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Derivative Financial Instruments | 3 Months Ended
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Oct. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | Note 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 natural gas) 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 (that are not accounted for under the “normal purchases and normal sales” scope exemption of ASC 815) and the line items on the Consolidated Balance Sheets in which the fair values are reflected (in thousands):
|  | Asset Derivatives Fair Value |  |  | Liability Derivatives Fair Value |
|  | October 31, 2024 |  |  | January 31, 2024 |  |  | October 31, 2024 |  |  | January 31, 2024 |
Forward purchase contracts (1) |  | $ | 597 |  |  | $ | 579 |  |  | $ | 1,061 |  |  | $ | 802 |
Cash collateral balance (3) |  | $ | 1,209 |  |  | $ | 2,152 |  |  | $ | - |  |  | $ | - |
Commodity futures (2) |  |  | (76) |  |  |  | (297) |  |  |  | - |  |  |  | - |
Net position with broker |  | $ | 1,133 |  |  | $ | 1,855 |  |  | $ | - |  |  | $ | - |
Total |  | $ | 1,730 |  |  | $ | 2,434 |  |  | $ | 1,061 |  |  | $ | 802 |
| (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 11.8 million and 9.3 million bushels of corn at October 31, 2024 and January 31, 2024, 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 4.7 million and 8.2 million bushels of corn at October 31, 2024 and January 31, 2024, respectively.
| (2) | Commodity futures assets and liabilities are included in “Prepaid expenses and other” on the accompanying Consolidated Balance Sheets. These contracts included short/sell positions for approximately 7.0 million bushels of corn and 2.1 million gallons of ethanol at October 31, 2024. 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.
| (3) | As of October 31, 2024 and January 31, 2024, 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 October 31, 2024 and January 31, 2024, the Company was required to maintain collateral with the counterparty in the amount of approximately $1.2 million and $2.2 million, respectively, recorded within “Prepaid expenses and other” on the accompanying Consolidated Balance Sheets.
See Note 5 which contains fair value information related to derivative financial instruments. The Company recognized gains, which are included in “Cost of sales” in the accompanying Consolidated Statement of Operations, on derivative financial instruments related to corn purchase contracts of approximately $3.8 million and of $10.6 million for the third quarter of fiscal years 2024 and 2023, respectively. The Company recognized (losses) and gains on derivative financial instruments related to corn purchase contracts of approximately $(2.4) million and $15.7 million for the first nine months of fiscal years 2024 and 2023, respectively. The Company recognized gains, which are recorded in “Net sales and revenue” in the accompanying Consolidated Statement of Operations, on derivative financial instruments related to ethanol sales contracts of approximately $0.3 million and $0.7 million for the three- and nine-month periods ended October 31, 2024, respectively. Gains or losses on derivative financial instruments related to ethanol sales contracts were insignificant for the same periods in 2023.

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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 + Details
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