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Revised USDA Policy Memo FD-40 Inventory Draw Down


In 2018, federal regulations pertaining to U.S. Department of Agriculture (USDA) Foods were amended and on July 16, 2021, the USDA issued Policy Memorandum FD-40: Inventory Draw Down in USDA Foods Processing (Revised). The new policy memo reflects the 2018 changes to the regulations. You can view this policy memo on the USDA Food in Schools Policy web page at USDA Food in Schools Policy web pageExternal link opens in new window or tab..

The revised policy memo provides clarification on the value pass through methods available under Title 7, Code of Federal Regulations, Section 250.36, and on the timing of processor inventory reductions (also referred to as draw down) of USDA Foods under each system.This revision replaces the previous FD-40, dated January 12, 2005.

The current value pass through methods are included in the Food Distribution Program (FDP) Management Bulletin (MB) FDP-03-2019: USDA Value Pass Through Methods. Additionally, MB FDP-04-2018: USDA Final Rule Regarding Revisions and Clarifications in Requirements for the Processing of Donated Foods highlights other requirements for the processing of USDA Foods. Both of these MBs can be viewed on the FDP MB web page.

A California Department of Education MB will not be forthcoming.

Contact Information

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

Questions:   Nutrition Services Division | 800-952-5609
Last Reviewed: Wednesday, August 25, 2021
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