What s New With Commodities Cathie Mc Cullough Director

What’s New With Commodities Cathie Mc. Cullough, Director Food Distribution Division FNS/USDA 2007 SNA State Agency Conference Nashville, TN, November 2007

Today’s Agenda ü Commodity Image ü Improvements ü Commodity Outlook/ECOS ü Do. D ü Other News

Commodities in Crisis! Addressing our Image Problems Overcoming perceptions and realities… Perceptions: • School lunch causes obesity • USDA “surplus” commodities are the culprit • Commodities are low quality

Commodities in Crisis! Realities: • Commodities account for 15 -20% of food purchases in schools • School districts are never required to accept items they don’t want • USDA commodities are a healthy choice and can play an important role in meeting wellness standards: ü Less sodium ü More whole grains ü More fresh F&Vs ü Less fat ü Less sugar

Commodities in Crisis! When we get hit…so do you! We are addressing our image… • ”Did You Know…” fact sheet • Press releases/press packages • • • Commodity image website Recipe contest Other suggestions? We are targeting … • Foodservice Directors…and you can help! • School boards/administrators/superintendents • Parents/Congressional Rep’s/general public

Commodity Improvements Products are continually reviewed to ensure each supports “Dietary Guidelines…” – Eliminated trans fats in frozen potatoes – Testing fat free potato – Eliminated shortening – Chicken skin substitution for meat – 96 -97% lean ham – 95% lean turkey ham – Testing a 95% lean beef patty

Commodity Improvements Reducing sugar – Unsweetened applesauce Increasing whole grains – – – Spaghetti Rotini Dry kernel corn for further processing On the horizon… – Low sodium vegetables effective SY 2009

Commodity Fact Sheets Updated NSLP Fact Sheets: • New “user friendly” format • One food, one code, one fact sheet • A tie-in with My. Pyramid food groups • Consistent with Nutrient Standard Menu Planning guidance • Nutrient values for: dietary fiber, trans fat, sugars, magnesium, potassium, vitamin A in RAE units, and vitamin E

Commodity Outlook Beef and Pork Outlook: – Beef and pork purchases are on schedule – 90% lean frozen (new) and chilled special beef trim for reprocessing is available for January 2008 – New 96 -97% lean sliced and diced ham is available in 5 lb. packages

Commodity Outlook Poultry: – All turkey orders (roasts, hams, deli breast) were purchased for the fall! – Processors can now substitute meat for skin to lower fat content

Commodity Outlook Fruit Outlook: – Canned clingstone peach production is up – Fresh Bartlett pears are plentiful – Maui Land Pineapple Co. is focusing on fresh product only— no more canned pineapple!

Commodity Outlook Other Products: – Cheese u Prices are high due to export demand u Long-term contracts u Mozzarella orders due earlier (due Sept 07 for 2008) u Moving to a calendar year purchase cycle – Catfish strips u All bones will be removed u Looking for suppliers u Will do a test purchase

Bonus Commodities USDA Bonus Purchases for CN Programs in SY 2008 ü Canned and frozen apple slices ü Applesauce ü Canned apricots

ECOS New Fixes were issued 10/20/07: – Includes an “All” option in selection criteria for reports – Includes an “All” option in the Transfer function – SDA can limit RA submissions that exceed entitlement Effective Spring 08: further ECOS modifications will be restricted to accommodate WBSCM development

ECOS/WBSCM üWBSCM: An internet- based system USDA agencies will use to purchase, manage, and deliver commodities Web-Based Supply Chain Management

Do. D Fresh Program – 47 States, DC, VI, PR, & Guam set aside entitlement funds in SY 08 – About 23 States utilize Section 4 & 11 funds on Do. D Fresh – 5 prime vendors awarded to date: NC, SC, VA, MS, WI – New system uses FFAVORS (Fresh Fruit and Vegetable Ordering and Reporting System)

Do. D Fresh Program – With FFAVORS, the price you see when you order is the full price you pay – Schools have to decide whether or not it is a fair value – If so, it can be a useful option for F&Vs – FNS will continue to expect a high level of customer satisfaction from Do. D

Other News Processing commodities: ü 50% + of NSLP commodities are further processed…and the percentage is growing! ü USDA National Processing Agreements: – Over 100 processors approved by USDA – Centralized/standardized approval of processed end items using commodities – Saves the State time and paperwork

Other News National Processing Agreements ü Inventory Protection: Enforcement of bond requirements: ü One processor suspended for SY 2008 due to non-compliance ü Orders directed away from noncompliant processors ü We successfully collected bonds from 2 processors in SY 2007

Other News Legislation: 1. Ag Appropriation: – Continuing resolution through December 14, 2007 ü Farm Bill: – House version passed July 2007 – Senate Ag Committee passed their version October 25, 2007 u Debate by the full Senate on their version expected to continue in coming weeks

Other News Farm Bill-Commodity Details House Version Senate Version üAdds $190 million to ü Same existing commodity F&V purchases in FY 2008, and more each year until amount reaches $206 million in FY 2012 ü Commodity F&V purchases ü Remains at $50 million through Do. D: – $50 million FYs 20082009 – $75 million FYs 20102012

Regulations Update – Part 250 Rewrite u Proposed rule - “Management of Donated Foods in CN Programs, NSIP and Charitable Institutions” - published June 8, 2006 u Received over 600 comments, mostly from schools on degree of flexibility proposed for food service management companies’ use of commodities u Expect to publish final rule in calendar year 2008

Regulations Update – Part 250 Rewrite u Proposed rule - “Revisions and Clarifications in Requirements for the Processing of Donated Foods” - was published on August 24, 2006 u Received 39 comments u Expect to publish final rule in calendar year 2008

Regulations Update – Part 250 Rewrite u Proposed rule on distribution and control of commodities is being drafted now and will be published after the first two rules (FSMC and Processing) are finalized u Proposal will revise and clarify requirements to ensure donated foods are distributed and managed safely, efficiently and costeffectively

Update of 7 CFR Part 250 We can still take input on these regulations … particularly on establishing standards for… • Cost-effective and efficient commodity delivery systems • Consistent service to recipient agencies across all states

Other News Commodity Rate: – Commodity rate for SY 2008 18. 75 cents (up from 17 cents last SY) – Additional food beyond entitlement and bonus will have to be purchased to meet 12% rule – The effective commodity assistance rate is 20. 84 cents for SY 2008

Training: Other News – Presentations at ACDA, SNA, State and CN Director meetings this past year – Commodity/USDA track at SNA Philadelphia-July 08 – Processing training video – “White Paper” overview of commodity component of NSLP – FD 101 for State staff—May 2008 Commodity Newsletter: – Useful updates on commodity issues – Published about 3 times a year

www. commodityfoods. usda. gov

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