SecProbe.io

CORRESP
1
filename1.htm

August 16, 2010

VIA EDGAR CORRESPONDENCE AND
FACSIMILE

Mr. John Reynolds

Assistant Director, Division
of Corporation Finance

Securities and Exchange
Commission

100 F Street N.E., Mail Stop
3561

Washington, D.C. 20549-3561

Re:                             Golden
Growers Cooperative

Form 10,
Amendment 1

Filed June 30,
2010

File No. 0-53957

Dear Mr. Reynolds:

We are writing in response
to your letter dated July 15, 2010, regarding the Registration Statement
as amended on Form 10/A of Golden Growers Cooperative (the “Cooperative”),
filed on June 30, 2010, File Number 0-53957 (the “Registration Statement”).  To facilitate your review of our response, we
are including your comments in boldface type, followed by our response and
where appropriate, our revisions to the Registration Statement.  We are also attaching a marked document (the “Markup”)
that shows all of our revisions as they appear in our amended Registration
Statement filed as of the date hereof (the “Amended Registration Statement”) as
included or referenced in our responses.

General

1.                                      We note that you indicate that the company is a non-accelerated filer not
a smaller reporting company.  Please
advise us how you determined that the company is not a smaller reporting
company.

RESPONSE:

In response to your inquiry
we have examined the various definitions and requirements to qualify as a
smaller reporting company and we do not believe that the Cooperative qualifies
as a smaller reporting company.  Below
please find a discussion of our analysis.

112 Roberts Street North. Suite 111, Fargo, ND 58102

Rule 12b-2 defines the
term “smaller reporting company” as: “An issuer that is not an investment
company, an asset-backed issuer …,” or “A majority-owned subsidiary of a parent
that is not a smaller reporting company” and that “(1) had a public float
of less than $75,000,000 as of the last business day of its most recently
completed second fiscal quarter computed by multiplying the aggregate worldwide
number of shares of its voting and nonvoting common equity held by its non-affiliates
by the price at which the common equity was last sold, or the average of the
bid and asked prices of common equity, and the principal market for the common
equity, or … (3) in the case of an issuer whose public float as calculated
under paragraph (1) or (2) of this definition was zero, had revenues
of less than $50,000,000 during the most recently completed fiscal year for
which the audited financial statements are available.”  Item (4)(iii) of Rule 12b-2 states:
“Once an issuer fails to qualify for smaller reporting company status, it will
remain unqualified unless it is determined that its public float, as calculated
in accordance with paragraph (f)(1) of this definition, was less than
$50,000,000 as of the last business day of its second fiscal quarter . . .” or “if
that calculation results in zero because the issuer had no public equity
outstanding or no market price for its equity existed, if the issuers had
annual revenues of less than $40,000,000 during the previous fiscal year.”

We make reference to these
multiple definitions of a smaller reporting company because the Cooperative
does not have a public float.  The nature
of the Cooperative is such that its units are not and will not be listed on a
market nor will any public equity be issued and outstanding.  Because the Cooperative does not have a
public float, it is difficult for it to qualify as a smaller reporting
company.  As indicated in the financial
statements of the Cooperative, the revenue of the Cooperative is an amount
equal to what Cargill pays the Cooperative’s members for their corn.  Currently, the Cooperative’s members annually
deliver 15,490,480 bushels of corn to Cargill.
Calculating revenue for the Cooperative is a factor of the average
per-bushel price paid by Cargill each year.
Because corn is a commodity, the per bushel price fluctuates, but it
generally fluctuates such that it pushes the Cooperative’s revenue over
$40,000,000 or $50,000,000 for any given year.
The annualized per bushel price of corn would have to fall below $3.23
to meet the $50,000,000 test or $2.59 to meet the $40,000,000 test.  Generally, the per bushel price for corn is
$3.50.

As indicated above, the
Cooperative’s revenues will fluctuate year-to-year based on the per-bushel
price of corn.  This fluctuation in
revenues could result in the Cooperative moving in and out of the definition of
a smaller reporting company on an annual basis.
Further to this discussion Cooperative has determined that it is currently
a non-accelerated filer since its annual revenues for 2009 were in excess of
$50,000,000.

Item 1.
Business

Business Operations, page 4

2.                                      We note that you have revised your arrangement with your members and
Cargill effective January 1, 2010, based on disclosure on page F-7.  Please clarify that your disclosure relates
to periods after January 1, 2010, and that arrangements prior to that date
were different.

2

RESPONSE:

Yes, our disclosure relates
to periods after January 1, 2010 and the contractual arrangements prior to
that date as well as August 31, 2009 were different.  Our financial statements discuss both our
historic financial performance as well as our financial performance starting as
of January 1, 2010, so the financial statements include both a past
discussion of the arrangement between our members and Cargill as well as a
going-forward discussion.  The
contractual arrangement prior to our reorganization effective September 30,
2009 is not relevant going forward so we did not include a discussion of that
arrangement in our disclosure.  In
addition, including such a discussion may confuse our members since that
contractual arrangement is no longer applicable to them and their relations
with Cargill.

Management’s
Discussion and Analysis of Financial Condition and Results of Operation Three
Months Ended March 31, 2010 and March 31, 2009

Revenues, page 12

3.                                      Please
revise your discussion of net corn (expense) and income from ProGold to
describe and quantify the underlying variances between each period.  For example, you should clarify how much in
corn revenues/expenses were generated from the Method A incentive payment and
the Method B agency fee, respectively.  Your
analysis should not merely recite information presented in your statement of
operations.

RESPONSE:

Included in our Amended Registration
Statement for the periods ended June 30, 2010 and 2009 please find a revised
discussion of the net corn expense and income which includes the requested
clarification regarding the revenues and expenses generated during each quarter
from the Method A incentive payment and the Method B agency fees,
respectively.  Below is a portion of
Amended Registration Statement that shows the changes we have made in the
Amended Registration Statement as well as the disclosure we are including in
our Quarterly Report filed on Form 10-Q:

“Revenues.  The Cooperative
can derive revenue from two sources:  our
operations related to facilitating the delivery of our members’ corn, or from
the income derived from our ownership interest in ProGold.  Our corn delivery operations are
intentionally designed to begenerate
revenue to the Cooperative equal to the price Cargill pays to our growers for
their corn.  The Cooperative recognizes
expense equal to this same amount which results in our corn delivery operations
being essentially revenue neutral to the Cooperative. During the three
months periods ended March 31, except
for revenue from our Method B agency fee and expenses related to our Method A
incentive payments and our service fee paid to Cargill.  During the six month period ended June 30
2010, our members delivered to Cargill for processing at the facility 2,840,019
bushels of corn using Method A and 5,529,763 bushels of corn using Method B
resulting in incentive fee expense of $142,001 and agency fee income of
$110,595 for this period.  The
Cooperative did not pay an incentive fee for Method A delivery prior to its
reorganization into a 308B cooperative association effective September 1,
2009 and all deliveries between September 1, 2009 and December 31,
2009 were deemed to be delivered via Method B with the agency fee waived.  During the six month periods ended June 30,
2010 and 2009, we recognized net corn expense of $046,000 and $20,000,40,000, respectively, in connection with costs incurred to Cargill
in connection with our corn delivery operation.
For the six month periods ended June 30,
2010 and June 30, 2009 we recognized corn revenue of $10,009,153 and
$12,624,195, with corn expense of $10,086,559 and $12,664,l95 for the same
periods.”

3

The Cooperative derived income from ProGold for the threesix month period ended March 31,June 30, 2010, of $1,560,0003,259,000 an increase of $372,000440,000 or 3116% as compared to the threesix
month period ended March 31,June 30,
2009.

Liquidity
and Capital Resources, page 14

4.                                      We reviewed your response to our prior comment 7 and your tabular
disclosure of contractual obligations.
In order to provide an investor with a better understanding of your
contractual obligations, revise to include a footnote to your table to describe
the nature of such purchase obligations.

RESPONSE:

We have included the revised
the footnotes in our tabular disclosure on Page 14 as follows:

  One to

  Less than

  Three

  Four to

  After Five

  Total

  One Year

  Years

  Five Years

  Years

  Purchase Obligations (1)

  782,000

  46,000

  276,000

  184,000

  276,000

  Operating
  Lease Obligations (2)

  45,000

  4,350

  22,200

  18,450

  0

  Total Contractual Obligations

  $

  827,000

  $

  50,350

  $

  298,200

  $

  202,450

  $

  276,000

(1)
Includes payments due under the Cargill Grain Services Agreement that
terminates December 31, 2017.

(2)
Lease terminates on June 30, 2015

Item
5.  Directors and Executive Officers, page 17

5.                                      Please revise your disclosure to address how the Chairman, 1st Vice Chairman, 2nd Vice Chairman and Secretary are
selected.  Advise us of the basis for
your determination that the disclosure required by Item 401(e)(1) of Regulation
S-K is not required for the Chairman, 1st Vice Chairman and 2nd Vice Chairman.  We may have further comment.

RESPONSE:

Please
find in our Amended Registration Statement the following description regarding
how the chairman, first vice chairman, second vice chairman and secretary are
selected:

“Our
board officers consist of a Chairman, First Vice Chairman, Second Vice Chairman
and Secretary of the board.  These board
offices are populated by members of the board who are elected by and at the
discretion of the Board of Directors.
Each of these individual’s experience, qualifications, attributes or
skills to serve in their capacity as a board officer is determined by the
members of the Board of Directors who are voting to place these individuals

4

in
these offices.  The Cooperative is not
part of any conclusions that are made by the Board of Directors with respect to
these individuals’ ability to serve in these board office positions.”

You requested that we advise
you as to the basis of our determination that the disclosure required under
Item 401(e)(1) of regulation S-K is not required for the above discussed
board offices.  Based on the structure of
our Cooperative, each member of the Board of Directors makes these
determinations and the Cooperative does not participate in any of the analysis
or determinations contemplated under item 401(e)(1) of Regulation
S-K.  If your concern is that we provide
disclosure relating to the level of an individual board member’s professional
competence to serve as either chairman, vice chairman or board secretary, we
are of the position that such a determination is not made by the Cooperative
and is in the purview of the individual members of the Board of Directors.  We have attempted to provide all of the
information requested and required under Item 401(e)(1) of Regulation S-K
but the structure of our Cooperative and our Board of Directors does not
necessarily correspond with the structural concerns outlined or contemplated
under Item 401(e)(1) of Regulation S-K.

Item
7.  Certain Relationships and Related
Transactions, Director Independence, page 22

6.                                      We have reviewed your response to prior comment number 15 of our letter
dated May 27, 2010.  In it, you
refer to the New York Stock Exchange definition of independent director.  Please include in the disclosure the
definition to which you refer.

RESPONSE:

Section 303A.02
of the New York Stock Exchange Listed Company Manual provides the following
definition of an independent director:

“In
order to tighten the definition of ‘Independent Director’ for purpose of these
standards:  (a) No director
qualifies as ‘Independent’ unless the Board of Directors affirmatively
determines that the director has no material relationship with the listed
company (either directly or as a partner, shareholder or officer of an
organization that has a relationship with a company).  (b) In addition, a director is not
independent if:  (i) The director
is, or has been within the last 3 years, an employee of the listed company or
immediate family member is, or has been within the last 3 years, an executive
officer, of the listed company.
(ii) The director has received, or has an immediate family member
who has received, during any 12-month period within the last 3 years, more than
$120,000 in direct compensation from the listed company, other than director or
committee fees and pension or other forms of deferred compensation for prior
service (provided such compensation is not contingent in any way on continued
service).  (iii)(A) The director is
a current partner or employee of a firm that is the listed company’s internal
or external auditor; (B) the director has an immediate family member who
is a current partner of such firm; (C) the director has an immediate
family member who is a current employee of such a firm and personally works on
the listed company’s audits; or (D) the director or an immediate family
member was, within the last 3 years, a partner or employee of such a firm and
personally worked on the listed company’s audit within that

5

timeframe.  (iv) The Director or an immediate family
member is, or has been within the last 3 years, employed as an executive
officer of another company or any of the listed company’s present executive
officers at the same time serves or served on that company’s compensation
committee.  (v) The Director is a
current employee, or an immediate family member or an immediate family member
is a current executive officer, of a company that has made payments to, or
received payments from, the listed company for property or services in an
amount which, in any of the last 3 fiscal years, exceeds the greater of
$1,000,000 or 2% of such company’s consolidated gross revenues.  In addition, references to the “listed
company” or “company” include any parent or subsidiary in a consolidated group
with the listed company or such other company as is relevant in determination
under the independent standards set forth in this Section 303A.02(b).”

We
are assuming your request is for us to add the specific definitional reference
to our disclosure and not the text of the definition. To that end we have
revised our disclosure in our Amended Registration Statement as follows:

“Because
all of our members have a financial relationship with the Cooperative as well
as a relationship that may be material to the member, the Board has elected to
determine our directors’ independence usingbased on the definition of an independent director found in Section 303A.02