MARKETING SERVICES

• Virginia received over $119,000 from USDA on behalf of public schools to recover reimbursable costs to recall and destroy Hallmark/Westland Beef products.  Virginia public schools with valid claims were paid by electronic transfer starting last June.  The destruction records, supporting claims and documentation you provided will be used by USDA in legal actions against this company.  The raw beef value in the cases destroyed has been credited to Virginia for use by schools in SY 2008-09.

• Pierre Foods Company has filed for Chapter 11 bankruptcy reorganization.  USDA has assured us that Pierre has a letter of credit and sufficient insurance in place to protect schools for beef and pork commodity diversions being made into finished products for the 2008-09 school year. 

• The initial estimated commodity assistance rate is .2075 cents per meal for SY 2008-09 based on Bureau of Labor statistics and the Producer Price Index.  The actual commodity assistance rate will set by congress and published in the Federal Register.

• Remember, except for delivery region 7; IJ Foodservice, our commodity distribution contracts allow distributors to charge a 20 case minimum drop. If you ask for less than 20 cases per drop you can be billed as if 20 cases were delivered. 

• Processors of USDA foods are now required to ship no less than 50 cases of the same finished product per load. Distributor warehouse slots are no longer sufficient to receive, store and distribute all the new product samples. If public school districts need processor samples, ask your broker to ship/mail them directly to you.

• Schools should use USDA foods within six months of arrival. Except for delivery region 7; IJ Foodservice) our commodity distribution contracts now allow distributors to double storage fees per case after six months of storage. USDA foods remaining in distributor storage longer than 12 months may be transferred by our office to other schools that can more readily use them.

• It was a confusing transition to twelve months of cheese orders extended over two school years.  We expect second half SY 2009-10 cheese products plus first half SY 2010-11 cheese products to be offered via ECOS in January or February 2009. 

• Some mozzarella cheese orders will be delayed for diversion to processors if their on hand stocks were excessive. So far it appears more timely mozzarella cheese purchases are taking place.

• USDA is reducing sodium content in canned tomato and bean products for delivery in SY 2008-09 to 140 mg per serving.  The remaining canned vegetables should match this level in SY 2009-10.  

• Commodity prices are expected to remain high for SY 2008-09 food orders because fuel and transportation costs have remained high.  The current Farm Bill provided a significant increase in bonus fruits and vegetables for delivery in SY 2008-09.

• Please let us know if you are experiencing any reoccurring delivery problems from your USDA foods distributor. You can review a copy of our contract for distribution of USDA commodities general terms by visiting our Forms page or download a copy for reference.

• USDA is developing a new computer system currently entitled Web Based Supply Chain Management (WEBSCM) that is expected to be implemented either in late 2009 or sometime in 2010.  It will provide more timely information via menu screens and reports similar to the Electronic Commodity Ordering System (ECOS).  Virginia is again on the team that will guide the development and implementation of WEBSCM at state and recipient agency (school) levels.  WEBSCM will completely replace ECOS when fully implemented.  More information will be provided as it firms up.

• The Virginia Department of Education has again provided funds to defray a portion of the SY 2008-09 delivery fees on behalf of schools in Virginia. Contract distributors of USDA commodities will be crediting delivery and storage fees to Virginia schools during school year 2008-09 until these funds run out.  Contact your Regional Commodity Manager if you believe you did not receive a credit from your USDA food distributor.