Document and Entity Information
Document and Entity Information Document - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2019 | Jan. 23, 2020 | Apr. 30, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | HIGHWATER ETHANOL LLC | ||
Entity Central Index Key | 0001371451 | ||
Current Fiscal Year End Date | --10-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Document Type | 10-K | ||
Document Period End Date | Oct. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding (in shares) | 4,807 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 41,550 |
Balance Sheets
Balance Sheets - USD ($) | Oct. 31, 2019 | Oct. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 1,639,114 | $ 430,702 |
Derivative instruments | 469,740 | 942,885 |
Accounts receivable | 2,961,977 | 1,316,129 |
Inventories | 7,367,356 | 8,068,691 |
Prepaids and other | 166,243 | 91,595 |
Total current assets | 12,604,430 | 10,850,002 |
Property and Equipment | ||
Land and land improvements | 12,836,332 | 12,647,512 |
Buildings | 38,818,532 | 38,818,532 |
Office equipment | 1,151,330 | 1,151,330 |
Plant and process equipment | 78,050,785 | 76,467,906 |
Vehicles | 123,779 | 74,094 |
Construction in progress | 278,333 | 445,455 |
Gross property and equipment | 131,259,091 | 129,604,829 |
Less accumulated depreciation | (72,784,587) | (63,874,604) |
Net property and equipment | 58,474,504 | 65,730,225 |
Other Assets | ||
Investments | 2,752,266 | 2,775,257 |
Deposits | 191,457 | 191,457 |
Total other assets | 2,943,723 | 2,966,714 |
Total Assets | 74,022,657 | 79,546,941 |
Current Liabilities | ||
Accounts payable | 6,908,305 | 4,149,907 |
Accrued expenses | 1,156,038 | 1,161,340 |
Current maturities of long-term debt | 2,729,739 | 2,715,436 |
Total current liabilities | 10,794,082 | 8,026,683 |
Long-Term Debt | 7,244,124 | 7,222,371 |
Commitments and Contingencies (Note 11) | ||
Members' Equity | ||
Members' equity, 4,807 and 4,812 units outstanding, respectively | 55,984,451 | 64,297,887 |
Total Liabilities and Members’ Equity | $ 74,022,657 | $ 79,546,941 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - shares | Oct. 31, 2019 | Oct. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Members' equity, units outstanding (in shares) | 4,807 | 4,812 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2017 | |
Income Statement [Abstract] | |||
Revenues | $ 97,249,109 | $ 94,943,746 | $ 100,225,143 |
Cost of Goods Sold | 101,759,731 | 97,723,069 | 93,476,303 |
Gross Profit (Loss) | (4,510,622) | (2,779,323) | 6,748,840 |
Operating Expenses | 3,200,285 | 2,891,093 | 2,739,770 |
Operating Profit (Loss) | (7,710,907) | (5,670,416) | 4,009,070 |
Other Income (Expense) | |||
Investment Income, Interest | 8,720 | 3,173 | 1,389 |
Other income | 181,172 | 66,091 | 111,945 |
Interest expense | (872,491) | (713,386) | (700,493) |
Income from equity method investments | 119,270 | 155,114 | 97,401 |
Total other expense, net | (563,329) | (489,008) | (489,758) |
Net Income (Loss) | $ (8,274,236) | $ (6,159,424) | $ 3,519,312 |
Weighted Average Units Outstanding (in shares) | 4,809 | 4,814 | 4,834 |
Net Income (Loss) Per Unit (in dollars per share) | $ (1,720.57) | $ (1,279.48) | $ 728.03 |
Distributions Per Unit (in dollars per share) | $ 0 | $ 345 | $ 345 |
Statement of Changes in Members
Statement of Changes in Members' Equity - USD ($) | Total | Retained Earnings |
Members' Equity, beginning balance at Oct. 31, 2016 | $ 70,852,397 | |
Members' Equity [Roll Forward] | ||
Net income (loss) | $ 3,519,312 | 3,519,312 |
Member distributions | (1,687,740) | |
Member unit repurchases | (550,000) | |
Members' Equity, ending balance at Oct. 31, 2017 | 72,133,969 | |
Members' Equity [Roll Forward] | ||
Net income (loss) | (6,159,424) | (6,159,424) |
Member distributions | (1,660,658) | |
Member unit repurchases | (16,000) | |
Members' Equity, ending balance at Oct. 31, 2018 | 64,297,887 | 64,297,887 |
Members' Equity [Roll Forward] | ||
Net income (loss) | (8,274,236) | (8,274,236) |
Member unit repurchases | (39,200) | |
Members' Equity, ending balance at Oct. 31, 2019 | $ 55,984,451 | $ 55,984,451 |
Statements of Changes in Member
Statements of Changes in Members' Equity (Parenthetical) - shares | 3 Months Ended | 12 Months Ended | ||
Apr. 30, 2019 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2017 | |
Members' Equity [Abstract] | ||||
Stock repurchased during period (in shares) | 4 | 5 | 2 | 78.5 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2017 | |
Cash Flows from Operating Activities | |||
Net income (loss) | $ (8,274,236) | $ (6,159,424) | $ 3,519,312 |
Adjustments to reconcile net income (loss) to net cash provided by operations | |||
Depreciation and amortization | 8,947,039 | 8,649,702 | 8,114,306 |
Distributions in excess of earnings from equity method investments | 272,049 | 232,353 | 244,183 |
Gain on sale of asset | 0 | 0 | (11,793) |
Non-cash patronage income | (249,058) | (365,854) | (192,094) |
Change in working capital components | |||
Accounts receivable | (1,645,848) | 1,522,025 | 1,301,533 |
Inventories | 701,335 | (687,985) | (421,803) |
Derivative instruments | 473,146 | (142,686) | (259,913) |
Prepaids and other | (74,648) | (1,462) | (32,152) |
Accounts payable | 2,813,174 | 1,361,072 | 28,171 |
Accrued expenses | (5,302) | (13,760) | 160,963 |
Net cash provided by operating activities | 2,957,651 | 4,393,981 | 12,450,713 |
Cash Flows from Investing Activities | |||
Capital expenditures | (1,709,039) | (2,274,830) | (5,137,921) |
Proceeds from sale of asset | 0 | 0 | 18,523 |
Net cash used in investing activities | (1,709,039) | (2,274,830) | (5,119,398) |
Cash Flows from Financing Activities | |||
Payments on long-term debt | (14,001,000) | (3,250,000) | (6,485,166) |
Advances on long-term debt | 14,000,000 | 2,500,000 | 0 |
Member unit repurchases | (39,200) | (16,000) | (550,000) |
Member distributions | 0 | (1,660,658) | (1,687,740) |
Net cash used in financing activities | (40,200) | (2,426,658) | (8,722,906) |
Net Increase (decrease) in Cash and Cash Equivalents | 1,208,412 | (307,507) | (1,391,591) |
Cash and cash equivalents – Beginning of Period | 430,702 | 738,209 | 2,129,800 |
Cash and cash equivalents – End of Period | 1,639,114 | 430,702 | 738,209 |
Supplemental Cash Flow Information | |||
Cash paid for interest expense | 761,920 | 568,345 | 585,348 |
Supplemental Disclosure of Noncash Financing and Investing Activities | |||
Capital expenditures included in accounts payable | $ 13,214 | $ 67,990 | $ 44,216 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Oct. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Highwater Ethanol, LLC, (a Minnesota Limited Liability Company) operates a 50 million gallon per year nameplate ethanol plant in Lamberton, Minnesota. The Company produces and sells fuel ethanol and co-products of the fuel ethanol production process, in the continental United States. Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The Company uses estimates and assumptions in accounting for significant matters, among others, the carrying value of property and equipment and related impairment testing, inventory valuation, and derivative instruments. Actual results could differ from those estimates and such differences may be material to the financial statements. The Company periodically reviews estimates and assumptions and the effects of revisions are reflected in the period in which the revision is made. Revenue Recognition Effective November 1, 2018, the Company adopted the new guidance required by ASU No. 2014-09 as issued by the FASB, using the modified retrospective approach. ASC Topic 606, Revenue from Contracts with Customers, further details the Company’s requirement to recognize revenue of transferred goods or services to customers in an amount which is expected to be received in exchange for those goods or services. Five steps were required as part of the new guidance: 1. Identify the contract 2. Identify the performance obligations 3. Determine the transaction price 4. Allocate the transaction price to the performance obligation 5. Recognize revenue when each performance obligation is satisfied. The adoption of this new guidance did not result in any material changes to our revenue recognition. The Company generally sells ethanol and related products pursuant to marketing agreements. The Company’s products are shipped FOB shipping point. Upon adoption of ASC Topic 606, the Company recognizes revenue when control of goods is transferred, which is consistent with the Company's previous policy where revenues were recognized when the customer has taken title and has assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. For ethanol sales, control transfers when loaded into the rail car and for distiller’s grains when the loaded rail cars leave the plant facility. In accordance with the Company’s agreements for the marketing and sale of ethanol and related products, marketing fees and freight due to the marketers are deducted from the gross sales price at the time incurred. Revenue is recorded net of these marketing fees and freight as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products. The following is a description of principal activities from which we generate revenue. Revenues from contracts with customers are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. • ethanol sales • modified distillers grains sales • dried distillers grains sales • corn oil sales Disaggregation of revenue: All revenue recognized in the income statement is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue according to product line for the fiscal years ended October 31, 2019 , and 2018 : Fiscal Year Ended October 31, 2019 Fiscal Year Ended October 31, 2018 Revenue Sources Amount Amount Ethanol Sales $ 75,541,437 $ 72,664,310 Modified Distillers Grains Sales 3,874,384 3,323,857 Dried Distillers Grains Sales 14,700,718 15,641,622 Corn Oil Sales 3,132,570 3,313,957 Total Revenues $ 97,249,109 $ 94,943,746 Contract assets and contract liabilities: The following table provides information about receivables and contract liabilities from contracts with customers: October 31, 2019 October 31, 2018 Accounts receivable $ 2,643,352 $ 1,061,970 Short term contract liabilities 4,947 — The Company receives payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract. Shipping Costs Shipping costs incurred by the Company in the sale of ethanol, dried distillers grains and corn oil are not specifically identifiable and as a result, revenue from the sale of those products is recorded based on the net selling price reported to the Company from the marketer. Cash and Cash Equivalents The Company maintains its accounts primarily at one financial institution. The cash balances regularly exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any historical losses related to their concentration. Derivative Instruments Derivatives are recognized in the balance sheets and the measurement of these instruments are at fair value. In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Contracts are evaluated to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as “normal purchases or normal sales”. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from accounting as derivatives, therefore, are not marked to market in our financial statements. The Company entered into corn commodity-based and natural gas derivatives in order to protect cash flows from fluctuations caused by volatility in prices. 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. Corn and natural gas derivative changes in fair market value are included in costs of goods sold. Accounts Receivable Credit terms are extended to customers in the normal course of business. The Company routinely monitors accounts receivable and customer balances are generally kept current at 30 days or less. The Company generally requires no collateral. Accounts receivable are recorded at their estimated net realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company’s credit terms. Accounts considered uncollectible are written off. The Company’s estimate of the allowance for doubtful accounts is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any. At October 31, 2019 and 2018 , the Company has determined that amounts are collectible and an allowance was not considered necessary. Inventories Inventories consist of raw materials, supplies, work in process and finished goods. Raw materials and supplies are stated at the lower of cost (first-in, first-out method) or net realizable value. Work in process and finished goods are stated at the lower of average cost or net realizable value. Property and Equipment Property and equipment is stated at cost. Depreciation is provided over an estimated useful life by use of the straight line method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. Depreciation is computed using the straight-line method over the following estimated useful lives: Minimum Years Maximum Years Land improvements 15 20 Buildings 10 20 Office equipment 5 5 Plant and process equipment 10 20 Vehicles 7 7 Carrying Value of Long-Lived Assets Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset group to the carrying value of the asset group. If the carrying value of the long-lived asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. In accordance with the Company’s policy for evaluating impairment of long-lived assets described above, when a triggering event occurs management evaluates the recoverability of the facilities based on projected future cash flows from operations over the facilities’ estimated useful lives. In determining the projected future undiscounted cash flows, the Company makes significant assumptions concerning the future viability of the ethanol industry, the future price of corn in relation to the future price of ethanol and the overall demand in relation to production and supply capacity. The Company has not recorded any impairment as of October 31, 2019 and 2018 . Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts receivable, and accounts payable, and other working capital items approximate fair value at October 31, 2019 and 2018 due to the short maturity nature of these instruments (Level 2). Commodities contracts are carried at fair value, based on dealer quotes and live trading levels (Note 5). The Company believes the carrying amount of the long-term debt approximates fair value due to a significant portion of total indebtedness containing variable interest rates and this rate is a market interest rate for these borrowings (Level 2). Equity Method Investments The Company has a 5.55% investment interest in an unlisted company, Renewable Fuels Marketing Group, LLC (RPMG), which markets the Company’s ethanol. The Company also has a 7% ownership interest in Lawrenceville Tank, LLC (LT), which owns and operates a trans load/tank facility near Atlanta, Georgia. These investments are flow-through entities and are being accounted for by the equity method of accounting under which the Company’s share of net income is recognized as income in the Company’s statements of operations and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account. The Company consistently follows the practice of recognizing the net income based on a one month lag. Therefore, net income related to RPMG and LT is reported in the Company’s statements of operations for the years ended October 31, 2019 , 2018 and 2017 based on their results of operations for the twelve month periods ended September 30, 2019 , 2018 and 2017. Net Income (Loss) per Unit Basic net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members’ units outstanding during the period. Diluted net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members’ units and members’ unit equivalents outstanding during the period. There were no member unit equivalents outstanding during the periods presented; accordingly, for all periods presented, the Company’s basic and diluted net income (loss) per unit are the same. Income Taxes The Company is treated as a partnership for federal and state income tax purposes and generally does not incur income taxes. Instead, their income or losses are included in the income tax returns of the members. Accordingly, no provision or liability for federal or state income taxes has been included in these financial statements. The Company recognizes and measures tax benefits when realization of the benefits is uncertain under a two-step approach. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50% . The Company has not recognized any liability for unrecognized tax benefits and has not identified any uncertain tax positions. The Company files income tax returns in the U.S. federal and Minnesota state jurisdictions. The Company is no longer subject to U.S. federal and state income tax examinations by tax authorities beyond three years. Railcar Damages Accrual In accordance with the railcar lease agreements, the Company is required to pay for damages considered to be in excess of normal wear and tear at the termination of the lease. The Company accrues the estimated cost for railcar damages over the term of the lease. Environmental Liabilities The Company’s operations are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which it operates. These laws require the Company to investigate and remediate the effects of the release or disposal of materials at its location. Accordingly, the Company has adopted policies, practices, and procedures in the areas of pollution control, occupational health, and the production, handling, storage, and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability, which could result from such events. Environmental liabilities are recorded when the liability is probable and the costs can be reasonably estimated. Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker or decision making group in deciding how to allocate resources and in assessing performance. The Company has determined that it has one reportable business segment, the manufacture and marketing of fuel-grade ethanol and the co-products of the ethanol production process. The Company's chief operating decision maker reviews financial information of the Company as a whole for purposes of assessing financial performance and making operating decisions. Accordingly, the Company considers itself to be operating in a single industry segment. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires lessees to recognize a lease liability and a right-to-use asset for all leases, including operating leases, with a term greater than twelve months on its balance sheet. This ASU is effective in annual and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted, and requires a modified retrospective transition method. The Company has evaluated the impact that this new guidance will have on the Financial Statements. As a result, the Company will recognize right-of-use assets of approximately $2,100,000 as of November 1, 2019 using the modified cumulative-effect adjustment transition method. |
Uncertainties
Uncertainties | 12 Months Ended |
Oct. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Uncertainties | UNCERTAINTIES The Company derives substantially all of its revenues from the sale of ethanol, distillers grains and corn oil. These products are commodities and the market prices for these products display substantial volatility and are subject to a number of factors which are beyond the control of the Company. The Company’s most significant manufacturing inputs are corn and natural gas. The price of these commodities is also subject to substantial volatility and uncontrollable market factors. In addition, these input costs do not necessarily fluctuate with the market prices for ethanol and distillers grains. As a result, the Company is subject to significant risk that its operating margins can be reduced or eliminated due to the relative movements in the market prices of its products and major manufacturing inputs. As a result, market fluctuations in the price of or demand for these commodities can have a significant adverse effect on the Company’s operations, profitability, and availability of cash flows to make loan payments and maintain compliance with the loan agreement. |
Inventories
Inventories | 12 Months Ended |
Oct. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories consisted of the following at: October 31, 2019 October 31, 2018 Raw materials $ 2,801,255 $ 2,339,767 Spare parts and supplies 3,384,360 3,118,195 Work in process 743,850 752,454 Finished goods 437,891 1,858,275 Total $ 7,367,356 $ 8,068,691 The Company recorded a lower of cost or net realizable value write-down on inventory of approximately $21,000 and $239,000 for the fiscal years ended October 31, 2019 and 2018, respectively. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Oct. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS As of October 31, 2019 , the Company had entered into corn, ethanol and natural gas derivative instruments, which are required to be recorded as either assets or liabilities at fair value in the balance sheet. The Company uses these instruments to manage risks from changes in market rates and prices. Derivatives qualify for treatment as hedges when there is a high correlation between the change in fair value of the derivative instrument and the related change in value of the underlying hedged item. The Company may designate the hedging instruments based upon the exposure being hedged as a fair value hedge, a cash flow hedge or a hedge against foreign currency exposure. The derivative instruments outstanding at October 31, 2019 are not designated as effective hedges for accounting purposes. Commodity Contracts Management expects all open positions outstanding as of October 31, 2019 to be realized within the next twelve months. The following tables provide details regarding the Company's derivative instruments at October 31: Instrument Balance Sheet location 2019 2018 Corn, natural gas and ethanol contracts In gain position $ 124,069 $ — In loss position (775,887 ) (2,280,280 ) Deposits with broker 1,121,558 3,223,165 Current assets $ 469,740 $ 942,885 The following tables provide details regarding the gains (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments: Statement of Year Ended October 31 Operations location 2019 2018 2017 Ethanol contracts Revenues (240,284 ) (81,032 ) 568,715 Corn contracts Cost of goods sold (835,456 ) (149,323 ) 1,751,018 Natural gas contracts Cost of goods sold 21,833 38,137 11,267 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Oct. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Various inputs are considered when determining the value of financial instruments. The inputs or methodologies used for valuing financial instruments are not necessarily an indication of the risk associated with investing in these instruments. These inputs are summarized in the three broad levels listed below: • Level 1 inputs are quoted prices in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. • Level 2 inputs include the following: ◦ Quoted prices in active markets for similar assets or liabilities. ◦ Quoted prices in markets that are not active for identical or similar assets or liabilities. ◦ Inputs other than quoted prices that are observable for the asset or liability. ◦ Inputs that are derived primarily from or corroborated by observable market data by correlation or other means. • Level 3 inputs are unobservable inputs for the asset or liability. The following table provides information on those assets (liabilities) measured at fair value on a recurring basis. Fair Value as of Fair Value Measurement Using October 31, 2019 Level 1 Level 2 Level 3 Derivative instrument - commodities In gain position $ 124,069 $ 4,538 $ 119,531 $ — In loss position $ (775,887 ) $ (4,375 ) $ (771,512 ) $ — Fair Value as of Fair Value Measurement Using October 31, 2018 Level 1 Level 2 Level 3 Derivative instrument - commodities In gain position $ — $ — $ — $ — In loss position $ (2,280,280 ) $ (37,485 ) $ (2,242,795 ) $ — The Company determines the fair value of the commodities contracts by obtaining the fair value measurements from an independent pricing service based on dealer quotes and live trading levels from the Chicago Board of Trade. |
Investment in RPMG
Investment in RPMG | 12 Months Ended |
Oct. 31, 2019 | |
Investments [Abstract] | |
Investment in RPMG | INVESTMENT IN RPMG The financial statements of RPMG are summarized as of and for the years ended September 30 as follows: September 30, 2019 September 30, 2018 Current assets $ 181,920,147 $ 165,666,359 Other assets 876,852 1,068,488 Current liabilities 152,492,824 135,448,249 Long-term liabilities 14,000 31,000 Members' equity 30,290,175 31,255,598 Revenue 3,244,543,605 3,070,802,183 Net income 1,677,577 2,099,285 |
Debt Financing
Debt Financing | 12 Months Ended |
Oct. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt Financing | DEBT FINANCING Long-term debt consists of the following at: October 31, 2019 October 31, 2018 Variable Rate Term Loan (Compeer) $ 3,500,000 $ 6,500,000 Term Revolving Loan (Compeer) 6,499,000 3,500,000 Total 9,999,000 10,000,000 Less debt issuance costs (25,137 ) (62,193 ) Less amounts due within one year (2,729,739 ) (2,715,436 ) Net long-term debt $ 7,244,124 $ 7,222,371 Bank Financing On January 22, 2016, the Company entered into a Second Amended and Restated Credit Agreement with Compeer, as administrative agent for several financial institutions which amended the Amended and Restated Credit Agreement dated September 22, 2014. The Second Amended and Restated Credit Agreement decreased the Term Loan to $15,000,000 , increased the Term Revolving Loan to $15,000,000 and eliminated the Revolving Line of Credit. Effective April 20, 2018, the Company executed a First Amendment to Second Amended and Restated Credit Agreement with Compeer which increased the availability under the Term Revolving Loan to $20,000,000 . Variable Rate Term Loan The Variable Rate Term Loan is for $15,000,000 with a variable interest rate based on the greater of the 30-day LIBOR rate plus 325 basis points with no minimum interest rate. The applicable interest rate at October 31, 2019 was 5.30% . Monthly principal payments are due on the Term Loan of approximately $250,000 plus accrued interest. Payments of all amounts outstanding are due on January 22, 2021. The outstanding balance on this note was $3,500,000 at October 31, 2019 . The Company may convert the Term Loan to a fixed rate loan, subject to certain conditions as described in the Amended and Restated Credit Agreement and with the consent of Compeer. Term Revolving Loan The Term Revolving Loan was for up to $15,000,000 with a variable interest rate that is based on the 30-day LIBOR rate plus 325 basis points with no minimum interest rate. The applicable interest rate at October 31, 2019 was 5.30% . Effective April 20, 2018, the availability under the Term Revolving Loan was increased to $20,000,000 . The Term Revolving Loan may be advanced, repaid and re-borrowed during the term. Monthly interest payments are due on the Term Revolving Loan. Payment of all amounts outstanding is due on January 22, 2023. The outstanding balance was $6,499,000 at October 31, 2019 . The Company is also required to pay unused commitment fees for the Term Revolving Loan as defined in the Second Amended and Restated Credit Agreement. Debt Issuance Costs Costs associated with the issuance of debt are recorded as debt issuance costs and are amortized over the term of the related debt by use of the effective interest method. Covenants and other Miscellaneous Terms The loan facility is secured by substantially all business assets. The Company executed a mortgage creating a first lien on its real estate and plant and a security interest in all personal property located on the premises and assigned all rents and leases to property, marketing contracts, risk management services contract, and natural gas, electricity, water service and grain procurement agreements. The Company is also subject to various financial and non-financial covenants that limit distributions and debt and require minimum debt service coverage and working capital requirements. The debt service coverage ratio is no less than 1.25 :1.00 and is measured annually by comparing adjusted EBITDA to scheduled payments of principal and interest. The minimum working capital is $8,250,000 , which is calculated as current assets plus the amount available for drawing under our Term Revolving Loan, and undrawn amounts on outstanding letters of credit less current liabilities, and is measured quarterly. The Company is limited to annual capital expenditures of $5,000,000 without prior approval, incurring additional debt over certain amounts without prior approval, and making additional investments as described in the Second Amended and Restated Credit Agreement without prior approval. The Company is allowed to make distributions to members as frequently as monthly in an amount equal to 75% of net income if working capital is greater than or equal to $8,250,000 , or 100% of net income if working capital is greater than or equal to $11,000,000 , or an unlimited amount if working capital is greater than or equal to $11,000,000 and the outstanding balance on the Term Loan is $0 . As of October 31, 2019, the Company violated the debt service coverage ratio requirement of 1.25 :1.00. Subsequent to the fiscal year end, on December 17, 2019, Compeer waived the Company's violation, at October 31, 2019, of the minimum debt services coverage ratio requirement of 1.25 :1.00. The estimated maturities of the long-term debt at October 31, 2019 are as follows: Fiscal Year Principal Debt Issuance Costs Total 2020 $ 2,750,000 $ (20,261 ) $ 2,729,739 2021 750,000 (4,876 ) 745,124 2022 — — — 2023 6,499,000 — 6,499,000 Long-term debt $ 9,999,000 $ (25,137 ) $ 9,973,863 |
Leases
Leases | 12 Months Ended |
Oct. 31, 2019 | |
Leases [Abstract] | |
Leases | LEASES The Company leases rail cars and equipment under operating leases. Rail car leases include additional payments for usage beyond specified levels. Total lease expense for the years ending October 31, 2019 , 2018 and 2017 was $276,151 , $295,920 and $295,920 , respectively. Future minimum lease payments under operating leases are as follows at October 31, 2019 : 2020 168,480 2021 168,480 2022 168,480 2023 168,480 2024 112,320 Total $ 786,240 |
Members' Equity
Members' Equity | 12 Months Ended |
Oct. 31, 2019 | |
Members' Equity [Abstract] | |
Members' Equity | MEMBERS' EQUITY The Company has one class of membership units, and is authorized to issue up to 10,000 units, which include certain transfer restrictions as specified in the operating agreement and pursuant to applicable tax and securities law, with each unit representing a pro rata ownership in the Company’s capital, profits, losses and distributions. Income and losses are allocated to all members based upon their respective percentage of units held. Unit Repurchases During the second quarter of our fiscal year ended October 31, 2019, the Company repurchased 4 of its membership units at a price of $8,000 per unit for a total purchase price of $32,000 . During the fourth quarter of our fiscal year ended October 31, 2019, the Company repurchased 1 of its membership units at a price of $7,200 per unit for a total purchase price of $7,200 . During the fourth quarter of our fiscal year ended October 31, 2018, the Company repurchased 2 of its membership units at a price of $8,000 per unit for a total purchase price of $16,000 . |
Income Taxes
Income Taxes | 12 Months Ended |
Oct. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company has adopted an October 31 fiscal year end, but has a tax year end of December 31. The differences between financial statement basis and tax basis of assets are estimated as follows: October 31, 2019 October 31, 2018 Financial statement basis of total assets $ 74,022,657 $ 79,546,941 Derivative instruments - commodities 651,819 2,280,280 Organizational and start-up costs 1,255,034 1,519,252 Book to tax depreciation (42,331,766 ) (46,287,191 ) Income tax basis of total assets $ 33,597,744 $ 37,059,282 The differences between the financial statement basis and tax basis of the Company's liabilities are estimated as follows: October 31, 2019 October 31, 2018 Financial statement basis of total liabilities $ 18,038,206 $ 15,249,054 Less: Accrued Expenses 403,200 403,200 Income tax basis of total liabilities $ 17,635,006 $ 14,845,854 |
Commitments, Contingencies and
Commitments, Contingencies and Concentrations | 12 Months Ended |
Oct. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Concentrations | COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS Marketing Agreements The Company has an ethanol marketing agreement with a marketer (RPMG) to purchase, market, and distribute all the ethanol produced by the Company. The Company also entered into a member control agreement with the marketer whereby the Company made capital contributions and became a minority owner of the marketer. The member control agreement became effective on February 1, 2011 and provides the Company a membership interest with voting rights. The marketing agreement will terminate if the Company ceases to be a member. The Company will assume certain of the member’s rail car leases if the agreement is terminated. The Company can sell its ethanol either through an index arrangement or at an agreed upon fixed price. The marketing agreement is perpetual until terminated according to the agreement. The Company may be obligated to continue to market its ethanol through the marketer for a period of time. The amended agreement requires minimum capital amounts invested as required under the agreement. Revenue recognized under this agreement for the years ended October 31, 2019, 2018 and 2017 was $75,781,721 , $72,745,341 and $81,196,577 respectively. Accounts receivable under the agreement as of October 31, 2019 and 2018 were $2,217,594 and $236,763 respectively. The Company has a distillers grains marketing agreement with a marketer to market all the dried distillers grains produced at the plant. Under the agreement the marketer charges a maximum of $2.00 per ton and a minimum of $1.50 per ton price using 2% of the FOB plant price actually received by them for all dried distillers grains removed. The agreement will remain in effect unless otherwise terminated by either party with 120 days notice. Under the agreement, the marketer is responsible for all transportation arrangements for the distribution of the dried distillers grains. The Company markets and sells its modified distillers grains. The Company has a crude corn oil marketing agreement with a marketer (RPMG) to market all corn oil to be produced at the plant for an initial term. Under the agreement, the Company must provide estimates of production and inventory of corn oil. The marketer may execute sales contracts with buyers for future delivery of corn oil. The Company receives a percentage of the F.O.B. sale price less a marketing fee, actual freight and transportation costs and certain taxes and other charges related to the purchase, delivery or sale. The Company is required to provide corn oil meeting certain specifications as provided in the agreement and the agreement provides for a process for rejection of nonconforming corn oil. The agreement automatically renews for successive terms unless terminated in accordance with the agreement. Grain Procurement Contract The Company had a grain origination agreement with a marketer to provide all of the corn needed for operation of the ethanol plant. Under the agreement, the Company purchased corn at the CBOT futures price less the weighted average of the basis prices plus a fixed fee per bushel of corn purchased. The agreement was for an initial five -year term which commenced on July 27, 2016 and automatically renewed for successive one -year terms unless otherwise terminated in accordance with its terms. On January 3, 2019, the Company and the marketer mutually agreed to terminate the grain origination agreement effective as of January 31, 2019. Regulatory Agencies The Company is subject to oversight from regulatory agencies regarding environmental concerns which arise in the ordinary course of its business. Forward Contracts In the ordinary course of business, we enter into forward contracts for our commodity purchases and sales. Forward contracts are as follows at October 31, 2019 : Quantity Average Price Delivery Date Purchase of corn (in bushels): Basis Contracts 190,000 By 7/31/21 Priced Contracts 453,000 $ 3.81 By 11/30/20 Total 643,000 Purchase of natural gas (in dekatherms): Index contracts — Priced contracts 2,968,000 $ 2.53 By 3/31/21 Total 2,968,000 Purchase of denaturant (in gallons): Index contracts — Priced contracts 101,000 $ 1.35 By 12/31/19 Total 101,000 Sales of dry distillers grains (in tons): Index contracts — Priced contracts 8,800 $ 133.70 By 1/31/20 Total 8,800 Sales of modified distillers grains (in tons) Index contracts — Priced contracts 29,600 $ 75.22 By 7/31/20 Total 29,600 Sales of corn oil (in pounds) Index contracts — Priced contracts 1,056,000 $ 0.24 By 11/20/19 Total 1,056,000 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Oct. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | QUARTERLY FINANCIAL DATA (UNAUDITED) First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Ended October 31, 2019 Revenues $ 22,688,410 $ 22,939,711 $ 25,605,525 $ 26,015,463 Gross loss (1,798,887 ) (1,616,624 ) (175,483 ) (919,628 ) Operating loss (2,560,218 ) (2,428,181 ) (1,078,065 ) (1,644,443 ) Net loss (2,719,712 ) (2,579,501 ) (1,248,542 ) (1,726,481 ) Basic and diluted loss per unit (565.19 ) (536.28 ) (259.68 ) (359.08 ) First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Ended October 31, 2018 Revenues $ 22,980,047 $ 24,262,577 $ 25,888,608 $ 21,812,514 Gross profit (loss) (51,696 ) 2,283,325 (1,527,385 ) (3,483,567 ) Operating income (loss) (794,645 ) 1,492,581 (2,186,352 ) (4,182,000 ) Net income (loss) (953,195 ) 1,335,482 (2,330,905 ) (4,210,806 ) Basic and diluted earnings (loss) per unit (198.02 ) 277.42 (484.19 ) (874.69 ) First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Ended October 31, 2017 Revenues $ 27,058,613 $ 23,718,623 $ 25,368,884 $ 24,079,023 Gross profit 4,191,810 591,457 1,195,537 770,036 Operating income (loss) 3,467,790 (162,585 ) 596,246 107,619 Net income (loss) 3,290,175 (308,283 ) 503,476 33,944 Basic and diluted earnings (loss) per unit 672.56 (64.04 ) 104.59 7.05 The above quarterly financial data is unaudited, but in the opinion of management, all adjustments necessary for a fair presentation of the selected data for these periods presented have been included. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Oct. 31, 2019 | |
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. The Company uses estimates and assumptions in accounting for significant matters, among others, the carrying value of property and equipment and related impairment testing, inventory valuation, and derivative instruments. Actual results could differ from those estimates and such differences may be material to the financial statements. The Company periodically reviews estimates and assumptions and the effects of revisions are reflected in the period in which the revision is made. |
Revenue Recognition | Revenue Recognition Effective November 1, 2018, the Company adopted the new guidance required by ASU No. 2014-09 as issued by the FASB, using the modified retrospective approach. ASC Topic 606, Revenue from Contracts with Customers, further details the Company’s requirement to recognize revenue of transferred goods or services to customers in an amount which is expected to be received in exchange for those goods or services. Five steps were required as part of the new guidance: 1. Identify the contract 2. Identify the performance obligations 3. Determine the transaction price 4. Allocate the transaction price to the performance obligation 5. Recognize revenue when each performance obligation is satisfied. The adoption of this new guidance did not result in any material changes to our revenue recognition. The Company generally sells ethanol and related products pursuant to marketing agreements. The Company’s products are shipped FOB shipping point. Upon adoption of ASC Topic 606, the Company recognizes revenue when control of goods is transferred, which is consistent with the Company's previous policy where revenues were recognized when the customer has taken title and has assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. For ethanol sales, control transfers when loaded into the rail car and for distiller’s grains when the loaded rail cars leave the plant facility. In accordance with the Company’s agreements for the marketing and sale of ethanol and related products, marketing fees and freight due to the marketers are deducted from the gross sales price at the time incurred. Revenue is recorded net of these marketing fees and freight as they do not provide an identifiable benefit that is sufficiently separable from the sale of ethanol and related products. The following is a description of principal activities from which we generate revenue. Revenues from contracts with customers are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. • ethanol sales • modified distillers grains sales • dried distillers grains sales • corn oil sales Disaggregation of revenue: All revenue recognized in the income statement is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue according to product line for the fiscal years ended October 31, 2019 , and 2018 : Fiscal Year Ended October 31, 2019 Fiscal Year Ended October 31, 2018 Revenue Sources Amount Amount Ethanol Sales $ 75,541,437 $ 72,664,310 Modified Distillers Grains Sales 3,874,384 3,323,857 Dried Distillers Grains Sales 14,700,718 15,641,622 Corn Oil Sales 3,132,570 3,313,957 Total Revenues $ 97,249,109 $ 94,943,746 Contract assets and contract liabilities: The following table provides information about receivables and contract liabilities from contracts with customers: October 31, 2019 October 31, 2018 Accounts receivable $ 2,643,352 $ 1,061,970 Short term contract liabilities 4,947 — The Company receives payments from customers based upon contractual billing schedules; accounts receivable are recorded when the right to consideration becomes unconditional. Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract. |
Shipping Costs | Shipping Costs Shipping costs incurred by the Company in the sale of ethanol, dried distillers grains and corn oil are not specifically identifiable and as a result, revenue from the sale of those products is recorded based on the net selling price reported to the Company from the marketer. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company maintains its accounts primarily at one financial institution. The cash balances regularly exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any historical losses related to their concentration. |
Derivative Instruments | Derivative Instruments Derivatives are recognized in the balance sheets and the measurement of these instruments are at fair value. In order for a derivative to qualify as a hedge, specific criteria must be met and appropriate documentation maintained. Gains and losses from derivatives that do not qualify as hedges, or are undesignated, must be recognized immediately in earnings. If the derivative does qualify as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. Contracts are evaluated to determine whether the contracts are derivatives. Certain contracts that literally meet the definition of a derivative may be exempted as “normal purchases or normal sales”. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from accounting as derivatives, therefore, are not marked to market in our financial statements. The Company entered into corn commodity-based and natural gas derivatives in order to protect cash flows from fluctuations caused by volatility in prices. 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. Corn and natural gas derivative changes in fair market value are included in costs of goods sold. |
Accounts Receivable | Accounts Receivable Credit terms are extended to customers in the normal course of business. The Company routinely monitors accounts receivable and customer balances are generally kept current at 30 days or less. The Company generally requires no collateral. Accounts receivable are recorded at their estimated net realizable value. Accounts are considered past due if payment is not made on a timely basis in accordance with the Company’s credit terms. Accounts considered uncollectible are written off. The Company’s estimate of the allowance for doubtful accounts is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any. |
Inventories | Inventories Inventories consist of raw materials, supplies, work in process and finished goods. Raw materials and supplies are stated at the lower of cost (first-in, first-out method) or net realizable value. Work in process and finished goods are stated at the lower of average cost or net realizable value. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost. Depreciation is provided over an estimated useful life by use of the straight line method. Maintenance and repairs are expensed as incurred; major improvements and betterments are capitalized. Depreciation is computed using the straight-line method over the following estimated useful lives: Minimum Years Maximum Years Land improvements 15 20 Buildings 10 20 Office equipment 5 5 Plant and process equipment 10 20 Vehicles 7 7 |
Carrying Value of Long-Lived Assets | Carrying Value of Long-Lived Assets Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset group to the carrying value of the asset group. If the carrying value of the long-lived asset group is not recoverable on an undiscounted cash flow basis, impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. In accordance with the Company’s policy for evaluating impairment of long-lived assets described above, when a triggering event occurs management evaluates the recoverability of the facilities based on projected future cash flows from operations over the facilities’ estimated useful lives. In determining the projected future undiscounted cash flows, the Company makes significant assumptions concerning the future viability of the ethanol industry, the future price of corn in relation to the future price of ethanol and the overall demand in relation to production and supply capacity. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts receivable, and accounts payable, and other working capital items approximate fair value at October 31, 2019 and 2018 due to the short maturity nature of these instruments (Level 2). Commodities contracts are carried at fair value, based on dealer quotes and live trading levels (Note 5). The Company believes the carrying amount of the long-term debt approximates fair value due to a significant portion of total indebtedness containing variable interest rates and this rate is a market interest rate for these borrowings (Level 2). |
Equity Method Investments | Equity Method Investments The Company has a 5.55% investment interest in an unlisted company, Renewable Fuels Marketing Group, LLC (RPMG), which markets the Company’s ethanol. The Company also has a 7% ownership interest in Lawrenceville Tank, LLC (LT), which owns and operates a trans load/tank facility near Atlanta, Georgia. These investments are flow-through entities and are being accounted for by the equity method of accounting under which the Company’s share of net income is recognized as income in the Company’s statements of operations and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account. The Company consistently follows the practice of recognizing the net income based on a one month lag. Therefore, net income related to RPMG and LT is reported in the Company’s statements of operations for the years ended October 31, 2019 , 2018 and 2017 based on their results of operations for the twelve month periods ended September 30, 2019 , 2018 and 2017. |
Net Income (Loss) per Unit | Net Income (Loss) per Unit Basic net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members’ units outstanding during the period. Diluted net income (loss) per unit is computed by dividing net income (loss) by the weighted average number of members’ units and members’ unit equivalents outstanding during the period. There were no member unit equivalents outstanding during the periods presented; accordingly, for all periods presented, the Company’s basic and diluted net income (loss) per unit are the same. |
Income Taxes | Income Taxes The Company is treated as a partnership for federal and state income tax purposes and generally does not incur income taxes. Instead, their income or losses are included in the income tax returns of the members. Accordingly, no provision or liability for federal or state income taxes has been included in these financial statements. The Company recognizes and measures tax benefits when realization of the benefits is uncertain under a two-step approach. The first step is to determine whether the benefit meets the more-likely-than-not condition for recognition and the second step is to determine the amount to be recognized based on the cumulative probability that exceeds 50% . The Company has not recognized any liability for unrecognized tax benefits and has not identified any uncertain tax positions. The Company files income tax returns in the U.S. federal and Minnesota state jurisdictions. The Company is no longer subject to U.S. federal and state income tax examinations by tax authorities beyond three years. |
Railcar Damages Accrual | Railcar Damages Accrual In accordance with the railcar lease agreements, the Company is required to pay for damages considered to be in excess of normal wear and tear at the termination of the lease. The Company accrues the estimated cost for railcar damages over the term of the lease. |
Environmental Liabilities | Environmental Liabilities The Company’s operations are subject to environmental laws and regulations adopted by various governmental entities in the jurisdiction in which it operates. These laws require the Company to investigate and remediate the effects of the release or disposal of materials at its location. Accordingly, the Company has adopted policies, practices, and procedures in the areas of pollution control, occupational health, and the production, handling, storage, and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability, which could result from such events. Environmental liabilities are recorded when the liability is probable and the costs can be reasonably estimated. |
Segment Reporting | Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker or decision making group in deciding how to allocate resources and in assessing performance. The Company has determined that it has one reportable business segment, the manufacture and marketing of fuel-grade ethanol and the co-products of the ethanol production process. The Company's chief operating decision maker reviews financial information of the Company as a whole for purposes of assessing financial performance and making operating decisions. Accordingly, the Company considers itself to be operating in a single industry segment. |
Recent Accounting Pronouncement | Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This ASU requires lessees to recognize a lease liability and a right-to-use asset for all leases, including operating leases, with a term greater than twelve months on its balance sheet. This ASU is effective in annual and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted, and requires a modified retrospective transition method. The Company has evaluated the impact that this new guidance will have on the Financial Statements. As a result, the Company will recognize right-of-use assets of approximately $2,100,000 as of November 1, 2019 using the modified cumulative-effect adjustment transition method. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Revenue | The following table depicts the disaggregation of revenue according to product line for the fiscal years ended October 31, 2019 , and 2018 : Fiscal Year Ended October 31, 2019 Fiscal Year Ended October 31, 2018 Revenue Sources Amount Amount Ethanol Sales $ 75,541,437 $ 72,664,310 Modified Distillers Grains Sales 3,874,384 3,323,857 Dried Distillers Grains Sales 14,700,718 15,641,622 Corn Oil Sales 3,132,570 3,313,957 Total Revenues $ 97,249,109 $ 94,943,746 |
Summary of Contract Assets and Liabilities | The following table provides information about receivables and contract liabilities from contracts with customers: October 31, 2019 October 31, 2018 Accounts receivable $ 2,643,352 $ 1,061,970 Short term contract liabilities 4,947 — |
Schedule of Property, Plant and Equipment | Depreciation is computed using the straight-line method over the following estimated useful lives: Minimum Years Maximum Years Land improvements 15 20 Buildings 10 20 Office equipment 5 5 Plant and process equipment 10 20 Vehicles 7 7 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consisted of the following at: October 31, 2019 October 31, 2018 Raw materials $ 2,801,255 $ 2,339,767 Spare parts and supplies 3,384,360 3,118,195 Work in process 743,850 752,454 Finished goods 437,891 1,858,275 Total $ 7,367,356 $ 8,068,691 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position | The following tables provide details regarding the Company's derivative instruments at October 31: Instrument Balance Sheet location 2019 2018 Corn, natural gas and ethanol contracts In gain position $ 124,069 $ — In loss position (775,887 ) (2,280,280 ) Deposits with broker 1,121,558 3,223,165 Current assets $ 469,740 $ 942,885 |
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position | The following tables provide details regarding the gains (losses) from the Company's derivative instruments in the statements of operations, none of which are designated as hedging instruments: Statement of Year Ended October 31 Operations location 2019 2018 2017 Ethanol contracts Revenues (240,284 ) (81,032 ) 568,715 Corn contracts Cost of goods sold (835,456 ) (149,323 ) 1,751,018 Natural gas contracts Cost of goods sold 21,833 38,137 11,267 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table provides information on those assets (liabilities) measured at fair value on a recurring basis. Fair Value as of Fair Value Measurement Using October 31, 2019 Level 1 Level 2 Level 3 Derivative instrument - commodities In gain position $ 124,069 $ 4,538 $ 119,531 $ — In loss position $ (775,887 ) $ (4,375 ) $ (771,512 ) $ — Fair Value as of Fair Value Measurement Using October 31, 2018 Level 1 Level 2 Level 3 Derivative instrument - commodities In gain position $ — $ — $ — $ — In loss position $ (2,280,280 ) $ (37,485 ) $ (2,242,795 ) $ — |
Investment in RPMG (Tables)
Investment in RPMG (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Investments [Abstract] | |
Schedule of Equity Method Investments | The financial statements of RPMG are summarized as of and for the years ended September 30 as follows: September 30, 2019 September 30, 2018 Current assets $ 181,920,147 $ 165,666,359 Other assets 876,852 1,068,488 Current liabilities 152,492,824 135,448,249 Long-term liabilities 14,000 31,000 Members' equity 30,290,175 31,255,598 Revenue 3,244,543,605 3,070,802,183 Net income 1,677,577 2,099,285 |
Debt Financing (Tables)
Debt Financing (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consists of the following at: October 31, 2019 October 31, 2018 Variable Rate Term Loan (Compeer) $ 3,500,000 $ 6,500,000 Term Revolving Loan (Compeer) 6,499,000 3,500,000 Total 9,999,000 10,000,000 Less debt issuance costs (25,137 ) (62,193 ) Less amounts due within one year (2,729,739 ) (2,715,436 ) Net long-term debt $ 7,244,124 $ 7,222,371 |
Schedule of Maturities of Long-term Debt | The estimated maturities of the long-term debt at October 31, 2019 are as follows: Fiscal Year Principal Debt Issuance Costs Total 2020 $ 2,750,000 $ (20,261 ) $ 2,729,739 2021 750,000 (4,876 ) 745,124 2022 — — — 2023 6,499,000 — 6,499,000 Long-term debt $ 9,999,000 $ (25,137 ) $ 9,973,863 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Leases [Abstract] | |
Schedule of future minimum lease payments under operating leases | Future minimum lease payments under operating leases are as follows at October 31, 2019 : 2020 168,480 2021 168,480 2022 168,480 2023 168,480 2024 112,320 Total $ 786,240 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Taxes | The Company has adopted an October 31 fiscal year end, but has a tax year end of December 31. The differences between financial statement basis and tax basis of assets are estimated as follows: October 31, 2019 October 31, 2018 Financial statement basis of total assets $ 74,022,657 $ 79,546,941 Derivative instruments - commodities 651,819 2,280,280 Organizational and start-up costs 1,255,034 1,519,252 Book to tax depreciation (42,331,766 ) (46,287,191 ) Income tax basis of total assets $ 33,597,744 $ 37,059,282 The differences between the financial statement basis and tax basis of the Company's liabilities are estimated as follows: October 31, 2019 October 31, 2018 Financial statement basis of total liabilities $ 18,038,206 $ 15,249,054 Less: Accrued Expenses 403,200 403,200 Income tax basis of total liabilities $ 17,635,006 $ 14,845,854 |
Commitments, Contingencies an_2
Commitments, Contingencies and Concentrations (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Forward Contracts | Forward contracts are as follows at October 31, 2019 : Quantity Average Price Delivery Date Purchase of corn (in bushels): Basis Contracts 190,000 By 7/31/21 Priced Contracts 453,000 $ 3.81 By 11/30/20 Total 643,000 Purchase of natural gas (in dekatherms): Index contracts — Priced contracts 2,968,000 $ 2.53 By 3/31/21 Total 2,968,000 Purchase of denaturant (in gallons): Index contracts — Priced contracts 101,000 $ 1.35 By 12/31/19 Total 101,000 Sales of dry distillers grains (in tons): Index contracts — Priced contracts 8,800 $ 133.70 By 1/31/20 Total 8,800 Sales of modified distillers grains (in tons) Index contracts — Priced contracts 29,600 $ 75.22 By 7/31/20 Total 29,600 Sales of corn oil (in pounds) Index contracts — Priced contracts 1,056,000 $ 0.24 By 11/20/19 Total 1,056,000 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Oct. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Ended October 31, 2019 Revenues $ 22,688,410 $ 22,939,711 $ 25,605,525 $ 26,015,463 Gross loss (1,798,887 ) (1,616,624 ) (175,483 ) (919,628 ) Operating loss (2,560,218 ) (2,428,181 ) (1,078,065 ) (1,644,443 ) Net loss (2,719,712 ) (2,579,501 ) (1,248,542 ) (1,726,481 ) Basic and diluted loss per unit (565.19 ) (536.28 ) (259.68 ) (359.08 ) First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Ended October 31, 2018 Revenues $ 22,980,047 $ 24,262,577 $ 25,888,608 $ 21,812,514 Gross profit (loss) (51,696 ) 2,283,325 (1,527,385 ) (3,483,567 ) Operating income (loss) (794,645 ) 1,492,581 (2,186,352 ) (4,182,000 ) Net income (loss) (953,195 ) 1,335,482 (2,330,905 ) (4,210,806 ) Basic and diluted earnings (loss) per unit (198.02 ) 277.42 (484.19 ) (874.69 ) First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Ended October 31, 2017 Revenues $ 27,058,613 $ 23,718,623 $ 25,368,884 $ 24,079,023 Gross profit 4,191,810 591,457 1,195,537 770,036 Operating income (loss) 3,467,790 (162,585 ) 596,246 107,619 Net income (loss) 3,290,175 (308,283 ) 503,476 33,944 Basic and diluted earnings (loss) per unit 672.56 (64.04 ) 104.59 7.05 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) gal in Millions | 12 Months Ended | ||
Oct. 31, 2019USD ($)segmentgal | Oct. 31, 2018USD ($) | Nov. 01, 2019USD ($) | |
Product Information [Line Items] | |||
Average maximum days accounts receivable outstanding | 30 days | ||
Impairment of long-lived assets | $ 0 | $ 0 | |
Number of reportable business segments | segment | 1 | ||
Renewable Fuels Marketing Group (RPMG) | |||
Product Information [Line Items] | |||
Equity method investment ownership percentage | 5.55% | ||
Lawrenceville Tank, LLC | |||
Product Information [Line Items] | |||
Equity method investment ownership percentage | 7.00% | ||
Ethanol Contracts | |||
Product Information [Line Items] | |||
Annual production capacity | gal | 50 | ||
Subsequent Event | Accounting Standards Update 2016-02 [Member] | |||
Product Information [Line Items] | |||
Operating lease, right-of-use assets | $ 2,100,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Schedule of Disaggregation of Revenue) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Oct. 31, 2019 | Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenues | $ 26,015,463 | $ 25,605,525 | $ 22,939,711 | $ 22,688,410 | $ 21,812,514 | $ 25,888,608 | $ 24,262,577 | $ 22,980,047 | $ 24,079,023 | $ 25,368,884 | $ 23,718,623 | $ 27,058,613 | $ 97,249,109 | $ 94,943,746 | $ 100,225,143 |
Ethanol Sales | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenues | 75,541,437 | 72,664,310 | |||||||||||||
Modified Distillers Grains Sales | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenues | 3,874,384 | 3,323,857 | |||||||||||||
Dried Distillers Grains Sales | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenues | 14,700,718 | 15,641,622 | |||||||||||||
Corn Oil Sales | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenues | $ 3,132,570 | $ 3,313,957 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Summary of Contract Assets and Liabilities) (Details) - USD ($) | Oct. 31, 2019 | Oct. 31, 2018 |
Accounting Policies [Abstract] | ||
Accounts receivable | $ 2,643,352 | $ 1,061,970 |
Short term contract liabilities | $ 4,947 | $ 0 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Schedule of Property, Plant and Equipment) (Details) | 12 Months Ended |
Oct. 31, 2019 | |
Land improvements | Minimum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 15 |
Land improvements | Maximum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 20 |
Buildings | Minimum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 10 |
Buildings | Maximum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 20 |
Office equipment | Minimum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 5 |
Office equipment | Maximum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 5 |
Plant and process equipment | Minimum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 10 |
Plant and process equipment | Maximum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 20 |
Vehicles | Minimum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 7 |
Vehicles | Maximum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 7 |
Inventories (Details)
Inventories (Details) - USD ($) | Oct. 31, 2019 | Oct. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,801,255 | $ 2,339,767 |
Spare parts and supplies | 3,384,360 | 3,118,195 |
Work in process | 743,850 | 752,454 |
Finished goods | 437,891 | 1,858,275 |
Total | $ 7,367,356 | $ 8,068,691 |
Inventories (Narrative) (Detail
Inventories (Narrative) (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Inventory Disclosure [Abstract] | ||
Inventory write-down | $ 21,000 | $ 239,000 |
Derivative Instruments (Schedul
Derivative Instruments (Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position) (Details) - USD ($) | Oct. 31, 2019 | Oct. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 469,740 | $ 942,885 |
Not designated as hedging instrument | Commodity Contract | ||
Derivatives, Fair Value [Line Items] | ||
In gain position | 124,069 | 0 |
In loss position | (775,887) | (2,280,280) |
Deposits with broker | $ 1,121,558 | $ 3,223,165 |
Derivative Instruments (Sched_2
Derivative Instruments (Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position) (Details) - Not designated as hedging instrument - USD ($) | 12 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2017 | |
Ethanol contracts | Revenues | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivative | $ (240,284) | $ (81,032) | $ 568,715 |
Corn contracts | Cost of goods sold | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivative | (835,456) | (149,323) | 1,751,018 |
Natural gas contracts | Cost of goods sold | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivative | $ 21,833 | $ 38,137 | $ 11,267 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - Commodity Contract - USD ($) | Oct. 31, 2019 | Oct. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
In gain position | $ 124,069 | $ 0 |
In loss position | (775,887) | (2,280,280) |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
In gain position | 4,538 | 0 |
In loss position | (4,375) | (37,485) |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
In gain position | 119,531 | 0 |
In loss position | (771,512) | (2,242,795) |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
In gain position | 0 | 0 |
In loss position | $ 0 | $ 0 |
Investment in RPMG (Details)
Investment in RPMG (Details) - Renewable Fuels Marketing Group (RPMG) - USD ($) | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Schedule of Equity Method Investments [Line Items] | ||
Current assets | $ 181,920,147 | $ 165,666,359 |
Other assets | 876,852 | 1,068,488 |
Current liabilities | 152,492,824 | 135,448,249 |
Long-term liabilities | 14,000 | 31,000 |
Members' equity | 30,290,175 | 31,255,598 |
Revenue | 3,244,543,605 | 3,070,802,183 |
Net income | $ 1,677,577 | $ 2,099,285 |
Debt Financing (Schedule of Lon
Debt Financing (Schedule of Long-term Debt) (Details) - USD ($) | Oct. 31, 2019 | Oct. 31, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 9,999,000 | $ 10,000,000 |
Less debt issuance costs | (25,137) | (62,193) |
Less amounts due within one year | (2,729,739) | (2,715,436) |
Net long-term debt | 7,244,124 | 7,222,371 |
AgStar Financial Services, PCA | Notes Payable to Banks | Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 3,500,000 | 6,500,000 |
AgStar Financial Services, PCA | Notes Payable to Banks | Term Revolving Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 6,499,000 | $ 3,500,000 |
Debt Financing (Narrative) (Det
Debt Financing (Narrative) (Details) | 12 Months Ended | ||
Oct. 31, 2019USD ($) | Apr. 20, 2018USD ($) | Jan. 22, 2016USD ($) | |
Debt Instrument [Line Items] | |||
Variable rate term loan (compeer) | $ 9,973,863 | ||
AgStar Financial Services, PCA | |||
Debt Instrument [Line Items] | |||
Debt covenant, minimum debt service coverage ratio | 1.25 | ||
Debt covenant, minimum working capital | $ 8,250,000 | ||
Annual capital expenditures | 5,000,000 | ||
Notes Payable to Banks | AgStar Financial Services, PCA | Term Loan | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 15,000,000 | $ 15,000,000 | |
Effective interest rate (as a percent) | 5.30% | ||
Periodic principal payment | $ 250,000 | ||
Variable rate term loan (compeer) | $ 3,500,000 | ||
Notes Payable to Banks | AgStar Financial Services, PCA | Term Revolving Loan | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 20,000,000 | $ 15,000,000 | |
Effective interest rate (as a percent) | 5.30% | ||
Term revolving loan (compeer) | $ 6,499,000 | ||
Notes Payable to Banks | AgStar Financial Services, PCA | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Capacity available for trade purchases | $ 20,000,000 | ||
75 Percent of Net Income | |||
Debt Instrument [Line Items] | |||
Debt covenant, distribution to members as percentage of net income (as a percent) | 75.00% | ||
75 Percent of Net Income | AgStar Financial Services, PCA | |||
Debt Instrument [Line Items] | |||
Debt covenant, minimum working capital | $ 8,250,000 | ||
100 Percent of Net Income | |||
Debt Instrument [Line Items] | |||
Debt covenant, distribution to members as percentage of net income (as a percent) | 100.00% | ||
100 Percent of Net Income | AgStar Financial Services, PCA | |||
Debt Instrument [Line Items] | |||
Debt covenant, minimum working capital | $ 11,000,000 | ||
100 Percent of Net Income | Notes Payable to Banks | AgStar Financial Services, PCA | Term Loan | |||
Debt Instrument [Line Items] | |||
Debt covenant, distribution to members term, outstanding balance | $ 0 | ||
London Interbank Offered Rate (LIBOR) [Member] | Notes Payable to Banks | AgStar Financial Services, PCA | Term Loan | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 3.25% | ||
London Interbank Offered Rate (LIBOR) [Member] | Notes Payable to Banks | AgStar Financial Services, PCA | Term Revolving Loan | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 3.25% |
Debt Financing (Schedule of Mat
Debt Financing (Schedule of Maturities of Long-Term Debt) (Details) - USD ($) | Oct. 31, 2019 | Oct. 31, 2018 |
Principal | ||
2020 | $ 2,750,000 | |
2021 | 750,000 | |
2022 | 0 | |
2023 | 6,499,000 | |
Long-term debt, principal | 9,999,000 | $ 10,000,000 |
Debt Issuance Costs | ||
2020 | (20,261) | |
2021 | (4,876) | |
2022 | 0 | |
2023 | 0 | |
Long-term debt, debt issuance costs | (25,137) | $ (62,193) |
Total | ||
2020 | 2,729,739 | |
2021 | 745,124 | |
2022 | 0 | |
2023 | 6,499,000 | |
Long-term debt, total | $ 9,973,863 |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | ||
Oct. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2017 | |
Leases [Abstract] | |||
Operating leases, rent expense | $ 276,151 | $ 295,920 | $ 295,920 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||
2020 | 168,480 | ||
2021 | 168,480 | ||
2022 | 168,480 | ||
2023 | 168,480 | ||
2024 | 112,320 | ||
Total | $ 786,240 |
Members' Equity (Details)
Members' Equity (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Oct. 31, 2019 | Apr. 30, 2019 | Oct. 31, 2018 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2017 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Common stock, shares authorized (in shares) | 10,000 | 10,000 | ||||
Stock repurchased during period (in shares) | 4 | 5 | 2 | 78.5 | ||
Share price (in dollars per share) | $ 8,000 | |||||
Payments for repurchase of common stock | $ 32,000 | $ 39,200 | $ 16,000 | $ 550,000 | ||
Repurchase of Units, One | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchased during period (in shares) | 1 | |||||
Share price (in dollars per share) | $ 7,200 | $ 7,200 | ||||
Payments for repurchase of common stock | $ 7,200 | |||||
Repurchase of Units, Two | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchased during period (in shares) | 2 | |||||
Share price (in dollars per share) | $ 8,000 | $ 8,000 | ||||
Payments for repurchase of common stock | $ 16,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | Oct. 31, 2019 | Oct. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Financial statement basis of total assets | $ 74,022,657 | $ 79,546,941 |
Derivative instruments - commodities | 651,819 | 2,280,280 |
Organizational and start-up costs | 1,255,034 | 1,519,252 |
Book to tax depreciation | (42,331,766) | (46,287,191) |
Income tax basis of total assets | 33,597,744 | 37,059,282 |
Financial statement basis of total liabilities | 18,038,206 | 15,249,054 |
Less: Accrued Expenses | 403,200 | 403,200 |
Income tax basis of total liabilities | $ 17,635,006 | $ 14,845,854 |
Commitments, Contingencies an_3
Commitments, Contingencies and Concentrations (Related Party) (Details) - USD ($) | Jul. 27, 2016 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2017 |
Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Related party fees; percentage of total | 2.00% | |||
Related party contract termination notice (in days) | 120 days | |||
Maximum | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Marketing expense per unit, related parties | $ 2 | |||
Minimum | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Marketing expense per unit, related parties | 1.50 | |||
Renewable Fuels Marketing Group (RPMG) | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related parties | 75,781,721 | $ 72,745,341 | $ 81,196,577 | |
Accounts receivable, related parties | $ 2,217,594 | $ 236,763 | ||
Grain Origination Agreement | ||||
Related Party Transaction [Line Items] | ||||
Initial term | 5 years | |||
Successive term | 1 year |
Commitments, Contingencies an_4
Commitments, Contingencies and Concentrations (Forward Contract) (Details) lb in Thousands, gal in Thousands, bu in Thousands, MMBTU in Thousands | Oct. 31, 2019bugalTlbMMBTU$ / lb$ / T$ / gal$ / bu$ / MMBTU |
Dried Distillers Grains Sales | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | 8,800 |
Modified Distillers Grains Sales | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | 29,600 |
Corn oil | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | lb | 1,056 |
Corn contracts | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | bu | 643 |
Natural gas contracts | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | MMBTU | 2,968 |
Denaturant | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | gal | 101 |
Basis Contracts | Corn contracts | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | bu | 190 |
Priced Contracts | Dried Distillers Grains Sales | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | 8,800 |
Derivative, average forward price | $ / T | 133.70 |
Priced Contracts | Modified Distillers Grains Sales | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | 29,600 |
Derivative, average forward price | $ / T | 75.22 |
Priced Contracts | Corn oil | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | lb | 1,056 |
Derivative, average forward price | $ / lb | 0.24 |
Priced Contracts | Corn contracts | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | bu | 453 |
Derivative, average forward price | $ / bu | 3.81 |
Priced Contracts | Natural gas contracts | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | MMBTU | 2,968 |
Derivative, average forward price | $ / MMBTU | 2.53 |
Priced Contracts | Denaturant | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | gal | 101 |
Derivative, average forward price | $ / gal | 1.35 |
Index contracts | Dried Distillers Grains Sales | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | 0 |
Index contracts | Modified Distillers Grains Sales | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | 0 |
Index contracts | Corn oil | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | lb | 0 |
Index contracts | Natural gas contracts | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | MMBTU | 0 |
Index contracts | Denaturant | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | gal | 0 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Oct. 31, 2019 | Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2017 | Oct. 31, 2019 | Oct. 31, 2018 | Oct. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||
Revenues | $ 26,015,463 | $ 25,605,525 | $ 22,939,711 | $ 22,688,410 | $ 21,812,514 | $ 25,888,608 | $ 24,262,577 | $ 22,980,047 | $ 24,079,023 | $ 25,368,884 | $ 23,718,623 | $ 27,058,613 | $ 97,249,109 | $ 94,943,746 | $ 100,225,143 |
Gross profit (loss) | (919,628) | (175,483) | (1,616,624) | (1,798,887) | (3,483,567) | (1,527,385) | 2,283,325 | (51,696) | 770,036 | 1,195,537 | 591,457 | 4,191,810 | (4,510,622) | (2,779,323) | 6,748,840 |
Operating income (loss) | (1,644,443) | (1,078,065) | (2,428,181) | (2,560,218) | (4,182,000) | (2,186,352) | 1,492,581 | (794,645) | 107,619 | 596,246 | (162,585) | 3,467,790 | (7,710,907) | (5,670,416) | 4,009,070 |
Net income (loss) | $ (1,726,481) | $ (1,248,542) | $ (2,579,501) | $ (2,719,712) | $ (4,210,806) | $ (2,330,905) | $ 1,335,482 | $ (953,195) | $ 33,944 | $ 503,476 | $ (308,283) | $ 3,290,175 | $ (8,274,236) | $ (6,159,424) | $ 3,519,312 |
Basic and diluted earnings per unit (in dollars per share) | $ (359.08) | $ (259.68) | $ (536.28) | $ (565.19) | $ (874.69) | $ (484.19) | $ 277.42 | $ (198.02) | $ 7.05 | $ 104.59 | $ (64.04) | $ 672.56 | $ (1,720.57) | $ (1,279.48) | $ 728.03 |