A new survey of school meal program operators finds many are struggling with higher costs, shrinking revenue and challenges with product availability and student acceptance under new nutrition standards for school meals.

During School Nutrition Association (SNA) Annual National Conference in Boston in July, SNA had surveyed director-level attendees to identify school nutrition trends for the upcoming school year, netting responses from directors in 240 districts across 46 states. The survey identified difficulties many school meal programs have encountered since new mandates first took effect in 2012.

“School nutrition professionals are committed to improving school menus and encouraging students to make healthier choices,” says SNA President Julia Bauscher, SNS. “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 shows 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 SNA survey results indicate many school meal programs struggled with decreased revenue and increased costs last school year. Among the findings...

• 46% of respondents reported that their overall program revenue decreased last school year, with only 21.5% reporting an increase in revenue;
• 87% of districts reported an increase in food costs;
• 85% of directors predict increased food costs for the 2014-15 school year and a large majority anticipates increased labor and supply costs:
• 43% expect declines in overall program revenue;
• 59% anticipate a decrease in a la carte revenue under the new Smart Snacks in School rule, with 29% anticipating a “strong decrease.”

The forecast is bleaker for the 72% of programs not eligible for or planning to participate in the new Community Eligibility Provision (CEP), available nationwide starting this year. CEP allows high poverty schools to offer free meals to all students regardless of family income and without an application. For 2014-15, more than half of non-CEP districts anticipate a decline in revenue verses the 18.5% of CEP districts that expect shrinking revenue.

Persistent revenue declines and rising costs threaten the financial stability of many school meal programs. The Fiscal Year 2015 House Agriculture Appropriations Bill proposes a temporary one-year waiver of the new standards for school meal programs operating at a net loss for six months or more and 22.5% of respondents reported their programs are eligible for the proposed one-year waiver. Another 12% were unsure if their programs would be eligible while 22.7% of respondents indicated they would be interested in applying for the waiver.

Survey respondents also reported significant increases in plate waste and challenges with the cost of foods that meet the new standards, including the 2014 mandates that all grains must be whole grain rich and that each breakfast offer a full cup of fruit/vegetable. A large majority (81%) report an increase in the amount of food being thrown away by students at lunch with vegetables being most frequently identified as causing the increase in plate waste. More than 60% anticipate whole grain rich mandates will increase their average cost of preparing school meals in this year while 87% anticipate the breakfast mandate will increase the cost of preparing a breakfast, indicating an average cost increase of approximately 14 cents per breakfast.

Although food companies are introducing new items that meet whole grain rich and sodium reduction mandates, respondents report that procurement of acceptable foods that meet standards is still a challenge. More than 60% anticipate procurement of acceptable lower sodium and whole grain rich products will be a challenge this year, when new sodium targets and whole grain mandates take effect.

SNA says it supports most of the new nutrition standards, but is requesting some flexibility under the rules to help students adjust to changes in the cafeteria, increase the number of children participating in the school lunch program and keep school meal programs financially stable.  Specifically, SNA has asked USDA and Congress to...
• Maintain the 2012 requirement that 50% of grains served be whole grain rich, instead of pushing forward new mandates for 100%'
• Maintain Target 1 sodium levels, and suspend further reductions until scientific research supports them;
• To avoid food waste, offer, but do not require students to take a fruit or vegetable; and
• Allow healthy items permitted on the meal line to be sold a la carte as well.