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Fuel Prices Take Bite Out of School Lunches

(Post-Tribune) Schools are bracing for higher food prices, much like families across Northwest Indiana.

It could be the toughest food negotiation season in more a decade, said John Lewis a representative for the Northwest Indiana Educational Service Center, which bargains for cooperative food buys for two dozen districts in Lake, Porter, Starke and other counties.

"With 24 school corporations, we certainly have some leverage and will seek fixed pricing, but we assume companies will bid aggressively," Lewis said.

"There are very few companies or distributors that can really handle the amount and logistics of serving schools -- so they have some but not much competition. This is potentially the worst I've seen prices in the 10 years I've been here. Just how much the increase will be remains to be seen.

"I know schools are looking at meal prices and ways to modify menus to keep prices as low as possible for their students," he said. "They are very innovative and share ideas."

Dairy costs rising
Paulette Libak, food service director for Munster Schools, has already seen milk go up by 6 cents a serving. Multiply that milk increase by the number of cartons she distributes daily. So far, that's translated into $27,000 extra this year.

The mark-up is even higher in the Portage Township Schools, where Jan Black, director of school nutrition, serves more than a million cartons of milk a year: "We're talking a huge amount of money -- but we can't do without milk."

The entire co-op uses 10 million cartons of milk a year, Lewis said.

It's the product with the biggest price increase, but most schools are choosing to absorb such increases rather than pass the amount onto children and their families.

Lake Central, however, has made the decision to add a nickel to the price of every student lunch. They've already increased the student price of milk by that much.

Business Manager Thomas Dykiel said food, distribution and ethanol costs are weighing on the district that is already getting fewer and fewer products from the USDA.

"Also, ethanol is taking so much corn that anything that is a corn by-product is definitely affected," Dykiel said.

Lewis said the agreements with some companies such as milk suppliers lock in their profit but not the cost of the items. So costs to districts fluctuate monthly.

Trimming costs
Cut-back strategies from Munster to Portage include:

* Going for cheaper packaging and reusable trays.

* Moving more expensive items to a la carte, where students pay separately for them.

* Reducing servings of higher-status vegetables, especially when not in season.

Strawberries are a heavily monitored treat, Libak said. And the grilled chicken on a Kaiser and specialty salads? Look for them on a pay-per-item menu, if at all.

"Some speciality items like that are labor-intensive and well beyond what the food costs should be," Libak said.

Mixed vegetables could become a delicacy in Crown Point Schools said food service director Pam Maloney.

"Certain mixed vegetable are quite a bit more expensive than green beans. We'll offer them, just not as often," Maloney said.

Maloney said the cost for whole grain goods "is really outrageous," so she'll consider limiting those as well.

Black, president-elect of the Indiana School Nutrition Association, is optimistic, even though she recently returned from a school food conference in Colorado where high prices were the talk of the event.

"From everything we've been told and everything we see at grocery stores, we expect some increase but I don't think it will be too major," she said.

The fact that menus have become more health-conscious makes balancing costs more difficult.

Maloney agreed.

"Healthy food is a lot more expensive than junk food," Maloney said.

Added Black: "We don't want to compromise our quality. We have a strict wellness policy in Portage, and we are sticking to it. So, we'll look at making cuts in other areas: supplies like straws, napkins, disposable items," Black said.

"We have to cut in areas that will have the least impact. We've worked so hard to make school lunches so much more appealing over the years. We can't go backwards," she said.

Food service directors said students likely will still see favorite foods, such as pizza.

Lewis oversees three types of school bids -- one for milk and bread, the other for bulk cafeteria food for canned and frozen foods, and commodities, which are often sent to processors which convert raw commodities such as chicken to processed items like chicken nuggets and patties.

Those processors, while more efficient, also truck in food and will likely see their pricing affected by the gas pumps. So, distribution and transportation costs weigh as heavy on budgets as the food itself, Lewis said.

Lewis also said simple things like plastic-ware that rely on costly petroleum might also cost cafeterias more.

Libak recently served a special lunch at Centennial Park for Eads Elementary fifth-graders who performed a Civil War re-enactment. The chicken legs and side items cost $1.60 -- the amount charged, with no buffer to cover expenses of the transportation, serving items and other supplies.

It's a money drain but it adds to special programs.

So, Libak finds a way to cut back on big labor costs. She doesn't replace someone who's absent. "We have people picking up more duties. They always work fast and hard; sometimes we just have to do a little more."

In Gary, food services manager Gwen Williams, an employee of Sodexho, negotiates for food with its parent agency, not the co-op. She's also expecting higher costs, but won't know until the summer is over.

"We have had to have some cutbacks, especially with fresh produce. And we don't offer as many bagels and cream cheese because the costs are definitely rising," Williams said.

She does still offer fresh fruits and vegetables "every single day -- we don't offer tomatoes but the quality we get for the price now is not very good," Williams said.

Jason Bearce, spokesman for the Indiana Department of Education, said the state won't be able to trace food cost trends until the fall after summer bidding. Bearce said government reimbursement won't increase.

(CBS 2 and the Post-Tribune are news partners covering stories in the communities of northwest Indiana. Send story tips to tips@cbs2chicago.com. (© MMVIII, CBS Broadcasting, Inc. All Rights Reserved.)

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