Heron Lake BioEnergy (HLBYL) 10-Q16 Sep 142014 Q3 Quarterly reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Jul. 31, 2014	Aug. 15, 2014	Aug. 15, 2014
	Jul. 31, 2014	Class A	Class B
Document Information [Line Items]	'	'	'
Entity Registrant Name	'Heron Lake BioEnergy, LLC	'	'
Entity Central Index Key	'0001286964	'	'
Current Fiscal Year End Date	'--10-31	'	'
Entity Current Reporting Status	'Yes	'	'
Entity Filer Category	'Non-accelerated Filer	'	'
Document Type	'10-Q	'	'
Document Period End Date	31-Jul-14	'	'
Amendment Flag	'false	'	'
Document Fiscal Year Focus	'2014	'	'
Document Fiscal Period Focus	'Q3	'	'
Entity Common Stock, Shares Outstanding	'	49,812,107	15,000,000

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (USD $)	Jul. 31, 2014	Oct. 31, 2013
Current Assets	'	'
Cash	$1,151,791	$543,238
Restricted cash	241,800	'
Accounts receivable	6,801,999	749,426
Inventory	6,201,340	5,604,309
Prepaid expenses	270,326	952,271
Total current assets	14,667,256	7,849,244
Property and Equipment	'	'
Land and improvements	9,111,838	9,111,838
Plant buildings and equipment	72,905,614	71,275,334
Vehicles and other equipment	611,976	611,976
Office buildings and equipment	610,791	612,151
Construction in progress	2,464,033	1,394,191
Property, plant and equipment, gross	85,704,252	83,005,490
Accumulated depreciation	-34,553,750	-31,335,218
Net Property and Equipment	51,150,502	51,670,272
Other Assets	'	'
Other intangible assets, net	169,833	218,370
Other assets	712,504	1,056,031
Total other assets	882,337	1,274,401
Total Assets	66,700,095	60,793,917
Current Liabilities	'	'
Current maturities of long-term debt	955,752	3,371,575
Accounts payable	4,744,492	1,300,727
Derivative Liability, Current	85,487	0
Accrued expenses	364,115	389,608
Total current liabilities	6,149,846	5,061,910
Long-Term Debt, net of current maturities	9,772,607	28,181,155
Members' Equity	'	'
Members' Equity attributable to Heron Lake BioEnergy, LLC: 77,932,107 and 64,812,107 units issued and outstanding at July 31, 2014 and October 31, 2013, respectively.	50,011,532	27,142,275
Noncontrolling interest	766,110	408,577
Total membersb equity	50,777,642	27,550,852
Total Liabilities and Membersb Equity	$66,700,095	$60,793,917

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Parenthetical)	Jul. 31, 2014	Oct. 31, 2013
Statement of Financial Position [Abstract]	'	'
Members' Equity, Units issued	77,932,107	64,812,107
Members' Equity, Units outstanding	77,932,107	64,812,107

Condensed_Consolidated_Stateme

Condensed Consolidated Statements of Operations (USD $)	3 Months Ended		9 Months Ended
Condensed Consolidated Statements of Operations (USD $)	Jul. 31, 2014	Jul. 31, 2013	Jul. 31, 2014	Jul. 31, 2013
Income Statement [Abstract]	'	'	'	'
Revenues	$39,082,103	$45,583,441	$119,141,711	$125,203,672
Cost of Goods Sold	30,790,088	41,523,283	96,066,933	119,568,050
Gross Profit	8,292,015	4,060,158	23,074,778	5,635,622
Selling, General, and Administrative Expenses	777,274	674,200	2,460,719	2,537,919
Operating Income	7,514,741	3,385,958	20,614,059	3,097,703
Other Income (Expense)	'	'	'	'
Interest income	220	310	658	17,063
Interest expense	-656,507	-755,532	-1,457,086	-2,254,167
Other income	17,166	10,925	48,636	30,198
Total other expense, net	-639,121	-744,297	-1,407,792	-2,206,906
Net Income	6,875,620	2,641,661	19,206,267	890,797
Net Income Attributable to Noncontrolling Interest	-89,866	-87,168	-273,010	-254,999
Net Income Attributable to Heron Lake BioEnergy, LLC	$6,785,754	$2,554,493	$18,933,257	$635,798
Weighted Average Units Outstanding - Basic (in shares)	69,137,382	38,875,678	66,259,166	38,706,942
Net Income (Loss) Per Unit Attributable to Heron Lake BioEnergy, LLC - Basic (Class A and B) (usd per share)	$0.10	$0.07	$0.29	$0.02
Weighted Average Units Outstanding - Diluted (in shares)	78,394,634	42,741,063	78,546,004	40,000,140
Net Income (Loss) Per Unit Attributable to Heron Lake BioEnergy, LLC - Diluted (Class A and B) (usd per share)	$0.09	$0.06	$0.24	$0.02

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (USD $)	9 Months Ended
Consolidated Statements of Cash Flows (USD $)	Jul. 31, 2014	Jul. 31, 2013
Cash Flow From Operating Activities	'	'
Net income	$19,206,267	$890,797
Adjustments to reconcile net income to net cash provided by operating activities:	'	'
Depreciation and amortization	3,308,173	3,034,267
Change in fair value of commodity derivative instruments	-206,744	0
Write off of Deferred Debt Issuance Cost	328,595	0
Change in operating fair value of operating assets and liabilities:	'	'
Restricted cash	-241,800	139,045
Accounts receivable	-6,052,573	-1,220,360
Inventory	-597,031	1,285,415
Prepaid expenses and other assets	655,773	-312,197
Accounts payable	3,443,765	-1,148,989
Accrued expenses	59,030	-29,517
Commodity derivative instruments	292,231	0
Net cash provided by operating activities	20,195,686	2,638,461
Cash Flows from Investing Activities	'	'
Capital expenditures	-2,698,762	-268,724
Proceeds from Sale of Property, Plant, and Equipment	0	3,728,669
Net cash provided by (used in) investing activities	-2,698,762	3,459,945
Repayments of Lines of Credit	0	-480,000
Cash Flows from Financing Activities	'	'
Proceeds from long-term debt	0	520,210
Proceeds from Convertible Debt	0	1,407,000
Repayments of Long-term Debt	-16,681,371	-13,870,555
Payments of Deferred Financing Fees	0	-254,485
Increase (Decrease) in Restricted Cash	0	65,259
Proceeds from Issuance of Common Limited Partners Units	0	6,922,500
Repayments of Subordinated Debt	-207,000	0
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders	0	-38,932
Net cash used in financing activities	-16,888,371	-5,729,003
Net increase in cash	608,553	369,403
Cash - Beginning of period	543,238	653,361
Cash - End of period	1,151,791	1,022,764
Supplemental Disclosure of Cash Flow Information	'	'
Interest expense paid	1,173,443	2,253,814
Supplemental Disclosure of Non-Cash Activities	'	'
Cancellation of accrued distribution to noncontrolling interest	84,523	0
Distribution to noncontrolling interest in accrued expenses	0	46,187
Subordinated debt, conversion amount	$3,936,000	$0

SUMMARY_OF_SIGNIFICANT_ACCOUNT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Jul. 31, 2014
Accounting Policies [Abstract]	'
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	'
	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

	The accompanying unaudited condensed consolidated interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. 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 financial statements for the year ended October 31, 2013, contained in the Company’s annual report on Form 10-K.

	In the opinion of management, the condensed consolidated interim 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 interim financial statements should not be regarded as necessarily indicative of results that may be expected for any other quarter or for the fiscal year.

	Nature of Business

	The Company owns and operates an ethanol plant near Heron Lake, Minnesota with a permitted capacity of approximately 59.2 million gallons per year. In addition, the Company produces and sells distillers grains with solubles and corn oil as co-products of ethanol production. Additionally, the Company, through a majority owned subsidiary, operates a natural gas pipeline that provides natural gas to the Company's ethanol production facility.

	Principles of Consolidation

	The financial statements as of July 31, 2014 include the accounts of Heron Lake BioEnergy, LLC and its wholly owned subsidiary, HLBE Pipeline Company, LLC, collectively the "Company." HLBE Pipeline Company, LLC owns 73% of Agrinatural Gas, LLC (“Agrinatural”). Given the Company’s control over the operations of Agrinatural and its majority voting interest, the Company consolidates the financial statements of Agrinatural with its consolidated financial statements, with the equity and earnings (loss) attributed to the remaining 27% noncontrolling interest identified separately in the accompanying Consolidated Balance Sheets and Statements of Operations.

	The financial statements as of October 31, 2013 include the accounts of the Company's formerly wholly owned subsidiary, Lakefield Farmers Elevator, LLC. Lakefield Farmers Elevator, LLC sold substantially all of its assets during the second quarter of 2013.

	All significant intercompany balances and transactions are eliminated in consolidation.

	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. The Company uses estimates and assumptions in accounting for significant matters including, among others, the analysis of impairment of long-lived assets and valuation of commodity forward contract commitments and inventory. The Company periodically reviews estimates and assumptions, and the effects of revisions are reflected in the period in which the revision is made. Actual results could differ from those estimates.

	Noncontrolling Interest

	Amounts recorded as noncontrolling interest on the balance sheets relate to the net investment by an unrelated party in Agrinatural. Income and losses are allocated to the members of Agrinatural based on their respective percentage of membership units held. Agrinatural will provide natural gas to the plant with a specified price per MMBTU for an initial term of 5 years expiring October 31, 2016, with two renewal options for 5 year periods. On July 1, 2014, the Company entered into amendment of its natural gas transportation agreement dated May 13, 2011 with Agrinatural in which the Company agreed on an early exercise of one of the two automatic five-year term renewals thereby extending the term of the transportation agreement to October 31, 2021.

	The Company previously declared a distribution to noncontrolling interest members for approximately $85,000. This amount was recorded within accrued expenses at October 31, 2013. During the six month period ended April 30, 2014, the Company canceled this distribution.

	Revenue Recognition

	Revenue from sales is recorded when title transfers to the customer, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists, and the sales price is fixed or determinable. The title transfers when the product is loaded into the railcar or truck, the customer takes ownership and assumes risk of loss.

	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 incurred by the Company 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 ethanol related products are included in cost of goods sold.

RISKS_AND_UNCERTAINTIES

RISKS AND UNCERTAINTIES	9 Months Ended
RISKS AND UNCERTAINTIES	Jul. 31, 2014
Risks and Uncertainties [Abstract]	'
RISKS AND UNCERTAINTIES	'
	RISKS AND UNCERTAINTIES

	The Company has certain risks and uncertainties that it experienced 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 and distillers grains to customers primarily located in the U.S. Corn for the production process is supplied to the plant primarily from local agricultural producers. Ethanol sales average 70% -80% of total revenues and corn costs average 70%-90% of cost of goods sold.

	The Company’s operating and financial performance is largely driven by the prices at which it sells 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, 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 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, 2014
Inventory Disclosure [Abstract]	'
INVENTORY	'
	INVENTORY

	Inventory consisted of the following:



			July 31,		October 31,
			2014		2013
		Raw materials	$	1,770,298	$	632,790

		Work in process	704,826		845,628

		Finished Goods	2,604,999		3,324,166

		Supplies	1,121,217		801,725

		Total	$	6,201,340	$	5,604,309

DERIVATIVE_INSTRUMENTS

DERIVATIVE INSTRUMENTS

9 Months Ended

Jul. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

As of July 31, 2014, the total notional amount of the Company’s outstanding corn derivative instruments was approximately 3,450,000 bushels that were entered into to hedge forecasted corn purchases through May 2015. There may be offsetting positions that are shown on a net basis that could lower the notional amount of positions outstanding as disclosed above.

The following tables provide details regarding the Company’s derivative instruments at July 31, 2014, none of which are designated as hedging instruments:

Balance Sheet location

Assets

Liabilities

Corn contracts

Commodity derivative instruments

—

85,487

The Company did not have any outstanding derivative positions at October 31, 2013.

The following tables provide details regarding the gains and losses from Company’s derivative instruments in statements of operations, none of which are designated as hedging instruments:

Statement of

Three Months Ended July 31,

Operations Locations

2014

2013

Corn contracts

Cost of goods sold

(125,461

)

—

Statement of

Nine Months Ended July 31,

Operations Locations

2014

2013

Corn contracts

Cost of goods sold

206,744

—

FAIR_VALUE_FAIR_VALUE

FAIR VALUE FAIR VALUE	9 Months Ended
	Jul. 31, 2014
Fair Value Disclosures [Abstract]	'
FAIR VALUE	'
	FAIR VALUE

	The following table provides information on those derivative liabilities measured at fair value on a recurring basis at July 31, 2014:


			Fair Value Measurement Using
	Financial Liabilities:	Carrying Amount in Balance Sheet	Quoted Prices in Active Markets	Significant Other Observable Inputs
		31-Jul-14	(Level 1)	(Level 2)	Significant unobservable inputs
					(Level 3)
	Commodity derivative instruments	$85,487	$85,487	$—	$—

	The Company did not have any assets or liabilities measured at fair value on a recurring basis at October 31, 2013.

	HLBE 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.

DEBT_FINANCING

DEBT FINANCING	9 Months Ended
	Jul. 31, 2014
Debt Disclosure [Abstract]	'
DEBT FINANCING	'
	DEBT FINANCING

	Debt financing consists of the following:



		July 31, 2014			October 31,
					2013
	Term note payable to lending institution, see terms below.	$	—		$	16,577,641

	Revolving term loan to lending institution, see terms below.	7,486,628			5,979,876

	Assessments payable.	2,440,743			2,604,678

	Note payable to electrical company.	237,500			293,750

	Note payable on pipeline assets (Agrinatural), see terms below.	—			1,013,132

	Note payable to noncontrolling interest member of Agrinatural.	300,000			300,000

	Corn oil recovery system note payable.	263,488			640,653

	Subordinated convertible debt.	—			4,143,000

	Total	10,728,359			31,552,730

	Less amounts due on demand or within one year	955,752			3,371,575

	Net long term debt	$	9,772,607		$	28,181,155


	Term Note Payable

	The Company had a term loan with AgStar Financial Services, FCLA ("AgStar"). The Company was making equal monthly payments of principal and interest of approximately $223,000 on the term loan based on a 10-year amortization, provided the entire principal balance and accrued and unpaid interest on the term loan was due and payable in full on the maturity date of September 1, 2016. On July 30, 2014, using funds from the Credit Facility that the Company executed with AgStar, the Company repaid the entire outstanding balance of our credit facilities under the Sixth Amended and Restated Master Loan Agreement dated May 17, 2013 with AgStar.

	Revolving Term Loan

	The Company had a three-year revolving term loan commitment in the amount of $18.5 million, under which AgStar agreed to make periodic advances to the Company up to this original amount until September 1, 2016.

	On July 29, 2014, the Company entered into a new master loan agreement and related loan documents (the “Credit Facility”) the with AgStar Financial Services, FCLA (“AgStar”). The Credit Facility provides the Company with a new comprehensive revolving term loan commitment in the amount of $28 million (the “Revolving Term Loan”), under which AgStar agreed to make one or more advances to the Company for use by the Company to repay the Company's debt currently outstanding with AgStar, provide a loan financing to Agrinatural Gas, LLC, the Company's indirect subsidiary, provide working capital to the Company, and pay fees and expenses in connection with the Company's refinancing. Following the loan closing, the Company had approximately $7.5 million outstanding on the Revolving Term Loan.

	Amounts borrowed by the Company under the Revolving Term Loan and repaid or prepaid may be re-borrowed at any time prior to the March 1, 2022 maturity date. Under the terms of the Credit Facility, the Revolving Term Loan commitment is scheduled to decline by $3.5 million annually, beginning on March 1, 2015 and each anniversary date thereafter. Interest on the Revolving Term Loan accrues at a variable rate equal to 3.25% above the One-Month London Interbank Offered Rate (“LIBOR”) Index rate. The Company may elect to enter into a fixed interest rate on this loan at various times throughout the term of the loan as provided in the loan agreements. The Company also agreed to pay an unused commitment fee on the unused portion of the Revolving Term Loan commitment at the rate of 0.50% per annum. The Revolving Term Loan is subject to a prepayment fee for any prepayment on the Term Loan prior to July 1, 2016 due to refinancing. The Credit Facility contains customary covenants. The loan is secured by substantially all of the Company assets including a subsidiary guarantee.

	As part of the Credit Facility closing, we entered into an Administrative Agency Agreement with CoBank, ACP (“CoBank”). CoBank purchased a participation interest in the AgStar loans and was appointed the administrative agent for the purpose of servicing the loans. As a result, CoBank will act as the agent for AgStar with respect to the Credit Facility.

	Note Payable on Pipeline Assets (Agrinatural)

	The Company had a note payable to a lending institution for the construction of the pipeline assets of Agrinatural. The note was initially due in December 2011, however, was subsequently converted in February 2012 to a term loan with a three year repayment period. During November 2013, the note payable was refinanced with the lending institution with additional borrowings of approximately$759,000 being made. Amounts outstanding on the term loan were to bear interest at 5.29%, payable monthly, with a maturity in December 2016. The term loan was secured by substantially all assets of Agrinatural. The note was paid off in full on July 29, 2014 by Agrinatural.

	Subordinated Convertible Debt

	On May 17, 2013, the Company’s Board of Governors loaned the Company approximately $1.4 million as part of the subordinated convertible debt offering. An additional $3.7 million was raised as part of a subordinated convertible debt offering during September 2013. The convertible secured debt was subordinated to the AgStar debt. The notes were to bear interest at 7.25% and were due in October 1, 2018. On October 1, 2014, or immediately prior to the sale of all or effectively all of the Company assets, each note was convertible into Class A stock at a rate of $0.30 per Class A unit. The Company reserved the right to issue Class B units upon conversion if the principal balance of the convertible debt exceeded the authorized Class A units at the conversion date. At the issuance, each debt holder had the option to convert to Class A units. As a result, holders elected to convert $934,500 in September 2013 for 3,115,000 Class A units.

	On May 2, 2014, the Company issued a notice that the Company intended to redeem all of the outstanding principal amount of the subordinated convertible notes on July 1, 2014. The announced redemption was pursuant to the Company's "optional redemption" right in the indenture governing the notes. The outstanding principal balance of $4,143,000, could be redeemed at a redemption price equal to 100% of the aggregate principal amount plus accrued and unpaid interest to, but excluding, the redemption date. The Company's obligation to pay the redemption price on the redemption date was subject to the right of the holders of the notes to elect to convert the principal amount of their notes into capital units of the Company at a conversion rate of $0.30 per unit.

	As of the close of business on June 20, 2014, the last day to elect conversion, note holders holding an aggregate principal amount of $3,936,000 of Notes elected to convert their Notes into units of the Company. On July 1, 2014, the Company issued 13,120,000 Class A units of the Company to the holders of the Notes electing conversion and redeemed the remaining $207,000 of the Notes at par value. In addition, on the same day, the Company paid accrued and unpaid interest through July 1, 2014 to all note holders, including those electing conversion, per the terms of the Notes and the Indenture. Following the issuance of the Class A units described above, the Company has a total of 62,932,107 Class A units and 15,000,000 Class B units issued and outstanding, for an aggregate total of 77,932,107 units issued and outstanding.

	Estimated annual maturities of debt at July 31, 2014 are as follows based on the most recent debt agreements:



		2015	$	955,752

	2016	410,383

	2017	404,207

	2018	336,341

	2019	7,809,647

	After 2019	812,029

	Total long-term debt	$	10,728,359


Related Party Demand Promissory Note

Agrinatural Gas, LLC was loaned $500,000 from Granite Falls Energy, LLC, a related party, during July 2014. The demand promissory note accrued interest at 5.29% and payment was due in full on or before July 31, 2014. Agrinatural Gas, LLC paid the balance in full, including accrued interest, in July 2014.

COMMITMENTS_AND_CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
COMMITMENTS AND CONTINGENCIES	Jul. 31, 2014
Commitments and Contingencies Disclosure [Abstract]	'
COMMITMENTS AND CONTINGENCIES	'
	COMMITMENTS AND CONTINGENCIES

	Forward Contracts

	At July 31, 2014, the Company had basis contracts for forward corn purchase commitments for approximately 2,898,000 bushels for deliveries through January 2015.

	At July 31, 2014, the Company had forward contracts to sell approximately $12,812,000 of ethanol for various delivery periods from August 2014 through March 2015 which approximates 19% of its anticipated ethanol sales during that period.

	At July 31, 2014, the Company had forward contracts to sell approximately $2,042,000 of distillers grains for delivery in August 2014 through March 2015 which approximates 15% of its anticipated distillers grain sales during that period.

	At July 31, 2014, the Company has natural gas agreements with a minimum purchase commitment of approximately 1.6 million MMBTU per year until October 2014.

MEMBERS_EQUITY

MEMBERS' EQUITY	9 Months Ended
MEMBERS' EQUITY	Jul. 31, 2014
Equity [Abstract]	'
MEMBERS' EQUITY	'
	MEMBERS’ EQUITY

	The Company is authorized to issue 80,000,000 capital units, of which 65,000,000 have been designated Class A units and 15,000,000 have been designated as Class B units. Members of the Company are holders of units who have been admitted as members and who hold at least 2,500 units. Any holder of units who is not a member will not have voting rights. Transferees of units must be approved by our board of governors to become members. Members are entitled to one vote for each unit held. Subject to the Member Control Agreement, all units share equally in the profits and losses and distributions of assets on a per unit basis.

	On July 1, 2014, the Company issued 13,120,000 Class A units of the Company to the holders of the Notes electing conversion. Following the issuance of the Class A units described above, the Company has a total of 62,932,107 Class A units and 15,000,000 Class B units issued and outstanding, for an aggregate total of 77,932,107 units issued and outstanding as of July 31, 2014. On October 31, 2013, there were 49,812,107 Class A units issued and outstanding and 15,000,000 Class B units issued and outstanding, for an aggregate total of 64,812,107.

Leases_Notes

Leases (Notes)	9 Months Ended
Leases (Notes)	Jul. 31, 2014
Leases [Abstract]	'
Lease, Policy [Policy Text Block]	'
	LEASES

	The Company leases equipment, primarily rail cars, under operating leases through 2017. Rent expense for these leases was approximately $503,000 and $1,327,000 for the three and nine months ended July 31, 2014, respectively.

SUMMARY_OF_SIGNIFICANT_ACCOUNT1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Jul. 31, 2014
Accounting Policies [Abstract]	'
Nature of Business	'
	Nature of Business

	The Company owns and operates an ethanol plant near Heron Lake, Minnesota with a permitted capacity of approximately 59.2 million gallons per year. In addition, the Company produces and sells distillers grains with solubles and corn oil as co-products of ethanol production.
Principles of Consolidation	'
	Principles of Consolidation

	The financial statements as of July 31, 2014 include the accounts of Heron Lake BioEnergy, LLC and its wholly owned subsidiary, HLBE Pipeline Company, LLC, collectively the "Company." HLBE Pipeline Company, LLC owns 73% of Agrinatural Gas, LLC (“Agrinatural”). Given the Company’s control over the operations of Agrinatural and its majority voting interest, the Company consolidates the financial statements of Agrinatural with its consolidated financial statements, with the equity and earnings (loss) attributed to the remaining 27% noncontrolling interest identified separately in the accompanying Consolidated Balance Sheets and Statements of Operations.

	The financial statements as of October 31, 2013 include the accounts of the Company's formerly wholly owned subsidiary, Lakefield Farmers Elevator, LLC. Lakefield Farmers Elevator, LLC sold substantially all of its assets during the second quarter of 2013.

	All significant intercompany balances and transactions are eliminated in consolidation.
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. The Company uses estimates and assumptions in accounting for significant matters including, among others, the analysis of impairment of long-lived assets and valuation of commodity forward contract commitments and inventory. The Company periodically reviews estimates and assumptions, and the effects of revisions are reflected in the period in which the revision is made. Actual results could differ from those estimates.
Noncontrolling Interest	'
	Noncontrolling Interest

	Amounts recorded as noncontrolling interest on the balance sheets relate to the net investment by an unrelated party in Agrinatural. Income and losses are allocated to the members of Agrinatural based on their respective percentage of membership units held. Agrinatural will provide natural gas to the plant with a specified price per MMBTU for an initial term of 5 years expiring October 31, 2016, with two renewal options for 5 year periods. On July 1, 2014, the Company entered into amendment of its natural gas transportation agreement dated May 13, 2011 with Agrinatural in which the Company agreed on an early exercise of one of the two automatic five-year term renewals thereby extending the term of the transportation agreement to October 31, 2021.

	The Company previously declared a distribution to noncontrolling interest members for approximately $85,000. This amount was recorded within accrued expenses at October 31, 2013. During the six month period ended April 30, 2014, the Company canceled this distribution.
Revenue Recognition	'
	Revenue Recognition

	Revenue from sales is recorded when title transfers to the customer, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists, and the sales price is fixed or determinable. The title transfers when the product is loaded into the railcar or truck, the customer takes ownership and assumes risk of loss.

	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 incurred by the Company 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 ethanol related products are included in cost of goods sold.

INVENTORY_Tables

INVENTORY (Tables)	9 Months Ended
	Jul. 31, 2014
Inventory Disclosure [Abstract]	'
Schedule of inventory	'
	Inventory consisted of the following:



			July 31,		October 31,
			2014		2013
		Raw materials	$	1,770,298	$	632,790

		Work in process	704,826		845,628

		Finished Goods	2,604,999		3,324,166

		Supplies	1,121,217		801,725

		Total	$	6,201,340	$	5,604,309

DERIVATIVE_INSTRUMENTS_Tables

DERIVATIVE INSTRUMENTS (Tables)

9 Months Ended

Jul. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following tables provide details regarding the Company’s derivative instruments at July 31, 2014, none of which are designated as hedging instruments:

Balance Sheet location

Assets

Liabilities

Corn contracts

Commodity derivative instruments

—

85,487

Schedule of losses from derivative instruments included in the Statements of Operations

The following tables provide details regarding the gains and losses from Company’s derivative instruments in statements of operations, none of which are designated as hedging instruments:

Statement of

Three Months Ended July 31,

Operations Locations

2014

2013

Corn contracts

Cost of goods sold

(125,461

)

—

Statement of

Nine Months Ended July 31,

Operations Locations

2014

2013

Corn contracts

Cost of goods sold

206,744

—

FAIR_VALUE_Tables

FAIR VALUE (Tables)	9 Months Ended
FAIR VALUE (Tables)	Jul. 31, 2014
Fair Value Disclosures [Abstract]	'
Derivative Liabilities Measured at Fair Value on a Recurring Basis	'
	The following table provides information on those derivative liabilities measured at fair value on a recurring basis at July 31, 2014:


			Fair Value Measurement Using
	Financial Liabilities:	Carrying Amount in Balance Sheet	Quoted Prices in Active Markets	Significant Other Observable Inputs
		31-Jul-14	(Level 1)	(Level 2)	Significant unobservable inputs
					(Level 3)
	Commodity derivative instruments	$85,487	$85,487	$—	$—

DEBT_FINANCING_Tables

DEBT FINANCING (Tables)	9 Months Ended
	Jul. 31, 2014
Debt Disclosure [Abstract]	'
Schedule of debt financing	'
	Debt financing consists of the following:



		July 31, 2014			October 31,
					2013
	Term note payable to lending institution, see terms below.	$	—		$	16,577,641

	Revolving term loan to lending institution, see terms below.	7,486,628			5,979,876

	Assessments payable.	2,440,743			2,604,678

	Note payable to electrical company.	237,500			293,750

	Note payable on pipeline assets (Agrinatural), see terms below.	—			1,013,132

	Note payable to noncontrolling interest member of Agrinatural.	300,000			300,000

	Corn oil recovery system note payable.	263,488			640,653

	Subordinated convertible debt.	—			4,143,000

	Total	10,728,359			31,552,730

	Less amounts due on demand or within one year	955,752			3,371,575

	Net long term debt	$	9,772,607		$	28,181,155

Schedule of estimated maturities of debt	'
	Estimated annual maturities of debt at July 31, 2014 are as follows based on the most recent debt agreements:



		2015	$	955,752

		2016	410,383

		2017	404,207

		2018	336,341

		2019	7,809,647

		After 2019	812,029

		Total long-term debt	$	10,728,359

SUMMARY_OF_SIGNIFICANT_ACCOUNT2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	9 Months Ended
	Jul. 31, 2014	Jul. 31, 2013
	option
	gal
Accounting Policies [Abstract]	'	'
Permitted capacity of Ethanol plant owned and operated	59,200,000	'
Summary of significant accounting policies	'	'
Initial term of providing natural gas to the plant	'5 years	'
Number of renewal options	2	'
Term of renewed contract	'5 years	'
Cancellation of accrued distribution, noncontrolling interest	$84,523	$0
HLBE Pipeline Company, LLC	'	'
Summary of significant accounting policies	'	'
Percentage of Agrinatural Gas, LLC owned by HLBE Pipeline Company, LLC	73.00%	'
Agrinatural	'	'
Summary of significant accounting policies	'	'
Remaining percentage in Agrinatural Gas, LLC included as noncontrolling interest (as a percent)	27.00%	'
Cancellation of accrued distribution, noncontrolling interest	$85,000	'

UNCERTAINTIES_Details

UNCERTAINTIES (Details)	9 Months Ended
UNCERTAINTIES (Details)	Jul. 31, 2014
Total revenues \| Ethanol \| Minimum	'
UNCERTAINTIES	'
Average percentage of total sales or cost of goods sold	70.00%
Total revenues \| Ethanol \| Maximum	'
UNCERTAINTIES	'
Average percentage of total sales or cost of goods sold	80.00%
Cost of goods sold \| Corn \| Minimum	'
UNCERTAINTIES	'
Average percentage of total sales or cost of goods sold	70.00%
Cost of goods sold \| Corn \| Maximum	'
UNCERTAINTIES	'
Average percentage of total sales or cost of goods sold	90.00%

INVENTORY_Details

INVENTORY (Details) (USD $)	Jul. 31, 2014	Oct. 31, 2013
Inventory Disclosure [Abstract]	'	'
Raw materials	$1,770,298	$632,790
Work in process	704,826	845,628
Finished Goods	2,604,999	3,324,166
Supplies	1,121,217	801,725
Total	$6,201,340	$5,604,309

DERIVATIVE_INSTRUMENTS_Details

DERIVATIVE INSTRUMENTS (Details) (USD $)	3 Months Ended		9 Months Ended
DERIVATIVE INSTRUMENTS (Details) (USD $)	Jul. 31, 2014	Jul. 31, 2013	Jul. 31, 2014	Jul. 31, 2013
Derivative Instruments	'	'	'	'
Notional amount of outstanding derivatives	3,450,000	'	3,450,000	'
Corn contracts	'	'	'	'
Derivative Instruments	'	'	'	'
Derivative Asset	$0	'	$0	'
Derivative Liability	85,487	'	85,487	'
Not Designated as Hedging Instrument \| Corn contracts	'	'	'	'
Derivative Instruments	'	'	'	'
Losses from derivative instruments	($125,461)	$0	$206,744	$0

FAIR_VALUE_Details

FAIR VALUE (Details) (USD $)	Jul. 31, 2014
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'
Commodity derivative instruments	$85,487
Level 1 \| Fair Value	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'
Commodity derivative instruments	85,487
Level 2 \| Fair Value	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'
Commodity derivative instruments	0
Level 3 \| Fair Value	'
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]	'
Commodity derivative instruments	$0

DEBT_FINANCING_Details

DEBT FINANCING (Details) (USD $)

9 Months Ended

4 Months Ended

9 Months Ended

1 Months Ended

9 Months Ended

Jul. 31, 2014

Jul. 31, 2013

Oct. 31, 2013

Jul. 31, 2014

Oct. 31, 2013

Jul. 29, 2014

Jul. 31, 2014

Oct. 31, 2013

Jul. 31, 2014

Oct. 31, 2013

Jul. 31, 2014

Oct. 31, 2013

Jul. 31, 2014

Oct. 31, 2013

Jul. 31, 2014

Oct. 31, 2013

Sep. 30, 2013

Jul. 31, 2014

Oct. 31, 2013

Sep. 29, 2013

17-May-13

Jul. 31, 2014

Oct. 31, 2013

Jul. 31, 2014

Capital Unit, Class B [Member]

Class A

Term note payable to lending institution

Revolving term note payable to lending institution

Assessments payable

Notes payable to electrical company

Construction note payable

Corn oil recovery system note payable

Subordinated Debt

Agrinatural, LLC

Interest Rate of 8.73% [Member]

Interest Rate of 6.55% [Member]

Interest Rate of .50% [Member]

Minimum

Granite Falls Energy LLC [Member]

Note Payable Noncontrolling Entity

Debt financing

Total long-term debt

$10,728,359

$31,552,730

$16,577,641

$7,486,628

$5,979,876

$2,440,743

$2,604,678

$237,500

$293,750

$1,013,132

$263,488

$640,653

$4,143,000

$300,000

Less amounts due on demand or within one year

955,752

3,371,575

Net long term debt

9,772,607

28,181,155

Debt Instrument, Face Amount

18,500,000

28,000,000

3,700,000

1,400,000

Debt Instrument, outstanding amount

7,500,000

500,000

Amortization period for equal monthly payments of principal and interest on debt

'10 years

Interest rate (as a percent)

5.29%

5.57%

7.25%

5.29%

5.43%

8.73%

6.55%

0.50%

Periodic payment

223,000

6,250

40,000

3,942

189,393

25,692

Maintenance fee percentage

0.01

Initial Term of Transportation Agreement

'5 years

Debt Instrument, Periodic Worth of Debt

'1 year

Variable rate basis

'LIBOR

Spread over interest rate (as a percent)

3.25%

Unused commitment fee per annum on the unused portion of debt (as a percent)

0.50%

Debt Instrument, Term

'3 years

Annual decline in loan availability after a specified date

3,500,000

Proceeds from Issuance of Long-term Debt

520,210

759,000

Debt Instrument, Convertible, Conversion Price

$0.30

Debt Conversion, Converted Instrument, Amount

3,936,000

934,500

Debt Conversion, Converted Instrument, Shares Issued

13,120,000

3,115,000

Expected Early Repayment of Subordinated Debt

4,143,000

Debt Instrument, Redemption Price, Percentage

100.00%

Repayments of Subordinated Debt

207,000

Members' Equity

77,932,107

15,000,000

62,932,107

Estimated maturities of debt

2015

955,752

2016

410,383

2017

404,207

2018

336,341

2019

7,809,647

After 2019

$812,029

COMMITMENTS_AND_CONTINGENCIES_

COMMITMENTS AND CONTINGENCIES (Details) (USD $)	9 Months Ended
	Jul. 31, 2014
	MMBTU
Natural gas agreements	'
COMMITMENTS AND CONTINGENCIES	'
Minimum annual purchase commitment (in MMBTUs)	1,600,000
Ethanol	'
COMMITMENTS AND CONTINGENCIES	'
Forward Contracts	12,812,000
Estimated Percent of Product Produced	19.00%
Distillers Grains	'
COMMITMENTS AND CONTINGENCIES	'
Forward Contracts	2,042,000
Estimated Percent of Product Produced	15.00%
Corn	'
COMMITMENTS AND CONTINGENCIES	'
Forward Contracts, Bushels	2,898,000

MEMBERS_EQUITY_Details

MEMBERS' EQUITY (Details)	Jul. 31, 2014	Jul. 01, 2014	Oct. 31, 2013
Membership units	'	'	'
Units authorized (in shares)	80,000,000	'	'
Minimum number of units held by members of the company (in shares)	2,500	'	'
Number of votes per unit	1	'	'
Members' Equity, Units issued	77,932,107	'	64,812,107
Members' Equity, Units outstanding	77,932,107	'	64,812,107
Class A	'	'	'
Membership units	'	'	'
Units authorized (in shares)	65,000,000	'	'
Members' Equity, Units issued	'	'	49,812,107
Members' Equity, Units outstanding	62,932,107	'	49,812,107
subordinated debt converted	'	13,120,000	'
Class B	'	'	'
Membership units	'	'	'
Units authorized (in shares)	15,000,000	'	'
Members' Equity, Units issued	'	'	15,000,000
Members' Equity, Units outstanding	15,000,000	'	15,000,000

Leases_Details

Leases (Details) (USD $)	3 Months Ended	9 Months Ended
Leases (Details) (USD $)	Jul. 31, 2014	Jul. 31, 2014
Operating Leased Assets [Line Items]	'	'
Operating Leases, Rent Expense, Net	$503,000	$1,327,000