10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2020

Commission file number:  000-53957

Golden Growers Cooperative

(Exact name of registrant as specified in its charter)

Minnesota	27-1312571
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1002 Main Avenue West, Suite 5

West Fargo, ND 58078

(Address of principal executive offices)

Telephone Number 701-281-0468

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Membership Units	GGROU	None

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

Yes  ☒ No  ☐

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

Yes  ☒ No  ☐

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

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

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. ☐

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

YES  ☐ NO  ☒

As of  May 11, 2020 the Cooperative had 15,490,480 Units issued and outstanding.

GOLDEN GROWERS COOPERATIVE

FORM 10-Q

INDEX

PART I. FINANCIAL INFORMATION	1
Item 1. Financial Statements	1
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
Item 3. Quantitative and Qualitative Disclosures About Market Risk	11
Item 4. Controls and Procedures	11
PART II. OTHER INFORMATION	11
Item 1. Legal Proceedings	11
Item 1A. Risk Factors	11
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	11
Item 3. Defaults Upon Senior Securities	11
Item 4. Mine Safety Disclosures	11
Item 5. Other Information	11
Item 6. Exhibits	12
SIGNATURES	13

                  PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

GOLDEN GROWERS COOPERATIVE

CONDENSED BALANCE SHEETS

(In Thousands)

	March 31, 2020		December 31, 2019
	(Unaudited)		(Audited)
ASSETS
Current Assets:
Cash and Cash Equivalents	$	2,925	$	3,228
Short-Term Investments		2,382		1,807
Other Current Assets		44		275
Total Current Assets		5,351		5,310
Long-Term Investments		2,684		3,220
Investment in ProGold Limited Liability Company		18,103		18,059
Total Assets	$	26,138	$	26,589
LIABILITIES AND MEMBERS’ EQUITY
Current Liabilities
Accounts Payable	$	—	$	2
Accrued Liabilities		119		208
Total Current Liabilities		119		210
Non-Current Liabilites		7		—
Members' Equity:
Members’ Equity		26,019		26,379
Membership Units, Authorized 60,000,000 Units, Issued and Outstanding 15,490,480 as of March 31, 2020 and December 31, 2019
Accumulated Other Comprehensive Income (Loss)		(7)		—
Total Members’ Equity		26,012		26,379
Total Liabilities and Members’ Equity	$	26,138	$	26,589

See Notes to Condensed Financial Statements

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GOLDEN GROWERS COOPERATIVE

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In Thousands, Other Than Share and Per-Share Data)

(Unaudited)

	Three Months Ended
	March 31, 2020		March 31, 2019
OPERATIONS
Corn Revenue	$	14,743	$	15,388
Corn Expense		(14,757)		(15,402)
Net Income from ProGold Limited Liability Company		1,943		1,955
General & Administrative Expenses		(171)		(168)
Net Income from Operations		1,758		1,773
Other Income		50		50
Net Income Before Income Tax	$	1,808	$	1,823
Net Income	$	1,808	$	1,823
Weighted Average Shares/Units Outstanding		15,490,480		15,490,480
Earnings per Share/Membership Unit
Primary and Fully Diluted	$	0.12	$	0.12

	Three Months Ended
	March 31, 2020		March 31, 2019
COMPREHENSIVE INCOME
Net Income	$	1,808	$	1,823
Other Comprehensive Income (Loss), Net		(7)		—
Comprehensive Income	$	1,801	$	1,823

GOLDEN GROWERS COOPERATIVE

STATEMENTS OF CHANGES IN MEMBERS’ EQUITY

(In Thousands)

(Unaudited)

	Three Months Ended
	March 31, 2020		March 31, 2019
Changes in Members' Equity
Balance, Beginning of the Period	$	26,379	$	25,836
Net Income		1,808		1,823
Pension Liability Adjustment		(7)		—
Distributions to Members		(2,168)		(2,355)
Balance, End of the Period	$	26,012	$	25,304

See Notes to Condensed Financial Statements

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GOLDEN GROWERS COOPERATIVE

CONDENSED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

	Three Months Ended
	March 31, 2020		March 31, 2019
Cash Flows from Operating Activities
Net Income	$	1,808	$	1,823
Net (Income) from ProGold Limited Liability Company		(1,943)		(1,955)
Changes in assets and liabilities
Other Current Assets		231		200
Accrued liabilities and payables		(91)		(212)
Net Cash Provided (Used) in Operating Activities		5		(144)
Cash Flows from Investing Activities
(Purchase) Sale of investments		(39)		(14)
Distribution received from ProGold LLC		1,899		2,111
Net Cash Provided in Investing Activities		1,860		2,097
Cash Flows from Financing Activities
Member distributions paid		(2,168)		(2,355)
Net Cash Used by Financing Activities		(2,168)		(2,355)
Increase (Decrease) in Cash and Cash Equivalents		(303)		(402)
Cash and Cash Equivalents, Beginning of Year		3,228		2,403
Cash and Cash Equivalents, End of Year	$	2,925	$	2,001

See Notes to Condensed Financial Statements

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GOLDEN GROWERS COOPERATIVE

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019

NOTE 1 – BASIS OF PRESENTATION

The condensed financial statements of Golden Growers Cooperative (the “Cooperative”) for the three-month period ended March 31, 2020 and 2019 are unaudited and reflect all adjustments consisting of normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period. The condensed financial statements should be read in conjunction with the financial statements and notes thereto, contained in the Cooperative’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. The results of operations for the three-month period ended March 31, 2020 are not necessarily indicative of the results for the entire fiscal year ending December 31, 2020.

NOTE 2 – EXPENSES

The Cooperative contracts with Cargill, Incorporated (“Cargill”) in connection with the procurement of corn and other agency services for an annual fee of $60,000, which is paid by the Cooperative to Cargill in quarterly installments.  The agreements between Cargill and the Cooperative terminate concurrently with Cargill’s Second Amended and Restated Facility Lease with ProGold Limited Liability Company (“ProGold LLC”), which terminates on December 31, 2022, but may be extended through 2023 under certain conditions.

NOTE 3 – PROGOLD LIMITED LIABILITY COMPANY

The Cooperative has a 49% ownership interest in ProGold LLC.  Following is summary financial information for ProGold LLC, which was derived from the monthly unaudited financial statements of ProGold LLC:

	March 31,				December 31,
(In Thousands)	2020		2019		2019
Current Assets	$	211	$	220	$	230
Long-Term Assets		39,113		38,645		38,962
Total Assets	$	39,324	$	38,865	$	39,192
Current Liabilities	$	88	$	7	$	5
Long-Term Liabilities		2,292		1,458		2,333
Total Liabilities		2,380		1,465		2,338
Members’ Equity		36,944		37,400		36,854
Total Liabilities and Members’ Equity	$	39,324	$	38,865	$	39,192
Rent Revenue on Operating Lease	$	4,833	$	4,679	$	19,085
Expenses		867		689		3,455
Net Income	$	3,966	$	3,990	$	15,630

NOTE 4 – INVESTMENTS

The Cooperative has determined fair value of its investments held to maturity based on Level 2 inputs. 

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March 31, 2020:	Level 1		Level 2		Level 3		Total
Corporate Bonds	$	—	$	4,616	$	—	$	4,616
US Treasury Bill				100				100
Money Market & CD’s		—		378		—		378
	$	—	$	5,094	$	—	$	5,094
December 31, 2019:
Corporate Bonds	$	—	$	4,772	$	—	$	4,772
Money Market & CD’s		—		336		—		336
	$	—	$	5,108	$	—	$	5,108

		Net Carrying	Fair
	Amount		Value
Due in 1 year or less	$	1,904	$	1,885
Due in 2 to 5 years		2,478		2,531
Greater than 5 years		206		200
	$	4,588	$	4,616

The Coopertive’s investments held to maturity are as follows as of March 31, 2020 and December 31, 2019:

	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
March 31, 2020:
Corporate Bonds	$	4,588	$	72	$	(44)	$	4,616
US Treasury Bill		100						100
Money Market & CD’s		378		—		—		378
	$	5,066	$	72	$	(44)	$	5,094
December 31, 2019:
Corporate Bonds	$	4,691	$	81	$	—	$	4,772
Money Market & CD’s		336		—		—		336
	$	5,027	$	81	$	—	$	5,108

Maturities are as follows as of March 31, 2020:

	Less than 1 year		1 to 5 Years		Greater than 5 years		Total
Corporate Bonds	$	1,904	$	2,478	$	206	$	4,588
	$	1,904	$	2,478	$	206	$	4,588

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NOTE 5 – EMPLOYEE BENEFIT PLANS

Pension Plan –In December 2012, the Cooperative approved a change to freeze the Cooperative’s defined benefit plan. As a result, no additional benefits will accrue to participants in the plan and no new employees are eligible for the plan.

The following schedules provide the components of Net Periodic Benefit Cost for the three months ended March 31, 2020 and March 31, 2019 (in thousands):  

	March 31,		March 31,
	2020		2019
Interest Cost	$	7	$	8
Expected Return on Plan Assets		(11)		(14)
Amortization of Net (Gain) Loss		—		—
Net Periodic Pension Cost	$	(4)	$	(6)

Through the three months ended March 31, 2020, the Cooperative has made $0 in contributions as compared to $0 through the three months ended March 31, 2019.  The Cooperative does not anticipate making a contribution in 2020. Contributions in 2019 totaled $0.

NOTE 6 – RECENTLY ADOPTED ACCOUNTING STANDARDS

Leases - In February 2016, the Financial Accounting Standards Board (“FASB”) issued a standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use assets and lease liabilities on the balance sheet. The standard was effective for the Cooperative beginning January 1, 2019. The standard did not have a significant impact on the Cooperative’s financial statements.

Revenue Recognition - On January 1, 2018, the Cooperative adopted ASU 2014-09, Revenues from Contracts with Customers. The core principle of the revenue guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Cooperative determined that the timing, pattern and amount of revenue recognized under the new standard is substantially the same as previously recognized by the Cooperative.

Annually, the Cooperative is required to deliver approximately 15,490,480 bushels of corn to Cargill for processing at the ProGold LLC wet-milling facility. To fulfill that requirement, the Cooperative’s members are contractually obligated to annually deliver corn to the Cooperative by either Method A or Method B or a combination of both. Under Method A, a member is required to physically deliver corn to the Cooperative and under Method B a member appoints the Cooperative as its agent to arrange for the acquisition and delivery of corn on the member’s behalf. The Cooperative contractually appoints Cargill as its agent to arrange for the delivery of the corn by its members who elect to deliver corn using Method A and to acquire corn on its behalf for its members who elect to deliver corn using Method B. In exchange for these services, the Cooperative pays an annual fee of $60,000, paid in quarterly installments.

Members who deliver corn under Method A are paid the market price or contracted price for their corn at the time of delivery, as well as an incentive payment of $.05 per bushel. Cargill pays the aggregate purchase price for corn purchased from the Cooperative’s members to the Cooperative and then, on the Cooperative’s behalf, makes individual payments for corn and incentive payments directly to the Cooperative’s members. In the event a member who has elected to deliver corn by Method A delivers to Cargill less than its committed amount of corn, the quantity of the shortfall is then purchased and delivered by Cargill on the Cooperative’s behalf.  The purchase price is equal to the average price reported for Method A corn for the final month of the year.  In addition, the Method A member with a shortfall will be charged a purchased corn fee and agency fee determined by the Cooperative’s Board of Directors.

Members who elect Method B to deliver corn pay the Cooperative a $.02 per bushel agency fee for the cost of having the Cooperative deliver corn on their behalf. The price per bushel paid to such member is equal to the price per bushel paid by Cargill to acquire the corn as the Cooperative’s agent. Method B revenue will be equal to the price paid. The Cooperative has determined Corn Expense for Method B deliveries will be the weighted average price for Method A corn during the quarter multiplied by the number of Method B bushels purchased during the quarter.

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The incentive payment and agency fee are also a component of Corn Expense. The Cooperative’s Board of Directors has the discretion to change the incentive payment and the agency fee based on the Cooperative’s corn delivery needs.

For the three month periods ended March 31, 2020 and 2019, the Cooperative recognized corn revenue of $14.7 million and $15.4 million, respectively. Disaggregated revenue for the three month periods ended March 31, 2020 and 2019 is as follows: revenue from Method A deliveries totaled $5.3 million and $5.9 million, respectively; and revenue from Method B deliveries totaled $9.4 million and $9.5 million, respectively.

Financial Instruments – Recognition, Measurement, Presentation, and Disclosure – On January 1, 2018, the Cooperative adopted ASU 2016-01 related to certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The adoption of the standard did not have a significant impact on the Cooperative’s financial statements.

NOTE 7 – DISTRIBUTIONS TO MEMBERS

On February 14, 2020, the Cooperative made distributions to its members totaling $2,168,667, or $0.14 per outstanding membership unit.  On February 28, 2019, the Cooperative made distributions to its members totaling $2,354,553 or $0.152 per outstanding membership unit.

NOTE 8 – LINE OF CREDIT

In 2018, the Cooperative established a $2,000,000 line of credit with a variable interest rate.  This line of credit has been extended to October 16, 2020.  The line of credit is secured by the investment management agency account for the Cooperative maintained by Bell Bank.  There is no outstanding balance as of March 31, 2020 or December 31, 2019.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

The Cooperative contracts with Cargill in connection with the procurement of corn and other agency services for an annual fee of $60,000, which is paid by the Cooperative to Cargill in quarterly installments. The agreements between Cargill and the Cooperative terminate concurrently with Cargill’s Second Amended and Restated Facility Lease with ProGold LLC, which terminates on December 31, 2022, but may be extended through 2023 under certain conditions.

NOTE 10 – SUBSEQUENT EVENTS

The Cooperative has evaluated events through the date the financial statements were issued for potential recognition or disclosure in the March 31, 2020 financial statements and concluded that no subsequent events have occurred that would require recognition in the March 31, 2020 financial statements.

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

The following discussion and analysis should be read in conjunction with the financial statements and notes thereto included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the audited consolidated financial statements and related notes thereto and Item 7, Management’s Discussion and Analysis of Financial Conditions and Results of Operations, included in the Cooperative’s Annual Report Form on 10-K for the fiscal year ended December 31, 2019.  This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties.  Such forward-looking statements include, among others, those statements including the words “expect”, “anticipate”, “believe”, “may” and similar expressions.  The Cooperative’s actual results could differ materially from those indicated in the forward-looking statements for many reasons, including events beyond the Cooperative’s control and assumptions that prove to be inaccurate or unfounded.  The Cooperative’s actual results or actions could and likely will differ materially from those anticipated in the forward-looking statements for many reasons, including but not limited to: (i) the impact of the Cooperative’s minority ownership interest in ProGold; (ii) fluctuations in the market price per bushel of corn; (iii) the unknown impact of the novel coronavirus (COVID-19); and (iv) other factors described from time to time in the Cooperative’s Securities and Exchange Commission filings. The Cooperative does not intend to update the forward-looking statements contained in this Quarterly Report on Form 10-Q other than as required by law and qualifies all of its forward-looking statements by these cautionary statements.

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Overview

Golden Growers Cooperative is a value-added agricultural cooperative association governed under Minnesota Statutes Chapter 308B owned by 1,528 members in the business of providing value to its members by facilitating their delivery of corn to the corn wet-milling facility owned by ProGold Limited Liability Company (“ProGold LLC”), a Minnesota limited liability company in which the Cooperative owns a 49% membership interest.  ProGold LLC leases its corn wet milling facility to Cargill Incorporated (“Cargill”), which uses the facility to process corn into high fructose corn syrup.  The Cooperative accomplishes its business on behalf of its members through its contractual relationships with all of the parties involved in the ownership and operation of the facility.  From an income production perspective, the Cooperative’s membership interest in ProGold LLC is its primary asset that, in addition to giving the Cooperative the right to receive distributions from ProGold LLC, also provides the Cooperative’s members with additional value for the delivery of their corn for processing.  Annually, the Cooperative is required to deliver approximately 15,490,480 bushels of corn to Cargill for processing at the ProGold LLC facility.

Any person residing in the United States can own membership units of the Cooperative (“Units”) as long as that person delivers or provides for the delivery of corn for processing at the ProGold LLC facility. Ownership of Units requires members to deliver corn to the Cooperative for processing in proportion to the number of Units each member holds. Currently, 15,490,480 Units are issued and outstanding.  The Cooperative’s income and losses are allocated to its members based on the volume of corn they deliver.  Subject to certain limitations, as long as a member patronizes the Cooperative by delivering corn equal to the number of Units held by the member, the member will be allocated a corresponding portion of the Cooperative’s income (or loss).  In this way, the Cooperative operates on a cooperative basis.

To hold Units, a member is required to execute a Uniform Member Agreement that obligates the member to deliver corn to the Cooperative and an Annual Delivery Agreement by which each member annually elects the member’s method to deliver corn - either Method A or Method B, or a combination of both.  Under Method A, a member is required to physically deliver the required bushels of corn to the Cooperative either at the facility or another location designated by the Cooperative.  Under Method B, a member appoints the Cooperative as its agent to arrange for the acquisition and delivery of the required bushels of corn on the member’s behalf.  The Cooperative appoints Cargill as its agent to arrange for the delivery of the corn by members who elect to deliver corn using Method A, and the Cooperative appoints Cargill as its agent to acquire corn on the Cooperative’s behalf for members who elect to deliver corn using Method B.  If a member elects to deliver corn using Method B, the price per bushel the Cooperative pays to the member is equal to the price per bushel paid by Cargill to acquire the corn as its agent.  Members who deliver corn under Method A are paid the market price or contracted price for their corn at the time of delivery.  Members who deliver corn under Method A receive from the Cooperative an incentive payment of $.05 per bushel on the corn that they deliver while members who elect Method B to deliver corn pay to the Cooperative a $.02 per bushel agency fee for the cost of having the Cooperative deliver corn on their behalf.  The incentive payment for Method A deliveries and the agency fee for Method B deliveries are subject to annual adjustment at the sole discretion of the Cooperative’s Board of Directors. While the Cooperative is financially responsible for the various payments to the members for corn, Cargill, serving as the Cooperative’s administrative agent, issues payments to members for corn on the Cooperative’s behalf.

Annually, the Cooperative notifies Cargill of the number of bushels of Method A corn to be delivered by each member who has elected to deliver corn by Method A.  Once the Cooperative provides notification to Cargill of the number of bushels of corn, Cargill then confirms the amount of corn with each member and notifies that member with respect to quality specifications, allowances, deductions and premiums to be applicable to that corn.  The member with a Method A corn commitment then directly contracts with Cargill for corn delivered by Method A.  At the end of each month, Cargill reports the number of Method A bushels delivered and the average daily price paid for corn that Cargill purchased from members on the Cooperative’s behalf. The product of the number of bushels delivered multiplied by the average monthly market price is reported as Method A corn expense.  In the event a member who has elected to deliver corn by Method A delivers to Cargill more than its delivery commitment, any corn delivered in excess of that commitment is handled as a direct sale of corn to Cargill. In the event a member who has elected to deliver corn by Method A delivers to Cargill less than its committed amount of corn, the quantity of the shortfall is then purchased and delivered by Cargill on our behalf.  The purchase price is equal to the average price reported for Method A corn for the final month of the year.  In addition, the Method A member with a shortfall will be charged a purchased corn fee and agency fee determined by the Cooperative’s Board of Directors.

Cargill then purchases the remainder of the corn to be delivered by the Cooperative on behalf of the Method B delivering members at such time and in such quantities as it deems appropriate and in the best interest of the Cooperative

8

and Cargill.  The Cooperative notifies Cargill of the number of Method B bushels to be purchased during the quarter.  Cargill will certify to the Cooperative that it has purchased the necessary Method B bushels.  The price paid will be the weighted average price for Method A corn during the quarter multiplied by the number of Method B bushels. Method B corn revenue will be equal to the price paid.

The Cooperative’s Second Amended and Restated Bylaws (“Bylaws”) establish a Method A delivery pool and a Method B delivery pool.  Generally, The Cooprative’s income and/or losses are allocated annually based on the percentage of bushels of corn the members elect to deliver using either Method A or Method B.  Regardless of the actual percentage allocation between the members who deliver bushels of corn using Method A or Method B, the Bylaws require the Cooperative to annually allocate at least 25% of its income and/or losses to the Method A pool.  The amount of our income and/or losses actually allocated to the Method A pool is a percentage equal to the greater of 25% or the actual percentage of bushels of corn delivered by members using Method A.

For fiscal year 2020, members elected to deliver 27% of their corn by Method A and members elected to deliver 73% of their corn by Method B.  This election will result in 27% of the Cooperative’s income and/or losses and 27% of any cash distributions being allocated to the Method A pool in fiscal year 2020, which reflects the actual percentage of corn members elected to deliver using Method A and does not result in reallocation to meet the 25% requirement set forth in the Cooperative’s Bylaws.

Impact of COVID-19

The Cooperative continues to monitor the global outbreak of the novel coronavirus (COVID-19) and its impact on the Cooperative’s results of operations and financial condition.  Demand for high fructose corn syrup in food service and entertainment sectors has declined. Corn millers have also idled ethanol plants in response to a depressed demand for ethanol. The ProGold plant currently continues to operate in the ordinary course and the Cooperative’s overall business has not been impacted; however, the Cooperative is unable to predict the duration of the outbreak and the resulting long-term impact of COVID-19 on its business or the impact on the future operations of the ProGold plant.   

Results of Operations

Revenues. The Cooperative derives revenue from two sources: operations related to the marketing of members’ corn and income derived from the Cooperative’s membership interest in ProGold LLC.  The corn marketing operations generate revenue for the Cooperative equal to the value of the corn that is delivered to Cargill. The Cooperative recognizes expense equal to this same amount, which results in the corn marketing operations being revenue neutral to the Cooperative, except for revenue from the Method B agency fee and expenses related to the Method A incentive payments and the service fee paid to Cargill.

For the three-month period ended March 31, 2020, the Cooperative sold approximately 4.4 million bushels of corn compared to approximately 4.6 million bushels of corn sold during the three-month period ended March 31, 2019. For the three-month period ended March 31, 2020, the members, on the Cooperative’s behalf, delivered to Cargill for processing at the facility approximately 1.6 million bushels of corn using Method A and 2.8 million bushels of corn using Method B. In the same respective periods in 2019, its members, on the Cooperative’s behalf, delivered to Cargill for processing at the facility 1.7 million bushels of corn using Method A and 2.8 million bushels of corn using Method B.

For the three-month period ended March 31, 2020, the Cooperative recognized corn revenue of $14,743,000 compared to $15,388,000 during the same period in 2019, a decrease of 4% for the first quarter due primarily to a decrease in the price per bushel of corn sold year to date in 2020 compared to 2019.

Expenses. The Cooperative recognized corn expense of $14,757,000 and $15,402,000 for the three-month period ended March 31, 2020 and 2019 respectively, a decrease of 4% for the first quarter due primarily to a decrease in the price per bushel of corn purchased in 2020 compared to 2019.  For the three-month period ended March 31, 2020 and 2019, the members, on the Cooperative’s behalf, delivered to Cargill for processing at the facility approximately 1,602,000 and 1,743,000 bushels of corn, respectively, using Method A and 2,827,000 and 2,827,000 bushels of corn, respectively, using Method B.

The Cooperative recognized expense of $15,000 for the three-month period ended March 31, 2020 and 2019 in connection with costs incurred to Cargill related to the Cooperative’s corn marketing operation.

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Income from ProGold LLC. The Cooperative derived income from ProGold LLC for the three-month period ended March 31, 2020 and 2019 of $1,943,000 and $1,955,000, respectively, a decrease of 1% for the first quarter due primarily to an increase in ProGold LLC’s operating expenses in 2020 compared to 2019.

General and Administrative Expenses. The Cooperative’s general and administrative expenses include salaries and benefits, professional fees and fees paid to its Board of Directors. The general and administrative expenses for the three-month period ended March 31, 2020 was $171,000, compared to $168,000 during the same respective period in 2019. The increase in administrative expenses is primarily due to the timing of expenses.

Other Income. Interest income for the three-month period ended March 31, 2020 was $50,000 compared to $50,000 during the same period in 2019.  Realized gain on investments for the three-month period ended March 31, 2020 was $1,000 compared to $0 during the same period in 2019.

Liquidity and Capital Resources

The Cooperative’s working capital at March 31, 2020 was $5,232,000 compared to $3,152,000 at March 31, 2019. The increased working capital at the end of the first quarter of 2020 as compared to the same period in 2019 is primarily related to increased short-term investments. The Cooperative received cash distributions from ProGold LLC totaling $1,899,000 for the three-month period ended March 31, 2020 compared to $2,111,000 for the three-month period ended March 31, 2019.

In fiscal year 2018, the Cooperative invested a portion of its cash reserves in bonds.  To ensure that the Cooperative would have access to cash if needed before the maturity of the bonds, the Cooperative also established a $2,000,000 line of credit at a variable interest rate based on the prime rate, which line of credit terminates on October 16, 2020.  The line of credit is secured by the investment management agency account for the Cooperative maintained by Bell Bank.  There was no outstanding balance as of March 31, 2020 or December 31, 2019.

The Cooperative had no long-term debt as of March 31, 2020 and March 31, 2019 and received operating cash flows of $5,000 for the three-month period ended March 31, 2020 compared to the use of $144,000 for the three-month period ended March 31, 2019.  The increase in operating cash flows for the three-month period ended March 31, 2020 compared to the three-month period ended March 31, 2019 is primarily due to a change in timing of payments.

Management believes that non-cash working capital levels, together with the Cooperative’s cash and cash equivalents, are appropriate in the current business environment and does not expect a significant increase or reduction of non-cash working capital in the next 12 months. Management expects that the Cooperative’s cash and cash equivalents, together with available borrowings under the line of credit, will be sufficient to fund its operations for the foreseeable future, including at least the next twelve months.

Significant Accounting Estimates and Policies

The Cooperative generally does not pay out Method A incentive payments or collect Method B agency fees until the end of its fiscal year.   The total annual Method B agency fee was determinable once the members completed their delivery method determination prior to January 1, 2020.  The quarterly Method B bushel delivery and agency fee revenue is calculated by allocating the portion of the total annual agency fee for that particular quarter or cumulating it for the particular period.  The Cooperative tracks Method A corn deliveries throughout the year so it can report the bushels of corn delivered by its members as well as the corresponding Method A incentive fees earned.  The final amounts owed by or due to Cargill and/or the Cooperative’s members who elect to deliver using Method A is not calculated until after December 31 in order to account for any failures to deliver or over-deliveries of corn.

As indicated in Note 6 to the Financial Statements in Item 1 of Part I of this Quarterly Report on Form 10-Q, the Cooperative adopted ASU 2014-09, Revenues from Contracts with Customers and ASU 2016-01 regarding financial instruments beginning January 1, 2018, and adopted ASU 2016-02 regarding accounting for leases beginning January 1, 2019.

The remainder of the Cooperative’s significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, of the Notes to the Financial Statements in the Cooperative’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.  The Cooperative’s critical accounting estimates are discussed in Item 7, Management’s Discussion and Analysis of Financial Conditions and Results of Operations, in the

10

Cooperative’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019.  There have been no other significant changes in the Cooperative’s significant accounting policies or critical accounting estimates since December 31, 2019.

Off Balance Sheet Arrangements

None.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, the Cooperative is not required to provide disclosure pursuant to this item.

Item 4.  Controls and Procedures

The Cooperative’s Chief Executive Officer and Chief Financial Officer has reviewed and evaluated the effectiveness of the Cooperative’s disclosure controls and procedures (as defined in Rules 240.13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934) as of March 31, 2020.  Based on that review and evaluation, the Chief Executive Officer and Chief Financial Officer has concluded that the Cooperative’s current disclosure controls and procedures, as designed and implemented, are effective and provide reasonable assurance that information relating to the Cooperative required to be disclosed in the reports the Cooperative files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, including ensuring that such information is accumulated and communicated to the Cooperative’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. 

There were no changes in the Cooperative’s internal controls over financial reporting that occurred during the Cooperative’s most recent fiscal quarter that may have materially affected, or are reasonably likely to materially affect, the Cooperative’s internal control over financial reporting.

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

None.

Item 1A.  Risk Factors

As a smaller reporting company, the Cooperative is not required to provide disclosure pursuant to this item.

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

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

None.

Item 5.  Other Information.

None.

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Item 6.  Exhibits

Exhibit No.	Exhibit Description
31.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Securities Exchange Act Rule 17 CFR 13a-14(a) – filed herewith.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 – filed herewith.
101	The following materials from this report, formatted in XBRL (Extensible Business Reporting Language) are filed herewith: (i) balance sheets, (ii) statements of operations and comprehensive income, (iii) statements of cash flows, and (iv) the notes to the financial statements.

12

SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	GOLDEN GROWERS COOPERATIVE
	(Registrant)
Date: May 11, 2020	/s/ Scott Stofferahn
	Scott Stofferahn
	Executive Vice President,
	Chief Financial Officer
	Duly Authorized Officer

13

EX-31.1

Exhibit 31.1

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

(SECTION 302 CERTIFICATION)

I, Scott Stofferahn, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Golden Growers Cooperative (the registrant);

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.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me 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 my 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 my 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.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

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

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

	GOLDEN GROWERS COOPERATIVE
May 11, 2020	/s/ Scott Stofferahn
	Scott Stofferahn
	Executive Vice President, Chief Executive Officer and Chief 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 quarterly report on Form 10-Q of Golden Growers Cooperative (the “Company”) for the fiscal quarter ended March  31, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Scott Stofferahn, Executive Vice President, serving as Chief Executive Officer and 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.

	GOLDEN GROWERS COOPERATIVE
May 11, 2020	/s/ Scott Stofferahn
	Scott Stofferahn
	Executive Vice President, Chief Executive Officer and Chief Financial Officer

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LINE OF CREDIT (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019
LINE OF CREDIT.
Line of credit maximum borrowing capacity	$ 2,000,000	$ 2,000,000
Line of credit	$ 0	$ 0

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2020

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

NOTE 9 – COMMITMENTS AND CONTINGENCIES

The Cooperative contracts with Cargill in connection with the procurement of corn and other agency services for an annual fee of $60,000, which is paid by the Cooperative to Cargill in quarterly installments. The agreements between Cargill and the Cooperative terminate concurrently with Cargill’s Second Amended and Restated Facility Lease with ProGold LLC, which terminates on December 31, 2022, but may be extended through 2023 under certain conditions.

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EMPLOYEE BENEFIT PLANS

3 Months Ended

Mar. 31, 2020

EMPLOYEE BENEFIT PLANS.

EMPLOYEE BENEFIT PLANS

NOTE 5 – EMPLOYEE BENEFIT PLANS

Pension Plan –In December 2012, the Cooperative approved a change to freeze the Cooperative’s defined benefit plan. As a result, no additional benefits will accrue to participants in the plan and no new employees are eligible for the plan.

The following schedules provide the components of Net Periodic Benefit Cost for the three months ended March 31, 2020 and March 31, 2019 (in thousands):  

	March 31,		March 31,
	2020		2019
Interest Cost	$	7	$	8
Expected Return on Plan Assets		(11)		(14)
Amortization of Net (Gain) Loss		—		—
Net Periodic Pension Cost	$	(4)	$	(6)

Through the three months ended March 31, 2020, the Cooperative has made $0 in contributions as compared to $0 through the three months ended March 31, 2019.  The Cooperative does not anticipate making a contribution in 2020. Contributions in 2019 totaled $0.

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EXPENSES

3 Months Ended

Mar. 31, 2020

EXPENSES

EXPENSES

NOTE 2 – EXPENSES

The Cooperative contracts with Cargill, Incorporated (“Cargill”) in connection with the procurement of corn and other agency services for an annual fee of $60,000, which is paid by the Cooperative to Cargill in quarterly installments.  The agreements between Cargill and the Cooperative terminate concurrently with Cargill’s Second Amended and Restated Facility Lease with ProGold Limited Liability Company (“ProGold LLC”), which terminates on December 31, 2022, but may be extended through 2023 under certain conditions.

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STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
COMPREHENSIVE INCOME
Net Income	$ 1,808	$ 1,823
Other Comprehensive Income (Loss), Net	(7)
Comprehensive Income	$ 1,801	$ 1,823

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2020	May 11, 2020
Document and Entity Information
Document Type	10-Q
Document Period End Date	Mar. 31, 2020
Entity Registrant Name	GOLDEN GROWERS COOPERATIVE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		15,490,480
Entity Central Index Key	0001489874
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false

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INVESTMENTS - Net Carrying Amount (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Net Carrying Amount
Due in 1 year or less	$ 1,904
Due in 2 to 5 years	2,478
Greater than 5 years	206
Total	4,588
Fair Value
Due in 1 year or less	1,885
Due in 2 to 5 years	2,531
Greater than 5 years	200
Total	$ 4,616

XML

EMPLOYEE BENEFIT PLANS (Tables)

3 Months Ended

Mar. 31, 2020

EMPLOYEE BENEFIT PLANS.

Components of Net Periodic Benefit Cost

	March 31,		March 31,
	2020		2019
Interest Cost	$	7	$	8
Expected Return on Plan Assets		(11)		(14)
Amortization of Net (Gain) Loss		—		—
Net Periodic Pension Cost	$	(4)	$	(6)

XML

RECENTLY ADOPTED ACCOUNTING STANDARDS (Details)		3 Months Ended
	Jan. 01, 2018 installment $ / bu	Mar. 31, 2020 USD ($) item
Revenue from Contract with Customer [Abstract]
Annual delivery of bushels of corn | item		15,490,480
Number Of Installments | installment	4
Incentive Payment Per Bushel to Members on Delivery of Corn under Method A	0.05
Annual Cooperative fee for corn delivery | $		$ 60,000
Payment for Corn Delivered Using Method B	0.02

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CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
OPERATIONS
Corn Revenue	$ 14,743	$ 15,388
Corn Expense	(14,757)	(15,402)
Net Income from ProGold Limited Liability Company	1,943	1,955
General & Administrative Expenses	(171)	(168)
Net Income from Operations	1,758	1,773
Other Income	50	50
Net Income Before Income Tax	1,808	1,823
Net Income	$ 1,808	$ 1,823
Weighted Average Shares/Units Outstanding	15,490,480	15,490,480
Earnings per Share/Membership Unit
Primary and Fully Diluted (In dollars per share)	$ 0.12	$ 0.12

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BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2020

BASIS OF PRESENTATION

BASIS OF PRESENTATION

NOTE 1 – BASIS OF PRESENTATION

The condensed financial statements of Golden Growers Cooperative (the “Cooperative”) for the three-month period ended March 31, 2020 and 2019 are unaudited and reflect all adjustments consisting of normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim period. The condensed financial statements should be read in conjunction with the financial statements and notes thereto, contained in the Cooperative’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019. The results of operations for the three-month period ended March 31, 2020 are not necessarily indicative of the results for the entire fiscal year ending December 31, 2020.

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RECENTLY ADOPTED ACCOUNTING STANDARDS - Disaggregated Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue
Corn Revenue	$ 14,743	$ 15,388
Method A
Revenue
Total	5,300	5,900
Method B
Revenue
Total	$ 9,400	$ 9,500

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INVESTMENTS - Investments held to maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Investments
Amortized Cost	$ 5,066	$ 5,027
Unrealized Gains	72	81
Unrealized Losses	(44)
Fair Value	5,094	5,108
Corporate Bonds
Investments
Amortized Cost	4,588	4,691
Unrealized Gains	72	81
Unrealized Losses	(44)
Fair Value	4,616	4,772
US Treasury Bill
Investments
Amortized Cost	100
Fair Value	100
Money Market & CD’s
Investments
Amortized Cost	378	336
Fair Value	$ 378	$ 336

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EXPENSES (Details)	Jan. 01, 2018 USD ($) installment
EXPENSES
Annual contractual payments to Cargill to arrange for the delivery of the corn and other agency services | $	$ 60,000
Number Of Installments | installment	4

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DISTRIBUTIONS TO MEMBERS (Details) - USD ($)			3 Months Ended
	Feb. 28, 2020	Feb. 14, 2020	Mar. 31, 2020	Mar. 31, 2019
DISTRIBUTIONS TO MEMBERS
Member distributions paid	$ 2,354,553	$ 2,168,667	$ 2,168,000	$ 2,355,000
Distribution to members per outstanding membership unit (in dollars per unit)	$ 0.152	$ 0.14

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2020

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 10 – SUBSEQUENT EVENTS

The Cooperative has evaluated events through the date the financial statements were issued for potential recognition or disclosure in the March 31, 2020 financial statements and concluded that no subsequent events have occurred that would require recognition in the March 31, 2020 financial statements.

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RECENTLY ADOPTED ACCOUNTING STANDARDS

3 Months Ended

Mar. 31, 2020

RECENTLY ADOPTED ACCOUNTING STANDARDS

RECENTLY ADOPTED ACCOUNTING STANDARDS

NOTE 6 – RECENTLY ADOPTED ACCOUNTING STANDARDS

Leases - In February 2016, the Financial Accounting Standards Board (“FASB”) issued a standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use assets and lease liabilities on the balance sheet. The standard was effective for the Cooperative beginning January 1, 2019. The standard did not have a significant impact on the Cooperative’s financial statements.

Revenue Recognition - On January 1, 2018, the Cooperative adopted ASU 2014-09, Revenues from Contracts with Customers. The core principle of the revenue guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Cooperative determined that the timing, pattern and amount of revenue recognized under the new standard is substantially the same as previously recognized by the Cooperative.

Annually, the Cooperative is required to deliver approximately 15,490,480 bushels of corn to Cargill for processing at the ProGold LLC wet-milling facility. To fulfill that requirement, the Cooperative’s members are contractually obligated to annually deliver corn to the Cooperative by either Method A or Method B or a combination of both. Under Method A, a member is required to physically deliver corn to the Cooperative and under Method B a member appoints the Cooperative as its agent to arrange for the acquisition and delivery of corn on the member’s behalf. The Cooperative contractually appoints Cargill as its agent to arrange for the delivery of the corn by its members who elect to deliver corn using Method A and to acquire corn on its behalf for its members who elect to deliver corn using Method B. In exchange for these services, the Cooperative pays an annual fee of $60,000, paid in quarterly installments.

Members who deliver corn under Method A are paid the market price or contracted price for their corn at the time of delivery, as well as an incentive payment of $.05 per bushel. Cargill pays the aggregate purchase price for corn purchased from the Cooperative’s members to the Cooperative and then, on the Cooperative’s behalf, makes individual payments for corn and incentive payments directly to the Cooperative’s members. In the event a member who has elected to deliver corn by Method A delivers to Cargill less than its committed amount of corn, the quantity of the shortfall is then purchased and delivered by Cargill on the Cooperative’s behalf.  The purchase price is equal to the average price reported for Method A corn for the final month of the year.  In addition, the Method A member with a shortfall will be charged a purchased corn fee and agency fee determined by the Cooperative’s Board of Directors.

Members who elect Method B to deliver corn pay the Cooperative a $.02 per bushel agency fee for the cost of having the Cooperative deliver corn on their behalf. The price per bushel paid to such member is equal to the price per bushel paid by Cargill to acquire the corn as the Cooperative’s agent. Method B revenue will be equal to the price paid. The Cooperative has determined Corn Expense for Method B deliveries will be the weighted average price for Method A corn during the quarter multiplied by the number of Method B bushels purchased during the quarter.

The incentive payment and agency fee are also a component of Corn Expense. The Cooperative’s Board of Directors has the discretion to change the incentive payment and the agency fee based on the Cooperative’s corn delivery needs.

For the three month periods ended March 31, 2020 and 2019, the Cooperative recognized corn revenue of $14.7 million and $15.4 million, respectively. Disaggregated revenue for the three month periods ended March 31, 2020 and 2019 is as follows: revenue from Method A deliveries totaled $5.3 million and $5.9 million, respectively; and revenue from Method B deliveries totaled $9.4 million and $9.5 million, respectively.

Financial Instruments – Recognition, Measurement, Presentation, and Disclosure – On January 1, 2018, the Cooperative adopted ASU 2016-01 related to certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The adoption of the standard did not have a significant impact on the Cooperative’s financial statements. 

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STATEMENTS OF CHANGES IN MEMBERS' EQUITY $ in Thousands	USD ($)
Balance at Dec. 31, 2018	$ 25,836
Increase (Decrease) in Stockholders' Equity
Net Income	1,823
Distributions to Members	(2,355)
Balance at Mar. 31, 2019	25,304
Balance at Dec. 31, 2019	26,379
Increase (Decrease) in Stockholders' Equity
Net Income	1,808
Pension Liability Adjustment	(7)
Distributions to Members	(2,168)
Balance at Mar. 31, 2020	$ 26,012

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CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current Assets:
Cash and Cash Equivalents	$ 2,925	$ 3,228
Short-Term Investments	2,382	1,807
Other Current Assets	44	275
Total Current Assets	5,351	5,310
Long-Term Investments	2,684	3,220
Investment in ProGold Limited Liability Company	18,103	18,059
Total Assets	26,138	26,589
Current Liabilities
Accounts Payable		2
Accrued Liabilities	119	208
Total Current Liabilities	119	210
Non-Current Liabilites	7
Members' Equity
Membership Units, Authorized 60,000,000 Units, Issued and Outstanding 15,490,480 as of March 31, 2020 and December 31, 2019	26,019	26,379
Accumulated Other Comprehensive Income(Loss)	(7)
Total Members’ Equity	26,012	26,379
Total Liabilities and Members’ Equity	$ 26,138	$ 26,589

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EMPLOYEE BENEFIT PLANS (Details)	1 Months Ended	3 Months Ended
	Dec. 31, 2012 USD ($) employee	Mar. 31, 2020 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)
Components of Net Periodic Benefit Cost
Interest Cost		$ 7,000	$ 8,000
Expected return on plan assets		(11,000)	(14,000)
Net Periodic Pension Cost		(4,000)	(6,000)
Cooperative contributions		$ 0	$ 0
Number of new employees eligible under the plan | employee	0
Anticipated contributions	$ 0			$ 0

XML

INVESTMENTS - (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Investments
Fair Value	$ 5,094	$ 5,108
Level 2
Investments
Fair Value	5,094	5,108
US Treasury Bill
Investments
Fair Value	100
US Treasury Bill | Level 2
Investments
Fair Value	100
Corporate Bonds
Investments
Fair Value	4,616	4,772
Corporate Bonds | Level 2
Investments
Fair Value	4,616	4,772
Money Market & CD’s
Investments
Fair Value	378	336
Money Market & CD’s | Level 2
Investments
Fair Value	$ 378	$ 336

XML

LINE OF CREDIT

3 Months Ended

Mar. 31, 2020

LINE OF CREDIT.

LINE OF CREDIT

NOTE 8 – LINE OF CREDIT

In 2018, the Cooperative established a $2,000,000 line of credit with a variable interest rate.  This line of credit has been extended to October 16, 2020.  The line of credit is secured by the investment management agency account for the Cooperative maintained by Bell Bank.  There is no outstanding balance as of March 31, 2020 or December 31, 2019.

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INVESTMENTS

3 Months Ended

Mar. 31, 2020

INVESTMENTS

INVESTMENTS

NOTE 4 – INVESTMENTS

The Cooperative has determined fair value of its investments held to maturity based on Level 2 inputs. 

March 31, 2020:	Level 1		Level 2		Level 3		Total
Corporate Bonds	$	—	$	4,616	$	—	$	4,616
US Treasury Bill				100				100
Money Market & CD’s		—		378		—		378
	$	—	$	5,094	$	—	$	5,094
December 31, 2019:
Corporate Bonds	$	—	$	4,772	$	—	$	4,772
Money Market & CD’s		—		336		—		336
	$	—	$	5,108	$	—	$	5,108

		Net Carrying	Fair
	Amount		Value
Due in 1 year or less	$	1,904	$	1,885
Due in 2 to 5 years		2,478		2,531
Greater than 5 years		206		200
	$	4,588	$	4,616

The Coopertive’s investments held to maturity are as follows as of March 31, 2020 and December 31, 2019:

	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
March 31, 2020:
Corporate Bonds	$	4,588	$	72	$	(44)	$	4,616
US Treasury Bill		100						100
Money Market & CD’s		378		—		—		378
	$	5,066	$	72	$	(44)	$	5,094
December 31, 2019:
Corporate Bonds	$	4,691	$	81	$	—	$	4,772
Money Market & CD’s		336		—		—		336
	$	5,027	$	81	$	—	$	5,108

Maturities are as follows as of March 31, 2020:

	Less than 1 year		1 to 5 Years		Greater than 5 years		Total
Corporate Bonds	$	1,904	$	2,478	$	206	$	4,588
	$	1,904	$	2,478	$	206	$	4,588

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INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2020

INVESTMENTS

Schedule of fair value of investments held to maturity based on level 2 inputs

March 31, 2020:	Level 1		Level 2		Level 3		Total
Corporate Bonds	$	—	$	4,616	$	—	$	4,616
US Treasury Bill				100				100
Money Market & CD’s		—		378		—		378
	$	—	$	5,094	$	—	$	5,094
December 31, 2019:
Corporate Bonds	$	—	$	4,772	$	—	$	4,772
Money Market & CD’s		—		336		—		336
	$	—	$	5,108	$	—	$	5,108

Schedule of investments held to maturity

		Net Carrying	Fair
	Amount		Value
Due in 1 year or less	$	1,904	$	1,885
Due in 2 to 5 years		2,478		2,531
Greater than 5 years		206		200
	$	4,588	$	4,616

Schedule of gain (loss) on investments

	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
March 31, 2020:
Corporate Bonds	$	4,588	$	72	$	(44)	$	4,616
US Treasury Bill		100						100
Money Market & CD’s		378		—		—		378
	$	5,066	$	72	$	(44)	$	5,094
December 31, 2019:
Corporate Bonds	$	4,691	$	81	$	—	$	4,772
Money Market & CD’s		336		—		—		336
	$	5,027	$	81	$	—	$	5,108

Schedule of maturities

	Less than 1 year		1 to 5 Years		Greater than 5 years		Total
Corporate Bonds	$	1,904	$	2,478	$	206	$	4,588
	$	1,904	$	2,478	$	206	$	4,588

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COMMITMENTS AND CONTINGENCIES (Details)	Jan. 01, 2018 USD ($) installment
COMMITMENTS AND CONTINGENCIES.
Annual contractual payments to Cargill for procurement of corn | $	$ 60,000
Number Of Installments | installment	4

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PROGOLD LIMITED LIABILITY COMPANY (Tables)

3 Months Ended

Mar. 31, 2020

PROGOLD LIMITED LIABILITY COMPANY

Schedule of financial information for ProGold LLC

	March 31,				December 31,
(In Thousands)	2020		2019		2019
Current Assets	$	211	$	220	$	230
Long-Term Assets		39,113		38,645		38,962
Total Assets	$	39,324	$	38,865	$	39,192
Current Liabilities	$	88	$	7	$	5
Long-Term Liabilities		2,292		1,458		2,333
Total Liabilities		2,380		1,465		2,338
Members’ Equity		36,944		37,400		36,854
Total Liabilities and Members’ Equity	$	39,324	$	38,865	$	39,192
Rent Revenue on Operating Lease	$	4,833	$	4,679	$	19,085
Expenses		867		689		3,455
Net Income	$	3,966	$	3,990	$	15,630

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DISTRIBUTIONS TO MEMBERS

3 Months Ended

Mar. 31, 2020

DISTRIBUTIONS TO MEMBERS

DISTRIBUTIONS TO MEMBERS

NOTE 7 – DISTRIBUTIONS TO MEMBERS

On February 14, 2020, the Cooperative made distributions to its members totaling $2,168,667, or $0.14 per outstanding membership unit.  On February 28, 2019, the Cooperative made distributions to its members totaling $2,354,553 or $0.152 per outstanding membership unit.

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PROGOLD LIMITED LIABILITY COMPANY

3 Months Ended

Mar. 31, 2020

PROGOLD LIMITED LIABILITY COMPANY

PROGOLD LIMITED LIABILITY COMPANY

NOTE 3 – PROGOLD LIMITED LIABILITY COMPANY

The Cooperative has a 49% ownership interest in ProGold LLC.  Following is summary financial information for ProGold LLC, which was derived from the monthly unaudited financial statements of ProGold LLC:

	March 31,				December 31,
(In Thousands)	2020		2019		2019
Current Assets	$	211	$	220	$	230
Long-Term Assets		39,113		38,645		38,962
Total Assets	$	39,324	$	38,865	$	39,192
Current Liabilities	$	88	$	7	$	5
Long-Term Liabilities		2,292		1,458		2,333
Total Liabilities		2,380		1,465		2,338
Members’ Equity		36,944		37,400		36,854
Total Liabilities and Members’ Equity	$	39,324	$	38,865	$	39,192
Rent Revenue on Operating Lease	$	4,833	$	4,679	$	19,085
Expenses		867		689		3,455
Net Income	$	3,966	$	3,990	$	15,630

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CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Cash Flows from Operating Activities
Net Income	$ 1,808,000	$ 1,823,000
Net (Income) from ProGold Limited Liability Company	(1,943,000)	(1,955,000)
Changes in assets and liabilities
Other Current Assets	231,000	200,000
Accrued liabilities and payables	(91,000)	(212,000)
Net Cash Provided (Used) in Operating Activities	5,000	(144,000)
Cash Flows from Investing Activities
(Purchase) Sale of investments	(39,000)	(14,000)
Distribution received from ProGold LLC	1,899,000	2,111,000
Net Cash Provided in Investing Activities	1,860,000	2,097,000
Cash Flows from Financing Activities
Member distributions paid	(2,168,000)	(2,355,000)
Net Cash Used by Financing Activities	(2,168,000)	(2,355,000)
Increase (Decrease) in Cash and Cash Equivalents	(303,000)	(402,000)
Cash and Cash Equivalents, Beginning of Year	3,228,000	2,403,000
Cash and Cash Equivalents, End of Year	$ 2,925,000	$ 2,001,000

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CONDENSED BALANCE SHEETS (Parenthetical) - shares	Mar. 31, 2020	Dec. 31, 2019
BALANCE SHEETS
Membership Units, Authorized	60,000,000	60,000,000
Membership Units, Issued	15,490,480	15,490,480
Membership Units, Outstanding	15,490,480	15,490,480

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INVESTMENTS - Maturities (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Investments
Less than 1 year	$ 1,904
1 to 5 years	2,478
Greater than 5 years	206
Total	4,588
Corporate Bonds
Investments
Less than 1 year	1,904
1 to 5 years	2,478
Greater than 5 years	206
Total	$ 4,588

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PROGOLD LIMITED LIABILITY COMPANY (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
ProGold LLC
ProGold Limited Liability Company
Ownership percentage in joint venture	49.00%
ProGold LLC
Financial information for ProGold LLC
Current Assets	$ 211	$ 220	$ 230
Long-Term Assets	39,113	38,645	38,962
Total Assets	39,324	38,865	39,192
Current Liabilities	88	7	5
Long-Term Liabilities	2,292	1,458	2,333
Total Liabilities	2,380	1,465	2,338
Members' Equity	36,944	37,400	36,854
Total Liabilities and Members' Equity	39,324	38,865	39,192
Rent Revenue on Operating Lease	4,833	4,679	19,085
Expenses	867	689	3,455
Net Income	$ 3,966	$ 3,990	$ 15,630