14. FAIR VALUE MEASUREMENTS

3 Months Ended

Jan. 31, 2015

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

The Company adopted the authoritative guidance on “Fair Value Measurements.”  The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, not adjusted for transaction costs.  The guidance also establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels giving the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3) as described below:

Level 1 Inputs – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by the Company;

Level 2 Inputs – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly;

Level 3 Inputs – Unobservable inputs for the asset or liability including significant assumptions of the Company and other market participants.

The Company determines fair values for its investment assets as follows:

Investments at fair value consist of commodity securities and deferred compensation plan assets.

The Company maintains a deferred compensation plan.  The fair value of the plan assets are classified within Level 1 as the assets are valued using quoted prices in active markets.  The assets are included with Deposits and other assets in the accompanying balance sheets. Additional information related to the Company’s deferred compensation plan is disclosed in Note 12 to the condensed consolidated financial statements.

The Company’s commodity securities are classified within Level 2 and include coffee futures and options contracts. To determine fair value, the Company utilizes the market approach valuation technique for the coffee futures and options contracts.  The Company uses Level 2 inputs that are based on market data of similar instruments that are in observable markets. All commodities on the balance sheet are recorded at fair value with changes in fair value included in earnings.

The following tables present the Company’s assets that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy.  The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value.

				Fair Value Measurements as of January 31, 2015
	Total			Level 1		Level 2			Level 3
Assets:
Money market		503,158			503,158		–			–
Total Assets	$	503,158		$	503,158		–			–
Liabilities:
Commodities – Options		(700,064	)				(700,064	)
Commodities – Futures		(1,146,669	)		–		(1,146,669	)		–
Total Liabilities	$	(1,846,733	)		–	$	(1,846,733	)		–

			Fair Value Measurements as of October 31, 2014
	Total		Level 1		Level 2		Level 3
Assets:
Money market		515,549		515,549		–		–
Total Assets	$	515,549	$	515,549		–		–

Liabilities:
Commodities – Options		(217,624	)			(217,624	)
Commodities – Futures		(267,300	)	–		(267,300	)	–
Total Liabilities	$	(484,924	)	–	$	(484,924	)	–