##### 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 June 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 399
Wall 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 Yes
    
    o No
  o Yes
    
    o No
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non-Accelerated Filer þ
    
    Smaller Reporting Company o
  o Yes
    
    þ No




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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
    
    
    27Item 4. Controls and Procedures
    
    
    29PART II  OTHER INFORMATION
    
    
    29Item 1. Legal Proceedings
    
    
    29Item 1A. Risk Factors
    
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    31Item 3. Defaults Upon Senior Securities
    
    
    31Item 4. (Removed and Reserved)
    
    
    31Item 5. Other Information
    
    
    31Item 6. Exhibits
    
    
    31Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



PART I.  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 WESTERN IOWA ENERGY, LLC
BALANCE SHEETS
 June 30,
    
    
    December 31,2010
    
    
    2009(UNAUDITED)ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    81,736
    
    
    $
    300Margin deposits
    
    
    133,356
    
    
    
    58,445Trade accounts receivable  related party
    
    
    303,789
    
    
    
    3,106,676Other receivables
    
    
    
    
    
    
    387,883Incentive receivables
    
    
    
    
    
    
    2,946,499Derivative instruments
    
    
    34,889
    
    
    
    Inventory
    
    
    3,096,902
    
    
    
    383,528Prepaid expenses
    
    
    146,258
    
    
    
    540,890Total current assets
    
    
    3,796,930
    
    
    
    7,424,221PROPERTY, PLANT AND EQUIPMENTLand and land improvements
    
    
    1,435,928
    
    
    
    1,364,842Office building and equipment
    
    
    645,542
    
    
    
    645,542Plant and process equipment
    
    
    33,897,821
    
    
    
    33,854,309Construction in progress
    
    
    
    
    
    
    8,136Total, at cost
    
    
    35,979,291
    
    
    
    35,872,829Less accumulated depreciation
    
    
    8,782,841
    
    
    
    7,669,210Total property, plant and equipment
    
    
    27,196,450
    
    
    
    28,203,619OTHER ASSETSLand options
    
    
    
    
    
    
    596Other investments
    
    
    124,078
    
    
    
    107,198Loan origination fees, net of amortization
    
    
    60,306
    
    
    
    69,355Total other assets
    
    
    184,384
    
    
    
    177,149TOTAL ASSETS
    
    $
    31,177,764
    
    
    $
    35,804,989LIABILITIES AND MEMBERS EQUITYCURRENT LIABILITIESChecks issued in excess of bank balance
    
    $
    
    
    
    $
    333,008Accounts payable:Trade
    
    
    419,847
    
    
    
    824,979Related party
    
    
    15,096
    
    
    
    88,277Current portion of long-term debt
    
    
    834,722
    
    
    
    2,459,722Derivative instruments
    
    
    
    
    
    
    2,587Accrued interest
    
    
    8,588
    
    
    
    22,226Accrued wages and benefits
    
    
    66,791
    
    
    
    107,664Accrued payroll taxes
    
    
    3,574
    
    
    
    3,678Accrued expenses  related party
    
    
    4,687
    
    
    
    103,537Other current liabilities
    
    
    46,320
    
    
    
    46,304Total current liabilities
    
    
    1,399,625
    
    
    
    3,991,982LONG-TERM LIABILITIESLong-term debt, less current portion above
    
    
    2,551,111
    
    
    
    3,262,222Total liabilities
    
    
    3,950,736
    
    
    
    7,254,204MEMBERS EQUITYContributed capital
    
    
    23,516,376
    
    
    
    23,516,376Retained earnings
    
    
    3,710,652
    
    
    
    5,034,409Total members equity
    
    
    27,227,028
    
    
    
    28,550,785TOTAL LIABILITIES AND MEMBERS EQUITY
    
    $
    31,177,764
    
    
    $
    35,804,989
   3




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WESTERN IOWA ENERGY, LLC
STATEMENTS OF OPERATIONS
 Three Months Ended
    
    
    Three Months Ended
    
    
    Six Months Ended
    
    
    Six Months EndedJune 30, 2010
    
    
    June 30, 2009
    
    
    June 30, 2010
    
    
    June 30, 2009REVENUESRelated parties
    
    $
    2,995,789
    
    
    $
    9,751,660
    
    
    $
    6,534,830
    
    
    $
    12,821,728Incentive funds
    
    
    
    
    
    
    1,148,325
    
    
    
    
    
    
    
    2,044,394Total revenues
    
    
    2,995,789
    
    
    
    10,899,985
    
    
    
    6,534,830
    
    
    
    14,866,122COST OF SALES
    
    
    2,977,013
    
    
    
    10,530,856
    
    
    
    6,973,226
    
    
    
    14,791,624Gross profit (loss)
    
    
    18,776
    
    
    
    369,129
    
    
    
    (438,396
    )
    
    
    74,498OPERATING EXPENSESConsulting and professional fees
    
    
    99,084
    
    
    
    248,257
    
    
    
    282,461
    
    
    
    374,636Office and administrative expenses
    
    
    285,997
    
    
    
    296,696
    
    
    
    612,698
    
    
    
    630,427Total operating expenses
    
    
    385,081
    
    
    
    544,953
    
    
    
    895,159
    
    
    
    1,005,063OTHER INCOME (EXPENSE)Interest income
    
    
    649
    
    
    
    944
    
    
    
    2,485
    
    
    
    1,352Interest expense
    
    
    (27,299
    )
    
    
    (85,054
    )
    
    
    (58,939
    )
    
    
    (176,947
    )Grant income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000Patronage dividends
    
    
    
    
    
    
    
    
    
    
    66,252
    
    
    
    116,734Total other income (expense)
    
    
    (26,650
    )
    
    
    (84,110
    )
    
    
    9,798
    
    
    
    41,139NET LOSS
    
    $
    (392,955
    )
    
    $
    (259,934
    )
    
    $
    (1,323,757
    )
    
    $
    (889,426
    )BASIC AND DILUTED LOSS PER UNIT
    
    $
    (14.86
    )
    
    $
    (9.83
    )
    
    $
    (50.05
    )
    
    $
    (33.63
    )WEIGHTED 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
 Six Months Ended
    
    
    Six Months EndedJune 30, 2010
    
    
    June 30, 2009CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (1,323,757
    )
    
    $
    (889,426
    )Adjustments to reconcile net loss to net cash
provided by (used in) operating activitiesDepreciation and amortization
    
    
    1,122,680
    
    
    
    1,116,062Non 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
    
    
    (74,911
    )
    
    
    (501,939
    )Trade accounts receivable  related party
    
    
    2,802,887
    
    
    
    (1,449,250
    )Other receivables
    
    
    387,883
    
    
    
    17,087Incentive receivables
    
    
    2,946,499
    
    
    
    (510,548
    )Inventory
    
    
    (2,713,374
    )
    
    
    (384,682
    )Derivative instruments
    
    
    (37,476
    )
    
    
    271,506Prepaid expenses and other assets
    
    
    394,632
    
    
    
    (852,470
    )Accounts payable
    
    
    (478,313
    )
    
    
    1,424,728Accrued interest
    
    
    (13,638
    )
    
    
    (1,775
    )Accrued wages and benefits
    
    
    (40,873
    )
    
    
    24,137Accrued payroll taxes
    
    
    (104
    )
    
    
    913Accrued expenses  related party
    
    
    (98,850
    )
    
    
    (117,620
    )Other current liabilities
    
    
    16
    
    
    
    Net cash provided by (used in) operating activities
    
    
    2,856,421
    
    
    
    (1,979,580
    )CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment, including
construction in progress
    
    
    (105,866
    )
    
    
    (38,365
    )CASH FLOWS FROM FINANCING ACTIVITIESNet decrease in checks issued in excess of bank balance
    
    
    (333,008
    )
    
    
    Proceeds from long-term debt
    
    
    2,925,000
    
    
    
    7,927,000Payments on long-term debt
    
    
    (5,261,111
    )
    
    
    (5,883,111
    )Net cash provided by (used in) financing activities
    
    
    (2,669,119
    )
    
    
    2,043,889NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    81,436
    
    
    
    25,944CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    300
    
    
    
    66,400CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    81,736
    
    
    $
    92,344
   5




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
June 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
June 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
June 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
June 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
June 30, 2010
 NOTE 2  INCENTIVE PAYMENTS AND RECEIVABLE
   NOTE 3  INVENTORY
  June 30,
    
    
    December 31,2010
    
    
    2009Raw material
    
    $
    539,405
    
    
    $
    273,791Work in process
    
    
    1,387,430
    
    
    
    49,398Finished goods
    
    
    1,170,067
    
    
    
    60,339Total
    
    $
    3,096,902
    
    
    $
    383,528
 NOTE 4  DEBT AND FINANCING
 Long-Term Debt
  June 30,
    
    
    December 31,2010
    
    
    2009Note payable to Farm Credit Services of America and
CoBank under term note agreement  see details
below
    
    $
    725,000
    
    
    $
    2,350,000Note payable to Farm Credit Services of America and
CoBank under reducing revolving credit note  see
details below
    
    
    1,975,000
    
    
    
    2,630,000Note payable to the Iowa Department of Economic
Development  see details below
    
    
    192,500
    
    
    
    207,500Note payable to Glidden Rural Electric
Cooperative  see details below
    
    
    493,333
    
    
    
    534,444Total
    
    
    3,385,833
    
    
    
    5,721,944Less current portion
    
    
    834,722
    
    
    
    2,459,722Long-term portion
    
    $
    2,551,111
    
    
    $
    3,262,222
  10




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
  2011
    
    $
    834,7222012
    
    
    112,2222013
    
    
    692,2222014
    
    
    1,582,2222015
    
    
    82,222Thereafter
    
    
    82,223Total
    
    $
    3,385,833
    11




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
   NOTE 5  MEMBERS EQUITY
  NOTE 6  CASH FLOW DISCLOSURES
  Six Months
    
    
    Six MonthsEnded
    
    
    EndedJune 30, 2010
    
    
    June 30, 2009Cash paid for interest
    
    $
    72,577
    
    
    $
    178,722
 NOTE 7  RELATED PARTY TRANSACTIONS
   12




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
   NOTE 8  LEASE COMMITMENTS
  2011
    
    $
    35,627
  NOTE 9  RETIREMENT AND SAVINGS PLAN
  NOTE 10  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
   13




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
  June 30, 2010SignificantQuoted Prices in
    
    
    Other
    
    
    SignificantCarrying
    
    
    Active Markets for
    
    
    Observable
    
    
    UnobservableAmount on
    
    
    Identical Assets
    
    
    Inputs
    
    
    InputsBalance Sheet
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Financial assets:Commodity derivatives
    
    $
    34,889
    
    
    $
    34,889
    
    
    $
    
    
    
    $
    
 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 11  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
 Derivatives and Hedging,
 Objectives and Strategies for Holding Derivative Instruments
   14




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
 Commodity Risk Management
  Accounting for Derivative Instruments and Hedging Activities
   Asset Derivatives
    
    
    Liability DerivativesJune 30, 2010
    
    
    December 31, 2009Balance Sheet
    
    
    
    
    
    
    Balance SheetLocation
    
    
    Fair Value
    
    
    Location
    
    
    Fair ValueCommodity contracts Heat oil swaps
    
    Current assets
    
    
    $
    34,889
    
    
    Current liabilities
    
    
    $
    (2,587
    )
  Derivative (Gain) Loss
    
    
    Derivative (Gain) LossThree Months Ended
    
    
    Three Months EndedJune 30, 2010
    
    
    June 30, 2009Statement of
    
    
    
    
    
    
    Statement ofOperations
    
    
    
    
    
    
    OperationsLocation
    
    
    (Gain) Loss
    
    
    Location
    
    
    (Gain) LossCommodity contracts Heat oil swaps
    
    Cost of sales
    
    
    $
    (208,414
    )
    
    Cost of sales
    
    
    $
    930,345
 Derivative (Gain) Loss
    
    
    Derivative (Gain) LossSix Months Ended
    
    
    Six Months EndedJune 30, 2010
    
    
    June 30, 2009Statement of
    
    
    
    
    
    
    Statement ofOperations
    
    
    
    
    
    
    OperationsLocation
    
    
    (Gain) Loss
    
    
    Location
    
    
    (Gain) LossCommodity contracts Heat oil swaps
    
    Cost of sales
    
    
    $
    (188,387
    )
    
    Cost of sales
    
    
    $
    806,067
  15




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
 NOTE 12  UNCERTAINTIES
      16




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WESTERN IOWA ENERGY, LLC
NOTES TO FINANCIAL STATEMENTS
June 30, 2010
 NOTE 13  GAIN CONTINGENCIES
  NOTE 14  ASSET PURCHASE AGREEMENT
   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 third parties to market our products;
 
    
    Fluctuations in petroleum prices;
 
    
    Our ability to identify and enter into contractual arrangements with third parties
to procure feedstock for our plant and to market our products;
 
    
    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;
  18




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
    
    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;
 
    
    Our ability to comply with the financial covenants in our loan agreements;
 
    
    Changes to our operations related to the rejection of the proposed consolidation
with REG, including without limitation our ability to retain and/or train a general
manager for the plant, our ability to procure feedstock for our plant, and our ability
to market and sell our finished products;
 
    
    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 June 30, 2010 and 2009
  Three Months Ended
    
    
    Three Months EndedJune 30, 2010
    
    
    June 30, 2009(Unaudited)
    
    
    (Unaudited)Statement of Operations Data
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Revenues
    
    $
    2,995,789
    
    
    
    100.00
    %
    
    $
    10,899,985
    
    
    
    100.00
    %Cost of Sales
    
    $
    2,977,013
    
    
    
    99.37
    %
    
    $
    10,530,856
    
    
    
    96.61
    %Gross Profit (Loss)
    
    $
    18,776
    
    
    
    0.63
    %
    
    $
    369,129
    
    
    
    3.39
    %Operating Expenses
    
    $
    385,081
    
    
    
    12.85
    %
    
    $
    544,953
    
    
    
    5.00
    %Other Income (Expense)
    
    $
    (26,650
    )
    
    
    (0.89
    %)
    
    $
    (84,110
    )
    
    
    (0.77
    %)Net Income (Loss)
    
    $
    (392,955
    )
    
    
    (13.12
    %)
    
    $
    (259,934
    )
    
    
    (2.38
    %)
  20




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Revenues
  Three Months Ended
    
    
    Three Months EndedJune 30, 2010
    
    
    June 30, 2009% of
    
    
    
    
    
    
    % ofRevenue Sources
    
    Amount
    
    
    Revenues
    
    
    Amount
    
    
    RevenuesBiodiesel Sales
    
    $
    2,817,719
    
    
    
    94.1
    %
    
    $
    10,419,976
    
    
    
    95.6
    %Glycerin Sales
    
    $
    18,502
    
    
    
    0.6
    %
    
    $
    251,206
    
    
    
    2.3
    %Fatty Acid Sales and Soapstock Sales
    
    $
    87,270
    
    
    
    2.9
    %
    
    $
    228,803
    
    
    
    2.1
    %Custom Processing and Storage
    
    $
    72,298
    
    
    
    2.4
    %
    
    $
    
    
    
    
    
    %Total Revenues
    
    $
    2,995,789
    
    
    
    100.00
    %
    
    $
    10,899,985
    
    
    
    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 Six Months Ended June 30, 2010 and 2009
  Six Months Ended
    
    
    Six Months EndedJune 30, 2010
    
    
    June 30, 2009(Unaudited)
    
    
    (Unaudited)Statement of Operations Data
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Revenues
    
    $
    6,534,830
    
    
    
    100.00
    %
    
    $
    14,866,122
    
    
    
    100.00
    %Cost of Sales
    
    $
    6,973,226
    
    
    
    106.71
    %
    
    $
    14,791,624
    
    
    
    99.50
    %Gross Profit (Loss)
    
    $
    (438,396
    )
    
    
    (6.71
    %)
    
    $
    74,498
    
    
    
    0.50
    %Operating Expenses
    
    $
    895,159
    
    
    
    13.70
    %
    
    $
    1,005,063
    
    
    
    6.76
    %Other Income (Expense)
    
    $
    9,798
    
    
    
    0.15
    %
    
    $
    41,139
    
    
    
    0.28
    %Net Income (Loss)
    
    $
    (1,323,757
    )
    
    
    (20.26
    %)
    
    $
    (889,426
    )
    
    
    (5.98
    %)
 Revenues
  Six Months Ended
    
    
    Six Months EndedJune 30, 2010
    
    
    June 30, 2009% of
    
    
    
    
    
    
    % ofRevenue Sources
    
    Amount
    
    
    Revenues
    
    
    Amount
    
    
    RevenuesBiodiesel Sales
    
    $
    5,858,041
    
    
    
    89.6
    %
    
    $
    14,229,055
    
    
    
    95.7
    %Glycerin Sales
    
    $
    153,840
    
    
    
    2.4
    %
    
    $
    339,209
    
    
    
    2.3
    %Fatty Acid Sales and Soapstock Sales
    
    $
    314,720
    
    
    
    4.8
    %
    
    $
    297,858
    
    
    
    2.0
    %Custom Processing and Storage
    
    $
    208,229
    
    
    
    3.2
    %
    
    $
    
    
    
    
    
    %Total Revenues
    
    $
    6,534,830
    
    
    
    100.00
    %
    
    $
    14,866,122
    
    
    
    100.00
    %
  Cost of Sales
   23




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##### Table of Contents



Operating Expense
  Other Income (Expenses)
  Changes in Financial Condition for the Six Months Ended June 30, 2010
  June 30, 2010
    
    
    December 31, 2009Current Assets
    
    $
    3,796,930
    
    
    $
    7,424,221Current Liabilities
    
    $
    1,399,625
    
    
    $
    3,991,982Long-Term Debt
    
    $
    2,551,111
    
    
    $
    3,262,222Members Equity
    
    $
    27,227,028
    
    
    $
    28,550,785
 Current Assets
 Current Liabilities
 Long-Term Debt
  24




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##### Table of Contents



Members Equity
 Liquidity and Capital Resources
 Cash Flows
  2010
    
    
    2009Net cash provided by (used in) operating activities
    
    $
    2,856,421
    
    
    $
    (1,979,580
    )Net cash used in investing activities
    
    $
    (105,866
    )
    
    $
    (38,365
    )Net cash provided by (used in) financing activities
    
    $
    (2,669,119
    )
    
    $
    2,043,889Net increase in cash and equivalents
    
    $
    81,436
    
    
    $
    25,944
 Operating Cash Flows
  Liquidity and Capital Resources  Indebtedness .
 Investing Cash Flows
  Financing Cash Flows
  Indebtedness
 Short-Term Debt Sources
   25




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##### Table of Contents



Long-Term Debt Sources
       26




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##### Table of Contents



Subsequent Events
  Critical Accounting Estimates
  Inventories.
 Long-Lived Assets.
  Off-Balance Sheet Arrangements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
 Derivatives and Hedging
  27




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##### Table of Contents



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 6/30/10

    
    June 30, 2010
    
    
    10% Adverse Change
    
    
    to Income$
    725,000
    
    
    3.25
    %
    
    
    3.58
    %
    
    $
    2,393$
    1,975,000
    
    
    3.25
    %
    
    
    3.58
    %
    
    $
    6,518
 Commodity Price Risk
      28




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##### Table of Contents



Effect ofHypotheticalAdverse Change -Fair Value
    
    
    Market RiskJune 30, 2010
    
    $
    2,199,616
    
    
    $
    219,962June 30, 2009
    
    $
    7,950,329
    
    
    $
    795,033
 
 Item 4. Controls and Procedures.
 Disclosure Controls and Procedures
  Changes in Internal Controls
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
    29




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##### Table of Contents



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.
 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.
  30




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##### Table of Contents



Application of the Renewable Fuels Standard for biodiesel may initially encourage excess
production while higher cost producers are first identified and then gleaned from the marketplace.
 
 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.
 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.
  31




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##### Table of Contents



SIGNATURES
  WESTERN IOWA ENERGY, LLCDate: August 13, 2010
    /s/ William J. HoranWilliam J. HoranChairman, President and Director
(Principal Executive Officer)Date: August 13, 2010
    /s/ Joe NepplJoe NepplChief Financial Officer
(Principal Financial and Accounting Officer)  32