Commitments and Contingencies

6 Months Ended

Apr. 30, 2017

Commitments and Contingencies [Abstract]

Commitments and Contingencies

9.   COMMITMENTS AND CONTINGENCIES

Corn Storage and Grain Handling Agreement and Purchase Commitments

GFE has a corn storage and grain handling agreement with Farmers Cooperative Elevator Company (FCE), a member. Under the agreement, GFE agrees to purchase all of the corn needed for the operation of the plant from FCE. The price of the corn purchased will be the bid price the member establishes for the plant plus a set fee per bushel. 

On February 27, 2017, GFE and FCE executed an amendment to the corn storage and grain handling agreement with an effective date of February 21, 2017. Pursuant to the terms of the amendment, the parties agreed to amend their corn storage and grain handling agreement to accelerate the termination date of the agreement to midnight August 31, 2017.  Additionally, GFE may begin posting bids for the purchase of corn beginning June 1, 2017 and thereafter, but may not accept delivery of corn at its Granite Falls, Minnesota plant until September 1, 2017.  In exchange for the early termination, GFE agreed to pay an early termination fee to FCE of approximately $255,000 on or before August 31, 2017, which is included as a component of corn payable to FCE within the condensed consolidated balance sheets at April 30, 2017. Prior to the amendment, the termination date of the corn storage and grain handling agreement was set to expire on November 2017.

At April 30, 2017, GFE had no forward corn contracts.

At April 30, 2017, HBLE had cash and basis contracts for forward corn purchase commitments for approximately 6,653,000 bushels for delivery periods through March 2018.

HLBE Corn Purchases - Members

HLBE purchased corn from board members of approximately $2,569,000 and $2,990,000 for the three months ended April 30, 2017 and 2016, respectively, and approximately $5,594,000 and $8,636,000 for the six months ended April 30, 2017 and 2016, respectively.

Ethanol Contracts

At April 30, 2017, GFE had fixed and basis contracts to sell approximately $14,000,000 of ethanol for various delivery periods through June 2017.

At April 30, 2017, HLBE had fixed and basis contracts to sell approximately $13,810,000 of ethanol for various delivery periods through June 2017.

Distillers' Grain Contracts

At April 30, 2017, GFE had forward contracts to sell approximately $852,000 of distillers' grain for deliveries through May 2017.

At April 30, 2017, HLBE had forward contracts to sell approximately $137,000 of distillers' grains for delivery through May 2017.

Corn Oil

At April 30, 2017, GFE had forward contracts to sell approximately $275,000 of corn oil for delivery through May 2017.

At April 30, 2017, HLBE had forward contracts to sell approximately $379,000 of corn oil for delivery through June 2017.