deal or no deal! - school nutrition...deal or no deal? the individual boxes of raisins that you love...

© COPYRIGHT 2016 SCHOOL NUTRITION ASSOCIATION – #ANC16 – SAN ANTONIO, TEXAS

Deal or No Deal!Evaluating Which USDA Foods Are Right For You


AcronymsDoD = Department of DefenseFNS = Food and Nutrition ServicesFDP = Food Distribution ProgramRA (s) = Recipient AgenciesWBSCM = Web Supply Chain Management


Why Can’t I Get Whatever I Want?


What is the process?• Agencies request next year’s food in February/

March for the following school year• USDA solicits food for purchase• The food must go to the manufacturer,

distributor, or state warehouse• Product has to get to your district


Challenges • Due to truckload requirements, quantities and

delivery requests are subject to change. For agency menu planning and delivery purposes, it is advisable that agencies monitor ordering system for items purchased.


What is the Best Bang for My Buck?

Well, It Depends


Considerations• Menus• Entitlement Available• Donated Food (DF) Value• Delivery Minimums• Additional Costs

• Delivery• Storage• Processing


Menus• Should drive all USDA Foods decisions• Should be based on student preferences• Are most important consideration


Entitlement Entitlement represents the VALUE of the food that you receive

Entitlement is NOT out-of-pocket money but the value is real


Well How Much Entitlement Do I Have?• Effective rate is about 0.30¢ per reimbursable meal

(free, reduced & paid)

• The rate is subject to change every year


Calculating Entitlement

Total lunch meals served for prior school year (updated periodically) x the commodity rate of assistance = Estimated entitlement

For example: 1000 x $0.3000 cents = $300.00Link for meal assistance rates:http://www.fns.usda.gov/fdd/regs/mealrates.htm


Am I Getting A Good Deal?

How Do I Know?


USDA Foods Direct Delivery

• Entitlement cost only charge from USDA • Items may be subject to distribution fee

from state warehouse• Minimum direct quantity of ¼ truck;

trucks may make 3 delivery stops


Processing USDA Foods• USDA purchases and diverts on behalf of RAs• Manufacturers create “Heat & Eat” items for

RAs• Manufacturers charge a fee to RAs ~

• Adds out of pocket cost


DoD Fresh Fruit & Vegetables• Allows entitlement use for domestic produce• Contracting is handled by the DoD• High demand for menus

Menu

Nutrition CostCustomers Storage

USDA Foods (commodities)

Effective Use of Entitlement


USDA Foods Direct Delivery―Example:

―Case of peaches commercially at $39.00 per case bid price.

―Entitlement value of $31.00 per case―If delivery fee is $3.50 per case with

entitlement use.―Total cost? $34.50 per case ($3.50 out of

pocket)―Other fees?

―They must be considered and evaluated


Commodity Processing


What Should I Consider with Processing?• Menus• Labor• Food Safety• Volume of product to be purchased?• Procurement process at local or state level• Agreement with processor• Tracking purchasing• Sales, delivery, and receipt of end products• Monitoring and auditing of processes


Reading the SEPDS

Cost per donated pound

(.7219)

Total discount based on value

of product in one case

Lbs. Required for one case of product (4.20)


I need 100 cases of apple fruit pockets

Calculation:100 cases X 4.20 (lbs.) = 420 lbs. of donated food requiredMy value in 100 cases = 420 x .7219 or $303.00

Calculating Value


Multiple OptionsOnce you figure out the value of USDA foods in product, there are options to

make sure that you receive it!


Evaluating Options• How do I get the most bang for my entitlement

buck• Rebates – do you get or does the General Fund

get?• Fee For Service (FFS)• FFS through a Distributor• NOI


Good Use of Entitlement?

Answer: It dependsBased on prior example:• 100 cases X 4.20 (lbs.) = 420 lbs. of donated food required

• My discount on 100 cases = $303.00

If your delivery fee is less than $3.03 per case, you may consider this a deal; if not, you are losing money


Cost Benefit Analysis for Processing

USDA FoodGround Beef

(A594)

WBSCM # 100154

USDA Value $2.2874

Processed USDA Foods Commercial Equivalent Annual Savings

Manuf.Product

DescriptionCase

WeightServings /

CaseProcess

CostStorage / Delivery DF / Case DF $/Case Total Cost

Cost / Portion

Commercial Cost

Servings / Case

Cost / Serving

Savings / Serving

Annual Servings

Annual Savings

Cow Chow Beef Patties 20.31 135 $14.17 $0.00 20.1 $45.98 $60.15 $0.45 $71.11 135 $0.53 $0.08 10000$812.09

Moo MooBeef Crumbles 40 256 $39.70 $0.00 31.07 $71.07 $110.77 $0.43 $121.05 135 $0.90 $0.46 10000$4,639.73

Cow Chow Beef Patties 20.31 135 $14.17 $3.50 20.1 $45.98 $63.65 $0.47 $71.11 135 $0.53 $0.06 10000$552.83



USDA FoodAmerican Barrel

(B049)

WBSCM # 100010

USDA Value $1.8003


Manuf.Product

DescriptionCase Wt.

Servings / Case

Process Cost

Storage / Delivery DF / Case DF $/Case Total Cost

Cost / Portion

Commercial Cost

Servings / Case

Cost / Serving

Savings / Serving

Annual Servings

Annual Savings

Moo MooCheese Stick 10.5 168 $13.44 10 $18.00 $31.44 $0.19 $35.45 168 $0.21 $0.02 10000 $238.51

Moo MooCheese Stick 10.5 168 $13.44 $3.50 10 $18.00 $34.94 $0.21 $35.45 168 $0.21 $0.00 10000 $30.18

Moo MooCheese Stick 10.5 168 $13.44 $3.95 10 $18.00 $35.39 $0.21 $35.45 168 $0.21 $0.00 10000 $3.39



USDA Food Apples

WBSCM # xxx-xx

USDA Value $0.2900


Manuf.Product

DescriptionCase

WeightServings / Case

Process Cost

Storage / Delivery DF / Case DF $/Case Total Cost

Cost / Portion

Commercial Cost

Servings / Case

Cost / Serving

Savings / Serving

Annual Servings

Annual Savings

GrannyApples 6/#10 27 144 $20.50 $0.00 $20.50 $0.14 $29.85 144 $0.21 $0.06 10000 $649.31

GrannyApples 6/#10 27 144 $20.50 $3.50 $0.00 $24.00 $0.17 $29.85 144 $0.21 $0.04 10000 $406.25

LongGrannyApples 6/#10 27 144 $20.50 $6.50 $0.00 $27.00 $0.19 $29.85 144 $0.21 $0.02 10000 $197.92

Deal or No Deal?


Deal or No Deal?

Green beans are $21.00/case direct delivery. Your commercial price is $24.00/case. If your state covers distribution costs from the state warehouse, is this a

deal or no deal?


Deal or No Deal?

You are a small district that purchases cheese commercially for $68.00/case. You discover the

USDA foods value in a case of cheese to be $40.00. Should you divert for processing or not?

YES ‐DEAL


Deal or No Deal?

The individual boxes of raisins that you love are available as a USDA food at $30/case. You pay

$34.00 commercially. Your state has a $1/case admin fee and $3/case delivery fee. Is this a good deal?

NO DEAL???


Deal or No Deal?

The DoD program is booming in your state. You love the fresh fruit delivered weekly. You realize that you are paying 15% more for DoD items than from your

local vendor commercially. Deal or no deal?

DEPENDS


Common Pitfalls• Not taking time to evaluate your school districts

menu and usage needs • Thinking of USDA Foods as “free”• Not utilizing all of the available options• Lack of a cycle menu to use product requested• Inadequately managing, tracking, and/or

verifying receipt of further processed items

Questions

deal or no deal! - school nutrition...deal or no deal? the individual boxes of raisins that you love...

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