Processor-to-Processor Transfers of USDA Foods

Effective July 1, 2012, the California Department of Education (CDE) Food Distribution Program (FDP) limits the number of processor-to-processor transfers of U.S. Department of Agriculture (USDA) Foods each agency or private cooperative (co-op) may request each school year. This Management Bulletin (MB) also outlines the process for transferring USDA Foods.

The purpose of this policy is to provide more transparency to the operation of the program and to encourage use of USDA Foods in the school year in which they are diverted to a processor.

Each agency or private co-op may request two processor-to-processor USDA Foods transfers per school year. Each agency or private co-op may request additional transfers in June of each school year, but only to transfer entire balances of USDA Foods from processors where the agency or private co-op no longer plans to purchase products using USDA Foods.

All processor-to-processor transfers and agency-to-agency transfers must involve only inventory from the current school year’s allocation.

If an agency or private co-op feels it needs more than two processor-to-processor transfers during a school year due to an anomalous, unforeseeable circumstance, the agency or private co-op may request the additional transfer and explain the situation in the Reason For Transfer section of the USDA Donated Food Transfer Form, available on the CDE USDA Food Transfer Forms Web page at http://www.cde.ca.gov/ls/nu/fd/commlosstrans.asp. FDP staff will analyze the situation and decide whether to grant the transfer.

Tips for Minimizing Transfers

• Agencies should ensure that the amount of USDA Foods diverted to a processor is the amount that will be used in that school year.
• Agencies should use calculation tools provided by processors and brokers to determine the amount of USDA Foods to divert. Processors should ensure that these tools are accurate and up-to-date.
• Agencies should conduct taste-testing with students before diverting USDA Foods to a processor in order to ensure the end product will be consumed.

How to Request a Processor-to-Processor Transfer

For any processor-to-processor transfer of USDA Foods, both of the processors and the agency (or the lead agency for private co-ops) must complete the USDA Donated Food Transfer Form. The processor or the agency must submit the form for approval to the FDP Processing Consultant who works with the receiving processor. Please see the consultant assignment list on the CDE USDA Foods Processing Program Web page at http://www.cde.ca.gov/ls/nu/fd/processor.asp.

The sending processor determines if a transfer will be a paper or physical transfer. Paper transfers are only allowed for substitutable USDA Foods or between two processors that are both fully substitutable for the USDA Foods to be transferred.

For paper transfers, the Average Material Price per pound is used to determine the value of the USDA Foods found on the USDA FNS Processor Material Prices web page at https://www.fns.usda.gov/fdd/processor-material-prices.

For physical transfers, the receiving processor is responsible for transportation costs. Physical transfers must be in increments of units or cases.

If you have any questions regarding this MB, please contact Jeanette Lund, Processing Consultant, by phone at 916-324-6150 or by e-mail at jlund@cde.ca.gov.