What’s New With CommoditiesWhat’s New With CommoditiesCathie McCullough, DirectorFood Distribution Division

FNS/USDA

2007 SNA State Agency ConferenceNashville, TN, November 2007

Today’s AgendaToday’s Agenda

Commodity ImageCommodity Image

ImprovementsImprovements

Commodity Commodity Outlook/ECOSOutlook/ECOS

DoDDoD

Other NewsOther News

Commodities in Crisis!Commodities in Crisis!Addressing our Image ProblemsAddressing our Image Problems

Overcoming perceptions and realities…Overcoming perceptions and realities…

Perceptions:Perceptions:• School lunch causes obesitySchool lunch causes obesity

• USDA “surplus” commodities are the culpritUSDA “surplus” commodities are the culprit

• Commodities are low qualityCommodities are low quality

Commodities in Crisis!Commodities in Crisis! Realities:Realities:

• Commodities account for 15-20% Commodities account for 15-20% of food purchases in schoolsof food purchases in schools

• School districts are never required School districts are never required to accept items they don’t wantto accept items they don’t want

Less sodium More fresh F&Vs Less sugar

More whole grains Less fat

• USDA commodities are a healthy choice andUSDA commodities are a healthy choice and can play an important role in meeting can play an important role in meeting wellness standards:wellness standards:

Commodities in Crisis!Commodities in Crisis!When we get hit…so do you! When we get hit…so do you! We are addressing our image…We are addressing our image…

• ””Did You Know…” fact sheetDid You Know…” fact sheet• Press releases/press packagesPress releases/press packages• Commodity image websiteCommodity image website• Recipe contestRecipe contest• Other suggestions?Other suggestions?

We are targeting …We are targeting …• Foodservice Directors…and you can help!Foodservice Directors…and you can help!• School boards/administrators/superintendentsSchool boards/administrators/superintendents• Parents/Congressional Rep’s/general publicParents/Congressional Rep’s/general public

Products are continually Products are continually reviewed to ensure each reviewed to ensure each supports “supports “Dietary Dietary Guidelines…”Guidelines…” – Eliminated trans fats in Eliminated trans fats in

frozen potatoes frozen potatoes – Testing fat free potatoTesting fat free potato– Eliminated shorteningEliminated shortening– Chicken skin substitution Chicken skin substitution

for meat for meat – 96-97% lean ham96-97% lean ham– 95% lean turkey ham95% lean turkey ham– Testing a 95% lean beef Testing a 95% lean beef

pattypatty

Commodity ImprovementsCommodity Improvements

Reducing sugarReducing sugar – Unsweetened applesauceUnsweetened applesauce

Increasing whole grainsIncreasing whole grains– SpaghettiSpaghetti– RotiniRotini– Dry kernel corn for further Dry kernel corn for further

processingprocessing

On the horizon…On the horizon…– Low sodium vegetables Low sodium vegetables

effective SY 2009effective SY 2009

Commodity ImprovementsCommodity Improvements

Commodity Fact SheetsCommodity Fact SheetsUpdated NSLP Fact Sheets:Updated NSLP Fact Sheets:• New “user friendly” formatNew “user friendly” format• One food, one code, one fact sheetOne food, one code, one fact sheet• A tie-in with MyPyramid food groupsA tie-in with MyPyramid food groups• Consistent with Nutrient Standard Menu Consistent with Nutrient Standard Menu

Planning guidance Planning guidance• Nutrient values for: dietary fiber, trans Nutrient values for: dietary fiber, trans

fat, sugars, magnesium, potassium, fat, sugars, magnesium, potassium, vitamin A in RAE units, and vitamin Evitamin A in RAE units, and vitamin E

Commodity OutlookCommodity Outlook

Beef and Pork Outlook:Beef and Pork Outlook:– Beef and pork purchases are on Beef and pork purchases are on

scheduleschedule

– 90% lean frozen (new) and 90% lean frozen (new) and chilled special beef trim for chilled special beef trim for reprocessing is available for reprocessing is available for January 2008January 2008

– New 96-97% lean sliced and New 96-97% lean sliced and diced ham is available in 5 lb. diced ham is available in 5 lb. packagespackages

Commodity OutlookCommodity Outlook

Poultry:Poultry:– All turkey orders All turkey orders

(roasts, hams, deli (roasts, hams, deli breast) were breast) were purchased for the fall!purchased for the fall!

– Processors can now substitute Processors can now substitute meat for skin to lower fat contentmeat for skin to lower fat content

Commodity OutlookCommodity OutlookFruit Outlook:Fruit Outlook:

– Canned clingstone peach production Canned clingstone peach production is upis up

– Fresh Bartlett pears are plentifulFresh Bartlett pears are plentiful

– Maui Land and Pineapple Co. is Maui Land and Pineapple Co. is focusing on fresh product only—no focusing on fresh product only—no more canned pineapple!more canned pineapple!

Commodity OutlookCommodity Outlook

Other Products:Other Products:– Cheese Cheese

Prices are high due to export Prices are high due to export demand demand

Long-term contractsLong-term contracts Mozzarella orders due earlier Mozzarella orders due earlier

(due Sept 07 for 2008)(due Sept 07 for 2008) Moving to a calendar year purchase Moving to a calendar year purchase

cyclecycle

– Catfish stripsCatfish strips All bones will be removedAll bones will be removed Looking for suppliersLooking for suppliers Will do a test purchaseWill do a test purchase

Bonus CommoditiesBonus Commodities USDA Bonus Purchases for CN USDA Bonus Purchases for CN

Programs in SY 2008Programs in SY 2008 Canned and frozen apple slicesCanned and frozen apple slices ApplesauceApplesauce Canned apricotsCanned apricots

ECOSECOSNew Fixes were issued New Fixes were issued

10/20/07:10/20/07:– Includes an “All” option in selection Includes an “All” option in selection

criteria for reportscriteria for reports

– Includes an “All” option in the Includes an “All” option in the Transfer functionTransfer function

– SDA can limit RA submissions that SDA can limit RA submissions that exceed entitlementexceed entitlement

Effective Spring 08: further ECOS Effective Spring 08: further ECOS modifications will be restricted to modifications will be restricted to accommodate WBSCM developmentaccommodate WBSCM development

ECOS/WBSCMECOS/WBSCM

WBSCM: An internet-WBSCM: An internet-based system USDA based system USDA agencies will use to agencies will use to purchase, manage, and purchase, manage, and deliver commodities deliver commodities

Web-Based Supply Chain Management

DoD Fresh ProgramDoD Fresh Program

– 4747 States, DC, VI, PR, & Guam set aside States, DC, VI, PR, & Guam set aside entitlement funds in SY 08entitlement funds in SY 08

– About 23 States utilize Section 4 & 11 funds About 23 States utilize Section 4 & 11 funds on DoD Freshon DoD Fresh

– 5 prime vendors awarded to date: 5 prime vendors awarded to date: NC, SC, VA, MS, WINC, SC, VA, MS, WI

– New system uses FFAVORS (New system uses FFAVORS (FFresh resh FFruit and ruit and VVegetable egetable OOrdering and rdering and RReporting eporting SSystem)ystem)

DoD Fresh ProgramDoD Fresh Program

– With FFAVORS, the price you see when you With FFAVORS, the price you see when you order is the full price you payorder is the full price you pay

– Schools have to decide whether or not it is a Schools have to decide whether or not it is a fair value fair value

– If so, it can be a useful option for F&VsIf so, it can be a useful option for F&Vs

– FNS will continue to expect a high level of FNS will continue to expect a high level of customer satisfaction from DoDcustomer satisfaction from DoD

Other NewsOther NewsProcessing commodities:Processing commodities: 50% + of NSLP commodities are further 50% + of NSLP commodities are further

processed…and the percentage is processed…and the percentage is growing!growing!

USDA National Processing USDA National Processing Agreements:Agreements: – Over 100 processors approved by USDAOver 100 processors approved by USDA

– Centralized/standardized approval of Centralized/standardized approval of processed end items using commoditiesprocessed end items using commodities

– Saves the State time and paperworkSaves the State time and paperwork

National Processing AgreementsNational Processing Agreements Inventory Protection: Enforcement Inventory Protection: Enforcement

of bond requirements:of bond requirements:One processor suspended for SY 2008 One processor suspended for SY 2008

due to non-compliancedue to non-compliance

Orders directed away from non-Orders directed away from non-compliant processorscompliant processors

We successfully collected bonds We successfully collected bonds from 2 processors in SY 2007from 2 processors in SY 2007

Other NewsOther News

Other NewsOther News

Ag Appropriation:Ag Appropriation: – Continuing resolution through Continuing resolution through

December 14, 2007December 14, 2007

Farm Bill:Farm Bill: – House version passed July 2007House version passed July 2007

– Senate Ag Committee passed their version Senate Ag Committee passed their version October 25, 2007 October 25, 2007

Debate by the full Senate on their version Debate by the full Senate on their version expected to continue in coming weeksexpected to continue in coming weeks

Legislation:Legislation:

Other NewsOther News

House Version Senate VersionAdds $190 million to Adds $190 million to existing commodity F&V existing commodity F&V purchases in FY 2008, and purchases in FY 2008, and more each year until more each year until amount reaches $206 amount reaches $206 million in FY 2012million in FY 2012

SameSame

Commodity F&V Commodity F&V purchases through DoD:purchases through DoD:

– $50 million FYs 2008-$50 million FYs 2008-20092009– $75 million FYs 2010-$75 million FYs 2010-20122012

Remains at $50 million Remains at $50 million

Farm Bill-Commodity DetailsFarm Bill-Commodity Details

Regulations Update – Regulations Update – Part 250 RewritePart 250 Rewrite

Proposed rule - “Management of Donated Proposed rule - “Management of Donated Foods in CN Programs, NSIP and Charitable Foods in CN Programs, NSIP and Charitable Institutions” - published June 8, 2006Institutions” - published June 8, 2006

Received over 600 comments, mostly from Received over 600 comments, mostly from schools on degree of flexibility proposed schools on degree of flexibility proposed for food service management companies’ for food service management companies’ use of commoditiesuse of commodities

Expect to publish final rule in calendar year Expect to publish final rule in calendar year 20082008

Regulations Update – Regulations Update – Part 250 RewritePart 250 Rewrite

Proposed rule - “Revisions and Proposed rule - “Revisions and Clarifications in Requirements for Clarifications in Requirements for the Processing of Donated Foods” - the Processing of Donated Foods” - was published on August 24, 2006was published on August 24, 2006

Received 39 commentsReceived 39 comments Expect to publish final rule in Expect to publish final rule in

calendar year 2008calendar year 2008

Regulations Update – Regulations Update – Part 250 RewritePart 250 Rewrite

Proposed rule on distribution and Proposed rule on distribution and control of commodities is being drafted control of commodities is being drafted now and will be published after the first now and will be published after the first two rules (FSMC and Processing) are two rules (FSMC and Processing) are finalizedfinalized

Proposal will revise and clarify Proposal will revise and clarify requirements to ensure donated foods requirements to ensure donated foods are distributed and managed safely, are distributed and managed safely, efficiently and cost-effectivelyefficiently and cost-effectively

Update of 7 CFR Part 250Update of 7 CFR Part 250

• Cost-effective and efficient commodity delivery systems

• Consistent service to recipient agencies across all states

We can still take input on these regulations … particularly on establishing standards for…

Other NewsOther NewsCommodity Rate:Commodity Rate:

– Commodity rate for SY 2008 -Commodity rate for SY 2008 -18.75 cents (up from 17 cents 18.75 cents (up from 17 cents last SY)last SY)

– Additional food beyond Additional food beyond entitlement and bonus will entitlement and bonus will have to be purchased to meet have to be purchased to meet 12% rule12% rule

– The The effectiveeffective commodity commodity assistance rate is 20.84 cents assistance rate is 20.84 cents for SY 2008for SY 2008

Other NewsOther NewsTraining:Training:

– Presentations at ACDA, SNA, State and Presentations at ACDA, SNA, State and CN Director meetings this past yearCN Director meetings this past year

– Commodity/USDA track at SNA Commodity/USDA track at SNA Philadelphia-July 08Philadelphia-July 08

– Processing training videoProcessing training video– ““White Paper” overview of commodity White Paper” overview of commodity

component of NSLPcomponent of NSLP– FD 101 for State staff—May 2008FD 101 for State staff—May 2008

Commodity Newsletter:Commodity Newsletter:– Useful updates on commodity issues Useful updates on commodity issues – Published about 3 times a yearPublished about 3 times a year

www.commodityfoods.usda.govwww.commodityfoods.usda.gov

CFN For Kids & TeensCFN For Kids & Teens

QUESTIONS?QUESTIONS?