The Dispatch
For New Child Nutrition Directors
FOOD COST & COMMODITY BASICS
January 2022
A Publication of ESC Region 11 Child Nutrition
Why should tray and a la carte costs matter to me?
- Healthy, Hunger-Free Kids Act of 2010 legislated rules for setting meal prices.
- USDA has developed a Paid Lunch Equity (PLE) Tool to help districts complete the calculations.
- The PLE tool must be completed annually. It can be found on Squaremeals under forms.
Adult Meal Pricing
- U.S. Department of Agriculture (USDA) requires schools to ensure that reimbursement, student payments, and the value of donated foods are not used to subsidize meals served to adults.
- The cost must cover the reimbursement received.
- Adult meal calculator must be completed annually.
Nonprogram Food Pricing
- A la carte prices should cover food and labor costs associated with each item as well as a fair profit. Compare prices of similar items locally and consider setting school prices slightly lower. Prices can deliberately be set lower on certain items such as fresh fruit, bottled water, etc., to encourage the purchase of these items.
- Determine the raw food cost of the item offered for sale.
- Identify the desired food-cost percentage for the school nutrition program operation.
- To establish a base selling price, divide the item’s food cost by the desired food cost percentage mark-up.
- A la carte menu items should be priced so that any combination under Offer Versus Serve (OVS) would equal or exceed the cost of the reimbursable meal. The reimbursable meal should always be the best buy.
- For example, the price charged for a reimbursable student lunch is $2.85. If the price charged for an a la carte sandwich and milk is $3.10, the reimbursable meal is the better deal (recommended); however, if the price charged for an a la carte sandwich and milk is $2.60, the reimbursable meal is not the better deal (not recommended).
Question: Why is it important for school districts to set prices on non-reimbursable, nonprogram food items so there is NO LOSS to the school nutrition program?
Answer: Federal regulations do not allow the school nutrition program to supplement other food sales outside the reimbursable student meal. Special functions must be priced high enough to cover the entire cost of the food function.
FOOD COST BASICS
UNDERSTANDING COMMODITIES
DEEP THOUGHTS
I WONDER....
Money Tree
The closest thing you have to a money tree is USDA Foods! Review our USDA Foods Decision Tree to grow your money.
UPCOMING EVENTS
In case you missed it:
Register here for future classes
Upcoming
January 2022
13 The Monthly Rewind (virtual) will include USDA Foods Basics for new CN directors
14 The Dispatch: Food cost and USDA foods
16-18 SNA School Nutrition Industry Conference, San Antonio
25 USDA Foods with Multi-Region Co-op
25-26 SNA School Nutrition Industry Conference, Virtual
February 2022
9-11 ESC team will be at TDA training
24 The Monthly Rewind and Press Play newsletter
ESC REGION 11 CHILD NUTRITION
Email: childnutrition@esc11.net
Website: https://www.esc11.net/childnutrition
Location: 1451 South Cherry Lane, White Settlement, TX, USA
Phone: 817-740-7545
Facebook: https://www.facebook.com/ESC11ChildNutrition
This newsletter is funded by the USDA/TDA. This institution is an equal opportunity provider.
PA 1.13.2022
LB 1.13.22