Inventories



(In thousands)	March 31, 2014		June 30, 2013
Coffee
Processed	$	14,344	$	12,553
Unprocessed	19,051		12,796
Total	$	33,395	$	25,349
Tea and culinary products
Processed	$	23,162	$	21,406
Unprocessed	4,876		4,194
Total	$	28,038	$	25,600
Coffee brewing equipment parts	$	5,585	$	9,918
Total inventories	$	67,018	$	60,867

Inventories are valued at the lower of cost or market. The Company accounts for coffee, tea and culinary products on the last in, first out ("LIFO") basis and coffee brewing equipment parts on the first in, first out ("FIFO") basis. The Company regularly evaluates these inventories to determine whether market conditions are correctly reflected in the recorded carrying value. At the end of each quarter, the Company records the expected beneficial effect of the liquidation of LIFO inventory quantities, if any, and records the actual impact at fiscal year-end. An actual valuation of inventory under the LIFO method is made only at the end of each fiscal year based on the inventory levels and costs at that time. If inventory quantities decline at the end of the fiscal year compared to the beginning of the fiscal year, the reduction results in the liquidation of LIFO inventory quantities carried at the cost prevailing in prior years. This LIFO inventory liquidation may result in a decrease or increase in cost of goods sold depending on whether the cost prevailing in prior years was lower or higher, respectively, than the current year cost. Accordingly, interim LIFO calculations must necessarily be based on management's estimates of expected fiscal year-end inventory levels and costs. Because these estimates are subject to many forces beyond management's control, interim results are subject to the final fiscal year-end LIFO inventory valuation. The Company did not record any beneficial effect of LIFO inventory liquidation in cost of goods sold in the three and nine months ended March 31, 2014 because it anticipates that its inventory levels at June 30, 2014 will be greater than at June 30, 2013. The Company recorded $0.2 million and $0.7 million, respectively, in expected beneficial effect of LIFO inventory liquidation in cost of goods sold in the three and nine months ended March 31, 2013, which reduced net loss for the three and nine months ended March 31, 2013 by $0.2 million and $0.7 million, respectively.