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DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Jan. 31, 2024

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 distillers 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,
			2024				2023				2024				2023
	Forward purchase contracts (1)		$	579			$	105			$	802			$	355
	Cash collateral balance (3)		$	2,152			$	1,735				-				-
	Commodity futures (2)			(297)				80				-				67
	Net position with broker		$	1,855			$	1,815				-				-
	Total		$	2,434			$	1,920			$	802			$	422

(1) Forward purchase contracts assets are included in “Prepaid expenses and other” on the accompanying Consolidated Balance Sheets. These contracts are for purchases of approximately 9.3 million and 5.2 million bushels of corn at January 31, 2024 and 2023, respectively. Forward purchase contracts liabilities are included in “Accrued expenses and other current liabilities” on the accompanying Consolidated Balance Sheets. These contracts are for purchases of approximately 8.2 million and 12.8 million bushels of corn at January 31, 2024 and 2023, respectively.

(2) Commodity futures assets are included in “Prepaid expenses and other” on the accompanying Consolidated Balance Sheets. These contracts included short/sell positions and long/buy positions for approximately 255,000 and 6.9 million bushels of corn, respectively at January 31, 2024. These contracts also included short/sell positions for approximately 210,000 gallons of ethanol at

January 31, 2024. These contracts included short/sell positions and long/buy positions for approximately 3.2 million and 725,000 bushels, respectively at January 31, 2023.

Commodity futures liabilities are included in “Accrued expense and other current liabilities” on the accompanying Consolidated Balance Sheets. These contracts included short/sell positions for approximately 1.4 million bushels at January 31, 2023.

(3) As of January 31, 2024, and 2023, all of the derivative financial instruments held by the Company were subject to enforceable master netting arrangements. The Company’s accounting policy is to offset position amounts owed or owing with the same counterparty. 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, 2024 and 2023, the Company was required to maintain collateral with the counterparty in the amount of approximately $2,152,000, recorded within “Prepaid expenses and other” on the accompanying Consolidated Balance Sheets and $1,735,000, included with “Restricted cash” on the accompanying Consolidated Balance Sheets, respectively.

See Note 4 which contains fair value information related to derivative financial instruments.

The following table provides information about gains (losses) recognized in income on the Company’s derivative financial instruments and the line items on the accompanying Consolidated Statements of Operations in which the fair values are reflected for the years ended January 31, 2024, 2023 and 2022 (amounts in thousands):

			Year Ended January 31,
			2024				2023				2022
	Net sales		$	(37)			$	(1,024)			$	(12,109)
	Cost of sales		$	15,023			$	(12,714)			$	(3,427)

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- References

No definition available.

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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://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480237/815-40-50-5

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 815
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//815/tableOfContent

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