Outlook 2012: K-12 Schools

John Lawn

TREND: “For school year 2012-13, districts will either be in or not in compliance with the new rules. It will not be acceptable to continue under the old standards,

Looking for another measure of the broader U.S. economy and how households have coped with the long-running recession? You need go no further than its public schools.

Demand for subsidized school lunch meals increased rapidly over the past five years as a result of the extended downturn. More than 21 million students — two out of every three school lunch customers — qualified for subsidized meals last year, a 17 percent increase since 2007.

Schools will finally begin to implement 2010's Healthy and Hunger-Free Kids Act of 2010 in earnest this year, with many changes kicking in between now and the fall. Districts have been preparing for stricter nutritional and meal pattern standards (and resulting food cost increases) as best they can. Hundreds have been certified under USDA's HealthierUS School Challenge program and may already be close to compliance, but all will face significant cost and other challenges in the year ahead.

At the same time, “These are truly great changes in that they support the idea that we run nutrition-based programs,” says Jean Ronnei, director of nutrition services at St. Paul Public Schools. “We want to be seen in that light, as opposed to the providers of classic 'lunch lady' meals.”

The final USDA School Meal Pattern rule was released in late January. Once schools are certified as being in compliance, they will qualify for an added 6-cent per school meal reimbursement beginning October 1. Among other impacts:

“NuMenu” (computerized nutrition analysis) will likely be eliminated as a way for districts to qualify meals for reimbursement; “food-based” menus will become de rigeur, significantly raising costs for many districts.

Indirect costs that districts can charge to nutrition departments will be defined after an ongoing USDA analysis is complete. The study will assess the extent to which indirect costs are charged to school nutrition departments but isn't due until late 2013, and actual rules and enforcement stretch well into the future.

The way school nutrition programs are evaluated by state authorities will be streamlined and “overhauled,” according to Cindy Long, director of the child nutrition programs at USDA. Speaking at the School Nutrition Association's CNIC Conference in January, she said CRE and SMI evaluations would likely be combined.

The emphasis on reduced sodium will lead to more scratch cooking, more use of fresh ingredients and to a new generation of prepared products for the K-12 market. Pressure from consumer groups to reduce the number of ingredients on food labels will continue unabated.

Farm to school programs have grown more popular and play well in this environment. Look for them to become more widespread, more fully utilized and to be coordinated with other community efforts to emphasize local producers.

Food costs will increase under the rules well in excess of the six cent reimbursement “incentive.” The difference will be made up by meal price increases, delayed equipment purchases, other economies. Forward looking districts are trying to build fund balances now in preparation for next year.

Tighter budgets will cause more districts to begin monitoring costs and spending in real time, predicts Mary Kate Harrison, general manager of food and nutrition services for Hillsborough County (FL) Schools.

“Many programs still operate as they did 20 years ago,” she adds. “My feeling is you can't even operate the way you did last year. This is no longer something a district can do on a twice a year basis. Costs will have to be managed weekly and even daily, when you have the ability to make changes and adjustments that can improve ongoing financials.”