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

                                    ---------

                                    FORM 10-K
                                   (MARK ONE)
                [ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED ________________.

          [X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

       FOR THE TRANSITION PERIOD FROM JANUARY 1, 2001 TO DECEMBER 31, 2001

                          COMMISSION FILE NO. 333-71213

                         MINNESOTA CORN PROCESSORS, LLC
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                   COLORADO                          41-1928467
      (STATE OR OTHER JURISDICTION OF   (I.R.S. EMPLOYER IDENTIFICATION NO.)
       INCORPORATION OR ORGANIZATION)

                  901 NORTH HIGHWAY 59, MARSHALL, MN       56258-2744
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)    (ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (507) 537-2676

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

     Indicate by check mark whether the registrant (1) has 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 __X__ No _____

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

         The aggregate market value of Class A units held by non-affiliates of
the registrant was $136,618,940.00 (based on the average price units were sold
in the 30 day period preceding March 19, 2002).

         The number of the registrant's Class A voting units outstanding as of
March 19, 2002, was 136,618,940. The number of the registrant's Class B
nonvoting units outstanding as of March 19, 2002, was 58,622,340.

Documents Incorporated By Reference

None.

<PAGE>


                                     PART I


ITEM 1. BUSINESS

(a) GENERAL DEVELOPMENT OF BUSINESS

         MCP operates as an agricultural processing and marketing business that
operates corn wet-milling facilities in Minnesota and Nebraska. Formed in 1980,
MCP began wet-milling operations in Marshall, Minnesota in 1983.

         In March 1996, MCP acquired Liquid Sugars, Inc. ("LSI"), a sweetener
blending, storage and distribution operation with headquarters in Oakland,
California, which serves various customers located in the western United States
and southwestern Canada. On July 1, 2000, in connection with MCP's conversion
from a cooperative into a limited liability company, the assets of LSI were
integrated into MCP. The regional blending, storage and distribution terminals
of LSI are now referred to as "Bulk Terminals" of MCP. LSI still exists as a
corporation that has no assets.

         On July 1, 2000, Minnesota Corn Processors, Inc., a Minnesota
cooperative, converted to a Colorado limited liability company, named Minnesota
Corn Processors, LLC ("MCP") or ("the Company").

         In July of 2001, the Company formed a limited liability company known
as De-Icer USA, LLC, a Minnesota limited liability company ("De-Icer USA").
De-Icer USA is a single member limited liability company with its sole member
being the Company. De-Icer USA is a member of a joint venture known as Glacial
Technologies LLC, a Delaware limited liability company ("Glacial Technologies").
Glacial Technologies is a road de-icer company formed in May of 2001, which
markets, sells and distributes road de-icing materials.

         In August of 2001, the Company purchased 100% of the stock of FI
Mankato Energy, Inc., a Minnesota cooperative ("FI Mankato"). FI Mankato holds
stock in Minnesota Energy, Inc., a Minnesota cooperative that produces ethanol.

         MCP Canada Inc., formed in January 2001 sells sweeteners in Canada.

         In November 2001 the Company formed MCP Investment Company, LLC, a
Delaware limited liability company ("MCP Investment Company"). MCP Investment
Company invested in Arkion Life Sciences, LLC, a technology-based company
leading in the discovery, development and marketing of environmentally friendly,
natural or natural-identical bio-active compounds.

(b) FINANCIAL INFORMATION ABOUT SEGMENTS

         MCP operates in a one business segment, the processing of corn and
marketing of corn by-products.

(c) DESCRIPTION OF BUSINESS

         Based on total production capacity, MCP is one of the largest corn wet
millers in the United States. In addition, MCP is the second or third largest
producer of ethanol in the United States and a leading producer of high quality
corn sweetener products for the soft drink and food industries. MCP's main
product groups include corn sweeteners, corn starch, ethanol and feed
co-products. MCP supplies a broad range of customers in a variety of industries.
The Company does not consider its business as a whole to be seasonal to any
significant degree.

THE CORN SWEETENER AND ETHANOL MARKETS

HIGH FRUCTOSE CORN SYRUP AND CONVENTIONAL CORN SYRUP

         Since the invention of starch-based sweeteners in the early 1800s,
researchers have tried to develop a starch-based sweetener that is as sweet as
cane or beet sugar (sucrose). After years of research, the desired result was
achieved through the process of rearranging glucose molecules into the chemical
isomer fructose, known as "glucose isomerization." As a result of the
development of glucose isomerization, the corn refining industry now produces a
sweetener -- high fructose corn syrup -- that has a sweetness level equivalent
to that of sucrose. Princiapal markets for HFCS include soft drink manufacturers
and the baking industry.

         Corn sweeteners are more consistent in quality than sucrose and are
expected to continue to replace sucrose due to the savings in labor cost
generated by the ease of use and adaptability of corn sweeteners in today's
highly automated baking and soft drink industries.

ETHANOL

         Ethanol is used primarily as a high quality octane enhancer and an
oxygenate capable of reducing air pollution and improving automobile
performance. As a fuel additive, the demand for ethanol is derived from the
overall demand for gasoline as well as the competition of ethanol versus
competing oxygenate products and technologies.

         MCP currently benefits from economic incentives to produce ethanol.
Ethanol blenders can claim a 5.4 cents per gallon exemption from the federal
gasoline excise tax. This federal ethanol tax subsidy, which was set to expire
in 2000, has been extended through December 31, 2007. The exemption will
gradually drop to 5.1 cents in 2005.

CORN PROCUREMENT

         MCP purchases corn from its members and in the marketplace. To reduce
the risk of price fluctuations in the corn market, MCP has established a policy
of hedging corn to cover firm price and volume sales contracts for its finished
products. MCP may also hedge a portion of its anticipated production
requirements. The instruments used are principally readily marketable exchange
traded futures and options contracts. The changes in market value of the
contracts have a high correlation to the price changes of the base commodity.
See Item 7A of this Report on Form 10-K.


                                       1
<PAGE>


WET MILLING OPERATIONS

         Corn wet-milling increases the nutritional and economic value of the
corn by separating it into homogeneous fractions. Although the wet-milling
process was originally designed to produce relatively pure starch for industrial
food uses, the process now results in the optimum use and maximum value for each
fraction of the corn kernel.

         A typical bushel of corn weighs 56 pounds and contains approximately
72,800 kernels. Most of the weight is the starch, oil, protein and fiber, with
some natural moisture. Each bushel of corn can yield:

     *   31.5 pounds of starch or
     *   34.0 pounds of sweetener or
     *   2.5 gallons of fuel ethanol and
     *   12.1 pounds of gluten feed and
     *   2.7 pounds of gluten meal and
     *   1.8 pounds of corn oil.

         A kernel of corn sliced lengthwise from top to bottom will disclose the
following primary components:

         HULL. The hull is the fine skin on the outside of the kernel that
protects it from deterioration. It is water resistant and is undesirable to
insects and micro-organisms. Hulls go mostly into corn gluten feed for
livestock, poultry feeds and pet foods.

         STARCH. Starch is found at the top, middle and on the sides of the
kernel. This is the most abundant constituent and is used in making starches and
sweeteners.

         GLUTEN. Gluten is the dark portion inside the kernel, although some
gluten is mixed with the starch granules. Gluten contains the majority of the
protein found in a kernel of corn. Separated and purified, gluten becomes corn
gluten meal which is used in animal feeds.

         GERM. Germ is the seed-like pod at the bottom of the kernel in the
center and is the source of corn oil. The germ is important for food, drug and
industrial uses. About 50% of the germ is corn oil. After removal of the oil,
germ becomes a component of corn gluten meal or corn gluten feed, and small
amounts of oil are included in the various feed products.

         WATER. Approximately 15% of the kernel is water. It becomes part of the
steepwater in which the refining is initiated. Steepwater is rich in vitamins,
especially the B complex vitamins, and is used in animal feed. Corn steepwater
is also used in the manufacture of antibiotics.

         PROCESSING. Corn is run through a process that generates the germ,
gluten feed, gluten meal, and finally starch. The starch is then converted into
ethanol or dry starch or further processed into sweeteners or other starch-based
products.

         RECEIVING. MCP receives its corn by truck. Before acceptance, the corn
is tested for quality. MCP has the right to refuse any shipment of corn if it
does not meet its quality standards. Corn is inspected and cleaned twice to
remove dust, chaff, and foreign materials before steeping. Each MCP facility has
on-site storage capacity for approximately 1 million bushels of corn.

         STEEPING. Each steep, a stainless steel vat, holds corn for 30 to 40
hours soaking in 125 degree Fahrenheit water, increasing the corn's moisture
levels from 15% to 45% and causing the corn to more than double in size. The
addition of 0.2% sulfur dioxide to the water prevents excessive bacterial growth
in the warm environment. As the corn swells and softens, the mild acidity of the
steepwater begins to loosen the gluten bonds within the corn and release the
starch. After steeping, the corn is coarsely ground to break the germ loose from
other components. Steepwater is condensed to capture nutrients in the water for
use in animal feeds. The ground corn, in a water slurry, flows to the germ
separators.

         GERM SEPARATION. Cyclone separators spin the low density corn germ out
of the slurry. The germs, containing about 85% of corn's oil, are pumped onto
screens and washed repeatedly to remove any starch left in the mixture. MCP
sells its germ on a contract basis to oil processors, who then extract the oil
from the germ. The oil is then refined and filtered into finished corn oil. The
germ residue is saved as another useful component of animal feeds.


                                       2
<PAGE>


         GRINDING AND SCREENING. The corn and water slurry undergoes a second,
more thorough grinding in an impact or attrition-impact mill to release the
starch and gluten from the fiber in the kernel. The suspension of starch, gluten
and fiber flows over fixed concave screens that catch fiber but allow starch and
gluten to pass through. The fiber is collected, slurried, and screened again to
reclaim any residual starch or protein, then piped to the feed house as a major
ingredient of animal feeds. The starch-gluten suspension, called mill starch, is
piped to the starch separators.

         STARCH SEPARATION. Gluten has a lower density than mill starch. By
passing mill starch through a centrifuge, the gluten is readily spun out for use
in animal feeds. The starch, with just four to five percent protein remaining,
is diluted, washed 8 to 14 times in hydro clones to remove the last trace of
protein and produce high quality starch, typically more than 99.5% pure. Some of
the starch is dried and marketed as unmodified corn starch and some is slightly
modified, but most is converted into corn sweeteners and ethanol.

         STARCH CONVERSION. Starch, suspended in water, is liquefied in the
presence of acid and/or enzymes that convert the starch to a low-dextrose
solution. Treatment with another enzyme continues the conversion process.
Throughout the process, refiners can halt acid or enzyme actions at key points
to produce the right profile of sugars like dextrose and maltose to meet
different needs. In some sweeteners the conversion of starch to sugars is halted
at an early stage to produce low to medium sweetness. In others, the conversion
is allowed to proceed until the sugar is nearly all dextrose. The sweetener
product is refined in filters, centrifuges and ion-exchange columns, and excess
water is evaporated. Corn sweeteners are sold directly in the form of heavy corn
syrup or high fructose corn syrup.

         FERMENTATION. In yet another application to corn refining, enzymes
modify cornstarch to produce feedstock suitable for traditional fermentation
methods. The result of the fermentation is ethanol, which corn refiners distill
to remove excess water and sell for a variety of uses. Carbon dioxide, a
by-product of fermentation, also may be sold to beverage manufacturers as the
"fizz" in soft drinks.

PRODUCTS

         MCP's main product groups include corn sweeteners, ethanol, corn
starches and feed co-products. Information about each of the product groups is
provided below. For the fiscal period ended December 31, 2001, the approximate
percentage of MCP's total sales for each product group was: corn sweeteners -
36%; ethanol - 30%; corn starches - 5%; feed co-products - 18%; grain, purchased
products and other - 11%. These numbers are based on sales revenues.

CORN SWEETENERS

         HIGH FRUCTOSE CORN SYRUP. MCP produces two types of high fructose
sweeteners: 42 and 55 High Fructose Corn Syrup. Both types share advantages --
stability, high osmotic pressure, and crystallization control -- but each offers
special qualities to food and beverage manufacturers and consumers. 42 High
Fructose Corn Syrup is popular in canned fruits, condiments and other processed
foods that need mild sweetness that won't mask natural flavors. 55 High Fructose
Corn Syrup has earned a commanding role in soft drinks, ice cream and frozen
desserts.

         SYRUPS. Corn syrup is used in a variety of ways in food products. The
most common use for corn syrup is as a sweetener for food products. However,
corn syrups are adaptable to many uses and therefore have other less well known
advantages. Corn syrups can depress the freezing point of frozen products to
prevent crystal formation in ice cream and other frozen desserts. Because of its
effect on viscosity, corn syrup is added to salad dressings and condiments to
ensure the product pours at manageable rates. In lunch meat and hot-dogs, corn
syrups provide the suspension to keep other ingredients evenly mixed, and, like
other corn products, the basic syrups can improve textures and enhance colors
without masking natural flavors, as in canned fruits and vegetables. MCP
manufactures a number of corn syrups that offer a broad range of
functionalities.


ETHANOL

         Ethanol has several major applications, including as an octane enhancer
in fuels; as an oxygenated fuel additive for the purpose of reducing ozone and
carbon monoxide vehicle emissions; and as a non-petroleum-based gasoline
substitute. Approximately 95% of all ethanol is used in its primary form for
blending with unleaded gasoline and other fuel products. The implementation of
the Federal Clean Air Act has made ethanol fuels the most important domestic
renewable fuel, allowing the country to meet its environmental goals and reduce
imports of petroleum based fuels. Ethanol used as a fuel oxygenate provides one
of the easiest, lowest cost means to control carbon monoxide in problem areas.


                                       3
<PAGE>


STARCHES

         Starch is one of nature's important renewable resources and a mainstay
of our food and industrial economy. Starches have a wide variety of uses. On
average, each ton of paper produced in the United States uses 28 pounds of corn
starch. Corn starches, and their cousins, dextrins (a roasted starch), are used
in hundreds of adhesive applications. Special types of starches are used in oil
exploration as part of the "drilling mud" which cools down superheated oil
drilling bits. Starches are used as flocculating agents, anti-caking agents,
mold-release agents, dusting powder and thickening agents. Literally thousands
of supermarket staples are produced using both regular and specially modified
starches. Many of today's instant and ready-to-eat foods are produced using
starches which enable them to maintain the proper textural characteristics
during freezing, thawing and heating. Starches are converted to sugar by
breweries and used as the feedstock in beer production. Other starches are
important ingredients in instant pie and pudding fillings which require little
or no cooking compared to traditional formulations. The most promising new
market for corn starches is as a raw material for the production of industrial
chemicals and plastics which are today made from petroleum feedstocks. MCP
manufactures and sells unmodified and slightly modified corn starches, with the
majority of sales going into the corrugated, paper, brewing and food industries.

FEED CO-PRODUCTS

         MCP produces three major feed products: gluten meal, gluten feed and
condensed fermented corn extractives (steepwater). Corn gluten meal supplies
proteins, minerals, and energy in poultry feeds, while pet food processors value
it for its high digestibility and low residue. Gluten feed is a source of
digestable fiber, protein and minerals for ruminate animals. Steepwater is a
liquid protein supplement for cattle and is also used as a binder in feed
pellets.

GERM

         MCP also produces germ which is sold primarily for further processing
into corn oil. It is also sold for feed usage.

DE-ICER PRODUCT

         MCP currently markets de-icer for de-icing roadways. One of the de-icer
products manufactured by MCP is Caliber(TM).



PRODUCT QUALITY

         MCP believes that its ability to produce high quality products is a key
competitive advantage over other industry participants. MCP's quality systems
insure the integrity and safety of all our products. Consistent "superior"
ratings by the American Institute of Baking ("AIB"), as well as customers have
acknowledging MCP's superior quality through presentation of several quality
awards are tangible examples of this.

SALES AND DISTRIBUTION

         Effective as of December 31, 2000, MCP and Corn Products International,
Inc., formed a joint marketing company known as CornProductsMCP Sweeteners LLC
("CPMCP"). MCP and Corn Products International, Inc. sell their total United
States supply of high fructose corn syrup (HFCS), glucose corn syrup and certain
other liquid and dry products to CPMCP for marketing and distribution into the
United States food and beverage markets. MCP and Corn Products International,
Inc., each own 50% of CPMCP.

         Other than the products sold through CPMCP, MCP's products are sold
directly by a staff of sales personnel located regionally across the United
States. MCP also employs third-party resellers, primarily in the eastern and
midwestern portions of the United States. MCP owns and operates an extensive
distribution network which is located primarily west of the Mississippi River,
providing MCP with cost and service advantages in this strategic geographic
region. MCP's combined sales and distribution network allows it to effectively
distribute its products to most areas of the United States by either rail or
truck.

         MCP supplies a broad range of customers throughout the United States.
CPMCP, considered a customer, accounts for over 10% of MCP's total sweetener net
sales for the fiscal period ended December 31, 2001.


                                       4
<PAGE>


         The majority of MCP's corn sweetener and starch sales are made on an
annual basis under contracts fixed as to price and volume. MCP sells its germ
and steepwater on a contract basis. Gluten meal is sold on both a contract basis
and on the spot market. Feed product prices typically reflect the general price
of other comparable feedstuffs, such as soybean meal, soybean oil, other edible
oils and similar products. Feed demand is primarily driven by the domestic
population of animals being raised for slaughter and by export demand.

         The realized sales price of ethanol is driven by gasoline demand,
overall oxygenate program requirements, and the price of oxygenate alternatives
such as Methyl Tertiary Butyl Ether ("MTBE"), a petroleum-based fuel oxygenate
substitutable for ethanol. The majority of MCP's ethanol sales are made on a
spot basis, with most other sales comprising business contracted for sale during
non-attainment periods, which is approximately September through February. MCP's
ability to produce ethanol provides an important mitigant against the
seasonality inherent in the high fructose corn syrup industry. Since soft drinks
are an important user of high fructose corn syrup, its production peaks in the
spring and early summer months in anticipation of the peak in soft drink demand.
On the other hand, ethanol demand peaks in the winter, when many cities
institute their oxygenated fuel programs mandated by the Federal Clean Air Act.

COMPETITION

         MCP faces intense competition from other corn processors, including
Archer Daniels Midland, Cargill, Incorporated, and A.E. Staley Manufacturing.
Most of MCP's products compete with virtually identical products and derivatives
manufactured by other companies. Many of these competitors are substantially
larger and have greater financial resources than MCP. Competition is generally
based on price, product quality and customer service.

         Several of MCP's products also compete with products made from raw
materials other than corn. High fructose corn syrup competes with cane and beet
sugar products. Ethanol competes with MTBE and other oxygenate alternatives.
Corn gluten meal competes with soybean meal. Fluctuations in prices of these
substitute products may affect the prices of and profits derived from MCP's
products.

GOVERNMENT REGULATION AND ENVIRONMENTAL MATTERS

         As a producer of food items for human consumption and items for use in
the pharmaceutical industry, MCP is subject to various federal, state and local
laws relating to the operation of its processing facilities, product quality,
purity and labeling. The failure to comply with one or more regulatory
requirements can result in a variety of sanctions, including monetary fines.

         The operations of MCP also are subject to various federal, state and
local laws and regulations with respect to environmental matters, including air
and water quality and underground fuel storage tanks. MCP believes it is
currently in substantial compliance with environmental laws and regulations.
Protection of the environment requires MCP to incur expenditures for equipment
or processes. MCP is involved at various times in environmental inquiries or
proceedings. If MCP were found to have violated federal, state or local
environmental regulations, MCP could incur liability for cleanup costs, damage
claims from third parties and civil or criminal penalties that could materially
adversely affect its business. See Item 3 below.

PRODUCTION FACILITIES

         MCP owns two processing facilities. The facility in Marshall, Minnesota
has the capacity to grind approximately 56 million bushels of corn per year and
is a major supplier of corn syrup. The facility in Columbus, Nebraska has the
capacity to grind approximately 70 million bushels of corn per year and is a
major supplier of 55 High Fructose Corn Syrup. Each facility also produces
starch, 42 High Fructose Corn Syrup and ethanol.

         MCP has indoor rail car and truck loading capabilities at both plants
which minimize the negative effects of harsh weather and help to maintain strict
product quality standards. MCP leases in excess of 2,000 rail cars for terms of
up to 15 years. These rail cars are sub-leased to CPMCP.

EMPLOYEES

         At March 11, 2002, the total number of employees for MCP was 913. There
were 123 in the Marshall Corporate Office, 258 in the Marshall Plant, 290 in the
Columbus Plant, 20 in the elevators at Burr, Dovray and Holland combined and 154
in the Bulk Terminal locations, including the Oakland office. There are
currently three collective bargaining agreements in place in the Bulk Terminal
Division that cover a total of 34 employees and one union agreement in
negotiations. The Company also leases 39 employees to CPMCP.


                                       5
<PAGE>


ITEM 2. PROPERTIES

         MCP's principal headquarters are located in Marshall, Minnesota,
situated on approximately 40 acres of land owned by MCP. In addition, MCP owns
and operates two corn wet milling facilities located in Marshall, Minnesota on
approximately 105 acres and Columbus, Nebraska on approximately 800 acres.

         MCP also owns 17 regional blending, storage and distribution stations
("Bulk Terminals"), of which nine are owned and eight are leased. These stations
are located in California, Oregon, Washington, Utah, Arizona, Texas, Missouri,
Louisiana, New Jersey, Colorado, Idaho, Pennsylvania, Calgary, Alberta, and
Winnipeg, Manitoba in Canada.

         MCP also owns three grain elevator facilities used to supply corn to
the Marshall, Minnesota facility. The elevators are located in Dovray, Burr and
Holland, Minnesota.

         MCP's management believes the properties and facilities of MCP are
adequate to support MCP's continuous business operations.

ITEM 3. LEGAL PROCEEDINGS

ENVIRONMENTAL MATTERS

         MCP received a Notice of Violation ("NOV") from U.S. EPA Region VII
dated October 29, 1999, concerning operations at the Columbus, Nebraska
facility. The NOV alleged that MCP was in violation of five environmental laws.
The alleged violations relate to the maintenance of ethanol storage tanks, the
failure to obtain necessary permits for the construction and operation of a
starch dryer, violation of permit conditions regarding in-coming truck traffic,
and the failure to perform "increment consumption" analysis in connection with
its 1994 air permit application. MCP has responded to the alleged violations and
has specifically denied the allegations relating to the failure to obtain the
air permits required for the starch dryer and the failure to perform "increment
consumption" analysis. MCP has also offered substantial mitigating evidence with
respect to the other charges. On March 1, 2001, MCP received an Administrative
Compliance Order and Complaint and Notice of Opportunity of Hearing from the
EPA. The Administrative Compliance Order requires MCP to submit a modeling
protocol and conduct modeling to correct an alleged Prevention of Significant
Deterioration ("PSD") violation that stems from an incorrect baseline for
certain pollutants contained in modeling submitted to support MCP's 1994 PSD
permit Application to the Nebraska Department of Environmental Quality. The
Complaint and Notice of Opportunity of Hearing assesses a fine of $264,000 for
violations cited in the NOV. After negotiations, EPA amended the Complaint on
Jaunary 3, 2002 and again on February 14, 2002 and assessed a proposed penalty
of $137,500. The Company filed an answer to the Complaint and entered into
negotiations with EPA, leading to final settlement that obligates MCP to pay a
mitigated civil penalty of $70,264. This final settlement was executed by the
parties and was entered on February 26, 2002.

OTHER MATTERS

         We have litigation arising from the normal course of business. In our
opinion, this litigation will not materially affect our consolidated financial
position or our results of operations.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No meeting of security holders was held during the quarter ended
December 31, 2001.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

                  *Transition Period
                    April 1, 2000 -       Fiscal Year Ended
                   December 31, 2000      December 31, 2001
                   -----------------      -----------------
                   High        Low        High        Low
                   ----        ---        ----        ---
1st Qtr.           $  --      $  --       $1.40      $ .75
2nd Qtr.           $1.67      $1.05       $1.00      $ .75
3rd Qtr.           $1.43      $ .95       $1.25      $ .80
4th Qtr.           $1.25      $ .75       $1.32      $ .90

* Numbers are based on a calendar quarter and are reflective of a 3-quarter
year.

         These numbers are based on the high and low selling price for each
quarter. The units are not traded on a public market.

NUMBER OF UNIT HOLDERS

         MCP has 5,406 Class A Unit Holders and 1 Class B Unit Holder as of
March 19, 2002.


                                       6
<PAGE>


DISTRIBUTIONS

         Unit holders are entitled to receive distributions of cash as may be
declared by the board of directors. Distributions of cash are made to unit
holders in proportion to the number of units owned. The holders of Class A units
and Class B units are entitled to equivalent per unit distributions. The board
of directors has the discretion to make distributions to holders of special
financial interests in the aggregate amount of the stated amount of such
interests. MCP may distribute its net income to members in the form of a cash
distribution. Currently, MCP is required to withhold a portion of its annual
earnings to meet loan covenant obligations.

         The following table constitutes distributions paid to unit holders on
given dates.
                 Payment Date           Amount Per Unit
                 ------------           ---------------
                 May 26, 1999               $.0250  (1)
                 May 31, 2000               $.0525  (1)
                 September 7, 2000          $.0275  (2)
                 April 6, 2001              $.0200  (2)
                 March 15, 2002             $.1025  (2)

     (1)  Denotes value-added payments that were made by Minnesota Corn
          Processors, Inc., a Minnesota cooperative.
     (2)  Denotes distributions made by Minnesota Corn Processors, LLC, a
          Colorado limited liability company.


                                       7
<PAGE>


ITEM 6. SELECTED FINANCIAL DATA

         The following table sets forth selected financial data of MCP. This
information has been derived from MCP's consolidated financial statements, which
have been audited by Clifton Gunderson LLP, independent auditors.

         Certain amounts within the March 31, 1998, 1999, and 2000 financial
statements have been reclassified to conform to the presentation of the December
31, 2001 financial statements. The reclassifications had no effect on net income
(loss).

         You should read the following financial data in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," contained in Item 7 of this Report Form 10-K as well as the
consolidated financial statements and related notes that MCP included in item 8
of this Form 10-K.

<TABLE>
<CAPTION>
                                                                    Nine Month
                                                                   Period Ended     Year Ended
                                       Year Ended March 31,        December 31,    December 31,
                                    1998       1999        2000       2000 (1)         2001
                                    ----       ----        ----       ----             ----
<S>                             <C>         <C>         <C>         <C>               <C>
(In Millions)

STATEMENT OF OPERATIONS DATA:
    Net revenues                $    552    $    585    $    570    $    443          $  620
    Cost of product sold             530         542         513         403             567
    Gross profits (loss)              22          43          57          40              53
    Selling, general and
      administrative expenses         30          50          25          20              26
    Operating income (loss)           (8)         23          32          20              27
    Interest expense                  32          23          22          16              19
    Equitable interest in Joint
         Venture Income                                                                   14
    Other income (expense)            (5)          6           1           3              --
    Cum. Effect Acctg. Change                                              3              --
    Provision for Income Taxes                                                             1
    Net income (expense)             (45)          6          11          10              21
    Outstanding units of equity
      participation at year end      195.7       195.6       195.6       195.6           195.2

BALANCE SHEET DATA:
    Working capital (deficit)   $     43    $     65    $     71    $     78          $   61
    Total assets                     650         619         608         601             597
    Long-term debt                   295         291         271         257             238
    Member equity                    287         289         291         297             308
OTHER DATA:
    EBITDA (2)                  $     30    $     73    $     79    $     61          $   88
    Cash flow from (for)
      operations                      (3)         35          46          36              62
    Investing                        (13)        (16)        (19)        (19)            (42)
    Financing                          9         (12)        (25)        (24)            (22)
    Capital expenditures              13          16          19          20              32
</TABLE>

         (1) Due to the conversion from a cooperative to a limited liability
company, MCP changed its fiscal year end to December 31 as of December 31, 2000.
The nine months ended December 31, 2000 represent three months of operations
(April 1, 2000 - June 30, 2000) as a cooperative and six months (July 1, 2000
through December 31, 2000) of operations of the limited liability company.

         (2) EBITDA represents earnings (loss) before interest, income taxes,
depreciation and amortization. It is presented to enhance an understanding of
our operating results and ability to service debt and is not intended to
represent cash flow or net earnings under Generally Accepted Accounting
Principles. Our use of EBITDA may not be comparable to similarly titled measures
used by other companies.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

         MCP operates as an agricultural processing and marketing business that
operates corn wet milling facilities in Minnesota and Nebraska. Formed in 1980,
MCP began wet milling operations in Marshall, Minnesota in 1983.

         On July 1, 2000, Minnesota Corn Processors, Inc., a Minnesota
cooperative, converted to a Colorado limited liability company named Minnesota
Corn Processors, LLC.

         The December 31, 2001 financial statements are for the first full year
of operations after the conversion from a Cooperative to a Limited Liability
Company. The financial statements as of December 31, 2000 are for the nine-month
period of April 1, 2000 through December 31, 2000. They include three months of
Cooperative activity and six months of Limited Liability Company activity. MCP's
fiscal year end changed from March 31 to December 31 as a result of the July 1,
2000 conversion to an LLC.


                                       8
<PAGE>


RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2001 COMPARED TO NINE MONTHS ENDED DECEMBER 31, 2000.

         NET SALES. MCP's net sales for the year ended December 31, 2001 were
$620.4 million, compared to net sales of $443.4 million for the nine-month
period ended December 31, 2000, or a difference of $177.0 million. Comparing a
full year of sales revenue to a nine-month period of sales revenue accounts for
the majority of this difference. This is the first year of marketing the
Company's sweeteners through Corn ProductsMCP Sweeteners, LLC (CPMCP). Sweetener
volumes, when compared to an annualized basis for December 31, 2000 were up
slightly, while sweetener prices remained relatively unchanged. The agreed upon
transfer prices between CPMCP and its parents are based on the prior year's
(Calendar year 2000) net selling prices; therefore there was very little price
difference from year to year. MCP's share of any profits earned above these
transfer prices as a result of sales and distribution to the final customer is
included in the Equitable Interest in Joint Venture Income line of the
Consolidated Statements of Operations. Ethanol revenues increased from $118.7
million in 2000 to $180.6 million in 2001 as a result of a moderate increase in
the net selling price per gallon as well as an increase in the number of gallons
sold. The majority of the increase in gallons sold is the result of additional
volumes moving through the Company's ethanol marketing agreements. Co-product
revenues increased from $77.5 million in 2000 to $112.3 million in 2001
primarily due to increases in the net selling price of corn germ, which followed
the price improvement in the corn oil market.

         COST OF GOODS SOLD. Cost of goods sold was $567.3 million for the year
ended December 31, 2001 compared to $403.3 million for the nine-month period
ended December 31, 2000, or a difference of $164.0 million. The primary reason
for this difference is the comparison of a full year of operations to nine
months. On an annualized basis, MCP's costs were up this year as compared to
last year. Corn cost on a per bushel basis, as well as an increase in the number
of bushel ground led to an increase in corn expense from year to year. On an
annualized basis, the Company showed some increases in natural gas, electricity,
labor and related expenses, and purchases of grains and other products for
re-sale. A one-time sale of sweetener inventory to CPMPC to establish a working
inventory for our sweetener marketing company added approximately $12.0 million
dollars to the Company's cost of goods sold for the year. The revenues
offsetting these costs are included in Net Sales. Other production expenses
remained relatively stable.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and
administrative expenses of $26.5 million for the year ended December 31, 2001
compares to $19.6 million for the nine-month period ended December 31, 2000, or
a difference of $6.9 million. On an annualized basis, this difference is
minimal. The transfer of approximately $3.7 million dollars of S, G & A related
expenses to CPMCP, where appropriate, offset increases in wages, benefits and
related payroll costs, as well as various other administrative expenses.

         NET OPERATING INCOME. Net operating income for the year ended December
31, 2001 increased $6.1 million, compared to the nine-month period ended
December 31, 2000. This is the result of the increase in net sales revenues of
$177.0 million, offset by the increase of $164.0 million in cost of goods sold,
and the increase of $6.9 million in selling, general and administrative
expenses.

         OTHER INCOME/EXPENSE. Other expense for the year ended December 31,
2001 was $4.3 million, compared to $12.9 million for the nine-month period ended
December 31, 2000, or a decrease of $8.6 million. Interest expense is up $2.8
million over the nine-month period, but on an annualized basis, is actually down
approximately $2.5 million, as the Company continues to pay down its long-term
debt. Interest and other income is down $1.6 million when comparing December 31,
2001 to December 30, 2000. In the nine-month period ended December 31, 2000 the
Company recorded a one-time reversal of a long-term bad debt reserve in the
amount of $1.5 million. The change in the gain (loss) on disposal of property
was an increase in expense of $1.2 million. During the nine-month period ended
December 31, 2000, the company recorded a one-time gain on the sale of a portion
of its Emeryville, California facility in the amount of $1.2 million. The
company's equitable interest in joint venture income for the current year ended
December 31, 2001 was $14.3 million. Included in this number is the Company's
share of income from CPMCP ($14.5 million) and loss from Arkion Life Sciences
LLC ($0.2 million). There was no income (loss) from either of these investments
during December 31, 2000.

         CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE. During the
nine-month period ended December 31, 2000, the initial adoption of FAS-133,
Accounting for Derivative Instruments and Hedging Activities, resulted in the
Company recording $2.9 million of income as a cumulative effect of a change in
an accounting principle. This amount is based on the fair value of the Company's
derivative financial instruments used to hedge co-products as of July 1, 2000.
There is no such change necessary or recorded for the year ended December 31,
2001.


                                       9
<PAGE>


         INCOME BEFORE MINORITY INTEREST. Income before minority interest for
the year ended December 31, 2001 was $21.3 million dollars compared to $10.1
million for the nine-month period ended December 30, 2000, an increase of $11.2
million. The increase in net operating income of $6.1 million; the decrease in
other expense of $8.6; the increase in provision for income taxes of $0.6
million; and the decrease of $2.9 million attributed to the accounting principle
change for last year, account for the $11.2 million increase in income before
minority interest.

         MINORITY INTEREST IN NET LOSS. The minority interest in net loss of
consolidated subsidiary was $0.1 million for the year ended December 31, 2001.
This is the portion of the loss attributed to the Company's partner in Glacial
Technologies LLC (GT). GT was formed during the current fiscal year, and
therefore had no transactions during the previous fiscal period.

         NET INCOME. Net income for the year ended December 31, 2001 was $21.4
million compared to $10.1 million for the nine-month period ended December 31,
2000. The $11.3 million dollar increase is the result of the increase in Income
before Minority Interest of $11.2 plus the Minority Interest in Net Loss of
Consolidated Subsidiary of $0.1 million.


LIQUIDITY AND CAPITAL RESOURCES

On December 31, 2001 the Company's total assets were $597.4 million, as compared
to $600.9 million at December 31, 2000. Current assets decreased by $13.2
million, with the majority of the decrease resulting from the reduction of
accounts receivable, inventory, and cash. Increased grain inventories at the
elevators were offset by decreases in finished goods and bulk terminal
inventories. The company purchased an additional grain elevator this past year
as well as expanded the storage capacity at its two other elevators. The Company
sold its entire corn sweetener and sugar inventories that were at its bulk
terminals to CPMCP in May 2001, which is the key reason that finished goods
inventories, are down for the year. Repair parts inventory also showed a $1.0
million decrease from December 31, 2000 to December 31, 2001. Investments and
Other Assets is up approximately $24.7, with the majority of the increase coming
from recording the Company's share of income (loss) from its joint ventures
utilizing the equity method of accounting, plus the initial costs of its
investments in CPMCP, Arkion Life Sciences LLC, and Minnesota Energy, Inc. Net
property and equipment decreased $15.0 million, primarily as a result of
recording depreciation expense in excess of new capital additions.

Cash flows for the year ended December 31, 2001 were used to fund operating
expenses, capital projects, distributions to the shareholders, and debt
payments. Net cash flows from operating activities were $61.6 million. The
Company's depreciation and amortization expense included in this figure is $47.1
million. Cash used for investing activities totaled $42.1 million, reflecting
normal capital expenditures for the Company, the issuance of a promissory note,
the asset purchase of Liquid Corn Inc.'s Minnesota assets, and several
investments made by the Company throughout the year. The $22.3 million of cash
used for financing activities was for the distribution payments to the
shareholders, as well as payments made toward the Company's long-term debt. A
$15.0 million prepayment was made against the long-term debt during this past
year in addition to the scheduled $3.6 million debt payment.

The Company's senior notes outstanding were $241.4 million at December 31, 2001
compared to $260.0 million at December 31, 2000. In addition to its senior
notes, the Company has a $50 million revolving line of credit facility on which
there was no outstanding balance at either year-end.

NINE MONTHS ENDED DECEMBER 31, 2000 COMPARED TO FISCAL YEAR ENDED MARCH 31,
2000.

         NET SALES. MCP's Net Sales for the nine-month period ended as of
December 31, 2000, were $443.4 million, as compared to Net Sales of $569.6
million for the year ended March 31, 2000, or a difference of $126.2 million.
Comparing nine months of Sales Revenue to a full year of Sales Revenue accounts
for the majority of this difference. On an annualized basis, Net Sales Revenues
would actually show a slight increase over the previous year. Sweetener volumes,
on an annualized basis, remained relatively flat; however, there was some
deterioration in net selling prices from a year ago. Co-Product Revenues were
down, primarily due to a decrease in the net selling price of corn germ. Ethanol
Revenues were up as a result of a significant increase in the net selling price
per gallon.

         COST OF GOODS SOLD. Costs of Goods Sold was $403.3 million for the
nine-month period ended December 31, 2000, compared to $512.9 million for the
year ended March 31, 2000, or a difference of $109.6 million. The significant
factor for this difference is comparing a full year of operations to nine
months. Corn Cost, on a per bushel basis, was up slightly. MCP's Energy Costs
showed a substantial increase, as a result of significantly higher natural gas
prices. Electricity Costs also showed some increase, while the Remaining
Production Expenses were relatively stable.


                                       10
<PAGE>


         SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, General and
Administrative Expenses of $19.6 million for the nine-months ended December 31,
2000 compares to $25.1 million for the fiscal year ended March 31, 2000, or a
difference of $5.5 million. On an annualized basis, this difference between the
two years is minimal. Increases in Wages and Related Costs and Professional
Expenses have been offset by a decrease in Bad Debt Expense.

         NET OPERATING INCOME. Net Operating Income for the nine-month period
ended December 31, 2000, decreased $11.1 million, compared to the fiscal year
ended March 31, 2000. This is a result of the decrease in Net Sales Revenues of
$126.2 million, the decrease of $109.6 million in Costs of Goods Sold and the
decrease of $5.5 million in Selling, General and Administrative Expenses.

         OTHER INCOME/EXPENSE. Other Expense for the nine-month period ended
December 31, 2000, was $12.9 million, compared to $20.3 million for the fiscal
year ended March 31, 2000, or a decrease of $7.4 million. The majority of the
difference is due to comparing a nine-month period to a full fiscal year,
especially with respect to the decrease in Interest Expense. On an annualized
basis, the expected change in Interest Expense would be minimal. The reversal of
a long-term reserve for bad debts accounts for approximately $1.5 million of the
overall decrease.

         CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE. The initial
adoption of FAS-133, Accounting for Derivative Instruments and Hedging
Activities, resulted in MCP recording $2.8 million of income as a Cumulative
Effect of a Change in an Accounting Principle. This amount is based on the fair
value of the Company's derivative financial instruments used to hedge
co-products, beginning as of July 1, 2000.

         INCOME BEFORE MINORITY INTEREST. Income before Minority Interest for
the year ended December 31, 2001 was $21.3 million dollars, compared to $10.1
million for the nine-month period ended December 30, 2000, an increase of $11.2
million. The increase in Net Operating Income of $6.1 million; the decrease in
Other Expense of $8.6; the increase in Provision for Income Taxes of $0.6
million; and the decrease of $2.9 million attributed to the Accounting Principle
Change for last year, account for the $11.2 million increase in Income Before
Minority Interest.

         MINORITY INTEREST IN NET LOSS. The Minority Interest in Net Loss of
Consolidated Subsidiary was $0.1 million for the year ended December 31, 2001.
This is the portion of the loss attributed to the Company's partner in Glacial
Technologies LLC (GT). GT was formed during the current fiscal year and,
therefore, had no transactions during the previous fiscal period.

         NET INCOME. Net Income for the year ended December 31, 2001 was $21.4
million, compared to $10.1 million for the nine-month period ended December 31,
2000. The $11.3 million dollar increase is the result of the increase in Income
Before Minority Interest of $11.2 plus the Minority Interest in Net Loss of
Consolidated Subsidiary of $0.1 million.


LIQUIDITY AND CAPITAL RESOURCES

         On December 31, 2001 the Company's Total Assets were $597.4 million, as
compared to $600.9 million at December 31, 2000. Current Assets decreased by
$13.2 million, with the majority of the decrease resulting from the reduction of
Accounts Receivable, Inventory, and Cash. Increased grain inventories at the
elevators were offset by decreases in finished goods and bulk terminal
inventories. The Company purchased an additional grain elevator this past year,
as well as expanded the storage capacity at its two other elevators. The Company
sold its entire corn sweetener and sugar inventories that were at its bulk
terminals to CPMCP in May 2001, which is the key reason that Finished Goods
Inventories are down for the year. Repair Parts Inventory also showed a $1.0
million decrease from December 31, 2000 to December 31, 2001. Investments and
Other Assets is up approximately $24.7, with the majority of the increase coming
from recording the Company's share of income (loss) from its joint ventures
utilizing the equity method of accounting, plus the initial costs of its
investments in CPMCP, Arkion Life Sciences LLC, and Minnesota Energy, Inc. Net
Property and Equipment decreased $15.0 million, primarily as a result of
recording depreciation expense in excess of new capital additions.

         Cash flows for the year ended December 31, 2001 were used to fund
operating expenses, capital projects, distributions to the shareholders, and
debt payments. Net Cash Flows from Operating Activities were $61.6 million. The
Company's Depreciation and Amortization Expense included in this figure is $47.1
million. Cash Used for Investing Activities totaled $42.1 million, reflecting
normal capital expenditures for the Company, the issuance of a promissory note,
the asset purchase of Liquid Corn Inc.'s Minnesota assets, and several
investments made by the Company throughout the year. The $22.3 million of Cash
Used for Financing Activities was for the distribution payments to the
shareholders, as well as payments made toward the Company's long-term debt. A
$15.0 million prepayment was made against the long-term debt during this past
year, in addition to the scheduled $3.6 million debt payment.

         The Company's Senior Notes Outstanding were $241.4 million at December
31, 2001 compared to $260.0 million at December 31, 2000. In addition to its
senior notes, the Company has a $50 million revolving line of credit facility on
which there was no outstanding balance at either year-end.


                                       11
<PAGE>


FORWARD-LOOKING STATEMENTS

MCP AND ITS REPRESENTATIVES MAY FROM TIME TO TIME MAKE WRITTEN OR ORAL
FORWARD-LOOKING STATEMENTS, INCLUDING STATEMENTS MADE IN THIS REPORT, THAT
REPRESENT MCP'S EXPECTATIONS OR BELIEFS CONCERNING FUTURE EVENTS, INCLUDING
STATEMENTS REGARDING FUTURE SALES, FUTURE PROFIT PERCENTAGES AND OTHER RESULTS
OF OPERATIONS, THE CONTINUATION OF HISTORICAL TRENDS, THE SUFFICIENCY OF CASH
BALANCES AND CASH GENERATED FROM OPERATING AND FINANCING ACTIVITIES FOR MCP'S
FUTURE LIQUIDITY AND CAPITAL RESOURCE NEEDS, AND THE EFFECTS OF ANY REGULATORY
CHANGES. SUCH STATEMENTS ARE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. MCP CAUTIONS YOU THAT ANY
FORWARD-LOOKING STATEMENTS MADE BY MCP IN THIS REPORT, IN OTHER REPORTS FILED BY
MCP WITH THE SECURITIES AND EXCHANGE COMMISSION OR IN OTHER ANNOUNCEMENTS BY MCP
ARE QUALIFIED BY CERTAIN RISKS AND OTHER IMPORTANT FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING
STATEMENTS. SUCH RISKS AND FACTORS INCLUDE, BUT ARE NOT LIMITED TO,
THEFOLLOWING:

MCP OPERATES IN AN INTENSIVELY COMPETITIVE INDUSTRY.

         MCP operates within highly competitive markets. In the United States,
MCP competes with other corn processors or refiners, including Archer Daniels
Midland Company, Cargill, and A.E. Staley Manufacturing Company, a subsidiary of
Tate & Lyle, PLC. Some of our competitors are divisions of larger enterprises
and may have greater financial resources than we do. Many of our products also
compete with products made from raw materials other than corn. For example, high
fructose corn syrup competes principally with cane and beet sugar, and ethanol
competes with Methyl Tert-Butyl Ether, a petroleum based fuel oxygenate, and
other oxygenate and compliance alternatives. MCP believes the principal
competitive factors in our markets are supply and demand, price, product quality
and service.

MCP'S BUSINESS IS SENSITIVE TO CORN PRICES, AND WHEN CORN PRICES INCREASE, MCP
GENERALLY CANNOT PASS ON THESE INCREASES TO ITS CUSTOMERS.

         Changes in the price of corn can significantly affect our business. In
general, rising corn prices produce 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 our customers.
The price fluctuation in corn prices over the twenty-year period from 1980
through 2001, based on monthly futures data, has ranged from a low of $1.42 per
bushel to a high of $5.55 per bushel.

         The price of corn is influenced by general economic, market and
government factors. These factors include weather conditions, farmer planting
decisions, domestic government farm and international policies, and global
demand and supply. The significance and relative impact of these factors on the
price of corn is difficult to predict. Factors such as severe weather or crop
disease could have an adverse impact on our business because we may be unable to
pass on higher corn costs to our customers. Any events that tend to negatively
impact the supply of corn will tend to increase prices and potentially harm our
business.

DEBT SERVICE AND RESTRICTIVE LOAN COVENANTS COULD REDUCE DISTRIBUTIONS TO
MEMBERS.

         As of December 31, 2001, MCP's long-term debt was approximately $238
million. It is possible MCP's leverage and debt service requirements may make
MCP more vulnerable to economic or market downturns. If MCP is unable to service
its indebtedness, it may be forced to reduce or delay planned capital
expenditures, sell assets, restructure indebtedness or seek additional equity
capital. There can be no assurance that any of these strategies could be
implemented on satisfactory terms, if at all. In addition, the terms of MCP's
existing debt instruments contain restrictive, financial and maintenance
covenants. These covenants, among other things, place limits on our ability to
make cash distributions to members. For example, cash distributions may not
exceed 80% of our net earnings in any given year, unless specific financial
ratios are satisfied.

MCP'S BUSINESS IS SUBJECT TO EXTENSIVE ENVIRONMENTAL AND FOOD REGULATION AND
COMPLYING WITH THESE REGULATIONS CAN BE COSTLY AND UNPREDICTABLE.


                                       12
<PAGE>


         As a producer of food items, MCP is subject to extensive regulation by
the FDA and other government agencies. MCP also is subject to various federal,
state and local laws and regulations with respect to environmental matters. The
failure to comply or the need to respond to threatened actions involving
environmental laws and regulations may adversely affect our business, operating
results or financial condition.

HEDGING TRANSACTIONS INVOLVE RISKS THAT CAN HARM OUR BUSINESS.

         In an attempt to minimize the effects of the volatility of corn costs
on operating profits, we take hedging positions in the corn futures markets. The
effectiveness of such hedging activities is dependent upon, among other things,
the cost of corn and our ability to sell sufficient products to utilize all of
the corn for which MCP has futures contracts. Although we attempt to link our
hedging activities to sales plans and pricing activities, occasionally such
hedging activities can themselves result in losses. There can be no assurance
that such losses will not recur.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

COMMODITIES

         The availability and price of agricultural commodities are subject to
wide fluctuations due to unpredictable factors such as weather, plantings,
global demand created by population growth, and changes in standards of living
and global production of similar crops. To reduce price risk caused by market
fluctuations, the Company generally follows a policy of hedging its inventories
and related purchase and sale contracts. In addition, the Company, from
time-to-time, will hedge portions of its production requirements. The
instruments used are principally readily marketable exchange traded futures
contracts, which are designed as hedges. The changes in market value of such
contracts have a high correlation to the price changes of the hedges commodity.

The Company uses derivative financial instruments to minimize the exposure of
price risk related to corn and natural gas purchases used in the manufacturing
process, and the price risk in the sales of feed co-products. The derivative
financial instruments consist of open futures contracts on established futures
exchanges and are valued at fair value in the December 31, 2001, Balance Sheet,
Net of Margin Deposits.

The contracts used to mitigate the price risk related to corn and natural gas
purchases are designated as effective cash flow hedges for a portion of the corn
and natural gas usage over the next twelve months. Gains and losses arising from
open and closed hedging transactions are deferred in other comprehensive income
and are reclassified into Net Income in the month in which the purchases being
hedged are recognized or, if the hedge is determined to be ineffective. At
December 31, 2001, the Company had a balance of $7.6 million of unrealized
losses related to future transactions, which is expected to be recognized in
earnings within the next twelve months.

The contracts used to mitigate the price risk related to sales of feed
co-products are not designated and accounted for as effective cash flow hedging
instruments and, therefore, the related unrealized gains and losses are recorded
in Net Income monthly.

A sensitivity analysis has been prepared to estimate the Company's exposure to
market risk of its commodity position. The Company's daily net commodity
position consists of inventories, related purchase and sale contracts, and
exchange traded contracts, including those to hedge portions of production
requirements. The fair value of such positions is a summation of the fair values
calculated for each commodity by valuing each net position at quoted futures
prices. Market risk is estimated as the potential loss in fair value, resulting
from a hypothetical 10% adverse change in such prices. The results of this
analysis, which may differ from actual results, are as follows:


                         December 31, 2000                December 31, 2001
                      Fair Value     Market Risk      Fair Value     Market Risk
                      ----------     -----------      ----------     -----------
     Long Position    $14,336,550    $1,433,655       $18,965,782     $1,896,578


                                       13
<PAGE>


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEPENDENT AUDITOR'S REPORT

Board of Directors
Minnesota Corn Processors, LLC and Subsidiaries
Marshall, Minnesota

We have audited the accompanying consolidated balance sheets of Minnesota Corn
Processors, LLC and Subsidiaries as of December 31, 2001 and 2000, and the
related consolidated statements of operations, member equities, and cash flows
for the year ended December 31, 2001, the nine-month period ended December 31,
2000 and the year ended March 31, 2000. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Minnesota Corn
Processors, LLC and Subsidiaries as of December 31, 2001 and 2000, and the
results of their operations and their cash flows for the year ended December 31,
2001, the nine month period ended December 31, 2000 and the year ended March 31,
2000, in conformity with accounting principles generally accepted in the United
States of America.

As discussed in the Note 15, the Company adopted Statements of Financial
Accounting Standards No. 141, BUSINESS COMBINATIONS, and No. 142, GOODWILL AND
OTHER INTANGIBLE ASSETS, for acquisitions entered into subsequent to June 30,
2001.

/S/ Clifton Gunderson LLP

Marshfield, Wisconsin
January 25, 2002


                                       14
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2001 AND 2000

                                     ASSETS

<TABLE>
<CAPTION>
                                                            DECEMBER 31, 2001    DECEMBER 31, 2000
                                                            -----------------    -----------------
<S>                                                              <C>                  <C>
CURRENT ASSETS
      Cash and cash equivalents                                  $    152,856         $  2,875,403
      Receivables                                                  58,228,138           63,076,343
      Inventories                                                  45,525,722           50,121,420
      Prepaids and other assets                                     4,222,268            4,351,792
      Fair value of derivatives                                     4,160,953            5,113,855
                                                                 ------------         ------------

               Total current assets                               112,289,937          125,538,813
                                                                 ------------         ------------


INVESTMENTS AND OTHER ASSETS
      Investments                                                  30,336,682           10,488,470
      Deferred debt refinancing costs                               2,569,949            2,809,949
      Cash surrender value of life insurance                          450,827              155,639
      Non-current receivables                                       3,000,000              153,542
      Non-current prepaids                                          1,121,690            1,337,690
      Goodwill and other intangibles                                7,399,373            5,236,542
                                                                 ------------         ------------

               Total investments and
                   other assets                                    44,878,521           20,181,832
                                                                 ------------         ------------


PROPERTY AND EQUIPMENT                                            764,851,138          737,744,974
      Less accumulated depreciation                               324,657,350          282,503,226
                                                                 ------------         ------------

               Net property and equipment                         440,193,788          455,241,748
                                                                 ------------         ------------



TOTAL ASSETS                                                     $597,362,246         $600,962,393
                                                                 ============         ============
</TABLE>


                                       15
<PAGE>


                 LIABILITIES AND MEMBER EQUITIES

<TABLE>
<CAPTION>
                                                                 DECEMBER 31, 2001      DECEMBER 31, 2000
                                                                 -----------------      -----------------
<S>                                                                  <C>                    <C>
CURRENT LIABILITIES
      Short-term notes payable                                       $          --          $     116,960
      Current portion of long-term debt                                  3,619,972              3,866,002
      Accounts payable - grain                                           7,779,755              8,444,574
      Accounts payable - other                                          25,241,093             21,935,924
      Income taxes payable                                               1,047,949                275,000
      Accrued payroll costs                                              4,255,721              3,592,413
      Accrued real estate taxes                                          2,325,000              2,105,000
      Accrued interest                                                   4,953,056              5,441,904
      Accrued expenses and taxes                                         2,084,518              1,522,265
                                                                     -------------          -------------

               Total current liabilities                                51,307,064             47,300,042

LONG TERM DEBT                                                         237,929,958            256,549,930

ACCRUED POSTRETIREMENT BENEFITS                                            586,651                187,258
                                                                     -------------          -------------

               Total liabilities                                       289,823,673            304,037,230
                                                                     -------------          -------------

MEMBER EQUITIES
      Class A Units                                                    188,861,816            176,109,895
      Class B Units                                                    126,238,852            121,030,330
      Accumulated other comprehensive income:
          Net unrealized loss on fair value of derivatives              (7,632,180)              (230,251)
          Unrealized gain on foreign currency translation                   70,085                 15,189
                                                                     -------------          -------------

               Total member equities                                   307,538,573            296,925,163
                                                                     -------------          -------------

TOTAL LIABILITIES AND MEMBER
      EQUITIES                                                       $ 597,362,246          $ 600,962,393
                                                                     =============          =============
</TABLE>


 These consolidated financial statements should be read only in connection with
           the accompanying summary of significant accounting policies
                 and notes to consolidated financial statements.

                                       16
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
     Year Ended December 31, 2001, Nine Months Ended December 31, 2000, and
                            Year Ended March 31, 2000

<TABLE>
<CAPTION>
                                                               YEAR ENDED        NINE MONTHS ENDED          YEAR ENDED
                                                           DECEMBER 31, 2001     DECEMBER 31, 2000        MARCH 31, 2000
                                                           -----------------     -----------------        --------------
<S>                                                            <C>                   <C>                   <C>
NET SALES, STORAGE, AND HANDLING
      CHARGES                                                  $ 620,415,540         $ 443,461,268         $ 569,634,259

COST OF GOODS                                                    567,285,115           403,283,172           512,864,278
                                                               -------------         -------------         -------------

              Gross profit                                        53,130,425            40,178,096            56,769,981

SELLING, GENERAL, AND ADMINISTRATIVE
      EXPENSES                                                    26,486,896            19,629,056            25,090,018
                                                               -------------         -------------         -------------

              Net operating income                                26,643,529            20,549,040            31,679,963
                                                               -------------         -------------         -------------

OTHER INCOME (EXPENSE)
      Interest expense                                           (18,850,641)          (16,031,902)          (21,979,662)
      Interest and other income (net)                                528,895             2,186,023               880,728
      Gain (loss) on disposal of property and equipment             (353,837)              875,386               793,799
      Equitable interest in joint venture income                  14,301,950                    --                    --
                                                               -------------         -------------         -------------

              Total other expenses                                (4,373,633)          (12,970,493)          (20,305,135)
                                                               -------------         -------------         -------------

              Income before income taxes                          22,269,896             7,578,547            11,374,828

PROVISION FOR INCOME TAXES                                         1,000,000               352,022               251,191
                                                               -------------         -------------         -------------

              Income before cumulative effect of change
                  in accounting principle                         21,269,896             7,226,525            11,123,637

CUMULATIVE EFFECT OF CHANGE IN
      ACCOUNTING PRINCIPLE                                                --             2,867,405                    --
                                                               -------------         -------------         -------------

              Income before minority interest in net
                  loss of consolidated subsidiary                 21,269,896            10,093,930            11,123,637

MINORITY INTEREST IN NET LOSS OF
      CONSOLIDATED SUBSIDIARY                                        107,618                    --                    --
                                                               -------------         -------------         -------------

NET INCOME                                                     $  21,377,514         $  10,093,930         $  11,123,637
                                                               =============         =============         =============
</TABLE>


 These consolidated financial statements should be read only in connection with
           the accompanying summary of significant accounting policies
                 and notes to consolidated financial statements.

                                       17
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF MEMBER EQUITIES
     Year Ended December 31, 2001, Nine Months Ended December 31, 2000, and
                            Year Ended March 31, 2000

<TABLE>
<CAPTION>
                                                          UNITS OF EQUITY       NON-VOTING                           UNALLOCATED
                                                           PARTICIPATION     UNITS OF EQUITY      CONTRIBUTED          CAPITAL
                                                           CERTIFICATES       PARTICIPATION         CAPITAL            DEFICIT
                                                           ------------       -------------         -------            -------
<S>                                                        <C>                <C>                <C>                <C>
BALANCE, MARCH 31, 1999                                    $ 247,006,471      $ 119,790,000      $   1,007,789      $ (62,071,209)

Payments by members                                                   --                 --                 --                 --
March 31, 2000 allocation of net income                               --                 --                 --          9,533,765
Value added                                                           --                 --                 --         (8,677,116)
Transfers                                                             --                 --                 --             (7,954)
Equity retirements                                                    --                 --                 --           (112,773)
                                                           -------------      -------------      -------------      -------------

BALANCE, MARCH 31, 2000                                      247,006,471        119,790,000          1,007,789        (61,335,287)


December 31, 2000 allocation of net income                            --                 --                 --          5,125,675

Other comprehensive income:
     Unrealized loss on derivatives:
         Cumulative effect of adopting FAS 133                        --                 --                 --                 --
         Gain arising during period                                   --                 --                 --                 --
         Reclassification adjustment                                  --                 --                 --                 --
      Unrealized gain on foreign currency translation                 --                 --                 --                 --


        Total comprehensive income                                    --                 --                 --                 --

Payment by members                                                    --                 --                 --                 --
Value added                                                           --                 --                 --         (4,523,870)
Equities repurchased                                                  --                 --                 --             (5,699)
Conversion to Limited Liability Company                     (247,006,471)      (119,790,000)        (1,007,789)        60,739,181
                                                           -------------      -------------      -------------      -------------

BALANCE, DECEMBER 31, 2000                                            --                 --                 --                 --


December 31, 2001 allocation of net income                            --                 --                 --                 --

Other comprehensive income:
     Unrealized loss on derivatives:
         Loss arising during year                                     --                 --                 --                 --
         Reclassification adjustment                                  --                 --                 --                 --
      Unrealized gain on foreign currency translation                 --                 --                 --                 --


        Total comprehensive income                                    --                 --                 --                 --

Allocation of minority interest capital deficit                       --                 --                 --                 --
Distribution to members                                               --                 --                 --                 --
Member interests repurchased                                          --                 --                 --                 --
                                                           -------------      -------------      -------------      -------------

BALANCE, DECEMBER 31, 2001                                 $          --      $          --      $          --      $          --
                                                           =============      =============      =============      =============
</TABLE>


                                       18
<PAGE>


<TABLE>
<CAPTION>
 NON-QUALIFIED          LOSS                                                  ACCUMULATED OTHER
  PATRONAGE           ALLOCATED            CLASS A             CLASS B          COMPREHENSIVE
   REFUNDS           TO MEMBERS             UNITS               UNITS              INCOME               TOTAL
   -------           ----------             -----               -----              ------               -----
<S>                 <C>                 <C>                 <C>                 <C>                 <C>
$   3,849,171       $ (20,665,755)      $          --       $          --       $          --       $ 288,916,467

           --             125,453                  --                  --                  --             125,453
           --           1,589,872                  --                  --                  --          11,123,637
           --                  --                  --                  --                  --          (8,677,116)
           --                  --                  --                  --                  --              (7,954)
           --             116,908                  --                  --                  --               4,135
-------------       -------------       -------------       -------------       -------------       -------------

    3,849,171         (18,833,522)                 --                  --                  --         291,484,622
                                                                                                    -------------

           --             833,822           2,894,103           1,240,330                  --          10,093,930



           --                  --                  --                  --         (16,978,319)        (16,978,319)
           --                  --                  --                  --           4,650,500           4,650,500
           --                  --                  --                  --          12,097,568          12,097,568
           --                  --                  --                  --              15,189              15,189
                                                                                                    -------------

           --                  --                  --                  --                  --           9,878,868

           --              40,344              49,277                  --                  --              89,621
           --               1,621                  --                  --                  --          (4,522,249)
           --                  --                  --                  --                  --              (5,699)
   (3,849,171)         17,957,735         173,166,515         119,790,000                  --                  --
-------------       -------------       -------------       -------------       -------------       -------------

           --                  --         176,109,895         121,030,330            (215,062)        296,925,163
                                                                                                    -------------

           --                  --          14,964,260           6,413,254                  --          21,377,514



           --                  --                  --                  --          (7,632,180)         (7,632,180)
           --                  --                  --                  --             230,251             230,251
           --                  --                  --                  --              54,896              54,896
                                                                                                    -------------

           --                  --                  --                  --                  --          14,030,481

           --                  --             (75,333)            (32,285)                 --            (107,618)
           --                  --          (1,875,268)         (1,172,447)                 --          (3,047,715)
           --                  --            (261,738)                 --                  --            (261,738)
-------------       -------------       -------------       -------------       -------------       -------------

$          --       $          --       $ 188,861,816       $ 126,238,852       $  (7,562,095)      $ 307,538,573
=============       =============       =============       =============       =============       =============
</TABLE>


 These consolidated financial statements should be read only in connection with
           the accompanying summary of significant accounting policies
                 and notes to consolidated financial statements.

                                       19
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
     Year Ended December 31, 2001, Nine Months Ended December 31, 2000, and
                            Year Ended March 31, 2000

<TABLE>
<CAPTION>
                                                                            YEAR ENDED        NINE MONTHS ENDED       YEAR ENDED
                                                                         DECEMBER 31, 2001    DECEMBER 31, 2000     MARCH 31, 2000
                                                                         -----------------    -----------------     --------------
<S>                                                                           <C>                  <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
      Net income                                                              $ 21,377,514         $ 10,093,930       $ 11,123,637
      Adjustments to reconcile net income to net
          cash provided by operating activities:
          Depreciation and amortization                                         47,124,690           34,675,391         45,735,486
          Joint venture income                                                 (14,301,950)                  --                 --
          Minority interest in net loss of consolidated subsidiary                (107,618)                  --                 --
          Net unrealized losses (gains) on derivatives and investments             581,464           (3,489,849)                --
          Investment impairment loss                                                    --                   --            423,555
          Non-cash patronage refunds received                                           --                   --               (122)
          Loss (gain) on disposal of equipment                                     353,837             (875,386)          (793,799)
          Provision for doubtful accounts                                          478,530              168,422            941,494
          Change in operating assets and liabilities:
              Receivables                                                        4,497,752             (453,517)       (13,942,714)
              Inventories                                                        4,595,698          (12,775,373)         2,070,164
              Cash surrender value of life insurance                              (295,188)             (13,119)             3,480
              Prepaids and other assets                                            129,524           (1,444,999)         2,298,091
              Margin deposits                                                   (6,936,386)           3,541,526         (2,819,746)
              Accounts payable - grain                                            (664,819)           3,668,554         (1,235,390)
              Accounts payable - other                                           2,687,303              (71,040)         1,651,918
              Accrued payroll costs                                                663,308             (175,189)           956,986
              Accrued real estate taxes                                            220,000             (341,000)          (252,340)
              Accrued interest                                                    (488,848)           3,659,203            (25,036)
              Accrued expenses and taxes, other than income taxes                  562,253             (111,425)           490,141
              Income taxes recoverable/payable - current
                  and deferred                                                     772,949              210,500           (234,115)
              Accrued postretirement benefits                                      399,393             (541,024)           (56,718)
                                                                              ------------         ------------       ------------

                  Net cash provided by operating activities                     61,649,406           35,725,605         46,334,972
                                                                              ------------         ------------       ------------


CASH FLOWS FROM INVESTING ACTIVITIES
      Additions to property and equipment                                      (31,699,580)         (19,998,626)       (18,767,648)
      Proceeds from disposal of property and equipment                           1,921,838            1,236,754          2,416,815
      Issuance of note receivable                                               (3,000,000)                  --                 --
      Purchase of Liquid Corn, Inc.'s assets in Minnesota                       (3,216,325)                  --                 --
      Purchase of Liquid Corn, Inc.'s assets in Nebraska                                --                   --         (2,889,067)
      Investments purchased                                                     (6,085,471)            (122,312)                --
                                                                              ------------         ------------       ------------

                  Net cash used by investing activities                        (42,079,538)         (18,884,184)       (19,239,900)
                                                                              ------------         ------------       ------------
</TABLE>


                                       20
<PAGE>


<TABLE>
<CAPTION>
                                                                 YEAR ENDED        NINE MONTHS ENDED         YEAR ENDED
                                                              DECEMBER 31, 2001    DECEMBER 31, 2000       MARCH 31, 2000
                                                              -----------------    -----------------       --------------
<S>                                                                <C>                  <C>                  <C>
CASH FLOWS FROM FINANCING ACTIVITIES
     Principal payments on short-term borrowings                   $   (116,960)        $   (618,458)        $   (679,955)
     Long-term borrowings                                            23,750,000            7,800,000                   --
     Principal payment on long-term debt                            (42,616,002)         (18,559,051)         (20,480,813)
     Distributions paid to members                                   (3,904,926)                  --                   --
     Member interests repurchased                                      (307,006)                  --                   --
     Loss allocation payments from members                              902,479            2,514,936              992,361
     Value added                                                             --          (15,646,373)          (4,979,740)
     Equity adjustments                                                      --               15,994              (30,987)
                                                                   ------------         ------------         ------------

                 Net cash used by financing activities              (22,292,415)         (24,492,952)         (25,179,134)
                                                                   ------------         ------------         ------------


NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                                (2,722,547)          (7,651,531)           1,915,938


CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                          2,875,403           10,526,934            8,610,996
                                                                   ------------         ------------         ------------


CASH AND CASH EQUIVALENTS, END OF YEAR                             $    152,856         $  2,875,403         $ 10,526,934
                                                                   ============         ============         ============


SUPPLEMENTAL CASH FLOW INFORMATION
     Interest paid                                                 $ 19,339,489         $ 12,204,931         $ 21,897,457
     Income taxes paid                                                  227,051              279,509              589,190


NONCASH ACTIVITY
     Property and equipment acquired through debt financing
         and accounts payable                                      $  1,159,032         $    500,000         $  1,862,248
</TABLE>


 These consolidated financial statements should be read only in connection with
           the accompanying summary of significant accounting policies
                 and notes to consolidated financial statements.

                                       21
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
            DECEMBER 31, 2001, DECEMBER 31, 2000, AND MARCH 31, 2000


Minnesota Corn Processors, LLC and Subsidiaries ("the Company" or "MCP") is a
Limited Liability Company incorporated in Colorado for the purpose of producing
value-added corn related products for its members. The Company produces
unmodified corn syrup, high fructose corn syrup, corn starch, fuel ethanol, and
feed co-products in processing plants located in Marshall, Minnesota and
Columbus, Nebraska.

The accompanying consolidated financial statements include the accounts of
DEICER USA, LLC; FI Mankato Energy, Inc.; and MCP Investment Company, LLC; which
are wholly-owned subsidiaries of the Company either formed or acquired during
2001. Additionally, Glacial Technologies LLC; which is a 55% owned subsidiary of
DEICER USA, LLC; is also included in these consolidated financial statements.

Prior to July 1, 2000, the consolidated financial statements included the
accounts of Liquid Sugars, Inc. (LSI), which was a wholly owned subsidiary of
MCP, and Grower Procurement Agency (GPA), an agency of the members of MCP. LSI
was a sweetener blending and storage operation, which provided its products to
various types of customers (including food processors) located primarily in the
Western United States. GPA was formed to assemble, procure, and supply corn to
MCP on behalf of its membership. Effective July 1, 2000, the members of
Minnesota Corn Processors (a cooperative) voted to convert the cooperative to a
Limited Liability Company. Concurrent with this conversion, LSI was merged into
Minnesota Corn Processors, while the controlled entity of GPA was dissolved.
Minnesota Corn Processors, LLC currently performs the operations previously
performed by LSI and GPA. As a result of the conversion to a Limited Liability
Company, the Company changed its fiscal year end from March 31 to December 31.


PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of MCP
and its subsidiaries. Significant intercompany balances and transactions have
been eliminated in consolidation.


USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS

The preparation of financial statements in conformity with generally accepted
accounting principles 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 those estimates. The most significant
management estimates relate to the determination of the valuation of repair
parts inventory, the accumulated depreciation, and the allowance for doubtful
accounts.


CREDIT POLICY

The Company sells its product primarily to the petroleum industry, food
processors, farmers and ranchers, breweries, bakeries, the paper industry, and
soft drink companies on terms it establishes for each customer. Credit sales are
made throughout the United States and, to a much lesser degree, in Canada and
western Asia.


                                       22
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
            DECEMBER 31, 2001, DECEMBER 31, 2000, AND MARCH 31, 2000


REVENUE RECOGNITION POLICY

Revenues are recognized at the time product is shipped to customers, net of
freight charges, except for consigned inventories where the revenue is
recognized at the time the shipment is used by the customer. Freight costs
charged against net sales totaled $7,034,081, $11,388,877, and $14,142,062 for
the periods ended December 31, 2001, December 31, 2000, and March 31, 2000,
respectively.


CASH AND CASH EQUIVALENTS

For purposes of the statement of cash flows, the Company considers all highly
liquid investments in debt instruments of other entities, with a maturity date
of less than three months at the date of purchase, to be cash equivalents.


INVENTORIES

Finished goods and goods in process of manufacture are valued at the lower of
average cost or net realizable value. Unprocessed corn and repair parts are
valued at the lower of cost or net realizable value. Chemicals, raw material
supplies, and coal are valued at the lower of cost or market. All inventory
valuations assume a first-in, first-out flow of goods. Commodities at the grain
elevators are valued at market price, adjusted for net unrealized gains and
losses on open purchase and sales contracts.


DERIVATIVES

On July 1, 2000, the Company adopted Statement of Financial Accounting Standards
(SFAS) 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. The
Company uses derivative financial instruments to minimize the exposure of price
risk related to corn and natural gas purchases used in the manufacturing
process, and price risk in the sales of co-products. The derivative financial
instruments consist of open futures contracts on established board of trades and
are valued at fair value in the December 31, 2001 and 2000, balance sheets, net
of margin deposits.

The contracts used to mitigate the price risk related to corn and natural gas
purchases are designated as effective cash flow hedges for a portion of the corn
and natural gas usage over the next twelve months. Gains and losses arising from
open and closed hedging transactions are deferred in other comprehensive income
and are reclassified into net income in the month in which the purchases being
hedged are recognized or if the hedge is determined to be ineffective. At
December 31, 2001, the Company had a balance of $7,632,180 of unrealized losses
related to future transactions, which is expected to be recognized in earnings
within the next twelve months. The ineffective portion of these hedges
recognized in net income during the years ended December 31, 2001 and 2000, was
$-0- and a loss of $38,750, respectively. The cumulative adjustment of these
contracts was to record a loss of $16,978,319 in other comprehensive income at
July 1, 2000.


                                       23
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
            DECEMBER 31, 2001, DECEMBER 31, 2000, AND MARCH 31, 2000


DERIVATIVES (CONTINUED)

The contracts used to mitigate the price risk related to sales of co-products
are not designated and accounted for as hedging instruments and, therefore, the
related unrealized gains and losses are recorded in net earnings monthly. The
cumulative adjustment of these contracts was to record a gain of $2,867,405 at
July 1, 2000.


INVESTMENTS

The Company's investments in CornProductsMCP Sweeteners LLC (50% ownership) and
Arkion Life Sciences LLC ( 20% ownership) are accounted for using the equity
method. Under the equity method, the investment is carried at cost, adjusted for
the Company's proportionate share of undistributed earnings or losses.

The investments in CoBank (formerly known as St. Paul Bank) and Minnesota Energy
are recorded at original cost, plus the face value of equities received as
patronage refunds. The face value of equities redeemed by these cooperatives are
deducted from the investment balance. These investments are not transferable. No
cash is received until such time as redeemed at the discretion of the
cooperatives. Patronage refunds and redemptions are recorded in the year
received. If a permanent impairment in value is deemed to have occurred, the
investment value is reduced and a loss is reported in the statement of
operations.

The other investments are valued at cost, which approximates market.


PROPERTY AND EQUIPMENT

The cost of property and equipment includes all costs incurred to bring such
assets to the condition necessary for their intended use.

Costs of property and equipment are charged to operations, as depreciation, on a
straight-line method over the estimated useful lives of the individual assets.

The ranges of the estimated useful lives for the major classes of property and
equipment are as follows:

Land and public improvements                   Not being depreciated
Land improvements                              10 to 20 years
Building and leasehold improvements            Generally 30 years, with some
                                               immaterial amounts on a shorter
                                               life (leaseholds are amortized
                                               over shorter of useful life or
                                               lease period)
Equipment                                      5 to 25 years
Railroad, switch engine, and rail cars         11 to 25 years
Silos                                          5 to 35 years
Construction in progress                       Not being depreciated


                                       24
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
            DECEMBER 31, 2001, DECEMBER 31, 2000, AND MARCH 31, 2000


GOODWILL AND OTHER INTANGIBLES

Goodwill and other intangibles resulting from the purchase price of net assets
in excess of fair market value are being amortized on a straight-line basis over
lives ranging from 7 to 15 years, except for goodwill related to acquisitions
subsequent to June 30, 2001, which are not being amortized.

Amortization expense for the periods ended December 31, 2001, December 31, 2000,
and March 31, 2000, was $820,278, $486,209, and $379,531, respectively.
Accumulated amortization was $2,571,860 and $1,751,582 at December 31, 2001 and
2000, respectively.


DEFERRED DEBT REFINANCING COST

The debt refinancing costs relate to a restructuring of debt completed during
fiscal 1997/98. The asset is carried at cost and is being amortized over a
15-year period using the straight-line method. Amortization expense for the
periods ended December 31, 2001, December 31, 2000, and March 31, 2000, was
$240,000, $180,000, and $240,000, respectively. Accumulated amortization was
$1,040,000 and $800,000 at December 31, 2001 and 2000, respectively.


LONG-LIVED ASSETS

In accordance with Statement of Financial Accounting Standards (SFAS) No. 121,
which is entitled ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND FOR
LONG-LIVED ASSETS TO BE DISPOSED OF, the Company records impairment losses on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. Based on current estimates, management
does not believe impairment of operating properties is present.


PENSION PLANS

The Company makes payments under a defined contribution plan for the benefit of
substantially all nonunion employees. The Company matches 50% of each employee's
401(k) contributions up to a 6% deferral election. The Company also sponsors a
Money Purchase Pension program, which is fully funded by the Company at 3% of
employee wages. The Company is committed to a minimum contribution of 2% of net
income for these plans. Pension costs charged to operations for the periods
ended December 31, 2001, December 31, 2000, and March 31, 2000, amounted to
$2,223,729, $1,398,263, and $1,614,410, respectively.

Effective January 1, 2002, the above plans have been amended by increasing the
Company match for each employee's 401 (k) contribution to 100% of the first 3%
deferred election, then 50% match on the next 2% deferred election. The amended
401(k) plan also incorporates a basic profit sharing employer contribution of
3%, which will replace the money purchase pension program.

A portion of the Company's employees are covered by a collective bargaining
agreement. The Company contributes to the union employees' pension plan in
accordance with the terms of the collective bargaining agreement.


                                       25
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
            DECEMBER 31, 2001, DECEMBER 31, 2000, AND MARCH 31, 2000


INCOME TAXES

Effective July 1, 2000, the Company converted to a limited liability company. In
lieu of corporate income taxes, the members of the Company are taxed on their
proportionate share of the Company's taxable income. Therefore, no provision or
liability for federal income taxes has been included in these financial
statements after June 30, 2000. When significant, a provision for various state
income and franchise taxes is recorded.

Prior to July 1, 2000, the Company (as a cooperative) was subject to federal and
various state income taxes and was permitted a deduction from taxable income for
the portion of the net proceeds refunded to patrons in the form of qualified
patronage refunds, if any, or value added payments. Consolidated tax returns
were filed for federal income tax purposes.


RECLASSIFICATIONS

Certain amounts in these December 31, 2000 and March 31, 2000, financial
statements have been reclassified from where they were presented in prior
periods. These reclassifications had no effect on previously reported net income
amounts.







This information is an integral part of the accompanying consolidated financial
statements.


                                       26
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            DECEMBER 31, 2001, DECEMBER 31, 2000, AND MARCH 31, 2000


NOTE 1 - RECEIVABLES

Balance sheet totals comprise the following elements:

<TABLE>
<CAPTION>
                                                                            DECEMBER 31, 2001     DECEMBER 31, 2000
                                                                            -----------------     -----------------
<S>                                                                         <C>                   <C>
Notes receivable                                                            $       3,000,000     $         179,366
Trade accounts                                                                     52,693,652            58,106,748
Other                                                                               6,534,486             5,643,771
Allowance for doubtful accounts                                                    (1,000,000)             (700,000)
                                                                            ------------------    -----------------

TOTAL RECEIVABLES                                                           $      61,228,138     $      63,229,885
                                                                            =================     =================

Balance sheet classification:
     Current assets                                                         $      58,228,138     $      63,076,343
     Non-current assets                                                             3,000,000               153,542
                                                                            -----------------     -----------------

TOTAL                                                                       $      61,228,138     $      63,229,885
                                                                            =================     =================
</TABLE>


NOTE 2 - INVENTORIES

Principal elements of inventories were as follows:

<TABLE>
<CAPTION>
                                                                            DECEMBER 31, 2001     DECEMBER 31, 2000
                                                                            -----------------     -----------------
<S>                                                                         <C>                   <C>
Grain at elevators                                                          $      13,608,689     $      11,592,430
Unprocessed corn                                                                    2,472,353             3,051,031
Chemicals, raw material supplies, and coal                                          5,821,513             6,064,375
Goods in process of manufacture                                                     2,122,981             2,104,079
Finished goods                                                                     10,127,624            13,272,824
Repair parts                                                                        9,655,075            10,672,841
Sweetener - bulk and specialty products                                             1,717,487             3,363,840
                                                                            -----------------     -----------------

TOTAL INVENTORIES                                                           $      45,525,722     $      50,121,420
                                                                            =================     =================
</TABLE>


                                       27
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            DECEMBER 31, 2001, DECEMBER 31, 2000, AND MARCH 31, 2000


NOTE 3 - INVESTMENTS

The Company's investments consist of the following:

<TABLE>
<CAPTION>
                                                                            DECEMBER 31, 2001     DECEMBER 31, 2000
                                                                            -----------------     -----------------
<S>                                                                         <C>                   <C>
Equity method investments:
     CornProductsMCP Sweeteners LLC                                         $      15,000,950     $               -
     Arkion Life Sciences LLC                                                       3,801,000                     -
                                                                            -----------------     -----------------
                                                                                   18,801,950                     -
                                                                            -----------------     -----------------
Cost method investments:
     CoBank                                                                        10,343,958            10,343,958
     Minnesota Energy                                                                 750,000                     -
     Others                                                                           440,774               144,512
                                                                            -----------------     -----------------
                                                                                   11,534,732            10,488,470
                                                                            -----------------     -----------------

TOTAL INVESTMENTS                                                           $      30,336,682     $      10,488,470
                                                                            =================     =================
</TABLE>


Effective January 1, 2001, the Company became a 50% member of CornProductsMCP
Sweeteners LLC (CPMCP), for the purpose of marketing the majority of the
sweetener products produced by the Company. In January 2001, the Company made an
initial cash contribution of $500,000 to capitalize the newly formed LLC. As
part of the LLC operating agreement, the Company entered into a formal supply
agreement that specifies the products and quantities that will be sold to
CornProductsMCP Sweeteners LLC.

Summarized income statement information for CPMCP for the year ended December
31, 2001, is as follows:

<TABLE>
<CAPTION>
                                                                                     YEAR ENDED
                                                                                 DECEMBER 31, 2001
                                                                                 -----------------
<S>                                                                              <C>
Net sales                                                                        $    782,409,275
Cost of sales                                                                         743,977,685
                                                                                 ----------------

                  Gross profit                                                         38,431,590
Selling, general and administrative expenses                                           12,731,764
Commission expense                                                                        480,576
Commission and other income                                                            (2,445,519)
                                                                                 ----------------

Net income, before taxes                                                               27,664,769
Provision for income taxes                                                                121,000
                                                                                 ----------------

NET INCOME                                                                       $     27,543,769
                                                                                 ================

EQUITABLE SHARE OF NET INCOME IN CPMCP                                           $     14,500,950
                                                                                 ================
</TABLE>


                                       28
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            DECEMBER 31, 2001, DECEMBER 31, 2000, AND MARCH 31, 2000


NOTE 3 - INVESTMENTS (CONTINUED)

Summarized balance sheet information for CPMCP as of December 31, 2001, is as
follows:

<TABLE>
<CAPTION>
                                                                                 DECEMBER 31, 2001
                                                                                 -----------------
<S>                                                                              <C>
Current assets                                                                   $     99,806,539
Property and equipment, net                                                             3,225,127
                                                                                 ----------------

TOTAL ASSETS                                                                     $    103,031,666
                                                                                 ================

Current liabilities                                                              $     74,487,897
Total equities                                                                         28,543,769
                                                                                 ----------------

TOTAL LIABILITIES AND EQUITIES                                                   $    103,031,666
                                                                                 ================
</TABLE>


The Company sells principally its entire sweetener product to CPMCP. During
2001, these sales amounted to approximately $248.4 million of which $21.0
million is in accounts receivable as of December 31, 2001.

During 2001, the Company paid for payroll and selling expenses that were
reimbursed by CPMCP approximating $3.7 million. During 2001, CPMCP also
reimbursed the Company for leased rail car expense, which approximated fair
value at $7.2 million. The Company charged CPMCP for freight services
approximating $5.2 million. The Company received $0.2 million from CPMCP for
commissions on sales of certain products.

On November 19, 2001, MCP formed MCP Investment Company, LLC (MCPIC), a
wholly-owned subsidiary, with a $4.0 million investment. Upon consolidation, the
$4.0 million investment was assigned to the investment that MCPIC held in Arkion
Life Sciences, LLC, representing a 19.993% membership interest in that company.
The investment has been accounted for using the equity method of accounting. MCP
has also advanced $3.0 million to Arkion Life Sciences, LLC under terms of a
promissory note dated September 26, 2001. The terms of the note include interest
compounded at 8% monthly; payments for interest are scheduled to commence after
January 1, 2003, and for principal after October 1, 2004. Final amounts due for
principal and interest are due October 1, 2008.


NOTE 4 - ACQUISITIONS

On July 1, 2001, the Company acquired certain assets of Liquid Corn, Inc.(LCI)
in Minnesota for approximately $3.2 million. The acquisition has been accounted
for using the purchase method of accounting and results of operations of LCI
were included subsequent to the acquisition date. The acquisition is expected to
increase gross profits by providing higher net revenues for the sale of
steepwater. The purchase price was assigned to property and equipment ($733,216)
and goodwill ($2,483,109) based on management's estimate of the fair value of
such assets at the date of acquisition. For tax purposes the entire amount of
the goodwill will be amortized over fifteen years. The pro forma operating
results for December 31, 2001 and 2000, assuming this acquisition had been
consummated as of the beginning of the respective periods, would not be
materially different from reported operating results.


                                       29
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             DECEMBER 31, 2001, DECEMBER 31, 2000 AND MARCH 31, 2000


NOTE 4 - ACQUISITIONS (CONTINUED)

On August 31, 2001, MCP acquired 100% of the stock of FI Mankato Energy, Inc.
for $750,000. The acquisition has been accounted for using the purchase method
of accounting and the results of operations of FI Mankato Energy, Inc. are
included subsequent to the acquisition date. The acquisition is expected to
increase market share for sales of ethanol. Upon consolidation, the purchase
price was assigned to the investment that FI Mankato Energy, Inc. held in
Minnesota Energy, representing a 13.3% interest in that company. MCP is
accounting for this investment in Minnesota Energy on the cost basis of
accounting. The pro forma operating results for December 31, 2001 and 2000,
assuming this acquisition had been consummated as of the beginning of the
respective periods, would not be materially different from reported operating
results.


NOTE 5 - PROPERTY AND EQUIPMENT

The Company's investment in property and equipment is recorded in the balance
sheet at cost. The principal elements of the totals shown in the balance sheet
are as follows:

<TABLE>
<CAPTION>
                                                                            DECEMBER 31, 2001     DECEMBER 31, 2000
                                                                            -----------------     -----------------
<S>                                                                         <C>                   <C>
Land and public improvements                                                $       6,797,970     $       6,862,892
Land improvements                                                                   8,276,568             7,771,046
Buildings and leasehold improvements                                              120,418,801           121,336,514
Equipment                                                                         581,516,415           564,621,582
Railroad, switch engine, and rail cars                                             13,053,455            12,329,224
Silos                                                                              12,297,958            11,307,158
Construction in progress                                                           22,489,971            13,516,558
                                                                            -----------------     -----------------

TOTAL PROPERTY AND EQUIPMENT                                                $     764,851,138     $     737,744,974
                                                                            =================     =================
</TABLE>

Depreciation expense was $45,848,412, $33,967,335, and $44,662,658 for the
periods ended December 31, 2001, December 31, 2000, and March 31, 2000,
respectively.


NOTE 6 - SHORT-TERM NOTES PAYABLE

Balance sheet totals consist of notes payable to:

<TABLE>
<CAPTION>
                                                                            DECEMBER 31, 2001     DECEMBER 31, 2000
                                                                            -----------------     -----------------
<S>                                                                         <C>                   <C>
Debentures payable                                                          $               -     $         116,960
                                                                            =================     =================
</TABLE>

The debentures payable to members and others were unsecured. Interest is paid on
maturity of the debenture at a rate of 5.00% per annum. All debentures were
retired as of December 31, 2001.


                                       30
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
            DECEMBER 31, 2001, DECEMBER 31, 2000, AND MARCH 31, 2000


NOTE 7 - LONG-TERM DEBT AND PROPERTY PLEDGED

Long-term debt comprises the following elements:

<TABLE>
<CAPTION>
                                                                            DECEMBER 31, 2001     DECEMBER 31, 2000
                                                                            -----------------     -----------------
<S>                                                                         <C>                   <C>
Private Placement Notes - Series A - repayment to be made at the rate of
$3,571,429 on September 1 of each year with final payment due September 1,
2007. Secured by real estate mortgage. Interest payable semi-annually at
7.57% per annum.                                                            $      21,428,572     $      25,000,000

Private Placement Notes - Series B - repayment to be made at the rate of
$24,000,000 per year commencing September 1, 2005, with final payment due
September 1, 2009. Secured by real estate mortgage. Interest payable
semi-annually at 7.72% per annum.                                                 120,000,000           120,000,000

Private Placement Notes - Series C - repayment to be made at the rate of
$6,428,571 per year commencing September 1, 2006, with final payment due
September 1, 2012. Secured by real estate mortgage. Interest payable
semi-annually at 7.83% per annum.                                                  45,000,000            45,000,000

Private Placement Notes - Series D - repayment to be made at the rate of
$20,000,000 per year commencing September 1, 2003, with final payment due
September 1, 2007. Secured by real estate mortgage. Interest payable at a
variable rate (3.382% at December 31, 2001).                                       55,000,000            70,000,000

Lucent Technology - dated July 22, 1999. Payable in 60 monthly payments of
$4,045, including imputed interest at the rate of 8% per annum. The final
payment is due December 31, 2004.                                                     121,358               169,902

IBM Credit Corporation                                                                      -                71,145

Marshall Municipal Utilities                                                                -               174,885
                                                                            -----------------     -----------------

                  Total                                                           241,549,930           260,415,932
Less current portion                                                                3,619,972             3,866,002
                                                                            -----------------     -----------------

LONG-TERM DEBT                                                              $     237,929,958     $     256,549,930
                                                                            =================     =================
</TABLE>


                                       31
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             DECEMBER 31, 2001, DECEMBER 31, 2000 AND MARCH 31, 2000


NOTE 7 - LONG-TERM DEBT AND PROPERTY PLEDGED (CONTINUED)

At December 31, 2001, the Company had $50,000,000 of unused revolving credit
commitment, expiring on October 1, 2003, from Harris Trust and Savings Bank and
U.S. Bancorp Ag Credit, Inc. limited to the available borrowing base of accounts
receivable and inventories. Interest is payable quarterly at the bank's variable
rate.

There are loan covenants with respect to the Harris Trust and Savings Bank, U.S.
Bancorp Ag Credit, Inc., and private placement notes that require the Company to
maintain minimum equity, current ratio, working capital, and various other
financial conditions.

The capital leases are secured by title to the equipment covered by the lease.

Future maturities of long-term debt are as follows:

<TABLE>
<S>                                                                            <C>
2002                                                                           $      3,619,972
2003                                                                                 23,619,972
2004                                                                                 23,595,702
2005                                                                                 42,571,429
2006                                                                                 34,000,000
Thereafter                                                                          114,142,855
                                                                               ----------------

TOTAL                                                                          $    241,549,930
                                                                               ================
</TABLE>


NOTE 8 - ACCRUED POSTRETIREMENT BENEFITS

In 2001, the Company adopted a Supplemental Executive Retirement Plan (SERP) to
provide members of management with supplemental retirement and death benefits.
The benefits earned are based upon years of service and the employee's
compensation and subject to vesting provisions defined by the Plan. The Plan
provides for defined benefit payments to these employees on their retirement or
to the beneficiaries on their deaths for up to 20 years after retirement or
death. The Plan is unfunded and as such there are no Plan assets. Life insurance
carried on the Plan participants is payable to the Company upon the employee's
death.

The following table shows the Plan's funded status and amounts recognized in the
Company's financial statements:

<TABLE>
<CAPTION>
                                                                                     2001               2000
                                                                                     ----               ----
<S>                                                                            <C>                <C>
Actuarial present value of benefit obligations                                 $        406,525   $               -
                                                                               ================   =================

Plan assets at fair value                                                      $              -   $               -
Projected benefit obligation in excess of plan assets                                   406,525                   -
                                                                               ----------------   -----------------

ACCRUED PENSION EXPENSE                                                        $        406,525   $               -
                                                                               ================   =================
</TABLE>


                                       32
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             DECEMBER 31, 2001, DECEMBER 31, 2000 AND MARCH 31, 2000


NOTE 8 - ACCRUED POSTRETIREMENT BENEFITS (CONTINUED)

<TABLE>
<CAPTION>
                                                                                     2001               2000
                                                                                     ----               ----
<S>                                                                            <C>                <C>
Pension expense included the following components:
     Service cost - benefits earned during the period                          $        381,714   $               -
     Interest cost on projected benefit obligation                                       24,811                   -
                                                                               ----------------   -----------------

NET PENSION EXPENSE                                                            $        406,525   $               -
                                                                               ================   =================
</TABLE>

The following assumptions were used to determine the funded status of the Plan:

<TABLE>
<S>                                                                                       <C>
Discount rate                                                                             6.50%
Rate of increase in compensation                                                          3.00%
</TABLE>

The Company also maintains other non-qualified post-retirement agreements with
certain of its employees. The present value of the future payments amounted to
$180,126 and $187,258 at December 31, 2001 and 2000, respectively. The increase
in future benefits attributable to these agreements is expensed annually. Life
insurance contracts and investments have been acquired to fund these
post-retirement arrangements.


NOTE 9 - MEMBER EQUITIES

Effective with the conversion to a Limited Liability Company on July 1, 2000,
the Company was authorized to issue 500,000,000 units, of which 350,000,000
units are designated as Class A (voting) and 150,000,000 units are designated as
Class B (nonvoting). At December 31, 2001, 136,618,940 Class A units and
58,622,340 Class B units were issued and outstanding. At December 31, 2000,
136,932,695 Class A units and 58,622,340 Class B units were issued and
outstanding.

Prior to July 1, 2000, as a cooperative, the following was information pertinent
to elements of member equities:

<TABLE>
<CAPTION>
                                                                             NON-VOTING
                                                                              PREFERRED             COMMON
                                                                                STOCK                STOCK
                                                                                -----                -----
<S>                                                                          <C>                  <C>
Par value                                                                                                $50
Shares authorized                                                                                    100,000
Aggregate par value authorized                                               $5,000,000           $5,000,000
</TABLE>

Included in the member equities was an account entitled loss allocated to
members, which represents the balance of the loss for the fiscal year ended
September 30, 1996, which was allocated to the membership. This loss was to be
recovered from the members in one of two ways:

A. A portion of the loss was to be deducted from future value added or other
positive allocations, until the loss is repaid in full.

B. The loss represents a lien against the members' units of equity
participation, and should a member sell their units of equity participation, the
amount of the loss allocated to the members will be deducted from such sale.


                                       33
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             DECEMBER 31, 2001, DECEMBER 31, 2000 AND MARCH 31, 2000


NOTE 9 - MEMBER EQUITIES (CONTINUED)

Prior to July 1, 2000, amounts were paid to members at the discretion of the
Board of Directors based upon operating results. This amount was considered a
value-added payment and was accounted for as a component of the allocation of
the net income.

None of the Company's stock was transferable except as permitted by the
Company's board of directors. Because the Company's stock was not transferable,
the number of shares issued, redeemed, and outstanding were not recorded in the
financial statements.


NOTE 10 - INCOME TAXES

The provision for income tax expense consists of the following components:

<TABLE>
<CAPTION>
                                                         DECEMBER 31, 2001     DECEMBER 31, 2000    MARCH 31, 2000
                                                         -----------------     -----------------    --------------
<S>                                                        <C>                  <C>                <C>
     Federal - current                                     $             -      $        75,000    $        244,256
     State - current                                             1,000,000              277,022               6,935
                                                           ---------------      ---------------    ----------------

TOTAL PROVISION FOR INCOME TAX EXPENSE                     $     1,000,000      $       352,022    $        251,191
                                                           ===============      ===============    ================
</TABLE>


A reconciliation of the provision for income taxes at the statutory tax rates to
the Company's actual provision for income taxes is as follows:

<TABLE>
<CAPTION>
                                                         DECEMBER 31, 2001     DECEMBER 31, 2000    MARCH 31, 2000
                                                         -----------------     -----------------    --------------
<S>                                                        <C>                  <C>                <C>
Computed at statutory rates                                $      726,452       $     2,327,416    $      3,867,442
Value added payable                                                     -            (1,544,940)         (2,950,219)
Benefit of net operating loss carryover and
various timing differences                                        273,548              (430,454)           (666,032)
                                                           --------------       ---------------    ----------------

TOTAL PROVISION FOR INCOME TAX EXPENSE                     $    1,000,000       $       352,022    $        251,191
                                                           ==============       ===============    ================
</TABLE>


                                       34
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             DECEMBER 31, 2001, DECEMBER 31, 2000 AND MARCH 31, 2000


NOTE 11 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable.

CASH AND CASH EQUIVALENTS, TRADE RECEIVABLES, TRADE PAYABLES, GRAIN CONTRACTS,
SALES CONTRACTS AND SHORT-TERM BORROWINGS: The carrying amount approximates fair
value because of the short maturity of those instruments.

INVESTMENTS IN OTHER COMPANIES: There are no quoted market prices and a
reasonable estimate of the fair value could not be made without incurring
excessive costs.

LONG-TERM DEBT: Fair value is based on the rates currently available to the
Company for debt with similar terms and average maturities. The fair value of
financial instruments that differed from their carrying value at December 31,
2001 and 2000, was as follows:

<TABLE>
<CAPTION>
                                                        DECEMBER 31, 2001                  DECEMBER 31, 2000
                                                --------------------------------  ---------------------------------
                                                   CARRYING                           CARRYING
                                                    AMOUNT          FAIR VALUE         AMOUNT          FAIR VALUE
                                                --------------    --------------   --------------   ---------------
<S>                                            <C>                <C>              <C>              <C>
7.57% Series A Notes                            $   21,428,572    $   25,200,000   $   25,000,000   $    25,000,000
7.72% Series B Notes                               120,000,000       136,000,000      120,000,000       120,000,000
7.83% Series C Notes                                45,000,000        52,200,000       45,000,000        45,000,000
</TABLE>


NOTE 12 - CONCENTRATIONS OF CREDIT RISK

The Company maintains cash and temporary investments at various financial
institutions. Balances on deposit are insured by the Federal Deposit Insurance
Corporation (FDIC) up to specified limits. Balances in excess of FDIC limits are
uninsured. Total cash and temporary investments held by the financial
institutions exceeded specified limits at various dates throughout 2001 and
2000.


                                       35
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             DECEMBER 31, 2001, DECEMBER 31, 2000 AND MARCH 31, 2000


NOTE 13 - COMMITMENTS AND CONTINGENCIES

LEASES

Certain property and equipment used by the Company are leased. Payments on the
operating leases, recorded as expense in the statement of operations, totaled
$7,332,438, $12,540,833, and $15,848,005 for the periods ended December 31,
2001, December 31, 2000, and March 31, 2000, respectively. Operating lease
expense is net of sublease income of approximately $7,200,000 in 2001 related to
rail car lease payments reimbursed by CPMCP.

Noncancellable future minimum payments are required on these leases as follows
for the next five years:

<TABLE>
<CAPTION>
                                                                                         OPERATING
                                                                                          LEASES
                                                                                          ------
<S>                                                                                  <C>
2002                                                                                 $    13,104,017
2003                                                                                      13,103,285
2004                                                                                      11,975,889
2005                                                                                      10,072,892
2006                                                                                       9,863,483
Thereafter                                                                                31,050,920
                                                                                     ---------------

TOTAL FUTURE MINIMUM LEASE PAYMENTS                                                  $    89,170,486
                                                                                     ===============
</TABLE>

LITIGATION

The Company is involved in various claims at December 31, 2001. In the opinion
of management, the ultimate liability for such claims would not have a material
adverse financial effect upon the company. Management further believes that all
or part of any potential liability for certain of these claims will be covered
by insurance, and management is vigorously defending all such claims against the
Company.

COMMITMENTS

It is expected that the total costs to complete the construction in progress at
December 31, 2001, will approximate $12,500,000.

The Company has 16 employment contracts with employees. Salary commitments under
these contracts total $1,536,910 as of December 31, 2001. All of these contracts
expire in 2002, except for one contract that expires in 2005.

At December 31, 2001, the Company had open contracts to purchase approximately
16.5 million bushels of corn at future dates at various prices. Additionally the
Company had approximately 1.0 million bushels of corn purchased on deferred
price contracts, which are included in the balance sheet at current value in the
caption accounts payable - grain, at December 31, 2001.

At December 31, 2001, the Company held grain in storage for others valued at
approximately $3.0 million. Although the grain is not inventory of the Company
and its value is not a liability, the Company is contingently liable to the
owners of the grain for quality deficiencies and quantity shortages.


                                       36
<PAGE>


                 MINNESOTA CORN PROCESSORS, LLC AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             DECEMBER 31, 2001, DECEMBER 31, 2000 AND MARCH 31, 2000


NOTE 14 - SEGMENT REPORTING

As of April 1, 1999, the Company adopted Statement of Financial Accounting
Standards Number 131 (SFAS 131) DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND
RELATED INFORMATION. SFAS 131 establishes standards for the way public business
enterprises report information about operating segments in financial reports
issued to shareholders. Based on the Company's organizational structure and the
manner in which performance is assessed and operating decisions are made, the
Company operates as one business segment - procuring, transporting, storing,
processing, and merchandising corn products.


NOTE 15 - FUTURE CHANGE IN ACCOUNTING PRINCIPLE

In June 2001, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 141, BUSINESS COMBINATIONS, and No. 142,
GOODWILL AND OTHER INTANGIBLE ASSETS. Statement No. 141 is effective for
acquisitions subsequent to June 30, 2001, and Statement No. 142 is effective for
fiscal years beginning after December 15, 2001, except for goodwill and
intangible assets acquired after June 30, 2001, which are subject immediately to
the nonamortization and amortization provisions of this Statement. Under the new
rules, goodwill and intangible assets deemed to have indefinite lives will no
longer be amortized but will be subject to annual impairment tests in accordance
with the Statements. Other intangible assets will continue to be amortized over
their useful lives.

The Company adopted Statement No. 141 and 142 for acquisitions subsequent to
June 30, 2001, which resulted in no amortization recorded on the goodwill
associated with the purchase of certain assets of Liquid Corn, Inc. in
Minnesota. For goodwill and intangibles existing prior to July 1, 2001, the
Company will apply the new rules as of January 1, 2002. Application of the
nonamortization provisions of the Statement is expected to result in an increase
in net income of $661,000 per year. During 2002, the Company will perform the
first of the required impairment tests of goodwill as of January 1, 2002. The
effects of these tests on the Company's earnings and financial position have not
yet been determined.







This information is an integral part of the accompanying consolidated financial
statements.


                                       37
<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

DIRECTORS

NAME                                          AGE     DISTRICT     TERM EXPIRES
----                                          ---     --------     ------------

Douglas G. Finstrom......................     48           I            2004

Kim Larson...............................     49           I            2002

Duane Adams..............................     62           I            2003

Howard Dahlager..........................     53          II            2004

Kenneth Robinson.........................     57          II            2002

David J. Scheibel........................     41          II            2003

Jerome N. Jacoby.........................     56         III            2004

Steve Lipetzky...........................     51         III            2002

Dennis Fultz.............................     54         III            2003

Roger E. Fjerkenstad.....................     68          IV            2003

Galen L. Rud.............................     53          IV            2002

Daniel Dybsetter.........................     56           V            2002

John R. Jerzak...........................     49           V            2003

Dean Buesing.............................     49           V            2004

Sander Allen Ludeman VI..................     54          VI            2003

John P. Hennen...........................     65          VI            2002

John H. Nelson...........................     64         VII            2002

Jim Gervais..............................     50         VII            2003

Ron Kirchner.............................     54         VII            2004

Kenneth L. Regier........................     68        VIII            2004

Larry Dowd...............................     56        VIII            2002

Andrew V. Jensen.........................     51        VIII            2002

Rodney G. Hassebrook.....................     52        VIII            2003

Robert J. Bender.........................     48        VIII            2003


                                       38
<PAGE>


         The Board of Directors of MCP consists of 24 member-directors who
represent eight geographic districts. The number of directors representing each
district is approximately proportionate to the number of members located in that
district. Each district is represented by at least two directors.

         DOUGLAS G. FINSTROM. Mr. Finstrom has been a director of MCP since
1989. Mr. Finstrom has been in the business of farming near Kerkhoven, Minnesota
for the past 30 years. Mr. Finstrom is currently the president of Finco
Equipment, Inc., a company involved in leasing equipment and investing. In
addition, Mr. Finstrom has been a member of Minnesota Farm Bureau for 30 years.

         KIM LARSON. Mr. Larson has been a director since July, 1999. He had
also served as a member of the Board of Directors of MCP from 1980 to 1990. Mr.
Larson owns and operates a crop production farm near Willmar, Minnesota and is a
drainage contractor. Mr. Larson is a past vice president of the American Soybean
Association.

         DUANE ADAMS. Mr. Adams has been a director of MCP since 1997. Mr. Adams
has been the president of Duane Adams Farms, Inc., producing corn and soybeans,
near Cosmos, Minnesota for the past 17 years. In addition, Mr. Adams also serves
as the president for the Minnesota Corn Growers Assocation.

         HOWARD DAHLAGER. Mr. Dahlager has been a director of MCP since 1988 and
is currently serving as vice-chairman. Mr. Dahlager is 1/3 owner and
secretary-treasurer of JSF Inc. (Johnson Seed Farm), near Sacred Heart,
Minnesota. In addition, Mr. Dahlager is currently the secretary of M.C.I.A.
(Minnesota Crop Improvement Association) and serves on their compensation
committee.

         KENNETH ROBINSON. Mr. Robinson has been a director of MCP since 1990.
Mr. Robinson has been in the business of farming in the Bird Island, Minnesota
area since 1983.

         DAVID J. SCHEIBEL. Mr. Scheibel has been a director of MCP since 1988.
Mr. Scheibel's experiences include being a partner of a 946-acre farming
operation from 1978 to 1994 near Bird Island, Minnesota. The partnership raised
corn, soybeans, seed corn and other specialty crops, as well as feeding Holstein
dairy replacement heifers and finishing Holstein beef cattle. As a partner, his
duties included financial and cost accounting, as well as daily production
responsibilities. Mr. Scheibel has also been employed in the agriculture
equipment business since 1994. He was employed as senior parts person at Kibble
Equipment Service Center in Bird Island, Minnesota from 1996 to January 2001.
Currently, Mr. Scheibel is employed by Hanson Silo of Lake Lillian, Minnesota as
a general/cost accountant.

         JEROME N. JACOBY. Mr. Jacoby has been a director of MCP since 1986 and
board chairman since 1992. Mr. Jacoby has been in the business of farming,
producing corn and soybeans, near Springfield, Minnesota since 1974. Mr. Jacoby
has also been the treasurer for Sundown Township for 13 years. In addition, Mr.
Jacoby has been a member of Minnesota Corn Growers for 19 years and is also a
member of the American Legion.

         STEVE LIPETZKY. Mr. Lipetzky has been a director of MCP since 1981. Mr.
Lipetzky is currently working on a farm in a partnership with his brothers.

         DENNIS FULTZ. Mr. Fultz has been a director of MCP since 2000. Since
1990, Mr. Fultz has been employed with Fultz Farms, Inc. of Tracy and currently
serves as the President of that corporation.



                                       39
<PAGE>


         ROGER E. FJERKENSTAD. Mr. Fjerkenstad was involved in the organization
of MCP and has been a director since 1981. Mr. Fjerkenstad is a retired farmer,
producing corn, soybeans and hogs from 1957 to 1996 near Dawson, Minnesota. Mr.
Fjerkenstad has been a director of the Farmers Cooperative Elevator, Dawson,
Minnesota for 13 years.

         GALEN L. RUD. Mr. Rud has been on the Board of Directors since 1999.
Mr. Rud operates a corn and soybean farming operation north of Montevideo,
Minnesota and has been involved in that operation since 1971.

         DANIEL DYBSETTER. Mr. Dybsetter has been a director of MCP since 1994
and is currently serving as Secretary. Mr. Dybsetter has been in the business of
farming, producing corn, soybeans and hogs since 1970 near Porter, Minnesota.

         JOHN R. JERZAK. Mr. Jerzak has been a director of MCP since 1985. Mr.
Jerzak has been primarily engaged in the business of farming near Ivanhoe,
Minnesota since 1975. Mr. Jerzak also has a seed business, dealing primarily in
DeKalb Seeds.

         DEAN BUESING. Mr. Buesing has been a director of MCP since 1998. Mr.
Buesing is the president of Buesing Farms, Inc., Granite Falls, Minnesota, a
farming operation producing corn, soybeans and hogs for 28 years. Mr. Buesing
has also been the president for the past 7 years of Buesing & Buesing, Inc.,
Granite Falls, Minnesota, which is involved in the building of cornheads. In
addition, from 1992-2000, Mr. Buesing served as treasurer of the Yellow Medicine
Soybean Growers Association. Mr. Buesing and Mr. Hennen are first cousins.

         SANDER ALLEN LUDEMAN VI. Mr. Ludeman has been a director of MCP since
1997. Mr. Ludeman has been a partner in Sanmarbo Farms, Inc., a diversified
grain and livestock farm near Tracy, Minnesota, since 1973. Mr. Ludeman has been
on the board of the Minnesota Farm Bureau Foundation for six years. In addition,
Mr. Ludeman has been a member of Minnesota Soybean Growers Association for 21
years, Minnesota Corn Growers Association for 17 years and Minnesota Farm Bureau
for 32 years. Mr. Ludeman was the founding chairman of the United Soybean Board,
past president of the American Soybean Development Foundation, vice-chairman of
the Institute of Agriculture, Forestry, Home Economics and Advisory Council of
the University of Minnesota and past chairman of the Minnesota Soybean Research
and Promotion Council.

         JOHN P. HENNEN. Mr. Hennen has been a director of MCP since 1997. Mr.
Hennen has been in the business of farming in Lyon County, Minnesota since 1960.
Mr. Hennen's farming operation is diversified, producing cattle, hogs, corn and
soybeans.

         JOHN H. NELSON. Mr. Nelson has been a director of MCP since 1981. Mr.
Nelson is the owner-operator of a 930-acre farming business located in Murray
County for 42 years. Mr. Nelson has also been a tiling and backhoe contractor
for the past 8 years.

         JIM GERVAIS. Mr. Gervais has been a director of MCP since 1990. Mr.
Gervais has been in the business of farming near Currie, Minnesota for 29 years
operating a grain and livestock farm with his brother.


                                       40
<PAGE>


         RON KIRCHNER. Mr. Kirchner has been a director of MCP since 1998. Mr.
Kirchner is in the business of farming, producing soybeans and custom
feeding hogs near Fulda, Minnesota.

         KENNETH L. REGIER. Mr. Regier has been a director of MCP since 1992.
Mr. Regier is a retired farmer and land owner near Aurora, Nebraska.

         LARRY DOWD. Mr. Dowd has been a director of MCP since 1992. Mr. Dowd is
President of Dowd Grain, O'Neill Farms, and Dowd Oil Co, all of which are
principally farming operations located in Holt County, Nebraska, producing row
crops, cow-calf operations and farrow to finish hog operations. Mr. Dowd also
serves as a director of First State Bank of Hickman and has a partnership
interest in a swine breeding stock company. In addition, Mr. Dowd has been a
member of the Nebraska Corn Growers Association for 10 years.

         ANDREW V. JENSEN. Mr. Jensen has been a director of MCP since 1997. Mr.
Jensen has been in the business of farming and livestock production near Aurora,
Nebraska since 1970. Mr. Jensen is currently the president of Jensen Farms, Inc.
and a partner in Jensen Brothers.

         RODNEY G. HASSEBROOK. Mr. Hassebrook has been a director of MCP since
2000. Mr. Hassebrook is employed by Hassebrook Farms Inc., a grain and feeder
cattle operation in Platte Center, NE. In addition, Mr. Hassebrook served on the
Nebraska Corn Development Utilization and Marketing Board from 1991-2000, served
on the United States Meat Export Federation Board from 1991-2000, served on the
United States Grain Council Board from 1991-2000, served on the Ag Council Board
from 1992-1997 and has served, since 1999, on the Nebraska Director of Ag
Advisory Board.

         ROBERT J. BENDER. Mr. Bender has been a director of MCP since 1992. Mr.
Bender has been the owner-operator of Bender Farms, a grain and livestock
operation, near Colombus, Nebraska since 1977. Mr. Bender has also been the
president of Bender Farms Trucking Inc., since 1992 and is a partner-manager of
CSS Farms. In addition, Mr. Bender is currently a partner and has been the
secretary for Klub 81 Inc. since 1980.


EXECUTIVE OFFICERS

         The following sets forth certain information about the executive
officers of MCP as of March 19, 2002. Each officer serves full time in the
capacity listed. These officers serve at the discretion of the Chief Executive
Officer and can be terminated by him without notice.


NAME                        AGE     POSITION
----                        ---     --------
L. Daniel Thompson          60      President and Chief Executive Officer
Daniel H. Stacken           38      Vice President and Chief Financial Officer
Lawrence J. Schiavo         43      Vice President of Operations and Business
                                      Development
Roger L. Untiedt            43      Vice President of Technology
Roger F. Evert              30      Vice President of Human Resources and
                                      Administration
Bradford A. Schultz(1)      43      Vice President of Commodities
Michael T. Mote             53      Vice President of Information Technology and
                                      Chief Information Officer
Joseph G. Bennett           36      Secretary & General Counsel
Gary Wadas                  41      Controller

(1) Effective March 21, 2002, Mr. Schultz resigned from the Company.

         L. DANIEL THOMPSON. Mr. Thompson has served as President and Chief
Executive Officer of MCP since August 1997 and served as Chief Financial Officer
from January 1997 to August 1997. Mr. Thompson also serves on the Board of
Managers for CPMCP. From December 1994 to January 1997, he served as President
and Chief Executive Officer of Bake Rite Foods, a shortening and vegetable oil
manufacturer. Prior thereto, Mr. Thompson was President and Chief Executive
Officer of Lou Ana Foods, Inc., a vegetable oil refinery.


                                       41
<PAGE>


         DANIEL H. STACKEN. Mr. Stacken has served as Vice President and Chief
Financial Officer of MCP since November 1998. Mr. Stacken served as Controller
from December 1991 to November 1998. Mr. Stacken also serves on the Board of
Managers of Glacial Technologies, LLC. As of March 21, 2002, Mr. Stacken serves
on the Board of Managers of CPMCP.

         LAWRENCE J. SCHIAVO, JR. Mr. Schiavo has served as Vice President of
Operations and Business Development of MCP since November 1998. Mr. Schiavo
served as Director of Operations from October 1992 to November 1998 and as Plant
Manager of the Marshall facility from June 1990 to October 1992. Mr. Schiavo
also serves on the Board of Managers of Glacial Technologies, LLC.

         ROGER L. UNTIEDT. Mr. Untiedt has served as Vice President of
Technology since November 1998 and from February 1996 to November 1998 served as
Director of Quality and Engineering of MCP. From November 1992 to February 1996,
he served as Plant Manager of the Marshall facility. Mr. Untiedt also serves on
the Board of Directors of Minnesota Energy, Inc. and the Board of Managers for
Arkion Life Sciences, LLC.

         ROGER F. EVERT. Mr. Evert has served as Vice President of Human
Resources and Administration since November 1998. From October 1992 to November
1998, Mr. Evert was Human Resources Manager of MCP.

         BRADFORD A. SCHULTZ. Mr. Schultz has served as the Vice President of
Commodities since June 1999. Mr. Schultz serves on the Board of Managers of
CPMCP. From 1997 until June 1999 he served as a trader/account executive for
Centennial Trading/Frontier Risk Management and from 1993 to 1997 was the Vice
President-General Manager for Conagra Corn Processing.

         MICHAEL T. MOTE. Mr. Mote has been the Vice President of Information
Technology and Chief Information Officer since April 28, 2000. Mr. Mote serves
on the Board of Managers of CPMCP. From June 1997 until April 2000 he served as
a contracted Chief Information Officer and Director of Information Services for
Central Plains Clinic. Prior thereto, he served as Vice President and Chief
Information Officer for Mercy Information Systems and Mercy Health Services.

         JOSEPH G. BENNETT. Mr. Bennett has served as General Counsel of MCP
since October 1998. In July, 2001, Mr. Bennett became MCP's Corporate
Secretary.  MCP hired Mr. Bennett in March 1998 as the Corporate Legal
Counsel. From September 1996 until March 1998 he was an associate attorney with
Wilkinson and Wilkinson, P.C. and was an associate attorney for McCann and
Ribstein, P.C. from February 1995 until August 1996. Mr. Bennett currently
serves as Joint Secretary for CPMCP.

         GARY WADAS. Mr. Wadas has been the Corporate Controller of MCP since
July, 2001.  Mr. Wadas began at MCP in July of 1994 as Special Projects
Account and from May of 1999 until his promotion in July, 2001 he served as
Assistant Treasurer.


ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION OF DIRECTORS

         The board of directors of MCP meets monthly. MCP currently reimburses
each director for actual expenses of attending board and committee meetings and
provides a per diem payment for services performed on behalf of MCP in the
amount of $250 for the board chairman, $150 for the vice chairman and secretary,
and $100 for other directors. Any additional director compensation must be
approved by the voting members of MCP. During 2001, MCP paid an aggregate of
$56,775 to all directors as a group in director's fees.


                                       42
<PAGE>


EXECUTIVE COMPENSATION

         The following table shows the compensation paid by MCP for the last
three fiscal years to the Chief Executive Officer and the four most highly
compensated executive officers whose cash compensation in 2001 exceeded
$100,000, and one other individual who ceased to serve as an executive officer
during fiscal period 2001 ("the Named Executive Officers").


                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                                         LONG-TERM
                                                                                ANNUAL COMPENSATION     COMPENSATION
                                                                                -------------------     ------------
                                                                                                        LONG-TERM      ALL OTHER
                                                                     YEAR                               INCENTIVE        COMPEN-
                    NAME AND PRINCIPAL POSITION                     ENDED(1)   SALARY ($)    BONUS ($)   PAYOUTS       SATION ($)(6)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>        <C>           <C>           <C>          <C>
L. Daniel Thompson, President & Chief Executive Officer*            12/31/01   $295,290.84   $10,437.55    $ ----       $ 9,999.28
                                                                    12/31/00   $280,288.62   $42,045.56    $ ----       $10,055.16
                                                                     3/31/00   $275,000.16   $14,679.47    $ ----       $ 9,600.00
------------------------------------------------------------------------------------------------------------------------------------
Bradford Schultz, Vice President of Commodities*  (2)               12/31/01   $152,660.80   $19501.47     $23,000(4)   $11,070.72
                                                                    12/31/00   $142,166.70   $12,601.47    $34,375(4)   $ 5,126.14
                                                                     3/31/00   $105,769.29   $30,101.47(3) $ ----       $ 2,632.56
------------------------------------------------------------------------------------------------------------------------------------
Michael Mote, Vice President of Information Technology & CIO* (5)   12/31/01   $165,321.04   $21,300.00    $ ----       $ ----
                                                                    12/31/00   $108,958.44   $29,901.48(3) $ ----       $ ----
------------------------------------------------------------------------------------------------------------------------------------
Roger Untiedt, Vice President of Technology*                        12/31/01   $155,988.02   $20,104,77    $ ----       $10,194.58
                                                                    12/31/00   $152,375.10   $13,101.47    $ ----       $ 9,658.14
                                                                     3/31/00   $147,500.16   $12,601.47    $ ----       $ 9,239.55
------------------------------------------------------------------------------------------------------------------------------------
Larry Schiavo, Vice President of Operations & Business Development* 12/31/01   $159,566.40   $20,101.47    $ ----       $10,866.69
                                                                    12/31/00   $151,116.20   $13,101.47    $ ----       $ 9,653.44
                                                                     3/31/00   $147,500.16   $12,601.48    $ ----       $ 9,272.32
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)      Fiscal year end March 31, 2000 covers April 1, 1999 through March 31,
         2000. However, year-end December 31, 2000 covers January 1, 2000
         through December 31, 2000 to give a consistent 12-month comparison for
         the reader.

(2)      Mr. Schultz was hired by the Company effective June 24, 1999. Effective
         March 21, 2002, Mr. Schultz resigned from the Compnay.

(3)      This amount includes relocation, discretionary, and incentive bonus.

(4)      This amount is a long-term incentive bonus based on Mr. Schultz's corn
         forecasting abilities.

(5)      Mr. Mote was hired by the Company effective April 28, 2000.

(6)      Except as otherwise noted, the amounts reported represent MCP's
         matching contributions to MCP's Retirement Savings and Investment Plan
         on behalf of the named officer.

*  Denotes eligible employees for the Supplemental Executive Retirement Plan
   (as defined below)

STOCK OPTIONS

     No stock options to purchase equity interests in MCP have been granted to
the Named Executive Officers.


RETIREMENT PLAN

MCP has a Supplemental Executive Retirement Plan ("SERP") which provides
retirement benefits to certain eligible employees of MCP. The SERP monthly
benefits are calculated by using 1/12 of an amount of an employee's includable
compensation (amount shown on W-2) as of initial participation in the SERP,
which is December 1, 2000, multiplied by 20% plus 3% cost of living adjustment.
The benefits are not subject to offset by Social Security payments. When a
participant reaches the age of 65, the SERP benefit is payable for a period of
240 months commencing upon the first day of the month following the participants
retirement, provided that the participant, except for Mr. Thompson, participated
in the SERP for five full years. The SERP does provide for early retirement
benefits at age 55 provided the employee has at least 15 years of service and 5
years of participation in the SERP, with a 5% reduction in benefits for each
year that the participant is less than age 65. Each of the Named Executive
Officers in the SERP has one full year of credited service under the SERP. The
SERP is funded by a Spit Dollar Agreement between MCP and each participant.
Because of the salary variables contained in the above formula, it would be
conjectural and inaccurate to estimate annual benefits payable upon normal
retirement age for each of the Named Executive Officers in the SERP.


EMPLOYMENT AGREEMENTS

         MCP has an employment agreement with Mr. Thompson, its president and
chief executive officer. Under the agreement, Mr. Thompson's initial annual
salary is $275,000. Mr. Thompson also is eligible for an annual bonus based on a
fixed percentage of net income for that fiscal year. The agreement provides for
discretionary annual bonuses to Mr. Thompson for any fiscal year in which MCP is
unprofitable. In addition, the agreement has an annuity provision whereby Mr.
Thompson receives a $20,000 annuity annually.

         The initial term of the agreement expires on March 31, 2003, subject to
automatic renewal terms of one year each, unless terminated earlier. If the
Board terminates the employment agreement with Mr. Thompson without cause (as
defined), Mr. Thompson will receive a cash severance payment equal to:

*    if the employment ends during the initial term, the greater of $275,000 or
     the product of $5,288.46 times the number of weeks remaining from the date
     of termination to the end of the initial term, or

*    if the employment ends after the initial term, $275,000.

         In addition, MCP will compensate Mr. Thompson for up to $200,000
financial loss suffered on the sale of his residence in Marshall, Minnesota upon
his separation from MCP.


                                       43
<PAGE>


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
         OWNERS AND MANAGEMENT

The table below presents, as of March 25, 2002, certain information about the
beneficial ownership of the units of equity participation in MCP for each person
known to own 5% or more of the outstanding units, each director, each Named
Executive Officer, and all directors and executive officers of MCP as a group.
Unless otherwise noted each person has sole investment and sole voting power
with respect to the units held.

                                                                    Percent of
         Name of Beneficial Owner                Number of Units   Class Owned
         ------------------------                ---------------   -----------
         *Duane Adams.........................        118,117            **
         *Robert J. Bender....................        100,957            **
         *Dean Buesing........................        999,912            **
         *Howard Dahlager.....................        213,247            **
         *Larry Dowd..........................        163,581            **
         *Daniel Dybsetter....................        131,440            **
         *Douglas G. Finstrom.................        378,781            **
         *Roger G. Fjerkenstad................        313,840            **
         *Dennis Fultz........................        221,736            **
         *Jim Gervais.........................        418,416            **
          Rodney G. Hassebrook................         20,206            **
         *John P. Hennen .....................        166,922            **
         *Jerome N. Jacoby....................        522,791            **
         *Andrew V. Jensen....................         66,768            **
         *John R. Jerzak......................        624,429            **
         *Ron Kirchner........................         99,362            **
         *Kim Larson..........................         54,994            **
         *Steve Lipetzky......................        205,700            **
         *Sander Allen Ludeman VI (1).........        227,823            **
         *John H. Nelson......................        384,368            **
         *Kenneth L. Regier...................         75,672            **
         *Kenneth Robinson....................        102,334            **
          Galen L. Rud........................         63,864            **
         *David J. Scheibel...................         83,796            **
         *Lawrence J. Schiavo.................         40,000            **
         *Bradford A. Schultz.................          5,000            **
         *L. Dan Thompson.....................          3,078            **
         *Roger L. Untiedt....................         35,000            **

          All directors and executive officers
          as a group..........................      5,837,134       4.2726%

          Archer Daniels Midland (ADM)........     58,622,430(2)       100%
          4666 Faries Parkway
          Decatur, Illinois 62526

(1)  Mr. Ludeman owns 35% of the units of Sanmarbo Farms, Inc.
(2)  ADM's units are held as Class "B" non-voting units.

*  Includes units for which the individual has shared and dispositive powers.
** Less than 1% of Class owned.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In fiscal year 1996 MCP sustained a loss which was allocated to the members
based on their proportional ownership of Units. The loss allocation is to be
either paid to MCP by the members or deducted from future distributions. The
following table shows the loss allocation amount for each director and Named
Executive Officer owed to MCP as of March 25, 2002.


                                       44
<PAGE>


         The following table represents an assessment against each unit of
equity participation in 1996 for Minnesota Corn Processors, Inc., a Minnesota
cooperative. This assessment amount continues as a lien in favor of MCP against
Class "A" units. This assessment is now referred to as a "1996 Loss Payable" in
MCP's Operating Agreement.

                                  LOSS PAYABLE       LOSS PAYABLE
                                AMOUNT REMAINING   AMOUNT REMAINING
DIRECTOR OR OFFICER NAME        JANUARY 1, 2001     MARCH 25, 2002
------------------------        ---------------     --------------
Duane Adams...............        $ 13,492.15        $ 10,451.00
Robert Bender.............        $ 28,560.00        $ 22,680.00
Larry Dowd................        $ 62,393.43        $ 44,973.32
Douglas G. Finstrom.......        $ 50,506.45        $ 39,649.81
Roger Fjerkenstad.........        $114,240.00        $ 90,720.00
Dennis Fultz..............        $ 86,822.40        $ 68,927.40
Jim Gervais...............        $131,376.00        $104,328.00
Rodney Hassebrook.........        $  3,427.20        $  2,721.60
John Hennen...............        $ 17,136.00        $ 13,608.00
Jerome Jacoby.............        $177,581.75        $141,015.00
Andrew V. Jensen..........        $ 22,848.00        $ 18,144.00
John R. Jerzak............        $141,372.00        $112,266.00
Kim Larson................        $ 22,134.00        $ 17,577.00
Steve Lipetzky............        $ 88,202.84        $ 69,505.00
John H. Nelson............        $ 85,796.00        $ 67,813.00
Kenneth Robinson..........        $ 31,130.40        $ 24,721.00
David Scheibel............        $ 38,556.00        $ 30,618.00
Lawrence J. Schiavo.......        $  4,649.46        $  3,708.66
Roger L. Untiedt..........        $  4,649.46        $  3,708.66



                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
         ON FORM 8-K

         (a)      Exhibits.

                  The following exhibits are included in this report: See
                  "Exhibit Index" immediately following the signature page on
                  this Form 10-K

         (b)      Financial Statements and Schedules.

                  The following financial statements and schedules are included
                  in Part II, Item 8 of this Form 10-K.

                  Independent Auditors' report

                  Balance Sheets as of December 31, 2001 and December 31, 2000

                  Statements of Operations for the Year Ended December 31, 2001,
                  9 Months Ended December 31, 2000, and Fiscal Year Ended March
                  31, 2000.

                  Statement of Cash Flows for the Year Ended December 31, 2001,
                  9 Months Ended December 31, 2000, and Fiscal Year Ended March
                  31, 2000.

                  Notes to Consolidated Financial Statements

                  All other schedules are omitted since they are not applicable,
                  not required or the information is presented in the
                  consolidated financial statements or related notes.

         (c)      Reports on Form 8-K.

                  A Report on Form 8-K dated October 4, 2001 reporting under
                  Items 5 and 7 was filed October 4, 2001.

                  A Report on Form 8-K dated November 9, 2001 reporting under
                  Items 5 and 7 was filed November 9, 2001.

                  A Report on Form 8-K dated November 29, 2001 reporting under
                  Items 5 and 7 was filed November 29, 2001.

         (d)      Not Applicable.




                                       45
<PAGE>


                                   SIGNATURES


         Pursuant to the requirements of Section 13 or 15(d) 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.

Dated: March 25, 2002               Minnesota Corn Processors, LLC


                                    By /s/ L. Dan Thompson
                                       -------------------
                                           L. Dan Thompson
                                           President and Chief Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.

SIGNATURE                           TITLE                              DATE

/s/ L. Dan Thompson          President and Chief Executive       March 25, 2002
---------------------------  Officer (principal executive
L. Dan Thompson              officer)

/s/ Daniel H. Stacken        Chief Financial Officer             March 25, 2002
---------------------------  (principal financial)
Daniel H. Stacken

/s/ Gary Wadas               Controller                          March 25, 2002
---------------------------  (principal accounting officer)
Gary Wadas

/s/ Jerome N. Jacoby         Chairman of the Board &             March 25, 2002
---------------------------  Director
Jerome N. Jacoby

/s/ Howard Dahlager          Vice-Chairman & Director            March 25, 2002
---------------------------
Howard Dahlager

/s/ Douglas G. Finstrom      Director                            March 25, 2002
---------------------------
Doug Finstrom

/s/ Kim Larson               Director                            March 25, 2002
---------------------------
Kim Larson

/s/ Duane Adams              Director                            March 25, 2002
---------------------------
Duane Adams

/s/ Sander A. Ludeman VI     Director                            March 25, 2002
---------------------------
Sander Allen Ludeman VI

/s/ Kenneth Robinson         Director                            March 25, 2002
---------------------------
Kenneth Robinson

/s/ David J. Scheibel        Director                            March 25, 2002
---------------------------
David J. Scheibel

/s/ Steve Lipetzky           Director                            March 25, 2002
---------------------------
Steve Lipetzky


                                       46
<PAGE>


/s/ Dennis Fultz             Director                             March 25, 2002
---------------------------
Dennis Fultz

/s/ Roger E. Fjerkenstad     Director                             March 25, 2002
---------------------------
Roger E. Fjerkenstad

/s/ Galen L. Rud             Director                             March 25, 2002
---------------------------
Galen L. Rud

/s/ Daniel Dybsetter         Director                             March 25, 2002
---------------------------
Daniel Dybsetter

/s/ John R. Jerzak           Director                             March 25, 2002
---------------------------
John R. Jerzak

/s/ Dean Buesing             Director                             March 25, 2002
---------------------------
Dean Buesing

/s/ John P. Hennen           Director                             March 25, 2002
---------------------------
John P. Hennen

/s/ Jim Gervais              Director                             March 25, 2002
---------------------------
Jim Gervais

/s/ Ron Kirchner             Director                             March 25, 2002
---------------------------
Ron Kirchner

                             Director                             March 25, 2002
---------------------------
Kenneth L. Regier

/s/ Larry Dowd               Director                             March 25, 2002
---------------------------
Larry Dowd

/s/ Andrew V. Jensen         Director                             March 25, 2002
---------------------------
Andrew V. Jensen

/s/ Rondney G. Hassebrook    Director                             March 25, 2002
---------------------------
Rodney G. Hassebrook

/s/ Robert J. Bender         Director                             March 25, 2002
---------------------------
Robert J. Bender

/s/ John Nelson              Director                             March 25, 2002
---------------------------
John Nelson


                                       47
<PAGE>


SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT

The Company has not yet sent to security holders an annual report or proxy
statement. The Company intends to send to its security holders an annual report
and proxy statement covering the period ended December 31, 2001.


                                       48


<PAGE>

EXHIBIT NUMBER                                 DESCRIPTION

2.1                 Plan of Merger by and between Minnesota Corn Processors,
                    Inc. and Minnesota Corn Processors of Colorado, dated June
                    26, 2000 (incorporated herein by reference to Exhibit 2.1 to
                    the registrant's Registration Statement on Form S-4
                    (Registration No. 333-71213)).

2.2                 Plan of Merger by and between Minnesota Corn Processors
                    Colorado and Minnesota Corn Processors, LLC, dated June 26,
                    2000 (incorporated herein by reference to Exhibit 2.2 to the
                    registrant's Registration Statement on Form S-4
                    (Registration No. 333-71213)).

3.1                 Articles of Organization of Minnesota Corn Processors, LLC.
                    (Incorporated herein by reference to Exhibit 3.1 of the
                    Registrant's Form 10-K filed on June 28, 2000.)

3.2                 Third Amended and Restated Operating Agreement of Minnesota
                    Corn Processors, LLC. (Incorporated herein by reference to
                    Exhibit 3.1 of the Registrant's Form 10-K filed on June 28,
                    2000.)

4.1                 Note Purchase Agreement dated as of August 26, 1997
                    (incorporated herein by reference to Exhibit 10.7 to the
                    registrant's Registration Statement on Form S-4
                    (Registration No. 333-71213)).

10.1                Master Equipment Lease Agreement between Fleet Capital
                    Corporation and Minnesota Corn Processors, Inc., dated April
                    9, 1998 (incorporated herein by reference to Exhibit 10.3 to
                    the registrant's Registration Statement on Form S-4
                    (Registration No. 333-71213)).

10.2                Firm Sales/Purchase Agreement between Minnesota Corn
                    Processors, Inc. and Wascana Energy Marketing (U.S.) Inc.,
                    dated December 30, 1996 (incorporated herein by reference to
                    Exhibit 10.4 to the registrant's Registration Statement on
                    Form S-4 (Registration No. 333-71213)).

10.3                Natural Gas Purchase and Sale Contract between Minnesota
                    Corn Processors, Inc. and Husky Gas Marketing Inc., dated
                    November 1, 1996 (incorporated herein by reference to
                    Exhibit 10.5 to the registrant's Registration Statement on
                    Form S-4 (Registration No. 333-71213)).

10.4                Amended and Restated Secured Credit Agreement among
                    Minnesota Corn Processors, Inc., Liquid Sugars, Inc., Harris
                    Trust and Savings Bank and U.S. Bancorp Ag Credit, dated as
                    of November 4, 1998 (incorporated herein by reference to
                    Exhibit 10.6 to the registrant's Registration Statement on
                    Form S-4 (Registration No. 333-71213)).

10.5                Employment Agreement of L. Daniel Thompson, dated April 1,
                    2000 (incorporated herein by reference to Exhibit 10.7 to
                    the registrant's Registration Statement on Form 10-K filed
                    on June 28, 2000).*

10.6                Limited Liability Company Agreement of CornProductsMCP
                    Sweeteners LLC dated December 1, 2000 by and between
                    CornProductsMCP Sweeteners LLC, Corn Products International,
                    Inc. and Minnesota Corn Processors, LLC (incorporated herein
                    by reference to Exhibit 10.8 to the registrant's
                    Registration Statement on Form 10-K filed on March 27,
                    2001).

10.7                Supply Agreement made as of January 1, 2001 by and between
                    CornProductsMCP Sweeteners LLC, Corn Products International,
                    Inc. and Minnesota Corn Processors, LLC (incorporated herein
                    by reference to Exhibit 10.9 to the registrant's
                    Registration Statement on Form 10-K filed on March 27,
                    2001).

10.8                Fourth Amendment to Amended and Restated Secured Credit
                    Agreement among Minnesota Corn Processors, LLC, Harris Trust
                    and Savings Bank, as agent and U.S. Bancorp Ag Credit,
                    dated as of February 13, 2002.

-----------
* Items that are management's contracts or compensatory plans or arrangements
required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.


                                       49