Derivative Instruments

9 Months Ended

Sep. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments.

The Company purchases and uses certain commodities that are subject to price volatility. The Company has historically used financial derivative instruments to reduce exposure to market risk in commodity prices, primarily corn, through a combination of forward purchases, long-term contracts with suppliers and exchange traded commodity futures and option contracts.  Specifically, the Company sold put options on commodity futures at exercise prices that were deemed attractive to the Company and used the premiums received to reduce the overall cost of inputs utilized in the production process.  Between July 2011 and February 2012, management elected to apply hedge accounting for qualifying derivative contracts.

During 2012, the Company entered into a supply contract to purchase corn for delivery up to 12 months in the future, at negotiated prices.  The pricing for these contracts is fixed based on a formula using several factors.  The Company has determined that the firm commitments to purchase corn under the terms of these contracts meet the normal purchases and sales exception and has excluded the fair value of these commitments from recognition within its condensed consolidated financial statements until the actual contracts are physically settled.  Accordingly, given the supply contract to purchase corn, in February 2012, the Company made the decision to close out of the corn futures contracts designated as cash flow hedges prior to their scheduled delivery and simultaneously de-designated 100 percent of these cash flow hedges at that time.  As of September 30, 2013, the Company has no derivative contracts designated as cash flow hedges.

Derivatives Designated as Cash Flow Hedges

	Amounts of Gains (Losses) Recognized in Other Comprehensive Income (Loss) on Derivatives
	Quarter Ended				Year to Date Ended
Derivatives in Cash Flow Hedging Relationship	September 30, 2013		September 30, 2012		September 30, 2013		September 30, 2012
Commodity derivatives	$	—	$	—	$	—	$	(286	)

	Amounts of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Earnings
	Quarter Ended				Year to Date Ended
Location of Losses Reclassified from AOCI into Income	September 30, 2013		September 30, 2012		September 30, 2013		September 30, 2012
Cost of Sales	$	—	$	—	$	—	$	(413	)

The Company’s production process also involves the use of natural gas and flour.  The contracts for flour and natural gas range from monthly contracts to multi-year supply arrangements; however, because the quantities involved have always been for amounts to be consumed within the normal production process, the Company has determined that these contracts meet the normal purchases and sales exceptionand have excluded the fair value of these commitments from recognition within its financial statements until the actual contracts are physically settled.  See Note 4. Commitments and Contingencies for discussion on the Company’s corn, flour and natural gas purchase commitments.

The following table provides the gain or (loss) for the Company’s commodity derivatives not designated as hedging instruments and where it was recognized in the Condensed Consolidated Statements of Comprehensive Income (Loss).

		Quarter Ended				Year to Date Ended
	Classified	September 30, 2013		September 30, 2012		September 30, 2013		September 30, 2012
Commodity derivatives	Cost of sales	$	—	$	2,670	$	—	$	2,204