Special Milk Program Pricing Options

Plan 1

Non-Pricing Program

The School Food Authority (SFA) may record the total number of ½ pints (8 fl oz) of milk served to students on a calendar or daily count sheet at the point of service (POS) as no student is charged for milk and all students are claimed as “paid”. There is no requirement to track milk participation by individual student. Tracking consumption of milk flavor (i.e. white versus chocolate) by individual student is not a requirement unless this information is used to ensure that a student takes the milk type specified by a parent or for ordering milk from suppliers.

Plan 2

Pricing Program (with no free milk)

The School Food Authority (SFA) should keep track of milk program participation consumption by individual student name if the SFA is charging by ½ pints (8 fl oz) and using the point of service (POS) counts for billing purposes. SFAs that choose to collect an annual, semester or quarterly milk fee may choose to record the total amount of milk served to students on a calendar or daily count sheet at the POS rather than by individual student name. All students are claimed as ‘paid’ on the monthly claim for reimbursement. Tracking consumption of milk flavor (i.e., white versus chocolate) by individual student is not a requirement unless this information is used to ensure that a student takes the milk type specified by a parent or for ordering milk from suppliers.

• Milk is sold to all children with the reimbursement utilized to keep the cost to students low.
• ½ pint prices should reflect the difference between federal reimbursements and the cost to operate the program (may include administrative and supply costs).

Plan 3

Pricing Plan with Free Milk Option

The point of service (POS) counting system must determine how many ½ pint equivalents (8 fl oz) are served to students by benefit category without overt identification.  The two benefit categories are "free" for students who qualify for free milk and "paid" for milk served to students who do not qualify for the free benefit. The School Food Authority (SFA) may choose to use a classroom roster or an electronic system to track participation by category. Tracking consumption of milk flavor (i.e., white versus chocolate) by individual student is not a requirement unless this information is used to ensure that a  student takes the milk type specified by a parent or for ordering milk from suppliers.

• Milk served at no charge to students who qualify for free milk benefits (based on income or direct eligibility)
• Sponsor charges their established break-even rate to children who pay for milk
• Sponsor's reimbursement
  • Federal reimbursement rate for children who pay
  • Net dairy cost for children who qualify for free milk benefits
    • Net dairy cost = average cost per gallon / 16

Free Milk Option Requirements

• Public release statement
  • Submitted yearly – not required to pay to have published
• Applications for free milk
  • Must be completed by parents and determined by school officials
  • Based on income
• Protection from overt identification
  • Must provide a payment option that does not overtly identify students who receive free milk
  • Must provide daily accountability of milk consumption, by student, utilizing a method that does not overtly identify students receiving free milk

Milk Pricing

Reimbursement should be maximized to reduce the cost of milk for students. It is recommended to charge a student the difference between the anticipated cost per half-pint milk and the reimbursement rate. Consider adding on 2 cents to cover any milk price adjustments and administrative costs associated with the SMP program (i.e. the price for ½ pint =  cost of ½ pint  – reimbursement + 2¢). Documentation needs to be maintained to justify milk price adjustments and administrative costs greater than 2 cents per ½ pint.