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Derivative Financial Instruments and Fair Value Measurements | 6 Months Ended
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Jun. 30, 2018
Derivative Instruments And Hedging Activities Disclosure [Abstract] |
Derivatives and Fair Value [Text Block] | 4. Derivative Financial Instruments and Fair Value Measurements The following table presents for each of the fair value hierarchies, the assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2018 and December 30, 2017:
|  |  |  | June 30, 2018
|  |  |  | Fair value |  |  |
|  |  |  | asset (liability) | Level 1 | Level 2 | Level 3
|  |  |  | $ | $ | $ | $
Commodity futures and forward contracts(1) |  |  |  |
| Current asset | 2,586 | 62 | 2,524 | -
| Long-term asset | 26 | - | 26 | -
| Current liability | (771) | - | (771) | -
| Long-term liability | (104) | - | (104) | -
Inventories carried at market(2) | 3,542 | - | 3,542 | -
Forward foreign currency contracts(3) |  |  |  |
| Not designated as hedging instruments | 384 | - | 384 | -
| Designated as hedging instruments | (36) | - | (36) | -
Contingent consideration(4) | (4,548) | - | - | (4,548)
Embedded derivative | 2,532 | - | - | 2,532
|  |  |  | December 30, 2017
|  |  |  | Fair value |  |  |
|  |  |  | asset (liability) | Level 1 | Level 2 | Level 3
|  |  |  | $ | $ | $ | $
Commodity futures and forward contracts(1) |  |  |  |
| Current asset | 738 | - | 738 | -
| Current liability | (240) | (35) | (205) | -
| Long-term liability | (4) | - | (4) | -
Inventories carried at market(2) | 3,838 | - | 3,838 | -
Forward foreign currency contracts(3) |  |  |  |
| Not designated as hedging instruments | (1,060) | - | (1,060) | -
| Designated as hedging instruments | (435) | - | (435) | -
Contingent consideration(4) | (11,320) | - | - | (11,320)
Embedded derivative | 2,690 | - | - | 2,690
(1) Commodity futures and forward contracts Represents exchange-traded commodity futures and forward commodity purchase and sale contracts. Exchange-traded futures are fair valued based on unadjusted quotes for identical assets priced in active markets and are classified as level 1. Fair value for forward commodity purchase and sale contracts is estimated based on exchange-quoted prices adjusted for differences in local markets. Local market adjustments use observable inputs or market transact ions for similar assets or liabilities, and, as a result, are classified as level 2. Based on historical experience with the Company’s suppliers and customers, the Company’s own credit risk, and the Company’s knowledge of current market conditions, the Co mpany does not view non-performance risk to be a significant input to fair value for the majority of its forward commodity purchase and sale contracts. These exchange-traded commodity futures and forward commodity purchase and sale contracts are used as part of the Company’s risk management strategy, and represent economic hedges to limit risk related to fluctuations in the price of certain commodity grains, as well as the prices of cocoa and coffee. These contracts are not designated as hedges for acco unting purposes. Gains and losses on changes in fair value of these contracts are included in cost of goods sold on the consolidated statement of operations. For the quarter ended June 30, 2018, the Company recognized a gain of $2.8 million (July 1, 2017 – gain of $0.4 million), and for the two quarters ended June 30, 2018, the Company recognized a gain of $1.2 million (July 1, 2017 – gain of $0.4 million), related to chan ges in the fair value of these contracts. Unrealized gains on short-term contracts are included in other current assets; and unrealized losses on short-term and long-term contracts are included in other current liabilities and long-term liabilities, respectively, on the consolidated balance sheets. As at June 30, 2018, the notional amounts of open commodity futures and forward purchase and sale contracts were as follows (in thousands of bushels):
|  |  |  | Number of bushels purchased (sold)
|  |  |  | Corn | Soybeans
Forward commodity purchase contracts | 928 | 290
Forward commodity sale contracts | (669) | (987)
Commodity futures contracts | (700) | 480
In addition, as at June 30, 2018, the Company had net open futures contracts to sell 9,030 metric tons (“MT”) of cocoa (December 30, 2017 – 2,990 MT sold) and to purchase 136 MT of coffee (December 30, 2017 – 51 MT sold). (2) Inventories carried at market The fair value of g rain inventor ies carried at market is determined using quoted market prices from the Chicago Board of Trade (“CBoT”), as adjusted for differences in local markets, and broker or dealer quotes. As at June 30, 2018, the Company had 453,896 bushels of commodity corn and 194,529 bushels of commodity soybeans included in inventories carried at market. The fair value of these inventories is included in level 2 of the fair value hierarchy, as there are observable quoted prices for similar as sets in active markets. Gains and losses on these inventories are included in cost of goods sold on the consolidated statements of operations. Inventories carried at market are included in inventories on the consolidated balance sheets. (3) Foreign forward currency contracts As part of its risk management strategy, the Company enters into forward foreign exchange contracts to reduce its exposure to fluctuations in foreign currency exchange rates. For any open forward foreign exchange contracts at period end, the contract rate is compared to the forward rate, and a gain or loss is recorded. These contracts are included in level 2 of the fair value hierarchy, as the inputs used in making the fair va lue determination are derived from and are corroborated by observable market data. Certain of these forward foreign exchange contracts may be designated as cash flow hedges for accounting purposes, while other of these contracts represent economic hedges that are not designated as hedging instru ments. (i) Not designated as hedging instruments As at June 30, 2018, the Company had open forward foreign exchange contracts to sell euros to buy U.S. dollars with a notional value of € 13.6 million ($ 16.5 million), and to sell British pounds to buy euros with a notional value of £ 0.4 million (€ 0.4 million). As these contracts were not designated as hedging instruments, gains and lo sses on changes in the fair value of the se contracts are included in foreign exchange loss or gain on the consolidated statement of operations. For the quarter ended June 30, 2018, the Company recognized a gain of $1.1 million (July 1, 2017 – loss of $2.0 million), and for the two quarters ended June 30, 2018, the Company recognized a gain of $1.4 million (July 1, 2017 – loss of $2.9 million), related to changes in the fair value of these contracts. Unrealized gains and losses on these contracts are included in accounts receivable and accounts payable, respectively, on the consolidated balance sheets. (ii) Designated as hedging instruments As at June 30, 2018, the Company had net open forward foreign exchange contracts to sell U.S. dollars to buy Mexican p esos with a notional value of $ 3.5 million (M$ 69.4 million). These contracts were entered into as part of a hedging program to manage the variability of cash flows associated with a portion of forecasted pur chases of raw fruit inventories denominated in Mexican pesos. As these contracts have been designated as hedging instruments, the effective portion of the gains and losses on changes in the fair value of these contracts is included in other comprehensive earnings and reclassified to cost of goods sold in the same period the hedged transaction affects earnings, which is upon the sale of the inventories. For the quarter ended June 30, 2018, the Company recognized a net unrealized loss in other comprehensive earnings of $0.3 million (July 1, 2017 – gain of $0.2 million), and for the two quarters ended June 30, 2018, the Company recognized a net gain of $0.5 million (July 1, 2017 – gain of $2.0 million) related to changes in the fair value of open contracts. For the quarter and two quarters ended June 30, 2018, the Company reclassified from other comprehensive earnings to cost of goods sold realized gains on closed contracts of $0.3 million and $0.2 million, respectively. For the quarter and two quarters ended July 1, 2017, the Company recla ssified from other comprehensive earnings to cost of goods sold a realized gain on closed contracts of $0.8 million, and reclassified to foreign exchange loss an unrealized gain of $0.9 million related to the ineffective portion of the hedge. The Company exp ects to reclassify the $0.0 million amount of the unrealized losses recorded in accumulated other comprehensive loss as at June 30, 2018, to earnings over the next two months. Unrealized gains and losses on these contracts are included in other current a ssets and other current liabilities, respectively, on the consolidated balance sheets. (4) Contingent consideration The fair value measurement of contingent consideration arising from business acquisitions is determined using unobservable (level 3) inputs. These inputs include: (i) the estimated amount and timing of the projected cash flows on which the contingency is based; and (ii) the risk-adjusted discount rate used to calculate the present value of those cash flows. The table below presents a reconciliation of contingent consideration obligations for the quarter and two quarters ended June 30, 2018 and July 1, 2017. These obligations are included in long-term liabilities (including the current portion thereof) on the consolidated balance sheets.
|  |  |  | Quarter ended | Two quarters ended
|  |  |  | June 30, 2018 | July 1, 2017 | June 30, 2018 | July 1, 2017
|  |  |  | $ | $ | $ | $
Balance, beginning of period | (8,904) | (15,130) | (11,320) | (15,279)
| Fair value adjustments(1) | (43) | (84) | 2,373 | (204)
| Payments(2) | 4,399 | 4,061 | 4,399 | 4,330
Balance, end of period | (4,548) | (11,153) | (4,548) | (11,153)
(1) For the two quarters ended June 30, 2018, included an adjustment of $2.5 million to reduce the contingent consideration that may be payable in 2019 under an earn-out arrangement with the former unitholders of Citrusource, LLC (acquired by the Company in March 2015) based on the projected results for the business in fiscal 2018. In addition, for all periods presented, reflected the accret ion for the time value of money. (S ee note 9.) (2) For the quarter and two quarters ended June 30, 2018, reflected the third insta llment payment of deferred consideration to the former unitholders of Citrusource. For the quarter and two quarters ended July 1, 2017, reflec ted the second installment payment related to Citrusource and payment of the remaining deferred consideration to a former shareho lder of Organic Land Corporation OOD, which was acquired by the Company in December 2012.

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- Definition The entire disclosure for derivatives and fair value of assets and liabilities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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