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INVENTORY

3 Months Ended

Jan. 31, 2012

6. INVENTORY

Inventory consisted of the following at January 31, 2012 and October 31, 2011:

		January 31,			October 31,
		2012			2011 *
Raw materials		$	613,215		$	593,761
Work in process		1,165,940			978,967
Supplies		846,269			840,756
Other grains		1,387,352			1,351,132
Total		$	4,012,776		$	3,764,616

* Derived from audited financial statements

The Company recorded no losses related to inventory for both the three months ended January 31, 2012, and January 31, 2011, respectively. For the three months ended January 31, 2011, the Company recorded losses related to forward purchase contracts, where the market value was less than the cost basis, attributable primarily to decreases in market prices of corn and ethanol, the loss was recorded with the lower of cost or market adjustment in the statement of operations. In addition, the Company stored grain inventory for farmers. The value of these inventories owned by others is approximately $104,000 and $105,000 based on market prices at January 31, 2012 and October 31, 2011, respectively, and is not included in the amounts above.

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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