10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
	For the quarterly period ended	January 31, 2017
	OR
o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
	For the transition period from               to               .
	COMMISSION FILE NUMBER 000-51177

GOLDEN GRAIN ENERGY, LLC

(Exact name of registrant as specified in its charter)

Iowa	02-0575361
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1822 43rd Street SW, Mason City, Iowa 50401
(Address of principal executive offices)
(641) 423-8525
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes     o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes     o No

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

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

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

o Yes     x No

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 

As of March 15, 2017, there were 18,953,000 Class A membership units outstanding and 920,000 Class B membership units outstanding.

1

INDEX

	Page Number
PART I	3
Item 1. Financial Statements	3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3. Quantitative and Qualitative Disclosures About Market Risk	21
Item 4. Controls and Procedures	21
PART II	22
Item 1. Legal Proceedings	22
Item 1A. Risk Factors	22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3. Defaults Upon Senior Securities	22
Item 4. Mine Safety Disclosures	22
Item 5. Other Information	22
Item 6. Exhibits	22
SIGNATURES	24

2

PART I    FINANCIAL INFORMATION

Item 1. Financial Statements

GOLDEN GRAIN ENERGY, LLC

Balance Sheets

ASSETS	January 31, 2017		October 31, 2016
	(Unaudited)
Current Assets
Cash and equivalents	$	12,786,417	$	16,532,190
Marketable securities	13,331,467		15,785,542
Accounts receivable	6,773,028		6,202,104
Other receivables	2,779,837		568,940
Derivative instruments	580,013		514,878
Inventory	7,125,056		6,905,684
Prepaid expenses and other	2,133,106		1,589,075
Total current assets	45,508,924		48,098,413
Property and Equipment
Land and land improvements	12,962,015		12,961,713
Building and grounds	28,305,386		28,305,386
Grain handling equipment	15,833,823		15,833,823
Office equipment	220,527		220,527
Plant and process equipment	95,638,555		95,681,018
Construction in progress	6,598,467		4,580,801
	159,558,773		157,583,268
Less accumulated depreciation	93,219,623		90,896,301
Net property and equipment	66,339,150		66,686,967
Other Assets
Investments	23,437,726		24,474,860
Other assets	1,471,691		1,503,666
Total other assets	24,909,417		25,978,526
Total Assets	$	136,757,491	$	140,763,906

Notes to the Financial Statements are an integral part of these Statements.

3

GOLDEN GRAIN ENERGY, LLC

Balance Sheets

LIABILITIES AND MEMBERS' EQUITY	January 31, 2017		October 31, 2016
	(Unaudited)
Current Liabilities
Accounts payable	$	7,798,070	$	7,660,157
Accrued expenses	1,244,730		1,413,127
Other current liabilities	144,691		163,884
Total current liabilities	9,187,491		9,237,168
Long-term Liabilities
Deferred compensation	365,881		355,623
Deferred revenue, net of current portion	71,665		93,443
Total long-term liabilities	437,546		449,066
Commitments and Contingencies
Members' Equity (19,873,000 units issued and outstanding)	127,132,454		131,077,672
Total Liabilities and Members’ Equity	$	136,757,491	$	140,763,906

Notes to the Financial Statements are an integral part of these Statements.

4

GOLDEN GRAIN ENERGY, LLC

Statements of Operations (Unaudited)

	Three Months Ended			Three Months Ended
	January 31, 2017			January 31, 2016
Revenues	$	56,063,549		$	48,773,123
Cost of Goods Sold	47,149,952			46,819,364
Gross Profit	8,913,597			1,953,759
Operating Expenses	952,147			998,968
Operating Income	7,961,450			954,791
Other Income (Expense)
Other income (expense)	(204,075		)	99,204
Interest income (expense)	2,806			(3,728		)
Equity in net income of investments	3,199,351			2,367,068
Total Other Income	2,998,082			2,462,544
Net Income	$	10,959,532		$	3,417,335
Basic & diluted net income per unit	$	0.55		$	0.17
Weighted average units outstanding for the calculation of basic & diluted net income per unit	19,873,000			19,873,000
Distributions Per Unit	$	0.75		$	0.70

Notes to the Financial Statements are an integral part of these Statements.

5

GOLDEN GRAIN ENERGY, LLC

Statements of Cash Flows (Unaudited)

	Three Months Ended			Three Months Ended
	January 31, 2017			January 31, 2016
Cash Flows from Operating Activities
Net income	$	10,959,532		$	3,417,335
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,341,129			2,077,355
Unrealized loss on risk management & marketable securities	138,940			327,283
Amortization of deferred revenue	(40,971		)	(27,598		)
Change in accretion of interest on grant & note receivable	(16,501		)	(16,441		)
Distributions (earnings) in excess of (distributions) earnings from investments	(1,006,866		)	1,298,325
Gain on insurance proceeds from involuntary conversion	(489,852		)	—
Deferred compensation expense	10,258			5,200
Change in assets and liabilities
Accounts receivable	(570,924		)	(1,129,635		)
Inventory	(219,372		)	(1,192,994		)
Prepaid expenses and other	(710,927		)	(355,704		)
Accounts payable	553,864			(318,431		)
Accrued expenses	(168,397		)	(477,800		)
Net cash provided by operating activities	10,779,913			3,606,895
Cash Flows from Investing Activities
Capital expenditures	(2,550,356		)	(3,151,193		)
Insurance proceeds from involuntary conversion	648,752			—
Purchase of marketable securities	—			(5,000,000		)
Proceeds from sale of marketable securities	2,250,000			5,000,000
Net cash provided by (used in) investing activities	348,396			(3,151,193		)
Cash Flows from Financing Activities
Refund on utility right costs	30,668			—
Distributions to members	(14,904,750		)	(13,911,100		)
Net cash (used in) financing activities	(14,874,082		)	(13,911,100		)
Net (Decrease) in Cash and Equivalents	(3,745,773		)	(13,455,398		)
Cash and Equivalents – Beginning of Period	16,532,190			21,084,029
Cash and Equivalents – End of Period	$	12,786,417		$	7,628,631
Supplemental Cash Flow Information
Cash paid for interest	$	12,802		$	16,648
Supplemental Disclosure of Noncash Operating, Investing & Financing Activities
Accounts payable related to construction in process	$	136,740		$	536,449
Distributions declared and unpaid by equity method investee	2,044,000			1,509,600

Notes to the Financial Statements are an integral part of these Statements.

6

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2017

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and notes disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company's audited financial statements for the year ended October 31, 2016, contained in the Company's annual report on Form 10-K for 2016.

In the opinion of management, the interim condensed financial statements reflect all adjustments considered necessary for fair presentation. The adjustments made to these statements consist only of normal recurring adjustments.

Nature of Business

Golden Grain Energy, LLC ("Golden Grain Energy" and "the Company") is an approximately 115 million gallon annual production ethanol plant near Mason City, Iowa. The Company sells its production of ethanol, distiller grains with solubles and corn oil primarily in the continental United States. The Company also holds several investments in various companies that focus on ethanol production, marketing and/or logistics.

Organization

Golden Grain Energy is organized as an Iowa limited liability company.  The members' liability is limited as specified in Golden Grain Energy's operating agreement and pursuant to the Iowa Revised Uniform Limited Liability Company Act. 

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles.  Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

Cash and Equivalents

The Company's cash balances are maintained in bank depositories and regularly exceed federally insured limits. The Company has not experienced any losses in connection with these balances. Also included in cash and equivalents are highly liquid investments, that are readily convertible into known amounts of cash, which are subject to an insignificant risk of change in value due to interest rate, quoted price or penalty on withdrawal and have a maturity of three months or less.

Marketable Securities

The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are recorded as either short term or long term on the Balance Sheet, based on contractual maturity date and are stated at amortized cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings.

Marketable securities consist of certificates of deposits with original maturities of greater than three months and mutual funds. Certificates of deposit are considered held to maturity securities, which are measured at cost. Mutual funds are considered trading securities which are measured at fair value using prices obtained from pricing services. Any unrealized or realized gains and losses on the trading securities are recorded as part of other income.

At January 31, 2017, marketable securities consisted of mutual funds invested in intermediate-term municipal and government bonds with an approximate cost and fair market value of $13,109,000 and $12,831,000, respectively, and certificates of deposit all with maturities of less than one year and approximate value of $500,000. At October 31, 2016, marketable securities consisted of mutual funds invested in intermediate-term municipal and government bonds with an approximate cost and fair market value of $12,967,000 and $13,036,000, respectively, and certificates of deposit all with maturities of less than one year and an approximate value of $2,750,000. For the periods ended January 31, 2017 and 2016, there was no other-than-temporary impairment recognized. For the three months ended January 31, 2017 and 2016, the Company recorded interest, dividends and net realized and unrealized gains (losses) of approximately $(204,000) and $99,000, respectively, from these investments as part of other income.

7

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2017

Accounts Receivables

Credit sales are made primarily to one customer and no collateral is required. The Company carries these accounts receivable at original invoice amount with no allowance for doubtful accounts due to the historical collection rates on these accounts.

Investments

The Company has less than a 20% investment interest in five companies in related industries. These investments are being accounted for by the equity method of accounting under which the Company's share of net income is recognized as income in the Company's statement of operations and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account. Distributions or dividends received in excess of the carrying value are recognized as income in the statement of operations. The investments are evaluated for indications of impairment on a regular basis. A loss would be recognized when the fair value is determined to be less than the carrying value.

The fiscal years of Renewable Products Marketing Group, LLC (RPMG) and Guardian Energy Janesville, LLC end on September 30 and the fiscal years of Absolute Energy, LLC, Homeland Energy Solutions, LLC and Lawrenceville Tank, LLC, end on December 31. The Company consistently follows the practice of recognizing the net income based on the most recent reliable data. Therefore, the net income which is reported in the Company's statement of operations for the period ended January 31, 2017, for all companies, is based on the investee's results for the three months ended December 31, 2016.

Note Receivable

The Company has a note receivable from an unrelated party. The Company carries the note at original face value plus accrued interest which is equal to 6% as of January 31, 2017 and is compounded monthly. The note commenced in December 2014 with a face value of $510,000 and has a maturity of 5 years. Annual payments are to begin in September 2018. Balance of the note receivable, including accrued interest, as of January 31, 2017 and October 31, 2016 was approximately $577,000 and $566,000, respectively.

Revenue and Cost Recognition

Revenue from the sale of the Company's products is recognized at the time title to the goods and all risks of ownership transfer to the customers.  This generally occurs upon shipment, loading of the goods or when the customer picks up the goods. Collectability of revenue is reasonably assured based on historical evidence of collectability between the Company and its customers. Interest income is recognized as earned.

Shipping costs incurred by the Company in the sale of ethanol, distiller grains and corn oil are not specifically identifiable and as a result, revenue from the sale of ethanol, distiller grains and corn oil are recorded based on the net selling price reported to the Company from its marketer. Railcar lease costs incurred by the Company in the sale and shipment of distiller grain products are included in cost of goods sold.

Inventory

Inventories are generally valued at the lower of weighted average cost or net realizable value.  In the valuation of inventories and purchase commitments, net realizable value is defined as estimated selling price in the ordinary course of business less reasonable predictable costs of completion, disposal and transportation.

Property & Equipment

Property and equipment are stated at historical cost. Significant additions and betterments are capitalized, while expenditures for maintenance and repairs are charged to operations when incurred. The Company uses the straight-line method of computing depreciation over the estimated useful lives between 3 and 40 years.

The Company reviews its property and equipment for impairment whenever events indicate that the carrying amount of the asset group may not be recoverable. If circumstances require a long-lived asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset group to the carrying value of the asset group. If the carrying value of the asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

8

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2017

Investment in commodities contracts, derivative instruments and hedging activities

The Company evaluates its contracts to determine whether the contracts are derivative instruments. Certain contracts that meet the definition of a derivative may be exempted from derivative accounting and treated as normal purchases or normal sales if documented as such. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business.

The Company enters into short-term cash, option and futures contracts as a means of securing corn and natural gas for the ethanol plant and managing exposure to changes in commodity and energy prices. The Company occasionally also enters into derivative contracts to hedge its exposure to price risk as it relates to ethanol sales. As part of its risk management process, the Company uses futures and option contracts through regulated commodity exchanges or through the over-the-counter market to manage its risk related to pricing of inventories. All of the Company's derivatives, other than those excluded under the normal purchases and sales exclusion, are designated as non-hedge derivatives, with changes in fair value recognized in net income. Although the contracts are economic hedges of specified risks, they are not designated or accounted for as hedging instruments.

Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas are included as a component of cost of goods sold and derivative contracts related to ethanol are included as a component of revenues in the accompanying financial statements. The fair values of contracts are presented on the accompanying balance sheet as derivative instruments net of cash due from/to broker.

Net income per unit

Basic and diluted earnings per unit are computed using the weighted-average number of Class A and B units outstanding during the period.

Fair Value

Financial instruments include cash and equivalents, marketable securities, receivables, accounts payable, accrued expenses and derivative instruments. The fair value of marketable securities and derivative financial instruments is based on quoted market prices, as disclosed in Note 7. The fair value, determined using level 3 inputs, of all other current financial instruments is estimated to approximate carrying value due to the short-term nature of these instruments.

Risks and Uncertainties

The Company has certain risks and uncertainties that it will experience during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distiller grains to customers primarily located in the United States. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. For the three months ended January 31, 2017, ethanol sales accounted for approximately 84% of total revenue, distiller grains sales accounted for approximately 12% of total revenue and corn oil sales accounted for approximately 4% of total revenue while corn costs averaged approximately 77% of cost of goods sold.

The Company's operating and financial performance is largely driven by the prices at which ethanol is sold and the net expense of corn. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and unleaded gasoline and the petroleum markets with ethanol selling, in general, for less than gasoline at the wholesale level. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The Company's largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, weather, government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities.

9

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2017

2.    INVENTORY

Inventory consisted of the following as of January 31, 2017 and October 31, 2016:

	January 31, 2017		October 31, 2016
Raw Materials	$	4,052,774	$	3,808,935
Work in Process	1,205,615		1,170,767
Finished Goods	1,866,667		1,925,982
Totals	$	7,125,056	$	6,905,684

3.    BANK FINANCING

The Company has entered into a master loan agreement with Farm Credit Services of America (FLCA) which includes revolving loans with original maximum borrowings of $35 million, which currently has availability of $10 million and matures on February 1, 2020. Interest on the term loan is payable monthly at 3.15% above the one-month LIBOR (3.93% as of January 31, 2017). The borrowings are secured by substantially all the assets of the Company. The credit agreements are subject to covenants, requiring the Company to maintain various financial ratios, as well as certain distribution limitations. As of January 31, 2017, the Company was in compliance with all of the loan covenants. Failure to comply with the protective loan covenants or maintain the required financial ratios may cause acceleration of any outstanding principal balances on the loans and/or imposition of fees and penalties. As of January 31, 2017 and October 31, 2016, the Company had no borrowings outstanding.

4.    RELATED PARTY TRANSACTIONS

The Company purchased corn and materials from members of its Board of Directors or Risk Management Committee that own or manage elevators. The Company also purchased ingredients from RPMG. Purchases from the related parties during the three months ended January 31, 2017 totaled approximately $10,379,000. Purchases during the three months ended January 31, 2016 totaled approximately $24,260,000. As of January 31, 2017 and October 31, 2016, the amount owed to related parties was approximately $547,000 and $518,000, respectively (See Note 5).

5.    COMMITMENTS, CONTINGENCIES AND AGREEMENTS

Ethanol, Distiller Grains and Corn Oil marketing agreements and major customers

The Company has entered into marketing agreements with a marketing company, in which the Company has an investment, for the exclusive rights to market, sell and distribute the entire ethanol, distiller grains and corn oil inventory produced by the Company. The marketing fees are presented net in revenues.

Approximate sales and marketing fees related to the agreements in place are as follows:

	Three Months Ended January 31,
	2017		2016
Sales ethanol, distiller grains & corn oil	$	56,097,000	$	48,873,000
Marketing fees	110,000		100,000
As of	January 31, 2017		October 31, 2016
Amount due from RPMG	$	6,773,000	$	6,202,000

10

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2017

6.    RISK MANAGEMENT

The Company's activities expose it to a variety of market risks, including the effects of changes in commodity prices. These financial exposures are monitored and managed by the Company as an integral part of its overall risk-management program. The Company's risk management program focuses on the unpredictability of financial and commodities markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results.

To reduce price risk caused by market fluctuations, the Company generally follows a policy of using exchange traded futures contracts to reduce its net position of merchandisable agricultural commodity inventories and forward cash purchase and sales contracts and uses exchange traded futures contracts to reduce price risk. Exchange-traded futures contracts are valued at market price. Changes in market price of contracts related to corn and natural gas are recorded in cost of goods sold and changes in market prices of contracts related to sale of ethanol are recorded in revenues.

The following table represents the approximate amount of realized and unrealized gains (losses) and changes in fair value recognized in earnings on commodity contracts for periods ended January 31, 2017 and 2016 and the fair value of derivatives as of January 31, 2017 and October 31, 2016:

	Income Statement Classification	Realized Gain (Loss)		Change in Unrealized Gain (Loss)			Total Gain (Loss)
Derivatives not designated as hedging instruments:
Commodity Contracts for the	Revenue	$	9,000	$	62,000		$	71,000
three months ended January 31, 2017	Cost of Goods Sold	154,000		(101,000		)	53,000
	Total	$	163,000	$	(39,000	)	$	124,000
Commodity Contracts for the	Revenue	$	—	$	—		$	—
three months ended January 31, 2016	Cost of Goods Sold	382,000		217,000			599,000
	Total	$	382,000	$	217,000		$	599,000

	Balance Sheet Classification	January 31, 2017			October 31, 2016
Futures and option contracts through July 2018
In gain position		$	94,000		$	157,000
In loss position		(198,000		)	(222,000		)
Cash held by broker		684,000			580,000
	Current Asset	$	580,000		$	515,000

11

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2017

As of January 31, 2017, the Company had the following approximate outstanding purchase and sale commitments, of which approximately $6,486,000 of the purchase commitments were with related parties.

	Commitments Through	Amount
Sale commitments
Corn Oil - fixed price	February 2017	$	692,000
Distiller Grains - fixed price	March 2017	2,121,000
Purchase commitments
Corn - fixed price	December 2017	$	9,425,000
Corn - basis contract	July 2018	37,528,000

As of January 31, 2017, the Company has fixed price futures and forward contracts in place for approximately 21% of our anticipated corn needs, 9% of our natural gas needs and 2% of our ethanol sales for the next 12 months with limited open positions beyond that period.

7.    FAIR VALUE MEASUREMENTS

Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities.

Level 3: Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

A description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

Marketable Securities: The Company's investments in short-term liquid investments (e.g. mutual funds), are classified within Level 1, carried at fair value based on the quoted market prices.

Derivative financial instruments: Commodity futures and exchange-traded commodity options contracts are reported at fair value utilizing Level 1 inputs. For these contracts, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from markets such as the CME and NYMEX.  Crush swaps are bundled contracts or combined contracts that include a portion of corn, ethanol and natural gas rolled into a single trading instrument. These contracts are reported at fair value utilizing Level 2 inputs and are based on the various trading activity of the components of each segment of the bundled contract.

12

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2017

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

	Total			Level 1			Level 2			Level 3
Marketable securities:
Assets, January 31, 2017	$	580,000		$	580,000		$	—		$	—
Assets, October 31, 2016	13,036,000			13,036,000			—			—
Derivative financial instruments:
January 31, 2017
Assets	$	94,000		$	32,000		$	62,000		$	—
Liabilities	(198,000		)	(143,000		)	(55,000		)	—
October 31, 2016
Assets	$	157,000		$	61,000		$	96,000		$	—
Liabilities	(222,000		)	(163,000		)	(59,000		)	—

8. INVESTMENTS

Condensed, combined unaudited financial information of the Company’s investments in Absolute Energy, Homeland Energy Solutions, Guardian Energy, Lawrenceville Tank and RPMG is as follows (in 000’s):

Balance Sheet	December 31, 2016		September 30, 2016
Current Assets	$	344,097	$	313,541
Other Assets	250,765		246,702
Current Liabilities	248,344		175,588
Long-term Debt	56,715		55,726
Members’ Equity	289,802		328,928
	Three Months Ended December 31,
Income Statement	2016		2015
Revenue	$	196,930	$	184,049
Gross Profit	42,333		21,795
Net Income	38,014		17,520

The Company recorded equity in net income of approximately (in 000's):

	Three Months Ended January 31,
Equity in Net Income	2017		2016
Absolute Energy	$	907	$	550
Guardian Energy	1,066		1,368
Homeland Energy Solutions	1,151		405
Other	76		44
Total	$	3,200	$	2,367

During the three months ended January 31, 2017, Guardian Energy made distributions in excess of the equity balance recorded by the Company. The excess distribution was approximately $1,066,000 and is recorded as part of income for the three months ended January 31, 2017. The following table (in 000's) shows the condensed unaudited financial information of Guardian Energy, which represents greater than 10% of the net income during certain periods presented.

13

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2017

Guardian Energy Condensed Unaudited Financial Information
Balance Sheet	December 31, 2016			September 30, 2016
Current Assets	$	28,159		26,350
Other Assets	40,735			42,264
Current Liabilities	18,941			17,812
Long-term Debt	56,592			55,500
Members’ Equity	(6,639		)	(4,698		)
	Three Months Ended
Income Statement	December 31, 2016			December 31, 2015
Revenue	$	57,942		$	52,137
Gross Profit	14,175			7,290
Net Income	10,059			3,881

The following table (in 000's) shows the condensed unaudited financial information of Homeland Energy Solutions. The Company's equitable portion of assets of Homeland Energy Solutions is greater than 10% of the Company's assets and the income generated represents greater than 10% of the Company's net income for certain periods presented:

Homeland Energy Solutions Condensed Unaudited Financial Information
Balance Sheet	December 31, 2016		September 30, 2016
Current Assets	$	76,835	$	51,430
Other Assets	121,950		85,272
Current Liabilities	47,424		3,932
Long-term Debt	123		0
Members’ Equity	151,238		132,770
	Three Months Ended
Income Statement	December 31, 2016		December 31, 2015
Revenue	76,805		$	68,246
Gross Profit	15,875		59,872
Net Income	14,598		4,961

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This report contains forward-looking statements that involve future events, our future performance and our expected future operations and actions.  In some cases you can identify forward-looking statements by the use of words such as "may," "will," "should," "anticipate," "believe," "expect," "plan," "future," "intend," "could," "estimate," "predict," "hope," "potential," "continue," or the negative of these terms or other similar expressions.  These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties, including, but not limited to those listed below and those business risks and factors described elsewhere in this report and our other Securities and Exchange Commission filings. 

• The impact of the Chinese distiller grains and ethanol tariffs have on ethanol and distiller grains prices in the United States;

• The impact lower gasoline prices have on the market price of ethanol and our ability to profitably operate the ethanol plant;

• Changes in the availability and price of corn and natural gas;

• Any elimination or reduction of the renewable fuels use requirements under the RFS;

• Our ability to transport our finished goods in order to continue to operate our ethanol plant at capacity;

• Our ability to profitably operate the ethanol plant, including the sale of distiller grains and corn oil, and maintain a positive spread between the selling price of our products and our raw material costs;

• The ability of the ethanol industry to generate additional demand through higher level blends of ethanol, including E15 and E85;

• The effect our hedging activities have on our financial performance and cash flows;

• Ethanol, distiller grains and corn oil supply exceeding demand and corresponding price reductions;

• Our ability to generate free cash flow to invest in our business, service our debt and satisfy the financial covenants contained in our credit agreement with our lender;

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

• Changes in plant production capacity or technical difficulties in operating the plant;

• Changes in general economic conditions or the occurrence of certain events causing an economic impact in the agriculture, oil or automobile industries;

• Changes and advances in ethanol production technology;

• Changes in interest rates or the lack of credit availability; and

• Our ability to retain key employees and maintain labor relations.

Our actual results or actions could and likely will differ materially from those anticipated in the forward-looking statements for many reasons, including the reasons described in this report.  We are not under any duty to update the forward-looking statements contained in this report.  We cannot guarantee future results, levels of activity, performance or achievements.  We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report.  You should read this report and the documents that we reference in this report and have filed as exhibits, completely and with the understanding that our actual future results may be materially different from what we currently expect.  We qualify all of our forward-looking statements with these cautionary statements. Unless otherwise stated, references in this report to particular years or quarters refer to our fiscal years ended in October and the associated quarters of those fiscal years.

Overview

Golden Grain Energy, LLC was formed as an Iowa limited liability company on March 18, 2002, for the purpose of constructing, owning and operating a fuel-grade ethanol plant near Mason City in north central Iowa. Since December 2004, we have been engaged in the production of ethanol and distiller grains at the plant and have produced corn oil since February 2009. References to "we," "us," "our" and the "Company" refer to Golden Grain Energy, LLC. We have capacity to produce approximately 115 million gallons of ethanol per year.

Our revenue is derived primarily from the sale and distribution of our ethanol, distiller grains and corn oil. We market our products through Renewable Products Marketing Group, Inc. ("RPMG"), a professional third party marketer. We are an equity owner of RPMG, LLC, the parent company of RPMG, which allows us to realize favorable marketing fees in the sale of our ethanol, distiller grains and corn oil.

On November 21, 2016, our board of directors declared a distribution of $0.75 per membership unit for members of record as of November 21, 2016. The total amount of the distribution was $14,904,750 which was paid in December 2016.

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On November 30, 2015, the EPA released its final RVO for corn-based ethanol for 2014 through 2016. The final RVO reduced the corn-based ethanol use requirements pursuant to the RFS below the statutory requirements. Pursuant to the final RVO release, the RFS requirement for corn-based ethanol was 13.61 billion gallons for 2014, 14.05 billion gallons for 2015 and 14.5 billion gallons for 2016. On May 18, 2016, the EPA released a proposed rule to set the RVO for 2017. The EPA proposed to set the total RVO at 18.8 billion gallons of which 14.8 billion gallons could be met by corn-based ethanol. A public hearing on the proposed rule was held in June and the public comment period expired on July 11, 2016. The final rule was released on November 23, 2016 and the corn-based ethanol RVO was increased to 15 billion gallons, which equals the statutory requirement in the RFS. However, previous reductions in the RVO have negatively impacted the ethanol industry.

In recent years, the United States ethanol industry exported a significant amount of distillers grains to China. During our 2016 fiscal year, the Chinese commenced an anti-dumping and countervailing duty investigation related to distiller grains produced in the United States and exported to China. In January 2017, China implemented final anti-duty and anti-dumping duties. The anti-dumping duties will range from 42.2% to 53.7%, and the final anti-subsidy tariffs will range from 11.2% to 12%. The imposition of these duties are expected to result in a further decline in demand from this top importer requiring United States producers to seek out alternatives markets. In addition, the Chinese recently increased the tariff on imported ethanol from 5% to 30% which management believes could negatively impact ethanol prices in the United States. In recent years, the Chinese have increased the amount of ethanol they import from the United States, however, the tariff increase is likely to reduce demand from the Chinese.

Results of Operations

Comparison of the Three Months Ended January 31, 2017 and 2016

The following table shows the results of our operations and the percentage of revenues, cost of goods sold, operating expenses and other items to total revenues in our statement of operations for the three months ended January 31, 2017 and 2016:

	2017			2016
Income Statement Data	Amount		%	Amount		%
Revenues	$	56,063,549	100.0	$	48,773,123	100.0
Cost of Goods Sold	47,149,952		84.1	46,819,364		96.0
Gross Profit	8,913,597		15.9	1,953,759		4.0
Operating Expenses	952,147		1.7	998,968		2.0
Operating Income	7,961,450		14.2	954,791		2.0
Other Income	2,998,082		5.3	2,462,544		5.0
Net Income	$	10,959,532	19.5	$	3,417,335	7.0

Revenues. Our total revenue was higher for our first quarter of 2017 compared to the same period of 2016 due to the higher average prices we received for our ethanol and corn oil. For our first quarter of 2017, ethanol sales accounted for approximately 84% of our total revenue, distiller grains sales accounted for approximately 12% of our total revenue, and corn oil sales accounted for approximately 4% of our total revenue. For our first quarter of 2016, ethanol sales accounted for approximately 80% of our total revenue, distiller grains sales accounted for approximately 16% of our total revenue, and corn oil sales accounted for approximately 4% of our total revenue.

The average price per gallon we received for our ethanol was approximately 15% higher for our first quarter of 2017 compared to the same period of 2016. Management attributes this increase in the average price we received for our ethanol to higher gasoline and higher export demand which typically impacts ethanol prices. Management anticipates that ethanol prices will likely remain relatively steady during the remaining quarters of our 2017 fiscal year with modest increases during the driving season. Management anticipates that ethanol prices will remain relatively stable during our 2017 fiscal year due to the fact that the RFS ethanol use requirement was set at 15 million gallons for corn-based ethanol for 2017 along with increased export demand for ethanol. However, export demand for ethanol is less consistent compared to domestic demand, so if ethanol exports are lower during 2017 compared to 2016, it could result in lower ethanol prices and could negatively impact our profitability. Further, other ethanol producers are expanding their production capacities to meet the increase in ethanol demand experienced during 2016. If ethanol supply increases at a greater pace compared to ethanol demand, it could negatively impact ethanol prices and could negatively impact our profitability.

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We sold approximately 4% more gallons of ethanol during our first quarter of 2017 compared to the same period of 2016. Management attributes this increase in ethanol sales with timing of ethanol shipments. Our total ethanol production was similar during our first quarter of 2017 as compared to the same period of 2016. Management anticipates that our ethanol sales and production will be slightly greater during the remaining quarters of our 2017 fiscal year compared to our 2016 fiscal year due to plant efficiency improvements implemented during our 2016 fiscal year.

During our first quarter of 2017, we experienced combined realized and unrealized gains on our ethanol derivative instruments of approximately $71,000, which increased our revenue. By comparison, we experienced no gain or loss on our ethanol derivative instruments during our first quarter of 2016.

The average price per ton we received for our dried distillers grains was approximately 8% less for our first quarter of 2017 compared to the same period of 2016. In addition, the average price per ton we received for our modified/wet distillers grains was approximately 41% less for our first quarter of 2017 compared to the same period of 2016. Management attributes these price decreases with lower market corn prices and higher corn supplies after the 2016 harvest. In addition, China started refusing distiller grains from the United States in January 2016 which resulted in lower distiller grains prices and will result in uncertainty regarding future distiller grains demand. This uncertainty may continue to negatively impact market distiller grains prices. Management anticipates that distiller grains will begin to consistently trade at a relative value of less than 100% of corn for the foreseeable future primarily due to China imposing antidumping and countervailing duties against the United States distiller grain markets.

Our dried distiller grains production decreased by approximately 15% during our first quarter of 2017 compared to the same period of 2016. Management attributes this decrease partially to increased modified/wet distiller grain production, in addition to increased corn oil extraction during the period. Management anticipates distiller grains production to be slightly lower for the remaining quarters of our 2017 fiscal year compared to the final quarter of 2016 due to the increase in corn oil extraction and a shift in sales to modified/wet distiller grains.

We sold approximately 12% more pounds of corn oil during our first quarter of 2017 compared to the same period of 2016. This increase in corn oil sales resulted from increased corn oil extraction methods and decreased dried distiller grain production. The average price per pound we received for our corn oil was approximately 25% greater for our first quarter of 2017 compared to the same period of 2016. This increase in corn oil prices occurred despite an increase in corn oil supply. Management believes that an increase in total corn oil demand from increased biodiesel production offset the increase in the market corn oil supply. Biodiesel production was spurred by the renewal of the biodiesel blenders' tax credit for 2016 (and retroactively for 2015) which management believes positively impacts corn oil demand. Management anticipates relatively stable corn oil prices going forward, despite anticipated increases in corn oil supplies, unless corn oil demand increases significantly for biodiesel production. However, the biodiesel tax credit expired at the end of 2016 which could negatively impact corn oil demand and ultimately market corn oil prices.

Cost of Goods Sold. Our cost of goods sold was higher for our first quarter of 2017 compared to the same period of 2016 due primarily to increased natural gas costs.  Our average cost per bushel of corn, before our derivative instrument gain, was approximately 6% lower during our first quarter of 2017 compared to the same period of 2016.  Management anticipates corn prices to remain low due to an improved balance between corn supply and demand as a result of the larger corn crops harvested in recent years along with relatively stable corn demand, however, we may still experience some short term corn price volatility. 

We consumed similar amounts of corn during our first quarter of 2017 compared to the same period of 2016 due to similar ethanol production. Management anticipates consistent corn consumption during the rest of our 2017 fiscal year, provided we continue to experience profitable operating margins which allow us to operate the ethanol plant at capacity.

Our natural gas costs increased by approximately 30% during our first quarter of 2017 compared to the same period of 2016. Our usage was the similar, but the average price we paid per MMBtu of natural gas was approximately 30% higher during our first quarter of 2017 compared to the same period of 2016. Management attributes this increase in natural gas prices with higher commodity and energy prices during the 2017 period as well as growing demand for natural gas. Management anticipates that natural gas prices will remain relatively stable for the remaining quarters of our 2017 fiscal year. Our natural gas consumption during our first quarter of 2017 was similar compared to the same period of 2016.

We experienced combined realized and unrealized gains of approximately $53,000 for our first quarter of 2017 related to our corn and natural gas derivative instruments which decreased our cost of goods sold. By comparison, we experienced approximately $599,000 of combined realized and unrealized gains for the same period of 2016 related to our corn and natural gas derivative instruments which decreased our cost of goods sold. We recognize the gains or losses that result from the changes

17

in the value of our derivative instruments from corn and natural gas in cost of goods sold as the changes occur.  As corn and natural gas prices fluctuate, the value of our derivative instruments is impacted, which affects our financial performance.

Operating Expenses. Our operating expenses were lower during our first quarter of 2017 compared to the same period of 2016 primary due to less dues and subscription expense for the 2017 quarter due to timing of when we make payments to trade organizations. This was partially offset by an increase in personnel expense during our first quarter of 2017 compared to the same period of 2016 due to an increase in the accrual for employee bonuses. Management anticipates that our operating expenses will be comparable during the remaining quarters of our 2017 fiscal year compared to our 2016 fiscal year as we balance out payments for the dues and subscriptions that we pay to trade organizations offset by potential increases in employee bonus accruals that are tied to net income.

Other Income (Expense). Other income was higher for our first quarter of 2017 compared to the same period of 2016, due primarily to equity income from investments. Our investments are in other companies involved in the ethanol industry which in general experienced favorable operating margins during our first quarter of 2017. However, one of our investments made distributions in excess of the equity balance recorded by the Company totaling approximately $1,066,000 and therefore that entire amount is recorded as income for the quarter. We had more interest income and less interest expense during our first quarter of 2017 compared to the same period of 2016 due to less available borrowing on our revolving loan, for which we pay an unused balance fee. We also had more other income during our first quarter of 2017 compared to the same period of 2016 due to an increase in income from marketable securities and investments not recorded on the equity method of accounting.

Changes in Financial Condition for the Three Months Ended January 31, 2017

Current Assets. We had less cash and equivalents at January 31, 2017 compared to October 31, 2016. This decrease in our cash position is due primarily to nearly $15 million in distributions we paid to our members during December 2016, offset by cash generated from operations. The decrease in marketable securities is from certificates of deposit that matured during our first quarter of 2017. The increase in our other receivable at January 31, 2017 compared to October 31, 2016 was due to a distribution receivable from one of our investments. The value of our accounts receivable and inventory were slightly higher at January 31, 2017 compared to October 31, 2016 due to higher ethanol prices.

Property and Equipment. The net value of our property and equipment was lower at January 31, 2017 compared to October 31, 2016 due to depreciation, offset by ongoing capital projects. We had approximately $6.6 million in construction in progress at January 31, 2017 related to various capital projects we were conducting during our 2016 and 2017 fiscal years, the largest of which is improvements to our plant associated with a cooling tower construction and a co-generation integration.

Other Assets. Our other assets were lower at January 31, 2017 compared to October 31, 2016 due to a decrease in the value of our various investments caused by distributions declared in excess of earnings recorded for the three months ended January 31, 2017.

Current Liabilities. Our accounts payable at January 31, 2017 were comparable to October 31, 2016. Our accrued expenses were lower at January 31, 2017 compared to October 31, 2016 due to payment of employee bonus accruals during our first fiscal quarter of 2017.

Long-term Liabilities. Our long-term liabilities were similar at January 31, 2017 and October 31, 2016.

Liquidity and Capital Resources

Based on financial forecasts performed by our management, we anticipate that we will have sufficient cash from our current credit facilities and cash generated from our operations to continue to operate the ethanol plant at capacity for the next 12 months and beyond. As of January 31, 2017, we had $10 million available pursuant to our revolving term loan and approximately $26 million in cash and equivalents and marketable securities.

We do not currently anticipate any significant purchases of property and equipment that would require us to secure additional capital in the next 12 months. We expect to fund our current capital projects using cash we have on hand as well as our revolving line of credit. However, management continues to evaluate conditions in the ethanol industry and explore opportunities to improve the efficiency and profitability of our operations which may require capital expenditures.

We have a program of investing our excess cash in short-term liquid investments which allows us to access the cash when we need it and preserve our capital while limiting our loss exposure. Only a portion of our cash balances are federally insured

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when they are deposited with our bank. As a result, our plan is intended to decrease the risk we face when we were concentrating our cash balances with one financial institution.

The following table shows our cash flows for the three months ended January 31, 2017 and 2016:

	Three Months Ended January 31,
	2017			2016
Net cash provided by operating activities	$	10,779,913		$	3,606,895
Net cash provided by (used in) investing activities	348,396			(3,151,193		)
Net cash (used in) financing activities	(14,874,082		)	(13,911,100		)

Cash Flow From Operations

Our cash flows from operations for the three months ended January 31, 2017 were higher compared to the same period of 2016 due primarily to increased net income in addition to a decrease in working capital associated with account receivable, inventory, prepaid expenses and earnings in excess of distributions received.

Cash Flow From Investing Activities

We used less cash for investing activities during our three months ended January 31, 2017 compared to the same period of 2016. During the 2017 period, we had fewer capital expenditures compared to the 2016 period due to fewer plant improvement projects. In addition, during our three months ended January 31, 2017 we received insurance proceeds from an involuntary asset conversion and we recognized more net proceeds from maturing certificates of deposit during our three months ended January 31, 2017 compared to the same period of 2016.

Cash Flow From Financing Activities.

During our three months ended January 31, 2017, we used more cash for financing activities related to higher distributions paid to members as compared to the same period of 2016.

Short-Term and Long-Term Debt Sources

We have a credit facility with Farm Credit with an initial availability of $35 million, which currently has availability of $10 million. In exchange for this credit facility, we executed a mortgage in favor of Farm Credit covering all of our real property and granted Farm Credit a security interest in all of our equipment and other assets. In the event we default on our loans with Farm Credit, Farm Credit may foreclose on our assets, including both our real property and our machinery and equipment.

Variable Line of Credit

We have a long-term line of credit. Interest on this loan accrues at 3.15% above the One-Month London Interbank Offered Rate (LIBOR). The interest rate is subject to weekly adjustment. We may elect to enter into a fixed interest rate on this loan at various times throughout the term of the loan as provided in the loan agreements. During the first fiscal quarter of 2016, we executed an amendment to our credit agreements with Farm Credit which adjusted our loan covenants related to issuing distributions to our members and changed the terms of our revolving line of credit. We have $10 million available pursuant to this long-term revolving line of credit until it matures on February 1, 2020. We agreed to pay an annual fee of 0.5% of the unused portion of this loan. As of January 31, 2017, we had $0 outstanding on this loan with an accrued interest rate of 3.93% per year. As of January 31, 2017, we had $10 million available to be drawn on this loan.

Administrative Agency Agreement

As part of the Farm Credit loan closing, we entered into an Administrative Agency Agreement with CoBank, ACP ("CoBank"). CoBank purchased a participation interest in the Farm Credit loans and was appointed the administrative agent for the purpose of servicing the loans. As a result, CoBank will act as the agent for Farm Credit with respect to our loans. We agreed to pay CoBank an annual fee of $5,000 as the agent for Farm Credit.

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Covenants

Our credit agreements with Farm Credit are subject to numerous covenants requiring us to maintain various financial ratios. As of January 31, 2017, we were in compliance with all of our loan covenants with Farm Credit. Based on current management projections, we anticipate that we will be in compliance with our loan covenants for the next 12 months and beyond.

Grants and Government Programs

In December 2006, we received the first payment from our semi-annual economic development grants equal to the amount of the tax assessments imposed on our ethanol plant by Cerro Gordo County, the county in which our ethanol plant is located. Based on our 2009 assessment, the total amount of these grants is expected to be approximately $9 million, which will be paid semi-annually over a 10-year period with the final payment being made in 2019.

Critical Accounting Policies

Management uses estimates and assumptions in preparing our financial statements in accordance with U.S. generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Of the significant accounting policies described in the notes to our financial statements, we believe that the following are the most critical:

Revenue Recognition

Revenue from the sale of our products is recognized at the time title to the goods and all risks of ownership transfer to the customers.  The time of transfer is defined in the specific sales agreement; however, it generally occurs upon shipment, loading of the goods or when the customer picks up the goods. Collectability of revenue is reasonably assured based on historical evidence of collectability between us and our customers. Interest income is recognized as earned.

Shipping costs incurred by us in the sale of ethanol and corn oil are not specifically identifiable and as a result, revenue from the sale of ethanol and corn oil are recorded based on the net selling price reported to us from our marketer. Shipping costs incurred by us in the sale of distiller grain products are included in cost of goods sold.

Investment in Commodities Contracts, Derivative Instruments and Hedging Activities

We evaluate contracts to determine whether the contracts are derivative instruments. Certain contracts that meet the definition of a derivative may be exempted from derivative accounting and treated as normal purchases or normal sales if documented as such. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business.

We enter into short-term cash, option and futures contracts as a means of securing corn and natural gas for the ethanol plant and managing exposure to changes in commodity and energy prices. We occasionally also enter into derivative contracts to hedge our exposure to price risk as it relates to ethanol sales. As part of our risk management process, we use futures and option contracts through regulated commodity exchanges or through the over-the-counter market to manage our risk related to pricing of inventories. All of our derivatives, other than those excluded under the normal purchases and sales exclusion, are designated as non-hedge derivatives, with changes in fair value recognized in net income. Although the contracts are economic hedges of specified risks, they are not designated or accounted for as hedging instruments.

Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas are included as a component of cost of goods sold and derivative contracts related to ethanol are included as a component of revenues in the accompanying financial statements. The fair values of contracts are presented on the accompanying balance sheet as derivative instruments.

Investments

The Company has less than a 20% investment interest in five companies in related industries. These investments are being accounted for by the equity method of accounting under which the Company's share of net income is recognized as income in the Company's income statement and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account. The investments are evaluated for indications of impairment on a regular basis. A loss would be recognized when the fair value is determined to be less than the carrying value.

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Off-Balance Sheet Arrangements.

We currently have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to the impact of market fluctuations associated with commodity prices as discussed below. We have no exposure to interest rate changes as we did not have any amounts outstanding on our variable interest rate loans as of January 31, 2017. We have no exposure to foreign currency risk as all of our business is conducted in U.S. Dollars. We use derivative financial instruments as part of an overall strategy to manage market risk. We use cash, futures and option contracts to hedge changes to the commodity prices of corn, natural gas and ethanol. We do not enter into these derivative financial instruments for trading or speculative purposes, nor do we designate these contracts as hedges for accounting purposes.

Commodity Price Risk

We seek to minimize the risks from fluctuations in the prices of raw material inputs, such as corn and natural gas, and finished products, such as ethanol and distiller grains, through the use of hedging instruments. In practice, as markets move, we actively manage our risk and adjust hedging strategies as appropriate. Although we believe our hedge positions accomplish an economic hedge against our future purchases and sales, management has chosen not to use hedge accounting, which would match the gain or loss on our hedge positions to the specific commodity purchase being hedged. We are using fair value accounting for our hedge positions, which means as the current market price of our hedge positions changes, the realized or unrealized gains and losses are immediately recognized in our cost of goods sold or as an offset to revenues. The immediate recognition of hedging gains and losses under fair value accounting can cause net income to be volatile from quarter to quarter due to the timing of the change in value of the derivative instruments relative to the cost and use of the commodity being hedged.

As of January 31, 2017, we had price protection in place for approximately 21% of our anticipated corn needs, 9% of our natural gas needs and 2% of our ethanol sales for the next 12 months.

A sensitivity analysis has been prepared to estimate our exposure to ethanol, corn and natural gas price risk. Market risk related to these factors is estimated as the potential change in income resulting from a hypothetical 10% adverse change in the average cost of our corn and natural gas prices and average ethanol price as of January 31, 2017, net of the forward and future contracts used to hedge our market risk for corn and natural gas usage requirements. The volumes are based on our expected use and sale of these commodities for a one year period from January 31, 2017. The results of this analysis, which may differ from actual results, are as follows:

	Estimated Volume Requirements for the next 12 months (net of forward and futures contracts)	Unit of Measure	Hypothetical Adverse Change in Price	Approximate Adverse Change to Income
Natural Gas	2,730,000	MMBTU	10%	$	906,000
Ethanol	112,312,000	Gallons	10%	16,454,000
Corn	30,738,000	Bushels	10%	10,325,000

Liability Risk

We participate, along with other plants in the industry, in a group captive insurance company (Captive). The Captive insures losses related to workman's compensation, commercial property and general liability. The Captive reinsures catastrophic losses for all participants, including the Company, in excess of predetermined amounts. Our premiums are accrued by a charge to income for the period to which the premium relates and is remitted by our insurer to the captive reinsurer. These premiums are structured such that we have made a prepaid collateral deposit estimated for losses related to the above coverage. The Captive insurer has estimated and collected an amount in excess of the estimated losses but less than the catastrophic loss limit insured by the Captive. We cannot be assessed over the amount in the collateral fund.

Item 4.  Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and

21

that such information is accumulated and communicated to our management, including our Executive Vice President and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures.

Our management, including our Executive Vice President (the principal executive officer), Curtis Strong, along with our Chief Financial Officer (the principal financial officer), Christine Marchand, have reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of January 31, 2017.  Based on this review and evaluation, these officers have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods required by the forms and rules of the Securities and Exchange Commission; and to ensure that the information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

For the fiscal quarter ended January 31, 2017, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

The following risk factor is provided due to material changes from the risk factors previously disclosed in our annual report on Form 10-K. The risk factor set forth below should be read in conjunction with the risk factors section and the Management's Discussion and Analysis section for the fiscal year ended October 31, 2016, included in our annual report on Form 10-K.

Distiller grains demand and prices may be negatively impacted by the Chinese anti-dumping and anti-subsidy duties. China was historically the world's largest importer of distiller grains produced in the United States. On January 12, 2016, the Chinese government announced that it would commence an anti-dumping and countervailing duty investigation related to distiller grains imported from the United States. In January 2017, the Chinese finalized the anti-dumping and anti-subsidy duties. The anti-dumping duties will range from 42.2% to 53.7%. The final anti-subsidy tariffs will range from 11.2% to 12%. Both during the investigation and after the announcement of the duties, distiller grains demand and prices have been negatively impacted. While we expect China to continue to import some distiller grains, we do not anticipate that the imports will be at the same level as previous years which could continue to negatively impact market distiller grains demand and prices. This potential reduction in demand along with lower domestic corn prices could negatively impact our ability to profitably operate the ethanol plant.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4.Mine Safety Disclosures.

None.

Item 5.Other Information

None.

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Item 6. Exhibits.

(a) The following exhibits are filed as part of this report.

Exhibit No.	Exhibit
31.1	Certificate Pursuant to 17 CFR 240.13a-14(a)*
31.2	Certificate Pursuant to 17 CFR 240.13a-14(a)*
32.1	Certificate Pursuant to 18 U.S.C. Section 1350*
32.2	Certificate Pursuant to 18 U.S.C. Section 1350*
101	The following financial information from Golden Grain Energy, LLC's Quarterly Report on Form 10-Q for the quarter ended January 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Balance Sheets as of January 31, 2017 and October 31, 2016, (ii) Statements of Operations for the three months ended January 31, 2017 and 2016, (iii) Statements of Cash Flows for the three months ended January 31, 2017 and 2016, and (iv) the Notes to Condensed Financial Statements.**

*    Filed herewith.

**    Furnished herewith.

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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.

		GOLDEN GRAIN ENERGY, LLC
Date:	March 15, 2017	/s/ Curtis Strong
		Curtis Strong
		Executive Vice-President
		(Principal Executive Officer)
Date:	March 15, 2017	/s/ Christine Marchand
		Christine Marchand
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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EX-31.1

CERTIFICATIONS

I, Curtis Strong, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Golden Grain Energy, LLC;

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(s) 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 Exchange Act Rules 13a-15(f) and 15d-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; and

5. The registrant's other certifying officer(s) 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 information; 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 15, 2017	/s/ Curtis Strong
		Curtis Strong, Executive Vice President (Principal Executive Officer)

EX-31.2

CERTIFICATIONS

I, Christine Marchand, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Golden Grain Energy, LLC;

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(s) 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 Exchange Act Rules 13a-15(f) and 15d-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; and

5. The registrant's other certifying officer(s) 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 information; 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 15, 2017	/s/ Christine Marchand
		Christine Marchand, Chief Financial Officer (Principal Financial Officer)

EX-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 quarterly report on Form 10-Q of Golden Grain Energy, LLC (the “Company”) for the fiscal quarter ended January 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Curtis Strong, Executive Vice President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Curtis Strong
	Curtis Strong
	Executive Vice President
Dated:	March 15, 2017

EX-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 quarterly report on Form 10-Q of Golden Grain Energy, LLC (the “Company”) for the fiscal quarter ended January 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Christine Marchand, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Christine Marchand
	Christine Marchand
	Chief Financial Officer
Dated:	March 15, 2017

XML

Document and Entity Information Document - shares	3 Months Ended
	Jan. 31, 2017	Mar. 15, 2017
Entity Information [Line Items]
Entity Registrant Name	GOLDEN GRAIN ENERGY, LLC
Entity Central Index Key	0001206942
Current Fiscal Year End Date	--10-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Jan. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		19,873,000

XML

Balance Sheet - USD ($)	Jan. 31, 2017	Oct. 31, 2016
Current Assets
Cash and equivalents	$ 12,786,417	$ 16,532,190
Marketable securities	13,331,467	15,785,542
Accounts receivable	6,773,028	6,202,104
Other receivables	2,779,837	568,940
Derivative instruments	580,013	514,878
Inventory	7,125,056	6,905,684
Prepaid expenses and other	2,133,106	1,589,075
Total current assets	45,508,924	48,098,413
Property and Equipment
Land and land improvements	12,962,015	12,961,713
Building and grounds	28,305,386	28,305,386
Grain handling equipment	15,833,823	15,833,823
Office equipment	220,527	220,527
Plant and process equipment	95,638,555	95,681,018
Construction in progress	6,598,467	4,580,801
Gross property and equipment	159,558,773	157,583,268
Less accumulated depreciation	93,219,623	90,896,301
Net property and equipment	66,339,150	66,686,967
Other Assets
Investments	23,437,726	24,474,860
Other assets	1,471,691	1,503,666
Total other assets	24,909,417	25,978,526
Total Assets	136,757,491	140,763,906
Current Liabilities
Accounts payable	7,798,070	7,660,157
Accrued expenses	1,244,730	1,413,127
Other current liabilities	144,691	163,884
Total current liabilities	9,187,491	9,237,168
Long-term Liabilities
Deferred compensation	365,881	355,623
Deferred revenue, net of current portion	71,665	93,443
Total long-term liabilities	437,546	449,066
Commitments and Contingencies
Members' Equity (19,873,000 units issued and outstanding)	127,132,454	131,077,672
Total Liabilities and Members’ Equity	$ 136,757,491	$ 140,763,906

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Balance Sheet Parenthetical - shares	Jan. 31, 2017	Oct. 31, 2016
Members' Equity, units issued and outstanding	19,873,000	19,873,000

XML

Statement of Operations - USD ($)	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Revenues	$ 56,063,549	$ 48,773,123
Cost of Goods Sold	47,149,952	46,819,364
Gross Profit	8,913,597	1,953,759
Operating Expenses	952,147	998,968
Operating Income	7,961,450	954,791
Other Income (Expense)
Other income (expense)	(204,075)	99,204
Interest income (expense)	2,806	(3,728)
Equity in net income of investments	3,199,351	2,367,068
Total other income (expense)	2,998,082	2,462,544
Net Income	$ 10,959,532	$ 3,417,335
Basic & diluted net income per unit	$ 0.55	$ 0.17
Weighted average units outstanding for the calculation of basic & diluted net income per unit	19,873,000	19,873,000
Distribution Per Unit	$ 0.75	$ 0.70

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Statement of Cash Flows - USD ($)	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Cash Flows from Operating Activities
Net Income	$ 10,959,532	$ 3,417,335
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,341,129	2,077,355
Unrealized loss on risk management & marketable securities	138,940	327,283
Amortization of deferred revenue	(40,971)	(27,598)
Change in accretion of interest on grant & note receivable	(16,501)	(16,441)
Distributions (earnings) in excess of (distributions) earnings from investments	(1,006,866)	1,298,325
Gain on insurance proceeds from involuntary conversion	(489,852)	0
Deferred compensation expense	10,258	5,200
Change in assets and liabilities
Accounts receivable	(570,924)	(1,129,635)
Inventory	(219,372)	(1,192,994)
Prepaid expenses and other	(710,927)	(355,704)
Accounts payable	553,864	(318,431)
Accrued expenses	(168,397)	(477,800)
Net cash provided by operating activities	10,779,913	3,606,895
Cash Flows from Investing Activities
Capital expenditures	(2,550,356)	(3,151,193)
Insurance proceeds from involuntary conversion	648,752	0
Purchase of marketable securities	0	(5,000,000)
Proceeds from sale of marketable securities	2,250,000	5,000,000
Net cash provided by (used in) investing activities	348,396	(3,151,193)
Cash Flows from Financing Activities
Refund on utility right costs	30,668	0
Distributions to members	(14,904,750)	(13,911,100)
Net cash (used in) provided by financing activities	(14,874,082)	(13,911,100)
Net (Decrease) in Cash and Equivalents	(3,745,773)	(13,455,398)
Cash and Equivalents – Beginning of Period	16,532,190	21,084,029
Cash and Equivalents – End of Period	12,786,417	7,628,631
Supplemental Cash Flow Information
Cash paid for interest	12,802	16,648
Supplemental Disclosure of Noncash Operating, Investing & Financing Activities
Accounts payable related to construction in process	136,740	536,449
Distributions declared and unpaid by equity method investee	$ 2,044,000	$ 1,509,600

XML

Summary of Significant Accounting Policies

3 Months Ended

Jan. 31, 2017

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and notes disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company's audited financial statements for the year ended October 31, 2016, contained in the Company's annual report on Form 10-K for 2016.

In the opinion of management, the interim condensed financial statements reflect all adjustments considered necessary for fair presentation. The adjustments made to these statements consist only of normal recurring adjustments.

Nature of Business

Golden Grain Energy, LLC ("Golden Grain Energy" and "the Company") is an approximately 115 million gallon annual production ethanol plant near Mason City, Iowa. The Company sells its production of ethanol, distiller grains with solubles and corn oil primarily in the continental United States. The Company also holds several investments in various companies that focus on ethanol production, marketing and/or logistics.

Organization

Golden Grain Energy is organized as an Iowa limited liability company.  The members' liability is limited as specified in Golden Grain Energy's operating agreement and pursuant to the Iowa Revised Uniform Limited Liability Company Act. 

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles.  Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

Cash and Equivalents

The Company's cash balances are maintained in bank depositories and regularly exceed federally insured limits. The Company has not experienced any losses in connection with these balances. Also included in cash and equivalents are highly liquid investments, that are readily convertible into known amounts of cash, which are subject to an insignificant risk of change in value due to interest rate, quoted price or penalty on withdrawal and have a maturity of three months or less.

Marketable Securities

The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are recorded as either short term or long term on the Balance Sheet, based on contractual maturity date and are stated at amortized cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings.

Marketable securities consist of certificates of deposits with original maturities of greater than three months and mutual funds. Certificates of deposit are considered held to maturity securities, which are measured at cost. Mutual funds are considered trading securities which are measured at fair value using prices obtained from pricing services. Any unrealized or realized gains and losses on the trading securities are recorded as part of other income.

At January 31, 2017, marketable securities consisted of mutual funds invested in intermediate-term municipal and government bonds with an approximate cost and fair market value of $13,109,000 and $12,831,000, respectively, and certificates of deposit all with maturities of less than one year and approximate value of $500,000. At October 31, 2016, marketable securities consisted of mutual funds invested in intermediate-term municipal and government bonds with an approximate cost and fair market value of $12,967,000 and $13,036,000, respectively, and certificates of deposit all with maturities of less than one year and an approximate value of $2,750,000. For the periods ended January 31, 2017 and 2016, there was no other-than-temporary impairment recognized. For the three months ended January 31, 2017 and 2016, the Company recorded interest, dividends and net realized and unrealized gains (losses) of approximately $(204,000) and $99,000, respectively, from these investments as part of other income.

Accounts Receivables

Credit sales are made primarily to one customer and no collateral is required. The Company carries these accounts receivable at original invoice amount with no allowance for doubtful accounts due to the historical collection rates on these accounts.

Investments

The Company has less than a 20% investment interest in five companies in related industries. These investments are being accounted for by the equity method of accounting under which the Company's share of net income is recognized as income in the Company's statement of operations and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account. Distributions or dividends received in excess of the carrying value are recognized as income in the statement of operations. The investments are evaluated for indications of impairment on a regular basis. A loss would be recognized when the fair value is determined to be less than the carrying value.

The fiscal years of Renewable Products Marketing Group, LLC (RPMG) and Guardian Energy Janesville, LLC end on September 30 and the fiscal years of Absolute Energy, LLC, Homeland Energy Solutions, LLC and Lawrenceville Tank, LLC, end on December 31. The Company consistently follows the practice of recognizing the net income based on the most recent reliable data. Therefore, the net income which is reported in the Company's statement of operations for the period ended January 31, 2017, for all companies, is based on the investee's results for the three months ended December 31, 2016.

Note Receivable

The Company has a note receivable from an unrelated party. The Company carries the note at original face value plus accrued interest which is equal to 6% as of January 31, 2017 and is compounded monthly. The note commenced in December 2014 with a face value of $510,000 and has a maturity of 5 years. Annual payments are to begin in September 2018. Balance of the note receivable, including accrued interest, as of January 31, 2017 and October 31, 2016 was approximately $577,000 and $566,000, respectively.

Revenue and Cost Recognition

Revenue from the sale of the Company's products is recognized at the time title to the goods and all risks of ownership transfer to the customers.  This generally occurs upon shipment, loading of the goods or when the customer picks up the goods. Collectability of revenue is reasonably assured based on historical evidence of collectability between the Company and its customers. Interest income is recognized as earned.

Shipping costs incurred by the Company in the sale of ethanol, distiller grains and corn oil are not specifically identifiable and as a result, revenue from the sale of ethanol, distiller grains and corn oil are recorded based on the net selling price reported to the Company from its marketer. Railcar lease costs incurred by the Company in the sale and shipment of distiller grain products are included in cost of goods sold.

Inventory

Inventories are generally valued at the lower of weighted average cost or net realizable value.  In the valuation of inventories and purchase commitments, net realizable value is defined as estimated selling price in the ordinary course of business less reasonable predictable costs of completion, disposal and transportation.

Property & Equipment

Property and equipment are stated at historical cost. Significant additions and betterments are capitalized, while expenditures for maintenance and repairs are charged to operations when incurred. The Company uses the straight-line method of computing depreciation over the estimated useful lives between 3 and 40 years.

The Company reviews its property and equipment for impairment whenever events indicate that the carrying amount of the asset group may not be recoverable. If circumstances require a long-lived asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset group to the carrying value of the asset group. If the carrying value of the asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Investment in commodities contracts, derivative instruments and hedging activities

The Company evaluates its contracts to determine whether the contracts are derivative instruments. Certain contracts that meet the definition of a derivative may be exempted from derivative accounting and treated as normal purchases or normal sales if documented as such. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business.

The Company enters into short-term cash, option and futures contracts as a means of securing corn and natural gas for the ethanol plant and managing exposure to changes in commodity and energy prices. The Company occasionally also enters into derivative contracts to hedge its exposure to price risk as it relates to ethanol sales. As part of its risk management process, the Company uses futures and option contracts through regulated commodity exchanges or through the over-the-counter market to manage its risk related to pricing of inventories. All of the Company's derivatives, other than those excluded under the normal purchases and sales exclusion, are designated as non-hedge derivatives, with changes in fair value recognized in net income. Although the contracts are economic hedges of specified risks, they are not designated or accounted for as hedging instruments.

Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas are included as a component of cost of goods sold and derivative contracts related to ethanol are included as a component of revenues in the accompanying financial statements. The fair values of contracts are presented on the accompanying balance sheet as derivative instruments net of cash due from/to broker.

Net income per unit

Basic and diluted earnings per unit are computed using the weighted-average number of Class A and B units outstanding during the period.

Fair Value

Financial instruments include cash and equivalents, marketable securities, receivables, accounts payable, accrued expenses and derivative instruments. The fair value of marketable securities and derivative financial instruments is based on quoted market prices, as disclosed in Note 7. The fair value, determined using level 3 inputs, of all other current financial instruments is estimated to approximate carrying value due to the short-term nature of these instruments.

Risks and Uncertainties

The Company has certain risks and uncertainties that it will experience during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distiller grains to customers primarily located in the United States. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. For the three months ended January 31, 2017, ethanol sales accounted for approximately 84% of total revenue, distiller grains sales accounted for approximately 12% of total revenue and corn oil sales accounted for approximately 4% of total revenue while corn costs averaged approximately 77% of cost of goods sold.

The Company's operating and financial performance is largely driven by the prices at which ethanol is sold and the net expense of corn. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and unleaded gasoline and the petroleum markets with ethanol selling, in general, for less than gasoline at the wholesale level. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The Company's largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, weather, government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities.

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Inventory

3 Months Ended

Jan. 31, 2017

Inventory [Abstract]

Inventory

INVENTORY

Inventory consisted of the following as of January 31, 2017 and October 31, 2016:

	January 31, 2017		October 31, 2016
Raw Materials	$	4,052,774	$	3,808,935
Work in Process	1,205,615		1,170,767
Finished Goods	1,866,667		1,925,982
Totals	$	7,125,056	$	6,905,684

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Bank Financing

3 Months Ended

Jan. 31, 2017

Bank Financing [Abstract]

Bank Financing

BANK FINANCING

The Company has entered into a master loan agreement with Farm Credit Services of America (FLCA) which includes revolving loans with original maximum borrowings of $35 million, which currently has availability of $10 million and matures on February 1, 2020. Interest on the term loan is payable monthly at 3.15% above the one-month LIBOR (3.93% as of January 31, 2017). The borrowings are secured by substantially all the assets of the Company. The credit agreements are subject to covenants, requiring the Company to maintain various financial ratios, as well as certain distribution limitations. As of January 31, 2017, the Company was in compliance with all of the loan covenants. Failure to comply with the protective loan covenants or maintain the required financial ratios may cause acceleration of any outstanding principal balances on the loans and/or imposition of fees and penalties. As of January 31, 2017 and October 31, 2016, the Company had no borrowings outstanding.

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Related Party Transactions

3 Months Ended

Jan. 31, 2017

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

RELATED PARTY TRANSACTIONS

The Company purchased corn and materials from members of its Board of Directors or Risk Management Committee that own or manage elevators. The Company also purchased ingredients from RPMG. Purchases from the related parties during the three months ended January 31, 2017 totaled approximately $10,379,000. Purchases during the three months ended January 31, 2016 totaled approximately $24,260,000. As of January 31, 2017 and October 31, 2016, the amount owed to related parties was approximately $547,000 and $518,000, respectively (See Note 5).

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Commitments, Contingencies and Agreements

3 Months Ended

Jan. 31, 2017

Commitments, Contingencies and Agreements [Abstract]

Commitments, Contingencies and Agreements

COMMITMENTS, CONTINGENCIES AND AGREEMENTS

Ethanol, Distiller Grains and Corn Oil marketing agreements and major customers

The Company has entered into marketing agreements with a marketing company, in which the Company has an investment, for the exclusive rights to market, sell and distribute the entire ethanol, distiller grains and corn oil inventory produced by the Company. The marketing fees are presented net in revenues.

Approximate sales and marketing fees related to the agreements in place are as follows:

	Three Months Ended January 31,
	2017		2016
Sales ethanol, distiller grains & corn oil	$	56,097,000	$	48,873,000
Marketing fees	110,000		100,000
As of	January 31, 2017		October 31, 2016
Amount due from RPMG	$	6,773,000	$	6,202,000

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Risk Management

3 Months Ended

Jan. 31, 2017

Risk Management [Abstract]

Risk Management

RISK MANAGEMENT

The Company's activities expose it to a variety of market risks, including the effects of changes in commodity prices. These financial exposures are monitored and managed by the Company as an integral part of its overall risk-management program. The Company's risk management program focuses on the unpredictability of financial and commodities markets and seeks to reduce the potentially adverse effects that the volatility of these markets may have on its operating results.

To reduce price risk caused by market fluctuations, the Company generally follows a policy of using exchange traded futures contracts to reduce its net position of merchandisable agricultural commodity inventories and forward cash purchase and sales contracts and uses exchange traded futures contracts to reduce price risk. Exchange-traded futures contracts are valued at market price. Changes in market price of contracts related to corn and natural gas are recorded in cost of goods sold and changes in market prices of contracts related to sale of ethanol are recorded in revenues.

The following table represents the approximate amount of realized and unrealized gains (losses) and changes in fair value recognized in earnings on commodity contracts for periods ended January 31, 2017 and 2016 and the fair value of derivatives as of January 31, 2017 and October 31, 2016:

	Income Statement Classification	Realized Gain (Loss)		Change in Unrealized Gain (Loss)			Total Gain (Loss)
Derivatives not designated as hedging instruments:
Commodity Contracts for the	Revenue	$	9,000	$	62,000		$	71,000
three months ended January 31, 2017	Cost of Goods Sold	154,000		(101,000		)	53,000
	Total	$	163,000	$	(39,000	)	$	124,000
Commodity Contracts for the	Revenue	$	—	$	—		$	—
three months ended January 31, 2016	Cost of Goods Sold	382,000		217,000			599,000
	Total	$	382,000	$	217,000		$	599,000

	Balance Sheet Classification	January 31, 2017			October 31, 2016
Futures and option contracts through July 2018
In gain position		$	94,000		$	157,000
In loss position		(198,000		)	(222,000		)
Cash held by broker		684,000			580,000
	Current Asset	$	580,000		$	515,000

As of January 31, 2017, the Company had the following approximate outstanding purchase and sale commitments, of which approximately $6,486,000 of the purchase commitments were with related parties.

	Commitments Through	Amount
Sale commitments
Corn Oil - fixed price	February 2017	$	692,000
Distiller Grains - fixed price	March 2017	2,121,000
Purchase commitments
Corn - fixed price	December 2017	$	9,425,000
Corn - basis contract	July 2018	37,528,000

As of January 31, 2017, the Company has fixed price futures and forward contracts in place for approximately 21% of our anticipated corn needs, 9% of our natural gas needs and 2% of our ethanol sales for the next 12 months with limited open positions beyond that period.

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Fair Value Measurements

3 Months Ended

Jan. 31, 2017

Fair Value Measurements [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities.

Level 3: Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

A description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy, is set forth below.

Marketable Securities: The Company's investments in short-term liquid investments (e.g. mutual funds), are classified within Level 1, carried at fair value based on the quoted market prices.

Derivative financial instruments: Commodity futures and exchange-traded commodity options contracts are reported at fair value utilizing Level 1 inputs. For these contracts, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes and live trading levels from markets such as the CME and NYMEX.  Crush swaps are bundled contracts or combined contracts that include a portion of corn, ethanol and natural gas rolled into a single trading instrument. These contracts are reported at fair value utilizing Level 2 inputs and are based on the various trading activity of the components of each segment of the bundled contract.

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

	Total			Level 1			Level 2			Level 3
Marketable securities:
Assets, January 31, 2017	$	580,000		$	580,000		$	—		$	—
Assets, October 31, 2016	13,036,000			13,036,000			—			—
Derivative financial instruments:
January 31, 2017
Assets	$	94,000		$	32,000		$	62,000		$	—
Liabilities	(198,000		)	(143,000		)	(55,000		)	—
October 31, 2016
Assets	$	157,000		$	61,000		$	96,000		$	—
Liabilities	(222,000		)	(163,000		)	(59,000		)	—

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Investments

3 Months Ended

Jan. 31, 2017

Investments [Abstract]

Investments

INVESTMENTS

Condensed, combined unaudited financial information of the Company’s investments in Absolute Energy, Homeland Energy Solutions, Guardian Energy, Lawrenceville Tank and RPMG is as follows (in 000’s):

Balance Sheet	December 31, 2016		September 30, 2016
Current Assets	$	344,097	$	313,541
Other Assets	250,765		246,702
Current Liabilities	248,344		175,588
Long-term Debt	56,715		55,726
Members’ Equity	289,802		328,928
	Three Months Ended December 31,
Income Statement	2016		2015
Revenue	$	196,930	$	184,049
Gross Profit	42,333		21,795
Net Income	38,014		17,520

The Company recorded equity in net income of approximately (in 000's):

	Three Months Ended January 31,
Equity in Net Income	2017		2016
Absolute Energy	$	907	$	550
Guardian Energy	1,066		1,368
Homeland Energy Solutions	1,151		405
Other	76		44
Total	$	3,200	$	2,367

During the three months ended January 31, 2017, Guardian Energy made distributions in excess of the equity balance recorded by the Company. The excess distribution was approximately $1,066,000 and is recorded as part of income for the three months ended January 31, 2017. The following table (in 000's) shows the condensed unaudited financial information of Guardian Energy, which represents greater than 10% of the net income during certain periods presented.

Guardian Energy Condensed Unaudited Financial Information
Balance Sheet	December 31, 2016			September 30, 2016
Current Assets	$	28,159		26,350
Other Assets	40,735			42,264
Current Liabilities	18,941			17,812
Long-term Debt	56,592			55,500
Members’ Equity	(6,639		)	(4,698		)
	Three Months Ended
Income Statement	December 31, 2016			December 31, 2015
Revenue	$	57,942		$	52,137
Gross Profit	14,175			7,290
Net Income	10,059			3,881

The following table (in 000's) shows the condensed unaudited financial information of Homeland Energy Solutions. The Company's equitable portion of assets of Homeland Energy Solutions is greater than 10% of the Company's assets and the income generated represents greater than 10% of the Company's net income for certain periods presented:

Homeland Energy Solutions Condensed Unaudited Financial Information
Balance Sheet	December 31, 2016		September 30, 2016
Current Assets	$	76,835	$	51,430
Other Assets	121,950		85,272
Current Liabilities	47,424		3,932
Long-term Debt	123		0
Members’ Equity	151,238		132,770
	Three Months Ended
Income Statement	December 31, 2016		December 31, 2015
Revenue	76,805		$	68,246
Gross Profit	15,875		59,872
Net Income	14,598		4,961

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Accounting Policies

3 Months Ended

Jan. 31, 2017

Summary of Significant Accounting Policies [Abstract]

Accounting Estimates

Accounting Estimates

Management uses estimates and assumptions in preparing these financial statements in accordance with generally accepted accounting principles.  Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

Cash and Equivalents

Cash and Equivalents

The Company's cash balances are maintained in bank depositories and regularly exceed federally insured limits. The Company has not experienced any losses in connection with these balances. Also included in cash and equivalents are highly liquid investments, that are readily convertible into known amounts of cash, which are subject to an insignificant risk of change in value due to interest rate, quoted price or penalty on withdrawal and have a maturity of three months or less.

Marketable Securities

Marketable Securities

The Company determines the appropriate classification of its investments in debt and equity securities at the time of purchase and reevaluates such determinations at each balance sheet date. Debt securities are classified as held to maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are recorded as either short term or long term on the Balance Sheet, based on contractual maturity date and are stated at amortized cost. Marketable securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings.

Marketable securities consist of certificates of deposits with original maturities of greater than three months and mutual funds. Certificates of deposit are considered held to maturity securities, which are measured at cost. Mutual funds are considered trading securities which are measured at fair value using prices obtained from pricing services. Any unrealized or realized gains and losses on the trading securities are recorded as part of other income.

At January 31, 2017, marketable securities consisted of mutual funds invested in intermediate-term municipal and government bonds with an approximate cost and fair market value of $13,109,000 and $12,831,000, respectively, and certificates of deposit all with maturities of less than one year and approximate value of $500,000. At October 31, 2016, marketable securities consisted of mutual funds invested in intermediate-term municipal and government bonds with an approximate cost and fair market value of $12,967,000 and $13,036,000, respectively, and certificates of deposit all with maturities of less than one year and an approximate value of $2,750,000. For the periods ended January 31, 2017 and 2016, there was no other-than-temporary impairment recognized. For the three months ended January 31, 2017 and 2016, the Company recorded interest, dividends and net realized and unrealized gains (losses) of approximately $(204,000) and $99,000, respectively, from these investments as part of other income.

Receivables

Accounts Receivables

Credit sales are made primarily to one customer and no collateral is required. The Company carries these accounts receivable at original invoice amount with no allowance for doubtful accounts due to the historical collection rates on these accounts.

Investments

Investments

The Company has less than a 20% investment interest in five companies in related industries. These investments are being accounted for by the equity method of accounting under which the Company's share of net income is recognized as income in the Company's statement of operations and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account. Distributions or dividends received in excess of the carrying value are recognized as income in the statement of operations. The investments are evaluated for indications of impairment on a regular basis. A loss would be recognized when the fair value is determined to be less than the carrying value.

The fiscal years of Renewable Products Marketing Group, LLC (RPMG) and Guardian Energy Janesville, LLC end on September 30 and the fiscal years of Absolute Energy, LLC, Homeland Energy Solutions, LLC and Lawrenceville Tank, LLC, end on December 31. The Company consistently follows the practice of recognizing the net income based on the most recent reliable data. Therefore, the net income which is reported in the Company's statement of operations for the period ended January 31, 2017, for all companies, is based on the investee's results for the three months ended December 31, 2016.

Note Receivable

Note Receivable

The Company has a note receivable from an unrelated party. The Company carries the note at original face value plus accrued interest which is equal to 6% as of January 31, 2017 and is compounded monthly. The note commenced in December 2014 with a face value of $510,000 and has a maturity of 5 years. Annual payments are to begin in September 2018. Balance of the note receivable, including accrued interest, as of January 31, 2017 and October 31, 2016 was approximately $577,000 and $566,000, respectively.

Revenue and Cost Recognition

Revenue and Cost Recognition

Revenue from the sale of the Company's products is recognized at the time title to the goods and all risks of ownership transfer to the customers.  This generally occurs upon shipment, loading of the goods or when the customer picks up the goods. Collectability of revenue is reasonably assured based on historical evidence of collectability between the Company and its customers. Interest income is recognized as earned.

Shipping costs incurred by the Company in the sale of ethanol, distiller grains and corn oil are not specifically identifiable and as a result, revenue from the sale of ethanol, distiller grains and corn oil are recorded based on the net selling price reported to the Company from its marketer. Railcar lease costs incurred by the Company in the sale and shipment of distiller grain products are included in cost of goods sold.

Inventory

Inventory

Inventories are generally valued at the lower of weighted average cost or net realizable value.  In the valuation of inventories and purchase commitments, net realizable value is defined as estimated selling price in the ordinary course of business less reasonable predictable costs of completion, disposal and transportation.

Property and Equipment

Property & Equipment

Property and equipment are stated at historical cost. Significant additions and betterments are capitalized, while expenditures for maintenance and repairs are charged to operations when incurred. The Company uses the straight-line method of computing depreciation over the estimated useful lives between 3 and 40 years.

The Company reviews its property and equipment for impairment whenever events indicate that the carrying amount of the asset group may not be recoverable. If circumstances require a long-lived asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset group to the carrying value of the asset group. If the carrying value of the asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Investment in commodities contracts, derivative instruments and hedging activities

Investment in commodities contracts, derivative instruments and hedging activities

The Company evaluates its contracts to determine whether the contracts are derivative instruments. Certain contracts that meet the definition of a derivative may be exempted from derivative accounting and treated as normal purchases or normal sales if documented as such. Normal purchases and normal sales are contracts that provide for the purchase or sale of something other than a financial instrument or derivative instrument that will be delivered in quantities expected to be used or sold over a reasonable period in the normal course of business.

The Company enters into short-term cash, option and futures contracts as a means of securing corn and natural gas for the ethanol plant and managing exposure to changes in commodity and energy prices. The Company occasionally also enters into derivative contracts to hedge its exposure to price risk as it relates to ethanol sales. As part of its risk management process, the Company uses futures and option contracts through regulated commodity exchanges or through the over-the-counter market to manage its risk related to pricing of inventories. All of the Company's derivatives, other than those excluded under the normal purchases and sales exclusion, are designated as non-hedge derivatives, with changes in fair value recognized in net income. Although the contracts are economic hedges of specified risks, they are not designated or accounted for as hedging instruments.

Realized and unrealized gains and losses related to derivative contracts related to corn and natural gas are included as a component of cost of goods sold and derivative contracts related to ethanol are included as a component of revenues in the accompanying financial statements. The fair values of contracts are presented on the accompanying balance sheet as derivative instruments net of cash due from/to broker.

Net income per unit

Net income per unit

Basic and diluted earnings per unit are computed using the weighted-average number of Class A and B units outstanding during the period.

Fair Value

Fair Value

Financial instruments include cash and equivalents, marketable securities, receivables, accounts payable, accrued expenses and derivative instruments. The fair value of marketable securities and derivative financial instruments is based on quoted market prices, as disclosed in Note 7. The fair value, determined using level 3 inputs, of all other current financial instruments is estimated to approximate carrying value due to the short-term nature of these instruments.

Risks and Uncertainties

Risks and Uncertainties

The Company has certain risks and uncertainties that it will experience during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distiller grains to customers primarily located in the United States. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. For the three months ended January 31, 2017, ethanol sales accounted for approximately 84% of total revenue, distiller grains sales accounted for approximately 12% of total revenue and corn oil sales accounted for approximately 4% of total revenue while corn costs averaged approximately 77% of cost of goods sold.

The Company's operating and financial performance is largely driven by the prices at which ethanol is sold and the net expense of corn. The price of ethanol is influenced by factors such as supply and demand, weather, government policies and programs, and unleaded gasoline and the petroleum markets with ethanol selling, in general, for less than gasoline at the wholesale level. Excess ethanol supply in the market, in particular, puts downward pressure on the price of ethanol. The Company's largest cost of production is corn. The cost of corn is generally impacted by factors such as supply and demand, weather, government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities.

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Inventory (Tables)

3 Months Ended

Jan. 31, 2017

Inventory [Abstract]

Schedule of Inventory

	January 31, 2017		October 31, 2016
Raw Materials	$	4,052,774	$	3,808,935
Work in Process	1,205,615		1,170,767
Finished Goods	1,866,667		1,925,982
Totals	$	7,125,056	$	6,905,684

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Commitments, Contingencies and Agreements (Tables)

3 Months Ended

Jan. 31, 2017

Commitments, Contingencies and Agreements [Abstract]

Schedule of Related Party Transactions

	Three Months Ended January 31,
	2017		2016
Sales ethanol, distiller grains & corn oil	$	56,097,000	$	48,873,000
Marketing fees	110,000		100,000
As of	January 31, 2017		October 31, 2016
Amount due from RPMG	$	6,773,000	$	6,202,000

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Risk Management (Tables)

3 Months Ended

Jan. 31, 2017

Risk Management [Abstract]

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

	Income Statement Classification	Realized Gain (Loss)		Change in Unrealized Gain (Loss)			Total Gain (Loss)
Derivatives not designated as hedging instruments:
Commodity Contracts for the	Revenue	$	9,000	$	62,000		$	71,000
three months ended January 31, 2017	Cost of Goods Sold	154,000		(101,000		)	53,000
	Total	$	163,000	$	(39,000	)	$	124,000
Commodity Contracts for the	Revenue	$	—	$	—		$	—
three months ended January 31, 2016	Cost of Goods Sold	382,000		217,000			599,000
	Total	$	382,000	$	217,000		$	599,000

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

	Balance Sheet Classification	January 31, 2017			October 31, 2016
Futures and option contracts through July 2018
In gain position		$	94,000		$	157,000
In loss position		(198,000		)	(222,000		)
Cash held by broker		684,000			580,000
	Current Asset	$	580,000		$	515,000

Long-term Purchase Commitment

	Commitments Through	Amount
Sale commitments
Corn Oil - fixed price	February 2017	$	692,000
Distiller Grains - fixed price	March 2017	2,121,000
Purchase commitments
Corn - fixed price	December 2017	$	9,425,000
Corn - basis contract	July 2018	37,528,000

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Fair Value Measurements (Tables)

3 Months Ended

Jan. 31, 2017

Fair Value Measurements [Abstract]

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

	Total			Level 1			Level 2			Level 3
Marketable securities:
Assets, January 31, 2017	$	580,000		$	580,000		$	—		$	—
Assets, October 31, 2016	13,036,000			13,036,000			—			—
Derivative financial instruments:
January 31, 2017
Assets	$	94,000		$	32,000		$	62,000		$	—
Liabilities	(198,000		)	(143,000		)	(55,000		)	—
October 31, 2016
Assets	$	157,000		$	61,000		$	96,000		$	—
Liabilities	(222,000		)	(163,000		)	(59,000		)	—

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Investments (Tables)

3 Months Ended

Jan. 31, 2017

Investments [Abstract]

Schedule of Equity Method Investments

Balance Sheet	December 31, 2016		September 30, 2016
Current Assets	$	344,097	$	313,541
Other Assets	250,765		246,702
Current Liabilities	248,344		175,588
Long-term Debt	56,715		55,726
Members’ Equity	289,802		328,928
	Three Months Ended December 31,
Income Statement	2016		2015
Revenue	$	196,930	$	184,049
Gross Profit	42,333		21,795
Net Income	38,014		17,520

The Company recorded equity in net income of approximately (in 000's):

	Three Months Ended January 31,
Equity in Net Income	2017		2016
Absolute Energy	$	907	$	550
Guardian Energy	1,066		1,368
Homeland Energy Solutions	1,151		405
Other	76		44
Total	$	3,200	$	2,367

During the three months ended January 31, 2017, Guardian Energy made distributions in excess of the equity balance recorded by the Company. The excess distribution was approximately $1,066,000 and is recorded as part of income for the three months ended January 31, 2017. The following table (in 000's) shows the condensed unaudited financial information of Guardian Energy, which represents greater than 10% of the net income during certain periods presented.

Guardian Energy Condensed Unaudited Financial Information
Balance Sheet	December 31, 2016			September 30, 2016
Current Assets	$	28,159		26,350
Other Assets	40,735			42,264
Current Liabilities	18,941			17,812
Long-term Debt	56,592			55,500
Members’ Equity	(6,639		)	(4,698		)
	Three Months Ended
Income Statement	December 31, 2016			December 31, 2015
Revenue	$	57,942		$	52,137
Gross Profit	14,175			7,290
Net Income	10,059			3,881

The following table (in 000's) shows the condensed unaudited financial information of Homeland Energy Solutions. The Company's equitable portion of assets of Homeland Energy Solutions is greater than 10% of the Company's assets and the income generated represents greater than 10% of the Company's net income for certain periods presented:

Homeland Energy Solutions Condensed Unaudited Financial Information
Balance Sheet	December 31, 2016		September 30, 2016
Current Assets	$	76,835	$	51,430
Other Assets	121,950		85,272
Current Liabilities	47,424		3,932
Long-term Debt	123		0
Members’ Equity	151,238		132,770
	Three Months Ended
Income Statement	December 31, 2016		December 31, 2015
Revenue	76,805		$	68,246
Gross Profit	15,875		59,872
Net Income	14,598		4,961

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Summary of Significant Accounting Policies Production (Details) gal in Millions	3 Months Ended
	Jan. 31, 2017 gal
Product Information [Line Items]
Equity Method Investments, Number of Entities	5
Ethanol [Member]
Product Information [Line Items]
Annual Production Capacity	115

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Summary of Significant Accounting Policies Marketable Securities (Details) - USD ($)	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Oct. 31, 2016
Schedule of Held-to-maturity Securities [Line Items]
Marketable Securities, Realized Gain (Loss)	$ (204,000)
Marketable Securities, Unrealized Gain (Loss)		$ 99,000
Mutual Fund [Member] | Original Cost [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity Securities, Current	13,109,000		$ 12,967,000
Fair Value, Measurements, Recurring [Member] | Mutual Fund [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity Securities, Current	12,831,000		13,036,000
Fair Value, Measurements, Recurring [Member] | Certificates of Deposit [Member]
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity Securities, Current	$ 500,000		$ 2,750,000

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Property and Equipment (Details) - Property, Plant and Equipment [Member]	3 Months Ended
	Jan. 31, 2017
Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Estimated Useful Lives	3
Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Estimated Useful Lives	40

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Concentration Risk (Details)	3 Months Ended
	Jan. 31, 2017
Sales Revenue, Product Line [Member] | Ethanol [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	84.00%
Sales Revenue, Product Line [Member] | Distillers Grains [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	12.00%
Sales Revenue, Product Line [Member] | Corn Oil [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	4.00%
Cost of Goods, Total [Member] | Corn [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	77.00%

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Summary of Significant Accounting Policies Note Receivable (Details) - USD ($)	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Oct. 31, 2016
Accounting Policies [Abstract]
Receivable with Imputed Interest, Effective Yield (Interest Rate)	6.00%
Receivable with Imputed Interest, Face Amount	$ 510,000
Fair Value Assumptions, Expected Term		5 years
Notes Receivable, Fair Value Disclosure	$ 577,000		$ 566,000

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Inventory (Details) - USD ($)	Jan. 31, 2017	Oct. 31, 2016
Inventory [Abstract]
Raw Materials	$ 4,052,774	$ 3,808,935
Work in Process	1,205,615	1,170,767
Finished Goods	1,866,667	1,925,982
Inventory	$ 7,125,056	$ 6,905,684

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Bank Financing Long Term Debt (Details) - Farm Credit Services of America [Member] - USD ($)	Jan. 31, 2017	Oct. 31, 2016
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 35,000,000
Debt Instrument, Interest Rate, Stated Percentage	3.15%
Debt Instrument, Interest Rate, Effective Percentage	3.93%
Long-term Debt		$ 0
Debt Instrument, Unused Borrowing Capacity, Amount	$ 10,000,000

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Related Party Transactions (Details) - Director [Member] - USD ($)	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Oct. 31, 2016
Related Party Transaction [Line Items]
Related Party Transaction, Purchases from Related Party	$ 10,379,000	$ 24,260,000
Related Party Transaction, Due from (to) Related Party	$ 547,000		$ 518,000

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Commitments, Contingencies and Agreements (Details) - Investee [Member] - USD ($) $ in Thousands	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016	Oct. 31, 2016
Related Party Transaction [Line Items]
Revenue from Related Parties	$ 56,097	$ 48,873
Related Party Transaction, Expenses from Transactions with Related Party	110	$ 100
Related Party Transaction, Due from (to) Related Party	$ 6,773		$ 6,202

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Risk Management Derivative Instruments - Income Statement (Details) - Not Designated as Hedging Instrument [Member] - Commodity Contract [Member] - USD ($)	3 Months Ended
	Jan. 31, 2017	Jan. 31, 2016
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Realized Gain (Loss) Recognized in Income, Net	$ 163,000	$ 382,000
Derivative Instruments, Unrealized Gain (Loss) Recognized in Income, Net	(39,000)	217,000
Derivative Instruments, Gain (Loss) Recognized in Income, Net	124,000	599,000
Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Realized Gain (Loss) Recognized in Income, Net	9,000	0
Derivative Instruments, Unrealized Gain (Loss) Recognized in Income, Net	62,000	0
Derivative Instruments, Gain (Loss) Recognized in Income, Net	71,000	0
Cost of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Realized Gain (Loss) Recognized in Income, Net	154,000	382,000
Derivative Instruments, Unrealized Gain (Loss) Recognized in Income, Net	(101,000)	217,000
Derivative Instruments, Gain (Loss) Recognized in Income, Net	$ 53,000	$ 599,000

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Risk Management Derivative Instruments - Balance Sheet Location (Details) - USD ($)	Jan. 31, 2017	Oct. 31, 2016
Derivatives, Fair Value [Line Items]
Derivative Instruments and Hedges, Assets	$ 580,013	$ 514,878
Fair Value, Measurements, Recurring [Member] | Commodity Contract [Member] | Other Noncurrent Assets [Member]
Derivatives, Fair Value [Line Items]
Commodity Contract Asset, Noncurrent	94,000	157,000
Fair Value, Measurements, Recurring [Member] | Commodity Contract [Member] | Other Noncurrent Liabilities [Member]
Derivatives, Fair Value [Line Items]
Commodity Contract Asset, Noncurrent	198,000	222,000
Fair Value, Measurements, Recurring [Member] | Commodity Contract [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Good Faith and Margin Deposits with Broker-Dealers	684,000	580,000
Derivative Instruments and Hedges, Assets	$ 580,000	$ 515,000

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Risk Management Long Term Purchase Commitments (Details) $ in Thousands	3 Months Ended
	Jan. 31, 2017 USD ($)
Basis Contract [Member] | Corn [Member]
Long-term Purchase Commitment [Line Items]
Purchase Commitment, Remaining Minimum Amount Committed	$ 37,528
Fixed Price [Member] | Corn Oil [Member]
Long-term Purchase Commitment [Line Items]
Supply Commitment, Remaining Minimum Amount Committed	692
Fixed Price [Member] | Distillers Grains [Member]
Long-term Purchase Commitment [Line Items]
Supply Commitment, Remaining Minimum Amount Committed	2,121
Fixed Price [Member] | Corn [Member]
Long-term Purchase Commitment [Line Items]
Purchase Commitment, Remaining Minimum Amount Committed	$ 9,425
Ethanol [Member]
Long-term Purchase Commitment [Line Items]
Product usage, percentage	2.00%
Natural Gas [Member]
Long-term Purchase Commitment [Line Items]
Product usage, percentage	9.00%
Corn [Member]
Long-term Purchase Commitment [Line Items]
Product usage, percentage	21.00%
Affiliated Entity [Member]
Related Party Transaction [Line Items]
Purchase Obligation	$ 6,486

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Fair Value Measurements (Details) - Commodity Contract [Member] - Fair Value, Measurements, Recurring [Member] - USD ($)	Jan. 31, 2017	Oct. 31, 2016
Other Current Assets [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Marketable Securities	$ 580,000	$ 13,036,000
Derivative Asset, Current	94,000	157,000
Other Current Assets [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Marketable Securities	580,000	13,036,000
Derivative Asset, Current	32,000	61,000
Other Current Assets [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Marketable Securities	0	0
Derivative Asset, Current	62,000	96,000
Other Current Assets [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Marketable Securities	0	0
Derivative Asset, Current	0	0
Liability [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Derivative Liability, Current	(198,000)	(222,000)
Liability [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Derivative Liability, Current	(143,000)	(163,000)
Liability [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Derivative Liability, Current	(55,000)	(59,000)
Liability [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Derivative Liability, Current	$ 0	$ 0

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Investments (Details) - USD ($)	3 Months Ended				6 Months Ended
	Jan. 31, 2017	Dec. 31, 2016	Jan. 31, 2016	Dec. 31, 2015	Mar. 31, 2016	Sep. 30, 2016
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Current Assets		$ 344,097,000				$ 313,541,000
Equity Method Investment, Other Assets		250,765,000				246,702,000
Equity Method Investment, Current Liabilities		248,344,000				175,588,000
Equity Method Investment, Long-term Debt		56,715,000				55,726,000
Equity Method Investment, Members' Equity		289,802,000				328,928,000
Equity Method Investment, Revenue		196,930,000		$ 184,049,000
Equity Method Investment, Gross Profit		42,333,000		21,795,000
Equity Method Investment, Summarized Financial Information, Net Income (Loss)		38,014,000		17,520,000
Equity Method Investment, Net Income	$ 1,006,866	3,200,000	$ (1,298,325)		$ 2,367,000
Absolute Energy [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Net Income		907,000			550,000
Guardian Energy [Member]
Schedule of Equity Method Investments [Line Items]
Proceeds from Equity Method Investment, Dividends or Distributions	$ 1,066,000
Equity Method Investment, Current Assets		28,159,000				26,350,000
Equity Method Investment, Other Assets		40,735,000				42,264,000
Equity Method Investment, Current Liabilities		18,941,000				17,812,000
Equity Method Investment, Long-term Debt		56,592,000				55,500,000
Equity Method Investment, Members' Equity		(6,639,000)				(4,698,000)
Equity Method Investment, Revenue		57,942,000		52,137,000
Equity Method Investment, Gross Profit		14,175,000		7,290,000
Equity Method Investment, Summarized Financial Information, Net Income (Loss)		10,059,000		3,881,000
Equity Method Investment, Net Income		1,066,000			1,368,000
Homeland Energy Solutions [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Current Assets		76,835,000				51,430,000
Equity Method Investment, Other Assets		121,950,000				85,272,000
Equity Method Investment, Current Liabilities		47,424,000				3,932,000
Equity Method Investment, Long-term Debt		123,000				0
Equity Method Investment, Members' Equity		151,238,000				$ 132,770,000
Equity Method Investment, Revenue		76,805,000		68,246,000
Equity Method Investment, Gross Profit		15,875,000		59,872,000
Equity Method Investment, Summarized Financial Information, Net Income (Loss)		14,598,000		$ 4,961,000
Equity Method Investment, Net Income		1,151,000			405,000
Other Investee [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Net Income		$ 76,000			$ 44,000