sdsp-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

☒ COMMISSION FILE NO. 000-50253


SOUTH DAKOTA SOYBEAN PROCESSORS LLC
(Exact name of registrant as specified in its charter)


SD						46-0462968
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

100 Caspian Ave; PO Box 500 Volga, SD						57071
(Address of Principal Executive Offices						(Zip Code)


(605) 627-9240
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer

Accelerated Filer

Non-Accelerated Filer

Smaller Reporting Company

Emerging Growth Company

(do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for company with a new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

¨ Yes x No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: On May 9, 2025, the registrant had 30,411,500 capital units outstanding.

Table of Contents


			Page

Part I.	FINANCIAL INFORMATION		3

	Item I.	Consolidated Financial Statements (Unaudited)	3

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21

	Item 4.	Controls and Procedures	21

Part II.	OTHER INFORMATION		21

	Item 1.	Legal Proceedings	21

	Item 1A.	Risk Factors	22

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

	Item 3.	Defaults among Senior Securities	22

	Item 4.	Mine Safety Disclosures	22

	Item 5.	Other Information	22

	Item 6.	Exhibits	22

Signatures			23

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

South Dakota Soybean Processors, LLC

Condensed Consolidated Financial Statements

March 31, 2025 and 2024

South Dakota Soybean Processors, LLC

Condensed Consolidated Balance Sheets


	March 31, 2025		December 31, 2024
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	6,417,852	$	39,594,084
Trade accounts receivable	27,762,639		29,771,609
Inventories	66,258,532		45,078,676
Commodity derivative instruments	7,113,329		9,600,761
Prepaid expenses	2,150,595		2,976,524
Total current assets	109,702,947		127,021,654

Property and equipment	495,304,869		435,335,629
Less accumulated depreciation	(77,409,193)		(75,554,375)
Total property and equipment, net	417,895,676		359,781,254

Other assets
Investments	19,156,025		18,605,021
Right-of-use lease asset, net	35,013,228		35,829,689
Other assets	656,000		656,000
Total other assets	54,825,253		55,090,710

Total assets	$	582,423,876	$	541,893,618

(continued on the following page)

South Dakota Soybean Processors, LLC

Condensed Consolidated Balance Sheets (continued)


	March 31, 2025		December 31, 2024
	(Unaudited)
Liabilities and Members' Equity
Current liabilities
Excess of outstanding checks over bank balance	$	8,079,993	$	12,972,629
Note payable - seasonal loan	7,352,079		—
Current maturities of long-term debt	6,500,000		9,000,000
Accounts payable	1,770,380		3,979,895

Accrued commodity purchases	31,481,084		54,412,561
Commodity derivative instruments	3,290,277		3,500,672
Current portion- operating leases	3,567,109		3,512,822
Accrued expenses	4,340,524		4,623,969

Contract liabilities	6,458,366		10,524,222
Total current liabilities	72,839,812		102,526,770

Long-term liabilities
Long-term debt, net	133,086,482		57,673,180
Long-term operating lease liabilities	29,069,333		29,881,151
Other long-term liabilities	15,053,402		15,855,793
Total long-term liabilities	177,209,217		103,410,124

Commitments and contingencies (Notes 4, 5, 6, and 10)

Members' equity (30,411,500 units issued and outstanding)	174,980,121		178,279,321
Non-controlling interests in consolidated entities	157,394,726		157,677,403
Total members' equity	332,374,847		335,956,724

Total liabilities and members' equity	$	582,423,876	$	541,893,618

The accompanying notes are an integral part of these condensed consolidated financial statements.

South Dakota Soybean Processors, LLC

Condensed Consolidated Statements of Operations (Unaudited)

For the Three-Month Periods Ended March 31, 2025 and 2024



	2025		2024

Revenues	$	117,913,309	$	148,260,904

Cost of revenues:
Cost of product sold	90,093,330		120,305,605
Production	10,643,751		9,387,312
Freight and rail	11,269,924		11,231,938
Total cost of revenues	112,007,005		140,924,855

Gross profit	5,906,304		7,336,049

Operating expenses:
Administration	1,724,966		1,634,373
Operating income	4,181,338		5,701,676

Other income (expense):
Interest expense	(1,150,926)		(1,453,991)
Other non-operating income (expense)	214,623		1,401,412
Patronage dividend income	845,361		429,888
Total other income (expense)	(90,942)		377,309

Net income	4,090,396		6,078,985

Net income (loss) attributable to non-controlling interests in consolidating entities	(282,677)		604,531
Net income attributable to Company	$	4,373,073	$	5,474,454

Basic and diluted earnings per capital unit	$	0.14	$	0.18

Weighted average number of capital units outstanding for calculation of basic and diluted earnings per capital unit	30,411,500		30,411,500

The accompanying notes are an integral part of these condensed consolidated financial statements.

South Dakota Soybean Processors, LLC

Condensed Consolidated Statements of Changes in Members' Equity (Unaudited)

For the Three Months Ended March 31, 2025 and 2024


	Class A Units			Noncontrolling		Total
	Units	Amount		Interests		Equity

Balances, December 31, 2023	30,411,500	$	197,494,454	$	98,737,147	$	296,231,601
Net income	—	5,474,454		604,531		6,078,985
Distribution to members	—	(39,534,950)		—		(39,534,950)
Issuance of units in consolidated entities	—	—		57,500,000		57,500,000
Redemption of units in consolidated entities	—	—		(2,500)		(2,500)
Balances, March 31, 2024	30,411,500	$	163,433,958	$	156,839,178	$	320,273,136

Balances, December 31, 2024	30,411,500	$	178,279,321	$	157,677,403	$	335,956,724
Net income (loss)	—	4,373,073		(282,677)		4,090,396
Distributions to members	—	(7,672,273)		—		(7,672,273)

Balances, March 31, 2025	30,411,500	$	174,980,121	$	157,394,726	$	332,374,847

The accompanying notes are an integral part of these condensed consolidated financial statements.

South Dakota Soybean Processors, LLC

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the Three Months Ended March 31, 2025 and 2024


	2025		2024
Operating activities
Net income	$	4,090,396	$	6,078,985


Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	1,982,056		1,504,134
Net gain recognized on derivative activities	(133,560)		(1,496,432)


Non-cash patronage dividends	(184,892)		(59,701)

Change in current operating assets and liabilities	(45,701,126)		(37,843,896)


Net cash used in operating activities	(39,947,126)		(31,816,910)

Investing activities




Increase in other assets	—		(319,500)

Purchase of property and equipment	(60,803,453)		(22,819,989)


Net cash used in investing activities	(60,803,453)		(23,139,489)

Financing activities
Change in excess of outstanding checks over bank balances	(4,892,636)		(10,752,187)
Net proceeds (payments) from seasonal borrowings	7,352,079		54,255,183
Proceeds from issuance of capital units	—		57,500,000
Distributions paid to members	(7,672,273)		(39,534,950)

Proceeds from long-term debt	76,037,177		56,400,000
Principal payments on long-term debt	(3,250,000)		(600,000)
Net cash provided by financing activities	67,574,347		117,268,046

Net change in cash and cash equivalents	(33,176,232)		62,311,647

Cash and cash equivalents, beginning of period	39,594,084		72,910,336

Cash and cash equivalents, end of period	$	6,417,852	$	135,221,983

Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	1,150,926	$	678,278



Noncash investing and financing activities:
Soybean meal contributed as investment	$	366,112	$	1,436,420

Property and equipment included in accounts payable and other long-term liabilities	$	14,886,599	$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

South Dakota Soybean Processors, LLC

Notes to Condensed Consolidated Financial Statements

Note 1 - Principal Activity and Significant Accounting Policies

The unaudited condensed consolidated financial statements contained herein have been prepared pursuant to the rules and regulations of the Securities Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although South Dakota Soybean Processors, LLC (the “Company”, “LLC”, “we”, “our”, or “us”) believes that the disclosures made are adequate to make the information not misleading.

In the opinion of management, all normal recurring adjustments considered necessary for a fair presentation have been included in the accompanying condensed consolidated financial statements. The results of operations and cash flows for interim periods are not necessarily indicative of results for a full year due in part to the seasonal nature of some of the Company’s businesses. The balance sheet data as of December 31, 2024 has been derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

These statements should be read in conjunction with the financial statements and notes thereto for the year ended December 31, 2024, included in the Company’s annual report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 28, 2025.

Principles of consolidation

The accompanying consolidated financial statements include the accounts of the Company and its controlled subsidiaries, High Plains Partners, LLC, HPP SD Holdings, LLC, and High Plains Processing, LLC. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of estimates

The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Receivables and Credit Policies

Accounts receivable are considered past due when payments are not received on a timely basis in accordance with the Company’s credit terms, which are generally thirty to sixty days from invoice date. Accounts considered uncollectible are written off. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering customers' financial condition, credit history, current and future economic conditions, and unusual circumstances, if any. The valuation allowance was determined to be immaterial as of March 31, 2025 and December 31, 2024, respectively.

Revenue

The Company accounts for all its revenues from contracts with customers under ASC 606, Revenue from Contracts with Customers.

The Company principally generates revenue from merchandising and transporting manufactured agricultural products used as ingredients in food, feed, energy, and industrial products. Revenue is measured based on the consideration specified in the contract with a customer and excludes any amounts collected on behalf of third parties (e.g. - taxes). The Company follows a policy of recognizing revenue at a single point in time when it satisfies its performance obligation by transferring control over a product to a customer. Control transfer typically occurs when goods are shipped from our facilities or at other predetermined control transfer points (for instance, destination terms). Shipping and handling costs related to contracts with customers for the sale of goods are accounted for as a fulfillment activity and are included in the cost of revenues. Accordingly, amounts billed to customers for such costs are included as a component of revenues.

South Dakota Soybean Processors, LLC

Notes to Condensed Consolidated Financial Statements

Contract liabilities relate to advance payments from customers for goods and services the Company has yet to provide. These customer prepayments totaled $6,458,366 and $10,524,222 as of March 31, 2025 and December 31, 2024, respectively. Of the $10,524,222 balance as of December 31, 2024, the Company recognized $4,558,128 as revenues for the three months ended March 31, 2025. Of the $737,503 customer prepayments as of December 31, 2023, the Company recognized $352,355 of contract liabilities as revenues during the three months ended March 31, 2024.

The following table presents a disaggregation of revenue from contracts with customers for the three-month periods ended March 31, 2025 and 2024, by product type:



	2025		2024

Soybean meal and hulls	$	68,255,432	$	83,398,043
Soybean oil and oil byproducts	49,657,877		64,862,861

Totals	$	117,913,309	$	148,260,904

Recent accounting pronouncements

Any recent accounting pronouncements are not expected to have a material impact on our condensed financial statements.

Note 2 - Inventories

The Company’s inventories consist of the following on March 31, 2025 and December 31, 2024:


	March 31, 2025		December 31, 2024
Finished goods	$	29,239,049	$	27,477,041
Raw materials	36,463,448		17,090,010
Supplies & other inventories	556,035		511,625

Totals	$	66,258,532	$	45,078,676

Finished goods and raw materials are valued at estimated market value, which approximates net realizable value. Supplies and other inventories are stated at the lower of cost or net realizable value.

South Dakota Soybean Processors, LLC

Notes to Condensed Consolidated Financial Statements

Note 3 - Property and Equipment

The following is a summary of the Company's property and equipment at March 31, 2025 and December 31, 2024:


	2025						2024
	Cost		Accumulated Depreciation		Net		Net
Land	$	516,326	$	—	$	516,326	$	516,326
Land improvements	2,802,812		(1,436,662)		1,366,150		1,364,197
Buildings and improvements	35,351,616		(12,999,780)		22,351,836		22,531,217
Machinery and equipment	112,389,406		(60,731,277)		51,658,129		51,949,033
Railroad cars	10,411,185		(941,782)		9,469,403		9,521,459
Company vehicles	280,949		(146,079)		134,870		143,184
Furniture and fixtures	2,046,444		(1,153,613)		892,831		719,557
Construction in progress	331,506,131		—		331,506,131		273,036,281

Totals	$	495,304,869	$	(77,409,193)	$	417,895,676	$	359,781,254

Depreciation of property and equipment was $1,855,931 and $1,504,134 for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, the Company had unpaid commitments of approximately $118.6 million for construction and acquisition of property and equipment and is scheduled to be completed by the fourth quarter of 2025.

The Company capitalized interest on major construction projects in progress of approximately $1,130,000 and $0, for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025 and December 31, 2024, respectively, the Company has approximately $14.9 million and $15.7 million respectively, in payables related to the construction of the facility in Mitchell, South Dakota. These construction payables are classified as non-current liabilities due to management's intent and ability to settle these liabilities using the Company’s long-term credit facilities.

Note 4 - Note Payable – Seasonal Loan

The Company entered into a revolving credit agreement with a lending institution which expires on December 1, 2025. The purpose of the credit agreement is to finance the operating needs of the Company. Under this agreement, the Company could borrow up to $70 million, with all advances secured. Interest accrues at a variable rate (6.56% as of March 31, 2025). The Company pays a 0.20% annual commitment fee on any funds not borrowed. Outstanding advances totaled $7,352,079 and $0 as of March 31, 2025 and December 31, 2024, respectively. The remaining available funds to borrow under the terms of the revolving credit agreement were approximately $62.6 million as of March 31, 2025.

Beginning July 1, 2025, the credit facilities agreement will provide the Company a revolving seasonal loan which expires on September 1, 2026. The purpose of the credit agreement is to finance the operating needs of High Plains Processing, LLC. Under this agreement, the Company could borrow up to $85 million, and advances on the revolving credit agreement are secured. Interest accrues at a variable rate (7.76% at March 31, 2025). The Company pays a 0.20% annual commitment fee on any funds not borrowed. There were no advances outstanding as of March 31, 2025 and December 31, 2024

South Dakota Soybean Processors, LLC

Notes to Condensed Consolidated Financial Statements

Note 5 - Long-Term Debt

The following is a summary of the Company's long-term debt on March 31, 2025 and December 31, 2024:


	March 31, 2025		December 31, 2024
Revolving term loans	$	61,750,000	$	50,500,000
Delayed-draw term loan	80,252,312		18,715,135
	142,002,312		69,215,135
Less current maturities	(6,500,000)		(9,000,000)
Less unamortized debt issuance costs	(2,415,830)		(2,541,955)

	$	133,086,482	$	57,673,180

The Company has a credit agreement with a lending institution that includes a revolving term loan and a seasonal loan. The credit agreements are secured by substantially all business assets of South Dakota Soybean Processors, LLC.

The revolving term loan provides for a maximum borrowing of $65.0 million and the amount available for borrowing on the revolving term loan will decrease by $3.25 million every six months until the loan's maturity date of March 20, 2028. Interest accrues under the agreement at a rate equal to (i) the daily Secured Overnight Financing Rate, plus (ii) a specified applicable margin. The interest rate as of March 31, 2025 was 6.86%. The Company pays a 0.40% annual commitment fee on any funds not borrowed. There were no remaining commitments available to borrow on the revolving term loan as of March 31, 2025.

The Company has a credit facilities agreement with a lending institution that includes a delayed-draw term loan, a revolving term loan, and a revolving seasonal loan. The credit facilities agreement is secured by substantially all business assets of the High Plains Processing, LLC.

The delayed-draw term loan provides borrowing up to $254.0 million until March 31, 2026 to finance the construction of the operating facility in Mitchell, South Dakota. The Company will make quarterly principal payments of $4.50 million plus interest beginning six months after the outside completion date as defined within the agreement. The quarterly principal payments will increase each year by $1.0 million on the anniversary date. The delayed-draw term loan matures on December 31, 2029. Interest accrues under the agreement at a rate equal to (i) the daily Secured Overnight Financing Rate, plus (ii) a specified applicable margin. The interest rate as of March 31, 2025 was 7.76%. The Company pays a 0.50% annual commitment fee on any funds not borrowed. There were approximately $173.75 million available to borrow on the delayed draw term loan as of March 31, 2025.

The revolving term loan provides for a maximum borrowing of $40.0 million. The revolving term loan matures on December 31, 2029. Interest accrues under the agreement at a rate equal to (i) the daily Secured Overnight Financing Rate, plus (ii) a specified applicable margin. The interest rate as of March 31, 2025 was 7.76%. The Company pays a 0.50% annual commitment fee on any funds not borrowed. There were $40 million in remaining commitments available to borrow on the revolving term loan as of March 31, 2025.

Under the agreements, the Company is subject to compliance with standard financial covenants and the maintenance of certain financial ratios that limits distributions.

South Dakota Soybean Processors, LLC

Notes to Condensed Consolidated Financial Statements

The following are minimum principal payments on long-term debt obligations for the twelve-month periods ending March 31:


2026	$	6,500,000
2027	24,500,000
2028	70,750,000
2029	26,000,000
2030	14,252,312


Total	$	142,002,312

Note 6 - Operating Leases

The Company has several operating leases for railcars, machinery and equipment, and storage facilities. These leases have terms ranging from 3-12 years and most do not have renewal terms provided. The Company does not have lease arrangements with residual value guarantees, sale-leaseback terms or material restrictive covenants. The Company does not have any material finance lease obligations nor sublease agreements.

Lease expense for these operating leases is recognized on a straight-line basis over the lease terms. The components of lease costs recognized within our condensed consolidated statements of operations for the three-month periods ended March 31, 2025 and 2024 were as follows:



	2025		2024

Cost of revenues - Freight and rail	$	1,292,470	$	1,071,723
Cost of revenues - Production	84,148		65,709
Administration expenses	6,434		4,492
Total operating lease costs	$	1,383,052	$	1,141,924

The following summarizes the supplemental cash flow information for the three-month periods ended March 31, 2025 and 2024:



	2025		2024

Cash paid for amounts included in the measurement of lease liabilities	$	946,860	$	1,024,371

Supplemental non-cash information:
Right-of-use assets obtained in exchange for lease liabilities	$	155,886	$	831,971

The following summarizes the weighted-average remaining lease term and weighted-average discount rate as of March 31, 2025:


Weighted-average remaining lease-term - operating leases (in years)	9.3

Weighted-average discount rate - operating leases	4.8	%

South Dakota Soybean Processors, LLC

Notes to Condensed Consolidated Financial Statements

The following is a maturity analysis of the undiscounted cash flows of the operating lease liabilities as of March 31, 2025:


	Railcars		Other		Total
Twelve-month periods ended March 31:
2026	$	5,163,159	$	73,950	$	5,237,109
2027	4,958,634		69,416		5,028,050
2028	4,199,909		64,902		4,264,811
2029	4,191,219		52,289		4,243,508
2030	4,041,594		32,117		4,073,711
Thereafter	17,735,294		48,607		17,783,901
Total lease payments	40,289,809		341,281		40,631,090
Less amount of lease payments representing interest	(7,941,852)		(52,796)		(7,994,648)

Total present value of lease payments	$	32,347,957	$	288,485	$	32,636,442

Note 7 - Member Distribution

On February 4, 2025, the Company’s Board of Managers declared and approved a cash distribution of approximately $7.6 million, or $0.25 per capital unit. The distribution was paid in accordance with the Company’s operating agreement and distribution policy in February 06, 2025.

Note 8 - Derivative Instruments and Hedging Activities

In the ordinary course of business, the Company enters into contractual arrangements as a means of managing exposure to changes in commodity prices and, occasionally, foreign exchange and interest rates. The Company’s derivative instruments primarily consist of commodity futures, options and forward contracts, and interest rate swaps, caps and floors. Although these contracts may be effective economic hedges of specified risks, they are not designated as, nor accounted for, as hedging instruments. Futures and options contracts, along with margin deposit, are with a single counterparty and are subject to a right of offset. As a result, these items are netted on the balance sheet, regardless of their position. In contrast, forward contracts are with multiple counterparties and do not have a right of offset. Therefore, these contracts are reported at their gross amounts on the balance sheet. These contracts are recorded on the Company’s consolidated balance sheets at fair value as discussed in Note 9, Fair Value.

Derivatives not designated as hedging instruments at of March 31, 2025 and December 31, 2024 were as follows:


	Balance Sheet Classification	March 31, 2025		December 31, 2024

Forward contracts in gain position		$	4,660,461	$	4,839,408
Futures and options in gain position		3,266,260		4,415,641
Futures and options in loss position		(4,310,902)		(3,614,540)
Total forward, futures and options contracts		3,615,819		5,640,509
Margin deposit		3,497,510		3,960,252
	Current assets	$	7,113,329	$	9,600,761

Forward contracts in loss position		$	3,265,099	$	3,483,207
Interest rate swap		25,178		17,465
	Current liabilities	$	3,290,277	$	3,500,672

South Dakota Soybean Processors, LLC

Notes to Condensed Consolidated Financial Statements

During the three-month periods ended March 31, 2025 and 2024, net realized and unrealized gains (losses) on derivative transactions were recognized in the condensed consolidated statements of operations as follows:




	2025		2024
Derivatives not designated as hedging instruments:
Commodity contracts	$	168,740	$	1,414,819
Foreign exchange contracts	(27,467)		45,866
Interest rate swaps, caps and floors	(7,713)		35,747

Totals	$	133,560	$	1,496,432

Note 9 - Fair Value

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a comprehensive framework for measuring fair value and expands disclosures that are required about fair value measurements. Specifically, this guidance establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. The three levels of hierarchy and examples are as follows:

•Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange and commodity derivative contracts listed on the Chicago Board of Trade (“CBOT”).

•Level 2 – Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs, such as commodity prices using forward future prices.

•Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.

The following tables set forth financial assets and liabilities measured at fair value in the condensed balance sheets and the respective levels to which fair value measurements are classified within the fair value hierarchy as of March 31, 2025 and December 31, 2024:


	Fair Value as of March 31, 2025
	Level 1		Level 2		Level 3		Total
Financial assets:
Inventory	$	—	$	65,702,497	$	—	$	65,702,497
Commodity derivative instruments	$	(1,044,642)	$	1,370,184	$	—	$	325,542
Provisionally priced contracts	$	—	$	14,596,330	$	—	$	14,596,330


	Fair Value as of December 31, 2024
	Level 1		Level 2		Level 3		Total
Financial assets:
Inventory	$	—	$	44,241,428	$	—	$	44,241,428
Commodity derivative instruments	$	801,101	$	1,338,736	$	—	$	2,139,837
Provisionally priced contracts	$	—	$	13,593,068	$	—	$	13,593,068

South Dakota Soybean Processors, LLC

Notes to Condensed Consolidated Financial Statements

The Company enters into various commodity derivative instruments, including futures, options, swaps and other agreements. The fair value of the Company’s commodity derivatives is determined using unadjusted quoted prices for identical instruments on the CBOT. The Company estimates the fair market value of their finished goods and raw materials inventories using the market price quotations of similar forward futures contracts listed on the CBOT and adjusts for the local market adjustments derived from other grain terminals in our area.

The Company considers the carrying amount of significant classes of financial instruments on the condensed consolidated balance sheets, including cash, accounts receivable, and accounts payable, to be reasonable estimates of fair value due to their length or maturity. The fair value of the Company’s long-term debt approximates the carrying value. The interest rates on the long-term debt are similar to rates the Company would be able to obtain currently in the market.

The Company has patronage investments in other cooperatives and common and preferred stock holdings in privately held entities. There is no market for their patronage credits or the entity’s common and preferred holdings, and it is impracticable to estimate the fair value of the Company’s investments. These investments are carried on the balance sheet at the original cost plus the amount of patronage earnings allocated to the Company, less any cash distributions received.

Note 10 - Commitments and Contingencies

From time to time in the ordinary course of our business, the Company may be named as a defendant in legal proceedings related to various issues, including without limitation, workers’ compensation claims, tort claims, or contractual disputes. The Company carries insurance that provides protection against general commercial liability claims, claims against our directors, officers and employees, business interruption, automobile liability, and workers' compensation. The Company is not currently involved in any material legal proceedings and is not aware of any potential claims.

Note 11 - Subsequent Event

The Company evaluated all of its activities and concluded that no subsequent events have occurred that would require recognition in its financial statements or disclosed in the notes to its financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

The information in this quarterly report on Form 10-Q for the three-month period ended March 31, 2025, (including reports filed with the Securities and Exchange Commission (the “SEC” or “Commission”), contains “forward-looking statements” that deal with future results, expectations, plans and performance, and should be read in conjunction with the financial statements and Annual Report on Form 10-K for the year ended December 31, 2024. Forward-looking statements may include statements which use words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “predict,” “hope,” “will,” “should,” “could,” “may,” “future,” “potential,” or the negatives of these words, and all similar expressions. Forward-looking statements involve numerous assumptions, risks and uncertainties. Actual results or actual business or other conditions may differ materially from those contemplated by any forward-looking statements. Factors that could cause actual results to differ materially from the forward-looking statements are identified in our Form 10-K for the year ended December 31, 2024.

We are not under any duty to update the forward-looking statements contained in this report, nor do we guarantee future results or performance or what future business conditions will be like. We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this report.

Executive Overview and Summary

Our consolidated net income for the three-months ended March 31, 2025 decreased from $6.1 million in 2024 to $4.1 million in 2025. The Chicago Board Crush, a key measure of soybean processing profitability published by the Chicago Board of Trade, has edged slightly lower compared to the previous three-month period. A softening in demand for soybean oil was the principal cause for the decrease in net income.

Regulatory developments and uncertainty tied to biofuels programs also played a role. While the full implications of the 45Z production credit for clean transportation fuel remains unclear, market sentiment suggests a strong desire to expand renewable fuel output and to address the increasing volume of used cooking oil imports.

Looking ahead, the market in 2025 appears to be gradually adapting to the challenges encountered in 2024. Soybean meal and oil exports are currently tracking at a record-setting pace, although the potential for global tariffs may temper future progress. Nonetheless, we are well positioned to capitalize on market opportunities, supported by an ample supply of soybeans from last year’s crop. This robust supply base enhances our operational flexibility and strengthens our export competitiveness in a dynamic global environment.

On the operational front, the High Plains Processing plant near Mitchell, South Dakota—co-owned through our subsidiaries—is progressing well. Construction remains on schedule and equipment deliveries are nearly complete. Barring any significant weather-related disruptions or construction delays, we expect the plant to begin operations in the fall of 2025.

RESULTS OF OPERATIONS

Comparison of the Three Months Ended March 31, 2025 and 2024


	Three Months Ended March 31, 2025			Three Months Ended March 31, 2024
	$		% of Revenue	$		% of Revenue
Revenue	$	117,913,309	100.0	$	148,260,904	100.0
Cost of revenues	(112,007,005)		(95.0)	(140,924,855)		(95.1)
Gross profit	5,906,304		5.0	7,336,049		4.9
Operating expenses	(1,724,966)		(1.5)	(1,634,373)		(1.1)
Interest expense	(1,150,926)		(1.0)	(1,453,991)		(1.0)
Other non-operating income (expense)	1,059,984		0.9	1,831,300		1.2
Net income	4,090,396		3.5	6,078,985		4.1
Net income (loss) attributable to non-controlling interests in consolidated entities	(282,677)		(0.2)	604,531		0.4

Net income attributable to Company	$	4,373,073	3.7	$	5,474,454	3.7

Revenue – Revenue decreased by $30.3 million, or 20.5%, for the three months ended March 31, 2025, compared to the same period in 2024 due to decreases in the average sales price of soybean products. The average price of soybean oil decreased 21.4% during the three months ended March 31, 2025, compared to the same period in 2024, due to a decrease in demand from the energy sector as refining margins for biodiesel and renewable diesel producers came under pressure from overproduction, which led to production slowdowns at some location, and a trend that has continued into 2025. In addition, imports of used cooking oil and other feedstocks lower-priced alternatives to soybean oil flooded the market and directly affected soybean oil sales. The average soybean meal prices also declined by 18.7% from 2024 due to an increase in U.S. soybean crushing capacity in 2024.

Gross Profit/Loss – Gross profit decreased by $1.4 million, or 19.5%, for the three months ended March 31, 2025, compared to the same period in 2024. The decrease was mainly due to declining board crush margins which was caused by a decrease in demand for soybean oil and an increase in the U.S. soybean meal supply.

Operating Expenses – Administrative expenses, including all selling, general and administrative expenses, remained relatively constant during the three months ended March 31, 2025, compared to the same period in 2024.

Interest Expense – Interest expense decreased by $303,000, or 20.8%, during the three months ended March 31, 2025, compared to the same period in 2024. The decrease in interest expense was principally due to a decrease in borrowings from our credit facilities (excluding loans by our subsidiary, High Plains Processing), with an average debt level of $56.7 million during the three months ended March 31, 2025, compared to $74.0 million during the same period in 2024. Additionally, approximately $1.1 million in interest costs related to the construction of the High Plains Processing facility were capitalized during the three months ended March 31, 2025, compared to $0 in the same period of 2024.

Other Non-Operating Income – Other non-operating income (expense), including patronage dividend income, decreased $0.8 million during the three months ended March 31, 2025, compared to the same period in 2024. The decline was primarily driven by an approximate $1.1 million decrease in interest income earned on investment proceeds held by our subsidiaries in connection with the equity financing of the High Plains Processing plant.

Net Income/Loss – During the three-month period ended March 31, 2025, we generated net income attributed to the Company of $4.4 million compared to $5.5 million for the same period in 2024. The $1.1 million decrease was primarily attributable to decreased gross margins.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash generated from operations and borrowings from our two revolving lines of credit, which are discussed in the section titled “Indebtedness.” As of March 31, 2025, we had working capital, defined as current assets less current liabilities, of approximately $36.9 million, compared to $151.2 million on March 31, 2024. Working capital decreased between periods primarily due to expenditures related to the construction and development of the High Plains Processing plant, which we have a controlling ownership stake through our subsidiaries.

Comparison of the Three Months Ended March 31, 2025 and 2024


	2025		2024
Net cash used for operating activities	$	(39,947,126)	$	(31,816,910)
Net cash used for investing activities	(60,803,453)		(23,139,489)
Net cash provided by financing activities	67,574,347		117,268,046

Cash Flows Provided By (Used For) Operations

The $8.1 million increase in cash flows used for operating activities was largely due to a $10.0 million increase in inventories offset by a decrease in net income of approximately $2.0 million.

Cash Flows Used For Investing Activities

The $37.7 million increase in cash flows used for investing activities during the three-month period ended March 31, 2025, compared to the same period in 2024, was due to an increase in expenditures for purchases of various property and equipment used for the construction and development of the High Plains Processing plant.

Cash Flows Provided By Financing Activities

The $49.7 million decrease in cash flows provided by financing activities was principally due to a decrease in proceeds from issuance of new capital units in our consolidated entities and a decrease in borrowings with our lender. During the three months ended March 31, 2024, our subsidiaries received $57.5 million in investment proceeds in connection with their equity financing, which were subsequently contributed for the construction and development of the High Plains Processing plant. Net proceeds from seasonal borrowings and long-term debt were $80.1 million during the three months ended March 31, 2025, compared to $110.1 million during the same period in 2024. Partially offsetting the decrease was a $31.8 million reduction in cash distributions to members during the three-month period ended March 31, 2025, compared to the same period in 2024.

Indebtedness

We hold various credit facilities with CoBank, our primary lender, to meet the short and long-term needs of our operations. The first credit line is a revolving long-term loan. Under this loan, we may borrow funds, as needed, up to the credit line maximum, or $65.0 million, and then pay down the principal whenever excess cash is available. Repaid amounts may be borrowed up to the available credit line. The available credit line decreases by $3.25 million every six months until the credit line’s maturity on March 20, 2028, at which time a balloon payment for the remaining balance is due. We pay a 0.40% annual commitment fee on any funds not borrowed. The principal balance outstanding on the revolving term loan was $61.8 million and $50.5 million as of March 31, 2025 and December 31, 2024, respectively. Under this loan, there were no additional funds available to borrow as of March 31, 2025.

The second credit line is a revolving working capital (seasonal) loan. The primary purpose of this loan is to finance our operating needs. We may borrow up to $70.0 million until the loan's maturity on December 1, 2025. We pay a 0.20% annual commitment fee on any funds not borrowed; however, we have the option to reduce the credit line during any given commitment period listed in the credit agreement to avoid the commitment fee. As of March 31, 2025 and December 31, 2024, the principal balance outstanding on this credit line was $7.4 million and $0, respectively. Under this loan, there were $62.6 million of additional funds available to borrow as of March 31, 2025.

The third line of credit is a delayed-draw term loan. Under this loan, our subsidiary may borrow funds, as needed up to $254.0 million until March 31, 2026. Principal payments of $4.5 million are made quarterly beginning six months after the completion date of the High Plains Processing facility. The quarterly principal payments will increase by $1.0 million on the anniversary date and continue until the maturity date of December 31, 2029. Our subsidiary pays a 0.50% annual commitment fee on any funds not borrowed;. The principal balance outstanding on this note was $80.3 million and $18.7 million as of March 31, 2025 and December 31, 2024, respectively. Under this note, there were $173.7 million of funds available to borrow as of March 31, 2025.

The fourth credit line is a revolving long-term loan. Under this loan, our subsidiary may borrow funds, as needed, up to the credit line maximum, or $40.0 million, and then pay down the principal whenever excess cash is available. Repaid amounts may be borrowed up to the available credit line until the credit line’s maturity on December 31, 2029 at which time a balloon payment for the remaining balance is due. Our subsidiary pays a 0.50% annual commitment fee on any funds not borrowed. The principal balance outstanding on the revolving term loan was $0 as of March 31, 2025 and December 31, 2024. Under this loan, there were $40.0 million of additional funds available to borrow as of March 31, 2025.

The last credit line is a revolving working capital (seasonal) loan. The primary purpose of this loan is to finance the operating needs of the High Plains Processing facility. Beginning July 1, 2025, our subsidiary may borrow up to $85.0 million until the loan's maturity on September 1, 2026. A 0.20% annual commitment fee is paid on any funds not borrowed; however, we have the option to reduce the credit line during any given commitment period listed in the credit agreement to avoid the commitment fee. As of March 31, 2025 and December 31, 2024, there was no principal balance outstanding on this credit line.

The revolving, seasonal and delayed-draw term loans with CoBank are set up with a variable rate option. The variable rate is set daily by CoBank. We also have a fixed rate option on all three loans, allowing us to fix rates for any period between one day and the entire commitment period. The annual interest rate on the loans was range between 6.56% and 7.76% as of March 31, 2025.

OFF BALANCE SHEET FINANCING ARRANGEMENTS

We do not utilize variable interest entities or other off-balance sheet financial arrangements.

Contractual Obligations

The following table shows our contractual obligations for the periods presented:


	Payment due by period
CONTRACTUAL OBLIGATIONS	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-Term Debt Obligations (1)	$	169,656,000	$	16,741,000	$	109,995,000	$	42,920,000	$	—

Operating Lease Obligations	40,631,000		5,237,000		9,293,000		8,317,000		17,784,000

Totals	$	210,287,000	$	21,978,000	$	119,288,000	$	51,237,000	$	17,784,000

(1) Represents principal and interest payments on our notes payable, which are included on our Balance Sheet.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 1 of our Financial Statements under Part I, Item 1, for a discussion on the impact, if any, of the recently pronounced accounting standards.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes to our critical accounting policies and estimates from those set forth in our Annual Report on Form 10-K for the year ended December 31, 2024.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Commodities Risk & Risk Management. To reduce the price change risks associated with holding fixed-price commodity positions, we generally take opposite and offsetting positions by entering into commodity futures contracts (either a straight or options futures contract) on a regulated commodity futures exchange, the Chicago Board of Trade. While hedging activities reduce the risk of loss from changing market prices, such activities also limit the gain potential which otherwise could result from these significant fluctuations in market prices. Our policy is generally to maintain a hedged position within limits, but we can be long or short at any time. Our profitability is primarily derived from margins on soybeans processed, not from hedging transactions. Our management does not anticipate that hedging activities will have a significant impact on future operating results or liquidity. Hedging arrangements do not protect against the nonperformance of a cash contract.

At any one time, our inventory and purchase contracts for delivery to our facility may be substantial. We have risk management policies and procedures that include net position limits. They are defined by commodity and include both trader and management limits. This policy and procedure trigger a review by management when any trader is outside of position limits. The position limits are reviewed at least annually with the board of managers. We monitor current market conditions and may expand or reduce the limits in response to changes in those conditions.

An adverse change in market prices would not materially affect our profitability since we generally take opposite and offsetting positions by entering into commodity futures and forward contracts as economic hedges of price risk.

Foreign Currency Risk. We conduct essentially all of our business in U.S. dollars and have minimal direct risk regarding foreign currency fluctuations. Foreign currency fluctuations do, however, impact the ability of foreign buyers to purchase U.S. agricultural products and the competitiveness of and demand for U.S. agricultural products compared to the same products offered by foreign suppliers.

Interest Rate Risk. We manage exposure to interest rate changes by using variable-rate loan agreements with fixed-rate options. Long-term loan agreements can utilize the fixed option through maturity; however, the revolving ability to pay down and borrow back would be eliminated once the funds were fixed.

As of March 31, 2025, we had $0 in fixed-rate debt outstanding and $510.8 million of variable-rate lines of credit. Interest rate changes impact the amount of our interest payments and, therefore, our future earnings and cash flows. Assuming other variables remain constant, a 1.0% increase in interest rates on our variable-rate debt could have an estimated impact on profitability of approximately $5.1 million per year.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. Based on their evaluation as of the end of the period covered by this quarterly report on Form 10-Q, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Changes in Internal Control Over Financial Reporting. There were no changes to our internal controls over financial reporting that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting during the quarter ended March 31, 2025.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time in the ordinary course of our business, we may be named as a defendant in legal proceedings related to various issues, including without limitation, workers’ compensation claims, tort claims, or contractual disputes. We carry insurance that provides protection against general commercial liability claims, claims against our

directors, officer and employees, business interruption, automobile liability, and workers' compensation. We are not currently involved in any material legal proceedings and are not aware of any potential claims.

Item 1A. Risk Factors.

During the quarter ended March 31, 2025, there were no material changes to the Risk Factors disclosed in Item 1A (Part I) of our 2024 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

Insider Adoption or Termination of Trading Arrangements

During the three months ended March 31, 2025, none of our managers or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K..

Item 6. Exhibits.


Exhibit Number						Description
31.1						Rule 13a-14(a)/15d-14(a) Certification by Chief Executive Officer*
31.2						Rule 13a-14(a)/15d-14(a) Certification by Chief Financial Officer*
32.1						Section 1350 Certification by Chief Executive Officer*
32.2						Section 1350 Certification by Chief Financial Officer*
101.INS						XBRL Instance Document
101.SCH						XBRL Schema Document
101.CAL						XBRL Calculation Document
101.LAB						XBRL Labels Linkbase Document
101.PRE						XBRL Presentation Linkbase Document
101.DEF						XBRL Definition Linkbase Document
104						The cover page from this Current Report on Form 10-Q formatted as Inline XBRL

____________________________________________________________________________

* Filed herewith.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


			SOUTH DAKOTA SOYBEAN PROCESSORS, LLC

Dated:	May 9, 2025	By	/s/ Thomas Kersting
			Thomas Kersting, Chief Executive Officer
			(Principal Executive Officer)

Dated:	May 9, 2025	By	/s/ Mark Hyde
			Mark Hyde, Chief Financial Officer
			(Principal Financial Officer)