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commonwealth of pennsylvania department of agriculture bureau of food distribution

2. The Bureau

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commonwealth of pennsylvania department of agriculture bureau of food distribution

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    1. 1

    2. 2 The Bureau’s Goals: Provide our customers with: Efficient access to USDA commodity; Greatest variety of “finished/process” items; with Limited Bureaucracy; while Maintaining program integrity

    3. 3 Pennsylvania’sCommodity ProgramFacts and Figures 925 schools Planned Assistance Level: $35+ million Plus Bonus Use commercial distributors for USDA “brown box” delivery Four (4) distributors serve eight (8) regions Weighted average cost per case: $2.78

    4. 4 NSLP Participation[Approx. 2.1 million Enrollment]

    5. 5 Recent History

    6. 6 Value Pass Through Systems in PA Fee For Service (chicken; beef; cheese; turkey) Net Sales (i.e. flours used in breads where processor sells net value of USDA commodity) Indirect sale (product purchased from commercial distributor w/rebate form submitted to processor Electronic Rebates (modification of above) Net Off Invoice( product purchased from commercial distributor “net” value commodity)

    7. 7 Diversion Percentages by Commodity

    8. 8 # of Schools Diverting by Item

    9. 9 Sales Verification for NOI and Other VPT Systems Beginning with the 05-06 Program year Pennsylvania no longer require Processors to complete “sales verifications” under 250:19 of USDA regs; BFD is doing “sales verifications” using its (9) field staff.

    10. 10 The Anticipated Impact of Pennsylvania doing its own Sales Verification: Happier Processors Less Frustrated Brokers More processors and more variety of options for school food service directors.

    11. 11 Commodity Distribution and Salesof USDA Commodity Processing Malissa Marsden mmarsden@awgfood.com 1-815-751-7445

    12. 12 Knowledgeable Expert A necessity for school nutrition sales A requirement for commodity processing Not just products for sale Long term contracts = long term commitments

    13. 13 Knowledgeable Main Definition: knowlˇedgeˇable Pronunciation: 'nä-lij-&-b&lFunction: adjective: having or showing knowledge or intelligence - knowlˇedgeˇabilˇiˇty /"nä-li-j&-'bi-l&-tE/ noun - knowlˇedgeˇableˇness noun - knowlˇedgeˇably /-blE/ adverb

    14. 14 Expert exˇpert (ek'spűrt') n. A person with a high degree of skill in or knowledge of a certain subject. The highest grade that can be achieved in marksmanship. A person who has achieved this grade. adj. (ek'spűrt, ik-spűrt') Having, involving, or demonstrating great skill, dexterity, or knowledge as the result of experience or training.

    15. 15 Our Role To be the link in communication between all parties: customers, the manufacturer’s, the distributors and the State DA’s To provide manufacturers with accurate forecasts and customer information To provide distribution with accurate forecasts and customer information To provide the customer with accurate and realistic distribution time lines

    16. 16 Responsibilities To educate the School Nutrition Specialists, Superintendents or Business Managers on the Overview of the commodity program and its value to their district To know all the state requirements, order deadlines and forms of commodity processing allowed as well as all Federal Requirements To communicate State and Federal requirements to all participating Distributors and RA’s To document all sales and retain records

    17. 17 USDA - NOI Program Distributors Role Understand USDA NOI requirements Understand differences in state regulation Identify how each vendor deals with commodities Offer a balanced “commodity” product offering Respond to Commodity Bids Communicate bid award information on a timely basis R/A’s - Brokers - Processors - CDC’s

    18. 18 Distributing Commodities from a Distributors Perspective Mark Morrison mmorrison@gfs.com ACDA - 2007

    19. 19 USDA - NOI Program Ensure appropriate customer pricing Maintain appropriate product inventory Provide NOI detail on customer invoice Provide invoice transaction detail to CDC’s Provide customer centric ordering and tracking system Assist customers with the utilization of commodity balances Assist customers with proper future allocation planning

    20. 20 Distributing Commodities from an RA Perspective Julie Lewis, SNS Mesa USD – Arizona jclewis@mpsaz.org ACDA ANC - 2007

    21. 21 Types of Transactions Brown Box Commodities. Distributor bills the district for the negotiated fees for storage, handling, and delivery for “brown box” commodity foods delivered to their facility on behalf of the school district. State and/or coop bills RA for assessed admin fees by the SDA. Processed Commodities - Modified Fee for Service. Distributor acts as the processor’s billing agent and invoices the RA a per pound or per case price excluding the value of the commodity plus distribution fees. Processed Commodities – Automatic Rebates. Distributor sells processed commodities at the commercial price to RAs and electronically reports sales to processor for automatic rebates for the value of commodities Processed Commodities – Net Off Invoice. Distributor sells processed commodities at the commercial price to RAs and discounts the value of commodity ingredients contained in the case, provided that the RA has commodities “in the bank”. Modified FFS – Invoice methods: 1-RA is invoiced directly by processor and directly from the distributor. (Two separate invoices) 2-RA is invoiced for the FFS and the delivery charges by the processor with each item listed individually. 3-RA is invoiced at the total case cost under provision FD-025 in March 2004.Modified FFS – Invoice methods: 1-RA is invoiced directly by processor and directly from the distributor. (Two separate invoices) 2-RA is invoiced for the FFS and the delivery charges by the processor with each item listed individually. 3-RA is invoiced at the total case cost under provision FD-025 in March 2004.

    22. 22 Distributor Agreements Procure products and services formally. Negotiate. Address the following terms and conditions in the contract: NOI Billing System Commodity Tracking System Term of Contract and Contract Renewals Costs and Cost Definitions Price Changes Fuel Surcharges Delivery Requirements and Minimum Orders Lead Times Public Liability and Property Insurance HAACP Program - pest control and sanitation Food Security & Safety program Disaster Contingency Plan

    23. 23 Expectations of Distributors Complete Orders Timely Deliveries Stocks SKU’s Regularly Fair Prices “Outstanding” Customer Service Commitment to Child Nutrition Programs

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