Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Oct. 31, 2016 | Jan. 30, 2017 | Apr. 30, 2016 | |
Entity Registrant Name | Heron Lake BioEnergy, LLC | ||
Entity Central Index Key | 1,286,964 | ||
Current Fiscal Year End Date | --10-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Oct. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 9,551,000 | ||
Class A | |||
Common stock, shares outstanding | 62,932,107 | ||
Class B | |||
Common stock, shares outstanding | 15,000,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Oct. 31, 2016 | Oct. 31, 2015 |
Current Assets | ||
Cash | $ 1,297,644 | $ 1,126,283 |
Accounts receivable | 4,607,202 | 5,671,181 |
Inventory | 5,864,545 | 5,259,346 |
Commodity derivative assets | 662,338 | 677,149 |
Prepaid expenses | 181,853 | 158,473 |
Total current assets | 12,613,582 | 12,892,432 |
Property, Plant and Equipment, Net | 50,376,210 | 52,984,550 |
Other Assets | ||
Other intangible assets, net | 84,000 | 122,148 |
Other assets | 697,254 | 697,254 |
Total other assets | 781,254 | 819,402 |
Total Assets | 63,771,046 | 66,696,384 |
Current Liabilities | ||
Current maturities of long-term debt | 490,057 | 517,957 |
Checks drawn in excess of bank balance | 1,866,683 | 1,836,682 |
Accounts payable | 4,878,210 | 3,913,714 |
Accrued expenses | 397,407 | 187,750 |
Total current liabilities | 7,632,357 | 6,456,103 |
Long-Term Debt, net of current maturities | 1,393,669 | 6,711,975 |
Members' Equity | ||
Members' Equity attributable to Heron Lake BioEnergy, LLC consists of: | 53,499,596 | 52,446,500 |
Non-controlling interest | 1,245,424 | 1,081,806 |
Total members' equity | 54,745,020 | 53,528,306 |
Total Liabilities and Members' Equity | $ 63,771,046 | $ 66,696,384 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Oct. 31, 2016 | Oct. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Members' Equity, units issued | 77,932,107 | |
Members' Equity, units outstanding | 77,932,107 | 77,932,107 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2014 | |
Income Statement [Abstract] | |||
Revenues | $ 109,605,544 | $ 115,660,469 | $ 149,418,044 |
Cost of Goods Sold | 101,112,154 | 105,248,092 | 120,569,409 |
Gross Profit | 8,493,390 | 10,412,377 | 28,848,635 |
Operating Expenses | (2,999,157) | (3,001,095) | (2,950,047) |
Operating Income | 5,494,233 | 7,411,282 | 25,898,588 |
Other Income (Expense) | |||
Interest income | 712 | 1,312 | 658 |
Interest expense | (397,837) | (444,625) | (1,665,007) |
Other income | 97,208 | 11,747 | 93,279 |
Total other income (expense), net | (299,917) | (431,566) | (1,571,070) |
Net Income | 5,194,316 | 6,979,716 | 24,327,518 |
Less: Net Income Attributable to Non-controlling Interest | (244,616) | (228,483) | (358,673) |
Net Income (Loss) Attributable to Heron Lake BioEnergy, LLC | $ 4,949,700 | $ 6,751,233 | $ 23,968,845 |
Weighted Average Units Outstanding—Basic | 77,932,107 | 77,932,107 | 69,233,367 |
Net Income Per Unit Attributable to Heron Lake BioEnergy, LLC - Basic (Class A and B) | $ 0.06 | $ 0.09 | $ 0.35 |
Weighted Average Units Outstanding—Diluted | 77,932,107 | 77,932,107 | 78,389,586 |
Net Income Per Unit Attributable to Heron Lake BioEnergy, LLC - Diluted (Class A and B) | $ 0.05 | $ 0.12 | |
Net Income (Loss) Per Unit Attributable to Heron Lake BioEnergy, LLC - Basic and Diluted (Class A and B) | $ 0.06 | $ 0.09 | $ 0.31 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Members' Equity - USD ($) | Heron Lake Bioenergy [Member] | Agrinatural Gas | Heron Lake Bioenergy, LLC (including non-controlling interest of Agrinatural) [Member] | Class A units | Class B units | Total |
Balance at Oct. 31, 2013 | $ 27,142,275 | $ 408,577 | $ 27,550,852 | $ 49,812,107 | $ 15,000,000 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Conversion of subordinated convertible debt | 3,936,000 | 3,936,000 | 13,120,000 | |||
Cancellation of accrued distribution to non-controlling interest | 86,073 | 86,073 | ||||
Net income (loss) attributable to noncontrolling interest | 358,673 | 358,673 | $ (358,673) | |||
Net income (loss) | 23,968,845 | 23,968,845 | 23,968,845 | |||
Balance at Oct. 31, 2014 | 55,047,120 | 853,323 | 55,900,443 | 62,932,107 | 15,000,000 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Member Distributions | (9,351,853) | (9,351,853) | (9,351,853) | |||
Net income (loss) attributable to noncontrolling interest | 228,483 | 228,483 | (228,483) | |||
Net income (loss) | 6,751,233 | 6,751,233 | 6,751,233 | |||
Balance at Oct. 31, 2015 | 52,446,500 | 1,081,806 | 53,528,306 | 62,932,107 | 15,000,000 | 53,528,306 |
Increase (Decrease) in Stockholders' Equity | ||||||
Member Distributions | (3,896,604) | (80,998) | (3,977,602) | (3,896,604) | ||
Net income (loss) attributable to noncontrolling interest | 244,616 | 244,616 | (244,616) | |||
Net income (loss) | 4,949,700 | 4,949,700 | 4,949,700 | |||
Balance at Oct. 31, 2016 | $ 53,499,596 | $ 1,245,424 | $ 54,745,020 | $ 62,932,107 | $ 15,000,000 | $ 54,745,020 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2014 | |
Cash Flow From Operating Activities | |||
Net income | $ 5,194,316 | $ 6,979,716 | $ 24,327,518 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 4,781,673 | 4,593,710 | 4,321,961 |
Write-off of deferred loan cost included in interest expense | 369,699 | ||
Gain on sale of asset | (58,000) | ||
Change in fair value of commodity derivative instruments | 1,054,729 | 831,227 | 787,617 |
Change in fair value of operating assets and liabilities: | |||
Restricted cash | 264,086 | (264,086) | |
Accounts receivable | 1,063,979 | (1,615,200) | (3,306,555) |
Inventory | (605,199) | (72,079) | 417,042 |
Commodity derivative instruments | 1,069,540 | 591,578 | 350,117 |
Prepaid expenses and other current assets | (23,380) | 131,267 | 651,610 |
Accounts payable | 1,313,978 | (124,087) | 2,993,342 |
Accrued expenses | 209,657 | (27,866) | (89,469) |
Net cash provided by operating activities | 11,949,835 | 9,889,898 | 28,925,562 |
Cash Flows from Investing Activities | |||
Capital expenditures | (2,484,667) | (6,181,858) | (4,208,139) |
Proceeds from disposal of property and equipment | 58,000 | ||
Net cash used in investing activities | (2,484,667) | (6,181,858) | (4,150,139) |
Cash Flows from Financing Activities | |||
Proceeds from long-term debt | 9,820,222 | 13,440,990 | |
Checks drawn in excess of bank balance | 30,001 | 1,836,682 | |
Payments on long-term debt | (15,166,428) | (9,169,704) | (24,449,533) |
Payments on convertible subordinated debt | (207,000) | ||
Member Distributions | (3,896,604) | (9,351,853) | |
Distributions to non-controlling interest | (80,998) | ||
Net cash used in financing activities | (9,293,807) | (3,243,885) | (24,656,533) |
Net decrease in cash | 171,361 | 464,155 | 118,890 |
Cash - Beginning of period | 1,126,283 | 662,128 | 543,238 |
Cash - End of period | 1,297,644 | 1,126,283 | 662,128 |
Supplemental Disclosure of Cash Flow Information | |||
Interest expense | $ 397,837 | 444,625 | 1,340,260 |
Supplemental Disclosure of Non-Cash Investing, Operating and Financing Activities | |||
Conversion of subordinated convertible debt to Class A units | 3,937,550 | ||
Cancellation of accrued distribution to noncontrolling interest | 86,073 | ||
Capital expenditures and construction in progress included in accounts payable | $ 349,482 | $ 3,359,225 |
RISKS AND UNCERTAINTIES
RISKS AND UNCERTAINTIES | 12 Months Ended |
Oct. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
RISKS AND UNCERTAINTIES | 2. 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 primarily derived from the sale and distribution of ethanol, distillers’ grains and corn oil 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 75%- 85% of total revenues and corn costs average 75%- 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. The supply and demand for ethanol are impacted by federal and state legislation and regulation, most significantly the Renewable Fuels Standard (“RFS”), and any changes in legislation or regulation could cause the demand for ethanol to decline or its supply to increase, which could have a material adverse effect on our business, results of operations and financial condition, and the ability to operate at a profit. On November 30, 2015, the EPA announced final Renewable Volume Obligation (“RVO”) requirements for the RFS for calendar years 2014, 2015 and 2016. Although the new RVO requirements set are above the proposed reductions, they are below the original requirements set by the RFS. Opponents of ethanol such as large oil companies will likely continue their efforts to repeal or reduce the RFS through lawsuits or lobbying of Congress. Successful reduction or repeal of the blending requirements of the RFS could result in a significant decrease in ethanol demand. Current ethanol production capacity is expected to remain flat in 2017 at approximately 15.2 billion gallons according to the U.S. Energy Information Administration. Political uncertainty under a new administration could lead to a reduction of blending requirements could reduce the demand for and price of ethanol. If demand for ethanol decreases, it could materially adversely affect our business, results of operations and financial condition. Ethanol has historically traded at a discount to gasoline, however with the recent decline in oil prices, ethanol is currently trading at an approximately equivalent price to gasoline causing a disincentive for discretionary blending of ethanol beyond the required blend rate. Consequently, there may be a negative impact on ethanol pricing and demand, which could result in a material adverse effect on our business, results of operations and financial condition. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Oct. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 3. FAIR VALUE MEASUREMENTS The Company follows accounting guidance related to fair value disclosures. For the Company, this guidance applies to certain derivative investments. The authoritative guidance also clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair measurements. The following table sets forth, by level, the Company assets that were accounted for at fair value on a recurring basis at October 31, 2016: Fair Value Measurement Using Quoted Prices Significant Other Significant Carrying Amount in in Active Markets Observable Inputs Unobservable Inputs Financial Assets: Balance Sheet Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative instruments - Corn $ $ $ $ — $ — Commodity Derivative instruments - Ethanol — — The following table sets forth, by level, the Company assets that were accounted for at fair value on a recurring basis at October 31, 2015: Fair Value Measurement Using Quoted Prices in Significant Other Significant Carrying Amount in Active Markets Observable Inputs Unobservable Inputs Financial Assets: Balance Sheet Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative instruments - Corn $ $ $ $ — $ — We determine 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. |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Oct. 31, 2016 | |
CONCENTRATIONS | |
CONCENTRATIONS | 4. CONCENTRATIONS The Company sold all of the ethanol, distillers’ grains, and corn oil produced at its plant to three customers under marketing agreements during the fiscal years ended October 31, 2016, 2015, and 2014. The percentage of total revenues attributable to each of the Company’s three major customers for the fiscal years ended October 31, 2016, 2015, and 2014 were as follows: October 31, 2016 October 31, 2015 October 31, 2014 Eco-Energy, Inc. - Ethanol Gavilon Ingredients, LLC - Distillers' Grains RPMG, Inc. - Corn Oil The percentage of total accounts recievable attributable to each of the Company’s three major customers at October 31, 2016 and 2015 were as follows: October 31, 2016 October 31, 2015 Eco-Energy, Inc. - Ethanol Gavilon Ingredients, LLC - Distillers' Grains RPMG, Inc. - Corn Oil |
INVENTORY
INVENTORY | 12 Months Ended |
Oct. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 5. INVENTORY Inventory consists of the following at October 31: 2016 2015 Raw materials $ $ Work in process Finished Goods Supplies Totals $ $ |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 12 Months Ended |
Oct. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | 6. DERIVATIVE INSTRUMENTS The Company enters into corn, ethanol, and natural gas derivatives in order to protect cash flows from fluctuations caused by volatility in commodity prices for periods up to 24 months. These derivatives are put in place to protect gross profit margins from potentially adverse effects of market and price volatility on ethanol sales and corn purchase commitments where the prices are set at a future date. Although these derivative instruments serve the Company’s purpose as an economic hedge, they are not designated as effective hedges for accounting purposes. For derivative instruments that are not accounted for as hedges, or for the ineffective portions of qualifying hedges, the change in fair value is recorded through earnings in the period of change. As of October 31, 2016, the total notional amount of the Company’s outstanding corn derivative instruments was approximately 4,285,000 bushels, comprised of long corn positions on 3,100,000 bushels that were entered into to hedge forecasted ethanol sales through March 2017, and short corn positions on 1,185,000 bushels that were entered into to hedge forecasted corn purchases through August 2017. There may be offsetting positions that are not shown on a net basis that could lower the notional amount of positions outstanding. As of October 31, 2016, the Company had no cash collateral (restricted cash) related to corn derivatives held by a broker. The following table provides detail regarding the Company’s derivative financial instruments at October 31, 2016, none of which were designated as hedging instruments: Consolidated Balance Sheet Location Assets Liabilities Corn contracts Commodity derivative instruments $ $ — Ethanol contracts Commodity derivative instruments — Totals $ $ — As of October 31, 2015, the total notional amount of the Company’s outstanding corn derivative instruments was approximately 1,875,000 bushels, comprised of long corn positions on 360,000 bushels, and short corn positions on 1,515,000 bushels, that were entered into to hedge forecasted corn purchases through December 2016. As of October 31, 2015, the Company had no cash collateral (restricted cash) related to corn derivatives held by a broker. The following table provides detail regarding the Company’s derivative financial instruments at October 31, 2015, none of which were designated as hedging instruments: Consolidated Balance Sheet Location Assets Liabilities Corn contracts Commodity derivative instruments $ $ — Totals $ $ — The following tables provide details regarding the gains (losses) from the Company’s derivative instruments in consolidated statements of operations, none of which are designated as hedging instruments: Statement of Year Ended October 31, Operations location 2016 2015 2014 Corn contracts Cost of goods sold $ $ $ Ethanol contracts Revenues — — Natural gas contracts Cost of goods sold — — Total gain $ $ $ |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Oct. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 7. PROPERTY AND EQUIPMENT A summary of property and equipment is as follows: October 31, 2016 October 31, 2015 Land and improvements $ $ Plant buildings and equipment Vehicles Office buildings Construction in progress Less: accumulated depreciation Net property, plant and equipment $ $ Depreciation expense totaled approximately $4,744,000, $4,556,000 and $4,264,000 during the fiscal years ended October 31, 2016, 2015, and 2014, respectively. |
DEBT FACILITIES
DEBT FACILITIES | 12 Months Ended |
Oct. 31, 2016 | |
Debt Disclosure [Abstract] | |
DEBT FACILITIES | 8. DEBT FACILITIES Long-term debt consists of the following: October 31, 2016 October 31, 2015 Revolving term note payable to lending institution, see terms below. $ — $ Assessment payable as part of water treatment agreement, due in semi-annual installments of $189,393 with interest at 6.55%, enforceable by statutory lien, with the final payment due in 2021. The Company made deposits for one years' worth of debt service payments of approximately $364,000, which is included with other assets that are held on deposit to be applied with the final payments of the assessment. Assessment payable as part of water treatment agreement, due in semi-annual installments of $25,692 with interest at 0.50%, enforceable by statutory lien. This note was paid in full in October 2016. — Assessment payable as part of water supply agreement, due in monthly installments of $3,942 with interest at 8.73%, enforceable by statutory lien, with the final payment due in 2019. Note payable to electrical company with monthly payments of $6,250 with interest at 0.00% and a 1.00% maintenance fee due each October. The note is due September 2017. The electrical company is a member of the Company. Note payable to non-controlling interest member of Agrinatural. Interest is at One Month LIBOR plus 4.0%, which was approximately 4.53% and 4.19% at October 31, 2016 and 2015, respectively. The note is considered due on demand with payments due at Agrinatural Board of Managers discretion. Totals Less amounts due within one year Net long-term debt $ $ Revolving Term Note The Company has a revolving term loan with a lender initially totaling $28,000,000. 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, subject to the maximum principal commitment. Under the terms of the credit facility, the revolving term loan commitment declines by $3,500,000 annually, starting March 1, 2015 and continues each anniversary thereafter until maturity. As a result, the aggregate principal commitment of this facility at October 31, 2016 was $21,000,000. The outstanding balance on the revolving term loan totaled approximately $0 and $4,822,777 at October 31, 2016 and 2015, respectively. Therefore, after accounting for amounts outstanding under this facility at October 31, 2016 and 2015, the aggregate principal amount available to the Company for borrowing was approximately $21,000,000 and $19,677,000, respectively. 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 interest rate on the revolving term loan was 3.45% at both October 31, 2016 and 2015. 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 loan is secured by substantially all of the Company assets including a subsidiary guarantee. The credit facility contains customary covenants, including restrictions on the payment of dividends and loans and advances to Agrinatural, and maintenance of certain financial ratios including minimum working capital, minimum net worth and a debt service coverage ratio as defined by the credit facility. Failure to comply with the protective loan covenants or maintain the required financial ratios may cause acceleration of the outstanding principal balances on the revolving term loan and/or the imposition of fees, charges or penalties. As of October 31, 2016 and 2015, the Company was in compliance with these financial covenants and expects to be in compliance throughout fiscal 2017. As part of the Credit Facility closing, the Company 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. The Company agreed to pay CoBank an annual fee of $2,500 as the agent for Ag Star. Estimated maturities of long-term debt at October 31, 2016 are as follows: 2017 $ 2018 2019 2020 2021 Total debt $ |
MEMBERS' EQUITY
MEMBERS' EQUITY | 12 Months Ended |
Oct. 31, 2016 | |
Equity [Abstract] | |
MEMBERS' EQUITY | 9. 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 Subordinated Convertible Notes electing conversion and redeemed the remaining $207,000 of the Notes at par value. On December 18, 2014, the Company’s board of governors declared a distribution of $0.12 per membership unit for a total of approximately $9,352,000 to be paid to members of record as of December 18, 2014. The distribution was paid in January 2015. Based on the covenants contained in the Company’s AgStar credit facilities, the foregoing distribution was approved by its lender prior to distribution. On December 17, 2015, the Company’s board of governors declared a distribution of $0.05 per membership unit for a total of approximately $3,897,000 to be paid to members of record as of December 18, 2015. The distribution was paid in January 2016. Based on the covenants contained in the Company’s AgStar credit facilities, the foregoing distribution was approved by its lender prior to distribution. |
LEASES
LEASES | 12 Months Ended |
Oct. 31, 2016 | |
Leases [Abstract] | |
LEASES | 10. LEASES The Company has lease agreements with leasing companies for 145 rail cars for the transportation of the Company’s ethanol with various maturity dates through January 2027. The rail car lease payments are due monthly in the aggregate amount of approximately $123,000. The Company has a lease agreement with a leasing company for 50 hopper cars to assist in with the transport of the distillers’ grains by rail with a maturity date of May 2017. The rail car lease payments are due monthly in the amount of approximately $35,000. Rent expense for the Company’s leases was approximately $2,523,000, $1,969,000 and $1,829,000 for the fiscal years ended October 31, 2016, 2015, and 2014, respectively. At October 31, 2016, the Company had the following minimum future lease payments, which at inception had non‑cancelable terms of more than one year: November 1, 2016 to October 31, 2017 $ November 1, 2017 to October 31, 2018 November 1, 2018 to October 31, 2019 November 1, 2019 to October 31, 2020 November 1, 2020 to October 31, 2021 Thereafter Total minimum lease commitments $ |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Oct. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 11. INCOME TAXES The differences between consolidated financial statement basis and tax basis of assets and liabilities are estimated as follows at October 31: 2016 2015 Consolidated financial statement basis of assets $ $ Plus: Organization and start-up costs capitalized Less: Unrealized gains on commodity derivative instruments Less: Accumulated tax depreciation and amortization greater than financial statement basis Plus: Impairment charge Income tax basis of assets $ $ There were no significant differences between the consolidated financial statement basis of liabilities and the income tax basis of liabilities at October 31, 2016 and 2015. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Oct. 31, 2016 | |
Employee Benefit Plans | |
Employee Benefit Plans | 12. EMPLOYEE BENEFIT PLANS The Company has a defined contribution plan available to all of its qualified employees. The Company contributes a match of 50% of the participant’s salary deferral up to a maximum of 4% of the employee’s salary. The Company contributions totaled approximately $85,000, $81,000, and $81,000 for the fiscal years ended October 31, 2016, 2015, and 2014, respectively |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Oct. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 13. RELATED PARTY TRANSACTIONS Project Viking, LLC On July 31, 2013, Project Viking invested $6.9 million in the Company for 8,075,000 Class A units and 15,000,000 Class B units at a purchase price of $0.30 per unit. In May 2013, Project Viking participated in the initial subordinated convertible debt offering and lent the Company $102,000. On July 31, 2013, Project Viking obtained a controlling interest in the Company. On July 31, 2013, Project Viking sold its interest to Granite Falls Energy, LLC (“GFE”), which is now considered a related party. GFE operates an ethanol plant in the Midwest. Granite Falls Energy, LLC The Company entered into a Management Services Agreement with GFE on July 31, 2015. Under the Management Services Agreement, GFE agreed to supply its own personnel to act as part-time officers and managers of the Company for the positions of Chief Executive Officer, Chief Financial Officer, and Commodity Risk Manager. The initial term of the Management Services Agreement is three years. The Company agreed to pay GFE $35,000 per month during the first year of the agreement. During years two and three of the agreement, the Company agreed to pay GFE 50% of the total salary, bonuses, and other expenses and costs incurred by GFE for the three management positions. At the expiration of the initial term, the agreement will automatically renew for successive one-year terms unless and until the Company or GFE gives the other party 90-days written notice of termination prior to expiration of the initial term or the start of a renewal term. Total expenses under this agreement were $375,000, $414,000 and $392,000 for fiscal years ended October 31, 2016, 2015, and 2014, respectively. Corn Purchase - Members The Company purchased approximately $15,008,000 of corn from board members in fiscal year 2016, $11,032,000 in fiscal year 2015 and $14,860,000 in fiscal year 2014. Agrinatural During 2013, the Company borrowed $300,000 from the non-controlling interest member of Agrinatural. Total interest paid in relation to this note payable amounted to approximately $20,000 for each of the fiscal years ended October 31, 2016 and approximately $16,000 for each of the years ended October 31, 2015 and 2014. Swan Engineering On March 27, 2015, Agrinatural executed a new management and operating agreement with Swan Engineering, Inc. (“SEI”). SEI, together with an unrelated third party owns Rural Energy Solutions, LLC (“RES”), the 27% minority owner of Agrinatural. Under the new management and operating agreement, SEI will continue to provide Agrinatural with day-to-day management and operation of Agrinatural’s pipeline distribution business. In exchange for these services, Agrinatural will pay SEI an aggregate management fee equal to the fixed monthly base fee plus the variable customer management fee based on the number of customers served on the pipeline less the agreed monthly fee reduction of $4,500. For the year ended October 31, 2016, the Company paid approximately $32,000 and $149,000 for the monthly base fee and variable customer management fee, respectively. For the year ended October 31, 2015, the Company paid approximately $18,000 and $83,000 for the monthly base fee and variable customer management fee, respectively. The new management and operating agreement with SEI expires July 1, 2019 unless earlier terminated for cause as defined in the agreement. On March 27, 2015, Agrinatural also executed a new project management agreement with SEI. Pursuant to the new project management agreement, SEI will continue to supervise all of Agrinatural’s pipeline construction projects. These projects are constructed by unrelated third-party pipeline construction companies. Under the new project management agreement, Agrinatural will pay SEI a total of 10% of the actual capital expenditures for construction projects approved by Agrinatural’s Board of Directors, excluding capitalized marketing costs. For the year ended October 31, 2016, the Company incurred approximately $28,000 for project management fees. For the year ended October 31, 2015, the Company paid approximately $19,000 for project management fees. The new project management with SEI expires June 30, 2019 unless earlier terminated for cause as defined in the agreement. Amounts due to SEI from Agrinatural included in accounts payable on the consolidated balance sheets totaled approximately $131,000 and $340,000 at October 31, 2016 and 2015, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Oct. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 14. COMMITMENTS AND CONTINGENCIES Water Agreements In October 2003, the Company entered into an industrial water supply development and distribution agreement with the City of Heron Lake for 15 years. The Company has the exclusive rights to the first 6000 gallons per minute of capacity that is available from the well, and provides for the Company, combined with an unrelated company, to approve any other supply contracts that the City may enter into. In consideration, the Company will pay one half of the City’s water well bond payments of $735,000, plus a 5% administrative fee, totaling approximately $594,000, and operating costs, relative to the Company’s water usage, plus a 10% profit. These costs will be paid as water usage fees. The Company recorded an assessment of approximately $367,000 with long-term debt as described in Note 8. The Company pays operating and administrative expenses of approximately $12,000 per year. In May 2006, the Company entered into a water treatment agreement with the City of Heron Lake and Jackson County for 30 years. The Company will pay for operating and maintenance costs of the plant in exchange for receiving treated water. In addition, the Company agreed to an assessment for a portion of the capital costs of the water treatment plant. The Company recorded assessments with long-term debt of $500,000 and $3,550,000 in fiscal 2007 and 2006, respectively, as described in Note 8. The Company paid operating and maintenance expenses of approximately $24,000, $57,000, and $114,000 in fiscal 2016, 2015, and 2014, respectively. Ethanol Marketing Agreement The Company has a marketing agreement (“Eco Agreement”) with Eco-Energy, Inc., an unrelated party (“Eco-Energy”) for the sale of ethanol. Under this ethanol agreement, Eco-Energy purchases, markets and resells 100% of the ethanol produced at the Company’s ethanol production facility and arranges for the transportation of ethanol. The Company pays Eco-Energy a marketing fee based on a percentage of the applicable sale price of the ethanol, as well as a fixed lease fee for rail cars leased from Eco-Energy to the Company. The marketing fee was negotiated based on prevailing market-rate conditions for comparable ethanol marketing services. The initial term of Eco Agreement continued through December 31, 2016, with automatic renewals for additional three terms of three year periods unless terminated by either party by providing written notice to the other party at least 3 months prior to the end of the then current term. During the third fiscal quarter of 2016, the Company amended the Eco Agreement. As amended, the term of the Eco Agreement continues through December 31, 2019. Additionally, the amended Eco Agreement provides for certain negotiated changes to the marketing fees payable to Eco-Energy and payment terms based on prevailing market-rate conditions for comparable ethanol marketed services. Ethanol marketing fees and commissions totaled approximately $637,000, $618,000, and $653,000 for the fiscal years ended October 31, 2016, 2015, and 2014. Ethanol Forward Contracts At October 31, 2016, the Company had fixed and basis contracts to sell approximately $18,621,000 of ethanol for various delivery periods through March 2017. Distillers’ Grains Marketing Agreement Gavilon Ingredients, LLC, an unrelated party (“Gavilon”), serves as the distillers’ grains marketer for our plant pursuant to a distillers’ grains off-take agreement. Pursuant to our agreement with Gavilon, Gavilon purchases all of the distillers’ grains produced at our ethanol plant. We pay Gavilon a service fee for its services under this agreement. The contract commenced on November 1, 2013 with an initial term of six months, and will continue to remain in effect until terminated by either party at its unqualified option, by providing written notice of not less than 60 days to the other party. Distillers’ grains commissions totaled approximately $283,000, $308,000, and $293,000 for the fiscal years ended October 31, 2016, 2015, and 2014. Distillers’ grains Forward Contracts At October 31, 2016, the Company had forward contracts to sell approximately $2,863,000 of distillers’ grains for delivery through March 2017. Corn Oil Marketing Agreement RPMG, Inc., an unrelated party, markets the corn oil produced at our ethanol plant pursuant to a corn oil marketing agreement. We pay RPMG a commission based on each pound of corn oil sold by RPMG under the agreement. The contract commenced on November 1, 2013 with an initial term of one year and will continue to remain in effect until terminated by either party at its unqualified option, by providing written notice of not less than 90 days to the other party. The Company also has a base agreement for the sale and purchase of natural gas with Constellation New Energy—Gas Division, LLC pursuant to which it buys all of its natural gas from Constellation. This agreement runs until March 31, 2019. Corn oil commissions totaled approximately $96,000, $56,000, and $64,000 for the fiscal years ended October 31, 2016, 2015, and 2014. Corn Oil Forward Contracts At October 31, 2016, the Company had forward contracts to sell approximately $630,000 of corn oil for delivery through November 2016. Contract for Natural Gas Pipeline to Plant The Company has a facilities agreement with Northern Border Pipeline Company which allows us access to an existing interstate natural gas pipeline located approximately 16 miles north from the plant. Agrinatural was formed to own and operate the pipeline and transports gas to the Company pursuant to a transportation agreement. The Company also has a base agreement for the sale and purchase of natural gas with Constellation NewEnergy-Gas Division, LLC (“Constellation”), pursuant to which it buys all of its natural gas from Constellation. This agreement runs until March 31, 2017. Corn Forward Contracts At October 31, 2016, the Company had cash and basis contracts for forward corn purchase commitments for approximately 2,898,000 bushels for deliveries through August 2017. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 12 Months Ended |
Oct. 31, 2016 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | 15. BUSINESS SEGMENTS The Company groups its operations into the following two business segments: Ethanol Production: Ethanol and co-product production and sales Natural gas pipeline: Ownership and operations of natural gas pipeline Segment reporting is intended to give financial statement users a better view of how the Company manages and evaluates its businesses. The accounting policies for each segment are the same as those described in the summary of significant accounting policies in Note 1. Segment income or loss does not include any allocation of shared-service costs. Segment assets are those that are directly used in or identified with segment operations. Inter-segment balances and transactions have been eliminated. The following tables summarize financial information by segment and provide a reconciliation of segment contribution to operating income and total assets for the fiscal years ended October 31: 2016 2015 2014 Revenue: Ethanol production $ $ $ Natural gas pipeline Eliminations Total Revenue $ $ $ Operating Income: Ethanol production $ $ $ Natural gas pipeline Eliminations Operating Income $ $ $ 2016 2015 2014 Total Assets: Ethanol production $ $ $ Natural gas pipeline Total Assets $ $ $ |
QUARTERLY FINANCIAL DATA
QUARTERLY FINANCIAL DATA | 12 Months Ended |
Oct. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | 16. QUARTERLY FINANCIAL DATA (UNAUDITED) Summary quarterly results are as follows: First Second Third Fourth Fiscal year ended October 31, 2016 Quarter Quarter Quarter Quarter Revenues $ $ $ $ Gross profit Operating income Net income attributable to Heron Lake BioEnergy, LLC Basic earnings per unit (Class A and B) $ — $ — $ $ Diluted earnings per unit (Class A and B) $ — $ — $ $ First Second Third Fourth Fiscal year ended October 31, 2015 Quarter Quarter Quarter Quarter Revenues $ $ $ $ Gross profit Operating income Net income attributable to Heron Lake BioEnergy, LLC Basic earnings per unit (Class A and B) $ $ $ $ Diluted earnings per unit (Class A and B) $ $ $ $ First Second Third Fourth Fiscal year ended October 31, 2014 Quarter Quarter Quarter Quarter Revenues $ $ $ $ Gross profit Operating income Net income attributable to Heron Lake BioEnergy, LLC Basic earnings per unit (Class A and B) $ $ $ $ Diluted earnings per unit (Class A and B) $ $ $ $ The above quarterly financial date is unaudited, but in the opinion of management, all adjustments necessary for a fair presentation of the selected data for these periods presented have been included. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Oct. 31, 2016 | |
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 72.3 million gallons per year of undenatured ethanol on a twelve month rolling sum basis. 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 and other customers. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements 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% non-controlling interest identified separately in the accompanying consolidated balance sheets and statements of operations. All significant intercompany balances and transactions are eliminated in consolidation. |
Fiscal Reporting Period | Fiscal Reporting Period The Company’s fiscal year end for reporting financial operations is October 31. |
Revenue Recognition | Revenue Recognition The Company generally sells ethanol and related products pursuant to marketing agreements. Revenues from the production of ethanol and the related products are recorded when the customer has taken title and assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. Title is generally assumed by the buyer at the Company’s shipping point. The Company believes there are no ethanol sales, during any given month, which should be considered contingent and recorded as deferred revenue. In accordance with the Company’s agreements for the marketing and sale of ethanol and related products, marketing fees and commissions due to the marketers are deducted from the gross sales price as earned. These fees and commissions are recorded net of revenues as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products. Shipping costs 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. Agrinatural recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee for the arrangement is fixed or determinable and collectability is reasonably assured. |
Cash | Cash The Company maintains its accounts at multiple financial institutions. At times throughout the year, the Company’s cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation. The Company does not believe it is exposed to any significant credit risk on its cash balances. |
Restricted Cash | Restricted Cash The Company is periodically required to maintain cash balances at its broker related to derivative instrument positions as discussed in Note 6. |
Accounts Receivable | Accounts Receivable Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial condition and, generally, requires no collateral. Accounts receivable are recorded at their estimated net realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company’s credit terms. Accounts considered uncollectible are written off. The Company follows a policy of providing an allowance for doubtful accounts; however, based on historical experience, and its evaluation of the current status of receivables, the Company is of the belief that such accounts will be collectible in all material respects and thus an allowance was not necessary at October 31, 2016 or 2015. It is at least possible this estimate will change in the future. |
Derivative Instruments | Derivative Instruments From time to time, the Company enters into derivative transactions to hedge its exposures to commodity price fluctuations. The Company is required to record these derivatives in the balance sheets at fair value. In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Changes in the fair value of undesignated derivatives are recorded in earnings. Additionally, the Company is required to evaluate its contracts to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as “normal purchases or normal sales”. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from accounting and reporting requirements, and therefore, are not marked to market in our financial statements. In order to reduce the risks caused by market fluctuations, the Company occasionally hedges its anticipated corn, natural gas, and denaturant purchases and ethanol sales by entering into options and futures contracts. These contracts are used with the intention to fix the purchase price of anticipated requirements for corn in the Company’s ethanol production activities and the related sales price of ethanol. The fair value of these contracts is based on quoted prices in active exchange-traded or over-the-counter market conditions. Although the Company believes its commodity derivative positions are economic hedges, none have been formally designated as a hedge for accounting purposes and derivative positions are recorded on the balance sheet at their fair market value, with changes in fair value recognized in current period earnings or losses. The Company does not enter into financial instruments for trading or speculative purposes. The Company has adopted authoritative guidance related to “Derivatives and Hedging,” and has included the required enhanced quantitative and qualitative disclosure about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses from derivative instruments, and disclosures about credit-risk-related contingent features in derivative agreements. See further discussion in Note 6. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation is provided over an estimated useful life by use of the straight-line deprecation method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. Construction in progress expenditures will be depreciated using the straight-line method over their estimated useful lives once the assets are placed into service. Depreciable useful lives are as follows: Land improvements 15 Years Plant building and equipment 7-40 Years Vehicles and other equipment 5-7 Years Office buildings and equipment 3-40 Years |
Net Income per Unit | Net Income per Unit Basic net income per unit is computed by dividing net income by the weighted average number of members’ units outstanding during the period. Diluted net income or loss per unit is computed by dividing net income by the weighted average number of members’ units and members’ unit equivalents outstanding during the period. |
Environmental Liabilities | Environmental Liabilities The Company’s operations are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which it operates. These laws require the Company to investigate and remediate the effects of the release or disposal of materials at its location. Accordingly, the Company has adopted policies, practices, and procedures in the areas of pollution control, occupational health, and the production, handling, storage and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability, which could result from such events. Environmental liabilities are recorded when the liability is probable and the costs can be reasonably estimated. |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of depreciable useful lives of property and equipment | Land improvements 15 Years Plant building and equipment 7-40 Years Vehicles and other equipment 5-7 Years Office buildings and equipment 3-40 Years |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of assets measured on a non-recurring basis | The following table sets forth, by level, the Company assets that were accounted for at fair value on a recurring basis at October 31, 2016: Fair Value Measurement Using Quoted Prices Significant Other Significant Carrying Amount in in Active Markets Observable Inputs Unobservable Inputs Financial Assets: Balance Sheet Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative instruments - Corn $ $ $ $ — $ — Commodity Derivative instruments - Ethanol — — The following table sets forth, by level, the Company assets that were accounted for at fair value on a recurring basis at October 31, 2015: Fair Value Measurement Using Quoted Prices in Significant Other Significant Carrying Amount in Active Markets Observable Inputs Unobservable Inputs Financial Assets: Balance Sheet Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative instruments - Corn $ $ $ $ — $ — |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventory consists of the following at October 31: 2016 2015 Raw materials $ $ Work in process Finished Goods Supplies Totals $ $ |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of gains (losses) from derivative instruments included in the Condensed Consolidated Statements of Operations | Consolidated Balance Sheet Location Assets Liabilities Corn contracts Commodity derivative instruments $ $ — Totals $ $ — The following tables provide details regarding the gains (losses) from the Company’s derivative instruments in consolidated statements of operations, none of which are designated as hedging instruments: Statement of Year Ended October 31, Operations location 2016 2015 2014 Corn contracts Cost of goods sold $ $ $ Ethanol contracts Revenues — — Natural gas contracts Cost of goods sold — — Total gain $ $ $ |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment [Table Text Block] | A summary of property and equipment is as follows: October 31, 2016 October 31, 2015 Land and improvements $ $ Plant buildings and equipment Vehicles Office buildings Construction in progress Less: accumulated depreciation Net property, plant and equipment $ $ |
DEBT FACILITIES (Tables)
DEBT FACILITIES (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term debt | Long-term debt consists of the following: October 31, 2016 October 31, 2015 Revolving term note payable to lending institution, see terms below. $ — $ Assessment payable as part of water treatment agreement, due in semi-annual installments of $189,393 with interest at 6.55%, enforceable by statutory lien, with the final payment due in 2021. The Company made deposits for one years' worth of debt service payments of approximately $364,000, which is included with other assets that are held on deposit to be applied with the final payments of the assessment. Assessment payable as part of water treatment agreement, due in semi-annual installments of $25,692 with interest at 0.50%, enforceable by statutory lien. This note was paid in full in October 2016. — Assessment payable as part of water supply agreement, due in monthly installments of $3,942 with interest at 8.73%, enforceable by statutory lien, with the final payment due in 2019. Note payable to electrical company with monthly payments of $6,250 with interest at 0.00% and a 1.00% maintenance fee due each October. The note is due September 2017. The electrical company is a member of the Company. Note payable to non-controlling interest member of Agrinatural. Interest is at One Month LIBOR plus 4.0%, which was approximately 4.53% and 4.19% at October 31, 2016 and 2015, respectively. The note is considered due on demand with payments due at Agrinatural Board of Managers discretion. Totals Less amounts due within one year Net long-term debt $ $ |
Schedule of estimated maturities of long-term debt | Estimated maturities of long-term debt at October 31, 2016 are as follows: 2017 $ 2018 2019 2020 2021 Total debt $ |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Leases [Abstract] | |
Schedule of minimum future lease payments | November 1, 2016 to October 31, 2017 $ November 1, 2017 to October 31, 2018 November 1, 2018 to October 31, 2019 November 1, 2019 to October 31, 2020 November 1, 2020 to October 31, 2021 Thereafter Total minimum lease commitments $ |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of differences between consolidated financial statement basis and tax basis of assets and liabilities | The differences between consolidated financial statement basis and tax basis of assets and liabilities are estimated as follows at October 31: 2016 2015 Consolidated financial statement basis of assets $ $ Plus: Organization and start-up costs capitalized Less: Unrealized gains on commodity derivative instruments Less: Accumulated tax depreciation and amortization greater than financial statement basis Plus: Impairment charge Income tax basis of assets $ $ |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Primary Business Segments [Table Text Block] | The Company groups its operations into the following two business segments: Ethanol Production: Ethanol and co-product production and sales Natural gas pipeline: Ownership and operations of natural gas pipeline |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The following tables summarize financial information by segment and provide a reconciliation of segment contribution to operating income and total assets for the fiscal years ended October 31: 2016 2015 2014 Revenue: Ethanol production $ $ $ Natural gas pipeline Eliminations Total Revenue $ $ $ Operating Income: Ethanol production $ $ $ Natural gas pipeline Eliminations Operating Income $ $ $ 2016 2015 2014 Total Assets: Ethanol production $ $ $ Natural gas pipeline Total Assets $ $ $ |
QUARTERLY FINANCIAL DATA (Table
QUARTERLY FINANCIAL DATA (Tables) | 12 Months Ended |
Oct. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of quarterly results | Summary quarterly results are as follows: First Second Third Fourth Fiscal year ended October 31, 2016 Quarter Quarter Quarter Quarter Revenues $ $ $ $ Gross profit Operating income Net income attributable to Heron Lake BioEnergy, LLC Basic earnings per unit (Class A and B) $ — $ — $ $ Diluted earnings per unit (Class A and B) $ — $ — $ $ First Second Third Fourth Fiscal year ended October 31, 2015 Quarter Quarter Quarter Quarter Revenues $ $ $ $ Gross profit Operating income Net income attributable to Heron Lake BioEnergy, LLC Basic earnings per unit (Class A and B) $ $ $ $ Diluted earnings per unit (Class A and B) $ $ $ $ First Second Third Fourth Fiscal year ended October 31, 2014 Quarter Quarter Quarter Quarter Revenues $ $ $ $ Gross profit Operating income Net income attributable to Heron Lake BioEnergy, LLC Basic earnings per unit (Class A and B) $ $ $ $ Diluted earnings per unit (Class A and B) $ $ $ $ |
SUMMARY OF SIGNIFICANT ACCOUN33
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nature of Business (Details) gal in Millions | Oct. 31, 2016gal |
Summary of significant accounting policies | |
Operating capacity of Ethanol plant owned and operated | 72.3 |
HLBE Pipeline Company, LLC | |
Summary of significant accounting policies | |
Percentage of Agrinatural Gas, LLC owned by HLBE Pipeline Company, LLC | 73.00% |
SUMMARY OF SIGNIFICANT ACCOUN34
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) gal in Millions | Dec. 17, 2015USD ($) | Dec. 18, 2014USD ($) | Oct. 31, 2016USD ($)Optionitemgal | Oct. 31, 2015USD ($)item | Oct. 31, 2014USD ($)item |
Summary of significant accounting policies | |||||
Operating capacity of Ethanol plant owned and operated | gal | 72.3 | ||||
Events requiring balance sheet adjustments | item | 0 | 0 | 0 | ||
Correction of immaterial error, amount | $ 3,359,225 | $ 605,750 | |||
Asset Impairment Charges, Cumulative | $ 27,844,579 | 27,844,579 | |||
Other Intangibles | |||||
Economic useful life of other intangibles | 15 years | ||||
Amortization of Intangible Assets | $ 38,000 | 38,000 | 58,000 | ||
Amortization of financing costs | $ 0 | $ 0 | $ 370,000 | ||
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Declared | $ 3,897,000 | $ 9,352,000 | |||
HLBE Pipeline Company, LLC | |||||
Summary of significant accounting policies | |||||
Percentage of Agrinatural Gas, LLC owned by HLBE Pipeline Company, LLC | 73.00% | ||||
Agrinatural, LLC | |||||
Summary of significant accounting policies | |||||
Remaining percentage in Agrinatural Gas, LLC included as noncontrolling interest (as a percent) | 27.00% | ||||
Initial term of providing natural gas to the plant | 10 years | ||||
Number of renewal options | Option | 2 | ||||
Term of renewed contract | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN35
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Long-Lived Assets (Details) - USD ($) | 12 Months Ended | 24 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2016 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciable useful life | 15 years | |||
Depreciation | $ 4,744,000 | $ 4,556,000 | $ 4,264,000 | |
Long-Lived Assets | ||||
Impairment charge | $ 0 | $ 0 | $ 0 | |
Plant building and equipment | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciable useful life | 7 years | |||
Plant building and equipment | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciable useful life | 40 years | |||
Vehicles and equipment | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciable useful life | 5 years | |||
Vehicles and equipment | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciable useful life | 7 years | |||
Office buildings and equipment | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciable useful life | 3 years | |||
Office buildings and equipment | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciable useful life | 40 years |
RISKS AND UNCERTAINTIES (Detail
RISKS AND UNCERTAINTIES (Details) gal in Billions | 12 Months Ended |
Oct. 31, 2016gal | |
UNITED STATES | |
RISKS AND UNCERTAINTIES | |
Expected ethanol production capacity | 15.2 |
Total revenues | Ethanol | Minimum | |
RISKS AND UNCERTAINTIES | |
Average percentage of total sales or cost of goods sold | 75.00% |
Total revenues | Ethanol | Maximum | |
RISKS AND UNCERTAINTIES | |
Average percentage of total sales or cost of goods sold | 85.00% |
Cost of goods sold, total | Corn | Minimum | |
RISKS AND UNCERTAINTIES | |
Average percentage of total sales or cost of goods sold | 75.00% |
Cost of goods sold, total | Corn | Maximum | |
RISKS AND UNCERTAINTIES | |
Average percentage of total sales or cost of goods sold | 90.00% |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) | Oct. 31, 2016 | Oct. 31, 2015 |
Fair value measurements | ||
Derivative Assets, Current | $ 662,338 | $ 677,149 |
Derivative Asset, Fair Value, Gross Asset | 677,149 | |
Level 1 | ||
Fair value measurements | ||
Derivative Asset, Fair Value, Gross Asset | $ 677,149 | |
Corn contracts | ||
Fair value measurements | ||
Derivative Assets, Current | 388,525 | |
Derivative Asset, Fair Value, Gross Asset | 388,525 | |
Corn contracts | Level 1 | ||
Fair value measurements | ||
Derivative Asset, Fair Value, Gross Asset | 388,525 | |
Corn contracts | Level 2 | ||
Fair value measurements | ||
Derivative Asset, Fair Value, Gross Asset | ||
Corn contracts | Level 3 | ||
Fair value measurements | ||
Derivative Asset, Fair Value, Gross Asset | ||
Ethanol contracts | ||
Fair value measurements | ||
Derivative Assets, Current | 273,813 | |
Derivative Asset, Fair Value, Gross Asset | 273,813 | |
Ethanol contracts | Level 1 | ||
Fair value measurements | ||
Derivative Asset, Fair Value, Gross Asset | 273,813 | |
Ethanol contracts | Level 2 | ||
Fair value measurements | ||
Derivative Asset, Fair Value, Gross Asset | ||
Ethanol contracts | Level 3 | ||
Fair value measurements | ||
Derivative Asset, Fair Value, Gross Asset |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) | 12 Months Ended | ||
Oct. 31, 2016USD ($)customer | Oct. 31, 2015USD ($) | Oct. 31, 2014USD ($) | |
Number of customers to whom all of the ethanol and dry distiller grains sold | customer | 3 | ||
Revenue | $ | $ 109,605,544 | $ 115,660,469 | $ 149,418,044 |
Customer Concentration Risk - Revenue [Member] | Eco-Energy, Inc. | Ethanol | |||
Concentration Risk, Percentage | 78.50% | 76.90% | 79.70% |
Customer Concentration Risk - Revenue [Member] | Gavilon Ingredients, LLC | Distiller's Grains | |||
Concentration Risk, Percentage | 15.40% | 19.20% | 16.30% |
Customer Concentration Risk - Revenue [Member] | RPMG, Inc. | Corn Oil | |||
Concentration Risk, Percentage | 4.40% | 2.40% | 2.10% |
Customer Concentration Risk - Accounts Receivable [Member] | Eco-Energy, Inc. | Ethanol | |||
Concentration Risk, Percentage | 78.60% | 68.90% | |
Customer Concentration Risk - Accounts Receivable [Member] | Gavilon Ingredients, LLC | Distiller's Grains | |||
Concentration Risk, Percentage | 11.10% | 24.10% | |
Customer Concentration Risk - Accounts Receivable [Member] | RPMG, Inc. | Corn Oil | |||
Concentration Risk, Percentage | 3.30% | 1.50% |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Oct. 31, 2016 | Oct. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,434,854 | $ 1,800,320 |
Work in process | 696,013 | 693,844 |
Finished Goods | 2,713,716 | 1,829,311 |
Supplies | 1,019,962 | 935,871 |
Totals | $ 5,864,545 | $ 5,259,346 |
DERIVATIVE INSTRUMENTS (Details
DERIVATIVE INSTRUMENTS (Details) | 12 Months Ended | ||
Oct. 31, 2016USD ($)item | Oct. 31, 2015USD ($)item | Oct. 31, 2014USD ($) | |
Derivative Instruments | |||
Derivative Asset, Current | $ 662,338 | $ 677,149 | |
Gains and (losses) from derivative instruments | $ 831,227 | ||
Corn contracts | |||
Derivative Instruments | |||
Derivative Asset, Current | $ 388,525 | ||
Derivative, Nonmonetary Notional Amount | item | 4,285,000 | 1,875,000 | |
Ethanol contracts | |||
Derivative Instruments | |||
Derivative Asset, Current | $ 273,813 | ||
Derivatives not designated as hedging instruments | |||
Derivative Instruments | |||
Derivative Asset, Current | 662,338 | $ 677,149 | |
Derivative Liability, Current | |||
Gains and (losses) from derivative instruments | $ 1,054,729 | $ 787,617 | |
Derivatives not designated as hedging instruments | Commodity Contract [Member] | |||
Derivative Instruments | |||
Maximum term of corn, ethanol and natural gas derivatives entered to protect cash flows (in months) | 24 months | ||
Derivatives not designated as hedging instruments | Corn contracts | |||
Derivative Instruments | |||
Derivative Asset, Current | $ 388,525 | 677,149 | |
Derivative Liability, Current | |||
Derivatives not designated as hedging instruments | Corn contracts | Cost of goods sold | |||
Derivative Instruments | |||
Gains and (losses) from derivative instruments | 915,555 | $ 831,227 | $ 787,617 |
Derivatives not designated as hedging instruments | Ethanol contracts | |||
Derivative Instruments | |||
Derivative Asset, Current | 273,813 | ||
Derivative Liability, Current | |||
Derivatives not designated as hedging instruments | Ethanol contracts | Revenues | |||
Derivative Instruments | |||
Gains and (losses) from derivative instruments | 117,624 | ||
Derivatives not designated as hedging instruments | Natural gas contracts | Cost of goods sold | |||
Derivative Instruments | |||
Gains and (losses) from derivative instruments | $ 21,550 | ||
Long position | Corn contracts | |||
Derivative Instruments | |||
Derivative, Nonmonetary Notional Amount | item | 3,100,000 | 360,000 | |
Short position | Corn contracts | |||
Derivative Instruments | |||
Derivative, Nonmonetary Notional Amount | item | 1,185,000 | 1,515,000 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |||
Construction in Progress, Gross | $ 315,631 | $ 1,148,578 | |
Depreciation | 4,744,000 | 4,556,000 | $ 4,264,000 |
Land and Land Improvements | 9,111,838 | 9,111,838 | |
Plant Buildings and Equipment | 84,594,751 | 81,634,966 | |
Vehicles and Other Equipment | 620,323 | 611,976 | |
Office Buildings and Equipment | 641,860 | 641,860 | |
Property, Plant and Equipment, Gross | 95,284,403 | 93,149,218 | |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (44,908,193) | (40,164,668) | |
Property, Plant and Equipment, Net | $ 50,376,210 | $ 52,984,550 |
DEBT FACILITIES - Interest Rate
DEBT FACILITIES - Interest Rates (Details) - USD ($) | 12 Months Ended | 24 Months Ended | |
Oct. 31, 2016 | Oct. 31, 2016 | Oct. 31, 2015 | |
Debt financing | |||
Long-term Debt | $ 1,883,726 | $ 1,883,726 | $ 7,229,932 |
Less amounts due on demand or within one year | 490,057 | 490,057 | 517,957 |
Net long term debt | 1,393,669 | 1,393,669 | 6,711,975 |
Estimated maturities of long-term debt | |||
2,017 | 490,057 | 490,057 | |
2,018 | 432,183 | 432,183 | |
2,019 | 319,139 | 319,139 | |
2,020 | 326,798 | 326,798 | |
2,021 | $ 315,549 | $ 315,549 | |
Revolving term note payable to lending institution | |||
Debt financing | |||
Long-term Debt | 4,822,777 | ||
Interest rate (as a percent) | 3.45% | 3.45% | |
Initial amount of debt | $ 28,000,000 | $ 28,000,000 | |
Line of Credit Facility, Amount Outstanding | 0 | 0 | 4,822,777 |
Line of Credit Facility, Maximum Borrowing Capacity | 21,000,000 | $ 21,000,000 | 19,677,000 |
Annual reduction in maximum borrowing capacity | $ 3,500,000 | ||
Interest rate on debt | 3.25% | 3.25% | |
Line of Credit Facility, Commitment Fee Description | 0.50% | ||
Line of Credit Facility, Interest Rate Description | LIBOR | ||
Debt Instrument, Fee Amount | $ 2,500 | $ 2,500 | |
Assessments payable as part of water treatment agreement, with interest at 6.55%, due in 2021 | |||
Debt financing | |||
Long-term Debt | $ 1,517,046 | 1,517,046 | 1,775,828 |
Semi-annual payment | $ 189,393 | ||
Interest rate (as a percent) | 6.55% | 6.55% | |
Period of worth of debt | 1 year | ||
Deposit on debt service payments | $ 364,000 | $ 364,000 | |
Assessments payable as part of water treatment agreement, with interest at 0.50%, due in 2016 | |||
Debt financing | |||
Long-term Debt | 51,199 | ||
Semi-annual payment | $ 25,692 | ||
Interest rate (as a percent) | 0.50% | 0.50% | |
Assessments payable as part of water supply agreement, with interest at 8.73%, due in 2019 | |||
Debt financing | |||
Long-term Debt | $ 97,930 | $ 97,930 | 136,378 |
Interest rate (as a percent) | 8.73% | 8.73% | |
Monthly payment | $ 3,942 | ||
Note payable to electrical company, due September 2017 | |||
Debt financing | |||
Long-term Debt | $ 68,750 | $ 68,750 | 143,750 |
Interest rate (as a percent) | 0.00% | 0.00% | |
Maintenance fee (as a percent) | 1.00% | ||
Monthly payment | $ 6,250 | ||
Note payable to noncontrolling interest member of Agrinatural, Interest One Month LIBOR plus 4.0 % | |||
Debt financing | |||
Long-term Debt | $ 200,000 | $ 200,000 | $ 300,000 |
Debt Instrument, Basis Spread on Variable Rate | 4.00% |
MEMBERS' EQUITY (Details)
MEMBERS' EQUITY (Details) | Dec. 17, 2015$ / shares | Dec. 18, 2014$ / shares | Jul. 01, 2014USD ($)shares | Jul. 31, 2013USD ($) | Oct. 31, 2016Vote / sharesshares |
Class of Stock [Line Items] | |||||
Common Unit, Authorized | 80,000,000 | ||||
Common Unit, Issued | 77,932,107 | ||||
Redemption of remaining Notes | $ | $ 207,000 | ||||
Distribution delcared, per membership unit | $ / shares | $ 0.05 | $ 0.12 | |||
Minimum number of units held by members of the company (in shares) | 2,500 | ||||
Number of votes per unit | Vote / shares | 1 | ||||
Project Viking | |||||
Class of Stock [Line Items] | |||||
Issuance of member units | $ | $ 6,900,000 | ||||
Class A units | |||||
Class of Stock [Line Items] | |||||
Common Unit, Authorized | 65,000,000 | ||||
Common Unit, Issued | 13,120,000 | ||||
Class B units | |||||
Class of Stock [Line Items] | |||||
Common Unit, Authorized | 15,000,000 |
LEASES (Details)
LEASES (Details) | 12 Months Ended | ||
Oct. 31, 2016USD ($)item | Oct. 31, 2015USD ($) | Oct. 31, 2014USD ($) | |
Operating Leased Assets [Line Items] | |||
Rent expense | $ 2,523,000 | $ 1,969,000 | $ 1,829,000 |
Minimum non-cancelable lease term at inception (in years) | 1 year | ||
Minimum future lease payments | |||
November 1, 2016 to October 31, 2017 | $ 1,681,650 | ||
November 1, 2017 to October 31, 2018 | 1,350,000 | ||
November 1, 2018 to October 31, 2019 | 1,350,000 | ||
November 1, 2019 to October 31, 2020 | 1,350,000 | ||
November 1, 2020 to October 31, 2021 | 1,350,000 | ||
Thereafter | 5,737,500 | ||
Total minimum lease commitments | $ 12,819,150 | ||
Railcars [Member] | |||
Operating Leased Assets [Line Items] | |||
Capital Leased Assets, Number of Units | item | 145 | ||
Rent expense | $ 123,000 | ||
Hopper Cars [Member] | |||
Operating Leased Assets [Line Items] | |||
Capital Leased Assets, Number of Units | item | 50 | ||
Rent expense | $ 35,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Consolidated financial statement basis of assets | $ 63,771,046 | $ 66,696,384 | $ 66,122,250 |
Plus: Organization and start-up costs capitalized | 933,291 | 1,091,020 | |
Unrealized Gain (Loss) on Derivatives | (662,338) | (677,149) | |
Less: Accumulated tax depreciation and amortization greater than financial statement basis | (63,051,669) | (54,580,532) | |
Plus: Impairment charge | 27,844,579 | 27,844,579 | |
Income tax basis of assets | $ 28,834,909 | $ 40,374,302 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2014 | |
Employee Benefit Plans | |||
Employer match as a percentage of employee deferral | 50.00% | ||
Maximum contribution as a percentage of employee salary | 4.00% | ||
Company contributions to the plan | $ 85 | $ 81 | $ 81 |
RELATED PARTY TRANSACTIONS - (D
RELATED PARTY TRANSACTIONS - (Details) - USD ($) | Jul. 31, 2013 | May 31, 2013 | Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2014 | Oct. 31, 2015 |
RELATED PARTY TRANSACTIONS | ||||||
Management Fee Reduction | $ 4,500 | |||||
Monthly Base Fee | 32,000 | $ 18,000 | ||||
Management Services Agreement | 375,000 | 414,000 | $ 392,000 | |||
Conversion of Stock, Amount Converted | 3,937,550 | |||||
Amount of corn purchased from members | 15,008,000 | 11,032,000 | 14,860,000 | |||
Long-term Debt | 1,883,726 | 7,229,932 | $ 7,229,932 | |||
Monthly Variable Fee | $ 149,000 | 83,000 | ||||
Capital Expenditure Reimbursement | 10.00% | |||||
Project Management Fees | $ 28,000 | 19,000 | ||||
Project Viking | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Gross proceeds | $ 6,900,000 | |||||
Purchase price per unit (in dollars per unit) | $ 0.30 | |||||
Conversion of subordinated convertible debt to member units | $ 102,000 | |||||
Project Viking | Class A | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Class A units Authorized (in shares) | 8,075,000 | |||||
Project Viking | Class B | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Class A units Authorized (in shares) | 15,000,000 | |||||
Majority Shareholder [Member] | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Management Fee, Amount Paid | 35,000 | |||||
Management Services Agreement, Percentage of Applicable Compensation | 50.00% | |||||
Agrinatural Gas | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Interest Expense, Debt | $ 20,000 | |||||
Long-term Debt | $ 300,000 | |||||
Swan Engineering Inc (SEI) [Member] | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Accounts Payable, Related Parties, Current | $ 131,000 | $ 340,000 | 340,000 | |||
Agrinatural, LLC | ||||||
RELATED PARTY TRANSACTIONS | ||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 27.00% | |||||
Interest Expense, Debt | $ 16,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - 10K (Details) bu in Thousands | 1 Months Ended | 12 Months Ended | |||||
Oct. 31, 2013USD ($)gal | May 31, 2005 | Oct. 31, 2016USD ($)miitembu | Oct. 31, 2015USD ($) | Oct. 31, 2014USD ($) | Oct. 31, 2007USD ($) | Oct. 31, 2006USD ($) | |
COMMITMENTS AND CONTINGENCIES | |||||||
Administrative fee to be paid as water usage fees | $ 594,000 | ||||||
Ethanol forward contracts | $ 18,621,000 | ||||||
Initial term of ethanol marketing agreement | 6 months | ||||||
Maximum period of written cancellation notice by either party | 60 days | ||||||
Distance of the natural gas pipeline from the ethanol plant | mi | 16 | ||||||
Corn contracts | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||
Forward Commitment Contracts | bu | 2,898 | ||||||
Gavilon Ingredients, LLC | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||
Distillers' grains commissions | $ 283,000 | $ 308,000 | $ 293,000 | ||||
RPMG, Inc. | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||
Term of agreement | 1 year | ||||||
Water supply development and distribution agreement | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||
Term of agreement | 15 years | ||||||
Initial volume per minute of capacity that is available from the well for which the entity has exclusive rights (in gallons) | gal | 6,000 | ||||||
City's water well bond payments | $ 735,000 | ||||||
Administrative fee to be paid as water usage fees (as a percent) | 5.00% | ||||||
Percentage of profit to be paid as water usage fees | 10.00% | ||||||
Operating and administrative/maintenance expenses paid | $ 12,000 | ||||||
Water treatment agreement | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||
Term of agreement | 30 years | ||||||
Long-term debt | $ 367,000 | ||||||
Operating and administrative/maintenance expenses paid | $ 24,000 | 57,000 | 114,000 | ||||
Water treatment agreement | Assessments payable | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||
Long-term debt | $ 500,000 | $ 3,550,000 | |||||
Ethanol Marketing Agreement | Eco-Energy, Inc. | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||
Percentage of ethanol and distillers grains products produced by the entity to be purchased, marketed and resold by Gavilon | 100.00% | ||||||
Number of automatic renewal terms | item | 3 | ||||||
Period of renewal term under Ethanol Marketing Agreement | 3 years | ||||||
Period for written cancellation notice of Ethanol Mrketing Agreement | 3 months | ||||||
Ethanol marketing fees and commissions | $ 637,000 | 618,000 | 653,000 | ||||
Distiller's Grains | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||
Forward Sales Contracts | 2,863,000 | ||||||
Corn Oil | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||
Forward Sales Contracts | 630,000 | ||||||
Corn oil commissions | $ 96,000 | $ 56,000 | $ 64,000 | ||||
Corn Oil | RPMG, Inc. | |||||||
COMMITMENTS AND CONTINGENCIES | |||||||
Period of written notice of cancellation of corn oil contracts | 90 days |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) | 3 Months Ended | 12 Months Ended | |||||||||||||
Oct. 31, 2016USD ($) | Jul. 31, 2016USD ($) | Apr. 30, 2016USD ($) | Jan. 31, 2016USD ($) | Oct. 31, 2015USD ($) | Jul. 31, 2015USD ($) | Apr. 30, 2015USD ($) | Jan. 31, 2015USD ($) | Oct. 31, 2014USD ($) | Jul. 31, 2014USD ($) | Apr. 30, 2014USD ($) | Jan. 31, 2014USD ($) | Oct. 31, 2016USD ($)segment | Oct. 31, 2015USD ($) | Oct. 31, 2014USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||||||
Number of operating segments | segment | 2 | ||||||||||||||
Revenues | $ 109,605,544 | $ 115,660,469 | $ 149,418,044 | ||||||||||||
Operating Income (Loss) | $ 2,353,527 | $ 2,983,648 | $ 108,111 | $ 48,947 | $ 538,714 | $ 4,014,168 | $ 1,891,732 | $ 966,668 | $ 5,284,529 | $ 7,514,741 | $ 6,758,565 | $ 6,340,753 | 5,494,233 | 7,411,282 | 25,898,588 |
Assets | 63,771,046 | 66,696,384 | 66,122,250 | 63,771,046 | 66,696,384 | 66,122,250 | |||||||||
Ethanol | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Revenues | 108,577,171 | 114,669,831 | 148,512,052 | ||||||||||||
Operating Income (Loss) | 5,057,258 | 8,106,105 | 26,170,923 | ||||||||||||
Assets | 51,080,443 | 53,633,064 | 53,826,820 | 51,080,443 | 53,633,064 | 53,826,820 | |||||||||
Natural Gas | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Revenues | 2,770,310 | 2,761,042 | 2,621,898 | ||||||||||||
Operating Income (Loss) | 1,177,158 | 1,075,581 | 1,443,571 | ||||||||||||
Assets | $ 12,690,603 | $ 13,033,320 | $ 12,295,430 | 12,690,603 | 13,033,320 | 12,295,430 | |||||||||
Intersegment Eliminations | |||||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||||
Revenues | (1,741,937) | (1,770,404) | (1,715,906) | ||||||||||||
Operating Income (Loss) | $ (740,183) | $ (1,770,404) | $ (1,715,906) |
QUARTERLY FINANCIAL DATA (Detai
QUARTERLY FINANCIAL DATA (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Oct. 31, 2016 | Jul. 31, 2016 | Apr. 30, 2016 | Jan. 31, 2016 | Oct. 31, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | Jan. 31, 2015 | Oct. 31, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jan. 31, 2014 | Oct. 31, 2016 | Oct. 31, 2015 | Oct. 31, 2014 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||
Revenues | $ 27,409,875 | $ 30,365,123 | $ 25,241,981 | $ 26,588,565 | $ 28,477,019 | $ 30,192,430 | $ 29,813,571 | $ 27,177,449 | $ 30,276,333 | $ 39,082,103 | $ 39,149,053 | $ 40,910,555 | $ 109,605,544 | $ 115,660,469 | $ 149,418,044 |
Gross profit (loss) | 2,985,331 | 3,730,408 | 920,070 | 857,581 | 1,135,568 | 4,755,934 | 2,673,825 | 1,847,050 | 5,773,857 | 8,292,015 | 7,602,033 | 7,180,730 | 8,493,390 | 10,412,377 | 28,848,635 |
Operating income (loss) | 2,353,527 | 2,983,648 | 108,111 | 48,947 | 538,714 | 4,014,168 | 1,891,732 | 966,668 | 5,284,529 | 7,514,741 | 6,758,565 | 6,340,753 | 5,494,233 | 7,411,282 | 25,898,588 |
Net income (loss) attributable to Heron Lake BioEnergy, LLC | $ 2,177,906 | $ 2,810,607 | $ 13,258 | $ (25,555) | $ 329,320 | $ 3,808,820 | $ 1,733,837 | $ 879,256 | $ 5,035,588 | $ 6,785,754 | $ 6,323,059 | $ 5,824,444 | $ 5,194,316 | $ 6,979,716 | $ 24,327,518 |
Basic earnings (loss) per unit (Class A and B) | $ 0.03 | $ 0.03 | $ 0.01 | $ 0.05 | $ 0.02 | $ 0.01 | $ 0.06 | $ 0.10 | $ 0.10 | $ 0.09 | $ 0.06 | $ 0.09 | $ 0.35 | ||
Diluted earnings (loss) per unit (Class A and B) | $ 0.03 | $ 0.03 | $ 0.01 | $ 0.05 | $ 0.02 | $ 0.01 | $ 0.06 | $ 0.09 | $ 0.08 | $ 0.08 | $ 0.05 | $ 0.12 |