Cover
Cover - USD ($) $ in Thousands | 12 Months Ended | ||
Oct. 31, 2021 | Jan. 19, 2022 | Apr. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --10-31 | ||
Document Period End Date | Oct. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 000-53588 | ||
Entity Registrant Name | HIGHWATER ETHANOL, LLC | ||
Entity Incorporation, State or Country Code | MN | ||
Entity Tax Identification Number | 20-4798531 | ||
Entity Address, Address Line One | 24500 US Highway 14, | ||
Entity Address, City or Town | Lamberton, | ||
Entity Address, State or Province | MN | ||
Entity Address, Postal Zip Code | 56152 | ||
City Area Code | 507 | ||
Local Phone Number | 752-6160 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 41,220 | ||
Entity Common Stock, Shares Outstanding (in shares) | 4,770 | ||
Documents Incorporated by Reference | The registrant has incorporated by reference into Part III of this Annual Report on Form 10-K portions of its definitive proxy statement to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year covered by this Annual Report. | ||
Entity Central Index Key | 0001371451 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Balance Sheets
Balance Sheets - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 7,549,008 | $ 667,317 |
Derivative instruments | 368,269 | 260,397 |
Accounts receivable | 7,788,574 | 3,797,905 |
Inventories | 14,748,142 | 10,677,970 |
Prepaids and other | 719,699 | 301,747 |
Total current assets | 31,173,692 | 15,705,336 |
Property and Equipment | ||
Land and land improvements | 12,836,332 | 12,836,332 |
Buildings | 38,848,218 | 38,818,532 |
Office equipment | 1,171,866 | 1,164,313 |
Plant and process equipment | 86,425,155 | 79,087,375 |
Vehicles | 123,779 | 123,779 |
Construction in progress | 193,244 | 2,547,117 |
Gross property and equipment | 139,598,594 | 134,577,448 |
Less accumulated depreciation | (90,919,014) | (81,868,902) |
Net property and equipment | 48,679,580 | 52,708,546 |
Other Assets | ||
Investments | 3,452,027 | 3,113,078 |
Right of use asset - operating leases | 417,001 | 558,300 |
Right of use asset - finance leases | 1,098,351 | 1,235,645 |
Other | 1,208,232 | 0 |
Deposits | 312,269 | 409,283 |
Total other assets | 6,487,880 | 5,316,306 |
Total Assets | 86,341,152 | 73,730,188 |
Current Liabilities | ||
Accounts payable | 16,790,834 | 8,613,714 |
Accrued expenses | 1,272,463 | 1,047,786 |
Current maturities of long-term debt | 2,991,291 | 2,835,045 |
Current portion of operating lease liability | 149,271 | 141,300 |
Current portion of finance lease liability | 118,220 | 111,908 |
Current liabilities | 21,322,079 | 12,749,753 |
Long-Term Liabilities | ||
Long term debt | 499,000 | 9,845,051 |
Operating lease liability | 267,730 | 417,000 |
Finance lease liability | 1,036,880 | 1,155,099 |
Total Long-Term Liabilities | 1,803,610 | 11,417,150 |
Commitments and Contingencies (Note 10) | ||
Members' Equity | ||
Members' equity, 4,782 and 4,798 units outstanding, respectively | 63,215,463 | 49,563,285 |
Total Liabilities and Members’ Equity | $ 86,341,152 | $ 73,730,188 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - shares | Oct. 31, 2021 | Oct. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Members' equity, units outstanding (in shares) | 4,782 | 4,798 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Income Statement [Abstract] | |||
Revenues | $ 158,717,536 | $ 97,256,146 | $ 97,249,109 |
Cost of Goods Sold | 143,172,419 | 99,813,857 | 101,759,731 |
Gross Profit (Loss) | 15,545,117 | (2,557,711) | (4,510,622) |
Operating Expenses | 3,234,524 | 3,552,328 | 3,200,285 |
Operating Profit (Loss) | 12,310,593 | (6,110,039) | (7,710,907) |
Other Income (Expense) | |||
Interest income | 4,763 | 3,301 | 8,720 |
Other income | 1,015,720 | 288,518 | 181,172 |
Interest expense | (516,338) | (687,101) | (872,491) |
Gain on debt extinguishment | 712,200 | 0 | 0 |
Income from equity method investments | 213,990 | 139,155 | 119,270 |
Total other income (expense), net | 1,430,335 | (256,127) | (563,329) |
Net Income (Loss) | $ 13,740,928 | $ (6,366,166) | $ (8,274,236) |
Weighted Average Units Outstanding (in shares) | 4,788 | 4,803 | 4,809 |
Net Income (Loss) Per Unit, basic (in dollars per share) | $ 2,869.87 | $ (1,325.46) | $ (1,720.57) |
Net Income (Loss) Per Unit, diluted (in dollars per share) | 2,869.87 | (1,325.46) | (1,720.57) |
Distributions Per Unit (in dollars per share) | $ 0 | $ 0 | $ 0 |
Statements of Changes in Member
Statements of Changes in Members' Equity - USD ($) | Total | Members' Equity |
Members' Equity, beginning balance at Oct. 31, 2018 | $ 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 | |
Members' Equity [Roll Forward] | ||
Net income (loss) | (6,366,166) | (6,366,166) |
Member unit repurchases | (55,000) | |
Members' Equity, ending balance at Oct. 31, 2020 | 49,563,285 | 49,563,285 |
Members' Equity [Roll Forward] | ||
Net income (loss) | 13,740,928 | 13,740,928 |
Member unit repurchases | (88,750) | |
Members' Equity, ending balance at Oct. 31, 2021 | $ 63,215,463 | $ 63,215,463 |
Statements of Changes in Memb_2
Statements of Changes in Members' Equity (Parenthetical) - shares | 3 Months Ended | 12 Months Ended | |||||||
Oct. 31, 2021 | Jul. 31, 2021 | Apr. 30, 2021 | Jan. 31, 2021 | Jul. 31, 2020 | Jan. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Members' Equity [Abstract] | |||||||||
Member units repurchased during period (in shares) | 3 | 2 | 5 | 6 | 7 | 2 | 16 | 9 | 5 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Cash Flows from Operating Activities | |||
Net income (loss) | $ 13,740,928 | $ (6,366,166) | $ (8,274,236) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations | |||
Depreciation and amortization | 9,751,569 | 9,215,642 | 8,947,039 |
Earnings in excess of distributions (distributions in excess of earnings) from equity method investments | (108,990) | 74,891 | 272,049 |
Gain on debt extinguishment | (712,200) | 0 | 0 |
Non-cash patronage income | (229,959) | (435,703) | (249,058) |
Change in working capital components | |||
Accounts receivable | (3,990,669) | (835,928) | (1,645,848) |
Inventories | (4,070,172) | (3,310,614) | 701,335 |
Derivative instruments | (107,872) | 209,343 | 473,146 |
Prepaids and other | (320,938) | (353,330) | (74,648) |
Accounts payable | 8,233,490 | 1,662,253 | 2,813,174 |
Accrued expenses | 224,677 | (108,252) | (5,302) |
Net cash provided by (used in) operating activities | 22,409,864 | (247,864) | 2,957,651 |
Cash Flows from Investing Activities | |||
Capital expenditures | (6,827,516) | (3,275,201) | (1,709,039) |
Net cash used in investing activities | (6,827,516) | (3,275,201) | (1,709,039) |
Cash Flows from Financing Activities | |||
Payments on long-term debt | (45,500,000) | (16,500,000) | (14,001,000) |
Proceeds from long-term debt | 37,000,000 | 19,212,200 | 14,000,000 |
Payments on finance lease liability | (111,907) | (105,932) | 0 |
Member unit repurchases | (88,750) | (55,000) | (39,200) |
Net cash provided by (used in) financing activities | (8,700,657) | 2,551,268 | (40,200) |
Net Increase (decrease) in Cash and Cash Equivalents | 6,881,691 | (971,797) | 1,208,412 |
Cash and cash equivalents – Beginning of Period | 667,317 | 1,639,114 | 430,702 |
Cash and cash equivalents – End of Period | 7,549,008 | 667,317 | 1,639,114 |
Supplemental Cash Flow Information | |||
Cash paid for interest expense | 478,473 | 568,205 | 761,920 |
Supplemental Disclosure of Noncash Financing and Investing Activities | |||
Capital expenditures included in accounts payable | 0 | 56,370 | 13,214 |
Establishment of lease liability and right of use asset | $ 0 | $ 2,064,994 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Oct. 31, 2021 | |
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 an ethanol plant near Lamberton, Minnesota. The ethanol plant was constructed as a 50 million gallon per year nameplate ethanol plant. The plant currently operates in excess of its nameplate capacity due to the approval of air permit by the Minnesota Pollution Control Agency which allows for 70.2 million gallons of denatured ethanol per 12-month rolling average. The Company produces and sells, primarily through third-party professional marketers, 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 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 are required as part of the 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 Company generally sells ethanol and related products pursuant to marketing agreements. The Company’s products are shipped FOB shipping point. 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 control and has assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. For ethanol sales by single manifest railcars and trucks, and distillers grains sales, control transfers when loaded into the rail car. Beginning December 15, 2020, for ethanol sales by unit trains, control transfers once the last railcar of the unit train has loaded and the shipping documentation transferred to the marketer. 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, 2021, and 2020: Fiscal Year Ended October 31, 2021 Fiscal Year Ended October 31, 2020 Revenue Sources Amount Amount Ethanol Sales $ 122,902,729 $ 75,161,967 Modified Distillers Grains Sales 4,899,649 4,163,426 Dried Distillers Grains Sales 21,090,325 14,123,366 Corn Oil Sales 9,824,833 3,807,387 Total Revenues $ 158,717,536 $ 97,256,146 Contract assets and contract liabilities: 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. The Company had no short term contract liabilities from contracts with customers at October 31, 2021 and October 31, 2020. 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 ethanol, corn 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. Ethanol derivative changes in fair market value are included in revenue. 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, 2021 and 2020, the Company has determined that amounts are collectible and an allowance was not considered necessary. Inventories Inventories consist of raw materials, spare parts and supplies, work in process and finished goods. Raw materials and spare parts 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 7 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 identified a triggering event during the year ended October 31, 2020 and performed an impairment test. The Company's analysis concluded there was no impairment. The Company has not recorded any impairment as of October 31, 2021 and 2020. 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, 2021 and 2020 due to the short maturity nature of these instruments (Level 2). Derivative instruments 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). 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 (loss) from equity method investments based on the most recent reliable data. Therefore, the net income (loss) which is reported in the Company’s statements of operations for the years ended October 31, 2021, 2020 and 2019 is based on the investee's results of operations for the twelve month periods ended September 30, 2021, 2020 and 2019, respectively. The Company has cost method of investments in cooperatives. The corresponding patronage income is recorded in Cost of Goods Sold. Net Income (Loss) per Unit Basic net loss per unit is computed by dividing net loss by the weighted average number of members’ units outstanding during the period. Diluted net loss per unit is computed by dividing net 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 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 for jurisdictions in which it files. 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 manufacturing 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. Recently Issued or Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326). The ASU requires financial assets measured at amortized cost (including trade receivables) to be presented at the net amount expected to be collected, through an allowance for credit losses that are expected to occur over the remaining life of the asset, rather than incurred losses. The Company adopted this guidance, effective November 1, 2020. The Company evaluated the impact of the new guidance and determined that adoption of this guideline has no material impact on our financial statements. |
Uncertainties
Uncertainties | 12 Months Ended |
Oct. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Uncertainties | UNCERTAINTIESThe 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.The ethanol industry experienced adverse conditions throughout most of 2018 and 2019 as a result of industry-wide record low ethanol prices due to reduced demand and high industry inventory levels. These adverse conditions were continued into 2020 and were compounded by the COVID-19 pandemic resulting in negative operating margins, lower cash flow from operations and net operating losses for those periods. Ethanol demand rebounded in 2021 due to the lifting of COVID-19 restrictions in many areas having a positive effect on ethanol prices resulting in positive operating margins, higher cash flow from operations and net operating income for the period. However, the Company continues to monitor evolving COVID-19 developments and the potential effect on demand for our products. |
Inventories
Inventories | 12 Months Ended |
Oct. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIESInventories consisted of the following at: October 31, 2021 October 31, 2020 Raw materials $ 8,471,843 $ 5,673,918 Spare parts and supplies 4,093,108 3,543,395 Work in process 1,074,341 804,455 Finished goods 1,108,850 656,202 Total $ 14,748,142 $ 10,677,970 The Company did not record a lower of cost or net realizable value write-down on inventory for the fiscal years ended October 31, 2021 and 2020. |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Oct. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS The Company enters 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 are not designated as effective hedges for accounting purposes. Commodity Contracts Management expects all open positions outstanding as of October 31, 2021 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 2021 2020 Corn, natural gas and ethanol contracts In loss position (915,027) (889,750) Deposits with broker 1,283,296 1,150,147 Derivative instruments $ 368,269 $ 260,397 These contracts and related deposits are subject to a master netting arrangements and, therefore, are presented on a net basis on the balance sheet. 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 2021 2020 2019 Ethanol contracts Revenues 953 (622,585) (240,284) Corn contracts Cost of goods sold 352,596 (845,013) (835,456) Natural gas contracts Cost of goods sold 24,428 11,240 21,833 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Oct. 31, 2021 | |
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, 2021 Level 1 Level 2 Level 3 Derivative instrument - commodities In gain position $ — $ — $ — $ — In loss position $ (915,027) $ (72,129) $ (842,898) $ — Fair Value as of Fair Value Measurement Using October 31, 2020 Level 1 Level 2 Level 3 Derivative instrument - commodities In gain position $ — $ — $ — $ — In loss position $ (889,750) $ (71,037) $ (818,731) $ — 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, 2021 | |
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, 2021 September 30, 2020 Current assets $ 279,168,444 $ 171,906,142 Other assets 680,119 715,967 Current liabilities 248,510,431 143,817,704 Long-term liabilities — — Members' equity 31,365,670 28,869,485 Revenue 4,782,836,390 3,083,913,298 Net income 3,371,185 579,310 |
Debt Financing
Debt Financing | 12 Months Ended |
Oct. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt Financing | DEBT FINANCING Long-term debt consists of the following at: October 31, 2021 October 31, 2020 Term Revolving Loan 499,000 5,999,000 2020 Term Loan 3,000,000 6,000,000 PPP Loan — 712,200 Total 3,499,000 12,711,200 Less debt issuance costs (8,709) (31,104) Less amounts due within one year (2,991,291) (2,835,045) Net long-term debt $ 499,000 $ 9,845,051 Bank Financing The Company has a loan facility with Compeer Financial f/k/a AgStar Financial Services, PCA ("Compeer") that includes a $20,000,000 Term Revolving Loan and a term loan with an original amount of $6,000,000 (the "2020 Term Loan") to be used to fund certain improvements to the ethanol production facility. On March 15, 2021, the Company amended its loan facility to add a Revolving Line of Credit Loan. The specifics of the Revolving Line of Credit Loan are set forth below. The loan facility with Compeer is secured by substantially all business assets and also subjects the Company to various financial and non-financial covenants. Term Revolving Loan The Term Revolving Loan was for up to $20,000,000 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, 2021 was 3.33%. 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 $499,000 at October 31, 2021. The Company pays interest at a rate of 1.50% on amounts outstanding for letters of credit which also reduce the amount available under the Term Revolving Loan. The Company had no letters of credit outstanding at October 31, 2021. The Company is also required to pay unused commitment fees for the Term Revolving Loan. 2020 Term Loan The 2020 Term Loan is for up to $6,000,000 with a variable interest rate based on the Wall Street Journal's Prime Rate plus 45 basis points with no minimum interest rate. The applicable interest rate at October 31, 2021 was 3.70%. Monthly principal payments are due on the 2020 Term Loan of approximately $250,000 plus accrued interest with payments of all amounts outstanding due on September 14, 2022. The outstanding balance on this note was $3,000,000 at October 31, 2021. Subsequent to the fiscal year end, the Company paid off the loan balance. Revolving Line of Credit Loan The Revolving Line of Credit Loan is for an amount equal to the borrowing base, with a maximum limit of $10,000,000, with a variable interest rate based on at the 30-day LIBOR rate plus 325 basis points with no minimum interest rate. The amount available to borrow per the borrowing base calculations at October 31, 2021 was approximately $3,400,000. The applicable interest rate at October 31, 2021 was 3.33%. The Revolving Line of Credit Loan may be advanced, repaid and re-borrowed during the term. Monthly interest payments are due on the Revolving Line of Credit Loan with payment of all amounts outstanding due on March 15, 2022. The outstanding balance on this note was $0 at October 31, 2021. The Company is also required to pay unused commitment fees for the Revolving Line of Credit Loan. 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 2020 Term Loan is $0. The Company believes that it will be in compliance with its financial covenants for at least the next 12 months. PPP Loan In March 2020, Congress passed a stimulus bill called the CARES Act to provide economic relief related to the COVID-19 pandemic. One of the programs established by the CARES Act is the Paycheck Protection Program ("PPP"), authorizing loans to small business for use in paying employees that continue to work throughout the COVID-19 pandemic and for qualifying rent, utilities and interest on mortgages. Loans obtained through the PPP are administered by the Small Business Administration and eligible to be forgiven as long as the Company met the requirements and the proceeds are used for qualifying purposes and other conditions are met. On April 14, 2020, the Company was awarded a PPP loan in the amount of $712,200. In January 2021, the Company received notification from the Small Business Administration that all loan proceeds received by the Company were forgiven. Due to the forgiveness of the loan, the Company recorded on a gain on debt extinguishment in the statement of operations for $712,000 for the fiscal year ended October 31, 2021. The estimated maturities of the long-term debt at October 31, 2021 are as follows: Fiscal Year Principal Debt Issuance Costs Total 2022 3,000,000 (8,709) 2,991,291 2023 499,000 — 499,000 Long-term debt $ 3,499,000 $ (8,709) $ 3,490,291 |
Leases
Leases | 12 Months Ended |
Oct. 31, 2021 | |
Leases [Abstract] | |
Leases | LEASES The Company leases rail cars for its facility to transport dried distillers grains to its end customers. We classified these identified assets as operating leases after assessing the terms of the leases under lease classification guidance. The Company has a contract for use of a natural gas pipeline which transports natural gas from the Northern Natural Gas pipeline to the Company’s facility. This natural gas line has no alternate use and is specifically for the benefit of the Company. The contract has minimum volume requirements as well as a fixed monthly fee. This contract meets the definition of a lease and is classified as a finance lease. Right of use assets and lease liabilities are recognized based on the present value of lease payments over the lease term. The discount rate used in determining the lease liability for each individual lease is the Company's estimated incremental borrowing rate. An incremental borrowing rate of 5.5% was utilized for each of the Company's leases. The Company determines if an arrangement is a lease or contains a lease at inception. The Company’s operating and finance leases have remaining lease terms of approximately 3 years and 9 years, respectively. These leases include options to extend the lease. When it is reasonably certain the Company will exercise those options, the Company will update the remaining terms of the leases. The Company does not have lease arrangements with residual value guarantees, sale leaseback terms or material restrictive covenants. The following tables summarizes the remaining maturities of the Company's operating and financing lease liabilities as of October 31, 2021: For the Period Ending October 31, Operating Leases Finance Leases 2022 $ 168,480 $ 178,800 2023 168,480 178,800 2024 112,320 178,800 2025 — 178,800 2026 — 178,800 Thereafter — 536,400 Totals 449,280 1,430,400 Amount representing interest (32,279) (275,300) Lease liability $ 417,001 $ 1,155,100 Lease Cost October 31, 2021 Operating lease cost $ 168,480 Short term lease cost 73,195 Finance lease cost Amortization of leased assets 143,267 Interest on lease liabilities 66,893 Net lease cost $ 451,835 |
Leases | LEASES The Company leases rail cars for its facility to transport dried distillers grains to its end customers. We classified these identified assets as operating leases after assessing the terms of the leases under lease classification guidance. The Company has a contract for use of a natural gas pipeline which transports natural gas from the Northern Natural Gas pipeline to the Company’s facility. This natural gas line has no alternate use and is specifically for the benefit of the Company. The contract has minimum volume requirements as well as a fixed monthly fee. This contract meets the definition of a lease and is classified as a finance lease. Right of use assets and lease liabilities are recognized based on the present value of lease payments over the lease term. The discount rate used in determining the lease liability for each individual lease is the Company's estimated incremental borrowing rate. An incremental borrowing rate of 5.5% was utilized for each of the Company's leases. The Company determines if an arrangement is a lease or contains a lease at inception. The Company’s operating and finance leases have remaining lease terms of approximately 3 years and 9 years, respectively. These leases include options to extend the lease. When it is reasonably certain the Company will exercise those options, the Company will update the remaining terms of the leases. The Company does not have lease arrangements with residual value guarantees, sale leaseback terms or material restrictive covenants. The following tables summarizes the remaining maturities of the Company's operating and financing lease liabilities as of October 31, 2021: For the Period Ending October 31, Operating Leases Finance Leases 2022 $ 168,480 $ 178,800 2023 168,480 178,800 2024 112,320 178,800 2025 — 178,800 2026 — 178,800 Thereafter — 536,400 Totals 449,280 1,430,400 Amount representing interest (32,279) (275,300) Lease liability $ 417,001 $ 1,155,100 Lease Cost October 31, 2021 Operating lease cost $ 168,480 Short term lease cost 73,195 Finance lease cost Amortization of leased assets 143,267 Interest on lease liabilities 66,893 Net lease cost $ 451,835 |
Members' Equity
Members' Equity | 12 Months Ended |
Oct. 31, 2021 | |
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 first quarter of our fiscal year ended October 31, 2021, the Company repurchased 6 of its membership units at a price of $5,500 per unit for a total purchase price of $33,000. During the second quarter of our fiscal year ended October 31, 2021, the Company repurchased 5 of its membership units at a price of $5,500 per unit for a total purchase price of $27,500. During the third quarter of our fiscal year ended October 31, 2021, the Company repurchased 2 of its membership units at a price of $5,500 per unit for a total purchase price of $11,000. During the fourth quarter of our fiscal year ended October 31, 2021, the Company repurchased 3 of its membership units at a price of $5,750 per unit for a total purchase price of $17,250. |
Commitments, Contingencies and
Commitments, Contingencies and Concentrations | 12 Months Ended |
Oct. 31, 2021 | |
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 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, 2021, 2020 and 2019 was $123,344,552, $69,682,187, $75,781,721 respectively. Accounts receivable under the agreement as of October 31, 2021 and 2020 were $6,353,103 and $2,677,213 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. Revenue recognized under this agreement for the years ended October 31, 2021, 2020 and 2019 was $21,108,135 and $14,123,366, $14,700,718 respectively. Accounts receivable under the agreement as of October 31, 2021 and 2019 were $520,821 and $474,991 respectively. 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. Revenue recognized under this agreement for the years ended October 31, 2021 and 2020 was $9,867,789 and $3,836,751 respectively. Accounts receivable under the agreement as of October 31, 2021 and 2020 were $317,966 and $112,028 respectively. 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, 2021: Quantity Average Price Delivery Date Purchase of corn (in bushels): Basis Contracts 1,824,000 by 12/31/22 Priced Contracts 1,188,000 $ 5.13 by 1/31/23 Total 3,012,000 Purchase of natural gas (in dekatherms): Priced contracts 3,349,000 $ 2.88 by 10/31/24 Total 3,349,000 Purchase of denaturant (in gallons): Priced contracts 110,000 $ 2.07 by 11/30/21 Total 110,000 Sales of dry distillers grains (in tons): Priced contracts 8,500 $ 201.00 by 12/31/21 Total 8,500 Sales of modified distillers grains (in tons) Priced contracts 22,400 $ 98.00 by 8/31/22 Total 22,400 Sales of corn oil (in pounds) Priced contracts 1,789,000 $ 0.59 by 3/31/22 Total 1,789,000 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Oct. 31, 2021 | |
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, 2021 Revenues $ 28,435,747 $ 34,864,344 $ 46,988,806 $ 48,428,639 Gross Profit 288,818 4,515,280 6,923,891 3,817,128 Operating profit (Loss) (537,092) 3,718,220 6,097,163 3,032,302 Net income 163,638 4,344,633 6,074,771 3,157,886 Basic and diluted earnings per unit 34.14 907.21 1,269.28 660.37 First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Ended October 31, 2020 Revenues $ 27,184,024 $ 20,257,229 $ 24,238,999 $ 25,575,894 Gross Profit (Loss) (1,475,324) (2,817,586) 1,275,198 460,001 Operating profit (Loss) (2,495,845) (3,883,393) 497,484 (228,285) Net income (loss) (2,616,683) (3,951,590) 366,274 (164,167) Basic and diluted earnings (loss) per unit (544.35) (822.22) 76.29 (34.22) 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) 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. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Oct. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS.On November 17, 2021, the board of governors declared a cash distribution of $1,500 per membership unit to unit holders of record at the close of business on November 17, 2021, for a total distribution of $7,172,250. The distribution was paid on December 17, 2021. On January 19, 2022, the board of governors declared a cash distribution of $2,300 per membership unit to unit holders of record at the close of business on December 31, 2021, for a total distribution of $10,972,150. The Company expects to pay the distribution on or before February 28, 2022. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Oct. 31, 2021 | |
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 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 are required as part of the 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 Company generally sells ethanol and related products pursuant to marketing agreements. The Company’s products are shipped FOB shipping point. 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 control and has assumed the risks and rewards of ownership, prices are fixed or determinable and collectability is reasonably assured. For ethanol sales by single manifest railcars and trucks, and distillers grains sales, control transfers when loaded into the rail car. Beginning December 15, 2020, for ethanol sales by unit trains, control transfers once the last railcar of the unit train has loaded and the shipping documentation transferred to the marketer. 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, 2021, and 2020: Fiscal Year Ended October 31, 2021 Fiscal Year Ended October 31, 2020 Revenue Sources Amount Amount Ethanol Sales $ 122,902,729 $ 75,161,967 Modified Distillers Grains Sales 4,899,649 4,163,426 Dried Distillers Grains Sales 21,090,325 14,123,366 Corn Oil Sales 9,824,833 3,807,387 Total Revenues $ 158,717,536 $ 97,256,146 Contract assets and contract liabilities: 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. The Company had no short term contract liabilities from contracts with customers at October 31, 2021 and October 31, 2020. |
Shipping Costs | Shipping CostsShipping 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 ethanol, corn 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. Ethanol derivative changes in fair market value are included in revenue. 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. |
Inventories | Inventories Inventories consist of raw materials, spare parts and supplies, work in process and finished goods. Raw materials and spare parts 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 7 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. |
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, 2021 and 2020 due to the short maturity nature of these instruments (Level 2). Derivative instruments 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). |
Investments | 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 (loss) from equity method investments based on the most recent reliable data. Therefore, the net income (loss) which is reported in the Company’s statements of operations for the years ended October 31, 2021, 2020 and 2019 is based on the investee's results of operations for the twelve month periods ended September 30, 2021, 2020 and 2019, respectively. The Company has cost method of investments in cooperatives. The corresponding patronage income is recorded in Cost of Goods Sold. |
Net Income (Loss) per Unit | Net Income (Loss) per Unit Basic net loss per unit is computed by dividing net loss by the weighted average number of members’ units outstanding during the period. Diluted net loss per unit is computed by dividing net 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 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 for jurisdictions in which it files. |
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 manufacturing 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. |
Recently Issued or Adopted Accounting Pronouncements | Recently Issued or Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326). The ASU requires financial assets measured at amortized cost (including trade receivables) to be presented at the net amount expected to be collected, through an allowance for credit losses that are expected to occur over the remaining life of the asset, rather than incurred losses. The Company adopted this guidance, effective November 1, 2020. The Company evaluated the impact of the new guidance and determined that adoption of this guideline has no material impact on our financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
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, 2021, and 2020: Fiscal Year Ended October 31, 2021 Fiscal Year Ended October 31, 2020 Revenue Sources Amount Amount Ethanol Sales $ 122,902,729 $ 75,161,967 Modified Distillers Grains Sales 4,899,649 4,163,426 Dried Distillers Grains Sales 21,090,325 14,123,366 Corn Oil Sales 9,824,833 3,807,387 Total Revenues $ 158,717,536 $ 97,256,146 |
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 7 20 Vehicles 7 7 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventories consisted of the following at: October 31, 2021 October 31, 2020 Raw materials $ 8,471,843 $ 5,673,918 Spare parts and supplies 4,093,108 3,543,395 Work in process 1,074,341 804,455 Finished goods 1,108,850 656,202 Total $ 14,748,142 $ 10,677,970 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
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 2021 2020 Corn, natural gas and ethanol contracts In loss position (915,027) (889,750) Deposits with broker 1,283,296 1,150,147 Derivative instruments $ 368,269 $ 260,397 |
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 2021 2020 2019 Ethanol contracts Revenues 953 (622,585) (240,284) Corn contracts Cost of goods sold 352,596 (845,013) (835,456) Natural gas contracts Cost of goods sold 24,428 11,240 21,833 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
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, 2021 Level 1 Level 2 Level 3 Derivative instrument - commodities In gain position $ — $ — $ — $ — In loss position $ (915,027) $ (72,129) $ (842,898) $ — Fair Value as of Fair Value Measurement Using October 31, 2020 Level 1 Level 2 Level 3 Derivative instrument - commodities In gain position $ — $ — $ — $ — In loss position $ (889,750) $ (71,037) $ (818,731) $ — |
Investment in RPMG (Tables)
Investment in RPMG (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
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, 2021 September 30, 2020 Current assets $ 279,168,444 $ 171,906,142 Other assets 680,119 715,967 Current liabilities 248,510,431 143,817,704 Long-term liabilities — — Members' equity 31,365,670 28,869,485 Revenue 4,782,836,390 3,083,913,298 Net income 3,371,185 579,310 |
Debt Financing (Tables)
Debt Financing (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consists of the following at: October 31, 2021 October 31, 2020 Term Revolving Loan 499,000 5,999,000 2020 Term Loan 3,000,000 6,000,000 PPP Loan — 712,200 Total 3,499,000 12,711,200 Less debt issuance costs (8,709) (31,104) Less amounts due within one year (2,991,291) (2,835,045) Net long-term debt $ 499,000 $ 9,845,051 |
Schedule of Maturities of Long-term Debt | The estimated maturities of the long-term debt at October 31, 2021 are as follows: Fiscal Year Principal Debt Issuance Costs Total 2022 3,000,000 (8,709) 2,991,291 2023 499,000 — 499,000 Long-term debt $ 3,499,000 $ (8,709) $ 3,490,291 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Leases [Abstract] | |
Maturities of Operating Lease Liabilities | The following tables summarizes the remaining maturities of the Company's operating and financing lease liabilities as of October 31, 2021: For the Period Ending October 31, Operating Leases Finance Leases 2022 $ 168,480 $ 178,800 2023 168,480 178,800 2024 112,320 178,800 2025 — 178,800 2026 — 178,800 Thereafter — 536,400 Totals 449,280 1,430,400 Amount representing interest (32,279) (275,300) Lease liability $ 417,001 $ 1,155,100 |
Maturities of Financing Lease Liabilities | The following tables summarizes the remaining maturities of the Company's operating and financing lease liabilities as of October 31, 2021: For the Period Ending October 31, Operating Leases Finance Leases 2022 $ 168,480 $ 178,800 2023 168,480 178,800 2024 112,320 178,800 2025 — 178,800 2026 — 178,800 Thereafter — 536,400 Totals 449,280 1,430,400 Amount representing interest (32,279) (275,300) Lease liability $ 417,001 $ 1,155,100 |
Lease Cost | Lease Cost October 31, 2021 Operating lease cost $ 168,480 Short term lease cost 73,195 Finance lease cost Amortization of leased assets 143,267 Interest on lease liabilities 66,893 Net lease cost $ 451,835 |
Commitments, Contingencies an_2
Commitments, Contingencies and Concentrations (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Forward Contracts | Forward contracts are as follows at October 31, 2021: Quantity Average Price Delivery Date Purchase of corn (in bushels): Basis Contracts 1,824,000 by 12/31/22 Priced Contracts 1,188,000 $ 5.13 by 1/31/23 Total 3,012,000 Purchase of natural gas (in dekatherms): Priced contracts 3,349,000 $ 2.88 by 10/31/24 Total 3,349,000 Purchase of denaturant (in gallons): Priced contracts 110,000 $ 2.07 by 11/30/21 Total 110,000 Sales of dry distillers grains (in tons): Priced contracts 8,500 $ 201.00 by 12/31/21 Total 8,500 Sales of modified distillers grains (in tons) Priced contracts 22,400 $ 98.00 by 8/31/22 Total 22,400 Sales of corn oil (in pounds) Priced contracts 1,789,000 $ 0.59 by 3/31/22 Total 1,789,000 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Oct. 31, 2021 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Ended October 31, 2021 Revenues $ 28,435,747 $ 34,864,344 $ 46,988,806 $ 48,428,639 Gross Profit 288,818 4,515,280 6,923,891 3,817,128 Operating profit (Loss) (537,092) 3,718,220 6,097,163 3,032,302 Net income 163,638 4,344,633 6,074,771 3,157,886 Basic and diluted earnings per unit 34.14 907.21 1,269.28 660.37 First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal Year Ended October 31, 2020 Revenues $ 27,184,024 $ 20,257,229 $ 24,238,999 $ 25,575,894 Gross Profit (Loss) (1,475,324) (2,817,586) 1,275,198 460,001 Operating profit (Loss) (2,495,845) (3,883,393) 497,484 (228,285) Net income (loss) (2,616,683) (3,951,590) 366,274 (164,167) Basic and diluted earnings (loss) per unit (544.35) (822.22) 76.29 (34.22) 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) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) gal in Millions | 12 Months Ended | |
Oct. 31, 2021USD ($)segmentgal | Oct. 31, 2020USD ($) | |
Product Information [Line Items] | ||
Short term contract liabilities from contracts with customers | $ | $ 0 | $ 0 |
Current accounts receivable term (days or less) | 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 | |
Denatured Ethanol | ||
Product Information [Line Items] | ||
Annual production capacity | gal | 70.2 |
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, 2021 | Jul. 31, 2021 | Apr. 30, 2021 | Jan. 31, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Apr. 30, 2020 | Jan. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenues | $ 48,428,639 | $ 46,988,806 | $ 34,864,344 | $ 28,435,747 | $ 25,575,894 | $ 24,238,999 | $ 20,257,229 | $ 27,184,024 | $ 26,015,463 | $ 25,605,525 | $ 22,939,711 | $ 22,688,410 | $ 158,717,536 | $ 97,256,146 | $ 97,249,109 |
Ethanol Sales | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenues | 122,902,729 | 75,161,967 | |||||||||||||
Modified Distillers Grains Sales | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenues | 4,899,649 | 4,163,426 | |||||||||||||
Dried Distillers Grains Sales | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenues | 21,090,325 | 14,123,366 | |||||||||||||
Corn Oil Sales | |||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||
Revenues | $ 9,824,833 | $ 3,807,387 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Schedule of Property, Plant and Equipment) (Details) | 12 Months Ended |
Oct. 31, 2021 | |
Land improvements | Minimum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 15 years |
Land improvements | Maximum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 20 years |
Buildings | Minimum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 10 years |
Buildings | Maximum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 20 years |
Office equipment | Minimum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Office equipment | Maximum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 5 years |
Plant and process equipment | Minimum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 7 years |
Plant and process equipment | Maximum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 20 years |
Vehicles | Minimum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 7 years |
Vehicles | Maximum | |
Summary of Significant Accounting Policies [Line Items] | |
Property and equipment estimated useful lives | 7 years |
Inventories (Details)
Inventories (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 8,471,843 | $ 5,673,918 |
Spare parts and supplies | 4,093,108 | 3,543,395 |
Work in process | 1,074,341 | 804,455 |
Finished goods | 1,108,850 | 656,202 |
Total | $ 14,748,142 | $ 10,677,970 |
Inventories (Narrative) (Detail
Inventories (Narrative) (Details) - USD ($) | 12 Months Ended | |
Oct. 31, 2021 | Oct. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Inventory write-down | $ 0 | $ 0 |
Derivative Instruments (Schedul
Derivative Instruments (Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position) (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 368,269 | $ 260,397 |
Not designated as hedging instrument | Commodity Contract | ||
Derivatives, Fair Value [Line Items] | ||
In loss position | (915,027) | (889,750) |
Deposits with broker | $ 1,283,296 | $ 1,150,147 |
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, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Ethanol contracts | Revenues | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivative | $ 953 | $ (622,585) | $ (240,284) |
Corn contracts | Cost of goods sold | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivative | 352,596 | (845,013) | (835,456) |
Natural gas contracts | Cost of goods sold | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on derivative | $ 24,428 | $ 11,240 | $ 21,833 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - Commodity Contract - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
In gain position | $ 0 | $ 0 |
In loss position | (915,027) | (889,750) |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
In gain position | 0 | 0 |
In loss position | (72,129) | (71,037) |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
In gain position | 0 | 0 |
In loss position | (842,898) | (818,731) |
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) - USD ($) | 3 Months Ended | 12 Months Ended | 24 Months Ended | ||||||||||||||
Oct. 31, 2021 | Jul. 31, 2021 | Apr. 30, 2021 | Jan. 31, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Apr. 30, 2020 | Jan. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Current assets | $ 31,173,692 | $ 15,705,336 | $ 31,173,692 | $ 15,705,336 | |||||||||||||
Current liabilities | 21,322,079 | 12,749,753 | 21,322,079 | 12,749,753 | |||||||||||||
Long-term liabilities | 1,803,610 | 11,417,150 | 1,803,610 | 11,417,150 | |||||||||||||
Members' equity | 63,215,463 | 49,563,285 | 63,215,463 | 49,563,285 | |||||||||||||
Net income | $ 3,157,886 | $ 6,074,771 | $ 4,344,633 | $ 163,638 | $ (164,167) | $ 366,274 | $ (3,951,590) | $ (2,616,683) | $ (1,726,481) | $ (1,248,542) | $ (2,579,501) | $ (2,719,712) | $ 13,740,928 | $ (6,366,166) | $ (8,274,236) | ||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Renewable Fuels Marketing Group (RPMG) | |||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||
Current assets | $ 279,168,444 | $ 171,906,142 | |||||||||||||||
Other assets | 680,119 | 715,967 | |||||||||||||||
Current liabilities | 248,510,431 | 143,817,704 | |||||||||||||||
Long-term liabilities | 0 | 0 | |||||||||||||||
Members' equity | 31,365,670 | 28,869,485 | |||||||||||||||
Revenue | 4,782,836,390 | 3,083,913,298 | |||||||||||||||
Net income | $ 3,371,185 | $ 579,310 |
Debt Financing (Schedule of Lon
Debt Financing (Schedule of Long-term Debt) (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 3,499,000 | $ 12,711,200 |
Less debt issuance costs | (8,709) | (31,104) |
Less amounts due within one year | (2,991,291) | (2,835,045) |
Net long-term debt | 499,000 | 9,845,051 |
PPP Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 0 | 712,200 |
Notes Payable to Banks | Term Revolving Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 499,000 | 5,999,000 |
Notes Payable to Banks | 2020 Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 3,000,000 | $ 6,000,000 |
Debt Financing (Narrative) (Det
Debt Financing (Narrative) (Details) - USD ($) | 12 Months Ended | |||
Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | Apr. 14, 2020 | |
Debt Instrument [Line Items] | ||||
Variable rate term loan (compeer) | $ 3,490,291 | |||
Debt covenant, minimum debt service coverage ratio | 1.25 | |||
Debt covenant, minimum working capital | $ 8,250,000 | |||
Annual capital expenditures | 5,000,000 | |||
Gain on debt extinguishment | 712,200 | $ 0 | $ 0 | |
PPP Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 712,200 | |||
Gain on debt extinguishment | $ 712,000 | |||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Effective interest rate (as a percent) | 3.33% | |||
Variable rate term loan (compeer) | $ 0 | |||
Maximum borrowing capacity | 10,000,000 | |||
Current borrowing capacity | 3,400,000 | |||
Notes Payable to Banks | Term Revolving Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | 20,000,000 | |||
Variable rate term loan (compeer) | 499,000 | |||
Notes Payable to Banks | 2020 Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 6,000,000 | |||
Effective interest rate (as a percent) | 3.70% | |||
Variable rate term loan (compeer) | $ 3,000,000 | |||
Periodic principal payment | $ 250,000 | |||
Notes Payable to Banks | WATER Term Revolving Loan Member | ||||
Debt Instrument [Line Items] | ||||
Effective interest rate (as a percent) | 3.33% | |||
Notes Payable to Banks | Letter of Credit | Term Revolving Loan | ||||
Debt Instrument [Line Items] | ||||
Effective interest rate (as a percent) | 1.50% | |||
Variable rate term loan (compeer) | $ 0 | |||
75 Percent of Net Income | ||||
Debt Instrument [Line Items] | ||||
Debt covenant, minimum working capital | $ 8,250,000 | |||
Debt covenant, distribution to members as percentage of net income (as a percent) | 75.00% | |||
100 Percent of Net Income | ||||
Debt Instrument [Line Items] | ||||
Debt covenant, minimum working capital | $ 11,000,000 | |||
Debt covenant, distribution to members as percentage of net income (as a percent) | 100.00% | |||
100 Percent of Net Income | Notes Payable to Banks | Term Loan | ||||
Debt Instrument [Line Items] | ||||
Debt covenant, distribution to members term, outstanding balance | $ 0 | |||
London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.25% | |||
London Interbank Offered Rate (LIBOR) | Notes Payable to Banks | Term Revolving Loan | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 3.25% | |||
Wall Street Journal's Prime Rate | Notes Payable to Banks | 2020 Term Loan | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.45% |
Debt Financing (Schedule of Mat
Debt Financing (Schedule of Maturities of Long-Term Debt) (Details) - USD ($) | Oct. 31, 2021 | Oct. 31, 2020 |
Principal | ||
2022 | $ 3,000,000 | |
2023 | 499,000 | |
Long-term debt | 3,499,000 | $ 12,711,200 |
Debt Issuance Costs | ||
2022 | (8,709) | |
2023 | 0 | |
Less debt issuance costs | (8,709) | $ (31,104) |
Total | ||
2022 | 2,991,291 | |
2023 | 499,000 | |
Long-term debt | $ 3,490,291 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Oct. 31, 2021 |
Leases [Abstract] | |
Operating lease discount rate | 5.50% |
Operating leases remaining lease terms | 3 years |
Finance leases remaining lease terms | 9 years |
Leases - Maturities of Operatin
Leases - Maturities of Operating and Financing Lease Liabilities (Details) | Oct. 31, 2021USD ($) |
Operating Leases | |
2022 | $ 168,480 |
2023 | 168,480 |
2024 | 112,320 |
2025 | 0 |
2026 | 0 |
Thereafter | 0 |
Totals | 449,280 |
Amount representing interest | (32,279) |
Lease liability | 417,001 |
Finance Leases | |
2022 | 178,800 |
2023 | 178,800 |
2024 | 178,800 |
2025 | 178,800 |
2026 | 178,800 |
Thereafter | 536,400 |
Totals | 1,430,400 |
Amount representing interest | (275,300) |
Lease liability | $ 1,155,100 |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) | 12 Months Ended |
Oct. 31, 2021USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 168,480 |
Short term lease cost | 73,195 |
Amortization of leased assets | 143,267 |
Interest on lease liabilities | 66,893 |
Net lease cost | $ 451,835 |
Members' Equity (Details)
Members' Equity (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||
Oct. 31, 2021 | Jul. 31, 2021 | Apr. 30, 2021 | Jan. 31, 2021 | Jul. 31, 2020 | Jan. 31, 2020 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Members' Equity [Abstract] | |||||||||
Common stock, shares authorized (in shares) | 10,000 | 10,000 | |||||||
Member units repurchased during period (in shares) | 3 | 2 | 5 | 6 | 7 | 2 | 16 | 9 | 5 |
Share price (in dollars per share) | $ 5,750 | $ 5,500 | $ 5,500 | $ 5,500 | $ 6,000 | $ 6,500 | $ 5,750 | ||
Payments for repurchase of common stock | $ 17,250 | $ 11,000 | $ 27,500 | $ 33,000 | $ 42,000 | $ 13,000 | $ 88,750 | $ 55,000 | $ 39,200 |
Commitments, Contingencies an_3
Commitments, Contingencies and Concentrations (Marketing Agreements) (Details) - Marketing Agreements | 12 Months Ended | ||
Oct. 31, 2021USD ($)$ / T | Oct. 31, 2020USD ($) | Oct. 31, 2019USD ($) | |
Renewable Fuels Marketing Group (RPMG) | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 123,344,552 | $ 69,682,187 | $ 75,781,721 |
Accounts receivable, related parties | 6,353,103 | 2,677,213 | |
Distillers Grains Marketing Group | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | 21,108,135 | 14,123,366 | $ 14,700,718 |
Accounts receivable, related parties | $ 520,821 | 474,991 | |
Related party fees; percentage of total | 2.00% | ||
Related party contract termination notice period | 120 days | ||
Distillers Grains Marketing Group | Maximum | |||
Related Party Transaction [Line Items] | |||
Marketing expense per unit, related parties (USD per ton) | $ / T | 2 | ||
Distillers Grains Marketing Group | Minimum | |||
Related Party Transaction [Line Items] | |||
Marketing expense per unit, related parties (USD per ton) | $ / T | 1.50 | ||
Corn Oil Marketing Group | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 9,867,789 | 3,836,751 | |
Accounts receivable, related parties | $ 317,966 | $ 112,028 |
Commitments, Contingencies an_4
Commitments, Contingencies and Concentrations (Forward Contract) (Details) | Oct. 31, 2021TbuMMBTUlbgal$ / MMBTU$ / T$ / lb$ / bu$ / gal |
Dried Distillers Grains Sales | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | 8,500 |
Modified Distillers Grains Sales | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | 22,400 |
Corn oil | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | lb | 1,789,000 |
Corn contracts | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | bu | 3,012,000 |
Natural gas contracts | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | MMBTU | 3,349,000 |
Denaturant | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | gal | 110,000 |
Basis Contracts | Corn contracts | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | bu | 1,824,000 |
Priced Contracts | Dried Distillers Grains Sales | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | 8,500 |
Derivative, average forward price | $ / T | 201 |
Priced Contracts | Modified Distillers Grains Sales | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | 22,400 |
Derivative, average forward price | $ / T | 98 |
Priced Contracts | Corn oil | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | lb | 1,789,000 |
Derivative, average forward price | $ / lb | 0.59 |
Priced Contracts | Corn contracts | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | bu | 1,188,000 |
Derivative, average forward price | $ / bu | 5.13 |
Priced Contracts | Natural gas contracts | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | MMBTU | 3,349,000 |
Derivative, average forward price | $ / MMBTU | 2.88 |
Priced Contracts | Denaturant | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Derivative, nonmonetary notional amount | gal | 110,000 |
Derivative, average forward price | $ / gal | 2.07 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||||
Oct. 31, 2021 | Jul. 31, 2021 | Apr. 30, 2021 | Jan. 31, 2021 | Oct. 31, 2020 | Jul. 31, 2020 | Apr. 30, 2020 | Jan. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2019 | Oct. 31, 2021 | Oct. 31, 2020 | Oct. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||
Revenues | $ 48,428,639 | $ 46,988,806 | $ 34,864,344 | $ 28,435,747 | $ 25,575,894 | $ 24,238,999 | $ 20,257,229 | $ 27,184,024 | $ 26,015,463 | $ 25,605,525 | $ 22,939,711 | $ 22,688,410 | $ 158,717,536 | $ 97,256,146 | $ 97,249,109 |
Gross Profit (Loss) | 3,817,128 | 6,923,891 | 4,515,280 | 288,818 | 460,001 | 1,275,198 | (2,817,586) | (1,475,324) | (919,628) | (175,483) | (1,616,624) | (1,798,887) | 15,545,117 | (2,557,711) | (4,510,622) |
Operating profit (Loss) | 3,032,302 | 6,097,163 | 3,718,220 | (537,092) | (228,285) | 497,484 | (3,883,393) | (2,495,845) | (1,644,443) | (1,078,065) | (2,428,181) | (2,560,218) | 12,310,593 | (6,110,039) | (7,710,907) |
Net income (loss) | $ 3,157,886 | $ 6,074,771 | $ 4,344,633 | $ 163,638 | $ (164,167) | $ 366,274 | $ (3,951,590) | $ (2,616,683) | $ (1,726,481) | $ (1,248,542) | $ (2,579,501) | $ (2,719,712) | $ 13,740,928 | $ (6,366,166) | $ (8,274,236) |
Basic and diluted earnings (loss) per unit (in dollars per share) | $ 660.37 | $ 1,269.28 | $ 907.21 | $ 34.14 | $ (34.22) | $ 76.29 | $ (822.22) | $ (544.35) | $ (359.08) | $ (259.68) | $ (536.28) | $ (565.19) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) | Jan. 19, 2022 | Nov. 17, 2021 |
Subsequent Event [Line Items] | ||
Cash distribution declared, per membership unit (in USD per unit) | $ 2,300 | $ 1,500 |
Cash distributions declared | $ 10,972,150 | $ 7,172,250 |