Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

The following discussion and analysis should be read in conjunction with the financial statements and notes thereto included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the audited financial statements and related notes thereto and Item 7, Management's Discussion and Analysis of Financial Conditions and Results of Operations, included in the Cooperative's Annual Report Form on 10-K for the fiscal year ended December 31, 2024. This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Such forward-looking statements include, among others, those statements including the words "expect", "anticipate", "believe", "may" and similar expressions. The Cooperative's actual results or actions could and likely will differ materially from those anticipated in the forward-looking statements for many reasons, including but not limited to: (i) the impact of the

Cooperative's joint ownership interest in ProGold LLC following Cargill's acquisition of a 50% interest in ProGold LLC; (ii) the impact of Cargill's announced plans to purchase the Cooperative's 50% interest in ProGold following expiration of Cargill's lease of the ProGold facility; (iii) the impact of our membership's approval of the Plan of Liquidation and Dissolution and management's subsequent filing of the Notice of Intent to Dissolve; (iv) fluctuations in the market price per bushel of corn, including as a result of global armed conflicts, severe weather events and other natural conditions, changes to supply and demand, or other factors; (v) the impact of severe weather events and other natural conditions on ProGold LLC's facility or operations and/or Members' choice of delivery method; (vi) the effect of inflation as well as general economic conditions; (vii) our expectations with respect to accessing our current debt facility or any other debt facility or other capital sources in the future; (viii) our beliefs regarding the adequacy of our cash on hand to fund working capital and other general corporate expenses; and (ix) other factors described from time to time in the Cooperative's Securities and Exchange Commission filings. The Cooperative does not intend to update the forward-looking statements contained in this Quarterly Report on Form 10-Q other than as required by law and qualifies all of its forward-looking statements by these cautionary statements.

Overview

Golden Growers Cooperative is a value-added agricultural cooperative association governed under Minnesota Statutes Chapter 308B. The Cooperative is owned by 1,446 members and is in the business of providing value to its members by facilitating their delivery of corn to the corn wet-milling facility owned by ProGold Limited Liability Company ("ProGold LLC"), a Minnesota limited liability company in which the Cooperative and Cargill Incorporated ("Cargill") each own a 50% membership interest. The Cooperative accomplishes its business on behalf of its members through its contractual relationships with all of the parties involved in the ownership and operation of the facility. Annually, the Cooperative is required to deliver approximately 15,490,480 bushels of corn to Cargill for processing at the ProGold LLC facility.

Ownership in ProGold. From an income production perspective, the Cooperative's 50% membership interest in ProGold LLC is its primary asset that, in addition to giving the Cooperative the right to receive distributions from ProGold LLC, also provides the Cooperative's members with additional value for the delivery of their corn for processing.

The Cooperative, Cargill and ProGold LLC entered into that certain ProGold Limited Liability Company Agreement (the "Operating Agreement"), effective March 1, 2022, in order to set forth the structure, governance and operation of ProGold LLC. Under the terms of the Operating Agreement, the Cooperative is allocated 50% of the profits and losses of ProGold LLC and is entitled to receive 50% of any cash that is distributed to ProGold LLC's members. The Operating Agreement also sets forth certain triggers under which Cargill agrees to purchase the Cooperative's 50% membership interest in ProGold LLC. On December 20, 2024, the Cooperative and Cargill issued a joint press release announcing that Cargill will purchase the Cooperative's 50% interest in ProGold within 30 days following expiration of the Facility Lease pursuant to the terms of the Operating Agreement. At the Cooperative's 2025 Annual Member Meeting, members approved a Plan of Liquidation and Dissolution of the Cooperative providing for approval of the sale pursuant to the terms of the Operating Agreement and distribution of the proceeds of such sale, along with all other assets of the Cooperative, to the members. The Plan also grants the Cooperative's Board of Directors authority to negotiate, execute and file all agreements, documents or instruments necessary to effect such liquidation and dissolution of the Cooperative. Following the approval, on March 27, 2025, the Cooperative filed a Notice of Intent to Dissolve with the Minnesota Secretary of State.

For more information relating to the Cooperative's ownership interest in ProGold LLC, please refer to Part I, Item 1 of the Cooperative's Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

ProGold Facility Lease. ProGold LLC leases its corn wet milling facility to Cargill, which uses the facility to process corn into high fructose corn syrup. ProGold LLC and Cargill entered into that certain First Amendment to Second Amended and Restated Facility Lease, effective March 1, 2022, which extended the term of the Facility Lease through December 31, 2026.

Membership and Delivery Obligations. Any person residing in the United States can own membership units of the Cooperative ("Units") as long as that person delivers or provides for the delivery of corn for processing at the ProGold LLC facility. Ownership of Units requires members to deliver bushels of corn to the Cooperative for processing in proportion to the number of Units each member holds. Currently, 15,490,480 Units are issued and outstanding. The Cooperative's income and losses are allocated to its members based on the volume of corn they deliver. Subject to certain limitations, as long as a member patronizes the Cooperative by delivering one (1) bushel of corn for each Unit held by the member, the member will be allocated a corresponding portion of the Cooperative's income (or loss). In this way, the Cooperative operates on a cooperative basis.

To hold Units, a member is required to execute a Uniform Member Agreement that obligates the member to deliver corn to the Cooperative and an Annual Delivery Agreement by which each member annually elects the member's method to deliver corn - either Method A or Method B, or a combination of both. Under Method A, a member is required to physically deliver the required bushels of corn to the Cooperative either at the facility or another location designated by the Cooperative. Under Method B, a member appoints the Cooperative as its agent to arrange for the acquisition and delivery of the required bushels of corn on the member's behalf. The Cooperative appoints Cargill as its agent to arrange for the delivery of the corn by members who elect to deliver corn using Method A, and the Cooperative appoints Cargill as its agent to acquire corn on the Cooperative's behalf for members who elect to deliver corn using Method B. If a member elects to deliver corn using Method B, the price per bushel the Cooperative pays to the member is equal to the price per bushel paid by Cargill to acquire the corn as its agent. Members who deliver corn under Method A are paid the market price or contracted price for their corn at the time of delivery. Members who deliver corn under Method A also receive from the Cooperative an incentive payment of $.05 per bushel on the corn that they deliver while members who elect Method B to deliver corn pay to the Cooperative a $.02 per bushel agency fee for the cost of having the Cooperative deliver corn on their behalf. The incentive payment for Method A deliveries and the agency fee for Method B deliveries are subject to annual adjustment at the sole discretion of the Cooperative's Board of Directors. While the Cooperative is financially responsible for the various payments to the members for corn, Cargill, serving as the Cooperative's administrative agent, issues payments to members for corn on the Cooperative's behalf.

Annually, the Cooperative notifies Cargill of the number of bushels of Method A corn to be delivered by each member who has elected to deliver corn by Method A. Once the Cooperative provides notification to Cargill of the number of bushels of corn, Cargill then confirms the amount of corn with each member and notifies that member with respect to quality specifications, allowances, deductions and premiums to be applicable to that corn. The member with a Method A corn commitment then directly contracts with Cargill for corn delivered by Method A. At the end of each month, Cargill reports the number of Method A bushels delivered and the average daily price paid for corn that Cargill purchased from members on the Cooperative's behalf. The product of the number of bushels delivered multiplied by the average monthly market price is reported as Method A corn expense. In the event a member who has elected to deliver corn by Method A delivers to Cargill more than its delivery commitment, any corn delivered in excess of that commitment is handled as a direct sale of corn to Cargill. In the event a member who has elected to deliver corn by Method A delivers to Cargill less than its committed amount of corn, the quantity of the shortfall is then purchased and delivered by Cargill on the Cooperative's behalf. The purchase price is equal to the average price reported for Method A corn for the final month of the year. In addition, the Method A member with a shortfall will be charged a purchased corn fee and agency fee determined by the Cooperative's Board of Directors.

Cargill then purchases the remainder of the corn to be delivered by the Cooperative on behalf of the Method B delivering members at such time and in such quantities as it deems appropriate and in the best interest of the Cooperative and Cargill. The Cooperative notifies Cargill of the number of Method B bushels to be purchased during the quarter. Cargill will certify to the Cooperative that it has purchased the necessary Method B bushels. The price paid is the weighted average price for Method A corn during the quarter multiplied by the number of Method B bushels. Method B corn revenue is equal to the price paid.

The Cooperative's Fourth Amended and Restated Bylaws ("Bylaws") establish a Method A delivery pool and a Method B delivery pool. Generally, the Cooperative's income and/or losses are allocated annually based on the percentage of bushels of corn the members elect to deliver using either Method A or Method B. Regardless of the actual percentage allocation between the members who deliver bushels of corn using Method A or Method B, the Bylaws require the Cooperative to annually allocate at least 15% of its income and/or losses to the Method A pool. The amount of the Cooperative's income and/or losses actually allocated to the Method A pool is a percentage equal to the greater of 15% or the actual percentage of bushels of corn delivered by members using Method A.

For fiscal year 2025, members elected to deliver 24.3% of their corn by Method A and 75.7% of their corn by Method B. This election will result in 24.3% of the Cooperative's income and/or losses and 24.3% of any cash distributions being allocated to the Method A pool in fiscal year 2025, which reflects the actual percentage of corn members elected to deliver using Method A and does not result in reallocation to meet the 15% requirement set forth in the Cooperative's Bylaws.

Results of Operations

Revenues. The Cooperative derives revenue from two sources: operations related to the marketing of members' corn and income derived from the Cooperative's membership interest in ProGold LLC. The corn marketing operations generate revenue for the Cooperative equal to the value of the corn that is delivered to Cargill. The Cooperative recognizes expense equal to this same amount, which results in the corn marketing operations being revenue neutral to the Cooperative, except for revenue from the Method B agency fee and expenses related to the Method A incentive payments and the service fee paid to Cargill.

For the three and nine-month periods ended September 30, 2025, the Cooperative sold approximately 3.3 and 11.9 million bushels of corn, respectively, compared to approximately 3.5 and 11.8 million bushels of corn sold during the three and nine-month periods ended September 30, 2024. For the three and nine-month periods ended September 30, 2025, the members, on the Cooperative's behalf, delivered to Cargill for processing at the facility approximately 0.4 and 3.2 million bushels of corn using Method A and 2.9 and 8.8 million bushels of corn using Method B. In the same respective periods in 2024, its members, on the Cooperative's behalf, delivered to Cargill for processing at the facility 0.7 and 3.3 million bushels of corn using Method A and 2.8 and 8.5 million bushels of corn using Method B.

For the three and nine-month periods ended September 30, 2025, the Cooperative recognized corn revenue of $12,321,000 and $48,631,000, respectively, compared to $13,446,000 and $47,390,000, during the same respective periods in 2024, a decrease of 8% for the third quarter and an increase of 3% year to date. The decrease in the 3^rd quarter is due primarily to a decrease in the price per bushel of corn in 2025 compared to 2024. The increase for year to date is primarily the result of the increased volume of corn delivered year to date in 2025 compared to 2024.

Expenses. The Cooperative recognized corn expense of $12,338,000 and $48,682,000 for the three and nine-month periods ended September 30, 2025, respectively, compared to $13,464,000 and $47,432,000 during the same respective periods in 2024, a decrease of 8% for the third quarter, and an increase of 3% year to date. The decrease in the third quarter is due primarily to a decrease in the price per bushel of corn in 2025 compared to 2024. The increase for year to date is primarily the result of the increased volume of corn sold year to date in 2025 compared to 2024.

The Cooperative recognized expense of $15,000 and $45,000 for the three and nine-month periods ended September 30, 2025, respectively, and during the same respective periods in 2024 in connection with costs incurred to Cargill related to the Cooperative's corn marketing operation.

Income from ProGold LLC. The Cooperative derived income from ProGold LLC for the three and nine-month periods ended September 30, 2025 of $1,495,000 and $4,845,000, respectively, compared to $1,576,000 and $4,715,000 during the same respective periods in 2024, a decrease of 5% for the third quarter and an increase of 3% year to date. The decrease in the third quarter and the increase year to date are due primarily to timing of ProGold LLC expenses

General and Administrative Expenses. The Cooperative's general and administrative expenses include salaries and benefits, professional fees and fees paid to its Board of Directors. The general and administrative expenses for the three and nine-month periods ended September 30, 2025 were $139,000 and $535,000, respectively, compared to $123,000 and $483,000 during the same respective periods in 2024. The increase in administrative expenses for the nine-month period ended September 30, 2025 compared to the nine-month period ended September 30, 2024 is primarily due to increased legal and consulting expenses in 2025 compared to 2024 in connection with preparing for member approval of the Plan of Liquidation and Dissolution of the Cooperative, filing of the Notice of Intent to Dissolve and preparing for the sale of the Cooperative's 50% interest in ProGold to Cargill following expiration of the Facility Lease pursuant to the terms of the Operating Agreement.

Other Income. Interest and investment income (loss) for the three and nine-month periods ended September 30, 2025 was $67,000 and $233,000, respectively, compared to $126,000 and $343,000 during the same respective periods in 2024. The decrease is primarily due to reduced investment income on corporate bonds.

Liquidity and Capital Resources

The Cooperative's working capital at September 30, 2025 was $4,222,000 compared to $6,545,000 at September 30, 2024. The decreased working capital at the end of the third quarter of fiscal 2025 as compared to the end of the third quarter of fiscal 2024 was the result of reduced Cooperative investments in corporate bonds. The Cooperative received cash distributions from ProGold LLC totaling $6,176,000 for the nine-month period ended September 30, 2025 compared $5,969,000 for the nine-month period ended September 30, 2024. Increased ProGold LLC distributions are primarily related to ProGold's reimbursement to Cargill for 2024 infrastructure spending that occurred in January of 2025.

In fiscal year 2018, the Cooperative invested a portion of its cash reserves in bonds. To ensure that the Cooperative would have access to cash if needed before the maturity of the bonds, the Cooperative also established a $2,000,000 line of credit at a variable interest rate based on the prime rate. The line of credit is scheduled to mature on October 16, 2026. The line of credit is secured by the investment management agency account for the Cooperative maintained by Bell Bank. There was no outstanding balance as of September 30, 2025 or December 31, 2024.

The Cooperative had no long-term debt as of September 30, 2025 or September 30, 2024 and used operating cash flows of $312,000 for the nine-month period ended September 30, 2025 compared to generated operating cash flows of $24,000 for the nine-month period ended September 30, 2024. The decrease in operating cash flows for the nine-month period ended September 30, 2025 compared to the nine-month period ended September 30, 2024 is primarily due to the timing of payments and liabilities in 2025 compared to 2024.

Management believes that non-cash working capital levels, together with the Cooperative's cash and cash equivalents, are appropriate in the current business environment and does not expect a significant increase or reduction of non-cash working capital in the next twelve months. Management expects that the Cooperative's cash and cash equivalents, together with available borrowings under the line of credit, will be sufficient to fund its operations for the foreseeable future, including at least the next twelve months.

Significant Accounting Estimates and Policies

The Cooperative generally does not pay out Method A incentive payments or collect Method B agency fees until the end of its fiscal year. The total annual Method B agency fee was determinable once the members completed their delivery method determination prior to January 1, 2025. The quarterly Method B bushel delivery and agency fee revenue is calculated by allocating the portion of the total annual agency fee for that particular quarter or cumulating it for the particular period. The Cooperative tracks Method A corn deliveries throughout the year so it can report the bushels of corn delivered by its members as well as the corresponding Method A incentive fees earned. The final amounts owed by or due to Cargill and/or the Cooperative's members who elect to deliver using Method A is not calculated until after December 31 in order to account for any failures to deliver, or over-deliveries, of corn.

The Cooperative's significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, of the Notes to the Financial Statements in the Cooperative's Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The Cooperative's critical accounting estimates are discussed in Item 7, Management's Discussion and Analysis of Financial Conditions and Results of Operations, in the Cooperative's Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There have been no other significant changes in the Cooperative's significant accounting policies or critical accounting estimates since December 31, 2024.