As food costs soar, institutions cut corners on meals

Cafeteria menus drop popular but 'empty calories'

Preschool children lined up for lunch in the Otto Hubbe school in San Jose, Calif., last month. The increase in worldwide food prices makes the nutrition-rich program ever more important to children who may not otherwise get a healthy meal. (KENT GILBERT/ASSOCIATED PRESS)

LOS ANGELES - In lunchrooms throughout the Visalia School District, students are about to notice what administrators are doing to save money in the face of rising food prices.

The chicken taquitos they like so much will be dropped. So will the popular pizza pockets. The items (49 cents for a taquito; 58 cents for a pizza) are too pricey to keep on the menu - especially when it is costing the district $110,000 more this year to serve milk than it did last year.

"Prices started to escalate last year. This year it hit us especially hard, but I see next year as being more difficult," said Lynnelle Grumbles, director of nutritional services for the central California district's 18,000 students. Her costs rose 7 percent this year, but her funding is fixed - and her budget is in the red. "School meal programs are at a breaking point," she said.

Around the country, managers of large-scale food programs are doing the same anxious math, paring costs any way they can and worrying that the squeeze might get tighter.

Military planners are considering switching troops from milkshakes to less expensive soy shakes. Federal prisons are cutting back on dessert. Schools are trimming workers' hours and replacing lasagna with spaghetti. Infant-feeding programs are running on emergency funds. And federal officials have begun bartering for basics such as peanut butter to shore up depleted food banks.

Institutional budgets are usually set once a year, but managers have to feed their clients - 31 million schoolchildren, not to mention hospital patients, soldiers, inmates, and more - regardless of how high prices climb.

Food costs are rising for many reasons.

Poor global harvests and drought have cut crop outputs. The weak US dollar makes American commodities more attractive to consumers overseas and investors at home. Increasing demand for corn-derived ethanol means less cropland for food corn or other grains, such as wheat. India and China are consuming more, further tightening supplies.

And soaring energy prices raise processing, retail, and transportation costs. The average US food item travels 1,500 miles before it is eaten.

Food prices rose 4 percent in 2007 and are on track to climb 5.5 percent in 2008. Most federal programs are struggling to meet the costs of basics like meat, eggs, and bread. And agricultural economists say prices haven't hit their ceiling yet.

With that in mind, managers are whittling expenses.

The military has targeted the dairy shake. The Department of Defense orders about 17 million a year, said Gerald A. Darsch, the Pentagon's director of combat feeding.

Each one provides 410 calories, 20 grams of protein, and half of the calcium and vitamin D that troops need daily. And unlike some items in their MREs (meals ready to eat), troops consume the shakes.

One Pentagon contractor is considering a switch from dry milk to soy, or to a soy-dairy blend, to offset price increases. But no substitution will be made if service members don't like the result.

Budgets are tighter within the federal prison system, which serves half a million meals a day. The Federal Bureau of Prisons spends $2.65 per inmate per day for all three meals, which are set by a standardized national menu.

Rising food and transportation costs are necessitating cuts, said spokesman Michael Truman.

"We have focused on reducing or eliminating extras such as desserts, sodas, sugar, or other empty calories and are focusing on basic nutrition," he said.

The US Department of Agriculture finances food banks and distributes surplus products from farmers.

But now the money is buying less and farmers have less surplus.

So USDA officials established a system last year to barter commodities such as cotton for food like canned meat and vegetables to send to soup kitchens and food banks.