UNITED
      STATES
              SECURITIES
      AND EXCHANGE COMMISSION
              Washington,
      D.C. 20549Form
      10-Q(Mark
      one)R
            QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended March 31, 2009£
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from _________ to __________Commission
      file number 000-53041SOUTHWEST
      IOWA RENEWABLE ENERGY, LLC(Exact
      name of registrant as specified in its charter)Iowa
            20-2735046(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)10868 189th Street, Council Bluffs, Iowa
      51503(Address
      of principal executive offices)(712) 366-0392(Registrant’s
      telephone number, including area code)__________________________________________________________________(Former
      name, former address and former fiscal year, of changed since last
      report)





Indicate
      by check mark whether the registrant has (1) filed all reports required to
      be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
      during the preceding 12 months (or for such shorter period that the
      registrant was required to file such reports), and (2) has been subject to
      such filing requirements for the past 90 days.  YesRNo£Indicate
      by check mark whether the registrant has submitted electronically and
      posted on its corporate Web site, if any, every Interactive Data File
      required to be submitted and posted pursuant to Rule 405 of Regulation S-T
      (§232.405 of this chapter) during the preceding 12 months (or for such
      shorter period that the registrant was required to submit and post such
      files).  Yes £    No
      RIndicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting
      company. See the definitions of “large accelerated filer,” “accelerated
      filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
      Act.Large
      accelerated
      filer                                           
      £      Accelerated
      filer £      Non-accelerated
      filer £      Smaller
      reporting company RIndicate
      by check mark whether the registrant is a shell company (as defined in
      Rule 12b-2 of the Exchange Act).  Yes£NoRAs
      of May 1, 2009, the issuer had 8,805 Series A Units, 3,334 Series B Units,
      and 1,000 Series C Units issued and
outstanding.


1


TABLE OF CONTENTS





PART
      I—FINANCIAL INFORMATIONItem
      Number
                  Item
      Matter
                  Page
      NumberItem 1.
                  Financial Statements.
                  3Item 2.
                  Management’s Discussion and Analysis of Financial Condition
      and Results of Operations.
                  17Item 4T.
                  Controls and Procedures.
                  23PART
      II—OTHER INFORMATIONItem 1.
                  Legal Proceedings.
                  24Item 2.
                  Unregistered Sales of Equity Securities and Use of
      Proceeds.
                  24Item 3.
                  Defaults Upon Senior Securities.
                  24Item 4.
                  Submission of Matters to a Vote of Security
      Holders
                  24Item 5.
                  Other Information.
                  24Item 6.
                  Exhibits.
                  24Signatures
                  26





2





PART
      I—FINANCIAL INFORMATION





Item
1.                                Unaudited
Financial Statements.





SOUTHWEST
      IOWA RENEWABLE ENERGY, LLCCondensed
      Balance SheetsASSETS
                                    
                                    March
      31,
                                      2009
                                    
                                    September
      30, 2008(Unaudited)Current
      AssetsCash
      and cash equivalents
                                    
                                    $
                                    10,443,895
                                    
                                    
                                    $
                                    6,557,394Restricted
      cash
                                    
                                    
                                    -
                                    
                                    
                                    
                                    3,289,949Accounts
      receivable
                                    
                                    
                                    3,174,623
                                    
                                    
                                    
                                    -Due
      from broker
                                    
                                    
                                    1,585,549
                                    
                                    
                                    
                                    -Inventory
                                    
                                    
                                    7,028,611
                                    
                                    
                                    
                                    -Derivative
      financial instruments
                                    
                                    
                                    477,619
                                    
                                    
                                    
                                    -Prepaid
      expenses and other
                                    
                                    
                                    494,506
                                    
                                    
                                    
                                    43,261Total
      current assets
                                    
                                    
                                    23,204,803
                                    
                                    
                                    
                                    9,890,604Property,
      Plant, and EquipmentLand
                                    
                                    
                                    2,064,090
                                    
                                    
                                    
                                    2,064,090Construction
      in progress
                                    
                                    
                                    -
                                    
                                    
                                    
                                    172,745,278Plant,
      Building and Equipment
                                    
                                    
                                    196,288,431
                                    
                                    
                                    
                                    -Office
      and Other Equipment
                                    
                                    
                                    553,603
                                    
                                    
                                    
                                    389,823Total
      Cost
                                    
                                    
                                    198,906,124
                                    
                                    
                                    
                                    175,199,191Accumulated
      Depreciation
                                    
                                    
                                    (1,406,873
                                    )
                                    
                                    
                                    (37,249
                                    )Net
      property and equipment
                                    
                                    
                                    197,499,251
                                    
                                    
                                    
                                    175,161,942Other
      AssetsFinancing
      costs, net of amortization of $1,069,785 and $497,672
                                    
                                    
                                    2,591,209
                                    
                                    
                                    
                                    3,088,821Total
      Assets
                                    
                                    $
                                    223,295,263
                                    
                                    
                                    $
                                    188,141,367Notes
      to Condensed Unaudited Financial Statements are an integral part of this
      Statement.


3





SOUTHWEST
      IOWA RENEWABLE ENERGY, LLCCondensed
      Balance SheetsLIABILITIES
      AND MEMBERS’ EQUITY
                              
                              March
      31,
                                2009
                              
                              September
      30, 2008(Unaudited)Current
      LiabilitiesAccounts
      payable
                              
                              $
                              6,424,978
                              
                              
                              $
                              6,260,253Retainage
      payable
                              
                              
                              3,800,712
                              
                              
                              
                              7,158,896Accrued
      expenses
                              
                              
                              3,689,136
                              
                              
                              
                              1,672,950Current
      maturities of notes payable
                              
                              
                              5,939,527
                              
                              
                              
                              35,198,440Total
      current liabilities
                              
                              
                              19,854,353
                              
                              
                              
                              50,290,539Long
      Term LiabilitiesNotes
      payable, less current maturities
                              
                              
                              136,218,842
                              
                              
                              
                              63,893,467Other
                              
                              
                              850,000
                              
                              
                              
                              900,000Total
      long term liabilities
                              
                              
                              137,068,842
                              
                              
                              
                              64,793,467Commitments
      and ContingenciesMembers’
      EquityMembers’
      capital
                              
                              
                              76,474,111
                              
                              
                              
                              76,474,111Accumulated
      (deficit)
                              
                              
                              (10,102,043
                              )
                              
                              
                              (3,416,750
                              )Total
      members’ equity
                              
                              
                              66,372,068
                              
                              
                              
                              73,057,361Total
      Liabilities and Members’ Equity
                              
                              $
                              223,295,263
                              
                              
                              $
                              188,141,367Notes
      to Condensed Unaudited Financial Statements are an integral part of this
      Statement.





4








SOUTHWEST
      IOWA RENEWABLE ENERGY, LLCCONDENSED
      STATEMENTS OF OPERATIONSThree
      Months
                                                            Ended
      March 31,2009
                                                            (Unaudited)
                                                          
                                                          
                                                          Three
      Months Ended March 31,2008
                                                            (Unaudited)
                                                          
                                                          
                                                          Six
      Months Ended
                                                            March
      31, 2009
                                                            (Unaudited)
                                                          
                                                          Six
      Months
                                                            Ended
                                                            March
      31, 2008
                                                            (Unaudited)Revenues
                                                          
                                                          $
                                                          11,925,655
                                                          
                                                          
                                                          $
                                                          -
                                                          
                                                          
                                                          $
                                                          11,925,655
                                                          
                                                          $
                                                          -Cost
      of Goods Sold
                                                          
                                                          
                                                          14,340,434
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          14,340,434
                                                          
                                                          
                                                          -Gross
      Margin
                                                          
                                                          
                                                          (2,414,779
                                                          )
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (2,414,779
                                                          )
                                                          
                                                          -Selling,
      General, and Administrative Expenses
                                                          
                                                          
                                                          1,299,356
                                                          
                                                          
                                                          
                                                          705,967
                                                          
                                                          
                                                          
                                                          3,010,985
                                                          
                                                          
                                                          1,304,213Operating
      Income (Loss)
                                                          
                                                          
                                                          (3,714,135
                                                          )
                                                          
                                                          
                                                          (705,967
                                                          )
                                                          
                                                          
                                                          (5,425,764
                                                          )
                                                          
                                                          (1,304,213
                                                          )Other
      Income (Expense)Realized and
      unrealized losses on derivative financial instruments
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (656,973
                                                          )
                                                          
                                                          -Interest
      income
                                                          
                                                          
                                                          19,246
                                                          
                                                          
                                                          
                                                          17,195
                                                          
                                                          
                                                          
                                                          65,380
                                                          
                                                          
                                                          105,226Grant
      revenue
                                                          
                                                          
                                                          49,252
                                                          
                                                          
                                                          
                                                          40,576
                                                          
                                                          
                                                          
                                                          49,252
                                                          
                                                          
                                                          40,576Interest
      expense
                                                          
                                                          
                                                          (728,468
                                                          )
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (728,468
                                                          )
                                                          
                                                          -Miscellaneous
      income
                                                          
                                                          
                                                          5,940
                                                          
                                                          
                                                          
                                                          6,690
                                                          
                                                          
                                                          
                                                          11,280
                                                          
                                                          
                                                          11,725Total
                                                          
                                                          
                                                          (654,030
                                                          )
                                                          
                                                          
                                                          64,461
                                                          
                                                          
                                                          
                                                          (1,259,529
                                                          )
                                                          
                                                          157,527Net
      Loss
                                                          
                                                          $
                                                          (4,368,165
                                                          )
                                                          
                                                          $
                                                          (641,506
                                                          )
                                                          
                                                          $
                                                          (6,685,293
                                                          )
                                                          $
                                                          (1,146,686
                                                          )Weighted
      Average UnitsOutstanding—Basic
      & Diluted
                                                          
                                                          
                                                          13,139
                                                          
                                                          
                                                          
                                                          13,139
                                                          
                                                          
                                                          
                                                          13,139
                                                          
                                                          
                                                          13,139Net (loss)
      per unit –basic & diluted
                                                          
                                                          $
                                                          (332.46
                                                          )
                                                          
                                                          $
                                                          (48.82
                                                          )
                                                          
                                                          $
                                                          (508.81
                                                          )
                                                          $
                                                          (87.27
                                                          )Notes
      to Condensed Unaudited Financial Statements are an integral part of this
      Statement.


5
 TABLE OF CONTENTS





SOUTHWEST
      IOWA RENEWABLE ENERGY, LLCCondensed
      Statements of Cash FlowsSix
      Months Ended
                                                                                                                    March
      31,2009
                                                                                                                  
                                                                                                                  
                                                                                                                  Six
      Months Ended
                                                                                                                    March
      31, 2008(Unaudited)
                                                                                                                  
                                                                                                                  
                                                                                                                  (Unaudited)Cash
      Flows from Operating ActivitiesNet
      (loss)
                                                                                                                  
                                                                                                                  $
                                                                                                                  (6,685,293
                                                                                                                  )
                                                                                                                  
                                                                                                                  $
                                                                                                                  (1,146,686
                                                                                                                  )Adjustments
      to reconcile net income (loss) to net cash (used in)operating
      activities:
                                                                                                                    Depreciation
                                                                                                                  
                                                                                                                  
                                                                                                                  1,369,624
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  6,856Amortization
                                                                                                                  
                                                                                                                  
                                                                                                                  95,428
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  -Other
                                                                                                                  
                                                                                                                  
                                                                                                                  (50,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  -(Increase)
      decrease in current assets:
                                                                                                                    Accounts
      receivable
                                                                                                                  
                                                                                                                  
                                                                                                                  (3,174,623
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  -Inventories
                                                                                                                  
                                                                                                                  
                                                                                                                  (7,028,611
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  43,345Prepaid
      expenses and other
                                                                                                                  
                                                                                                                  
                                                                                                                  (451,245
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  -Derivative
      financial instruments
                                                                                                                  
                                                                                                                  
                                                                                                                  (477,619
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  -Due
      from broker
                                                                                                                  
                                                                                                                  
                                                                                                                  (1,585,549
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  -Increase
      (decrease) in current liabilities:Accounts
      and retainage payable
                                                                                                                  
                                                                                                                  
                                                                                                                  175,836
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  164,722Accrued
      expenses
                                                                                                                  
                                                                                                                  
                                                                                                                  1,129,147
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  78,082Net
      cash (used in) operating activities
                                                                                                                  
                                                                                                                  
                                                                                                                  (16,682,905
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (853,681
                                                                                                                  )Cash
      Flows from Investing ActivitiesPurchase
      of property and equipment
                                                                                                                  
                                                                                                                  
                                                                                                                  (25,243,546
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (47,328,923
                                                                                                                  )Decrease
      in restricted cash
                                                                                                                  
                                                                                                                  
                                                                                                                  3,289,949
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  12,380,217Net
      cash (used in) investing activities
                                                                                                                  
                                                                                                                  
                                                                                                                  (21,953,597
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (34,948,706
                                                                                                                  )Cash
      Flows from Financing ActivitiesPayments
      for financing costs
                                                                                                                  
                                                                                                                  
                                                                                                                  (74,501
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (372,188
                                                                                                                  )Proceeds
      from long term borrowings
                                                                                                                  
                                                                                                                  
                                                                                                                  42,607,504
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  36,412,803Payments
      on long term borrowings
                                                                                                                  
                                                                                                                  
                                                                                                                  (10,000
                                                                                                                  )
                                                                                                                  
                                                                                                                  
                                                                                                                  (1,293,250
                                                                                                                  )Net
      cash provided by financing activities
                                                                                                                  
                                                                                                                  
                                                                                                                  42,523,003
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  34,747,365Net
      increase (decrease) in cash and cash equivalents
                                                                                                                  
                                                                                                                  
                                                                                                                  3,886,501
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  (1,055,022
                                                                                                                  )Cash
      and Equivalents—Beginning of Period
                                                                                                                  
                                                                                                                  
                                                                                                                  6,557,394
                                                                                                                  
                                                                                                                  
                                                                                                                  
                                                                                                                  1,742,940Cash
      and Equivalents—End of Period
                                                                                                                  
                                                                                                                  $
                                                                                                                  10,443,895
                                                                                                                  
                                                                                                                  
                                                                                                                  $
                                                                                                                  687,918Supplemental
      Disclosures of Noncash Operating, InvestingAnd Financing
      ActivitiesConstruction
      in progress included in accounts and retainage payable
                                                                                                                  
                                                                                                                  $
                                                                                                                  9,887,766
                                                                                                                  
                                                                                                                  
                                                                                                                  $
                                                                                                                  18,342,389Interest
      capitalized and included in long term debt and accruals
                                                                                                                  
                                                                                                                  $
                                                                                                                  2,049,643
                                                                                                                  
                                                                                                                  
                                                                                                                  $
                                                                                                                  263,588Cash
      Paid for InterestInterest
                                                                                                                  
                                                                                                                  $
                                                                                                                  1,022,905
                                                                                                                  
                                                                                                                  
                                                                                                                  $
                                                                                                                  -




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






6
 TABLE OF CONTENTS




SOUTHWEST IOWA RENEWABLE ENERGY,
LLC






March 31,
2009




Note
1:  Nature of Business




Southwest
Iowa Renewable Energy, LLC (the “Company”),
located in Council Bluffs, Iowa, was formed in March, 2005 to construct and
operate a 110 million gallon capacity ethanol plant.  As of March 1,
2009, the Company began producing ethanol and ran at an average of approximately
70% capacity while the start up testing process continued.  The
Company sells its ethanol, modified wet distiller’s grains with solubles, and
corn syrup in the continental United States.  The Company sells its
dried distiller’s grains with solubles in the continental United States and
Mexico.




Note
2:  Summary of Significant Accounting Policies




Basis
of presentation


The
balance sheet as of September 30, 2008 was derived from the Company’s audited
balance as of that date.  The accompanying financial statements as of
and for the three and six months ended March 31, 2009 and March 31, 2008 are
unaudited and reflect all adjustments (consisting only of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
presentation of the financial position and operating results for the interim
periods.  These unaudited financial statements and notes should be
read in conjunction with the audited financial statements and notes thereto, for
the year ended September 30, 2008 contained in the Company’s Annual Report on
Form 10-K.  The results for the interim periods presented are not
necessarily indicative of the results for the entire year.




Use
of Estimates


The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from these
estimates.




Concentration
of Credit Risk


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




Revenue
Recognition


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




Accounts
Receivable


Trade
accounts receivable are recorded at original invoice amounts less an estimate
made for doubtful receivables based on a review of all outstanding amounts on a
monthly basis.  Management determines the allowance for doubtful






7
 TABLE OF CONTENTS




Southwest Iowa Southwest Iowa
Renewable Energy, LLC




Notes
to Unaudited Financial Statements




Note
2:  Summary of Significant Accounting Policies
(continued)




accounts
by regularly evaluating individual customer receivables and considering
customers’ financial condition, credit history and current economic
conditions.  Receivables are written off when deemed
uncollectible.  Recoveries of receivables written off are recorded
when received.




Derivative
Financial Instruments


The
Company enters into derivative contracts to hedge the Company’s exposure to
price risk related to forecasted corn needs and forward corn purchase
contracts.  The Company uses cash, futures and options contracts to
hedge changes to the commodity prices of corn and ethanol.  All the
derivative contracts are recognized on the balance sheet at their fair
value.  The Company does not enter into these derivative financial
instruments for trading or speculative purposes, nor does it designate these
contracts as hedges for accounting purposes, pursuant to the requirements of
Statement of Financial Accounting Standards (“SFAS”), promulgated by the Financial Accounting
Standards Board (“FASB”) No. 133,
Accounting for Derivative Instruments and Hedging
Activities.  Accordingly, any realized or unrealized gain or loss
related to these derivative instruments was recorded in the statement of
operations as a component of non-operating income until the plant was
operational.  Once operational, the gains or losses are included in
revenue if the contracts relate to ethanol and cost of revenue if the contracts
relate to corn.  During the three and six months ended March 31, 2009,
the Company recorded a combined realized and unrealized gain of $1,524,424 as a
component cost of revenue and a $77,406 gain as a component of
revenue.  In addition, the Company recorded a combined realized and
unrealized loss of ($656,973) for the six months ended March 31, 2009 as a
component of non-operating income.  There were no realized or
unrealized gains or losses during the three or six months ended March 31,
2008.  The derivative financial instruments asset of $477,619 consists
of 2,300,000 bushels of corn and 4,536,000 gallons of ethanol at March 31,
2009.




Inventory


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




Property
and Equipment


Property
and equipment are carried at cost less accumulated depreciation computed using
the straight-line method over the estimated useful lives:






Buildings
            40 YearsProcess
      Equipment
            10 YearsOffice
      Equipment
            3-7 Years






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




Long-lived
assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be
recoverable.   An impairment loss would be recognized when
estimated undiscounted future cash flows from operations are less than the
carrying value of the asset group.  An impairment loss would be
measured by the amount by which the carrying value of the asset exceeds the fair
value of the asset.  In accordance with Company policies, management
has evaluated the plant for possible impairment based on projected future cash
flows from operations.  Management has determined that its projected
future cash flows from operations exceed the carrying value of the plant and
that no impairment exists at March 31, 2009.




Income
Taxes


The
Company has elected to be treated as a partnership for federal and state income
tax purposes and generally does not






8
 TABLE OF CONTENTS




Southwest Iowa Renewable Energy,
LLC




Notes
to Unaudited Financial Statements





Note
2:  Summary of Significant Accounting Policies
(continued)




incur
income taxes.  Instead, the Company’s earnings and losses are included
in the income tax returns of the members. Therefore,
no provision or liability for federal or state income taxes has been included in
these financial statements.




Net
(loss) per unit


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




Note
3:  Inventory




Inventory
is comprised of the following at:




March 31, 2009
                                                                        
                                                                        
                                                                        September 30, 2008Raw
      materials - corn
                                                                        
                                                                        $
                                                                        3,800,683
                                                                        
                                                                        
                                                                        $
                                                                        -Supplies
      and chemicals
                                                                        
                                                                        
                                                                        890,220
                                                                        
                                                                        
                                                                        
                                                                        -Work
      in process
                                                                        
                                                                        
                                                                        1,108,118
                                                                        
                                                                        
                                                                        
                                                                        -Finished
      goods
                                                                        
                                                                        
                                                                        1,229,590
                                                                        
                                                                        
                                                                        
                                                                        -Total
                                                                        
                                                                        $
                                                                        7,028,611
                                                                        
                                                                        
                                                                        $
                                                                        -


Note
4:                      Members’
Equity




The
Company was formed on March 28, 2005 to have a perpetual life with no limit on
the number of authorized units.  The Company was initially capitalized
by an aggregate of $570,000 in exchange for 285 Series A membership
units.  In December 2005, the Company issued an additional 360 Series
A membership units in exchange for $1,080,000.  In March 2006, the
Company completed a private placement offering with one membership unit at
$6,000 being at risk and the remaining investment held in escrow until closing
of the offering.  The Company approved and issued 687 Series A and one
Series B at risk membership units at $6,000 per unit for total proceeds of
$4,128,000.  The offering was closed in November 2006 with the
issuance of 7,313 Series A membership units, 3,333 Series B membership units and
1,000 Series C membership units for total proceeds of $69,876,000.




In May
2007, 25 Series A membership units were issued to a development group for its
efforts to develop the project.  In addition, in May 2007, 135 Series
A membership units were issued to a related party for its organizational
services.


At March
31, 2009 and September 30, 2008 outstanding member units were:








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




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




The
Company entered into a Series C Unit Issuance Agreement (the “Series C Agreement”)
with ICM, Inc. (“ICM”) and a Series E
Unit Issuance Agreement (the “Series E Agreement”,
together with the Series C Agreement, the “Unit






9
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Southwest
Iowa Renewable Energy, LLC




Notes
to Unaudited Financial Statements





Note
4: Members' Equity (continued)




Issuance Agreements”)
with Bunge N.A. Holdings, Inc., an affiliate of Bunge (“Holdings”) in
connection with ICM’s Bridge Loan
Payment




Under the
Series C Agreement, if ICM makes a Bridge Loan Payment, the Company will
immediately issue Series C Units to ICM based on a Unit price that is equal to
the lesser of $3,000 or one half (1/2) of the lowest purchase price paid by any
party for a Unit who acquired (or who has entered into any agreement, instrument
or document to acquire) such Unit as part of any private placement after the
date of the Series C Agreement but prior to the date of any Bridge Loan Payment
made by ICM.  The Series C Agreement further provides that ICM will
have the right to purchase its pro-rata share of any Units issued by the Company
at any time after the date of the Series C Agreement.




Under the
Series E Agreement, if Holdings makes a Bridge Loan Payment, the Company will
immediately issue Series E Units to Holdings based on a Unit price that is equal
to the lesser of $3,000 or one half (1/2) of the lowest purchase price paid by
any party for a Unit who acquired (or who has entered into any agreement,
instrument or document to acquire) such Unit as part of any private placement
after the date of the Series E Agreement but prior to the date of any Bridge
Loan Payment made by Holdings.  The Series E Agreement further
provides that Holdings will have the right to purchase its pro-rata share of any
Units issued by the Company at any time after the date of the Series E
Agreement.




Note
5:                      Construction
and Revolving Loan/Credit Agreements




The
Company entered into a Credit Agreement (the “Credit Agreement”)
with AgStar Financial Services, PCA (“AgStar”) for
$126,000,000 senior secured debt, consisting of a $111,000,000 construction loan
and a $15,000,000 revolving line of credit.  The Credit Agreement also
provides for a loan up to $1,000,000 on a revolving basis (the “Swingline Revolver”).  Borrowings
under the construction loan include a variable interest rate based on LIBOR plus
3.65% for each advance under the Credit Agreement.  Upon acceptance of
the completion certificate, the construction loan may be segmented into two
credit facilities, an amortizing term facility of $101,000,000 and a revolving
term facility of $10,000,000.  Upon conversion, the Company has the
option of converting 50% of the term note into fixed rate loans at the lender’s
bonds rate plus 3.25%.  The portion of the term loan not fixed and the
term revolving line of credit will accrue interest equal to LIBOR plus
3.45%.  The Credit Agreement and Revolving Line of Credit require the
maintenance of certain financial and nonfinancial
covenants.  Borrowings under the Credit Agreement are collateralized
by substantially all of the Company’s assets.  The
construction/revolving term credit facility requires monthly principal payments
starting the seventh month following conversion of the construction loan to a
term loan.  The conversion will occur on a date agreed with AgStar on
or after the date a completion certificate is issued.  The loan will
be amortized over 114 months and will mature five years after the conversion
date.   The revolving term credit agreement expires December 18,
2009.  Borrowings are subject to borrowing base restrictions, and the
Credit Agreement includes certain prepayment penalties.




In
December 2008, the Company executed a second amendment to the Credit Agreement
that granted the Company early access to the seasonal Revolving Line of Credit
(as defined in the Credit Agreement). A borrowing base limitation is included in
the agreement that limits the availability of funds to the lesser of $15,000,000
or 75 percent of eligible accounts receivable and eligible
inventory.  Letters of credit can be drawn on the seasonal line of
credit and cannot






10
 TABLE OF CONTENTS




Southwest
Iowa Renewable Energy, LLC




Notes
to Unaudited Financial Statements




Note
5:  Construction and Revolving Loan/Credit Agreements
(continued)




exceed
$5,000,000 in the aggregate.  Additionally, the Company caused AgStar
to issue a Letter of Credit in favor of MidAmerican Energy in the amount of
$3,300,000. The Letter of Credit was issued against the Seasonal Revolving Line
of Credit.




As of
March 31, 2009, the outstanding balance under the Credit Agreement was
approximately $106,769,222.  In addition to all other payments due
under the Credit Agreement, the Company also agreed to pay, beginning at the end
of the third fiscal quarter after the Conversion Date (as defined in the Credit
Agreement), an amount equal to 65% of the Company’s Excess Cash Flow (as defined
in the Credit Agreement), up to a total of $4,000,000 per year, and $16,000,000
over the term of the Credit Agreement.




On March
7, 2008, the Company amended the terms of the Credit Agreement and obtained a
bridge loan in the maximum principal amount of $36,000,000 (the “Bridge
Loan”).  On March 1, 2009, the Company extended the terms of
the Bridge Loan for a period of eighteen months and the maximum principal amount
was increased to $36,600,000.  The Bridge Loan debt is secured by a
letter of credit and a money market account, described below.




Holdings
pledged a money market account in the amount equal to 76% of the maximum
principal amount of the Bridge Loan in favor of the Bridge Lender (the “Collateral”), and ICM
caused its lender to issue a letter of credit in the amount equal to 24% of the
maximum principal amount of the Bridge Loan in favor of the Bridge Lender (the
“LC”).  The
ICM LC expires on September 1, 2010, and the Bridge Lender will only draw
against the LC or Collateral to the extent that the Company defaults under the
Bridge Loan or if the Company has not repaid the Bridge Loan in full by
September 1, 2010.  In the event the Bridge Lender draws against the
LC or the Collateral, the amounts drawn will be in proportion to Holdings’
affiliate’s (Bunge’s) and ICM’s respective ownership of the Company’s Units
which are not Series A—76% and 24%, respectively.  As the Company
repays the principal of the Bridge Loan, the LC’s and the Collateral’s stated
amounts will automatically be reduced in the same proportion.  As of
March 31, 2009, there was an outstanding principal and interest balance of
approximately $35,230,814 under the Bridge Loan.




In
connection with the Bridge Loan, the Company entered into the Unit Issuance
Agreements, which govern the Company’s repayment of Holdings and/or ICM, as the
case may be, in the event the LC or the Collateral are drawn upon (see Note
4).




Note
6:                      Notes
Payable




Notes
payable consists of the following as of March 31, 2009 and September 30,
2008:














11
 TABLE OF CONTENTS




Southwest
Iowa Renewable Energy, LLC




Notes
to Unaudited Financial Statements





Note
6:  Notes Payable (continued)





March
      31,
                                                              2009
                                                            
                                                            
                                                            September
      30, 2008$200,000
      Note payable to Iowa Department Economic Development (“IDED”) non-interest bearing monthly
      payments of $1,667 due through maturity date of March 2012 on
      non-forgivable portion (A)
                                                            
                                                            $
                                                            158,333
                                                            
                                                            
                                                            $
                                                            168,333Bridge
      Loan bearing interest at LIBOR plus 1.50% with a floor of 3.00 % (2.01_%
      at March 31, 2009) through maturity on September 1, 2010 secured by a
      letter of credit and collateral of a money market account as described in
      Note 5.
                                                            
                                                            
                                                            35,230,814
                                                            
                                                            
                                                            
                                                            34,761,857Construction
      loan and revolving line of credit payable to AgStar bearing interest at
      LIBOR plus 3.65% (4.15% at March 31, 2009).  See maturity
      discussed in Note 5.
                                                            
                                                            
                                                            103,769,222
                                                            
                                                            
                                                            
                                                            64,161,717Revolving
      line of credit payable to AgStar bearing interest at LIBOR plus 3.45%
      (3.95% at March 31, 2009).  See maturity discussed in Note
      5.
                                                            
                                                            
                                                            3,000,000
                                                            
                                                            
                                                            
                                                            -142,158,369
                                                            
                                                            
                                                            
                                                            99,091,907Less
      current maturities
                                                            
                                                            
                                                            (5,939,527
                                                            )
                                                            
                                                            
                                                            (35,198,440
                                                            )$
                                                            136,218,842
                                                            
                                                            
                                                            $
                                                            63,893,467




(A) The
IDED debt is comprised of two components under the Master Contract (the “Master Contract”)
between the Company and the IDED.  A $100,000 loan is non
interest-bearing and due in monthly payments of $1,667 beginning April 2007,
with a final payment of $1,667 due March 2012; and a $100,000 forgivable
loan.  Both notes under the Master Contract are collateralized by
substantially all of the Company’s assets and subordinate to the Credit
Agreement discussed in Note 5.  The $100,000 forgivable loan may be
forgiven upon IDED’s confirmation of the creation and retention of qualifying
jobs under the Master Contract.  If the Company does not meet the
requirements of the Master Contract, the note is due on an agreed upon payment
schedule.




Note
7:  Fair Value Measurement




Effective
October 1, 2008, the Company adopted FASB Statement No. 157, Fair Value
Measurements(“SFAS No. 157”), which
provides a framework for measuring fair value under generally accepted
accounting principles.  SFAS No. 157 applies to all financial
instruments that are being measured and reported on a fair value
basis.  There were no material financial impacts to the Company’s
adoption of SFAS No. 157.




As
defined in SFAS No. 157, fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date.  In determining fair
value, the Company uses various methods including market, income and cost
approaches.  Based on these approaches, the Company often utilizes
certain assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk and/or the risks inherent in the
inputs to the valuation technique.  These inputs can be readily
observable, market-corroborated, or generally unobservable
inputs.  The Company utilizes valuation techniques that maximize
the






12
 TABLE OF CONTENTS




Southwest Iowa Renewable Energy,
LLC




Notes
to Unaudited Financial Statements





Note
7:                      Fair
Value Measurement (continued)




use of
observable inputs and minimize the use of unobservable inputs.  Based
on the observation of the inputs used in the valuation techniques, the Company
is required to provide the following information according to the fair value
hierarchy.  The fair value hierarchy ranks the quality and reliability
of the information used to determine fair values.  Financial assets
and liabilities carried at fair value will be classified and disclosed in one of
the following three categories:




Level
1 -      Valuations for assets and liabilities
traded in active markets from readily available pricing sources for


Market
transactions involving identical assets or liabilities.




Level
2 -      Valuations for assets and liabilities
traded in less active dealer or broker markets.  Valuations
are


obtained
from third-party pricing services for identical or similar assets or
liabilities.




Level
3-       Valuations incorporate certain
assumptions and projections in determining the fair value assigned
to


such
assets or liabilities.




A
description of the valuation methodologies used for instruments measured at fair
value, including the general classification of such instruments pursuant to the
valuation hierarchy, is set forth below.  These valuation
methodologies were applied to all of the Company’s financial assets and
financial liabilities carried at fair value.




The
following table summarizes financial liabilities measured at fair value on a
recurring basis as of March 31, 2009, segregated by the level of the valuation
inputs within the fair
value hierarchy utilized to measure fair value:




Derivative financial
statements.  Commodity futures contracts are reported at fair
value utilizing Level 1 inputs. For these contracts, the Company obtains fair
value measurements from an independent pricing service.  The fair
value measurements consider observable data that may include dealer quotes and
live trading levels from the CME market.  Ethanol contracts are
reported at fair value utilizing Level 2 inputs from third-party pricing
services.




Total
                                  
                                  
                                  Level
      1
                                  
                                  
                                  Level
      2
                                  
                                  
                                  Level
      3Asset,
      derivative financial instruments-              Corn
                                  
                                  $
                                  400,
      213
                                  
                                  
                                  $
                                  400,213
                                  
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  --              Ethanol
                                  
                                  
                                  77, 406
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  77,406
                                  
                                  
                                  
                                  -$
                                  477,619
                                  
                                  
                                  $
                                  400,213
                                  
                                  
                                  $
                                  0
                                  
                                  
                                  $
                                  -




Note
8:                      
Related-Party Transactions




In
September, 2006, the Company entered into a design-build agreement with ICM, a
related party and a member of the Company, for a lump-sum contract price of
$118,000,000 (the “ICM
Contract”).  Under the ICM Contract, the Company was required
to make a down payment of 10% of the original contract price of $2,000,000,
which was paid at the delivery of the letter of intent, an additional $2,000,000
was paid in November, 2006 when the Company broke escrow and the remaining
$7,800,000 of the 10% was paid in January, 2007.  Monthly applications
are submitted for work performed, subject to retainage.  As of March
31, 2009 and 2008, the Company incurred approximately $147,463,000 and
$95,141,000of
construction in progress, respectively, under the ICM
Contract.   A total of $3,686,568 is included in retainage
payable as of March 31, 2009.




The
Company entered into an agreement in October, 2006 with Bunge, a related party
and a member of the Company, to purchase all of the distiller’s grains with
solubles (“DGS”) produced by the plant (the
“DGS Agreement”).  Bunge agreed
to pay a sales price less transportation costs, rail lease charge and a fixed
rate marketing fee for the DGS produced.  The DGS Agreement commenced
when the Company began producing DGS and continues for ten years, when it will
automatically renew for successive three-year terms unless a 180-day written
notice is given of either




13
 TABLE OF CONTENTS




Southwest
Iowa Renewable Energy, LLC




Notes
to Unaudited Financial Statements





Note
8: Related Transactions (continued)




party’s
election not to renew before the expiration of the initial term or the
then-current renewal term.  The Company is required to pay a minimum
annual marketing fee of $150,000.  Beginning on the third anniversary
of the effective date of the DGS Agreement and thereafter, the annual minimum
amount and the purchase price may be adjusted.  Either party may
terminate the agreement as provided in the DGS Agreement.   The
Company has incurred approximately $57,219 of marketing expenses during the
three and six months ended March 31, 2009 and there were no expenses incurred
for the three and six months ended March 31, 2008.




In
October, 2006, the Company entered into an agreement with a company in which
Bunge holds a membership interest, AGRI-Bunge, LLC, to procure all grain
required for the Company’s ethanol plant.  The Company agreed to pay
an agency fee mutually agreed to by both parties for corn delivered by truck or
rail, with a minimum annual fee. On December 15, 2008, this agreement was
temporarily suspended and replaced with a grain supply agreement between the
parties.  The revised agreement has a term of ten years and
automatically renews for successive three-year terms unless a 180-day written
notice is given by either party.  The Company agreed to pay an annual
minimum fee of $675,000 under the revised agreement.  Expenses for the
three and six months ended March 31, 2009 were $66,000; this amount is included
in accrued expenses at March 31, 2009. There were no fees incurred for the three
and six months ended March 31, 2009.




On
January 30, 2008, the Company and Bunge entered into a Support Services
Agreement (the “Support Services
Agreement”), under which Bunge agreed to provide engineering support to
the project, provide reports to AgStar and assist the Company with requests by
the lender’s agent.  The Company paid, in addition to Bunge’s out of
pocket expenses, an hourly fee of $95 for such services.  The Support
Services Agreement terminated on December 31, 2008.  Expenses for the
three and six months ended March 31, 2009 were approximately
$21,000.  There were no fees incurred for the three and six months
ended March 31, 2008.




In
December, 2008, the Company and Bunge entered into other various agreements.
Under a Lease Agreement (the “Lease
Agreement”), the Company has leased from Bunge a grain elevator located
in Council Bluffs, Iowa, for approximately $67,000 per
month.  Expenses for the six month period ended March 31, 2009 and
2008 were $233,334.  There were no expenses incurred for the three and
six months ended March 31, 2008. In connection with the Lease Agreement, the
Company entered into a grain purchase agreement, under which the Company agreed
to purchase the grain inventory at the grain elevator and the grain inventory
located in the Company’s on-site storage facility.  The Company
purchased approximately 1,900,000 bushels of corn at an approximate market value
of $6,980,000.




Under an
Ethanol Purchase Agreement (the “Ethanol Purchase
Agreement”), the Company has agreed to sell Bunge all of the ethanol
produced at the ethanol plant, and Bunge has agreed to purchase the same, up to
the ethanol plant’s nameplate capacity of 110,000,000 gallons a
year.  The Company will pay Bunge a per-gallon fee for ethanol sold by
Bunge, subject to a minimum annual fee of $750,000 and adjusted according to
specified indexes after three years.  The initial term of the
agreement, which will commence in August, 2009, upon the termination of the
Lansing Ethanol Services, LLC agreement, is three years and it will
automatically renew for successive three-year terms unless one party provides
the other with notice of their election to terminate 180 days prior to the end
of the term.  The Company has not incurred any expenses relating to
this agreement as of March 31, 2009.




Under a
Risk Management Services Agreement effective January 1, 2009, Bunge has agreed
to provide the Company with assistance in managing its commodity price risks for
a quarterly fee of $75,000.  The agreement has an initial term of
three years and will automatically renew for successive three year terms, unless
one party provides the other notice of their election to terminate 180 days
prior to the end of the term.  Expenses for the three and six months
ended March 31, 2009 were $75,000.  There were no expenses incurred
for the three and six months ended March 31, 2008.




As of
March 31, 2009, the Company has several corn cash contracts with Agri-Bunge,
LLC, a party affiliated with Bunge, amounting to approximately 1,567,105
bushels, for a commitment of $6,273,887, and several basis contracts
representing approximately 405,000 bushels of corn.  The contracts
mature on various dates through December, 2010.






14
 TABLE OF CONTENTS




Southwest
Iowa Renewable Energy, LLC




Notes
to Unaudited Financial Statements





Note
8: Related Transactions (continued)




In June,
2007, the Company entered an operating lease agreement with Bunge for the lease
of 320 ethanol tank cars and 300 distillers' grain
cars.  The  lease  began in January 2009,
continues  for  a  term  of  ten  years,  and  terminates  upon  the
termination  of the final car lease.  The lease calls for
monthly payments of approximately $450,000.  Expenses for the three
and six months ended March 31, 2009 were approximately $1,037,000.  Of
this total, approximately $450,000 is included in accounts
payable.  There were no expenses incurred for the three and six months
ended March 31, 2008.




In March,
2009, the Company entered into a temporary management agreement with Bunge to
provide an interim President / CEO.  The agreement provides for
reimbursement in the amount of $150,000 plus monthly
expenses.   Expenses for the three and six months ended March 31,
2009 were approximately $3,800 and are in included in accrued
expenses.  There were no expenses incurred for the three and six
months ended March 31, 2008.




In
connection with obtaining the Bridge Loan, the Company entered into the Unit
Issuance Agreements, as described above in Note 4.




Note
9:                 Commitments




The total
cost of the project, including the construction of the ethanol plant and
start-up expenses, is expected to be approximately $225,000,000.  The
Company funded the development of the ethanol plant by using the total equity
raised of $75,654,000, long term financing of approximately $126,000,000 under
the Credit Agreement and bridge financing of approximately $36,600,000 under the
Bridge Loan.




In
November, 2006, the Company entered into an agreement with an unrelated party
for marketing, selling and distributing all of the ethanol produced by the
Company.  The Company will pay a fee mutually agreed to by both
parties for each gallon of ethanol sold.  The Company gave notice that
the contract will be terminated in August, 2009. There are no penalties involved
with terminating this agreement.  As of March 31, 2009, the amounts
due under this agreement total $17,000.




The
Company has entered into a steam contract with an unrelated party dated January
22, 2007. The agreement was amended in October, 2008 to modify the circumstances
under which the steam service can be interrupted.  The vendor agreed
to provide the steam required by the Company, up to 475,000 pounds per hour. The
Company agreed to pay a net energy rate for all steam provided under the
contract and a monthly demand charge for condensate not returned (steam
delivered less the condensation returned). The net energy rate is set for the
first three years then adjusted each year beginning on the third anniversary
date. However, effective January 1, 2009, the agreement was amended again to
provide that the net steam rate under the contract shall be at a rate that is
approximately 10 percent higher, until the non-condensing steam
turbine-generator system is in service, and to modify certain provisions
relating to the Company's obligation to provide a letter of credit to the
unrelated party.  The steam contract will remain in effect for ten
years from January 1, 2009.  Expenses for the three and six months
ended March 31, 2009 were $1,202,433.  There were no expenses incurred
for the three and six months ended March 31, 2008.




In April,
2008 the Company entered into a Firm Throughput Service Agreement with a natural
gas supplier, an unrelated party, under which the vendor agreed to provide the
gas required by the Company, up to 900 Dth per day. The Company agreed to pay
the maximum reservation and commodity rates as provided under the vendor’s FERC
Gas Tariff as revised from time to time, as well as other additional charges.
The agreement specifies an in-service date of October 1, 2008, and the term of
the agreement is seven years.  Expenses for the three and six months
ended March 31, 2009 were $2,600 and $55,000,
respectively.   There were no expenses incurred for the three and
six months ended March 31, 2008.




In March,
2008, the Company entered into the Unit Issuance Agreements, pursuant to which
the Company agreed to






15
 TABLE OF CONTENTS




Southwest
Iowa Renewable Energy, LLC




Notes
to Unaudited Financial Statements





Note
9: Commitments (continued)




pay Bunge
(with Bunge’s rights subsequently assigned to Holdings) and ICM each a fee for
the issuances of their respective (the original letter of credit issued by Bunge
was converted to posting of the Collateral by Holdings in March, 2009) LCs equal
to 6% per annum of the undrawn face amount of their respective LCs for a total
annual amount of approximately $2,160,000.  For the three and six
months ended March 31, 2009, the Company recorded $552,000 and $1,104,000,
respectively,for
interest related to the Unit Issuance Agreements.  No payments have
been made under these agreements as of March 31, 2009.  For the three
and six months ended March 31, 2008, the Company capitalized $144,000,
respectively, for interest related to the Unit Issuance Agreements.




In
January, 2007, the Company entered into an agreement with Iowa Interstate
Railroad, LTD to provide the transportation of the Company’s commodities from
Council Bluffs, Iowa to an agreed upon customer location.   The
agreement commences on the date that the contract is approved by the Surface
Transportation Board, then it continues for five years and will automatically
renew for additional one year periods unless cancelled by either
party.   The Company agreed to pay a mutually agreed upon rate
per car.  Expenses for the three and six month ended March 31, 2009
were approximately $84,000, and approximately $58,000 was included in accounts
payable.  There were no expenses for the three and six months ended
March 31, 2008.




In
August, 2008, the Company entered into an agreement with an unrelated party
which establishes terms governing the Company’s purchase of natural
gas.  The agreement commenced in August, 2008 and has a term of two
years.  The Company has paid $441,000 for the three and six months
ended March 31, 2009.




The
Company leases certain equipment, vehicles, and operating facilities under
non-cancellable operating leases that expire on various dates through
2017.  The future minimum lease payments required under these leases
are approximately $5,200,000 in 2009, $6,300,000 in 2010, $6,300,000 in 2011,
$6,300,000 in 2012, and $33,100,000 thereafter.  Rent expense related
to operating leases for the three and six months ended March 31, 2009 was
$33,000 and $1,400,000, respectively.   Rent expense related to
operating leases for the three and six months ended March 31, 2008 were $25,000
and $50,000, respectively.

























16
 TABLE OF CONTENTS


Item
2.     Management's Discussion and
Analysis or Plan of Operation.





Forward
Looking Statements





This
report contains forward-looking statements that involve future events, our
future performance and our expected future operations and actions.  In
some cases you can
identify  forward-looking  statements  by the use
of words such as “may,” “should,” “anticipate,” “believe,” “expect,” “plan,”
“future,” “intend,” “could,” “estimate,” “predict,” “hope,” “potential,”
“continue,” or the negative of these terms or other similar
expressions.  These forward-looking statements are only our
predictions and involve numerous assumptions, risks and
uncertainties.  Our actual results or actions may differ materially
from these forward-looking statements for many reasons, including the following
factors:





·
            Overcapacity
      in the ethanol industry;


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


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


·
            Our
      ability to obtain the debt and equity financing necessary to finish
      completion and start-up of, and operate, our
  plant;


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


·
            Construction
      delays and technical difficulties in completion of the
    plant;


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


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


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


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


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


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


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


·
            Changes
      in interest rates and lending conditions;
and


·
            Results
      of our hedging strategies.





Our
actual results or actions could and likely will differ materially from those
anticipated in the forward-looking statements for many reasons, including the
reasons described in this report.  We are not under any duty to update
the forward-looking statements contained in this report. We cannot guarantee
future results, levels of activity, performance or achievements. We caution you
not to put undue reliance on any forward-looking statements, which speak only as
of the date of this report.  You should  read
this  report and the  documents  that we
reference  in this  report and have filed
as  exhibits  completely  and with the
understanding  that our actual future  results may be
materially  different from what we currently expect. We qualify all of
our forward-looking statements by these cautionary statements.





Overview,
Status and Recent Developments





Southwest
Iowa Renewable Energy, LLC (“we,” “us,” or the “Company”) is an Iowa
limited liability company formed to construct and operate a 110 million gallon
per year dry mill corn-based ethanol plant near Council Bluffs, Iowa (the “Facility”).  We
expect the Facility to process approximately 39.3 million bushels of corn per
year into 110 million gallons of denatured fuel grade ethanol, 300,000 tons of
distillers’ dry grains with soluble and 50,000 tons of wet distillers’ grains
with soluble.  The fuel grade ethanol will be sold in markets
throughout the United States and distillers' grains sold in markets throughout
the United States and internationally.  The Facility became
operational on March 1, 2009; we began commissioning the Facility in April,
2009.





In March,
2009, Mark Drake voluntarily resigned his employment with us as General Manager,
President and Chief Executive Officer.  We have entered into an
agreement with Bunge North America, Inc. (a wholly-owned subsidiary of Bunge
Limited, a publicly-traded, global agribusiness company) (“Bunge”) under which
Bunge agreed


17
 TABLE OF CONTENTS


to
provide the services of James M. “Mickey” Lay as interim General Manager,
President and Chief Executive Officer.  We are presently conducting a
search for a permanent replacement for Mr. Drake.








18
 TABLE OF CONTENTS


Results
of Operations


During
the fiscal quarter ended March 31, 2009, we transitioned from a development
stage company to an operational company.  The following table shows
the results of operations and states revenues, cost of goods sold, operating
expenses and other items on a percentage of revenue basis.  Because we
did not begin operating the plant until mid-February 2009, we do not have
comparable data for the three months ended March 31, 2008.  In addition,
comparison information for the six months ended March 31, 2009 would not be
relevant.
 
 Three
      Months Ended March 31, 2009
                                            (unaudited)Income
      Statement Data
                                          
                                          Amounts
                                          
                                          
                                          %
      of Revenue
                                          GALRevenues
                                          
                                          
                                          
                                          11,925,655
                                          
                                          
                                          
                                          100
                                          %
                                          1.75Cost
      of Goods Sold
                                          
                                          
                                          
                                          14,340,434
                                          
                                          
                                          
                                          120
                                          %
                                          2.09Gross
      Margin
                                          
                                          
                                          
                                          (2,414,779
                                          )
                                          
                                          
                                          (20
                                          %)
                                          (0.35)Selling,
      General and Administrative Expenses
                                          
                                          
                                          
                                          1,299,356
                                          
                                          
                                          
                                          11
                                          %
                                          0.19Other (Expense)
                                          
                                          
                                          
                                          (654,030
                                          )
                                          
                                          
                                          (5
                                          %)
                                          (0.10)Net
      Loss
                                          
                                          
                                          
                                          (4,368,165
                                          )
                                          
                                          
                                          (37
                                          %)
                                          (0.64)
 
 Because
we did not begin operations of the plant until mid-February and we were
operating at a reduced capacity of approximately 70% during this period, the
losses that we incurred are not indicative any losses or profits that we
might achieve when the plant is running at full capacity.
 
 Revenues
 
 Our
revenue from operations is derived from two primary sources: sales of ethanol
and distillers grains.  During the quarter ended March 31, 2009, we
earned approximately of 84% of our revenue from the sale of ethanol and 16% of
our revenue from the sale of distillers grains.
 
 Cost
of Goods Sold
 
 Our cost
of goods sold as a percentage of our revenues was 120% for the three months
ended March 31, 2009.  Our two primary costs of producing ethanol and
distillers grains are corn and energy, with steam as our primary energy source
and to a lesser extent, natural gas.  Corn prices remained relatively
steady during the quarter ended March 31, 2009.  Our average price of
corn was approximately $3.90 per bushel and our average steam cost was $4.30 per
MMbtu.  Because we did not operate at 100% capacity during the period,
our fixed costs per gallon of production were higher than they are anticipated
to be in the future.
 
 Operating
Expense
 
 Our operating
expenses as a percentage of revenues were 11% for the three month period ended
March 31, 2009.  We expect our operating expenses to remain steady
throughout the remainder of the 2009 fiscal year.  However, as we
achieve and maintain a consistent level of production, these fixed costs per
gallon of ethanol produced will decrease.  Operating expenses include
salaries and benefits of administrative employees, professional fees and other
general administrative costs.  Our selling, general and administrative
expenses for the three month period ended March 31, 2009 were $1,300,000, as
compared to $700,000 for the three month period ended March 31,
2008.
 
 Other (Expense)
 
 Our other
expenses for the three month period ended March 31, 2009 were approximately 5%
of our revenues.  The majority of this expense was primarily the
result of the implementation of accounting principles applicable to an operating
entity as we transitioned out of the developmental stage.  The
accounting principle implemented in the quarter ended March 31, 2009 which
resulted in the most significant increase was the expensing of interest—as
compared to the capitalization of our construction loan interest in our project
costs in prior periods.
 
 Net
(Loss)
 
 Our net
loss from operations for the three months ended March 31, 2009 was approximately
37% of our revenues.  Our net loss for the three month period ended
March 31, 2009 was primarily the result of negative margins, fixed costs and
interest expense.


Liquidity
and Capital Resources
 
 We have a
$126,000,000 credit facility (as amended, the “Credit Agreement”)
with AgStar Financial Services, PCA (“AgStar”), as agent
for a syndicate group of lenders (the “Lenders”), and a
$36,600,000 bridge loan (the “Bridge Loan”) with
Commerce Bank, N.A. (the “Bridge
Lender”).  As part of the Bridge Loan arrangements, which we
amended in March 2009, we entered into certain agreements with our key equity
holders and operational partners, ICM, Inc. (“ICM”) and Bunge North
America, Inc. (“Bunge”).  The
Bridge Loan matures on September 1, 2010, and in connection with it, we have
made the following arrangements: (i) Bunge N.A. Holdings, Inc. (“Bunge Holdings”), as
successor to Bunge, has pledged a money market account to secure the repayment
of a portion of the Bridge Loan, (ii) ICM caused its lender to issue a letter of
credit in favor of the Bridge Lender to secure the repayment of a portion of the
Bridge Loan, (iii) we entered into a Series C Unit Issuance Agreement with ICM
under which, among other things, we agreed to issue Series C Units to ICM for
any Bridge Loan payments made by ICM, and (iv) we entered into a Series E Unit
Issuance Agreement with Bunge, now succeeded by Bunge Holdings, under which,
among other things, we agreed to issue Series E Units to Bunge Holdings for any
Bridge Loan payments made by Bunge Holdings.
 
 As of
March 31, 2009, we have drawn approximately $106,769,222 under our Credit
Agreement, and have drawn approximately $35,230,814 of principal and interest
under the Bridge Loan.  In addition to our equity and debt
financing, we have earned interest, rent, grant and other income of $
approximately $126,000 and $158,000 for the  six month periods ending
March 31, 2009 and 2008, respectively.


As of
March 31, 2009, we have approximately $7,000,000 available under our
construction loan.  Under our $15 million revolving line of credit,
which allows us to borrow 75% of our borrowing base, we have borrowed $3 million
as of March 31, 2009, with an additional $0.5 million available at March 31,
2009.  In addition to the borrowing base limitation, a letter of
credit issued in favor of our steam provider, Mid American Energy, in the amount
of $3,300,000 reduces the availability of working capital.  We are
also relying on receipt of our accounts receivable to help fund
operations.




Once
fully operational, because oil demand has decreased and ethanol prices have
remained flat, we believe operating margins will be break-even to slightly
negative over the next two to three quarters.  We anticipate margins
will remain at this level until the first quarter of 2010, as the current
economics of ethanol force a reduction in product supply as more independent
plants are forced to close.  We believe that our earnings before
interest, taxes, depreciation and amortization could be negative for the fiscal
year ending September, 2009.  We feel that cash flow from operations
may not allow us to make our principal payments which commence December 1,
2009.  We expect that we will request our lender to delay the initial
principal payment.  If our principal payments are not delayed, we will
be dependent upon our lines of credit to make these payments.  We may
use our line of credit to hedge corn, natural gas and ethanol
futures.  The volatility in the commodities markets recently has
resulted in wide swings in margins for ethanol production.  If
additional working capital were available, we would be able to more effectively
reduce the impact of commodity volatility.




Primary
Working Capital Needs




Cash
(used in) operations for the six month periods ending March 31, 2009 and 2008
was ($16,682,905) and ($853,681), respectively.  Cash has been used
primarily to fund operational start-up expenses and for pre-operational and
administrative expenses prior to March 1, 2009 and for operations
thereafter.  For the six month periods ending March 31, 2009 and 2008,
net cash used in investing activities was ($21,953,597) and ($34,948,706),
respectively, primarily related to the final construction and start-up of our
plant.   For the six month periods ending March 31, 2009 and
2008, cash provided by financing activities was $42,523,003 and $34,747,365,
respectively.  This cash was generated through loan
proceeds.




Through
March 31, 2009, we have incurred approximately $147,462,700 for construction
services under our construction contract with ICM (“ICM Contract”),
leaving $97,125 of future commitment and approximately $3,700,000 of retainage,
which we expect to pay in the remainder of 2009.  During the next two
quarters, we estimate that we will require approximately $38,000,000 per quarter
for our primary input of corn and $3,800,000 for our energy sources of steam and
natural gas.  We currently have approximately $500,000 available under
our line of credit to hedge commodity price fluctuations; however, we cannot
estimate the availability of funds for hedging in the future.




Trends
and Uncertainties Impacting Ethanol Industry and Our Future
Operations




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




19
 TABLE OF CONTENTS




The price
of corn has been volatile during the past year. Since December 2008, the Chicago
Mercantile Exchange (“CME”) near-month corn
price has dropped $0.41 per bushel. The CME near-month corn price for May, 2009
was $3.77 per bushel.  We believe the decrease in corn prices was
primarily due to lower export and feeding demand. Higher corn prices will
negatively affect our costs of production. However, we also believe that higher
corn prices may, depending on the prices of alternative crops, encourage farmers
to plant more acres of corn in the coming years and possibly divert land in the
Conservation Reserve Program to corn production. We believe an increase in land
devoted to corn production could reduce the price of corn to some extent in the
future.






The
United States Department of Agriculture (“USDA”) increased the
forecast of the amount of corn to be used for ethanol production during the
current marketing year by 100 million bushels, to a total of 3.7 billion. The
forecast is 674 million bushels more than used in that category last year. 
The USDA cited record ethanol use in December, continuing recovery in the
production of gasoline blends with ethanol, and more favorable blender margins
as reasons for the increase. In its March 11, 2009 update, the USDA also lowered
the projection of U.S. corn exports for the current marketing year by 50 million
bushels, to 1.7 billion bushels.  This projection is 300 million
bushels less than the projection of last fall, 736 million less than the record
exports of 2007-08, and represents the smallest exports in six
years.






The
USDA report for crop year 2008 (the period of September, 2008 through August,
2009) has projected the season-average farm price of corn at $4.00 to $4.40 per
bushel.  This compares with the 2007/08 record of $4.20 per
bushel.  We feel that there will continue to be volatility in the corn
market.






In the
past, ethanol prices have tended to track the wholesale price of gasoline.
Ethanol prices can vary from state to state at any given time. For the past two
years, according to ProExporter, the average U.S. ethanol price was $2.10 per
gallon.  For the same time period, the average U.S. wholesale gasoline
price was $2.34 per gallon.  During the last two quarters, the average
U.S. ethanol price was $1.60 per gallon. For the same time period, U.S.
wholesale gasoline prices have averaged $1.66 per gallon, or approximately $.06
per gallon above ethanol prices.  The Energy Information
Administration’s (EIA) March 2009 forecast states that “global economic
contraction continues to depress energy demand.”  The EIA’s forecasted
price target for oil is from $38 to $42 a barrel through September,
2009.  If corn were to average $4.00 per bushel, we would need to
generate an average netback of $1.65 per gallon to be able to service our
interest and principal payments. Netback is the sales price minus all freight
charges, storage charges or marketing fees.






We
believe that any reversal in federal policy could have a profound impact on the
ethanol industry. In recent months, a political debate has developed related to
the alleged adverse impact that increased ethanol production has had on food
prices. The high-profile debate focuses on conflicting economic theories
explaining increased commodity prices and consumer costs. Political candidates
and elected officials have responded with proposals to reduce, limit or
eliminate the RFS mandate, blender’s credit and tariff on imported ethanol.
While at present no policy change appears imminent, we believe that the debates
have created uncertainty and increased the ethanol industry's exposure to
political risk.






The
Renewable Fuels Standard






The
Energy Improvement & Extension Act of 2008 includes cellulosic ethanol
supports applicable to corn-based ethanol and bolsters the Energy Independence
and Security Act of 2007.  Theses supports are expected to impact the
ethanol industry by enhancing both the production and use of
ethanol.  This legislation modifies the provisions of the Energy
Policy Act of 2005 that created a renewable fuels standard, known as the
RFS.  The RFS is a national program that imposes requirements with
respect to the amount of renewable fuel produced and used.  RFS
applies to refineries, blenders, distributors and importers, but does not
restrict the geographic areas in which renewable fuels may be
used.  This should allow refiners, blenders, distributors and
importers to use renewable fuel blends in those areas where it is most cost
effective.  The RFS requires that 10.5 billion gallons of corn-based
ethanol be sold or dispensed in 2009, increasing to 15 billion gallons by
2022.






We
believe the RFS program increases the market for renewable fuels, such as
ethanol, as a substitute for petroleum-based fuels.  While we cannot
assure that this program’s mandates will continue in the future,
the




20
 TABLE OF CONTENTS




following
chart illustrates the potential United States ethanol demand based on the
schedule of minimum usage established by the program through the year 2022 ( in
billions of gallons).




Year
            Corn
            Cellulosic
            Biodiesel
            Unspecified
      Advanced Biofuel
            Total
      RFS2009
            10.50
            -
            .50
            .10
            11.102010
            12.00
            .10
            .65
            .20
            12.952011
            12.60
            .25
            .80
            .30
            13.952012
            13.20
            .50
            1.00
            .50
            15.202013
            13.80
            1.00
            -
            1.75
            16.552014
            14.40
            1.75
            -
            2.00
            18.152015
            15.00
            3.00
            -
            2.50
            20.502016
            15.00
            4.25
            -
            3.00
            22.252017
            15.00
            5.50
            -
            3.50
            24.002018
            15.00
            7.00
            -
            4.00
            26.002019
            15.00
            8.50
            -
            4.50
            28.002020
            15.00
            10.50
            -
            4.50
            30.002021
            15.00
            13.50
            -
            4.50
            33.002022
            15.00
            16.00
            -
            5.00
            36.00





Market
Risks





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





We expect
the annual impact on our results of operations due to a $0.20 per bushel
fluctuation in market prices for corn to be approximately $7,700,000, or $0.07
per gallon, assuming our plant operated at 100% name plate capacity (production
of 110,000,000 gallons of ethanol annually).  We also expect a $0.10
per gallon fluctuation in ethanol market prices to impact annual net income by
approximately $11,000,000.





In the
event we do not have sufficient working capital to enter into hedging strategies
to manage our risks, we may be forced to purchase our corn and market our
ethanol at spot prices and as a result, we could be further exposed to market
volatility and risk.





We have a
significant amount of debt, and our existing debt financing agreements contain,
and our future debt financing agreements may contain, restrictive covenants that
limit distributions and impose restrictions on the operation of our
business.The
use of debt financing makes it more difficult for us to operate because we must
make principal and interest payments on the indebtedness and abide by covenants
contained in our debt financing agreements. The level of our debt may have
important implications on our operations, including, among other things:
(i) limiting our ability to obtain additional debt or equity financing;
(ii) making us vulnerable to increases in prevailing interest rates;
(iii) placing us at a competitive disadvantage because we may be
substantially more leveraged than some of our competitors; (iv) subjecting
all or substantially all of our assets to liens, which means that there may be
no assets left for shareholders in the event of a liquidation; and
(v) limiting our ability to make business and operational decisions
regarding our business, including, among other things, limiting our ability to
pay dividends to our unit holders, make capital improvements, sell or purchase
assets or engage in transactions we deem to be appropriate and in our best
interest.


21
 TABLE OF CONTENTS





Competition





We
believe that the competition in the ethanol market may increase in the near term
as the ethanol plants recently sold by [Verasun] as part of its bankruptcy
proceedings return to production.  [The] Valero Energy Corporation
recently purchased seven of these idle plants.  In addition, AgStar
Financial purchased six of the plants in a recent auction and recently announced
that it had sold one of the plants in Michigan.  As these plants come
on line, we believe that ethanol prices will remain low through the end of
2009.





Summary
of Critical Accounting Policies and Estimates





Note 1 to
our condensed consolidated financial statements contains a summary of our
significant accounting policies, many of which require the use of estimates and
assumptions.  Accounting estimates are an integral part of the
preparation of financial statements and are based upon management's current
judgment.  We used our knowledge and experience about past events and
certain future assumptions to make estimates and judgments involving matters
that are inherently uncertain and that affect the carrying value of our assets
and liabilities.





We
believe that of our significant accounting policies, the following are
noteworthy because changes in these estimates or assumptions could materially
affect our financial position and results of operations.





Revenue
Recognition




We sell
ethanol and related products pursuant to marketing
agreements.   Revenues are recognized when the marketing company
(the “customer”) has taken title to the product, prices are fixed or
determinable and collectability is reasonably assured.   Our
products are generally shipped FOB loading point.   For the first
six months of production, ethanol sales will be handled through the marketing
agreement with Lansing Ethanol Services; with the conclusion of Lansing Ethanol
Services agreement, ethanol sales will be handled through the marketing
agreement with Bunge.  Syrup, distiller’s grains and solubles, and
modified wet distiller’s grains with solubles will be sold through the marketing
agreement with Bunge, which sets the price based on the market price to third
parties.  Marketing fees and commissions due to the marketers are paid
separately from the settlement for the sale of the ethanol products and
co-products and are included as a component of cost of
revenues.  Shipping and handling costs incurred by the Company for the
sale of ethanol and co-products are included in cost of revenues.




Derivative
Financial Instruments




We enter
into derivative contracts to hedge our exposure to price risk related to
forecasted corn needs and forward corn purchase contracts.  We use
cash, futures and options contracts to hedge changes to the commodity prices of
corn and ethanol.  All the derivative contracts are recognized on the
balance sheet at their fair value.  We do not enter into these
derivative financial instruments for trading or speculative purposes, nor do we
designate these contracts as hedges for accounting purposes, pursuant to the
requirements of Statement of Financial Accounting Standards (“SFAS”) No. 133,
Accounting for Derivative Instruments and Hedging
Activities.  Accordingly, any realized or unrealized gain or loss
related to these derivative instruments was recorded in the statement of
operations as a component of non-operating income until the plant was
operational.  Once operational, the gains or losses are included in
revenue if the contracts relate to ethanol and cost of revenue if the contracts
relate to corn.  During the three and six months ended March 31, 2009,
we recorded a combined realized and unrealized gain of $1,524,424 as a component
cost of revenue and $77,406 gain as a component of revenue.  In
addition, we recorded a combined realized and unrealized loss of $(656,973) for
the six months ended March 31, 2009 as a component of non-operating
income.  There were no realized or unrealized gains or losses during
the three or six months ended March 31, 2008.  The derivative
financial instruments asset of $477,619 consists of 2,300,000 bushels of corn
and 4,536,000 gallons of ethanol at March 31, 2009.




Inventory




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




22
 TABLE OF CONTENTS


Property
and Equipment




Property
and equipment are carried at cost less accumulated depreciation computed using
the straight-line method over the estimated useful lives:




Buildings                                               
    40 Years




Process
Equipment                                   10
Years




Office
Equipment                                     3-7
Years









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




Long-lived
assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be
recoverable.   An impairment loss would be recognized when
estimated undiscounted future cash flows from operations are less than the
carrying value of the asset group.  An impairment loss would be
measured by the amount by which the carrying value of the asset exceeds the fair
value of the asset.  In accordance with our policies, management has
evaluated the plants for possible impairment based on projected future cash
flows from operations.  Management has determined that its projected
future cash flows from operations exceed the carrying value of the plant and
that no impairment existed at March 31, 2009.





Off-Balance
Sheet Arrangements





We do not
have any off-balance sheet arrangements that have or are reasonable likely to
have a current or future material effect on our consolidation financial
condition, results of operations or liquidity.





Item
4(T).  Controls and Procedures.





Our
management, including our President (our principal executive officer), James
Lay, along with our Treasurer (our principal financial officer), Cindy
Patterson, have reviewed and evaluated the effectiveness of our disclosure
controls and procedures (as defined in Rule 15d-15 under the under the
Securities Exchange Act of 1934), as of March 31, 2009.  Based upon
this review and evaluation, these officers believe that our disclosure controls
and procedures are presently effective in ensuring that material information
related to us is recorded, processed, summarized and reported for the quarterly
period ending March 31, 2009.





Changes
in Internal Control Over Financial Reporting





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





23
 TABLE OF CONTENTS


PART
II





Item
1. Legal Proceedings.





None.





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





On March
2, 2009, in connection with amendments to the Bridge Loan, we entered into a
First Amendment to Series E Issuance Agreement with Bunge Holdings (the “Bunge Agreement”),
and a First Amendment to Series C Unit Issuance Agreement with ICM (the “ICM Amendment”), both
of which provide that we are obligated to issue equity to either Bunge Holdings
or ICM in the event either of them repays any of the Bridge Loan or the
collateral they provided to secure our obligations under the Bridge Loan is
acted upon.  The offerings made under the ICM Amendment and the Bunge
Holdings Amendment were made under the registration exemption provided for in
Section 4(2) of the Securities Act of 1933 (the “Securities
Act”).  With respect to these exemptions, neither we, nor any
person acting on our behalf, offered or sold the securities by means of any form
of general solicitation or advertising.  Prior to making any offer or
sale in connection with the offerings, we had reasonable grounds to believe and
believed that each prospective investor (i) was capable of evaluating the merits
and risks of the investment, (ii) was able to bear the economic risk of the
investment, (iii) was provided with the opportunity to ask questions of our
management respecting our business plans and finances,  (iv) received
access to all of our material contracts and agreements, and (v) possessed the
requisite experience in business and financial matters to enable them to
appreciate the risks of investing in us.  We further had reason to
believe that purchaser was purchasing for investment for such purchaser’s own
account.





Item 3.  Defaults Upon Senior Securities.





None.





Item 4.  Submission of Matters to a Vote of Security
Holders.





None.





Item 5.  Other Information.





None.





Item 6.  Exhibits.





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


3(ii)
            Second
      Amended and Restated Operating Agreement dated March 7, 2008 (incorporated
      by reference to Exhibit 4(i) of Amendment No. 1 to Registration Statement
      on Form 10 filed by Registrant on March 21,
  2008).


10.1
            Promissory
      Note, dated March 2, 2009 executed by Southwest Iowa Renewable Energy, LLC
      in favor of Commerce Bank, N.A. (incorporated by reference to Exhibit 10.1
      of Form 8-K filed by the Company on March 6,
  2009)


10.2
            First
      Amendment to Series C Unit Issuance Agreement dated March 2, 2009 between
      Southwest Iowa Renewable Energy, LLC and ICM, Inc. (incorporated by
      reference to Exhibit 10.2 of Form 8-K filed by the Company on March 6,
      2009).


10.3
            First
      Amendment to Series E Unit Issuance Agreement dated March 2, 2009 between
      Southwest Iowa Renewable Energy, LLC and Bunge N.A. Holdings, Inc.
      (incorporated by reference to Exhibit 10.3 of Form 8-K filed by the
      Company on March 6, 2009).


10.4
            Agreement
      to Lend Employees, dated March 24, 2009 between Southwest Iowa Renewable
      Energy, LLC and Bunge North America, Inc. (incorporated by reference to
      Exhibit 10.1 of Form 8-K filed by the Company on March 24,
      2009).


24
 TABLE OF CONTENTS


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


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


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


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


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SIGNATURES





In accordance with the requirements of
the Exchange Act, the Registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.





SOUTHWEST
      IOWA RENEWABLE ENERGY, LLCDate:
      May 15, 2009
            /s/ James LayInterim
      President and Chief Executive OfficerDate:
      May 15, 2009
            /s/ Cindy PattersonChief
      Financial Officer

























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