GFGY Granite Falls Energy LLC (CE)

GRANITE FALLS ENERGY, LLC

15045 Highway 23 S.E.

Granite Falls, MN  56241-0216

NOTICE OF 2011 ANNUAL MEETING OF MEMBERS

To Be Held On:  Thursday, March 31, 2011

To our members:

The 2011 Annual Meeting of Members (the “2011 Annual Meeting”) of Granite Falls Energy, LLC (the “Company”) will be held on Thursday, March 31, 2011, at Prairie’s Edge Casino Resort, 5616 Prairie’s Edge Lane, Granite Falls, Minnesota.  Registration for the meeting will begin at 8:00 a.m. The 2011 Annual Meeting will commence at 9:00 a.m.  The purposes of the meeting are to:

·       Elect two (2) Governors to serve on the Company’s Board of Governors. The two (2) elected Governors will serve until the 2014 Annual Meeting of Members and until their successors are elected;

·       Conduct an advisory vote on our executive compensation called “Say-on-Pay”;

·       Conduct an advisory vote on the frequency of the Say-on-Pay vote; and

·       Transact such other business as may properly come before the 2011 Annual Meeting or any adjournments thereof.

The foregoing items of business are more fully described in the proxy statement accompanying this notice.  If you have any questions regarding the information in the proxy statement or regarding completion of the enclosed proxy card or how to vote in person at the meeting, please call the Company at (320) 564-3100.

Only members listed on the Company’s records at the close of business on February 21, 2011 are entitled to notice of the 2011 Annual Meeting and to vote at the 2011 Annual Meeting and any adjournments thereof.  For your proxy card to be counted in advance of the meeting, it must be received by our accounting firm, Christianson & Associates, PLLP, 302 SW 5th Street, Willmar, MN 56201, no later than 5:00 p.m. on Wednesday, March 30, 2011.

All members are cordially invited to attend the 2011 Annual Meeting in person.  However, to assure the presence of a quorum, the board of governors requests that you promptly sign, date and return the enclosed proxy card, which is solicited by the board of governors, whether or not you plan to attend the meeting.  The proxy card will not be used if you attend and vote at the meeting in person.  You may fax the enclosed proxy card to Christianson & Associates, Attention: Christina Parsley, at (320) 235-5962 or mail it to Christianson & Associates, PLLP, Attention: Christina Parsley, at 302 SW 5th Street, Willmar, MN 56201, using the enclosed envelope.

Granite Falls, Minnesota

February 21, 2011

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Granite Falls Energy, LLC

1504 Highway 23 S.E.

Granite Falls, MN 56241-0216

Proxy Statement

Annual Meeting of Members

Thursday, March 31, 2011

The enclosed proxy is solicited by the board of governors of Granite Falls Energy, LLC (the “Company”, “we”, “us”, “our”) for use at the 2011 Annual Meeting of members of the Company to be held on Thursday, March 31, 2011 (the “2011 Annual Meeting”), and at any adjournment thereof.  The 2011 Annual Meeting will be held at Prairie’s Edge Casino Resort, 5616 Prairie’s Edge Lane, Granite Falls, Minnesota.  Registration for the meeting will begin at 8:00 a.m. The 2011 Annual Meeting will commence at approximately 9:00 a.m.

This solicitation is being made by mail, however, the Company may also use its officers, governors, and employees (without providing them with additional compensation) to solicit proxies from members in person or by telephone, facsimile or letter.  Distribution of this proxy statement and a proxy card is scheduled to begin on or about February 21, 2011.

We have organized this proxy statement into three sections in order to set forth our information in a straightforward and understandable way.  You should read all three sections.

·       Questions and Answers about the 2011 Annual Meeting:  this section provides answers to frequently asked questions regarding the purpose of the Annual Meeting and meeting procedures.

·       Proxy Proposals:  this section provides information and detailed explanation of the proposals to be voted on at the 2011 Annual Meeting.

·       Required Information:  this section provides information that is required by law to be included in the Company’s Proxy Statement, which has not been included in Sections I and II.

SECTION I — QUESTIONS AND ANSWERS ABOUT THE 2011 ANNUAL MEETING AND VOTING

Q:            Why did I receive this proxy statement?

A:             The board of governors is soliciting your proxy to vote at the 2011 Annual Meeting because you were a member of the Company at the close of business on February 21, 2011, the record date, and are entitled to vote at the meeting.

Q:            What am I voting on?

A:             You are voting on three proposals:

Proposal 1: The election of two governors.  The following persons have been nominated by the nominating committee to fill the two open seats of the board of governors:   David Thompson and Shannon Johnson. Detailed information on each nominee is provided below at “SECTION II — PROPOSALS TO BE VOTED ON, ELECTION OF GOVERNORS.”  The board of governors believes both of the nominees are well qualified to serve as a governor of the Company and is recommending both of the nominees for election as governors.

Proposal 2 & 3: You are also providing an advisory vote on the Company’s executive compensation called a “Say-on-Pay” vote and providing an advisory vote on how frequently you would like the Company to present the Say-on-Pay vote to the members.

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Q:            How many votes do I have?

A:             Members are entitled to one vote for each membership unit owned by such member as of the close of business on the record date on any matter which may properly come before the meeting.

Q:            What is the Say-on-Pay Vote?

A:             The Say-on-Pay vote is an advisory vote by the Company’s members whereby the member can either endorse or not endorse the Company’s system of compensating its executive officers.  While the Say-on-Pay vote is not binding on the Board, the Board intends to take the vote into consideration in making future compensation awards to the Company’s executive officers.  The Company may also use the Say-on-Pay vote to engage members in a dialogue regarding the Company’s system of compensating its executive officers.

Q:            What is the advisory vote on how frequently the Company will present the Say-on-Pay vote to members?

A:             In addition to the Say-on-Pay vote discussed above, the Company is presenting the members the opportunity to provide input on how often the members would like to hold the Say-on-Pay vote.  The members can choose whether they would like the Company to have the Say-on-Pay vote every year, every other year or every third year.  While this vote is not binding on the Board, the Board intends to use the results of this vote to determine how frequently to present the Say-on-Pay vote at the Company’s annual meetings.

Q:            What is the voting requirements for the proposals?

A:             Proposal 1: In the election of governors, the two nominees receiving a plurality vote of the membership units will be elected, however, the units owned by Fagen, Inc. are excluded in determining the outcome of the plurality vote for purposes of the election of governors.  Therefore, the two nominees receiving the greatest number of votes will be elected as governors regardless of whether an individual nominee receives a majority of the votes cast.

Proposal 2: The advisory vote on executive compensation called the Say-on-Pay vote will be approved if the votes cast FOR the proposal exceed the votes cast AGAINST the proposal.

Proposal 3:  The advisory vote on how frequently to present the Say-on-Pay vote to the members is a plurality vote, which means that the alternative that receives the greatest number of votes, compared to the votes cast for the other alternatives, will be the vote of the members.

Q:            How many membership units are outstanding?

A:             On February 21, 2011, there were 30,656 membership units outstanding.  Of the 30,656 outstanding membership units, the units owned by Fagen, Inc. are excluded in determining the outcome of the plurality vote for purposes of the election of governors.  However, units owned by Fagen, Inc. may be included when determining whether a quorum is present and with regard to all other non-election items brought before the members.  Fagen, Inc. owns a total of 3,925 membership units.  Accordingly, only 26,731 membership units are permitted to vote in our election of governors.

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Q:            What is the effect of an abstention?

A:             Abstentions will be counted when determining whether a quorum is present. Abstentions will be handled as follows for each proposal.

Proposal 1:  Abstentions for Director elections will not be counted either for or against any nominee because Directors are elected by plurality vote, meaning that the person receiving the most votes will be elected.

Proposal 2:  Abstentions with respect to the Say-on-Pay vote will not be counted either for against the proposal.

Proposal 3:  Abstentions with respect to how frequently to present the Say-on-Pay vote will not be counted either for or against any alternative.

Q:            What constitutes a quorum?

A:             As of the record date, we had 30,656 membership units issued and outstanding. The presence of members holding 40 percent of the total outstanding membership units constitutes a quorum. Accordingly, we need 12,263 membership units represented at the meeting to constitute a quorum. If you submit a properly executed proxy, then you will be considered part of the quorum even if you are not physically present at the meeting.

Q:            How do I vote?

A:             Membership units can be voted only if the holder of record is present at the 2011 Annual Meeting either in person or by proxy.  You may vote using either of the following methods:

·       Proxy card.  The enclosed proxy card is a means by which a member may authorize the voting of his, her, or its membership units at the 2011 Annual Meeting.  The membership units represented by each properly executed proxy card will be voted at the 2011 Annual Meeting in accordance with the member’s directions.  The Company urges you to specify your choices by marking the appropriate boxes on your enclosed proxy card.  After you have marked your choices, please sign and date the enclosed proxy card and return it in the enclosed envelope or fax it to Christianson & Associates, Attention: Christina Parsley, at (320) 235-5962.  If you sign and return the proxy card without specifying any choices, your membership units will be voted FOR the incumbents Shannon Johnson and David Thompson, FOR Proposal Two — Say-on-Pay and EVERY 3 YEARS with respect to Proposal Three — Frequency of the Say-on-Pay vote.

·       In person at the 2011 Annual Meeting.  All members may vote in person at the 2011 Annual Meeting.

Q:            What can I do if I change my mind after I vote my units?

A:             You may revoke your proxy by:

·       Voting in person at the 2011 Annual Meeting; or

·       Giving written notice of revocation, which is received by Christianson & Associates, PLLP by 5:00 p.m. on Wednesday, March 30, 2011.

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Q:            What happens if I mark too few or too many boxes on the proxy card?

A:             If you do not mark any choices on the proxy card, then the proxies will vote your units FOR the incumbent governors Shannon Johnson and David Thompson, FOR Proposal Two — Say-on-Pay and EVERY 3 YEARS with respect to Proposal Three — Frequency of the Say-on-Pay vote.  You may wish to vote for only one of the governor nominees.  In this case, your vote will only be counted for the governor candidate you have selected.  If you mark contradicting choices on the proxy card, such as both FOR and ABSTAIN for a candidate or FOR and AGAINST a proposal, your votes will not be counted with respect to the governor candidate or the proposal for which you marked contradicting choices.  However, each fully executed proxy card will be counted for purposes of determining whether a quorum is present at the 2011 Annual Meeting.

If any other matters are properly presented to the 2011 Annual Meeting for action, the Proxy will vote the proxy cards (which confer discretionary authority to vote on such matters) in accordance with his best judgment.

Q:            Do I have dissenters’ rights to any matter acted upon during the Annual Meeting?

A:             No.  Neither the election of governors nor the advisory votes are circumstances in which the Minnesota Limited Liability Company Act or the Company’s member control agreement provides members with dissenters’ rights.  Pursuant to the Minnesota Limited Liability Company Act, dissenters’ rights are available to members under the following circumstances: (1) an amendment to the articles of organization which materially and adversely affects the rights or preferences of the membership interests of the dissenting member; (2) a sale, lease, transfer, or other disposition of property and assets requiring member approval; (3) a plan of merger; (4) a plan of exchange; (5) a plan of conversion; or (6) any other action taken to which the articles of organization, member control agreement, bylaws, or a resolution approved by the board of governors directs that dissenting members may obtain payment for their membership units.  In addition, the Company’s member control agreement does not provide for any dissenters’ rights for our members.

Q:            Who can attend the 2011 Annual Meeting?

A:             All members as of the close of business on the record date may attend the 2011 Annual Meeting.

Q:            What is the record date for the 2011 Annual Meeting?

A:             February 21, 2011.

Q:            Who will count the vote?

A:             The Company has hired the accounting firm of Christianson & Associates, PLLP to count the ballots.

Q:            How do I nominate a candidate for election as a governor at next year’s annual meeting?

A:             Three governor positions will stand for election at the 2012 Annual Meeting.  Nominations for governor positions are made by a nominating committee appointed by the Board.  In addition, a member may suggest to the nominating committee a candidate for governor by following the requirements of Rule 14a-11 under the Securities and Exchange Act of 1934.  Written notice of a member’s intent to nominate an individual for governor must be given, either by personal delivery or by United States mail, postage prepaid, to the Secretary of the Company not less than 120 calendar days prior to the one year anniversary of the date the Company’s proxy statement was released in connection with the previous year’s annual meeting.  These

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procedures are described in greater detail below in the question “When are member proposals and governor nominations due for the 2012 annual meeting?”

Q:            What is a member proposal?

A:             A member proposal is your recommendation that the Company and/or the board of governors take action, which you intend to present at a meeting of the Company’s members. Your proposal should state as clearly as possible the course of action that you believe the Company should follow. If your proposal is included in the Company’s proxy statement, then the Company must also provide the means for members to vote on the matter via the proxy card. The deadlines and procedures for submitting member proposals for the 2011 Annual Meeting are explained in the following question and answer. The Company reserves the right to reject, rule out of order, or take appropriate action with respect to any proposal that does not comply with these and other applicable requirements.

Q:            When are member proposals and governor nominations due for the 2012 Annual Meeting?

A:             We intend to hold our 2012 Annual Meeting during the last half of March 2012.  In order to be considered for inclusion in next year’s proxy statement, member proposals submitted pursuant to the requirements of Rule 14a-8 under the Securities and Exchange Act of 1934. Generally, member proposals and governor nominations must be submitted in writing to the Company by October 24, 2011.  The Company suggests that proposals for the 2012 annual meeting of the members be submitted by certified mail-return receipt requested.

Members who wish to nominate a governor candidate or make a member proposal pursuant to the requirements of the Securities and Exchange Act of 1934, must file the required notice on Schedule 14N no earlier than September 24, 2011 and no later than October 24, 2011 and follow the other requirements of Rule 14a-11.

Members who intend to present a proposal at the 2012 annual meeting of members without including such proposal in the Company’s proxy statement must provide the Company notice of such proposal no later than January 7, 2012.  The Company reserves the right to reject, rule out of order, or take appropriate action with respect to any proposal that does not comply with these and other applicable requirements.

If the Company does not receive notice of a member proposal intended to be submitted to the 2012 annual meeting by January 7, 2012, the persons named on the proxy card accompanying the notice of meeting may vote on any such proposal in their discretion, provided the Company has included in its proxy statement an explanation of its intention with respect to voting on the proposal.

Q:            Who is paying for this proxy solicitation?

A:             The entire cost of this proxy solicitation will be borne by the Company.  The cost will include the cost of supplying necessary additional copies of the solicitation material for beneficial owners of membership units held of record by brokers, dealers, banks and voting trustees and their nominees and, upon request, the reasonable expenses of such record holders for completing the mailing of such material and report to such beneficial owners.

FORWARD-LOOKING STATEMENTS

This proxy statement contains forward-looking statements that involve future events, our future performance and our expected future operations and actions.  In some cases you can identify forward-looking statements by the use of words such as “may,” “will,” “should,” “anticipate,” “believe,” “expect,” “plan,” “future,”

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“intend,” “could,” “estimate,” “predict,” “hope,” “potential,” “continue,” or the negative of these terms or other similar expressions.  These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties, including, but not limited to those listed below and those business risks and factors described elsewhere in this proxy statement and our other Securities and Exchange Commission filings.

Our actual results or actions could and likely will differ materially from those anticipated in the forward-looking statements for many reasons, including the reasons described in this proxy statement.  We are not under any duty to update the forward-looking statements contained in this proxy statement.  We cannot guarantee future results, levels of activity, performance or achievements.  We caution you not to put undue reliance on any forward-looking statements, which speak only as of the date of this proxy statement.  You should read this proxy statement and the documents that we reference in this proxy statement, completely and with the understanding that our actual future results may be materially different from what we currently expect.  We qualify all of our forward-looking statements by these cautionary statements.

SECTION II — PROPOSALS TO BE VOTED UPON

PROPOSAL ONE

ELECTION OF TWO GOVERNORS

Eight (8) elected governors and one (1) appointed governor comprise our board of governors. The eight elected governor positions are currently divided into three classes. Two governors are to be elected by the members at the 2011 Annual Meeting and the terms of the remaining elected governors expire in either 2012 or 2013. The Company’s current elected governors and their respective terms are as follows:

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At the 2008 annual meeting, Shannon Johnson and Ken Berg were re-elected to serve a three-year term until the 2011 annual meeting. At the 2009 annual meeting Dennis Wagner was elected and Rod Wilkison was re-elected to serve three year terms until the 2012 annual meeting.   At the 2010 annual meeting Paul Enstad was re-elected to serve until the 2012 annual meeting, and Dean Buesing, Julie Oftedahl-Volstad, and Myron Peterson were re-elected to serve until the 2013 annual meeting.

The nominating committee of the board of governors has nominated David Thompson and Shannon Johnson as nominees for the 2011 annual board of governors election.  Shannon Johnson served on the board since the Company’s inception in 2000 to present.  David Thompson has served as the alternate appointed governor since 2009.

The following table contains certain information with respect to the nominees for election to the board of governors at the 2011 Annual Meeting:

* David Thompson has served as an alternate appointed governor since 2009.

Biographical Information for Nominees

Shannon Johnson — Age 49 , At-Large Governor and nominee.   Mr. Johnson has served on the board of governors of the Company since its inception.  Mr. Johnson has been farming in eastern Yellow Medicine County since 1979. He produces corn, soybeans and sugar beets. He is co-owner and secretary of a farrow to finish swine operation and currently serves as the Hazel Run Township clerk. He is a Yellow Medicine County Corn Growers Board member and a Soybean Growers member.

David Thompson — Age 61 , Alternate At-Large Governor and nominee. Mr. Thompson was designated in November 2009 by the Company’s at-large governors to serve as the Company’s at-large alternate governor to act in the absence of an at-large governor.   For the past five years, Mr. Thompson has been president of Flolo-Thompson, Inc., a consulting firm serving value added agricultural plants in the design, development and operation of their business.  Much of Mr. Thompson’s consulting work focuses on transportation, logistics and marketing.  Mr. Thompson is a graduate of the University of Minnesota.  Prior to founding Flolo-Thompson, Inc., Mr. Thompson worked in varying capacities for Cargill, Bunge Corporation and the Burlington Northern Railway.

Required Vote and Board Recommendation

The affirmative vote of a plurality of the membership voting interests is required to elect a nominee to the position of governor.  The two nominees receiving the greatest number of votes will be elected as governors.  If you do not submit a proxy card or attend the meeting, or if you abstain from voting, your vote will not be counted as a vote for or against any nominee.

YOUR BOARD BELIEVES BOTH OF THE NOMINEES ARE WELL QUALIFIED TO SERVE AS A GOVERNOR OF THE COMPANY AND RECOMMENDS THE ABOVE NOMINEES FOR ELECTION AS GOVERNORS AT THE 2011 ANNUAL MEETING.

PROPOSAL TWO

ADVISORY VOTE ON EXECUTIVE COMPENSATION (SAY-ON-PAY)

We believe that our compensation policies and procedures are reasonable based on the size and complexity of the Company and are strongly aligned with the long-term interests of our members.  Recently, Congress passed a law that requires publicly reporting companies to present their members the opportunity to provide an advisory vote on the Company’s executive compensation program.  We urge you to read the “ EXECUTIVE

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COMPENSATION ” section of this proxy statement, including the Company’s Compensation Discussion and Analysis section, for details on the Company’s executive compensation, including the Company’s compensation philosophy and objectives and the 2010 compensation of our executive officers.  This advisory member vote, commonly known as “Say-on-Pay,” gives you as a member the opportunity to endorse or not endorse our executive officer compensation program and policies through the following resolution:

“RESOLVED, that the members endorse the compensation of the Company’s executive officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related disclosure contained under the caption “ EXECUTIVE COMPENSATION ” of this proxy statement.”

Because your vote is advisory, it will not be binding upon the Board. However, the Board will take into account the outcome of the vote when considering future executive compensation arrangements.  We believe the “Say-on-Pay” proposal demonstrates our commitment to achieving a high level of total return for our members.

This proposal will be approved if the votes cast FOR the proposal exceed the votes cast AGAINST the proposal, regardless of whether any alternative receives a vote from a majority of the units represented at the 2011 Annual Meeting.

THE BOARD RECOMMENDS THAT YOU VOTE FOR ENDORSEMENT OF THE COMPENSATION OF OUR EXECUTIVE OFFICERS.  FOR EACH PROPERLY EXECUTED PROXY CARD WHERE THE MEMBER DOES NOT MARK ANY CHOICES, THE PROXY WILL VOTE FOR THE APPROVAL OF PROPOSAL TWO.

PROPOSAL THREE

ADVISORY VOTE ON FREQUENCY OF THE SAY-ON-PAY VOTE

The Company is presenting the following proposal, which gives you as a member the opportunity to inform the Company as to how often you wish the Company to include a proposal, similar to Proposal Two, in our proxy statement.  This resolution is required pursuant to Section 14A of the Securities Exchange Act.  While the Board intends to carefully consider the member vote resulting from the proposal, the final vote will not be binding on the Company and is advisory in nature.

“RESOLVED, that the members wish the Company to include an advisory vote on the compensation of the Company’s executive officers pursuant to Section 14A of the Securities Exchange Act every: (i) year; (ii) two years; or (iii) three years.”

THE BOARD RECOMMENDS THAT YOU VOTE TO HOLD AN ADVISORY VOTE ON EXECUTIVE COMPENSATION (SAY-ON-PAY) EVERY 3 YEARS. FOR EACH PROPERLY EXECUTED PROXY CARD WHERE THE MEMBER DOES NOT MARK ANY CHOICES, THE PROXY WILL VOTE FOR EVERY 3 YEARS.

SECTION III — REQUIRED INFORMATION

GOVERNORS AND OFFICERS

Biographical Information for Non-nominee Governors

Paul Enstad — Age 51 , At-Large Governor, Chairman of the Board of Governors.   Mr. Enstad has served on the board of governors of the Company since its inception and is currently a member of the Company’s Audit Committee.  Mr. Enstad has been farming near Granite Falls, Minnesota since 1978. He and his two brothers currently farm together as a partnership and raise corn and soybeans. He serves on the board of directors of Farmers Cooperative Elevator Company, a member of the Company. In such capacity, he attends board meetings of Farmers Cooperative Elevator Company and otherwise provides periodic, informal business advice. Farmers Cooperative Elevator Company purchases agricultural products from its members and stores them for resale to food processors and sells agricultural goods and services to its members utilizing group buying leverage to obtain discounts not

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otherwise generally available to individual cooperative members, see “CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.”

Ken Berg — Age 50, At-Large Governor and Vice Chairman.    Mr. Berg is the president and a partner of Exetare Partners, LLP, a 15,000 head farrow to finish swine operation located in Clarkfield, Minnesota, since 1995.  Prior to Mr. Berg’s appointment to an at-large board seat in December 2006, he had been Fagen, Inc.’s appointee to the board of governors since October 2006.  Mr. Berg has served on his church council for 20 years.

Julie Oftedahl-Volstad — Age 56, At-Large Governor, Secretary.    Ms. Oftedahl-Volstad has served on the board of governors of the Company since its inception and is currently a member of the Company’s Audit Committee.  She has been farming along the Yellow Medicine River near Hanley Falls, Minnesota since 1978 on a farm homesteaded in 1873 by her great-great-grandfather. She farms in partnership with her three brothers, principally growing corn, soybeans, and wheat. She and her husband, Elmo, have five children. She has a degree in Sociology from Southwest Minnesota State University. She is an active member of Yellow Medicine Lutheran Church and currently serves on the church council. She is also on the board of Neighbors United Resource Center, a support organization.

Dean Buesing - Age 58, At-Large Governor.   Mr. Buesing and his brother have been farming near Granite Falls since 1973, raising corn and soybeans.  Since 1980, he has served as president of Buesing Farms, Inc.  He is also President of Buesing, Buesing, LLC, which is a farming operation formed in 2006.  Mr. Buesing was a director of Minnesota Corn Processors, LLC, an ethanol production facility located near Marshall, Minnesota from 1998 to 2002.  Minnesota Corn Processors, LLC was bought by Archer Daniels Midland in 2002. While a director of Minnesota Corn Processors, LLC, he also served on the long range planning and development committee.  Mr. Buesing is currently a director and secretary of SW Energy, LLC, a development stage ethanol production facility located near McCook, Nebraska.  From 1992 to 2000, he was also a director and treasurer of Yellow Medicine Soybean Growers.  He is also currently a member of the Minnesota Soybean and Corn Growers Associations.

Myron D. Peterson — Age 66 , At-Large Governor.   Mr. Peterson was designated in 2000 by our at-large governors as our at-large alternate generally to act in the absence of an at-large governor. He was elected to the Board of Governors as an at-large governor in March of 2010.  He farms with his four brothers and their families in a family farm partnership called Peterson Partners established in 1972, growing approximately 3,300 acres of corn and soybeans in western Renville County, Minnesota. Mr. Peterson served nine years as a director of the Minnesota Corn Growers Association Board. In 2003, he became a director of the Minnesota Corn Research and Production Council. He has been a supervisor for Hawk Creek Township for the past 33 years and County Township secretary-treasurer for Renville County for 30 years.

Steve Core — Age 61, Fagen, Inc. Appointed Governor.   In January 2010 Fagen, Inc. appointed Mr. Core to fill its appointed seat on the board of governors. Mr. Core serves at the pleasure of Fagen, Inc.  Mr. Core first became a governor in November 2002 and was reappointed to the board of governors in January 2010. Mr. Core has over 30 years of agricultural business management experience.  For the past nine years, Steve has served in market development, in connection with new ethanol plant construction for Fagen, Inc.  Prior to that, he served as general manager of a 44 million gallon per year ethanol production facility in Minnesota.  Mr. Core will serve indefinitely as a director on our board of directors at the pleasure of Fagen Inc., so long as Fagen Inc. continues to own 5% or more of the outstanding Granite Falls Energy, LLC membership units.  Mr. Core also serves as a director for Golden Grain Energy, LLC, a publicly reporting company, and Little Sioux Corn Processors, LLC.

Rod Wilkison — Age 56, At-Large Governor.   Mr. Wilkison was initially appointed to an at-large board seat in December 2006 and elected as an at-large governor in 2007.  Mr. Wilkison has served as a member of the Audit Committee since being elected as an at-large governor in 2007.  Mr. Wilkison has been the owner and chief executive officer of Wilkison Consulting Service since 1985. Wilkison Consulting Service provides financial consulting, tax preparation, and monthly accounting services for farmers and small businesses.   Prior to starting his consulting business, Mr. Wilkison worked for two different banks for over eleven years and continues to work closely with several area banks on joint clients.  Mr. Wilkison graduated from Pipestone Area Vocational Technical Institute with a degree in Agricultural Banking.  Mr. Wilkison is certified by the Minnesota Department of Agriculture as a Farm Business Management Instructor.

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Dennis Wagner — Age 59, Governor .   Mr. Wagner was elected to the board of governors in 2009.  For the past five years, Mr. Wagner has been owner and president of Wagner Construction, Inc., a highway and heavy contractor specializing in sewer, water, grading and logging operations in South International Falls, Minnesota.  He has also been president of Wagner Logging since 1974.  Mr. Wagner has been president of Logs-R-Us since 1988 and president of Recreational Land Developers since 2005.  From 1980 to 1984, Mr. Wagner was vice president of Derden Forest Products.  From 1993 to 2003, he was president of Nagurski Oil.

Biographical Information on Officers and Significant Employees

Tracey Olson—Age 44, Chief Executive Officer.   Mr. Olson joined the Company in 2006 as an advisor to the board of governors.  In December 2006, Mr. Olson was hired as the Company’s Chief Executive Officer. Prior to that, Mr. Olson worked for Fagen Engineering, LLC of Granite Falls, Minnesota at various positions from 1996 to 2006.  Mr. Olson’s last position at Fagen Engineering, LLC was the vice president of electrical engineering, which he held for approximately one year.  Prior to serving as the vice president of electrical engineering, Mr. Olson had been an electrical engineering department head.

Stacie Schuler — Age 38, Chief Financial Officer.   Ms. Schuler joined the Company in July 2005 as Controller.  In February 2006 Ms. Schuler was promoted to Chief Financial Officer for the Company.  Ms. Schuler worked for Cargill, Incorporated from 1997 to 2005.  Ms. Schuler received her accounting degree through Southwestern Technical College in Granite Falls, Minnesota and Southwest State University in Marshall, Minnesota.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

As of February 21, 2011, the following beneficial owners owned or held 5% or more of our outstanding membership units:

SECURITY OWNERSHIP OF MANAGEMENT AND NOMINEES

As of our fiscal year ended October 31, 2010, we had no equity compensation plan in place and accordingly none of our governors or our executive officers have received our membership units or options to purchase such units as compensation.  As of February 21, 2011, members of our board of governors, nominees to our board of governors and executive officers own membership units as follows:

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), requires our officers and governors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (the “SEC”).  Officers, governors and greater than 10% beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.  To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations from our officers and governors, all Section 16(a) filing requirements were complied with during the fiscal year ended October 31, 2010.

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BOARD OF GOVERNORS’ MEETINGS AND COMMITTEES

The board of governors generally meets once per month.  The board of governors held 12 regularly scheduled meetings and 1 special meeting during the fiscal year ended October 31, 2010.  All governors except for the Fagen, Inc. appointee, Steve Core, attended at least 75% of the meetings of the board of governors during the fiscal year ended October 31, 2010.

The board of governors does not have a formalized process for holders of membership units to send communications to the board.  The board of governors feels this is reasonable given the accessibility of our governors.  Members desiring to communicate with the board are free to do so by contacting a governor via our website, fax, phone or in writing.  The names of our governors are listed on the Company’s website at www.granitefallsenergy.com.

The board of governors does not have a policy with regard to governors’ attendance at annual meetings.  Last year all of our governors attended the Company’s annual meeting.  Due to this high attendance record, it is the view of the board of governors that such a policy is unnecessary.

Compensation Committee Interlocks and Insider Participation

None of the members of the compensation committee is or has been an employee of the Company.  There are no interlocking relationships between our Company and other entities that might affect the determination of the compensation of our executive officer.

Governor Independence Standards

In determining independence, the board reviews whether governors have any material relationship with the Company. The board considers all relevant facts and circumstances. In assessing the materiality of a governor’s relationship to the Company, the board considers the issues from the governor’s standpoint and from the perspective of the persons or organizations with which the governor has an affiliation and is guided by the standards set forth by the SEC and NASDAQ. An independent governor must not have any material relationship with the Company, directly or as a partner, shareholder, or officer of an organization that has a relationship with the Company, or any relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a governor.

All of our governors, except for Mr. Enstad, are independent, as defined by NASDAQ Rule 4200 and 4350.  Mr. Enstad serves on the board of directors of Farmers Cooperative Elevator Company, a member of the Company and the cooperative from which the Company procures its corn.  The position Mr. Enstad holds at the Farmers Cooperative Elevator Company precludes him from meeting the independence standards defined by NASDAQ Rule 4200 and 4350.

Code of Ethics

The board of governors has adopted a Code of Ethics that sets forth standards regarding matters such as honest and ethical conduct, compliance with the law, and full, fair, accurate, and timely disclosure in reports and documents that we file with the SEC and in other public communications.  The Code of Ethics applies to all of our employees, officers, and governors, including our Chief Executive Officer and Chief Financial Officer.  The Code of Ethics is available free of charge on written request to Granite Falls Energy, LLC, 15045 Highway 23 S.E., Granite Falls, Minnesota, 56241-0216.

Audit Committee

The Audit Committee of the board of governors operates under a charter adopted by the board of governors in Fall 2005.  Our audit committee charter is available on our website at www.granitefallsenergy.com. Under the charter, the Audit Committee must have at least three members.  Our audit committee members are Paul Enstad, Julie Oftedahl-Volstad and Rod Wilkison.  The chairperson of the Audit Committee is Paul Enstad.  The Audit Committee is exempt from the independence listing standards because the Company’s securities are not listed on a

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national securities exchange or listed in an automated inter-dealer quotation system of a national securities association or to issuers of such securities.  Under NASDAQ rules 4200 and 4350, a majority of our Audit Committee is independent within the definition of independence provided by NASDAQ rules 4200 and 4350.  In addition, our Audit Committee charter requires a majority of our committee members to be independent.  A majority of the members of our Audit Committee are independent as required by our Audit Committee charter. Mr. Enstad also serves on the board of directors of Farmers Cooperative Elevator Company, a member of the Company and the cooperative from which the Company procures its corn.  The position Mr. Enstad holds at the Farmers Cooperative Elevator Company precludes him from meeting the independence standards defined by NASDAQ Rule 4200 and 4350.

Rod Wilkison serves as our Audit Committee financial expert.  Mr. Wilkison’s experience as the owner and chief executive officer of Wilkison Consulting Service, which provides financial consulting, tax preparation, and monthly accounting services for farmers and small businesses, qualifies him to be the Audit Committee’s financial expert.   Mr. Wilkison is independent within the definition of independence provided by NASDAQ rules 4200 and 4350 and our Audit Committee charter.

The Audit Committee held 4 meetings during the fiscal year ended October 31, 2010.  All of our Audit Committee members attended 100% of the audit committee meetings.

Audit Committee Report

The Audit Committee delivered the following report to the board of governors of the Company on February 17, 2011. The following report of the Audit Committee shall not be deemed to be incorporated by reference in any previous or future documents filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates the report by reference in any such document.

The Audit Committee reviews the Company’s financial reporting process on behalf of the board of governors. Management has the primary responsibility for the financial statements and the reporting process.  The Company’s independent auditors are responsible for expressing an opinion on the conformity of the audited financial statements to generally accepted accounting principles.  The Audit Committee reviewed and discussed with management the Company’s audited financial statements as of and for the fiscal year ended October 31, 2010.  The Audit Committee has discussed with Boulay, Heutmaker, Zibell & Co. P.L.L.P., its independent auditors, the matters required to be discussed by Statement on Auditing Standards No. 61 Communication with audit committees, as amended, by the Auditing Standards Board of the American Institute of Certified Public Accountants and as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The Audit Committee has received and reviewed the written disclosures and the letter to management from Boulay, Heutmaker, Zibell & Co. P.L.L.P., as required by Independence Standards Board Standard No. 1, as adopted by the Public Company Accounting Oversight Board in Rule 3600T, and has discussed with the independent accountants the independent accountants’ independence.  The Audit Committee has considered whether the provision of services by Boulay, Heutmaker, Zibell & Co. P.L.L.P., not related to the audit of the financial statements referred to above and to the reviews of the interim financial statements included in the Company’s Forms 10-Q, and concluded that the provision of such services is compatible with maintaining Boulay, Heutmaker, Zibell & Co. P.L.L.P’s independence.

Our audit committee members are Paul Enstad, Julie Oftedahl-Volstad and Rod Wilkison.  The chairperson of the Audit Committee is Paul Enstad.  Based on the reviews and discussions referred to above, the audit committee recommended to the board of governors that the audited financial statements referred to above be included in the Company’s annual report on Form 10-K for the fiscal year ended October 31, 2010.

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Independent Registered Public Accounting Firm

The audit committee selected Boulay, Heutmaker, Zibell & Co. P.L.L.P., as independent registered public accountants for the fiscal year November 1, 2010 to October 31, 2011.  A representative of Boulay, Heutmaker, Zibell & Co. P.L.L.P., is expected to be present at the 2011 Annual Meeting of members and will have an opportunity to make a statement if so desired.  The representative is also expected to be available for questions from the members.

Audit Fees

The aggregate fees billed by the principal independent registered public accountants (Boulay, Heutmaker, Zibell & Co. P.L.L.P.) to the Company for the fiscal year ended October 31, 2010, and fiscal year ended October 31, 2009 are as follows:

(1)            The audit fees were incurred for the audit of the Company’s annual financial statements included within Form 10-K and review of the financial statements included in the Company’s quarterly reports on Form 10-Q, as well as services in connection with other statutory and regulatory filings or engagements for the fiscal years ended October 31, 2010 and 2009.

(2)            The tax fees were billed for services rendered for tax compliance, tax advice and tax planning. The nature of the services comprising the tax fees was for year-end tax preparation of the partnership return and associated K-1’s.

(3)            The other fees were billed for services rendered for the Renewable Identification Number (RINs) agreed-upon procedures, as well as other financial and tax related consulting.

Prior to engagement of the principal independent registered public accountants to perform audit services for the Company, the principal accountant was pre-approved by our audit committee pursuant to Company policy requiring such approval.

One hundred percent (100%) of all audit services, audit-related services and tax-related services were pre-approved by our audit committee.

Nominating Committee

The nominating committee operates under a charter adopted by the board of governors in August 2007.  Our nominating committee charter is available on our website at www.granitefallsenergy.com. Under the charter, the nominating committee must have at least three members.  Don Buesing, Mickey Peterson and Brad Strootman currently serve as the Company’s nominating committee. The chairperson of the nominating committee is Brad Strootman, who is not a member of our board of governors.

The nominating committee is exempt from the independence listing standards because the Company’s securities are not listed on a national securities exchange or listed in an automated inter-dealer quotation system of a national securities association or to issuers of such securities.  Nevertheless, each member of the nominating committee is independent under the NASDAQ definition of independence.  In addition, our nominating committee

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charter requires a majority of our committee members to be independent.  Each member of our nominating committee is independent under our nominating committee charter.

Subsequent to the fiscal year end, our nominating committee held two meetings for the purpose of selecting nominees for the election of governors at the 2011 Annual Meeting.  All of our nominating committee members attended each of the nominating committee meetings.

The nominating committee oversees the identification and evaluation of individuals qualified to become governors and recommends to the board of governors the governor nominees for each annual meeting of the members. The major responsibilities of the nominating committee are to:

·                   Develop a nomination process for candidates to the board of governors;

·                   Establish criteria and qualifications for membership to the board of governors;

·                   Identify and evaluate potential governor nominees;

·                   Fill vacancies on the board of governors; and

·                   Recommend nominees to the board of governors for election or reelection.

The following list represents the types of criteria the nominating committee takes into account when identifying and evaluating potential nominees:

·                   Agricultural, business and financial background;

·                   Accounting experience;

·                   Community or civic involvement;

·                   Independence from the Company (i.e. free from any family, material business or professional relationship with the Company);

·                   Lack of potential conflicts with the Company;

·                   Examples or references that demonstrate a candidates integrity, good judgment, commitment and willingness to consider matters with objectivity and impartiality; and

·                   Specific needs of the existing board relative to any particular candidate so that the overall board composition reflects a mix of talents, experience, expertise and perspectives appropriate to the Company’s circumstances.

Pursuant to the nominating committee’s charter, the nominating committee may consider potential governor candidates recommended by members.  Company members may submit recommendations for candidates to the Chairman of the nominating committee.  All nominations must be submitted in writing along with a completed nominee questionnaire which includes the nominating member’s name and contact information, a brief description of the candidate’s business experience, civic involvement, education and such other information as the member submitting the recommendation believes is relevant to the evaluation of the candidate.  All member recommendations for the election of governors at the 2012 Annual Meeting must be received by the Company no later than October 24, 2011.

Shannon Johnson and David Thompson were selected as nominees for the election of governors at the 2011 Annual Meeting by the nominating committee.

Compensation Committee

The entire board of governors serves as the Company’s compensation committee.  The compensation committee has the overall responsibility for approving and evaluating the Company’s governor and executive compensation plans, policies and programs.  The compensation committee does not delegate any of its authority or obligations; however, the compensation committee does consider recommendations from the board of governors’ three member executive committee.  Neither the Company nor the compensation committee has historically engaged compensation consultants to assist in determining or recommending the amount or form of executive or governor compensation, but would consider doing so in those situations where either the Company or the compensation committee felt it was warranted or appropriate.  The board of governors carried out its function as a compensation committee during two meetings held in the fiscal year ended October 31, 2010.

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The compensation committee does not operate under a charter.  The compensation committee is exempt from the independence listing standards because the Company’s securities are not listed on a national securities exchange or listed in an automated inter-dealer quotation system or a national securities association or to issuers of such securities.

MEMBER PROPOSALS

Any member proposal intended to be considered for inclusion in the Proxy Statement for presentation at the 2012 Annual Meeting of Members must be received by the Company no later than October 24, 2011.  The proposal must be in accordance with the provisions of Rule 14a-8 promulgated by the SEC under the Exchange Act.  The Company suggests that the proposal be submitted by certified mail — return receipt requested.

Members who intend to present a proposal at the 2012 Annual Meeting of members without including such proposal in the Company’s Proxy Statement must provide the Company notice of such proposal no later than January 7, 2012.  The Company reserves the right to reject, rule out of order, or take appropriate action with respect to any proposal that does not comply with these and other applicable requirements.  If the Company does not receive notice of a member proposal intended to be submitted to the 2012 Annual Meeting by January 7, 2012, the persons named on the proxy card accompanying the notice of meeting may vote on any such proposal in their discretion.  However, if the Company does receive notice of a member proposal intended to be submitted to the 2012 Annual Meeting by January 7, 2012, then the person named on the proxy card may vote on any such proposal in their discretion only if the Company includes in its proxy statement an explanation of its intention with respect to voting on the proposal.

GOVERNOR NOMINATIONS

Nominations for the election of Governors may also be made by any member entitled to vote generally in the election of Governors. The nominations for our next annual meeting must be received by our secretary on October 24, 2011. The proposal must be in accordance with the provision of Rule 14a — 11 promulgated by the SEC under the Exchange Act.  The Company suggests that governor nominations for the 2012 Annual Meeting of members be submitted by certified mail-return receipt requested.  If a presiding officer at a meeting of the members determines that a nomination is not made in accordance with this procedure, the officer must declare that the nomination was defective and therefore must be disregarded.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

No family relationships exist between any of the governors of the board, officers, or key employees of the Company.  We consider all of our at-large governors other than Messrs. Berg, Thompson, Wagner and Wilkison to be our founders and promoters. We do not consider our appointed governor to be one of our founders and promoters.  Over the past five years we have engaged in the following transaction with our promoters and their affiliates:

Corn Storage and Grain Handling Agreement.

In October 2003 we entered into, and subsequently renegotiated in 2009, a corn storage and grain handling agreement with Farmers Cooperative Elevator Company, one of our members.  We purchase all of our corn from Farmers Cooperative Elevator Company. The price at which we purchase our corn is the bid price the member establishes for the plant plus a per bushel procurement fee. For the fiscal year ended October 31, 2010, we had purchased approximately $6.4 million worth of corn from Farmers Cooperative Elevator Company for use in our operations.  Farmers Cooperative Elevator Company purchased 605 units in our offering and owns a total of 650 units.

Mr. Enstad, the chairman of our board of governors, is also a member of the board of directors of Farmers Cooperative Elevator Company.  Mr. Enstad will not participate in any of our decisions regarding Farmers Cooperative Elevator Company because this presents a potential or an actual conflict of interest for Mr. Enstad.

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COMPENSATION OF GOVERNORS AND EXECUTIVE OFFICERS

Compensation Discussion and Analysis

Overview

Throughout this proxy statement, the individuals who serve as our Chief Executive Officer and Chief Financial Officer are referred to as the “executive officers”.

The compensation committee has responsibility for establishing, implementing and regularly monitoring adherence to the Company’s compensation philosophy and objectives.  The compensation committee ensures that the total compensation paid to the executive officers is fair, reasonable and competitive.  Generally the types of compensation and benefits provided to the executive officers are similar in form to the compensation and benefits provided to our other employees.

The compensation committee:

(1)           establishes and administers a compensation policy for senior management;

(2)           reviews and approves the compensation policy for all or our employees other than senior management;

(3)           reviews and monitors our financial performance as it affects our compensation policies or the administration of those policies;

(4)           reviews and monitors our succession plans;

(5)           approves awards to employees pursuant to our incentive compensation plans; and

(6)           approves modifications in the employee benefit plans with respect to the benefits salaried employees receive under such plans.

In determining the Chief Executive Officer’s compensation, the committee considers evaluations prepared by the directors.  From time to time, the compensation committee may delegate to the Chief Executive Officer the authority to implement certain decisions of the committee, to set compensation for other managers or to fulfill administrative duties.

The compensation committee has responsibility for establishing, implementing and regularly monitoring adherence to the Company’s compensation philosophy and objectives.  The compensation committee ensures that the total compensation paid to the named Chief Executive Officer is fair, reasonable and competitive.

The compensation committee receives input from the Chief Executive Officer on his personal performance achievements and that of the employees who report to them.  This individual performance assessment determines a portion of the annual compensation for the Chief Executive Officer.

The compensation committee does its own performance review of the Chief Executive Officer.  The compensation committee annually evaluates the performance of our Chief Executive Officer in light of the Company’s goals and objectives and determines and approves the executive’s compensation level based on this evaluation.

Compensation Philosophy and Objectives

Our compensation programs are designed to achieve the following objectives:

·                   Attract, retain and motivate highly qualified and talented executives who will contribute to the Company’s success by reason of their ability, ingenuity and industry;

·                   Link compensation realized to the achievement of the Company’s short and long-term financial and strategic goals;

·                   Align management and member interests by encouraging long-term member value creation;

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·                   Maximize the financial efficiency of the compensation program from tax, accounting, cash flow and dilution perspectives; and

·                   Support important corporate governance principles and comply with best practices.

Compensation Committee Procedures

The compensation committee is responsible for determining the nature and amount of compensation for the Company’s executive officers.  The compensation committee receives input from the Chief Executive Officer on the personal performance achievements of the executives and management employees who report to him.  This individual performance assessment determines a portion of the annual compensation for each manager.  In addition, the Chief Executive Officer provides input on salary increases, incentive compensation opportunities, and long-term incentive grants for the executives and management employees who report to him, which the committee considers when making executive compensation decisions.

The compensation committee does its own performance review of the Chief Executive Officer.  The compensation committee annually evaluates the performance of our Chief Executive Officer and determines and approves the Chief Executive Officer’s compensation level based on this evaluation.  In determining the long-term incentive component of the Chief Executive Officer’s compensation, the compensation committee will consider all relevant factors, including the Company’s performance, the value of similar awards to chief executive officers of comparable companies, and the awards given to the Chief Executive Officer of the Company in past years.  The Chief Executive Officer is not present at either compensation committee level deliberations concerning his compensation.

Base Salary

Base salaries for our executive officers are established based on the scope of their roles, responsibilities, experience levels and performance, and taking into account competitive market compensation paid by comparable companies for similar positions.  Base salaries are reviewed approximately annually, and may be adjusted from time to time to realign salaries with market levels after taking into account individual performance and experience.

Bonus

In addition to the base salaries, the Board approved a bonus payable to all our employees.  For our 2010 fiscal year, the amount of the bonus was approximately 6.9% of our employees’ base wages, except the Chief Executive Officer.  For our Chief Executive Officer, the amount of the bonus was approximately 7.7% of his base wages.  For the purpose of our bonus calculation, base wages include all regular, PTO and holiday pay.  We believe that the bonuses paid to our employees are reasonable and well justified.

Accounting and Tax Treatment of Awards

None of our executive officers, governors, or employees receives compensation in excess of $1,000,000 and therefore the entire amount of their compensation is deductible by the Company as a business expense. Certain large executive compensation awards are not tax deductible by companies making such awards. None of our compensation arrangements are likely to reach this cap in the foreseeable future.

Compensation Committee Report

The compensation committee has reviewed and discussed the Compensation Discussion and Analysis with management.  Based upon this review and discussion, the board of governors determined that the Compensation Discussion and Analysis should be included in this proxy statement.

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Summary Compensation Table

Tracey Olson is currently serving as our Chief Executive Officer (“CEO”).  Stacie Schuler is our Chief Financial Officer (“CFO”).

The following table sets forth all compensation paid or payable by the Company to our principal officers and significant employees during the fiscal years ended October 31, 2009 and 2010, respectively.  As of February 21, 2011, none of our officers had any options, warrants, or other similar rights to purchase securities of the Company.

(1)           Includes compensation related to paid time off, vacation and personal use of a company vehicle.

(2)           Includes compensation related to paid time off and vacation.

Governor Compensation

In October 2004, our board of governors approved a governor compensation policy.  The policy provides for payment to governors of a monthly stipend plus a fee based on attendance at board and committee meetings.  We pay our governors as follows:  $1,000 per month to the chairman and secretary/treasurer and $750 per month to all other governors plus an additional $100 for attending meetings, including regular board meetings, of greater than one-half day in length; $50 for attending meetings less than one-half day in length; and $50 for attendance at meetings by conference call.

For Fiscal Year 2010, the Governors have received the following compensation:

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(1)           Includes a monthly stipend plus a fee based on attendance at board and committee meetings.  We pay our governors as follows:  $1,000 per month to the chairman and secretary/treasurer and $750 per month to all other governors plus an additional $100 for attending meetings, including regular board meetings, of greater than one-half day in length; $50 for attending meetings less than one-half day in length; and $50 for attendance at meetings by conference call.

(2)           Includes reimbursement for mileage and other reasonable expenses incurred in connection with services rendered to the Company and the board of governors.

ANNUAL REPORT AND FINANCIAL STATEMENTS

The Company’s annual report to the Securities and Exchange Commission on Form 10-K, including the financial statements and the notes thereto, for the fiscal year ended October 31, 2009, accompanies the mailing of this proxy statement.

The Company will provide each member solicited a copy of Exhibits to the 10-K upon written request and payment of specified fees. The written request for such Exhibits should be directed to Stacie Schuler, Chief Financial Officer of Granite Falls Energy, LLC at 15045 Highway 23 S.E., Granite Falls, MN 56241-0216. Such request must set forth a good faith representation that the requesting party was a holder of record or a beneficial owner of membership units in the Company on February 21, 2011. The 2010 annual report on Form 10-K complete with exhibits is also available at no cost through the EDGAR database available from the SEC’s internet site (www.sec.gov).  Information about us is also available at our website at www.granitefallsenergy.com , under “SEC Compliance,” which includes links to reports we have filed with the Securities and Exchange Commission.

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PROPOSAL ONE :  ELECTION OF TWO GOVERNORS

You may vote for two (2) nominees by marking the “FOR” boxes.

PROPOSAL TWO : ADVISORY VOTE ON EXECUTIVE COMPENSATION (SAY-ON-PAY)

THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL

PLEASE INDICATE YOUR SELECTION BY FIRMLY PLACING AN “X” IN THE APPROPRIATE NUMBERED BOX WITH BLUE OR BLACK INK

PROPOSAL THREE : ADVISORY VOTE ON FREQUENCY OF SAY-ON-PAY VOTE

THE BOARD RECOMMENDS A VOTE FOR EVERY THREE YEARS

By signing this proxy card, you appoint Paul Enstad as Proxy to represent you at the 2011 Annual Meeting of the Members to be held on Thursday, March 31, 2011, at the Prairie’s Edge Casino Resort, 5616 Prairie’s Edge Lane, Granite Falls, Minnesota. Registration for the meeting will begin at 8:00 a.m.  The 2011 Annual Meeting will commence at 9:00 a.m.  This proxy, when properly executed, will be voted in the manner directed herein and authorizes the Proxy to take action in his discretion upon other matters that may properly come before the Meeting.

Please specify your choice for the election of two governors and the SAY-ON-PAY proposals by marking the appropriate boxes above.  The Proxy cannot vote your units unless you sign and return this card.  For your proxy card to be valid, it must be received by Christianson & Associates, PLLP by 5:00 p.m. on Wednesday, March 30, 2011, or by submitting the proxy card in person when registering at the Annual Meeting.  Registration for the Annual Meeting will begin at 8:00 a.m. on Thursday, March 31, 2011 at the Prairie’s Edge Casino Resort.

This proxy card, when properly executed, will be voted in the manner directed herein and authorizes the Proxy to take action in his discretion upon other matters that may properly come before the Meeting.  If you do not mark any boxes, your units will be voted FOR the incumbents Shannon Johnson and David Thompson, FOR the Proposal Two — Say-on-Pay and EVERY 3 YEARS with respect to Proposal Three — Frequency of the Say-on-Pay vote.  If you choose only one (1) nominee, then the proxies will vote your units only for the nominee you chose.  If you mark contradicting choices on the proxy card, such as both FOR and ABSTAIN for a candidate or FOR and AGAINST a proposal, your votes will not be counted with respect to the governor candidate or the proposal for which you marked contradicting choices.  However, each fully executed proxy card will be counted for purposes of determining whether a quorum is present at the 2011 Annual Meeting.

You may revoke your proxy by: (1) Voting in person at the 2011 Annual Meeting; or (2) Giving written notice of revocation, which is received by Christianson & Associates, PLLP by 5:00 p.m. on Wednesday, March 30, 2011.

Joint owners must both sign.  When signing as attorney executor, administrator, trustee or guardian, please note that fact.