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USDA FOODS

USDA FOODS. NEW PROGRAM & NEW FOODSERVICE PERSONNEL TRAINING February 11, 2014 1:00 P.M. – 4:00 P.M. Training. I. Opening and Introductions II. Basic Overview III. Timelines IV. Preparing for the Annual Order V. Group Exercise VI. Demo of USDA Foods Online Order System

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USDA FOODS

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  1. USDA FOODS • NEW PROGRAM & NEW FOODSERVICE PERSONNEL TRAINING • February 11, 2014 • 1:00 P.M. – 4:00 P.M.

  2. Training • I. Opening and Introductions • II. Basic Overview • III. Timelines • IV. Preparing for the Annual Order • V. Group Exercise • VI. Demo of USDA Foods Online Order System • VII. Additional USDA Foods Ordering Opportunities • VIII. Demo of Additional Ordering Opportunities • IX. Conclusion

  3. I. Opening and Introductions • Presenters: • Laura Sime – Distribution Specialist Phone: 608-267-9119 Email: laura.sime@dpi.wi.gov • Lynne Slack – Processing Specialist Phone: 608-266-2596 Email: lynne.slack@dpi.wi.gov • Antonio Ante – Contracts Specialist Phone: 608-266-3615 Email: antonio.ante@dpi.wi.gov

  4. Purpose: • To gain knowledge on the basics of the USDA Foods program in Wisconsin. • To gain a thorough understanding of the annual order process. • To be prepared for determining what and how many USDA Foods to order for School Year 2014-15.

  5. II. Basic Overview of the USDA Foods Program • A. Glossary of Terms Common Terms: Brown – box USDA Foods: Product that is received in the same form in which it was ordered from USDA. For example, frozen corn, canned peaches, diced chicken and turkey ham are processed at the USDA level and are ordered and shipped from USDA in this form. Donated food: Food donated or available for donation by USDA to eligible recipient agencies. Donated food is also referred to as “USDA Foods.” Handout: USDA Foods Glossary of Terms

  6. II. Basic Overview of the USDA Foods Program • B. USDA Foods Distribution Frequently Asked Questions (FAQ) What is the USDA Foods Distribution Program? • The United State Department of Agriculture (USDA) purchases food to support the American agricultural market and to remove surplus. These food products are called USDA Foods. These USDA Foods in turn are offered to recipients of different government supported programs, such as as the National School Lunch Program (NSLP) . • USDA Foods account for approximately 17-20% of all foods purchased by recipient agencies participating in NSLP. Handout: USDA Food Distribution FAQ

  7. II. Basic Overview of the USDA Foods Program • B. USDA Foods Distribution Frequently Asked Questions (Continued) What kinds or products are offered? • Different types of products are offered through the USDA Foods program including: • fruits and vegetables • meats • cheeses • dry and canned beans • peanut products • rice, pasta, flour and other grain products

  8. II. Basic Overview of the USDA Foods Program • B. USDA Foods Distribution Frequently Asked Questions (Continued) What is entitlement? • NSLP participating agencies receive a yearly entitlement dollar balance to be spent towards the value of USDA Foods. The entitlement balance is determined by the yearly federal assistance rate per meal times the agency’s prior year’s total reimbursable meals served.

  9. II. Basic Overview of the USDA Foods Program • B. USDA Foods Distribution Frequently Asked Questions (Continued) What is the entitlement dollar value of a USDA Foods product? • The entitlement dollar value of the USDA Foods is the actual cost of the product as purchased by USDA from the market. Agencies do not directly pay the entitlement dollar value. This dollar value is subtracted from the agency’s yearly entitlement dollar balance.

  10. II. Basic Overview of the USDA Foods Program • B. USDA Foods Distribution Frequently Asked Questions (Continued) What are bonus products? • These products may be any USDA Foods product. Bonus foods are considered over and above entitlement foods. Bonus foods are offered periodically, but only as they become available through agricultural surpluses. The dollar value of these products is not subtracted from the yearly entitlement dollar balance.

  11. II. Basic Overview of the USDA Foods Program • B. USDA Foods Distribution Frequently Asked Questions (Continued) Since agencies do not directly pay the entitlement dollar value of USDA Foods, are USDA Foods free? • USDA Foods are not free. The entitlement value of each product as purchased by USDA, pays for the cost to purchase the product and ship the product into the state of Wisconsin. However, once the product has been received into the state of Wisconsin, there are costs associated with USDA Foods.

  12. II. Basic Overview of the USDA Foods Program • B. USDA Foods Distribution Frequently Asked Questions (Continued) • Administrative Fee: This is the amount charged to cover the costs associated with administration of the USDA Foods program. This fee is assessed for all USDA Foods products requiring DPI monitoring and oversight, including bulk pounds/cases committed to a processor for further processing. • Storage Fee: Once product is received into the state of Wisconsin, there are additional storage costs that occur prior to delivery of the product to each agency.

  13. II. Basic Overview of the USDA Foods Program • B. USDA Foods Distribution Frequently Asked Questions (Continued) • Delivery Fee: For agencies that select the State delivery system, the delivery fee is the amount charged to cover the costs associated with the once-per-month delivery of USDA Foods to each agency. • Processing Fee: The processing fee covers the cost of “value added” products. USDA Foods in bulk form are sent to processors to make into convenient, food safe products. The “processing fee” only applies to agencies that are participating in the State Processing Program.

  14. II. Basic Overview of the USDA Foods Program • B. USDA Foods Distribution Frequently Asked Questions (Continued) USDA Foods Handling Charge Fees School Year 2013-14: Administrative Fee: $.010/LB gross weight Storage Fee: $.0147/LB gross weight Delivery Fee: $.0281/LB gross weight (if using the state-contracted delivery system) Total = $.0528/LB state delivery Total = $.0247/LB school-contracted commercial distributor delivery Handout: School Year 2013-14 Handling Charge Fees

  15. II. Basic Overview of the USDA Foods Program • B. USDA Food Distribution Frequently Asked Questions (Continued) • Costs involved with USDA Foods need to be assessed like any other cost in running your food service program. • To evaluate the financial benefit of ordering USDA Foods, add the administrative fee, storage fee, delivery fee, and the processing fee per case together. Compare this total cost to the cost for the same product or a similar product from the commercial market.

  16. II. Basic Overview of the USDA Foods Program • C. Brown-Box vs. State-Processed Brown-box USDA Foods: products that are received in the same form in which it was ordered from USDA. Handouts: • School Year 2014-15 Expected List of Brown-Box USDA Foods • School Year 2014-15 Entitlement Value Per Unit

  17. II. Basic Overview of the USDA Foods Program • C. Brown-Box vs. State-Processed State-Processed USDA Foods • Bulk USDA Foods that are ordered by DPI and shipped directly from a USDA vendor to a processor. • Bulk USDA Foods are further processed into end products, which have been determined through a state-wide bid process. • There is a processing fee per case to process these bulk USDA Foods into finished end products. Participating agencies that order and receive the state-processed products are responsible for these costs.

  18. II. Basic Overview of the USDA Foods Program • C. Brown-Box vs. State-Processed • The finished end products are shipped from the processor to the state-contracted warehouse and are offered to participating agencies along with the “brown-box USDA Foods. • Handouts: • School Year 2014-15 State-Processed USDA Foods • School Year 2014-15 Nutrition Fact Sheet Information • School Year 2014-15 Processed Product Cost Analysis

  19. III. Timelines • A. Annual USDA Foods Order Timelines • Mid to Late February 2014: Annual USDA Foods Order information packets are sent to participating agencies. • March 10, 2014 – April 8, 2014: Dates that participating agencies will need to complete their annual USDA Foods order via the internet. • April 8, 2014: Deadline for ordering USDA Foods for the following school year. • April 9 – April 18, 2014: DPI works with cumulative orders to create truck loads at a state level. • Late April 2014: DPI places all USDA Foods orders with USDA for the following school year. • Handouts: • Annual USDA Foods Order Timelines • USDA Foods Program Timelines for Schools

  20. III. Timelines • B. Commercial Distribution of USDA Foods • Commercial Distribution of USDA Foods is a delivery option for participating agencies who choose to have their USDA Foods delivered by a commercial distributor, rather than the state-contracted, once-per-month delivery. • Participation in commercial distribution is optional and is an annual commitment. • Agencies participating in commercial distribution are responsible for procuring a commercial distributor following federal, state and local procurement regulations.

  21. III. Timelines • B. Commercial Distribution of USDA Foods • Only one commercial distributor may be selected by participating agencies. • Participating agencies are responsible for negotiating and paying all costs associated with commercial distribution of USDA Foods directly with the commercial distributor. • Information regarding Commercial Distribution was mailed out to all participating agencies at the beginning of November 2013.

  22. III. Timelines • B. Commercial Distribution of USDA Foods • Deadline for participation: April 30, 2014 is the deadline for agencies to participate for School Year 2014-15. • In order to participate for School Year 2014-15, the following 3 steps must be completed by the April 30, 2014 deadline: • Sign and submit back to DPI the DPI/School Food Authority agreement. • Following procurement regulations, sign a contract with the one commercial distributor selected by the agency. • Access the DPI USDA Foods Ordering System and designate which commercial distributor has been selected for School Year 2014-15 (Program Year 2015). Handout: • Commercial Distribution of USDA Foods Questions and Answers

  23. III. Timelines • C. Direct Diversion Processing • Direct diversion is a processing option where participating agencies choose raw, bulk USDA Foods and indicate the number of pounds and which processor(s) to divert each bulk USDA Foods to on behalf of their agency. • Participation in direct diversion processing is optional. Agencies not participating in this option can still order and receive the state-processed products. • Annually, each participating agency selects which processing option during the annual USDA Foods order.

  24. III. Timelines • C. Direct Diversion Processing • Regardless of which processing option is selected, all participating agencies have access to the same brown-box USDA Foods. • Participating agencies must competitively procure the products received through direct diversion processing. Therefore, if procurement hasn’t already been started, it is too late to choose this option for School Year 2014-15. Handout: • Direct Diversion Questions, Answers and Examples

  25. IV. Preparing for the Annual Order • A. Planning Ahead • Prior to placing the annual USDA Foods order, plan which products to order, how much and when. • Place the Annual USDA Foods Order via the internet from March 10, 2014 - April 8, 2014. • During the annual order period, make sure to double check what has been requested on the annual order. Once placed, the annual USDA Foods order can not be modified.

  26. IV. Preparing for the Annual Order • B. Key Information Regarding the Annual USDA Foods Order • Based on current crop capacity for canned peaches, pears, and mixed fruit, USDA is expecting reduced ordering capacity for these products for School Year 2014-15. Therefore, participating agencies will only be able to order a maximum of 8% of their original School Year 2014-15 yearly entitlement on peaches, pears, and mixed fruit. • In addition, please keep in mind that USDA does have limitations on the amount of all products available to purchase.

  27. IV. Preparing for the Annual Order • B. Key Information Regarding the Annual USDA Foods Order • Participating agencies are also encouraged to evenly distribute entitlement spending amongst all USDA Foods product categories. Spending all available entitlement in one product category may have a significant impact should delays and cancellations occur. Handout: Key Information Regarding School Year 2014-15 Wisconsin Annual USDA Foods Order Survey

  28. IV. Preparing for the Annual Order • C. Department of Defense (DoD) Fresh Produce Program • USDA and the DoD - Defense Supply Center Philadelphia (DSCP) have partnered together to increase the availability of fresh fruits and vegetables delivered directly to schools participating in the USDA Foods Program. For School Year 2013-14, schools in Wisconsin allocated $1.7 million USDA Foods entitlement to purchase fresh produce via the DoD Fresh Produce Program. Handout: DoD Fresh Fruit and Vegetable Program

  29. IV. Preparing for the Annual Order • C. DoD Fresh Produce Program • Advantages: • DoD extensive purchasing power. • Participating schools use of USDA Foods entitlement $. • Schools do not receive invoices as DoD handles the vendor payment. • Convenient online ordering system. • Schools may order weekly until funding is exhausted.

  30. IV. Preparing for the Annual Order • C. DoD Fresh Produce Program • The ordering and delivery of products through DoD is done completely separate from the monthly delivery of USDA Foods products and is not handled and received through the current state-contracted warehouses. • Currently, the long-term contract vendor is General Procurement Services (GPS). • Restrictions: Under USDA regulations, foreign products cannot be purchased with entitlement dollars.

  31. IV. Preparing for the Annual Order • C. DoD Fresh Produce Program • Every School Food Authority (SFA) electing to participate in the School Year 2014-15 DoD Fresh Produce Program must enter an entitlement commitment on their annual USDA Foods Order. A minimum allocation of $400 entitlement commitment must be entered on the annual USDA Foods Order.

  32. IV. Preparing for the Annual Order • DoD Fresh Produce Program - Allocation

  33. IV. Preparing for the Annual Order • C. DoD Program - Allocation • After September 1, SFA’s that allocated to DoD during the annual ordering period may begin to order fresh fruit and vegetable through FFAVORS. • Produce orders are placed through the DoD web-based Fresh Fruits and Vegetable Order Receipts System (FFAVORS).

  34. IV. Preparing for the Annual Order C. DoD Fresh Produce Program - Ordering • DoD will notify you once the FFAVORS account is activated. • And once your FFAVORS account is active, your entitlement dollar commitments will be entered into your FFAVORS account by DPI. • You are now ready to place your order.

  35. IV. Preparing for the Annual Order • C. DoD Fresh Produce Program • Procurement and Delivery: Produce is procured and delivered by General Procurement Services (GPS). • For every order placed through DoD using entitlement dollars, the bill is sent to and paid directly by USDA (i.e. you will not be invoiced for this produce).

  36. IV. Preparing for the Annual Order • D. Cheese Processing Program • Participating agencies use a competitive bid process to determine the processor(s) whom they will order finished end products from, as well as commit pounds of bulk mozzarella cheese to these chosen processor(s). • On the annual USDA Foods order, participating agencies enter the their pound commitment(s) to the processor(s). • Cheese processing program is available on the annual USDA Foods order through both processing options (state-processing & direct diversion processing).

  37. IV. Preparing for the Annual Order • D. Cheese Processing Program • Throughout School Year 2014-15, participating agencies order pizza and pizza-type products through their distributor(s). • Products received are eligible for a rebate for the amount of USDA Foods mozzarella cheese contained in each case of products. • Participating agencies complete a rebate request form and submit to the processor(s). • Rebate checks will be issued by processor and mailed directly to the agency. • Once participating agencies run out of bulk USDA Foods cheese committed to indicated processor(s), the agencies are no longer eligible for rebate on purchases.

  38. IV. Preparing for the Annual Order • D. Cheese Processing Program • When committing pounds, need to commit as close as possible to what will be used during the designated school year. • Most participating processors will allow the option to carry-over cheese inventory to the next school year. However, all participating agencies will be required to follow DPI’s Inventory Carryover Policy. • Informational packet includes information on calculating pounds of bulk mozzarella to commit to each desired processor. • Handout: Cheese Processing Program Informational Packet

  39. IV. Preparing for the Annual Order • D. Inventory Carryover Policy • Inventory can be carried over to the next school year. • However, carryover pounds from a prior school year must be drawn down by October 31st. • Any prior-year carryover pounds remaining after October 31st will be lost. • Handout: Direct Diversion Processing and Cheese Processing Inventory Carryover Policy

  40. IV. Preparing for the Annual Order • E. Tools • Menus and Production Records • Food Buying Guide • Processed Product Fact Sheets Other factors to keep in mind: 1. Order 103% of yearly annual entitlement • Modification for truck load balancing • Potential for cancelled shipments 2. Needs row versus Extra Rows 3. Availability of products per month (not all products are available for all months) Handout: Extra Rows

  41. IV. Preparing for the Annual Order • F. Worksheets Annual Usage Summary – worksheet to assist in determining yearly inventory usage Usage by Item – worksheet to determine total cases needed per year Final Order Summary – worksheet to record number of cases needed by product by month Handouts: Annual Usage Summary Usage by Item Final Order Summary

  42. V. Group Exercise • USDA Foods = 100307, canned green beans # Servings Used per time = 60 – ½ cup servings Times Menued per month = 4 Total Monthly Servings = 60 X 4 = 240 – ½ cup servings Servings per case = 19.75 – ½ cup/#10 can X 6 #10/case = 118.5 – ½ cup/case (from FB Guide) Cases Used per month = 240 – ½ cup ÷ 118.5 – ½ cup = 2.03 cases #Months Served per year = 9 Total Cases Needed = 2.03 cases X 9 = 18.27 cases or 19 casestotal

  43. V. Group Exercise • USDA Foods = C530, chicken nuggets, whole grain # Servings Used per time = 95 – 2 oz. servings (5 nuggets per serving) Times Menued per month = 8 Total Monthly Servings = 95 X 8 = 760 – 2 oz. servings Servings per case = 156 – 2 oz. servings (from processed fact sheet) Cases Used per month = 760 – 2 oz. ÷ 156 – 2 oz./case = 4.9 cases #Months Served per year = 9 Total Cases Needed = 4.9 cases/month X 9 = 44.1 cases or 45 cases total Handout: Example for Usage Summary

  44. VI. Demo of USDA Foods On-line Order System Handouts: • USDA Foods Order System Instruction Manual • Survey Instruction Cheat Sheet • Survey Print Screens

  45. VII. Additional USDA Foods Ordering Opportunities Periodically, as additional products or USDA funds become available, USDA may offer additional USDA Foods beyond those ordered during the annual order time-frame. Depending on the timing and situation, these additional USDA Foods may be offered out by one of the following methods: • Fair-Share Allocations • Surplus Screen • Additional Order Surveys

  46. Fair-Share Allocations • USDA has availability of a specific USDA Food and the USDA Food has to be ordered without sufficient time to request input from participating agencies. • In these cases, the USDA Food is ordered by the USDA Foods Section to be delivered to the state-contracted warehouses. Once the USDA Food arrives into the state-contracted warehouses, these products are offered out to agencies through a fair-share allocation.

  47. Fair-Share Allocations • Typically, these products will be “bonus” USDA Foods. • Occasionally, USDA may offer a new USDA Food. If this is the case, DPI may allocate a product that is an “entitlement” USDA Food. • The “entitlement” USDA Food will only be allocated to your agency, if your agency has entitlement dollars left to spend.

  48. Fair-Share Allocation • Fair-share allocations may or may not be offered each month. Therefore, participating agencies will need to access the system from the 3rd-10th of each month to check for fair-share allocation availability. • Products requested from a fair-share allocation, during the 3rd-10th, will be delivered the following month. • In addition, the USDA Foods Section sends out email notifications to the primary contact listed in the Wisconsin USDA Foods Ordering System when Fair-Share USDA Foods products are available.

  49. Surplus Requests • Products remaining in inventory at the state-contracted warehouses are available to participating agencies through the surplus request screen. • Inventory in surplus will be one of the following: • Bonus • Entitlement • Entitlement No Charge

  50. Surplus Requests • Bonus – these are products that USDA labeled as bonus USDA Foods. Therefore, the entitlement value/case will not be subtracted from your available yearly entitlement allotment. • Entitlement – the entitlement value/case listed will be subtracted from your available yearly entitlement allotment. • Entitlement No Charge – These are products that were originally received into the state as an entitlement USDA Food, but the state has determined that the product will be available at no entitlement charge. Therefore, the entitlement value/case will not be subtracted from your available yearly entitlement allotment. • Please note: regardless of the entitlement drawdown, all applicable handling fees will be assessed for all surplus requests.

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