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DERIVATIVES AND HEDGING (Tables) | 9 Months Ended
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Jul. 30, 2017
DERIVATIVES AND HEDGING |
Schedule of fair values of derivative instruments |
|  |  |  | Fair Value (1)
|  | Location on Consolidated |  |  |  |
|  | Statements of Financial Position |  | July 30, 2017 |  | October 30, 2016
Asset Derivatives: |  |  |  |  |  |
Derivatives Designated as Hedges: |  |  |  |  |  |
Commodity contracts |  | Other current assets |  | $ | 1,109 |  | $ | (194)
Derivatives Not Designated as Hedges: |  |  |  |  |  |
Commodity contracts |  | Other current assets |  | 19 |  | 144
Total Asset Derivatives |  |  |  | $ | 1,128 |  | $ | (50)
(1) Amounts represent the gross fair value of derivative assets and liabilities. The Company nets the derivative assets and liabilities for each of its hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract. The amount or timing of cash collateral balances may impact the classification of the derivative in the Consolidated Statements of Financial Position. See Note L “Fair Value Measurements” for a discussion of these net amounts as reported in the Consolidated Statements of Financial Position.
Schedule of gains or losses (before tax) related to derivative instruments |
|  | Gain/(Loss) Recognized in AOCL (Effective Portion) (1) |  | Location on |  | Gain/(Loss) Reclassified from AOCL into Earnings (Effective Portion) (1) |  | Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (4)
|  | Three Months Ended |  | Consolidated |  | Three Months Ended |  | Three Months Ended
Cash Flow Hedges: |  | July 30, 2017 |  | July 24, 2016 |  | Statements of Operations |  | July 30, 2017 |  | July 24, 2016 |  | July 30, 2017 |  | July 24, 2016
Commodity contracts |  | $ | 1,490 |  | $ | 7,702 |  | Cost of products sold |  | $ | 1,758 |  | $ | (346) |  | $ | (22) |  | $ | (14,277)
|  |  |  | Location on |  | Gain/(Loss) Recognized in Earnings (Effective Portion) (3) |  | Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (5)
|  |  |  | Consolidated |  | Three Months Ended |  | Three Months Ended
Fair Value Hedges: |  |  |  |  |  | Statements of Operations |  | July 30, 2017 |  | July 24, 2016 |  | July 30, 2017 |  | July 24, 2016
Commodity contracts |  |  |  |  |  | Cost of products sold |  | $ | (730) |  | $ | (1) |  | $ | 51 |  | $ | 4,658
|  |  |  | Location on |  | Gain/(Loss) Recognized in Earnings |  |
|  |  |  | Consolidated |  | Three Months Ended |  |
Derivatives Not Designated as Hedges: |  |  |  |  |  | Statements of Operations |  | July 30, 2017 |  | July 24, 2016 |  |  |  |
Commodity contracts |  |  |  |  |  | Cost of products sold |  | $ | 9 |  | $ | (244) |  |  |  |
|  | Gain/(Loss) Recognized in AOCL (Effective Portion) (1) |  | Location on |  | Gain/(Loss) Reclassified from AOCL into Earnings (Effective Portion) (1) |  | Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (4)
|  | Nine Months Ended |  | Consolidated |  | Nine Months Ended |  | Nine Months Ended
Cash Flow Hedges: |  | July 30, 2017 |  | July 24, 2016 |  | Statements of Operations |  | July 30, 2017 |  | July 24, 2016 |  | July 30, 2017 |  | July 24, 2016
Commodity contracts |  | $ | 703 |  | $ | 3,234 |  | Cost of products sold |  | $ | 4,980 |  | $ | (1,690) |  | $ | 17 |  | $ | (14,255)
|  |  |  | Location on |  | Gain/(Loss) Recognized in Earnings (Effective Portion) (3) |  | Gain/(Loss) Recognized in Earnings (Ineffective Portion) (2) (5)
|  |  |  | Consolidated |  | Nine Months Ended |  | Nine Months Ended
Fair Value Hedges: |  |  |  |  |  | Statements of Operations |  | July 30, 2017 |  | July 24, 2016 |  | July 30, 2017 |  | July 24, 2016
Commodity contracts |  |  |  |  |  | Cost of products sold |  | $ | (1,321) |  | $ | 1,905 |  | $ | 52 |  | $ | 4,419
|  |  |  | Location on |  | Gain/(Loss) Recognized in Earnings |  |
|  |  |  | Consolidated |  | Nine Months Ended |  |
Derivatives Not Designated as Hedges: |  |  |  |  |  | Statements of Operations |  | July 30, 2017 |  | July 24, 2016 |  |  |  |
Commodity contracts |  |  |  |  |  | Cost of products sold |  | $ | (228) |  | $ | (674) |  |  |  |
| (1) |  | Amounts represent gains or losses in AOCL before tax. See Note I “Accumulated Other Comprehensive Loss” or the Consolidated Statements of Comprehensive Income for the after-tax impact of these gains or losses on net earnings.
| (2) |  | There were no gains or losses excluded from the assessment of hedge effectiveness during the third quarter or first nine months. Due to market volatility, the Company temporarily suspended the use of the special hedge accounting exemption for its JOTS corn futures contracts in the third quarter of fiscal 2016 due to ineffectiveness. During the time of suspension, all gains or losses related to these contracts were recorded in earnings as incurred.
| (3) |  | Amounts represent losses on commodity contracts designated as fair value hedges that were closed during the third quarter or the first nine months, which were offset by a corresponding gain on the underlying hedged purchase commitment. Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis.
| (4) |  | There were no gains or losses resulting from the discontinuance of cash flow hedges during the third quarter or the first nine months.
| (5) |  | There were no gains or losses recognized as a result of a hedged firm commitment no longer qualifying as a fair value hedge during the third quarter or first nine months.
Derivatives not designated as hedges |
DERIVATIVES AND HEDGING |
Schedule of outstanding commodity futures contracts |
|  | Volume
Commodity |  | July 30, 2017 |  | October 30, 2016
Corn |  | 0.3 million bushels |  | 4.0 million bushels
Soybean meal |  | - |  | 11,000 tons
Cash Flow Hedges |
DERIVATIVES AND HEDGING |
Schedule of outstanding commodity futures contracts |
|  | Volume
Commodity |  | July 30, 2017 |  | October 30, 2016
Corn |  | 12.1 million bushels |  | 22.4 million bushels
Lean hogs |  | 0.1 million cwt |  | -
Fair Value Hedges |
DERIVATIVES AND HEDGING |
Schedule of outstanding commodity futures contracts |
|  | Volume
Commodity |  | July 30, 2017 |  | October 30, 2016
Corn |  | 3.9 million bushels |  | 3.6 million bushels
Lean hogs |  | 0.4 million cwt |  | 0.2 million cwt

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