Red Trail Energy (REGX) 10-Q 14 Feb 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information Document - shares	3 Months Ended
	Dec. 31, 2017	Feb. 14, 2018
Entity Information [Line Items]
Entity Registrant Name	RED TRAIL ENERGY, LLC
Entity Central Index Key	1,359,687
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		41,466,340

Condensed Balance Sheets

Condensed Balance Sheets - USD ($)	Dec. 31, 2017	Sep. 30, 2017
Current Assets
Cash and equivalents	$ 11,293,024	$ 3,223,342
Restricted cash - margin account	5,683,142	5,906,666
Accounts receivable, primarily related party	3,039,006	4,059,227
Other receivables	15,474	8,764
Inventory	15,879,209	16,413,742
Prepaid expenses	279,968	33,364
Total current assets	36,189,823	29,645,105
Property, Plant and Equipment
Land	1,342,381	1,342,381
Land improvements	4,266,953	4,266,953
Buildings	8,036,031	8,036,031
Plant and equipment	86,987,706	86,460,902
Construction in progress	133,995	628,454
Gross property, plant and equipment	100,767,066	100,734,721
Less accumulated depreciation	54,766,673	53,592,985
Net property, plant and equipment	46,000,393	47,141,736
Other Assets
Investment in RPMG	605,000	605,000
Patronage equity	3,270,279	3,270,279
Deposits	40,000	40,000
Total other assets	3,915,279	3,915,279
Total Assets	86,105,495	80,702,120
Current Liabilities
Accounts payable	3,585,115	2,409,171
Accrued expenses	9,531,874	3,670,338
Commodities derivative instruments, at fair value (see note 2)	1,276,525	933,312
Accrued loss on firm purchase commitments (see note 7)	13,000	5,000
Current maturities of notes payable	2,622	2,617
Total current liabilities	14,409,136	7,020,438
Long-Term Liabilities
Notes payable	2,264	2,921
Members’ Equity (41,466,340 as of December 31, 2017 and September 30, 2017, respectively, of Class A Membership Units issued and outstanding)	71,694,095	73,678,761
Total Liabilities and Members’ Equity	$ 86,105,495	$ 80,702,120

Condensed Balance Sheets Parent

Condensed Balance Sheets Parenthetical - shares	Dec. 31, 2017	Sep. 30, 2017
Members’ Equity (40,148,160 Class A Membership Units issued and outstanding)	41,466,340	41,466,340

Statements of Operations

Statements of Operations - USD ($)	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Revenues, primarily related party	$ 26,122,856	$ 30,004,460
Cost of Goods Sold
Cost of goods sold	27,743,282	27,127,930
Lower of cost or market inventory adjustment	70,979	0
Loss on firm purchase commitments	8,000	0
Total Cost of Goods Sold	27,822,261	27,127,930
Gross Profit (Loss)	(1,699,405)	2,876,530
General and Administrative Expenses	715,911	690,934
Operating Income (Loss)	(2,415,316)	2,185,596
Other Income (Expense)
Interest income	23,427	18,112
Other income	407,233	568,269
Interest expense	(10)	(15)
Total other income (expense), net	430,650	586,366
Net Income (Loss)	$ (1,984,666)	$ 2,771,962
Weighted Average Units Outstanding, Basic	41,466,340	41,406,697
Weighted Average Units Outstanding, Diluted	41,466,340	41,406,697
Net Income (Loss) Per Unit, Basic	$ (0.05)	$ 0.07
Net Income (Loss) Per Unit, Diluted	$ (0.05)	$ 0.07

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows - USD ($)	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Cash Flows from Operating Activities
Net income (loss)	$ (1,984,666)	$ 2,771,962
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	1,173,688	1,170,669
Change in fair value of derivative instruments	343,213	(63,498)
Lower of cost or market inventory adjustment	70,979	0
Loss on firm purchase commitments	8,000	0
Change in operating assets and liabilities:
Restricted cash	223,524	(247,525)
Accounts receivable	1,020,221	125,591
Other receivables	(6,710)	64,887
Inventory	455,553	(6,696,029)
Prepaid expenses	(246,604)	(167,756)
Accounts payable	1,175,944	1,629,501
Accrued expenses	5,861,537	12,058,830
Accrued purchase commitment losses	8,000	(54,000)
Net cash provided by operating activities	8,102,679	10,592,632
Cash Flows from Investing Activities
Capital expenditures	(32,345)	(174,001)
Net cash (used in) investing activities	(32,345)	(174,001)
Cash Flows from Financing Activities
Unit repurchase	0	(564,963)
Debt repayments	(652)	(648)
Net cash (used in) financing activities	(652)	(565,611)
Net Increase in Cash and Equivalents	8,069,682	9,853,020
Cash and Equivalents - Beginning of Period	3,223,342	10,274,166
Cash and Equivalents - End of Period	11,293,024	20,127,186
Supplemental Disclosure of Cash Flow Information
Interest paid	3,683	15
Units Issued in exchange for property	$ 0	$ 3,320,000

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Dec. 31, 2017
Summary of Significant Account Policies [Abstract]
Summary of Significant Accounting Policies	The accompanying condensed unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company's audited financial statements for the fiscal year ended September 30, 2017 , contained in the Company's Annual Report on Form 10-K. In the opinion of management, the interim condensed unaudited financial statements reflect all adjustments considered necessary for fair presentation. The adjustments made to these statements consist only of normal recurring adjustments. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2018. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Red Trail Energy, LLC, a North Dakota limited liability company (the “Company”), owns and operates a 50 million gallon annual name-plate production ethanol plant near Richardton, North Dakota (the “Plant”). Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported revenues and expenses. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, inventory and allowance for doubtful accounts. Actual results could differ from those estimates. Net Income Per Unit Net income per unit is calculated on a basic and fully diluted basis using the weighted average units outstanding during the period. Recently Issued Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” which supersedes the guidance in “Revenue Recognition (Topic 605)” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. The Company has evaluated the new standard and anticipates a change in the reporting of revenue as enhanced disclosures will be required. The Company does not anticipate a significant impact on our financial statements due to the nature of our revenue streams and our revenue recognition policy. Simplifying the Measurement of Inventory In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurements of Inventory" regarding inventory that is measured using the first-in, first-out or average cost method. The guidance does not apply to inventory measured using the last-in, first-out or the retail inventory method. The guidance requires inventory within its scope to be measured at the lower of cost or net realizable value, which is the estimated selling price in the normal course of business less reasonable predictable costs of completion, disposal and transportation. These amendments more closely align GAAP with International Financial Reporting Standards (IFRS). ASU 2015-11 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and should be applied prospectively with early adoption permitted as of the beginning of an interim or annual reporting period. The Company has adopted the new standard during the quarter and there has been no significant impact to our financial statements. Lease Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, "Leases (topic 842)" which requires a lessee to recognize a right to use asset and a lease liability on its balance sheet for all leases with terms of twelve months or greater. This guidance is effective for fiscal years beginning after December 15, 2018, included interim periods within those years with early adoption permitted. The Company has evaluated the new standard and expects it will have a material impact on the financial statements as we will have to begin capitalizing leases on the balance sheet when the new standard is implemented. See note 6 for current operating lease commitments. Statement of Cash Flows; Restricted Cash In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash" which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU No. 2016-18 is effective for annal periods beginning after December 15, 2017, and interim periods within those annual periods. The Company has evaluated the new standard and anticipates a change in the presentation of restricted cash on the cash flow statement once the standard is adopted.

Derivative Instruments

Derivative Instruments	3 Months Ended
	Dec. 31, 2017
Derivative Instruments [Abstract]
Derivative Instruments	DERIVATIVE INSTRUMENTS Commodity Contracts As part of its hedging strategy, the Company may enter into ethanol, soybean, soybean oil, natural gas and corn commodity-based derivatives in order to protect cash flows from fluctuations caused by volatility in commodity prices in order to protect gross profit margins from potentially adverse effects of market and price volatility on ethanol sales, corn oil sales, and corn purchase commitments where the prices are set at a future date. These derivatives are not designated as effective hedges for accounting purposes. For derivative instruments that are not accounted for as hedges, or for the ineffective portions of qualifying hedges, the change in fair value is recorded through earnings in the period of change. Ethanol derivative fair market value gains or losses are included in the results of operations and are classified as revenue and corn derivative changes in fair market value are included in cost of goods sold. As of: December 31, 2017 (unaudited) September 30, 2017 Contract Type # of Contracts Notional Amount (Qty) Fair Value # of Contracts Notional Amount (Qty) Fair Value Corn futures 1,000 5,000,000 bushels $ 12,850 81 405,000 bushels $ 16,688 Corn options 1,300 6,500,000 bushels $ (1,289,375 ) 1,800 9,000,000 bushels $ (950,000 ) Total fair value $ (1,276,525 ) $ (933,312 ) Amounts are combined on the balance sheet - negative numbers represent liabilities The following tables provide details regarding the Company's derivative financial instruments at December 31, 2017 and September 30, 2017 : Derivatives not designated as hedging instruments: Balance Sheet - as of December 31, 2017 (unaudited) Asset Liability Commodity derivative instruments, at fair value $ — $ 1,276,525 Total derivatives not designated as hedging instruments for accounting purposes $ — $ 1,276,525 Balance Sheet - as of September 30, 2017 Asset Liability Commodity derivative instruments, at fair value $ — $ 933,312 Total derivatives not designated as hedging instruments for accounting purposes $ — $ 933,312 Statement of Operations Income/(Expense) Location of gain (loss) in fair value recognized in income Amount of gain(loss) recognized in income during the three months ended December 31, 2017 (unaudited) Amount of gain (loss) recognized in income during the three months ended December 31, 2016 (unaudited) Corn derivative instruments Cost of Goods Sold $ (568,536 ) $ 218,357 Ethanol derivative instruments Revenue 1,800 40,950 Soybean oil derivative instruments Revenue — 12,216 Natural gas derivative instruments Cost of Goods Sold — 10,500 Total $ (566,736 ) $ 282,023

Inventory

Inventory	3 Months Ended
	Dec. 31, 2017
Inventory [Abstract]
Inventory	INVENTORY Inventory is valued at the lower of cost or net realizable value. Inventory values as of December 31, 2017 and September 30, 2017 were as follows: As of December 31, 2017 (unaudited) September 30, 2017 Raw materials, including corn, chemicals and supplies $ 12,385,830 $ 11,952,560 Work in process 784,509 773,786 Finished goods, including ethanol and distillers grains 794,415 1,577,066 Spare parts 1,914,455 2,110,330 Total inventory $ 15,879,209 $ 16,413,742 Lower of cost or net realizable value adjustments for the three months ended December 31, 2017 and 2016 were as follows: For the three months ended December 31, 2017 (unaudited) For the three months ended December 31, 2016 (unaudited) Loss on firm purchase commitments $ 8,000 $ — Loss on lower of cost or market adjustment for inventory on hand $ 70,979 $ — Total loss on lower of cost or market adjustments $ 78,979 $ — The Company has entered into forward corn purchase contracts under which it is required to take delivery at the contract price. At the time the contracts were created, the price of the contract approximated market price. Subsequent changes in market conditions could cause the contract prices to become higher or lower than market prices. As of December 31, 2017 , the average price of corn purchased under certain fixed price contracts, that had not yet been delivered, was greater than approximated market price. Based on this information, the Company has an $8,000 estimated loss on firm purchase commitments for the three months ended December 31, 2017 and no estimated loss for the three months ended December 31, 2016 . The loss is recorded in “Loss on firm purchase commitments” on the statement of operations. The amount of the potential loss was determined by applying a methodology similar to that used in the impairment valuation with respect to inventory. Given the uncertainty of future ethanol prices, further losses on the outstanding purchase commitments could be recorded in future periods.

Bank Financing

Bank Financing	3 Months Ended
	Dec. 31, 2017
Bank Financing [Abstract]
Bank Financing	BANK FINANCING As of December 31, 2017 (unaudited) September 30, 2017 Capital lease obligations (Note 6) $ 4,886 $ 5,538 Total Long-Term Debt 4,886 5,538 Less amounts due within one year 2,622 2,617 Total Long-Term Debt Less Amounts Due Within One Year $ 2,264 $ 2,921 The Company had a $10 million operating line-of-credit with First National Bank of Omaha that matured on March 20, 2017. On March 20, 2017, we entered into a new $10 million revolving loan (the "Revolving Loan") with U.S. Bank National Association ("U.S. Bank"). The Revolving Loan replaced the revolving loan we had with First National Bank of Omaha. The maturity date of the Revolving Loan is May 31, 2018. Our ability to draw funds on the Revolving Loan is subject to a borrowing base calculation as set forth in the Credit Agreement. At December 31, 2017 , we had $10,000,000 available on the Revolving Loan, taking into account the borrowing base calculation. We had $0 drawn on the Revolving Loan as of December 31, 2017 . The variable interest rate on December 31, 2017 was 3.40% . Of the $10 million revolving line-of-credit, the Company was not allowed to draw $687,597 which is reserved as a source of funds to support a guaranteed payment the Company agreed to related to its natural gas pipeline. While the Company does not expect that it will be required to make a direct payment for the natural gas pipeline, the Company's agreement requires it to have funds available in the event the Company is required to make the guaranteed payment. See note 6 for the Company's additional future minimum lease commitments. The Company's loans are secured by a lien on substantially all of the assets of the Company. As of December 31, 2017 , the Company was in compliance with all of its debt covenants.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Dec. 31, 2017
Fair Value Measurements [Abstract]
Fair Value Measurements	FAIR VALUE MEASUREMENTS The following table provides information on those assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2017 and September 30, 2017 , respectively. Fair Value Measurement Using Carrying Amount as of December 31, 2017 (unaudited) Fair Value as of December 31, 2017 (unaudited) Level 1 Level 2 Level 3 Liabilities Commodities derivative instruments $ 1,276,525 $ 1,276,525 $ 1,276,525 $ — $ — Total $ 1,276,525 $ 1,276,525 $ 1,276,525 $ — $ — Fair Value Measurement Using Carrying Amount as of September 30, 2017 Fair Value as of September 30, 2017 Level 1 Level 2 Level 3 Liabilities Commodities derivative instruments $ 933,312 $ 933,312 $ 933,312 $ — $ — Total $ 933,312 $ 933,312 $ 933,312 $ — $ — The fair value of the corn, ethanol, soybean oil and natural gas derivative instruments is based on quoted market prices in an active market.

Leases

Leases	3 Months Ended
	Dec. 31, 2017
Leases [Abstract]
Leases	LEASES The Company leases equipment under operating and capital leases through January 2023. The Company is generally responsible for maintenance, taxes, and utilities for leased equipment. Equipment under operating lease includes a locomotive and rail cars. Rent expense for operating leases was approximately $154,000 and $93,000 for the three months ended December 31, 2017 and 2016 , respectively. Equipment under capital leases consists of office equipment and plant equipment. Equipment under capital leases is as follows at: As of December 31, 2017 (unaudited) September 30, 2017 Equipment $ 483,488 $ 483,488 Less accumulated amortization (125,394 ) (120,029 ) Net equipment under capital lease $ 358,094 $ 363,459 At December 31, 2017 , the Company had the following minimum commitments, which at inception had non-cancelable terms of more than one year. Amounts shown below are for the 12 months period ending December 31: Operating Leases Capital Leases 2018 $ 375,553 $ 2,622 2019 326,608 2,264 2020 210,023 — 2021 167,111 — 2022 132,600 — Thereafter 11,050 — Total minimum lease commitments $ 1,222,945 4,886 Less amount representing interest — Present value of minimum lease commitments included in current maturities of long-term debt on the balance sheet $ 4,886

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Dec. 31, 2017
Commitments and Contingencies [Abstract]
Commitments and Contingencies	COMMITMENTS AND CONTINGENCIES Firm Purchase Commitments for Corn To ensure an adequate supply of corn to operate the Plant, the Company enters into contracts to purchase corn from local farmers and elevators. At December 31, 2017 , the Company had various fixed price contracts for the purchase of approximately 0.7 million bushels of corn. Using the stated contract price for the fixed price contracts, the Company had commitments of approximately $2.4 million related to the 0.7 million bushels under contract. The Company also has various unpriced basis contracts for the purchase of approximately 2.59 million bushels of corn that have been delivered to the Plant. The purchase price of these bushels will be set at the time of pricing the contracts at the July 2018 index price less basis. The estimated accrued payable for these bushels is $8.99 million . The deadline for pricing these 2.59 million bushels is June 29, 2018. Profit and Cost Sharing Agreement The Company has entered into a Profit and Cost Sharing Agreement with Bismarck Land Company, LLC which became effective on November 1, 2016. The Profit and Cost Sharing Agreement provides that the Company will share 70% of the net revenue generated by the Company from business activities which are brought to the Company by Bismarck Land Company, LLC and conducted on the real estate purchased from the Bismarck Land Company, LLC. The real estate was initially purchased in exchange for 2 million membership units at $1.66 per unit. This obligation will terminate ten years after the real estate closing date of October 11, 2016 or after Bismarck Land Company, LLC receives $10 million in proceeds from the agreement. In addition, the Company will pay Bismarck Land Company, LLC 70% of any net proceeds received by the Company from the sale of the subject real estate if a sale were to occur in the future, subject to the $10 million cap and the 10 year termination of this obligation. No payments have been made to the Bismarck Land Company, LLC at this time.

Related-Party Transactions

Related-Party Transactions	3 Months Ended
	Dec. 31, 2017
Related Party Transactions [Abstract]
Related Party Transactions	RELATED PARTY TRANSACTIONS The Company has balances and transactions in the normal course of business with various related parties for the purchase of corn, sale of distillers grains and sale of ethanol. The related parties include unit holders, members of the board of governors of the Company, and RPMG, Inc. (“RPMG”). During the Company's first quarter of 2018, the Company received a capital account refund from RPMG which is included in other income (expense) in the Company's Statement of Operations. Significant related party activity affecting the financial statements is as follows: December 31, 2017 (unaudited) September 30, 2017 Balance Sheet Accounts receivable $ 2,497,558 $ 4,027,061 Accounts Payable 12,594 1,569 Accrued Expenses 2,377,979 925,503 For the three months ended December 31, 2017 (unaudited) For the three months ended December 31, 2016 (unaudited) Statement of Operations Revenues $ 24,798,144 $ 28,998,771 Cost of goods sold 6,462 9,730 General and administrative 19,067 16,161 Other income/expense 140,539 247,307 Inventory Purchases $ 4,293,979 $ 6,078,986

Uncertainties Impacting the Eth

Uncertainties Impacting the Ethanol Industry and Our Future Operations	3 Months Ended
	Dec. 31, 2017
Uncertainties Impacting the Ethanol Industry and Our Future Operations [Abstract]
Uncertainties Impacting the Ethanol Industry and Our Future Operations	UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS The Company has certain risks and uncertainties that it experiences during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distillers grains to customers primarily located in the United States. Corn for the production process is supplied to the Plant primarily from local agricultural producers and from purchases on the open market. The Company's operating and financial performance is largely driven by prices at which the Company sells ethanol and distillers grains and by the cost at which it is able to purchase corn for operations. The price of ethanol is influenced by factors such as prices, supply and demand, weather, government policies and programs, and unleaded gasoline and the petroleum markets, although since 2005 the prices of ethanol and gasoline began a divergence with ethanol selling for less than gasoline at the wholesale level. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The Company's largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, weather, government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities. The Company's financial performance is highly dependent on the Federal Renewable Fuels Standard ("RFS") which requires that a certain amount of renewable fuels must be used each year in the United States. Corn based ethanol, such as the ethanol the Company produces, can be used to meet a portion of the RFS requirement. In November 2013, the EPA issued a proposed rule which would reduce the RFS for 2014, including the RFS requirement related to corn based ethanol. The EPA proposed rule was subject to a comment period which expired in January 2014. On November 30, 2015, the EPA released its final ethanol use requirements for 2014, 2015 and 2016 which were lower than the statutory requirements in the RFS. However, the final RFS for 2017 equaled the statutory requirement which was also the case for the 2018 RFS final rule. The Company anticipates that the results of operations during the remainder of fiscal year 2018 will continue to be affected by volatility in the commodity markets. The volatility is due to various factors, including uncertainty with respect to the availability and supply of corn, increased demand for grain from global and national markets, speculation in the commodity markets and demand for corn from the ethanol industry.

Member's Equity (Notes)

Member's Equity (Notes)	3 Months Ended
	Dec. 31, 2017
Equity [Abstract]
Members' Equity Notes Disclosure [Text Block]	MEMBER'S EQUITY Unregistered Units Sales by the Company . On October 10, 2016, the Company issued two million of the Company's membership units to Bismarck Land Company, LLC as part of the consideration for the acquisition of 338 acres of land adjacent to the ethanol plant that the Company will use to expand its rail yard. The membership units were issued pursuant to the exemption from registration set forth in Regulation D, Rule 506(b), as Bismarck Land Company, LLC is an accredited investor. Unit Purchases By the Company . (a) (b) (c) (d) Period Total Number of Units Purchased Average Price Paid per Unit Total Number of Units Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of the Units that May Yet Be Purchased Under the Plans or Programs October 2016 None None None None November 2016 None None None None December 2016 564,963 $1.00 None None January 2017 116,857 $1.00 None None February 2017 None None None None March 2017 None None None None April 2017 None None None None May 2017 None None None None June 2017 None None None None Total 681,820 $1.00 None None * 681,820 Units were purchased other than through a publicly announced plan or program, pursuant to a Membership Unit Repurchase Agreement, a private transaction between the Company and a Member.

Subsequent Event Subsequent Eve

Subsequent Event Subsequent Event	3 Months Ended
	Dec. 31, 2017
Subsequent Events [Abstract]
Subsequent Events [Text Block]	SUBSEQUENT EVENT Management evaluated all other activity of the Company and concluded that no subsequent events have occurred that would require recognition in the condensed financial statements or disclosure in the notes to the condensed financial statements.

Accounting Policies

Accounting Policies	3 Months Ended
	Dec. 31, 2017
Accounting Policies [Abstract]
Accounting Estimates	Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities and the reported revenues and expenses. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, inventory and allowance for doubtful accounts. Actual results could differ from those estimates.
Net Income (Loss) Per Unit	Net Income Per Unit Net income per unit is calculated on a basic and fully diluted basis using the weighted average units outstanding during the period.
Recently Issued Accounting Pronouncements	Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers” which supersedes the guidance in “Revenue Recognition (Topic 605)” and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period and is to be applied retrospectively, with early application not permitted. The Company has evaluated the new standard and anticipates a change in the reporting of revenue as enhanced disclosures will be required. The Company does not anticipate a significant impact on our financial statements due to the nature of our revenue streams and our revenue recognition policy. Simplifying the Measurement of Inventory In July 2015, the FASB issued ASU No. 2015-11, "Simplifying the Measurements of Inventory" regarding inventory that is measured using the first-in, first-out or average cost method. The guidance does not apply to inventory measured using the last-in, first-out or the retail inventory method. The guidance requires inventory within its scope to be measured at the lower of cost or net realizable value, which is the estimated selling price in the normal course of business less reasonable predictable costs of completion, disposal and transportation. These amendments more closely align GAAP with International Financial Reporting Standards (IFRS). ASU 2015-11 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and should be applied prospectively with early adoption permitted as of the beginning of an interim or annual reporting period. The Company has adopted the new standard during the quarter and there has been no significant impact to our financial statements. Lease Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, "Leases (topic 842)" which requires a lessee to recognize a right to use asset and a lease liability on its balance sheet for all leases with terms of twelve months or greater. This guidance is effective for fiscal years beginning after December 15, 2018, included interim periods within those years with early adoption permitted. The Company has evaluated the new standard and expects it will have a material impact on the financial statements as we will have to begin capitalizing leases on the balance sheet when the new standard is implemented. See note 6 for current operating lease commitments. Statement of Cash Flows; Restricted Cash In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash" which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU No. 2016-18 is effective for annal periods beginning after December 15, 2017, and interim periods within those annual periods. The Company has evaluated the new standard and anticipates a change in the presentation of restricted cash on the cash flow statement once the standard is adopted.

Derivative Instruments (Tables)

Derivative Instruments (Tables)	3 Months Ended
	Dec. 31, 2017
Derivative Instruments [Abstract]
Derivative Instruments Commodity Contracts	As of: December 31, 2017 (unaudited) September 30, 2017 Contract Type # of Contracts Notional Amount (Qty) Fair Value # of Contracts Notional Amount (Qty) Fair Value Corn futures 1,000 5,000,000 bushels $ 12,850 81 405,000 bushels $ 16,688 Corn options 1,300 6,500,000 bushels $ (1,289,375 ) 1,800 9,000,000 bushels $ (950,000 ) Total fair value $ (1,276,525 ) $ (933,312 ) Amounts are combined on the balance sheet - negative numbers represent liabilities
Derivatives Not Designated As Hedging Instruments, Balance Sheet	Derivatives not designated as hedging instruments: Balance Sheet - as of December 31, 2017 (unaudited) Asset Liability Commodity derivative instruments, at fair value $ — $ 1,276,525 Total derivatives not designated as hedging instruments for accounting purposes $ — $ 1,276,525 Balance Sheet - as of September 30, 2017 Asset Liability Commodity derivative instruments, at fair value $ — $ 933,312 Total derivatives not designated as hedging instruments for accounting purposes $ — $ 933,312
Derivatives Not Designated as Hedging Instruments, Statement of Operations	Statement of Operations Income/(Expense) Location of gain (loss) in fair value recognized in income Amount of gain(loss) recognized in income during the three months ended December 31, 2017 (unaudited) Amount of gain (loss) recognized in income during the three months ended December 31, 2016 (unaudited) Corn derivative instruments Cost of Goods Sold $ (568,536 ) $ 218,357 Ethanol derivative instruments Revenue 1,800 40,950 Soybean oil derivative instruments Revenue — 12,216 Natural gas derivative instruments Cost of Goods Sold — 10,500 Total $ (566,736 ) $ 282,023

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Dec. 31, 2017
Inventory [Abstract]
Schedule of Inventory	As of December 31, 2017 (unaudited) September 30, 2017 Raw materials, including corn, chemicals and supplies $ 12,385,830 $ 11,952,560 Work in process 784,509 773,786 Finished goods, including ethanol and distillers grains 794,415 1,577,066 Spare parts 1,914,455 2,110,330 Total inventory $ 15,879,209 $ 16,413,742
Long-term Purchase Commitment	For the three months ended December 31, 2017 (unaudited) For the three months ended December 31, 2016 (unaudited) Loss on firm purchase commitments $ 8,000 $ — Loss on lower of cost or market adjustment for inventory on hand $ 70,979 $ — Total loss on lower of cost or market adjustments $ 78,979 $ —

Bank Financing (Tables)

Bank Financing (Tables)	3 Months Ended
	Dec. 31, 2017
Bank Financing [Abstract]
Schedule of Long-term Debt	As of December 31, 2017 (unaudited) September 30, 2017 Capital lease obligations (Note 6) $ 4,886 $ 5,538 Total Long-Term Debt 4,886 5,538 Less amounts due within one year 2,622 2,617 Total Long-Term Debt Less Amounts Due Within One Year $ 2,264 $ 2,921

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Dec. 31, 2017
Fair Value Measurements [Abstract]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis	Fair Value Measurement Using Carrying Amount as of December 31, 2017 (unaudited) Fair Value as of December 31, 2017 (unaudited) Level 1 Level 2 Level 3 Liabilities Commodities derivative instruments $ 1,276,525 $ 1,276,525 $ 1,276,525 $ — $ — Total $ 1,276,525 $ 1,276,525 $ 1,276,525 $ — $ — Fair Value Measurement Using Carrying Amount as of September 30, 2017 Fair Value as of September 30, 2017 Level 1 Level 2 Level 3 Liabilities Commodities derivative instruments $ 933,312 $ 933,312 $ 933,312 $ — $ — Total $ 933,312 $ 933,312 $ 933,312 $ — $ —

Leases (Tables)

Leases (Tables)	3 Months Ended
	Dec. 31, 2017
Leases [Abstract]
Schedule of Capital Leased Assets	As of December 31, 2017 (unaudited) September 30, 2017 Equipment $ 483,488 $ 483,488 Less accumulated amortization (125,394 ) (120,029 ) Net equipment under capital lease $ 358,094 $ 363,459
Schedule of Future Minimum Payments for Capital and Operating Leases	Operating Leases Capital Leases 2018 $ 375,553 $ 2,622 2019 326,608 2,264 2020 210,023 — 2021 167,111 — 2022 132,600 — Thereafter 11,050 — Total minimum lease commitments $ 1,222,945 4,886 Less amount representing interest — Present value of minimum lease commitments included in current maturities of long-term debt on the balance sheet $ 4,886

Related-Party Transactions (Tab

Related-Party Transactions (Tables)	3 Months Ended
	Dec. 31, 2017
Related Party Transactions [Abstract]
Schedule of Related Party Transactions	December 31, 2017 (unaudited) September 30, 2017 Balance Sheet Accounts receivable $ 2,497,558 $ 4,027,061 Accounts Payable 12,594 1,569 Accrued Expenses 2,377,979 925,503 For the three months ended December 31, 2017 (unaudited) For the three months ended December 31, 2016 (unaudited) Statement of Operations Revenues $ 24,798,144 $ 28,998,771 Cost of goods sold 6,462 9,730 General and administrative 19,067 16,161 Other income/expense 140,539 247,307 Inventory Purchases $ 4,293,979 $ 6,078,986

Member's Equity (Tables)

Member's Equity (Tables)	3 Months Ended
	Dec. 31, 2017
Equity [Abstract]
Class of Treasury Stock [Table Text Block]	Unit Purchases By the Company . (a) (b) (c) (d) Period Total Number of Units Purchased Average Price Paid per Unit Total Number of Units Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of the Units that May Yet Be Purchased Under the Plans or Programs October 2016 None None None None November 2016 None None None None December 2016 564,963 $1.00 None None January 2017 116,857 $1.00 None None February 2017 None None None None March 2017 None None None None April 2017 None None None None May 2017 None None None None June 2017 None None None None Total 681,820 $1.00 None None * 681,820 Units were purchased other than through a publicly announced plan or program, pursuant to a Membership Unit Repurchase Agreement, a private transaction between the Company and a Member.

Summary of Significant Accoun25

Summary of Significant Accounting Policies Nature of Business (Details) gal in Millions	3 Months Ended
	Dec. 31, 2017gal
Ethanol [Member]
Product Information [Line Items]
Annual Production Capacity	50

Derivative Instruments - Commod

Derivative Instruments - Commodity Contracts (Details)	Dec. 31, 2017USD ($)bu	Sep. 30, 2017USD ($)bu
Derivative [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	$ (1,276,525)	$ (933,312)
Commodity Contract [Member] | Commodity [Member]
Derivative [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	$ (1,276,525)	$ (933,312)
Corn [Member] | Commodity [Member]
Derivative [Line Items]
Number of Commodity Contracts Held	1,000	81
Notional Amount Held by Contract | bu	5,000,000	405,000
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value	$ 12,850	$ 16,688
Corn [Member] | Commodity Option [Member]
Derivative [Line Items]
Number of Commodity Contracts Held	1,300	1,800
Notional Amount Held by Contract | bu	6,500,000	9,000,000
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	$ (1,289,375)	$ (950,000)

Derivative Instruments - Balanc

Derivative Instruments - Balance Sheet (Details) - USD ($)	Dec. 31, 2017	Sep. 30, 2017
Derivatives, Fair Value [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	$ (1,276,525)	$ (933,312)
Derivative Financial Instruments, Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value	0	0
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	(1,276,525)	(933,312)
Derivative Asset, Fair Value, Gross Asset	0	0
Derivative Liability, Fair Value, Gross Liability	(1,276,525)	(933,312)
Corn [Member] | Commodity [Member]
Derivatives, Fair Value [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Fair Value	$ 12,850	$ 16,688

Derivative Instruments - Income

Derivative Instruments - Income Statement (Details) - Not Designated as Hedging Instrument [Member] - USD ($)	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Corn [Member] | Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	$ (568,536)	$ 218,357
Ethanol [Member] | Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	1,800	40,950
Soybean Oil [Member] | Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	0	12,216
Natural Gas [Member] | Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	0	10,500
Commodity Contract [Member] | Gain (Loss) on Derivative Instruments [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	$ (566,736)	$ 282,023

Inventory (Details)

Inventory (Details) - USD ($)	Dec. 31, 2017	Sep. 30, 2017
Inventory [Abstract]
Raw materials, including corn, chemicals and supplies	$ 12,385,830	$ 11,952,560
Work in process	784,509	773,786
Finished goods, including ethanol and distillers grains	794,415	1,577,066
Spare parts	1,914,455	2,110,330
Inventory	$ 15,879,209	$ 16,413,742

Inventory Total Loss on Lower o

Inventory Total Loss on Lower of Cost or Market Adjustment (Details) - USD ($)	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Long-term Purchase Commitment [Line Items]
Loss on firm purchase commitments	$ 8,000	$ 0
Lower of cost or market inventory adjustment	70,979	0
Inventories [Member]
Long-term Purchase Commitment [Line Items]
Lower of cost or market inventory adjustment	70,979	0
Total loss on lower of cost or market adjustments	$ 78,979	$ 0

Bank Financing (Details)

Bank Financing (Details) - USD ($)	Dec. 31, 2017	Sep. 30, 2017
Debt Instrument [Line Items]
Long-term Debt and Capital Lease Obligations	$ 4,886	$ 5,538
Current maturities of long-term debt	2,622	2,617
Long-term Debt, Excluding Current Maturities	2,264	2,921
Line of Credit Facility, Fair Value of Amount Outstanding	0
Capital Lease Obligations [Member]
Debt Instrument [Line Items]
Capital Lease Obligations	4,886	$ 5,538
Domestic Line of Credit [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	10,000,000
Line of Credit Facility, Amount Outstanding	10,000,000
Line of Credit Facility, Remaining Borrowing Capacity	$ 10,000,000
Line of Credit Facility, Interest Rate at Period End	3.40%
Natural Gas Pipeline Payment [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Guarantees, Fair Value Disclosure	$ 687,597

Bank Financing Schedule of Matu

Bank Financing Schedule of Maturities of Long-Term Debt (Details) - USD ($)	Dec. 31, 2017	Sep. 30, 2017
Debt Instrument [Line Items]
Long-term Debt and Capital Lease Obligations	$ 4,886	$ 5,538

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($)	Dec. 31, 2017	Sep. 30, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	$ (1,276,525)	$ (933,312)
Liability [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodities derivative instruments, at fair value	1,276,525	933,312
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	(1,276,525)	(933,312)
Liability [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodities derivative instruments, at fair value	1,276,525	933,312
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	(1,276,525)	(933,312)
Liability [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodities derivative instruments, at fair value	0	0
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	0	0
Liability [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodities derivative instruments, at fair value	0	0
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	$ 0	$ 0

Leases Equipment Under Capital

Leases Equipment Under Capital Lease (Details) - Equipment [Member] - USD ($)	Dec. 31, 2017	Sep. 30, 2017
Capital Leased Assets [Line Items]
Equipment	$ 483,488	$ 483,488
Less accumulated amortization	(125,394)	(120,029)
Net equipment under capital lease	$ 358,094	$ 363,459

Leases (Details)

Leases (Details) - Transportation Equipment [Member] - USD ($)	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Operating and Capital Leased Assets [Line Items]
Operating Leases, Rent Expense	$ 154,000	$ 93,000
Operating Leases, 2017	375,553
Capital Leases, 2017	2,622
Operating Leases, 2018	326,608
Capital Leases, 2018	2,264
Operating Leases, 2019	210,023
Capital Leases, 2019	0
Operating Leases, 2020	167,111
Capital Leases, 2020	0
Operating Leases, 2021	132,600
Capital Leases, 2021	0
Operating Leases, Future Minimum Payments, Due Thereafter	11,050
Capital Leases, Future Minimum Payments Due Thereafter	0
Total Minimum Operating Lease Commitments	1,222,945
Total Minimum Capital Lease Commitments	4,886
Less amount representing interest on capital lease	0
Present Value of Minimum Lease Commitments Included in Liabilities on the Balance Sheet	$ 4,886

Commitments and Contingencies (

Commitments and Contingencies (Details) $ / shares in Units, $ in Thousands, shares in Millions	3 Months Ended
	Dec. 31, 2017USD ($)sharesbu	Nov. 01, 2016$ / shares
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Percent of net revenue generated from business activities conducted on purchased real estate	70.00%
Stock Issued During Period, Shares, Purchase of Assets | shares	2
Shares Issued, Price Per Share | $ / shares		$ 1.66
Length of contract	10 years
Payments for (Proceeds from) Other Real Estate Partnerships	$ 10,000
Guarantor Obligations, Liquidation Proceeds, Percentage	70.00%
Commodity [Member] | Fixed Price Commodity Contract [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Nonmonetary Notional Amount, Volume | bu	700,000
Commodity [Member] | Basis Unpriced Commodity Contract [Member] [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Nonmonetary Notional Amount, Volume | bu	2,588,000
Inventories [Member] | Fixed Price Commodity Contract [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Purchases	$ 2,400
Inventories [Member] | Basis Unpriced Commodity Contract [Member] [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Inputs Reconciliation, Purchases	$ 8,990

Related-Party Transactions (Det

Related-Party Transactions (Details) - USD ($)	3 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017
Related Party Transaction [Line Items]
Due from Other Related Parties	$ 2,377,979		$ 925,503
Accounts Receivable, Related Parties, Current	2,497,558		4,027,061
Accounts Payable, Related Parties, Current	12,594		$ 1,569
Revenue from Related Parties	24,798,144	$ 28,998,771
Cost of Goods Sold, Related Parties	6,462	9,730
General and Administrative Expenses from Transactions with Related Party	19,067	16,161
Related Party Transaction, Expenses from Transactions with Related Party	140,539	247,307
Related Party Transaction, Purchases from Related Party	$ 4,293,979	$ 6,078,986

Member's Equity (Details)

Member's Equity (Details)	1 Months Ended									3 Months Ended
	Jun. 30, 2017USD ($)$ / sharesshares	May 31, 2017USD ($)$ / sharesshares	Apr. 30, 2017USD ($)$ / sharesshares	Mar. 31, 2017USD ($)$ / sharesshares	Feb. 28, 2017USD ($)$ / sharesshares	Jan. 31, 2017USD ($)$ / sharesshares	Dec. 31, 2016USD ($)$ / sharesshares	Nov. 30, 2016USD ($)$ / sharesshares	Oct. 31, 2016USD ($)$ / sharesshares	Dec. 31, 2017USD ($)a$ / sharesshares
Equity [Abstract]
Area of Land | a										338
Partners' Capital Account, Units, Treasury Units Purchased | shares	0	0	0	0	0	116,857	564,963	0	0	681,820
Treasury Stock Acquired, Average Cost Per Share | $ / shares	$ 0	$ 0	$ 0	$ 0	$ 0	$ 1	$ 1	$ 0	$ 0	$ 1
Treasury Stock Acquired, Repurchase Authorization	0	0	0	0	0	0	0	0	0	0
Stock Repurchase Program, Authorized Amount | $	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0	$ 0