February 20, 2007


By facsimile to (515) 323-8509 and U.S. Mail


Mr. Brian D. Kletscher
Chairman and President
Highwater Ethanol, LLC
205 South Main Street, P.O. Box 96
Lamberton, MN 56152

Re:	Highwater Ethanol, LLC
	Pre-effective Amendment 2 to Registration Statement on Form
SB-2
	Filed February 7, 2007
File No. 333-137482

Dear Mr. Kletscher:

	We reviewed the filing and have the comments below.

General

1. Provide updated financial statements and related disclosures,
as
necessary, to comply with Item 310(g) of Regulation S-B.

2. Please include information regarding the terms of the
promissory
note and security interest you will take in subscribers` other
units
in the filing.  We note that you have provided this information
supplementally in response to prior comment 5.

Prospectus` Outside Front Cover Page

3. Limit the prospectus` outside front cover page to one page.
See
Item 501(a) of Regulation S-B.  Please revise to include only the
information that is required by Item 501, SEC Release 33-6900 and
Guide 5, including, for example, only the most significant risk
factors on the prospectus` outside front cover page.  In this
regard,
there are several risks that attend an investment in an LLC, such
as
the fact that investors may not receive any cash distributions
even
though they may incur tax liabilities, that appear to be
significant
but are not enumerated.  Similarly, while you state that
investments
will be in "illiquid securities," it is not made clear that the
units
are actually subject to restrictions on transfer.  Several other
items do not clearly express a risk and could be eliminated or
revised.  You could also safely eliminate your statements about
the
cost to complete the project and your board`s reservation of its
right to change the location of the plant site.  This information
may
be better placed in the body of your prospectus.

We will depend on Fagen, Inc. and ICM, Inc. to design our ethanol
plant..., page 19

4. We note the disclosure on page 33 and elsewhere in the
registration statement that Highwater Ethanol`s design-build
agreement with Fagen terminates on March 26, 2007 unless a valid
notice to proceed has been accepted by Fagen.  If notice has not
yet
been accepted by Fagen, this seems to be a material risk that you
should discuss.  Please revise as necessary.

The plant site may have unknown environmental problems...which may
delay or halt plant construction and delay our ability to generate
revenue, page 20

5. We note the disclosures on pages 33-34 and elsewhere in the
registration statement that one of the two remaining options to
purchase land expires on March 31, 2007 and one of the two
remaining
options to purchase land expires on December 31, 2008.  If the
impending expiration of either or both of these options presents a
material risk, please discuss this as a risk factor.

6. The environmental matters you discuss in this risk factor do
not
seem to present a current material risk, as you state that you
have
no reason to believe that there is a material risk of
environmental
problems.  You are not required to discuss any possible risk, no
matter how remote.  Instead, focus readers` attention on risks
that
are material.   Please revise this risk to explain how it is
currently material, or remove it.

Federal Income Tax Consequences of Owning Our Units, page 82

7. We note the disclosure you have revised in response to prior
comments 8 and 9.  Please remove statements that suggest that
investors can not rely on counsel`s opinion, or that counsel does
not
have any liability for its opinion to the investors.  For example,
in
several places, you state that the opinion is "not a guarantee of"
and "does not assure" tax consequences.  While this may be true,
this
language suggests that investors might not be able to rely on the
opinion.  Note that we will not object to your statement that the
opinion is not binding on the Internal Revenue Service.

8. Please revise the reference in the third paragraph to "our
taxation of investors", since the company is not taxing investors.

9. Please revise the reference the discussion being "an expression
of
our tax counsel`s professional judgment" and clarify that it is
counsel`s opinion.

10. Since the word "generally" may imply that investors cannot
rely
on the disclosures, please delete the word "generally" throughout
this discussion, including:

* The second sentence under "Passive Loss Rules."

* The second sentence under "Passive Activity Income."

* The first sentence under "Allocation of Income and Losses."

Exhibit Index

11. Refer to prior comment 11.  The disclosure in the exhibit
index
should conform to the disclosure included in Item 27 of Form SB-2.
Thus, as requested previously, for exhibits filed previously,
indicate by footnote or otherwise also in the exhibit index that
the
exhibits have been filed previously.

Exhibit 5.1

12. Although you represent that you revised the form of legal
opinion
in response to prior comment 14, you did not do so.  As noted
previously, counsel must consent also to being named under "Legal
Matters" in the registration statement.  Please revise exhibit 5.1
to
include counsel`s consent.  Alternatively, file counsel`s consent
as
a separate exhibit to the registration statement.

Exhibit 10.9

13. It does not appear that you filed the proposal from Earth Tech
Consulting, Inc. as an exhibit to the registration statement in
response to prior comment 15.  Exhibit 10.17 is only a cover
letter
for the proposal, which is not attached.

Other

14. Refer to prior comment 16.  As noted previously, you did not
mark
all changed materials in pre-effective amendment 1 to the
registration statement as required by Rule 310 of Regulation S-T.
Further, you have not marked all changed materials in pre-
effective
amendment 2 to the registration statement as required by Rule 310
of
Regulation S-T.  For example, refer to "Subscription Procedures"
and
Escrow Procedures" under "The Offering" in the prospectus` summary
section that were not marked in either pre-effective amendment to
the
registration statement.  Please comply with the rule`s
requirements
in future filings.

Closing

	File an amendment to the registration statement in response
to
the comments.  To expedite our review, Highwater Ethanol may wish
to
provide us three marked courtesy copies of the amendment.  Include
with the filing any supplemental information requested and a cover
letter tagged as correspondence that keys the responses to the
comments.  If Highwater Ethanol thinks that compliance with any of
the comments is inappropriate, provide the basis in the letter.
We
may have additional comments after review of the amendment, the
responses to the comments, and any supplemental information.

	We urge all persons responsible for the accuracy and adequacy
of
the disclosure in the registration statement reviewed by us to
ensure
that they have provided all information investors require for an
informed decision.  Since Highwater Ethanol and its management are
in
possession of all facts relating to the disclosure in the
registration statement, they are responsible for the adequacy and
accuracy of the disclosures that they have made.

      If Highwater Ethanol requests acceleration of the
registration
statement`s effectiveness, Highwater Ethanol should furnish a
letter
at the time of the request, acknowledging that:

* Should the Commission or the staff acting by delegated authority
declare the registration statement effective, it does not
foreclose
the Commission from taking any action on the filing.

* The action of the Commission or the staff acting by delegated
authority in declaring the registration statement effective does
not
relieve Highwater Ethanol from its full responsibility for the
adequacy and accuracy of the registration statement`s disclosures.

* Highwater Ethanol may not assert our comments or the declaration
of
the registration statement`s effectiveness as a defense in any
proceedings initiated by the Commission or any person under the
United States` federal securities laws.

	The Commission`s Division of Enforcement has access to all
information that Highwater Ethanol provides us in our review of
the
registration statement or in response to our comments on the
registration statement.

	We will consider a written request for acceleration of the
registration statement`s effectiveness under Rule 461 of
Regulation C
under the Securities Act as confirmation that those requesting
acceleration are aware of their responsibilities under the
Securities
Act and the Exchange Act as they relate to the proposed public
offering of the securities specified in the registration
statement.
We will act on the request and by delegated authority grant
acceleration of the registration statement`s effectiveness.

	You may direct questions on accounting comments to Bret A.
Johnson, Staff Accountant, at (202) 551-3753 or W. John Cash,
Accounting Branch Chief, at (202) 551-3768.  You may direct
questions
on other comments and disclosure issues to Edward M. Kelly, Senior
Counsel, at (202) 551- 3728 or me at (202) 551-3760.

Very truly yours,





Pamela A. Long
  Assistant Director

cc:	Harold N. Schneebeck, Esq.
	Judd W. Vande Voort, Esq.
	Brown, Winick, Graves, Gross, Baskerville & Schoenebaum,
P.L.C.
	666 Grand Avenue, Suite 2000
	Des Moines, IA 50309-2510



Mr. Brian D. Kletscher
February 20, 2007
Page 1








UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010

         DIVISION OF
CORPORATION FINANCE