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LAKE AREA CORN PROCESSORS, LLC

46269 SD Hwy. 34

P.O. Box 100

Wentworth, South Dakota 57075

May 6, 2005

Rufus Decker, Branch Chief

Nudrat Salik, Staff
Accountant

United States Securities and
Exchange Commission

Division of Corporate
Finance

450 Fifth Street, N.W., Stop
4-5

Washington, D.C. 20549

RE:                  Lake Area Corn Processors, LLC.

Form 10-K for the fiscal year ended December 31, 2004 (File No. 0-50254)

Dear Mr. Decker and Ms.
Salik:

This
letter responds to your review letter dated April 14, 2005. Thank you for
allowing us an extra five business day to respond to your letter. We do
appreciate it. Please find enclosed your review comments, which we have
outlined as A-D, and our comments and/or revised disclosure.

A.   Cover Page

2.   On April 30, 2003, you filed a Form 8-A and
were assigned a 1934 Act file number of 0-50254. Please use this file number
for your 1934 Act filings, rather than the 1933 Act file number of 333-66552
that relates to your original

S-4.

Our Comment: We have revised our 1934 Act file number to
0-50254. We apologize for this error.

B.    Management’s Discussion and Analysis.

Indebtedness, page 23

3.   Please revise your table of contractual cash
obligations to include estimated interest
payments on your debt and to clarify whether purchase obligations
include estimated  payments for
derivative contracts. Because the table is aimed at increasing transparency of
cash flow, we believe these payments should be included in the table.  Please also disclose any assumptions you made
to derive these amounts.

Our Revised Disclosure:

  Payment
  due by period

  Contractual Obligations

  Total

  Less
  than

  One Year

  One to

  Three

  Years

  Four to

  Five

  Years

  After
  Five

  Years

  Long-Term Debt Obligations (1)

  $

  15,515,454

  $

  3,645,868

  $

  4,731,755

  $

  4,653,519

  $

  2,484,312

  Capital Lease Obligations

  —

  —

  —

  —

  —

  Operating Lease Obligations

  —

  —

  —

  —

  —

  Purchase Obligations (2)

  7,549,028

  5,598,140

  820,088

  616,800

  514,000

  Other Long-Term Obligations

  511,121

  62,692

  125,153

  122,998

  200,278

  Total Contractual Cash Obligations

  $

  23,575,603

  $

  9,306,700

  $

  5,676,996

  $

  5,393,317

  $

  3,198,590

(1) Estimated long-term debt obligations are based on the current
interest rates on the notes.  The
interest rate on the fixed rate note is 9.0% and the rate on the variable rate
notes is 5.5%.

(2) Purchase obligations include estimated payments for electricity
supply agreements, management and marketing services agreements, and corn and
natural gas purchase contracts for which the Company expects to take delivery.

C.                    Item
9A.  Controls and Procedures, page 30

4.   Disclosure controls and procedures are now
defined in Exchange Act Rules 13a-15(e) and 15d-15(e).  See SEC Release 33-8238, which became
effective August 14, 2003. Please refer to the appropriate locations for the
definitions.  Please also disclose any
changes in your internal controls over financial reporting which have occurred
during the last fiscal quarter and materially affected, or are reasonably
likely to materially affect, your internal controls over financial reporting.
Refer to Item 308(c) of Regulation S-K.

Our Revised Disclosure (changes are underlined):

Evaluation Of
Disclosure Controls And Procedures

Our
chief executive officer and chief financial officer, after evaluating the
effectiveness of our “disclosure controls and procedures” (as defined in
Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended) as of the end of the period covered by this report, have
concluded that our disclosure controls and procedures are effective in ensuring
that material information required to be disclosed is included in the reports
that we file with the Securities and Exchange Commission.

Changes
In Internal Controls

There were no significant changes in our or
Dakota Ethanol’s internal controls or, to the knowledge of our management, in
other factors that could significantly affect

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these controls during the fourth quarter
ended December 31, 2004.

D.                    Financial
Statements

Note
2. Summary of Significant Accounting Policies, page F-7

5.
Please disclose the types of expenses that you include in the cost of
revenues line item and the types of expenses that you include in the general
and administrative expenses line item. Please also disclose whether you include
inbound freight charges, purchasing and receiving costs, inspection costs,
warehousing costs, internal transfer costs, and the other costs of your
distribution network in the cost of revenues line item. With the exception of
warehousing costs, if you currently exclude a portion of these costs from cost
of revenues, please disclose:

•              in a footnote the line items that these
excluded costs are included in and the amounts included in each line item for
each period presented, and

•              in MD&A that your gross margins may not
be comparable to those of other entities, since some entities include all of
the costs related to their distribution network in cost of revenues and others
like you exclude a portion of them from gross margin, including them instead in
a line item, such as general and administrative expenses.

Our Revised Disclosure:

Cost of Revenues – The primary components of cost of revenues from the production of
ethanol and related co-product are corn expense, energy expense (natural gas
and electricity), raw materials expense (chemicals and denaturant), shipping
costs on sales, and direct labor costs.

Shipping
costs incurred by Dakota Ethanol in the sale of ethanol are recorded as a
component of revenues and cost of revenues. Shipping costs incurred in the sale
of distiller’s grains, however, are deducted from the gross sales price and are
not included in the cost of revenues. Accordingly, revenue is recorded for the
sale of distiller’s grains based on the net selling price reported to Dakota
Ethanol by the marketer. The amount of shipping costs for the sale of
distiller’s grains, which is recorded as a reduction from the gross sales
prices and revenues, was $3,017,827, $2,887,124, and $2,998,730 for the years
ended December 31, 2004, 2003, and 2002, respectively.

General and Administrative Expenses – The primary components of general and
administrative expenses are management fee expenses, professional fee expenses
(legal and audit), and insurance expenses.

Our Comment:

Since
shipping costs from the sale of distiller’s grains have already been deducted
from the gross sales price upon the recording of revenue and are not deducted
from

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the cost of revenues, we
believe our gross margins would still be comparable with other ethanol entities
that include shipping costs as revenues and cost of revenues. Thus, we do not
believe a comment in the MD&A is necessary.

Revenue Recognition, page  F-8

6.   Pursuant to the Ethanol
Marketing Contract with Ethanol Products, LLC described on page 2 and in Note
9, Ethanol Products, LLC purchases all of the ethanol produced and charges you
for the applicable bad debt in the event that they are unable to collect from
their customer. Please disclose how you record revenue related to this contract
as well as how this revenue recognition policy complies with SAB Topic 13:A.

Our Revised Disclosure (changes are underlined):

Revenue
from the production of ethanol and related products is recorded when title
transfers to customers, net of allowances for estimated returns. Generally,
ethanol and related products are shipped FOB shipping point, based on
written contract terms between Dakota Ethanol and its customers. Collectibility
of revenue is reasonably assured based on historical evidence of collectibility
between Dakota Ethanol and its customers. Interest income is recognized as
earned.

Our Comment:

Revenue from the sale of ethanol to its marketer, Ethanol Products,
LLC, is recorded as revenue for the following reasons: First, persuasive
evidence of an arrangement between Dakota Ethanol and Ethanol Products exists.
Ethanol Products and Dakota Ethanol first entered into an ethanol marketing
service agreement in 1999, as amended, with Ethanol Products agreeing to
purchase and market the ethanol produced at the plant through 2006. Moreover,
each shipment of ethanol is made pursuant to a shipping order with Ethanol
Products. Second, delivery occurs when Dakota Ethanol transfers title and risk
of loss to Ethanol Products, namely by loading the ethanol onto the railcars or
trucks provided by Ethanol Products.
After delivery, revenue is recorded based on a fixed or determinable price,
the price based on a contract between Dakota Ethanol and Ethanol Products.  Finally, collectibility of the revenue from
Ethanol Products is reasonably assured. Historically, Dakota Ethanol collects
payment from Ethanol Products within 14-25 days of the date of transfer of
title; plus, Dakota Ethanol has never had a collectibility problem with Ethanol
Products since the plant commenced operations in September, 2001.

Shipping Costs. Page F-8

7.   Please tell us how you
concluded that shipping costs arranged by the marketer should be treated as a
reduction of the gross sale price.
Please also tell us whether you pay these shipping costs and are later
reimbursed by the marketer.
Alternatively, does the marketer directly pay these shipping costs
without involving you?

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Our Comment:

All of the shipping of distiller’s grains is arranged and controlled by
our marketer, Dakota Gold Marketing. As a result of this arrangement, Dakota
Gold Marketing is responsible for paying the shipping costs related to the sale
of distiller’s grains, without any involvement of or direct payment from Dakota
Ethanol. After a sale of distiller’s grains is made to a customer, the customer
pays Dakota Gold Marketing in full. Dakota Gold Marketing, in turn, remits
payment to Dakota Ethanol minus the shipping costs. Thus, the payment made by
Dakota Gold Marketing to Dakota Ethanol represents a net sales price, upon which revenue is recorded. In short,
the arrangement between Dakota Ethanol and Dakota Gold Marketing controls why
shipping costs are deducted from cost of revenues. See also the accounting
policy as discussed above in Comment 5 for further information.

Inventory Valuation, page
F-8

8.  You state that ethanol and related products
are stated at net realizable value.
Please clarify how your accounting policy related to these inventories
complies with ARB No. 43, which indicates that inventories should be recorded
at the lower of cost or market.

Our Comment:

We
believe that the policy for valuing the inventories of ethanol and its related
products based on a net realizable value, complies with ARB No. 43. ARB No. 43,
Chapter 4, Statement No. 9, Paragraph 16 states an exception to the general
rule of inventories being stated at cost. An exception is allowable “for
inventories representing agricultural, mineral, and other products, units of
which are interchangeable and have an immediate marketability at quoted prices
and for which appropriate costs may be difficult to obtain.”

First, ethanol and distiller’s grains are interchangeable. Each gallon
of ethanol produced by one company is virtually indistinguishable in form and
substance from a gallon produced by another company. Similarly, each ton of
distiller’s grains produced by one company is virtually identical in form and
substance to a ton of distiller’s grains produced by another company. Second,
ethanol and distiller’s grains have an immediate marketability at quoted
prices. Both ethanol and distiller’s grains are readily saleable as a finished
product, the price of which can be immediately quoted from the applicable spot
market.  Finally, appropriate costs of
the products are difficult to obtain primarily due to the nature of the manufacturing
process, which makes it difficult and impractical to assign separate costs to
the products as they are intermingled through the process stream. In addition,
the monetary costs in attempting to assign costs to the separate but
inter-related products, outweigh any benefits received by Dakota Ethanol.

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Property
and Equipment, page F-10

9.   Please separately discus the types of assets
under the Equipment category that fall in each part of the range disclosed.

Our Revised Disclosure (Changes are underlined):

Property
and equipment is stated at cost. Significant additions and betterments are
capitalized, while expenditures for maintenance, repairs and minor renewals are
charged to operations when incurred. Construction in progress includes the cost
of assets under construction, including capitalized interest and related costs,
which have not been placed in service as of the balance sheet date.
Depreciation on assets placed in service is computed using the straight-line
method over estimated useful lives as follows:

  Site improvements

  40
  years

  Equipment

  5-20
  years

  Buildings

  40
  years

Equipment
relates to two general categories: mechanical equipment and administrative and
maintenance equipment. Mechanical equipment generally relates to equipment for
handling inventories and the production of ethanol and related products, with
useful lives of 15 to 20 years, including boilers, cooling towers, grain bins,
centrifuges, conveyors, fermentation tanks, pumps and drying equipment. Administrative
and maintenance equipment is equipment with useful lives of 5 to 15 years, including
vehicles, computer systems, security equipment, testing devices and shop
equipment.

The
Company reviews its property and equipment for impairment whenever events indicate
that the carrying amount of the asset may not be recoverable. An impairment
loss is recorded when the sum of the future cash flows is less than the
carrying amount of the asset. An impairment loss is measured as the amount by
which the carrying amount of the asset exceeds its fair value.

Note
9.  Commitments, Contingencies and
Agreements, page F-15

10.  Given the disclosures provided in Item 7A
(Market Risk), please describe the terms of derivative financial instruments
that are outstanding related to the purchase of corn and natural gas.  For example, for forward contracts to
purchase corn and natural gas, please disclose the amounts you are committed to
purchasing and the corresponding prices.
Please also disclose when you are committed to making these
purchases.  Please provide an estimate of
your expected annual corn and natural gas usage to help readers understand the
portion of usage for which you have
attempted to reduce market risk.

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Our Revised Disclosure:

As of December 31, 2004, Dakota Ethanol is committed to purchasing 1.6
million bushels of corn on a forward contract basis through December 31, 2005,
valued at approximately $3.8 million. The corn purchase contracts represent 9%
of the annual plant corn usage.  Further,
Dakota Ethanol is committed to purchasing 136,000 mmBtu’s of natural gas for
2005, valued at approximately $1.0 million.
The natural gas purchases represent approximately 8% of the annual plant
requirements.

Note 12.  Subsequent Events, page
F-19

11.  Please disclose what specific changes were
made to the historical December 31, 2004 financial statements due to the waiver
received by First National Bank in March 2005.
Also, tell us how you determined it was appropriate to reflect the
effects of the of the waiver to the historical December 31, 2004 financial
statements. Your explanation should refer to the accounting guidance used to
determine this treatment was appropriate.

Our
Revised Disclosure (Changes are underlined):

During March 2005, First National Bank
granted Dakota Ethanol a waiver of the excess cash flow recapture covenant
effective for fiscal year 2004 and thereafter. The effects