10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

¨           TRANSITION REPORT PURSUANT TO SECTION 13 OR

15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NO. 000-50253

South Dakota Soybean Processors, LLC

(Exact name of registrant as specified in its charter)

South Dakota	46-0462968
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
100 Caspian Avenue; PO Box 500 Volga, South Dakota	57071
(Address of Principal Executive Offices	(Zip Code)

(605) 627-9240

(Registrant's telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:

CLASS A CAPITAL UNITS

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

¨   Yes        x   No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

¨   Yes        x   No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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        ¨   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).

x   Yes        ¨   No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

x Yes        ¨   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 accelerated filer, large accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

¨     Large Accelerated Filer	¨     Accelerated Filer	x     Non-Accelerated Filer	¨    Smaller Reporting Company	¨    Emerging Growth Company
		(do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). 

¨    Yes       x    No

The aggregate market value of the registrant’s Class A units held by non-affiliates at June 30, 2019 was approximately $112,595,763 computed by reference to the most recent public offering price on Form S-1. The registrant's Class A units are not listed on an exchange or otherwise publicly traded. Additionally, the Class A units are subject to significant restrictions on transfer under the registrant's operating agreement.

As of the day of this filing, there were 30,419,000 Class A capital units of the registrant outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part III of Form 10-K - Portions of the Definitive Proxy Statement to be filed with the Securities Exchange Commission within 120 days after the close of the registrant's fiscal year (December 31, 2019).

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Table of Contents

		Page
PART I.
Item 1.	Business	3
Item 1A.	Risk Factors	7
Item 2.	Properties	10
Item 3.	Legal Proceedings	10
Item 4.	Mine Safety Disclosures	10
PART II.
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	10
Item 6.	Selected Financial Data	12
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 7A.	Quantitative and Qualitative Disclosure about Market Risk	19
Item 8.	Financial Statements and Supplementary Data	20
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	20
Item 9A.	Controls and Procedures	20
Item 9B.	Other Information	21
PART III.		21
PART IV.		21
Item 15.	Exhibits, Financial Statement Schedules	21
SIGNATURES		22

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CAUTIONARY STATEMENT REGARDING

FORWARD-LOOKING INFORMATION

This Annual Report on Form 10-K and other reports issued by South Dakota Soybean Processors, LLC (including reports filed with the Securities and Exchange Commission (the “SEC” or “Commission”), contain “forward-looking statements” that deal with future results, expectations, plans and performance. Forward-looking statements may include statements which use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “predict,” “hope,” “will,” “should,” “could,” “may,” “future,” “potential,” or the negatives of these words, and all similar expressions. These forward-looking statements are made based on our expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements. We do not undertake any responsibility to release publicly any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this report. Additionally, we do not undertake any responsibility to update you on the occurrence of any unanticipated events which may cause actual results to differ from those expressed or implied by the forward-looking statements contained in this report. Important factors that could cause actual results to differ materially from our expectations are disclosed under “Risk Factors” and elsewhere in this report. As stated elsewhere in this report such factors include, among others:

• Changes in the weather or general economic conditions impacting the availability and price of soybeans and natural gas;

• Global, national and regional agricultural, economic, financial and commodities market, political, social, and health conditions;

• Fluctuations in U.S. oil consumption and petroleum prices;

• Changes in perception of food quality and safety;

• Damage to or loss of our facilities due to casualty, weather, mechanical failure or any extended or extraordinary maintenance or inspection that may be required; 

• Changes in business strategy, capital improvements or development plans;

• Changes in the availability of credit and interest rates;

• The availability of additional capital to support capital improvements, development and projects; and

• Other factors discussed under the item below entitled “Risk Factors.”

We are not under any duty to update the forward-looking statements contained in this report. We cannot guarantee future results or performance or what future business conditions will be like. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report.

PART I

Item 1. Business.

Overview

South Dakota Soybean Processors, LLC (“we,” “us,” “our” or the “Company”) owns and operates a soybean processing plant and a soybean oil refinery in Volga, South Dakota, which we have been operating since 1996 and 2002, respectively. We also own and operate an oilseed processing plant located approximately five miles east of Miller, South Dakota, which we have been operating since April 30, 2015. We are owned by approximately 2,200 members, most of whom reside in South Dakota and neighboring states and many of whom deliver and sell soybeans to our plants for processing.

Our core business consists of processing locally grown soybeans into soybean meal and soybean oil. Approximately 80% of a bushel of soybeans (60 pounds) is processed into soybean meal or hulls, and the remaining 20% is extracted as oil. We sell the soybean meal primarily to resellers, feed mills, and livestock producers as livestock feed. We market and sell multiple grades of soybean oil in either crude or refined format. Crude and refined soybean oil are marketed and sold to the food, biodiesel and chemical industries. Under certain market conditions, we may register and deliver warehouse receipts for crude oil according to the terms and conditions of a Chicago Board of Trade (CBOT) soybean oil futures contract.

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We strive to maintain a competitive position in the marketplace by producing high quality products, operating a highly efficient operation at the lowest possible cost, and adding value to our core products to capture larger margins. We continue to search for ways to improve on efficiencies by analyzing new methods of vertical integration, adding value to our products by investing in further processing of products, and reviewing new applications for our products in the food and energy fields. Although a primary objective is to maximize the issuance of cash distributions to our members from profits generated through operations, we recognize the need to maintain our financial strength by reinvesting and making capital improvements in our operations facilities.

General Development of Business

We were originally organized as a South Dakota cooperative in 1993. As a South Dakota cooperative, we were entitled to single-level, pass-through tax treatment on income generated through our members’ patronage. This allowed us to pass our income onto our members in the form of distributions without first paying taxes at the company level, similar to a partnership. As we grew, however, the continuing availability of this advantageous tax treatment became less secure. Therefore, we reorganized and converted from a cooperative into a South Dakota limited liability company in 2002 and have been operating as a multi-member South Dakota limited liability company, taxed as a partnership since then.

We began producing soybean meal, crude soybean oil, and soybean hulls in late 1996. Since this time we have continuously made significant capital improvements and expanded our business to include the development of vertically integrated product lines and services. In 2002, we completed the construction of a refining facility and began refining crude soybean oil. In 2003, we acquired ownership and management control of Urethane Soy Systems Company, a company engaged in the production and sale of various soybean oil-based polyurethane products, which we closed in December 2011 due to poor financial performance. In May 2011, we completed the construction and start-up of a deodorizer at our facility, which allows us to deodorize refined soybean oil and sell the oil directly to customers in the food industry. In December 2014, we purchased an oilseed processing plant located near Miller, South Dakota, approximately 100 miles west of our main facility in Volga. The Miller plant allows us to expand into new markets by processing identity-preserved soybeans, such as non-genetically modified organisms (GMO) and organic soybeans.

Industry Information

The soybean processing industry converts soybeans into soybean meal, soybean hulls and soybean oil. A bushel of soybeans typically yields approximately 44 pounds of meal, 4 pounds of hulls, and 11 pounds of crude oil when processed. While the meal and hulls are mostly consumed by animals, food ingredients are the primary end use for the oil. Crude soybean oil is generally refined for use as salad and cooking oil, baking and frying fat, and to a more limited extent, for industrial uses. Increasingly, the sale of soybean oil for human consumption is impacted by the regulation of trans-fat, which results from the hydrogenation process of products such as soybean oil and plant oils. The U.S. Food and Drug Administration requires that food processors disclose the level of trans-fatty acids contained in their products. In addition, various local governments in the U.S. have enacted, or are considering enacting, restrictions on the use of trans-fats in restaurants. As a result, many food manufacturers have reduced the amount of hydrogenated soybean oil included in their products or switched to other oils containing lower amounts of trans-fat.

Soybean production is heavily concentrated in the central U.S., Brazil, Argentina and China. In the 2019 harvest season, the U.S. produced approximately 3.56 billion bushels of soybeans, approximately 23% lower than 2018, and approximately 29% of estimated world production. The USDA estimates that approximately 59% of soybeans produced in the U.S. are processed domestically, 51% are exported as whole soybeans, and 4% are retained for seed and residual use. Historically, there has been an adequate supply of soybeans produced in South Dakota and the upper Midwest for the soybean processing industry. In 2019, farm producers in South Dakota produced 146.2 million bushels of soybeans, ranking it tenth among the top producing states in the U.S. as set forth in the following table:

State	Production (bushels)
Illinois	532 million
Iowa	502 million
Minnesota	298 million
Nebraska	283 million
Indiana	273 million

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State	Production (bushels)
Missouri	230 million
Ohio	209 million
Kansas	186 million
North Dakota	174 million
South Dakota	146 million

Soybean processing facilities are generally located close to adequate sources of soybeans and a strong demand for meal to decrease transportation costs. Soybean meal is predominantly consumed by poultry and swine in the U.S. On average, exports of soybean meal account for 20% to 30% of total production.

Soybean oil refineries are also generally located close to soybean processing plants. Oil is shipped throughout the U.S. and for export. The USDA estimates that approximately 60% of domestic oil production is used in food, feed and industrial applications, 32% in biodiesel production, and 8% is exported.

Soybean crushing and refining margins are cyclical, characteristic of a mature, competitive industry. While the price of soybeans may fluctuate substantially from year to year, the prices of meal and oil generally track that of soybeans, although not necessarily on a one-for-one basis; therefore, margins can be variable.

The soybean industry continues diligently to introduce soy-based products as bio-based substitutes for various petroleum-based products. These products include biodiesel, soy ink, lubricants, candles and plastics. Biodiesel, a substitute for standard, petroleum-based diesel fuel, has experienced slow but erratic growth in the U.S. From the late-1990s to 2008, biodiesel experienced steady growth, only to stagnate between 2008 and 2010 due to overcapacity in the industry, price volatility in the petroleum oil market, and volatile input costs. Since 2011, the biodiesel market has been in a growth phase following the expansion of the Renewable Fuel Standard (RFS) program and resumption of the biodiesel blenders’ tax credit.

Products & Services

We process soybeans at our two crushing plants to extract the soybean oil from the protein and fiber portions of the soybean. Approximately 80% of a soybean bushel is processed and sold as soybean meal or hulls. The remaining percentage of the soybean is extracted as crude soybean oil. The crude soybean oil is sold directly to customers, or processed into refined soybean oil for future sale.

Raw Materials and Suppliers

We purchase soybeans for processing from local soybean producers and elevators, of which there has been adequate supply historically. In 2019, producers in South Dakota grew and harvested approximately 146 million bushels, compared to 275 million in 2018, 241 million in 2017, 256 million in 2016, and 236 million bushels in 2015. Of this amount, we processed 33.0 million bushels in 2019, compared to 33.2 million bushels in 2018, 31.6 million in 2017, 31.7 million in 2016, and 29.9 million bushels in 2015. We control the flow of soybeans into our facilities with a combination of pricing and contracting options. Threats to our soybean supply include weather, changes in government programs, and competition from other processors and export markets.

Utilities

Volga, South Dakota

We use natural gas and electricity to operate the crushing and refining plants in Volga, South Dakota. Natural gas is used in the boilers for processing heat and for drying soybeans. NorthWestern Corporation, Sioux Falls, South Dakota, provides for the delivery of natural gas to us on an interruptible basis. We are at risk to adverse price fluctuations in the natural gas market, but we have the capability to use fuel oil and biofuel as a backup for natural gas if delivery is interrupted or market conditions dictate. We also employ forward contracting to offset some of this risk. Our electricity is supplied by the City of Volga, South Dakota.

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Miller, South Dakota

We use electricity to operate the mechanical press plant in Miller, South Dakota, as natural gas distribution lines are not located in the area. Our electricity is provided by NorthWestern Corporation, Sioux Falls, South Dakota.

Employees

We currently employ approximately 121 individuals, all but seven of whom are full-time. We have no unions or other collective bargaining agreements.

Sales, Marketing and Customers

Our soybean meal is primarily sold to resellers, feed mills, and livestock producers as livestock feed. The meal is primarily sold to customers in the local area (typically within 200 miles of our Volga facility), Western U.S., and Canada. Our crude soybean oil is sold to refining companies for further processing, or it is refined at our facilities and sold directly to the food industry for human consumption or biodiesel industry as transportation fuel.

The table presented below represents the percentage of sales by quantity of product sold within various markets for 2019.

Market	Soybean  Meal	Crude Soybean Oil	Refined Oil
Local	44%	36%	26%
Other U.S. States	25%	58%	69%
Export	31%	6%	5%

Over half of our products are shipped by rail, the service of which is provided by the Rapid City, Pierre & Eastern (RCP&E) rail line, with connections to the Burlington-Northern Santa Fe, Canadian Pacific (CP), and the Union Pacific rail lines. On June 1, 2014, our rail line was sold by CP to RCP&E, which is owned and operated by Genesee & Wyoming, Inc.

All of our assets and operations are domiciled in South Dakota, and all of the products sold are produced in South Dakota.

Dependence upon a Single Customer

None.

Competition

We are in direct competition with several other soybean processing companies in the U.S., many of which have significantly greater resources than we do. The U.S. soybean processing industry is comprised primarily of 16 different companies operating 64 plants in the U.S. It is a mature, consolidated and vertically-integrated industry with four companies controlling nearly 84% of the processing industry. Those four companies are Archer Daniels Midland (ADM), Bunge, Cargill and Ag Processing (AGP). The U.S. vegetable oil (including soybean oil) refining industry is divided between oilseed processors and independent vegetable oil refiners. The oilseed processors operate approximately 83% of the vegetable oil refining capacity in the U.S., and ADM, Bunge, Cargill and AGP operate approximately 68% of the oil refining capacity. The three largest independent vegetable oil refiners are ACH Foods (in joint venture with ADM), Smuckers (Proctor & Gamble), and ConAgra (Hunt-Wesson).

We were the only operating soybean processing plants in South Dakota until last year. In the summer of 2019, AGP completed construction and began operating a new processing plant in northeast South Dakota. This plant could intensify the competition for the purchase of soybeans in certain areas of South Dakota from which we now purchase as well as the sale of our products throughout our trade area. Our processing facilities represent approximately 7% of the total soybean processing capacity in the upper Midwest and about 1.3% in the U.S. We continue to maintain our competitive position in the market by producing high quality products and operating highly efficient operations at the

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lowest possible cost. Adding value to our products is a consistent objective. Most recently, for example, we invested in Prairie AquaTech, LLC and its various affiliates, an early-stage company engaged in the research and development of high quality protein ingredients derived from soybeans, The investment culminated this past summer (2019) in the construction and operation of a new production facility adjacent to our Volga plant.

Government Regulation and Environmental Matters

Our business is subject to laws and related regulations and rules designed to protect the environment which are administered by the U.S. Environmental Protection Agency, the South Dakota Department of Environment and Natural Resources and similar government agencies. These laws, regulations and rules govern the discharge of materials to the environment, air and water; reporting storage of hazardous wastes; the transportation, handling and disposition of wastes; and the labeling of pesticides and similar substances. Our business is also subject to laws and related regulations and rules administered by other federal, state, local and foreign governmental agencies that govern the processing, storage, distribution, advertising, labeling, quality and safety of feed and grain products. Failure to comply with these laws, regulations and rules could subject us to administrative penalties, injunctive relief, civil remedies and possible recalls of products.

Available Information

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to the Securities Exchange Act of 1934, as amended, are filed with the SEC. These reports and other information filed by us with the SEC are available on the SEC website (www.sec.gov). The SEC maintains an Internet site that contains reports, proxy, and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of these websites are not incorporated into this filing. Our website is at www.sdsbp.com.

Item 1A. Risk Factors.

We are affected by changes in commodity prices. Our revenues, earnings and cash flows are affected by market prices for commodities such as crude petroleum oil, natural gas, soybeans, and crude and refined vegetable oils. Commodity prices generally are affected by a wide range of factors beyond our control, including weather, disease, insect damage, drought, the availability and adequacy of supply, government regulation and policies, and general political and economic conditions. In addition, we are exposed to the risk of nonperformance by counterparties to contracts. Risk of nonperformance by counterparties includes the inability to perform because of a counterparty’s financial condition and also the risk that the counterparty will refuse to perform a contract during a period of price fluctuations where contract prices are significantly different than the current market prices.

We are subject to global and regional economic downturns and risks relating to turmoil in global financial markets. The level of demand for our products is increasingly affected by regional and global demographic and macroeconomic conditions, including population growth rates and changes in standards of living. A significant downturn in global economic growth, or recessionary conditions in major geographic regions, may lead to reduced demand for agricultural commodities which could adversely affect our business and results of operations. Additionally, weak global economic conditions and turmoil in global financial markets, including constraints on the availability of credit, have in the past adversely affected, and may in the future continue to adversely affect, the financial condition and creditworthiness of some of our customers, suppliers and other counterparties which in turn may negatively impact our business. Any deterioration in economic conditions due to the current coronavirus concerns originating in China, could negatively impact our supply of soybeans and customers, which could negatively impact our ability to market and sell our products and our business.

We could be affected by higher than anticipated operating costs, including but not limited to increased prices for soybeans. In addition to general market fluctuations and economic conditions, we could experience significant cost increases associated with the ongoing operation of our soybean processing and refining plants caused by a variety of factors, many of which are beyond our control. These cost increases could arise from an inadequate local supply of soybeans and a resulting price increase which is not accompanied by an increase in the price for soybean meal and oil. Labor costs can also increase over time, particularly if there is a shortage of labor, or shortage of persons with the skills necessary to operate our facility. Adequacy and cost of electric and natural gas utilities could also affect our operating costs. Changes in price, operation and availability of truck and rail transportation may affect our profitability with respect to the transportation of soybean meal, oil and other products to our customers.

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It may become more difficult to sell our soybean oil for human consumption. The U.S. Food and Drug Administration requires food manufacturers to disclose the levels of trans-fatty acids contained in their products. In addition, various local governments in the U.S. are considering, and some have enacted, restrictions on the use of trans-fats in restaurants. Several food processors have either switched or indicated an intention to switch to edible oil products with lower levels of trans-fatty acids. Because processing soybean oil, particularly hydrogenation, creates trans-fat, it may become difficult to sell our oil to customers engaged in the food industry which could adversely affect our revenues and profits.

Hedging transactions involve risks that could harm our profitability. To reduce our price change risks associated with holding fixed price commodity positions, we generally take opposite and offsetting positions by entering into commodity futures contracts (either a straight futures contract or an options futures contract) for soybeans, soybean meal and crude soybean oil on the Chicago Board of Trade. While hedging activities reduce our risk of loss from changing market values, such activities also limit the gain potential which otherwise could result from those market fluctuations. Our policy is to maintain hedged positions within limits, but we can be long or short at any time. In addition, at any one time, our inventory and purchase contracts for delivery to our facility may be substantial, which could limit our ability to adjust our hedged positions. If our risk management policies and procedures that guide our net position limits are inadequate, we could suffer adverse financial consequences.

Our business is not diversified. Our success depends on our ability to profitably operate our soybean processing and soybean oil refining plants. We do not have any other lines of business or other sources of revenue if we are unable to operate our soybean processing and soybean oil refining plants. This lack of diversification may limit our ability to adapt to changing business conditions and could cause harm to our business.

We are dependent on our management and other key personnel, and loss of their services may adversely affect our business. Our success and business strategy is dependent in large part on our ability to attract and retain key management and operating personnel. This can present particular challenges for us because we operate in a specialized industry and because our business is located in a rural area. Key employees are in high demand and are often subject to competing employment offers in the agricultural value-added industries within the local and regional area. Any loss of the key employees or the failure of these individuals to perform their job functions in a satisfactory manner would have a material adverse effect on our business operations and prospects.

We operate in an intensely competitive industry and we may not be able to continue to compete effectively. We may not be able to continue to successfully penetrate the markets for our products. The soybean processing business is highly competitive, and other companies presently in the market, or that could enter the market, could adversely affect prices for the products we sell. We compete with other soybean processors such as Archer-Daniels Midland (ADM), Cargill, Bunge, and Ag Processing (AGP), among others, all of which are capable of producing significantly greater quantities of soybean products than we do, and may achieve higher operating efficiencies and lower costs due to their scale. A new processing plant owned by AGP in northeast South Dakota could increase the competition for soybeans and adversely affect our business.

Our profitability is influenced by the protein and moisture content of the soybeans in the local growing area. The northern portion of the western soybean belt, where our two soybean crushing plants are located, typically produces a lower protein soybean resulting in a lower protein soybean meal. Because lower protein soybean meal is sold at a lower price, we may not be able to operate as profitably as soybean processing plants in other parts of the country. If adverse weather conditions further reduce the protein content of the soybeans grown in our area, our business may be materially harmed because we will be required to sell our soybean meal at discounted prices to our customers.

In addition, the moisture content of the soybeans that are delivered to our plants also influences our profitability and the efficiency of our plant operations. Soybeans with high moisture content require more energy to dry them before they can be processed. While we may recover some of these extra energy costs by paying producers less for high moisture soybeans, these savings may not be sufficient to offset our additional operating expenses.

Because soybean processing and refining is energy intensive, our business will be materially harmed if energy prices increase substantially. Electricity prices have steadily increased the last few years, and natural gas prices have fluctuated historically. Currently, natural gas prices are at very low levels. If the trend in electricity prices continues, any significant increase in the price of natural gas will increase our energy costs and adversely affect our profitability and operating results. In addition, there are no natural gas distribution lines near the processing plant near Miller, South Dakota, making electricity the only current source of energy at the Miller facility.

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Transportation costs are a factor in the price of soybean meal and oil, and increased transportation costs could adversely affect our profitability. Soybean meal and oil may be shipped by trucks, rail cars, and barges. Added transportation costs are a significant factor in the price of our products, and we may be more vulnerable to increases in transportation costs than other producers because our locations in Volga and Miller are more remote than that of most of our competitors. Today, most of our products are sold FOB Volga or Miller, South Dakota, and those that are not, have the full transportation cost added to the contract. Transportation costs do not currently affect our margin directly; however, the added costs could eventually affect demand for our products.

Increases in the production of soybean meal or oil could result in lower prices for soybean meal or oil and have other adverse effects. Existing soybean processing and refining plants could construct additions to increase their production, and new soybean processing and refining plants could be constructed as well. AGP's new processing plant, for example, in northeast South Dakota, was built and became operational in the summer of 2019. If there is not a corresponding increase in the demand for soybean meal and oil, or if the increased demand is not significant, the increased production of soybean meal and oil may lead to lower prices for soybean meal and oil. The increased production of soybean meal and oil could have other adverse effects as well. The increased production of soybean meal and oil could result in increased demand for soybeans, in turn leading to higher prices for soybeans, resulting in higher costs of production and lower profits.

Legislative, legal or regulatory developments could adversely affect our profitability. We are subject to extensive air, water and other environmental laws and regulations at the federal and state level. In addition, some of these laws require our plant to operate under a number of environmental permits. These laws, regulations and permits can often require pollution control equipment or operational changes to limit actual or potential impacts to the environment. A violation of these laws and regulations or permit conditions can result in substantial fines, damages, criminal sanctions, permit revocations and/or plant shutdowns.

New environmental laws and regulations, including new regulations relating to alternative energy sources and the risk of global climate change, new interpretations of existing laws and regulations, increased governmental enforcement or other developments could require us to make additional unforeseen expenditures. It is expected that some form of regulation will be forthcoming at the federal level in the U.S. with respect to emissions of GHGs, (including carbon dioxide, methane and nitrous oxides). Also, new federal or state legislation or regulatory programs that restrict emissions of GHGs in areas where we conduct business could adversely affect our operations and demand for our products. New legislation or regulator programs could require substantial expenditures for the installation and operation of equipment that we do not currently possess or substantial modifications to existing equipment.

In addition, although our production of soybean meal and oil is not directly regulated by the U.S. Food & Drug Administration, we must comply with the FDA’s content and labeling requirements, which are monitored at our customers’ facilities. Failure to comply with these requirements could result in fines, liability to our customers or other consequences that could increase our operating costs and reduce profits. In addition, changes to the FDA’s rules or regulations could be adopted that would increase our operating costs and expenses, or require capital investment.

We are subject to industry-specific risks that could adversely affect our operating results. These risks include, but are not limited to, product quality or contamination; shifting consumer preferences; federal, state, and local food processing regulations; socially unacceptable farming practices; environmental, health and safety regulations; and customer product liability claims. Any liability resulting from these risks may not always be covered by, or could exceed liability insurance related to product liability and food safety matters maintained by us. The occurrence of any of the matters described above could adversely affect our revenues and operating results. Our products are used as ingredients in livestock and poultry feed. Thus, we are subject to risks associated with the outbreak of disease in livestock and poultry, including, but not limited to, African Swine Fever (ASF), mad-cow disease and avian influenza. The outbreak of disease could adversely affect demand for our products used as ingredients in livestock and poultry feed. A decrease in demand for these products could adversely affect our revenues and operating results.

We could face increased operating costs if we were required to segregate genetically modified soybeans and the products generated from these soybeans. Over the last several years, some soybean producers in our area have been planting genetically modified, or GMO, soybeans, commonly known as Round-up Ready beans. Neither the U.S. Department of Agriculture nor the FDA currently requires that genetically modified soybeans be segregated from other soybeans. If these agencies or our customers were to require that we process these genetically modified soybeans separately, we would face increased storage and processing costs and our profitability could be harmed.

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There is no public market for our units. There is no public trading market for our units. While we have established a private online matching service in order to facilitate the transfer of units among our members, the transfer of units on this service is severely limited. The service has been designed to comply with federal tax laws and IRS regulations governing a “qualified matching service,” as well as state and federal securities laws. Under these rules, there are detailed timelines and restrictions that must be followed with respect to offers and sales of units. As a result, units held by our members may not be easily resold and members may be required to hold their units indefinitely. Even if a member is able to resell units, the price may be less than the member's original investment for the units or may otherwise be unattractive to the member.

There are significant restrictions on the transfer of our units. To protect our status as a partnership for federal income tax purposes and to assure no public trading market for our units develops or exists, our units are subject to significant restrictions on transfer. All transfers of units must comply with the transfer provisions of our operating agreement and the capital units transfer system and are subject to approval by our board of managers. Our board of managers reserves the right not to approve any transfer of units that could cause us to lose our partnership tax status or violate federal or state securities laws. As a result, members may not be able to transfer their units and may be required to assume the risks of the investment for an indefinite period of time.

Item 2. Properties.

We conduct our operations principally at our two facilities in Volga, South Dakota and Miller, South Dakota.

At our Volga facility, we own the land, consisting of 98 acres, on which most of the infrastructure and physical properties rest. Our facilities consist of a soybean processing plant, a soybean oil refinery and deodorizer, a quality control laboratory, and administrative and operations buildings.

At our Miller facility, we own the land, consisting of approximately 24 acres, on which the soybean processing plant and operations building rest.

All of our tangible property, real and personal, serves as collateral for our debt instruments with our primary lender, CoBank, ACB, of Greenwood Village, Colorado, which is described below under “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operation—Indebtedness.”

Item 3. Legal Proceedings.

From time to time in the ordinary course of our business, we may be named as a defendant in legal proceedings related to various issues, including without limitation, workers’ compensation claims, tort claims, or contractual disputes. We carry insurance that provides protection against general commercial liability claims, claims against our directors, officers and employees, business interruption, automobile liability, and workers’ compensation claims. We are not currently involved in any material legal proceedings and are not aware of any potential claims.

Item 4. Mine Safety Disclosures.

None.

Part II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

As of December 31, 2019 and March 1, 2020, there were 2,207 members of record and a total of 30,419,000 Class A capital units issued and outstanding. We did not make any repurchases of Class A units during the fiscal year 2019 .

Trading Activity

Our capital units are not traded on an exchange or otherwise publicly traded and are subject to significant restrictions on transfer. Most transfers of capital units are conducted through a “qualified matching service” as defined by the publicly-traded partnership rules of the federal tax code. Under the qualified matching service, bids for capital units submitted by interested buyers and sellers are matched on the basis of a strict set of rules and conditions set forth under the federal tax code and by us; plus, all matching and transfers are subject to approval by our board of managers.

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Our qualified matching service is operated through www.AgStockTrade.com, an SEC-registered and regulated Alternative Trading Service which is owned and operated by Variable Investment Advisors, Inc., Sioux Falls, South Dakota, a registered broker-dealer with the SEC, FINRA, and various states. The following table contains historical information by quarter for the past two years regarding the matching of capital units through the qualified matching service:

Quarter	Low Price (1)		High Price (1)		Average Price		# of Capital Units Matched
First Quarter 2018	$	3.30	$	3.43	$	3.39	60,000
Second Quarter 2018	$	3.37	$	4.42	$	3.40	78,500
Third Quarter 2018	$	3.19	$	3.23	$	3.20	33,000
Fourth Quarter 2018	$	3.20	$	3.38	$	3.28	37,500
First Quarter 2019	$	3.24	$	3.44	$	3.30	95,000
Second Quarter 2019	$	3.48	$	3.75	$	3.60	59,000
Third Quarter 2019	$	3.75	$	3.77	$	3.76	17,500
Fourth Quarter 2019	$	3.50	$	3.60	$	3.54	34,000

(1) The qualified matching service rules prohibit firm bids; therefore, the prices reflect actual sale prices of the capital units.

Transfer Restrictions

As a limited liability company, we must severely restrict trading and transfers of our capital units in order to preserve our preferential single-level "partnership" tax status at the member level. To preserve this, our operating agreement prohibits transfers of capital units other than through the procedures specified under our capital units transfer system, or CUTS, which may be amended from time to time by our board of managers. Under the CUTS, our capital units cannot be traded on any national securities exchange or in any over-the-counter market. Also, we cannot permit the total number of capital units traded annually through the qualified matching service to exceed 10% of our total issued and outstanding capital units. All transactions, including any trades on the qualified matching service, must be approved by the board of managers, which are generally approved if they fall within “safe harbors” contained in the rules of the federal tax code. Permitted transfers include transfers by gift or death, sales to qualified family members, and trades through the qualified matching service subject to the 10% restriction. Pursuant to our operating agreement, a minimum of 2,500 capital units is required to be owned by an individual or entity for membership, and no member may own more than 10% of our total outstanding capital units.

Distributions to Members

We issued to our members a cash distribution of $15.2 million (50.0¢ per capital unit) and $5.1 million (16.7¢ per capital unit) in the years ended December 31, 2019 and 2018, respectively. On January 21, 2020, our board of managers approved a cash distribution to our members of approximately $6.7 million (22.0¢ per capital unit), which was issued to our members on or about February 7, 2020. Our distributions are declared at the discretion of our board of managers and are issued in accordance with the terms of our operating agreement and distribution policy. Distributions are also subject to restrictions imposed under our loan agreement with our lender. There is no assurance as to if, when, or how much we will make in distributions in the future. Actual distributions depend upon our profitability, expenses and other factors discussed in this report.

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Item 6. Selected Financial Data.

The following table sets forth selected financial data of South Dakota Soybean Processors, LLC for the periods indicated. The financial statements included in Item 8 of this report were audited by Eide Bailly LLP.

	2019			2018			2017			2016			2015
Bushels processed	33,045,418			33,232,663			31,577,132			31,735,399			29,923,155
Statement of Operations Data:
Revenues	$	371,275,766		$	391,764,683		$	375,759,337		$	377,931,693		$	367,560,428
Costs & expenses:
Cost of goods sold	(356,475,930		)	(362,601,571		)	(364,150,130		)	(363,829,609		)	(342,658,664		)
Operating expenses	(3,624,306		)	(3,834,845		)	(3,211,255		)	(3,441,446		)	(3,567,038		)
Operating profit (loss)	11,175,530			25,328,267			8,397,952			10,660,638			21,334,726
Non-operating income (loss)	723,812			1,448,980			(1,171,034		)	2,340,072			2,168,860
Interest expense	(919,157		)	(897,942		)	(457,909		)	(413,863		)	(551,180		)
Income tax benefit (expense)	(600		)	(1,960		)	(1,941		)	6,209			(570		)
Income (loss) from continuing operations	10,979,585			25,877,345			6,767,068			12,593,056			22,951,836
Gain (loss) on discontinued operations	—			—			—			—			—
Net income (loss)	$	10,979,585		$	25,877,345		$	6,767,068		$	12,593,056		$	22,951,836
Weighted average capital units outstanding	30,419,000			30,419,000			30,419,000			30,419,000			30,419,000
Net income (loss) per capital unit	$	0.361		$	0.851		$	0.222		$	0.414		$	0.755
Balance Sheet Data:
Working capital	$	21,322,260		$	19,425,996		$	15,668,312		$	21,794,589		$	28,143,049
Net property, plant & equipment	64,517,204			59,068,014			55,531,308			44,751,140			40,921,077
Total assets	158,104,992			144,854,183			123,216,647			121,240,557			122,914,781
Long-term obligations	15,307,727			5,796,382			5,102,818			724,035			787,096
Members’ equity	85,947,333			90,177,248			69,375,206			72,052,927			74,508,352
Other Data:
Capital expenditures	$	10,066,719		$	8,026,131		$	14,494,447		$	7,065,332		5,225,636
Distributions to members	$	15,209,500		$	5,075,303		$	9,444,789		$	15,048,481		$	15,048,481
Distributions to members per capital unit	$	0.500		$	0.167		$	0.310		$	0.495		$	0.495

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion along with our financial statements and the notes to our financial statements included elsewhere in this report. The following discussion contains forward-looking statements that are subject to risks, uncertainties and assumptions. Our actual results, performance and achievements may differ materially from those expressed in, or implied by, such forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Information” at the beginning of this report.

Overview and Executive Summary

In 2019, we recorded a net income of $11.0 million, compared to our record breaking profit of $25.9 million in 2018. The $14.9 million decrease in profit is the result of several factors including adverse weather, increased soybean processing in the U.S. and increased production costs.

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Heavy snow and rainfall during the spring of 2019 caused severe flooding in our area. Local farmers were forced to delay planting or elected to reduce planting or not plant at all, which left a significant number of unplanted fields in South Dakota. According to the USDA, South Dakota's soybean production decreased from 275 million bushels in 2018 to only 146 million in 2019. As a result, fewer soybeans were available to purchase, leading to increases in soybean prices, deteriorating soybean crush margins.

In addition, China's implementation of a 25% tariff on U.S. soybeans in May 2018 effectively halted soybean exports to China. This in turn shifted China to purchase soybeans from other countries such as Brazil and Argentina. Since China does not typically purchase or import soybean meal or oil, soybean meal and oil prices did not decrease at the same rate as soybeans, leading to unprecedented board crush levels in 2018. In 2019, however, U.S. soybean processing facilities, in effort to capitalize on high crushing margins, increased their production capacity, which returned margins to historically average levels.

Production cost increases were caused by a longer than expected annual maintenance shutdown at our Volga facility in August 2019. During the shutdown, we had to make extensive repairs and replace various process equipment. As a result, maintenance expenses, which are part of production costs, increased by approximately $3.1 million in 2019.

Looking forward, we anticipate that it will be difficult to find and purchase soybeans at reasonable prices until this fall's harvest. This has forced us to search for soybeans outside of our normal region and pay in terms of price, narrowing our profit margins in the process. The quality of soybeans is an issue as well. The wet growing season has meant additional drying time for soybeans before processing, reducing our crush capacity and negatively impacting our margins. Yet there is some good news to report. Hog inventory numbers in South Dakota have increased steadily and improved local demand for soybean meal. In addition, oil demand has remained strong due to the renewed biodiesel producers' tax credit.

We continue to experience modest growth in demand for non-GMO products. Although non-GMO products are only a tiny fraction of our overall production, the non-GMO market is well-suited for our Miller facility given its smaller size. We are also taking strategic steps to secure our market and customers, understanding there will be increased processing capacity from competitors across the United States, including some in South Dakota.

Results of Operations

Comparison of Years Ended December 31, 2019 and 2018

	Year Ended December 31, 2019					Year Ended December 31, 2018
	$			% of Revenue		$			% of Revenue
Revenue	$	371,275,766		100.0		$	391,764,683		100.0
Cost of revenues	(356,475,930		)	(96.0	)	(362,601,571		)	(92.6	)
Operating expenses	(3,624,306		)	(1.0	)	(3,834,845		)	(1.0	)
Other income (expense)	(195,345		)	(0.1	)	551,038			0.1
Income tax (expense), net	(600		)	—		(1,960		)	—
Net income (loss)	$	10,979,585		3.0		$	25,877,345		6.6

Revenue – Revenue decreased $20.5 million, or 5.2%, for the year ended December 31, 2019, compared to the same period in 2018. The decrease in revenues is primarily due to a 7.0% decrease in the average sales price of soybean meal. Soybean meal prices were affected by increased production of U.S. soybeans during the year ended December 31, 2019, compared to the same period in 2018. Due to a record sized soybean crop in the fall of 2018 and the trade dispute with China, soybean processors in the U.S. operated at full capacity, and in some cases increased capacity, in effort to maximize margins.

Gross Profit/Loss – Gross profit decreased $14.4 million, or 49.3%, during 2019, compared to 2018. The decrease in gross profit is primarily due to adverse weather conditions in our soybean procurement area, increased soybean processing in the U.S., and increased maintenance costs. Severe flooding arising from heavy snow and rainfall in the spring of 2019 caused local farmers to delay, reduce planting or elect not to plant at all. Consequently, soybean

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production in South Dakota decreased approximately 47% from 2018 to 2019, which increased soybean prices and narrowed soybean crush margins.

China further impacted gross profit. In May 2018, China implemented a 25% tariff on U.S. soybeans effectively halting soybean exports from the U.S. to China. China subsequently shifted soybean purchases to other countries such as Brazil and Argentina. Since China does not typically purchase or import soybean meal or oil, soybean meal and oil prices did not decrease at the same rate as soybeans, resulting in unprecedented board crush levels in 2018. By 2019, however, U.S. soybean processing facilities, in effort to capitalize on high crushing margins, increased their production capacity, which returned crush margins to historically average levels.

Maintenance expenses also adversely affected margins. Our Volga facility completed its regularly scheduled annual maintenance shutdown in August 2019. Unfortunately, the shutdown was approximately twice as long in duration than in previous years due to extensive and necessary repairs and replacement of various process equipment. As a result, maintenance expenses increased by approximately $3.1 million in 2019, compared to 2018.

Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, decreased $211,000, or 5.5%, for the year ended December 31, 2019, compared to 2018. The decrease is primarily due to a decrease in personnel costs.

Interest Expense – Interest expense increased $21,000, or 2.4%, for the year ended December 31, 2019, compared to the same period in 2018. The increase in interest expense is due primarily to an increase in borrowings from our lines of credit. During the year ended December 31, 2019, the average debt level was approximately $19.1 million, compared to $18.8 million in 2018.

Other Non-Operating Income (Expense) – Other non-operating income, including patronage dividend income, decreased $725,000, or 50.0%, for the year ended December 31, 2019, compared to the same period in 2018. The decrease was primarily due to a $310,000 deterioration on gains (losses) on sale of property and equipment and an $184,000 decrease in compensation for management services. In 2019, we recorded $64,000 in losses on the sale of property and equipment, compared to a $246,000 gain during 2018. In April 2018, we entered into two agreements with Prairie AquaTech Manufacturing, LLC for a total of $1.72 million to perform various management and construction management services. During the year ended December 31, 2019, we recognized income of $759,000 from these two agreements, compared to $943,000 during the same period in 2018.

Net Income/Loss – We generated a net income of $11.0 million during the year ended December 31, 2019, compared to $25.9 million during the same period in 2018. The $14.9 million decrease in net income is primarily attributable to a decrease in revenues and gross profit.

Comparison of Years Ended December 31, 2018 and 2017

	Year Ended December 31, 2018					Year Ended December 31, 2017
	$			% of Revenue		$			% of Revenue
Revenue	$	391,764,683		100.0		$	375,759,337		100.0
Cost of revenues	(362,601,571		)	(92.6	)	(364,150,130		)	(96.9	)
Operating expenses	(3,834,845		)	(1.0	)	(3,211,255		)	(0.9	)
Other income (expense)	551,038			0.1		(1,628,943		)	(0.4	)
Income tax (expense), net	(1,960		)	—		(1,941		)	—
Net income (loss)	$	25,877,345		6.6		$	6,767,068		1.8

Revenue – Revenue increased $16.0 million, or 4.3%, for the year ended December 31, 2018, compared to the same period in 2017. The increase in revenues is primarily due to a 5.2% increase in the quantity of soybeans processed,which in turn increased our product sales volume. The increase in production is largely the result of recent capital improvements to expand processing capacity, reduce plant operation downtime and improve overall efficiency.

Gross Profit/Loss – Gross profit increased $17.6 million, or 151.2%, during the year ended December 31, 2018, compared to the same period in 2017. The increase in gross profit is primarily due to two factors, the effect of a severe

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drought in Argentina and the threat and imposition of tariffs by China on the U.S. soybean export market. The drought in Argentina, a country responsible for almost 30% of the world's soybean meal exports, shifted demand for meal to the U.S. and allowed producers like us to benefit from increased export opportunities. The threat and imposition of tariffs by China on U.S. soybeans resulted in a decrease in U.S. soybean prices, which improved processing margins for our products.

Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, increased $624,000, or 19.4%, for the year ended December 31, 2018, compared to 2017. The increase is primarily due to an increase in personnel costs.

Interest Expense – Interest expense increased $440,000, or 96.1%, for the year ended December 31, 2018, compared to the same period in 2017. The increase in interest expense is due primarily to an increase in interest rates on our senior debt with CoBank and increased borrowings, which resulted from an increase in capital investments. As of December 31, 2018, the interest rate on our revolving log-term loan was 4.96%, compared to 4.02% as of December 31, 2017. The average debt level during the year ended December 31, 2018 was approximately $18.8 million, compared to $10.6 million for the same period in 2017.

Other Non-Operating Income (Expense) – Other non-operating income, including patronage dividend income, improved $2.6 million, or 223.7%, for the year ended December 31, 2018, compared to the same period in 2017. On November 21, 2017, we sold our remaining equity interest in Minnesota Soybean Processors (MnSP) for $3.2 million, which resulted in a loss of approximately $1.5 million, compared to $0 in 2018.

Net Income/Loss – During the year ended December 31, 2018, we generated a net income of $25.9 million, compared to $6.8 million during the same period in 2017. The $19.1 million increase in net income is primarily attributable to an increase in gross profit associated with an increase in soybean processing, improved soybean meal value and reduced soybean costs.

Liquidity and Capital Resources

Our primary sources of liquidity are cash provided by operations and borrowings under our two lines of credit which are discussed below under “Indebtedness.” On December 31, 2019, we had working capital, defined as current assets less current liabilities, of approximately $21.3 million, compared to working capital of $19.4 million on December 31, 2018. Working capital increased between periods primarily due to net income in 2019. Based on our current plans, we believe that we will continue funding our capital and operating needs from cash from operations and revolving lines of credit.

Comparison of the Years Ended December 31, 2019 and 2018

	2019			2018
Net cash from (used for) operating activities	$	(3,347,017	)	$	30,477,437
Net cash (used for) investing activities	(9,968,606		)	(13,765,561		)
Net cash from (used for) financing activities	6,743,222			(10,198,317		)

Cash Flows From (Used For) Operating Activities

The $33.8 million change in cash flows provided by (used for) from operating activities is primarily attributed to a $14.9 million decrease in net income and a $7.8 increase in inventory in 2019, compared to a $1.3 million decrease in 2018. We increased crude oil inventory mainly due to complications starting up our refinery after the plant maintenance shutdown in August 2019.

Cash Flows From (Used For) Investing Activity

The $3.8 million decrease in cash flows used for investing activities between 2018 and 2019 was due to a decrease in investments in 2019, offset by an increase in capital improvements in 2019. In 2018, we made an equity investment of $6.3 million in Prairie AquaTech, LLC and its affiliates, compared to $0 in 2019. In 2019, however, we spent approximately $10.1 million on capital improvements to help improve the quality and efficiency of operations, compared to $8.0 million in 2018.

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Cash Flows From (Used For) Financing Activity

The $16.9 change in cash flows provided by (used for) financing activities is due to a $22.2 million change in net proceeds (payments) on borrowings from our credit facilities in 2019, compared to the same period in 2018. In 2019, net proceeds from borrowings was $17.7 million, compared to $4.5 million in net payments on borrowings in 2018. The change in net proceeds (payments) on borrowings was partially offset by a $10.1 million increase in cash distributions to members in 2019, compared to 2018.

Comparison of the Years Ended December 31, 2018 and 2017

	2018			2017
Net cash from operating activities	$	30,477,437		$	7,397,180
Net cash used for investing activities	(13,765,561		)	(11,151,829		)
Net cash used for financing activities	(10,198,317		)	(7,216,476		)

Cash Flows From (Used For) Operating Activities

The $23.1 million increase in cash flows from operating activities is primarily attributed to a $19.1 million increase in net income during 2018, compared to 2017.

Cash Flows From (Used For) Investing Activity

Cash flows used for investing activities increased approximately $2.6 million in 2018, compared to 2017, primarily due to a $6.3 million increase in investments and a $3.3 million decrease in proceeds from the sale of our cooperative investments. In 2018, we invested $6.3 million in Prairie AquaTech, LLC and its affiliates, compared to $0 in 2017. We also received $0.0 from the sales of cooperative investments in 2018, compared to $3.3 million from the sale of our remaining ownership interest in Minnesota Soybean Processors (MnSP), Brewster, Minnesota, in 2017. Partially offsetting the increases in cash used for investing activities was a $6.5 million reduction on capital improvements in 2018, compared to 2017. We spent approximately $8.0 million on capital improvements in 2018, compared to $14.5 million in 2017.

Cash Flows From (Used For) Financing Activity

The $3.0 increase in cash flows used for financing activities is principally due to a $7.3 million change in net proceeds (payments) on borrowings from our credit facilities in 2018, compared to the same period in 2017. In 2018, we had $5.1 million in net payments on borrowings, compared to $2.2 million in net proceeds from borrowings in 2017. Partially offsetting the change in net proceeds (payments) on borrowings is a $4.4 million decrease in cash distributions to members in 2018.

Indebtedness

We have two lines of credit with CoBank, our primary lender, to meet the short and long-term needs of our operations. The first credit line is a revolving long-term loan. Prior to the amendments described below, we could borrow funds on this loan as needed up to the credit line maximum, or $16.0 million, and then pay down the principal whenever excess cash is available. Repaid amounts may be borrowed up to the available credit line. The amount available for borrowing continually decreases by $2.0 million every six months until the credit line’s maturity on September 20, 2023. We pay a 0.40% annual commitment fee on any funds not borrowed. The principal balance outstanding on the revolving term loan is $16.0 million and $0.0 as of December 31, 2019 and 2018, respectively. Under this loan, there were no additional funds available to be borrow as of December 31, 2019.

The second credit line is a revolving working capital (seasonal) loan. The primary purpose of this loan is to finance our operating needs. Prior to the amendments described below, the maximum we could borrow under this line was $20 million until the loan's maturity on February 1, 2020. We pay a 0.20% annual commitment fee on any funds not borrowed; however, we have the option to reduce the credit line during any given commitment period listed in the agreement to avoid the commitment fee. As of December 31, 2019 and 2018, there were advances outstanding on the seasonal loan of $1.7 million and $0.0, respectively. Under this loan, there were $18.3 million in available funds to borrow as of as of December 31, 2019.

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Both loans with CoBank are set up with a variable rate option. The variable rate is set by CoBank and changes weekly on the first business day of each week. We also have a fixed rate option on both loans allowing us to fix rates for any period between one day and the entire commitment period. The annual interest rate on the revolving term loan is 4.24% and 4.96% as of December 31, 2019 and 2018, respectively. As of December 31, 2019 and 2018, the interest rate on the seasonal loan is 3.99% and 4.71%, respectively. We were in compliance with all covenants and conditions under the loans as of December 31, 2019.

On January 27, 2020, we entered into amendments of our credit agreement, revolving long-term loan, and seasonal loan with CoBank. Under the amendment of our revolving long-term note, the maximum amount that we may borrow is increased from $16 million to $26 million. The amount available for borrowing will still decrease by $2 million every six months beginning on March 20, 2020, however, there will be a scheduled balloon payment for the remaining balance on the loan's maturity date on September 20, 2023. Under the seasonal note, the principal amount that we may borrow is increased from $20 million to $28 million until the loan's maturity on December 1, 2020. All other material items and conditions under the credit agreement, and subsequent amendments to such agreement, remain the same following these amendments.

We also have a loan with the State of South Dakota Department of Transportation in connection with previous improvements made to the railway infrastructure near our soybean processing plant in Volga, South Dakota. Under this loan, we made annual principal and interest payments of $75,500. On the maturity date of this loan, which is June 1, 2020, a balloon payment for the remaining principal balance will be necessary. The principal balance outstanding on this loan was $603,342 and $665,222 as of December 31, 2019 and 2018, respectively.

Capital Expenditures

A total of $10.1 million was made in capital expenditures for property and equipment in 2019, compared to approximately $8.0 million in 2018. Improvements were made to enhance the quality and efficiency of our soybean crushing facility and oil refinery in Volga, South Dakota, and our small oilseed processing plant near Miller, South Dakota. Depending upon our profitability, we anticipate spending between $8.0 million and $12.0 million for capital improvements in 2020, which will be financed from cash flows from operating activities and long-term debt financing.

Off Balance Sheet Financing Arrangements

We do not utilize variable interest entities or other off-balance sheet financial arrangements.

Contractual Obligations

The following table shows our contractual obligations for the periods presented:

	Payment due by period
CONTRACTUAL OBLIGATIONS	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-Term Debt Obligations (1)	$	17,817,000	$	5,052,000	$	8,595,000	$	4,170,000	$	—
Operating Lease Obligations	6,391,000		2,791,000		3,043,000		354,000		203,000
Total	$	24,208,000	$	7,843,000	$	11,638,000	$	4,524,000	$	203,000

(1) Represents principal and interest payments on our notes payable, which are included on our Balance Sheet.

Recent Accounting Pronouncements

See page F-10, Note 1 of our audited financial statements for a discussion on the impact, if any, of the recently pronounced accounting standards.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Preparation of our financial statements requires estimates and judgments to be made that affect the amounts of assets, liabilities, revenues and expenses reported. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. We continually evaluate these estimates based on historical experience and other assumptions that we believe to be reasonable under the circumstances.

The difficulty in applying these policies arises from the assumptions, estimates, and judgments that have to be made currently about matters that are inherently uncertain, such as future economic conditions, operating results and valuations as well as management intentions. As the difficulty increases, the level of precision decreases, meaning that actual results can and probably will be different from those currently estimated.

Of the significant accounting policies described in the notes to the financial statements, we believe that the following may involve a higher degree of estimates, judgments, and complexity:

Commitments and Contingencies

Contingencies, by their nature relate to uncertainties that require management to exercise judgment both in assessing the likelihood that a liability has been incurred, as well as in estimating the amount of the potential expense. In conformity with accounting principles generally accepted in the U.S., we accrue an expense when it is probable that a liability has been incurred and the amount can be reasonably estimated.

Inventory Valuation

We account for our inventories at estimated market value. These inventories are agricultural commodities that are freely traded, have quoted market prices, may be sold without significant further processing, and have predictable and insignificant costs of disposal. We derive our estimates from local market prices determined by grain terminals in our area. Processed product price estimates are determined by the ending sales contract price as of the close of the final day of the period. This price is determined by the average closing price on the Chicago Board of Trade, net of the local basis, for the last two business days of the period and the first business day of the subsequent period. Changes in the market values of these inventories are recognized as a component of cost of goods sold.

Long-Lived Assets

Depreciation and amortization of our property, plant and equipment is provided on the straight-lined method by charges to operations at rates based upon the expected useful lives of individual or groups of assets. Economic circumstances or other factors may cause management’s estimates of expected useful lives to differ from actual.

Long-lived assets, including property, plant and equipment and investments are evaluated for impairment on the basis of undiscounted cash flows whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impaired asset is written down to its estimated fair market value based on the best information available. Considerable management judgment is necessary to estimate undiscounted future cash flows and may differ from actual.

We evaluate the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying value may not be recoverable. Such circumstances could include, but are not limited to: (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. We measure the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss is recognized.

The impairment loss is calculated as the amount by which the carrying value of the asset exceeded its fair value. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires us to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts.

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Accounting for Derivative Instruments and Hedging Activities

We minimize the effects of changes in the price of agricultural commodities by using exchange-traded futures and options contracts to minimize our net positions in these inventories and contracts. We account for changes in market value on exchange-traded futures and option contracts at exchange prices and account for the changes in value of forward purchase and sales contracts at local market prices determined by grain terminals in the area. Changes in the market value of all these contracts are recognized in earnings as a component of cost of goods sold.

Operating Leases

Effective January 1, 2019, we adopted ASU No. 2016-02 (Leases). The standard requires companies to recognize operating lease assets and liabilities on the balance sheet and disclose key information regarding its leasing arrangements. We elected the package of practical expedients permitted in ASC Topic 842. Accordingly, we accounted for all our leases as operating leases under the new guidance, without reassessing (a) whether the contracts contain leases under Topic 842, (b) whether classification of the operating leases would be different in accordance with ASC Topic 842, or (c) whether the unamortized initial direct costs before transition adjustments, if any, would have met the definition of initial direct costs in ASC Topic 842 at lease commencement. As a result of the adoption of the new lease accounting guidance, we recognize : (a) a lease liability amount which represents the present value of all remaining lease payments discounted using our incremental borrowing rate at the time of adoption of the respective leases, and (b) a right-of-use asset amount which represents the total lease liability adjusted for any unamortized initial direct costs. We also elected not to recognize and measure any short-term lease, which is a lease that, at the commencement date, has a term of 12 months or less and does not contain an option to purchase the underlying asset that the lessee is reasonably certain to exercise.

Revenue Recognition

We account for all of our revenues from contracts with customers under ASC 606, Revenue from Contracts with Customers, which became effective January 1, 2018. As part of the adoption of ASC 606, we applied the new standard on a modified retrospective basis analyzing open contracts as of January 1, 2018. However, no cumulative effect adjustment to retained earnings was necessary as no revenue recognition differences were identified when comparing the revenue recognition criteria under ASC 606 to previous requirements.

We principally generate revenue from merchandising and transporting manufactured agricultural products used as ingredients in food, feed, energy and industrial products. Revenue is measured based on the consideration specified in the contract with a customer, and excludes any amounts collected on behalf of third parties (e.g. - taxes). We follow a policy of recognizing revenue at a single point in time when we satisfy our performance obligation by transferring control over a product to a customer. Control transfer typically occurs when goods are shipped from our facilities or at other predetermined control transfer points (for instance, destination terms). Shipping and handling costs related to contracts with customers for sale of goods are accounted for as a fulfillment activity and are included in cost of revenues. Accordingly, amounts billed to customers for such costs are included as a component of revenues.

Item 7A. Quantitative and Qualitative Disclosure about Market Risk.

Commodities Risk & Risk Management. To reduce the price change risks associated with holding fixed price commodity positions, we generally take opposite and offsetting positions by entering into commodity futures contracts (either a straight or options futures contract) on a regulated commodity futures exchange, the Chicago Board of Trade. While hedging activities reduce the risk of loss from changing market prices, such activities also limit the gain potential which otherwise could result from these significant fluctuations in market prices. Our policy is generally to maintain a hedged position within limits, but we can be long or short at any time. Our profitability is primarily derived from margins on soybeans processed, not from hedging transactions. Our management does not anticipate that hedging activities will have a significant impact on our future operating results or liquidity. Hedging arrangements do not protect against nonperformance of a cash contract.

At any one time, our inventory and purchase contracts for delivery to our facility may be substantial. We have risk management policies and procedures that include net position limits. They are defined by commodity, and include both trader and management limits. This policy and procedure triggers a review by management when any trader is outside of position limits. The position limits are reviewed at least annually with the board of managers. We monitor current market conditions and may expand or reduce the limits in response to changes in those conditions.

19

An adverse change in market prices would not materially affect our profitability since we generally take opposite and offsetting positions by entering into commodity futures and forward contracts as economic hedges of price risk.

Foreign Currency Risk. We conduct essentially all of our business in U.S. dollars and have minimal direct risk regarding foreign currency fluctuations. Foreign currency fluctuations do, however, impact the ability of foreign buyers to purchase U.S. agricultural products and the competitiveness of and demand for U.S. agricultural products compared to the same products offered by foreign suppliers.

An adverse change in market prices would not materially affect our profitability since we generally take opposite and offsetting positions by entering into commodity futures and forward contracts as economic hedges of price risk.

Interest Rate Risk. We manage exposure to interest rate changes by using variable rate loan agreements with fixed rate options. Long-term loan agreements can utilize the fixed option through maturity; however, the revolving ability to pay down and borrow back would be eliminated once the funds were fixed.

As of December 31, 2019, we had $603,342 in fixed rate debt and $36 million in variable rate debt available to borrow. Interest rate changes impact the amount of our interest payments and, therefore, our future earnings and cash flows. Assuming other variables remain constant, a one percentage point (1%) increase in interest rates on our variable rate debt could have an estimated impact on profitability of approximately $360,000 per year.

Item 8. Financial Statements and Supplementary Data.

Reference is made to the “Index to Financial Statements” of South Dakota Soybean Processors, LLC located on the page immediately preceding page F-1 of this report, and financial statements and schedules for the years ended December 31, 2019, 2018 and 2017.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Control and Procedures.

Evaluation of Disclosure Controls and Procedures. Our management, including our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report. Based on this evaluation, our management has concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.  Additionally, based on management’s evaluation, our disclosure controls and procedures were effective in ensuring that information required to be disclosed in our Exchange Act reports is accumulated and communicated to our management to allow timely decisions regarding required disclosures.

Management’s Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become

20

inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As of December 31, 2019, our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control- Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on this assessment using those criteria, management concluded that, as of December 31, 2019, our internal control over financial reporting is effective. Our management reviewed the results of their assessment with the Audit Committee.

This Annual Report does not include a report of our registered public accounting firm regarding internal control over financial reporting. Our internal control over financial reporting was not subject to an audit report by our registered public accounting firm pursuant to the rules of the Commission that permit us to provide only management’s report in this report.

Changes in Internal Control over Financial Reporting. There was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2019 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

/s/ Thomas Kersting

Thomas Kersting, Chief Executive Officer

(Principal Executive Officer)

/s/ Mark Hyde

Mark Hyde, Chief Financial Officer

(Principal Financial Officer)

Item 9B. Other Information.

None. 

PART III

Pursuant to General Instructions G(3), we omit Part III, Items 10, 11, 12, 13, and 14, and incorporate such items by reference to an amendment to this Annual Report on Form 10-K or to a Definitive Proxy Statement to be filed with the Commission within 120 days after the close of the fiscal year covered by this Report (December 31, 2019).

Part IV

Item 15. Exhibits, Financial Statement Schedules.

The following exhibits and financial statements are filed as part of, or are incorporated by reference into, this report:

(a)(1)    Financial Statements — Reference is made to the “Index to Financial Statements” of South Dakota Soybean Processors, LLC located on the page immediately preceding page F-1 of this report for a list of the financial statements for the year ended December 31, 2019. The financial statements appear on page F-2 of this Report.

(2)     All supplemental schedules are omitted because of the absence of conditions under which they are required or because the information is shown in the Consolidated Financial Statements or notes thereto.

(3)    Exhibits - Exhibits required to be filed by Item 601 of Regulation S-K are set forth in the Exhibit Index accompanying this Annual Report on Form 10-K and are incorporated herein by reference.

21

Exhibit Number	Description
3.1(i)	Articles of Organization (1)
3.1(ii)	Operating Agreement, as amended and restated
3.1(iii)	Articles of Amendment to Articles of Organization
4.1	Form of Class A Unit Certificate
10.1	Railroad Car Lease Agreement with Trinity Industries dated February 12, 2002
10.2	Railroad Car Lease Agreements with Wells Fargo Rail Corporation, dated November 10, 2003 and November 25, 2003 (2)
10.3	Security Agreement with CoBank dated June 17, 2004
10.4	Credit Agreement with CoBank dated December 28, 2016
10.5	Amendment to Credit Agreement with CoBank dated March 28, 2017
10.6	Amendment to Credit Agreement with CoBank dated February 27, 2018
10.7	Amendment to Credit Agreement with CoBank dated January 28, 2020
10.8	Monitored Revolving Credit Supplement dated December 28, 2016
10.9	Amended and Restated Monitored Revolving Credit Supplement dated September 20, 2017
10.10	Amended and Restated Monitored Revolving Credit Supplement dated February 27, 2018
10.11	Amended and Restated Revolving Credit Promissory Note dated November 23, 2018
10.12	Amended and Restated Revolving Credit Promissory Note dated January 28, 2020
10.13	Monitored Revolving Term Loan Supplement dated December 28, 2016
10.14	Amended and Restated Revolving Term Promissory Note dated March 28, 2017
10.15	Amended and Restated Revolving Term Promissory Note dated January 28, 2020
10.16	Thomas Kersting Employment Agreement dated January 1, 2020
10.17	Mark Hyde Employment Agreement dated March 21, 2017
31.1	Rule 13a-14(a)/15d-14(a) Certification by Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification by Chief Financial Officer
32.1	Section 1350 Certification by Chief Executive Officer
32.2	Section 1350 Certification by Chief Financial Officer

____________________________________________________________________________

(1) Incorporated by reference from Appendix B to the information statement/prospectus filed as a part of the issuer’s Registration Statement on Form S-4 (File No. 333-75804).

(2) Assigned by General Electric Railcar Services Corporation to Wells Fargo Rail Corporation on August 1, 2016.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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:

			SOUTH DAKOTA SOYBEAN PROCESSORS, LLC
Dated:	March 17, 2020	By	/s/ Thomas Kersting
			Thomas Kersting, Chief Executive Officer
			(Principal Executive Officer)
Dated:	March 17, 2020		/s/ Mark Hyde
			Mark Hyde, Chief Financial Officer
			(Principal Financial Officer)

22

Pursuant to the requirements of the Securities Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Dated:	March 17, 2020	By	/s/ Thomas Kersting
			Thomas Kersting, Chief Executive Officer
			(Principal Executive Officer)
Dated:	March 17, 2020	By	/s/ Mark Hyde
			Mark Hyde
			Chief Financial Officer (Principal Financial Officer)
Dated:	March 17, 2020	By	/s/ Ronald Anderson
			Ronald Anderson, Manager
Dated:	March 17, 2020	By	/s/ Mark Brown
			Mark Brown, Manager
Dated:	March 17, 2020	By	/s/ Wayne Enger
			Wayne Enger, Manager
Dated:	March 17, 2020	By	/s/ Gary Goplen
			Gary Goplen, Manager
Dated:	March 17, 2020	By	/s/ Jeffrey Hanson
			Jeffrey Hanson, Manager
Dated:	March 17, 2020	By	/s/ Kent Howell
			Kent Howell, Manager
Dated:	March 17, 2020	By	/s/ Jonathan Kleinjan
			Jonathan Kleinjan
Dated:	March 17, 2020	By	/s/ Gary Kruggel
			Gary Kruggel, Manager
Dated:	March 17, 2020	By	/s/ Robert Nelsen
			Robert Nelsen, Manager
Dated:	March 17, 2020	By	/s/ Maurice Odenbrett
			Maurice Odenbrett, Manager
Dated:	March 17, 2020	By	/s/ Michael Reiner
			Michael Reiner, Manager
Dated:	March 17, 2020	By	/s/ Doyle Renaas
			Doyle Renaas, Manager

23

Dated:	March 17, 2020	By	/s/ Adam Schindler
			Adam Schindler, Manager
Dated:	March 17, 2020	By	/s/ Ned Skinner
			Ned Skinner, Manager
Dated:	March 17, 2020	By	/s/ Craig Weber
			Craig Weber, Manager

24

South Dakota Soybean Processors, LLC

Financial Statements

December 31, 2019, 2018, and 2017

F-1

SOUTH DAKOTA SOYBEAN PROCESSORS, LLC

Index to Financial Statements

	Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-3
FINANCIAL STATEMENTS
Balance Sheets	F-4
Statements of Operations	F-5
Statements of Changes in Members’ Equity	F-6
Statements of Cash Flows	F-7
Notes to Financial Statements	F-8

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Managers and Members

South Dakota Soybean Processors, LLC

Volga, South Dakota

Opinion on the Financial Statements

We have audited the accompanying balance sheets of South Dakota Soybean Processors, LLC (the Company) as of December 31,2019 and 2018, and the related statements of operations, changes in members’ equity, and cash flows for the years ended December 31,2019, 2018, and 2017, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of South Dakota Soybean Processors, LLC as of December 31, 2019 and 2018, and the results of its operations and its cash flows for the years ended December 31, 2019, 2018 and 2017, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of South Dakota Soybean Processors, LLC’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to South Dakota Soybean Processors, LLC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. South Dakota Soybean Processors, LLC is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of South Dakota Soybean Processors, LLC’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Eide Bailly LLP

We have served as South Dakota Soybean Processors, LLC’s auditor since 2008.

Denver, Colorado

March 17, 2020

F-3

South Dakota Soybean Processors, LLC

Balance Sheets

December 31, 2019 and 2018

___________________________________________________________________________________________________________________

	2019			2018
Assets
Current assets
Cash and cash equivalents	$	624,681		$	7,197,082
Trade accounts receivable	24,420,557			20,550,438
Inventories	44,470,052			36,716,014
Margin deposits	6,772,160			2,350,852
Prepaid expenses	1,884,742			1,492,163
Total current assets	78,172,192			68,306,549
Property and equipment	118,363,393			110,314,779
Less accumulated depreciation	(53,846,189		)	(51,246,765		)
Total property and equipment, net	64,517,204			59,068,014
Other assets
Investments in related parties	7,873,727			8,009,315
Investments in cooperatives	1,562,098			1,552,022
Right-of-use lease asset, net	5,979,771			7,918,283
Total other assets	15,415,596			17,479,620
Total assets	$	158,104,992		$	144,854,183
Liabilities and Members' Equity
Current liabilities
Excess of outstanding checks over bank balance	$	8,164,752		$	3,893,179
Current maturities of long-term debt	4,603,342			61,964
Note payable - seasonal loan	1,743,029			—
Current operating lease liabilities	2,663,967			2,714,928
Accounts payable	4,904,963			2,325,404
Accrued commodity purchases	31,346,533			35,384,390
Accrued expenses	2,900,118			3,697,631
Accrued interest	74,770			10,673
Deferred liabilities - current	448,458			792,384
Total current liabilities	56,849,932			48,880,553
Long-term liabilities
Long-term debt, net of current maturities and unamortized debt issuance costs	11,991,923			593,027
Long-term operating lease liabilities	3,315,804			5,203,355
Total long-term liabilities	15,307,727			5,796,382
Commitments and contingencies (Notes 8, 9, 10, 16 & 18)
Members' equity Class A Units, no par value, 30,419,000 units issued and outstanding	85,947,333			90,177,248
Total liabilities and members' equity	$	158,104,992		$	144,854,183

 The accompanying notes are an integral part of these financial statements. 

F-4

South Dakota Soybean Processors, LLC

Statements of Operations

For the Years Ended December 31, 2019, 2018, and 2017

___________________________________________________________________________________________________________________

	2019			2018			2017
Net revenues	$	371,275,766		$	391,764,683		$	375,759,337
Cost of revenues:
Cost of product sold	289,379,275			298,733,169			305,932,988
Production	30,889,789			27,040,845			24,448,686
Freight and rail	35,572,737			36,157,789			33,101,043
Brokerage fees	634,129			669,768			667,413
Total cost of revenues	356,475,930			362,601,571			364,150,130
Gross profit	14,799,836			29,163,112			11,609,207
Operating expenses:
Administration	3,624,306			3,834,845			3,211,255
Operating income	11,175,530			25,328,267			8,397,952
Other income (expense):
Interest expense	(919,157		)	(897,942		)	(457,909		)
Other non-operating income (expense)	554,356			1,302,722			(1,664,235		)
Patronage dividend income	169,456			146,258			493,201
Total other income (expense)	(195,345		)	551,038			(1,628,943		)
Income before income taxes	10,980,185			25,879,305			6,769,009
Income tax (expense), net	(600		)	(1,960		)	(1,941		)
Net income	$	10,979,585		$	25,877,345		$	6,767,068
Basic and diluted earnings (loss) per capital unit:	$	0.36		$	0.85		$	0.22
Weighted average number of capital units outstanding for calculation of basic and diluted earnings (loss) per capital unit	30,419,000			30,419,000			30,419,000

The accompanying notes are an integral part of these financial statements.

F-5

South Dakota Soybean Processors, LLC

Statements of Changes in Members’ Equity

For the Years Ended December 31, 2019, 2018, and 2017

___________________________________________________________________________________________________________________

	Class A Units
	Units	Amount
Balances, January 1, 2017	30,419,000	$	72,052,927
Net income	—	6,767,068
Distribution to members	—	(9,444,789		)
Balances, December 31, 2017	30,419,000	69,375,206
Net income	—	25,877,345
Distribution to members	—	(5,075,303		)
Balances, December 31, 2018	30,419,000	90,177,248
Net income	—	10,979,585
Distributions to members	—	(15,209,500		)
Balances, December 31, 2019	30,419,000	$	85,947,333

The accompanying notes are an integral part of these financial statements.

F-6

South Dakota Soybean Processors, LLC

Statements of Cash Flows

For the Years Ended December 31, 2019, 2018, and 2017

___________________________________________________________________________________________________________________

	2019			2018			2017
Operating activities
Net income	$	10,979,585		$	25,877,345		$	6,767,068
Charges and credits to net income not affecting cash:
Depreciation and amortization	4,489,614			4,167,715			3,624,962
Loss on sale of investments in cooperatives	—			—			1,451,728
(Gain) loss on sales of property and equipment	64,244			(246,206		)	8,527
Loss on equity method investment	135,588			61,198			411,050
Non-cash patronage dividends and interest income	(42,364		)	(24,131		)	(168,379		)
Change in current operating assets and liabilities	(18,973,684		)	641,516			(4,697,776		)
Net cash (used for) from operating activities	(3,347,017		)	30,477,437			7,397,180
Investing activities
Proceeds from investments in cooperatives	—			—			3,258,430
Purchase of investments	—			(6,320,000		)	—
Retirement of patronage dividends	32,288			—			—
Proceeds from sales of property and equipment	65,825			580,570			84,188
Purchase of property and equipment	(10,066,719		)	(8,026,131		)	(14,494,447		)
Net cash (used for) investing activities	(9,968,606		)	(13,765,561		)	(11,151,829		)
Financing activities
Change in excess of outstanding checks over bank balances	4,271,573			(601,784		)	(2,148,263		)
Net (payments) proceeds from seasonal borrowings	1,743,029			—			—
Distributions to members	(15,209,500		)	(5,075,303		)	(9,444,789		)
Payments for debt issue costs	—			(10,500		)	(14,000		)
Proceeds from long-term debt	71,476,467			66,979,124			132,599,815
Principal payments on long-term debt	(55,538,347		)	(71,489,854		)	(128,209,239		)
Net cash from (used for) financing activities	6,743,222			(10,198,317		)	(7,216,476		)
Net change in cash and cash equivalents	(6,572,401		)	6,513,559			(10,971,125		)
Cash and cash equivalents, beginning of year	7,197,082			683,523			11,654,648
Cash and cash equivalents, end of year	$	624,681		$	7,197,082		$	683,523
Supplemental disclosures of cash flow information
Cash paid (received) during the year for:
Interest	$	855,060		$	1,139,549		$	727,235
Income taxes	$	—		$	(21,617	)	$	46,461

The accompanying notes are an integral part of these financial statements. 

F-7

South Dakota Soybean Processors, LLC

Notes to the Financial Statements

___________________________________________________________________________________________________________________

Note 1 -Principal Activity and Significant Accounting Policies

Organization

South Dakota Soybean Processors, LLC (the “Company” or “LLC”) processes and sells soybean products, such as soybean meal, oil, and hulls. The Company’s principal operations are located where we have plants in Volga and Miller, South Dakota.

Cash and cash equivalents

The Company considers all highly liquid investment instruments with original maturities of three months or less at the time of acquisition to be cash equivalents.

Inventories

Finished goods (soybean meal, oil, refined oil, and hulls) and raw materials (soybeans) are valued at net realizable value. This accounting policy is in accordance with the guidelines described in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 905, Agriculture (formerly AICPA Statement of Position No. 85-3, Accounting by Agricultural Producers and Agricultural Cooperatives). Supplies and other inventories are stated at net realizable value.

Investments

The Company accounts for its equity investments in Prairie AquaTech, LLC, Prairie AquaTech Manufacturing, LLC, and Prairie AquaTech Investments, LLC using Accounting Standards Update (ASU) No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. All equity securities that do not result in consolidation and are not accounted for under the equity method are measured at fair value with changes therein reflected in net income. We have elected to utilize the measurement alternative for equity investments that do not have readily determinable fair values and measure these investments at cost less any impairment plus or minus observable price changes in orderly transactions.

Prior to October 1, 2019, the Company accounted for its investment in Prairie AquaTech, LLC using the equity method due to the Company's ability to influence management decisions of Prairie AquaTech, LLC, due to its Board position on the Entity's Board of Managers. While the Company still holds its position on that entity's Board of Managers, the Company's ability to influence management decisions has been reduced due to additional quantity of board seats outstanding. Therefore, the Company ceased its accounting for its investment in Prairie AquaTech, LLC under the equity method, and began accounting for the investment using ASU No. 2016-01.

Investments in cooperatives are recorded in a manner similar to equity investments without readily determinable fair values, cost plus the amount of patronage earnings allocated to the Company, less any cash distributions received.

Property and equipment

Property and equipment is stated at cost. Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are charged to expense when incurred. When depreciable properties are sold or retired, the cost and accumulated depreciation are eliminated from the accounts and the resultant gain or loss is reflected in income.

Depreciation is provided for over the estimated useful lives of the individual assets using the straight-line method. The range of the estimated useful lives used in the computation of depreciation is as follows:

Building and improvements	10-39 years
Equipment and furnishings	3-15 years
Railcars	50 years

F-8

South Dakota Soybean Processors, LLC

Notes to the Financial Statements

___________________________________________________________________________________________________________________

The Company reviews its long-lived assets for impairment whenever events indicate that the carrying amount of the asset may not be recoverable. If impairment indicators are present and the future cash flows is less than the carrying amount of the assets, values are reduced to the estimated fair value of those assets. The Company did not recognize any impairment on property and equipment during the years ended December 31, 2019, 2018, and 2017.

Deferred revenue

The Company recognizes revenues as earned. Amounts received in advance of the period in which service is rendered are recorded as a liability under “Deferred liabilities”.

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 amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue

The Company accounts for all of its revenues from contracts with customers under ASC 606, Revenue from Contracts with Customers.

The Company principally generates revenue from merchandising and transporting manufactured agricultural products used as ingredients in food, feed, energy and industrial products. Revenue is measured based on the consideration specified in the contract with a customer, and excludes any amounts collected on behalf of third parties (e.g. - taxes). The Company follows a policy of recognizing revenue at a single point in time when it satisfies its performance obligation by transferring control over a product to a customer. Control transfer typically occurs when goods are shipped from our facilities or at other predetermined control transfer points (for instance, destination terms). Shipping and handling costs related to contracts with customers for sale of goods are accounted for as a fulfillment activity and are included in cost of revenues. Accordingly, amounts billed to customers for such costs are included as a component of revenues.

Payments received in advance to the transfer of goods, or "contract liabilities", are included in "Deferred liabilities - current" on the Company's balance sheets. These customer prepayments totaled $313,347 and $15,042 as of December 31, 2019 and 2018, respectively. All of the $15,042 balance as of December 31, 2018 was recognized as revenue during the year ended December 31, 2019.

The following table presents a disaggregation of revenue from contracts with customers for the years ended December initiated 31, 2019, 2018, and 2017, by product type:

	2019		2018		2017
Soybean meal and hulls	$	244,012,663	$	257,440,362	$	228,685,518
Soybean oil and oil byproducts	127,263,103		134,324,321		147,073,819
Totals	$	371,275,766	$	391,764,683	$	375,759,337

Freight

The Company presents all amounts billed to the customer for freight as a component of net revenue. Costs incurred for freight are reported as a component of cost of revenue.

Advertising costs

Advertising and promotion costs are expensed as incurred. The Company incurred $76,000, $55,000, and $57,000, of advertising costs in the years ended December 31, 2019, 2018, and 2017, respectively.

F-9

South Dakota Soybean Processors, LLC

Notes to the Financial Statements

___________________________________________________________________________________________________________________

Environmental remediation

It is management’s opinion that the amount of any potential environmental remediation costs will not be material to the Company’s financial condition, results of operations, or cash flows; therefore, no accrual has been recorded.

Accounting for derivative instruments and hedging activities

All of the Company’s derivatives are designated as non-hedge derivatives. The futures and options contracts, as well as the interest rate swaps, caps and floors, used by the Company are discussed below. Although the contracts may be effective economic hedges of specified risks, they are not designated as, nor accounted for, as hedging instruments.

The Company, as part of its trading activity, uses futures and option contracts offered through regulated commodity exchanges to reduce risk. The Company is exposed to risk of loss in the market value of inventories. To reduce that risk, the Company generally takes opposite and offsetting positions using futures contracts or options. Unrealized gains and losses on futures and options contracts used to hedge soybean, oil and meal inventories, as well as foreign exchange rates, are recognized as a component of net proceeds for financial reporting. Inventories are recorded at estimated market value. Consequently, unrealized gains and losses on derivative contracts are offset by unrealized gains and losses on inventories and reflected in current earnings.

The Company uses interest rate swaps, caps and floors offered through regulated commodity exchanges. The Company is exposed to risk of loss resulting from potential increases in interest rates on their variable rate debt. To reduce that risk, the Company has purchased interest rate swaps, caps and floors. Unrealized gains and losses on interest rate swaps, caps and floors are reflected in current earnings immediately.

Earnings per capital unit

Earnings per capital unit are calculated based on the weighted average number of capital units outstanding. The Company has no other capital units or other member equity instruments that are dilutive for purposes of calculating earnings per capital unit.

Income taxes

As a limited liability company, the Company’s taxable income or loss is allocated to members in accordance with their respective percentage ownership. Therefore, no provision or liability for income taxes has been included in the financial statements.

The Company has evaluated the provisions of FASB ASC 740-10 for uncertain tax positions. As of December 31, 2019 and 2018, the unrecognized tax benefit accrual was zero.

The Company will recognize future accrued interest and penalties related to unrecognized tax benefits in income tax expense if incurred.

As of December 31, 2019, the book value of the Company’s net assets exceeds the tax basis of those assets by approximately $19.8 million.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions.  We are no longer subject to income tax examinations by U.S. federal and state tax authorities for years prior to 2016.  We currently have no tax years under examination.

Reclassifications

Certain reclassifications have been made to the prior years' financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or members' equity.

Recent accounting pronouncements

Effective January 1, 2019, the Company adopted ASU No. 2016-02 (Leases). The standard requires companies to recognize operating lease assets and liabilities on the balance sheet and disclose key information regarding its leasing arrangements. The Company has elected the package of practical expedients permitted in ASC Topic 842. Accordingly,

F-10

South Dakota Soybean Processors, LLC

Notes to the Financial Statements

___________________________________________________________________________________________________________________

the Company accounted for all its leases as operating leases under the new guidance, without reassessing (a) whether the contracts contain leases under Topic 842, (b) whether classification of the operating leases would be different in accordance with ASC Topic 842, or (c) whether the unamortized initial direct costs before transition adjustments, if any, would have met the definition of initial direct costs in ASC Topic 842 at lease commencement. As a result of the adoption of the new lease accounting guidance, the Company recognized on January 1, 2018 (the beginning of the earliest period presented on the balance sheet): (a) a lease liability of $10.3 million, which represents the present value of the remaining lease payments of $11.0 million, discounted using the Company's incremental borrowing rate at the time of adoption of the respective leases, and (b) a right-of-use asset of $10.3 million, which represents the total lease liability adjusted for any unamortized initial direct costs. The Company also elected not to recognize and measure any short-term lease, which is a lease that, at the commencement date, has a term of 12 months or less and does not contain an option to purchase the underlying asset that the lessee is reasonably certain to exercise.

Note 2 - Accounts Receivable

Accounts receivable are considered past due when payments are not received on a timely basis in accordance with the Company’s credit terms, which is generally 30 days from invoice date. 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.

The following table presents the aging analysis of trade receivables as of December 31, 2019 and 2018:

	2019		2018
Past due:
Less than 30 days past due	$	4,306,064	$	5,362,970
30-59 days past due	341,956		387,670
60-89 days past due	10,302		101,687
Greater than 90 days past due	14,162		84
Total past due	4,672,484		5,852,411
Current	19,748,073		14,698,027
Totals	$	24,420,557	$	20,550,438

The following table provides information regarding the Company’s allowance for doubtful accounts receivable as of December 31, 2019, 2018, and 2017:

	2019		2018			2017
Balances, beginning of year	$	—	$	—		$	—
Amounts charged (credited) to costs and expenses	—		42,909			—
Additions (deductions)	—		(42,909		)	—
Balances, end of year	$	—	$	—		$	—

In general cash received is applied to the oldest outstanding invoice first, unless payment is for a specified invoice. The Company, on a case by case basis, may charge a late fee of 1.5% per month on past due receivables.

Note 3 - Inventories

 The Company’s inventories consist of the following as of December 31:

	2019		2018
Finished goods	$	26,559,194	$	21,283,354
Raw materials	17,641,335		15,206,526
Supplies & miscellaneous	269,523		226,134
Totals	$	44,470,052	$	36,716,014

F-11

South Dakota Soybean Processors, LLC

Notes to the Financial Statements

___________________________________________________________________________________________________________________

Finished goods and raw materials are valued at estimated market value, which approximates net realizable value. In addition, futures and option contracts are marked to market through cost of revenues, with unrealized gains and losses recorded in the above inventory amounts. Supplies and other inventories are stated at net realizable value.

Note 4 - Margin Deposits

The Company has margin deposits with a commodity brokerage firm used to acquire futures and option contracts to manage the price volatility risk of soybeans, crude soybean oil and soybean meal. Consistent with its inventory accounting policy, these contracts are recorded at market value. At December 31, 2019, the Company’s futures contracts all mature within 12 months.

Note 5 - Investments in Related Parties

In 2016, the Company purchased convertible promissory notes from Prairie AquaTech, LLC with face amounts totaling $2.0 million. In 2017, the Company converted these notes, along with $161,563 of accrued interest, into 142,489 Series A Units in Prairie AquaTech, LLC. The units are approximately 8.9% of Prairie AquaTech, LLC's issued and outstanding equity securities.

Prior to October 2019, the Company accounted for the investment in Prairie AquaTech, LLC using the equity method due to the Company's ability to exercise significant influence based on its board position. The Company recognized losses of $135,588, $61,198, and $411,050 in 2019, 2018, and 2017, respectively, which is included in other non-operating income (expense). In October 2019, the Company ceased the accounting for its investment in Prairie AquaTech, LLC under the equity method, and began accounting for the investment at fair value as a result of its decreased ability to exercise significant influence due to an increased quantity of board positions.

On February 20, 2018, the Company invested $5.0 million in Prairie AquaTech Investments, LLC, which is approximately 10.9% of Prairie AquaTech Investments, LLC's issued and outstanding equity securities. A substantial portion of this investment was subsequently invested in Prairie AquaTech Manufacturing, LLC, a company formed to construct and operate the manufacturing facility that produces and sells a high protein feed ingredient derived from agricultural products such as soybeans. In addition, the Company contributed various construction and management services in exchange for a 3.3% equity interest in Prairie AquaTech Manufacturing, LLC. The remaining portion of the $5.0 million investment in Prairie AquaTech Investments, LLC was made in Prairie AquaTech, LLC, in which the Company previously invested directly in 2016.

On April 3, 2018, the Company entered into two agreements with Prairie AquaTech Manufacturing, LLC to perform various management services and to serve as the owner's representative during the construction of its new manufacturing facility adjacent to the Company's plant in Volga, South Dakota. The Company received a total of $1.72 million in compensation for those services of which $400,000 was received in cash and $1.32 million in preferred equity units. The equity units represent approximately 4.1% of Prairie AquaTech Manufacturing, LLC's issued and outstanding equity securities.

The Company accounts for the investments in Prairie AquaTech Investments, LLC and Prairie AquaTech Manufacturing, LLC using the fair value method in ASU No. 2016-01. The Company has elected to utilize the measurement alternative for equity investments that do not have readily determinable fair values and measure these investments at their cost less any impairment plus or minus any observable price changes in orderly transactions.

Note 6 - Investments in Cooperatives

The Company’s investments in cooperatives consist of the following at December 31:

	2019		2018
CoBank	$	1,562,098	$	1,552,022

During 2017, the Company sold its shares in Minnesota Soybean Processors for $3,258,180 resulting in a loss of $1,451,978.

F-12

South Dakota Soybean Processors, LLC

Notes to the Financial Statements

___________________________________________________________________________________________________________________

Note 7 - Property and Equipment

The following is a summary of property and equipment at December 31:

	2019							2018
	Cost		Accumulated Depreciation			Net		Net
Land	$	516,326	$	—		$	516,326	$	516,326
Land improvements	2,158,383		(613,295		)	1,545,088		1,556,183
Buildings and improvements	22,294,006		(9,486,162		)	12,807,844		12,588,664
Machinery and equipment	84,180,577		(42,700,456		)	41,480,121		38,513,796
Railroad cars	1,238,508		(30,963		)	1,207,545		1,232,315
Company vehicles	146,754		(110,722		)	36,032		16,307
Furniture and fixtures	1,363,744		(904,591		)	459,153		543,801
Construction in progress	6,465,095		—			6,465,095		4,100,622
Totals	$	118,363,393	$	(53,846,189	)	$	64,517,204	$	59,068,014

Depreciation of property and equipment amounts to $4,487,460, $4,155,061, and $3,621,564 for the years ended December 31, 2019, 2018, and 2017, respectively. 

Note 8 - Notes Payable - Seasonal Loan

Prior to the amendment described in Note 19, the Company had entered into a revolving credit agreement with CoBank which expires February 1, 2020. The purpose of the credit agreement is to finance the operating needs of the Company. Under this agreement, the Company could borrow up to $20 million, and advances on the revolving credit agreement are secured. Interest accrues at a variable rate (3.99% at December 31, 2019).The Company pays a 0.20% annual commitment fee on any funds not borrowed. There were advances outstanding of $1,743,029 and $0 at December 31, 2019 and 2018, respectively. The remaining available funds to borrow under the terms of the revolving credit agreement are approximately $18.3 million as of December 31, 2019.

Note 9 - Long-Term Debt

The following is a summary of the Company's long-term debt at December 31, 2019 and 2018:

	2019			2018
Revolving term loan from CoBank, interest at variable rates (4.24% and 4.96% at December 31, 2019 and 2018, respectively), secured by substantially all property and equipment. Loan matures September 20, 2023.	$	16,000,000		$	—
Note payable to Brookings Regional Railroad Authority, due in annual principal and interest installments of $75,500, interest rate at 2.00%, secured by railroad track assets. Note matures June 1, 2020.	603,342			665,222
Total debt before current maturities and debt issuance costs	16,603,342			665,222
Less current maturities	(4,603,342		)	(61,964		)
Less debt issuance costs, net of amortization of $5,923 and $3,769 as of December 31, 2019 and 2018, respectively	(8,077		)	(10,231		)
Totals	$	11,991,923		$	593,027

Prior to the amendments described in Note 19, the Company entered into an agreement as of March 28, 2017 with CoBank to amend and restate its Credit Agreement, which includes both the revolving term and seasonal loans. Under the terms and conditions of the Credit Agreement, CoBank agreed to make advances to the Company for up to $24,000,000 on the revolving term loan with a variable effective interest rate of 4.24%. The available commitment decreases in scheduled periodic increments of $2,000,000 every six months starting March 20, 2018 until maturity on September 20, 2023. The Company pays a 0.40% annual commitment fee on any funds not borrowed. The debt issuance costs of $14,000 paid by the Company on this amendment will be amortized over the term of the loan. The

F-13

South Dakota Soybean Processors, LLC

Notes to the Financial Statements

___________________________________________________________________________________________________________________

principal balance outstanding on the revolving term loan was $16.0 million and $0 as of December 31, 2019 and 2018, respectively. There were no remaining commitments available to borrow on the revolving term loan as of December 31, 2019.

Under this agreement, the Company is subject to compliance with standard financial covenants and the maintenance of certain financial ratios. The Company was in compliance with all covenants and conditions with CoBank as of December 31, 2019.

Effective March 1, 2013, the State of South Dakota Department of Transportation agreed to loan the Brookings County Regional Railway Authority $964,070 for purposes of making improvements to the railway infrastructure near the Company's soybean processing facility near Volga, South Dakota. In consideration of this secured loan, the Company agreed to provide a guarantee to the State of South Dakota Department of Transportation for the full amount of the loan, plus interest. This guarantee was converted into a direct obligation of the Company's on October 16, 2013, when the Company received the entire loan proceeds and assumed responsibility for paying the annual principal and interest payments.

The following are minimum principal payments on long-term debt obligations for the years ended December 31:

2020	$	4,603,342
2021	4,000,000
2022	4,000,000
2023	4,000,000
Total	$	16,603,342

Note 10 - Operating Leases

The Company has several operating leases for railcars. These leases have terms ranging from 3-18 years and do not have renewal terms provided. The leases require the Company to maintain the condition of the railcars, restrict the use of the railcars to specified products, such as soybean meal, hulls or oil, limit usage to the continental United States, Canada or Mexico, require approval to sublease to other entities, and require the Company's submission of its financial statements. Lease expense for all railcars was $3,086,823, $3,132,935, and $3,310,326 for the years ended December 31, 2019, 2018, and 2017, respectively.

The following is a schedule of the Company's operating leases for railcars as of December 31, 2019:

Lessor	Quantity of Railcars	Commencement Date	Maturity Date	Monthly Payment
American Railcar Leasing	30	7/1/2015	6/30/2021	$	30,780
Andersons Railcar Leasing Co.	10	7/1/2018	6/30/2023	5,000
Andersons Railcar Leasing Co.	20	7/1/2019	6/30/2026	11,300
GATX Corporation	15	7/1/2017	6/30/2020	4,500
Midwest Railcar Corporation	64	1/1/2015	12/31/2021	27,200
Trinity Capital	88	8/1/2002	7/31/2020	33,704
Trinity Capital	29	12/1/2015	11/30/2020	28,536
Trinity Capital	20	10/1/2015	9/30/2020	13,600
Wells Fargo Rail	112	8/1/2017	7/31/2022	52,557
Wells Fargo Rail	107	1/1/2018	12/31/2022	35,845
Wells Fargo Rail	7	1/1/2004	12/31/2021	2,926
Wells Fargo Rail	15	1/1/2004	12/31/2021	5,850
Wells Fargo Rail	8	1/1/2015	12/31/2021	3,600
Totals	525			$	255,398

F-14

South Dakota Soybean Processors, LLC

Notes to the Financial Statements

___________________________________________________________________________________________________________________

The Company also has a number of other operating leases for machinery and equipment. These leases have terms ranging from 3-7 years; however, most of these leases have automatic renewal terms. These leases require monthly payments of $3,912. Rental expense under these other operating leases was $56,322, $58,954, and $46,771, for the years ended December 31, 2019, 2018, and 2017, respectively.

Operating leases are included in right-to-use lease assets, current operating lease liabilities, and long-term lease liabilities on the Company's balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company's secured incremental borrowing rates or implicit rates, when readily determinable. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

Lease expense for these operating leases is recognized on a straight-line basis over the lease terms. The components of lease costs recognized within our statements of operations for the years ended December 31, 2019, 2018, and 2017 were as follows:

	2019		2018		2017
Cost of revenues - Freight and rail	$	3,086,823	$	3,132,935	$	3,310,326
Cost of revenues - Production	43,783		47,496		37,756
Administration expenses	12,539		11,458		9,015
Total operating lease costs	$	3,143,145	$	3,191,889	$	3,357,097

The following summarizes the supplemental cash flow information for the years ended December 31, 2019, 2018, and 2017:

	2019		2018		2017
Cash paid for amounts included in measurement of lease liabilities	$	3,019,990	$	2,930,721	$	2,047,875
Supplemental non-cash information:
Right-of-use assets obtained in exchange for lease liabilities	$	809,916	$	457,856	$	2,141,091

The following summarizes the weighted-average remaining lease term and weighted-average discount rate:

	December 31, 2019
Weighted-average remaining lease term - operating leases (in years)	2.9
Weighted-average discount rate - operating leases	3.8	%

The following is a maturity analysis of the undiscounted cash flows of the operating lease liabilities as of December 31, 2019:

	Railcars			Other			Total
Year ended December 31:
2020	$	2,747,364		$	43,636		$	2,791,000
2021	1,916,017			40,211			1,956,228
2022	1,046,197			40,211			1,086,408
2023	165,600			32,757			198,357
2024	135,600			20,505			156,105
Thereafter	203,400			—			203,400
Total lease payments	6,214,178			177,320			6,391,498
Less amount of lease payments representing interest	(393,513		)	(18,214		)	(411,727		)
Total present value of lease payments	$	5,820,665		$	159,106		$	5,979,771

F-15

South Dakota Soybean Processors, LLC

Notes to the Financial Statements

___________________________________________________________________________________________________________________

Note 11 - Employee Benefit Plans

The Company maintains a Section 401(k) plan for employees who meet the eligibility requirements set forth in the plan documents. The Company matches a percentage of an employee's contributed earnings. The amounts charged to expense under this plan were approximately $186,000, $210,000, and $163,000 for the years ended December 31, 2019, 2018, and 2017, respectively.

The Company's Board of Managers approved payment of a profit-based incentive bonus to be awarded to eligible employees following the close of each fiscal year. The Board has allocated approximately 4.6% of profits over $2 million to fund this benefit. Individual amounts are based upon criteria determined by a formula that considers current pay, level of responsibility, and impact on profits of each position. The amounts charged to expense under this incentive were approximately $442,000, $1,161,000, and $291,000 for the years ended December 31, 2019, 2018, and 2017, respectively.

Note 12 - Cash Flow Information

The following is a schedule of changes in assets and liabilities used to determine cash from operating activities:

	2019			2018			2017
(Increase) decrease in assets:
Trade accounts receivable	$	(3,870,119	)	$	(749,792	)	$	551,935
Inventories	(7,754,038		)	1,250,073			(5,572,666		)
Margin account deposit	(4,421,308		)	2,026,900			(1,976,860		)
Prepaid expenses	(392,579		)	86,764			(122,285		)
	(16,438,044		)	2,613,945			(7,119,876		)

	2019			2018			2017
Increase (decrease) in liabilities:
Accounts payable	2,579,559			392,646			475,956
Accrued commodity purchases	(4,037,857		)	(2,258,421		)	1,954,659
Accrued expenses and interest	(733,416		)	1,362,624			(236,732		)
Deferred liabilities	(343,926		)	(1,469,278		)	228,217
	(2,535,640		)	(1,972,429		)	2,422,100
Totals	$	(18,973,684	)	$	641,516		$	(4,697,776	)

Note 13 - Derivative Instruments and Hedging Activities

In the ordinary course of business, the Company enters into contractual arrangements as a means of managing exposure to changes in commodity prices and, occasionally, foreign exchange and interest rates. The Company’s derivative instruments primarily consist of commodity futures, options and forward contracts and interest rate swaps, caps and floors. Although these contracts may be effective economic hedges of specified risks, they are not designated as, nor accounted for, as hedging instruments. These contracts are recorded on the Company’s balance sheets at fair value as discussed in Note 14, Fair Value.

As of December 31, 2019 and 2018, the value of the Company’s open futures, options and forward contracts was approximately $(5,955,928) and $802,770, respectively.

F-16

South Dakota Soybean Processors, LLC

Notes to the Financial Statements

___________________________________________________________________________________________________________________

		Amounts As of December 31, 2019
	Balance Sheet Classification	Asset Derivatives		Liability Derivatives
Derivatives not designated as hedging instruments:
Commodity contracts	Current Assets	$	3,320,161	$	8,930,683
Foreign exchange contracts	Current Assets	29,696		27,582
Interest rate caps and floors	Current Liabilities	—		347,520
Totals		$	3,349,857	$	9,305,785

		Amounts As of December 31, 2018
	Balance Sheet Classification	Asset Derivatives		Liability Derivatives
Derivatives not designated as hedging instruments:
Commodity contracts	Current Assets	$	3,696,540	$	2,722,830
Foreign exchange contracts	Current Assets	129,258		100,730
Interest rate caps and floors	Current Liabilities	—		199,468
Totals		$	3,825,798	$	3,023,028

During the years ended December 31, 2019, 2018, and 2017, net realized and unrealized gains (losses) on derivative transactions were recognized in the statements of operations as follows:

	Net Gain (Loss) Recognized on Derivative Activities for the Year Ending December 31:
	2019			2018			2017
Derivatives not designated as hedging instruments:
Commodity contracts	$	(4,057,389	)	$	8,594,290		$	5,302,090
Foreign exchange contracts	54,966			(29,269		)	109,211
Interest rate swaps, caps and floors	(148,053		)	105,155			(1,323		)
Totals	$	(4,150,476	)	$	8,670,176		$	5,409,978

The Company recorded gains (losses) of $(4,150,476), $8,670,176, and $5,409,978 in cost of goods sold related to its commodity derivative instruments for the years ended December 31, 2019, 2018, and 2017, respectively.

Note 14 - Fair Value

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, this guidance establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. The three levels of hierarchy and examples are as follows:

• Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange and commodity derivative contracts listed on the Chicago Board of Trade (“CBOT”).

• Level 2 – Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts, or priced with models using highly observable inputs, such as commodity prices using forward future prices.

F-17

South Dakota Soybean Processors, LLC

Notes to the Financial Statements

___________________________________________________________________________________________________________________

• Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.

The following tables set forth financial assets and liabilities measured at fair value in the balance sheets and the respective levels to which fair value measurements are classified within the fair value hierarchy as of December 31, 2019 and 2018:

	Fair Value as of December 31, 2019
	Level 1			Level 2		Level 3		Total
Financial assets:
Inventory	$	(5,610,521	)	$	49,717,733	$	—	$	44,107,212
Margin deposits	$	6,772,160		$	—	$	—	$	6,772,160

	Fair Value as of December 31, 2018
	Level 1		Level 2		Level 3		Total
Financial Assets:
Inventory	$	973,710	$	35,338,531	$	—	$	36,312,241
Margin deposits	$	2,350,852	$	—	$	—	$	2,350,852

In accordance with ASC 825, Financial Instruments, the Company enters into various commodity derivative instruments, including futures, options, swaps and other agreements. The fair value of the Company’s commodity derivatives is determined using unadjusted quoted prices for identical instruments on the CBOT. The Company estimates the fair market value of their finished goods and raw materials inventories using the market price quotations of similar forward future contracts listed on the CBOT and adjusts for the local market adjustments derived from other grain terminals in the area. This market adjustment caused a negative balance in the Level 1 inventory amount as of December 31, 2019.

The Company considers the carrying amount of significant classes of financial instruments on the balance sheets, including cash, accounts receivable, and accounts payable, to be reasonable estimates of fair value due to their length or maturity. The fair value of the Company’s long-term debt approximates the carrying value. The interest rates on the long-term debt are similar to rates the Company would be able to obtain currently in the market.

The Company has patronage investments in other cooperatives and common and preferred stock holdings in privately held entities. There is no market for their patronage credits or the entity’s common and preferred holdings, and it is impracticable to estimate the fair value of the Company’s investments. These investments are carried on the balance sheet at original cost plus the amount of patronage earnings allocated to the Company, less any cash distributions received.

Note 15 - Related Party Transactions

The Company sold soybean products to Prairie AquaTech, LLC and Prairie AquaTech Manufacturing, LLC totaling $1,582,064, $314,420, and $138,442 during the years ended December 31, 2019, 2018, and 2017, respectively. As of December 31, 2019 and 2018, Prairie AquaTech, LLC owed the Company $104,947 and $18,540, respectively.

The Company has entered into agreements with Prairie AquaTech Manufacturing, LLC to perform various management services and to serve as the owner's representative during the construction of its new manufacturing facility adjacent to the Company's plant in Volga, South Dakota. The Company received a total of $1.72 million in compensation for those services, which was recorded in deferred liabilities on the Company's balance sheet. As of December 31, 2019 and 2018, the balance remaining in deferred liabilities was $101,111 and $777,342, respectively. The Company recognized revenues from management services of $758,931 and $942,658 during the years ended December 31, 2019 and 2018, respectively.

F-18

South Dakota Soybean Processors, LLC

Notes to the Financial Statements

___________________________________________________________________________________________________________________

On May 15, 2018, the Company sold to Prairie AquaTech Manufacturing, LLC approximately 8 acres of land adjacent to the Company's facility in Volga, South Dakota, for $300,000. The land was used for the construction and operation of the manufacturing facility described above.

Note 16 - Business Credit Risk and Concentrations

The Company also grants credit to customers throughout the United States and Canada. The Company evaluates each customer’s credit worthiness on a case-by-case basis. Accounts receivable are generally unsecured. These receivables were $24,417,969 and $20,521,900 at December 31, 2019 and 2018, respectively.

Soybean meal sales accounted for approximately 63%, 64%, and 59% of total revenues for the years ended December 31, 2019, 2018, and 2017, respectively. Soybean oil sales represented approximately 33%, 33%, and 38% of total revenues for the years ended December 31, 2019, 2018, and 2017, respectively.

Net revenue by geographic area for the years ended December 31, 2019, 2018, and 2017 are as follows:

	2019		2018		2017
United States	$	296,767,276	$	306,474,381	$	300,879,962
Canada	74,508,490		85,290,302		74,879,375
Totals	$	371,275,766	$	391,764,683	$	375,759,337

Note 17 - Members' Equity

A minimum of 2,500 capital units is required for an ownership interest in the Company. Such units are subject to certain transfer restrictions. The Company retains the right to redeem the units at the greater of $0.20 per unit or the original purchase price less cumulative distributions through the date of redemption in the event a member attempts to dispose of the units in a manner not in conformity with the Operating Agreement, if a member becomes a holder of less than 2,500 units, or if a member becomes an owner (directly or indirectly) of more than 10% of the issued and outstanding capital units. Earnings, losses and cash distributions are allocated to members based on their percentage of ownership in the Company.

On February 5, 2019, the Company's Board of Managers approved a cash distribution of approximately $15.2 million, or 50.0 cents per capital unit. The distribution was paid in accordance with the Company's operating agreement and distribution policy on February 7, 2019.

Note 18 - Commitments and Contingencies

As of December 31, 2019, the Company had unpaid commitments of approximately $76,000 for construction and acquisition of property and equipment, all of which is expected to be incurred by December 2020.

From time to time in the ordinary course of our business, we may be named as a defendant in legal proceedings related to various issues, including without limitation, workers’ compensation claims, tort claims, or contractual disputes. We carry insurance that provides protection against general commercial liability claims, claims against our directors, officers and employees, business interruption, automobile liability, and workers’ compensation claims. We are not currently involved in any material legal proceedings and are not aware of any potential claims.

Note 19 - Subsequent Events

Except for the events listed below, we evaluated all of our activity and concluded that no subsequent events have occurred that would require recognition in our financial statements or disclosed in the notes to our financial statements.

On January 21, 2020, the Company’s Board of Managers declared a cash distribution to its members of approximately $6.7 million. The distribution was issued and paid to members on February 7, 2020 in accordance with the Company's operating agreement and distribution policy.

On January 27, 2020, the Company entered into an amendment of the seasonal loan and revolving term loan agreements with CoBank. Under the seasonal loan, the maximum amount that the Company may borrow is increased

F-19

South Dakota Soybean Processors, LLC

Notes to the Financial Statements

___________________________________________________________________________________________________________________

from $20 million to $28 million until the loan matures on December 1, 2020. Under the revolving term loan, the amount that the Company may borrow is increased from $16 million to $26 million. The amount available for borrowing on the revolving term loan, however, will decrease by $2 million every six months beginning on March 20, 2020, with a scheduled balloon payment for the remaining balance on the loan's maturity date of September 20, 2023. All other material items and conditions under the seasonal loan and revolving term loan agreements remain unchanged following these amendments.

F-20

EX-10.7

Amendment No. 18462590SLA-C

AMENDMENT TO CREDIT AGREEMENT

THIS AMENDMENT is entered into as of January 28, 2020, between SOUTH DAKOTA SOYBEAN PROCESSORS, LLC, Volga, South Dakota, a limited liability company (the "Borrower"), and COBANK, ACB, a federally-chartered instrumentality of the United States ("Lender"). Capitalized terms used and not defined herein will have the meanings assigned to such terms in the Agreement (as defined below).

RECITALS

The Borrower and Lender are parties to Credit Agreement Number 18462590SLA dated as of December 28, 2016 (such agreement, as may be amended, is hereinafter referred to as the "Agreement"). The Borrower and Lender now desire to amend the Agreement. For that reason, and for valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Borrower and Lender agree as follows:

1.Section 6.1 under Article 6 of the Agreement and will amended by adding Subsection 6.1(h) as follows:

ARTICLE 6Negative Covenants. Unless otherwise agreed to in writing by Lender, while this Agreement is in effect, the Borrower will not and will not permit its Subsidiaries to:

6.1     Other Indebtedness. Create, incur, assume or allow to exist, directly or indirectly, any indebtedness or liability for borrowed money (including trade or bankers' acceptances), letters of credit, or for the deferred purchase price of property or services (including leases that should be accounted for on the books of the lessee in accordance with the Accounting Standards), except for:

(h)    those operating leases, insofar as they are considered indebtedness in accordance with the Accounting Standards, as allowed for in Section 6.11 herein.

2.Section 6.5 under Article 6 of the Agreement is amended and restated to read as follows:

ARTICLE 6Negative Covenants. Unless otherwise agreed to in writing by Lender, while this Agreement is in effect, the Borrower will not and will not permit its Subsidiaries to:

6.5    Loans and Investments. Make any loan or advance to any person or entity, or purchase any capital stock, obligations or other securities of, make any capital contributions to, or otherwise invest in any person or entity, or form or create any partnerships or joint ventures, except:

(a)trade credit extended in the ordinary course of business.

(b)equity in, or obligation of, Lender.

(c)investments by the Borrower in the stock or other equities of Prairie AquaTech, LLC, Prairie AquaTech Manufacturing, LLC, and/or Prairie AquaTech Investments, LLC, provided that the aggregate amount of all such investments may not exceed $10,000,000.00 at any one time outstanding, plus future retained earnings.

(d)investments existing as of the date hereof.

1

3. Section 7.1 under Article 7 of the Agreement is amended and restated to read as follows:

ARTICLE 7    Financial Covenants. Unless otherwise agreed to in writing by Lender, while this Agreement is in effect:

7.1    Working Capital. The Borrower will have at the end of each period as set forth below an excess of consolidated current assets over consolidated current liabilities of not less than the amount shown next to such period set forth below, except that in determining: (a) current assets, any amount available under any revolving term promissory note hereunder (less the amount that would be considered a current liability if fully advanced) may be included; and (b) current liabilities, any current portion of previously designated operating leases reclassified as capital leases are to be excluded, (all as determined in accordance with the Accounting Standards).

Period	Working Capital
fiscal year of the Borrower	$12,500,000
for each other period for which financial statements are required to be furnished pursuant to this agreement	$10,000,000

4.Except as expressly amended hereby, all of the representations, warranties, terms, covenants and conditions contained in the Agreement and each other Loan Document will remain unamended and otherwise unmodified and in full force and effect.

5.This Amendment, each Promissory Note and any other Loan Document may be executed in counterparts, each of which will constitute an original, but all of which when taken together will constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or other electronic means will be as effective as delivery of a manually executed counterpart of this Amendment.

SIGNATURE PAGE FOLLOWS

2

SIGNATURE PAGE TO AMENDMENT TO CREDIT AGREEMENT

IN WITNESS WHEREOF, the parties hereto, by their duly authorized officers, have executed this Agreement.

SOUTH DAKOTA SOYBEAN PROCESSORS, LLC
By:	/s/ Mark Hyde
Name:	Mark Hyde
Title:	CFO

3

SIGNATURE PAGE TO AMENDMENT TO CREDIT AGREEMENT

IN WITNESS WHEREOF, the parties hereto, by their duly authorized officers, have executed this Agreement.

COBANK, ACB
By:	/s/ Patricia Machado
Name:	Patricia Machado
Title:	Assistant Corporate Secretary

4

Exhibit A

Compliance Certificate

As of Month Ended ____________________

This Certificate is delivered pursuant to the Credit Agreement dated December 28, 2016 (as amended, restated, or otherwise modified from time to time, the "Agreement"), by and among South Dakota Soybean Processors and CoBank, ACB. All terms used in this certificate have the meanings given to them in the Agreement.

Working Capital (Interim)
		Required to be no less than	$	10,000,000
	Current Assets
(-)	Current Liabilities
(+)	Current portion of operating lease(s) on balance sheet
(+)	Term revolver availability (less current portion)
Working Capital					$	—
	Compliance (Yes/No)

Working Capital (Fiscal Year End)
		Required to be no less than	$	12,500,000
	Current Assets
(-)	Current Liabilities
(+)	Current portion of operating lease(s) on balance sheet
(+)	Term revolver availability (less current portion)
Working Capital					$	—
	Compliance (Yes/No)

Debt Service Coverage (Fiscal Year End)
		Required to be no less than	1.20:1.00
Consolidated Net Income (after tax)
(+)	Depreciation and amortization
(-)	Non-Cash Patronage Income
(-)	Extraordinary Gain (+ Loss)
(-)	Gain on Asset Sale (+ Loss)
=	Available Cash		$	—
/	$4,000,000		$	4,000,000
Debt Service Coverage Ratio					$	—
	Compliance (Yes/No)

PRINCIPAL FINANCIAL OFFICER'S CERTIFICATION

The undersigned has reviewed the financial statements pertaining to the above calculations, and based on this review, certify to the best of my knowledge the financial statements as accurate and complete for the period reflected. The undersigned also hereby certifies that the foregoing is a correct statement of financial condition and compliance as of the month end stated above, and that, during such month, there existed at no time any condition or event which constituted an event or which, after notice or lapse of time or both, would constitute an event of default in the performance of any covenants contained in the Agreement.

AUTHORIZED SIGNATURE (or Electronic Signature) Date

EX-10.12

Loan No. 18462590S01-D

AMENDED AND RESTATED REVOLVING CREDIT PROMISSORY NOTE

THIS AMENDED AND RESTATED REVOLVING CREDIT PROMISSORY NOTE (this "Promissory Note") to the Credit Agreement dated December 28, 2016 (such agreement, as may be amended, hereinafter referred to as the "Credit Agreement"), is entered into as of January 28, 2020 between COBANK, ACB, a federally-chartered instrumentality of the United States ("Lender") and SOUTH DAKOTA SOYBEAN PROCESSORS, LLC, Volga, South Dakota, a limited liability company (together with its permitted successors and assigns, the "Borrower"). Capitalized terms not otherwise defined in this Promissory Note will have the meanings set forth in the Credit Agreement.

RECITALS

(A)This Promissory Note amends, restates, replaces and supersedes, but does not constitute payment of the indebtedness evidenced by, the promissory note set forth in the Amended and Restated Revolving Credit Promissory Note numbered 18462590S01-C, dated as of November 23, 2018, between Lender and the Borrower.

SECTION 1.REVOLVING CREDIT COMMITMENT. On the terms and conditions set forth in the Credit Agreement and this Promissory Note, Lender agrees to make loans to the Borrower during the period set forth below in an aggregate principal amount not to exceed $28,000,000.00, at any one time outstanding (the "Commitment"). Within the limits of the Commitment, the Borrower may borrow, repay and re-borrow.

SECTION 2.    PURPOSE. The purpose of the Commitment is to finance the operating needs of the Borrower.

SECTION 3.TERM. The term of the Commitment will be from the date hereof, up to and including December 1, 2020, or such later date as Lender may, in its sole discretion, authorize in writing (the "Term Expiration Date"). Notwithstanding the foregoing, the Commitment will be renewed for an additional year only if, on or before the Term Expiration Date, Lender provides to the Borrower a written notice of renewal for an additional year (a "Renewal Notice"). If on or before the Term Expiration Date, Lender grants a short-term extension of the Commitment, the Commitment will be renewed for an additional year only if Lender provides to the Borrower a Renewal Notice on or before such extended expiration date. All annual renewals will be measured from, and effective as of, the same day as the Term Expiration Date in any year.

SECTION 4.LIMITS ON ADVANCES, AVAILABILITY, ETC. The loans will be made available as provided in Article 2 of the Credit Agreement.

SECTION 5.INTEREST. The Borrower agrees to pay interest on the unpaid balance of the loan(s) in accordance with the following interest rate option(s):

(A)One-Month LIBOR Index Rate. At a rate (rounded upward to the nearest 1/100th and adjusted for reserves required on Eurocurrency Liabilities (as hereinafter defined) for banks subject to FRB Regulation D (as hereinafter defined) or required by any other federal law or regulation) per annum equal at all times to 2.200% (the "LIBOR Margin") above the higher of: (1) zero percent (0.000%); or (2) the rate reported at 11:00 a.m. London time for the offering of one (1)-month U.S. dollars deposits, by Bloomberg Information Services (or any successor or substitute service providing rate quotations comparable to those currently provided by such service, as determined by Lender from time to time, for the purpose of providing quotations of interest rates applicable to dollar deposits in the London interbank market) on the first U.S. Banking Day (as hereinafter defined) in each week, with such rate to change weekly on such day. The rate will be reset automatically, without the necessity of notice being provided to Lender, the Borrower, or any other party, on the first U.S. Banking Day of each succeeding week, and each change in the rate will be applicable to all balances subject to this option. Information about the then-current rate will be made available upon telephonic request. For purposes hereof: (a) "U.S. Banking Day" means a day on which Lender is open for business and banks are open for business in New York, New York; (b) "Eurocurrency Liabilities" will have the meaning as set forth in "FRB Regulation D"; and (c) "FRB Regulation D" means Regulation D as promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as amended.

1

Interest will be calculated on the actual number of days each loan is outstanding on the basis of a year consisting of 360 days and will be payable monthly in arrears by the 20th day of the following month or on such other day as Lender will require in a written notice to the Borrower ("Interest Payment Date").

SECTION 6.PROMISSORY NOTE. The Borrower promises to repay the unpaid principal balance of the loans on the Term Expiration Date, as the term may be extended from time to time.

In addition to the above, the Borrower promises to pay interest on the unpaid principal balance of the loans at the times and in accordance with the provisions set forth herein.

SECTION 7.SECURITY. The Borrower's obligations hereunder and, to the extent related hereto, under the Credit Agreement, will be secured as provided in Section 2.3 of the Credit Agreement.

SECTION 8.FEES.

(A)Commitment Fee. In consideration of the Commitment, the Borrower agrees to pay to Lender a commitment fee on the average daily unused available portion of the Commitment at the rate of 0.200% per annum (calculated on a 360-day basis), payable monthly in arrears by the 20th day following each month. Such fee will be payable for each month (or portion thereof) occurring during the original or any extended term of the Commitment.

(B)Letter of Credit Fee(s): The Borrower agrees to pay to Lender any fees, administrative expenses, and other customary charges that Lender may charge or incur from time to time in connection with the issuance, maintenance, amendment (if any), assignment or transfer (if any), negotiation, and administration of the letter of credit. In addition, the Borrower agrees to pay to Lender:

1.Issuance Fee. Upon the issuance of the letter of credit, an issuance fee equal to $1,000.00.

2.Commission Fee. A commission fee equal to the LIBOR Margin multiplied by the face amount of the letter of credit (computed on the basis of a year of 360 days and actual days elapsed), which fee shall be payable quarterly in arrears on the 20th of each calendar quarter following issuance of the letter of credit, and on the last day of the term of the Commitment.

SECTION 9.LETTERS OF CREDIT. If agreeable to Lender in its sole discretion in each instance, in addition to loans, the Borrower may utilize the Commitment to open irrevocable letters of credit for its account. Each letter of credit will be issued within a reasonable period of time after Lender's receipt of a duly completed and executed copy of Lender's then current form of Application and Reimbursement Agreement or, if applicable, in accordance with the terms of any CoTrade Agreement between the parties, and will reduce the amount available under the Commitment by the maximum amount capable of being drawn under such letter of credit. Any draw under any letter of credit issued hereunder will be deemed a loan under the Commitment and will be repaid in accordance with this Promissory Note. Each letter of credit must be in form and content acceptable to Lender and must expire no later than the maturity date of the Commitment.

SIGNATURE PAGE FOLLOWS

2

SIGNATURE PAGE TO PROMISSORY NOTE

IN WITNESS WHEREOF, the parties have caused this Promissory Note to the Credit Agreement to be executed by their duly authorized officer(s).

SOUTH DAKOTA SOYBEAN PROCESSORS, LLC
By:	/s/ Mark Hyde
Name:	Mark Hyde
Title:	CFO

3

SIGNATURE PAGE TO PROMISSORY NOTE

IN WITNESS WHEREOF, the parties have caused this Promissory Note to the Credit Agreement to be executed by their duly authorized officer(s).

COBANK, ACB
By:	/s/ Patricia Machado
Name:	Patricia Machado
Title:	Assistant Corporate Secretary

4

EX-10.15

Loan No. 18462590T05-B

AMENDED AND RESTATED REVOLVING TERM PROMISSORY NOTE

THIS AMENDED AND RESTATED REVOLVING TERM PROMISSORY NOTE (this "Promissory Note") to the Credit Agreement dated December 28, 2016 (such agreement, as may be amended, hereinafter referred to as the "Credit Agreement"), is entered into as of January 28, 2020 between COBANK, ACB, a federally-chartered instrumentality of the United States ("Lender") and SOUTH DAKOTA SOYBEAN PROCESSORS, LLC, Volga, South Dakota, a limited liability company (together with its permitted successors and assigns, the "Borrower"). Capitalized terms not otherwise defined in this Promissory Note will have the meanings set forth in the Credit Agreement.

RECITALS

(A) This Promissory Note amends, restates, replaces and supersedes, but does not constitute payment of the indebtedness evidenced by, the promissory note set forth in the Amended and Restated Revolving Term Promissory Note numbered 18462590T05-A, dated as of March 28, 2017, between Lender and the Borrower.

SECTION 1.REVOLVING TERM COMMITMENT. On the terms and conditions set forth in the Credit Agreement and this Promissory Note, Lender agrees to make loans to the Borrower during the period set forth below in an aggregate principal amount not to exceed the Maximum Commitment Amount (as set forth below) at any one time outstanding (the "Commitment"). The "Maximum Commitment Amount" will be $26,000,000.00 initially and will reduce during the term of the Commitment in accordance with the table below. Within the limits of the Commitment, the Borrower may borrow, repay and re-borrow.

Maximum Commitment Amount	From	Up to and Including
$24,000,000.00	March 20, 2020	September 19, 2020
$22,000,000.00	September 20, 2020	March 19, 2021
$20,000,000.00	March 20, 2021	September 19, 2021
$18,000,000.00	September 20, 2021	March 19, 2022
$16,000,000.00	March 20, 2022	September 19, 2022
$14,000,000.00	September 20, 2022	March 19, 2023
$12,000,000.00	March 20, 2023	September 20, 2023

SECTION 2.PURPOSE. The purpose of the Commitment is to finance capital expenditures and to provide working capital to the Borrower.

SECTION 3.TERM. The term of the Commitment will be from the date hereof, up to and including September 20, 2023, or such later date as Lender may, in its sole discretion, authorize in writing (the "Term Expiration Date").

SECTION 4.LIMITS ON ADVANCES, AVAILABILITY, ETC. The loans will be made available as provided in Article 2 of the Credit Agreement.

SECTION 5.INTEREST. The Borrower agrees to pay interest on the unpaid balance of the loan(s) in accordance with the following interest rate option(s):

(A)One-Month LIBOR Index Rate. At a rate (rounded upward to the nearest 1/100th and adjusted for reserves required on Eurocurrency Liabilities (as hereinafter defined) for banks subject to FRB Regulation D (as hereinafter defined) or required by any other federal law or regulation) per annum equal at all times to 2.450% above the higher of: (1) zero percent (0.000%); or (2) the rate reported at 11:00 a.m. London time for the offering of one (1)-month U.S. dollars deposits, by Bloomberg Information Services (or any successor or substitute service providing rate

1

quotations comparable to those currently provided by such service, as determined by Lender from time to time, for the purpose of providing quotations of interest rates applicable to dollar deposits in the London interbank market) on the first U.S. Banking Day (as hereinafter defined) in each week, with such rate to change weekly on such day. The rate will be reset automatically, without the necessity of notice being provided to Lender, the Borrower, or any other party, on the first U.S. Banking Day of each succeeding week, and each change in the rate will be applicable to all balances subject to this option. Information about the then-current rate will be made available upon telephonic request. For purposes hereof: (a) "U.S. Banking Day" means a day on which Lender is open for business and banks are open for business in New York, New York; (b) "Eurocurrency Liabilities" will have the meaning as set forth in "FRB Regulation D"; and (c) "FRB Regulation D" means Regulation D as promulgated by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as amended.

(B)Quoted Rate. At a fixed rate per annum to be quoted by Lender in its sole discretion in each instance. Under this option, rates may be fixed on such balances and for such periods, as may be agreeable to Lender in its sole discretion in each instance, provided that: ( 1) the minimum fixed period will be 365 days; (2) amounts may be fixed in an amount not less than $500,000.00; and (3) the maximum number of fixes in place at any one time will be ten.

The Borrower will select the applicable rate option at the time it requests a loan hereunder and may, subject to the limitations set forth above, elect to convert balances bearing interest at the variable rate option to one of the fixed rate options. Ifthe Borrower fails to elect an interest rate option, interest will accrue at the variable interest rate option. Upon the expiration of any fixed rate period, interest will automatically accrue at the variable rate option unless the amount fixed is repaid or fixed for an additional period in accordance with the terms hereof. Notwithstanding the foregoing, rates may not be fixed for periods expiring after the maturity date of the loans and rates may not be fixed in such a manner as to cause the Borrower to have to break any fixed rate balance in order to pay any installment of principal. All elections provided for herein will be made telephonically or in writing and must be received by 12:00 p.m. Denver, Colorado time. Interest will be calculated on the actual number of days each loan is outstanding on the basis of a year consisting of 360 days and will be payable monthly in arrears by the 20th day of the following month or on such other day as Lender will require in a written notice to the Borrower ("Interest Payment Date").

SECTION 6.PROMISSORY NOTE. The Borrower promises to repay on the date of each reduction in the Commitment set forth in the schedule in Section 1 above, the outstanding principal, if any, that is in excess of the reducing Commitment amount set forth in the aforementioned schedule, followed by a final installment in an amount equal to the remaining unpaid principal balance of the loans on the Term Expiration Date.

In addition to the above, the Borrower promises to pay interest on the unpaid principal balance of the loans at the times and in accordance with the provisions set forth herein.

SECTION 7.SECURITY. The Borrower's obligations hereunder and, to the extent related hereto, under the Credit Agreement, will be secured as provided in Section 2.3 of the Credit Agreement.

SECTION 8.FEES.

(A)Amendment Fee. In consideration of the Commitment, the Borrower agrees to pay to Lender on the execution hereof, a fee in the amount of $10,000.00.

(B)Commitment Fee. In consideration of the Commitment, the Borrower agrees to pay to Lender a commitment fee on the average daily unused available portion of the Commitment at the rate of 0.400% per annum (calculated on a 360-day basis), payable monthly in arrears by the 20th day following each month. Such fee will be payable for each month (or portion thereof) occurring during the original or any extended term of the Commitment.

SIGNATURE PAGE FOLLOWS

2

SIGNATURE PAGE TO PROMISSORY NOTE

IN WITNESS WHEREOF, the parties have caused this Promissory Note to the Credit Agreement to be executed by their duly authorized officer(s).

SOUTH DAKOTA SOYBEAN PROCESSORS, LLC
By:	/s/ Mark Hyde
Name:	Mark Hyde
Title:	CFO

3

SIGNATURE PAGE TO PROMISSORY NOTE

IN WITNESS WHEREOF, the parties have caused this Promissory Note to the Credit Agreement to be executed by their duly authorized officer(s).

COBANK, ACB
By:	/s/ Patricia Machado
Name:	Patricia Machado
Title:	Assistant Corporate Secretary

4

EX-31.1

Exhibit 31.1

Certification

I, Thomas Kersting, certify that:

1. I have reviewed the report on Form 10-K of South Dakota Soybean Processors, LLC for the year ended December 31, 2019;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 17, 2020

/s/ Thomas Kersting

Thomas Kersting

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification

I, Mark Hyde, certify that:

1. I have reviewed the report on Form 10-K of South Dakota Soybean Processors, LLC for the year ended December 31, 2019;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial data; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 17, 2020

/s/ Mark Hyde

Mark Hyde

Chief Financial Officer

(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO


18 U.S.C. SECTION 1350,


AS ADOPTED PURSUANT TO


SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of South Dakota Soybean Processors, LLC (the “Company”) on Form 10-K for the year ending December 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas Kersting, the Chief Executive Officer (Principal Executive Officer) of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of December 31, 2019 (the last date of the period covered by the Report).

Dated:	March 17, 2020	By	/s/ Thomas Kersting
			Thomas Kersting, Chief Executive Officer
			(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO


18 U.S.C. SECTION 1350,


AS ADOPTED PURSUANT TO


SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of South Dakota Soybean Processors, LLC (the “Company”) on Form 10-K for the year ending December 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark Hyde, the Chief Financial Officer (Principal Financial and Accounting Officer) of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of December 31, 2019 (the last date of the period covered by the Report).

Dated:	March 17, 2020	By	/s/ Mark Hyde
			Mark Hyde, Chief Financial Officer
			(Principal Financial and Accounting Officer)

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Business Credit Risk and Concentrations (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Receivables, Net, Current	$ 24,417,969	$ 20,521,900
Soybean Meal
Sales Revenue, Goods, Net, Percentage	63.00%	64.00%	59.00%
Soybean Oil
Sales Revenue, Goods, Net, Percentage	33.00%	33.00%	38.00%

XML

Derivative Instruments and Hedging Activities (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Derivatives not designated as hedging instruments:
Net Gain (Loss) Recognized on Derivative Activities	$ (4,150,476)	$ 8,670,176	$ 5,409,978
Commodity Contract
Derivatives not designated as hedging instruments:
Net Gain (Loss) Recognized on Derivative Activities	(4,057,389)	8,594,290	5,302,090
Foreign Exchange Contract
Derivatives not designated as hedging instruments:
Net Gain (Loss) Recognized on Derivative Activities	54,966	(29,269)	109,211
Interest Rate Swap
Derivatives not designated as hedging instruments:
Net Gain (Loss) Recognized on Derivative Activities	$ (148,053)	$ 105,155	$ (1,323)

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Property and Equipment (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Cost	$ 118,363,393	$ 110,314,779
Less accumulated depreciation	(53,846,189)	(51,246,765)
Total property and equipment, net	64,517,204	59,068,014
Land
Cost	516,326
Less accumulated depreciation	0
Total property and equipment, net	516,326	516,326
Land Improvements
Cost	2,158,383
Less accumulated depreciation	(613,295)
Total property and equipment, net	1,545,088	1,556,183
Building and Building Improvements
Cost	22,294,006
Less accumulated depreciation	(9,486,162)
Total property and equipment, net	12,807,844	12,588,664
Machinery and Equipment
Cost	84,180,577
Less accumulated depreciation	(42,700,456)
Total property and equipment, net	41,480,121	38,513,796
Railroad Cars
Cost	1,238,508
Less accumulated depreciation	(30,963)
Total property and equipment, net	1,207,545	1,232,315
Vehicles
Cost	146,754
Less accumulated depreciation	(110,722)
Total property and equipment, net	36,032	16,307
Furniture and Fixtures
Cost	1,363,744
Less accumulated depreciation	(904,591)
Total property and equipment, net	459,153	543,801
Construction In Progress
Cost	6,465,095
Less accumulated depreciation	0
Total property and equipment, net	$ 6,465,095	$ 4,100,622

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Principal Activity and Significant Accounting Policies (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jan. 01, 2019
Deferred Revenue	$ 313,347	$ 15,042
Accounts receivable credit period	30 days
Advertising Expense	$ 76,000	55,000	$ 57,000
Unrecognized Tax Benefits	0	0
Deferred Tax Assets, Net Of Valuation Allowance	19,800,000
Operating Lease, Right-of-Use Asset	5,979,771	7,918,283
Liabilities, Current	56,849,932	48,880,553
Liabilities, Noncurrent	15,307,727	$ 5,796,382
Lessee, Operating Lease, Liability, Payments, Due	$ 6,391,498
Building and Building Improvements | Maximum
Property, Plant and Equipment, Estimated Useful Lives	39 years
Building and Building Improvements | Minimum
Property, Plant and Equipment, Estimated Useful Lives	10 years
Furniture and Fixtures | Maximum
Property, Plant and Equipment, Estimated Useful Lives	15 years
Furniture and Fixtures | Minimum
Property, Plant and Equipment, Estimated Useful Lives	3 years
Railcars
Property, Plant and Equipment, Estimated Useful Lives	50 years
Lessee, Operating Lease, Liability, Payments, Due	$ 6,214,178
Accounting Standards Update 2016-02 [Member]
Operating Lease, Right-of-Use Asset				$ 10,300,000
Liabilities, Noncurrent				10,300,000
Lessee, Operating Lease, Liability, Payments, Due				$ 11,000,000

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Margin Deposits Margin Deposits (Details)	12 Months Ended
	Dec. 31, 2019
Future [Member]
Derivative [Line Items]
Contracts Maturity	12 months

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Related Party Transactions (Notes)

12 Months Ended

Dec. 31, 2019

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

The Company sold soybean products to Prairie AquaTech, LLC and Prairie AquaTech Manufacturing, LLC totaling $1,582,064, $314,420, and $138,442 during the years ended December 31, 2019, 2018, and 2017, respectively. As of December 31, 2019 and 2018, Prairie AquaTech, LLC owed the Company $104,947 and $18,540, respectively.

The Company has entered into agreements with Prairie AquaTech Manufacturing, LLC to perform various management services and to serve as the owner's representative during the construction of its new manufacturing facility adjacent to the Company's plant in Volga, South Dakota. The Company received a total of $1.72 million in compensation for those services, which was recorded in deferred liabilities on the Company's balance sheet. As of December 31, 2019 and 2018, the balance remaining in deferred liabilities was $101,111 and $777,342, respectively. The Company recognized revenues from management services of $758,931 and $942,658 during the years ended December 31, 2019 and 2018, respectively.

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Members' Equity

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Members' Equity

Members' Equity

A minimum of 2,500 capital units is required for an ownership interest in the Company. Such units are subject to certain transfer restrictions. The Company retains the right to redeem the units at the greater of $0.20 per unit or the original purchase price less cumulative distributions through the date of redemption in the event a member attempts to dispose of the units in a manner not in conformity with the Operating Agreement, if a member becomes a holder of less than 2,500 units, or if a member becomes an owner (directly or indirectly) of more than 10% of the issued and outstanding capital units. Earnings, losses and cash distributions are allocated to members based on their percentage of ownership in the Company.

On February 5, 2019, the Company's Board of Managers approved a cash distribution of approximately $15.2 million, or 50.0 cents per capital unit. The distribution was paid in accordance with the Company's operating agreement and distribution policy on February 7, 2019.

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Inventories (Tables)

12 Months Ended

Dec. 31, 2019

Inventory Disclosure [Abstract]

Schedule of Inventory, Current

The Company’s inventories consist of the following as of December 31:

	2019		2018
Finished goods	$	26,559,194	$	21,283,354
Raw materials	17,641,335		15,206,526
Supplies & miscellaneous	269,523		226,134
Totals	$	44,470,052	$	36,716,014

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Accounts Receivable (Details Textual)	12 Months Ended
	Dec. 31, 2019
Receivables [Abstract]
Percentage Of Late Fee On Past Due Receivables	1.50%
Accounts receivable credit period	30 days

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Investments in Cooperatives (Tables)

12 Months Ended

Dec. 31, 2019

Investments in and Advances to Affiliates, Schedule of Investments [Abstract]

Schedule Of Investment In Co Operatives

The Company’s investments in cooperatives consist of the following at December 31:

	2019		2018
CoBank	$	1,562,098	$	1,552,022

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Cash Flow Information (Tables)

12 Months Ended

Dec. 31, 2019

Cash Flow Information [Abstract]

Schedule Of Changes In Assets and Liabilities

The following is a schedule of changes in assets and liabilities used to determine cash from operating activities:

	2019			2018			2017
(Increase) decrease in assets:
Trade accounts receivable	$	(3,870,119	)	$	(749,792	)	$	551,935
Inventories	(7,754,038		)	1,250,073			(5,572,666		)
Margin account deposit	(4,421,308		)	2,026,900			(1,976,860		)
Prepaid expenses	(392,579		)	86,764			(122,285		)
	(16,438,044		)	2,613,945			(7,119,876		)

	2019			2018			2017
Increase (decrease) in liabilities:
Accounts payable	2,579,559			392,646			475,956
Accrued commodity purchases	(4,037,857		)	(2,258,421		)	1,954,659
Accrued expenses and interest	(733,416		)	1,362,624			(236,732		)
Deferred liabilities	(343,926		)	(1,469,278		)	228,217
	(2,535,640		)	(1,972,429		)	2,422,100
Totals	$	(18,973,684	)	$	641,516		$	(4,697,776	)

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Inventories

12 Months Ended

Dec. 31, 2019

Inventory Disclosure [Abstract]

Inventories

Inventories

 The Company’s inventories consist of the following as of December 31:

	2019		2018
Finished goods	$	26,559,194	$	21,283,354
Raw materials	17,641,335		15,206,526
Supplies & miscellaneous	269,523		226,134
Totals	$	44,470,052	$	36,716,014

Finished goods and raw materials are valued at estimated market value, which approximates net realizable value. In addition, futures and option contracts are marked to market through cost of revenues, with unrealized gains and losses recorded in the above inventory amounts. Supplies and other inventories are stated at net realizable value.

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Document And Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2019	Mar. 17, 2020	Jun. 30, 2019
Entity Registrant Name	SOUTH DAKOTA SOYBEAN PROCESSORS LLC
Entity Central Index Key	0001163609
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		30,419,000
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2019
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2019
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 112,595,763
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Small Business	false

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Cash Flow Information

12 Months Ended

Dec. 31, 2019

Cash Flow Information [Abstract]

Cash Flow Information

Cash Flow Information

The following is a schedule of changes in assets and liabilities used to determine cash from operating activities:

	2019			2018			2017
(Increase) decrease in assets:
Trade accounts receivable	$	(3,870,119	)	$	(749,792	)	$	551,935
Inventories	(7,754,038		)	1,250,073			(5,572,666		)
Margin account deposit	(4,421,308		)	2,026,900			(1,976,860		)
Prepaid expenses	(392,579		)	86,764			(122,285		)
	(16,438,044		)	2,613,945			(7,119,876		)

	2019			2018			2017
Increase (decrease) in liabilities:
Accounts payable	2,579,559			392,646			475,956
Accrued commodity purchases	(4,037,857		)	(2,258,421		)	1,954,659
Accrued expenses and interest	(733,416		)	1,362,624			(236,732		)
Deferred liabilities	(343,926		)	(1,469,278		)	228,217
	(2,535,640		)	(1,972,429		)	2,422,100
Totals	$	(18,973,684	)	$	641,516		$	(4,697,776	)

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Consolidated Statements of Changes in Members' Equity - USD ($)	Total	Capital Unit, Class A [Member]
Member's Equity at Dec. 31, 2016		$ 72,052,927
Balances (in Units) at Dec. 31, 2016		30,419,000
Net income (loss)	$ 6,767,068	$ 6,767,068
Distribution to members	(9,444,789)
Balance, December 31, 2012 at Dec. 31, 2017		$ 69,375,206
Balances (in Units) at Dec. 31, 2017		30,419,000
Net income (loss)	25,877,345	$ 25,877,345
Distribution to members		(5,075,303)
Balance, December 31, 2012 at Dec. 31, 2018		$ 90,177,248
Balances (in Units) at Dec. 31, 2018		30,419,000
Net income (loss)	$ 10,979,585	$ 10,979,585
Distribution to members		(15,209,500)
Balance, December 31, 2012 at Dec. 31, 2019		$ 85,947,333
Balances (in Units) at Dec. 31, 2019		30,419,000

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Notes Payable - Seasonal Loan

12 Months Ended

Dec. 31, 2019

Notes Payable Seasonal Loan [Abstract]

Notes Payable - Seasonal Loan

Notes Payable - Seasonal Loan

Prior to the amendment described in Note 19, the Company had entered into a revolving credit agreement with CoBank which expires February 1, 2020. The purpose of the credit agreement is to finance the operating needs of the Company. Under this agreement, the Company could borrow up to $20 million, and advances on the revolving credit agreement are secured. Interest accrues at a variable rate (3.99% at December 31, 2019).The Company pays a 0.20% annual commitment fee on any funds not borrowed. There were advances outstanding of $1,743,029 and $0 at December 31, 2019 and 2018, respectively. The remaining available funds to borrow under the terms of the revolving credit agreement are approximately $18.3 million as of December 31, 2019.

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Related Party Transactions (Details)			12 Months Ended
	May 15, 2018 USD ($) a	Apr. 03, 2018 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Prairie AquaTech, LLC
Related Party Transaction [Line Items]
Revenue from related parties		$ 1,720,000	$ 1,582,064	$ 314,420	$ 138,442
Due from related parties			104,947	18,540
Prairie Aqua Tech Manufacturing, LLC [Member]
Related Party Transaction [Line Items]
Due from Related Parties, Cumulative, Current			1,720,000
Due from Related Parties, Current			101,111	777,342
Volga, South Dakota | Prairie AquaTech, LLC
Related Party Transaction [Line Items]
Area of land (acres) | a	8
Proceeds from sale of real estate	$ 300,000
Management Service [Member] | Prairie Aqua Tech Manufacturing, LLC [Member]
Related Party Transaction [Line Items]
Revenue from related parties			$ 758,931	$ 942,658

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Operating Leases Schedule of Operating Leases (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($) railcar
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	525
Monthly Payment | $	$ 255,398
American Railcar Leasing, Maturity Date Jun 30, 2021
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	30
Monthly Payment | $	$ 30,780
Andersons Railcar Leasing Co. Maturity Date Jun 30, 2023
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	10
Monthly Payment | $	$ 5,000
Andersons Railcar Leasing Co. Maturity Date Jun 30, 2026
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	20
Monthly Payment | $	$ 11,300
GATX Corporation, Maturity Date Jun 30, 2020
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	15
Monthly Payment | $	$ 4,500
Midwest Railcar Corporation, Maturity Date Dec 31, 2021
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	64
Monthly Payment | $	$ 27,200
Trinity Capital, Maturity Date July 31, 2020
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	88
Monthly Payment | $	$ 33,704
Trinity Capital, Maturity Date Nov 30, 2020
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	29
Monthly Payment | $	$ 28,536
Trinity Capital, Maturity Date Sep 30, 2020
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	20
Monthly Payment | $	$ 13,600
Wells Fargo Rail, Maturity Date July 31, 2022
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	112
Monthly Payment | $	$ 52,557
Wells Fargo Rail, Maturity Date Dec 31, 2022
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	107
Monthly Payment | $	$ 35,845
Wells Fargo Rail, Maturity Date Dec, 31, 2011 With Monthly Payment $2926
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	7
Monthly Payment | $	$ 2,926
Wells Fargo Rail, Maturity Date Dec 31, 2021 With Monthly Payment $5850
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	15
Monthly Payment | $	$ 5,850
Wells Fargo Rail, Maturity Date Dec 31, 2021 With Monthly Payment $3600
Lessee, Lease, Description [Line Items]
Quantity of Railcars | railcar	8
Monthly Payment | $	$ 3,600

XML

Long-Term Debt (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Debt Disclosure [Abstract]
Revolving term loan from CoBank, interest at variable rates (4.21% and 4.55% at December 31, 2012 and 2011, respectively), secured by substantially all property and equipment. Loan matures March 20, 2018.	$ 16,000,000	$ 0
Notes Payable	603,342	665,222
Long-term Debt, Gross	16,603,342	665,222
Current maturities of long-term debt	(4,603,342)	(61,964)
Deferred Finance Costs, Own-share Lending Arrangement, Issuance Costs, Net	(8,077)	(10,231)
Totals	$ 11,991,923	$ 593,027

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Employee Benefit Plans (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Defined Contribution Plan, Cost	$ 186,000	$ 210,000	$ 163,000
Profit Sharing
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Deferred Compensation Arrangement with Individual, Percent of Profits Allocated	4.60%
Deferred Compensation Arrangement with Individual, Contributions by Employer	$ 2,000,000
Deferred Compensation Arrangement with Individual, Compensation Expense	$ 442,000	$ 1,161,000	$ 291,000

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

The following is a summary of property and equipment at December 31:

	2019							2018
	Cost		Accumulated Depreciation			Net		Net
Land	$	516,326	$	—		$	516,326	$	516,326
Land improvements	2,158,383		(613,295		)	1,545,088		1,556,183
Buildings and improvements	22,294,006		(9,486,162		)	12,807,844		12,588,664
Machinery and equipment	84,180,577		(42,700,456		)	41,480,121		38,513,796
Railroad cars	1,238,508		(30,963		)	1,207,545		1,232,315
Company vehicles	146,754		(110,722		)	36,032		16,307
Furniture and fixtures	1,363,744		(904,591		)	459,153		543,801
Construction in progress	6,465,095		—			6,465,095		4,100,622
Totals	$	118,363,393	$	(53,846,189	)	$	64,517,204	$	59,068,014

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Derivative Instruments and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule Of Derivatives Assets and Liabilities Not Designated As Hedging Instruments

As of December 31, 2019 and 2018, the value of the Company’s open futures, options and forward contracts was approximately $(5,955,928) and $802,770, respectively.

		Amounts As of December 31, 2019
	Balance Sheet Classification	Asset Derivatives		Liability Derivatives
Derivatives not designated as hedging instruments:
Commodity contracts	Current Assets	$	3,320,161	$	8,930,683
Foreign exchange contracts	Current Assets	29,696		27,582
Interest rate caps and floors	Current Liabilities	—		347,520
Totals		$	3,349,857	$	9,305,785

		Amounts As of December 31, 2018
	Balance Sheet Classification	Asset Derivatives		Liability Derivatives
Derivatives not designated as hedging instruments:
Commodity contracts	Current Assets	$	3,696,540	$	2,722,830
Foreign exchange contracts	Current Assets	129,258		100,730
Interest rate caps and floors	Current Liabilities	—		199,468
Totals		$	3,825,798	$	3,023,028

Schedule Of Derivative Instruments, Net Realized and Unrealized Gain (Loss) On Derivatives Not Designated As Hedging Instruments

During the years ended December 31, 2019, 2018, and 2017, net realized and unrealized gains (losses) on derivative transactions were recognized in the statements of operations as follows:

	Net Gain (Loss) Recognized on Derivative Activities for the Year Ending December 31:
	2019			2018			2017
Derivatives not designated as hedging instruments:
Commodity contracts	$	(4,057,389	)	$	8,594,290		$	5,302,090
Foreign exchange contracts	54,966			(29,269		)	109,211
Interest rate swaps, caps and floors	(148,053		)	105,155			(1,323		)
Totals	$	(4,150,476	)	$	8,670,176		$	5,409,978

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Accounts Receivable (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due	$ 4,672,484	$ 5,852,411
Current	19,748,073	14,698,027
Totals	24,420,557	20,550,438
Financing Receivables, 1 to 29 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due	4,306,064	5,362,970
Financing Receivables, 30 to 59 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due	341,956	387,670
Financing Receivables, 60 to 89 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due	10,302	101,687
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Past due	$ 14,162	$ 84

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2019

Retirement Benefits [Abstract]

Employee Benefit Plans

Employee Benefit Plans

The Company maintains a Section 401(k) plan for employees who meet the eligibility requirements set forth in the plan documents. The Company matches a percentage of an employee's contributed earnings. The amounts charged to expense under this plan were approximately $186,000, $210,000, and $163,000 for the years ended December 31, 2019, 2018, and 2017, respectively.

The Company's Board of Managers approved payment of a profit-based incentive bonus to be awarded to eligible employees following the close of each fiscal year. The Board has allocated approximately 4.6% of profits over $2 million to fund this benefit. Individual amounts are based upon criteria determined by a formula that considers current pay, level of responsibility, and impact on profits of each position. The amounts charged to expense under this incentive were approximately $442,000, $1,161,000, and $291,000 for the years ended December 31, 2019, 2018, and 2017, respectively.

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Consolidated Statements of Operations - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Net revenues	$ 371,275,766	$ 391,764,683	$ 375,759,337
Cost of revenues:
Production	30,889,789	27,040,845	24,448,686
Freight and rail	35,572,737	36,157,789	33,101,043
Brokerage fees	634,129	669,768	667,413
Total cost of revenues	356,475,930	362,601,571	364,150,130
Gross profit	14,799,836	29,163,112	11,609,207
Operating expenses:
Administration	3,624,306	3,834,845	3,211,255
Operating income	11,175,530	25,328,267	8,397,952
Other income (expense):
Interest expense	(919,157)	(897,942)	(457,909)
Other non-operating income (expense)	554,356	1,302,722	(1,664,235)
Patronage dividend income	169,456	146,258	493,201
Total other income (expense)	(195,345)	551,038	(1,628,943)
Income before income taxes	10,980,185	25,879,305	6,769,009
Income tax (expense), net	(600)	(1,960)	(1,941)
Net income	$ 10,979,585	$ 25,877,345	$ 6,767,068
Basic and diluted earnings (loss) per capital unit:
Net income (loss), in dollars per share	$ 0.36	$ 0.85	$ 0.22
Weighted average number of capital units outstanding for calculation of basic and diluted earnings (loss) per capital unit	30,419,000	30,419,000	30,419,000
Product
Cost of revenues:
Cost of product sold	$ 289,379,275	$ 298,733,169	$ 305,932,988

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Property and Equipment

12 Months Ended

Dec. 31, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

The following is a summary of property and equipment at December 31:

	2019							2018
	Cost		Accumulated Depreciation			Net		Net
Land	$	516,326	$	—		$	516,326	$	516,326
Land improvements	2,158,383		(613,295		)	1,545,088		1,556,183
Buildings and improvements	22,294,006		(9,486,162		)	12,807,844		12,588,664
Machinery and equipment	84,180,577		(42,700,456		)	41,480,121		38,513,796
Railroad cars	1,238,508		(30,963		)	1,207,545		1,232,315
Company vehicles	146,754		(110,722		)	36,032		16,307
Furniture and fixtures	1,363,744		(904,591		)	459,153		543,801
Construction in progress	6,465,095		—			6,465,095		4,100,622
Totals	$	118,363,393	$	(53,846,189	)	$	64,517,204	$	59,068,014

Depreciation of property and equipment amounts to $4,487,460, $4,155,061, and $3,621,564 for the years ended December 31, 2019, 2018, and 2017, respectively.

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Principal Activity and Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Principal Activity and Significant Accounting Policies

Principal Activity and Significant Accounting Policies

Organization

South Dakota Soybean Processors, LLC (the “Company” or “LLC”) processes and sells soybean products, such as soybean meal, oil, and hulls. The Company’s principal operations are located where we have plants in Volga and Miller, South Dakota.

Cash and cash equivalents

The Company considers all highly liquid investment instruments with original maturities of three months or less at the time of acquisition to be cash equivalents.

Inventories

Finished goods (soybean meal, oil, refined oil, and hulls) and raw materials (soybeans) are valued at net realizable value. This accounting policy is in accordance with the guidelines described in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 905, Agriculture (formerly AICPA Statement of Position No. 85-3, Accounting by Agricultural Producers and Agricultural Cooperatives). Supplies and other inventories are stated at net realizable value.

Investments

The Company accounts for its equity investments in Prairie AquaTech, LLC, Prairie AquaTech Manufacturing, LLC, and Prairie AquaTech Investments, LLC using Accounting Standards Update (ASU) No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. All equity securities that do not result in consolidation and are not accounted for under the equity method are measured at fair value with changes therein reflected in net income. We have elected to utilize the measurement alternative for equity investments that do not have readily determinable fair values and measure these investments at cost less any impairment plus or minus observable price changes in orderly transactions.

Prior to October 1, 2019, the Company accounted for its investment in Prairie AquaTech, LLC using the equity method due to the Company's ability to influence management decisions of Prairie AquaTech, LLC, due to its Board position on the Entity's Board of Managers. While the Company still holds its position on that entity's Board of Managers, the Company's ability to influence management decisions has been reduced due to additional quantity of board seats outstanding. Therefore, the Company ceased its accounting for its investment in Prairie AquaTech, LLC under the equity method, and began accounting for the investment using ASU No. 2016-01.

Investments in cooperatives are recorded in a manner similar to equity investments without readily determinable fair values, cost plus the amount of patronage earnings allocated to the Company, less any cash distributions received.

Property and equipment

Property and equipment is stated at cost. Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are charged to expense when incurred. When depreciable properties are sold or retired, the cost and accumulated depreciation are eliminated from the accounts and the resultant gain or loss is reflected in income.

Depreciation is provided for over the estimated useful lives of the individual assets using the straight-line method. The range of the estimated useful lives used in the computation of depreciation is as follows:

Building and improvements	10-39 years
Equipment and furnishings	3-15 years
Railcars	50 years

The Company reviews its long-lived assets for impairment whenever events indicate that the carrying amount of the asset may not be recoverable. If impairment indicators are present and the future cash flows is less than the carrying amount of the assets, values are reduced to the estimated fair value of those assets. The Company did not recognize any impairment on property and equipment during the years ended December 31, 2019, 2018, and 2017.

Deferred revenue

The Company recognizes revenues as earned. Amounts received in advance of the period in which service is rendered are recorded as a liability under “Deferred liabilities”.

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 amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue

The Company accounts for all of its revenues from contracts with customers under ASC 606, Revenue from Contracts with Customers.

The Company principally generates revenue from merchandising and transporting manufactured agricultural products used as ingredients in food, feed, energy and industrial products. Revenue is measured based on the consideration specified in the contract with a customer, and excludes any amounts collected on behalf of third parties (e.g. - taxes). The Company follows a policy of recognizing revenue at a single point in time when it satisfies its performance obligation by transferring control over a product to a customer. Control transfer typically occurs when goods are shipped from our facilities or at other predetermined control transfer points (for instance, destination terms). Shipping and handling costs related to contracts with customers for sale of goods are accounted for as a fulfillment activity and are included in cost of revenues. Accordingly, amounts billed to customers for such costs are included as a component of revenues.

Payments received in advance to the transfer of goods, or "contract liabilities", are included in "Deferred liabilities - current" on the Company's balance sheets. These customer prepayments totaled $313,347 and $15,042 as of December 31, 2019 and 2018, respectively. All of the $15,042 balance as of December 31, 2018 was recognized as revenue during the year ended December 31, 2019.

The following table presents a disaggregation of revenue from contracts with customers for the years ended December initiated 31, 2019, 2018, and 2017, by product type:

	2019		2018		2017
Soybean meal and hulls	$	244,012,663	$	257,440,362	$	228,685,518
Soybean oil and oil byproducts	127,263,103		134,324,321		147,073,819
Totals	$	371,275,766	$	391,764,683	$	375,759,337

Freight

The Company presents all amounts billed to the customer for freight as a component of net revenue. Costs incurred for freight are reported as a component of cost of revenue.

Advertising costs

Advertising and promotion costs are expensed as incurred. The Company incurred $76,000, $55,000, and $57,000, of advertising costs in the years ended December 31, 2019, 2018, and 2017, respectively.

Environmental remediation

It is management’s opinion that the amount of any potential environmental remediation costs will not be material to the Company’s financial condition, results of operations, or cash flows; therefore, no accrual has been recorded.

Accounting for derivative instruments and hedging activities

All of the Company’s derivatives are designated as non-hedge derivatives. The futures and options contracts, as well as the interest rate swaps, caps and floors, used by the Company are discussed below. Although the contracts may be effective economic hedges of specified risks, they are not designated as, nor accounted for, as hedging instruments.

The Company, as part of its trading activity, uses futures and option contracts offered through regulated commodity exchanges to reduce risk. The Company is exposed to risk of loss in the market value of inventories. To reduce that risk, the Company generally takes opposite and offsetting positions using futures contracts or options. Unrealized gains and losses on futures and options contracts used to hedge soybean, oil and meal inventories, as well as foreign exchange rates, are recognized as a component of net proceeds for financial reporting. Inventories are recorded at estimated market value. Consequently, unrealized gains and losses on derivative contracts are offset by unrealized gains and losses on inventories and reflected in current earnings.

The Company uses interest rate swaps, caps and floors offered through regulated commodity exchanges. The Company is exposed to risk of loss resulting from potential increases in interest rates on their variable rate debt. To reduce that risk, the Company has purchased interest rate swaps, caps and floors. Unrealized gains and losses on interest rate swaps, caps and floors are reflected in current earnings immediately.

Earnings per capital unit

Earnings per capital unit are calculated based on the weighted average number of capital units outstanding. The Company has no other capital units or other member equity instruments that are dilutive for purposes of calculating earnings per capital unit.

Income taxes

As a limited liability company, the Company’s taxable income or loss is allocated to members in accordance with their respective percentage ownership. Therefore, no provision or liability for income taxes has been included in the financial statements.

The Company has evaluated the provisions of FASB ASC 740-10 for uncertain tax positions. As of December 31, 2019 and 2018, the unrecognized tax benefit accrual was zero.

The Company will recognize future accrued interest and penalties related to unrecognized tax benefits in income tax expense if incurred.

As of December 31, 2019, the book value of the Company’s net assets exceeds the tax basis of those assets by approximately $19.8 million.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions.  We are no longer subject to income tax examinations by U.S. federal and state tax authorities for years prior to 2016.  We currently have no tax years under examination.

Reclassifications

Certain reclassifications have been made to the prior years' financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or members' equity.

Recent accounting pronouncements

Effective January 1, 2019, the Company adopted ASU No. 2016-02 (Leases). The standard requires companies to recognize operating lease assets and liabilities on the balance sheet and disclose key information regarding its leasing arrangements. The Company has elected the package of practical expedients permitted in ASC Topic 842. Accordingly, the Company accounted for all its leases as operating leases under the new guidance, without reassessing (a) whether the contracts contain leases under Topic 842, (b) whether classification of the operating leases would be different in accordance with ASC Topic 842, or (c) whether the unamortized initial direct costs before transition adjustments, if any, would have met the definition of initial direct costs in ASC Topic 842 at lease commencement. As a result of the adoption of the new lease accounting guidance, the Company recognized on January 1, 2018 (the beginning of the earliest period presented on the balance sheet): (a) a lease liability of $10.3 million, which represents the present value of the remaining lease payments of $11.0 million, discounted using the Company's incremental borrowing rate at the time of adoption of the respective leases, and (b) a right-of-use asset of $10.3 million, which represents the total lease liability adjusted for any unamortized initial direct costs. The Company also elected not to recognize and measure any short-term lease, which is a lease that, at the commencement date, has a term of 12 months or less and does not contain an option to purchase the underlying asset that the lessee is reasonably certain to exercise.

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Operating Leases - Maturity Analysis of Undiscounted Cash Flows of Operating Lease Liabilities (Details)	Dec. 31, 2019 USD ($)
Lessee, Lease, Description [Line Items]
Twelve-month periods ended December 31, 2020	$ 2,791,000
Twelve-month periods ended December 31, 2021	1,956,228
Twelve-month periods ended December 31, 2022	1,086,408
Twelve-month periods ended December 31, 2023	198,357
Twelve-month periods ended December 31, 2024	156,105
Thereafter	203,400
Total lease payments	6,391,498
Less amount of lease payments representing interest	(411,727)
Total present value of lease payments	5,979,771
Railcars
Lessee, Lease, Description [Line Items]
Twelve-month periods ended December 31, 2020	2,747,364
Twelve-month periods ended December 31, 2021	1,916,017
Twelve-month periods ended December 31, 2022	1,046,197
Twelve-month periods ended December 31, 2023	165,600
Twelve-month periods ended December 31, 2024	135,600
Thereafter	203,400
Total lease payments	6,214,178
Less amount of lease payments representing interest	(393,513)
Total present value of lease payments	5,820,665
Other
Lessee, Lease, Description [Line Items]
Twelve-month periods ended December 31, 2020	43,636
Twelve-month periods ended December 31, 2021	40,211
Twelve-month periods ended December 31, 2022	40,211
Twelve-month periods ended December 31, 2023	32,757
Twelve-month periods ended December 31, 2024	20,505
Thereafter	0
Total lease payments	177,320
Less amount of lease payments representing interest	(18,214)
Total present value of lease payments	$ 159,106

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Operating Leases Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Lessee, Lease, Description [Line Items]
Operating lease expense	$ 3,086,823	$ 3,132,935	$ 3,310,326
Operating lease, required monthly payments	$ 3,912
Railcars | Minimum
Lessee, Lease, Description [Line Items]
Operating lease term	3 years
Railcars | Maximum
Lessee, Lease, Description [Line Items]
Operating lease term	18 years
Machinery and equipment
Lessee, Lease, Description [Line Items]
Operating lease expense	$ 56,322	$ 58,954	$ 46,771
Machinery and equipment | Minimum
Lessee, Lease, Description [Line Items]
Operating lease term	3 years
Machinery and equipment | Maximum
Lessee, Lease, Description [Line Items]
Operating lease term	7 years

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Notes Payable - Seasonal Loan (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Line Of Credit Facility, Expiration Date	Feb. 01, 2020
Line of credit facility, maximum borrowing capacity	$ 20,000,000
Line Of Credit Facility, Interest Rate At Period End	3.99%
Long-term line of credit	$ 16,000,000	$ 0
Line Of Credit Facility, Remaining Borrowing Capacity	18,300,000
Advances On Revolving Credit Facility
Debt Instrument [Line Items]
Long-term line of credit	$ 1,743,029	$ 0
Seasonal Loan [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Commitment Fee Percentage	0.20%

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Business Credit Risk and Concentrations (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
United States
Segment Reporting Information, Revenue for Reportable Segment	$ 296,767,276	$ 306,474,381	$ 300,879,962
Canada
Segment Reporting Information, Revenue for Reportable Segment	74,508,490	85,290,302	74,879,375
United states and Canada
Segment Reporting Information, Revenue for Reportable Segment	$ 371,275,766	$ 391,764,683	$ 375,759,337

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Derivative Instruments and Hedging Activities (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Derivatives not designated as hedging instruments:
Asset Derivatives	$ 3,349,857	$ 3,825,798
Liability Derivatives	9,305,785	3,023,028
Commodity Contract
Derivatives not designated as hedging instruments:
Asset Derivatives	3,320,161	3,696,540
Liability Derivatives	8,930,683	2,722,830
Foreign Exchange Contract
Derivatives not designated as hedging instruments:
Asset Derivatives	29,696	129,258
Liability Derivatives	27,582	100,730
Interest Rate Swap
Derivatives not designated as hedging instruments:
Asset Derivatives	0	0
Liability Derivatives	$ 347,520	$ 199,468

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Accounts Receivable (Details 1) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Allowance for Doubtful Accounts Receivable [Roll Forward]
Balances, beginning of year	$ 0	$ 0	$ 0
Amounts charged (credited) to costs and expenses	0	42,909	0
Additions (deductions)	0	42,909	0
Balances, end of year	$ 0	$ 0	$ 0

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Investments in Cooperatives (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Investments in cooperatives	$ 1,562,098	$ 1,552,022
Investments in associated cooperative companies:
Proceeds from investments in cooperatives	0	0	$ 3,258,430
Loss on sale of investments in cooperatives	0	0	$ 1,451,728
Minnesota Soybean Processors | Disposal Group, Not Discontinued Operations
Investments in associated cooperative companies:
Proceeds from investments in cooperatives	3,258,180
Loss on sale of investments in cooperatives	1,451,978
Cobank
Investments in cooperatives	$ 1,562,098	$ 1,552,022

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Property and Equipment (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Abstract]
Depreciation	$ 4,487,460	$ 4,155,061	$ 3,621,564

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Principal Activity and Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Disaggregation of Revenue

The following table presents a disaggregation of revenue from contracts with customers for the years ended December initiated 31, 2019, 2018, and 2017, by product type:

	2019		2018		2017
Soybean meal and hulls	$	244,012,663	$	257,440,362	$	228,685,518
Soybean oil and oil byproducts	127,263,103		134,324,321		147,073,819
Totals	$	371,275,766	$	391,764,683	$	375,759,337

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Equity Investment in Affiliate (Notes)

12 Months Ended

Dec. 31, 2019

Equity Method Investments and Joint Ventures [Abstract]

Equity Investment in Affiliate

Investments in Related Parties

In 2016, the Company purchased convertible promissory notes from Prairie AquaTech, LLC with face amounts totaling $2.0 million. In 2017, the Company converted these notes, along with $161,563 of accrued interest, into 142,489 Series A Units in Prairie AquaTech, LLC. The units are approximately 8.9% of Prairie AquaTech, LLC's issued and outstanding equity securities.

Prior to October 2019, the Company accounted for the investment in Prairie AquaTech, LLC using the equity method due to the Company's ability to exercise significant influence based on its board position. The Company recognized losses of $135,588, $61,198, and $411,050 in 2019, 2018, and 2017, respectively, which is included in other non-operating income (expense). In October 2019, the Company ceased the accounting for its investment in Prairie AquaTech, LLC under the equity method, and began accounting for the investment at fair value as a result of its decreased ability to exercise significant influence due to an increased quantity of board positions.

On February 20, 2018, the Company invested $5.0 million in Prairie AquaTech Investments, LLC, which is approximately 10.9% of Prairie AquaTech Investments, LLC's issued and outstanding equity securities. A substantial portion of this investment was subsequently invested in Prairie AquaTech Manufacturing, LLC, a company formed to construct and operate the manufacturing facility that produces and sells a high protein feed ingredient derived from agricultural products such as soybeans. In addition, the Company contributed various construction and management services in exchange for a 3.3% equity interest in Prairie AquaTech Manufacturing, LLC. The remaining portion of the $5.0 million investment in Prairie AquaTech Investments, LLC was made in Prairie AquaTech, LLC, in which the Company previously invested directly in 2016.

On April 3, 2018, the Company entered into two agreements with Prairie AquaTech Manufacturing, LLC to perform various management services and to serve as the owner's representative during the construction of its new manufacturing facility adjacent to the Company's plant in Volga, South Dakota. The Company received a total of $1.72 million in compensation for those services of which $400,000 was received in cash and $1.32 million in preferred equity units. The equity units represent approximately 4.1% of Prairie AquaTech Manufacturing, LLC's issued and outstanding equity securities.

The Company accounts for the investments in Prairie AquaTech Investments, LLC and Prairie AquaTech Manufacturing, LLC using the fair value method in ASU No. 2016-01. The Company has elected to utilize the measurement alternative for equity investments that do not have readily determinable fair values and measure these investments at their cost less any impairment plus or minus any observable price changes in orderly transactions.

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Business Credit Risk and Concentrations

12 Months Ended

Dec. 31, 2019

Risks and Uncertainties [Abstract]

Business Credit Risk and Concentration

Business Credit Risk and Concentrations

The Company also grants credit to customers throughout the United States and Canada. The Company evaluates each customer’s credit worthiness on a case-by-case basis. Accounts receivable are generally unsecured. These receivables were $24,417,969 and $20,521,900 at December 31, 2019 and 2018, respectively.

Soybean meal sales accounted for approximately 63%, 64%, and 59% of total revenues for the years ended December 31, 2019, 2018, and 2017, respectively. Soybean oil sales represented approximately 33%, 33%, and 38% of total revenues for the years ended December 31, 2019, 2018, and 2017, respectively.

Net revenue by geographic area for the years ended December 31, 2019, 2018, and 2017 are as follows:

	2019		2018		2017
United States	$	296,767,276	$	306,474,381	$	300,879,962
Canada	74,508,490		85,290,302		74,879,375
Totals	$	371,275,766	$	391,764,683	$	375,759,337

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Long-Term Debt

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

The following is a summary of the Company's long-term debt at December 31, 2019 and 2018:

	2019			2018
Revolving term loan from CoBank, interest at variable rates (4.24% and 4.96% at December 31, 2019 and 2018, respectively), secured by substantially all property and equipment. Loan matures September 20, 2023.	$	16,000,000		$	—
Note payable to Brookings Regional Railroad Authority, due in annual principal and interest installments of $75,500, interest rate at 2.00%, secured by railroad track assets. Note matures June 1, 2020.	603,342			665,222
Total debt before current maturities and debt issuance costs	16,603,342			665,222
Less current maturities	(4,603,342		)	(61,964		)
Less debt issuance costs, net of amortization of $5,923 and $3,769 as of December 31, 2019 and 2018, respectively	(8,077		)	(10,231		)
Totals	$	11,991,923		$	593,027

Prior to the amendments described in Note 19, the Company entered into an agreement as of March 28, 2017 with CoBank to amend and restate its Credit Agreement, which includes both the revolving term and seasonal loans. Under the terms and conditions of the Credit Agreement, CoBank agreed to make advances to the Company for up to $24,000,000 on the revolving term loan with a variable effective interest rate of 4.24%. The available commitment decreases in scheduled periodic increments of $2,000,000 every six months starting March 20, 2018 until maturity on September 20, 2023. The Company pays a 0.40% annual commitment fee on any funds not borrowed. The debt issuance costs of $14,000 paid by the Company on this amendment will be amortized over the term of the loan. The principal balance outstanding on the revolving term loan was $16.0 million and $0 as of December 31, 2019 and 2018, respectively. There were no remaining commitments available to borrow on the revolving term loan as of December 31, 2019.

Under this agreement, the Company is subject to compliance with standard financial covenants and the maintenance of certain financial ratios. The Company was in compliance with all covenants and conditions with CoBank as of December 31, 2019.

Effective March 1, 2013, the State of South Dakota Department of Transportation agreed to loan the Brookings County Regional Railway Authority $964,070 for purposes of making improvements to the railway infrastructure near the Company's soybean processing facility near Volga, South Dakota. In consideration of this secured loan, the Company agreed to provide a guarantee to the State of South Dakota Department of Transportation for the full amount of the loan, plus interest. This guarantee was converted into a direct obligation of the Company's on October 16, 2013, when the Company received the entire loan proceeds and assumed responsibility for paying the annual principal and interest payments.

The following are minimum principal payments on long-term debt obligations for the years ended December 31:

2020	$	4,603,342
2021	4,000,000
2022	4,000,000
2023	4,000,000
Total	$	16,603,342

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Consolidated Balance Sheets - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Assets
Cash and cash equivalents	$ 624,681	$ 7,197,082
Trade accounts receivable	24,420,557	20,550,438
Inventories	44,470,052	36,716,014
Margin deposits	6,772,160	2,350,852
Prepaid expenses	1,884,742	1,492,163
Total current assets	78,172,192	68,306,549
Property and equipment	118,363,393	110,314,779
Less accumulated depreciation	(53,846,189)	(51,246,765)
Total property and equipment, net	64,517,204	59,068,014
Other assets
Investments in related parties	7,873,727	8,009,315
Investments in cooperatives	1,562,098	1,552,022
Operating Lease, Right-of-Use Asset	5,979,771	7,918,283
Total other assets	15,415,596	17,479,620
Total assets	158,104,992	144,854,183
Liabilities and Members' Equity
Excess of outstanding checks over bank balance	(8,164,752)	(3,893,179)
Current maturities of long-term debt	4,603,342	61,964
Notes Payable, Seasonal Loan, Current	1,743,029	0
Operating Lease, Liability, Current	2,663,967	2,714,928
Accounts payable	4,904,963	2,325,404
Accrued commodity purchases	31,346,533	35,384,390
Accrued expenses	2,900,118	3,697,631
Accrued interest	74,770	10,673
Deferred liabilities - current	448,458	792,384
Total current liabilities	56,849,932	48,880,553
Long-term liabilities
Long-term debt, net of current maturities and unamortized debt issuance costs	11,991,923	593,027
Operating Lease, Liability, Noncurrent	3,315,804	5,203,355
Commitments and contingencies (Notes 8, 9, 10, 16 & 18)
Members' equity
Total liabilities and members' equity	158,104,992	144,854,183
Capital Unit, Class A [Member]
Members' equity
Members' equity Class A Units, no par value, 30,419,000 units issued and outstanding	$ 85,947,333	$ 90,177,248

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Margin Deposits

12 Months Ended

Dec. 31, 2019

Margin Deposits [Abstract]

Margin Deposits

Margin Deposits

The Company has margin deposits with a commodity brokerage firm used to acquire futures and option contracts to manage the price volatility risk of soybeans, crude soybean oil and soybean meal. Consistent with its inventory accounting policy, these contracts are recorded at market value. At December 31, 2019, the Company’s futures contracts all mature within 12 months.

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Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Operating activities
Net income	$ 10,979,585	$ 25,877,345	$ 6,767,068
Charges and credits to net income not affecting cash:
Depreciation and amortization	4,489,614	4,167,715	3,624,962
Loss on sale of investments in cooperatives	0	0	1,451,728
(Gain) loss on sales of property and equipment	64,244	(246,206)	8,527
Loss on equity method investment	135,588	61,198	411,050
Non-cash patronage dividends and interest income	(42,364)	(24,131)	(168,379)
Change in current operating assets and liabilities	(18,973,684)	641,516	(4,697,776)
Net cash (used for) from operating activities	(3,347,017)	30,477,437	7,397,180
Investing activities
Proceeds from investments in cooperatives	0	0	3,258,430
Payments to Acquire Investments	0	(6,320,000)	0
Retirement of patronage dividends	32,288	0	0
Proceeds from sales of property and equipment	65,825	580,570	84,188
Purchase of property and equipment	(10,066,719)	(8,026,131)	(14,494,447)
Net cash (used for) investing activities	(9,968,606)	(13,765,561)	(11,151,829)
Financing activities
Change in excess of outstanding checks over bank balances	4,271,573	(601,784)	(2,148,263)
Net (payments) proceeds from seasonal borrowings	1,743,029	0	0
Distributions to members	(15,209,500)	(5,075,303)	(9,444,789)
Payments for debt issue costs	0	(10,500)	(14,000)
Proceeds from long-term debt	71,476,467	66,979,124	132,599,815
Principal payments on long-term debt	(55,538,347)	(71,489,854)	(128,209,239)
Net cash from (used for) financing activities	6,743,222	(10,198,317)	(7,216,476)
Net change in cash and cash equivalents	(6,572,401)	6,513,559	(10,971,125)
Cash and cash equivalents, beginning of year	7,197,082	683,523	11,654,648
Cash and cash equivalents, end of year	624,681	7,197,082	683,523
Supplemental disclosures of cash flow information
Interest	855,060	1,139,549	727,235
Income taxes	$ 0	$ (21,617)	$ 46,461

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Derivative Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

In the ordinary course of business, the Company enters into contractual arrangements as a means of managing exposure to changes in commodity prices and, occasionally, foreign exchange and interest rates. The Company’s derivative instruments primarily consist of commodity futures, options and forward contracts and interest rate swaps, caps and floors. Although these contracts may be effective economic hedges of specified risks, they are not designated as, nor accounted for, as hedging instruments. These contracts are recorded on the Company’s balance sheets at fair value as discussed in Note 14, Fair Value.

As of December 31, 2019 and 2018, the value of the Company’s open futures, options and forward contracts was approximately $(5,955,928) and $802,770, respectively.

		Amounts As of December 31, 2019
	Balance Sheet Classification	Asset Derivatives		Liability Derivatives
Derivatives not designated as hedging instruments:
Commodity contracts	Current Assets	$	3,320,161	$	8,930,683
Foreign exchange contracts	Current Assets	29,696		27,582
Interest rate caps and floors	Current Liabilities	—		347,520
Totals		$	3,349,857	$	9,305,785

		Amounts As of December 31, 2018
	Balance Sheet Classification	Asset Derivatives		Liability Derivatives
Derivatives not designated as hedging instruments:
Commodity contracts	Current Assets	$	3,696,540	$	2,722,830
Foreign exchange contracts	Current Assets	129,258		100,730
Interest rate caps and floors	Current Liabilities	—		199,468
Totals		$	3,825,798	$	3,023,028

During the years ended December 31, 2019, 2018, and 2017, net realized and unrealized gains (losses) on derivative transactions were recognized in the statements of operations as follows:

	Net Gain (Loss) Recognized on Derivative Activities for the Year Ending December 31:
	2019			2018			2017
Derivatives not designated as hedging instruments:
Commodity contracts	$	(4,057,389	)	$	8,594,290		$	5,302,090
Foreign exchange contracts	54,966			(29,269		)	109,211
Interest rate swaps, caps and floors	(148,053		)	105,155			(1,323		)
Totals	$	(4,150,476	)	$	8,670,176		$	5,409,978

The Company recorded gains (losses) of $(4,150,476), $8,670,176, and $5,409,978 in cost of goods sold related to its commodity derivative instruments for the years ended December 31, 2019, 2018, and 2017, respectively.

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Operating Leases (Tables)

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Schedule of Operating Leases

The following is a schedule of the Company's operating leases for railcars as of December 31, 2019:

Lessor	Quantity of Railcars	Commencement Date	Maturity Date	Monthly Payment
American Railcar Leasing	30	7/1/2015	6/30/2021	$	30,780
Andersons Railcar Leasing Co.	10	7/1/2018	6/30/2023	5,000
Andersons Railcar Leasing Co.	20	7/1/2019	6/30/2026	11,300
GATX Corporation	15	7/1/2017	6/30/2020	4,500
Midwest Railcar Corporation	64	1/1/2015	12/31/2021	27,200
Trinity Capital	88	8/1/2002	7/31/2020	33,704
Trinity Capital	29	12/1/2015	11/30/2020	28,536
Trinity Capital	20	10/1/2015	9/30/2020	13,600
Wells Fargo Rail	112	8/1/2017	7/31/2022	52,557
Wells Fargo Rail	107	1/1/2018	12/31/2022	35,845
Wells Fargo Rail	7	1/1/2004	12/31/2021	2,926
Wells Fargo Rail	15	1/1/2004	12/31/2021	5,850
Wells Fargo Rail	8	1/1/2015	12/31/2021	3,600
Totals	525			$	255,398

Lease, Cost

The components of lease costs recognized within our statements of operations for the years ended December 31, 2019, 2018, and 2017 were as follows:

	2019		2018		2017
Cost of revenues - Freight and rail	$	3,086,823	$	3,132,935	$	3,310,326
Cost of revenues - Production	43,783		47,496		37,756
Administration expenses	12,539		11,458		9,015
Total operating lease costs	$	3,143,145	$	3,191,889	$	3,357,097

The following summarizes the supplemental cash flow information for the years ended December 31, 2019, 2018, and 2017:

	2019		2018		2017
Cash paid for amounts included in measurement of lease liabilities	$	3,019,990	$	2,930,721	$	2,047,875
Supplemental non-cash information:
Right-of-use assets obtained in exchange for lease liabilities	$	809,916	$	457,856	$	2,141,091

The following summarizes the weighted-average remaining lease term and weighted-average discount rate:

	December 31, 2019
Weighted-average remaining lease term - operating leases (in years)	2.9
Weighted-average discount rate - operating leases	3.8	%

Lessee, Operating Lease, Liability, Maturity

The following is a maturity analysis of the undiscounted cash flows of the operating lease liabilities as of December 31, 2019:

	Railcars			Other			Total
Year ended December 31:
2020	$	2,747,364		$	43,636		$	2,791,000
2021	1,916,017			40,211			1,956,228
2022	1,046,197			40,211			1,086,408
2023	165,600			32,757			198,357
2024	135,600			20,505			156,105
Thereafter	203,400			—			203,400
Total lease payments	6,214,178			177,320			6,391,498
Less amount of lease payments representing interest	(393,513		)	(18,214		)	(411,727		)
Total present value of lease payments	$	5,820,665		$	159,106		$	5,979,771

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Business Credit Risk and Concentrations (Tables)

12 Months Ended

Dec. 31, 2019

Risks and Uncertainties [Abstract]

Schedules of Concentration of Risk, by Risk Factor

Net revenue by geographic area for the years ended December 31, 2019, 2018, and 2017 are as follows:

	2019		2018		2017
United States	$	296,767,276	$	306,474,381	$	300,879,962
Canada	74,508,490		85,290,302		74,879,375
Totals	$	371,275,766	$	391,764,683	$	375,759,337

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Operating Leases - Components of Operating Lease Costs (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Lessee, Lease, Description [Line Items]
Operating lease costs	$ 3,143,145	$ 3,191,889	$ 3,357,097
Cost of revenues - Freight and rail
Lessee, Lease, Description [Line Items]
Operating lease costs	3,086,823	3,132,935	3,310,326
Cost of revenues - Production
Lessee, Lease, Description [Line Items]
Operating lease costs	43,783	47,496	37,756
Administration expenses
Lessee, Lease, Description [Line Items]
Operating lease costs	$ 12,539	$ 11,458	$ 9,015

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Long-Term Debt (Details 1)	Dec. 31, 2019 USD ($)
For the years ending December 31:
2018	$ 4,603,342
2019	4,000,000
2020	4,000,000
2021	4,000,000
Long-term Debt	$ 16,603,342

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Equity Investment in Affiliate (Details)		12 Months Ended
	Apr. 03, 2018 USD ($) agreement	Dec. 31, 2019 USD ($) shares	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2018	Feb. 20, 2018 USD ($)
Schedule of Equity Method Investments [Line Items]
Loss on equity method investment		$ 135,588	$ 61,198	$ 411,050
Equity Method Investments		$ 7,873,727	8,009,315
Prairie AquaTech, LLC
Schedule of Equity Method Investments [Line Items]
Equity method investment, ownership percentage		8.90%				10.90%
Additional ownership proportion acquired in equity method investment (as a percent)					3.30%
Loss on equity method investment		$ 135,588	61,198	411,050
Equity Method Investments						$ 5,000,000
Prairie AquaTech, LLC
Schedule of Equity Method Investments [Line Items]
Face amount of debt			2,000,000
Interest income on convertible debt		$ 161,563
Converted instrument, shares issued (in shares) | shares		142,489
Number of agreements | agreement	2
Revenue from related parties	$ 1,720,000	$ 1,582,064	$ 314,420	$ 138,442
Revenue from related parties received in cash	400,000
Revenue from related parties received in preferred equity units	$ 1,320,000
Proportion of equity units received relative to total issued and outstanding equity securities (as a percent)	4.10%

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Inventories (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Finished goods	$ 26,559,194	$ 21,283,354
Raw materials	17,641,335	15,206,526
Supplies & miscellaneous	269,523	226,134
Totals	$ 44,470,052	$ 36,716,014

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Convertible Notes Receivable (Details) - Prairie AquaTech, LLC	12 Months Ended
	Dec. 31, 2019 USD ($) shares
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest income on convertible debt | $	$ 161,563
Converted instrument, shares issued (in shares) | shares	142,489

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Derivative Instruments and Hedging Activities (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net	$ (4,150,476)	$ 8,670,176	$ 5,409,978
Derivative Assets (Liabilities), At Fair Value, Net	$ (5,955,928)	$ 802,770

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Commitments (Details Textual) $ in Thousands	12 Months Ended
	Dec. 31, 2019 USD ($)
Monthly Payments For Operating Leases	$ 255,398

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Members' Equity (Details Textual) $ / shares in Units, $ in Millions		12 Months Ended
	Feb. 06, 2018 USD ($) $ / shares	Dec. 31, 2019 $ / Units shares
Equity [Abstract]
Minimum Capital Units | shares		2,500
Redemption Of Members Equity Per Unit | $ / Units		0.20
Net Income Distribution To Members Description		if a member becomes a holder of less than 2,500 units, or if a member becomes an owner (directly or indirectly) of more than 10% of the issued and outstanding capital units.
Distribution to members | $	$ 15.2
Distribution to members, in dollars per share | $ / shares	$ 0.500

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Principal Activity and Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Cash and Cash Equivalents, Polic

Cash and cash equivalents

The Company considers all highly liquid investment instruments with original maturities of three months or less at the time of acquisition to be cash equivalents.

Trade and Other Accounts Receivable, Policy

Accounts receivable are considered past due when payments are not received on a timely basis in accordance with the Company’s credit terms, which is generally 30 days from invoice date. 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.

Inventory, Policy

Inventories

Finished goods (soybean meal, oil, refined oil, and hulls) and raw materials (soybeans) are valued at net realizable value. This accounting policy is in accordance with the guidelines described in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 905, Agriculture (formerly AICPA Statement of Position No. 85-3, Accounting by Agricultural Producers and Agricultural Cooperatives). Supplies and other inventories are stated at net realizable value.

Cost Method Investments, Policy

Investments

The Company accounts for its equity investments in Prairie AquaTech, LLC, Prairie AquaTech Manufacturing, LLC, and Prairie AquaTech Investments, LLC using Accounting Standards Update (ASU) No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. All equity securities that do not result in consolidation and are not accounted for under the equity method are measured at fair value with changes therein reflected in net income. We have elected to utilize the measurement alternative for equity investments that do not have readily determinable fair values and measure these investments at cost less any impairment plus or minus observable price changes in orderly transactions.

Prior to October 1, 2019, the Company accounted for its investment in Prairie AquaTech, LLC using the equity method due to the Company's ability to influence management decisions of Prairie AquaTech, LLC, due to its Board position on the Entity's Board of Managers. While the Company still holds its position on that entity's Board of Managers, the Company's ability to influence management decisions has been reduced due to additional quantity of board seats outstanding. Therefore, the Company ceased its accounting for its investment in Prairie AquaTech, LLC under the equity method, and began accounting for the investment using ASU No. 2016-01.

Property, Plant and Equipment, Policy

Property and equipment

Property and equipment is stated at cost. Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are charged to expense when incurred. When depreciable properties are sold or retired, the cost and accumulated depreciation are eliminated from the accounts and the resultant gain or loss is reflected in income.

Depreciation is provided for over the estimated useful lives of the individual assets using the straight-line method. The range of the estimated useful lives used in the computation of depreciation is as follows:

Building and improvements	10-39 years
Equipment and furnishings	3-15 years
Railcars	50 years

The Company reviews its long-lived assets for impairment whenever events indicate that the carrying amount of the asset may not be recoverable. If impairment indicators are present and the future cash flows is less than the carrying amount of the assets, values are reduced to the estimated fair value of those assets.

Revenue Recognition, Deferred Revenue

Deferred revenue

The Company recognizes revenues as earned. Amounts received in advance of the period in which service is rendered are recorded as a liability under “Deferred liabilities”.

Use of Estimates, Policy

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 amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition, Policy

Revenue

The Company accounts for all of its revenues from contracts with customers under ASC 606, Revenue from Contracts with Customers.

The Company principally generates revenue from merchandising and transporting manufactured agricultural products used as ingredients in food, feed, energy and industrial products. Revenue is measured based on the consideration specified in the contract with a customer, and excludes any amounts collected on behalf of third parties (e.g. - taxes). The Company follows a policy of recognizing revenue at a single point in time when it satisfies its performance obligation by transferring control over a product to a customer. Control transfer typically occurs when goods are shipped from our facilities or at other predetermined control transfer points (for instance, destination terms). Shipping and handling costs related to contracts with customers for sale of goods are accounted for as a fulfillment activity and are included in cost of revenues. Accordingly, amounts billed to customers for such costs are included as a component of revenues.

Payments received in advance to the transfer of goods, or "contract liabilities", are included in "Deferred liabilities - current" on the Company's balance sheets. These customer prepayments totaled $313,347 and $15,042 as of December 31, 2019 and 2018, respectively. All of the $15,042 balance as of December 31, 2018 was recognized as revenue during the year ended December 31, 2019.

The following table presents a disaggregation of revenue from contracts with customers for the years ended December initiated 31, 2019, 2018, and 2017, by product type:

	2019		2018		2017
Soybean meal and hulls	$	244,012,663	$	257,440,362	$	228,685,518
Soybean oil and oil byproducts	127,263,103		134,324,321		147,073,819
Totals	$	371,275,766	$	391,764,683	$	375,759,337

Revenue Recognition, Cargo and Freight, Policy

Freight

The Company presents all amounts billed to the customer for freight as a component of net revenue. Costs incurred for freight are reported as a component of cost of revenue.

Advertising Costs, Policy

Advertising costs

Advertising and promotion costs are expensed as incurred. The Company incurred $76,000, $55,000, and $57,000, of advertising costs in the years ended December 31, 2019, 2018, and 2017, respectively.

Regulatory Environmental Costs, Policy

Environmental remediation

It is management’s opinion that the amount of any potential environmental remediation costs will not be material to the Company’s financial condition, results of operations, or cash flows; therefore, no accrual has been recorded.

Derivatives, Methods of Accounting, Hedging Derivatives

Accounting for derivative instruments and hedging activities

All of the Company’s derivatives are designated as non-hedge derivatives. The futures and options contracts, as well as the interest rate swaps, caps and floors, used by the Company are discussed below. Although the contracts may be effective economic hedges of specified risks, they are not designated as, nor accounted for, as hedging instruments.

The Company, as part of its trading activity, uses futures and option contracts offered through regulated commodity exchanges to reduce risk. The Company is exposed to risk of loss in the market value of inventories. To reduce that risk, the Company generally takes opposite and offsetting positions using futures contracts or options. Unrealized gains and losses on futures and options contracts used to hedge soybean, oil and meal inventories, as well as foreign exchange rates, are recognized as a component of net proceeds for financial reporting. Inventories are recorded at estimated market value. Consequently, unrealized gains and losses on derivative contracts are offset by unrealized gains and losses on inventories and reflected in current earnings.

The Company uses interest rate swaps, caps and floors offered through regulated commodity exchanges. The Company is exposed to risk of loss resulting from potential increases in interest rates on their variable rate debt. To reduce that risk, the Company has purchased interest rate swaps, caps and floors. Unrealized gains and losses on interest rate swaps, caps and floors are reflected in current earnings immediately.

Earnings Per Share, Policy

Earnings per capital unit

Earnings per capital unit are calculated based on the weighted average number of capital units outstanding. The Company has no other capital units or other member equity instruments that are dilutive for purposes of calculating earnings per capital unit.

Income Tax, Policy

Income taxes

As a limited liability company, the Company’s taxable income or loss is allocated to members in accordance with their respective percentage ownership. Therefore, no provision or liability for income taxes has been included in the financial statements.

The Company has evaluated the provisions of FASB ASC 740-10 for uncertain tax positions. As of December 31, 2019 and 2018, the unrecognized tax benefit accrual was zero.

The Company will recognize future accrued interest and penalties related to unrecognized tax benefits in income tax expense if incurred.

As of December 31, 2019, the book value of the Company’s net assets exceeds the tax basis of those assets by approximately $19.8 million.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions.  We are no longer subject to income tax examinations by U.S. federal and state tax authorities for years prior to 2016.  We currently have no tax years under examination.

New Accounting Pronouncements, Policy

Recent accounting pronouncements

Effective January 1, 2019, the Company adopted ASU No. 2016-02 (Leases). The standard requires companies to recognize operating lease assets and liabilities on the balance sheet and disclose key information regarding its leasing arrangements. The Company has elected the package of practical expedients permitted in ASC Topic 842. Accordingly, the Company accounted for all its leases as operating leases under the new guidance, without reassessing (a) whether the contracts contain leases under Topic 842, (b) whether classification of the operating leases would be different in accordance with ASC Topic 842, or (c) whether the unamortized initial direct costs before transition adjustments, if any, would have met the definition of initial direct costs in ASC Topic 842 at lease commencement. As a result of the adoption of the new lease accounting guidance, the Company recognized on January 1, 2018 (the beginning of the earliest period presented on the balance sheet): (a) a lease liability of $10.3 million, which represents the present value of the remaining lease payments of $11.0 million, discounted using the Company's incremental borrowing rate at the time of adoption of the respective leases, and (b) a right-of-use asset of $10.3 million, which represents the total lease liability adjusted for any unamortized initial direct costs. The Company also elected not to recognize and measure any short-term lease, which is a lease that, at the commencement date, has a term of 12 months or less and does not contain an option to purchase the underlying asset that the lessee is reasonably certain to exercise.

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Contingencies

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

As of December 31, 2019, the Company had unpaid commitments of approximately $76,000 for construction and acquisition of property and equipment, all of which is expected to be incurred by December 2020.

From time to time in the ordinary course of our business, we may be named as a defendant in legal proceedings related to various issues, including without limitation, workers’ compensation claims, tort claims, or contractual disputes. We carry insurance that provides protection against general commercial liability claims, claims against our directors, officers and employees, business interruption, automobile liability, and workers’ compensation claims. We are not currently involved in any material legal proceedings and are not aware of any potential claims.

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Principal Activity and Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Disaggregation of Revenue [Line Items]
Revenue	$ 371,275,766	$ 391,764,683	$ 375,759,337
Soybean meal and hulls
Disaggregation of Revenue [Line Items]
Revenue	244,012,663	257,440,362	228,685,518
Soybean oil and oil byproducts
Disaggregation of Revenue [Line Items]
Revenue	$ 127,263,103	$ 134,324,321	$ 147,073,819

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Investments in Cooperatives (Details Textual) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Proceeds from CHS, retirement of previous retained patronage	$ 32,288	$ 0	$ 0
Preferred Class B
Debt Instrument, Interest Rate, Stated Percentage	8.00%

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Contingencies - Narrative (Details) $ in Thousands	Dec. 31, 2019 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Unpaid Commitments For Construction and Acquisition Of Property and Equipment	$ 76

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Fair Value of Financial Instruments (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Financial assets:
Inventory	$ 44,107,212	$ 36,312,241
Margin deposits	6,772,160	2,350,852
Fair Value, Inputs, Level 1
Financial assets:
Inventory	(5,610,521)	973,710
Margin deposits	6,772,160	2,350,852
Fair Value, Inputs, Level 2
Financial assets:
Inventory	49,717,733	35,338,531
Margin deposits	0	0
Fair Value, Inputs, Level 3
Financial assets:
Inventory	0	0
Margin deposits	$ 0	$ 0

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Cash Flow Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
(Increase) decrease in assets:
Trade accounts receivable	$ (3,870,119)	$ (749,792)	$ 551,935
Inventories	(7,754,038)	1,250,073	(5,572,666)
Margin account deposit	(4,421,308)	2,026,900	(1,976,860)
Prepaid expenses	(392,579)	86,764	(122,285)
Total Increase (Decrease) in Operating Assets	(16,438,044)	2,613,945	(7,119,876)
Increase (decrease) in liabilities:
Accounts payable	2,579,559	392,646	475,956
Accrued commodity purchases	(4,037,857)	(2,258,421)	1,954,659
Accrued expenses and interest	(733,416)	1,362,624	(236,732)
Deferred liabilities	(343,926)	(1,469,278)	228,217
Total Increase (Decrease) in Operating Liabilities	(2,535,640)	(1,972,429)	2,422,100
Total	$ 18,973,684	$ (641,516)	$ 4,697,776

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Accounts Receivable (Tables)

12 Months Ended

Dec. 31, 2019

Receivables [Abstract]

Past Due Financing Receivables

The following table presents the aging analysis of trade receivables as of December 31, 2019 and 2018:

	2019		2018
Past due:
Less than 30 days past due	$	4,306,064	$	5,362,970
30-59 days past due	341,956		387,670
60-89 days past due	10,302		101,687
Greater than 90 days past due	14,162		84
Total past due	4,672,484		5,852,411
Current	19,748,073		14,698,027
Totals	$	24,420,557	$	20,550,438

Schedule of Accounts, Notes, Loans and Financing Receivable

The following table provides information regarding the Company’s allowance for doubtful accounts receivable as of December 31, 2019, 2018, and 2017:

	2019		2018			2017
Balances, beginning of year	$	—	$	—		$	—
Amounts charged (credited) to costs and expenses	—		42,909			—
Additions (deductions)	—		(42,909		)	—
Balances, end of year	$	—	$	—		$	—

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Subsequent Events

12 Months Ended

Dec. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Except for the events listed below, we evaluated all of our activity and concluded that no subsequent events have occurred that would require recognition in our financial statements or disclosed in the notes to our financial statements.

On January 21, 2020, the Company’s Board of Managers declared a cash distribution to its members of approximately $6.7 million. The distribution was issued and paid to members on February 7, 2020 in accordance with the Company's operating agreement and distribution policy.

On January 27, 2020, the Company entered into an amendment of the seasonal loan and revolving term loan agreements with CoBank. Under the seasonal loan, the maximum amount that the Company may borrow is increased from $20 million to $28 million until the loan matures on December 1, 2020. Under the revolving term loan, the amount that the Company may borrow is increased from $16 million to $26 million. The amount available for borrowing on the revolving term loan, however, will decrease by $2 million every six months beginning on March 20, 2020, with a scheduled balloon payment for the remaining balance on the loan's maturity date of September 20, 2023. All other material items and conditions under the seasonal loan and revolving term loan agreements remain unchanged following these amendments.

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Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, this guidance establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. The three levels of hierarchy and examples are as follows:

• Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange and commodity derivative contracts listed on the Chicago Board of Trade (“CBOT”).

• Level 2 – Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts, or priced with models using highly observable inputs, such as commodity prices using forward future prices.

• Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.

The following tables set forth financial assets and liabilities measured at fair value in the balance sheets and the respective levels to which fair value measurements are classified within the fair value hierarchy as of December 31, 2019 and 2018:

	Fair Value as of December 31, 2019
	Level 1			Level 2		Level 3		Total
Financial assets:
Inventory	$	(5,610,521	)	$	49,717,733	$	—	$	44,107,212
Margin deposits	$	6,772,160		$	—	$	—	$	6,772,160

	Fair Value as of December 31, 2018
	Level 1		Level 2		Level 3		Total
Financial Assets:
Inventory	$	973,710	$	35,338,531	$	—	$	36,312,241
Margin deposits	$	2,350,852	$	—	$	—	$	2,350,852

In accordance with ASC 825, Financial Instruments, the Company enters into various commodity derivative instruments, including futures, options, swaps and other agreements. The fair value of the Company’s commodity derivatives is determined using unadjusted quoted prices for identical instruments on the CBOT. The Company estimates the fair market value of their finished goods and raw materials inventories using the market price quotations of similar forward future contracts listed on the CBOT and adjusts for the local market adjustments derived from other grain terminals in the area. This market adjustment caused a negative balance in the Level 1 inventory amount as of December 31, 2019.

The Company considers the carrying amount of significant classes of financial instruments on the balance sheets, including cash, accounts receivable, and accounts payable, to be reasonable estimates of fair value due to their length or maturity. The fair value of the Company’s long-term debt approximates the carrying value. The interest rates on the long-term debt are similar to rates the Company would be able to obtain currently in the market.

The Company has patronage investments in other cooperatives and common and preferred stock holdings in privately held entities. There is no market for their patronage credits or the entity’s common and preferred holdings, and it is impracticable to estimate the fair value of the Company’s investments. These investments are carried on the balance sheet at original cost plus the amount of patronage earnings allocated to the Company, less any cash distributions received.

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Operating Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Operating Leases

Operating Leases

The Company has several operating leases for railcars. These leases have terms ranging from 3-18 years and do not have renewal terms provided. The leases require the Company to maintain the condition of the railcars, restrict the use of the railcars to specified products, such as soybean meal, hulls or oil, limit usage to the continental United States, Canada or Mexico, require approval to sublease to other entities, and require the Company's submission of its financial statements. Lease expense for all railcars was $3,086,823, $3,132,935, and $3,310,326 for the years ended December 31, 2019, 2018, and 2017, respectively.

The following is a schedule of the Company's operating leases for railcars as of December 31, 2019:

Lessor	Quantity of Railcars	Commencement Date	Maturity Date	Monthly Payment
American Railcar Leasing	30	7/1/2015	6/30/2021	$	30,780
Andersons Railcar Leasing Co.	10	7/1/2018	6/30/2023	5,000
Andersons Railcar Leasing Co.	20	7/1/2019	6/30/2026	11,300
GATX Corporation	15	7/1/2017	6/30/2020	4,500
Midwest Railcar Corporation	64	1/1/2015	12/31/2021	27,200
Trinity Capital	88	8/1/2002	7/31/2020	33,704
Trinity Capital	29	12/1/2015	11/30/2020	28,536
Trinity Capital	20	10/1/2015	9/30/2020	13,600
Wells Fargo Rail	112	8/1/2017	7/31/2022	52,557
Wells Fargo Rail	107	1/1/2018	12/31/2022	35,845
Wells Fargo Rail	7	1/1/2004	12/31/2021	2,926
Wells Fargo Rail	15	1/1/2004	12/31/2021	5,850
Wells Fargo Rail	8	1/1/2015	12/31/2021	3,600
Totals	525			$	255,398

The Company also has a number of other operating leases for machinery and equipment. These leases have terms ranging from 3-7 years; however, most of these leases have automatic renewal terms. These leases require monthly payments of $3,912. Rental expense under these other operating leases was $56,322, $58,954, and $46,771, for the years ended December 31, 2019, 2018, and 2017, respectively.

Operating leases are included in right-to-use lease assets, current operating lease liabilities, and long-term lease liabilities on the Company's balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company's secured incremental borrowing rates or implicit rates, when readily determinable. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

Lease expense for these operating leases is recognized on a straight-line basis over the lease terms. The components of lease costs recognized within our statements of operations for the years ended December 31, 2019, 2018, and 2017 were as follows:

	2019		2018		2017
Cost of revenues - Freight and rail	$	3,086,823	$	3,132,935	$	3,310,326
Cost of revenues - Production	43,783		47,496		37,756
Administration expenses	12,539		11,458		9,015
Total operating lease costs	$	3,143,145	$	3,191,889	$	3,357,097

The following summarizes the supplemental cash flow information for the years ended December 31, 2019, 2018, and 2017:

	2019		2018		2017
Cash paid for amounts included in measurement of lease liabilities	$	3,019,990	$	2,930,721	$	2,047,875
Supplemental non-cash information:
Right-of-use assets obtained in exchange for lease liabilities	$	809,916	$	457,856	$	2,141,091

The following summarizes the weighted-average remaining lease term and weighted-average discount rate:

	December 31, 2019
Weighted-average remaining lease term - operating leases (in years)	2.9
Weighted-average discount rate - operating leases	3.8	%

The following is a maturity analysis of the undiscounted cash flows of the operating lease liabilities as of December 31, 2019:

	Railcars			Other			Total
Year ended December 31:
2020	$	2,747,364		$	43,636		$	2,791,000
2021	1,916,017			40,211			1,956,228
2022	1,046,197			40,211			1,086,408
2023	165,600			32,757			198,357
2024	135,600			20,505			156,105
Thereafter	203,400			—			203,400
Total lease payments	6,214,178			177,320			6,391,498
Less amount of lease payments representing interest	(393,513		)	(18,214		)	(411,727		)
Total present value of lease payments	$	5,820,665		$	159,106		$	5,979,771

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Consolidated Balance Sheets [Parenthetical] - Capital Unit, Class A [Member] - shares	Dec. 31, 2019	Dec. 31, 2018
Common stock, shares issued	30,419,000	30,419,000
Common stock, shares outstanding	30,419,000	30,419,000

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Investments in Cooperatives

12 Months Ended

Dec. 31, 2019

Investments in and Advances to Affiliates, Schedule of Investments [Abstract]

Investments in Cooperatives

Investments in Cooperatives

The Company’s investments in cooperatives consist of the following at December 31:

	2019		2018
CoBank	$	1,562,098	$	1,552,022

During 2017, the Company sold its shares in Minnesota Soybean Processors for $3,258,180 resulting in a loss of $1,451,978.

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Accounts Receivable

12 Months Ended

Dec. 31, 2019

Receivables [Abstract]

Accounts Receivables

Accounts Receivable

Accounts receivable are considered past due when payments are not received on a timely basis in accordance with the Company’s credit terms, which is generally 30 days from invoice date. 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.

The following table presents the aging analysis of trade receivables as of December 31, 2019 and 2018:

	2019		2018
Past due:
Less than 30 days past due	$	4,306,064	$	5,362,970
30-59 days past due	341,956		387,670
60-89 days past due	10,302		101,687
Greater than 90 days past due	14,162		84
Total past due	4,672,484		5,852,411
Current	19,748,073		14,698,027
Totals	$	24,420,557	$	20,550,438

The following table provides information regarding the Company’s allowance for doubtful accounts receivable as of December 31, 2019, 2018, and 2017:

	2019		2018			2017
Balances, beginning of year	$	—	$	—		$	—
Amounts charged (credited) to costs and expenses	—		42,909			—
Additions (deductions)	—		(42,909		)	—
Balances, end of year	$	—	$	—		$	—

In general cash received is applied to the oldest outstanding invoice first, unless payment is for a specified invoice. The Company, on a case by case basis, may charge a late fee of 1.5% per month on past due receivables.

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Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Schedule of Debt

	2019			2018
Revolving term loan from CoBank, interest at variable rates (4.24% and 4.96% at December 31, 2019 and 2018, respectively), secured by substantially all property and equipment. Loan matures September 20, 2023.	$	16,000,000		$	—
Note payable to Brookings Regional Railroad Authority, due in annual principal and interest installments of $75,500, interest rate at 2.00%, secured by railroad track assets. Note matures June 1, 2020.	603,342			665,222
Total debt before current maturities and debt issuance costs	16,603,342			665,222
Less current maturities	(4,603,342		)	(61,964		)
Less debt issuance costs, net of amortization of $5,923 and $3,769 as of December 31, 2019 and 2018, respectively	(8,077		)	(10,231		)
Totals	$	11,991,923		$	593,027

Schedule of Maturities of Long-term Debt

minimum principal payments on long-term debt obligations for the years ended December 31:

2020	$	4,603,342
2021	4,000,000
2022	4,000,000
2023	4,000,000
Total	$	16,603,342

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Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables set forth financial assets and liabilities measured at fair value in the balance sheets and the respective levels to which fair value measurements are classified within the fair value hierarchy as of December 31, 2019 and 2018:

	Fair Value as of December 31, 2019
	Level 1			Level 2		Level 3		Total
Financial assets:
Inventory	$	(5,610,521	)	$	49,717,733	$	—	$	44,107,212
Margin deposits	$	6,772,160		$	—	$	—	$	6,772,160

	Fair Value as of December 31, 2018
	Level 1		Level 2		Level 3		Total
Financial Assets:
Inventory	$	973,710	$	35,338,531	$	—	$	36,312,241
Margin deposits	$	2,350,852	$	—	$	—	$	2,350,852

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Operating Leases - Supplemental Cash Flow and Weighted-Average Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Leases [Abstract]
Operating Lease, Weighted Average Remaining Lease Term	2 years 10 months 24 days
Operating Lease, Payments	$ 3,019,990	$ 2,930,721	$ 2,047,875
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 809,916	$ 457,856	$ 2,141,091
Operating Lease, Weighted Average Discount Rate, Percent	3.80%

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Long-Term Debt (Details Textual) - USD ($)		12 Months Ended
	Mar. 20, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Long-term line of credit		$ 16,000,000	$ 0
Line Of Credit Facility, Interest Rate At Period End		3.99%
Line of Credit Facility, Periodic Payment, Principal		$ 2,000,000
Payments of Debt Issuance Costs	$ 14,000	0	10,500	$ 14,000
Line of credit facility, fair value of amount outstanding		0
Notes Payable		603,342	$ 665,222
Revolving Term Loan
Long-term line of credit		$ 24,000,000
Line Of Credit Facility, Interest Rate At Period End		4.24%	4.96%
Line of Credit Facility, Commitment Fee Percentage		0.40%
Debt Instrument, Maturity Date		Sep. 20, 2023
Notes Payable, Other Payables [Member]
Debt Instrument, Periodic Payment, Interest		$ 75,500.0
Debt Instrument, Interest Rate, Stated Percentage		2.00%
Notes Payable		$ 964,070

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Subsequent Events (Details Textual) - USD ($)				12 Months Ended
	Feb. 07, 2020	Jan. 27, 2020	Jan. 21, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Jan. 26, 2020
Distributions to members				$ 15,209,500	$ 5,075,303	$ 9,444,789
Investments in related parties				7,873,727	$ 8,009,315
Line of credit facility, maximum borrowing capacity				$ 20,000,000
Subsequent Event
Distributions to members			$ 6,700,000
Distribution date	Feb. 07, 2020
Subsequent Event | CoBank Seasonal Loan
Line of credit facility, maximum borrowing capacity		$ 28,000,000					$ 20,000,000
Revolving Term Loan | Subsequent Event
Line of credit facility, maximum borrowing capacity		26,000,000					$ 16,000,000
Line Of Credit Facility, Maximum Borrowing Capacity Decrease Every Six Months		$ 2,000,000