10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
Form 10-K
(Mark one)
ý	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended September 30, 2019
o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from _________ to __________
		Commission file number 000-53041
SOUTHWEST IOWA RENEWABLE ENERGY, LLC
(Exact name of registrant as specified in its charter)
Iowa			20-2735046
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
10868 189 th Street, Council Bluffs, Iowa			51503
(Address of principal executive offices)			(Zip Code)
Registrant’s telephone number (712) 366-0392
Securities registered under Section 12(b) of the Exchange Act:			None.
Title of each class			Name of each exchange on which registered
Securities registered under Section 12(g) of the Exchange Act:
Series A Membership Units
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o     No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.  Yes o     No x
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the 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.  Yes x  No o
Indicate by check mark whether the registrant has submitted electronically on its corporate Website 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). Yes x     No o
Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   x

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

Large accelerated filer  o       Accelerated filer o       Non-accelerated filer o        Smaller reporting company x 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).  Yes o     No x

As of March 31, 2019, the aggregate market value of the Membership Units held by non-affiliates (computed by reference to the last price at which the Membership Units were sold) was $44,668,200.

As of September 30, 2019, the Company had 8,993 Series A, 3,334 Series B and 1,000 Series C Membership Units outstanding.

DOCUMENTS INCORPORATED BY REFERENCE—None

PART I		1
Item 1.	Business	1
Item 1A.	Risk Factors	16
Item 2.	Properties	26
Item 3.	Legal Proceedings	26
Item 4.	Mine Safety Disclosures	26
PART II		26
Item 5.	Market for Registrant’s Common Equity, Related Member Matters, and Issuer Purchases of Equity Securities	26
Item 6.	Selected Financial Data	27
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	29
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	35
Item 8.	Financial Statements and Supplementary Data	35
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	55
Item 9A.	Controls and Procedures	55
Item 9B.	Other Information	56
PART III		56
Item 10.	Directors, Executive Officers and Corporate Governance	56
Item 11.	Executive Compensation	56
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Member Matters	56
Item 13.	Certain Relationships and Related Transactions, and Director Independence	56
Item 14.	Principal Accountant Fees and Services.	56
PART IV		56
Item 15.	Exhibits and Financial Statement Schedules	56
SIGNATURES		60

PART I

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K of Southwest Iowa Renewable Energy, LLC (the “Company,” “we,” or “us”) contains historical information, as well as forward-looking statements that involve known and unknown risks and relate to future events, our future financial performance, or our expected future operations and actions.  In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “future,” “intend,” “could,” “hope,”  “predict,” “target,” “potential,” or “continue” or the negative of these terms or other similar expressions.  These forward-looking statements are only our predictions based on current information and involve numerous assumptions, risks and uncertainties.  Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the reasons described in this report.  While it is impossible to identify all such factors, factors that could cause actual results to differ materially from those estimated by us include:

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

• Negative impacts resulting from the reduction in the renewable fuel volume requirements under the Renewable Fuel Standard issued by the Environmental Protection Agency;

• Our inability to comply with our credit agreements required to continue our operations;

• Negative impacts that our hedging activities may have on our operations;

• Decreases in the market prices of ethanol and distillers grains;

• Ethanol supply exceeding demand and corresponding ethanol price reductions;

• Changes in the environmental regulations that apply to our plant operations;

• 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 in other federal or state laws and regulations relating to the production and use of ethanol;

• Changes and advances in ethanol production technology;

• Competition from larger producers as well as competition from alternative fuel additives;

• Changes in interest rates and lending conditions of our loan covenants;

• Volatile commodity and financial markets;

• Decreases in export demand due to the imposition of duties and tariffs by foreign governments on ethanol and distillers grains produced in the United States; and

• Trade actions by the Trump Administration, particularly those affecting the biofuels and agriculture sectors and related industries.

These forward-looking statements are based on management’s estimates, projections and assumptions as of the date hereof and include various assumptions that underlie such statements.  Any expectations based on these forward-looking statements are subject to risks and uncertainties and other important factors, including those discussed below and in the section titled “Risk Factors.” Other risks and uncertainties are disclosed in our prior Securities and Exchange Commission (“SEC”) filings. These and many other factors could affect our future financial condition and operating results and could cause actual results to differ materially from expectations set forth in the forward-looking statements made in this document or elsewhere by Company or on its behalf.  We undertake no obligation to revise or update any forward-looking statements.  The forward-looking statements contained in this Form 10-K are included in the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended (the “1933 Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Item 1.   Business.

The Company is an Iowa limited liability company located in Council Bluffs, Iowa, formed in March, 2005. The Company is permitted to produce 140 million gallons of ethanol.  We began producing ethanol in February, 2009 and sell our ethanol, distillers grains, and corn oil in the United States, Mexico and the Pacific Rim.  

Our production facility (the “Facility”) is located in Pottawattamie County in southwestern Iowa, south of Council Bluffs. It is near two major interstate highways, I-29 and I-80, within a mile of the Missouri River and has access to five major rail carriers. This location is in close proximity to a significant amount of corn and has convenient product market access. The Facility receives corn and chemical deliveries primarily by truck and is able to utilize rail delivery if necessary.  Finished products are shipped by

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rail and truck.  The site has access to water from ground wells and from the Missouri River.  Additionally, in close proximity to the Facility’s primary energy source (steam), there are two natural gas providers available, both with infrastructure immediately accessible to the Facility.

Financial Information

Please refer to “Item 7-Management’s Discussion and Analysis of Financial Condition and Results of Operations” for information about our revenue, profit and loss measurements and total assets and liabilities, and “Item 8 – Financial Statements and Supplementary Data” for our financial statements and supplementary data.

Rail Access

We own a six mile loop railroad track for rail service to our Facility, which accommodates several unit trains.  We are party to an Industrial Track Agreement with CBEC Railway, Inc. (the “Track Agreement “), which governs our use of the loop railroad and requires, among other things, that we maintain the loop track.

On March 24, 2019 the Company entered into an amendment to the Amended and Restated Railcar Lease Agreement (“Railcar Agreement”) with Bunge North America, Inc. (“Bunge”), a related party, for the lease of 323 ethanol cars and 111 hopper cars which are used for the delivery and marketing of our ethanol and distillers grains.  Under the Railcar Agreement, the original DOT111 tank cars are leased over a four year term from March 24, 2019 to April 30, 2023, with the ability to start returning cars after January 1, 2023 to conform to the requirement for DOT117 tank cars with enhanced safety specifications which is scheduled to be effective in May 2023. The 111 hopper cars are leased over a three year term running from March 24, 2019 to March 31, 2022 which term will continue on a month-to-month basis thereafter. The amendments to the Railcar Agreement lowered the cost for the leases by approximately 25% as compared to the prior lease terms. Pursuant to the terms of a side letter to the Railcar Agreement, we sublease cars back to Bunge from time to time when the cars are not in use in our operations. We work with Bunge to determine the most economic use of the available ethanol and hopper cars in light of current market conditions. In June 2017, we also entered into a second 36 month lease for an additional 30 non-insulated tank cars from an unrelated third party leasing company (this was in addition to the 30 non-insulated tank cars leased from that company signed December 2015).

Employees

We had 62 full time employees, as of September 30, 2019.  We are not subject to any collective bargaining agreements and we have not experienced any work stoppages.  Our management considers our employee relationships to be favorable.

Principal Products

The principal products we produce are ethanol, distillers grains, corn oil, and carbon dioxide ("CO2").

Ethanol

Our primary product is ethanol. Ethanol is ethyl alcohol, a fuel component made primarily from corn and various other grains, which can be used as: (i) an octane enhancer in fuels; (ii) an oxygenated fuel additive for the purpose of reducing ozone and carbon monoxide vehicle emissions; and (iii) a non-petroleum-based gasoline substitute.  More than 99% of all ethanol produced in the United States is used in its primary form for blending with unleaded gasoline and other fuel products.  The principal purchasers of ethanol are generally wholesale gasoline marketers or blenders.  Ethanol is shipped by truck in the local markets, and by rail in the regional, national and international markets.

We produced 129.3 million and 127.9 million gallons of ethanol for the fiscal years ended September 30, 2019 ("Fiscal 2019") and September 30, 2018 (“Fiscal 2018”), respectively, and approximately 75.4% and 77.9% of our revenue was derived from the sale of ethanol in Fiscal 2019 and Fiscal 2018, respectively.

Distillers Grain

 The principal co-product of the ethanol production process is distillers grains, a high protein, high-energy animal feed marketed primarily to the beef and dairy industries.  Distillers grains contain by-pass protein that is superior to other protein supplements such as cottonseed meal and soybean meal.  We produce two forms of distillers grains: wet distillers grains with solubles (“WDGS”) and dried distillers grains with solubles (“DDGS”).  WDGS are processed corn mash that has been dried to approximately 50% to 65% moisture.  WDGS have a shelf life of approximately seven days and are sold to local markets.  DDGS are processed corn mash that has been dried to approximately 10% to 12% moisture.  It has a longer shelf life and may be sold and shipped to any market.

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In Fiscal 2019, we sold 0.6% more tons of distillers grains compared to Fiscal 2018. Approximately 19.0% and 17.2% of our revenue was derived from the sale of distillers grains in Fiscal 2019 and Fiscal 2018, respectively.

Syrup sales constitute 0.2% of our revenue in Fiscal 2019 and Fiscal 2018 , respectively.

Corn Oil

Our system separates corn oil from the post-fermentation syrup stream as it leaves the evaporators of the ethanol plant. The corn oil is then routed to storage tanks, and the remaining concentrated syrup is routed to the plant’s syrup tank. Corn oil can be marketed as either a feed additive or a biodiesel feedstock.  We sold 10.8% more tons of corn oil in Fiscal 2019 than in Fiscal 2018, with approximately 5.1% and 4.4% of our revenue generated from corn oil sales, respectively.

Carbon Dioxide

In April 2013, we entered into a Carbon Dioxide Purchase and Sale Agreement (the “CO2 Agreement”) with Air Products and Chemicals, Inc., formerly known as EPCO Carbon Dioxide Products, Inc. ("Air Products") under which we agreed to supply, and Air Products agreed to purchase, a portion of raw CO2 gas produced by our Facility. In addition, we entered into a Non-Exclusive CO2 Facility Site Lease Agreement under which we granted Air Products a non-exclusive right of entry and license to construct, maintain and operate a carbon dioxide liquefaction plant (the “CO2 Plant”) on a site near our Facility. The term of the CO2 Agreement runs for ten (10) years from the startup of the CO2 Plant (the “Initial Term”) and then renews automatically for two (2) additional five (5) year periods thereafter, unless written notice of termination is submitted within six (6) months prior to the end of the then current term.

Air Products pays us a base price per ton, which acts as a floor price, Air Products will pay us an additional amount based on Air Products profits above a minimum targeted margin. The CO2 Agreement also contains a take or pay obligation pursuant to which Air Products agrees to pay us for a minimum number of tons each year. CO2 was 0.3% of our revenue in both years for Fiscal 2019 and Fiscal 2018.

Principal Product Markets

As described below in “Distribution Methods,” we market and distribute all of our ethanol and distillers grains through Bunge.  Our ethanol, distillers grains and corn oil are primarily sold in the domestic market; however, as markets allow, our products can be, and have been, sold in the export markets. We expect Bunge to explore all markets for our ethanol and distillers grains, including export markets, and believe that there is some potential for increased international sales of our products. However, due to high transportation costs, and the fact that we are not located near a major international shipping port, we expect a majority of our products to continue to be marketed and sold domestically.

According to the U.S. Energy Information Administration (the "EIA"), in the first seven months of 2019, ethanol exports decreased 16% as compared to the first seven months of 2018. Although Brazil continues to import the largest percentage of ethanol produced in the United States, tariffs implemented by Brazil on U.S. ethanol imports have significantly reduced Brazilian demand. Canada represents the second largest export destination for U.S. ethanol with India in third place. Exports of U.S. ethanol to these three countries constitute almost 60% of all U.S. ethanol exports. South Korea and the Philippines represent the remaining countries in the top 5 for destinations for U.S. ethanol exports in the first seven months of 2019.

Although Brazil remained the largest export destination for U.S. ethanol, Brazilian demand fell from 32% of domestic ethanol exports in 2018 to 26% in 2019. Ethanol exports to Brazil continue to be impacted by the 20% tariff on U.S. ethanol imports in excess of 150 million liters, or 39.6 million gallons per quarter, imposed in September 2017 by Brazil’s Chamber of Foreign Trade (CAMEX). A rise in crude oil prices and the domestic price of high gasoline blends in Brazil has made ethanol importation economic even after paying the tariff. It remains to be seen if Brazil’s CAMEX will raise tariffs further in response, especially as new corn ethanol plants come on line in Brazil.

Similar to Brazil, tariffs implemented by China on U.S. ethanol has essentially eliminated China as an export market for U.S. ethanol. China was included in the top export markets during the first half of 2018; however, approximately 99% of the exports to China occurred in the first three months of 2018 and since then, U.S. ethanol exports to China have been reduced to zero due to increased tariffs. There is also potential for the imposition of tariffs by other countries in addition to Brazil and China due to trade disputes with the United States which could reduce the overall export demand and therefore could have a negative impact on ethanol prices. On December 13, 2019, the U.S. and China announced an agreement to the first phase of a trade deal (the "Phase One Agreement")where China agreed to purchase billions of dollars in agricultural products in exchange for the U.S. agreeing not to pursue a new round of tariffs starting January 2020. The impact on the ethanol market cannot be determined at this time.

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Ethanol export demand is more unpredictable than domestic demand, and tends to fluctuate over time as it is subject to monetary and political forces in other nations. For instance, a strong U.S. Dollar is an example of a force that may negatively impact ethanol exports from the United States. In addition, the Chinese and Brazil tariffs have had, and likely will continue to have, a negative impact on the export market demand and prices for ethanol produced in the United States.

Distillers grains have become more accepted as animal feed throughout the world and therefore, distillers grains exports have increased and may continue to increase as worldwide acceptance grows. However, according to the U.S. Grains Council (the "USGC"), U.S. distillers grains annual exports through August 31, 2019 were approximately 7% lower than distillers grains exports for the same nine-month period last year with Mexico, South Korea, Vietnam, Indonesia, and Canada accounting for 56% of total U.S. distillers grains export volumes.

Historically, the United States ethanol industry exported a significant amount of distillers grains to China; however, exports to China have significantly decreased as a result of the Chinese antidumping and countervailing investigations and the implementation of significant duties on importing into China distillers grains produced in the United States. The imposition of these duties resulted in materially decreased demand from China requiring U.S. producers to seek out alternative export markets, including Mexico, Canada and Vietnam. In 2017, the Minister of Agriculture and Rural Development of Vietnam lifted the suspension which blocked imports of U.S. dried distiller’s grains which had been in place since December 2016. As a result, Vietnam became the fourth largest U.S. market export in the twelve month period ending August 2018 and was the third largest importer of U.S. DDGS in the first 8 months of 2019. The lift of this suspension resulted in increased exports to Vietnam; however, there is no guarantee that the Vietnamese export market will sustain this growth. In addition, recent trade disputes with other countries have created additional uncertainty as to future export demand for U.S. distillers grains. On December 13, 2019, the U.S. and China announced the Phase One Agreement where China agreed to purchase billions of dollars in agricultural products in exchange for the U.S. agreeing not to pursue a new round of tariffs starting January 2020. The impact on the distillers grain market cannot be determined at this time.

We market and distribute all of the corn oil we produce directly to end users or middlemen within the domestic market. The corn oil that we produce is not food grade corn oil and therefore cannot be used for human consumption. However, corn oil can be used as the feedstock to produce biodiesel, as a feed ingredient and has other industrial uses.

We sell carbon dioxide directly to Air Products and we market and distribute all of the corn oil we produce directly to buyers in the domestic market.

Distribution Methods

On December 5, 2014, the Company entered into an Amended and Restated Ethanol Purchase Agreement with Bunge which was further amended and restated on October 23, 2017 to include specific provisions for loading and shipment of ethanol by truck (the “Ethanol Agreement”). Under the Ethanol Agreement, the Company has agreed to sell Bunge all of the ethanol produced by the Company, and Bunge has agreed to purchase the same.  The Company pays Bunge a percentage fee for ethanol sold by Bunge, subject to a minimum and maximum annual fee.  The initial term of the Ethanol Agreement expires on December 31, 2019, but will automatically renew for one five-year term unless terminated by the parties in accordance with the terms of the agreement.

We entered into a Distillers Grain Purchase Agreement, as amended (“DG Agreement”) with Bunge, under which Bunge is obligated to purchase from us and we are obligated to sell to Bunge all distillers grains produced at our Facility.

The initial term of the DG Agreement runs until December 31, 2019, and will automatically renew for one additional five year term unless terminated by the parties in accordance with the terms of the agreement.  Under the DG Agreement, Bunge pays us a purchase price equal to the sales price minus the marketing fee and transportation costs.  The sales price is the price received by Bunge in a contract consistent with the DG Marketing Policy or the spot price agreed to between Bunge and the Company. Bunge receives a marketing fee consisting of a percentage of the net sales price, subject to a minimum and maximum amount. Net sales price is the sales price less the transportation costs and rail lease charges.  The transportation costs are all freight charges, fuel surcharges, and other access charges applicable to delivery of distillers grains.  Rail lease charges are the monthly lease payment for rail cars along with all administrative and tax filing fees for such leased rail cars.

We market and distribute all of the corn oil we produce directly to buyers within the domestic market.

Raw Materials

Corn Requirements

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The principal raw material necessary to produce ethanol, distillers grain and corn oil is corn. We are significantly dependent on the availability and price of corn which are affected by supply and demand factors such as crop production, carryout, exports, government policies and programs, risk management and weather.  With the volatility of the weather and commodity markets, we cannot predict the future price of corn. Because the market price of ethanol is not directly related to corn prices, we, like most ethanol producers, are not able to compensate for increases in the cost of corn through adjustments in our prices for our ethanol although we do see increases in the prices of our distillers grain during times of higher corn prices. However, given that ethanol sales comprise a majority of our revenues, our inability to adjust our ethanol prices can result in a negative impact on our profitability during periods of high corn prices.

High corn prices have a negative effect on our operating margins unless the price of ethanol and distillers grains out paces rising corn prices. During Fiscal 2019, corn prices were higher compared to Fiscal 2018 due primarily to concerns that the size of the 2019/20 crop would be negatively affected by substandard spring planting conditions resulting from wet weather and flooding in the upper Midwest. In November 2019, the United States Department of Agriculture (the “USDA”) revised their estimates for the 2019/2020 corn production to decrease its forecast to 13.7 million bushels which is down approximately 0.9% from the October forecast and 5% from 2018/2019 crop production. Based on November 1 conditions, the USDA forecasts average corn yields at 167 bushels per acre which is down slightly from the October forecast. The USDA forecast for area harvested for corn remains at 81.8 million acres which is an increase of 0.1% as compared to the prior year.

Our management expects that corn prices will continue to increase slightly through the first two quarters of our fiscal year ended September 30, 2020 (“Fiscal 2020”) as a result of the lower levels of production and yield forecasted by the USDA, as well as carryover levels from the prior year. However, if corn prices rise more than expected, it will have an adverse impact on our operating margins unless the prices we receive for our ethanol and distillers grains are able to outpace the rising corn prices. Management continually monitors corn prices and the availability of corn near the Facility and also continually attempts to minimize the effects of the volatility of corn costs on profitability through its risk management strategies, including hedging positions taken in the corn market.

    Our Facility needs approximately 48.3 million bushels of corn annually, to produce 140 million gallons of ethanol, or approximately 132,300 bushels per day.  During Fiscal 2019 we purchased 2.2% more corn compared to Fiscal 2018, which was obtained entirely from local markets.  The Company and Bunge are also parties to an Amended and Restated Grain Feedstock Agency Agreement (the “Agency Agreement”).  The Agency Agreement provides that Bunge will procure corn for the Company and the Company will pay Bunge a per bushel fee, subject to a minimum and maximum annual fee.  The initial term of the Agency Agreement expires on December 31, 2019 and will automatically renew for one additional five year term unless terminated by the parties in accordance with the terms of the agreement.

Starting with the 2015 crop year, the Company began using corn containing Syngenta Seeds, Inc.’s proprietary Enogen® technology (“Enogen Corn”) for a portion of its ethanol production needs. The Company contracted directly with growers to produce Enogen Corn for sale to the Company. Consistent with our Agency Agreement with Bunge, we also entered into a Services Agreement with Bunge regarding corn purchases (the “ Services Agreement ”). Under this Services Agreement, we originate all Enogen Corn contracts for our Facility and Bunge assists us with certain administrative matters related to Enogen Corn, including facilitating delivery to our Facility. Fiscal year 2019 Enogen Corn deliveries constituted 12.6% of all corn deliveries, a decrease from Fiscal 2018's level of 13.4%.

Energy Requirements

The production of ethanol is an energy intensive process which uses significant amounts of electricity and steam or natural gas as a heat source.  Presently, about 23,000 MMBTUs of energy are required to produce a gallon of ethanol.  It is our goal to operate the plant as safely and profitably as possible, optimizing the amount of energy consumed per gallon of ethanol produced, balanced with the relative values of WDGS as compared to DDGS.  

In September 2019, the Company went on line with the Whitefox Integrated Cartridge Efficiency (ICE) system to push towards more efficient operations in our plant. This technology benefits the plant through energy reduction, purity flexibility and debottlenecking of the distillation and dehydration processes. Energy efficiency is expected to improve by over 1,000 BTU's per gallon of ethanol produced, which results in steam savings and carbon emission reductions.

Steam

Unlike most ethanol producers in the United States which use natural gas as their primary energy source, we have access to steam as a one of our energy sources in addition to natural gas. Historically, we have changed between steam and natural gas

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depending on energy costs and other factors.  We believe our ability to utilize steam makes us more competitive, as under certain energy market conditions our energy costs will be lower than natural gas fired plants.  We have entered into a Steam Service Contract (“Steam Contract”) with MidAmerican Energy Company (“MidAm”), under which MidAm provides us the steam required by us, up to 475,000 pounds per hour.  The Steam Contract links our net energy rates and charges for steam to certain specified energy indexes, subject to certain minimum and maximum rates, so that our steam costs remain competitive with the general energy market. The Steam Contract expires in November 2024. During Fiscal 2019, we purchased approximately 20.5% more steam compared to Fiscal 2018. The increase in Fiscal 2019 was due to a contractual obligation specified in our contract with MidAm and their plant availability. The price for steam increased 11.0% in Fiscal 2019 as compared to Fiscal 2018. Steam availability from MidAm continues to be volatile as a result of MidAm’s increased utilization of wind energy, rather than coal, since Fiscal 2017.

Natural Gas

Although steam has traditionally been considered our primary energy source, natural gas accounted for approximately 44.8% of our energy usage in Fiscal 2019, compared to 60.5% in Fiscal 2018. The decrease in our natural gas usage was due to increased steam availability and obligations specified in our contract with MidAm. We have two natural gas boilers for use when our steam service is temporarily unavailable. Natural gas is also needed for incidental purposes.  We entered into a natural gas supply agreement with Encore Energy in April of 2012 to fulfill our natural gas needs at the Gas Daily Midpoint pricing.  

Electricity

Our Facility requires a large continuous supply of electrical energy.  In Fiscal 2019 we used approximately 2.2% more electricity compared to Fiscal 2018. This was primarily due to slightly higher production levels during 2019 as compared to 2018.

Water

We require a supply of water typical for the industry for our production process.  Our primary water source comes from the underground Missouri River aquifer via our three onsite wells. The majority of the water used in an ethanol plant is recycled back into the plant.  All our ground water is treated through our onsite water oxidation system.  This filtered water is used throughout our process.  We do treat (polish) some of this filtered water for boiler and cooling tower make-up with our Reverse Osmosis (RO) system to minimize any elements that will harm the boiler and steam systems as permitted.  We send some of our non-process contact water back to the Missouri River.  The makeup water requirements for the cooling tower are primarily a result of evaporation and cooling.  We also evaporate much of our water through our dryer system for dried corn distillers grains.  The rest of our process water is recycled back into the plant, which minimizes waste of our water supply.  

Patents, Trademarks, Licenses, Franchises and Concessions

SIRE^® and our SIRE^® logo are registered trademarks of the Company in the United States. Other trademarks, service marks and trade names used in this report constitute common law trademarks and/or service marks of the Company. Other parties’ marks referred to in this report are the property of their respective owners. We were granted a perpetual license by ICM, Inc. (“ICM”) to use certain ethanol production technology necessary to operate our Facility.  There is no ongoing fee or definitive calendar term for this license.

Seasonality of Sales

We experience some seasonality of demand for our ethanol. Since ethanol is predominantly blended with conventional gasoline for use in automobiles, ethanol demand tends to shift in relation to gasoline demand. As a result, we experience some seasonality of demand for ethanol in the summer months related to increased driving. In addition, we experience some increased ethanol demand during holiday seasons related to increased gasoline demand.

Risk Management and Hedging Transactions

The profitability of our operations is highly dependent on the impact of market fluctuations associated with commodity prices.  We use various derivative instruments as part of an overall strategy to manage market risk and to reduce the risk that our ethanol production will become unprofitable when market prices among our principal commodities and products do not correlate.  In order to mitigate our commodity and product price risks, we enter into hedging transactions, including forward corn, ethanol, distillers grain and natural gas contracts, in an attempt to partially offset the effects of price volatility for corn and ethanol.  We also enter into over-the-counter and exchange-traded futures and option contracts for corn, ethanol and distillers grains, designed to limit our exposure to increases in the price of corn and manage ethanol price fluctuations.  Although we believe that our hedging

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strategies can reduce the risk of price fluctuations, the financial statement impact of these activities depends upon, among other things, the prices involved and our ability to physically receive or deliver the commodities involved.  Our hedging activities could 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 corn and ethanol prices move in reaction to market trends and information, our income statement will be affected depending on the impact such market movements have on the value of our derivative instruments.

Hedging arrangements expose us to the risk of financial loss in situations where the counterparty to the hedging contract defaults or, in the case of exchange-traded contracts, where there is a change in the expected differential between the price of the commodity underlying the hedging agreement and the actual prices paid or received by us for the physical commodity bought or sold.  There are also situations where the hedging transactions themselves may result in losses, as when a position is purchased in a declining market or a position is sold in a rising market. Hedging losses may be offset by a decreased cash price for corn and natural gas and an increased cash price for ethanol and distillers grains.

We continually monitor and manage our commodity risk exposure and our hedging transactions as part of our overall risk management policy.  As a result, we may vary the amount of hedging or other risk mitigation strategies we undertake, and we may choose not to engage in hedging transactions.  Our ability to hedge is always subject to our liquidity and available capital.

Dependence on One or a Few Major Customers

As discussed above, we have marketing and agency agreements with Bunge, for the purpose of marketing and distributing our principal products.  We rely on Bunge for the sale and distribution of the majority of our products.  Currently,  we do not have the ability to market our ethanol and distillers grains internally should Bunge be unable or refuse to market these products at acceptable prices.  However, we anticipate that we would be able to very quickly secure competitive marketers should we need to replace Bunge for any reason.

Competition

Domestic Ethanol Competitors

The ethanol we produce is similar to ethanol produced by other domestic plants.  As of November 2019, the Renewable Fuels Association ("RFA") estimated that there were 208 installed ethanol production facilities in the United States with a total capacity of 16.6 billion gallons based on nameplate capacity and seven additional plants under expansion or construction with capacity to produce an additional 270 million gallons. Further, the RFA has estimated that approximately 7% of the ethanol production capacity in the United States is idled.

Since ethanol is a commodity product, competition in the industry is predominately based on price. The top five producers account for almost half of domestic production. We are in direct competition with many of these top five producers as well as other national producers, many of whom have greater resources and experience than we have and each of which is producing significantly more ethanol than we produce. In addition, we believe that the ethanol industry will continue to consolidate leading to a market where a small number of large ethanol producers with substantial production capacities will control an even larger portion of the U.S. ethanol production. In recent years, the ethanol industry has also seen increased competition from oil companies who have purchased ethanol production facilities. These oil companies are required to blend a certain amount of ethanol each year.

We may be at a competitive disadvantage compared to our larger competitors and the oil companies who are capable of producing a significantly greater amount of ethanol, have multiple ethanol plants that may help them achieve certain efficiencies and other benefits that we cannot achieve with one ethanol plant or are able to operate at times when it is unprofitable for us to operate. For instance, ethanol producers that own multiple plants may be able to compete in the marketplace more effectively, especially during periods when operating margins are unfavorable, because they have the flexibility to run certain production facilities while reducing production or shutting down production at other facilities. These large producers may also be able to realize economies of scale which we are unable to realize or they may have better negotiating positions with purchasers.  Further, new products or methods of ethanol production developed by larger and better-financed competitors could create competitive advantages over us.

Foreign Ethanol Competitors

In recent years, the ethanol industry has experienced increased competition from international suppliers of ethanol and although ethanol imports have decreased during the past few years, if competition from ethanol imports were to increase again,

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such increased imports could negatively impact demand for domestic ethanol which could adversely impact our financial results. Large international companies with much greater resources than ours have developed, or are developing, increased foreign ethanol production capacities.

Many international suppliers produce ethanol primarily from inputs other than corn, such as sugarcane, and have cost structures that may be substantially lower than U.S. based ethanol producers including us. Many of these international suppliers are companies with much greater resources than us with greater production capacities.

Brazil is the world’s second largest ethanol producer. Brazil makes ethanol primarily from sugarcane as opposed to corn, and depending on feedstock prices, may be less expensive to produce. Several large companies produce ethanol in Brazil, including affiliates of Bunge. Brazilian imports account for less than 1% of U.S. ethanol consumed. Many in the ethanol industry are concerned that certain provisions of the Renewable Fuel Standard (the "RFS") as adopted may disproportionately benefit ethanol produced from sugarcane. This could make sugarcane based ethanol, which is primarily produced in Brazil, more competitive in the United States ethanol market. If this were to occur, it could reduce demand for the ethanol that we produce. In recent years, sugarcane ethanol imported from Brazil has been one of the most economical means for certain obligated parties to comply with the RFS2 requirement to blend 4.9 billion gallons of advanced biofuels.

In March 2015, the Brazilian government increased the required percentage of ethanol in vehicle fuel sold in Brazil to 27% from 25% which, along with more competitively priced ethanol produced from corn, significantly reduced U.S. imports of ethanol produced in Brazil as compared to prior years. However, EIA data shows that during the first eight months of 2019, U.S. ethanol imports from Brazil increased to 84 million gallons from 21 million gallons in the first eight months of calendar 2018. If U.S. imports of ethanol from Brazil continue to increase, this could reduce demand for domestic ethanol and adversely impact ethanol prices in the U.S.

In order to address supply issues after the sugarcane harvest, some Brazilian ethanol plants have become "flex plants" enabling them to process year round with local corn as well as sugarcane. Two new processing plants are under construction which will substantially increase Brazilian ethanol production and thereby increase the inventory available for U.S. ethanol imports. Any additional increase in ethanol imports from Brazil will further increase domestic ethanol supplies in the United States and may result in ethanol price decreases.

Based on the current strength of the United States Dollar compared to the Brazilian Reis along with very favorable prices for sugarcane based ethanol in the United States, specifically in California, it is possible that ethanol imports from Brazil may increase in Fiscal 2020 which will further impact the level of ethanol supplies in the United States and may result in ethanol price decreases.

Depending on feedstock prices, ethanol imported from foreign countries, including Brazil, may be less expensive than domestically-produced ethanol.  However, foreign demand, transportation costs and infrastructure constraints may temper the market impact on the United States.

Local Ethanol Production

Because we are located on the border of Iowa and Nebraska, and because ethanol producers generally compete primarily with local and regional producers, the ethanol producers located in Iowa and Nebraska presently constitute our primary competition.  According to the Iowa Renewable Fuels Association, as of November 2019, Iowa had 42 ethanol refineries in production, with a combined nameplate capacity to produce 4.5 billion gallons of ethanol.  For Nebraska, the RFA reports there are currently 26 existing ethanol plants in production in Nebraska, with a combined ethanol nameplate production capacity of approximately 2.2 billion gallons.

Competition from Alternative Renewable Fuels

We anticipate increased competition from renewable fuels that do not use corn as feedstock. Many of the current ethanol production incentives are designed to encourage the production of renewable fuels using raw materials other than corn, including cellulose. Cellulose is the main component of plant cell walls and is the most common organic compound on earth. Cellulose is found in wood chips, corn stalks, rice straw, amongst other common plants. Cellulosic ethanol is ethanol produced from cellulose. Research continues regarding cellulosic ethanol, and various companies are in various stages of developing and constructing some of the first generation cellulosic plants. Several companies have commenced pilot projects to study the feasibility of commercially producing cellulosic ethanol and are producing cellulosic ethanol on a small scale and, at a few companies in the United States have begun producing on a commercial scale. Additional commercial scale cellulosic ethanol plants could be completed in the near future, although these cellulosic ethanol plants have continued to face financial and technological issues. If this technology can be profitably employed on a commercial scale, it could potentially lead to ethanol that is less expensive to produce than corn

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based ethanol. Cellulosic ethanol may also capture more government subsidies and assistance than corn based ethanol. This could decrease demand for our product or result in competitive disadvantages for our ethanol production process.

Because our Facility is designed as single-feedstock facilities, we have limited ability to adapt the plant to a different feedstock or process system without additional capital investment and retooling.

A number of automotive, industrial and power generation manufacturers are developing alternative clean power systems using fuel cells, plug-in hybrids, electric cars or clean burning gaseous fuels. Like ethanol, the emerging fuel cell industry offers a technological option to address worldwide energy costs, the long-term availability of petroleum reserves and environmental concerns. Fuel cells have emerged as a potential alternative to certain existing power sources because of their higher efficiency, reduced noise and lower emissions. Fuel cell industry participants are currently targeting the transportation, stationary power and portable power markets in order to decrease fuel costs, lessen dependence on crude oil and reduce harmful emissions. If the fuel cell industry continues to expand and gain broad acceptance and becomes readily available to consumers for motor vehicle use, we may not be able to compete effectively. This additional competition could reduce the demand for ethanol, which would negatively impact our profitability.

Distillers Grain Competition

Ethanol plants in the Midwest produce the majority of distillers grains and primarily compete with other ethanol producers in the production and sales of distillers grains. According to the RFA 2019 Ethanol Outlook (the "RFA 2019 Outlook") , ethanol plants produced almost 41.3 million metric tons of distillers grains and other animal feed.  We compete with other producers of distillers grains products both locally and nationally.

The primary customers of distillers grains are dairy and beef cattle, according to the RFA 2019 Outlook, which comprises 77% of distiller grains consumption. In recent years, an increasing amount of distillers grains have been used in the swine, poultry and fish markets. Numerous feeding trials show advantages in milk production, growth, rumen health, and palatability over other dairy cattle feeds. With the advancement of research into the feeding rations of poultry and swine, we expect these markets to expand and create additional demand for distillers grains; however, no assurance can be given that these markets will in fact expand, or if they do, that we will benefit from such expansion.

The market for distillers grains is generally confined to locations where freight costs allow it to be competitively priced against other feed ingredients. Distillers grains compete with three other feed formulations: corn gluten feed, dry brewers grain and mill feeds. The primary value of these products as animal feed is their protein content. Dry brewers grain and distillers grains have about the same protein content, and corn gluten feed and mill feeds have slightly lower protein contents. Distillers grains contain nutrients, fat content, and fiber that we believe will differentiate our distillers grains products from other feed formulations. However, producers of other forms of animal feed may also have greater experience and resources than we do and their products may have greater acceptance among producers of beef and dairy cattle, poultry and hogs.

Principal Supply & Demand Factors

Ethanol

Ethanol prices stayed low during Fiscal 2019, as small refinery waivers granted by the Environmental Protection Agency (the "EPA") affecting the RFS created significant uncertainty in the market as well as the lack of federal action until May 31, 2019 on implementing the year-round use of E15 ethanol which did not allow for sufficient time to enable the ethanol industry to fully capitalize on increased E`15 sales during the 2019 peak summer driving season. Higher corn prices during Fiscal 2019 also impacted the margins on ethanol production.

Management currently expects ethanol prices will continue to adjust to the supply and demand factors of ethanol and oil and will generally fluctuate with, but not be directly correlated to, the price of corn.  

Management believes the industry will need to grow both retail product delivery infrastructure and demand for ethanol in order to increase production margins in the near and long term.

Management also believes it is important that ethanol blending capabilities of the gasoline market be expanded to increase demand for ethanol.  Recently, there has been increased awareness of the need to expand retail ethanol distribution and blending infrastructure, which would allow the ethanol industry to supply ethanol to markets in the United States that are not currently selling significant amounts of ethanol. On June 1, 2019, President Trump initiated rulemaking to expand fuel waivers for E15 to allow year round sale of fuel blends containing gasoline up to a 15% blend of ethanol.Although there have been significant

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developments towards the availability of E15 in the marketplace and the recent EPA final rule allowing the year-round sale of E15, there are still obstacles that could inhibit meaningful market penetration by E15.

Distillers Grains

Distillers grains compete with other protein-based animal feed products. In North America, over 80% of distillers grains are used in ruminant animal diets, and are also fed to poultry and swine.  Every bushel of corn used in the dry grind ethanol process yields approximately 17 pounds of dry matter distillers grains, which is an excellent source of energy and protein for livestock and poultry.  The price of distillers grains may decrease when the prices of competing feed products decrease. The prices of competing animal feed products are based in part on the prices of the commodities from which these products are derived. Downward pressure on commodity prices, such as soybeans and corn, will generally cause the price of competing animal feed products to decline, resulting in downward pressure on the price of distillers grains.

Historically, sales prices for distillers grains have correlated with prices of corn. However, there have been occasions when the price increase for this co-product has not been directly correlated to changes in corn prices. In addition, our distillers grains compete with products made from other feedstocks, the cost of which may not rise when corn prices rise. Consequently, the price we may receive for distillers grains may not rise as corn prices rise, thereby lowering our cost recovery percentage relative to corn.

Management expects that distillers grain prices will continue to generally follow the price of corn during Fiscal 2020.

Competition for Supply of Corn

During crop year 2018/19, according to the USDA November 2019 report, 81.7 million acres of corn were harvested, which was down 1.1% from 2017. Although there were less acres planted, the expected yield is 176.4 bushels per acre, which is basically flat compared to 2017's results. For the crop year 2019/20, current projections are 81.8 million acres of corn to be harvested, but the yield per acre is projected to fall to 167.0 bushels per acre. This was due to adverse weather conditions during planting season and mid spring flooding in some parts of the Midwest. Prices for corn are expected to continue to increase as a result of the lower levels of production and yields forecasted by the USDA.

Competition for corn supply from other ethanol plants and other corn consumers exists around our Facility.  According to RFA 2019 Ethanol Industry Outlook, as of September 2019, there were 44 operational ethanol plants in Iowa. The plants are concentrated, for the most part, in the northern and central regions of the state where a majority of the corn is produced. A new ethanol plant in Atlantic, Iowa commenced operations in the third quarter of calendar year 2018, which continues to effect the Company's corn deliveries and prices paid for corn.

We compete with other users of corn, including ethanol producers regionally and nationally, producers of food and food ingredients for human consumption (such as high fructose corn syrup, starches, and sweeteners), producers of animal feed and industrial users. According to the USDA, for 2017/2018, 5.6 billion bushels of U.S. corn were used in ethanol production, with 7.1 billion bushels being used in food and other industrial uses, and 2.4 billion bushels used for export.  For the crop year 2018/19, bushels of U.S. corn for ethanol production fell to 5.4 billion bushels used in ethanol production, with 6.8 billion bushels being used in food and other industrial uses, and 2.1 billion bushels used for export. As of November 2019, the USDA has forecast the amount of corn to be used for ethanol production during the current marketing year flat at 5.4 billion bushels with flat forecasts for food and industrial use and for exports.

Federal Ethanol Support and Governmental Regulations

RFS and Related Federal Legislation

The ethanol industry is dependent on, and receives significant federal support from, the Federal Renewable Fuels Standard (the “RFS”) which has been and will continue to be a driving factor in the growth of ethanol usage. The RFS requires that in each year a certain amount of renewable fuels must be used in the United States. The RFS is a national program that does not require that any renewable fuels be used in any particular area or state, allowing refiners to use renewable fuel blends in those areas where it is most cost-effective.   The U.S. Environmental Protection Agency (the “EPA”) is responsible for revising and implementing regulations to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel.  

The RFS original statutory volume requirements increase incrementally each year through 2022 when the mandate requires that the United States use 36 billion gallons of renewable fuels.  Starting in 2009, the RFS required that a portion of the RFS must

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be met by certain “advanced” renewable fuels. These advanced renewable fuels include ethanol that is not made from corn, such as cellulosic ethanol and biomass based biodiesel. The use of these advanced renewable fuels increases each year as a percentage of the total renewable fuels required to be used in the United States.

Annually, the EPA is supposed to pass a rule that establishes the number of gallons of different types of renewable fuels that must be used in the United States which is called the renewable volume obligation. On November 30, 2018, the EPA issued the final rule that set the 2019 annual volume requirements for renewable fuel at 19.92 billion gallons of renewable fuels per year (the "Final 2019 Rule"). On July 5, 2019, the EPA issued a proposed rule for 2020 which set the annual volume requirements renewable fuel at 20.04 billion gallons of renewable fuel (the "Proposed 2020 Rule"). Both the Final 2019 Rule and the Proposed 2020 Rule maintained the number of gallons that may be met by conventional renewable fuels such as corn based ethanol at 15.0 billion gallons. A public hearing on the Proposed 2020 Rule was held in July and the public comment period expired on August 30, 2019. The final rule was expected to be issued in November 2019.

However, on October 15, 2019, the EPA released a supplemental notice seeking additional comments on a proposed rule on adjustments to the way that annual renewable fuel percentages are calculated. The supplemental notice was issued in response to an announcement on October 4, 2019, by President Trump of a proposed plan to require refiners not exempt from the rules to blend additional gallons of ethanol to make up for the gallons exempted by the EPA's expanded use of waivers to small refineries. The effect of these waivers is that the refinery is no longer required to earn or purchase blending credits, known as RINs, negatively affecting ethanol demand and resulting in lower ethanol prices. The proposed plan was expected to calculate the volume that refiners were required to blend by using a three-year average of exempted gallons. However, the EPA proposed to use a three-year average to account for the reduction in demand resulting from the waivers using the number of gallons of relief recommended by the United States Department of Energy. A public hearing on the proposed rule was held October 30 and the public comment period expired on November 30, 2019. The EPA is expected to finalize the Proposed 2020 Rule and the issues set out in the supplemental notice later in 2019.

Although the volume requirements set forth in the Final 2019 Rule are slightly higher than the final 2018 volume requirements (the "Final 2018 Rule") and the Proposed 2020 Rule volume requirements are slightly higher than those set forth in the Final 2019 Rule, the volume requirements under the Final 2018 Rule, the Final 2019 Rule and the Proposed 2020 Rule are all still significantly below the 26 billion gallons, 28 billion gallons and 30 billion gallons, respectively, statutory mandates, with significant reductions in the volume requirements for advanced biofuels as well.

Under the RFS, if mandatory renewable fuel volumes are reduced by at least 20% for two consecutive years, the EPA is required to modify, or reset, statutory volumes through 2022. the Final 2018 Rule represent the first year the total proposed volume requirements were more than 20% below statutory levels. In response, the EPA Administrator directed his staff to initiate the required technical analysis to perform any future reset consistent with the reset rules. The Final 2019 Rule is approximately 29% below the statutory levels representing the second consecutive year of reductions of more than 20% below the statutory mandates therefore triggering the mandatory reset under the RFS. The EPA is now statutorily required to modify statutory volumes through 2022 within one year of the trigger event, based on the same factors used to set the volume requirements post-2022. These factors include environmental impact, domestic energy security, expected production, infrastructure impact, consumer costs, job creation, price of agricultural commodities, food prices, and rural economic development.

In October 2018, the Trump administration released timelines for certain EPA rulemaking initiatives relating to the RFS including the “reset” of the statutory blending targets. The EPA is expected to propose rules modifying the applicable statutory volume targets for cellulosic biofuel, advanced biofuel, and total renewable fuel for the years 2020-2022.

Federal mandates supporting the use of renewable fuels like the RFS are a significant driver of ethanol demand in the U.S. Ethanol policies are influenced by environmental concerns, diversifying our fuel supply, and an interest in reducing the country’s dependence on foreign oil. Consumer acceptance of flex-fuel vehicles and higher ethanol blends of ethanol in non-flex-fuel vehicles may be necessary before ethanol can achieve significant growth in U.S. market share. Another important factor is a waiver in the Clean Air Act, known as the "One-Pound Waiver", which allows E10 to be sold year-round, even though it exceeds the RVP limitation of nine pounds per square inch. At the end of May 2019, the EPA finalized a rule which extended the One-Pound Waiver to E15 so its sale can expand beyond flex-fuel vehicles during the June 1 to September 15 summer driving season. This rule is being challenged in court; however, the One-Pound Waiver is in effect, and E15 can be sold year round. However, with respect to the 2019 summer driving season, because the rule was not finalized until the end of May, the ethanol industry was unable to fully capitalize on increased E15 sales during the 2019 peak summer driving season.

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Despite the recent actions by the Trump administration relating to E15, there continues to be uncertainty regarding the future of the RFS as a result of the significant number of waivers granted by the EPA exempting certain small refiners from the volume purchase requirements of the RFS. Under the RFS, the EPA assigns individual refiners, blenders, and importers the volume of renewable fuels they are obligated to use based on their percentage of total domestic transportation fuel sales. Obligated parties use RINs to show compliance with RFS-mandated volumes. RINs are attached to renewable fuels by ethanol producers and detached when the renewable fuel is blended with transportation fuel or traded in the open market. The market price of detached RINs affects the price of ethanol in certain markets and influences the purchasing decisions by obligated parties.

Although the Final 2018 Rule, the Final 2019 Rule and the Proposed 2020 Rule all maintain the number of gallons which may be met by conventional renewable fuels such as corn-based ethanol at 15.0 billion gallons this number does not take into account waivers granted by the EPA to small refiners for "hardship." The EPA can, in consultation with the Department of Energy, waive the obligation for individual smaller refineries that are suffering “disproportionate economic hardship” due to compliance with the RFS. To qualify, for this “small refinery waiver,” the refineries must be under total throughput of 75,000 barrels per day and state their case for an exemption in an application to the EPA each year. These waivers allowed the recipient to no longer comply with the requirements of the RFS.

The EPA has substantially expanded the granting of these waiver requests since 2015 with 7 waivers granted for compliance year 2015, 19 granted for compliance year 2016, and 35 granted for compliance year 2017. Although the EPA had previously announced that it was suspending the waiver program pending review in 2019, the industry has not seen any evidence to support this position and in fact, on August 9, 2019, the EPA announced that it had granted 31 waiver applications for compliance year 2018 with two additional waiver applications still pending. The EPA also failed to address reallocating lost blending volumes, nor mention the impact of the "hardship" waivers on the volume requirements set out in the Final 2019 Rule or the Proposed 2020 Rule. The waivers granted for the 2018 compliance year alone effectively reduced the amount of biofuel required to enter the nation’s fuel supply by exempting 7.4% of the total RFS renewable fuel 2018 volume mandate, or about 1.43 billion gallons.

The mechanism that provides accountability in RFS compliance is the Renewable Identification Number (RIN). RINs are a tradeable commodity given that if refiners (obligated parties) need additional RINs to be compliant, they have to purchase them from those that have excess. Thus, there is an economic incentive to use renewable fuels like ethanol, or in the alternative, buy RINs. Granting these small refinery waivers effectively reduces the annual renewable volume obligation for each year by that amount as the waivers exempt the obligating parties from meeting the RFS blending targets and the waived gallons are not reallocated to other obligated parties at this time. The resulting surplus of RINs in the market has brought values down significantly. Since the RIN value helps to make higher blends of ethanol more cost effective, lower RIN values could negatively impact retailer and consumer adoption of E15 and higher blends. The EPA’s allowance of numerous waivers and the resulting surplus of RINs in the market has driven down RIN values significantly from RIN prices of 75 cents in 2016 and 2017 to under $0.20 so far in 2019. If the EPA continues to grant discretionary waivers and RIN prices continue to fall, it could negatively affect ethanol prices.

In response to the EPA granting over 30 small refinery exemptions in 2019, over 15 plants have shut down while other plants have limited production. The RFA estimates that approximately 20 ethanol plants have been temporarily idled or permanently closed since the EPA began to expand the volume of the small refinery exemptions granted. The Trump Administration has not announced a plan to reallocate ethanol gallons lost to exemptions in the current year and therefore, the continued granting of waivers and the failure of the Trump Administration to take any action to reallocate the lost exemptions will continue to negatively impact ethanol demand and RIN and ethanol prices.

Biofuels groups have filed a lawsuit in the U.S. Federal District Court for the D.C. Circuit, challenging the Final 2019 Rule over the EPA’s failure to address small refinery exemptions in the rulemaking. This is the first RFS rulemaking since the expanded use of the exemptions came to light, however the EPA has refused to cap the number of waivers it grants or how it accounts for the retroactive waivers in its percentage standard calculations. The EPA has a statutory mandate to ensure the volume requirements are met, which are achieved by setting the percentage standards for obligated parties. The EPA's current approach runs counter to this statutory mandate and undermines Congressional intent. Biofuels groups argue the EPA must therefore adjust its percentage standard calculations to make up for past retroactive waivers and adjust the standards to account for any waivers it reasonably expects to grant in the future.

If the EPA’s decisions to reduce the volume requirements under the RFS statutory mandates is allowed to stand, if the volume requirements are further reduced, if the EPA continues to grant waivers to small refiners or if the EPA refuses to reallocate the lost blending volumes resulting from the previously granted small refiner waivers, the market price and demand for ethanol would be adversely effected which would negatively impact our financial performance.

On May 18, 2018, the Advanced Biofuel Association initiated a legal challenge to the EPA’s process for granting exemptions from compliance under the RFS to small refineries. In its petition, the Advanced Biofuel Association seeks judicial review of the EPA’s decision to modify criteria to lower the threshold by which the agency determines whether to grant small

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refineries an exemption for the RFS for reasons of disproportionate economic hardship. The court dismissed the case on November 12, 2019, although agreed with the Advanced Biofuel Association that the EPA did not provide a "viable avenue for judicial review."

Additionally, on May 29, 2018, the National Corn Growers Association, National Farmers Union and the Renewable Fuels Association filed a petition challenging the EPA’s grant of waivers to three specific refineries seeking that the court reject the waivers granted to the three as an abuse of EPA authority.  These waived gallons are not redistributed to obligated parties, and in effect, reduce the aggregate Renewable Volume Obligations or "RVOs" under the RFS. If the specific waivers granted by the EPA and/or its lower criteria for granting small refinery waivers under the RFS are allowed to stand, or if the volume requirements are further reduced, it could have an adverse effect on the market price and demand for ethanol which would negatively impact our financial performance.

Related to the recent lawsuits, the Renewable Fuels Association, American Coalition for Ethanol, Growth Energy, National Biodiesel Board, National Corn Growers Association, Biotechnology Industry Organization, and National Farmers Union petitioned the EPA on June 4, 2018 to change its regulations to account for lost volumes of renewable fuel resulting from the retroactive small refinery exemptions. This petition to the EPA seeks a broader, forward-looking remedy to account for the collective lost volumes caused by the recent increase in retroactive small refinery RVO exemptions. It is unclear what regulatory changes, if any, will emerge from the petition to the EPA.

In 2017, the D.C. Circuit ruled in favor of biofuel groups against the EPA related to its decision to lower the 2016 volume requirements by 500 million gallons. As a result, the court remanded to the EPA to make up for the 500 million gallons. Despite this, during the 2019 volume requirement rulemaking, the EPA stated it does not intend to make up the 500 million gallons as the court directed, citing potential burden on obligated parties. It is anticipated litigation will ensue from this matter.

On February 4, 2019, Growth Energy filed a lawsuit in the Court of Appeals for the District of Columbia against the EPA challenging the EPA’s failure to address small refinery exemptions in the Final 2019 Rule.

Although the maintenance of the 15 billion gallon threshold for volume requirements that may be met with corn-based ethanol in the Final 2018 Rule, the Final 2019 Rule and the Proposed 2020 Rule together with the application of the One-Pound Waiver to E15 permitting the year round sale of E15 signals support from the EPA and the Trump administration for domestic ethanol production, the Trump administration could still elect to materially modify, repeal or otherwise invalidate the RFS and it is unclear what regulatory framework and renewable volume requirements, if any, will emerge as a result of any such reforms; however, any such reform could adversely affect the demand and price for ethanol and our profitability.

On February 3, 2010, the EPA implemented new regulations governing the RFS which are referred to as "RFS2". The most controversial part of RFS2 involves what is commonly referred to as the lifecycle analysis of greenhouse gas emissions. Specifically, the EPA adopted rules to determine which renewable fuels provided sufficient reductions in greenhouse gases, compared to conventional gasoline, to qualify under the RFS program. RFS2 establishes a tiered approach, where regular renewable fuels are required to accomplish a 20% greenhouse gas reduction compared to gasoline, advanced biofuels and biomass-based biodiesel must accomplish a 50% reduction in greenhouse gases, and cellulosic biofuels must accomplish a 60% reduction in greenhouse gases. Any fuels that fail to meet this standard cannot be used by fuel blenders to satisfy their obligations under the RFS program. Our ethanol plant was grandfathered into the RFS due to the fact that it was constructed prior to the effective date of the lifecycle greenhouse gas requirement and is not required to prove compliance with the lifecycle greenhouse gas reductions.

Based on the final regulations, we believe our Facility, at its current operating capacity, was grandfathered into the RFS given it was constructed prior to the effective date of the lifecycle greenhouse gas requirement and therefore is not required to prove compliance with the lifecycle greenhouse gas reductions.   However, expansion of our Facility will require us to meet a threshold of a 20% reduction in greenhouse gas, or GHG emissions to produce ethanol eligible for the RFS2 mandate. In order to expand capacity at our Facility, we may be required to obtain additional permits, install advanced technology, or reduce drying of certain amounts of distillers grains. 

Many in the ethanol industry are concerned that certain provisions of RFS2 as adopted may disproportionately benefit ethanol produced from sugarcane. This could make sugarcane based ethanol, which is primarily produced in Brazil, more competitive in the United States ethanol market. If this were to occur, it could reduce demand for the ethanol that we produce.

State Initiatives and Mandates

In 2006, Iowa passed legislation promoting the use of renewable fuels in Iowa.  One of the most significant provisions of the Iowa renewable fuels legislation is a renewable fuels standard encouraging 10% of the gasoline sold in Iowa to consist of

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renewable fuels.  This renewable fuels standard increases incrementally to 25% of the gasoline sold in Iowa by 2020. To reach that goal, the use of E85 will have to climb dramatically. Gas stations that embrace E85 will be in line for state tax credits and also incentives. To qualify under the bill, ethanol must be agriculturally-derived. 

E85

Demand for ethanol has been affected by moderately increased consumption of E85 fuel, a blend of 85% ethanol and 15% gasoline, which is available for use in flex fuel vehicles.   There are more than 24 million flex fuel vehicles on the road today, or approximately 8% of all vehicles, representing more vehicles than require premium gasoline today.  In addition to use as a fuel in flexible fuel vehicles, E85 can be used as an aviation fuel, as reported by the National Corn Growers Association, and as a hydrogen source for fuel cells. According to the Renewable Fuels Association, there are currently more than 24 million flexible fuel vehicles capable of operating on E85 in the United States and nearly all of the major automakers have available flexible fuel modes and have indicated plans to produce several million more flexible fuel vehicles per year.  The Renewable Fuels Association reports that there are more than 4,700 retail gasoline stations supplying E85 or other ethanol flex fuel blends.  While the number of retail E85 suppliers has increased each year, this remains a relatively small percentage of the total number of U.S. retail gasoline stations, which is approximately 170,000.  In order for E85 fuel to increase demand for ethanol, it must be available for consumers to purchase it.  As public awareness of ethanol and E85 increases along with E85’s increased availability, management anticipates some growth in demand for ethanol associated with increased E85 consumption. The USDA provides financial assistance to help implement “blender pumps” in the United States in order to increase demand for ethanol and to help offset the cost of introducing mid-level ethanol blends into the United States retail gasoline market. A blender pump is a gasoline pump that can dispense a variety of different ethanol/gasoline blends. Blender pumps typically can dispense E10, E20, E30, E40, E50 and E85. These blender pumps accomplish these different ethanol/gasoline blends by internally mixing ethanol and gasoline which are held in separate tanks at the retail gas stations. Many in the ethanol industry believe that increased use of blender pumps will increase demand for ethanol by allowing gasoline retailers to provide various mid-level ethanol blends in a cost effective manner and allowing consumers with flex-fuel vehicles to purchase more ethanol through these mid-level blends.

Changes in Corporate Average Fuel Economy (“CAFE”) standards have also benefited the ethanol industry by encouraging use of E85 fuel products. CAFE provides an effective 54% efficiency bonus to flexible-fuel vehicles running on E85. This variance encourages auto manufacturers to build more flexible-fuel models, particularly in trucks and sport utility vehicles that are otherwise unlikely to meet CAFE standards.

E15

E15 is a blend of higher octane gasoline and up to 15% ethanol.  E15 was approved for use in model year 2001 and newer cars, light-duty trucks, medium-duty passenger vehicles (SUVs) and all flex-fuel vehicles by the U.S. Environmental Protection Agency in 2012, This approved group of vehicles includes 90% of the cars, trucks and SUVs on the road today According to the Renewable Fuel Association, this higher octane fuel is available in 30 states at retail fueling stations. Sheetz, Kum & Go, Murphy USA, MAPCO Express, Protec Fuel, Minnoco, Thornton's, Hy-Vee, Growmark and Casey's all offer E15 to 2001 and newer vehicles today at several stations. One of the historic challenges with the growth of the E15 market is the fact that, the waiver in the Clean Air Act, known as the One-Pound Waiver, which allows E10 to be sold year-round, does not apply to E15 or higher blends, even though it has similar physical properties to E10. On March 12, 2019, the EPA proposed regulatory changes to allow E15 to take advantage of the One-Pound Waiver and authorized the sale of E15 during the summer months even though it exceeds the Reid Vapor Pressure limitation. At the end of May 2019, the EPA finalized the rule extending the One-Pound Waiver to E15 so its sale can expand beyond flex-fuel vehicles during the June 1 to September 15 summer driving season. This rule is being challenged in an action filed in Federal District Court for the D.C. Circuit.

In May 2015, the USDA announced that the agency will make significant investments in a biofuels infrastructure partnership to double the number of renewable fuel blender pumps that can supply consumers with higher ethanol blends, like E15 and E85. The program provides competitive grants, matched by states, to help implement “blender pumps” in the United States in order to increase demand for ethanol and to help offset the cost of introducing mid-level ethanol blends into the United States retail gasoline market. A blender pump is a gasoline pump that can dispense a variety of different ethanol/gasoline blends. Blender pumps typically can dispense E10, E15, E20, E30, E40, E50 and E85. These blender pumps accomplish these different ethanol/gasoline blends by internally mixing ethanol and gasoline which are held in separate tanks at the retail gas stations. Many in the ethanol industry believe that increased use of blender pumps will increase demand for ethanol by allowing gasoline retailers to provide various mid-level ethanol blends in a cost effective manner and allowing consumers with flex-fuel vehicles to purchase more ethanol through these mid-level blends. However, the expense of blender pumps has delayed their availability in the retail gasoline market. The USDA biofuels infrastructure partnership program had provided $210 million to fund the installation of new ethanol infrastructure at nearly 1,500 stations in 20 states. Installations began in 2016 and continued into 2019, which will

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significantly increase the number of stations selling both E15 and E85. The USDA reports that to date, 20 states have received BIP Federal Funding amounts of almost $100M that covers almost 1,500 stations with almost 5,000 proposed pumps.

Cellulosic Ethanol

The Energy Independence and Security Act provided numerous funding opportunities in support of cellulosic ethanol. In addition, RFS2 mandates an increasing level of production of biofuels which are not derived from corn. These policies suggest an increasing policy preference away from corn ethanol and toward cellulosic ethanol.

Environmental and Other Regulations and Permits

Ethanol production involves the emission of various airborne pollutants, including particulate matters, carbon monoxide, oxides of nitrogen, volatile organic compounds and sulfur dioxide.  Ethanol production also requires the use of significant volumes of water, a portion of which is treated and discharged into the environment.  We are required to maintain various environmental and operating permits.  Even though we have successfully acquired the permits necessary for our operations, any retroactive change in environmental regulations, either at the federal or state level, could require us to obtain additional or new permits or spend considerable resources on complying with such regulations.  In addition, if we sought to expand the Facility’s capacity in the future, above our current 140 million gallons, we would likely be required to acquire additional regulatory permits and could also be required to install additional pollution control equipment.   Our failure to obtain and maintain any environmental and/or operating permits currently required or which may be required in the future could force us to make material changes to our Facility or to shut down altogether.  

The U.S. Supreme Court has classified carbon dioxide as an air pollutant under the Clean Air Act in a case seeking to require the EPA to regulate carbon dioxide in vehicle emissions. As stated above, we believe the final RFS2 regulations grandfather our plant at its current operating capacity, though expansion of our plant will need to meet a threshold of a 20% reduction in greenhouse gas (“GHG”) emissions from a baseline measurement to produce ethanol eligible for the RFS2 mandate. In order to expand capacity at our plant above our current permitted 140 million gallons, we will be required to obtain additional permits and install improved technology.

Separately, the California Air Resources Board ("CARB") has adopted a Low Carbon Fuel Standard (the "LCFS") requiring a 10% reduction in GHG emissions from transportation fuels by 2020 using a lifecycle GHG emissions calculation. On December 29, 2011, a federal district court in California ruled that the California LCFS was unconstitutional which halted implementation of the California LCFS. CARB appealed this court ruling and on September 18, 2013, the federal appellate court reversed the federal district court finding the LCFS constitutional and remanding the case back to federal district court to determine whether the LCFS imposes a burden on interstate commerce that is excessive in light of the local benefits. On June 30, 2014, the United States Supreme Court declined to hear the appeal of the federal appellate court ruling and CARB recently re-adopted the LCFS with some slight modifications. The LCFS could have a negative impact on the overall market demand for corn-based ethanol and result in decreased ethanol prices.

Part of our business is regulated by environmental laws and regulations governing the labeling, use, storage, discharge and disposal of hazardous materials. Other examples of government policies that can have an impact on our business include tariffs, duties, subsidies, import and export restrictions and outright embargos.

We also employ maintenance and operations personnel at our Facility. In addition to the attention that we place on the health and safety of our employees, the operations at our Facility are governed by the regulations of the Occupational Safety and Health Administration, or OSHA.

We have obtained all of the necessary permits to operate the plant. Although we have been successful in obtaining all of the permits currently required, any retroactive change in environmental regulations, either at the federal or state level, could require us to obtain additional or new permits or spend considerable resources in complying with such regulations.

Available Information

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge on our website at www.sireethanol.com as soon as reasonably practicable after we file or furnish such information electronically with the SEC.  The information found on our website is not incorporated by reference into this report or any other report we file with or furnish to the SEC.

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The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC.  The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.  The SEC also maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

Item 1A.   Risk Factors.

You should carefully read and consider the risks and uncertainties below and the other information contained in this

report. The risks and uncertainties described below are not the only ones we may face. The following risks, together with additional risks and uncertainties not currently known to us or that we currently deem immaterial, could impair our financial condition and results of operation.

Risks Associated With Our Capital Structure

Our units have no public trading market and are subject to significant transfer restrictions which could make it difficult to sell units and could reduce the value of the units.

There is not an active trading market for our membership units. To maintain our partnership tax status, our units may not be publicly traded.  Within applicable tax regulations, we utilize a qualified matching service (“QMS”) to provide a limited market to our members, but we have not and will not apply for listing of the units on any stock exchange.  Finally, applicable securities laws may also restrict the transfer of our units.  As a result, while a limited market for our units may develop through the QMS, members may not sell units readily, and use of the QMS is subject to a variety of conditions and limitations.  The transfer of our units is also restricted by our Fourth Amended and Restated Operating Agreement dated March 21, 2015 (the “Operating Agreement”) unless the Board of Directors (the “Board” or “Board of Directors”) approves such a transfer. Furthermore, the Board will not approve transfer requests which would cause the Company to be characterized as a publicly traded partnership under the regulations adopted under the Internal Revenue Code of 1986, as amended (the “Code”).  The value of our units will likely be lower because they are illiquid. Members are required to bear the economic risks associated with an investment in us for an indefinite period of time.

Our current indebtedness requires us to comply with certain restrictive loan covenants which may limit our ability to operate our business.

Under the terms of our Credit Agreement, we have made certain customary representations and we are subject to customary affirmative and negative covenants, including restrictions on our ability to incur additional debt that is not subordinated, create additional liens, transfer or dispose of assets, make distributions, consolidate, dissolve or merge, and customary events of default (including payment defaults, covenant defaults, cross defaults and bankruptcy defaults).  The Credit Agreement also contains financial covenants including a minimum working capital amount, minimum local net worth (as defined) and a minimum debt service coverage ratio.

We can provide no assurance that, if we are unable to comply with these covenants in the future, we will be able to obtain the necessary waivers or amend our loan agreements to prevent a default.

A breach of any of these covenants or requirements could result in a default under our Credit Agreement. If we default under our Credit Agreement and we are unable to cure the default or obtain a waiver, we will not be able to access the credit available under our Credit Agreement and there can be no assurance that we would be able to obtain alternative financing. Our Credit Agreement also includes customary default provisions that entitle our lenders to take various actions in the event of a default, including, but not limited to, demanding payment for all amounts outstanding. If this occurs, we may not be able to repay such indebtedness or borrow sufficient funds to refinance. Even if new financing is available, it may not be on terms that are acceptable to us. No assurance can be given that our future operating results will be sufficient to achieve compliance with the covenants and requirements of our Credit Agreement.

We operate in capital intensive businesses and rely on cash generated from operations and external financing. Limitations on access to external financing could adversely affect our operating results.

Increases in liquidity requirements could occur due to, for example, increased commodity prices. Our operating cash flow is dependent on our ability to profitably operate our businesses and overall commodity market conditions. In addition, we

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may need to raise additional financing to fund growth of our businesses. In this market environment, we may experience limited access to incremental financing. This could cause us to defer or cancel growth projects, reduce our business activity or, if we are unable to meet our debt repayment schedules, cause a default in our existing debt agreements. These events could have an adverse effect on our operations and financial position.

Risks Associated With Operations

Decreasing oil and gasoline prices resulting in ethanol trading at a premium to gasoline could negatively impact our ability to operate profitably.

Ethanol has historically traded at a discount to gasoline; however, with the recent fluctuations in gasoline prices, at times ethanol may trade at a premium to gasoline, causing a financial disincentive for discretionary blending of ethanol beyond the rates required to comply with the RFS2. Discretionary blending is an important secondary market which is often determined by the price of ethanol versus the price of gasoline. In periods when discretionary blending is financially unattractive, the demand for ethanol may be reduced. In recent years, the price of ethanol has been less than the price of gasoline which increased demand for ethanol from fuel blenders. However, recently, low oil prices have driven down the price of gasoline which has reduced the spread between the price of gasoline and the price of ethanol which could discourage discretionary blending, dampen the export market and result in a downward market adjustment in the price of ethanol. Any extended period where oil and gasoline prices remain lower than ethanol prices for a significant period of time could have a material adverse effect on our business, results of operation and financial condition which could decrease the value of our units.

Declines in the price of ethanol or distillers grain would significantly reduce our revenues.

The sales prices of ethanol and distillers grains can be volatile as a result of a number of factors such as overall supply and demand, the price of gasoline and corn, levels of government support, and the availability and price of competing products. We are dependent on a favorable spread between the price we receive for our ethanol and distillers grains and the price we pay for corn and natural gas. Any lowering of ethanol and distillers grains prices, especially if it is associated with increases in corn and natural gas prices, may affect our ability to operate profitably. We anticipate the price of ethanol and distillers grains to continue to be volatile in the next fiscal year as a result of the net effect of changes in the price of gasoline and corn and increased ethanol supply. Declines in the prices we receive for our ethanol and distillers grains will lead to decreased revenues and may result in our inability to operate the ethanol plant profitably for an extended period of time which could decrease the value of our units.

One of the most significant factors influencing the price of ethanol has been the substantial increase in ethanol production in recent years. According to the Renewable Fuels Association, domestic ethanol production capacity increased from an annualized rate of 1.5 billion gallons per year in 1999 to a record 16.6 billion gallons in 2019. In addition, if ethanol production margins improve, owners of ethanol production facilities may increase production levels, thereby resulting in further increases in domestic ethanol inventories. Any increase in the supply of ethanol may not be commensurate with increases in the demand for ethanol, thus leading to lower ethanol prices. Also, demand for ethanol could be impaired due to a number of other factors, including regulatory developments and reduced United States gasoline consumption. Reduced gasoline consumption has occurred in the past and could occur in the future as a result of increased gasoline or oil prices or other factors such as increased automobile fuel efficiency. Any of these outcomes could have a material adverse effect on our results of operations, cash flows and financial condition.

Increased demand for ethanol may require an increase in higher percentage blends for conventional automobiles.

Currently, ethanol is blended with conventional gasoline for use in standard (non-flex fuel) vehicles to create a blend which is 10% ethanol and 90% conventional gasoline. In order to expand demand for ethanol, higher percentage blends of ethanol must be utilized in conventional automobiles. Such higher percentage blends of ethanol have become a contentious issue with automobile manufacturers and environmental groups having fought against higher percentage ethanol blends. E15 is a blend which is 15% ethanol and 85% conventional gasoline. Although there have been significant developments towards the availability of E15 in the marketplace and the EPA recently issued a final rule allowing the year-round sale of E15, there are still obstacles to meaningful market penetration by E15. As a result, the approval of E15 may not significantly increase demand for ethanol

Reduced ethanol exports to Brazil could have a negative impact on ethanol prices.

Brazil has historically been a top destination for ethanol produced in the United States. However, last year, Brazil imposed a tariff on ethanol which is produced in the United States and exported to Brazil. This tariff has resulted in a decline in demand

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for ethanol from Brazil and could negatively impact the market price of ethanol in the United States and our ability to profitably operate the ethanol plant.

Our business is not diversified.

Our success depends largely on our ability to profitably operate our ethanol plant. We do not have any other lines of business or other sources of revenue if we are unable to operate our ethanol plant and manufacture ethanol, distillers grains, corn oil and carbon dioxide. If economic or political factors adversely affect the market for ethanol, distillers grains, corn oil or carbon dioxide, we have no other line of business to fall back on. Our business would also be significantly harmed if the ethanol plant could not operate at full capacity for any extended period of time.

We are dependent on MidAm for our steam supply and any failure by it may result in a decrease in our profits or our inability to operate.

Under the Steam Contract, MidAm provides us with steam to operate our Facility until November 30, 2024.  We expect to face periodic interruptions in our steam supply under the Steam Contract.  For this reason, we installed boilers at the Facility to provide a backup natural gas energy source.  We also have entered into a natural gas supply agreement with Encore Energy for our long term natural gas needs, but this does not assure availability at all times.  In addition, our current environmental permits limit the annual amount of natural gas that we may use in operating our gas-fired boiler.

As with natural gas and other energy sources, our steam supply can be subject to immediate interruption by weather, strikes, transportation, conversion to wind turbines and production problems that can cause supply interruptions or shortages.  While we anticipate utilizing natural gas as a temporary heat source in the event of MidAm’s plant outages, an extended interruption in the supply of both steam and natural gas backup could cause us to halt or discontinue our production of ethanol, which would damage our ability to generate revenues.  

Any site near a major waterway system presents potential for flooding risk.

While our site is located in an area designated as above the 100-year flood plain, it does exist within an area at risk of a "500-year flood".  Even though our site is protected by levee systems, its existence next to a major river and major creeks present a risk that flooding could occur at some point in the future.  During the last half of our fiscal year ended September 30, 2011, the Missouri River experienced significant flooding, as a result of unprecedented amounts of rain and snow in the Missouri River basin.  This produced a sustained flood lasting many weeks at a "500-year flood" level (a level which has a 0.2 percent chance of occurring).  While there were levee failures elsewhere, the levees held around our facility.  We did experience minimal rail disruption due to flooding in the surrounding areas to the north and south of the Facility, but our operations were not significantly impacted.

We have procured flood insurance as a means of risk mitigation; however, there is a chance that such insurance will not cover certain costs in excess of our insurance associated with flood damage or loss of income during a flood period.  Our current insurance may not be adequate to cover the losses that could be incurred in a flood of a 500-year magnitude.  

We may experience delays or disruption in the operation of our rail line and loop track, which may lead to decreased revenues.

We have entered into the Track Agreement to service our track and railroad cars.  There may be times when we have to slow production at our ethanol plant due to our inability to ship all of the ethanol and distillers grains we produce, or getting rail cars returned on a timely basis.  Due to increased rail traffic nationally because of shipments of crude oil, rail shipment delays have been experienced from time to time, especially during severe winter conditions. If we cannot operate our plant at full capacity, we may experience decreased revenues which may affect the profitability of the Facility.

We may have conflicting financial interests with Bunge that could cause it to put Bunge's financial interests ahead of ours.

Historically Bunge has been entitled to appoint two of our directors and have been, and are expected to be, involved in substantially all material aspects of our financing and operations. We have also entered into a number of material commercial arrangements with Bunge, as described elsewhere in this report.  

Bunge and its affiliates may have conflicts of interest because Bunge and its employees or agents are involved as owners, creditors and in other capacities with other ethanol plants in the United States.  We cannot require Bunge to devote its full time

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or attention to our activities.  As a result, Bunge may have, or come to have, a conflict of interest in allocating personnel, materials and other resources to our Facility. Such conflicts of interest may reduce our profitability and the value of the units and could result in reduced distributions to investors.

Hedging transactions, which are primarily intended to stabilize our corn costs, may be ineffective and involve risks and costs that could reduce our profitability and have an adverse impact on our liquidity.

We are exposed to market risk from changes in commodity prices.  Exposure to commodity price risk results principally from our dependence on corn in the ethanol production process.  In an attempt to minimize the effects of the volatility of corn costs on our operating profits, we enter into forward corn, ethanol, and distillers grain contracts and engage in other hedging transactions involving over-the-counter and exchange-traded futures and option contracts for corn; provided, we have sufficient working capital to support such hedging transactions.  Hedging is an attempt to protect the price at which we buy corn and the price at which we will sell our products in the future and to reduce profitability and operational risks caused by price fluctuation.  The effectiveness of our hedging strategies, and the associated financial impact, depends upon, among other things, the cost of corn and our ability to sell sufficient amounts of ethanol and distillers grains to utilize all of the corn subject to our futures contracts.  Our hedging activities may not successfully reduce the risk caused by price fluctuations which may leave us vulnerable to high corn prices. We have experienced hedging losses in the past and we may experience hedging losses again in the future.  We may vary the amount of hedging or other price mitigation strategies we undertake, or we may choose not to engage in hedging transactions in the future and our operations and financial conditions may be adversely affected during periods in which corn prices increase. 

Hedging arrangements also expose us to the risk of financial loss in situations where the other party to the hedging contract defaults on its contract or, in the case of over-the-counter or exchange-traded contracts, where there is a change in the expected differential between the underlying price in the hedging agreement and the actual prices paid or received by us.

Our attempts to reduce market risk associated with fluctuations in commodity prices through the use of over-the-counter or exchange-traded futures results in additional costs, such as brokers’ commissions, and may require cash deposits with brokers or margin calls.  Utilizing cash for these costs and to cover margin calls has an impact on the cash we have available for our operations which could result in liquidity problems during times when corn prices fall significantly. Depending on our open derivative positions, we may require additional liquidity with little advance notice to meet margin calls.  We have had to in the past, and in the future will likely be required to, cover margin calls.  While we continuously monitor our exposure to margin calls, we cannot guarantee that we will be able to maintain adequate liquidity to cover margin calls in the future.

Ethanol production is energy intensive and interruptions in our supply of energy, or volatility in energy prices, could have a material adverse impact on our business.

Ethanol production requires a constant and consistent supply of energy.  If our production is halted for any extended period of time, it will have a material adverse effect on our business.  If we were to suffer interruptions in our energy supply, our business would be harmed.  We have entered into the Steam Contract for our primary energy source.  We also are able to operate at full capacity using natural gas-fired boilers, which mitigates the risk of disruption in steam supply.  However, the amount of natural gas we are permitted to use for this purpose is currently limited and the price of natural gas may be significantly higher than our steam price.  In addition, natural gas and electricity prices have historically fluctuated significantly. Increases in the price of steam, natural gas or electricity would harm our business by increasing our energy costs.  The prices which we will be required to pay for these energy sources will have a direct impact on our costs of producing ethanol and our financial results.

Our ability to successfully operate depends on the availability of water.

To produce ethanol, we need a significant supply of water, and water supply and quality are important requirements to operate an ethanol plant.  Our water requirements are supplied by our wells, but there are no assurances that we will continue to have a sufficient supply of water to sustain the Facility in the future, or that we can obtain the necessary permits to obtain water directly from the Missouri River as an alternative to our wells.  

We have executed an output contract for the purchase of all of the ethanol we produce, which may result in lower revenues because of decreased marketing flexibility and inability to capitalize on temporary or regional price disparities.

Bunge is the exclusive purchaser of our ethanol and markets our ethanol in national, regional and local markets. We do not plan to build our own sales force or sales organization to support the sale of ethanol.  As a result, we are dependent on Bunge to sell our principal product.  When there are temporary or regional disparities in ethanol market prices, it could be more financially advantageous to have the flexibility to sell ethanol ourselves through our own sales force.  We have decided not to pursue this route.

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Tank cars used to transport crude oil and ethanol may need to be retrofitted or replaced to meet proposed new rail safety regulations.

The U.S. ethanol industry has long relied on railroads to deliver its product to market. We have leased ethanol cars which may need to be retrofitted or replaced to comply with final regulations adopted by the U.S. Department of Transportation, or DOT, to address concerns related to safety are adopted, which could in turn cause a shortage of compliant tank cars. The regulations call for a phase out within four years of the use of legacy DOT-111 tank cars for transporting highly-flammable liquids, including ethanol. The Canadian government also adopted new tank car standards which align with the new DOT standard and requires that its nation’s rail shippers use sturdier tank cars for transportation of crude oil and ethanol. Compliance with the final regulations could require upgrades or replacements of the Company's tank cars, and could have an adverse effect on the Company's operations as lease costs for tank cars may increase. Additionally, existing tank cars could be out of service for a period of time while such upgrades are made, tightening supply in an industry that is highly dependent on such railcars to transport its product.

    We are increasingly dependent on information technology and disruptions, failures or security breaches of our information technology infrastructure could have a material adverse effect on our operations.

 Information technology is critically important to our business operations. We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic and financial information, to manage a variety of business processes and activities, including production, manufacturing, financial, logistics, sales, marketing and administrative functions. We depend on our information technology infrastructure to communicate internally and externally with employees, customers, suppliers and others. We also use information technology networks and systems to comply with regulatory, legal and tax requirements. These information technology systems, many of which are managed by third parties or used in connection with shared service centers, may be susceptible to damage, disruptions or shutdowns due to failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, computer viruses, attacks by computer hackers or other cybersecurity risks, telecommunication failures, user errors, natural disasters, terrorist attacks or other catastrophic events. If any of our significant information technology systems suffer severe damage, disruption or shutdown, and our disaster recovery and business continuity plans do not effectively resolve the issues in a timely manner, our product sales, financial condition and results of operations may be materially and adversely affected, and we could experience delays in reporting our financial results.

In addition, if we are unable to prevent physical and electronic break-ins, cyber-attacks and other information security breaches, we may encounter significant disruptions in our operations including our production and manufacturing processes, which can cause us to suffer financial and reputational damage, be subject to litigation or incur remediation costs or penalties. Any such disruption could materially and adversely impact our reputation, business, financial condition and results of operations.

Such breaches may also result in the unauthorized disclosure of confidential information belonging to us or to our partners, customers, suppliers or employees which could further harm our reputation or cause us to suffer financial losses or be subject to litigation or other costs or penalties. The mishandling or inappropriate disclosure of non-public sensitive or protected information could lead to the loss of intellectual property, negatively impact planned corporate transactions or damage our reputation and brand image. Misuse, leakage or falsification of legally protected information could also result in a violation of data privacy laws and regulations and have a negative impact on our reputation, business, financial condition and results of operations.

A reduction in ethanol exports to China due to the imposition of a tariff on U.S. ethanol could have a negative impact on ethanol prices.

China has imposed a tariff on ethanol which is produced in the United States and exported to China which has negatively impacted exports of ethanol to China. The decrease has negatively impacted the market price of ethanol in the United States and could adversely impact our ability to profitably operate the Company. On December 13, 2019, the U.S. and China announced an agreement to the first phase of a trade deal (the "Phase One Agreement") where China agreed to purchase billions of dollars in agricultural products in exchange for the U.S. agreeing not to pursue a new round of tariffs starting January 2020. The impact on the ethanol market cannot be determined at this time.

Decreases in exports of distillers grains to China have had, and could continue to have, a negative effect on the price of distillers grains in the U.S. and negatively affect our profitability.

Historically, the United States ethanol industry exported a significant amount of distillers grains to China. However, the Chinese government began an antidumping and countervailing duty investigation related to distillers grains imported from the

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United States and announced a final ruling in 2017 which imposed substantial duties on US distillers grains. The imposition of these duties resulted in plummeting demand from this top importer requiring United States producers to seek out alternatives markets, most notably in Mexico and Canada. The imposition of these duties created significant trade barriers and have significantly decreased demand from China and the prices for distiller’s grains produced in the United States. Although the market has substantially adjusted to the loss of this key market, if alternative markets are not found and maintained, the failure of China to return as a significant export market for U.S. distillers grains combined with lower domestic corn prices could negatively impact the price of distillers grains and the profitability of the Company. On December 13, 2019, the U.S. and China announced the Phase One Agreement where China agreed to purchase billions of dollars in agricultural products in exchange for the U.S. agreeing not to pursue a new round of tariffs starting January 2020. The impact on the distillers grain market cannot be determined at this time.

 Recent trade actions by the Trump Administration, particularly those affecting the agriculture sector and related industries, could adversely affect our operations and profitability.

Government policies and regulations significantly impact domestic agricultural commodity production and trade flows and governmental policies affecting the agricultural industry, such as taxes, trade tariffs, duties, subsidies, import and export restrictions on commodities and commodity products, can influence industry profitability, the planting of certain crops, the location and size of crop production, whether unprocessed or processed commodity products are traded, and the volume and types of imports and exports. International trade disputes can also adversely affect trade flows by limiting or disrupting trade between countries or regions. Future governmental policies, regulations or actions affecting our industry may adversely affect the supply of, demand for and prices of our products, restrict our ability to do business and cause our financial results to suffer.

As a result of recent trade actions announced by the Trump administration and responsive actions announced by our trading partners, including by China, we may experience negative impacts of higher ethanol tariffs and other disruptions to international agricultural trade. The Chinese government recently increased the tariffs on U.S. ethanol imports into China. The increased tariffs are expected to reduce overall U.S. ethanol export demand, which could have a negative effect on U.S. domestic ethanol prices, especially given the current oversupply in domestic ethanol inventories. Despite the recent announcement of the Phase One Agreement, there is no guarantee that such trade deal will increase U.S. exports of ethanol or distillers grains to China or have a positive impact on the ethanol market or the distillers grain market.

Continued price volatility and fluctuations in the price of corn may adversely impact our operating results and profitability.

Our operating results and financial condition are significantly affected by the price and supply of corn.  Because ethanol competes with non-corn derived fuels, we generally are unable to readily pass along increases in corn costs to our customers. At certain levels, corn prices may make the production of ethanol uneconomical.  There is significant price pressure on local corn markets caused by nearby ethanol plants, livestock industries and other corn consuming enterprises.

Additionally, local corn supplies and prices could be adversely affected by rising prices for alternative crops, increasing input costs, changes in government policies, shifts in global markets, or damaging growing conditions such as plant disease or adverse weather conditions, including but not limited to drought.

Decreased prices for ethanol could adversely affect our results of operations and our ability to operate at a profit. 

Our revenues are dependent on market prices for ethanol and prices for ethanol products can vary significantly over time and decreases in price levels could adversely affect our profitability and viability.   Market prices for ethanol can be volatile as a result of a number of factors, including, but not limited to, the availability and price of competing fuels, the overall supply and demand for ethanol and corn, the price of gasoline and corn, and the level of government support. The price for ethanol has some relation to the price for oil and gasoline. The price of ethanol tends to increase as the price of gasoline increases, and the price of ethanol tends to decrease as the price of gasoline decreases, although this may not always be the case.  Any lowering of gasoline prices will likely also lead to lower prices for ethanol and adversely affect our operating results.  Increased production of ethanol may lead to lower prices.  Any downward change in the price of ethanol may decrease our prospects for profitability.

Ethanol is marketed as a fuel additive to reduce vehicle emissions from gasoline, as an octane enhancer to improve the octane rating of the gasoline with which it is blended and as a replacement for gasoline. As a result, ethanol prices are influenced by the supply of and demand for gasoline. Our results of operations may be adversely impacted if the demand for, or the price of gasoline decreased dramatically without a similar price reduction in corn. Market prices for ethanol produced in the United States are also influenced by the supply of and demand for imported ethanol. Imported ethanol is not subject to an import tariff and under

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RFS2 sugarcane ethanol imported from Brazil has been one of the most economical means for obligated parties to meet the advanced biofuel standards.

Decreased prices for distillers grains could adversely affect our results of operations and our ability to operate at a profit.

Distillers grains compete with other protein-based animal feed products. The price of distillers grains may decrease when the prices of competing feed products decrease. The prices of competing animal feed products are based in part on the prices of the commodities from which these products are derived. Downward pressure on commodity prices, such as soybeans, will generally cause the price of competing animal feed products to decline, resulting in downward pressure on the price of distillers grains.

Historically, sales prices for distillers grains have been correlated with prices of corn. However, there have been occasions when the price increase for this co-product has lagged behind increases in corn prices. In addition, our distillers grains co-product competes with products made from other feedstocks, the cost of which may not have risen as corn prices have risen. Consequently, the price we may receive for distillers grains may not rise as corn prices rise, thereby lowering our cost recovery percentage relative to corn.

Due to industry increases in U.S. dry mill ethanol production, the production of distillers grains in the United States has increased dramatically, and this trend may continue. This may cause distillers grains prices to fall in the United States, unless demand increases or other market sources are found. To date, demand for distillers grains in the United States has increased roughly in proportion to supply. We believe this is because U.S. farmers use distillers grains as a feedstock, and distillers grains are slightly less expensive than corn, for which it is a substitute. However, if prices for distillers grains in the United States fall, it may have an adverse effect on our business.  

We compete with larger, better financed entities, which could negatively impact our ability to operate profitably.

There is significant competition among ethanol producers with numerous producers and privately-owned ethanol plants planned and operating throughout the Midwest and elsewhere in the United States.  Our business faces a competitive challenge from larger plants, from plants that can produce a wider range of products than we can, and from other plants similar to ours.  Large ethanol producers such as Archer Daniels Midland, Flint Hills Resources LP, Green Plains Inc., Valero Renewable Fuels and POET Biorefining, among others, are capable of producing a significantly greater amount of ethanol than we produce. Further, many believe that there will be further consolidation occurring in the ethanol industry in the near future which will likely lead to a few companies who control a significant portion of the ethanol production market. We may not be able to compete with these larger entities. These larger ethanol producers may be able to affect the ethanol market in ways that are not beneficial to us which could affect our financial performance.

Increased ethanol industry penetration by oil companies may adversely impact our margins.

The ethanol industry is a highly competitive environment and it is principally comprised of smaller entities that engage exclusively in ethanol production and large integrated grain companies that produce ethanol along with their base grain businesses. We have historically always faced competition with other small independent producers as well as larger, better financed producers for capital, labor, corn and other resources. Until recently, oil companies, petrochemical refiners and gasoline retailers have not been engaged in ethanol production to a large extent. These companies, however, form the primary distribution networks for marketing ethanol through blended gasoline. During the past few years, several large oil companies have begun to penetrate the ethanol production market. If these companies increase their ethanol plant ownership or other oil companies seek to engage in direct ethanol production, there may be a decrease in the demand for ethanol from smaller independent ethanol producers like us which could result in an adverse effect on our operations, cash flows and financial condition.

Changes and advances in ethanol production technology could require us to incur costs to update our Facility or could otherwise hinder our ability to compete in the ethanol industry or operate profitably.

Advances and changes in the technology of ethanol production are expected to occur.  Such advances and changes may make the ethanol production technology installed in our plant less desirable or obsolete.  These advances could also allow our competitors to produce ethanol at a lower cost than us.  If we are unable to adopt or incorporate technological advances, our ethanol production methods and processes could be less efficient than our competitors, which could cause our plant to become uncompetitive or completely obsolete.  If our competitors develop, obtain or license technology that is superior to ours or that makes our technology obsolete, we may be required to incur significant costs to enhance or acquire new technology so that our ethanol production remains competitive.  Alternatively, we may be required to seek third-party licenses, which could also result in significant expenditures.  We cannot guarantee or assure that third-party licenses will be available or, once obtained, will continue to be available on

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commercially reasonable terms, if at all.  These costs could negatively impact our financial performance by increasing our operating costs and reducing our net income.

Competition from the advancement of alternative fuels may decrease the demand for ethanol and negatively impact our profitability.

Alternative fuels, gasoline oxygenates and ethanol production methods are continually under development.  A number of automotive, industrial and power generation manufacturers are developing alternative clean power systems using fuel cells or clean burning gaseous fuels.  Like ethanol, the emerging fuel cell industry offers a technological option to address increasing worldwide energy costs, the long-term availability of petroleum reserves and environmental concerns.  Fuel cells have emerged as a potential alternative to certain existing power sources because of their higher efficiency, reduced noise and lower emissions.  Fuel cell industry participants are currently targeting the transportation, stationary power and portable power markets in order to lower fuel costs, decrease dependence on crude oil and reduce harmful emissions.  If the fuel cell and hydrogen industries continue to expand and gain broad acceptance, and hydrogen becomes readily available to consumers for motor vehicle use, we may not be able to compete effectively.  This additional competition could reduce the demand for ethanol, which would negatively impact our profitability.

Corn-based ethanol may compete with cellulose-based ethanol in the future, which could make it more difficult for us to produce ethanol on a cost-effective basis.

Most ethanol produced in the U.S. is currently produced from corn and other raw grains, such as milo or sorghum - especially in the Midwest.  The current trend in ethanol production research is to develop an efficient method of producing ethanol from cellulose-based biomass, such as agricultural waste, forest residue, municipal solid waste and energy crops.  This trend is driven by the fact that cellulose-based biomass is generally cheaper than corn, and producing ethanol from cellulose-based biomass would create opportunities to produce ethanol in areas which are unable to grow corn.  The Energy Independence and Security Act of 2007 and the 2008 Farm Bill offer a very strong incentive to develop commercial scale cellulosic ethanol. The statutory volume requirement in the RFS requires that 16 billion gallons per year of advanced bio-fuels be consumed in the United States by 2022. Additionally, state and federal grants have been awarded to several companies who are seeking to develop commercial-scale cellulosic ethanol plants. As a result, at least three companies have reportedly already begun producing on a commercial scale and a handful of other companies have begun construction on commercial scale cellulosic ethanol plants some of which may be completed in the near future. If an efficient method of producing ethanol from cellulose-based biomass is developed, we may not be able to compete effectively.  It may not be practical or cost-effective to convert our Facility into a plant which will use cellulose-based biomass to produce ethanol.  If we are unable to produce ethanol as cost-effectively as cellulose-based producers, our ability to generate revenue will be negatively impacted.

Depending on commodity prices, foreign producers may produce ethanol at a lower cost than we can, which may result in lower ethanol prices which would adversely affect our financial results.

We face competition from foreign ethanol producers with Brazil currently the second largest ethanol producer in the world. Brazil’s ethanol production is sugarcane based, as opposed to corn based, and, depending on feedstock prices, may be less expensive to produce. Under RFS2 certain parties are obligated to meet an advanced biofuel standard and sugarcane ethanol imported from Brazil has historically been one of the most economical means for obligated parties to meet this standard. Other foreign producers may be able to produce ethanol at lower input costs, including costs of feedstock, facilities and personnel, than we can.

While foreign demand, transportation costs and infrastructure constraints may temper the market impact throughout the United States, competition from imported ethanol may affect our ability to sell our ethanol profitably, which may have an adverse effect on our operations, cash flows and financial position.

If significant additional foreign ethanol production capacity is created, such facilities could create excess supplies of ethanol on world markets, which may result in lower prices of ethanol throughout the world, including the United States. Such foreign competition is a risk to our business. Any penetration of ethanol imports into the domestic market may have a material adverse effect on our operations, cash flows and financial position.

Risks Associated With Government Regulation and Subsidization

The ethanol industry is highly dependent on government mandates relating to the production and use of ethanol and changes to such mandates and related regulations could adversely affect the market for ethanol and our results of operations.

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The domestic market for ethanol is largely dictated by federal mandates for blending ethanol with gasoline. Future demand for ethanol will be largely dependent upon the economic incentives to blend based upon the relative value of gasoline versus ethanol, taking into consideration the relative octane value of ethanol, environmental requirements and the RFS mandate. The RFS mandate helps support a market for ethanol that might disappear without this incentive.

Annually, the EPA is supposed to pass a rule that establishes the number of gallons of different types of renewable fuels that must be used in the United States which is called the renewable volume obligations. In the past, the EPA has set the renewable volume obligations below the statutory volume requirements. On November 30, 2018, the EPA issued the final rule that set the 2019 annual volume requirements for renewable fuel at 19.2 billion gallons per year (the "Final 2019 Rule"). On July 5, 2019, the EPA issued a proposed rule for 2020 which set the annual volume requirements renewable fuel at 20.04 billion gallons of renewable fuel (the "Proposed 2020 Rule"). Both the Final 2019 Rule and the Proposed 2020 Rule maintained the number of gallons that may be met by conventional renewable fuels such as corn based ethanol at 15.0 billion gallons. Although the volume requirements set forth in the Final 2019 Rule are slightly higher than the final 2018 volume requirements (the "Final 2018 Rule") and the Proposed 2020 Rule volume requirements are slightly higher than those set forth in the Final 2019 Rule, the volume requirements under the Final 2018 Rule, the Final 2019 Rule and the Proposed 2020 Rule are all still significantly below the 26 billion gallons, 28 billion gallons and 30 billion gallons, respectively, statutory mandates, with significant reductions in the volume requirements for advanced biofuels as well.

Under the RFS, if mandatory renewable fuel volumes are reduced by at least 20% for two consecutive years, the EPA is required to modify, or reset, statutory volumes through 2022. The Final 2018 Rule represented the first year the total proposed volume requirements were more than 20% below statutory levels and the Final 2019 Rule is approximately 29% below the statutory levels representing the second consecutive year of reductions of more than 20% below the statutory mandates and therefore, triggering the mandatory reset under the RFS. The EPA is now statutorily required to modify the statutory volumes through 2022 within one year of the trigger event, based on the same factors used to set the volume requirements post-2022. These factors include environmental impact, domestic energy security, expected production, infrastructure impact, consumer costs, job creation, price of agricultural commodities, food prices, and rural economic development. If the EPA were to significantly reduce the statutory volume requirements under the RFS or if the RFS were to be otherwise reduced or eliminated by the exercise of the EPA waiver authority or by Congress, the market price and demand for ethanol could decrease which will negatively impact our financial performance.

The EPA has recently expanded its use of waivers to small refineries. The effect of these waivers is that the refinery is no longer required to earn or purchase blending credits, known as RINs, negatively affecting ethanol demand and resulting in lower ethanol prices. On October 15, 2019, the EPA released a supplemental notice seeking additional comment on a proposed rule on adjustments to the way that annual renewable fuel percentages are calculated. The supplemental notice was issued in response to an announcement by President Trump of a proposed plan to require refiners not exempt from the rules to blend additional gallons of ethanol to make up for the gallons exempted by the EPA's expanded use of waivers to small refineries. The proposed plan was expected to calculate the volume that refiners were required to blend by using a three-year average of exempted gallons. However, the EPA proposed to use a three-year average to account for the reduction in demand resulting from the waivers using an the number of gallons of relief recommended by the United States Department of Energy. If the EPA continues to grant waivers to smaller refineries and the Trump Administration fails to take any action to reallocate ethanol gallons lost to such waivers, the market price and demand for ethanol would be adversely affected which would negatively impact our financial performance.

The compliance mechanism for RFS2 is the generation of renewable identification numbers, or RINs, which are generated and attached to renewable fuels such as the ethanol we produce and detached when the renewable fuel is blended into the transportation fuel supply. Detached RINs may be retired by obligated parties to demonstrate compliance with RFS2 or may be separately traded in the market. The market price of detached RINs may affect the price of ethanol in certain U.S. markets as obligated parties may factor these costs into their purchasing decisions. Moreover, at certain price levels for various types of RINs, it becomes more economical to import foreign sugarcane ethanol. If changes to RFS2 result in significant changes in the price of various types of RINs, it could negatively affect the price of ethanol, and our operations could be adversely impacted.

Federal law mandates the use of oxygenated gasoline in the winter in areas that do not meet Clean Air Act standards for carbon monoxide. If these mandates are repealed, the market for domestic ethanol could be significantly reduced. Additionally, flexible-fuel vehicles receive preferential treatment in meeting corporate average fuel economy, or CAFE, standards. However, high blend ethanol fuels such as E85 result in lower fuel efficiencies. Absent the CAFE preferences, it may be unlikely that auto manufacturers would build flexible-fuel vehicles. Any change in these CAFE preferences could reduce the growth of E85 markets and result in lower ethanol prices, which could adversely impact our operating results.

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To the extent that such federal or state laws or regulations are modified, the demand for ethanol may be reduced, which could negatively and materially affect our ability to operate profitably.

We are subject to extensive environmental regulation and operational safety regulations that impact our expenses and could reduce our profitability.

Ethanol production involves the emission of various airborne pollutants, including particulate matters, carbon monoxide, oxides of nitrogen, volatile organic compounds and sulfur dioxide. We are subject to regulations on emissions from the EPA and the IDNR (Iowa Department of Natural Resources). The EPA’s and IDNR’s environmental regulations are subject to change and often such changes are not favorable to industry.  Consequently, even if we have the proper permits now, we may be required to invest or spend considerable resources to comply with future environmental regulations.

Our failure to comply or the need to respond to threatened actions involving environmental laws and regulations may adversely affect our business, operating results or financial condition. We must follow procedures for the proper handling, storage, and transportation of finished products and materials used in the production process and for the disposal of waste products.  In addition, state or local requirements also restrict our production and distribution operations. We could incur significant costs to comply with applicable laws and regulations.  Changes to current environmental rules for the protection of the environment may require us to incur additional expenditures for equipment or processes.

We could be subject to environmental nuisance or related claims by employees, property owners or residents near the Facility arising from air or water discharges.  Ethanol production has been known to produce an odor to which surrounding residents could object.  We believe our plant design mitigates most odor objections.  However, if odors become a problem, we may be subject to fines and could be forced to take costly curative measures.  Environmental litigation or increased environmental compliance costs could significantly increase our operating costs.

We are subject to federal and state laws regarding operational safety.  Risks of substantial compliance costs and liabilities are inherent in ethanol production.  Costs and liabilities related to worker safety may be incurred.  Possible future developments-including stricter safety laws for workers or others, regulations and enforcement policies and claims for personal or property damages resulting from our operation could result in substantial costs and liabilities that could reduce the amount of cash that we would otherwise have to distribute to members or use to further enhance our business.

Carbon dioxide may be regulated by the EPA in the future as an air pollutant, requiring us to obtain additional permits and install additional environmental mitigation equipment, which may adversely affect our financial performance.

Our Facility emits carbon dioxide as a by-product of the ethanol production process and we sell a portion of our carbon dioxide by-product to Air Products and Chemicals, Inc. pursuant to a Carbon Dioxide Purchase and Sale Agreement. The United States Supreme Court has classified carbon dioxide as an air pollutant under the Clean Air Act in a case seeking to require the EPA to regulate carbon dioxide in vehicle emissions.  Similar lawsuits have been filed seeking to require the EPA to regulate carbon dioxide emissions from stationary sources such as our ethanol plant under the Clean Air Act.  While there are currently no regulations applicable to us concerning carbon dioxide, if Iowa or the federal government, or any appropriate agency, decides to regulate carbon dioxide emissions by plants such as ours, we may have to apply for additional permits or we may be required to install carbon dioxide mitigation equipment or take other steps unknown to us at this time in order to comply with such law or regulation.  Compliance with future regulation of carbon dioxide, if it occurs, could be costly and may prevent us from operating the Facility profitably.

The California Low Carbon Fuel Standard may decrease demand for corn based ethanol which could negatively impact our profitability.

California passed a Low Carbon Fuels Standard ("LCFS") which requires that renewable fuels used in California must accomplish certain reductions in greenhouse gases which reductions are measured using a lifecycle analysis. The California LCFS and other state regulations aimed at reducing greenhouse gas emissions could preclude corn-based ethanol produced in the Midwest from being used in California. California represents a significant ethanol demand market and therefore, if we are unable to supply corn-based ethanol to California, this could negatively impact our ability to profitably operate the ethanol plant.

Our site borders nesting areas used by endangered bird species, which could impact our ability to successfully maintain or renew operating permits.  The presence of these species, or future shifts in its nesting areas, could adversely impact future operating performance.

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The Piping Plover ( Charadrius melodus ) and Least Tern ( Sterna antillarum ) use the fly ash ponds of the existing MidAm power plant for their nesting grounds.  The birds are listed on the state and federal threatened and endangered species lists.  The IDNR determined that our rail operation, within specified but acceptable limits, does not interfere with the birds’ nesting patterns and behaviors.  However, it was necessary for us to modify our construction schedules, plant site design and track maintenance schedule to accommodate the birds’ patterns.  We cannot foresee or predict the birds’ future behaviors or status.  As such, we cannot say with certainty that endangered species related issues will not arise in the future that could negatively affect the plant’s operations.

Item 2.   Properties.

We own the Facility site located near Council Bluffs, Iowa, which consists of three parcels totaling nearly 275 acres.  This property is encumbered under the mortgage agreement with our Lender.  We lease 45 acres on the south end of the property to an unrelated third party for farming, and grow corn for our own use on ten acres.

Item 3.   Legal Proceedings.

On August 25, 2010, the Company entered into a Tricanter Purchase and Installation Agreement (the “Tricanter Agreement”) with ICM, pursuant to which ICM sold the Company a tricanter corn oil separation system (the “Tricanter Equipment”). Under the Tricanter Agreement, ICM has agreed to indemnify the Company from any and all lawsuit and damages with respect to the Company's installation and use of the Tricanter Equipment.

On August 5, 2013, GS Cleantech Corporation (“GS Cleantech”) filed a suit in United States District Court for the Southern District of Iowa, Western Division (Case No. 2:13-CV-00021-JAJ-CFB), naming the Company as a defendant (the “Lawsuit”). The Lawsuit alleges infringement of patents assigned to GS Cleantech with respect to the corn oil separation technology used in the Tricanter Equipment. The Lawsuit seeks preliminary and permanent injunctions against the Company to prevent future infringement on the patents owned by GS CleanTech and damages in an unspecified amount adequate to compensate GS CleanTech for the alleged patent infringement, plus attorney's fees. The Lawsuit became part of multidistrict litigation against numerous parties and was transferred to the Federal District Court for the Southern District of Indiana (the “Court”). 

On October 23, 2014, the patents owned by GS CleanTech in the Lawsuit were found to be invalid by the SD of Indiana District Court. On January 15, 2015, the Company received a partial summary judgment finding in the Lawsuit by the SD of Indiana District Court consistent with the October 23, 2014 ruling. In September 2016, the Court issued an opinion rendering the CleanTech patents unenforceable due to inequitable conduct. This ruling is in addition to the prior favorable court decisions on non-infringement.  GS Cleantech has asked the Court to reconsider its decision regarding inequitable conduct. In addition, GS Cleantech's appeal concerning its loss on summary judgment is currently pending and being briefed in the Court of Appeals for the Federal Circuit.

Under the Tricanter Agreement, ICM is obligated to, and has retained counsel at its expense to defend the Company in this Lawsuit. The Company is not currently able to predict the final outcome of this Lawsuit with any degree of certainty. The Company expects ICM to continue to vigorously defend the Company in further proceedings. However, in the event that damages are awarded as a result of this Lawsuit and, if ICM is unable to fully indemnify the Company for any reason, the Company could be liable for such damages. In addition, the Company may need to cease use of its current oil separation process and seek out a replacement or execute a license with GS CleanTech.

Item 4.   Mine Safety Disclosures.

Not applicable.

PART II

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

As of September 30, 2019, we had (i) 8,993 Series A Units issued and outstanding held by 846 persons, (ii) 3,334 Series B Units issued and outstanding held by Bunge, and (iii) 1,000 Series C Units issued and outstanding held by ICM.  We do not have any established trading market for our units, nor is one contemplated.  However, we do provide access to a Qualified Matching Service for our members, which provides a system for limited transfers of our units.

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In connection with the payoff of subordinated debt held by ICM Investments, LLC (“ICM”), we entered into the SIRE ICM Unit Agreement dated December 17, 2014 (the “Unit Agreement”).  Under the Unit Agreement, we granted ICM the right to sell to us ICM’s 1,000 Series C and 18 Series A Membership Units (the “ICM Units”) commencing anytime during the earliest of several alternative dates and events at the greater of $10,897 per unit or the fair market value (as defined in the agreement) on the date of exercise (the “Put Right”).

On August 16, 2019, we received notice of the exercise by ICM of its Put Right, applicable for all of the Series C and Series A Units held by ICM.  In its notice, ICM waived its right to a determination of fair market value and ICM agreed to accept the total of Eleven Million Ninety-Three Thousand One Hundred and Forty Six Dollars ($11,093,146), which is the purchase price of Ten Thousand Eight Hundred Ninety-Seven Dollars ($10,897) per unit stated in the Unit Agreement, multiplied by 1,000 Series C Units and 18 Series A Membership Units. On November 15, 2019, we closed the repurchase transaction and paid ICM $11, 093,146 for the 1,000 Series C Units and 18 Series A Units. As a result, as of the date of this report, we have (i) 8,975 Series A Units issued and outstanding held by 845 persons and (ii) 3,334 Series B Units issued and outstanding held by Bunge.

To date, we have made distributions totaling $28.9 million to our members, with no distributions made during Fiscal 2019 and distributions totaling $6.7 million in Fiscal 2018. We cannot be certain if or when we will be able to make additional distributions.  Further, our ability to make distributions is restricted under the terms of the Credit Agreement.

Item 6.     Selected Financial Data.

The following table presents selected financial and operating data as of the dates and for the periods indicated. The selected balance sheet financial data for the years ended September 30, 2019 and 2018 and the selected income statement data and other financial data for such years have been derived from the audited financial statements included elsewhere in this Form 10-K. You should read the following table in conjunction with "Item 7- Management Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and the accompanying notes included elsewhere in this Form 10-K. Among other things, those financial statements include more detailed information regarding the basis of presentation for the following financial data.

	September 30, 2019		September 30, 2018
	Amounts		Amounts
	in 000's		in 000's
Balance Sheet Data
Cash and cash equivalents	$	1,075	$	1,440
Total current assets	27,967		29,025
Total assets	$	140,863	$	142,631
Total current liabilities	$	21,854	$	18,707
Total long term liabilities	29,704		26,122
Total liabilities	51,558		44,829
Total members' equity	89,305		97,802
Total liabilities and members' equity	$	140,863	$	142,631

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	Fiscal 2019			Fiscal 2018
	Amounts			Amounts
	in 000's			in 000's
Income Statement
Revenues	$	216,993		$	214,990
Cost of Goods Sold	219,017			211,350
Gross Margin (Loss)	(2,024		)	3,640
General and Administrative Expenses	4,837			4,972
Interest expense and other income, net	999			1,672
Change in fair value of put option liability	637			(300		)
Net (Loss)	$	(8,497	)	$	(2,704	)
(Loss) per Unit:
(Loss) per unit -basic	$	(637.58	)	$	(202.90	)
(Loss) per unit -diluted	$	(637.58	)	$	(202.90	)

Modified EBITDA

Modified EBITDA is defined as net income (loss) plus interest expense net of interest income, plus depreciation and amortization, or EBITDA, then adjusted for unrealized hedging losses, and other non-cash credits and charges to net income.  Modified EBITDA is not required by or presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), and should not be considered as an alternative to net income, operating income or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities or as a measure of our liquidity.

We present Modified EBITDA because we consider it to be an important supplemental measure of our operating performance and it is considered by our management and Board of Directors as an important operating metric in their assessment of our performance.

We believe Modified EBITDA allows us to better compare our current operating results with corresponding historical periods and with the operational performance of other companies in our industry because it does not give effect to potential differences caused by variations in capital structures (affecting relative interest expense, including the impact of write-offs of deferred financing costs when companies refinance their indebtedness), the amortization of intangibles (affecting relative amortization expense), unrealized hedging losses and other items that are unrelated to underlying operating performance.  We also present Modified EBITDA because we believe it is frequently used by securities analysts and investors as a measure of performance.   There are a number of material limitations to the use of Modified EBITDA as an analytical tool, including the following:

• Modified EBITDA does not reflect our interest expense or the cash requirements to pay our interest.  Because we have borrowed money to finance our operations, interest expense is a necessary element of our costs and our ability to generate profits and cash flows.  Therefore, any measure that excludes interest expense may have material limitations.

• Although depreciation and amortization are non-cash expenses in the period recorded, the assets being depreciated and amortized may have to be replaced in the future, and Modified EBITDA does not reflect the cash requirements for such replacement.   Because we use capital assets, depreciation and amortization expense is a necessary element of our costs and ability to generate profits.  Therefore, any measure that excludes depreciation and amortization expense may have material limitations.

We compensate for these limitations by relying primarily on our GAAP financial measures and by using Modified EBITDA only as supplemental information.  We believe that consideration of Modified EBITDA, together with a careful review of our GAAP financial measures, is the most informed method of analyzing our operations.  Because Modified EBITDA is not a measurement determined in accordance with GAAP and is susceptible to varying calculations, Modified EBITDA, as presented, may not be comparable to other similarly titled measures of other companies.  The following table provides a reconciliation of Modified EBITDA to net income (loss):

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	Fiscal 2019			Fiscal 2018
	Amounts			Amounts
	in 000's (except per unit)			in 000's (except per unit)
Net (Loss)	$	(8,497	)	$	(2,704	)
Interest Expense, Net	1,069			992
Depreciation	10,230			11,372
EBITDA	2,802			9,660
Unrealized Hedging loss (gain)	(473		)	245
Change in fair value of put option liability	637			(300		)
Modified EBITDA	$	2,966		$	9,605

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operation.

General Overview and Recent Developments

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our financial condition and results of operations. This discussion should be read in conjunction with the financial statements included herewith and notes to the financial statements thereto and the risk factors contained herein.

The Company is an Iowa limited liability company located in Council Bluffs, Iowa, formed in March, 2005. The Company is permitted to produce 140 million gallons of ethanol.  We began producing ethanol in February, 2009 and sell our ethanol, distillers grains, and corn oil in the United States, Mexico and the Pacific Rim.  

On November 26, 2019, the EPA approved the Company's petition as an "Efficient Producer" to increase the D-6 RINs generated for up to 147 million gallons of ethanol produced annually, provided the non-grandfathered ethanol produced satisfies the 20% lifecycle GHG reduction requirements specified in the Clean Air Act for renewable fuel. The Company must comply with all registration provisions in order to register for the production of non-grandfathered ethanol, and the registration application must be accepted by the EPA before the facility is eligible to generate RIN's for non-grandfathered ethanol produced. The Company anticipates completing the registration process by June 2020.    

Industry Factors Affecting our Results of Operations

For Fiscal 2019 compared to Fiscal 2018, the average price per gallon of ethanol sold decreased 2.3%. Although there has been an increased supply of ethanol, we have also seen increased prices for crude oil and gasoline in Fiscal 2019 compared to Fiscal 2018 on relatively flat consumption.

Corn prices increased during Fiscal 2019 due to adverse weather conditions during planting season and mid-spring flooding in some parts of the Midwest. Prices for corn are expected to continue to increase as a result of the lower levels of production and yields forecasted by the USDA. Weather, world supply and demand, current and anticipated stocks, agricultural policy and other factors can contribute to volatility in corn prices. If corn prices continue to rise, it will have a negative effect on our operating margins unless the price of ethanol and distillers grains out paces rising corn prices.

Management anticipates that ethanol prices will continue to change in relation to changes in corn and energy prices. If corn, crude oil and gasoline prices remain low or further decrease, that could have a significant negative impact on the market price of ethanol and our profitability particularly should ethanol stocks remain high. A decline in U.S. ethanol exports due to the premium on the price of ethanol as compared to unleaded gasoline, or other factors may contribute to higher ethanol stocks unless additional demand can be created from other foreign markets or domestically. In addition, the EPA's reduction of the renewable volume obligations set forth in the RFS may limit demand for ethanol negatively impacting ethanol prices.

In addition, market forces may continue to have a negative impact on distiller grain prices including lower export demand as a result of the imposition of anti-subsidy duties and in response to U.S. tariffs by the Chinese government on the import of

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distillers grains produced in the U.S. in January 2018. These duties have adversely impacted export volume to China and decreased market prices. We cannot forecast how much demand from China will come back into the marketplace and distillers grains prices could remain low unless additional demand can be created from other foreign markets or domestically. Domestic demand for distillers grains could also remain low if corn prices decline and end-users switch to lower priced alternatives.

Results of Operations

The following table shows our results of operations, stated as a percentage of revenue for Fiscal 2019 and 2018.

	Fiscal 2019					Fiscal 2018
	Amounts			% of Revenues		Amounts			% of Revenues
	in 000's					in 000's
Income Statement Data
Revenues	$	216,993		100.0	%	$	214,990		100.0	%
Cost of Goods Sold
Material Costs	161,715			74.5	%	148,804			69.2	%
Variable Production Expense	31,498			14.5	%	32,504			15.1	%
Fixed Production Expense	25,804			11.9	%	30,042			14.0	%
Gross Margin (Loss)	(2,024		)	(0.9	)%	3,640			1.7	%
General and Administrative Expenses	4,837			2.2	%	4,972			2.3	%
Other Expenses	1,636			0.8	%	1,372			0.7	%
Net (Loss)	$	(8,497	)	(3.9	)%	$	(2,704	)	(1.3	)%

Revenues

Our revenue from operations is derived from three primary sources: sales of ethanol, distillers grains, and corn oil.  The chart at the bottom of this section displays statistical information regarding our revenues. The increase in revenue from Fiscal 2019 to Fiscal 2018 was due to the offset of ethanol revenue decreases by increased revenue in other revenue categories. For our main product ethanol, there was a decrease in the average price per gallon of ethanol of approximately 2.3% in Fiscal 2019 as compared to Fiscal 2018 (which was partially offset by a 0.2% increase in the volume of ethanol sold during Fiscal 2019 over Fiscal 2018). Offsetting the ethanol revenue decrease was an increase of 0.6% in the volume of distillers grains sold coupled with an increase in the average price per ton of distillers grains of approximately 10.9%. Corn oil revenue also increased 16.9% in Fiscal 2019 compared to Fiscal 2018 due to an increase of 5.5% in the price of corn oil as compared to the price of corn oil during Fiscal 2018 coupled with an increase of 10.8% in tons sold in Fiscal 2019 as compared to Fiscal 2018.

The decrease in the price of ethanol was due to lower industry production because of small refiner waivers granted by the EPA without requiring these gallons to be reallocated to other larger users. Lower domestic demand as consumer driving remained relatively flat compared to last year, and lower export demand resulted in an extremely tight year for the ethanol industry. In addition, because ethanol prices are typically directionally consistent with changes in corn and energy prices, higher corn prices were impacted by rising crude oil and gasoline prices throughout the fiscal year which did contribute to the unfavorable effect on ethanol prices.

The 10.9% increase in the average price of distillers grains was a contributing factor to the almost 12% increase to this revenue category. This increase, resulted principally from increased domestic demand due to local plant shutdown and slowdowns somewhat offset by a reduction in export demand during Fiscal 2019 as compared to Fiscal 2018.

During Fiscal 2019, corn oil prices increased 5.5% compared to Fiscal 2018, as a result of an increase in corn ground, and a 9% increase in yield efficiency in Fiscal 2019 as compared to Fiscal 2018. Increased market prices resulting from the higher prices for soybean oil which can be used as a substitute for corn oil in certain circumstances and is frequently a competing raw material to corn oil for biodiesel production. The price increase was enhanced by a 10.8% increase in tons sold. Although management believes that corn oil prices will remain relatively steady at the current price levels, prices may decrease if there is

30

an oversupply of corn oil production resulting from increased production rates at ethanol plants or if biodiesel producers begin to utilize lower-priced alternatives such as soybean oil unless an alternative demand for corn oil can be found.

	Fiscal 2019				Fiscal 2018
	Amounts in 000's		% of Revenues		Amounts in 000's		% of Revenues
Product Revenue Information
Ethanol	$	163,533	75.4	%	$	167,441	77.9	%
Distiller's Grains	41,154		19.0	%	36,883		17.2	%
Corn Oil	11,116		5.1	%	9,509		4.4	%
Other	1,190		0.5	%	1,157		0.5	%

Cost of Goods Sold

Our cost of goods sold as a percentage of our revenues was 100.9% and 98.3% for Fiscal 2019 and 2018, respectively, and increased due to the average price per gallon of ethanol decreasing by approximately 2.3% in Fiscal 2019 as compared to Fiscal 2018.  Our two primary costs of producing ethanol and distillers grains are corn and energy, with steam and natural gas as our primary energy sources.   Cost of goods sold also includes net (gains) or losses from derivatives and hedging relating to corn.   Material costs increased as a result of the average price of corn used in ethanol production per bushel increasing by 2.5% in Fiscal 2019 from Fiscal 2018 on a 1.1% increase in production. 

Realized and unrealized (gains) or losses related to our derivatives and hedging related to corn resulted in a decrease of $2.8 million in our cost of goods sold for Fiscal 2019, compared to a decrease of $1.7 million in our cost of goods sold for Fiscal 2018.  We recognize the gains or losses that result from the changes in the value of our derivative instruments related to corn in cost of goods sold as the changes occur.  As corn prices fluctuate, the value of our derivative instruments are impacted, which affects our financial performance.  We anticipate continued volatility in our cost of goods sold due to the timing of the changes in value of the derivative instruments relative to the cost and use of the commodity being hedged. 

 Our average steam and natural gas energy cost increased 2.6% per MMBTU comparing Fiscal 2019 to Fiscal 2018. Variable production expenses showed an increase when comparing Fiscal 2019 to Fiscal 2018 due to the increase in energy costs resulting from the higher average cost per MMBTU of steam and natural gas which was partially offset by the lower cost of chemicals. Fixed production expenses were lower when comparing Fiscal 2019 to Fiscal 2018 due to lower repairs and maintenance charges,lease expenses due to resigning the railcar agreement and lower depreciation expenses.

General & Administrative Expense

Our general and administrative expenses as a percentage of revenues were 2.2% for Fiscal 2019 and 2.3% for Fiscal 2018.  General and administrative expenses include salaries and benefits of administrative employees, professional fees and other general administrative costs.  Our general and administrative expenses for Fiscal 2019 decreased 2.7% compared to Fiscal 2018.  The decrease in general and administrative expenses from Fiscal 2018 to Fiscal 2019 is due mainly to lower legal and professional fees.

Other Expense

Our other expenses were approximately $1.6 million and $1.4 million for Fiscal 2019 and 2018, respectively, and were approximately 0.8% and 0.7% of our revenues for Fiscal 2019 and 2018, respectively. The majority of this increase in other expenses was a result of the true up of the ICM put option partially offset by a one time 2018 write off of an investment.

Liquidity and Capital Resources

As of September 30, 2019, we had a cash balance of $1.1 million, $12.1 million available under the term revolver and working capital of $6.1 million.

In June 2014, the Company entered into a $66.0 million Senior Credit Agreement (the “Credit Agreement”) with Farm Credit Services of America, FLCA (“FCSA”) and CoBank, ACB, as cash management provider and agent (“CoBank”). The

31

proceeds of the Credit Agreement were used to refinance senior bank debt previously outstanding and scheduled to mature in August 2014. The Credit Agreement provides us with a term loan of $30 million, due in 2019, and a revolving term loan of $36 million, due in 2023. The interest rate on the Credit Agreement is LIBOR plus 3.35%. The Credit Agreement resulted in a significantly lower interest rate than under the prior credit facility. The Company’s term loan and revolving term loan requires it to comply with specified financial covenants related to minimum local net worth, minimum current working capital, a minimum debt service coverage ratio and limitation on unit holder distributions. The Company was not in compliance with these covenants at September 30, 2019, but received a waiver from Cobank.

Effective November 8, 2019, we entered into Amendment No. 4 to the Credit Agreement (the “Fourth Amendment”). The following are the key modifications made by the Fourth Amendment:

• The existing term note is replaced by an Amended and Restated Term Note with a maximum principal amount of $30,000,000, a maturity date of September 2024, principal payments of $7,500,000 per year and an interest rate of LIBOR + 340 basis points.

• The limitation on distributions to members has been modified to permit distributions to members under two sets of conditions: (i) provided certain conditions are met, we may distribute up to 50% of net income to members with respect to any fiscal year; and (ii) subject to certain conditions, we may make a distribution to members if there was at least $1 of net income in the most recently-completed fiscal year, positive net income is reasonably projected for the year of distribution, and we have working capital of at least $30,000,000 before and after the distribution

• Under the Fourth Amendment, there are two financial covenants: (i) we must maintain working capital of not less than $20,000,000 at the end of each month; and (ii) our debt service coverage ratio (net income divided by the mandatory annual principal payment of $7,500,000 on the Amended and Restated Term Note) at the end of each fiscal year must be at least 1.20 to 1.

The Fourth Amendment also expressly authorized the Company to repurchase the Class C Units and Class A Units of the Company owned by ICM for a purchase price equal to $11,093,146 which repurchase we completed on November 15, 2019.

We expect the prices of our primary input (corn) to increase slightly and our principal product prices (ethanol and distillers grains) to remain stable in the first quarter of Fiscal 2020, given the relative prices of these commodities and the operations of our risk management program in the quarter. We therefore currently believe that our operating margins in the first quarter of Fiscal 2020 will be similar to our operating margins in the fourth quarter of Fiscal 2019.  We expect that in the last three quarters of Fiscal 2020 our margins will be steady if ethanol and corn prices maintain their stability.

Primary Working Capital Needs

Cash provided by operations for Fiscal 2019 and 2018 was $5.0 million and $9.9 million, respectively.  This change is primarily a result of a decrease in net income (loss) partially offset by an increase in accrued expenses.  For Fiscal 2019 and 2018, net cash (used in) investing activities was $(9.8) million and $(5.5) million, respectively, primarily for fixed asset additions.  For Fiscal 2019 and 2018, net cash flows provided by (used in) financing activities was $4.4 million and $(4.4) million, respectively due to increased revolver loan borrowings, partially offset by decreased distribution payments to members. 

We believe that our existing sources of liquidity, including cash on hand, available revolving credit and cash provided by operating activities, will satisfy our projected liquidity requirements, which primarily consists of working capital requirements, for the next twelve months. However, in the event that the market experiences significant price volatility and negative crush margins at or in excess of the levels experienced in previous years, we may be required to explore alternative methods to meet our short-term liquidity needs including temporary shutdowns of operations, temporary reductions in our production levels, or negotiating short-term concessions from our lenders.   

Commodity Price Risk 

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Our operations are highly dependent on commodity prices, especially prices for corn, ethanol and distillers grains and the spread between them ( the "crush margin"). As a result of price volatility for these commodities, our operating results may fluctuate substantially. The price and availability of corn are subject to significant fluctuations depending upon a number of factors that affect commodity prices in general, including crop conditions, weather, governmental programs and foreign purchases. We may experience increasing costs for corn and natural gas and decreasing prices for ethanol and distillers grains which could significantly impact our operating results. Because the market price of ethanol is not directly related to corn prices, ethanol producers are generally not able to compensate for increases in the cost of corn through adjustments in prices for ethanol.  We continue to monitor corn and ethanol prices and manage the "crush margin" to affect our longer-term profitability.

We enter into various derivative contracts with the primary objective of managing our exposure to adverse price movements in the commodities used for, and produced in, our business operations and, to the extent we have working capital available and available market conditions are appropriate, we engage in hedging transactions which involve risks that could harm our business. We measure and review our net commodity positions on a daily basis.  Our daily net agricultural commodity position consists of inventory, forward purchase and sale contracts, over-the-counter and exchange traded derivative instruments.  The effectiveness of our hedging strategies is dependent upon the cost of commodities and our ability to sell sufficient products to use all of the commodities for which we have futures contracts.  Although we actively manage our risk and adjust hedging strategies as appropriate, there is no assurance that our hedging activities will successfully reduce the risk caused by market volatility which may leave us vulnerable to high commodity prices. Alternatively, we may choose not to engage in hedging transactions in the future. As a result, our future results of operations and financial conditions may also be adversely affected during periods in which price changes in corn, ethanol and distillers grain to not work in our favor.

In addition, as described above, hedging transactions expose us to the risk of counterparty non-performance where the counterparty to the hedging contract defaults on its contract or, in the case of over-the-counter or exchange-traded contracts, where there is a change in the expected differential between the price of the commodity underlying the hedging agreement and the actual prices paid or received by us for the physical commodity bought or sold.  We have, from time to time, experienced instances of counterparty non-performance but losses incurred in these situations were not significant.

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 any 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 the current period (commonly referred to as the “mark to market” method). 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 corn prices move in reaction to market trends and information, our income statement will be affected depending on the impact such market movements have on the value of our derivative instruments.  Depending on market movements, crop prospects and weather, our hedging strategies may cause immediate adverse effects, but are expected to produce long-term positive impact.

In the event we do not have sufficient working capital to enter into hedging strategies to manage our commodities price risk, we may be forced to purchase our corn and market our ethanol at spot prices and as a result, we could be further exposed to market volatility and risk. However, during the past year, the spot market has been advantageous.

Credit and Counterparty Risks

Through our normal business activities, we are subject to significant credit and counterparty risks that arise through normal commercial sales and purchases, including forward commitments to buy and sell, and through various other over-the-counter (OTC) derivative instruments that we utilize to manage risks inherent in our business activities.  We define credit and counterparty risk as a potential financial loss due to the failure of a counterparty to honor its obligations.  The exposure is measured based upon several factors, including unpaid accounts receivable from counterparties and unrealized gains (losses) from OTC derivative instruments (including forward purchase and sale contracts).   We actively monitor credit and counterparty risk through credit analysis (by our marketing agent). 

Impact of Hedging Transactions on Liquidity

Our operations and cash flows are highly impacted by commodity prices, including prices for corn, ethanol, distillers grains and natural gas. We attempt to reduce the market risk associated with fluctuations in commodity prices through the use of derivative instruments, including forward corn contracts and over-the-counter exchange-traded futures and option contracts. Our liquidity position may be positively or negatively affected by changes in the underlying value of our derivative instruments. When the value of our open derivative positions decrease, we may be required to post margin deposits with our brokers to cover a portion of the decrease or we may require significant liquidity with little advanced notice to meet margin calls. Conversely, when the value

33

of our open derivative positions increase, our brokers may be required to deliver margin deposits to us for a portion of the increase.  We continuously monitor and manage our derivative instruments portfolio and our exposure to margin calls and while we believe we will continue to maintain adequate liquidity to cover such margin calls from operating results and borrowings, we cannot estimate the actual availability of funds from operations or borrowings for hedging transactions in the future.

The effects, positive or negative, on liquidity resulting from our hedging activities tend to be mitigated by offsetting changes in cash prices in our business. For example, in a period of rising corn prices, gains resulting from long grain derivative positions would generally be offset by higher cash prices paid to farmers and other suppliers in local corn markets. These offsetting changes do not always occur, however, in the same amounts or in the same period.

We expect that a $1.00 per bushel fluctuation in market prices for corn would impact our cost of goods sold by approximately $48 million, or $0.34 per gallon, assuming our plant operates at 100% of our capacity assuming no increase in the price of ethanol.  We expect the annual impact to our results of operations due to a $0.50 decrease in ethanol prices will result in approximately a $70 million decrease in revenue.

Summary of Critical Accounting Policies and Estimates

Note 2 to our financial statements contains a summary of our significant accounting policies, many of which require the use of estimates and assumptions.  Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment.  We used our knowledge and experience about past events and certain future assumptions to make estimates and judgments involving matters that are inherently uncertain and that affect the carrying value of our assets and liabilities.  We believe that of our significant accounting policies, the following are noteworthy because changes in these estimates or assumptions could materially affect our financial position and results of operations:

• Revenue Recognition

The Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) on October 1, 2018. Under the ASU, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the considerations 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 the contracts with customers. The Company applied the five-step method outlined in the ASU to all contracts with customers, and elected the modified retrospective implementation method. The new revenue standard did not have an impact on the Company's financial statements.

The Company sells ethanol and related products pursuant to marketing agreements.  Revenues are recognized when the marketing company has taken title to the product, prices are fixed or determinable and collectability is reasonably assured. 

The Company’s products are generally shipped FOB loading point, and recorded as a sale upon delivery of the applicable bill of lading.  The Company’s ethanol sales are handled through an ethanol purchase agreement (the “Ethanol Agreement”) with Bunge North America, Inc. (“Bunge”).  Syrup and distillers grains (co-products) are sold through a distillers grains agreement (the “DG Agreement”) with Bunge, based on market prices. The Company markets and distributes all of the corn oil it produces directly to end users at market prices.   Carbon dioxide is sold through a Carbon Dioxide Purchase and Sale Agreement (the “CO2 Agreement”) with Air Products and Chemicals, Inc., formerly known as EPCO Carbon Dioxide Products, Inc. (”Air Products”). Marketing fees, agency fees, and commissions due to the marketer are calculated separately from the settlement for the sale of the ethanol products and co-products and are included as a component of cost of goods sold.  Shipping and handling costs incurred by the Company for the sale of ethanol and co-products are included in cost of goods sold.

• Investment in Commodities Contracts, Derivative Instruments and Hedging Activities

The Company’s operations and cash flows are subject to fluctuations due to changes in commodity prices.  The Company is subject to market risk with respect to the price and availability of corn, the principal raw material used to produce ethanol and ethanol by-products.  Exposure to commodity price risk results from its dependence on corn in the ethanol production process.  In general, rising corn prices result in lower profit margins and, therefore, represent unfavorable market conditions.  This is especially true when market conditions do not allow the Company to pass along increased corn costs to customers.  The availability and price of corn is subject to wide fluctuations due to unpredictable factors such as weather conditions, farmer planting decisions, governmental policies with respect to agriculture and international trade and global demand and supply.

34

To minimize the risk and the volatility of commodity prices, primarily related to corn and ethanol, the Company uses various derivative instruments, including forward corn, ethanol and distillers grains purchase and sales contracts, over-the-counter and exchange-trade futures and option contracts.  When the Company has sufficient working capital available, it enters into derivative contracts to hedge its exposure to price risk related to forecasted corn needs and forward corn purchase contracts.  

Management has evaluated the Company’s contracts to determine whether the contracts are derivative instruments. Certain contracts that literally meet the definition of a derivative may be exempted from derivative accounting as normal purchases or normal sales.  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.   Gains and losses on contracts that are designated as normal purchases or normal sales contracts are not recognized until quantities are delivered or utilized in production.

The Company applies the normal purchase and sale exemption to forward contracts relating to ethanol and distillers grains and solubles and therefore these forward contracts are not marked to market. As of September 30, 2019, the Company had 3.0 million gallons in open contracts for ethanol, 89 thousand tons of open contracts on dried distillers grains , 72 thousand tons of wet distillers grains, and 4.3 million pounds of corn oil on open contracts.

Corn purchase contracts are treated as derivative financial instruments.  Changes in fair value of forward corn contracts, which are marked to market each period, are included in costs of goods sold.  As of September 30, 2019, the Company was committed to purchasing 3.6 million bushels of corn on a forward contract basis resulting in a total commitment of $14.6 million.   In addition the Company was committed to purchasing 311 thousand bushels of corn using basis contracts.

In addition, the Company enters into short-term cash, options and futures contracts as a means of managing exposure to changes in commodity prices.  The Company enters into derivative contracts to hedge the exposure to volatile commodity price fluctuations.  The Company maintains a risk management strategy that uses derivative instruments to minimize significant, unanticipated earnings fluctuations caused by market volatility.  The Company’s specific goal is to protect itself from large moves in commodity costs.  All derivatives are designated as non-hedge derivatives and the contracts will be accounted for at fair value.  Although the contracts will be effective economic hedges of specified risks, they are not designated as and accounted for as hedging instruments.    

• Inventory

Inventory is 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.

• Put Option liability.

The put option liability consists of an agreement between the Company and ICM that contains a conditional obligation to repurchase feature. On August 16, 2019, ICM notified SIRE their notice to exercise the put option, but waived their right to determine the fair market value for their units. SIRE calculated the liability by utilizing the weighted average purchase price for Fiscal 2019 transactions. The change to the valuation methodology was made because the parameters of risk free interest rate, expected volatility, expected life and estimated exercise price no longer were applicable. Using weighted average sale prices for Fiscal 2019, the estimated value at September 30, 2019 was $6.0 million while the Monte Carlo method calculated $5.4 million at September 30, 2018.. SIRE settled the transaction during the First Quarter of Fiscal 2020 for $11.1 million (see Note 11).

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements.

Item 7A.   Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 8.   Financial Statements and Supplementary Data. 

Report of Independent Registered Public Accounting Firm

35

To the Members and Board of Directors of Southwest Iowa Renewable Energy, LLC

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Southwest Iowa Renewable Energy, LLC (the Company) as of September 30, 2019 and 2018, the related statements of operations, members’ equity and cash flows for each of the years then ended, and the related notes to the financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2019 and 2018, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Other Matter

As discussed in Note 2 to the financial statements, the 2018 financial statements, and the quarters during the years ended September 30, 2019 and 2018 have been restated to correct a misstatement.

Basis for Opinion

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

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

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

/s/ RSM US LLP 

We have Served as the Company's auditor since 2008.

Des Moines, Iowa

December 20, 2019

36

SOUTHWEST IOWA RENEWABLE ENERGY, LLC
Balance Sheets
(Dollars in thousands)
	September 30, 2019			September 30, 2018
ASSETS
Current Assets
Cash and cash equivalents	$	1,075		$	1,440
Accounts receivable	1,431			1,135
Accounts receivable, related party	7,885			11,537
Derivative financial instruments	78			1,046
Inventory	17,167			13,526
Prepaid expenses and other	331			341
Total current assets	27,967			29,025
Property, Plant and Equipment
Land	2,064			2,064
Plant, building and equipment	239,446			229,813
Office and other equipment	1,803			1,625
	243,313			233,502
Accumulated depreciation	(131,864		)	(121,634		)
Net property, plant and equipment	111,449			111,868
Other Assets	1,447			1,738
Total Assets	$	140,863		$	142,631
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable	$	4,151		$	3,183
Accounts payable, related parties	2			18
Derivative financial instruments	597			1,567
Accrued expenses	9,906			6,778
Accrued expenses, related parties	581			601
Accrued put option liability, related party	6,037			—
Current maturities of notes payable	580			6,560
Total current liabilities	21,854			18,707
Long Term Liabilities
Notes payable, less current maturities	25,832			15,333
Other long-term liabilities	3,872			5,389
Put option liability, related party	—			5,400
Total long term liabilities	29,704			26,122
Commitments (Notes 9 and 10)
Members' Equity
Members' capital
13,327 Units issued and outstanding	87,165			87,165
Retained earnings	2,140			10,637
Total members' equity	89,305			97,802
Total Liabilities and Members' Equity	$	140,863		$	142,631
See Notes to Financial Statements

37

SOUTHWEST IOWA RENEWABLE ENERGY, LLC
Statements of Operations
(Dollars in thousands, except per unit data)
	Year Ended			Year Ended
	September 30, 2019			September 30, 2018
Revenues	$	216,993		$	214,990
Cost of Goods Sold
Cost of goods sold-non hedging	221,842			213,024
Realized & unrealized hedging (gains) losses	(2,825		)	(1,674		)
	219,017			211,350
Gross Margin (Loss)	(2,024		)	3,640
General and administrative expenses	4,837			4,972
Operating (Loss)	(6,861		)	(1,332		)
Other Expense
Interest expense and other income, net	999			1,672
Change in fair value of put option liability	637			(300		)
	1,636			1,372
Net (Loss)	$	(8,497	)	$	(2,704	)
Weighted Average Units Outstanding -basic	13,327			13,327
Weighted Average Units Outstanding -diluted	13,327			13,327
(Loss) per unit -basic	$	(637.58	)	$	(202.90	)
(Loss) per unit -diluted	$	(637.58	)	$	(202.90	)
See Notes to Financial Statements

38

SOUTHWEST IOWA RENEWABLE ENERGY, LLC
Statements of Members' Equity
(Dollars in thousands)
	Members' Capital		Retained Earnings			Total
Balance, September 30, 2017	$	87,165	$	20,004		$	107,169
Net (Loss)	—		(2,704		)	(2,704		)
Distributions	—		(6,663		)	(6,663		)
Balance, September 30, 2018	$	87,165	$	10,637		$	97,802
Net Loss	—		(8,497		)	(8,497		)
Balance, September 30, 2019	$	87,165	$	2,140		$	89,305
See Notes to Financial Statements

39

SOUTHWEST IOWA RENEWABLE ENERGY, LLC
Statements of Cash Flows
(Dollars in thousands)
	Year Ended			Year Ended
	September 30, 2019			September 30, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss)	$	(8,497	)	$	(2,704	)
Adjustments to reconcile net (loss) to net cash provided by operating activities:
Depreciation	10,230			11,372
Amortization	71			72
Loss on disposal of property and equipment	—			498
Change in other assets, net	291			405
Change in fair value of put option liability	637			(300		)
(Increase) decrease in current assets:
Accounts receivable	3,356			623
Inventory	(3,641		)	(312		)
Prepaid expenses and other	10			100
Derivative financial instruments	968			(1,023		)
Increase (decrease) in other long-term liabilities	(1,517		)	397
Increase (decrease) in current liabilities:
Accounts payable	952			(351		)
Derivative financial instruments	(970		)	656
Accrued expenses	3,108			438
Net cash provided by operating activities	4,998			9,871
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(9,811		)	(5,562		)
Proceeds from sale of property and equipment	—			50
Net cash (used in) investing activities	(9,811		)	(5,512		)
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions paid to members	—			(6,663		)
Proceeds from notes payable	193,041			153,386
Payments on notes payable	(188,593		)	(151,129		)
Net cash provided by (used in) financing activities	4,448			(4,406		)
Net (decrease) in cash and cash equivalents	(365		)	(47		)
CASH AND CASH EQUIVALENTS
Beginning	1,440			1,487
Ending	$	1,075		$	1,440
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest	$	980		$	952
See Notes to Financial Statements

40

SOUTHWEST IOWA RENEWABLE ENERGY, LLC

Notes to Financial Statements

September 30, 2019

Note 1:  Nature of Business

Southwest Iowa Renewable Energy, LLC (the “Company”), located in Council Bluffs, Iowa, was formed in March 2005, operates a 140 million gallon capacity ethanol plant and began producing ethanol in February 2009.  The Company sold 128.0 million gallons and 127.8 million gallons of ethanol in Fiscal 2019 and Fiscal 2018, respectively. The Company sells its ethanol distillers grains, corn syrup, and corn oil in the continental United States, Mexico and the Pacific Rim.

Note 2:  Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from these estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less when purchased to be cash equivalents.

Concentration of Credit Risk

The Company’s cash balances are maintained in bank deposit accounts which at times may exceed federally-insured limits.  The Company has not experienced any losses in such accounts.

Restatement

The Company has applied SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. SAB No. 108 states that registrants must quantify the impact of correcting all misstatements, including both the carryover (iron curtain method) and reversing (rollover method) effects of prior year misstatements on the current-year financial statements, and by evaluating the error measured under each method in light of quantitative and qualitative factors. Under SAB No. 108, prior year misstatements which, if corrected in the current year would be material to the current year, must be corrected by adjusting prior year financial statements.

In applying the requirements of SAB No. 108, the Company adjusted its repairs and maintenance accruals, which were understated, with respect to the tank cars and hopper cars the Company was leasing. The Company should have been booking a provision for repairs necessary to return the cars to the lessor in "normal" status. Since the lease was initiated in March of 2009, with a lease end date of March of 2019, adjustments to previous periods were required. Although the charges in any one quarter were not significant, the historical financial statements were restated with all appropriate entries being retrospectively reflected in the financial statements.

The Audit Committee of the Board of Directors of the Company concluded the interim unaudited condensed financial statements for the quarters ending in Fiscal 2018 and Fiscal 2019, as well as the audited annual financial statement for Fiscal 2018 needed to be restated. In Fiscal 2019, the repair and maintenance charges were identified and the original estimate was included in the Second Quarter ending March 31, 2019 for the quarter and year-to-date, as well as comparative quarterly Fiscal 2018 financial information. In the Fourth Quarter ending September 30, 2019, the Company discovered that the original estimated accrual per railcar was in error, and flowed through an additional amount per quarter starting in 2009 forward. The error corrections for the financial statements are included in the charts below. The quarterly information for each three month period in Fiscal 2018 need to be restated, as well as the annual total. In Fiscal 2019, the first quarter needed to be restated, while the second and third quarter were amended to correct the original estimate. The year end statement had not been filed, so the values presented for September 30, 2019, are the final, adjusted numbers. As of September 30, 2018, the impact of the restatement on the balance sheet to the audited financial statements was $5.4 million.

41

Fiscal 2018 - Annual	Original			Restated			Increase
Amounts in 000's	September 30, 2018			September 30, 2018			(Decrease)
Revenues	214,990			214,990			—
Cost of Goods Sold	210,783			211,350			567
Gross Margin	4,207			3,640			(567		)
General and administrative expenses	4,972			4,972			—
Interest expense and other income, net	1,372			1,372			—
Net (Loss)	(2,137		)	(2,704		)	(567		)
Net (Loss) per unit basic	$	(160.35	)	$	(202.9	)	$	(42.55	)
Net (Loss) per unit diluted	$	(160.35	)	$	(202.9	)	$	(42.55	)
ASSETS
Current Assets
Cash & cash equivalents	1,440			1,440			—
Accounts receivable	12,672			12,672			—
Inventory	13,526			13,526			—
Other current assets	1,387			1,387			—
Total Current Assets	29,025			29,025			—
Net property, plant and equipment	111,868			111,868			—
Other assets	1,738			1,738			—
Total Assets	142,631			142,631			—
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	12,147			12,147			—
Current maturities of notes payable	6,560			6,560			—
Total Current Liabilities	18,707			18,707			—
Total Long Term Liabilities	20,733			26,122			5,389
Members' Capital	87,165			87,165			—
Accumulated Earnings	16,026			10,637			(5,389		)
Total Liabilities and Members' Equity	142,631			142,631			—
Fiscal 2018 - Quarterly	Original			Restated			Original			Restated
Amounts in 000's	December 31, 2017			December 31, 2017			March 31, 2018			March 31, 2018
Revenues	50,546			50,546			53,551			53,551

42

Cost of Goods Sold	47,838			47,980			53,195			53,337
Gross Margin	2,708			2,566			356			214
General and administrative expenses	1,378			1,378			1,056			1,056
Interest expense and other income, net	149			149			135			135
Net Income (Loss)	1,181			1,039			(835		)	(977		)
Net Income (Loss) per unit basic	$	88.62		$	77.96		$	(62.65	)	$	(73.31	)
Net Income (Loss) per unit diluted	$	82.09		$	72.22		$	(62.65	)	$	(73.31	)
	Original			Restated			Original			Restated
	December 31, 2017			December 31, 2017			March 31, 2018			March 31, 2018
ASSETS
Current Assets
Cash & cash equivalents	2,489			2,489			1,275			1,275
Accounts receivable	11,601			11,601			12,945			12,945
Inventory	13,176			13,176			13,176			13,176
Other current assets	1,204			1,204			1,531			1,531
Total Current Assets	28,470			28,470			28,927			28,927
Net property, plant and equipment	115,237			115,237			114,655			114,655
Other assets	2,101			2,101			2,107			2,107
Total Assets	145,808			145,808			145,689			145,689
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	21,250			21,250			7,108			7,108
Current maturities of notes payable	5,043			5,043			6,549			6,549
Total Current Liabilities	26,293			26,293			13,657			13,657
Total Long Term Liabilities	13,007			17,971			26,358			31,464
Members' Capital	87,165			87,165			87,165			87,165
Accumulated Earnings	19,343			14,379			18,509			13,403
Total Liabilities and Members' Equity	145,808			145,808			145,689			145,689
Fiscal 2018 - Quarterly	Original			Restated
Amounts in 000's	June 30, 2018			June 30, 2018
Revenues	53,611			53,611
Cost of Goods Sold	54,782			54,924
Gross Margin (Loss)	(1,171		)	(1,313		)
General and administrative expenses	1,809			1,809
Interest expense and other income, net	265			265
Net (Loss)	(3,245		)	(3,387		)
Net (Loss) per unit basic	$	(243.49	)	$	(254.15	)
Net (Loss) per unit diluted	$	(243.49	)	$	(254.15	)

43

	Original	Restated
	June 30, 2018	June 30, 2018
ASSETS
Current Assets
Cash & cash equivalents	1,207	1,207
Accounts receivable	14,584	14,584
Inventory	13,547	13,547
Other current assets	902	902
Total Current Assets	30,240	30,240
Net property, plant and equipment	113,729	113,729
Other assets	2,102	2,102
Total Assets	146,071	146,071
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	11,569	11,569
Current maturities of notes payable	6,554	6,554
Total Current Liabilities	18,123	18,123
Total Long Term Liabilities	25,519	30,767
Members' Capital	87,165	87,165
Accumulated Earnings	15,264	10,016
Total Liabilities and Members' Equity	146,071	146,071

Fiscal 2019 - Quarterly	Original			Restated			Original			Restated
Amounts in 000's	December 31, 2018			December 31, 2018			March 31, 2019			March 31, 2019
Revenues	53,382			53,382			53,190			53,190
Cost of Goods Sold	52,878			53,020			53,568			53,617
Gross Margin (Loss)	504			362			(378		)	(427		)
General and administrative expenses	1,502			1,502			1,174			1,174
Interest expense and other income, net	169			169			215			215
Net (Loss)	(1,167		)	(1,309		)	(1,767		)	(1,816		)
Net (Loss) per unit basic	$	(87.57	)	$	(98.22	)	$	(132.59	)	$	(136.26	)
Net (Loss) per unit diluted	$	(87.57	)	$	(98.22	)	$	(132.59	)	$	(136.26	)
	Original			Restated			Original			Restated
	December 31, 2018			December 31, 2018			March 31, 2019			March 31, 2019
ASSETS
Current Assets
Cash & cash equivalents	1,042			1,042			1,101			1,101
Accounts receivable	9,909			9,909			9,776			9,776
Inventory	13,650			13,650			17,278			17,278

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Other current assets	1,164			1,164			1,533	1,533
Total Current Assets	25,765			25,765			29,688	29,688
Net property, plant and equipment	109,714			109,714			107,697	107,697
Other assets	1,738			1,738			1,447	1,447
Total Assets	137,217			137,217			138,832	138,832
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	17,110			17,964			9,850	11,650
Current maturities of notes payable	5,065			5,065			3,571	3,571
Total Current Liabilities	22,175			23,029			13,421	15,221
Total Long Term Liabilities	13,018			17,695			28,803	32,583
Members' Capital	87,165			87,165			87,165	87,165
Accumulated Earnings	14,859			9,328			9,443	3,863
Total Liabilities and Members' Equity	137,217			137,217			138,832	138,832
Fiscal 2019 - Quarterly	Original			Restated
Amounts in 000's	June 30, 2019			June 30, 2019
Revenues	53,505			53,505
Cost of Goods Sold	52,903			52,903
Gross Margin	602			602
General and administrative expenses	1,061			1,061
Interest expense and other income, net	292			292
Net (Loss)	(751		)	(751		)
Net (Loss) per unit basic	$	(56.35	)	$	(56.35	)
Net (Loss) per unit diluted	$	(56.35	)	$	(56.35	)
	Original			Restated
	June 30, 2019			June 30, 2019
ASSETS
Current Assets
Cash & cash equivalents	1,076			1,076
Accounts receivable	7,636			7,636
Inventory	19,848			19,848
Other current assets	3,996			3,996
Total Current Assets	32,556			32,556
Net property, plant and equipment	109,957			109,957
Other assets	1,447			1,447
Total Assets	143,960			143,960
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities

45

Accounts payable, derivative financial instruments and accrued expenses	15,887	17,687
Current maturities of notes payable	2,077	2,077
Total Current Liabilities	17,964	19,764
Total Long Term Liabilities	30,139	33,919
Members' Capital	87,165	87,165
Accumulated Earnings	8,692	3,112
Total Liabilities and Members' Equity	143,960	143,960

Revenue Recognition

The Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) on October 1, 2018. Under the ASU, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the considerations 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 the contracts with customers. The Company applied the five-step method outlined in the ASU to all contracts with customers, and elected the modified retrospective implementation method. The new revenue standard did not have an impact on the Company's financial statements.

The Company sells ethanol and related products pursuant to marketing agreements.  Revenues are recognized when the risk of loss has been transferred to the marketing company and the marketing company has taken title to the product, prices are fixed or determinable and collectability is reasonably assured.  

The Company’s products are generally shipped FOB loading point, and recorded as a sale upon delivery of the applicable bill of lading and transfer of risk of loss.  The Company’s ethanol sales are handled through an ethanol purchase agreement (the “Ethanol Agreement”) with Bunge North America, Inc. (“Bunge”).  Syrup and distillers grains (co-products) are sold through a distillers grains agreement (the “DG Agreement”) with Bunge, based on market prices. The Company markets and distributes all of the corn oil it produces directly to end users at market prices.   Carbon dioxide is sold through a Carbon Dioxide Purchase and Sale Agreement (the “CO2 Agreement”) with Air Products and Chemicals, Inc., formerly known as EPCO Carbon Dioxide Products, Inc. ("Air Products”). Marketing fees, agency fees, and commissions due to the marketer are calculated separately from the settlement for the sale of the ethanol products and co-products and are included as a component of cost of goods sold.  Shipping and handling costs incurred by the Company for the sale of ethanol and co-products are included in cost of goods sold.

Accounts Receivable

Accounts receivable are recorded at original invoice amounts less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis.  Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering customers’ financial condition, credit history and current economic conditions.  As of September 30, 2019 and 2018, management had determined no allowance is necessary.  Receivables are written off when deemed uncollectable and recoveries of receivables written off are recorded when received.

Risks and Uncertainties

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

Investment in Commodities Contracts, Derivative Instruments and Hedging Activities

The Company’s operations and cash flows are subject to fluctuations due to changes in commodity prices.  The Company is subject to market risk with respect to the price and availability of corn, the principal raw material used to produce ethanol and

46

ethanol by-products.  Exposure to commodity price risk results from its dependence on corn in the ethanol production process.  In general, rising corn prices result in lower profit margins and, therefore, represent unfavorable market conditions.  This is especially true when market conditions do not allow the Company to pass along increased corn costs to customers.  The availability and price of corn is subject to wide fluctuations due to unpredictable factors such as weather conditions, farmer planting decisions, governmental policies with respect to agriculture and international trade and global demand and supply.

To minimize the risk and the volatility of commodity prices, primarily related to corn and ethanol, the Company uses various derivative instruments, including forward corn, ethanol and distillers grains purchase and sales contracts, over-the-counter and exchange-trade futures and option contracts.  When the Company has sufficient working capital available, it enters into derivative contracts to hedge its exposure to price risk related to forecasted corn needs and forward corn purchase contracts.  

Management has evaluated the Company’s contracts to determine whether the contracts are derivative instruments. Certain contracts that literally meet the definition of a derivative may be exempted from derivative accounting as normal purchases or normal sales.  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.   Gains and losses on contracts that are designated as normal purchases or normal sales contracts are not recognized until quantities are delivered or utilized in production.

The Company applies the normal sale exemption to forward contracts relating to ethanol, distillers grains, and corn oil and therefore these forward contracts are not marked to market. As of September 30, 2019, the Company had commitments to sell 3.0 million gallons of ethanol , 89 thousand tons of dried distillers grains, 72 thousand tons of wet distillers grains and 4.3 million pounds of corn oil.

Corn purchase contracts are treated as derivative financial instruments.  Changes in fair value of forward corn contracts, which are marked to market each period, are included in costs of goods sold.  As of September 30, 2019, the Company was committed to purchasing 3.6 million bushels of corn on a forward contract basis resulting in a total commitment of $14.6 million.  In addition the Company was committed to purchasing 311 thousand bushels of corn using basis contracts.

In addition, the Company enters into short-term cash, options and futures contracts as a means of managing exposure to changes in commodity prices.  The Company enters into derivative contracts to hedge the exposure to volatile commodity price fluctuations.  The Company maintains a risk management strategy that uses derivative instruments to minimize significant, unanticipated earnings fluctuations caused by market volatility.  The Company’s specific goal is to protect itself from large moves in commodity costs.  All derivatives are designated as non-hedge derivatives and the contracts will be accounted for at fair value.  Although the contracts are considered effective economic hedges of specified risks, they are not designated as or accounted for as hedging instruments.

Derivatives not designated as hedging instruments along with cash due to brokers at September 30, 2019 and 2018 are as follows:

	Balance Sheet Classification	September 30, 2019			September 30, 2018
		in 000's			in 000's
Futures and option contracts
In gain position		$	368		$	583
In loss position		(364		)	(82		)
Cash held by broker		74			545
	Current asset	78			1,046
Forward contracts, corn	Current liability	597			1,567
Net futures, options, and forward contracts		$	(519	)	$	(521	)

The net realized and unrealized gains and losses on the Company’s derivative contracts for the years ended September 30, 2019 and 2018 consist of the following:

47

	Statement of Operations Classification	September 30, 2019			September 30, 2018
Net realized and unrealized (gains) losses related to:		(in 000's)			(in 000's)
Forward purchase contracts (corn)	Cost of Goods Sold	$	(1,530	)	$	1,894
Futures and option contracts (corn)	Cost of Goods Sold	(1,295		)	(3,568		)

Inventory

Inventory is stated at the lower of 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 and equipment are stated at cost.  Depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings	40 Years
Process Equipment	10 - 20 Years
Office Equipment	3-7 Years

Maintenance and repairs are charged to expense as incurred; major improvements are capitalized.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable.   An impairment loss would be recognized when estimated undiscounted future cash flows from operations are less than the carrying value of the asset group.  An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset. Management has determined there were no events or changes in circumstances that required an impairment evaluation during Fiscal 2019 or Fiscal 2018.

Income Taxes

The Company has elected to be treated as a partnership for federal and state income tax purposes and generally does not incur income taxes.  Instead, the Company’s earnings and losses are included in the income tax returns of the members.  Therefore, no provision or liability for federal or state income taxes has been included in these financial statements.

Management has evaluated the Company’s tax positions under the Financial Accounting Standards Board issued guidance on accounting for uncertainty in income taxes and concluded that the Company has taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of this guidance. 

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, derivative financial instruments, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short term nature of these instruments.

The put option liability consists of an agreement between the Company and ICM that contains a conditional obligation to repurchase feature. On August 16, 2019, ICM notified SIRE of their intent to exercise the put option on their 1,018 units, but waived their right to determine the fair market value for their units. SIRE calculated the liability by utilizing the weighted average purchase prices for Fiscal 2019 transactions. In past years, the Company calculated the fair value of the put option under Level 3, using a valuation model called the Monte Carlo Simulation. The change to the valuation methodology was made because the parameters of risk free interest rate, expected volatility, expected life and estimated exercise price no longer were applicable. Using weighted average sale prices for Fiscal 2019, the estimated value at September 30, 2019 was $6.0 million, while the Monte Carlo method calculated $5.4 million at September 30, 2018. The Company bought the Series A and Series C Units held by ICM back for a total price of $11.1 million based on the exercise price outlined in the agreement. Equity was reduced by $5.1 million, and the accrued put option liability of $6.0 million was satisfied. (see Note 11) The carrying amount of the notes payable approximates fair value, as the interest rate is a floating rate. The terms are consistent with those available in the market as of September 30, 2019 and 2018, using level 3 inputs.

48

Income Per Unit

Basic income per unit is calculated by dividing net income by the weighted average units outstanding for each period. Diluted income per unit is adjusted for convertible debt, using the treasury stock method and the put option using the reverse treasury stock method. In Fiscal 2019, the put option did not impact diluted income per unit as it was anti-dilutive. Basic earnings and diluted per unit data were computed as follows (in thousands except per unit data):

	Twelve Months Ended
	September 30, 2019			September 30, 2018
Numerator:
Net (loss) for basic earnings per unit	$	(8,497	)	$	(2,704	)
Change in fair value of put option liability	$	637		$	(300	)
Net (loss) for diluted earnings per unit	$	(7,860	)	$	(3,004	)
Denominator:
Weighted average units outstanding - basic	13,327			13,327
Weighted average units outstanding - diluted	13,327			13,327
(Loss) per unit - basic	$	(637.58	)	$	(202.90	)
(Loss) per unit - diluted	$	(637.58	)	$	(202.90	)

Recently Issued Accounting Pronouncements

Leases

In February 2016, FASB issued ASU 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. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. We implemented ASU 2016-02 in October 2019, when Fiscal 2020 started. The Company will include a right to use assets for approximately $8.2 million and a corresponding liability at the start of the next fiscal year for the operating leases.

Note 3:  Inventory

Inventory is comprised of the following at:

	September 30, 2019		September 30, 2018
	(in 000's)		(in 000's)
Raw Materials - corn	$	4,270	$	4,095
Supplies and Chemicals	5,063		4,747
Work in Process	1,724		1,421
Finished Goods	6,110		3,263
Total	$	17,167	$	13,526

Note 4:   Members’ Equity

At September 30, 2019 and 2018 outstanding member units were:

	September 30, 2019	September 30, 2018
A Units	8,993	8,993
B Units	3,334	3,334
C Units	1,000	1,000
	13,327	13,327

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The Series A, B and C unit holders all vote on certain matters with equal rights.  Prior to the repurchase of all of the Series C Units, the Series C unit holders as a group elected one Board member,.  The Series B unit holders as a group have the right to elect the number of Board members which bears the same proportion to the total number of Directors in relation to Series B outstanding units to total outstanding units. Based on this calculation, the Series B unit holders have the right to elect two Board members.  Series A unit holders as a group have the right to elect the four remaining Directors not elected by the Series C and B unit holders.

Note 5:   Revolving Loan/Credit Agreements

FCSA/CoBank

During Fiscal 2014, the Company entered into a credit agreement with Farm Credit Services of America, FLCA (“FCSA”) and CoBank, ACB, as cash management provider and agent (“CoBank”) which provides the Company with a term loan in the amount of $30,000,000 (the “Term Loan”) and a revolving term loan in the amount of up to $36,000,000 (the “Revolving Term Loan", and together with the Term Loan, the “FCSA Credit Facility”). The FCSA Credit Facility is secured by a security interest on all of the Company’s assets.

The Term Loan provides for payments by the Company to FCSA of quarterly installments of $1,500,000, which began on December 20, 2014 and matured September 20, 2019. The Revolving Term Loan has a maturity date of June 1, 2023 and requires annual reductions in principal availability of $6,000,000 commencing on June 1, 2020. Under the FCSA Credit Facility, the Company has the right to select from the several LIBOR based interest rate options with respect to each of the Term Loan and the Revolving Term Loan.

As of September 30, 2019, there was $23.9 million outstanding under the FCSA Credit Facility, with $12.1 million available under the Revolving Term Loan.

Financing costs associated with the Credit Agreement Facility are recorded at cost and include expenditures directly related to securing debt financing.  The Company amortizes financing costs using the effective interest method over the term of the related debt.

Note 6: Notes Payable

Notes payable consists of the following (in 000's):
	September 30, 2019		September 30, 2018
Term Revolver matured September 20, 2019	$	—	$	6,000
Revolving term loan bearing interest at LIBOR plus 3.35% (5.37% at September 30, 2019)	23,902		12,894
Other with interest rates from 3.50% to 4.15% and maturities through 2022	2,569		3,129
	26,471		22,023
Less Current Maturities	580		6,560
Less Financing Costs, net of amortization	59		130
Total Long Term Debt	25,832		15,333

50

Approximate aggregate maturities of notes payable as of September 30, 2019 are as follows (in 000's):

2020	$	580
2021	589
2022	7,302
2023	18,000
Total	$	26,471

Note 7:  Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  In determining fair value, the Company used various methods including market, income and cost approaches.  Based on these approaches, the Company often utilized certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique.  These inputs can be readily observable, market corroborated, or generally unobservable inputs.  The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.  Based on the observable inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy.

The fair value hierarchy ranks the quality and reliability of the information used to determine fair values.  Financial assets and liabilities carried at fair value will be 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 classifications of such instruments pursuant to the valuation hierarchy, is set below.

Put Option liability. The put option liability consists of an agreement between the Company and ICM that contains a conditional obligation to repurchase feature. On August 16, 2019, ICM notified SIRE their notice to exercise the put option, but waived their right to determine the fair market value for their units. In past years, the Company calculated the fair value of the put option under Level 3, using a valuation model called the Monte Carlo Simulation. SIRE calculated the liability by utilizing the weighted average purchase price for Fiscal 2019 transactions. Using weighted average purchase prices from Fiscal 2019, the estimated value at September 30, 2019 was $6.0 million, while the Monte Carlo method calculated $5.4 million at September 30, 2018. SIRE settled the transaction on November 15, 2019.

Derivative financial statements.  Commodity futures and exchange traded options 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 the Chicago Mercantile Exchange (“CME”) market.  Ethanol contracts are reported at fair value utilizing Level 2 inputs from third-party pricing services.  Forward purchase contracts are reported at fair value utilizing Level 2 inputs.   For these contracts, the Company obtains fair value measurements from local grain terminal values.  The fair value measurements consider observable data that may include live trading bids from local elevators and processing plants which are based off the CME market.

The following table summarizes financial instruments measured at fair value on a recurring basis as of September 30, 2019 and 2018, categorized by the level of the valuation inputs within the fair value hierarchy: (dollars in '000s)

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	September 30, 2019
	Level 1		Level 2		Level 3
Assets:
Derivative financial instruments	$	368	$	—	$	—
Liabilities:
Derivative financial instruments	364		597		—
Put Option Liability	—		—		6,037
	September 30, 2018
	Level 1		Level 2		Level 3
Assets:
Derivative financial instruments	$	583	$	—	$	—
Liabilities:
Derivative financial instruments	82		1,567		—
Put Option Liability	—		—		5,400

The following table summarizes the assumptions used in computing the fair value of the put option subject to fair value:

	September 30, 2019			September 30, 2018
Expected dividend yield	—			—
Risk-free interest rate	—		%	2.57		%
Expected volatility	—		%	22		%
Expected life (years)	—			1.25
Exercise unit price	$	10,897		$	10,897
Company unit price	$	4,967		$	5,500

The following table reflects the activity for liabilities measured at fair value using Level 3 inputs as of September 30, 2019 and September 30, 2018:

	September 30, 2019		September 30, 2018
Beginning Balance	$	5,400	$	5,700
Change in Value	637		(300		)
Ending Balance	$	6,037	$	5,400

Note 8:   Incentive Compensation

The Company has an equity incentive plan which provides that the Board of Directors may make awards of equity appreciation units (“EAU”) and equity participation units (“EPU”) to employees from time to time, subject to vesting provisions as determined for each award. There are no EAUs outstanding. The EPUs are valued in accordance with the agreement which is based on the book value per unit of the Company. The Company had 69.7 unvested EPUs outstanding under this plan as of September 30, 2019, which will vest three years from the dates of the awards.  

During the Fiscal 2019 and 2018, the Company recorded compensation expense related to this plan of approximately $164,000and $100,000, respectively.  As of September 30, 2019 and 2018, the Company had a liability of approximately $908,000 and $944,000, respectively, recorded within accrued expenses on the balance sheet. The incentive compensation expense is

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recognized over three years from the date of the awards. The amounts to be recognized over future periods at September 30, 2020 and 2019 was $232,000 and $225,000, respectively.

Note 9:   Related Party Transactions and Major Customers

Related Party Transactions

Bunge

On December 5, 2014, the Company entered into an Amended and Restated Ethanol Purchase Agreement with Bunge which was further amended and restated on October 23, 2017 to include specific provisions for loading and shipment of ethanol by truck (the “Ethanol Agreement”). Under the Ethanol Agreement, the Company has agreed to sell Bunge all of the ethanol produced by the Company, and Bunge has agreed to purchase the same.  The Company will pay Bunge a percentage marketing fee for ethanol sold by Bunge, subject to a minimum and maximum annual fee.  The initial term of the Ethanol Agreement expires on December 31, 2019, however it it will automatically renew for one five-year term, unless terminated by the parties in accordance with the terms of the agreement. The Company has incurred ethanol marketing expenses of $1.5 million in each year for Fiscal 2019 and Fiscal 2018, under the Ethanol Agreement.

On June 26, 2009, the Company executed a Railcar Agreement with Bunge for the lease of 325 ethanol cars and 300 hopper cars which are used for the delivery and marketing of ethanol and distillers grains. In November 2016, The Company reduced the number of leased ethanol cars to 323 and in both November 2013 and January 2015 The Company reduced the number of hopper cars by one for a total of 298 leased hopper cars.  Under the Railcar Agreement, the Company leases railcars for terms lasting 120 months and continuing on a month to month basis thereafter.  The Railcar Agreement will terminate upon the expiration of all railcar leases.  Expenses under this agreement were $3.5 million and $4.0 million for Fiscal 2019 and 2018, net of subleases and accretion, respectively. In November 2016, the Company entered into a sublease for 96 hoppers with Bunge that expired on March 24, 2019. The Company had subleased another 92 hopper cars to unrelated third parties, which also expired March 25, 2019. In June 2018, one of the third party customers entered into an assignment agreement for their 52 hopper cars with the Company and Bunge which will be phased in over the fourth quarter, and the start of the first quarter in our fiscal year ending September 30, 2019. SIRE received an up front assignment payment, and the net result will be financially neutral, and the number of side-leased railcars by SIRE remains the same.

The Company entered into a agreement effective March 24, 2019 extending the original Railcar Agreement with Bunge for the lease of 323 ethanol cars and 111 hopper cars which will be used for the delivery and marketing of ethanol and distiller grains. Under the terms of the new agreement, the original DOT111 tank cars are leased over a four year term running from March 24, 2019 to April 30, 2023, with the ability to start returning cars after January 1, 2023 to conform to the requirement for DOT117 tank cars with enhanced safety specifications which is scheduled to become effective May 2023. The 111 hopper cars are leased over a three year term running from March 24, 2019 to March 31, 2022. The combined cost for the leases for Fiscal 2019 was $3.5 million and $4.0 million in Fiscal 2018.

The Company continues to work with Bunge to determine the need for ethanol and hopper cars in light of current market conditions, and the expected conditions in 2020 and beyond. The Company believes we will be able to fully utilize our fleet of hopper cars in the future, to allow us to cost-effectively ship distillers grains to distant markets, primarily the export markets.        

On December 5, 2014, the Company and Bunge entered into an Amended and Restated Distiller’s Grain Purchase Agreement (the “ DG Purchase Agreement ”).  Under the DG Purchase Agreement, Bunge will purchase all distiller’s grains produced by the Company, and will receive a marketing fee based on the net sale price of distillers grains, subject to a minimum and maximum annual fee.  The initial term of the DG Purchase Agreement expires on December 31, 2019  and will automatically renew for one five year term unless terminated by the parties in accordance with the terms of the agreement. The Company has incurred distillers grains marketing expenses of $1.3 million and $1.2 million during Fiscal 2019 and 2018, respectively.

The Company and Bunge also entered into an Amended and Restated Grain Feedstock Agency Agreement on December 5, 2014 (the “ Agency Agreement ”).  The Agency Agreement provides that Bunge will procure corn for the Company, the Company will pay Bunge a per bushel fee, subject to a minimum and maximum annual fee.  The initial term of the Agency Agreement expires on December 31, 2019 and will automatically renew for one five year term unless terminated by the parties in accordance with the terms of the agreement. Expenses for corn procurement by Bunge were $0.7 million for each year of the fiscal years ended September 30, 2019 and 2018. The Company has outstanding corn contracts of 7 thousand bushels with a $25 thousand liability as of September 30, 2019, and 116 thousand bushels with a $393 thousand liability as of September 30, 2018 included in derivative financial instruments liability on the balance sheet.

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Since the 2015 crop year, the Company has been using corn containing Syngenta Seeds, Inc.’s proprietary Enogen® technology (“ Enogen Corn ”) for a portion of its ethanol production needs.  The Company contracts directly with growers to produce Enogen Corn for sale to the Company.  Concurrent with the Agency Agreement, the Company and Bunge entered into a Services Agreement regarding corn purchases (the “ Services Agreement ”).  Under this agreement, the Company originates all Enogen Corn contracts for its facility and Bunge assists the Company with certain administrative matters related to Enogen Corn, including facilitating delivery to the facility.  The Company pays Bunge a per bushel service fee.  The initial term of the Services Agreement expires on December 31, 2019 and will automatically renew for one additional five year term unless terminated by the parties in accordance with the terms of the agreement. Expenses under the Services Agreement are included as part of the Amended and Restated Grain Feedstock Agency Agreement discussed above.

ICM    

In connection with the payoff of the ICM subordinated debt, the Company entered into the SIRE ICM Unit Agreement dated December 17, 2014 (the “ Unit Agreement ”).  Under the Unit Agreement, the Company granted ICM the right to sell to the Company its 1,000 Series C and 18 Series A Membership Units (the “ ICM Units ”) commencing anytime during the earliest of  several alternative dates and events at the greater of $10,897 per unit or the fair market value (as defined in the agreement) on the date of exercise. The Company increased expense in Fiscal 2019 by $637 thousand, and in Fiscal 2018 reduced expense by $300 thousand in conjunction with this put right under the Unit Agreement. See Note 7 Fair Value Measurement, for the terms of this agreement. In accordance with the terms of the Unit Agreement, the Company repurchased the ICM Units on November 15, 2019. See Note 11 Subsequent Event, for additional information regarding the repurchase of the ICM Units.

Major Customers

The Company is party to the Ethanol Agreement and the Distillers Grain Purchase Agreement with Bunge for the exclusive marketing, selling, and distributing of all of the ethanol and distillers grains produced by the Company.  The Company has expensed $2.8 million and $2.7 million in marketing fees under these agreements for Fiscal 2019 and 2018, respectively. Revenues with this customer were $205.1 million and $204.7 million, respectively, for Fiscal 2019 and 2018.   Trade accounts receivable due from Bunge were $7.9 million and $11.6 million as of September 30, 2019 and 2018, respectively.

Note 10: Commitments

The Company has entered into a steam contract with an unrelated party under which the vendor agreed to provide the steam required by the Company, up to 475,000 pounds per hour. The Company agreed to pay a net energy rate for all steam provided under the contract as well as a monthly demand charge. The net energy rate is set for the first three years then adjusted each year beginning on the third anniversary date.  The steam contract was renewed effective January 1, 2013, and will remain in effect until November 30, 2024.  Expenses under this agreement for the years ended September 30, 2019 and 2018 were $5.7 million and $4.2 million, respectively.

The Company leases certain equipment, railcars, vehicles, and operating facilities under non-cancellable operating leases that expire on various dates through 2023.  The future minimum lease payments required under these leases (net of sublease income) is $3.2 million, $3.1 million , $2.6 million and $1.2 million in 2020, 2021, 2022 and 2023, respectively.  Rent expense (net of sublease income) related to operating leases for the years ended September 30, 2019 and 2018 was $4.0 million and $4.7 million, respectively. Non Related party sublease totals were $0.2 million for 2019 and $0.6 million in 2018.  The majority of the future minimum lease payments are due to Bunge.

Note 11: Subsequent Events

FCSA/CoBank

On November 8, 2019, the Company amended the credit agreement with Farm Credit Services of America, FLCA (“FCSA”) and CoBank, ACB, as cash management provider and agent (“CoBank”) which provides the Company with a term loan in the amount of $30 million (the “Term Loan”) and a revolving term loan in the amount of up to $40 million (the “Revolving Term Loan", and together with the Term Loan, the “FCSA Credit Facility”). The FCSA Credit Facility is secured by a security interest on all of the Company’s assets.

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The Term Loan provides for payments by the Company to FCSA of semi-annual installments of $3.75 million, which begins on September 1, 2020 and matures on November 15, 2024. The Revolving Term Loan has a maturity date of November 15, 2024. Under the FCSA Credit Facility, the Company has the right to select from the several LIBOR based interest rate options with respect to each of the Term Loan and the Revolving Term Loan, with a LIBOR spread of 3.4% per annum.

Put Option liability.

The put option liability consists of an agreement between the Company and ICM that contained a conditional obligation to repurchase feature. On August 16, 2019, ICM notified SIRE of their intent to exercise the put option, but waived their right to determine the fair market value for their units. On November 15, 2019, the Company closed the repurchase transaction and paid $11.1 million to ICM in settlement of the put option provision consistent with the terms of the agreement. This settlement will also cause the number of shares outstanding to change to 12,309 shares for the remainder of the first quarter in Fiscal 2020.

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

There are no items to report.

Item 9A.   Controls and Procedures.

The Company’s management, including its President and Chief Executive Officer (our principal executive officer), Michael D. Jerke, along with its Chief Financial Officer (our principal financial officer), Brett L. Frevert, have reviewed and evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15 under the Securities Exchange Act of 1934, as amended, the “Exchange Act”), as of September 30, 2019.  The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.   Based upon this review and evaluation, these officers identified a material weakness in the Company’s disclosure controls and procedures, in that the Company should have been booking a provision for repairs necessary to return the tank cars and hopper cars the Company leases, to the lessor in "normal" status. Since the lease was initiated in March of 2009, with a lease end date of March of 2019, adjustments to previous periods were required. Although the charges in any one quarter were not significant, the historical financial statements were restated with all appropriate entries being retrospectively reflected in the financial statements.

These officers believe management and the Company have taken the proper steps during the year to remediate this material weakness, and as of September 30, 2019, the Company’s disclosure controls and procedures are effective in ensuring that material information is recorded, processed, summarized and reported within the time periods required by the forms and rules of the Securities and Exchange Commission (the “SEC”).

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2019.  In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (the 2013 Framework).  Based on this assessment, the Company’s management identified a material weakness in the Company’s disclosure controls and procedures as noted above. The Company designed and implemented additional internal control steps during the year to remediate this weakness, and concluded that, as of September 30, 2019, the Company’s integrated controls over financial reporting were effective.

This annual report does not include an attestation report on internal controls by the company’s registered public accounting firm pursuant to the exemption under Section 989G of the Dodd-Frank Act of 2010.

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Item 9B.   Other Information.

None.

PART III

Item 10.   Directors, Executive Officers and Corporate Governance.

The Information required by this Item is incorporated by reference from the definitive proxy statement for the Company’s 2020 Annual Meeting of Members (the “2019 Proxy Statement”) to be filed with the SEC within 120 days after the end of the Company’s fiscal year ended September 30, 2019.

The Information required by this Item is incorporated by reference in the 2020 Proxy Statement.

Item 11.   Executive Compensation.

The Information required by this Item is incorporated by reference in the 2020 Proxy Statement.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Member Matters.

The Information required by this Item is incorporated by reference in the 2020 Proxy Statement.

Item 13.   Certain Relationships and Related Transactions, and Director Independence.

The Information required by this Item is incorporated by reference in the 2020 Proxy Statement.

Item 14.   Principal Accountant Fees and Services.

The Information required by this Item is incorporated by reference in the 2020 Proxy Statement.

PART IV

Item 15.   Exhibits and Financial Statement Schedules.

(a) Documents filed as part of this Report.

Balance Sheets

Statements of Operations

Statements of Members’ Equity

Statements of Cash Flows

Notes to Financial Statements

(b) The following exhibits are filed herewith or incorporated by reference as set forth below:

2	Omitted - Inapplicable.
3(i)	Articles of Organization, as filed with the Iowa Secretary of State on March 28, 2005 (incorporated by reference to Exhibit 3(i) of Registration Statement on Form 10 filed by the Company on January 28, 2008).
4(i)	Fourth Amended and Restated Operating Agreement dated March 21, 2014 (incorporated by reference to Exhibit 3.1 of Form 8-K filed by the Company on March 26, 2014).
4(ii)	Unit Transfer Policy, including QMS Manual attached thereto as Appendix 1 (incorporated by reference to Exhibit 4(v) of Form S-1/A filed by the Company on October 19, 2011).
9	Omitted - Inapplicable.
10.1	Electric Service Contract dated December 15, 2006 with MidAmerican Energy Company (incorporated by reference to Exhibit 10.6 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

56

10.2	License Agreement dated September 25, 2006 between the Company and ICM, Inc. (incorporated by reference to Exhibit 10.10 of Form S-1/A filed by the Company on February 24, 2011).  Portions of the Agreement have been omitted pursuant to a request for confidential treatment.
10.3	Amendment to Steam Service Contract by and between the Company and MidAmerican Energy Company dated effective October 3, 2008. Portions of the Agreement have been omitted pursuant to a request for confidential treatment. (incorporated by reference to Exhibit 10.61 of Form S-1/A filed by the Company on February 24, 2011)
10.4	Second Amendment to Steam Service Contract by and between the Company and MidAmerican Energy Company dated effective January 1, 2009. Portions of the Agreement have been omitted pursuant to a request for confidential treatment. (incorporated by reference to Exhibit 10.62 of Form S-1/A filed by the Company on February 24, 2011)
10.5	Third Amendment to Steam Service Contract by and between the Company and MidAmerican Energy Company dated effective January 1, 2009. Portions of the Agreement have been omitted pursuant to a request for confidential treatment. (incorporated by reference to Exhibit 10.63 of Form S-1/A filed by the Company on February 24, 2011)
10.6	Fourth Amendment to Steam Service Contract by and between the Company and MidAmerican Energy Company dated effective December 1, 2009. Portions of the Agreement have been omitted pursuant to a request for confidential treatment. (incorporated by reference to Exhibit 10.64 of Form S-1/A filed by the Company on February 24, 2011)
10.7	Amended and Restated Railcar Sublease Agreement dated March 25, 2009 with Bunge North America, Inc. (incorporated by reference to Exhibit 10.1 of Form 10-Q filed by the Company on August 14, 2009).  Portions of the Agreement have been omitted pursuant to a request for confidential treatment.
10.8	ICM, Inc. Agreement - Equity Matters, by and between ICM, Inc. and the Company, dated as of June 17, 2010 (incorporated by reference to Exhibit 10.3 of Form 8-K filed by the Company on June 23, 2010).
10.9	Bunge Agreement - Equity Matters by and between the Company and Bunge N.A. Holdings, Inc. dated effective August 26, 2009. (incorporated by reference to Exhibit 10.72 of Form S-1/A filed by the Company on February 24, 2011)
10.10	First Amendment to Bunge Agreement - Equity Matters, by and between Bunge N.A. Holdings, Inc. and the Company, dated as of June 17, 2010 (incorporated by reference to Exhibit 10.5 of Form 8-K filed by the Company on June 23, 2010).
10.11*	Southwest Iowa Renewable Energy Equity Incentive Plan (incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Company on July 6, 2010).
10.12	Joint Defense Agreement between ICM, Inc. and the Company dated July 13, 2010 (incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Company on July 16, 2010).
10.13	Tricanter Purchase and Installation Agreement by and between ICM, Inc. and the Company dated August 25, 2010 (incorporated by reference to Exhibit 10.1 of Form 8-K/A filed by the Company on January 12, 2011). Portions of the Agreement have been omitted pursuant to a request for confidential treatment.
10.14*	Employment Agreement dated effective January 1, 2012 by and between the Company and Brian T. Cahill. (incorporated by reference to Exhibit 10.2 of Form 8-K filed by the Company on January 5, 2012).
10.15	First Amendment to Promissory Note dated February 29, 2012 by and between the Company and Bunge N.A. Holdings, Inc. (incorporated by reference to Exhibit 10.2 of Form 8-K filed by the Company on March 6, 2012)
10.16	Base Contract for Sale and Purchase of Natural Gas between Encore Energy Services, Inc. and the Company effective April 1, 2012.  Portions of this Agreement have been omitted pursuant to a request for confidential treatment (incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Company on May 1, 2012).
10.17	Confirming Order between Encore Energy Services, Inc. and the Company dated April 25, 2012.  Portions of the Agreement have been omitted pursuant to a request for confidential treatment. (incorporated by reference to Exhibit 10.2 of Form 8-K filed by the Company on May 1, 2012).
10.18	Letter Agreement by and between the Company and CFO Systems, LLC dated June 21, 2012. (incorporated by reference to Exhibit 10.2 of Form 8-K filed by the Company on June 22, 2012).
10.19	Notice of Assignment of Interests from Bunge N.A. Holdings, Inc. to Bunge North America, Inc. dated September 24, 2012. (incorporated by reference of Exhibit 10 of Form 10-K filed by Company on December 19, 2012).
10.20	Fifth Amendment to Steam Service Contract by and among the Company and MidAmerican Energy Company named therein dated effective January 1, 2013 (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Company on March 19, 2013).
10.21	Carbon Dioxide Purchase and Sale Agreement by and among the Company and EPCO Carbon Dioxide Products, Inc. named therein dated effective as of April 2, 2013 (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Company on April 11, 2013).

57

10.22	Non-Exclusive CO2 Facility Site Lease Agreement by and among the Company and EPCO Carbon Dioxide Products, Inc. named therein dated effective April 2, 2013 (incorporated by reference to Exhibit 10.2 on Form 8-K filed by the Company on April 11, 2013).
10.23	Credit Agreement by and between the Company, Farm Credit Services of America, FLCA, as Lender and CoBank, ACB as cash management provider and agent dated as of June 24, 2014 (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Company on June 30, 2014).
10.24	Term Note by and between the Company and Farm Credit Services of America, FLCA dated June 24, 2014 (incorporated by reference to Exhibit 10.2 on Form 8-K filed by the Company on June 30, 2014).
10.25	Revolving Term Note by and between the Company and Farm Credit Services of America, FLCA dated as of June 24, 2014 (incorporated by reference to Exhibit 10.3 on Form 8-K filed by the Company on June 30, 2014).
10.26	Amendment No. 1 to Ethanol Purchase Agreement by and between the Company, as Producer, Bunge North America, Inc., as Bunge dated August 29, 2014 (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Company on September 5, 2014).
10.27	Amendment No. 2 to Ethanol Purchase Agreement by and between the Company, as Producer, Bunge North America, Inc., as Bunge dated October 31, 2014 (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Company on October 31, 2014).
10.28	Amended and Restated Ethanol Purchase Agreement dated effective December 5, 2014 by and between the Company and Bunge North America, Inc. (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Company on December 11, 2014). Portions of the Ethanol Purchase Agreement have been omitted pursuant to a request for confidential treatment.
10.29	Amended and Restated Grain Feedstock Agency Agreement dated effective December 5, 2014 by and between the Company and Bunge North America, Inc. (incorporated by reference to Exhibit 10.2 on Form 8-K filed by the Company on December 11, 2014). Portions of the Grain Feedstock Agency Agreement have been omitted pursuant to a request for confidential treatment.
10.30	Amended and Restated Distiller’s Grain Purchase Agreement dated effective December 5, 2014 by and between the Company and Bunge North America, Inc. (incorporated by reference to Exhibit 10.3 on Form 8-K filed by the Company on December 11, 2014). Portions of the Distiller’s Grain Purchase Agreement have been omitted pursuant to a request for confidential treatment.
10.31	Services Agreement Regarding Corn Purchases dated effective December 5, 2014 by and between the Company and Bunge North America, Inc. (incorporated by reference to Exhibit 10.4 on Form 8-K filed by the Company on December 11, 2014). Portions of the Services Agreement have been omitted pursuant to a request for confidential treatment.
10.32	Letter Agreement dated effective December 5, 2014 by and between the Company and Bunge North America, Inc. (incorporated by reference to Exhibit 10.5 on Form 8-K filed by the Company on December 11, 2014).
10.33	SIRE ICM Unit Agreement by and between the Company and ICM Investments, LLC dated effective as of December 17, 2014 (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Company on December 23, 2014).
10.34	Sixth Amendment to Steam Service Contract between the Company and MidAmerican Energy Company (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Company on September 30, 2015).
10.35*	Employment Agreement between the Company and Michael D. Jerke effective October 22, 2018 (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Company on September 28, 2018).
10.36	Amendment No. 4 to Credit Agreement dated November 8, 2019 by and among Southwest Iowa Renewable Energy, LLC, Farm Credit Services of American, FLCA and CoBank, ACB (incorporated by reference to Exhibit 10.1 on form 8-K filed by the Company on November 14, 2019)
10.37	Amended and Restated Term Note by and between the Company and Farm Credit Services of America, FLCA dated November 8, 2019 (incorporated by reference to Exhibit 10.2 on Form 8-K filed by the Company on November 14, 2019)
10.38	Amended and Restated Revolving Term Note by and between the Company and Farm Credit Services of America, FLCA dated November 8, 2019 (incorporated by reference to Exhibit 10.3 on Form 8-K filed by the Company on November 14, 2019)
10.39	Amended and Restated Ethanol Purchase Agreement dated effective October 23, 2017 by and between the Company and Bunge North America, Inc. (incorporated by reference to Exhibit 10.1 on Form 8-K filed by the Company on October 26, 2017). Portions of the Ethanol Purchase Agreement have been omitted pursuant to a request for confidential treatment.
11	Omitted - Inapplicable.

58

12	Omitted - Inapplicable.
13	Omitted - Inapplicable.
14	Omitted - Inapplicable.
15	Omitted - Inapplicable.
16	Omitted - Inapplicable.
17	Omitted - Inapplicable.
18	Omitted - Inapplicable.
19	Omitted - Inapplicable.
20	Omitted - Inapplicable.
31.1	Rule 13a-14(a)/15d-14(a) Certification (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) executed by the Principal Executive Officer. (filed herewith)
31.2	Rule 13a-14(a)/15d-14(a) Certification (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) executed by the Principal Financial Officer. (filed herewith)
32.1**	Rule 15d-14(b) Certifications (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) executed by the Principal Executive Officer. (furnished herewith)
32.2**	Rule 15d-14(b) Certifications (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) executed by the Principal Financial Officer. (furnished herewith)

101.XMLXBRL	Instance Document
101.XSDXBRL	Taxonomy Schema
101.CALXBRL	Taxonomy Calculation Database
101.LABXBRL	Taxonomy Label Linkbase
101.PREXBRL	Taxonomy Presentation Linkbase
101.DEFXBRL	Taxonomy Definition Linkbase

________________________

* Denotes exhibit that constitutes a management contract, or compensatory plan or arrangement

** This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates it by reference

59

SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		SOUTHWEST IOWA RENEWABLE ENERGY, LLC
Date:	December 20, 2019	/s/ Michael D. Jerke
		Michael D. Jerke, President and Chief Executive Officer
Date:	December 20, 2019	/s/ Brett L. Frevert
		Brett L. Frevert, CFO and Principal Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Signature	Date
/s/ Karol D. King	December 20, 2019
Karol D. King, Chairman of the Board
/s/ Theodore V. Bauer	December 20, 2019
Theodore V. Bauer, Director
/s/ Hubert M. Houser	December 20, 2019
Hubert M. Houser, Director
/s/ Michael K. Guttau	December 20, 2019
Michael K. Guttau, Director
/s/ Brett A. Caplice	December 20, 2019
Brett A. Caplice, Director
/s/ Jason D. Klootwtk	December 20, 2019
Jason D. Klootwtk, Director
/s/ Andrew J. Bulloch	December 20, 2019
Andrew J. Bulloch, Director

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO 17 CFR 240.13(A)-14(A)

(SECTION 302 CERTIFICATION)

I, Michael D. Jerke, certify that:

1. I have reviewed this annual report on Form 10-K of Southwest Iowa Renewable 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 officers 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-(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 changes 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 officers 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 controls over financial reporting.

Date:	December 20, 2019	/s/ Michael D. Jerke
		Michael D. Jerke, President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO 17 CFR 240.13(A)-14(A)

(SECTION 302 CERTIFICATION)

I, Brett L. Frevert, certify that:

1. I have reviewed this annual report on Form 10-K of Southwest Iowa Renewable 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 officers 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-(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 changes 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 officers 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 controls over financial reporting.

Date:	December 20, 2019	/s/ Brett L. Frevert
		Brett L. Frevert, CFO
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report on Form 10-K of Southwest Iowa Renewable Energy, LLC (the “ Company ”) for the period ended September 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “ Report ”), I, Michael D. Jerke, President and Chief Executive 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.

Date:	December 20, 2019	/s/ Michael D. Jerke
		Michael D. Jerke, President and Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report on Form 10-K of Southwest Iowa Renewable Energy, LLC (the “ Company ”) for the period ended September 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “ Report ”), I, Brett L. Frevert, 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.

Date:	December 20, 2019	/s/ Brett L. Frevert
		Brett L. Frevert, CFO
		(Principal Financial Officer)

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Commitments (Notes)

12 Months Ended

Sep. 30, 2019

Commitments Disclosure [Text Block]

Commitments

The Company has entered into a steam contract with an unrelated party under which the vendor agreed to provide the steam required by the Company, up to 475,000 pounds per hour. The Company agreed to pay a net energy rate for all steam provided under the contract as well as a monthly demand charge. The net energy rate is set for the first three years then adjusted each year beginning on the third anniversary date.  The steam contract was renewed effective January 1, 2013, and will remain in effect until November 30, 2024.  Expenses under this agreement for the years ended September 30, 2019 and 2018 were $5.7 million and $4.2 million, respectively.

The Company leases certain equipment, railcars, vehicles, and operating facilities under non-cancellable operating leases that expire on various dates through 2023.  The future minimum lease payments required under these leases (net of sublease income) is $3.2 million, $3.1 million , $2.6 million and $1.2 million in 2020, 2021, 2022 and 2023, respectively.  Rent expense (net of sublease income) related to operating leases for the years ended September 30, 2019 and 2018 was $4.0 million and $4.7 million, respectively. Non Related party sublease totals were $0.2 million for 2019 and $0.6 million in 2018.  The majority of the future minimum lease payments are due to Bunge.

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Notes Payable

12 Months Ended

Sep. 30, 2019

Debt Instrument [Line Items]

Notes Payable

Notes Payable

Notes payable consists of the following (in 000's):
	September 30, 2019		September 30, 2018
Term Revolver matured September 20, 2019	$	—	$	6,000
Revolving term loan bearing interest at LIBOR plus 3.35% (5.37% at September 30, 2019)	23,902		12,894
Other with interest rates from 3.50% to 4.15% and maturities through 2022	2,569		3,129
	26,471		22,023
Less Current Maturities	580		6,560
Less Financing Costs, net of amortization	59		130
Total Long Term Debt	25,832		15,333

Approximate aggregate maturities of notes payable as of September 30, 2019 are as follows (in 000's):

2020	$	580
2021	589
2022	7,302
2023	18,000
Total	$	26,471

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Revolving Loan/Credit Agreements (AgStar and Bunge) (Narrative) (Details) - USD ($)	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Debt Instrument [Line Items]
Long-term Debt	$ 26,471,000	$ 22,023,000
CoBank [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Amount outstanding	0	6,000,000
CoBank [Member] | Term Revolver [Member]
Debt Instrument [Line Items]
Amount outstanding	23,902,000	$ 12,894,000
CoBank [Member] | Term Loan [Member]
Debt Instrument [Line Items]
Long-term Debt	30,000,000
Quarterly installment	1,500,000
Amount outstanding	23,900,000
CoBank [Member] | Term Revolver [Member]
Debt Instrument [Line Items]
Long-term Debt	36,000,000
Debt Instrument, Periodic Principal Reduction	6,000,000
Revolving Working Capital facility 1, Face Amount	$ 12,100,000

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Incentive Compensation (Details) - USD ($)	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract]
Unvested EPUs outstanding	69.7
Compensation expense	$ 164,000	$ 100,000
Deferred compensation	908,000	944,000
Shared-based compensation, future expenses	$ 232,000	$ 225,000

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Subsequent Events (Details) - USD ($)			12 Months Ended
	Nov. 15, 2019	Nov. 08, 2019	Sep. 30, 2019	Sep. 30, 2018
Subsequent Event [Line Items]
Long-term Debt			$ 26,471,000	$ 22,023,000
Weighted Average Number of Shares Outstanding, Basic			13,327	13,327
Subsequent Event [Member]
Subsequent Event [Line Items]
Payments for Repurchase of Warrants	$ 11,100,000
Weighted Average Number of Shares Outstanding, Basic	12,309
Term Loan [Member] | CoBank [Member]
Subsequent Event [Line Items]
Long-term Debt			$ 30,000,000
Term Loan [Member] | CoBank [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Long-term Debt		$ 30,000,000
Term Loan, Semi-Annual Payment		$ 3,750,000
Debt Instrument, Description of Variable Rate Basis		LIBOR
Debt Instrument, Basis Spread on Variable Rate		3.40%
Term Revolver [Member] | CoBank [Member]
Subsequent Event [Line Items]
Long-term Debt			$ 36,000,000
Term Revolver [Member] | CoBank [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Long-term Debt		$ 40,000,000

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Statements Of Operations - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Revenues	$ 216,993	$ 214,990
Cost of goods sold-non hedging	221,842	213,024
Gain (Loss) on Derivative Instruments Held for Trading Purposes, Net	2,825	1,674
Cost of Goods and Services Sold	219,017	211,350
Gross Margin	(2,024)	3,640
General and administrative expenses	4,837	4,972
Operating Income	(6,861)	(1,332)
Other Income (Expense)
Interest Income (Expense), Net	999	1,672
Increase (Decrease) in Put Options	637	(300)
Other (Income) Expense	(1,636)	(1,372)
Net (Loss)	$ (8,497)	$ (2,704)
Weighted Average Number of Shares Outstanding, Basic	13,327	13,327
Weighted Average Number of Shares Outstanding, Diluted	13,327	13,327
Earnings Per Share, Basic	$ (637.58)	$ (202.90)
Earnings Per Share, Diluted	$ (637.58)	$ (202.90)

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Summary Of Significant Accounting Policies (Schedule Of Property And Equipment) (Details) - USD ($)	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Accounting Policies [Abstract]
Accounts Receivable, Allowance for Credit Loss	$ 0
Property, Plant and Equipment [Line Items]
Derivative Liability	$ 597,000	$ 1,567,000
Office Equipment - Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	7 years
Office Equipment - Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Process Equipment - Maximum [Member] [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	20 years
Process Equipment - Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Building [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	40 years

XML

Nature Of Business (Details) gal in Millions, $ in Millions	12 Months Ended
	Sep. 30, 2019 USD ($) gal	Sep. 30, 2018 gal
Nature Of Business [Abstract]
Production capacity, Number of Gallons | $	$ 140
Production, Number Of Gallons | gal	128.0	127.8

XML

Summary Of Significant Accounting Policies

12 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from these estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less when purchased to be cash equivalents.

Concentration of Credit Risk

The Company’s cash balances are maintained in bank deposit accounts which at times may exceed federally-insured limits.  The Company has not experienced any losses in such accounts.

Restatement

The Company has applied SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. SAB No. 108 states that registrants must quantify the impact of correcting all misstatements, including both the carryover (iron curtain method) and reversing (rollover method) effects of prior year misstatements on the current-year financial statements, and by evaluating the error measured under each method in light of quantitative and qualitative factors. Under SAB No. 108, prior year misstatements which, if corrected in the current year would be material to the current year, must be corrected by adjusting prior year financial statements.

In applying the requirements of SAB No. 108, the Company adjusted its repairs and maintenance accruals, which were understated, with respect to the tank cars and hopper cars the Company was leasing. The Company should have been booking a provision for repairs necessary to return the cars to the lessor in "normal" status. Since the lease was initiated in March of 2009, with a lease end date of March of 2019, adjustments to previous periods were required. Although the charges in any one quarter were not significant, the historical financial statements were restated with all appropriate entries being retrospectively reflected in the financial statements.

The Audit Committee of the Board of Directors of the Company concluded the interim unaudited condensed financial statements for the quarters ending in Fiscal 2018 and Fiscal 2019, as well as the audited annual financial statement for Fiscal 2018 needed to be restated. In Fiscal 2019, the repair and maintenance charges were identified and the original estimate was included in the Second Quarter ending March 31, 2019 for the quarter and year-to-date, as well as comparative quarterly Fiscal 2018 financial information. In the Fourth Quarter ending September 30, 2019, the Company discovered that the original estimated accrual per railcar was in error, and flowed through an additional amount per quarter starting in 2009 forward. The error corrections for the financial statements are included in the charts below. The quarterly information for each three month period in Fiscal 2018 need to be restated, as well as the annual total. In Fiscal 2019, the first quarter needed to be restated, while the second and third quarter were amended to correct the original estimate. The year end statement had not been filed, so the values presented for September 30, 2019, are the final, adjusted numbers. As of September 30, 2018, the impact of the restatement on the balance sheet to the audited financial statements was $5.4 million.

Fiscal 2018 - Annual	Original			Restated			Increase
Amounts in 000's	September 30, 2018			September 30, 2018			(Decrease)
Revenues	214,990			214,990			—
Cost of Goods Sold	210,783			211,350			567
Gross Margin	4,207			3,640			(567		)
General and administrative expenses	4,972			4,972			—
Interest expense and other income, net	1,372			1,372			—
Net (Loss)	(2,137		)	(2,704		)	(567		)
Net (Loss) per unit basic	$	(160.35	)	$	(202.9	)	$	(42.55	)
Net (Loss) per unit diluted	$	(160.35	)	$	(202.9	)	$	(42.55	)
ASSETS
Current Assets
Cash & cash equivalents	1,440			1,440			—
Accounts receivable	12,672			12,672			—
Inventory	13,526			13,526			—
Other current assets	1,387			1,387			—
Total Current Assets	29,025			29,025			—
Net property, plant and equipment	111,868			111,868			—
Other assets	1,738			1,738			—
Total Assets	142,631			142,631			—
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	12,147			12,147			—
Current maturities of notes payable	6,560			6,560			—
Total Current Liabilities	18,707			18,707			—
Total Long Term Liabilities	20,733			26,122			5,389
Members' Capital	87,165			87,165			—
Accumulated Earnings	16,026			10,637			(5,389		)
Total Liabilities and Members' Equity	142,631			142,631			—
Fiscal 2018 - Quarterly	Original			Restated			Original			Restated
Amounts in 000's	December 31, 2017			December 31, 2017			March 31, 2018			March 31, 2018
Revenues	50,546			50,546			53,551			53,551

Cost of Goods Sold	47,838			47,980			53,195			53,337
Gross Margin	2,708			2,566			356			214
General and administrative expenses	1,378			1,378			1,056			1,056
Interest expense and other income, net	149			149			135			135
Net Income (Loss)	1,181			1,039			(835		)	(977		)
Net Income (Loss) per unit basic	$	88.62		$	77.96		$	(62.65	)	$	(73.31	)
Net Income (Loss) per unit diluted	$	82.09		$	72.22		$	(62.65	)	$	(73.31	)
	Original			Restated			Original			Restated
	December 31, 2017			December 31, 2017			March 31, 2018			March 31, 2018
ASSETS
Current Assets
Cash & cash equivalents	2,489			2,489			1,275			1,275
Accounts receivable	11,601			11,601			12,945			12,945
Inventory	13,176			13,176			13,176			13,176
Other current assets	1,204			1,204			1,531			1,531
Total Current Assets	28,470			28,470			28,927			28,927
Net property, plant and equipment	115,237			115,237			114,655			114,655
Other assets	2,101			2,101			2,107			2,107
Total Assets	145,808			145,808			145,689			145,689
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	21,250			21,250			7,108			7,108
Current maturities of notes payable	5,043			5,043			6,549			6,549
Total Current Liabilities	26,293			26,293			13,657			13,657
Total Long Term Liabilities	13,007			17,971			26,358			31,464
Members' Capital	87,165			87,165			87,165			87,165
Accumulated Earnings	19,343			14,379			18,509			13,403
Total Liabilities and Members' Equity	145,808			145,808			145,689			145,689
Fiscal 2018 - Quarterly	Original			Restated
Amounts in 000's	June 30, 2018			June 30, 2018
Revenues	53,611			53,611
Cost of Goods Sold	54,782			54,924
Gross Margin (Loss)	(1,171		)	(1,313		)
General and administrative expenses	1,809			1,809
Interest expense and other income, net	265			265
Net (Loss)	(3,245		)	(3,387		)
Net (Loss) per unit basic	$	(243.49	)	$	(254.15	)
Net (Loss) per unit diluted	$	(243.49	)	$	(254.15	)

	Original	Restated
	June 30, 2018	June 30, 2018
ASSETS
Current Assets
Cash & cash equivalents	1,207	1,207
Accounts receivable	14,584	14,584
Inventory	13,547	13,547
Other current assets	902	902
Total Current Assets	30,240	30,240
Net property, plant and equipment	113,729	113,729
Other assets	2,102	2,102
Total Assets	146,071	146,071
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	11,569	11,569
Current maturities of notes payable	6,554	6,554
Total Current Liabilities	18,123	18,123
Total Long Term Liabilities	25,519	30,767
Members' Capital	87,165	87,165
Accumulated Earnings	15,264	10,016
Total Liabilities and Members' Equity	146,071	146,071

Fiscal 2019 - Quarterly	Original			Restated			Original			Restated
Amounts in 000's	December 31, 2018			December 31, 2018			March 31, 2019			March 31, 2019
Revenues	53,382			53,382			53,190			53,190
Cost of Goods Sold	52,878			53,020			53,568			53,617
Gross Margin (Loss)	504			362			(378		)	(427		)
General and administrative expenses	1,502			1,502			1,174			1,174
Interest expense and other income, net	169			169			215			215
Net (Loss)	(1,167		)	(1,309		)	(1,767		)	(1,816		)
Net (Loss) per unit basic	$	(87.57	)	$	(98.22	)	$	(132.59	)	$	(136.26	)
Net (Loss) per unit diluted	$	(87.57	)	$	(98.22	)	$	(132.59	)	$	(136.26	)
	Original			Restated			Original			Restated
	December 31, 2018			December 31, 2018			March 31, 2019			March 31, 2019
ASSETS
Current Assets
Cash & cash equivalents	1,042			1,042			1,101			1,101
Accounts receivable	9,909			9,909			9,776			9,776
Inventory	13,650			13,650			17,278			17,278

Other current assets	1,164			1,164			1,533	1,533
Total Current Assets	25,765			25,765			29,688	29,688
Net property, plant and equipment	109,714			109,714			107,697	107,697
Other assets	1,738			1,738			1,447	1,447
Total Assets	137,217			137,217			138,832	138,832
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	17,110			17,964			9,850	11,650
Current maturities of notes payable	5,065			5,065			3,571	3,571
Total Current Liabilities	22,175			23,029			13,421	15,221
Total Long Term Liabilities	13,018			17,695			28,803	32,583
Members' Capital	87,165			87,165			87,165	87,165
Accumulated Earnings	14,859			9,328			9,443	3,863
Total Liabilities and Members' Equity	137,217			137,217			138,832	138,832
Fiscal 2019 - Quarterly	Original			Restated
Amounts in 000's	June 30, 2019			June 30, 2019
Revenues	53,505			53,505
Cost of Goods Sold	52,903			52,903
Gross Margin	602			602
General and administrative expenses	1,061			1,061
Interest expense and other income, net	292			292
Net (Loss)	(751		)	(751		)
Net (Loss) per unit basic	$	(56.35	)	$	(56.35	)
Net (Loss) per unit diluted	$	(56.35	)	$	(56.35	)
	Original			Restated
	June 30, 2019			June 30, 2019
ASSETS
Current Assets
Cash & cash equivalents	1,076			1,076
Accounts receivable	7,636			7,636
Inventory	19,848			19,848
Other current assets	3,996			3,996
Total Current Assets	32,556			32,556
Net property, plant and equipment	109,957			109,957
Other assets	1,447			1,447
Total Assets	143,960			143,960
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities

Accounts payable, derivative financial instruments and accrued expenses	15,887	17,687
Current maturities of notes payable	2,077	2,077
Total Current Liabilities	17,964	19,764
Total Long Term Liabilities	30,139	33,919
Members' Capital	87,165	87,165
Accumulated Earnings	8,692	3,112
Total Liabilities and Members' Equity	143,960	143,960

Revenue Recognition

The Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) on October 1, 2018. Under the ASU, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the considerations 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 the contracts with customers. The Company applied the five-step method outlined in the ASU to all contracts with customers, and elected the modified retrospective implementation method. The new revenue standard did not have an impact on the Company's financial statements.

The Company sells ethanol and related products pursuant to marketing agreements.  Revenues are recognized when the risk of loss has been transferred to the marketing company and the marketing company has taken title to the product, prices are fixed or determinable and collectability is reasonably assured.  

The Company’s products are generally shipped FOB loading point, and recorded as a sale upon delivery of the applicable bill of lading and transfer of risk of loss.  The Company’s ethanol sales are handled through an ethanol purchase agreement (the “Ethanol Agreement”) with Bunge North America, Inc. (“Bunge”).  Syrup and distillers grains (co-products) are sold through a distillers grains agreement (the “DG Agreement”) with Bunge, based on market prices. The Company markets and distributes all of the corn oil it produces directly to end users at market prices.   Carbon dioxide is sold through a Carbon Dioxide Purchase and Sale Agreement (the “CO2 Agreement”) with Air Products and Chemicals, Inc., formerly known as EPCO Carbon Dioxide Products, Inc. ("Air Products”). Marketing fees, agency fees, and commissions due to the marketer are calculated separately from the settlement for the sale of the ethanol products and co-products and are included as a component of cost of goods sold.  Shipping and handling costs incurred by the Company for the sale of ethanol and co-products are included in cost of goods sold.

Accounts Receivable

Accounts receivable are recorded at original invoice amounts less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis.  Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering customers’ financial condition, credit history and current economic conditions.  As of September 30, 2019 and 2018, management had determined no allowance is necessary.  Receivables are written off when deemed uncollectable and recoveries of receivables written off are recorded when received.

Risks and Uncertainties

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

Investment in Commodities Contracts, Derivative Instruments and Hedging Activities

The Company’s operations and cash flows are subject to fluctuations due to changes in commodity prices.  The Company is subject to market risk with respect to the price and availability of corn, the principal raw material used to produce ethanol and

ethanol by-products.  Exposure to commodity price risk results from its dependence on corn in the ethanol production process.  In general, rising corn prices result in lower profit margins and, therefore, represent unfavorable market conditions.  This is especially true when market conditions do not allow the Company to pass along increased corn costs to customers.  The availability and price of corn is subject to wide fluctuations due to unpredictable factors such as weather conditions, farmer planting decisions, governmental policies with respect to agriculture and international trade and global demand and supply.

To minimize the risk and the volatility of commodity prices, primarily related to corn and ethanol, the Company uses various derivative instruments, including forward corn, ethanol and distillers grains purchase and sales contracts, over-the-counter and exchange-trade futures and option contracts.  When the Company has sufficient working capital available, it enters into derivative contracts to hedge its exposure to price risk related to forecasted corn needs and forward corn purchase contracts.  

Management has evaluated the Company’s contracts to determine whether the contracts are derivative instruments. Certain contracts that literally meet the definition of a derivative may be exempted from derivative accounting as normal purchases or normal sales.  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.   Gains and losses on contracts that are designated as normal purchases or normal sales contracts are not recognized until quantities are delivered or utilized in production.

The Company applies the normal sale exemption to forward contracts relating to ethanol, distillers grains, and corn oil and therefore these forward contracts are not marked to market. As of September 30, 2019, the Company had commitments to sell 3.0 million gallons of ethanol , 89 thousand tons of dried distillers grains, 72 thousand tons of wet distillers grains and 4.3 million pounds of corn oil.

Corn purchase contracts are treated as derivative financial instruments.  Changes in fair value of forward corn contracts, which are marked to market each period, are included in costs of goods sold.  As of September 30, 2019, the Company was committed to purchasing 3.6 million bushels of corn on a forward contract basis resulting in a total commitment of $14.6 million.  In addition the Company was committed to purchasing 311 thousand bushels of corn using basis contracts.

In addition, the Company enters into short-term cash, options and futures contracts as a means of managing exposure to changes in commodity prices.  The Company enters into derivative contracts to hedge the exposure to volatile commodity price fluctuations.  The Company maintains a risk management strategy that uses derivative instruments to minimize significant, unanticipated earnings fluctuations caused by market volatility.  The Company’s specific goal is to protect itself from large moves in commodity costs.  All derivatives are designated as non-hedge derivatives and the contracts will be accounted for at fair value.  Although the contracts are considered effective economic hedges of specified risks, they are not designated as or accounted for as hedging instruments.

Derivatives not designated as hedging instruments along with cash due to brokers at September 30, 2019 and 2018 are as follows:

	Balance Sheet Classification	September 30, 2019			September 30, 2018
		in 000's			in 000's
Futures and option contracts
In gain position		$	368		$	583
In loss position		(364		)	(82		)
Cash held by broker		74			545
	Current asset	78			1,046
Forward contracts, corn	Current liability	597			1,567
Net futures, options, and forward contracts		$	(519	)	$	(521	)

The net realized and unrealized gains and losses on the Company’s derivative contracts for the years ended September 30, 2019 and 2018 consist of the following:

	Statement of Operations Classification	September 30, 2019			September 30, 2018
Net realized and unrealized (gains) losses related to:		(in 000's)			(in 000's)
Forward purchase contracts (corn)	Cost of Goods Sold	$	(1,530	)	$	1,894
Futures and option contracts (corn)	Cost of Goods Sold	(1,295		)	(3,568		)

Inventory

Inventory is stated at the lower of 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 and equipment are stated at cost.  Depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings	40 Years
Process Equipment	10 - 20 Years
Office Equipment	3-7 Years

Maintenance and repairs are charged to expense as incurred; major improvements are capitalized.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable.   An impairment loss would be recognized when estimated undiscounted future cash flows from operations are less than the carrying value of the asset group.  An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset. Management has determined there were no events or changes in circumstances that required an impairment evaluation during Fiscal 2019 or Fiscal 2018.

Income Taxes

The Company has elected to be treated as a partnership for federal and state income tax purposes and generally does not incur income taxes.  Instead, the Company’s earnings and losses are included in the income tax returns of the members.  Therefore, no provision or liability for federal or state income taxes has been included in these financial statements.

Management has evaluated the Company’s tax positions under the Financial Accounting Standards Board issued guidance on accounting for uncertainty in income taxes and concluded that the Company has taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of this guidance. 

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, derivative financial instruments, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short term nature of these instruments.

The put option liability consists of an agreement between the Company and ICM that contains a conditional obligation to repurchase feature. On August 16, 2019, ICM notified SIRE of their intent to exercise the put option on their 1,018 units, but waived their right to determine the fair market value for their units. SIRE calculated the liability by utilizing the weighted average purchase prices for Fiscal 2019 transactions. In past years, the Company calculated the fair value of the put option under Level 3, using a valuation model called the Monte Carlo Simulation. The change to the valuation methodology was made because the parameters of risk free interest rate, expected volatility, expected life and estimated exercise price no longer were applicable. Using weighted average sale prices for Fiscal 2019, the estimated value at September 30, 2019 was $6.0 million, while the Monte Carlo method calculated $5.4 million at September 30, 2018. The Company bought the Series A and Series C Units held by ICM back for a total price of $11.1 million based on the exercise price outlined in the agreement. Equity was reduced by $5.1 million, and the accrued put option liability of $6.0 million was satisfied. (see Note 11) The carrying amount of the notes payable approximates fair value, as the interest rate is a floating rate. The terms are consistent with those available in the market as of September 30, 2019 and 2018, using level 3 inputs.

Income Per Unit

Basic income per unit is calculated by dividing net income by the weighted average units outstanding for each period. Diluted income per unit is adjusted for convertible debt, using the treasury stock method and the put option using the reverse treasury stock method. In Fiscal 2019, the put option did not impact diluted income per unit as it was anti-dilutive. Basic earnings and diluted per unit data were computed as follows (in thousands except per unit data):

	Twelve Months Ended
	September 30, 2019			September 30, 2018
Numerator:
Net (loss) for basic earnings per unit	$	(8,497	)	$	(2,704	)
Change in fair value of put option liability	$	637		$	(300	)
Net (loss) for diluted earnings per unit	$	(7,860	)	$	(3,004	)
Denominator:
Weighted average units outstanding - basic	13,327			13,327
Weighted average units outstanding - diluted	13,327			13,327
(Loss) per unit - basic	$	(637.58	)	$	(202.90	)
(Loss) per unit - diluted	$	(637.58	)	$	(202.90	)

Recently Issued Accounting Pronouncements

Leases

In February 2016, FASB issued ASU 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. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. We implemented ASU 2016-02 in October 2019, when Fiscal 2020 started. The Company will include a right to use assets for approximately $8.2 million and a corresponding liability at the start of the next fiscal year for the operating leases.

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Inventory (Tables)

12 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Components Of Inventory

	September 30, 2019		September 30, 2018
	(in 000's)		(in 000's)
Raw Materials - corn	$	4,270	$	4,095
Supplies and Chemicals	5,063		4,747
Work in Process	1,724		1,421
Finished Goods	6,110		3,263
Total	$	17,167	$	13,526

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Inventory

12 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Inventory

Inventory

Inventory is comprised of the following at:

	September 30, 2019		September 30, 2018
	(in 000's)		(in 000's)
Raw Materials - corn	$	4,270	$	4,095
Supplies and Chemicals	5,063		4,747
Work in Process	1,724		1,421
Finished Goods	6,110		3,263
Total	$	17,167	$	13,526

XML

Summary Of Significant Accounting Policies (Narrative) (Details) $ / shares in Units, bu in Thousands, T in Thousands, lb in Millions, gal in Millions			3 Months Ended						12 Months Ended
	Nov. 15, 2019 USD ($) shares	Nov. 08, 2019 USD ($)	Jun. 30, 2019 USD ($) $ / shares	Mar. 31, 2019 USD ($) $ / shares	Dec. 31, 2018 USD ($) $ / shares	Jun. 30, 2018 USD ($) $ / shares	Mar. 31, 2018 USD ($) $ / shares	Dec. 31, 2017 USD ($) $ / shares	Sep. 30, 2019 USD ($) T lb $ / shares shares bu gal	Sep. 30, 2018 USD ($) $ / shares shares	Dec. 31, 2019 USD ($)	Sep. 30, 2017 USD ($)
Debt Securities, Available-for-sale [Line Items]
Balance Sheet Impact of Restatement										$ 5,400,000
Revenues									$ 216,993,000	214,990,000
Cost of Goods and Services Sold									219,017,000	211,350,000
Gross Profit									(2,024,000)	3,640,000
General and Administrative Expense									4,837,000	4,972,000
Interest Income (Expense), Net									999,000	1,672,000
Net Income (Loss) Attributable to Parent									$ (8,497,000)	$ (2,704,000)
Earnings Per Share, Basic | $ / shares									$ (637.58)	$ (202.90)
Earnings Per Share, Diluted | $ / shares									$ (637.58)	$ (202.90)
Inventory, Net									$ 17,167,000	$ 13,526,000
Assets, Current									27,967,000	29,025,000
Property, Plant and Equipment, Net									111,449,000	111,868,000
Assets									140,863,000	142,631,000
Long-term Debt, Current Maturities									580,000	6,560,000
Liabilities, Current									21,854,000	18,707,000
Long-term Debt, Excluding Current Maturities									25,832,000	15,333,000
Retained Earnings (Accumulated Deficit)									2,140,000	10,637,000
Liabilities and Equity									140,863,000	142,631,000
Accounts Receivable, Allowance for Credit Loss									$ 0
Total Commitment to Sale of Ethanol (gallons) | gal									3.0
Sale of dried distillers grains and solubles (in tons) | T									89
change in fair value of put option, anti-dilutive									$ 637,000	(300,000)
Sale of wet distillers grains and solubles (in tons) | T									72
Total Commitment to Sale of Corn Oil (pounds) | lb									4.3
Total purchase commitment of corn (in bushels) | bu									3,600
Total purchase commitment									$ 14,600,000
Total purchase commitment of corn basis contracts, bushels | bu									311
Derivative Assets									$ 78,000	1,046,000
Derivative Liability									597,000	1,567,000
Derivative, Fair Value, Net									$ (519,000)	(521,000)
Stock Repurchased During Period, Shares | shares									1,018
Net Income (Loss) Available to Common Stockholders, Diluted									$ (7,860,000)	$ (3,004,000)
Weighted Average Number of Shares Outstanding, Basic | shares									13,327	13,327
Weighted Average Number of Shares Outstanding, Diluted | shares									13,327	13,327
Gain (Loss) on Derivative Instruments Held for Trading Purposes, Net									$ (2,825,000)	$ (1,674,000)
Fair Value, Put Option Liability									0	5,400,000
Forward Contracts [Member]
Debt Securities, Available-for-sale [Line Items]
Gain (Loss) on Derivative Instruments Held for Trading Purposes, Net									1,530,000	(1,894,000)
Fair Value, Inputs, Level 3 [Member]
Debt Securities, Available-for-sale [Line Items]
Derivative Assets									0	0
Derivative Liability									0	0
Warrants and Rights Outstanding									6,037,000	5,400,000		$ 5,700,000
Reported Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Debt Securities, Available-for-sale [Line Items]
Warrants and Rights Outstanding									6,000,000.0
Portion at Other than Fair Value Measurement [Member] | Fair Value, Inputs, Level 3 [Member]
Debt Securities, Available-for-sale [Line Items]
Warrants and Rights Outstanding									5,400,000
Original Statement [Member]
Debt Securities, Available-for-sale [Line Items]
Revenues			$ 53,505	$ 53,190	$ 53,382	$ 53,611	$ 53,551	$ 50,546		214,990
Cost of Goods and Services Sold			52,903	53,568	52,878	54,782	53,195	47,838		210,783
Gross Profit			602	(378)	504	(1,171)	356	2,708		4,207
General and Administrative Expense			1,061	1,174	1,502	1,809	1,056	1,378		4,972
Interest Income (Expense), Net			292	215	169	265	135	149		1,372
Net Income (Loss) Attributable to Parent			$ (751)	$ (1,767)	$ (1,167)	$ (3,245)	$ (835)	$ 1,181		$ (2,137)
Earnings Per Share, Basic | $ / shares			$ (56.35)	$ (132.59)	$ (87.57)	$ (243.49)	$ (62.65)	$ 88.62		$ (160.35)
Earnings Per Share, Diluted | $ / shares			$ (56.35)	$ (132.59)	$ (87.57)	$ (243.49)	$ (62.65)	$ 82.09		$ (160.35)
Cash			$ 1,076	$ 1,101	$ 1,042	$ 1,207	$ 1,275	$ 2,489		$ 1,440
Accounts and Other Receivables, Net, Current			7,636	9,776	9,909	14,584	12,945	11,601		12,672
Inventory, Net			19,848	17,278	13,650	13,547	13,176	13,176		13,526
Other Assets, Current			3,996	1,533	1,164	902	1,531	1,204		1,387
Assets, Current			32,556	29,688	25,765	30,240	28,927	28,470		29,025
Property, Plant and Equipment, Net			109,957	107,697	109,714	113,729	114,655	115,237		111,868
Other Assets, Noncurrent			1,447	1,447	1,738	2,102	2,107	2,101		1,738
Assets			143,960	138,832	137,217	146,071	145,689	145,808		142,631
Accounts Payable and Accrued Liabilities, Current			15,887	9,850	17,110	11,569	7,108	21,250		12,147
Long-term Debt, Current Maturities			2,077	3,571	5,065	6,554	6,549	5,043		6,560
Liabilities, Current			17,964	13,421	22,175	18,123	13,657	26,293		18,707
Long-term Debt, Excluding Current Maturities			30,139	28,803	13,018	25,519	26,358	13,007		20,733
Members' Capital			87,165	87,165	87,165	87,165	87,165	87,165		87,165
Retained Earnings (Accumulated Deficit)			8,692	9,443	14,859	15,264	18,509	19,343		16,026
Liabilities and Equity			143,960	138,832	137,217	146,071	145,689	145,808		142,631
Restatement [Member]
Debt Securities, Available-for-sale [Line Items]
Revenues			53,505	53,190	53,382	53,611	53,551	50,546		214,990
Cost of Goods and Services Sold			52,903	53,617	53,020	54,924	53,337	47,980		211,350
Gross Profit			602	(427)	362	(1,313)	214	2,566		3,640
General and Administrative Expense			1,061	1,174	1,502	1,809	1,056	1,378		4,972
Interest Income (Expense), Net			292	215	169	265	135	149		1,372
Net Income (Loss) Attributable to Parent			$ (751)	$ (1,816)	$ (1,309)	$ (3,387)	$ (977)	$ 1,039		$ (2,704)
Earnings Per Share, Basic | $ / shares			$ (56.35)	$ (136.26)	$ (98.22)	$ (254.15)	$ (73.31)	$ 77.96		$ (202.9)
Earnings Per Share, Diluted | $ / shares			$ (56.35)	$ (136.26)	$ (98.22)	$ (254.15)	$ (73.31)	$ 72.22		$ (202.9)
Cash			$ 1,076	$ 1,101	$ 1,042	$ 1,207	$ 1,275	$ 2,489		$ 1,440
Accounts and Other Receivables, Net, Current			7,636	9,776	9,909	14,584	12,945	11,601		12,672
Inventory, Net			19,848	17,278	13,650	13,547	13,176	13,176		13,526
Other Assets, Current			3,996	1,533	1,164	902	1,531	1,204		1,387
Assets, Current			32,556	29,688	25,765	30,240	28,927	28,470		29,025
Property, Plant and Equipment, Net			109,957	107,697	109,714	113,729	114,655	115,237		111,868
Other Assets, Noncurrent			1,447	1,447	1,738	2,102	2,107	2,101		1,738
Assets			143,960	138,832	137,217	146,071	145,689	145,808		142,631
Accounts Payable and Accrued Liabilities, Current			17,687	11,650	17,964	11,569	7,108	21,250		12,147
Long-term Debt, Current Maturities			2,077	3,571	5,065	6,554	6,549	5,043		6,560
Liabilities, Current			19,764	15,221	23,029	18,123	13,657	26,293		18,707
Long-term Debt, Excluding Current Maturities			33,919	32,583	17,695	30,767	31,464	17,971		26,122
Members' Capital			87,165	87,165	87,165	87,165	87,165	87,165		87,165
Retained Earnings (Accumulated Deficit)			3,112	3,863	9,328	10,016	13,403	14,379		10,637
Liabilities and Equity			$ 143,960	$ 138,832	$ 137,217	$ 146,071	$ 145,689	$ 145,808		142,631
Restatement Adjustment [Member]
Debt Securities, Available-for-sale [Line Items]
Revenues										0
Cost of Goods and Services Sold										567
Gross Profit										(567)
General and Administrative Expense										0
Interest Income (Expense), Net										0
Net Income (Loss) Attributable to Parent										$ (567)
Earnings Per Share, Basic | $ / shares										$ (42.55)
Earnings Per Share, Diluted | $ / shares										$ (42.55)
Cash										$ 0
Accounts and Other Receivables, Net, Current										0
Inventory, Net										0
Other Assets, Current										0
Assets, Current										0
Property, Plant and Equipment, Net										0
Other Assets, Noncurrent										0
Assets										0
Accounts Payable and Accrued Liabilities, Current										0
Long-term Debt, Current Maturities										0
Liabilities, Current										0
Long-term Debt, Excluding Current Maturities										5,389
Members' Capital										0
Retained Earnings (Accumulated Deficit)										(5,389)
Liabilities and Equity										$ 0
Capital Unit, Class A [Member]
Debt Securities, Available-for-sale [Line Items]
Stockholders' Equity, Period Increase (Decrease)									$ 5,100,000
Subsequent Event [Member]
Debt Securities, Available-for-sale [Line Items]
Payments for Repurchase of Common Stock	$ 11,100,000
Decrease (Increase) in Put Warrant Liability		$ 6,000,000.0
Weighted Average Number of Shares Outstanding, Basic | shares	12,309
Operating Lease, Right-of-Use Asset											$ 8,200,000

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Members' Equity Members" Equity (Tables)

12 Months Ended

Sep. 30, 2019

Equity [Abstract]

Schedule of Stockholders Equity [Table Text Block]

At September 30, 2019 and 2018 outstanding member units were:

	September 30, 2019	September 30, 2018
A Units	8,993	8,993
B Units	3,334	3,334
C Units	1,000	1,000
	13,327	13,327

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Inventory (Components Of Inventory) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Sep. 30, 2018
Inventory Disclosure [Abstract]
Raw Materials - corn	$ 4,270	$ 4,095
Supplies and Chemicals	5,063	4,747
Work in Process	1,724	1,421
Finished Goods	6,110	3,263
Total	$ 17,167	$ 13,526

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Statement Of Members' Equity - USD ($) $ in Thousands	Total	Member Contribution [Member]	Retained Earnings [Member]
Members' Capital		$ 87,165
Retained Earnings (Accumulated Deficit)			$ 20,004
Balance at Sep. 30, 2017	$ 107,169
Balance at Sep. 30, 2017	107,169
Balance at Sep. 30, 2018	97,802
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Paid	(6,663)	0	6,663
Net (loss)	2,704	0	2,704
Members' Capital		87,165
Retained Earnings (Accumulated Deficit)	10,637		10,637
Balance at Sep. 30, 2018	97,802
Balance at Sep. 30, 2019	89,305
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Paid	0
Net (loss)	8,497	0	8,497
Retained Earnings (Accumulated Deficit)	$ 2,140	$ 87,165	$ 2,140

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Document And Entity Information - USD ($)	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Aggregate Market Value of Non-affiliates	$ 44,668,200
Capital Units, Outstanding	13,327	13,327
Entity Registrant Name	Southwest Iowa Renewable Energy, LLC
Entity Central Index Key	0001424844
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Shell Company	false
Entity Address, Address Line One	10868 189th street
Entity Address, City or Town	Council Bluffs
Entity Address, State or Province	IA
Entity Address, Postal Zip Code	51503
City Area Code	712
Local Phone Number	366-0392
Entity Tax Identification Number	20-2735046
Entity File Number	000-53041
Document Type	10-K
Entity Emerging Growth Company	false
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	IA
Document Annual Report	true
Document Transition Report	false
Entity Public Float	$ 52,134,000
Common Class A [Member]
Entity Common Stock, Shares Outstanding	8,810
Common Class B [Member]
Entity Common Stock, Shares Outstanding	3,334
Common Class C [Member]
Entity Common Stock, Shares Outstanding	1,000

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Subsequent Events (Notes)

12 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Events

FCSA/CoBank

On November 8, 2019, the Company amended the credit agreement with Farm Credit Services of America, FLCA (“FCSA”) and CoBank, ACB, as cash management provider and agent (“CoBank”) which provides the Company with a term loan in the amount of $30 million (the “Term Loan”) and a revolving term loan in the amount of up to $40 million (the “Revolving Term Loan", and together with the Term Loan, the “FCSA Credit Facility”). The FCSA Credit Facility is secured by a security interest on all of the Company’s assets.

The Term Loan provides for payments by the Company to FCSA of semi-annual installments of $3.75 million, which begins on September 1, 2020 and matures on November 15, 2024. The Revolving Term Loan has a maturity date of November 15, 2024. Under the FCSA Credit Facility, the Company has the right to select from the several LIBOR based interest rate options with respect to each of the Term Loan and the Revolving Term Loan, with a LIBOR spread of 3.4% per annum.

Put Option liability.

The put option liability consists of an agreement between the Company and ICM that contained a conditional obligation to repurchase feature. On August 16, 2019, ICM notified SIRE of their intent to exercise the put option, but waived their right to determine the fair market value for their units. On November 15, 2019, the Company closed the repurchase transaction and paid $11.1 million to ICM in settlement of the put option provision consistent with the terms of the agreement. This settlement will also cause the number of shares outstanding to change to 12,309 shares for the remainder of the first quarter in Fiscal 2020.

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Fair Value Measurement

12 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurement

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  In determining fair value, the Company used various methods including market, income and cost approaches.  Based on these approaches, the Company often utilized certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique.  These inputs can be readily observable, market corroborated, or generally unobservable inputs.  The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.  Based on the observable inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy.

The fair value hierarchy ranks the quality and reliability of the information used to determine fair values.  Financial assets and liabilities carried at fair value will be 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 classifications of such instruments pursuant to the valuation hierarchy, is set below.

Put Option liability. The put option liability consists of an agreement between the Company and ICM that contains a conditional obligation to repurchase feature. On August 16, 2019, ICM notified SIRE their notice to exercise the put option, but waived their right to determine the fair market value for their units. In past years, the Company calculated the fair value of the put option under Level 3, using a valuation model called the Monte Carlo Simulation. SIRE calculated the liability by utilizing the weighted average purchase price for Fiscal 2019 transactions. Using weighted average purchase prices from Fiscal 2019, the estimated value at September 30, 2019 was $6.0 million, while the Monte Carlo method calculated $5.4 million at September 30, 2018. SIRE settled the transaction on November 15, 2019.

Derivative financial statements.  Commodity futures and exchange traded options 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 the Chicago Mercantile Exchange (“CME”) market.  Ethanol contracts are reported at fair value utilizing Level 2 inputs from third-party pricing services.  Forward purchase contracts are reported at fair value utilizing Level 2 inputs.   For these contracts, the Company obtains fair value measurements from local grain terminal values.  The fair value measurements consider observable data that may include live trading bids from local elevators and processing plants which are based off the CME market.

The following table summarizes financial instruments measured at fair value on a recurring basis as of September 30, 2019 and 2018, categorized by the level of the valuation inputs within the fair value hierarchy: (dollars in '000s)

	September 30, 2019
	Level 1		Level 2		Level 3
Assets:
Derivative financial instruments	$	368	$	—	$	—
Liabilities:
Derivative financial instruments	364		597		—
Put Option Liability	—		—		6,037
	September 30, 2018
	Level 1		Level 2		Level 3
Assets:
Derivative financial instruments	$	583	$	—	$	—
Liabilities:
Derivative financial instruments	82		1,567		—
Put Option Liability	—		—		5,400

The following table summarizes the assumptions used in computing the fair value of the put option subject to fair value:

	September 30, 2019			September 30, 2018
Expected dividend yield	—			—
Risk-free interest rate	—		%	2.57		%
Expected volatility	—		%	22		%
Expected life (years)	—			1.25
Exercise unit price	$	10,897		$	10,897
Company unit price	$	4,967		$	5,500

The following table reflects the activity for liabilities measured at fair value using Level 3 inputs as of September 30, 2019 and September 30, 2018:

	September 30, 2019		September 30, 2018
Beginning Balance	$	5,400	$	5,700
Change in Value	637		(300		)
Ending Balance	$	6,037	$	5,400

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Commitments (Details) $ in Millions	12 Months Ended
	Sep. 30, 2019 USD ($) lb / h	Sep. 30, 2018 USD ($)
Purchase Of Steam Under Steam Contract | lb / h	475,000
Expenses Related To Steam Contract	$ 5.7	$ 4.2
Operating Leases, Future Minimum Payments Due, Next Twelve Months	3.2
Operating Leases, Future Minimum Payments, Due in Two Years	3.1
Operating Leases, Future Minimum Payments, Due in Three Years	2.6
Operating Leases, Future Minimum Payments, Due in Four Years	1.2
Operating Leases, Rent Expense, Net	4.0	4.7
Unrelated Party [Member]
Operating Leases, Rent Expense, Net	$ 0.2	$ 0.6

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Members' Equity (Narrative) (Details) - shares	Sep. 30, 2019	Sep. 30, 2018
Capital Unit [Line Items]
Capital Units, Outstanding	13,327	13,327
Capital Unit, Class A [Member]
Capital Unit [Line Items]
Capital Units, Outstanding	8,993	8,993
Capital Unit, Class B [Member]
Capital Unit [Line Items]
Capital Units, Outstanding	3,334	3,334
Capital Unit Class C [Member]
Capital Unit [Line Items]
Capital Units, Outstanding	1,000	1,000

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Fair Value Measurement (Financial Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details)	12 Months Ended
	Sep. 30, 2019 USD ($) $ / shares	Sep. 30, 2018 USD ($) $ / shares	Sep. 30, 2017 USD ($)
Derivative [Line Items]
Assets: Derivative financial instruments	$ 78,000	$ 1,046,000
Liabilities: Derivative financial instruments	$ 597,000	$ 1,567,000
Warrant Option, Expected Dividend Yield	0.00%	0.00%
Warrant Option, Risk-free interest	0.00%	2.57%
Warrant Option, Expected Volatility	0.00%	22.00%
Warrant Option, Expected Life	0	1.25
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares	$ 10,897	$ 10,897
Share Price | $ / shares	$ 4,967	$ 5,500
Increase (Decrease) in Put Options	$ 637,000	$ (300,000)
Level 1 [Member]
Derivative [Line Items]
Liabilities: Derivative financial instruments	364,000,000	82,000
Warrants and Rights Outstanding	0	0
Level 2 [Member]
Derivative [Line Items]
Assets: Derivative financial instruments	0	0
Warrants and Rights Outstanding	0	0
Level 3 [Member]
Derivative [Line Items]
Assets: Derivative financial instruments	0	0
Liabilities: Derivative financial instruments	0	0
Warrants and Rights Outstanding	6,037,000	5,400,000	$ 5,700,000
Increase (Decrease) in Put Options	637,000	(300,000)
Futures And Option Contracts In Gain Position [Member]
Derivative [Line Items]
Assets: Derivative financial instruments	368,000	$ 583,000
Reported Value Measurement [Member] | Level 3 [Member]
Derivative [Line Items]
Warrants and Rights Outstanding	6,000,000.0
Portion at Other than Fair Value Measurement [Member] | Level 3 [Member]
Derivative [Line Items]
Warrants and Rights Outstanding	$ 5,400,000

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Summary Of Significant Accounting Policies (Schedule Of Net Realized And Unrealized Gains And Losses On Derivative Contracts) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Summary Of Significant Accounting Policies [Line Items]
Net realized and unrealized (gains) losses	$ 2,825	$ 1,674
Forward Contracts [Member]
Summary Of Significant Accounting Policies [Line Items]
Net realized and unrealized (gains) losses	$ (1,530)	$ 1,894

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Fair Value Measurement (Tables)

12 Months Ended

Sep. 30, 2019

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

The following table summarizes the assumptions used in computing the fair value of the put option subject to fair value:

	September 30, 2019			September 30, 2018
Expected dividend yield	—			—
Risk-free interest rate	—		%	2.57		%
Expected volatility	—		%	22		%
Expected life (years)	—			1.25
Exercise unit price	$	10,897		$	10,897
Company unit price	$	4,967		$	5,500

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following table reflects the activity for liabilities measured at fair value using Level 3 inputs as of September 30, 2019 and September 30, 2018:

	September 30, 2019		September 30, 2018
Beginning Balance	$	5,400	$	5,700
Change in Value	637		(300		)
Ending Balance	$	6,037	$	5,400

Financial Assets And Liabilities Measured At Fair Value On A Recurring Basis

The following table summarizes financial instruments measured at fair value on a recurring basis as of September 30, 2019 and 2018, categorized by the level of the valuation inputs within the fair value hierarchy: (dollars in '000s)

	September 30, 2019
	Level 1		Level 2		Level 3
Assets:
Derivative financial instruments	$	368	$	—	$	—
Liabilities:
Derivative financial instruments	364		597		—
Put Option Liability	—		—		6,037
	September 30, 2018
	Level 1		Level 2		Level 3
Assets:
Derivative financial instruments	$	583	$	—	$	—
Liabilities:
Derivative financial instruments	82		1,567		—
Put Option Liability	—		—		5,400

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Nature Of Business

12 Months Ended

Sep. 30, 2019

Nature Of Business [Abstract]

Nature Of Business

Nature of Business

Southwest Iowa Renewable Energy, LLC (the “Company”), located in Council Bluffs, Iowa, was formed in March 2005, operates a 140 million gallon capacity ethanol plant and began producing ethanol in February 2009.  The Company sold 128.0 million gallons and 127.8 million gallons of ethanol in Fiscal 2019 and Fiscal 2018, respectively. The Company sells its ethanol distillers grains, corn syrup, and corn oil in the continental United States, Mexico and the Pacific Rim.

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Balance Sheets (Parenthetical) - shares	Sep. 30, 2019	Sep. 30, 2018
Statement of Financial Position [Abstract]
Members' capital, units issued	13,327	13,327
Members' capital, units outstanding	13,327	13,327

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Notes Payable (Components Of Notes Payable) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Notes Payable [Line Items]
Total	$ 26,471	$ 22,023
Less current maturities	(580)	(6,560)
Accumulated Amortization, Debt Issuance Costs, Noncurrent	59	130
Long-term Debt, Excluding Current Maturities	$ 25,832	15,333
CoBank [Member] | Term Loan [Member]
Notes Payable [Line Items]
Debt Instrument, Description of Variable Rate Basis	LIBOR plus 3.35%
Variable interest rate	3.35%
Debt Instrument, Interest Rate During Period	5.37%
Line of Credit Facility, Amount Outstanding	$ 0	6,000
CoBank [Member] | Term Revolver [Member]
Notes Payable [Line Items]
Debt Instrument, Description of Variable Rate Basis	LIBOR plus 3.35%
Variable interest rate	3.35%
Debt Instrument, Interest Rate During Period	5.37%
Line of Credit Facility, Amount Outstanding	$ 23,902	12,894
Note Payable - IDED [Member]
Notes Payable [Line Items]
Line of Credit Facility, Amount Outstanding	$ 2,569	$ 3,129
Minimum [Member] | Other debt [Member]
Notes Payable [Line Items]
Debt Instrument, Interest Rate During Period	3.50%
Maximum [Member] | Other debt [Member]
Notes Payable [Line Items]
Debt Instrument, Interest Rate During Period	4.15%

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Related Party Transactions (Bunge) (Narrative) (Details) bu in Thousands		1 Months Ended	3 Months Ended	12 Months Ended
	Jun. 26, 2009	Jan. 31, 2015	Dec. 31, 2016	Sep. 30, 2019 USD ($) bu	Sep. 30, 2018 USD ($) bu
Related Party Transaction [Line Items]
Revenues				$ 216,993,000	$ 214,990,000
Accounts Receivable, Related Parties, Current				7,885,000	11,537,000
Bunge [Member]
Related Party Transaction [Line Items]
Marketing Expense				2,800,000	2,700,000
Revenues				205,100,000	204,700,000
Accounts Receivable, Related Parties, Current				7,900,000	11,600,000
Ethanol Agreement [Member] | Bunge [Member]
Related Party Transaction [Line Items]
Investment from related parties				$ 1,500,000	1,535,138
Renewal period				5 years
Railcar Agreement [Member] | Bunge [Member]
Related Party Transaction [Line Items]
Agreement period		120 months
Related Party Transaction, Expenses from Transactions with Related Party				$ 3,500,000	$ 4,000,000.0
Railcar Agreement [Member] | Ethanol Cars [Member] | Bunge [Member]
Related Party Transaction [Line Items]
Number Of Railcars	325		323	323
Agreement period				4 years
Railcar Agreement [Member] | Hopper Cars [Member] | Bunge [Member]
Related Party Transaction [Line Items]
Number Of Railcars	300	298		111
Railcar lease reduction		1			1
Agreement period				3 years
Sublease, hopper car, units				96
Railcar Agreement [Member] | Hopper Cars [Member] | Unrelated Party [Member]
Related Party Transaction [Line Items]
Sublease, hopper car, units				92
Assignment, hopper cars, unit				52
Distillers Grain Purchase Agreement [Member] | Bunge [Member]
Related Party Transaction [Line Items]
Marketing Expense				$ 1,300,000	$ 1,200,000
Renewal period				5 years
Grain Feedstock Agency Agreement [Member] | Bunge [Member]
Related Party Transaction [Line Items]
Investment from related parties				$ 700,000	$ 720,000
Derivative Contracts, Corn, Bushels | bu				7	116
Derivative Contracts, Corn, Dollars				$ 25,000	$ 393,000
Renewal period				5 years
Services Agreement [Member] | Bunge [Member]
Related Party Transaction [Line Items]
Renewal period				5 years

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Summary Of Significant Accounting Policies (Tables)

12 Months Ended

Sep. 30, 2019

Schedule of Quantifying Prior Year Misstatements Corrected in Current Year Financial Statements [Table Text Block]

Fiscal 2018 - Annual	Original			Restated			Increase
Amounts in 000's	September 30, 2018			September 30, 2018			(Decrease)
Revenues	214,990			214,990			—
Cost of Goods Sold	210,783			211,350			567
Gross Margin	4,207			3,640			(567		)
General and administrative expenses	4,972			4,972			—
Interest expense and other income, net	1,372			1,372			—
Net (Loss)	(2,137		)	(2,704		)	(567		)
Net (Loss) per unit basic	$	(160.35	)	$	(202.9	)	$	(42.55	)
Net (Loss) per unit diluted	$	(160.35	)	$	(202.9	)	$	(42.55	)
ASSETS
Current Assets
Cash & cash equivalents	1,440			1,440			—
Accounts receivable	12,672			12,672			—
Inventory	13,526			13,526			—
Other current assets	1,387			1,387			—
Total Current Assets	29,025			29,025			—
Net property, plant and equipment	111,868			111,868			—
Other assets	1,738			1,738			—
Total Assets	142,631			142,631			—
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	12,147			12,147			—
Current maturities of notes payable	6,560			6,560			—
Total Current Liabilities	18,707			18,707			—
Total Long Term Liabilities	20,733			26,122			5,389
Members' Capital	87,165			87,165			—
Accumulated Earnings	16,026			10,637			(5,389		)
Total Liabilities and Members' Equity	142,631			142,631			—
Fiscal 2018 - Quarterly	Original			Restated			Original			Restated
Amounts in 000's	December 31, 2017			December 31, 2017			March 31, 2018			March 31, 2018
Revenues	50,546			50,546			53,551			53,551

Cost of Goods Sold	47,838			47,980			53,195			53,337
Gross Margin	2,708			2,566			356			214
General and administrative expenses	1,378			1,378			1,056			1,056
Interest expense and other income, net	149			149			135			135
Net Income (Loss)	1,181			1,039			(835		)	(977		)
Net Income (Loss) per unit basic	$	88.62		$	77.96		$	(62.65	)	$	(73.31	)
Net Income (Loss) per unit diluted	$	82.09		$	72.22		$	(62.65	)	$	(73.31	)
	Original			Restated			Original			Restated
	December 31, 2017			December 31, 2017			March 31, 2018			March 31, 2018
ASSETS
Current Assets
Cash & cash equivalents	2,489			2,489			1,275			1,275
Accounts receivable	11,601			11,601			12,945			12,945
Inventory	13,176			13,176			13,176			13,176
Other current assets	1,204			1,204			1,531			1,531
Total Current Assets	28,470			28,470			28,927			28,927
Net property, plant and equipment	115,237			115,237			114,655			114,655
Other assets	2,101			2,101			2,107			2,107
Total Assets	145,808			145,808			145,689			145,689
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	21,250			21,250			7,108			7,108
Current maturities of notes payable	5,043			5,043			6,549			6,549
Total Current Liabilities	26,293			26,293			13,657			13,657
Total Long Term Liabilities	13,007			17,971			26,358			31,464
Members' Capital	87,165			87,165			87,165			87,165
Accumulated Earnings	19,343			14,379			18,509			13,403
Total Liabilities and Members' Equity	145,808			145,808			145,689			145,689
Fiscal 2018 - Quarterly	Original			Restated
Amounts in 000's	June 30, 2018			June 30, 2018
Revenues	53,611			53,611
Cost of Goods Sold	54,782			54,924
Gross Margin (Loss)	(1,171		)	(1,313		)
General and administrative expenses	1,809			1,809
Interest expense and other income, net	265			265
Net (Loss)	(3,245		)	(3,387		)
Net (Loss) per unit basic	$	(243.49	)	$	(254.15	)
Net (Loss) per unit diluted	$	(243.49	)	$	(254.15	)

	Original	Restated
	June 30, 2018	June 30, 2018
ASSETS
Current Assets
Cash & cash equivalents	1,207	1,207
Accounts receivable	14,584	14,584
Inventory	13,547	13,547
Other current assets	902	902
Total Current Assets	30,240	30,240
Net property, plant and equipment	113,729	113,729
Other assets	2,102	2,102
Total Assets	146,071	146,071
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	11,569	11,569
Current maturities of notes payable	6,554	6,554
Total Current Liabilities	18,123	18,123
Total Long Term Liabilities	25,519	30,767
Members' Capital	87,165	87,165
Accumulated Earnings	15,264	10,016
Total Liabilities and Members' Equity	146,071	146,071

Schedule of Quantifying Prior Quarters of Current Year Misstatements [Table Text Block]

Fiscal 2019 - Quarterly	Original			Restated			Original			Restated
Amounts in 000's	December 31, 2018			December 31, 2018			March 31, 2019			March 31, 2019
Revenues	53,382			53,382			53,190			53,190
Cost of Goods Sold	52,878			53,020			53,568			53,617
Gross Margin (Loss)	504			362			(378		)	(427		)
General and administrative expenses	1,502			1,502			1,174			1,174
Interest expense and other income, net	169			169			215			215
Net (Loss)	(1,167		)	(1,309		)	(1,767		)	(1,816		)
Net (Loss) per unit basic	$	(87.57	)	$	(98.22	)	$	(132.59	)	$	(136.26	)
Net (Loss) per unit diluted	$	(87.57	)	$	(98.22	)	$	(132.59	)	$	(136.26	)
	Original			Restated			Original			Restated
	December 31, 2018			December 31, 2018			March 31, 2019			March 31, 2019
ASSETS
Current Assets
Cash & cash equivalents	1,042			1,042			1,101			1,101
Accounts receivable	9,909			9,909			9,776			9,776
Inventory	13,650			13,650			17,278			17,278

Other current assets	1,164			1,164			1,533	1,533
Total Current Assets	25,765			25,765			29,688	29,688
Net property, plant and equipment	109,714			109,714			107,697	107,697
Other assets	1,738			1,738			1,447	1,447
Total Assets	137,217			137,217			138,832	138,832
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	17,110			17,964			9,850	11,650
Current maturities of notes payable	5,065			5,065			3,571	3,571
Total Current Liabilities	22,175			23,029			13,421	15,221
Total Long Term Liabilities	13,018			17,695			28,803	32,583
Members' Capital	87,165			87,165			87,165	87,165
Accumulated Earnings	14,859			9,328			9,443	3,863
Total Liabilities and Members' Equity	137,217			137,217			138,832	138,832
Fiscal 2019 - Quarterly	Original			Restated
Amounts in 000's	June 30, 2019			June 30, 2019
Revenues	53,505			53,505
Cost of Goods Sold	52,903			52,903
Gross Margin	602			602
General and administrative expenses	1,061			1,061
Interest expense and other income, net	292			292
Net (Loss)	(751		)	(751		)
Net (Loss) per unit basic	$	(56.35	)	$	(56.35	)
Net (Loss) per unit diluted	$	(56.35	)	$	(56.35	)
	Original			Restated
	June 30, 2019			June 30, 2019
ASSETS
Current Assets
Cash & cash equivalents	1,076			1,076
Accounts receivable	7,636			7,636
Inventory	19,848			19,848
Other current assets	3,996			3,996
Total Current Assets	32,556			32,556
Net property, plant and equipment	109,957			109,957
Other assets	1,447			1,447
Total Assets	143,960			143,960
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities

Accounts payable, derivative financial instruments and accrued expenses	15,887	17,687
Current maturities of notes payable	2,077	2,077
Total Current Liabilities	17,964	19,764
Total Long Term Liabilities	30,139	33,919
Members' Capital	87,165	87,165
Accumulated Earnings	8,692	3,112
Total Liabilities and Members' Equity	143,960	143,960

Schedule Of Derivatives Not Designated As Hedging Instruments

Derivatives not designated as hedging instruments along with cash due to brokers at September 30, 2019 and 2018 are as follows:

	Balance Sheet Classification	September 30, 2019			September 30, 2018
		in 000's			in 000's
Futures and option contracts
In gain position		$	368		$	583
In loss position		(364		)	(82		)
Cash held by broker		74			545
	Current asset	78			1,046
Forward contracts, corn	Current liability	597			1,567
Net futures, options, and forward contracts		$	(519	)	$	(521	)

Schedule Of Net Realized And Unrealized Gains And Losses On Derivative Contracts

The net realized and unrealized gains and losses on the Company’s derivative contracts for the years ended September 30, 2019 and 2018 consist of the following:

	Statement of Operations Classification	September 30, 2019			September 30, 2018
Net realized and unrealized (gains) losses related to:		(in 000's)			(in 000's)
Forward purchase contracts (corn)	Cost of Goods Sold	$	(1,530	)	$	1,894
Futures and option contracts (corn)	Cost of Goods Sold	(1,295		)	(3,568		)

Schedule Of Property And Equipment

Property and equipment are stated at cost.  Depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings	40 Years
Process Equipment	10 - 20 Years
Office Equipment	3-7 Years

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Related Party Transactions

12 Months Ended

Sep. 30, 2019

Related Party Transaction, Due from (to) Related Party [Abstract]

Related Party Transactions

Related Party Transactions and Major Customers

Related Party Transactions

Bunge

On December 5, 2014, the Company entered into an Amended and Restated Ethanol Purchase Agreement with Bunge which was further amended and restated on October 23, 2017 to include specific provisions for loading and shipment of ethanol by truck (the “Ethanol Agreement”). Under the Ethanol Agreement, the Company has agreed to sell Bunge all of the ethanol produced by the Company, and Bunge has agreed to purchase the same.  The Company will pay Bunge a percentage marketing fee for ethanol sold by Bunge, subject to a minimum and maximum annual fee.  The initial term of the Ethanol Agreement expires on December 31, 2019, however it it will automatically renew for one five-year term, unless terminated by the parties in accordance with the terms of the agreement. The Company has incurred ethanol marketing expenses of $1.5 million in each year for Fiscal 2019 and Fiscal 2018, under the Ethanol Agreement.

On June 26, 2009, the Company executed a Railcar Agreement with Bunge for the lease of 325 ethanol cars and 300 hopper cars which are used for the delivery and marketing of ethanol and distillers grains. In November 2016, The Company reduced the number of leased ethanol cars to 323 and in both November 2013 and January 2015 The Company reduced the number of hopper cars by one for a total of 298 leased hopper cars.  Under the Railcar Agreement, the Company leases railcars for terms lasting 120 months and continuing on a month to month basis thereafter.  The Railcar Agreement will terminate upon the expiration of all railcar leases.  Expenses under this agreement were $3.5 million and $4.0 million for Fiscal 2019 and 2018, net of subleases and accretion, respectively. In November 2016, the Company entered into a sublease for 96 hoppers with Bunge that expired on March 24, 2019. The Company had subleased another 92 hopper cars to unrelated third parties, which also expired March 25, 2019. In June 2018, one of the third party customers entered into an assignment agreement for their 52 hopper cars with the Company and Bunge which will be phased in over the fourth quarter, and the start of the first quarter in our fiscal year ending September 30, 2019. SIRE received an up front assignment payment, and the net result will be financially neutral, and the number of side-leased railcars by SIRE remains the same.

The Company entered into a agreement effective March 24, 2019 extending the original Railcar Agreement with Bunge for the lease of 323 ethanol cars and 111 hopper cars which will be used for the delivery and marketing of ethanol and distiller grains. Under the terms of the new agreement, the original DOT111 tank cars are leased over a four year term running from March 24, 2019 to April 30, 2023, with the ability to start returning cars after January 1, 2023 to conform to the requirement for DOT117 tank cars with enhanced safety specifications which is scheduled to become effective May 2023. The 111 hopper cars are leased over a three year term running from March 24, 2019 to March 31, 2022. The combined cost for the leases for Fiscal 2019 was $3.5 million and $4.0 million in Fiscal 2018.

The Company continues to work with Bunge to determine the need for ethanol and hopper cars in light of current market conditions, and the expected conditions in 2020 and beyond. The Company believes we will be able to fully utilize our fleet of hopper cars in the future, to allow us to cost-effectively ship distillers grains to distant markets, primarily the export markets.        

On December 5, 2014, the Company and Bunge entered into an Amended and Restated Distiller’s Grain Purchase Agreement (the “ DG Purchase Agreement ”).  Under the DG Purchase Agreement, Bunge will purchase all distiller’s grains produced by the Company, and will receive a marketing fee based on the net sale price of distillers grains, subject to a minimum and maximum annual fee.  The initial term of the DG Purchase Agreement expires on December 31, 2019  and will automatically renew for one five year term unless terminated by the parties in accordance with the terms of the agreement. The Company has incurred distillers grains marketing expenses of $1.3 million and $1.2 million during Fiscal 2019 and 2018, respectively.

The Company and Bunge also entered into an Amended and Restated Grain Feedstock Agency Agreement on December 5, 2014 (the “ Agency Agreement ”).  The Agency Agreement provides that Bunge will procure corn for the Company, the Company will pay Bunge a per bushel fee, subject to a minimum and maximum annual fee.  The initial term of the Agency Agreement expires on December 31, 2019 and will automatically renew for one five year term unless terminated by the parties in accordance with the terms of the agreement. Expenses for corn procurement by Bunge were $0.7 million for each year of the fiscal years ended September 30, 2019 and 2018. The Company has outstanding corn contracts of 7 thousand bushels with a $25 thousand liability as of September 30, 2019, and 116 thousand bushels with a $393 thousand liability as of September 30, 2018 included in derivative financial instruments liability on the balance sheet.

Since the 2015 crop year, the Company has been using corn containing Syngenta Seeds, Inc.’s proprietary Enogen® technology (“ Enogen Corn ”) for a portion of its ethanol production needs.  The Company contracts directly with growers to produce Enogen Corn for sale to the Company.  Concurrent with the Agency Agreement, the Company and Bunge entered into a Services Agreement regarding corn purchases (the “ Services Agreement ”).  Under this agreement, the Company originates all Enogen Corn contracts for its facility and Bunge assists the Company with certain administrative matters related to Enogen Corn, including facilitating delivery to the facility.  The Company pays Bunge a per bushel service fee.  The initial term of the Services Agreement expires on December 31, 2019 and will automatically renew for one additional five year term unless terminated by the parties in accordance with the terms of the agreement. Expenses under the Services Agreement are included as part of the Amended and Restated Grain Feedstock Agency Agreement discussed above.

ICM    

In connection with the payoff of the ICM subordinated debt, the Company entered into the SIRE ICM Unit Agreement dated December 17, 2014 (the “ Unit Agreement ”).  Under the Unit Agreement, the Company granted ICM the right to sell to the Company its 1,000 Series C and 18 Series A Membership Units (the “ ICM Units ”) commencing anytime during the earliest of  several alternative dates and events at the greater of $10,897 per unit or the fair market value (as defined in the agreement) on the date of exercise. The Company increased expense in Fiscal 2019 by $637 thousand, and in Fiscal 2018 reduced expense by $300 thousand in conjunction with this put right under the Unit Agreement. See Note 7 Fair Value Measurement, for the terms of this agreement. In accordance with the terms of the Unit Agreement, the Company repurchased the ICM Units on November 15, 2019. See Note 11 Subsequent Event, for additional information regarding the repurchase of the ICM Units.

Major Customers

The Company is party to the Ethanol Agreement and the Distillers Grain Purchase Agreement with Bunge for the exclusive marketing, selling, and distributing of all of the ethanol and distillers grains produced by the Company.  The Company has expensed $2.8 million and $2.7 million in marketing fees under these agreements for Fiscal 2019 and 2018, respectively. Revenues with this customer were $205.1 million and $204.7 million, respectively, for Fiscal 2019 and 2018.   Trade accounts receivable due from Bunge were $7.9 million and $11.6 million as of September 30, 2019 and 2018, respectively.

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Revolving Loan/Credit Agreements

12 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Revolving Loan/Credit Agreements

Revolving Loan/Credit Agreements

FCSA/CoBank

During Fiscal 2014, the Company entered into a credit agreement with Farm Credit Services of America, FLCA (“FCSA”) and CoBank, ACB, as cash management provider and agent (“CoBank”) which provides the Company with a term loan in the amount of $30,000,000 (the “Term Loan”) and a revolving term loan in the amount of up to $36,000,000 (the “Revolving Term Loan", and together with the Term Loan, the “FCSA Credit Facility”). The FCSA Credit Facility is secured by a security interest on all of the Company’s assets.

The Term Loan provides for payments by the Company to FCSA of quarterly installments of $1,500,000, which began on December 20, 2014 and matured September 20, 2019. The Revolving Term Loan has a maturity date of June 1, 2023 and requires annual reductions in principal availability of $6,000,000 commencing on June 1, 2020. Under the FCSA Credit Facility, the Company has the right to select from the several LIBOR based interest rate options with respect to each of the Term Loan and the Revolving Term Loan.

As of September 30, 2019, there was $23.9 million outstanding under the FCSA Credit Facility, with $12.1 million available under the Revolving Term Loan.

Financing costs associated with the Credit Agreement Facility are recorded at cost and include expenditures directly related to securing debt financing.  The Company amortizes financing costs using the effective interest method over the term of the related debt.

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Notes Payable (Aggregate Maturities Of Notes Payable) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Sep. 30, 2018
Debt Instrument [Line Items]
Long-term Debt, Current Maturities	$ 580	$ 6,560
Long-term Debt, Maturities, Repayments of Principal in Year Two	589
Long-term Debt, Maturities, Repayments of Principal in Year Four	7,302
Long-term Debt, Maturities, Repayments of Principal in Year Four	18,000
Total	$ 26,471	$ 22,023

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Related Party Transactions (ICM) (Narrative) (Details) - ICM [Member] - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Unit Agreement [Member]
Related Party Transaction [Line Items]
Selling Rights, Greater of Minimum Unit Price or Fair Market Value	$ 10,897
Related Party Transaction, Expenses from Transactions with Related Party		$ 300
Capital Unit Class C [Member]
Related Party Transaction [Line Items]
Selling Rights, Units	1,000
Capital Unit, Class A [Member]
Related Party Transaction [Line Items]
Selling Rights, Units	18

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Incentive Compensation

12 Months Ended

Sep. 30, 2019

Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract]

Incentive Compensation

Incentive Compensation

The Company has an equity incentive plan which provides that the Board of Directors may make awards of equity appreciation units (“EAU”) and equity participation units (“EPU”) to employees from time to time, subject to vesting provisions as determined for each award. There are no EAUs outstanding. The EPUs are valued in accordance with the agreement which is based on the book value per unit of the Company. The Company had 69.7 unvested EPUs outstanding under this plan as of September 30, 2019, which will vest three years from the dates of the awards.  

During the Fiscal 2019 and 2018, the Company recorded compensation expense related to this plan of approximately $164,000and $100,000, respectively.  As of September 30, 2019 and 2018, the Company had a liability of approximately $908,000 and $944,000, respectively, recorded within accrued expenses on the balance sheet. The incentive compensation expense is

recognized over three years from the date of the awards. The amounts to be recognized over future periods at September 30, 2020 and 2019 was $232,000 and $225,000, respectively.

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Members' Equity

12 Months Ended

Sep. 30, 2019

Stockholders' Equity Note [Abstract]

Members' Equity

Members’ Equity

At September 30, 2019 and 2018 outstanding member units were:

	September 30, 2019	September 30, 2018
A Units	8,993	8,993
B Units	3,334	3,334
C Units	1,000	1,000
	13,327	13,327

The Series A, B and C unit holders all vote on certain matters with equal rights.  Prior to the repurchase of all of the Series C Units, the Series C unit holders as a group elected one Board member,.  The Series B unit holders as a group have the right to elect the number of Board members which bears the same proportion to the total number of Directors in relation to Series B outstanding units to total outstanding units. Based on this calculation, the Series B unit holders have the right to elect two Board members.  Series A unit holders as a group have the right to elect the four remaining Directors not elected by the Series C and B unit holders.

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Summary Of Significant Accounting Policies (Policy)

12 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements

Leases

In February 2016, FASB issued ASU 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. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. We implemented ASU 2016-02 in October 2019, when Fiscal 2020 started. The Company will include a right to use assets for approximately $8.2 million and a corresponding liability at the start of the next fiscal year for the operating leases.

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

Basic earnings and diluted per unit data were computed as follows (in thousands except per unit data):

	Twelve Months Ended
	September 30, 2019			September 30, 2018
Numerator:
Net (loss) for basic earnings per unit	$	(8,497	)	$	(2,704	)
Change in fair value of put option liability	$	637		$	(300	)
Net (loss) for diluted earnings per unit	$	(7,860	)	$	(3,004	)
Denominator:
Weighted average units outstanding - basic	13,327			13,327
Weighted average units outstanding - diluted	13,327			13,327
(Loss) per unit - basic	$	(637.58	)	$	(202.90	)
(Loss) per unit - diluted	$	(637.58	)	$	(202.90	)

Use Of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from these estimates.

Cash & Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less when purchased to be cash equivalents.

Concentration Of Credit Risk

Concentration of Credit Risk

The Company’s cash balances are maintained in bank deposit accounts which at times may exceed federally-insured limits.  The Company has not experienced any losses in such accounts.

Accounting Changes and Error Corrections [Text Block]

Restatement

The Company has applied SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. SAB No. 108 states that registrants must quantify the impact of correcting all misstatements, including both the carryover (iron curtain method) and reversing (rollover method) effects of prior year misstatements on the current-year financial statements, and by evaluating the error measured under each method in light of quantitative and qualitative factors. Under SAB No. 108, prior year misstatements which, if corrected in the current year would be material to the current year, must be corrected by adjusting prior year financial statements.

In applying the requirements of SAB No. 108, the Company adjusted its repairs and maintenance accruals, which were understated, with respect to the tank cars and hopper cars the Company was leasing. The Company should have been booking a provision for repairs necessary to return the cars to the lessor in "normal" status. Since the lease was initiated in March of 2009, with a lease end date of March of 2019, adjustments to previous periods were required. Although the charges in any one quarter were not significant, the historical financial statements were restated with all appropriate entries being retrospectively reflected in the financial statements.

The Audit Committee of the Board of Directors of the Company concluded the interim unaudited condensed financial statements for the quarters ending in Fiscal 2018 and Fiscal 2019, as well as the audited annual financial statement for Fiscal 2018 needed to be restated. In Fiscal 2019, the repair and maintenance charges were identified and the original estimate was included in the Second Quarter ending March 31, 2019 for the quarter and year-to-date, as well as comparative quarterly Fiscal 2018 financial information. In the Fourth Quarter ending September 30, 2019, the Company discovered that the original estimated accrual per railcar was in error, and flowed through an additional amount per quarter starting in 2009 forward. The error corrections for the financial statements are included in the charts below. The quarterly information for each three month period in Fiscal 2018 need to be restated, as well as the annual total. In Fiscal 2019, the first quarter needed to be restated, while the second and third quarter were amended to correct the original estimate. The year end statement had not been filed, so the values presented for September 30, 2019, are the final, adjusted numbers. As of September 30, 2018, the impact of the restatement on the balance sheet to the audited financial statements was $5.4 million.

Fiscal 2018 - Annual	Original			Restated			Increase
Amounts in 000's	September 30, 2018			September 30, 2018			(Decrease)
Revenues	214,990			214,990			—
Cost of Goods Sold	210,783			211,350			567
Gross Margin	4,207			3,640			(567		)
General and administrative expenses	4,972			4,972			—
Interest expense and other income, net	1,372			1,372			—
Net (Loss)	(2,137		)	(2,704		)	(567		)
Net (Loss) per unit basic	$	(160.35	)	$	(202.9	)	$	(42.55	)
Net (Loss) per unit diluted	$	(160.35	)	$	(202.9	)	$	(42.55	)
ASSETS
Current Assets
Cash & cash equivalents	1,440			1,440			—
Accounts receivable	12,672			12,672			—
Inventory	13,526			13,526			—
Other current assets	1,387			1,387			—
Total Current Assets	29,025			29,025			—
Net property, plant and equipment	111,868			111,868			—
Other assets	1,738			1,738			—
Total Assets	142,631			142,631			—
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	12,147			12,147			—
Current maturities of notes payable	6,560			6,560			—
Total Current Liabilities	18,707			18,707			—
Total Long Term Liabilities	20,733			26,122			5,389
Members' Capital	87,165			87,165			—
Accumulated Earnings	16,026			10,637			(5,389		)
Total Liabilities and Members' Equity	142,631			142,631			—
Fiscal 2018 - Quarterly	Original			Restated			Original			Restated
Amounts in 000's	December 31, 2017			December 31, 2017			March 31, 2018			March 31, 2018
Revenues	50,546			50,546			53,551			53,551

Cost of Goods Sold	47,838			47,980			53,195			53,337
Gross Margin	2,708			2,566			356			214
General and administrative expenses	1,378			1,378			1,056			1,056
Interest expense and other income, net	149			149			135			135
Net Income (Loss)	1,181			1,039			(835		)	(977		)
Net Income (Loss) per unit basic	$	88.62		$	77.96		$	(62.65	)	$	(73.31	)
Net Income (Loss) per unit diluted	$	82.09		$	72.22		$	(62.65	)	$	(73.31	)
	Original			Restated			Original			Restated
	December 31, 2017			December 31, 2017			March 31, 2018			March 31, 2018
ASSETS
Current Assets
Cash & cash equivalents	2,489			2,489			1,275			1,275
Accounts receivable	11,601			11,601			12,945			12,945
Inventory	13,176			13,176			13,176			13,176
Other current assets	1,204			1,204			1,531			1,531
Total Current Assets	28,470			28,470			28,927			28,927
Net property, plant and equipment	115,237			115,237			114,655			114,655
Other assets	2,101			2,101			2,107			2,107
Total Assets	145,808			145,808			145,689			145,689
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	21,250			21,250			7,108			7,108
Current maturities of notes payable	5,043			5,043			6,549			6,549
Total Current Liabilities	26,293			26,293			13,657			13,657
Total Long Term Liabilities	13,007			17,971			26,358			31,464
Members' Capital	87,165			87,165			87,165			87,165
Accumulated Earnings	19,343			14,379			18,509			13,403
Total Liabilities and Members' Equity	145,808			145,808			145,689			145,689
Fiscal 2018 - Quarterly	Original			Restated
Amounts in 000's	June 30, 2018			June 30, 2018
Revenues	53,611			53,611
Cost of Goods Sold	54,782			54,924
Gross Margin (Loss)	(1,171		)	(1,313		)
General and administrative expenses	1,809			1,809
Interest expense and other income, net	265			265
Net (Loss)	(3,245		)	(3,387		)
Net (Loss) per unit basic	$	(243.49	)	$	(254.15	)
Net (Loss) per unit diluted	$	(243.49	)	$	(254.15	)

	Original	Restated
	June 30, 2018	June 30, 2018
ASSETS
Current Assets
Cash & cash equivalents	1,207	1,207
Accounts receivable	14,584	14,584
Inventory	13,547	13,547
Other current assets	902	902
Total Current Assets	30,240	30,240
Net property, plant and equipment	113,729	113,729
Other assets	2,102	2,102
Total Assets	146,071	146,071
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	11,569	11,569
Current maturities of notes payable	6,554	6,554
Total Current Liabilities	18,123	18,123
Total Long Term Liabilities	25,519	30,767
Members' Capital	87,165	87,165
Accumulated Earnings	15,264	10,016
Total Liabilities and Members' Equity	146,071	146,071

Fiscal 2019 - Quarterly	Original			Restated			Original			Restated
Amounts in 000's	December 31, 2018			December 31, 2018			March 31, 2019			March 31, 2019
Revenues	53,382			53,382			53,190			53,190
Cost of Goods Sold	52,878			53,020			53,568			53,617
Gross Margin (Loss)	504			362			(378		)	(427		)
General and administrative expenses	1,502			1,502			1,174			1,174
Interest expense and other income, net	169			169			215			215
Net (Loss)	(1,167		)	(1,309		)	(1,767		)	(1,816		)
Net (Loss) per unit basic	$	(87.57	)	$	(98.22	)	$	(132.59	)	$	(136.26	)
Net (Loss) per unit diluted	$	(87.57	)	$	(98.22	)	$	(132.59	)	$	(136.26	)
	Original			Restated			Original			Restated
	December 31, 2018			December 31, 2018			March 31, 2019			March 31, 2019
ASSETS
Current Assets
Cash & cash equivalents	1,042			1,042			1,101			1,101
Accounts receivable	9,909			9,909			9,776			9,776
Inventory	13,650			13,650			17,278			17,278

Other current assets	1,164			1,164			1,533	1,533
Total Current Assets	25,765			25,765			29,688	29,688
Net property, plant and equipment	109,714			109,714			107,697	107,697
Other assets	1,738			1,738			1,447	1,447
Total Assets	137,217			137,217			138,832	138,832
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	17,110			17,964			9,850	11,650
Current maturities of notes payable	5,065			5,065			3,571	3,571
Total Current Liabilities	22,175			23,029			13,421	15,221
Total Long Term Liabilities	13,018			17,695			28,803	32,583
Members' Capital	87,165			87,165			87,165	87,165
Accumulated Earnings	14,859			9,328			9,443	3,863
Total Liabilities and Members' Equity	137,217			137,217			138,832	138,832
Fiscal 2019 - Quarterly	Original			Restated
Amounts in 000's	June 30, 2019			June 30, 2019
Revenues	53,505			53,505
Cost of Goods Sold	52,903			52,903
Gross Margin	602			602
General and administrative expenses	1,061			1,061
Interest expense and other income, net	292			292
Net (Loss)	(751		)	(751		)
Net (Loss) per unit basic	$	(56.35	)	$	(56.35	)
Net (Loss) per unit diluted	$	(56.35	)	$	(56.35	)
	Original			Restated
	June 30, 2019			June 30, 2019
ASSETS
Current Assets
Cash & cash equivalents	1,076			1,076
Accounts receivable	7,636			7,636
Inventory	19,848			19,848
Other current assets	3,996			3,996
Total Current Assets	32,556			32,556
Net property, plant and equipment	109,957			109,957
Other assets	1,447			1,447
Total Assets	143,960			143,960
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities

Accounts payable, derivative financial instruments and accrued expenses	15,887	17,687
Current maturities of notes payable	2,077	2,077
Total Current Liabilities	17,964	19,764
Total Long Term Liabilities	30,139	33,919
Members' Capital	87,165	87,165
Accumulated Earnings	8,692	3,112
Total Liabilities and Members' Equity	143,960	143,960

Revenue Recognition

Revenue Recognition

The Company adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606) on October 1, 2018. Under the ASU, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the considerations 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 the contracts with customers. The Company applied the five-step method outlined in the ASU to all contracts with customers, and elected the modified retrospective implementation method. The new revenue standard did not have an impact on the Company's financial statements.

The Company sells ethanol and related products pursuant to marketing agreements.  Revenues are recognized when the risk of loss has been transferred to the marketing company and the marketing company has taken title to the product, prices are fixed or determinable and collectability is reasonably assured.  

The Company’s products are generally shipped FOB loading point, and recorded as a sale upon delivery of the applicable bill of lading and transfer of risk of loss.  The Company’s ethanol sales are handled through an ethanol purchase agreement (the “Ethanol Agreement”) with Bunge North America, Inc. (“Bunge”).  Syrup and distillers grains (co-products) are sold through a distillers grains agreement (the “DG Agreement”) with Bunge, based on market prices. The Company markets and distributes all of the corn oil it produces directly to end users at market prices.   Carbon dioxide is sold through a Carbon Dioxide Purchase and Sale Agreement (the “CO2 Agreement”) with Air Products and Chemicals, Inc., formerly known as EPCO Carbon Dioxide Products, Inc. ("Air Products”). Marketing fees, agency fees, and commissions due to the marketer are calculated separately from the settlement for the sale of the ethanol products and co-products and are included as a component of cost of goods sold.  Shipping and handling costs incurred by the Company for the sale of ethanol and co-products are included in cost of goods sold.

Accounts Receivable

Accounts Receivable

Accounts receivable are recorded at original invoice amounts less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis.  Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering customers’ financial condition, credit history and current economic conditions.  As of September 30, 2019 and 2018, management had determined no allowance is necessary.  Receivables are written off when deemed uncollectable and recoveries of receivables written off are recorded when received.

Concentration Risk Disclosure [Text Block]

Risks and Uncertainties

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

Investment In Commodities Contracts, Derivative Instruments And Hedging Activities

Investment in Commodities Contracts, Derivative Instruments and Hedging Activities

The Company’s operations and cash flows are subject to fluctuations due to changes in commodity prices.  The Company is subject to market risk with respect to the price and availability of corn, the principal raw material used to produce ethanol and

ethanol by-products.  Exposure to commodity price risk results from its dependence on corn in the ethanol production process.  In general, rising corn prices result in lower profit margins and, therefore, represent unfavorable market conditions.  This is especially true when market conditions do not allow the Company to pass along increased corn costs to customers.  The availability and price of corn is subject to wide fluctuations due to unpredictable factors such as weather conditions, farmer planting decisions, governmental policies with respect to agriculture and international trade and global demand and supply.

To minimize the risk and the volatility of commodity prices, primarily related to corn and ethanol, the Company uses various derivative instruments, including forward corn, ethanol and distillers grains purchase and sales contracts, over-the-counter and exchange-trade futures and option contracts.  When the Company has sufficient working capital available, it enters into derivative contracts to hedge its exposure to price risk related to forecasted corn needs and forward corn purchase contracts.  

Management has evaluated the Company’s contracts to determine whether the contracts are derivative instruments. Certain contracts that literally meet the definition of a derivative may be exempted from derivative accounting as normal purchases or normal sales.  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.   Gains and losses on contracts that are designated as normal purchases or normal sales contracts are not recognized until quantities are delivered or utilized in production.

The Company applies the normal sale exemption to forward contracts relating to ethanol, distillers grains, and corn oil and therefore these forward contracts are not marked to market. As of September 30, 2019, the Company had commitments to sell 3.0 million gallons of ethanol , 89 thousand tons of dried distillers grains, 72 thousand tons of wet distillers grains and 4.3 million pounds of corn oil.

Corn purchase contracts are treated as derivative financial instruments.  Changes in fair value of forward corn contracts, which are marked to market each period, are included in costs of goods sold.  As of September 30, 2019, the Company was committed to purchasing 3.6 million bushels of corn on a forward contract basis resulting in a total commitment of $14.6 million.  In addition the Company was committed to purchasing 311 thousand bushels of corn using basis contracts.

In addition, the Company enters into short-term cash, options and futures contracts as a means of managing exposure to changes in commodity prices.  The Company enters into derivative contracts to hedge the exposure to volatile commodity price fluctuations.  The Company maintains a risk management strategy that uses derivative instruments to minimize significant, unanticipated earnings fluctuations caused by market volatility.  The Company’s specific goal is to protect itself from large moves in commodity costs.  All derivatives are designated as non-hedge derivatives and the contracts will be accounted for at fair value.  Although the contracts are considered effective economic hedges of specified risks, they are not designated as or accounted for as hedging instruments.

Derivatives not designated as hedging instruments along with cash due to brokers at September 30, 2019 and 2018 are as follows:

	Balance Sheet Classification	September 30, 2019			September 30, 2018
		in 000's			in 000's
Futures and option contracts
In gain position		$	368		$	583
In loss position		(364		)	(82		)
Cash held by broker		74			545
	Current asset	78			1,046
Forward contracts, corn	Current liability	597			1,567
Net futures, options, and forward contracts		$	(519	)	$	(521	)

The net realized and unrealized gains and losses on the Company’s derivative contracts for the years ended September 30, 2019 and 2018 consist of the following:

	Statement of Operations Classification	September 30, 2019			September 30, 2018
Net realized and unrealized (gains) losses related to:		(in 000's)			(in 000's)
Forward purchase contracts (corn)	Cost of Goods Sold	$	(1,530	)	$	1,894
Futures and option contracts (corn)	Cost of Goods Sold	(1,295		)	(3,568		)

Inventory

Inventory

Inventory is stated at the lower of 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 and Equipment

Property and equipment are stated at cost.  Depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings	40 Years
Process Equipment	10 - 20 Years
Office Equipment	3-7 Years

Maintenance and repairs are charged to expense as incurred; major improvements are capitalized.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable.   An impairment loss would be recognized when estimated undiscounted future cash flows from operations are less than the carrying value of the asset group.  An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset. Management has determined there were no events or changes in circumstances that required an impairment evaluation during Fiscal 2019 or Fiscal 2018.

Income Taxes

Income Taxes

The Company has elected to be treated as a partnership for federal and state income tax purposes and generally does not incur income taxes.  Instead, the Company’s earnings and losses are included in the income tax returns of the members.  Therefore, no provision or liability for federal or state income taxes has been included in these financial statements.

Management has evaluated the Company’s tax positions under the Financial Accounting Standards Board issued guidance on accounting for uncertainty in income taxes and concluded that the Company has taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of this guidance. 

Net (Loss) Per Unit

Income Per Unit

Basic income per unit is calculated by dividing net income by the weighted average units outstanding for each period. Diluted income per unit is adjusted for convertible debt, using the treasury stock method and the put option using the reverse treasury stock method. In Fiscal 2019, the put option did not impact diluted income per unit as it was anti-dilutive. Basic earnings and diluted per unit data were computed as follows (in thousands except per unit data):

	Twelve Months Ended
	September 30, 2019			September 30, 2018
Numerator:
Net (loss) for basic earnings per unit	$	(8,497	)	$	(2,704	)
Change in fair value of put option liability	$	637		$	(300	)
Net (loss) for diluted earnings per unit	$	(7,860	)	$	(3,004	)
Denominator:
Weighted average units outstanding - basic	13,327			13,327
Weighted average units outstanding - diluted	13,327			13,327
(Loss) per unit - basic	$	(637.58	)	$	(202.90	)
(Loss) per unit - diluted	$	(637.58	)	$	(202.90	)

Fair Value Of Financial Instruments

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, derivative financial instruments, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short term nature of these instruments.

The put option liability consists of an agreement between the Company and ICM that contains a conditional obligation to repurchase feature. On August 16, 2019, ICM notified SIRE of their intent to exercise the put option on their 1,018 units, but waived their right to determine the fair market value for their units. SIRE calculated the liability by utilizing the weighted average purchase prices for Fiscal 2019 transactions. In past years, the Company calculated the fair value of the put option under Level 3, using a valuation model called the Monte Carlo Simulation. The change to the valuation methodology was made because the parameters of risk free interest rate, expected volatility, expected life and estimated exercise price no longer were applicable. Using weighted average sale prices for Fiscal 2019, the estimated value at September 30, 2019 was $6.0 million, while the Monte Carlo method calculated $5.4 million at September 30, 2018. The Company bought the Series A and Series C Units held by ICM back for a total price of $11.1 million based on the exercise price outlined in the agreement. Equity was reduced by $5.1 million, and the accrued put option liability of $6.0 million was satisfied. (see Note 11) The carrying amount of the notes payable approximates fair value, as the interest rate is a floating rate. The terms are consistent with those available in the market as of September 30, 2019 and 2018, using level 3 inputs.

Schedule of Quantifying Prior Year Misstatements Corrected in Current Year Financial Statements [Table Text Block]

Fiscal 2018 - Annual	Original			Restated			Increase
Amounts in 000's	September 30, 2018			September 30, 2018			(Decrease)
Revenues	214,990			214,990			—
Cost of Goods Sold	210,783			211,350			567
Gross Margin	4,207			3,640			(567		)
General and administrative expenses	4,972			4,972			—
Interest expense and other income, net	1,372			1,372			—
Net (Loss)	(2,137		)	(2,704		)	(567		)
Net (Loss) per unit basic	$	(160.35	)	$	(202.9	)	$	(42.55	)
Net (Loss) per unit diluted	$	(160.35	)	$	(202.9	)	$	(42.55	)
ASSETS
Current Assets
Cash & cash equivalents	1,440			1,440			—
Accounts receivable	12,672			12,672			—
Inventory	13,526			13,526			—
Other current assets	1,387			1,387			—
Total Current Assets	29,025			29,025			—
Net property, plant and equipment	111,868			111,868			—
Other assets	1,738			1,738			—
Total Assets	142,631			142,631			—
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	12,147			12,147			—
Current maturities of notes payable	6,560			6,560			—
Total Current Liabilities	18,707			18,707			—
Total Long Term Liabilities	20,733			26,122			5,389
Members' Capital	87,165			87,165			—
Accumulated Earnings	16,026			10,637			(5,389		)
Total Liabilities and Members' Equity	142,631			142,631			—
Fiscal 2018 - Quarterly	Original			Restated			Original			Restated
Amounts in 000's	December 31, 2017			December 31, 2017			March 31, 2018			March 31, 2018
Revenues	50,546			50,546			53,551			53,551

Cost of Goods Sold	47,838			47,980			53,195			53,337
Gross Margin	2,708			2,566			356			214
General and administrative expenses	1,378			1,378			1,056			1,056
Interest expense and other income, net	149			149			135			135
Net Income (Loss)	1,181			1,039			(835		)	(977		)
Net Income (Loss) per unit basic	$	88.62		$	77.96		$	(62.65	)	$	(73.31	)
Net Income (Loss) per unit diluted	$	82.09		$	72.22		$	(62.65	)	$	(73.31	)
	Original			Restated			Original			Restated
	December 31, 2017			December 31, 2017			March 31, 2018			March 31, 2018
ASSETS
Current Assets
Cash & cash equivalents	2,489			2,489			1,275			1,275
Accounts receivable	11,601			11,601			12,945			12,945
Inventory	13,176			13,176			13,176			13,176
Other current assets	1,204			1,204			1,531			1,531
Total Current Assets	28,470			28,470			28,927			28,927
Net property, plant and equipment	115,237			115,237			114,655			114,655
Other assets	2,101			2,101			2,107			2,107
Total Assets	145,808			145,808			145,689			145,689
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	21,250			21,250			7,108			7,108
Current maturities of notes payable	5,043			5,043			6,549			6,549
Total Current Liabilities	26,293			26,293			13,657			13,657
Total Long Term Liabilities	13,007			17,971			26,358			31,464
Members' Capital	87,165			87,165			87,165			87,165
Accumulated Earnings	19,343			14,379			18,509			13,403
Total Liabilities and Members' Equity	145,808			145,808			145,689			145,689
Fiscal 2018 - Quarterly	Original			Restated
Amounts in 000's	June 30, 2018			June 30, 2018
Revenues	53,611			53,611
Cost of Goods Sold	54,782			54,924
Gross Margin (Loss)	(1,171		)	(1,313		)
General and administrative expenses	1,809			1,809
Interest expense and other income, net	265			265
Net (Loss)	(3,245		)	(3,387		)
Net (Loss) per unit basic	$	(243.49	)	$	(254.15	)
Net (Loss) per unit diluted	$	(243.49	)	$	(254.15	)

	Original	Restated
	June 30, 2018	June 30, 2018
ASSETS
Current Assets
Cash & cash equivalents	1,207	1,207
Accounts receivable	14,584	14,584
Inventory	13,547	13,547
Other current assets	902	902
Total Current Assets	30,240	30,240
Net property, plant and equipment	113,729	113,729
Other assets	2,102	2,102
Total Assets	146,071	146,071
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable, derivative financial instruments and accrued expenses	11,569	11,569
Current maturities of notes payable	6,554	6,554
Total Current Liabilities	18,123	18,123
Total Long Term Liabilities	25,519	30,767
Members' Capital	87,165	87,165
Accumulated Earnings	15,264	10,016
Total Liabilities and Members' Equity	146,071	146,071

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Condensed Statements Of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Net Income (Loss) Available to Common Stockholders, Basic	$ (8,497)	$ (2,704)
Adjustments to reconcile net (loss) to net cash provided by operating activities:
Depreciation	10,230	11,372
Amortization	71	72
Gain (Loss) on Disposition of Property Plant Equipment	0	498
Other assets	291	405
Increase (Decrease) in Put Options	637	(300)
(Increase) decrease in current assets:
Accounts receivable	3,356	623
Inventories	(3,641)	(312)
Prepaid expenses and other	10	100
Increase (Decrease) in Derivative Assets	968	(1,023)
Increase (decrease) in current liabilities:
Decrease in other long-term liabilities	(1,517)	397
Accounts payable	952	(351)
Derivative financial instruments, related party	(970)	656
Accrued expenses	3,108	438
Net cash provided by operating activities	4,998	9,871
Cash Flows From Investing Activities
Purchase of property and equipment	(9,811)	(5,562)
Proceeds from Sale of Property, Plant, and Equipment	0	50
Net cash (used in) investing activities	(9,811)	(5,512)
Cash Flows From Financing Activities
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Paid	0	6,663
Proceeds from notes payable	193,041	153,386
Payments on borrowings	(188,593)	(151,129)
Net cash (used in) financing activities	4,448	(4,406)
Net increase (decrease) in cash and cash equivalents	(365)	(47)
Cash And Equivalents-Beginning	1,440	1,487
Cash And Equivalents-Ending	1,075	1,440
Supplemental Cash Flow Information [Abstract]
Interest Paid, Excluding Capitalized Interest, Operating Activities	$ 980	$ 952

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Balance Sheets - USD ($)	Sep. 30, 2019	Sep. 30, 2018
Current Assets
Cash and cash equivalents	$ 1,075,000	$ 1,440,000
Accounts receivable	1,431,000	1,135,000
Accounts receivable, related party	7,885,000	11,537,000
Derivative financial instruments	78,000	1,046,000
Inventory	17,167,000	13,526,000
Prepaid expenses and other	331,000	341,000
Total current assets	27,967,000	29,025,000
Property, Plant, and Equipment
Land	2,064,000	2,064,000
Plant, building and equipment	239,446,000	229,813,000
Office and other equipment	1,803,000	1,625,000
Total Cost	243,313,000	233,502,000
Accumulated depreciation	(131,864,000)	(121,634,000)
Net property and equipment	111,449,000	111,868,000
Other Assets
Other assets	1,447,000	1,738,000
Total Assets	140,863,000	142,631,000
Current Liabilities
Accounts payable	4,151,000	3,183,000
Accounts payable, related parties	2,000	18,000
Derivative Liability	597,000	1,567,000
Accrued expenses	9,906,000	6,778,000
Accrued expenses, related parties	581,000	601,000
Accrued Put Option Liability, Related Party	6,037,000	0
Long-term Debt, Current Maturities	580,000	6,560,000
Total current liabilities	21,854,000	18,707,000
Long Term Liabilities
Long-term Debt, Excluding Current Maturities	25,832,000	15,333,000
Other long-term liabilities	3,872,000	5,389,000
Fair Value, Put Option Liability	0	5,400,000
Total long term liabilities	29,704,000	26,122,000
Members' Equity
Members' capital, 13,139 Units issued and outstanding	87,165,000	87,165,000
Accumulated profit (deficit)	2,140,000	10,637,000
Total members' equity	89,305,000	97,802,000
Total Liabilities and Members' Equity	$ 140,863,000	$ 142,631,000

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Summary Of Significant Accounting Policies (Schedule Of Derivatives Not Designated As Hedging Instruments) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Summary Of Significant Accounting Policies [Line Items]
Gain (Loss) on Derivative Instruments Held for Trading Purposes, Net	$ 2,825	$ 1,674
Derivative Assets	78	1,046
Futures And Option Contracts In Gain Position [Member]
Summary Of Significant Accounting Policies [Line Items]
Derivative Assets	368	583
Futures And Option Contracts In Loss Position [Member]
Summary Of Significant Accounting Policies [Line Items]
Derivative Assets	(364)	(82)
Futures And Option Contracts Cash Held By Due To Broker [Member]
Summary Of Significant Accounting Policies [Line Items]
Derivative Assets	74	545
Forward Contracts [Member]
Summary Of Significant Accounting Policies [Line Items]
Gain (Loss) on Derivative Instruments Held for Trading Purposes, Net	(1,530)	1,894
corn [Member] | Future And Option Contracts [Member]
Summary Of Significant Accounting Policies [Line Items]
Gain (Loss) on Derivative Instruments Held for Trading Purposes, Net	(1,295)	(3,568)
Fair Value, Inputs, Level 2 [Member]
Summary Of Significant Accounting Policies [Line Items]
Derivative Assets	$ 0	$ 0

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Notes Payable (Tables)

12 Months Ended

Sep. 30, 2019

Notes Payable [Abstract]

Components Of Notes Payable

Notes payable consists of the following (in 000's):
	September 30, 2019		September 30, 2018
Term Revolver matured September 20, 2019	$	—	$	6,000
Revolving term loan bearing interest at LIBOR plus 3.35% (5.37% at September 30, 2019)	23,902		12,894
Other with interest rates from 3.50% to 4.15% and maturities through 2022	2,569		3,129
	26,471		22,023
Less Current Maturities	580		6,560
Less Financing Costs, net of amortization	59		130
Total Long Term Debt	25,832		15,333

Aggregate Maturities Of Notes Payable

Approximate aggregate maturities of notes payable as of September 30, 2019 are as follows (in 000's):

2020	$	580
2021	589
2022	7,302
2023	18,000
Total	$	26,471