Schools Get A Lesson in Lunch Line Economics
Food Costs Unravel Nutrition Initiatives

By Maria Glod
Washington Post Staff Writer
Monday, April 14, 2008

New York students will have to settle for pizza without tasty turkey pepperoni topping. In Montgomery County schools, tomato slices were pulled for a few weeks from cafeteria salads in favor of less-expensive carrots or celery.

And in Davie County, N.C., Yoo-hoo drinks, which had been taken off the shelf in favor of healthier options, are back. Sure, officials would rather the kids chugged milk. But each Yoo-hoo sale brings in 36 cents of profit.

Sharp rises in the cost of milk, grain and fresh fruits and vegetables are hitting cafeterias across the country, forcing cash-strapped schools to raise prices or pinch pennies by serving more economical dishes. Some school officials on a mission to help fight childhood obesity say it's becoming harder to fill students' plates with healthy, low-fat foods.

Several Washington area school systems -- including those in Prince George's, Fairfax and Prince William counties and Alexandria -- are proposing to increase lunch prices next school year. For Prince George's schools, it would be the first increase in a decade.

For Montgomery schools, this year's dairy bill is expected to be about $600,000 more than last year. Officials expect to decide in June whether to seek an increase in meal prices.

Becky Domokos-Bays, director of food and nutrition for Alexandria schools, said schools need to raise prices to cover rising food and labor costs but worries that even small increases will strain middle-class families who don't qualify for a price break. The School Board approved a 10-cent increase for students who pay full price, raising the lunch price in elementary school to $2.15 and in middle and high schools to $2.45.

"There's a tipping point somewhere, and I think we're there," Domokos-Bays said. "I don't know how much more families can afford to pay."

School meal programs across the country are run somewhat like restaurants, relying on federal and state subsidies and profits from meal and snack sales and catering services to buy food and pay workers. Rising labor costs, coupled with the recent push for healthier meals, which has meant serving higher-priced foods such as whole grain breads and fresh vegetables, has squeezed budgets. Soaring food prices make it even harder to break even.

Miami-Dade County schools are on track to pay $4.5 million more for milk this year than last year, about a 47 percent increase. Penny Parham, administrative director of the schools' department of food and nutrition, came to Washington last month to urge federal lawmakers to raise subsidies.

"We do not want to serve our students highly refined sugar and flour products, which are more affordable," Parham told the House Education and Labor Committee, "but we are continually being pushed down this path."

Each year Uncle Sam, in an effort to ensure the neediest children get healthy meals, gives schools a little more cash to help feed students. But school officials nationwide say the federal share hasn't kept pace with rising costs. This year, the U.S. Agriculture Department is giving schools $2.47 per lunch to serve free meals to children from the poorest families, up from $2.40 last year, a 3 percent increase. In the same time, milk prices rose about 17 percent and bread nearly 12 percent.

The federal government provides $2.07 per meal for students eligible for a reduced-price lunch and 23 cents a meal for students who pay full price. Schools also receive some foods, including meat, cheese and canned goods, purchased by the federal government.

The average cost of preparing and serving a school lunch runs from about $2.70 to $3.10, according to the School Nutrition Association.

In some places, food service budgets are dipping into the red, requiring schools to use general funds that pay for such expenses as teacher salaries, computers and busing. The operating budgets that provide those general funds are also under heavy pressure because of lower state and local tax revenues. In Arlington County, the School Board kicked in about $150,000 to food services last year, and officials predict about the same will be needed this year.

Kathy Lazor, food and nutrition director for Montgomery schools, said she expects the extra dollars spent on milk will eat up about $200,000 in profit from last school year.

"We knew we were going to have a slight increase in milk . We didn't expect the 23 percent," she said. "We're going to more than likely come in with a slight loss this year."

The food service program in D.C. public schools lost $30 million in three years, partly because the system has not filed paperwork needed to get federal reimbursement for students receiving free and reduced-price meals. Schools Chancellor Michelle A. Rhee said she wants a private contractor to take over cafeterias and provide tastier and more nutritious meals.

School food chiefs across the country said they are cutting costs in much the same way that at-home chefs clip coupons and scan supermarket aisles for sales. They are seeking to keep healthy items on the menu but are increasingly picky about choosing the most economical options. Several said vendors have warned that prices will be even higher within months.

Fairfax schools, for instance, serve oranges -- 14 cents each -- instead of grapes, which are a quarter a serving. "We're all in the same boat," food and nutrition director Penny McConnell said. "When you go to the grocery store, you see your basket is filled up with fewer items and the bill is the same."

Schools are trying to boost profits by serving popular items that sell better. Richmond schools stopped offering seafood baskets, which cost schools 60 cents, because students weren't lining up for them. Students prefer chicken nuggets, which cost about a quarter a serving.

Tess Enright, 9, a third-grader at Montgomery's Rock View Elementary, is just the kind of customer schools seek. She studies the menu at home and decides whether to pack a sandwich or buy a school lunch. One afternoon last week, chicken nuggets and chocolate milk drew her into the lunch line.

"I can buy two times a week and bring three times," Enright said.

Cindy Hobbs, director of child nutrition services for Charlotte-Mecklenburg County schools in North Carolina, said she has swapped spaghetti for lasagna because she knows more students buy lunch on spaghetti day. Plus, she said, "you get a better price if you buy more of one product."

Small, rural districts, which don't serve enough meals to court competitive bids from suppliers, might be squeezed the most. The 12 schools in Davie County used to offer fresh fruit three or four times a week. Now it's twice weekly. To boost snack revenue, the schools returned a full-fat cookie to the snack line.

But big districts also are feeling the pinch. In the New York school system, the nation's largest, which serves 850,000 meals a day, the milk bill is up $3 million over last year, said Eric Goldstein, chief executive for school support services.

To help make up difference, the "vegetable medley will be less of a medley," he said. Sliced tomatoes have replaced their more expensive cousins, grape tomatoes, on the salad bar. Pizza topped with turkey pepperoni is served less often.

"We're seeing our food cost growing at a rate that is putting pressure on our budget. Increases in corn, wheat, milk -- it's really hitting us," Goldstein said. "We're having to be creative, but we're worried it's not sustainable."

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