USDA FOODS

1. USDA FOODS • NEW PROGRAM & NEW FOODSERVICE PERSONNEL TRAINING • DECEMBER 13, 2012 • 2:30 P.M. – 5:30 P.M.

2. Training • I. Opening and Introductions • II. Basic Overview • III. Annual Order Timelines • IV. Preparing for the Annual Order • V. Group Exercise • VI. Demo of Online USDA Foods Survey • VII. Additional 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 the 2013-14 school year.

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 Food 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. B. USDA Food 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. B. USDA Food 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. 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.

9. B. USDA Food 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.

10. B. USDA Food 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.

11. B. USDA Food 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. • 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.

12. B. USDA Food Distribution Frequently Asked Questions (Continued) USDA Foods Handling Charge Fees School Year 2012-13: 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 2012-13 Handling Charge Fees

13. 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.

14. 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 2013-14 Expected List of Brown-Box USDA Foods • School Year 2013-14 Entitlement Value Per Unit

15. C. Brown-Box vs. State-Processed(continued) • 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. Recipient agencies that order and receive the state-processed products are responsible for these costs. • The finished end products are shipped from the processor to the state-contracted warehouse and are offered to recipient agencies along with the “brown-box USDA Foods. • Handouts: • School Year 2013-14 State-Processed USDA Foods • School Year 2013-14 Nutrition Fact Sheet Information • School Year 2013-14 Processed Product Cost Analysis

16. III. Timelines • Annual USDA Foods Order Timelines (Tentative Dates) • Second week of January 2013: Annual USDA Foods Order information packets are sent to participating agencies. • February 4, 2013 – March 1, 2013: Dates that participating agencies will need to complete their annual USDA Foods order via the internet. • March 1, 2013: Deadline for ordering USDA Foods for the following school year. • March 4, 2013: DPI works with cumulative orders to create full truck loads at a state level. • Mid-March 2013: 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

17. III. Timelines • Commercial Distribution of USDA Foods • Commercial Distribution of USDA Foods is a delivery option for recipient 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. • Recipient agencies participating in commercial distribution are responsible for procuring a commercial distributor following federal, state and local procurement regulations.

18. III. Timelines • Commercial Distribution of USDA Foods • Only one commercial distributor may be selected by participating agencies. • Recipient 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 2012.

19. III. Timelines • Commercial Distribution of USDA Foods • Deadline for participation: March 29, 2013 is the deadline for agencies to participate for the 2013-14 school year. • In order to participate for SY 2013-14, the following 3 steps must be completed by the March 29, 2013 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 recipient agency. • Access the DPI USDA Foods Ordering System and designate which commercial distributor has been selected for the 2013-14 school year (Program Year 2014). • Handout: • Commercial Distribution of USDA Foods Questions and Answers

20. III. Timelines • 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.

21. III. Timelines • 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 SY 2013-14. • Handout: Direct Diversion Questions, Answers and Examples

22. 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 February 4, 2013 - March 1, 2013. (tentative date) • 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.

23. IV. Preparing for the Annual Order B. Key Information Regarding the Annual USDA Foods Order • In prior years, USDA implemented maximum spending caps by specific product categories (i.e. fruit/vegetables, beef/pork/fish, etc.) • USDA is no longer requiring spending according to these maximum spending caps. • Please keep in mind that USDA does have limitations on the amount of products available to purchase. • Participating agencies are encouraged to evenly distribute entitlement spending amongst al 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 the SY 2013-14 Wisconsin Annual USDA Foods Order Survey

24. IV. Preparing for the Annual Order C. DoD Program • USDA and the DoD - Defense Supply Center Philadelphia (DSCP) have partnered together to increase the availability of fresh fruits and vegetables. Through their extensive network of vendors, DoD DSCP allows for the distribution of a wide variety of fresh produce directly to schools. • Advantages of the DoD Fresh Produce program include greater buying power, consistent deliveries, emphasis on high quality, a large variety of produce items including pre-cuts and locally grown, and an easy-to-use ordering website with funds tracking. Handout: DoD Fresh Fruit and Vegetable Program

25. IV. Preparing for the Annual Order C. DoD Program • Every School Food Authority (SFA) electing to participate in the 2013-14 DoD Fresh Produce Program must enter an entitlement commitment on their Annual order/survey. A minimum allocation of $400 entitlement commitment must be entered on the annual order/survey. • DoD administers the program and produce orders are placed through the DoD web-based Fresh Fruits and Vegetable Order Receipts System (FFAVORS). Produce is procured and delivered by AJ Wholesale (based in Sheboygan).

26. IV. Preparing for the Annual Order C. DoD Program • Agencies participating in this program using entitlement dollars can continue to participate until they have expended the entitlement dollars committed to this program. • The ordering and delivery of products through DoD is done completely separate from the monthly delivery of USDA Food products and is not handled and received through the current state-contracted warehouses. • Currently, the long term contract vendor is AJ Wholesale in Sheboygan, WI and orders must be placed through the DoD internet-based Fresh Fruits and Vegetable Order Receipts System (FFAVORS). • Restrictions: Under USDA regulations, foreign products cannot be purchased with entitlement dollars.

27. IV. Preparing for the Annual Order • DoD Program - Allocation

28. IV. Preparing for the Annual Order C. DoD Program - Allocation • Once the the survey/ordering period is over, participating agencies entitlement dollar commitments will be entered into DoD’s web-based Fresh Fruits and Vegetable Order Receipts System (FFAVORS). • 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).

29. IV. Preparing for the Annual Order C. DoD Program – Ordering Account • Set up an eAuth account. • Once you have an eAuth account – set up a web-based Fresh Fruits and Vegetable Order Receipts System (FFAVORS) account.

30. IV. Preparing for the Annual Order C. DoD Program – FFAVORS account • Set up an eAuth account. • Once you have an eAuth account – set up a web-based Fresh Fruits and Vegetable Order Receipts System (FFAVORS) account.

31. IV. Preparing for the Annual Order C. DoD Program – FFAVORS account • 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.

32. IV. Preparing for the Annual Order C. DoD 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.

33. IV. Preparing for the Annual Order C. DoD Program - Delivery • MONDAYS – SOUTHWEST REGION TUESDAYS – NORTHWEST AND SOUTHEAST REGION WEDNESDAYS – NORTHEAST REGION

34. IV. Preparing for the Annual Order • DoD Program – Delivery • Orders must be placed a minimum of 3 business days before schedule delivery day. • Example: Oconomowoc SD (Tuesday Delivery) – must place order by previous Wednesday - leaving Thursday, Friday and Monday as the mandatory three business days.

35. IV. Preparing for the Annual Order • DoD Program – Summary • To participate: Enter entitlement commitment on the annual survey. A minimum allocation of $400 entitlement commitment must be entered on the annual order/survey. • Ordering: Place your produce order through FFAVORS ordering system. • Delivery: DoD contract vendor AJ Wholesale (Sheboygan) • 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 vendor(s) whom they will order finished end products from, as well as commit pounds of bulk mozzarella cheese to these chosen vendor(s). • On the annual USDA Foods order, participating agencies enter the their pound commitment(s) to the vendor(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 the 2013-14 school year, participating agencies order pizza and pizza-type products through the school’s 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 vendor(s). • Rebate checks will be issued by vendor and mailed directly to the school. • Once participating agencies run out of bulk USDA Foods cheese committed to indicated vendor(s), agency is 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 vendors 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 vendor. • 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 105% 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 = 22.65 – ½ cup/#10 can X 6 #10/case = 135.9 – ½ cup/case (from FB Guide) Cases Used per month = 240 – ½ cup ÷ 135.9 – ½ cup = 1.77 cases or 2 cases #Months Served per year = 9 Total Cases Needed = 2 cases X 9 = 18 casestotal

43. V. Group Exercise • USDA Foods = C522, chicken nuggets # 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 = 144 – 2 oz. servings (from processed fact sheet) Cases Used per month = 760 – 2 oz. ÷ 144 – 2 oz./case = 5.3 cases #Months Served per year = 9 Total Cases Needed = 5.3 cases/month X 9 = 47.7 cases or 48 cases total Handout: Example for Usage Summary

44. VI. Demo of USDA Foods On-line Order System Order 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 recipient 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.