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Cookie Palmer, nutrition services director for Hall County schools, explains why school lunch programs depend on federal subsidies.Just as soaring food prices and stagnant incomes have put the squeeze on family budgets, many of Georgia’s school systems are in a similar bind.
But schools have less ability to adapt. A poor family can, if necessary, subsist on nothing but beans and Ramen noodles. But public schools have to meet strict federal nutrition guidelines, incorporating all of the major food groups into each meal.
"It’s been tough. You have to be creative with your menus," said June Poulsen, nutrition manager for Gainesville City schools, which has an enrollment of about 6,000 students. "The healthier food items do often cost more."
In just a few weeks, nutrition managers will be calculating their food service budgets for the 2008-2009 school year. They have no way of predicting how much higher food prices will rise, yet they must decide how much money they’ll need for the entire year.
"It’s really a best guess," said Cookie Palmer, nutrition services director for Hall County schools, which serves about 25,200 students. "We try to put some cushion in if we can."
Last year, Palmer gambled and won. "We were in a somewhat similar situation last year with gas prices," she said. "When we set our budget, we allowed space for growth."
Hall’s food service budget for this year is $15.6 million, compared to $13.7 million last year.
Palmer said the Hall system has been able to stay within its food budget so far without making cutbacks. "But thank goodness we only have one month left (in the school year)," she said.
The Gainesville system isn’t faring quite as well.
"It’s a hard thing now. We’ve had a lot of (price) increases, especially with bread and milk," Poulsen said. "This year we’re just absorbing the costs. We’re putting off buying equipment in order to buy food."
And the lunch counter may look slightly different these days. "We’re still buying fresh fruit, but maybe putting it on the menu only once a week instead of three times a week," Poulsen said.
"And we’re making the most of commodities (surplus food from the federal government). If parents say they want more fresh fruit (served), but you have cases and cases of canned fruit, what are you going to do?"
School systems do have an advantage over ordinary consumers. They can purchase their food from vendors through a bidding process, so if they find a good deal, they can lock in that price for a certain length of time.
"Our bread (cost) has not gone up, because it’s on a bid for the year," said Palmer. "But produce is bid on a weekly basis."
She said she’s saving money by only buying produce that’s in season.
Poulsen said many of the vendors are facing their own financial issues and don’t want to commit to a long-term guaranteed price.
"Most suppliers don’t want to set a contract for longer than six months because their fuel costs are rising so fast," she said.Vendors are warning that the days of low prices are over.
"I’m really dreading the budget process. We’ve done fairly well this year, but our vendors have told us to expect a 15 percent increase next year," said Sheryl Fletcher, food services director for White County Schools, which has about 3,800 students.
Nutrition programs are usually self-sustaining and do not draw any money from a school system’s general fund. One of their largest sources of revenue is the federal government. Students from low-income families are eligible to get lunches and breakfasts free or at a reduced cost.
In the Hall system, about 50 percent of students are in the federal program. Gainesville’s rate is even higher, at more than 70 percent. That means a lot of families are living in poverty. But ironically, it’s good for the schools’ bottom line.
Palmer said the federal subsidies are their most reliable source of income. She said the government pays $2.47 per meal for each student who gets a free lunch. But when a high-school student buys their own lunch in the cafeteria, the school earns only $1.73.
Schools with a smaller percentage of students getting free or reduced-cost lunch have to come up with other sources of revenue.
"We have only three ways to bring in extra income," said Fletcher in White County, where about 45 percent of students are in the federal program. "We can increase participation (in buying lunches), increase prices or sell more a la carte items."
Increasing the price of a lunch can be counterproductive. There’s a risk that people will just quit buying from the cafeteria, and revenue will go down further.
Also, for many children, the meals they get in school are the most nutritious food they’ll eat all day. Fletcher doesn’t want to discourage families from participating.
"You hate to pass any more expenses on to parents, who are already struggling," she said.
Fletcher said many White County families don’t qualify for free lunches even though they’re going through hard times. "The government only looks at their gross income," she said. "It doesn’t take into account their expenses, the fact that they’re having to spend more on gas and everything else. So an increase in lunch prices can really hurt them."
Palmer said when lunch prices go up, it cuts participation by about 10 percent.
She said any price increase would have to be approved by the local school board. "(In Hall County) at this point, we don’t anticipate having to ask for an increase," Palmer said.
Luckily, public schools have a source of "free" food. They get an allotment of commodities from the U.S. Department of Agriculture.
In the old days, the USDA had a reputation for "dumping" anything it had too much of on the schools. If there was an excess supply of cheese, for example, school nutrition managers were sent huge shipments of cheese and had to figure out how to use it in their menus.
But then the school lunch program was criticized for serving foods that were too high in fat and sodium. New nutritional guidelines were written. And now, food service managers are able to order what they want.
"We have a set amount of commodity dollars available," said Palmer. "It’s paid in the form of food and no money actually changes hands. I like to spend mine on high-quality protein. But next year, our commodity dollars won’t go as far."
That’s because prices of foods such as meat, milk, eggs and grains have skyrocketed. And no one knows how much more food prices will go up over the next 12 months.
"I really don’t know what I’m going to do for next year to project an increase (in the budget)," said Palmer. "My two biggest expenditures are labor and food. If we have excess expenses, we can cut back on other areas, such as travel, maintenance, uniforms and training."
Fletcher said she’s already had to cut lunchroom staff and reduce work hours.
"We’ve actually shown a profit for the last seven years, but I don’t anticipate having a profit this year. We hope we can at least break even," she said.
But Fletcher is postponing some expenditures until she can figure out how much she’s going to be paying for food.
"There are some things we’d like to do that we’ve put off, like replacing the freezer at our primary school."
She said the current freezer runs fine, but it’s too small. Getting a new one will cost $30,000 to $40,000.
Fletcher has tried to boost revenue by selling more a la carte items, foods such as desserts that aren’t on the regular lunch menu. But her efforts have been thwarted by the federal nutrition guidelines.
"Sales are down because we’ve had to offer healthier choices, and the kids would rather buy something from the convenience store or the fast-food place," she said.
Poulsen said schools face a dilemma, because if they sell junk food, they won’t get money from the free-lunch program.
"We have a high standard for what we put out there for our students," she said. "If we don’t meet the federal guidelines, we don’t get reimbursed."