USDA School Meal Programs: How and Why the Cost of Food Purchases Varies Across Locales

The United States Department of Agriculture’s (USDA) National School Lunch and School Breakfast Programs are operated locally by school food authorities (SFAs), usually a part of the local school district. SFAs are reimbursed at nationally set rates for the cost of meals served to participating students. Previous USDA, Economic Research Service (ERS) analysis found substantial variation in total costs across SFAs but did not identify the sources of those cost differences. This report examines food cost differences, using a large national sample of SFAs to examine how food purchase costs vary by SFA location, characteristics, and purchasing practices. Results show that food costs dropped with the volume of products purchased. Food costs also varied considerably across location—SFAs in the Northern Plains and Mountain regions had higher average food costs, and SFAs in the Southeast regions had the lowest food costs for major food groups. SFA purchasing practices also affected costs. Purchasing cooperatives, a popular strategy among SFAs, had mixed associations with food costs, possibly because SFAs may use them not only to reduce costs, but also for aims such as obtaining wider access to desired food products