Inventories

3 Months Ended

Mar. 31, 2021

3. INVENTORIES

Inventories consisted of the following (in millions):


	March 31, 2021		December 31, 2020
Refinery feedstocks	$	1,947	$	1,979
Refined petroleum products and blendstocks	3,284		3,425
Renewable diesel feedstocks and products	64		50
Ethanol feedstocks and products	297		297
Materials and supplies	289		287


Inventories	$	5,881	$	6,038

We compare the market value of inventories to their cost on an aggregate basis, excluding materials and supplies. In determining the market value of our inventories, we assume that feedstocks are converted into refined products, which requires us to make estimates regarding the refined products expected to be produced from those feedstocks and the conversion costs required to convert those feedstocks into refined products. We also estimate the usual and customary transportation costs required to move the inventory from our plants to the appropriate points of sale. We then apply an estimated selling price to our inventories. If the aggregate market value is less than the aggregate cost, we recognize a loss for the difference in our statements of income. To the extent the aggregate market value of our last-in, first-out (LIFO) inventories subsequently increases, we recognize an increase to the value of our inventories (not to exceed cost) and a gain in our statements of income.

The market value of our LIFO inventories fell below their LIFO inventory carrying amounts as of March 31, 2020, and as a result, we recorded an LCM inventory valuation reserve of $2.5 billion in order to state our inventories at market. As of March 31, 2021 and December 31, 2020, the replacement cost (market value) of LIFO inventories exceeded their LIFO carrying amounts by $2.7 billion and $1.3 billion, respectively.

Our non-LIFO inventories accounted for $1.2 billion and $918 million of our total inventories as of March 31, 2021 and December 31, 2020, respectively.