The discussion on the cost of hunger continues in this MinnPost article - What's the cost of letting the poor go hungry?
December 2011 Archives
Dr. Ben Senauer discusses the large increases in enrollment in the National School Lunch Program in this New York Times article from November 29th.
We've been hearing a lot about school lunches the past few weeks. In late November, congress blocked a proposed rule from the USDA that said the ⅛ cup of tomato paste on a slice of pizza could not be counted as a serving of vegetables in school lunches (Star Tribune). The controversial ruling has sparked interest across the United States in the National School Lunch Program (NSLP) and what children are eating. We wanted to take a look at research addressing the financial challenges for school districts around the country to provide an affordable, balanced, and healthy school lunch. It has become a particularly pertinent issue as the number of students receiving free or reduced price lunches has increased 17% over the last year, causing schools to rely more and more on the NSLP.
In the recently published article A Rotten Deal For Schools in the journal Food Policy, Cora Peterson evaluates the program's in-kind commodity food benefit. The way the NSLP works is schools get both cash and food to help fund their school lunch program. The national program also gives each state $0.225 worth of commodity food for every meal served in the 2011-2012 school year (National School Lunch Program). However, due to changes in the number of meals served, food prices, supply and other issues, Peterson found the in-kind commodity funding from 2001 to 2009 to be inconsistent. Some years states would receive too much, other years they would not receive enough. Bonus foods almost always made up for the difference but schools do not know when or how much in bonus foods they will get. Not knowing what food they are getting or when they are getting it is a barrier for districts trying to improve the quality and nutrition of their meals.
Not only has the in-kind commodity program been inconsistent, the cash receipts are not enough. In Adequacy of Federal School Lunch Reimbursement Adjustments published in the magazine Choices in October 2009, Ben Senauer and Koel Ghosh talk about how the reimbursement rates from the NSLP have not kept up with the increase in the price of food. The funding each year is tied to the Consumer Price Index (CPI) for food away from home, but 88% of that rate in 2008 was determined from restaurants whose food costs are only about 30% of their budget. For a typical school lunch program the food costs are 37% of the budget and thus the rate does not accurately reflect how much more it costs to provide a school lunch when food prices rise. The study focused on using data available in Minnesota and California and found that in Minnesota the cost per school lunch increased 31.78% from the 2001-2002 school year to 2007-2008 school year while federal funding only increased 22.28%.
Working to improve these issues is an important step in improving the inefficiencies of the National School Lunch Program. Peterson suggests doing away with the in-kind commodity program completely and switching to cash receipts only. She argues that this will not change the demand for commodity foods but will allow schools more freedom to choose what they want and cut out transportation costs. Senauer and Ghosh recommend creating a new CPI for elementary and secondary school lunches, surveying only the top performers to avoid compensating for poorly managed programs.
TFIC Director Michael Boland shares his expertise of international agriculture in Farewell to Argentina's Famed Beef.
On November 8th, The Food Industry Center hosted Mike Erlandson and Katie McComb from SUPERVALU Inc, for the season's first "Food Industry Leader in the Classroom" event. Erlandson, the Vice President of Government Affairs at SUPERVALU and McComb, a Category Merchandiser, were invited to speak on their work with the company and in the industry before a group of students, faculty, and public participants. SUPERVALU is one of the country's largest retail grocers with estimated sales of $41 billion and operating over 2200 stores.
Their conversation focused on variety of industry topics that included the future of the neighborhood grocery store, the challenges that come with competing against big market retailers like Target and Walmart, and strategies for merchandising products. A 2006 study suggested that prices are 17%-23% lower at Walmart for national brand products and 8%-14% lower for private label brands than competing and comparison stores (Volpe and Lavoie 2006). SUPERVALU is focusing on supplying high quality produce and meats to get people in the door along with taking a holistic approach to looking at the customer. A recent Wall Street Journal article cited a SUPERVALU consumer survey that revealed 92% of customers said fresh produce was the top priority in choosing a grocery store. Due to popularity and higher margins for fresh foods, traditional grocery store formats are moving produce sections to the front of the store, and packaged food companies are fighting to get their products up front with the produce. Another method of distinction for traditional grocery stores is offering different products at different stores based on the neighborhood instead of a one size fits all model.
SUPERVALU has also embraced technology with a new iPhone/Android app where customers can make grocery lists and see the weekly ads for their Cub grocery stores. Erlandson said that grocery stores operate on 1%-2% margins so it is especially important for stores to keep themselves on the frontier of new technology and ideas. One of those ideas is being implemented by Ahold USA in some of their Stop & Shop stores, allowing customers to scan barcodes to look for coupons as they shop. The application connects with the customers loyalty card and provides recommendations and information on discounts. It has the potential to cutback on labor costs in supermarkets as well, which is 12%-15% of a grocery store's expenses (Wall Street Journal). These mobile technologies are especially important as a recent study from the Pew Internet and American Life project revealed that 42% of people with cellphones, or 35% of adults in the United States use a smartphone (Pew Internet).