The Department of Agriculture is providing $1.5 billion to the nation’s school meal program operators to help them deal with supply chain challenges that are driving up costs. 

Some $1 billion of that will go to states to distribute in cash payments. In a release, USDA said the money will “deliver direct relief from ongoing supply chain issues and improve the quality and consistency of school meals for children in communities experiencing disruptions, making it easier for schools to operate successful meal programs.”

“The food and funds USDA is distributing will help ensure schools have the resources they need to continue to serve our nation’s schoolchildren quality food they can depend on, all while building a stronger, fairer, and more competitive food system,” Ag Secretary Tom Vilsack said.

USDA expects the assistance  to reach up to 100,000 schools across all 50 states and various U.S. territories. The funding can be used to buy domestically produced foods that are unprocessed or minimally processed, including fresh fruit, milk, cheese, frozen vegetables and ground meat, USDA said.

States can use 10% of the money either for bulk purchases or for cash distributions based on student enrollment.

A new Local Food for Schools Cooperative Agreement Program will get $200 million for food purchases.

USDA also plans to spend $300 million on domestically grown and produced food products for states to distribute. USDA says it has identified a “large list of available products” and states “will be able to order these additional foods within the coming weeks.”

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USDA says the funding is being allocated by its Commodity Credit Corp., a revolving account that has been used to distribute everything from commodity payments authorized by the farm bill to ad hoc programs made as a result of the Trump administration’s trade war with China.

The School Nutrition Association noted its appreciation for the funding, with Lori Adkins, the group’s president-elect, pointing to a recent survey of school nutrition directors showing “virtually every program” is struggling with menu item shortages among other supply chain issues.

“School meal programs are paying much higher prices in the scramble to place additional orders and find new vendors when their deliveries are shorted, cancelled or delayed,” she said.

According to a state-by-state funding breakdown provided by USDA, California is set to receive the largest amount of money through the announcements at $171.4 million. Texas is the only other state to top $100 million and will receive $168.3 million.

The funding follows other steps taken to lessen pandemic pressure on school lunch programs, including the extension of some meal distribution waivers through the duration of the school year. Those flexibilities, announced in June, include allowing schools to provide free meals to all children.

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