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DERIVATIVES AND HEDGING (Tables)
 3 Months Ended
Jan. 27, 2019
DERIVATIVES AND HEDGING  
Schedule of fair values of derivative instruments The fair values of the Company’s derivative instruments (in thousands) as of January 27, 2019,
and October 28, 2018, were as follows:
 
 
 
 
Fair Value (1)
Derivatives Designated as Hedges:
 
Location on Consolidated Statements of Financial Position
 
January 27,
2019
 
October 28,
2018
Commodity contracts
 
Other current assets
 
$
1,730

 
$
(30
)

(1)  Amounts represent the gross fair value of derivative assets and liabilities.  The Company nets the derivative assets and liabilities for each of its hedging programs, including cash collateral, when a master netting arrangement exists between the Company and the counterparty to the derivative contract.  The amount or timing of cash collateral balances may impact the classification of the derivative in the Consolidated Statements of Financial Position.  See Note L - Fair Value Measurements for a discussion of these net amounts as reported in the Consolidated Statements of Financial Position.
Schedule of fair value hedge liabilities The carrying amount of the Company's fair value hedge liabilities (in thousands) as of January 27, 2019, and October 28, 2018, were as follows:
Location on Consolidated Statements of
Financial Position
 
Carrying Amount of the Hedged
Assets/(Liabilities)
 
 
January 27, 2019
 
October 28, 2018
Accounts Payable
 
(1,362
)
 
(594
)
Schedule of gains or losses (before tax) related to derivative instruments The effect of AOCL for gains or losses (before tax, in thousands) related to the Company's derivative instruments for the three months ended January 27, 2019, and January 28, 2018, were as follows:
 
 
Gain/(Loss)
Recognized
 in AOCL (1)
 
Location on
Consolidated
Statements
of Operations
 
Gain/(Loss)
Reclassified from
AOCL into Earnings (1)
 
Gain/(Loss)
Recognized in
Earnings
 (Ineffective Portion)
 
 
Three Months Ended
 
 
Three Months Ended
 
Three Months Ended
Cash Flow Hedges:
 
January 27, 2019
 
January 28, 2018
 
 
January 27, 2019
 
January 28, 2018
 
January 27, 2019
 
January 28, 2018
Commodity Contracts (2)
 
$
(843
)
 
$
(387
)
 
Cost of products sold
 
$
(1,243
)
 
$
608

 
$
—

 
$
(90
)
Excluded Component (3)
 
$
(687
)
 
 
 
 
 
 
 
 
 
 
 
 

(1) See Note I - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on net earnings.
(2) Loss recognized in AOCL for three month ended January 27, 2019, includes an immaterial adjustment due to early adoption of ASU 2017-12.
(3) Represents the time value amount of lean hog options excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in AOCL.

Consolidated Statement of Operations Impact: The effect on the Consolidated Statements of Operations for gains or losses (before tax, in thousands) related to the Company's derivative instruments for the three months ended January 27, 2019, and January 28, 2018, were as follows:

 
 
Cost of Products Sold
 
 
Three Months Ended
 
 
January 27, 2019
 
January 28, 2018
Consolidated Statements of Operations
 
$
1,872,021

 
$
1,832,997

 
 
 
 
 
 
 
 
 
 
Cash Flow Hedges - Commodity Contracts
 
 
 
 
   Gain (loss) reclassified from AOCL
 
$
(1,243
)
 
$
608

   Amortization of excluded component from options
 
(1,358
)
 
—

   Gain (loss) due to ineffectiveness
 
—

 
(90
)
 
 
 
 
 
Fair Value Hedges - Commodity Contracts
 
 
 
 
   Gain (loss) on commodity futures (1)
 
932

 
557

   Gain (loss) due to ineffectiveness
 
—

 
(249
)
 
 
 
 
 
Total gain (loss) recognized in earnings
 
$
(1,669
)
 
$
826


(1) Amounts represent losses on commodity contracts designated as fair value hedges that were closed during the quarter, which were offset by a corresponding gain on the underlying hedged purchase commitment. Additional gains or losses related to changes in the fair value of open commodity contract, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis.
Cash Flow Hedges  
DERIVATIVES AND HEDGING  
Schedule of outstanding commodity futures contracts As of January 27, 2019, and October 28, 2018, the Company had the following outstanding commodity futures and options contracts related to its hedging programs:
 
 
Volume
Commodity Contracts
 
January 27, 2019
 
October 28, 2018
Corn
 
20.8 million bushels
 
23.0 million bushels
Lean hogs
 
4.0 million cwt
 
0.6 million cwt