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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
 þ
    
    Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the fiscal quarter ended March 31, 2007.
 OR
 o
    
    Transition report under Section 13 or 15(d) of the Exchange Act.
 For the transition period from  to.
 COMMISSION FILE NUMBER 00051277
 WESTERN IOWA ENERGY, LLC
  Iowa
    
    41-2143913(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 1220 S. Center Street, P.O. Box 399
Wall Lake, Iowa 51466
 (712) 664-2173
 þ o
 o þ
  o þ




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INDEX
 PART I  FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis or Plan of Operation
    
    
    15Item 3. Controls and Procedures
    
    
    24PART II  OTHER INFORMATION
    
    
    25Item 1. Legal Proceedings
    
    
    25Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    25Item 3. Defaults Upon Senior Securities
    
    
    25Item 4. Submission of Matters to a Vote of Security Holders
    
    
    25Item 5. Other Information
    
    
    26Item 6. Exhibits
    
    
    26Signatures
    
    
    27Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 WESTERN IOWA ENERGY, LLC
 
 BALANCE SHEET
 March 31, 2007
 ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    1,296,235Margin deposits
    
    
    216,064Trade accounts receivable  related party
    
    
    4,393,186Other receivables
    
    
    448,046Incentive receivable
    
    
    1,372,060Inventory
    
    
    9,009,110Derivative instruments
    
    
    839,771Prepaid expenses and other assets
    
    
    87,329Total current assets
    
    
    17,661,801PROPERTY, PLANT AND EQUIPMENTLand and land improvements
    
    
    1,284,081Office building and equipment
    
    
    638,589Plant and process equipment
    
    
    33,129,151Total, at cost
    
    
    35,051,821Less accumulated depreciation
    
    
    1,635,537Total property, plant and equipment
    
    
    33,416,284OTHER ASSETSLand options
    
    
    596Other investments
    
    
    2,000Loan origination fees, net of accumulated amortization of $18,777
    
    
    119,119Total other assets
    
    
    121,715TOTAL ASSETS
    
    $
    51,199,800LIABILITIES AND MEMBERS EQUITYCURRENT LIABILITIESAccounts payable:Trade
    
    $
    3,312,892Related party
    
    
    248,093Revolving line of credit
    
    
    2,000,000Current portion of long-term debt
    
    
    3,691,667Accrued interest
    
    
    138,335Accrued wages and benefits
    
    
    61,745Accrued payroll taxes
    
    
    6,389Accrued expenses  related party
    
    
    392,651Total current liabilities
    
    
    9,851,772LONG-TERM LIABILITIESLong-term debt, less current portion above
    
    
    13,798,333Total liabilities
    
    
    23,650,105MEMBERS EQUITYContributed capital
    
    
    23,516,376Retained earnings
    
    
    4,033,319Total members equity
    
    
    27,549,695TOTAL LIABILITIES AND MEMBERS EQUITY
    
    $
    51,199,800
 
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WESTERN ENERGY, LLC
 
 STATEMENTS OF OPERATIONS
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2007
    
    
    March 31, 2006REVENUESRelated parties
    
    $
    13,617,712
    
    
    $
    Incentive funds
    
    
    637,268
    
    
    
    14,254,980
    
    
    
    COST OF SALES
    
    
    13,688,681
    
    
    
    Gross profit
    
    
    566,299
    
    
    
    OPERATING EXPENSESConsulting and professional fees
    
    
    82,208
    
    
    
    102,723Office and administrative expenses
    
    
    355,787
    
    
    
    52,319Total operating expenses
    
    
    437,995
    
    
    
    155,042OTHER INCOME (EXPENSE)Interest income
    
    
    9,149
    
    
    
    35,646Interest expense
    
    
    (354,068
    )
    
    
    (137
    )Patronage dividends
    
    
    74,056
    
    
    
    Other income
    
    
    
    
    
    
    10,300Total other income (expense)
    
    
    (270,863
    )
    
    
    45,809NET LOSS
    
    $
    (142,559
    )
    
    $
    (109,233
    )BASIC AND DILUTED
LOSS PER UNIT
    
    $
    (5.39
    )
    
    $
    (4.29
    )WEIGHTED AVERAGE UNITS
OUTSTANDING, BASIC
AND DILUTED
    
    
    26,447
    
    
    
    25,447DISTRIBUTIONS
PER UNIT DECLARED AND PAID
    
    $
    80.21
    
    
    $
    
 
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WESTERN IOWA ENERGY, LLC
 
 STATEMENTS OF CASH FLOWS
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2007
    
    
    March 31, 2006CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (142,559
    )
    
    $
    (109,233
    )Adjustments to reconcile net loss to net cash provided by
(used in) operating activitiesDepreciation and amortization
    
    
    544,523
    
    
    
    4,152Effects of changes in operating assets and liabilitiesMargin deposits
    
    
    51,196
    
    
    
    Trade accounts receivable  related party
    
    
    (61,837
    )
    
    
    Other receivables
    
    
    (4,511
    )
    
    
    Incentive receivables
    
    
    (774,182
    )
    
    
    Inventory
    
    
    (1,212,927
    )
    
    
    Derivative instruments
    
    
    427,978
    
    
    
    Prepaid expenses and other assets
    
    
    (54,122
    )
    
    
    Accounts payable
    
    
    2,218,329
    
    
    
    40,446Other liabilities
    
    
    
    
    
    
    5,000Accrued interest
    
    
    22,371
    
    
    
    34,488Accrued wages and benefits
    
    
    15,184
    
    
    
    Accrued payroll taxes
    
    
    (27,130
    )
    
    
    10,129Net cash provided by (used in) operating activities
    
    
    1,002,313
    
    
    
    (15,018
    )CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment,
including construction in progress
    
    
    (865,058
    )
    
    
    (11,422,264
    )CASH FLOWS FROM FINANCING ACTIVITIESNet borrowings on line of credit
    
    
    2,000,000
    
    
    
    Proceeds from long-term debt
    
    
    3,209,472
    
    
    
    7,554,499Payments on long-term debt
    
    
    (1,957,500
    )
    
    
    (2,310
    )Distributions to members
    
    
    (2,121,314
    )
    
    
    Net cash provided by financing activities
    
    
    1,130,658
    
    
    
    7,552,189NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    1,267,913
    
    
    
    (3,885,093
    )CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    28,322
    
    
    
    4,935,695CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    1,296,235
    
    
    $
    1,050,602
 
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WESTERN
IOWA ENERGY, LLC
 
 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
March 31, 2007
  USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS
  BASIS OF ACCOUNTING
    REVENUE RECOGNITION
  CASH AND CASH EQUIVALENTS
  ACCOUNTS RECEIVABLE
   DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
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WESTERN IOWA ENERGY, LLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
March 31, 2007
 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
    INVENTORIES
  PROPERTY, PLANT, AND EQUIPMENT
   YearsLand improvements
    
    
    20-40Office building
    
    
    5-40Office equipment
    
    
    5-20Plant and process equipment
    
    
    10-40
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WESTERN IOWA ENERGY, LLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
March 31, 2007
 PROPERTY, PLANT, AND EQUIPMENT
  LOAN ORIGINATION FEES
  OTHER INVESTMENTS
  OTHER INCOME
  INCOME TAXES
  EARNINGS PER UNIT
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WESTERN IOWA ENERGY, LLC
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
March 31, 2007
 COST OF SALES
  SHIPPING AND HANDLING COSTS
  ENVIROMENTAL LIABILITIES
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WESTERN
IOWA ENERGY, LLC
 
 NOTES TO FINANCIAL STATEMENTS
March 31, 2007
 NOTE 1  INCENTIVE PAYMENTS AND RECEIVABLE
  NOTE 2  INVENTORY
 Inventory consists of the following at March 31, 2007:Raw material
    
    $
    1,166,384Work in progress
    
    
    852,129Finished goods
    
    
    6,990,597Total
    
    $
    9,009,110
 NOTE 3  LAND OPTION
  NOTE 4  DEBT AND FINANCING
 Revolving line of credit
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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
March 31, 2007
 NOTE 4  DEBT AND FINANCING
 Long-term debtLong-term obligations of the Company are summarized as follows at March 31 2007:Note payable to Farm Credit Services of America and CoBank under term note
agreement  see details below.
    
    $
    9,100,000Note payable to Farm Credit Services of America and CoBank under reducing
revolving credit note  see details below.
    
    
    7,260,000Note payable to the Iowa Department of Economic Development  see details below.
    
    
    390,000Note payable to Glidden Rural Electric Cooperative  see details below.
    
    
    740,000Total
    
    
    17,490,000Less current portion
    
    
    3,691,667Long-term portion
    
    $
    13,798,333Future maturities of long-term debt are as follows at March 31, 2007:2007
    
    $
    3,691,6672008
    
    
    1,918,2962009
    
    
    1,929,3482010
    
    
    1,930,8622011
    
    
    232,509Thereafter
    
    
    7,787,318Total
    
    $
    17,490,000
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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
March 31, 2007
 NOTE 4  DEBT AND FINANCING
   NOTE 5  MEMBERS EQUITY
   NOTE 6  CONCENTRATION OF CREDIT RISK
  NOTE
7  CASH FLOW DISCLOSURES
  2007
    
    
    2006Cash paid for interest
    
    $
    331,008
    
    
    $
    138
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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
March 31, 2007
 NOTE 7  CASH FLOW DISCLOSURES
  2007
    
    
    2006Construction in progress in accounts payable
    
    $
    
    
    
    $
    3,374,808Sales tax refund on plant construction costs
included in other receivables
    
    $
    443,535
    
    
    $
    
 NOTE 8  RELATED PARTY TRANSACTIONS
    NOTE 9  LEASE COMMITMENTS
  2007
    
    $
    35,6272008
    
    
    35,6272009
    
    
    35,6272010
    
    
    35,6272011
    
    
    8,906Total
    
    $
    151,414
  NOTE 10  RETIREMENT AND SAVINGS PLAN
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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
March 31, 2007
 NOTE 11  FAIR VALUE OF FINANCIAL INSTRUMENTS
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Item 2. Managements Discussion and Analysis or Plan of Operation.
 Cautionary Statements Regarding Forward Looking Statements
  
    
    Competition with other manufacturers in the biodiesel industry;
    
    Overcapacity within the biodiesel industry;
    
    Decrease in the demand for biodiesel;
    
    Actual biodiesel and glycerin production varying from expectations;
    
    Availability and cost of products and raw materials, particularly soybean oil;
    
    Changes in the price and market for biodiesel and its co-products;
    
    Our ability to market and our reliance on third parties to market our products;
    
    Fluctuations in petroleum prices;
    
    Changes in our business strategy, capital improvement or development plans;
    
    Changes in general economic conditions or the occurrence of certain events causing
an economic impact in the agriculture, oil or automobile industry;
    
    Changes in plant production capacity or technical difficulties in operating the
plant;
    
    Changes in the environmental regulations or in our ability to comply with the
environmental regulations that apply to our plant operations;
    
    Changes and advances in biodiesel production technology; and
    
    Other factors described elsewhere in this report.
  Overview
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Results of Operations
  Quarter EndedMarch 31, 2007(Unaudited)Income Statement DataRevenues
    
    $
    14,254,980
    
    
    
    100.00
    %Cost of Sales
    
    $
    13,688,681
    
    
    
    96.03
    %Gross Profit
    
    $
    566,299
    
    
    
    4.04
    %Operating Expenses
    
    $
    437,995
    
    
    
    3.13
    %Patronage Dividends
    
    $
    74,056
    
    
    
    0.53
    %Interest Expense
    
    $
    (354,068
    )
    
    
    2.5
    %Interest and Other Income
    
    $
    9,149
    
    
    
    0.06
    %Net Loss
    
    $
    (142,559
    )
    
    
    1.01
    %
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Revenues
   Cost of Sales
    Operating Expense
  Interest Expense and Interest Income
   17




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Trends and Uncertainties Impacting the Biodiesel Industry and Our Future Revenues
        18




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
    
    additional rail capacity and rail cars;
    
    additional storage facilities for biodiesel;
    
    increases in truck fleets capable of transporting biodiesel within localized markets;
    
    expansion in refining and blending facilities to handle biodiesel; and
    
    growth in service stations equipped to handle biodiesel fuels.
  19




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Plan of Operations for the Next 12 Months
  Plant Operations
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Completion of Construction
   Operating Budget and Financing of Plant Operations
  Operating Costs:Feedstock and Utilities Costs
    
    $
    68,700,000General and administrative costs
    
    $
    3,400,000Other Production Costs
    
    $
    2,400,000Total operating costs
    
    $
    74,500,000
  Administration and Employees
  Commodity Price Risk Protection
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Permitting and Regulatory Activities
  Employees
  Critical Accounting Estimates
  Liquidity and Capital Resources
   22




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Distribution to Unit Holders
  Sources of Funds
  Short-Term and Long-Term Debt Sources
    Issuance of Additional Units
   23




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Grants and Government Programs
  
    
    Authority to receive a property tax abatement from the City of Wall Lake at
85% of the tax on the property without the abatement for 10 years followed by
an abatement at 75% of the tax on the property with the abatement for 5 years.
    
    An investment tax credit equal to $2,990,400 (this Iowa tax credit may be
passed through to unit holders and carried forward for up to 7 years by them
until depleted);
    
    Funding for training new employees through a supplemental new jobs
withholding credit equal to one and one-half percent (1.5%) of the gross wages
of the new jobs created by the project; and
    
    A refund of one hundred percent (100%) of the sales, service and use taxes
paid to contractors and subcontractors during the construction phase of the
project (excluding local option sales taxes on intangible property, furniture
and furnishings).
   Off-Balance Sheet Arrangements
  
 Item 3. Controls and Procedures.
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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  Name
    
    Votes ForNile Ramsbotton
    
    
    14,830Wayne Seaman
    
    
    14,084Rick Steinkamp
    
    
    6,257Dennis Lally
    
    
    4,408
   Name
    
    Term ExpirationBill Horan
    
    
    2009John Geake
    
    
    2009Dennis Mauser
    
    
    2009Kevin Ross
    
    
    2008Warren Bush
    
    
    2008
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Item 5. Other Information.
  
 Item 6. Exhibits.
  Exhibit No.
    
    Exhibit31.1
    
    Certificate Pursuant to 17 CFR 240.15d-14(a).31.2
    
    Certificate Pursuant to 17 CFR 240.15d-14(a).32.1
    
    Certificate Pursuant to 18 U.S.C. § 1350.32.2
    
    Certificate Pursuant to 18 U.S.C. § 1350.
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SIGNATURES
  WESTERN IOWA ENERGY, LLC/s/ William J. HoranMay 15, 2007
    
    William J. HoranChairman, President and Director(Principal Executive Officer)/s/ Denny MauserMay 15, 2007
    
    Denny MauserTreasurer and Director(Principal Financial and Accounting Officer)
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EXHIBIT INDEX
 Exhibit No.
    
    Exhibit31.1
    
    Certificate Pursuant to 17 CFR 240.15d-14(a).31.2
    
    Certificate Pursuant to 17 CFR 240.15d-14(a).32.1
    
    Certificate Pursuant to 18 U.S.C. § 1350.32.2
    
    Certificate Pursuant to 18 U.S.C. § 1350.
  17