Document_and_Entity_Informatio
Document and Entity Information Document | 9 Months Ended |
Jul. 31, 2014 | |
Entity Information [Line Items] | ' |
Entity Registrant Name | 'Granite Falls Energy, LLC |
Entity Central Index Key | '0001181749 |
Current Fiscal Year End Date | '--10-31 |
Entity Filer Category | 'Non-accelerated Filer |
Document Type | '10-Q |
Document Period End Date | 31-Jul-14 |
Document Fiscal Year Focus | '2014 |
Document Fiscal Period Focus | 'Q3 |
Amendment Flag | 'false |
Entity Common Stock, Shares Outstanding | 30,606 |
Condensed_Balance_Sheets
Condensed Balance Sheets (USD $) | Apr. 30, 2014 | Oct. 31, 2013 |
Current Assets | ' | ' |
Cash | $17,656,511 | $1,158,774 |
Restricted cash | 1,419,983 | 393,750 |
Accounts receivable | 13,030,398 | 6,450,694 |
Inventory | 11,214,199 | 12,370,277 |
Prepaid expense and other current assets | 512,183 | 1,096,483 |
Total current assets | 43,833,274 | 21,469,978 |
Property, Plant and Equipment [Abstract] | ' | ' |
Land and improvements | 12,307,063 | 12,307,063 |
Railroad improvements | 8,005,523 | 8,005,523 |
Process equipment and tanks | 113,438,020 | 110,440,407 |
Administration building | 1,015,361 | 1,015,361 |
Office equipment | 265,792 | 265,792 |
Rolling stock | 1,821,069 | 1,691,857 |
Construction in progress | 3,022,290 | 2,067,213 |
Gross property, plant and equipment | 139,875,118 | 135,793,216 |
Less accumulated depreciation | 53,807,789 | 46,984,361 |
Net property, plant and equipment | 86,067,329 | 88,808,855 |
Goodwill | 1,372,473 | 1,372,473 |
Other Assets | 886,157 | 1,021,916 |
Total Assets | 132,159,233 | 112,673,222 |
Current Liabilities | ' | ' |
Current portion of long-term debt | 955,752 | 3,490,808 |
Accounts payable | 6,180,750 | 3,058,633 |
Corn payable to FCE | 1,163,455 | 4,001,852 |
Commodity derivative instruments | 741,087 | 75,113 |
Accrued liabilities current | 769,188 | 696,858 |
Total current liabilities | 9,810,232 | 11,323,264 |
Long-Term Debt, less current portion | 9,772,607 | 32,981,955 |
Members' Equity, 30,606 units authorized, issued and outstanding | 91,651,604 | 59,887,346 |
Stockholders' Equity Attributable to Noncontrolling Interest | 20,924,790 | 8,480,657 |
Members' Equity | 112,576,394 | 68,368,003 |
Total Liabilities and Members' Equity | $132,159,233 | $112,673,222 |
Condensed_Balance_Sheets_Paren
Condensed Balance Sheets (Parenthetical) | Apr. 30, 2014 | Oct. 31, 2013 |
Members' Equity, units authorized, issued and outstanding | 30,606 | 30,656 |
Condensed_Statements_of_Operat
Condensed Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | |
Revenues | $78,383,846 | $48,884,076 | $237,171,684 | $144,021,800 |
Cost of Goods Sold | 62,339,972 | 46,173,897 | 188,495,101 | 136,849,505 |
Gross Profit | 16,043,874 | 2,710,179 | 48,676,583 | 7,172,295 |
Operating Expenses | 1,210,642 | 513,021 | 3,886,020 | 1,658,681 |
Other Income (Expense) | 14,833,232 | 2,197,158 | 44,790,563 | 5,513,614 |
Other Nonoperating Income (Expense) [Abstract] | ' | ' | ' | ' |
Other income, net | 23,398 | 393 | 201,681 | 24,617 |
Interest income | 258,923 | 395 | 259,849 | 491 |
Interest expense | -36,163 | -24,245 | -508,515 | -111,651 |
Settlement of Debt Premium | 953,086 | 0 | 953,086 | 0 |
Total other income (expense), net | 1,199,244 | -23,457 | 906,101 | -86,543 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 16,032,476 | 2,173,701 | 45,696,664 | 5,427,071 |
Net Income | 13,018,046 | 2,173,701 | 37,273,338 | 5,427,071 |
Net Income (Loss) Attributable to Noncontrolling Interest | $3,014,430 | $0 | $8,423,326 | $0 |
Weighted Average Units Outstanding - Basic and Diluted | 30,606 | 30,606 | 30,606 | 30,606 |
Net Income Per Unit - Basic and Diluted | $425.34 | $71.02 | $1,217.84 | $177.32 |
Distributions Per Unit, Basic and Diluted | $0 | $0 | $180 | $0 |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flows (USD $) | 9 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | |
Cash paid during the period for: [Abstract] | ' | ' |
Net income | $45,696,664 | $5,427,071 |
Adjustments to reconcile net income to net cash provided by operations: | ' | ' |
Depreciation and amortization | 5,888,832 | 3,470,137 |
Change in fair value of derivative instruments | -53,453 | -369,902 |
Gain (Loss) on Disposition of Property Plant Equipment | -25,953 | 0 |
Increase (Decrease) on Settlement of Debt Premium | -953,086 | 0 |
Increase (Decrease) in Operating Assets and Liabilities [Abstract] | ' | ' |
Restricted cash | -1,026,233 | 82,000 |
Derivative Instruments | 719,427 | 323,651 |
Accounts receivable | -6,579,704 | 587,158 |
Inventory | 1,156,078 | 4,168,411 |
Prepaid expenses and other current assets | 584,300 | -4,975 |
Accounts payable | 283,720 | -3,906,302 |
Accrued liabilities | 157,137 | 40,725 |
Net Cash Provided by Operating Activities | 45,847,729 | 9,817,974 |
Net Cash Provided by (Used in) Investing Activities [Abstract] | ' | ' |
Proceeds from Sale of Property, Plant, and Equipment | 22,285 | 0 |
Payments for capital expenditures | -4,078,234 | -1,804,883 |
Proceeds from Sale of Land Held-for-use | 0 | 540,000 |
Payments to Acquire Businesses, Net of Cash Acquired | 0 | -6,977,236 |
Net Cash Used in Investing Activities | -4,055,949 | -8,242,119 |
Net Cash Provided by (Used in) Financing Activities [Abstract] | ' | ' |
Payments on long-term debt | -19,577,963 | -601,605 |
Proceeds from Issuance of Subordinated Long-term Debt | -207,000 | 0 |
Net Cash Used in Financing Activities | -25,294,043 | -601,605 |
Net Increase in Cash | 16,497,737 | 974,250 |
Cash - Beginning of Period | 1,158,774 | 685,828 |
Supplemental Cash Flow Information [Abstract] | ' | ' |
Debt Conversion, Original Debt, Amount | 3,936,000 | 0 |
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Paid | $5,509,080 | $0 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Jul. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Account Policies | ' |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Principles of Consolidation | |
The accompanying financial statements consolidate the operating results and financial position of Granite Falls Energy, LLC (“GFE” or the “Company”), and its wholly owned subsidiary, Project Viking, L.L.C. ("Project Viking") which owns 50.6% of Heron Lake BioEnergy, LLC (“HLBE”) as of July 31, 2014. The remaining 49.4% ownership of HLBE is included in the consolidated financial statements as a non-controlling interest. HLBE, through its wholly owned subsidiary, HLBE Pipeline Company, LLC, owns 73% of Agrinatural Gas, LLC ("Agrinatural"). Given HLBE's control over the operations of Agrinatural and its majority voting interest, HLBE consolidates the financial statements of Agrinatural with its consolidated financial statements, with the equity and earnings attributed to the remaining 27% noncontrolling interest. All intercompany balances and transactions are eliminated in consolidation. The acquisition of Project Viking occurred on July 31, 2013. | |
The accompanying condensed consolidated balance sheet as of October 31, 2013 is derived from audited consolidated financial statements. The unaudited interim condensed consolidated financial statements of the Company reflect all adjustments consisting only of normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of financial position and results of operations and cash flows. The results for the three and nine month periods ended July 31, 2014 are not necessarily indicative of the results that may be expected for a full fiscal year. Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) are condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), although the Company believes that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in its annual report for the year ended October 31, 2013 filed on Form 10-K with the SEC. | |
Nature of Business | |
GFE is a Minnesota limited liability company currently producing fuel-grade ethanol, distillers grains, and crude corn oil near Granite Falls, Minnesota and sells these products, pursuant to marketing agreements, throughout the continental United States. GFE's plant has an approximate annual production capacity of 60 million gallons, but is currently permitted to produce up to 70 million gallons of undenatured ethanol on a twelve month rolling sum basis. | |
HLBE is a Minnesota limited liability company currently producing fuel-grade ethanol, distillers grains, and crude corn oil near Heron Lake, Minnesota and sells these products, pursuant to marketing agreements, throughout the continental United States. HLBE's plant has an approximate annual production capacity of 50 million gallons, but is currently permitted to produce up to 59.2 million gallons. Additionally, HLBE, through a majority owned subsidiary, operates a natural gas pipeline that provides natural gas to HLBE's ethanol production facility. | |
Accounting Estimates | |
Management uses estimates and assumptions in preparing these condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The Company uses estimates and assumptions in accounting for the following significant matters, among others: economic lives of property, plant, and equipment, valuation of commodity derivatives and inventory, the assumptions used in the impairment analysis of long-lived assets and goodwill, and the assumptions used to estimate the fair market value of acquired assets and liabilities. Actual results may differ from previously estimated amounts, and such differences may be material to our condensed consolidated financial statements. The Company periodically reviews estimates and assumptions, and the effects of revisions are reflected in the period in which the revision is made. | |
Revenue Recognition | |
The Company generally sells ethanol and related products pursuant to marketing agreements. Revenues from the production of ethanol and the related products are recorded when the customer has taken title and assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. Ethanol and related products are generally shipped free on board (FOB) shipping point. The Company believes there are no ethanol sales, during any given month, which should be considered contingent and recorded as deferred revenue. | |
In accordance with the Company's agreements for the marketing and sale of ethanol and related products, marketing fees and commissions due to the marketers are deducted from the gross sales price as earned. These fees and commissions are recorded net of revenues, as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products. Shipping costs paid by the Company to the marketer in the sale of ethanol are not specifically identifiable and, as a result, are recorded based on the net selling price reported to the Company from the marketer. Shipping costs incurred by the Company in the sale of distillers grains and corn oil are included in cost of goods sold. | |
Derivative Instruments | |
From time to time the Company enters into derivative transactions to hedge its exposures to commodity price fluctuations. The Company is required to record these derivatives on the balance sheets at fair value. | |
In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Changes in the fair value of undesignated derivatives are recorded in earnings. | |
Additionally, the Company is required to evaluate its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted 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 accounting and reporting requirements, and therefore, are not marked to market in our condensed consolidated financial statements. | |
In order to reduce the risks caused by market fluctuations, the Company occasionally hedges its anticipated corn, natural gas, and denaturant purchases and ethanol sales by entering into options and futures contracts. These contracts are used with the intention to fix the purchase price of anticipated requirements for corn in the Company's ethanol production activities and the related sales price of ethanol. The fair value of these contracts is based on quoted prices in active exchange-traded or over-the-counter market conditions. Although the Company believes its commodity derivative positions are economic hedges, none have been formally designated as a hedge for accounting purposes and derivative positions are recorded on the balance sheet at their fair market value, with changes in fair value recognized in current period earnings or losses. The Company does not enter into financial instruments for trading or speculative purposes. | |
The Company has adopted authoritative guidance related to “Derivatives and Hedging,” and has included the required enhanced quantitative and qualitative disclosure about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses from derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. See further discussion in Note 4. | |
Business Combinations | |
The Company allocates the total purchase price of a business combination to the assets acquired and the liabilities assumed based on their estimated fair values at the acquisition date, with the excess purchase price recorded as goodwill. The Company used current market data to assist them in determining the fair value of the assets acquired and liabilities assumed, including goodwill, based on recognized business valuation methodology. Subsequent to the acquisition but not to exceed one year from the acquisition date, the Company will record any material adjustments retrospectively to the initial estimate based on new information obtained about facts and circumstances that existed as of the acquisition date. The Company expenses any acquisition-related costs as incurred in connection with business combinations. An income, market or cost valuation approach may be utilized to estimate the fair value of the assets acquired or liabilities assumed in a business combination. The income valuation approach represents the present value of future cash flows over the life of the asset using (i) discrete financial forecasts, which rely on management's estimates of revenue and operating expenses, (ii) long-term growth rates, and (iii) an appropriate discount rate. The market valuation approach uses prices paid for a reasonably similar asset by other purchasers in the market, with adjustments relating to any differences between the assets. The cost valuation approach is based on the replacement cost of a comparable asset at prices at the time of the acquisition reduced for depreciation of the asset. |
Inventory
Inventory | 9 Months Ended | |||||||
Jul. 31, 2014 | ||||||||
Inventory [Abstract] | ' | |||||||
Inventory | ' | |||||||
INVENTORY | ||||||||
Inventories consist of the following: | ||||||||
July 31, 2014 | ||||||||
(Unaudited) | October 31, 2013 | |||||||
Raw materials | $ | 3,497,925 | $ | 4,652,465 | ||||
Spare parts | 2,223,459 | 1,636,466 | ||||||
Work in process | 1,358,852 | 1,643,574 | ||||||
Finished goods | 4,133,963 | 4,437,772 | ||||||
Totals | $ | 11,214,199 | $ | 12,370,277 | ||||
The Company performs a lower of cost or market analysis on inventory to determine if the market values of certain inventories are less than their carrying value, which is attributable primarily to decreases in market prices of corn and ethanol. Based on the lower of cost or market analysis, the Company did not record a lower of cost or market adjustment on inventories for the three or nine month periods ended July 31, 2014 or 2013. |
Derivative_Instruments
Derivative Instruments | 9 Months Ended | ||||||||||||||
Jul. 31, 2014 | |||||||||||||||
Derivative Instruments [Abstract] | ' | ||||||||||||||
Derivative Instruments | ' | ||||||||||||||
DERIVATIVE INSTRUMENTS | |||||||||||||||
As of July 31, 2014, the total notional amount of the Company's outstanding corn derivative instruments was approximately 5,450,000 bushels that were entered into to hedge forecasted corn purchases through May 2015. There may be offsetting positions that are not shown on a net basis that could lower the notional amount of positions outstanding as disclosed above. | |||||||||||||||
The following tables provide details regarding the Company's derivative instruments at July 31, 2014, none of which were designated as hedging instruments: | |||||||||||||||
Balance Sheet location | Assets | Liabilities | |||||||||||||
Corn contracts - GFE | Commodity derivative instruments | $ | — | $ | 655,600 | ||||||||||
Corn contracts - HLBE | Commodity derivative instruments | — | 85,487 | ||||||||||||
Totals | $ | — | $ | 741,087 | |||||||||||
As of October 31, 2013, the total notional amount of the Company's outstanding corn derivative instruments was approximately 1,125,000 bushels that were entered into to hedge forecasted corn purchases through December 2013. There may be offsetting positions that are shown on a net basis that could lower the notional amount of positions outstanding as disclosed above. | |||||||||||||||
The following tables provide details regarding the Company's derivative instruments at October 31, 2013, none of which are designated as hedging instruments: | |||||||||||||||
Balance Sheet location | Assets | Liabilities | |||||||||||||
Corn contracts - GFE | Commodity derivative instruments | $ | — | $ | 75,113 | ||||||||||
Totals | $ | — | $ | 75,113 | |||||||||||
The following tables provide details regarding the gains and (losses) from Company's derivative instruments in statements of operations, none of which are designated as hedging instruments: | |||||||||||||||
Statement of Operations location | Three Months Ended | ||||||||||||||
July 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Corn contracts | Cost of Goods Sold | $ | (1,549,100 | ) | $ | 343,320 | |||||||||
Total Gain (Loss) | $ | (1,549,100 | ) | $ | 343,320 | ||||||||||
Statement of Operations location | Nine Months Ended | ||||||||||||||
July 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Corn contracts | Cost of Goods Sold | $ | 53,453 | $ | 369,902 | ||||||||||
Total Gain | $ | 53,453 | $ | 369,902 | |||||||||||
FAIR_VALUE_Notes
FAIR VALUE (Notes) | 9 Months Ended | |||||||||||||||||
Jul. 31, 2014 | ||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||
Fair Value Disclosures [Text Block] | ' | |||||||||||||||||
FAIR VALUE | ||||||||||||||||||
The following table provides information on those derivative liabilities measured at fair value on a recurring basis at July 31, 2014: | ||||||||||||||||||
Fair Value Measurement Using | ||||||||||||||||||
Financial Liabilities: | Carrying Amount in Balance Sheet | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Commodity Derivative Instruments | $ | 741,087 | $ | 741,087 | $ | — | $ | — | ||||||||||
The following table provides information on those derivative liabilities measured at fair value on a recurring basis at October 31, 2013: | ||||||||||||||||||
Fair Value Measurement Using | ||||||||||||||||||
Financial Liabilities: | Carrying Amount in Balance Sheet | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Commodity Derivative Instruments | $ | 75,113 | $ | 75,113 | $ | — | $ | — | ||||||||||
The Company determines the fair value of commodity derivative instruments by obtaining 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 Chicago Board of Trade market and New York Mercantile Exchange. |
Revolving_Line_of_Credit
Revolving Line of Credit | 9 Months Ended | |||||||||
Jul. 31, 2014 | ||||||||||
Revolving Line of Credit [Abstract] | ' | |||||||||
Debt Disclosure [Text Block] | ' | |||||||||
DEBT FACILITIES | ||||||||||
Granite Falls Energy: | ||||||||||
GFE has two credit facilities with a lender. The first is a seasonal revolving operating loan facility in the amount of $5,600,000. The second is a revolving term loan facility in the amount of $18,000,000. However, the amount available for borrowing under this facility reduces by $2,000,000 semi-annually, beginning September 1, 2014, with final payment due March 1, 2018. | ||||||||||
The interest rates for both facilities are based on the bank's "One Month LIBOR Index Rate," plus 2.8% and 3.05% on the seasonal and revolving term commitments, respectively. Both facilities are available through March 31, 2017 and March 31, 2018, respectively. The outstanding balance on the revolving term loan on July 31, 2014 and October 31, 2013 was $0 and $2,513,674, respectively, and the interest rate were 3.05% and 3.21%, respectively. GFE currently has no outstanding balance on the seasonal revolving operating loan facility. | ||||||||||
The Company's credit facilities with United FCS require the Company to comply with certain financial covenants that require minimum debt service coverage and working capital requirements. As of July 31, 2014 and October 31, 2013, GFE was in compliance with these financial covenants and expects to be in compliance throughout fiscal 2014. | ||||||||||
The credit facilities are secured by substantially all assets of the Company. There are no savings account balance collateral requirements as part of this credit facility. | ||||||||||
At July 31, 2014, GFE also had letters of credit totaling $288,928 with the bank as part of a credit requirement of Northern Natural Gas. These letters of credit reduced the total amount available on the revolving operating facility to approximately $5,711,000. | ||||||||||
Heron Lake BioEnergy: | ||||||||||
Term Note Payable | ||||||||||
HLBE had a term loan with AgStar in the amount of $17,400,000. HLBE was making equal monthly payments of principal and interest of approximately $223,000 on the term loan based on a 10-year amortization, provided the entire principal balance and accrued and unpaid interest on the term loan was due and payable in full on the maturity date of September 1, 2016. On July 30, 2014, using funds from the new comprehensive credit facility that HLBE executed with AgStar, HLBE repaid the entire outstanding balance of their credit facilities under the Sixth Amended and Restated Master Loan Agreement dated May 17, 2013 with AgStar. For the three and nine month periods ended July 31, 2014, the Company had amortization of a debt premium associated with this credit facility of approximately $281,000 and $1,070,355, respectively and is included as a reduction of interest expense. As a result of the payoff of the entire term note payable, the Company recorded a gain of approximately $953,000 related to the settlement of a debt premium associated with the credit facility. | ||||||||||
Revolving Term Note | ||||||||||
HLBE also had a three-year term revolving loan commitment in the amount of $18,500,000, under which AgStar agreed to make periodic advances to HLBE up to this original amount until September 1, 2016. | ||||||||||
On July 29, 2014, HLBE entered into a new master loan agreement and related loan documents (the “Credit Facility”) with AgStar. The Credit Facility provides HLBE with a new comprehensive revolving term loan commitment in the amount of $28 million (the “Revolving Term Loan”), under which AgStar agreed to make one or more advances to HLBE for use by HLBE to repay its debt currently outstanding with AgStar, provide loan financing to Agrinatural Gas, LLC, HLBE's subsidiary, and provide working capital to HLBE. Following the loan closing, HLBE had approximately $7.5 million outstanding on the Term Revolving Loan. | ||||||||||
Amounts borrowed by HLBE under the Revolving Term Loan and repaid or prepaid may be re-borrowed at any time prior to the March 1, 2022 maturity date, provided that outstanding advances may not exceed the amount of the term revolving loan commitment. Amounts outstanding on the Revolving Term Loan bear interest at a variable rate equal to the greater of a LIBOR Index rate plus 3.25%, payable monthly. HLBE may elect to enter into a fixed interest rate on this loan at various times throughout the term of the loan as provided in the loan agreements. HLBE also pays an unused commitment fee on the unused portion of the Revolving Term Loan commitment at the rate of 0.50% per annum, payable in arrears in quarterly installments during the term of the term revolving loan. Under the terms of the new agreement, the Revolving Term Loan commitment is scheduled to decline by $3,500,000 annually, beginning on March 1, 2015 and each anniversary date thereafter. The Revolving Term Loan is subject to a prepayment fee prior to July 1, 2016 due to refinancing. The Credit Facility contains customary covenants. The loan is secured by substantially all HLBE assets including a subsidiary guarantee. | ||||||||||
As part of the Credit Facility closing, HLBE entered into an Administrative Agency Agreement with CoBank, ACP (“CoBank”). CoBank purchased a participation interest in the AgStar loans and was appointed the administrative agent for the purpose of servicing the loans. As a result, CoBank will act as the agent for AgStar with respect to the Credit Facility. | ||||||||||
Note Payable on Pipeline Assets (Agrinatural) | ||||||||||
HLBE had a note payable to a lending institution for the construction of the pipeline assets of Agrinatural. The note was initially due in December 2011, however, was subsequently converted in February 2012 to a term loan with a three year repayment period. During November 2013, the note payable was refinanced with the lending institution with additional borrowings of approximately $759,000 being made. Amounts outstanding on the term loan were to bear interest at 5.29%, payable monthly, with a maturity in December 2016. The term loan was secured by substantially all assets of Agrinatural. The note was paid off in full in July 2014 using funds loaned to Agrinatural by HLBE. | ||||||||||
Subordinated Convertible Debt | ||||||||||
On May 17, 2013, HLBE's previous Board of Governors loaned HLBE approximately $1,400,000 as part of the subordinated convertible debt offering. An additional $3,700,000 was raised as part of a subordinated convertible debt offering during September 2013. The convertible secured debt was subordinated to the AgStar debt. The notes were to bear interest at 7.25% and were due on October 1, 2018. On October 1, 2014, or immediately prior to the sale of all or effectively all of HLBE assets, each note could be convertible into Class A stock at a rate of $0.30 per Class A unit. HLBE had reserved the right to issue Class B units upon conversion if the principal balance of the convertible debt exceeded the authorized Class A units at the conversion date. At the issuance, each debt holder had the option to convert to Class A units. As a result, holders elected to convert $934,500 in September 2013 for 3,115,000 Class A units. | ||||||||||
On May 2, 2014, HLBE issued a notice that it intended to redeem all of the outstanding principal amount of the subordinated convertible debt on July 1, 2014. The announced redemption was pursuant to HLBE's "optional redemption" right in the indenture governing the notes. The outstanding principal balance of $4,143,000, would be redeemed at a redemption price equal to 100% of the aggregate principal amount plus accrued and unpaid interest to, but excluding, the redemption date. HLBE's obligation to pay the redemption price on the redemption date was subject to the right of the holders of the notes to elect to convert the principal amount of their Notes into capital units of HLBE at a conversion rate of $0.30 per unit. | ||||||||||
As of the close of business on June 20, 2014, the last day to elect conversion, note holders holding an aggregate principal amount of $3,936,000 of notes elected to convert their notes into units of HLBE. On July 1, 2014, the Company issued 13,120,000 Class A units of HLBE to note holders electing conversion and redeemed the remaining $207,000 of the notes at par value. In addition, on the same day, HLBE paid accrued and unpaid interest through July 1, 2014 to all note holders, including those electing conversion, per the terms of the notes and the indenture. | ||||||||||
Long-term debt consists of the following: | ||||||||||
July 31, | 31-Oct-13 | |||||||||
2014 | ||||||||||
Granite Falls Energy: | (unaudited) | |||||||||
Capital One Shuttlewagon Railcar Mover. This note was paid in full January 2014. | $ | — | $ | 382,918 | ||||||
Revolving Term Loan - see terms above | — | 2,513,674 | ||||||||
Heron Lake BioEnergy: | ||||||||||
Term note payable to lending institution - see terms above | — | 18,317,800 | ||||||||
Revolving term note payable to lending institution - see terms above | 7,486,628 | 6,263,158 | ||||||||
Assessments payable | 2,440,743 | 2,604,678 | ||||||||
Note payable to electrical company | 237,500 | 293,750 | ||||||||
Note payable on pipeline assets (Agrinatural) | — | 1,013,132 | ||||||||
Note payable to non-controlling interest member of Agrinatural. | 300,000 | 300,000 | ||||||||
Corn oil recovery system note payable | 263,488 | 640,653 | ||||||||
Subordinated Convertible Debt - see terms above. | — | 4,143,000 | ||||||||
Total debt | 10,728,359 | 36,472,763 | ||||||||
Less: Current Maturities | (955,752 | ) | (3,490,808 | ) | ||||||
Total Long-Term Debt | $ | 9,772,607 | $ | 32,981,955 | ||||||
Leases
Leases | 9 Months Ended |
Jul. 31, 2014 | |
Leases [Abstract] | ' |
Leases | ' |
LEASES | |
GFE leases equipment, primarily rail cars, under operating leases through 2018. Rent expense for these leases was approximately $558,000 and $500,500 for the three month periods ended July 31, 2014 and 2013, respectively. Rent expense for these leases was approximately $1,647,000 and $1,490,000 for the nine month periods ended July 31, 2014 and 2013, respectively. | |
HLBE leases equipment, primarily rail cars, under operating leases through 2017. Rent expense for these leases was approximately $503,000 and $1,327,000 for the three and nine month periods ended July 31, 2014, respectively. |
Members_Equity
Members' Equity | 9 Months Ended |
Jul. 31, 2014 | |
Members' Equity [Abstract] | ' |
Members' Equity | ' |
MEMBERS' EQUITY | |
GFE has one class of membership units. The units have no par value and have identical rights, obligations and privileges. Income and losses are allocated to all members based upon their respective percentage of units held. As of July 31, 2014 and October 31, 2013, GFE had 30,606 membership units authorized, issued, and outstanding. | |
In December 2013, the Board of Governors declared a cash distribution of $180 per unit or $5,509,080 for unit holders of record as of December 19, 2013. The distribution was paid on December 31, 2013. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Jul. 31, 2014 | |
Commitments and Contingencies [Abstract] | ' |
Commitments and Contingencies | ' |
COMMITMENTS AND CONTINGENCIES | |
Corn Storage and Grain Handling Agreement and Purchase Commitments | |
GFE has a corn storage and grain handling agreement with Farmers Cooperative Elevator Company (FCE), a member. Under the current agreement, the Company agrees to purchase all of the corn needed for the operation of the plant from FCE. The price of the corn purchased will be the bid price the member establishes for the plant plus a set fee per bushel. | |
At October 31, 2013, GFE also had 550,000 bushels of stored corn totaling approximately $2,346,000 with FCE that is included in inventory. All of this corn was consumed in production during the three months ended January 31, 2014. | |
At July 31, 2014, GFE had no forward corn purchase commitments. | |
At July 31, 2014, HLBE had basis contracts for forward corn purchase commitments for approximately 2,898,000 bushels for deliveries through January 2015. | |
Ethanol Contracts | |
At July 31, 2014, GFE had forward contracts to sell approximately $12,710,000 of ethanol for various delivery periods from August 2014 through March 2015 which approximates 17% of its anticipated ethanol sales during that period. | |
At July 31, 2014, HLBE had forward contracts to sell approximately $12,812,000 of ethanol for various delivery periods from August 2014 through March 2015 which approximates 19% of its anticipated ethanol sales during that period. | |
Distillers Grain Contracts | |
At July 31, 2014, GFE had forward contracts to sell approximately $2,293,000 of distillers grain for deliveries in August 2014 through December 2014 which approximates 23% of its anticipated distillers grain sales during that period. | |
At July 31, 2014, HLBE had forward contracts to sell approximately $2,042,000 of distillers grains for delivery in August 2014 through July 2015 which approximates 15% of its anticipated distillers grain sales during that period. | |
Natural Gas | |
At July 31, 2014, HLBE has natural gas agreements with a minimum purchase commitment of approximately 1.6 million MMBTU per year until October 2014. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies Level 2 (Policies) | 9 Months Ended |
Jul. 31, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation and Significant Accounting Policies [Text Block] | ' |
Basis of Presentation and Principles of Consolidation | |
The accompanying financial statements consolidate the operating results and financial position of Granite Falls Energy, LLC (“GFE” or the “Company”), and its wholly owned subsidiary, Project Viking, L.L.C. ("Project Viking") which owns 50.6% of Heron Lake BioEnergy, LLC (“HLBE”) as of July 31, 2014. The remaining 49.4% ownership of HLBE is included in the consolidated financial statements as a non-controlling interest. HLBE, through its wholly owned subsidiary, HLBE Pipeline Company, LLC, owns 73% of Agrinatural Gas, LLC ("Agrinatural"). Given HLBE's control over the operations of Agrinatural and its majority voting interest, HLBE consolidates the financial statements of Agrinatural with its consolidated financial statements, with the equity and earnings attributed to the remaining 27% noncontrolling interest. All intercompany balances and transactions are eliminated in consolidation. The acquisition of Project Viking occurred on July 31, 2013. | |
The accompanying condensed consolidated balance sheet as of October 31, 2013 is derived from audited consolidated financial statements. The unaudited interim condensed consolidated financial statements of the Company reflect all adjustments consisting only of normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of financial position and results of operations and cash flows. The results for the three and nine month periods ended July 31, 2014 are not necessarily indicative of the results that may be expected for a full fiscal year. Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) are condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), although the Company believes that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in its annual report for the year ended October 31, 2013 filed on Form 10-K with the SEC. | |
Nature of Operations [Text Block] | ' |
Nature of Business | |
GFE is a Minnesota limited liability company currently producing fuel-grade ethanol, distillers grains, and crude corn oil near Granite Falls, Minnesota and sells these products, pursuant to marketing agreements, throughout the continental United States. GFE's plant has an approximate annual production capacity of 60 million gallons, but is currently permitted to produce up to 70 million gallons of undenatured ethanol on a twelve month rolling sum basis. | |
HLBE is a Minnesota limited liability company currently producing fuel-grade ethanol, distillers grains, and crude corn oil near Heron Lake, Minnesota and sells these products, pursuant to marketing agreements, throughout the continental United States. HLBE's plant has an approximate annual production capacity of 50 million gallons, but is currently permitted to produce up to 59.2 million gallons. Additionally, HLBE, through a majority owned subsidiary, operates a natural gas pipeline that provides natural gas to HLBE's ethanol production facility. | |
Use of Estimates, Policy [Policy Text Block] | ' |
Accounting Estimates | |
Management uses estimates and assumptions in preparing these condensed consolidated financial statements in accordance with generally accepted accounting principles in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The Company uses estimates and assumptions in accounting for the following significant matters, among others: economic lives of property, plant, and equipment, valuation of commodity derivatives and inventory, the assumptions used in the impairment analysis of long-lived assets and goodwill, and the assumptions used to estimate the fair market value of acquired assets and liabilities. Actual results may differ from previously estimated amounts, and such differences may be material to our condensed consolidated financial statements. The Company periodically reviews estimates and assumptions, and the effects of revisions are reflected in the period in which the revision is made. | |
Revenue Recognition, Policy [Policy Text Block] | ' |
Revenue Recognition | |
The Company generally sells ethanol and related products pursuant to marketing agreements. Revenues from the production of ethanol and the related products are recorded when the customer has taken title and assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. Ethanol and related products are generally shipped free on board (FOB) shipping point. The Company believes there are no ethanol sales, during any given month, which should be considered contingent and recorded as deferred revenue. | |
In accordance with the Company's agreements for the marketing and sale of ethanol and related products, marketing fees and commissions due to the marketers are deducted from the gross sales price as earned. These fees and commissions are recorded net of revenues, as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products. Shipping costs paid by the Company to the marketer in the sale of ethanol are not specifically identifiable and, as a result, are recorded based on the net selling price reported to the Company from the marketer. Shipping costs incurred by the Company in the sale of distillers grains and corn oil are included in cost of goods sold. | |
Derivatives, Policy [Policy Text Block] | ' |
Derivative Instruments | |
From time to time the Company enters into derivative transactions to hedge its exposures to commodity price fluctuations. The Company is required to record these derivatives on the balance sheets at fair value. | |
In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Changes in the fair value of undesignated derivatives are recorded in earnings. | |
Additionally, the Company is required to evaluate its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted 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 accounting and reporting requirements, and therefore, are not marked to market in our condensed consolidated financial statements. | |
In order to reduce the risks caused by market fluctuations, the Company occasionally hedges its anticipated corn, natural gas, and denaturant purchases and ethanol sales by entering into options and futures contracts. These contracts are used with the intention to fix the purchase price of anticipated requirements for corn in the Company's ethanol production activities and the related sales price of ethanol. The fair value of these contracts is based on quoted prices in active exchange-traded or over-the-counter market conditions. Although the Company believes its commodity derivative positions are economic hedges, none have been formally designated as a hedge for accounting purposes and derivative positions are recorded on the balance sheet at their fair market value, with changes in fair value recognized in current period earnings or losses. The Company does not enter into financial instruments for trading or speculative purposes. | |
The Company has adopted authoritative guidance related to “Derivatives and Hedging,” and has included the required enhanced quantitative and qualitative disclosure about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses from derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. See further discussion in Note 4. | |
Business Combinations Policy [Policy Text Block] | ' |
Business Combinations | |
The Company allocates the total purchase price of a business combination to the assets acquired and the liabilities assumed based on their estimated fair values at the acquisition date, with the excess purchase price recorded as goodwill. The Company used current market data to assist them in determining the fair value of the assets acquired and liabilities assumed, including goodwill, based on recognized business valuation methodology. Subsequent to the acquisition but not to exceed one year from the acquisition date, the Company will record any material adjustments retrospectively to the initial estimate based on new information obtained about facts and circumstances that existed as of the acquisition date. The Company expenses any acquisition-related costs as incurred in connection with business combinations. An income, market or cost valuation approach may be utilized to estimate the fair value of the assets acquired or liabilities assumed in a business combination. The income valuation approach represents the present value of future cash flows over the life of the asset using (i) discrete financial forecasts, which rely on management's estimates of revenue and operating expenses, (ii) long-term growth rates, and (iii) an appropriate discount rate. The market valuation approach uses prices paid for a reasonably similar asset by other purchasers in the market, with adjustments relating to any differences between the assets. The cost valuation approach is based on the replacement cost of a comparable asset at prices at the time of the acquisition reduced for depreciation of the asset. |
Inventory_Level_3_Tables
Inventory Level 3 (Tables) | 9 Months Ended | |||||||
Jul. 31, 2014 | ||||||||
Inventory [Abstract] | ' | |||||||
Schedule of Inventory, Current [Table Text Block] | ' | |||||||
Inventories consist of the following: | ||||||||
July 31, 2014 | ||||||||
(Unaudited) | October 31, 2013 | |||||||
Raw materials | $ | 3,497,925 | $ | 4,652,465 | ||||
Spare parts | 2,223,459 | 1,636,466 | ||||||
Work in process | 1,358,852 | 1,643,574 | ||||||
Finished goods | 4,133,963 | 4,437,772 | ||||||
Totals | $ | 11,214,199 | $ | 12,370,277 | ||||
Derivative_Instruments_Tables
Derivative Instruments (Tables) | 9 Months Ended | |||||||||||||||||||||||
Jul. 31, 2014 | Jul. 31, 2013 | |||||||||||||||||||||||
Derivatives, Fair Value [Line Items] | ' | ' | ||||||||||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | ' | ' | ||||||||||||||||||||||
The following tables provide details regarding the Company's derivative instruments at July 31, 2014, none of which were designated as hedging instruments: | The following tables provide details regarding the Company's derivative instruments at October 31, 2013, none of which are designated as hedging instruments: | |||||||||||||||||||||||
Balance Sheet location | Assets | Liabilities | Balance Sheet location | Assets | Liabilities | |||||||||||||||||||
Corn contracts - GFE | Commodity derivative instruments | $ | — | $ | 655,600 | Corn contracts - GFE | Commodity derivative instruments | $ | — | $ | 75,113 | |||||||||||||
Corn contracts - HLBE | Commodity derivative instruments | — | 85,487 | Totals | $ | — | $ | 75,113 | ||||||||||||||||
Totals | $ | — | $ | 741,087 | ||||||||||||||||||||
Derivative_Instruments_Derivat
Derivative Instruments Derivative presentation in equity (Tables) | 9 Months Ended | ||||||||||||||
Jul. 31, 2014 | |||||||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | ' | ||||||||||||||
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block] | ' | ||||||||||||||
Statement of Operations location | Three Months Ended | ||||||||||||||
July 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Corn contracts | Cost of Goods Sold | $ | (1,549,100 | ) | $ | 343,320 | |||||||||
Total Gain (Loss) | $ | (1,549,100 | ) | $ | 343,320 | ||||||||||
Statement of Operations location | Nine Months Ended | ||||||||||||||
July 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Corn contracts | Cost of Goods Sold | $ | 53,453 | $ | 369,902 | ||||||||||
Total Gain | $ | 53,453 | $ | 369,902 | |||||||||||
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 9 Months Ended | |||||||||||||||||
Jul. 31, 2014 | ||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||||||||||
Fair Value Disclosures [Text Block] | ' | |||||||||||||||||
FAIR VALUE | ||||||||||||||||||
The following table provides information on those derivative liabilities measured at fair value on a recurring basis at July 31, 2014: | ||||||||||||||||||
Fair Value Measurement Using | ||||||||||||||||||
Financial Liabilities: | Carrying Amount in Balance Sheet | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Commodity Derivative Instruments | $ | 741,087 | $ | 741,087 | $ | — | $ | — | ||||||||||
The following table provides information on those derivative liabilities measured at fair value on a recurring basis at October 31, 2013: | ||||||||||||||||||
Fair Value Measurement Using | ||||||||||||||||||
Financial Liabilities: | Carrying Amount in Balance Sheet | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Commodity Derivative Instruments | $ | 75,113 | $ | 75,113 | $ | — | $ | — | ||||||||||
The Company determines the fair value of commodity derivative instruments by obtaining 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 Chicago Board of Trade market and New York Mercantile Exchange. | ||||||||||||||||||
Fair Value, by Balance Sheet Grouping [Table Text Block] | ' | |||||||||||||||||
The following table provides information on those derivative liabilities measured at fair value on a recurring basis at July 31, 2014: | ||||||||||||||||||
Fair Value Measurement Using | ||||||||||||||||||
Financial Liabilities: | Carrying Amount in Balance Sheet | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Commodity Derivative Instruments | $ | 741,087 | $ | 741,087 | $ | — | $ | — | ||||||||||
The following table provides information on those derivative liabilities measured at fair value on a recurring basis at October 31, 2013: | ||||||||||||||||||
Fair Value Measurement Using | ||||||||||||||||||
Financial Liabilities: | Carrying Amount in Balance Sheet | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Commodity Derivative Instruments | $ | 75,113 | $ | 75,113 | $ | — | $ | — | ||||||||||
LongTerm_Debt_Level_3_Tables
Long-Term Debt Level 3 (Tables) | 9 Months Ended | |||||||||
Jul. 31, 2014 | ||||||||||
Item 6. Long-Term Debt [Abstract] | ' | |||||||||
Schedule of Long-term Debt Instruments [Table Text Block] | ' | |||||||||
ng-term debt consists of the following: | ||||||||||
July 31, | 31-Oct-13 | |||||||||
2014 | ||||||||||
Granite Falls Energy: | (unaudited) | |||||||||
Capital One Shuttlewagon Railcar Mover. This note was paid in full January 2014. | $ | — | $ | 382,918 | ||||||
Revolving Term Loan - see terms above | — | 2,513,674 | ||||||||
Heron Lake BioEnergy: | ||||||||||
Term note payable to lending institution - see terms above | — | 18,317,800 | ||||||||
Revolving term note payable to lending institution - see terms above | 7,486,628 | 6,263,158 | ||||||||
Assessments payable | 2,440,743 | 2,604,678 | ||||||||
Note payable to electrical company | 237,500 | 293,750 | ||||||||
Note payable on pipeline assets (Agrinatural) | — | 1,013,132 | ||||||||
Note payable to non-controlling interest member of Agrinatural. | 300,000 | 300,000 | ||||||||
Corn oil recovery system note payable | 263,488 | 640,653 | ||||||||
Subordinated Convertible Debt - see terms above. | — | 4,143,000 | ||||||||
Total debt | 10,728,359 | 36,472,763 | ||||||||
Less: Current Maturities | (955,752 | ) | (3,490,808 | ) | ||||||
Total Long-Term Debt | $ | 9,772,607 | $ | 32,981,955 | ||||||
LongTerm_Debt_Long_Term_Debt_T
Long-Term Debt Long Term Debt (Tables) | 9 Months Ended | |||||||||
Jul. 31, 2014 | ||||||||||
Statement of Financial Position [Abstract] | ' | |||||||||
Schedule of Long-term Debt Instruments [Table Text Block] | ' | |||||||||
ng-term debt consists of the following: | ||||||||||
July 31, | 31-Oct-13 | |||||||||
2014 | ||||||||||
Granite Falls Energy: | (unaudited) | |||||||||
Capital One Shuttlewagon Railcar Mover. This note was paid in full January 2014. | $ | — | $ | 382,918 | ||||||
Revolving Term Loan - see terms above | — | 2,513,674 | ||||||||
Heron Lake BioEnergy: | ||||||||||
Term note payable to lending institution - see terms above | — | 18,317,800 | ||||||||
Revolving term note payable to lending institution - see terms above | 7,486,628 | 6,263,158 | ||||||||
Assessments payable | 2,440,743 | 2,604,678 | ||||||||
Note payable to electrical company | 237,500 | 293,750 | ||||||||
Note payable on pipeline assets (Agrinatural) | — | 1,013,132 | ||||||||
Note payable to non-controlling interest member of Agrinatural. | 300,000 | 300,000 | ||||||||
Corn oil recovery system note payable | 263,488 | 640,653 | ||||||||
Subordinated Convertible Debt - see terms above. | — | 4,143,000 | ||||||||
Total debt | 10,728,359 | 36,472,763 | ||||||||
Less: Current Maturities | (955,752 | ) | (3,490,808 | ) | ||||||
Total Long-Term Debt | $ | 9,772,607 | $ | 32,981,955 | ||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies narrative (Details) | 9 Months Ended |
Jul. 31, 2014 | |
gal | |
Plant production capacity | 60,000,000 |
Production (Actual) | 70,000,000 |
Measurement, Rolling Twelve Months | 'twelve |
Heron Lake Bioenergy [Member] | ' |
Noncontrolling Interest, Ownership Percentage by Parent | 50.60% |
Plant production capacity | 50,000,000 |
Production (Actual) | 59,200,000 |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 49.40% |
Agrinatural, LLC [Member] | ' |
Noncontrolling Interest, Ownership Percentage by Parent | 73.00% |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 27.00% |
Risks_and_Uncertainties_Detail
Risks and Uncertainties (Details) | 9 Months Ended |
Jul. 31, 2014 | |
Risks and Uncertainties [Abstract] | ' |
Risks and Uncertainties [Text Block] | ' |
RISKS AND UNCERTAINTIES | |
The Company has certain risks and uncertainties that it experiences during volatile market conditions. These volatilities can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol, distillers grains, and corn oil to customers primarily located in the United States. Corn for the production process is supplied to our plant primarily from local agricultural producers and from purchases on the open market. Ethanol sales typically average 80 - 85% of total revenues and corn costs typically average 70 - 80% of cost of goods sold. | |
The Company's operating and financial performance is largely driven by the prices at which they sell ethanol and the net expense of corn. The price of ethanol is influenced by factors such as supply and demand, the weather, government policies and programs, and unleaded gasoline prices and the petroleum markets as a whole. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. Our largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, the weather, government policies and programs, and our risk management program used to protect against the price volatility of these commodities. | |
Minimum [Member] | ' |
Concentration Risk [Line Items] | ' |
Percent of Cost of Goods Sold | 70.00% |
Minimum [Member] | Ethanol Contracts [Member] | ' |
Concentration Risk [Line Items] | ' |
Sales Revenue, Goods, Net | 80.00% |
Maximum [Member] | ' |
Concentration Risk [Line Items] | ' |
Percent of Cost of Goods Sold | 80.00% |
Maximum [Member] | Ethanol Contracts [Member] | ' |
Concentration Risk [Line Items] | ' |
Sales Revenue, Goods, Net | 85.00% |
Inventory_Details_Details
Inventory Details (Details) (USD $) | Jul. 31, 2014 | Oct. 31, 2013 |
Inventory [Abstract] | ' | ' |
Raw materials | $3,497,925 | $4,652,465 |
Spare parts | 2,223,459 | 1,636,466 |
Work in process | 1,358,852 | 1,643,574 |
Finished goods | 4,133,963 | 4,437,772 |
Inventory, Net | $11,214,199 | $12,370,277 |
Derivative_Instruments_Details
Derivative Instruments (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | Apr. 30, 2014 | Oct. 31, 2013 | |
bu | bu | bu | ||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative, Gain (Loss) on Derivative, Net | ($1,549,100) | $343,320 | $53,453 | $369,902 | ' | ' |
Outstanding corn derivative instrument | 5,450,000 | ' | 5,450,000 | ' | ' | 1,125,000 |
Derivative Assets, Current | 0 | ' | 0 | ' | ' | 0 |
Commodity derivative instruments | 741,087 | ' | 741,087 | ' | 741,087 | 75,113 |
Corn Contracts [Member] | ' | ' | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative, Gain (Loss) on Derivative, Net | -1,549,100 | 343,320 | 53,453 | 369,902 | ' | ' |
Granite Falls Energy, LLC [Member] | Corn Contracts [Member] | ' | ' | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative Assets, Current | 0 | ' | 0 | ' | ' | 0 |
Commodity derivative instruments | -655,600 | ' | -655,600 | ' | ' | 75,113 |
Heron Lake BioEnergy, LLC [Member] | Corn Contracts [Member] | ' | ' | ' | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' | ' | ' | ' |
Derivative Assets, Current | 0 | ' | 0 | ' | ' | ' |
Commodity derivative instruments | $85,487 | ' | $85,487 | ' | ' | ' |
FAIR_VALUE_Details
FAIR VALUE (Details) (USD $) | Jul. 31, 2014 | Oct. 31, 2013 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative Liability, Fair Value, Gross Liability | $741,087 | $75,113 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative Liability, Fair Value, Gross Liability | 741,087 | 75,113 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative Liability, Fair Value, Gross Liability | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative Liability, Fair Value, Gross Liability | $0 | $0 |
Revolving_Line_of_Credit_Detai
Revolving Line of Credit (Details) (USD $) | Jul. 31, 2014 | Jul. 31, 2014 | Jul. 31, 2013 | Oct. 31, 2013 | Jul. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Jul. 31, 2014 | Jul. 31, 2014 |
Revolving Operating Loan [Member] | Revolving Operating Loan [Member] | Revolving Operating Loan [Member] | Revolving Term Loan [Member] | Revolving Term Loan [Member] | Savings Account Balance Requirement [Member] | Savings Account Balance Requirement [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Agrinatural, LLC [Member] | Rail Cars [Member] | Rail Cars [Member] | ||
Granite Falls Energy, LLC [Member] | Granite Falls Energy, LLC [Member] | Granite Falls Energy, LLC [Member] | Granite Falls Energy, LLC [Member] | Granite Falls Energy, LLC [Member] | Granite Falls Energy, LLC [Member] | Granite Falls Energy, LLC [Member] | Fixed Term Note [Member] | Revolving Term Loan [Member] | Revolving Term Loan [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | |||
AgStar [Member] | AgStar [Member] | AgStar [Member] | ||||||||||||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Letters of Credit Outstanding, Amount | $288,928 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7,500,000 | $759,000 | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 28,000,000 | ' | ' | ' |
Debt Instrument, Interest Rate During Period | ' | 3.05% | 3.21% | 3.21% | 3.21% | 3.21% | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Redemption Price, Percentage | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' |
Operating Leases, Rent Expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 503,000 | 1,327,000 |
Debt Instrument, Periodic Payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | $223,000 | ' | ' | ' | ' |
Debt Instrument, Covenant Description | ' | ' | ' | ' | ' | ' | '0 | '0 | ' | ' | ' | ' | ' | ' |
Revolving_Line_of_Credit_Line_
Revolving Line of Credit Line of Credit (Details) (USD $) | 9 Months Ended | 1 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||
Jul. 31, 2014 | Apr. 30, 2014 | Oct. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2014 | Oct. 31, 2013 | Sep. 30, 2013 | Jul. 31, 2014 | Jul. 01, 2014 | Oct. 31, 2013 | 17-May-13 | Jul. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2014 | Oct. 31, 2013 | Apr. 30, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jul. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2014 | Oct. 31, 2013 | Jul. 31, 2014 | Oct. 31, 2013 | |
Revolving Operating Loan [Member] | Revolving Term Loan [Member] | Revolving Term Loan [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Agrinatural, LLC [Member] | Agrinatural, LLC [Member] | AgStar [Member] | AgStar [Member] | AgStar [Member] | AgStar [Member] | Federated Electric [Member] | Federated Electric [Member] | SRS [Member] | SRS [Member] | Granite Falls Energy, LLC [Member] | Granite Falls Energy, LLC [Member] | Granite Falls Energy, LLC [Member] | Granite Falls Energy, LLC [Member] | Heron Lake Bioenergy [Member] | Savings Account Balance Requirement [Member] | Savings Account Balance Requirement [Member] | Interest Rate, 6.55% [Member] | Interest Rate, 6.55% [Member] | ||||
Revolving Operating Loan [Member] | Revolving Operating Loan [Member] | Revolving Term Loan [Member] | Revolving Term Loan [Member] | Corn Oil Separation Equipment Loan [Member] | Corn Oil Separation Equipment Loan [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Agrinatural, LLC [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | Shuttlewagon Railcar Mover [Member] | Shuttlewagon Railcar Mover [Member] | Revolving Term Loan [Member] | Revolving Term Loan [Member] | Convertible Subordinated Debt [Member] | Granite Falls Energy, LLC [Member] | Granite Falls Energy, LLC [Member] | City/County Juristiction [Member] | City/County Juristiction [Member] | ||||||||||||||
Revolving Term Loan [Member] | Fixed Term Note [Member] | Fixed Term Note [Member] | Revolving Term Loan [Member] | Heron Lake Bioenergy [Member] | Heron Lake Bioenergy [Member] | |||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Covenant Description | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '0 | '0 | ' | ' |
Line of Credit Facility, Amount Outstanding | ' | ' | ' | ' | $0 | $2,513,674 | ' | ' | ' | ' | ' | $0 | $18,317,800 | $7,486,628 | $6,263,158 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | $382,918 | $0 | $2,513,674 | ' | ' | ' | ' | ' |
Convertible Subordinated Debt | ' | ' | ' | ' | ' | ' | 3,700,000 | 0 | 4,143,000 | 4,143,000 | 1,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Subordinated Borrowing, Interest Rate | ' | ' | ' | ' | ' | ' | ' | 7.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt | 10,728,359 | ' | 36,472,763 | 5,600,000 | 18,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 263,488 | 640,653 | 300,000 | 300,000 | ' | ' | ' | ' | 237,500 | 293,750 | 0 | 1,013,132 | ' | ' | ' | ' | ' | ' | ' | 2,440,743 | 2,604,678 |
Long-term Debt, Current Maturities | -955,752 | -955,752 | -3,490,808 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-Term Debt, less current portion | 9,772,607 | 9,772,607 | 32,981,955 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Future Reduction, Amount | 2,000,000 | ' | ' | ' | ' | ' | ' | 3,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum | ' | ' | ' | ' | ' | ' | ' | 3.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Interest Rate Description | '"One Month LIBOR Index Rate," plus 2.8% and 3.05% | ' | ' | ' | ' | ' | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Letters of Credit Outstanding, Amount | 288,928 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,500,000 | ' | ' | 759,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.29% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
debt instrument, redemption amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 207,000 | ' | ' | ' | ' |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | ' | ' | ' | ' | ' | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Remaining Borrowing Capacity | ' | ' | ' | 5,711,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Amortization Period | ' | ' | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of Debt Discount (Premium) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 281,000 | 1,070,355 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Maximum Borrowing Capacity, Superseded | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18,500,000 | 17,400,000 | 17,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Conversion Price | ' | ' | ' | ' | ' | ' | ' | $0.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Amount | ' | ' | ' | ' | ' | ' | $934,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $3,936,000 | ' | ' | ' | ' |
Debt Conversion, Converted Instrument, Shares Issued | ' | ' | ' | ' | ' | ' | 3,115,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,120,000 | ' | ' | ' | ' |
LongTerm_Debt_capital_lease_De
Long-Term Debt capital lease (Details) (Granite Falls Energy, LLC [Member]) | 9 Months Ended | 12 Months Ended | |
Jul. 31, 2014 | Jul. 31, 2013 | Oct. 31, 2013 | |
Revolving Operating Loan [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt Instrument, Interest Rate During Period | 3.05% | 3.21% | 3.21% |
Revolving Term Loan [Member] | ' | ' | ' |
Debt Instrument [Line Items] | ' | ' | ' |
Debt Instrument, Interest Rate During Period | 3.21% | ' | 3.21% |
Leases_Details
Leases (Details) (Rail Cars [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2014 | Jul. 31, 2013 | Jul. 31, 2014 | Jul. 31, 2013 | |
Granite Falls Energy, LLC [Member] | ' | ' | ' | ' |
Operating Leases, Rent Expense | $558,000 | $500,500 | $1,647,000 | $1,490,000 |
Heron Lake Bioenergy [Member] | ' | ' | ' | ' |
Operating Leases, Rent Expense | $503,000 | ' | $1,327,000 | ' |
Members_Equity_Details
Members' Equity (Details) (USD $) | 9 Months Ended | |
Jul. 31, 2014 | Oct. 31, 2013 | |
Class of Stock [Line Items] | ' | ' |
Limited Partners' Capital Account, Units Outstanding | 30,606 | 30,606 |
Distribution Made to Limited Partner, Distributions Declared, Per Unit | $180 | ' |
Distribution Made to Limited Partner, Cash Distributions Declared | $5,509,080 | ' |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | 9 Months Ended |
Jul. 31, 2014 | |
Distillers Grains [Member] | ' |
Future Commitment, Dollar | $2,293,000 |
Revenue Concentration, Future Commitment | 23.00% |
Granite Falls Energy, LLC [Member] | Ethanol Contracts [Member] | ' |
Future Commitment, Dollar | 12,710,000 |
Revenue Concentration, Future Commitment | 17.00% |
Heron Lake Bioenergy [Member] | Ethanol Contracts [Member] | ' |
Future Commitment, Dollar | 12,812,000 |
Revenue Concentration, Future Commitment | 19.00% |
Heron Lake Bioenergy [Member] | Distillers Grains [Member] | ' |
Future Commitment, Dollar | 2,042,000 |
Revenue Concentration, Future Commitment | 15.00% |
Natural Gas [Member] | Heron Lake Bioenergy [Member] | ' |
Purchase Commitment, Remaining Minimum Amount Committed | 1,600,000 |
FCE [Member] | Granite Falls Energy, LLC [Member] | Corn Contracts [Member] | ' |
Inventory, Outside storage | 550,000 |
Inventory Dollars, Outside Storage | $2,346,000 |
Other Companies [Member] | Granite Falls Energy, LLC [Member] | Corn Contracts [Member] | ' |
Future Commitment | 0 |
Other Companies [Member] | Heron Lake Bioenergy [Member] | Corn Contracts [Member] | ' |
Future Commitment | 2,898,000 |