UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
	For the quarterly period ended	April 30, 2019
	OR
o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
	For the transition period from               to               .
	COMMISSION FILE NUMBER 000-51177

GOLDEN GRAIN ENERGY, LLC

(Exact name of registrant as specified in its charter)

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

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

x Yes     o No

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

x Yes     o No

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

Large Accelerated Filer o	Accelerated Filer  o
Non-Accelerated Filer x	Smaller Reporting Company o
	Emerging Growth Company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

o Yes     x No

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

As of June 14, 2019, there were 18,953,000 Class A membership units outstanding and 920,000 Class B membership units outstanding.

1

INDEX

	Page Number
PART I	3
Item 1. Financial Statements	3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	23
Item 4. Controls and Procedures	24
PART II	24
Item 1. Legal Proceedings	24
Item 1A. Risk Factors	24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3. Defaults Upon Senior Securities	24
Item 4. Mine Safety Disclosures	25
Item 5. Other Information	25
Item 6. Exhibits	25
SIGNATURES	26

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GOLDEN GRAIN ENERGY, LLC

Balance Sheets

ASSETS	April 30, 2019		October 31, 2018
	(Unaudited)
Current Assets
Cash and equivalents	$	14,169,794	$	9,322,805
Marketable securities	3,302,778		10,559,242
Accounts receivable	1,910,097		1,085,581
Other receivables	398,860		3,784,114
Derivative instruments	506,484		804,952
Inventory	7,862,689		6,876,956
Prepaid expenses and other	3,095,320		2,730,444
Total current assets	31,246,022		35,164,094
Property and Equipment
Land and land improvements	14,319,211		12,961,713
Building and grounds	31,319,540		31,319,540
Grain handling equipment	16,046,157		16,046,157
Office equipment	370,471		275,086
Plant and process equipment	125,125,014		108,786,485
Construction in progress	1,083,626		12,887,773
	188,264,019		182,276,754
Less accumulated depreciation	113,317,879		108,397,948
Net property and equipment	74,946,140		73,878,806
Other Assets
Investments	24,839,372		25,719,513
Other assets	469,010		509,866
Total other assets	25,308,382		26,229,379
Total Assets	$	131,500,544	$	135,272,279

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

3

GOLDEN GRAIN ENERGY, LLC

Balance Sheets

LIABILITIES AND MEMBERS' EQUITY	April 30, 2019		October 31, 2018
	(Unaudited)
Current Liabilities
Accounts payable	$	5,838,900	$	4,465,376
Accrued expenses	2,660,458		2,801,329
Other current liabilities	368,074		367,365
Total current liabilities	8,867,432		7,634,070
Long-term Liabilities, deferred compensation	450,397		536,414
Commitments and Contingencies
Members' Equity (19,873,000 units issued and outstanding)	122,182,715		127,101,795
Total Liabilities and Members’ Equity	$	131,500,544	$	135,272,279

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

4

GOLDEN GRAIN ENERGY, LLC

Statements of Operations (Unaudited)

	Three Months Ended		Three Months Ended			Six Months Ended			Six Months Ended
	April 30, 2019		April 30, 2018			April 30, 2019			April 30, 2018
Revenues	$	49,608,660	$	45,886,524		$	95,805,037		$	93,365,567
Cost of Goods Sold	48,037,936		43,544,726			94,855,579			90,962,912
Gross Profit	1,570,724		2,341,798			949,458			2,402,655
Operating Expenses	977,124		1,082,114			1,948,520			2,130,150
			—
Operating Income (Loss)	593,600		1,259,684			(999,062		)	272,505
Other Income (Expense)
Other income (expense)	135,482		17,498			336,308			(729,017		)
Interest income (expense)	60,643		(11,544		)	112,311			(8,553		)
Equity in net income of investments	438,716		2,055,567			599,613			2,468,772
Total Other Income	634,841		2,061,521			1,048,232			1,731,202
Net Income	$	1,228,441	$	3,321,205		$	49,170		$	2,003,707
Basic & diluted net income per unit	$	0.06	$	0.17		$	—		$	0.10
Weighted average units outstanding for the calculation of basic & diluted net income per unit	19,873,000		19,873,000			19,873,000			19,873,000
Distributions Per Unit for Class A & B	$	—	$	—		$	0.25		$	0.75

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

5

GOLDEN GRAIN ENERGY, LLC

Statements of Changes in Members' Equity

	Members' Equity
Balance - October 31, 2017	$	135,635,246
Net loss for the three-month period ended January 31, 2018	(1,317,498		)
Member distribution	(14,904,750		)
Balance - January 31, 2018	119,412,998
Net income for the three-month period ended April 30, 2018	3,321,205
Balance - April 30, 2018	$	122,734,203

	Members' Equity
Balance - October 31, 2018	$	127,101,795
Net loss for the three-month period ended January 31, 2019	(1,179,271		)
Member distributions	(4,968,250		)
Balance - January 31, 2019	120,954,274
Net income for the three-month period ended April 30, 2019	1,228,441
Balance - April 30, 2019	$	122,182,715

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

6

GOLDEN GRAIN ENERGY, LLC

Statements of Cash Flows (Unaudited)

	Six Months Ended			Six Months Ended
	April 30, 2019			April 30, 2018
Cash Flows from Operating Activities
Net income	$	49,170		$	2,003,707
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,960,787			4,522,195
Unrealized gain on risk management & marketable securities	(9,111		)	370,454
Amortization of deferred revenue	—			(43,557		)
Cancellation of note receivable	—			599,421
Change in accretion of interest on grant & note receivable	(2,326		)	(18,502		)
Distributions in excess of earnings from investments	880,141			488,648
Proceeds from insurance claims and business interruption	(183,739		)	—
Change in deferred compensation	(86,017		)	25,647
Change in assets and liabilities
Accounts receivable	(824,516		)	4,065,315
Inventory	(3,739,862		)	(4,685,035		)
Prepaid expenses and other	2,692,167			(180,312		)
Accounts payable	1,956,035			(174,522		)
Accrued expenses	(140,871		)	(260,050		)
Net cash provided by operating activities	5,551,858			6,713,409
Cash Flows from Investing Activities
Capital expenditures	(6,569,067		)	(8,843,930		)
Purchase of marketable securities	(7,515		)	(34,645		)
Proceeds from sale of marketable securities	7,571,558			3,000,000
Net cash provided by (used in) investing activities	994,976			(5,878,575		)
Cash Flows from Financing Activities
Distributions to members	(4,968,250		)	(14,904,750		)
Payment received on insurance claim receivable	3,183,739			—
Payments received on grant receivable	84,666			85,665
Net cash (used in) financing activities	(1,699,845		)	(14,819,085		)
Net Increase (Decrease) in Cash and Equivalents	4,846,989			(13,984,251		)
Cash and Equivalents – Beginning of Period	9,322,805			17,518,187
Cash and Equivalents – End of Period	$	14,169,794		$	3,533,936
Supplemental Cash Flow Information
Cash paid for interest	$	25,793		$	31,104
Supplemental Disclosure of Noncash Operating, Investing & Financing Activities
Accounts payable related to construction in progress	$	722,425		$	2,918,261

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

7

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2019

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and notes disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted as permitted by such rules and regulations. These financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company's audited financial statements for the year ended October 31, 2018, contained in the Company's annual report on Form 10-K for 2018.

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

Nature of Business

Golden Grain Energy, LLC ("Golden Grain Energy" and "the Company") is an approximately 120 million gallon annual production ethanol plant near Mason City, Iowa. The Company sells its production of ethanol, distiller grains with solubles and corn oil primarily in the continental United States. The Company also holds several investments in various companies that focus on ethanol production, marketing and/or logistics.

Organization

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

Accounting Estimates

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

Cash and Equivalents

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

Marketable Securities

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

Marketable securities consisted of mutual funds invested in intermediate-term municipal and government bonds. For the periods ended April 30, 2019 and 2018, there was no other-than-temporary impairment recognized. Mutual funds are considered trading securities which are measured at fair value using prices obtained from pricing services. Any unrealized or realized gains and losses on the trading securities are recorded as part of other income. The Company recorded interest, dividends and net realized and unrealized gains (losses) from these investments as part of other income as follows:

8

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2019

	Three Months Ended April 30,					Six Months Ended April 30,
	2019		2018			2019		2018
Net earnings (loss) on marketable securities	$	66,000	$	(75,000	)	$	267,000	$	(222,000	)
	Marketable Securities
As of	Cost		Fair Market Value
April 30, 2019	$	3,220,000	$	3,303,000
October 31, 2018	$	10,857,000	$	10,559,000

Accounts Receivable

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

Investments

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

The fiscal years of Renewable Products Marketing Group, LLC (RPMG) and Guardian Energy Janesville, LLC end on September 30 and the fiscal years of Absolute Energy, LLC, Homeland Energy Solutions, LLC and Lawrenceville Tank, LLC, end on December 31. The Company consistently follows the practice of recognizing the net income based on the most recent reliable data. Therefore, the net income which is reported in the Company's statement of operations for the period ended April 30, 2019, for all companies, is based on the investee's results for the three and six months ended March 31, 2019.

Note Receivable

The Company carried a note receivable from an unrelated party with a balance of approximately $599,000 as of October 31, 2017, included in other assets. This balance included the original face value plus accrued interest. During 2018, the Company deemed the likelihood of collecting on the note receivable remote and wrote-off the entire balance, included in other expense on the statement of operations for the six months ended April 30, 2018.

Revenue and Cost Recognition

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

9

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2019

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

All revenue recognized in the income statement is considered to be revenue from contracts with customers. The disaggregation of revenue according to product line, along with accounts receivable from contracts with customers, is as disclosed in Note 5.Shipping costs incurred by the Company in the sale of ethanol, distiller grains and corn oil are not specifically identifiable and as a result, revenue from the sale of ethanol, distiller grains and corn oil are recorded based on the net selling price reported to the Company from its marketer. Railcar lease costs incurred by the Company in the sale and shipment of distiller grain products are included in cost of goods sold.

Based upon the timing of the transfer of control of our products to our customers, there are no contract assets or liabilities as of April 30, 2019.

Inventory

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

Property & Equipment

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

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

Investment in commodities contracts, derivative instruments and hedging activities

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

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

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

Net earnings (loss) per unit

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

10

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2019

Fair Value

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

Risks and Uncertainties

The Company has certain risks and uncertainties that it will experience during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distiller grains to customers primarily located in the United States. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. For the three and six months ended April 30, 2019, ethanol sales accounted for approximately 78% respectively, of total revenue, distiller grains sales accounted for approximately 18% of total revenue and corn oil sales accounted for approximately 4% of total revenue while corn costs averaged approximately 79% of cost of goods sold.

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

Recent Accounting Pronouncements

In February 2016, FASB issued ASU No. 2016-02 "Leases" ("ASU 2016-02"). ASU 2016-02 requires the recognition of lease assets and lease liabilities by lessees for all leases greater than one year in duration and classified as operating leases under previous GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and for interim periods within that fiscal year. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases): (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted cash flow basis; and (2) a "right of use" asset, which is an asset that represents the lessee's right to use the specified asset for the lease term. The Company is currently evaluating the impact of its pending adoption of the new standard on the financial statements but expects that upon adoption of this accounting standard, right of use assets and lease obligations recognized on the balance sheet will be material.

2.    INVENTORY

Inventory consisted of the following as of April 30, 2019 and October 31, 2018:

	April 30, 2019		October 31, 2018
Raw Materials	$	3,408,749	$	2,859,081
Work in Process	1,722,604		1,232,248
Finished Goods	2,731,336		2,785,627
Totals	$	7,862,689	$	6,876,956

3.    BANK FINANCING

The Company has entered into a master loan agreement with Farm Credit Services of America (FLCA) which includes revolving term loans with original maximum borrowings of $35 million and which currently has availability of $10 million and matures on February 1, 2020. Interest on the term loan is payable monthly at 3.15% above the one-month LIBOR (5.58% as of April 30, 2019). The borrowings are secured by substantially all the assets of the Company. The credit agreements are subject to covenants, including requiring the Company to maintain various financial ratios, as well as certain distribution limitations. As of April 30, 2019, the Company was in compliance with all of the loan covenants. Failure to comply with the protective loan covenants or maintain the required financial ratios may cause acceleration of any outstanding principal balances on the loans and/or imposition of fees and penalties. As of April 30, 2019 and October 31, 2018, the Company had no outstanding borrowings.

11

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2019

4.    RELATED PARTY TRANSACTIONS

The Company purchased corn and materials from members of its Board of Directors or Risk Management Committee that own or manage elevators and construction companies (see Note 5). The Company also purchased ingredients from RPMG. Purchases from the related parties during the three and six months ended April 30, 2019 totaled approximately $10,355,000 and $19,468,000 respectively. Purchases from the related parties during the three and six months ended April 30, 2018 totaled approximately $13,945,000 and $22,896,000, respectively. As of April 30, 2019 and October 31, 2018, the amount owed to related parties was approximately $765,000 and $420,000, respectively (See Note 5).

5.    COMMITMENTS, CONTINGENCIES, AGREEMENTS AND RELATED PARTY

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

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

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

	Three Months Ended April 30,				Six Months Ended April 30,
	2019		2018		2019		2018
Sales ethanol	$	38,821,000	$	36,110,000	$	73,733,000	$	73,918,000
Sales distiller grains	8,957,000		8,070,000		18,408,000		15,672,000
Sales corn oil	1,943,000		1,843,000		3,752,000		4,055,000
Marketing fees-ethanol	$	61,000	$	66,000	$	122,000	$	132,000
Marketing fees-distiller grains	66,000		55,000		137,000		115,000
Marketing fees-corn oil	15,000		15,000		30,000		33,000
As of	April 30, 2019		October 31, 2018
Amount due from RPMG	$	1,878,000	$	1,080,000

The Company has entered into multiple construction agreements as part of plans to expand plant capacity and build a new entrance road and administration building. Total commitment under these agreements total approximately $22.7 million of which approximately $7.3 million is to a related party. The Company has incurred costs related to the expansion project totaling approximately $18.4 million of which approximately $7.9 million is to a related party. The current planned expansion project costs are estimated at approximately $23 million. The project is materially completed with exception of the entrance road and administration building which are expected to be completed in the fall of 2019. The final phase of the expansion to increase production capacity is currently being reevaluated. No other contracts have been executed.

6.    RISK MANAGEMENT

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

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

12

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2019

The following table represents the approximate amount of realized and unrealized gains (losses) and changes in fair value recognized in earnings on commodity contracts for periods ended April 30, 2019 and 2018 and the fair value of derivatives as of April 30, 2019 and October 31, 2018:

	Income Statement Classification	Realized Gain (Loss)			Change in Unrealized Gain (Loss)			Total Gain (Loss)
Derivatives not designated as hedging instruments:
Commodity Contracts for the	Revenue	$	(69,000	)	$	98,000		$	29,000
three months ended April 30, 2019	Cost of Goods Sold	275,000			(225,000		)	50,000
	Total	$	206,000		$	(127,000	)	$	79,000
Commodity Contracts for the	Revenue	$	—		$	—		$	—
three months ended April 30, 2018	Cost of Goods Sold	(280,000		)	(813,000		)	(1,093,000		)
	Total	$	(280,000	)	$	(813,000	)	$	(1,093,000	)
Commodity Contracts for the	Revenue	$	(103,000	)	$	303,000		$	200,000
six months ended April 30, 2019	Cost of Goods Sold	860,000			(600,000		)	260,000
	Total	$	757,000		$	(297,000	)	$	460,000
Commodity Contracts for the	Revenue	$	—		$	—		$	—
six months ended April 30, 2018	Cost of Goods Sold	74,000			(969,000		)	(895,000		)
	Total	$	74,000		$	(969,000	)	$	(895,000	)

	Balance Sheet Classification	April 30, 2019			October 31, 2018
Futures and option contracts through March 2020
In gain position		$	1,441,000		$	801,000
In loss position		(1,278,000		)	(340,000		)
Cash held by broker		343,000			344,000
	Current Asset	$	506,000		$	805,000

As of April 30, 2019, the Company had the following approximate outstanding purchase and sale commitments, of which all sales commitments and approximately $3,405,000 of the purchase commitments were with related parties.

	Commitments Through	Amount
Sale commitments
Corn Oil - fixed price	June 2019	$	835,000
Distiller Grains - fixed price	June 2019	2,255,000
Purchase commitments
Corn - fixed price	December 2019	$	6,174,000
Corn - basis contract	March 2020	11,881,000
Natural gas - fixed price	April 2021	6,343,000

13

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2019

As of April 30, 2019, the Company has fixed price futures and forward contracts in place for approximately 14% of its anticipated corn needs and 6% of its ethanol sales for the next 12 months with no open positions beyond that period. As of April 30, 2019, the Company has fixed price futures and forward contracts in place for approximately 80% of its natural gas needs for the next 12 months and approximately 28% of its natural gas needs for the next 24 months with no open positions beyond that period.

7.    FAIR VALUE MEASUREMENTS

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

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

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

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

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

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

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

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

	Total			Level 1			Level 2			Level 3
Marketable securities:
Assets, April 30, 2019	$	3,303,000		$	3,303,000		$	—		$	—
Assets, October 31, 2018	10,559,000			10,559,000			—			—
Derivative financial instruments:
April 30, 2019
Assets	$	1,441,000		$	644,000		$	797,000		$	—
Liabilities	(1,278,000		)	(659,000		)	(619,000		)	—
October 31, 2018
Assets	$	801,000		$	195,000		$	606,000		$	—
Liabilities	(340,000		)	(22,000		)	(318,000		)	—

14

GOLDEN GRAIN ENERGY, LLC

Notes to Unaudited Condensed Financial Statements

April 30, 2019

8. INVESTMENTS

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

Balance Sheet	March 31, 2019		September 30, 2018
Current Assets	$	351,018	$	309,869
Other Assets	270,583		268,900
Current Liabilities	243,970		199,683
Long-term Debt	72,429		63,535
Members’ Equity	305,202		315,550
	Three Months Ended March 31,				Six Months Ended March 31,
Income Statement	2019		2018		2019		2018
Revenue	$	190,004	$	163,229	$	368,827	$	336,620
Gross Profit	9,490		14,379		13,706		27,463
Net Income	7,257		12,291		6,799		23,175

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

	Three Months Ended April 30,				Six Months Ended April 30,
Equity in Net Income (Loss)	2019		2018		2019		2018
Absolute Energy	$	30	$	435	$	238	$	879
Guardian Energy	—		1,172		—		1,172
Homeland Energy Solutions	386		413		220		407
Other	23		36		142		11
Total	$	439	$	2,056	$	600	$	2,469

15

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

Forward Looking Statements

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

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

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

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

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

• The impact of the ethanol export and import markets;

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

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

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

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

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

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

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

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

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

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

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

• Changes and advances in ethanol production technology;

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

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

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

Overview

Golden Grain Energy, LLC was formed as an Iowa limited liability company on March 18, 2002, for the purpose of constructing, owning and operating a fuel-grade ethanol plant near Mason City in north central Iowa. Since December 2004, we have been engaged in the production of ethanol and distiller grains at the plant and have produced corn oil since February 2009. References to "we," "us," "our" and the "Company" refer to Golden Grain Energy, LLC. We have capacity to produce approximately 120 million gallons of ethanol per year.

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

16

On November 19, 2018, our board of directors declared a distribution of $0.25 per membership unit for members of record as of November 19, 2018. The total amount of the distribution was $4,968,250 which was paid in December 2018.

Results of Operations

Comparison of the Three Months Ended April 30, 2019 and 2018

The following table shows the results of our operations and the percentage of revenues, cost of goods sold, operating expenses and other items to total revenues in our statement of operations for the three months ended April 30, 2019 and 2018:

	2019			2018
Income Statement Data	Amount		%	Amount		%
Revenues	$	49,608,660	100.0	$	45,886,524	100.0
Cost of Goods Sold	48,037,936		96.8	43,544,726		94.9
Gross Profit	1,570,724		3.2	2,341,798		5.1
Operating Expenses	977,124		2.0	1,082,114		2.4
Operating Income	593,600		1.2	1,259,684		2.7
Other Income	634,841		1.3	2,061,521		4.5
Net Income	$	1,228,441	2.5	$	3,321,205	7.2

Revenues. Our total revenue was higher for our second quarter of 2019 compared to the same period of 2018 due to the higher quantities of ethanol sold. In addition, we received lower ethanol prices offset by higher distiller grain and corn oil prices for our second quarter of 2019 compared to the same period of 2018. For our second quarter of 2019, ethanol sales accounted for approximately 78% of our total revenue, distiller grains sales accounted for approximately 18% of our total revenue, and corn oil sales accounted for approximately 4% of our total revenue. For our second quarter of 2018, ethanol sales accounted for approximately 79% of our total revenue, distiller grains sales accounted for approximately 17% of our total revenue, and corn oil sales accounted for approximately 4% of our total revenue.

The average price per gallon we received for our ethanol was approximately 8% lower for our second quarter of 2019 compared to the same period of 2018. Management attributes this decrease in the average price we received for our ethanol to higher ethanol supplies and lower demand. Uncertainty existed throughout our 2018 and 2019 fiscal years related to whether the EPA would grant additional Small Refiner Exemption Waivers (SRE) as part of the Renewable Fuels Standard (RFS). If SRE waivers continue to be granted and ethanol supplies remain greater than ethanol demand, it could negatively impact ethanol prices and could negatively impact our profitability for the remaining quarters of 2019 and beyond.

We sold approximately 17% more gallons of ethanol during our second quarter of 2019 compared to the same period of 2018. Management attributes this increase in ethanol sales with timing of ethanol shipments in addition to increased production levels during 2019. During our second quarter of 2018 we produced non-US grade spec ethanol which lowered our production and sales levels. Our total ethanol production was 6% more during our second quarter of 2019 as compared to the same period of 2018. Management anticipates that our ethanol sales and production will be similar or lower during the remaining quarters of our 2019 fiscal year compared to our 2018 fiscal year unless margins improve in which case production levels could be significantly higher.

During our second quarter of 2019, we experienced combined realized and unrealized gains on our ethanol derivatives of approximately $28,840 which increased our revenue. By comparison, we experienced no ethanol derivative instruments gains and losses during the same period of 2018.

The average price per ton we received for our dried distillers grains was approximately 6% higher for our second quarter of 2019 compared to the same period of 2018. In addition, the average price per ton we received for our modified/wet distillers grains was approximately 8% higher for our second quarter of 2019 compared to the same period of 2018.  Management attributes these higher distiller grains prices to increases in corn costs as well as global protein markets, specifically in soybean meal, and increasing domestic livestock production during the last several months. Distiller grains are typically used as a feed substitute for corn. Management anticipates distiller grains prices will remain steady unless China reenters the distillers grains market which could result in a significant increase in distiller grains demand.

Our dried distiller grains production increased by approximately 3% during our second quarter of 2019 compared to the same period of 2018. Management attributes this increase to higher ethanol production during the period. Management anticipates

17

distiller grains production to be proportionate to ethanol production, which may or may not be higher for the remaining quarters of 2019.

We sold approximately 2% fewer pounds of corn oil during our second quarter of 2019 compared to the same period of 2018. This decrease in corn oil sales resulted from reliability and mechanical downtime of our corn oil machines. The average price per pound we received for our corn oil was approximately 8% more for our second quarter of 2019 compared to the same period of 2018. This increase in corn oil prices occurred due to an increase in demand for corn oil. Management anticipates that corn oil prices will be steady during the remaining quarters of our 2019 fiscal year.

Cost of Goods Sold. Our cost of goods sold was higher for our second quarter of 2019 compared to the same period of 2018 due primarily to an increase in the amount of corn ground due to an increase in ethanol production during the 2019 period.  Our average cost per bushel of corn was approximately 2% higher during our second quarter of 2019 compared to the same period of 2018.  Management anticipates that global corn supplies will remain favorable during the remaining quarters of our 2019 fiscal year with tighter local supplies. These prices could be impacted by the amount of corn which is planted during 2019 which could result in higher corn prices later in our 2019 fiscal year. In addition, continued trade policy and tariffs may impact the corn market and changes in those policies may have a significant impact on the price of corn. Subsequent to the end of the second quarter of 2019, corn volatility and prices have increased as corn planting delays have been wide spread due to unseasonably wet weather patterns.

We consumed approximately 4% more bushels of corn during our second quarter of 2019 compared to the same period of 2018 due to increased ethanol production. Management anticipates consistent corn consumption during the remaining quarters of our 2019 fiscal year, provided that we can maintain positive operating margins that allow us to continue to operate the ethanol plant at capacity.

Our natural gas costs increased by approximately 6% during our second quarter of 2019 compared to the same period of 2018. Our usage was 4% higher, and the average price we paid per MMBtu of natural gas was approximately 2% higher during our second quarter of 2019 compared to the same period of 2018. Management attributes this increase in natural gas costs with higher ethanol production. We expect stable natural gas prices during the remaining quarters of our 2019 fiscal year due to current supply levels and derivative positions of natural gas.

We experienced combined realized and unrealized gains of approximately $50,000 for our second quarter of 2019 related to our corn and natural gas derivative instruments which decreased our cost of goods sold. By comparison, we experienced approximately $1,093,000 of combined realized and unrealized loss for the same period of 2018 related to our corn and natural gas derivative instruments which increased our cost of goods sold. We recognize the gains or losses that result from the changes in the value of our derivative instruments from corn and natural gas in cost of goods sold as the changes occur.  As corn and natural gas prices fluctuate, the value of our derivative instruments is impacted, which affects our financial performance.

Operating Expenses. Our operating expenses were lower during our second quarter of 2019 compared to the same period of 2018 due to decreased professional fees and timing of dues to trade organizations. Management anticipates that our operating expenses will be similar during the remaining quarters of our 2019 fiscal year compared to our 2018 fiscal year.

Other Income (Expense). Other income was lower for our second quarter of 2019 compared to the same period of 2018, due primarily to a decrease in equity income from investments partially offset by an increase in unrealized earning from marketable securities. Management anticipates decreased income from our investments during our 2019 fiscal year compared to our 2018 fiscal year due to current market factors. Our investments are in other companies involved in the ethanol industry which, in general, experienced slightly less favorable operating margins during our second quarter of 2019 as compared to the same quarter of 2018.

Comparison of the Six Months Ended April 30, 2019 and 2018

The following table shows the results of our operations and the percentage of revenues, cost of goods sold, operating expenses and other items to total revenues in our statement of operations for the six months ended April 30, 2019 and 2018:

18

	2019					2018
Income Statement Data	Amount			%		Amount		%
Revenues	$	95,805,037		100.0		$	93,365,567	100.0
Cost of Goods Sold	94,855,579			99.0		90,962,912		97.4
Gross Profit	949,458			1.0		2,402,655		2.6
Operating Expenses	1,948,520			2.0		2,130,150		2.3
Operating Income (Loss)	(999,062		)	(1.0	)	272,505		0.3
Other Income	1,048,232			1.1		1,731,202		1.9
Net Income	$	49,170		0.1		$	2,003,707	2.1

Revenues. Our total revenue was higher for our six months ended April 30, 2019 compared to the same period of 2018 due to the higher quantities of ethanol sold. In addition, we received lower ethanol prices offset by higher distiller grain prices for our six months ended April 30, 2019 compared to the same period of 2018. For our six months ended April 30, 2019, ethanol sales accounted for approximately 77% of our total revenue, distiller grains sales accounted for approximately 19% of our total revenue, and corn oil sales accounted for approximately 4% of our total revenue. For our six months ended April 30, 2018, ethanol sales accounted for approximately 79% of our total revenue, distiller grains sales accounted for approximately 17% of our total revenue, and corn oil sales accounted for approximately 4% of our total revenue.

The average price per gallon we received for our ethanol was approximately 8% lower for our six months ended April 30, 2019 compared to the same period of 2018. Management attributes this decrease in the average price we received for our ethanol to higher ethanol supplies and lower demand. Uncertainty existed throughout our 2018 and 2019 fiscal years related to whether the EPA would grant additional Small Refiner Exemption Waivers (SRE) as part of the Renewable Fuels Standard (RFS). If SRE waivers continue and ethanol supplies remain greater than ethanol demand, it could negatively impact ethanol prices and could negatively impact our profitability for the remaining quarters of 2019 and beyond.

We sold approximately 6% more gallons of ethanol during our six months ended April 30, 2019 compared to the same period of 2018. Management attributes this increase in ethanol sales with increased production levels due to producing non-US grade spec of ethanol which lowered our production and sales levels during 2018. Our total ethanol production was 2% more during our six months ended April 30, 2019 as compared to the same period of 2018. Management anticipates that our ethanol sales and production will be similar or lower during the remaining quarters of our 2019 fiscal year compared to our 2018 fiscal year unless margins improve in which case production levels could be significantly higher.

During our six months ended April 30, 2019, we experienced combined realized and unrealized gains on our ethanol derivatives of approximately $200,000 which increased our revenue. By comparison, we experienced no ethanol derivative instruments gains and losses during the same period of 2018.

The average price per ton we received for our dried distillers grains was approximately 15% higher for our six months ended April 30, 2019 compared to the same period of 2018. In addition, the average price per ton we received for our modified/wet distillers grains was approximately 21% higher for our six months ended April 30, 2019 compared to the same period of 2018. Management attributes these higher distiller grains prices to increases in corn prices, global protein markets, specifically in soybean meal, and increasing domestic livestock production during the last several months. Distiller grains are typically used as a feed substitute for corn. Management anticipates distiller grains prices will remain steady unless China reenters the distillers grains market which could result in a significant increase in distiller grains demand.

Our dried distiller grains production was steady during our six months ended April 30, 2019 compared to the same period of 2018. Management anticipates distiller grains production to be proportionate to ethanol production, which may or may not be higher for the remaining quarters of 2019.

We sold approximately 9% fewer pounds of corn oil during our six months ended April 30, 2019 compared to the same period of 2018. This decrease in corn oil sales resulted from reduced amount of oil extracted per bushels of corn processed. The average price per pound we received for our corn oil was approximately 2% more for our six months ended April 30, 2019 compared to the same period of 2018. This increase in corn oil prices occurred due to an increase in demand for corn oil. Management anticipates that corn oil prices will be steady during the remaining quarters of our 2019 fiscal year.

Cost of Goods Sold. Our cost of goods sold was higher for our six months ended April 30, 2019 compared to the same period of 2018 due primarily to an increase in the amount of corn ground due to an increase in ethanol production during the 2019 period offset by a decrease in natural gas costs.  Our average cost per bushel of corn was approximately 5% higher during our six

19

months ended April 30, 2019 compared to the same period of 2018.  Management anticipates that global corn supplies will remain favorable during the remaining quarters of our 2019 fiscal year with tighter local supplies. These prices could be impacted by the amount of corn which is planted during 2019 which could result in higher corn prices later in our 2019 fiscal year. In addition, continued trade policy and tariffs may impact the corn market and changes in those policies may have a significant impact on the price of corn. More recently, 2019 planting delays have been wide spread due to unseasonably wet weather patterns which is causing corn volitility and price increases which may impact the remaining quarters of our 2019 fiscal year.

We consumed a similar amount of bushels of corn during our six months ended April 30, 2019 compared to the same period of 2018 despite increased ethanol production due to increased efficiencies of converting corn into ethanol. Management anticipates consistent corn consumption during the remaining quarters of our 2019 fiscal year, provided that we can maintain positive operating margins that allow us to continue to operate the ethanol plant at capacity.

Our natural gas costs decreased by approximately 9% during our six months ended April 30, 2019 compared to the same period of 2018. Our usage was 3% higher, and the average price we paid per MMBtu of natural gas was approximately 11% lower during our six months ended April 30, 2019 compared to the same period of 2018. Management attributes this increase in natural gas usage to increased ethanol production rate. We expect stable natural gas prices during the remaining quarters of our 2019 fiscal year due to current supply levels of natural gas and derivative positions. Further, if we experience a supply disruption during our 2019 fiscal year, it may lead to significantly higher natural gas costs for the amount of gas we use that is not covered by risk management practices.

We experienced combined realized and unrealized gains of approximately $260,000 for our six months ended April 30, 2019 related to our corn and natural gas derivative instruments which decreased our cost of goods sold. By comparison, we experienced approximately $894,000 of combined realized and unrealized loss for the same period of 2018 related to our corn and natural gas derivative instruments which increased our cost of goods sold. We recognize the gains or losses that result from the changes in the value of our derivative instruments from corn and natural gas in cost of goods sold as the changes occur.  As corn and natural gas prices fluctuate, the value of our derivative instruments is impacted, which affects our financial performance.

Operating Expenses. Our operating expenses were lower during our six months ended April 30, 2019 compared to the same period of 2018 due to decreased personnel expenses and dues to industry trade groups partially offset by increases in technology and property taxes. Management anticipates that our operating expenses will be similar during the remaining quarters of our 2019 fiscal year compared to our 2018 fiscal year.

Other Income (Expense). Other income was lower for our six months ended April 30, 2019 compared to the same period of 2018, due primarily to a decrease in equity income from investments. We wrote off the value of our note receivable due from Golden Renewable Energy, LLC which equaled approximately $599,000 during the first quarter of 2018. Management anticipates decreased income from our investments during our 2019 fiscal year compared to our 2018 fiscal year due to current market factors. Our investments are in other companies involved in the ethanol industry which, in general, experienced slightly less favorable operating margins during our six months ended April 30, 2019 as compared to the same quarter of 2018.

Changes in Financial Condition for the Six Months Ended April 30, 2019

Current Assets. We had less cash and equivalents and marketable securities at April 30, 2019 compared to October 31, 2018. This decrease in our cash and marketable security position is due primarily to nearly $5 million in distributions we paid to our members during December 2018 and approximately $6.6 million of cash used for capital projects. The value of our other receivables is lower at April 30, 2019 compared to October 31, 2018 due to funds received from an insurance claim.

Property and Equipment. The net value of our property and equipment was higher at April 30, 2019 compared to October 31, 2018 due to capital projects primarily related to our capacity expansion. We had approximately $1.1 million in construction in progress at April 30, 2019 primarily related to our road and administration building construction.

Other Assets. Our other assets were lower at April 30, 2019 compared to October 31, 2018 due to a decrease in the value of our various investments caused by distributions declared in excess of earnings recorded for the six months ended April 30, 2019.

Current Liabilities. Our current liabilities at April 30, 2019 were higher compared to October 31, 2018 due to timing of payment on accounts payable including payments for corn.

Long-term Liabilities. Our long-term liabilities were similar at April 30, 2019 and October 31, 2018.

20

Liquidity and Capital Resources

Based on financial forecasts performed by our management, we anticipate that we will have sufficient cash from our current credit facilities and cash generated from our operations to continue to operate the ethanol plant at capacity for the next 12 months. However, additional funds may be necessary to fund our plant expansion project or if the current negative margin environment continues for an extended period of time. As of April 30, 2019, we had $10,000,000 available pursuant to our revolving term loan and approximately $17.5 million in cash and equivalents and marketable securities.

We are nearing completion of a multiple phase expansion of the ethanol plant. We have entered into significant agreements or contracts related to the expansion, totaling approximately $22.7 million, and we anticipate the project will cost approximately $23 million, some of which we expect to pay through operating income. The final phase of the expansion to increase capacity by approximately 30 million gallons is currently being reevaluated. However, we may secure additional debt financing, or use existing credit facilities, in the future to pay a portion of the costs associated with the project. Management continually evaluates conditions in the ethanol industry and explores opportunities to improve the efficiency and profitability of our operations which may require additional capital expenditures.

We have a program of investing our excess cash in short-term liquid investments which allows us to access the cash when we need it and preserve our capital while limiting our loss exposure. Only a portion of our cash balances are federally insured when they are deposited with our bank. As a result, our plan is intended to decrease the risk we face when we were concentrating our cash balances with one financial institution.

The following table shows our cash flows for the six months ended April 30, 2019 and 2018:

	Six Months Ended April 30,
	2019			2018
Net cash provided by operating activities	$	5,551,858		$	6,713,409
Net cash provided by (used in) investing activities	994,976			(5,878,575		)
Net cash (used in) financing activities	(1,699,845		)	(14,819,085		)

Cash Flow From Operations

Our cash flows from operations for the six months ended April 30, 2019 were lower compared to the same period of 2018 due primarily to lower net income and changes in working capital components.

Cash Flow From Investing Activities

We used less cash for investing activities during our six months ended April 30, 2019 compared to the same period of 2018 primarily due to an increase in proceeds from the sale of marketable securities in addition to a decrease in capital expenditures. Our capital expenditures during the 2019 and 2018 fiscal years were primarily for plant improvements associated with the expansion of production and construction of a new road and administration building.

Cash Flow From Financing Activities.

During our six months ended April 30, 2019, we used less cash for financing activities due to less distributions being paid in 2019 as compared to the same period of 2018. In addition, we also received an insurance payment during our six months ended April 30, 2019 consisting primarily of equipment repair costs, professional fees and loss of business income from a property and business interruption insurance claims filed in July 2018.

Short-Term and Long-Term Debt Sources

In exchange for our credit facility with Farm Credit, we executed a mortgage in favor of Farm Credit covering all of our real property and granted Farm Credit a security interest in all of our equipment and other assets. In the event we default on our loans with Farm Credit, Farm Credit may foreclose on our assets, including both our real property and our machinery and equipment.

21

Variable Line of Credit

We have a long-term line of credit. Interest on this loan accrues at 3.15% above the One-Month London Interbank Offered Rate (LIBOR). The interest rate is subject to weekly adjustment. We may elect to enter into a fixed interest rate on this loan at various times throughout the term of the loan as provided in the loan agreements. During the first fiscal quarter of 2016, we executed an amendment to our credit agreements with Farm Credit which adjusted our loan covenants related to issuing distributions to our members and changed the terms of our revolving line of credit. We have $10 million available pursuant to this long-term revolving line of credit until it matures on February 1, 2020. We agreed to pay an annual fee of 0.5% of the unused portion of this loan. As of April 30, 2019, we had $0 outstanding on this loan with a potential accrued interest rate of 5.58% per year. As of April 30, 2019, we had $10,000,000 available to be drawn on this loan.

Administrative Agency Agreement

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

Covenants

Our credit agreements with Farm Credit are subject to numerous covenants requiring us to maintain various financial ratios. As of April 30, 2019, we were in compliance with all of our loan covenants with Farm Credit. Based on current management projections, we anticipate that we will be in compliance with our loan covenants for the next 12 months and beyond.

Grants and Government Programs

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

Critical Accounting Policies

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

Revenue Recognition

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

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

22

All revenue recognized in the income statement is considered to be revenue from contracts with customers. The disaggregation of revenue according to product line, along with accounts receivable from contracts with customers. Shipping costs we incurred in the sale of ethanol, distiller grains and corn oil are not specifically identifiable and as a result, revenue from the sale of ethanol, distiller grains and corn oil are recorded based on the net selling price reported to the Company from its marketer. Railcar lease costs we incurred in the sale and shipment of distiller grain products are included in cost of goods sold.

Investment in Commodities Contracts, Derivative Instruments and Hedging Activities

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

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

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

Investments

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

Off-Balance Sheet Arrangements.

We currently have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to the impact of market fluctuations associated with commodity prices as discussed below. We have no exposure to interest rate changes as we did not have any amounts outstanding on our variable interest rate loans as of April 30, 2019. We have no exposure to foreign currency risk as all of our business is conducted in U.S. Dollars. We use derivative financial instruments as part of an overall strategy to manage market risk. We use cash, futures and option contracts to hedge changes to the commodity prices of corn, natural gas and ethanol. We do not enter into these derivative financial instruments for trading or speculative purposes, nor do we designate these contracts as hedges for accounting purposes.

Commodity Price Risk

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

23

As of April 30, 2019, we had price protection in place for approximately 14% of our anticipated corn needs, 80% of our natural gas needs and 6% of our ethanol sales for the next 12 months and approximately 28% of our natural gas needs for the next 24 months.

A sensitivity analysis has been prepared to estimate our exposure to ethanol, corn and natural gas price risk. Market risk related to these factors is estimated as the potential change in income resulting from a hypothetical 10% adverse change in the average cost of our corn and natural gas prices and average ethanol price as of April 30, 2019, net of the forward and future contracts used to hedge our market risk for corn and natural gas usage requirements. The volumes are based on our expected use and sale of these commodities for a one year period from April 30, 2019. The results of this analysis, which may differ from actual results, are as follows:

	Estimated Volume Requirements for the next 12 months (net of forward and futures contracts)	Unit of Measure	Hypothetical Adverse Change in Price	Approximate Adverse Change to Income
Natural Gas	606,000	MMBTU	10%	$	181,000
Ethanol	113,280,000	Gallons	10%	13,956,000
Corn	34,464,000	Bushels	10%	12,314,000

Item 4.  Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our Executive Vice President and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures.

Our management, including our Executive Vice President (the principal executive officer), Curtis Strong, along with our Chief Financial Officer (the principal financial officer), Christine Marchand, have reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of April 30, 2019.  Based on this review and evaluation, these officers have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods required by the forms and rules of the Securities and Exchange Commission; and to ensure that the information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

For the fiscal quarter ended April 30, 2019, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

There has not been any material change to the risk factors previously disclosed in our annual report on Form 10-K for the fiscal year ended October 31, 2018.

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

None.

Item 3. Defaults Upon Senior Securities

None.

24

Item 4.Mine Safety Disclosures.

None.

Item 5.Other Information

None.

Item 6. Exhibits.

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

Exhibit No.	Exhibit
31.1	Certificate Pursuant to 17 CFR 240.13a-14(a)*
31.2	Certificate Pursuant to 17 CFR 240.13a-14(a)*
32.1	Certificate Pursuant to 18 U.S.C. Section 1350*
32.2	Certificate Pursuant to 18 U.S.C. Section 1350*
101	The following financial information from Golden Grain Energy, LLC's Quarterly Report on Form 10-Q for the quarter ended April 30, 2019, formatted in XBRL (eXtensible Business Reporting Language): (i) Balance Sheets as of April 30, 2019 and October 31, 2018, (ii) Statements of Operations for the three and six months ended April 30, 2019 and 2018, (iii) Statements of Cash Flows for the three and six months ended April 30, 2019 and 2018, and (iv) the Notes to Condensed Financial Statements.**

*    Filed herewith.

**    Furnished herewith.

25

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		GOLDEN GRAIN ENERGY, LLC
Date:	June 14, 2019	/s/ Curtis Strong
		Curtis Strong
		Executive Vice-President
		(Principal Executive Officer)
Date:	June 14, 2019	/s/ Christine Marchand
		Christine Marchand
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

26