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11. Agreements

6 Months Ended

Jun. 30, 2013

Working Capital Arrangement. In May 2013 we extended the annual Grain Procurement and Working Capital Agreement with J.D. Heiskell that has been in place since March 2011. Pursuant to the agreement we agreed to procure whole yellow corn and grain sorghum (also called “milo”) from J.D. Heiskell. We have the ability to obtain grain from other sources subject to certain conditions, however, in the past all of our grain purchases have been from Heiskell. Title and risk of loss of the corn passes to the Company when the corn is deposited into the weigh bin. The term of the Agreement expires on December 31, 2013 and is automatically renewed for additional one-year terms. Heiskell further agrees to sell all ethanol to Kinergy Marketing or other marketing purchaser designated by the Company and all WDG and syrup to A.L. Gilbert. These agreements are ordinary purchase and sale agency agreements for an ethanol plant.

The J.D. Heiskell sales activity associated with the Purchasing Agreement, Grain Procurement and Working Capital Agreements during the three and six months ending June 30, 2013 and June 30, 2012 follow:

	6 months ending June 30, 2013		6 months ending June 30, 2012		3 months ending June 30, 2013		3 months ending June 30, 2012
Ethanol sales	$	32,739,882		63,117,908	$	27,242,694		31,064,699
Wet distiller's grains sales		8,005,737		15,941,056		6,321,953		8,109,315
Corn oil sales		630,227		166,509		455,184		166,509
Corn purchases		31,519,323		74,431,277		26,145,005		37,646,472
Milo purchases		4,648,364		-		4,648,364		-
Accounts receivable		1,578,206		890,716		1,578,206		890,716
Accounts payable		2,096,112		3,097,956		2,096,112		3,097,956

Ethanol and Wet Distillers Grains Marketing Arrangement. The Company entered into an Ethanol Marketing Agreement with Kinergy Marketing and a Wet Distillers Grains marketing agreement with A. L Gilbert. Under the terms of the agreements, subject to certain conditions, the agreements mature on August 31, 2013 with automatic one-year renewals thereafter. For the three months ended June 30, 2013 and 2012, the Company expensed marketing costs of $509,124 and $578,190, respectively, under the terms of both ethanol and wet distillers grains agreements. For the six months ended June 30, 2013 and 2012, the Company expensed marketing costs of $633,123 and $1,120,655, respectively.