Commodity Procurement

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Commodity Procurement

• From USDA to Your District

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How is Entitlement Calculated?

• Previous years reimbursable meals multiplied by
  rate established by USDA
• 2003-2004 rate is 0.1575 per meal
• USDA establishes market value prices for all
  commodity products annually

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Entitlement Calculation (cont.)

• Unspent entitlement may be rolled over and
  spent for the following school year
• Roll-over are spent before current years
  entitlement is drawn down
• Bonus commodity offerings do not draw down
  entitlement

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How the Commodity Program Worked Through 1998-1999

• State ordered what they believed Districts would
  want from USDA offerings
• Districts completed monthly request of allocated
  items from State warehouse
• State meal reimbursement funds used for delivery
  and storage of commodities
• State administered reprocessing contracts
• Many products old upon receipt by District

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Changes For 1999-2000

• Districts reimbursed for commodity value of
  certain commercial products purchased
• Limited to Group B commodities like cheese,
  flour, and non-fat dry milk
• Commodities diverted to manufacturers based on
  Districts purchase estimates

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More Changes For 2000-2001

• Now three ways to utilize entitlement
• Brown Box Commodities that are not further
  processed
• Reprocessed or Diverted Food items produced by
  a commodity processor
• Pilot Products Commercial foods eligible for
  commodity rebates
• Districts may use one, two, or all three methods
  to utilize entitlement

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Brown Box Commodities

• Items such as ground beef, turkey roasts, and
  canned fruits and vegetables
• Districts complete on-line requests, called
  surveys, in the spring for the following year
• State compiles all Districts surveys and orders
  in whole truckloads from USDA
• State contracts with a designated storage
  facility where all commodities are shipped

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Brown Box (continued)

• Districts must contract with a commercial
  distributor in order to receive commodities
• Distributor transports commodities from storage
  facility to schools as requested
• Distributors charge delivery fee in addition to
  passed-on storage facility handling fee
• Commodities delivered with regular commercial
  products in most cases

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Reprocessed Commodities

• Items such as chicken nuggets, raw or cooked beef
  patties, and orange juice
• Districts request quantities, by month, on
  surveys from approved processors
• Different processors have varied minimum order
  quantities and delivery procedures
• Shipments may come directly from processor or
  through a distributor

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Reprocessed (continued)

• Districts pay processors for products in addition
  to the use of entitlement value
• Distributors generally charge a handling fee for
  receiving and distributing these
• Brokers, representing processors, coordinate the
  order and delivery process
• Districts provide surveyed amounts to brokers
  and/or processors

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Pilot Products

• Items such as pizza, breads, and chicken patties
  and nuggets
• Most are products that Districts already menu and
  purchase commercially
• Mostly products containing Group B or Poultry
  commodities

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Pilot Products (continued)

• Districts estimate quantities of specific
  products on spring surveys
• USDA establishes commodity value contained in
  each approved product
• Reduction of entitlement is a result of
  quantities times assigned values
• within each manufacturers rebate group are
  interchangeable

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Facilitating the Rebate Process

• Two ways to submit claims for rebates
• Enter individual items from invoices
• Distributor uploads monthly purchase data of
  eligible products to State
• Districts review data on CLics web site and
  release claim for payment
• Payments are received with IDEAS payments and
  coded 02S473

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Tracking Rebate Products

• Rebate Claim Summary screen
• Rebate Payments screen
• Matching rebate payments to IDEAS payments
• Commercial Products year end report

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