Inventories

12 Months Ended

Oct. 31, 2021

Inventories

Inventories

3. Inventories

Inventories consist of the following (in thousands):

	October 31,		October 31,
	2021		2020
Fresh fruit	$	17,648	$	14,677
Packing supplies and ingredients		13,088		12,540
Finished prepared foods		10,021		14,570
	$	40,757	$	41,787

We assess the recoverability of inventories through an ongoing review of inventory levels in relation to sales and forecasts and product marketing plans. When the inventory on hand, at the time of the review, exceeds the foreseeable demand, the value of inventory that is not expected to be sold is written down. The amount of the write-down is the excess of historical cost over estimated realizable value. Once established, these write-downs are considered permanent adjustments to the cost basis of the excess inventory.

The assessment of the recoverability of inventories and the amounts of any write-downs are based on currently available information and assumptions about future demand and market conditions. Demand for processed avocado products may fluctuate significantly over time, and actual demand and market conditions may be more or less favorable than our projections. In the event that actual demand is lower than originally projected, additional inventory write-downs may be required.

On October 18, 2021, the Company announced the closure of RFG’s food processing operations at its Green Cove Springs (near Jacksonville), Florida facility, as part of its Project Uno profit improvement program. As of November 15, the Green Cove facility of RFG has ceased operations. The Company’s Fresh avocado operations at this facility will continue in operation and are not affected. RFG will continue to serve customers of this location from its other food processing locations, primarily in Georgia. We wrote down inventory related to this closure of $0.6 million as of October 31, 2021. See Note 18 for further information.