Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2023

Assets and liabilities measured at fair value on a recurring basis

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis at March 31, 2023, December 31, 2022 and March 31, 2022:


(in thousands)	March 31, 2023
Assets (liabilities)	Level 1		Level 2		Level 3		Total
Commodity derivatives, net (a)	$	32,115	$	82,779	$	—	$	114,894
Provisionally priced contracts (b)	(16,187)		(52,150)		—		(68,337)
Convertible preferred securities (c)	—		—		15,410		15,410
Other assets and liabilities (d)	8,357		24,983		—		33,340
Total	$	24,285	$	55,612	$	15,410	$	95,307


(in thousands)	December 31, 2022
Assets (liabilities)	Level 1		Level 2		Level 3		Total

Commodity derivatives, net (a)	$	54,516	$	143,402	$	—	$	197,918
Provisionally priced contracts (b)	(20,960)		(115,377)		—		(136,337)
Convertible preferred securities (c)	—		—		16,278		16,278
Other assets and liabilities (d)	(209)		31,400		—		31,191
Total	$	33,347	$	59,425	$	16,278	$	109,050


(in thousands)	March 31, 2022
Assets (liabilities)	Level 1		Level 2		Level 3		Total


Commodity derivatives, net (a)	$	264,806	$	298,791	$	—	$	563,597
Provisionally priced contracts (b)	47,505		(42,698)		—		4,807
Convertible preferred securities (c)	—		—		15,905		15,905
Other assets and liabilities (d)	4,677		9,432		—		14,109
Total	$	316,988	$	265,525	$	15,905	$	598,418

(a)Includes associated cash posted/received as collateral

(b)Included in "Provisionally priced contracts" are those instruments based only on underlying futures values (Level 1) and delayed price contracts (Level 2)

(c)Recorded in “Other assets, net” on the Company’s Condensed Consolidated Balance Sheets related to certain available for sale securities.

(d)Included in other assets and liabilities are assets held by the Company to fund deferred compensation plans and foreign exchange derivative contracts (Level 1), as well as interest rate derivatives (Level 2).

Beginning and ending balances for the Company's fair value measurements using Level 3 inputs

A reconciliation of beginning and ending balances for the Company’s fair value measurements using Level 3 inputs is as follows:


	Convertible Preferred Securities
(in thousands)	2023		2022
Assets at January 1,	$	16,278	$	11,618
Purchases of additional investments	—		3,883
Gains included in Other income, net	802		404
Proceeds from investments	(1,670)		—
Assets at March 31,	$	15,410	$	15,905

Fair Value Inputs, Assets, Quantitative Information

The following tables summarize quantitative information about the Company's Level 3 fair value measurements as of March 31, 2023, December 31, 2022 and March 31, 2022:

Quantitative Information about Recurring Level 3 Fair Value Measurements

Fair Value as of

(in thousands)

March 31, 2023

December 31, 2022

March 31, 2022

Valuation Method

Unobservable Input

Weighted Average

Convertible preferred securities (a)

15,410

16,278

15,905

Implied based on market prices

N/A

(a) The Company considers observable price changes and other additional market data available to estimate fair value, including additional capital raising, internal valuation models, progress towards key business milestones, and other relevant market data points.


	Quantitative Information about Non-Recurring Level 3 Fair Value Measurements
	Fair Value as of
(in thousands)	March 31, 2023		December 31, 2022		March 31, 2022		Valuation Method	Unobservable Input	Weighted Average
Grain Assets (a)	$	—	$	9,000	$	—	Third party appraisal	Various	N/A
Ethanol Plant Assets (b)	$	41,673	$	—	$	—	Various	Various	N/A

(a) The Company recognized impairment charges on a Nebraska grain asset. The fair value of the asset was determined using third-party appraisals. These measures are considered Level 3 inputs on a nonrecurring basis.

(b) The Company recognized impairment charges on ELEMENT ethanol plant assets in Colwich, Kansas. The fair value of the assets was determined by a third-party consultant using a discounted cash flow method and a market approach. Both of these methods were given probability weightings based on management's assessment of the ethanol plant's future operations to arrive at the fair value of the ethanol plant assets. The discounted cash flow model is determined by discounting the projected free cash flows using an appropriate discount rate. Key assumptions in the projections of future cash flows used in the consultant's model included input costs (corn, natural gas, etc.), production days, and co-product premiums. The market approach analyzed enterprise value to ethanol production capacity multiples for a group of guideline public companies as well as recent mergers and acquisition transactions. Using these multiples as a baseline, the consultant applied selected multiples to the ELEMENT plant production capacity to arrive at an indicated fair value. These measures are considered Level 3 inputs on a nonrecurring basis.