XML 114 R20.htm IDEA: XBRL DOCUMENT v2.4.0.8
COMMITMENTS
 12 Months Ended
Jan. 31, 2014
Disclosure Text Block Supplement [Abstract]  
Commitments Disclosure [Text Block]
14. COMMITMENTS

One Earth and NuGen have combined forward purchase contracts for approximately 9.7 million bushels of corn, the principal raw material for their ethanol plants. They expect to take delivery of the corn through March 2014.


One Earth and NuGen have combined sales commitments for approximately 51.6 million gallons of ethanol, 164,000 tons of distillers grains and 5.4 million pounds of non-food grade corn oil. They expect to deliver the ethanol, distillers grains and corn oil through June 2014.


Forward grain purchase, ethanol, distillers grains and non-food grade corn oil sale contracts are accounted for under the “normal purchases and normal sales” scope exemption of the accounting standards because these arrangements are for purchases of grain and sales of ethanol, distillers grains and corn oil that will be delivered in quantities expected to be used by One Earth and NuGen over a reasonable period of time in the normal course of business.


One Earth has entered into an agreement with an unrelated party for the use of a portion of the party’s natural gas pipeline. The term of the agreement is 10 years, and the amount is $4,380,000, which is paid over 120 equal installments of $36,500. Payments began in February 2009. One Earth paid approximately $438,000 pursuant to the lease in each of fiscal years 2013, 2012 and 2011.


One Earth has entered into agreements with unrelated parties for the lease of railcars that will be used to ship ethanol. These leases expire on various dates through May 31, 2022. One Earth pays a monthly lease amount per railcar. One Earth paid approximately $2,055,000, $1,723,000 and $1,193,000 pursuant to the lease in fiscal years 2013, 2012 and 2011, respectively.


One Earth has a contract with an unrelated party (“Distillers Grains Marketer”) for distillers grains marketing services. Under the terms of the contract, the Distillers Grains Marketer will purchase all of One Earth’s distillers grains production during the term of the contract. The contract called for One Earth to pay a fee per ton of distillers grains for the Distillers Grains Marketer’s services. The contract was amended on December 6, 2010, to reduce the fee for DDGS, and the termination date was extended to July 1, 2014. One Earth incurred fees of approximately $640,000 in fiscal year 2013 and approximately $627,000 in each of fiscal years 2012 and 2011 for these marketing services.


One Earth has a grain origination agreement with Alliance Grain, under which it purchased 100% of its grain during fiscal years 2013, 2012 and 2011. One Earth pays to Alliance Grain a certain amount per bushel for procurement fees. The term of the agreement expires October 31, 2014, and shall renew automatically for additional one year terms, unless either party sends notice to the other party of its intent to terminate the agreement at least 180 days prior to the expiration of the then current term of the agreement.


NuGen has entered into agreements with unrelated parties for the lease of railcars that will be used to ship ethanol and distillers grains. These leases expire on various dates through September 30, 2022. NuGen pays a monthly lease amount per railcar. NuGen paid approximately $4,350,000, $2,714,000 and $482,000 pursuant to the leases in fiscal years 2013, 2012 and 2011, respectively.


NuGen has a contract with an unrelated party (“Distillers Grains Marketer”) for distillers grains marketing services. Under the terms of the contract, the Distillers Grains Marketer will purchase all of NuGen’s distillers grains production during the term of the contract. The contract requires NuGen to pay a percentage of the net sales price. The company incurred fees of approximately $838,000 $833,000 and $897,000 in fiscal years 2013, 2012 and 2011, respectively. The termination date of the contract is July 31, 2014.