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Derivatives and Hedging (Tables) | 12 Months Ended
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Oct. 27, 2024
Derivatives and hedging |
Schedule of gross fair values of derivative instruments | The gross fair values of the Company’s derivative instruments designated as hedges are:
| October 27, 2024 | October 29, 2023
In thousands | Assets | Liabilities | Assets | Liabilities
Gross Fair Value of Commodity Contracts |  | $ | 9,851 |  |  | $ | (12,638) |  |  | $ | 13,747 |  |  | $ | (26,980) |
Counterparty and Collateral Netting Offset(1) |  | (1,785) |  |  | 12,638 |  |  | 5,226 |  |  | 26,980 |
Amounts Recognized on Consolidated Statements of Financial Position(2) |  | $ | 8,066 |  |  | $ | — |  |  | $ | 18,972 |  |  | $ | — |
(1) Per the terms of the Company's master netting arrangements, the gross fair value of the Company's commodity contracts were offset by the right to reclaim net cash collateral of $10.9 million and $32.2 million as of October 27, 2024 and October 29, 2023, respectively. (2) The Company's commodity contracts are located in Prepaid Expenses and Other Current Assets on the Consolidated Statements of Financial Position.
Schedule of fair value hedge assets (liabilities) | The carrying amount of the Company’s fair value hedged assets (liabilities) are:
In thousands | Location on Consolidated Statements of Financial Position |  | October 27, 2024 |  | October 29, 2023
Commodity Contracts | Accounts Payable(1) |  | $ | (2,902) |  |  | $ | (4,914) |
Interest Rate Contracts | Current Maturities of Long-term Debt(2) |  | — |  |  | (442,549) |
(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 October 29, 2023, the carrying amount of the 2024 Notes included a cumulative fair value hedging adjustment of $7.5 million from discontinued hedges. The 2024 Notes were paid on June 3, 2024.
Schedule of gains or losses (before tax) related to derivative instruments | The pre-tax gains or (losses) recognized in AOCL related to the Company’s derivative instruments are:
In thousands |  | Fiscal Year Ended
| October 27, 2024 |  | October 29, 2023
Commodity Contracts |  | $ | (12,898) |  |  | $ | (50,353) |
Excluded Component(1) |  | 2,136 |  |  | 1,127 |
(1) Represents the time value of commodity options excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in AOCL. The pre-tax gains (losses) reclassified from AOCL into earnings related to the Company’s derivative instruments are:
In thousands | Location on Consolidated Statements of Operations |  | Fiscal Year Ended
| October 27, 2024 |  | October 29, 2023
Commodity Contracts | Cost of Products Sold |  | $ | (26,445) |  |  | $ | 1,225 |
Interest Rate Contracts | Interest Expense |  | 988 |  |  | 988 |
See Note H - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings. Consolidated Statements of Operations Impact: The effect on the Consolidated Statements of Operations for pre-tax gains (losses) related to the Company’s derivative instruments are:
| Fiscal Year Ended
In thousands | October 27, 2024 | October 29, 2023 | October 30, 2022
Net Earnings Attributable to Hormel Foods Corporation |  | $ | 805,038 |  |  | $ | 793,572 |  |  | $ | 999,987 |
Cash Flow Hedges - Commodity Contracts |  |  |  |  |  |
Gain (Loss) Reclassified from AOCL |  | (26,445) |  |  | 1,225 |  |  | 55,350 |
Amortization of Excluded Component from Options |  | (2,774) |  |  | (5,835) |  |  | (4,369) |
Gain (Loss) Reclassified from AOCL Due to Discontinuance of Cash Flow Hedges(1) |  | — |  |  | — |  |  | 2,242 |
Fair Value Hedges - Commodity Contracts |  |  |  |  |  |
Gain (Loss) on Commodity Futures(2) |  | 6,263 |  |  | 656 |  |  | (18,122) |
Total Gain (Loss) on Commodity Contracts(3) |  | $ | (22,957) |  |  | $ | (3,955) |  |  | $ | 35,101 |
Cash Flow Hedges - Interest Rate Contracts |  |  |  |  |  |
Gain (Loss) Reclassified from AOCL |  | 988 |  |  | 988 |  |  | 988 |
Fair Value Hedge - Interest Rate Contracts |  |  |  |  |  |
Gain (Loss) on Interest Rate Swap |  | — |  |  | — |  |  | 928 |
Amortization of Loss Due to Discontinuance of Fair Value Hedge(4) |  | (7,451) |  |  | (12,499) |  |  | (1,923) |
Total Gain (Loss) on Interest Rate Contracts(5) |  | $ | (6,463) |  |  | $ | (11,511) |  |  | $ | (7) |
Total Gain (Loss) Recognized in Earnings |  | $ | (29,420) |  |  | $ | (15,466) |  |  | $ | 35,094 |
(1) In fiscal year 2022, the Company discontinued hedge accounting related to corn usage that was deemed no longer probable to occur resulting in the immediate recognition of gains of $2.2 million (1.0 million bushels). (2) Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the year, 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 |
Derivatives and hedging |
Schedule of outstanding commodity futures contracts | The Company’s outstanding contracts related to its commodity hedging programs include:
In millions | October 27, 2024 | October 29, 2023
Corn | 29.2 |  | bushels | 30.7 |  | bushels
Lean Hogs | 175.6 |  | pounds | 144.2 |  | pounds
Natural Gas | 4.2 |  | MMBtu | 3.0 |  | MMBtu
Diesel Fuel | 4.0 |  | gallons | — |  | gallons

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