Financial Risk Management at ConAgra Foods
| Case Code: FINA019 Case Length: 16 Pages Period: 2003 Pub Date: 2003 Teaching Note: Not Available |
Price: Rs.500 Organization: ConAgra Foods Industry: Food Production Countries: US Themes: Banking and Financial Management, Microfinance |
Abstract Case Intro 1 Excerpts
Excerpts
Background Note
Alva Kinney founded Nebraska Consolidated Mills in 1919 by combining the operations of four Nebraska grain mills. The firm did not expand outside Nebraska until it opened a mill and feed processing plant in Alabama in 1942. Consolidated Mills developed Duncan Hines cake mix in the 1950s. But Duncan Hines failed to capture a large enough market share, and the company sold it to Procter & Gamble in 1956. Consolidated Mills used the proceeds to expand, opening a flour and feed mill in Puerto Rico the next year. In the 1960s, while competitors were moving into prepared foods, the firm expanded into animal feeds and poultry processing. By 1970 it had poultry processing plants in Alabama, Georgia, and Louisiana. In 1971 the company changed its name to ConAgra (Latin for "in partnership with the land"). During the 1970s, it expanded into the fertilizer, catfish, and pet accessory businesses...
Segment Information
This segment included shelf-stable, frozen and refrigerated foods that were processed and packaged for sales through grocery and convenience stores, mass merchandisers, restaurants, institutions, sports and recreation venues and other retail, deli and foodservice customers...
Market Risk
The principal market risks affecting ConAgra were exposures to price fluctuations of commodity and energy prices, interest rates and exchange rates...
Financial Instruments: Accounting & Valuation
The fair value of each derivative was recognized in the balance sheet within current assets or current liabilities. Changes in the fair value of derivatives were recognized immediately in the income statement for derivatives that did not qualify for hedge accounting...
Exhibits
Exhibit I: ConAgra: Financial Highlights
Exhibit II: ConAgra: Consolidated Balance Sheets
Exhibit III: Net Sales and Operating Profit by Segment
Exhibit IV: ConAgra: Effect of 10% Change in Market Prices
Exhibit V: ConAgra: Effect of 10% Change in Exchange Rates
Exhibit VI: ConAgra: Changes in Trading Assets and Liabilities 2003
Exhibit VII: ConAgra: Fair Value of Contracts as of May 25, 2003
Annexure-A: Accounting for Financial Instruments under US GAAP
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