# Presentation: 881318

## You Just Opened Your Box of Commodity......

**Peggy Cantfil, Chief**
**FDD Operations Branch**
**Barry Shutt, Training Coordinator**
**FDD Program Support Branch**
**SNA ANC**
**Chicago, IL**
**Tuesday, July 17, 2007**
**9:30 AM**

## Agenda

**Why do you receive commodity?**
**Your  “role” on the “front lines.”**
**Myths about commodities!**
**How do you get your commodities?**

**Notes:**
Each lunch served meeting the dietary guidelines for NSLP, qualifies for both reimbursement: cash; and commodity support.  Commodity is currently 17.25
Per meal...based on “last years” meals served. 

## The Commodity Partnership

**Notes:**
 If we understand the “partnership of commodity” & school lunch, all ‘partners,” one would think, share a concern about unfair criticism the programs endure!

## “What’s Inside the Box”

**USDA**

**Looks good to me!**

**Notes:**
 Often, we at USDA hear about the “structures” of the various “state” methods of distributing commodity to recipient agencies...How those systems are funded...how commodity is offered, etc.    
 What we’d like to explore this session is “How do those of you on the “frontlines” of the school lunch program experience USDA Commodity?

 Our boss....has grown weary of criticism that questions quality of USDA commodity....She feels, and rightly so...”It’s a bad rap!”

## Why do you receive commodity?

**Richard B. Russell National School Lunch Act established a “dual mission” for the school lunch program:**
**Strengthen the Nation’s nutrition safety net by providing nutritious meals to school children; and support American agriculture markets by donating commodities for use in school lunch. **
**12% of “support” has to be commodity.**
**Current rate for commodity: $.1875 per meal**

**Notes:**
As with everything, NSLP operates “under the law” and serves these 2 purposes or goals!

## Your Role on the “Front Line” 

**Complaints;**
**Feedback on new commodities;**
**Feedback on acceptability (all items)**

**Notes:**
Since YOU open the box... your opinions are important.  

Do you have any complaints?  How do pass on those complaints?

New stuff....is it “good stuff?”

Respond to “acceptability” by the school...by the students!

## Some Background!

**Food Dollars $$$**

**Notes:**
For most schools...Commodity is around 20% of the total food served at school. That is $.21 of your food costs.
Currently, on average, 50% of $ value provided by USDA is diverted to “processing” i.e. chicken diverted to make chicken nuggets or patties; bulk beef to make “cooked” patties or meatballs; cheese for pizza or pierogies!  
So if you  take out the “high value” items like chicken, beef, cheese...those which often go to processing...and the lobster tail and Alaskan King Crab, You’re left with the “brown box” items...

And that’s what we want to discuss!!!

## National  School Lunch Participation

**Notes:**
For most schools...the NSLP meal, the meal that qualifies for 1) reimbursement and for commodity is about 50% of the meals available each day in school. 

If you examine by “building” often the elementary grades have higher NSLP participation, than high schools.   Obviously this varies by district, but nationwide NSLP meals, as a % of total enrollment (meals served) is about 50%.

## USDA/Commercial

**USDA**

**Notes:**
How do you experience USDA product from its commercial rival? Better, worse....no different?

Is it different from a commercial “private” label product...one your distributor

## Some Myths ...

** ****Some ****Facts**** About Commodities**

**Notes:**
Before we list some “myths” and facts about commodity, we’d like to hear from  you...what “myths” have you heard?  

## The Myth: USDA Commodity make up most of the foods served at school.

**The Facts: **
**USDA commodity makes up only 15-20% of food offered in schools. The balance is purchased commercially by school food authority**

**Notes:**
As noted earlier....depending on your district, and the number of paid, free and reduced meals served, Commodity makes up (on average) less than 20% of the food served in school.

When “Net Off Invoice” began in Pennsylvania....we had to solicit participation from commercial distributors...and we were surprised at the # of distributors...who thought USDA gave schools “most” if not all of what schools served each day.    Didn’t realize it was less than 20%; didn’t realize the “commercial” side was so large.”

## The Myth: The government “dumps” commodities on NSLP!

**The Fact:**
**Schools *****offered***** commodity as “entitlement” based on # meals served which meet dietary guidelines of National School Lunch Program (NSLP);**
**Schools *****offered***** bonus commodity when available;**
**Schools not required to accept any commodity.**

**Notes:**
 Some people still believe USDA dumps product on schools; food that is...of “poor quality” and food no one else wants.   Not true. 

 Commodity program is “offer/accept;” school not required to take any that is offered.

 Most states have systems in place measure or get a feel for what commodities their schools want... Some simply use ECOS or another (state) system to identified preferred commodity. 

## The Myth: USDA Commodity is poor quality with low nutritional value.

**The Facts:**
**Healthy food choices are of primary concern for USDA commodity purchases. **
**Improvements in commodity made over the years include:**
**Reduced Sugar;**
**Reduced Fat;**
**Increased Offerings of Fresh Fruits and Vegetables; and more Whole Grains. **
**	****	**

**Notes:**
 Some have said the quality of commodity is higher than they can afford commercially
 USDA continually explores ways to support the Dietary Guidelines for Americans and the “MyPyramid” food guidance system. 
 Looking at reducing sodium; balancing “nutrition” concerns w/ acceptability.
 Fruits packed in natural juices (or in the case of pineapple...natural juice packed with the fruit) and fruit packed in light syrup or water......USDA actually encouraged industry...to move that way.  Capacity didn’t exist before USDA pushed for that. 
 And the proposed Farm bill includes additional monies just for fruits and vegetables.

## The Myth: Government dictates the foods schools receive.

**The Fact (s):**
**USDA commodity purchases, while sensitive to markets, are increasingly sensitive to “demand” of customers (schools).  (i.e. the impact of 1987 Reform Act;**
**In 1981, USDA offered 54 commodity products to schools compared to over 200 offered today; Today, USDA **_**offers**_** over 200 items: dry; chilled and frozen in modern packaging;**

**Notes:**
 Many things impact USDA purchases. USDA is “big player” in the food market; and while purchases may be limited by supply because of markets, weather, etc., MUCH of what is purchased today is more and more “request” drive; i.e. what the schools want. 
 In 1987 the “demand” came through Congress...i.e. “Give the schools more options...LISTEN to their needs!”   Now...as ECOS grows in acceptance, there is a “tool” to increase the ability of schools to express their “preferences” for USDA commodity purchases. 

## The Myth: Schools serve junk food

**The Facts: **
**By law (NSLP) meals must meet  Dietary Guidelines for Americans...providing**
**no more than 30% of calories from fat; & less than 10% from saturated fat;**
**one-third of RDA of protein, Vitamin A, Vitamin C, iron, calcium and calories. **

**Notes:**
 A 2001 School Nutrition and Dietary Assessment II study found:
 91% of secondary and 82% of elementary school students had opportunity to select lunches consistent with dietary standards for fat and saturated fat. 
 NSLP participation is associated with higher average intakes of many nutrients, both at lunch and over 24 hours.  NSLP participants have substantially lower intakes of added sugars than do non-participants of NSLP. 

## How does that box get here?

**The value of commodities received**
**The ordering timeline**
**Calendar of events**

## Entitlement & Order Timeline

**Jan: ****	****Enter Offerings for States in ECOS**
**Feb: ****	****Enter *****Preliminary***** SY Entitlement ****	****	****Commodity Value & Offerings **
**April/May: Most orders are due**
**June: ****	****Start buying**
**July: ****	****Publish Rate in Federal Register **
**$.1875 per meal SY 08 **
**Aug:****	****Move Prior SY Balances to new SY**
**Nov:****	****Update current SY Entitlement w/          ****	****	****final meals from prior year**

## January/February

***Preliminary***** Information from Current SY**
**AMS and FNS develop a *****PLAN***
***FNS enters Offerings in ECOS***

*Estimated* Per Meal Rate

*Estimated* Meal Count

*Estimated* Cost per Lb.

## The Purchase Plan

- TOP SECRET

## Slide 20

| National Average Percentage |  |
| --- | --- |
| Beef | 22% |
|  Tuna | 0.5% |
| Pork | 5% |
| Chicken | 13% |
| Eggs | 1% |
|  Turkey | 9% |
| F & V | 25% |
| Grains, Peanuts, Oils | 3% |
| Cheese | 22% |
| TOTAL | 100% |

## MarchFine tune the Plan ESTIMATE  commodity $$$  

- State getting orders from school districts
**Based on the plan which is based on**** **

**Estimates**

**Estimates**

- Estimates

## March 

- Cheese orders due
- Turkey product orders due
- Long term contracts

## USDA is FLEXIBLE

**Will bend over backward to try to meet school district**
**needs and support markets nationally !**

## Ordering Flexibility Because...

**Menu driven commodities to meet district needs**
**So commodities move thru the system effectively...**
**USDA is flexible...**
**Dollars are monitored NATIONALLY**
**Acknowledge regional preference, State and local school district preferences;**
**Don’t want entitlement $$$ lost to homeless commodities and waste time to find a home;**
**Don’t want storage fees for commodities that sit ANYWHERE**

## April / May 

**More orders from State/School districts**
**FNS reviews **
**USDA starts buying **
**(with remaining FY funds, only 40% to start SY)**

*Estimated* Per Meal Rate

*Estimated* Meal Count

*Estimated* Cost per Lb.

## June/July 

- WE finally know something !!!
**Commodity Assistance Rate**
**$ .1875 SY 08  **
**USDA really starts buying!!**
**(Meat & Poultry Aug/Sept delivery)**

*Estimated* Meals...

*Estimated* Cost per Lb...

## August 

**Add last year’s balances to current year’s “entitlement” **
**Surveys are reopened**
- Unpurchased orders can be changed

*Estimated* Meals

*Estimated *Cost per Lb.

## September

- 4th quarter FY fund dwindling...
- (40% of entitlement for SY)
- A balancing act
- By September 30 can only award contracts for Meat & Poultry deliveries thru Nov 1-15

## October...

**We’re in the money!!!**
**New Fiscal Year**
**About 60% of FY $$**
**For Delivery **
**Nov 15 – June 30 ??**** ****!!**

## November 

- Update *Prior *SY Final Entitlement
- Reconciliation

*BUT Still buying with Estimated *Cost per Lb.
- (for orders for Dec – June)

**Finally know the estimated level of commodity assistance for the current year! **

## December 

**Update *****CURRENT *****SY Entitlement**

*BUT Estimated *Cost per Lb.
- (for orders for March – June)

**Finally know the estimated level of commodity assistance for the current year! **

## Questions?...Comments!