Forward-Looking Statements



The information in this quarterly report on Form 10-Q for the six-month period
ended June 30, 2022, (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 financial statements and Annual Report on Form
10-K for the year ended December 31, 2021. 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, 2021.

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



Strong crush margins from the first quarter of 2022 continued into the second
quarter of 2022, helping us achieve record net incomes of $22.8 million in the
second quarter and $41.1 million for the first six months of the year. Soybean
oil continues to drive profitability, as strong demand for oil from the food,
fuel and export sectors increased margins to record levels. Strong demand for
oil is likely to continue in the near future as additional renewable diesel
plants in Western U.S. are scheduled to begin production in 2022. Soybean meal
demand, though not as strong as soybean oil, remained solid during the first six
months, being supported by a strong domestic demand and an active export
program. Steady soybean supply and delivery to both our plants further
contributed to a strong six months.

While our financial results were favorable, the second quarter was not without
challenges. Transportation-related issues were common. Rail carriers struggled
delivering our railcars to our customers and returning those cars in a timely
manner, resulting in railcar shortages that led to reduced production at our
Volga facility. A shortage of drivers in the trucking industry also caused
delays and increased costs. Supply chain disruption issues provided additional
challenges to our team. Spare parts and production chemicals were difficult to
source and required much greater lead times when ordering. In the end, however,
we responded well by navigating the obstacles through a great team of employees.

Looking ahead, we anticipate above-average processing margins for the remainder
of 2022 and into 2023. Although crush margins have recently decreased slightly,
the market continues to provide opportunities to secure above average returns.

Long term, we continue to study the feasibility, engineering and planning of a new crushing plant near Mitchell, South Dakota. In July, we crossed a significant hurdle by securing a conditional use permit for the site from Davison County, South Dakota.


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RESULTS OF OPERATIONS

Comparison of the three months ended June 30, 2022 and 2021



                                  Three Months Ended June 30, 2022                    Three Months Ended June 30, 2021
                                          $                    % of Revenue                   $                    % of Revenue
Revenue                           $   175,248,306                   100.0             $   160,273,107                   100.0
Cost of revenues                     (150,680,301)                  (86.0)               (157,126,974)                  (98.0)
Gross profit                           24,568,005                    14.0                   3,146,133                     2.0
Operating expenses                     (1,476,433)                   (0.8)                   (956,806)                   (0.6)
Interest expense                         (547,770)                   (0.3)                   (493,158)                   (0.3)
Other non-operating income
(expense)                                 220,301                     0.1                    (130,112)                   (0.1)

Net income                        $    22,764,103                    13.0             $     1,566,057                     1.0


Revenue - Revenue increased $15.0 million, or 9.3%, for the three-month period
ended June 30, 2022, compared to the same period in 2021. The increase in
revenue was primarily due to an increase in the average sales price of refined
soybean oil. The average sales price of soybean oil increased approximately 45%
in the three months ended June 30, 2022 from the same period in 2021, resulting
from surging demand from the renewable diesel and food sectors.

Gross Profit/Loss - Gross profit increased $21.4 million, or 680.9%, for the
three months ended June 30, 2022, compared to the same period in 2021. The
increase in gross profit was primarily due to increased demand for oil from the
renewable diesel sector as more diesel plants were opened throughout the U.S.

Operating Expenses - Administrative expenses, including all selling, general and
administrative expenses, increased approximately $520,000, or 54.3%, during the
three-month period ended June 30, 2022, compared to the same period in 2021. The
increase was primarily due to increases in personnel costs.

Interest Expense - Interest expense increased $55,000, or 11.1%, during the
three months ended June 30, 2022, compared to the same period in 2021. The
increase in interest expense was due to an increase in interest rates on our
senior debt with CoBank and borrowings from our lines of credit. As of June 30,
2022, the interest rate on our revolving long-term loan was 3.99%, compared to
2.56% as of June 30, 2021.

Other Non-Operating Income - Other non-operating income (expense), including
patronage dividend income, improved $350,000 during the three months ended
June 30, 2022, compared to the same period in 2021. The increase in other
non-operating income was due to a $350,000 improvement in gains (losses) on our
interest rate hedge instruments. During the three-month period ended June 30,
2022, gains on interest rate hedges totaled $215,000, compared to a $135,000
loss during the same period in 2021.

Net Income/Loss - During the three-month period ended June 30, 2022, we generated a net income of $22.8 million, compared to $1.6 million for the same period in 2021. The $21.2 million increase was primarily attributable to an increase in gross profit.


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Comparison of the six months ended June 30, 2022 and 2021



                                               Six Months Ended June 30, 2022                      Six Months Ended June 30, 2021
                                                $                    % of Revenue                   $                    % of Revenue
Revenue                                 $   346,972,432                   100.0             $   283,900,648                   100.0
Cost of revenues                           (303,594,322)                  (87.5)               (274,125,304)                  (96.6)
Gross profit                                 43,378,110                    12.5                   9,775,344                     3.4
Operating expenses                           (2,874,899)                   (0.8)                 (2,074,648)                   (0.7)

Interest expense                               (935,330)                   (0.3)                   (810,310)                   (0.3)
Other non-operating income (expense)          1,494,057                     0.4                     459,763                     0.2

Net income                              $    41,061,938                    11.8             $     7,350,149                     2.6


Revenue - Revenue increased $63.1 million, or 22.2%, for the six-month period
ended June 30, 2022, compared to the same period in 2021. The increase in
revenues was primarily due to an increase in the average sales price of refined
soybean oil. The average sales price of soybean oil increased approximately 54%
in the six months ended June 30, 2022 from the same period in 2021, resulting
from surging demand from the renewable diesel and food sectors.

Gross Profit/Loss - Gross profit increased $33.6 million, or 343.8%, for the six
months ended June 30, 2022, compared to the same period in 2021. The increase in
gross profit was primarily due to increased demand for oil from the renewable
diesel sector as more diesel plants were opened in the U.S.

Operating Expenses - Administrative expenses, including all selling, general and
administrative expenses, increased approximately $800,000, or 38.6%, during the
six-month period ended June 30, 2022, compared to the same period in 2021. The
increase was primarily due to increases in personnel costs.

Interest Expense - Interest expense increased $125,000, or 15.4%, during the six
months ended June 30, 2022, compared to the same period in 2021. The increase in
interest expense was due to an increase in interest rates on our senior debt
with CoBank. As of June 30, 2022, the interest rate on our revolving long-term
loan was 3.99%, compared to 2.56% as of June 30, 2021.

Other Non-Operating Income - Other non-operating income (expense), including
patronage dividend income, increased $1,034,000 during the six-month period
ended June 30, 2022, compared to the same period in 2021. The increase in other
non-operating income was due to a $714,000 increase in gains on our interest
rate hedge instruments and a $335,000 increase in patronage dividend income.
During the six-month period ended June 30, 2022, gains on interest rate hedges
totaled $786,000, compared to $72,000 during the same period in 2021. We also
received $700,000 in patronage distributions from CoBank, a cooperative lender
of which we are a member, during the six months ended June 30, 2022, compared to
$365,000 during the same period in 2021.

Net Income/Loss - During the six-month period ended June 30, 2022, we generated
a net income of $41.1 million, compared to $7.4 million for the same period in
2021. The $33.7 million increase was primarily attributable to an increase in
gross profit and other non-operating income.

LIQUIDITY AND CAPITAL RESOURCES



Our primary sources of liquidity are cash provided by operations and borrowings
under our two revolving lines of credit which are discussed below under
"Indebtedness." On June 30, 2022, we had working capital, defined as current
assets less current liabilities, of approximately $58.3 million, compared to
$26.8 million on June 30, 2021. Working capital increased $31.5 million between
periods primarily due to increases in net income during that period. Based on
current plans, we will continue funding our capital and operating needs from
cash from operations and revolving lines of credit.


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Comparison of the Six Months Ended June 30, 2022 and 2021



                                                            2022            

2021

Net cash provided by (used for) operating activities $ (22,841,282) $ (49,730,286) Net cash provided by (used for) investing activities (3,383,847)

(3,708,263)

Net cash provided by (used for) financing activities 26,409,905

50,242,742

Cash Flows Used For Operations



The $26.9 million decrease in cash flows used for operating activities was
largely due to a $33.7 million increase in net income and a $9.3 million
decrease in inventory. During the six-month period ended June 30, 2022, our
inventories increased by $28.1 million, compared to a $37.4 million increase
during the same period in 2021. Partially offsetting the changes in net income
and inventory was a $20.0 million change in net gains or losses on derivative
activities. During the six months ended June 30, 2022, we recognized $7.4
million in gains on derivative activities, compared to $12.7 million in losses
during the same period in 2021.

Cash Flows Used For Investing Activities



The $0.3 million decrease in cash flows used for investing activities during the
six-month period ended June 30, 2022, compared to the same period in 2021, was
due to a $0.5 million decrease in capital improvements. During the six months
ended June 30, 2022, we spent $3.3 million on capital improvements, compared to
$3.8 million during the same period in 2021.

Cash Flows Provided By (Used For) Financing Activities



The $23.8 million decrease in cash flows provided by financing activities was
principally due to a $13.3 million decrease in net proceeds on borrowings and a
$7.9 million increase in cash distributions to our members during the six-month
period ended June 30, 2022, compared to the same period in 2021. During the six
months ended June 30, 2022, net proceeds on borrowings increased $47.8 million,
compared to $61.1 million during the same period in 2021.

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. Under this loan, we may borrow funds as needed up to the credit
line maximum, or $16.0 million, and then pay down the principal whenever excess
cash is available. Repaid amounts may be borrowed up to the available credit
line. The available credit line decreases by $2.0 million every six months until
the credit line's maturity on March 20, 2026. We pay a 0.40% annual commitment
fee on any funds not borrowed. The principal balance outstanding on the
revolving term loan was $16.0 million and $16.9 million as of June 30, 2022 and
December 31, 2021, respectively. Under this loan, there were no additional funds
available to borrow as of June 30, 2022.

The second credit line is a revolving working capital (seasonal) loan. The
primary purpose of this loan is to finance our operating needs. The maximum we
may borrow under this line is $85.0 million until the loan's maturity on
December 1, 2022. 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 credit agreement to avoid the commitment fee. As
of June 30, 2022 and December 31, 2021, the principal balance outstanding on
this credit line was $48.7 million and $0, respectively, allowing us to borrow
an additional $36.3 million as of June 30, 2022.

Both the revolving and seasonal loans with CoBank are set up with a variable
rate option. The variable rate is set daily by CoBank. 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 was 3.99% and 2.56% as of June 30, 2022 and December 31, 2021,
respectively. As of June 30, 2022 and December 31, 2021, the interest rate on
the seasonal loan was 3.69% and 2.31%, respectively. We were in compliance with
all covenants and conditions under the loans as of June 30, 2022.

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OFF BALANCE SHEET FINANCING ARRANGEMENTS

We do not utilize variable interest entities or other off-balance sheet financial arrangements.

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