the agreement. The lender may also terminate or accelerate our obligations under theour credit agreementarrangements upon the occurrence of various events in addition to payment defaults and other breaches.  Any acceleration of our debt modification to reduce our borrowing base, or termination of our credit agreementarrangements would negatively impact our overall liquidity and maymight require us to take other actions to preserve any remaining liquidity.  Although we anticipate that we will be able to meet the covenants in our credit agreement,arrangements, there can be no assurance that we will do so, as there are a number of external factors that affect our operations over which we have little or no control.control, that could have a material adverse effect on our business, financial condition, or results of operations.

Selling products for human consumption involves inherent legal and other risks, including product contamination, spoilage, product tampering, allergens, or other adulteration. We could decide to, or be required to, recall products due to suspected or confirmed product contamination, adulteration, misbranding, tampering, or other deficiencies. Although we maintain product recall insurance, product recalls or market withdrawals could result in significant losses due to their costs, the destruction of product inventory, and lost sales due to the unavailability of the product for a period of time. We could be adversely affected if our customers lose confidence in the safety and quality of certain of our products, or if consumers lose confidence in the food and beverage safety system generally. AdverseNegative attention about these types of concerns, whether or not valid, may damage our reputation, discourage consumers from buying our products, or cause production and delivery disruptions.

 

We may also suffer losses if our products or operations cause injury, illness, or death. In addition, our marketingwe could face claims of false or deceptive advertising or other criticism. A significant product liability or other legal judgment or a related regulatory enforcement action against us, or a significant product recall, may materially and adversely affect our reputation and profitability. Moreover, even if a product liability or other legal or regulatory claim is unsuccessful, has no merit, or is not pursued, the negative publicity surrounding assertions against our products or processes could materially and adversely affecthave a material adverse effect our product sales,business, financial condition, and operating results.or results of operations.

 

We are subject to a broad range of federal, state, local, and foreign laws and regulations relatingintended to the protection of theprotect public health and the environment.  Our operations are also subject to regulation by various federal agencies, including the TTB, OSHA, the FDA, and the EPA, and by various state and local authorities.  Such laws and regulations cover virtually every aspect of our operations, including production and storage facilities, distillation and maturation requirements, importing ingredients, distribution of beverage alcohol products, marketing, pricing, labeling, packaging, advertising, water usage, waste water discharge, disposal of hazardous wastes and emissions, and other matters. In addition, beverage alcohol products are subject to customs, duties, or excise taxation in many countries, including taxation at the federal, state, and local level in the United States.

Violations of any of these laws and regulations may result in administrative, civil, or criminal fines or penalties being levied against us, including temporary or prolonged cessation of production, revocation or modification of permits, performance of environmental investigatory or remedial activities, voluntary or involuntary product recalls, or a cease and desist order against operations that are not in compliance.compliance with applicable laws. These laws and regulations may change in the future and we may incur material costs in our efforts to comply with current or future laws and regulations. These matters may have a material adverse effect on our business, and financial results.condition, or results of operations.

We rely on information technology ("IT") systems, networks, and services, including internet sites, data hosting and processing facilities and tools, hardware (including laptops and mobile devices), software and technical applications and platforms, some of which are managed and hosted by third party vendors to assist us in the management of our business. The various uses of these IT systems, networks, and services include, but are not limited to: hosting our internal network and communication systems; enterprise resource planning; processing transactions; summarizing and reporting results of operations; business plans, and financial information; complying with regulatory, legal, or tax requirements; providing data security; and handling other processes necessary to manage our business. Although we have ansome offsite backup systemsystems and a disaster recovery plan, any failure of our information systems could adversely impact our ability to operate.  Routine maintenance or development of new information systems may result in systems failures, which may adversely affecthave a material adverse effect on our business, financial condition, or results of operations and financial results.operations. 

Increased IT security threats and more sophisticated cyber crime pose a potential risk to the security of our IT systems, networks, and services, as well as the confidentiality, availability, and integrity of our data. This can lead to outside parties having access to our privileged data or strategic information, our employees, or our customers.  Any breach of our data security systems or failure of our information systems may have a material adverse impact on our business operations and financial results.  If the IT systems, networks, or service providers we rely upon fail to function properly, or if we suffer a loss or disclosure of business or other sensitive information due to any number of causes, ranging from catastrophic events to power outages to security breaches, and our disaster recovery plans do not effectively address these failures on a timely basis, we may suffer interruptions in our ability to manage operations and reputational, competitive, or business harm, which may adversely affecthave a material adverse effect on our business, operationsfinancial condition, or financial condition.results of operations. In addition, such events could result in unauthorized disclosure of material confidential information, and we may suffer financial and reputational damage because of lost or misappropriated confidential information belonging to us or to our partners, our employees, customers, and suppliers. Although we maintain insurance coverage for various cybersecurity risks, in any of these events, we could also be required to spend significant financial and other resources to remedy the damage caused by a security breach or to repair or replace networks and IT systems.

Distillers feed, fuel grade alcohol, and corn oil are the principal co-products of our alcohol production process and can contribute in varying degrees to the profitability of our distillery products segment.  Distillers feed and corn oil are sold for prices which historically have tracked the price of corn, but certain of our co-products compete with similar products made from other plant feedstocks, the cost of which may not have risen in unison with corn prices.  We sell fuel grade alcohol, the prices for which typically, but not always, have tracked price fluctuations in gasoline prices.  As a result, the profitability of these products could be affected.

There is an inherent risk in determining the quantity of maturing stock of aged distillate to lay down in a given year for future sales as a result of changes in consumer demand, pricing, new brand launches, changes in product cycles, and other factors. Demand for products can change significantly between the time of production and the date of sale. It may be more difficult to make accurate predictionpredictions regarding new products and brands. Inaccurate decisions and/or estimations could lead to an inability to supply future demand or lead to a future surplus of inventory and consequent write downwrite-down in the value of maturing stocks of aged distillate.  As a result, profitabilityour business, financial condition, or results of the distillery products segmentoperations could be materially adversely affected.

A component of our strategic plan is to develop our own brands, particularly whiskeys. Risks related to this strategy include:

On October 21, 2015, we announced a major expansion in warehousing capacity on a 20-acre campus adjoining the Company's current Lawrenceburg facility. Our Board of Directors has approved additional investments for the project, for a total approved investment of $29,000.capacity. The program includes both the refurbishment of existing warehouse buildings and the construction of new warehouses. The first projects included in this program were completed in late 2015, with additional projects completed in 2016. Additional warehouse capacity included in the total approved2016 and 2017. This program is expected to be completed bycontinued into the end of 2018.future. There is the potential risk of completion delays, including risk of delay associated with required permits and cost overruns, which could affecthave a material adverse effect our business, financial condition, andor results of operations.

Companies in the beverage alcohol industry are, from time to time, exposed to class action or other litigation relating to alcohol advertising, product liability, alcohol abuse problems or health consequences from the misuse of alcohol. Such litigation may result in damages, penalties or fines as well as damage to our reputation, which could have a material adverse effect on our cash flows,business, financial condition, and financial results.or results of operations.

In recentFor many years, there has been increaseda high level of social and political attention directed at the beverage alcohol industry.  The recent attention has focused largely on public health concerns related to alcohol abuse, including drunk driving, underage drinking, and the negative health impacts of the abuse and misuse of beverage alcohol.

Our strategic plan for our ingredient solutions segment includes focusing our efforts on the sale of specialty proteins and starches to targeted domestic consumer packaged goods customers.  Our major focus is directed at food ingredients, which are primarily used in foods that are developed to address consumers’ desire for healthier and more convenient products; these consist of dietary fiber, wheat protein isolates and concentrates, and textured wheat proteins.  The bulk of our applications technology and research and development efforts are dedicated to providing customers with specialty ingredient solutions that deliver nutritional benefits, as well as desired functional and sensory qualities to their products.  Our business, financial condition, and financial results of operations could be materially adversely affected if our customers were to reduce their new product development ("NPD") activities or cease using our unique dietary fibers, starches, and proteins in their NPD efforts.

Under our Articles of Incorporation, holders of our Preferred Stock are entitled to elect five of our nine directors and only holders of our Preferred Stock are entitled to vote with respect to a merger, dissolution, lease, exchange or sale of substantially all of our assets, or on an amendment to the Articles of Incorporation, unless such action would increase or decrease the authorized shares or par value of the Common or Preferred Stock, or change the powers, preferences or special rights of the Common or Preferred Stock so as to affect the holders of Common Stock adversely.  Generally, the Common Stock and Preferred Stock vote as separate classes on all other matters requiring stockholder approval.  

None.

These facilities are generally in good operating condition and are generally suitable for the business activity conducted therein.  We have existing manufacturing capacity to grow our ingredient solutions business at our Atchison facility, as needed.  All of our production facilities, executive office building, and technical innovation center are owned, and all of our owned properties are subject to mortgages in favor of one or more of our lenders.  We also own or lease transportation equipment and facilities and a gas pipeline as described under Item 1. Business - Transportation and Item 1. Business - Energy.

Not applicable.

Equity compensation plans’plan information is incorporated by reference from Part III, Item 12, “Security"Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,”" of this document, should be considered an integral part of Item 5. Our Common Stock is traded on the NASDAQ Global Select Market. At March 3, 2017,Market under the ticker symbol MGPI.  As of February 23, 2018, there were approximately 533415 holders of record of our Common Stock. According to reports received from NASDAQ, the average daily trading volume of our Common Stock (excluding block trades) ranged from 31,60044,900 to 3,103,500918,300 shares during the year ended December 31, 2016.2017. 

The table below reflects the high and low sales prices of our Common Stock and the details of dividends and dividend equivalents per share for each quarter of 20162017 and 2015:2016:

Our credit agreement (the "Credit Agreement") with Wells Fargo Bank, allowsNational Association ("N.A.") (the "Credit Agreement") and our Note Purchase and Private Shelf Agreement (the "Note Purchase Agreement") with PGIM, Inc. ("Prudential Capital Group") (Note 5) allow for the payment of cash dividends (asas defined in Restricted Payments of the Credit Agreement), which are limited to $2,000.Agreement and the Note Purchase Agreement.  Restricted Payments are allowed to exceed $2,000 provided we maintain Excess Availabilityas long as no Default exists, or will exist, after giving effect thereto on the date thereof, and on a Pro Forma Basis as if the Restricted Payment occurred on the last day of 17.5 percent of the Total Facility Amount and a Fixed Charge Coverage Ratio for the most recently completed 12 months of at least 1.10:1.00, or if Excess Availability exceeds 25 percent of the Total Facility Amountended four-fiscal quarter period (with the terms "Restricted Payments," "Excess Availability," "Total Facility Amount,"Default and "Fixed Charge Coverage Ratio"Pro Forma Basis as defined in the Credit Agreement and the Note Purchase Agreement) (Note 5).

On February 15, 2017,21, 2018, the Board of Directors declared a quarterly dividend payable to stockholders of record as of March 1, 2017,9, 2018, of our Common Stock and a dividend equivalent payable to holders of RSUsrestricted stock units ("RSUs") as of March 1, 2017,9, 2018, of $0.04$0.08 per share and per unit.  The dividend payment and dividend equivalent payment will occur on March 24, 2017.23, 2018.

 

We expect to continue our policy of paying quarterly cash dividends, although there is no assurance as to the declaration or amount of any future dividends because they are dependent on future earnings, capital requirements, and debt service obligations.

We did not sell equity securities during the quarter ended December 31, 2016.2017.

^(b) Percentage points ("pp")

Gross profit increased year-versus-year by $6,174, or 12.2 percent. Gross margin for 2016 increased to 21.4 percent from 18.7 percent for 2015, which was primarily due to the continuing shift in sales mix within food grade alcohol from lower margin industrial alcohol products to higher margin premium beverage alcohol products, a decline in input costs, an increase in warehouse services revenue, partially offset by a lower average selling price.