Derivatives and Hedging (Tables)

12 Months Ended

Oct. 25, 2020

Derivatives and hedging

Schedule of fair values of derivative instruments

The fair values of the Company’s derivative instruments as of October 25, 2020, and October 27, 2019, are: 

(in thousands)		Fair Value(1)
Derivatives Designated as Hedges	Location on Consolidated Statements of Financial Position	October 25, 2020		October 27, 2019
Commodity Contracts	Other Current Assets	$	(1,330)	$	6,405

 (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. The gross liability position as of October 25, 2020 is offset by cash collateral of $25.5 million contained within the master netting arrangement. The gross asset position as of October 27, 2019, is offset by cash owed of $4.0 million. 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 assets (liabilities)

The carrying amount of the Company’s fair value hedge assets (liabilities) as of October 25, 2020, and October 27, 2019, are: 

Location on Consolidated Statements of Financial Position	Carrying Amount(1) of the Hedged Assets/(Liabilities)
(in thousands)	October 25, 2020		October 27, 2019
Accounts Payable	$	4,269	$	(2,805)

 (1)  Amounts represent the carrying amount of fair value hedged assets and liabilities which are offset by other assets included in master netting arrangements described above.

Schedule of gains or losses (before tax) related to derivative instruments

The effect of Accumulated Other Comprehensive Loss for gains or losses (before tax) related to the Company's derivative instruments for the fiscal years ended October 25, 2020, and October 27, 2019, are:

	Gain/(Loss) Recognized in AOCL(1)				Location on Consolidated Statements of Operations	Gain/(Loss) Reclassified from AOCL into Earnings(1)
(in thousands)	Fiscal Year Ended					Fiscal Year Ended
Cash Flow Hedges:	October 25, 2020		October 27, 2019			October 25, 2020		October 27, 2019
Commodity Contracts	$	(38,213)	$	2,813	Cost of Products Sold	$	(37,834)	$	(1,701)

(1) See Note I - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings.

Consolidated Statements 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 fiscal years ended, are:

	Cost of Products Sold
(in thousands)	October 25, 2020		October 27, 2019		October 28, 2018
Consolidated Statements of Operations	$	7,782,498	$	7,612,669	$	7,566,227
Cash Flow Hedges - Commodity Contracts
Gain (Loss) Reclassified from AOCL	$	(37,834)	$	(1,701)	$	(5,480)
Amortization of Excluded Component from Options	—		(2,489)		—
Gain (Loss) Due to Ineffectiveness	—		—		(177)
Fair Value Hedges - Commodity Contracts
Gain (Loss) on Commodity Futures(1)	13,192		5,197		3,572
Gain (Loss) Due to Ineffectiveness	—		—		(171)
Total Gain (Loss) Recognized in Earnings	$	(24,642)	$	1,007	$	(2,256)

(1) Amounts represent gains or losses on commodity contracts designated as fair value hedges that were closed during the year, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment. Additional gains or losses related to changes in the fair value of open commodity contracts, 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 October 25, 2020, and October 27, 2019, the Company had the following outstanding commodity futures and options contracts related to its hedging programs: 

	Volume
Commodity Contracts	October 25, 2020	October 27, 2019
Corn	26.0 million bushels	30.4 million bushels
Lean Hogs	153.7 million pounds	187.3 million pounds