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                                                                   Exhibit 10.23

                   MORTGAGE - COLLATERAL REAL ESTATE MORTGAGE;
                       SECURITY AGREEMENT, FIXTURE FILING
                             AND ASSIGNMENT OF RENTS


         This Mortgage, Security Agreement, Fixture Filing and Assignment of
Rents (the "Mortgage") is made as of the 31st day of December, 2002, by NORTHERN
LIGHTS ETHANOL, LLC, a South Dakota limited company (the "Mortgagor"), and U.S.
BANK NATIONAL Association (the "Lender").

         WHEREAS, Mortgagor earlier granted Lender a Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixture Financing Statement
evidencing a loan in the principal amount of Thirty One Million One Hundred
Thousand Dollars ($31,100,000.00), from Lender to Mortgagor, filed for record
with the Register of Deeds of Grant County, South Dakota, on September 14, 2001,
at 1:25 P.M. and recorded in Book 260 at Page 178 (the "Prior Mortgage"); and

         WHEREAS, Lender has consented to make Five Million Dollars
($5,000,000.00) of such debt into a revolving loan, and to further secure such
Five Million Dollar ($5,000,000.00) revolving obligation with this Mortgage,
which will supplement the Prior Mortgage and cross-collateralize such Five
Million Dollar ($5,000,000.00) obligation;

MORTGAGOR AGREES AS FOLLOWS:

SECTION 1.  CERTAIN TERMS; GRANTS MADE AND OBLIGATIONS SECURED.

         1.1 CERTAIN TERMS. The "Loan Agreement" shall mean that Loan Agreement
dated July 11, 2001, executed by Mortgagor and Lender. The "Note" means that
Promissory Note dated January 1, 2003, in the original principal amount of Five
Million Dollars ($5,000,000.00), which matures December 31, 2007. The Note
evidences a revolving loan from Lender to Mortgagor. The "Real Estate" shall
mean the real estate in Grant County, South Dakota, and legally described as
follows: See attached Exhibit A.

         The Real Estate and all property described in Section 1.2 are together
called the "Collateral." That Collateral which constitutes personal property is
sometimes called the "Personal Collateral." The Real Estate and tangible
Collateral are sometimes called the "Property." The term "Loan Documents" means
the Loan Agreement, the Note, and any other documents evidencing and/or securing
the loan evidenced thereby, as well as all documents defined as "Loan Documents"
in the Loan Agreement. Capitalized terms defined or referenced in the Loan
Agreement shall have those meanings when used herein. The term "Lender" shall
extend to and include the owner and holder, including any pledgee, of the
Secured Obligations (defined in Section 1.4), now or hereafter and whether or
not named as Lender. The term "Accessibility Regulation" means a law relating to
accessibility of facilities or properties for disabled, handicapped and/or
physically challenged persons, including, without limitation, the Americans With
Disabilities Act of 1991, as amended. The term "Prior Mortgage" shall have the
meaning set forth in the "WHEREAS" paragraph above. Whenever the context so
requires, the masculine gender includes the feminine and/or neuter, and the
singular number includes the plural.

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         1.2 GRANTS. Mortgagor hereby grants to Lender a mortgage on all right,
title and interest of Mortgagor, now owned or hereafter acquired, in and to the
Real Estate, together with a mortgage on, Uniform Commercial Code ("UCC")
security interest in, and an assignment of all existing and future tangible and
intangible property owned, used or held in connection with the Real Estate,
including without limitation the following:

                  (a) Buildings and other structures, improvements, vaults,
sidewalks, approaches, driveways, and parking lots, sewer and water lines,
connections, pumps and lift stations, fixtures, fences, trees and other
landscaping (together the "Improvements");

                  (b) Equipment (as defined by the UCC), including without
limitation: all structural and building materials; windows, screens, doors,
floor and wall coverings, furniture and furnishings; machinery, material and
apparatus for heating, cooling, ventilating, air conditioning, gas and
electrical service, plumbing, lighting, lifting, conveyance, communications,
fire protection, storage, disposal, cleaning, repair and maintenance (together
the "Equipment");

                  (c) Rights of way (including streets and alleys), air space,
railroad spurs and tracks, easements, means of access, reversionary rights,
privileges, tenements, hereditaments, appurtenances;

                  (d) Water, riparian, oil, gas and mineral rights and all
damages, royalties and revenues related thereto:

                  (e) Leases, rents and other income, royalties, issues and
profits;

                  (f) All permits, approvals, consents, clearances, licenses and
rights obtained from, or by filing with, any government agency; and all leasing,
service, engineering, consulting, design, construction, purchase and other
contracts of any nature;

                  (g) Payment and performance bonds, warranties, guaranties and
choses in action for the same;

                  (h) Reserves, escrows, deposits, rebates, refunds and advance
payments;

                  (i) Claims and causes of action for damage to, loss or
diminution of value or taking of the Real Estate, Improvements, Equipment or any
part thereof;

                  (j) Abstracts of title, unearned insurance premiums, policies
of and proceeds from insurance;

                  (k) Accounts, Documents, Instruments, Chattel Paper, General
Intangibles, Money, Deposit Accounts (all as defined by the UCC), and all books
and records of, acquired by or maintained for Mortgagor in connection with the
ownership, lease, use, maintenance, design, construction, management,
improvement or repair of any of the foregoing; and

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                  (1) Attachments, accessions, substitutions, replacements and
all proceeds from the sale, lease, rental, exchange, collection, casualty,
obstruction, impairment, conversion, condemnation or other disposition of the
Real Estate, Improvements, Equipment or any of the other Collateral described
above or acquired with cash proceeds.

         1.3 ASSIGNMENT OF RENTS. Mortgagor hereby absolutely and
unconditionally assigns and transfers to Lender all the leases, income, rents,
issues and profits of all or any part of the Property, both before and after
foreclosure and during the period of redemption. Mortgagor irrevocably grants
Lender a power of attorney, deemed coupled with an interest, but without
fiduciary duty, and grants Lender the authority, to demand, receive and enforce
payment, to give receipts, releases, and satisfactions, and to sue, in the name
of either Mortgagor or Lender, for all such income, rents, issues and profits
and to apply the same to the Secured Obligations, after reimbursement of
expenses incurred by Lender. So long, however, as Mortgagor is not in Default,
Mortgagor shall have the right to collect and retain all income, rents, issues,
profits and proceeds subject to the Loan Agreement. Neither this assignment nor
the exercise of any rights or remedies hereunder shall be deemed to make Lender
a "mortgagee-in-possession" or otherwise responsible or liable in any manner
with respect to the Real Estate or Improvements or their use, occupancy,
enjoyment or operation. Neither foreclosure nor any sale thereunder shall cause
a satisfaction or release of the assignment to Lender under this paragraph.

         1.4 OBLIGATIONS SECURED; CROSS COLLATERALIZATION WITH PRIOR MORTGAGE.
This Mortgage is given for the purpose of securing in such order or priority as
Lender may determine the following obligations (the "Secured Obligations"): (a)
Mortgagor's obligation under the Note, and all extensions, renewals and
replacements thereof, and all interest, fees, charges and advances thereon; (b)
Performance of all Mortgagor's covenants, obligations and liabilities described
in this Mortgage or the Loan Agreement or other Loan Documents (the terms of
which are hereby incorporated into this Mortgage), except as to such documents
which expressly state not to be secured hereby; (c) Damages, fees and expenses
(including attorneys' fees) incurred by Lender with respect to the Collateral or
its protection, enforcement of Mortgagor's obligations or exercise of Lender's
rights and remedies under this Mortgage, the Loan Agreement or under applicable
law. Mortgagor acknowledges that the Prior Mortgage also secures the
above-described Secured Obligations.

         1.5 RECORDATION. Lender may file this Mortgage or a copy with any
filing officer as a financing statement or fixture filing under the UCC. A copy
of the signed original of this Mortgage shall be deemed signed by Mortgagor for
those purposes. Mortgagor shall pay all expenses of filing and of any record
search for financing statements.

         1.6 COLLATERAL REAL ESTATE MORTGAGE. THE PARTIES AGREE THAT THIS
MORTGAGE CONSTITUTES A COLLATERAL REAL ESTATE MORTGAGE PURSUANT TO SDCL 44-8-26.
THE PARTIES FURTHER AGREE THAT THE "FACE AMOUNT" OF THIS MORTGAGE FOR PURPOSES
OF SDCL 44-8-26 IS FIVE MILLION DOLLARS ($5,000,000.00). The parties further
agree that Lender may from time-to-time unilaterally prepare and execute
addendums hereto to extend the effectiveness of the lien of this Mortgage or
increase the face amount stated above. The effective period of this Mortgage is
five (5) years from and after the date it is filed for record, subject to
renewals hereof as provided above and under law.

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SECTION 2. WARRANTIES AND COVENANTS OF MORTGAGOR.

         Mortgagor warrants, covenants and agrees for the benefit of Lender and
its successors and assigns as follows:

         2. USE AND COMPLIANCE WITH LAWS.

                  (a) The Real Estate will be used in conducting Mortgagor's
ethanol and ethanol bi-products producing business; will not be used for the
sale, consumption, production, storage or disposal of hazardous or toxic waste,
materials or substances (except as provided for by the Loan Documents); and
cannot, is not and will not be claimed as a homestead by any person, such right
being expressly waived.

                  (b) Mortgagor shall keep and maintain the Real Estate and the
waters free of any waste on, under or discharged from the Property in compliance
with, and shall not cause or permit the Real Estate to be in violation of, any
federal, state or local laws, ordinances, regulations or orders now or hereafter
in effect, including those relating to environmental conditions, air, water and
land pollution, storage or disposition of hazardous materials or toxic
substances, zoning, and land use planning. Mortgagor shall adopt, implement,
keep in force and follow all appropriate monitoring, testing and management
plans and procedures for handling, using, storing, transporting and disposing of
all hazardous or toxic substances, including asbestos-containing materials.

                  (c) Mortgagor shall: obtain, maintain and not surrender, to
the extent available under or required by applicable law, all permits, opinions,
approvals, licenses, certificates and statements relating to the use, status or
condition of the Collateral; and not suffer, approve or consent to any rezoning
classification, modification or restriction applicable to the Real Estate,
without the prior written consent of Mortgage.

                  (d) Mortgagor shall comply with all Accessibility Regulations
which are applicable to the Property. In the event that (i) Lender reasonably
believes that a material violation of an Accessibility Regulation may have
occurred in connection with the Property; or (ii) Lender receives notice from
Mortgagor or otherwise has knowledge that an event described in this Section
2.1(d) and pertaining to Accessibility Regulations has occurred; then, in any
such event, Mortgagor shall at its cost obtain and deliver to Lender an
Accessibility Regulation compliance report relating to the Property or shall
have any previously delivered materials updated and/or amplified, by a qualified
consultant selected by Mortgagor and acceptable to Lender; if Mortgagor fails to
do so within forty-five (45) days after such request is made, Lender shall have
the right to do so, in which event Mortgagor shall reimburse Lender for the cost
incurred by Lender in doing so within ten (10) days following demand therefor by
Lender.

         2.2 CONDITION AND OPERATIONS OF COLLATERAL. Mortgagor agrees (a) to
keep the Property in good condition and repair, (b) not to commit or permit any
waste or deterioration of the Property, (c) not to commit or permit any removal,
demolition or substantial alteration of the Property except for alterations
required by any governmental authority having jurisdiction over the Collateral
and except for replacement of Equipment under Section 2.3 of this Mortgage, (d)
to complete in good and workmanlike manner any construction or restoration which
may be

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performed on the Property, (e) to promptly restore any portion of the Property
which may be damaged or destroyed, (f) not to permit any mechanic's or
materialman's or artisan's liens against the Property, (g) to cause the
Collateral to be developed and continuously operated in good workmanlike manner
and in accordance with generally accepted trade practices or applicable
operating agreements, (h) to provide, improve, grade, surface and thereafter
maintain, clean, repair and adequately light all parking areas within the Real
Estate, together with any sidewalks, aisles, streets, driveways and curb cuts
and sufficient paved areas for ingress, egress and right-of-way to and from the
adjacent public thoroughfares necessary or desirable for the use thereof and to
maintain all landscaping thereon, and (i) not to abandon or vacate the Real
Estate.

         2.3 TITLE; TRANSFERS AND REPLACEMENTS.

                  (a) Mortgagor represents and warrants to Lender that (i)
Mortgagor is the record owner of the Collateral free of all liens and
encumbrances, except as provided otherwise in the Loan Agreement, and except
liens for taxes not delinquent or which are being contested in good faith and
the interest of tenants under the leases; and (ii) Mortgagor will defend such
title to the Collateral against the claims of all persons.

                  (b) Except as permitted in (c) below, should Mortgagor sell,
convey, transfer or dispose of the Collateral or any part thereof, in any way,
or agree to do so, without the prior written consent of Lender, or if any of the
foregoing is accomplished by operation of law, then Lender shall have the right,
at its option, upon 30 days notice to Mortgagor, to declare the Secured
Obligations immediately due and payable. This subparagraph shall have the effect
of a "due-on-sale clause" as provided in SDCL 44-8-27, but shall not restrict
the rights of Lender upon occurrence of a similar default with respect to
Collateral governed by the UCC.

                  (c) Mortgagor shall have the right to replace, in the ordinary
course of business, any worn, damaged or obsolete Equipment without the prior
consent of the Lender, provided that the value of the Collateral as security is
not reduced or impaired by such substitution or replacement and Lender shall, as
of the time such replacement is effected, have a valid first security interest
or lien in the replacement. Otherwise any transfers of Equipment shall be
subject to the lien of this Mortgage.

         2.4 INSURANCE. Mortgagor shall keep in place all insurance or otherwise
honor all terms concerning the form, risks covered, acquisition and maintenance
of insurance as required under the Prior Mortgage.

         2.5 PAYMENTS, PERFORMANCE AND INDEMNITY.

                  (a) Mortgagor shall pay or cause to be paid: (i) all Secured
Obligations according to their terms; (ii) all taxes, assessments and other
governmental or public charges affecting the Collateral and any accrued
interest, cost and/or penalty thereon; (iii) all charges for utilities or
services relating to the Property including, but not limited to, electricity,
gas, water and sewer; (iv) any taxes levied upon this Mortgage or any Secured
Obligations; and (v) all obligations secured by the lien(s) referenced in
Section 2.3(a)(i), strictly according to the terms thereof.

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                  (b) Mortgagor shall faithfully make all payments and perform
every obligation under any existing or future agreement or encumbrance or matter
of record affecting the Collateral, including, without limitation, leases,
declaration of covenants, easements, agreements relating to railroad trackage,
conditions and/or restrictions and other agreements which affect the Collateral
or may be beneficial to the Collateral.

                  (c) Mortgagor shall indemnify and defend Lender, regardless of
alleged fault, against all claims, causes of action, actions and proceedings by
third parties or government authorities against any of the Collateral or Lender,
arising directly or indirectly from Mortgagor's or any third party's use of the
Collateral or from Mortgagor's breach of any covenant in this Section 2, and all
resulting damages, fees, fines, penalties, costs and expenses (including
attorney fees). This indemnity is cumulative with any other indemnity given in
the Loan Agreement or other Loan Documents.

                  (d) In the event all or any portion of any Collateral is
taken, actually, constructively or inversely, by the power of condemnation or
eminent domain, all proceeds of any agreement, settlement or award shall be
first used to pay all Secured Obligations.

         2.6 NOTICES. Mortgagor shall give to Lender prompt written notice of,
and all available information concerning: (a) any intent or proceeding under
power of eminent domain as to any portion of the Property; (b) any damage to or
destruction of any Property exceeding $5,000 in loss; (c) commencement of any
governmental investigation or other action, suit or proceeding arising from any
condition, use or status of the Property or otherwise concerning the Property;
(d) any claim to any Collateral adverse to Mortgagor's title or Lender's lien;
(e) breach of any of Mortgagor's covenants in this Section 2.

         2.7 PROTECTIVE MEASURES. Should Mortgagor breach any covenant or fail
to make any payment or do any act required by this Mortgage or if the Collateral
or Mortgagor or Lender's interest therein be jeopardized in any way, then Lender
may (without obligation, without notice or demand and without releasing
Mortgagor); (a) cure, make or do the same in such manner and to such extent as
Lender may deem necessary; (b) appear in and defend any action or proceedings
purporting to affect the Collateral or the rights or powers of Lender; (c) pay,
purchase, contest or compromise any encumbrance, charge or lien which, in the
judgment of Lender, appears to be prior or superior hereto; or (d) in exercising
any such powers, pay necessary expenses, employ counsel and pay their reasonable
attorneys' fees. Mortgagor shall pay as Secured Obligations immediately and
without demand all sums so expected by Lender with interest from the date of
expenditure.

         2.8 CONTINUATION OF WARRANTIES. At all times before full, final and
irrevocable payment and performance of all Secured Obligations, Mortgagor shall
take, omit or refrain from all actions, give or withhold all consents and
approvals, and execute and file all instruments and documents as necessary or
advisable to assure the continuing accuracy of all warranties of Mortgagor made
in this Mortgage or any Loan Document as though each such warranty were made as
of each date after the date of this Mortgage.

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SECTION 3. DEFAULTS.

         3.1 EVENTS OF DEFAULT; CROSS DEFAULT. Mortgagor shall be in default
hereunder (an "Event of Default"), and Lender may exercise the rights and
remedies described in Section 4 below, if: (a) Mortgagor shall fail to make when
due any payment on any Secured Obligation; (b) Mortgagor shall fail to perform
and observe any of Mortgagor's covenants and obligations under this Mortgage, or
any warranty herein in any material respect is or becomes untrue in any material
respect; (c) there occurs any event of default under any other Loan Document.

         3.2 MARSHALLING. Mortgagor, for themselves and on behalf of all
persons, parties and entities which may claim under Mortgagor, hereby waives all
requirements of law relating to the marshalling of assets, if any, which would
be applicable in connection with the enforcement by Lender of its remedies for
an Event of Default hereunder, absent this waiver. Lender shall not be required
to sell or realize upon any portion of the Real Estate before selling or
realizing upon any other portion thereof.

SECTION 4. REMEDIES UPON DEFAULT.

         4.1 ACCELERATION. Upon any Event of Default, Lender may at its option
and without further notice, declare the entire unpaid principal of the Secured
Obligations and any amounts due under this Mortgage and all accrued interest
thereon immediately due and payable and the Lender may at its option institute
proceedings for the collection at law or in equity of all amounts due under the
Secured Obligations and this Mortgage.

         4.2 FORECLOSURE. Upon such notice, if any, or after such time period,
if any, required by the Act, Lender may immediately cause this Mortgage to be
foreclosed by action, or by advertisement, as provided by statute or rules of
practice relating thereto. This section 4.2 shall be deemed as authorizing and
constituting a power of sale as mentioned in such statutes or rules, or in any
amendments. Any notice of Event of Default, acceleration or the exercise of any
remedy shall be sufficient, without excluding other forms of notice, if stated
in any pleading or affidavit served on Mortgagor in any legal proceeding
commenced by or against Lender hereunder. Lender shall have the right to bid at
any foreclosure sale and to obtain a judgment for any deficiency.

         4.3 ABANDONMENT. In the event Mortgagor abandons the Property, the
period of Mortgagor's permitted redemption shall be reduced to the shortest
period allowed by law. For purposes of this subparagraph and any other portion
of this Mortgage, the Property shall be deemed abandoned by Mortgagor if
Mortgagor ceases to own or manage the Property (directly or through a manager)
for the permitted use AND, in addition one or more of the following conditions,
circumstances or events exists or occurs as of or after such cessation: (a)
Mortgagor fails to insure adequately the Property; (b) Mortgagor fails to pay
taxes and assessments; (c) Mortgagor fails to maintain the Property, to repair
material damage to the Property or to prevent waste or deterioration of the
Property; (d) Mortgagor fails to secure adequately any of the Property; or (e)
Mortgagor fails to assert rights to any portion of the Property or protect its
interest from asserted third party claims (including those of any governments or
government agencies); (f) Mortgagor leases or surrenders the entire Property to
one or more affiliated or unaffiliated third parties, except as permitted under

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the Loan Agreement, or (g) Mortgagor shall cease continuous operation of a
business upon the Real Estate.

         4.4 RECEIVER. Lender shall be entitled to have a receiver appointed
without proof of any grounds for appointment other than an Event of Default.
Such receiver is authorized to take possession and charge of the Collateral
during the pendency of foreclosure proceedings and during any period permitted
for redemption or stay of proceedings and to rent the same and to receive and
collect the rents, issues and profits thereof, under direction of the court. Any
amount so collected by the receiver shall be applied under direction of the
court to the costs and expenses of receivership, expenses of insurance on the
Collateral, expenses of management, repairs and maintenance, taxes, assessments
and to all Secured Obligations, judgments, deficiency amounts and/or
post-judgment or post-sale accrued interest.

         4.5 PROTECTION OF SECURITY. Lender, by receiver or otherwise, shall be
authorized to: (a) Make or take action in such manner and to such extent as
Lender may deem necessary to protect the Collateral or Lender's interest and to
enter upon and take possession of any Collateral for such purposes; (b)
Commence, appear in and/or defend any action or proceeding purporting to affect
the Collateral and/or any additional or other security, or the interests,
rights, powers and/or duties of Lender hereunder whether brought by or against
Mortgagor or Lender; (c) Pay, purchase, contest or compromise any claim, debt,
lien, charge or encumbrance which in the judgment of Lender may affect or appear
to affect the Collateral or Lender's interest or rights, powers and duties
hereunder.

         4.6 REAL AND PERSONAL PROPERTY. To the extent that the Collateral
includes both real and personal property, Lender may at its option proceed: (a)
as to all Collateral according to Lender's rights hereunder and applicable real
estate laws; or (b) as to any fixtures or any Personal Collateral, according to
the UCC and/or any separate security agreement describing property of the same
type or category as the Personal Collateral, provided, however, that the rights
of Lender to exercise remedies according to the UCC shall not be dependent upon
the existence of any such separate security agreement.

         4.7 FEES AND EXPENSES. Mortgagor shall pay all fees, costs and expenses
incurred by Lender (including attorneys' fees) (a) in connection with any action
or actions (including the cost of search or evidence of title), which may be
brought for the foreclosure of this Mortgage, and/or for possession of the
Collateral, and/or for the appointment of a receiver; or (b) directly or
indirectly as a result of any breach of Mortgagor's covenants, obligations,
warranties, or agreements hereunder, regardless of whether litigation is
commenced. Mortgagor's obligation for payment thereof shall be one of the
Secured Obligations and bear interest accordingly.

SECTION 5. PRESERVATION OF LENDER'S RIGHTS; SUBORDINATION.

         5.1 NONWAIVER; CUMULATIVE RIGHTS AND REMEDIES. By accepting any late,
partial or otherwise inadequate payment or performance, Lender does not waive
its rights either to require prompt and full payment or performance when due of
all unpaid sums or unperformed covenants or obligations or to declare, to
enforce or to continue enforcement of, an Event of Default as provided in this
Mortgage. No right or remedy of Lender is intended to be exclusive of any other
remedy herein provided by law, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity. If Lender at any time holds

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additional security or guaranty for any Secured Obligations, it may enforce and
realize upon the same, at its option, either before or during or after
proceedings for the enforcement of this Mortgage, and may apply proceeds,
however realized, to the Secured Obligations (in such order as Lender shall
determine) without affecting the status of or waiving any security, including
the Collateral, and without waiving any breach, default, right or power
hereunder or under any such other security or guaranty.

         5.2 MORTGAGOR'S DISCRETION. Without affecting the liability or
obligations of any person, including Mortgagor, for the performance of any
Secured Obligation, Lender may from time to time and without notice release any
person liable for payment of any obligations, extend the time of payment or
otherwise alter the terms of any obligations, accept additional security of any
kind, including security agreements, trust deeds or mortgages, or alter,
substitute or release any property securing any obligations.

         5.3 SUBROGATION. Lender shall be subrogated to the lien, although
released of record, of any and all encumbrances at any time paid by Lender.

SECTION 6. GENERAL PROVISIONS.

         6.1 ENTRY. Lender's agents, employees or workmen are authorized to
enter at any reasonable time upon any part of the Property for the purpose of
inspecting the same, and for the purpose of performing any of the acts permitted
by this Mortgage.

         6.2 BENEFIT AND BINDING EFFECT. Subject to restrictions on Mortgagor's
assignment or transfer elsewhere described in this Mortgage or the Loan
Agreement, this Mortgage applies to, inures to the benefit of, and binds
Mortgagor and Lender, their successors and assigns.

         6.3 NOTICES. All notices to be given with respect to this Agreement
shall be in writing. Each notice shall be sent by first class, certified or
registered mail, postage prepaid or return receipt requested, to the party to be
notified as follows:

                           U.S. Bank National Association
                           141 North Main Avenue
                           P.O. Box 5308
                           Sioux Falls, South Dakota 57117
                           Attention:  Carl Wynja

                           with a copy to:

                           Scott Perrenoud
                           CADWELL, SANFORD, DEIBERT & GARRY, LLP
                           P.O. Box 1157
                           Sioux Falls, South Dakota 57101

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                           If to Mortgagor:

                           Northern Lights Ethanol, LLC
                           P.O. Box 356
                           48416 144th Street
                           Big Stone City, SD 57216
                           Attention:  Chairman of the Board

         6.4 APPLICABLE LAW. This Mortgage shall be construed and enforced in
accordance with the laws of the State of South Dakota. Lender consents to the
jurisdiction and venue of the state and federal courts located for Grant County,
South Dakota. If any provision hereof should be held unenforceable or void, then
such provision shall be deemed separable from the remaining provisions and shall
in no way affect the validity of this Mortgage. The right to plead any and all
statutes of limitation as a defense to any Secured Obligation is hereby waived
to the full extent permitted by law.

         6.5 CONTROLLING DOCUMENT. This Mortgage shall be construed consistently
with the other Loan Documents; however, in the event of any conflict or
inconsistency between the terms and provisions contained in this Mortgage and
those contained in any other Loan Document, the terms and provisions of this
Mortgage shall control to the extent the terms hereof apply.

         IN WITNESS WHEREOF, Mortgagor has executed this Collateral Real Estate
Mortgage Security Agreement, Fixture Filing and Assignment of Rents as of the
day first written above.

                                      NORTHERN LIGHTS ETHANOL, LLC

                                      By: /s/ Delton Strasser
                                          ----------------------------
                                          Delton Strasser
                                          Its: Chairman of the Board

STATE OF SOUTH DAKOTA      )
                           : SS
COUNTY OF GRANT            )

         On this the 31st day of December, 2002, before me, the undersigned
officer, personally appeared Delton Strasser, who acknowledged himself to be the
Chairman of the Board of Northern Lights Ethanol, LLC, a South Dakota
corporation, and that he, as such officer being authorized so to do, executed
the foregoing instrument for the purposes therein contained by signing by
himself as such officer.

         IN WITNESS WHEREOF, I hereunto set my hand and official seal.


         (SEAL)                           /s/ Christine K. Thomson
                                      -----------------------------------
                                      Notary Public - South Dakota
                                      My commission expires: July 6, 2008

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                                    EXHIBIT A

                                LEGAL DESCRIPTION

         The Borrower holds a leasehold interest in the following described Land
under the terms and conditions of the Big Stone Power Plant Lease dated April
18, 2001:

         Parcel A in the Southwest Quarter (SW 1/4) of Section Twelve (12),
Township One Hundred Twenty-One (121) North, Range Forty-Seven (47) West of the
Fifth Principal Meridian, Grant County, South Dakota, according to the recorded
plat thereof.

         Parcel B in the Southeast Quarter (SE 1/4) of Section Eleven (11),
Township One Hundred Twenty-One (121) North, Range Forty-Seven (47) West of the
Fifth Principal Meridian, Grant County, South Dakota, according to the recorded
plat thereof.

         The Borrower holds an ingress and egress easement rights on certain
land and railroad spur lines identified in the Access and Rail Agreement dated
April 18, 2001, granted by Otter Tail Corporation, f/k/a Otter Tail Power
Company; Montana-Dakota Utilities Co., a division of MDU Resources Group, Inc.,
f/k/a Montana-Dakota Utilities Co.; Northwestern Public Service, a division of
NorthWestern Corporation, f/k/a Northwestern Public Service Company and Northern
Lights Ethanol, LLC:

         The Southeast Quarter (SE 1/4) of Section Eleven (11), Township One
Hundred Twenty-One North (121), Range Forth-Seven (47), West of the Fifth
Principal Meridian, Grant County, South Dakota;

         The Southwest Quarter (SW 1/4) of Section Twelve (12), Township One
Hundred Twenty-One North (121), Range Forty-Seven (47) West of the Fifth
Principal Meridian, Grant County, South Dakota;

         The Northeast Quarter (NE 1/4) and the Northwest Quarter (NW 1/4) of
Section Thirteen (13), Township One Hundred Twenty-One (121) North, Range
Forty-Seven (47) West of the Fifth Principal Meridian, Grant County, South
Dakota; and

         The Northwest Quarter (NW 1/4), the Northeast Quarter (NE 1/4) and that
portion of the Southeast Quarter (SE 1/4) lying North of the Burlington Northern
Sante Fe Main line Railroad Right of Way in Section Eighteen (18), Township One
Hundred Twenty-One (121) North, Range Forty-Six (46) West of the Fifth Principal
Meridian, Grant County, South Dakota.