School foodservice revenue struggles to continue

Latest survey from SNA reveals many districts fear consequences of new nutrition mandates.

The financial stability of many school meal programs across the U.S. is being threatened by the double whammy of increases in food costs and decreases in revenue, according to the annual survey of school foodservice directors conducted at the Annual National Conference of the School Nutrition Association (SNA).

The survey of 240 directors from 46 states, released Monday, revealed that 87% saw food prices rise in the 2013-2014 school year, and 85% predicted increased food costs in the coming year. More ominously, 46% reported a decline in revenue last year and 43% expect a drop in sales in 2014-2015.

Although food prices are an effect of outside forces, the revenue losses are a direct result of changes to meal programs under the Healthy, Hunger-Free Kids Act, SNA says.

“School nutrition professionals are committed to improving school menus and encouraging students to make healthier choices,” said SNA President Julia Bauscher. “We support most of the new nutrition standards, but some of the regulations have had unintended consequences to the detriment of school meal programs and the goal of promoting healthier diets for all students. USDA statistics prove student lunch participation under the new standards is down in 49 states with over a million fewer students choosing school lunch each day. Now, SNA’s new data show how these regulations are impacting the bottom line in schools nationwide. These challenges are real, and they threaten the sustainability of school meal programs while hindering efforts to make further menu improvements.”

The situation is even more dire for districts that are not eligible for the Community Eligibility Provision (CEP), which allows schools with high levels of free and reduced-price meal students to offer meals free of charge to all students. According to the survey, more than half of districts not participating in CEP expect a decline in revenue, versus only 18.5% of those in the program.

In addition to schools losing revenue as a result of decreased participation, 81% reported an increase in the amount of food being thrown away. Vegetables were most frequently identified as being responsible for the plate waste, a direct correlation to the new mandate that students must take fruits or vegetables at meals.

Other survey results included:

  • 59% said they expect a decrease in a la carte revenue under the new Smart Snacks in School rule, and 29 said they anticipate a strong decrease;
  • 22.5% of respondents said their program would be eligible for a one-year waiver, proposed in the 2015 House Agriculture Appropriations Bill, that would be granted to any district operating at a net loss for six months or more;
  • 60% expect that the mandate that all grains must be whole grain rich will increase their average cost of prospering meals in 2014-2015; and
  • 87% said they expect the new mandate that schools must offer a full cup of fruits or vegetables at breakfast will raise the cost of preparing breakfast, with an average increase of 14 cents.

SNA has asked the USDA to take several steps to ease the burden on districts, such as delaying the new grain requirement and holding off on new sodium restrictions “until scientific evidence supports them.”