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, 2020
	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)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

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 every Interactive Data File required to be submitted 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 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, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o	Accelerated Filer  o
Non-Accelerated Filer x	Smaller Reporting Company o
	Emerging Growth Company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 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 16, 2020, 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	17
Item 3. Quantitative and Qualitative Disclosures About Market Risk	23
Item 4. Controls and Procedures	23
PART II	24
Item 1. Legal Proceedings	24
Item 1A. Risk Factors	24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3. Defaults Upon Senior Securities	25
Item 4. Mine Safety Disclosures	25
Item 5. Other Information	26
Item 6. Exhibits	26
SIGNATURES	27

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GOLDEN GRAIN ENERGY, LLC

Balance Sheets

ASSETS	January 31, 2020		October 31, 2019
	(Unaudited)
Current Assets
Cash and equivalents	$	16,517,347	$	15,937,266
Marketable securities	910,619		870,706
Accounts receivable	5,901,592		2,509,938
Other receivables	1,070,260		215,981
Derivative instruments	1,042,947		1,115,525
Inventory	7,258,394		8,534,358
Prepaid expenses and other	3,692,276		2,909,651
Total current assets	36,393,435		32,093,425
Property and Equipment
Land and land improvements	16,319,211		14,319,211
Building and grounds	32,891,090		30,891,090
Grain handling equipment	16,084,232		16,038,202
Office equipment	1,017,371		458,385
Plant and process equipment	121,851,854		121,636,606
Construction in progress	2,246,355		5,038,278
	190,410,113		188,381,772
Less accumulated depreciation	118,529,022		116,292,967
Net property and equipment	71,881,091		72,088,805
Other Assets
Investments	24,254,575		25,416,170
Right of use assets from operating leases	2,597,026		—
Other assets	1,814,191		431,983
Total other assets	28,665,792		25,848,153
Total Assets	$	136,940,318	$	130,030,383

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, 2020		October 31, 2019
	(Unaudited)
Current Liabilities
Accounts payable	$	5,442,706	$	6,188,819
Accrued expenses	3,000,983		2,827,791
Other current liabilities	131,920		123,590
Current portion operating lease liabilities	1,048,441		—
Total current liabilities	9,624,050		9,140,200
Long-term Liabilities
Long-term liabilities, deferred compensation	500,506		469,040
Operating lease liabilities	1,548,585		—
Deferred revenue, net of current portion	1,431,816		—
Total long-term liabilities	3,480,907		469,040
Commitments and Contingencies
Members' Equity (19,873,000 units issued and outstanding)	123,835,361		120,421,143
Total Liabilities and Members’ Equity	$	136,940,318	$	130,030,383

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, 2020		January 31, 2019
Revenues	$	57,432,202	$	46,196,377
Cost of Goods Sold	54,826,337		46,817,643
Gross Profit (Loss)	2,605,865		(621,266		)
Operating Expenses	1,273,962		971,396
Operating Income (Loss)	1,331,903		(1,592,662		)
Other Income
Other income	8,447		200,826
Interest income	58,598		51,668
Equity in net income of investments	2,015,270		160,897
Total Other Income	2,082,315		413,391
Net Income (Loss)	$	3,414,218	$	(1,179,271	)
Basic & diluted net income (loss) per unit	$	0.17	$	(0.06	)
Weighted average units outstanding for the calculation of basic & diluted net income (loss) per unit	19,873,000		19,873,000
Distributions Per Unit for Class A & B	$	—	$	0.25

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

5

GOLDEN GRAIN ENERGY, LLC

Statements of Changes in Members' Equity

	Members' Equity
Balance - October 31, 2018	$	127,101,795
Net loss for the three-month period ended January 31, 2019	(1,179,271		)
Member distributions	(4,968,250		)
Balance - January 31, 2019	$	120,954,274
	Members' Equity
Balance - October 31, 2019	$	120,421,143
Net income for the three-month period ended January 31, 2020	3,414,218
Balance - January 31, 2020	$	123,835,361

Notes to Financial Statements are an integral part of this Statement.

6

GOLDEN GRAIN ENERGY, LLC

Statements of Cash Flows (Unaudited)

	Three Months Ended			Three Months Ended
	January 31, 2020			January 31, 2019
Cash Flows from Operating Activities
Net income (loss)	$	3,414,218		$	(1,179,271	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	2,254,569			2,489,177
Unrealized loss on risk management & marketable securities	64,131			148,841
Change in accretion of interest on grant & note receivable	—			(2,326		)
Distributions in excess of earnings from investments	621,595			658,858
Proceeds from insurance claims and business interruption	—			3,000,000
Change in deferred compensation	—			(58,649		)
Change in assets and liabilities
Accounts receivable	(3,391,654		)	(1,190,618		)
Inventory	1,275,964			195,768
Prepaid expenses and other	(1,096,904		)	(169,285		)
Accounts payable	(109,096		)	772,409
Accrued expenses	173,192			(134,561		)
Net cash provided by operating activities	3,206,015			4,530,343
Cash Flows from Investing Activities
Capital expenditures	(2,625,934		)	(3,437,041		)
Purchase of marketable securities	—			(7,515		)
Proceeds from sale of marketable securities	—			3,701,191
Net cash provided by (used in) investing activities	(2,625,934		)	256,635
Cash Flows from Financing Activities
Distributions to members	—			(4,968,250		)
Payments received on grant receivable	—			84,666
Net cash (used in) financing activities	—			(4,883,584		)
Net Increase (Decrease) in Cash and Equivalents	580,081			(96,606		)
Cash and Equivalents – Beginning of Period	15,937,266			9,322,805
Cash and Equivalents – End of Period	$	16,517,347		$	9,226,199
Supplemental Cash Flow Information
Cash paid for interest	$	12,838		$	12,858
Supplemental Disclosure of Noncash Operating, Investing & Financing Activities
Accounts payable related to construction in progress	$	300,554		$	578,402
Deferred revenue received through grant receivable	1,400,722			—
Initial right-of-use asset and liability recorded	2,889,785			—
Distributions declared and unpaid by equity method investee	540,000			660,000

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

7

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2020

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, 2019, contained in the Company's annual report on Form 10-K for 2019.

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 120 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 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 consisted of mutual funds invested in intermediate-term municipal and government bonds. For the periods ended January 31, 2020 and 2019, there was no other-than-temporary impairment recognized. 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. The Company recorded interest, dividends and net realized and unrealized gains (losses) from these investments as part of other income as follows:

8

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2020

	Three Months Ended January 31,
	2020		2019
Net earnings on marketable securities	$	8,000	$	201,000
	Marketable Securities
As of	Cost		Fair Market Value
January 31, 2020	$	772,000	$	911,000
October 31, 2019	$	767,000	$	871,000

Accounts Receivable

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, 2020, for all companies, is based on the investee's results for the three months ended December 31, 2019.

Revenue and Cost Recognition

In the first quarter of 2019, the Company adopted Accounting Standards Update (ASU) 2014-9, Revenue from Contracts with Customers (Topic 606). Under the ASU, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers and with consideration of short-term nature of customer payments, the Company has adopted the practical expedient related to the financing component of the contract. The Company applied the five-step method outlined in the ASU to all contracts with customers and elected the modified retrospective implementation method. The Company generally has a single performance obligation in its arrangements with customers. The Company believes for its contracts with customers, control is transferred at a point in time, typically upon delivery to the customers. When the Company performs shipping and handling activities after the transfer of control to the customers (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. Adopting the practical expedient for contract costs, the Company expenses contract costs when incurred because the amortization period would have been less than one year. The implementation of the new standard does not have any material impact on the measurement or recognition of revenue of prior periods, however additional disclosures have been added in accordance with the ASU.

Revenues from contracts with customers are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. The principal activities which we generate revenue include: sales of ethanol, sales of distiller grains and sales of corn oil.

All revenue recognized in the income statement is considered to be revenue from contracts with customers. The disaggregation of revenue according to product line, along with accounts receivable from contracts with customers, is as disclosed in Note 5.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

9

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2020

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.

Based upon the timing of the transfer of control of our products to our customers, there are no contract assets or liabilities as of January 31, 2020.

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.

Grant Receivable and Deferred Revenue

Grants receivables are recorded when the payments to be received can be estimated and when payment is reasonably assured. The Company recorded a grant receivable and corresponding deferred revenue of approximately $1,400,000 associated with an agreement approved in December 2019 for tax increment financing monies associated with the plant expansion that was completed in January 2020 to be received over a 10-year period for the tax increment financing monies. These grants were recorded at their net present value using a discount rate of approximately 5%. Related deferred revenue was recorded and is being amortized into income as a reduction of property taxes over the life of the grant. As of January 31, 2020 the grant receivable was approximately $1,400,000 and was included in long-term other assets and the corresponding current and long-term portions of deferred revenue was approximately $1,400,000.

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.

10

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2020

Net earnings (loss) per unit

Basic and diluted earnings (loss) 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 8. 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, 2020, ethanol sales accounted for approximately 79% of total revenue, distiller grains sales accounted for approximately 17% of total revenue and corn oil sales accounted for approximately 4% of total revenue while corn costs averaged approximately 79% 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, and government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities.

Recent Accounting Pronouncements

In February 2016, FASB issued ASU No. 2016-02 "Leases" ("ASU 2016-02"). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. Under the new guidance, lessees are required to recognize the following for all leases (with the exception of short-term leases): (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted cash flow basis; and (2) a "right of use" asset, which is an asset that represents the lessee's right to use the specified asset for the lease term. The Company adopted this accounting standard effective November 1, 2019. Upon adoption, the Company elected a practical expedient which allows existing leases to retain their classification as operating leases. The Company has elected to account for lease and related nonlease components as a single lease component. See Note 6 for more detailed information regarding leases.

In August 2018, FASB issued ASU No. 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the

Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13"). ASU 2018-13 changes some of the disclosure requirements related to fair value measurements related to the Level 1, 2 and 3 investments. ASU 2018-13 is effective for fiscal

years beginning after December 15, 2019, and for interim periods within that fiscal year. The Company is currently evaluating the impact of its pending adoption of the new standard on the financial statement.

2.    INVENTORY

Inventory consisted of the following as of January 31, 2020 and October 31, 2019:

	January 31, 2020		October 31, 2019
Raw Materials	$	3,993,021	$	4,259,459
Work in Process	1,820,729		1,877,354
Finished Goods	1,444,644		2,397,545
Totals	$	7,258,394	$	8,534,358

11

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2020

3.    BANK FINANCING

The Company has entered into a master loan agreement with Farm Credit Services of America (FLCA) which includes revolving term loans with original maximum borrowings of $35 million and which currently has availability of $10 million and matures on September 1, 2020. Interest on the term loan is payable monthly at 3.15% above the one-month LIBOR (4.82% as of January 31, 2020). The borrowings are secured by substantially all the assets of the Company. The credit agreements are subject to covenants, including requiring the Company to maintain various financial ratios, as well as certain distribution limitations. As of January 31, 2020, 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, 2020 and October 31, 2019, the Company had no outstanding borrowings.

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 and construction companies (see Note 5). The Company also purchased ingredients from RPMG. Purchases from the related parties during the three months ended January 31, 2020 totaled approximately $11,042,000. Purchases from the related parties during the three months ended January 31, 2019 totaled approximately $9,113,000. As of January 31, 2020 and October 31, 2019, the amount owed to related parties was approximately $496,000 and $547,000, respectively (See Note 5).

5.    COMMITMENTS, CONTINGENCIES, AGREEMENTS AND RELATED PARTY

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,
	2020		2019
Sales ethanol	$	45,561,000	$	34,912,000
Sales distiller grains	9,941,000		9,451,000
Sales corn oil	2,220,000		1,809,000
Marketing fees-ethanol	$	60,000	$	61,000
Marketing fees-distiller grains	74,000		71,000
Marketing fees-corn oil	20,000		14,000
As of	January 31, 2020		October 31, 2019
Amount due from RPMG	$	5,877,000	$	2,489,000

The Company entered into multiple construction agreements as part of plans to expand plant capacity and build a new entrance road and administration building. The Company has incurred costs related to the expansion project totaling approximately $23.1 million of which approximately $7.9 million is to a related party. The current planned expansion project costs are estimated at approximately $24.0 million, including remaining commitments of approximately $0.5 million. The project is materially completed including the entrance road and administration building which were materially completed in January 2020. The final phase of the expansion to increase production capacity is currently being reevaluated. No other contracts have been executed.

12

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2020

6.    LEASE OBLIGATIONS

Effective November 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). The Company elected the option to apply the transition provisions at the adoption date instead of the earliest comparative period presented in the financial statements. By making this election, the Company has not applied retrospective reporting for prior years. The Company elected the short-term lease exception provided for in the standard and therefore only recognized right-of-use assets and lease liabilities for leases with a term greater than one year. The Company elected the package of practical expedients to not re-evaluate existing contracts as containing a lease or the lease classification unless it was not previously assessed against the lease criteria. In addition, the Company did not reassess initial direct costs for any existing leases.

A lease exists when a contract conveys to a party the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company recognized a lease liability at the lease commencement date, as the present value of future lease payments, using an estimated rate of interest that the Company would pay to borrow equivalent funds on a collateralized basis. A lease asset is recognized based on the lease liability value and adjusted for any prepaid lease payments, initial direct costs, or lease incentive amounts. The lease term at the commencement date includes any renewal options or termination options when it is reasonably certain that the Company will exercise or not exercise those options, respectively.

The Company leases rail cars and rail moving equipment with original terms up to 5 years. The Company is obligated to pay costs of insurance, taxes, repairs and maintenance pursuant to the terms of the leases. These costs are in addition to regular lease payments and are not included in lease expense. Rent expense incurred for the operating leases during the three months ended January 31, 2020 was approximately $354,000, and for the same period in 2019 was approximately $383,000. The lease agreements have maturity dates ranging from May 2020 to May 2024. The weighted average remaining life of the lease term for these leases was 1.80 years as of January 31, 2020.

The discount rate used in determining the lease liability for each individual lease was the Company's estimated incremental borrowing rate of 4.95%. The right-of-use asset operating lease, included in other assets, and operating lease liabilities, included in current and long term liabilities was $2,597,000 as of January 31, 2020.

At January 31, 2020, the Company had the following approximate minimum rental commitments under non-cancelable operating leases for the twelve month period ended January 31:

2021	$	1,152,000
2022	782,000
2023	528,000
2024	268,000
2025	67,000
Total lease commitments	$	2,797,000

A reconciliation of the undiscounted future payments in the schedule above and the lease liabilities recognized in the consolidated balance sheet as of January 31, 2020, is shown below.

Undiscounted future payments	$	2,797,000
Discount effect	(200,000		)
Discounted future payments	$	2,597,000

7.    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.

13

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2020

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, 2020 and 2019 and the fair value of derivatives as of January 31, 2020 and October 31, 2019:

	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	$	(438,000	)	$	403,000		$	(35,000	)
three months ended January 31, 2020	Cost of Goods Sold	1,376,000			(1,086,000		)	290,000
	Total	$	938,000		$	(683,000	)	$	255,000
Commodity Contracts for the	Revenue	$	(34,000	)	$	205,000		$	171,000
three months ended January 31, 2019	Cost of Goods Sold	585,000			(375,000		)	210,000
	Total	$	551,000		$	(170,000	)	$	381,000

	Balance Sheet Classification	January 31, 2020			October 31, 2019
Futures and option contracts
In gain position		$	1,220,000		$	1,930,000
In loss position		(581,000		)	(608,000		)
Cash held by (due to) broker		404,000			(206,000		)
	Current Asset	$	1,043,000		$	1,116,000

As of January 31, 2020, the Company had the following approximate outstanding purchase and sale commitments, of which all sales commitments and approximately $6,696,000 of the purchase commitments were with related parties.

	Commitments Through	Amount
Sale commitments
Corn Oil - fixed price	February 2020	$	1,040,000
Distiller Grains - fixed price	March 2020	3,907,000
Purchase commitments
Corn - fixed price	October 2020	$	5,468,000
Corn - basis contract	July 2020	14,130,000
Natural gas - fixed price	July 2021	7,849,000

As of January 31, 2020, the Company has fixed price futures and forward contracts in place for approximately 13% of its anticipated corn needs and 6% of its ethanol sales for the next 12 months with no open positions beyond that period. As of January 31, 2020, the Company has fixed price futures and forward contracts in place for approximately 68% of its natural gas needs for the next 12 months and approximately 28% of its natural gas needs for the next 24 months with no open positions beyond that period.

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GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2020

8.    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, 2020	$	911,000		$	911,000		$	—		$	—
Assets, October 31, 2019	871,000			871,000			—			—
Derivative financial instruments:
January 31, 2020
Assets	$	1,220,000		$	738,000		$	482,000		$	—
Liabilities	(581,000		)	(262,000		)	(319,000		)	—
October 31, 2019
Assets	$	1,930,000		$	1,650,000		$	280,000		$	—
Liabilities	(608,000		)	(80,000		)	(528,000		)	—

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GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

January 31, 2020

9. 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, 2019		September 30, 2019
Current Assets	$	337,219	$	337,643
Other Assets	254,437		258,655
Current Liabilities	238,144		224,439
Long-term Debt	50,182		55,368
Members’ Equity	303,330		316,491
	Three Months Ended December 31,
Income Statement	2019		2018
Revenue	$	217,042	$	178,823
Gross Profit	23,252		4,216
Net Income (Loss)	21,062		(458		)

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

	Three Months Ended January 31,
Equity in Net Income (Loss)	2020		2019
Absolute Energy	$	477	$	208
Guardian Energy	959		—
Homeland Energy Solutions	525		(166		)
Other	54		119
Total	$	2,015	$	161

10. SUBSEQUENT EVENTS

On February 17, 2020, the board of directors declared a cash distribution of $0.10 per membership unit to the holders of Class A and Class B units of record at the close of business on February 17, 2020, for a total distribution of $1,987,300. The distribution will be recorded in the Company's second quarter financial statements for the 2020 fiscal year and will be paid in March 2020.

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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. 

• Demand destruction from the small refinery exemptions to the RFS issued by the EPA;

• The impact 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;

• The impact of the ethanol export and import markets;

• The impact of the LCFS in certain parts of the country;

• Positions the EPA takes on topics such as RVO, RINS, and SREs;

• 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 120 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

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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 19, 2018, our board of directors declared a distribution of $0.25 per membership unit for members of record as of November 19, 2018. The total amount of the distribution was $4,968,250 which was paid in December 2018. On February 17, 2020, our board of directors declared a distribution of $0.10 per membership unit for members of record as of February 17, 2020. The total amount of the distribution was $1,9873,000 which will be paid in March 2020.

Results of Operations

Comparison of the Three Months Ended January 31, 2020 and 2019

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, 2020 and 2019:

	2020			2019
Income Statement Data	Amount		%	Amount			%
Revenues	$	57,432,202	100.0	$	46,196,377		100.0
Cost of Goods Sold	54,826,337		95.5	46,817,643			101.3
Gross Profit (Loss)	2,605,865		4.5	(621,266		)	(1.3	)
Operating Expenses	1,273,962		2.2	971,396			2.1
Operating Income (Loss)	1,331,903		2.3	(1,592,662		)	(3.4	)
Other Income	2,082,315		3.6	413,391			0.9
Net Income (Loss)	$	3,414,218	5.9	$	(1,179,271	)	(2.6	)

Revenues. Our total revenue was higher for our first quarter of 2020 compared to the same period of 2019 due to the higher quantities of ethanol sold and higher average price for our products. For our first quarter of 2020, ethanol sales accounted for approximately 79% of our total revenue, distiller grains sales accounted for approximately 17% of our total revenue, and corn oil sales accounted for approximately 4% of our total revenue. For our first quarter of 2019, ethanol sales accounted for approximately 76% of our total revenue, distiller grains sales accounted for approximately 20% 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 16% higher for our first quarter of 2020 compared to the same period of 2019. Management attributes this increase in the average price we received for our ethanol to a temporary spike in commodity markets and our ability to sell into a different market which historically has a higher ethanol price. Uncertainty has existed throughout our last several fiscal years related to whether the EPA would grant additional Small Refiner Exemption (SRE) waivers as part of the Renewable Fuels Standard (RFS). SRE waivers have been granted at high levels which is resulting in demand destruction. Management expects that the ethanol price has the potential to be negatively impacted by these waivers in our 2020 fiscal year and beyond.

We sold approximately 12% more gallons of ethanol during our first quarter of 2020 compared to the same period of 2019. Management attributes this increase in ethanol sales with increased production levels. Our total ethanol production was 9% more during our first quarter of 2020 as compared to the same period of 2019. Management attributes this increase to capital projects implemented during our 2019 fiscal year that allow for additional production capacity. Management anticipates that our ethanol sales and production will be similar during the remaining quarters of our 2020 fiscal year compared to our first fiscal quarter of 2020.

During our first quarter of 2020, we experienced combined realized and unrealized loss on our ethanol derivatives of approximately $35,000 which decreased our revenue. By comparison, we experienced combined realized and unrealized gain of $171,000 on ethanol derivative instruments during the same period of 2019.

The average price per ton we received for our dried distillers grains was approximately 4% lower for our first quarter of 2020 compared to the same period of 2019. In addition, the average price per ton we received for our modified/wet distillers grains was approximately 9% lower for our first quarter of 2020 compared to the same period of 2019.  Management attributes these lower distiller grains prices to a reduction in exports stemming from negative trade relations as well as a reduction in livestock feed demand in foreign countries. Distiller grains are typically used as a feed substitute for corn. Management anticipates distiller

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grains prices will remain steady unless China reenters the distillers grains market which could result in a significant increase in distiller grains demand.

Our dried distiller grains production increased by approximately 12% during our first quarter of 2020 compared to the same period of 2019. Management attributes this increase to higher ethanol production during the period. Management anticipates distiller grains production to be proportionate to ethanol production, which may or may not be higher for the remaining quarters of 2020 depending on the margin environment and production run rates.

We sold approximately 35% more pounds of corn oil during our first quarter of 2020 compared to the same period of 2019. This increase in corn oil sales is in direct relationship to the increase in ethanol production for the period. In addition, we had increased uptime of our corn oil extraction machines during our first quarter of 2020 compared to the same period of 2019. The average price per pound we received for our corn oil was approximately 10% lower for our first quarter of 2020 compared to the same period of 2019. This decrease in corn oil prices occurred due to an increase in the supply for corn oil and decrease in demand due to uncertainty over the blenders tax credit which slowed usage of corn oil in biodiesel production. Management anticipates that corn oil prices will be steady or higher during the remaining quarters of our 2020 fiscal year as a result of the blenders tax credit being renewed.

Cost of Goods Sold. Our cost of goods sold was higher for our first quarter of 2020 compared to the same period of 2019 due primarily to an increase in the amount of corn ground due to an increase in ethanol production during the 2020 period.  Our average cost per bushel of corn was approximately 7% higher during our first quarter of 2020 compared to the same period of 2019 due to tighter local supplies of corn and decreased corn production primarily in the eastern corn belt during the fall of 2019.  Management anticipates that global corn supplies will remain favorable during the remaining quarters of our 2020 fiscal year with potentially tighter local supplies. Volatility in prices, specifically local basis levels, could be impacted by the amount of corn in our local draw area which could result in higher corn prices during the remaining quarters of our 2020 fiscal year. In addition, continued trade policy, global health issues and tariffs may impact the corn market and changes in those policies may have a significant impact on the price of corn.

We consumed approximately 10% more bushels of corn during our first quarter of 2020 compared to the same period of 2019 due to increased ethanol production. Management anticipates consistent corn consumption during the remaining quarters of our 2020 fiscal year, provided that we can maintain operating margins or cash flow that allow us to continue to operate the ethanol plant at capacity.

Our natural gas costs decreased by approximately 24% during our first quarter of 2020 compared to the same period of 2019. Our usage was 9% higher, and the average price we paid per MMBtu of natural gas was approximately 30% lower during our first quarter of 2020 compared to the same period of 2019. Management attributes this increase in natural gas usage with higher ethanol production and the decrease in the natural gas price with increases in natural gas production and supplies. Management expects stable natural gas prices during the remaining quarters of our 2020 fiscal year due to current supply levels and derivative positions of natural gas.

We experienced combined realized and unrealized gains of approximately $290,000 for our first quarter of 2020 related to our corn and natural gas derivative instruments which decreased our cost of goods sold. By comparison, we experienced approximately $210,000 of combined realized and unrealized gains for the same period of 2019 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 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 higher during our first quarter of 2020 compared to the same period of 2019 due to increases in dues to trade organizations and increases in insurance expense offset by a reduction in personnel expense. Management anticipates that our operating expenses will be higher during the remaining quarters of our 2020 fiscal year compared to our 2019 fiscal year due to higher insurance rates for our 2020 fiscal year compared to 2019.

Other Income (Expense). Other income was higher for our first quarter of 2020 compared to the same period of 2019, due primarily to an increase in equity income from investments partially offset by a decrease in unrealized earnings from marketable securities. Management anticipates volatility in income from our investments during our 2020 fiscal year compared to our 2019 fiscal year due to current market factors. Our investments are in other companies involved in the ethanol industry which, in general, are expected to experience significant volatility in their operating margins during the foreseeable future.

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Changes in Financial Condition for the Three Months Ended January 31, 2020

Current Assets. We had slightly more cash and equivalents and marketable securities at January 31, 2020 compared to October 31, 2019. This increase in our cash and marketable security position is due primarily to positive margins during the first fiscal quarter of 2020 in addition to receiving nearly $2.6 million in cash from our investments in other companies. These increases were offset by approximately $2.6 million of cash used for capital projects primarily in connection to the administration building and new entrance road. The value of our accounts receivable was higher at January 31, 2020 compared to October 31, 2019 due to timing of shipments and payments for products. The value of our inventory was lower due to less ethanol and corn on hand at January 31, 2020 compared to October 31, 2019. Prepaid expenses is higher at January 31, 2020 compared to October 31, 2019 due to payment of our annual insurance premiums in the first fiscal quarter of 2020.

Property and Equipment. The net value of our property and equipment was lower at January 31, 2020 compared to October 31, 2019 due to depreciation offset by approximately $2.6 million of capital projects primarily related to our road and administration building construction. We had approximately $2.2 million in construction in progress at January 31, 2020 primarily related to plant improvement projects specifically in the areas of fermentation and process equipment.

Other Assets. Our other assets were higher at January 31, 2020 compared to October 31, 2019 due to lease right of use assets resulting from a new accounting pronouncement and the addition of a grant receivable for property tax rebate associated with our expansion. These were offset by a reduction in the carrying value of our investments, which decreased by the amount of distributions received in excess of earnings from investments.

Current Liabilities. Our current liabilities at January 31, 2020 were slightly higher compared to October 31, 2019 due to timing of payment on accounts payable including payments for corn.

Long-term Liabilities. Our long-term liabilities increased at January 31, 2020 and October 31, 2019 from the adoption of the new operating lease accounting pronouncement and the deferred revenue associated with the property tax rebate as part of the development agreement with the City of Mason City.

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. However, additional funds may be necessary to fund plant projects or if the current negative margin environment continues for an extended period of time. As of January 31, 2020, we had $10,000,000 available pursuant to our revolving term loan and approximately $17.4 million in cash and equivalents and marketable securities.

We recently completed a multiple phase expansion of the ethanol plant. The expansion was approximately $24 million, including the remaining commitment of approximately $0.5 million, all of which was paid through operating income. The final phase of the expansion to increase capacity by approximately 30 million gallons is currently being reevaluated. However, we may secure additional debt financing, or use existing credit facilities, in the future to pay a portion of the costs associated with the project. Management continually evaluates conditions in the ethanol industry and explores opportunities to improve the efficiency and profitability of our operations which may require additional 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 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, 2020 and 2019:

	Three Months Ended January 31,
	2020			2019
Net cash provided by operating activities	$	3,206,015		$	4,530,343
Net cash provided by (used in) investing activities	(2,625,934		)	256,635
Net cash (used in) financing activities	—			(4,883,584		)

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Cash Flow From Operations

Our cash flows from operations for the three months ended January 31, 2020 were lower compared to the same period of 2019 due primarily to higher net income offset by changes in working capital components. In addition, we also received an insurance payment during our three months ended January 31, 2019 consisting primarily of equipment repair costs, professional fees and loss of business income from a property and business interruption insurance claims filed in July 2018.

Cash Flow From Investing Activities

We used more cash for investing activities during our three months ended January 31, 2020 compared to the same period of 2019 primarily due to a decrease in proceeds from the sale of marketable securities offset by slight a decrease in capital expenditures. Our capital expenditures during our 2020 and 2019 fiscal years were primarily for plant improvements associated with the expansion of production and construction of a new road and administration building.

Cash Flow From Financing Activities.

During our three months ended January 31, 2020, we used less cash for financing activities due to less distributions being paid in 2020 as compared to the same period of 2019.

Short-Term and Long-Term Debt Sources

In exchange for our credit facility with Farm Credit, 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 September 1, 2020. We agreed to pay an annual fee of 0.5% of the unused portion of this loan. As of January 31, 2020, we had none outstanding on this loan with a potential accrued interest rate of 4.82% per year. As of January 31, 2020, we had $10,000,000 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.

Covenants

Our credit agreements with Farm Credit are subject to numerous covenants requiring us to maintain various financial ratios. As of January 31, 2020, 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 2019, our economic development grant was approved and equals the amount of tax assessments imposed by Cerro Gordo County, the county in which our ethanol plant is located, on our ethanol plant expansion that took place during our 2019 fiscal year and was completed in January of 2020. Based on the agreement, the total amount of these grants is expected to be approximately $2 million, which will be paid semi-annually over a 10-year period starting in 2023 and ending with the final payment being made in 2033 or when the $2 million maximum grant has been paid.

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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

In the first quarter of 2019, we adopted Accounting Standards Update (ASU) 2014-9, Revenue from Contracts with Customers (Topic 606). Under the ASU, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers and with consideration of short-term nature of customer payments, we have adopted the practical expedient related to the financing component of the contract. We applied the five-step method outlined in the ASU to all contracts with customers and elected the modified retrospective implementation method. We generally have a single performance obligation in our arrangements with customers. We believe for our contracts with customers, control is transferred at a point in time, typically upon delivery to the customers. When we perform shipping and handling activities after the transfer of control to the customers (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. Adopting the practical expedient for contract costs, our expense sales commissions when incurred because the amortization period would have been less than one year. The implementation of the new standard does not have any material impact on the measurement or recognition of revenue of prior periods, however additional disclosures have been added in accordance with the ASU.

Revenues from contracts with customers are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. The principal activities which we generate revenue include: sales of ethanol, sales of distiller grains and sales of corn oil.

All revenue recognized in the income statement is considered to be revenue from contracts with customers. The disaggregation of revenue according to product line, along with accounts receivable from contracts with customers. Shipping costs we incurred 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 we incurred in the sale and shipment 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.

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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.

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, 2020. 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, 2020, we had price protection or delivery protection in place for approximately 13% of our anticipated corn needs, 68% of our natural gas needs and 6% of our ethanol sales for the next 12 months and approximately 28% of our natural gas needs for the next 24 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, 2020, 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, 2020. 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	2,840,000	MMBTU	10%	$	798,000
Ethanol	113,070,000	Gallons	10%	14,925,000
Corn	34,625,000	Bushels	10%	13,088,000

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 that

23

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, 2020.  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, 2020, there has been no change in our internal control over financial reporting other than review controls in relation to adoption of ASU 2016-02, Leases (Topic 842), that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  Upon adoption of ASU 2016-02, we implemented certain review controls by members of our management team; such reviews include completeness of lease schedule, including consideration of embedded leases, and accuracy and evaluation of lease terms used in calculation of related assets and liabilities, including discount rates and renewal options.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

The following risk factors are provided due to material changes from the risk factors previously disclosed in our annual report on Form 10-K for the fiscal year ended October 31, 2019. The risk factors set forth below should be read in conjunction with the risk factors section and the Management's Discussion and Analysis section included in our annual report on Form 10-K for the fiscal year ended October 31, 2019.

We are subject to global and regional economic downturns and related risks.

The level of demand for our products is affected by global and regional demographic and macroeconomic conditions. A significant downturn in global economic growth, or recessionary conditions in major geographic regions for prolonged periods, may lead to reduced demand for our products, which could have a negative effect on the market price of our products in the United States.  For example, in December 2019, a novel strain of coronavirus surfaced in Wuhan, China (“COVID-19”). In just a few months, the spread of COVID-19 has resulted in businesses suspending or terminating global operations and travel, self-imposed or government-mandated quarantines, and an overall slowdown of economic activity in some areas.  Cases have been confirmed worldwide, including in Japan, Italy, Brazil, Canada and the United States.  To the extent that such economic conditions negatively impact consumer and business confidence, travel and consumption patterns or volumes for our products, our business and results of operations could be significantly and adversely affected.

COVID-19 may negatively impact our ability to operate our business which could decrease or eliminate the value of our units.

COVID-19 has resulted in significant uncertainty in many areas of our business.  We do not know how long these conditions will last.  This uncertainty is expected to negatively impact our operations.  We may experience labor shortages if our employees are unable or unwilling to come to work.  In addition, if our suppliers cannot deliver the supplies we need to operate our business, including corn and chemicals for our operations, we may be forced to shutdown operations or reduce production.  In addition, if we are unable to ship our products because of trucking or rail shipping disruptions, it could also result in a forced shutdown or reduction of production.  If we are unable to operate the ethanol plant at capacity, it may result in unfavorable operating results, especially since we will continue to pay our fixed costs of maintaining the facility.  Any shutdown or reduction of production, especially for an extended period of time, could reduce or eliminate the value of our units.  

24

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.

25

Item 5.Other Information

None.

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, 2020, formatted in XBRL (eXtensible Business Reporting Language): (i) Balance Sheets as of January 31, 2020 and October 31, 2019, (ii) Statements of Operations for the three months ended January 31, 2020 and 2019, (iii) Statements of Cash Flows for the three months ended January 31, 2020 and 2019, and (iv) the Notes to Condensed Financial Statements.**

*    Filed herewith.

**    Furnished herewith.

26

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 16, 2020	/s/ Curtis Strong
		Curtis Strong
		Executive Vice-President
		(Principal Executive Officer)
Date:	March 16, 2020	/s/ Christine Marchand
		Christine Marchand
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

27

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 16, 2020	/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 16, 2020	/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, 2020, 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 16, 2020

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, 2020, 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 16, 2020

XML

Summary of Significant Accounting Policies Grant Receivable and Deferred Revenue (Details) - USD ($)	1 Months Ended
	Jan. 31, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Grants receivable	$ 1,400,000	$ 1,400,000
Grant agreement, tax increment financing monies, period	10 years
Grant agreement, discount rate	5.00%
Deferred revenue	$ 1,400,000

XML

Fair Value Measurements (Tables)

3 Months Ended

Jan. 31, 2020

Fair Value Disclosures [Abstract]

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

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, 2020	$	911,000		$	911,000		$	—		$	—
Assets, October 31, 2019	871,000			871,000			—			—
Derivative financial instruments:
January 31, 2020
Assets	$	1,220,000		$	738,000		$	482,000		$	—
Liabilities	(581,000		)	(262,000		)	(319,000		)	—
October 31, 2019
Assets	$	1,930,000		$	1,650,000		$	280,000		$	—
Liabilities	(608,000		)	(80,000		)	(528,000		)	—

XML

Statements of Cash Flows - USD ($)	3 Months Ended
	Jan. 31, 2020	Jan. 31, 2019
Cash Flows from Operating Activities
Net Income	$ 3,414,218	$ (1,179,271)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,254,569	2,489,177
Unrealized loss on risk management & marketable securities	64,131	148,841
Change in accretion of interest on grant & note receivable	0	(2,326)
Distributions in excess of earnings from investments	621,595	658,858
Gain on insurance proceeds from involuntary conversion	0	3,000,000
Deferred compensation expense	0	(58,649)
Change in assets and liabilities
Accounts receivable	(3,391,654)	(1,190,618)
Inventory	1,275,964	195,768
Prepaid expenses and other	(1,096,904)	(169,285)
Accounts payable	(109,096)	772,409
Accrued expenses	173,192	(134,561)
Net cash provided by operating activities	3,206,015	4,530,343
Cash Flows from Investing Activities
Capital expenditures	(2,625,934)	(3,437,041)
Purchase of marketable securities	0	(7,515)
Proceeds from sale of marketable securities	0	3,701,191
Net cash provided by (used in) investing activities	(2,625,934)	256,635
Cash Flows from Financing Activities
Distributions to members	0	(4,968,250)
Payments received on grant receivable	0	84,666
Net cash (used in) financing activities	0	(4,883,584)
Net (Decrease) in Cash and Equivalents	580,081	(96,606)
Cash and Equivalents – Beginning of Period	15,937,266
Cash and Equivalents – End of Period	16,517,347
Supplemental Cash Flow Information
Cash paid for interest	12,838	12,858
Supplemental Disclosure of Noncash Operating, Investing & Financing Activities
Accounts payable related to construction in progress	300,554	578,402
Deferred revenue received through grant receivable	1,400,722	0
Initial right-of-use asset and liability recorded	2,889,785
Distributions declared and unpaid by equity method investee	$ 540,000	$ 660,000

XML

Balance Sheets - USD ($)	Jan. 31, 2020	Oct. 31, 2019
Current Assets
Cash and equivalents	$ 16,517,347	$ 15,937,266
Marketable securities	910,619	870,706
Accounts receivable	5,901,592	2,509,938
Other receivables	1,070,260	215,981
Derivative instruments	1,042,947	1,115,525
Inventory	7,258,394	8,534,358
Prepaid expenses and other	3,692,276	2,909,651
Total current assets	36,393,435	32,093,425
Property and Equipment
Land and land improvements	16,319,211	14,319,211
Building and grounds	32,891,090	30,891,090
Grain handling equipment	16,084,232	16,038,202
Office equipment	1,017,371	458,385
Plant and process equipment	121,851,854	121,636,606
Construction in progress	2,246,355	5,038,278
Gross property and equipment	190,410,113	188,381,772
Less accumulated depreciation	118,529,022	116,292,967
Net property and equipment	71,881,091	72,088,805
Other Assets
Investments	24,254,575	25,416,170
Right of use asset operating leases	2,597,026
Other assets	1,814,191	431,983
Total other assets	28,665,792	25,848,153
Total Assets	136,940,318	130,030,383
Current Liabilities
Accounts payable	5,442,706	6,188,819
Accrued expenses	3,000,983	2,827,791
Other current liabilities	131,920	123,590
Current portion operating lease liability	1,048,441
Total current liabilities	9,624,050	9,140,200
Long-term Liabilities
Long-term Liabilities, deferred compensation	500,506	469,040
Operating Lease Liability	1,548,585
Deferred revenue, net of current portion	1,431,816	0
Total long-term liabilities	3,480,907	469,040
Commitments and Contingencies
Members' Equity (19,873,000 units issued and outstanding)	123,835,361	120,421,143
Total Liabilities and Members’ Equity	$ 136,940,318	$ 130,030,383

XML

Commitments, Contingencies, Agreements and Related Party (Details) - USD ($)	3 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Oct. 31, 2019
Related Party Transaction [Line Items]
Total commitments under agreements
Current planned expansion project costs	2,246,355		5,038,278
Investee [Member]
Related Party Transaction [Line Items]
Amount due from RPMG	5,877,000		$ 2,489,000
Construction in Progress [Member]
Related Party Transaction [Line Items]
Costs incurred related to expansion project	23,100,000
Current planned expansion project costs	24,000,000
Remaining commitment	500,000
Construction in Progress [Member] | Subsidiary of Common Parent [Member]
Related Party Transaction [Line Items]
Costs incurred related to expansion project	7,900,000
Ethanol [Member] | Investee [Member]
Related Party Transaction [Line Items]
Sales	45,561,000	$ 34,912,000
Marketing fees	60,000	61,000
Distillers Grains [Member] | Investee [Member]
Related Party Transaction [Line Items]
Sales	9,941,000	9,451,000
Marketing fees	74,000	71,000
Corn Oil [Member] | Investee [Member]
Related Party Transaction [Line Items]
Sales	2,220,000	1,809,000
Marketing fees	$ 20,000	$ 14,000

XML

Fair Value Measurements (Details) - USD ($) $ in Thousands	Jan. 31, 2020	Oct. 31, 2019
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Marketable securities	$ 911	$ 871
Commodity Contract [Member] | Other Current Assets [Member] | Fair Value, Recurring [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Marketable securities	911	871
Derivative Assets	1,220	1,930
Commodity Contract [Member] | Other Current Assets [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Marketable securities		871
Derivative Assets	738	1,650
Commodity Contract [Member] | Other Current Assets [Member] | Fair Value, Recurring [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 Assets	482	280
Commodity Contract [Member] | Other Current Assets [Member] | Fair Value, Recurring [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 Assets	0	0
Commodity Contract [Member] | Liability [Member] | Fair Value, Recurring [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Derivative Liabilities	(581)	(608)
Commodity Contract [Member] | Liability [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Derivative Liabilities	(262)	(80)
Commodity Contract [Member] | Liability [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Derivative Liabilities	(319)	(528)
Commodity Contract [Member] | Liability [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]
Derivative Liabilities	$ 0	$ 0

XML

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Jan. 31, 2020

Accounting Policies [Abstract]

Marketable Securities

The Company recorded interest, dividends and net realized and unrealized gains (losses) from these investments as part of other income as follows:

	Three Months Ended January 31,
	2020		2019
Net earnings on marketable securities	$	8,000	$	201,000
	Marketable Securities
As of	Cost		Fair Market Value
January 31, 2020	$	772,000	$	911,000
October 31, 2019	$	767,000	$	871,000

XML

Investments

3 Months Ended

Jan. 31, 2020

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, 2019		September 30, 2019
Current Assets	$	337,219	$	337,643
Other Assets	254,437		258,655
Current Liabilities	238,144		224,439
Long-term Debt	50,182		55,368
Members’ Equity	303,330		316,491
	Three Months Ended December 31,
Income Statement	2019		2018
Revenue	$	217,042	$	178,823
Gross Profit	23,252		4,216
Net Income (Loss)	21,062		(458		)

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

	Three Months Ended January 31,
Equity in Net Income (Loss)	2020		2019
Absolute Energy	$	477	$	208
Guardian Energy	959		—
Homeland Energy Solutions	525		(166		)
Other	54		119
Total	$	2,015	$	161

XML

Related Party Transactions

3 Months Ended

Jan. 31, 2020

Related Party Transactions [Abstract]

Related Party Transactions

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 and construction companies (see Note 5). The Company also purchased ingredients from RPMG. Purchases from the related parties during the three months ended January 31, 2020 totaled approximately $11,042,000. Purchases from the related parties during the three months ended January 31, 2019 totaled approximately $9,113,000. As of January 31, 2020 and October 31, 2019, the amount owed to related parties was approximately $496,000 and $547,000, respectively (See Note 5).

XML

Related Party Transactions (Details) - Director [Member] - USD ($) $ in Thousands	3 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Oct. 31, 2019
Related Party Transaction [Line Items]
Purchases from related parties	$ 11,042	$ 9,113
Amount owed to related parties	$ 496		$ 547

XML

Risk Management Long Term Purchase Commitments (Details) $ in Thousands	3 Months Ended
	Jan. 31, 2020 USD ($)
Affiliated Entity [Member]
Related Party Transaction [Line Items]
Purchase Obligation	$ 6,696
Fixed Price [Member] | Corn Oil [Member]
Long-term Purchase Commitment [Line Items]
Sale commitments, Amount	1,040
Fixed Price [Member] | Distillers Grains [Member]
Long-term Purchase Commitment [Line Items]
Sale commitments, Amount	3,907
Fixed Price [Member] | Corn [Member]
Long-term Purchase Commitment [Line Items]
Purchase commitments, Amount	5,468
Fixed Price [Member] | Natural Gas [Member]
Long-term Purchase Commitment [Line Items]
Purchase commitments, Amount	7,849
Basis Contract [Member] | Corn [Member]
Long-term Purchase Commitment [Line Items]
Purchase commitments, Amount	$ 14,130
Corn [Member]
Long-term Purchase Commitment [Line Items]
Product usage, percentage, next 12 months	13.00%
Derivative, term of contract	12 months
Ethanol [Member]
Long-term Purchase Commitment [Line Items]
Product usage, percentage, next 12 months	6.00%
Derivative, term of contract	12 months
Natural Gas [Member]
Long-term Purchase Commitment [Line Items]
Product usage, percentage, next 12 months	68.00%
Derivative, term of contract	12 months
Product usage, percentage, next 24 months	28.00%
Long-term purchase commitment, period	24 months

XML

Subsequent Events

3 Months Ended

Jan. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

On February 17, 2020, the board of directors declared a cash distribution of $0.10 per membership unit to the holders of Class A and Class B units of record at the close of business on February 17, 2020, for a total distribution of $1,987,300. The distribution will be recorded in the Company's second quarter financial statements for the 2020 fiscal year and will be paid in March 2020.

XML

Commitments, Contingencies, Agreements and Related Party

3 Months Ended

Jan. 31, 2020

Commitments, Contingencies and Agreements [Abstract]

Commitments, Contingencies, Agreements and Related Party

COMMITMENTS, CONTINGENCIES, AGREEMENTS AND RELATED PARTY

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,
	2020		2019
Sales ethanol	$	45,561,000	$	34,912,000
Sales distiller grains	9,941,000		9,451,000
Sales corn oil	2,220,000		1,809,000
Marketing fees-ethanol	$	60,000	$	61,000
Marketing fees-distiller grains	74,000		71,000
Marketing fees-corn oil	20,000		14,000
As of	January 31, 2020		October 31, 2019
Amount due from RPMG	$	5,877,000	$	2,489,000

The Company entered into multiple construction agreements as part of plans to expand plant capacity and build a new entrance road and administration building. The Company has incurred costs related to the expansion project totaling approximately $23.1 million of which approximately $7.9 million is to a related party. The current planned expansion project costs are estimated at approximately $24.0 million, including remaining commitments of approximately $0.5 million. The project is materially completed including the entrance road and administration building which were materially completed in January 2020. The final phase of the expansion to increase production capacity is currently being reevaluated. No other contracts have been executed.

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Inventory (Tables)

3 Months Ended

Jan. 31, 2020

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory consisted of the following as of January 31, 2020 and October 31, 2019:

	January 31, 2020		October 31, 2019
Raw Materials	$	3,993,021	$	4,259,459
Work in Process	1,820,729		1,877,354
Finished Goods	1,444,644		2,397,545
Totals	$	7,258,394	$	8,534,358

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Summary of Significant Accounting Policies Property and Equipment (Details) - Property, Plant and Equipment [Member]	3 Months Ended
	Jan. 31, 2020
Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives	40 years

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Investments (Tables)

3 Months Ended

Jan. 31, 2020

Investments [Abstract]

Schedule of Equity Method 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, 2019		September 30, 2019
Current Assets	$	337,219	$	337,643
Other Assets	254,437		258,655
Current Liabilities	238,144		224,439
Long-term Debt	50,182		55,368
Members’ Equity	303,330		316,491
	Three Months Ended December 31,
Income Statement	2019		2018
Revenue	$	217,042	$	178,823
Gross Profit	23,252		4,216
Net Income (Loss)	21,062		(458		)

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

	Three Months Ended January 31,
Equity in Net Income (Loss)	2020		2019
Absolute Energy	$	477	$	208
Guardian Energy	959		—
Homeland Energy Solutions	525		(166		)
Other	54		119
Total	$	2,015	$	161

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Summary of Significant Accounting Policies

3 Months Ended

Jan. 31, 2020

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, 2019, contained in the Company's annual report on Form 10-K for 2019.

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 120 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 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 consisted of mutual funds invested in intermediate-term municipal and government bonds. For the periods ended January 31, 2020 and 2019, there was no other-than-temporary impairment recognized. 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. The Company recorded interest, dividends and net realized and unrealized gains (losses) from these investments as part of other income as follows:

	Three Months Ended January 31,
	2020		2019
Net earnings on marketable securities	$	8,000	$	201,000
	Marketable Securities
As of	Cost		Fair Market Value
January 31, 2020	$	772,000	$	911,000
October 31, 2019	$	767,000	$	871,000

Accounts Receivable

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, 2020, for all companies, is based on the investee's results for the three months ended December 31, 2019.

Revenue and Cost Recognition

In the first quarter of 2019, the Company adopted Accounting Standards Update (ASU) 2014-9, Revenue from Contracts with Customers (Topic 606). Under the ASU, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers and with consideration of short-term nature of customer payments, the Company has adopted the practical expedient related to the financing component of the contract. The Company applied the five-step method outlined in the ASU to all contracts with customers and elected the modified retrospective implementation method. The Company generally has a single performance obligation in its arrangements with customers. The Company believes for its contracts with customers, control is transferred at a point in time, typically upon delivery to the customers. When the Company performs shipping and handling activities after the transfer of control to the customers (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. Adopting the practical expedient for contract costs, the Company expenses contract costs when incurred because the amortization period would have been less than one year. The implementation of the new standard does not have any material impact on the measurement or recognition of revenue of prior periods, however additional disclosures have been added in accordance with the ASU.

Revenues from contracts with customers are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. The principal activities which we generate revenue include: sales of ethanol, sales of distiller grains and sales of corn oil.

All revenue recognized in the income statement is considered to be revenue from contracts with customers. The disaggregation of revenue according to product line, along with accounts receivable from contracts with customers, is as disclosed in Note 5.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.

Based upon the timing of the transfer of control of our products to our customers, there are no contract assets or liabilities as of January 31, 2020.

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.

Grant Receivable and Deferred Revenue

Grants receivables are recorded when the payments to be received can be estimated and when payment is reasonably assured. The Company recorded a grant receivable and corresponding deferred revenue of approximately $1,400,000 associated with an agreement approved in December 2019 for tax increment financing monies associated with the plant expansion that was completed in January 2020 to be received over a 10-year period for the tax increment financing monies. These grants were recorded at their net present value using a discount rate of approximately 5%. Related deferred revenue was recorded and is being amortized into income as a reduction of property taxes over the life of the grant. As of January 31, 2020 the grant receivable was approximately $1,400,000 and was included in long-term other assets and the corresponding current and long-term portions of deferred revenue was approximately $1,400,000.

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 earnings (loss) per unit

Basic and diluted earnings (loss) 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 8. 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, 2020, ethanol sales accounted for approximately 79% of total revenue, distiller grains sales accounted for approximately 17% of total revenue and corn oil sales accounted for approximately 4% of total revenue while corn costs averaged approximately 79% 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, and government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities.

Recent Accounting Pronouncements

In February 2016, FASB issued ASU No. 2016-02 "Leases" ("ASU 2016-02"). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. Under the new guidance, lessees are required to recognize the following for all leases (with the exception of short-term leases): (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted cash flow basis; and (2) a "right of use" asset, which is an asset that represents the lessee's right to use the specified asset for the lease term. The Company adopted this accounting standard effective November 1, 2019. Upon adoption, the Company elected a practical expedient which allows existing leases to retain their classification as operating leases. The Company has elected to account for lease and related nonlease components as a single lease component. See Note 6 for more detailed information regarding leases.

In August 2018, FASB issued ASU No. 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the

Disclosure Requirements for Fair Value Measurement" ("ASU 2018-13"). ASU 2018-13 changes some of the disclosure requirements related to fair value measurements related to the Level 1, 2 and 3 investments. ASU 2018-13 is effective for fiscal

years beginning after December 15, 2019, and for interim periods within that fiscal year. The Company is currently evaluating the impact of its pending adoption of the new standard on the financial statement.

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Statements of Operations - USD ($)	3 Months Ended
	Jan. 31, 2020	Jan. 31, 2019
Income Statement [Abstract]
Revenues	$ 57,432,202	$ 46,196,377
Cost of Goods Sold	54,826,337	46,817,643
Gross Profit	2,605,865	(621,266)
Operating Expenses	1,273,962	971,396
Operating Income (Loss)	1,331,903	(1,592,662)
Other Income (Expense)
Other income (expense)	8,447	200,826
Interest income (expense)	58,598	51,668
Equity in net income of investments	2,015,270	160,897
Total Other Income	2,082,315	413,391
Net Income	$ 3,414,218	$ (1,179,271)
Basic & diluted net income per unit (usd per share)	$ 0.17	$ (0.06)
Weighted average units outstanding for the calculation of basic & diluted net income per unit (in shares)	19,873,000	19,873,000
Distribution Per Unit (usd per share)	$ 0.00	$ 0.25

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Lease Obligations - Schedule of Reconciliation of the Undiscounted Future Payments (Details) $ in Thousands	Jan. 31, 2020 USD ($)
Leases [Abstract]
Undiscounted future payments	$ 2,797
Discount effect	(200)
Discounted future payments	$ 2,597

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(Policies)

3 Months Ended

Jan. 31, 2020

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 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 consisted of mutual funds invested in intermediate-term municipal and government bonds. For the periods ended January 31, 2020 and 2019, there was no other-than-temporary impairment recognized. 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. The Company recorded interest, dividends and net realized and unrealized gains (losses) from these investments as part of other income as follows:

	Three Months Ended January 31,
	2020		2019
Net earnings on marketable securities	$	8,000	$	201,000
	Marketable Securities
As of	Cost		Fair Market Value
January 31, 2020	$	772,000	$	911,000
October 31, 2019	$	767,000	$	871,000

Accounts Receivable

Accounts Receivable

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, 2020, for all companies, is based on the investee's results for the three months ended

Revenue and Cost Recognition

Revenue and Cost Recognition

In the first quarter of 2019, the Company adopted Accounting Standards Update (ASU) 2014-9, Revenue from Contracts with Customers (Topic 606). Under the ASU, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers and with consideration of short-term nature of customer payments, the Company has adopted the practical expedient related to the financing component of the contract. The Company applied the five-step method outlined in the ASU to all contracts with customers and elected the modified retrospective implementation method. The Company generally has a single performance obligation in its arrangements with customers. The Company believes for its contracts with customers, control is transferred at a point in time, typically upon delivery to the customers. When the Company performs shipping and handling activities after the transfer of control to the customers (e.g., when control transfers prior to delivery), they are considered as fulfillment activities, and accordingly, the costs are accrued for when the related revenue is recognized. Adopting the practical expedient for contract costs, the Company expenses contract costs when incurred because the amortization period would have been less than one year. The implementation of the new standard does not have any material impact on the measurement or recognition of revenue of prior periods, however additional disclosures have been added in accordance with the ASU.

Revenues from contracts with customers are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. The principal activities which we generate revenue include: sales of ethanol, sales of distiller grains and sales of corn oil.

All revenue recognized in the income statement is considered to be revenue from contracts with customers. The disaggregation of revenue according to product line, along with accounts receivable from contracts with customers, is as disclosed in Note 5.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.

Based upon the timing of the transfer of control of our products to our customers, there are no contract assets or liabilities as of January 31, 2020.

Grant Receivable and Deferred Revenue

Grant Receivable and Deferred Revenue

Grants receivables are recorded when the payments to be received can be estimated and when payment is reasonably assured. The Company recorded a grant receivable and corresponding deferred revenue of approximately $1,400,000 associated with an agreement approved in December 2019 for tax increment financing monies associated with the plant expansion that was completed in January 2020 to be received over a 10-year period for the tax increment financing monies. These grants were recorded at their net present value using a discount rate of approximately 5%. Related deferred revenue was recorded and is being amortized into income as a reduction of property taxes over the life of the grant.

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 loss per unit

Net earnings (loss) per unit

Basic and diluted earnings (loss) 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 8. 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, 2020, ethanol sales accounted for approximately 79% of total revenue, distiller grains sales accounted for approximately 17% of total revenue and corn oil sales accounted for approximately 4% of total revenue while corn costs averaged approximately 79% 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, and government policies and programs. The Company's risk management program is used to protect against the price volatility of these commodities.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2016, FASB issued ASU No. 2016-02 "Leases" ("ASU 2016-02"). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. Under the new guidance, lessees are required to recognize the following for all leases (with the exception of short-term leases): (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted cash flow basis; and (2) a "right of use" asset, which is an asset that represents the lessee's right to use the specified asset for the lease term. The Company adopted this accounting standard effective November 1, 2019. Upon adoption, the Company elected a practical expedient which allows existing leases to retain their classification as operating leases. The Company has elected to account for lease and related nonlease components as a single lease component.

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Fair Value Measurements

3 Months Ended

Jan. 31, 2020

Fair Value Disclosures [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, 2020	$	911,000		$	911,000		$	—		$	—
Assets, October 31, 2019	871,000			871,000			—			—
Derivative financial instruments:
January 31, 2020
Assets	$	1,220,000		$	738,000		$	482,000		$	—
Liabilities	(581,000		)	(262,000		)	(319,000		)	—
October 31, 2019
Assets	$	1,930,000		$	1,650,000		$	280,000		$	—
Liabilities	(608,000		)	(80,000		)	(528,000		)	—

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Inventory (Details) - USD ($)	Jan. 31, 2020	Oct. 31, 2019
Inventory Disclosure [Abstract]
Raw Materials	$ 3,993,021	$ 4,259,459
Work in Process	1,820,729	1,877,354
Finished Goods	1,444,644	2,397,545
Totals	$ 7,258,394	$ 8,534,358

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Risk Management Derivative Instruments - Income Statement (Details) - Not Designated as Hedging Instrument [Member] - Commodity Contract [Member] - USD ($) $ in Thousands	3 Months Ended
	Jan. 31, 2020	Jan. 31, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Realized Gain (Loss)	$ 938	$ 551
Change in Unrealized Gain (Loss)	(683)	(170)
Total Gain (Loss)	255	381
Revenue [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Realized Gain (Loss)	(438)	(34)
Change in Unrealized Gain (Loss)	403	205
Total Gain (Loss)	(35)	171
Cost of Goods Sold [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Realized Gain (Loss)	1,376	585
Change in Unrealized Gain (Loss)	(1,086)	(375)
Total Gain (Loss)	$ 290	$ 210

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Investments (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2018
Balance Sheet
Current Assets			$ 337,219		$ 337,643
Other Assets			254,437		258,655
Current Liabilities			238,144		224,439
Long-term Debt			50,182		55,368
Members’ Equity			303,330		$ 316,491
Income Statement
Revenue			217,042	$ 178,823
Gross Profit			23,252	4,216
Net Income (Loss)	$ 2,015	$ 161	$ 21,062	$ (458)
Absolute Energy [Member]
Income Statement
Net Income (Loss)	477	208
Guardian Energy [Member]
Income Statement
Net Income (Loss)	959	0
Homeland Energy Solutions [Member]
Income Statement
Net Income (Loss)	525	(166)
Other Investee [Member]
Income Statement
Net Income (Loss)	$ 54	$ 119

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Summary of Significant Accounting Policies Concentration Risk (Details)	3 Months Ended
	Jan. 31, 2020
Revenue, Product and Service Benchmark [Member] | Ethanol [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	79.00%
Revenue, Product and Service Benchmark [Member] | Distillers Grains [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	17.00%
Revenue, Product and Service Benchmark [Member] | Corn Oil [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	4.00%
Cost of Goods and Service Benchmark [Member] | Corn [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	79.00%

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Summary of Significant Accounting Policies Production (Details) gal in Millions	3 Months Ended
	Jan. 31, 2020 company gal
Product Information [Line Items]
Number of entities | company	5
Ethanol [Member]
Product Information [Line Items]
Annual production capacity | gal	120

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Risk Management (Tables)

3 Months Ended

Jan. 31, 2020

Risk Management [Abstract]

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

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, 2020 and 2019 and the fair value of derivatives as of January 31, 2020 and October 31, 2019:

	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	$	(438,000	)	$	403,000		$	(35,000	)
three months ended January 31, 2020	Cost of Goods Sold	1,376,000			(1,086,000		)	290,000
	Total	$	938,000		$	(683,000	)	$	255,000
Commodity Contracts for the	Revenue	$	(34,000	)	$	205,000		$	171,000
three months ended January 31, 2019	Cost of Goods Sold	585,000			(375,000		)	210,000
	Total	$	551,000		$	(170,000	)	$	381,000

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

	Balance Sheet Classification	January 31, 2020			October 31, 2019
Futures and option contracts
In gain position		$	1,220,000		$	1,930,000
In loss position		(581,000		)	(608,000		)
Cash held by (due to) broker		404,000			(206,000		)
	Current Asset	$	1,043,000		$	1,116,000

Long-term Purchase Commitment

	Commitments Through	Amount
Sale commitments
Corn Oil - fixed price	February 2020	$	1,040,000
Distiller Grains - fixed price	March 2020	3,907,000
Purchase commitments
Corn - fixed price	October 2020	$	5,468,000
Corn - basis contract	July 2020	14,130,000
Natural gas - fixed price	July 2021	7,849,000

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Lease Obligations - Narrative (Details) - USD ($)	3 Months Ended
	Jan. 31, 2020	Jan. 31, 2019
Leases [Abstract]
Operating lease, term	5 years
Rent expense	$ 354,000
Rent expense		$ 383,000
Operating lease, weighted average remaining lease term	21 months 17 days
Operating lease, discount rate	4.95%
Right of use asset operating leases	$ 2,597,026
Operating lease, liability	$ 2,597,000

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Consolidated Statements of Changes in Members' Equity	USD ($)
Beginning balance at Oct. 31, 2017	$ 127,101,795
Increase (Decrease) in Changes in Members' Equity
Net loss	(1,179,271)
Member distribution	(4,968,250)
Ending balance at Jan. 31, 2018	120,954,274
Beginning balance at Oct. 31, 2019	120,421,143
Increase (Decrease) in Changes in Members' Equity
Net loss	3,414,218
Ending balance at Jan. 31, 2020	$ 123,835,361

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Document and Entity Information Document - shares	3 Months Ended
	Jan. 31, 2020	Mar. 16, 2020
Document and Entity Information [Abstract]
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, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		18,953,000
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Small Business	false

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Bank Financing

3 Months Ended

Jan. 31, 2020

Debt Disclosure [Abstract]

Bank Financing

BANK FINANCING

The Company has entered into a master loan agreement with Farm Credit Services of America (FLCA) which includes revolving term loans with original maximum borrowings of $35 million and which currently has availability of $10 million and matures on September 1, 2020. Interest on the term loan is payable monthly at 3.15% above the one-month LIBOR (4.82% as of January 31, 2020). The borrowings are secured by substantially all the assets of the Company. The credit agreements are subject to covenants, including requiring the Company to maintain various financial ratios, as well as certain distribution limitations. As of January 31, 2020, 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, 2020 and October 31, 2019, the Company had no outstanding borrowings.

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Lease Obligations (Tables)

3 Months Ended

Jan. 31, 2020

Leases [Abstract]

Schedule of Minimum Rental Commitments and Reconciliation of the Undiscounted Future Payments

At January 31, 2020, the Company had the following approximate minimum rental commitments under non-cancelable operating leases for the twelve month period ended January 31:

2021	$	1,152,000
2022	782,000
2023	528,000
2024	268,000
2025	67,000
Total lease commitments	$	2,797,000

A reconciliation of the undiscounted future payments in the schedule above and the lease liabilities recognized in the consolidated balance sheet as of January 31, 2020, is shown below.

Undiscounted future payments	$	2,797,000
Discount effect	(200,000		)
Discounted future payments	$	2,597,000

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Commitments, Contingencies, Agreements and Related Party (Tables)

3 Months Ended

Jan. 31, 2020

Commitments, Contingencies and Agreements [Abstract]

Schedule of Related Party Transactions

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

	Three Months Ended January 31,
	2020		2019
Sales ethanol	$	45,561,000	$	34,912,000
Sales distiller grains	9,941,000		9,451,000
Sales corn oil	2,220,000		1,809,000
Marketing fees-ethanol	$	60,000	$	61,000
Marketing fees-distiller grains	74,000		71,000
Marketing fees-corn oil	20,000		14,000
As of	January 31, 2020		October 31, 2019
Amount due from RPMG	$	5,877,000	$	2,489,000

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Summary of Significant Accounting Policies Marketable Securities (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 31, 2020	Jan. 31, 2019	Oct. 31, 2019
Debt Securities, Available-for-sale [Line Items]
Marketable securities, gain (loss)	$ 8	$ 201
Marketable securities	911		$ 871
Mutual Fund [Member]
Debt Securities, Available-for-sale [Line Items]
Marketable securities	$ 772		$ 767

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Lease Obligations - Schedule of Minimum Rental Commitments (Details) $ in Thousands	Jan. 31, 2020 USD ($)
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2021	$ 1,152
2022	782
2023	528
2024	268
2025	67
Total lease commitments	$ 2,797

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Inventory

3 Months Ended

Jan. 31, 2020

Inventory Disclosure [Abstract]

Inventory

INVENTORY

Inventory consisted of the following as of January 31, 2020 and October 31, 2019:

	January 31, 2020		October 31, 2019
Raw Materials	$	3,993,021	$	4,259,459
Work in Process	1,820,729		1,877,354
Finished Goods	1,444,644		2,397,545
Totals	$	7,258,394	$	8,534,358

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Balance Sheet Parenthetical - shares	Jan. 31, 2020	Oct. 31, 2019
Balance Sheet Parenthetical [Abstract]
Common stock, shares outstanding (in shares)	19,873,000	19,873,000
Common stock, shares outstanding (in shares)	19,873,000	19,873,000

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Lease Obligations

3 Months Ended

Jan. 31, 2020

Leases [Abstract]

Lease Obligations

LEASE OBLIGATIONS

Effective November 1, 2019, the Company adopted ASU 2016-02, Leases (Topic 842). The Company elected the option to apply the transition provisions at the adoption date instead of the earliest comparative period presented in the financial statements. By making this election, the Company has not applied retrospective reporting for prior years. The Company elected the short-term lease exception provided for in the standard and therefore only recognized right-of-use assets and lease liabilities for leases with a term greater than one year. The Company elected the package of practical expedients to not re-evaluate existing contracts as containing a lease or the lease classification unless it was not previously assessed against the lease criteria. In addition, the Company did not reassess initial direct costs for any existing leases.

A lease exists when a contract conveys to a party the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company recognized a lease liability at the lease commencement date, as the present value of future lease payments, using an estimated rate of interest that the Company would pay to borrow equivalent funds on a collateralized basis. A lease asset is recognized based on the lease liability value and adjusted for any prepaid lease payments, initial direct costs, or lease incentive amounts. The lease term at the commencement date includes any renewal options or termination options when it is reasonably certain that the Company will exercise or not exercise those options, respectively.

The Company leases rail cars and rail moving equipment with original terms up to 5 years. The Company is obligated to pay costs of insurance, taxes, repairs and maintenance pursuant to the terms of the leases. These costs are in addition to regular lease payments and are not included in lease expense. Rent expense incurred for the operating leases during the three months ended January 31, 2020 was approximately $354,000, and for the same period in 2019 was approximately $383,000. The lease agreements have maturity dates ranging from May 2020 to May 2024. The weighted average remaining life of the lease term for these leases was 1.80 years as of January 31, 2020.

The discount rate used in determining the lease liability for each individual lease was the Company's estimated incremental borrowing rate of 4.95%. The right-of-use asset operating lease, included in other assets, and operating lease liabilities, included in current and long term liabilities was $2,597,000 as of January 31, 2020.

At January 31, 2020, the Company had the following approximate minimum rental commitments under non-cancelable operating leases for the twelve month period ended January 31:

2021	$	1,152,000
2022	782,000
2023	528,000
2024	268,000
2025	67,000
Total lease commitments	$	2,797,000

A reconciliation of the undiscounted future payments in the schedule above and the lease liabilities recognized in the consolidated balance sheet as of January 31, 2020, is shown below.

Undiscounted future payments	$	2,797,000
Discount effect	(200,000		)
Discounted future payments	$	2,597,000

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Risk Management

3 Months Ended

Jan. 31, 2020

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, 2020 and 2019 and the fair value of derivatives as of January 31, 2020 and October 31, 2019:

	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	$	(438,000	)	$	403,000		$	(35,000	)
three months ended January 31, 2020	Cost of Goods Sold	1,376,000			(1,086,000		)	290,000
	Total	$	938,000		$	(683,000	)	$	255,000
Commodity Contracts for the	Revenue	$	(34,000	)	$	205,000		$	171,000
three months ended January 31, 2019	Cost of Goods Sold	585,000			(375,000		)	210,000
	Total	$	551,000		$	(170,000	)	$	381,000

	Balance Sheet Classification	January 31, 2020			October 31, 2019
Futures and option contracts
In gain position		$	1,220,000		$	1,930,000
In loss position		(581,000		)	(608,000		)
Cash held by (due to) broker		404,000			(206,000		)
	Current Asset	$	1,043,000		$	1,116,000

As of January 31, 2020, the Company had the following approximate outstanding purchase and sale commitments, of which all sales commitments and approximately $6,696,000 of the purchase commitments were with related parties.

	Commitments Through	Amount
Sale commitments
Corn Oil - fixed price	February 2020	$	1,040,000
Distiller Grains - fixed price	March 2020	3,907,000
Purchase commitments
Corn - fixed price	October 2020	$	5,468,000
Corn - basis contract	July 2020	14,130,000
Natural gas - fixed price	July 2021	7,849,000

As of January 31, 2020, the Company has fixed price futures and forward contracts in place for approximately 13% of its anticipated corn needs and 6% of its ethanol sales for the next 12 months with no open positions beyond that period. As of January 31, 2020, the Company has fixed price futures and forward contracts in place for approximately 68% of its natural gas needs for the next 12 months and approximately 28% of its natural gas needs for the next 24 months with no open positions beyond that period.

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Subsequent Events (Details) - Subsequent Event [Member]	Feb. 17, 2020 USD ($) $ / shares
Subsequent Event [Line Items]
Cash distribution (in dollars per share) | $ / shares	$ 0.10
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Declared | $	$ 1,987,300

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Bank Financing Long Term Debt (Details) - Farm Credit Services of America [Member] - USD ($)	Jan. 31, 2020	Oct. 31, 2019
Debt Instrument [Line Items]
Original maximum borrowings	$ 35,000,000
Availability	$ 10,000,000
Stated interest rate	3.15%
Effective interest rate	4.82%
Outstanding borrowings	$ 0	$ 0

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Risk Management Derivative Instruments - Balance Sheet Location (Details) - USD ($)	Jan. 31, 2020	Oct. 31, 2019
Derivatives, Fair Value [Line Items]
Derivative instruments	$ 1,042,947	$ 1,115,525
Fair Value, Recurring [Member] | Commodity Contract [Member] | Other Noncurrent Assets [Member]
Derivatives, Fair Value [Line Items]
Futures and option contracts	1,220,000	1,930,000
Fair Value, Recurring [Member] | Commodity Contract [Member] | Other Noncurrent Liabilities [Member]
Derivatives, Fair Value [Line Items]
Futures and option contracts	581,000	608,000
Fair Value, Recurring [Member] | Commodity Contract [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Cash held by (due to) broker	404,000	(206,000)
Derivative instruments	$ 1,043,000	$ 1,116,000