School Lunch Reimbursement Rates Increase But Additional Funding Still Needed To Cover Food Cost Hikes

Main Category: Nutrition / Diet
Also Included In: Pediatrics / Children's Health
Article Date: 08 Jul 2008 - 3:00 PDT

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The Federal Register announced a statutory 4.3% annual increase in the federal reimbursement provided to school nutrition programs. However, the increased reimbursement does not cover the estimated 11.6% increase in the cost of preparing and serving nutritious meals that schools have witnessed this year. The School Nutrition Association estimates that the average full cost to prepare a healthy school lunch is approximately $2.88, compared to the new federal reimbursement provided to cover that cost, set today at $2.57. Even with about 20 cents worth of healthy food items provided through USDA commodity distribution program, school nutrition programs are projected to lose 11 cents per lunch served next school year or about $3.3 million each school day during the 2008-2009 school year. Emergency funding relief from the federal, state and/or local level is needed to help cover that loss. SNA president-elect Katie Wilson is scheduled to testify at a hearing on the impact of rising food costs on school nutrition programs before the House Committee on Education and Labor on Wednesday, July 9, 2008.

School nutrition programs have been challenged this year with increased food, milk and energy costs combined with high labor and benefit costs, all significantly impacting program budgets. Many food items critical to providing balanced, nutritious school meals have experienced up to double-digit price increases in the last 12 months according to an SNA survey. All increases exceed the average payment increase for federal child nutrition programs over the past 10 years, examples include:

- Milk: up 19%
- Whole grain breads: up 17%
- Meat/meat alternate: up 11%
- Fruits and Vegetables: up 13%

School boards are raising lunch prices and school nutrition programs are working to cut costs while still maintaining the positive changes taking place in the cafeteria. An analysis of local media coverage over the past two months found more than 170 districts have raised lunch prices for the upcoming school year, up from about 70 during the same time last year. Based on local media coverage from May and June 2008, the average increase in meal prices was $0.26. Even with the increases, the national average cost to purchase a school lunch is $1.98: still less than the average cost associated with preparing a lunch to bring from home - estimated to be $3.43 last school year. Eligible students qualifying for free or reduced price school meals will continue to receive those healthy meals next school year for either no cost or the 40 cent reduced price fee.

Nutrition standard requirements have helped schools to increase fresh produce, low-fat dairy and whole grain foods, but no funding was provided for schools to make those changes. Seventy-eight percent of programs have experienced increased costs as a result of implementing their district's nutrition standards, according to SNA local wellness policy research. Whole grain items, fresh fruits and vegetables and low fat snacks in particular have resulted in increased costs.

Even before this current climate of increases, costs exceeded revenues with school nutrition directors reporting the following in a 2007 SNA Trends survey:

- 86% indicated an increase in their programs' food costs
- 83% indicated an increase in their programs' labor costs
- 84% indicated an increase in their programs' gas/transportation
- 46% indicated an increase in their programs' indirect costs - such as gas, electricity and water that are charged by the school district to the school nutrition program.

Additional funding from the local, state and federal levels of government and private sources are needed to ensure healthier food options continue to be available in schools. The School Nutrition Association is calling on Congress to address the need for additional funds through an emergency adjustment to the reimbursement rate or the index established to set the reimbursement rate. Adjustments to child nutrition program (CNP) reimbursements, such as the one released today, are a statutory requirement based on the annual change from May to May each year in the Food Away From Home series of the Consumer Price Index for All Urban Consumers, published by the Bureau of Labor Statistics of the U.S. Department of Labor.

SNA, the School Nutrition Association, is a national, non-profit professional organization representing more than 55,000 members who provide high-quality, low-cost meals to students across the country. The Association and its members are dedicated to feeding children safe and nutritious meals. Founded in 1946, SNA is the only association devoted exclusively to protecting and enhancing children's health and well being through school meals and sound nutrition education.

School Nutrition Association