Market risks affecting the Company include exposures to changes in prices of the finished products the Company sells, interest rates on debt, availability of raw material supplies and the price of natural gas and diesel fuel used in the Company’s plants. Raw materials available to the Company are impacted by seasonal factors, including holidays, when raw material volume declines; warm weather, which can adversely affect the quality of raw material processed and finished products produced; and cold weather, which can impact the collection of raw material. Predominantly all of the Company’s finished products are commodities that are generally sold at prices prevailing at the time of sale. Additionally, with the acquisition of foreign entities we are exposed to foreign currency exchange risks, imposition of currency controls and the possibility of currency devaluation. 57 The Company makes limited use of derivative instruments to manage cash flow risks related to interest rates, natural gas usage, diesel fuel usage, inventory, forecasted sales and foreign currency exchange rates. Interest rate swaps are entered into with the intent of managing overall borrowing costs by reducing the potential impact of increases in interest rates on floating-rate long-term debt. Natural gas swaps and options are entered into with the intent of managing the overall cost of natural gas usage by reducing the potential impact of seasonal weather demands on natural gas that increases natural gas prices. Heating oil swaps and options are entered into with the intent of managing the overall cost of diesel fuel usage by reducing the potential impact of seasonal weather demands on diesel fuel that increases diesel fuel prices. Soybean meal forwards and options are entered into with the intent of managing the impact of changing prices for poultry meal sales. Corn options and future contracts are entered into with the intent of managing U.S. forecasted sales of BBP by reducing the impact of changing prices. Foreign currency forward contracts are entered into to mitigate the foreign exchange rate risk for transactions designated in a currency other than the local functional currency. The Company intends to take physical delivery of the commodities under certain of the Company’s natural gas and diesel fuel instruments and accordingly, these contracts are not subject to the requirements of fair value accounting because they qualify as normal purchases. At July 4, 2026, the Company had foreign exchange forward and option contracts and interest rate swaps outstanding that qualified and were designated for hedge accounting as well as corn option contracts, soybean meal option contracts, soybean oil option contracts, other commodity forward contracts and foreign currency forward contracts that did not qualify and were not designated for hedge accounting. In fiscal 2023, the Company designated interest rate swaps as cash flow hedges of the interest rate risk on a portion of its outstanding variable rate debt. Due to a change in the terms of the underlying debt instruments, the hedging relationships were dedesignated in June 2025. The cumulative gain of approximately $4.1 million, previously recognized in accumulated other comprehensive loss related to the cash flow hedges was reclassified to interest expense upon dedesignation. In July 2025, the Company designated interest rate swaps as cash flow hedges. The notional amount of the swaps at July 4, 2026 totaled $300.0 million. Under the contracts, the Company is obligated to pay a weighted average rate of 3.420% while receiving the 1-month SOFR rate. Under terms of the interest rate swaps, the Company hedges a portion of its variable rate debt into the second quarter of 2027. At July 4, 2026, the aggregate fair value of these interest rate swaps was approximately $3.0 million and was recorded in other current assets on the balance sheet, with an offset recorded in accumulated other comprehensive loss. At January 3, 2026, the aggregate fair value of these interest rate swaps was approximately $2.2 million and was recorded in other current assets, accrued expenses, and noncurrent liabilities on the balance sheet, with an offset recorded in accumulated other comprehensive loss. In fiscal 2025 and fiscal 2026, the Company entered into foreign exchange forward contracts that are considered cash flow hedges. Under the terms of the foreign exchange contracts, the Company hedged a portion of its forecasted sales in currencies other than the functional currency through the fourth quarter of fiscal 2027. As of July 4, 2026 and January 3, 2026, the aggregate fair value of these foreign exchange contracts was approximately $10.7 million and $15.3 million, respectively. As of July 4, 2026, approximately $12.3 million is included in other current assets, approximately $1.2 million is included in accrued expenses and approximately $0.4 million is included in noncurrent liabilities on the balance sheet, with an offset recorded in accumulated other comprehensive loss. As of January 3, 2026, approximately $15.4 million is included in other current assets and approximately $0.1 million is included in accrued expenses on the balance sheet, with an offset recorded in accumulated other comprehensive loss. The Company may enter into corn forward and option contracts, soybean meal forward and option contracts and heating oil swap and option contracts from time to time. There were not any open designated corn, soybean meal or heating oil contracts entered into by the Company at July 4, 2026. As of July 4, 2026, the Company had the following outstanding forward contract amounts that were entered into to hedge foreign currency transactions in currencies other than the functional currency and forecasted transactions in currencies other than the functional currency (in thousands): 58 Functional Currency Contract Currency Range of U.S. Type Amount Type Amount Hedge rates Equivalent Brazilian real 614,959 Euro 95,937 5.88 - 7.06 $ 118,922 Brazilian real 1,733,663 U.S. dollar 311,588 5.08 - 7.29 311,588 Euro 51,787 U.S. dollar 59,452 1.14 - 1.18 59,452 Euro 119,452 Polish zloty 512,300 4.25 - 4.30 136,605 Euro 10,891 Japanese yen 2,006,668 183.06 - 185.19 12,455 Euro 43,010 Chinese renminbi 335,170 7.73 - 7.92 49,186 Euro 43,744 Australian dollar 71,950 1.63 - 1.66 50,026 Euro 3,189 British pound 2,755 0.86 3,647 Polish zloty 51,692 Euro 12,038 4.29 13,794 Japanese yen 133,467 U.S. dollar 826 161.16 - 162.00 826 U.S. dollar 424 Japanese yen 68,538 161.49 424 Australian dollar 382 U.S. dollar 263 0.69 263 $ 757,188 The above foreign currency contracts that are not designated as hedges had an aggregate fair value of approximately $4.2 million and are included in other current assets and accrued expenses at July 4, 2026. The Company had corn option contracts, soybean meal option contracts, soybean oil option contracts and other commodity contracts that are marked to market because they did not qualify for hedge accounting at July 4, 2026. These contracts have an aggregate fair value of approximately $5.0 million and are included in other current assets at July 4, 2026. As of July 4, 2026, the Company had forward purchase agreements in place for purchases of approximately $216.9 million of natural gas and diesel fuel and approximately $37.8 million of other commitments during the next five years. As of July 4, 2026, the Company had forward purchase agreements in place for purchases of approximately $208.8 million of finished product during the next five years. Foreign Exchange The Company has significant international operations and is subject to certain opportunities and risks, including currency fluctuations. As a result, the Company is affected by changes in foreign currency exchange rates, particularly with respect to the euro, Brazilian real, Canadian dollar, Australian dollar, Chinese renminbi, British pound, Polish zloty, and Japanese yen.