[Federal Register Volume 71, Number 151 (Monday, August 7, 2006)]
[Proposed Rules]
[Pages 44784-44855]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-6627]



[[Page 44783]]

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Part II





Department of Agriculture





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Food and Nutrition Service



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7 CFR Part 246



Special Supplemental Nutrition Program for Women, Infants and Children 
(WIC): Revisions in the WIC Food Packages; Proposed Rule

Federal Register / Vol. 71, No. 151 / Monday, August 7, 2006 / 
Proposed Rules

[[Page 44784]]


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DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Part 246

RIN 0584-AD77


Special Supplemental Nutrition Program for Women, Infants and 
Children (WIC): Revisions in the WIC Food Packages

AGENCY: Food and Nutrition Service (FNS), USDA.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise regulations governing the WIC 
food packages to align the WIC food packages with the 2005 Dietary 
Guidelines for Americans and current infant feeding practice guidelines 
of the American Academy of Pediatrics, better promote and support the 
establishment of successful long-term breastfeeding, provide WIC 
participants with a wider variety of food, provide WIC State agencies 
with greater flexibility in prescribing food packages to accommodate 
participants with cultural food preferences, and serve participants 
with certain qualifying conditions under one food package to facilitate 
efficient management of medically fragile participants. The revisions 
largely reflect recommendations made by the Institute of Medicine of 
the National Academies in its Report ``WIC Food Packages: Time for a 
Change,'' with certain cost containment and administrative 
modifications found necessary by the Department to ensure cost 
neutrality. The proposed improvements to the WIC food packages can be 
made without increasing the projected costs. The proposed rule would 
revise the maximum monthly allowances and minimum requirements for 
certain supplemental foods; revise the substitution rates for certain 
supplemental foods and allow additional foods as alternatives; redesign 
WIC food packages to enhance breastfeeding promotion and support; 
revise age specifications for assignment to infant food packages; add 
fruits and vegetables for WIC participants 6 months of age and older 
and eliminate juice from infants food packages; add whole grains to 
food packages for children and women and infant food meat for fully 
breastfed infants 6 through 11 months of age; revise the purpose, 
content, and requirements for the Food Package for the Medically 
Fragile, and address general provisions that apply to all food 
packages.

DATES: To be assured of consideration, comments must be postmarked on 
or before November 6, 2006.

ADDRESSES: The Food and Nutrition Service invites interested persons to 
submit comments on this proposed rule. Comments may be submitted by any 
of the following methods:
    <bullet> Mail: Send comments to Patricia N. Daniels, Director, 
Supplemental Food Programs Division, Food and Nutrition Service, USDA, 
3101 Park Center Drive, Room 528, Alexandria, Virginia 22302, (703) 
305-2746.
    <bullet> Web site: Go to http://www.fns.usda.gov/wic. Follow the 
online instructions for submitting comments through the link at the 
Supplemental Food Programs Division Web site.
    <bullet> E-mail: Send comments to <a href="/cdn-cgi/l/email-protection#47100e040f166a1401170307212934693234232669202831"><span class="__cf_email__" data-cfemail="3f68767c776e126c796f7b7f59514c114a4c5b5e11585049">[email protected]</span></a>. Include 
``Docket ID Number 0584-AD77, WIC Food Packages Rule,'' in the subject 
line of the message.
    <bullet> Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting 
comments.
    All comments submitted in response to this proposed rule will be 
included in the record and will be made available to the public. Please 
be advised that the substance of the comments and the identities of the 
individuals or entities submitting the comments will be subject to 
public disclosure. All written submissions will be available for public 
inspection at the address above during regular business hours (8:30 
a.m. to 5 p.m.) Monday through Friday. FNS may also make the comments 
publicly available by posting a copy of all comments on the FNS Web 
site at http://www.fns.usda.gov/wic.
    A regulatory impact analysis has been prepared for this rule. It 
follows this regulation as an Appendix.

FOR FURTHER INFORMATION CONTACT: Debra Whitford, Chief, Policy and 
Program Development Branch, Supplemental Food Programs Division, Food 
and Nutrition Service, USDA, 3101 Park Center Drive, Room 528, 
Alexandria, Virginia 22302, (703) 305-2746, OR 
<a href="/cdn-cgi/l/email-protection#286c4d4a4a414d067f40415c4e475a4c684e465b065d5b4c49064f475e"><span class="__cf_email__" data-cfemail="490d2c2b2b202c671e21203d2f263b2d092f273a673c3a2d28672e263f">[email protected]</span></a>. A copy of the National Academies' 
Institute of Medicine report, ``WIC Food Packages: Time for a Change,'' 
which provides the scientific backdrop for this proposed rule, is 
available on the FNS Web site at http://www.fns.usda.gov/oane/menu/Published/WIC/FILES/Time4AChange(mainrpt).pdf.

SUPPLEMENTARY INFORMATION: 

I. Overview

    This proposed rule would implement the first comprehensive 
revisions to the WIC food packages since 1980. These revised food 
packages were developed to better reflect current nutrition science and 
dietary recommendations than do current food packages, within the 
parameters of current program costs. The proposal is based on the 
recommendations of the National Academies' Institute of Medicine (IOM), 
which was commissioned by FNS in September 2003, to independently 
review the WIC food packages. The IOM used current scientific 
information to assess the nutrient adequacy of the diets of WIC 
participants; assess the supplemental nutrition needs of the population 
served by WIC; look at the nutrient contributions of the current 
packages; propose priority nutrients and general nutrition 
recommendations; and make recommendations for specific changes to the 
WIC food packages. The IOM used various data sources including the 2005 
Dietary Guidelines for Americans, the Dietary Reference Intakes, WIC 
participant data, food consumption and intake data (Continuing Survey 
of Food Intakes by Individuals (CSFII); National Health and Nutrition 
Examination Survey (NHANES)) and examined nutrition-related health 
risks to identify nutrients and food groups to try to increase or 
decrease in the food packages with the goal of improving the nutrition 
of WIC participants. The review of the WIC food packages was further 
informed by extensive comments made in response to an Advanced Notice 
of Proposed Rulemaking on revisions to the WIC food packages and by 
comments received by the IOM in public forums during its review.
    Compared to current WIC packages, the proposal:
    <bullet> Provides greater consistency with the Dietary Guidelines 
for Americans. The proposal adds fruits and vegetables, and whole 
grains to the packages for the first time. The revised packages include 
foods from each food group except oils and allow variety and choice 
within the groups. Reductions are made to the amounts provided for 
certain foods in the current packages in order to be more consistent 
with the amounts of these foods recommended in the 2005 Dietary 
Guidelines for Americans and WIC's role as a supplemental nutrition 
program.
    <bullet> Supports improved nutrient intakes. The proposed 
additional foods and modified amounts of current foods support overall 
improvement in nutrient consumption and reduction in the

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prevalence of inadequate or excessive nutrient intakes. Compared with 
the current food packages, the revised packages are estimated to 
provide greater amounts of nearly all the nutrients of concern with 
regard to inadequate intake identified by the IOM such as iron, fiber, 
and vitamin E. The revised food packages for women and children also 
provide less saturated fat, cholesterol, total fat and sodium than the 
current packages.
    <bullet> Provides greater consistency with established dietary 
recommendations for infants and children under 2, including 
encouragement and support for breastfeeding. The revised infant food 
packages improve overall nutrient density compared to current packages 
while keeping caloric content the same or slightly lower. The revised 
packages change age specification for assignment as well as establish 
three feeding categories to better address current dietary 
recommendations of the American Academy of Pediatrics (AAP) and promote 
breastfeeding. The packages for breastfeeding infant-mother pairs are 
revised to provide stronger incentives for continued breastfeeding, 
including providing less formula to partially breastfed infants than 
current packages, and providing additional quantities/types of food for 
breastfeeding mothers. For older infants, the proposal delays the 
introduction of complementary foods, consistent with AAP, from four to 
six months of age and modifies formula amounts. Infant foods are added 
and juice eliminated in the packages for older infants in order to 
promote healthy dietary patterns.
    <bullet> Addresses emerging public health nutrition-related issues. 
The prevalences of overweight and obesity in adults, adolescents, and 
children have increased dramatically, with direct implications for WIC 
participants. For example, childhood overweight has been linked to 
adverse health outcomes including elevated blood pressure, 
hyperinsulinemia, glucose intolerance, type 2 diabetes, dyslipidemia, 
and other early risks for chronic disease. The addition of fruits and 
vegetables and the emphasis on whole grains are consistent with 
recommendations for food patterns that may contribute to a health body 
weight. Compared to the current food packages, the revised food 
packages provide less saturated fat and cholesterol than the current 
packages for women and children. In addition, the revised food packages 
are designed to encourage breastfeeding and thus may contribute to a 
reduced risk of overweight in children.
    <bullet> Reinforces the nutrition education messages provided to 
participants. The proposed food package more closely mirrors the 2005 
Dietary Guidelines for Americans and dietary recommendations for 
infants and children under two and is more consistent with the 
nutrition education provided to participants.
    <bullet> Provides wide appeal to diverse populations. The proposed 
additional foods are the foods most often requested over the years by a 
variety of stakeholders such as the National WIC Association, WIC 
participants, WIC State and local agencies, industry and health 
professionals, and would provide more participant choice and a wider 
variety of foods than the current food packages. The increased variety 
and choice will provide State agencies increased flexibility in 
prescribing culturally appropriate food packages.

II. Background

    The WIC food packages provide supplemental foods designed to 
address the nutritional needs of low-income pregnant, breastfeeding, 
non-breastfeeding postpartum women, infants and children up to five 
years of age who are at nutritional risk. WIC food packages and 
nutrition education are the chief means by which WIC affects the 
dietary quality and habits of participants. WIC is a unique nutrition 
assistance program in that it also serves as an adjunct to good health 
care during critical times of growth and development to prevent the 
occurrence of health problems and to improve the health status of 
Program participants. WIC was never intended to be a primary source of 
food, nor of general food assistance. Rather, WIC food benefits are 
scientifically-based and intended to address the supplemental 
nutritional needs of a specific population--low income pregnant, 
breastfeeding, non-breastfeeding postpartum women, infants and children 
up to five years of age who are at nutritional risk. In addition to 
WIC, the Department administers a variety of other complementary 
nutrition assistance programs that work together to provide a more 
complete diet to low-income persons. Low-income families can, and 
frequently do, receive benefits from more than one of these programs. 
The largest of these programs, the Food Stamp Program, provides general 
food assistance intended to increase the food buying power of low-
income households.
    The ability of the WIC food packages to reinforce nutrition 
education messages provided to participants is critical to affecting 
the dietary quality and habits of infants, children and mothers served 
by WIC. The nutrition education provided by WIC enables participants to 
make informed decisions in choosing foods that, together with the 
supplemental foods contained in the WIC food packages, can meet their 
total dietary needs. The intent is to help participants to continue 
healthful dietary practices after leaving the Program.
    Since the creation of the WIC Program in the 1970's, and the last 
major revision of the WIC food packages in the early 1980's, much has 
been learned about the nutritional needs of Americans, including WIC's 
target population of pregnant and postpartum women, infants, and 
preschool aged children. In recent years the ability of the WIC Program 
to address the supplemental nutritional needs of WIC participants 
through its food packages and nutrition education has received growing 
attention. Significant interest in updating the food packages based on 
new information about the needs of low-income, culturally diverse 
women, infants, and children has been voiced by WIC Program 
administrators, the medical and scientific communities, advocacy 
groups, and Congress.

A. Advanced Notice of Proposed Rulemaking (ANPRM)

    On September 15, 2003, FNS published an ANPRM at 68 FR 53903 
seeking comments on revisions to the food packages offered through the 
WIC Program. FNS solicited public comments to determine if the WIC food 
packages should be revised to better improve the nutritional intake, 
health and development of participants and, if so, what specific 
changes should be made to the food packages. In response to this ANPRM, 
the Department received 195 letters. Respondents represented the 
general public, State and local WIC agencies, the National WIC 
Association (NWA), State WIC associations, industry, independent health 
professionals, vendors, WIC participants, and others. Comments received 
from NWA included two published position papers \(1, 2)\ that provided 
recommendations based on that organization's analysis of the needs of 
WIC participants.

B. Review of the WIC Food Packages by the Institute of Medicine

    In September 2003, FNS contracted with the National Academies' 
Institute of Medicine (IOM) to independently review the WIC Food 
Packages in a 22-month study. FNS charged the IOM with reviewing the 
nutritional needs of the WIC population, and recommending changes to 
the WIC food packages. Recommendations were to be cost-

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neutral, efficient for nationwide distribution and vendor checkout, 
non-burdensome to administration, and culturally suitable. FNS asked 
IOM to consider the supplemental nature of the WIC Program, burdens/
incentives for eligible families, the role of WIC food packages in 
reinforcing nutrition education, breastfeeding, and chronic disease 
prevention, and public comments received from FNS' ANPRM.
    Under this contract, IOM selected a Committee of experts in 
nutrition, health, risk assessment and economics to conduct this study 
in two phases. During Phase I, the committee developed the following 
criteria to guide its work. It also used various data sources to 
identify nutrients and food groups to try to increase or decrease in 
the food packages (i.e., priority nutrients and priority food groups), 
with the goal of improving the nutrition of WIC participants.

 
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                     Criteria for a WIC Food Package
FROM: ``WIC Food Packages; Time For A Change.'' The Institute of
 Medicine of the National Academies, The National Academies Press, 2005,
 page 37
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1. The package reduces the prevalences of inadequate and excessive
 nutrient intakes in participants.
2. The package contributes to an overall dietary pattern that is
 consistent with the Dietary Guidelines for Americans, for individuals
 two years of age and older.
3. The package contributes to an overall diet that is consistent with
 established dietary recommendations for infants and children less than
 two years of age, including encouragement of and support for
 breastfeeding.
4. Foods in the package are available in forms suitable for low-income
 persons who may have limited transportation, storage, and cooking
 facilities.
5. Foods in the package are readily acceptable, widely available, and
 commonly consumed; take into account cultural food preferences; and
 provide incentives for families to participate in the WIC program.
6. Foods will be proposed giving consideration to the impacts that
 changes in the package will have on vendors and WIC agencies.
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    In Phase II, the Committee used these criteria and its review of 
the nutritional needs of WIC participants to develop recommendations 
for changing the WIC food packages. The IOM published these 
recommendations in a report, ``WIC Food Packages: Time for a Change'' 
(IOM Report), which was released on April 27, 2005). <SUP>(3)</SUP>.

C. Cost Neutrality

    Since the WIC Program receives a finite amount of funding annually 
to serve as many participants as this funding allows, it is important 
that revisions to the WIC food packages be cost neutral to protect the 
program's ability to serve the greatest number of eligible women, 
infants, and children.
    The IOM conducted a cost analysis as part of its review and 
believes that its recommendations to revise the WIC food packages were 
relatively cost-neutral, given data available to the IOM at that time. 
However, based on updated data, the Department now estimates that 
implementing the IOM's recommendations in full would cost $1.3 billion 
above the cost-neutral level over 5 years. Therefore, the Department 
has modified two of the IOM's recommendations to achieve a cost neutral 
proposal consistent with statutory requirements. The Department 
carefully considered which of the IOM recommendations to modify to 
achieve cost neutrality, basing the decision on 3 criteria--relative 
cost, nutritional impact, and overall context of the IOM 
recommendations. To achieve cost neutrality, the Department is 
proposing a cash-value fruit and vegetable voucher that is $2 less per 
month than that recommended by the IOM, and is not proposing yogurt as 
an authorized alternative to milk.
    The price of yogurt as compared to the price of milk would 
considerably increase the monthly cost of the food packages for 
children and women. Soy beverage and tofu also have higher per unit 
costs than milk; however, the estimated amount of tofu that would be 
purchased by WIC participants is substantially lower than that of 
yogurt. Soy beverage can serve as an alternative for all or part of the 
fluid milk for adult women, making it a more cost-effective substitute. 
For fruits and vegetables, the IOM's intent was to move WIC 
participants towards some amount of increased fruit and vegetable 
consumption and, at the same time, reinforce the role of the WIC food 
packages in nutrition education. The proposed $2 reduction in the cash-
value fruit and vegetable voucher fulfills this intent while ensuring 
cost neutrality.
    The Department believes that this proposed rule largely sets forth 
the scope of the IOM recommendations notwithstanding these necessary 
modifications. Commenters are encouraged to suggest alternative ways to 
achieve cost neutrality within the context of the overall IOM 
recommendations. State agencies will be responsible for determining how 
to fully implement the proposed provisions within their grants. Options 
available to State agencies include applying judicious use of currently 
authorized caseload management procedures, including the participant 
priority system in accordance with Sec.  246.7(e)(4) of WIC 
regulations, or by implementing other cost containment measures. State 
agencies are also reminded that Sec.  246.16a(g) authorizes State 
agencies to implement a cost containment system for any WIC food other 
than infant formula.

D. Stakeholder Comments

    The comments FNS received from its ANPRM represented a wide range 
of perspectives. A majority of those who commented expressed general 
support for foods currently offered, but also proposed at least one 
change. Nearly three-fourths of those responding to FNS stated that 
fruits and vegetables should be added to the packages. Other comments 
addressed topics including priority nutrients, design and structure of 
the food package, amount of juice, amount of milk, choices of milk 
products, alternative sources of calcium, cereal and grain choices, 
physical forms of legumes (i.e., dried or canned beans or peas), peanut 
butter, eggs, tuna, alternative sources of protein, infant formula, 
medical foods regulations, cost, incentives to breastfeed, flexibility 
at the State agency level, and more variety and choice at the 
participant level. Comments may be viewed at http://www.fns.usda.gov/wic/lawsandregulations/revfoodpkg-anprm.htm#publiccomments. Similar 
themes were addressed in over 70 written and 30 oral public comments 
submitted directly to the IOM committee during its 22-month review of 
the WIC food packages.

E. Legislative Requirements

    Sections 17(a) and (b)(14) of the Child Nutrition Act of 1966, as 
amended, (CNA) (42 U.S.C. 1786(a) and (b)(14)) clearly established the 
WIC Program as

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``supplemental'' in nature; that is, the WIC supplemental foods are not 
intended to provide a complete diet but are designed to provide 
nutrients determined by nutritional research to be lacking in the diets 
of the WIC population. The law also directs the Secretary in Section 
17(f)(11) of the CNA (42 U.S.C. 1786(f)(11)) to assure that, to the 
degree possible, the fat, sugar, and salt content of supplemental foods 
is appropriate. Section 203(a)(2) of Public Law 108-265 amended Section 
17(b)(14) of the CNA by revising the definition of supplemental foods 
to include foods that promote health as indicated by relevant nutrition 
science, public health concerns, and cultural eating patterns.
    Early legislation for the WIC Program, Public Law 92-433 (1972) 
through Public Law 94-105 (1975), specifically identified protein, 
iron, calcium and vitamins A and C as nutrients of particular concern 
for WIC participants. Public Law 95-627, enacted in November 1976, 
deleted reference to specific nutrients; however, the Department 
retained high-quality protein, iron, calcium, and vitamins A and C as 
the targeted nutrients in the WIC Program.

F. Current WIC Food Packages

    WIC food package requirements appear in Sec.  246.10 of the WIC 
Program regulations. The last major revision of the WIC Food Packages 
was in 1980 (45 FR 74854, November 12, 1980). The 1980 rule established 
six different monthly packages--Food Package I for infants 0-3 months; 
Food Package II for infants 4-12 months; Food Package III for children 
and women with special dietary needs; Food Package IV for children 1-5 
years of age; Food Package V for pregnant and breastfeeding women; and 
Food Package VI for nonbreastfeeding postpartum women. The Department 
created an additional food package in 1992 (57 FR 56231, November 27, 
1992). This enhanced food package, Food Package VII, was designed for 
breastfeeding women who elect not to receive infant formula through WIC 
for their infants.
    Current WIC supplemental foods include iron-fortified infant 
formula, iron-fortified cereals, vitamin C-rich 100 percent fruit and/
or vegetable juice, calcium/protein-rich milk and cheese, protein/iron-
rich eggs, protein-rich peanut butter or dried beans/peas, and 
physician-prescribed formula/medical foods for participants with 
certain special dietary needs. The enhanced package for breastfeeding 
women increases allowable amounts of juice, cheese, peanut butter and 
dry beans/peas, and also allows protein-rich tuna fish and carrots that 
provide beta-carotene (precursor to vitamin A) and dietary fiber.

G. New Nutrient Recommendations

    Over the past decade, knowledge of nutrient requirements has 
increased substantially, resulting in a set of new dietary reference 
values called the Dietary Reference Intakes (DRIs).<SUP>(4-9)</SUP> The 
DRIs replace the 1989 Recommended Dietary Allowances (RDAs) as nutrient 
reference values for the United States population. Based on the DRIs, 
many of the recommendations for nutrient intakes for individuals (RDAs) 
have changed substantially since the WIC food packages were originally 
formulated. Although basic concepts of nutrition have not changed, 
there has been a substantial increase in knowledge of specific concepts 
such as bioavailability, nutrient-nutrient interactions, and the 
distribution of dietary intake of nutrients across subgroups of the 
population. In addition to recommended intakes, the DRIs include 
appropriate standards to use in determining whether diets are 
nutritionally adequate without being excessive. The DRIs encompass more 
aspects of nutrition that did the earlier RDAs, as follows:
    <bullet> DRIs consider reduction in the risk of chronic disease, as 
well as the absence of signs of deficiency.
    <bullet> For most nutrients, DRIs include both RDA and Estimated 
Average Requirement (EAR) values.
    <bullet> For some nutrients, insufficient data were available to 
set EAR and RDA values. For these nutrients, Adequate Intake (AI) 
values were estimated.
    <bullet> DRIs include Tolerable Upper Intake Levels (ULs), which 
are used in the evaluation of the risk of adverse effects from excess 
consumption.
    <bullet> DRIs specify appropriate ranges of macronutrient 
densities, which are called Acceptable Macronutrient Distribution 
Ranges (AMDRs).
    <bullet> When adequate data are available, DRIs provide reference 
values for food components other than nutrients.
    Assessing nutrient adequacy involves determining the extent to 
which the diets of WIC-income-eligible subgroups meet nutrient 
requirements without being excessive. In its Report, the IOM conducted 
analyses applying the DRIs and the recommended methods to assess the 
nutrient adequacy of the diets of WIC participants.

III. Priority Nutrients, Nutrition-Related Health Priorities, and 
Priority Food Groups Cited by the IOM Report <SUP>(3)</SUP>

    The IOM Report cites fundamental changes that have occurred in the 
major health and nutrition risks faced by WIC's target population. The 
prevalences of underweight and iron-deficiency anemia have decreased. 
Diets have improved in many respects, and nutrients for which intakes 
often appeared to be low in the 1970s (calcium and vitamins A and C) 
are less problematic, particularly for children. Despite improved 
access to health care and health services, the prevalences of 
overweight and obesity in adults, adolescents, and children have 
increased dramatically, regardless of WIC participation. In addition, 
marked demographic changes have occurred, with both a dramatic increase 
in the number of persons served by WIC and a substantial shift in the 
ethnic composition of the WIC population. Hispanics now make up the 
largest share of WIC participants.<SUP>(10)</SUP>

A. Priority Nutrients

    IOM designated a nutrient as a priority nutrient if the prevalence 
of dietary inadequacy was non-trivial, or the mean intake is below the 
AI, or there is a recognized nutrition-related health priority (e.g., 
observable levels of iron deficiency anemia). The methodology used to 
identify nutrients at high risk of inadequacy is described by the IOM 
in ``Dietary Reference Intakes: Applications in Dietary Assessment.'' 
<SUP>(11)</SUP> Based on detailed analyses,\1\ the IOM Report cites the

[[Page 44788]]

following nutrients as high priority for WIC participants.
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    \1\ The IOM analyzed nutrient intake using nationally 
representative data for WIC children and for non-breastfed WIC 
infants. However, the IOM found that for breastfed infants 6 through 
11 months of age, and for the women's groups, the nationally 
representative data did not provide adequate sample size of WIC 
participants for meaningful analysis. Consequently, the IOM used 
data for all infants 6 through 11 months and for all pregnant and 
lactating women. For non-breastfeeding postpartum women 
categorically eligible for WIC (up to six months postpartum), the 
IOM used data for all women within one year postpartum. The 
Department would have preferred to have adequate sample size to 
limit all of these analyses to the WIC actual groups, so that the 
recommendations could be completely tailored to the WIC population. 
Prior research using data from the Continuing Survey of Food Intakes 
by Individuals indicates that there are statistically significant 
differences in dietary intake between low income and higher income 
adults. For example, when controlling for a wide variety of 
independent factors, those adults with incomes below 130 percent of 
poverty have statistically lower usual mean intakes for food energy 
and almost all vitamins and minerals, and were less likely to meet 
either 70 percent or 100 percent of the RDA. (See Gleason P., A. 
Rangarajan and C. Olson. ``Dietary Intake and Dietary Attitudes 
Among Food Stamp Participants and Other Low-Income Individuals,'' 
United States Department of Agriculture, Food and Nutrition Service, 
Office of Analysis, Nutrition and Evaluation FSP-00-DI, Project 
Officer Sharron Cristofar, Alexandria, Virginia 2002.) However, the 
pattern of which nutrients more frequently have low intakes is very 
similar for the high- and low-income groups. For example, among the 
nine vitamins and five minerals studied, both the list and order of 
the six nutrients with the smallest portion of the population 
consuming 70% of the RDA is the same for the low- and high-income 
groups. Estimates based on too small a sample have an unacceptably 
high risk of inaccurately representing the true population mean and 
distribution. Therefore, for the purpose of comparing nutrient 
adequacy and excesses among a group of nutrients when the WIC sample 
is limited, use of the all-income sample is the best available 
alternative.
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    <bullet> WIC infants under one year of age, non-breastfed: No 
nutrients were identified with a high risk of inadequacy. Priority 
nutrients related to risk of excessive intakes in non-breastfed infants 
are zinc, preformed vitamin A, and food energy (calories).
    <bullet> Breastfed infants 6 through 11 months: Priority nutrients 
identified as lacking in the diets of breastfed infants six months and 
older are iron and zinc.
    <bullet> WIC children 1 through 4 years of age: Priority nutrients 
identified as lacking in the diets of young children are vitamin E, 
fiber, and potassium, and iron. Nutrients that may be excessive in the 
diets of young children are zinc, preformed vitamin A, sodium, food 
energy (calories), and saturated fat.
    <bullet> Pregnant, lactating, and non-breastfeeding postpartum 
women: Priority nutrients identified as lacking are calcium, iron, 
magnesium, vitamin E, potassium, and fiber. Nutrients with moderate, 
but still high, levels of inadequacy are vitamins A, C, and 
B<INF>6</INF>, and folate. Nutrients with lower levels of inadequacy 
are iron, zinc, thiamin, niacin, and protein. Sodium intakes and 
saturated fat intakes as a percentage of food energy intakes are 
excessive in the diets of pregnant, lactating, and non-breastfeeding 
postpartum women.

B. Nutrition-Related Health Priorities

    In addition to analyses of nutrient adequacy, the IOM reviewed 
epidemiological evidence on body weight status, micronutrients of 
special concern during reproduction and early childhood, food 
allergies, and selected environmental risks to the health of women, 
infants, and children. Several concerns were identified by the IOM for 
all WIC subgroups--obesity, poor iron status, and contamination of food 
with dioxin and methylmercury. The IOM also determined that low folate 
intake is a concern for all women during their reproductive years 
because of its importance in preventing neural tube defects; 
insufficient calcium intake for pregnant and breastfeeding women may be 
associated with potential lead toxicity for the fetus and infant; low 
intake of vitamin D is a potential concern for women of reproductive 
age because of its importance in bone health; and inadequate zinc 
intake is a concern for breastfed infants 6 through 11 months of age 
because human milk does not provide recommended amounts of zinc for 
older infants.

C. Priority Food Groups

    To determine whether specific foods or types of food should receive 
priority in the re-design of WIC food packages, the IOM reviewed 
information about dietary guidance, amounts of foods consumed by groups 
that potentially are eligible for the WIC Program, and the amounts of 
foods in current WIC food packages. The IOM's assessment gave major 
consideration to the Dietary Guidelines for Americans (DGA), which form 
the basis of Federal food and nutrition programs (Pub. L. 101-445, U.S. 
Congress, 1990). To do this, the IOM used the DGA 2005 <SUP>(12)</SUP> 
as the source of dietary guidance for children ages two years and older 
and widely accepted dietary guidance from professional groups, such as 
the American Academy of Pediatrics, for children under two years of 
age. The IOM Report cites the following concerns:
    1. Children ages 2 through 4 years and women in the childbearing 
years:
    <bullet> Overall: Intakes of whole grains, vegetable subgroups 
excluding potatoes and other starchy vegetables, fruits, milk and milk 
products, and meats are all lower than recommended on average;
    <bullet> Children ages 2 through 4: Intakes tend to be low in whole 
grains and in dark green leafy vegetables, deep yellow vegetables, 
cooked dry beans and peas rather than vegetables in general; and
    <bullet> Women: Intakes tend to be low in whole grains, dark green 
leafy vegetables, deep yellow vegetables, cooked dry beans and peas, 
and fruit and milk groups.
    2. Infants and children younger than 2 years of age:
    Dietary practices of most concern to the IOM include the short 
duration of breastfeeding, excessive consumption of fruit juice, early 
introduction of solid food and cow's milk, low consumption of fruits 
(other than juice) and vegetables, and infrequent exposure to new 
foods.
    Exhibit A in this preamble, from the IOM Report,<SUP>(3)</SUP> 
summarizes nutrient and food group priorities that form the basis for 
the proposed revisions of the WIC food packages.

              Exhibit A.--Nutrient and Food Group Priorities for Proposed Revised WIC Food Packages
    [FROM ``WIC Food Packages; Time For A Change.'' The Institute of Medicine of the National Academies, The
                                    National Academies Press, 2005, page 72]
----------------------------------------------------------------------------------------------------------------
                                     Nutrients of                            Nutrients of
                                     concern with        Priority food       concern with        Nutrients and
      Participant  category            regard to            groups             regard to        ingredients to
                                  inadequate  intake                       excessive intake    limit in the diet
----------------------------------------------------------------------------------------------------------------
Infants, less than 1 y, non-      No need identified  na................  Decrease intakes
 breastfed.                        to increase                             of Zinc, Vitamin
                                   particular                              A, preformed,b
                                   nutrients;                              and Food energy.
                                   maintain iron
                                   intakes and
                                   continue to
                                   provide a
                                   balanced set of
                                   essential
                                   nutrients.a.
Infants, 6-11.9 mo, breastfed...  Increase intakes    na................
                                   of Iron and Zinc.
Children, 12-23.9 mo............  Increase intakes    Increase intakes    Decrease intakes
                                   of Iron,            of a variety of     of Zinc, Vitamin
                                   Potassium,          non-starchy         A, preformed, b
                                   Vitamin E, and      vegetables.         and Food energy.
                                   Fiber.

[[Page 44789]]

 
Children, 2-4.9 y...............  Increase intakes    Increase intakes    Decrease intakes    Limit intakes of
                                   of Iron,            of whole grains,    of Zinc, Sodium,    Saturated fat,
                                   Potassium,          and a variety of    Vitamin A,          Cholesterol, and
                                   Vitamin E, and      non-starchy         preformed,b and     Added sugars.
                                   Fiber.              vegetables.         Food energy.
Adolescent and adult women of     Give highest        Increase intakes    Decrease intakes
 reproductive age.                 priority to         of whole grains,    of Sodium, Food
                                   increasing          a variety of non-   energy, and Total
                                   intakes of          starchy             fat .
                                   Calcium, Iron,      vegetables,
                                   Magnesium,          fruit, and fat-
                                   Potassium,          reduced milk
                                   Vitamin E, and      products.
                                   Fiber.
                                  Also try to
                                   increase intakes
                                   of Vitamin A,
                                   Vitamin C,
                                   Vitamin D,
                                   Vitamin B6, and
                                   Folate].
----------------------------------------------------------------------------------------------------------------
 Note: na = not applicable; UL = Tolerable Upper Intake Level.
a Iron intakes are apparently adequate for non-breastfed infants, probably due in part to provision of iron-
  fortified formula in the current WIC food packages.
b The UL applies only to preformed vitamin A (i.e., retinol) ingested from the combined sources of animal-
  derived foods, fortified foods, and dietary supplements.(13)
c Trans fatty acids have not specifically been identified as a hazard for infants and children, and thus are
  shown in the table as nutrients to limit only in the diets of adolescents and adults.(8) However, the dietary
  guidance to limit trans fatty acids from processed foods in the diet is presumed to apply to all individuals
  regardless of age.

D. Identifying Foods To Reduce or Eliminate

    Exhibit B in this preamble reflects the IOM's recommendations and 
rationale regarding foods in the current WIC food packages to be 
deleted or reduced in the proposed revised food packages.

    Exhibit B.--Foods in the Current WIC Food Packages To Be Deleted or Reduced in the Proposed Food Packages
    [FROM ``WIC Food Packages; Time For A Change.'' The Institute of Medicine of the National Academies, The
                                    National Academies Press, 2005, page 82]
----------------------------------------------------------------------------------------------------------------
                 Food                               Change                              Rationale
----------------------------------------------------------------------------------------------------------------
Infant formula........................  Reduce maximum amounts for      The maximum amount provides
                                         partially breastfed infants.    approximately half the amount provided
                                                                         to fully formula fed infants to
                                                                         encourage the mother to breastfeed
                                                                         enough to provide at least half of the
                                                                         infant's nutritional needs and to make
                                                                         possible other improvements in the WIC
                                                                         food packages.
Infant formula........................  Reduce maximum amounts for      Since the food package for infants of
                                         fully formula fed infants       this age provides greater amounts of
                                         ages 6-11.9 mo of age.          nutrients through complementary foods,
                                                                         less formula is needed.
Juice.................................  Delete juice for infants 4-     Meet AAP recommendations to delay
                                         11.9 mo of age; reduce amount   introduction of juice for infants until
                                         of juice for children 1-4.9 y   after 6 mo of age; allow no more than 4-
                                         of age.                         6 fl oz/day for infants above the age
                                                                         of 6 mo.\(14)\ For infants age 6-11.9
                                                                         mo, fruit juice has no nutritional
                                                                         benefit over whole fruit.\(15)\
Milk..................................  Decrease maximum amounts        Amounts provided need not exceed amounts
                                         allowed for children and        recommended by DGA 2005.\(12)\
                                         adults.
Cheese................................  Reduce maximum amount allowed   Meets recommendation from DGA 2005
                                         in women's and children's       \(12)\ and recommendation from the IOM
                                         packages.                       to reduce saturated fat and cholesterol
                                                                         intake.\(8)\
Eggs..................................  Reduce maximum amount allowed.  Protein is no longer a priority
                                                                         nutrient. Reduction in amount provided
                                                                         is consistent with DGA 2005 \(12)\ and
                                                                         with recommendation from the IOM to
                                                                         reduce cholesterol intake.\(8)\
----------------------------------------------------------------------------------------------------------------
Note: AAP = American Academy of Pediatrics; IOM = Institute of Medicine.

    The full context of IOM's recommendations, including analyses, can 
be found in its report ``WIC Food Packages: Time for a Change'' \(3)\ 
available at http://www.fns.usda.gov/oane/menu/Published/WIC/WIC.htm.

E. The IOM's Recommendations in the Context of this Proposed Rule

    The IOM Report considered current recommendations for nutrient 
intakes and dietary patterns, the major diet-related health problems 
and risks faced by WIC's target population, the characteristics of the 
WIC Program, and the diversity of its participants. IOM's 
recommendations are intended to make the WIC food packages better meet 
the supplemental nutrition needs of participants and be more consistent

[[Page 44790]]

with national and professional dietary guidance and more consistent 
with nutrition education messages that promote healthful diets for the 
WIC population.
    The IOM Report has provided FNS with a sound scientific basis for 
proposing a new set of food packages for the WIC Program. Except for 
certain cost containment and administrative modifications found 
necessary by the Department to ensure cost neutrality, FNS is largely 
setting forth IOM's recommendations in this proposed rule for public 
comment. However, FNS is aware that these proposed revisions represent 
substantial changes for the WIC Program, its participants, and 
authorized vendors. Implementation procedures, staff and vendor 
training, and the nature of the nutrition education provided are likely 
to influence the effectiveness of the proposed revised food packages. 
Commenters are encouraged to provide input that would assist FNS in 
assessing the training and technical assistance needs of WIC State 
agencies and WIC-authorized vendors in implementing these proposed 
changes.

IV. Re-Design of WIC Food Packages To Enhance Breastfeeding Promotion 
and Support

A. Current Breastfeeding Promotion and Support in WIC

    WIC has historically promoted breastfeeding to all pregnant women 
as the optimal infant feeding choice, unless medically contraindicated. 
Current federal WIC regulations (Sec. Sec.  246.7(e)(1)(iii), 
246.7(g)(1)(iii), 246.10(c)(7), and 246.11(c)) contain provisions to 
encourage women to breastfeed and to provide appropriate nutritional 
support for breastfeeding participants, including:
    <bullet> Information provided to WIC mothers choosing to breastfeed 
through counseling and breastfeeding educational materials;
    <bullet> Follow-up support through peer counselors;
    <bullet> Eligibility to participate in WIC longer than non-
breastfeeding mothers;
    <bullet> Enhanced food package for mothers who exclusively 
breastfeed their infants; and
    <bullet> Breast pumps, breast shells or supplemental nursing 
systems to help support the initiation and continuation of 
breastfeeding.
    In part as a result of strengthened WIC breastfeeding policy and 
program activities in the early 1990's, WIC breastfeeding rates have 
increased at a faster rate than in the non-WIC population in the United 
States in the last decade. Despite these gains, WIC participants lag 
behind the general population in progress toward meeting the 
breastfeeding objectives of Healthy People 2010.<SUP>(16)</SUP>

B. The IOM's Recommendations To Promote and Support Breastfeeding Via 
the WIC Food Packages

    As described in the IOM Report, the proposed revised food packages 
for infants and women are designed to strengthen WIC's breastfeeding 
promotion efforts and provide additional incentives to assist mothers 
in making the decision to initiate and continue to breastfeed. 
Breastfeeding is the preferred method of infant feeding because of the 
nutritional value and health benefits of human 
milk.<SUP>(15, 16, 17)</SUP>
    The IOM's three-pronged approach to better promote and support 
breastfeeding through the WIC food packages is proposed. The proposed 
approach focuses on the market value of the package for the mother/
infant pair for the first year after birth, addresses differences in 
supplementary nutrition needs of breastfed and formula fed infants, and 
considers how to minimize early supplementation with infant formula 
through continued or increased efforts to promote and support the 
breastfeeding dyad.
    Proposed changes to help support breastfeeding address packages for 
the infant as well as the mother since both are eligible to receive a 
WIC food package. According to the IOM, the perceived dollar value, 
from the mother's point of view, of the current food packages provided 
for formula-feeding infant-mother pairs is substantially larger than 
that of the packages for the fully breastfeeding pairs, especially 
during the first six months postpartum. The IOM believes that 
attractive packages for fully breastfeeding mother/infant pairs might 
act as an incentive for breastfeeding. The proposed revised food 
packages increase the value of the contents of the food packages for 
the fully breastfeeding mother/infant pairs while decreasing the 
relative value to mothers of the food packages for partially 
breastfeeding pairs and fully formula-feeding pairs.
    As described by the IOM, the differences in the proposed packages 
for the mother-infant pairs are based on differences in nutritional 
needs. For example, fully breastfeeding women require additional 
calories per day during the first six months postpartum as well as 
higher levels of most vitamins and minerals. Thus, the package for 
fully breastfeeding women provides the most food energy and nutrients, 
and the package for fully formula-feeding women provides the least. 
Similarly, starting at age six months, the proposed package for fully 
breastfed infants includes commercial infant food meats to add a source 
of iron and zinc.
    Because early supplementation may contribute to the short duration 
of breastfeeding, only two infant feeding options were recommended 
initially after delivery--either full breastfeeding or full infant 
formula-feeding. The IOM recommended this approach because physiology 
provides a strong basis for avoiding supplemental formula. The amount 
of milk a breastfeeding woman produces depends directly on how often 
and how long she nurses. Providing supplemental formula to a new 
breastfeeding mother may interfere with her milk production and success 
at continued breastfeeding.
    These proposed food package changes, as recommended by the IOM, are 
intended to strengthen WIC's efforts to promote and support 
breastfeeding as the optimal infant feeding choice for WIC mothers.

V. Proposed Revisions to the WIC Food Packages

A. Use of Terms

    For the purposes of discussion, this proposed rule uses the 
following terms.
    WIC food categories refers to WIC formula (infant formula, exempt 
infant formula and WIC-eligible medical foods); milk and milk 
alternatives; eggs; peanut butter; legumes (dried beans and peas); 
infant cereal; breakfast cereal; canned fish; whole wheat bread or 
other whole grains; infant fruits and vegetables; infant meat; cheese; 
juice; and fruits and vegetables.
    Food type refers to specific foods within a category, e.g., skim 
milk and soy-based beverages are types of food in the milk and milk 
alternatives category.
    Physical form refers to the way in which the food is manufactured 
and/or packaged, e.g., dried, frozen; fresh; powder; liquid 
concentrate; fluid; evaporated, canned.

B. Revised Food Packages I and II for Infants

    As recommended by the IOM, this rule proposes the following changes 
in Food Packages I and II for infants (currently Sec.  246.10(c)(1) and 
(c)(2)).
    <bullet> Revise age specifications for assignment to infant food 
packages;
    <bullet> Establish 3 feeding options within each infant food 
package--fully breastfed, partially breastfed, or fully formula fed;
    <bullet> Revise maximum monthly infant formula allowances;
    <bullet> Add infant food fruits and vegetables in Food Package II;

[[Page 44791]]

    <bullet> Eliminate juice from both infant food packages;
    <bullet> Disallow provision of infant formula for breastfed infants 
during the first month after birth;
    <bullet> Disallow low iron infant formula;
    <bullet> Allow commercial infant food meat for fully breastfed 
infants in Food Package II; and
    <bullet> Reassign infants with a qualifying condition to proposed 
revised Food Package III--Participants With Qualifying Conditions--and 
authorize the issuance of exempt infant formulas only in Food Package 
III.
    The proposed revisions to Food Packages I and II for infants, as 
recommended by the IOM, are designed to better promote and support the 
establishment of successful long-term breastfeeding among women who 
choose that feeding method, address differences in nutritional needs of 
breastfed and formula fed infants, address developmental needs of 
infants, bring the infant food packages in line with current infant 
feeding practice guidelines from the AAP, and serve all participants 
with certain medical conditions under one food package to facilitate 
efficient management of medically fragile participants.
1. Reassignment of Infants With Qualifying Conditions to Food Package 
III
    Medically fragile infants currently receive either Food Package I 
(Sec.  246.10(c)(1)) for infants 0-3 months of age or Food Package II 
(Sec.  246.10(c)(2)) for infants 4-12 months of age. The WIC formulas 
authorized for issuance to infants in Food Packages I and II include 
infant formula, exempt infant formula and WIC-eligible medical foods.
    This rule proposes to revise Sec.  246.10(c)(1) through (c)(3) of 
Program regulations for Food Packages I, II and III in order to develop 
a restructured Food Package III that would serve all categories of 
participants, including infants, who have certain diagnosed qualifying 
conditions. The revised title for this food package would be Food 
Package III--Participants with Qualifying Conditions. The rationale for 
including infants in Food Package III is to consolidate all medically 
fragile individuals with qualifying conditions into one package to 
facilitate efficient management and tracking of the benefits and costs 
of providing supplemental foods to these participants. Refer to section 
V.P. of this preamble, Revisions to Food Package III and their effect 
on Food Packages I and II, for further information.
2. Change in Age Specifications for Assignment to Food Packages I and 
II
    As recommended by the IOM, this proposed rule would revise Food 
Package I to serve infants from birth through age 5 months and revise 
Food Package II to serve infants ages 6 months through 11 months. 
Currently, the assignment to Food Package II occurs at age four months.
3. Establishment of Infant Feeding Options
    a. First Month After Birth. To support the successful establishment 
of breastfeeding, the proposed rule, as recommended by the IOM, would 
establish two infant feeding options for the first month after birth, 
either full breastfeeding or full formula-feeding. That is, formula 
would not be provided for fully or partially breastfeeding infants 
during the first month after birth. If a breastfeeding mother requests 
formula during the first month, the Department would advise WIC staff 
to continue to provide breastfeeding support for the mother, with 
special attention to the provision of peer counseling, breast pumps, 
consultation with lactation experts, and referrals to medical providers 
when appropriate. Anticipatory guidance for new mothers during the 
prenatal period would be important for the success of this approach. As 
is currently the case, the breastfeeding mother could ask to have the 
infant assigned to full formula feeding option at any time and WIC 
staff would reassign the infant's and the mother's food package 
accordingly.
    b. Second Month After Birth Through Month Eleven. Beginning the 
second month after birth, a third infant feeding option is proposed--
partial breastfeeding. As recommended by the IOM, this rule proposes 
that, for the purposes of assigning WIC food packages, a partially 
breastfed infant be defined as an infant who is breastfed but also 
receives formula from the WIC Program in an amount not to exceed 
approximately half the amount of formula allowed for a fully formula 
fed infant. Currently, there is not a food package for partially 
breastfed infants. Instead, breastfeeding infants may receive up to the 
maximum amount of infant formula authorized in Food Packages I and II. 
State agencies are currently encouraged to tailor the amount of infant 
formula provided based on the assessed needs of the breastfeeding 
infant. Under this proposal, breastfeeding mothers who request more 
than the amount of formula allowed for partially breastfed infants 
could receive up to the maximum amount of formula for the fully formula 
fed infant. In such instances, the infant's feeding option would be 
changed from partially breastfed to fully formula fed and the mother's 
food package adjusted accordingly.
4. Introduction of Complementary Foods at 6 Months of Age
    As recommended by the IOM, the proposed Food Package I would 
provide only iron-fortified infant formula for partially breastfed and 
fully formula fed infants until an infant is six months old. As cited 
by the IOM, this change is consistent with recent position statements 
from the American Academy of Pediatrics emphasizing that the 
introduction of complementary feedings before six months of age only 
substitutes foods that lack the protective components of human milk and 
that exclusive breastfeeding should be used as the reference or 
normative model for feeding infants. Six months is the age at which 
most healthy infants are developmentally ready to handle complementary 
foods. Infants do not need complementary foods for nutritional reasons 
at younger ages--either breastmilk or iron-fortified infant formula 
would entirely meet the nutritional needs of most infants. Providing 
complementary foods beginning at age six months is consistent with 
common guidelines for clinical practice in the field of pediatrics.
5. Disallowance of Low-Iron Infant Formula in Food Packages I, II and 
III
    It is well documented that iron-fortified infant formulas play an 
essential role in providing iron in the diets of non-breastfed infants. 
According to AAP, there are no known medical conditions warranting the 
use of a low-iron infant formula during infancy. In addition, the IOM 
recommends that the WIC Program continue to provide iron-fortified 
infant formula to prevent iron-deficiency anemia in infants. This 
proposed rule would revise WIC food package regulations to prohibit the 
issuance of all low-iron infant formulas to any infants.
6. Proposed Revisions and Maximum Monthly Allowances in Food Package 
I--Infants Less Than 6 Months of Age
    As recommended by the IOM, under this proposed rule, Food Package I 
would provide iron-fortified infant formula only. Infant formula would 
continue to be authorized in liquid concentrate, powder, and ready-to-
feed (RTF) physical forms. However, powder

[[Page 44792]]

infant formula would be recommended in Food Package I for partially 
breastfed infants ages one month through three months due to its longer 
shelf life, less waste and capability to mix the small amounts needed 
for the partially breastfed infant. Powder and RTF physical forms are 
substitutes or alternatives to liquid concentrate and may be 
substituted at amounts that provide the approximate number of 
reconstituted fluid ounces as the liquid concentrate form of the same 
infant formula. Currently, in both Food Packages I and II, infant 
formula allowances are expressed in terms of fluid ounces of liquid 
concentrate, pounds of powder, and fluid ounces of RTF. WIC State 
agencies have suggested to FNS that maximum monthly formula allowances 
for liquid concentrate and powder physical forms be expressed in terms 
of reconstituted fluid ounces. The Infant Formula Act of 1980 and its 
amendments standardized the nutrient content of infant formulas 
ensuring that infant formulas distributed in the United States contain 
certain minimum levels of calories and nutrients per reconstituted 
fluid ounce. Therefore, the Department is proposing to express maximum 
monthly allowances of infant formula of liquid concentrate and powder 
physical forms in reconstituted fluid ounces according to the mixing 
directions on the container for preparation for consumption. RTF liquid 
will continue to be expressed in fluid ounces.
    a. Liquid Concentrate Infant Formula. All liquid concentrate infant 
formula currently marketed is packaged in 13 fluid-ounce cans, is 
designed to be mixed with an equal quantity of water (i.e., has a 1:1 
dilution ratio) and provides the standard dilution of 20 kilocalories 
per fluid ounce reconstituted. Thus, 403 fluid ounces of liquid 
concentrate formula reconstitutes to 806 fluid ounces. The proposed 
maximum monthly formula allowances are evenly divisible by the 13-
fluid-ounce cans of liquid concentrate infant formula.
    b. Powder Infant Formula. The reconstituted yields for powder 
formulas vary according to types and brands of products. Powder milk-
based infant formulas designed for healthy, full-term infants have 
among the highest yields when compared to soy-based infant formulas and 
exempt infant formulas. This proposed rule would revise the 
substitution rate for powder infant formula since the current 
substitution rate of 8 pounds powder per 403 fluid ounces liquid 
concentrate is no longer appropriate and could result in providing 
excess amounts of formula in some cases. The IOM recommended rounding 
to whole cans in order to reach recommended amounts of infant formula. 
Therefore, the proposed maximum monthly allowances of liquid 
concentrate and RTF are evenly divisible by the whole can sizes of 
infant formula currently available. However, none of the whole 
container sizes of powder infant formula commonly issued by State 
agencies would provide the same number of reconstituted fluid ounces as 
the liquid concentrate form of the same product in whole containers. 
The Department recognizes that powder is the most economical form for 
State agencies to issue. Therefore, in order to provide a nutritional 
benefit amount recommended by the IOM and to provide administrative 
flexibility for the issuance of infant formula, this proposal would 
authorize an amount of powder infant formula that would provide at 
least the maximum monthly allowance as the reconstituted liquid 
concentrate form of the same infant formula in the same food package 
and infant feeding option (fully formula fed or partially breastfed). 
State agencies would be required to provide at least the number of 
fluid ounces as the same reconstituted liquid concentrate infant 
formula up to the maximum monthly allowance for reconstituted powder 
infant formula. This would ensure that participants receive comparable 
nutritional benefit no matter which physical form of infant formula 
they receive. The Department recognizes that participants issued powder 
infant formula may receive a slightly higher amount of reconstituted 
fluid ounces than the other forms due to the currently available 
container sizes and reconstitution rates.
    c. RTF Infant Formula. Proposed Sec.  246.10(e)(1)(iv) lists the 
reasons that RTF formula may be authorized as a substitute for liquid 
concentrate. The maximum monthly allowance of RTF formula provides 
about the same number of fluid ounces as the reconstituted liquid 
concentrate form of the same infant formula. The proposed maximum 
monthly allowances are evenly divisible by the 8 and 32-ounce whole 
containers of RTF infant formula.
    d. Maximum Monthly Allowances of Infant Formula. As recommended by 
the IOM, the maximum monthly allowance of infant formula would depend 
on the feeding option, physical form of infant formula provided 
(concentrated, powder, or ready-to-use), and the age of the infant, as 
summarized in Exhibit C of this preamble.
    <bullet> Fully formula fed infants would receive the equivalent of 
about 806 fluid ounces reconstituted infant formula per month from 
birth through 3 months of age; thus, Food Package I is unchanged for 
fully formula fed infants from birth through 3 months of age. Fully 
formula fed infants 4 months through 5 months of age would receive the 
equivalent of about 884 fluid ounces of reconstituted infant formula 
per month;
    <bullet> Juice and infant cereal would no longer be provided for 
infants ages 4 months through 5 months. Compared with the current 
package, the amount of infant formula is increased slightly for infants 
ages 4 months through 5 months to compensate in part for the decrease 
in nutrients and calories that results from the omission of juice and 
infant cereal;
    <bullet> Partially breastfed infants ages 1 month through 3 months 
would receive the equivalent of about 364 fluid ounces reconstituted 
infant formula per month. Powder infant formula is recommended until 
the partially breastfed infants reaches four months of age due to its 
longer shelf life and to minimize waste; and
    <bullet> Partially breastfed infants 4 months through 5 months of 
age would receive the equivalent of about 442 fluid ounces 
reconstituted infant formula per month.
    Since infant formula is supplemental to breast milk for partially 
breastfed infants, the maximum allowance of infant formula for 
partially breastfed infants is approximately 50 percent of the maximum 
allowance for fully formula fed infants. According to the IOM, this 
approach is designed to encourage mothers who are using the combination 
feeding method (feeding both breast milk and infant formula) to aim for 
a greater contribution of breast milk to the infant's intake.
    By definition, fully breastfed infants would not receive infant 
formula from the WIC Program. Instead, they would receive the benefit 
of breast milk, which provides the nutrients they need and a wide array 
of protective and health-promoting components in a safe form.

[[Page 44793]]



                Exhibit C.--Maximum Monthly Allowances for Proposed Food Package I for Infants Ages Birth to 6 Months, by Feeding Option
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Fully breastfed              Partially breastfed infants                     Fully formula fed infants
                                             infants        --------------------------------------------------------------------------------------------
              WIC food              ------------------------
                                       0 through 5 months      1 through 3 months      4 through 5 months     0 through 3 months     4 through 5 months
--------------------------------------------------------------------------------------------------------------------------------------------------------
Infant Formula.....................  NA....................  364 fl oz               442 fl. oz.            806 fl. oz.            884 fl. oz.
                                                              reconstituted liquid    reconstituted liquid   reconstituted liquid   reconstituted liquid
                                                              concentrate *.          concentrate.           concentrate.           concentrate.
--------------------------------------------------------------------------------------------------------------------------------------------------------
NA = not applicable.
*The maximum monthly allowance is specified in the liquid concentrate form; however, powder and RTF are allowable substitutes and the powder form is
  recommended for partially breastfed infants, ages 1 through 3 months of age.

7. Proposed Revisions and Maximum Monthly Allowances in Food Package 
II--Infants 6 Through 11 Months of Age
    As recommended by the IOM, this proposed rule would revise Food 
Package II to include the following changes:
    <bullet> Food Package II would be provided to infants from 6 
through 11 months of age. This package would differ substantially by 
infant feeding option, as shown in Exhibit D in this preamble. Infant 
formula would be decreased for fully formula fed infants to 624 fluid 
ounces of reconstituted liquid concentrate infant formula per month and 
for partially breastfed infants to 312 fluid ounces of reconstituted 
liquid concentrate infant formula per month;
    <bullet> Infant foods would be added to the food package to 
encourage healthy dietary patterns; and
    <bullet> Juice would be omitted to help make possible the addition 
of infant food fruits and vegetables.
    The amount of infant cereal in the package would be unchanged. The 
proposed decrease in the maximum allowance of infant formula is 
consistent with meeting nutritional requirements. The amount of infant 
formula proposed for partially breastfed infants reflects and 
encourages a greater contribution of breast milk to the infant's diet. 
Decreasing the maximum amount of infant formula and omitting juice 
makes possible needed enhancements. For example, the addition of infant 
food fruits and vegetables in the second six months of infancy 
introduces infants to a variety of nutritious foods at an age when 
almost all infants are developmentally ready for semisolid foods. The 
infant food meat for fully breastfed infants provides needed iron and 
zinc in forms with high bioavailability, and the larger quantities of 
infant food for fully breastfed infants may encourage some mothers to 
continue fully breastfeeding.
    Long-standing WIC policy has not authorized infant cereals that 
included fruit or infant formula ingredients. However, this restriction 
was never incorporated into regulatory language. This proposed rule 
would clarify in WIC regulations that infant cereals with the added 
ingredients of infant formula, milk, fruit, or other non-cereal 
ingredients are not authorized based on recommendations of the AAP and 
cost concerns. The AAP recommends that single ingredient foods be 
introduced one at a time in an effort to isolate food sensitivities and 
possibly avert the development of food intolerances. Although cereal/
fruit combinations may be appropriate once the risk of food sensitivity 
has diminished, these combination foods are more expensive than regular 
infant cereal. In reference to cereal/formula combinations, since 
infant formula is already provided in the food packages, it is not 
necessary to provide additional infant formula in combination with 
infant cereal. In addition, authorized infant cereals must continue to 
contain a minimum of 45 milligrams of iron per 100 grams of dry cereal.
    a. Authorized Infant Foods.
    <bullet> Any variety of commercial infant food (fruit or vegetable) 
without added sugars, starches, or salt (i.e., sodium). Texture may 
range from strained through diced; and
    <bullet> Any variety, single ingredient, of commercial infant food 
meat with broth or with gravy. Texture may range from pureed through 
diced.
    b. Maximum Monthly Allowance of Infant Foods (Fruits, Vegetables, 
and Meats) for Infant 6 through 11 months of age:
    <bullet> For fully formula fed infants. 128 ounces of fruits and 
vegetables (e.g., 32 4-ounce jars);
    <bullet> For partially breastfed infants. 128 ounces of fruits and 
vegetables (e.g., 32 4-ounce jars);
    <bullet> For fully breastfed infants. 256 ounces of fruits and 
vegetables (e.g., 64 4-ounce jars); and
    <bullet> For fully breastfed infants. 77.5 ounces of infant food 
meat (31 2.5-ounce jars.
    Fresh banana may replace up to 16 ounces of infant food fruit at a 
rate of 1 pound of bananas per 8 ounces of infant food fruit. Fresh 
bananas for infants in Food Package II would be issued via the standard 
food instrument system.
    As cited by the IOM Report, the rationale for providing a greater 
quantity of infant food fruits and vegetables in the package for fully 
breastfed infants is to provide added nutritional value to improve the 
parity with other infant packages, to provide sufficient fruits and 
vegetables to mix with infant food meats to increase the palatability 
of strained meats for older infants, and to encourage prolonged 
breastfeeding by adding to the convenience and monetary value of the 
food packages of the fully breastfeeding mother/infant pair.

   Exhibit D.--Maximum Monthly Allowances for Proposed Food Package II for Infants Ages 6 Months to 1 Year, by
                                                 Feeding Option
----------------------------------------------------------------------------------------------------------------
                                                                  Partially breastfed       Fully formula fed
                                       Fully breastfed infants          infants                  infants
----------------------------------------------------------------------------------------------------------------
WIC Formula
    Infant Formula...................  .......................  312 fluid ounces of      624 fluid ounces of
                                                                 reconstituted liquid     reconstituted liquid
                                                                 concentrate formula.     concentrate formula.
WIC Food

[[Page 44794]]

 
    Infant food (Fruits and            256 ounces of infant     128 ounces of infant     128 of ounces infant
     Vegetables).                       food fruits and          food fruits and          food fruits and
                                        vegetables.              vegetables.              vegetables.
    Infant food (Cereal).............  24 ounces of iron-       24 ounces of iron-       24 ounces of iron-
                                        fortified infant         fortified infant         fortified infant
                                        cereal.                  cereal.                  cereal.
    Infant food (Meat)...............  77.5 ounces of infant
                                        food meat.
----------------------------------------------------------------------------------------------------------------

    c. Rounding Up of Infant Foods.
    <bullet> Infant Formula
    Public Law 108-265, the Child Nutrition and WIC Reauthorization Act 
of 2004, enacted on June 30, 2004, contains a provision that allows a 
State agency to round up to the next whole can of infant formula to 
allow all participants to receive the full-authorized nutritional 
benefit specified by regulation. This provision only applies to infant 
formula (not exempt infant formula or WIC-eligible medical foods) 
issued as a result from a solicitation bid on or after October 1, 2004. 
This proposal reflects this authority by calculating and dispersing the 
infant formula over the timeframe of the food package category and 
infant feeding option (fully formula fed or partially breastfed). This 
proposal would identify the full nutritional benefit (FNB) provided by 
infant formula as the maximum monthly allowance of reconstituted fluid 
ounces of liquid concentrate for the food package category and infant 
feeding option. This proposal would require State agencies to issue at 
least the FNB but not more than the maximum monthly allowance for the 
food package category and infant feeding option. This proposal would 
require State agencies that use the rounding up option to issue infant 
formula in whole containers of the same size for administrative ease 
and to use the methodology described herein to calculate the number of 
cans of infant formula for issuance to participants.
    This proposal would require calculating and dispersing the infant 
formula over the timeframe of the food package category and infant 
feeding option (fully formula fed or partially breastfed). For example, 
a fully formula fed infant who participates in WIC from birth through 
eleven months of age would be issued infant formula in amounts provided 
by Food Package IA-FF from birth through 3 months of age, issued infant 
formula in amounts provided by Food Package IB-FF from four through 
five months of age, and issued infant formula in amounts provided by 
Food Package II-FF from 6 through eleven months of age. The timeframe 
or the total number of months that the participant will receive each 
food package is shown in Exhibit E.

                   Exhibit E.--Food Package Timeframe
------------------------------------------------------------------------
               Food package                      Maximum time frame
------------------------------------------------------------------------
I A-FF....................................  4 months.
I B-FF....................................  2 months.
II-FF.....................................  6 months.
------------------------------------------------------------------------

    Exhibit F describes the methodology that State agencies must use to 
calculate the amount of infant formula dispersed over the timeframe of 
the food package category and infant feeding option, when using the 
rounding up option.

           Exhibit F.--Rounding Up Infant Formula Methodology
------------------------------------------------------------------------
 
------------------------------------------------------------------------
1....................  Multiply FNB by number of months in food package
                        = Total amount of infant formula.
2....................  Determine yield (reconstituted fluid ounces)
                        provided by the container issued by the State
                        agency.
3....................  Divide total amount of infant formula by the
                        container yield = total number of containers to
                        issue.
4....................  Round up to the next whole same size container if
                        the number of containers is not a whole number
                        (e.g. 4.3 containers would round up to 5
                        containers).
5....................  Distribute the total containers across the food
                        package timeframe as evenly as possible (e.g.
                        2,1,2,1).
------------------------------------------------------------------------

    For example, a fully formula fed infant participant born January 1, 
2006, would receive Food Package IA--FF issuance amount rounded over a 
4-month timeframe multiplied by the FNB (806 fluid ounces 
reconstituted) to equal 3224 fluid ounces reconstituted total amount of 
infant formula for the 4-month timeframe. The total amount, 3224 fluid 
ounces reconstituted, would then be divided by the yield of fluid 
ounces reconstituted provided by the authorized container to determine 
the total number of containers needed to provide 3224 fluid ounces 
reconstituted. The reconstituted fluid ounce yield provided by 
container varies depending on container size and the reconstitution 
rate. Currently, Enfamil Lipil infant formula in a 12.9 ounce can 
reconstitutes to about 94 fluid ounces per container, Similac Advance 
infant formula in a 12.9 ounce can reconstitutes to about 96 fluid 
ounces per container, and Nestle Good Start Supreme infant formula in a 
12.0 ounce can reconstitutes to about 87 fluid ounces per container. 
Therefore, the 3224 fluid ounces would be divided by either 94, 96 or 
87 respectively, for a rounded up total of 35 12.9 ounce cans of 
Enfamil Lipil, or 34 12.9 ounce cans of Similac Advance, or 38 cans of 
12 ounce cans Nestle Good Start Supreme. Using Enfamil Lipil as the 
example, the 35 cans would be dispersed over 4 months as evenly as 
possible, such as 9 cans the first month, 8 cans the second month, and 
9 cans each for months 3 and 4.
    Exhibit G shows the number of powder infant formula containers that 
would be issued to an infant participant born January 1, 2006, for the 
fully formula fed infant food packages, using the rounding up 
methodology, for Enfamil Lipil, Similac Advance, or Nestle Good Start 
Supreme infant formulas for a 1-year certification timeframe.

[[Page 44795]]



Exhibit G.--Number of Powder Infant Formula Containers Issued to an Infant Participant Born 01/01/2006, for Food
                            Packages I & II Fully Formula Fed (FF) Using Rounding Up
----------------------------------------------------------------------------------------------------------------
                                                                                                         Nestle's
                                                                    Mead Johnson's     Ross' Similac    Good Start
                                                                     Enfamil Lipil   Advance  (number    Supreme
Approximate reconstitution amount per container                     (number of 12.9     of 12.9 oz.     (number
                                                                    oz. containers)   containers)  96    12.0 oz.
                                                                      94 fl. oz.          fl. oz.      containers)
                                                                                                        87 fl. oz.
----------------------------------------------------------------------------------------------------- -------------
Food Package I-FF A (FNB = 806 fl. oz. per
 month):
    January, age 0 months......................               9.0               9.0              10.0
    February, age 1 month......................               8.0               9.0              10.0
    March, age 2 months........................               9.0               8.0               9.0
    April, age 3 months........................               9.0               8.0               9.0
                                                ----------------------------------------------------------------
        Food Package I-FF A subtotal...........              35                34                38
                                                ================================================================
Food Package I-FF B (FNB = 884 fl. oz. per
 month):
    May, age 4 months..........................              10.0              10.0              11.0
    June, age 5 months.........................               9.0               9.0              10.0
                                                ----------------------------------------------------------------
        Food Package I-FF B subtotal...........              19                19                21
                                                ================================================================
Food Package II-FF (FNB = 624 fl. oz. per
 month):
    July, age 6 months.........................               7.0               7.0               8.0
    August, age 7 months.......................               6.0               6.0               7.0
    September, age 8 months....................               7.0               7.0               7.0
    October, age 9 months......................               6.0               6.0               8.0
    November, age 10 months....................               7.0               7.0               7.0
    December, age 11 months....................               7.0               6.0               7.0
                                                ----------------------------------------------------------------
        Food Package II-FF subtotal............              40                39                44
                                                ================================================================
        Infant package total of formula issued.              94                92               103
----------------------------------------------------------------------------------------------------------------

    <bullet> Infant Foods
    This proposed rule would allow State agencies to round up and 
disperse whole containers of infant foods (infant cereal, infant fruit 
and vegetables, and infant meat) over the timeframe of the food package 
category and infant feeding option (fully formula fed, fully breastfed 
or partially breastfed) to allow all participants to receive the 
maximum monthly allowance of infant foods as specified in regulations. 
This is consistent with the authority allowing State agencies to round 
up infant formula. Rounding up of infant foods provides administrative 
flexibility to State agencies since container sizes of infant foods 
vary and rounding ensures that infants would receive the full 
nutritional benefit recommended by the IOM.
    This proposal would require State agencies that use the rounding up 
option for infant foods to use the same methodology proposed to 
calculate and disperse infant formula over the timeframe of the food 
package category and infant feeding option. Exhibit H describes the 
methodology that State agencies must use to calculate and disperse 
infant foods over the timeframe of the food package category and infant 
feeding option.

             Exhibit H.--Rounding Up Infant Food Methodology
------------------------------------------------------------------------
 
------------------------------------------------------------------------
1....................  Multiply maximum monthly allowance by number of
                        months in food package = Total amount of infant
                        food in ounces.
2....................  Determine the container size (e.g., ounces) of
                        infant food issued by the State agency.
3....................  Divide total amount of infant food by the
                        container size = total number of containers to
                        issue.
4....................  Round up to the next whole same size container if
                        the number of containers is not a whole number
                        (e.g. 54.3 containers would round up to 55
                        containers).
5....................  Distribute the total containers across the food
                        package timeframe as evenly as possible (e.g.10,
                        9, 9, 9, 9, 9).
------------------------------------------------------------------------

    For example, a fully formula fed infant participant born January 1, 
2006, would receive Food Package II from July through December, for a 
6-month total timeframe. The infant may receive 24 ounces infant cereal 
per month, multiplied by 6 months, to equal a total of 144 ounces 
infant cereal. Currently, authorized infant cereal is packaged in 8- 
and 16-ounce containers. Therefore, either 18 8-ounce containers or 9 
16-ounce containers of infant cereal would be provided over the food 
package timeframe. The 18 8-ounce containers can be divided equally by 
the 6-month food package timeframe and results in 3 8-ounce containers 
of infant cereal issued each month. The 9 16-ounce containers must be 
dispersed across the food package timeframe as evenly as possible, for 
example, two containers per month issued for three months and one 
container per month issued for three months on alternating months (e.g. 
2, 1, 2, 1, 2, 1) to equal the 9 total containers.
    The Department is seeking comments on the proposed methodology to 
round up and disperse infant formula and infant foods.
    d. Department Soliciting Input on changes to infant feeding 
packages. The proposed infant feeding options represent a dramatic 
change in infant food package issuance procedures. The procedural 
changes affect not only assignment to one of three feeding options but 
impact the delivery of other nutrition services as well. We are aware

[[Page 44796]]

that WIC State agencies will experience challenges in staff training, 
assessment of the mother-infant dyad, programming of management 
information systems, and the provision of participant nutrition 
education. Successful implementation of the infant feeding options may 
require enhanced nutrition education, peer counseling, and referral 
activities to support the successful establishment of breastfeeding.
    The Department is soliciting input on the potential impacts of the 
proposed changes to Food Package I and II, and any comments or 
suggestions on alternative options for FNS to consider. Specifically, 
FNS would like comments regarding the following:
    <bullet> The three infant feeding options;
    <bullet> Impact of proposed changes on breastfeeding rates;
    <bullet> Staff training and building support for proposed changes 
among WIC staff;
    <bullet> The expression of monthly maximum amounts of infant 
formula in reconstituted fluid ounces;
    <bullet> The methodology used to round up infant formula and infant 
foods;
    <bullet> Participant nutrition education; and
    <bullet> Administrative feasibility.

C. Overview of Revised Food Package IV for Children

    Currently there is one package for children without special dietary 
needs, Food Package IV for children ages 1 to 5 years (currently Sec.  
246.10(c)(4)). This proposed rule would continue to provide Food 
Package IV to children ages 1 through 4 years. However, as recommended 
by the IOM, only whole milk would be authorized for children age one 
year (12 through 23 months), and only milk with a fat content not to 
exceed two percent would be authorized for children 2 years of age and 
older. Compared with the current package, the revised food package, as 
recommended by the IOM, would include smaller amounts of milk and juice 
but would add fruits, vegetables, and whole grains. Cheese would 
continue to be allowed as a partial substitute for milk; however, the 
maximum cheese substitution would be reduced from current WIC 
regulations. As recommended by the IOM, with proper medical 
documentation, soy-based beverage and tofu would be authorized as 
substitutes for milk. As cited by the IOM Report, these changes would 
make the entire food package for children more consistent with the DGA 
2005 <SUP>(12)</SUP> and help ensure a more balanced nutrient intake 
for WIC participants.

D. Overview of Revised Food Packages V, VI, and VII for Women

    Currently, there are three food packages for women without special 
dietary needs. These are Food Package V for pregnant and breastfeeding 
women; Food Package VI for nonbreastfeeding postpartum women; and Food 
Package VII for breastfeeding women who do not receive infant formula 
for their infants from the WIC Program (currently Sec.  246.10(c)(5) 
through (c)(7)). As recommended by the IOM, this proposed rule would 
retain these food packages, but as discussed in section V.B. of this 
preamble, would add for the purposes of assigning a food package, a 
definition of partially breastfeeding. Currently, a woman is certified 
to be eligible for the Program as a breastfeeding woman if she is 
breastfeeding on the average of at least once a day and meets other WIC 
eligibility criteria. Under this proposed rule, a woman would continue 
to be certified eligible as a breastfeeding woman if she is 
breastfeeding on the average of at least once a day. However, whether 
or not she receives a food package and which food package she is 
assigned would be based on the amount of infant formula she requests 
and receives from WIC for her infant and the age of the infant.
    Under this proposed rule, Food Package V would be provided for 
pregnant and partially breastfeeding woman (up to 1 year postpartum) 
whose infants participate in the WIC Program and receive infant formula 
in amounts that do not exceed the maximum allowances for the partially-
breastfed infant food packages, as appropriate for the age of the 
infant.
    Food Package VI would continue to be provided for non-breastfeeding 
postpartum women (up to 6 months). Food Package VI would also be 
provided to partially breastfeeding postpartum women (up to 6 months) 
whose infants are receiving more than the maximum allowances for the 
partially breastfed infant food package, as appropriate for the age of 
the infant. In terms of the variety of foods and amounts offered, Food 
Package V for partially breastfeeding women is more desirable than Food 
Package VI. Food Package V provides whole wheat bread or other whole 
grains, peanut butter in addition to legumes, and more milk and juice 
than Food Package VI. Food Package VI does not provide whole wheat 
bread or other whole grains, and provides the option of peanut butter 
or legumes, but not both. The incentive value of Food Package V may 
encourage a higher level of breastfeeding among mothers who both 
breastfeed and formula-feed their infants.
    Food Package VII would continue to be provided to fully 
breastfeeding women whose infants do not receive infant formula from 
the WIC Program. In addition, based on estimates of increased nutrient 
and energy needs of women pregnant with more than one fetus, these 
women, as recommended by the IOM, would now receive Food Package VII 
rather than Food Package V. Women who are fully breastfeeding multiple 
infants would be prescribed 1.5 times the maximum amounts of Food 
Package VII to cover their higher needs for energy and nutrients. Women 
partially breastfeeding multiple infants would receive also Food 
Package VII. Further, all breastfeeding women would be prescribed Food 
Package VII during the first month postpartum because their infants 
would not be receiving any infant formula from the WIC Program.
    As recommended by the IOM, under this proposed rule Food Package 
VII, for fully breastfeeding women, would provide the greatest variety 
and quantity of food; and Food Package VI for postpartum women, would 
provide the least. Compared with the current food packages, all 3 
revised food packages for women would provide smaller amounts of milk 
products, eggs, and juice; the same amount of iron-fortified cereal; 
add a requirement that cereals be whole grain; and would add fruits and 
vegetables. Whole grain bread or other whole grains would be added to 
Food Packages V and VII. The food packages for women would no longer 
authorize whole milk, and would allow several alternatives to cow's 
milk to address calcium needs. Canned light tuna would continue to be 
allowed in Food Package VII; canned salmon and sardines would be 
authorized as substitutes for light tuna.
    Women greater than 6 months postpartum whose infants do not meet 
the definition of a partially breastfed infant. The IOM recommends that 
a partially breastfeeding woman who requests, after the sixth month 
postpartum, more than the maximum amount of formula for a partially 
breastfed infant, no longer be certified for the WIC Program. However, 
FNS has determined that this approach is incongruous with the 
definition of breastfeeding in WIC regulations at Sec.  246.2--the 
practice of feeding a mother's breastmilk to her infant(s) on the 
average of at least once per day. In WIC, this definition is used to 
determine Program eligibility, and allows all breastfeeding women, 
regardless of feeding pattern, to participate in the WIC Program, be

[[Page 44797]]

counted as a breastfeeding woman, and receive supplemental foods, 
breastfeeding promotion and support, and referrals to health care. The 
definition recognizes that any breastfeeding, even if only on an 
average of once a day, provides some immunological and nutritional 
benefits that would otherwise not be provided to an infant.
    As such, rather than adopt IOM's recommendation in its entirety, 
FNS proposes to revise the definition for WIC ``participation'' at 
Sec.  246.2. The definition would now include the number of 
breastfeeding women who receive no supplemental foods or food 
instruments but whose breastfed infant(s) receives supplemental food or 
food instruments. Counting these women, although they are not receiving 
a food package, is consistent with the current practice of counting the 
infants of exclusively breastfeeding women. Therefore, a partially 
breastfeeding woman who requests, after the sixth month postpartum, 
more than the maximum amount of formula for a partially breastfed 
infant would no longer receive a food package but would continue to 
count as a WIC participant and receive other Program benefits 
(nutrition education, including breastfeeding promotion and support, 
and referrals to health and social services). This would serve to meet 
the intent of IOM's recommendations within the context of WIC 
regulations.

E. Inclusion of Fruits and Vegetables in Food Packages III through VII

    As recommended by the IOM, this proposed rule would add a variety 
of fruits and vegetables to Food Packages III, IV, V, VI, and VII 
(currently Sec.  246.10(c)(3) through (c)(7)). The IOM Report states 
that the addition of fruits and vegetables to WIC food packages is 
consistent with a major recommendation of the DGA 2005 
<SUP>(12)</SUP>--namely, to increase daily intake of fruits and 
vegetables. The IOM's basis for recommending the addition of fruits and 
vegetables was the substantial body of literature that supports the 
association of fruit and vegetable consumption with reduced risk of 
chronic disease including stroke and perhaps other cardiovascular 
diseases, some cancers, and type 2 diabetes. Evidence also suggests 
that increased fruit and vegetable consumption may be useful in 
programs to promote and sustain loss of body weight in overweight 
individuals. The IOM and FNS received many public comments from health 
professionals, consumers, WIC Program staff, WIC participants, and 
others, advocating for the inclusion of fruits and vegetables in the 
WIC food packages.
1. Authorized Fruits and Vegetables
    As recommended by the IOM, this proposed rule would include fresh 
and processed (canned, frozen, and dried) fruits and vegetables. Fresh, 
canned, and frozen fruits and vegetables would be authorized for 
children and women in Food Packages III through VII. Dried fruits and 
dried vegetables would be authorized for women in Food Packages III and 
V through VII. As recommended by the IOM, dried fruit and dried 
vegetables would not be authorized for children in Food Packages III or 
IV to reduce the risk of choking.
    As recommended by the IOM, to improve the consumption of fresh 
fruits and vegetables and the appeal of this option, especially for 
people of different cultural backgrounds, this proposed rule would 
place minimal restrictions on participant choice of fresh produce. 
Because a fresh produce option might not be practical in some 
situations, a processed option and a combined fresh and processed 
option for fruits and vegetables are also proposed.
    As recommended by the IOM, for children and adults in Food Packages 
III-VII, different physical forms of fruit and vegetable offerings are 
proposed, as follows.
    a. Fresh fruits and vegetables.
    <bullet> Any variety of fresh whole or cut fruit without added 
sugars; and
    <bullet> Any variety of fresh whole or cut vegetable, except white 
potatoes, without added sugars, fats, or oils.
    b. Processed fruits and vegetables (canned, frozen, and dried).
    <bullet> Any variety of canned fruits, including applesauce; juice 
pack or water pack without added sugars, fats, oils, or salt (i.e., 
sodium);
    <bullet> Any variety of frozen fruits without added sugars;
    <bullet> Any dried fruit or vegetable without added sugars, fats, 
oils, or salt (i.e., sodium); and
    <bullet> Any variety of canned or frozen vegetables, except white 
potatoes (orange yams and sweet potatoes are allowed), without added 
sugars, fats, oils.
2. Restrictions on Authorized Fruits and Vegetables
    This proposed rule would not authorize:
    <bullet> White potatoes (orange yams and sweet potatoes are 
allowed);
    <bullet> Catsup or other condiments;
    <bullet> Pickled vegetables and olives; or
    <bullet> Soups.
    IOM's recommended restriction on white potatoes is based on the 
amounts suggested in DGA 2005 <SUP>(12)</SUP> for consumption of 
starchy vegetables; food intake data indicating that consumption of 
starchy vegetables meets or exceeds these suggested amounts; and food 
intake data showing that white potatoes are the most widely used 
vegetable.
    Although not addressed by IOM, the Department is proposing further 
restrictions on fruits and vegetables; and therefore this proposal 
would also not authorize:
    <bullet> Herbs or spices;
    <bullet> Edible blossoms and flowers, e.g., squash blossoms 
(broccoli, cauliflower and artichokes are allowed);
    <bullet> Creamed or sauced vegetables;
    <bullet> Vegetable-grain (pasta or rice) mixtures;
    <bullet> Fruit-nut mixtures;
    <bullet> Breaded vegetables;
    <bullet> Fruits and vegetables for purchase on salad bars;
    <bullet> Ornamental and decorative fruits and vegetables such as 
chili peppers on a string, garlic on a string; gourds, painted 
pumpkins;
    <bullet> Fruit baskets and party vegetable trays;
    <bullet> Fruit leathers and fruit roll-ups;
    <bullet> Peanuts;
    <bullet> Juices (juices are provided as a separate WIC food 
category);
    <bullet> Canned and dried mature legumes (these legumes are 
provided as a separate WIC food category); and
    <bullet> Items such as blueberry muffins and other baked goods.
3. Maximum Monthly Allowances
    The IOM recommended that fruits and vegetables be provided at 
levels of $10 per month for women and $8 per month for children. 
However, as discussed earlier in this preamble, to achieve cost 
neutrality, the Department has reduced this recommendation by $2 for 
both women and children. Therefore, this proposed rule establishes the 
value of fruit and vegetable vouchers at levels of $8 per month for 
women and $6 per month for children. The Department welcomes comments 
or suggestions from State agencies regarding cost-neutral options for 
providing vouchers at the IOM-recommended levels.
    a. Fresh produce option. Because few fresh fruits and vegetables 
are sold in uniform weight units with uniform bar codes, and their 
prices vary considerably across seasons, regions, and stores, they 
cannot be prescribed in quantity terms and still control the overall 
cost of the WIC food packages. Therefore, this proposal would include 
cash-value food instruments at the level of $8 per month for women and 
$6 per month for children for fresh fruits and vegetables.

[[Page 44798]]

    Cash-value food instruments will be set at $6 for children and $8 
for women in the year in which the proposed food package revisions take 
effect. FNS will adjust the maximum value of the vouchers in whole 
dollar increments to reflect the sum of annual, un-rounded increases in 
inflation using the Bureau of Labor Statistics' Consumer Price Index 
for Fresh Fruits and Vegetables. In the fiscal year in which the whole 
dollar increment accrues, the Department would have the option to 
increase the value of the fruit and vegetable vouchers by the whole 
dollar increment. If the Department elects this option, it would 
request the funding necessary for the additional program costs.
    The recommendation to use cash-value food instruments for fresh 
fruits and vegetables is based on input IOM received from vendors in 
public meetings. The IOM also cited two recent pilot studies in which 
cash-value vouchers for fresh fruits and vegetables were provided to 
WIC participants. <SUP>(18, 19)</SUP> The experience from both pilot 
studies, albeit unpublished at the present time, suggests that 
providing fresh produce to WIC participants using cash-value vouchers 
increased the intakes of fruits and vegetables, added variety to the 
diets of WIC participants, and was highly acceptable to WIC 
participants of various ethnic/cultural backgrounds.
    Because of greater participant choice, lower cost in many States, 
and potentially greater nutrient contribution from fresh produce, State 
agencies are encouraged to offer fresh produce to the extent possible.
    b. Processed fruit and vegetables option. As recommended by the 
IOM, this proposal would allow processed (canned, frozen, and dried) 
fruits and vegetables to be substituted when fresh produce is limited 
and to accommodate participant preference. The Department proposes to 
also provide the processed options via the $8 or $6 cash-value food 
instrument. State agencies would be authorized to allow the cash-value 
food instrument to be used to obtain any combination of fresh produce 
and processed fruits and vegetables, thereby providing maximum 
flexibility for the participant. In addition, the ability to combine 
all fruit and vegetable options on one type of cash-value food 
instrument should reduce the administrative complexity for State 
agencies and vendors.
    State agencies are encouraged to allow participants the wide 
variety of choices within the authorized fresh and processed options. 
To ensure participant choice among the fresh and processed fruit and 
vegetables authorized by the State agency, Sec.  246.12(g)(3)(i) would 
be revised to require that vendors authorized by the State agency carry 
a minimum of two varieties each of fruits and vegetables, in any 
combination of fresh and processed. However, it is the Department's 
expectation that more than two varieties each of fruits and vegetables 
be authorized by State agencies. The Department welcomes comments or 
suggestions on ways to provide the widest variety of choice without 
introducing undue program complexity or administrative burden.
4. Implementation of Fruit and Vegetable Options
    Under this proposed rule, State agencies would be encouraged to 
issue small denomination, such as $2, cash-value fruit/vegetable food 
instruments. In consideration of the perishable nature of fresh fruits 
and vegetables, small denominations are needed so the participant can 
obtain small amounts of fresh product at various times during the 
month, lessening the chance of food spoilage and waste. Any combination 
of authorized fresh or processed fruit or vegetable would be allowed in 
quantities with a value up to the amount of the cash-value food 
instrument(s). The Department welcomes comments or suggestions on 
implementation of fresh fruit and vegetable options.
    a. Operational requirements for cash-value fruits and vegetables 
food instruments. Under this proposed rule, cash-value food instruments 
for fruits and vegetables, as with any WIC food instrument, would be 
subject to the requirements in Sec.  246.12--Food Delivery Systems. 
Section 246.12 sets forth design and operational requirements for food 
delivery systems, including vendor authorization, accountability, 
redemption and disposition of food instruments.
    b. Benefit delivery. While most of the proposed food package 
changes could be administered via existing State benefit delivery 
systems, the cash-value food instruments for the purchase of fruits and 
vegetables differs from other WIC benefits which provide specified 
quantities of approved food items. The fruit and vegetable benefit 
would require changes to WIC benefit delivery systems to accommodate a 
more open-ended benefit determined by a cash value rather than a fixed 
quantity of a specific food item. States and vendors would have to 
modify operations and procedures to issue, transact, and process the 
redemption of a cash value benefit. The implementation of a cash value 
paper voucher or check may prove administratively burdensome and 
prohibitively expensive given additional processing costs that may be 
applied to each transaction, depending on a State's benefit processing 
arrangement. The cost and implications of these changes in the existing 
WIC benefit delivery system is an area that must be carefully 
considered.
    The fruit and vegetable benefit may lend itself to electronic 
benefit delivery in line with current trends in commercial retail 
transaction processing and consistent with the FNS 5-Year Plan for 
Electronic Benefit Transfer (EBT). While the majority of State WIC 
agencies deliver benefits via paper checks or vouchers, 5 States are 
testing the feasibility of EBT and an additional State has adopted EBT 
statewide. These pilots are testing and evaluating the feasibility of 
smartcard and online technologies. By 2008, FNS hopes to identify 
national model(s) that are technically and financially viable for 
retail transaction processing for WIC EBT.
    Although it will take a number of years to implement WIC EBT fully 
in all States, the fruit and vegetable benefit may provide 
opportunities for alternative forms of benefit delivery and allow some 
States to move toward limited electronic benefit processing prior to 
the implementation of EBT for all WIC purchases. These solutions could 
provide participants with greater flexibility in redeeming benefits by 
allowing them to spread their purchases out across the month, although 
some solutions will likely prove prohibitively costly in relation to 
the cash value of the proposed benefit. FNS will explore the range of 
possibilities for using existing commercial infrastructure to 
administer the fruit and vegetable benefit including WIC EBT smartcard 
and online solutions as well as commercial debit cards and other 
technologies.
    FNS will assess the administrative burden, technical feasibility, 
advantages and costs of alternative approaches to delivering the cash 
value benefit for fruits and vegetables. We recognize that this benefit 
will pose challenges and added costs for the existing paper voucher and 
check system and that various technical approaches may also be costly 
and complicated to develop, implement, and operate. Since the 
implications of alternative solutions are likely to vary across State 
WIC agencies depending on their current participating vendor 
characteristics and benefit delivery systems, several different options 
may be needed to deliver the cash value benefit throughout the Program. 
FNS seeks to minimize the complexity and cost associated with 
administering this benefit and invites

[[Page 44799]]

comments and suggestions on alternative approaches and considerations.
    c. Farmers' markets. The Department proposes to allow the State 
agency to authorize farmers at farmers' markets to accept the WIC cash-
value food instrument for fruits and vegetables. Such markets would 
have to meet vendor selection criteria specified at Sec.  246.12(g)(3) 
and would be subject to the vendor agreement requirements outlined in 
Sec.  246.12(h)(3).

F. Addition of Peanut Butter in Food Package V

    As recommended by the IOM, this proposed rule would add 18 ounces 
of peanut butter in Food Package V (currently Sec.  246.10(c)(5)) to 
improve the intake of several nutrients, including iron, folate, 
Vitamin E, and fiber, in the diets of pregnant and breastfeeding women. 
At present, Food Package V allows peanut butter only as an alternative 
to dry beans and peas.

G. Addition of Legumes in Food Package VI

    As recommended by the IOM, this proposed rule would add 1 pound of 
dried beans or peas or, as an alternative, 18 ounces of peanut butter, 
to Food Package VI for postpartum women (currently Sec.  246.10(c)(6)). 
Currently Food Package VI does not provide legumes of any kind. This 
addition would improve the intake of several nutrients, including iron, 
folate, Vitamin E, and fiber, in the diets of these participants.

H. Addition of Canned Mature Legumes as an Optional Substitute for Dry 
Legumes in Food Packages III-VII

    As recommended by the IOM, this proposed rule would allow the 
substitution of canned mature beans/peas for dry mature beans/peas in 
Food Packages III, IV, V, VI and VII (currently Sec.  246.10(c)(3) 
through (c)(7)). This substitution, currently authorized for homeless 
persons, would be allowed under this proposed rule to increase 
flexibility and variety in food choices for participants receiving Food 
Packages III-VII.
1. Authorized Types of Canned Beans
    This proposed rule would allow any type of mature dry beans in 
canned form. Examples include but are not limited to black beans 
(``turtle beans''), blackeye peas (cowpeas of the blackeye variety, 
``cow beans''), garbanzo beans (chickpeas), great northern beans, 
kidney beans, lima beans (``butter beans''), pinto beans, navy beans, 
soybeans, split peas, and lentils. Baked beans may be provided for 
participants with limited cooking facilities, at the State agency's 
discretion.
2. Restrictions on Authorized Types of Canned Beans
    This proposed rule would not authorize the following forms of 
canned beans:
    <bullet> Soups;
    <bullet> With the exception of baked beans, those containing added 
sugars, fats, meat or oils as purchased;
    <bullet> Immature varieties of legumes, such as those used in 
canned green peas, green beans, snap beans, orange beans, and wax 
beans; or
    <bullet> Baked beans with meat, e.g., beans and franks.
3. Maximum Monthly Substitution Rate
    As recommended the by the IOM, this proposed rule would allow the 
substitution of 64 ounces (e.g., four 16-ounce cans) of canned mature 
beans/peas for 1 pound of dry mature legumes in Food Packages III-VII.
    Although not addressed by IOM, the Department proposes to allow the 
following additional substitutions in Food Package V and VII:
    <bullet> 1 pound dry and 64 ounces of canned beans/peas (and no 
peanut butter)
    Or
    <bullet> 2 pounds dry or 128 ounces of canned beans/peas (and no 
peanut butter)
    Or
    <bullet> 36 ounces of peanut butter (and no beans).

I. Addition of Whole Wheat Bread or Other Whole Grains to Food Packages 
III, IV, V, VII

    As recommended by the IOM, this proposal would add whole wheat 
bread or other whole grains for children and pregnant and breastfeeding 
women in Food Packages III, IV, V and VII (currently Sec.  246.10(c)(3) 
through (c)(5), and (c)(7)). This addition responds to recommendations 
of the DGA 2005 \(12)\ to consume at least 3 servings per day of whole 
grains to reduce the risk of coronary heart disease and type 2 
diabetes, to help with body weight maintenance, and to increase intake 
of dietary fiber.
1. Authorized Whole Grains
    This proposed rule would include any bread that conforms to the 
Food and Drug Administration (FDA) standard of identity for whole grain 
bread as defined by 21 CFR 136.180 or that meets labeling requirements 
for making a health claim as a ``whole grain food with moderate fat 
content'' as defined by FDA in its December 9, 2003, Health Claim 
Notification for Whole Grain Foods with Moderate Fat Content at http://
www.cfsan.fda.gov/~dms/flgrain2.html (e.g., must contain a minimum of 
51% whole grains). Proposed allowable substitutions for whole grain 
bread would include brown rice, bulgur, oatmeal, and whole-grain barley 
without added sugars, fats, oils, or salt (i.e., sodium). Under this 
proposed rule, soft corn or whole wheat tortillas without added fats or 
oils would be allowed at the State agency's option. Using the minimum 
requirements and specifications in proposed Sec.  246.10(e)(12), State 
agencies would determine which types and brands of whole grain products 
to allow on State food lists.
2. Maximum Monthly Allowance
    As recommended by the IOM, this proposed rule would allow 2 pounds 
of whole grain bread or other whole grain options for children in Food 
Packages III and IV; and 1 pound of whole grain bread or other whole 
grain options for women in Food Packages III, V and VII.

J. Milk and Milk Alternatives

    As recommended by the IOM, this proposed rule would continue to 
provide milk in food packages for children and women (currently Sec.  
246.10(c)(4) through (c)(7)) as an important and concentrated source of 
vitamin D and calcium. This proposed rule would also authorize State 
agencies to provide alternatives for milk for individuals with lactose 
maldigestion and for those who avoid milk for cultural, religious, or 
other reasons. To maintain the nutritional content and cost neutrality 
of the food packages, some alternatives for milk (i.e., calcium-set 
tofu and cheese) would be allowed in limited amounts.
1. Nomenclature
    This proposed rule uses terminology for fat-reduced milk products 
as required by FDA on labeling for milk and milk products (21 CFR 
101.62), i.e., ``reduced fat'' has two percent milk fat, ``low fat'' 
has one percent milk fat, and ``nonfat'' is skim or fat-free. The term 
``fat-reduced'' is used in this proposal to refer to all varieties with 
two percent or less milk fat.
2. Authorized Milks
    As long as a milk conforms to the FDA standard of identity for milk 
as defined by 21 CFR Part 131 and meets WIC Federal requirements, it is 
an authorized milk in Food Packages IV, V, VI, and VII (currently Sec.  
246.10(c)(4) through (c)(7)). WIC regulations also

[[Page 44800]]

require that all authorized milks must be pasteurized and contain at 
least 400 International Units of vitamin D per quart (100 IU per cup) 
and 2000 International Units of vitamin A per quart (500 IU per cup).
    As recommended by the IOM, under this proposed rule, only whole 
milk (not less than 3.25% milk fat) is authorized for children less 
than 2 years of age in Food Package IV (currently Sec.  246.10(c)(4)). 
For children two years of age and older and women (adolescent and 
adult) in Food Packages IV, V, VI, and VII (currently Sec.  
246.10(c)(4) through (c)(7)), this proposed rule would authorize only 
milk with no more than 2% milk fat.
3. Maximum Monthly Milk Allowances
    The current maximum monthly allowances provide about 3.2 cups of 
milk a day for children and postpartum women and about 3.7 cups a day 
for pregnant and all breastfeeding women. As recommended by the IOM, 
this proposed rule would decrease the maximum monthly allowances for 
milk in all food packages. Reducing the amount of milk provided through 
WIC is consistent with recommended limits on saturated fat, total fat, 
and cholesterol consumption put forth in the DGA 2005 \(12)\. According 
to the IOM, amounts of milk provided by the WIC food packages need not 
exceed amounts recommended by DGA 2005 \(12)\. Therefore, this proposed 
rule would reduce the maximum monthly milk allowances for children 1 
through 5 years and postpartum women from 24 quarts to 16 quarts, which 
would provide 2.1 cups per day. This proposed rule would reduce the 
maximum monthly milk allowances for pregnant and partially 
breastfeeding women from 28 to 22 quarts of milk (2.9 cups per day); 
and would reduce the maximum monthly milk allowances for fully 
breastfeeding women from 28 quarts to 24 quarts of milk (3.2 cups per 
day).
    a. Substitution rates of evaporated milk. This proposed rule would 
change the substitution rate of evaporated milk for fluid milk in Food 
Packages IV, V, VI, and VII (currently Sec.  246.10(c)(4) through 
(c)(7)). The current substitution rate is 13 fluid ounces of evaporated 
milk (or 26 fl. oz. reconstituted evaporated milk) per quart (or 32 fl. 
oz.) of fluid milk. This proposal would increase the substitution rate 
to 16 fluid ounces of evaporated milk per 32 fluid ounces of fluid milk 
or a 1:2 fluid ounce substitution ratio. This is based on a dilution 
rate of equal parts evaporated milk and water (i.e., 12 oz. can 
evaporated milk + 12 oz. water = 24 oz. reconstituted milk) and would 
ensure that participants issued evaporated milk would receive the same 
maximum monthly allowance of milk (reconstituted) as those issued fluid 
milk . The substitution rate is the same for both evaporated whole and 
evaporated fat reduced milks. When a combination of different milk 
physical forms (e.g., fluid plus evaporated) is provided, State 
agencies would have to ensure that the full maximum monthly allowances 
for milk are issued in Food Packages IV through VII.
    b. Substitution rates of dry milks. This proposed rule would change 
how the substitution rates of dry milks for fluid milk issued in Food 
Packages IV, V, VI, and VII (Sec.  246.10(c)(4) through (c)(7)) are 
expressed. Currently the rates are stated as:
    <bullet> 1 pound of nonfat or lowfat dry milk per 5 quarts of fluid 
whole milk; or
    <bullet> 1 pound of dry whole milk per 3 quarts of fluid whole 
milk.
    The Department proposes to express the new substitution rates in 
terms of reconstituted fluid ounce yields of dry milk to make it easier 
for State agencies to calculate the amount of dry milk to substitute 
for fluid milk. Although the container sizes commonly available for dry 
milks vary in weight, the reconstituted yields are consistent with the 
substitution ratios of dry milk to fluid milk stated above. For 
example, a 25.6 oz. box of nonfat dry milk reconstitutes to 8 quarts of 
fluid milk. This yield is consistent with the 1 pound of nonfat dry 
milk per 5 quarts of fluid whole milk WIC substitution ratio.
    The proposed change will better accommodate the wide range of 
container sizes for dry milks now on the market and those that may be 
added in the future. When a combination of different milk physical 
forms (e.g., fluid plus nonfat dry) is provided, State agencies would 
have to ensure that the full maximum monthly milk allowances are issued 
in Food Packages IV-VII.
4. Authorized Substitutions for Milk (Cheese, Tofu, Soy-Based Beverage)
    As recommended by the IOM to provide more flexibility for WIC State 
agencies and more variety and choice for WIC participants, this 
proposed rule would allow cheese to be substituted for milk for 
children at the rate of 1 pound of cheese per 3 quarts of milk. No more 
than 1 pound of cheese may be substituted for milk. State agencies 
could authorize, with medical documentation, amounts of cheese that 
exceed this substitution maximum for children in Food Package IV, up to 
the maximum allowance for fluid milk, in cases of lactose intolerance 
or other qualifying conditions.
    For women, this proposed rule would allow cheese or calcium-set 
tofu to be substituted at the rate of 1 pound of cheese per 3 quarts of 
milk or 1 pound of tofu per 1 quart of milk. A maximum of 4 quarts of 
milk can be substituted in this manner in Food Packages V and VI; 
however, no more than 1 pound of cheese may be substituted for milk. A 
maximum of 6 quarts of milk can be substituted in this manner in Food 
Package VII; therefore, a maximum of two pounds of cheese may be 
substituted for milk in Food Package VII. State agencies could 
authorize, with medical documentation, amounts of cheese or calcium-set 
tofu that exceed these substitution maximums, up to the maximum 
allowance for fluid milk, in cases of lactose intolerance or other 
qualifying conditions.
    This proposed rule would authorize soy-based beverage to be 
substituted for milk for women in Food Packages V, VI and VII at the 
rate of 1 quart of soy-based beverage for 1 quart of milk up to the 
total maximum allowance of milk. Under this proposed rule, soy-based 
beverage and tofu are not allowed as substitutes for milk for children 
in Food Package IV without medical documentation. The qualifying 
conditions may include, but are not limited to, milk allergy, severe 
lactose maldigestion, and vegan diets. Requiring medical documentation 
ensures that a child's medical provider is aware that the child may be 
at nutritional risk when milk is replaced by other foods. State 
agencies could authorize, with medical documentation, soy-based 
beverages to be substituted for milk for children in Food Package IV on 
a quart for quart basis up to the total maximum allowance of milk. Tofu 
may be substituted, with medical documentation, for milk for children 
in Food Package IV at the rate of 1 pound of tofu per 1 quart of milk 
up to the total maximum allowance of milk.
    a. Authorized cheese. This proposed rule would clarify that a 
cheese that is a blend of authorized WIC cheeses (any combination of 
domestically produced, made with 100% pasteurized milk, Monterey Jack, 
Colby, natural Cheddar, Swiss, Brick, Muenster, Provolone, part-skim or 
whole Mozzarella, pasteurized American processed) is a WIC-eligible 
food. This proposed rule would clarify that cheeses that are labeled 
low, free, reduced, less, or light in the nutrients sodium, fat, or 
cholesterol are WIC-eligible.
    b. Authorized tofu. To be authorized, the tofu must be calcium-set 
(prepared with only calcium salts, e.g., calcium

[[Page 44801]]

sulfate), and may not contain added fats, sugars, oils or sodium. Under 
this proposed rule, tofu is not allowed as a substitute for milk for 
children in Food Package IV without medical documentation.
    c. Authorized soy-based beverages. Section 102 of the Child 
Nutrition and WIC Reauthorization Act of 2004 (Public Law 108-265) 
requires that nondairy beverages offered as an alternative to fluid 
milk in the National School Lunch Program and School Breakfast Program 
must be nutritionally equivalent to fluid milk and meet nutritional 
standards set by the Secretary of Agriculture. FNS believes that it is 
imperative for WIC and the school nutrition programs to use the same 
standards for defining allowable soy-based beverages as alternatives to 
fluid milk. In setting minimum nutritional standards for soy-based 
beverages, FNS considered the IOM recommendations and Food and Drug 
Administration (FDA) standards, and examined the nutrient levels found 
in various types of milk using the Nutrient Database for Dietary 
Studies. \(20)\ IOM recommended allowing as milk alternatives only soy-
based beverages that are fortified to contain nutrients in amounts 
similar to cow's milk. The IOM also recommended minimum levels per cup 
of 300 mg calcium and 120 International Units (IU) vitamin D. FDA, at 
21 CFR Part 131, specifies that if added, milk should provide not less 
than 2000 IU vitamin A per quart (500 IU per cup) and 400 IU vitamin D 
per quart (100 mg per cup.) Among the varieties of fluid milk, whole 
milk (3.25% milkfat) typically provides the lowest levels of several 
nutrients. Since soy beverage may be allowed as a substitute for milk 
over a variety of fat content levels, a single, broadly applicable 
standard is needed. Further, FNS believes that the statutory 
requirement of Public Law 108-265 for nutritional equivalency takes 
precedence over the IOM recommendations for WIC. Therefore, whole milk 
was used as a benchmark for all nutrients except vitamins A and D, 
which already have Federally-established standards for fortification of 
fluid milk. The chosen levels of vitamins A and D derive from the milk 
fortification levels required by the FDA. Based on the above, this rule 
proposes that authorized soy-based beverages provide, at a minimum, the 
following nutrients:

------------------------------------------------------------------------
                                                       Per cup
------------------------------------------------------------------------
Calcium...................................  276 milligrams (mg).
Protein...................................  8 grams.
Vitamin A.................................  500 International Units
                                             (IU).
Vitamin D.................................  100 IU.
Magnesium.................................  24 mg.
Phosphorus................................  222 mg.
Potassium.................................  349 mg.
Riboflavin................................  0.44 mg.
Vitamin B12...............................  1.1 mcg.
------------------------------------------------------------------------

K. Cereal (for Women and Children)

1. Nomenclature
    This proposed rule would adopt the term ``breakfast cereal'' as a 
substitute for the terms ``cereal (hot or cold)'' and ``adult cereal 
(hot or cold)'' currently used in Sec.  246.10(c). FDA regulations (21 
CFR 170.3(n)(4)) define breakfast cereals as those including ready-to-
eat and instant and regular hot cereals. This term is consistent with 
USDA's long-standing interpretation of WIC cereals (hot or cold) as 
meaning breakfast cereals that are either ready-to-eat or those cereals 
(e.g., oatmeal, grits, cream of wheat) that require the addition of a 
liquid (e.g., water or milk) and heating or cooking before being 
served.
2. Authorized Cereals
    As recommended by the IOM, this proposal would add new minimum 
requirements for WIC breakfast cereals in Food Packages III, IV, V, VI, 
and VII (currently Sec.  246.10(c)(3) through (c)(7)). To address 
current dietary guidance to increase whole grains and lower saturated 
fat and cholesterol, proposed authorized WIC breakfast cereals must 
meet labeling requirements for making a health claim as a ``whole grain 
food with moderate fat content'' as defined by FDA in its December 9, 
2003, ``Health Claim Notification for Whole Grain Foods with Moderate 
Fat Content'' at http://www.cfsan.fda.gov/dms/flgrain2.html (e.g., must 
contain a minimum of 51% whole grains). In addition, all authorized WIC 
breakfast cereals must continue to contain a minimum of 28 mg per iron 
per 100 grams of dry cereal and not more than 21.2 grams of sucrose and 
other sugars per 100 grams of dry cereal (6 grams per dry ounce). In 
Food Package III, infant cereal may be substituted for breakfast cereal 
for children and women.

L. Eggs

    This proposed rule would change the maximum monthly allowance for 
fresh shell eggs from the current 2 or 2\1/2\ to 1 dozen fresh shell 
eggs for children and women in Food Packages IV, V, and VI. This 
recommendation is consistent with recommendations of the IOM \(8)\ and 
the DGA 2005 \(12)\ to reduce cholesterol. In addition, the IOM 
determined that protein is no longer a priority nutrient for the WIC 
population. For fully breastfeeding women in Food Package VII, the 
maximum monthly allowance would be 2 dozen eggs. The quantity of eggs 
provided by the revised packages is comparable with the average amount 
of eggs consumed by children who are participating in the WIC Program.\ 
(21)\
    This proposed rule would allow the substitution of pasteurized 
liquid whole eggs, or dried egg mix for fresh shell eggs in these same 
food packages on an equivalent yield ready to eat versus weight or 
volume basis to accommodate differences among brands of these egg 
products. The proposed rule would authorize hard boiled eggs, where 
readily available for purchase in small quantities, for homeless 
participants.

M. Canned Fish

    As recommended by the IOM, this proposed rule would authorize 30 
ounces of a variety of canned fish that do not pose a mercury hazard, 
as identified by federal advisories of the Food and Drug Administration 
and the U.S. Environmental Protection Agency, \(22)\ in Food Package 
VII for fully breastfeeding women (currently Sec.  246.10(c)(7)). For 
ease of administration by State agencies, to accommodate participant 
preferences, and to minimize intake of mercury, this proposed rule 
would authorize the following varieties of canned fish--light tuna, 
salmon, and sardines. The Department seeks comments on additional 
canned fish to offer in Food Package VII. This proposed rule would 
clarify that fish packaged in foil bags (``pouches'') are WIC-eligible.

N. Juice

    This proposed rule would clarify that authorized juices must be 100 
percent unsweetened fruit/vegetable juice or blends of these juices, 
and contain a minimum of 30 milligrams of vitamin C per 100 milliliters 
of juice. This proposed rule would clarify that juices that are 
fortified with other nutrients may be allowed at the State agency's 
option. This proposed rule would also require that juices be 
pasteurized.
    The Department acknowledges that 100 percent citrus juices (i.e., 
orange, grapefruit, tangerine and blends of these juices) should 
naturally contain at least 30 milligrams of vitamin C per 100 
milliliters of juice. To ease the administrative burden on State 
agencies in approving juices, this proposed rule would not require the 
verification of vitamin C content for 100 percent citrus juices. 
However, verification of vitamin C content for non-citrus juices would 
be a requirement.

[[Page 44802]]

    As recommended by the IOM, this proposed rule would change the 
maximum monthly allowance of juice for women and children in Food 
Packages IV, V, VI, and VII (currently Sec.  246.10(c)(4) through 
(c)(7)). For children in Food Packages III and IV, the proposed maximum 
monthly allowance of juice is 128 fluid ounces of single strength juice 
(4.3 fluid ounces per day). For pregnant and partially breastfeeding 
women in Food Package V and fully breastfeeding women in Food Package 
VII, the proposed maximum monthly allowance of juice is 144 fluid 
ounces (4.8 fluid ounces per day). For postpartum women in Food Package 
VI, the proposed maximum monthly allowance of juice is 96 fluid ounces 
(3.2 fluid ounces per day).
    In its Report, the IOM states that deleting or reducing the 
quantity of juice in the WIC food packages helps allow for the 
inclusion of whole fruits and vegetables while containing food costs. 
The reduction in the amount of juice provided for children to about 4 
ounces per day is consistent with the AAP recommendation for that age 
group. \(14)\ The AAP also notes that juice does not provide any 
additional nutritional benefit beyond that of whole fruit. The reduced 
amount of juice for women is consistent with the recommendation of the 
DGA 2005 \(12)\ that whole fruits be used for a majority of the total 
daily amount of fruit.
    In Food Packages III, IV, V, VI and VII, this proposed rule would 
allow the substitution of shelf-stable and frozen concentrated juices 
for single strength juice. The proposed rule would allow combinations 
of single strength and concentrated juices provided that the total 
volume does not exceed the maximum monthly allowance for single-
strength juice.

O. Peanut Butter

    This proposed rule clarifies that reduced fat peanut butter is an 
optional alternative for regular peanut butter in Food Packages III, 
IV, V, VI and VII (currently Sec.  246.10(c)(3) through (c)(7)) 
provided that it meets the FDA standard of identity for peanut butter 
as defined by 21 CFR 164.150. That is, it must contain 90 percent 
peanuts by weight, contain no more than 10 percent by weight of 
seasonings and stabilizing ingredients, and contain no more than 55 
percent of fat by weight.

P. Revisions in Food Package III and Their Effect on Food Packages I 
and II

    Food Package III (currently Sec.  246.10(c)(3)) was initially 
designed for women and children with special dietary needs. The IOM 
recommended that this unique aspect of Food Package III be retained; 
however, it recommended that infants with qualifying conditions be 
assigned to this food package to facilitate efficient management and 
tracking of the benefits and costs of providing supplemental foods to 
these participants. The IOM also recommended that the foods contained 
in Food Package III be restrictive only to the extent dictated by the 
participant?s health condition. This rule proposes these 
recommendations and, in addition, certain technical adjustments found 
necessary by the Department.
    This rule proposes the following changes in Food Package III:
    <bullet> Adds medically fragile infants to the population served;
    <bullet> Revises the maximum monthly allowances for WIC formulas;
    <bullet> Clarifies the purpose and the qualifying conditions that 
it serves;
    <bullet> Includes other WIC food(s), when not medically 
contraindicated, up to the same maximum monthly allowance authorized 
for Food Packages II, and IV through VII; and
    <bullet> Clarifies the physical forms of authorized WIC-eligible 
medical foods.
    Over the years the Department has received numerous requests from 
WIC State agencies, advocates and participants to revise this food 
package to better meet the needs of the medically fragile. The 
Department recognizes that this nutritionally vulnerable segment of the 
nation's population has very special needs and WIC can assist in 
helping to address many of those nutritional needs. Some participants 
issued this food package may require a type of formula for which there 
is no substitute and their health would be seriously jeopardized if 
they did not receive this food package.
    The Department is proposing to revise Food Package III to serve all 
medically fragile WIC participants under the same food package and to 
include other supplemental foods when not medically contraindicated. 
The Department estimates that the current subgroup of participants who 
have medical conditions to receive Food Package III is only about 1-2 
percent of the total WIC caseload. The inclusion of other supplemental 
foods in this food package would provide flexibility in accommodating 
the wide range of different nutritional needs of the participants 
served by this food package.
1. Categories of Participants Served by Food Package III
    Food Package III (currently Sec.  246.10(c)(3)) serves only women 
and children who have a diagnosed medical condition when the use of 
conventional foods is precluded, restricted or inadequate to meet their 
nutritional needs. These medical conditions include, but are not 
limited to, metabolic disorders, inborn errors of amino acid 
metabolism, gastrointestinal disorders, malabsorption syndromes and 
food allergies.
    Infants with qualifying medical conditions currently receive either 
Food Package I, which serves infants 0-3 months of age, or Food Package 
II for infants 4-12 months of age. These infants have the same 
diagnosed medical condition(s) cited for women and children who 
currently receive Food Package III.
    The Department is proposing to revise Sec.  246.10(c)(1) through 
(c)(3) of Program regulations for Food Packages I, II and III in order 
to serve all medically fragile participants with qualifying conditions, 
including infants, with Food Package III. The revised title for this 
food package would be ``Food Package III--Participants With Qualifying 
Conditions''. Under revised Food Package III, infants would receive 
exempt infant formula and appropriate supplemental foods for the age 
and feeding option of the infant, when not medically contraindicated; 
children and adults would receive WIC formula (WIC-eligible infant 
formula, exempt infant formula, or WIC-eligible medical food) and 
appropriate supplemental foods, when not medically contraindicated.
    Infants who do not have a qualifying condition to receive exempt 
infant formula in Food Package III would continue to be served either 
under Food Package I or II, as deemed appropriate for their age and 
feeding option. Both Food Packages I and II would continue to authorize 
a variety of WIC-eligible infant formulas, consistent with Federal WIC 
regulations, State agency policies and authorization, and infant 
formula rebate contract agreements with manufacturers.
2. Qualifying Conditions Under Food Package III
    The Department is aware that in the past some State agencies have 
experienced difficulty in determining which medical conditions qualify 
under Food Package III. For these reasons, this proposed rule would 
clarify the types of conditions that would qualify participants as 
medically fragile participants eligible to receive Food Package III. 
Food Package III would be reserved for participants who have one or 
more qualifying conditions and, as a result of the qualifying 
condition,

[[Page 44803]]

require a WIC formula (infant formula, exempt infant formula or WIC-
eligible medical food) to supplement their nutrition needs as 
determined by the participant?s health care professional who is 
licensed to write medical prescriptions under State law. The WIC 
formulas prescribed in this food package provide nutritional support 
for specific conditions that are clinically serious or life-threatening 
and are generally required for long periods of time. The qualifying 
conditions include but are not limited to premature birth, low birth 
weight, failure to thrive, inborn errors of metabolism and metabolic 
disorders, gastrointestinal disorders, malabsorption syndromes, immune 
system disorders, severe food allergies that require an elemental 
formula, and life threatening disorders, diseases and medical 
conditions that impair ingestion, digestion, absorption or the 
utilization of nutrients that could adversely affect the participant?s 
nutrition status.
3. Restricted Uses of Food Package III
    Under this proposed rule, Food Package III would not be authorized 
for infants whose only condition is:
    <bullet> A diagnosed formula intolerance or food allergy to 
lactose, sucrose, milk protein, or soy protein that does not require 
the use of an exempt infant formula; or
    <bullet> A non-specific formula or food intolerance.
    Infants with these infant formula intolerances or food allergies 
would not receive revised Food Package III but instead would receive 
either revised Food Package I or II based on age and feeding option, as 
described in section V.B. of this preamble. Food Package I and II have 
collectively provided infant formulas that are soy-based, lactose-free, 
or sucrose-free to accommodate most food intolerances or food 
allergies. While commercially available infant formulas in the United 
States may vary by containing different ingredients to address such 
intolerances and allergies, these infant formulas are still considered 
to be infant formulas (as opposed to exempt infant formulas) as long as 
the definition and requirements of Sec.  246.2 are met. Therefore, Food 
Packages I and II would continue to authorize a variety of infant 
formulas, consistent with State agency policies and infant formula 
rebate contract agreements with manufacturers for infants with food 
intolerances and/or food allergies who do not have qualifying 
conditions in order to receive exempt infant formulas.
    Proposed Food Package III would not be authorized for a child or 
woman with a non-qualifying condition, such as a food dislike, or food 
intolerance (i.e. lactose intolerance) or a suspected but unconfirmed 
allergy (i.e. milk protein allergy). Currently other supplemental 
foods, such as cheese and lactose-free milk, are available and 
encouraged to address lactose intolerance. Proposed food packages IV-
VII , described in sections V.C. and V.D. of this preamble, include new 
foods as substitutes or alternatives to milk, such as soy-based 
beverage and calcium-set tofu, that may provide more flexibility to the 
State and the participant, may be easier to obtain in retail 
establishments, and may be more appropriate to meet the nutritional 
needs of the participants who do not have a qualifying condition. The 
use of conventional foods when appropriate is important due to the 
additional nutrients, fiber and other benefits that conventional foods 
provide. WIC nutrition education supports the importance of obtaining 
nutrients from foods when appropriate and that a balanced diet remains 
the preferred overall source of nutrients.
4. Authorized Foods in Food Package III
    Section 246.10(c)(3) of current regulations lists the authorized 
foods for children and women receiving Food Package III as WIC formula 
(infant formula, exempt infant formula and WIC-eligible medical foods), 
cereal and juice. As recommended by the IOM, this proposed rule would 
expand the WIC food categories offered in Food Package III of WIC 
formula, cereal and juice by adding milk and milk alternatives, fruits 
and vegetables, eggs, whole wheat bread, legumes and/or peanut butter, 
cheese, fish and infant foods, as medically appropriate and prescribed. 
Exempt infant formula would be the only WIC formula authorized for 
infants in revised Food Package III. Infant formula, exempt infant 
formula and WIC-eligible medical foods would be authorized for children 
and women in revised Food Package III.
5. Authorized WIC Formulas
    Current authorized WIC formulas (infant formulas, exempt infant 
formulas, and WIC-eligible medical foods) are defined in Sec.  246.2 of 
WIC regulations.
    WIC formulas are generally described as follows:
    <bullet> Infant formulas are food substitutes for human milk for 
generally healthy, full-term infants;
    <bullet> Exempt infant formulas are food substitutes for human milk 
for both pre-term or full-term infants who have a nutritionally-related 
medical problem; and
    <bullet> WIC-eligible medical foods are specifically formulated to 
provide nutritional support for participants with a diagnosed medical 
condition.
    The Department proposes to revise the existing definition for 
``WIC-eligible medical foods'' in Sec.  246.2 to clarify that medical 
foods are designed for children (12 months and older) and adults. 
Infants served under Food Package III cannot receive WIC-eligible 
medical foods.
6. Products Not Authorized as WIC Formulas
    Products not authorized as WIC formulas or foods in Food Package 
III or any other food package include, but are not limited to:
    <bullet> Medicines or drugs, as defined and regulated under the 
Food, Drug and Cosmetic Act (21 U.S.C. 301 et seq.), as amended;
    <bullet> Parenteral or intravenous nutrition products;
    <bullet> Enzymes;
    <bullet> Flavoring and thickening agents;
    <bullet> Oral rehydration fluids or electrolyte solutions;
    <bullet> Sports or breakfast drinks; and
    <bullet> Over-the-counter weight control/loss products.
    In addition, all apparatus or devices (e.g., feeding tubes, bags 
and pumps) designed to administer WIC formulas are not WIC-allowable 
costs.
7. Physical Forms of WIC Formulas
    a. Current Physical Forms. WIC regulations for Food Packages I, II 
and III (Sec.  246.10(c)(1) through (c)(3)) identify the three physical 
forms of WIC formulas as concentrated liquid, powder and ready-to-feed 
(RTF) in liquid form.
    b. Ready to Feed in Other Than Liquid Forms. New formulas and 
medical foods have been developed due to advancements in technology and 
these products do not strictly conform to the current physical form 
descriptions. While different forms of infant formula and exempt infant 
formula could be developed, it is anticipated that the largest variety 
of physical forms will be within the WIC-eligible medical foods 
category. The forms of WIC-eligible medical foods currently available 
include, but are not limited to, ready-to-feed bars, ready-to-eat 
puddings, and gels and capsules specifically designed for inborn errors 
of metabolism. The Department has determined that some of these 
products meet the minimum Federal WIC requirements for a WIC-eligible 
medical food, however the technical guidance regarding how to determine 
maximum monthly allowances is being considered in light of the IOM 
report recommendations that

[[Page 44804]]

powder and ready-to-feed forms may be substituted for liquid 
concentrate on an equivalent nutritional basis. Inclusion of these 
additional forms of WIC-eligible medical foods into Federal WIC 
regulations and their appropriate maximum monthly allowances would 
increase flexibility for State agencies to help meet the nutritional 
needs of the medically fragile participant. FNS is seeking comments on 
the appropriate equivalent standard to be used (e.g., protein 
equivalent, kilocalorie equivalent, volumetric or weight equivalent, 
number of serving equivalents, and/or other type of equivalent) to 
determine maximum monthly allowances for WIC-eligible medical foods in 
these new physical forms (e.g., bars, gels, and capsules) for those 
medically fragile participants served by Food Package III. Comments are 
also requested regarding how to determine maximum monthly allowances 
for WIC-eligible medical foods prescribed to children and women that 
are only available in ready-to-feed forms such as capsules or gels and 
therefore the liquid concentrate equivalent does not exist.
    c. Restrictions for Issuing RTF Forms of WIC Formulas. Current 
regulations (Sec.  246.10(c)(1)(ii)) governing Food Packages I and II 
restrict the issuance of WIC formulas in RTF liquid form to only the 
following conditions:
    <bullet> The participant's household has an unsanitary or 
restricted water supply or poor refrigeration.
    <bullet> The participant or person caring for the participant may 
have difficulty in correctly diluting concentrated forms or 
reconstituting powder forms, or the WIC formula is only available in 
RTF form.
    This proposed rule would continue to include these same 
restrictions for issuing a WIC formula in a RTF form issued under 
revised Food Package III. However, recognizing the needs of 
participants with qualifying conditions, this proposed rule would 
expand upon these restrictions to also authorize a RTF form in Food 
Package III when the product:
    <bullet> Better accommodates the participant's medical condition 
(e.g., RTF semi-solids for swallowing disorders and RTF forms to reduce 
the possibility of food contamination and risk of infection in cases of 
immune system disorders); or
    <bullet> Improves the participant's compliance in consuming the 
prescribed formula (e.g., improved taste of RTF solid bars versus RTF 
liquid forms of WIC-eligible medical foods).
    This proposed rule would continue to authorize the WIC local agency 
competent professional authority, in consultation with the 
participant's attending health care provider when appropriate, to 
determine and document if a WIC formula in a RTF form is required.
8. Maximum Monthly Allowances for Food Package III
    As recommended by the IOM, this proposed rule would revise Food 
Package III to serve medically fragile women, infants and children with 
qualifying conditions. These participants would receive up to the same 
maximum monthly amounts of supplemental foods unless medically 
contraindicated, as those same participant categories (infants, 
children, pregnant or partially breastfeeding women, non-breastfeeding 
postpartum women, and fully breastfeeding women) who do not have a 
qualifying condition.
    a. Infants, ages birth through 11 months. Infants with a qualifying 
condition would receive exempt infant formula and infant foods in up to 
the same maximum monthly allowances as infants of the same age and 
feeding option with no qualifying condition who are issued Food 
Packages I or II unless medically contraindicated.
    b. Children, ages 1 year through 4 years. A child with a qualifying 
condition would receive up to 455 fluid ounces in liquid concentrate 
form of WIC Formula (infant formula, exempt infant formula, or WIC-
eligible medical food). Formulas in other forms, such as powder or RTF 
could be substituted by providing nutritional equivalent amounts. 
Unless medically contraindicated, the participant may receive any or 
all of the following supplemental foods in up to the maximum monthly 
amounts with medical documentation--milk and milk alternatives, juice, 
breakfast cereal (hot or cold), eggs, fruits and vegetables, whole 
wheat bread or other whole grains, legumes, or peanut butter.
    c. Pregnant or partially breastfeeding. A pregnant, or partially 
breastfeeding woman, whose participating infant receives formula in 
amounts that do not exceed the maximum allowances provided by Food 
Packages I or II for partially breastfeeding infants, as appropriate 
for the age of the infant, and who has a documented qualifying 
condition would receive up to 455 fluid ounces in liquid concentrate 
form of WIC Formula (infant formula, exempt infant formula, or WIC-
eligible medical food). Formulas in other forms, such as powder or RTF 
could be substituted by providing nutritional equivalent amounts. 
Unless medically contraindicated, the participant may receive any or 
all of the following supplemental foods up to the maximum monthly 
amounts with medical documentation--milk and milk alternatives, juice, 
breakfast cereal (hot or cold), eggs, fruits and vegetables, whole 
wheat bread or other whole grains, legumes, and peanut butter.
    d. Postpartum. A non-breastfeeding postpartum woman (up to 6 months 
postpartum) or a breastfeeding postpartum woman (up to 6 months 
postpartum) whose partially breastfed infant receives formula in 
amounts that exceed the maximum allowances provided by Food Packages I 
or II for partially breastfeeding infants, as appropriate for the age 
of the infant, and who has a documented qualifying condition would 
receive up to 455 fluid ounces in liquid concentrate form of WIC 
Formula (infant formula, exempt infant formula or WIC-eligible medical 
food). Formulas in other forms, such as powder or RTF, could be 
substituted by providing nutritional equivalent amounts. Unless 
medically contraindicated, the participant may receive any or all of 
the following supplemental foods up to the maximum monthly amounts with 
medical documentation--milk and milk alternatives, juice, breakfast 
cereal (hot or cold), eggs, fruits and vegetables, legumes, or peanut 
butter.
    e. Fully breastfeeding. A fully breastfeeding woman (up to 1 year 
postpartum) whose infant does not receive formula from WIC; all 
breastfeeding women during the first month postpartum; women pregnant 
with two or more fetuses; and women partially breastfeeding multiple 
infants (up to 1 year postpartum) with a qualifying condition would 
receive up to 455 fluid ounces in liquid concentrate form of WIC 
Formula (infant formula, exempt infant formula, or WIC-eligible medical 
food). Formulas in other forms, such as powder or RTF, could be 
substituted by providing nutritional equivalent amounts. Unless 
medically contraindicated, the participant may receive any or all of 
the following supplemental foods up to the maximum monthly amounts with 
medical documentation--milk and milk alternatives, juice, breakfast 
cereal (hot or cold), cheese, eggs, fruits and vegetables, whole wheat 
bread or other whole grains, fish (canned), legumes, and peanut butter. 
Women fully breastfeeding multiple infants (up to 1 year postpartum) 
with a qualifying condition would be prescribed 1.5 times the maximum 
amounts of supplemental foods provided by Food Package III with medical 
documentation.
    The Department recognizes that the types of qualifying conditions

[[Page 44805]]

warranting Food Package III are varied and can impose different dietary 
restrictions on participants. For example, the presence of an inborn 
error of amino acid metabolism, such as phenylketonuria, known as PKU, 
would severely limit the types of traditional foods a participant could 
have, especially those high in protein. For these participants, the 
maximum monthly allowances of a WIC formula may be warranted to meet 
their special protein needs, but some of the food categories of the 
other allowable supplemental foods (e.g., eggs, legumes and fish) may 
be medically prohibited.
    The combination of WIC food options made available under revised 
Food Package III would provide flexibility in accommodating the wide 
range of different nutritional needs of the participants served by this 
food package.
9. Coordination with Other Programs That Provide or Reimburse for 
Formulas
    This proposal would require WIC State agencies to coordinate with 
other Federal, State, or local government agencies or with private 
agencies that operate programs that also provide or reimburse, or could 
provide or reimburse, for exempt infant formula and WIC-eligible 
medical food benefits that may be authorized by WIC State agencies.
    Such coordination recognizes that WIC participants could fully 
participate in and benefit from other assistance programs. At a 
minimum, WIC State agencies would be required to coordinate with the 
Medicaid Program regarding the provision of exempt infant formulas and 
WIC-eligible medical foods prescribed for WIC participants who are also 
Medicaid recipients. The WIC State agency would be responsible for 
providing up to the maximum amount of exempt infant formulas and WIC-
eligible medical foods under Food Package III in situations where 
reimbursement is not provided by another entity.
    In coordinating with programs on the provision of WIC-authorized 
exempt infant formulas and WIC-eligible medical foods, the Department 
strongly encourages WIC State agencies to:
    <bullet> Become knowledgeable of the participant eligibility 
criteria for receiving exempt infant formula and WIC-eligible medical 
foods benefits from other programs;
    <bullet> Implement a formula agreement or memorandum of 
understanding with these other programs to share the responsibility of 
meeting the exempt infant formula and WIC-eligible medical foods need 
of mutual participants;
    <bullet> Establish policies and procedures for issuing exempt 
infant formulas and WIC-eligible medical foods to WIC participants who 
are able to meet any portion of their exempt infant formula and WIC-
eligible medical foods needs through these other programs; and
    <bullet> Assist WIC participants in quickly obtaining from the 
other programs any exempt infant formula and WIC-eligible medical foods 
needs beyond the maximum monthly allowances that may be needed to meet 
the amount prescribed.
10. Infant Cereal in Food Package III
    Longstanding policy has allowed infant cereal to be substituted for 
hot or cold cereal intended for children and adults in Food Packages 
III whenever infant cereal was needed to better meet participants' 
nutritional needs due to qualifying conditions. However, this provision 
was never incorporated into regulatory language for these food 
packages.
    The iron content of infant cereal is higher and in a form that is 
better absorbed than the iron in adult cereal. In addition, infant 
cereal has a finer texture than adult cereal for easier swallowing. 
Therefore, women and children who have increased iron requirements, 
developmental delays, or swallowing disorders may benefit from 
receiving infant cereal in lieu of adult cereal.
    This rule proposes to authorize only in Food Package III the 
substitution of 32 dry ounces of infant cereal for 36 dry ounces of 
adult cereal for children and women when the WIC competent professional 
authority or the supporting medical prescription documents that this 
provision is necessary. The Department believes that the vast majority 
of children and women who would require this cereal substitution would 
be served in Food Package III rather than the other food packages.

Q. Medical Documentation and Supervision Requirements for Food Packages 
I through VII

1. Current Requirements
    Federal WIC regulations at Sec.  246.10(c)(1)(iii)(A) through 
(c)(1)(iii)(D) require medical documentation for the issuance of any 
contract brand infant formula that does not meet the requirements of an 
iron fortified infant formula; any non-contract brand infant formula; 
any exempt infant formula; or any WIC-eligible medical food. The 
medical documentation is intended to verify that the participant has a 
medical condition that dictates the use of a WIC formula (infant 
formula, exempt infant formula or WIC-eligible medical food). The 
current medical documentation technical requirements (Sec.  
246.10(c)(1)(v)(B)) are:
    <bullet> The brand name of the WIC formula prescribed;
    <bullet> Medical diagnosis warranting the WIC formula;
    <bullet> Length of time the prescribed WIC formula is medically 
required by the participant; and
    <bullet> The signature (or name, if the initial documentation was 
received by telephone) of the requesting health care provider.
    Medical documentation may be provided as an original written 
document, electronically, by facsimile or by telephone to the competent 
professional authority who must promptly document the information. 
However, the receipt of medical documentation by telephone may only be 
used when absolutely necessary on an individual participant basis to 
prevent undue hardship to a participant or to prevent a delay in the 
provision of infant formula that would place the participant at 
increased nutritional risk. Section 246.10(c)(1)(v)(B) of current WIC 
regulations requires that this information be documented in writing and 
kept on file at the WIC local clinic. Therefore, receipt of medical 
documentation via the telephone must be followed by written 
documentation.
2. Proposed Requirements
    This proposed rule would continue to require medical documentation 
for any contract brand infant formula that does not meet the 
requirements of an infant formula as specified in Table 4 of Sec.  
246.10(e)(12) of the proposed rule, any non-contract brand infant 
formula, any exempt infant formula, or any WIC-eligible medical food. 
In addition, medical documentation would be required for certain milk 
alternatives for children and women as described in section V.J. of 
this preamble and for any supplemental foods authorized in proposed 
Food Package III for participant's with certain qualifying conditions 
as described in section V.P. of this preamble. In addition to retaining 
all of the current medical documentation requirements, this proposed 
rule would add the following requirements to medical documentation:
    <bullet> Contact information for the participant's healthcare 
provider who makes the medical determination;
    <bullet> Date of medical determination;
    <bullet> Name of specific supplemental food(s) to be prescribed;
    <bullet> Amount prescribed per day;

[[Page 44806]]

    <bullet> Medical determination of a qualifying condition which 
warrants the issuance of the specific supplemental food(s); and
    <bullet> Length of time the specific supplemental food(s) is 
medically required.
    All required medical documentation necessary for the issuance of 
supplemental foods including WIC formulas would continue to be received 
as an original written document, an electronic document, or received by 
facsimile or telephone and kept on file. This proposed rule would 
broaden the file requirement to allow electronic medical documentation 
files.
    Medical documentation requirements for specific supplemental foods 
that do not usually require a prescription in order to obtain the 
food(s) are established to ensure that the participant's healthcare 
professional, licensed in the State to write prescriptions, has 
determined that the supplemental foods are not medically 
contraindicated by the participant's condition.
3. Roles of the State-Licensed Health Care Provider and WIC Competent 
Professional
    Due to the nature of the health conditions of participants who 
would receive Food Package III, close medical supervision is essential 
for each participant's overall dietary management. The Department 
considers it appropriate that the responsibility for this close medical 
supervision remain with the participant's health care provider. This 
proposed rule would consider it the responsibility of the WIC competent 
professional authority to ensure that only the amounts of WIC formula 
and supplemental foods up to the regulatory maximum amounts prescribed 
by the participant's health care provider are issued in the 
participant's food package.
4. State Agency Guidance to Local Agencies
    The Department encourages State agencies to develop guidance for 
their local agencies and clinic sites, including but not limited to 
guidance in the State's procedure manual, to use in assisting the 
participant to obtain the required medical documentation for receiving 
Food Package III or the milk alternatives for children and women in 
Food Packages IV-VII and for health care professionals in local 
communities. Such guidance should assist local agencies in identifying 
and understanding:
    <bullet> Qualifying conditions;
    <bullet> Maximum monthly allowances of WIC formula (meaning infant 
formula, exempt infant formula and WIC-eligible medical foods) and 
specific supplemental food(s) authorized; and
    <bullet> Related State agency policies and procedures for issuing 
WIC formulas and specific supplemental foods(s) that require medical 
documentation.
    State agencies are encouraged to develop a standardized form for 
health care professionals to use in prescribing Food Package III to 
help ensure that the WIC local clinics obtain the required medical 
documentation.

R. Flexibility and Variety

    As recommended by the IOM, WIC State agencies are encouraged to 
allow as much variety and choice from the proposed authorized foods as 
is feasible considering cost constraints and availability. Providing 
more variety and choice will facilitate the tailoring of food packages 
to specific situations, especially for different ethnic or cultural 
groups.
    This rule proposes that State agencies make available to 
participants at least two fruits and two vegetables from the category 
of fruits and vegetables (fresh or processed) in each authorized food 
package. However, it is the Department's expectation that more than two 
varieties each of fruits and vegetables be authorized by State agencies 
and encourages States to offer participants the widest variety of fruit 
and vegetable options practicable. This rule also proposes that State 
agencies make available to participants more than one food type from 
each WIC food category in each authorized food package, except for the 
categories of peanut butter and eggs.

S. Cultural Food Package Proposals

    The IOM was charged with considering the cultural needs of WIC 
participants and its recommendations for revisions to the WIC food 
packages reflect those considerations. The IOM's recommendations, as 
put forth in this proposed rule, include allowing participants a broad 
selection of fruits and vegetables, tofu and soy-based beverages as 
substitutes for milk, participant choice for whole grains (including 
tortillas), and salmon and sardines as substitutions for tuna.
    IOM's recommendations, as largely put forth in this proposed rule, 
include those foods that State agencies and participants have requested 
over the years to accommodate cultural needs of participants. In 
addition, the IOM recommendations reflect those put forth in NWA's 
Position Paper--``NWA WIC Culturally Sensitive Food Prescription 
Recommendations.'' <SUP>(2)</SUP> Developing, reviewing, and analyzing 
cultural food package proposals is a time consuming process for WIC 
State agencies and the Department. Because the increased variety and 
choice in the supplemental foods proposed in this rule will provide 
State agencies increased flexibility in prescribing culturally 
appropriate packages for diverse groups, the Department proposes to no 
longer consider WIC State agency proposals for cultural accommodations. 
While we acknowledge that the future demographics of WIC participants 
may change, WIC is a supplemental program, and is not intended to 
provide all of the foods that may meet cultural food preferences. 
Future reviews of the WIC food packages by the Department will be used 
to determine the need for additional cultural accommodations.

T. General Provisions That Affect All WIC Food Packages

1. State Authority to Determine Brands
    This rule would clarify that State agencies have the authority to 
establish additional criteria for WIC-authorized foods that exceed 
Federal requirements. These State criteria could address, but not be 
limited to:
    <bullet> Other nutritional standards;
    <bullet> Competitive cost;
    <bullet> State-wide availability; and
    <bullet> Participant appeal.
2. Nutrition Tailoring
    Nutrition tailoring is a process of modifying the standard food 
package to better meet the supplemental nutrition needs of 
participants. Nutrition tailoring entails making changes or 
substitutions to food types (e.g., dry beans vs. peanut butter), 
physical food forms (e.g. dry milk vs. fluid milk), and to quantities 
of foods.
    Current FNS policy allows both categorical and individual nutrition 
tailoring of WIC food packages. Individual nutrition tailoring is based 
on the Competent Professional Authority's assessment of the 
participant's supplemental nutrition needs. Categorical nutrition 
tailoring for participant groups or subgroups with similar supplemental 
nutrition needs is based on scientific nutrition rationale and State 
established policies.
    According to the IOM, the proposed revised food packages have the 
potential to address current nutrient inadequacies and excesses; 
discrepancies between dietary intake and dietary guidance; and current 
and future health-related problems in WIC's target population. The IOM 
recommends that the revised food packages be provided to each

[[Page 44807]]

participant in full, except to the extent that the packages are 
tailored to the needs of individual WIC participants. Therefore, this 
proposed rule would prohibit categorical nutrition tailoring, but 
continue to allow individual nutrition tailoring based on the Competent 
Professional Authority's assessment of a participant's supplemental 
nutrition needs.
    Provisions of less than the maximum monthly allowances of 
supplemental foods to an individual WIC participant would be 
appropriate when:
    <bullet> Medically or nutritionally warranted (e.g., to eliminate a 
food due to a food allergy);
    <bullet> A participant refuses or cannot use the supplemental 
foods; or
    <bullet> The quantities necessary to supplement another program's 
contribution to fill a medical prescription would be less than the 
maximum monthly allowances.
    Consistent with current FNS policy, reductions in amounts of 
supplemental foods could not be made for cost-savings, administrative 
convenience, caseload management, or to control vendor abuse. However, 
State agencies could continue to make administrative adjustments for 
economic purposes. Acceptable administrative adjustments decrease cost 
while maintaining the nutrition integrity of the food packages and 
include such decisions as eliminating expensive brands, packaging or 
physical forms of WIC supplemental foods.
3. Homeless Participants
    This proposal clarifies that State agencies would continue to have 
the authority to make food package adjustments to better accommodate 
homeless participants.
4. Individual Use by Participants
    The WIC food packages are individual food prescriptions that, in 
order to have the full effect on improving a participant's nutritional 
status, are intended to be consumed only by the participant and not by 
other family members.
5. Settings for Participant Use of Supplemental Foods
    Under this proposal, State or local agencies would have to advise 
participants that the supplemental foods issued are only for their 
personal use. Supplemental foods would not be authorized for 
participant use while hospitalized on an in-patient basis. In addition, 
consistent with Sec.  246.7(n)(1)(i)(B), supplemental foods would not 
be authorized for use in the preparation of meals served in a communal 
food service. This restriction would not preclude the provision or use 
of supplemental foods for an individual participant in a:
    <bullet> Non-residential setting (e.g., child care facility, family 
day care home, school, or other educational program);
    <bullet> Homeless facility; or
    <bullet> At the State agency's discretion, a residential 
institution (e.g., home for pregnant teens, prison, or residential drug 
treatment center) that meets the requirements currently set forth in 
Sec.  246.7(n)(1) and (n)(2).

U. Implementation of Revised Food Packages

    The proposed revisions to the WIC food packages will result in 
substantial changes to all aspects of program operations including 
management information systems, nutrition education and counseling, 
vendor authorization, training and management, and, breastfeeding 
promotion and support. The Department seeks comments from State 
agencies on the type and scope of administrative burden that may be 
associated with implementing the provisions in this proposed rule.
    In its report, the IOM identified certain proposed changes that 
were so significant that it recommended pilot testing or limited 
application of the changes before full-scale implementation by all 
State agencies. As such, the Department seeks comments on the following 
proposed implementation plan that is designed to address the IOM 
recommendation for testing of certain provisions while allowing State 
agencies sufficient time and broad flexibility to implement the 
majority of the food packages.
    1. Pregnant Women--The most significant changes to the food package 
for pregnant women include the addition of the $8.00 cash value voucher 
for fresh fruits and vegetables and whole wheat bread (or other whole 
grain options). Also, pregnant women may receive soy-based beverage or 
tofu in addition to cheese as a substitute for milk. The Department is 
proposing a one-year implementation timeframe for these changes.
    2. Postpartum Women--The primary changes to the food package for 
postpartum women include the addition of the $8.00 cash value voucher 
for fresh fruits and vegetables and the option to receive soy-based 
beverage or tofu in addition to cheese as a substitute for milk. The 
Department is proposing a one-year implementation timeframe for these 
changes.
    3. Breastfeeding Women--The proposed food package changes subdivide 
breastfeeding women as either fully breastfeeding or partially 
breastfeeding. For fully and partially breastfeeding women, the most 
substantial food package changes include the addition of the $8.00 cash 
value voucher for fresh fruits and vegetables and whole wheat bread (or 
other whole grain options). Also, fully and partially breastfeeding 
women may receive soy-based beverage or tofu in addition to cheese as a 
substitute for milk. Recognizing that the ``fully breastfeeding woman'' 
is likely to be the same individual who under the current food package 
system receives Food Package VII, the enhanced breastfeeding package, 
the Department believes that a one-year implementation timeframe for 
these changes is appropriate.
    For partially breastfeeding women, the IOM recommends changes that 
strengthen and support breastfeeding as the optimal infant feeding 
choice and that support WIC's breastfeeding promotion efforts. However, 
the IOM was concerned about the impact of the food package changes that 
support and promote breastfeeding on the mother/infant dyad, 
particularly not allowing partially breastfeeding status during the 
infant's first month of life. While there is empirical evidence that 
shows early supplementation with infant formula is associated with 
shorter duration of breastfeeding, particularly exclusive 
breastfeeding, some mothers who might otherwise try breastfeeding may 
choose formula feeding to be sure they can obtain formula from WIC if 
they run into breastfeeding difficulties. Recognizing the potential 
impacts associated with proposed changes to the partially breastfeeding 
woman's package, the Department is proposing to analyze and assess the 
proposed changes before proceeding to full implementation. The 
Department believes that an experimental design with random assignment 
of mother-infant dyads is impractical. Therefore, the Department 
proposes to limit to not more than 4 sites within up to eight State 
agencies (32 total local sites) the ability to implement the partially 
breastfeeding food package changes. After the Department has had an 
opportunity to examine the effects of the revised changes on the 
initiation and duration of breastfeeding (based on a comparison of the 
experiences in the test sites to comparison sites in the selected State 
agencies), the Department will determine when all State agencies can 
implement the revised partially breastfeeding women's food package. The 
State agencies will be selected based on willingness and ability to

[[Page 44808]]

cooperate with evaluation data collection and design protocols 
(including identification of appropriate comparison sites for the 4 
test sites within the State), past breastfeeding rates in the State 
(the Department proposes to seek a range of high, medium and low past 
breastfeeding rates), adequacy of the infrastructure in place to 
provide the necessary support to breastfeeding mothers (the Department 
proposes to seek both ``best case'' and ``average case'' levels of 
infrastructure), ability of the management information system to 
provide requested data on the impact of the food package changes, and 
diversity of the population to receive the new food package.
    4. Infants--The proposed food package changes subdivide infants as 
fully formula fed, fully breastfed or partially breastfed. In addition, 
the food packages for fully formula fed infants are designated as birth 
through 3 months; 4 through 5 months; and 6 through 11 months. The food 
packages for partially breastfed infants are designated as 1 through 3 
months, 4 through 5 months, and 6 through 11 months. The infant food 
packages for fully breastfed infants are designated as birth through 5 
months, and 6 through 11 months.
    For the fully formula fed infant, the amount of infant formula has 
been reduced for the 6 through 11 month old. This reduction has been 
offset by the addition of infant food fruits and vegetables. However, 
the amount of infant formula has been increased for the 4 through 5 
month old. Also, juice has been eliminated. The Department proposes a 
six-month timeframe to implement the elimination of juice and a one-
year timeframe to implement the remaining changes in the fully formula 
fed package.
    For the partially breastfed infant category, the most significant 
change is the inability to receive any WIC infant formula during the 
first month following birth. In the first month after birth there are 
only two feeding options--fully formula fed or fully breastfed. The 
other changes include a reduction of the amount of infant formula that 
can be received from WIC, elimination of juice and the addition of 
infant food fruits and vegetables. As noted above, the IOM was 
concerned about the impact of the recommended food package changes on 
the breastfeeding mother/infant dyad. Therefore, the Department 
proposes to limit the ability to implement the partially breastfed 
infant food packages changes to not more than 32 sites within up to 
eight State agencies selected to implement the partially breastfeeding 
woman's food package. After the Department has had an opportunity to 
examine the effects of the revised changes on the initiation and 
duration of breastfeeding (based on a comparison of the experiences in 
the test sites to comparison sites in the eight State agencies), the 
Department will determine when all State agencies can implement the 
revised partially breastfed infant food package. The State agencies 
will be selected based on willingness and ability to cooperate with 
evaluation data collection and design protocols (including 
identification of appropriate comparison sites for the test sites), 
past breastfeeding rates in the State (the Department proposes to seek 
a range of high, medium and low past breastfeeding rates), adequacy of 
the infrastructure in place to provide the necessary support to 
breastfeeding mothers (the Department proposes to seek both ``best 
case'' and ``average case'' levels of infrastructure), ability of the 
management information system to provide requested data on the impact 
of the food package changes, and diversity of the population to receive 
the new food package.
    For the fully breastfed infant, the most significant change is the 
addition of infant fruits and vegetables, and infant meats. The 
Department believes that a one-year implementation timeframe for these 
changes is appropriate.
    5. Children--The most significant changes to the child's food 
package include the addition of the $6.00 cash value voucher for fresh 
fruits and vegetables and whole wheat bread (or other whole grain 
options), and the reductions in the amounts of milk and juice. Also, 
children 2 years of age and older may no longer receive whole milk. 
Cheese remains a substitute for milk. The Department is proposing a 
one-year implementation timeframe for these changes.
    6. Participants with Qualifying Conditions--The most significant 
changes to the food package that address the dietary needs of 
participants' with certain qualifying conditions is the addition of 
other supplemental food(s), when not medically contraindicated, and 
serving all medically fragile participants under one food package (Food 
Package III). Women, infants and children with qualifying conditions 
would receive the same maximum monthly amounts of supplemental foods, 
with medical documentation, as those same participant categories that 
do not have a qualifying condition. The Department is proposing a one-
year implementation timeframe for these changes.
    The following chart summarizes the proposed implementation 
timeframes on which the Department is seeking comments. As noted, in 
most instances State agencies will have one year to implement the new 
food packages. During the one-year phase-in period, State agencies 
would be required to issue food benefits based on either the new food 
packages or current food packages but could not combine the two. For 
example, a State agency could not add whole wheat bread and fresh 
fruits and vegetables to the current foods and quantities available 
under the children's food package. The State agency may, however, 
phase-in the new food packages on a participant category basis. To 
minimize participant and vendor confusion, the Department proposes that 
once the State agency begins issuing the new food packages, it must be 
done on a Statewide basis.

      Proposed Timelines for Implementation of Food Package Changes
------------------------------------------------------------------------
                                                       Timeframe for
     Food package category      Who may implement      implementation
------------------------------------------------------------------------
Pregnant Women................  All State          One Year from
                                 Agencies.          Publication of
                                                    Interim Rule.
Postpartum Women..............  All State          One Year from
                                 Agencies.          Publication of
                                                    Interim Rule.
Fully Breastfeeding Women       All State          One Year from
                                 Agencies.          Publication of
                                                    Interim Rule.
Partially Breastfeeding Women   Not More Than 32   One Year from
                                 sites (4 sites     Publication of
                                 within each of     Interim Rule (The
                                 up to 8 State      selected sites will
                                 agencies)          have authority to
                                                    issue the revised
                                                    packages for no more
                                                    than 3 years.)
Fully Formula fed Infants.....  All State          One Year from
                                 Agencies.          Publication of
                                                    Interim Rule.
Partially Breastfed Infants...  The sites          One Year from
                                 selected for the   Publication of
                                 Partially          Interim Rule (The
                                 Breastfeeding      selected sites will
                                 Women's Package    have authority to
                                                    issue the revised
                                                    packages for no more
                                                    than 3 years.)

[[Page 44809]]

 
Fully Breastfed Infants.......  All State          One Year from
                                 Agencies.          Publication of
                                                    Interim Rule.
Juice Elimination from Infant   All State          Six months from
 Food Packages.                  Agencies.          Publication of
                                                    Interim Rule.
Children......................  All State          One Year from
                                 Agencies.          Publication of
                                                    Interim Rule.
Participants with Certain       All State          One Year from
 Medical Conditions (Women,      Agencies.          Publication of
 Infants and Children)                              Interim Rule.
------------------------------------------------------------------------

VI. Endnotes

    (1) NAWD (National Association of WIC Directors) 2000. ``NAWD 
WIC Food Prescription Recommendations, 2000.'' Copies may be 
purchased by telephoning the National WIC Association at (202) 232-
5492.
    (2) NWA (National WIC Association). 2003. ``NWA WIC Culturally 
Sensitive Food Prescription Recommendations.'' Position Paper No. 
03-001. Copies may be purchased by telephoning the National WIC 
Association at (202) 232-5492.
    (3) Institute of Medicine, National Academy of Sciences. ``WIC 
Food Packages: Time for a Change,'' 2005. Available at Internet 
site: http://www.fns.usda.gov/oane/menu/Published/WIC/FILES/Time4AChange(mainrpt).pdf.
    (4) Institute of Medicine, National Academy of Sciences, 1997. 
Dietary
    Reference Intakes for Calcium, Phosphorus Magnesium, Vitamin D, 
and Fluoride. Washington, DC: National Academy Press.
    (5) Institute of Medicine, National Academy of Sciences, 1998. 
Dietary Reference Intakes for Thiamin, Riboflavin, Niacin, Vitamin 
B<INF>6</INF>, Folate, Vitamin B<INF>12</INF>, Pantothenic acid, 
Biotin and Choline. Washington, DC: National Academy Press, 1998.
    (6) Institute of Medicine, National Academy of Sciences, 2000. 
Dietary Reference Intakes for Vitamin C, Vitamin E, Selenium, and 
Carotenoids. Washington, DC: National Academy Press.
    (7) Institute of Medicine, National Academy of Sciences, 2001. 
Dietary Reference Intakes for Vitamin A, Vitamin K, Arsenic, Boron, 
Chromium, Copper, Iodine, Iron, Manganese, Molybdenum, Nickel, 
Silicon, Vanadium, and Zinc. Washington, DC: National Academy Press.
    (8) Institute of Medicine, National Academy of Sciences, 2002a. 
Dietary Reference Intakes for Energy, Carbohydrate, Fiber, Fat, 
Fatty Acids, Cholesterol, Protein, and Amino Acids. Washington, DC: 
National Academy Press.
    (9) Institute of Medicine, National Academy of Sciences, 2004. 
Dietary Reference Intakes for Water, Potassium, Sodium, Chloride, 
and Sulfate. Washington, DC: National Academies Press.
    (10) USDA/FNS. WIC Participant and Program Characteristics, 
2002. Executive Summary. Available at Internet site: http://www.fns.usda.gov/oane/MENU/Published/WIC/FILES/PC2002ExecSum.pdf.
    (11) Institute of Medicine, National Academy of Sciences, 2000. 
``Dietary Reference Intakes: Applications in Dietary Assessment.'' 
National Academy Press.
    (12) U.S. Department of Health and Human Services/U.S. 
Department of Agriculture, Dietary Guidelines for Americans, 2005. 
Available at Internet site: http://www.healthierus.gov/dietaryguidelines/.
    (13) Institute of Medicine, National Academy of Sciences, 2001. 
``Dietary Reference Intakes for Vitamin A, Vitamin K, Arsenic, 
Boron, Chromium, Cooper, Iodine, Iron, Manganese, Molybdenum, 
Nickel, Silicon, Vanadium, and Zinc.'' National Academy Press.
    (14) American Academy of Pediatrics, Committee on Nutrition. 
``The use and misuse of fruit juice in pediatrics.'' ``Pediatrics'' 
107(5):1210-1213, May 2001. Available at Internet site: http://www.aap.org/policy/re0047.html.
    (15) American Academy of Pediatrics, Committee on Nutrition, 
2004. ``Pediatric Nutrition Handbook.'' 5th edition.
    (16) U. S. Department of Health and Human Services, ``Healthy 
People 2010: Understanding and Improving Health, 2nd edition.'' U.S. 
Government Printing Office. Available at Internet site: http://www.healthypeople.gov/document.
    (17) American Academy of Pediatrics, Section on Breastfeeding, 
2005. ``Breastfeeding and the use of human milk.'' ``Pediatrics'' 
115(2):496-596. Available at Internet site: http://aappolicy.aappublications.org/cgi/content/full/pediatrics;115/2/496.
    (18) Herman, DR. ``Are economic incentives useful for improving 
dietary quality among WIC participants and their families'' 
Presentation at the public forum on Impact of Changes in the WIC 
Food packages. Committee to Review the WIC Food Packages, Institute 
of Medicine,. Los Angeles, CA , July 22, 2004.
    (19) Runnings, S. ``Mother Infant and Child Harvest (MICH): 
Fruit and Vegetable Pilot Program.'' Presentation at the workshop on 
Impact of Changes in the WIC Food Packages. Committee to Review the 
WIC Food Packages, Institute of Medicine. Los Angeles, CA, July 22, 
2004.
    (20) U.S. Department of Agriculture, Agricultural Research 
Service. USDA Nutrient Database for Standard Reference, Release 17, 
2004. Nutrient Data Laboratory Home Page at http://www.nal.usda.gov/fnic/foodcomp/.
    (21) Oliveira, V., Chandran, R. ``Children's Consumption of WIC-
Approved Foods.'' Food Assistance and Nutrition Research Report No. 
44. Available at Internet site: http://www.ers.usda.gov/publications/fanrr44/fanrr44.pdf.
    (22) Environmental Protection Agency/Food and Drug 
Administration. ``What You Need to Know About Mercury in Fish and 
Shellfish.'' EPA and FDA Advice for: Women Who Might Become 
Pregnant, Women Who Are Pregnant, Nursing Mothers, and Young 
Children. 2004. Available at Internet site: http://www.cfsan.fda.gov/dms/admehg3.html.

VII. Procedural Matters

Executive Order 12866

    This proposed rule has been determined to be economically 
significant and was reviewed by the Office Management and Budget in 
conformance with Executive Order 12866.

Regulatory Impact Analysis

    As required for all rules that have been designated as Significant 
by the Office of Management and Budget, a Regulatory Impact Analysis 
(RIA) was developed for this proposed rule. It follows this regulation 
as an Appendix. The conclusions of this analysis are summarized below.
    Need for Action. As the population served by WIC has grown and 
become more diverse over the last 20 years, the nutritional risks faced 
by participants have changed, and though nutrition science has 
advanced, the WIC supplemental food packages have remained largely 
unchanged. A rule is needed to implement recommended changes to the WIC 
food packages based on the current nutritional needs of WIC 
participants and advances in nutrition science.
    Benefits. Benefits of this rule include bringing the WIC food 
packages in line with the 2005 Dietary Guidelines for Americans and 
current infant feeding practice guidelines of the American Academy of 
Pediatrics, better promoting and supporting the establishment of 
successful long-term breastfeeding, providing WIC participants with a 
wider variety of food, providing WIC State agencies with greater 
flexibility in prescribing food packages to accommodate participants 
with cultural food preferences, and serving all participants with 
certain medical conditions under one food package to facilitate 
efficient management of medically fragile participants.

[[Page 44810]]

    Costs. FNS estimates that the provisions in this proposed rule will 
have minimal impact on total costs over 5 years.

Regulatory Flexibility Act

    This proposed rule has been reviewed with regard to the 
requirements of the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-
612). Pursuant to that review, Eric M. Bost, Under Secretary, Food, 
Nutrition and Consumer Services, has determined that this rule will not 
have a significant economic impact on a substantial number of small 
entities. State and local agencies and WIC recipients will be most 
affected by the rule and WIC authorized vendors and the food industry 
may be indirectly affected. The proposed rule would provide State and 
local agencies with increased flexibility in meeting food package 
requirements for the Program. Vendors and the food industry would 
realize increased sales of some foods and decreases in other foods, 
with an overall neutral effect on sales nationally.
    Although not required by the Regulatory Flexibility Act, FNS has 
prepared an Initial Regulatory Flexibility Analysis (IRFA) describing 
the impact of this proposed rule on small entities. Written public 
comments are requested on this IRFA. Comments must be identified as 
responses to the IRFA and must be filed by the deadline for comments as 
provided in the Dates section. Additional analysis of the regulatory 
flexibility considerations of this proposed rule may be found in the 
Regulatory Impact Analysis section of this preamble and the cited RIA 
itself.
Need for, and Objectives of, the Proposed Rule
    This proposed rule would revise regulations governing the WIC food 
packages to change the maximum monthly allowances and minimum 
requirements for certain supplemental foods, and add new foods such as 
fruits, vegetables and whole grains. The revisions largely reflect 
recommendations made by the Institute of Medicine of the National 
Academies in its Report ``WIC Food Packages: Time for a Change''. These 
revisions would bring the WIC food packages in line with the 2005 
Dietary Guidelines for Americans and current infant feeding practice 
guidelines of the American Academy of Pediatrics, better promote and 
support the establishment of successful long-term breastfeeding, 
provide WIC participants with a wider variety of food, and provide WIC 
State agencies with greater flexibility in prescribing food packages to 
accommodate participants with cultural food preferences.
Description and Estimate of Number of Small Entities to Which the 
Proposed Rule Would Apply
    This proposed rule would have a direct application only to WIC 
State agencies with respect to their selection of foods to be included 
on their food lists. As a result, vendors and the food industry would 
realize increased sales of some foods and decreases in other foods, 
with an overall neutral effect on sales nationally. The rule may have 
an indirect economic affect on certain small businesses because they 
may have to carry a larger variety of certain foods to be eligible for 
authorization as a WIC vendor. Currently, approximately 45,000 stores 
are authorized to accept WIC food instruments, some of which are small 
businesses. With the high degree of State flexibility allowable under 
this proposed rule, small vendors will be impacted differently in each 
State depending upon how that State chooses to meet the proposed 
requirements. It is therefore not feasible to accurately estimate the 
rule's impact on small vendors. Since neither FNS nor the State 
agencies regulate food producers under the WIC program, it is not known 
how many small entities within that industry may be indirectly affected 
by the proposed rule. However, such entities are encouraged to comment 
on this IRFA and the proposed rule and their comments will be 
considered in the development of the final rule.
Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements
    This proposed rule provides State agencies with greater flexibility 
in prescribing food packages to WIC participants. The information 
collection burden estimated for this proposal is 14,598 hours. The 
burden reflects requirements associated with medical documentation for 
the issuance of any supplemental foods issued to participants who 
receive Food Package III; any authorized soy-based beverage or tofu 
issued to children who receive Food Package IV; and, any additional 
authorized tofu and cheese issued to women who receive Food Packages V 
and VII that exceeds the maximum substitution rate.
Steps Taken to Minimize Significant Economic Impact on Small Entities, 
and Significant Alternatives Considered
    FNS has considered significant alternatives in developing this 
proposed rule including those that may reduce impact on small business. 
These considerations include (among others) the establishment of 
differing compliance or reporting requirements or timetables that take 
into account the resources available to small entities; the 
clarification, consolidation, or simplification of compliance and 
reporting requirements under the rule for small entities; the use of 
performance, rather than design, standards; and an exemption from 
coverage of the rule, or any part thereof, for small entities.
    In general, the alternatives of exempting small entities from the 
requirements proposed in this rule or altering the requirements for 
small entities were rejected. The WIC food packages provide 
supplemental foods designed to address the nutritional needs of low-
income pregnant, breastfeeding, non-breastfeeding postpartum women, 
infants and children up to age five who are at nutritional risk. 
Exempting small entities from providing the specific foods intended to 
address the nutritional needs of participants or altering the 
requirements for small entities would undermine the purpose of the WIC 
Program and endanger the health status of participants.
    FNS has, however, modified the new food provision in an effort to 
mitigate the impact on small entities. Currently, State agencies must 
establish minimum requirements for the variety and quantity of foods 
that a vendor must stock in order to receive WIC Program authorization. 
This proposal would add new food items, such as fruits and vegetables 
and whole grain breads, which may require some WIC vendors, 
particularly smaller stores, to expand the types and quantities of food 
items stocked in order to maintain their WIC authorization. In 
addition, vendors would also have to make available more than one food 
type from each WIC food category, except for the categories of peanut 
butter and eggs, which may be a change for some vendors. To mitigate 
the impact of the fruit and vegetable requirement, the proposal allows 
canned, frozen and dried fruits and vegetables to be substituted for 
fresh produce.
Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rule
    There are no federal rules that may duplicate, overlap, or conflict 
with the provisions of this proposed rule.

[[Page 44811]]

Public Law 104-4, Unfunded Mandates Reform Act of 1995 (UMRA)

    Title II of the UMRA establishes requirements for Federal agencies 
to assess the effects of their regulatory actions on State, local, and 
tribal governments and the private sector. Under Section 202 of the 
UMRA, the Department generally must prepare a written statement, 
including a cost/benefit analysis, for proposed and final rules with 
``Federal mandates'' that may result in expenditures to State, local, 
or tribal governments, in the aggregate, or to the private sector, of 
$100 million or more in any one year. When such a statement is needed 
for a rule, section 205 of the UMRA generally requires the Department 
to identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, more cost-effective or least burdensome 
alternative that achieves the objectives of the rule.
    This proposed rule contains no Federal mandates (under the 
regulatory provisions of Title II of the UMRA) that impose costs on 
State, local, or tribal governments or to the private sector of $100 
million or more in any one year. This rule is, therefore, not subject 
to the requirements of sections 202 and 205 of the UMRA.

Executive Order 12372

    The Special Supplemental Nutrition Program for Women, Infants and 
Children (WIC) is listed in the Catalog of Federal Domestic Assistance 
under No. 10.557. For reasons set forth in the final rule in 7 CFR part 
3015, Subpart V and related Notice (48 FR 29114, June 24, 1983), this 
Program is included in the scope of Executive Order 12372, which 
requires intergovernmental consultation with State and local officials.

Federalism Summary Impact Statement

    Executive Order 13132 requires Federal agencies to consider the 
impact of their regulatory actions on State and local governments. 
Where such actions have federalism implications, agencies are directed 
to provide a statement for inclusion in the preamble to the regulations 
describing the agency's considerations in terms of the three categories 
called for under section (6)(b)(2)(B) of Executive Order 13132.
Prior Consultation With WIC State and Local Agency Officials
    Over the years the Department has received numerous requests from 
WIC State and local agencies to modify the current food packages to 
permit greater substitution of foods or introduction of additional 
foods. These requests have come from formal and informal discussions 
and with State and local officials on an ongoing basis regarding 
program implementation and food package policy issues, and from written 
proposals and comments submitted to FNS by WIC State and local agencies 
to allow modifications and/or substitutions to the WIC food packages. 
Requests for revisions to the WIC food packages have also been received 
from Congress, participants, and organizations with interests in the 
welfare of WIC participants.
    Examples of the different forums and methods FNS has used over the 
years to solicit WIC State and local agency staff input on the WIC food 
packages include the following.
    <bullet> Publishing an advanced notice of public rulemaking (ANPRM) 
in 2003 to solicit comments to determine if the WIC food packages 
should be revised to better improve the nutritional intake, health and 
development of participants; and, if so, what specific changes should 
be made to the food packages. In response to the ANPRM, FNS received 
195 total comments;
    <bullet> Commissioning the National Academies' Institute of 
Medicine (IOM) to independently review the WIC Food Packages. IOM 
solicited public comment on revisions to the WIC food packages, via 3 
public hearings, letters and e-mail, throughout its 22-month study 
period. IOM considered these comments, as well as comments the 
Department received in response to the ANPRM, in developing 
recommendations to revise the WIC food packages. IOM published its 
reports of these recommendations on April 27, 2005: ``WIC Food 
Packages: Time for a Change.'' <SUP>(3)</SUP> This proposed rule 
incorporates IOM?s recommendations;
    <bullet> Holding nine public outreach sessions across the nation as 
part of FNS' development of its 2004 reauthorization proposals. 
Interested parties, including WIC State and local staff, offered oral 
testimony and written statements on the WIC food packages as well as on 
a variety of other WIC issues;
    <bullet> Hosting annual meetings (1977-present) of the National 
Advisory Council on Maternal, Infant and Fetal Nutrition that includes 
WIC staff as members of the Council; the Council develops 
recommendations for FNS on how to improve operations of the WIC and 
Commodity Supplemental Food Programs, including aspects related to the 
authorized foods and food packages; and
    <bullet> Consulting and collaborating with NWA on a wide variety of 
WIC issues, including those related to the WIC food packages (1983-
present). NWA is a non-profit organization that was founded in 1983 by 
State and local agencies that administer the WIC Program. As of June 1, 
2005, its paid membership included 73 of the 89 WIC State agencies, 675 
local agencies, 4 State WIC Associations, and 18 sustaining members 
(i.e., for-profit and non-profit businesses or organizations). 
Functioning as a coalition of WIC agencies, NWA is dedicated to 
maximizing WIC resources through effective management practices. NWA 
also serves in a leadership role for WIC agencies by developing 
position papers on issues of concern to the WIC community.
Nature of Concerns and the Need To Issue This Rule
    <bullet> Congress has requested a WIC food package rule that 
includes fruits and vegetables and allows for cultural food 
accommodations. Starting in fiscal year 2001, Congress has directed the 
Department, in language accompanying WIC appropriations bills, to move 
expeditiously to publish a proposed food package rule for public 
comment;
    <bullet> The National Advisory Council on Maternal, Infant, and 
Fetal Nutrition, in its 1992, 1996 and 2002 Reports to Congress, 
recommended better accommodation of the nutritional and cultural needs 
of WIC participants through the WIC food packages; and
    <bullet> In 1999, NWA (then the National Association of WIC 
Directors (NAWD)) published a position paper entitled ``NAWD WIC Food 
Prescription Recommendations'' <SUP>(1)</SUP> and in 2003, NWA 
published a position paper entitled ``NWA WIC Culturally Sensitive Food 
Prescription Recommendations.'' <SUP>(2)</SUP> NWA's major 
recommendations in these two reports were to reframe the WIC food 
packages to be consistent with the Dietary Guidelines for Americans and 
allow State agencies flexibility to accommodate cultural eating 
patterns.
    Based upon the need to address the nutritional needs of the WIC 
population given current scientific information and consumption 
patterns as exemplified by the concerns and recommendations of NWA, and 
others, FNS was aware of the need to revise the WIC food packages.
Extent to Which We Meet Those Concerns
    FNS has considered the impact of the proposed rule on State and 
local agencies. FNS believes that the recommendations in the IOM 
Report, which are largely laid out in this proposed rule, are 
responsive to the expressed concerns and requests of

[[Page 44812]]

commenters representing State and local concerns.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. This rule is intended to have preemptive effect with 
respect to any State or local laws, regulations or policies which 
conflict with its provisions or which would otherwise impede its full 
implementation. This rule is not intended to have retroactive effect 
unless so specified in the DATES paragraph of the preamble of the 
interim rule. Prior to any judicial challenge to the provisions of this 
rule or the application of its provisions, all applicable 
administrative procedures must be exhausted.

Civil Rights Impact Analysis

    FNS has reviewed this proposed rule in accordance with the 
Department Regulation 4300-4, ``Civil Rights Impact Analysis,'' to 
identify and address any major civil rights impacts the rule might have 
on minorities, women, and persons with disabilities. After a careful 
review of the rule's intent and provisions, and the characteristics of 
WIC Program applicants and participants, FNS has determined that it 
does not have a deleterious effect on the participation of protected 
individuals in the WIC Program. All data available to FNS indicate that 
protected individuals have the same opportunity to participate in the 
WIC Program as non-protected individuals. FNS specifically prohibits 
State and local agencies operating the WIC Program from discrimination 
based on race, color, national origin, sex, age, or disability. Section 
246.8(a) of WIC regulations requires State agencies to ensure that no 
person will be excluded from participation based on race, color, 
national origin, age, sex or disability. Where State agencies have 
options, and they choose to implement a certain provision, they must 
implement it in such a way that it complies with the regulations at 
Sec.  246.8.
    This rule merely addresses revisions to the WIC food packages to 
bring them into line with the DGA 2005 <SUP>(12)</SUP> and current 
infant feeding recommendations from the American Academy of Pediatrics. 
Several provisions are specifically designed to better accommodate 
WIC's highly diverse population. This proposed rule provides WIC State 
agencies with greater flexibility in prescribing food packages to 
accommodate participants with cultural food preferences, including 
allowing participants a broad selection of fruits and vegetables; tofu 
and soy-based beverages as substitutes for milk; participant choice for 
whole grains (including tortillas); and salmon and sardines as 
substitutions for tuna. This proposed rule also makes provisions to 
better accommodate the special dietary needs of high-risk participants 
served in Food Package III, helping to protect the health and well-
being of this nutritionally vulnerable subset of WIC participants.

Paperwork Reduction Act (60-Day Notice)

    The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; see 5 CFR 
part 1320) requires that OMB approve all collections of information by 
a Federal agency from the public before they can be implemented. 
Respondents are not required to respond to any collection of 
information unless it displays a current valid OMB control number. This 
proposed rule contains information collections that are subject to 
review and approval by OMB; therefore, FNS has submitted an information 
collection which contains the changes in burden from adoption of the 
proposals in the rule, for OMB's review and approval.
    Comments on the information collection in this proposed rule must 
be received by October 6, 2006.
    Send comments to the Office of Information and Regulatory Affairs, 
OMB, Attention: Desk Officer for FNS, Washington, DC, 20503. Please 
also send a copy of your comments to Patricia N. Daniels, Director, 
Supplemental Food Programs Division, Food and Nutrition Service, U.S. 
Department of Agriculture, 3101 Park Center Drive, Room 528, 
Alexandria, Virginia 22302. For further information, or for copies of 
the information collection requirements, please contact Debra Whitford 
at the address indicated above.
    Comments are invited on (a) whether the proposed collection of 
information is necessary for the proper performance of the Agency's 
functions, including whether the information will have practical 
utility; (b) the accuracy of the Agency's estimate of the proposed 
information collection burden, including the validity of the 
methodology and assumptions used; (c) ways to enhance the quality, 
utility and clarity of the information to be collected; and, (d) ways 
to minimize the burden of the collection of information on those who 
are to respond, including use of appropriate automated, electronic, 
mechanical, or other technological collection techniques or other forms 
of information technology.
    All responses to this request for comments will be summarized and 
included in the request for OMB approval. All comments will also become 
a matter of public record.
    Title: WIC Food Packages.
    OMB Number: Not Assigned.
    Expiration Date: Not Yet Determined.
    Type of Request: New.
    Abstract: This rule proposes revisions to the food packages to 
bring them in line with the 2005 Dietary Guidelines for Americans and 
current infant feeding practice guidelines of the American Academy of 
Pediatrics. The revisions would also: better promote and support the 
establishment of successful long-term breastfeeding, provide WIC 
participants with a wider variety of foods, provide WIC State agencies 
with greater flexibility in prescribing food packages to accommodate 
participants with cultural preferences, and serve participants with 
certain qualifying conditions under one food package to facilitate 
efficient management of medically fragile participants.
    The average burden per response and the annual burden hours are 
explained below and summarized in the chart which follows.
    Respondents for this Rule: Individuals or households and State, 
Local or Tribal Governments.
    Estimated Number of Respondents: 152,783.
    Estimated Number of Responses per Respondent: 2.
    Estimate Average Hours per Response: 0.05.
    Estimated Total Annual Burden on Respondents: 14,598 Hours.

                               Estimated Annual Reporting And Recordkeeping Burden
----------------------------------------------------------------------------------------------------------------
                                                                 Number
         Section of regulations           Annual number of    responses per    Average burden     Annual burden
                                             respondents       respondent       per response          hours
----------------------------------------------------------------------------------------------------------------
Reporting Burden:
    Sec.   246.10(d)....................           142,783                 2              0.05            14,728
Recordkeeping Burden:

[[Page 44813]]

 
    Sec.   246.10(d)....................            10,000                 2             0.016               320
                                         -----------------------------------------------------------------------
        Total Reporting and                        152,783                 2              0.05            14,598
         Recordkeeping Burden in the
         Proposed Rule..................
----------------------------------------------------------------------------------------------------------------

1. Reporting
    Sections 246.10(d) would require medical documentation for the 
issuance of any supplemental foods issued to participants who receive 
Food Package III; any authorized soy-based beverage or tofu issued to 
children who receive Food Package IV; and, any additional authorized 
tofu and cheese issued to women who receive Food Packages V and VII 
that exceeds the maximum substitution rate.
    In addition, the content of the medical documentation would be 
expanded to include: (1) Contact information for the participant's 
healthcare provider making the medical determination; (2) date of 
medical determination; (3) the specific supplemental foods to be 
prescribed; (4) amount prescribed per day; (5) the medical 
determination of the qualifying conditions which warrants the 
supplemental foods; and (6) the length of time the supplemental foods 
is medically required.
    FNS estimates that approximately 1 percent of participants (86,375) 
will be issued supplemental foods under Food Package III; 1 percent of 
children (42,408) will be authorized soy-based beverage or tofu under 
Food Package IV; and, 1 percent of women (14,000) will be authorized 
tofu and cheese in excess of the maximum substitution rate under Food 
Packages V and VII. Further, FNS estimates that it will take three 
minutes (0.05 person hours) for the documentation required to issue the 
authorized foods. Thus, the estimated reporting burden is 14,278 
(142,783 total participants x 0.05 person hours x 2 certification 
periods per year).
2. Recordkeeping
    FNS estimates that it will take one minute (0.016 per record) for 
each clinic (10,000 clinics) to file the required medical documentation 
provided by participants, for an estimated burden of 320 hours (10,000 
clinics x 0.016 hours per record x 2 times per year).

E-Government Act Compliance

    The Food and Nutrition Service is committed to complying with the 
E-Government Act to promote the use of the Internet and other 
information technologies to provide increased opportunities for citizen 
access to Government information and services, and for other purposes.

List of Subjects in 7 CFR Part 246

    Administrative practice and procedure, Civil rights, Food 
assistance programs, Grant programs--health, Grant programs--social 
programs, Indians, Infants and children, Maternal and child health, 
Nutrition, Penalties, Reporting and recordkeeping requirements, Women.

    For reasons set forth in the preamble, 7 CFR part 246 is proposed 
to be amended as follows:

PART 246--SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS 
AND CHILDREN

    1. The authority citation for part 246 continues to read as 
follows:

    Authority: 42 U.S.C. 1786.

    2. In Sec.  246.2:
    a. Revise the definition of ``Participation''; and
    b. Amend the definition of ``WIC-eligible medical foods'' by 
removing the words ``for individuals with a diagnosed medical 
condition'' and adding in their place the words ``for women or children 
with a qualifying condition'', and by revising the second sentence.
    The revisions read as follows:


Sec.  246.2  Definitions.

* * * * *
    Participation means the sum of:
    (1) The number of persons who received supplemental foods or food 
instruments during the reporting period;
    (2) The number of infants who did not receive supplemental foods or 
food instruments but whose breastfeeding mother received supplemental 
foods or food instruments during the report period; and
    (3) The number of breastfeeding women who did not receive 
supplemental foods or food instruments but whose infant received 
supplemental foods or food instruments during the report period.
* * * * *
    WIC-eligible medical foods * * * Such WIC-eligible medical foods 
must serve the purpose of a food, meal or diet (may be nutritionally 
complete or incomplete) and provide a source of calories and one or 
more nutrients; be designed for enteral digestion via an oral or tube 
feeding; and may not be a conventional food, drug, flavoring, or 
enzyme.* * *
    3. Revise Sec.  246.10 to read as follows:


Sec.  246.10  Supplemental foods.

    (a) General. This section prescribes the requirements for providing 
supplemental foods to participants. The State agency must ensure that 
local agencies comply with this section.
    (b) State agency responsibilities. (1) State agencies may:
    (i) Establish criteria in addition to the minimum Federal 
requirements in Table 4 of paragraph (e)(12) of this section for the 
supplemental foods in their States. These State criteria could address, 
but not be limited to, other nutritional standards, competitive cost, 
State-wide availability, and participant appeal; and
    (ii) Make food package adjustments to better accommodate 
participants who are homeless. At the State agency's option, these 
adjustments would include, but not be limited to, issuing authorized 
supplemental foods in individual serving-size containers to accommodate 
lack of food storage or preparation facilities.
    (2) State agencies must:
    (i) Identify the brands of foods and package sizes that are 
acceptable for use in the Program in their States in accordance with 
the requirements of this section. State agencies must also provide to 
local agencies a list of acceptable foods and their maximum monthly 
allowances as specified in Tables 1 through 3 of paragraphs (e)(9) 
through (e)(11) of this section; and
    (ii) Ensure that local agencies:
    (A) Make available to participants the maximum monthly allowances 
of authorized supplemental foods, except as noted in paragraph (c) of 
this section, and abide by the authorized substitution rates for WIC 
food substitutions as specified in Tables 1 through 3 of paragraphs 
(e)(9) through (e)(11) of this section;
    (B) Make available to participants more than one food from each WIC 
food

[[Page 44814]]

category except for the categories of peanut butter and eggs, and at 
least two fruits and two vegetables from the category of fruits and 
vegetables (fresh or processed) in each authorized food package as 
listed in paragraph (e) of this section;
    (C) Authorize only a competent professional authority to prescribe 
the categories of authorized supplemental foods in quantities that do 
not exceed the regulatory maximum and are appropriate for the 
participant, taking into consideration the participant's age and 
nutritional needs; and
    (D) Advise participants or their caretaker, when appropriate, that 
the supplemental foods issued are only for their personal use. However, 
the supplemental foods are not authorized for participant use while 
hospitalized on an in-patient basis. In addition, consistent with Sec.  
246.7(n)(1)(i)(B), supplemental foods are not authorized for use in the 
preparation of meals served in a communal food service. This 
restriction does not preclude the provision or use of supplemental 
foods for individual participants in a nonresidential setting (e.g., 
child care facility, family day care home, school, or other educational 
program); a homeless facility that meets the requirements of Sec.  
246.7(n)(1); or, at the State agency's discretion, a residential 
institution (e.g., home for pregnant teens, prison, or residential drug 
treatment center) that meets the requirements currently set forth in 
Sec.  246.7(n)(1) and (n)(2).
    (c) Nutrition tailoring. The full maximum monthly allowances of all 
supplemental foods in all food packages must be made available to 
participants if medically or nutritionally warranted. Reductions in 
these amounts cannot be made for cost-savings, administrative 
convenience, caseload management, or to control vendor abuse. 
Reductions in these amounts cannot be made for categories, groups or 
subgroups of WIC participants. The provision of less than the maximum 
monthly allowances of supplemental foods to an individual WIC 
participant in all food packages is appropriate only when:
    (1) Medically or nutritionally warranted (e.g., to eliminate a food 
due to a food allergy);
    (2) A participant refuses or cannot use the maximum monthly 
allowances; or
    (3) The quantities necessary to supplement another programs' 
contribution to fill a medical prescription would be less than the 
maximum monthly allowances.
    (d) Medical documentation--(1) Supplemental foods requiring medical 
documentation. Medical documentation is required for the issuance of 
the following supplemental foods:
    (i) Any non-contract brand infant formula;
    (ii) Any infant formula prescribed to a child or adult who receives 
Food Package III;
    (iii) Any exempt infant formula;
    (iv) Any WIC-eligible medical food;
    (v) Any authorized supplemental food issued to participants who 
receive Food Package III;
    (vi) Any authorized soy-based beverage or tofu issued to children 
who receive Food Package IV;
    (vii) Any additional authorized cheese issued to children who 
receive Food Package IV that exceeds the maximum substitution rate;
    (viii) Any additional authorized tofu and cheese issued to women 
who receive Food Packages V and VII that exceeds the maximum 
substitution rate; and
    (ix) Any contract brand infant formula that does not meet the 
requirements in Table 4 of paragraph (e)(12) of this section.
    (2) Supplemental foods not requiring medical documentation. (i) 
State agencies may authorize local agencies to issue a non-contract 
brand infant formula that meets the requirements in Table 4 of 
paragraph (e)(12) of this section without medical documentation in 
order to meet religious eating patterns; and
    (ii) The State agency has the discretion to require medical 
documentation for any contract brand infant formula and may decide that 
some contract brand infant formula may not be issued under any 
circumstances.
    (3) Medical Determination. For purposes of this program, medical 
documentation means that a health care professional licensed to write 
medical prescriptions under State law has:
    (i) Made a medical determination that the participant has a 
qualifying condition as described in paragraphs (e)(3) through (e)(7) 
of this section that dictates the use of the supplemental foods, as 
described in paragraph (d)(1) of this section; and
    (ii) Provided the written documentation that meets the technical 
requirements described in paragraphs (d)(4)(ii) and (d)(4)(iii) of this 
section.
    (4) Technical Requirements--(i) Location. All medical documentation 
must be kept on file (electronic or hard copy) at the local clinic. The 
medical documentation kept on file must include the initial telephone 
documentation, when received as described in paragraph (d)(4)(iii)(B) 
of this section.
    (ii) Content. All medical documentation must include the following:
    (A) The name of the authorized WIC formula (infant formula, exempt 
infant formula, WIC-eligible medical food) prescribed, including amount 
needed per day;
    (B) The authorized supplemental food(s) appropriate for the 
qualifying condition(s) and their prescribed amounts;
    (C) Length of time the prescribed WIC formula and/or supplemental 
food is required by the participant;
    (D) The qualifying condition(s) for issuance of the authorized 
supplemental food(s) requiring medical documentation, as described in 
paragraphs (e)(3) through (e)(7) of this section; and
    (E) Signature, date and contact information (or name, date and 
contact information), if the initial medical documentation was received 
by telephone and the signed document is forthcoming, of the health care 
professional licensed by the State to write prescriptions in accordance 
with State laws.
    (iii) Written confirmation--(A) General. Medical documentation must 
be written and may be provided as an original written document, an 
electronic document, by facsimile or by telephone to a competent 
professional authority until written confirmation is received.
    (B) Medical documentation provided by telephone. Medical 
documentation may be provided by telephone to a competent professional 
authority who must promptly document the information. The collection of 
the required information by telephone for medical documentation 
purposes may only be used until written confirmation is received from a 
health care professional licensed to write medical prescriptions and 
used only when absolutely necessary on an individual participant basis. 
The local clinic must obtain written confirmation of the medical 
documentation within a reasonable amount of time (i.e., one or two 
week's time) after accepting the initial medical documentation by 
telephone.
    (5) Medical supervision requirements. Due to the nature of the 
health conditions of participants who are issued supplemental foods 
that require medical documentation, close medical supervision is 
essential for each participant's dietary management. The responsibility 
remains with the participant's health care provider for this medical 
oversight and instruction. This responsibility cannot be assumed by 
personnel at the WIC State or local

[[Page 44815]]

agency. However, it would be the responsibility of the WIC competent 
professional authority to ensure that only the amounts of supplemental 
foods prescribed by the participant's health care provider are issued 
in the participant?s food package.
    (e) Food packages. There are seven food packages available under 
the Program that may be provided to participants. The authorized 
supplemental foods must be prescribed from food packages according to 
the category and nutritional needs of the participant. The food 
packages are as follows:
    (1) Food Package I--Infants birth through 5 months--(i) Participant 
category served. This food package is designed for issuance to infant 
participants from birth through age 5 months who do not have a 
condition qualifying them to receive Food Package III.
    (ii) Infant feeding categories--(A) Birth through one month. Two 
infant feeding options are available during the first month after 
birth--fully breastfeeding, i.e., the infant receives no infant formula 
from the WIC Program, or fully formula-feeding. Infant formula is not 
provided during the first month after birth to fully breastfed infants 
to support the successful establishment of breastfeeding.
    (B) Two through 5 months. Three infant feeding options are 
available from 2 months through 5 months--fully breastfeeding, fully 
formula-feeding, or partially breastfeeding, i.e., the infant is 
breastfed but also receives infant formula from the WIC Program in an 
amount not to exceed approximately half the amount of infant formula 
allowed for a fully formula fed infant.
    (iii) Infant formula requirements. This food package provides iron-
fortified infant formula that is not an exempt infant formula. The 
issuance of any contract brand or noncontract brand infant formula that 
contains less than 10 milligrams of iron per liter at standard dilution 
(i.e., approximately 20 kilocalories per fluid ounce of prepared 
formula) is prohibited. Except as specified in paragraph (d) of this 
section, local agencies must issue a contract brand infant formula that 
meets the requirements in Table 4 of paragraph (e)(12) of this section.
    (iv) Physical forms. Local agencies must issue all WIC formulas 
(WIC formulas mean all infant formula, exempt infant formula and WIC-
eligible medical foods) in concentrated liquid or powder physical 
forms. Ready-to-feed WIC formulas may be authorized when the competent 
professional authority determines and documents that:
    (A) The participant's household has an unsanitary or restricted 
water supply or poor refrigeration;
    (B) The person caring for the participant may have difficulty in 
correctly diluting concentrated or powder forms; or
    (C) The WIC infant formula is only available in ready-to-feed.
    (v) Authorized category of supplemental foods. Infant formula is 
the only category of supplemental foods authorized in this food 
package. Exempt infant formulas and WIC-eligible medical foods are 
authorized only in Food Package III.
    (2) Food Package II--Infants 6 through 11 months--(i) Participant 
category served. This food package is designed for issuance to infant 
participants from 6 through 11 months of age who do not have a 
condition qualifying them to receive Food Package III.
    (ii) Infant feeding options. Three infant feeding options are 
available--fully breastfeeding, fully formula-feeding, or partially 
breastfeeding.
    (iii) Infant formula requirements. The requirements for issuance of 
infant formula in Food Package I, specified in paragraphs (e)(1)(iii) 
and (e)(1)(iv) of this section, also apply to the issuance of infant 
formula in Food Package II.
    (iv) Authorized categories of supplemental foods. Infant formula, 
infant fruits and vegetables, infant meat, and infant cereal are the 
categories of supplemental foods authorized in this food package.
    (3) Food Package III--Participants with qualifying conditions--(i) 
Participant category served and qualifying conditions. This food 
package is reserved for issuance to women, infants and child 
participants who have a documented qualifying condition that requires 
the use of a WIC formula (infant formula, exempt infant formula or WIC-
eligible medical food) because the use of conventional foods is 
precluded, restricted, or inadequate to address their special 
nutritional needs. Medical documentation must meet the requirements 
described in paragraph (d) of this section. Participants who are 
eligible to receive this food package must have one or more qualifying 
conditions, as determined by a health care professional licensed to 
write medical prescriptions under State law. The qualifying conditions 
include but are not limited to premature birth, low birth weight, 
failure to thrive, inborn errors of metabolism and metabolic disorders, 
gastrointestinal disorders, malabsorption syndromes, immune system 
disorders, severe food allergies that require an elemental formula, and 
life threatening disorders, diseases and medical conditions that impair 
ingestion, digestion, absorption or the utilization of nutrients that 
could adversely affect the participant's nutrition status. This food 
package may not be issued solely for the purpose of enhancing nutrient 
intake or managing body weight.
    (ii) Non-authorized issuance of Food Package III. This food package 
is not authorized for:
    (A) Infants whose only condition is:
    (1) A diagnosed formula intolerance or food allergy to lactose, 
sucrose, milk protein or soy protein that does not require the use of 
an exempt infant formula ; or
    (2) A non-specific formula or food intolerance.
    (B) Women and children who have a food intolerance to lactose or 
milk protein that can be successfully managed with the use of one of 
the other WIC food packages (i.e., Food Packages IV-VII); or
    (C) Any participant solely for the purpose of enhancing nutrient 
intake or managing body weight without an underlying qualifying 
condition.
    (iii) Restrictions on the issuance of WIC formulas in ready-to-feed 
(RTF) forms. WIC State agencies must issue WIC formulas (infant 
formula, exempt infant formula and WIC-eligible medical foods) in 
concentrated liquid or powder physical forms unless the requirements 
for issuing RTF are met as described in paragraph (e)(1)(iv) of this 
section. In addition to those requirements, there are two additional 
conditions which may be used to issue RTF in Food Package III:
    (A) If a ready-to-feed form better accommodates the participant's 
condition; or
    (B) If it improves the participant's compliance in consuming the 
prescribed WIC formula.
    (iv) Unauthorized WIC costs. All apparatus or devices (e.g., 
enteral feeding tubes, bags and pumps) designed to administer WIC 
formulas are not allowable WIC costs.
    (v) Authorized categories of supplemental foods. The supplemental 
foods authorized in this food package require medical documentation for 
issuance and include infant formula (for children or women), exempt 
infant formula, WIC-eligible medical foods (for children and women), 
infant cereal, infant food fruits and vegetables, milk and milk 
alternatives, cheese, eggs, canned fish, fruits and vegetables, 
breakfast cereal, whole wheat bread or other whole grains, juice, 
legumes and/or peanut butter.
    (vi) Coordination with medical payors and other programs that 
provide or

[[Page 44816]]

reimburse for formulas. WIC State agencies must coordinate with other 
Federal, State or local government agencies or with private agencies 
that operate programs that also provide or could reimburse for exempt 
infant formulas and WIC-eligible medical foods benefits to mutual 
participants. At a minimum, a WIC State agency must coordinate with the 
State Medicaid Program for the provision of exempt infant formulas and 
WIC-eligible medical foods that are authorized or could be authorized 
under the State Medicaid Program for reimbursement and that are 
prescribed for WIC participants who are also Medicaid recipients. The 
WIC State agency is responsible for providing up to the maximum amount 
of exempt infant formulas and WIC-eligible medical foods under Food 
Package III in situations where reimbursement is not provided by 
another entity.
    (4) Food Package IV--Children 1 through 4 years--(i) Participant 
category served. This food package is designed for issuance to 
participants 1 through 4 years of age who do not have a condition 
qualifying them to receive Food Package III.
    (ii) Authorized categories of supplemental foods. Milk, breakfast 
cereal, juice, fruits and vegetables, whole wheat bread or other whole 
grains, eggs, and legumes or peanut butter are the categories of 
supplemental foods authorized in this food package. Cheese may be 
substituted for milk in amounts described in Table 2 of paragraph 
(e)(10) of this section. Substitutions exceeding the maximum 
substitution allowance of cheese, up to the maximum allowance for fluid 
milk, may be allowed with medical documentation of the qualifying 
condition. Soy-based beverages and tofu can be substituted for milk 
only with medical documentation in this food package, in amounts 
described in Table 2 of paragraph (e)(10) of this section. A health 
care professional licensed by the State to write prescriptions must 
make a medical determination and provide medical documentation that a 
child cannot drink milk and requires soy-based beverage, tofu, or 
additional cheese as a substitute for milk. Such determination can be 
made for situations that include, but are not limited to, milk allergy, 
severe lactose maldigestion, and vegan diets. Medical documentation 
must meet the requirements described in paragraph (d) of this section.
    (5) Food Package V--Pregnant and partially breastfeeding women--(i) 
Participant category served. This food package is designed for issuance 
to women participants with singleton pregnancies who do not have a 
condition qualifying them to receive Food Package III. This food 
package is also designed for issuance to breastfeeding women 
participants, up to 1 year postpartum, who do not have a condition 
qualifying them to receive Food Package III and whose partially 
breastfed infants receive formula from the WIC program in amounts that 
do not exceed the maximum allowances described in Table 1 of paragraph 
(e)(9) of this section. Women participants breastfeeding more than one 
infant, and women participants pregnant with more than one fetus, are 
eligible to receive Food Package VII as described in paragraph (e)(7) 
of this section.
    (ii) Authorized categories of supplemental foods. Milk, breakfast 
cereal, juice, fruits and vegetables, whole wheat bread or other whole 
grains, eggs, legumes and peanut butter are the categories of 
supplemental foods authorized in this food package. Cheese or calcium-
set tofu may be substituted for milk in amounts described in Table 2 of 
paragraph (e)(10) of this section. Amounts of cheese or calcium-set 
tofu exceeding the maximum substitution allowances may be allowed with 
medical documentation of the qualifying condition, up to the maximum 
allowance for fluid milk. A health care professional licensed by the 
State to write prescriptions must make a medical determination and 
provide medical documentation that a woman cannot drink milk and 
requires additional cheese or calcium-set tofu. Such determination can 
be made for situations that include, but are not limited to, milk 
allergy or severe lactose maldigestion. Medical documentation must meet 
the requirements described in paragraph (d) of this section.
    (6) Food Package VI--Postpartum women--(i) Participant category 
served. This food package is designed for issuance to women up to 6 
months postpartum who are not breastfeeding their infants, and to 
breastfeeding women up to 6 months postpartum whose participating 
infant receives more than the maximum amount of formula allowed for 
partially breastfed infants as described in Table 1 of paragraph (e)(9) 
of this section.
    (ii) Authorized categories of supplemental foods. Milk, breakfast 
cereal, juice, fruits and vegetables, eggs, and legumes or peanut 
butter are the categories of supplemental foods authorized in this food 
package. Cheese or calcium-set tofu may be substituted for milk in 
amounts described in Table 2 of paragraph (e)(10) of this section. 
Amounts of cheese or calcium-set tofu exceeding the maximum 
substitution allowances may be allowed with medical documentation of 
the qualifying condition, up to the maximum allowance for fluid milk. A 
health care professional licensed by the State to write prescriptions 
must make a medical determination and provide medical documentation 
that a woman cannot drink milk and requires additional cheese or 
calcium-set tofu. Such determination can be made for situations that 
include, but are not limited to, milk allergy or severe lactose 
maldigestion. Medical documentation must meet the requirements 
described in paragraph (d) of this section.
    (7) Food Package VII--Fully breastfeeding (enhanced)--(i) 
Participant category served. This food package is designed for issuance 
to breastfeeding women up to 1 year postpartum whose infants do not 
receive infant formula from WIC (these breastfeeding women are assumed 
to be fully breastfeeding their infants), and to all breastfeeding 
women during the first month postpartum. This food package is also 
designed for issuance to women participants pregnant with two or more 
fetuses, and women participants partially breastfeeding multiple 
infants. Women participants fully breastfeeding multiple infants 
receive 1.5 times the supplemental foods provided in Food Package VII.
    (ii) Authorized categories of supplemental foods. Milk, cheese, 
breakfast cereal, juice, fruits and vegetables, whole wheat bread or 
other whole grains, eggs, legumes, peanut butter, and canned fish are 
the categories of supplemental foods authorized in this food package. 
Cheese or calcium-set tofu may be substituted for milk in amounts 
described in Table 2 of paragraph (e)(10) of this section. Amounts of 
cheese or calcium-set tofu exceeding the maximum substitution 
allowances may be allowed with medical documentation of the qualifying 
condition, up to the maximum allowance for fluid milk. A health care 
professional licensed by the State to write prescriptions must make a 
medical determination and provide medical documentation that a woman 
cannot drink milk and requires additional cheese or calcium-set tofu. 
Such determination can be made for situations that include, but are not 
limited to, milk allergy or severe lactose maldigestion. Medical 
documentation must meet the requirements described in paragraph (d) of 
this section.
    (8) Supplemental Foods--Maximum monthly allowances, options and 
substitution rates, and minimum requirements. Tables 1 through 3 of

[[Page 44817]]

paragraphs (e)(9) through (e)(11) of this section specify the maximum 
monthly allowances of foods in WIC food packages and identify WIC food 
options and substitution rates. Table 4 of paragraph (e)(12) of this 
section describes the minimum requirements and specifications of 
supplemental foods in the WIC food packages.
    (9) Maximum monthly allowances of supplemental foods for infants. 
The maximum monthly allowances, options and substitution rates of 
supplemental foods for infants in Food Packages I, II and III are 
stated in Table 1 as follows:

                          Table 1.--Maximum Monthly Allowances of Supplemental Foods For Infants In Food Packages I, II and III
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                       Fully formula fed (FF)             Partially                            Fully breastfed (BF)
                               -------------------------------------- breastfed (BF/FF) ----------------------------------------------------------------
                                                                     -------------------
                                 Food packages I-                      Food packages I-
           Foods \1\            FF & III-FF  A: 0  Food packages II-  BF/FF & III BF/FF  Food packages II-                          Food package II-BF &
                                 through 3 months    FF & III-FF  6     A: 1 through 3   BF/FF & III BF/FF   Food package I-BF  0   III BF  6 through 11
                                  B: 4 through 5   through 11 months   months \2\  B: 4     6 through 11       through 5 months            months
                                      months                           through 5 months        months
 
--------------------------------------------------------------------------------------------------------------------------------------------------------
Infant formula 3 4 5 6 and      A: 806 fl. oz.     624 fl. oz.        A: 364 fl. oz.     312 fl. oz.
 Exempt Infant formula.          reconstituted      reconstituted      reconstituted      reconstituted
                                 liquid             liquid             liquid             liquid
                                 concentrate or     concentrate or     concentrate or     concentrate or
                                 800 fl. oz. RTF    640 fl. oz. RTF    364 fl. oz. RTF    320 fl. oz. RTF
                                 or 870 fl. oz.     or.                or 435 fl. oz.     or.
                                 reconstituted                         reconstituted
                                 powder.                               powder.
                                B: 884 fl. oz.     696 fl. oz.        B: 442 fl. oz.     384 fl. oz.
                                 reconstituted      reconstituted      reconstituted      reconstituted
                                 liquid             powder.            liquid             powder.
                                 concentrate or                        concentrate or
                                 896 fl. oz. RTF                       448 fl. oz. RTF
                                 or 960 fl. oz.                        or 522 fl. oz.
                                 reconstituted                         reconstituted
                                 powder.                               powder.
Infant cereal 7...............  .................  24 oz............  .................  24 oz............  .....................  24 oz.
Infant food 7 8 fruits and      .................  128 oz...........  .................  128 oz...........  .....................  256 oz.
 vegetables Infant food meat.                                                                                                      77.5 oz.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Table 1 Footnotes: (abbreviations in order of appearance in table): FF = fully formula fed; BF/FF = partially breastfed (i.e., the infant is breastfed
  but also receives formula from the WIC Program in an amount not to exceed approximately half the amount of formula allowed for a fully formula fed
  infant); BF = fully breastfed (i.e., the infant receives no formula through the WIC program).
\1\ Table 4 of paragraph (e)(12) of this section describes the minimum requirements and specifications for the supplemental foods.
\2\ The powder form is the form recommended for partially breastfed infants, ages 1 through 3 months in Food Package I.
\3\ The maximum monthly allowance is specified in reconstituted fluid ounces for liquid concentrate, ready-to-feed (RTF) liquid, and powder forms of
  infant formula and exempt infant formula. Reconstituted fluid ounce is the form prepared for consumption as directed on the container.
\4\ Only infant formula may be issued for infants in Food Packages I and II. Exempt infant formula may only be issued for infants in Food Package III.
\5\ If powder infant formula is provided, State agencies must provide at least the number of reconstituted fluid ounces as the maximum allowance for the
  liquid concentrate form of the same product in the same Food Package up to the maximum monthly allowance for powder. State agencies must issue whole
  containers that are all the same size.
\6\ State agencies may round up and disperse whole containers of infant formula over the food package timeframe to allow participants to receive the
  full authorized nutritional benefit (FNB). State agencies must use the methodology described in accordance with paragraph (h)(1) of this section.
\7\ State agencies may round up and disperse whole containers of infant foods (infant cereal, fruits and vegetables, and meat) over the Food Package
  timeframe. .State agencies must use the methodology described in accordance with paragraph (h)(2) of this section.
\8\ Fresh banana may replace up to 16 ounces of baby food fruit at a rate of 1 pound of bananas per 8 ounces of baby food fruit.

    (10) Maximum monthly allowances of supplemental foods in Food 
Packages IV through VII. The maximum monthly allowances, options and 
substitution rates of supplemental foods for children and women in Food 
Package IV through VII are stated in Table 2 as follows:

Table 2.--Maximum Monthly Allowances of Supplemental Foods for Children and Women in Food Packages IV, V, VI and
                                                       VII
----------------------------------------------------------------------------------------------------------------
                                       Children                                  Women
                                 -------------------------------------------------------------------------------
                                                        Food package V:                        Food package VII:
                                                         Pregnant and      Food package VI:          Fully
            Foods \1\             Food package IV: 1       partially       Postpartum (up to     breastfeeding
                                    through 4 years    breastfeeding (up       6 months       (enhanced), (up to
                                                           to 1 year        postpartum) \3\      1 year post-
                                                        postpartum) \2\                           partum) 4 5
----------------------------------------------------------------------------------------------------------------
Juice, single strength \6\......  128 fl oz.........  144 fl oz.........  96 fl oz..........  144 fl oz.
Milk, fluid.....................  16 qt 7 8 9 10....  22 qt 7 8 11 12...  16 qt 7 8 11 12...  24 qt 7 8 11 12
Breakfast cereal................  36 oz.............  36 oz.............  36 oz.............  36 oz.
Cheese..........................  N/A...............  N/A...............  N/A...............  1 lb.
Eggs............................  1 dozen...........  1 dozen...........  1 dozen...........  2 dozen.

[[Page 44818]]

 
Fruits and vegetables 13 14.....  $6.00 in cash       $8.00 in cash       $8.00 in cash       $8.00 in cash
                                   value vouchers.     value vouchers.     value vouchers.     value vouchers.
Whole wheat bread or other whole  2 lb..............  1 lb..............  N/A...............  1 lb.
 grains \15\.
Fish (canned)...................  N/A...............  N/A...............  N/A...............  30 oz.
Legumes, dry \16\...............  1 lb..............  1 lb..............  1 lb..............  1 lb.
And/or Peanut butter............  Or 18 oz..........  And 18 oz.........  Or 18 oz..........  And 18 oz.
----------------------------------------------------------------------------------------------------------------
Table 2 Footnotes: N/A = the supplemental food is not authorized in the corresponding food package.
\1\ Table 4 of paragraph (e)(12) of this section describes the minimum requirements and specifications for the
  supplemental foods.
\2\ Food Package V is issued to two categories of WIC participants: Women participants with singleton
  pregnancies and breastfeeding women whose partially breastfed infants receive formula from the WIC Program in
  amounts that do not exceed the maximum formula allowances for Food Packages I-BF/FF-A, I-BF/FF-B, or II-BF/FF,
  as appropriate for the age of the infant.
\3\ Food Package VI is issued to two categories of WIC participants: Non-breastfeeding postpartum women and
  breastfeeding postpartum women whose partially breastfed infants receive more than the maximum infant formula
  allowances for Food Packages I-BF/FF-A, I-BF/FF-B, or II-BF/FF, as appropriate for the age of the infant.
\4\ Food Package VII is issued to 4 categories of WIC participants: Fully breastfeeding women whose infants do
  not receive formula from the WIC Program; all breastfeeding women during the first month postpartum; women
  pregnant with two or more fetuses; and women fully or partially breastfeeding multiple infants.
\5\ Women fully breastfeeding multiple infants are prescribed 1.5 times the maximum allowances.
\6\ Combinations of single-strength and concentrated juices may be issued provided that the total volume does
  not exceed the maximum monthly allowance for single-strength juice.
\7\ Whole milk, as specified in FDA standards, is the only type of milk allowed for 1-year-old children (12
  through 23 months). Reduced fat milks, as specified in FDA standards, i.e., 2% milk fat, are the only types of
  milk allowed for children >= 24 months of age and women.
\8\ Evaporated milk may be substituted at the rate of 16 fluid ounces of evaporated milk per 32 fluid ounces of
  fluid milk or a 1:2 fluid ounce substitution ratio. Dry milk may be substituted at an equal reconstituted rate
  to fluid milk. When a combination of different milk forms is provided, the full maximum monthly fluid milk
  allowance must be provided.
\9\ For children, cheese may be substituted for milk at the rate of 1 pound of cheese per 3 quarts of milk. No
  more than 1 lb. of cheese may be substituted for milk. With medical documentation, additional amounts of
  cheese may be substituted in cases of lactose intolerance or other qualifying conditions, up to the maximum
  allowance for fluid milk.
\10\ For children, soy-based beverage and calcium-set tofu may be substituted for milk only with medical
  documentation for qualifying conditions. Soy-based beverages may be substituted for milk, with medical
  documentation, for children in Food Package IV on a quart for quart basis up to the total maximum allowance of
  milk. Tofu may be substituted for milk, with medical documentation, for children in Food Package IV at the
  rate of 1 pound of tofu per 1 quart of milk up to the total maximum allowance of milk.
\11\ For women, cheese or calcium-set tofu may be substituted for milk at the rate of l pound of cheese per 3
  quarts of milk or 1 pound of tofu per 1 quart of milk. A maximum of 4 quarts of milk can be substituted in
  this manner in Food Packages V and VI; however, no more than 1 pound of cheese may be substituted for milk. A
  maximum of 6 quarts of milk can be substituted in this manner in Food Package VII; therefore, no more than 2
  lbs. of cheese may be substituted for milk. With medical documentation, additional amounts of cheese or tofu
  may be substituted, up to the maximum allowances for fluid milk, in cases of lactose intolerance or other
  qualifying conditions.
\12\ For women, soy-based beverage may be substituted for milk at the rate of 1 quart of soy-based beverage for
  1 quart of milk up to the total maximum monthly allowance of milk.
\13\ Processed (canned, frozen, dried) fruits and vegetables may be substituted for fresh fruits and vegetables.
  Dried fruit and dried vegetables are not authorized for children in Food Package IV.
\14\ The maximum value of the vouchers may be adjusted in whole dollar increments to reflect accrued annual, un-
  rounded inflationary increases.
\15\ Brown rice, bulgur, oatmeal, whole-grain barley, soft corn or whole wheat tortillas may be substituted for
  whole wheat bread on an equal weight basis.
\16\ Canned legumes may be substituted for dried legumes at the rate of 64 oz of canned beans for 1 lb dried
  beans. Under Food Packages V and VII, two additional combinations of dry or canned beans/peas are authorized:
  1 lb. Dry and 64 oz. Canned beans/peas (and no peanut butter); or 2 lb. Dry or 128 oz. Canned beans/peas (and
  no peanut butter) or 36 oz. peanut butter (and no beans).

    (11) Maximum monthly allowances of supplemental foods for children 
and women with qualifying conditions in Food Package III. The maximum 
monthly allowances, options and substitution rates of supplemental 
foods for participants with qualifying conditions in Food Package III 
are stated in Table 3 as follows:

      Table 3.--Maximum Monthly Allowances of Supplemental Foods for Children and Women in Food Package III
----------------------------------------------------------------------------------------------------------------
                                       Children                                  Women
                                 -------------------------------------------------------------------------------
                                                         Pregnant and                                Fully
            Foods \1\                                      partially       Postpartum (up to     breastfeeding
                                   1 through 4 years   breastfeeding (up       6 months       (enhanced), (up to
                                                           to 1 year        postpartum) \3\      1 year post-
                                                        postpartum) \2\                           partum) 4 5
----------------------------------------------------------------------------------------------------------------
Juice, single strength \6\......  128 fl. oz........  144 fl. oz........  96 fl. oz.........  144 fl. oz.
WIC Formula 7 8.................  455 fl. oz. liquid  455 fl. oz. liquid  455 fl. oz. liquid  455 fl. oz. liquid
                                   concentrate.        concentrate.        concentrate.        concentrate.
Milk............................  16 qt 9 10 11 12..  22 qt 9 10 13 14..  16 qt 9 10 13 14..  24 qt. 9 10 13 14
Breakfast cereal \15\...........  36 oz.............  36 oz.............  36 oz.............  36 oz.

[[Page 44819]]

 
Cheese..........................  N/A...............  N/A...............  N/A...............  1 lb.
Eggs............................  1 dozen...........  1 dozen...........  1 dozen...........  2 dozen.
Fruits and vegetables 16 17.....  $6.00 in cash       $8.00 in cash       $8.00 in cash       $8.00 in cash
                                   value voucher.      value vouchers.     value vouchers.     value vouchers.
Whole wheat bread \18\..........  2 lb..............  1 lb..............  N/A...............  1 lb.
Fish (canned)...................  N/A...............  N/A...............  N/A...............  30 oz.
Legumes, dry \19\...............  1 lb..............  1 lb..............  1 lb..............  1 lb.
And/or Peanut butter............  Or 18 oz..........  And 18 oz.........  Or 18 oz..........  And 18 oz.
----------------------------------------------------------------------------------------------------------------
Table 3 Footnotes: N/A= the supplemental food is not authorized in the corresponding food package
\1\ Table 4 of paragraph (e)(12) of this section describes the minimum requirements and specifications for the
  supplemental foods.
\2\ Issued to two categories of WIC participants--women participants with singleton pregnancies and
  breastfeeding women whose partially breastfed infants receive formula from the WIC Program in amounts that do
  not exceed the maximum formula allowances for Food Packages I-BF/FF-A, I-BF/FF-B, or II-BF/FF, as appropriate
  for the age of the infant as described in Table 1 of paragraph (e)(9) of this section.
\3\ Issued to two categories of WIC participants--non-breastfeeding postpartum women and breastfeeding
  postpartum women whose partially breastfed infants receive more than the maximum formula allowances for Food
  Packages I-BF/FF-A, I-BF/FF-B, or II-BF/FF, as appropriate for the age of the infant as described in Table 1
  of paragraph (e)(9) of this section.
\4\ Issued to 4 categories of WIC participants--fully breastfeeding women whose infants do not receive formula
  from the WIC Program; all breastfeeding women during the first month postpartum; women pregnant with two or
  more fetuses; and women fully or partially breastfeeding multiple infants.
\5\ Women fully breastfeeding multiple infants are prescribed 1.5 times the maximum allowances.
\6\ Combinations of single-strength and concentrated juices may be issued provided that the total volume does
  not exceed the maximum monthly allowance for single-strength juice.
\7\ WIC formula means infant formula, exempt infant formula, or WIC-eligible medical food.
\8\ Powder and Ready-to-Feed may be substituted at rates that provide comparable nutritive value.
\9\ Whole milk (not less than 3.25% milk fat) is the only type of milk allowed for 1-year-old children (12
  through 23 months). Reduced fat milks (up to 2% milk fat) are the only types of milk allowed for children >=24
  months of age and women.
\10\ Evaporated milk may be substituted at the rate of 16 fluid ounces of evaporated milk per 32 fluid ounces of
  fluid milk or a 1:2 fluid ounce substitution ratio. Dry milk may be substituted at an equal reconstituted rate
  to fluid milk. When a combination of different milk forms is provided, the full maximum monthly fluid milk
  allowance must be provided.
\11\ For children, cheese may be substituted for milk at the rate of 1 pound of cheese per 3 quarts of milk. No
  more than 1 lb. of cheese may be substituted for milk. With medical documentation, additional amounts of
  cheese may be substituted in cases of lactose intolerance or other qualifying conditions, up to the maximum
  allowance for fluid milk.
\12\ For children, soy-based beverage and tofu may substituted for milk only with medical documentation for
  qualifying conditions. Soy-based beverages may be substituted for milk, with medical documentation, for
  children in Food Package IV on a quart for quart basis up to the total maximum allowance of milk. Tofu may be
  substituted for milk, with medical documentation, for children in Food Package IV at the rate of 1 pound of
  tofu per 1 quart of milk up to the total maximum allowance of milk.
\13\ For women, cheese or calcium-set tofu may be substituted for milk at the rate of l pound of cheese per 3
  quarts of milk or 1 pound of tofu per 1 quart of milk. A maximum of 4 quarts of milk can be substituted in
  this manner in Food Packages V and VI; however, no more than 1 pound of cheese may be substituted for milk. A
  maximum of 6 quarts of milk can be substituted in this manner in Food Package VII; therefore, no more than 2
  lbs. of cheese may be substituted for milk. With medical documentation, additional amounts of cheese or tofu
  may be substituted, up to the maximum allowances for fluid milk, in cases of lactose intolerance or other
  qualifying conditions.
\14\ For women, soy-based beverage may be substituted for milk at the rate of 1 quart of soy-based beverage for
  1 quart of milk up to the total maximum monthly allowance of milk.
\15\ 32 dry ounces of infant cereal may be substituted for 36 ounces of breakfast cereal.
\16\ Processed (canned, frozen, dried) fruits and vegetables may be substituted for fresh fruits and vegetables.
  Dried fruit and dried vegetables are not authorized for children.
\17\ The maximum value of the vouchers may be adjusted in whole dollar increments to reflect accrued annual, un-
  rounded inflationary increases.
\18\ Brown rice, bulgur, oatmeal, whole-grain barley barley, soft corn or whole wheat tortillas may be
  substituted for whole wheat bread on an equal weight basis.
\19\ Canned legumes may be substituted for dried legumes at the rate of 64 oz of canned beans for 1 lb dried
  beans. Issuance of two additional combinations of dry or canned beans/peas is authorized for the Pregnant and
  Partially Breastfeeding (up to 1 year postpartum) category and Fully Breastfeeding (Enhanced) (up to 1 year
  postpartum) category: 1 lb. Dry and 64 oz. Canned beans/peas (and no peanut butter); or 2 lb. Dry or 128 oz.
  Canned beans/peas (and no peanut butter) or 36 oz. Peanut butter (and no beans).

    (12) Minimum requirements and specifications for supplemental 
foods. Table 4 describes the minimum requirements and specifications 
for supplemental foods in all food packages:

Table 4.--Minimum Requirements and Specifications for Supplemental Foods
------------------------------------------------------------------------
       Categories/foods         Minimum requirements and specifications
------------------------------------------------------------------------
WIC formula:
    Infant formula...........  All authorized infant formulas must (1)
                                meet the definition for an infant
                                formula in section 201(z) of the Federal
                                Food, Drug, and Cosmetic Act (21 U.S.C.
                                321(z)) and meet the requirements for an
                                infant formula under section 412 of the
                                Federal Food, Drug and Cosmetic Act, as
                                amended (21 U.S.C. 350a) and the
                                regulations at 21 CFR parts 106 and 107;
                               (2) be designed for enteral digestion via
                                an oral or tube feeding;
                               (3) provide at least 10 mg iron per liter
                                (at least 1.8 mg iron/ 100 kilocalories)
                                at standard dilution;

[[Page 44820]]

 
                               (4) provide at least 67 kilocalories per
                                100 milliliters (approximately 20
                                kilocalories per fluid ounce) at
                                standard dilution.
                               (5) not require the addition of any
                                ingredients other than water prior to
                                being served in a liquid state.
    Exempt infant formula....  All authorized exempt infant formula must
                                (1) meet the definition and requirements
                                for an exempt infant formula under
                                section 412(h) of the Federal Food,
                                Drug, and Cosmetic Act as amended (21
                                U.S.C. 350a(h)) and the regulations at
                                21 CFR parts 106 and 107; and
                               (2) be designed for enteral digestion via
                                an oral or tube feeding.
    WIC-eligible medical       Certain enteral products that (1) are
     foods \1\.                 specifically formulated to provide
                                nutritional support for woman or
                                children with a qualifying condition
                                when the use of conventional food is
                                precluded, restricted or inadequate;
                               (2) must serve the purpose of a food,
                                meal or diet (may be nutritionally
                                complete or incomplete) and provide a
                                source of calories and one or more
                                nutrients;
                               (3) must be designed for enteral
                                digestion via an oral or tube feeding;
                               (4) may not be a conventional food, drug,
                                flavoring or enzyme; and
                               (5) include many but not all products
                                that meet the definition of medical
                                foods in Section 5(b)(3) of the Orphan
                                Drug Act (21 U.S.C. 360ee(b)(3)).
Milk and milk alternatives:
    Cow's milk...............  Must conform to FDA standard of identity
                                for whole, reduced fat, low-fat, or non-
                                fat milks (21 CFR 131.110). Must be
                                pasteurized and contain at least 400 IU
                                of vitamin D per quart (100 IU per cup)
                                and 2000 IU of vitamin A per quart (500
                                IU per cup).
                               May be flavored or unflavored. May be
                                fluid, shelf-stable, evaporated (21 CFR
                                131.130), or dried (i.e., powder) (21
                                CFR 131.147).\2\
                               Cultured Milks. Must conform to FDA
                                standard of identity for cultured milk
                                (21 CFR 131.112--cultured buttermilk,
                                kefir cultured milk, acidophilus
                                cultured milk).
    Goat Milk................  Must conform to FDA standard of identity
                                for whole, reduced fat, low-fat, or non-
                                fat milks (21 CFR 131.110). Must be
                                pasteurized and contain at least 400 IU
                                of vitamin D per quart (100 IU per cup)
                                and 2000 IU of vitamin A per quart (500
                                IU per cup) following FDA fortification
                                standards (21 CFR 131). May be flavored
                                or unflavored. May be fluid, shelf-
                                stable, evaporated (21 CFR 131.130), or
                                dried (i.e., powdered) (21 CFR
                                131.147).\2\
    Cheese...................  Domestic cheese made from 100 percent
                                pasteurized milk. Must conform to FDA
                                standard of identity (21 CFR 133);
                                Monterey Jack, Colby, natural Cheddar,
                                Swiss, Brick, Muenster, Provolone, part-
                                skim or whole Mozzarella, pasteurized
                                processed American, or blends of any of
                                these cheeses are authorized.
                               Cheeses that are labeled low, free,
                                reduced, less or light in the nutrients
                                of sodium, fat or cholesterol are WIC-
                                eligible.\3\
    Tofu.....................  Calcium-set tofu prepared with only
                                calcium salts (e.g., calcium sulfate).
                                May not contain added fats, sugars,
                                oils, or sodium.
    Soy-based beverage.......  Must be fortified to meet the following
                                nutrient levels: 276 mg calcium per cup,
                                8 g protein per cup, 500 IU vitamin A
                                per cup, 100 IU vitamin D per cup, 24 mg
                                magnesium per cup, 222 phosphorus per
                                cup, 349 mg potassium per cup, 0.44 mg
                                riboflavin per cup, and 1.1 mcg vitamin
                                B12 per cup, in accordance with
                                fortification guidelines issued by FDA.
Juice........................  Must be pasteurized 100% unsweetened
                                fruit juice. Must conform to FDA
                                standard of identity (21 CFR Part 146)
                                or vegetable juice must conform to FDA
                                standard of identity (21 CFR Part 156)
                                and contain at least 30 mg of vitamin C
                                per 100 mL of juice. With the exception
                                of 100 percent citrus juices, State
                                agencies must verify the vitamin C
                                content of all State-approved juices.
                                Juices that are fortified with other
                                nutrients may be allowed at the State
                                agency's option. Juice may be fresh,
                                from concentrate, frozen, canned, or
                                shelf-stable.
                               Vegetable juice may be regular or lower
                                in sodium.\3\
Breakfast cereal.............  Breakfast cereals as defined by FDA in 21
                                CFR 170.3(n)(4) for ready-to-eat and
                                instant and regular hot cereals.
                               Meet labeling requirements for making a
                                health claim as a ``whole grain food
                                with moderate fat content'': \4\
                               (1) contain a minimum of 51% whole grains
                                (using dietary fiber as the indicator);
                               (2) meet the regulatory definitions for
                                ``low saturated fat'' at 21 CFR 101.62
                                (<=1 g saturated fat per RACC) and ``low
                                cholesterol'' (<=20 mg cholesterol per
                                RACC);
                               (3) bear quantitative trans fat labeling;
                                and
                               (4) contain <=6.5 g total fat per RACC
                                and <=0.5 g trans fat per RACC.
                               Contain a minimum of 28 mg iron per 100 g
                                dry cereal.
                               Contain <=21.2 g sucrose and other sugars
                                per 100 g dry cereal (<=6 g per dry oz).
Eggs.........................  Fresh shell domestic hens' eggs or dried
                                eggs mix. Must conform to FDA standard
                                of identity in 21 CFR 160.105 or
                                pasteurized liquid whole eggs (must
                                conform to FDA standard of identity in
                                21 CFR 160.115).
                               Hard boiled eggs, where readily available
                                for purchase in small quantities, may be
                                provided for homeless participants.
Fruits and Vegetables (fresh   Any variety of fresh whole or cut fruit
 and processed).                without added sugars.\5\
                               Any variety of fresh whole or cut
                                vegetable, except white potatoes,
                                without added sugars, fats, or oils
                                (orange yams and sweet potatoes are
                                allowed).\5\
                               Any variety of canned \6\ fruits (must
                                conform to FDA standard of identity (21
                                CFR 145); including applesauce; juice
                                pack or water pack without added sugars,
                                fats, oils, or salt (i.e., sodium). Any
                                variety of frozen fruits without added
                                sugars.\7\

[[Page 44821]]

 
                               Any variety of canned \6\ or frozen
                                vegetables (must conform to FDA standard
                                of identity (21 CFR Part 155)) except
                                white potatoes (orange yams and sweet
                                potatoes are allowed); without added
                                sugars, fats, or oils. May be regular or
                                lower in sodium.\3 7\
                               Any type of dried fruits or dried
                                vegetable without added sugars, fats,
                                oils, or salt (i.e., sodium).\5\
Whole wheat bread or other     Whole wheat bread (must conform to FDA
 whole grains.                  standard of identity (21 CFR 136.180)).
                               OR
                               Meet labeling requirements for making a
                                health claim as a ``whole grain food
                                with moderate fat content'': \4\
                               (1) contain a minimum of 51% whole grains
                                (using dietary fiber as the indicator);
                               (2) meet the regulatory definitions for
                                ``low saturated fat'' at 21 CFR 101.62
                                (<=1 g saturated fat per RACC) and ``low
                                cholesterol''(<=20 mg cholesterol per
                                RACC);
                               (3) bear quantitative trans fat labeling;
                                and
                               (4) contain <=6.5 g total fat per RACC
                                and <=0.5 g trans fat per RACC.
                               Brown rice, bulgur, oatmeal, whole-grain
                                barley without added sugars, fats, oils,
                                or salt (i.e., sodium). May be instant-,
                                quick-, or regular-cooking.
                               Soft corn or whole wheat tortillas
                                without added fats or oils may be
                                allowed at the State agency's option.
Canned fish \6\..............  Canned only: light tuna (must conform to
                                FDA standard of identity (21 CFR
                                161.190)); salmon (must conform to FDA
                                standard of identity (21 CFR 161.170));
                               Sardines.
                               May be packed in water or oil. Pack may
                                include bones or skin. May be regular or
                                lower in sodium content.\3\
Mature legumes (dry beans and  Any type of mature dry beans, peas, or
 peas).                         lentils in dry-packaged or canned \6\
                                forms. Examples include but are not
                                limited to black beans (``turtle
                                beans''), blackeye peas (cowpeas of the
                                blackeye variety, ``cow beans''),
                                garbanzo beans (chickpeas), great
                                northern beans, kidney beans, lima beans
                                (``butter beans''), navy beans, pinto
                                beans, soybeans, split peas, and
                                lentils. All categories exclude soups.
                                May not contain added sugars, fats, oils
                                or meat as purchased. Canned legumes may
                                be regular or lower in sodium content. 3
                                8
                               Baked beans may be provided for
                                participants with limited cooking
                                facilities.\8\
Peanut butter................  Peanut butter and reduced fat peanut
                                butter (must conform to FDA Standard of
                                Identity (21 CFR 164.150)); creamy or
                                chunky, regular or reduced fat, salted
                                or unsalted \3\ forms are allowed.
Infant Foods:
    Infant cereal............  Infant cereal, must contain a minimum of
                                45 mg of iron per 100 g of dry
                                cereal.\9\
    Infant fruits............  Any variety of single ingredient
                                commercial infant food fruit without
                                added sugars, starches, or salt (i.e.,
                                sodium). Texture may range from strained
                                through diced.\10\
    Infant vegetables........  Any variety of single ingredient
                                commercial infant food vegetables
                                without added sugars, starches, or salt
                                (i.e., sodium). Texture may range from
                                strained through diced.\11\
    Infant meat..............  Any variety of single ingredient
                                commercial infant food meat without
                                added sugars, starches, vegetables or
                                salt (i.e., sodium). Broth (unsalted,
                                i.e., without added sodium) may be an
                                ingredient. Texture may range from
                                pureed through diced.\12\
------------------------------------------------------------------------
 Table 4 Footnotes: FDA = Food and Drug Administration of the U.S.
  Department of Health and Human Services; RACC = reference amount
  customarily consumed.
\1\ The following are not considered a WIC eligible medical food:
  Formulas used solely for the purpose of enhancing nutrient intake,
  managing body weight, addressing picky eaters or used for a condition
  other than a qualifying condition (e.g., vitamin pills, weight control
  products, etc.); medicines or drugs, as defined by the Food, Drug and
  Cosmetic Act (21 U.S.C. 350a) as amended; enzymes, herbs, or
  botanicals; oral rehydration fluids or electrolyte solutions;
  flavoring or thickening agents; and feeding utensils or devices (e.g.,
  feeding tubes, bags, pumps) designed to administer a WIC-eligible
  formula.
\2\ All authorized milks must confirm to FDA, DHHS standards of identity
  for milks as defined by 21 CFR Part 131 and meet WIC's requirements
  for vitamin fortification as stated above. Additional authorized milks
  include, but are not limited to: calcium-fortified, lactose-reduced
  and lactose-free, acidified, and UHT pasteurized milks. Other milks
  are permitted at the State agency's discretion provided that the State
  agency determines that the milk meets the minimum requirements for an
  authorized milk.
\3\ Any of the following lower sodium forms are allowable: Sodium-free--
  less than 5 mg sodium per serving; Very low sodium--35 mg sodium or
  less per serving or, if the serving is 30 g or less or 2 tablespoons
  or less, 35 mg sodium or less per 50 g of the food; Low-sodium--140 mg
  sodium or less per serving or, if the serving is 30 g or less or 2
  tablespoons or less, 140 mg sodium or less per 50 g of the food; Light
  in sodium--at least 50 percent less sodium per serving than average
  reference amount for same food with no sodium reduction; Lightly
  salted--at least 50 percent less sodium per serving than reference
  amount (If the food is not ``low in sodium,'' the statement ``not a
  low-sodium food'' must appear on the same panel as the Nutrition Facts
  panel.); and Reduced or less sodium--at least 25 percent less sodium
  per serving than reference food.
\4\ Food and Drug Administration (FDA), Health Claim Notification for
  Whole Grain Foods with Moderate Fat Content at http://www.cfsan.fda.gov/dms/flgrain2.html
\5\ Herbs or spices; edible blossoms and flowers, e.g., squash blossoms
  (broccoli, cauliflower and artichokes are allowed); creamed or sauced
  vegetables; vegetable-grain (pasta or rice) mixtures; fruit-nut
  mixtures; breaded vegetables; fruits and vegetables for purchase on
  salad bars; peanuts; ornamental and decorative fruits and vegetables
  such as chili peppers on a string; garlic on a string; gourds; painted
  pumpkins; fruit baskets and party vegetable tray; and items such as
  blueberry muffins and other baked goods are not authorized. Mature
  legumes (dry beans and peas) and juices are provided as separate food
  WIC categories and are not authorized under the fruit and vegetable
  category.
\6\ ``Canned'' refers to processed food items in cans or other shelf-
  stable containers, e.g., jars, pouches.
\7\ Excludes white potatoes; catsup or other condiments; pickled
  vegetables, olives; soups; juices; and fruit leathers and fruit roll-
  ups.
\8\ The following canned mature legumes are not authorized: soups;
  immature varieties of legumes, such as those used in canned green
  peas, green beans, snap beans, orange beans, and wax beans; baked
  beans with meat; e.g., beans and franks; and beans containing added
  sugars (with the exception of baked beans), fats, meat, or oils.
\9\ Infant cereals containing infant formula, milk, fruit, or other non-
  cereal ingredients are not allowed.
\10\ Mixtures with cereal or infant food desserts (e.g., peach cobbler)
  are not authorized; however, combinations of single ingredients (e.g.,
  apple-banana) are allowed.
\11\ Combinations of single ingredients (e.g., peas and carrots) are
  allowed.

[[Page 44822]]

 
\12\ No infant food combinations (e.g., meat and vegetables) or dinners
  (e.g., spaghetti and meatballs) are allowed.

    (f) USDA purchase of commodity foods. (1) At the request of a State 
agency, the Department may purchase commodity foods for the State 
agency using funds allocated to the State agency. The commodity foods 
purchased and made available to the State agency must be equivalent to 
the foods specified in Table 4 of paragraph (e)(12) of this section.
    (2) The State agency must:
    (i) Distribute the commodity foods to its local agencies or 
participants; and
    (ii) Ensure satisfactory storage facilities and conditions for the 
commodity foods, including documentation of proper insurance.
    (g) Infant formula manufacturer registration. Infant formula 
manufacturers supplying formula to the WIC Program must be registered 
with the Secretary of Health and Human Services under the Federal Food, 
Drug, and Cosmetic Act (21 U.S.C. 301 et seq.). Such manufacturers 
wishing to bid for a State contract to supply infant formula to the 
program must certify with the State health department that their 
formulas comply with the Federal Food, Drug, and Cosmetic Act and 
regulations issued pursuant to the Act.
    (h) Rounding up. State agencies may round up to the next whole 
container for either infant formula or infant foods (infant cereal, 
fruits, vegetables and meat). State agencies that use the rounding up 
option must calculate the amount of infant formula or infant foods 
provided according to the requirements and methodology as described in 
this section.
    (1) Infant Formula. State agencies must use the maximum monthly 
allowance of reconstituted fluid ounces of liquid concentrate infant 
formula as specified in Table 1 of paragraph (e)(9) of this section as 
the full nutritional benefit (FNB) provided by infant formula for each 
food package category and infant feeding option (e.g., Food Package I A 
fully formula fed, IA-FF). When using the rounding up option for infant 
formula, State agencies must issue whole containers that provide at 
least the FNB but not more than the maximum monthly allowances as 
specified in Table 1 of paragraph (e)(9) of this section.
    (i) State agencies that use rounding up of infant formula must:
    (A) Use the methodology described in paragraph (h)(1)(iii) of this 
section for calculating and dispersing the rounding up option;
    (B) Issue infant formula in whole containers that are all the same 
size; and
    (C) Disperse the number of whole containers as evenly as possible 
over the timeframe (the number of months the participant will receive 
the food package).
    (ii) The methodology to calculate rounding up and dispersing infant 
formula to the next whole container over the food package timeframe is 
as follows:
    (A) Multiply the FNB amount for the appropriate food package and 
feeding option (e.g. Food Package I A fully formula fed, IA-FF) by the 
timeframe the participant will receive the food package to determine 
the total amount of infant formula to be provided. The timeframe will 
vary depending on the food package category and infant feeding option.
    (B) Divide the total amount of infant formula provided by the yield 
of the container (in reconstituted fluid ounces) issued by the State 
agency to determine the total number of containers to be issued during 
the timeframe that the food package is prescribed.
    (C) If the number of containers to be issued does not result in a 
whole number of containers, the State agency must round up to the next 
whole container in order to issue whole containers.
    (2) Infant foods. (i) State agencies may use the rounding up option 
to the next whole container of infant food (infant cereal, fruits, 
vegetables and meats) when the maximum monthly allowance cannot be 
issued due to varying container sizes of authorized infant foods.
    (ii) State agencies that use the rounding up option for infant 
foods must:
    (A) Use the methodology described in paragraph (h)(2)(iii) of this 
section for calculating and dispersing the rounding up option;
    (B) Issue infant foods in whole containers; and
    (C) Disperse the number of whole containers as evenly as possible 
over the timeframe (the number of months the participant will receive 
the food package).
    (iii) The methodology to round up and disperse infant food is as 
follows:
    (A) Multiply the maximum monthly allowance for the infant food by 
the timeframe the participant will receive the food package to 
determine the total amount of food to be provided.
    (B) Divide the total amount of food provided by the container size 
issued by the State agency (e.g., ounces) to determine the total number 
of food containers to be issued during the timeframe that the food 
package is prescribed.
    (C) If the number of containers to be issued does not result in a 
whole number of containers, the State agency must round up to the next 
whole container in order to issue whole containers.
    In Sec.  246.12, paragraph (g)(3)(i) is revised to read as follows:


Sec.  246.12  Food delivery systems.

* * * * *
    (g) * * *
    (3) * * *
    (i) Minimum variety and quantity of supplemental foods. The State 
agency must establish minimum requirements for the variety and quantity 
of supplemental foods that a vendor applicant must stock to be 
authorized. These requirements must include that the vendor stock at 
least two varieties of fruits and vegetables authorized by the State 
agency. The State agency may not authorize a vendor applicant unless it 
determines that the vendor applicant meets these minimums. The State 
agency may establish different minimums for different vendor peer 
groups.
* * * * *

    Dated: July 20, 2006.
Eric M. Bost,
Under Secretary for Food, Nutrition and Consumer Services.

Appendix

    Note: This appendix will not be published in the Code of Federal 
Regulations.

Regulatory Impact Analysis

7 CFR 246: Special Supplemental Nutrition Program for Women, 
Infants, and Children (WIC): Revisions in the WIC Food Packages

Proposed Rule

Executive Summary

    The WIC program addresses the supplemental nutritional needs of 
at-risk groups through the distribution of supplemental food 
packages, and a program of nutrition education that includes 
counseling, health and social service referrals, and breastfeeding 
promotion and support. WIC nutrition education provisions are 
governed by broad regulatory language that allows nutrition 
education provided to participants to respond to the supplemental 
nutrition needs of participants in light of changes in dietary and 
health research. In contrast, WIC supplemental food packages are 
defined very specifically in the regulatory language. Consequently, 
as the population served by WIC has grown and become more diverse 
over the last 20 years and as food consumption habits have changed, 
the

[[Page 44823]]

nutritional risks faced by participants have changed. Also, though 
nutrition science has advanced, the WIC supplemental food packages 
have remained largely unchanged. A rule is needed to implement 
recommended changes to the WIC food packages based on the current 
supplemental nutritional needs of WIC participants and advances in 
nutrition science.
    The proposed rule would revise regulations governing the WIC 
food packages to revise the maximum monthly allowances and minimum 
requirements for certain supplemental foods; revise the substitution 
rates for certain supplemental foods and allow additional foods as 
alternatives; revise age specifications for assignment to infant 
food packages; add foods to children and women food packages; and 
address general provisions that apply to all food packages. The 
revisions reflect recommendations made by the Institute of Medicine 
of the National Academies in its Report ``WIC Food Packages: Time 
for a Change,'' and certain administrative revisions found necessary 
by the Department.
    The revisions would also bring the WIC food packages in line 
with the 2005 Dietary Guidelines for Americans and current infant 
feeding practice guidelines of the American Academy of Pediatrics: 
better promote and support the establishment of successful long-term 
breastfeeding; provide WIC participants with a wider variety of 
food; provide WIC State agencies with greater flexibility in 
prescribing food packages to accommodate participants with cultural 
food preferences; and, serve all participants with certain medical 
provisions under one food package to facilitate efficient management 
of participants with special dietary needs.
    Significant changes in the food packages include: the 
classification of infants in Food Packages I and II and mothers in 
Food Packages V, VI, and VII according to breastfeeding practice; 
eliminating juice from Food Packages I and II; adding infant foods 
and meat for fully breastfed infants in Food Package II; adding 
whole grains, and fruits and vegetables to food packages for 
children (IV) and women (V and VII only); and, revising the purpose, 
content and requirements for Food Package III, currently for 
children and women with special dietary needs.
    Under the proposed rule, revisions to the WIC food packages are 
cost-neutral to the Federal Government. Specifically, FNS estimates 
that the changes will result in a cost savings of $34 million 
dollars over five years, a negligible amount relative to the 
program's annual cost of more than $5 billion.

Table of Contents

Action
    Nature
    Need
    Affected Parties
Effects
    Background
    Current WIC Food Packages and Changing Nutritional Priorities
    Changing Demographics of the WIC Population
    Institute of Medicine's Recommendations
    Summary of Rule and Benefits
    Food Package I
     Package II
    Food Package III
    Food Package IV
    Food Package V
    Food Package VI
    Food Package VII
    Other Provisions
    Summary of Key Provisions
    Costs
    Proposed Rule
    Major Cost Drivers
    Fruit and Vegetables Option
    Cost Estimate Methodology
    Food Costs
    Prescriptions
    Infant Formula and Rounding
    Redemption Rates
    Food Prices
    Participant Projections
    Phased Implementation
    State Cost Variation
    Administrative Costs
    Uncertainties
    Price Volatility in the Dairy Market
    Reduce Assumed Preference for Soy Beverage
Alternatives
    Include Yogurt as a Milk Substitute for Food Packages IV-VII
    More Restrictive Dark Green and Orange Vegetable Rule
    No Infant food Fruits, Vegetables or Meats for Infants 6 Mos and 
Older
    Drop the Whole Grain Requirement for Both Bread and Cereal
Market Share Analysis
Appendix: Additional Cost Estimate Assumptions

    Date: July 17, 2006.
    Agency: USDA, Food and Nutrition Service.
    Contact: Cindy Long.
    Phone: (703) 305-2340.
    Fax: (703) 305-2576.
    E-mail: <a href="/cdn-cgi/l/email-protection#e182888f8598cf8d8e8f86a1878f92cf94928580cf868e97"><span class="__cf_email__" data-cfemail="e5868c8b819ccb898a8b82a5838b96cb90968184cb828a93">[email protected]</span></a>.
    Title: 7 CFR 246: Special Supplemental Nutrition Program for 
Women, Infants, and Children (WIC): Revisions in the WIC Food 
Packages.

Action

A. Nature

    Proposed Rule.

B. Need

    The WIC program addresses the supplemental nutritional needs of 
at-risk groups through the distribution of age and condition 
specific food packages, and a program of nutrition education that 
includes counseling, health and social service referrals, and 
breastfeeding promotion and support. WIC nutrition education 
provisions are governed by broad regulatory language that allows 
nutrition education provided to participants to respond to changes 
in dietary and health research. In contrast, WIC supplemental food 
packages are defined very specifically in the regulatory language. 
Consequently, as the population served by WIC has grown and become 
more diverse over the last 20 years, the nutritional risks faced by 
participants have changed, and though nutrition science has 
advanced, the WIC supplemental food packages have remained largely 
unchanged. This rule is needed to implement recommended changes to 
the WIC food packages based on the current supplemental nutritional 
needs of WIC participants and advances in nutrition science.

C. Affected Parties

    The program affected by this rule is the Special Supplemental 
Nutrition Program for Women, Infants, and Children (WIC). The 
parties affected by this regulation are the USDA's Food and 
Nutrition Service (FNS), State and local agencies that administer 
the WIC Program, retail vendors, and WIC participants.

Effects

    The following analysis describes the potential economic impact 
of this proposed rule. This rule is needed due to changes in the 
population served by WIC, and advances in nutrition and knowledge 
about the supplemental nutritional needs of those served by WIC. The 
changes in this rule are significant to the costs or overall 
operations to the program. The potential effects of these changes 
are highlighted below.

A. Background

    The WIC program was established in the 1970s to address the 
special supplemental nutritional needs of low-income pregnant and 
postpartum women, infants, and children up to age five who are 
determined to be at nutritional risk. Regulations governing the WIC 
program recognize a broad range of nutritionally related medical 
conditions for purposes of establishing program eligibility. These 
include anemia, low birth weight, chronic infections, overweight, 
underweight, and similar manifestations of poor nutrition suitable 
for direct measurement or diagnosis.\1\ WIC regulations also 
recognize that personal medical histories, dietary patterns, and 
economic circumstances may put otherwise healthy women or children 
at nutritional risk. Certification may therefore be extended to 
women facing high-risk pregnancies, pregnant women or mothers who 
abuse alcohol or drugs, homeless women and children, and infants and 
children with congenital malformations that may interfere with 
adequate nutrient intake or absorption.\2\ WIC addresses the 
supplemental nutritional needs of at-risk groups through the 
distribution of age and condition-specific food packages, and a 
program of nutrition education that includes counseling, social 
service referrals, and breastfeeding promotion and support.
---------------------------------------------------------------------------

    \1\ 7 CFR 246.7(e).
    \2\ Id.
---------------------------------------------------------------------------

    WIC's nutrition education provisions are governed by broad 
regulatory language that seeks to promote ``proper nutrition,'' 
``optimal use'' of WIC's supplemental foods, and appropriate advice 
concerning non-WIC foods.\3\ Compliance with this regulatory mandate 
presumes that nutrition education will respond to the supplemental 
nutrition needs of participants based on advances in

[[Page 44824]]

dietary and health research. The U.S. Department of Agriculture's 
(USDA) Food and Nutrition Service (FNS) provides provision of 
nutrition education to WIC participants that is consistent with the 
2005 Dietary Guidelines for Americans.
---------------------------------------------------------------------------

    \3\ 7 CFR 246.11.
---------------------------------------------------------------------------

    WIC's supplemental food packages, by contrast, are defined by 
regulation with specificity. The regulatory flexibility that 
characterizes WIC nutrition education does not extend to the 
prescription of individual food packages. The list of WIC-approved 
foods focused to provide select nutrient-rich foods; allowed 
substitutions provide only limited room for participant-specific 
food package tailoring.
    The population served by the WIC program has grown in size and 
diversity over time and the frequency of nutritional risks faced by 
WIC participants have changed. Most important, the content of 
existing WIC food packages no longer reflects the leading views of 
current nutrition science.

1. Current WIC Food Packages and Changing Nutritional Priorities

    Supplemental foods are offered to WIC participants in one of 
seven packages designed for the special supplemental nutritional 
needs of the following sub-populations:

I. Infants under four months old
II. Infants from four to twelve months old
III. Children and women with special dietary needs
IV. Children from one to five years old
V. Pregnant and breastfeeding women
VI. Non-breastfeeding postpartum women
VII. Exclusively breastfeeding women

    Inadequate nutrition was the prime motivating factor behind 
enactment of the WIC program.\4\ Nutrition research in the 1970's 
pointed to calcium, iron, high quality protein, and vitamins A and C 
as nutrients most likely to be lacking in the diets of low-income 
women, infants, and children. Current WIC food packages reflect that 
early research. Today's packages include some combination of: Iron-
fortified infant formulas, iron-fortified cereals, vitamin C rich 
juice, vitamin A and D fortified milk, eggs, cheese, dried beans or 
peas, peanut butter, tuna, and carrots. Other factors that 
contributed to the selection of these foods are their nutrient 
density, modest cost, wide availability, and broad acceptance by the 
WIC-eligible population.
---------------------------------------------------------------------------

    \4\ See 42 USC 1786(a).
---------------------------------------------------------------------------

    The nutritional risks faced by the low-income population of the 
1970s have changed. Although inadequate intake of some nutrients 
remains a concern,\5\ improved diets have reduced the prevalence of 
once relatively common deficiency diseases and underweight in at-
risk groups. A WIC program that now assists nearly eight million 
individuals monthly, including about half of the nation's 
infants,\6\ supplements the diets of an at-risk population with the 
very types of iron-fortified, nutrient-dense foods associated with 
this changed health picture. WIC's current food packages, little 
modified since the 1970s, were appropriately designed to address the 
recognized nutritional priorities of that time. But today's WIC 
population, like the U.S. population as a whole, faces a reordered 
set of priorities. Excessive intakes of some nutrients, including 
saturated fat, and of food energy have taken a place among the 
nation's top public health concerns.\7\ Other nutrients, including 
folate, vitamin E, and fiber, have since been identified as lacking 
in the diets of WIC-eligible sub-populations.\8\ While current WIC 
food packages continue to address important health risks of 
undernutrition, they do not target all identified inadequacies, and 
they may contribute to the risks associated with excessive intake of 
some nutrients.
---------------------------------------------------------------------------

    \5\ National Academies, Institute of Medicine (IOM). WIC Food 
Packages: Time for a Change, Washington, D.C.: The National 
Academies Press, 2005. pp. 31, 64.
    \6\ U.S. department of Agriculture, Food and Nutrition Web site, 
July 2005. www.fns.usda.gov/wic/FAQs/FAQ.HTM.
    \7\ See U.S. Department of Health and Human Services and U.S. 
Department of Agriculture, Dietary Guidelines for Americans, 2005, 
6th edition, Washington D.C.: U.S. Government Printing Office, 
January 2005. (USDHHS/USDA, 2005).
    \8\ IOM, p.59. Note, however, that these conclusions are based 
on self-reported food consumption data from the Continuing Survey of 
Food Intakes by Individuals (1994-1996 and 1998.) Underreporting of 
food intakes is suspected by women involved in the survey. And, the 
data do not include nutrients consumed in the form of dietary 
supplements. These factors may overstate the problem of nutrient 
inadequacies, and may understate the problem of excessive intakes.
---------------------------------------------------------------------------

    Medical consequences of improper diets include fetal or infant 
lead toxicity tied to low calcium intake by pregnant and 
breastfeeding women, birth defects caused by inadequate folate 
consumption during pregnancy, iron-deficiency anemia, and heart 
disease, diabetes, stroke, and cancer, all linked to obesity and 
excessive intake of saturated fat.\9\ Adjustments to the WIC food 
packages that move the levels of these priority nutrients closer to 
Recommended Dietary Allowances (RDAs) and Adequate Intake (AIs) 
levels of the Institute of Medicine's Dietary Reference Intakes may 
reduce the nutrition-related medical health risks of WIC 
participants.
---------------------------------------------------------------------------

    \9\ See IOM, p. 63; see also ``High Costs of Poor Eating 
Patterns in the States,'' Elizabeth Frazao, in America's Eating 
Habits: Changes and Consequences, Elizabeth Frazao, ed., Economic 
Research Service, U.S. Department of Agriculture, Washington, D.C., 
1999.
---------------------------------------------------------------------------

2. Changing Demographics of the WIC Population

    The population served by WIC has grown more diverse over time. 
(See Figure 1.) White and Black participants represented 72% of the 
WIC population in 1992; by 2004, just 56% of WIC participants fell 
into one of those two racial/ethnic groups.\10\ WIC's Hispanic 
population, itself a diverse group, has grown from the third largest 
to the largest over the same period. Greater ethnic diversity 
increases the demand for additional food options consistent with 
cultural preferences. The introduction of new foods and substitution 
options should broaden the appeal of WIC food packages and increase 
the effectiveness of WIC's educational message. Ultimately, wider 
acceptance of WIC-approved diets should improve the nutrition of 
underserved at-risk groups.
---------------------------------------------------------------------------

    \10\ U.S. Department of Agriculture, Food and Nutrition Service, 
Office of Analysis, Nutrition and Evaluation, WIC Participant and 
Program Characteristics 1992, Abt. Associates. Alexandria, VA: 1994.
    U.S. Department of Agriculture, Food and Nutrition Service, 
Office of Analysis, Nutrition and Evaluation, WIC Participant and 
Program Characteristics 2004, Abt. Associates. Alexandria, VA: 2005. 
The program characteristics studies performed prior to 1992 did not 
include participant data from Alaska, Hawaii, Puerto Rico, or U.S. 
territories. The racial/ethnic breakdowns from those earlier reports 
should not be directly compared to the ones contained in reports 
from 1992 forward.

---------------------------------------------------------------------------

[[Page 44825]]

[GRAPHIC] [TIFF OMITTED] TP07AU06.000

3. Institute of Medicine's Recommendations

    FNS contracted with the National Academies' Institute of 
Medicine (IOM) in 2003 to assess the nutritional health profile of 
the current WIC population, and to recommend changes in the content 
of the program's food packages. IOM examined the Continuing Survey 
of Food Intakes of Individuals (CSFII) food consumption survey data 
(see footnote 9) to evaluate the nutritional content of the diets of 
WIC-eligible and potentially WIC-eligible populations.\11\ IOM 
identified and prioritized a list of micro- and macro-nutrients \12\ 
whose consumption by the targeted populations fell outside of 
acceptable ranges.\13\ (See Table 1.)
---------------------------------------------------------------------------

    \11\ See IOM, p. 46. IOM used CSFII data for infants and 
children enrolled WIC. To maintain a sufficient sample size, IOM 
used CSFII results for all pregnant, breastfeeding, and non-
breastfeeding postpartum women.
    \12\ Micro-nutrients are nutrients the body requires in small 
amounts, e.g. vitamins and minerals. Macro-nutrients are nutrients 
that constitute the majority of an individual's diet, e.g. 
carbohydrates, proteins, and fats.
    \13\ See IOM, pp. 46 through 60.

 Table 1.--Priority Nutrients Identified by the Institute of Medicine (IOM) as Possibly Inadequate or Excessive
                                       in the Diets of WIC Sub-Populations
----------------------------------------------------------------------------------------------------------------
                                     Inadequate (grouped by relative levels of inadequacy)
        WIC subpopulation        ------------------------------------------------------------      Excessive
                                        Highest              High              Moderate
----------------------------------------------------------------------------------------------------------------
WIC infants:
    Non-breastfed under age one.  ..................  ..................  ..................  Zinc, preformed
                                                                                               vitamin A, food
                                                                                               energy.
    Breastfed, 6 to 11 months...  Iron, zinc........
WIC children:
    Ages 1 to 4.................  Vitamin E, fiber,   ..................  ..................  Zinc, preformed
                                   potassium.                                                  vitamin A, food
                                                                                               energy, saturated
                                                                                               fat.
Women:
    Pregnant, breastfeeding, non- Calcium,            Vitamins A, C, B6,  Iron, zinc,         Sodium and
     breastfeeding postpartum.     magnesium,          and folate.         thiamin, niacin,    saturated fat (as
                                   vitamin E,                              protein.            a percent of food
                                   potassium, fiber.                                           energy).
----------------------------------------------------------------------------------------------------------------

    IOM then recommended specific changes to the current WIC food 
packages to improve the nutritional balance of the diets of the WIC 
population. IOMs recommendations were guided by the following 
criteria: \14\
---------------------------------------------------------------------------

    \14\ IOM, p. 37.
---------------------------------------------------------------------------

    1. Reducing the prevalence of inadequate or excessive nutrient 
intake by WIC participants,
    2. Helping WIC participants achieve dietary patterns consistent 
with the 2005 Dietary Guidelines for Americans for individuals two 
years of age and older,\15\
---------------------------------------------------------------------------

    \15\ IOM, p. 153-154, 156-157.
---------------------------------------------------------------------------

    3. Bringing the diets of infants and children under age two into 
closer conformity with accepted recommendations; encouraging and 
supporting breastfeeding,
    4. Including foods in the WIC packages that are available in 
forms suitable for individuals with limited means of transportation, 
storage, or cooking,
    5. Including foods in the WIC packages that are commonly 
consumed and widely available, accommodate cultural preferences, and 
encourage WIC participation, and
    6. Giving consideration to the impact that the proposed changes 
will have on vendors, and on state and local WIC agencies.

B. Summary of Rule and Benefits

    With few changes, the recommendations of the IOM have been 
adopted as this proposed rule. The provisions of the rule and the 
potential benefits of these changes are summarized below.

1. Food Package I--Infants Under Six Months

    Proposed rule: Tie maximum infant formula prescriptions to 
breastfeeding practice.
    <bullet> Establish fully breastfed, partially breastfed, and 
fully formula-fed categories, and set maximum formula allowances for 
each. Food Package I currently specifies a

[[Page 44826]]

single maximum formula amount for all Package I recipients; local 
WIC staff may tailor the amount of formula to reflect with 
individual participant needs, based on frequency of breastfeeding. 
The new rule sets a maximum formula amount for partially breastfed 
infants that is roughly half the maximum provided to fully formula 
fed infants.
    <bullet> Powder formula alone is recommended for partially 
breastfed infants. Powder and non-powder options remain available 
for fully formula fed infants.
    Rationale and Benefits:
    <bullet> The infant breastfeeding categories are intended to 
promote breastfeeding. Breastfeeding provides important nutritional 
and health benefits beyond that provided by formula feeding; it is 
the AAPs recommended method of infant feeding.\16\ It is also 
proposed that the infants breastfeeding status be used to assign 
mothers to their own food packages. Mothers of fully formula fed 
infants under six months of age are assigned to Food Package VI; 
partially breastfeeding mothers of infants under six months are 
assigned to Package V which is relatively more attractive than 
Package VI for postpartum women due to the inclusion of additional 
foods and higher maximum allowances for the same foods that are 
provided in Package V.
---------------------------------------------------------------------------

    \16\ IOM, pp. 5, 6, 69.
---------------------------------------------------------------------------

    <bullet> Classification of infants by breastfeeding status makes 
it easier to ensure that partially breastfed infants are prescribed 
only powder formula, the option recommended by IOM to give parents 
greater control over the amount of formula prepared. This should 
reduce waste and contribute to safer formula use.
    Proposed rule: Delay introduction of complementary foods. Extend 
the age range of infants covered by Food Package I by two months. 
Currently, Food Package I supplements the diets of infants from 
birth through three months. Under the proposed rule, Food Package I 
would be provided to infants through five months of age. Under both 
the current and proposed rules, Food Package I contains no 
complementary foods. Extending the age range of infants served by 
Food Package I removes complementary foods (juice and infant cereal) 
from the food packages for four and five month old infants.
    Rationale and Benefits: Delaying the introduction of 
complementary foods until the infant reaches six months is 
consistent with the current recommendations of the American Academy 
of Pediatrics (AAP).
    Proposed rule: Increase maximum formula prescription at four 
months. Increase the maximum amount of formula allowed for four and 
five-month-old infants (relative to the amount allowed under current 
rules.)
    Rationale and Benefits: Calories lost through elimination of 
juice and infant cereal from Food Package I are replaced, in part, 
with increased formula prescription amounts. The package better 
meets the nutritional needs of the infant through to month 6.
    Proposed rule: No partially breastfed category for infants under 
one month. Do not provide formula to breastfed infants under one 
month old. Infants under one month will be recognized as either 
fully breastfed or fully formula-fed. No infant will be prescribed 
formula in the amount specified by Food Package I for partially 
breastfed infants until he or she reaches one month.
    Rationale and Benefits: By not offering a partially breastfed 
option for infants under one month old, the proposed rule intends to 
encourage mothers to continue a practice of breastfeeding that may 
have begun at the hospital. Additionally, the amount of milk a 
breastfeeding woman produces depends directly on how often and how 
long she nurses. Providing supplemental formula to a new mother may 
interfere with her milk production and success at continued 
breastfeeding.
    Proposed rule: No low iron formula. Discontinue the prescription 
of low iron infant formula for infants of all ages.
    Rationale and Benefits: Iron fortified formulas continue to play 
an important role in preventing iron deficiency in infants. The AAP 
recognizes no medical condition that would justify the feeding of 
low iron formula to infants.
    Proposed rule: Reclassify prescriptions of exempt infant formula 
under Package III. Administer exempt formulas, other than those 
prescribed for common food allergies, under Food Package III. 
Currently, all infants are classified as recipients of Food Packages 
I or II. This proposal would simply reclassify certain Package I 
(and II) recipients as Package III recipients; it is not intended to 
alter the types of foods prescribed to infants with qualifying 
conditions.
    Rationale and Benefits: Currently, only children and adults 
prescribed special medical foods are classified as Package III 
recipients. Grouping together all recipients of medical foods and 
exempt formulas is meant to increase management efficiency, and 
facilitate the tracking of the costs and benefits of medical and 
exempt food prescriptions.

2. Food Package II--Infants 6 Through 11 Months

    Proposed rule: Delay introduction of complementary foods. Delay 
the age at which infants become eligible for Food Package II. 
Infants are currently made eligible for Food Package II and its 
complementary foods at four months of age. The proposed rule would 
make infants eligible for Package II foods at six months of age.
    Rationale and Benefits: Delaying the introduction of 
complementary foods until the infant reaches six months is 
consistent with the current recommendations of the AAP.
    Proposed rule: Tie maximum formula prescription to breastfeeding 
practice. Establish fully breastfed, partially breastfed, and fully 
formula-fed categories, and set maximum formula allowances for each. 
The new rule sets a maximum formula amount for partially breastfed 
infants that is roughly half the maximum provided to fully formula-
fed infants.
    Rationale and Benefits: Like the corresponding proposal under 
Food Package I, Package II breastfeeding categories will be used to 
assign mothers to their own food packages. However, once an infant 
reaches six months of age, the consequences of the infants 
breastfeeding status on the mothers food package eligibility are 
greater. Mothers whose infants are prescribed no more formula than 
the maximum allowed for a partially breastfed infant will remain 
eligible for Food Package V. Mothers who accept more formula will be 
considered non-breastfeeding, and will be eligible for no food 
package at all. The proposed rule encourages mothers to continue 
breastfeeding beyond six months postpartum. Increasing the rate and 
duration of breastfeeding is a recommendation of the AAP.\17\
---------------------------------------------------------------------------

    \17\ IOM, p. 69.
---------------------------------------------------------------------------

    Proposed rule: Reduce maximum formula prescription amounts. 
Reduce the amount of formula, relative to current rules, for 
partially breastfed and fully formula-fed infants.
    Rationale and Benefits: With the addition of infant foods (see 
below), the revised Package II provides close to the recommended 
levels of priority nutrients without excess food energy. Reducing 
formula prescriptions should encourage parents to introduce 
complementary foods to their infants beginning at six months of 
age.\18\
---------------------------------------------------------------------------

    \18\ IOM, pp. 94, 113.
---------------------------------------------------------------------------

    Proposed rule: Replace juice with fruits and vegetables.
    <bullet> Eliminate juice from Food Package II. Add infant food 
fruits and vegetables to the package. Allow fresh bananas as a 
substitute for a portion of the infant food fruits and vegetables.
    <bullet> Provide more infant food fruits and vegetables to fully 
breastfed infants than to partially breastfed or fully formula-fed 
infants.
    Rationale and Benefits:
    <bullet> Increased fruit and vegetable consumption is among the 
major recommendations of the 2005 Dietary Guidelines for Americans; 
commonly consumed fruits and vegetables provide several of the 
priority nutrients identified by the IOM.\19\ The introduction of 
fruits and vegetables at an early age may promote acceptance and 
increased consumption.\20\
---------------------------------------------------------------------------

    \19\ IOM, p. 100.
    \20\ Id.
---------------------------------------------------------------------------

    <bullet> Juice does not provide nutritional benefit beyond that 
available from whole fruits and vegetables.\21\
---------------------------------------------------------------------------

    \21\ IOM, p. 103.
---------------------------------------------------------------------------

    <bullet> Eliminating juice offsets the cost of providing infant 
food fruits and vegetables.
    <bullet> Providing more infant food fruits and vegetables to 
fully breastfed infants encourages the continuation of breastfeeding 
by increasing the value of the fully breastfed package.\22\ It also 
seeks to provide an amount sufficient to mix with infant food meat 
to improve palatability and acceptance of that food. (See below.)
---------------------------------------------------------------------------

    \22\ IOM, p. 94.
---------------------------------------------------------------------------

    Proposed rule: Provide infant food meat to fully breastfed 
infants. Add infant food meat to Package II for fully breastfed 
infants.
    Rationale and Benefits: Infant food meat supplies iron and zinc 
for infants age six months and older, that breast milk alone does 
not supply. Increasing the value of the fully breastfed package is 
also intended to encourage continued breastfeeding.

[[Page 44827]]

    Proposed rule: No low iron formula. Discontinue the prescription 
of low iron infant formula.
    Rationale and Benefits: Iron fortified formulas continue to play 
an important role in preventing iron deficiency in infants. The AAP 
recognizes no medical condition that would justify the feeding of 
low iron formula to infants.
    Proposed rule: Reclassify prescriptions of exempt infant formula 
under Package III. Administer exempt formulas to infants under Food 
Package III.
    Rationale and Benefits: Grouping together all recipients of 
medical foods and exempt formulas is meant to increase management 
efficiency, and facilitate the tracking of the costs and benefits of 
medical and exempt food prescriptions.
    Proposed rule: Disallow prescription of infant cereal with added 
ingredients. Infant cereal with added fruit, milk, formula, or other 
non-grain foods may not be prescribed under Food Package II.
    Rationale and Benefits: As recommended by IOM, the proposed rule 
formalizes federal policy \23\ which states that cereal combinations 
are not allowed. The Department's policy is based on recommendations 
of the American Academy of Pediatrics and costs concerns. The 
American Academy of Pediatrics recommends that single ingredient 
foods be introduced one at a time in an effort to isolate food 
sensitivities and possibly avert the development of food 
intolerances. Although cereal/fruit combinations may be appropriate 
once the risk of sensitivity has diminished, these combination foods 
are more expensive than regular infant cereal. Therefore, in an 
effort to contain the cost of the food packages, the Department has 
not authorized them. In reference to cereal/formula combinations, 
since infant formula is already provided in the food packages, the 
Department does not believe it is necessary to provide additional 
infant formula in combination with infant cereal.
---------------------------------------------------------------------------

    \23\ November 12, 1980 final rule.
---------------------------------------------------------------------------

3. Food Package III--Medically Fragile Participants

    Proposed rule: Administer exempt formulas to infants with 
qualifying conditions under Package III.
    Infants with a qualifying condition (see below) who currently 
receive exempt infant formulas would be moved from Package I or 
Package II to Package III.
    Rationale and Benefits: The current system, which assigns 
infants with special dietary needs to either Packages I or II, while 
women and children with special dietary needs are placed in Package 
III, makes it difficult to track participation and costs associated 
with providing medical foods. Grouping infants with qualifying 
conditions with the category of women and children receiving medical 
foods is expected to increase management efficiency and facilitate 
the tracking of the costs and benefits of serving this segment of 
the WIC population.
    Proposal: Clarify language governing Package III's purpose and 
scope.
    <bullet> The proposed rule would provide additional guidance to 
states on the nature of medical conditions that qualify a WIC 
participant for Package III medical foods.
    <bullet> Prescription of a medical food would also require 
additional justification and instructions by a licensed health care 
professional.
    <bullet> The proposal would also clarify the definition of WIC-
eligible medical foods.
    Rationale and Benefits: The threshold of eligibility for Package 
III medical foods is currently unclear. The distinction between 
conventional foods marketed to the medically needy and WIC 
authorized medical foods can also be difficult to make. The proposed 
rule will provide guidance to state agencies that should promote 
efficiency and reduce the costs of restricting Package III to 
participants with qualifying medical conditions.
    Proposed rule: Make non-Package III foods available to Package 
III recipients. In addition to the medical foods and exempt formulas 
currently prescribed to Package III recipients, the proposed rule 
would offer these individuals all of the foods in the packages to 
which they would have been eligible in the absence of their special 
medical needs.
    Rationale and Benefits: Provides Package III recipients access 
to the same set of nutrients as other WIC recipients at the same 
life stage. An individual's health constraints, not his or her 
administrative status as a Package III recipient, are all that 
should limit the prescription of foods from a standard WIC package.

4. Food Package IV--Children From Age One Up to Age Five

    Proposed rule: Reduce the prescribed amount of milk; modify 
substitution options. 
    <bullet> The amount of milk that may be prescribed to children 
would be reduced from 24 quarts to 16 quarts per month.
    <bullet> Under current rules, cheese may be prescribed as a 
substitute for up to 12 quarts of milk. The proposed rule would 
allow cheese to replace up to three quarts of milk. The substitution 
rate of one pound of cheese for three quarts of milk would remain 
unchanged.
    <bullet> Soy products will be allowed as a milk substitute on a 
restricted basis; soy may only be prescribed to children with a 
documented medical need.
    Rationale and Benefits:
    <bullet> Reducing the amount of milk provided to children brings 
the prescribed amounts into conformance with recommended limits on 
saturated fat and total fat consumption by children as a percent of 
food energy and with the 2005 Dietary Guidelines for Americans, and 
reduces the prevalence of inadequate and excessive nutrient intakes. 
Reduced intake of saturated fat is associated with decreased risk of 
coronary heart disease; total fat intake in excess of 35% of food 
energy makes it difficult to limit total calories to recommended 
levels.\24\ As noted by IOM, the revised amount of fat-reduced milk 
and milk products in Food Package IV are approximately the amount 
recommended in the 2005 Dietary Guidelines for Americans or other 
dietary guidance.\25\
---------------------------------------------------------------------------

    \24\ USDHHS/USDA, 2005, p. 29.
    \25\ IOM, p. 153.
---------------------------------------------------------------------------

    <bullet> Reducing the amount of cheese that may be substituted 
for milk will reduce saturated fat and total fat intake by children 
age two and older. (See next proposal on fat reduced milk.) This 
proposal will also offset costs, allowing for the addition of other 
foods.
    <bullet> The 2005 Dietary Guidelines for Americans stresses the 
importance of milk consumption in the development of bone mass in 
children.\26\ While soy products may be an appropriate choice for 
children who cannot consume milk, the IOM does not believe that soy 
should be made available to satisfy participant preference in the 
absence of medical need.
---------------------------------------------------------------------------

    \26\ USDHHS/USDA, 2005, p. 24.
---------------------------------------------------------------------------

    <bullet> IOM recommended yogurt as an alternative to fluid milk. 
To ensure cost neutrality yogurt was omitted as a fluid milk 
substitution. (See discussion of yogurt as a milk substitute on page 
51.)
    Proposed rule: Provide only fat-reduced milk to older children. 
Prescribe only fat-reduced milk to children age two and above. 
Prescribe only whole milk to children under age two.
    Rationale and Benefits: Increases the likelihood that the amount 
of total fat and saturated fat in the diets of children age two and 
over will be consistent with the 2005 Dietary Guidelines for 
Americans. This is also consistent with the recommendations of the 
American Academy of Pediatrics.
    Proposed rule: Modify/clarify reconstitution rates for dry and 
evaporated milk. The reconstitution rate for evaporated milk is 
changed from 13 to 16 ounces of evaporated milk per reconstituted 
quart. The reconstitution rate for powdered milk is restated in 
terms of fluid ounces rather than quarts; this change does not alter 
the reconstitution rate itself.
    Rationale and Benefits: The proposed reconstitution rate for 
evaporated milk reflects its degree of concentration. Restatement of 
the reconstitution rate of powdered milk is intended to assist state 
agencies in making reconstitution calculations for a growing range 
of powdered milk container sizes.
    Proposed rule: Reduce juice prescriptions; add fruits and 
vegetables.
    <bullet> Reduce monthly maximum juice prescription from 288 
fluid ounces to 128. Clarify that juice must be 100% unsweetened 
fruit or vegetable juice, that it contain a minimum of 30 milligrams 
of vitamin C per 100 milliliters, and that it be pasteurized.
    <bullet> Add a $6 monthly voucher to the package for the 
purchase of any combination of fresh or processed fruits and 
vegetables.
    Rationale and Benefits:
    <bullet> Increased fruit and vegetable consumption is among the 
major recommendations of the 2005 Dietary Guidelines for Americans; 
commonly consumed fruits and vegetables provide several of the 
priority nutrients identified by the IOM. Evidence also suggests 
that fruit and vegetable consumption is associated with reduced 
incidence of some chronic

[[Page 44828]]

diseases.\27\ And the introduction of fruits and vegetables at an 
early age may promote acceptance and increased consumption.
---------------------------------------------------------------------------

    \27\ IOM, p. 100.
---------------------------------------------------------------------------

    <bullet> Juice does not provide nutritional benefit beyond that 
available from whole fruits and vegetables.
    <bullet> A voucher, rather than a more narrowly defined fruit 
and vegetable option, offers flexibility, ensures participant 
access, and minimizes costs of compliance by administrative agencies 
and WIC-approved vendors. Allowing participants to choose any 
variety of fruits or vegetables \28\ is intended to increase 
consumption by accommodating individual and culturally based 
preferences. The voucher form also ensures that some variety of 
fresh or processed fruits and vegetables will be available, year-
round, at most food stores. And state and local WIC agencies need 
not tailor specific fruit and vegetable prescriptions to 
participants, nor will they be burdened with additional rules 
governing substitution between fresh and processed forms.
---------------------------------------------------------------------------

    \28\ Limited exceptions to individual choice include white 
potatoes, herbs, breaded vegetables, soups, salad bar items, 
pickles, juice, edible blossoms, decorative gourds and painted 
pumpkins.
---------------------------------------------------------------------------

    <bullet> Reducing juice partially offsets the cost of providing 
fruit and vegetable vouchers.
    <bullet> IOM recommended cash-value food instruments for fruits 
and vegetables at the level of $8 per month for children. To ensure 
cost neutrality, cash-value food instruments for fruits and 
vegetables was decreased to $6 per month. (See discussion of fruit 
and vegetable option on page 36.)
    Proposed rule: Add whole grain breads; add whole grain 
requirement to cereal.
    <bullet> Add two pounds of whole grain bread to the food 
package. Only bread meeting U.S. Food and Drug Administration (FDA) 
standards for whole grain labeling would be allowed.\29\
---------------------------------------------------------------------------

    \29\ See 21 CFR Part 136, Section 136.180, and FDA's Health 
Claim Notification for Whole Grain Foods with Moderate Fat Content 
at www.cfsan.fda.gov/~dms/flgrain2.html.
---------------------------------------------------------------------------

    <bullet> Several whole grain products would be allowed as 
substitutions for bread. These include brown rice, bulgur, and whole 
grain barley without added sugar, fat, oil, or sodium. Soft corn or 
whole wheat tortillas would be allowed as an additional substitute 
at the option of state agencies. States may limit or completely 
eliminate substitutes if needed to control food costs.
    <bullet> Require that WIC authorized breakfast cereals \30\ meet 
the same whole grain requirements as bread.
---------------------------------------------------------------------------

    \30\ The proposed rule would also replace the existing terms 
``cereal (hot or cold)'' and ``adult cereal (hot or cold)'' with 
``breakfast cereal'' in 7 CFR 246.10(c).
---------------------------------------------------------------------------

    Rationale and Benefits:
    <bullet> This proposal is consistent with current 
recommendations that Americans consume at least three ounce 
equivalents of whole grain foods daily as stated in the 2005 Dietary 
Guidelines for Americans.\31\ Whole grains provide dietary fiber, a 
priority nutrient identified by the IOM. Consumption of recommended 
amounts of whole grain foods can reduce the risk of chronic disease, 
and may help individuals control their weight.\32\
---------------------------------------------------------------------------

    \31\ USDHHS/USDA, 2005, p. 25.
    \32\ Id.
---------------------------------------------------------------------------

    <bullet> Allowing a variety of substitutes for whole grain bread 
increases the likelihood of participant acceptance by accommodating 
individual taste and cultural preference.
    Proposed rule: Reduce maximum egg prescription. Reduce the 
maximum egg prescription from two and one-half dozen per month \33\ 
to one dozen.
---------------------------------------------------------------------------

    \33\ Some states currently allow just two dozen as the monthly 
maximum.
---------------------------------------------------------------------------

    Rationale and Benefits: This reduction is consistent with the 
2005 Dietary Guidelines for Americans and with IOM's recommendation 
that dietary levels of cholesterol be reduced, where possible, 
consistent with an adequate diet. Protein is no longer a priority 
nutrient for supplementation.\34\
---------------------------------------------------------------------------

    \34\ IOM, pp. 82, 108.
---------------------------------------------------------------------------

    Proposed rule: Allow canned beans as a substitute for dry beans. 
Allow canned beans as a substitute for dry at the rate of sixty-four 
ounces per pound.
    Rationale and Benefits: Accommodates participant preference and 
may encourage consumption because canned beans can be prepared more 
quickly than dried beans.

5. Food Package V--Pregnant and Partially Breastfeeding Women Up to One 
Year Postpartum

    Proposed rule: Condition eligibility for Package V on 
breastfeeding practice. Mothers who request, and are prescribed, 
more than the maximum amount of formula allowed for partially 
breastfed infants will no longer be eligible for Food Package V. 
Currently, women who breastfeed at least once per day are eligible 
for this package. Reclassified as non-breastfeeding for purposes of 
WIC eligibility, these women will be assigned Food Package VI up to 
six months postpartum; they will receive no food package after six 
months.
    Rationale and Benefits: This is consistent with the proposed 
rule governing the breastfeeding status of infants (see explanation 
under sections 1 and 2). The rule provides an incentive for mothers 
to breastfeed their infants. This provision is designed to better 
promote and support the establishment of successful long-term 
breastfeeding among women and encourages a greater contribution of 
breast milk to the infant's diet.
    Proposed rule: Reduce the prescribed amount of milk; introduce 
new substitution options.
    <bullet> The maximum amount of milk that may be prescribed to 
Package V recipients would be reduced from 28 quarts to 22 quarts 
per month.
    <bullet> Under current rules, cheese may be prescribed as a 
substitute for up to 12 quarts of milk. The proposed rule would 
allow cheese to replace just three quarts of milk. The substitution 
rate of one pound of cheese for three quarts of milk would remain 
unchanged.
    <bullet> Calcium-set tofu \35\, and calcium and vitamin D 
fortified soy beverage would be introduced as new milk substitutes. 
Each pound of tofu would replace one quart of milk. For most women, 
cheese and tofu, combined, could replace no more than four quarts of 
milk; women with documented medical needs may be prescribed these 
substitutes in amounts that exceed the four quart maximum. No more 
than one pound of cheese may be substituted for milk.
---------------------------------------------------------------------------

    \35\ Tofu prepared with only calcium salts.
---------------------------------------------------------------------------

    <bullet> Soy beverage would be allowed as a substitute for 
Package V's entire milk allowance.
    <bullet> IOM recommended yogurt as an alternative to fluid milk. 
To ensure cost neutrality yogurt was omitted as a fluid milk 
substitution. (See discussion of yogurt as a milk substitute on page 
51.)
    <bullet> States may limit allowable milk substitutes to soy 
beverage if needed to control food costs.
    Rationale and Benefits:
    <bullet> Reducing the amount of milk provided through WIC is 
consistent with recommended limits on saturated fat, total fat, and 
cholesterol consumption by American adults put forth in the 2005 
Dietary Guidelines for Americans. Reduced intake of saturated fat is 
associated with decreased risk of coronary heart disease; and total 
fat intake in excess of 35% of food energy makes it difficult to 
limit total calories to recommended levels.\36\ As noted by IOM, the 
revised amount of fat-reduced milk and milk products in Food Package 
V are approximately the amount recommended in the 2005 Dietary 
Guidelines for Americans.\37\
---------------------------------------------------------------------------

    \36\ USDHHS/USDA, 2005, p. 29.
    \37\ IOM, p. 153.
---------------------------------------------------------------------------

    <bullet> Reducing the amount of cheese that may be substituted 
for milk may reduce saturated fat and total fat intake by 
participants. Limiting substitutions of cheese and tofu to four 
quarts of milk will reduce costs. This permits the addition of other 
food and substitution options to the package.
    <bullet> Allowing tofu and soy beverage as substitutes for milk 
may help ensure adequate calcium intake by individuals who do not or 
cannot consume milk. These products are culturally preferable to 
milk within some groups, and may be consumed by individuals with 
lactose maldigestion.
    Proposed rule: Reduce maximum juice prescription; add fruits and 
vegetables.
    <bullet> Reduce monthly maximum juice prescription from 288 
fluid ounces to 144. Clarify that juice must be 100% unsweetened 
fruit or vegetable juice, that it contain a minimum of 30 milligrams 
of vitamin C per 100 milliliters, and that it be pasteurized.
    <bullet> Add an $8 monthly voucher to the package for the 
purchase of any combination of fresh or processed fruits and 
vegetables.
    Rationale and Benefits:
    <bullet> (The rationales and benefits for this proposal are the 
same as those for the introduction of fruits and vegetables to Food 
Package IV. See explanation under section 4.)
    <bullet> IOM recommended cash-value food instruments for fruits 
and vegetables at the level of $10 per month for women. To ensure 
cost neutrality, cash-value food instruments for fruits and 
vegetable was decreased to $8 per month. (See discussion of fruit 
and vegetable option on page 36.)
    Proposed rule: Add whole grain breads.

[[Page 44829]]

    <bullet> Add one pound of whole grain bread to the food package. 
Only bread meeting FDA standards for whole grain labeling would be 
allowed.
    <bullet> Several whole grain products would be allowed as 
substitutions for bread. These include brown rice, bulgur, and whole 
grain barley without added sugar, fat, oil, or sodium. Soft corn or 
whole wheat tortillas would be allowed as an additional substitute 
at the option of state agencies. States may limit or completely 
eliminate substitutes if needed to control food costs.
    Rationale and Benefits: (See discussion for comparable proposal 
under section 4.)
    Proposed rule: Reduce maximum egg prescription. Reduce the 
maximum egg prescription from two and one-half dozen per month to 
one dozen.
    Rationale and Benefits: This reduction is consistent with the 
2005 Dietary Guidelines for Americans and with IOM's recommendation 
that dietary levels of cholesterol be reduced, where possible, 
consistent with an adequate diet. In addition, the IOM determined 
that protein is no longer a priority nutrient for the WIC 
population.
    Proposed rule: Allow canned beans as a substitute for dry beans. 
Allow canned beans as a substitute for dry at the rate of sixty-four 
ounces per pound.
    Rationale and Benefits: Accommodates participant preference and 
may encourage consumption because canned beans can be prepared more 
quickly than dried beans.
    Proposed rule: Increase total amount of peanut butter and beans 
Peanut butter is currently offered as a substitute for dry beans. 
The proposal would provide both one pound of dry beans and 18 ounces 
of peanut butter to Package V recipients. The rule also clarifies 
that Package V recipients may replace both dry beans and peanut 
butter with canned beans.
    Rationale and Benefits: This adds food energy and priority 
nutrients to the diets of breastfeeding women, including iron, 
folate, Vitamin E, and fiber.

6. Food Package VI--Postpartum Women (Up to Six Months Postpartum)

    Proposed rule: Reduce the prescribed amount of milk; introduce 
new substitution options.
    <bullet> The maximum amount of milk that may be prescribed to 
Package VI recipients would be reduced from 24 quarts to 16 quarts 
per month.
    <bullet> Under current rules, cheese may be prescribed as a 
substitute for up to 12 quarts of milk. The proposed rule would 
allow cheese to replace just three quarts of milk. The substitution 
rate of one pound of cheese for three quarts of milk would remain 
unchanged. Calcium-set tofu, and calcium and vitamin D fortified soy 
beverage would be introduced as new milk substitutes. Each pound of 
tofu would replace one quart of milk. For most women, cheese and 
tofu, combined, could replace no more than four quarts of milk; 
women with documented medical needs may be prescribed these 
substitutes in amounts that exceed the four quart maximum. No more 
than one pound of cheese may be substituted for milk.
    <bullet> Soy beverage would be allowed as a substitute for 
Package VI's entire milk allowance.
    <bullet> IOM recommended yogurt as an alternative to fluid milk. 
To ensure cost neutrality yogurt was omitted as a fluid milk 
substitution. (See discussion of yogurt as a milk substitute on page 
51.)
    <bullet> States may limit allowable milk substitutes to soy 
beverage if needed to control food costs.
    Rationale and Benefits:
    <bullet> As noted by IOM, the revised amount of fat-reduced milk 
and milk products in Food Package VI includes more than two thirds 
of the 2005 Dietary Guidelines for Americans recommended 
amounts.\38\
---------------------------------------------------------------------------

    \38\ IOM, p. 153.
---------------------------------------------------------------------------

    <bullet> (See the discussion for the comparable proposal under 
section 5.)
    Proposed rule: Reduce maximum juice prescription; add fruits and 
vegetables.
    <bullet> Reduce monthly maximum juice prescription from 192 
fluid ounces to 96. Clarify that juice must be 100% unsweetened 
fruit or vegetable juice, that it contain a minimum of 30 milligrams 
of vitamin C per 100 milliliters, and that it be pasteurized.
    <bullet> Add an $8 monthly voucher to the package for the 
purchase of any combination of fresh or processed fruits and 
vegetables.
    Rationale and Benefits:
    <bullet> (See the discussion for the comparable proposal under 
section 4.)
    <bullet> IOM recommended cash-value food instruments for fruits 
and vegetables at the level of $10 per month for women. To ensure 
cost neutrality, cash-value food instruments for fruits and 
vegetable was decreased to $8 per month. (See discussion of fruit 
and vegetable option on page 36.)
    Proposed rule: Reduce maximum egg prescription. Reduce the 
maximum egg prescription from two and one-half dozen per month to 
one dozen.
    Rationale and Benefits: This reduction is consistent with the 
2005 Dietary Guidelines for Americans and with IOM's recommendation 
that dietary levels of cholesterol be reduced, where possible, 
consistent with an adequate diet.
    Proposed rule: Add beans and peanut butter to the food package. 
One pound of dry beans or 18 ounces of peanut butter would be added 
to Package VI. The same canned bean substitution option added to 
Packages IV, V, and VII would be extended to Package VI recipients 
as well.
    Rationale and Benefits: The proposal would supplement the diets 
of postpartum women with several priority nutrients, including iron, 
folate, Vitamin E, and fiber.

7. Food Package VII--Exclusively Breastfeeding Women

    Proposed rule: Reduce the prescribed amount of milk; introduce 
new substitution options.
    <bullet> The maximum amount of milk that may be prescribed to 
Package VII recipients would be reduced from 28 quarts to 24 quarts 
per month.
    <bullet> Under current rules, cheese may be prescribed as a 
substitute for up to 12 quarts of milk. The proposed rule would 
allow cheese to replace just six quarts of milk. The substitution 
rate of one pound of cheese for three quarts of milk would remain 
unchanged.
    <bullet> Calcium-set tofu, and calcium and vitamin D fortified 
soy beverage would be introduced as new milk substitutes. Each pound 
of tofu would replace one quart of milk. For most women, cheese and 
tofu, combined, could replace no more than six quarts of milk; women 
with documented medical needs may be prescribed these substitutes in 
amounts that exceed the six quart maximum. No more than two pounds 
of cheese may be substituted for milk.
    <bullet> Soy beverage would be allowed as a substitute for 
Package VII's entire milk allowance.
    <bullet> IOM recommended yogurt as an alternative to fluid milk. 
To ensure cost neutrality yogurt was omitted as a fluid milk 
substitution. (See discussion of yogurt as a milk substitute on page 
51.)
    <bullet> States may limit allowable milk substitutes to soy 
beverage if needed to control food costs.
    Rationale and Benefits:
    <bullet> As noted by IOM, the revised amount of fat-reduced milk 
and milk products in Food Package VII approximately meets the 2005 
Dietary Guidelines for Americans recommended amount.\39\ The maximum 
milk prescription under Package VII is reduced by just 14%; the 
comparable reductions under Packages V and VI are 21% and 33%, 
respectively. In addition, Package VII recipients are permitted to 
substitute up to six quarts of milk with tofu and cheese; the other 
women's packages limit milk substitutes to four quarts. Package VII, 
which currently provides more food energy and nutrients than do 
Packages V and VI, is made more attractive relative to these other 
packages as a result of this proposal. This is consistent with the 
general aim of the rule to encourage the incidence and duration of 
breastfeeding in the WIC population and to meet the supplemental 
nutritional needs of breastfeeding women.
---------------------------------------------------------------------------

    \39\ IOM, p. 153.
---------------------------------------------------------------------------

    <bullet> (See the discussion for the comparable proposal under 
section 5.)
    Proposed rule: Reduce maximum juice prescription; add fruits and 
vegetables.
    <bullet> Reduce monthly maximum juice prescription from 336 
fluid ounces to 144. Clarify that juice must be 100% unsweetened 
fruit or vegetable juice, that it contain a minimum of 30 milligrams 
of vitamin C per 100 milliliters, and that it be pasteurized.
    <bullet> Add an $8 monthly voucher to the package for the 
purchase of any combination of fresh or processed fruits and 
vegetables.
    <bullet> Eliminate the separate prescription of carrots.
    Rationale and Benefits:
    <bullet> (See the discussion for the comparable proposal under 
section 4.)
    <bullet> IOM recommended cash-value food instruments for fruits 
and vegetables at the level of $10 per month for women. To ensure 
cost neutrality, cash-value food instruments for fruits and 
vegetable was decreased to $8 per month. (See discussion of fruit 
and vegetable option on page 36.)

[[Page 44830]]

    Proposed rule: Add whole grain breads.
    <bullet> Add one pound of whole grain bread to the food package. 
Only bread meeting FDA standards for whole grain labeling would be 
allowed.
    <bullet> Several whole grain products would be allowed as 
substitutions for bread. These include brown rice, bulgur, and whole 
grain barley without added sugar, fat, oil, or sodium. Soft corn or 
whole wheat tortillas would be allowed as an additional substitute 
at the option of state agencies. States may limit substitutes if 
needed to control food costs.
    Rationale and Benefits: (See discussion for comparable proposal 
under section 4.)
    Proposed rule: Reduce maximum egg prescription. Reduce the 
maximum egg prescription from two and one-half dozen per month to 
one dozen.
    Rationale and Benefits: This reduction is consistent with the 
2005 Dietary Guidelines for Americans and with IOM's recommendation 
that dietary levels of cholesterol be reduced, where possible, 
consistent with an adequate diet.
    Proposed rule: Allow canned beans as a substitute for dry. Allow 
canned beans as a substitute for dry at the rate of sixty-four 
ounces per pound. Also clarifies that Package VII recipients may 
replace both dry beans and peanut butter with canned beans.
    Rationale and Benefits: Accommodates participant preference and 
may encourage consumption.
    Proposed rule: Modify Package VII's canned fish provision.
    <bullet> Increase the maximum canned fish prescription to 30 
ounces. Clarify that fish packaged in foil pouches meets WIC 
requirements.
    <bullet> Allow three varieties of canned fish that do not pose a 
mercury hazard as identified by federal advisories of the Food and 
Drug Administration and the U.S. Environmental Protection Agency for 
breastfeeding women.
    Rationale and Benefits:
    <bullet> For ease of administration by State agencies, to 
accommodate participant preferences, and to minimize intake of 
mercury, the proposed rule would allow only canned light tuna, 
salmon and sardines.
    <bullet> Increasing quantity provides breastfeeding women with 
more protein and omega-3 fatty acids.

8. Other Provisions (Non Food-Package Specific)

    Proposed rule: Clarifies the right of states to impose 
restrictions on WIC foods. States retain the right to exclude 
particular products, by brand or variety, from the food packages 
distributed to their residents. States are authorized to set 
standards for WIC approval that are more restrictive than those set 
by the federal government; they may not authorize the prescription 
of foods that do not meet minimum WIC-eligibility requirements set 
forth in regulations. The states may take into account issues of 
cost, nutrition, statewide availability, and participant appeal in 
setting these restrictions.
    Rationale and Benefits: Federal specifications for WIC-approved 
foods are designed to ensure minimum standards of nutrition in food 
packages that appeal broadly to American consumers and can be 
provided at a reasonable cost. Permitting the states to set 
additional criteria consistent with their own market and population 
profiles encourages the development of state-approved food lists 
that meet or exceed nutritional standards, maintain participant 
acceptance, and control costs.
    Proposed rule: Ends the state practice of categorical 
nutritional tailoring. States will no longer be permitted to 
construct their own standardized set of food packages for WIC 
subpopulations with common supplemental nutritional needs. The full 
maximum monthly allowances of all foods in all packages must be made 
available to participants if medically or nutritionally warranted.
    Rationale and Benefits: The IOM identified several nutrients, 
including saturated fat, and identified food energy, that are 
overconsumed by some WIC-eligible subpopulations. Long before the 
IOM report, however, overweight and obesity in the U.S. were 
recognized as public health issues. Categorical nutritional 
tailoring is the state practice of formalizing these modifications 
into a standard set of food packages that are prescribed in place of 
the USDA-designed packages. The revisions to the WIC packages 
proposed by this rule make categorical tailoring unnecessary and 
inappropriate. The revised packages are designed to deliver an 
appropriate set of nutrients when foods are prescribed at the 
specified maximums. Participants may still refuse amounts of or 
entire foods, and foods that pose a risk to the participant's health 
(e.g., a food that causes an allergic reaction) should not be 
prescribed. Additionally, individual nutritional tailoring, based on 
the Competent Professional Authority's assessment of a participant's 
nutrition needs, is still allowed. This provision would not preclude 
state agencies from making administrative adjustments for economic 
and administrative convenience, i.e., requiring least expensive 
brands, packaging or physical forms of WIC supplemental foods.
    Proposed rule: Prohibit states from petitioning the USDA for new 
food package substitutions. A process is currently in place to 
accept and evaluate requests by state WIC agencies to add new foods 
to the program's list of allowed substitutes. This process is 
designed to permit appropriate consideration of the cultural norms 
and preferences of the diverse client populations of the different 
state WIC agencies.
    Rationale and Benefits: Since 1980, the Department has only 
received 10 food package petitions. Developing, reviewing, and 
analyzing cultural food package proposals is a time consuming 
process for WIC State agencies and the Department. The increased 
variety and choice in the supplemental foods proposed in the rule 
will provide state agencies increased flexibility in prescribing 
culturally appropriate packages for diverse groups without the need 
to petition the Department for such changes. The IOM was charged 
with considering the cultural needs of WIC participants and its 
recommendations for revisions to the WIC food packages reflect those 
considerations.
    Proposed rule: Rounding up for infant food and infant cereal. A 
state agency would be allowed to round up to the next whole 
container of infant foods (i.e., infant cereal, fruits, vegetables 
and meats) if needed to provide at least the maximum authorized 
amount of these foods. The proposal requires calculating and 
dispersing the infant formula over the timeframe of the food package 
category and infant feeding option.
    Rationale and Benefits: This is consistent with the provision in 
Pub. L. 108-265 that allows states to round up to the next whole can 
of infant formula so that participants may receive the full 
authorized nutritional benefit. This proposal would require state 
agencies to issue at least the full nutritional benefit but not more 
than the maximum monthly allowance for the food package category and 
infant feeding option.

C. Summary of Key Provisions

    The expected impact of the proposed rules on the Federal 
Government, state and local WIC agencies, vendors, manufacturers, 
and program participants is summarized in Table 2. Overall economic 
effects are noted with a ``+$'' for cost increases, and a ``-$'' for 
cost savings. A more detailed examination of strictly economic 
effects follows Table 2.

                                       Table 2.--Summary of Key Provisions
----------------------------------------------------------------------------------------------------------------
                                                              Effect of proposed rule on
                                    ----------------------------------------------------------------------------
     Current and proposed rules                             State/local
                                     USDA/federal gov't       agencies       Vendors/industry   WIC participants
----------------------------------------------------------------------------------------------------------------
Current rule:

[[Page 44831]]

 
    1. Food Package I serves         Reduces cost of     Changes to         May increase the   Provides a food
     infants from birth through       infant food         current rules      sale of infant     package that
     three months. Formula is the     packages.           will require the   formula at the     conforms more
     only food prescribed under       Proposed packages   implementation     expense of juice   closely to the
     Package I.                       for four and five   of new state and   and infant         diet recommended
                                      month old infants   local              cereal.            by health
                                      (which reduce       administrative                        professionals
                                      calories            procedures.                           for four and
                                      slightly) are                                             five month old
                                      less expensive                                            infants.
                                      than current Food
                                      Package II.
    2. Infants from four through
     eleven months are eligible for
     juice and infant cereal, in
     addition to formula, under
     Package II. The maximum
     formula prescription in
     packages I and II are the
     same.
Proposed rule:
    1. Expand Food Package I to
     serve infants up to six
     months. Delay the introduction
     of complementary foods by two
     months.
    2. Increase formula
     prescriptions at four months
     to offset lost food energy.
 
                 -$
 
Current rule:
    Under Food Package I, an infant  May slightly        State and local    Negligible effect  Encourages
     can receive up to the maximum    reduce the costs    agencies must      on the sale of     breastfeeding.
     for the package. Since the       of providing        develop new        infant formula     Additional
     rule does not separate           infant formula to   guidelines to      for newborn        support provided
     partially and fully formula      mothers during      implement and      infants. But,      to new mothers
     fed infants, a single package    their infants'      communicate this   the rule           by WIC staff may
     maximum applies to all           first month.        policy.            provides an        successfully
     partially and fully formula-     However, a                             incentive to       increase
     fed infants from birth through   sustained                              breastfeed,        breastfeeding
     three months.                    increase in                            which may          rates. This is
                                      breastfeeding                          ultimately         consistent with
                                      during an                              reduce formula     the
                                      infant's first                         sales beyond the   recommendations
                                      year will affect                       infants' first     of nutrition
                                      the food package                       month. But, the    experts.
                                      eligibility of                         rule may           However, it is
                                      both the mother                        slightly           uncertain
                                      and the infant.                        increase infant    whether this
                                      Although the                           food sales to      will have a
                                      economic effect                        fully breastfed    significant
                                      of such a                              WIC infants 6      impact on the
                                      sustained                              months of age      number of WIC
                                      increase is                            and older, and     women who
                                      dependent on both                      may increase the   breastfeed.
                                      breastfeeding                          sale of other
                                      duration and on                        WIC foods to
                                      the relative                           breastfeeding
                                      rates of partial                       mothers.
                                      and exclusive
                                      breastfeeding,
                                      the net economic
                                      effect is likely
                                      to be a reduction
                                      in cost.
Proposed rule:
    Provide no infant formula to
     mothers who breastfeed during
     the infant's first month.
 
                 -$
 
Current rule:

[[Page 44832]]

 
    The current infant food          If the proposed     State and local    Negligible effect  Encourages
     packages do not distinguish      rule has no         agencies must      in the absence     breastfeeding
     between fully and partially      effect on the       conform to a new   of changes in      consistent with
     formula-fed infants. Infants     initiation and      definition of      breastfeeding      the best advice
     receive infant formula based     duration of         breastfeeding      behavior.          of nutrition
     on an assessment of their        breastfeeding,      for WIC food       Increased          science. Will
     supplemental nutritional         the cost of         package            breastfeeding      reduce the WIC
     needs, subject to a single       providing food      purposes. Will     would reduce       benefit received
     package maximum.Food Package V   packages to women   also encourage     formula sales      by women who do
     is provided to pregnant women    will drop; the      changes in the     but might          not fully
     and to all new mothers, up to    cost of providing   approach to        modestly           breastfeed.
     one year postpartum, if they     infant formula      nutrition          increase the
     breastfeed at least once per     will remain         education;         sale of infant
     day.                             unchanged. If       places greater     food fruits,
                                      breastfeeding       emphasis on        vegetables and
                                      increases enough    breastfeeding      meat to WIC's
                                      to keep an infant   promotion.         fully breastfed
                                      classified as       Implementing new   population.
                                      partially           procedures will
                                      breastfed who       initially
                                      would have been     increase
                                      classified as       administrative
                                      fully formula fed   burden.
                                      otherwise, then
                                      formula costs are
                                      reduced and there
                                      is no change in
                                      the mother's
                                      status. Both
                                      result in cost
                                      reductions.
Proposed rule:
    Infants and mothers will be
     assigned food packages based
     on the mother's reported
     breastfeeding practice. The
     corresponding amount of
     formula prescribed will
     distinguish infants between
     partially breastfed and fully
     formula-fed. The rule would
     provide a full formula-feeding
     package to some infants
     currently considered partially
     breastfed; it would move some
     mothers from Package V to
     Package VI, or to no package
     at all, depending on the
     amount of formula requested.
 
                 -$
 
Current rule:
    Currently, the definition of     The net effect of   State agencies     Negligible effect  Encourages more
     breastfeeding in WIC             this change is      will be provided   because the few    intensive
     regulations allows women who     minimal. These      NSA funds for a    women who once     breastfeeding
     breastfeed once a day to be      women will be       very small         received           for WIC women.
     eligible for the WIC program     included in         number of women    supplemental
     and receive supplemental         participation       who are            foods will no
     foods.                           numbers and State   receiving WIC      longer be
                                      agencies will be    benefits           eligible for
                                      provided NSA        (nutrition         these foods.
                                      funds, but there    education/
                                      are very few of     breastfeeding
                                      them and they       support and
                                      will not be         referrals to
                                      receiving food.     health and
                                                          social
                                                          services), but
                                                          not receiving
                                                          supplemental
                                                          foods.
Proposed rule:
    Revise the definition for WIC
     participation to include the
     number of breastfeeding women
     who receive no supplemental
     foods or food instruments but
     whose breastfed infant(s)
     receives supplemental foods or
     food instruments.
 
                 -$
 
Current rule:

[[Page 44833]]

 
    Infants from 4-11 months are     The net effect of   Implementing new   May increase       Restructures the
     eligible for Food Package II.    these changes       procedures, such   sales of infant    infant package
     That food package includes       increases the       as setting state   food and           according to the
     juice and infant cereal, as      cost of Food        policy on          decrease sales     recommendations
     well as formula.                 Package II.         allowed            of juice and       of current
                                                          varieties of       formula if         nutrition
                                                          infant food,       participants       science.
                                                          will increase      were not already   Encourages good
                                                          short-term         using the          infant feeding
                                                          administrative     quantities         practices.
                                                          burden.            proposed in the    Encourages
                                                                             rule. Some         consumption of
                                                                             vendors may need   fruits and
                                                                             to stock           vegetables.
                                                                             additional
                                                                             infant food
                                                                             varieties that
                                                                             meet the
                                                                             specific
                                                                             specifications
                                                                             set by the
                                                                             states. Vendors
                                                                             will need to
                                                                             train personnel
                                                                             to identify the
                                                                             newly WIC-
                                                                             eligible infant
                                                                             foods.
Proposed rule:
    The following changes are made
     to Food Package II:
        1. Change age eligibility
         to 6-11 months.
        2. Eliminate juice.
        3. Add infant food fruits
         and vegetables.
        4. Reduce maximum formula
         amount.
 
                 +$
 
Current rule:
    All infants are eligible for     The cost of the     Implementing new   Increase in sales  Provides added
     the same amounts of formula,     fully breastfed     procedures, such   of infant food     iron and zinc to
     juice, and infant cereal under   package for         as setting state   meat is likely     the diet of
     Food Package II.                 infants age six     rules on           to be              fully breastfed
                                      months and older    permissible        negligible. The    infants age six
                                      is increased        varieties of       number of fully    months and
                                      significantly.      infant food        breastfed WIC      older. Also
                                                          meat, will         infants age six    encourages
                                                          increase short-    months and over    breastfeeding.
                                                          term               is small.          Both are
                                                          administrative     Vendors will       consistent with
                                                          burden.            need to train      the
                                                                             personnel to       recommendations
                                                                             identify the       of current
                                                                             newly WIC-         nutrition
                                                                             eligible infant    science.
                                                                             foods.
Proposed rule:
    Provide relatively more infant
     food fruit and vegetables to
     fully breastfed infants at six
     months than to partially
     breastfed or fully formula-fed
     infants. Also provide infant
     food meat to this group.
 
                 +$
 
Current rule:
    1. Low iron infant formula may   These changes are   The states will    Sales of low iron  Disallowing the
     be prescribed with medical       expected to have    incur minimal      formula and        prescription of
     documentation.                   little effect on    short-term         certain infant     low iron formula
                                      the foods           administrative     cereal varieties   is supported by
                                      actually            burden as they     will be reduced    medical
                                      prescribed to WIC   implement these    slightly, if at    research.
                                      infants. The        minor rule         all, by these      Disallowing
                                      infant cereal       changes.           rules.             infant cereal
                                      rule simply                                               with added
                                      formalizes what                                           ingredients is
                                      has been federal                                          consistent with
                                      policy since                                              current, though
                                      1980.                                                     not formalized,
                                                                                                federal policy.
                                                                                                There should be
                                                                                                little if any
                                                                                                change in what
                                                                                                participants can
                                                                                                purchase.
    2. Infant cereal must be iron-
     fortified; WIC regulations
     contain no other
     specifications.

[[Page 44834]]

 
Proposed rule:
    1. Disallow the prescription of
     low iron infant formula.
    2. Disallow the prescription of
     infant cereal with added
     ingredients.
 
     (minimal economic effect)
 
Current rule:
    Children and women with special  The rule is         The rule is        No impact.         No direct impact.
     dietary needs are prescribed     intended to         intended to                           Improved service
     WIC-eligible medical foods       reduce              facilitate                            at the state and
     under Food Package III.          administrative      program                               local level may
     Infants with special dietary     costs and           management. It                        result, to the
     needs are provided exempt        facilitate          may also allow                        benefit of WIC
     infant formula under Food        program             improved service                      participants.
     Packages I or II.                management.         to WIC
                                                          beneficiaries.
Proposed rule:
    Serve infants with special
     dietary needs who receive
     exempt infant formulas under
     Food Package III.
 
                 -$
 
Current rule:
    Current practice allows some     Clarifies who is    The rule may       Possible minimal   Some current
     women and children with          eligible for Food   reduce             reduction in the   participants
     certain dietary restrictions,    Package III and     administrative     sale of medical    receiving
     but without serious medical      what foods may be   burden by          foods due to       Package III may
     conditions, to be prescribed     distributed as      eliminating        eligibility        be served under
     medical foods under Food         part of that        Package III        requirements.      food packages
     Package III.                     package. These      eligibility                           more appropriate
                                      clarifications      issues. But, it                       to their needs.
                                      are generally       may require
                                      aimed at            state efforts to
                                      tightening these    develop
                                      criteria. Will,     educational
                                      if anything,        materials for
                                      reduce Package      local WIC
                                      III costs by        officials, WIC
                                      moving some         participants,
                                      participants to     and health care
                                      food packages       professionals on
                                      more appropriate    the eligibility
                                      for their needs.    criteria. Will
                                      But, given the      require local
                                      size of the         agencies to
                                      current Package     assist WIC-
                                      III population      eligible
                                      (roughly 1% of      individuals in
                                      all WIC             obtaining the
                                      participants)       necessary
                                      these savings       medical
                                      will be small.      documentation
                                                          for Package III.
Proposed rule:
    Clarify language governing the
     purpose and scope of Package
     III eligibility.
 
                 -$
 
Current rule:
    Package III recipients are       This rule will      Administrative     May have a small   For those Package
     prescribed medical foods only;   increase costs in   burden of          positive effect    III recipients
     they do not receive any of the   those cases where   implementing the   on the sale of     able to consume
     standard food package foods.     Food Package III    new rule will be   some secondary     at least some
                                      recipients are      incurred in the    WIC foods. Will    non-Package III
                                      able to consume     short run.         not affect sales   WIC foods, this
                                      the foods                              of infant          rule will
                                      contained in the                       formula.           provide them
                                      regular WIC food                                          with additional
                                      packages to which                                         food.
                                      they would
                                      otherwise be
                                      eligible. But,
                                      the Package III
                                      population is
                                      small. The costs
                                      will be modest.
Proposed rule:
    Make other WIC foods available
     to Package III recipients.
 
                 +$
 
Current rule:

[[Page 44835]]

 
    Food Packages IV through VII     The net effect of   The states will    The rule may       WIC participants
     provide WIC beneficiaries with   this provision      need to            result in          with lactose
     24 to 28 quarts of milk per      will be a           establish new      reduced milk and   maldigestion may
     month. Cheese may be             reduction in        specifications     cheese sales to    benefit most by
     substituted for milk at a rate   overall cost, due   and restrictions   WIC                the addition of
     of one pound per three quarts;   to the reduction    for the new milk   participants. It   these new
     cheese may replace a total of    in quantities       substitutes.       may lead to        substitutes.
     12 quarts of milk.               allowed and         They will also     increased sales    Others with
                                      reduced             incur              of tofu and soy    individual or
                                      substitution        administrative     beverage.          cultural
                                      amounts.            burden in          Vendors may need   preferences will
                                                          implementing       to stock new       also benefit by
                                                          changes to         items that match   the added
                                                          reflect reduced    the specific       choices. All WIC
                                                          milk               product            participants
                                                          prescription       requirements set   will benefit
                                                          maximums and       by the states.     from a package
                                                          substitution       Rule proposes      lower in
                                                          limits.            nutritional        saturated and
                                                                             standards for      total fat,
                                                                             soy milk that      consistent with
                                                                             are currently      the
                                                                             not met by many    recommendations
                                                                             products on the    of current
                                                                             market. Because    nutrition
                                                                             these standards    science.
                                                                             will also apply
                                                                             to the school
                                                                             meals programs,
                                                                             vendors are
                                                                             likely to change
                                                                             fortification so
                                                                             that the variety
                                                                             of available soy
                                                                             beverages that
                                                                             can be
                                                                             authorized
                                                                             improves over
                                                                             time.
Proposed rule:
    Reduce maximum milk
     prescription amounts to WIC
     children and women. Add new
     milk substitution options
     (tofu, cheese and soy
     beverage), but reduce the
     maximum amount of cheese
     substitution allowed.
 
                 -$
 
Current rule:
    Juice may be prescribed under    The fixed dollar    States will need   Juice sales to     The addition of
     Food Packages IV through VII     values of the       to authorize and   WIC participants   fruits and
     at maximum levels that range     proposed fruit      develop a          may decline.       vegetables to
     from 192 to 336 fl. oz. per      and vegetable       structure to       Sales of fruits    the WIC food
     month.                           vouchers are        distribute and     and vegetables     packages
                                      greater than the    redeem for fruit   may increase.      responds to the
                                      offsetting          and vegetable      Costs will be      recommendations
                                      savings that will   vouchers, which    incurred by        of nutrition
                                      be realized         will be a new      vendors as they    science. And the
                                      through reduced     component of the   learn to           flexibility of a
                                      juice amounts.      programs. This     accommodate the    voucher will
                                                          administrative     new WIC            provide access
                                                          burden will be     vouchers. Some     to a variety of
                                                          on-going but       WIC authorized     fruits and
                                                          part of the        vendors may need   vegetables, in
                                                          current banking    to add fruits      some form, year
                                                          and MIS systems.   and vegetables     round, in all
                                                          State and local    to their stocks    markets.
                                                          agencies will      in fresh,
                                                          incur              frozen, or
                                                          administrative     canned form.
                                                          burden in          Emphasis on
                                                          developing         fresh fruits and
                                                          educational        vegetables may
                                                          messages for WIC   encourage states
                                                          participants       to authorize and
                                                          concerning the     participants to
                                                          selection of       shop at farmers
                                                          nutritious         markets more
                                                          fruits and         often. (See
                                                          vegetables.        Market Analysis
                                                                             discussion on
                                                                             page 57).
Proposed rule:

[[Page 44836]]

 
    Reduce maximum juice
     prescription amounts in food
     packages for children and
     women. Add a voucher for
     fruits and vegetables to those
     packages.
 
                 +$
 
Current rule:
    Eggs are provided under Food     Reducing the        State and local    Market effects     This proposal
     Packages IV through VII.         maximum egg         administrative     will be minimal.   reduces both the
     States may set their monthly     prescription will   burden will be                        food energy and
     maximums at either 2 or 2\1/2\   produce a modest    incurred in the                       fat content of
     dozen per month.                 reduction in food   short term as                         the WIC food
                                      package costs.      new procedures                        packages. The
                                      That reduction is   are put in                            changes are
                                      used to help        place.                                consistent with
                                      offset costs of                                           the advice of
                                      new foods and                                             current
                                      substitution                                              nutrition
                                      options.                                                  science. The
                                                                                                reduction in
                                                                                                food energy also
                                                                                                makes room for
                                                                                                the introduction
                                                                                                of new foods
                                                                                                that address
                                                                                                priority
                                                                                                nutrient needs.
Proposed rule:
    1. Reduce maximum egg
     prescription in all food
     packages for women and
     children.
 
                 -$
 
Current rule:
    There are no restrictions on     Prescribing only    State and local    Market effects     This proposal
     the fat content allowed in       fat reduced milk    administrative     will be minimal.   reduces fat
     milk.                            to women and        burden will be     Vendors will       content of the
                                      children age two    incurred in the    need to train      WIC food
                                      and older will      short term as      personnel to       packages. The
                                      have a negligible   new procedures     identify the       change is
                                      effect on cost.     are put in         newly WIC-         consistent with
                                                          place.             eligible foods.    the advice of
                                                                                                current
                                                                                                nutrition
                                                                                                science.
Proposed rule:
    1. Provide only fat reduced
     milk to women as well as
     children age two and older.
    2. Provide only whole milk to
     children one year of age.
 
                 -$
 
Current rule:
    Grains are included in the       The addition of     State and local    Manufacturers may  The addition of
     current food packages for        whole grain bread   agencies will      respond by         whole grains to
     women and children in the form   to Packages IV,     incur              reformulating      the WIC packages
     of breakfast cereal. Current     V, and VII          administrative     popular WIC-       is consistent
     regulations do not specify a     increases the       burden to          approved cereals   with 2005
     minimum whole grain content      cost of those       implement the      in whole grain     Dietary
     for that product.                packages. The       new rules.         form rather than   Guidelines for
                                      whole grain         States will        forfeiting the     Americans that
                                      requirement for     incur              WIC market.        encourage
                                      the existing        administrative     Smaller vendors    increased
                                      cereal component    burden in          may need to        consumption of
                                      of all food         establishing       modify stocks to   these foods.
                                      packages for        specifications     include whole
                                      children and        and restrictions   grain bread and
                                      women will have,    for the new        cereal
                                      at most, a minor    foods and          varieties. All
                                      effect on cost.     substitution       vendors will
                                                          options and        need to train
                                                          local clinics      personnel to
                                                          will incur         readily identify
                                                          additional         WIC-eligible
                                                          administrative     breads and
                                                          burden to          grains.
                                                          explain food
                                                          options to
                                                          participants.
Proposed rule:
    1. Add whole grain bread to
     Food Packages IV, V, and VII.
     Allow substitutions of other
     whole grain foods for bread.
    2. Require that breakfast
     cereal for children and women
     meet FDA standards for
     classification as whole grain
     food.
 

[[Page 44837]]

 
                 +$
 
Current rule:
    Dry beans are included in Food   At the proposed     The proposed       Market effects     By adding variety
     Packages IV, V, and VII.         rate of             option will        will be minimal.   and convenience,
     Canned beans may be              substitution        prompt states to   But, as with the   the canned bean
     prescribed, instead of dry, to   between canned      set                addition of any    option should
     WIC participants who lack        and dry beans,      specifications     WIC substitution   increase the
     cooking facilities.              the new option      and                option, small      appeal of that
                                      will increase       restrictions.      vendors may need   food. It may
                                      costs. However,     Other short-term   to add new items   also encourage
                                      the cost of beans   administrative     to their stocks,   greater
                                      in the food         burden will be     and all vendors    consumption,
                                      packages is         incurred as the    will need to       replacing less
                                      relatively small    new rule is put    train personnel    healthy foods in
                                      and this change     in place.          to identify the    the diets of WIC
                                      will have a                            newly-eligible     participants.
                                      relatively modest                      WIC foods.
                                      effect on overall
                                      program cost.
Proposed rule:
    1. Allow canned beans as a
     substitute for dry in all food
     packages for children and
     women.
    2. Allow both Package V and
     Package VII recipients to
     replace both their dry bean
     and peanut butter allocations
     with canned beans.
 
                 +$
 
Current rule:
    Beans and peanut butter are not  The costs of food   Neither of these   Minimal market     These changes
     included in Food Package VI.     packages V and VI   changes            impact.            supplement the
     Package V currently provides a   are increased.      introduce foods                       diets of
     pound of dry beans; those can                        not already                           breastfeeding
     be replaced with 18 oz of                            included in                           and postpartum
     peanut butter.                                       other WIC                             women with
                                                          packages. The                         several of the
                                                          administrative                        priority
                                                          burden should be                      nutrients
                                                          minimal.                              identified by
                                                                                                the IOM.
Proposed rule:
    1. Add one pound of beans, with
     an 18 oz peanut butter
     substitution option, to Food
     Package VI.
    2. Increase the amount of beans
     and peanut butter allowed
     under Food Package V; allow
     the prescription of both one
     pound of beans and 18 oz of
     peanut butter.
 
                 +$
 
Current rule:
    26 oz of tuna is made available  Costs will          States and local   Minimal market     These changes add
     to exclusively breastfeeding     increase            agencies will      impact. But, may   new choices that
     women in Food Package VII.       slightly. While     incur              force small        may encourage
     White, light, or dark tuna,      the new             administrative     vendors to stock   consumption. The
     packed in water or oil, is       substitution        burden in          additional types   rule also
     allowed.                         option may          implementation.    of canned fish     responds to
                                      increase the cost   State agencies     and will require   medical advice
                                      of individual       will adopt         all vendors to     that
                                      prescriptions,      specifications     train personnel    breastfeeding
                                      the number of WIC   and restrictions   to identify        women avoid fish
                                      participants        for the new        newly-eligible     species that are
                                      eligible for Food   substitution       WIC foods.         high in mercury.
                                      Package VII is      option.
                                      very small.
Proposed rule:
    Authorize a variety of canned
     fish that do not pose a
     mercury hazard to fully
     breastfeeding women. Slightly
     increase the maximum amount
     allowed to 30 ounces.
 
                 +$
 
Current rule:

[[Page 44838]]

 
    State WIC agencies impose        This simply         The states are     If states adopt    WIC participants
     restrictions on some foods by    clarifies what is   given formal       restrictions on    may need to
     brand or variety in order to     already accepted    approval for       the brands or      switch brands or
     limit cost or ensure statewide   policy. The         current            varieties of       varieties of
     product availability. The        policy is an        practice. The      foods newly        foods that they
     practice is accepted but not     effective way to    states should      added to the WIC   currently
     formally authorized by           control costs.      incur little or    food packages,     consume to
     regulation.                      Since the rule      no                 then               brands and
                                      represents no       administrative     participants who   varieties
                                      change from         burden in          already purchase   consistent with
                                      current practice,   implementation.    those foods may    those added to
                                      it results in no                       switch their       the WIC
                                      economic impact.                       selection of       packages.
                                                                             brands or
                                                                             varieties to the
                                                                             WIC-approved
                                                                             choices. A
                                                                             measurable shift
                                                                             in consumption
                                                                             by brand or
                                                                             variety may
                                                                             result.
Proposed rule:
    Clarifies the right of states
     to restrict WIC foods by
     variety or brand.
 
     (minimal economic impact)
 
Current rule:
    States are permitted to          Assures more        The rule reduces   Minimal effect on  Assures more
     prescribe foods to WIC           consistent WIC      the level of       vendors and        consistent WIC
     participants in quantities       benefits are        work currently     producers.         benefits are
     that are less than the package   delivered across    undertaken by                         delivered across
     maximums when nutritionally      states.             state officials.                      states. IOM has
     warranted. The states may also                       Administrative                        based food
     standardize these reductions                         burden will                           prescription
     and apply the reduced amounts                        decrease to the                       quantities on
     consistently to like groups of                       extent that                           current
     WIC participants. Such                               states will not                       nutritional
     categorical food package                             undertake their                       science
     tailoring may be done for                            own review of                         rendering food
     nutritional reasons, but not                         WIC prescription                      package
     to achieve cost reductions.                          maximums in                           tailoring
                                                          response to the                       unnecessary.
                                                          federal
                                                          revisions to the
                                                          WIC food
                                                          packages. In the
                                                          absence of this
                                                          rule, the states
                                                          may have
                                                          incurred
                                                          administrative
                                                          burden.
Proposed rule:
    Ends the practice of             ..................  .................  .................  .................
     categorical tailoring of WIC
     food packages by the states.
Proposed rule:
    Allow state agencies to round    Minimal cost given  States may incur   Unless             Will ensure WIC
     up to the next whole container   the small           some               manufacturers      participants get
     of infant foods if needed to     container sizes     administrative     change container   the full
     provide the maximum authorized   involved.           burden to          sizes to achieve   nutritional
     amount of these foods.           Rounding up is      implement,         greater product    benefit
                                      likely to require   particularly if    sales, no impact   authorized.
                                      the addition of     manufacturers      is expected.
                                      little jarred       change container
                                      infant food to      sizes in
                                      the food            response to this
                                      packages;           rule.
                                      containers are
                                      typically just 4
                                      oz. The current
                                      infant cereal
                                      maximum of 24 oz
                                      is a multiple of
                                      a commonly
                                      prescribed
                                      package size; 8
                                      oz boxes are
                                      among the
                                      standard package
                                      sizes.
Proposed rule:

[[Page 44839]]

 
    End state practice of            Will reduce         Because of the     Minimal since      Minimal since
     requesting additional package    administrative      proposed rule's    very few food      very few food
     substitutions. A process is      costs of            flexibility in     package            package
     currently in place to accept     considering         food offerings,    substitutions      substitutions
     and evaluate requests by state   proposals but       states will no     have ever been     have ever been
     WIC agencies to add new foods    little affect on    longer have as     permitted.         permitted.
     to the program's list of         program costs       much, if any,
     allowed substitutes.             since very few      need to request
                                      package             substitutions to
                                      substitutions       meet cultural
                                      have ever been      preferences.
                                      approved.           Administrative
                                                          savings will
                                                          accrue for those
                                                          states that
                                                          would have
                                                          pursued
                                                          substitutions in
                                                          the absence of
                                                          this rule.
----------------------------------------------------------------------------------------------------------------

D. Costs

1. Proposed Rule

    Under the proposed rule, FNS estimates that the revisions to the 
WIC food packages will be cost-neutral. Specifically, FNS estimates 
that the changes will result in a cost savings of $34 million 
dollars over five years.
    The economic effects of the proposed rule on the federal 
government over a five-year period are summarized in Table 3, which 
presents the impacts of the revisions by food package type. These 
figures are limited to food costs; no additional funds will be 
provided to states or local clinics to implement this rule. The 
costs have been adjusted for the rule's phased-implementation 
schedule. Current and proposed food package costs are provided in 
Tables A1-A3 in the appendix.

                             Table 3.--Projected Cost of WIC Food Package Revisions
                                                  [In millions]
----------------------------------------------------------------------------------------------------------------
                                                                                                      FY 2007-FY
           Food package               FY 2007      FY 2008      FY 2009      FY 2010      FY 2011        2011
----------------------------------------------------------------------------------------------------------------
I.................................       -$15.1       -$31.6       -$33.2       -$34.7       -$36.3      -$150.9
II................................         34.7         91.3         96.3        100.8        105.4        428.5
III...............................          8.1         18.6         19.6         20.5         21.5         88.3
IV................................        -47.9       -115.1       -128.0       -140.7       -154.3       -586.0
V.................................         15.7         32.9         32.0         30.8         43.8        155.3
VI................................          2.5          4.5          3.4          2.1          8.1         20.6
VII...............................          1.1          2.1          1.9          1.7          3.1         10.0
                                   -----------------------------------------------------------------------------
    Total.........................         -0.8          2.7         -7.9        -19.5         -8.7        -34.2
----------------------------------------------------------------------------------------------------------------
Negative values are cost reductions.

    Table 4 shows the major cost drivers for each food package; 
provisions listed do not reflect total food costs and savings. Total 
costs are for FY07-FY11 and have not been adjusted for the rule's 
phased implementation.

            Table 4.--Major Cost Drivers of WIC Food Packages
------------------------------------------------------------------------
           Food package                      Major cost drivers
------------------------------------------------------------------------
I.................................  <bullet> Formula is reduced for
                                     partially breastfed infants and
                                     eliminated for fully breastfed
                                     infants (-$367 million post
                                     rebate).
II................................  <bullet> Infants fruits, vegetables
                                     and meats is added for fully
                                     breastfed infants( + $1,033
                                     million).
                                    <bullet> Formula is reduced for
                                     fully formula and partially
                                     breastfed infants and is eliminated
                                     for fully breastfed infants (-$128
                                     million post rebate).
                                    <bullet> Juice is eliminated for all
                                     infants (-$164 million).
III...............................  Package III recipients are eligible
                                     for foods in the other packages.
                                     Package III costs mirror the costs
                                     and savings reflected in other
                                     packages.
IV................................  <bullet> $6 cash-value instruments
                                     for fruits and vegetables is added
                                     (+ $1,372 million).
                                    <bullet> Milk is reduced (-$956
                                     million).
                                    <bullet> Juice is reduced (-$948
                                     million).
                                    <bullet> Whole grains added ( + $639
                                     million).
                                    <bullet> Cheese is reduced (-$638
                                     million).
                                    <bullet> Eggs are reduced (-$290
                                     million).
                                    <bullet> Beans added (+ $130
                                     million).

[[Page 44840]]

 
V.................................  <bullet> $8 cash-value instruments
                                     for fruits and vegetables is added
                                     (+$556 million).
                                    <bullet> Juice is reduced (-$333
                                     million).
                                    <bullet> Cheese is reduced (-$268
                                     million).
                                    <bullet> Milk is reduced (-$236
                                     million).
                                    <bullet> Beans (+ $107 million).
                                    <bullet> Eggs are reduced (-$102
                                     million).
VI................................  <bullet> $8 cash-value instruments
                                     for fruits and vegetables is added
                                     (+$282 million).
                                    <bullet> Milk is reduced (-$162
                                     million).
                                    <bullet> Juice is reduced (-$122
                                     million).
                                    <bullet> Cheese is reduced (-$109
                                     million).
VII...............................  <bullet> Juice is reduced (-$53
                                     million).
                                    <bullet> $8 cash-value instruments
                                     for fruits and vegetables is added
                                     (+ $47 million).
                                    <bullet> Milk is reduced (-$31
                                     million).
------------------------------------------------------------------------
Negative values (-) are cost reductions, positive values (+) are cost
  increases.

2. Fruit and Vegetable Option

    Due to the seasonal fluctuation in price and availability of 
fresh fruits and vegetables, and the inability to purchase them in 
uniform weight units, it is difficult to set quantity terms for 
fruits and vegetables and still estimate the cost of the WIC food 
packages. In order to accurately capture the cost of providing fresh 
fruits and vegetables in WIC Food Packages III-VII, the proposed 
rule includes fruit and vegetable vouchers. Due to the 
administrative ease of implementation, the IOM recommended cash-
value instruments be issued.\40\ The IOM also recommended that 
states provide fruit and vegetable vouchers at the level of $10 per 
month for women and $8 per month for children. However, to achieve 
cost neutrality with the proposed changes, FNS set the vouchers at 
the level of $8 per month for women and $6 per month for children in 
the year in which the proposed food package revisions take effect. 
The maximum amount of the vouchers would be adjusted to reflect 
inflation in whole dollar increments.
---------------------------------------------------------------------------

    \40\ 40 IOM, p. 172.
---------------------------------------------------------------------------

3. Cost Estimate Methodology

    a. Food costs. i. Prescriptions. The states report participant-
level food prescription data to FNS on a biennial basis. A 
statistical sample drawn from those state records was used in 
preparing this cost estimate. At the time of this analysis, the 2002 
prescription dataset was the most current available. The dataset 
records the April, 2002 prescription of WIC foods to each 
participant who received a package that month.\41\ FNS used the 2002 
prescription data to establish a baseline food cost and to estimate 
the costs of the proposed package revisions. Actual participant-
level prescriptions provide a useful starting point for this 
analysis. Data at the participant level captures the preferences and 
dietary restrictions of the current WIC population. Assuming little 
change in the distribution of the WIC population by life stage, food 
preference, or supplemental dietary need over the short term, the 
2002 prescription data offers the best opportunity for estimating 
likely prescription amounts under the revised food package rules. 
FNS will use later year data to project cost changes if it becomes 
available before the final rule. FNS developed a micro-simulation 
program to model participant-specific prescription amounts for each 
of the foods in the proposed packages other than infant formula. The 
following assumptions guided this analysis :\42\
---------------------------------------------------------------------------

    \41\ The Participant Characteristics, ``PC2002'', dataset 
contains prescription data from 49 states, PR, D.C., several U.S. 
territories, and separately administered Native American WIC 
agencies.
    \42\ The description that follows is a simplification of the 
process used to develop the estimated prescriptions.
---------------------------------------------------------------------------

    <bullet> For foods that are part of both the current WIC 
packages and the revised packages:
    <bullet> WIC participants currently prescribed none of that food 
will continue to be prescribed none.
    <bullet> If the participant's current prescription exceeds the 
proposed maximum for the item, then the participant will be 
prescribed the new maximum amount.
    <bullet> If the participant's current prescription is less than 
the proposed maximum, then the participant's prescription will 
remain unchanged.
    <bullet> For foods newly added to the WIC packages by the 
proposed rule:
    <bullet> Generally, prescription rates are set to observed rates 
for comparable foods already contained in the WIC packages.\43\
---------------------------------------------------------------------------

    \43\ Prescription rates for whole grain bread and bread 
substitutes are set to the observed prescription rates for cereal; 
the April 2002 Food Package IV cereal prescription rate was applied 
to Package IV bread prescriptions, the Package V cereal prescription 
rate was applied to Package V bread prescriptions, etc.
---------------------------------------------------------------------------

    <bullet> Foods newly added to the WIC packages as substitutes 
for standard WIC foods were prescribed to a subset of the WIC 
population equal to the percent of all low income U.S. households 
that currently purchase those items.\44\ For example, market 
consumption data indicates that about 3% of U.S. households with 
WIC-eligible incomes purchased tofu, so 3% of WIC participants are 
assumed to be prescribed tofu.\45\ Participants prescribed one of 
the new substitutes will be provided with the maximum allowed under 
the proposed rule given any other substitutions allowed.
---------------------------------------------------------------------------

    \44\ Market consumption data is based on 2003 AC Nielsen 
Homescan survey data.
    \45\ This method of identifying general consumer preferences for 
particular items cannot be used to estimate the share of the infant 
population that consumes fresh bananas. It is assumed, then, that 
infants will be prescribed bananas as a substitute for jarred infant 
food fruits and vegetables at the average prescription rate for all 
foods across all food packages.
---------------------------------------------------------------------------

    <bullet> Fruit and vegetable vouchers are assumed to be 
prescribed to all participants at the full amount.
    This methodology tends to produce prescription estimates that 
are at or near the maximum quantities allowed under the revised 
packages. (See Table 5.) That outcome is consistent with the 
proposed rule?s recommendation that participants be issued 
prescriptions at the package maximums. It is also consistent with 
the rule that would end categorical tailoring.
    ii. Infant Formula and Rounding. In this analysis, infant 
formula and infant foods were treated slightly differently than the 
other foods. Using a micro-simulation program with PC2002 data to 
model prescription amounts for infant formula and foods would not 
account for ``rounding up''. Rounding up refers to the ability of 
state agencies to round up to the next whole container to provide 
the maximum infant formula allowance. This option is only available 
for state agencies which renew its infant formula contract on or 
after October 1, 2004. The proposed rule extends this rounding 
option to infant foods (cereal, fruit and vegetables, and meat).
    Since the PC2002 data do not reflect the costs of states 
rounding up, the cost estimates of the current and proposed packages 
use a different approach to factor in the cost of states rounding 
up. Given current container sizes, rounding up is only required when 
issuing powder infant formula and infant fruit and vegetables. The 
maximum allowances for liquid concentrate infant formula, ready-to-
feed infant formula, infant cereal and infant meat are evenly 
divisible by whole containers. To capture the effect of rounding, 
the following assumptions have been made:
    <bullet> Current Food Packages I and II
    <bullet> Estimated prescription infant formula amounts for 
Packages I and II BF/FF (partially breastfed) and I and II BF 
(breastfed) do not incorporate rounding as the estimated amounts 
fall below the

[[Page 44841]]

maximum amounts. Estimated prescription amounts for Packages I and 
II FF (fully formula-fed) are set at the maximum amounts of 806 
reconstituted liquid ounces for liquid concentrate and ready to feed 
infant formulas; for powder infant formula the current 8 pound limit 
is used.
    <bullet> The reconstituted fluid ounces from powder infant 
formula is a weighted average of the powder container yield for the 
three infant formula brands with which state agencies have rebate 
contracts: Mead Johnson, Ross and Nestle (as determined by state 
agency contracts as of January 2006).
    <bullet> Total infant formula allowance for each package is 
weighted by the percentage of infants receiving each of the three 
forms (liquid concentrate, ready to feed, and powder) as distributed 
in the PC2002 data.
    <bullet> Proposed Food Packages I and II
    <bullet> Infant Formula:
    <bullet> All packages are set at the maximum monthly allowance 
for liquid concentrate, ready to feed and powder infant formulas as 
detailed in the proposed rule.
    <bullet> Powder infant formula is rounded to meet the maximum 
monthly reconstituted liquid concentrate allowance, but to not 
exceed the maximum monthly powder infant formula limit.
    <bullet> The reconstituted fluid ounces from powder infant 
formula is a weighted average of the powder container yield for the 
three formula brands with which state agencies have rebate 
contracts: Mead Johnson, Ross and Nestle (as determined by state 
agency contracts as of January 2006).
    <bullet> Proposed Food Package I BF/FF-A assumes 100 percent 
powder infant formula. This is consistent with IOM recommendations.
    <bullet> Total infant formula allowance for each package is 
weighted by the percentage of infants receiving each of the three 
forms (liquid concentrate, ready to feed, and powder) as distributed 
in the PC 2002 data.
    <bullet> Infant Foods:
    <bullet> Only Package II has infant foods. Container sizes are 
based on IOM assumptions: infant fruits and vegetables amounts are 
determined using Gerber container sizes weighted over the 6 month 
package period; current infant cereal containers (8 oz) and infant 
meat containers (2.5 oz) meet maximum monthly allowance without the 
need to round up.\46\
---------------------------------------------------------------------------

    \46\ The prescription rates for infant cereal, fruit and 
vegetables, and meat are set to the average prescription rate of 
juice across all of the women's food packages. Only infant fruit and 
vegetables were subject to rounding up due to the current container 
sizes; that factor is reflected in the estimated prescribed amount.
---------------------------------------------------------------------------

    <bullet> Bananas are allowed to be substituted for infant fruit 
at the rate of 2 pounds per 16 ounces of fruit. The proposed 
packages cost estimate assumes 1.8 pounds of bananas as 
substitution.
    The proposed rule requires state agencies to issue at least the 
full nutritional benefit of infant formula but not more than the 
maximum monthly allowance for the food package category and infant 
feeding option. However, rounding up to the whole container to meet 
the maximum monthly allowance provides more containers per month, 
which in turn results in higher costs. In addition, under both the 
current and proposed packages, the roundup provision is assumed to 
apply in all states at full implementation beginning in FY07. 
Therefore, this analysis provides the most conservative estimate of 
the additional cost due to rounding, as there is no way to 
accurately determine which states will elect to include a roundup 
provision in their infant formula rebate contract.
    iii. Redemption rates. Tables 5 and 6 show the maximum amount 
per food category and estimated average prescribed amounts used to 
calculate costs for the food packages under the proposed rule and 
under the current rule, respectively. Each table includes the 
individual food package component and its corresponding unit of 
measurement.
    WIC foods are provided by quantity, except for the fruit and 
vegetable voucher. As stated in the proposed rule, participants will 
be given a fruit and vegetable voucher with a fixed dollar value 
which can be used to purchase fruit and vegetables. Because the 
proposed fruit and vegetable voucher provides WIC benefits in a 
different form than is currently used, different redemption behavior 
is to be expected. Therefore, in developing a cost estimate for the 
rule, it is assumed that these vouchers will be redeemed at a rate 
of 87.5 percent, which is consistent with an evaluation of a WIC 
fruit and vegetable intervention in Los Angeles in 2004.\47\ Per 
participant, a redemption value of $5.25 for children and $7.00 for 
women was included in the cost of the respective food package.
---------------------------------------------------------------------------

    \47\ Herman, Dena and Harrison, Gail, ``Are Economic Incentives 
Useful for Improving Dietary Quality among WIC participants and 
their Families?'' ERS, USDA, 2004. DRAFT.
---------------------------------------------------------------------------

    All other WIC foods are assumed to be redeemed at a 100% rate. 
The assumption of 100% redemption rates for other WIC foods reflects 
research findings which indicate that redemption rates for current 
WIC foods are high and vary little by food item (ranging from 94-99 
percent).\48\ Variation in the quantity of foods purchased by 
participants is reflected in the prescription rates. Thus a 
simplifying assumption of 100 percent redemption rates was used for 
WIC food prescribed by quantity.
---------------------------------------------------------------------------

    \48\ Food and Nutrition Service, U.S. Department of Agriculture, 
``National Survey of WIC Participants'', October 2001.

                            Table 5.--Prescription Estimates Under Proposed Rule \49\
----------------------------------------------------------------------------------------------------------------
                                                                                                     Estimated
                                                                                  Maximum amount      average
                Food package                              Units \50\                 per food       prescribed
                                                                                     category         amount
----------------------------------------------------------------------------------------------------------------
                                     Infants: Food Package I
----------------------------------------------------------------------------------------------------------------
I-FF-A (0-3.9 mo):
    Formula (post-rebate)..................  reconstituted fluid oz.............          806             829.01
I-FF-A (partially breastfed, 0-.9 mo):
    Formula (post-rebate)..................  reconstituted fluid oz.............           96               0.00
I-FF-B (4-5.9 mo):
    Formula (post-rebate)..................  reconstituted fluid oz.............          884             917.10
I-BF/FF-A (1-3.9 mo):
    Formula (post-rebate)..................  reconstituted fluid oz.............          384             386.09
I-BF/FF-B (4-5.9 mo):
    Formula (post-rebate)..................  reconstituted fluid oz.............          442             461.57
I-BF-A (0-3.9 mo):
    Formula (post-rebate)..................  reconstituted fluid oz.............            0               0.00
I-BF-B (4-5.9 mo):
    Formula (post-rebate)..................  reconstituted fluid oz.............            0               0.00
----------------------------------------------------------------------------------------------------------------
                                    Infants: Food Package II
----------------------------------------------------------------------------------------------------------------
II-FF (6-11.9 mo):
    Formula (post-rebate)..................  reconstituted fluid oz.............          624             647.37
    Cereal.................................  oz.................................           24              20.10

[[Page 44842]]

 
    Baby fruits & vegetables...............  oz.................................          128             108.21
        Bananas............................  lb.................................  ..............            1.80
II-BF/FF (6-11.9 mo):
    Formula (post-rebate)..................  reconstituted fluid oz.............          312             344.04
    Cereal.................................  oz.................................           24              20.93
    Baby fruits & vegetables...............  oz.................................          128             108.21
        Bananas............................  lb.................................  ..............            1.80
II-BF (6-11.9 mo):
    Cereal.................................  oz.................................           24              22.27
    Baby fruits & vegetables...............  oz.................................          256             228.06
        Bananas............................  lb.................................  ..............            1.80
    Infant food meat.......................  oz.................................           77.5            73.06
----------------------------------------------------------------------------------------------------------------
                                    Children: Food Package IV
----------------------------------------------------------------------------------------------------------------
IV-A (1-1.9 yrs):
    Juice..................................  oz.................................          128             127.59
    Milk (whole)...........................  qt.................................           16              13.01
        Cheese.............................  lb.................................  ..............            0.96
    Cereal.................................  oz.................................           36              34.39
    Eggs...................................  oz.................................            1               1.00
    Whole grain bread......................  lb.................................            2               1.22
        Other grains.......................  lb.................................  ..............            0.69
    Beans, dried...........................  lb.................................            1               0.30
        Beans, canned......................  oz.................................  ..............           19.54
        Peanut butter......................  oz.................................  ..............            6.27
    Fruit and vegetable voucher \51\.......  voucher ($)........................            6.00            6.00
IV-B (2-4.9 yrs):
    Juice..................................  oz.................................          128             127.59
    Milk, fat-reduced......................  qt.................................           16              13.01
        Cheese.............................  lb.................................  ..............            0.96
    Cereal.................................  oz.................................           36              34.39
    Eggs...................................  doz................................            1               1.00
    Whole grain bread......................  lb.................................            2               1.22
        Other grains.......................  lb.................................  ..............            0.69
    Beans, dried...........................  lb.................................            1               0.30
        Beans, canned......................  oz.................................  ..............           19.54
        Peanut butter......................  oz.................................  ..............            6.27
    Fruit and vegetable voucher \51\.......  voucher ($)........................            6.00            6.00
----------------------------------------------------------------------------------------------------------------
                                      Women: Food Package V
----------------------------------------------------------------------------------------------------------------
V:
    Juice..................................  oz.................................          144             143.40
    Milk, fat-reduced......................  qt.................................           22              16.90
        Soy beverage.......................  qt.................................  ..............            1.66
        Tofu...............................  lb.................................  ..............            0.05
        Cheese.............................  lb.................................  ..............            0.97
    Cereal.................................  oz.................................           36              35.09
    Eggs...................................  doz................................            1               1.00
    Whole grain bread......................  lb.................................            1               0.63
        Other grains.......................  lb.................................  ..............            0.35
    Beans, dried...........................  lb.................................            1               0.56
        Beans, canned......................  oz.................................  ..............           36.06
    Peanut butter..........................  oz.................................           18              13.86
    Fruit and vegetable voucher \51\.......  voucher ($)........................            8.00            8.00
----------------------------------------------------------------------------------------------------------------
                                     Women: Food Package VI
----------------------------------------------------------------------------------------------------------------
VI:
    Juice..................................  oz.................................           96              95.54
    Milk, fat-reduced......................  qt.................................           16              11.68
        Soy beverage.......................  qt.................................  ..............            1.29
        Tofu...............................  lb.................................  ..............            0.02
        Cheese.............................  lb.................................  ..............            0.95
    Cereal.................................  oz.................................           36              34.70
    Eggs...................................  doz................................            1               0.95
    Beans, dried...........................  lb.................................            1               0.23
        Beans, canned......................  oz.................................  ..............           14.69
        Peanut butter......................  oz.................................  ..............            9.06

[[Page 44843]]

 
    Fruit and vegetable voucher \51\.......  voucher ($)........................            8.00            8.00
----------------------------------------------------------------------------------------------------------------
                                     Women: Food Package VII
----------------------------------------------------------------------------------------------------------------
VII:
    Juice..................................  oz.................................          144             143.64
    Milk, fat-reduced......................  qt.................................           24              17.51
        Soy beverage.......................  qt.................................  ..............            1.46
        Tofu...............................  lb.................................  ..............            0.01
        Cheese.............................  lb.................................  ..............            1.60
    Cheese.................................  lb.................................            1               1.00
    Cereal.................................  oz.................................           36              35.87
    Eggs...................................  doz................................            2               1.98
    Whole grain bread......................  lb.................................            1               0.63
        Other grains.......................  lb.................................  ..............            0.35
    Canned fish............................  oz.................................           30     ..............
        Tuna...............................  oz.................................  ..............           22.44
        Salmon.............................  oz.................................  ..............            6.11
    Beans, dried...........................  lb.................................            1               0.60
        Beans, canned......................  oz.................................  ..............           38.63
        Peanut butter......................  oz.................................           18              13.41
    Fruit and vegetable voucher \51\.......  voucher ($)........................            8.00            8.00
----------------------------------------------------------------------------------------------------------------


                           Table 6.--Prescription Estimates for Current Food Packages
----------------------------------------------------------------------------------------------------------------
                                                                                                     Estimated
                                                                                  Maximum amount      average
                Food package                             Units \52\                  per food       prescribed
                                                                                     category         amount
----------------------------------------------------------------------------------------------------------------
                                     Infants: Food Package I
----------------------------------------------------------------------------------------------------------------
I--Fully breast-fed:
    Formula................................  reconstituted fluid oz............            806             49.08
I--Partially breast-fed:
    Formula................................  reconstituted fluid oz............            806            479.75
I--Fully formula-fed:
    Formula................................  reconstituted fluid oz............            806            876.99
----------------------------------------------------------------------------------------------------------------
                                    Infants: Food Package II
----------------------------------------------------------------------------------------------------------------
II--Fully breast-fed 4-6 mo:
    Formula................................  reconstituted fluid oz............            806             42.17
    Juice..................................  oz................................             96             34.09
    Cereal.................................  oz................................             24             20.63
II--Partially breast-fed 4-6 mo:
    Formula................................  reconstituted fluid oz............            806            521.24
    Juice..................................  oz................................             96             53.80
    Cereal.................................  oz................................             24             16.60
II--Fully formula-fed 4-6 mo:
    Formula................................  reconstituted fluid oz............            806            876.99
    Juice..................................  oz................................             96             41.93
    Cereal.................................  oz................................             24             16.99
II--Fully breast-fed 7-12 mo:
    Formula................................  reconstituted fluid oz............            806             41.36
    Juice..................................  oz................................             96             81.15
    Cereal.................................  oz................................             24             22.28
II--Partially breast-fed 7-12 mo:
    Formula................................  reconstituted fluid oz............            806            596.89
    Juice..................................  oz................................             96             69.30
    Cereal.................................  oz................................             24             21.08
II--Fully formula-fed 7-12 mo:
    Formula................................  reconstituted fluid oz............            806            876.99
    Juice..................................  oz................................             96             76.42
    Cereal.................................  oz................................             24             20.27
----------------------------------------------------------------------------------------------------------------
                                    Children: Food Package IV
----------------------------------------------------------------------------------------------------------------
IV:

[[Page 44844]]

 
    Juice..................................  oz................................            288            232.77
    Milk...................................  qt................................             24             16.58
    Cheese.................................  lb................................  ...............            1.57
    Cereal.................................  oz................................             36             34.39
    Eggs...................................  doz...............................              2.5            1.83
    Beans, dried...........................  lb................................              1              0.61
    Peanut butter..........................  oz................................  ...............            6.27
----------------------------------------------------------------------------------------------------------------
                                        Women: Package V
----------------------------------------------------------------------------------------------------------------
V:
    Juice..................................  oz................................            288            267.83
    Milk...................................  qt................................             28             20.94
    Cheese.................................  lb................................  ...............            1.84
    Cereal.................................  oz................................             36             35.09
    Eggs...................................  doz...............................              2.5            1.99
    Beans, dried...........................  lb................................              1              0.55
    Peanut butter..........................  oz................................  ...............            7.29
----------------------------------------------------------------------------------------------------------------
                                        Women: Package VI
----------------------------------------------------------------------------------------------------------------
VI:
    Juice..................................  oz................................            192            185.54
    Milk...................................  qt................................             24             17.15
    Cheese.................................  lb................................  ...............            1.65
    Cereal.................................  oz................................             36             34.70
    Eggs...................................  doz...............................              2.5            1.78
----------------------------------------------------------------------------------------------------------------
                                       Women: Package VII
----------------------------------------------------------------------------------------------------------------
VII:
    Juice..................................  oz................................            336            319.32
    Milk...................................  qt................................             28             22.28
    Cheese as milk substitute..............  lb................................  ...............            1.65
    Cheese.................................  lb................................              1              1.00
    Cereal.................................  oz................................             36             35.87
    Eggs...................................  doz...............................              2.5            2.00
    Beans, dried...........................  lb................................              1              1.20
    Peanut butter..........................  oz................................             18             13.41
    Tuna...................................  oz................................             26             24.75
    Carrots................................  lb................................              2              1.99
----------------------------------------------------------------------------------------------------------------

    iv. Food prices. For each of the food items in the current or 
proposed packages, FNS estimated the average price paid by 
households with WIC-eligible incomes. These prices are based on 2003 
retail sales data collected by AC Nielsen.\53\ All prices are 
averages weighted by the relative purchase volumes of the selected 
product varieties.
---------------------------------------------------------------------------

    \49\ The only significant change to Food Package III in the 
proposed rule is the proposed addition of foods to these recipients' 
packages when their medical circumstances allow it. The PC2002 data 
set indicates that about 1 percent of WIC participants receive Food 
Package III. FNS assumes that half of them will be able to and will 
choose to receive all of the other foods available to them under the 
proposed rule. Therefore, we do not calculate prescription rates for 
Food Package III.
    \50\ Units are expressed in: Fluid ounces (fluid oz); ounces 
(oz); pounds (lb); quarts (qt); and, dozens (doz).
    \51\ Prescribed amount for fruit and vegetable vouchers is the 
redemption rate as discussed in 4a(iii) within this section.
    \52\ Units are expressed in fluid ounces (fluid oz), ounces 
(oz), pounds (lb), quarts (qt), and dozens (doz).
    \53\ FNS computed average prices for all food items other than 
infant formula from calendar year 2003 AC Nielsen Homescan data. A 
price for infant formula was estimated from FY 2004 Nielsen 
supermarket scanner data. Prices displayed below are inflated to FY 
2004 levels using Bureau of Labor statistics CPI estimates.
---------------------------------------------------------------------------

    Product descriptions captured by Nielsen sometimes lack the 
detail necessary to separate WIC-eligible items from non-eligible 
items. For this reason, the selection of products from the Nielsen 
datasets necessitates some compromise. The average prices computed 
by FNS and a brief description of FNS' product selection criteria 
are shown in Table 7.
    Food prices obtained from AC Nielsen Homescan data are inflated 
to FY 2004 levels with CPI estimates published by Bureau of Labor 
statistics.\54\ Food item or category specific inflation estimates 
were used, when available. For years after FY 2004, food costs are 
inflated by the Office of Management and Budget's June, 2005 Thrifty 
Food Plan (TFP) index except for the fruit and vegetable vouchers 
which are inflated by the USDA's agricultural baseline projections 
for retail fruit and vegetable prices. (See Tables B and C in the 
Appendix for more detail.)
---------------------------------------------------------------------------

    \54\ 2004 price data became available in 2006 after this 
analysis was completed.
---------------------------------------------------------------------------

    In each case, prices are computed only for products in container 
sizes consistent with current WIC regulations, typical state agency 
requirements, or the proposed rule. Products identified as organic 
were excluded; states typically disallow organic varieties for cost 
reasons. FNS also adjusted the WIC food prices for fiscal years 2005 
and 2006 to account for changes in the infant formula market (e.g., 
many State agencies are now prescribing infant formulas enhanced 
with DHA/ARA, which have tended to cost WIC more than non-enhanced 
infant formulas).

[[Page 44845]]



                 Table 7.--WIC Foods: Food Item, Selection Criteria, Units, and Prices Per Unit
----------------------------------------------------------------------------------------------------------------
                                                                                                  Price per unit
               Food item                     Retail sales database                Units            (inflated to
                                              selection criteria                                      FY 04)
----------------------------------------------------------------------------------------------------------------
Infant formula (post rebate):
    Powdered..........................  Standard and enhanced formula   oz......................          $0.026
                                         \55\ in powdered, liquid
                                         concentrate, and ready-to-
                                         feed forms.
    Weighted average of all forms.....  ..............................  oz......................           0.031
Infant cereal.........................  Dry grains without added fruit  oz......................           0.174
                                         or other flavors.
Infant food fruit and vegetables......  Any texture; plain fruits or    oz......................           0.115
                                         vegetables.
    Infant food meat..................  All plain meat varieties......  oz......................           0.319
    Bananas...........................  Fresh.........................  lb......................           0.436
Milk:
    Whole.............................  Fresh dairy milk only, \1/2\    qt......................           0.746
                                         gallon or gallon containers.
                                         Reduced fat includes skim
                                         milk and milk identified as
                                         2% or lower milkfat.
    Reduced fat.......................  ..............................  qt......................           0.675
Cheese................................  Processed American and          lb......................           3.557
                                         domestic natural cheddar,
                                         colby, mozzarella, brick,
                                         Monterey jack. Sliced or
                                         unsliced varieties.
Tofu..................................  Plain varieties...............  lb......................           1.689
Soy beverage..........................  Quart or larger sizes. Plain    qt......................           1.940
                                         varieties.
Juice.................................  Apple, grape, orange,           oz......................           0.031
                                         grapefruit, tomato.
                                         Unsweetened 100% juice.
Adult cereal:
    Whole grain.......................  Name brands (and their generic  oz......................           0.151
                                         versions) commonly prescribed
                                         by state WIC agencies.
    Current WIC cereals...............  Hot or ready-to-eat...........  oz......................           0.154
Eggs..................................  Large or medium, white. One     doz.....................           1.186
                                         doz containers only.
Beans:
    Dry...............................  Most varieties, excluding       lb......................           0.728
                                         string beans and immature
                                         peas. Not mixed with other
                                         foods.
    Canned............................  ..............................  oz......................           0.034
Peanut butter.........................  All forms and varieties. Not    oz......................           0.094
                                         mixed with jelly.
Whole grain bread.....................  Wheat or grain bread..........  lb......................           1.251
Brown rice............................  Instant or regular............  lb......................           1.239
Tuna..................................  Chunk light, canned...........  oz......................           0.090
Salmon................................  Canned........................  oz......................           0.102
Carrots...............................  Fresh, frozen, canned.........  lb......................           0.901
----------------------------------------------------------------------------------------------------------------

    v. Participant Projections. The estimated level of WIC 
participation through FY 2011 are those used in developing WIC 
program costs for the President's FY06 Midsession Budget. Those 
projections assume continued participant growth at the average rate 
observed over the past four years. Consistent with the IOM 
assumptions, we do not assume any changes in participation under the 
proposed rule due to potential participants finding the revised 
package more or less attractive. (For more detail on participation 
levels by food package see Tables D and E in the Appendix.)
---------------------------------------------------------------------------

    \55\ The term ``standard infant formula'' refers to both milk-
based and soy-based infant formulas, excluding specialized infant 
formula (i.e. formula for infants or children with special dietary 
needs). ``Enhanced formula'' are formulas that have been enhanced 
with two fatty acids, DHA and ARA.
---------------------------------------------------------------------------

    Many of the proposed package changes were intended to encourage 
breastfeeding. However, it is important to note that this analysis 
does not provide an estimate of the increase in the number infants 
or the additional length of time that infants will be breastfed. Due 
to the complex set of factors (demographic, clinical, etc.) that 
influence breastfeeding duration, we are unable to estimate the 
number of infants/mother pairs that will switch food packages as 
their feeding practices change. This is consistent with the analysis 
provided by IOM.
    The assumption of no change in breastfeeding patterns yield the 
most conservative cost estimate, as the net impact of increases in 
breastfed infants and breastfeeding women participants reduces the 
costs of this proposal. IOM conducted a sensitivity analysis by 
simulating possible shifts in participation rates. Shifting infant/
mother pairs from the fully formula-fed package to the breastfeeding 
packages has the effect of moving infant/mother pairs from the most 
expensive set of packages to less expensive ones. A constant shift 
of 30 percent for one to 11 months of age from partial to full 
breastfeeding and a smaller range of shifts from full formula 
feeding to full breastfeeding (with an appropriate shift in the 
mother's classification) decreased the average package cost by 
nearly two percent.\56\
---------------------------------------------------------------------------

    \56\ See IOM, p. 140.
---------------------------------------------------------------------------

    vi. Phased implementation. The analysis assumes the rule takes 
effect on November, 2006. State agencies would be required to issue 
food benefits based on either the new food packages or current food 
packages but could not combine the two. State agencies may also 
phase-in new food packages on a participant category basis.
    As shown in Table F in the Appendix, most of the rule's 
provisions are phased-in over the course of a year. The elimination 
of juice from the infant food packages, however, is phased-in six 
months from publication of the rule.
    The IOM recommended pilot testing or limited application of 
certain changes before full scale implementation. The limited 
application option was chosen because FNS does not have the 
authority to conduct pilots that waive current regulations. The 
rule's implementation plan addresses the IOM recommendation for 
testing of certain provisions while allowing State agencies 
sufficient time and broad flexibility to implement the majority of 
the food packages.
    Key provisions of the rule intended to promote breastfeeding 
will be implemented initially in no more than 32 local test sites in 
up to eight states. Those provisions will not be implemented 
nationwide until FNS has evaluated their effectiveness at the test 
sites. One such provision is that breastfed infants under one month 
old do not receive formula from the WIC Program. Another is the 
provision that conditions eligibility for Food Packages V and VI on 
the level of infant formula prescribed to the mother. However as 
noted, the breastfeeding promotion provisions of the rule cannot be 
estimated with confidence. Due to the indefinite

[[Page 44846]]

timeline for full implementation for the test sites ensure that the 
near term cost of the breastfeeding promotion provisions will be 
minimal, the key provisions in the rule intended to promote 
breastfeeding have been factored into this rule with the same phase-
in schedule as the other provisions.
    All phase-in effects are reflected in the cost estimates 
contained in Table 3. Juice prescriptions under the revised infant 
food packages will be reduced linearly from current levels to zero 
in the six months following the rule's effective date. Nationwide, 
the juice prescription over that six month period will average half 
the level that would have been forecast under existing WIC rules. 
Elimination of juice from the infant food packages would reduce 
program costs by $30.1 million in FY 2007 if the provision were made 
fully effective upon implementation of the rule. The six month 
phased elimination of juice will reduce those FY 2007 savings by an 
estimated $8.3 million.
    This analysis assumes that the remaining provisions of the rule 
will be phased-in over the course of the year that begins November, 
2006. It is assumed, as above, that states will implement the 
provisions of the rule throughout the phase-in period; the effective 
rate of implementation is assumed to average 50% over the year. \57\ 
The rule's phase-in schedule reduces these costs by half in FY 2007 
to $21.1 million. FY 2008 costs are reduced by an estimated $0.3 
million.
---------------------------------------------------------------------------

    \57\ If the phase-in rate increases linearly over the first 
year, the rule would not be fully effective until the second month 
of FY 2008. As a rough approximation, it is assumed that the 
effective rate of implementation throughout FY 2007 averages 50%, 
and that the effective rate of implementation in the first month of 
FY 2008 (the last month of the phase-in period) is 11/12.
---------------------------------------------------------------------------

    vii. State cost variation. This analysis is based on national 
average prescription and price data, which indicates that program-
wide, the proposed changes are cost neutral. States may vary 
somewhat in their implementation experiences, depending on how 
closely their prescription practices and prices correspond to the 
national averages. WIC funding rules help address these 
implementation issues. The food funding formula provides mechanisms 
for transferring funds from states which are not fully utilizing 
their grants to those with need for additional funding, and these 
mechanisms have been successfully used in the past to address 
variations in states' funding needs.
    b. Administrative costs. WIC state agencies receive an annual 
nutrition services and administration (NSA) grant to help pay the 
administrative costs of operating the WIC program. Each state 
agency's NSA grant is determined by a statutorily-defined formula 
that is adjusted annually for inflation and other factors. This rule 
does not propose any change to the NSA funding formula. FNS expects 
State and local agencies to implement this rule without receiving 
NSA funds beyond what they would have received in the absence of 
this rule. However, we believe that the administrative burden 
associated with implementing this rule can be absorbed within 
current funding constraints.
    As part of its analysis, IOM held open sessions to solicit State 
and local agencies, practitioners and experts for comment on the 
current and proposed packages. Participants supported the changes in 
the food packages, but also acknowledged the administrative burden 
that may arise. Specific administrative burden for each proposed 
revision is identified in the Summary of Key Provisions on page 23 
of this analysis.
    FNS does not have data on the current administrative costs 
incurred by state and local agencies. Therefore, we are unable to 
quantify the potential increases in administrative burden due to the 
proposed revisions. The proposed rule asks for comments from State 
and local agencies on the scale of the administrative burden 
associated with implementation of the revisions.
    Generally, states and local clinics may need to reprioritize or 
postpone some initiatives to undertake some of the start-up 
activities associated with this rule, as well as adapt to certain 
ongoing administrative requirements resulting from the rule. 
Initially, State and local agencies will need to revise state lists 
of authorized foods and prescribed amounts, develop food package 
combinations, and create a fruit and vegetable cash-value voucher to 
accompany the standard WIC instruments. State agencies will need to 
review and update all of their guidance materials regarding 
authorized supplemental foods. Significant time during 
implementation will be required in order to train staff on the 
changes in the WIC food packages. Staff will need to work with 
manufacturers and vendors to evaluate newly-eligible foods for 
nutrient content, determine minimum stock requirements, identify any 
special needs for carrying foods, such as increased shelf space or 
refrigerator space, and ensure systems are in place to accept the 
fruit and vegetable vouchers. State and local agencies will need to 
modify their existing WIC food management information systems to 
allow the new foods to be prescribed and to process the fruit and 
vegetable vouchers. Expenditures related to management information 
systems, and the degree to which any this impact is one-time or 
ongoing, will vary based on the State and local agency's current 
database structure.
    In addition to the administrative efforts associated with 
initial implementation of the rule, there may be some ongoing 
administrative requirements to ensure that WIC staff, vendors and 
participants understand and properly implement the changes. States 
will need to continuously review all of the food package changes and 
consider a broader range of issues in determining their strategies 
for containing costs. The increase in the number of food items and 
flexibility afforded to participants will impact time spent on 
providing education and support materials on food selection, storage 
and preparation. Many of the changes in this rule are designed to 
support breastfeeding and local clinics may make ongoing changes in 
staffing and materials to reinforce the changes in the food packages 
with breastfeeding counseling and support. In addition, time will be 
spent communicating with and monitoring vendors to ensure compliance 
may increase.
    WIC vendors will also be affected. Vendors will need to train 
their personnel to recognize the newly WIC-eligible foods and to 
handle the new fruit and vegetable vouchers. Training time may 
increase due to the expanded lists of foods, and management 
information system changes may be necessary. Vendors may also need 
to revise their practices to meet the stocking requirements dictated 
by the new food packages. Most large vendors already carry all of 
the newly-eligible foods; however, some smaller vendors may decide 
that it is not worth participation in WIC to stock the newer foods. 
We do not believe that these expenditures will be significant enough 
to cause many current vendors to discontinue their voluntary 
participation in the WIC program.

E. Uncertainties

    The estimate developed above is sensitive to changes in several 
key assumptions. A few of the most significant are discussed here.

1. Price Volatility in the Dairy Market

    Instability in dairy prices over the last several years presents 
a major element of uncertainty in the cost estimate. However, the 
maximum amount of milk available in each of the food packages is 
reduced. The total amount of milk that can be replaced with more 
expensive substitutes has been reduced as well. These factors make 
the revised food packages less sensitive to dairy price fluctuations 
than the current WIC packages. A 10% increase in the price of milk 
and cheese would alter the cost of the revised food packages as 
follows:

         Table 8.--Projected Cost of WIC Food Package Revisions, Assuming a 10% Increase in Dairy Prices
                                                 [In $ millions]
----------------------------------------------------------------------------------------------------------------
                                                 FY 2007    FY 2008    FY 2009    FY 2010    FY 2011     Total
----------------------------------------------------------------------------------------------------------------
Total Cost of Rule with Alternate Assumption..      -21.0      -42.9      -56.0      -69.7      -61.3     -250.9
Total Cost of Proposed Rule...................       -0.8        2.7       -7.9      -19.5       -8.7      -34.2
                                               -----------------------------------------------------------------

[[Page 44847]]

 
    Difference................................      -20.2      -45.6      -48.1      -50.2      -52.6    -216.7
----------------------------------------------------------------------------------------------------------------
Negative values are cost reductions.

2. Reduce Assumed Preference for Soy Beverage

    FNS anticipates that 10% of women will request soy beverage in 
place of liquid milk, if provided the choice. AC Nielsen Homescan 
data indicate that approximately 10% of households with WIC-eligible 
incomes purchased some soy beverage during FY 2003. The IOM cites 
high rates of lactose maldigestion and low rates of cultural 
acceptability of milk among African American and Asian women as 
important factors in its decision to introduce substitutes for 
milk.\58\ African American women are represented in the WIC 
population at a level disproportionate to their share of the general 
population. In part for that reason, it is appropriate to assume a 
WIC participant preference for soy beverage is at or near the upper 
range of estimates of soy beverage consumption in the U.S. as a 
whole. And because WIC participants may choose freely between milk 
and the more expensive soy substitute, without regard to cost, a 
natural response is consumption at a rate above the rate of those 
whose choice between the two products does not have personal cost 
impact.
---------------------------------------------------------------------------

    \58\ IOM, p. 119.
---------------------------------------------------------------------------

    FNS identified each of the women on its 2002 WIC prescription 
dataset who were provided neither milk nor cheese. Those 
individuals, as a group, are assumed to be the WIC participants most 
inclined to request a prescription of soy beverage in place of milk. 
FNS' simulation model prescribes an amount of soy beverage to those 
individuals equal to the maximum allowed under their respective food 
packages. The program then substitutes soy beverage for the existing 
milk prescriptions of other WIC participants to the extent necessary 
to reach the 10% participant target. The program prescribes cheese 
and tofu before soy beverage; it does not replace the prescription 
of those milk substitutes with soy beverage. IOM took a similar 
approach in developing its cost estimate; it assumed that soy 
beverage would replace 10% of liquid milk prescriptions. In IOM's 
analysis, 8.7% of all milk and milk substitutes prescribed to women 
is in the form of soy beverage. FNS' methodology, which incorporates 
the more detailed data available from PC2002, results in a somewhat 
lower 7.8% substitution rate for soy beverage.
    Adequate data on which to base a soy beverage consumption rate 
for adult women is not available; it is not known whether 
consumption is appreciably higher or lower among women than among 
the population generally. For these reasons, the cost of the 
proposed rule has been re-estimated using two alternate assumptions. 
If soy beverage is prescribed to only 5% of women, the average 
package V, VI, and VII soy beverage substitution rate is 3.9%. 
Conversely if soy beverage is prescribed to 15% of women, the 
average package V, VI, and VII soy beverage substitution rate is 
11.5%. Given the high cost of soy beverage relative to milk, these 
alternate scenarios would have has cost implications.

 Table 9.--Projected Cost of WIC Food Package Revisions, Assuming a Change in the Percentage of Women Prescribed
                                                  Soy Beverage
                                                 [In $ millions]
----------------------------------------------------------------------------------------------------------------
                                                 FY 2007    FY 2008    FY 2009    FY 2010    FY 2011     Total
----------------------------------------------------------------------------------------------------------------
Total Cost of Rule with alternative 5%              -12.3      -23.4      -35.4      -48.3      -38.8     -158.3
 prescription rate............................
Total Cost of Proposed Rule...................       -0.8        2.7       -7.9      -19.5       -8.7      -34.2
Total Cost of Rule with alternative 15%              10.7       28.8       19.6        9.3       21.4       89.9
 prescription rate............................
                                               -----------------------------------------------------------------
    Difference between rule and alternatives..    +/-11.5    +/-26.1    +/-27.5    +/-28.8    +/-30.2  +/-124.1
----------------------------------------------------------------------------------------------------------------
Negative values are cost reductions.

F. Alternatives

    FNS considered several alternatives to the proposed rule. These 
alternatives are discussed below. Each of these alternatives was 
ultimately rejected because FNS believes that a food package which 
reflects the IOM recommendations as closely as possible within the 
constraint of cost neutrality best reflects current scientific 
consensus on how to best meet the dietary needs of WIC participants.

1. Include Yogurt as a Milk Substitute for Food Packages IV-VII

    For Food Packages IV-VII, the IOM identified yogurt, tofu, and 
soy beverage as new milk substitutes to help ensure adequate calcium 
intake by those who cannot consume milk and to accommodate cultural 
preferences. Under the current rule cheese is also available as a 
milk substitute for up to three quarts of milk. IOM's recommendation 
specifically called for limiting substitutions of cheese, yogurt, 
and tofu to four quarts of milk for Food Packages IV, V and VI, and 
six quarts of milk for Food Package VII. Soy beverage would be 
allowed for the entire milk allowance for Food Packages V, VI, and 
VII.
    In order to maintain cost-neutrality, the proposed rule 
eliminates yogurt as a milk substitute, but allows the substitution 
of tofu, cheese and soy beverages up to the IOM maximum substitution 
level. As shown in Table 10, the price of yogurt, $2.62 per quart, 
as compared to $.68 per quart for milk, considerably increases the 
monthly cost of Food Packages IV-VII. Soy beverage and tofu also 
have higher per unit costs than milk; however, the estimated amount 
of tofu purchased by WIC participants is substantially lower than 
that of yogurt, and soy beverage can serve as an alternative for all 
or part of the fluid milk for adult women making it a more cost-
efficient substitute.

[[Page 44848]]



                            Table 10.--Projected Cost of Yogurt as a Milk Substitute
----------------------------------------------------------------------------------------------------------------
                                                                     Estimated
                                                                      average     Price per unit   Cost per food
                          Food package                              prescribed      (inflated to      package
                                                                   amount  (qt.)       FY04)
----------------------------------------------------------------------------------------------------------------
IV..............................................................            0.86           $2.62           $2.25
V...............................................................            0.84            2.62            2.21
VI..............................................................            0.66            2.62            1.74
VII.............................................................            0.83            2.62            2.17
----------------------------------------------------------------------------------------------------------------

    The economic impact of including yogurt as a milk substitute is 
shown in Table 11. The five year cost of the rule, as modified by 
this alternative, is $605.7 million. The cost of the proposed rule 
without yogurt is $-34.2 million (see Table 3.)

         Table 11.--Projected Cost of WIC Food Package Revisions, Including Yogurt as a Milk Substitute
                                                 [In $ millions]
----------------------------------------------------------------------------------------------------------------
                                                 FY 2007    FY 2008    FY 2009    FY 2010    FY 2011     Total
----------------------------------------------------------------------------------------------------------------
Total Cost of Rule with Alternate Assumption..       58.6      137.4      134.0      129.0      146.6      605.7
Total Cost of Proposed Rule...................       -0.8        2.7       -7.9      -19.5       -8.7      -34.2
                                               -----------------------------------------------------------------
    Difference................................       59.4      134.7      141.9      148.5      155.3      639.9
----------------------------------------------------------------------------------------------------------------

2. Replace the Proposed Rule's Fruit and Vegetable Provision With a 
More Restrictive Dark Green and Orange Vegetable Rule

    The 2005 Dietary Guidelines for Americans stresses the 
importance of consuming vegetables from each of five identified 
subgroups (dark green, orange, starchy, legumes, and ``all other.'') 
Overall consumption of vegetables by American adults tends to fall 
short of the levels recommended by the 2005 Dietary Guidelines for 
Americans.\59\ But inadequate consumption varies by vegetable 
subgroup. Consumption of vegetables from the dark green, orange, and 
legume groups fall farthest from recommended levels.\60\
---------------------------------------------------------------------------

    \59\ USDHHS/USDA, p. 4.
    \60\ Id.
---------------------------------------------------------------------------

    The current WIC food packages address inadequate consumption of 
legumes through the prescription of dried beans and peanut butter 
and the proposed rule would increase the quantity of those items in 
two of the food packages. The rule also attempts to increase the 
appeal of the legume subgroup by providing a canned option in 
packages IV through VII.
    By contrast, the current WIC packages and the proposed revisions 
might appear to give too little attention to the lack of dark green 
and orange vegetables in the typical American diet. The current WIC 
food packages offer no vegetables from the dark green subgroup to 
any participant; carrots provided to breastfeeding women are the 
only vegetables from the orange subgroup currently offered through 
WIC. Development of the proposed rule presented the IOM and the USDA 
with an opportunity to add vegetables from these subgroups to the 
WIC packages. Perhaps surprisingly, the rule does not prescribe a 
specific quantity of vegetables from either of these subgroups. 
Despite recognizing potassium, folate, and vitamins A and C as 
priority nutrients lacking in the diets of some WIC subpopulations, 
the IOM chose not to emphasize the dark green and orange vegetable 
groups that tend to offer the highest concentrations of those 
nutrients.\61\ Instead, the IOM recommended a fruit and vegetable 
option with few restrictions. Under the proposed rule, nutrition 
education offered by local WIC agencies will remain the primary 
method of encouraging participants to the most nutritious fruit and 
vegetable varieties; participants remain largely free to choose the 
fruits and vegetables that they find most appealing.
---------------------------------------------------------------------------

    \61\ USDHHS/USDA, p. 26.
---------------------------------------------------------------------------

    An alternative rule that excluded fruit from the WIC packages 
and limited vegetable choices to nutrient-dense dark green and 
orange varieties would increase the level of priority nutrients 
offered by the revised food packages. A restrictive vegetable rule 
might also reduce the inefficiency costs incurred by retailers as 
WIC participants mistakenly bring non-WIC items to the checkout 
counter. A small and definite list of WIC approved vegetables would 
allow retailers to affix labels to store shelves pointing WIC 
participants to each of their options. The same cannot be done as 
readily if the IOM recommended and USDA proposed approach is 
adopted. Although the rule offers substantial consumer choice, it 
also comes with significant restrictions on product form, especially 
for processed fruits and vegetables.
    Specifically, this alternative would provide, in Food Packages 
III-VII, 3.75 pounds or 60 ounces of the following leafy green or 
dark orange vegetables: broccoli; carrots; leafy greens (kale, 
mustard, collard, turnip, spinach); sweet potatoes; and winter 
squash (i.e. Hubbard, acorn or butternut) in lieu of the fruit and 
vegetable voucher. Three and three quarters pounds of leafy greens 
or dark orange vegetables replace the current allowance of 2 pounds 
of carrots in Food Package VII. Allowable forms include fresh, 
canned, and frozen vegetables. This alternative allows substitution 
at a one-to-one rate, for example, one 16 ounce can per 1 pound of 
fresh vegetables and 1 pound frozen for 1 pound fresh. In order to 
contain costs and administrative burden, as well as to maintain the 
nutrient density of the food packages, the following are disallowed: 
creamed or sauced vegetables; vegetable-grain (e.g. pasta/rice) 
mixtures; mixed vegetables that include non-authorized vegetables; 
breaded vegetables; fresh vegetables prepared for immediate 
consumption such as those cleaned and chopped on salad bars; baby 
vegetables; and, those packaged in individual servings except for 
homeless participants. These fruits and vegetables would only be 
prescribed to those Food Package III participants who do not have a 
medical condition that would preclude consumption of leafy green or 
dark orange vegetables.
    Cost is not an impediment to a limited, nutrient-dense vegetable 
option. Broccoli, carrots, mustard greens, kale, sweet potatoes, and 
spinach are among the least expensive fresh vegetables on a per 
serving basis, and are prime candidates for inclusion in any list of 
nutrient-dense, dark green and orange vegetables.\62\ Collard and 
turnip greens are among the least expensive vegetables available in 
frozen form.\63\
---------------------------------------------------------------------------

    \62\ Jane Reed, Elizabeth Fraz[atilde]o, Rachel Itskowitz, How 
Much Do Americans Pay for Fruits and Vegetables?, Economic Research 
Service, U.S. Department of Agriculture, July 2004, p. 33.
    \63\ Id.
---------------------------------------------------------------------------

    Table 12 summarizes price per serving, and the total number of 
servings purchased, for several common vegetables.\64\ Dark green 
leafy vegetables and deep orange vegetables are highlighted.
---------------------------------------------------------------------------

    \64\ ERS examined thirty common vegetables. The top ten by each 
measure (price and quantity), plus all of the dark green and orange 
vegetables are displayed. Prices are averages over all forms (fresh, 
frozen, canned, etc.) weighted by the number of servings purchased 
by form.

[[Page 44849]]



             Table 12.--Commonly Consumed Vegetables, 1999: Price Per Serving and Servings Purchased
----------------------------------------------------------------------------------------------------------------
                       Price per serving                                       Servings purchased
----------------------------------------------------------------------------------------------------------------
                                                       Rank
              Vegetable                 Dollars     (lowest =          Vegetable          Billions    Rank (most
                                                        1)                                               = 1)
----------------------------------------------------------------------------------------------------------------
Cabbage.............................        $0.05            1  Potatoes..............        26.21            1
Potatoes............................         0.07            2  Tomatoes..............         6.97            2
Radishes............................         0.11            3  Onions................         6.01            3
Onions..............................         0.12            4  Carrots...............         5.67            4
Cucumbers...........................         0.12            5  Green beans...........         4.32            5
Broccoli............................         0.13            6  Cabbage...............         3.67            6
Celery..............................         0.13            7  Sweet corn............         3.43            7
Green beans.........................         0.14            8  Broccoli..............         3.33            8
Carrots.............................         0.14            9  Iceberg lettuce.......         3.23            9
Romaine lettuce.....................         0.15           10  Bell peppers..........         2.52           10
Sweet potatoes......................         0.19           14  Sweet potatoes........         0.94           16
Kale................................         0.19           15  Spinach...............         0.56           19
Mustard greens......................         0.19           16  Brussels sprouts......         0.16           22
Brussels sprouts....................         0.27           23  Collard greens........         0.06           26
Spinach.............................         0.29           25  Mustard greens........         0.05           27
Turnip greens.......................         0.30           27  Turnip greens.........         0.04           28
Collard greens......................         0.32           29  Kale..................         0.02           30
30 vegetable average................         0.21  ...........  30 vegetable average..         2.62  ...........
                                      ...........  ...........  Excluding potatoes....         1.81  ...........
----------------------------------------------------------------------------------------------------------------
Source: Figures were compiled from data contained in Reed, Frazao, Itskowitz, How Much Do Americans Pay for
  Fruits and Vegetables?, ERS, USDA, July 2004.

    Averaged across all forms (fresh, frozen, and canned) five of 
the nine dark green and orange vegetables are available at prices 
below the 30 vegetable average. But just two of them are purchased 
at above average rates; the rest are purchased at rates well below 
average.
    The overall cost of the proposed rule would be significantly 
reduced if modified to restrict consumption of vegetables to dark 
green and orange vegetables with a 3.75 pound maximum quantity. The 
five year cost of the rule, as modified by this alternative, is $-
702.4 million as shown in Table 13. The cost of the proposed rule, 
without modification or additional cost containment discussed above, 
is $-34.2 million (see Table 3.)

  Table 13.--Projected Cost (+) / Savings (-) Associated With Replacing Fruit and Vegetable Provision With More
          Restrictive Dark Green and Orange Vegetables (3.75 lb Maximum Quantity for Packages III-VII)
                                                 [In $ millions]
----------------------------------------------------------------------------------------------------------------
                                                 FY 2007    FY 2008    FY 2009    FY 2010    FY 2011      All
----------------------------------------------------------------------------------------------------------------
Total Cost of Rule with Alternative...........      -71.4     -146.7     -154.2     -161.3     -168.8     -702.4
Total Cost of Proposed Rule...................       -0.8        2.7       -7.9      -19.5       -8.7      -34.2
                                               -----------------------------------------------------------------
    Difference................................      -70.6     -149.4     -146.3     -141.8     -160.1     -668.2
----------------------------------------------------------------------------------------------------------------

    The relative lack of popularity of these vegetables raises two 
concerns. The first is whether vendors will be willing to stock 
vegetables with such limited appeal. Historically, WIC has included 
only commonly consumed and widely available items in its food 
packages. These considerations serve, in part, to limit the costs 
incurred by WIC-approved vendors. Requiring vendors to maintain 
fixed supplies of little-consumed foods may prove too expensive, 
especially for the smaller proprietors common in neighborhoods with 
significant WIC-eligible populations. Of course, high concentrations 
of WIC-eligible shoppers might allow smaller vendors to stock these 
foods profitably, however, that raises the second concern about 
whether such a narrow vegetable option will increase consumption.
    IOM and the USDA recognize the difference between a food package 
that simply offers needed nutrients to WIC participants, and one 
that encourages participants to increase their intake of those 
nutrients. IOM concluded that participant choice is among the keys 
to increased consumption of priority foods and nutrients.\65\ 
Concluding that food package options with limited choice fail to 
provide ``incentives for participation,'' IOM suggests that poorly 
designed food packages may prevent WIC from reaching some at-risk 
populations at all.\66\
---------------------------------------------------------------------------

    \65\ IOM, p. 118.
    \66\ Id.
---------------------------------------------------------------------------

    A rule that allows wide choice among vegetable varieties cannot 
guarantee delivery of priority nutrients at recommended levels. But, 
supported by local agency nutrition education, the proposed rule is 
expected to increase the intake of those nutrients. And to the 
extent that WIC participants, like Americans generally, consume too 
little from the fruit and vegetable groups overall, WIC-provided 
fruits and vegetables may displace less healthy foods from the diet, 
and help reduce the excess intake of food energy and saturated fat. 
IOM and USDA propose a minimally restrictive fruit and vegetable 
option with the expectation that it will increase consumption of 
targeted nutrients, and improve the diets of WIC participants, more 
effectively than a limited vegetable option with less participant 
appeal.

3. Do Not Offer Infant Food Fruits, Vegetables, or Meat to Infants Age 
Six Months and Older

    The proposed rule adds infant food fruits and vegetables to 
revised Package II in part as a preferred replacement for fruit 
juice. This alternative questions whether the fruit juice eliminated 
from the infant food packages needs to be replaced at all.
    With the exception of low iron and zinc intakes by the 
relatively small population of fully breastfed infants age six 
months and older, IOM identified no nutrient inadequacies among WIC 
infants. IOM understands that WIC foods are offered to supplement 
the diets of program

[[Page 44850]]

beneficiaries. ``Thus, food groups and nutrients that are lacking in 
the diet are to be emphasized, rather than staple foods that are 
already adequate in the diet.'' \67\ Accepting, for argument's sake, 
that parents are likely to introduce complementary foods to their 
infants at six months of age, regardless of the content of the WIC 
food packages, it may make sense to eliminate juice from the infant 
food packages without offering jarred infant foods as a replacement. 
If this assumption about parents' behavior could be substantiated, 
then elimination of jarred infant food from the proposed rule would 
reduce costs without placing infants at nutritional risk. Those 
savings could be used to allow for the full IOM-recommended level of 
fruits and vegetables or the savings could be redirected to other 
government priorities.
---------------------------------------------------------------------------

    \67\ IOM, p. 81.
---------------------------------------------------------------------------

    The overall cost of the proposed rule would be significantly 
reduced if modified to eliminate both juice and infant foods from 
the infant food packages. The five year cost of the rule, as 
modified by this alternative, is $-983.6 million. The cost of the 
proposed rule, without modification, is $-34.2 million (see Table 
3.)

 Table 14.--Projected Cost (+) / Savings (-) Associated With Eliminating Infant Food Fruits, Vegetables, or Meat
                              From Infant Food Packages; Reinstate Current Package
                                                 [In $ millions]
----------------------------------------------------------------------------------------------------------------
                                                 FY 2007    FY 2008    FY 2009    FY 2010    FY 2011      All
----------------------------------------------------------------------------------------------------------------
Total Cost of Rule with Alternative...........      -89.0     -197.2     -218.5     -239.7     -239.2     -983.6
Total Cost of Proposed Rule...................       -0.8        2.7       -7.9      -19.5       -8.7      -34.2
                                               -----------------------------------------------------------------
    Difference................................      -88.2     -199.9     -210.6     -220.2     -230.5     -949.4
----------------------------------------------------------------------------------------------------------------

    The proposed infant food provision serves two of the broader 
goals of the WIC food package redesign effort. The first seeks to 
encourage WIC participants to increase their intake of fruits and 
vegetables. This effort, backed by the recommendations of current 
nutrition science, and reflected in the 2005 Dietary Guidelines for 
Americans, is weakened by this alternative food package proposal. 
The proposed rule, unlike this alternative, sends a clear message 
that a variety of semi-solid fruits and vegetables is preferred to 
fruit juice as an early complementary food as baby food fruits and 
vegetables serve to introduce older infants to new flavors and 
textures.\68\
---------------------------------------------------------------------------

    \68\ IOM, p. 103.
---------------------------------------------------------------------------

    A second goal of food package redesign effort that is not met 
through this alternative proposal is the promotion of breastfeeding. 
The proposed rule offers twice the amount of infant food fruits and 
vegetables to fully breastfed infants that it offers to partially or 
fully formula-fed infants. IOM and the USDA are optimistic that 
increasing the value of the food package offered to fully breastfed 
infants will provide the type of economic support that will 
encourage mothers to continue breastfeeding beyond six months. The 
introduction of infant food meat to the fully breastfed package is 
intended to provide the same incentive; it extends economic 
assistance to parents, and helps ensure the health of their infants 
with foods that deliver the only two priority nutrients found 
lacking in WIC's infant population. Because this alternative would 
undermine two the key goals of the WIC food package redesign effort, 
it was rejected.

4. Drop the Whole Grain Requirement for Both Bread and Cereal

    The proposed rule requires that bread and the bread substitutes 
added to the children and women food packages meet FDA label 
standards for the health claim for whole grain foods with moderate 
fat content. In addition, the rule requires that cereal in all but 
the infant food packages meet the same whole grain standard. 
Relaxing the whole grain requirement is an alternative that may be 
supported with arguments similar to those behind the rule's broad 
fruit and vegetable provision. IOM's whole grain recommendation is 
motivated by nutrition research that recognizes low fiber intake as 
a health risk factor.\69\ Nevertheless, low fiber intake is a 
consequence of consumer choice. Simply mandating that WIC grain 
products meet the FDA's whole grain standard may not increase whole 
grain consumption or fiber intake. Product variety is more limited, 
and cultural preferences may be difficult to meet, with a 
restrictive whole grain bread and cereal requirement.
---------------------------------------------------------------------------

    \69\ USDHHS/USDA, 2005, p. 5.
---------------------------------------------------------------------------

    However, refined grains are not lacking in the American diet. 
The proposed rule's fruit and vegetable provision encourages the 
consumption of foods that are underconsumed as a group. By contrast, 
the 2005 Dietary Guidelines for Americans recommend that refined 
grains be replaced (not supplemented) with whole grains.\70\
---------------------------------------------------------------------------

    \70\ Id., p. 25.
---------------------------------------------------------------------------

    Other arguments that might be raised against the whole grain 
requirement are possible limited availability of whole grain 
products at some WIC vendor sites, and higher food package costs. 
Although the need to stock additional whole grain items will be an 
economic burden to some WIC vendors, increased sales to WIC 
participants may justify the added vendor expense.
    Food package costs under the proposed rule will likely exceed 
the cost of otherwise equivalent packages that lack the whole grain 
requirement.\71\ The overall cost of the proposed rule would be 
significantly reduced if modified to eliminate the whole grain 
requirement. Because this alternative provides less nutritional 
benefit relative to the 2005 Dietary Guidelines for Americans 
recommendations and saves very little, it was rejected.
---------------------------------------------------------------------------

    \71\ To estimate the cost of the alternative, AC Nielsen 
Homescan data were used. Prices paid by households with WIC-eligible 
incomes for whole wheat and multi-grain bread averaged $1.25 per lb 
in CY 2003. The comparable price for bread specified without the 
whole grain restriction was just $0.98. CY 2003 Homescan data 
suggest that low income households paid $1.17 per pound for brown 
rice, and just $1.05 for all varieties of rice. Selecting cereal 
brands representative of those allowed under current WIC rules 
produced an average CY 2003 price per ounce of $0.155; restricting 
those brands to ones identified by FNS as whole grain produced an 
average price of $0.152. (Given the uncertainty of a price 
difference between whole grain WIC cereals and all WIC cereals, the 
whole grain price, adjusted for inflation, was used in both the 
current program cost estimate and the cost of the proposed rule.)

  Table 15.--Projected Cost (+) / Savings (-) Associated With Eliminating the Whole Grain Requirement for Both
                                                Bread and Cereal
                                                 [In $ millions]
----------------------------------------------------------------------------------------------------------------
                                                 FY 2007    FY 2008    FY 2009    FY 2010    FY 2011      All
----------------------------------------------------------------------------------------------------------------
Total Cost of Rule with Alternative...........      -$5.8     -$17.3     -$29.1     -$41.6     -$31.9    -$125.6
Total Cost of Proposed Rule...................       -0.8        2.7       -7.9      -19.5       -8.7      -34.2
                                               -----------------------------------------------------------------
    Difference................................       -5.0      -20.0      -21.2      -22.1      -23.2      -91.4
----------------------------------------------------------------------------------------------------------------


[[Page 44851]]

G. Market Analysis

    The proposed changes in the quantities and types of foods 
provided by the WIC program should result in changes in the 
quantities and types of foods that WIC participants buy with their 
WIC vouchers. The complete market impact of this rule is difficult 
to accurately quantify, because we do not know the extent to which 
WIC foods substitute for purchases WIC participants would have 
otherwise made with their own funds. Empirical research on this 
issue is inconclusive.\72\ Because of this uncertainty, we present 
two scenarios. In the first (Table 16), we assume full 
substitution--that is, all foods purchased with WIC vouchers under 
the current packages would otherwise be purchased with the 
participants' own funds under the proposed rule. In the second 
(Table 17), we assume the alternate--that none of the foods 
purchased with WIC vouchers would otherwise be purchased with the 
participants' own funds. In both scenarios, the potential impact of 
the proposed rule on the total market size for most foods is 
relatively modest, as is the impact on WIC's share of the total 
market.
---------------------------------------------------------------------------

    \72\ Mary Kay Fox, William Hamilton, Biing-Hwan Lin, Effects of 
Food Assistance and Nutrition Programs on Nutrition and Health, 
Volume 3, Literature Review, Economic Research Service, U.S. 
Department of Agriculture, Food Assistance and Nutrition Research 
Report Number 19-3. October 2004.
---------------------------------------------------------------------------

    We estimated the total value of WIC sales \73\ for each food 
item and the total annual U.S. retail sales for each WIC food item. 
To estimate WIC sales, we multiplied the average unit price per food 
item by an estimate of the quantity of food purchased by WIC 
participants (the average estimated participation multiplied by the 
amount of food prescribed to a participant throughout the course of 
a year).\74\ To estimate total annual sales, 2004 AC Nielsen 
Productscan data was used to calculate total volume and annual 
grocery store sales of the different categories of food 
products.\75\ We used calendar year (CY) 2004 participation, cost 
and sales estimates for our market share analysis. Although the rule 
does not take effect until FY2007, we cannot reliably make 
projections about the overall sales of WIC food items for the next 
three years; we believe the CY2004 data provides a good indication 
of the relative impact of the rule's changes on each food item.
---------------------------------------------------------------------------

    \73\ WIC sales refer only to sales produced by the use of WIC 
vouchers, not the total sales from all purchases made by WIC 
participants.
    \74\ Prescription amounts used in this market share analysis are 
the same as those used in the cost analysis.
    \75\ Total annual sales include foods that fit in the category 
of food product, but may not be WIC eligible (i.e., within cereal, 
total sales include cereals of any sugar content and cereals without 
whole grains). This was done to accurately portray the impact of the 
proposed food package on the whole market and not just the narrow 
sub-market of ``WIC eligible'' food. Because AC Nielsen Productscan 
data covers approximately 70% of the total grocery market, total 
annual sales were adjusted by dividing by 70%.
    \76\ Total WIC sales reported here are less than the $5.2 
billion dollars (pre-rebate) reported in WIC 2004 food costs. The 
estimates of total WIC food sales for the current and proposed 
packages are likely to be lower than actual WIC food expenditures 
because the AC Nielsen Productscan and Homescan data used to 
estimate food prices may not fully capture the higher prices charged 
by WIC vendors such as small, non-chair, convenience and ``WIC-
Only'' stores.
    \77\ ``WIC % of Market'' estimates are calculated only for items 
for which we have both a numerator and denominator.
    \78\ We were unable to assess the market impact of four items in 
the WIC food package; tofu, soy beverage, baby food, and infant 
cereal. These items are not included in the Productscan data; 
however, we are able to estimate WIC sales because these items are 
part of the Homescan data, which is our source for item price data.
    \79\ Total ``WIC % of Market'' estimates are calculated only for 
items for which we have both a numerator and denominator.
---------------------------------------------------------------------------

    It is important to note that this approach understates the size 
of the total markets for WIC food items (and thus overstates both 
WIC's market share and the potential impact of the proposed change 
on WIC food markets), because the data used to estimate total market 
size is limited to grocery store sales. Data on sales through other 
outlets was not available, but would likely significantly increase 
the estimated size of the total market for WIC foods.

     Table 16.--Estimated Total Annual Sales, WIC Sales, and WIC Percent of Market for Current Food Package and Proposed Food Package, Assuming Full
                                                 Substitution of WIC Foods in Total Annual Sales, CY2004
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Current food package                                Proposed food package
                                               ---------------------------------------------------------------------------------------------------------
                 WIC food item                                                             WIC % of                                             WIC % of
                                                  Estimated total    Estimated total WIC    market     Estimated total    Estimated total WIC    market
                                                 annual sales  ($)     sales  ($) \76\       \77\     annual sales  ($)        sales  ($)         \77\
--------------------------------------------------------------------------------------------------------------------------------------------------------
Formula.......................................        3,827,207,300        2,218,376,592       58.0        3,827,207,300        1,861,708,927       48.6
Beans.........................................        1,594,508,550           28,452,447        1.8        1,594,508,550           74,093,164        4.6
Peanut butter.................................        1,220,294,910           40,124,965        3.3        1,220,294,910           55,178,642        4.5
Milk..........................................       15,079,942,711          906,058,003        6.0       15,079,942,711          677,234,215        4.5
Adult cereal..................................       10,659,174,187          371,248,425        3.5       10,659,174,187          371,248,425        3.5
Juice.........................................        9,054,815,014          554,654,178        6.1        9,054,815,014          281,605,147        3.1
Rice..........................................        1,555,487,249  ...................        0.0        1,555,487,249           47,771,371        3.1
Fruit and vegetables..........................       20,885,553,820            3,257,252        0.0       20,885,553,820          423,909,963        2.0
Eggs..........................................        4,565,261,316          157,506,055        3.5        4,565,261,316           85,613,782        1.9
Cheese........................................       14,115,201,047          420,378,841        3.0       14,115,201,047          252,558,109        1.8
Bread.........................................       9,639,041,0346  ...................        0.0       9,639,041,0346           85,756,306        0.9
Canned fish...................................        1,876,855,676            3,635,931        0.2        1,876,855,676            4,313,082        0.2
Infant cereal \78\............................  ...................           37,109,290  .........  ...................           27,928,716  .........
Baby food \78\................................  ...................  ...................  .........  ...................          181,459,935  .........
Tofu \78\.....................................  ...................  ...................  .........  ...................            1,354,354  .........
Soy beverage \78\.............................  ...................  ...................  .........  ...................           69,438,663  .........
                                               ---------------------------------------------------------------------------------------------------------
    Total79...................................       94,073,343,126        4,740,801,978        5.7       94,073,343,126        4,501,172,621        4.5
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 44852]]


      Table 17.--Estimated Total Annual Sales, WIC Sales, and WIC Percent of Market for Current Food Package and Proposed Food Package, Assuming No
                                                 Substitution of WIC Foods in Total Annual Sales, CY2004
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Current food package                            Proposed food package
                                                       -------------------------------------------------------------------------------------------------
                     WIC food item                           Estimated      Estimated total    WIC % of                                         WIC % of
                                                          proposed total     WIC sales  ($)     market    Estimated total    Estimated total     market
                                                           annual sales           \80\           \81\      WIC sales  ($)     WIC sales  ($)      \81\
--------------------------------------------------------------------------------------------------------------------------------------------------------
 Formula..............................................      3,827,207,300      2,218,376,592       58.0      3,470,539,636      1,861,708,927       53.6
 Beans................................................      1,594,508,550         28,452,447        1.8      1,640,149,267         74,093,164        4.5
 Peanut butter........................................      1,220,294,910         40,124,965        3.3      1,235,348,407         55,178,642        4.5
 Milk.................................................     15,079,942,711        906,058,003        6.0     14,851,118,924        677,234,215        4.6
 Adult cereal.........................................     10,659,174,187        371,248,425        3.5     10,659,174,187        371,248,425        3.5
 Juice................................................      9,054,815,014        554,654,178        6.1      8,781,765,983        281,605,147        3.2
 Rice.................................................      1,555,487,249  .................        0.0      1,603,258,620         47,771,371        3.0
 Fruit and vegetables.................................     20,885,553,820          3,257,252        0.0     21,306,206,531        423,909,963        2.0
 Eggs.................................................      4,565,261,316        157,506,055        3.5      4,493,369,043         85,613,782        1.9
 Cheese...............................................     14,115,201,047        420,378,841        3.0     13,947,380,315        252,558,109        1.8
 Bread................................................      9,639,041,346  .................        0.0      9,724,797,652         85,756,306        0.9
 Canned fish..........................................      1,876,855,676          3,635,931        0.2      1,877,532,826          4,313,082        0.2
 Infant cereal \82\...................................  .................         37,109,290  .........  .................         27,928,716  .........
 Baby food \82\.......................................  .................  .................  .........  .................        181,459,935  .........
 Tofu \82\............................................  .................  .................  .........  .................          1,354,354  .........
 Soy beverage \82\....................................  .................  .................  .........  .................         69,438,663  .........
                                                       -------------------------------------------------------------------------------------------------
    Total \83\........................................     94,073,343,126      4,740,801,978        5.7     93,590,641,391      4,501,172,621        4.5
--------------------------------------------------------------------------------------------------------------------------------------------------------

    It is important to note that current and proposed estimated WIC 
sales differ from the costs reported in Table 3 mainly because the 
market analysis uses pre-rebate formula costs as compared to the 
cost estimate which factors in the post-rebate savings. In addition, 
the data in the market impact analysis is based on CY2004 
participation whereas the cost estimate uses the projected 
participation estimates for 2007 and beyond. Finally, the market 
analysis does not take into account any phase-in period.
    Overall, the changes in the WIC food package will have a modest 
impact on WIC sales as a percentage of total annual sales of these 
food item categories. Market shares are slightly higher under the no 
substitution scenario. (See Table 17). For the foods that are 
currently part of the food package, the proposed food package has 
the largest dollar impact on the infant formula market. Under the 
proposed food package, the market share of WIC sales for infant 
formula is less than with the current food package. The decline is 
mostly due to a reduction in the maximum allowance of infant formula 
for partially breastfed and fully formula-fed infants 6 through 11 
months of age (Food Package II FF).
---------------------------------------------------------------------------

    \80\ Total WIC sales reported here are less than the $5.2 
billion dollars (pre-rebate) reported in WIC 2004 food costs. The 
estimate of total WIC food sales for the current and proposed 
packages are likely to be lower than actual WIC food expenditures 
because the AC Nielsen Productscan and Homescan data used to 
estimate food prices may not fully capture the higher prices charged 
by WIC vendors such as small, non-chain, convenience and ``WIC-
Only'' stores.
    \81\ ``WIC % of Market'' estimates are calculated only for items 
for which we have both a numerator and denominator.
    \82\ We were unable to assess the market impact of four items in 
the WIC food package: tofu, soy beverage, baby food, and infant 
cereal. These items are not included in the Productscan data; 
however, we are able to estimate WIC sales because these items are 
part of the Homescan data, which is our source for item price data.
    \83\ Total ``WIC % of Market'' estimates are calculated only for 
items for which we have both a numerator and denominator.
---------------------------------------------------------------------------

    The other markets that will be impacted and are currently part 
of the food package are the milk, juice, eggs, bean, cheese, peanut 
butter, and fruit and vegetable markets. The market share of these 
items will change slightly. The items that will have decreases are 
milk, juice, eggs, and cheese, while the items that will have 
increases are beans, peanut butter, and fruits and vegetables. The 
WIC market share of milk will change from 6% to 4.5%-4.6% due to 
lower prescription amounts and the ability of participants to 
substitute tofu, and soy beverage for fluid milk. The decline in 
cheese is also due to these reasons. The share of the juice market 
shifts from 6.1% to 3.1%-3.2%, while the share of the egg market 
shifts from 3.5% to 1.9%. Both of these declines stem from changes 
in the package that are designed to improve the overall nutritional 
benefit of the package. Participants will be receiving less juice, 
but more fruits and vegetables. The amount of eggs will be lowered 
consistent with recommendations of the IOM on cholesterol intake and 
to permit a wider variety of foods to be included in the WIC food 
packages. The market share of beans will increase from 1.8% to 4.5%-
4.6%. The majority of this impact stems from the fact that 
participants can now substitute canned beans, which are more 
expensive, for dried beans. The market share of peanut butter will 
increase from 3.3% to 4.5%. Lastly, the WIC percent of the fruit and 
vegetable market will increase from 0% to 2.0%-3.1%. This is due to 
the fact that the only fruit or vegetable that WIC participants 
currently receive are carrots and only exclusively breastfeeding 
mothers receive them. Under the new rule, the fruit and vegetable 
vouchers will provide WIC's women and children participants with 
much greater access to these foods.
    For the foods being added to the WIC food package, the WIC 
market share percentages are, for the most part, small, 0.9% and 
3.0%-3.1%, for bread and rice, respectively. We were unable to 
assess the market impact of four items in the food package: tofu, 
soy beverage, baby food, and infant cereal. These items are not 
included in the Productscan data; however we are able to estimate 
WIC sales because these items are part of the Homescan data, which 
is our source for item price data.
    Given the changes in market share and potential changes in total 
market demand, changes in the purchases of WIC-provided foods could 
theoretically have an impact on prices for WIC foods. However, 
because the demand impacts for most foods are small and impossible 
to estimate precisely, we are unable to determine the potential 
price effects.
    WIC purchases of infant formula represent a larger share of the 
total market of WIC-provided foods than do WIC purchases of the 
other WIC foods. The Economic Research Service (ERS) recently 
studied the relationship between retail prices of infant formula and 
demand for WIC-provided formula. ERS findings suggest that the 
amount of WIC-provided formula purchased has an effect on retail 
prices; specifically, larger WIC demand leads to higher retail 
prices for non-WIC consumers who purchase the state's contract brand 
of formula.\84\ ERS found that the larger the relative size of the 
WIC program, the greater the retail price of the contract brand of 
infant formula, ranging from 8 to 14 cents across brands of milk-
based powder infant formula and from 3 to

[[Page 44853]]

11 cents across brands of non-contract powder infant formula for a 
one-unit change in relative size of WIC (e.g., WIC's share of all 
formula-fed infants increase from one-half to two-thirds of all 
formula-fed infants). However, it is difficult to project the exact 
impact of the reduction in WIC demand for infant formula under the 
proposed rule based on this study. The ERS analysis was limited to 
formulas sold in supermarkets, whereas projecting the impact of the 
rule on overall demand would require an analysis of the behavior of 
non-WIC consumers, which have more diverse purchasing habits. For 
instance, many non-WIC formula purchases are at prices below that of 
supermarkets from mass merchandisers that do not participate in the 
WIC Program. In addition, the change in WIC formula sales as a 
percentage of retail grocery sales due to this proposed rule (from 
58% to 49%-54%) is smaller than the changes in WIC sales examined in 
the ERS report (from 50% to 66%). We invite comment on the impact of 
the proposed revisions to the WIC packages on food prices.
---------------------------------------------------------------------------

    \84\ Victor Olivera, Mark Prell, David Smallwood, Elizabeth 
Fraz[atilde]o, WIC and the Retail Price of Infant Formula, Economic 
Research Service, U.S. Department of Agriculture, May 2004, p. 60.
    \85\ Current Food Package III is $0 because the analysis only 
considers the incremental costs associated with the proposal. 
Proposed Food Package III represents the incremental costs as a 
result of the changes in the proposed rule. FNS does not have 
comprehensive data on the current cost of medical foods provided in 
Food Package III. However, the medical foods associated with this 
package stay the same under the current and proposed rules. The 
incremental cost is extending foods from other packages to food 
package III recipients. All other food package costs reflect the 
full package costs.
    \86\ FY 07 is multiplied by 11 months.
---------------------------------------------------------------------------

Appendix: Additional Cost Estimate Assumptions

                   Table A1.--FY 07 Food Package Costs
                              [Post-rebate]
------------------------------------------------------------------------
                   Food package                      Current    Proposed
------------------------------------------------------------------------
I--0 to 3 month infants...........................     $25.41     $22.91
II--6 to 11.9 month infants.......................      30.62      38.74
III--Participants with special medical needs \85\.       0.00      34.36
IV--Children 1 to 4.9 years.......................      35.60      33.54
V--Women: pregnant and partially breastfeeding....      40.02      42.28
VI--Women: postpartum.............................      32.41      33.14
VII--Women: fully breastfeeding...................      51.25      52.62
------------------------------------------------------------------------


                     Table A2.--Annual Current Food Package Costs (Post-Rebate) FY 07-FY 11
                                                 [In $ millions]
----------------------------------------------------------------------------------------------------------------
                  Food package                    FY 07 \86\     FY 08        FY 09        FY 10        FY 11
----------------------------------------------------------------------------------------------------------------
I..............................................      $282.08      $321.87      $336.70      $352.19      $368.52
II.............................................       304.34       347.27       363.27       379.97       397.60
III \85\.......................................         0.00         0.00         0.00         0.00         0.00
IV.............................................     1,660.65     1,894.92     1,982.24     2,073.38     2,169.55
V..............................................       554.12       632.28       661.42       691.83       723.92
VI.............................................       227.20       259.26       271.20       283.67       296.83
VII............................................        79.57        90.80        94.98        99.35       103.96
----------------------------------------------------------------------------------------------------------------


                     Table A3.--Annual Proposed Food Package Costs (Post-Rebate) FY 07-FY 11
                                                 [In $ millions]
----------------------------------------------------------------------------------------------------------------
                  Food package                    FY 07 \86\     FY 08        FY 09        FY 10        FY 11
----------------------------------------------------------------------------------------------------------------
I..............................................      $267.02      $290.30      $303.49      $317.45      $332.17
II.............................................       339.08       438.53       459.61       480.74       503.04
III \85\.......................................         8.15        18.56        19.58        20.50        21.48
IV.............................................     1,612.74     1,779.82     1,854.27     1,932.70     2,015.25
V..............................................       569.79       665.23       693.47       722.65       767.75
VI.............................................       229.75       263.72       274.56       285.81       304.93
VII............................................        80.64        92.92        96.92       101.07       107.06
----------------------------------------------------------------------------------------------------------------


  Table B.--FY 04 Price Inflation Assumptions Using FY 04 Food Specific
                                  CPIs
------------------------------------------------------------------------
                                                              Inflation
                         Food item                               rate
                                                              (percent)
------------------------------------------------------------------------
Infant cereal..............................................         -0.8
Infant food fruit and vegetables:
    Infant food meat.......................................          2.6
    Bananas................................................         -1.0
Milk:
    Whole..................................................         11.0
    Reduced fat............................................          9.1
Cheese.....................................................          5.2
Tofu.......................................................          3.0
Soy beverage...............................................          3.0
Juice......................................................         -1.4
Adult cereal:
    Whole grain............................................         -0.8
    Current WIC cereals....................................         -0.8
Eggs.......................................................         11.3
Beans:
    Dry....................................................          0.4
    Canned.................................................          0.4
Peanut butter..............................................          0.6
Whole grain bread..........................................          0.4
Brown rice.................................................          5.7
Tuna.......................................................          0.1
Salmon.....................................................          0.1
Carrots....................................................          1.3
------------------------------------------------------------------------


[[Page 44854]]


              Table C.--Inflation Assumptions, FY 04-FY 11
------------------------------------------------------------------------
                                                              CPI: Fruit
                                                  Thrifty        and
                     Year                        food plan    vegetables
                                                 (% change)   (% change)
------------------------------------------------------------------------
FY 04.........................................          n/a         3.01
FY 05.........................................         2.46         3.22
FY 06.........................................         2.33         3.29
FY 07.........................................         2.40         3.26
FY 08.........................................         2.40         3.32
FY 09.........................................         2.41         3.29
FY 10.........................................         2.40         3.29
FY 11.........................................         2.44         3.33
------------------------------------------------------------------------


          Table D.--Projected Participation in the WIC Program, by Food Package Type: Current Packages
----------------------------------------------------------------------------------------------------------------
                  Food package                       FY07         FY08         FY09         FY10         FY11
----------------------------------------------------------------------------------------------------------------
I 0-3 month Infants:
    Fully formula-fed..........................      510,062      521,009      532,192      543,614      555,282
    Partially breast-fed.......................       78,699       80,388       82,113       83,876       85,676
    Fully breast-fed...........................       83,033       84,815       86,635       88,495       90,394
                                                     671,794      686,212      700,941      715,985      731,352
II 4-6 month Infants:
    Fully formula-fed..........................      418,052      427,025      436,190      445,552      455,115
    Partially breast-fed.......................       38,534       39,361       40,205       41,068       41,950
    Fully breast-fed...........................       54,361       55,528       56,719       57,937       59,180
    7-12 month Infants:
    Fully formula-fed..........................      609,727      622,813      636,181      649,835      663,783
    Partially breast-fed.......................       55,529       56,721       57,938       59,182       60,452
    Fully breast-fed...........................       64,501       65,885       67,299       68,744       70,219
                                                   1,240,703    1,267,332    1,294,532    1,322,317    1,350,698
III Participants with special medical needs....       86,375       88,229       90,123       92,057       94,033
IV Children: 1-4.9 years.......................    4,240,829    4,331,850    4,424,825    4,519,794    4,616,803
V Women:
    Pregnant...................................    1,138,091    1,162,518    1,187,469    1,212,955    1,238,989
    Partially breastfeeding....................      120,786      123,378      126,026      128,731      131,494
                                                   1,258,877    1,285,896    1,313,495    1,341,686    1,370,483
VI Women: Postpartum...........................      637,268      650,946      664,917      679,188      693,766
VII Women: Fully breastfeeding.................      141,155      144,184      147,279      150,440      153,669
                                                ----------------------------------------------------------------
        Total..................................    8,277,000    8,454,649    8,636,111    8,821,468    9,010,803
----------------------------------------------------------------------------------------------------------------


            Table E.--Projected Participation in the WIC Program, by Food Package Type: Proposed Rule
----------------------------------------------------------------------------------------------------------------
                  Food package                       FY07         FY08         FY09         FY10         FY11
----------------------------------------------------------------------------------------------------------------
I 0-3 month Infants:
    Fully formula-fed..........................      510,062      521,009      532,192      543,614      555,282
    Partially breast-fed.......................       78,699       80,388       82,113       83,876       85,676
    Fully breast-fed...........................       83,033       84,815       86,635       88,495       90,394
    4-5 month Infants:
    Fully formula-fed..........................      275,914      281,836      287,885      294,064      300,376
    Partially breast-fed.......................       25,432       25,978       26,536       27,105       27,687
    Fully breast-fed...........................       35,878       36,648       37,434       38,238       39,059
                                                   1,009,018    1,030,674    1,052,796    1,075,392    1,098,473
II 6-12 month Infants:
    Fully formula-fed..........................      751,865      768,002      784,486      801,323      818,522
    Partially breast-fed.......................       68,630       70,103       71,608       73,145       74,715
    Fully breast-fed...........................       82,983       84,764       86,583       88,442       90,340
                                                     903,478      922,870      942,677      962,910      983,577
III Participants with special medical needs....       86,375       88,229       90,123       92,057       94,033
IV Children:
    1-1.9 years................................    1,400,314    1,430,369    1,461,069    1,492,427    1,524,459
    2-4.9 years................................    2,840,515    2,901,481    2,963,756    3,027,367    3,092,343
                                                   4,240,829    4,331,850    4,424,825    4,519,794    4,616,803
V Women:
    Pregnant...................................    1,138,091    1,162,518    1,187,469    1,212,955    1,238,989
    Partially breastfeeding....................      120,786      123,378      126,026      128,731      131,494
                                                   1,258,877    1,285,896    1,313,495    1,341,686    1,370,483
VI Women: Postpartum...........................      637,268      650,946      664,917      679,188      693,766
VII Women: Fully breastfeeding.................      141,155      144,184      147,279      150,440      153,669
                                                ----------------------------------------------------------------
        Total..................................    8,277,000    8,454,649    8,636,111    8,821,468    9,010,803
----------------------------------------------------------------------------------------------------------------


[[Page 44855]]


                 Table F.--Timeframe for Implementation
------------------------------------------------------------------------
                                                        Timeframe for
    Food package category       Who may implement      implementation
------------------------------------------------------------------------
Pregnant Women..............  All State Agencies..  One Year from
                                                     Publication of
                                                     Interim Rule.
Postpartum Women............  All State Agencies..  One Year from
                                                     Publication of
                                                     Interim Rule.
Full Breastfeeding Women....  All State Agencies..  One Year from
                                                     Publication of
                                                     Interim Rule.
Partially Breastfeeding       Not More Than 32      One Year from
 Women.                        sites (4 sites        Publication of
                               within each of up     Interim Rule (The
                               to 8 state            selected sites will
                               agencies).            have authority to
                                                     issue the revised
                                                     packages for no
                                                     more than 3
                                                     years.).
Fully Formula-Fed Infants...  All State Agencies..  One Year from
                                                     Publication of
                                                     Interim Rule.
Partially Breastfed Infants.  The sites selected    One Year from
                               for Partially         Publication of
                               Breastfeeding         Interim Rule (The
                               Women's Package.      selected sites will
                                                     have authority to
                                                     issue the revised
                                                     packages for no
                                                     more than 3
                                                     years.).
Fully Breastfed Infants.....  All State Agencies..  One Year from
                                                     Publication of
                                                     Interim Rule.
Juice Elimination from        All State Agencies..  Six months from
 Infant Food Packages.                               Publication of
                                                     Interim Rule.
Children....................  All State Agencies..  One Year from
                                                     Publication of
                                                     Interim Rule.
Participants with Certain     All State Agencies..  One Year from
 Medical Conditions (Women,                          Publication of
 Infants and Children).                              Interim Rule
------------------------------------------------------------------------

[FR Doc. 06-6627 Filed 8-4-06; 8:45 am]
BILLING CODE 3410-30-P


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