USDA steps up dairy purchases; $437 mil. in new buys

Borden gets nearly half the ‘food box’ dairy total, most of the fluid milk buy

Farmers to Families Food Box

By Sherry Bunting

WASHINGTON, D.C. – USDA announced on May 8 it has awarded $317 million in dairy purchases as part of the new “Food Box” program. These purchases are separate from the flurry of new bid invitations that also appeared on the USDA AMS food procurement website Friday to fulfill the separate ramping up of $120 million in dairy purchases for “normal” distribution in July under “normal” USDA feeding channels.

Friday’s contracts for the Farmers to Families Food Box Program covered a total of $1.2 billion in first-batch purchases. In addition to the $317 million for dairy products, of which roughly half is for fluid milk purchases and half for dairy product boxes, the awards include $258 million in meat product purchases, $461 in fresh fruit and vegetable purchases and $175 million to vendors supplying “combination boxes.”

This first award announcement uses over one-third of the $3 billion set on April 17 by Ag Secretary Sonny Perdue for food box purchases as part of the overall $19.2 billion Coronavirus Food Assistance Program (CFAP).

In this unique program, USDA is partnering with national, regional and local suppliers — whose workforces have been significantly impacted by the closure of restaurants, hotels and other food service businesses.

The approved suppliers will package products into family-sized boxes, then transport them to food banks, community and faith-based organizations, and other non-profits serving Americans in need from May 15 through June 30, 2020.

The biggest winner across the board was Borden Dairy Co. with a total government contract of $147 million — all of it designated as fluid milk purchases — with $99 million for the Southeast region, $40.6 million Southwest and $7.3 million Midwest. This represents nearly half of the total $317 million in dairy purchases announced Friday as part of the food box program, and it constitutes the lion’s share of the fluid milk purchases awarded.

Prairie Farms Dairy cooperative based in Illinois was awarded the next largest dairy contract in the food box program at $27.3 million, with 90% of this for the Midwest region and 10% for multi-region distribution outside of the Midwest. The majority (80%) of the contract is identified as dairy products boxes and 20% for fluid milk purchases.

In The Northeast and Midatlantic regions: Schneider Dairy, Pittsburgh, Pa. was third highest dairy purchase award at $4.27 million, of which $4 million is for fluid milk purchases and the balance for dairy product boxes. Turner Dairy Farms, Penn Hills, Pa. was awarded $315,450 to supply dairy product boxes. Marburger Farm Dairy, Evans City, Pa. was awarded $78,000, with roughly 70% in fluid milk purchases and 30% in dairy product boxes. And HP Hood, Lynnfield, Mass. was awarded $11,000 in fluid milk purchases.

In addition, an array of wholesalers, foodservice distributors, aggregators, missions, common markets, farm-to-table organizations etc., were awarded contracts that included dairy product boxes, and to a lesser degree, fluid milk purchases.

For example, Philadelphia’s Common Market was awarded $5.76 million for use in the Midatlantic and Southeast regions, with almost $1 million of this earmarked for dairy product boxes in the Midatlantic region.

In using the balance of the $3 billion in CFAP food box funds, USDA Agricultural Marketing Service reports it may simply extend these contracts using “option” periods instead of the bid-solicitation process that is used for its other food purchases — depending upon the program’s success in this first go-round.

In addition to the “Farmer to Families Food Box” purchases Sec. Perdue announced a new and additional $470 million in “Section 32” food purchases for delivery to normal USDA feeding programs beginning in July – including $120 million in new spending for dairy products.

These supplemental Section 32 purchases use the normal USDA AMS bid procurement process with solicitations opening in the coming weeks for June approval.

“America’s farmers and ranchers have experienced a dislocated supply chain caused by the Coronavirus. USDA is in the unique position to purchase these foods and deliver them to the hungry Americans who need it most,” said Secretary Perdue in the announcement.

USDA AMS Section 32 purchases of domestically produced and processed agricultural products are ongoing, and USDA anticipates spending a total of $4.89 billion this fiscal year. The new fiscal year begins in July, and USDA says fourth quarter purchases will be determined by industry requests, market analysis and food bank needs.

Additional information on the Farmers to Families Food Box Program, including webinars and an FAQs, is available on the AMS website at www.ams.usda.gov/selling-food-to-usda/farmers-to-families-food-box.

Details on how vendors can participate in Section 32 food and dairy purchases are available at https://www.ams.usda.gov/selling-food

Dairy product specifications and quantities for bid solicitations are shown as they are announced at this website: https://www.ams.usda.gov/open-purchase-request/Dairy_Products%2C_Grades_&_Procurement_of

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