8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): April 9, 2010

South Dakota Soybean Processors, LLC

(Exact name of Registrant as specified in its charter)

South Dakota	000-50253	46-0462968
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
100 Caspian Ave. PO Box 500 Volga, South Dakota		57071
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (605) 647-9240

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

On April 9, 2010, South Dakota Soybean Processors, LLC sent a letter to its members, further explaining the consolidated net losses of the company for the year ended December 31, 2009 and the improved financial condition of the company through the two months ended February 28, 2010. The letter is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Pursuant to the rules and regulations of the Securities and Exchange Commission, the information furnished under this Item 7.01, including the exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by reference in such a filing.

Item 9.01   Financial Statements and Exhibits.

(d)  Exhibits. The following exhibits are filed with this report:

99.1     Letter to members dated April 8, 2010.

Cautionary Statement for Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995.

The matters discussed in this report on Form 8-K and exhibit, when not historical matters, are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially from projected results. Such factors are described from time to time in the registrant’s filings with the Securities and Exchange Commission. Many of these factors are beyond the registrant’s ability to control or predict. The registrant disclaims any intent or obligation to update its forward-looking statements, whether as a result of receiving new information, the occurrence of future events, or otherwise.

SIGNATURE

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 hereunto duly authorized.

	SOUTH DAKOTA SOYBEAN PROCESSORS, LLC
Dated:   April 9, 2010	By:	/s/ Rodney Christianson
		Rodney Christianson, Chief Executive Officer

EX-99.1

Exhibit 99.1

April 8, 2010

[Name and Address of Member]

Dear Member,

As reported in our annual Form 10-K with the Securities Exchange Commission (SEC), South Dakota Soybean Processors generated a consolidated net loss of $6.7 million in 2009.  Prior to two unique events SDSP’s consolidated losses included $45,000 from soy processing and $1.44 million from Urethane Soy Systems Company (USSC).  In addition to those losses SDSP experienced two unique events.  First, we recorded a $330,000 expense to settle the lawsuit brought against SDSP and four other defendants.  The second unique event was the non-cash entry of $4.5 million to impair the value of USSC’s patents carried on SDSP’s consolidated balance sheet.

On March 18th SDSP and our insurance provider reached a settlement with Transocean Group Holdings PTY Ltd. and Transocean Global Biofuels PTY Ltd., of Sydney, Australia (“Transocean”).  The lawsuit, which was filed on January 31, 2007, concerned the potential development and operation of a biodiesel refinery through a company called High Plains Biofuels, Inc.  SDSP’s financial statements for 2009 include an expense for $330,000, which represents our contribution of the $530,000 payment to Transocean.  Upon payment, Transocean will release SDSP and other defendants from all prior multi-million dollar claims.  While we are not at all happy about the payment to Transocean, we are pleased to have this lawsuit behind us.

South Dakota Soybean Processors decided to increase the value of the oil it produces by investing into Urethane Soy Systems Company (USSC), for the research, marketing and development of soy-based polyol and soy-based polyurethane systems.  As a result of our purchase of shares and contribution of working capital into USSC in 2003, SDSP recorded $7.5 million for the value of their patents on SDSP’s consolidated balance sheet.  These patents were being amortized over the life of the patents, creating a non-cash, non-taxable expense of $413,000 per year.  Those patents were scheduled to be written down to zero on SDSP’s balance sheet by 2021.

Following Generally Accepted Accounting Principles (GAAP), every year management and our auditors are required to evaluate the value of our intangible assets, which include the patents of USSC.  In short, management and our auditors were left with the task of projecting future cash flows of a new, evolving, green market segment. The economic meltdown beginning in late 2008 and the uncertainty of the recovery had a negative impact on our impairment evaluation.  The key factors included:

üAnnual new housing starts dropped from a historical level of 1.7 million units to under 600,000 units in 2009.

üAnnual automotive sales in the U.S. dropped from over 17 million units in 2006 to just over 10 million units in 2009.

üUnder these market conditions, USSC only maintained its sales volume and was not able to create growth in 2009.

Those key factors, combined with the uncertainty of the recovery of the housing and auto industries in the near future, forced us recognize an impairment of the value of our patents for USSC.  Our expenses increased in 2009 as a result of this $4.5 million non-cash impairment charge.

The impairment of the patents of USSC does not impact its future or our plans to make it profitable.  It is only a reflection of the current economic environment and GAAP for valuing intangible assets on our balance sheet.  In fact, there are some exciting things happening in USSC.  In 2009, we made significant improvements on the attributes of odor and reactivity of our molecules, which have been two main stumbling blocks in terms of marketing our polyols. As a result of these improvements, customers are now referring to our product as a ‘drop-in’ substitute and are also beginning to ask how they can move the soy polyol into the international markets.  While we are disappointed that we have not made USSC profitable yet, we are reminded that the creation and market acceptance of new molecular products takes time.

In regards to our soybean crushing operation, we had some very challenging marketing conditions during 2009.  The soybeans harvested locally in the fall of 2008 were of poor quality.  The higher moisture and lower oil content of those beans meant that for every bushel we processed, we had one pound less of product to sell.  That one pound per bushel reduction from an average yield translated to $4.5 million off the bottom line.  In addition, as a result of soybean prices dropping from over $15 a bushel in June 2008 to under $9 in the fall of 2008, our soybean suppliers became reluctant sellers – driving up our local basis adjustment during late 2008 through most of 2009.  Our meal customers were unwilling to accommodate this cost increase, thus reducing our margin structure.  This ‘hangover affect’ from the large decrease in soybean prices accounted for approximately $1.9 million in reduced profits from 2008.

So far, 2010 has started out a lot better than 2009 for SDSP. Through February 28th, we have recorded a consolidated profit of approximately $700,000, compared to a loss of $2.4 million for the same period in 2009.  Management and the USSC Board budgeted for aggressive growth for 2010 and continue to review our strategies to accomplish it.  The challenge to USSC is to execute these plans.

Sincerely,

Ronald Gorder	Rodney Christianson
President	Chief Executive Officer