United States Department of Agriculture (USDA)
Policy Regarding Use and Sale
of Commodities in Local Education Agencies

USDA has revised the Agency’s position on the use and sale of commodities by LEAs. The Agency’s policy will allow the LEAs to utilize commodities in the preparation and sale of foods for any school related functions where the primary beneficiaries of the food are the students themselves. Funds derived from the sale of these commodities must accrue to the nonprofit school food service account to be used solely to replace the commodities or to operate or improve the nonprofit school food service operation. The issue at hand is not whether the foods containing commodities are being sold at a profitJuly 17, 2008ity products are being put to the use for which they are intended, and being consumed by the people for whom they are intended.

Examples of acceptable use of commodities are:

Repackaging and selling commodity peanuts in the a la carte sales line.

Serving commodity beef patties at a football banquet. The cost of all meals would be covered from sources other than the nonprofit food service account. The meal cost must at least be equal to or greater than the value of the commodities contained in the meal. The USDA value of the commodities must accrue to the nonprofit school food service account.

Using donated product in baking items that are sold in the teachers lounge as long as they are also sold/served to students and the funds derived accrue to the nonprofit school food service account.

Examples of unacceptable use are:

Catering operations for schools not participating in the National School Lunch Program.

Commodity beef patties served at a football banquet where the USDA value of the commodity food is not returned to the nonprofit school food service account.

Donated product used in baking items that are given/sold exclusively to faculty, PTA or the public.

USDA continues to prohibit donated foods from being used in any non-student related events such as catering banquets for the Chamber of Commerce, partisan political functions, or supplying refreshments for the Parent Teacher Association (PTA), etc. We further prohibit LEAs from increasing their orders for USDA commodities for the purpose of supporting school related functions other than National School Lunch Program (NSLP) and School Breakfast Programs (SBP).

LEAs must ensure donated foods are used to benefit the intended recipients, the students participating in the NSLP and SBP.