SOUTH DAKOTA SOYBEAN PROCESSORS LLC - FORM 10-Q

Attached files

file	filename
EX-31.2 - EXHIBIT 31.2 - SOUTH DAKOTA SOYBEAN PROCESSORS LLC	sdspexhibit312q22015.htm
EX-31.1 - EXHIBIT 31.1 - SOUTH DAKOTA SOYBEAN PROCESSORS LLC	sdsbexhibit311q22015.htm
EX-10.1 - EXHIBIT 10.1 - SOUTH DAKOTA SOYBEAN PROCESSORS LLC	sdspexhibit101q22015.htm
EX-10.4 - EXHIBIT 10.4 - SOUTH DAKOTA SOYBEAN PROCESSORS LLC	sdspexhibit104q22015.htm
EX-32.2 - EXHIBIT 32.2 - SOUTH DAKOTA SOYBEAN PROCESSORS LLC	sdspexhibit322q22015.htm
EX-10.2 - EXHIBIT 10.2 - SOUTH DAKOTA SOYBEAN PROCESSORS LLC	sdspexhibit102q22015.htm
EX-32.1 - EXHIBIT 32.1 - SOUTH DAKOTA SOYBEAN PROCESSORS LLC	sdspexhibit321q22015.htm
EX-10.3 - EXHIBIT 10.3 - SOUTH DAKOTA SOYBEAN PROCESSORS LLC	sdspexhibit103q22015.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

COMMISSION FILE NO. 000-50253

South Dakota Soybean Processors, LLC

(Exact name of registrant as specified in its charter)



South Dakota		46-0462968
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

100 Caspian Avenue; PO Box 500 Volga, South Dakota		57071
(Address of Principal Executive Offices		(Zip Code)

(605) 627-9240

(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.

Yes x 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 ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):



¨ Large Accelerated Filer	¨ Accelerated Filer	¨ Non-Accelerated Filer	x Smaller Reporting Company
		(do not check if a smaller reporting company)

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

¨ Yes x No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: On August 13, 2015, the registrant had 30,419,000 capital units outstanding.

Table of Contents



			Page

Part I.	FINANCIAL INFORMATION		3

	Item I.	Financial Statements (Unaudited)	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	20

	Item 4.	Controls and Procedures	20

Part II.	OTHER INFORMATION		20

	Item 1.	Legal Proceedings	20

	Item 1A.	Risk Factors	20

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20

	Item 3.	Defaults among Senior Securities	21

	Item 4.	Mine Safety Disclosures	21

	Item 5.	Other Information	21

	Item 6.	Exhibits	21

Signatures			21

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

South Dakota Soybean Processors, LLC

Condensed Financial Statements

June 30, 2015 and 2014

South Dakota Soybean Processors, LLC

Condensed Balance Sheets



	June 30, 2015			December 31, 2014
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	4,216,527		$	10,743,946
Trade accounts receivable, less allowance for uncollectible accounts of $360,000 and $0 at June 30, 2015 and December 31, 2014, respectively	20,449,030			23,107,816
Inventories	17,085,118			33,688,242
Margin deposits	4,665,884			2,549,865
Prepaid expenses	1,222,991			1,455,776
Total current assets	47,639,550			71,545,645

Property and equipment	81,482,228			78,583,353
Less accumulated depreciation	(41,023,926		)	(39,832,461		)
Total property and equipment, net	40,458,302			38,750,892

Other assets
Investments in cooperatives	6,300,008			6,836,461
Other intangible assets, net	8,580			4,346
Total other assets	6,308,588			6,840,807

Total assets	$	94,406,440		$	117,137,344

Liabilities and Members' Equity
Current liabilities
Excess of outstanding checks over bank balance	$	7,519,186		$	4,552,153
Current maturities of long-term debt	58,344			57,246
Accounts payable	1,973,605			1,318,838
Accrued commodity purchases	20,685,703			39,747,857
Accrued expenses	1,918,399			2,638,130
Accrued interest	331,552			359,896
Deferred liabilities - current	581,893			961,967
Total current liabilities	33,068,682			49,636,087

Long-term liabilities
Long-term debt, less current maturities	787,096			844,478
Deferred liabilities, less current maturities	10,107			51,782
Total long-term liabilities	797,203			896,260

Commitments and contingencies

Members' equity
Class A Units, no par value, 30,419,000 units issued and outstanding at June 30, 2015 and December 31, 2014	60,540,555			66,604,997

Total liabilities and members' equity	$	94,406,440		$	117,137,344

The accompanying notes are an integral part of these condensed financial statements.

South Dakota Soybean Processors, LLC

Condensed Statements of Operations (Unaudited)

For the Three and Six-Month Periods Ended June 30, 2015 and 2014



	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014

Net revenues	$	90,365,391		113,826,942			$	189,372,995		$	215,097,770

Cost of revenues:
Cost of product sold	74,846,118			98,365,516			153,650,900			184,698,697
Production	5,176,491			5,270,872			10,446,678			10,556,343
Freight and rail	7,746,495			6,396,848			15,442,965			13,098,202
Brokerage fees	166,703			161,111			292,658			299,576
Total cost of revenues	87,935,807			110,194,347			179,833,201			208,652,818

Gross profit	2,429,584			3,632,595			9,539,794			6,444,952

Operating expenses:
Administration	1,081,421			626,986			1,803,392			2,784,454

Operating income	1,348,163			3,005,609			7,736,402			3,660,498

Other income (expense):
Interest expense	(130,410		)	(303,983		)	(287,873		)	(607,679		)
Other non-operating income	324,928			504,192			720,282			1,020,365
Patronage dividend income	—			—			815,798			1,518,032
Total other income (expense)	194,518			200,209			1,248,207			1,930,718

Income from continuing operations before income taxes	1,542,681			3,205,818			8,984,609			5,591,216

Income tax expense	(570		)	(1,870		)	(570		)	(1,870		)

Net income	$	1,542,111		3,203,948			$	8,984,039		$	5,589,346

Basic and diluted earnings per capital unit	$	0.05		$	0.11		$	0.30		$	0.18

Weighted average number of capital units outstanding for calculation of basic and diluted earnings per capital unit	30,419,000			30,419,000			30,419,000			30,419,000

The accompanying notes are an integral part of these condensed financial statements.

South Dakota Soybean Processors, LLC

Condensed Statements of Cash Flows (Unaudited)

For the Six Months Ended Ended June 30, 2015 and 2014



	2015			2014
Operating activities
Net income	$	8,984,039		$	5,589,346
Charges and credits to net income from continuing operations not affecting cash:
Depreciation and amortization	1,193,731			1,067,125
Non-cash patronage dividends	—			(896,799		)
Change in current assets and liabilities	(2,198,535		)	5,556,963
Net cash from operating activities of continuing operations	7,979,235			11,316,635
Net cash from operating activities of discontinued operations	—			300
Net cash used for operating activities	7,979,235			11,316,935

Investing activities
Retirement of patronage dividends	—			124,819
Proceeds from sale of investments	536,453			—
Decrease in member loans	—			145,707
Purchase of property and equipment	(2,898,875		)	(1,820,673		)
Net cash used for investing activities	(2,362,422		)	(1,550,147		)

Financing activities
Change in excess of outstanding checks over bank balances	2,967,033			(9,304,986		)
Net proceeds (payments) from seasonal borrowings	—			3,424,189
Distributions to members	(15,048,481		)	(11,000,000		)
Payments for debt issue costs	(6,500		)	—
Proceeds from long-term debt	43,988,711			14,726,031
Principal payments on long-term debt	(44,044,995		)	(7,612,022		)
Net cash used for financing activities	(12,144,232		)	(9,766,788		)

Net change in cash and cash equivalents	(6,527,419		)	—

Cash and cash equivalents, beginning of period	10,743,946			50

Cash and cash equivalents, end of period	$	4,216,527		$	50

Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	316,217		$	563,938

Income taxes	$	400		$	10,730

The accompanying notes are an integral part of these condensed financial statements.

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

Note 1 - Principal Activity and Significant Accounting Policies

The unaudited condensed financial statements contained herein have been prepared pursuant to the rules and regulations of the Securities Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although South Dakota Soybean Processors, LLC (the “Company”, “LLC”, “we”, “our”, or “us”) believes that the disclosures made are adequate to make the information not misleading.

In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included in the accompanying condensed financial statements. The results of operations and cash flows for interim periods are not necessarily indicative of results for a full year due in part to the seasonal nature of some of the Company’s businesses. The balance sheet data as of December 31, 2014 has been derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

These statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2014, included in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission on March 25, 2015.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

Revenue is recognized when the title to the related products is transferred to the customer. When a sales contract has delivery terms of ‘FOB Shipping Point’, revenue is recognized when the products are shipped. For those sales contracts with delivery terms of ‘FOB Destination’, revenue is not recognized until the products are delivered to the agreed-upon location. Revenues are presented net of discounts and sales allowances.

Recent accounting pronouncements

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements. The Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09 (Revenue from Contracts with Customers), which is effective for annual reporting periods beginning after December 15, 2018.

The FASB issued ASU No. 2015-03 (Interest - Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs), which is effective for annual reporting periods beginning after December 15, 2015. Management has not yet assessed the impact, if any, of adopting this standard.

The FASB issued ASU No. 2015-11 (Inventory: Simplifying the Measurement of Inventory), which is effective for annual reporting periods beginning after December 15, 2016. Management has not yet assessed the impact, if any, of adopting this standard.

Note 2 - Accounts Receivable

Accounts receivable are considered past due when payments are not received on a timely basis in accordance with the Company’s credit terms, which is generally 30 days from invoice date. Accounts considered uncollectible are written off. The Company’s estimate of the allowance for doubtful accounts is based on historical experience, its evaluation of the current status of receivables, and unusual circumstances, if any.

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

The following table presents the aging analysis of trade receivables as of June 30, 2015 and December 31, 2014:



	June 30, 2015		December 31, 2014
Past due:
Less than 30 days past due	$	3,965,300	$	1,732,449
30-60 days past due	232,858		430,672
60-90 days past due	11,854		23,500
Greater than 90 days past due	1,722		38,892
Total past due	4,211,734		2,225,513
Current	16,597,296		20,882,303

Totals	$	20,809,030	$	23,107,816

The following table provides information regarding the Company’s allowance for doubtful accounts receivable as of June 30, 2015 and December 31, 2014:



	June 30, 2015			December 31, 2014

Balances, beginning of period	$	—		$	—
Amounts charged (credited) to costs and expenses	376,404			1,516,052
Additions (deductions)	(16,404		)	(1,516,052		)

Balances, end of period	$	360,000		$	—

In general, cash is applied to the oldest outstanding invoice first, unless payment is for a specified invoice. The Company, on a case by case basis, may charge a late fee of 1 ½% per month on past due receivables.

Note 3 - Inventories

The Company’s inventories consist of the following at June 30, 2015 and December 31, 2014:



	June 30, 2015			December 31, 2014
Finished goods	$	(2,256,333	)	$	16,712,923
Raw materials	19,061,800			16,695,668
Supplies & miscellaneous	279,651			279,651

Totals	$	17,085,118		$	33,688,242

Finished goods and raw materials are valued at estimated market value, which approximates net realizable value. In addition, futures and option contracts are marked to market through cost of revenues, with unrealized gains and losses recorded in the above inventory amounts. This market adjustment caused the finished goods to have a credit balance as of June 30, 2015. Supplies and other inventories are stated at the lower of cost, determined by the first-in, first-out method, or market.

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

Note 4 - Investments in Cooperatives

The Company’s investments in cooperatives consist of the following at June 30, 2015 and December 31, 2014:



	June 30, 2015		December 31, 2014
Minnesota Soybean Processors:
Common stock and Class A Preferred Shares	$	4,785,158	$	4,785,158
Class B Preferred Shares, 8% non-cumulative, convertible	—		575,000
CoBank	1,514,850		1,476,303

Totals	$	6,300,008	$	6,836,461

Note 5 - Property and Equipment

The following is a summary of the Company's property and equipment at June 30, 2015 and December 31, 2014:



	2015							2014
	Cost		Accumulated Depreciation			Net		Net
Land	$	443,816	$	—		$	443,816	$	443,816
Land improvements	785,243		(180,368		)	604,875		630,082
Buildings and improvements	16,650,380		(7,246,065		)	9,404,315		9,610,552
Machinery and equipment	51,306,953		(32,715,147		)	18,591,806		19,191,883
Company vehicles	127,965		(40,485		)	87,480		43,332
Furniture and fixtures	1,482,936		(841,861		)	641,075		699,388
Construction in progress	10,684,935		—			10,684,935		8,131,839

Totals	$	81,482,228	$	(41,023,926	)	$	40,458,302	$	38,750,892

Depreciation of property and equipment was $1,191,465 and $1,066,159 for the six months ended June 30, 2015 and 2014, respectively.

Note 6 - Note Payable – Seasonal Loan

Prior to the amendment described in Note 11, the Company has entered into a revolving credit agreement with CoBank which expires August 1, 2015. Under this agreement, the Company may borrow up to $15 million to finance inventory and accounts receivable. Interest accrues at a variable rate (2.94% at June 30, 2015). Advances on the revolving credit agreement are secured and limited to qualifying inventory and accounts receivable, net of any accrued commodity purchases. There were advances outstanding of $0 and $0 at June 30, 2015 and December 31, 2014, respectively. The remaining available funds to borrow under the terms of the revolving credit agreement are $15.0 million as of June 30, 2015.

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

Note 7 - Long-Term Debt

The following is a summary of the Company's long-term debt at June 30, 2015 and December 31, 2014:



	June 30, 2015			December 31, 2014
Revolving term loan from CoBank, interest at variable rates (3.19% and 3.16% at June 30, 2015 and December 31, 2014, respectively), secured by substantially all property and equipment. Loan matures September 20, 2020.	$	—		$	—
Note payable to Brookings Regional Railroad Authority, due in annual principal and interest installments of $75,500, interest rate at 2.00%, secured by railroad track assets. Note matures June 1, 2020.	845,440			901,724
	845,440			901,724
Less current maturities	(58,344		)	(57,246		)

Totals	$	787,096		$	844,478

Prior to the amendments described in Note 11, the Company entered into an agreement as of January 9, 2015 with CoBank to amend and restate its Master Loan Agreement (MLA), which includes both the revolving term loan and the seasonal loan. Under the terms and conditions of the MLA, CoBank agreed to make advances to the Company for up to $15,500,000 on the revolving term loan. The available commitment decreases in scheduled periodic increments of $1,300,000 every six months starting March 20, 2015 until maturity on September 20, 2020. The principal balance outstanding on the revolving term loan was $0 and $0 as of June 30, 2015 and December 31, 2014, respectively. The remaining commitments available to borrow on the revolving term loan are approximately $14.2 million as of June 30, 2015.

Under this agreement, the Company is subject to compliance with standard financial covenants and the maintenance of certain financial ratios. The Company was in compliance with all covenants and conditions with CoBank as of June 30, 2015.

Effective March 1, 2013, the State of South Dakota Department of Transportation agreed to loan the Brookings County Regional Railway Authority $964,070 for purposes of making improvements to the railway infrastructure near the Company’s soybean processing facility in Volga, South Dakota. In consideration of this secured loan, the Company agreed to provide a guarantee to the State of South Dakota Department of Transportation for the full amount of the loan, plus interest. This guaranty was converted into a direct obligation of the Company’s on October 16, 2013, when the Company received the entire loan proceeds and assumed responsibility for paying the annual principal and interest payments.

The minimum principal payments on long-term debt obligations are as follows as of June 30, 2015:



For the twelve-month periods ending June 30:
2016	$	58,344
2017	59,558
2018	60,749
2019	61,964
2020	604,825

Total	$	845,440

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

Note 8 - Member Distribution

On February 3, 2015, the Company’s Board of Managers approved a cash distribution of approximately $15.0 million, or 49.5¢ per capital unit. The distribution was paid in accordance with the Company’s operating agreement and distribution policy on February 5, 2015.

Note 9 - Derivative Instruments and Hedging Activities

In the ordinary course of business, the Company enters into contractual arrangements as a means of managing exposure to changes in commodity prices. The Company’s derivative instruments primarily consist of commodity futures, options and forward contracts. Although these contracts may be effective economic hedges of specified risks, they are not designated as, nor accounted for, as hedging instruments. These contracts are recorded in inventory on the Company’s condensed balance sheets at fair value as discussed in Note 10, Fair Value of Financial Instruments.

As of June 30, 2015 and December 31, 2014, the value of the Company’s open futures, options and forward contracts was approximately $(3,413,144) and $(1,870,229), respectively.



		As of June 30, 2015
	Balance Sheet Classification	Asset Derivatives		Liability Derivatives
Derivatives not designated as hedging instruments:
Commodity contracts	Current Assets	$	10,109,841	$	13,465,624
Foreign exchange contracts	Current Assets	19,487		76,848

Totals		$	10,129,328	$	13,542,472



		As of December 31, 2014
	Balance Sheet Classification	Asset Derivatives		Liability Derivatives
Derivatives not designated as hedging instruments:
Commodity contracts	Current Assets	$	8,242,480	$	10,057,448
Foreign exchange contracts	Current Assets	50,540		105,801

Totals		$	8,293,020	$	10,163,249

During the three and six-month periods ended June 30, 2015 and 2014, net realized and unrealized gains (losses) on derivative transactions were recognized in the condensed statement of operations as follows:



	Net Gain (Loss) Recognized on Derivative Activities for the						Net Gain (Loss) Recognized on Derivative Activities for the
	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Derivatives not designated as hedging instruments:
Commodity contracts	$	(4,311,214	)	$	(485,725	)	$	(2,112,239	)	$	(4,139,088	)
Foreign exchange contracts	55,210			(17,313		)	147,099			(7,467		)

Totals	$	(4,256,004	)	$	(503,038	)	$	(1,965,140	)	$	(4,146,555	)

The Company recorded gains (losses) of $(1,965,140) and $(4,146,555) in cost of goods sold related to its commodity derivative instruments for the six-month periods ended June 30, 2015 and 2014, respectively.

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

Note 10 - Fair Value of Financial Instruments

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, this guidance establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. The three levels of hierarchy and examples are as follows:


•	Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange and commodity derivative contracts listed on the Chicago Board of Trade (“CBOT”).


•	Level 2 – Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts, or priced with models using highly observable inputs, such as commodity prices using forward future prices.


•	Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.

The following tables set forth financial assets and liabilities measured at fair value in the condensed balance sheets and the respective levels to which fair value measurements are classified within the fair value hierarchy as of June 30, 2015 and December 31, 2014:



	Fair Value as of June 30, 2015
	Level 1			Level 2		Level 3		Total
Financial assets:
Inventory	$	(2,256,333	)	$	19,061,800	$	—	$	16,805,467
Margin deposits	$	4,665,884		$	—	$	—	$	4,665,884



	Fair Value as of December 31, 2014
	Level 1			Level 2		Level 3		Total
Financial assets:
Inventory	$	(1,814,969	)	$	34,913,326	$	—	$	33,098,357
Margin deposits	$	2,549,865		$	—	$	—	$	2,549,865

The Company considers the carrying amount of significant classes of financial instruments on the balance sheets, including cash, accounts receivable, prepaid expenses, notes receivable, accounts payable, and accrued liabilities, to be reasonable estimates of fair value due to their length or maturity. The fair value of the Company’s long-term debt approximates the carrying value. The interest rates on the long-term debt are similar to rates the Company would be able to obtain currently in the market.

The Company enters into various commodity derivative instruments, including futures, options, swaps and other agreements. The fair value of the Company’s commodity derivatives is determined using unadjusted quoted prices for identical instruments on the CBOT. The Company estimates the fair market value of their finished goods and raw materials inventories using the market price quotations of similar forward future contracts listed on the CBOT and adjusts for the local market adjustments derived from other grain terminals in our area.

The Company has patronage investments in other cooperatives and common stock in a privately held entity. There is no market for their patronage credits or the entity’s common shares, and it is impracticable to estimate fair value of the Company’s investments. These investments are carried on the balance sheet at original cost plus the amount of patronage earnings allocated to the Company, less any cash distributions received.

South Dakota Soybean Processors, LLC

Notes to Condensed Financial Statements

The following table presents the changes in Level 3 instruments measured on a recurring basis as of June 30, 2015 and December 31, 2014:



	2015		2014
Beginning balance	$	—	$	155,421
Transfers	—		(150,421		)
Sales	—		(5,000		)
Settlements	—		—
Net gains (losses) included in earnings	—		—

Ending balance	$	—	$	—

Note 11 - Subsequent Event

Except for the event listed below, we evaluated all of our activity and concluded that no subsequent events have occurred that would require recognition in our financial statements or disclosed in the notes to our financial statements.

On July 15, 2015, the Company entered into an amendment of the Master Loan Agreement with CoBank, the terms of which affect the seasonal and revolving term loans. Under the seasonal loan, the amount that the Company may borrow is reduced from $15 million to $1 million until October 1, 2015, increases back to $15 million until May 1, 2016, at which time it returns to $1 million until the loan matures on September 30, 2016. In addition, the interest rate on the seasonal loan is decreased by 0.50%. Under the revolving term loan, the amount the Company may borrow is decreased from $14.2 million to $10 million. Beginning on March 20, 2017, the amount available for borrowing will decrease by $1.25 million every six months until the loan's maturity on September 20, 2020. In addition, the variable interest rate on the revolving term loan is decreased by 0.50%. All other material items and conditions under the Master Loan Agreement and subsequent amendments remain unchanged following this amendment.

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

Forward-Looking Statements

The information in this quarterly report on Form 10-Q for the three-month and six-month periods ended June 30, 2015, (including reports filed with the Securities and Exchange Commission (the “SEC” or “Commission”), contains “forward-looking statements” that deal with future results, expectations, plans and performance, and should be read in conjunction with the consolidated financial statements and Annual Report on Form 10-K for the year ended December 31, 2014. Forward-looking statements may include statements which use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “predict,” “hope,” “will,” “should,” “could,” “may,” “future,” “potential,” or the negatives of these words, and all similar expressions. Forward-looking statements involve numerous assumptions, risks and uncertainties. Actual results or actual business or other conditions may differ materially from those contemplated by any forward-looking statements. Factors that could cause actual results to differ materially from the forward-looking statements are identified in our Form 10-K for the year ended December 31, 2014.

We are not under any duty to update the forward-looking statements contained in this report, nor do we guarantee future results or performance or what future business conditions will be like. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report.

Executive Overview and Summary

We recorded strong profits again in the second quarter of 2015, increasing our net income for the year to $8.98 million despite a record soybean crush rate in the U.S. and a large South American crop. A strong domestic demand for soybean meal drove those strong margins. We anticipate third quarter margins to perform equally well. While fourth quarter margins certainly appear favorable at this time, margins will be dependent on this fall’s local crop yields and quality. Our strong balance sheet and financial performance provided added benefits, assisting with our renegotiating of our loan agreements to a more favorable interest rate and reduction in fees.

Miller plant moving closer to identity-preserved production

On April 30, 2015, we successfully started processing soybeans at our recently acquired facility near Miller, South Dakota. We continue to learn more about operating this particular plant, which is a small-capacity, solvent-free, mechanical press plant - unlike our other facility in Volga, South Dakota. These characteristics make the Miller facility much more suitable for not only producing a higher-fat soybean meal product but also identity-preserved products for the organic and GMO-free markets.

Needless to say, we are pleased with where we are in the process. We continue to train our operators as we get ready to transition to identity-preserved production. We are currently in the application process to receive the separate certifications for production of both organic and GMO-free soybean meal. We expect to receive these certifications sometime in September. At that time we will transition the plant to make runs of identity-preserved soybeans.

In the meantime we are searching out markets for the identity-preserved soybean meal we plan to produce. These products are utilized primarily in organic or GMO-free eggs, pork, turkey, chickens and dairy. We have received a good response from potential customers, and demand exists in both the domestic and export markets. While the organic market’s rapid growth has slowed somewhat, the GMO-free sector is experiencing sizable growth.

RESULTS OF OPERATIONS

Comparison of the three months ended June 30, 2015 and 2014



	Three Months Ended June 30, 2015					Three Months Ended June 30, 2014
	$			% of Revenue		$			% of Revenue
Revenue	$	90,365,391		100.0		$	113,826,942		100.0
Cost of revenues	(87,935,807		)	(97.3	)	(110,194,347		)	(96.8	)
Operating expenses	(1,081,421		)	(1.2	)	(626,986		)	(0.6	)
Other income (expense)	194,518			0.2		200,209			0.2
Income tax expense	(570		)	—		(1,870		)	—

Net income	$	1,542,111		1.7		$	3,203,948		2.8

Revenue – Revenue decreased $23.5 million, or 20.6%, for the three-month period ended June 30, 2015, compared to the same period in 2014. The decrease in revenues is primarily due to a 25% decrease in the sales price of all our soybean products (meal, oil and hulls). The decrease in sales price is primarily due to an increase in the supply of soybeans resulting from an improved harvest last fall. Partially offsetting the decrease in sales price is a 16% increase in the quantity of soybeans harvested during the second quarter of 2015, compared to the same period in 2014, which increased the sales volume of our soybean products. The increase in production is due mostly to timing of our annual plant shutdown to perform required maintenance. In 2014, this annual shutdown was performed during the second quarter; however, the 2015 shutdown is scheduled for the third quarter (August).

Gross Profit/Loss – Gross profit decreased $1.2 million, or 33.1%, for the three-month period ended June 30, 2015, compared to the same period in 2014. While margins remained very high during the second quarter of 2015, the market value of our hedges to minimize future risk in commodity prices deteriorated during 2015 as those contracts were not as lucrative as current prices indicated. Margins remained high due to a very strong export demand and a tight supply of soybean meal. The tight supply resulted from last fall's soybean harvest which was delayed due to rain throughout most of the U.S. This delay caused many U.S. soybean processors to fall behind on meal shipments. Fortunately, the rain avoided our operations during harvest, which has allowed us to capitalize on meeting other customers' needs.

Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, increased $454,000 for the three-month period ended June 30, 2015, compared to the same period in 2014. The increase is primarily due to accruing a $360,000 allowance for a potentially uncollectible account receivable during the second quarter of 2015, compared to $0 in the same period in 2014.

Interest Expense – Interest expense decreased $174,000, or 57.1%, during the three months ended June 30, 2015, compared to the same period in 2014. The decrease in interest expense is due primarily to decreased debt levels, which resulted from reductions of inventory quantities and commodity prices. The average debt level during the three-month period ended June 30, 2015 was approximately $3.4 million, compared to $23.4 million for the same period in 2014.

Other Non-Operating Income – Other non-operating income, including patronage dividend income, decreased $179,000, or 35.6%, during the three-month period ended June 30, 2015, compared to the same period in 2014. The decrease is due primarily to a decrease in the quantity of crude soybean oil stored for the Chicago Board of Trade (CBOT) during the three months ended June 30, 2015, compared to the same period in 2014.

Net Income/Loss – During the three months ended June 30, 2015, we generated a net income of $1.5 million, compared to $3.2 million for the same period in 2014. The $1.7 million decrease in net income is primarily attributable to a decrease in gross profit associated with deterioration in market value of our forward commodity contracts and increased operating expenses.

Comparison of the six months ended June 30, 2015 and 2014



	Six Months Ended June 30, 2015					Six Months Ended June 30, 2014
	$			% of Revenue		$			% of Revenue
Revenue	$	189,372,995		100.0		$	215,097,770		100.0
Cost of revenues	(179,833,201		)	(95.0	)	(208,652,818		)	(97.0	)
Operating expenses	(1,803,392		)	(1.0	)	(2,784,454		)	(1.3	)
Other income (expense)	1,248,207			0.7		1,930,718			0.9
Income tax expense	(570		)	—		(1,870		)	—

Net income	$	8,984,039		4.7		$	5,589,346		2.6

Revenue – Revenue decreased $25.7 million, or 12.0%, for the six-month period ended June 30, 2015, compared to the same period in 2014. The decrease in revenues is primarily due to a 20% decrease in the sales price of all our soybean products (meal, oil and hulls). The decrease in sales price is primarily due to an increase in the supply of soybeans resulting from an improved crop harvest last fall. Partially offsetting the decrease in sales price is a 10% increase in the quantity of soybeans harvested during the first six months of 2015, compared to the same period in 2014, which correspondingly increased the sales volume of our soybean products.

Gross Profit/Loss – Gross profit increased $3.1 million, or 48.0%, for the six-months ended June 30, 2015, compared to the same period in 2014. The increase is due to a very strong export demand and a tight supply of soybean meal. The tight supply resulted from last fall's soybean harvest, which was delayed due to rain throughout most of the U.S. This delay caused many U.S. soybean processors to fall behind on meal shipments. Fortunately, the rain avoided our operations during harvest, which allowed us to capitalize on meeting other customers' needs.

Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, decreased $1.0 million for the six-month period ended June 30, 2015, compared to the same period in 2014. The decrease is due to accruing a $1.5 million allowance for a potentially uncollectible account receivable in 2014, compared to $0.4 in the same period in 2015.

Interest Expense – Interest expense decreased $320,000, or 52.6%, during the six months ended June 30, 2015, compared to the same period in 2014. The decrease in interest expense is due primarily to decreased debt levels, which resulted from reductions of inventory quantities and commodity prices. The average debt level during the six-month period ended June 30, 2015 was approximately $5.2 million, compared to $26.2 million for the same period in 2014.

Other Non-Operating Income – Other non-operating income, including patronage dividend income, decreased $1.0 million, or 39.5%, during the six-month period ended June 30, 2015, compared to the same period in 2014. The decrease is due primarily to decreases in patronage allocations from our associated cooperatives, including CoBank and Minnesota Soybean Processors, and the quantity of crude soybean oil stored for the CBOT. During the first six months of 2015, patronage allocations totaled $0.8 million, compared to $1.5 million during the same period in 2014.

Net Income/Loss – During the six-month period ended June 30, 2015, we generated a net income of $9.0 million, compared to $5.6 million for the same period in 2014. The $3.4 million increase in net income is primarily attributable to an increase in gross profit associated with improved margins and increased production, and decreases in operating and interest expenses.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash provided by operations and borrowings under our two lines of credit which are discussed below under “Indebtedness.” On June 30, 2015, we had working capital, defined as current assets less current liabilities, of approximately $14.6 million, compared to working capital of approximately $23.3 million on June 30, 2014. Working capital decreased between periods primarily due to $12.1 million in purchases of property and equipment, a $7.8 million reduction of long-term borrowings, and a $15.0 million distribution to members. The decrease in working capital is partially offset by an increase in net income. Based on our current operating plans, we believe that we will be able to fund our needs for the foreseeable future from cash from operations and revolving lines of credit.

The following is a summary of our cash flow from operating, investing and financing activities for each of the six-month periods ended June 30, 2015 and 2014:



	2015			2014
Net cash from (used for) operating activities	$	7,979,235		$	11,316,935
Net cash from (used for) investing activities	(2,362,422		)	(1,550,147		)
Net cash from (used for) financing activities	(12,144,232		)	(9,766,788		)

Cash Flows From (Used for) Operations

The $3.3 million decrease in cash flows from operating activities is primarily attributed to a $19.1 million decrease in accrued commodity purchases during the six-month period ended June 30, 2015, compared to a $14.6 million decrease during the same period in 2014. The smaller decrease in accrued commodity purchases is the result of a drop in commodity prices due to a large U.S. soybean harvest in the fall of 2014.

Cash Flows From (Used For) Investing Activities

The $0.8 million increase in cash flows used for investing activities is due to a $1.1 million increase on capital improvements during the six-month period ended June 30, 2015, compared to the same period in 2014. On December 19, 2014, we purchased a small soybean processing plant near Miller, South Dakota, and made some improvements and other modifications to that facility during the first two quarters of 2015 as we prepared to start up the new facility on April 30, 2015.

Cash Flows From (Used For) Financing Activities

The $2.4 million increase in cash flows used for financing activities is principally due to an increase in distributions to members. We distributed a record $15.0 million in cash to members during the six-month period ended June 30, 2015, compared to $11.0 million during the same period in 2014.

Indebtedness

We have two lines of credit with CoBank, our primary lender, to meet the short and long-term needs of our operations. The first credit line is a revolving long-term loan. Following the amendments described below, we may borrow funds on this loan as needed up to the credit line maximum, or $10.0 million, and then pay down the principal whenever excess cash is available. Repaid amounts may be borrowed up to the available credit line. Beginning on March 20, 2017, the available credit line is reduced by $1.25 million every six months until the credit line’s maturity on September 20, 2020. We pay a 0.40% annual commitment fee on any funds not borrowed. The principal balance outstanding on the revolving term loan was $0 as of June 30, 2015 and December 31, 2014, respectively. There were $14.2 million in additional funds available to borrow under this loan as of June 30, 2015.

The second credit line is a revolving working capital (seasonal) loan that, following the amendments described below, matures on September 30, 2016. The primary purpose of this loan is to finance inventory and receivables. The maximum available to borrow under this credit line is $1 million until October 1, 2015, increases to $15 million until May 1, 2016, at which time it returns to $1 million until the maturity date. Borrowing base reports and financial statements are required monthly to justify the balance borrowed on this line. We pay a 0.20% annual commitment fee on any funds not borrowed; however, we have the option to reduce the credit line during any given commitment period listed in the agreement to avoid the commitment fee. There were no advances outstanding on the seasonal loan as of June 30, 2015 and December 31, 2014. Under this loan, there was an additional $15.0 million in available funds to borrow as of June 30, 2015.

Both loans with CoBank are set up with a variable rate option. The variable rate is set by CoBank and changes weekly on the first business day of each week. We also have a fixed rate option on both loans allowing us to fix rates for any period between one day and the entire commitment period. The annual interest rate on the revolving term loan is 3.19% and 3.16% as of June 30, 2015 and December 31, 2014, respectively. As of June 30, 2015 and December 31, 2014, the interest rate on the seasonal loan is 2.94% and 2.91%, respectively. We were in compliance with all covenants and conditions under the loans as of June 30, 2015 and the date of this filing.

On July 15, 2015 we entered into an amendment of the Master Loan Agreement with CoBank, the terms of which affect both our seasonal and revolving term loans. Under the revolving term loan, the amount we may borrow was decreased from $14.2 million to $10.0 million. Beginning on March 20, 2017, the amount available for borrowing is decreased by $1.25 million every six months until the loan's maturity on September 20, 2020. In addition, the interest rate on the revolving term loan was decreased by 0.50%. Prior to the amendment, the variable interest rate was LIBOR (One-Month LIBOR Index Rate) plus 2.95%. Under the amendment, the variable rate is LIBOR plus 2.45%. Under the seasonal loan, the amount we may borrow was reduced from $15 million to $1 million until October 1, 2015, increases back to $15 million until May 1, 2016, at which time it returns to $1 million until the loan matures on September 30, 2016. In addition, the interest rate on the seasonal loan was decreased by 0.50%. Prior to the amendment, the variable interest rate was LIBOR plus 2.70%. Under the amendment, the variable rate is LIBOR plus 2.20%. All other material items and conditions under the Master Loan Agreement and subsequent amendments remain the same following the amendment.

On March 1, 2013, the State of South Dakota Department of Transportation agreed to loan the Brookings County Regional Railway Authority a sum of $964,070 for purposes of making improvements to the railway infrastructure near our soybean processing facility in Volga, South Dakota. In consideration of this secured loan, we agreed to provide a guarantee to the State of South Dakota Department of Transportation for the full amount of the loan, plus 2% interest. This guarantee was converted into a direct debt obligation of ours on October 16, 2013, when we received the $964,070 in loan proceeds and assumed responsibility for the loan's annual principal and interest payments of $75,500 which began on June 1, 2014. The note payable matures on June 1, 2020.

OFF BALANCE SHEET FINANCING ARRANGEMENTS

Except as described below, we do not utilize variable interest entities or other off-balance sheet financial arrangements.

Lease Commitments

We have commitments under various operating leases for rail cars, various types of vehicles, and lab and office equipment. Our most significant lease commitments are for the rail cars we use to distribute our products. We have a number of long-term leases for hopper rail cars and oil tank cars with American Railcar Leasing, FRS 1, GATX Corporation, GE Capital, and Trinity Capital. Total lease expenses under these arrangements are approximately $1.3 million and $1.1 million for the six-month periods ended June 30, 2015 and 2014, respectively.

In addition to rail car leases, we have several operating leases for various equipment and storage facilities. Total lease expense under these arrangements is $72,000 and $56,000 for the six-month periods ended June 30, 2015 and 2014, respectively. Some of our leases include purchase options, none of which, however, are for a value less than fair market value at the end of the lease.

Other Long-Term Commitments

We had a commitment under a Grain Storage and Transportation Agreement with H&I Grain of Hetland, Inc. (H&I). This agreement, which expired on August 31, 2014, was for the handling, storage and transportation of soybeans to and from the H&I facilities located in DeSmet, Hetland, and Arlington, South Dakota, at established rates per bushel. The agreement provided for an annual minimum payment of $200,000. Expenses under this agreement were $0 and $366,000 for the six-month periods ended June 30, 2015 and 2014, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1 of our Financial Statements under Part I, Item 1, for a discussion on the impact, if any, of the recently pronounced accounting standards.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Preparation of our financial statements requires estimates and judgments to be made that affect the amounts of assets, liabilities, revenues and expenses reported. Such decisions include the selection of the appropriate accounting principles to be applied and the assumptions on which to base accounting estimates. We continually evaluate these estimates based on historical experience and other assumptions we believe to be reasonable under the circumstances.

The difficulty in applying these policies arises from the assumptions, estimates, and judgments that have to be made currently about matters that are inherently uncertain, such as future economic conditions, operating results and valuations as well as management intentions. As the difficulty increases, the level of precision decreases, meaning that actual results can and probably will be different from those currently estimated.

Of the significant accounting policies described in the notes to the financial statements, we believe that the following may involve a higher degree of estimates, judgments, and complexity:

Commitments and Contingencies

Contingencies, by their nature relate to uncertainties that require management to exercise judgment both in assessing the likelihood that a liability has been incurred, as well as in estimating the amount of the potential expense. In conformity with accounting principles generally accepted in the U.S, we accrue an expense when it is probable that a liability has been incurred and the amount can be reasonably estimated.

Inventory Valuation

We account for our inventories at estimated net realizable market value. These inventories are agricultural commodities that are freely traded, have quoted market prices, may be sold without significant further processing, and have predictable and insignificant costs of disposal. We derive our estimates from local market prices determined by grain terminals in our area. Processed product price estimates are determined by the ending sales contract price as of the close of the final day of the period. This price is determined by the closing price on the Chicago Board of Trade (CBOT), net of the local basis, for the last two business days of the period and the first business day of the subsequent period. Changes in the market values of these inventories are recognized as a component of cost of goods sold.

Long-Lived Assets

Depreciation and amortization of our property, plant and equipment is provided on the straight-lined method by charges to operations at rates based upon the expected useful lives of individual or groups of assets. Economic circumstances or other factors may cause management’s estimates of expected useful lives to differ from actual.

Long-lived assets, including property, plant and equipment and investments are evaluated for impairment on the basis of undiscounted cash flows whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impaired asset is written down to its estimated fair market value based on the best information available. Considerable management judgment is necessary to estimate undiscounted future cash flows and may differ from actual.

We evaluate the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying value may not be recoverable. Such circumstances could include, but are not limited to: (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. We measure the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeded its fair value. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires us to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts.

Accounting for Derivative Instruments and Hedging Activities

We minimize the effects of changes in the price of agricultural commodities by using exchange-traded futures and options contracts to minimize our net positions in these inventories and contracts. We account for changes in market value on exchange-traded futures and option contracts, as well as our forward purchase and sales contracts, using quoted exchange prices for identical instruments. Changes in the market value of all these contracts are recognized in earnings as a component of cost of goods sold.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Commodities Risk & Risk Management. To reduce the price change risks associated with holding fixed price commodity positions, we generally take opposite and offsetting positions by entering into commodity futures contracts (either a straight or options futures contract) on a regulated commodity futures exchange, the CBOT. While hedging activities reduce the risk of loss from changing market prices, such activities also limit the gain potential which otherwise could result from these significant fluctuations in market prices. Our policy is generally to maintain a hedged position within limits, but we can be long or short at any time. Our profitability is primarily derived from margins on soybeans processed, not from hedging transactions. We do not anticipate that our hedging activity will have a significant impact on future operating results or liquidity. Hedging arrangements do not protect against nonperformance of a cash contract.

At any one time, our inventory and purchase contracts for delivery to our facility may be substantial. We have risk management policies and procedures that include net position limits. They are defined by commodity, and include both trader and management limits. This policy and procedure triggers a review by management when any trader is outside of position limits. The position limits are reviewed at least annually with the board of managers. We monitor current market conditions and may expand or reduce the limits in response to changes in those conditions.

Foreign Currency Risk. We conduct essentially all of our business in U.S. dollars and have no direct risk regarding foreign currency fluctuations. Foreign currency fluctuations do, however, impact the ability of foreign buyers to purchase U.S. agricultural products and the competitiveness of and demand for U.S. agricultural products compared to the same products offered by foreign suppliers.

Interest Rate Risk. We manage exposure to interest rate changes by using variable rate loan agreements with fixed rate options. Long-term loan agreements can utilize the fixed option through maturity; however, the revolving ability to pay down and borrow back would be eliminated once the funds were fixed.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. Based on their evaluation as of the end of the period covered by this quarterly report on Form 10-Q, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Changes in Internal Control Over Financial Reporting. There were no changes to our internal controls over financial reporting that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting during the quarter ended June 30, 2015.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time in the ordinary course of our 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 dispute. Currently, we are not involved in any legal proceeding that we believe is material. In the event we become involved in a legal proceeding, we carry insurance that provides protection against general commercial liability claims, claims against our directors, officers and employees, business interruption, automobile liability, and workers’ compensation claims. We are not currently involved in any material legal proceeding and are not aware of any potential claims.

Item 1A. Risk Factors.

During the quarter ended June 30, 2015, there were no material changes to the Risk Factors disclosed in Item 1A (Part I) of our 2014 Annual Report on Form 10-K.

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.

See Exhibit Index.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



			SOUTH DAKOTA SOYBEAN PROCESSORS, LLC

Dated:	August 13, 2015	By	/s/ Thomas Kersting
			Thomas Kersting, Chief Executive Officer
			(Principal Executive Officer)

Dated:	August 13, 2015	By	/s/ Mark Hyde
			Mark Hyde, Chief Financial Officer
			(Principal Financial Officer)

EXHIBIT INDEX TO

FORM 10-Q

OF SOUTH DAKOTA SOYBEAN PROCESSORS, LLC



Exhibit Number		Description
3.1(i)		Articles of Organization (1)
3.1(ii)		Operating Agreement, as amended (2)
3.1(iii)		Articles of Amendment to Articles of Organization (3)
4.1		Form of Class A Unit Certificate (4)
10.1		Amendment to Master Loan Agreement dated July 15, 2015
10.2		Monitored Revolving Credit Supplement dated July 15, 2015
10.3		Monitored Revolving Credit Supplement dated July 15, 2015
10.4		Revolving Term Loan Supplement dated July 15, 2015
31.1		Rule 13a-14(a)/15d-14(a) Certification by Chief Executive Officer
31.2		Rule 13a-14(a)/15d-14(a) Certification by Chief Financial Officer
32.1		Section 1350 Certification by Chief Executive Officer
32.2		Section 1350 Certification by Chief Financial Officer

____________________________________________________________________________

(1) Incorporated by reference from Appendix B to the information statement/prospectus filed as a part of the issuer’s Registration Statement on Form S-4 (File No. 333-75804).

(2) Incorporated by reference from the same numbered exhibit to the issuer’s Form 8-K filed on June 19, 2014.

(3) Incorporated by reference from the same numbered exhibit to the issuer’s Form 10-Q filed on August 14, 2002.

(4) Incorporated by reference from the same numbered exhibit to the issuer’s Registration Statement on Form S-4 (File No. 333-75804).

SOUTH DAKOTA SOYBEAN PROCESSORS LLC - FORM 10-Q - August 13, 2015

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SOUTH DAKOTA SOYBEAN PROCESSORS LLC Reports