Document:

<PAGE>

                                                                    Exhibit 10.3

                            GREENWAY CONSULTING, LLC
                                  CONFIDENTIAL

                            GREENWAY CONSULTING, LLC
                              RED TRAIL ENERGY, LLC
                                 RICHARDTON, ND

                                --CONFIDENTIAL--

<PAGE>

                            GreenWay Consulting, LLC
                                --CONFIDENTIAL--

                         DEVELOPMENT SERVICES AGREEMENT

This Agreement is entered into the 17th day of December, 2003, by and between
RED TRAIL ENERGY, LLC, a North Dakota Limited Liability Company of Richardton,
North Dakota, (hereinafter "RTE") and GREENWAY CONSULTING, LLC, a Minnesota
Limited Liability Company of Morris, Minnesota (hereinafter "GreenWay").

                                    RECITALS

WHEREAS, RTE requires Project Services (the "Services") in connection with the
execution and delivery of project financing, facility design and construction,
and initial plant operation for an ethanol production facility to be constructed
during the term of this Agreement;

WHEREAS, RTE desires to engage GreenWay to render these specific Services; and

WHEREAS, RTE will be responsible for raising and providing seed capital and
financial assistance to fund development costs and to raise certain equity
funding for the project financing.

NOW THEREFORE, in consideration of the mutual covenants and stipulations
hereinafter set forth, the parties agree as follows:

SECTION I. - SCOPE OF SERVICES PROVIDER. The Scope of Services provided by
GreenWay.

     A.   PHASE I - PROJECT DEVELOPMENT

     1.   PROJECT COORDINATION AND DEVELOPMENT:

          a.   Assist and advise RTE in recruiting and hiring a Project
               Coordinator;

          b.   Assist and advise RTE in engaging other firms to provide legal,
               accounting, risk management, and marketing expertise;

          c.   Assist and advise RTE in the site evaluation and selection
               process;

          d.   Assist and advise RTE in the negotiations of various contracts
               including insurance, utilities (gas, electrical, water, waste
               water), rail, raw material supply, and product off-take;

          e.   Assist and advise RTE in obtaining various permits; and

          f.   Assist and advise in the preparation of a Development Business
               Plan including a financial model with five years of operation
               projections (Exhibit C - Index).

                                                                          Page 1

<PAGE>

                            GreenWay Consulting, LLC
                                --CONFIDENTIAL--

     2.   DESIGN AND CONSTRUCTION:

          a.   Assist and advise RTE in selecting a design and engineering firm
               and in negotiating a contract regarding price, schedule, and
               performance;

          b.   Assist and advise RTE in reviewing and approving preliminary and
               final process and detailed design;

          c.   Assist and advise RTE in selecting a construction company and in
               negotiating a contract regarding price, schedule, and
               performance.

     3.   FINANCING:

          a.   Assist and advise in developing and implementing a strategy for
               the financing needs for the project and RTE, including seed
               capital, equity, and debt;

          b.   Assist and advise in evaluating financial options, including
               associated costs and technical aspects of any USDA guarantee
               program, TIF, revenue bonds, subordinated debt, and State and
               Federal grants;

          c.   Assist and advise in sourcing and evaluating negotiations of debt
               financing for the project, including construction financing and
               long-term debt financing; and

          d.   Assist and advise in credit analyses, submissions, and
               presentations.

     B.   PHASE II - CONSTRUCTION

     1.   Assist and advise RTE in recruiting and hiring RTE's owners'
          representative/construction supervisor;

     2.   Attend monthly site progress meetings between RTE, Design Engineer and
          Contractor;

     3.   Assist and advise during plant start-up with providing assistance and
          coordinating the activities of the Design Engineer and Contractor
          through and including the monitoring of the performance tests to
          assist in determining the performance criteria have been met.

     C.   PHASE III- INITIAL PLANT OPERATIONS THROUGH START-UP

     1.   Assist and advise RTE in recruiting and hiring all plant employees;

     2.   Assist and advise in providing initial employee training; and

     3.   Assist and advise in providing on-site support staff through
          successful start-up and commissioning;

                                                                          Page 2

<PAGE>

                            GreenWay Consulting, LLC
                                --CONFIDENTIAL--

     4.   Assist and advise in providing technical support on an as-needed basis
          for start-up;

     5.   Assist and advise in providing ongoing employee training through
          startup;

     6.   Continuously advise RTE on ways to increase plant production and
          efficiency through start-up.

It is understood that the GreenWay will not limit its assistance to the services
specifically enumerated above, but will extend their services and assistance as
reasonably required to provide for the successful implementation of the project
plan.

It is also understood that all services provided by the GreenWay will be
provided on a best efforts basis with no warranties of performance.

SECTION II. -- COMPENSATION. Compensation for the Services provided under this
Agreement shall be based on the following schedule:

     A.   SERVICE RETAINER. RTE shall advance a non-refundable retainer of Two
          Hundred Thousand Dollars ($200,000) (the "Retainer") to GreenWay
          Consulting, LLC payment not to be made until seed capital funding is
          completed. RTE will be obligated to pay for expenses incurred by
          GreenWay under SECTION III. After the Retainer is received, GreenWay
          shall not receive any additional service compensation until Financial
          Close and shall then be paid additional service compensation as set
          forth in SCHEDULE 1: COMPENSATION FOR SERVICES.

     -    SCHEDULE 1 - COMPENSATION FOR SERVICES

<TABLE>
<CAPTION>
SERVICE          FEE         SOURCE OF FUNDS               PAYMENT TERMS
-------          ---         ---------------               -------------
<S>         <C>             <C>                 <C>
PHASE I     $1,250,000.00   PROJECT FINANCING   DUE IN FULL @ FINANCIAL CLOSE

PHASE II    $1,100,000.00   PROJECT FINANCING   25% DOWN @ FINANCIAL CLOSE - 50% @
                                                MECHANICAL
                                                COMPLETION - 25% @ SUCCESSFUL
                                                COMMISSIONING

PHASE III   $  700,000.00   PROJECT FINANCING   AT SUCCESSFUL COMMISSIONING
</TABLE>

In no case will GreenWay share or split the fees delineated above with any other
party currently assisting RTE in other endeavors. However, GreenWay may, at its
sole discretion, choose to engage other companies (other than as identified in
SECTION I) in order to effect the necessary transactions and may choose to share
a portion of its fees for the services under this Agreement provided by those
other companies.

Any lender commitment fees for any of the components of the funding shall be
paid directly by RTE and will not be considered to be a part of the above
scheduled fees for GreenWay.

                                                                          Page 3

<PAGE>

                            GreenWay Consulting, LLC
                                --CONFIDENTIAL--

The following definitions apply to this section:

          a.   Financial Close: Closing of senior debt financing for the
               project.

          b.   Mechanical Completion: Completion of construction such that corn
               can be ground for ethanol production.

          c.   Successful Commissioning: Production of ethanol meeting design
               specifications on a daily basis of nameplate production, and all
               production meets the guarantees provided by engineers and
               contractors.

          d.   Project Financing: Total debt and equity financing of the
               project.

          e.   Total Project Capitalization: The total source of funds
               including, but not limited to, grants, subordinated debt, senior
               debts, the equity portion of working capital, and revolving line
               of credit all as established as of Financial Close, provided,
               however, "Total Project Capitalization" does not include seed
               capital equity.

          f.   Working Capital: Operating revenues of the plant.

          g.   Seed Capital: At risk money for project development exclusive of
               total project

          h.   Capitalization (e) above.

[NOTE: The Services delineated in SECTION I and the corresponding fees
delineated in SECTION II do not contemplate that GreenWay will solicit seed
capital, subordinated debt or equity on behalf of RTE. While GreenWay will
prepare materials and assist in making presentations under this Agreement,
GreenWay or its members may assist RTE in direct solicitation of seed capital,
subordinated debt, or equity, but such solicitation must be done on other
mutually agreed terms and conditions.]

SECTION III. - EXPENSES.

     A.   OUT-OF-POCKET EXPENSES

          RTE will be responsible for all of GreenWay's out-of-pocket expenses,
          including travel, lodging, meals, communication, cost of financial
          analysis, e.g. CPA prepared and approved GAAP financial information
          required by the capital markets, and reports prepared in fulfilling
          its duties for the Services outlined in SECTION I. If expenses
          (excluding Costs of Issuance as stated below) exceeding $5,000 per
          month are required, GreenWay shall seek pre-approval by RTE, which
          shall not be unreasonably withheld. GreenWay shall submit monthly
          updated expense reports to RTE for reimbursement. If RTE obtains its
          equity from producer members and investors there would be no
          anticipated "Costs of Issuance". If RTE seeks bond financing, issues
          debentures, or otherwise issues instruments to obtain financing, there
          will be fees and expenses commonly known as Costs of Issuance. RTE
          will be responsible for the payment of all Costs of Issuance, fees and
          expenses, including but not limited to: publication expenses, legal
          counsel, bond counsel, ratings, credit enhancement, all travel,
          printing of bonds, printing and

                                                                          Page 4

<PAGE>

                            GreenWay Consulting, LLC
                                --CONFIDENTIAL--

          distribution of required disclosure documents, trustee fees, agent
          fees, CUSIP registration, and the like, provided however, RTE shall
          review and approve the Costs of Issuance prior to being incurred. In
          the event such a financing is attempted and ultimately does not occur,
          RTE will be responsible for paying all of the aforementioned
          pre-approved expenses.

     B.   GENERAL MANAGER & PLANT MANAGER SALARIES.

          Approximately six (6) months prior to anticipated plant commissioning,
          Greenway will hire a General Manager and a Plant Manager for the
          Plant. All salary and benefits paid by Greenway shall be reimbursed to
          Greenway within ten (10) days of invoice to RTE.

SECTION IV. - TERM OF AGREEMENT: TERMINATION. The term of this Agreement shall
begin on the date of execution set forth above and shall have an expiration date
upon reaching Successful Commissioning of the plant. RTE and GreenWay as the
non-defaulting party each shall retain the right to terminate this Agreement if
either party fails to perform ("defaults") under the terms of this contract and
attachments, including but not limited to meeting major milestones in
development by their completion dates in Schedule 2 below. All expenses under
SECTION III shall be paid through Termination. Termination of this Agreement by
RTE prior to Financial Close but after meeting the Business Plan and
Capitalization Plan milestones in Schedule 2, followed by a Financial Close will
result in RTE paying GreenWay a termination fee equal to the Phase I fee shown
in Schedule 1 above. To terminate this Agreement, the non-defaulting party must
notify the defaulting party in writing describing the cause of default and pay
any uncontested amounts that are due through the date of the notice.

     -    SCHEDULE 2 - MILESTONES AND COMPLETION DATES

<TABLE>
<CAPTION>
     MILESTONE                                       COMPLETION DATE   FAILURE
     ---------                                       ---------------   -------
<S>  <C>                                             <C>               <C>
1.   RTE raising at least                             ______________   GreenWay may terminate
     $1,000,000 in Seed Capital

2.   First draft Business Plan                        ______________   RTE may terminate

3.   First draft of Capitalization Plan               ______________   RTE may terminate

4.   Selection of Design Firm and Engineer            ______________   RTE or GreenWay may
                                                                       terminate

5.   Preliminary Resolution of Construction Issues    ______________   RTE or GreenWay may
     pre-PPM                                                           terminate

6.   Completion of raising at least                   ______________   RTE or GreenWay may
     $40,000,000 in Equity                                             terminate

7.   Financial Close                                  ______________   RTE or GreenWay may
                                                                       terminate
</TABLE>

                                                                          Page 5

<PAGE>

                            GreenWay Consulting, LLC
                                --CONFIDENTIAL--

SECTION V. - INDEPENDENT CONTRACTOR. GreenWay is an independent contractor and
nothing in this Agreement shall constitute or designate GreenWay or any of its
employees or agents as employees or agents of RTE.

SECTION VI- CONFIDENTIALITY. RTE agrees all services being provided in this
Agreement are the work product of GreenWay and proprietary property of GreenWay.
GreenWay agrees to license the use of the proprietary property to RTE
exclusively for RTE's use for its development, construction and operation of its
Richardton, North Dakota area ethanol production facility only. RTE agrees it
shall not disclose any proprietary property (information or work product) to
third parties, including the media, without the third party executing a
nondisclosure agreement attached as Exhibit D and first obtaining written
permission from GreenWay. GreenWay agrees that financial and other information
about the ethanol production project will be developed by RTE and disclosed to
GreenWay. GreenWay agrees that proprietary information of RTE will only be used
for purposes of RTE's project and will not be disclosed to others without first
obtaining written permission from RTE. In the event RTE or GreenWay violates the
terms and spirit of this license and disclosure provision, RTE and GreenWay
agree they will be subject to an injunction and such other relief as allowed by
law, including any damages caused to the other party and reimbursement to the
other party for any attorney fees and costs incurred by the other party in
enforcing this provision.

SECTION VII. - ENTIRE AGREEMENT/AMENDMENTS. This Agreement constitutes the
entire Agreement between the parties hereto and sets forth the rights, duties,
and obligations of each to the other as of this date. Any prior agreements,
promises, negotiations, or representations not expressly set forth in this
Agreement are of no force and effect. This Agreement may not be modified except
in writing executed by both GreenWay and RTE.

SECTION VIII. - LEGAL ADVICE. Each Party agrees that it has relied on its own
legal counsel or has had legal counsel available to them. The Parties agree they
have not relied on any legal representations from the other party.

SECTION IX. - BINDING EFFECT. This Agreement will be binding upon and inure to
the benefit of the Parties hereunder, and their respective representatives,
distributees, successors and assigns.

SECTION X. NOTICES. Any written notice or communications required or permitted
by this Agreement, or by law, to be served on, given to, or delivered to either
party hereto by the other party, shall be in writing, and shall be deemed duly
served, given, or delivered when personally delivered to the party to whom it is
addressed, or in lieu of such personal services, when deposited in the United
States' mail, first-class postage prepaid, addressed to:

Red Trail Energy, LLC
P.O. Box 11/11 South Avenue West
Richardton, North Dakota 58652

                                                                          Page 6

<PAGE>

                            GreenWay Consulting, LLC
                                --CONFIDENTIAL--

     Attention: Frank Kirchenheiter

or to:

     GreenWay Consulting, LLC
     74 South County Road 22
     Morris, Minnesota 56267
     Attention: Gerald Bachmeier

SECTION XI. - CONTROLLING LAW. This Agreement and the rights of the Parties
hereunder, will be governed by, interpreted and enforced in accordance with the
laws of the State of North Dakota.

SECTION XII. - DISPUTE/ARBITRATION. If any dispute arises out of or in
connection with this Agreement, the obligations arising under it or the
interpretation of its terms, the matter shall be referred to arbitration
pursuant to the Commercial Rules of the American Arbitration Association and
according to the following terms:

     A.   Either RTE or GreenWay may initiate arbitration by giving written
          notice requesting arbitration to the other.

     B.   The parties shall select a single arbitrator by mutual agreement, but
          if they fail to select an arbitrator within ten (10) calendar days of
          the receipt of notice of arbitration, then each party shall within
          seven (7) business days thereafter, appoint their respective
          arbitrator and the two (2) arbitrators thus chosen shall together,
          within seven (7) business days of their appointment, select a third
          arbitrator and that three member panel shall arbitrate the dispute. In
          the event that the two arbitrators shall fail within seven (7)
          business days of their appointment to select a third arbitrator, then
          upon written request of either party, the third arbitrator shall be
          appointed by the American Arbitration Association. If a party shall
          fail to appoint an arbitrator as required the arbitrator appointed by
          the other party shall be the sole arbitrator. The arbitration shall be
          conducted in Fargo, North Dakota.

     C.   Within fifteen (15) business days of the appointment of the arbitrator
          or panel, as the case may be, each party shall state in writing its
          position concerning the dispute, supported by the reasons therefore,
          and deliver its position to the arbitrator(s) and the other party. If
          either party fails to submit its position in a timely manner, the
          position submitted by the other party shall be deemed correct, and the
          arbitration shall be deemed concluded. The parties shall then have ten
          (10) calendar days to respond to the position of the other party and
          deliver that response to the arbitrator(s). The arbitrator(s) shall,
          within thirty (30) calendar days thereafter, meet to consider the
          documents presented in order to make a determination by majority on
          the issues in dispute. Within fifteen (15) business days of the end of
          their meeting the arbitrator(s) shall present their award. The
          arbitrator(s) may

                                                                          Page 7

<PAGE>

                            GreenWay Consulting, LLC
                                --CONFIDENTIAL--

          award a party the right to terminate this Agreement if termination is
          a remedy specified herein for the claim which is the subject of the
          arbitration.

     D.   Each party in such arbitration shall bear one-half each of the
          expenses of the arbitrators), including their fees and costs, but each
          party shall bear their own expenses, including attorney's fees.

SECTION XIII. - LIMITATION OF LIABILITY; INDEMNIFICATION.

     A.   GreenWay shall not be liable to RTE, its affiliates and each of their
          respective partners, directors, officers, agents, consultants,
          employees and controlling persons (all such persons for purposes of
          this SECTION XIII, a "RTE Party" or the "RTE Parties") for any losses,
          damages, expenses or liabilities (collectively, "Losses") suffered by
          a RTE- Party as a result of or relating to any act or omission of
          GreenWay, its affiliates or any of their respective partners,
          directors, officers, agents, consultants, employees and controlling
          persons (all such persons for purposes of this SECTION XIII, a
          "GreenWay Party or the GreenWay Parties") in performing the services
          under this Agreement, except to the extent and only to the extent of
          any direct (as opposed to consequential or incidental) damages or
          Losses suffered by a RTE Party which are caused proximately by (1) any
          acts of negligence or misrepresentations by a GreenWay Party; (2)
          GreenWay's breach of any provision of this Agreement; (3) any
          warranty, express or implied, or representation made by a GreenWay
          Party to any third party in connection with the project under
          development which is not authorized by RTE; (4) GreenWay's failure to
          meet its obligations to or perform any acts required under its
          agreements with its subcontractors, representatives or agents or any
          other third party; or (5) the relationship between GreenWay and any
          GreenWay Party. In addition to the foregoing limitation of liability,
          GreenWay's aggregate liability to the RTE Parties under this Agreement
          shall be limited to and shall not exceed the amount of compensation
          earned by GreenWay hereunder plus any expenses paid to GreenWay
          hereunder, except in the event any policy of insurance shall apply and
          in such case, Greenway's total liability shall be limited to any
          applicable insurance coverage. The foregoing limitations of liability
          shall not apply to GreenWay's indemnification of RTE Parties against
          third party claims as provided under SECTION XIII C hereof.

     B.   RTE shall not be liable to any GreenWay Party for any Losses suffered
          by any GreenWay Party as a result of or relating to any act or
          omission of a RTE Party in connection with this Agreement or the
          project under development, except to the extent and only to the extent
          of any direct (as opposed to consequential or incidental) damages or
          Losses suffered by any GreenWay Party which are caused proximately by
          (1) any acts of negligence or misrepresentations by a RTE Party; (2)
          RTE's breach of any provision of

                                                                          Page 8

<PAGE>

                            GreenWay Consulting, LLC
                                --CONFIDENTIAL--

          this Agreement; (3) any warranty, express or implied, or
          representation made by a RTE Party to any third party in connection
          with the project under development which is not authorized by
          GreenWay; (4) RTE's failure to meet its obligations to or perform any
          acts required under its agreements with its subcontractors,
          representatives or agents or any other third party; or (5) the
          relationship between RTE and any RTE Party. In addition to the
          foregoing limitation of liability, RTE's aggregate liability in the
          GreenWay Parties under this Agreement shall be limited to and shall
          not exceed the amount of compensation earned by GreenWay hereunder
          plus any expenses paid to Green Way hereunder, This limitation of
          liability shall not apply to RTE's indemnification of GreenWay Parties
          against third party claims as provided under SECTION XIIID hereof.

     C.   GreenWay shall indemnify and hold harmless any RTE Party from and
          against any and all claims, demands, salts, actions or proceedings,
          including any Inquiry or investigation. ("Claims") brought by third
          parties based primarily on or arising proximately from (1) any acts of
          negligence or misrepresentations by a GreenWay Party; (2) GreenWay's
          bleach of any provision of this Agreement; (3) any warranty, express
          or implied, or representation made by a GreenWay Party to any third
          party in connection with the project under development which is not
          authorized by RTE; (4) Greenway's failure to meet its obligations to
          or perform any acts required under its agreements with its
          subcontractors, representatives or agents or any other third party; or
          (5) the relationship between GreenWay and any GreenWay Party. This
          indemnity and hold harmless shall include indemnity against all
          Losses, including reasonable attorneys fees, incurred by the RTE Party
          in connection with such Claim and the defense thereof, but shall
          exclude any consequential damages suffered by the RTE Party as a
          result of any such Claim brought by a third party. Provided, further,
          that the indemnity afforded under this SECTION XIII C shall not apply
          to any Claim or Losses actually paid pursuant to any insurance policy
          covering the RTE Party.

     D.   RTE shall indemnify and hold harmless any GreenWay Party from and
          against any and all claims, demands, suits, actions or proceedings,
          including any inquiry or investigation ("Claims") brought by third
          parties arising from or in connection with any act, omission,
          transaction or event contemplated by the Agreement. This indemnity and
          hold harmless shall include indemnity against all Losses, including
          reasonable attorneys fees, incurred by the GreenWay Party in
          connection with such Claim and the defense thereof, but shall exclude
          any consequential damages suffered by the GreenWay Party as a result
          of any such Claim brought by a third party. Provided, further, that
          the indemnity afforded under this SECTION XIII D shall not apply to
          any Claim or Losses based primarily on or arising proximately from (1)
          any acts of negligence or misrepresentations by a

                                                                          Page 9

<PAGE>

                            GreenWay Consulting, LLC
                                --CONFIDENTIAL--

          GreenWay Party; (2) GreenWay's breach of any provision of this.
          Agreement; (3) any warranty, express implied, or representation made
          by a Green Way Party to any third Party in connection with the project
          under development which is not authorized by RTE; (4) GreenWay's
          failure to meet its obligations to or perform any acts required under
          its agreements with its subcontractors, representatives or agents or
          any other third party; (5) the relationship between GreenWay and any
          GreenWay Party; or (6) actually paid pursuant to any insurance policy
          covering the GreenWay Party.

     E.   The obligations of GreenWay and RTE under this SECTION XIII shall
          survive any termination of this Agreement. In the event of any
          fundamental change involving the corporate structure of either party,
          the obligations of the re-structuring party under this Agreement
          shall, if not assumed by operation of law, be assumed by contract by
          the acquiring entity or arrangements made to protect the interests of
          the non-restructuring party hereto reasonably satisfactory to such
          non-restructuring party.

     F.   In no event shall any GreenWay Party other than GreenWay be liable or
          responsible to a RTE Party for the debts, obligations or liabilities
          of GreenWay to such party under this Agreement. In no event shall any
          RTE Party other than RTE be liable or responsible to a GreenWay Party
          for the debts, obligations or liabilities of RTE to such party under
          this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written. By the signature of its representatives below, each party
affirms that it has taken all necessary action to authorize said
representative(s) to execute this Agreement.

EACH PARTY AGREES IT HAS READ AND UNDERSTANDS ALL THE TERMS OF THIS AGREEMENT.

RED TRAIL ENERGY, LLC                   GREENWAY CONSULTING, LLC

By: /s/ Ambrose R. Hoff                 By: /s/ Gerald Bachmeier
    ---------------------------------       ------------------------------------
    Ambrose R. Hoff                         Gerald Bachmeier
    Its: President                          Its: Chief Manager

                                                                         Page 10

<PAGE>

                                    AMENDMENT

             TO THE DECEMBER 17, 2003 DEVELOPMENT SERVICES AGREEMENT

     This Amendment to that certain Developmental Services Agreement of December
17, 2003 is entered into this 16th day of December, 2005 by and between
GreenWay, LLC ("GreenWay") and Red Trail Energy, LLC ("Red Trail"):

     FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, the parties hereby amend their original Developmental Services
Agreement (See 7/11/02 Developmental Services Agreement attached hereto as
Exhibit A) as follows;

     SECTION 2 - COMPENSATION shall be amended to reflect the following payment
     dates:

     PHASE I           Shall be due at Financial Close or January 9,
                       2006 whatever occurs later

     25% OF PHASE II   Shall be due at Financial Close or January 9,
                       2006 whatever occurs later

All remaining terms of this Agreement shall remain in effect as originally
agreed upon.

     THIS AMENDMENT IS ENTERED INTO THE DAY AND YEAR FIRST ABOVE WRITTEN.

                                        GREENWAY CONSULTING, LLC

                                        /s/ Gerald Bachmeier
                                        ----------------------------------------
                                        Gerald Bachmeier
                                        By Its: Chief Manager

                                        RED TRAIL ENERGY, LLC

                                        /s/ Ambrose R. Hoff
                                        ----------------------------------------
                                        Ambrose R. Hoff
                                        By Its: President<PAGE>

                                                                    Exhibit 10.4

              THE BURLINGTON NORTHERN AND SANTA FE RAILWAY COMPANY

                     REAL ESTATE PURCHASE AND SALE AGREEMENT

                                             Staubach Global Services
                                             4105 Lexington Avenue N., Suite 200
                                             Arden Hills, Minnesota 55126

JANUARY 14, 2004

BUYER'S OFFER

1. The undersigned, hereinafter called "Buyer", offers to purchase from The
Burlington Northern and Santa Fe Railway Company herein after called "Seller",
all of Seller's right, title and interest in and to that parcel of land situated
in or near the City of Richardton, County of Stark and State of North Dakota,
shown hatched black on map marked Exhibits "A" and "A-l", dated December 5,
2003, attached hereto and made a part hereof (said parcel of land being
hereinafter called "the Property") at the price and upon the terms and
conditions as follows.

PURCHASE PRICE AND PAYMENT

2. Seller may approve or disapprove this Agreement for any reason whatsoever, in
Seller's sole and absolute discretion, whether reasonable or unreasonable or
whether arbitrary or capricious, subject to the approval of this Agreement by
Seller, Buyer agrees to pay to Seller the purchase price of $14,650.00 for
Property, of which the amount of $14,650.00 (full amount) hereinafter called the
"deposit", is paid to Seller, or Seller's assignee, to be applied on the
purchase price. Said deposit check shall be forwarded to Staubach Global
Services, Inc., at 4105 N. Lexington Avenue, Suite 200, Arden Hills, Minnesota
55126, and then forwarded to the Seller's account. Said deposit check should be
made payable to JP MORGAN CHASE BANK/ESCROW AGENT/APEX. Said deposit shall be
refunded to Buyer if this offer is not accepted by Seller within forty five (45)
days from the date of said offer. Delivery of Seller's deed shall be made from
Seller's above stated office.
<PAGE>

[SEAL]

WHEN RECORDED MAIL TO
Hardy Law Firm
Box 570
Dickinson ND 58602

Carol Beckert, Recorder

[BARCODE]

                                 QUITCLAIM DEED

     KNOW ALL, MEN BY THESE PRESENTS, that THE BURLINGTON NORTHERN AND SANTA FE
RAILWAY COMPANY, a Delaware corporation, (formerly Burlington Northern Railroad
Company), of 2500 Lou Menk Drive, Fort Worth, Texas 76131-2830, hereinafter
called "Grantor", for Fourteen Thousand Six Hundred Fifty and No/100 Dollars
($14,650.00) and other good and valuable consideration, to it in hand paid by
RED TRAIL ENERGY, LLC, a North Dakota limited liability company, of 11 South
Avenue W. Richardton, North Dakota 58652, hereinafter called "Grantee", the
receipt whereof is hereby acknowledged, does hereby REMISE, RELEASE and FOREVER
QUITCLAIM, without any covenants of warranty whatsoever and without recourse to
the Grantor, its successors and assigns, unto the said Grantee, its successors
and assigns, all its right, title and interest, if any, in and to that piece,
parcel or tract of land, subject, however, to all existing interests, including
but not limited to all reservations, rights-of-way and easements of record or
otherwise, situated in the County of Stark and State of North Dakota,
hereinafter called "Property", being more particularly described as follows:

     The Southerly or Southwesterly 150.0 feet of The Burlington Northern and
     Santa Fe Railway Company's (formerly Northern Pacific Railway Company)
     400.0 foot wide Charter Right of Way, being 200.0 feet wide on each side of
     said Railway Company's Main Track centerline, as originally located and
     constructed upon, over and across the S 1/2 of Section 4, the NE 1/4 NE 1/4
     of Section 9, and the NW 1/4, the SW 1/4 NE 1/4 and the SE 1/4 of Section
     10, all in Township 139 North, Range 92 West of the 5th P. M., Stark
     County, North Dakota, bounded on the East by the East line of said Section
     10, and bounded on the(1) West by the West line of said Section 4.

<PAGE>

     Grantee has been allowed to make an inspection of the Property and has
knowledge as to the past use of the Property. Based upon this inspection and
knowledge, Grantee is aware of the condition of the Property and GRANTEE
ACKNOWLEDGES THAT GRANTEE IS PURCHASING THE PROPERTY ON AN "AS-IS WITH ALL
FAULTS" BASIS WITH ANY AND ALL PATENT AND LATENT DEFECTS, INCLUDING THOSE
RELATING TO THE ENVIRONMENTAL CONDITION OF THE PROPERTY, AND THAT GRANTEE IS NOT
RELYING ON ANY REPRESENTATION OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND
WHATSOEVER FROM GRANTOR AS TO ANY MATTERS CONCERNING THE PROPERTY, including the
physical condition of the Property and any defects thereof, the presence of any
hazardous substances, wastes or contaminants in, on or under the Property, the
condition or existence of any of the above ground or underground structures or
improvements in, on or under the Property, the condition of title to the
Property, and the leases, easements or other agreements affecting the Property.
Grantee is aware of the risk that hazardous substances and contaminants may be
present on the Property, and indemnifies, holds harmless and hereby waives,
releases and discharges forever Grantor from any and all present or future
claims or demands, and any and all damages, loss, injury, liability, claims or
costs, including fines, penalties and judgments, and attorney's fees, arising
from or in any way related to the condition of the Property or alleged presence,
use, storage, generation, manufacture, transport, release, leak, spill, disposal
or other handling of any hazardous substances or contaminants in, on or under
the Property. Losses shall include without limitation (a) the cost of any
investigation, removal, remedial or other response action that is required by
any Environmental Law, that is required by judicial order or by order of or
agreement with any governmental authority, or that is necessary or otherwise is
reasonable under the circumstances, (b) capital expenditures necessary to cause
the Grantor's remaining property or the operations or business of the Grantor on
its remaining property to be in compliance with the requirements of any
Environmental Law, (c) losses for injury or death of any person, and (d) losses
arising under any Environmental Law enacted after transfer. The rights of
Grantor under this section shall be in addition to and not in lieu of any other
rights or remedies to which it may be entitled under this document or otherwise.
This indemnity specifically includes the obligation of Grantee to remove, close,
remediate, reimburse or take other actions requested or required by any
governmental agency concerning any hazardous substances or contaminants on the
Property.

     The term "Environmental Law" means any federal, state or local statute,
regulation, code, rule, ordinance, order, judgment, decree, injunction or common
law pertaining in any way to the protection of human health or the environment,
including without limitation, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the Toxic
Substances Control Act, and any similar or comparable state or local law.

     The term "Hazardous Substance" means any hazardous, toxic, radioactive or
infectious substance, material or waste as defined, listed or regulated under
any Environmental Law, and includes without limitation petroleum oil and any of
its fractions.

BNSF 03387 Richardton, ND

                                        2

                                                                       [BARCODE]

<PAGE>

     In connection with construction of any improvements on the Property,
Grantee agrees, at Grantee's costs and expense, to construct, reconstruct,
renew, maintain and operate, upon said Property to be conveyed hereby, such
sewer line, ditches, culverts or flood plains as may be required so that water
discharged from the Property to be conveyed hereby, whether created by nature or
Grantee's operation of said Property, does not flow onto the land and trackage
retained by Grantor located adjacent to said Property, or from said Property, so
that said water does not flow toward Grantor's trackage. This covenant shall be
binding upon Grantee, its successors and assigns. This covenant shall run with
the land.

     Grantee understands and acknowledges that a fiber optic communications line
or lines traverses through the Property and that this sale shall be subject to
all rights and interests of that certain telecommunications easement between
Grantor and Catellus Fiber Optics, LLC dated December 30, 1998, to provide for
the continued operation and maintenance of said line or lines. If during the
development and use of the Property by the Grantee and its successors or
assigns, it becomes necessary to relocate, encase or otherwise protect the said
line or lines, those costs shall be assumed at the Grantee's sole expense.

     Grantee agrees to construct or arrange for the construction on the Property
within two (2) years from date of closing of this conveyance, a railroad spur
track to serve the Property for the shipment of freight by railroad cars to be
used in Grantee's business of operating an ethanol plant. In the event Grantee
has not constructed said track within the said two (2) year period, Grantor
shall have the right, for a period of one (1) year from and after the expiration
of said two (2) year period, to repurchase the Property for the same
consideration paid by Grantee; without further compensation for any improvements
located thereon, upon giving written notice to Grantee of Grantor's intent to
repurchase said Property. Upon service of such notice upon Grantee and the
tender of the said consideration to Grantee by Grantor, Grantee shall reconvey
the Property to the Grantor by good and sufficient warranty deed, free and clear
of all liens and encumbrances, except for those enumerated in the conveyance
contemplated hereby, and Grantee shall give Grantor a title insurance policy or
an abstract f title evidencing such good title.

     BY ACCEPTING THIS DEED, GRANTEE ACKNOWLEDGES THAT GRANTOR, AS SUCCESSOR IN
INTEREST TO THE NORTHERN PACIFIC RAILWAY COMPANY, ACQUIRED A DETERMINABLE
OWNERSHIP INTEREST IN THE PROPERTY FROM THE UNITED STATES OF AMERICA, PURSUANT
TO SECTION 2 OF THE NORTHERN Pacific LAND GRANT ACT OF 1864, AND GRANTEE AGREES
TO THE CONDITIONS AND LIMITATIONS IMPOSED BY THIS NORTHERN PACIFIC LAUD GRANT
ACT.

     TO HAVE AND TO HOLD the Property unto the said Grantee, its successors and
assigns, forever.

BNSF 03387 Richardton, ND

                                                                       [BARCODE]

<PAGE>

     IN WITNESS WHEREOF, the said Grarilor has caused this instrument to be
signed by its authorized representative, attested by its Assistant Secretary,
and its corporate seal to be affixed hereto on the 22nd day of March, 2004.

                                        THE BURLINGTON NORTHERN AND SANTA FE
                                        RAILWAY COMPANY

                                        By: /s/ D. P. Schneider
                                            ------------------------------------
                                            D. P. Schneider
                                            General Director Real Estate

                                        ATTEST:

                [SEAL]                  By: /s/ Patricia Zbichorski
                                            ------------------------------------
                                            Patricia Zbichorski
                                            Assistant Secretary

                                        [AUDITOR'S OFFICE STAMP]

BNSF 03387 Richardton, ND

                                        4

                                                                       [BARCODE]

<PAGE>

STATE OF TEXAS      SECTION
                    SECTION SS.
COUNTY OF TARRANT   SECTION

     On this 22nd day of March, 2004, before me, Hubert Glen Walter, a Notary
Public in and for said County and State, personally appeared D. P. Schneider and
Patricia Zbichorski, to me known to be the General Director Real Estate and
Assistant Secretary, respectively, of THE BURLINGTON NORTHERN AND SANTA FE
RAILWAY COMPANY, a Delaware corporation, the corporation that is described in
and that executed the foregoing instalment and acknowledged to me that such
corporation executed the same.

[SEAL]                                  /s/ Hubert Glen Walter
                                        ----------------------------------------
                                        Notary Public

                                        My commission expires: 7/21/04

I certify that the requirement for a report or statement of foil consideration
paid does not apply because this deed is for one of the transactions exempted by
subdivision i as it relates to quitclaim deeds of the subsection 6 of N.D. Cent.
Code, Section 11-18-02.2 (1999).

Signed: /s/ Michael J. Maus             Date: 7/22/05
        -----------------------------
        Michael J. Maus, Agent

THE LEGAL DESCRIPTION WAS PREPARED BY STAUBACH GLOBAL SERVICES, INC., 5650 NORTH
            RIVERSIDE DRIVE, SUITE 101, FORT WORTH, TEXAS 76137-2464

                                        FORM APPROVED BY LAW

                                        APPROVED
                                        LEGAL      KKH

                                        APPROVED
                                        FORM       AH

                                        APPROVED   REW

BNSF 03387 Richardton, ND

                                        5

                                                                       [BARCODE]

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