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SEPTEMBER 2020 Ethanol Connection Golden Grain Energy LLC @ggecorn Plant improvements: GGE to more than double storage capacity World record bin, plus receiving improvements based on grain origination study, projections In September 2020, Golden Grain Energy started con- struction on a new grain storage and receiving system. This system will increase GGE’s grain storage from approxi- mately 1.275 million bushels to almost 3.5 million bushels. In addition, GGE will increase its receiving capacity from 40,000 bushels per hour to 65,000 bushels per hour. The centerpiece of the storage system is a 2.2 million bushel storage bin supplied by Sukup Manufacturing in Sheffield Iowa. The new storage bin is 165’ in diameter and is the largest steel storage bin in the world. Construction on the project is expected to be complete in May/June 2021 and will increase GGE’s storage from about 10 days of storage to approximately 30 days of storage, providing improved flexibility in purchasing and delivery schedules. The increase in storage was approved after completing a rigorous grain origination study using CMC from Albert Lea, Minn. This study identified an opportunity to increase Golden Grain Energy’s newest grain bin, which should be complete the amount of grain storage on location and to improve our next June, will be larger than the two existing bins, pictured here, grain handling capabilities to increase our level of service combined. Helping break ground for the new project earlier this with our customers. month were: John Hanig – Sukup Manufacturing; Brent Hansen – The project was engineered by KFI Engineers (St. Paul, Sukup Manufacturing; Chad Kuhlers – Golden Grain Energy; Kurt Minn.), and project management will be provided by Mc- Schneider – McGough Construction; Matt Dutka – Golden Grain Gough Construction (St. Paul, Minn.). Energy; and Steve Ginter – Sukup Manufacturing. —Chad Kuhlers, CEO
Page 2 Golden Grain Energy September 2020 Q3 shows beginning signs of recovery Even as total revenues for the third During the quarter that ended July • Corn oil: GGE sold 1 percent less quarter of 2020 fall short of the previ- 31, GGE sold 6 percent fewer gallons and price was 3 percent higher ous year, largely due to a continued of ethanol than during the same pe- than Q3 of 2019. lag in demand for ethanol and fuel riod in 2020, at a price that was 18 • Natural gas: Price was 2 percent in general, Golden Grain Energy’s percent lower than the year before. lower and usage was 2 percent financials show some positive signs Some of that downturn was offset by lower compared to Q3 of 2019. in year-over-year results. a 7 percent year-over-year increase The complete 10-Q can be found Due in part to a 23 percent per in DDGS sales, with a slightly higher on the SEC website or by following bushel reduction in the cost of corn price realized for DDGS as well. the investor link at www.ggecorn. compared to 2019, Golden Grain Other highlights from the quar- com. recorded net income of $2.7 million terly financial filing include: — Brooke Peters, CFO for Q3 2020, compared to experienc- ing a net loss during that quarter the year before. BALANCE SHEET July 31, 2020 October 31, 2019 Year-to-date figures, however, Current Assets $33,846,753 $32,093,425 continue to show the dramatic im- pact of demand loss in the industry Total Assets $130,409,015 $130,030,383 due to a combination of factors: Current Liabilities $9,885,570 $9,140,200 COVID-19 pandemic stress on trans- Long-term Liabilities $3,777,389 $469,040 portation and fuel demand, SREs Members Equity $116,746,056 $120,421,143 that eroded domestic demand for ethanol, and uncertainty in export Book Value per Unit $5.87 $6.06 markets for both ethanol and DDGS. 3 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended INCOME STATEMENT 7/31/20 7/31/19 7/31/20 7/31/19 Revenue $44,902,846 $51,773,780 $137,489,701 $147,578,817 Gross Profit (Loss) $2,991,434 $(1,502,206) $(1,110,184) $(552,748) Equity in Net Income (Loss) $438,330 $657,049 $1,972,955 $1,256,662 from Investments Net Income (Loss) $2,715,403 $(1,673,866) $(1,687,787) $(1,624,696) Net Income (Loss) Per Unit $0.14 $(0.08) $(0.08) $(0.08) Distribution Paid $- $- $0.10 $0.25 Director nominees due in December Golden Grain Energy’s board of directors has appoint- bers Jerry Calease and Dustin Peterson, along with ed the nominating committee to develop the candidate Steve Dietz. Anyone wishing to nominate themselves or list for board directors to be presented at the 2021 an- another Golden Grain Energy member as a candi- nual membership meeting. date for director should contact one of the nominating Current directors whose terms will be up for election committee members or the Golden Grain Energy office are Duane Lynch and Jim Boeding. Both seats on the by Dec. 1, 2020. board are for 3-year, at-large positions. The nominees will be presented and voted on at the The nominating committee will include board mem- 2021 annual membership in February.
Page 3 Golden Grain Energy September 2020 Corn rallies on lower harvest projections What a difference a month at 14.9 billion bushels. some attractive numbers for the makes— the ball game seems com- With demand rightfully getting 2021 harvest. I would suggest taking pletely different today than it did a reduced some, ending stocks are advantage of these opportunities month ago. now pegged at 2.5 billion bushels. when they are available. Corn has rallied almost 60 cents Perhaps not burdensome, but cer- One Page 1, you will find details of off of the lows seen in early August. tainly adequate and it shouldn’t be a project we are just getting started Perceptions have turned around friendly to December futures above on. We are in the process of adding since the devastating wind storm $3.70, yet here we are. I believe the to our storage capacity as well as went through central Iowa in mid- perception is that future reports will adding additional receiving capacity. August. continue to reduce the size of the I am very excited that this is happen- While the derecho destroyed crop. ing as it will make it even more conve- crops in a wide swatch across the Outstanding demand for beans as nient to haul corn into Golden Grain, state, nationally, it didn’t have a huge well as corn have allowed beans to reducing wait times when delivering. impact on production or supply-de- stage a significant rally, and at least If you are interested in selling corn mand—yet anyway. The September part of the strength in corn is coming directly to Golden Grain Energy this crop report reduced national yields from help from the beans. fall, please call us at 888-443-2676. by 3.3 bushels per acre and also re- I believe this rally is an opportunity —Scott Gudbaur, duced harvested acres by 1/2 million for selling corn, both the crop we are commodity manager acres. Production is now estimated about to harvest and also showing Thank you for standing up for ethanol industry Golden Grain Energy’s leadership thanks members for being advocates for the industry, and encourages all to continue to do so. Jerry Calease, board director and chairman of the GGE PAC, announced that members and supporters contrib- uted more than $7,000 in response to a mail request that was issued when the PAC’s annual golf outing had to be canceled in August. Those contributions, and others, made it possible for the PAC to contribute $45,000 in support of state and federal candidates who support renewable Watch the 6-minute video featuring Golden Grain Energy’s fuels policies. Dave Sovereign on the American Cooalition for Ethanol’s GGE Board Chairman Dave Sovereign is also reaching YouTube Channel here: https://www.youtube.com/ out to members and ethanol supporters through his watch?v=cWerZE4_OhM. leadership role in the American Coalition for Ethanol (ACE), including an advocacy video released by ACE earlier this Sovereign says in the video, ethanol will need to be vigi- month. (See link at right.) lant and continue to advocate for the role of agriculture Sovereign noted that while there has been some move- and renewable fuels in the nation’s future, whether ment, particularly by the Department of Agriculture to challenged by President Trump’s connections to the oil address the five key issues ACE members laid before the industry or the potential for a Joe Biden administration White House a year ago, others are still lagging. In particu- to overlook the importance of the Heartland. lar, he noted, the EPA has failed to take actions to provide “Either way, we have a lot of work cut out for us,” Sov- ethanol the support it is due through the RFS. ereign says. “Advocacy is going to be especially important Regardless of the outcome of the presidential election, no matter who is in office.
Golden Grain Energy 1822 27th St. SW Mason City, IA 50401 In other news ... Management team titles confirmed During the Monday, Sept. 21, 2020, Golden Grain Energy Board of Directors meeting, the directors voted to officially name Chad Kuhlers and Brooke Peters to the roles of CEO and CFO, respectively. They had each been named “interim” officers earlier this year. Kuhlers has been with Golden Grain since the plant’s beginning, including as plant manager and as COO. Peters joined GGE 15 years ago, including being named controller in 2008. This newsletter contains forward-looking Golden Grain Energy, LLC statements. We undertake no responsibility Board of Directors Duane Lynch to update any forward looking statement. Dave Sovereign, Chairman Dustin Peterson When used, the words “believe”, “hope”, “ex- Steve Sukup, Vice Chairman Roger Shaffer pect”, “anticipate” and similar expressions are intended to identify forward-looking Stan Laures, Secretary Management Team statements. Readers should not place undue Jim Boeding Chad Kuhlers, CEO reliance on any forward-looking statements Jerry Calease Brooke Peters, CFO and recognize that the statements are not predictions of actual future results, which Dave Reinhart Scott Gudbaur, Commodity Leslie Hansen could and likely will differ materially from Manager those anticipated in the forward-looking statements due to risks and uncertainties, including those described in our Securities 641-423-8525 OUR MISSION: and Exchange Commission filings, copies of 888-GGE-CORN Add value to the corn production of the area which are available through our website or Fax: 641-421-8457 and enhance the incomes of our investor upon request. www.ggecorn.com partners while providing economic growth to info@ggecorn.com the area we serve.