Location, School Characteristics, and the Cost of School Meals

By Ollinger, Michael; Ralston, Katherine et al. | Journal of Agricultural and Resource Economics, December 2012 | Go to article overview

Location, School Characteristics, and the Cost of School Meals


Ollinger, Michael, Ralston, Katherine, Guthrie, Joanne, Journal of Agricultural and Resource Economics


The U.S. Department of Agriculture reimburses schools for meals provided to students participating in the National School Lunch and School Breakfast Programs. Reimbursement amounts are based on national average estimated costs of meal production. Food prices, however, vary across the United States, suggesting regional cost differences. This paper uses a quality- adjusted translog variable-cost function to show how costs per meal vary across twenty-one U.S. locations. The average deviation from national average cost is about $0.38 per meal; the average cost deviation attributed to input prices is $0.17 and the scale effect is $0.135.

Key words: National School Lunch Program, School Breakfast Program, school food service costs per meal, school meals

(ProQuest: ... denotes formulae omitted.)

Introduction

In fiscal year 2009, the USDA Food and Nutrition Service (FNS) provided about 42 million lunches and breakfasts to schoolchildren participating in the National School Lunch Program (NSLP) and School Breakfast Program (SBP) (Oliveira, 2010). The USDA reimburses local school food authorities (SFAs) that administer these programs for part or all of their meal costs. Reimbursement rates are based on per meal cost estimates made by the USDA at a national level. With the exception of Alaska and Hawaii, these estimates are identical across the United States. USDA cost analyses do not account for regional cost differences. However, a food-price index developed for the Missouri Economic Research and Information Center (MERIC) indicates that food prices vary from state to state. In 2005, index values ranged from 0.892 in Texas to 1.187 in Connecticut.

This paper examines the effect of geographic location and SFA characteristics on the cost of providing a school meal. The two main issues are how large differences in food-service costs per meal are among geographic locations after accounting for nongeographic factors and how input prices, the number of meals served, and SFA characteristics contribute to cost differences. We examine twenty-one geographic locations with different types of metropolitan areas-urban, suburban, and rural-covering each of the seven regions (Mid-Atlantic, Midwest, Mountain Plains, Northeast, Southeast, Southwest, and West) administered by the FNS.

We use a quality-adjusted translog cost function developed by Gertler and Waldman (1992) and extended by Antle (2000) and data from 1,359 SFAs participating in the School Food Authority Characteristics Survey (SFACS) to estimate the costs of producing and serving NSLP and SBP meals. Besides input prices and the number of meals served, variables included in the model account for the proportion of meals that are lunches, variation in meal quality, and other characteristics. After estimating the model, we examine the individual contributions of input prices (wage and benefit rates, food prices, and supply prices), number of meals served, and regional SFA characteristics to regional differences in cost per meal.

This is the first theoretically grounded approach to examine the cost of providing school meals through USDA meal programs across all U.S. geographic locations. A 1993 analysis by the U.S. Government Accountability Office using 1987-88 and 1988-89 data provided no conclusive evidence that regional cost differences exist (U.S. General Accounting Office, 1993). Bartlett, Glantz, and Logan (2008) reported that cost per meal is negatively associated with urban locations but did not vary among regions. This econometric analysis assumes that breakfast costs are a fixed fraction of the cost of a lunch, yet other studies (Hilleren, 2007; Sackin, 2008) show that costs per breakfast vary with the number of breakfasts served and service style (for example, in the classroom).

This study also deducts the costs of non-USDA foods prepared by SFA stafffrom total average costs, even though these foods use the same inputs as those used for USDA meals. …

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