Inventories

3 Months Ended

Mar. 31, 2020

Inventories consisted of the following (in millions):



	March 31, 2020			December 31, 2019
Refinery feedstocks	$	2,016		$	2,399
Refined petroleum products and blendstocks	3,616			4,034
Renewable diesel feedstocks and products	44			46
Ethanol feedstocks and products	270			260
Materials and supplies	277			274
Inventories before LCM inventory valuation reserve	6,223			7,013
LCM inventory valuation reserve	(2,548		)	—
Inventories	$	3,675		$	7,013

We compare the market value of inventories to their cost on an aggregate basis, excluding materials and supplies. In determining the market value of our inventories, we assume that feedstocks are converted into refined products, which requires us to make estimates regarding the refined products expected to be produced from those feedstocks and the conversion costs required to convert those feedstocks into refined products. We also estimate the usual and customary transportation costs required to move the inventory from our plants to the appropriate points of sale. We then apply an estimated selling price to our inventories. If the aggregate market value is less than the aggregate cost, we recognize a loss for the difference in our statements of income. However, to the extent the aggregate market value subsequently increases, we would recognize an increase to the value of our inventories (not to exceed cost) and a gain in our statements of income.

The market value of our last-in, first-out (LIFO) inventory as of March 31, 2020 fell below our historical LIFO inventory costs. As a result, we recorded an LCM inventory valuation adjustment of $2.5 billion for the three months ended March 31, 2020. The income statement effect differs from the balance sheet reserve due to the foreign currency effect of inventories held for our international operations. As of December 31, 2019, the replacement cost (market value) of LIFO inventories exceeded their LIFO carrying amounts by $2.5 billion.

Our non-LIFO inventories accounted for $1.1 billion and $1.4 billion of our total inventories as of March 31, 2020 and December 31, 2019, respectively.