Company: REX
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0000930413-25-001069
Chunk: 0

Company: REX AMERICAN RESOURCES Corp
Filing Date: 2025-03-28
Form: 10-K
Item: Item 1
Chunk 0
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Our business is not diversified.

Our financial results depend heavily on
our ability to operate our ethanol plants profitably. Our lack of diversification could have a material negative impact on our
results of operations, financial position and future cash flows should our ethanol plants operate unprofitably.

We may not be able to meet commitments
to produce and sell ethanol.

We may, at times, sell our products with
forward contracts. If we are unable to produce the products due to economic conditions, business interruption, or other factors,
we may incur additional costs or have to obtain commodities at unfavorable prices to meet our contractual commitments. This could
have a material adverse effect on our results of operations.

We may not be able to meet commitments
to purchase commodities.

We may, at times, purchase certain commodities
with forward contracts without a corresponding quantity of ethanol sold via forward contracts at known prices. Should ethanol and
by-product prices decline to levels that would lead to significant unprofitable results of operations, we may incur additional
costs and/or losses to meet our contractual commitments. This could have a material adverse effect on our results of operations.

Our revenue from the sale of distillers
grains depends upon its continued market acceptance as an animal feed.

Distillers grains is a by-product from
the fermentation of corn to produce ethanol. Antibiotics may be used during the fermentation process to control bacterial contamination;
therefore, antibiotics may be present in small quantities in distillers grains marketed as animal feed. The U. S. Food and Drug
Administration’s Center for Veterinary Medicine has expressed concern about potential animal and human health hazards from
the use of distillers grains as an animal feed due to the possibility of antibiotic residues. If the public became concerned about
the impact of distillers grains in the food supply or as an acceptable animal feed, the market for distillers grains could be negatively
impacted, which would

  15  

have a negative impact
on our results of operations. We may not be able to obtain a suitable replacement for antibiotics, should this be required, which
would also negatively impact the market for distillers grains.

An estimated 37% of distillers grains produced
in the United States were exported in 2024. The price of distillers grains has benefitted from the exports of the product. In recent
years, certain countries have refused to import U. S. distillers grains for a variety of reasons. If export shipments are rejected
or delayed