DERIVATIVES AND HEDGING (Tables)

9 Months Ended

Jul. 30, 2017

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

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

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)

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

(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

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)

(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

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

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