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DERIVATIVES AND HEDGING (Tables) | 9 Months Ended
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Jul. 25, 2021
Derivative [Line Items] |
Schedule of fair values of derivative instruments | The fair values of the Company’s derivative instruments are:
|  |  |  | Gross Fair Value
(in thousands) |  | Location on Consolidated Statements of Financial Position |  | July 25, 2021 |  | October 25, 2020
Derivatives Designated as Hedges: |  |  |  |  |  |
Commodity Contracts(1) |  | Other Current Assets |  | $ | 24,824 |  |  | $ | (1,330) |
(1) Amounts represent the gross fair value of commodity derivative assets and liabilities. The Company nets the commodity 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 commodity derivative contract. The amount or timing of cash collateral balances may impact the classification of the commodity derivative in the Consolidated Statements of Financial Position. The gross asset position as of July 25, 2021 is offset by the obligation to return net cash collateral of $17.1 million contained within the master netting arrangement. The gross liability position as of October 25, 2020 is offset by the right to reclaim net cash collateral of $12.3 million. See Note I - Fair Value Measurements for a discussion of these net amounts as reported in the Consolidated Statements of Financial Position.
Schedule of fair value hedge assets (liabilities) | The carrying amounts of the Company's fair value hedge assets (liabilities) are:
Location on Consolidated Statements of Financial Position |  | Carrying Amount of the Hedged Assets/(Liabilities)
(in thousands) |  | July 25, 2021 |  | October 25, 2020
Accounts Payable(1) |  | $ | 5,400 |  |  | $ | 4,269 |
(1) Amounts represent the carrying amount of fair value hedged assets and liabilities which are offset by other assets included in master netting arrangements described above.
Schedule of gains or losses related to derivative instruments | The effect of Accumulated Other Comprehensive Loss for gains or losses (before tax) related to the Company's derivative instruments is as follows:
|  | Gain/(Loss) Recognized in AOCL (1) |  | Location on Consolidated Statements of Operations |  | Gain/(Loss) Reclassified from AOCL into Earnings (1)
|  | Thirteen Weeks Ended |  |  | Thirteen Weeks Ended
(in thousands) |  | July 25, 2021 |  | July 26, 2020 |  |  | July 25, 2021 |  | July 26, 2020
Cash Flow Hedges: |  |  |  |  |  |  |  |  |  |
Commodity Contracts |  | $ | 5,467 |  |  | $ | (943) |  |  | Cost of Products Sold |  | $ | 14,261 |  |  | $ | (18,645) |
Excluded Component (2) |  | 1,261 |  |  | — |  |  |  |  | — |  |  | — |
Interest Rate Contracts |  | (3,675) |  |  | — |  |  | Interest Expense |  | 152 |  |  | — |
|  | Gain/(Loss) Recognized in AOCL (1) |  | Location on Consolidated Statements of Operations |  | Gain/(Loss) Reclassified from AOCL into Earnings (1)
|  | Thirty-Nine Weeks Ended |  |  | Thirty-Nine Weeks Ended
(in thousands) |  | July 25, 2021 |  | July 26, 2020 |  |  | July 25, 2021 |  | July 26, 2020
Cash Flow Hedges: |  |  |  |  |  |  |  |  |  |
Commodity Contracts |  | $ | 58,129 |  |  | $ | (57,514) |  |  | Cost of Products Sold |  | $ | 18,723 |  |  | $ | (25,997) |
Excluded Component (2) |  | 1,261 |  |  | — |  |  |  |  | — |  |  | — |
Interest Rate Contracts |  | 14,864 |  |  | — |  |  | Interest Expense |  | 152 |  |  | — |
(1) See Note H - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings. (2) Represents the time value amount of corn options excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in AOCL. Consolidated Statements of Operations Impact: The effect on the Consolidated Statements of Operations for gains or losses (before tax) related to the Company's derivative instruments is as follows:
|  | Consolidated Statements of Operations Impact
|  | Thirteen Weeks Ended |  | Thirty-Nine Weeks Ended
(in thousands) |  | July 25, 2021 |  | July 26, 2020 |  | July 25, 2021 |  | July 26, 2020
Net Earnings Attributable to Hormel Foods Corporation |  | $ | 176,917 |  |  | $ | 203,119 |  |  | $ | 627,101 |  |  | $ | 673,726 |
Cash Flow Hedges - Commodity Contracts |  |  |  |  |  |  |  |
Gain (Loss) Reclassified from AOCL |  | 14,261 |  |  | (18,645) |  |  | 18,723 |  |  | (25,997) |
Amortization of Excluded Component from Options |  | (1,543) |  |  | — |  |  | (1,543) |  |  | — |
Fair Value Hedges - Commodity Contracts |  |  |  |  |  |  |  |
Gain (Loss) on Commodity Futures (1) |  | (11,739) |  |  | 4,341 |  |  | (26,010) |  |  | 13,487 |
Total Gain (Loss) on Commodity Contracts (2) |  | $ | 979 |  |  | $ | (14,304) |  |  | $ | (8,830) |  |  | $ | (12,510) |
Cash Flow Hedges - Interest Rate Locks |  |  |  |  |  |  |  |
Amortization of Gain on Interest Rate Locks |  | 152 |  |  | — |  |  | 152 |  |  | — |
Total Gain on Interest Rate Locks (3) |  | $ | 152 |  |  | $ | — |  |  | $ | 152 |  |  | $ | — |
Total Gain (Loss) Recognized in Earnings |  | $ | 1,131 |  |  | $ | (14,304) |  |  | $ | (8,678) |  |  | $ | (12,510) |
(1) Amounts represent gains or losses on commodity contracts designated as fair value hedges that were closed during the thirteen and thirty-nine weeks ended July 25, 2021, and July 26, 2020, which were offset by a corresponding gain or loss 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. (2) Total Gain (Loss) on Commodity Contracts is recognized in earnings through Cost of Products Sold. (3) Total Gain (Loss) on Interest Rate Locks is recognized in earnings through Interest Expense.
Cash Flow Hedges |
Derivative [Line Items] |
Schedule of outstanding commodity futures contracts | The Company's outstanding commodity futures and options contracts related to its hedging programs include:
|  | Volume
Commodity Contracts |  | July 25, 2021 |  | October 25, 2020
Corn |  | 43.5 million bushels |  | 26.0 million bushels
Lean Hogs |  | 115.9 million pounds |  | 153.7 million pounds

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