10-Q

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	June 30, 2023
	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:	000-52033

RED TRAIL ENERGY, LLC

(Exact name of registrant as specified in its charter)

North Dakota	76-0742311
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3682 Highway 8 South, P.O. Box 11, Richardton, ND 58652

(Address of principal executive offices)

(701) 974-3308

(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

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	o	Accelerated Filer	o
Non-Accelerated Filer	x	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 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 August 14, 2023, there were 40,148,160 Class A Membership Units issued and outstanding.

1

INDEX

	Page Number
PART I. FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3. Quantitative and Qualitative Disclosures about Market Risk	24
Item 4. Controls and Procedures	26
PART II. OTHER INFORMATION	26
Item 1. Legal Proceedings	26
Item 1A. Risk Factors	26
Item 2. Unregistered Sales of Equity Securities	26
Item 3. Defaults Upon Senior Securities	26
Item 4. Mine Safety Disclosures	27
Item 5. Other Information	27
Item 6. Exhibits	27
SIGNATURES	28

2

PART I.        FINANCIAL INFORMATION

Item 1. Financial Statements

RED TRAIL ENERGY, LLC

Condensed Balance Sheets

ASSETS	June 30, 2023		September 30, 2022
	(Unaudited)
Current Assets
Cash and equivalents	$	6,022,687	$	6,366,990
Restricted cash - margin account	2,710,413		4,785,025
Accounts receivable, net, primarily related party	7,657,890		4,879,011
Inventory	15,030,571		12,544,033
Prepaid expenses	774,624		512,770
Total current assets	32,196,185		29,087,829
Property, Plant and Equipment
Land	1,333,681		1,333,681
Land improvements	17,662,538		17,662,538
Buildings	15,320,492		14,930,003
Plant and equipment	121,464,181		121,465,514
Construction in progress	2,460,066		1,191,290
	158,240,958		156,583,026
Less accumulated depreciation	81,633,867		77,104,977
Net property, plant and equipment	76,607,091		79,478,049
Other Assets
Right of use operating lease assets, net	1,906,122		405,631
Investment in RPMG	940,642		605,000
Patronage equity	5,348,618		5,399,515
Deposits	40,000		40,000
Total other assets	8,235,382		6,450,146
Total Assets	$	117,038,658	$	115,016,024

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

3

RED TRAIL ENERGY, LLC

Condensed Balance Sheets

LIABILITIES AND MEMBERS' EQUITY	June 30, 2023		September 30, 2022
	(Unaudited)
Current Liabilities
Accounts payable	7,936,111		6,885,442
Accrued expenses	2,799,582		1,531,123
Distribution payable	2,007,408		—
Commodities derivative instruments, at fair value (see note 3)	151,706		1,162,273
Accrued loss on firm purchase commitments (see notes 4 and 8)	428,000		9,000
Customer deposits	46,593		10,636
Current maturities of notes payable	2,560,714		18,751,634
Current portion of operating lease liabilities	342,538		271,968
Total current liabilities	16,272,652		28,622,076
Long-Term Liabilities
Notes payable	20,189,931		419,150
Long-term operating lease liabilities	1,563,583		133,663
Total long-term liabilities	21,753,514		552,813
Commitments and Contingencies (Notes 4, 5, 7 and 8)
Members’ Equity 40,148,160 Class A Membership Units issued and outstanding	79,012,492		85,841,135
Total Liabilities and Members’ Equity	$	117,038,658	$	115,016,024

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

4

RED TRAIL ENERGY, LLC

Condensed Statements of Operations (Unaudited)

	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Revenues, primarily related party	$	49,690,760	$	55,720,460	$	148,820,593	$	168,225,436
Cost of Goods Sold
Cost of goods sold	47,967,330		49,139,917		142,207,229		137,960,322
Lower of cost or net realizable value adjustment	—		53,953		74,000		53,953
Loss on firm purchase commitments	71,000		89,000		535,000		885,000
Total Cost of Goods Sold	48,038,330		49,282,870		142,816,229		138,899,275
Gross Profit	1,652,430		6,437,590		6,004,364		29,326,161
General and Administrative Expenses	1,310,476		798,990		4,098,939		2,556,029
Operating Income	341,954		5,638,600		1,905,425		26,770,132
Other Income (Expense)
Interest income	14,953		21,154		44,978		57,684
Other income (expense), net	43,625		4,265,190		70,471		6,923,733
Interest (expense)	(264,282)		(3,872)		(818,859)		(19,927)
Total other income (expense), net	(205,704)		4,282,472		(703,410)		6,961,490
Net Income	$	136,250	$	9,921,072	$	1,202,015	$	33,731,622
Weighted Average Units Outstanding
Basic	40,148,160		40,148,160		40,148,160		40,148,160
Diluted	40,148,160		40,148,160		40,148,160		40,148,160
Net Income Per Unit
Basic	$	—	$	0.25	$	0.03	$	0.84
Diluted	$	—	$	0.25	$	0.03	$	0.84

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

5

RED TRAIL ENERGY, LLC

Condensed Statements of Cash Flows (Unaudited)

	Nine Months Ended		Nine Months Ended
	June 30, 2023		June 30, 2022
Cash Flows from Operating Activities
Net income	$	1,202,015	$	33,731,622
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,745,508		3,318,035
Loss on disposal of fixed assets	9,759		—
Change in fair value of derivative instruments	(1,010,567)		963,925
Lower of cost of net realizable value adjustment	74,000		53,953
Loss on firm purchase commitments	535,000		885,000
Noncash patronage equity	50,897		—
Loan forgiveness	—		(2,650,773)
Accounts receivable, net, primarily related party	(2,778,879)		(2,324,801)
Inventory	(3,095,539)		(4,426,922)
Prepaid expenses	(261,853)		(144,305)
Customer deposits	35,957		2,952
Accounts payable	1,050,669		(299,821)
Accrued expenses	1,268,459		(373,345)
Accrued loss on firm purchase commitments	419,000		885,000
Net cash provided by operating activities	2,244,426		29,620,520
Cash Flows from Investing Activities
Investment in RPMG	(335,642)		—
Proceeds from disposal of fixed assets	33,000		—
Capital expenditures	(1,917,310)		(17,763,824)
Net cash used in investing activities	(2,219,952)		(17,763,824)
Cash Flows from Financing Activities
Distribution Paid	(6,023,250)		(9,635,404)
Disbursements in excess of bank balances	—		(1,343,608)
Proceeds from notes payable	7,000,000		18,000,000
Debt repayments	(3,420,139)		(591,268)
Net cash (used for) provided by financing activities	(2,443,389)		6,429,720
Net Change in Cash, Cash Equivalents and Restricted Cash	(2,418,915)		18,286,416
Cash, Cash Equivalents and Restricted Cash - Beginning of Period	11,152,015		5,215,244
Cash, Cash Equivalents and Restricted Cash - End of Period	$	8,733,100	$	23,501,660
Reconciliation of Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents	$	6,022,687	$	19,122,569
Restricted cash	2,710,413		4,379,091
Total Cash, Cash Equivalents and Restricted Cash	$	8,733,100	$	23,501,660
Supplemental Disclosure of Cash Flow Information
Interest paid	$	437,438	$	54,427
Noncash Investing and Financing Activities
Operating lease asset acquired	$	1,620,653	$	—
Distribution payable	$	2,007,408	$	—
Capital expenditures in accounts payable			$	108,572

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

6

RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED JUNE 30, 2023

The accompanying condensed unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote 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 fiscal year ended September 30, 2022, contained in the Company's Annual Report on Form 10-K.

In the opinion of management, the interim condensed unaudited financial statements reflect all adjustments considered necessary for fair presentation. The adjustments made to these statements consist only of normal recurring adjustments. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2023.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Red Trail Energy, LLC, a North Dakota limited liability company (the “Company”), owns and operates a 50 million gallon annual name-plate production ethanol plant near Richardton, North Dakota (the “Plant”).

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. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, inventory, and allowance for doubtful accounts. Actual results could differ from those estimates.

Net Income Per Unit

Net income per unit is calculated on a basic and fully diluted basis using the weighted average units outstanding during the period.

2. REVENUE

Revenue Recognition

The Company recognizes revenue from sales of ethanol and co-products at the point in time when the performance obligations in the contract are met, which is when the customer obtains control of such products and typically occurs upon shipment (depending on the terms of the underlying contracts). Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. In some instances, the Company enters into contracts with customers that contain multiple performance obligations to deliver specified volumes of co-products over a contractual period of less than 12 months. In such instances, the Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices and recognizes the related revenue when control of each individual product is transferred to the customer in satisfaction of the corresponding performance obligation.

Revenue by Source

The following table disaggregates revenue by major source for the three and nine months ended June 30, 2023 and 2022.

7

RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED JUNE 30, 2023

Revenues	For the three months ended June 30, 2023 (unaudited)		For the three months ended June 30, 2022 (unaudited)		For the nine months ended June 30, 2023 (unaudited)		For the nine months ended June 30, 2022 (unaudited)
Ethanol, E85 and Industrial Alcohol	$	38,727,252	$	41,848,981	$	111,546,165	$	129,429,510
Distillers Grains	8,572,529		10,210,240		28,780,739		28,377,801
Syrup	140,032		412,504		512,350		1,335,627
Corn Oil	2,208,059		3,215,625		7,831,189		8,940,871
Other	42,888		33,110		150,149		141,627
Total revenue from contracts with customers	$	49,690,760	$	55,720,460	$	148,820,592	$	168,225,436

Shipping and Handling Costs

We account for shipping and handling activities related to contracts with customers as costs to fulfill our promises to transfer the associated products. Accordingly, we record customer payments associated with shipping and handling costs as a component of revenue and classify such costs as a component of cost of goods sold.

Customer Deposits

Customer deposits are contract liabilities for payments in excess of revenue recognized. Customer deposits are recognized when modified distillers grains customers make prepayments on their contracts. The ending balances for accounts receivable and customer deposits were as follows for the nine months ended June 30, 2023 and June 30, 2022.

	October 1, 2022		October 1, 2021		For the period ended June 30, 2023 (unaudited)		For the period ended June 30, 2022 (unaudited)
Accounts receivable	$	4,879,011	$	1,468,521	$	7,657,890	$	3,793,322
Customer deposits	10,636		11,008		46,593		13,960

3. DERIVATIVE INSTRUMENTS

Commodity Contracts

As part of its hedging strategy, the Company may enter into ethanol, soybean, soybean oil, natural gas and corn commodity-based derivatives in order to protect cash flows from fluctuations caused by volatility in commodity prices in order to protect gross profit margins from potentially adverse effects of market and price volatility on ethanol sales, corn oil sales, and corn purchase commitments where the prices are set at a future date. These derivatives are not designated as effective hedges for accounting purposes. For derivative instruments that are not accounted for as hedges, or for the ineffective portions of qualifying hedges, the change in fair market value is recorded through earnings in the period of change. Ethanol derivative fair market value gains or losses are included in the results of operations and are classified as revenue, and corn derivative changes in fair market value are included in cost of goods sold.

As of:	June 30, 2023 (unaudited)					September 30, 2022
Contract Type	# of Contracts	Notional Amount (Qty)		Fair Value		# of Contracts	Notional Amount (Qty)		Fair Value
Corn options	371	1,855,000	bushels	$	(151,706)	1,080	5,400,000	bushels	$	(1,144,000)
Soybean oil options	—	—	gal	$	—	48	28,800	gal	$	(18,273)
Total fair value				$	(151,706)				$	(1,162,273)
Amounts are combined on the balance sheet - negative numbers represent liabilities

8

RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED JUNE 30, 2023

The following tables provide details regarding the Company's derivative financial instruments at June 30, 2023 and September 30, 2022:

Derivatives not designated as hedging instruments:
Balance Sheet - as of June 30, 2023 (unaudited)	Asset		Liability
Commodity derivative instruments, at fair value	$	—	$	151,706
Total derivatives not designated as hedging instruments for accounting purposes	$	—	$	151,706
Balance Sheet - as of September 30, 2022	Asset		Liability
Commodity derivative instruments, at fair value	$	—	$	1,162,273
Total derivatives not designated as hedging instruments for accounting purposes	$	—	$	1,162,273

Statement of Operations Income/(Expense)	Location of gain (loss) in fair value recognized in income	Amount of gain (loss) recognized in income during the three months ended June 30, 2023 (unaudited)		Amount of gain (loss) recognized in income during the three months ended June 30, 2022 (unaudited)		Amount of gain (loss) recognized in income during the nine months ended June 30, 2023 (unaudited)		Amount of gain (loss) recognized in income during the nine months ended June 30, 2022 (unaudited)
Corn derivative instruments	Cost of Goods Sold	$	675,471	$	373,089	$	987,956	$	1,437,628
Ethanol derivative instruments	Revenue	570		—		21,999		424,770
Natural gas derivative instruments	Cost of Goods Sold	45,610		—		74,000		(107,450)
Total		$	721,651	$	373,089	$	1,083,955	$	1,754,948

4. INVENTORY

Inventory is valued at the lower of cost or net realizable value. Inventory values as of June 30, 2023 and September 30, 2022 were as follows:

	June 30, 2023 (unaudited)		September 30, 2022
Raw materials, including corn, chemicals and supplies	$	9,933,544	$	6,887,201
Work in process	1,657,313		1,340,059
Finished goods, including ethanol and distillers grains	1,603,004		2,702,129
Spare parts	1,836,710		1,614,644
Total inventory	$	15,030,571	$	12,544,033

Lower of cost or net realizable value adjustments for the nine months ended June 30, 2023 and 2022 were as follows:

	For the three months ended June 30, 2023 (unaudited)		For the three months ended June 30, 2022 (unaudited)		For the nine months ended June 30, 2023 (unaudited)		For the nine months ended June 30, 2022 (unaudited)
Loss on firm purchase commitments	$	71,000	$	89,000	$	535,000	$	885,000
Loss on lower of cost or net realizable value adjustment for inventory on hand	$	—	$	53,953	$	74,000	$	53,953
Total loss on lower of cost or net realizable value adjustments	$	71,000	$	142,953	$	609,000	$	938,953

9

RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED JUNE 30, 2023

The Company has entered into forward corn purchase contracts under which it is required to take delivery at the contract price. At the time the contracts were created, the price of the contract approximated market price. Subsequent changes in market conditions could cause the contract prices to become higher or lower than market prices. As of June 30, 2023, the average price of corn purchased under certain fixed price contracts, that had not yet been delivered, was greater than the approximated market price. Based on this information, the Company has an estimated loss on firm purchase commitments of $71,000 and $89,000 for the three months ended June 30, 2023 and 2022, respectively. The Company has $535,000 estimated loss on firm purchase commitments for the nine months ended June 30, 2023 compared to $885,000 estimated loss on firm purchase commitments for the nine months ended June 30, 2022. The loss is recorded in “Loss on firm purchase commitments” on the statement of operations and "Accrued loss on firm purchase commitments" on the balance sheet. The amount of the potential loss was determined by applying a methodology similar to that used in the impairment valuation with respect to inventory. Given the uncertainty of future ethanol prices, future losses on the outstanding purchase commitments could be recorded in future periods.

5. BANK FINANCING

Ethanol Recovery Program

On July 13, 2020, we received a $5.41 million loan through the Bank of North Dakota's Ethanol Recovery Program and Cornerstone Bank ("Cornerstone"). The Ethanol Recovery Program was developed by the North Dakota Ethanol Producers Association and the Bank of North Dakota to use the existing Biofuels Partnership in Assisting Community Expansion ("PACE") program and Value-added Guarantee Loan program to help ethanol production facilities weather the economic challenges caused by the COVID-19 pandemic. Ethanol producers could qualify for up to $15 million of a low interest loan of 1% based on the amount of such producers' annual corn grind. On December 3, 2021 we received forgiveness of $2.65 million of the loan. The forgiveness was recorded as other income. The outstanding balance as of June 30, 2023 was $524,000. The maturity date of the loan is July 13, 2025. The fixed interest rate on June 30, 2023 was 3.75% with an interest rate being bought down through the Bank of North Dakota to 1%.

Revolving Loan

On February 3, 2022 we renewed our $10 million revolving loan (the "Revolving Loan") with Cornerstone. On February 3, 2022 the maturity date was extended to March 31, 2022. On April 8, 2022 the Revolving Loan was renewed. The new maturity date was April 7, 2023. Subsequent to year end the Revolving Loan was renewed and now has a maturity date of April 4, 2024 (see note 12). At June 30, 2023, we had $10 million available under the Revolving Loan. The variable interest rate on June 30, 2023 was 7.250%.

Construction Loans

On January 22, 2020, we entered into a $7 million construction loan (the "First Construction Loan") with Cornerstone. The original maturity date of the Construction Loan was June 1, 2021. On June 3, 2021 we extended the maturity date to February 1, 2022. On April 8, 2022 the Construction Loan was renewed and the maturity date was extended to October 8, 2022. On October 28, 2022, the First Construction Loan was consolidated and replaced with the Consolidated Loan (below).

On February 1, 2021 we entered into a $28 million construction loan (the "Second Construction Loan") with Cornerstone for the carbon capture and storage project. The maturity date of the Second Construction Loan was January 31, 2022. On February 17, 2022 the maturity date was extended to March 15, 2022. On April 8, 2022 we renewed the CCS Construction Loan and the maturity date was extended to October 8, 2022. On October 28, 2022, the Second Construction loan was consolidated and replaced with the Consolidated Loan (below).

On October 28, 2022, we entered into a $25 million loan to replace the First Construction Loan and Second Construction Loan (the "Consolidated Loan"). The maturity date of the Consolidated Loan is January 31, 2032. The fixed interest rate is 4.65%. The outstanding balance as of June 30, 2023, was $22.2 million.

Each of the Company's loans are secured by a lien on substantially all of the assets of the Company.

10

RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED JUNE 30, 2023

Schedule of debt maturities and finance lease liabilities for the twelve months ending June 30	Totals
2023	$	2,560,714
2024	2,135,403
2025	2,229,314
2026	2,335,215
2027	2,446,147
Thereafter	11,043,853
Total	$	22,750,646

6. FAIR VALUE MEASUREMENTS

The following table provides information on those liabilities that are measured at fair value on a recurring basis as of June 30, 2023 and September 30, 2022, respectively.

					Fair Value Measurement Using
	Carrying Amount as of June 30, 2023 (unaudited)		Fair Value as of June 30, 2023 (unaudited)		Level 1		Level 2		Level 3
Liabilities
Commodities derivative instruments	$	151,706	$	151,706	$	151,706	$	—	$	—
Total	$	151,706	$	151,706	$	151,706	$	—	$	—
					Fair Value Measurement Using
	Carrying Amount as of September 30, 2022		Fair Value as of September 30, 2022		Level 1		Level 2		Level 3
Liabilities
Commodities derivative instruments	$	1,162,273	$	1,162,273	$	1,162,273	$	—	$	—
Total	$	1,162,273	$	1,162,273	$	1,162,273	$	—	$	—

The fair value of the corn, ethanol, soybean oil and natural gas derivative instruments is based on quoted market prices in an active market.

7. LEASES

The Company leases railcar and plant equipment. Operating lease right of use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate, unless an implicit rate is readily determinable, as the discount rate for each lease in determining the present value of lease payments. For the nine months ended June 30, 2023, the Company's estimated discount rate was 7.25%. Operating lease expense is recognized on a straight-line basis over the lease term.

The Company determines if an arrangement is a lease or contains a lease at inception. The Company's existing leases have remaining lease terms of approximately one year to seven years, which may include options to extend the leases when it is reasonably certain the Company will exercise those options. At June 30, 2023 the weighted average remaining lease term was six years. The Company does not have lease arrangements with residual value guarantees, sale leaseback terms, or material restrictive covenants. The Company does not have any sublease agreements.

The Company is generally responsible for maintenance, taxes, and utilities for leased equipment. Rent expense for operating leases was approximately $747,000 and $767,000 for the nine months ended June 30, 2023 and 2022, respectively.

11

RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED JUNE 30, 2023

Equipment under financing leases consists of office equipment and plant equipment. At June 30, 2023 and September 30, 2022, equipment under financing leases was as follows:

	June 30, 2023		September 30, 2022
Equipment	$	493,414	$	493,414
Less accumulated amortization	(237,416)		(219,833)
Net equipment under financing lease	$	255,998	$	273,581

At June 30, 2023, the Company had the following minimum commitments, which at inception had non-cancellable terms of more than one year. Amounts shown below are for the 12 month periods ending June 30:

	Operating Leases		Financing Leases
2023	$	342,538	$	4,602
2024	315,817		1,836
2025	337,225
2026	334,921
2027	575,620
Total minimum lease commitments	$	1,906,121	6,438
Less amount representing interest			—
Present value of minimum lease commitments included in notes payable on the balance sheet			$	6,438

8. COMMITMENTS AND CONTINGENCIES

Firm Purchase Commitments for Corn

To ensure an adequate supply of corn to operate the Plant, the Company enters into contracts to purchase corn from local farmers and elevators. At June 30, 2023, the Company had various fixed price contracts for the purchase of approximately 4.8 million bushels of corn. Using the stated contract price for the fixed price contracts, the Company had commitments of approximately $30.9 million related to the 4.8 million bushels under contract.

Water

On April 21, 2015, we entered into a ten-year contract to purchase raw water from Southwest Water Authority in order to meet the Plant's water requirements. Our contract requires us to purchase a minimum of 160 million gallons of water per year. The minimum estimated obligation for this contract is $424,000 per year.

Profit and Cost Sharing Agreement

The Company entered into a Profit and Cost Sharing Agreement with Bismarck Land Company, LLC, which became effective on November 1, 2016. The Profit and Cost Sharing Agreement provides that the Company will share 70% of the net revenue generated by the Company from business activities which are brought to the Company by Bismarck Land Company, LLC and conducted on the real estate purchased from the Bismarck Land Company, LLC. The real estate was initially purchased in exchange for 2 million membership units of the Company at $1.66 per unit. This obligation will terminate ten years after the real estate closing date of October 11, 2016 or after Bismarck Land Company, LLC receives $10 million in proceeds from the agreement. In addition, the Profit and Cost Sharing Agreement provides that the Company will pay Bismarck Land Company, LLC 70% of any net proceeds received by the Company from the sale of the subject real estate if a sale were to occur prior to termination of this obligation in accordance with the $10 million cap or the ten-year term of this obligation. The Company has paid Bismarck Land Company, LLC $1,647,581 as of June 30, 2023.

9. RELATED PARTY TRANSACTIONS

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RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED JUNE 30, 2023

The Company has balances and transactions in the normal course of business with various related parties for the purchase of corn, sale of distillers grains, and sale of ethanol. The related parties include unit holders, members of the board of governors of the Company, and RPMG, Inc. (“RPMG”). Significant related party activity affecting the financial statements is as follows:

	June 30, 2023 (unaudited)		September 30, 2022
Balance Sheet
Accounts receivable	$	6,964,686	$	4,086,689
Accounts payable	1,611,580		60,412
Accrued expenses	—		7,645

	For the three months ended June 30, 2023 (unaudited)		For the three months ended June 30, 2022 (unaudited)		For the nine months ended June 30, 2023 (unaudited)		For the nine months ended June 30, 2022 (unaudited)
Statement of Operations
Revenues	$	47,556,566	$	53,334,537	$	137,492,078	$	155,186,145
Cost of goods sold	674,171		982,595		2,688,422		2,978,410
General and administrative	—		—		39,889		—
Inventory Purchases	$	6,248,650	$	5,672,336	$	26,714,488	$	30,069,765

10. UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS

During volatile market conditions, the Company experiences certain risks and uncertainties, which could have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distillers 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. The Company's operating and financial performance is largely driven by prices at which the Company sells ethanol and distillers grains and by the cost at which it is able to purchase corn for operations. 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, although since 2005 the prices of ethanol and gasoline began a divergence with ethanol, which has generally been selling 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 programs, global political or economic issues, including but not limited to the war in Ukraine and sanctions associated therewith, or global damaging growing conditions, such as plant disease or adverse weather, including drought, increased fertilizer costs as well as global conflicts.

The Company's financial performance is highly dependent on the Federal Renewable Fuels Standard ("RFS"), which requires that a certain amount of renewable fuels must be used each year in the United States. Corn based ethanol, such as the ethanol the Company produces, can be used to meet a portion of the RFS requirement. In November 2013, the EPA issued a proposed rule which would reduce the RFS for 2014, including the RFS requirement related to corn based ethanol. The EPA proposed rule was subject to a comment period which expired in January 2014. On November 30, 2015, the EPA released its final ethanol use requirements for 2014, 2015 and 2016, which were lower than the statutory requirements in the RFS. However, the final RFS for 2017 equaled the statutory requirement which was also the case for the 2018, 2019, 2020, 2021, and 2022 RFS final rules. The final RFS for 2022 was significantly larger than 2021, with a final volume requirement of 20.63 billion gallons and a supplemental standard of .25 billion gallons.

The Company anticipates that the results of operations during the remainder of fiscal year 2023 will continue to be affected by volatility in the commodity markets. The volatility is due to various factors, including uncertainty with respect to the availability and supply of corn, increased demand for grain from global and national markets, speculation in the commodity markets, and demand for corn from the ethanol industry.

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RED TRAIL ENERGY, LLC

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED JUNE 30, 2023

11. MEMBER'S EQUITY

Changes in member's equity for the nine months ended June 30, 2023 and 2022.

	Class A Member Units		Additional Paid in Capital		Accumulated Deficit/Retained Earnings		Treasury Units		Total Member Equity
Balances - September 30, 2022	$	39,044,595	$	75,541	$	46,880,539	$	(159,540)	$	85,841,135
Net income	—		—		1,865,215		—		1,865,215
Balances December 31, 2022	$	39,044,595	$	75,541	$	48,745,754	$	(159,540)	$	87,706,350
Distribution	—		—		(6,024,235)		—		(6,024,235)
Net (loss)	—		—		(799,450)		—		(799,450)
Balances - March 31, 2023	$	39,044,595	$	75,541	$	41,922,069	$	(159,540)	$	80,882,665
Distribution $0.10 per unit	$	—	$	—	$	(2,006,423)	$	—	$	(2,006,423)
Net income	$	—	$	—	$	136,250	$	—	$	136,250
Balances - June 30, 2023	$	39,044,595	$	75,541	$	40,051,896	$	(159,540)	$	79,012,492

	Class A Member Units		Additional Paid in Capital		Accumulated Deficit/Retained Earnings		Treasury Units		Total Member Equity
Balances - September 30, 2021	$	39,044,595	$	75,541	$	31,034,079	$	(159,540)	$	69,994,675
Net income	—		—		19,371,546		—		19,371,546
Balances - December 31, 2021	$	39,044,595	$	75,541	$	50,405,625	$	(159,540)	$	89,366,221
Distribution	—		—		(9,624,072)		—		(9,624,072)
Net income	—		—		4,439,004		—		4,439,004
Balances - March 31, 2022	$	39,044,595	$	75,541	$	45,220,557	$	(159,540)	$	84,181,153
Distribution $0.10 per unit					(4,026,149)				(4,026,149)
Net income	—		—		9,921,072		—		9,921,072
Balances - June 30, 2022	$	39,044,595	$	75,541	$	51,115,480	$	(159,540)	$	90,076,076

12. SUBSEQUENT EVENTS

On July 7th 2023 the Company paid the distribution payable to the shareholders.

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

    We prepared the following discussion and analysis to help you better understand our financial condition, changes in our financial condition, and results of operations for the three and nine month periods ended June 30, 2023, compared to the same periods of the prior fiscal year. This discussion should be read in conjunction with the financial statements, notes and information contained in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2022. Unless otherwise stated, references in this report to particular years, quarters, months, or periods refer to our fiscal years ended in September and the associated quarters, months, or periods of those fiscal years.

Forward Looking Statements

This report contains forward-looking statements that involve future events, our future performance, and our future operations and actions.  In some cases you can identify forward-looking statements by the use of words such as "may," "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. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the following factors:

•Reductions in the corn-based ethanol use requirement in the Federal Renewable Fuels Standard;

•Increased inflation which can have an impact on the costs of our raw materials;

•Higher natural gas prices in the United States due to increased exports of natural gas to Europe;

•Market prices and availability of corn that we require to operate the ethanol plant;

•Continued economic impacts from the COVID-19 pandemic, including reduced gasoline demand;

•Continued economic impacts of the war in Ukraine, including increased commodities prices and effect of Sanctions;

•Lower oil prices which result in lower ethanol prices;

•Negative operating margins which result from lower ethanol prices;

•Lower distillers grains prices which result from the Chinese anti-dumping and countervailing duty tariffs;

•Lower ethanol prices due to the Chinese ethanol tariff and the Brazilian ethanol tariff;

•Logistics difficulties preventing us from delivering our products to our customers;

•Fluctuations in the price and market for ethanol, distillers grains and corn oil;

•Availability and costs of products and raw materials, particularly corn and natural gas;

•Changes in the environmental regulations that apply to our plant operations and our ability to comply with such regulations;

•Ethanol supply exceeding demand and corresponding ethanol price reductions impacting our ability to operate profitably and maintain a positive spread between the selling price of our products and our raw material costs;

•Our ability to generate and maintain sufficient liquidity to fund our operations and meet our necessary capital expenditures;

•Our ability to continue to meet our loan covenants;

•Limitations and restrictions contained in the instruments and agreements governing our indebtedness;

•Results of our hedging transactions and other risk management strategies;

•Changes and advances in ethanol production technology; and

•Competition from alternative fuels and alternative fuel additives.

Overview

    Red Trail Energy, LLC, a North Dakota limited liability company (the "Company," "Red Trail," or "we," "our," or "us"), owns and operates a 50 million gallon annual name-plate production ethanol plant near Richardton, North Dakota. Our revenues are derived from the sale and distribution of our ethanol, distillers grains and corn oil primarily in the continental United States. Corn is our largest cost component and our profitability is highly dependent on the spread between the price of corn and the price of ethanol.

On April 1, 2023, our board of governors voluntarily suspended trading of our membership units on the qualified matching service operated by FNC Ag Stock LLC. The board of governors decided to suspend trading on the qualified matching service indefinitely while we conduct due diligence on a potential transaction in order to protect the interests of our members. We recently ceased discussions regarding the proposed transaction and resumed membership unit trading.

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On April 7, 2023, we entered into a revolving promissory note for a $10 million loan with our primary lender, Cornerstone Bank. The promissory note has a maturity date of April 5, 2024. Interest accrues on any outstanding balance on the promissory note at a rate of 1.0% less than the prime rate as published by the Wall Street Journal, adjusted monthly. The revolving loan has a minimum interest rate of 5.0%.

On April 24, 2023, we named Jodi Johnson, Chief Executive Officer of the Company and Joni Entze Chief Financial Officer of the Company. Jodi Johnson was previously serving as the Company's Chief Financial Officer. Gerald Bachmeier who served as CEO until April 24, 2023 will continue to serve as a consultant for the Company until September 30, 2023.

Results of Operations for the Three Months Ended June 30, 2023 and 2022

    The following table shows the results of our operations and the percentages of revenues, cost of goods sold, general and administrative expenses and other items to total revenues in our unaudited statements of operations for the three months ended June 30, 2023 and 2022:

	Three Months Ended June 30, 2023 (Unaudited)			Three Months Ended June 30, 2022 (Unaudited)
Statement of Operations Data	Amount		%	Amount		%
Revenues	$	49,690,760	100.00	$	55,720,460	100.00
Cost of Goods Sold	48,038,330		96.67	49,282,870		88.45
Gross Profit	1,652,430		3.33	6,437,590		11.55
General and Administrative Expenses	1,310,476		2.64	798,990		1.43
Operating Income	341,954		0.69	5,638,600		10.12
Other Income (Loss), net	(205,704)		(0.41)	4,282,472		7.69
Net Income	$	136,250	0.27	$	9,921,072	17.81

    The following table shows additional data regarding production and price levels for our primary inputs and products for the three months ended June 30, 2023 and 2022.

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	Three Months Ended June 30, 2023 (unaudited)		Three Months Ended June 30, 2022 (unaudited)
Production:
Ethanol sold (gallons)	15,896,285		15,899,612
Dried distillers grains sold (tons)	27,670		28,122
Modified distillers grains sold (tons)	21,796		17,979
Corn oil sold (pounds)	4,263,660		4,336,920
Revenues:
Fuel grade ethanol average price per gallon (net of hedging)	$	2.44	$	2.63
Dried distillers grains average price per ton	228.57		266.12
Modified distillers grains average price per ton	103.14		151.64
Corn oil average price per pound	0.52		0.74
Primary Inputs:
Corn ground (bushels)	5,388,791		5,535,187
Natural gas (MMBtu)	391,585		404,040
Costs of Primary Inputs:
Corn average price per bushel (net of hedging)	$	7.04	$	7.43
Natural gas average price per MMBtu (net of hedging)	3.03		6.59
Other Costs (per gallon of ethanol sold):
Chemical and additive costs	$	0.079	$	0.085
Denaturant cost	0.047		0.054
Electricity cost	0.091		0.057
Direct labor cost	0.075		0.075

Revenue

    Our total revenue was lower in the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year primarily due to decreased average prices for our products during the third quarter of our 2023 fiscal year. During the third quarter of our 2023 fiscal year, approximately 77.9% of our total revenue was derived from ethanol sales, approximately 17.3% was from distillers grains sales, approximately 0.4% was from syrup sales, and approximately 4.4% was from corn oil sales. During the third quarter of our 2022 fiscal year, approximately 75.1% of our total revenue was derived from ethanol and industrial alcohol sales, approximately 18.3% was from distillers grains sales, approximately 0.8% was from syrup sales and approximately 5.8% was from corn oil sales.

    Ethanol

    The average price we received for our ethanol, without taking into account our hedge positions, was lower during the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year. Management attributes this decrease in average ethanol prices received to lower gasoline prices during the 2023 period which has an impact on ethanol prices. Following the end of the third quarter of our 2023 fiscal year, gasoline prices have been higher which management believes will positively impact ethanol prices during the fourth quarter of our 2023 fiscal year.

    We sold slightly fewer gallons of ethanol during the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year due to decreased production at the ethanol plant during the 2023 period. Management anticipates ethanol production to be consistent during the rest of our 2023 fiscal year to 2022 fiscal year levels provided market conditions allow us to continue to operate the ethanol plant at capacity. We anticipate continuing to focus on operating the ethanol plant as efficiently as possible in order to maximize our profitability.

    From time to time we enter into forward sales contracts for our products. At June 30, 2023, we had no open ethanol futures contracts. At June 30, 2022, we had no open ethanol futures contracts. We realized a gain of approximately $570 on

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ethanol derivative instruments for the third quarter of our 2023 fiscal year which increased our revenue with no gain or loss for ethanol derivative instruments for the same period of our 2022 fiscal year.

    Distillers Grains

    During the third quarter of our 2023 fiscal year, we sold more tons of distillers grains compared to the same period of our 2022 fiscal year due to decreased syrup and corn oil sales during the 2023 period. We sold a majority of our distiller grains during the 2023 period in the dried form due to demand factors which favored the dried product. The average price we received for both our dried and modified distillers grains was lower during the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year due to lower market corn prices during the 2023 period. As distillers grains are a feed product which competes with corn, when corn prices are lower it has a corresponding impact on distillers grains prices. Management anticipates distillers grains prices will remain at their current levels during the rest of our 2023 fiscal year but they may change at the beginning of our 2024 fiscal year depending on the amount of corn harvested in the fall of 2023. Management anticipates distillers grains production will remain at its current mix during the rest of our 2023 fiscal year and into our 2024 fiscal year.

    Corn Oil

    The total pounds of corn oil we sold was slightly lower during the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year due to decreased corn oil production during the 2023 period compared to the 2022 period. Management anticipates that our corn oil production will remain at current levels for the remaining quarter of our 2023 fiscal year provided market conditions allow us to continue to operate the ethanol plant at capacity and provided the market price of corn oil remains at current levels. The average price we received for our corn oil during the third quarter of our 2023 fiscal year was lower than the average price we received during the third quarter of our 2022 fiscal year. Corn oil is used for biodiesel and renewable diesel production which have increased recently, benefiting market corn oil prices. However additional oil supplies have also increased which have impacted the market price of corn oil.

Syrup

The total gallons of syrup we sold was lower during the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year due to decreased overall production. Management anticipates that our syrup production will remain at the current levels for the remaining quarter of our 2023 fiscal year provided that market conditions allow us to continue to operate the ethanol plant at capacity. The average price we received for our syrup during the third quarter of our 2023 fiscal year was lower compared to the average price we received during the third quarter of our 2022 fiscal year primarily due to discounted pricing to ensure product moves in a timely manner.

Cost of Goods Sold

    Our cost of goods sold is primarily made up of corn and natural gas expenses. Our cost of goods sold was lower for the third quarter of our 2023 fiscal year as compared to the third quarter of our 2022 fiscal year due primarily to lower corn cost per bushel and lower natural gas costs per MMBtu along with decreased corn and natural gas consumption during the 2023 fiscal year.

Corn Costs

Our cost of goods sold related to corn was lower for the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year due to a decreased average cost per bushel of corn, without taking derivative instrument positions into account, along with decreased corn consumption. For the third quarter of our 2023 fiscal year, we used approximately 2.6% fewer bushels of corn compared to the third quarter of our 2022 fiscal year due to improved corn to ethanol conversion rates during the 2023 period along with decreased ethanol production. The average price we paid per bushel of corn, without taking into account our derivative instruments, was approximately 7.1% lower for the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year due to lower market corn prices during the third quarter of our 2023 fiscal year. In addition, during the third quarter of our 2023 fiscal year, we had a realized gain of approximately $675,000 for our corn derivative instruments, which decreased our cost of goods sold related to corn. For the third quarter of our 2022 fiscal year, we had a realized gain of approximately $373,000 for our corn derivative instruments, which decreased our cost of goods sold related to corn during that period. Management anticipates corn prices will remain lower during the rest of our 2023 fiscal year due to favorable weather which we anticipate will result in a larger corn crop to be harvested in the fall of 2023.

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    Natural Gas Costs

    We used approximately 3.1% fewer MMBtu of natural gas during the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year due to decreased overall production at the ethanol plant. Our average cost per MMBtu of natural gas was approximately 54.0% lower during the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year due to lower energy prices compared to our 2022 fiscal year. We had a realized gain on our natural gas derivative instruments of approximately $46,000 for the third quarter of our 2023 fiscal year. We had no realized gain or loss on our natural gas derivative instruments during the third quarter of our 2022 fiscal year. Management anticipates relatively stable natural gas prices during the rest of our 2023 fiscal year and into our 2024 fiscal year.

General and Administrative Expenses

    Our general and administrative expenses were higher for the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year due to additional consulting fees and CCS payments to pore space owners related to our carbon sequestration project.

Other Income/Expense

    We had less interest income during the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year due to less cash on hand during our 2023 fiscal year. Our other income was lower during the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year due to the receipt of a biofuel producer relief program payment in our 2022 fiscal year. We had more interest expense during the third quarter of our 2023 fiscal year compared to the third quarter of our 2022 fiscal year due to increased borrowing on our loans.

Results of Operations for the Nine Months Ended June 30, 2023 and 2022

    The following table shows the results of our operations and the percentages of revenues, cost of goods sold, general and administrative expenses and other items to total revenues in our unaudited statements of operations for the nine months ended June 30, 2023 and 2022:

	Nine Months Ended June 30, 2023 (Unaudited)			Nine Months Ended June 30, 2022 (Unaudited)
Statement of Operations Data	Amount		%	Amount		%
Revenues	$	148,820,593	100.00	$	168,225,436	100.00
Cost of Goods Sold	142,816,229		95.97	138,899,275		82.57
Gross Profit	6,004,364		4.03	29,326,161		17.43
General and Administrative Expenses	4,098,939		2.75	2,556,029		1.52
Operating Income	1,905,425		1.28	26,770,132		15.91
Other Income, net	(703,410)		(0.47)	6,961,490		4.14
Net Income	$	1,202,015	0.81	$	33,731,622	20.05

    The following table shows additional data regarding production and price levels for our primary inputs and products for the nine months ended June 30, 2023 and 2022.

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	Nine Months Ended June 30, 2023 (unaudited)		Nine Months Ended June 30, 2022 (unaudited)
Production:
Ethanol sold (gallons)	48,317,107		50,354,306
Dried distillers grains sold (tons)	70,143		65,216
Modified distillers grains sold (tons)	92,274		108,593
Corn oil sold (pounds)	12,870,140		13,959,870
Revenues:
Fuel grade ethanol average price per gallon (net of hedging)	$	2.31	$	2.56
Dried distillers grains average price per ton	243.00		237.55
Modified distillers grains average price per ton	120.65		117.96
Corn oil average price per pound	0.61		0.64
Primary Inputs:
Corn ground (bushels)	16,512,148		17,159,839
Natural gas (MMBtu)	1,183,109		1,193,681
Costs of Primary Inputs:
Corn average price per bushel (net of hedging)	$	6.66	$	6.54
Natural gas average price per MMBtu (net of hedging)	5.03		5.61
Other Costs (per gallon of ethanol sold):
Chemical and additive costs	$	0.078	$	0.087
Denaturant cost	0.047		0.052
Electricity cost	0.090		0.049
Direct labor cost	0.075		0.067

Revenue

    Our total revenue was lower in the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022 primarily due to lower production by the ethanol plant along with lower average prices for our ethanol during the nine months ended June 30, 2023. During the nine months ended June 30, 2023, approximately 75.0% of our total revenue was derived from ethanol sales, approximately 19.3% was from distillers grains sales, approximately 0.4% was from syrup sales, and approximately 5.3% was from corn oil sales. During the nine months ended June 30, 2022, approximately 76.9% of our total revenue was derived from ethanol and industrial alcohol sales, approximately 16.9% was from distillers grains sales, approximately 0.9% was from syrup sales and approximately 5.3% was from corn oil sales.

    Ethanol

    The average price we received for our ethanol was lower during the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022. Management attributes the decrease in the price we received for our ethanol during the nine months ended June 30, 2023 to lower gasoline prices during the 2023 period. Management anticipates that energy prices will remain higher than in recent years but less than we experienced during the nine months ended June 30, 2022.

    We sold fewer gallons of ethanol during the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022 due to decreased production at the ethanol plant during the 2023 period. Management attributes this decreased production to additional plant downtime due to rail disruptions caused by adverse weather. We anticipate continuing to focus on operating the ethanol plant as efficiently as possible in order to maximize our profitability.

    From time to time we enter into forward sales contracts for our products. At June 30, 2023, we had no open ethanol futures contracts. At June 30, 2022, we had no open ethanol futures contracts. We realized a gain of approximately $22,000 on ethanol derivative instruments for the nine months ended June 30, 2023 which increased our revenue during our 2023 fiscal

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year. We realized a gain of approximately $425,000 on ethanol derivative instruments for the nine months ended June 30, 2022 which increased our revenue during our 2022 fiscal year.

    Distillers Grains

    During the nine months ended June 30, 2023, we sold fewer tons of distillers grains compared to the same period of our nine months ended June 30, 2022 due to lower overall production at the ethanol plant. We sold a majority of our distiller grains during the 2023 period in the modified form due to local demand which favored this product. The average price we received for both our dried and modified distillers grains was higher during the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022 due to increased demand for distillers grains along with higher corn prices. Management believes prices for distillers grains have been strong due to higher corn prices and reduced worldwide corn supplies.

    Corn Oil

    The total pounds of corn oil we sold was lower during the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022 due to deceased overall production at the plant during the 2023 period. The average price we received for our corn oil during the nine months ended June 30, 2023 was lower compared to the average price we received during the nine months ended June 30, 2022 primarily due to increased corn oil supply in the market. Corn oil is used for biodiesel and renewable diesel production which have increased recently, benefiting market corn oil prices.

Syrup

The total gallons of syrup we sold was lower during the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022 due to decreased overall production. The average price we received for our syrup during the nine months ended June 30, 2023 was lower compared to the average price we received during the nine months ended June 30, 2022 primarily due to discounted pricing to ensure product moves in a timely manner.

Cost of Goods Sold

    Our cost of goods sold is primarily made up of corn and natural gas expenses. Our cost of goods sold was higher for the nine months ended June 30, 2023 as compared to the nine months ended June 30, 2022 due primarily to the net effect of higher corn costs per bushel partially offset by decreased corn usage during the 2023 fiscal year.

Corn Costs

Our cost of goods sold related to corn was lower for the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022 due to higher average prices we paid per bushel of corn, without taking derivative instrument positions into account, partially offset by decreased corn consumption during the nine months ended June 30, 2023. For the nine months ended June 30, 2023, we used approximately 3.77% fewer bushels of corn compared to the nine months ended June 30, 2022 due to decreased ethanol production and increased corn to ethanol conversion efficiency. The average price we paid per bushel of corn, without taking into account our derivative instruments, was approximately 2.75% higher for the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022 due to higher market corn prices during the nine months ended June 30, 2023. In addition, during the nine months ended June 30, 2023, we had a realized gain of approximately $988,000 for our corn derivative instruments, which decreased our cost of goods sold related to corn. For the nine months ended June 30, 2022, we had a realized gain of approximately $1,438,000 for our corn derivative instruments, which decreased our cost of goods sold related to corn during that period.

    Natural Gas Costs

    We used approximately 0.89% fewer MMBtu of natural gas during the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022 due to decreased overall production during the 2023 period. Our average cost per MMBtu of natural gas was approximately 10.34% less during the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022 due to lower natural gas prices and energy prices generally compared to our 2022 fiscal year.

General and Administrative Expenses

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    Our general and administrative expenses were higher for the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022 due to additional consulting fees and CCS payments to pore space owners related to our carbon sequestration project.

Other Income/Expense

    We had less interest income during the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022 due to having less cash on hand during our 2023 fiscal year. Our other income was significantly lower during the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022 due to the $3 million Ethanol Recovery Loan forgiveness we received during our 2022 fiscal year. We had more interest expense during the nine months ended June 30, 2023 compared to the nine months ended June 30, 2022 due to increased borrowing on our loans.

Changes in Financial Condition for the Nine Months Ended June 30, 2023

    Current Assets

We had less cash and cash equivalents at June 30, 2023 compared to September 30, 2022 primarily due to deferred corn payments we made early in January each year. We had less restricted cash in our margin account at June 30, 2023 compared to September 30, 2022 due to changing values of our derivative instrument positions. Due to the timing of shipments, the value of our accounts receivable was higher at June 30, 2023 compared to September 30, 2022. We had more inventory on hand at June 30, 2023 compared to September 30, 2022 due primarily to more raw material inventory on hand at June 30, 2023 compared to September 30, 2022. Our prepaid expenses were higher at June 30, 2023 compared to September 30, 2022 due to an increase in our insurance premiums paid for the year.

    Property, Plant and Equipment

The value of our property, plant and equipment was less at June 30, 2023 compared to September 30, 2022 due to regular depreciation of our assets during the first nine months of our 2023 fiscal year partially offset by capital projects which were completed and higher construction in progress at June 30, 2023 compared to September 30, 2022.

Other Assets

Our right of use operating lease assets at June 30, 2023 was higher compared to September 30, 2022 due to the renewal of DDG railcar leases partially offset by amortization of our leases during our 2023 fiscal year. Our investment in RPMG increased due to a capital call during our 2023 fiscal year.

    Current Liabilities

We had no disbursements in excess of our bank balances at June 30, 2023 which are checks we have issued which have not yet been presented for payment which exceed the cash we have in our bank accounts. These checks are paid from our revolving loans. Our accounts payable was higher at June 30, 2023 compared to September 30, 2022 due to having more corn payables and the distribution payable at June 30, 2023 compared to September 30, 2022. Our accrued expenses were higher at June 30, 2023 compared to September 30, 2022 due to higher accrued corn payables. We had a smaller liability associated with our corn derivative instrument positions at June 30, 2023 compared to September 30, 2022 due to changing market corn prices compared to our derivative instrument positions. We had a higher accrued loss on our firm corn purchase commitments due to the difference between the market value of our firm corn purchases and the contract price of our corn purchases. We had a smaller current maturity associated with our notes payable due to renewals of our long-term debt as of June 30, 2023 compared to September 30, 2022. We had more current portion of operating lease liabilities at June 30, 2023 compared to September 30, 2022 due to the renewal of DDG railcar leases partially offset by amortization of our leases during our 2023 fiscal year.

    Long-Term Liabilities

Our notes payable balance was significantly higher at June 30, 2023 compared to September 30, 2022 due to consolidating the two construction loans which also extended the maturity dates of our debt, moving it to long-term debt and additional borrowing on our loans during the first fiscal quarter of 2023. We had more long-term liabilities for our operating

22

leases at June 30, 2023 due additional equipment leases partially offset by amortization of our long-term leases during our 2023 fiscal year.

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 from our operations to continue to operate the ethanol plant for the next 12 months and beyond. Should we experience unfavorable operating conditions in the future, we may have to secure additional debt or equity sources for working capital or other purposes.

    The following table shows cash flows for the nine months ended June 30, 2023 and 2022:

	June 30, 2023 (unaudited)		June 30, 2022 (unaudited)
Net cash provided by operating activities	$	2,244,426	$	29,620,520
Net cash used in investing activities	(2,219,952)		(17,763,824)
Net cash (used for) provided by financing activities	(2,443,389)		6,429,720
Net increase (decrease) in cash	$	(2,418,915)	$	18,286,416
Cash, cash equivalents and restricted cash, end of period	$	8,733,100	$	23,501,660

Cash Flow from Operations

    Our operations provided less cash during the nine months ended June 30, 2023 compared to the same period of our 2022 fiscal year due primarily to decreased net income during the 2023 period.

Cash Flow From Investing Activities

We used less cash for capital expenditures during the nine months ended June 30, 2023 compared to the same period of our 2022 fiscal year. During the 2023 period, our primary capital expenditures were for renovations to retrofit the posidon tank for additional water storage and work to finalize our CCS project.

Cash Flow from Financing Activities

Our financing activities provided less cash during the nine months ended June 30, 2023 compared to the same period of our 2022 fiscal year due to fewer proceeds we received from our debt instruments during the 2023 fiscal year. We had debt repayments and a distribution which was paid during the our 2023 fiscal year which used cash during that period.

Our liquidity, results of operations and financial performance will be impacted by many variables, including the market price for commodities such as, but not limited to, corn, ethanol and other energy commodities, as well as the market price for any co-products generated by the facility and the cost of labor and other operating costs.  Assuming future relative price levels for corn, ethanol and distillers grains remain consistent, we expect operations to generate adequate cash flows to maintain operations for the next 12 months and beyond.

Plans for Cash in the Short Term and in the Long Term

In the next 12 months, the Company plans to reinvest its cash into current business operations and to use the cash for the implementation of the new carbon capture and storage project. In the long term, the Company plans to reinvest its cash into current business operations and may provide further distributions to its members.

Capital Expenditures

    The Company had approximately $2.5 million in construction in progress as of June 30, 2023 primarily relating to our carbon capture and storage project and renovations to retrofit the posidon tank for additional water storage. The Company plans to finance this construction in progress using cash from current business operations.

23

Capital Resources

Revolving Loan

    On January 22, 2020, we entered into a $10 million revolving loan (the "Revolving Loan") with Cornerstone Bank ("Cornerstone"). Interest accrues on any outstanding balance on the Revolving Loan at a rate of 1.2% less than the prime rate as published by the Wall Street Journal, adjusted monthly. The Revolving Loan has a minimum interest rate of 3.0%. The maturity date of the Revolving Loan was January 31, 2022. On February 3, 2022, the Revolving Loan was renewed, and the new maturity date was March 31, 2022. On April 8, 2022, the Revolving Loan maturity date was extended to April 7, 2023. On April 8, 2023 we renewed the Revolving Loan. The new maturity date is April 5, 2024. The Revolving Loan is secured by a lien on substantially all of our assets. At June 30, 2023, we had $10 million available on the Revolving Loan. The variable interest rate on June 30, 2023 was 7.25%.

Construction Loans

    On January 22, 2020, we entered into a new $7 million construction loan (the "First Construction Loan") with Cornerstone to finance our carbon capture and storage project. The original maturity date of the First Construction Loan was June 1, 2021. On June 3, 2021 the maturity date was extended to February 1, 2022. On April 8, 2022, the First Construction Loan was extended to October 8, 2022. On October 28, 2022, the First Construction Loan was consolidated with the Second Construction Loan (below).

    On February 1, 2021, we entered into a $28 million construction loan (the "Second Construction Loan") with Cornerstone to finance our carbon capture and storage project. The maturity date of the Second Construction Loan was January 31, 2022. On February 17, 2022, the Second Construction Loan was extended to March 15, 2022. On April 8, 2022, the Second Construction Loan was again extended to October 8, 2022. On October 28, 2022, the Second Construction loan was consolidated and replaced (below).

On October 28, 2022, we entered into a $25 million loan to replace the First Construction Loan and Second Construction Loan (the "Consolidated Loan"). The maturity date of the Consolidated Loan is January 31, 2032. The fixed interest rate is 4.65%. The outstanding balance as of June 30, 2023 was $22.2 million.

Ethanol Recovery Program

On July 13, 2020, we entered into a $5.41 million loan through the Bank of North Dakota's Ethanol Recovery Program and Cornerstone. The Ethanol Recovery Program was developed by the North Dakota Ethanol Producers Association and the Bank of North Dakota to use the existing Biofuels Partnership in Assisting Community Expansion ("PACE") program and Value-added Guarantee Loan program to help ethanol production facilities weather the economic challenges caused by the COVID-19 pandemic. Ethanol producers could qualify for up to $15 million of a low interest loan of 1% based on the amount of such producers' annual corn grind. The maturity date of the loan is July 13, 2025. The fixed interest rate as of June 30, 2023 was 3.75% with an interest rate buy down through the Bank of North Dakota to 1%. We typically make monthly payments of approximately $74,000 per month. On December 3, 2021 we received forgiveness of $2.65 million of the loan, and the balance outstanding on June 30, 2023 was approximately $524,000.

Significant Accounting Policies and Estimates

    We describe our significant accounting policies in Note 1, Summary of Significant Accounting Policies, of the Notes to Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022. We discuss our critical accounting estimates in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022. There has been no significant change in our critical accounting estimates since the end of our 2022 fiscal year. Effective October 1, 2020 the Company adopted ASU2016-13 using the modified retrospective approach.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk.

    We are exposed to the impact of market fluctuations associated with commodity prices and interest rates as discussed below. We use derivative financial instruments as part of an overall strategy to manage market risk. We use cash, futures and

24

option contracts to hedge changes to the commodity prices of corn 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 pursuant to the requirements of Generally Accepted Accounting Principles ("GAAP"). 

Interest Rate Risk

We are exposed to market risk from changes in interest rates. Exposure to interest rate risk results primarily from holding loans which bear variable interest rates. As of June 30, 2023, we had no amount outstanding on our variable interest rate loans, however we could have funds outstanding under our revolving loan which has a variable interest rate in the future. If we were to experience a 10% increase in the variable portion of our loans, the annual effect such change would have on our income statement, based on the amount we had outstanding on our variable interest rate loans as of June 30, 2023, would be immaterial.

Commodity Price Risk

    We expect to be exposed to market risk from changes in commodity prices.  Exposure to commodity price risk results from our dependence on corn and natural gas in the ethanol production process and the sale of ethanol. Our exposure to commodity price risk may be heightened due to the crisis in Ukraine.

    We enter into fixed price contracts for corn purchases on a regular basis.  It is our intent that, as we enter into these contracts, we will use various hedging instruments (puts, calls and futures) to maintain a near even market position.  For example, if we have one million bushels of corn under fixed price contracts we would generally expect to enter into a short hedge position to offset our price risk relative to those bushels we have under fixed price contracts. Because our ethanol marketing company ("RPMG") is selling substantially all of the gallons it markets on a spot basis we also include the corn bushel equivalent of the ethanol we have produced that is inventory but not yet priced as bushels that need to be hedged.

    Although we believe our hedge positions will accomplish an economic hedge against our future purchases, they are not designated as hedges for accounting purposes, which would match the gain or loss on our hedge positions to the specific commodity purchase being hedged.  We use fair value accounting for our hedge positions, which means as the current market price of our hedge positions changes, the gains and losses are immediately recognized in our cost of sales.  The immediate recognition of hedging gains and losses under fair value accounting can cause net income to be volatile from quarter to quarter and year to year due to the timing of the change in value of derivative instruments relative to the cost of the commodity being hedged.  However, it is likely that commodity cash prices will have the greatest impact on the derivatives instruments with delivery dates nearest the current cash price.

    As of June 30, 2023 we had corn futures and option contracts for approximately 1,855,000 bushels of corn. As of June 30, 2023 we had an unrealized loss of approximately $152,000 related to our corn futures and options contracts.

    It is the current position of our ethanol marketing company, RPMG, that under current market conditions, selling ethanol in the spot market will yield the best price for our ethanol.  RPMG will, from time to time, contract a portion of the gallons they market with fixed price contracts.  At June 30, 2023, we had no fixed ethanol sales contracts and ethanol futures and option contracts. As of June 30, 2023 we had no unrealized gain or loss related to ethanol futures and option contracts.

    We estimate that our corn usage will be between 18 million and 20 million bushels per year for the production of approximately 59 million to 64 million gallons of ethanol.  As corn prices move in reaction to market trends and information, our income statement will be affected depending on the impact such market movements have on the value of our derivative instruments.

A sensitivity analysis has been prepared to estimate our exposure to corn, natural gas and ethanol price risk. Market risk related to our corn, natural gas and ethanol prices 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, and our average ethanol sales price as of June 30, 2023, net of the forward and future contracts used to hedge our market risk for corn, natural gas and ethanol. The volumes are based on our expected use and sale of these commodities for a one year period from June 30, 2023. The results of this analysis, which may differ from actual results, are as follows:

25

	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
Ethanol	63,900,000	Gallons	10	%	$	(15,975,000)
Corn	18,048,000	Bushels	10	%	$	(12,634,000)
Natural gas	1,384,000	MMBtu	10	%	$	(471,000)

For comparison purposes, our sensitivity analysis for our quarter ended June 30, 2022 is set forth below:

	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
Ethanol	63,900,000	Gallons	10	%	$	(15,975,000)
Corn	22,821,000	Bushels	10	%	$	(12,327,000)
Natural gas	1,664,000	MMBtu	10	%	$	(1,431,000)

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 Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures.

    Our management, including our President and Chief Executive Officer (the principal executive officer), Jodi Johnson, along with our Chief Financial Officer, (the principal financial officer), Joni Entze, have reviewed and evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2023. Based on this review and evaluation, these officers believe that our disclosure controls and procedures were effective in ensuring that material information related to us is recorded, processed, summarized and reported within the time periods required by the forms and rules of the Securities and Exchange Commission.

For the fiscal quarter ended June 30, 2023, 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

    From time to time in the ordinary course of business, we may be named as a defendant in legal proceedings related to various issues, including without limitation, workers' compensation claims, tort claims, or contractual disputes. We are not currently involved in any material legal proceedings.

Item 1A. Risk Factors

    There have been no material changes to the risk factors which were previously disclosed in our annual report on Form 10-K for the fiscal year ended September 30, 2022.

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

    None.

Item 3. Defaults Upon Senior Securities

    None.

26

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.	Exhibits
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.INS*	Inline XBRL Instance Document
101.SCH*	Inline XBRL Schema Document
101.CAL*	Inline XBRL Calculation Document
101.LAB*	Inline XBRL Labels Linkbase Document
101.PRE*	Inline XBRL Presentation Linkbase Document
101.DEF*	Inline XBRL Definition Linkbase Document
104	The cover page from this Quarterly Report on Form 10-Q formatted in Inline XBRL.

(*)    Filed herewith.

(**)    Furnished herewith.

27

SIGNATURES

    Pursuant to the requirements 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.

		RED TRAIL ENERGY, LLC
Date:	August 14, 2023	/s/ Jodi Johnson
		Jodi Johnson
		President and Chief Executive Officer
		(Principal Executive Officer)
Date:	August 14, 2023	/s/ Joni Entze
		Joni Entze
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

28

EX-31.1

CERTIFICATION PURSUANT TO 17 CFR 240.15(d)-14(a)

(SECTION 302 CERTIFICATION)

I, Jodi Johnson, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Red Trail Energy, LLC;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-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 our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

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

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

Date:	August 14, 2023	/s/ Jodi Johnson
		Jodi Johnson Chief Executive Officer

EX-31.2

CERTIFICATION PURSUANT TO 17 CFR 240.15(d)-14(a)

(SECTION 302 CERTIFICATION)

I, Joni Entze, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Red Trail Energy, LLC;

2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this report;

4.    The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-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 our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.    The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

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

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

Date:	August 14, 2023	/s/ Joni Entze
		Joni Entze Chief Financial Officer

EX-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 Red Trail Energy, LLC (the “Company”) for the fiscal quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jodi Johnson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	August 14, 2023	/s/ Jodi Johnson
		Jodi Johnson
		Chief Executive Officer

EX-32.2

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

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

    In connection with the quarterly report on Form 10-Q of Red Trail Energy, LLC (the “Company”) for the fiscal quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joni Entze, 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.

Dated:	August 14, 2023	/s/ Joni Entze
		Joni Entze
		Chief Financial Officer

XML

Document and Entity Information Document - shares	9 Months Ended
	Jun. 30, 2023	Aug. 14, 2023
Document and Entity Information [Abstract]
Entity Registrant Name	RED TRAIL ENERGY, LLC
Entity Central Index Key	0001359687
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Entity File Number	000-52033
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Document Quarterly Report	true
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		40,148,160
Entity Incorporation, State or Country Code	ND
Entity Tax Identification Number	76-0742311
Entity Address, Address Line One	3682 Highway 8 South
Entity Address, Address Line Two	P.O. Box 11
Entity Address, City or Town	Richardton
Entity Address, State or Province	ND
Entity Address, Postal Zip Code	58652
City Area Code	701
Local Phone Number	974-3308
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Amendment Flag	false

XML

Condensed Balance Sheets - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Current Assets
Cash and equivalents	$ 6,022,687	$ 6,366,990
Restricted cash - margin account	2,710,413	4,785,025
Accounts receivable, primarily related party	7,657,890	4,879,011
Inventory	15,030,571	12,544,033
Prepaid expenses	774,624	512,770
Total current assets	32,196,185	29,087,829
Property, Plant and Equipment
Land	1,333,681	1,333,681
Land improvements	17,662,538	17,662,538
Buildings	15,320,492	14,930,003
Plant and equipment	121,464,181	121,465,514
Construction in progress	2,460,066	1,191,290
Gross property, plant and equipment	158,240,958	156,583,026
Less accumulated depreciation	81,633,867	77,104,977
Net property, plant and equipment	76,607,091	79,478,049
Other Assets
Operating Lease, Right-of-Use Asset	1,906,122	405,631
Investment in RPMG	940,642	605,000
Patronage equity	5,348,618	5,399,515
Deposits	40,000	40,000
Total other assets	8,235,382	6,450,146
Total Assets	117,038,658	115,016,024
Current Liabilities
Accounts payable	7,936,111	6,885,442
Accrued expenses	2,799,582	1,531,123
Derivative Liability	151,706	1,162,273
Accrued loss on firm purchase commitments (see notes 3 and 7)	428,000	9,000
Other Liabilities, Current	46,593	10,636
Current maturities of notes payable	2,560,714	18,751,634
Current portion of operating lease liabilities	342,538	271,968
Total current liabilities	16,272,652	28,622,076
Long-Term Liabilities
Notes payable	20,189,931	419,150
Long-term operating lease liabilities	1,563,583	133,663
Total long-term liabilities	$ 21,753,514	$ 552,813
Common Unit, Outstanding	40,148,160	40,148,160
Common Unit, Issued	40,148,160	40,148,160
Stockholders' Equity Attributable to Parent	$ 79,012,492	$ 85,841,135
Total Liabilities and Members’ Equity	117,038,658	115,016,024
Distribution Payable	$ 2,007,408	$ 0

XML

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Revenues, primarily related party	$ 49,690,760	$ 55,720,460	$ 148,820,593	$ 168,225,436
Cost of Goods Sold
Cost of goods sold	47,967,330	49,139,917	142,207,229	137,960,322
Loss on firm purchase commitments	71,000	89,000	535,000	885,000
Total Cost of Goods Sold	48,038,330	49,282,870	142,816,229	138,899,275
Lower of cost or market inventory adjustment	0	53,953	74,000	53,953
Gross Profit	1,652,430	6,437,590	6,004,364	29,326,161
General and Administrative Expenses	1,310,476	798,990	4,098,939	2,556,029
Operating Income (Loss)	341,954	5,638,600	1,905,425	26,770,132
Other Income (Expense)
Interest income	14,953	21,154	44,978	57,684
Other income	43,625	4,265,190	70,471	6,923,733
Interest expense	(264,282)	(3,872)	(818,859)	(19,927)
Total other income (expense), net	(205,704)	4,282,472	(703,410)	6,961,490
Net Income (Loss)	$ 136,250	$ 9,921,072	$ 1,202,015	$ 33,731,622
Weighted Average Units Outstanding, Basic	40,148,160	40,148,160	40,148,160	40,148,160
Weighted Average Units Outstanding, Diluted	40,148,160	40,148,160	40,148,160	40,148,160
Net Income (Loss) Per Unit, Basic	$ 0	$ 0.25	$ 0.03	$ 0.84
Net Income (Loss) Per Unit, Diluted	$ 0	$ 0.25	$ 0.03	$ 0.84

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Condensed Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash Flows from Operating Activities
Net income	$ 1,202,015	$ 33,731,622
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,745,508	3,318,035
Gain (Loss) on Disposition of Other Assets	9,759	0
Change in fair value of derivative instruments	(1,010,567)	963,925
Lower of cost of net realizable value adjustment	(74,000)	(53,953)
Loss on firm purchase commitments	535,000	885,000
Retains	50,897	0
Paycheck Protection Program Loan Forgiveness	0	(2,650,773)
Change in operating assets and liabilities:
Accounts receivable	(2,778,879)	(2,324,801)
Inventory	(3,095,539)	(4,426,922)
Prepaid expenses	(261,853)	(144,305)
Increase (Decrease) in Contract with Customer, Liability	35,957	2,952
Accounts payable	1,050,669	(299,821)
Accrued expenses	1,268,459	(373,345)
Accrued purchase commitment losses	419,000	885,000
Net cash provided by operating activities	2,244,426	29,620,520
Cash Flows from Investing Activities
Investment in RPMG	(335,642)	0
Proceeds from disposal of fixed assets	33,000	0
Capital expenditures	(1,917,310)	(17,763,824)
Net cash used in investing activities	(2,219,952)	(17,763,824)
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Paid	(6,023,250)	(9,635,404)
Proceeds from (Repayments of) Bank Overdrafts	0	(1,343,608)
Proceeds from Notes Payable	7,000,000	18,000,000
Cash Flows from Financing Activities
Debt repayments	(3,420,139)	(591,268)
Net cash (used for) provided by financing activities	(2,443,389)	6,429,720
Net Change in Cash, Cash Equivalents and Restricted Cash	(2,418,915)	18,286,416
Cash, Cash Equivalents and Restricted Cash - Beginning of Period	11,152,015	5,215,244
Cash, Cash Equivalents and Restricted Cash - End of Period	8,733,100	23,501,660
Cash and equivalents	6,022,687	19,122,569
Restricted Cash and Cash Equivalents	2,710,413	4,379,091
Cash, cash equivalents and restricted cash	8,733,100	23,501,660
Supplemental Disclosure of Cash Flow Information
Interest paid	437,438	54,427
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	1,620,653	0
Distributions Payable	2,007,408	0
Noncash Investing and Financing Activities
Capital expenditures in accounts payable		$ 108,572

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Summary of Significant Accounting Policies

9 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Red Trail Energy, LLC, a North Dakota limited liability company (the “Company”), owns and operates a 50 million gallon annual name-plate production ethanol plant near Richardton, North Dakota (the “Plant”).

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. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, inventory, and allowance for doubtful accounts. Actual results could differ from those estimates.

Net Income Per Unit

Net income per unit is calculated on a basic and fully diluted basis using the weighted average units outstanding during the period.

Nature of Operations

Nature of Business Red Trail Energy, LLC, a North Dakota limited liability company (the “Company”), owns and operates a 50 million gallon annual name-plate production ethanol plant near Richardton, North Dakota (the “Plant”).

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Revenue

9 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue

REVENUE

Revenue Recognition

The Company recognizes revenue from sales of ethanol and co-products at the point in time when the performance obligations in the contract are met, which is when the customer obtains control of such products and typically occurs upon shipment (depending on the terms of the underlying contracts). Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. In some instances, the Company enters into contracts with customers that contain multiple performance obligations to deliver specified volumes of co-products over a contractual period of less than 12 months. In such instances, the Company allocates the transaction price to each performance obligation identified in the contract based on relative standalone selling prices and recognizes the related revenue when control of each individual product is transferred to the customer in satisfaction of the corresponding performance obligation.

Revenue by Source

The following table disaggregates revenue by major source for the three and nine months ended June 30, 2023 and 2022.

Revenues	For the three months ended June 30, 2023 (unaudited)		For the three months ended June 30, 2022 (unaudited)		For the nine months ended June 30, 2023 (unaudited)		For the nine months ended June 30, 2022 (unaudited)
Ethanol, E85 and Industrial Alcohol	$	38,727,252	$	41,848,981	$	111,546,165	$	129,429,510
Distillers Grains	8,572,529		10,210,240		28,780,739		28,377,801
Syrup	140,032		412,504		512,350		1,335,627
Corn Oil	2,208,059		3,215,625		7,831,189		8,940,871
Other	42,888		33,110		150,149		141,627
Total revenue from contracts with customers	$	49,690,760	$	55,720,460	$	148,820,592	$	168,225,436

Shipping and Handling Costs

We account for shipping and handling activities related to contracts with customers as costs to fulfill our promises to transfer the associated products. Accordingly, we record customer payments associated with shipping and handling costs as a component of revenue and classify such costs as a component of cost of goods sold.

Customer Deposits

Customer deposits are contract liabilities for payments in excess of revenue recognized. Customer deposits are recognized when modified distillers grains customers make prepayments on their contracts. The ending balances for accounts receivable and customer deposits were as follows for the nine months ended June 30, 2023 and June 30, 2022.

	October 1, 2022		October 1, 2021		For the period ended June 30, 2023 (unaudited)		For the period ended June 30, 2022 (unaudited)
Accounts receivable	$	4,879,011	$	1,468,521	$	7,657,890	$	3,793,322
Customer deposits	10,636		11,008		46,593		13,960

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Derivative Instruments

9 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

Commodity Contracts

As part of its hedging strategy, the Company may enter into ethanol, soybean, soybean oil, natural gas and corn commodity-based derivatives in order to protect cash flows from fluctuations caused by volatility in commodity prices in order to protect gross profit margins from potentially adverse effects of market and price volatility on ethanol sales, corn oil sales, and corn purchase commitments where the prices are set at a future date. These derivatives are not designated as effective hedges for accounting purposes. For derivative instruments that are not accounted for as hedges, or for the ineffective portions of qualifying hedges, the change in fair market value is recorded through earnings in the period of change. Ethanol derivative fair market value gains or losses are included in the results of operations and are classified as revenue, and corn derivative changes in fair market value are included in cost of goods sold.

As of:	June 30, 2023 (unaudited)					September 30, 2022
Contract Type	# of Contracts	Notional Amount (Qty)		Fair Value		# of Contracts	Notional Amount (Qty)		Fair Value
Corn options	371	1,855,000	bushels	$	(151,706)	1,080	5,400,000	bushels	$	(1,144,000)
Soybean oil options	—	—	gal	$	—	48	28,800	gal	$	(18,273)
Total fair value				$	(151,706)				$	(1,162,273)
Amounts are combined on the balance sheet - negative numbers represent liabilities

The following tables provide details regarding the Company's derivative financial instruments at June 30, 2023 and September 30, 2022:

Derivatives not designated as hedging instruments:
Balance Sheet - as of June 30, 2023 (unaudited)	Asset		Liability
Commodity derivative instruments, at fair value	$	—	$	151,706
Total derivatives not designated as hedging instruments for accounting purposes	$	—	$	151,706
Balance Sheet - as of September 30, 2022	Asset		Liability
Commodity derivative instruments, at fair value	$	—	$	1,162,273
Total derivatives not designated as hedging instruments for accounting purposes	$	—	$	1,162,273

Statement of Operations Income/(Expense)	Location of gain (loss) in fair value recognized in income	Amount of gain (loss) recognized in income during the three months ended June 30, 2023 (unaudited)		Amount of gain (loss) recognized in income during the three months ended June 30, 2022 (unaudited)		Amount of gain (loss) recognized in income during the nine months ended June 30, 2023 (unaudited)		Amount of gain (loss) recognized in income during the nine months ended June 30, 2022 (unaudited)
Corn derivative instruments	Cost of Goods Sold	$	675,471	$	373,089	$	987,956	$	1,437,628
Ethanol derivative instruments	Revenue	570		—		21,999		424,770
Natural gas derivative instruments	Cost of Goods Sold	45,610		—		74,000		(107,450)
Total		$	721,651	$	373,089	$	1,083,955	$	1,754,948

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Inventory

9 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

Inventory

INVENTORY

Inventory is valued at the lower of cost or net realizable value. Inventory values as of June 30, 2023 and September 30, 2022 were as follows:

	June 30, 2023 (unaudited)		September 30, 2022
Raw materials, including corn, chemicals and supplies	$	9,933,544	$	6,887,201
Work in process	1,657,313		1,340,059
Finished goods, including ethanol and distillers grains	1,603,004		2,702,129
Spare parts	1,836,710		1,614,644
Total inventory	$	15,030,571	$	12,544,033

Lower of cost or net realizable value adjustments for the nine months ended June 30, 2023 and 2022 were as follows:

	For the three months ended June 30, 2023 (unaudited)		For the three months ended June 30, 2022 (unaudited)		For the nine months ended June 30, 2023 (unaudited)		For the nine months ended June 30, 2022 (unaudited)
Loss on firm purchase commitments	$	71,000	$	89,000	$	535,000	$	885,000
Loss on lower of cost or net realizable value adjustment for inventory on hand	$	—	$	53,953	$	74,000	$	53,953
Total loss on lower of cost or net realizable value adjustments	$	71,000	$	142,953	$	609,000	$	938,953

The Company has entered into forward corn purchase contracts under which it is required to take delivery at the contract price. At the time the contracts were created, the price of the contract approximated market price. Subsequent changes in market conditions could cause the contract prices to become higher or lower than market prices. As of June 30, 2023, the average price of corn purchased under certain fixed price contracts, that had not yet been delivered, was greater than the approximated market price. Based on this information, the Company has an estimated loss on firm purchase commitments of $71,000 and $89,000 for the three months ended June 30, 2023 and 2022, respectively. The Company has $535,000 estimated loss on firm purchase commitments for the nine months ended June 30, 2023 compared to $885,000 estimated loss on firm purchase commitments for the nine months ended June 30, 2022. The loss is recorded in “Loss on firm purchase commitments” on the statement of operations and "Accrued loss on firm purchase commitments" on the balance sheet. The amount of the potential loss was determined by applying a methodology similar to that used in the impairment valuation with respect to inventory. Given the uncertainty of future ethanol prices, future losses on the outstanding purchase commitments could be recorded in future periods.

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Bank Financing

9 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Bank Financing

BANK FINANCING

Ethanol Recovery Program

On July 13, 2020, we received a $5.41 million loan through the Bank of North Dakota's Ethanol Recovery Program and Cornerstone Bank ("Cornerstone"). The Ethanol Recovery Program was developed by the North Dakota Ethanol Producers Association and the Bank of North Dakota to use the existing Biofuels Partnership in Assisting Community Expansion ("PACE") program and Value-added Guarantee Loan program to help ethanol production facilities weather the economic challenges caused by the COVID-19 pandemic. Ethanol producers could qualify for up to $15 million of a low interest loan of 1% based on the amount of such producers' annual corn grind. On December 3, 2021 we received forgiveness of $2.65 million of the loan. The forgiveness was recorded as other income. The outstanding balance as of June 30, 2023 was $524,000. The maturity date of the loan is July 13, 2025. The fixed interest rate on June 30, 2023 was 3.75% with an interest rate being bought down through the Bank of North Dakota to 1%.

Revolving Loan

On February 3, 2022 we renewed our $10 million revolving loan (the "Revolving Loan") with Cornerstone. On February 3, 2022 the maturity date was extended to March 31, 2022. On April 8, 2022 the Revolving Loan was renewed. The new maturity date was April 7, 2023. Subsequent to year end the Revolving Loan was renewed and now has a maturity date of April 4, 2024 (see note 12). At June 30, 2023, we had $10 million available under the Revolving Loan. The variable interest rate on June 30, 2023 was 7.250%.

Construction Loans

On January 22, 2020, we entered into a $7 million construction loan (the "First Construction Loan") with Cornerstone. The original maturity date of the Construction Loan was June 1, 2021. On June 3, 2021 we extended the maturity date to February 1, 2022. On April 8, 2022 the Construction Loan was renewed and the maturity date was extended to October 8, 2022. On October 28, 2022, the First Construction Loan was consolidated and replaced with the Consolidated Loan (below).

On February 1, 2021 we entered into a $28 million construction loan (the "Second Construction Loan") with Cornerstone for the carbon capture and storage project. The maturity date of the Second Construction Loan was January 31, 2022. On February 17, 2022 the maturity date was extended to March 15, 2022. On April 8, 2022 we renewed the CCS Construction Loan and the maturity date was extended to October 8, 2022. On October 28, 2022, the Second Construction loan was consolidated and replaced with the Consolidated Loan (below).

On October 28, 2022, we entered into a $25 million loan to replace the First Construction Loan and Second Construction Loan (the "Consolidated Loan"). The maturity date of the Consolidated Loan is January 31, 2032. The fixed interest rate is 4.65%. The outstanding balance as of June 30, 2023, was $22.2 million.

Each of the Company's loans are secured by a lien on substantially all of the assets of the Company.

Schedule of debt maturities and finance lease liabilities for the twelve months ending June 30	Totals
2023	$	2,560,714
2024	2,135,403
2025	2,229,314
2026	2,335,215
2027	2,446,147
Thereafter	11,043,853
Total	$	22,750,646

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Fair Value Measurements

9 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

The following table provides information on those liabilities that are measured at fair value on a recurring basis as of June 30, 2023 and September 30, 2022, respectively.

					Fair Value Measurement Using
	Carrying Amount as of June 30, 2023 (unaudited)		Fair Value as of June 30, 2023 (unaudited)		Level 1		Level 2		Level 3
Liabilities
Commodities derivative instruments	$	151,706	$	151,706	$	151,706	$	—	$	—
Total	$	151,706	$	151,706	$	151,706	$	—	$	—
					Fair Value Measurement Using
	Carrying Amount as of September 30, 2022		Fair Value as of September 30, 2022		Level 1		Level 2		Level 3
Liabilities
Commodities derivative instruments	$	1,162,273	$	1,162,273	$	1,162,273	$	—	$	—
Total	$	1,162,273	$	1,162,273	$	1,162,273	$	—	$	—

The fair value of the corn, ethanol, soybean oil and natural gas derivative instruments is based on quoted market prices in an active market.

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Leases

9 Months Ended

Jun. 30, 2023

Leases [Abstract]

leases disclosure text block

LEASES

The Company leases railcar and plant equipment. Operating lease right of use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate, unless an implicit rate is readily determinable, as the discount rate for each lease in determining the present value of lease payments. For the nine months ended June 30, 2023, the Company's estimated discount rate was 7.25%. Operating lease expense is recognized on a straight-line basis over the lease term.

The Company determines if an arrangement is a lease or contains a lease at inception. The Company's existing leases have remaining lease terms of approximately one year to seven years, which may include options to extend the leases when it is reasonably certain the Company will exercise those options. At June 30, 2023 the weighted average remaining lease term was six years. The Company does not have lease arrangements with residual value guarantees, sale leaseback terms, or material restrictive covenants. The Company does not have any sublease agreements.

The Company is generally responsible for maintenance, taxes, and utilities for leased equipment. Rent expense for operating leases was approximately $747,000 and $767,000 for the nine months ended June 30, 2023 and 2022, respectively.

Equipment under financing leases consists of office equipment and plant equipment. At June 30, 2023 and September 30, 2022, equipment under financing leases was as follows:

	June 30, 2023		September 30, 2022
Equipment	$	493,414	$	493,414
Less accumulated amortization	(237,416)		(219,833)
Net equipment under financing lease	$	255,998	$	273,581

At June 30, 2023, the Company had the following minimum commitments, which at inception had non-cancellable terms of more than one year. Amounts shown below are for the 12 month periods ending June 30:

	Operating Leases		Financing Leases
2023	$	342,538	$	4,602
2024	315,817		1,836
2025	337,225
2026	334,921
2027	575,620
Total minimum lease commitments	$	1,906,121	6,438
Less amount representing interest			—
Present value of minimum lease commitments included in notes payable on the balance sheet			$	6,438

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Commitments and Contingencies

9 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Firm Purchase Commitments for Corn

To ensure an adequate supply of corn to operate the Plant, the Company enters into contracts to purchase corn from local farmers and elevators. At June 30, 2023, the Company had various fixed price contracts for the purchase of approximately 4.8 million bushels of corn. Using the stated contract price for the fixed price contracts, the Company had commitments of approximately $30.9 million related to the 4.8 million bushels under contract.

Water

On April 21, 2015, we entered into a ten-year contract to purchase raw water from Southwest Water Authority in order to meet the Plant's water requirements. Our contract requires us to purchase a minimum of 160 million gallons of water per year. The minimum estimated obligation for this contract is $424,000 per year.

Profit and Cost Sharing Agreement

The Company entered into a Profit and Cost Sharing Agreement with Bismarck Land Company, LLC, which became effective on November 1, 2016. The Profit and Cost Sharing Agreement provides that the Company will share 70% of the net revenue generated by the Company from business activities which are brought to the Company by Bismarck Land Company, LLC and conducted on the real estate purchased from the Bismarck Land Company, LLC. The real estate was initially purchased in exchange for 2 million membership units of the Company at $1.66 per unit. This obligation will terminate ten years after the real estate closing date of October 11, 2016 or after Bismarck Land Company, LLC receives $10 million in proceeds from the agreement. In addition, the Profit and Cost Sharing Agreement provides that the Company will pay Bismarck Land Company, LLC 70% of any net proceeds received by the Company from the sale of the subject real estate if a sale were to occur prior to termination of this obligation in accordance with the $10 million cap or the ten-year term of this obligation. The Company has paid Bismarck Land Company, LLC $1,647,581 as of June 30, 2023.

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Related Party Transactions

9 Months Ended

Jun. 30, 2023

Related Party Transactions [Abstract]

Related Party Transactions

RELATED PARTY TRANSACTIONS

The Company has balances and transactions in the normal course of business with various related parties for the purchase of corn, sale of distillers grains, and sale of ethanol. The related parties include unit holders, members of the board of governors of the Company, and RPMG, Inc. (“RPMG”). Significant related party activity affecting the financial statements is as follows:

	June 30, 2023 (unaudited)		September 30, 2022
Balance Sheet
Accounts receivable	$	6,964,686	$	4,086,689
Accounts payable	1,611,580		60,412
Accrued expenses	—		7,645

	For the three months ended June 30, 2023 (unaudited)		For the three months ended June 30, 2022 (unaudited)		For the nine months ended June 30, 2023 (unaudited)		For the nine months ended June 30, 2022 (unaudited)
Statement of Operations
Revenues	$	47,556,566	$	53,334,537	$	137,492,078	$	155,186,145
Cost of goods sold	674,171		982,595		2,688,422		2,978,410
General and administrative	—		—		39,889		—
Inventory Purchases	$	6,248,650	$	5,672,336	$	26,714,488	$	30,069,765

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Uncertainties Impacting the Ethanol Industry and Our Future Operations

9 Months Ended

Jun. 30, 2023

Uncertainties Impacting the Ethanol Industry and Our Future Operations [Abstract]

Uncertainties Impacting the Ethanol Industry and Our Future Operations

UNCERTAINTIES IMPACTING THE ETHANOL INDUSTRY AND OUR FUTURE OPERATIONS

During volatile market conditions, the Company experiences certain risks and uncertainties, which could have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol and distillers 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. The Company's operating and financial performance is largely driven by prices at which the Company sells ethanol and distillers grains and by the cost at which it is able to purchase corn for operations. 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, although since 2005 the prices of ethanol and gasoline began a divergence with ethanol, which has generally been selling 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 programs, global political or economic issues, including but not limited to the war in Ukraine and sanctions associated therewith, or global damaging growing conditions, such as plant disease or adverse weather, including drought, increased fertilizer costs as well as global conflicts.

The Company's financial performance is highly dependent on the Federal Renewable Fuels Standard ("RFS"), which requires that a certain amount of renewable fuels must be used each year in the United States. Corn based ethanol, such as the ethanol the Company produces, can be used to meet a portion of the RFS requirement. In November 2013, the EPA issued a proposed rule which would reduce the RFS for 2014, including the RFS requirement related to corn based ethanol. The EPA proposed rule was subject to a comment period which expired in January 2014. On November 30, 2015, the EPA released its final ethanol use requirements for 2014, 2015 and 2016, which were lower than the statutory requirements in the RFS. However, the final RFS for 2017 equaled the statutory requirement which was also the case for the 2018, 2019, 2020, 2021, and 2022 RFS final rules. The final RFS for 2022 was significantly larger than 2021, with a final volume requirement of 20.63 billion gallons and a supplemental standard of .25 billion gallons.

The Company anticipates that the results of operations during the remainder of fiscal year 2023 will continue to be affected by volatility in the commodity markets. The volatility is due to various factors, including uncertainty with respect to the availability and supply of corn, increased demand for grain from global and national markets, speculation in the commodity markets, and demand for corn from the ethanol industry.

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Member's Equity

9 Months Ended

Jun. 30, 2023

Equity [Abstract]

Member's Equity

MEMBER'S EQUITY

Changes in member's equity for the nine months ended June 30, 2023 and 2022.

	Class A Member Units		Additional Paid in Capital		Accumulated Deficit/Retained Earnings		Treasury Units		Total Member Equity
Balances - September 30, 2022	$	39,044,595	$	75,541	$	46,880,539	$	(159,540)	$	85,841,135
Net income	—		—		1,865,215		—		1,865,215
Balances December 31, 2022	$	39,044,595	$	75,541	$	48,745,754	$	(159,540)	$	87,706,350
Distribution	—		—		(6,024,235)		—		(6,024,235)
Net (loss)	—		—		(799,450)		—		(799,450)
Balances - March 31, 2023	$	39,044,595	$	75,541	$	41,922,069	$	(159,540)	$	80,882,665
Distribution $0.10 per unit	$	—	$	—	$	(2,006,423)	$	—	$	(2,006,423)
Net income	$	—	$	—	$	136,250	$	—	$	136,250
Balances - June 30, 2023	$	39,044,595	$	75,541	$	40,051,896	$	(159,540)	$	79,012,492

	Class A Member Units		Additional Paid in Capital		Accumulated Deficit/Retained Earnings		Treasury Units		Total Member Equity
Balances - September 30, 2021	$	39,044,595	$	75,541	$	31,034,079	$	(159,540)	$	69,994,675
Net income	—		—		19,371,546		—		19,371,546
Balances - December 31, 2021	$	39,044,595	$	75,541	$	50,405,625	$	(159,540)	$	89,366,221
Distribution	—		—		(9,624,072)		—		(9,624,072)
Net income	—		—		4,439,004		—		4,439,004
Balances - March 31, 2022	$	39,044,595	$	75,541	$	45,220,557	$	(159,540)	$	84,181,153
Distribution $0.10 per unit					(4,026,149)				(4,026,149)
Net income	—		—		9,921,072		—		9,921,072
Balances - June 30, 2022	$	39,044,595	$	75,541	$	51,115,480	$	(159,540)	$	90,076,076

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Subsequent Event	9 Months Ended
	Jun. 30, 2023
Subsequent Events [Abstract]
Subsequent Event	SUBSEQUENT EVENTSOn July 7th 2023 the Company paid the distribution payable to the shareholders.

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Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Jun. 30, 2023
Accounting Policies [Abstract]
Accounting Estimates	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. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, inventory, and allowance for doubtful accounts. Actual results could differ from those estimates.
Net Income Per Unit	Net Income Per UnitNet income per unit is calculated on a basic and fully diluted basis using the weighted average units outstanding during the period.
Recently Issued Accounting Pronouncements

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Revenue (Tables)

9 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table disaggregates revenue by major source for the three and nine months ended June 30, 2023 and 2022.

Revenues	For the three months ended June 30, 2023 (unaudited)		For the three months ended June 30, 2022 (unaudited)		For the nine months ended June 30, 2023 (unaudited)		For the nine months ended June 30, 2022 (unaudited)
Ethanol, E85 and Industrial Alcohol	$	38,727,252	$	41,848,981	$	111,546,165	$	129,429,510
Distillers Grains	8,572,529		10,210,240		28,780,739		28,377,801
Syrup	140,032		412,504		512,350		1,335,627
Corn Oil	2,208,059		3,215,625		7,831,189		8,940,871
Other	42,888		33,110		150,149		141,627
Total revenue from contracts with customers	$	49,690,760	$	55,720,460	$	148,820,592	$	168,225,436

Deposit Liabilities, Type

The ending balances for accounts receivable and customer deposits were as follows for the nine months ended June 30, 2023 and June 30, 2022.

	October 1, 2022		October 1, 2021		For the period ended June 30, 2023 (unaudited)		For the period ended June 30, 2022 (unaudited)
Accounts receivable	$	4,879,011	$	1,468,521	$	7,657,890	$	3,793,322
Customer deposits	10,636		11,008		46,593		13,960

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Derivative Instruments (Tables)

9 Months Ended

Jun. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments Commodity Contracts

As of:	June 30, 2023 (unaudited)					September 30, 2022
Contract Type	# of Contracts	Notional Amount (Qty)		Fair Value		# of Contracts	Notional Amount (Qty)		Fair Value
Corn options	371	1,855,000	bushels	$	(151,706)	1,080	5,400,000	bushels	$	(1,144,000)
Soybean oil options	—	—	gal	$	—	48	28,800	gal	$	(18,273)
Total fair value				$	(151,706)				$	(1,162,273)
Amounts are combined on the balance sheet - negative numbers represent liabilities

Derivatives Not Designated As Hedging Instruments, Balance Sheet

The following tables provide details regarding the Company's derivative financial instruments at June 30, 2023 and September 30, 2022:

Derivatives not designated as hedging instruments:
Balance Sheet - as of June 30, 2023 (unaudited)	Asset		Liability
Commodity derivative instruments, at fair value	$	—	$	151,706
Total derivatives not designated as hedging instruments for accounting purposes	$	—	$	151,706
Balance Sheet - as of September 30, 2022	Asset		Liability
Commodity derivative instruments, at fair value	$	—	$	1,162,273
Total derivatives not designated as hedging instruments for accounting purposes	$	—	$	1,162,273

Derivatives Not Designated as Hedging Instruments, Statement of Operations

Statement of Operations Income/(Expense)	Location of gain (loss) in fair value recognized in income	Amount of gain (loss) recognized in income during the three months ended June 30, 2023 (unaudited)		Amount of gain (loss) recognized in income during the three months ended June 30, 2022 (unaudited)		Amount of gain (loss) recognized in income during the nine months ended June 30, 2023 (unaudited)		Amount of gain (loss) recognized in income during the nine months ended June 30, 2022 (unaudited)
Corn derivative instruments	Cost of Goods Sold	$	675,471	$	373,089	$	987,956	$	1,437,628
Ethanol derivative instruments	Revenue	570		—		21,999		424,770
Natural gas derivative instruments	Cost of Goods Sold	45,610		—		74,000		(107,450)
Total		$	721,651	$	373,089	$	1,083,955	$	1,754,948

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Inventory (Tables)

9 Months Ended

Jun. 30, 2023

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory is valued at the lower of cost or net realizable value. Inventory values as of June 30, 2023 and September 30, 2022 were as follows:

	June 30, 2023 (unaudited)		September 30, 2022
Raw materials, including corn, chemicals and supplies	$	9,933,544	$	6,887,201
Work in process	1,657,313		1,340,059
Finished goods, including ethanol and distillers grains	1,603,004		2,702,129
Spare parts	1,836,710		1,614,644
Total inventory	$	15,030,571	$	12,544,033

Long-term Purchase Commitment

Lower of cost or net realizable value adjustments for the nine months ended June 30, 2023 and 2022 were as follows:

	For the three months ended June 30, 2023 (unaudited)		For the three months ended June 30, 2022 (unaudited)		For the nine months ended June 30, 2023 (unaudited)		For the nine months ended June 30, 2022 (unaudited)
Loss on firm purchase commitments	$	71,000	$	89,000	$	535,000	$	885,000
Loss on lower of cost or net realizable value adjustment for inventory on hand	$	—	$	53,953	$	74,000	$	53,953
Total loss on lower of cost or net realizable value adjustments	$	71,000	$	142,953	$	609,000	$	938,953

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Debt (Tables)

9 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Maturities of Long-term Debt

ach of the Company's loans are secured by a lien on substantially all of the assets of the Company.

Schedule of debt maturities and finance lease liabilities for the twelve months ending June 30	Totals
2023	$	2,560,714
2024	2,135,403
2025	2,229,314
2026	2,335,215
2027	2,446,147
Thereafter	11,043,853
Total	$	22,750,646

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Fair Value Measurements (Tables)

9 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table provides information on those liabilities that are measured at fair value on a recurring basis as of June 30, 2023 and September 30, 2022, respectively.

					Fair Value Measurement Using
	Carrying Amount as of June 30, 2023 (unaudited)		Fair Value as of June 30, 2023 (unaudited)		Level 1		Level 2		Level 3
Liabilities
Commodities derivative instruments	$	151,706	$	151,706	$	151,706	$	—	$	—
Total	$	151,706	$	151,706	$	151,706	$	—	$	—
					Fair Value Measurement Using
	Carrying Amount as of September 30, 2022		Fair Value as of September 30, 2022		Level 1		Level 2		Level 3
Liabilities
Commodities derivative instruments	$	1,162,273	$	1,162,273	$	1,162,273	$	—	$	—
Total	$	1,162,273	$	1,162,273	$	1,162,273	$	—	$	—

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Leases, Codification Topic 840 (Tables)

9 Months Ended

Jun. 30, 2023

Leases [Abstract]

Schedule of Capital Leased Assets

Equipment under financing leases consists of office equipment and plant equipment. At June 30, 2023 and September 30, 2022, equipment under financing leases was as follows:

	June 30, 2023		September 30, 2022
Equipment	$	493,414	$	493,414
Less accumulated amortization	(237,416)		(219,833)
Net equipment under financing lease	$	255,998	$	273,581

Schedule of Future Minimum Payments for Capital Leases

At June 30, 2023, the Company had the following minimum commitments, which at inception had non-cancellable terms of more than one year. Amounts shown below are for the 12 month periods ending June 30:

	Operating Leases		Financing Leases
2023	$	342,538	$	4,602
2024	315,817		1,836
2025	337,225
2026	334,921
2027	575,620
Total minimum lease commitments	$	1,906,121	6,438
Less amount representing interest			—
Present value of minimum lease commitments included in notes payable on the balance sheet			$	6,438

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Related Party Transactions (Tables)

9 Months Ended

Jun. 30, 2023

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

Significant related party activity affecting the financial statements is as follows:

	June 30, 2023 (unaudited)		September 30, 2022
Balance Sheet
Accounts receivable	$	6,964,686	$	4,086,689
Accounts payable	1,611,580		60,412
Accrued expenses	—		7,645

	For the three months ended June 30, 2023 (unaudited)		For the three months ended June 30, 2022 (unaudited)		For the nine months ended June 30, 2023 (unaudited)		For the nine months ended June 30, 2022 (unaudited)
Statement of Operations
Revenues	$	47,556,566	$	53,334,537	$	137,492,078	$	155,186,145
Cost of goods sold	674,171		982,595		2,688,422		2,978,410
General and administrative	—		—		39,889		—
Inventory Purchases	$	6,248,650	$	5,672,336	$	26,714,488	$	30,069,765

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Member's Equity (Tables)

9 Months Ended

Jun. 30, 2023

Equity [Abstract]

Schedule of Changes in Member's Equity

Changes in member's equity for the nine months ended June 30, 2023 and 2022.

	Class A Member Units		Additional Paid in Capital		Accumulated Deficit/Retained Earnings		Treasury Units		Total Member Equity
Balances - September 30, 2022	$	39,044,595	$	75,541	$	46,880,539	$	(159,540)	$	85,841,135
Net income	—		—		1,865,215		—		1,865,215
Balances December 31, 2022	$	39,044,595	$	75,541	$	48,745,754	$	(159,540)	$	87,706,350
Distribution	—		—		(6,024,235)		—		(6,024,235)
Net (loss)	—		—		(799,450)		—		(799,450)
Balances - March 31, 2023	$	39,044,595	$	75,541	$	41,922,069	$	(159,540)	$	80,882,665
Distribution $0.10 per unit	$	—	$	—	$	(2,006,423)	$	—	$	(2,006,423)
Net income	$	—	$	—	$	136,250	$	—	$	136,250
Balances - June 30, 2023	$	39,044,595	$	75,541	$	40,051,896	$	(159,540)	$	79,012,492

	Class A Member Units		Additional Paid in Capital		Accumulated Deficit/Retained Earnings		Treasury Units		Total Member Equity
Balances - September 30, 2021	$	39,044,595	$	75,541	$	31,034,079	$	(159,540)	$	69,994,675
Net income	—		—		19,371,546		—		19,371,546
Balances - December 31, 2021	$	39,044,595	$	75,541	$	50,405,625	$	(159,540)	$	89,366,221
Distribution	—		—		(9,624,072)		—		(9,624,072)
Net income	—		—		4,439,004		—		4,439,004
Balances - March 31, 2022	$	39,044,595	$	75,541	$	45,220,557	$	(159,540)	$	84,181,153
Distribution $0.10 per unit					(4,026,149)				(4,026,149)
Net income	—		—		9,921,072		—		9,921,072
Balances - June 30, 2022	$	39,044,595	$	75,541	$	51,115,480	$	(159,540)	$	90,076,076

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Summary of Significant Accounting Policies - Nature of Business (Details) gal in Millions	3 Months Ended		9 Months Ended
	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) gal	Jun. 30, 2022 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
Product Information [Line Items]
Net cash provided by operating activities			$ 2,244,426	$ 29,620,520
Cash, cash equivalents and restricted cash	$ 8,733,100	$ 23,501,660	8,733,100	23,501,660	$ 11,152,015	$ 5,215,244
Loss on firm purchase commitments	$ 71,000	$ 89,000	$ 535,000	$ 885,000
Ethanol
Product Information [Line Items]
Annual production capacity | gal			50

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Revenue (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	$ 49,690,760	$ 55,720,460	$ 148,820,592	$ 168,225,436
Accounts receivable, primarily related party	7,657,890	3,793,322	7,657,890	3,793,322	$ 4,879,011
Other Liabilities, Current	46,593	13,960	46,593	13,960	$ 10,636
Ethanol, E85 and Industrial Alcohol
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	38,727,252	41,848,981	111,546,165	129,429,510
Distillers Grains
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	8,572,529	10,210,240	28,780,739	28,377,801
Syrup
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	140,032	412,504	512,350	1,335,627
Corn Oil
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	2,208,059	3,215,625	7,831,189	8,940,871
Other
Disaggregation of Revenue [Line Items]
Total revenue from contracts with customers	$ 42,888	$ 33,110	$ 150,149	$ 141,627

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Derivative Instruments - Commodity Contracts (Details)	Jun. 30, 2023 USD ($) gal contract bu	Sep. 30, 2022 USD ($) contract bu gal
Commodity Contract | Commodity
Derivative [Line Items]
Liabilities	$ (151,706)	$ 1,162,273
Corn | Corn options
Derivative [Line Items]
Number of Contracts | contract	371	1,080
Notional Amount (Qty) | bu	1,855,000	5,400,000
Liabilities	$ (151,706)	$ (1,144,000)
Soybean Oil | Corn options
Derivative [Line Items]
Number of Contracts | contract	0	48
Notional Amount (Qty) | gal	0	28,800
Liabilities	$ 0	$ (18,273)

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Derivative Instruments - Balance Sheet (Details) - Commodity Contract - Not Designated as Hedging Instrument - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Derivatives, Fair Value [Line Items]
Derivative Asset, Fair Value, Gross Asset	$ 0	$ 0
Derivative Liability, Fair Value, Gross Liability	151,706	1,162,273
Fair Value	0	0
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value	$ 151,706	$ 1,162,273

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Derivative Instruments - Income Statement (Details) - Not Designated as Hedging Instrument - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Corn | Cost of Goods Sold
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	$ 675,471	$ 373,089	$ 987,956	$ 1,437,628
Ethanol | Revenue
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	570	0	21,999	424,770
Natural gas | Cost of Goods Sold
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	45,610	0	74,000	(107,450)
Commodity Contract
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Income, Net	$ 721,651	$ 373,089	$ 1,083,955	$ 1,754,948

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- Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022
Inventory Disclosure [Abstract]
Raw materials, including corn, chemicals and supplies	$ 9,933,544		$ 9,933,544		$ 6,887,201
Work in process	1,657,313		1,657,313		1,340,059
Finished goods, including ethanol and distillers grains	1,603,004		1,603,004		2,702,129
Spare parts	1,836,710		1,836,710		1,614,644
Inventory	15,030,571		15,030,571		$ 12,544,033
Loss on firm purchase commitments	$ 71,000	$ 89,000	$ 535,000	$ 885,000

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Inventory - Total Loss on Lower of Cost or Market Adjustment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Inventory Disclosure [Abstract]
Loss on firm purchase commitments	$ 71,000	$ 89,000	$ 535,000	$ 885,000
Lower of cost or market inventory adjustment	0	53,953	74,000	53,953
Total loss on lower of cost or market adjustments	$ 71,000	$ 142,953	$ 609,000	$ 938,953

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Bank Financing - Narrative (Details) - USD ($)		9 Months Ended
	Dec. 03, 2021	Jun. 30, 2023	Feb. 01, 2021	Jul. 13, 2020	Jan. 22, 2020
Debt Instrument [Line Items]
Long-term Debt		$ 22,750,646
Long-Term Debt, Maturity, Year One		2,560,714
Long-Term Debt, Maturity, Year Two		2,135,403
Long-Term Debt, Maturity, Year Three		2,229,314
Long-Term Debt, Maturity, Year Four		2,335,215
Long-Term Debt, Maturity, Year Five		2,446,147
Long-Term Debt, Maturity, after Year Five		11,043,853
Revolving loan | Revolving loan
Debt Instrument [Line Items]
Line of Credit Facility, Remaining Borrowing Capacity		$ 10,000,000
Line of Credit Facility, Interest Rate at Period End		7.25%
Bank of North Dakota Ethanol Recovery Progrm		(3.75%)
Bank of North Dakota Ethanol Recovery Program, Rate after Buy Down		1.00%
Long term debt, revolving loan			$ 10,000,000
Revolving loan | Construction Loans [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity					$ 7,000,000
Revolving loan | Bank of North Dakota and Cornerstone Bank
Debt Instrument [Line Items]
Long-term Debt				$ 5,410,000
debt instrument, outstanding amount		$ 524,000
Gain (Loss) on Extinguishment of Debt	$ 2.65
Revolving loan | Carbon Capture and Storage
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		25,000,000	$ 28
Line of Credit Facility, Fair Value of Amount Outstanding		$ 22,200,000
Revolving loan | consolidated loan
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate at Period End		4.65%
Bank of North Dakota and Cornerstone Bank | Revolving loan
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity		$ 15
Line of Credit Facility, Interest Rate at Period End		100.00%

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Fair Value Measurements (Details) - Assets - USD ($)	Jun. 30, 2023	Sep. 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodities derivative instruments	$ 151,706	$ 1,162,273
Liabilities	151,706	1,162,273
Financial Instruments, Owned, Physical Commodities At Carrying Amount	151,706	1,162,273
Derivative Instruments Not Designated as Hedging Instruments, Asset, at Carrying Amount	151,706	1,162,273
Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodities derivative instruments	151,706	1,162,273
Liabilities	151,706	1,162,273
Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodities derivative instruments	0	0
Liabilities	0	0
Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodities derivative instruments	0	0
Liabilities	$ 0	$ 0

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Leases, Codification Topic 840 (Details) - USD ($)	9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022
Capital Leased Assets [Line Items]
Discount rate (percentage)	7.25%
Operating Leased Assets [Line Items]
Current Year	$ 342,538
Year One	315,817
Year Two	337,225
Year Three	334,921
Year Four	575,620
Total minimum lease commitments	1,906,121
Current Year	4,602
Year One	1,836
Year Two
Year Three
Year Four
Finance Lease, Liability, Undiscounted Excess Amount	0
Total minimum lease commitments	6,438
Finance Lease, Liability	$ 6,438
Weighted average remaining lease term	6 years
Minimum
Operating Leased Assets [Line Items]
Lease terms	1 year
Maximum
Operating Leased Assets [Line Items]
Lease terms	7 years
Equipment [Member]
Capital Leased Assets [Line Items]
Finance Lease, Right-of-Use Asset, before Accumulated Amortization	$ 493,414		$ 493,414
Finance Lease, Right-of-Use Asset, Accumulated Amortization	237,416		219,833
Finance Lease, Right-of-Use Asset, after Accumulated Amortization, Total	255,998		$ 273,581
Transportation Equipment
Capital Leased Assets [Line Items]
Rent expense for operating leases	$ 747,000	$ 767,000

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Commitments and Contingencies (Details) $ / shares in Units, shares in Millions, gal in Millions, bu in Millions			9 Months Ended
	Nov. 01, 2016 USD ($) $ / shares shares	Oct. 11, 2016	Jun. 30, 2023 USD ($) bu gal	Sep. 30, 2022 USD ($)
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Accrued payments			$ 0	$ 7,645
Profit and Cost Sharing Agreement
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Percent Of Net Revenue Generated From Business Activities Conducted On Purchased Real Estate	70.00%
Stock Issued During Period, Shares, Purchase of Assets | shares	2
Shares Issued, Price Per Share | $ / shares	$ 1.66
Length Of Contract	10 years	10 years
Payments for (Proceeds from) Other Real Estate Partnerships	$ 10,000,000
Guarantor Obligations, Liquidation Proceeds, Percentage	70.00%
Proceeds from Sale of Real Estate			$ 1,647,581
Bushels of corn | Fixed price contract
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional amount, volume | bu			4.8
Commitments			$ 30,900,000
Raw water
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Contract term			10 years
Minimum purchase, volume | gal			160
Minimum estimated liability			$ 424,000

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Related Party Transactions (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022
Related Party Transactions [Abstract]
Accounts Receivable, Related Parties	$ 6,964,686		$ 6,964,686		$ 4,086,689
Accounts Payable, Related Parties	1,611,580		1,611,580		60,412
Accrued payments	0		0		$ 7,645
Revenues	47,556,566	$ 53,334,537	137,492,078	$ 155,186,145
Cost of goods sold	674,171	982,595	2,688,422	2,978,410
General and administrative	0	0	39,889	0
Inventory Purchases	$ 6,248,650	$ 5,672,336	$ 26,714,488	$ 30,069,765

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Member's Equity - Schedule of Changes in Member's Equity (Details) - USD ($)	3 Months Ended						9 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2023	Jun. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	$ 80,882,665	$ 87,706,350	$ 85,841,135	$ 84,181,153	$ 89,366,221	$ 69,994,675	$ 85,841,135	$ 69,994,675
Net income	136,250	(799,450)	1,865,215	9,921,072	4,439,004	19,371,546	1,202,015	33,731,622
Ending balance	79,012,492	80,882,665	87,706,350	90,076,076	84,181,153	89,366,221	79,012,492	90,076,076
Finance lease asset acquired	(2,006,423)
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Paid		(6,024,235)		(4,026,149)	(9,624,072)		(6,023,250)	(9,635,404)
Class A Member Units
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	39,044,595	39,044,595	39,044,595	39,044,595	39,044,595	39,044,595	39,044,595	39,044,595
Ending balance	39,044,595	39,044,595	39,044,595	39,044,595	39,044,595	39,044,595	39,044,595	39,044,595
Additional Paid in Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	75,541	75,541	75,541	75,541	75,541	75,541	75,541	75,541
Ending balance	75,541	75,541	75,541	75,541	75,541	75,541	75,541	75,541
Accumulated Deficit/Retained Earnings
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance	41,922,069	48,745,754	46,880,539	45,220,557	50,405,625	31,034,079	46,880,539	31,034,079
Net income	136,250	(799,450)	1,865,215	9,921,072	4,439,004	19,371,546
Ending balance	40,051,896	41,922,069	48,745,754	51,115,480	45,220,557	50,405,625	40,051,896	51,115,480
Finance lease asset acquired	(2,006,423)
Distribution Made to Limited Liability Company (LLC) Member, Cash Distributions Paid		(6,024,235)		(4,026,149)	(9,624,072)
Treasury Units
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Ending balance	$ (159,540)			$ (159,540)			$ (159,540)	$ (159,540)
Treasury Stock, Value		$ (159,540)	$ (159,540)		$ (159,540)	$ (159,540)			$ (159,540)	$ (159,540)