NET OFF INVOICE (NOI) and FEE-for-SERVICE (FFS)edisp/mde...• Does Not order Inbound Inventory • Tracks Cases In Distributors’ own system • Invoices RA contracted Delivery fee

NET OFF INVOICE (NOI) and FEE-for-SERVICE (FFS)

Annette McBride, Administrator | Minnesota Food Distribution Program

February 13, 2018Leading for educational excellence and equity, every day for every one. |

education.state.mn.us 1

USDA COMMODITIES STAKEHOLDERS

• Government

• USDA

• State Distributing Agencies

• Industry

• Processors

• Distributors

• Brokers

• Agriculture

• Farmers and Farm Associations such as:

• Agricultural Councils, Trade Organizations. Agricultural Promoters

• Community

• Recipient Agencies (RA)

• Food Banks

• Food pantries and meal sites

• Other community-based organizations

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ENTITLEMENT

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ENTITLEMENT

School Year July-June NSLP Entitlement ESTIMATE!

PRIOR YEAR LUNCHES

XJULY RATE

+12% FUNDING

+/-PRIOR YEAR BALANCE

=TOTAL ENTITLEMENT $

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CLiCS SPONSOR PROFILE

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CLiCS SPONSOR PROFILE

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ENTITLEMENT ACT AND REGULATIONS

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USDA COMMODITY PROGRAMS

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• USDA Regular Commodities or Brown Box

• Department of Defense (DoD) Fresh Produce

• Net Off Invoice (NOI)

• Fee-for-Service (FFS)

NET OFF INVOICE (NOI)

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NET OFF INVOICE (NOI)

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RECIPIENT AGENCY

• Pays distributor commercial price, minus USDA foods value per case, when allocation balance exists

• USDA foods drawdown occurs when product is invoiced by distributor

• Distributor invoices at the commercial price when there is no allocation balance

NET OFF INVOICE (NOI)

PROCESSOR

• Receives Raw USDA Foods And Processes Into End Products

• Sells To Distributor At Commercial Price

• Reimburses Distributor the USDA Foods value per case when proof of delivery had occurred.

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NET OFF INVOICE (NOI)

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DISTRIBUTOR

• Pays Commercial Price To Processor

• Controls Inbound Inventory

• Track and update pound balances in Distributor system, communicate pound balances with third party tracking system and/or other processor system

• Displays USDA Foods Value per case on Invoice

• Receives Reimbursement From Processor for the USDA Foods value per case

NET OFF INVOICE (NOI)

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COMMODITY CALCULATOR

Many Processors and other Industry partners offer Commodity Calculators

Select the items you want to serve

• Enter the number of portions needed each time it’s served

• Enter the frequency it’s on the menu

• The calculator tells you how much to divert

NET OFF INVOICE (NOI)

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How Much To Divert

number of portions to be served

X number of serving occurrences for the year

= total number of servings

÷ servings per case = number of cases

X pounds DF per case = number pounds to divert for each item

Ʃ all products = amount to divert

NET OFF INVOICE (NOI)

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NET OFF INVOICE (NOI)

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NET OFF INVOICE (NOI)

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FEE-FOR-SERVICE (FFS)

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FEE-FOR-SERVICE (FFS)

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RECIPIENT AGENCY

• Pays Processor The Processing Fees: Labor, Packaging, Actual Processing, Shipment To Their Requested Location

• Pays Distributor Contracted Delivery Price

• RA controls inbound inventory of finished product

• USDA Foods Drawdown occurs upon delivery to requested location

FEE-FOR-SERVICE (FFS)

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PROCESSOR

• Receives Raw USDA Foods And Processes Into End Products

• Ships Finished Product To RA’s Requested Location

• Sells To Distributor At $0 Cost

• Invoices RA For Processing Fees

FEE-FOR-SERVICE (FFS)

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DISTRIBUTOR

• Receives finished goods at $0 from the Processor

• Only distributes product to specific RAs

• Does Not order Inbound Inventory

• Tracks Cases In Distributors’ own system

• Invoices RA contracted Delivery fee per case

FEE-FOR-SERVICE (FFS) and NET OFF INVOICE (NOI)

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MANAGING PROCESSOR INVENTORY

• TRACK YOUR BALANCES

• If you need more than you diverted, or have excess pounds at a Processor, work with other stakeholders

FEE-FOR-SERVICE (FFS) and NET OFF INVOICE (NOI)

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MAXIMIZE USDA FOODS UTILIZATION

• Carefully analyze the best use of entitlement dollars

• Entitle is an asset only when it is used

• Entitlement is meant to save 20 percent of your food cost

• New diversions should be the amount you need minus any remaining balance from the previous year already at the Processor

USDA FORECASTING

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HELPFUL WEBSITES

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ProcessorLink

K12 Foodservice

American Commodity Distribution Association (ACDA)

United States Dept. of Agriculture (USDA)

MN Dept of Education

American Commodity Distribution Association (ACDA)

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Thank You!Minnesota Food Distribution Program

Nutrition, Health and Youth Developmentfns.fdp@state.mn.us

651-582-8526 or 800-366-8922

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