Lake Area Corn Processors (LKCRU) 10-Q12 Nov 132013 Q3 Quarterly reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
Document and Entity Information	Sep. 30, 2013	Nov. 12, 2013
Document Information [Line Items]	'	'
Entity Registrant Name	'LAKE AREA CORN PROCESSORS LLC	'
Entity Central Index Key	'0001156174	'
Current Fiscal Year End Date	'--12-31	'
Entity Filer Category	'Non-accelerated Filer	'
Document Type	'10-Q	'
Document Period End Date	30-Sep-13	'
Document Fiscal Year Focus	'2013	'
Document Fiscal Period Focus	'Q3	'
Amendment Flag	'false	'
Entity Common Stock, Shares Outstanding	'	29,620,000

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Sep. 30, 2013	Dec. 31, 2012
CURRENT ASSETS	'	'
Cash and cash equivalents	$8,299,852	$7,662,901
Accounts receivable	3,353,921	4,251,590
Other receivables	21,728	91,139
Inventory	7,049,662	11,552,830
Derivative financial instruments and due from broker	701,886	3,322,650
Prepaid expenses	107,318	137,990
Total current assets	19,534,367	27,019,100
PROPERTY AND EQUIPMENT	'	'
Land	676,097	676,097
Land improvements	2,665,358	2,665,358
Buildings	8,277,636	8,277,636
Equipment	40,111,984	39,828,295
Construction in progress	47,702	0
Gross Property and Equipment	51,778,777	51,447,386
Less accumulated depreciation	-28,333,951	-26,361,261
Net property and equipment	23,444,826	25,086,125
OTHER ASSETS	'	'
Goodwill	10,395,766	10,395,766
Investments	3,800,727	3,385,479
Other	385,261	86,609
Total other assets	14,581,754	13,867,854
TOTAL ASSETS	57,560,947	65,973,079
CURRENT LIABILITIES	'	'
Accounts payable	4,544,366	13,518,218
Accrued liabilities	452,984	355,278
Derivative financial instruments	886,442	535,816
Current portion of notes payable	31,366	288,631
Other	119,732	34,540
Total current liabilities	6,034,890	14,732,483
LONG-TERM LIABILITIES	'	'
Notes payable, net of current maturities	21,797	157,535
Other	474,626	8,726
Total long-term liabilities	496,423	166,261
COMMITMENTS AND CONTINGENCIES	'	'
MEMBERS' EQUITY (29,620,000 units issued and outstanding)	51,029,634	51,074,335
TOTAL LIABILITIES AND MEMBERS' EQUITY	$57,560,947	$65,973,079

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets Parenthetical	Sep. 30, 2013	Dec. 31, 2012
MEMBERS' EQUITY, units issued and outstanding	29,620,000	29,620,000

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		9 Months Ended
Consolidated Statements of Operations (Unaudited) (USD $)	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
REVENUES	$36,613,246	$34,424,396	$113,194,531	$97,273,527
COSTS OF REVENUES	34,505,581	33,114,047	105,061,703	95,231,086
GROSS PROFIT (LOSS)	2,107,665	1,310,349	8,132,828	2,042,441
OPERATING EXPENSES	762,794	649,491	2,589,099	2,176,884
INCOME (LOSS) FROM OPERATIONS	1,344,871	660,858	5,543,729	-134,443
OTHER INCOME (EXPENSE)	'	'	'	'
Interest income	18,644	6,467	47,950	29,083
Equity in net income of investments	120,132	62,402	339,248	93,697
Interest expense	-8,435	-29,145	-51,627	-50,318
Total other income	130,341	39,724	335,571	72,462
NET INCOME (LOSS)	$1,475,212	$700,582	$5,879,300	($61,981)
BASIC AND DILUTED EARNINGS (LOSS) PER UNIT	$0.05	$0.02	$0	$0
Weighted average number of units outstanding for the calculation of basic & diluted earnings (loss) per unit	29,620,000	29,620,000	29,620,000	29,620,000
Distributions Declared Per Unit	$0.10	$0	$0.20	$0.05

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
Consolidated Statements of Cash Flows (Unaudited) (USD $)	Sep. 30, 2013	Sep. 30, 2012
OPERATING ACTIVITIES	'	'
Net income (loss)	$5,879,300	($61,981)
Changes to net income (loss) affecting cash and cash equivalents	'	'
Depreciation and amortization	2,115,497	1,994,401
Equity in net (income) of investments	-339,248	-93,697
(Increase) decrease in	'	'
Receivables	967,080	406,582
Inventory	4,503,168	-653,166
Prepaid expenses	30,672	52,537
Derivative financial instruments and due from broker	2,971,390	-3,678,033
Accounts payable	-8,828,556	-4,516,788
Accrued and other liabilities	300,705	-262,641
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	7,600,008	-6,812,786
INVESTING ACTIVITIES	'	'
Purchase of property and equipment	-482,495	-862,191
Changes in other assets	108,990	0
NET CASH (USED IN) INVESTING ACTIVITIES	-591,485	-862,191
FINANCING ACTIVITIES	'	'
Principal payments on long-term notes payable	-393,002	-317,489
Financing costs paid	-54,570	0
Distributions paid to LACP members	-5,924,000	-1,481,000
NET CASH (USED IN) FINANCING ACTIVITIES	-6,371,572	-1,798,489
NET INCREASE (DECREASE) IN CASH	636,951	-9,473,466
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	7,662,901	11,225,659
CASH AND CASH EQUIVALENTS AT END OF PERIOD	8,299,852	'
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION	'	'
Cash paid during the period for interest	$26,958	$53,031

Nature_of_Operations

Nature of Operations	9 Months Ended
Nature of Operations	Sep. 30, 2013
Nature of Operations [Abstract]	'
Nature of Operations	'
	NATURE OF OPERATIONS

	Principal Business Activity

	Lake Area Corn Processors, LLC and subsidiary (the Company) is a South Dakota limited liability company. The Company owns and manages Dakota Ethanol, LLC (Dakota Ethanol), a 40 million-gallon (annual nameplate capacity) ethanol plant, located near Wentworth, South Dakota. The Company sells ethanol and related products to customers located in North America.

Summary_of_Significant_Account

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2013
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. The results of operations for the three and nine months ended September 30, 2013 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, 2012, contained in the annual report on Form 10-K for 2012.

	Principles of Consolidation

	The consolidated financial statements of the Company include the accounts of its wholly owned subsidiary, Dakota Ethanol. All significant inter-company transactions and balances have been eliminated in consolidation.

	Revenue Recognition

	Revenue from the production of ethanol and related products is recorded when title transfers to customers. Generally, ethanol and related products are shipped FOB shipping point, based on written contract terms between Dakota Ethanol and its customers. Collectability of revenue is reasonably assured based on historical evidence of collectability between Dakota Ethanol and its customers. Interest income is recognized as earned.

	Shipping costs incurred by the Company in the sale of ethanol, dried 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.

	Cost of Revenues

	The primary components of cost of revenues from the production of ethanol and related co-product are corn expense, energy expense (natural gas and electricity), raw materials expense (chemicals and denaturant), and direct labor costs.

	Shipping costs on modified and wet distiller's grains are included in cost of revenues.

	Inventory Valuation

	Ethanol inventory, raw materials, work-in-process, and parts inventory are valued using methods which approximate the lower of cost (first-in, first-out) or market. Distillers grains and related products are stated at net realizable value. In the valuation of inventories and purchase and sale commitments, market is based on current replacement values except that it does not exceed net realizable values and is not less than net realizable values reduced by allowances for approximate normal profit margin.


	Investment in commodities contracts, derivative instruments and hedging activities

	The Company is exposed to certain risks related to our ongoing business operations. The primary risks that we manage by using forward or derivative instruments are price risk on anticipated purchases of corn, natural gas and the sale of ethanol.

	The Company is subject to market risk with respect to the price and availability of corn, the principal raw material we use to produce ethanol and ethanol co-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.

	We do not apply the normal purchase and sales exemption for forward corn purchase contracts. As of September 30, 2013, we are committed to purchasing 2,000,000 bushels of corn on a forward contract basis with an average price of $4.72 per bushel. Dakota Ethanol has a net derivative financial instrument liability of approximately $890,000 related to the forward contracted purchases of corn. These corn purchase contracts represent 11% of the projected annual plant corn usage.

	The Company enters into firm-price purchase commitments with some of our natural gas suppliers under which we agree to buy natural gas at a price set in advance of the actual delivery of that natural gas to us. Under these arrangements, we assume the risk of a price decrease in the market price of natural gas between the time this price is fixed and the time the natural gas is delivered. At September 30, 2013, we are committed to purchasing 130,000 MMBtu's of natural gas with an average price of $3.67 per MMBtu. We account for these transactions as normal purchases, and accordingly, do not mark these transactions to market. These natural gas purchases represent approximately 9% of the projected annual plant requirements.

	The Company enters into firm-price sales commitments with our ethanol marketer under which we agree to sell ethanol at a price set in advance of the actual delivery of that ethanol by us. Under these arrangements, we assume the risk of a price increase in the market price of ethanol between the time the price is fixed and the time the ethanol is delivered. At September 30, 2013, we are committed to selling 855,000 gallons of ethanol with an average price of $1.87 per gallon. The Company accounts for these transactions as normal sales, and accordingly, do not mark these transactions to market. These ethanol sales represent 2% of the projected annual plant production.

	The Company enters into short-term forward, option and futures contracts for corn and natural gas as a means of managing exposure to changes in commodity and energy prices. The Company enters into short-term forward, option and futures contracts for sales of ethanol to manage exposure to changes in energy prices. All of our 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 and we are exposed to risk of loss in the market value of inventories. To reduce that risk, we generally take positions using forward and futures contracts and options.

	Derivatives not designated as hedging instruments at September 30, 2013 and December 31, 2012 were as follows:




			Balance Sheet Classification		30-Sep-13				December 31, 2012*
	Forward contracts in gain position		Current Assets		$	—			$	912,248

	Futures contracts in gain position		Current Assets		$	26,213			$	974,132

	Forward contracts in loss position		(Current Liabilities)		$	(48,063	)		$	(291,119	)
	Total forward and futures contracts				$	(21,850	)		$	1,595,261

	Cash held by broker				723,736				1,727,389

			Current Assets		$	701,886			$	3,322,650


Forward contracts in loss position		(Current Liabilities)		$	(886,442	)		$	(535,816	)
*Derived from audited financial statements.

Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas purchases are included as a component of cost of revenues and derivative contracts related to ethanol sales are included as a component of revenues in the accompanying financial statements.



		Statement of Operations		Three Months Ended September 30,
		Classification		2013				2012
Net realized and unrealized gains (losses) related to purchase contracts:
Futures contracts		Cost of Revenues		$	505,990			$	(5,076,551	)

Forward contracts		Cost of Revenues		$	(1,488,342	)		$	3,650,203




		Statement of Operations		Nine Months Ended September 30,
		Classification		2013				2012
Net realized and unrealized gains (losses) related to purchase contracts:
Futures contracts		Cost of Revenues		$	791,483			$	(5,551,028	)

Forward contracts		Cost of Revenues		$	(2,540,438	)		$	2,891,825


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 market accounting for inventory and forward purchase contracts and goodwill impairment evaluation.

Environmental Liabilities

Dakota Ethanol’s operations are subject to environmental laws and regulations adopted by various governmental authorities in the jurisdiction in which it operates. These laws require Dakota Ethanol to investigate and remediate the effects of the release or disposal of materials at its locations. Accordingly, Dakota Ethanol has adopted policies, practices and procedures in the areas of pollution control, occupational health and the production, handling, storage and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability which could result from such events. Environmental liabilities are recorded when Dakota Ethanol’s liability is probable and the costs can be reasonably estimated.

Inventory

Inventory	9 Months Ended
	Sep. 30, 2013
Inventory [Abstract]	'
Inventory	'
	INVENTORY

	Inventory consisted of the following as of September 30, 2013 and December 31, 2012:



		30-Sep-13		December 31, 2012*
	Raw materials	$	4,070,299	$	8,117,020

	Finished goods	1,294,637		1,525,812

	Work in process	684,225		990,002

	Parts inventory	1,000,501		919,996

		$	7,049,662	$	11,552,830


	*Derived from audited financial statements.

Short_Term_Note_Payable

Short Term Note Payable	9 Months Ended
Short Term Note Payable	Sep. 30, 2013
Short Term Note Payable [Abstract]	'
Short Term Note Payable	'

	On May 15, 2013, Dakota Ethanol executed a revolving promissory note from Farm Credit Services of America (FCSA) in the amount of $10,000,000 and the amount available is subject to a borrowing base. Interest on the outstanding principal balances will accrue at 310 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 3.30% at September 30, 2013. There is a non-use fee of 0.25% on the unused portion of the $10,000,000 availability. The note is collateralized by the ethanol plant and equipment, its accounts receivable and inventory. The note expires on May 31, 2015. On September 30, 2013, Dakota Ethanol had $0 outstanding and $10,000,000 available to be drawn on the revolving promissory note.

	Prior to May 15, Dakota Ethanol had a revolving promissory note from First National Bank of Omaha (FNBO) in the amount of $10,000,000 and the amount available was subject to a borrowing base. On December 31, 2012, Dakota Ethanol had $0 outstanding and $10,000,000 available to be drawn on the revolving promissory note.

Long_Term_Notes_Payable

Long Term Notes Payable	9 Months Ended
	Sep. 30, 2013
Long Term Note Payable [Abstract]	'
Long Term Notes Payable	'
	LONG-TERM NOTES PAYABLE

	On May 15, 2013, Dakota Ethanol executed a revolving promissory note from Farm Credit Services of America (FCSA) in the amount of $5,000,000.

	As part of the note payable agreement, Dakota Ethanol is subject to certain restrictive covenants establishing financial reporting requirements, distribution and capital expenditure limits and minimum working capital requirements. The note is collateralized by the ethanol plant and equipment, its accounts receivable and inventory. We are in compliance with our financial covenants as of September 30, 2013.

	The note is a revolving note with an availability of $5,000,000. Interest on the outstanding principal balance will accrue at 335 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 3.55% at September 30, 2013. Dakota Ethanol may elect to borrow any principal amount repaid on the note up to $5,000,000 subject to the terms of the agreement. Should Dakota Ethanol elect not to utilize this feature, the lender will assess a non-use fee of 0.35% on the unused portion of the note. The note matures on May 31, 2018. On September 30, 2013, Dakota Ethanol had $0 outstanding and $5,000,000 available to be drawn on the note.

	Prior to May 15, Dakota Ethanol had a revolving promissory note from First National Bank of Omaha (FNBO) in the amount of $5,000,000. On December 31, 2012, Dakota Ethanol had $0 outstanding and $5,000,000 available to be drawn on the revolving promissory note.

	Dakota Ethanol entered into two loan agreements for alternative financing for our corn oil extraction equipment as we had agreed with FNBO; one loan with Rural Electric Economic Development, Inc (REED) and the other loan with First District Development Company (FDDC). In April 2013, Dakota Ethanol paid off the reamining balances on the notes.

	The note to REED, originally for $1,000,000, had a fixed interest rate of 4.7%. The note was secured by the oil extraction equipment.

	The note to FDDC, originally for $200,000, had a fixed interest rate of 5.5%. The note was secured by the oil extraction equipment.

	The balances of the notes payable are as follows:


		30-Sep-13			December 31, 2012*

	Note payable - Long-term bank note	$	—		$	—

	Note payable - REED	—			308,142

	Note payable - FDDC	—			62,341

	Note payable - Other	53,163			75,683

		53,163			446,166

	Less current portion	(31,366		)	(288,631		)
		$	21,797		$	157,535


	*Derived from audited financial statements

	Minimum scheduled principal payments for the next two years are estimated as follows:



	Years Ending September 30,	Amount
	2014	$	31,366

	2015	21,797

Fair_Value_Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2013
Fair Value Measurements [Abstract]	'
Fair Value Measurements	'
	FAIR VALUE MEASUREMENTS

	The Company complies with the fair value measurements and disclosures standard which defines fair value, establishes a framework for measuring fair value, and expands disclosure for those assets and liabilities carried on the balance sheet on a fair value basis.

	The Company’s balance sheet contains derivative financial instruments that are recorded at fair value on a recurring basis. Fair value measurements and disclosures require that assets and liabilities carried at fair value be classified and disclosed according to the process for determining fair value. There are three levels of determining fair value.

	Level 1 uses quoted market prices in active markets for identical assets or liabilities.

	Level 2 uses observable market based inputs or unobservable inputs that are corroborated by market data.

	Level 3 uses unobservable inputs that are not corroborated by market data.

	A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

	Derivative financial instruments. Commodity futures and options contracts are reported at fair value utilizing Level 1 inputs. For these contracts, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the CBOT and NYMEX markets. Over-the-counter commodity options contracts are reported at fair value utilizing Level 2 inputs. For these contracts, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the over-the-counter markets. Forward purchase contracts are reported at fair value utilizing Level 2 inputs. For these contracts, the Company obtains fair value measurements from local grain terminal bid values. The fair value measurements consider observable data that may include live trading bids from local elevators and processing plants which are based off the CME markets.

	The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of September 30, 2013 and December 31, 2012 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
	30-Sep-13

	Assets:
	Derivative financial instruments, futures contracts	$	26,213		$	26,213		$	—		$	—

	forward contracts	$	—		$	—		$	—		$	—


	Liabilities:
	Derivative financial instruments, futures contracts	$	(48,063	)	$	(48,063	)	$	—		$	—

	forward contracts	$	(886,442	)	$	—		$	(886,442	)	$	—


	December 31, 2012*

	Assets:
	Derivative financial instruments, futures contracts	$	974,132		$	974,132		$	—		$	—

	forward contracts	$	912,248		$	—		$	912,248		$	—


	Liabilities:
	Derivative financial instruments, futures contracts	$	(291,119	)	$	(291,119	)	$	—		$	—

	forward contracts	$	(535,816	)	$	—		$	(535,816	)	$	—

	*Derived from audited financial statements.

	During the nine months ended September 30, 2013, the Company did not make any changes between Level 1 and Level 2 assets and liabilities. As of September 30, 2013 and December 31, 2012, 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, 2013.

	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 methodologies for other financial assets and financial liabilities are discussed below.

	The Company believes the carrying amount of cash and cash equivalents (level 1), accounts receivable (level 2), other receivables (level 2), accounts payable (level 2) and short-term debt (level 3) approximates fair value due to the short maturity of these instruments.
	The carrying amount of long-term obligations (level 3) at September 30, 2013 of $53,163 had an estimated fair value of approximately $53,163 based on estimated interest rates for comparable debt. The carrying amount of long-term obligations at December 31, 2012 of $446,166 had an estimated fair value of approximately $446,166 based on estimated interest rates for comparable debt.

Related_Party_Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2013
Related Party Transactions [Abstract]	'
Related Party Transactions	'
	RELATED PARTY TRANSACTIONS

	Dakota Ethanol has a 7% interest in RPMG, and Dakota Ethanol has entered into an ethanol marketing agreement with RPMG for the exclusive rights to market, sell and distribute the entire ethanol inventory produced by Dakota Ethanol. The marketing fees are included in net revenues.
	Sales and marketing fees related to the agreements are as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,
		2013		2012		2013		2012

	Sales ethanol	$	28,061,341	$	26,390,388	$	85,099,394	$	74,144,372

	Sales distiller's grains and corn oil	3,017,840		2,403,627		6,644,211		5,488,648


	Marketing fees ethanol	64,152		43,561		192,456		136,185

	Marketing fees distillers grains and corn oil	14,609		12,909		33,370		32,076


		30-Sep-13		December 31, 2012*
	Amounts due included in accounts receivable	$	2,158,295	$	3,142,616

Accounting_Policies

Accounting Policies	9 Months Ended
	Sep. 30, 2013
Accounting Policies [Abstract]	'
Principles of Consolidation	'
	Principles of Consolidation

	The consolidated financial statements of the Company include the accounts of its wholly owned subsidiary, Dakota Ethanol. All significant inter-company transactions and balances have been eliminated in consolidation.
Revenue Recognition	'
	Revenue Recognition

	Revenue from the production of ethanol and related products is recorded when title transfers to customers. Generally, ethanol and related products are shipped FOB shipping point, based on written contract terms between Dakota Ethanol and its customers. Collectability of revenue is reasonably assured based on historical evidence of collectability between Dakota Ethanol and its customers. Interest income is recognized as earned.

	Shipping costs incurred by the Company in the sale of ethanol, dried 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.
Cost of Revenues	'
	Cost of Revenues

	The primary components of cost of revenues from the production of ethanol and related co-product are corn expense, energy expense (natural gas and electricity), raw materials expense (chemicals and denaturant), and direct labor costs.

	Shipping costs on modified and wet distiller's grains are included in cost of revenues.
Inventory Valuation	'
	Inventory Valuation

	Ethanol inventory, raw materials, work-in-process, and parts inventory are valued using methods which approximate the lower of cost (first-in, first-out) or market. Distillers grains and related products are stated at net realizable value. In the valuation of inventories and purchase and sale commitments, market is based on current replacement values except that it does not exceed net realizable values and is not less than net realizable values reduced by allowances for approximate normal profit margin.

Investment in commodities contracts, derivative instruments and hedging activities	'
	Investment in commodities contracts, derivative instruments and hedging activities

	The Company is exposed to certain risks related to our ongoing business operations. The primary risks that we manage by using forward or derivative instruments are price risk on anticipated purchases of corn, natural gas and the sale of ethanol.

	The Company is subject to market risk with respect to the price and availability of corn, the principal raw material we use to produce ethanol and ethanol co-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.

	We do not apply the normal purchase and sales exemption for forward corn purchase contracts. As of September 30, 2013, we are committed to purchasing 2,000,000 bushels of corn on a forward contract basis with an average price of $4.72 per bushel. Dakota Ethanol has a net derivative financial instrument liability of approximately $890,000 related to the forward contracted purchases of corn. These corn purchase contracts represent 11% of the projected annual plant corn usage.

	The Company enters into firm-price purchase commitments with some of our natural gas suppliers under which we agree to buy natural gas at a price set in advance of the actual delivery of that natural gas to us. Under these arrangements, we assume the risk of a price decrease in the market price of natural gas between the time this price is fixed and the time the natural gas is delivered. At September 30, 2013, we are committed to purchasing 130,000 MMBtu's of natural gas with an average price of $3.67 per MMBtu. We account for these transactions as normal purchases, and accordingly, do not mark these transactions to market. These natural gas purchases represent approximately 9% of the projected annual plant requirements.

	The Company enters into firm-price sales commitments with our ethanol marketer under which we agree to sell ethanol at a price set in advance of the actual delivery of that ethanol by us. Under these arrangements, we assume the risk of a price increase in the market price of ethanol between the time the price is fixed and the time the ethanol is delivered. At September 30, 2013, we are committed to selling 855,000 gallons of ethanol with an average price of $1.87 per gallon. The Company accounts for these transactions as normal sales, and accordingly, do not mark these transactions to market. These ethanol sales represent 2% of the projected annual plant production.

	The Company enters into short-term forward, option and futures contracts for corn and natural gas as a means of managing exposure to changes in commodity and energy prices. The Company enters into short-term forward, option and futures contracts for sales of ethanol to manage exposure to changes in energy prices. All of our 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 and we are exposed to risk of loss in the market value of inventories. To reduce that risk, we generally take positions using forward and futures contracts and options.

	Derivatives not designated as hedging instruments at September 30, 2013 and December 31, 2012 were as follows:




		Balance Sheet Classification	30-Sep-13			December 31, 2012*
	Forward contracts in gain position	Current Assets	$	—		$	912,248

	Futures contracts in gain position	Current Assets	$	26,213		$	974,132

	Forward contracts in loss position	(Current Liabilities)	$	(48,063	)	$	(291,119	)
	Total forward and futures contracts		$	(21,850	)	$	1,595,261

	Cash held by broker		723,736			1,727,389

		Current Assets	$	701,886		$	3,322,650


	Forward contracts in loss position	(Current Liabilities)	$	(886,442	)	$	(535,816	)
	*Derived from audited financial statements.

	Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas purchases are included as a component of cost of revenues and derivative contracts related to ethanol sales are included as a component of revenues in the accompanying financial statements.



		Statement of Operations	Three Months Ended September 30,
		Classification	2013			2012
	Net realized and unrealized gains (losses) related to purchase contracts:
	Futures contracts	Cost of Revenues	$	505,990		$	(5,076,551	)

	Forward contracts	Cost of Revenues	$	(1,488,342	)	$	3,650,203




		Statement of Operations	Nine Months Ended September 30,
		Classification	2013			2012
	Net realized and unrealized gains (losses) related to purchase contracts:
	Futures contracts	Cost of Revenues	$	791,483		$	(5,551,028	)

	Forward contracts	Cost of Revenues	$	(2,540,438	)	$	2,891,825

Use of Estimates	'
	Use of Estimates

	The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the fair value of derivative financial instruments, lower of cost or market accounting for inventory and forward purchase contracts and goodwill impairment evaluation.
Environmental Liabilities	'
	Environmental Liabilities

	Dakota Ethanol’s operations are subject to environmental laws and regulations adopted by various governmental authorities in the jurisdiction in which it operates. These laws require Dakota Ethanol to investigate and remediate the effects of the release or disposal of materials at its locations. Accordingly, Dakota Ethanol has adopted policies, practices and procedures in the areas of pollution control, occupational health and the production, handling, storage and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability which could result from such events. Environmental liabilities are recorded when Dakota Ethanol’s liability is probable and the costs can be reasonably estimated.

Summary_of_Significant_Account1

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2013
Summary of Significant Accounting Policies [Abstract]	'
Derivatives Not Designated as Hedging Instruments	'


		Balance Sheet Classification	30-Sep-13			December 31, 2012*
	Forward contracts in gain position	Current Assets	$	—		$	912,248

	Futures contracts in gain position	Current Assets	$	26,213		$	974,132

	Forward contracts in loss position	(Current Liabilities)	$	(48,063	)	$	(291,119	)
	Total forward and futures contracts		$	(21,850	)	$	1,595,261

	Cash held by broker		723,736			1,727,389

		Current Assets	$	701,886		$	3,322,650


	Forward contracts in loss position	(Current Liabilities)	$	(886,442	)	$	(535,816	)
Net realized and unrealized gains (losses) related to purchase contracts	'


		Statement of Operations	Three Months Ended September 30,
		Classification	2013			2012
	Net realized and unrealized gains (losses) related to purchase contracts:
	Futures contracts	Cost of Revenues	$	505,990		$	(5,076,551	)

	Forward contracts	Cost of Revenues	$	(1,488,342	)	$	3,650,203




		Statement of Operations	Nine Months Ended September 30,
		Classification	2013			2012
	Net realized and unrealized gains (losses) related to purchase contracts:
	Futures contracts	Cost of Revenues	$	791,483		$	(5,551,028	)

	Forward contracts	Cost of Revenues	$	(2,540,438	)	$	2,891,825

Inventory_Tables

Inventory (Tables)	9 Months Ended
	Sep. 30, 2013
Inventory [Abstract]	'
Schedule of Inventory	'
	Inventory consisted of the following as of September 30, 2013 and December 31, 2012:



		30-Sep-13		December 31, 2012*
	Raw materials	$	4,070,299	$	8,117,020

	Finished goods	1,294,637		1,525,812

	Work in process	684,225		990,002

	Parts inventory	1,000,501		919,996

		$	7,049,662	$	11,552,830


	*Derived from audited financial statements.

Long_Term_Notes_Payable_Tables

Long Term Notes Payable (Tables)	9 Months Ended
	Sep. 30, 2013
Long Term Note Payable [Abstract]	'
Schedule of Long-term Debt	'


		30-Sep-13			December 31, 2012*

	Note payable - Long-term bank note	$	—		$	—

	Note payable - REED	—			308,142

	Note payable - FDDC	—			62,341

	Note payable - Other	53,163			75,683

		53,163			446,166

	Less current portion	(31,366		)	(288,631		)
		$	21,797		$	157,535

Schedule of Maturities of Long-term Debt	'


	Years Ending September 30,	Amount
	2014	$	31,366

	2015	21,797

Fair_Value_Measurements_Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2013
Fair Value Measurements [Abstract]	'
Fair Value, by Balance Sheet Grouping	'


		Total			Level 1			Level 2			Level 3
	30-Sep-13

	Assets:
	Derivative financial instruments, futures contracts	$	26,213		$	26,213		$	—		$	—

	forward contracts	$	—		$	—		$	—		$	—


	Liabilities:
	Derivative financial instruments, futures contracts	$	(48,063	)	$	(48,063	)	$	—		$	—

	forward contracts	$	(886,442	)	$	—		$	(886,442	)	$	—


	December 31, 2012*

	Assets:
	Derivative financial instruments, futures contracts	$	974,132		$	974,132		$	—		$	—

	forward contracts	$	912,248		$	—		$	912,248		$	—


	Liabilities:
	Derivative financial instruments, futures contracts	$	(291,119	)	$	(291,119	)	$	—		$	—

	forward contracts	$	(535,816	)	$	—		$	(535,816	)	$	—

Related_Party_Transactions_Tab

Related Party Transactions (Tables)	9 Months Ended
	Sep. 30, 2013
Related Party Transactions [Abstract]	'
Schedule of Related Party Transactions	'


		Three Months Ended September 30,				Nine Months Ended September 30,
		2013		2012		2013		2012

	Sales ethanol	$	28,061,341	$	26,390,388	$	85,099,394	$	74,144,372

	Sales distiller's grains and corn oil	3,017,840		2,403,627		6,644,211		5,488,648


	Marketing fees ethanol	64,152		43,561		192,456		136,185

	Marketing fees distillers grains and corn oil	14,609		12,909		33,370		32,076


		30-Sep-13		December 31, 2012*
	Amounts due included in accounts receivable	$	2,158,295	$	3,142,616

Nature_of_Operations_Details

Nature of Operations (Details) (Ethanol [Member], Product [Member])	9 Months Ended
	Sep. 30, 2013
	gal
Ethanol [Member] \| Product [Member]	'
Product Information [Line Items]	'
Annual production capacity	40,000,000

Derivative_Instruments_Balance

Derivative Instruments - Balance Sheet (Details) (USD $)

Sep. 30, 2013

Dec. 31, 2012

Sep. 30, 2013

Dec. 31, 2012

Sep. 30, 2013

Dec. 31, 2012

Sep. 30, 2013

Dec. 31, 2012

Sep. 30, 2013

Dec. 31, 2012

Sep. 30, 2013

Dec. 31, 2012

Forward Contracts [Member]

Current Assets [Member]

Current Liabilities [Member]

Corn [Member]

Natural Gas [Member]

Ethanol [Member]

Not Designated as Hedging Instrument [Member]

MMBTU

gal

Future [Member]

Forward Contracts [Member]

Future [Member]

Forward Contracts [Member]

Derivatives, Fair Value [Line Items]

Product usage, percentage

11.00%

9.00%

2.00%

Derivative, Number of Instruments Held

2,000,000

130,000

855,000

Derivative Liability

$890,000

Derivative, Average Price Per Unit

4.72

3.67

1.87

Derivative Assets, Current

-21,850

1,595,261

26,213

974,132

912,248

Derivative Liabilities, Current

-48,063

-291,119

-886,442

-535,816

Other Receivables from Broker-Dealers and Clearing Organizations

723,736

1,727,389

Derivative Instruments and Hedges, Assets

$701,886

$3,322,650

$701,886

$3,322,650

Derivative_Instruments_Income_

Derivative Instruments - Income Statement (Details) (Cost of Sales [Member], Not Designated as Hedging Instrument [Member], USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Future [Member]	'	'	'	'
Derivative Instruments, Gain (Loss) [Line Items]	'	'	'	'
Derivative Instruments, Gain (Loss) Recognized in Income	$505,990	($5,076,551)	$791,483	($5,551,028)
Forward Contracts [Member]	'	'	'	'
Derivative Instruments, Gain (Loss) [Line Items]	'	'	'	'
Derivative Instruments, Gain (Loss) Recognized in Income	($1,488,342)	$3,650,203	($2,540,438)	$2,891,825

Inventory_Details

Inventory (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Inventory [Abstract]	'	'
Raw Materials	$4,070,299	$8,117,020
Finished Goods	1,294,637	1,525,812
Work in Process	684,225	990,002
Parts Inventory	1,000,501	919,996
Inventory	$7,049,662	$11,552,830

Short_Term_Note_Payable_Detail

Short Term Note Payable (Details) (Line of Credit [Member], USD $)	9 Months Ended
	Sep. 30, 2013	Mar. 31, 2013	Dec. 31, 2012
	Farm Credit Services of America [Member]	First National Bank of Omaha [Member]	First National Bank of Omaha [Member]
Line of Credit Facility [Line Items]	'	'	'
Debt Instrument, Basis Spread on Variable Rate	3.10%	'	'
Line of Credit Facility, Maximum Borrowing Capacity	$10,000,000	$10,000,000	'
Line of Credit Facility, Interest Rate at Period End	3.30%	'	'
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.25%	'	'
Line of Credit Facility, Amount Outstanding	0	'	0
Line of Credit Facility, Remaining Borrowing Capacity	$10,000,000	'	$10,000,000

Long_Term_Note_Payable_Details

Long Term Note Payable (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013	Dec. 31, 2012
			Notes Payable, Other Payables [Member]	Notes Payable, Other Payables [Member]	Farm Credit Services of America [Member]	First National Bank of Omaha [Member]	First National Bank of Omaha [Member]	Rural Electric Economic Development (REED) [Member]	Rural Electric Economic Development (REED) [Member]	First District Development Company (FDDC) [Member]	First District Development Company (FDDC) [Member]
					Revolving Credit Facility [Member]	Revolving Credit Facility [Member]	Revolving Credit Facility [Member]	Notes Payable, Other Payables [Member]	Notes Payable, Other Payables [Member]	Notes Payable, Other Payables [Member]	Notes Payable, Other Payables [Member]
Debt Instrument [Line Items]	'	'	'	'	'	'	'	'	'	'	'
Line of Credit Facility, Maximum Borrowing Capacity	'	'	'	'	$5,000,000	$5,000,000	'	'	'	'	'
Line of Credit Facility, Interest Rate at Period End	'	'	'	'	3.55%	'	'	'	'	'	'
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	'	'	'	'	0.35%	'	'	'	'	'	'
Line of Credit Facility, Amount Outstanding	'	'	'	'	0	'	0	'	'	'	'
Line of Credit Facility, Remaining Borrowing Capacity	'	'	'	'	5,000,000	'	5,000,000	'	'	'	'
Debt Instrument, Basis Spread on Variable Rate	'	'	'	'	3.35%	'	'	'	'	'	'
Debt Instrument, Face Amount	'	'	'	'	'	'	'	1,000,000	'	200,000	'
Debt Instrument, Interest Rate, Stated Percentage	'	'	'	'	'	'	'	4.70%	'	5.50%	'
Notes Payable	'	'	53,163	75,683	'	'	'	0	308,142	0	62,341
Long-term Debt	53,163	446,166	'	'	'	'	'	'	'	'	'
Long-term Debt, Current Maturities	-31,366	-288,631	'	'	'	'	'	'	'	'	'
Notes payable, net of current maturities	$21,797	$157,535	'	'	'	'	'	'	'	'	'

Long_Term_Notes_Payable_Maturi

Long Term Notes Payable Maturities of Long Term Debt (Details) (USD $)	Sep. 30, 2013
Maturities of Long-term Debt [Abstract]	'
Long-term Debt, Repayments, 2014	$31,366
Long-term Debt, Repayments, 2015	$21,797

Fair_Value_Measurements_Detail

Fair Value Measurements (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Inputs, Level 3 [Member]	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Obligations, Fair Value Disclosure	$53,163	$446,166
Estimate of Fair Value, Fair Value Disclosure [Member]	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Obligations, Fair Value Disclosure	53,163	446,166
Future [Member] \| Fair Value, Measurements, Recurring [Member] \| Carrying (Reported) Amount, Fair Value Disclosure [Member]	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Derivative Assets	26,213	974,132
Derivative Financial Instruments, Liabilities, Fair Value Disclosure	-48,063	-291,119
Future [Member] \| Fair Value, Measurements, Recurring [Member] \| Fair Value, Inputs, Level 1 [Member]	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Derivative Assets	26,213	974,132
Derivative Financial Instruments, Liabilities, Fair Value Disclosure	-48,063	-291,119
Future [Member] \| Fair Value, Measurements, Recurring [Member] \| Fair Value, Inputs, Level 2 [Member]	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Derivative Assets	0	0
Derivative Financial Instruments, Liabilities, Fair Value Disclosure	0	0
Future [Member] \| Fair Value, Measurements, Recurring [Member] \| Fair Value, Inputs, Level 3 [Member]	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Derivative Assets	0	0
Derivative Financial Instruments, Liabilities, Fair Value Disclosure	0	0
Forward Contracts [Member] \| Fair Value, Measurements, Recurring [Member] \| Carrying (Reported) Amount, Fair Value Disclosure [Member]	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Derivative Assets	0	912,248
Derivative Financial Instruments, Liabilities, Fair Value Disclosure	-886,442	-535,816
Forward Contracts [Member] \| Fair Value, Measurements, Recurring [Member] \| Fair Value, Inputs, Level 1 [Member]	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Derivative Assets	0	0
Derivative Financial Instruments, Liabilities, Fair Value Disclosure	0	0
Forward Contracts [Member] \| Fair Value, Measurements, Recurring [Member] \| Fair Value, Inputs, Level 2 [Member]	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Derivative Assets	0	912,248
Derivative Financial Instruments, Liabilities, Fair Value Disclosure	-886,442	-535,816
Forward Contracts [Member] \| Fair Value, Measurements, Recurring [Member] \| Fair Value, Inputs, Level 3 [Member]	'	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'	'
Derivative Assets	0	0
Derivative Financial Instruments, Liabilities, Fair Value Disclosure	$0	$0

Related_Party_Transactions_Det

Related Party Transactions (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
			Investor [Member]	Ethanol [Member]	Ethanol [Member]	Ethanol [Member]	Ethanol [Member]	Dstiller's Grains and Corn Oil [Member]	Dstiller's Grains and Corn Oil [Member]	Dstiller's Grains and Corn Oil [Member]	Dstiller's Grains and Corn Oil [Member]
				Affiliated Entity [Member]	Affiliated Entity [Member]	Affiliated Entity [Member]	Affiliated Entity [Member]	Affiliated Entity [Member]	Affiliated Entity [Member]	Affiliated Entity [Member]	Affiliated Entity [Member]
Related Party Transaction [Line Items]	'	'	'	'	'	'	'	'	'	'	'
Equity Method Investment, Ownership Percentage	'	'	7.00%	'	'	'	'	'	'	'	'
Revenue from Related Parties	'	'	'	$28,061,341	$26,390,388	$85,099,394	$74,144,372	$3,017,840	$2,403,627	$6,644,211	$5,488,648
Marketing Expenses from Transactions with Related Party	'	'	'	64,152	43,561	192,456	136,185	14,609	12,909	33,370	32,076
Due from Related Parties, Current	$2,158,295	$3,142,616	'	'	'	'	'	'	'	'	'