GOLDEN GRAIN ENERGY - FORM 10-Q

Attached files

Attached files

GOLDEN GRAIN ENERGY Reports

Also read

file	filename
EX-31.1 - CERTIFICATION - GOLDEN GRAIN ENERGY	a311certification43013.htm
EX-32.1 - CERTIFICATION - GOLDEN GRAIN ENERGY	a321certification43013.htm
EX-31.2 - CERTIFICATION - GOLDEN GRAIN ENERGY	a312certification43013.htm
EX-32.2 - CERTIFICATION - GOLDEN GRAIN ENERGY	a322certification43013.htm
EXCEL - IDEA: XBRL DOCUMENT - GOLDEN GRAIN ENERGY	Financial_Report.xls

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



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

	For the quarterly period ended	April 30, 2013

	OR

o	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

	For the transition period from to .

	COMMISSION FILE NUMBER 000-51177

GOLDEN GRAIN ENERGY, LLC

(Exact name of registrant as specified in its charter)



Iowa				02-0575361
(State or other jurisdiction of incorporation or organization)				(I.R.S. Employer Identification No.)

1822 43^rd Street SW, Mason City, Iowa 50401
(Address of principal executive offices)

(641) 423-8525
(Registrant's telephone number, including area code)

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

x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

x Yes o No

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



Large Accelerated Filer o	Accelerated Filer o
Non-Accelerated Filer x	Smaller Reporting Company o

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

o Yes x No

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

As of June 13, 2013, there were 18,963,000 Class A membership units outstanding and 920,000 Class B membership units outstanding.

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	14
Item 3. Quantitative and Qualitative Disclosures about Market Risk	21
Item 4. Controls and Procedures	22
PART II. OTHER INFORMATION	22
Item 1. Legal Proceedings	22
Item 1A. Risk Factors	22
Item 2. Unregistered Sales of Equity Securities	22
Item 3. Defaults Upon Senior Securities	22
Item 4. Mine Safety Disclosures	22
Item 5. Other Information	22
Item 6. Exhibits	23
SIGNATURES	23

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

GOLDEN GRAIN ENERGY, LLC

Balance Sheet



ASSETS	April 30, 2013		October 31, 2012
	(Unaudited)
Current Assets
Accounts receivable	$	8,182,429	$	6,733,711
Other receivables	764,005		860,725
Derivative instruments	2,285,371		414,646
Inventory	13,122,148		9,893,958
Prepaid expenses and other	1,564,438		1,312,326
Total current assets	25,918,391		19,215,366

Property and Equipment
Land and land improvements	11,262,333		11,262,333
Building and grounds	25,761,752		25,761,752
Grain handling equipment	13,457,627		13,457,627
Office equipment	320,345		320,345
Plant and process equipment	79,693,676		75,454,525
Construction in progress	223,055		1,482,255
	130,718,788		127,738,837
Less accumulated depreciation	61,356,481		56,617,389
Net property and equipment	69,362,307		71,121,448

Other Assets
Investments	24,196,714		23,602,518
Grant receivable, net of current portion	1,517,342		1,457,420
Debt issuance costs, net of accumulated amortization (2013 $32,437; 2012 $26,635)	67,009		50,312
Total other assets	25,781,065		25,110,250

Total Assets	$	121,061,763	$	115,447,064

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

GOLDEN GRAIN ENERGY, LLC

Balance Sheet



LIABILITIES AND MEMBERS' EQUITY	April 30, 2013		October 31, 2012
	(Unaudited)
Current Liabilities
Outstanding checks in excess of bank balance	$	653,166	$	360,338
Current portion long-term debt	81,605		34,454
Accounts payable	5,458,828		6,705,426
Accrued expenses	916,259		951,126
Deferred revenue	464,379		415,345
Total current liabilities	7,574,237		8,466,689

Long-term Liabilities
Deferred compensation	190,447		243,122
Long-term debt, net of current maturities	25,032,144		2,742,744
Deferred revenue, net of current portion	1,776,289		1,300,513
Total long-term liabilities	26,998,880		4,286,379

Commitments and Contingencies

Members' Equity (19,883,000 and 24,460,000 units issued and outstanding, respectively)	86,488,646		102,693,996

Total Liabilities and Members’ Equity	$	121,061,763	$	115,447,064

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

GOLDEN GRAIN ENERGY, LLC

Statements of Operations (Unaudited)



	Three Months Ended			Three Months Ended			Six Months Ended			Six Months Ended
	April 30, 2013			April 30, 2012			April 30, 2013			April 30, 2012

Revenues	$	93,880,209		$	79,018,996		$	179,288,371		$	163,387,273

Cost of Goods Sold	91,745,943			78,168,358			178,119,660			155,589,702

Gross Profit	2,134,266			850,638			1,168,711			7,797,571

Operating Expenses	548,657			549,222			1,320,040			1,216,201

Operating Income (Loss)	1,585,609			301,416			(151,329		)	6,581,370

Other Income (Expense)
Other income	39,735			162,167			39,735			162,957
Interest expense	(170,389		)	(55,521		)	(293,622		)	(110,407		)
Equity in net income of investments	1,103,452			405,470			1,199,866			3,659,151
Total	972,798			512,116			945,979			3,711,701

Net Income	$	2,558,407		$	813,532		$	794,650		$	10,293,071

Basic & diluted net income per unit	$	0.13		$	0.03		$	0.04		$	0.42
Weighted average units outstanding for the calculation of basic & diluted net income per unit	19,883,000			24,460,000			21,408,666			24,460,000
Distributions Per Unit	$	—		$	—		$	—		$	0.65

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

GOLDEN GRAIN ENERGY, LLC

Statements of Cash Flows (Unaudited)



	Six Months Ended			Six Months Ended
	April 30, 2013			April 30, 2012

Cash Flows from Operating Activities
Net income	$	794,650		$	10,293,071
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,744,894			4,472,552
Unrealized (gain) on risk management activities	(1,870,725		)	(397,085		)
Amortization of deferred revenue	(226,518		)	(215,966		)
Accretion of interest on grant receivable	(59,923		)	(91,008		)
Earnings in excess of distributions from investments	(594,196		)	(1,234,501		)
Deferred compensation expense	15,216			39,059
Change in assets and liabilities
Accounts receivable	(1,448,718		)	10,408,347
Inventory	(3,228,190		)	(1,775,711		)
Prepaid expenses and other	(155,392		)	(81,210		)
Accounts payable	(1,077,797		)	461,299
Accrued expenses	(34,867		)	(6,634		)
Deferred compensation payable	(67,891		)	(158,743		)
Net cash (used in) provided by operating activities	(3,209,457		)	21,713,470

Cash Flows from Investing Activities
Capital expenditures	(2,648,750		)	(3,068,513		)
Net cash (used in) investing activities	(2,648,750		)	(3,068,513		)

Cash Flows from Financing Activities
Increase in outstanding checks in excess of bank balance	292,828			—
Proceeds from long-term debt	22,353,435			—
Payments for long-term debt	(16,884		)	(52,469		)
Payments for offering costs	(22,500		)	—
Redemption of membership units	(17,000,000		)	—
Distributions to members	—			(15,899,000		)
Payments received on deferred contract	251,328			—
Net cash provided by (used in) financing activities	5,858,207			(15,951,469		)

Net Increase in Cash and Equivalents	—			2,693,488

Cash and Equivalents – Beginning of Period	—			485,088

Cash and Equivalents – End of Period	$	—		$	3,178,576

Supplemental Cash Flow Information
Interest paid net of capitalized interest (2013 $50,878; 2012 $0)	$	236,549		$	49,225

Supplemental Schedule of Non Cash Activities
Accounts Payable related to Construction in Process & Capital Expenditures	$	497,895		$	532,905

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

GOLDEN GRAIN ENERGY, LLC

Statements of Changes in Members' Equity (Unaudited)

For the six months ended April 30, 2013



Balance - October 31, 2012	$	102,693,996
Redemption of 4,577,000 membership units	(17,000,000		)
Net Income	794,650
Balance - April 30, 2013	$	86,488,646

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and 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 year ended October 31, 2012, contained in the Company's annual report on Form 10-K for 2012.

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

Nature of Business

Golden Grain Energy, LLC (Golden Grain Energy) is approximately a 110 million gallon annual production ethanol plant near Mason City, Iowa. The Company sells its production of ethanol, distiller grains with solubles and corn oil primarily in the continental United States.

Organization

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

Accounting Estimates

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

Cash and Equivalents

The Company's cash balances are maintained in bank depositories and periodically exceeded federally insured limits during the year. The Company has not experienced any losses in connection with these balances.

Receivables

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

Investments

The Company has less than a 20% investment interest in four unlisted companies in related industries. These investments are being accounted for by the equity method of accounting under which the Company's share of net income is recognized as income in the Company's income statement and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account.

The fiscal years of Renewable Products Marketing Group, LLC (RPMG), Guardian Eagle, LLC and Guardian Energy Janesville, LLC end on September 30 and the fiscal years of Absolute Energy, LLC and Homeland Energy Solutions, LLC end on December 31. The Company consistently follows the practice of recognizing the net income based on the most recent reliable data. Therefore, the net income which is reported in the Company's income statement for the three months ended April 30, 2013 for all companies is based on the investee's results for the quarter ended March 31, 2013.

Revenue and Cost Recognition

Revenue from the sale of the Company's products is recognized at the time title to the goods and all risks of ownership transfer to the customers. This generally occurs upon shipment, loading of the goods or when the customer picks up the goods. Collectability of revenue is reasonably assured based on historical evidence of collectability between the Company and its customers. Interest income is recognized as earned.

Shipping costs incurred by the Company in the sale of ethanol, distiller grains and corn oil are not specifically identifiable and as a result, revenue from the sale of ethanol, distiller grains and corn oil are recorded based on the net selling price reported to the

GOLDEN GRAIN ENERGY, LLC

Notes to Financial Statements

(Unaudited)

Company from its marketer. Railcar lease costs incurred by the Company in the sale and shipment of distiller grain products are included in cost of goods sold.

Inventory

Inventories are generally valued at the lower of weighted average cost or market. In the valuation of inventories and purchase commitments, market is based on current replacement values except that it does not exceed net realizable values and is not less than net realizable values reduced by allowances for approximate normal profit margin.

Property & Equipment

The Company incurred site selection and plan development costs on the proposed site that were capitalized. Significant additions, betterments and costs to acquire land options are capitalized, while expenditures for maintenance and repairs are charged to operations when incurred. Property and equipment are stated at costs. The Company uses the straight-line method of computing depreciation over the estimated useful lives between 5 and 40 years.

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

Investment in commodities contracts, derivative instruments and hedging activities

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

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

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

Net income per unit

Basic and diluted net income per unit are computed using the weighted-average number of Class A and B units outstanding during the period.

Environmental liabilities

The Company's operations are subject to environmental laws and regulations adopted by various governmental authorities in the jurisdiction in which it operates. These laws require the Company to investigate and remediate the effects of the release or disposal of materials at its locations. Accordingly, the Company has adopted policies, practices and procedures in the areas of pollution control, occupational health and the production, handling, storage and use of hazardous materials to prevent material environmental or other damage, and to limit the financial liability which could result from such events. Environmental liabilities are recorded when the Company's liability is probable and the costs can be reasonably estimated. No expense or liability has been recorded as of April 30, 2013 or October 31, 2012 for environmental liabilities.

GOLDEN GRAIN ENERGY, LLC

Notes to Financial Statements

(Unaudited)

Fair Value of financial instruments

Financial instruments include cash and equivalents, receivables, accounts payable, accrued expenses, long-term debt and derivative instruments. The fair value of derivative financial instruments is based on quoted market prices. The fair value of the long-term debt is estimated based on level 3 inputs based on the current anticipated interest rate which management believes would currently be available to the Company for similar issues of debt, taking into account the current credit risk of the Company and the other market factors. Due to the variable nature of the interest rate charged against the debt, the fair value of the debt approximates carrying value. The fair value of other current financial instruments is estimated to approximate carrying value due to the short-term nature of these instruments.

Risks and Uncertainties

The Company has certain risks and uncertainties that it will experience during volatile market conditions, which can have a severe impact on operations. The Company's revenues are derived from the sale and distribution of ethanol, distiller grains and corn oil to customers primarily located in the United States. Corn for the production process is supplied to the plant primarily from local agricultural producers and from purchases on the open market. For the first six months of 2013, ethanol sales accounted for approximately 75% of total revenue, distiller grains sales accounted for approximately 22% of total revenue and corn oil sales accounted for approximately 3% of total revenue while corn costs averaged approximately 84.0% of cost of goods sold.

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

Reclassification

Certain items in the cash flow statement for the period ended April 30, 2012 have been reclassified to conform to the 2013 classification. The changes were made to agree with the classification used in the April 30, 2013 financial statements.

2. INVENTORY

Inventory consisted of the following as of April 30, 2013 and October 31, 2012:



	April 30, 2013		October 31, 2012
Raw Materials	$	7,041,634	$	3,049,045
Work in Process	2,259,779		2,449,296
Finished Goods	3,820,735		4,395,617
Totals	$	13,122,148	$	9,893,958

3. BANK FINANCING

The Company has entered into a master loan agreement with Farm Credit Services of America (FLCA) which includes a revolving term loan and a seasonal revolving loan with original maximum borrowings of $30,000,000 and $5,000,000 and maturing on February 1, 2019 and February 1, 2020, respectively. Interest on the term loan is payable monthly at 3.15% above the one-month LIBOR (3.35% as of April 30, 2013). The borrowings are secured by substantially all the assets of the Company. On December 26, 2012, the Company executed an amended credit agreement that increased the total loan availability from $22.5 million to $35 million. The revolving term loan maximum borrowings are reduced by $2,500,000 on a semi-annual basis starting in August 2013.

In addition, the Company is subject to certain financial covenants including but not limited to minimum working capital and net worth requirements and limitations on distributions. Failure to comply with the protective loan covenants or maintain the required financial ratios may cause acceleration of the outstanding principal balances on the loans and/or imposition of fees or penalties. As of April 30, 2013, the Company had approximately $25.0 million outstanding and $10.0 million total additional available to borrow under the credit agreement.

GOLDEN GRAIN ENERGY, LLC

Notes to Financial Statements

(Unaudited)

The Company has other notes payable of approximately $68,000 and $154,000 outstanding as of April 30, 2013 and October 31, 2012, respectively.

4. RELATED PARTY TRANSACTIONS

The Company purchased corn and materials from members of its Board of Directors or Risk Management Committee that own or manage elevators. Purchases during the three and six months ended April 30, 2013 totaled approximately $18,776,000 and $38,093,000, respectively. Purchases during the same periods of 2012 totaled approximately $29,447,000 and $62,287,000, respectively.

The Company entered into an agreement with Homeland Energy Solutions, LLC in December 2008. Pursuant to the agreement, the companies have agreed to share the compensation costs associated with each position covered by the agreement partially in an effort to reduce the costs of administrative overhead. The Company recorded a reduction of approximately $34,000 and $100,000 to operating expenses during the three and six months ended April 30, 2013 and $63,000 and $114,000 for the same periods of 2012, respectively.

5. EMPLOYEE BENEFIT PLANS

The Company has a deferred phantom unit compensation plan for certain employees equal to 1% of net income. One-third of the amount is paid in cash immediately and the other two-thirds have a five year vesting schedule. During the three and six months ended April 30, 2013, the Company recorded compensation expense related to this plan of approximately $0 and $15,000, respectively. During the same periods of 2012, the Company recorded compensation expense related to this plan of approximately $15,000 and $39,000. As of April 30, 2013, and October 31, 2012, the Company had a liability of approximately $190,000 and $243,000 outstanding as deferred compensation and has approximately $9,300 to be recognized as future compensation expense. Three of the employees covered under this plan are fully vested and one employee has approximately three years left to vest. The amount to be recognized in future years as compensation expense is estimated based on the greater of fair market value or book value of the Company's membership units as of April 30, 2013. Fair value is determined by recent trading activity of the Company's membership units. The Company had approximately 2,700 unvested equivalent phantom units outstanding under this plan as of April 30, 2013.

6. COMMITMENTS, CONTINGENCIES AND AGREEMENTS

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

The Company has entered into marketing agreements with a marketing company, in which the Company has an investment, for the exclusive rights to market, sell and distribute the entire ethanol, distiller grains and corn oil inventory produced by the Company. The distiller grains agreement was executed in December 2010 for an initial nine month period of time beginning on January 1, 2011 and automatically extends for an additional one year term unless written notice is given. The marketing fees are presented net in revenues.

Approximate sales and marketing fees related to the agreements in place as of April 30, 2013 are as follows:



	Three Months Ended April 30,				Six Months Ended April 30,
	2013		2012		2013		2012
Sales ethanol, distiller grains & corn oil	$	94,910,000	$	78,820,000	$	180,620,000	$	161,634,000
Marketing fees	150,000		200,000		296,000		338,000

As of	April 30, 2013		October 31, 2012
Amount due from marketer of ethanol, distiller grains & corn oil	$	8,141,000	$	6,216,000

GOLDEN GRAIN ENERGY, LLC

Notes to Financial Statements

(Unaudited)

7. RISK MANAGEMENT

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

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

Unrealized gains and losses on forward contracts are deemed "normal purchases" under derivative accounting guidelines and, therefore, are not marked to market in the Company's financial statements. The following table represents the approximate amount of realized gains (losses) and changes in fair value recognized in earnings on commodity contracts for periods ended April 30, 2013 and 2012 and the fair value of derivatives as of April 30, 2013 and October 31, 2012:



	Income Statement Classification	Realized Gain (Loss)			Unrealized Gain (Loss)			Total Gain (Loss)
Derivatives not designated as hedging instruments:
Commodity Contracts for the	Revenue	$	(596,000	)	$	(284,000	)	$	(880,000	)
three months ending April 30, 2013	Cost of Goods Sold	(1,248,000		)	(857,000		)	(2,105,000		)
	Total	$	(1,844,000	)	$	(1,141,000	)	$	(2,985,000	)

Commodity Contracts for the	Revenue	$	293,000		$	106,000		$	399,000
three months ending April 30, 2012	Cost of Goods Sold	(225,000		)	(46,000		)	(271,000		)
	Total	$	68,000		$	60,000		$	128,000

Commodity Contracts for the	Revenue	$	(462,000	)	$	(574,000	)	$	(1,036,000	)
six months ending April 30, 2013	Cost of Goods Sold	(393,000		)	(828,000		)	(1,221,000		)
	Total	$	(855,000	)	$	(1,402,000	)	$	(2,257,000	)

Commodity Contracts for the	Revenue	$	68,000		$	2,023,000		$	2,091,000
six months ending April 30, 2012	Cost of Goods Sold	(92,000		)	(1,626,000		)	(1,718,000		)
	Total	$	(24,000	)	$	397,000		$	373,000



	Balance Sheet Classification	April 30, 2013			October 31, 2012
Futures and option contracts through May 2013
In gain position		$	396,000		$	486,000
In loss position		(2,289,000		)	(977,000		)
Cash held by broker		4,178,000			906,000
	Current Asset	$	2,285,000		$	415,000

GOLDEN GRAIN ENERGY, LLC

Notes to Financial Statements

(Unaudited)

As of April 30, 2013, the Company had outstanding purchase commitments of which approximately $9,864,000 were with related parties:

As of April 30, 2013, the Company has fixed price contracts in place for approximately 24% of our anticipated corn needs, approximately 0% of our natural gas needs and approximately 18% of our ethanol sales for the next 12 months.

8. FAIR VALUE MEASUREMENTS

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

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

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

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

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

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

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



	Total			Level 1	Level 2			Level 3
Derivative financial instruments
April 30, 2013
Assets	$	396,000		—	$	396,000		—
Liabilities	(2,289,000		)	—	(2,289,000		)	—
October 31, 2012
Assets	$	486,000		—	$	486,000		—
Liabilities	(977,000		)	—	(977,000		)	—

GOLDEN GRAIN ENERGY, LLC

Notes to Financial Statements

(Unaudited)

9. INVESTMENTS

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



Balance Sheet	3/31/2013		9/30/2012
Current Assets	$	259,003	$	224,095
Other Assets	297,583		313,018
Current Liabilities	165,220		163,804
Long-term Debt	75,729		40,396
Members’ Equity	315,638		332,913

	Three Months Ended				Six Months Ended
Income Statement	3/31/2013		3/31/2012		3/31/2013		3/31/2012
Revenue	$	225,713	$	245,250	$	489,447	$	545,075
Gross Profit	14,535		11,418		21,945		60,231
Net Income	9,743		5,942		12,572		48,651

The Company recorded equity in net income from investments related to the entities described above of approximately $1,103,000 and $1,200,000 for the three and six months ended April 30, 2013, respectively. For the three and six months ended April 30, 2012 the Company recorded equity in net income from these entities of approximately $405,000 and $3,659,000, respectively.

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

Forward Looking Statements

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


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


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


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


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


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


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


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


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


•	Lack of transport, storage and blending infrastructure preventing our products from reaching high demand markets;


•	Changes in federal and/or state laws and environmental regulations (including the Renewable Fuel Standard, implementation of E15 or any federal and/or state ethanol tax incentives);


•	Changes and advances in ethanol production technology;


•	Competition from alternative fuel additives;


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


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

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

Overview

Golden Grain Energy, LLC was formed as an Iowa limited liability company on March 18, 2002, for the purpose of constructing, owning and operating a fuel-grade ethanol plant near Mason City in north central Iowa. Since December 2004, we have been engaged in the production of ethanol and distiller grains at the plant and have produced corn oil since February 2009. References to "we," "us," "our" and the "Company" refer to Golden Grain Energy, LLC. We have capacity to produce approximately 110 million gallons of ethanol per year.

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

On December 12, 2012, we executed an agreement with our largest member to repurchase and retire all of the units owned by this member. We agreed to close on this repurchase prior to December 31, 2012. We repurchased and retired 4,577,000 membership units in exchange for $17 million. In order to finance this repurchase, we entered into amended credit agreements, described below, with our primary lender, Farm Credit Services of America, FLCA and Farm Credit Services of America, PCA (collectively "Farm Credit").

On December 26, 2012, we executed amended credit agreements with Farm Credit. The primary purposes of these credit agreement amendments were to increase the amount that we have available to borrow on our long-term revolving loans and to amend our financial loan covenants. Specifically, we executed an amendment to the Master Loan Agreement, a $30 million Revolving Term Loan Supplement and a $5 million Revolving Term Loan Supplement.

Pursuant to the amended credit agreements, Farm Credit increased our credit availability on our long-term revolving loans from $22.5 million to $35 million. In addition, the amended credit agreements increased our minimum working capital covenant from $12 million to $15 million and reduced our minimum tangible net worth covenant from $62.5 million to $55 million. Our $30 million Revolving Term Loan is subject to a reducing feature which provides that the amount of capital we can borrow decreases by $2.5 million semi-annually starting on August 1, 2013 and continuing until this revolving loan matures on February 1, 2019. Our $5 million Revolving Term Loan is not subject to any reductions until it matures on February 1, 2020.

Results of Operations for the Three Months Ended April 30, 2013 and 2012

The following table shows the results of our operations and the percentage of our revenue, cost of goods sold, operating expenses and other items to total revenue in our statement of operations for the three months ended April 30, 2013 and 2012:



	2013			2012
Income Statement Data	Amount		%	Amount		%
Revenue	$	93,880,209	100.0	$	79,018,996	100.0
Cost of Goods Sold	91,745,943		97.7	78,168,358		98.9
Gross Profit	2,134,266		2.3	850,638		1.1
Operating Expenses	548,657		0.6	549,222		0.7
Operating Income	1,585,609		1.7	301,416		0.4
Other Income	972,798		1.0	512,116		0.6
Net Income	$	2,558,407	2.7	$	813,532	1.0

Revenue. Our total revenue was higher for the second quarter of 2013 compared to the same period of 2012, primarily due to a higher sales price for the ethanol and distiller grains we sold during the 2013 period. For the second quarter of 2013, ethanol sales accounted for approximately 76% of our total revenue, distiller grains sales accounted for approximately 21% of our total revenue and corn oil sales accounted for approximately 3% of our total revenue. For the second quarter of 2012, ethanol sales accounted for approximately 79% of our total revenue, distiller grains sales accounted for approximately 18% of our total revenue and corn oil sales accounted for approximately 3% of our total revenue.

The average price we received for our ethanol during the second quarter of 2013 was approximately 14% higher than the average price we received for the same period of 2012. Management attributes this increase in the average price we received for our ethanol with general increases in commodity prices during the second quarter of 2013 compared to the same period of 2012. This resulted in higher than usual ethanol prices which positively impacted operating margins. Management anticipates strong ethanol demand during our third quarter of 2013. Management anticipates that ethanol imports from Brazil may increase during the fourth quarter of 2013 which may result in lower ethanol prices and less favorable operating margins during that time.

Our total ethanol gallons sold increased by approximately 2% during the second quarter of 2013 compared to the same period of 2012 due to additional production because we had fewer days when the ethanol plant was not operating during the second quarter of 2013 compared to the same period of 2012. Management anticipates that ethanol production will remain relatively consistent during the remaining quarters of our 2013 fiscal year provided that we can continue to secure corn at prices that allow us to operate the ethanol plant profitably. Management anticipates that our average ethanol sales price will be higher during the third quarter of 2013 but then return to lower levels during the fourth quarter of 2013.

The average price we received for our distiller grains increased during the second quarter of 2013 compared to the same period of 2012. Management attributes this increase in distiller grains prices with high corn prices which typically positively impact distiller grains prices as well as a tight supply of corn which is keeping the price of distiller grains up in relationship to the price of corn. The average price we received for our dried distiller grains during the second quarter of 2013 was approximately 35% greater than during the same period of 2012. The average price we received for our modified/wet distiller grains during the second quarter of 2013 was approximately 98% greater than during the same period of 2012. We typically market the vast majority of our distillers grains in the dried form compared to the modified/wet form due to market conditions which favor dried distiller grains. Management makes decisions regarding what form of distiller grains we produce and sell based on these market conditions.

Management anticipates that distiller grains prices will continue to fluctuate in relationship to corn prices. We continue to experience strong export demand for distiller grains which management attributes to higher corn prices and higher world demand for animal feed.

We sold approximately the same amount of distiller grains during the second quarter of 2013 compared to the same period of 2012. Management anticipates that distiller grains sales will decrease slightly during the third quarter of 2013 due to our scheduled maintenance shutdown but then return to comparable levels during the fourth quarter of 2013.

The average price we received for our corn oil during the second quarter of 2013 was approximately 8% lower than during the same period of 2012. Management attributes this decrease in the average price we received for our corn oil with increased corn oil supplies. Management anticipates that corn oil prices will continue at recent levels as long as corn prices remain high and animal feed demand is steady. We sold approximately 16% more corn oil during the second quarter of 2013 compared to the same period of 2012. Management attributes this increase in corn oil sales with improved production processes and procedures which allowed us to significantly increase our corn oil production. Management anticipates continued strong corn oil sales due to these process improvements.

We enter into various derivative instrument positions in order to protect the price we receive for our ethanol. These derivative instrument positions resulted in a combined realized and unrealized loss of approximately $880,000 during the second quarter of 2013. For the second quarter of 2012, we had a combined realized and unrealized gain on our ethanol derivative instrument positions of approximately $399,000. We recognize the gains or losses that result from changes in the value of our derivative instruments related to ethanol in revenues as the changes occur.

Cost of Goods Sold. The primary raw materials used to produce ethanol, distiller grains and corn oil are corn and natural gas. Our total cost of goods sold related to corn increased by approximately 16% during the second quarter of 2013 compared to the same period of 2012. Our average cost per bushel of corn during the second quarter of 2013 was approximately 13% higher than during the same period of 2012. Management attributes this increase in corn costs with tight corn supplies, delayed planting and generally increasing commodity prices. Corn prices have been volatile during our last three fiscal years and management anticipates that corn prices will continue to be volatile during the rest of our 2013 fiscal year and beyond. Management believes that this corn price volatility is related to decreased corn carryover and unfavorable weather conditions that could negatively impact corn production in the United States or abroad. Further, management anticipates that local tight corn supplies may lead to increased prices we have to pay to purchase corn, particularly during our fourth quarter of 2013, which may negatively impact our operating margins.

Our corn consumption was 3% higher during the second quarter of 2013 compared to the same period of 2012 because of a slight increase in the gallons we produced during the second quarter of 2013 compared to the same period of 2012. Management anticipates that our corn consumption will remain at the current levels for the remaining part of 2013 unless tight corn supplies during our fourth quarter require us to reduce ethanol production levels.

Our total cost of goods sold related to natural gas costs increased by approximately 81% during the second quarter of 2013 compared to the same period of 2012. The average price we paid per mmBtu of natural gas increased by approximately 72% for the second quarter of 2013 compared to the same period of 2012. Management attributes this increase in the average price we paid for our natural gas with certain natural gas commitments we had in place which are at rates higher than market prices for the second quarter of 2013. Management anticipates that natural gas prices will continue at their current levels unless the natural gas industry experiences production problems or large demand increases. Management believes that the United States may start exporting natural gas in the future which could increase natural gas demand and result in higher domestic natural gas prices. Our natural gas consumption was approximately 5% higher during the second quarter of 2013 compared to the same period of 2012 because of increased ethanol production.

We enter into various derivative instrument positions in order to protect the price we pay for our corn and natural gas. These derivative instrument positions resulted in a combined realized and unrealized loss of approximately $2.1 million during the second quarter of 2013. For the second quarter of 2012, our derivative instrument positions resulted in a combined realized and unrealized loss of approximately $271,000. We recognize the gains or losses that result from changes in the value of our derivative instruments from corn and natural gas in cost of goods sold as the changes occur.

Operating Expenses. Our operating expenses were approximately the same for the second quarter of 2013 compared to the same period of 2012.

Other Income (Expense). Our interest expense was higher during the second quarter of 2013 compared to the same period of 2012 due to increased borrowing on our credit facilities with Farm Credit. Our equity in the net income of our investments

increased during the second quarter of 2013 compared to the same period of 2012 due to general increases in profitability within the ethanol industry. Our investments are primarily in other companies involved in the ethanol industry.

Results of Operations for the Six Months Ended April 30, 2013 and 2012

The following table shows the results of our operations and the percentage of revenues, cost of goods sold, operating expenses and other items to total revenues in our statement of operations for the six months ended April 30, 2013 and 2012:



	2013					2012
Income Statement Data	Amount			%		Amount		%
Revenue	$	179,288,371		100.0		$	163,387,273	100.0
Cost of Goods Sold	178,119,660			99.3		155,589,702		95.2
Gross Profit	1,168,711			0.7		7,797,571		4.8
Operating Expenses	1,320,040			0.7		1,216,201		0.7
Operating Income (Loss)	(151,329		)	(0.1	)	6,581,370		4.0
Other Income	945,979			0.5		3,711,701		2.3
Net Income	$	794,650		0.4		$	10,293,071	6.3

Revenues. Our total revenues were higher for the first six months of 2013 compared to the same period of 2012. This increase in revenue is a result of an increase in the average sale price we received for the ethanol and distiller grains we sold in 2013 as compared to 2012. Management attributes these increases to generally higher commodity prices.

The average price we received for our ethanol was approximately 5% higher for the first six months of 2013 compared to the same period of 2012. Management attributes this increase in ethanol prices with higher gasoline prices and reduced ethanol inventories. Offsetting the increase in our average ethanol sale price, we produced approximately 2% fewer gallons of ethanol in the first six months of 2013 compared to the same period of 2012. During the first six months of 2013, we experienced combined realized and unrealized loss on our ethanol derivatives of approximately $1.0 million which decreased our revenue. By comparison, we experienced combined realized and unrealized gains on our ethanol derivative instruments of approximately $2.1 million during the first six months of 2012 which increased our revenue.

The average price we received for our dried distillers grains was approximately 35% greater for the first six months of 2013 compared to the same period of 2012. In addition, the average price we received for our modified/wet distillers grains was approximately 106% greater for the first six months of 2013 compared to the same period of 2012. Management attributes these price increases with less corn supply which positively impacted the market price of distiller grains. On a total tons basis, we sold approximately 2% less distiller grains during the first six months of 2013 compared to the same period of 2012.

We sold approximately 8% more pounds of corn oil during the first six months of 2013 compared to the same period of 2012. Management attributes this increase in corn oil sales with better performance from the oil separation equipment during 2013 compared to 2012 as well as implementation of operating efficiencies. Offsetting the increase in total pounds of corn oil sold, the average price we received for our corn oil was 12% lower for the first six months of 2013 compared to the same period of 2012. Management attributed this decrease in corn oil price with higher supplies of corn oil.

Cost of Goods Sold. Our cost of goods sold was significantly higher for the first six months of 2013 compared to the same period of 2012. Our average cost per bushel of corn was approximately 17% higher during the first six months of 2013 compared to the same period of 2012. We consumed 2% less bushels of corn during the first six months of 2013 compared to the same period of 2012. Management attributes this decrease in corn consumption with a slight decrease in production for the first six months of 2013 compared to 2012.

Our natural gas costs increased by approximately 33% during the first six months of 2013 compared to the same period of 2012. The average price we paid per mmBtu of natural gas was approximately 33% higher during the first six months of 2013 compared to the same period of 2012. Our natural gas consumption during the first six months of 2013 was approximately 1% higher compared to the first six months of 2012 and our efficiency also decreased by 2% during that same time period. Management attributes this increase in our natural gas costs with increased strength in the natural gas markets and certain natural gas commitments we had in place which were at rates higher than market prices for the first six months of 2012.

We experienced approximately $1.2 million of combined realized and unrealized losses for the first six months of 2013 related to our corn and natural gas derivative instruments which increased our cost of goods sold. By comparison, we experienced approximately $1.7 million of combined realized and unrealized losses for the first six months of 2012 related to our corn and natural gas derivative instruments which increased our cost of goods sold. We recognize the gains or losses that result from the changes in the value of our derivative instruments from corn and natural gas in cost of goods sold as the changes occur. As corn and natural gas prices fluctuate, the value of our derivative instruments are impacted, which affects our financial performance.

Operating Expenses. Our operating expenses were higher during the first six months of 2013 compared to the same period of 2012 primarily due to ethanol promotion costs related to various industry groups which we support.

Other Income (Expense). Other income was lower for the first six months of 2013 compared to the same period of 2012 due primarily to lower income from our investments. Interest expense for the first six months of 2013 was higher than the same period of 2012 because borrowing on our credit facilities during the first six months of 2013 were more than in 2012. Our income from our investments was lower for the first six months of 2013 compared to the same period of 2012 due to unfavorable ethanol margins during the first six months of 2013. Management anticipates income from investments to improve during the third quarter of our 2013 fiscal year due to improved ethanol margins in recent months. Our investments are primarily in other companies involved in the ethanol industry.

Changes in Financial Condition for the Six Months Ended April 30, 2013

Current Assets. The increase in our accounts receivable at April 30, 2013 compared to October 31, 2012 was due to an increase in the selling price for our ethanol. The value of our inventory was higher at April 30, 2013 compared to October 31, 2012 due to having a higher quantity of corn and finished goods inventory on hand at April 30, 2013. Since the completion of the grain bin, we are able to carry more corn inventory at our production facility. Our derivative instruments were higher at April 30, 2013 compared to October 31, 2012 due to having more derivative instrument positions in place and because we were required to maintain more cash in our margin account with our commodities brokers. Our prepaid expenses were higher at April 30, 2013 compared to October 31, 2012 primarily due to insurance premium payments we make in November of each year which represent our premiums for the entire year.

Property and Equipment. The net value of our property and equipment was lower at April 30, 2013 compared to October 31, 2012 due to depreciation. We capitalized approximately $4.1 million for our new grain system, of which approximately $2.6 million was spent during our 2013 fiscal year and have approximately $223,000 in construction in progress at April 30, 2013 related to various capital projects at our production facility.

Other Assets. Our other assets were higher at April 30, 2013 compared to October 31, 2012 due mainly to the increase in value of our various investments during the first six months of 2013.

Current Liabilities. Our accounts payable was lower at April 30, 2013 compared to October 31, 2012 due primarily to lower payables for corn as of April 30, 2013. Checks issued in excess of our bank balances are paid from our line of credit with Farm Credit when the checks are presented for payment.

Long-term Liabilities. Our long-term liabilities were higher at April 30, 2013 compared to October 31, 2012, primarily due to a loan balance of approximately $25,046,000 we had outstanding with our primary lender. This increase in our long-term debt relates primarily to our repurchase of membership units owned by our largest equity holder in December 2012 and also from an increase in corn and ethanol finished goods inventory. Deferred compensation liabilities were lower at April 30, 2013 due to payments we made on our deferred compensation arrangements during the first six months of 2013.

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 at capacity for the next 12 months. As of April 30, 2013, we had approximately $10.0 million available pursuant to our variable line of credit.

We do not currently anticipate seeking additional equity or debt financing in the near term. However, should we experience unfavorable operating conditions in the future, we may have to secure additional debt or equity financing for working capital or other purposes.

We do not currently anticipate any significant purchases of property and equipment that would require us to secure additional capital in the next 12 months. However, management continues to evaluate conditions in the ethanol industry and explore opportunities to improve the efficiency and profitability of our operations which may require capital expenditures.

The following table shows our cash flows for the six months ended April 30, 2013 and 2012:



	Six Months Ended April 30
	2013			2012
Net cash (used in) provided by operating activities	$	(3,209,457	)	$	21,713,470
Net cash (used in) investing activities	(2,648,750		)	(3,068,513		)
Net cash provided by (used in) financing activities	5,858,207			(15,951,469		)

Cash Flow From Operations

Our cash flows from operations for the first six months of 2013 were lower primarily due to a decrease in our net income along with increases in both inventory and accounts receivable and a decrease in accounts payable. We also experienced losses on our derivative instruments that required us to maintain more cash in our margin accounts with our commodities brokers for the first six months of 2013 as compared to the same period of 2012.

Cash Flow From Investing Activities

We used less cash for investing activities during the first six months of 2013 compared to the same period of 2012 primarily due to having less capital expenditures. Our primary capital expenditure during the 2013 period was for our grain handling upgrade project.

Cash Flow From Financing Activities.

During the first six months of 2013, we received proceeds from our long-term debt which we used to fund our unit repurchase in December 2012. We primarily used cash for financing activities during the 2012 period for a distribution we made to our members.

Short-Term and Long-Term Debt Sources

We have a $35 million credit facility with Farm Credit. In exchange for this $35 million credit facility, we executed a mortgage in favor of Farm Credit covering all of our real property and granted Farm Credit a security interest in all of our equipment and other assets. In the event we default on our loans with Farm Credit, Farm Credit may foreclose on our assets, including both our real property and our machinery and equipment.

Variable Line of Credit

We have a long-term revolving line of credit with an original available amount of $35 million. Interest on this loan accrues at 3.15% above the One-Month London Interbank Offered Rate (LIBOR). The interest rate is subject to weekly adjustment. We may elect to enter into a fixed interest rate on this loan at various times throughout the term of the loan as provided in the loan agreements. The maximum principal amount of this loan decreases by $2.5 million semi-annually starting on August 1, 2013 and continuing until February 1, 2019. After February 1, 2019, we will have $5 million available pursuant to this long-term revolving line of credit until it matures on February 1, 2020. In the event any amount is outstanding on this loan in excess of the new credit limit after these periodic reductions, we agreed to repay principal on the loan until we reach the new credit limit. We agreed to pay an annual fee of 0.6% of the unused portion of this loan. As of April 30, 2013, we had approximately $25.0 million outstanding on this loan with an accrued interest rate of 3.35% per year. As of April 30, 2013, we had approximately $10.0 million available to be drawn on this loan.

Administrative Agency Agreement

As part of the Farm Credit loan closing, we entered into an Administrative Agency Agreement with CoBank, ACP ("CoBank"). CoBank purchased a participation interest in the Farm Credit loans and was appointed the administrative agent for

the purpose of servicing the loans. As a result, CoBank will act as the agent for Farm Credit with respect to our loans. We agreed to pay CoBank an annual fee of $5,000 as the agent for Farm Credit.

Covenants

Our credit agreements with Farm Credit are subject to numerous covenants requiring us to maintain various financial ratios. As of April 30, 2013, we were in compliance with all of our loan covenants with Farm Credit. Based on current management projections, we anticipate that we will be in compliance with our loan covenants for the next 12 months and beyond.

Grants and Government Programs

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

Critical Accounting Policies

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

Revenue Recognition

Revenue from the sale of our products is recognized at the time title to the goods and all risks of ownership transfer to the customers. The time of transfer is defined in the specific sales agreement; however, it generally occurs upon shipment, loading of the goods or when the customer picks up the goods. Collectability of revenue is reasonably assured based on historical evidence of collectability between us and our customers. Interest income is recognized as earned.

Shipping costs incurred by us in the sale of ethanol and corn oil are not specifically identifiable and as a result, revenue from the sale of ethanol and corn oil are recorded based on the net selling price reported to us from our marketer. Shipping costs incurred by us in the sale of distiller grain products are included in cost of goods sold.

Investment in Commodities Contracts, Derivative Instruments and Hedging Activities

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

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

Investments

income in the Company's income statement and added to the investment account. Distributions or dividends received from the investments are treated as a reduction of the investment account.

Off-Balance Sheet Arrangements.

We currently have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Interest Rate Risk

We are exposed to market risk from changes in interest rates. Exposure to interest rate risk results primarily from holding revolving lines of credit which bear variable interest rates. Specifically, we had approximately $25.0 million outstanding in variable rate debt as of April 30, 2013. The approximate change to our income for a twelve month period based on a 10% adverse change in interest rates for our variable rate debt as of April 30, 2013 would be approximately $5,000.

Commodity Price Risk

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

As of April 30, 2013, we had price protection in place for approximately 24% of our anticipated corn needs, approximately 0% of our natural gas needs and approximately 18% of our ethanol sales for the next 12 months.

A sensitivity analysis has been prepared to estimate our exposure to ethanol, corn and natural gas price risk. Market risk related to these factors is estimated as the potential change in income resulting from a hypothetical 10% adverse change in the average cost of our corn and natural gas prices and average ethanol price as of April 30, 2013, net of the forward and future contracts used to hedge our market risk for corn and natural gas usage requirements. The volumes are based on our expected use and sale of these commodities for a one year period from April 30, 2013. The results of this analysis, which may differ from actual results, are as follows:



	Estimated Volume Requirements for the next 12 months (net of forward and futures contracts)	Unit of Measure	Hypothetical Adverse Change in Price	Approximate Adverse Change to Income
Natural Gas	3,190,000	MMBTU	10%	$	1,282,000
Ethanol	90,638,000	Gallons	10%	$	21,617,000
Corn	29,104,000	Bushels	10%	$	20,972,000

Liability Risk

We participate in a captive reinsurance company (the "Captive"). The Captive reinsures losses related to worker's compensation, commercial property and general liability. Premiums are accrued by a charge to income for the period to which the premium relates and is remitted by our insurer to the captive reinsurer. The Captive reinsures catastrophic losses in excess of a predetermined amount. Our premiums are structured such that we have made a prepaid collateral deposit estimated for losses

related to the above coverage. The Captive insurer has estimated and collected an amount in excess of the estimated losses but less than the catastrophic loss limit insured by the Captive. We cannot be assessed in excess of the amount in the collateral fund.

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), Walter Wendland, along with our Chief Financial Officer, (the principal financial officer), Christine Marchand, have reviewed and evaluated the effectiveness of our disclosure controls and procedures as of April 30, 2013. Based on this review and evaluation, these officers believe that our disclosure controls and procedures are 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 April 30, 2013, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

The following risk factor is provided due to material changes from the risk factors previously disclosed in our annual report on Form 10-K. The risk factor set forth below should be read in conjunction with the risk factors section and the Management's Discussion and Analysis section for the fiscal year ended October 31, 2012, included in our annual report on Form 10-K.

If exports to Europe are decreased due to the imposition by the European Union of a tariff on U.S. ethanol, ethanol prices may be negatively impacted. The European Union recently concluded an anti-dumping investigation related to ethanol produced in the United States and exported to Europe. As a result of this investigation, the European Union has imposed a tariff of $83.03 per metric ton on ethanol which is produced in the United States and exported to Europe. If exports of ethanol to Europe decrease as a result of this tariff, it could negatively impact the market price of ethanol in the United States. Any decrease in ethanol prices or demand may negatively impact our ability to profitably operate the ethanol plant.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information

None.

Item 6. Exhibits.


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



Exhibit No.			Exhibit
31.1			Certificate Pursuant to 17 CFR 240.13a-14(a)*
31.2			Certificate Pursuant to 17 CFR 240.13a-14(a)*
32.1			Certificate Pursuant to 18 U.S.C. Section 1350*
32.2			Certificate Pursuant to 18 U.S.C. Section 1350*
101			The following financial information from Golden Grain Energy, LLC's Quarterly Report on Form 10-Q for the quarter ended April 30, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Balance Sheets as of April 30, 2013 and October 31, 2012, (ii) Statements of Operations for the three and six months ended April 30, 2013 and 2012, (iii) Statements of Cash Flows for the six months ended April 30, 2013 and 2012, and (iv) the Notes to Condensed Financial Statements.**

* Filed herewith.

** Furnished herewith.

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.



		GOLDEN GRAIN ENERGY, LLC

Date:	June 13, 2013	/s/ Walter Wendland
		Walter Wendland
		President and Chief Executive Officer
		(Principal Executive Officer)

Date:	June 13, 2013	/s/ Christine Marchand
		Christine Marchand
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

Commitments Through

Corn - fixed price

March 2014

Corn - basis contract