Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 31, 2018 | Sep. 14, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Granite Falls Energy, LLC | |
Entity Central Index Key | 1,181,749 | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 30,606 | |
Entity Current Reporting Status | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jul. 31, 2018 | Oct. 31, 2017 |
Current Assets | ||
Cash | $ 15,405,720 | $ 21,658,422 |
Restricted cash | 132,914 | 75,189 |
Accounts receivable | 2,640,142 | 7,622,601 |
Inventory | 15,619,526 | 15,241,092 |
Commodity derivative instruments | 554,627 | 244,294 |
Prepaid expenses and other current assets | 615,569 | 361,340 |
Total current assets | 34,968,498 | 45,202,938 |
Property, Plant and Equipment | ||
Property and Equipment, net | 68,241,215 | 72,271,013 |
Goodwill | 1,372,473 | 1,372,473 |
Investments | 9,500,000 | 7,500,000 |
Other Assets | 714,495 | 743,106 |
Total Assets | 114,796,681 | 127,089,530 |
Current Liabilities | ||
Current maturities of long-term debt | 322,048 | 432,183 |
Accounts payable | 5,880,156 | 7,535,468 |
Commodity derivative instruments | 70,392 | 40,379 |
Accrued expenses | 859,686 | 972,043 |
Total current liabilities | 7,132,282 | 8,980,073 |
Long-Term Debt, less current portion | 8,295,555 | 8,465,502 |
Commitments and Contingencies | ||
Members' equity attributable to Granite Falls Energy, LLC consists of 30,606 units authorized, issued, and outstanding at both July 31, 2018 and October 31, 2017 | 76,771,028 | 83,998,672 |
Non-controlling interest | 22,597,816 | 25,645,283 |
Total members' equity | 99,368,844 | 109,643,955 |
Total Liabilities and Members’ Equity | $ 114,796,681 | $ 127,089,530 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - shares | Jul. 31, 2018 | Oct. 31, 2017 |
Condensed Consolidated Balance Sheets | ||
Common Units Authorized | 30,606 | 30,606 |
Common Units Issued | 30,606 | 30,606 |
Common Units Outstanding | 30,606 | 30,606 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Condensed Consolidated Statements of Operations | ||||
Revenues | $ 53,220,620 | $ 54,250,994 | $ 161,764,393 | $ 161,629,116 |
Cost of Goods Sold | 49,527,078 | 50,047,853 | 151,250,420 | 146,624,568 |
Gross Profit | 3,693,542 | 4,203,141 | 10,513,973 | 15,004,548 |
Operating Expenses | 1,458,554 | 1,463,014 | 4,786,700 | 4,654,769 |
Operating Income | 2,234,988 | 2,740,127 | 5,727,273 | 10,349,779 |
Other Income (Expense): | ||||
Other income, net | 2,284 | 51,660 | 333,664 | 462,533 |
Interest income | 44,621 | 16,730 | 114,474 | 23,614 |
Interest expense | (151,742) | (86,688) | (360,228) | (162,295) |
Total other income (expense), net | (104,837) | (18,298) | 87,910 | 323,852 |
Net Income | 2,130,151 | 2,721,829 | 5,815,183 | 10,673,631 |
Less: Net Income Attributable to Non-controlling Interest | (127,900) | (672,208) | (1,263,725) | (2,616,744) |
Net Income Attributable to Granite Falls Energy, LLC | $ 2,002,251 | $ 2,049,621 | $ 4,551,458 | $ 8,056,887 |
Weighted Average Units Outstanding - Basic and Diluted (in units) | 30,606 | 30,606 | 30,606 | 30,606 |
Net Income Per Unit - Basic and Diluted (in dollars per unit) | $ 65.42 | $ 66.97 | $ 148.71 | $ 263.25 |
Distributions Per Unit (in dollars per unit) | $ 385 | $ 365 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Jul. 31, 2018 | Jul. 31, 2017 | |
Cash Flows from Operating Activities: | ||
Net income | $ 5,815,183 | $ 10,673,631 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Depreciation and amortization | 6,901,354 | 7,094,707 |
Change in fair value of commodity derivative instruments | (673,356) | (461,723) |
Gain on sale of assets | (24,815) | (95,300) |
Changes in operating assets and liabilities: | ||
Restricted cash | (57,725) | (144,345) |
Commodity derivative instruments | 393,036 | 1,379,267 |
Accounts receivable | 4,982,459 | 4,467,030 |
Inventory | (378,434) | 5,442,490 |
Prepaid expenses and other current assets | (254,229) | (239,726) |
Accounts payable | (2,689,205) | (5,299,721) |
Accrued expenses | (112,357) | (452,731) |
Net Cash Provided by Operating Activities | 13,901,911 | 22,363,579 |
Cash Flows from Investing Activities: | ||
Purchase of investment | (2,000,000) | (750,000) |
Payments for capital expenditures | (1,809,052) | (1,721,541) |
Proceeds from disposal of assets | 24,815 | 95,300 |
Net Cash Used in Investing Activities | (3,784,237) | (2,376,241) |
Cash Flows from Financing Activities: | ||
Payments on long-term debt | (280,082) | (324,994) |
Checks drawn in excess of bank balance | (1,866,683) | |
Purchase of subsidiary units attributable to non-controlling interest | (46,644) | |
Distributions to non-controlling interests | (4,311,192) | |
Member distributions paid | (11,779,102) | (11,171,190) |
Net Cash Used in Financing Activities | (16,370,376) | (13,409,511) |
Net Increase (Decrease) in Cash | (6,252,702) | 6,577,827 |
Cash - Beginning of Period | 21,658,422 | 13,797,857 |
Cash - End of Period | 15,405,720 | 20,375,684 |
Cash paid during the period for: | ||
Interest expense | 360,228 | 162,295 |
Supplemental Disclosure of Noncash Investing and Financing Activities | ||
Capital expenditures and construction in process included in accounts payable | $ 1,249,128 | $ 88,534 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jul. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Granite Falls Energy, LLC (“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 and on the international market. 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. Additionally, GFE owns a majority interest in Heron Lake BioEnergy, LLC (“HLBE”). 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 60 million gallons, but is permitted to produce approximately 72.3 million gallons of undenatured ethanol on a twelve month rolling sum basis. HLBE owns a majority interest in Agrinatural Gas, LLC (“Agrinatural”), which operates a natural gas pipeline that provides natural gas to HLBE's ethanol production facility and other customers. All references to “we”, “us”, “our”, and the “Company” collectively refer to GFE and its wholly-owned and majority-owned subsidiaries. Basis of Presentation and Principles of Consolidation The condensed consolidated unaudited financial statements as of July 31, 2018 consolidate the operating results and financial position of GFE, and its approximately 50.7% owned subsidiary, HLBE (through GFE's 100% ownership of Project Viking, LLC). Given the Company’s control over the operations of HLBE and its majority voting interest, the Company consolidates the condensed consolidated unaudited financial statements of HLBE with GFE's condensed consolidated unaudited financial statements. The remaining 49.3% ownership of HLBE is included in the condensed consolidated unaudited financial statements as a non-controlling interest. HLBE, through its wholly owned subsidiary, HLBE Pipeline Company, LLC, owns approximately 73% of 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 unaudited financial statements, with the equity and earnings attributed to the remaining approximately 27% noncontrolling interest. All significant intercompany balances and transactions are eliminated in consolidation. The accompanying condensed consolidated unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company’s audited consolidated financial statements for the year ended October 31, 2017, contained in the Company’s annual report on Form 10-K. In the opinion of management, the condensed consolidated unaudited financial statements reflect all adjustments consisting of normal recurring accruals that we consider necessary to present fairly the Company’s results of operations, financial position and cash flows. The results reported in these condensed consolidated unaudited financial statements should not be regarded as necessarily indicative of results that may be expected for any other fiscal period or for the fiscal year. Reportable Operating Segments Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” establishes the standards for reporting information about segments in financial statements. Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Therefore, in applying the criteria set forth in ASC 280, the Company determined that based on the nature of the products and production process and the expected financial results, the Company’s operations at GFE’s ethanol plant and HLBE’s plant, including the production and sale of ethanol and its co-products, are aggregated into one reporting segment. Additionally, the Company also realizes relatively immaterial revenue from natural gas pipeline operations at Agrinatural, HLBE’s majority owned subsidiary. Before and after accounting for intercompany eliminations, these revenues from Agrinatural’s represent less than less than 1% of our consolidated revenues and have little to no impact on the overall performance of the Company. Therefore, the Company does not separately review Agrinatural’s revenues, cost of sales or other operating performance information. Rather, the Company reviews Agrinatural’s natural gas pipeline financial data on a consolidated basis with the Company’s ethanol production operating segment. The Company believes that the presentation of separate operating performance information for Agrinatural’s natural gas pipeline operations would not provide meaningful information to a reader of the Company’s consolidated financial statements and would not achieve the basic principles and objectives of ASC 280. Accounting Estimates Management uses estimates and assumptions in preparing these condensed consolidated unaudited 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 and equipment, valuation of commodity derivatives, inventory, inventory purchase and sale commitments, evaluation of railcar damages contingency, and the assumptions used in the impairment analysis of long-lived assets, which includes goodwill. Actual results may differ from previously estimated amounts, and such differences may be material to our condensed consolidated unaudited 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. Agrinatural recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee for the arrangement is fixed or determinable and collectability is reasonably assured. Inventory Inventory is stated at the lower of cost or net realizable value. Cost for all inventories is determined using the first in first out method (“FIFO”). Net realizable value is the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. Inventory consists of raw materials, work in process, finished goods, and spare parts. Corn is the primary raw material along with other raw materials. Finished goods consist of ethanol, distillers' grains, and corn oil. 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 unaudited 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. Investments On November 1, 2016, GFE subscribed to purchase 1,500 capital units of Ringneck Energy & Feed, LLC (“Ringneck”) at a price of $5,000 per unit for a total of $7,500,000. Ringneck is a South Dakota limited liability company that is currently constructing an 80 million gallon per year ethanol manufacturing plant in outside of Onida, South Dakota in Sully County. GFE’s investment is sufficient to secure the Company the right to appoint one director to the board of directors of Ringneck. GFE has appointed Steve Christensen, its CEO, to serve as its appointed director. GFE paid a down payment of $750,000 in connection with the subscription, and signed a promissory note for $6,750,000 for the remaining balance of the subscription. On August 2, 2017, following notice from Ringneck accepting GFE’s subscription and that payment of the balance of GFE’s subscription and promissory note was due, GFE borrowed $7.5 million under its credit facility with Project Hawkeye, LLC (“Project Hawkeye”) and paid $6,750,000 to Ringneck as payment for the remaining balance of GFE’s subscription. Project Hawkeye is an affiliate of Fagen, Inc., which is a member of GFE. See Note 6 below for the terms of GFE’s credit facility with Project Hawkeye. On June 29, 2018, GFE executed a subscription agreement for investment in Harvestone Group, LLC (“Harvestone”), a Delaware limited liability company, and a Joinder to the Operating Agreement of Harvestone. In connection with the execution of the subscription agreement and joinder, GFE made a capital contribution of $2.0 million in exchange for twenty (20) preferred membership units and was sufficient to secure GFE the right to appoint one advisor to the advisory committee to the managers of Harvestone. GFE has appointed Eric Baukol, its Risk Manager, to serve as its appointed advisor. Harvestone is a start-up ethanol marketing, logistics, and trading company headquartered in Franklin, Tennessee. Harvestone is owned by several other ethanol producers and other private investors that expects that its primary business will be marketing and trading for member and non-member ethanol producers. The investments are accounted for by the equity method, under which the Company’s share of the net income of the investee is recognized as income in the Company’s Condensed Consolidated Statements of Operations and added to the investment account, and distributions received from the affiliates are treated as a reduction of the investment. |
RISKS AND UNCERTAINTIES
RISKS AND UNCERTAINTIES | 9 Months Ended |
Jul. 31, 2018 | |
RISKS AND UNCERTAINTIES | |
RISKS AND UNCERTAINTIES | 2. 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, corn oil, and natural gas 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 75% - 90% of total revenues and corn costs typically average 65% - 85% 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. The Company’s 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 a risk management program used to protect against the price volatility of these commodities. Market fluctuations in the price of and demand for these products may have a significant adverse effect on the Company’s operations, profitability and the availability and adequacy of cash flow to meet the Company’s working capital requirements. |
INVENTORY
INVENTORY | 9 Months Ended |
Jul. 31, 2018 | |
INVENTORY | |
INVENTORY | 3. INVENTORY Inventories consist of the following: July 31, 2018 October 31, 2017 (unaudited) Raw materials $ 4,121,644 $ 4,488,923 Supplies 2,961,224 2,929,385 Work in process 1,327,777 1,281,292 Finished goods 7,208,881 6,541,492 Totals $ 15,619,526 $ 15,241,092 The Company performs a lower of cost or net realizable value analysis on inventory to determine if the net realizable 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 net realizable value analysis, as a component of cost of goods sold, the Company recorded a loss on ethanol inventories, as a component of cost of goods sold, of approximately $420,000 and $65,000 for the nine months ended July 31, 2018 and 2017, respectively. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 9 Months Ended |
Jul. 31, 2018 | |
DERIVATIVE INSTRUMENTS | |
DERIVATIVE INSTRUMENTS | 4. DERIVATIVE INSTRUMENTS As of July 31, 2018, the total notional amount of GFE’s outstanding corn derivative instruments was approximately 5,725,000 bushels, comprised of long corn positions on 190,000 bushels that were entered into to hedge forecasted ethanol sales through September 2018, and short corn positions on 5,535,000 bushels that were entered into to hedge forecasted corn purchases through December 2021. 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. As of July 31, 2018, the total notional amount of HLBE’s outstanding corn derivative instruments was approximately 4,125,000 bushels, comprised of short corn positions that were entered into to hedge forecasted corn purchases through December 2019. There may be offsetting positions that are not shown on a net basis that could lower the notional amount of positions outstanding. As of July 31, 2018, GFE had approximately $109,000 of cash collateral (restricted cash) related to derivatives held by a broker and approximately $0 due to broker related to derivatives held by a broker, recorded as a component of accounts payable. As of July 31, 2018, HLBE had approximately $24,000 of cash collateral (restricted cash) related to derivatives held by a broker and approximately $0 due to broker related to derivatives held by a broker, recorded as a component of accounts payable. The following tables provide details regarding the Company's derivative instruments at July 31, 2018, none of which were designated as hedging instruments: Consolidated Balance Sheet Location Assets Liabilities Corn contracts - GFE Commodity derivative instruments $ 268,026 $ 35,196 Corn contracts - HLBE Commodity derivative instruments 286,601 35,196 Totals $ 554,627 $ 70,392 As of October 31, 2017, the total notional amount of GFE’s outstanding corn derivative instruments was approximately 1,495,000 bushels, comprised of long corn positions on 200,000 bushels that were entered into to hedge forecasted ethanol sales through December 2017, and short corn positions on 1,295,000 bushels that were entered into to hedge forecasted corn purchases through December 2018. There may be offsetting positions that are not shown on a net basis that could lower the notional amount of positions outstanding. As of October 31, 2017, the total notional amount of GFE’s outstanding ethanol derivative instruments was approximately 420,000 gallons that were entered into to hedge forecasted ethanol sales through November 2017. As of October 31, 2017, GFE had approximately $75,000 cash collateral (restricted cash) and approximately $12,000 due to broker related to derivatives held by a broker, recorded as a component of accounts payable. As of October 31, 2017, the total notional amount of HLBE’s outstanding corn derivative instruments was approximately 1,120,000 bushels, comprised of long corn positions on 215,000 bushels that were entered into to hedge forecasted ethanol sales through December 2017, and short corn positions on 905,000 bushels that were entered into to hedge forecasted corn purchases through July 2018. There may be offsetting positions that are not shown on a net basis that could lower the notional amount of positions outstanding. As of October 31, 2017, HLBE had outstanding natural gas derivative instruments totaling 120,000 MMBTU entered into hedge forecasted natural gas purchases through February 2018. As of October 31, 2017, the total notional amount of HLBE’s outstanding ethanol derivative instruments was approximately 420,000 gallons that were entered into to hedge forecasted ethanol sales through November 2017. As of October 31, 2017, HLBE did not have any cash collateral (restricted cash) and approximately $12,000 due to broker related to derivatives held by a broker, recorded as a component of accounts payable. The following tables provide details regarding the Company's derivative instruments at October 31, 2017, none of which were designated as hedging instruments: Consolidated Balance Sheet Location Assets Liabilities Corn contracts - GFE Commodity derivative instruments $ 102,650 $ — Corn contracts - HLBE Commodity derivative instruments 141,644 — Ethanol contracts - GFE Commodity derivative instruments — 12,749 Ethanol contracts - HLBE Commodity derivative instruments — 12,249 Natural gas contracts - HLBE Commodity derivative instruments — 15,381 Totals $ 244,294 $ 40,379 The following tables provide details regarding the gains (losses) from Company's derivative instruments in statements of operations, none of which are designated as hedging instruments: Consolidated Statement Three Months Ended July 31, Nine Months Ended July 31, of Operations Location 2018 2017 2018 2017 Corn contracts Cost of Goods Sold $ 1,778,570 $ 287,865 $ 566,959 $ 857,218 Ethanol contracts Revenues (286,125) (122,765) 107,995 (395,495) Natural gas contracts Cost of Goods Sold — — (1,598) — Total gain $ 1,492,445 $ 165,100 $ 673,356 $ 461,723 |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Jul. 31, 2018 | |
FAIR VALUE | |
FAIR VALUE | 5. FAIR VALUE The following table sets forth, by level, the Company assets and liabilities that were accounted for at fair value on a recurring basis at July 31, 2018: Fair Value Measurement Using Quoted Prices Significant Other Significant Carrying Amount in in Active Markets Observable Inputs Unobservable Inputs Financial Asset: Consolidated Balance Sheet Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative Instruments - Corn $ 554,627 $ 554,627 $ 554,627 $ — $ — Financial Liabilities: Commodity Derivative Instruments - Corn $ 70,392 $ 70,392 $ — $ 70,392 $ — The following table sets forth, by level, the Company assets and liabilities that were accounted for at fair value on a recurring basis at October 31, 2017: Fair Value Measurement Using Quoted Prices Significant Other Significant Carrying Amount in in Active Markets Observable Inputs Unobservable Inputs Financial Asset: Consolidated Balance Sheet Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative Instruments - Corn $ 244,294 $ 244,294 $ 244,294 $ — $ — Financial Liabilities: Commodity Derivative Instruments - Ethanol $ 24,998 $ 24,998 $ 36,500 $ (11,502) $ — Commodity Derivative Instruments - Natural Gas $ 15,381 $ 15,381 $ — $ 15,381 $ — 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. We determine the fair value of ethanol, corn, and natural gas Level 2 instruments by model-based techniques in which all significant inputs are observable in the markets noted above. |
DEBT FACILITIES
DEBT FACILITIES | 9 Months Ended |
Jul. 31, 2018 | |
DEBT FACILITIES | |
DEBT FACILITIES | 6. DEBT FACILITIES Debt financing consists of the following: July 31, 2018 October 31, 2017 (unaudited) GRANITE FALLS ENERGY: Seasonal loan, see terms below. $ — $ — Term note payable to Project Hawkeye, see terms below. 7,500,000 7,500,000 HERON LAKE BIOENERGY: Amended revolving term loan, see terms below. — — Seasonal loan, see terms below. — — Assessment payable as part of water treatment agreement, due in semi-annual installments of $189,393 with interest at 6.55%, enforceable by statutory lien, with the final payment due in 2021. HLBE made deposits for one years' worth of debt service payments of approximately $364,000, which is included with other assets that are held on deposit to be applied with the final payments of the assessment. 1,094,236 1,241,171 Assessment payable as part of water supply agreement, due in monthly installments of $3,942 with interest at 8.73%, enforceable by statutory lien, with the final payment due in 2019. 23,367 56,514 Note payable to non-controlling interest member of Agrinatural. Interest is at One Month LIBOR plus 4.0%, which was approximately 5.24% at October 31, 2017. The note was paid in full in January 2018. — 100,000 Totals 8,617,603 8,897,685 Less: amounts due within one year 322,048 432,183 Net long-term debt $ 8,295,555 $ 8,465,502 Granite Falls Energy Seasonal Revolving Loan GFE has a credit facility with a lender that includes a seasonal revolving loan, under which GFE may borrow, repay, and re-borrow up to the aggregate principal commitment of $6,000,000 until maturity. The seasonal revolving loan matures on October 1, 2018 unless a later date is agreed to by the administrative agent for the facility. There was no outstanding balance on the seasonal revolving loan at July 31, 2018 and October 31, 2017. Therefore, the aggregate principal amount available for borrowing by GFE under this seasonal revolving loan at July 31, 2018 and October 31, 2017 was $6,000,000. The interest rate on the seasonal revolving loan is based on the bank's One Month London Interbank Offered Rate (“LIBOR”) Index Rate, plus 2.75%, which equated to 4.83% and 3.99% at July 31, 2018 and October 31, 2017, respectively. The credit facility also requires GFE to comply with certain financial covenants, at various times calculated monthly, quarterly, or annually, including maintenance of certain financial ratios including minimum working capital, a debt service coverage ratio as defined by the credit facility, as well as a restriction of the payment of distributions. Failure to comply with the protective loan covenants or maintain the required financial ratios may cause acceleration of the outstanding principal balances on the revolving term loan and/or the imposition of fees, charges or penalties. The credit facility is secured by substantially all assets of GFE. There are no savings account balance collateral requirements as part of this credit facility. Project Hawkeye Loan On August 2, 2017, GFE entered into a credit facility with Project Hawkeye to finance its investment in Ringneck. Pursuant to this credit facility, GFE borrowed $7.5 million from Project Hawkeye using the Ringneck investment as collateral. The Project Hawkeye loan bears interest from date funds are first advanced on the loan through maturity, at a rate per annum equal to the sum of the One Month LIBOR Index Rate plus 3.05% per annum, with an interest rate floor of 3.55%, which equated to 5.13% and 4.29% at July 31, 2018 and October 31, 2017 respectively. The Project Hawkeye loan requires annual interest payments only for the first two years of the loan and monthly principal and interest payments for years three through nine based on a seven-year amortization period. The monthly amortized payments will be re-amortized following any change in interest rate. The entire outstanding principal balance of the loan, plus any accrued and unpaid interest thereon, is due and payable in full on August 2, 2026. GFE is permitted to voluntarily prepay all or any portion of the outstanding balance of this loan at any time without premium or penalty. Pursuant to a pledge agreement entered into in connection with the Project Hawkeye loan, GFE’s obligations are secured by all of its right, title, and interest in its investment in Ringneck, including the 1,500 units subscribed for by GFE. The loan is non-recourse to all of GFE’s other assets, meaning that in the event of default, the only remedy available to Project Hawkeye will be to foreclose and seize all of GFE’s right, title and interest in its investment in Ringneck. Heron Lake BioEnergy Revolving Term Loan HLBE had a revolving term note payable with a lender under which HLBE could borrow, repay and re-borrow in an amount up to the original aggregate principal commitment at any time prior to maturity at March 1, 2022. The original aggregate principal commitment was $28,000,000, which reduced by $3,500,000 annually, starting March 1, 2015 and continuing each anniversary thereafter until maturity. In December 2017, HLBE and its lender orally agreed to reduce the aggregate principal commitment of the revolving term loan to $8,000,000. On April 6, 2018, HLBE finalized loan agreements with an effective date of March 29, 2018 for an amended credit facility with its lender. Amended Credit Facility The amended credit facility includes an amended and restated revolving term loan with a $4,000,000 principal commitment and a revolving seasonal line of credit with a $4,000,000 principal commitment. The loans are secured by substantially all of HLBE’s assets, including a subsidiary guarantee. The amended credit facility contains customary covenants, including restrictions on the payment of dividends and loans and advances to Agrinatural, and maintenance of certain financial ratios including minimum working capital, minimum net worth and a debt service coverage ratio as defined by the credit facility. Failure to comply with the protective loan covenants or maintain the required financial ratios may cause acceleration of the outstanding principal balances on the revolving term loan and/or the imposition of fees, charges, or penalties. As part of the amended credit facility closing, HLBE entered into an amended administrative agency agreement with CoBank, ACP (“CoBank”). As a result, CoBank will continue act as the agent for the lender with respect to the amended credit facility. HLBE agreed to pay CoBank an annual fee of $2,500 for its services as administrative agent. Amended Revolving Term Loan Under the terms of the amended revolving term loan, HLBE may borrow, repay, and reborrow up to the aggregate principal commitment amount of $4,000,000. Final payment of amounts borrowed under amended revolving term loan is due December 1, 2021. Interest on the amended revolving term loan accrues at a variable weekly rate equal to 3.10% above the One-Month London Interbank Offered Rate (“LIBOR”) Index rate, which was 5.18% at July 31, 2018. HLBE also agreed to pay an unused commitment fee on the unused available portion of the amended revolving term loan commitment at the rate of 0.50% per annum, payable monthly in arrears. The loan is secured by substantially all of HLBE's assets including a subsidiary guarantee. At October 31, 2017, the aggregate principal amount available to HLBE for borrowing under the revolving term loan was $17,500,000. At July 31, 2018, the aggregate principal amount available to HLBE for borrowing under the amended revolving term loan was $4,000,000. Seasonal Revolving Loan Under the terms of the seasonal revolving loan, HLBE may borrow, repay, and reborrow up to the aggregate principal commitment amount of $4,000,000 until its maturing on February 1, 2019. Amounts borrowed under the seasonal revolving loan bear interest at a variable weekly rate equal to 2.850% above the One-Month LIBOR Index rate, which was 4.93% at July 31, 2018. The aggregate principal amount available to the Company for borrowing under the seasonal revolving loan was $4,000,000 at July 31, 2018. The Company also agreed to pay an unused commitment fee on the unused available portion of the seasonal revolving loan commitment at the rate of 0.250% per annum. Estimated annual maturities of debt at July 31, 2018, are as follows based on the most recent debt agreements: 2019 $ 322,048 2020 1,389,682 2021 1,410,526 2022 1,209,634 2023 1,071,429 Thereafter 3,214,284 Total debt $ 8,617,603 |
MEMBERS' EQUITY
MEMBERS' EQUITY | 9 Months Ended |
Jul. 31, 2018 | |
MEMBERS’ EQUITY | |
MEMBERS’ EQUITY | 7. MEMBERS' EQUITY Granite Falls Energy 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, 2018 and October 31, 2017, GFE had 30,606 membership units authorized, issued, and outstanding. In December 2017, the Board of Governors of GFE declared a cash distribution of $385 per unit or approximately $11,783,000, for unit holders of record as of December 21, 2017. The distribution was paid in January 2018. In December 2016, the Board of Governors of GFE declared a cash distribution of $365 per unit or approximately $11,171,000, for unit holders of record as of December 22, 2016. The distribution was paid in January 2017. Heron Lake BioEnergy In December 2017, the Board of Governors of HLBE declared a cash distribution of $0.11 per unit, or approximately $8,573,000, for unit holders of record as of December 21, 2017. The distribution was paid in January 2018. At December 21, 2017, GFE owned 24,475,824 Class A membership units and 15,000,000 Class B units of HLBE, and received an aggregate distribution from HLBE of approximately $4,342,000. The remaining $4,231,000 was distributed by HLBE to the non-controlling interest. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Jul. 31, 2018 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 8. COMMITMENTS AND CONTINGENCIES Corn Purchase Commitments At July 31, 2018, GFE had cash and basis contracts for forward corn contracts for approximately 6,384,000 bushels for various delivery periods through December 2021. At July 31, 2018, HLBE had cash and basis contracts for forward corn purchase commitments for approximately 4,189,000 bushels for various delivery periods through June 2019. Corn Purchases - Members GFE purchased corn from board members of approximately $1,754,000 and $0 for the three months ended July 31, 2018 and 2017, respectively, and approximately $3,839,000 and $0 for the nine months ended July 31, 2018 and 2017. HLBE purchased corn from board members of approximately $3,382,000 and $143,000 for the three months ended July 31, 2018 and 2017, respectively, and approximately $10,479,000 and $5,737,000 for the nine months ended July 31, 2018 and 2017, respectively. Of this total, approximately $0 and $607,000 was included in accounts payable at July 31, 2018 and October 31, 2017, respectively. Ethanol Contracts At July 31, 2018, GFE had fixed and basis contracts to sell approximately $11,832,000 of ethanol for various delivery periods through September 2018. At July 31, 2018, HLBE had fixed and basis contracts to sell approximately $11,716,000 of ethanol for various delivery periods through September 2018. Distillers' Grain Contracts At July 31, 2018, GFE had forward contracts to sell approximately $848,000 of distillers' grain for various delivery periods through August 2018. At July 31, 2018, HLBE had forward contracts to sell approximately $2,517,000 of distillers' grains for various delivery periods through August 2018. Corn Oil At July 31, 2018, GFE had forward contracts to sell approximately $829,000 of corn oil for various delivery periods through December 2018. At July 31, 2018, HLBE had forward contracts to sell approximately $775,000 of corn oil for various delivery periods through December 2018. Railcar Damages In accordance with certain railcar lease agreements, at expiration, the Company is required to return the railcars in good condition, less normal wear and tear. Primarily due to the ongoing maintenance and repair activities performed on its railcars, the Company has determined that no accrual for leased railcars is necessary and an estimate of the possible range of loss cannot be made. Leases In February 2018, GFE entered into a sublease arrangement for 16 railcars for the transportation of GFE’s ethanol. The sublease matures in January 2021 with minimum future lease payments of approximately $144,000 per year. |
SUMMARY OF SIGNIFICANT ACCOUN14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jul. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Business | Nature of Business Granite Falls Energy, LLC (“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 and on the international market. 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. Additionally, GFE owns a majority interest in Heron Lake BioEnergy, LLC (“HLBE”). 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 60 million gallons, but is permitted to produce approximately 72.3 million gallons of undenatured ethanol on a twelve month rolling sum basis. HLBE owns a majority interest in Agrinatural Gas, LLC (“Agrinatural”), which operates a natural gas pipeline that provides natural gas to HLBE's ethanol production facility and other customers. All references to “we”, “us”, “our”, and the “Company” collectively refer to GFE and its wholly-owned and majority-owned subsidiaries. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The condensed consolidated unaudited financial statements as of July 31, 2018 consolidate the operating results and financial position of GFE, and its approximately 50.7% owned subsidiary, HLBE (through GFE's 100% ownership of Project Viking, LLC). Given the Company’s control over the operations of HLBE and its majority voting interest, the Company consolidates the condensed consolidated unaudited financial statements of HLBE with GFE's condensed consolidated unaudited financial statements. The remaining 49.3% ownership of HLBE is included in the condensed consolidated unaudited financial statements as a non-controlling interest. HLBE, through its wholly owned subsidiary, HLBE Pipeline Company, LLC, owns approximately 73% of 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 unaudited financial statements, with the equity and earnings attributed to the remaining approximately 27% noncontrolling interest. All significant intercompany balances and transactions are eliminated in consolidation. The accompanying condensed consolidated unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company’s audited consolidated financial statements for the year ended October 31, 2017, contained in the Company’s annual report on Form 10-K. In the opinion of management, the condensed consolidated unaudited financial statements reflect all adjustments consisting of normal recurring accruals that we consider necessary to present fairly the Company’s results of operations, financial position and cash flows. The results reported in these condensed consolidated unaudited financial statements should not be regarded as necessarily indicative of results that may be expected for any other fiscal period or for the fiscal year. |
Reportable Operating Segments | Reportable Operating Segments Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” establishes the standards for reporting information about segments in financial statements. Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Therefore, in applying the criteria set forth in ASC 280, the Company determined that based on the nature of the products and production process and the expected financial results, the Company’s operations at GFE’s ethanol plant and HLBE’s plant, including the production and sale of ethanol and its co-products, are aggregated into one reporting segment. Additionally, the Company also realizes relatively immaterial revenue from natural gas pipeline operations at Agrinatural, HLBE’s majority owned subsidiary. Before and after accounting for intercompany eliminations, these revenues from Agrinatural’s represent less than less than 1% of our consolidated revenues and have little to no impact on the overall performance of the Company. Therefore, the Company does not separately review Agrinatural’s revenues, cost of sales or other operating performance information. Rather, the Company reviews Agrinatural’s natural gas pipeline financial data on a consolidated basis with the Company’s ethanol production operating segment. The Company believes that the presentation of separate operating performance information for Agrinatural’s natural gas pipeline operations would not provide meaningful information to a reader of the Company’s consolidated financial statements and would not achieve the basic principles and objectives of ASC 280. |
Accounting Estimates | Accounting Estimates Management uses estimates and assumptions in preparing these condensed consolidated unaudited 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 and equipment, valuation of commodity derivatives, inventory, inventory purchase and sale commitments, evaluation of railcar damages contingency, and the assumptions used in the impairment analysis of long-lived assets, which includes goodwill. Actual results may differ from previously estimated amounts, and such differences may be material to our condensed consolidated unaudited 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 | 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. Agrinatural recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee for the arrangement is fixed or determinable and collectability is reasonably assured. |
Inventory | Inventory Inventory is stated at the lower of cost or net realizable value. Cost for all inventories is determined using the first in first out method (“FIFO”). Net realizable value is the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. Inventory consists of raw materials, work in process, finished goods, and spare parts. Corn is the primary raw material along with other raw materials. Finished goods consist of ethanol, distillers' grains, and corn oil. |
Derivative Instruments | 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 unaudited 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. |
Investments | Investments On November 1, 2016, GFE subscribed to purchase 1,500 capital units of Ringneck Energy & Feed, LLC (“Ringneck”) at a price of $5,000 per unit for a total of $7,500,000. Ringneck is a South Dakota limited liability company that is currently constructing an 80 million gallon per year ethanol manufacturing plant in outside of Onida, South Dakota in Sully County. GFE’s investment is sufficient to secure the Company the right to appoint one director to the board of directors of Ringneck. GFE has appointed Steve Christensen, its CEO, to serve as its appointed director. GFE paid a down payment of $750,000 in connection with the subscription, and signed a promissory note for $6,750,000 for the remaining balance of the subscription. On August 2, 2017, following notice from Ringneck accepting GFE’s subscription and that payment of the balance of GFE’s subscription and promissory note was due, GFE borrowed $7.5 million under its credit facility with Project Hawkeye, LLC (“Project Hawkeye”) and paid $6,750,000 to Ringneck as payment for the remaining balance of GFE’s subscription. Project Hawkeye is an affiliate of Fagen, Inc., which is a member of GFE. See Note 6 below for the terms of GFE’s credit facility with Project Hawkeye. On June 29, 2018, GFE executed a subscription agreement for investment in Harvestone Group, LLC (“Harvestone”), a Delaware limited liability company, and a Joinder to the Operating Agreement of Harvestone. In connection with the execution of the subscription agreement and joinder, GFE made a capital contribution of $2.0 million in exchange for twenty (20) preferred membership units and was sufficient to secure GFE the right to appoint one advisor to the advisory committee to the managers of Harvestone. GFE has appointed Eric Baukol, its Risk Manager, to serve as its appointed advisor. Harvestone is a start-up ethanol marketing, logistics, and trading company headquartered in Franklin, Tennessee. Harvestone is owned by several other ethanol producers and other private investors that expects that its primary business will be marketing and trading for member and non-member ethanol producers. The investments are accounted for by the equity method, under which the Company’s share of the net income of the investee is recognized as income in the Company’s Condensed Consolidated Statements of Operations and added to the investment account, and distributions received from the affiliates are treated as a reduction of the investment. |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
INVENTORY | |
Schedule of Inventory | July 31, 2018 October 31, 2017 (unaudited) Raw materials $ 4,121,644 $ 4,488,923 Supplies 2,961,224 2,929,385 Work in process 1,327,777 1,281,292 Finished goods 7,208,881 6,541,492 Totals $ 15,619,526 $ 15,241,092 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
DERIVATIVE INSTRUMENTS | |
Schedule of derivative instruments in Statements of Financial Position | The following tables provide details regarding the Company's derivative instruments at July 31, 2018, none of which were designated as hedging instruments: Consolidated Balance Sheet Location Assets Liabilities Corn contracts - GFE Commodity derivative instruments $ 268,026 $ 35,196 Corn contracts - HLBE Commodity derivative instruments 286,601 35,196 Totals $ 554,627 $ 70,392 The following tables provide details regarding the Company's derivative instruments at October 31, 2017, none of which were designated as hedging instruments: Consolidated Balance Sheet Location Assets Liabilities Corn contracts - GFE Commodity derivative instruments $ 102,650 $ — Corn contracts - HLBE Commodity derivative instruments 141,644 — Ethanol contracts - GFE Commodity derivative instruments — 12,749 Ethanol contracts - HLBE Commodity derivative instruments — 12,249 Natural gas contracts - HLBE Commodity derivative instruments — 15,381 Totals $ 244,294 $ 40,379 |
Schedule of gains (losses) from derivative instruments | Consolidated Statement Three Months Ended July 31, Nine Months Ended July 31, of Operations Location 2018 2017 2018 2017 Corn contracts Cost of Goods Sold $ 1,778,570 $ 287,865 $ 566,959 $ 857,218 Ethanol contracts Revenues (286,125) (122,765) 107,995 (395,495) Natural gas contracts Cost of Goods Sold — — (1,598) — Total gain $ 1,492,445 $ 165,100 $ 673,356 $ 461,723 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
FAIR VALUE | |
Schedule of derivative assets and liabilities measured at fair value | The following table sets forth, by level, the Company assets and liabilities that were accounted for at fair value on a recurring basis at July 31, 2018: Fair Value Measurement Using Quoted Prices Significant Other Significant Carrying Amount in in Active Markets Observable Inputs Unobservable Inputs Financial Asset: Consolidated Balance Sheet Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative Instruments - Corn $ 554,627 $ 554,627 $ 554,627 $ — $ — Financial Liabilities: Commodity Derivative Instruments - Corn $ 70,392 $ 70,392 $ — $ 70,392 $ — The following table sets forth, by level, the Company assets and liabilities that were accounted for at fair value on a recurring basis at October 31, 2017: Fair Value Measurement Using Quoted Prices Significant Other Significant Carrying Amount in in Active Markets Observable Inputs Unobservable Inputs Financial Asset: Consolidated Balance Sheet Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative Instruments - Corn $ 244,294 $ 244,294 $ 244,294 $ — $ — Financial Liabilities: Commodity Derivative Instruments - Ethanol $ 24,998 $ 24,998 $ 36,500 $ (11,502) $ — Commodity Derivative Instruments - Natural Gas $ 15,381 $ 15,381 $ — $ 15,381 $ — |
DEBT FACILITIES (Tables)
DEBT FACILITIES (Tables) | 9 Months Ended |
Jul. 31, 2018 | |
DEBT FACILITIES | |
Schedule of debt financing | July 31, 2018 October 31, 2017 (unaudited) GRANITE FALLS ENERGY: Seasonal loan, see terms below. $ — $ — Term note payable to Project Hawkeye, see terms below. 7,500,000 7,500,000 HERON LAKE BIOENERGY: Amended revolving term loan, see terms below. — — Seasonal loan, see terms below. — — Assessment payable as part of water treatment agreement, due in semi-annual installments of $189,393 with interest at 6.55%, enforceable by statutory lien, with the final payment due in 2021. HLBE made deposits for one years' worth of debt service payments of approximately $364,000, which is included with other assets that are held on deposit to be applied with the final payments of the assessment. 1,094,236 1,241,171 Assessment payable as part of water supply agreement, due in monthly installments of $3,942 with interest at 8.73%, enforceable by statutory lien, with the final payment due in 2019. 23,367 56,514 Note payable to non-controlling interest member of Agrinatural. Interest is at One Month LIBOR plus 4.0%, which was approximately 5.24% at October 31, 2017. The note was paid in full in January 2018. — 100,000 Totals 8,617,603 8,897,685 Less: amounts due within one year 322,048 432,183 Net long-term debt $ 8,295,555 $ 8,465,502 |
Schedule of annual maturities of debt | 2019 $ 322,048 2020 1,389,682 2021 1,410,526 2022 1,209,634 2023 1,071,429 Thereafter 3,214,284 Total debt $ 8,617,603 |
SUMMARY OF SIGNIFICANT ACCOUN19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) gal in Millions | 9 Months Ended |
Jul. 31, 2018gal | |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Plant production capacity | 60 |
Production volume permitted | 70 |
Heron Lake BioEnergy, LLC | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Plant production capacity | 60 |
Production volume permitted | 72.3 |
Heron Lake BioEnergy, LLC | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 49.30% |
Heron Lake BioEnergy, LLC | Project Viking, LLC | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Ownership percentage | 50.70% |
Project Viking, LLC | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Ownership percentage | 100.00% |
Agrinatural, LLC | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 27.00% |
Agrinatural, LLC | HLBE Pipeline Company, LLC | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
Ownership percentage | 73.00% |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Other (Details) | 9 Months Ended |
Jul. 31, 2018segment | |
Reportable Operating Segments | |
Number of reportable segments | 1 |
Agrinatural, LLC | Maximum | |
Reportable Operating Segments | |
Revenues of subsidiary, percentage | 1.00% |
SUMMARY OF SIGNIFICANT ACCOUN21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Investments (Details) $ / shares in Units, gal in Millions | Jun. 29, 2018USD ($)advisorshares | Aug. 02, 2017USD ($) | Nov. 01, 2016USD ($)director$ / sharessharesgal | Jul. 31, 2018USD ($) | Jul. 31, 2017USD ($) |
Investment | |||||
Payment for equity method investment | $ 2,000,000 | $ 750,000 | |||
Ringneck Energy and; Feed, LLC | |||||
Investment | |||||
Expected ethanol production capacity | gal | 80 | ||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Ringneck Energy and; Feed, LLC | |||||
Investment | |||||
Units purchased | shares | 1,500 | ||||
Price per unit (in dollars per unit) | $ / shares | $ 5,000 | ||||
Total cost | $ 7,500,000 | ||||
Number of directors Company has the right to appoint | director | 1 | ||||
Payment for equity method investment | $ 6,750,000 | $ 750,000 | |||
Note payable | $ 6,750,000 | ||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Harvestone Group, LLC | |||||
Investment | |||||
Units purchased | shares | 20 | ||||
Payment for equity method investment | $ 2,000,000 | ||||
Number of advisors GFE has the right to appoint | advisor | 1 | ||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Project Hawkeye Loan | |||||
Investment | |||||
Proceeds from long-term debt | 7,500,000 | ||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Project Hawkeye Loan | Ringneck Energy and; Feed, LLC | |||||
Investment | |||||
Proceeds from long-term debt | $ 7,500,000 |
RISKS AND UNCERTAINTIES Narrati
RISKS AND UNCERTAINTIES Narrative (Details) - Product | 9 Months Ended |
Jul. 31, 2018 | |
Minimum | Total revenues | Ethanol | |
Concentration Risk | |
Concentration percentage | 75.00% |
Minimum | Cost of goods sold | Corn | |
Concentration Risk | |
Concentration percentage | 65.00% |
Maximum | Total revenues | Ethanol | |
Concentration Risk | |
Concentration percentage | 90.00% |
Maximum | Cost of goods sold | Corn | |
Concentration Risk | |
Concentration percentage | 85.00% |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Oct. 31, 2017 | |
Inventory | |||
Raw materials | $ 4,121,644 | $ 4,488,923 | |
Supplies | 2,961,224 | 2,929,385 | |
Work in process | 1,327,777 | 1,281,292 | |
Finished goods | 7,208,881 | 6,541,492 | |
Totals | 15,619,526 | $ 15,241,092 | |
Ethanol | |||
Inventory | |||
Loss on inventories | $ 420,000 | $ 65,000 |
DERIVATIVE INSTRUMENTS - Assets
DERIVATIVE INSTRUMENTS - Assets And Liabilities (Details) | 9 Months Ended | 12 Months Ended |
Jul. 31, 2018USD ($)bu | Oct. 31, 2017USD ($)MMBTUbugal | |
Derivatives, Fair Value | ||
Cash collateral (restricted cash) | $ 132,914 | $ 75,189 |
Financial Assets | 554,627 | 244,294 |
Derivative liabilities | $ 70,392 | $ 40,379 |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Corn Contracts | ||
Derivatives, Fair Value | ||
Total nonmonetary notional amount outstanding | bu | 5,725,000 | 1,495,000 |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Ethanol Contracts | ||
Derivatives, Fair Value | ||
Total nonmonetary notional amount outstanding | gal | 420,000 | |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Derivatives held by a broker | ||
Derivatives, Fair Value | ||
Cash collateral (restricted cash) | $ 109,000 | $ 75,000 |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Derivatives held by a broker | Accounts Payable | ||
Derivatives, Fair Value | ||
Derivative liabilities | $ 0 | $ 12,000 |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Long/Purchase position | Corn Contracts | ||
Derivatives, Fair Value | ||
Total nonmonetary notional amount outstanding | bu | 190,000 | 200,000 |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Short/Sale position | Corn Contracts | ||
Derivatives, Fair Value | ||
Total nonmonetary notional amount outstanding | bu | 5,535,000 | 1,295,000 |
Heron Lake BioEnergy, LLC | Corn Contracts | ||
Derivatives, Fair Value | ||
Total nonmonetary notional amount outstanding | bu | 4,125,000 | 1,120,000 |
Heron Lake BioEnergy, LLC | Ethanol Contracts | ||
Derivatives, Fair Value | ||
Total nonmonetary notional amount outstanding | gal | 420,000 | |
Heron Lake BioEnergy, LLC | Natural Gas Contracts | ||
Derivatives, Fair Value | ||
Total gas derivative nonmonetary notional amount outstanding | MMBTU | 120,000 | |
Heron Lake BioEnergy, LLC | Derivatives held by a broker | ||
Derivatives, Fair Value | ||
Cash collateral (restricted cash) | $ 24,000 | |
Heron Lake BioEnergy, LLC | Derivatives held by a broker | Accounts Payable | ||
Derivatives, Fair Value | ||
Derivative liabilities | 0 | $ 12,000 |
Heron Lake BioEnergy, LLC | Long/Purchase position | Corn Contracts | ||
Derivatives, Fair Value | ||
Total nonmonetary notional amount outstanding | bu | 215,000 | |
Heron Lake BioEnergy, LLC | Short/Sale position | Corn Contracts | ||
Derivatives, Fair Value | ||
Total nonmonetary notional amount outstanding | bu | 905,000 | |
Not Designated as Hedging Instruments | ||
Derivatives, Fair Value | ||
Financial Assets | 554,627 | $ 244,294 |
Derivative liabilities | 70,392 | 40,379 |
Not Designated as Hedging Instruments | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Corn Contracts | ||
Derivatives, Fair Value | ||
Financial Assets | 268,026 | 102,650 |
Derivative liabilities | 35,196 | |
Not Designated as Hedging Instruments | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Ethanol Contracts | ||
Derivatives, Fair Value | ||
Derivative liabilities | 12,749 | |
Not Designated as Hedging Instruments | Heron Lake BioEnergy, LLC | Corn Contracts | ||
Derivatives, Fair Value | ||
Financial Assets | 286,601 | 141,644 |
Derivative liabilities | $ 35,196 | |
Not Designated as Hedging Instruments | Heron Lake BioEnergy, LLC | Ethanol Contracts | ||
Derivatives, Fair Value | ||
Derivative liabilities | 12,249 | |
Not Designated as Hedging Instruments | Heron Lake BioEnergy, LLC | Natural Gas Contracts | ||
Derivatives, Fair Value | ||
Derivative liabilities | $ 15,381 |
DERIVATIVE INSTRUMENTS - Income
DERIVATIVE INSTRUMENTS - Income Statement (Details) - Not Designated as Hedging Instruments - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2018 | Jul. 31, 2017 | Jul. 31, 2018 | Jul. 31, 2017 | |
Derivative Instruments, Gain (Loss) | ||||
Gains (losses) on derivative instruments | $ 1,492,445 | $ 165,100 | $ 673,356 | $ 461,723 |
Cost of Goods Sold. | Corn Contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (losses) on derivative instruments | 1,778,570 | 287,865 | 566,959 | 857,218 |
Cost of Goods Sold. | Natural Gas Contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (losses) on derivative instruments | (1,598) | |||
Revenues | Ethanol Contracts | ||||
Derivative Instruments, Gain (Loss) | ||||
Gains (losses) on derivative instruments | $ (286,125) | $ (122,765) | $ 107,995 | $ (395,495) |
FAIR VALUE (Details)
FAIR VALUE (Details) - USD ($) | Jul. 31, 2018 | Oct. 31, 2017 |
Fair value | ||
Financial Assets | $ 554,627 | $ 244,294 |
Financial Liabilities | 70,392 | 40,379 |
Corn Contracts | Fair Value, Measurements, Recurring | Carrying Amount | ||
Fair value | ||
Financial Assets | 554,627 | 244,294 |
Financial Liabilities | 70,392 | |
Corn Contracts | Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Assets | 554,627 | 244,294 |
Financial Liabilities | 70,392 | |
Corn Contracts | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Assets | 554,627 | 244,294 |
Corn Contracts | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Liabilities | $ 70,392 | |
Ethanol Contracts | Fair Value, Measurements, Recurring | Carrying Amount | ||
Fair value | ||
Financial Liabilities | 24,998 | |
Ethanol Contracts | Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Liabilities | 24,998 | |
Ethanol Contracts | Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Liabilities | 36,500 | |
Ethanol Contracts | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Liabilities | (11,502) | |
Natural Gas Contracts | Fair Value, Measurements, Recurring | Carrying Amount | ||
Fair value | ||
Financial Liabilities | 15,381 | |
Natural Gas Contracts | Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Liabilities | 15,381 | |
Natural Gas Contracts | Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | Estimate of Fair Value Measurement | ||
Fair value | ||
Financial Liabilities | $ 15,381 |
DEBT FACILITIES (Details)
DEBT FACILITIES (Details) - USD ($) | Mar. 29, 2018 | Aug. 02, 2017 | Jul. 31, 2018 | Oct. 31, 2017 |
Line of Credit Facility | ||||
Long-term Debt | $ 8,617,603 | $ 8,897,685 | ||
Less: amounts due within one year | 322,048 | 432,183 | ||
Net long term debt | $ 8,295,555 | $ 8,465,502 | ||
Seasonal Revolving Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Interest rate (as a percent) | 4.83% | 3.99% | ||
Seasonal Revolving Loan | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Interest rate (as a percent) | 4.93% | |||
Project Hawkeye Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Long-term Debt | $ 7,500,000 | $ 7,500,000 | ||
Interest rate (as a percent) | 5.13% | 4.29% | ||
Revolving Term Loan | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Interest rate (as a percent) | 5.18% | |||
Assessments payable as part of water treatment agreement, with interest at 6.55%, due in 2021 | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Long-term Debt | $ 1,094,236 | $ 1,241,171 | ||
Payment | $ 189,393 | $ 189,393 | ||
Interest rate (as a percent) | 6.55% | 6.55% | ||
Period of worth of debt | 1 year | 1 year | ||
Deposit on debt service payments | $ 364,000 | $ 364,000 | ||
Assessments payable as part of water supply agreement, with interest at 8.73%, due in 2019 | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Long-term Debt | 23,367 | 56,514 | ||
Payment | $ 3,942 | $ 3,942 | ||
Interest rate (as a percent) | 8.73% | 8.73% | ||
Note payable to noncontrolling interest member of Agrinatural, Interest One Month LIBOR plus 4.0 % | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Long-term Debt | $ 100,000 | |||
Interest rate (as a percent) | 5.24% | |||
One Month LIBOR | Seasonal Revolving Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Spread above variable interest rate | 2.75% | |||
One Month LIBOR | Seasonal Revolving Loan | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Spread above variable interest rate | 2.85% | |||
One Month LIBOR | Project Hawkeye Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Spread above variable interest rate | 3.05% | |||
One Month LIBOR | Revolving Term Loan | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Spread above variable interest rate | 3.10% | |||
One Month LIBOR | Note payable to noncontrolling interest member of Agrinatural, Interest One Month LIBOR plus 4.0 % | Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Spread above variable interest rate | 4.00% |
DEBT FACILITIES - Granite Falls
DEBT FACILITIES - Granite Falls Energy (Details) - USD ($) | Aug. 02, 2017 | Nov. 01, 2016 | Jul. 31, 2018 | Oct. 31, 2017 |
Line of Credit Facility | ||||
Savings collateral | $ 132,914 | $ 75,189 | ||
Seasonal Revolving Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Credit facility maximum | 6,000,000 | |||
Amounts outstanding under the credit facility | 0 | 0 | ||
Aggregate principal amount available for borrowing | $ 6,000,000 | $ 6,000,000 | ||
Interest rate (as a percent) | 4.83% | 3.99% | ||
Savings collateral | $ 0 | |||
Project Hawkeye Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Interest rate (as a percent) | 5.13% | 4.29% | ||
Proceeds from long-term debt | $ 7,500,000 | |||
Interest rate floor (as a percent) | 3.55% | |||
Maximum period of interest payments | 2 years | |||
Debt instrument amortization period after first two years | 7 years | |||
One Month LIBOR | Seasonal Revolving Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Spread above variable interest rate | 2.75% | |||
One Month LIBOR | Project Hawkeye Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Spread above variable interest rate | 3.05% | |||
Ringneck Energy and; Feed, LLC | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Units purchased | 1,500 | |||
Ringneck Energy and; Feed, LLC | Project Hawkeye Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||
Line of Credit Facility | ||||
Proceeds from long-term debt | $ 7,500,000 | |||
Ringneck Energy and; Feed, LLC | Project Hawkeye Loan | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Equity securities | ||||
Line of Credit Facility | ||||
Units purchased | 1,500 |
DEBT FACILITIES - Heron Lake Bi
DEBT FACILITIES - Heron Lake BioEnergy (Details) - Heron Lake BioEnergy, LLC - USD ($) | Mar. 29, 2018 | Mar. 01, 2015 | Jul. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2017 | Feb. 28, 2015 |
Revolving Term Loan | ||||||
Line of Credit Facility | ||||||
Credit facility maximum | $ 4,000,000 | $ 8,000,000 | $ 28,000,000 | |||
Line of credit future reduction amounts | $ 3,500,000 | |||||
Interest rate (as a percent) | 5.18% | |||||
Line of credit unused commitment fee (as a percent) | 0.50% | |||||
Aggregate principal amount available for borrowing | $ 4,000,000 | $ 17,500,000 | ||||
CoBank | ||||||
Line of Credit Facility | ||||||
Annual fee | $ 2,500 | |||||
Seasonal Revolving Loan | ||||||
Line of Credit Facility | ||||||
Credit facility maximum | $ 4,000,000 | |||||
Interest rate (as a percent) | 4.93% | |||||
Line of credit unused commitment fee (as a percent) | 0.25% | |||||
Aggregate principal amount available for borrowing | $ 4,000,000 | |||||
One Month LIBOR | Revolving Term Loan | ||||||
Line of Credit Facility | ||||||
Spread above variable interest rate | 3.10% | |||||
One Month LIBOR | Seasonal Revolving Loan | ||||||
Line of Credit Facility | ||||||
Spread above variable interest rate | 2.85% |
DEBT FACILITIES - Estimated Ann
DEBT FACILITIES - Estimated Annual Maturities (Details) - USD ($) | Jul. 31, 2018 | Oct. 31, 2017 |
DEBT FACILITIES | ||
2,019 | $ 322,048 | |
2,020 | 1,389,682 | |
2,021 | 1,410,526 | |
2,022 | 1,209,634 | |
2,023 | 1,071,429 | |
Thereafter | 3,214,284 | |
Long-term Debt | $ 8,617,603 | $ 8,897,685 |
MEMBERS' EQUITY (Details)
MEMBERS' EQUITY (Details) | Dec. 21, 2017USD ($)shares | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($)$ / shares | Jul. 31, 2018USD ($)item$ / sharesshares | Jul. 31, 2017USD ($)$ / shares | Oct. 31, 2017shares |
Number of classes of membership units | item | 1 | |||||
Membership Units, Par value | $ / shares | $ 0 | |||||
Common Units Authorized | shares | 30,606 | 30,606 | ||||
Common Units Issued | shares | 30,606 | 30,606 | ||||
Common Units Outstanding | shares | 30,606 | 30,606 | ||||
Distribution per unit declared (in dollars per unit) | $ / shares | $ 385 | $ 365 | ||||
Amount of distribution paid | $ | $ 11,779,102 | $ 11,171,190 | ||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | ||||||
Distribution per unit declared (in dollars per unit) | $ / shares | $ 385 | $ 365 | ||||
Amount of distribution declared | $ | $ 11,783,000 | $ 11,171,000 | ||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Heron Lake BioEnergy, LLC | Affiliated Entity | ||||||
Distributions received | $ | $ 4,342,000 | |||||
Heron Lake BioEnergy, LLC | ||||||
Distribution per unit declared (in dollars per unit) | $ / shares | $ 0.11 | |||||
Amount of distribution declared | $ | $ 8,573,000 | |||||
Heron Lake BioEnergy, LLC | Non-controlling Interest | ||||||
Amount of distribution paid | $ | $ 4,231,000 | |||||
Heron Lake BioEnergy, LLC | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Capital Unit, Class A | ||||||
Common Units Outstanding | shares | 24,475,824 | |||||
Heron Lake BioEnergy, LLC | Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Capital Unit, Class B | ||||||
Common Units Outstanding | shares | 15,000,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jul. 31, 2018USD ($) | Jul. 31, 2017USD ($) | Jul. 31, 2018USD ($)bu | Jul. 31, 2017USD ($) | Oct. 31, 2017USD ($)bugal | |
Commitments and contingencies | |||||
Accrual for leased railcar damages | $ 0 | $ 0 | |||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Corn Forward Cash and Basis Contracts Purchase Commitments [Member] | |||||
Commitments and contingencies | |||||
Quantity of commitment | bu | 6,384,000 | ||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Corn Contracts | |||||
Commitments and contingencies | |||||
Quantity of commitment | bu | 5,725,000 | 1,495,000 | |||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Ethanol Contracts | |||||
Commitments and contingencies | |||||
Quantity of commitment | gal | 420,000 | ||||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Board Members | Corn Contracts | |||||
Commitments and contingencies | |||||
Amount of corn purchased | 1,754,000 | $ 0 | $ 3,839,000 | $ 0 | |
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Short/Sale position | Corn Contracts | |||||
Commitments and contingencies | |||||
Quantity of commitment | bu | 5,535,000 | 1,295,000 | |||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Short/Sale position | Ethanol Contracts | |||||
Commitments and contingencies | |||||
Value of commitment | 11,832,000 | $ 11,832,000 | |||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Short/Sale position | Distillers' Grains | |||||
Commitments and contingencies | |||||
Value of commitment | 848,000 | 848,000 | |||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Short/Sale position | Corn Oil | |||||
Commitments and contingencies | |||||
Value of commitment | 829,000 | $ 829,000 | |||
Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC | Long/Purchase position | Corn Contracts | |||||
Commitments and contingencies | |||||
Quantity of commitment | bu | 190,000 | 200,000 | |||
Heron Lake BioEnergy, LLC | Corn Forward Cash and Basis Contracts Purchase Commitments [Member] | |||||
Commitments and contingencies | |||||
Quantity of commitment | bu | 4,189,000 | ||||
Heron Lake BioEnergy, LLC | Corn Contracts | |||||
Commitments and contingencies | |||||
Quantity of commitment | bu | 4,125,000 | 1,120,000 | |||
Heron Lake BioEnergy, LLC | Ethanol Contracts | |||||
Commitments and contingencies | |||||
Quantity of commitment | gal | 420,000 | ||||
Heron Lake BioEnergy, LLC | Board Members | Corn Contracts | |||||
Commitments and contingencies | |||||
Amount of corn purchased | 3,382,000 | $ 143,000 | $ 10,479,000 | $ 5,737,000 | |
Heron Lake BioEnergy, LLC | Short/Sale position | Corn Contracts | |||||
Commitments and contingencies | |||||
Quantity of commitment | bu | 905,000 | ||||
Heron Lake BioEnergy, LLC | Short/Sale position | Ethanol Contracts | |||||
Commitments and contingencies | |||||
Value of commitment | 11,716,000 | 11,716,000 | |||
Heron Lake BioEnergy, LLC | Short/Sale position | Distillers' Grains | |||||
Commitments and contingencies | |||||
Value of commitment | 2,517,000 | 2,517,000 | |||
Heron Lake BioEnergy, LLC | Short/Sale position | Corn Oil | |||||
Commitments and contingencies | |||||
Value of commitment | $ 775,000 | 775,000 | |||
Heron Lake BioEnergy, LLC | Long/Purchase position | Corn Contracts | |||||
Commitments and contingencies | |||||
Quantity of commitment | bu | 215,000 | ||||
Heron Lake BioEnergy, LLC | Accounts Payable | Board Members | Corn Contracts | |||||
Commitments and contingencies | |||||
Amount of corn purchased | $ 0 | $ 607,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Leases (Details) - Granite Falls Energy, LLC Excluding Heron Lake BioEnergy, LLC - Rail Cars | Feb. 28, 2018USD ($)item |
Leases | |
Equipment lease, quantity | item | 16 |
Minimum future lease payments per year | $ | $ 144,000 |