4 June 2021

The U.S. Department of Agriculture (USDA) today announced an investment of up to $1 billion, including $500 million in American Rescue Plan funding, in The Emergency Food Assistance Program (TEFAP) to support and expand the emergency food network so food banks and local organizations can reliably serve their communities. Building on lessons learned during the COVID-19 pandemic, USDA will enter into cooperative agreements with state, Tribal and local entities to more efficiently purchase food from local producers and invest in infrastructure that enables partner organizations to more effectively reach underserved communities. USDA believes the food system of the future should be fair, competitive, distributed, and resilient; it must support health and ensure producers receive a fair share of the food dollar while advancing equity and contributing to national climate goals. This investment represents the first part of USDA’s new Build Back Better initiative to help achieve that vision and start building a better food system today.

In the coming months, USDA will make a series of additional investments under the Build Back Better initiative focused on building a better food system. Build Back Better efforts will improve access to nutritious food, address racial injustice and inequity as well as a changing climate, provide ongoing support for producers and workers, and create a more resilient food system. Today’s announcement of up to $1 billion will help resolve lingering challenges directly associated with the COVID-19 pandemic and start addressing long-term challenges to our nation’s food system exposed by the pandemic.

This effort is funded via $500 million from the American Rescue Plan Act (passed in March under President Biden) and $500 million from the Consolidated Appropriations Act, 2021 (passed in December under President Trump).

Details in the plan include:

  • $500 Million to Support Emergency Food Assistance
    • USDA’s Agricultural Marketing Service (AMS) will purchase $500 million in nutritious, domestically produced food for state food bank networks through TEFAP.
    • A list of foods eligible for purchasing under TEFAP can be found here. Dairy products eligible include cheese (American and Cheddar) and fluid milk (skim and 1%).
  • Up to $400 Million to Support Local, Regional, and Socially Disadvantaged Farmers
    • AMS will establish cooperative agreements with state and Tribal governments or other local entities to purchase food for the food bank network from local and regional producers and from socially disadvantaged producers.
  • Up to $100 Million In Infrastructure Grants to Build Capacity for Food Banks and Expand Reach into Underserved Areas
  • FNS will administer a new grant program aimed at helping food assistance organizations meet TEFAP requirements, strengthen infrastructure, and expand their reach into rural, remote, and low-income communities. This grant program incorporates lessons learned from the Farmers to Families Food Box program.

HighGround’s Take:

  • This funding, appropriated from both of the past two COVID-19 stimulus bills, will continue USDA efforts to procure food for those in need. The December stimulus bill stipulated that this money could not be spent until USDA completed a review of COVID-19 related food assistance given to date. As the Farmers to Families Food Box program came to a close earlier this week (May 31), this represents a shift in USDA food assistance funding.
  • A wide variety of foods are available for purchase under the TEFAP program, including fruits, vegetables, legumes, grains, proteins, and dairy. Dairy products available are limited to only fluid milk and cheese, unlike the Farmers to Families Food Box program that saw a wider variety (sour cream, yogurt) of dairy products purchased. Given the broad flexibility of the TEFAP program, this funding will likely be a limited driver of overall dairy demand. There is no timeframe identified in the announcement, meaning this money can be spent over several months.
  • The market could see a brief, reactionary jump, but the likely impact to dairy markets is minimal. Importantly, HighGround believes this funding is separate from the Dairy Donation Program, final details of which have still not been announced.

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