Gold Price Analysis – Biden to cancel Trump’s pandemic food aid after high costs, delivery problems
CHICAGO (Reuters) -Yogurt was everywhere as volunteers opened boxes of fruit, frozen meat and dairy products that had shifted and spilled in transit to a food bank in Walworth County, Wisconsin.
They rushed to clean and transfer the packages of frozen meatballs, apples, milk and yogurt into cars for needy families to take home before they spoiled.
The food came from The Farmers to Families Food Box program that the Trump administration launched to feed out-of-work Americans with food rescued from farmers who would otherwise throw it away as the coronavirus pandemic upended food supply chains.
The government hired hundreds of private companies last spring to buy food no longer needed by restaurants, schools and cruise ships and haul it to overwhelmed food banks. But the program faced spilled and spoiled food, high costs and uneven distribution nationwide, according to interviews with food banks and distributors, and an analysis of U.S. Department of Agriculture (USDA) invoice data obtained through Freedom of Information requests.
Some of the companies charged the government more than double the program average while delivery to food banks was sometimes late. When the government contracted new vendors, some food banks relying on the program stopped receiving food at all. At the same time, the contractors delivered to churches or daycare centers that lacked adequate refrigeration.
“Food was abandoned to spoil,” said Susan Hughes, managing director of the Walworth County Food and Diaper Pantry.
The USDA spent $4 billion on the food box program in 2020 – six times its normal emergency food budget. After reviewing the program, President Joe Biden’s administration has decided not to continue it after May, USDA Communications Director Matt Herrick told Reuters.
Under newly appointed Secretary Tom Vilsack, the USDA is focused on different hunger initiatives, including expanding food stamp benefits and increasing food purchases through existing government food distribution programs, Herrick said.
“We’re not going to replace the program,” he said.
While food bank operators are thankful for the large volumes of fresh food from the food box program – and they stress that aid is still needed – many say far more families could have been fed by sticking to existing programs with proven quality and oversight.
Greg Ibach, USDA’s former undersecretary for marketing and regulatory programs under the Trump administration, helped design the food box program in about a month. He said it worked as well as other USDA programs that took years to develop.
“We were in a hurry. People were hungry; there wasn’t food in grocery stores – if there was, they couldn’t afford it,” Ibach said. “We got a lot of food out the door and in peoples’ hands.”
HIGH COSTS, INCONSISTENT BOXES
When the food box program was rolled out in May 2020, the Trump administration touted it as a way of getting food to hungry Americans quickly. But by late June, the program fell short of delivery targets, Reuters reported. The government provided little guidance to food pantries and sometimes inexperienced distributors, who were often left to connect with one another on their own. [L1N2E91DJ]
After some states, including Montana and Nevada, received very little food early on, the Trump administration in June contracted with Gold Star Foods, a California-based school food distributor, to reach underserved areas, Gold Star’s CEO Sean Leer said in an interview.
Gold Star billed the government between $87 and $102 in October and November for food boxes containing fruit, meat and dairy products. That’s more than double the average of similar boxes from other companies at the time, according to USDA invoice data. Leer said the cost reflected the increase in food and freight prices during the pandemic supply chain disruption.
Leer said the company has at times delivered the food boxes at a loss. He noted that during the February cold snap in Texas, Gold Star sent food to the state from California because the weather caused supply problems in Texas.
Food delivered by Gold Star accounted for less than 2% of federal money spent on the food box program in 2020, though that will increase to just under 9% through April 2021, according to Reuters’ review of USDA invoice data.
Companies delivered food in varying quantities at first, making cost comparisons between different vendors difficult. But in September USDA standardized the food boxes at no more than 24 pounds after feedback from food banks.
From October through December, invoice data shows seven out of 105 companies, including Gold Star Foods, charged the government double the program’s median price per pound of food. Three of those companies were awarded contracts by the Trump administration for nearly $32 million in January 2021.
The Biden administration says some companies may have overcharged the USDA.
“There was an unequal cost associated with the distribution and filling of these boxes. Some people made a significant percentage from filling the boxes,” Vilsack said on a March 3 call with reporters.
The USDA specified food boxes delivered in 2021 to the continental U.S. cost between $27 and $48 per box. But cheaper boxes presented new challenges and put additional burdens on food banks, said Emily Broad Leib, director of Harvard Law School’s Food Law and Policy Clinic. The lower-cost boxes contained lower quality food, and food companies at times refused to deliver them to smaller pantries, leaving local organizations scrambling to find extra money for delivery, she said.
RURAL AREAS LEFT OUT
Though some regional food banks have taken on the labor of delivering to multiple counties, most smaller food banks serve only one county. Deliveries to additional counties are at the expense of food banks, said Brian Greene, CEO of the Houston Food Bank.
Reuters’ analysis of USDA data showed the program struggled in particular to reach rural counties. While cities and well-populated counties received millions of boxes of food, 896 counties – or nearly a third – received none, according to USDA data.
USDA’s Herrick said the Biden administration’s assessment of the program exposed problems in how the food aid was delivered.
“A lot of rural communities went unserved entirely,” he said.
Counties that did receive food worked with as many as a dozen food companies over seven months in 2020. Every six to twelve weeks, the USDA introduced a new phase of the program, changing food suppliers and forcing food banks to scramble to connect with new vendors or lose food supplies.
“USDA didn’t give (distributors) any guidance as to who to serve or keep serving,” said Harvard’s Broad Leib. “You can’t rely on something if one day it’s there, then the next day it’s not.”
Despite the program’s flaws, food banks say the nearly 133 million boxes of food delivered in 2020 averted an even greater crisis.
There are hungry Americans in nearly every city and county nationwide, said Kate Leone, senior VP of government relations at Feeding America, a national network of food banks. The organization estimates that about half of the children in some counties are food-insecure – worried about where their next meal might come from.
Reporting by Christopher Walljasper; Editing by Caroline Stauffer and Brian Thevenot