##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the quarterly period ended September 30, 2010.
 OR
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 For the transition period from  to .
 COMMISSION FILE NUMBER 00051965
 WESTERN IOWA ENERGY, LLC
  Iowa
(State or other jurisdiction of 
incorporation or organization)
    
    41-2143913
(I.R.S. Employer Identification No.)1220 S. Center Street, P.O. Box 399Wall Lake, Iowa
    
    51466(Address of principal executive offices)
    
    (Zip Code)
 (712) 664-2173
 (Former name, former address and former fiscal year, if changed since last report)
 þ o
 o o
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non-Accelerated Filer þ
    
    Smaller Reporting Company o
 o þ




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##### 



INDEX
 PART I.  FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    18Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    28Item 4. Controls and Procedures
    
    
    29PART II  OTHER INFORMATION
    
    
    30Item 1. Legal Proceedings
    
    
    30Item 1A. Risk Factors
    
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    32Item 3. Defaults Upon Senior Securities
    
    
    32Item 4. (Removed and Reserved)
    
    
    32Item 5. Other Information
    
    
    32Item 6. Exhibits
    
    
    32Exhibit 10.1Exhibit 10.2Exhibit 10.3Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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PART I.  FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 WESTERN IOWA ENERGY, LLC
BALANCE SHEETS
 September 30,
    
    
    December 31,2010
    
    
    2009(UNAUDITED)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    149,077
    
    
    $
    300Margin deposits
    
    
    67,358
    
    
    
    58,445Accounts receivable:Trade
    
    
    901,546
    
    
    
    Related party
    
    
    
    
    
    
    3,106,676Other receivables
    
    
    
    
    
    
    387,883Incentive receivables
    
    
    
    
    
    
    2,946,499Inventory
    
    
    622,344
    
    
    
    383,528Prepaid expenses
    
    
    200,471
    
    
    
    540,890Total current assets
    
    
    1,940,796
    
    
    
    7,424,221PROPERTY, PLANT AND EQUIPMENTLand and land improvements
    
    
    1,288,157
    
    
    
    1,364,842Office building and equipment
    
    
    876,595
    
    
    
    645,542Plant and process equipment
    
    
    33,826,668
    
    
    
    33,854,309Construction in progress
    
    
    
    
    
    
    8,136Total, at cost
    
    
    35,991,420
    
    
    
    35,872,829Less accumulated depreciation
    
    
    9,340,889
    
    
    
    7,669,210Total property, plant and equipment
    
    
    26,650,531
    
    
    
    28,203,619OTHER ASSETSLand options
    
    
    
    
    
    
    596Other investments
    
    
    124,078
    
    
    
    107,198Loan origination fees, net of amortization
    
    
    55,782
    
    
    
    69,355Total other assets
    
    
    179,860
    
    
    
    177,149TOTAL ASSETS
    
    $
    28,771,187
    
    
    $
    35,804,989LIABILITIES AND MEMBERS EQUITYCURRENT LIABILITIESChecks issued in excess of bank balance
    
    $
    
    
    
    $
    333,008Accounts payable:Trade
    
    
    165,829
    
    
    
    824,979Related party
    
    
    20,579
    
    
    
    88,277Current portion of long-term debt
    
    
    384,722
    
    
    
    2,459,722Derivative instruments
    
    
    29,657
    
    
    
    2,587Accrued interest
    
    
    6,273
    
    
    
    22,226Accrued wages and benefits
    
    
    61,570
    
    
    
    107,664Accrued payroll taxes
    
    
    2,149
    
    
    
    3,678Accrued expenses  related party
    
    
    4,687
    
    
    
    103,537Other current liabilities
    
    
    50,770
    
    
    
    46,304Total current liabilities
    
    
    726,236
    
    
    
    3,991,982LONG-TERM LIABILITIESLong-term debt, less current portion above
    
    
    1,573,055
    
    
    
    3,262,222Total liabilities
    
    
    2,299,291
    
    
    
    7,254,204MEMBERS EQUITYContributed capital
    
    
    23,516,376
    
    
    
    23,516,376Retained earnings
    
    
    2,955,520
    
    
    
    5,034,409Total members equity
    
    
    26,471,896
    
    
    
    28,550,785TOTAL LIABILITIES AND MEMBERS EQUITY
    
    $
    28,771,187
    
    
    $
    35,804,989
   3




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WESTERN IOWA ENERGY, LLC
STATEMENTS OF OPERATIONS
 Three Months Ended
    
    
    Three Months Ended
    
    
    Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2010
    
    
    September 30, 2009
    
    
    September 30, 2010
    
    
    September 30, 2009REVENUESRelated parties
    
    $
    1,917,696
    
    
    $
    16,026,679
    
    
    $
    8,452,526
    
    
    $
    28,848,407Unrelated parties
    
    
    901,546
    
    
    
    
    
    
    
    901,546
    
    
    
    Incentive funds
    
    
    78,997
    
    
    
    1,011,205
    
    
    
    78,997
    
    
    
    3,055,599Total revenues
    
    
    2,898,239
    
    
    
    17,037,884
    
    
    
    9,433,069
    
    
    
    31,904,006COST OF SALES
    
    
    3,354,338
    
    
    
    15,430,919
    
    
    
    10,327,564
    
    
    
    30,222,543Gross profit (loss)
    
    
    (456,099
    )
    
    
    1,606,965
    
    
    
    (894,495
    )
    
    
    1,681,463OPERATING EXPENSESConsulting and professional fees
    
    
    98,237
    
    
    
    152,300
    
    
    
    380,698
    
    
    
    526,936Office and administrative expenses
    
    
    178,664
    
    
    
    389,135
    
    
    
    791,362
    
    
    
    1,019,562Total operating expenses
    
    
    276,901
    
    
    
    541,435
    
    
    
    1,172,060
    
    
    
    1,546,498OTHER INCOME (EXPENSE)Interest income
    
    
    808
    
    
    
    1,338
    
    
    
    3,293
    
    
    
    2,690Interest expense
    
    
    (22,940
    )
    
    
    (79,356
    )
    
    
    (81,879
    )
    
    
    (256,303
    )Grant income
    
    
    
    
    
    
    131,525
    
    
    
    
    
    
    
    231,525Patronage dividends
    
    
    
    
    
    
    
    
    
    
    66,252
    
    
    
    116,734Total other income (expense)
    
    
    (22,132
    )
    
    
    53,507
    
    
    
    (12,334
    )
    
    
    94,646NET INCOME (LOSS)
    
    $
    (755,132
    )
    
    $
    1,119,037
    
    
    $
    (2,078,889
    )
    
    $
    229,611BASIC AND DILUTED INCOME (LOSS) PER UNIT
    
    $
    (28.55
    )
    
    $
    42.31
    
    
    $
    (78.61
    )
    
    $
    8.68WEIGHTED AVERAGE UNITS OUTSTANDING,
BASIC AND DILUTED
    
    
    26,447
    
    
    
    26,447
    
    
    
    26,447
    
    
    
    26,447
   4




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WESTERN IOWA ENERGY, LLC
STATEMENTS OF CASH FLOWS
 Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2010
    
    
    September 30, 2009CASH FLOWS FROM OPERATING ACTIVITIESNet income (loss)
    
    $
    (2,078,889
    )
    
    $
    229,611Adjustments to reconcile net loss to net cash
provided by operating activitiesDepreciation and amortization
    
    
    1,685,252
    
    
    
    1,676,391Provision for bad debts
    
    
    105,715
    
    
    
    Non cash portion of patronage dividends
    
    
    (16,880
    )
    
    
    (26,303
    )Non cash forgiveness of debt
    
    
    
    
    
    
    (100,000
    )Effects of changes in operating assets and liabilitiesMargin deposits
    
    
    (8,913
    )
    
    
    145,583Accounts receivable
    
    
    2,099,415
    
    
    
    (1,177,902
    )Other receivables
    
    
    387,883
    
    
    
    47,792Incentive receivables
    
    
    2,946,499
    
    
    
    96,137Inventory
    
    
    (238,816
    )
    
    
    1,285,710Derivative instruments
    
    
    27,070
    
    
    
    37,402Prepaid expenses and other assets
    
    
    340,419
    
    
    
    10,584Accounts payable
    
    
    (726,848
    )
    
    
    698,191Accrued interest
    
    
    (15,953
    )
    
    
    (11,790
    )Accrued wages and benefits
    
    
    (46,094
    )
    
    
    36,469Accrued payroll taxes
    
    
    (1,529
    )
    
    
    208Accrued expenses  related party
    
    
    (98,850
    )
    
    
    (102,964
    )Other current liabilities
    
    
    4,466
    
    
    
    4,394Net cash provided by operating activities
    
    
    4,363,947
    
    
    
    2,849,513CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment, including
construction in progress
    
    
    (117,995
    )
    
    
    (136,040
    )Net cash used in investing activities
    
    
    (117,995
    )
    
    
    (136,040
    )CASH FLOWS FROM FINANCING ACTIVITIESNet decrease in checks issued in excess of bank balance
    
    
    (333,008
    )
    
    
    Proceeds from long-term debt
    
    
    3,475,000
    
    
    
    9,077,000Payments on long-term debt
    
    
    (7,239,167
    )
    
    
    (11,781,167
    )Net cash used in financing activities
    
    
    (4,097,175
    )
    
    
    (2,704,167
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    148,777
    
    
    
    9,306CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    300
    
    
    
    66,400CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    149,077
    
    
    $
    75,706
   5




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
September 30, 2010
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Use of Estimates in Preparing Financial Statements
  Basis of Accounting
    Revenue Recognition
   Cash and Cash Equivalents
   Accounts Receivable
   6




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
September 30, 2010
  Derivative Instruments and Hedging Activities
 Derivatives and Hedging,
 Inventories
  Property, Plant, and Equipment
   YearsLand improvements
    
    20-40Office building
    
    5-40Office equipment
    
    5-20Plant and process equipment
    
    10-40
    7




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
September 30, 2010
 Loan Origination Fees
  Other Investments
  Grant Income
  Income Taxes
  Loss Per Unit
  Cost of Sales
    8




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
September 30, 2010
 Shipping and Handling Costs
  Environmental Liabilities
  Fair Value of Financial Instruments
  Current assets and current liabilities
 Long-term debt
 New Accounting Standards
 Subsequent Events
 Fair Value Measurements and Disclosures
  9




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
September 30, 2010
 NOTE 2  INCENTIVE PAYMENTS AND RECEIVABLE
   NOTE 3  INVENTORY
  September 30,
    
    
    December 31,2010
    
    
    2009Raw material
    
    $
    165,638
    
    
    $
    273,791Work in process
    
    
    359,350
    
    
    
    49,398Finished goods
    
    
    97,356
    
    
    
    60,339Total
    
    $
    622,344
    
    
    $
    383,528
  10




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
September 30, 2010
 NOTE 4  DEBT AND FINANCING
 Long-Term Debt
  September 30,
    
    
    December 31,2010
    
    
    2009Note payable to Farm Credit Services of America and
CoBank under term note agreement  see details
below.
    
    $
    275,000
    
    
    $
    2,350,000Note payable to Farm Credit Services of America and
CoBank under reducing revolving credit note  see
details below.
    
    
    1,025,000
    
    
    
    2,630,000Note payable to the Iowa Department of Economic Development  see details below.
    
    
    185,000
    
    
    
    207,500Note payable to Glidden Rural Electric Cooperative  see details below
    
    
    472,777
    
    
    
    534,444Total
    
    
    1,957,777
    
    
    
    5,721,944Less current portion
    
    
    384,722
    
    
    
    2,459,722Long-term portion
    
    $
    1,573,055
    
    
    $
    3,262,222
  2011
    
    $
    384,7222012
    
    
    112,2222013
    
    
    209,7222014
    
    
    507,2222015
    
    
    682,223Thereafter
    
    
    61,666Total
    
    $
    1,957,777
   11




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
September 30, 2010
    NOTE 5  MEMBERS EQUITY
   12




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
September 30, 2010
 NOTE 6  CASH FLOW DISCLOSURES
  Nine Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009Cash paid for interest
    
    $
    97,832
    
    
    $
    268,093
 NOTE 7  RELATED PARTY TRANSACTIONS
    NOTE 8  MAJOR CUSTOMER AND COMMITMENTS
   13




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
September 30, 2010
 NOTE 9  LEASE COMMITMENTS
  2011
    
    $
    26,720
  NOTE 10  RETIREMENT AND SAVINGS PLAN
  NOTE 11  FAIR VALUE OF FINANCIAL INSTRUMENTS
  
    
    Level 1Unadjusted quoted prices for identical assets and liabilities in active
markets;
 
    
    Level 2Quoted prices for similar assets and liabilities in active markets (other
than those included in Level 1) which are observable for the asset or liability, either
directly or indirectly; and
 
    
    Level 3Valuations derived from valuation techniques in which one or more
significant inputs or significant value drivers are unobservable.
  14




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
September 30, 2010
  September 30, 2010SignificantQuoted Prices in
    
    
    Other
    
    
    SignificantCarrying
    
    
    Active Markets for
    
    
    Observable
    
    
    UnobservableAmount on
    
    
    Identical Assets
    
    
    Inputs
    
    
    InputsBalance Sheet
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Financial liabilities:Commodity derivatives
    
    $
    (29,657
    )
    
    $
    (29,657
    )
    
    $
    
    
    
    $
    
 December 31, 2009SignificantQuoted Prices in
    
    
    Other
    
    
    SignificantCarrying
    
    
    Active Markets for
    
    
    Observable
    
    
    UnobservableAmount on
    
    
    Identical Assets
    
    
    Inputs
    
    
    InputsBalance Sheet
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Financial liabilities:Commodity derivatives
    
    $
    (2,587
    )
    
    $
    (2,587
    )
    
    $
    
    
    
    $
    
  NOTE 12  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
 Derivatives and Hedging,
 Objectives and Strategies for Holding Derivative Instruments
   15




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
September 30, 2010
 Commodity Risk Management
  Accounting for Derivative Instruments and Hedging Activities
   Asset Derivatives
    
    
    Liability DerivativesSeptember 30, 2010
    
    
    December 31, 2009Balance Sheet
    
    
    
    
    
    Balance SheetLocation
    
    Fair Value
    
    
    Location
    
    Fair ValueCommodity contracts -Heat oil swaps
    
    Current liabilities
    
    $
    (29,657
    )
    
    Current liabilities
    
    $
    (2,587
    )
  Derivative (Gain) Loss
    
    
    Derivative (Gain) LossThree Months Ended
    
    
    Three Months EndedSeptember 30, 2010
    
    
    September 30, 2009Statement of
    
    
    
    
    
    Statement ofOperations
    
    
    
    
    
    OperationsLocation
    
    (Gain) Loss
    
    
    Location
    
    (Gain) LossCommodity contracts -Heat oil swaps
    
    Cost of sales
    
    $
    (41,043
    )
    
    Cost of sales
    
    $
    (103,583
    )
 Derivative (Gain) Loss
    
    
    Derivative (Gain) LossNine Months Ended
    
    
    Nine Months EndedSeptember 30, 2010
    
    
    September 30, 2009Statement of
    
    
    
    
    
    Statement ofOperations
    
    
    
    
    
    OperationsLocation
    
    (Gain) Loss
    
    
    Location
    
    (Gain) LossCommodity contracts -Heat oil swaps
    
    Cost of sales
    
    $
    (147,344
    )
    
    Cost of sales
    
    $
    696,484
  16




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
September 30, 2010
 NOTE 13  UNCERTAINTIES
   NOTE 14  GAIN CONTINGENCIES
  NOTE 15  SUBSEQUENT EVENTS
    17




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations.
  Cautionary Statements Regarding Forward Looking Statements
  
    
    Changes in federal, state, or local incentives for biodiesel production, including
without limitation the federal biodiesel blenders tax credit;
    
    The availability and adequacy of our cash flow to meet our requirements;
    
    Changes to the rules related to the Renewable Fuels Standard and the value of
renewable identification numbers (RINs);
    
    Competition with other manufacturers in the biodiesel industry;
    
    Results of our hedging strategies;
    
    Changes in interest rates and the availability of credit to support capital
improvements, development, expansion, and operations;
    
    Changes in the amounts available under our credit facilities with Farm Credit;
    
    Our ability to keep up with the latest technology for the production of biodiesel;
    
    Decrease in the demand for biodiesel;
    
    Changes in plant production capacity or technical difficulties in operating the
plant;
    
    Actual biodiesel and co-product production varying from expectations;
    
    Availability and cost of products and raw materials, particularly soybean oil and
animal fats;
    
    Changes in the price and market for biodiesel and its co-products;
    
    Our ability to market and our reliance on ADM to market our products;
    
    Fluctuations in petroleum prices;
    
    Our ability to procure and our reliance on ADM to procure feedstock for our plant;
    
    Competition from alternative fuels and alternative fuel additives;
    
    Changes in our business strategy, capital improvement, or development plans;
    
    Consequences of the domestic and global economic downturn and ongoing financial
crisis;
    
    Our ability to generate free cash flow to invest in our business and service our
debt;
    
    Changes in general economic conditions or the occurrence of certain events causing
an economic impact in the agriculture, oil, or transportation industries;
    
    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;
    
    Our ability to export our biodiesel;
    
    Overcapacity within the biodiesel industry resulting in increased competition and
costs for feedstock and/or decreased prices for our biodiesel and co-products;
    
    Our ability to successfully re-start operations following the warm-idling of our
plant;
    
    The imposition of tariffs or other duties on biodiesel imported into Europe;
  18




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
    
    Our ability to comply with the financial covenants in our loan agreements;
    
    Changes to our operations related to the engagement of ADM as our biodiesel and
co-product marketer and feedstock procurer;
    
    Our ability to hire qualified personnel to operate the plant if and when we re-start
operations following our warm-idling; and
    
    Other factors described elsewhere in this report.
  Overview
  Liquidity and Capital Resources  Indebtedness .
    19




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Results of Operations for the Three Months Ended September 30, 2010 and 2009
  Three Months Ended
    
    
    Three Months EndedSeptember 30, 2010
    
    
    September 30, 2009(Unaudited)
    
    
    (Unaudited)Statement of Operations Data
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Revenues
    
    $
    2,898,239
    
    
    
    100.00
    %
    
    $
    17,037,884
    
    
    
    100.00
    %Cost of Sales
    
    $
    3,354,338
    
    
    
    115.74
    %
    
    $
    15,430,919
    
    
    
    90.57
    %Gross Profit (Loss)
    
    $
    (456,099
    )
    
    
    (15.74
    %)
    
    $
    1,606,965
    
    
    
    9.43
    %Operating Expenses
    
    $
    276,901
    
    
    
    9.55
    %
    
    $
    541,435
    
    
    
    3.18
    %Other Income (Expense)
    
    $
    (22,132
    )
    
    
    (0.76
    %)
    
    $
    53,507
    
    
    
    0.31
    %Net Income (Loss)
    
    $
    (755,132
    )
    
    
    (26.05
    %)
    
    $
    1,119,037
    
    
    
    6.57
    %
  20




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Revenues
  Three Months Ended
    
    
    Three Months EndedSeptember 30, 2010
    
    
    September 30, 2009% of
    
    
    
    
    
    
    % ofRevenue Sources
    
    Amount
    
    
    Revenues
    
    
    Amount
    
    
    RevenuesBiodiesel Sales
    
    $
    2,831,440
    
    
    
    97.70
    %
    
    $
    16,477,362
    
    
    
    96.71
    %Glycerin Sales
    
    $
    47,899
    
    
    
    1.65
    %
    
    $
    194,850
    
    
    
    1.14
    %Fatty Acid Sales and Soapstock Sales
    
    $
    18,900
    
    
    
    0.65
    %
    
    $
    365,672
    
    
    
    2.15
    %Total Revenues
    
    $
    2,898,239
    
    
    
    100.00
    %
    
    $
    17,037,884
    
    
    
    100.00
    %
      21




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##### Table of Contents



Cost of Sales
   Operating Expense
   Other Income (Expenses)
   22




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##### Table of Contents



Results of Operations for the Nine Months Ended September 30, 2010 and 2009
  Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2010
    
    
    September 30, 2009(Unaudited)
    
    
    (Unaudited)Statement of Operations Data
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Revenues
    
    $
    9,433,069
    
    
    
    100.00
    %
    
    $
    31,904,006
    
    
    
    100.00
    %Cost of Sales
    
    $
    10,327,564
    
    
    
    109.48
    %
    
    $
    30,222,543
    
    
    
    94.73
    %Gross Profit (Loss)
    
    $
    (894,495
    )
    
    
    (9.48
    %)
    
    $
    1,681,463
    
    
    
    5.27
    %Operating Expenses
    
    $
    1,172,060
    
    
    
    12.43
    %
    
    $
    1,546,498
    
    
    
    4.85
    %Other Income (Expense)
    
    $
    (12,334
    )
    
    
    (0.13
    %)
    
    $
    94,646
    
    
    
    0.30
    %Net Income (Loss)
    
    $
    (2,078,889
    )
    
    
    (22.04
    %)
    
    $
    229,611
    
    
    
    0.72
    %
 Revenues
  Nine Months Ended
    
    
    Nine Months EndedSeptember 30, 2010
    
    
    September 30, 2009% of
    
    
    
    
    
    
    % ofRevenue Sources
    
    Amount
    
    
    Revenues
    
    
    Amount
    
    
    RevenuesBiodiesel Sales
    
    $
    8,689,482
    
    
    
    92.12
    %
    
    $
    30,706,418
    
    
    
    96.25
    %Glycerin Sales
    
    $
    201,739
    
    
    
    2.14
    %
    
    $
    534,058
    
    
    
    1.67
    %Fatty Acid Sales and Soapstock Sales
    
    $
    333,620
    
    
    
    3.54
    %
    
    $
    663,530
    
    
    
    2.08
    %Custom Processing and Storage
    
    $
    208,228
    
    
    
    2.21
    %
    
    $
    
    
    
    
    
    %Total Revenues
    
    $
    9,433,069
    
    
    
    100.00
    %
    
    $
    31,904,006
    
    
    
    100.00
    %
    23




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##### Table of Contents



Cost of Sales
  Operating Expense
  Other Income (Expenses)
  Changes in Financial Condition for the Nine Months Ended September 30, 2010
  September 30,
    
    
    December 31,2010
    
    
    2009Current Assets
    
    $
    1,940,796
    
    
    $
    7,424,221Current Liabilities
    
    $
    726,235
    
    
    $
    3,991,982Long-Term Debt
    
    $
    1,573,055
    
    
    $
    3,262,222Members Equity
    
    $
    26,471,897
    
    
    $
    28,550,785
 Current Assets
  24




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##### Table of Contents



Current Liabilities
 Long-Term Debt
 Members Equity
 Liquidity and Capital Resources
 Cash Flows
  2010
    
    
    2009Net cash provided by operating activities
    
    $
    4,364,544
    
    
    $
    2,849,513Net cash used in investing activities
    
    $
    (118,591
    )
    
    $
    (136,040
    )Net cash used in financing activities
    
    $
    (4,097,176
    )
    
    $
    (2,704,167
    )Net increase in cash and equivalents
    
    $
    148,777
    
    
    $
    9,306
 Operating Cash Flows
  Liquidity and Capital Resources  Indebtedness .
 Investing Cash Flows
   25




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##### Table of Contents



Financing Cash Flows
  Indebtedness
 Short-Term Debt Sources
  Long-Term Debt Sources
     26




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##### Table of Contents



Subsequent Events
  Critical Accounting Estimates
  Inventories.
 Long-Lived Assets.
   27




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##### Table of Contents



Off-Balance Sheet Arrangements
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk.
 Derivatives and Hedging
  Interest Rate Risk
 Item 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS  Liquidity and Capital Resources, Indebtedness.
  Outstanding Variable
    
    Interest Rate at
    
    
    Interest Rate Following
    
    
    Annual Adverse ChangeRate Debt at 9/30/10
    
    September 30, 2010
    
    
    10% Adverse Change
    
    
    to Income$
    275,000
    
    
    3.25
    %
    
    
    3.58
    %
    
    $
    908$
    1,025,000
    
    
    3.25
    %
    
    
    3.58
    %
    
    $
    3,383
 Commodity Price Risk
   28




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##### Table of Contents



Effect ofHypotheticalAdverse Change -Fair Value
    
    
    Market RiskSeptember 30, 2010
    
    $
    285,743
    
    
    $
    28,574September 30, 2009
    
    $
    4,092,754
    
    
    $
    409,275
 
 Item 4.
    
    Controls and Procedures.
 Disclosure Controls and Procedures
  Changes in Internal Controls
   29




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings.
   
 Item 1A.
    
    Risk Factors.
 MANAGEMENTS DISCUSSION AND ANALYSIS
 The expiration of the biodiesel blenders federal tax credit could hinder our ability to
operate at a profit and reduce the value of our units.
 If our biodiesel plant is warm-idled for a sustained period of time, we might not be able to
meet our current liabilities and may experience losses.
  30




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##### Table of Contents



If our biodiesel plant resumes production, we may have difficulty in finding customers to
purchase our biodiesel.
 Further reductions in the amounts available under our credit facilities with Farm Credit may
cause us to be unable to meet our capital needs.
 The Renewable Fuels Standard may not be implemented as anticipated.
 We are in competition with ADM, our current product marketer, which could place us at a
competitive disadvantage and cause a conflict of interest for ADM.
 Our reliance on ADM to procure our inputs and market our products could damage our
profitability if ADM fails to perform its obligations pursuant to our agreements with ADM.
  31




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##### Table of Contents



Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3.
    
    Defaults Upon Senior Securities.
  
 Item 4.
    
    (Removed and Reserved).
 
 Item 5.
    
    Other Information.
  
 Item 6.
    
    Exhibits.The following exhibits are included herein:
 Exhibit No.
    
    Exhibit10.1
    
    
    Product Marketing Agreement between Western Iowa
Energy, LLC and Archer-Daniels-Midland Company,
dated September 21, 2010. +10.2
    
    
    Feedstock Agreement between Western Iowa Energy,
LLC and Archer-Daniels-Midland Company, dated
September 21, 2010. +10.3
    
    
    Services Agreement between Western Iowa Energy,
LLC and Archer-Daniels-Midland Company, dated
September 21, 2010. +31.1
    
    
    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.
 (+)
    
    Confidential Treatment Requested.  32




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##### Table of Contents



SIGNATURES
  WESTERN IOWA ENERGY, LLCDate: November 15, 2010
    
    /s/ William J. Horan

William J. HoranChairman, President and Director(Principal Executive Officer)Date: November 15, 2010
    
    /s/ Joe Neppl

Joe NepplChief Financial Officer(Principal Financial and Accounting Officer)
  33