Lake Area Corn Processors (LKCRU) 10-Q 14 Nov 19 2019 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 14, 2019
Document and Entity Information [Abstract]
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	Sep. 30, 2019
Document Fiscal Year Focus	2019
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 Common Stock, Shares Outstanding		29,620,000

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Sep. 30, 2019	Dec. 31, 2018
CURRENT ASSETS
Cash and cash equivalents	$ 5,482,879	$ 1,697,937
Accounts receivable	4,149,707	1,202,196
Other receivables	36,036	26,857
Inventory	8,737,562	7,561,501
Derivative financial instruments	473,763	554,005
Prepaid expenses	104,252	265,793
Total current assets	18,984,199	11,308,289
PROPERTY AND EQUIPMENT
Land	874,473	874,473
Land improvements	8,558,720	8,558,720
Buildings	9,316,576	9,001,546
Equipment	95,281,802	61,839,725
Construction in progress	235,212	26,203,702
Gross Property and Equipment	114,266,783	106,478,166
Less accumulated depreciation	(46,245,218)	(42,729,898)
Net property and equipment	68,021,565	63,748,268
OTHER ASSETS
Goodwill	10,395,766	10,395,766
Investments	17,317,302	17,300,470
Other	101,285	113,279
Total other assets	27,814,353	27,809,515
TOTAL ASSETS	114,820,117	102,866,072
CURRENT LIABILITIES
Outstanding checks in excess of bank balance	3,121,137	2,247,215
Accounts payable	5,755,499	6,849,896
Accrued liabilities	850,772	765,994
Derivative financial instruments	61,734	368,475
Current maturities of notes payable	1,000,000	1,000,000
Other	4,000	4,000
Total current liabilities	10,793,142	11,235,580
LONG-TERM LIABILITIES
Notes payable	37,988,333	23,585,368
Other	4,000	8,000
Total long-term liabilities	37,992,333	23,593,368
MEMBERS' EQUITY (29,620,000 units issued and outstanding)	66,034,642	68,037,124
TOTAL LIABILITIES AND MEMBERS' EQUITY	$ 114,820,117	$ 102,866,072

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - shares	Sep. 30, 2019	Dec. 31, 2018
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, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
REVENUES	$ 32,441,510	$ 18,796,356	$ 80,151,796	$ 58,677,962
COSTS OF REVENUES	34,256,712	18,078,236	78,218,717	53,282,450
GROSS PROFIT	(1,815,202)	718,120	1,933,079	5,395,512
OPERATING EXPENSES	971,662	872,053	2,906,424	2,847,557
INCOME (LOSS) FROM OPERATIONS	(2,786,864)	(153,933)	(973,345)	2,547,955
OTHER INCOME (EXPENSE)
Interest and other income	12,320	2,228	163,385	53,533
Equity in net income (loss) of investments	(349,123)	(30,513)	(425,776)	559,970
Interest expense	(476,122)	0	(766,746)	0
Total other income (expense)	(812,925)	(28,285)	(1,029,137)	613,503
NET INCOME (LOSS)	$ (3,599,789)	$ (182,218)	$ (2,002,482)	$ 3,161,458
BASIC AND DILUTED EARNINGS (LOSS) PER UNIT (in dollars per unit)	$ (0.12)	$ (0.01)	$ (0.07)	$ 0.11
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	$ 0.10

Consolidated Statements of Chan

Consolidated Statements of Changes in Members' Equity (Unaudited)	USD ($)
Balance at the beginning of period at Dec. 31, 2017	$ 68,282,537
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	1,876,697
Member distributions	(2,962,000)
Balance at the end of period at Mar. 31, 2018	67,197,234
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	1,466,978
Balance at the end of period at Jun. 30, 2018	68,664,212
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income	(182,218)
Balance at the end of period at Sep. 30, 2018	68,481,994
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

Consolidated Statements of Ch_2

Consolidated Statements of Changes in Members' Equity (Unaudited) (Parenthetical)	3 Months Ended
	Mar. 31, 2018USD ($)
Statement of Stockholders' Equity [Abstract]
Distributions paid per capital unit (in dollars per unit)	$ 0.10

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
OPERATING ACTIVITIES
Net income	$ (2,002,482)	$ 3,161,458
Adjustments to reconcile net income to cash provided by operating activities
Depreciation and amortization	3,529,356	2,323,713
Distributions in excess of earnings from investments	617,091	1,602,045
(Increase) decrease in
Accounts receivable	(2,956,690)	1,049,207
Inventory	(1,176,060)	(1,315,699)
Prepaid expenses	161,541	115,922
Derivative financial instruments	(226,499)	349,138
Accounts payable	(14,951)	(2,637,722)
Accrued and other liabilities	80,778	(59,195)
NET CASH PROVIDED BY OPERATING ACTIVITIES	(1,987,916)	4,588,867
INVESTING ACTIVITIES
Purchase of property and equipment	(8,868,064)	(15,171,559)
Purchase of investments	(633,924)	(301,024)
NET CASH (USED IN) INVESTING ACTIVITIES	(9,501,988)	(15,472,583)
FINANCING ACTIVITIES
Increase (decrease) in outstanding checks in excess of bank balance	873,922	(179,594)
Borrowings on notes payable	47,500,000	16,673,268
Principal payments on notes payable	(33,099,076)	(4,574,268)
Financing costs paid	0	(95,500)
Distributions paid to members	0	(2,962,000)
NET CASH PROVIDED BY FINANCING ACTIVITIES	15,274,846	8,861,906
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	3,784,942	(2,021,810)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	5,482,879	3,081,149
CASH AND CASH EQUIVALENTS AT END OF PERIOD	1,697,937	5,102,959
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for interest, net of capitalized interest of $830,432 and $358,769 in 2019 and 2018, respectively.	356,215	0
Capital expenditures in accounts payable	$ 81,387	$ 2,909,331

Consolidated Statements of Ca_2

Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Statement of Cash Flows [Abstract]
Capitalized interest	$ 830,432	$ 358,769

Nature of Operations

Nature of Operations	9 Months Ended
	Sep. 30, 2019
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, 2019
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, 2019 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, 2018 , contained in the annual report on Form 10-K for 2018. 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 new 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 majority of 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, 2019 2018 2019 2018 Revenues ethanol $ 25,563,757 $ 14,599,385 $ 62,573,333 $ 45,970,750 Revenues distillers grains 5,634,315 3,630,835 14,539,232 11,056,256 Revenues distillers corn oil 1,243,438 566,136 3,039,231 1,650,956 $ 32,441,510 $ 18,796,356 $ 80,151,796 $ 58,677,962 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-product 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 $2,131 as of September 30, 2019 and December 31, 2018 . 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 its 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, 2019 , the Company is committed to purchasing approximately 1.7 million bushels of corn on a forward contract basis with an average price of $3.74 per bushel. The total corn purchase contracts represent 6% 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, 2019 , the Company is committed to purchasing approximately 652,000 MMBtu’s of natural gas with an average price of $2.64 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 32% 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, 2019 , the Company is committed to selling approximately 32,000 dry equivalent tons of distillers grains with an average price of $127 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 15% 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, 2019 , the Company is committed to selling approximately 2.0 million pounds of distillers corn oil with an average price of $0.23 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 9% of the projected annual plant production. The Company does not have any firm-priced sales commitments for ethanol as of September 30, 2019 . 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, 2019 and December 31, 2018 were as follows: Balance Sheet Classification September 30, 2019 December 31, 2018* Forward contracts in gain position $ 234,377 $ 676 Futures contracts in gain position 20,363 175,038 Futures contracts in loss position (52,738 ) — Total 202,002 175,714 Cash held by broker 271,761 378,291 Current Assets $ 473,763 $ 554,005 Forward contracts in loss position (Current Liabilities) $ (61,734 ) $ (368,475 ) *Derived from audited financial statements Futures contracts and cash held by broker are all with one party and the right of offset exists. Therefore, on the balance sheet, these items are netted in one balance regardless of position. Forward contracts are with multiple parties and the right of offset does not exist. Therefore, these contracts are reported at the gross amounts on the balance sheet. Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas purchases are included as a component of costs 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 2019 2018 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ (788,253 ) $ 762,395 Forward contracts Cost of Revenues (424,895 ) (844,490 ) Statement of Operations Nine Months Ended September 30, Classification 2019 2018 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ (113,672 ) $ 1,755,445 Forward contracts Cost of Revenues 53,655 (1,498,835 ) 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 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 February 2016, FASB issued ASU No. 2016-02, "Leases (Topic 842)" (ASU 2016-02). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. The standard has not had a material impact on the Company's consolidated financial statements. In January 2017, FASB issued ASU No. 2017-04, "Intangibles-Goodwill and Other (Topic 350)" (ASU 2017-04). ASU 2107-04 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. The Company does not expect this standard to have 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 Company does not expect this standard to have a material impact on the Company's consolidated financial statements.

Inventory

Inventory	9 Months Ended
	Sep. 30, 2019
Inventory [Abstract]
Inventory	INVENTORY Inventory consisted of the following as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018* Raw materials $ 4,667,113 $ 3,396,707 Finished goods 2,086,948 2,589,255 Work in process 802,294 514,881 Parts inventory 1,181,207 1,060,658 $ 8,737,562 $ 7,561,501 *Derived from audited financial statements.

Investments

Investments	9 Months Ended
	Sep. 30, 2019
Investments [Abstract]
Investments	INVESTMENTS Dakota Ethanol has a 6% 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, 2019 unaudited interim results. The carrying amount of the Company’s investment was approximately $1,266,000 and $1,312,000 as of September 30, 2019 and December 31, 2018 , 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, 2019 unaudited interim results. The carrying amount of the Company’s investment was approximately $220,000 and $266,000 as of September 30, 2019 and December 31, 2018 , 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, 2019 unaudited interim results. The carrying amount of the Company’s investment was approximately $5,700,000 and $5,274,000 as of September 30, 2019 and December 31, 2018 , 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, 2019 unaudited interim results. The carrying amount of the Company’s investment was approximately $53,000 as of September 30, 2019 and December 31, 2018 . 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, 2019 unaudited interim results. The carrying amount of the Company’s investment was approximately $10,079,000 and $10,396,000 as of September 30, 2019 and December 31, 2018 , 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 $1,129,000 . The excess is comprised of a basis adjustment of approximately $464,000 and capitalized interest of $665,000 . The excess is amortized over 20 years when the plant becomes operational. The amortization is recorded in equity in net income of investments. Amortization was $14,416 and 24,026 for the three and nine months ended September 30, 2019 . Condensed, combined unaudited financial information of the Company’s investments in RPMG, LT, GH, GEM and REF are as follows: Balance Sheet September 30, 2019 December 31, 2018 Current Assets $ 248,012,529 $ 189,839,430 Other Assets 233,745,711 234,748,455 Current Liabilities 209,307,583 175,836,322 Long-term Liabilities 103,674,630 78,589,892 Members' Equity 168,776,027 170,161,671 Three Months Ended Income Statement September 30, 2019 September 30, 2018 Revenue $ 94,474,407 $ 60,363,855 Gross Profit 5,266,631 3,772,673 Net (Loss) (2,645,668 ) (91,453 ) Nine Months Ended Income Statement September 30, 2019 September 30, 2018 Revenue $ 230,715,486 $ 190,895,421 Gross Profit 14,095,945 16,541,767 Net Income (Loss) (2,933,142 ) 6,472,358 The following table shows the condensed financial information of Guardian Hankinson: Balance Sheet September 30, 2019 December 31, 2018 Current Assets $ 17,986,800 $ 21,412,926 Other Assets 93,873,235 102,988,761 Current Liabilities 17,645,720 3,390,042 Long-term Liabilities 37,210,746 38,144,803 Members' Equity 57,003,569 52,353,842 Three Months Ended Income Statement September 30, 2019 September 30, 2018 Revenue $ 60,517,220 $ 56,647,869 Gross Profit 1,677,900 1,620,076 Net Income (Loss) 524,949 (627,787 ) Nine Months Ended Income Statement September 30, 2019 September 30, 2018 Revenue $ 182,761,442 $ 180,415,511 Gross Profit 8,284,287 10,581,169 Net Income 4,771,534 5,455,699 The following table shows the condensed financial information of Ring-neck Energy & Feed: Balance Sheet September 30, 2019 December 31, 2018 Current Assets $ 13,381,722 $ 1,018,076 Other Assets 137,635,508 128,668,387 Current Liabilities 4,774,475 5,724,979 Long-term Liabilities 66,463,884 40,414,089 Members' Equity 79,778,871 83,547,395 Three Months Ended Income Statement September 30, 2019 September 30, 2018 Revenue $ 30,246,280 $ — Gross Profit 1,345,363 — Net (Loss) (3,756,247 ) (84,776 ) Nine Months Ended Income Statement September 30, 2019 September 30, 2018 Revenue $ 37,070,921 $ — Gross (Loss) (594,383 ) — Net (Loss) (9,124,363 ) (162,667 ) The Company recorded equity in net income of approximately $52,000 and $427,000 from GH for the three and nine months ended September 30, 2019 . The Company recorded equity in net income (loss) of approximately $(63,000) and $546,000 from GH for the three and nine months ended September 30, 2018, respectively. The Company recorded equity in net (loss) of approximately ($444,000) and ($952,000) from REF for the three and nine months ended September 30, 2019 , respectively. The Company recorded equity in net (loss) of approximately $(11,000) and $(18,000) from REF for the three and nine months ended September 30, 2018, respectively. The Company recorded equity in net income of approximately $ 42,000 and $ 99,000 from its other investments for the three and nine months ended September 30, 2019 , respectively. The Company recorded equity in net income of approximately $ 43,000 and $ 80,000 from its other investments for the three and nine months ended September 30, 2018, respectively.

Revolving Operating Note

Revolving Operating Note	9 Months Ended
	Sep. 30, 2019
Short Term Note Payable [Abstract]
Revolving Operating Note	REVOLVING OPERATING NOTE On 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. Interest on the outstanding principal balance will accrue at 300 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 5.10% at September 30, 2019 . There is a non-use fee of 0.25% on the unused portion of the $10,000,000 availability. The note is collateralized by substantially all assets of the Company. The note expires on November 1, 2021. On September 30, 2019 , Dakota Ethanol had $0 outstanding and approximately $5,281,000 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, 2019
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 notes matures on August 1, 2025. Interest on the outstanding principal balance will accrue at 325 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 5.35% at September 30, 2019 . On September 30, 2019 , 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. This loan was amended on October 21, 2019. The amount Dakota Ethanol can borrow on the note decreases by $1,750,000 semi-annually starting on January 1, 2021 until the maximum balance reaches $26,000,000 on July 1, 2024. The note matures on January 1, 2026. Interest on the outstanding principal balance will accrue at 325 basis points above the 1 month LIBOR rate and is not subject to a floor. The rate was 5.35% at September 30, 2019 . The note contains a non-use fee of 0.50% on the unused portion of the note. On September 30, 2019 , Dakota Ethanol had $33,000,000 outstanding and $7,000,000 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 balances of the notes payable are as follows: September 30, 2019 December 31, 2018* Notes Payable - FCSA Revolving note $ 33,000,000 $ 17,600,000 Term note 6,000,000 7,000,000 Less unamortized debt issuance costs (11,667 ) (14,632 ) 38,988,333 24,585,368 Less current portion (1,000,000 ) (1,000,000 ) $ 37,988,333 $ 23,585,368 *Derived from audited financial statements Principal maturities for the next five years are estimated as follows: Years Ending September 30, Principal 2020 $ 1,000,000 2021 1,000,000 2022 1,000,000 2023 4,500,000 2024 4,500,000 thereafter 27,000,000

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2019
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, 2019 and December 31, 2018 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, 2019 Assets: Derivative financial instruments, futures contracts $ 20,363 $ 9,563 $ 10,800 $ — forward contracts $ 234,377 $ — $ 234,377 — Liabilities: Derivative financial instruments, futures contracts $ (52,738 ) $ (52,738 ) $ — $ — forward contracts $ (61,734 ) $ — $ (61,734 ) $ — December 31, 2018* Assets: Derivative financial instruments, futures contracts $ 175,038 $ 175,038 $ — $ — forward contracts $ 676 $ — $ 676 — Liabilities: Derivative financial instruments, futures contracts $ — $ — $ — $ — forward contracts $ 368,475 $ — $ 368,475 $ — *Derived from audited financial statements. During the three and nine months ended September 30, 2019 , the Company did not make any changes between Level 1 and Level 2 assets and liabilities. As of September 30, 2019 and December 31, 2018 , 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, 2019 . 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, 2019 of $39,000,000 had an estimated fair value of approximately $39,000,000 based on estimated interest rates for comparable debt. The carrying amount of long-term obligations at December 31, 2018 of $24,600,000 had an estimated fair value of approximately $24,600,000 .

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2019
Related Party Transactions [Abstract]
Related Party Transactions	RELATED PARTY TRANSACTIONS Dakota Ethanol has a 6% interest in RPMG, and Dakota Ethanol has entered into marketing agreements for the exclusive rights to market, sell and distribute the entire ethanol, dried distiller's grains and corn oil inventories produced by Dakota Ethanol. The marketing fees are included in net revenues. Revenues and marketing fees related to the agreements are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Revenues ethanol $ 25,602,911 $ 14,670,012 $ 62,706,692 $ 46,132,851 Revenues distillers dried grains 2,158,001 1,072,862 3,333,325 1,687,934 Revenues corn oil 1,253,882 570,841 3,064,398 1,665,261 Marketing fees ethanol 60,960 65,865 182,880 197,595 Marketing fees distillers dried grains 16,338 8,115 25,278 11,853 Marketing fees corn oil 10,431 4,726 25,007 14,250 September 30, 2019 December 31, 2018* Amounts due included in accounts receivable $ 3,700,131 $ 836,798 *Derived from audited financial statements. The Company purchased corn and services from members of its Board of Managers that farm and operate local businesses. The Company also purchased ingredients from RPMG. Purchases during the three and nine months ended September 30, 2019 totaled approximately $410,000 and $1,410,000 , respectively. Purchases during the three and nine months ended September 30, 2018 totaled approximately $319,000 and $1,181,000 , respectively. As of September 30, 2019 and December 31, 2018 , the amount we owed to related parties was approximately $27,000 and $37,000 , respectively.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2019
Summary of Significant 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 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 new 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 majority of 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, 2019 2018 2019 2018 Revenues ethanol $ 25,563,757 $ 14,599,385 $ 62,573,333 $ 45,970,750 Revenues distillers grains 5,634,315 3,630,835 14,539,232 11,056,256 Revenues distillers corn oil 1,243,438 566,136 3,039,231 1,650,956 $ 32,441,510 $ 18,796,356 $ 80,151,796 $ 58,677,962 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 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-product 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	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. 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 $2,131 as of September 30, 2019 and December 31, 2018 .
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 its 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, 2019 , the Company is committed to purchasing approximately 1.7 million bushels of corn on a forward contract basis with an average price of $3.74 per bushel. The total corn purchase contracts represent 6% 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, 2019 , the Company is committed to purchasing approximately 652,000 MMBtu’s of natural gas with an average price of $2.64 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 32% 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, 2019 , the Company is committed to selling approximately 32,000 dry equivalent tons of distillers grains with an average price of $127 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 15% 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, 2019 , the Company is committed to selling approximately 2.0 million pounds of distillers corn oil with an average price of $0.23 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 9% of the projected annual plant production. The Company does not have any firm-priced sales commitments for ethanol as of September 30, 2019 . 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, 2019 and December 31, 2018 were as follows: Balance Sheet Classification September 30, 2019 December 31, 2018* Forward contracts in gain position $ 234,377 $ 676 Futures contracts in gain position 20,363 175,038 Futures contracts in loss position (52,738 ) — Total 202,002 175,714 Cash held by broker 271,761 378,291 Current Assets $ 473,763 $ 554,005 Forward contracts in loss position (Current Liabilities) $ (61,734 ) $ (368,475 ) *Derived from audited financial statements Futures contracts and cash held by broker are all with one party and the right of offset exists. Therefore, on the balance sheet, these items are netted in one balance regardless of position. Forward contracts are with multiple parties and the right of offset does not exist. Therefore, these contracts are reported at the gross amounts on the balance sheet. Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas purchases are included as a component of costs 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 2019 2018 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ (788,253 ) $ 762,395 Forward contracts Cost of Revenues (424,895 ) (844,490 ) Statement of Operations Nine Months Ended September 30, Classification 2019 2018 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ (113,672 ) $ 1,755,445 Forward contracts Cost of Revenues 53,655 (1,498,835 )
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 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	Recently Issued Accounting Pronouncements In February 2016, FASB issued ASU No. 2016-02, "Leases (Topic 842)" (ASU 2016-02). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. The standard has not had a material impact on the Company's consolidated financial statements. In January 2017, FASB issued ASU No. 2017-04, "Intangibles-Goodwill and Other (Topic 350)" (ASU 2017-04). ASU 2107-04 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. The Company does not expect this standard to have 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 Company does not expect this standard to have a material impact on the Company's consolidated financial statements.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2019
Summary of Significant Accounting Policies [Abstract]
Disaggregation of Revenue	The following table depicts the disaggregation of revenue according to product line: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Revenues ethanol $ 25,563,757 $ 14,599,385 $ 62,573,333 $ 45,970,750 Revenues distillers grains 5,634,315 3,630,835 14,539,232 11,056,256 Revenues distillers corn oil 1,243,438 566,136 3,039,231 1,650,956 $ 32,441,510 $ 18,796,356 $ 80,151,796 $ 58,677,962
Derivatives Not Designated as Hedging Instruments	Derivatives not designated as hedging instruments at September 30, 2019 and December 31, 2018 were as follows: Balance Sheet Classification September 30, 2019 December 31, 2018* Forward contracts in gain position $ 234,377 $ 676 Futures contracts in gain position 20,363 175,038 Futures contracts in loss position (52,738 ) — Total 202,002 175,714 Cash held by broker 271,761 378,291 Current Assets $ 473,763 $ 554,005 Forward contracts in loss position (Current Liabilities) $ (61,734 ) $ (368,475 ) *Derived from audited financial statements
Net realized and unrealized gains (losses) related to purchase contracts	Statement of Operations Three Months Ended September 30, Classification 2019 2018 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ (788,253 ) $ 762,395 Forward contracts Cost of Revenues (424,895 ) (844,490 ) Statement of Operations Nine Months Ended September 30, Classification 2019 2018 Net realized and unrealized gains (losses) related to purchase contracts: Futures contracts Cost of Revenues $ (113,672 ) $ 1,755,445 Forward contracts Cost of Revenues 53,655 (1,498,835 )

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2019
Inventory [Abstract]
Schedule of Inventory	Inventory consisted of the following as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018* Raw materials $ 4,667,113 $ 3,396,707 Finished goods 2,086,948 2,589,255 Work in process 802,294 514,881 Parts inventory 1,181,207 1,060,658 $ 8,737,562 $ 7,561,501 *Derived from audited financial statements.

Investments (Tables)

Investments (Tables)	9 Months Ended
	Sep. 30, 2019
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, 2019 December 31, 2018 Current Assets $ 248,012,529 $ 189,839,430 Other Assets 233,745,711 234,748,455 Current Liabilities 209,307,583 175,836,322 Long-term Liabilities 103,674,630 78,589,892 Members' Equity 168,776,027 170,161,671 Three Months Ended Income Statement September 30, 2019 September 30, 2018 Revenue $ 94,474,407 $ 60,363,855 Gross Profit 5,266,631 3,772,673 Net (Loss) (2,645,668 ) (91,453 ) Nine Months Ended Income Statement September 30, 2019 September 30, 2018 Revenue $ 230,715,486 $ 190,895,421 Gross Profit 14,095,945 16,541,767 Net Income (Loss) (2,933,142 ) 6,472,358 The following table shows the condensed financial information of Guardian Hankinson: Balance Sheet September 30, 2019 December 31, 2018 Current Assets $ 17,986,800 $ 21,412,926 Other Assets 93,873,235 102,988,761 Current Liabilities 17,645,720 3,390,042 Long-term Liabilities 37,210,746 38,144,803 Members' Equity 57,003,569 52,353,842 Three Months Ended Income Statement September 30, 2019 September 30, 2018 Revenue $ 60,517,220 $ 56,647,869 Gross Profit 1,677,900 1,620,076 Net Income (Loss) 524,949 (627,787 ) Nine Months Ended Income Statement September 30, 2019 September 30, 2018 Revenue $ 182,761,442 $ 180,415,511 Gross Profit 8,284,287 10,581,169 Net Income 4,771,534 5,455,699 The following table shows the condensed financial information of Ring-neck Energy & Feed: Balance Sheet September 30, 2019 December 31, 2018 Current Assets $ 13,381,722 $ 1,018,076 Other Assets 137,635,508 128,668,387 Current Liabilities 4,774,475 5,724,979 Long-term Liabilities 66,463,884 40,414,089 Members' Equity 79,778,871 83,547,395 Three Months Ended Income Statement September 30, 2019 September 30, 2018 Revenue $ 30,246,280 $ — Gross Profit 1,345,363 — Net (Loss) (3,756,247 ) (84,776 ) Nine Months Ended Income Statement September 30, 2019 September 30, 2018 Revenue $ 37,070,921 $ — Gross (Loss) (594,383 ) — Net (Loss) (9,124,363 ) (162,667 )

Long-Term Notes Payable (Tables

Long-Term Notes Payable (Tables)	9 Months Ended
	Sep. 30, 2019
Long Term Note Payable [Abstract]
Schedule of Long-term Debt Instruments	The balances of the notes payable are as follows: September 30, 2019 December 31, 2018* Notes Payable - FCSA Revolving note $ 33,000,000 $ 17,600,000 Term note 6,000,000 7,000,000 Less unamortized debt issuance costs (11,667 ) (14,632 ) 38,988,333 24,585,368 Less current portion (1,000,000 ) (1,000,000 ) $ 37,988,333 $ 23,585,368 *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 2020 $ 1,000,000 2021 1,000,000 2022 1,000,000 2023 4,500,000 2024 4,500,000 thereafter 27,000,000

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2019
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, 2019 and December 31, 2018 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, 2019 Assets: Derivative financial instruments, futures contracts $ 20,363 $ 9,563 $ 10,800 $ — forward contracts $ 234,377 $ — $ 234,377 — Liabilities: Derivative financial instruments, futures contracts $ (52,738 ) $ (52,738 ) $ — $ — forward contracts $ (61,734 ) $ — $ (61,734 ) $ — December 31, 2018* Assets: Derivative financial instruments, futures contracts $ 175,038 $ 175,038 $ — $ — forward contracts $ 676 $ — $ 676 — Liabilities: Derivative financial instruments, futures contracts $ — $ — $ — $ — forward contracts $ 368,475 $ — $ 368,475 $ —

Related Party Transactions (Tab

Related Party Transactions (Tables)	9 Months Ended
	Sep. 30, 2019
Related Party Transactions [Abstract]
Schedule of Related Party Transactions	Revenues and marketing fees related to the agreements are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Revenues ethanol $ 25,602,911 $ 14,670,012 $ 62,706,692 $ 46,132,851 Revenues distillers dried grains 2,158,001 1,072,862 3,333,325 1,687,934 Revenues corn oil 1,253,882 570,841 3,064,398 1,665,261 Marketing fees ethanol 60,960 65,865 182,880 197,595 Marketing fees distillers dried grains 16,338 8,115 25,278 11,853 Marketing fees corn oil 10,431 4,726 25,007 14,250 September 30, 2019 December 31, 2018* Amounts due included in accounts receivable $ 3,700,131 $ 836,798

Nature of Operations (Details)

Nature of Operations (Details) gal in Millions	9 Months Ended
	Sep. 30, 2019gal
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, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	$ 32,441,510	$ 18,796,356	$ 80,151,796	$ 58,677,962
Ethanol [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	25,563,757	14,599,385	62,573,333	45,970,750
Distillers Grain [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	5,634,315	3,630,835	14,539,232	11,056,256
Corn Oil [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Including Assessed Tax	$ 1,243,438	$ 566,136	$ 3,039,231	$ 1,650,956

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Receivables and Credit Policies (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
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	$ 2,131	$ 2,131

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Derivative Instruments - Balance Sheet (Details) bu in Millions	Sep. 30, 2019USD ($)buMMBTUT$ / MMBTU$ / usd_per_lb$ / T$ / bu	Dec. 31, 2018USD ($)
Derivatives, Fair Value [Line Items]
Derivative Instruments and Hedges, Assets	$ 473,763	$ 554,005
Derivative Instruments and Hedges, Liabilities	61,734	368,475
Current Assets [Member]
Derivatives, Fair Value [Line Items]
Cash held by broker	271,761	378,291
Current Assets [Member] | Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative assets, current	202,002	175,714
Derivative Instruments and Hedges, Assets	473,763	554,005
Other Current Liabilities [Member] | Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments and Hedges, Liabilities	$ 61,734	368,475
Corn [Member]
Derivatives, Fair Value [Line Items]
Number of instruments held | bu	1.7
Average price per unit | $ / bu	3.74
Percent of required need, coverage	6.00%
Natural Gas [Member]
Derivatives, Fair Value [Line Items]
Number of instruments held | MMBTU	652,000
Average price per unit | $ / MMBTU	2.64
Percent of required need, coverage	32.00%
Distillers Grain [Member]
Derivatives, Fair Value [Line Items]
Percent of required need, coverage	15.00%
Forward Contracts [Member] | Current Assets [Member] | Not Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Derivative assets, current	$ 234,377	676
Distillers Grain [Domain]
Derivatives, Fair Value [Line Items]
Number of instruments held | T	32,000
Average price per unit | $ / T	127
Distillers Corn Oil [Domain]
Derivatives, Fair Value [Line Items]
Number of instruments held | bu	2
Average price per unit | $ / usd_per_lb	0.23
Percent of required need, coverage	9.00%
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	$ 20,363	175,038
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	$ 52,738	$ 0

Summary of Significant Accoun_7

Summary of Significant Accounting Policies - Derivative Instruments - Income Statement (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2019USD ($)$ / usd_per_lb	Sep. 30, 2018USD ($)	Sep. 30, 2019USD ($)$ / usd_per_lb	Sep. 30, 2018USD ($)
Distillers Corn Oil [Domain]
Derivative Instruments, Gain (Loss) [Line Items]
Average price per unit | $ / usd_per_lb	0.23		0.23
Not Designated as Hedging Instrument [Member] | Cost of Sales [Member] | Future [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Gain (Loss) on Derivative, Net	$ (788,253)	$ 762,395	$ (113,672)	$ 1,755,445
Not Designated as Hedging Instrument [Member] | Cost of Sales [Member] | Forward Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Gain (Loss) on Derivative, Net	$ (424,895)	$ (844,490)	$ 53,655	$ (1,498,835)

Summary of Significant Accoun_8

Summary of Significant Accounting Policies - Investments (Details)	Sep. 30, 2019
Accounting Policies [Abstract]
Equity Method Investments, Number of Entities	5
Ownership percentage in equity method investments (less than)	20.00%

Inventory (Details)

Inventory (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Inventory [Abstract]
Raw Materials	$ 4,667,113	$ 3,396,707
Finished Goods	2,086,948	2,589,255
Work in Process	802,294	514,881
Parts Inventory	1,181,207	1,060,658
Inventory	$ 8,737,562	$ 7,561,501

Investments (Details)

Investments (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Schedule of Equity Method Investments [Line Items]
Ownership percentage	20.00%		20.00%
Investments	$ 17,317,302		$ 17,317,302		$ 17,300,470
Current Assets	248,012,529		248,012,529		189,839,430
Other Assets	233,745,711		233,745,711		234,748,455
Current Liabilities	209,307,583		209,307,583		175,836,322
Long-term Liabilities	103,674,630		103,674,630		78,589,892
Members' Equity	168,776,027		168,776,027		170,161,671
Revenue	94,474,407	$ 60,363,855	230,715,486	$ 190,895,421
Gross Profit	5,266,631	3,772,673	14,095,945	16,541,767
Net Income (Loss)	(2,645,668)	(91,453)	(2,933,142)	6,472,358
Equity in net income (loss) of investments	$ (349,123)	(30,513)	$ (425,776)	559,970
Renewable Products Marketing Group, LLC (RPMG) [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage	6.00%		6.00%
Investments	$ 1,266,000		$ 1,266,000		1,312,000
Lawrenceville Tanks, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage	10.00%		10.00%
Investments	$ 220,000		$ 220,000		266,000
Guardian Hankinson, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage	10.00%		10.00%
Investments	$ 5,700,000		$ 5,700,000		5,274,000
Current Assets	17,986,800		17,986,800		21,412,926
Other Assets	93,873,235		93,873,235		102,988,761
Current Liabilities	17,645,720		17,645,720		3,390,042
Long-term Liabilities	37,210,746		37,210,746		38,144,803
Members' Equity	57,003,569		57,003,569		52,353,842
Revenue	60,517,220	56,647,869	182,761,442	180,415,511
Gross Profit	1,677,900	1,620,076	8,284,287	10,581,169
Net Income (Loss)	524,949	(627,787)	4,771,534	5,455,699
Equity in net income (loss) of investments	$ 52,000	(63,000)	$ 427,000	546,000
Guardian Energy Management [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage	17.00%		17.00%
Investments	$ 53,000		$ 53,000		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	$ 10,079,000		$ 10,079,000		10,396,000
Accretion (Amortization) of Discounts and Premiums, Investments			1,129,000
Basis adjustment			464,000
Capitalized interest			$ 665,000
Amortization period for amortization of investment premium			20 years
Amortization	14,416		$ 24,026
Current Assets	13,381,722		13,381,722		1,018,076
Other Assets	137,635,508		137,635,508		128,668,387
Current Liabilities	4,774,475		4,774,475		5,724,979
Long-term Liabilities	66,463,884		66,463,884		40,414,089
Members' Equity	79,778,871		79,778,871		$ 83,547,395
Revenue	30,246,280	0	37,070,921	0
Gross Profit	1,345,363	0	(594,383)	0
Net Income (Loss)	(3,756,247)	(84,776)	(9,124,363)	(162,667)
Equity in net income (loss) of investments	(444,000)	(11,000)	(952,000)	(18,000)
Other Investments Combined [Member]
Schedule of Equity Method Investments [Line Items]
Equity in net income (loss) of investments	$ 42,000	$ 43,000	$ 99,000	$ 80,000

Revolving Operating Note (Detai

Revolving Operating Note (Details) - Farm Credit Services of America [Member] - Line of Credit [Member] - USD ($)	9 Months Ended
	Sep. 30, 2019	Feb. 06, 2018
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 10,000,000	$ 10,000,000
Basis spread on variable rate	3.00%
Interest rate at period end	5.10%
Unused capacity, commitment fee percentage	0.25%
Amount outstanding	$ 0
Remaining borrowing capacity	$ 5,281,000

Long-Term Notes Payable (Detail

Long-Term Notes Payable (Details) - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Long-term debt, gross	$ 33,000,000	$ 17,600,000
Long-term debt	38,988,333	24,585,368
Unamortized debt issuance expense	(11,667)	(14,632)
Long-term debt, current maturities	(1,000,000)	(1,000,000)
Long-term debt, excluding current maturities	37,988,333	$ 23,585,368
2020	1,000,000
2021	1,000,000
2022	1,000,000
2023	4,500,000
2024	4,500,000
thereafter	27,000,000
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	5.35%
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	$ 26,000,000
Interest rate at period end	5.35%
Unused capacity, commitment fee percentage	0.50%
Amount outstanding	$ 33,000,000
Remaining borrowing capacity	$ 7,000,000

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, gross	$ 33,000,000	$ 17,600,000
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, gross	39,000,000	24,600,000
Long-term debt, fair value	39,000,000	24,600,000
Fair Value, Measurements, Recurring [Member] | Future [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	20,363	175,038
Derivative liability	52,738	0
Fair Value, Measurements, Recurring [Member] | Future [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	9,563	175,038
Derivative liability	52,738	0
Fair Value, Measurements, Recurring [Member] | Future [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	10,800	0
Derivative liability	0	0
Fair Value, Measurements, Recurring [Member] | Future [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	0	0
Derivative liability	0	0
Fair Value, Measurements, Recurring [Member] | Forward Contracts [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	234,377	676
Derivative liability	61,734	(368,475)
Fair Value, Measurements, 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, Measurements, Recurring [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	234,377	676
Derivative liability	61,734	(368,475)
Fair Value, Measurements, Recurring [Member] | Forward Contracts [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative asset	0	0
Derivative liability	$ 0	$ 0

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Related Party Transaction [Line Items]
Ownership percentage	20.00%		20.00%
Amounts due included in accounts receivable	$ 3,700,131		$ 3,700,131		$ 836,798
Renewable Products Marketing Group, LLC (RPMG) [Member]
Related Party Transaction [Line Items]
Ownership percentage	6.00%		6.00%
Purchases from related party	$ 410,000	$ 319,000	$ 1,410,000	$ 1,181,000
Due to related parties	27,000		27,000		$ 37,000
Ethanol [Member] | Renewable Products Marketing Group, LLC (RPMG) [Member]
Related Party Transaction [Line Items]
Revenue, related party	25,602,911	14,670,012	62,706,692	46,132,851
Marketing fees, related party	60,960	65,865	182,880	197,595
Distillers Grain [Member] | Renewable Products Marketing Group, LLC (RPMG) [Member]
Related Party Transaction [Line Items]
Revenue, related party	2,158,001	1,072,862	3,333,325	1,687,934
Marketing fees, related party	16,338	8,115	25,278	11,853
Corn Oil [Member] | Renewable Products Marketing Group, LLC (RPMG) [Member]
Related Party Transaction [Line Items]
Revenue, related party	1,253,882	570,841	3,064,398	1,665,261
Marketing fees, related party	$ 10,431	$ 4,726	$ 25,007	$ 14,250