SOUTHWEST IOWA RENEWABLE ENERGY, LLC - FORM 10-Q

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EXCEL - IDEA: XBRL DOCUMENT - SOUTHWEST IOWA RENEWABLE ENERGY, LLC	Financial_Report.xls
EX-31.1 - SOUTHWEST IOWA RENEWABLE ENERGY, LLC	form10qex311_050611.htm
EX-32.1 - SOUTHWEST IOWA RENEWABLE ENERGY, LLC	form10qex321_050611.htm
EX-31.2 - SOUTHWEST IOWA RENEWABLE ENERGY, LLC	form10qex312_050611.htm
EX-32.2 - SOUTHWEST IOWA RENEWABLE ENERGY, LLC	form10qex322_050611.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

Form 10-Q
(Mark one)
R	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011

£	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________

		Commission file number 000-53041

SOUTHWEST IOWA RENEWABLE ENERGY, LLC
(Exact name of registrant as specified in its charter)

Iowa			20-2735046
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

10868 189th Street, Council Bluffs, Iowa 51503
(Address of principal executive offices)

(712) 366-0392
(Registrant’s telephone number, including area code)

__________________________________________________________________
(Former name, former address and former fiscal year, of changed since last report)

Indicate by check mark whether the registrant has (1) 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 R 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). Yes £ No R
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 £ Accelerated filer £ Non-accelerated filer £ Smaller reporting company R

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes £ No R
As of March 31, 2011, the issuer had 8,805 Series A Units, 3,334 Series B Units, and 1,000 Series C Units issued and outstanding.

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION

Item Number	Item Matter	Page Number

Item 1.	Financial Statements.	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	15

Item 3.	Quantitative and Qualitative Disclosure about Market Risk.	22

Item 4.	Controls and Procedures.	22

PART II—OTHER INFORMATION

Item 1.	Legal Proceedings.	23

Item 1A.	Risk Factors.	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	23

Item 3.	Defaults Upon Senior Securities.	23

Item 4.	(Removed and Reserved).	23

Item 5.	Other Information.	23

Item 6.	Exhibits.	23

	Signatures	27

	Certifications	See Exhibits 31 and 32

PART I—FINANCIAL INFORMATION

Item 1. Unaudited Financial Statements.

SOUTHWEST IOWA RENEWABLE ENERGY, LLC
Balance Sheets
ASSETS	March 31, 2011		September 30, 2010
	(Unaudited)
Current Assets
Cash and cash equivalents	$	1,594,123	$	3,432,544
Restricted cash		175,607		0
Accounts receivable		296,337		0
Accounts receivable, related party		22,241,348		23,392,670
Due from broker		3,367,640		2,260,015
Inventory		14,823,894		8,013,153
Derivative financial instruments, related party		5,812,957		688,039
Prepaid expenses and other		1,853,479		533,513
Total current assets		50,165,385		38,319,934

Property, Plant, and Equipment
Land		2,064,090		2,064,090
Plant, Building and Equipment		203,419,944		199,771,260
Office and Other Equipment		731,527		720,529
Total Cost		206,215,561		202,555,879
Accumulated Depreciation		(36,848,927)		(28,757,303)
Net property and equipment		169,366,634		173,798,576

Other Assets
Other		125,000		1,142,388
Financing costs, net of amortization of $2,145,525 and $1,949,651		1,734,608		1,930,482
Total other assets		1,859,608		3,072,870
Total Assets	$	221,391,627		$ 215,191,380
Notes to Condensed Unaudited Financial Statements are an integral part of this Statement.

SOUTHWEST IOWA RENEWABLE ENERGY, LLC
Balance Sheets
LIABILITIES AND MEMBERS’ EQUITY	March 31, 2011		September 30, 2010
	(Unaudited)
Current Liabilities
Accounts payable	$	731,122	$	978,388
Accounts payable, related parties		5,671,402		2,542,055
Derivative financial instruments		1,112,113		75,125
Accrued expenses		2,339,324		2,624,916
Accrued expenses, related parties		4,031,830		2,913,206
Current maturities of notes payable		27,793,654		18,058,574
Total current liabilities		41,679,445		27,192,264

Long Term Liabilities
Notes payable, less current maturities		128,701,500		135,868,087
Other		650,008		700,006
Total long term liabilities		129,351,508		136,568,093
Commitments and Contingencies
Members’ Equity
Members’ capital, 13,139 Units issued and outstanding		76,474,111		76,474,111
Accumulated (deficit)		(26,113,437)		(25,043,088)
Total members’ equity		50,360,674		51,431,023
Total Liabilities and Members’ Equity	$	221,391,627	$	215,191,380
Notes to Condensed Unaudited Financial Statements are an integral part of this Statement.

SOUTHWEST IOWA RENEWABLE ENERGY, LLC

Statements of Operations

		Three Months Ended March 31, 2011 (Unaudited)		Three Months Ended March 31, 2010 (Unaudited)		Six Months Ended March 31, 2011 (Unaudited)		Six Months Ended March 31, 2010 (Unaudited)

Revenues	$	79,436,677	$	51,977,147	$	141,702,420	$	102,725,586
Cost of Goods Sold
Cost of goods sold-non hedging		68,834,264		52,988,079		126,978,677		101,924,029
Realized & unrealized hedging (gains and losses)		7,723,971		(3,615,730)		8,611,790		(3,697,529)
Cost of Goods Sold		76,558,235		49,372,349		135,590,467		98,226,500

Gross Margin		2,878,442		2,604,798		6,111,953		4,499,086

General and Administrative Expenses		1,158,462		1,358,410		2,359,350		2,496,708

Operating Income		1,719,980		1,246,388		3,752,603		2,002,378

Other ( Income) Expense
Interest income		(3,037)		(13,220)		(7,009)		(26,383)
Interest expense		2,446,374		2,113,260		4,885,938		4,443,644
Miscellaneous income		(49,326)		(110,801)		(55,977)		(116,775)
Total		2,394,011		1,989,239		4,822,952		4,300,486

Net (Loss)	$	(674,031)	$	(742,851)	$	(1,070,349)	$	(2,298,108)

Weighted Average Units
Outstanding—Basic & Diluted		13,139		13,139		13,139		13,139
Net (loss) per unit –basic & diluted	$	(51.30)	$	(56.54)	$	(81.46)	$	(174.91)

Net (loss)	$	(1,070,349)	$	(2,298,108)
Adjustments to reconcile net (loss) to net cash provided by (used in)
operating activities: Depreciation		8,091,624		9,535,557
Amortization		195,874		210,589
(Increase) decrease in current assets: Accounts receivable		854,985		(2,136,079)
Inventories		(6,810,741)		(7,004,595)
Prepaid expenses and other		(1,319,966)		(607,575)
Derivative financial instruments		(5,124,918)		(1,487,224)
Due from broker		(1,107,625)		(639,895)
Increase (decrease) in current liabilities:
Accounts and retainage payable		2,882,081		1,559,439
Derivative financial instruments		1,036,988		-
Accrued expenses		2,471,337		1,792,167
Net cash provided by (used in) operating activities		99,290		(1,075,724)
Cash Flows from Investing Activities
Purchase of property and equipment		(2,517,294)		(982,029)
Increase in restricted cash		(300,607)		-
Net cash (used in) investing activities		(2,817,901)		(982,029)
Cash Flows from Financing Activities
Increase in prepaids and other long term liabilities		(49,998)		(37,156)
Proceeds from borrowings		7,300,000		7,530,702
Payments on borrowings		(6,369,812)		(4,703,954)
Net cash provided by financing activities		880,190		2,789,592
Net increase (decrease) in cash and cash equivalents		(1,838,421)		731,839
Cash and Equivalents—Beginning of Period		3,432,544		7,455,084
Cash and Equivalents—End of Period	$	1,594,123	$	8,186,923

Supplemental Disclosures of Noncash Investing
And Financing Activities

Accrued interest included in long term debt	$	1,638,305	$	1,131,531
Cash Paid for Interest	$	3,034,995	$	2,466,334

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

SOUTHWEST IOWA RENEWABLE ENERGY, LLC

Notes to Condensed Financial Statements (unaudited)

March 31, 2011

Note 1: Nature of Business

Southwest Iowa Renewable Energy, LLC (the “Company”), located in Council Bluffs, Iowa, was formed in March, 2005 to construct and operate a 110 million gallon capacity ethanol plant. The Company began producing ethanol in February 2009. In the current fiscal year which ends September 30, 2011 (“Fiscal Year 2011”) to date and the year ended September 30, 2010 (“Fiscal Year 2010”), the Company has operated at 100% of its 110 million gallon nameplate capacity. The Company sells its ethanol, modified wet distillers grains with solubles, and corn syrup in the continental United States. The Company sells its dried distillers grains with solubles in the continental United States, Mexico, and the Pacific Rim.

Note 2: Summary of Significant Accounting Policies

Basis of Presentation and Other Information

The balance sheet as of September 30, 2010 was derived from the Company’s audited balances as of that date. The accompanying financial statements as of and for the three and six months ended March 31, 2011 and 2010 are unaudited and reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. These unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto, for the year ended September 30, 2010 contained in the Company’s Annual Report on Form 10-K. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire year.

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 and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Cash & Cash Equivalents

The Company considers all highly liquid debt instruments purchased with a maturity of three months or less when purchased to be cash equivalents.

Restricted Cash

The Company has restricted cash used as collateral for the second Iowa Department of Economic Development (“IDED”) loan.

Financing Costs

Financing costs associated with the construction and revolving loans are recorded at cost and include expenditures directly related to securing debt financing. The Company began amortizing these costs using the effective interest method over the terms of the agreements in March, 2008. The interest expense amortization was capitalized during the development stage as construction in progress.

Concentration of Credit Risk

The Company’s cash balances are maintained in bank deposit accounts which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts.

Revenue Recognition

The Company sells ethanol and related products pursuant to marketing agreements. Revenues are recognized when the marketing company (the “Customer”) has taken title to the product, prices are fixed or determinable and collectability is reasonably assured. The Company’s products are generally shipped FOB loading point. The Company’s ethanol sales are handled through an ethanol agreement (the “Ethanol Agreement”) with Bunge North America, Inc. (“Bunge”). Syrup, distillers grains and solubles, and modified wet distillers grains with solubles (co-products) are sold through a distillers grains agreement (the “DG Agreement”) with Bunge, which sets the price based on the market price to third parties. Marketing fees, agency fees, and commissions due to the marketers are paid separately from the settlement for the sale of the ethanol products and co-products and are included as a component of cost of goods sold. Shipping and handling costs incurred by the Company for the sale of ethanol and co-products are included in cost of goods sold.

Southwest Iowa Renewable Energy, LLC

Notes to Condensed Financial Statements (unaudited)

Note 2: Summary of Significant Accounting Policies (Continued)

Accounts Receivable

Trade accounts receivable are recorded at original invoice amounts less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering customers’ financial condition, credit history and current economic conditions. As of March 31, 2011, management has determined no allowance is necessary. Receivables are written off when deemed uncollectible and recoveries of receivables written off are recorded when received.

Incentive Compensation Plan

The Company established an incentive compensation plan under which employees may be awarded equity appreciation units and equity participation units. Fair value of the awards are amortized over the vesting period set for each award. The units outstanding at this time vest three years from the grant date.

Investment in Commodities Contracts, Derivative Instruments and Hedging Activities

The Company is exposed to certain risks related to ongoing business operations. The primary risks that the Company manages by using forward or derivative instruments are price risk on anticipated purchases of corn and sales of ethanol.

The Company is subject to market risk with respect to the price and availability of corn, the principal raw material used to produce ethanol and ethanol co-products. In general, rising corn prices result in lower profit margins and, therefore, represent unfavorable market conditions. This is especially true when market conditions do not allow the Company to pass along increased corn costs to customers. The availability and price of corn is subject to wide fluctuations due to unpredictable factors such as weather conditions, farmer planting decisions, governmental policies with respect to agriculture and international trade and global demand and supply.

Certain contracts that literally meet the definition of a derivative may be exempted from derivative accounting as normal purchases or normal sales. 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. Contracts that meet the requirements of normal purchases or sales are documented as normal and exempted from the accounting and reporting requirements of derivative accounting. Forward corn purchase contracts initiated after September 28, 2010 are not exempt from the accounting and reporting requirements of derivative accounting as the Company net settled its forward contracts. As such, the Company no longer applies the normal purchase and sale exemption under derivative accounting for forward purchases of corn. As of March 31, 2011, the Company is committed to purchasing 5,508,665 million bushels of corn on a forward contract basis resulting in a total commitment of approximately $31,089,000. These forward contracts had a fair value of approximately $5,813,000 at March 31, 2011. As of March 31, 2011, we are committed to selling 7,311,288 gallons of ethanol and 60,107 tons of distillers grains and solubles. The forward contracts relating to ethanol and distillers grains and solubles apply the normal purchase and sale exemption and are not marked to market.

In addition, the Company enters into short-term cash, options and futures contracts as a means of managing exposure to changes in commodity prices. The Company enters into derivative contracts to hedge the exposure to price risk as it relates to ethanol sales. The Company maintains a risk management strategy that uses derivative instruments to minimize significant, unanticipated earnings fluctuations caused by market fluctuations. The Company’s specific goal is to protect itself from large moves in commodity costs. All derivatives will be designated as non-hedge derivatives and the contracts will be accounted for at fair value. Although the contracts will be effective economic hedges of specified risks, they are not designated as and accounted for as hedging instruments.

As part of its trading activity, the Company uses futures and option contracts offered through regulated commodity exchanges to reduce risk and risk of loss in the market value of inventories. To reduce that risk, the Company generally takes positions using cash and futures contracts and options. The gains or losses are included in revenue if the contracts relate to ethanol and cost of goods sold if the contracts relate to corn. During the six months ended March 31, 2011 and 2010, the Company recorded a combined realized and unrealized (gain) loss of $8,611,790 and ($3,697,529), respectively, as a component of cost of goods sold.

Southwest Iowa Renewable Energy, LLC

Notes to Condensed Financial Statements (unaudited)

Note 2: Summary of Significant Accounting Policies (Continued)

The effect of derivatives on the gross margin for the three and six months ended March 31, 2011 and 2010, is summarized below:

Balance Sheet Classification

Number of Bushels at

March 31, 2011

September 30, 2010


Derivative asset, related party	Current Asset	5,508,655	$	5,812,957	$	688,039
Derivative liability	Current Liability	2,910,000	$	1,112,113	$	75,125

	Statement of Operations Classification			Three Months Ended March 31, 2011		Three Months Ended March 31, 2010

Realized losses (gains)		Cost of Goods Sold	$	3,760,029	$	(1,488,368)
Unrealized (gains) losses		Cost of Goods Sold		3,963,942		(2,127,362)
Net realized and unrealized (gains) losses			$	7,723,971	$	(3,615,730)

	Statement of Operations Classification			Six Months Ended March 31, 2011		Six Months Ended March 31, 2010

Realized losses (gains)		Cost of Goods Sold	$	4,647,848	$	(2,210,305)
Unrealized (gains) losses		Cost of Goods Sold		3,963,942		(1,487,224)
Net realized and unrealized (gains) losses			$	8,611,790	$	(3,697,529)

Inventory

Inventory is stated at the lower of cost or market value using the average cost method. Market value is based on current replacement values, except that it does not exceed net realizable values and it is not less than the net realizable values reduced by an allowance for normal profit margin.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings 40 Years

Process Equipment 10-20 Years

Office Equipment 3-7 Years

Maintenance and repairs are charged to expense as incurred; major improvements and betterments are capitalized.

Effective January 1, 2011 the Company increased its estimate of useful life on a significant portion of its processing equipment; management believes this change of estimate more closely approximates the actual life. This change in estimate is accounted for on a prospective basis. This change resulted in a decrease in depreciation expense, an increase to operating income, a decrease of net (loss) of approximately $1.8 million, and a decrease in (loss) per unit of $137.

Southwest Iowa Renewable Energy, LLC

Notes to Condensed Financial Statements (unaudited)

Note 2: Summary of Significant Accounting Policies (Continued)

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows from operations are less than the carrying value of the asset group. An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset. Management has determined that its projected future cash flows from operations exceed the carrying value of the plant and that no impairment existed at March 31, 2011.

Income Taxes

The Company has elected to be treated as a partnership for federal and state income tax purposes and generally does not incur income taxes. Instead, the Company’s earnings and losses are included in the income tax returns of the members. Therefore, no provision or liability for federal or state income taxes has been included in these financial statements.

Management has evaluated the Company’s tax positions under the Financial Accounting Standards Board (“FASB”) issued guidance on accounting for uncertainty in income taxes and concluded that the Company has taken no uncertain tax positions that require adjustment to the financial statements to comply with the provisions of this guidance. With few exceptions, the Company is no longer subject to income tax examinations by the U.S. Federal, state or local authorities for the years before 2007.

Net (loss) per unit

(Loss) per unit has been computed on the basis of the weighted average number of units outstanding during each period presented.

Fair value of financial instruments

The carrying amounts of cash and cash equivalents, derivative financial instruments, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short term nature of these instruments. The Company believes it is not practical to estimate the fair value of debt.

Note 3: Inventory

Inventory is comprised of the following at:

	March 31, 2011		September 30, 2010


Raw materials - corn	$	7,298,656	$	3,796,261
Supplies and chemicals		1,989,045		1,716,922
Work in process		2,882,658		1,484,157
Finished goods		2,683,535		1,015,813
Total	$	14,823,894	$	8,013,153

Note 4: Members’ Equity

At March 31, 2011 and September 30, 2010 outstanding member units were:

_________________________________________________________________________________________________________________

A Units	8,805
B Units	3,334
C Units	1,000

The Series A, B and C unit holders all vote on certain matters with equal rights. The Series C unit holder, as a group, has the right to elect one Board member. The Series B unit holder has the right to elect the number of Board members that bears the same proportion to the total number of Directors in relation to Series B outstanding units to total outstanding units. Series A unit holders as a group have the right to elect the remaining number of Directors not elected by the Series C and B unit holders.

Southwest Iowa Renewable Energy, LLC

Notes to Condensed Financial Statements (unaudited)

Note 5: Revolving Loan/Credit Agreements

AgStar

The Company entered into a Credit Agreement (the “Credit Agreement”) with AgStar Financial Services, PCA (“AgStar”) and a group of lenders (together, the "Lenders") for $126,000,000 senior secured debt, consisting of a $111,000,000 construction loan and a $15,000,000 revolving line of credit. Borrowings under the loan include a variable interest rate based on LIBOR plus 3.65% for each advance under the Credit Agreement. On August 1, 2009, the loan was segmented into an amortizing term facility of $101,000,000, a term revolver of $10,000,000 and a revolving working capital term facility of $15,000,000. On September 1, 2009, the Company elected to convert 50% of the term note into a fixed rate loan at the lender’s bonds rate plus 3.25%, with a 5% floor. The portion of the term loan not fixed and the term revolving line of credit accrues interest equal to LIBOR plus 3.45%, with a 5% floor. The Credit Agreement requires compliance with certain financial and nonfinancial covenants. Borrowings under the Credit Agreement are collateralized by substantially all of the Company’s assets. The term credit facility of $101,000,000 requires monthly principal payments which began on March 1, 2010. The loan is amortized over 114 months and matures five years after the conversion date, August 1, 2014. The term of the $15,000,000 revolving working capital facility agreement matured on March 31, 2011, but was extended through June 30, 2011. Any borrowings are subject to borrowing base restrictions as well as certain prepayment penalties. The $10,000,000 term revolver is interest only until maturity on August 1, 2014.

Under the terms of the Credit Agreement, the Company may draw the lesser of $15,000,000 or 75 percent of eligible accounts receivable and eligible inventory. As part of the revolving line of credit, the Company may request letters of credit to be issued up to a maximum of $5,000,000 in the aggregate. It had one letter of credit outstanding under this provision as of March 31, 2011, in favor of MidAmerica Energy Company (“MidAm”), in the amount of $2,000,000. This letter of credit is no longer required as of April 1, 2011. As discussed above, the revolving line of credit was extended to June 30, 2011.

As of March 31, 2011 and September 30, 2010, the outstanding balance under the Credit Agreement was $111,512,914 and $114,616,721 respectively. In addition to all the other payments due under the Credit Agreement, the Company also agreed to pay, beginning at the end of the Fiscal 2010, an amount equal to 65% of the Company’s Excess Cash Flow (as defined in the Credit Agreement), up to a total of $4,000,000 per year, and $16,000,000 over the term of the Credit Agreement. An excess cash flow payment of $4,000,000 is due for Fiscal 2010. Under the terms of the Credit Agreement, the remaining balance of the excess cash flow (included in the outstanding balance listed above) at March 31, 2011 was $2,000,000, to be paid in two equal installments on July 31, 2011 and September 30, 2011.

The Company's revolving line of credit was expected to be extended annually for a one year period ending each March 31. The Company and the Lenders agreed to an extension from March 31, 2011 to June 30, 2011, rather than a one-year extension, in order for the Lenders to continue to closely monitor the Company's performance. Due to continuing challenges for the industry, including fluctuating commodity pricing and projected challenges to profitability, as well as the Company's specific circumstances, we have agreed with the Lenders to provide additional regular reporting on liquidity, operations and other factors.

The Company is currently working with the Lenders on a renewal of our revolving line of credit through March 31, 2012; however, there is no guarantee that the Company will be able to reach agreement with the Lenders on the extension. In addition, an additional financial covenant will come into effect as of the end of our fiscal quarter ending June 30, 2011, which we do not expect to meet. We have been discussing this financial covenant with the Lenders for an extended period of time and the Lenders have not been willing to modify the covenant. However, while there can be no assurance that the Lenders will do so, we expect that the Lenders will waive this covenant periodically so long as other covenants and factors are satisfactory to them.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. From inception to March 31, the Company has experienced significant fluctuations in the income and the costs of the basic product inputs and sales prices. The Company has also undertaken significant borrowings to finance the plant and related working capital needs which result in a debt level that is higher than many comparable companies. The possible failure to have the revolving line renewed and the potential covenant default could lead to the necessity of replacing the financing provided under the Credit Agreement. The Company’s ability to continue as a going concern is dependent on the Company’s ability to successfully renew the revolving line of credit or find suitable other sources for its working capital needs. There can be no assurance that an alternate financing facility is available to the Company.

Note 6: Notes Payable

Notes payable consists of the following as March 31, 2011 and September 30, 2010:

March 31, 2011

September 30, 2010

$300,000 Note payable to IDED, a non-interest bearing obligation with monthly payments of $2,500 due through the maturity date of March 2016 on the non-forgivable portion. (A)	$	295,000	$	-
$200,000 Note payable to Iowa Department Economic Development (“IDED”) a non-interest bearing obligation with monthly payments of $1,667 due through the maturity date of March 2012 on the non-forgivable portion. (A)		18,333		28,333

Note payable to affiliate Holdings, bearing interest at LIBOR plus 7.50-10.5% with a floor of 3.00% (7.96% at March 31, 2011); maturity on August 31, 2014.		30,438,805		29,220,130

Note payable to affiliate ICM, bearing interest at LIBOR plus 7.50-10.5% with a floor of 3.00% (7.96% at March 31, 2011); maturity on August 31, 2014.		10,481,102		10,061,472

Term facility and term revolver payable to AgStar bearing interest at LIBOR plus 3.45% to 3.25%, with a 5.00% floor (5.00% at March 31, 2011); maturity on August 1, 2014.		89,012,914 10,000,000		95,366,726 10,000,000

$15 million revolving working capital term facility payable to AgStar bearing interest at LIBOR plus 3.65% with a 5.00% floor (5.00% at March 31, 2011), maturing June 30, 2011.		12,500,000		9,250,000

Revolving line of credit payable to affiliate Holdings bearing interest at LIBOR plus 7.50-10.5% with a floor of 3.00% (7.76% at March 31, 2011).		3,749,000		-
Less current maturities		156,495,154 (27,793,654)		153,926,661 (18,058,574)
Total long term debt	$	128,701,500	$	135,868,087

(A) The $300,000 IDED loan is comprised of two components under the Master Contract (the “Master Contract”) between the Company and IDED: i) a $150,000, non interest-bearing component that requires monthly payments of $2,500, which began in March, 2011 with a final payment of $2,500 due February, 2016; and ii) a $150,000 forgivable loan. The Company has a $300,000 letter of credit with regard to the $300,000 loan (secured by a time deposit account in the same amount) to collateralize the loan. The note under the Master Contract is collateralized by substantially all of the Company’s assets, subordinate to the Credit Agreement.

Approximate aggregate maturities of notes payable as of March 31, 2011 are as follows:

Year Ended March 31,
2012	$	27,793,654
2013		9,893,427
2014		10,398,059
2015		108,385,014
2016		25,000
Total	$	156,495,154

Note 7: Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company used various methods including market, income and cost approaches. Based on these approaches, the Company often utilized certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observable inputs used in the valuation techniques, the Company is required to provide the following information according to the fair value hierarchy.

The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value will be 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 classifications of such instruments pursuant to the valuation hierarchy, is set below.

Derivative financial statements. Commodity futures and exchange traded options 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 the Chicago Mercantile Exchange (“CME”) market. Ethanol contracts are reported at fair value utilizing Level 2 inputs from third-party pricing services. Forward purchase contracts are reported at fair value utilizing Level 2 inputs. For these contracts, the Company obtains fair value measurements from local grain terminal values. The fair value measurements consider observable data that may include live trading bids from local elevators and processing plants which are based off the CME market.

The following table summarizes financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2010 and September 30, 2010, segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

Southwest Iowa Renewable Energy, LLC

Notes to Condensed Financial Statements (unaudited)

Note 7: Fair Value Measurement (continued)

March 31, 2011

		Total		Level 1		Level 2		Level 3
Derivative financial instruments
	Corn forward contracts asset	$	5,812,957	$	---	$	5,812,957	$	---

	Corn futures & exchange traded options liability		(1,112,113)		(1,112,113)		---		---
		$	4,700,844	$	(1,112,113)	$	5,812,957	$	---

September 30, 2010

		Total		Level 1		Level 2		Level 3
Derivative financial instruments
	Corn forward contracts asset	$	688,039	$	---	$	688,039	$	---

	Corn futures & exchange traded options liability		(75,125)		(75,125)		---		---
		$	612,914	$	(75,125)	$	688,039	$	---

Certain financial assets and liabilities are measured at fair value on a non-recurring basis; that is the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment.

Note 8: Incentive Compensation

The Company has a unit appreciation plan which provides that the Board of Directors may make awards of equity participation units (“EPUs”) to employees from time to time, subject to vesting provisions as determined for each award. The EPUs are valued at book value. The Company had approximately five unvested EPUs outstanding under this plan as of March 31, 2011, which will be vest three years from the date of the award. During the six months ended March 31, 2011 and 2010, the Company recorded compensation expense related to this plan of approximately $1,667, and none, respectively. As of March 31, 2011 and September 30, 2010, the Company had a liability of approximately $2,222 and none outstanding as deferred compensation and has approximately $18,333 to be recognized as future compensation expense over the weighted average vesting period of approximately three years. The amount to be recognized in future years as compensation expense is estimated based on book value of the Company.

Note 9: Related Party Transactions

On November 1, 2006, in consideration of its agreement to invest $20,004,000 in the Company, Bunge purchased the only Series B Units under an arrangement whereby the Company would (i) enter into various agreements with Bunge or its affiliates discussed below for management, marketing and other services, and (ii) have the right to elect a number of Series B Directors which are proportionate to the number of Series B Units owned by Bunge, as compared to all Units. Under the Company’s Third Amended and Restated Operating Agreement (the “Operating Agreement”), the Company may not, without Bunge’s approval (i) issue additional Series B Units, (ii) create any additional Series of Units with rights which are superior to the Series B Units, (iii) modify the Operating Agreement to adversely impact the rights of Series B Unit holders, (iv) change its status from one which is managed by managers, or vise versa, (v) repurchase or redeem any Series B Units, (vi) take any action which would cause a bankruptcy, or (vii) approve a transfer of Units allowing the transferee to hold more than 17% of the Company’s Units or to a transferee which is a direct competitor of Bunge.

Southwest Iowa Renewable Energy, LLC

Notes to Condensed Financial Statements (unaudited)

Note 9: Related Party Transactions (continued)

The Company entered into the Holdings Revolving Note dated August 26, 2009 with Holdings, providing for the extension of a maximum of $10,000,000 in revolving credit. Holdings has a commitment, subject to certain conditions, to advance up to $3,750,000 at the Company’s request under the Revolving Note; amounts in excess of $3,750,000 may be advanced by Holdings in its discretion. Interest will accrue at the rate of 7.5 percent over six-month LIBOR. While repayment of the Revolving Note is subordinated to the Credit Agreement, the Company may make payments on the Revolving Note so long as it is in compliance with its borrowing base covenant and there is not a payment default under the Credit Agreement. As of March 31, 2011 and September 30, 2010, the balance outstanding was $3,749,000 and $0 under the Revolving Note.

In December, 2008, the Company and Bunge entered into other various agreements. Under a Lease Agreement (the “Lease Agreement”), the Company leased from Bunge a grain elevator located in Council Bluffs, Iowa, for approximately $67,000 per month. Expenses for the three and six months ended March 31, 2011 and 2010 were $200,001 and $400,002 under the Lease Agreement.

Under the Ethanol Agreement, the Company sells Bunge all of the ethanol produced at its Facility, and Bunge purchases the same, up to the Facility’s nameplate capacity of 110,000,000 gallons a year. We pay Bunge a per-gallon fee for ethanol sold by Bunge, subject to a minimum annual fee of $750,000 and adjusted according to specified indexes after three years. The initial term of the agreement, which commenced August 20, 2009, is three years and it will automatically renew for successive three-year terms unless one party provides the other with notice of their election to terminate 180 days prior to the end of the term. The Company has incurred expenses of $318,568 and $572,529 during the three and six months ended March 31, 2011 and $216,396 and $329,604 during the three and six months ended March 31, 2010, respectively under the Ethanol Agreement.

Under a Risk Management Services Agreement effective January 1, 2009, Bunge agreed to provide the Company with assistance in managing its commodity price risks for a quarterly fee of $75,000. The agreement has an initial term of three years and will automatically renew for successive three year terms, unless one party provides the other notice of their election to terminate 180 days prior to the end of the term. Expenses under this agreement for the three and six months ended March 31, 2011 and 2010 were $75,000 and $150,000, respectively.

On June 26, 2009, the Company executed a Railcar Agreement with Bunge for the lease of 325 ethanol cars and 300 hopper cars which are used for the delivery and marketing of ethanol and distillers grains. Under the Railcar Agreement, the Company leases railcars for terms lasting 120 months and continuing on a month to month basis thereafter. The Railcar Agreement will terminate upon the expiration of all railcar leases. Expenses under this agreement for the three and six months ended March 31, 2011 were $1,215,657 and $2,424,347. Expenses for the three and six months ended March 31, 2010 were $1,215,505 and $2,431,010.

On November 12, 2010, the Company entered into a Corn Oil Agency Agreement with Bunge to market its corn oil (the “Corn Oil Agency Agreement”). The Corn Oil Agency Agreement has an initial term of three years and will automatically renew for successive three-year terms unless one party provides the other notice of their election to terminate 180 days prior to the end of the term. Expenses under this agreement for the three and six months ended March 31, 2011 were $21,583 and $25,922. There were no expenses for the three and six months ended March 31, 2010.

ICM

On November 1, 2006, in consideration of its agreement to invest $6,000,000 in the Company, ICM became the sole Series C Member. As part of ICM’s agreement to invest in Series C Units, the Operating Agreement provides that the Company will not, without ICM’s approval (i) issue additional Series C Units, (ii) create any additional Series of Units with rights senior to the Series C Units, (iii) modify the Operating Agreement to adversely impact the rights of Series C Unit holders, or (iv) repurchase or redeem any Series C Units. Additionally, ICM, as the sole Series C Unit owner, is afforded the right to elect one Series C Director to the Board so long as ICM remains a Series C Member.

On June 17, 2010, the Company issued the ICM Term Note in the amount of $9,970,000, which is convertible at the option of ICM into Series C Units at a conversion price of $3,000 per unit. As of March 31,2011 and September 30, 2010, there was $10,481,102 and $10,061,000 outstanding under the ICM Term Note, respectively, and approximately $137,000 and $139,000 of accrued interest due to ICM as of March 31, 2011 and September 30, 2010, respectively.

Additionally, to induce ICM to agree to the ICM Term Note, the Company entered into the ICM Equity Agreement on June 17, 2010, whereby ICM (i) retains preemptive rights to purchase new securities in the Company, and (ii) receives 24% of the proceeds received by the Company from the issuance of equity or debt securities.

On July 13, 2010, the Company entered into a Joint Defense Agreement (the “Joint Defense Agreement”) with ICM, which contemplates that we may purchase from ICM one or more Tricanter centrifuges (the “Centrifuges”). Because such equipment has

Southwest Iowa Renewable Energy, LLC

Notes to Condensed Financial Statements (unaudited)

Note 9: Related Party Transactions (continued)

been the subject of certain legal actions regarding potential patent infringement, the Joint Defense Agreement provides as follows: (i) that the parties may, but are not obligated to, share information and materials that are relevant to the common prosecution and/or defense of any such patent litigation regarding the Centrifuges (the “Joint Defense Materials”), (ii) that any such shared Joint Defense Materials will be and remain confidential, privileged and protected (unless such Joint Defense Materials cease to be privileged, protected or confidential through no violation of the Joint Defense Agreement), (iii) upon receipt of a request or demand for disclosure of Joint Defense Material to a third party, the party receiving such request or demand will consult with the party that provided the Joint Defense Materials and if the party that supplied the Joint Defense Materials does not consent to such disclosure then the other party will seek to protect any disclosure of such materials, (iv) that neither party will disclose Joint Defense Materials to a third party without a court order or the consent of the party who initially supplied the Joint Defense Materials, (v) that access to Joint Defense Materials will be restricted to each party’s outside attorneys, in-house counsel, and retained consultants, (vi) that Joint Defense Materials will be stored in secured areas and will be used only to assist in prosecution and defense of the patent litigation and (vii) if there is a dispute between us and ICM, then each party waives its right to claim that the other party’s legal counsel should be disqualified by reason of this the Joint Defense Agreement or receipt of Joint Defense Materials. The Joint Defense Agreement will terminate the earlier to occur of (x) upon final resolution of all patent litigation and (y) a party providing ten (10) days advance written notice to the other party of its intent to withdraw from the Joint Defense Agreement. No payments have been made by either party under the Joint Defense Agreement.

On August 25, 2010, the Company entered into a Tricanter Purchase and Installation Agreement (the “Tricanter Agreement”) with ICM, pursuant to which ICM sold the Company a tricanter oil separation system (the “Tricanter Equipment”). In addition, ICM installed the equipment at our ethanol plant in Council Bluffs, Iowa. As of March 31, 2011 and September 30, 2010 the Company has paid $2,592,500 and $0, respectively, related to the Tricanter Agreement.

Note 10: Commitments

The Company entered into a steam contract with an unrelated party under which the vendor agreed to provide the steam required by the Company, up to 475,000 pounds per hour. The Company agreed to pay a net energy rate for all steam provided under the contract as well as a monthly demand charge. The net energy rate is set for the first three years then adjusted each year beginning on the third anniversary date. The steam contract will remain in effect until January 1, 2019. Expenses under this agreement during the three and six months ended March 31, 2011 were $2,554,371 and $4,898,655. Expenses during the three and six months ended March 31, 2010 were $2,822,719 and $5,438,251.

Note 11: Major Customers

On August 20, 2009, the Company entered into an agreement with a related entity and major customer for marketing, selling, and distributing all of the ethanol and distillers grains with solubles produced by the Company. The Company has expensed $763,087 and $1,349,325 in marketing fees under this agreement for the three and six months ended March 31, 2011. During the three and six months ended March 31, 2010, the Company expensed $474,661 and $814,061 for marketing fees. Revenues with this customer were $78,125,882 and $140,192,149 for the three and six months ended March 31, 2011. Revenues with this customer were $51,977,147 and $102,725,586 for the three and six months ended March 31, 2010. Trade accounts receivable due from this customer were $22,241,348 and $23,392,670 at March 31, 2011 and September 30, 2010, respectively.

Note 12: Contingent Liability

On March 24, 2011, the Company received a letter from the EPA (Environmental Protection Agency) alleging violations of environmental regulations which could lead to the imposition of a civil penalty. In the letter, EPA offered the Company an opportunity to negotiate a resolution of the matter. The Company and EPA are currently attempting to negotiate a resolution and, to that end, the Company will be providing additional information to the EPA regarding the alleged violations. Based on the information available as of March 31, 2011, the Company established a reserve of $100,000 in anticipation of the potential for assessment of a civil penalty in this matter. The violations alleged in the letter have been addressed and the Company is aware of no ongoing violations with respect to the matters addressed in the letter.

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

Forward Looking Statements

This quarterly report on Form 10-Q by Southwest Iowa Renewable Energy, LLC (the “Company,” “we,” or “us”) 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,” “should,” “anticipate,” “believe,” “expect,” “plan,” “future,” “intend,” “could,” “estimate,” “predict,” “hope,” “potential,” “continue,” or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including the following factors:

Overcapacity in the ethanol industry;

Fluctuations in the price and market for ethanol and distillers grains;

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

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

Changes in the environmental regulations that apply to our plant site and operations;

Our ability to hire and retain key employees for the operation of the plant;

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

Changes in the weather and economic conditions impacting the availability and price of corn and natural gas;

Changes in federal and/or state laws (including the elimination of any federal and/or state ethanol tax incentives);

Changes and advances in ethanol production technology, and competition from alternative fuel additives;

Lack of transport, storage and blending infrastructure preventing ethanol from reaching high demand markets;

Changes in interest rates and lending conditions; and

Results of our hedging strategies.

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 by these cautionary statements.

Overview, Status and Recent Developments

The Company is an Iowa limited liability company, located in Council Bluffs, Iowa, formed in March, 2005 to construct and operate a 110 million gallon capacity ethanol plant. We began producing ethanol in February, 2009 and sell our ethanol, modified wet distillers grains with solubles, and corn syrup in the continental United States. We sell our dried distillers grains with solubles in the continental United States, Mexico, and the Pacific Rim.

Our production facility (the “Facility”) is located in Pottawattamie County in southwestern Iowa. It is near two major interstate highways, within a half a mile of the Missouri River and has access to five major rail carriers. This location is in close proximity to raw materials and product market access. The Facility receives corn and chemical deliveries primarily by truck but is able to utilize rail delivery if necessary. Finished products are shipped by rail and truck. The site has access to water from ground wells and from the Missouri river. In addition to close proximity to the Facility’s primary energy source, steam, there are two natural gas providers available, both with infrastructure immediately accessible.

Results of Operations

The following table shows our results of operations, stated as a percentage of revenue.

		Three Months Ended March 31, 2011 (Unaudited)(1)								Three Months Ended March 31, 2010 (Unaudited)(1)
		Amounts		% of Revenues		Gallons				Amounts		% of Revenues		Gallons
Income Statement Data
Revenues	$		79,436,677		100%		$	2.77	$		51,977,147		100%		$	1.89
Cost of Goods Sold
Material Costs			61,793,749		78%			2.15			32,529,790		63%			1.18
Variable Production Exp.			7,342,844		9%			.26			6,826,875		13%			.26
Fixed Production Exp.			7,421,642		9%			.26			10,015,684		19%			.36
Gross Margin			2,878,443		4%			0.10			2,604,798		5%			.09
General and Administrative Expenses			1,158,462		2%			0.04			1,358,410		2%			0.05
Other Expense			2,394,011		3%			0.08			1,989,239		4%			0.07
Net Loss	$		(674,030)		(1%)		$	(0.02)	$		(742,851)		(1%)		$	(0.03)

(1)

Includes ethanol and distillers grains converted to gallons.

		Six Months Ended March 31, 2011 (Unaudited)(1)								Six Months Ended March 31, 2010 (Unaudited)(1)
		Amounts		% of Revenues		Gallons				Amounts		% of Revenues		Gallons
Income Statement Data
Revenues	$		141,702,420		100%		$	2.57	$		102,725,586		100%		$	1.87
Cost of Goods Sold
Material Costs			104,789,810		74%			1.90			67,540,346		66%			1.23
Variable Production Exp.			14,631,261		10%			.27			13,959,386		14%			.25
Fixed Production Exp.			16,169,396		11%			.29			16,726,768		16%			.30
Gross Margin			6,111,953		5%			0.11			4,499,086		5%			.09
General and Administrative Expenses			2,359,350		2%			0.05			2,496,708		2%			0.05
Other Expense			4,822,952		4%			0.08			4,300,486		4%			(0.08)
Net Loss	$		(1,070,349)		(1%)		$	(0.02)	$		(2,298,108)		(1%)		$	(0.04)

(1) Includes ethanol and distillers grains converted to gallons.

Revenues

Our revenue from operations is derived from two primary sources: sales of ethanol and distillers grains. The following chart displays statistical information regarding our revenues. The increase in revenue in the second quarter, fiscal 2011 over the second quarter, fiscal 2010 was due to the average price per gallon increasing by approximately $0.88 with .57 million additional gallons being produced between the two quarters also included in the increase was a increase in the dry distiller’s grains (“DDG”) average price per ton of approximately $67. The increase in revenue in the first six months of fiscal 2011 versus 2010 was due to the average price per gallon increasing by approximately $0.70 with .56 million additional gallons being produced between the two six month periods and included in the increase was an increase in the dry distiller’s grains (“DDG”) average price per ton of approximately $46 as well as the introduction of corn oil into our revenue stream.

	Three Months Ended March 31, 2011 (Unaudited)					Three Months Ended March 31, 2010 (Unaudited)
	Gallons/Tons Sold		% of Revenues	Gallons/Tons Average Price		Gallons/Tons Sold		% of Revenues	Gallons/Tons Average Price
Statistical Revenue Information
Denatured Ethanol		28,728,974	81%	$	2.22		27,482,126	83%	$	1.58
Dry Distiller’s Grains		76,682	18%	$	175.87		77,473	17%	$	108.39
Corn Oil		1,439	1%	$	911		-	0%	$	-

	Six Months Ended March 31, 2011 (Unaudited)					Six Months Ended March 31, 2010 (Unaudited)
	Gallons/Tons Sold		% of Revenues	Gallons/Tons Average Price		Gallons/Tons Sold		% of Revenues	Gallons/Tons Average Price
Statistical Revenue Information
Denatured Ethanol		55,062,424	81%	$	2.08		55,026,102	84%	$	1.57
Dry Distiller’s Grains		157,042	18%	$	154.02		143,381	16%	$	107.72
Corn Oil		1,728	1%	$	874.00		-	0%	$	-

Cost of Goods Sold

Our cost of goods sold increased $.97 per gallon produced in the second quarter of fiscal 2011 over the second quarter of fiscal 2010. Our two primary costs of producing ethanol and distillers grains are corn and energy, with steam as our primary energy source and to a lesser extent, natural gas. Our corn prices during the second quarter of fiscal 2011 and fiscal 2010 were an average price of $5.55 and $3.73 per bushel, respectively, and we generated an increase in fiscal 2011 and a decrease in fiscal 2010 in our corn costs due to realized and unrealized gains on our hedging activities during the three months ended March 31, 2011 and 2010, respectively. Our average price of corn ground was approximately $5.34 and $3.68 per bushel in the second quarter, 2011 and 2010, respectively. Offsetting our corn cost increase was our average steam and natural gas energy cost of $4.82 and $4.98 per MMBTU in the second quarter fiscal 2011 and fiscal 2010, respectively.

Our cost of goods sold increased $.67 per gallon produced in the first six months of fiscal 2011 over the first six months of fiscal 2010. Our two primary costs of producing ethanol and distillers grains are corn and energy, with steam as our primary energy source and to a lesser extent, natural gas. Our corn prices during the first six months of fiscal 2011 and fiscal 2010 were an average price of $4.91 and $3.56 per bushel, respectively, and we generated an increase in fiscal 2011 and a decrease in fiscal 2010 in our corn costs due to realized and unrealized gains on our hedging activities during the six months ended March 31, 2011 and 2010, respectively. Our average price of corn ground was approximately $4.91 and $3.54 per bushel in the first six months of 2011 and 2010, respectively. Offsetting our corn cost increase was our average steam and natural gas energy cost of $4.74 and $4.98 per MMBTU in the first six months of fiscal 2011 and fiscal 2010, respectively.

General & Administrative Expense

Our general and administrative expenses as a percentage of revenues remained steady at 2% in comparing the three months and six months ending March 31, 2011 and 2010. Operating expenses include salaries and benefits of administrative employees, professional fees and other general administrative costs. We expect our operating expenses to remain flat to slightly decreasing during the second half of fiscal 2011.

Other (Expenses)

Our other expenses for the three and six months ended March 31, 2011 showed a slight increase due to increased interest expenses. Other expenses include interest expense, interest income, rental income and miscellaneous income.

Net (Loss)

Our net loss from operations for the three and six months ended March 31, 2011 and 2010 remained steady at 1%. The reduction in the net loss generated during the two quarters resulted from impaired gross margins which offset increased interest expense.

Liquidity and Capital Resources

Under our $15 million revolving line of credit with the Lenders (the “Revolving LOC”), we have borrowed $12,500,000 as of March 31, 2011, with an additional $500,000 available at March 31, 2011. A letter of credit issued in favor of our steam provider, MidAmerica Energy Company (“MidAm”), in the amount of $2,000,000 reduces capital availability under our Revolving LOC. As of April 1, 2011, the $2,000,000 Letter of Credit is no longer required. We are also relying on receipt of our accounts receivable to help fund operations.

The Company's revolving line of credit was expected to be renewed annually for a one year period ending each March 31. As discussed above, however, the Company and the Lenders agreed to an extension from March 31, 2011 to June 30, 2011, rather than a one-year extension, in order for the Lenders to continue to closely monitor the Company's performance. Due to continuing challenges for the industry, including fluctuating commodity pricing and projected challenges to profitability, as well as the Company's specific circumstances, we have agreed with the Lenders to provide additional regular reporting on liquidity, operations and other factors.

The Company is currently working with the Lenders on a renewal of our revolving line of credit through March 31, 2012; however, there is no guarantee that the Company will be able to reach agreement with the Lenders on the extension, in which case the Company would need to look for other sources of working capital. In addition, an additional financial covenant will come into effect as of the end of our fiscal quarter ending June 30, 2011, which we do not expect to meet. We have been discussing this financial covenant with the Lenders for an extended period of time and the Lenders have not been willing to modify the covenant. However, while there can be no assurance the Lenders will do so, we expect that the Lenders will waive this covenant periodically so long as other covenants and factors are satisfactory to them.

The possible failure to have the revolving line renewed and the potential covenant default could lead to the necessity of replacing the financing provided under the Credit Agreement. The Company’s ability to continue as a going concern is dependent on the Company’s ability to successfully renew the revolving line of credit or find suitable other sources for its working capital needs. There can be no assurance that an alternate financing facility is available to the Company.

In addition, we have entered into a Subordinated Revolving Credit Note (the “Revolving Note”) with Bunge N.A. Holdings Inc. (“Holdings”) effective August 26, 2009 providing for the extension of a maximum of $10,000,000 in revolving credit. Holdings committed, subject to certain conditions, to advance up to $3,750,000 at our request under the Revolving Note, and amounts in excess of $3,750,000 may be advanced by Holdings at its discretion. As of March 31, 2011, we had $3,749,000 outstanding under the Revolving Note. Except as otherwise agreed, we are required to draw the maximum amount available under the Credit Agreement to pay any outstanding advances under the Revolving Note.

Because corn oil prices have increased and ethanol spot prices have increased approximately $0.87 a gallon since mid 2010, we believe operating margins will be break-even to slightly positive over the next two to three quarters. We anticipate margins will remain under pressure for the foreseeable future as ethanol production increases as a result of acquisitions of troubled plants by profitable and larger entities, the commencement of operations of a few remaining projects that are under construction, and the current undersupply of corn in the market. In addition, cash flow from operations may not allow us to continue to make our principal payments under the Credit Agreement. We may be dependent upon our lines of credit to make these payments. We may similarly use our line of credit to hedge corn, natural gas and ethanol. The volatility in the commodities markets has resulted in wide swings in margins for ethanol production. As a result of these factors, we expect our liquidity to be constrained for the foreseeable future.

Primary Working Capital Needs

Cash provided by (used in) operations for the six months ended March 31, 2011 and 2010 was $99,290 and $(1,075,724), respectively. Cash has been used primarily to fund cyclical inventory buildup in the first two quarters of fiscal 2011 and fiscal 2010. For the six months ended March 31, 2011 and 2010, net cash provided by (used in) investing activities was ($2,817,901) and ($982,029), respectively, primarily related to additional equipment purchases. For the six months ended March 31, 2011 and 2010, cash provided by (used in) financing activities was $880,190 and $2,789,592, respectively. This cash was received from additional borrowings.

During the quarter which will end June 30, 2011, we estimate that we will require approximately $57,000,000 or more per quarter for our primary input of corn and $4,500,000 for our energy sources of steam and natural gas. We have up to $2,500,000

in revolving credit available under our revolving credit to support our working capital needs. We cannot estimate the availability of funds for hedging in the future.

Trends and Uncertainties Impacting Ethanol Industry and Our Future Operations

Our profitability is highly dependent on commodity prices, especially prices for corn, ethanol and distillers grains. As a result of price volatility for these commodities, our operating results may fluctuate substantially. The price and availability of corn are subject to significant fluctuations depending upon a number of factors that affect commodity prices in general, including crop conditions, weather, governmental programs and foreign purchases. We may experience increasing costs for corn and natural gas and decreasing prices for ethanol and distillers grains which could significantly impact our operating results. Because the market price of ethanol is not directly related to corn prices, ethanol producers are generally not able to compensate for increases in the cost of corn feedstock through adjustments in prices charged for ethanol. We continue to monitor corn and ethanol prices and their effect on our long-term profitability.

The price of corn has been volatile the past two years. Since September, 2009, the Chicago Mercantile Exchange (“CME”) near-month corn price has increased $4.32 per bushel. As of April 11, 2011 the CME near-month corn price for April, 2011 was $7.76 per bushel. We believe the increase in corn prices was primarily due to short supply and the United States Department of Agriculture (“USDA”) corn acreage report that came out on March 31, 2011. Increasing corn prices will negatively affect our costs of production, however, we also believe that higher corn prices may, depending on the prices of alternative crops, encourage farmers to plant more acres of corn in the coming years and possibly divert land in the Conservation Reserve Program to corn production. We believe an increase in land devoted to corn production could reduce the price of corn to some extent in the future.

On April 8, 2011, the USDA increased in its original forecast of the amount of corn to be used for ethanol production during the current marketing year (2010-11), to a total of 5.0 billion bushels. The forecast is 521 million bushels more than used last year. The USDA cited record ethanol use in December, 2010, continuing recovery in the production of gasoline blends with ethanol, and more favorable blender margins as reasons for the increase. In the April, 2011 update, the USDA held steady the projection of U.S. corn exports for the current marketing year by 1.95 billion bushels. This projection is 10 million bushels less than the projection of last fall and 336 million less than the record exports of 2007-08.

The USDA report for crop year 2010 (the period of September, 2010 through August, 2011) has projected the season-average farm price of corn at $5.20 to $5.60 per bushel. This compares with the 2007-08 season-average record of $4.20 per bushel. We feel that there will continue to be volatility in the corn market.

In the past, ethanol prices have tended to track the wholesale price of gasoline. Ethanol prices can vary from state to state at any given time. For the past two years as of March, 2011 according to ProExporter, the average U.S. ethanol price was $1.77 per gallon. For the same time period, the average U.S. wholesale gasoline price was $2.12 per gallon. During the first three months of 2011, the average U.S. ethanol price was $2.42 per gallon. For the same time period, U.S. wholesale gasoline prices have averaged $2.59 per gallon, or approximately $.17 per gallon above ethanol prices.

The Renewable Fuels Standard and Other Federal Mandates

The American Jobs Creation Act of 2004 created the volumetric ethanol excise tax credit (“VEETC”), which is currently set to expire on December 31, 2011. Referred to as the blender’s credit, VEETC provides companies with a tax credit to blend ethanol with gasoline. The Food, Conservation and Energy Act of 2008 (the “2008 Farm Bill”) amended the amount of tax credit provided under VEETC to 45 cents per gallon of pure ethanol and 38 cents per gallon for E85, a blended motor fuel containing 85% ethanol and 15% gasoline. The elimination or further reduction of VEETC or other federal tax incentives to the ethanol industry would likely have a material adverse impact on our business by reducing demand and price for the ethanol we produce.

The Energy Improvement & Extension Act of 2008 (the “2008 Act”) included cellulosic ethanol supports applicable to corn-based ethanol and bolsters those contained in 2007. Theses supports have impacted the ethanol industry by enhancing both the production and use of ethanol. The 2008 Act modified the provisions of the act that created the Renewable Fuel Standard (“RFS”). The U.S. Environmental Protection Agency (the "EPA") is responsible for revising and implementing regulations to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel. On February 3, 2010, the EPA implemented a regulation that requires 12.95 billion gallons of renewable fuel be sold or dispensed in 2010, increasing to 36 billion gallons by 2022. This requirement does not apply just to corn-based ethanol, but includes all forms of fuel created from feedstocks that qualify as "renewable biomass". The EPA regulation also expanded the RFS program beyond gasoline to generally cover all transportation fuel. We cannot assure that this program’s mandates will continue in the future. We believe that any reversal in federal policy could have a profound impact on the ethanol industry.

The domestic market for ethanol is largely dictated by federal mandates for blending ethanol with gasoline. The RFS mandate level for 2011 of 12.6 billion gallons approximates current domestic production levels. Future demand will be largely dependent upon the economic incentives to blend based upon the relative value of gasoline versus ethanol, taking into consideration the blender’s credit and the RFS. Any significant increase in production capacity beyond the RFS level might have an adverse impact on ethanol prices. Additionally, the RFS mandate with respect to ethanol derived from grain could be reduced or waived entirely. A reduction or waiver of the RFS mandate could adversely affect the prices of ethanol and our future performance.

Federal law mandates the use of oxygenated gasoline. If these mandates are repealed, the market for domestic ethanol would be diminished significantly. Additionally, flexible-fuel vehicles receive preferential treatment in meeting corporate average fuel economy, or CAFE, standards. However, high blend ethanol fuels such as E85 result in lower fuel efficiencies. Absent the CAFE preferences, it may be unlikely that auto manufacturers would build flexible-fuel vehicles. Any change in these CAFE preferences could reduce the growth of E85 markets and result in lower ethanol prices.

Risks Related to Government Support and Subsidy

As previously stated above, VEETC is set to expire on December 31, 2011. The ongoing debate in budget discussions in the U.S. Congress provides uncertainty as to whether or not VEETC will be extended. If this tax credit is not renewed before the end of 2011, it likely would have a negative impact on the price of ethanol and the demand for ethanol in the market due to reduced discretionary blending of ethanol. Discretionary blending occurs when gasoline blenders use ethanol to reduce the cost of blended gasoline. However, due to the RFS, demand for ethanol may continue to mirror the RFS requirement, even if the VEETC is not renewed past 2011. If the RFS is reduced or eliminated, the decrease in demand for ethanol related to the elimination of VEETC may be more substantial.

Market Risks

We are exposed to market risk from changes in commodity prices and, to the extent we have working capital available, we engage in hedging transactions which involve risks that could harm our business. Exposure to commodity price risk results from our dependence on corn and, to the extent our steam source is not available, natural gas in the ethanol production process. We seek to minimize the risks from fluctuations in the price of corn through the use of hedging instruments when working capital is available. The effectiveness of our hedging strategies is dependent upon the cost of commodities and our ability to sell sufficient products to use all of the commodities for which we have futures contracts. There is no assurance that our hedging activities will successfully reduce the risk caused by price fluctuation which may leave us vulnerable to high prices. Alternatively, we may choose not to engage in hedging transactions in the future. As a result, our future results of operations and financial conditions may also be adversely affected during periods in which corn prices increase. We do not designate these contracts as hedges for accounting purposes.

Competition

We believe that the competition in the ethanol market will continue to increase in the near term due to the refitting of plants, reopening of idled plants, and the competitive dynamics of the fuel industry. Consolidation and recapitalization continue to occur within the ethanol industry; and companies are now emerging with more liquidity and less debt. We believe the increased capacity, and current competitive dynamics of the fuels market; we believe, will help ethanol prices remain steady to slightly higher in the near term.

Summary of Critical Accounting Policies and Estimates

Note 2 to our financial statements contains a summary of our significant accounting policies, many of which require the use of estimates and assumptions. Accounting estimates are an integral part of the preparation of financial statements and are based upon management’s current judgment. We used our knowledge and experience about past events and certain future assumptions to make estimates and judgments involving matters that are inherently uncertain and that affect the carrying value of our assets and liabilities. We believe that of our significant accounting policies, the following are noteworthy because changes in these estimates or assumptions could materially affect our financial position and results of operations:

Revenue Recognition

We sell ethanol and related products pursuant to marketing agreements. Revenues are recognized when the marketing company has taken title to the product, prices are fixed or determinable and collectability is reasonably assured. Our products are generally shipped FOB loading point. Our ethanol sales are handled through our ethanol agreement with Bunge. Syrup, distillers grains and solubles, and modified wet distillers grains with solubles are sold through our agreement with Bunge, which sets the price based on the market price to third parties. Marketing fees and commissions due to the marketers are paid separately from the settlement for the sale of the ethanol products and co-products and are included as a component of cost of goods sold. Shipping and handling costs incurred by us for the sale of ethanol and co-products are included in cost of goods sold.

Incentive Compensation Plan

We established an equity incentive compensation plan under which employees may be awarded equity appreciation units and equity participation units. Costs of the plan are amortized over the vesting period set for each award. The units outstanding at this time vest three years from the grant date. The liability under the plan is recorded at fair market value on the balance sheet based on the market price of our equity units as of September 30, 2010.

Investment in Commodities Contracts, Derivative Instruments and Hedging Activities

When we have sufficient working capital available, we enter into derivative contracts to hedge our exposure to price risk related to forecasted corn needs and forward corn purchase contracts. We use cash, futures and options contracts to hedge changes to the commodity prices of corn and ethanol. The Company adopted new disclosure requirements requiring entities to provide greater transparency in interim and annual financial statements about how and why the entity uses derivative instruments, how the instruments and related hedged items are accounted for, and how the instruments and related hedged items affect the financial position, results of operations, and cash flows of the entity. We are exposed to certain risks related to ongoing business operations. The primary risks that we manage by using forward or derivative instruments are price risk on anticipated purchases of corn and sales of ethanol.

We are subject to market risk with respect to the price and availability of corn, the principal raw material used to produce ethanol and ethanol by-products. In general, rising corn prices result in lower profit margins and, therefore, represent unfavorable market conditions. This is especially true when market conditions do not allow us to pass along increased corn costs to customers. The availability and price of corn is subject to wide fluctuations due to unpredictable factors such as weather conditions, farmer planting decisions, governmental policies with respect to agriculture and international trade and global demand and supply.

We enter into short-term cash, options and futures contracts as a means of securing corn for the ethanol plant and managing exposure to changes in commodity prices. In addition, from time to time, we enter into derivative contracts to hedge the exposure to price risk as it relates to ethanol sales. We maintain a risk management strategy that uses derivative instruments to minimize significant, unanticipated earnings fluctuations caused by market fluctuations. Our specific goal is to protect the Company from large moves in commodity costs. All derivatives will be designated as non-hedge derivatives and the contracts will be accounted for as mark to market. Although the contracts will be effective economic hedges of specified risks, they are not designated as and accounted for as hedging instruments.

As part of our trading activity, we use futures and option contracts offered through regulated commodity exchanges to reduce risk and risk of loss in the market value of inventories. To reduce that risk, we generally take positions using cash and futures contracts and options. Accordingly, any realized or unrealized gain or loss related to these derivative instruments was recorded in the statement of operations as a component of non-operating income (expense) until the plant was operational. Once operational, the gains or losses are included in revenue if the contracts relate to ethanol and cost of goods sold if the contracts relate to corn.

Inventory

Inventory is stated at the lower of cost or market value using the first-in, first-out method. Market value is based on current replacement values, except that it does not exceed net realizable values and it is not less than the net realizable values reduced by an allowance for normal profit margin.

Property and Equipment

Property and equipment is stated at cost. Construction in progress is comprised of costs related to constructing the plant and is depreciated upon completion of the plant. Depreciation is computed using the straight-line method over the following estimated useful lives:

Buildings 40 Years

Process Equipment 10-20 Years

Office Equipment 3-7 Years

Maintenance and repairs are charged to expense as incurred; major improvements are capitalized.

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows from operations are less than the carrying value of the asset group. An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset. In accordance with our policies, management has evaluated the plants for possible impairment based on projected future cash flows from operations. Management has determined that its projected future cash flows from operations exceed the carrying value of the plant and that no impairment existed at March 31, 2011.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements.

Item 3. Qualitative and Quantitative Disclosure About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item.

Items 4. Controls and Procedures.

Our management, including our President (our principal executive officer), Brian T. Cahill, along with our Controller (our principal financial officer), Karen Kroymann, have reviewed and evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 15d-15 under the under the Securities Exchange Act of 1934), as of March 31, 2011. Based upon this review and evaluation, these officers believe that our disclosure controls and procedures are presently effective in ensuring that material information related to us is recorded, processed, summarized and reported for the quarterly period ended March 31, 2011.

Our management has evaluated, with the participation of our President, any change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that occurred during the period covered by this Quarterly Report on Form 10-Q. There was no change in our internal control over financial reporting identified in that evaluation that occurred during the fiscal period covered by this Quarterly Report on Form 10-Q 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.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide information under this item.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Removed and Reserved).

Item 5. Other Information.

None.

Item 6. Exhibits.

2	Omitted – Inapplicable.

3(i)	Articles of Organization, as filed with the Iowa Secretary of State on March 28, 2005 (incorporated by reference to Exhibit 3(i) of Registration Statement on Form 10 filed by the Company on January 28, 2008).

4(i)	Third Amended and Restated Operating Agreement dated July 17, 2009 (incorporated by reference to Exhibit 3.1 of Form 8-K filed by the Company on August 21, 2009).

10.1	Agreement dated October 13, 2006 with Bunge North America, Inc. (incorporated by reference to Exhibit 10.1 of Registration Statement on Form 10/A filed by the Company on October 23, 2008). Portions of the Agreement have been omitted pursuant to a request for confidential treatment.

10.2

Executed Steam Service Contract dated January 22, 2007 with MidAmerican Energy Company (incorporated by reference to Exhibit 10.4 of Registration Statement on Form 10/A filed by the Company on October 23, 2008). Portions of the Contract have been omitted pursuant to a request for confidential treatment.

10.3	Assignment of Steam Service Contract dated May 2, 2007 in favor of AgStar Financial Services, PCA (incorporated by reference to Exhibit 10.5 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.4	Electric Service Contract dated December 15, 2006 with MidAmerican Energy Company (incorporated by reference to Exhibit 10.6 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.5	Assignment of Electric Service Contract dated May 2, 2007 in favor of AgStar Financial Services, PCA (incorporated by reference to Exhibit 10.7 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.6

Distillers Grain Purchase Agreement dated October 13, 2006 with Bunge North America, Inc. (incorporated by reference to Exhibit 10.8 of Registration Statement on Form 10 filed by the Company on January 28, 2008). Portions of the Agreement have been omitted pursuant to a request for confidential treatment.

10.7	Assignment of Distillers Grain Purchase Agreement dated May 2, 2007 in favor of AgStar Financial Services, PCA (incorporated by reference to Exhibit 10.9 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.8	Grain Feedstock Agency Agreement dated October 13, 2006 with AGRI-Bunge, LLC (incorporated by reference to Exhibit 10.10 of Registration Statement on Form 10 filed by the Company on October 23, 2008). Portions of the Agreement have been omitted pursuant to a request for confidential treatment.

10.9	Assignment of Grain Feedstock Agency Agreement dated May 2, 2007 with AgStar Financial Services, PCA (incorporated by reference to Exhibit 10.11 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.10

License Agreement dated September 25, 2006 between Southwest Iowa Renewable Energy, LLC and ICM, Inc. (incorporated by reference to Exhibit 10.10 to Form S-1/A filed by the Company on February 24, 2011).

10.11

Security Agreement dated May 2, 2007 with AgStar Financial Services, PCA (incorporated by reference to Exhibit 10.15 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.12

Mortgage, Security Agreement Assignment of Rents and Leases and Fixture Filing dated May 2, 2007 in favor of AgStar Financial Services, PCA (incorporated by reference to Exhibit 10.16 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.13

Environmental Indemnity Agreement dated May 2, 2007 with AgStar Financial Services, PCA (incorporated by reference to Exhibit 10.17 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.14

Convertible Note dated May 2, 2007 in favor of Monumental Life Insurance Company (incorporated by reference to Exhibit 10.18 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.15

Convertible Note dated May 2, 2007 in favor of Metlife Bank, N.A. (incorporated by reference to Exhibit 10.19 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.16

Convertible Note dated May 2, 2007 in favor of Cooperative Centrale Raiffeisen-Boerenleenbank, B.A. (incorporated by reference to Exhibit 10.20 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.17

Convertible Note dated May 2, 2007 in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.21 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.18

Convertible Note dated May 2, 2007 in favor of First National Bank of Omaha (incorporated by reference to Exhibit 10.22 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.19

Revolving Line of Credit Note in favor of Cooperative Centrale Raiffeisen-Boerenleenbank, B.A. (incorporated by reference to Exhibit 10.23 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.20

Revolving Line of Credit Note in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.24 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.21

Revolving Line of Credit Note in favor of First National Bank of Omaha (incorporated by reference to Exhibit 10.25 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.22

Term Revolving Note in favor of Metlife Bank, N.A. (incorporated by reference to Exhibit 10.26 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.23

Term Revolving Note in favor of Cooperative Centrale Raiffeisen-Boerenleenbank, B.A. (incorporated by reference to Exhibit 10.27 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.24

Term Revolving Note in favor of Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.28 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.25

Term Revolving Note in favor of First National Bank of Omaha (incorporated by reference to Exhibit 10.29 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.26

Lien Subordination Agreement dated May 2, 2007 among Southwest Iowa Renewable Energy, LLC, AgStar Financial Services, PCA and Iowa Department of Economic Development (incorporated by reference to Exhibit 10.30 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.27

Value Added Agricultural Product Marketing Development Grant Agreement dated November 3, 2006 with the United States of America (incorporated by reference to Exhibit 10.31 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.28

Fee Letter dated May 2, 2007 with AgStar Financial Services, PCA (incorporated by reference to Exhibit 10.33 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.29

Master Contract dated November 21, 2006 with Iowa Department of Economic Development (incorporated by reference to Exhibit 10.35 of Registration Statement on Form 10 filed by the Company on January 28, 2008).

10.30

Amended and Restated Disbursing Agreement dated March 7, 2008 with AgStar Financial Services, PCA (incorporated by reference to Exhibit 10.39 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.31

Allonge to Revolving Line of Credit Note in favor of First National Bank of Omaha dated March 7, 2008 (incorporated by reference to Exhibit 10.43 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.32

Allonge to Revolving Line of Credit Note in favor of Cooperative Centrale Raiffeisen-Boerenleenbank, B.A., dated March 7, 2008 (incorporated by reference to Exhibit 10.44 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.33

Allonge to Revolving Line of Credit Note in favor of Metropolitan Life Insurance Company, dated March 7, 2008 (incorporated by reference to Exhibit 10.45 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.34

Allonge to Convertible Note in favor of First National Bank of Omaha, dated March 7, 2008 (incorporated by reference to Exhibit 10.46 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.35

Allonge to Convertible Note in favor of Metlife Bank, N.A., dated March 7, 2008 (incorporated by reference to Exhibit 10.47 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.36

Allonge to Convertible Note in favor of Metropolitan Life Insurance Company, dated March 7, 2008 (incorporated by reference to Exhibit 10.48 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.37

Allonge to Convertible Note in favor of Cooperative Centrale Raiffeisen-Boerenleenbank, B.A., dated March 7, 2008 (incorporated by reference to Exhibit 10.49 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.38

Allonge to Term Revolving Note in favor of First National Bank of Omaha, dated March 7, 2008 (incorporated by reference to Exhibit 10.50 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.39

Allonge to Term Revolving Note in favor of Cooperative Centrale Raiffeisen-Boerenleenbank, B.A., dated March 7, 2008 (incorporated by reference to Exhibit 10.51 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.40

Allonge to Term Revolving Note in favor of Metlife Bank, N.A., dated March 7, 2008 (incorporated by reference to Exhibit 10.52 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.41

Allonge to Term Revolving Note in favor of Metropolitan Life Insurance Company, dated March 7, 2008 (incorporated by reference to Exhibit 10.53 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.42

Allonge to Convertible Note in favor of Monumental Life Insurance Company, dated March 7, 2008 (incorporated by reference to Exhibit 10.54 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.43

Term Revolving Note in favor of Amarillo National Bank (incorporated by reference to Exhibit 10.55 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.44

Allonge to Term Revolving Note in favor of Amarillo National Bank, dated March 7, 2008 (incorporated by reference to Exhibit 10.56 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.45

Convertible Note dated May 2, 2007, in favor of Amarillo National Bank (incorporated by reference to Exhibit 10.57 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.46

Allonge to Convertible Note in favor of Amarillo National Bank, dated March 7, 2008 (incorporated by reference to Exhibit 10.58 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.47

Revolving Line of Credit Note in favor of Amarillo National Bank (incorporated by reference to Exhibit 10.59 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.48

Allonge to Revolving Line of Credit Note in favor of Amarillo National Bank, dated March 7, 2008 (incorporated by reference to Exhibit 10.60 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.50

Support Services Agreement dated January 30, 2008 with Bunge North America, Inc. (incorporated by reference to Exhibit 10.63 of Amendment No. 1 to Registration Statement on Form 10 filed by the Company on March 21, 2008).

10.51

Amendment No. 01 dated March 9, 2007 with Iowa Department of Economic Development (incorporated by reference to Exhibit 10.2 of Form 8-K filed by the Company on June 10, 2006).

10.52

Amendment No. 02 dated May 30, 2008 with Iowa Department of Economic Development (incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Company on June 10, 2006).

10.53

Industrial Track Agreement dated as of June 18, 2008 with CBEC Railway, Inc. (incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Company on June 25, 2006).

10.54

Base Agreement dated August 27, 2008 between Southwest Iowa Renewable Energy, LLC and Cornerstone Energy, LLC (incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Company on September 2, 2008).

10.55

Lease Agreement dated December 15, 2008 with Bunge North America, Inc. (incorporated by reference to Exhibit 10.2 of Form 8-K filed by the Company on December 22, 2008).

10.56

Ethanol Purchase Agreement dated December 15, 2008 with Bunge North America, Inc. Portions of the Agreement have been omitted pursuant to a request for confidential treatment (incorporated by reference to Exhibit 10.3 of Form 8-K filed by the Company on December 22, 2008).

10.57

Risk Management Services Agreement dated December 15, 2008 with Bunge North America, Inc. (incorporated by reference to Exhibit 10.4 of Form 8-K filed by the Company on December 22, 2008).

10.58

Grain Feedstock Supply Agreement dated December 15, 2008 with AGRI-Bunge, LLC. Portions of the Agreement have been omitted pursuant to a request for confidential treatment (incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Company on December 22, 2008).

10.59

Subordinated Revolving Credit Note made by Southwest Iowa Renewable Energy, LLC in favor of Bunge N.A. Holdings, Inc. dated effective August 26, 2009 (incorporated by reference to Exhibit 10.2 of Form 8-K filed by the Company on September 2, 2009).

10.60

Employment Agreement dated August 27, 2009 between Southwest Iowa Renewable Energy, LLC and Mr. Brian T. Cahill (incorporated by reference to Exhibit 10.3 of Form 8-K filed by the Company on September 2, 2009).

10.61

Amendment to Steam Service Contract by and between Southwest Iowa Renewable Energy, LLC and MidAmerican Energy Company dated effective October 3, 2008. Portions of the Agreement have been omitted pursuant to a request for confidential treatment. (1)

10.62

Second Amendment to Steam Service Contract by and between Southwest Iowa Renewable Energy, LLC and MidAmerican Energy Company dated effective January 1, 2009. Portions of the Agreement have been omitted pursuant to a request for confidential treatment. (1)

10.63

Third Amendment to Steam Service Contract by and between Southwest Iowa Renewable Energy, LLC and MidAmerican Energy Company dated effective January 1, 2009. Portions of the Agreement have been omitted pursuant to a request for confidential treatment. (1)

10.64

Fourth Amendment to Steam Service Contract by and between Southwest Iowa Renewable Energy, LLC and MidAmerican Energy Company dated effective December 1, 2009. Portions of the Agreement have been omitted pursuant to a request for confidential treatment. (1)

10.65

Separation Agreement and Release of All Claims Agreement between Southwest Iowa Renewable Energy, LLC and Cindy Patterson (incorporated by reference to Exhibit 10.2 of Form 8-K filed by the Company on July 2, 2009).

10.66

Amended and Restated Railcar Sublease Agreement dated March 25, 2009 with Bunge North America, Inc. (incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Company on August 14, 2009). Portions of the Agreement have been omitted pursuant to a request for confidential treatment.

10.67

Amended and Restated Credit Agreement by and among Southwest Iowa Renewable Energy, LLC and AgStar Financial Services, PCA, the Banks named therein, dated as of March 31, 2010 (incorporated by reference to Exhibit 99.1 of Form 8-K filed by the Company on April 5, 2010).

10.68

Loan Satisfaction Agreement, by and among Southwest Iowa Renewable Energy, LLC, ICM, Inc., and Commerce Bank, N.A., dated June 17, 2010 (incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Company on June 23, 2010).

10.69

Negotiable Subordinated Term Loan Note issued by Southwest Iowa Renewable Energy, LLC in favor of ICM, Inc., dated June 17, 2010 (incorporated by reference to Exhibit 10.2 of Form 8-K filed by the Company on June 23, 2010).

10.70

ICM, Inc. Agreement – Equity Matters, by and between ICM, Inc. and Southwest Iowa Renewable Energy, LLC, dated as of June 17, 2010 (incorporated by reference to Exhibit 10.3 of Form 8-K filed by the Company on June 23, 2010).

10.71

Subordinated Term Loan Note issued by Southwest Iowa Renewable Energy, LLC in favor of Bunge N.A. Holdings, Inc., dated June 17, 2010 (incorporated by reference to Exhibit 10.4 of Form 8-K filed by the Company on June 23, 2010).

10.72

Bunge Agreement - Equity Matters by and between Southwest Iowa Renewable Energy, LLC and Bunge N.A. Holdings, Inc. date effective August 26, 2009. (1)

10.73

First Amendment to Bunge Agreement – Equity Matters, by and between Bunge N.A. Holdings, Inc. and Southwest Iowa Renewable Energy, LLC, dated as of June 17, 2010 (incorporated by reference to Exhibit 10.5 of Form 8-K filed by the Company on June 23, 2010).

10.74

Subordination Agreement, by and among Bunge N.A. Holdings, Inc., ICM, Inc., and AgStar Financial Services, PCA and acknowledged by Southwest Iowa Renewable Energy, LLC, dated as of June 17, 2010 (incorporated by reference to Exhibit 10.6 of Form 8-K filed by the Company on June 23, 2010).

10.75

Intercreditor Agreement, by and between Bunge N.A. Holdings, Inc. and ICM, Inc. and acknowledged by Southwest Iowa Renewable Energy, LLC, dated as of June 17, 2010. (incorporated by reference to Exhibit 10.7 of Form 8-K filed by the Company on June 23, 2010).

10.76

Southwest Iowa Renewable Energy Equity Incentive Plan (incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Company on July 6, 2010).

10.77

Joint Defense Agreement between ICM, Inc. and Southwest Iowa Renewable Energy, LLC dated July 13, 2010 (incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Company on July 16, 2010).

10.78

Tricanter Purchase and Installation Agreement by and between ICM, Inc. and Southwest Iowa Renewable Energy, LLC dated August 25, 2010 (incorporated by reference to Exhibit 10.1 of Form 8-K/A filed by the Company on January 12, 2011). Portions of the Agreement have been omitted pursuant to a request for confidential treatment.

10.79

Corn Oil Agency Agreement by and between ICM, Inc. and Southwest Iowa Renewable Energy, LLC effective as of November 12, 2010 (incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Company on November 30, 2010). Portions of the Agreement have been omitted pursuant to a request for confidential treatment.

10.80

Amendment to Amended and Restated Credit Agreement by and among Southwest Iowa Renewable Energy, LLC and AgStar Financial Services, PCA, the Banks named therein, effective as of March 31, 2011 (incorporated by reference to Exhibit 10.1 of Form 8-K filed by the Company on April 5, 2011).

10.81

First Amendment to Ethanol Purchase Agreement by and between Bunge North America, Inc. and Southwest Iowa Renewable Energy, LLC dated March 31, 2011 (incorporated by reference to Exhibit 10.2 of Form 8-K filed by the Company on April 5, 2011). Portions of this agreement have been omitted pursuant to a request for confidential treatment.

11	Omitted – Inapplicable.

12	Omitted – Inapplicable.

13	Omitted – Inapplicable.

14	Omitted – Inapplicable.

16	Omitted – Inapplicable.

18	Omitted – Inapplicable.

21	Omitted – Inapplicable.

22	Omitted – Inapplicable.

31.1	Rule 13a-14(a)/15d-14(a) Certification (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) executed by the Principal Executive Officer.

31.2	Rule 13a-14(a)/15d-14(a) Certification (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) executed by the Principal Financial Officer.

32.1	Rule 15d-14(b) Certifications (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) executed by the Principal Executive Officer.

32.2	Rule 15d-14(b) Certifications (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002) executed by the Principal Financial Officer.

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.

	SOUTHWEST IOWA RENEWABLE ENERGY, LLC

Date: May 9, 2011	/s/ Brian T. Cahill
	President and Chief Executive Officer

Date: May 9, 2011	/s/ Karen L. Kroymann
	Controller and Principal Financial Officer

SOUTHWEST IOWA RENEWABLE ENERGY, LLC

Condensed Statements of Cash Flows

Six Months Ended

March 31, 2011

Six Months Ended

March 31, 2010

(Unaudited)

(Unaudited)

Cash Flows from Operating Activities