School meal programs have always operated on extremely tight budgets. Pandemic-related losses, school closures and service disruptions left many programs on shaky financial ground. SNA surveys indicate 54% of school meal programs reported a financial loss in SY 2019/20, and 38% incurred a net loss for SY-2020-21 (an additional 12% were unsure of losses).
Meanwhile, supply chain issues are compounding rising costs. In SNA’s November 2021 Supply Chain Survey, 97% of meal programs reported challenges with higher costs, compared to contracted bids, with nearly three quarters citing it as a “significant challenge.”
National labor shortages have also required school meal programs, which often compete with local restaurants for employees, to increase pay to attract employees. Forty-two percent of programs have raised salaries (15% are considering this step) and 19% report offering a bonus (14% considering). These higher labor costs are unlikely to decline when the pandemic subsides.
Recognizing rising pandemic costs, USDA is reimbursing schools for free meals at the higher Summer Food Service Program (SFSP) rate for School Year 2020/21. However, in SNA’s November 2021 survey, only about half of school meal program directors indicated these higher reimbursement rates sufficiently covered the costs of producing school breakfast and lunch, including food, labor, supplies and pandemic costs. In January 2022, USDA further increased SFSP rates to address the gap.
Returning to NSLP/SBP reimbursement rates would undoubtedly increase meal program losses and cut into education budgets, limiting funds for teachers, textbooks, technology and other resources to support learning. Losses will also jeopardize efforts to sustain menu enhancements, increase fresh, locally grown options and expand services, such as breakfast in the classroom, afterschool snack and suppers and summer meal programs.
To preserve the sustainability of school nutrition programs, Congress must permanently increase the federal reimbursement rates for NSLP/SBP.