Market Trends Affect Your School Food Costs

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Written by Milt Miller – I just read two reports on the market that could adversely affect the prices of two major staples in the school food industry: chicken/eggs and oranges. A report on chickens states that the drop in their numbers due to the bird flu, is predicted to raise the price of eggs and chicken drastically, due to availability and demand for next year. The second report states that the Florida orange crop yield is the lowest it has been in the last fifty (50) years. Florida orange growers are struggling to keep the millions of workers in the industry employed and also worried about meeting the demand for their products. Chicken products and eggs especially are starting to rise in price as I write. Orange prices will not be far behind.

These rising prices will cause a burden for school meals, as this is one of the few industries where cost increases cannot be passed to the end user. Availability of these products for USDA Commodities could also be affected leaving holes in commodity availability of these products to schools in the coming year. Directors and managers should be reviewing their menus now and making changes to balance these cost increases.

When I was a school food director I watched these product reports very closely to insure my menu costs stayed within the 35%-40% cost parameters I set. Costs too often outside these parameters could severely hamper the self-sustainability of my food service program. I watched the market reports at least weekly and talked to my distributors and local providers to keep pace with the rise and fall of costs. Menus were adjusted to reflect what was happening in the market to keep costs in line. Larger districts, buying consortiums, and FSMCs many times have the luxury of a procurement specialist that keeps tabs on these market fluxuations. This specialist then keeps the rest of the group informed as to what will or will not be available, at regular intervals. For operations without this specialized assistance, it is up to the director or manager to follow these trends.

I found myself, both seasonally and yearly, adjusting my menus to meet market shortages and trends. I was constantly reminding my receiving personnel to keep a constant vigil on the quality of products we received during down market times. I have always found a direct proportion between supply and quality. As supplies diminish and demand increases, quality diminishes proportionally to the drop in supply. I see this particularly in produce. As quality diminishes so do product yields, due to seconds and smaller, lesser-developed products being sold to meet demand, at the higher price. The only thing that increases proportionally with demand, in these times, is price. In situations like these, many times it is better to remove the item from the menu, rather than hurt quality and participation by serving an inferior product.

Be prepared to replace or reduce the use of poultry, egg products, and oranges on your menu due to product availability and costs. These items are main stays on school menus and will cause difficulties in creating menus that meet student preferences. Look for the most strategic and cost effective ways to utilize these items on your menu until this crisis passes and the market stabilizes. Keep a constant eye on the market and prices, and stay in touch with key distributors, who can assist you with more affordable alternatives and increased information on when the market is expected to stabilize again. Until then watch your menu and product costs.

Milt Miller is the Principal and Chief Innovator at Milton Miller Consulting. Throughout his 32 years in the food service industry he has managed, operated and assisted food service programs to become successful. For more information on this and other topics, contact Milt at; www.miltonmillerconsultant.com

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