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DERIVATIVES AND HEDGING (Tables) | 9 Months Ended
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Jul. 30, 2023
Derivative [Line Items] |
Schedule of fair values of derivative instruments | The fair values of the Company’s derivative instruments designated as hedges are:
|  | Gross Fair Value
in thousands | Location on Consolidated Condensed Statements of Financial Position | July 30, 2023 |  | October 30, 2022
Commodity Contracts (1) | Other Current Assets | $ | (6,510) |  |  | $ | 13,504 |
(1) Amounts represent the gross fair value of commodity derivative assets and liabilities. The Company nets the derivative assets and liabilities for each of its commodity 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 commodity derivative on the Consolidated Condensed Statements of Financial Position. The gross liability position as of July 30, 2023, includes the right to reclaim net cash collateral of $27.3 million contained within the master netting arrangement. The gross asset position as of October 30, 2022, is offset by the obligation to return net cash collateral of $1.3 million. See Note H - Fair Value Measurements for a discussion of these net amounts as reported on the Consolidated Condensed Statements of Financial Position.
Schedule of fair value hedge assets (liabilities) | The carrying amount of the Company's fair value hedged assets (liabilities) are:
|  | Carrying Amount of Hedged Assets (Liabilities)
in thousands | Location on Consolidated Condensed Statements of Financial Position | July 30, 2023 |  | October 30, 2022
Commodity Contracts | Accounts Payable (1) | $ | 2,664 |  |  | $ | 5,725 |
Interest Rate Contracts | Current Maturities of Long-term Debt (2) | (439,424) |  |  | — |
Interest Rate Contracts | Long-term Debt Less Current Maturities | — |  |  | (430,050) |
(1) Represents the carrying amount of fair value hedged assets and liabilities which are offset by other assets included in master netting arrangements described above. (2) Represents the carrying amount of the hedged portion of the 2024 Notes. As of July 30, 2023, the carrying amount of the 2024 Notes included a cumulative fair value hedging adjustment of $10.6 million from discontinued hedges. In the third quarter of fiscal 2023, the 2024 Notes and the fair value hedging adjustment were reclassified from Long-term Debt less Current Maturities to Current Maturities of Long-term Debt on the Consolidated Condensed Statements of Financial Position.
Schedule of gains or losses related to derivative instruments | The effect on AOCL for gains or losses (before tax) related to the Company's derivative instruments are:
| Gain/(Loss) Recognized in AOCL (1) |  | Gain/(Loss) Reclassified from AOCL into Earnings (1) | Location on Consolidated Statements of Operations
| Quarter Ended |  | Quarter Ended
in thousands | July 30, 2023 |  | July 31, 2022 |  | July 30, 2023 |  | July 31, 2022
Cash Flow Hedges |  |  |  |  |  |  |  |
Commodity Contracts | $ | (2,600) |  |  | $ | (24,312) |  |  | $ | (5,758) |  |  | $ | 21,216 |  | Cost of Products Sold
Excluded Component (2) | 423 |  |  | (576) |  |  | — |  |  | — |  |
Interest Rate Contracts | — |  |  | — |  |  | 247 |  |  | 247 |  | Interest Expense
| Gain/(Loss) Recognized in AOCL (1) |  | Gain/(Loss) Reclassified from AOCL into Earnings (1) | Location on Consolidated Statements of Operations
| Nine Months Ended |  | Nine Months Ended
in thousands | July 30, 2023 |  | July 31, 2022 |  | July 30, 2023 |  | July 31, 2022
Cash Flow Hedges |  |  |  |  |  |  |  |
Commodity Contracts | $ | (34,151) |  |  | $ | 46,299 |  |  | $ | 5,833 |  |  | $ | 40,231 |  | Cost of Products Sold
Excluded Component (2) | (268) |  |  | (4,020) |  |  | — |  |  | — |  |
Interest Rate Contracts | — |  |  | — |  |  | 741 |  |  | 741 |  | Interest Expense
(1) See Note G - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings. (2) Represents the time value 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 are:
| Consolidated Statements of Operations Impact
| Quarter Ended |  | Nine Months Ended
in thousands | July 30, 2023 |  | July 31, 2022 |  | July 30, 2023 |  | July 31, 2022
Net Earnings Attributable to Hormel Foods Corporation | $ | 162,679 |  |  | $ | 218,915 |  |  | $ | 597,637 |  |  | $ | 720,103 |
Cash Flow Hedges - Commodity Contracts |  |  |  |  |  |  |
Gain (Loss) Reclassified from AOCL | (5,758) |  |  | 21,216 |  |  | 5,833 |  |  | 38,561 |
Amortization of Excluded Component from Options | (1,531) |  |  | (1,145) |  |  | (4,441) |  |  | (3,089) |
Gain (Loss) Reclassified from AOCL Due to Discontinuance of Cash Flow Hedges (1) | — |  |  | — |  |  | — |  |  | 1,620 |
Fair Value Hedges - Commodity Contracts |  |  |  |  |  |  |
Gain (Loss) on Commodity Futures (2) | 1,019 |  |  | (6,758) |  |  | (440) |  |  | (20,165) |
Total Gain (Loss) on Commodity Contracts (3) | (6,271) |  |  | 13,313 |  |  | 952 |  |  | 16,927 |
Cash Flow Hedges - Interest Rate Locks |  |  |  |  |  |  |
Gain (Loss) Reclassified from AOCL | 247 |  |  | 247 |  |  | 741 |  |  | 741 |
Fair Value Hedge - Interest Rate Swap |  |  |  |  |  |  |
Gain (Loss) on Interest Rate Swap | — |  |  | (222) |  |  | — |  |  | 1,270 |
Amortization of Loss Due to Discontinuance of Fair Value Hedge (4) | (3,125) |  |  | — |  |  | (9,374) |  |  | — |
Total Gain (Loss) on Interest Rate Contracts (5) | (2,878) |  |  | 25 |  |  | (8,633) |  |  | 2,011 |
Total Gain (Loss) Recognized in Earnings | $ | (9,148) |  |  | $ | 13,338 |  |  | $ | (7,681) |  |  | $ | 18,938 |
(1) During the second quarter of fiscal 2022, the Company discontinued hedge accounting on 0.6 million bushels of corn usage that was deemed no longer probable to occur. A gain of $1.7 million related to the discontinued hedges and an immaterial loss related to the excluded component from options was reclassified directly into earnings. (2) Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the quarter ended July 30, 2023, 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. (3) Total Gain (Loss) on Commodity Contracts is recognized in earnings through Cost of Products Sold. (4) Represents the fair value hedging adjustment amortized through earnings. (5) Total Gain (Loss) on Interest Rate Contracts is recognized in earnings through Interest Expense.
Cash Flow Hedges |
Derivative [Line Items] |
Schedule of outstanding commodity futures contracts | The Company's outstanding contracts related to its commodity hedging programs include:
| Volume
in millions | July 30, 2023 |  | October 30, 2022
Corn | 30.0 bushels |  | 34.3 bushels
Lean Hogs | 151.9 pounds |  | 177.5 pounds
Natural Gas | 2.1 MMBtu |  | — MMBtu

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