About Commodity Processing
USDA began the Processing Program in 1958 to permit
State Distributing agencies and eligible recipient agencies to maximize the use of
donated commodities. Most of the commodities processed through these
programs go to schools participating in the National School Lunch
Under this program, States and recipient agencies can contract with
commercial food processors to convert raw bulk USDA commodities into
more convenient, ready-to-use end products. There are four basic
types of processing agreements.
National Processing Agreement. In an effort to reduce costs and
paperwork, FNS has taken on the roll of holding the agreement with
the processor and approving all of the end products that will be
manufactured under the agreement. By SY 2007 all multi-State
processors must have a national agreement in place. For additional
information on NPA, click HERE.
State Agreement. Under a State agreement, the distributing
agency negotiate bids/ and/or prices, selects the processor and the end products which will
be produced, and enters into an agreement with the processor.
Recipient Agency Agreement. Under a recipient agency
agreement, the recipient agency or school enters into an agreement with the processor. This
kind of arrangement requires the approval of the distributing agency. Once approved, the
recipient agency may purchase end products from that processor. A recipient agency agreement
should be used after the agency has completed its procurement process.
State Master Agreement. Under a State master agreement, the
distributing agency enters into an agreement with the processor and only
designated eligible recipient agencies may purchase end products
from the processor
The State Agreement,
Recipient Agency Agreement, and the State Master Agreement are the
three types of State Processing Agreements approved by the State
Distributing Agency or a recipient agency. For more
information about Commodity Processing Agreements,