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Derivative Financial Instruments
 3 Months Ended
Jul. 31, 2025
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 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		 
   July 31,
2025		   January 31,
2025		   July 31,
2025		   January 31,
2025		 
                 
Forward purchase contracts (1)  $9   $1,253   $1,885   $378 
                     
Cash collateral balance (2)  $506   $2,523   $
-
   $
-
 
Commodity futures (3)   489    (1,291)   
-
    
-
 
Net position with broker  $995   $1,232   $
-
   $
-
 
                     
Total  $1,004   $2,485   $1,885   $378 

 

  (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 800,000 bushels and 16.8 million bushels of corn at July 31, 2025 and January 31, 2025, 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 14.2 million bushels and 7.6 million bushels of corn at July 31, 2025 and January 31, 2025, respectively.
     
  (2) As of July 31, 2025 and January 31, 2025, 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 July 31, 2025 and January 31, 2025, the Company recorded this collateral balance within “Prepaid
    expenses and other” on the accompanying Consolidated Balance Sheets.
     
  (3) Commodity futures assets and liabilities 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 6.2 million and 500,000 bushels of corn, respectively at July 31, 2025. These contracts included short/sell positions and long/buy positions for approximately 6.3 million and 575,000 bushels of corn, respectively, at January 31, 2025. These contracts also included short/sell positions for approximately 3.8 million gallons and 4.2 million gallons of ethanol at July 31, 2025 and January 31, 2025, respectively.
     
    See Note 5 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 three and six months ended July 31, 2025 and 2024 (amounts in thousands):

 

   Three Months Ended
July 31,		   Six Months Ended
July 31,		 
   2025   2024   2025   2024 
                 
Net sales  $201   $429   $218   $436 
                     
Cost of sales  $317   $(6,180)  $2,285   $(6,116)