XML 25 R8.htm IDEA: XBRL DOCUMENT v3.21.1
REVENUE RECOGNITION
 3 Months Ended
Mar. 28, 2021
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION REVENUE RECOGNITION
The vast majority of the Company's revenue is derived from contracts which are based upon a customer ordering our products. While there may be master agreements, the contract is only established when the customer’s order is accepted by the Company. The Company accounts for a contract, which may be verbal or written, when it is approved and committed by both parties, the rights of the parties are identified along with payment terms, the contract has commercial substance and collectability is probable.
The Company evaluates the transaction for distinct performance obligations, which are the sale of its products to customers. Since its products are commodity market-priced, the sales price is representative of the observable, standalone selling price. Each performance obligation is recognized based upon a pattern of recognition that reflects the transfer of control to the customer at a point in time, which is upon destination (customer location or port of destination), which faithfully depicts the transfer of control and recognition of revenue. There are instances of customer pick-up at the Company's facility, in which case control transfers to the customer at that point and the Company recognizes revenue. The Company's performance obligations are typically fulfilled within days to weeks of the acceptance of the order.
The Company makes judgments regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from revenue and cash flows with customers. Determination of a contract requires evaluation and judgment along with the estimation of the total contract value and if any of the contract value is constrained. Due to the nature of our business, there is minimal variable consideration, as the contract is established at the acceptance of the order from the customer. When applicable, variable consideration is estimated at contract inception and updated on a regular basis until the contract is completed. Allocating the transaction price to a specific performance obligation based upon the relative standalone selling prices includes estimating the standalone selling prices including discounts and variable consideration.
Disaggregated Revenue
Revenue has been disaggregated into the categories below to show how economic factors affect the nature, amount, timing and uncertainty of revenue and cash flows:
Three Months Ended March 28, 2021
(In thousands)
FreshPreparedExportOtherTotal
U.S. chicken$1,597,423 $194,272 $113,971 $93,893 $1,999,559 
U.K. and Europe chicken210,445 216,313 63,551 11,602 501,911 
Mexico chicken372,721 27,404 — 19,006 419,131 
Total chicken2,180,589 437,989 177,522 124,501 2,920,601 
U.K. and Europe pork176,441 159,809 15,831 743 352,824 
Total net sales$2,357,030 $597,798 $193,353 $125,244 $3,273,425 

Three Months Ended March 29, 2020
(In thousands)
FreshPreparedExportOtherTotal
U.S. chicken$1,541,640 $216,087 $58,854 $110,299 $1,926,880 
U.K. and Europe chicken231,953 194,405 59,112 15,703 501,173 
Mexico chicken292,912 24,971 — 7,903 325,786 
Total chicken2,066,505 435,463 117,966 133,905 2,753,839 
U.K. and Europe pork164,682 117,630 18,050 20,727 321,089 
Total net sales$2,231,187 $553,093 $136,016 $154,632 $3,074,928 
Shipping and Handling Costs
In the rare case when shipping and handling activities are performed after a customer obtains control of the good, the Company has elected to account for shipping and handling as activities to fulfill the promise to transfer the good. When revenue is recognized for the related good before the shipping and handling activities occur, the related costs of those shipping and handling activities are accrued. Shipping and handling costs are recorded within cost of sales.
Taxes
The Company excludes all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer (for example, sales, use, value added and some excise taxes) from the transaction price.
Contract Balances
The Company receives payment from customers based on terms established with the customer. Payments are typically due within two weeks of delivery. Revenue contract liabilities relate to payments received in advance of satisfying the performance under the customer contract. The revenue contract liability relates to customer prepayments and the advanced consideration, such as cash, received from governmental agency contracts for which performance obligations to the end customer have not been satisfied.
Changes in the revenue contract liabilities balance are as follows:
March 28, 2021
(In thousands)
Balance, beginning of period$65,918 
Revenue recognized(48,218)
Cash received, excluding amounts recognized as revenue during the period17,634 
Balance, end of period$35,334 
Accounts Receivable
The Company records accounts receivable when revenue is recognized. The Company records an allowance for doubtful accounts to reduce the receivables balance to an amount it estimates is collectible from customers. Estimates used in determining the allowance for doubtful accounts are based on historical collection experience, current trends, aging of accounts receivable and periodic credit evaluations of customers’ financial condition. The Company writes off accounts receivable when it becomes apparent, based upon age or customer circumstances, that such amounts will not be collected. Generally, the Company does not require collateral for its accounts receivable.