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8. Agreements

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Working Capital Arrangement. Pursuant to the J.D. Heiskell Procurement Agreement, the Company agreed to procure whole yellow corn and grain sorghum primarily from J.D. Heiskell. The Company has the ability to obtain grain from other sources subject to certain conditions; however, in the past all the Company’s grain purchases have been from J.D. Heiskell. Title and risk of loss of the corn pass to the Company when the corn is deposited into the Keyes Plant weigh bin. The term of the J.D. Heiskell Procurement Agreement expires on December 31, 2020 and the term can be automatically renewed for additional one-year terms. J.D. Heiskell further agrees to sell all ethanol the Company produces to Kinergy or other marketing purchasers designated by the Company and all WDG the Company produces to A.L. Gilbert. The Company markets and sells DCO to A.L. Gilbert and other third parties. The Company’s relationships with J.D. Heiskell, Kinergy, and A.L. Gilbert are well established and the Company believes that the relationships are beneficial to all parties involved in utilizing the distribution logistics, reaching out to widespread customer base, managing inventory, and building working capital relationships. Revenue is recognized upon delivery of ethanol to J. D. Heiskell as revenue recognition criteria have been met and any performance required of the Company subsequent to the sale to J.D. Heiskell is inconsequential. These agreements are ordinary purchase and sale agency agreements for the Keyes Plant.

The J.D. Heiskell sales and purchases activity associated with the J.D. Heiskell Purchase Agreement and the J.D. Heiskell Procurement Agreement during the three months ended March 31, 2020, and 2019 were as follows:

	As of and for the three months ended March 31,
	2020		2019
Ethanol sales	$	24,383	$	27,189
Wet distiller's grains sales		8,374		8,603
Corn oil sales		928		800
Corn purchases		29,214		29,261
Accounts receivable		60		1,340
Accounts payable		1,749		2,766

Ethanol and Wet Distillers Grains Marketing Arrangement. The Company entered into an Ethanol Marketing Agreement with Kinergy and a Wet Distillers Grains Marketing Agreement with A.L. Gilbert. The Ethanol Marketing Agreement matures on August 31, 2020 and the Wet Distillers Grains Marketing Agreement matures on December 31, 2020 with automatic one-year renewals thereafter. For the three months ended March 31, 2020 and 2019, the Company expensed marketing costs of $0.6 million for each period respectively, under the terms of each agreement.