Lincolnway Energy 10-Q 11 Aug 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information	9 Months Ended
	Jun. 30, 2017shares
Document and Entity Information [Abstract]
Entity Registrant Name	Lincolnway Energy, LLC
Entity Central Index Key	1,350,420
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding	42,049

Balance Sheets Statement

Balance Sheets Statement - USD ($)	Jun. 30, 2017	Sep. 30, 2016
CURRENT ASSETS
Cash	$ 605,454	$ 613,139
Derivative financial instruments (Note 8 and 9)	251,732	497,677
Trade and other accounts receivable (Note 7)	2,907,129	3,088,958
Inventories (Note 3)	5,243,537	5,726,606
Prepaid expenses and other	420,654	388,567
Total current assets	9,428,506	10,314,947
PROPERTY AND EQUIPMENT
Land and land improvements	7,148,360	6,982,287
Buildings and improvements	3,220,876	3,158,371
Plant and process equipment	80,554,897	78,010,712
Office furniture and equipment	472,216	460,486
Construction in progress	4,920,610	820,036
Property, plant and equipment, gross	96,316,959	89,431,892
Accumulated depreciation	(57,076,142)	(54,502,768)
Property, plant and equipment, net	39,240,817	34,929,124
OTHER ASSETS
Other assets, noncurrent	818,466	841,367
Assets	49,487,789	46,085,438
CURRENT LIABILITIES
Accounts payable	1,812,902	3,166,407
Accounts payable, related party (Note 6)	759,144	780,303
Current maturities of long-term debt (Note 5)	0	27,571
Accrued expenses	1,297,633	1,074,774
Total current liabilities	3,869,679	5,049,055
NONCURRENT LIABILITIES
Long-term debt, less current maturities (Note 5)	5,400,000	2,500,000
Deferred revenue	481,481	592,593
Other	486,387	450,000
Total noncurrent liabilities	6,367,868	3,542,593
MEMBERS' EQUITY
Member contributions, 42,049 units issued and outstanding	38,990,105	38,990,105
Retained earnings (deficit)	260,137	(1,496,315)
Members' Equity	39,250,242	37,493,790
Liabilities and Equity	$ 49,487,789	$ 46,085,438

Balance Sheets Parenthetical St

Balance Sheets Parenthetical Statement - USD ($)	9 Months Ended	12 Months Ended
	Jun. 30, 2017	Sep. 30, 2016
OTHER ASSETS
Financing costs, net of amortization of	$ 401,823	$ 375,522
MEMBER'S EQUITY
Units issued and outstanding	42,049	42,049

Statements of Operations Statem

Statements of Operations Statement - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues (Notes 2 and 7)	$ 26,292,741	$ 27,479,673	$ 82,171,442	$ 74,343,914
Cost of goods sold (Note 7)	26,373,459	25,741,335	77,923,482	75,195,236
Gross profit (loss)	(80,718)	1,738,338	4,247,960	(851,322)
General and administrative expenses	841,842	633,917	2,424,853	2,109,573
Operating income (loss)	(922,560)	1,104,421	1,823,107	(2,960,895)
Other income (expense):
Interest income	680	668	1,662	2,981
Interest expense	(38,943)	(26,749)	(68,317)	(53,822)
Other income (expense)	(38,263)	(26,081)	(66,655)	(50,841)
Net income (loss)	$ (960,823)	$ 1,078,340	$ 1,756,452	$ (3,011,736)
Weighted average units outstanding	42,049	42,049	42,049	42,049
Net income (loss) per unit - basic and diluted	$ (22.85)	$ 25.64	$ 41.77	$ (71.62)

Statement of Cash Flows Stateme

Statement of Cash Flows Statement - USD ($)	9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Net Cash Provided by (Used in) Operating Activities [Abstract]
Net income (loss)	$ 1,756,452	$ (3,011,736)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	2,891,241	4,876,626
Gain (Loss) on Disposition of Property Plant Equipment	16,001	0
Retained Patronage Allocations	(3,614)	0
Changes in working capital components:
Trade and other accounts receivable	181,829	(1,194,732)
Inventories	482,566	25,446
Prepaid expenses and other	4,513	(3,354)
Accounts payable	(1,462,769)	(422,001)
Accounts payable, related party	(21,159)	(237,549)
Accrued expenses and deferred revenue	110,763	(35,855)
Derivative financial instruments	(245,945)	501,443
Net cash provided by (used in) operating activities	4,201,768	(504,598)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(7,081,882)	(3,438,710)
Net cash (used in) investing activities	(7,081,882)	(3,438,710)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (Decrease) in Book Overdrafts	0	(1,656,923)
Proceeds from Issuance of Long-term Debt	44,500,000	4,500,000
Payments on long-term borrowings	41,627,571	54,281
Net cash provided by financing activities	2,872,429	2,788,796
Net (decrease) in cash and cash equivalents	(7,685)	(1,154,512)
CASH AND CASH EQUIVALENTS
Beginning	613,139	1,502,498
Ending	605,454	347,986
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION, cash paid for interest, including capitalized interest for 2017 of $24,467 and 2016 of none	55,657	41,516
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]
Construction in Progress Expenditures Incurred but Not yet Paid	145,706	108,428
Construction in progress included in accrued expenses	$ 2,228	$ 0

Summary of Significant Accounti

Summary of Significant Accounting Policies (Notes) gal in Millions	9 Months Ended
	Jun. 30, 2017USD ($)gal	Sep. 30, 2016USD ($)
Accounting Policies [Abstract]
Significant Accounting Policies [Text Block]	Nature of Business and Significant Accounting Policies Principal business activity : Lincolnway Energy, LLC (the "Company"), located in Nevada, Iowa, was formed in May 2004 to build and operate a 50 million gallon annual production dry mill corn-based ethanol plant. The Company began making sales on May 30, 2006 and became operational during the quarter ended June 30, 2006. The Company is directly influenced by commodity markets and the agricultural and energy industries and, accordingly, its results of operations and financial condition may be significantly affected by cyclical market trends and the regulatory, political and economic conditions in these industries. Basis of presentation and other information : The balance sheet as of September 30, 2016 was derived from the Company's audited balance sheet as of that date. The accompanying financial statements as of June 30, 2017 and for the three and nine months ended June 30, 2017 and 2016 are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. These unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto, for the year ended September 30, 2016 contained in the Company's Annual Report on Form 10-K. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire year. Use of estimates : The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and cash equivalents: The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Although the Company maintains its cash accounts in one bank, the Company believes it is not exposed to any significant credit risk on cash and cash equivalents. At September 30, 2016, the Company closed all repurchase agreements. Prior to September 30, 2016 the Company utilized the repurchase account to invest excess cash in a bank overnight repurchase account. Trade accounts receivable : Trade accounts receivable are recorded at original invoice amounts less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering customers financial condition, credit history and current economic conditions. Receivables are written off when deemed uncollectible. Recoveries of receivables written off are recorded when received. A receivable is considered past due if any portion of the receivable is outstanding more than 90 days. There was no allowance for doubtful account balance as of June 30, 2017 and September 30, 2016 . Inventories: Inventories are stated at the lower of weighted average cost or net realizable value using the first-in, first-out method. In the valuation of inventories and purchase commitments, net realizable value is defined as estimated selling price in the ordinary course of business less reasonable predictable costs of completion, disposal and transportation. Derivative financial instruments: The Company periodically enters into derivative contracts to hedge the Company’s exposure to price risk related to forecasted corn needs, forward corn purchase contracts and ethanol sales. The Company does not typically enter into derivative instruments other than for hedging purposes. All the derivative contracts are recognized on the balance sheet at their fair market value. Although the Company believes its derivative positions are economic hedges, none have been designated as a hedge for accounting purposes. Accordingly, any realized or unrealized gain or loss related to corn and natural gas derivatives is recorded in the statement of operations as a component of cost of goods sold. Any realized or unrealized gain or loss related to ethanol derivative instruments is recorded in the statement of operations as a component of revenue. The Company reports all contracts with the same counter party on a net basis on the balance sheet. Unrealized gains and losses on forward contracts, in which delivery has not occurred, are deemed “normal purchases and normal sales”, and therefore are not marked to market in the Company’s financial statements, but are subject to a lower of cost or market assessment. Revenue recognition: Revenue from the sale of the Company’s ethanol and distillers grains is recognized at the time title and all risks of ownership transfer to the customers. This generally occurs upon the loading of the product. For ethanol, title passes at the time the product crosses the loading flange in either a railcar or truck. For distillers grain, title passes upon the loading into trucks or railcars. Shipping and handling costs incurred by the Company for the sale of distillers grain are included in costs of goods sold. Ethanol revenue is reported free on board (FOB) and all shipping and handling costs are incurred by the ethanol marketer. Commissions for the marketing and sale of ethanol and distiller grains are included in costs of goods sold. Deferred revenue: Deferred revenue represents fees received under a service agreement in advance of services being performed. The related revenue is deferred and recognized as the services are performed over the 10 year agreement. Income taxes : The Company is organized as a partnership for federal and state income tax purposes and generally does not incur income taxes. Instead, the Company’s earnings and losses are included in the income tax returns of the members. Therefore, no provision or liability for federal or state income taxes has been included in these financial statements. Earnings per unit : Basic and diluted net income (loss) per unit have been computed on the basis of the weighted average number of units outstanding during each period presented.
Principal Business Activity [Policy Text Block]	Principal business activity : Lincolnway Energy, LLC (the "Company"), located in Nevada, Iowa, was formed in May 2004 to build and operate a 50 million gallon annual production dry mill corn-based ethanol plant. The Company began making sales on May 30, 2006 and became operational during the quarter ended June 30, 2006. The Company is directly influenced by commodity markets and the agricultural and energy industries and, accordingly, its results of operations and financial condition may be significantly affected by cyclical market trends and the regulatory, political and economic conditions in these industries.
Basis of Accounting, Policy [Policy Text Block]	Basis of presentation and other information : The balance sheet as of September 30, 2016 was derived from the Company's audited balance sheet as of that date. The accompanying financial statements as of June 30, 2017 and for the three and nine months ended June 30, 2017 and 2016 are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. These unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto, for the year ended September 30, 2016 contained in the Company's Annual Report on Form 10-K. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire year.
Use of Estimates, Policy [Policy Text Block]	Use of estimates : The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents, Policy [Policy Text Block]	Cash and cash equivalents: The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Although the Company maintains its cash accounts in one bank, the Company believes it is not exposed to any significant credit risk on cash and cash equivalents. At September 30, 2016, the Company closed all repurchase agreements. Prior to September 30, 2016 the Company utilized the repurchase account to invest excess cash in a bank overnight repurchase account.
Trade and Other Accounts Receivable, Policy [Policy Text Block]	Trade accounts receivable : Trade accounts receivable are recorded at original invoice amounts less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering customers financial condition, credit history and current economic conditions. Receivables are written off when deemed uncollectible. Recoveries of receivables written off are recorded when received. A receivable is considered past due if any portion of the receivable is outstanding more than 90 days. There was no allowance for doubtful account balance as of June 30, 2017 and September 30, 2016 .
Inventory, Policy [Policy Text Block]	Inventories: Inventories are stated at the lower of weighted average cost or net realizable value using the first-in, first-out method. In the valuation of inventories and purchase commitments, net realizable value is defined as estimated selling price in the ordinary course of business less reasonable predictable costs of completion, disposal and transportation.
Financial Instruments Disclosure [Text Block]	Derivative financial instruments: The Company periodically enters into derivative contracts to hedge the Company’s exposure to price risk related to forecasted corn needs, forward corn purchase contracts and ethanol sales. The Company does not typically enter into derivative instruments other than for hedging purposes. All the derivative contracts are recognized on the balance sheet at their fair market value. Although the Company believes its derivative positions are economic hedges, none have been designated as a hedge for accounting purposes. Accordingly, any realized or unrealized gain or loss related to corn and natural gas derivatives is recorded in the statement of operations as a component of cost of goods sold. Any realized or unrealized gain or loss related to ethanol derivative instruments is recorded in the statement of operations as a component of revenue. The Company reports all contracts with the same counter party on a net basis on the balance sheet. Unrealized gains and losses on forward contracts, in which delivery has not occurred, are deemed “normal purchases and normal sales”, and therefore are not marked to market in the Company’s financial statements, but are subject to a lower of cost or market assessment.
Revenue Recognition, Policy [Policy Text Block]	Revenue recognition: Revenue from the sale of the Company’s ethanol and distillers grains is recognized at the time title and all risks of ownership transfer to the customers. This generally occurs upon the loading of the product. For ethanol, title passes at the time the product crosses the loading flange in either a railcar or truck. For distillers grain, title passes upon the loading into trucks or railcars. Shipping and handling costs incurred by the Company for the sale of distillers grain are included in costs of goods sold. Ethanol revenue is reported free on board (FOB) and all shipping and handling costs are incurred by the ethanol marketer. Commissions for the marketing and sale of ethanol and distiller grains are included in costs of goods sold.
Deferred Revenue [Policy Text Block]	Deferred revenue: Deferred revenue represents fees received under a service agreement in advance of services being performed. The related revenue is deferred and recognized as the services are performed over the 10 year agreement.
Income Tax, Policy [Policy Text Block]	Income taxes : The Company is organized as a partnership for federal and state income tax purposes and generally does not incur income taxes. Instead, the Company’s earnings and losses are included in the income tax returns of the members. Therefore, no provision or liability for federal or state income taxes has been included in these financial statements.
Earnings Per Share, Policy [Policy Text Block]	Earnings per unit : Basic and diluted net income (loss) per unit have been computed on the basis of the weighted average number of units outstanding during each period presented.
Allowance for Doubtful Accounts Receivable | $	$ 0	$ 0
Annual ethanol production | gal	50
Number of days outstanding for a past due trade receivables	90 days

Revenue

Revenue	9 Months Ended
	Jun. 30, 2017
Revenue by product [Abstract]
Revenue	Revenues Components of revenues are as follows: Three Months Ended Nine Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Ethanol, net of hedging gain (loss) $ 21,085,207 $ 21,458,476 $ 66,205,355 $ 57,752,939 Distillers Grains 3,223,158 4,534,953 10,212,515 12,726,044 Other 1,984,376 1,486,244 5,753,572 3,864,931 Total $ 26,292,741 $ 27,479,673 $ 82,171,442 $ 74,343,914

Inventories

Inventories	9 Months Ended
	Jun. 30, 2017
Inventory Disclosure [Abstract]
Inventories	Inventories Inventories consist of the following: June 30, September 30, Raw materials, including corn, chemicals and supplies $ 4,032,365 $ 4,585,986 Work in process 748,340 668,153 Ethanol and distillers grains 462,832 472,467 Total $ 5,243,537 $ 5,726,606

Long-Term Debt

Long-Term Debt	9 Months Ended
	Jun. 30, 2017
Long-term Debt, Unclassified [Abstract]
Long-Term Debt	Long-Term Debt and Subsequent Event As of June 30, 2017, the Company had a revolving term loan, with a bank, available for up to $11,000,000 . The Company paid interest on the unpaid balance at a variable interest rate (adjusted on a weekly basis) based upon the one-month LIBOR index rate plus 3.15% . The Company also paid a commitment fee on the average daily unused portion of the loan at the rate of .50% per annum, payable monthly. There were outstanding borrowings of $5,400,000 and $2,500,000 , respectively, on the revolving term loan at June 30, 2017 and September 30, 2016 . Subsequent to the end of the quarter ended June 30, 2017, the Company amended the revolving credit loan. Under the amendment, the revolving credit loan has maximum borrowings of $18,000,000 which will be reduced by $3,600,000 every year starting July 1, 2019 until July 1, 2022 when the loan expires. The Company will pay interest monthly on the unpaid balance at a variable rate (adjusted on a weekly basis) based upon the one-month LIBOR rate plus 3.15% , with a .50% commitment fee. The loan is secured by substantially all assets of the Company and subject to certain financial and nonfinancial covenants as defined in the master credit agreement.

Related-Party Transactions

Related-Party Transactions	9 Months Ended
	Jun. 30, 2017
Related Party Transactions [Abstract]
Purchase Commitment, Excluding Long-term Commitment [Table Text Block]	Corn Commitment: June 30, 2017 Corn Forward Purchase Commitment Basis Corn Commitment (Bushels) Commitment Through Amount Due Related Parties $ 4,224,695 875,000 May 2018 $ 759,144
Schedule of Related Party Transactions [Table Text Block]	Corn Purchased: Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 Nine Months Ended June 30, 2017 Nine Months Ended June 30, 2016 Related Parties $ 12,174,539 $ 12,266,960 $ 31,826,145 $ 35,469,145
Related-Party Transactions	Related-Party Transactions The Company had the following related-party activity with members during the nine months ended June 30, 2017 and 2016: Corn Commitment: June 30, 2017 Corn Forward Purchase Commitment Basis Corn Commitment (Bushels) Commitment Through Amount Due Related Parties $ 4,224,695 875,000 May 2018 $ 759,144 Corn Purchased: Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 Nine Months Ended June 30, 2017 Nine Months Ended June 30, 2016 Related Parties $ 12,174,539 $ 12,266,960 $ 31,826,145 $ 35,469,145

Commitments and Major Customer

Commitments and Major Customer	9 Months Ended
	Jun. 30, 2017
Commitments and Major Customer [Abstract]
Commitments and Major Customer	Commitments, Major Customers and Subsequent Event The Company has an agreement with an unrelated entity for marketing, selling and distributing all of the ethanol produced by the Company. Revenues from this entity were $21,096,610 and $66,369,245 , respectively, for the three and nine months ended June 30, 2017. Revenues with this entity were $21,555,893 and $57,777,246 , respectively, for the three and nine months ended June 30, 2016. Trade accounts receivable of $1,874,151 were due from this entity as of June 30, 2017 . As of June 30, 2017 , the Company had ethanol unpriced sales commitments with this entity of approximately 15.0 million gallons through September 2017. The Company has an agreement with an unrelated entity for marketing, selling and distributing all of the distillers grains produced by the Company. Revenues from this entity including both distiller's grains and corn oil were $3,769,434 and $10,918,329 , respectively, for the three and nine months ended June 30, 2017. Revenues with this entity were $4,772,988 and $13,469,206 , respectively, for the three and nine months ended June 30, 2016. The Company sells corn oil to this entity as a third party broker independent of its agreement with the entity relating to distillers grain sales. Trade accounts receivable of $527,475 were due from this entity as of June 30, 2017 . The Company had distillers grain sales commitments with this entity of approximately 11,450 tons, for a total sales commitment of approximately $1.1 million. As of June 30, 2017 , the Company had purchase commitments for corn forward contracts with various unrelated parties, at a corn commitment total of approximately $5.0 million. These contracts mature at various dates through June 2018. The Company also had basis contract commitments with unrelated parties to purchase 95,000 bushels of corn. These contracts mature at various dates through August 2017. The Company has an agreement with an unrelated party for the transportation of natural gas to the Company's ethanol plant. Under the agreement, the Company is committed to future monthly usage fees totaling approximately $3.6 million over the 10 year term which commenced in November 2014. On June 30, 2016, the Company assigned an irrevocable standby letter of credit to the counter-party to stand as security for the Company's obligation under the agreement. The letter of credit will be reduced over time as the Company makes payments under the agreement. At June 30, 2017, the remaining commitment was approximately $2.1 million . Subsequent to the quarter ended June 30, 2017, in conjunction with the amended revolving credit loan agreement, the Company amended the letter of credit and extended the maturity to May 2021. As of June 30, 2017, the Company had purchased commitments for natural gas basis contracts with an unrelated party totaling 614,775 MMBtu's maturing at various dates through March 2018. On March 10, 2017, the Company signed a contract with an unrelated party for the installation of a grain drying and cooling system. The total commitment is for $4.8 million plus a potential performance bonus of $450,000 . The Company made progress payments of $3.6 million under this contract through June 30, 2017. The remaining payments will be made as invoiced throughout the life of the project. The project is estimated to be completed in the first quarter of fiscal year 2018.

Risk Management

Risk Management	9 Months Ended
	Jun. 30, 2017
Risk Management [Abstract]
Risk Management	Risk Management The Company's activities expose it to a variety of market risks, including the effects of changes in commodity prices. These financial exposures are monitored and managed by the Company as an integral part of its overall risk management program. The Company's risk management program focuses on the unpredictability of commodity markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results. The Company maintains a risk management strategy that uses derivative instruments to minimize significant, unanticipated earnings fluctuations caused by market fluctuations. The Company's specific goal is to protect the Company from large moves in the commodity costs. To reduce price risk caused by market fluctuations, the Company generally follows a policy of using exchange-traded futures and options contracts to minimize its net position of merchandisable agricultural commodity inventories and forward purchase and sale contracts. Exchange traded futures and options contracts are designated as non-hedge derivatives and are valued at market price with changes in market price recorded in operating income through cost of goods sold for corn derivatives and through revenue for ethanol derivatives. The Company treats all contracts with the same counterparty on a net basis on the balance sheet. Derivatives not designated as hedging instruments are as follows: June 30, 2017 September 30, 2016 Derivative assets - corn contracts $ 189,025 $ 1,179,588 Derivative assets - ethanol contracts 960 38,325 Derivative liabilities - corn contracts (167,900 ) (118,750 ) Derivative liabilities - ethanol contracts (2,814 ) (165,870 ) Cash held by (due to) broker 232,461 (435,616 ) Total $ 251,732 $ 497,677 The effects on operating income from derivative activities is as follows: Three Months Ended Nine Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Gains (losses) in revenues due to derivatives related to ethanol sales: Realized (loss) $ (74,949 ) $ (78,288 ) $ (288,621 ) $ (7,945 ) Unrealized gain (loss) 63,546 (19,129 ) 124,731 (16,362 ) Total effect on revenues (11,403 ) (97,417 ) (163,890 ) (24,307 ) Gains (losses) in cost of goods sold due to derivatives related to corn costs: Realized gain (loss) 120,488 (291,288 ) 1,304,969 742,156 Unrealized gain (loss) (27,550 ) 1,281,778 (1,039,713 ) 1,103,059 Total effect on corn cost 92,938 990,490 265,256 1,845,215 Gains in cost of goods sold due to derivatives related to natural gas costs: Realized gain (loss) 2,500 (53,840 ) 5,490 70,960 Unrealized gain 960 48,750 960 1,880 Total effect on natural gas cost 3,460 (5,090 ) 6,450 72,840 Total effect on cost of goods sold 96,398 985,400 271,706 1,918,055 Total gain due to derivative activities $ 84,995 $ 887,983 $ 107,816 $ 1,893,748 Unrealized gains and losses on forward contracts, in which delivery has not occurred, are deemed “normal purchases and normal sales”, and therefore are not marked to market in the Company's financial statements but are subject to a lower of cost or market assessment.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Jun. 30, 2017
Fair Value Measurements [Abstract]
Fair Value Measurements	Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability of the inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: Level 1 - Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities. Level 2 - Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities. Level 3 - Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. A description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company's financial assets and financial liabilities carried at fair value. Derivative financial instruments : Commodity futures and exchange-traded commodity options contracts are reported at fair value utilizing Level 1 inputs. For these contracts, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the CME and NYMEX markets. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the over-the-counter markets. The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and September 30, 2016 , segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: June 30, 2017 Total Level 1 Level 2 Level 3 Assets, derivative financial instruments $ 189,985 $ 189,985 $ — $ — Liabilities, derivative financial instruments $ 170,714 $ 170,714 $ — $ — September 30, 2016 Total Level 1 Level 2 Level 3 Assets, derivative financial instruments $ 1,217,913 $ 1,217,913 $ — $ — Liabilities, derivative financial instruments $ 284,620 $ 284,620 $ — $ —

Revenue (Tables)

Revenue (Tables)	9 Months Ended
	Jun. 30, 2017
Revenue by product [Abstract]
Revenue from External Customers by Products and Services	Components of revenues are as follows: Three Months Ended Nine Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Ethanol, net of hedging gain (loss) $ 21,085,207 $ 21,458,476 $ 66,205,355 $ 57,752,939 Distillers Grains 3,223,158 4,534,953 10,212,515 12,726,044 Other 1,984,376 1,486,244 5,753,572 3,864,931 Total $ 26,292,741 $ 27,479,673 $ 82,171,442 $ 74,343,914

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Jun. 30, 2017
Inventory Disclosure [Abstract]
Schedule of Inventory, Current	Inventories consist of the following: June 30, September 30, Raw materials, including corn, chemicals and supplies $ 4,032,365 $ 4,585,986 Work in process 748,340 668,153 Ethanol and distillers grains 462,832 472,467 Total $ 5,243,537 $ 5,726,606

Risk Management (Tables)

Risk Management (Tables)	9 Months Ended
	Jun. 30, 2017
Risk Management [Abstract]
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location	Derivatives not designated as hedging instruments are as follows: June 30, 2017 September 30, 2016 Derivative assets - corn contracts $ 189,025 $ 1,179,588 Derivative assets - ethanol contracts 960 38,325 Derivative liabilities - corn contracts (167,900 ) (118,750 ) Derivative liabilities - ethanol contracts (2,814 ) (165,870 ) Cash held by (due to) broker 232,461 (435,616 ) Total $ 251,732 $ 497,677
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance	The effects on operating income from derivative activities is as follows: Three Months Ended Nine Months Ended June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016 Gains (losses) in revenues due to derivatives related to ethanol sales: Realized (loss) $ (74,949 ) $ (78,288 ) $ (288,621 ) $ (7,945 ) Unrealized gain (loss) 63,546 (19,129 ) 124,731 (16,362 ) Total effect on revenues (11,403 ) (97,417 ) (163,890 ) (24,307 ) Gains (losses) in cost of goods sold due to derivatives related to corn costs: Realized gain (loss) 120,488 (291,288 ) 1,304,969 742,156 Unrealized gain (loss) (27,550 ) 1,281,778 (1,039,713 ) 1,103,059 Total effect on corn cost 92,938 990,490 265,256 1,845,215 Gains in cost of goods sold due to derivatives related to natural gas costs: Realized gain (loss) 2,500 (53,840 ) 5,490 70,960 Unrealized gain 960 48,750 960 1,880 Total effect on natural gas cost 3,460 (5,090 ) 6,450 72,840 Total effect on cost of goods sold 96,398 985,400 271,706 1,918,055 Total gain due to derivative activities $ 84,995 $ 887,983 $ 107,816 $ 1,893,748

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Jun. 30, 2017
Fair Value Measurements [Abstract]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]	The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2017 and September 30, 2016 , segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: June 30, 2017 Total Level 1 Level 2 Level 3 Assets, derivative financial instruments $ 189,985 $ 189,985 $ — $ — Liabilities, derivative financial instruments $ 170,714 $ 170,714 $ — $ — September 30, 2016 Total Level 1 Level 2 Level 3 Assets, derivative financial instruments $ 1,217,913 $ 1,217,913 $ — $ — Liabilities, derivative financial instruments $ 284,620 $ 284,620 $ — $ —

Summary of Significant Accoun18

Summary of Significant Accounting Policies (Details) - USD ($)	Jun. 30, 2017	Sep. 30, 2016
Accounting Policies [Abstract]
Allowance for Doubtful Accounts Receivable	$ 0	$ 0

Revenue (Details)

Revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenue from External Customer [Line Items]
Revenues (Notes 2 and 7)	$ 26,292,741	$ 27,479,673	$ 82,171,442	$ 74,343,914
Ethanol [Member]
Revenue from External Customer [Line Items]
Revenues (Notes 2 and 7)	21,085,207	21,458,476	66,205,355	57,752,939
Distillers' Grains [Member]
Revenue from External Customer [Line Items]
Revenues (Notes 2 and 7)	3,223,158	4,534,953	10,212,515	12,726,044
Other Products [Member]
Revenue from External Customer [Line Items]
Revenues (Notes 2 and 7)	$ 1,984,376	$ 1,486,244	$ 5,753,572	$ 3,864,931

Inventories (Details)

Inventories (Details) - USD ($)	Jun. 30, 2017	Sep. 30, 2016
Inventory Disclosure [Abstract]
Raw materials, including corn, chemicals and supplies	$ 4,032,365	$ 4,585,986
Work in process	748,340	668,153
Ethanol and distillers grains	462,832	472,467
Total	$ 5,243,537	$ 5,726,606

Revolving Credit Loan (Details)

Revolving Credit Loan (Details) - USD ($)	9 Months Ended
	Jun. 30, 2017	Sep. 30, 2016
Line of Credit Facility [Line Items]
Line of Credit Facility, Fair Value of Amount Outstanding	$ 5,400,000	$ 2,500,000
Revolving Credit Loan	Revolving Credit Loan and Subsequent Event As of June 30, 2017, the Company had a monitored revolving credit loan, with a bank, for up to $8,500,000 . The Company paid interest monthly on the unpaid balance at a variable rate (adjusted on a weekly basis) based upon the one-month LIBOR index rate plus 2.90% . The Company also paid a commitment fee on the average daily unused portion of the loan at the rate of .20% per annum, payable monthly. The loan was secured by substantially all assets of the Company and subject to certain financial and nonfinancial covenants as defined in the master loan agreement. There was no outstanding balance on the revolving credit loan as of June 30, 2017 and September 30, 2016 . Subsequent to the end of the quarter ended June 30, 2017, the loan expired and the Company did not renew or extend the loan.
Line of Credit Facility, Maximum Borrowing Capacity	$ 11,000,000
Debt instrument, description of variable rate basis	LIBOR
Debt instrument, basis spread on variable rate	3.15%
Line of credit facility, unused capacity, commitment fee percentage	0.50%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Fair Value of Amount Outstanding	$ 0	$ 0
Debt instrument, description of variable rate basis	LIBOR
Debt instrument, basis spread on variable rate	2.90%
Line of credit facility, unused capacity, commitment fee percentage	0.20%
Revolving credit loan	$ 8,500,000

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($)	Jul. 01, 2017	Jun. 30, 2017	Sep. 30, 2016
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		$ 11,000,000
Less current maturities		$ 0	$ (27,571)
Debt Instrument, Description of Variable Rate Basis		LIBOR
Debt instrument, basis spread on variable rate		3.15%
Line of credit facility, unused capacity, commitment fee percentage		0.50%
Line of Credit Facility, Fair Value of Amount Outstanding		$ 5,400,000	$ 2,500,000
Subsequent Event [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 18,000,000
Line of Credit Facility, Maximum Borrowing Capacity Annual Reduction	$ 3,600,000
Debt Instrument, Description of Variable Rate Basis	LIBOR
Debt instrument, basis spread on variable rate	3.15%
Line of credit facility, unused capacity, commitment fee percentage	0.50%

Related-Party Transactions (Det

Related-Party Transactions (Details)	3 Months Ended		9 Months Ended
	Jun. 30, 2017USD ($)bu	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)bu	Jun. 30, 2016USD ($)
Related Party Transaction [Line Items]
Purchase Commitment, Remaining Minimum Amount Committed	$ 2,100,000		$ 2,100,000
Interest paid			55,657	$ 41,516
Corn [Member] | Other Members [Member]
Related Party Transaction [Line Items]
Supplies Purchased, Materials for Production	12,174,539	$ 12,266,960	31,826,145	$ 35,469,145
Purchase Commitment, Minimum Amount Committed, Forward Contracts	$ 4,224,695		$ 4,224,695
Supply Commitment, quantity, unpriced contracts | bu	875,000		875,000
Purchase Commitment, Remaining Minimum Amount Committed	$ 759,144		$ 759,144

Commitments and Major Customer

Commitments and Major Customer (Details) gal in Millions	3 Months Ended				6 Months Ended		9 Months Ended
	Jun. 30, 2017USD ($)Tgal	Mar. 31, 2017USD ($)	Jun. 30, 2016USD ($)	Mar. 31, 2016USD ($)	Mar. 31, 2017USD ($)	Mar. 31, 2016USD ($)	Jun. 30, 2017USD ($)Tgal	Jun. 30, 2016USD ($)
Revenue, Major Customer [Line Items]
Revenues (Notes 2 and 7)	$ 26,292,741		$ 27,479,673				$ 82,171,442	$ 74,343,914
Ethanol [Member]
Revenue, Major Customer [Line Items]
Ethanol receivable		$ 1,874,151			$ 1,874,151
Supply Commitment, quantity, unpriced contracts | gal	15						15
Entity-wide, major customer, unrelated party, amount		$ 21,096,610		$ 21,555,893	$ 66,369,245	$ 57,777,246
Distillers' Grains [Member]
Revenue, Major Customer [Line Items]
Supply Commitment, Remaining Minimum Amount Committed	$ 0						$ 0
Entity-wide, major customer, unrelated party, amount	3,769,434		$ 4,772,988				10,918,329	$ 13,469,206
Distillers grains receivable	$ 527,475						$ 527,475
Supply Commitment, quantity, Priced Contracts | T	11,450						11,450
Corn [Member]
Revenue, Major Customer [Line Items]
Long-term Purchase Commitment, Amount							$ 0

Commitments and Major Custome25

Commitments and Major Customer Purchase committments (Details)	9 Months Ended
	Jun. 30, 2017USD ($)MMBTUTbu
Long-term Purchase Commitment [Line Items]
Purchase Commitment, Transportation Fees	$ 3,600,000
Long-term Purchase Commitment, Period	10 years
Purchase Commitment, Remaining Minimum Amount Committed	$ 2,100,000
Corn [Member]
Long-term Purchase Commitment [Line Items]
Long-term Purchase Commitment, Amount	$ 0
purchase commitment , remaining quantity | bu	95,000
Natural Gas [Member]
Long-term Purchase Commitment [Line Items]
Long-term Purchase Commitment, Minimum Energy Volume Required | MMBTU	614,775
Grain drying and cooling system [Member]
Long-term Purchase Commitment [Line Items]
Long-term Purchase Commitment, Amount	$ 4,800,000
Performance Fees	450,000
Payments for Construction in Process	$ 3,600,000
Distillers Grains [Member]
Long-term Purchase Commitment [Line Items]
Supply Commitment, quantity, Priced Contracts | T	11,450

Risk Management (Details)

Risk Management (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Jun. 30, 2017	Sep. 30, 2016
Trading Activity, Gains and Losses, Net [Line Items]
Cash held by (due to) broker					$ 232,461	$ (435,616)
Trading Activity, Gains and Losses, Net	$ 84,995	$ 887,983	$ 107,816	$ 1,893,748
Derivative Liability, Current					251,732	497,677
Cost of Goods, Total [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Trading Activity, Gains and Losses, Net	96,398	985,400	271,706	1,918,055
Corn [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Derivative assets - corn contracts					189,025	1,179,588
Derivative liabilities - corn contracts					(167,900)	(118,750)
Corn [Member] | Cost of Goods, Total [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Gain (Loss) on Sale of Derivatives	120,488	(291,288)	1,304,969	742,156
Unrealized Gain (Loss) on Derivatives	(27,550)	1,281,778	(1,039,713)	1,103,059
Trading Activity, Gains and Losses, Net	92,938	990,490	265,256	1,845,215
Ethanol [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Derivative assets - corn contracts					960	38,325
Derivative liabilities - corn contracts					$ (2,814)	$ (165,870)
Ethanol [Member] | Sales [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Gain (Loss) on Sale of Derivatives	(74,949)	(78,288)	(288,621)	(7,945)
Unrealized Gain (Loss) on Derivatives	63,546	(19,129)	124,731	(16,362)
Trading Activity, Gains and Losses, Net	(11,403)	(97,417)	(163,890)	(24,307)
Natural Gas [Member] | Cost of Goods, Total [Member]
Trading Activity, Gains and Losses, Net [Line Items]
Gain (Loss) on Sale of Derivatives	2,500	(53,840)	5,490	70,960
Trading Activity, Gains and Losses, Net	$ 3,460	$ (5,090)	$ 6,450	$ 72,840

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Fair Value, Measurements, Recurring [Member] - USD ($)	Jun. 30, 2017	Sep. 30, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets, derivative financial instruments	$ 189,985	$ 1,217,913
Assets, derivative financial instruments	(170,714)	(284,620)
Fair Value, Inputs, Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets, derivative financial instruments	189,985	1,217,913
Assets, derivative financial instruments	(170,714)	(284,620)
Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets, derivative financial instruments	0	0
Assets, derivative financial instruments	0	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Assets, derivative financial instruments	0	0
Assets, derivative financial instruments	$ 0	$ 0