UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

xQuarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended June 30, 2010.

OR

oTransition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the transition period from               to               .

Commission File Number: 000-50254

LAKE AREA CORN PROCESSORS, LLC

(Exact name of registrant as specified in its charter)

South Dakota	46-0460790
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

46269 SD Highway 34

P.O. Box 100

Wentworth, South Dakota 57075

(Address of principal executive offices)

(605) 483-2679

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x  Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer o	Accelerated Filer o
Non-Accelerated Filer x	Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:  As of August 13, 2010, there were 29,620,000 units outstanding.

Explanatory Note Regarding Amendment No. 1

This Amendment No. 1 to the Quarterly Report on Form 10-Q (“Amendment No. 1”) of Lake Area Corn Processors, LLC (the “Company”) for the fiscal quarter ended June 30, 2010, is being filed for the purpose of amending and restating Part I, Item 1 of the Company’s original Quarterly Report on Form 10-Q (the “Quarterly Report”) due to an inadvertent omission of the Consolidated Statements of Cash Flows (Unaudited) for the Six Month Period Ended June 30, 2010 and 2009.

In accordance with Rule 12b-15 under the Securities and Exchange Act of 1934, the complete text of the item amended by this Amendment No. 1 is set forth herein. The remainder of the Company’s Quarterly Report is unchanged and is not reproduced in this Amendment No. 1.  This report speaks as of the original filing date of the Quarterly Report and has not been updated to reflect events occurring subsequent to the original reporting date.  Accordingly, in conjunction with reading this Amendment No. 1, you should also read all other filings that we have made with the Securities and Exchange Commission since the date of the original filing.

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PART I.     FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

LAKE ARE CORN PROCESSORS, LLC

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	June 30,			December 31,
	2010			2009*
ASSETS
CURRENT ASSETS
Cash	$	1,667,214		$	365,066
Accounts receivable	2,287,911			3,456,380
Other receivables	104,752			276,273
Inventory	7,322,744			7,580,174
Due from broker	670,590			1,494,653
Derivative financial instruments	338,188			—
Prepaid expenses	156,850			167,954
Total current assets	12,548,249			13,340,500
PROPERTY AND EQUIPMENT
Land	676,097			676,097
Land improvements	2,665,358			2,665,358
Buildings	8,088,853			8,088,853
Equipment	40,768,265			40,768,265
	52,198,573			52,198,573
Less accumulated depreciation	(21,114,079		)	(19,752,594		)
Net property and equipment	31,084,494			32,445,979
OTHER ASSETS
Goodwill	10,395,766			10,395,766
Investments	2,489,624			2,345,300
Other	286,320			97,675
Total other assets	13,171,710			12,838,741
	$	56,804,453		$	58,625,220

* Derived from audited financial statements

See Notes to Unaudited Consolidated Financial Statements

3

LAKE ARE CORN PROCESSORS, LLC

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	June 30,		December 31,
	2010		2009*
LIABILITIES AND MEMBERS’ EQUITY
CURRENT LIABILITIES
Oustanding checks in excess of bank balance	$	—	$	285,804
Accounts payable	2,509,055		6,245,418
Accrued liabilities	1,327,116		1,045,279
Derivative financial instruments	115,595		610,991
Current portion of guarantee payable	71,236		52,485
Current portion of notes payable	3,893,138		2,727,740
Total current liabilities	7,916,140		10,967,717
LONG-TERM LIABILITIES
Notes payable, net of current maturities	1,309,660		3,609,203
Guarantee payable, net of current portion	147,793		147,793
Other	187,425		166,600
Total long-term liabilities	1,644,878		3,923,596
COMMITMENTS AND CONTINGENCIES
MEMBERS’ EQUITY
Capital units, $0.50 stated value, 29,620,000 units issued and outstanding	14,810,000		14,810,000
Additional paid-in capital	96,400		96,400
Retained earnings	32,337,035		28,827,507
Total members’ equity	47,243,435		43,733,907
	$	56,804,453	$	58,625,220

* Derived from audited financial statements

See Notes to Unaudited Consolidated Financial Statements

4

LAKE ARE CORN PROCESSORS, LLC

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	June 30, 2010			June 30, 2009			June 30, 2010			June 30, 2009
REVENUES	$	20,245,683		$	22,487,000		$	43,084,445		$	43,462,005
COST OF REVENUES	18,542,586			21,456,600			38,024,667			42,393,017
GROSS PROFIT	1,703,097			1,030,400			5,059,778			1,068,988
OPERATING EXPENSES	708,003			747,143			1,468,012			1,449,604
INCOME (LOSS) FROM OPERATIONS	995,094			283,257			3,591,766			(380,616		)
OTHER INCOME (EXPENSE)
Interest and other income	11,471			11,929			16,311			16,496
Equity in net income(loss) of investment	68,018			101,662			144,324			(285,741		)
Interest and other expense	(111,742		)	(214,195		)	(242,874		)	(417,506		)
Total other income (expense)	(32,253		)	(100,604		)	(82,239		)	(686,751		)
NET INCOME (LOSS)	$	962,841		$	182,653		$	3,509,527		$	(1,067,367	)
BASIC AND DILUTED EARNINGS (LOSS) PER UNIT	$	0.03		$	0.01		$	0.12		$	(0.04	)
WEIGHTED AVERAGE UNITS OUTSTANDING FOR THE CALCULATION OF BASIC AND DILUTED EARNINGS (LOSS) PER UNIT	29,620,000			29,620,000			29,620,000			29,620,000
DISTRIBUTIONS DECLARED PER UNIT	$	—		$	—		$	—		$	—

See Notes to Unaudited Consolidated Financial Statements

5

LAKE ARE CORN PROCESSORS, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009

	2010			2009
OPERATING ACTIVITIES
Net income (loss)	$	3,509,527		$	(1,067,367	)
Changes to net income (loss) not affecting cash
Depreciation and amortization	1,383,636			1,380,566
Equity in net (income) loss of investments	(144,324		)	285,741
Unrealized loss on purchase commitments	511,814			614,744
Lower of cost or market adjustment on inventory	90,264			412,357
(Increase) decrease in
Receivables	1,339,990			(1,413,847		)
Inventory	167,166			(628,027		)
Prepaid expenses	11,104			149,401
Derivative financial instruments and due from broker	(9,522		)	299,365
Increase (decrease) in
Accounts payable	(3,736,360		)	(3,961,375		)
Accrued liabilities	(209,153		)	(2,656,700		)
NET CASH FROM (USED FOR) OPERATING ACTIVITIES	2,914,142			(6,585,142		)
INVESTING ACTIVITIES
Change in other assets	(63,693		)	—
Purchase of property and equipment	—			(1,033,330		)
NET CASH USED FOR INVESTING ACTIVITIES	(63,693		)	(1,033,330		)
FINANCING ACTIVITIES
Increase in outstanding checks in excess of bank balance	(285,804		)	1,025,305
Short-term notes payable issued	—			4,745,991
Long-term notes payable issued	—			2,639,000
Principal payments on long-term notes payable	(1,262,497		)	(957,753		)
NET CASH FROM (USED FOR) FINANCING ACTIVITIES	(1,548,301		)	7,452,543
NET INCREASE IN CASH	1,302,148			(165,929		)
CASH AT BEGINNING OF PERIOD	365,066			488,517
CASH AT END OF PERIOD	$	1,667,214		$	322,588
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for interest	$	341,250		$	325,179

See Notes to Unaudited Consolidated Financial Statements

6

LAKE AREA CORN PROCESSORS, LLC

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2010 AND 2009

NOTE 1 -         NATURE OF OPERATIONS

Principal Business Activity

Lake Area Corn Processors, LLC and subsidiary (the Company) is a South Dakota limited liability company located in Wentworth, South Dakota. The Company was organized by investors to provide a portion of the corn supply for a 40 million-gallon (annual capacity) ethanol plant, owned by Dakota Ethanol, LLC (Dakota Ethanol). The Company sells ethanol and related products to customers located in North America.

NOTE 2 -         SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The unaudited financial statements contained herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included in the accompanying financial statements. The results of operations for the six and three months ended June 30, 2010 and 2009 are not necessarily indicative of the results to be expected for a full year.

These financial statements should be read in conjunction with the financial statements and notes included in the Company’s audited financial statements for the year ended December 31, 2009, contained in the annual report on Form 10-K  for 2009.

Principles of Consolidation

The consolidated financial statements of the Company include the accounts of its wholly owned subsidiary, Dakota Ethanol.  All significant inter-company transactions and balances have been eliminated in consolidation.

Revenue Recognition

Revenue from the production of ethanol and related products is recorded when title transfers to customers, net of allowances for estimated returns. Generally, ethanol and related products are shipped FOB shipping point, based on written contract terms between Dakota Ethanol and its customers.  Collectability of revenue is reasonably assured based on historical evidence of collectability between Dakota Ethanol and its customers.  Interest income is recognized as earned.

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 these products is recorded based on the net selling price reported to the Company from the marketer.

Cost of Revenues

The primary components of cost of revenues from the production of ethanol and related co-product are corn expense, energy expense (natural gas and electricity), raw materials expense (chemicals and denaturant), and direct labor costs.

Shipping costs incurred in the sale of dried distiller’s grains are classified in net revenues.  Shipping costs on modified and wet distiller’s grains are included in cost of revenues.  Shipping costs were approximately $319,000 and $146,000 for the six and three months ended June 30, 2010, respectively.  Shipping costs were approximately $482,000 and $221,000 for the six and three months ended June 30, 2009, respectively.

7

LAKE AREA CORN PROCESSORS, LLC

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2010 AND 2009

Inventory Valuation

Ethanol and related products are stated at net realizable value. Raw materials, work-in-process, and parts inventory are valued using methods which approximate the lower of cost (first-in, first-out) or market. In the valuation of inventories and purchase and sale commitments, market is based on current replacement values except that it does not exceed net realizable values and is not less than net realizable values reduced by allowances for approximate normal profit margin.

Investment in commodities contracts, derivative instruments and hedging activities

On January 1, 2009, the Company adopted new disclosure requirements, which require entities to provide greater transparency in interim and annual financial statements about how and why the entity uses derivative instruments, how the instruments and related hedged items are accounted for, and how the instruments and related hedged items affect the financial position, results of operations, and cash flows of the entity

We are exposed to certain risks related to our ongoing business operations.  The primary risks that we manage by using forward or derivative instruments are price risk on anticipated purchases of corn, natural gas and the sale of ethanol.

We are subject to market risk with respect to the price and availability of corn, the principal raw material we use to produce ethanol and ethanol by-products.  In general, rising corn prices result in lower profit margins and, therefore, represent unfavorable market conditions.  This is especially true when market conditions do not allow us to pass along increased corn costs to our customers.  The availability and price of corn is subject to wide fluctuations due to unpredictable factors such as weather conditions, farmer planting decisions, governmental policies with respect to agriculture and international trade and global demand and supply.

Certain contracts that literally meet the definition of a derivative may be exempted from derivative accounting 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 the accounting and reporting requirements of derivative accounting.  Effective January 1, 2008, we applied the normal purchase and sales exemption under derivative accounting for forward purchases of corn and sales of distiller’s grains.  Transactions initiated prior to January 1, 2008 are not exempted from the accounting and reporting requirements.  As of June 30, 2010, we are committed to purchasing 3.2 million bushels of corn on a forward contract basis with an average price of $3.48 per bushel, of which 200,000 bushels are subject to derivative accounting treatment and 3.0 million bushels are accounted for as normal purchases, and accordingly, are not marked to market and are accounted for using lower of cost or market accounting.  Dakota Ethanol has a derivative financial instrument liability of approximately $116,000 related to the forward contracted purchases of corn.  The corn purchase contracts represent 18% of the annual corn usage.

We sometimes enter into firm-price purchase commitments with some of our natural gas suppliers under which we agree to buy natural gas at a price set in advance of the actual delivery of that natural gas to us.  Under these arrangements, we assume the risk of a price decrease in the market price of natural gas between the time this price is fixed and the time the natural gas is delivered.  At June 30, 2010, we are committed to purchasing 40,000 MMBtu’s of natural gas with an average price of $4.16 per MMBtu.  We account for these transactions as normal purchases, and accordingly, do not mark these transactions to market.  The natural gas purchase contracts represent 3% of the annual natural gas usage

We enter into short-term forward, option and futures contracts as a means of securing corn and natural gas for the ethanol plant and managing exposure to changes in commodity and energy prices. We enter into short-term forward, option and futures contracts for sales of ethanol to manage exposure to changes in energy prices.  All of our derivatives are designated as non-hedge derivatives, and accordingly are recorded at fair value with changes in fair

8

LAKE AREA CORN PROCESSORS, LLC

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2010 AND 2009

value recognized in net income. Although the contracts are considered economic hedges of specified risks, they are not designated as and accounted for as hedging instruments.

As part of our trading activity, we use futures and option contracts offered through regulated commodity exchanges to reduce risk and we are exposed to risk of loss in the market value of inventories. To reduce that risk, we generally take positions using forward and futures contracts and options.

Derivatives not designated as hedging instruments at June 30, 2010 and December 31, 2009 were as follows:

	Balance Sheet	June 30,			December 31,
	Classification	2010			2009*
Futures and options contracts	Current Assets	$	338,188		$	—
Futures and options contracts	(Current Liabilities)	$	—		$	(551,420	)
Forward contracts	(Current Liabilities)	$	(115,595	)	$	(59,571	)

* Derived from audited financial statements

Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas purchases are included as a component of cost of revenues and derivative contracts related to ethanol sales are included as a component of revenues in the accompanying financial statements.

	Statement of Operations	Three Months Ended June 30,
	Classification	2010		2009
Net realized and unrealized gains (losses) related to purchase contracts:
Futures and options contracts	Cost of Revenues	$	247,692	$	538,876
Forward contracts	Cost of Revenues	$	18,946	$	(761,883	)

	Statement of Operations	Six Months Ended June 30,
	Classification	2010			2009
Net realized and unrealized gains related to sales contracts:
Futures and options contracts	Revenues	$	252,938		$	—
Net realized and unrealized gains (losses) related to purchase contracts:
Futures and options contracts	Cost of Revenues	$	2,759,608		$	480,460
Forward contracts	Cost of Revenues	$	(56,024	)	$	(770,625	)

9

LAKE AREA CORN PROCESSORS, LLC

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2010 AND 2009

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates.

Environmental Liabilities

Dakota Ethanol’s operations are subject to environmental laws and regulations adopted by various governmental authorities in the jurisdiction in which it operates. These laws require Dakota Ethanol to investigate and remediate the effects of the release or disposal of materials at its locations. Accordingly, Dakota Ethanol 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 Dakota Ethanol’s liability is probable and the costs can be reasonably estimated.

Recent Accounting Pronouncements

In January 2010, the FASB issued an update to “Fair Value Measurements and Disclosures (Topic 820), Improving Disclosures about Fair Value Measurements.”  The update requires new disclosures about transfers in and out of Levels 1 and 2 and Activity in Level 3.  The update also provides clarification of disclosures about the level of disaggregation and the inputs and valuation techniques used.

The Company is evaluating the effect, if any, that the adoption of this new accounting standard will have on its results of operations, financial position, and the related disclosures.

NOTE 3 -         INVENTORY

Inventory consisted of the following as of June 30, 2010 and December 31, 2009:

	June 30,		December 31,
	2010		2009*
Raw materials	$	4,883,162	$	5,049,737
Finished goods	957,589		855,745
Work in process	514,083		679,817
Parts inventory	967,910		994,875
	$	7,322,744	$	7,580,174

* Derived from audited financial statements

Included in inventory is a lower of cost or market adjustment of approximately $90,000 and $212,000 at June 30, 2010 and December 31, 2009 respectively.

NOTE 4 -         SHORT-TERM NOTE PAYABLE

On May 13, 2010, Dakota Ethanol renewed a revolving promissory note from First National Bank of Omaha in the amount of $5,000,000.  The note expires on May 12, 2011 and the amount available is subject to certain restrictive covenants establishing minimum reporting requirements, ratios, working capital, net worth and borrowing base

10

LAKE AREA CORN PROCESSORS, LLC

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2010 AND 2009

requirements. Interest on the outstanding principal balances will accrue at 350 basis points above the 1 month LIBOR rate (4.50 percent at June 30, 2010).  The rate is subject to a floor of 4.5 percent.    There is a commitment fee of 1/2 percent on the unused portion of the $5,000,000 availability. In addition, the bank draws the checking account balance to a minimum balance on a daily basis. The excess cash pays down or the shortfall is drawn upon the note as needed.  The note is collateralized by the ethanol plant, its accounts receivable and inventories.  On June 30, 2010 Dakota Ethanol had $0 outstanding and $5,000,000 available to be drawn on the revolving promissory note.  On December 31, 2009, Dakota Ethanol had $0 outstanding and $4,000,000 available to be drawn on the revolving promissory note.

NOTE 5 -         LONG-TERM NOTES PAYABLE

Dakota Ethanol has two notes payable to First National Bank of Omaha, Nebraska (the Bank) (Term Notes 2 and 5).

As part of the note payable agreements, Dakota Ethanol is subject to certain restrictive covenants establishing minimum reporting requirements, ratios, working capital and net worth requirements. The notes are collateralized by the ethanol plant and equipment, its accounts receivable and inventories. Term note 2 is subject to prepayment penalties based on the cost incurred by the Bank to break its fixed interest rate commitment.

The balance of Term Note 2 is due and payable in quarterly installments of $581,690 through September 1, 2011. Interest on outstanding principal balances will accrue at a fixed rate of 9 percent.

On May 13, 2010, Dakota Ethanol restructured Term Note 5.  Term Note 5 is a reducing revolving note with an availability of $5,000,000.  Interest on outstanding principal balances will accrue at 400 basis points above the 1 month LIBOR rate (5.0 percent at June 30, 2010).  The rate is subject to a floor of 5.0 percent.  Dakota Ethanol may elect to borrow any principal amount repaid on Term Note 5 up to $5,000,000 subject to the terms of the agreement. Should Dakota Ethanol elect not to utilize this feature, the lender will assess an unused commitment fee of 1/2 percent on the unused portion of the note.  Term Note 5 has a reducing feature through which the available amount of the note is reduced by $1,000,000 on the anniversary of the note.  The note matures on May 1, 2013.  On June 30, 2010, Dakota Ethanol had $0 outstanding and $5,000,000 available to be drawn on Term Note 5.  On December 31, 2009, Dakota Ethanol had $0 outstanding and $5,000,000 available to be drawn on Term Note 5.

During December 2008, Dakota Ethanol issued a note payable related to the purchase of land adjacent to the plant site.  The note was issued for $450,000.  The note matures on December 1, 2012.  The note is payable in annual installments of $112,500 plus interest.  Interest on outstanding principal balances will accrue at a fixed rate of 7.0 percent.

Dakota Ethanol conducted a private placement offering of subordinated unsecured debt securities which closed on May 30, 2009.  The securities mature two years from the date of issuance.  Interest on the outstanding balances will accrue at a fixed rate of 9 percent.  Interest will be paid annually on January 30th of each year beginning on January 30, 2010.  We raised $1,439,000 in subordinated debt through this offering.

On July 24, 2009 Dakota Ethanol issued an additional $700,000 in subordinated secured debt to Guardian Eagle Investments, LLC.  The note has a fixed interest rate of 9.0%.  The note requires monthly installments of principal and interest and matures in April 2012.

On May 22, 2009, Dakota Ethanol entered into two loan agreements for alternative financing for our corn oil extraction equipment as we had agreed with FNBO; one loan with Rural Electric Economic Development, Inc (REED) and the other loan with First District Development Company (FDDC).

The note to REED for $1 million has a fixed interest rate of 4.7%.  The note requires monthly installments of principal and interest and matures on May 25, 2014.  The note is secured by the oil extraction equipment.

11

LAKE AREA CORN PROCESSORS, LLC

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2010 AND 2009

The note to FDDC for $200,000 has a fixed interest rate of 5.5%.  The note requires monthly installments of principal and interest and matures on May 22, 2014.  The note is secured by the oil extraction equipment.

We are in compliance with our financial covenants as of June 30, 2010.

The balances of the notes payable are as follows:

	June 30,			December 31,
	2010			2009*
Note payable to First National Bank, Omaha Term Note 2	$	1,819,840		$	2,864,121
Note payable - Land	337,500			337,500
Note payable - Subordinated notes	1,439,000			1,439,000
Note payable - REED	803,328			895,586
Note payable - FDDC	161,198			179,394
Note payable -Guardian Eagle	496,992			621,342
Note payable -Other	144,940			—
	5,202,798			6,336,943
Less current portion	(3,893,138		)	(2,727,740		)
	$	1,309,660		$	3,609,203

* Derived from audited financial statements

Minimum principal payments for the next five years are estimated as follows:

Years Ending June 30,	Amount
2011	$	3,893,138
2012	611,836
2013	394,227
2014	273,811
2015	29,786

NOTE 6 -         FAIR VALUE MEASUREMENTS

Effective January 1, 2009, the Company completely adopted the fair value measurements and disclosures standard which defines fair value, establishes a framework for measuring fair value, and expands disclosure for those assets and liabilities carried on the balance sheet on a fair value basis.

The Company’s balance sheet contains derivative financial instruments that are recorded at fair value on a recurring basis.  Fair value measurements and disclosures require that assets and liabilities carried at fair value be classified and disclosed according to the process for determining fair value.  There are three levels of determining fair value.

Level 1 uses quoted market prices in active markets for identical assets or liabilities.

Level 2 uses observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3 uses unobservable inputs that are not corroborated by market data.

12

LAKE AREA CORN PROCESSORS, LLC

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2010 AND 2009

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities carried at fair value effective January 1, 2008.

Derivative financial instruments. Commodity futures and options contracts are reported at fair value utilizing Level 1 inputs. For these contracts, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from the CBOT and NYMEX markets.  Over-the-counter commodity options contracts are reported at fair value utilizing Level 2 inputs.  For these contracts, the Company obtains fair value measurements from an independent pricing service.  The fair value measurements consider observable data that may include dealer quotes and live trading levels from the over-the-counter markets.  Forward purchase contracts are reported at fair value utilizing Level 2 inputs.  For these contracts, the Company obtains fair value measurements from local grain terminal bid values. The fair value measurements consider observable data that may include live trading bids from local elevators and processing plants which are based off the CBOT markets.

The following table summarizes financial assets and financial liabilities measured at fair value on a recurring basis as of March 31, 2010 and December 31, 2009, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: 

June 30, 2010	Total		Level 1		Level 2		Level 3
Assets:
Derivative financial instruments	$	338,188	$	338,188	$	—	$	—
Liabilities:
Derivative financial instruments	$	115,595	$	—	$	115,595	$	—
December 31, 2009*
Liabilities:
Derivative financial instruments	$	610,991	$	551,420	$	59,571	$	—

* Derived from audited financial statements

Certain financial assets and financial liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). Financial assets and financial liabilities measured at fair value on a non-recurring basis were not significant at June 30, 2010.

Disclosure requirements for fair value of financial instruments require disclosure of the fair value of financial assets and financial liabilities, including those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis or nonrecurring basis.  The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value on a recurring or non recurring basis are discussed above.  The methodologies for other financial assets and financial liabilities are discussed below.

The Company believes the carrying amount of cash, cash equivalents, accounts receivable, due from broker, derivative instruments, and accounts payable approximates fair value due to the short maturity of these instruments.

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LAKE AREA CORN PROCESSORS, LLC

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

JUNE 30, 2010 AND 2009

The carrying amount of long-term obligations at June 30, 2010 of $5,421,827 had an estimated fair value of approximately $5,433,557 based on estimated interest rates for comparable debt.  The carrying amount and fair value were $6,537,221 and $6,602,314 respectively at December 31, 2009.

NOTE 7 -         RELATED PARTY TRANSACTIONS

Dakota Ethanol owns a 8% interest in RPMG, in which Dakota Ethanol has entered into marketing agreements for the exclusive rights to market, sell and distribute the entire ethanol and dried distiller’s grains inventories produced by Dakota Ethanol.  The marketing fees are included in net revenues.

Sales and marketing fees related to the agreements are as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Sales ethanol	$	16,781,922	$	18,381,116	$	35,689,308	$	35,053,846
Sales distiller’s grains	1,831,953		1,474,266		3,602,775		2,636,099
Marketing fees ethanol	52,621		53,525		106,992		105,795
Marketing fees distillers grains	21,663		26,218		43,754		43,496

	June 30,		December 31,
	2010		2009
Amounts due included in accounts receivable	$	1,953,181	$	2,973,282

NOTE 8 -       SUBSEQUENT EVENTS

In July 2010, Dakota Ethanol paid off the outstanding principal on Term Note 2 to FNBO.

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PART II.     OTHER INFORMATION

ITEM 6.  EXHIBITS.

The following exhibits are filed as part of this report.

Exhibit No.	Exhibit	Filed Herewith	Incorporated by Reference
31.1	Certificate Pursuant to 17 CFR 240.13a-14(a)	X
31.2	Certificate Pursuant to 17 CFR 240.13a-14(a)	X
32.1	Certificate Pursuant to 18 U.S.C. Section 1350	X
32.2	Certificate Pursuant to 18 U.S.C. Section 1350	X

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		LAKE AREA CORN PROCESSORS, LLC
Date:	November 12, 2010	/s/ Scott Mundt
		Scott Mundt
		Chief Executive Officer
Date:	November 12, 2010	/s/ Robbi Buchholtz
		Robbi Buchholtz
		Chief Financial Officer

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