Inventories

9 Months Ended

Oct. 01, 2011

Inventories

Inventories

Note 3 – Inventories

The following is a summary of inventories at October 1, 2011 and December 31, 2010:

	October 1,			December 31,
(Thousands of dollars)	2011			2010
At lower of LIFO cost or market:
Live hogs and materials	$	223,768		$	200,600
Fresh pork and materials	30,435			24,779
	254,203			225,379
LIFO adjustment	(57,055		)	(24,085		)
Total inventories at lower of LIFO cost or market	197,148			201,294
At lower of FIFO cost or market:
Grains and oilseeds	295,289			203,232
Sugar produced and in process	57,028			50,190
Other	57,564			44,013
Total inventories at lower of FIFO cost or market	409,881			297,435
Grain, flour and feed at lower of weighted average cost or market	51,022			35,032
Total inventories	$	658,051		$	533,761

As of October 1, 2011, Seaboard had $1,709,000 recorded in grain inventories related to its commodity trading business that are committed to various customers in foreign countries for which customer contract performance is a heightened concern.  If Seaboard is unable to collect amounts from these customers as currently estimated or Seaboard is forced to find other customers for a portion of this inventory, it is possible that Seaboard could incur additional write-downs in the value of this inventory if Seaboard is not successful in selling at the current carrying value.  During the third quarter of 2011, significant issues occurred with certain customers resulting in write-offs of material amounts of inventory for contract non-performance, which amounts were both previously not considered at risk and also amounts previously disclosed at risk.  For the three and nine months of 2011, Seaboard incurred net write-downs of $10,650,000 and $13,992,000, respectively, related to these types of inventories.