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DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended
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Jan. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities Disclosure [Text Block] |
9. | DERIVATIVE FINANCIAL INSTRUMENTS
The Company is exposed to various market risks, including changes in commodity prices (raw materials and finished goods). To manage risks associated with the volatility of these natural business exposures, the Company enters into commodity agreements (exchange-traded futures contracts and swaps) and forward purchase (corn) and sale (ethanol, distillers grains and non-food grade corn oil) contracts. The Company does not purchase or sell derivative financial instruments for trading or speculative purposes. The Company does not purchase or sell derivative financial instruments for which a lack of marketplace quotations would require the use of fair value estimation techniques. The changes in fair value of these derivative financial instruments are recognized in current period earnings as the Company does not use hedge accounting. The following table provides information about the fair values of the Company’s derivative financial instruments and the line items on the Consolidated Balance Sheets in which the fair values are reflected (in thousands):
|  | Asset Derivatives Fair Value at January 31, |  |  | Liability Derivatives Fair Value at January 31, |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Commodity futures (1) |  | $ | - |  |  | $ | - |  |  | $ | 933 |  |  | $ | 1,794 |
Forward purchase contracts (2) |  | $ | 993 |  |  | $ | 2,144 |  |  | $ | - |  |  | $ | - |
(1) | Commodity futures assets are included in prepaid expenses and other. Commodity futures liabilities are included in accrued expenses and other current liabilities. These contracts are short/sell positions for approximately 7.4 million bushels and 6.9 million bushels of corn at January 31, 2022 and 2021, respectively.
(2) | Forward purchase contracts assets are included in prepaid expenses and other. Forward purchase contracts liabilities are included in accrued expenses and other current liabilities. These contracts are for purchases of approximately 19.2 million bushels and 6.4 million bushels of corn at January 31, 2022 and 2021, respectively.
As of January 31, 2022, and 2021, all of the derivative financial instruments held by the Company were subject to enforceable master netting arrangements with the counterparty. The Company’s accounting policy is to offset positions owed or owing with the same counterparty. As of January 31, 2022, and 2021 the gross positions of the enforceable master netting agreements are not significantly different from the net positions presented in the table above. Depending on the amount of unrealized gains and losses on derivative contracts held by the Company, the counterparty may require collateral to secure the Company’s derivative contract positions. As of January 31, 2022, and 2021, the Company was required to maintain collateral with the counterparty in the amount of approximately $2,222,000 and $1,657,000, respectively, to secure the Company’s derivative liability position, which has been recorded on the balance sheet as restricted cash. See Note 4 which contains fair value information related to derivative financial instruments. The Company recognized gains (losses) (included in cost of sales) on corn and natural gas derivative financial instruments of approximately $(3,427,000), $(5,552,000), and $2,201,000 in fiscal years 2021, 2020 and 2019, respectively. The Company recognized losses (included in net sales and revenue) on ethanol derivative financial instruments of $12,109,000 and $1,167,000 in fiscal years 2021 and 2020, respectively. There were no derivative financial instruments gains or losses included in net sales and revenue in fiscal year 2019.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI https://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008 + Details
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