DERIVATIVES AND HEDGING (Tables)

3 Months Ended

Jan. 24, 2016

Schedule of fair values of derivative instruments

The fair values of the Company’s derivative instruments (in thousands) as of January 24, 2016, and October 25, 2015, were as follows:

		Fair Value (1)
	Location on Consolidated Statements of Financial Position	January 24, 2016	October 25, 2015
Asset Derivatives:
Derivatives Designated as Hedges:
Commodity contracts	Other current assets	$ (2,959)	$ 305

Derivatives Not Designated as Hedges:
Commodity contracts	Other current assets	(86)	248


Total Asset Derivatives		$ (3,045)	$ 553

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

Gains or losses (before tax, in thousands) related to the Company’s derivative instruments for the first quarter ended January 24, 2016, and January 25, 2015, were as follows:

Gain/(Loss)
Recognized in
AOCL
(Effective Portion) (1)

Location on
Consolidated
Statements
of Operations

Gain/(Loss)
Reclassified from
AOCL into Earnings
(Effective Portion) (1)

Gain/(Loss)
Recognized in Earnings
(Ineffective
Portion) (2)(4)

Three Months Ended

Cash Flow Hedges:

January 24,
2016

January 25,
2015

January 24,
2016

January 25,
2015

January 24,
2016

January 25,
2015

Commodity contracts

$ (2,848

)

$ 3,663

Cost of products sold

$ (767

)

$ (4,379)

$ 1

$ -

Location on
Consolidated
Statements
of Operations

Gain/(Loss)
Recognized in Earnings
(Effective Portion) (3)

Gain/(Loss)
Recognized in Earnings
(Ineffective
Portion) (2)(5)

Three Months Ended

Fair Value Hedges:

January 24,
2016

January 25,
2015

January 24,
2016

January 25,
2015

Commodity contracts

Cost of products sold

$ 1,242

$ (168)

$ (252

)

$ (110)

Location on
Consolidated
Statements
of Operations

Gain/(Loss)
Recognized
in Earnings

Three Months Ended

Derivatives Not
Designated as Hedges:

January 24,
2016

January 25,
2015

Commodity contracts

Cost of products sold

$ (480

)

$ 129

(1)

Amounts represent gains or losses in AOCL before tax. See Note I “Accumulated Other Comprehensive Loss” or the Consolidated Statements of Comprehensive Income for the after-tax impact of these gains or losses on net earnings.

(2)

There were no gains or losses excluded from the assessment of hedge effectiveness during the quarter.

(3)

Amounts represent gains on commodity contracts designated as fair value hedges that were closed during the quarter, which were offset by a corresponding 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.

(4)

There were no gains or losses resulting from the discontinuance of cash flow hedges during the quarter.

(5)

There were no gains or losses recognized as a result of a hedged firm commitment no longer qualifying as a fair value hedge during the quarter.

Derivatives not designated as hedges

DERIVATIVES AND HEDGING

Schedule of outstanding commodity futures contracts

	Volume
Commodity	January 24, 2016	October 25, 2015
Corn	3.3 million bushels	2.6 million bushels
Soybean meal	16,400 tons	11,500 tons

Cash Flow Hedges

DERIVATIVES AND HEDGING

Schedule of outstanding commodity futures contracts

	Volume
Commodity	January 24, 2016	October 25, 2015
Corn	20.9 million bushels	20.1 million bushels

Fair Value Hedges

DERIVATIVES AND HEDGING

Schedule of outstanding commodity futures contracts

	Volume
Commodity	January 24, 2016	October 25, 2015
Corn	1.7 million bushels	5.3 million bushels
Lean hogs	0.8 million cwt	0.4 million cwt