v3.24.2.u1
DERIVATIVES AND HEDGING (Tables)
 9 Months Ended
Jul. 28, 2024
Derivative [Line Items]  
Schedule of fair values of derivative instruments The gross fair values of the Company’s derivative instruments designated as hedges are:
In thousands
Location on Consolidated Statements of Financial Position
July 28, 2024October 29, 2023
Commodity Contracts(1)
Other Current Assets$(18,987)$(13,233)
(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 commodity 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 on the Consolidated Statements of Financial Position. The gross liability position as of July 28, 2024 was offset by the right to reclaim net cash collateral of $29.3 million contained within the master netting arrangement. The gross liability position as of October 29, 2023 was offset by the right to reclaim net cash collateral of $32.2 million. See Note H - Fair Value Measurements for a discussion of these net amounts as reported on the Consolidated Statements of Financial Position.
Schedule of fair value hedge assets (liabilities) The carrying amount of the Company’s fair value hedged assets (liabilities) are:
In thousands
Location on Consolidated Statements of Financial Position
July 28, 2024October 29, 2023
Commodity Contracts
Accounts Payable(1)
$(4,160)$(4,914)
Interest Rate Contracts
Current Maturities of Long-term Debt(2)
— (442,549)
(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. The 2024 Notes were paid on June 3, 2024, and there was no cumulative fair value hedging adjustment from discontinued hedges.
Schedule of gains or losses related to derivative instruments
The effect on 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 EndedQuarter Ended
In thousands
July 28, 2024July 30, 2023July 28, 2024July 30, 2023
Cash Flow Hedges
Commodity Contracts$(26,172)$(2,600)$(1,541)$(5,758)Cost of Products Sold
Excluded Component(2)
299 423 — — 
Interest Rate Contracts
— — 247 247 Interest Expense
Gain/(Loss)
Recognized
 in AOCL(1)
Gain/(Loss)
Reclassified from
AOCL into Earnings(1)
Location on
Consolidated
Statements
of Operations
Nine Months EndedNine Months Ended
in thousandsJuly 28, 2024July 30, 2023July 28, 2024July 30, 2023
Cash Flow Hedges
Commodity Contracts$(24,487)$(34,151)$(21,297)$5,833 Cost of Products Sold
Excluded Component(2)
2,112 (268)— — 
Interest Rate Contracts
— — 741 741 Interest Expense
(1)    See Note G - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings.
(2)    Represents the time value of commodity 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:
Quarter EndedNine Months Ended
In thousands
July 28, 2024July 30, 2023July 28, 2024July 30, 2023
Net Earnings Attributable to Hormel Foods Corporation$176,701 $162,679 $584,842 $597,637 
Cash Flow Hedges - Commodity Contracts
Gain (Loss) Reclassified from AOCL(1,541)(5,758)(21,297)5,833 
Amortization of Excluded Component from Options(472)(1,531)(2,478)(4,441)
Fair Value Hedges - Commodity Contracts
Gain (Loss) on Commodity Futures(1)
1,139 1,019 5,766 (440)
Total Gain (Loss) on Commodity Contracts(2)
(874)(6,271)(18,008)952 
Cash Flow Hedges - Interest Rate Contracts
Gain (Loss) Reclassified from AOCL247 247 741 741 
Fair Value Hedge - Interest Rate Contracts
Amortization of Loss Due to Discontinuance of Fair Value Hedge(3)
(1,202)(3,125)(7,451)(9,374)
Total Gain (Loss) on Interest Rate Contracts(4)
(955)(2,878)(6,710)(8,633)
Total Gain (Loss) Recognized in Earnings$(1,828)$(9,148)$(24,718)$(7,681)

(1)    Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the quarter and nine months ended July 28, 2024, and July 30, 2023, 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)    Represents the fair value hedging adjustment amortized through earnings.
(4)    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:
In millions
July 28, 2024October 29, 2023
Corn27.6 
bushels
30.7 
bushels
Lean Hogs186.3 
pounds
144.2 
pounds
Natural Gas3.5 
MMBtu
3.0 
MMBtu
Diesel Fuel
0.9 
gallons
— 
gallons