Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Jan. 31, 2020 | Mar. 16, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | GOLDEN GRAIN ENERGY, LLC | |
Entity Central Index Key | 0001206942 | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jan. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 18,953,000 | |
Entity Current Reporting Status | Yes | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Small Business | false |
Balance Sheets
Balance Sheets - USD ($) | Jan. 31, 2020 | Oct. 31, 2019 |
Current Assets | ||
Cash and equivalents | $ 16,517,347 | $ 15,937,266 |
Marketable securities | 910,619 | 870,706 |
Accounts receivable | 5,901,592 | 2,509,938 |
Other receivables | 1,070,260 | 215,981 |
Derivative instruments | 1,042,947 | 1,115,525 |
Inventory | 7,258,394 | 8,534,358 |
Prepaid expenses and other | 3,692,276 | 2,909,651 |
Total current assets | 36,393,435 | 32,093,425 |
Property and Equipment | ||
Land and land improvements | 16,319,211 | 14,319,211 |
Building and grounds | 32,891,090 | 30,891,090 |
Grain handling equipment | 16,084,232 | 16,038,202 |
Office equipment | 1,017,371 | 458,385 |
Plant and process equipment | 121,851,854 | 121,636,606 |
Construction in progress | 2,246,355 | 5,038,278 |
Gross property and equipment | 190,410,113 | 188,381,772 |
Less accumulated depreciation | 118,529,022 | 116,292,967 |
Net property and equipment | 71,881,091 | 72,088,805 |
Other Assets | ||
Investments | 24,254,575 | 25,416,170 |
Right of use asset operating leases | 2,597,026 | |
Other assets | 1,814,191 | 431,983 |
Total other assets | 28,665,792 | 25,848,153 |
Total Assets | 136,940,318 | 130,030,383 |
Current Liabilities | ||
Accounts payable | 5,442,706 | 6,188,819 |
Accrued expenses | 3,000,983 | 2,827,791 |
Other current liabilities | 131,920 | 123,590 |
Current portion operating lease liability | 1,048,441 | |
Total current liabilities | 9,624,050 | 9,140,200 |
Long-term Liabilities | ||
Long-term Liabilities, deferred compensation | 500,506 | 469,040 |
Operating Lease Liability | 1,548,585 | |
Deferred revenue, net of current portion | 1,431,816 | 0 |
Total long-term liabilities | 3,480,907 | 469,040 |
Commitments and Contingencies | ||
Members' Equity (19,873,000 units issued and outstanding) | 123,835,361 | 120,421,143 |
Total Liabilities and Members’ Equity | $ 136,940,318 | $ 130,030,383 |
Statements of Operations
Statements of Operations - USD ($) | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 57,432,202 | $ 46,196,377 |
Cost of Goods Sold | 54,826,337 | 46,817,643 |
Gross Profit | 2,605,865 | (621,266) |
Operating Expenses | 1,273,962 | 971,396 |
Operating Income (Loss) | 1,331,903 | (1,592,662) |
Other Income (Expense) | ||
Other income (expense) | 8,447 | 200,826 |
Interest income (expense) | 58,598 | 51,668 |
Equity in net income of investments | 2,015,270 | 160,897 |
Total Other Income | 2,082,315 | 413,391 |
Net Income | $ 3,414,218 | $ (1,179,271) |
Basic & diluted net income per unit (usd per share) | $ 0.17 | $ (0.06) |
Weighted average units outstanding for the calculation of basic & diluted net income per unit (in shares) | 19,873,000 | 19,873,000 |
Distribution Per Unit (usd per share) | $ 0 | $ 0.25 |
Balance Sheet Parenthetical
Balance Sheet Parenthetical - shares | Jan. 31, 2020 | Oct. 31, 2019 |
Balance Sheet Parenthetical [Abstract] | ||
Common stock, shares outstanding (in shares) | 19,873,000 | 19,873,000 |
Common stock, shares outstanding (in shares) | 19,873,000 | 19,873,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Members' Equity | USD ($) |
Beginning balance at Oct. 31, 2017 | $ 127,101,795 |
Increase (Decrease) in Changes in Members' Equity | |
Net loss | (1,179,271) |
Member distribution | (4,968,250) |
Ending balance at Jan. 31, 2018 | 120,954,274 |
Beginning balance at Oct. 31, 2019 | 120,421,143 |
Increase (Decrease) in Changes in Members' Equity | |
Net loss | 3,414,218 |
Ending balance at Jan. 31, 2020 | $ 123,835,361 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Cash Flows from Operating Activities | ||
Net Income | $ 3,414,218 | $ (1,179,271) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 2,254,569 | 2,489,177 |
Unrealized loss on risk management & marketable securities | 64,131 | 148,841 |
Change in accretion of interest on grant & note receivable | 0 | (2,326) |
Distributions in excess of earnings from investments | 621,595 | 658,858 |
Gain on insurance proceeds from involuntary conversion | 0 | 3,000,000 |
Deferred compensation expense | 0 | (58,649) |
Change in assets and liabilities | ||
Accounts receivable | (3,391,654) | (1,190,618) |
Inventory | 1,275,964 | 195,768 |
Prepaid expenses and other | (1,096,904) | (169,285) |
Accounts payable | (109,096) | 772,409 |
Accrued expenses | 173,192 | (134,561) |
Net cash provided by operating activities | 3,206,015 | 4,530,343 |
Cash Flows from Investing Activities | ||
Capital expenditures | (2,625,934) | (3,437,041) |
Purchase of marketable securities | 0 | (7,515) |
Proceeds from sale of marketable securities | 0 | 3,701,191 |
Net cash provided by (used in) investing activities | (2,625,934) | 256,635 |
Cash Flows from Financing Activities | ||
Distributions to members | 0 | (4,968,250) |
Payments received on grant receivable | 0 | 84,666 |
Net cash (used in) financing activities | 0 | (4,883,584) |
Net (Decrease) in Cash and Equivalents | 580,081 | (96,606) |
Cash and Equivalents – Beginning of Period | 15,937,266 | |
Cash and Equivalents – End of Period | 16,517,347 | |
Supplemental Cash Flow Information | ||
Cash paid for interest | 12,838 | 12,858 |
Supplemental Disclosure of Noncash Operating, Investing & Financing Activities | ||
Accounts payable related to construction in progress | 300,554 | 578,402 |
Deferred revenue received through grant receivable | 1,400,722 | 0 |
Initial right-of-use asset and liability recorded | 2,889,785 | |
Distributions declared and unpaid by equity method investee | $ 540,000 | $ 660,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and notes 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 financial statements for the year ended October 31, 2019, contained in the Company's annual report on Form 10-K for 2019. In the opinion of management, the interim condensed financial statements reflect all adjustments considered necessary for fair presentation. The adjustments made to these statements consist only of normal recurring adjustments. Nature of Business Golden Grain Energy, LLC ("Golden Grain Energy" and "the Company") is an approximately 120 million gallon annual production ethanol plant near Mason City, Iowa. The Company sells its production of ethanol, distiller grains with solubles and corn oil primarily in the continental United States. The Company also holds several investments in various companies that focus on ethanol production, marketing and/or logistics. Organization Golden Grain Energy is organized as an Iowa limited liability company. The members' liability is limited as specified in Golden Grain Energy's operating agreement and pursuant to the Iowa Revised Uniform Limited Liability Company Act. Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. 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. Actual results could differ from those estimates. Cash and Equivalents The Company's cash balances are maintained in bank depositories and regularly exceed federally insured limits. The Company has not experienced any losses in connection with these balances. Also included in cash and equivalents are highly liquid investments, that are readily convertible into known amounts of cash, which are subject to an insignificant risk of change in value due to interest rate, quoted price or penalty on withdrawal and have a maturity of three months or less. Marketable Securities The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are recorded as either short term or long term on the Balance Sheet, based on contractual maturity date and are stated at cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Marketable securities consisted of mutual funds invested in intermediate-term municipal and government bonds. For the periods ended January 31, 2020 and 2019, there was no other-than-temporary impairment recognized. Mutual funds are considered trading securities which are measured at fair value using prices obtained from pricing services. Any unrealized or realized gains and losses on the trading securities are recorded as part of other income. The Company recorded interest, dividends and net realized and unrealized gains (losses) from these investments as part of other income as follows: Three Months Ended January 31, 2020 2019 Net earnings on marketable securities $ 8,000 $ 201,000 Marketable Securities As of Cost Fair Market Value January 31, 2020 $ 772,000 $ 911,000 October 31, 2019 $ 767,000 $ 871,000 Accounts Receivable Credit sales are made primarily to one customer and no collateral is required. The Company carries these accounts receivable at original invoice amount with no allowance for doubtful accounts due to the historical collection rates on these accounts. Investments The Company has less than a 20% investment interest in five companies in related industries. These investments are being accounted for by the equity method of accounting under which the Company's share of net income is recognized as income in the Company's statement of operations and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account. Distributions or dividends received in excess of the carrying value are recognized as income in the statement of operations. The investments are evaluated for indications of impairment on a regular basis. A loss would be recognized when the fair value is determined to be less than the carrying value. The fiscal years of Renewable Products Marketing Group, LLC (RPMG) and Guardian Energy Janesville, LLC end on September 30 and the fiscal years of Absolute Energy, LLC, Homeland Energy Solutions, LLC and Lawrenceville Tank, LLC, end on December 31. The Company consistently follows the practice of recognizing the net income based on the most recent reliable data. Therefore, the net income which is reported in the Company's statement of operations for the period ended January 31, 2020 , for all companies, is based on the investee's results for the three months ended December 31, 2019. Revenue and Cost Recognition In the first quarter of 2019, the Company adopted Accounting Standards Update (ASU) 2014-9, Revenue from Contracts with Customers (Topic 606). Under the ASU, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers and with consideration of short-term nature of customer payments, the Company has adopted the practical expedient related to the financing component of the contract. The Company applied the five-step method outlined in the ASU to all contracts with customers and elected the modified retrospective implementation method. The Company generally has a single performance obligation in its arrangements with customers. The Company believes for its contracts with customers, control is transferred at a point in time, typically upon delivery to the customers. When the Company performs shipping and handling activities after the transfer of control to the customers (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. Adopting the practical expedient for contract costs, the Company expenses contract costs when incurred because the amortization period would have been less than one year. The implementation of the new standard does not have any material impact on the measurement or recognition of revenue of prior periods, however additional disclosures have been added in accordance with the ASU. Revenues from contracts with customers are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. The principal activities which we generate revenue include: sales of ethanol, sales of distiller grains and sales of corn oil. All revenue recognized in the income statement is considered to be revenue from contracts with customers. The disaggregation of revenue according to product line, along with accounts receivable from contracts with customers, is as disclosed in Note 5. Shipping costs incurred by the Company in the sale of ethanol, distiller grains and corn oil are not specifically identifiable and as a result, revenue from the sale of ethanol, distiller grains and corn oil are recorded based on the net selling price reported to the Company from its marketer. Railcar lease costs incurred by the Company in the sale and shipment of distiller grain products are included in cost of goods sold. Based upon the timing of the transfer of control of our products to our customers, there are no contract assets or liabilities as of January 31, 2020 . Inventory Inventories are generally valued at the lower of weighted average cost or net realizable value. In the valuation of inventories and purchase commitments, net realizable value is defined as estimated selling price in the ordinary course of business less reasonable predictable costs of completion, disposal and transportation. Grant Receivable and Deferred Revenue Grants receivables are recorded when the payments to be received can be estimated and when payment is reasonably assured. The Company recorded a grant receivable and corresponding deferred revenue of approximately $1,400,000 associated with an agreement approved in December 2019 for tax increment financing monies associated with the plant expansion that was completed in January 2020 to be received over a 10 -year period for the tax increment financing monies. These grants were recorded at their net present value using a discount rate of approximately 5% . Related deferred revenue was recorded and is being amortized into income as a reduction of property taxes over the life of the grant. As of January 31, 2020 the grant receivable was approximately $1,400,000 and was included in long-term other assets and the corresponding current and long-term portions of deferred revenue was approximately $1,400,000 . Property & Equipment Property and equipment are stated at historical cost. Significant additions and betterments are capitalized, while expenditures for maintenance and repairs are charged to operations when incurred. The Company uses the straight-line method of computing depreciation over the estimated useful lives between 3 and 40 years. The Company reviews its property and equipment for impairment whenever events indicate that the carrying amount of the asset group may not be recoverable. If circumstances require a long-lived asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset group to the carrying value of the asset group. If the carrying value of the asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. Investment in commodities contracts, derivative instruments and hedging activities The Company evaluates its contracts to determine whether the contracts are derivative instruments. Certain contracts that meet the definition of a derivative may be exempted from derivative accounting and treated as normal purchases or normal sales if documented as such. 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. The Company enters into short-term cash, option and futures contracts as a means of securing corn and natural gas for the ethanol plant and managing exposure to changes in commodity and energy prices. The Company occasionally also enters into derivative contracts to hedge its exposure to price risk as it relates to ethanol sales. As part of its risk management process, the Company uses futures and option contracts through regulated commodity exchanges or through the over-the-counter market to manage its risk related to pricing of inventories. All of the Company's derivatives, other than those excluded under the normal purchases and sales exclusion, are designated as non-hedge derivatives, with changes in fair value recognized in net income. Although the contracts are economic hedges of specified risks, they are not designated or accounted for as hedging instruments. Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas are included as a component of cost of goods sold and derivative contracts related to ethanol are included as a component of revenues in the accompanying financial statements. The fair values of contracts are presented on the accompanying balance sheet as derivative instruments net of cash due from/to broker. Net earnings (loss) per unit Basic and diluted earnings (loss) per unit are computed using the weighted-average number of Class A and B units outstanding during the period. Fair Value Financial instruments include cash and equivalents, marketable securities, receivables, accounts payable, accrued expenses and derivative instruments. The fair value of marketable securities and derivative financial instruments is based on quoted market prices, as disclosed in Note 8. The fair value, determined using level 3 inputs, of all other current financial instruments is estimated to approximate carrying value due to the short-term nature of these instruments. Risks and Uncertainties The Company has certain risks and uncertainties that it will experience during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distiller grains to customers primarily located in the United States. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. For the three months ended January 31, 2020 , ethanol sales accounted for approximately 79% of total revenue, distiller grains sales accounted for approximately 17% of total revenue and corn oil sales accounted for approximately 4% of total revenue while corn costs averaged approximately 79% of cost of goods sold. The Company's operating and financial performance is largely driven by the prices at which ethanol is sold and the net expense of corn. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and unleaded gasoline and the petroleum markets with ethanol selling, in general, for less than gasoline at the wholesale level. 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, weather, and government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities. Recent Accounting Pronouncements In February 2016, FASB issued ASU No. 2016-02 "Leases" ("ASU 2016-02"). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. Under the new guidance, lessees are required to recognize the following for all leases (with the exception of short-term leases): (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted cash flow basis; and (2) a "right of use" asset, which is an asset that represents the lessee's right to use the specified asset for the lease term. The Company adopted this accounting standard effective November 1, 2019. Upon adoption, the Company elected a practical expedient which allows existing leases to retain their classification as operating leases. The Company has elected to account for lease and related nonlease components as a single lease component. See Note 6 for more detailed information regarding leases. In August 2018, FASB issued ASU No. 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13"). ASU 2018-13 changes some of the disclosure requirements related to fair value measurements related to the Level 1, 2 and 3 investments. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, and for interim periods within that fiscal year. The Company is currently evaluating the impact of its pending adoption of the new standard on the financial statement. |
Inventory
Inventory | 3 Months Ended |
Jan. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | INVENTORY Inventory consisted of the following as of January 31, 2020 and October 31, 2019 : January 31, 2020 October 31, 2019 Raw Materials $ 3,993,021 $ 4,259,459 Work in Process 1,820,729 1,877,354 Finished Goods 1,444,644 2,397,545 Totals $ 7,258,394 $ 8,534,358 |
Bank Financing
Bank Financing | 3 Months Ended |
Jan. 31, 2020 | |
Debt Disclosure [Abstract] | |
Bank Financing | BANK FINANCING The Company has entered into a master loan agreement with Farm Credit Services of America (FLCA) which includes revolving term loans with original maximum borrowings of $35 million and which currently has availability of $10 million and matures on September 1, 2020. Interest on the term loan is payable monthly at 3.15% above the one-month LIBOR ( 4.82% as of January 31, 2020 ). The borrowings are secured by substantially all the assets of the Company. The credit agreements are subject to covenants, including requiring the Company to maintain various financial ratios, as well as certain distribution limitations. As of January 31, 2020 , the Company was in compliance with all of the loan covenants. Failure to comply with the protective loan covenants or maintain the required financial ratios may cause acceleration of any outstanding principal balances on the loans and/or imposition of fees and penalties. As of January 31, 2020 and October 31, 2019 , the Company had no outstanding borrowings. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Jan. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS The Company purchased corn and materials from members of its Board of Directors or Risk Management Committee that own or manage elevators and construction companies (see Note 5). The Company also purchased ingredients from RPMG. Purchases from the related parties during the three months ended January 31, 2020 totaled approximately $11,042,000 . Purchases from the related parties during the three months ended January 31, 2019 totaled approximately $9,113,000 . As of January 31, 2020 and October 31, 2019 , the amount owed to related parties was approximately $496,000 and $547,000 , respectively (See Note 5). |
Commitments, Contingencies, Agr
Commitments, Contingencies, Agreements and Related Party | 3 Months Ended |
Jan. 31, 2020 | |
Commitments, Contingencies and Agreements [Abstract] | |
Commitments, Contingencies, Agreements and Related Party | COMMITMENTS, CONTINGENCIES, AGREEMENTS AND RELATED PARTY Ethanol, Distiller Grains and Corn Oil marketing agreements and major customers The Company has entered into marketing agreements with a marketing company, in which the Company has an investment, for the exclusive rights to market, sell and distribute the entire ethanol, distiller grains and corn oil inventory produced by the Company. The marketing fees are presented net in revenues. Approximate sales and marketing fees related to the agreements in place are as follows: Three Months Ended January 31, 2020 2019 Sales ethanol $ 45,561,000 $ 34,912,000 Sales distiller grains 9,941,000 9,451,000 Sales corn oil 2,220,000 1,809,000 Marketing fees-ethanol $ 60,000 $ 61,000 Marketing fees-distiller grains 74,000 71,000 Marketing fees-corn oil 20,000 14,000 As of January 31, 2020 October 31, 2019 Amount due from RPMG $ 5,877,000 $ 2,489,000 The Company entered into multiple construction agreements as part of plans to expand plant capacity and build a new entrance road and administration building. The Company has incurred costs related to the expansion project totaling approximately $23.1 million of which approximately $7.9 million is to a related party. The current planned expansion project costs are estimated at approximately $24.0 million , including remaining commitments of approximately $0.5 million . The project is materially completed including the entrance road and administration building which were materially completed in January 2020. The final phase of the expansion to increase production capacity is currently being reevaluated. No other contracts have been executed. |
Risk Management
Risk Management | 3 Months Ended |
Jan. 31, 2020 | |
Risk Management [Abstract] | |
Risk Management | RISK MANAGEMENT The Company's activities expose it to a variety of market risks, including the effects of changes in commodity prices. These financial exposures are monitored and managed by the Company as an integral part of its overall risk-management program. The Company's risk management program focuses on the unpredictability of financial and commodities markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results. To reduce price risk caused by market fluctuations, the Company generally follows a policy of using exchange traded futures contracts to reduce its net position of merchandisable agricultural commodity inventories and forward cash purchase and sales contracts and uses exchange traded futures contracts to reduce price risk. Exchange-traded futures contracts are valued at market price. Changes in market price of contracts related to corn and natural gas are recorded in cost of goods sold and changes in market prices of contracts related to sale of ethanol are recorded in revenues. The following table represents the approximate amount of realized and unrealized gains (losses) and changes in fair value recognized in earnings on commodity contracts for periods ended January 31, 2020 and 2019 and the fair value of derivatives as of January 31, 2020 and October 31, 2019: Income Statement Classification Realized Gain (Loss) Change in Unrealized Gain (Loss) Total Gain (Loss) Derivatives not designated as hedging instruments: Commodity Contracts for the Revenue $ (438,000 ) $ 403,000 $ (35,000 ) three months ended January 31, 2020 Cost of Goods Sold 1,376,000 (1,086,000 ) 290,000 Total $ 938,000 $ (683,000 ) $ 255,000 Commodity Contracts for the Revenue $ (34,000 ) $ 205,000 $ 171,000 three months ended January 31, 2019 Cost of Goods Sold 585,000 (375,000 ) 210,000 Total $ 551,000 $ (170,000 ) $ 381,000 Balance Sheet Classification January 31, 2020 October 31, 2019 Futures and option contracts In gain position $ 1,220,000 $ 1,930,000 In loss position (581,000 ) (608,000 ) Cash held by (due to) broker 404,000 (206,000 ) Current Asset $ 1,043,000 $ 1,116,000 As of January 31, 2020 , the Company had the following approximate outstanding purchase and sale commitments, of which all sales commitments and approximately $6,696,000 of the purchase commitments were with related parties. Commitments Through Amount Sale commitments Corn Oil - fixed price February 2020 $ 1,040,000 Distiller Grains - fixed price March 2020 3,907,000 Purchase commitments Corn - fixed price October 2020 $ 5,468,000 Corn - basis contract July 2020 14,130,000 Natural gas - fixed price July 2021 7,849,000 As of January 31, 2020 , the Company has fixed price futures and forward contracts in place for approximately 13% of its anticipated corn needs and 6% of its ethanol sales for the next 12 months with no open positions beyond that period. As of January 31, 2020 , the Company has fixed price futures and forward contracts in place for approximately 68% of its natural gas needs for the next 12 months and approximately 28% of its natural gas needs for the next 24 months with no open positions beyond that period. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jan. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities. Level 3: Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. A description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. Marketable Securities: The Company's investments in short-term liquid investments (e.g. mutual funds), are classified within Level 1, carried at fair value based on the quoted market prices. Derivative financial instruments: Commodity futures and exchange-traded commodity options contracts are reported at fair value utilizing Level 1 inputs. For these contracts, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from markets such as the CME and NYMEX. Crush swaps are bundled contracts or combined contracts that include a portion of corn, ethanol and natural gas rolled into a single trading instrument. These contracts are reported at fair value utilizing Level 2 inputs and are based on the various trading activity of the components of each segment of the bundled contract. The following table summarizes financial assets and financial liabilities measured at the approximate fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: Total Level 1 Level 2 Level 3 Marketable securities: Assets, January 31, 2020 $ 911,000 $ 911,000 $ — $ — Assets, October 31, 2019 871,000 871,000 — — Derivative financial instruments: January 31, 2020 Assets $ 1,220,000 $ 738,000 $ 482,000 $ — Liabilities (581,000 ) (262,000 ) (319,000 ) — October 31, 2019 Assets $ 1,930,000 $ 1,650,000 $ 280,000 $ — Liabilities (608,000 ) (80,000 ) (528,000 ) — |
Investments
Investments | 3 Months Ended |
Jan. 31, 2020 | |
Investments [Abstract] | |
Investments | INVESTMENTS Condensed, combined unaudited financial information of the Company’s investments in Absolute Energy, Homeland Energy Solutions, Guardian Energy, Lawrenceville Tank and RPMG is as follows (in 000’s): Balance Sheet December 31, 2019 September 30, 2019 Current Assets $ 337,219 $ 337,643 Other Assets 254,437 258,655 Current Liabilities 238,144 224,439 Long-term Debt 50,182 55,368 Members’ Equity 303,330 316,491 Three Months Ended December 31, Income Statement 2019 2018 Revenue $ 217,042 $ 178,823 Gross Profit 23,252 4,216 Net Income (Loss) 21,062 (458 ) The Company recorded equity in net income of approximately (in 000's): Three Months Ended January 31, Equity in Net Income (Loss) 2020 2019 Absolute Energy $ 477 $ 208 Guardian Energy 959 — Homeland Energy Solutions 525 (166 ) Other 54 119 Total $ 2,015 $ 161 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jan. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On February 17, 2020, the board of directors declared a cash distribution of $0.10 per membership unit to the holders of Class A and Class B units of record at the close of business on February 17, 2020, for a total distribution of $1,987,300 . The distribution will be recorded in the Company's second quarter financial statements for the 2020 fiscal year and will be paid in March 2020. |
Lease Obligations
Lease Obligations | 3 Months Ended |
Jan. 31, 2020 | |
Leases [Abstract] | |
Lease Obligations | LEASE OBLIGATIONS Effective November 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). The Company elected the option to apply the transition provisions at the adoption date instead of the earliest comparative period presented in the financial statements. By making this election, the Company has not applied retrospective reporting for prior years. The Company elected the short-term lease exception provided for in the standard and therefore only recognized right-of-use assets and lease liabilities for leases with a term greater than one year. The Company elected the package of practical expedients to not re-evaluate existing contracts as containing a lease or the lease classification unless it was not previously assessed against the lease criteria. In addition, the Company did not reassess initial direct costs for any existing leases. A lease exists when a contract conveys to a party the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company recognized a lease liability at the lease commencement date, as the present value of future lease payments, using an estimated rate of interest that the Company would pay to borrow equivalent funds on a collateralized basis. A lease asset is recognized based on the lease liability value and adjusted for any prepaid lease payments, initial direct costs, or lease incentive amounts. The lease term at the commencement date includes any renewal options or termination options when it is reasonably certain that the Company will exercise or not exercise those options, respectively. The Company leases rail cars and rail moving equipment with original terms up to 5 years . The Company is obligated to pay costs of insurance, taxes, repairs and maintenance pursuant to the terms of the leases. These costs are in addition to regular lease payments and are not included in lease expense. Rent expense incurred for the operating leases during the three months ended January 31, 2020 was approximately $354,000 , and for the same period in 2019 was approximately $383,000 . The lease agreements have maturity dates ranging from May 2020 to May 2024. The weighted average remaining life of the lease term for these leases was 1.80 years as of January 31, 2020 . The discount rate used in determining the lease liability for each individual lease was the Company's estimated incremental borrowing rate of 4.95% . The right-of-use asset operating lease, included in other assets, and operating lease liabilities, included in current and long term liabilities was $2,597,000 as of January 31, 2020 . At January 31, 2020 , the Company had the following approximate minimum rental commitments under non-cancelable operating leases for the twelve month period ended January 31: 2021 $ 1,152,000 2022 782,000 2023 528,000 2024 268,000 2025 67,000 Total lease commitments $ 2,797,000 A reconciliation of the undiscounted future payments in the schedule above and the lease liabilities recognized in the consolidated balance sheet as of January 31, 2020, is shown below. Undiscounted future payments $ 2,797,000 Discount effect (200,000 ) Discounted future payments $ 2,597,000 |
(Policies)
(Policies) | 3 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
Accounting Estimates | Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. 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. Actual results could differ from those estimates. |
Cash and Equivalents | Cash and Equivalents The Company's cash balances are maintained in bank depositories and regularly exceed federally insured limits. The Company has not experienced any losses in connection with these balances. Also included in cash and equivalents are highly liquid investments, that are readily convertible into known amounts of cash, which are subject to an insignificant risk of change in value due to interest rate, quoted price or penalty on withdrawal and have a maturity of three months or less. |
Marketable Securities | Marketable Securities The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are recorded as either short term or long term on the Balance Sheet, based on contractual maturity date and are stated at cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings. Marketable securities consisted of mutual funds invested in intermediate-term municipal and government bonds. For the periods ended January 31, 2020 and 2019, there was no other-than-temporary impairment recognized. Mutual funds are considered trading securities which are measured at fair value using prices obtained from pricing services. Any unrealized or realized gains and losses on the trading securities are recorded as part of other income. The Company recorded interest, dividends and net realized and unrealized gains (losses) from these investments as part of other income as follows: Three Months Ended January 31, 2020 2019 Net earnings on marketable securities $ 8,000 $ 201,000 Marketable Securities As of Cost Fair Market Value January 31, 2020 $ 772,000 $ 911,000 October 31, 2019 $ 767,000 $ 871,000 |
Accounts Receivable | Accounts Receivable Credit sales are made primarily to one customer and no collateral is required. The Company carries these accounts receivable at original invoice amount with no allowance for doubtful accounts due to the historical collection rates on these accounts. |
Investments | Investments The Company has less than a 20% investment interest in five companies in related industries. These investments are being accounted for by the equity method of accounting under which the Company's share of net income is recognized as income in the Company's statement of operations and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account. Distributions or dividends received in excess of the carrying value are recognized as income in the statement of operations. The investments are evaluated for indications of impairment on a regular basis. A loss would be recognized when the fair value is determined to be less than the carrying value. The fiscal years of Renewable Products Marketing Group, LLC (RPMG) and Guardian Energy Janesville, LLC end on September 30 and the fiscal years of Absolute Energy, LLC, Homeland Energy Solutions, LLC and Lawrenceville Tank, LLC, end on December 31. The Company consistently follows the practice of recognizing the net income based on the most recent reliable data. Therefore, the net income which is reported in the Company's statement of operations for the period ended January 31, 2020 , for all companies, is based on the investee's results for the three months ended |
Revenue and Cost Recognition | Revenue and Cost Recognition In the first quarter of 2019, the Company adopted Accounting Standards Update (ASU) 2014-9, Revenue from Contracts with Customers (Topic 606). Under the ASU, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers and with consideration of short-term nature of customer payments, the Company has adopted the practical expedient related to the financing component of the contract. The Company applied the five-step method outlined in the ASU to all contracts with customers and elected the modified retrospective implementation method. The Company generally has a single performance obligation in its arrangements with customers. The Company believes for its contracts with customers, control is transferred at a point in time, typically upon delivery to the customers. When the Company performs shipping and handling activities after the transfer of control to the customers (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. Adopting the practical expedient for contract costs, the Company expenses contract costs when incurred because the amortization period would have been less than one year. The implementation of the new standard does not have any material impact on the measurement or recognition of revenue of prior periods, however additional disclosures have been added in accordance with the ASU. Revenues from contracts with customers are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. The principal activities which we generate revenue include: sales of ethanol, sales of distiller grains and sales of corn oil. All revenue recognized in the income statement is considered to be revenue from contracts with customers. The disaggregation of revenue according to product line, along with accounts receivable from contracts with customers, is as disclosed in Note 5. Shipping costs incurred by the Company in the sale of ethanol, distiller grains and corn oil are not specifically identifiable and as a result, revenue from the sale of ethanol, distiller grains and corn oil are recorded based on the net selling price reported to the Company from its marketer. Railcar lease costs incurred by the Company in the sale and shipment of distiller grain products are included in cost of goods sold. Based upon the timing of the transfer of control of our products to our customers, there are no contract assets or liabilities as of January 31, 2020 . |
Grant Receivable and Deferred Revenue | Grant Receivable and Deferred Revenue Grants receivables are recorded when the payments to be received can be estimated and when payment is reasonably assured. The Company recorded a grant receivable and corresponding deferred revenue of approximately $1,400,000 associated with an agreement approved in December 2019 for tax increment financing monies associated with the plant expansion that was completed in January 2020 to be received over a 10 -year period for the tax increment financing monies. These grants were recorded at their net present value using a discount rate of approximately 5% . Related deferred revenue was recorded and is being amortized into income as a reduction of property taxes over the life of the grant. |
Inventory | Inventory Inventories are generally valued at the lower of weighted average cost or net realizable value. In the valuation of inventories and purchase commitments, net realizable value is defined as estimated selling price in the ordinary course of business less reasonable predictable costs of completion, disposal and transportation. |
Property and Equipment | Property & Equipment Property and equipment are stated at historical cost. Significant additions and betterments are capitalized, while expenditures for maintenance and repairs are charged to operations when incurred. The Company uses the straight-line method of computing depreciation over the estimated useful lives between 3 and 40 years. The Company reviews its property and equipment for impairment whenever events indicate that the carrying amount of the asset group may not be recoverable. If circumstances require a long-lived asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset group to the carrying value of the asset group. If the carrying value of the asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. |
Investment in commodities contracts, derivative instruments and hedging activities | Investment in commodities contracts, derivative instruments and hedging activities The Company evaluates its contracts to determine whether the contracts are derivative instruments. Certain contracts that meet the definition of a derivative may be exempted from derivative accounting and treated as normal purchases or normal sales if documented as such. 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. The Company enters into short-term cash, option and futures contracts as a means of securing corn and natural gas for the ethanol plant and managing exposure to changes in commodity and energy prices. The Company occasionally also enters into derivative contracts to hedge its exposure to price risk as it relates to ethanol sales. As part of its risk management process, the Company uses futures and option contracts through regulated commodity exchanges or through the over-the-counter market to manage its risk related to pricing of inventories. All of the Company's derivatives, other than those excluded under the normal purchases and sales exclusion, are designated as non-hedge derivatives, with changes in fair value recognized in net income. Although the contracts are economic hedges of specified risks, they are not designated or accounted for as hedging instruments. Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas are included as a component of cost of goods sold and derivative contracts related to ethanol are included as a component of revenues in the accompanying financial statements. The fair values of contracts are presented on the accompanying balance sheet as derivative instruments net of cash due from/to broker. |
Net loss per unit | Net earnings (loss) per unit Basic and diluted earnings (loss) per unit are computed using the weighted-average number of Class A and B units outstanding during the period. |
Fair Value | Fair Value Financial instruments include cash and equivalents, marketable securities, receivables, accounts payable, accrued expenses and derivative instruments. The fair value of marketable securities and derivative financial instruments is based on quoted market prices, as disclosed in Note 8. The fair value, determined using level 3 inputs, of all other current financial instruments is estimated to approximate carrying value due to the short-term nature of these instruments. |
Risks and Uncertainties | Risks and Uncertainties The Company has certain risks and uncertainties that it will experience during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distiller grains to customers primarily located in the United States. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. For the three months ended January 31, 2020 , ethanol sales accounted for approximately 79% of total revenue, distiller grains sales accounted for approximately 17% of total revenue and corn oil sales accounted for approximately 4% of total revenue while corn costs averaged approximately 79% of cost of goods sold. The Company's operating and financial performance is largely driven by the prices at which ethanol is sold and the net expense of corn. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and unleaded gasoline and the petroleum markets with ethanol selling, in general, for less than gasoline at the wholesale level. 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, weather, and government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, FASB issued ASU No. 2016-02 "Leases" ("ASU 2016-02"). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. Under the new guidance, lessees are required to recognize the following for all leases (with the exception of short-term leases): (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted cash flow basis; and (2) a "right of use" asset, which is an asset that represents the lessee's right to use the specified asset for the lease term. The Company adopted this accounting standard effective November 1, 2019. Upon adoption, the Company elected a practical expedient which allows existing leases to retain their classification as operating leases. The Company has elected to account for lease and related nonlease components as a single lease component. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Accounting Policies [Abstract] | |
Marketable Securities | The Company recorded interest, dividends and net realized and unrealized gains (losses) from these investments as part of other income as follows: Three Months Ended January 31, 2020 2019 Net earnings on marketable securities $ 8,000 $ 201,000 Marketable Securities As of Cost Fair Market Value January 31, 2020 $ 772,000 $ 911,000 October 31, 2019 $ 767,000 $ 871,000 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consisted of the following as of January 31, 2020 and October 31, 2019 : January 31, 2020 October 31, 2019 Raw Materials $ 3,993,021 $ 4,259,459 Work in Process 1,820,729 1,877,354 Finished Goods 1,444,644 2,397,545 Totals $ 7,258,394 $ 8,534,358 |
Commitments, Contingencies, A_2
Commitments, Contingencies, Agreements and Related Party (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Commitments, Contingencies and Agreements [Abstract] | |
Schedule of Related Party Transactions | Approximate sales and marketing fees related to the agreements in place are as follows: Three Months Ended January 31, 2020 2019 Sales ethanol $ 45,561,000 $ 34,912,000 Sales distiller grains 9,941,000 9,451,000 Sales corn oil 2,220,000 1,809,000 Marketing fees-ethanol $ 60,000 $ 61,000 Marketing fees-distiller grains 74,000 71,000 Marketing fees-corn oil 20,000 14,000 As of January 31, 2020 October 31, 2019 Amount due from RPMG $ 5,877,000 $ 2,489,000 |
Risk Management (Tables)
Risk Management (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Risk Management [Abstract] | |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The following table represents the approximate amount of realized and unrealized gains (losses) and changes in fair value recognized in earnings on commodity contracts for periods ended January 31, 2020 and 2019 and the fair value of derivatives as of January 31, 2020 and October 31, 2019: Income Statement Classification Realized Gain (Loss) Change in Unrealized Gain (Loss) Total Gain (Loss) Derivatives not designated as hedging instruments: Commodity Contracts for the Revenue $ (438,000 ) $ 403,000 $ (35,000 ) three months ended January 31, 2020 Cost of Goods Sold 1,376,000 (1,086,000 ) 290,000 Total $ 938,000 $ (683,000 ) $ 255,000 Commodity Contracts for the Revenue $ (34,000 ) $ 205,000 $ 171,000 three months ended January 31, 2019 Cost of Goods Sold 585,000 (375,000 ) 210,000 Total $ 551,000 $ (170,000 ) $ 381,000 |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | Balance Sheet Classification January 31, 2020 October 31, 2019 Futures and option contracts In gain position $ 1,220,000 $ 1,930,000 In loss position (581,000 ) (608,000 ) Cash held by (due to) broker 404,000 (206,000 ) Current Asset $ 1,043,000 $ 1,116,000 |
Long-term Purchase Commitment | Commitments Through Amount Sale commitments Corn Oil - fixed price February 2020 $ 1,040,000 Distiller Grains - fixed price March 2020 3,907,000 Purchase commitments Corn - fixed price October 2020 $ 5,468,000 Corn - basis contract July 2020 14,130,000 Natural gas - fixed price July 2021 7,849,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes financial assets and financial liabilities measured at the approximate fair value on a recurring basis, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: Total Level 1 Level 2 Level 3 Marketable securities: Assets, January 31, 2020 $ 911,000 $ 911,000 $ — $ — Assets, October 31, 2019 871,000 871,000 — — Derivative financial instruments: January 31, 2020 Assets $ 1,220,000 $ 738,000 $ 482,000 $ — Liabilities (581,000 ) (262,000 ) (319,000 ) — October 31, 2019 Assets $ 1,930,000 $ 1,650,000 $ 280,000 $ — Liabilities (608,000 ) (80,000 ) (528,000 ) — |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Investments [Abstract] | |
Schedule of Equity Method Investments | Condensed, combined unaudited financial information of the Company’s investments in Absolute Energy, Homeland Energy Solutions, Guardian Energy, Lawrenceville Tank and RPMG is as follows (in 000’s): Balance Sheet December 31, 2019 September 30, 2019 Current Assets $ 337,219 $ 337,643 Other Assets 254,437 258,655 Current Liabilities 238,144 224,439 Long-term Debt 50,182 55,368 Members’ Equity 303,330 316,491 Three Months Ended December 31, Income Statement 2019 2018 Revenue $ 217,042 $ 178,823 Gross Profit 23,252 4,216 Net Income (Loss) 21,062 (458 ) The Company recorded equity in net income of approximately (in 000's): Three Months Ended January 31, Equity in Net Income (Loss) 2020 2019 Absolute Energy $ 477 $ 208 Guardian Energy 959 — Homeland Energy Solutions 525 (166 ) Other 54 119 Total $ 2,015 $ 161 |
Lease Obligations (Tables)
Lease Obligations (Tables) | 3 Months Ended |
Jan. 31, 2020 | |
Leases [Abstract] | |
Schedule of Minimum Rental Commitments and Reconciliation of the Undiscounted Future Payments | At January 31, 2020 , the Company had the following approximate minimum rental commitments under non-cancelable operating leases for the twelve month period ended January 31: 2021 $ 1,152,000 2022 782,000 2023 528,000 2024 268,000 2025 67,000 Total lease commitments $ 2,797,000 A reconciliation of the undiscounted future payments in the schedule above and the lease liabilities recognized in the consolidated balance sheet as of January 31, 2020, is shown below. Undiscounted future payments $ 2,797,000 Discount effect (200,000 ) Discounted future payments $ 2,597,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies Production (Details) gal in Millions | 3 Months Ended |
Jan. 31, 2020companygal | |
Product Information [Line Items] | |
Number of entities | company | 5 |
Ethanol [Member] | |
Product Information [Line Items] | |
Annual production capacity | gal | 120 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies Grant Receivable and Deferred Revenue (Details) - USD ($) | 1 Months Ended | |
Jan. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | ||
Grants receivable | $ 1,400,000 | $ 1,400,000 |
Grant agreement, tax increment financing monies, period | 10 years | |
Grant agreement, discount rate | 5.00% | |
Deferred revenue | $ 1,400,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies Property and Equipment (Details) - Property, Plant and Equipment [Member] | 3 Months Ended |
Jan. 31, 2020 | |
Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 40 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies Marketable Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 31, 2020 | Jan. 31, 2019 | Oct. 31, 2019 | |
Debt Securities, Available-for-sale [Line Items] | |||
Marketable securities, gain (loss) | $ 8 | $ 201 | |
Marketable securities | 911 | $ 871 | |
Mutual Fund [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Marketable securities | $ 772 | $ 767 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies Concentration Risk (Details) | 3 Months Ended |
Jan. 31, 2020 | |
Revenue, Product and Service Benchmark [Member] | Ethanol [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 79.00% |
Revenue, Product and Service Benchmark [Member] | Distillers Grains [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 17.00% |
Revenue, Product and Service Benchmark [Member] | Corn Oil [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 4.00% |
Cost of Goods and Service Benchmark [Member] | Corn [Member] | |
Concentration Risk [Line Items] | |
Concentration risk, percentage | 79.00% |
Inventory (Details)
Inventory (Details) - USD ($) | Jan. 31, 2020 | Oct. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw Materials | $ 3,993,021 | $ 4,259,459 |
Work in Process | 1,820,729 | 1,877,354 |
Finished Goods | 1,444,644 | 2,397,545 |
Totals | $ 7,258,394 | $ 8,534,358 |
Bank Financing Long Term Debt (
Bank Financing Long Term Debt (Details) - Farm Credit Services of America [Member] - USD ($) | Jan. 31, 2020 | Oct. 31, 2019 |
Debt Instrument [Line Items] | ||
Original maximum borrowings | $ 35,000,000 | |
Availability | $ 10,000,000 | |
Stated interest rate | 3.15% | |
Effective interest rate | 4.82% | |
Outstanding borrowings | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - Director [Member] - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 31, 2020 | Jan. 31, 2019 | Oct. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Purchases from related parties | $ 11,042 | $ 9,113 | |
Amount owed to related parties | $ 496 | $ 547 |
Commitments, Contingencies, A_3
Commitments, Contingencies, Agreements and Related Party (Details) - USD ($) | 3 Months Ended | ||
Jan. 31, 2020 | Jan. 31, 2019 | Oct. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Total commitments under agreements | |||
Current planned expansion project costs | 2,246,355 | 5,038,278 | |
Investee [Member] | |||
Related Party Transaction [Line Items] | |||
Amount due from RPMG | 5,877,000 | $ 2,489,000 | |
Construction in Progress [Member] | |||
Related Party Transaction [Line Items] | |||
Costs incurred related to expansion project | 23,100,000 | ||
Current planned expansion project costs | 24,000,000 | ||
Remaining commitment | 500,000 | ||
Construction in Progress [Member] | Subsidiary of Common Parent [Member] | |||
Related Party Transaction [Line Items] | |||
Costs incurred related to expansion project | 7,900,000 | ||
Ethanol [Member] | Investee [Member] | |||
Related Party Transaction [Line Items] | |||
Sales | 45,561,000 | $ 34,912,000 | |
Marketing fees | 60,000 | 61,000 | |
Distillers Grains [Member] | Investee [Member] | |||
Related Party Transaction [Line Items] | |||
Sales | 9,941,000 | 9,451,000 | |
Marketing fees | 74,000 | 71,000 | |
Corn Oil [Member] | Investee [Member] | |||
Related Party Transaction [Line Items] | |||
Sales | 2,220,000 | 1,809,000 | |
Marketing fees | $ 20,000 | $ 14,000 |
Risk Management Derivative Inst
Risk Management Derivative Instruments - Income Statement (Details) - Not Designated as Hedging Instrument [Member] - Commodity Contract [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Realized Gain (Loss) | $ 938 | $ 551 |
Change in Unrealized Gain (Loss) | (683) | (170) |
Total Gain (Loss) | 255 | 381 |
Revenue [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Realized Gain (Loss) | (438) | (34) |
Change in Unrealized Gain (Loss) | 403 | 205 |
Total Gain (Loss) | (35) | 171 |
Cost of Goods Sold [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Realized Gain (Loss) | 1,376 | 585 |
Change in Unrealized Gain (Loss) | (1,086) | (375) |
Total Gain (Loss) | $ 290 | $ 210 |
Risk Management Derivative In_2
Risk Management Derivative Instruments - Balance Sheet Location (Details) - USD ($) | Jan. 31, 2020 | Oct. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Derivative instruments | $ 1,042,947 | $ 1,115,525 |
Fair Value, Recurring [Member] | Commodity Contract [Member] | Other Noncurrent Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Futures and option contracts | 1,220,000 | 1,930,000 |
Fair Value, Recurring [Member] | Commodity Contract [Member] | Other Noncurrent Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Futures and option contracts | 581,000 | 608,000 |
Fair Value, Recurring [Member] | Commodity Contract [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Cash held by (due to) broker | 404,000 | (206,000) |
Derivative instruments | $ 1,043,000 | $ 1,116,000 |
Risk Management Long Term Purch
Risk Management Long Term Purchase Commitments (Details) $ in Thousands | 3 Months Ended |
Jan. 31, 2020USD ($) | |
Affiliated Entity [Member] | |
Related Party Transaction [Line Items] | |
Purchase Obligation | $ 6,696 |
Fixed Price [Member] | Corn Oil [Member] | |
Long-term Purchase Commitment [Line Items] | |
Sale commitments, Amount | 1,040 |
Fixed Price [Member] | Distillers Grains [Member] | |
Long-term Purchase Commitment [Line Items] | |
Sale commitments, Amount | 3,907 |
Fixed Price [Member] | Corn [Member] | |
Long-term Purchase Commitment [Line Items] | |
Purchase commitments, Amount | 5,468 |
Fixed Price [Member] | Natural Gas [Member] | |
Long-term Purchase Commitment [Line Items] | |
Purchase commitments, Amount | 7,849 |
Basis Contract [Member] | Corn [Member] | |
Long-term Purchase Commitment [Line Items] | |
Purchase commitments, Amount | $ 14,130 |
Corn [Member] | |
Long-term Purchase Commitment [Line Items] | |
Product usage, percentage, next 12 months | 13.00% |
Derivative, term of contract | 12 months |
Ethanol [Member] | |
Long-term Purchase Commitment [Line Items] | |
Product usage, percentage, next 12 months | 6.00% |
Derivative, term of contract | 12 months |
Natural Gas [Member] | |
Long-term Purchase Commitment [Line Items] | |
Product usage, percentage, next 12 months | 68.00% |
Derivative, term of contract | 12 months |
Product usage, percentage, next 24 months | 28.00% |
Long-term purchase commitment, period | 24 months |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jan. 31, 2020 | Oct. 31, 2019 |
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Marketable securities | $ 911 | $ 871 |
Commodity Contract [Member] | Other Current Assets [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Marketable securities | 911 | 871 |
Derivative Assets | 1,220 | 1,930 |
Commodity Contract [Member] | Other Current Assets [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Marketable securities | 871 | |
Derivative Assets | 738 | 1,650 |
Commodity Contract [Member] | Other Current Assets [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Marketable securities | 0 | 0 |
Derivative Assets | 482 | 280 |
Commodity Contract [Member] | Other Current Assets [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Marketable securities | 0 | 0 |
Derivative Assets | 0 | 0 |
Commodity Contract [Member] | Liability [Member] | Fair Value, Recurring [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Derivative Liabilities | (581) | (608) |
Commodity Contract [Member] | Liability [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Derivative Liabilities | (262) | (80) |
Commodity Contract [Member] | Liability [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Derivative Liabilities | (319) | (528) |
Commodity Contract [Member] | Liability [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | ||
Derivative Liabilities | $ 0 | $ 0 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Jan. 31, 2020 | Jan. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | |
Balance Sheet | |||||
Current Assets | $ 337,219 | $ 337,643 | |||
Other Assets | 254,437 | 258,655 | |||
Current Liabilities | 238,144 | 224,439 | |||
Long-term Debt | 50,182 | 55,368 | |||
Members’ Equity | 303,330 | $ 316,491 | |||
Income Statement | |||||
Revenue | 217,042 | $ 178,823 | |||
Gross Profit | 23,252 | 4,216 | |||
Net Income (Loss) | $ 2,015 | $ 161 | $ 21,062 | $ (458) | |
Absolute Energy [Member] | |||||
Income Statement | |||||
Net Income (Loss) | 477 | 208 | |||
Guardian Energy [Member] | |||||
Income Statement | |||||
Net Income (Loss) | 959 | 0 | |||
Homeland Energy Solutions [Member] | |||||
Income Statement | |||||
Net Income (Loss) | 525 | (166) | |||
Other Investee [Member] | |||||
Income Statement | |||||
Net Income (Loss) | $ 54 | $ 119 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | Feb. 17, 2020USD ($)$ / shares |
Subsequent Event [Line Items] | |
Cash distribution (in dollars per share) | $ / shares | $ 0.10 |
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Declared | $ | $ 1,987,300 |
Lease Obligations - Narrative (
Lease Obligations - Narrative (Details) - USD ($) | 3 Months Ended | |
Jan. 31, 2020 | Jan. 31, 2019 | |
Leases [Abstract] | ||
Operating lease, term | 5 years | |
Rent expense | $ 354,000 | |
Rent expense | $ 383,000 | |
Operating lease, weighted average remaining lease term | 21 months 17 days | |
Operating lease, discount rate | 4.95% | |
Right of use asset operating leases | $ 2,597,026 | |
Operating lease, liability | $ 2,597,000 |
Lease Obligations - Schedule of
Lease Obligations - Schedule of Minimum Rental Commitments (Details) $ in Thousands | Jan. 31, 2020USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2021 | $ 1,152 |
2022 | 782 |
2023 | 528 |
2024 | 268 |
2025 | 67 |
Total lease commitments | $ 2,797 |
Lease Obligations - Schedule _2
Lease Obligations - Schedule of Reconciliation of the Undiscounted Future Payments (Details) $ in Thousands | Jan. 31, 2020USD ($) |
Leases [Abstract] | |
Undiscounted future payments | $ 2,797 |
Discount effect | (200) |
Discounted future payments | $ 2,597 |