SOUTH DAKOTA SOYBEAN PROCESSORS LLC
For the period ended Dec 31, 2024. Filed Mar 28, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 28, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-22.
0001163609-24-000004
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-28.
0001163609-25-000010
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 67 previous paragraphs and 64 current paragraphs.
32 unchanged; 14 reworded; 17 added; 20 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
Our consolidated net income decreased from $70.4 million in 2023 to $20.3 million in 2024 as we encountered various changes in the market. In 2023, robust demand for soybean oil from renewable fuel markets propelled soybean processing margins to very high levels. By contrast, processing margins in 2024 were set back as the industry experienced new challenges. Early in 2024, renewable fuel margins fell as the overproduction of renewable diesel and biodiesel in the market caused a sharp drop in margins and a corresponding reduction in demand for soybean oil. Imports of used cooking oil also surged to record levels, displacing soybean oil as a renewable fuel feedstock. Later in 2024, a lack of guidance and clarity from the U.S. government on the proposed rule changes in the 45Z Clean Fuel program created uncertainty in the biofuels market, causing biofuel producers not to purchase soybean oil feedstocks. Finally, new soybean processing capacity came online, causing overproduction of soybean meal and oil and depressing prices in the process.
Current report
In 2025, we expect markets to adjust and respond more positively than in 2024. Soybean meal and oil exports are currently tracking at a record pace, though imposition of tariffs by countries like Canada, Mexico, and China could slow the pace. Moreover, we have an ample supply of soybeans from last year’s crop which puts us in a good position production wise for the first half of the year. While we are still dealing with the uncertainties of the 45Z program, there is a strong desire to increase renewable fuel volume obligations and to address the imports of used cooking oil. We believe that we are positioned well to handle these challenges and deliver value and strong returns.
Current report
We are also encouraged by the progress of our new oilseed project, High Plains Processing, near Mitchell, South Dakota. Construction is on schedule, and equipment deliveries are nearly complete. Barring any inclement weather or construction delays, we believe the plant will commence operations in October 2025.
Current report
Revenue – Revenue decreased $148.7 million, or 21.2%, for the year ended December 31, 2024, compared to the same period in 2023. The decrease was primarily due to a decrease in the average sales price of soybean products. The average price of soybean oil decreased 23.9% during the year ended December 31, 2024, compared to the same period in 2023, due to a decrease in demand. Soybean oil demand from the energy sector dropped dramatically in 2024 as refining margins for biodiesel and renewable diesel producers came under pressure from overproduction, which led to production slowdowns at some locations. Further contributing to the drop was an increase in imports of lower-priced alternatives to soybean oil, specifically used cooking oil. In addition, average soybean meal prices declined by 15.3% in 2024 following the return of Argentine processors to the global export market and an increase in U.S. soybean production.
Current report
Gross Profit/Loss – Gross profit decreased by $49.0 million, or 62.5%, for the year ended December 31, 2024, compared to the same period in 2023. The decrease was mainly due to declining board crush margins, which were caused by a decrease in demand for soybean oil and an increase in global soybean meal supply, which negatively affected U.S. export sales including our own.
Current report
Interest Expense – Interest expense increased $3.6 million, or 126.2%, during the year ended December 31, 2024, compared to the same period in 2023. The increase in interest expense was due to a $28.6 million increase in borrowings from our credit facilities with our senior lender, CoBank. The average debt level was $68.2 million during 2024, compared to $39.6 million in 2023. Debt levels increased mainly to fund our investment commitment into the High Plains Processing plant through our subsidiaries.
Current report
Other Non-Operating Income (Expense) – Other non-operating income, including patronage dividend income, increased $2.8 million, or 140.2%, for the year ended December 31, 2024, compared to the same period in 2023. The increase in other non-operating income was due to a $2.6 million increase in interest income. Interest income increased from the deposit of investment proceeds which were received by our subsidiaries in connection with their equity financing of the High Plains Processing plant.
Current report
Cash Flows Provided by Operating Activities
Current report
The $70.5 million decline in cash flows from operating activities was primarily driven by a $49.3 million decrease in net income, along with a $37.0 million reduction in cash generated from inventories. During the year ended December 31, 2024, our inventories decreased by $23.8 million, compared to $60.8 million in 2023.
Current report
Cash Flows Used in Investing Activities
Current report
The $71.8 million increase in cash flows used for investing activities was primarily driven by the $71.4 million increase in expenditures for purchasing various property and equipment. During 2024, we spent $175.7 million on property and equipment purchases, largely for the construction and development of the High Plains Processing plant, compared to $104.3 million during 2023.
Current report
Cash Flows Provided by Financing Activities
Current report
The $36.9 million increase in cash flows provided by financing activities was principally due to a $78.1 million increase in net proceeds on borrowings. Net proceeds on borrowings increased by $69.2 million during the year ended December 31, 2024, compared to net payments of $8.9 million during the same period in 2023. Partially offsetting the increase was a $40.6 million decrease in investment proceeds received and a $3.0 million increase in cash distributions to our members during the year ended December 31, 2024, compared to the same period in 2023.
Current report
Cash Flows Provided by Operating Activities
Current report
Cash Flows Used in Investing Activities
Current report
Cash Flows Provided by Financing Activities
Current report
The fourth line of credit is a delayed-draw term loan. Under this loan, our subsidiary may borrow funds, as needed up to $254.0 million. 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 $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 the delayed-draw term loan was $18.7 million and $0 as of December 31, 2024 and 2023, respectively. Under this loan, $235.3 million was available to be borrowed as of December 31, 2024.
Removed paragraphs (20)
Previous report
We reached a new height in profitability in 2023 by recording a record profit of $70.5 million, as we continued to build off the record profit of $67.5 million in 2022. The record profit led us to declare and issue a record cash distribution to members of $39.5 million in February 2024.
Previous report
In the first half of 2023, we encountered a shortage of soybeans due to lower-than-average production in the state during the preceding growing season. This temporary shortage of soybeans raised concerns about the availability of soybean meal and caused meal basis to trade at high levels during the first three quarters of the year. Although the area in which we traditionally purchase soybeans had below-average production levels, the soybeans we purchased were above average in terms of quality, especially oil and protein levels, which helped offset the higher costs associated with drawing soybeans from outside the area. In addition, our Volga and Miller plants operated efficiently throughout the year, with refining production setting a record of over 400 million pounds of crude oil.
Previous report
Looking ahead, we believe 2024 will be a strong year. During the first half of the year, we expect Argentina will have an increase in soybean production which may increase processing by Argentine-based crushers and weaken processing margins in the U.S. During the second half of the year, we expect renewable diesel production in the U.S. to increase, which should improve soybean oil demand and bolster margins. Similarly, meal demand may improve, with feeding margins showing signs of improvement. Operationally, we are installing new processing equipment at our Volga facility, which should improve overall plant efficiency and operations. Additionally, construction of the new Mitchell facility is on schedule due to a very mild winter.
Previous report
Revenue – Revenue increased $131.4 million, or 22.3%, for the year ended December 31, 2022, compared to the same period in 2021. The increase in revenues was primarily due to an increase in the average sales price of refined soybean oil. The average sales price of soybean oil increased approximately 32% from 2021 to 2022, because of surging demand from the renewable diesel and food sectors.
Previous report
Gross Profit/Loss – Gross profit increased $39.9 million, or 119.3%, for the year ended December 31, 2022, compared to 2021. The increase in gross profit was primarily due to increased demand for oil from the renewable diesel sector, as more diesel plants were opened and became operational in the U.S. in 2022. Partially offsetting the increase in gross profit was a $4.6 million increase, or 14.5%, in production costs in 2022, compared to 2021. Production costs increased due to an increase personnel, maintenance, utilities and chemical costs because of inflation and supply shortages.
Previous report
Other Non-Operating Income (Expense) – Other non-operating income, including patronage dividend income, increased $1.2 million, or 154.6%, for the year ended December 31, 2022, compared to the same period in 2021. The increase in other non-operating income was due to a $846,000 increase in gains on our interest rate hedge instruments and a $335,000 increase in patronage dividend income. During the year ended December 31, 2022, gains on interest rate hedges totaled $1,092,000, compared to $246,000 during the same period in 2021. We also received $700,000 in patronage distributions from CoBank, a cooperative lender of which we are a member, during 2022, compared to $365,000 during the same period in 2021.
Previous report
Cash Flows From (Used For) Operating Activities
Previous report
Cash Flows From (Used For) Investing Activity
Previous report
Cash Flows From (Used For) Financing Activity
Previous report
Cash Flows From (Used For) Operating Activities
Previous report
The $9.4 million increase in cash flows from operating activities was largely due to a $39.5 million increase in net income. Partially offsetting the increase in net income was a $13.7 million increase in inventories and a $9.0 decrease in net loss on derivative activities. During the year ended December 31, 2022, our inventories increased by $40.6 million, compared to a $26.9 million increase during the same period in 2021. In 2022, we recognized $1.0 million in losses on derivative activities, compared to $10.0 million in losses during the same period in 2021.
Previous report
Cash Flows From (Used For) Investing Activity
Previous report
The $3.2 million decrease in cash flows used for investing activities between 2022 and 2021 was due to a decrease in capital improvements in 2022. In 2022, we spent approximately $10.1 million on capital improvements to enhance the quality and efficiency of operations, compared to $13.4 million in 2021.
Previous report
Cash Flows From (Used For) Financing Activity
Previous report
The $9.8 million increase in cash flows used for financing activities was due to a $7.9 million increase in cash distributions to members in 2022, compared to 2021. In 2022, we distributed $17.3 million to our members, compared to $9.4 million in 2021.
Previous report
Long-Lived Assets
Previous report
Depreciation and amortization of our property, plant and equipment is provided on the straight-lined method by charges to operations at rates based upon the expected useful lives of individual or groups of assets. Economic circumstances or other factors may cause management’s estimates of expected useful lives to differ from actual.
Previous report
Long-lived assets, including property, plant and equipment and investments are evaluated for impairment on the basis of undiscounted cash flows whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impaired asset is written down to its estimated fair market value based on the best information available. Considerable management judgment is necessary to estimate undiscounted future cash flows and may differ from actual.
Previous report
We evaluate the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying value may not be recoverable. Such circumstances could include, but are not limited to: (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. We measure the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss is recognized.
Previous report
The impairment loss is calculated as the amount by which the carrying value of the asset exceeded its fair value. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires us to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts.
Reworded paragraphs (14)
Previous wording
Operating Expenses – Administrative expenses, including selling, general and administrative expenses, increased approximately $1.1 million, or 23.5%, during the year ended December 31, 2022, compared to the same period in 2021. The increase was primarily due to an increase in personnel costs.
Current wording
Operating Expenses – Administrative expenses, including selling, general and administrative expenses, decreased approximately $0.5 million, or 6.7%, during the year ended December 31, 2024, compared to the same period in 2023, due to a decrease in labor costs. The decrease was partially offset by an increase in professional and related costs associated with the start-up of the High Plains Processing plant.
Previous wording
Net Income/Loss – We generated a net income of $67.5 million during the year ended December 31, 2022, a $39.5 million increase from 2021. The increase is primarily attributable to an increase in gross profit and other non-operating income.
Current wording
Net Income/Loss – We generated a net income of $20.3 million during the year ended December 31, 2024, a $50.1 million decrease from 2023. The decrease is primarily attributable to the reduction in gross profit and an increase in interest expense.
Previous wording
Gross Profit/Loss – Gross profit increased $5.0 million, or 6.8%, for the year ended December 31, 2023, compared to 2022. The increase in gross profit was mainly due to improved board crush margins and growing conditions.Board crush margins improved primarily because of drought conditions in Argentina and North America. Argentina, which accounts for nearly 30% of the world's soybean meal exports, experienced a severe drought which shifted demand for soybean meal to the U.S. as a source. This shift allowed producers, like us, to benefit from increased export opportunities. Partially offsetting the increase in gross profit was a $4.7 million increase, or 12.9%, in production costs in 2023, compared to 2022. The increase in production costs was due to increases in maintenance, personnel, and utility costs because from inflation and supply shortages.
Current wording
Gross Profit/Loss – Gross profit increased $5.0 million, or 6.8%, for the year ended December 31, 2023, compared to 2022. The increase in gross profit was mainly due to improved board crush margins and growing conditions. Board crush margins improved primarily because of drought conditions in Argentina and North America. Argentina, which accounts for nearly 30% of the world's soybean meal exports, experienced a severe drought which shifted demand for soybean meal to the U.S. as a source. This shift allowed producers, like us, to benefit from increased export opportunities. Partially offsetting the increase in gross profit was a $4.7 million increase, or 12.9%, in production costs in 2023, compared to 2022. The increase in production costs was due to increases in maintenance, personnel, and utility costs resulting from inflation and supply shortages.
Previous wording
Interest Expense – Interest expense increased $0.6 million, or 28.7%, during the year ended December 31, 2023, compared to the same period in 2022. The increase in interest expense was due to an increase in interest rates on our senior debt with CoBank. As of December 31, 2023, the interest rate on our revolving long-term loan was 7.85%, compared to 6.85% as of December 31, 2022. The increase in interest expense was partially offset by an $18.7 million decrease in borrowings from our lines of credit, as we borrowed less due to improved profitability. The average debt level during 2023 was approximately $40.0 million, compared to $58.3 million in 2022.
Current wording
Interest Expense – Interest expense increased $0.6 million, or 28.7%, during the year ended December 31, 2023, compared to the same period in 2022. The increase in interest expense was due to an increase in interest rates on our senior debt with CoBank. As of December 31, 2023, the interest rate on our revolving long-term loan was 7.85%, compared to 6.85% as of December 31, 2022. The increase in interest expense was partially offset by an $18.7 million decrease in borrowings from our lines of credit, as borrowing decreased due to improved profitability. The average debt level in 2023 was approximately $40.0 million, compared to $58.3 million in 2022.
Previous wording
Other Non-Operating Income (Expense) – Other non-operating income, including patronage dividend income, increased $0.1 million, or 5.0%, for the year ended December 31, 2023, compared to the same period in 2022. The increase in other non-operating income was due to a $1.6 million increase in interest income. During the year ended December 31, 2023, interest income totaled $1.6 million, compared to $0 in 2022. Partially offsetting the increase in interest income was a $1.3 million decrease in gains on our interest rate hedge instruments. During the year ended December 31, 2023, we had losses on interest rate hedges of $0.2 million, compared to gains of $1.1 million during the same period in 2022.
Current wording
Other Non-Operating Income (Expense) – Other non-operating income, including patronage dividend income, increased $0.1 million, or 5.0%, for the year ended December 31, 2023, compared to the same period in 2022. The increase in other non-operating income was due to a $1.6 million increase in interest income. During the year ended December 31, 2023, interest income was $1.6 million, compared to $0 in 2022. Partially offsetting the increase in interest income was a $1.3 million decrease in gains on our interest rate hedge instruments. During the year ended December 31, 2023, we had losses on interest rate hedges of $0.2 million, compared to gains of $1.1 million during the same period in 2022.
Previous wording
Our primary sources of liquidity are cash provided by operations and borrowings under our two revolving lines of credit which are discussed below under “Indebtedness.” On December 31, 2023, we had working capital, defined as current assets less current liabilities, of approximately $100.2 million, compared to working capital of $76.0 million on December 31, 2022. Working capital increased between periods primarily due to investment proceeds raised by one of our consolidated subsidiaries, High Plains Partners, LLC, in connection with its financing, the proceeds of which were contributed to the new crush facility project near Mitchell, South Dakota. We acquired a majority ownership in High Plains Partners in exchange for contributing to High Plain Partners cash, property and various construction and development rights for the project. High Plains Partners, in turn, agreed to contribute the cash, property, and rights to High Plains Partners' subsidiary, HPP SD Holdings, LLC, to which owns the Mitchell plant through its wholly-owned subsidiary, High Plains Processing, LLC.
Current wording
Our primary sources of liquidity are cash provided by operations and borrowings under our various revolving lines of credit which are discussed below under “Indebtedness.” On December 31, 2024, we had working capital, defined as current assets less current liabilities, of approximately $24.5 million, compared to working capital of $100.2 million on December 31, 2023. 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.
Previous wording
The $97.9 million increase in cash flows from operating activities was largely due to a $101.4 million decrease in inventories. During the year ended December 31, 2023, our inventories decreased by $60.8 million, compared to a $40.6 million increase during the same period in 2022.
Current wording
The $101.5 million increase in cash flows from operating activities was largely due to a $101.4 million decrease in inventories. During the year ended December 31, 2023, our inventories decreased by $60.8 million, compared to a $40.6 million increase during the same period in 2022.
Previous wording
The $95.5 million increase in cash flows used for investing activities was due to a $94.3 million increase in expenditures for purchases of various property and equipment that were largely made for the construction and development of the Mitchell facility, which we contributed to High Plains Partners as part of our investment into this entity.
Current wording
The $94.2 million increase in cash flows used for investing activities was due to a $94.3 million increase in expenditures for purchases of various property and equipment which were principally made for the construction and development of the High Plains Processing plant and contributed to our subsidiary, High Plains Partners, as part of our investment into this entity.
Previous wording
The $67.3 million increase in cash flows from (used for) financing activities was principally due to the receipt of $98.1 million in investments received by High Plains Partners, the proceeds of which will be contributed to HPP SD Holdings to pay for the construction and development of the Mitchell facility. Partially offsetting the increase is a $19.2 million increase in cash distributions to our members in 2023, compared to 2022.
Current wording
The $67.3 million increase in cash flows from (used for) financing activities was principally due to the receipt of $98.1 million in investments received by High Plains Partners, the proceeds of which were contributed to pay for the construction and development of the High Plains Processing plant. Partially offsetting the increase is a $19.2 million increase in cash distributions to our members in 2023, compared to 2022.
Previous wording
We hold three lines of credit 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 $12.0 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 $0.6 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 $0 and $8.8 million as of December 31, 2023 and 2022, respectively. Under this loan, $12.0 million was available to be borrowed as of December 31, 2023.
Current wording
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 $0 as of December 31, 2024 and 2023, respectively.
Previous wording
The third line of credit is a multiple advance note payable. The primary purpose of this note is to finance our investment in our subsidiary, High Plains Partners, and other larger capital projects. We have an agreement with High Plains Partners to commit to it up to $100.4 million in cash, property and development rights, the proceeds and property of which will be contributed to HPP SD Holdings over time to pay for the construction and development of the new Mitchell facility. The maximum we may borrow under this note is $90.0 million. Under this loan, principal payments of $4.5 million are made every six months which begin on October 20, 2024 and end on the date of maturity, March 20, 2028, at which time a balloon payment is due for the remaining balance. The principal balance outstanding on this note was $0 as of December 31, 2023 and 2022. Under this note, there were $90.0 million of funds available to borrow as of December 31, 2023.
Current wording
The second line of credit is a multiple advance note payable. The primary purpose of this note is to finance our investment and ownership in the High Plains Processing plant through our subsidiaries and any large capital project. Under this $50.5 million loan, principal payments of $4.5 million are made every six months which began on October 20, 2024 and end on the date of maturity, March 20, 2028, at which time a balloon payment is due for the remaining balance. The principal balance outstanding on this note was $50.5 million and $0 as of December 31, 2024 and 2023, respectively. Starting March 17, 2025, this note was consolidated into the note of the revolving term loan (see below).
Previous wording
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 $85.0 million until the loan's maturity on October 1, 2024. 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 December 31, 2023 and 2022, the principal balance outstanding on this credit line was $0 and $0.1 million, respectively, allowing us to borrow an additional $85.0 million as of as of December 31, 2023.
Current wording
The third 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 December 31, 2024 and 2023, the principal balance outstanding on this credit line was $0 and $0.0 million, respectively.
Previous wording
The revolving, seasonal and multiple advance 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 revolving term and multiple advance loans was 7.85% and 6.85% as of December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, the interest rate on the seasonal loan is 7.55% and 2.31%, respectively. We were in compliance with all covenants and conditions under the loans as of December 31, 2023.
Current wording
The revolving, multiple advance, seasonal and delayed-draw 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 revolving term and multiple advance loans was 6.56% and 7.85% as of December 31, 2024 and 2023, respectively. As of December 31, 2024 and 2023, the interest rate on the seasonal loan is 6.56% and 2.31%, respectively. As of December 31, 2024, the interest rate on our subsidiary's delayed-draw and revolving term loans was 7.76%. We were in compliance with all covenants and conditions under the loans as of December 31, 2024.
Previous wording
We made a total of $104.3 million in capital expenditures on various property and equipment in 2023 compared to approximately $7.8 million in 2022. Significant purchases of property and equipment were made for the construction and development of the new Mitchell facility, which were contributed to High Plains Partners as part of our investment into it. Additional purchases were made to enhance the quality and efficiency of our Volga and Miller facilities. We anticipate spending approximately $200.0 million in capital purchases and improvements in 2024, which will be financed from our multiple advance loan and cash flows from operating activities.
Current wording
We made a total of $175.7 million in capital expenditures on various property and equipment in 2024 compared to approximately $104.3 million in 2023. Significant purchases of property and equipment were made for the construction and development of the new Mitchell facility, which were contributed to our subsidiaries as part of our investment into the facility. Additional purchases were made to enhance the quality and efficiency of our Volga and Miller facilities. We anticipate spending approximately $248.0 million in capital purchases and improvements in 2025, which will be financed from our multiple advance loan and cash flows from operating activities.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The last line of credit is another revolving 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 December 31, 2024 and 2023. Under this loan, $40.0 million was available to be borrowed as of December 31, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Interest Expense – Interest expense increased $570,000, or 34.9%, during the year ended December 31, 2022, compared to the same period in 2021. The increase in interest expense was due to an increase in interest rates on our senior debt with CoBank. As of December 31, 2022, the interest rate on our revolving long-term loan was 6.85%, compared to 2.56% as of December 31, 2021. The increase in interest expense was partially offset by a $3.3 million decrease in borrowings from our lines of credit, as we borrowed less due to improved profitability and fewer capital improvements. The average debt level during 2022 was approximately $58.3 million, compared to $61.6 million in 2021.