It will surprise no one to learn that the food that shows up in school lunches comes from a wide variety of sources. We're far removed from the days when the farmer down the road provided the meat and vegetables for the local school's cafeteria.

The way schools pay for these lunches is just as much of a mystery to the average parent as where the food comes from.

One of those lunch sources was created by the U.S. Congress in 1946. The National School Lunch Program was meant to be a boon to the agriculture industry by giving farmers an assured market for their products. It also was meant to help schools use the purchasing power of the federal government to get good deals on their food.

Ever since, instead of sending money to schools for their lunch programs, the federal government, via the U.S. Department of Agriculture, has provided commodity foods that the schools select when planning their menus for the school year.

In today's cash-strapped environment, with foods coming from commercial suppliers costing 17 percent more than the food from the commodity program, that should be a financial boon for schools. Right?

Wrong, says Minneapolis South graduate Cora Peterson.

There is so much inefficiency in the federal food system that it actually drives the total cost of providing commodity foods 9 percent higher than if the government simply gave schools the money to order their own products from commercial suppliers, Peterson says.

In 2008-09, that cost the state of Minnesota between $1.7 million and $3.7 million, she calculates.

Subject of thesis

Peterson, a 2000 South graduate, is now writing her Ph.D. dissertation at the London School of Economics, and her research turned her attention toward her home state. She studied the financial impact of the National School Lunch Program on Minnesota as a whole and the Minneapolis School District in particular.

"The bottom line," Peterson said via telephone from London last month, "is that if the USDA was a commercial supplier, their contract would have been terminated with Minnesota schools long ago."

So what's gone wrong?

Her research, published in 2009 in the Journal of Policy Analysis and Management, shows that there are numerous problems with the supply chain in the federal lunch program, which provides commodity foods that make up about 15 percent of school lunches. (The National School Lunch Program is the same program that provides schools money to finance free and reduced-price lunches for low-income students, but that part of the program operates separately from the commodity foods program.)

In the commodity program, the government's food rarely arrives on time at schools. Often the wrong quantity is delivered. Schools have to pay for extra storage space. And they may end up with more food than they need.

In Minnesota, school districts order their commodity foods anywhere from seven to 16 months in advance. At the time, schools don't even know what price they'll be charged for the foods -- only what the price historically has been.

When the products arrive, 30 percent of the shipments are less than the schools ordered, while 16 percent are more.

And 9 percent of the shipments arrive at state warehouses late -- an average of two weeks after they were supposed to be delivered.

Room for improvement

Peterson has several suggestions for what can be done.

If the USDA were to just give schools the money it now spends on commodities for their food programs, and they bought all their food from commercial suppliers, schools would spend less on food, and the commercial suppliers and agriculture sector would receive more money for their products, since they wouldn't have to bargain with the federal government.

In the 1980s, she said, such a program was tested in 20 districts nationwide. The USDA gave districts "commodity letters of credit" for purchases of food such as chicken or beef, and then they could spend the money with local producers.

But there doesn't seem to be any momentum toward changing the program now, Peterson said.

"The USDA's response is that they're achieving lower prices for schools, and that's what their stamp has been since the program started in the 1940s," Peterson said. "However, they've published virtually no research to support that."

Emily Johns • 612-673-7460