DERIVATIVES AND HEDGING (Tables)

3 Months Ended

Jan. 30, 2022

Derivative [Line Items]

Schedule of fair values of derivative instruments

The fair values of the Company’s derivative instruments designated as hedges are:

		Gross Fair Value
in thousands	Location on Consolidated Condensed Statements of Financial Position	January 30, 2022		October 31, 2021
Derivatives Designated as Hedges:
Commodity Contracts(1)	Other Current Assets	$	27,819	$	21,798
Interest Rate Contracts	Interest and Dividends Payable	(4,949)		—

(1) Amounts represent the gross fair value of commodity 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 commodity derivative in the Consolidated Condensed Statements of Financial Position. The gross asset position as of January 30, 2022 is offset by the obligation to return net cash collateral of $16.8 million contained within the master netting arrangement. The gross asset position as of October 31, 2021 is offset by the obligation to return net cash collateral of $10.8 million. See Note I - Fair Value Measurements for a discussion of these net amounts as reported in the Consolidated Condensed Statements of Financial Position.

Schedule of fair value hedge assets (liabilities)

The carrying amount of the Company's fair value hedged assets (liabilities) are:

		Carrying Amount of Hedged Assets/(Liabilities)
in thousands	Location on Consolidated Condensed Statements of Financial Position	January 30, 2022		October 31, 2021
Fair Value Hedges:
Commodity Contracts	Accounts Payable(1)	$	8,262	$	3,432
Interest Rate Contracts	Long-term Debt - Less Current Maturities(2)	(445,051)		—

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

(2) Represents the carrying amount of the hedged portion of the "2024 Notes". As of January 30, 2022, a cumulative basis adjustment of $4.9 million has been included in the carrying amount.

Schedule of gains or losses related to derivative instruments

The effect of AOCL for gains or losses (before tax) related to the Company's derivative instruments are:

	Gain/(Loss) Recognized  in AOCL (1)				Gain/(Loss) Reclassified from AOCL into Earnings (1)				Location on Consolidated Statements of Operations
	Quarter Ended				Quarter Ended
in thousands	January 30, 2022		January 24, 2021		January 30, 2022		January 24, 2021
Cash Flow Hedges:
Commodity Contracts	$	20,279	$	16,552	$	7,746	$	(50)	Cost of Products Sold
Excluded Component (2)	(1,172)		—		—		—
Interest Rate Contracts	—		—		247		—		Interest Expense

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

(2) Represents the time value of corn options excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in AOCL.

Consolidated Statements of Operations Impact: The effect on the Consolidated Statements of Operations for gains or losses (before tax) related to the Company's derivative instruments are:

	Consolidated Statements of Operations Impact
	Quarter Ended
in thousands	January 30, 2022		January 24, 2021
Net Earnings Attributable to Hormel Foods Corporation	$	239,571	$	222,283
Cash Flow Hedges - Commodity Contracts
Gain (Loss) Reclassified from AOCL	7,746		(50)
Amortization of Excluded Component from Options	(825)		—
Fair Value Hedges - Commodity Contracts
Gain (Loss) on Commodity Futures (1)	(3,650)		(2,913)
Total Gain (Loss) on Commodity Contracts (2)	$	3,271	$	(2,963)
Cash Flow Hedges - Interest Rate Locks
Amortization of Gain on Interest Rate Locks	247		—
Fair Value Hedge - Interest Rate Swap
Gain (Loss) on Interest Rate Swap	792		—
Total Gain on Interest Rate Contracts (3)	$	1,039	$	—
Total Gain (Loss) Recognized in Earnings	$	4,310	$	(2,963)

(1)     Amounts represent gains or losses on commodity contracts designated as fair value hedges that were closed during the thirteen weeks ended January 30, 2022, 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.

(2)    Total Gain (Loss) on Commodity Contracts is recognized in earnings through Cost of Products Sold.

(3)    Total Gain (Loss) on Interest Rate Contracts is recognized in earnings through Interest Expense.

Cash Flow Hedges

Derivative [Line Items]

Schedule of outstanding commodity futures contracts

The Company's outstanding contracts related to its commodity hedging programs include:

	Volume
Commodity Contracts	January 30, 2022	October 31, 2021
Corn	34.0 million bushels	33.1 million bushels
Lean Hogs	132.6 million pounds	120.0 million pounds