Commitments and Contingencies

12 Months Ended

Oct. 27, 2019

Commitments and Contingencies Disclosure [Abstract]

In order to ensure a steady supply of hogs and turkeys, and to keep the cost of products stable, the Company has entered into contracts with producers for the purchase of hogs and turkeys at formula-based prices over periods up to 10 years. The Company has also entered into grow-out contracts with independent farmers to raise turkeys for the Company for periods up to 25 years. Under these arrangements, the Company owns the livestock, feed, and other supplies while the independent farmers provide facilities and labor. The Company has also contracted for the purchase of corn, soybean meal, feed ingredients, and other raw materials from independent suppliers for periods up to five years. Under these contracts, the Company is committed to make purchases, assuming current price levels, as follows:



(in thousands)	October 27, 2019
2020	$	851,469
2021	645,323
2022	494,924
2023	441,092
2024	365,740
Later Years	414,889
Total	$	3,213,437

Purchases under these contracts for fiscal years 2019, 2018, and 2017 were $1.0 billion, $1.3 billion, and $1.4 billion, respectively.

The Company has noncancelable operating and capital lease commitments on facilities and equipment at October 27, 2019, as follows:



(in thousands)	Operating		Capital
2020	$	15,603	$	1,834
2021	10,470		1,787
2022	7,951		1,709
2023	6,953		1,709
2024	4,840		1,709
Later Years	21,773		13,815
Total Future Payments	$	67,590	$	22,563
Less: Interest			2,850
Present Value of Future Minimum Capital Lease Payments			$	19,713

The Company expensed $23.1 million, $22.9 million, and $19.2 million for rent in fiscal years 2019, 2018, and 2017, respectively.

As of October 27, 2019, the Company has $44.8 million of standby letters of credit issued on its behalf. The standby letters of credit are primarily related to the Company’s self-insured workers compensation programs. However, that amount includes revocable standby letters of credit totaling $2.7 million for obligations of an affiliated party that may arise under workers compensation claims. Letters of credit are not reflected in the Company’s Consolidated Statements of Financial Position.

The Company is involved in litigation on an ongoing basis arising in the ordinary course of business. In the opinion of management, the outcome of litigation currently pending will not materially affect the Company’s results of operations, financial condition, or liquidity.