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These excerpts taken from the GIS 10-K filed Jul 11, 2008. COMMODITY
PRICE RISK
Many commodities we use in the production and distribution of
our products are exposed to market price risks. We utilize
derivatives to hedge price risk for our principal ingredient and
energy costs, including grains (oats, wheat, and corn), oils
(principally soybean), non-fat dry milk, natural gas, and diesel
fuel. We manage our exposures through a combination of purchase
orders, long-term contracts with suppliers, exchange-traded
futures and options, and over-the-counter options and swaps. We
offset our exposures based on current and projected market
conditions, and generally seek to acquire the inputs at as close
to our planned cost as possible. As of May 25, 2008, the
net notional value of commodity derivatives was
$784.8 million, of which $524.8 million relates to
agricultural positions and $260.0 million relates to energy
positions. These hedges relate to inputs that generally will be
utilized within the next 12 months.
COMMODITY PRICE RISK Many commodities we use in the production and distribution of our products are exposed to market price risks. We utilize derivatives to hedge price risk for our principal ingredient and energy costs, including grains (oats, wheat, and corn), oils (principally soybean), non-fat dry milk, natural gas, and diesel fuel. We manage our exposures through a combination of purchase orders, long-term contracts with suppliers, exchange-traded futures and options, and over-the-counter options and swaps. We offset our exposures based on current and projected market conditions, and generally seek to acquire the inputs at as close to our planned cost as possible. As of May 25, 2008, the net notional value of commodity derivatives was $784.8 million, of which $524.8 million relates to agricultural positions and $260.0 million relates to energy positions. These hedges relate to inputs that generally will be utilized within the next 12 months. | EXCERPTS ON THIS PAGE:
RELATED TOPICS for GIS: |
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