Derivative Instruments

12 Months Ended

Sep. 28, 2013

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Instruments

3. Derivative Instruments

Our operations are exposed to market risks from adverse changes in commodity prices affecting the cost of raw materials. In the normal course of business, these risks are managed through a variety of strategies, including the use of derivatives. The utilization of these financial transactions is governed by policies covering acceptable counterparty exposure, instrument types and other practices. The Company does not enter into derivative contracts for speculative purposes. The Company performs assessments of its counterparty credit risk regularly, including a review of credit ratings and potential nonperformance of the counterparty, and minimizes counterparty concentrations.

Commodity and commodity index futures, swaps and option contracts are used to economically hedge commodity input prices on grains and proteins. These derivative contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions independent of those exposures. Generally, the Company economically hedges a portion of its anticipated consumption of commodity inputs for periods of up to 12 months. As of September 28, 2013, the Company had no outstanding derivative instruments. As of September 29, 2012, the Company had economically hedged certain portions of its anticipated consumption of commodity inputs using derivative instruments with expiration dates through February 2013.

The Company recognizes all derivative instruments as either assets or liabilities at fair value in the condensed consolidated balance sheets, with the exception of normal purchases and normal sales expected to result in physical delivery. The Company’s derivative financial instruments have not been designated as hedging instruments for accounting purposes. The Company recognizes realized and unrealized gains and losses from derivatives used to economically hedge anticipated commodity consumption in other income (expense) on the condensed consolidated statement of operations.

The following table presents the fair value of all derivative instruments outstanding in the condensed consolidated balance sheets (in thousands):

	September 28, 2013				September 29, 2012
Derivatives Not Designated as Hedging Instruments	Other Current Assets		Other Current Liabilities		Other Current Assets		Other Current Liabilities
Commodity contracts	$	0	$	0	$	334	$	206
Total derivative instruments	$	0	$	0	$	334	$	206

The following table presents the effect of derivative instruments recorded in other income (expense) on the condensed consolidated statements of operations (in thousands):

	Fiscal Year Ended
Derivatives Not Designated as Hedging Instruments	September 28, 2013			September 29, 2012		September 24, 2011
Commodity contracts	$	(958	)	$	111	$	(9	)
Total derivative instruments	$	(958	)	$	111	$	(9	)

The following table presents the gross contract notional volume of outstanding derivative contracts:

Commodity	Metric	September 28, 2013		September 29, 2012
Corn	Bushels		0		400,000
Soy Meal	Tons		0		2,000