Heron Lake BioEnergy (HLBYL) 10-Q 17 Mar 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Jan. 31, 2017	Mar. 17, 2017
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-Q
Document Period End Date	Jan. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus (Q1,Q2,Q3,FY)	Q1
Amendment Flag	false
Entity Current Reporting Status	Yes
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 ($)	Jan. 31, 2017	Oct. 31, 2016
Current Assets
Cash	$ 1,110,551	$ 1,297,644
Accounts receivable	3,972,895	4,607,202
Inventory	6,764,127	5,864,545
Commodity derivative assets	447,005	662,338
Prepaid expenses and other current assets	207,974	181,853
Total current assets	12,502,552	12,613,582
Property and Equipment, net	49,596,296	50,376,210
Other Assets
Other intangible assets, net	74,463	84,000
Other assets	697,254	697,254
Total other assets	771,717	781,254
Total Assets	62,870,565	63,771,046
Current Liabilities
Current maturities of long-term debt	462,086	490,057
Checks drawn in excess of bank balance	636,678	1,866,683
Accounts payable	2,363,114	4,878,210
Commodity derivative instruments	6,081
Accrued expenses	449,709	397,407
Total current liabilities	3,917,668	7,632,357
Long-Term Debt, less current portion	1,292,753	1,393,669
Commitments and Contingencies
Members' Equity
Members' equity attributable to Heron Lake BioEnergy, LLC consists of 77,932,107 units issued and outstanding at both January 31, 2017 and October 31, 2016	56,332,009	53,499,596
Non-controlling interest	1,328,135	1,245,424
Total members' equity	57,660,144	54,745,020
Total Liabilities and Members' Equity	$ 62,870,565	$ 63,771,046

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - shares	Jan. 31, 2017	Oct. 31, 2016
Statement of Financial Position [Abstract]
Members' Equity, units issued	77,932,107	77,932,107
Members' Equity, units outstanding	77,932,107	77,932,107

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Income Statement [Abstract]
Revenues	$ 27,390,074	$ 26,588,565
Cost of Goods Sold	23,975,843	25,730,984
Gross Profit	3,414,231	857,581
Operating Expenses	(846,697)	(808,634)
Operating Income	2,567,534	48,947
Other Income (Expense)
Interest income	420	253
Interest expense	(31,387)	(58,674)
Other income	378,557	67,678
Total other income, net	347,590	9,257
Net Income	2,915,124	58,204
Less: Net Income Attributable to Non-controlling Interest	(82,711)	(83,759)
Net Income Attributable to Heron Lake BioEnergy, LLC	$ 2,832,413	$ (25,555)
Weighted Average Number of Shares Outstanding, Basic and Diluted (Class A and B)	77,932,107	77,932,107
Net Income Per Unit Attributable to Heron Lake BioEnergy, LLC - Basic and Diluted (Class A and B)	$ 0.04	$ 0
Distributions Per Unit (Class A and B)	$ 0	$ 0.05

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Cash Flow From Operating Activities
Net income	$ 2,915,124	$ 58,204
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,238,782	1,184,553
Gain on sale of asset	(45,000)
Change in fair value of commodity derivative instruments	219,629	253,684
Change in fair value of operating assets and liabilities:
Restricted cash		(363,291)
Accounts receivable	634,307	924,164
Inventory	(899,582)	(233,176)
Commodity derivative instruments	441,043	(176,050)
Prepaid expenses and other current assets	(26,121)	(1,672,711)
Accounts payable	(2,578,869)	66,685
Accrued expenses	52,302	804,595
Net cash provided by operating activities	1,512,357	339,289
Cash Flows from Investing Activities
Capital expenditures	(385,558)	(718,062)
Proceeds from disposal of asset	45,000
Net cash used in investing activities	(340,558)	(718,062)
Cash Flows from Financing Activities
Proceeds from long-term debt		4,613,122
Checks drawn in excess of bank balance	(1,230,005)	3,505,086
Payments on long-term debt	(128,887)	(3,721,574)
Distributions to Heron Lake BioEnergy, LLC members		(3,896,605)
Distributions to non-controlling interest		(80,997)
Net cash provided by (used in) financing activities	(1,358,892)	419,032
Net increase (decrease) in cash	(187,093)	40,259
Cash - Beginning of period	1,297,644	1,126,283
Cash - End of period	1,110,551	1,166,542
Supplemental Disclosure of Cash Flow Information
Interest expense	31,387	58,674
Supplemental Disclosure of Non-Cash Investing, Operating and Financing Activities
Capital expenditures included in accounts payable	$ 63,773	$ 164,491

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Jan. 31, 2017
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	1. Nature of Business Heron Lake BioEnergy, LLC 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, Heron Lake BioEnergy, LLC produces and sells distillers’ grains with solubles and corn oil as co-products of ethanol production. Heron Lake BioEnergy, LLC’s wholly owned subsidiary, HLBE Pipeline Company, LLC (“HLBE Pipeline Company”), owns 73% of Agrinatural Gas, LLC (“Agrinatural”). Agrinatural operates a natural gas pipeline that provides natural gas to Heron Lake BioEnergy, LLC 's ethanol production facility and other customers. Basis of Presentation and Principles of Consolidation The condensed consolidated unaudited financial statements as of January 31, 2017 include the accounts of Heron Lake BioEnergy, LLC and its wholly owned subsidiary, HLBE Pipeline Company (collectively the “Company”). Given the Company’s control over the operations of Agrinatural and its majority voting interest, the Company consolidates the unaudited financial statements of Agrinatural with its consolidated unaudited financial statements, with the equity and earnings (loss) attributed to the remaining 27% noncontrolling interest identified separately in the accompanying condensed consolidated balance sheets and statements of operations. All significant intercompany balances and transactions are eliminated in consolidation. The condensed consolidated unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These condensed consolidated unaudited financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company’s audited consolidated financial statements for the year ended October 31, 2016, contained in the Company’s annual report on Form 10-K. In the opinion of management, the condensed consolidated unaudited financial statements reflect all adjustments consisting of normal recurring accruals that we consider necessary to present fairly the Company’s results of operations, financial position and cash flows. The results reported in these condensed consolidated unaudited financial statements should not be regarded as necessarily indicative of results that may be expected for any other fiscal period or for the fiscal year. Accounting Estimates Management uses estimates and assumptions in preparing these condensed consolidated unaudited 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 economic lives of property and equipment, the analysis of impairment of long-lived assets and valuation of commodity derivative instruments, inventory, and inventory purchase and sales commitments. 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. Non-controlling Interest Amounts recorded as non-controlling 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. Pursuant to the firm natural gas transportation agreement , Agrinatural will provide natural gas to the plant with a specified price per MMBTU for a term ending on October 31, 2021, with one automatic renewal option to extend the term for an additional five years. 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. 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. Inventory Inventory is stated at the lower of cost or net realizable value in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2015-11 issued in July 2015. Cost for all inventories is determined using the first in first out method (FIFO). Net realizable value is the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. Inventory consists of raw materials, work in process, finished goods, and spare parts. Corn is the primary raw material along with other raw materials. Finished goods consist of ethanol, distillers’ grains, and corn oil. Reportable Operating Segments Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” establishes the standards for reporting information about segments in financial statements. Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Based on the related business nature and expected financial results criteria set forth in ASC 280, the Company has two reportable operating segments for financial reporting purposes. · Ethanol Production . Based on the nature of the products and production process and the expected financial results, the Company’s operations at its ethanol plant, including the production and sale of ethanol and its co-products, are aggregated into one financial reporting segment. · Natural Gas Pipeline . The Company has majority ownership in Agrinatural, through its wholly owned subsidiary, HLBE Pipeline, LLC, and operations of Agrinatural’s natural gas pipeline are aggregated into another financial reporting segment.

RISKS AND UNCERTAINTIES

RISKS AND UNCERTAINTIES	3 Months Ended
	Jan. 31, 2017
Risks and Uncertainties [Abstract]
RISKS AND UNCERTAINTIES	2. The Company has certain risks and uncertainties that it experiences during volatile market conditions. These volatilities can have a severe impact on operations. The Company’s revenues are derived from the sale and distribution of ethanol 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 75% to 85% of total revenues and corn costs average 75% to 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 23, 2016, the U.S. Environmental Protection Agency (the “EPA”) announced the final rule for 2017 Renewable Volume Obligation (“RVO”) requirements, which is set at 15.0 billion gallons for corn-based ethanol, which equates to the original requirements set by the RFS. Comparatively, the EPA established RVOs requirements for the RFS for calendar years 2014, 2015, and 2016 were below the original requirements set by the RFS. In January 2017, the Trump administration imposed a government-wide freeze on new and pending regulations, which included the 2017 RVOs that were originally intended to go into effect on February 10, 2017. Industry organizations such as the Renewable Fuels Association and Growth Energy believe this action is simply procedural with a new administration, and do not expect it to result in any substantive changes to the rule itself. Additionally, 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 and/or continued political uncertainty under the new administration regarding the RFS could result in a significant decrease in ethanol demand. 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, due to a decline in oil and gasoline prices, ethanol traded at a premium to gasoline during much of the three months ended January 31, 2017, causing a disincentive for discretionary blending of ethanol. However, in January 2017, the oil and gasoline prices rose resulting in ethanol trading at a discount to gasoline since January 2017, which may encourage discretionary blending of ethanol beyond the required blend rate. Management anticipates that ethanol prices will continue to change in relation to changes in corn and energy prices. If corn, crude oil and gasoline prices decrease, that could have 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.

INVENTORY

INVENTORY	3 Months Ended
	Jan. 31, 2017
Inventory Disclosure [Abstract]
INVENTORY	3. Inventory consisted of the following: January 31, 2017 October 31, 2016 (unaudited) Raw materials $ $ Work in process Finished Goods Supplies Totals $ $ The Company performs a lower of cost or net realizable value analysis on inventory to determine if the market values of certain inventories are less than their carrying value, which is attributable primarily to decreases in market prices of corn and ethanol. Based on the lower of cost or net realizable value analysis, as a component of cost of goods sold, the Company recorded a loss on ethanol inventories of approximately $191,000 and $261,000 for the three months ended January 31, 2017 and 2016, respectively.

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS	3 Months Ended
	Jan. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
DERIVATIVE INSTRUMENTS	4. DERIVATIVE INSTRUMENTS As of January 31, 2017, the total notional amount of the Company’s outstanding corn derivative instruments was approximately 5,630,000 bushels, comprised of long corn positions on 3,250,000 bushels that were entered into to hedge forecasted ethanol sales through March 2017, and short corn positions on 2,380,000 bushels that were entered into to hedge forecasted corn purchases through December 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 January 31, 2017, the total notional amount of the Company’s outstanding ethanol derivative instruments was approximately 1,260,000 gallons that were entered into to hedge forecasted ethanol sales through March 2017. As of January 31, 2017, the Company had no cash collateral (restricted cash) related to corn derivatives held by a broker. The following tables provide details regarding the Company’s derivative instruments at January 31, 2017, none of which are 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, 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 tables provide details regarding the Company’s derivative 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 $ $ — The following tables provide detail regarding the gains (losses) from Company’s derivative financial instruments in its condensed consolidated unaudited statements of operations, none of which are designated as hedging instruments: Statement of Three Months Ended January 31, Operations location 2017 2016 Corn contracts Cost of goods sold $ $ Ethanol contracts Revenues Natural gas contracts Cost of goods sold — Total gain $ $

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
	Jan. 31, 2017
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	5. The following table provides information on those derivative assets and liabilities measured at fair value on a recurring basis at January 31, 2017: Fair Value Measurement Using Carrying Amount Quoted Prices in Significant Other Significant in Balance Sheet Active Markets Observable Inputs Unobservable inputs Financial Assets January 31, 2017 Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative instruments - Ethanol $ $ $ $ — Financial Liabilities Commodity Derivative instruments - Corn $ $ $ $ — $ — The following table provides information on those derivative assets measured at fair value on a recurring basis at October 31, 2016: Fair Value Measurement Using Carrying Amount Quoted Prices in Significant Other Significant in Balance Sheet Active Markets Observable Inputs Unobservable inputs Financial Assets October 31, 2016 Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative instruments - Corn $ $ $ $ — $ — Commodity Derivative instruments - Ethanol $ $ $ $ — $ — The Company determines the fair value of commodity derivative instruments by obtaining fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the Chicago Board of Trade market and New York Mercantile Exchange. We determine the fair value of ethanol Level 2 instruments by model-based techniques in which all significant inputs are observable in the markets noted above.

DEBT FINANCING

DEBT FINANCING	3 Months Ended
	Jan. 31, 2017
Debt Disclosure [Abstract]
DEBT FINANCING	6. Long-term debt consists of the following: January 31, 2017 October 31, 2016 (unaudited) 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 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 4.78% and 4.53% at January 31, 2017 and October 31, 2016, 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 note payable with a lender, under which the Company could initially borrow, repay, and re-borrow in an amount up to $28,000,000 at any time prior to the March 2, 2022 maturity date. However, the amount available for borrowing under the revolving term note reduces by $3,500,000 annually, starting March 1, 2015 and continuing each anniversary thereafter until maturity. There was no outstanding balance on this facility at January 31, 2017, and October 31, 2016. Therefore, the aggregate principal amount available to the Company for borrowing at January 31, 2017, and October 31, 2016 was $21,000,000. The amount available for borrowing under this facility was further reduced at March 1, 2017 to $17,500,000. 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, which was 4.03% and 3.45% at January 31, 2017, and October 31, 2016, respectively. 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 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 January 31, 2017 and October 31, 2016, 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 revolving term loan and was appointed the administrative agent for the purpose of servicing the loan. 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 AgStar. Estimated annual maturities of long-term debt at January 31, 2017 are as follows based on the most recent debt agreements: 2018 $ 2019 2020 2021 2022 Total debt $

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Jan. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	7. Corn Forward Contracts At January 31, 2017, the Company had cash and basis contracts for forward corn purchase commitments totatling approximately 7,740,000 bushels of corn for various delivery periods through October 2017. Ethanol Forward Contracts At January 31, 2017, the Company had fixed and basis contracts to sell approximately $12,779,000 of ethanol for various delivery periods through March 2017. Distillers’ Grains Forward Contracts At January 31, 2017, the Company had forward contracts to sell approximately $1,255,000 of distillers’ grains for various delivery periods through March 2017. Corn Oil Forward Contracts At January 31, 2017, the Company had forward contracts to sell approximately $304,000 of corn oil for various delivery periods through February 2017.

MEMBERS' EQUITY

MEMBERS' EQUITY	3 Months Ended
	Jan. 31, 2017
Equity [Abstract]
MEMBERS' EQUITY	8. 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. 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 at both January 31,and October 31, 2016.

LEASES

LEASES	3 Months Ended
	Jan. 31, 2017
Leases [Abstract]
LEASES	9. The Company leases equipment, primarily rail cars, under operating leases through 2026. Rent expense for these leases was approximately $540,000 and $533,000 for the three months ended January 31, 2017 and 2016, respectively.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	3 Months Ended
	Jan. 31, 2017
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	10. Granite Falls Energy, LLC The Company has a management services agreement with GFE. Under the terms of the management services agreement, GFE supplies 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 and the Company pays GFE 50% of the total salary, bonuses, and other expenses and costs incurred by GFE for the three management positions. The management services agreement automatically renews 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 then current term. The management services agreement may also be terminated by either party for cause under certain circumstances. Total expenses under this agreement were approximately $108,000 and $114,000 for the three months ended January 31, 2017 and 2016, respectively. Corn Purchases - Members The Company purchased approximately $3,025,000 and $5,570,000 of corn from board members for the three months ended January 31, 2017 and 2016 . 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 $2,000 and $3,000 during the three months ended January 31, 2017 and 2016, respectively. 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. The Company paid approximately $48,000 and $44,000 for the monthly base fee and variable customer management fee for the three months ended January 31, 2017 and 2016, 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. The Company recorded project management fees of approximately $10,000 and $38,000 for the three months ended January 31, 2017 and 2016, respectively. The new project management with SEI expires June 30, 2019, unless earlier terminated for cause as defined in the agreement.

BUSINESS SEGMENTS

BUSINESS SEGMENTS	3 Months Ended
	Jan. 31, 2017
Segment Reporting [Abstract]
BUSINESS SEGMENTS	11. 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. 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 revenue, contribution to operating income, and total assets: Three Months Ended January 31, 2017 January 31, 2016 Revenue: (unaudited) (unaudited) Ethanol production $ $ Natural gas pipeline Eliminations Total Revenue $ $ Three Months Ended January 31, 2017 January 31, 2016 Operating Income: (unaudited) (unaudited) Ethanol production $ $ Natural gas pipeline Eliminations Operating Income $ $ January 31, 2017 October 31, 2016 Total Assets: (unaudited) Ethanol production $ $ Natural gas pipeline Total Assets $ $

SUMMARY OF SIGNIFICANT ACCOUN17

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Jan. 31, 2017
Accounting Policies [Abstract]
Nature of Business	Nature of Business Heron Lake BioEnergy, LLC 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, Heron Lake BioEnergy, LLC produces and sells distillers’ grains with solubles and corn oil as co-products of ethanol production. Heron Lake BioEnergy, LLC’s wholly owned subsidiary, HLBE Pipeline Company, LLC (“HLBE Pipeline Company”), owns 73% of Agrinatural Gas, LLC (“Agrinatural”). Agrinatural operates a natural gas pipeline that provides natural gas to Heron Lake BioEnergy, LLC 's ethanol production facility and other customers.
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation The condensed consolidated unaudited financial statements as of January 31, 2017 include the accounts of Heron Lake BioEnergy, LLC and its wholly owned subsidiary, HLBE Pipeline Company (collectively the “Company”). Given the Company’s control over the operations of Agrinatural and its majority voting interest, the Company consolidates the unaudited financial statements of Agrinatural with its consolidated unaudited financial statements, with the equity and earnings (loss) attributed to the remaining 27% noncontrolling interest identified separately in the accompanying condensed consolidated balance sheets and statements of operations. All significant intercompany balances and transactions are eliminated in consolidation. The condensed consolidated unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These condensed consolidated unaudited financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company’s audited consolidated financial statements for the year ended October 31, 2016, contained in the Company’s annual report on Form 10-K. In the opinion of management, the condensed consolidated unaudited financial statements reflect all adjustments consisting of normal recurring accruals that we consider necessary to present fairly the Company’s results of operations, financial position and cash flows. The results reported in these condensed consolidated unaudited financial statements should not be regarded as necessarily indicative of results that may be expected for any other fiscal period or for the fiscal year.
Accounting Estimates	Accounting Estimates Management uses estimates and assumptions in preparing these condensed consolidated unaudited 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 economic lives of property and equipment, the analysis of impairment of long-lived assets and valuation of commodity derivative instruments, inventory, and inventory purchase and sales commitments. 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	Non-controlling Interest Amounts recorded as non-controlling 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. Pursuant to the firm natural gas transportation agreement , Agrinatural will provide natural gas to the plant with a specified price per MMBTU for a term ending on October 31, 2021, with one automatic renewal option to extend the term for an additional five years.
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. 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	Inventory Inventory is stated at the lower of cost or net realizable value in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2015-11 issued in July 2015. Cost for all inventories is determined using the first in first out method (FIFO). Net realizable value is the estimated selling prices in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. Inventory consists of raw materials, work in process, finished goods, and spare parts. Corn is the primary raw material along with other raw materials. Finished goods consist of ethanol, distillers’ grains, and corn oil.
Reportable Operating Segments	Reportable Operating Segments Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” establishes the standards for reporting information about segments in financial statements. Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Based on the related business nature and expected financial results criteria set forth in ASC 280, the Company has two reportable operating segments for financial reporting purposes. · Ethanol Production . Based on the nature of the products and production process and the expected financial results, the Company’s operations at its ethanol plant, including the production and sale of ethanol and its co-products, are aggregated into one financial reporting segment. Natural Gas Pipeline . The Company has majority ownership in Agrinatural, through its wholly owned subsidiary, HLBE Pipeline, LLC, and operations of Agrinatural’s natural gas pipeline are aggregated into another financial reporting segment.

INVENTORY (Tables)

INVENTORY (Tables)	3 Months Ended
	Jan. 31, 2017
Inventory Disclosure [Abstract]
Schedule of inventory	January 31, 2017 October 31, 2016 (unaudited) Raw materials $ $ Work in process Finished Goods Supplies Totals $ $

DERIVATIVE INSTRUMENTS (Tables)

DERIVATIVE INSTRUMENTS (Tables)	3 Months Ended
	Jan. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of derivative instruments	The following tables provide details regarding the Company’s derivative instruments at January 31, 2017, none of which are 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, 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 tables provide details regarding the Company’s derivative 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 $ $ —
Schedule of gains (losses) from derivative instruments included in the Condensed Consolidated Statements of Operations	The following tables provide detail regarding the gains (losses) from Company’s derivative financial instruments in its condensed consolidated unaudited statements of operations, none of which are designated as hedging instruments: Statement of Three Months Ended January 31, Operations location 2017 2016 Corn contracts Cost of goods sold $ $ Ethanol contracts Revenues Natural gas contracts Cost of goods sold — Total gain $ $

FAIR VALUE (Tables)

FAIR VALUE (Tables)	3 Months Ended
	Jan. 31, 2017
Fair Value Disclosures [Abstract]
Schedule of fair value of assets measured on a non-recurring basis	The following table provides information on those derivative assets and liabilities measured at fair value on a recurring basis at January 31, 2017: Fair Value Measurement Using Carrying Amount Quoted Prices in Significant Other Significant in Balance Sheet Active Markets Observable Inputs Unobservable inputs Financial Assets January 31, 2017 Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative instruments - Ethanol $ $ $ $ — Financial Liabilities Commodity Derivative instruments - Corn $ $ $ $ — $ — The following table provides information on those derivative assets measured at fair value on a recurring basis at October 31, 2016: Fair Value Measurement Using Carrying Amount Quoted Prices in Significant Other Significant in Balance Sheet Active Markets Observable Inputs Unobservable inputs Financial Assets October 31, 2016 Fair Value (Level 1) (Level 2) (Level 3) Commodity Derivative instruments - Corn $ $ $ $ — $ — Commodity Derivative instruments - Ethanol $ $ $ $ — $ —

DEBT FINANCING (Tables)

DEBT FINANCING (Tables)	3 Months Ended
	Jan. 31, 2017
Debt Disclosure [Abstract]
Schedule of Long-term debt	Long-term debt consists of the following: January 31, 2017 October 31, 2016 (unaudited) 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 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 4.78% and 4.53% at January 31, 2017 and October 31, 2016, 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 annual maturities of long-term debt at January 31, 2017 are as follows based on the most recent debt agreements: 2018 $ 2019 2020 2021 2022 Total debt $

BUSINESS SEGMENTS (Tables)

BUSINESS SEGMENTS (Tables)	3 Months Ended
	Jan. 31, 2017
Segment Reporting [Abstract]
Schedule of Primary Business Segments	Ethanol Production Ethanol and co-product production and sales Natural gas pipeline Ownership and operations of natural gas pipeline
Financial Information By Segment	The following tables summarize financial information by segment and provide a reconciliation of segment revenue, contribution to operating income, and total assets: Three Months Ended January 31, 2017 January 31, 2016 Revenue: (unaudited) (unaudited) Ethanol production $ $ Natural gas pipeline Eliminations Total Revenue $ $ Three Months Ended January 31, 2017 January 31, 2016 Operating Income: (unaudited) (unaudited) Ethanol production $ $ Natural gas pipeline Eliminations Operating Income $ $ January 31, 2017 October 31, 2016 Total Assets: (unaudited) Ethanol production $ $ Natural gas pipeline Total Assets $ $

SUMMARY OF SIGNIFICANT ACCOUN23

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nature of Business (Details) - gal gal in Millions	3 Months Ended
	Jan. 31, 2017	Mar. 27, 2015
Summary of significant accounting policies
Operating capacity of Ethanol plant owned and operated	72.3
Term of renewed contract	5 years
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%

RISKS AND UNCERTAINTIES (Detail

RISKS AND UNCERTAINTIES (Details) gal in Billions	3 Months Ended
	Jan. 31, 2017gal
UNITED STATES
RISKS AND UNCERTAINTIES
Expected ethanol production capacity	15
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%

INVENTORY (Details)

INVENTORY (Details) - USD ($)	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Oct. 31, 2016
Inventory Disclosure [Abstract]
Raw materials	$ 1,289,879		$ 1,434,854
Work in process	711,838		696,013
Finished Goods	3,806,512		2,713,716
Supplies	955,898		1,019,962
Totals	6,764,127		$ 5,864,545
Loss on inventory	$ 191,000	$ 261,000

DERIVATIVE INSTRUMENTS (Details

DERIVATIVE INSTRUMENTS (Details)	3 Months Ended
	Jan. 31, 2017USD ($)item	Jan. 31, 2016USD ($)	Oct. 31, 2016USD ($)item
Derivative Instruments
Derivative Asset, Current	$ 447,005		$ 662,338
Derivative Liability, Current	6,081
Corn contracts
Derivative Instruments
Derivative Asset, Current	6,081		388,525
Derivative Liability, Current	$ 6,081
Derivative, Nonmonetary Notional Amount | item	5,630,000		4,285,000
Cash collateral	$ 0
Ethanol contracts
Derivative Instruments
Derivative Asset, Current	$ 447,005		$ 273,813
Derivative Liability, Current
Derivative, Nonmonetary Notional Amount | item	1,260,000
Derivatives not designated as hedging instruments
Derivative Instruments
Gains and (losses) from derivative instruments	$ 219,629	$ 253,684
Derivatives not designated as hedging instruments | Cost of goods sold
Derivative Instruments
Gains and (losses) from derivative instruments	(56,628)	187,387
Derivatives not designated as hedging instruments | Revenues
Derivative Instruments
Gains and (losses) from derivative instruments	$ 276,257	44,747
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	3,250,000		3,100,000
Short position | Corn contracts
Derivative Instruments
Derivative, Nonmonetary Notional Amount | item	2,380,000		1,185,000

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($)	Jan. 31, 2017	Oct. 31, 2016
Fair value measurements
Derivative Assets, Current	$ 447,005	$ 662,338
Ethanol contracts
Fair value measurements
Derivative Assets, Current	447,005	273,813
Derivative Asset, Fair Value, Gross Asset	447,005	273,813
Ethanol contracts | Level 1
Fair value measurements
Derivative Asset, Fair Value, Gross Asset	256,562	273,813
Ethanol contracts | Level 2
Fair value measurements
Derivative Asset, Fair Value, Gross Asset	190,443
Corn contracts
Fair value measurements
Derivative Assets, Current	6,081	388,525
Derivative Asset, Fair Value, Gross Asset	6,081	388,525
Corn contracts | Level 1
Fair value measurements
Derivative Asset, Fair Value, Gross Asset	$ 6,081	$ 388,525

DEBT FINANCING - (Details)

DEBT FINANCING - (Details) - USD ($)	3 Months Ended
	Jan. 31, 2017	Mar. 01, 2017	Oct. 31, 2016
Debt financing
Long-term Debt	$ 1,754,839		$ 1,883,726
Less amounts due on demand or within one year	462,086		490,057
Net long term debt	1,292,753		$ 1,393,669
Estimated maturities of long-term debt
2,018	462,086
2,019	333,015
2,020	307,467
2,021	326,798
2,022	$ 325,473
Revolving term note payable to lending institution
Debt financing
Interest rate (as a percent)	4.03%		3.45%
Initial amount of debt	$ 28,000,000
Annual decline in loan availability after a specified date	$ 3,500,000
Line of Credit Facility, Interest Rate Description	LIBOR
Debt Instrument, Basis Spread on Variable Rate	3.25%
Aggregate principal amount available for borrowing	$ 21,000,000	$ 17,500,000
Unused commitment fee per annum on the unused portion of debt (as a percent)	0.50%
Assessments payable as part of water treatment agreement, with interest at 6.55%, due in 2021
Debt financing
Long-term Debt	$ 1,516,977		$ 1,517,046
Semi-annual payment	$ 189,393
Interest rate (as a percent)	6.55%
Debt Instrument, Period of Worth of Debt	1 year
Deposit on debt service payments	$ 364,000
Assessments payable as part of water supply agreement, with interest at 8.73%, due in 2019
Debt financing
Long-term Debt	$ 87,862		97,930
Interest rate (as a percent)	8.73%
Monthly payment	$ 3,942
Note payable to electrical company, due September 2017
Debt financing
Long-term Debt	$ 50,000		68,750
Interest rate (as a percent)	0.00%
Monthly payment	$ 6,250
Maintenance fee (as a percent)	1.00%
Note payable to noncontrolling interest member of Agrinatural, Interest One Month LIBOR plus 4.0 %
Debt financing
Long-term Debt	$ 100,000		$ 200,000
Interest rate (as a percent)	4.78%		4.53%
Debt Instrument, Basis Spread on Variable Rate	4.00%

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - (Details)	3 Months Ended
	Jan. 31, 2017USD ($)bu
Ethanol
COMMITMENTS AND CONTINGENCIES
Forward Contracts	$ 12,779,000
Distiller's Grains
COMMITMENTS AND CONTINGENCIES
Forward Contracts	$ 1,255,000
Corn
COMMITMENTS AND CONTINGENCIES
Forward Contracts, Bushels | bu	7,740,000
Corn Oil
COMMITMENTS AND CONTINGENCIES
Forward Contracts	$ 304,000

MEMBERS' EQUITY (Details)

MEMBERS' EQUITY (Details)	Jan. 31, 2017Vote / sharesshares	Oct. 31, 2016shares
Class of Stock [Line Items]
Common Unit, Authorized	80,000,000
Common Unit, Issued	77,932,107	77,932,107
Members' Equity, units outstanding	77,932,107	77,932,107
Minimum number of units held by members of the company (in shares)	2,500
Number of votes per unit | Vote / shares	1
Class A units
Class of Stock [Line Items]
Common Unit, Authorized	65,000,000
Common Unit, Issued	62,932,107	62,932,107
Members' Equity, units outstanding	62,932,107	62,932,107
Class B units
Class of Stock [Line Items]
Common Unit, Authorized	15,000,000
Common Unit, Issued	15,000,000	15,000,000
Members' Equity, units outstanding	15,000,000	15,000,000

LEASES (Details)

LEASES (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Leases [Abstract]
Operating Leases, Rent Expense, Net	$ 540	$ 533

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($)	Mar. 27, 2015	Jan. 31, 2017	Jan. 31, 2016	Jan. 31, 2017	Oct. 31, 2016
RELATED PARTY TRANSACTIONS
Amount of corn purchased from members		$ 3,025,000	$ 5,570,000
Long-term Debt		1,754,839		$ 1,754,839	$ 1,883,726
Agrinatural, LLC
RELATED PARTY TRANSACTIONS
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	27.00%
Management Fee Reduction		4,500
Monthly Base Fee				48,000
Monthly Variable Fee				44,000
Swan Engineering Inc (SEI) [Member]
RELATED PARTY TRANSACTIONS
Capital Expenditure Reimbursement	10.00%
Project Management Fees		10,000	38,000
Granite Falls Energy LLC [Member]
RELATED PARTY TRANSACTIONS
Management Services Agreement		$ 108,000
Majority Shareholder [Member] | Granite Falls Energy LLC [Member]
RELATED PARTY TRANSACTIONS
Management Services Agreement, Percentage of Applicable Compensation		50.00%
Management Services Agreement, Term		1 year
Agrinatural Gas
RELATED PARTY TRANSACTIONS
Long-term Debt		$ 300,000		$ 300,000
Interest Expense, Debt		$ 2,000	$ 3,000

BUSINESS SEGMENTS (Details)

BUSINESS SEGMENTS (Details)	3 Months Ended
	Jan. 31, 2017USD ($)segment	Jan. 31, 2016USD ($)	Oct. 31, 2016USD ($)
Segment Reporting Information [Line Items]
Number of operating segments | segment	2
Revenues	$ 27,390,074	$ 26,588,565
Operating income	2,567,534	48,947
Assets	62,870,565		$ 63,771,046
Ethanol
Segment Reporting Information [Line Items]
Revenues	26,964,891	26,248,829
Operating income	2,194,198	(332,118)
Assets	50,260,611		51,080,443
Natural Gas
Segment Reporting Information [Line Items]
Revenues	868,635	788,959
Operating income	563,930	598,038
Assets	12,609,954		$ 12,690,603
Intersegment Eliminations
Segment Reporting Information [Line Items]
Revenues	(443,452)	(449,223)
Operating income	$ (190,594)	$ (216,973)