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Inventories

12 Months Ended

Aug. 31, 2012

Note 3 — Inventories

Components of inventory are as follows:


	August 31,
	2012		2011
	(Dollars in thousands)
Raw materials	$	19,773	$	14,799
Work in progress		1,542		1,752
Finished goods		22,357		16,182

Total inventories	$	43,672	$	32,733

To reduce the price volatility of corn used in fulfilling some of its starch sales contracts, Penford, from time to time, uses readily marketable exchange-traded futures as well as forward cash corn purchases. The exchange-traded futures are not purchased or sold for trading or speculative purposes and are designated as hedges. See Note 14.

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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