average one-year price change across all food groups was an increase of 12%. It was also reported that
school districts received the same quantity of regular packaged commodities as ordered for only 54% of
orders, and 9% of commodity orders were delivered late to the state warehouse. Imperfect price information
and an unreliable supply chain may contribute to schools’ apparently inefficient allocation of commodity
resources.
Challenges and Opportunities for the School Commodity Program
The modest level of evidence currently available about the commodity program’s impact on agriculture,
children’s health, and school finances suggests that the school commodity program does not achieve
substantial advantages for its intended beneficiaries.
Opportunities for improvements that could benefit both food producers and schools include the following:
• The DOD Fresh program appears to be well received by schools, though the program is limited in
scope compared to the total school commodity program and there is currently no evidence that the
program provides foods at a lower cost than commercial vendors.
• Cash in lieu and commodity letters of credit programs are understudied, despite statements from
school officials in congressional testimony that such programs—particularly CLOC—would offer
better benefits to schools than the current system of USDA purchases (United States Congress,
1994b).
• Targeted commodity products that offer a substantial price advantage to schools could be offered by
the USDA if the department engaged in research to ascertain which commodities are consistently
less expensive than commercial equivalents.
• An improved supply chain for school commodities has the potential to make the commodity program
more beneficial for schools. However, this would likely involve increased costs at the federal level.
• Prices to food producers—a primary concern for the lawmakers that supported the original NSLP
legislation—could be higher if schools were permitted to conduct 100% of their own procurement.
As indicated by research from Minnesota, product prices for commodity foods are, on average,
lower than prices for equivalent commercial products, though extra costs of transportation and
storage due to an unreliable commodity supply chain mean that commodity foods were found to be
ultimately more costly for schools. Permitting schools to make local decisions about all food
purchases, therefore, may result in both higher prices to farmers and cost savings for schools.
At this time, there is no evidence to suggest that USDA commodity foods are nutritionally distinct from
commercial equivalents. The issue that should be used to judge the school commodity program’s success,
therefore, is whether commodities provide a financial benefit to schools and food producers. Based on the
limited research that is available, it appears that the school commodity program provides little, if any, benefit
to agriculture, and may actually create greater costs for schools.
Ultimately, school officials are likely in the best position to judge whether the commodity program provides a
benefit to school meal programs. It is likely that some products or aspects of the commodity program are
more desirable to some schools than others. Therefore, in the absence of evidence that the current system
provides substantial benefits to agriculture, it may be reasonable to allow schools to choose either to
continue with the existing commodity program or to opt for a more flexible option, such as commodity letters
of credit or cash in lieu of commodities.
For More Information
Buzby, J., Gutherie, J., and Kantor, L. (2003). Evaluation of the USDA Fruit and Vegetable Pilot Program
Report to Congress (No. EFAN-03-006). Washington, D.C.: United States Department of Agriculture.
Food Research and Action Center. (2008). Commodity foods and the nutritional quality of the National
School Lunch Program: Historical role, current options, and future potential. Washington, D.C.
Hecht, K., Sharp, M., Beller, D., Shimada, T., Samuels, S., and Boyle M., et al. (2008). The impact of the
federal child nutrition commodity program on the nutritional quality of school meals in California. Princeton,