Pricing for Schools: Understanding Costs, Margins, Limitations and Opportunities
March 3, 2023More Info
This session has held as part of the community food systems track during the 2023 MI Ag Ideas to Grow With virtual conference. This virtual conference held February 27-March 10, 2023, is a two-week program encompassing many aspects of the agricultural industry and offering a full array of educational sessions for farmers and homeowners interested in food production and other agricultural endeavors. Sessions were recorded and can be found online at https://www.canr.msu.edu/miagideas/
So welcome. This morning. Our session will be focused on pricing strategies for selling to schools. I just have a few housekeeping slides to go over. So I want to welcome everyone to the Michigan Ag Ideas to Grow with Virtual conference. This is our second session in the community food systems track, which is focused on farm to school this year. And then before we get started with the presentation, just wanted to go ahead and thank our sponsors. So this program is being brought to you free thanks to generous sponsorship by Michigan State University Extension and AgriStraategies LLC. So we really appreciate their contributions. And you can learn more about AgriStrategies, LLC by clicking on the QR code here. Or scanning it, I guess not clicking scanning it with your phone, but just wanted to recognize that Michigan State University is open to all. We encourage anyone to participate in our programs and make accommodations for everyone to be able to fully participate. With that. I'm going to introduce our speakers for today and we'll get into the meat of the presentation. So again, this topic today we're covering is pricing for schools. And I'm really happy to be joined by Emily Mattern. today from the Michigan Department of Education, Office of Health and Nutrition Services. Emily is a consultant for school districts. And myself. I'm Mariel Borgman, a community food systems educator with Michigan State University Extension. I serve the Southwest portion of the state. So at this time I'm going to stop sharing my screen and turn it over to Emily. I am excited to be here. I've worked in child nutrition programs for my whole career and have just been at the state for a couple of years. So I am excited to share with you today. So there are a number of different requirements to be a sponsor of the National School Lunch and Breakfast Program. There are several listed on the slide, such as student eligibility, free meals for students to buy American grown food. The point of service is important for claiming meals and civil rights. We don't want to discriminate against students. But central to the program is the specific meal patterns that a sponsor must follow in order to get reimbursement for those meals. The meal pattern is really the foundation of the program. So the meal pattern is based on the dietary guidelines for Americans. And the goal is to help students establish healthy eating patterns for life. The infographic on the screen matches up to my plate, which you might be more familiar with, but shows how school meals meet the MyPlate guidelines as well. So school meals do have dietary specifications that we need to meet with regards to calories, saturated fat, trans fat, and sodium, just like the Dietary Guidelines and we're going to get into the specifics of those next. So this chart shows the meal pattern for the National School Lunch Program. We have three age grade groups, kindergarten to fifth grade, sixth to eighth grade, and ninth through 12th. And there's corresponding portion sizes that are appropriate for those sized bodies. On average. The minimum portion sizes are in the parentheses and then there's a total for the week. I'm gonna go over each of the meal components separately. So we'll start off with the fruit component. For our kindergarteners to eighth grade, it's a minimum half cup of fruit every day with a total of two-and-a-half cups per week. The high school students, it's a minimum one cup of fruit per day with five cups per week. All different kinds of fruit are allowed fresh, frozen, canned. We can even do 100% juice, but no more than half of the fruit servings offered in a week can be in the form of juice. And it certainly is a best practice to offer a variety of fruit options. When kids have a choice, they're more likely to take something that they like and then eat what they've taken. And of course, fruit is a great opportunity to serve local produce. On the screen there's a container of apples, and that is what a lot of schools first kind of get their feet wet with local purchasing. We have so many apple orchards in Michigan. And that's a great entry point for a lot of schools in serving local produce is starting with Apples because they serve a lot of apples in schools too. So fruit is the first meal component for lunch, and then vegetables are the second. Again, vegetables are required with every lunch. It's a three-quarter cup portion each day for kindergartener through eight and a full cup for the high schoolers. And to follow the dietary guidelines, we have requirements with the vegetable subgroups. And the vegetable subgroups are categorized by their nutrition and the vitamins and minerals that are in large quantity in those different vegetable subgroups. So the dark green vegetable subgroup is things like broccoli, Romaine lettuce, spinach, collared greens. Red orange vegetable subgroup. Carrots, sweet potatoes, tomatoes, red peppers are some of the red orange vegetables. Beans, peas, and legumes or kidney beans, lentils, chickpeas, black beans, baked beans, refried beans. All of those different beans are in that subgroup. And something that's special or unique about that subgroup is that they are high in protein as well. And there is flexibility to count your beans, peas, and legumes survey or serving as a meat or protein serving instead of the vegetable. So you can do either, but just not both in the same meal. Next vegetable subgroup is starchy vegetables, our favorite in the Midwest. White potatoes, corn, and green peas are all in the starchy vegetable. The last vegetable subgroup is the other category and it's not just optional or whatever it is, it's own vegetable subgroup and there's a whole bunch of different vegetables in there onions, green beans, cucumbers, iceberg lettuce, avocado, cauliflower, celery, zucchini. So the schools need to serve minimum portions, half cup portions of all of these different vegetable subgroups each week. Now, if you just serve the minimum of the vegetable subgroup, you will be short for the totals for the week. So then there are additional vegetables that need to be served to meet the weekly total. And then those can be from any of the vegetable subgroups. Also to note, when you're doing a vegetable blend may be you are able to mix up, have a mixed vegetable, blend. The, in-order to count it towards the specific subgroup, there has to be at least a quarter of a cup. That quarter an eighth of a cup, excuse me, is the minimum crediting amount. If there's not an eighth of a cup of one particular vegetable subgroup then it just counts, as that extra to make the minimums for the week? Again, vegetables are a fantastic way to serve local for school meals. Michigan has such a wonderful variety of crops that are grown. There's lots of opportunity to serve local items, local vegetables and fruits in the school meals program. So the other three meal components are grains, meat, meat alternate, and milk. So the grains requirements must be whole grain rich and this follows the dietary guidelines. Need to have at least one serving, but to get your weekly totals, it ends up being two most days for the, especially the younger ones and the older ones for sure. Meat, meat alternate or your protein group is what we think of. Chicken, beef, pork, fish. But the alternate come in with cheese, yogurt, tofu, peanut butter, nuts, and seeds. That gives us some more flexibility. Lots of students are interested in vegetarian options, so that gives some flexibility there. And then milk is required at the meal. There are four basic options. We can do 1% or fat-free milk and they can be flavored or unfavored. The one cup serving for all the age groups. And there are fluid milk substitutes available if there's food allergies or things like that. So schools are required to serve all five of the meal components that we just went over. But there is a flexibility called Offer versus Serve that gives students some control over the food that they take. This helps to reduce food waste and increased student satisfaction and consumption of the meals. Offer versus Serve is required at the high-school level at lunch, but then it is optional for the younger students and then also at breakfast for the high school. But most schools do participate in Offer versus Serve. Okay. So to receive reimbursement for the offer versus serve lunch, the school has to meet the following requirements. First, they have to offer all five components. There needs to be the meat, meat alternate, fruit, vegetable, grain, and milk. All of those are offered in the appropriate age grade group portion sizes. Then the student must choose a minimum of three components for the meal to be reimbursable. And out of those, 31 of them must be at least a half cup fruit or vegetable or a combination of the two. Then the third requirement is that the meal is priced as a unit. So that means that if the student selects three items, it's the same price as if f they select four or five. So the Meal Price is set and the student can pick 3, 4 or five items. Just want to emphasize that that half cup, fruit or vegetable, is required to be one of the three components that a student chooses with their meals. So trying to encourage fruit and vegetable consumption have more nutrient dense meals for these kids. And often hopefully serving local fruits and vegetables as well. The breakfast meal pattern is very similar to the lunch meal pattern in schools. There are the five components that we saw before with lunch, but we have some flexibility at breakfast. So the officially, the fruit, grain and milk are the three required components. However, you are allowed to substitute vegetables for your fruit serving with the grains. If you serve one grain, you can serve a second serving as the meat meat alternate because in order to get the amount totals of the grain servings for the week, you're going to pretty much serve two every day. And again, must be the whole grain rich. And then milk is milk. Same choices at lunch and must be available. So that's the basics of the meal pattern. So I also wanted to talk to you about the USDA Food Buying Guide for Child Nutrition Programs. This is a helpful tool for program sponsors and industry members. It's online and there's also a mobile app. The QR code is on the screen. But this Food Buying Guide lists foods that are allowable in the Child Nutrition Program and then how they credit towards the meal pattern. There's also yield information to help with buying decisions. There's over 2000 products that are listed in the Food Buying Guide and they work on adding more. I encourage you to check it out. You can use a free you can sign in as a guest or you can get a free account, but go in there and look and see what the different crops that you purchase. And see how they fit in or the crops that you grow, and then see how they fit into the meal pattern. Okay, so the focus of this seminar today is supposed to be about pricing and strategies for schools. But we wanted to give you a little bit of foundation of yes, they are required to serve fruits and vegetables. Then how this all fits in. So when a sponsor serves a meal that meets the meal pattern, then they can claim the meal for reimbursement every month. The sponsors submit their meal claims to the Michigan Department of Education and then they get money back based on the current school year's reimbursement rates. And the reimbursement rates are shown on the screen for this year. And these rates are actually significantly higher than in the past because of the Keep Kids fed Act of 2022 that Congress passed in June. Congress is providing an additional $0.40 for lunch and $0.15 for breakfast for this school year. And those are included in the amounts listed on the screen. This is all part of the pandemic recovery. In the red box, you see that the reimbursement for a lunch served to a free eligible students is $4.41. So the school has to make their food and labor budget fit into that $4.41 per lunch. Usually schools are targeting to have around a 40% food cost. So that is about $1.76 to spend on food. To be within the reimbursement rates that we just talked about. I talked to a couple of different food service directors to try to help provide a realistic amount of what they are spending on their lunch components. So they try to spend about a quarter per serving for a fruit and vegetable. Although some said that they were willing to go up to $0.50 with their local produce vendors. Grain, grain two grain servings can be anywhere 15-50 cents. And then the entree can be $0.50 to $1. Now, if you remember, milk is a required component at every meal. And so that's a pretty fixed costs. I mean, the, the price does adjust, but it's it's a known cost because it's required at every meal. So depending on the size of the district, they might get a bit or milk bid than another, but we're looking at over $0.30. So we know that over $0.30 for every of our food cost is gonna go to the milk. And then with the other meal components, we have a little bit of flexibility because we all know just from grocery shopping, some meals are more expensive than others. And so it's just that, that balancing game to try and make them fit. But these are some of the targets that they, they work towards. Okay, So then I also talked to directors about how much they actually purchased to kinda give you a better idea of the volume that we're talking about. So I will say, I don't know, a disclaimer. They didn't all report like the exact same information in the same way as which would make for a nice, beautiful streamline presentation. So I'm sharing the information that they provided with me. So our first district is a small school in Southwestern Michigan that serves about 250 breakfasts and 250 lunches a day. They offer apples every day, so they're going through about 400 per week for lunch and 200 to 250 for breakfast and are aiming for about a $0.40 cost on those. I didn't talk about the after-school snack program, but they also pay in that and serve larger apples in the after-school snack program because there's less choices for the kids to pick. So they're serving about 130 of those apples a week. When in season they like to serve fresh pears, peaches, and plums. And will spend up to $0.40 a serving on those. Baby carrots. You will see baby carrots a lot. Remember that red orange vegetable subgroup baby carrots are a favorite amongst the students. They're offering those three times a week. Then they do purchase pre-cut lettuce, broccoli, and cauliflower. So have some minimal processing to help save the labor in the school. A different small school, kind of South Central Michigan. They're serving 200 breakfasts and about 400 lunches a day. They go, they don't have apples available all the time, so there are about 400 per week on apples they like to do a lot of bags, sliced apples, 600 individual bags per week, pears 220 per week. They're going through about five pounds of lettuce per day. About two pounds of spinach per week. The green peppers, five pounds per week, onions five pounds per week, grape tomatoes ten pounds per week, cucumbers 45 pounds per week. They like cucumbers at their school and then the baby carrots, a good variety of different vegetables that they served. A different school of a similar size. They're serving about 360 meals per day, a little bit more. North Central Michigan, they do Entree salads, and they're using 80 pounds of lettuce per week. a bigger increase there. For a medium-size school district that has 1,100 students in the greater Flint area, and they serve about 780 breakfasts and 780 lunches per week. They go through about 30 cases of apples for a week, week and a half, and they are purchasing apples from their local orchard. And so for the school year, August to January, they'd spent $14,500, so a nice chunk of money going to the local orchard. They do buy some whole Romaine lettuce, but then they do a lot of the chopped Romaine lettuce because they have salad bars in all four of their buildings. She said the middle-school can go through three cases of chopped Romaine just at that building. And they do breakfast in their classroom. Remember there's a one cup serving of fruit that's required. They do tend to do easier things to serve for that fruit servings. So raisins, cutie oranges, bananas or a fruit cup. Not really local. fruit, but it's, it's how, just to help you understand that the different products that a school does buy. I talked to one larger school. They're serving about 5,200 lunches per day. In West Michigan. When they have apples on their menu at their 15 elementary schools, they're using 1,000 to 1,200 pounds of apples just for one day on their menu. So apples could be on the menu more than once in a week. Romaine lettuce. They have six secondary - middle school, high school buildings. For one day they're using 120 pounds of lettuce. Bananas. Again, not something that's locally grown, but they're looking at 30. So in all the, if they'd put bananas on the menu for all 23 buildings, they're looking at about 30 cases of the 150 count petite bananas. To put that on the menu. And they spend over $100,000 on fresh produce each year. So a real opportunity for increasing sales there. Okay. I would be remiss if I didn't talk about that USDA foods in the school meals programs because this has a direct budget influence. So USDA Foods, formerly known as commodities, are actual tangible foods that the USDA purchases on the School Food Authorities behalf. One of the original goals of the National School Lunch Program was to help balance markets and buy surplus from American farmers and promote American agriculture. And this continues. Today is still an important piece of it buy American, is very important in the program. So schools get an entitlement and bank account each year and it can lower the sponsors food costs by as much as 25%. So this entitlement amount is figured by taking the number of the student lunches claimed last year. So last school years lunch counts multiplied by the current commodity rate, which is currently $0.26. And then there's also the, we add an additional USDA funding from 12% provision and the breakfast commodities. So that brings up for this year, our total. The current rate is 39.75 cents. So the meals that they, the lunch meals that they serve last year times this commodity, 39.75, cents gives the entitlement balance or amount that a school gets to spend on USDA Foods for the current school year. So it gives you an idea, some of those figures, a tiny RCCI or ISD, that the residential care facility might have 20 to 50 kids in it or something like that. They're gonna get about $3,500 to spend on USDA Foods. Average for a small Public School District, $17,000. Medium school district, $130,000 for the year. A larger district, $360,000 to spend. Some of our largest school districts like Grand Rapids Public Schools or Utica has gets over $800,000 a year to spend on USDA foods. So the entitlement can be spent on kinda three different categories of food. We have brown box, which is non processed, and this is the more traditional USDA foods. Canned fruit, frozen vegetables, pasta, grain, much more basic supplies. And then in the last 20 years, the processed foods have increased significantly. And so then schools are able to actually use entitlement dollars to pay for part of their Tyson chicken nuggets and different things that come from food manufacturers. And the idea is that they provide, the school is providing the chicken to tyson to make the chicken nuggets and then they get a discount because of the chicken that was supplied when they buy it from their distributor. Then the third category is the DoD Fresh Produce. DoD is stands for Department of Defense. Talk more about that in just a second. But Michigan's USDA Foods entitlement is approximately $54 million. $54 million. That's a lot of money. But still only about 25% of the total school food budget. Out of that $54 million 20% goes to the DoD Fresh Produce program. So schools can use their entitlement dollars to help to keep the cost down by buying fresh produce. So USDA does the procurement for DoD and does not have ordering minimums. Some of the items available, apples, apple slices, orange, orange wedges, pears, cauliflower, broccoli, grapes, grape tomatoes, and peppers. Michigan schools buy 34 different varieties of produce through the DOD program. So if the idea of becoming a USDA Foods processor or vendor intrigues you, let me give you a little bit more information. We currently only have national level processors, which means that the USDA does all the bank and bonds, certifications, insurance stuff, food safety inspections, all of those kinds of things that are required. An example of a Michigan processor is cherry central. It's different than cheery capital. And they sell applesauce and fruit snacks through USDA Foods program. The DoD vendor is actually part of the Federal Department of Defense Procurement. Procurement that covers native and tribal communities, military bases, and schools. The only way to become a vendor for DoD is to respond to the RFP or request for proposal. But the award you would have to be able to service the entire state with all different types of produce. So it is a very big commitment to sign up for DoD. Michigan does not currently offer brown box fresh items because we would have to order an entire truck of one item in that program. They don't allow multi order trucks. So that's why the DoD program works well for our state in our system. There is USDA household programs, the emergency food assistance program, TFAB, and CSFP, oh I'm completely blanking on what that stands for is for people that are 60 years and over, low-income, they get a food box on a monthly basis. So the household programs do allow for multi orders, meaning that different types of foods come on one truck. And they are also currently operating a Farm to Food Bank program. I think the household programs would be your best fit for Michigan farms to get involved with USDA Foods if that was of interest to you. And we do have a link. And Mariel put it in the chat about USDA foods and how to become a USDA Foods vendor if that is something that is of interest to you. Okay. One of the challenges of the pandemic was the difficulties with the supply chains. And this definitely turned into an opportunity because many schools did turn to local farms for food purchases. Some who had never done it before, gave it a try. Others who had some relationships likely increased their volume. There's much more openness to local purchasing now. So I encourage you to reach out to schools near you. They might be more open and willing. And another reason for schools and another opportunity for schools to buy local is a unique program we have in Michigan called $0.10 a meal for Michigan's kids and farms. And hopefully you've heard of it. It started as a pilot project a number of years ago and it was just in the Northwest part of the state, but now, But last year it was added as an actual program and no longer a pilot in the Michigan State Aid budget. And it is statewide for schools as well as early childcare centers. It has a 9.3 million dollar budget. It was set up as a matching grant so the schools get money back for buying Michigan. Michigan grown minimally processed fruits, vegetables, and dry beans. The program year runs from September 1st through August 31st, but a neat opportunity for schools to get money back for buying local. There are a number of program goals. First being an investment in local purchasing sponsors do have to submit invoices that include farm name and farm location. So if you are dealing directly with a school, that makes it really easy, have your, provide a receipt with your farm name and excuse me, location and what they purchased and the school submits those to the state, It has a goal of community and economic development. It keeps those dollars in our state and we are seeing that that is proven true. Farm to institution partnerships. There are many people in groups working together to grow the buy local opportunities. And this is certainly strengthening those relationships. Then education and marketing. It helps kids know where their food comes from and honestly they're more likely to eat the food when they're like that they know that it came from a nearby farm or maybe even a student in the third grade. It's their family's farm. So hey, let's, let's eat the salad today. It was a grown right here. So exciting opportunities on the education side of it as well. If you go to the tencentsmichigan.org website, you can find this map that has participating schools and childcare centers. There's a lot of blue dots on that, but there's also a lot of green space too. So if you're near one of those blue dots, reach out to your local school and see about working with them. But maybe if you're in an area that is more green, again, reach out to your local school and say, Hey, I'd love to be able to sell you some local produce and you can participate in the $0.10 meal program and get money back for it too. So it's a win-win all the way around. Okay. I'm almost done with my part of the program, but I wanted to mention Michigan Department of Education has a number of online trainings that are available on our website website, on the screen, as well as the QR code that you can scan. I've just listed three that might be of interest to you, that procurement 101 Since we do handle government federal funds, there are certainly rules and regulations that need to be followed with buying and selling. And so reviewing the procurement 101 training might be helpful if you want to learn more about the meal pattern, which is what I talked about a lot. There are lunch and breakfast meal pattern trainings that you can do. And then we do have a $0.10 a meal for Michigan's farms and kids training. So if that is not a program that you're familiar with, you can review that and learn more. So that is all that I have for today and I will pass it back to Mariel. Great, Thanks Emily. Okay, so I am going to share my screen here. Whoops, I'm on the wrong slide. There we go. Okay, so now we're going to take what Emily just shared with us and figure out how this applies to your farm. So talking about specific pricing strategies that you can utilize to be able to fit within those confines of the school meal cost per tray essentially. So to understand pricing on your side of things, one of the things to know is that most school meal programs follows some sort of bidding or contracting process. So there's generally a process of going through a solicitation and there will be somewhat strict pricing that they are working from on their side. However, there's always wiggle room. Especially given some of these fantastic programs like $0.10 a meal. The really big piece of this is building a relationship with your local schools and having conversations with them before you even get into the pricing and solicitation process. Because oftentimes schools really want to support local farms. And so they'll, they'll work with you to figure out how to make sure that they're meeting their needs for pricing, but that you are also able to work with them. But in general, you're going to be looking at wholesale pricing. So if you're typically selling now in direct-to-consumer markets, this is going to be about 30% less than what you're typically offering. So that's kind of a rule of thumb. It's not hard, as hard and fast. Generally, the price seals start with for wholesale marketing is about 30% less than your direct retail price. I will post in the chat after I'm done with my slides, a resource for the USDA Agricultural Marketing Service. They have listings of pricing. They have some general guides for wholesale pricing, and then they have regional terminal market wholesale prices. So you can get a sense of what the going wholesale rates are for different commodities around the country. However, two really important pieces here. Your price point is your price point. While you're looking at these other wholesale prices in the market, it's really important that you know what your costs of production are. Because we want to sell to schools, we want kids to eat great food, but we wanna keep our farms viable also. So you need to be able to sell at a price that is fair and dependent on your cost of production. So you're not losing money on these sales. And you have value beside those generic wholesale prices. So communicate that value to the food service directors that you're working with. And oftentimes they have a sense of these values too, but it's important to name them. So what you can offer from a standpoint of locally grown, fresh, great tasting produce, high-quality, flexible delivery, whatever those values are that you are able to offer, make sure that you highlight those and those conversations with food service directors, those that were in yesterday's session, Abby talked a little bit about these kind of possible supply chain pieces. So you can sell directly to a farm. And this slide was taken from the $0.10 a meal programs. So that's why it says $0.10 grantee. But you can just as easily put school there. You can sell directly to a farm. You can sell to the vendor distributor. That will then sell to the farm. Where you can sell to an intermediary like a broker that will sell to a vendor distributor and then to send then sent to the school. Every time you add in one of those other pieces, obviously, they're going to take a cut. So this is something as you're coming through and figuring out your pricing strategy to keep in mind, if you do want to sell through a third party to the school, That's needs to be considered in your pricing strategy as well to make sure that you're capturing enough, that you're covering your costs and hopefully making some profit too. One of the things to note is that as you saw by those meal prices, farm to school is not a high profit margin. This isn't the place that you're gonna go and make the most money. But it is a high-volume sale, especially if you have some of those larger school districts in your area. And it's generally reliable once you build a relationship with the school, they love having your produce, want to keep buying from you. So there are benefits to it, but it's not going to be your most lucrative sales channel. The other thing is, it's important to work with the school to determine what products are good fit for the Farm to School program. Some of your higher value, higher cost of production items are probably not a good fit, but things that you can produce at a low cost and produce a lot of are probably a good fit for schools. And we know that there are some more popular items, obviously apples and carrots have been mentioned. You can also try out things in smaller quantities with schools to see how the kids accept them and figure out if that might be a good product as well. But the bottom line is, it's really important to know your cost of production. I think I said this on every slide. It's important to know whether this product is a good fit due to these tight margins in the school market. So it's important to know your break-even price for the products and then compare that to what the schools can pay. So figuring out on your end how much it costs to make a product and how that looks compared to what they can pay. But again, those relationships and conversations are super important. So as Emily mentioned, sometimes they, individuals, schools may be willing to pay more per item to have that local item on the plates. So I think the example was with fruit and vegetables. It's typically about $0.25 per serving, but they may be willing to go up to $0.50 per serving to support a local farm. Those are the kinds of conversations that are important to have. Also, if they're participating in $0.10 a meal program, they will have more funds to go toward those components. That program covers fruits, vegetables, and legumes. So that's another big piece. And if they're not participating in the $0.10 a meal program, I would highly encourage them to do that. And we have resources within MSU Extension and the Michigan Farm to institution network to support schools in filling out those applications. Okay, So the nitty-gritty of determining your cost of production. The number one thing is if you don't already have a good record keeping system to figure out how much money you have going out and coming into your farm. This is a really a key piece to establish. Once you have good records, then you can do all these other types of calculations. So the break-even calculation, There's a couple of ways you can approach that. You can use the break-even calculation to determine the yield that you need to cover your costs at a given price point. So you can take that price point that the school is able to pay. And then figuring out how many, how many you would need to supply them in order to cover costs and see if that matches up with their demand. You can also use a break-even calculation to determine the price you need to cover the costs at a given output so you know their quantity that they need. And you can figure out what is that price you need to charge to be able to cover your costs. That's one of the key calculations. You'll want to be able to figure out how to do. We have a team at MSU Extension that provides resources for calculating the break-even price. And I will put the link to that team and their resources in the chat. Then the next level up is to do some Enterprise Budgeting. And Enterprise Budgeting is really a forecasting tool. And this takes a look at, and generally an individual fruit or vegetable crop where you can put in all the numbers from your record keeping or from industry numbers to be able to forecast not only your revenue and expenses. So kind of figuring out that breakeven, but also taking into consideration some of your other costs that you may not be considering in order to calculate your economic profit. So we don't have time to go into the details of these financial tools today. But we have these services available at MSU Extension to be able to help you. But again, the key is having good records to begin with. So we also have people to help if you don't have a good record keeping system yet. So that's really the first step, is get your record keeping down for knowing how your expenses are comparing to your revenues. And then you can do some of these more sophisticated calculations to make sure that you know your cost of production. So we have, again, like I said, some great resources. I'll link these in the chat. We have the farm records book for management, and this is available both as a print version and a spreadsheet version so that you can work on taking great records of your finances if you don't already have a system in place. We also have a series of Bulletins and recorded webinars on, as part of the Beginning Farmer DEMaND series that covers a lot of these financial topics. And we have people that you can talk to you about any of these things who can actually help work through your numbers and help you do some of these calculations. And that is our farm business management team. Wanted to provide our contact information for you to be able to follow up with either Emily or myself with questions that you may have about school meal programs, about pricing, about resources to help you figure out what you can charge based on or what you need to charge based on your cost of production. And also to help connect you with schools in your area that may be looking to purchase from local farms. So if it's a question about farm finances, figuring out your cost of production, I'll connect you to the farm business management person in your area. If it's a question about getting connected with schools and building those relationships, it will be myself, if, if you're in Southwest Michigan or somebody from my team that will help you with those resources. And then any questions about the school side of things. I would direct you to Emily for those. It's not an all or nothing thing with working with schools because I know plenty of directors that like one time a month. Okay, we're gonna feature cucumbers on our menu from this local farm. And they would kind of let everybody give it a try or have a day where like all of our fruits and vegetables are locally grown just like once a month or once a week. So it doesn't have to be from nothing to like, Oh, we're supplying the lettuce for all schools every single day. So it's about building those relationships and having the conversation. So I just wanted to throw that out there. Yes. Does anybody have any questions for us? Has anyone sold to schools in the past and how any questions about how that went or ideas to share about what worked and what didn't work. I know buying local is something that many food service directors want to do. And it just getting started, can, hard for you hard for them, but don't be afraid to reach out and get the conversation going. Okay. So not yet, just trying to get a feel for the area. Yeah. Tim, are you selling to direct markets currently? Sold to schools last year. We sold broccoli and watermelon direct to ECE. Awesome. Yeah, we didn't talk much about the ECE market. So ECE stands for early care and education. And those tend to be a little bit smaller on average than the school markets. These are places like preschools, daycare centers, even in home daycares. And they also have some USDA Child Nutrition Programs as well. And we have a session actually next week on Friday at the same time that we'll talk about some of the specifics of those markets. If you are curious to learn more and sometimes those can be really good entry point for just getting started in selling to schools. Because yeah, tends to be smaller quantities. You can test out different things. Oh, awesome. You're going to attend. Yeah. Okay. And early childcare are eligible for $0.10 a meal as well. So they can get those dollars to yeah, That's such an awesome program. And it's it's worked really well, which is why we continue to get it funded. In Michigan, it's now part of our state aid budget. Okay, great. Yeah. So timeless. They have a CSA farm. Yeah, so It's quite different from CSA farm, but it's a great way to diversify your sales and also to kinda get your farm name out there. And have folks know that you're part of the community and serve kids healthy food. Yeah, The biggest difference probably is figuring out that the pricing for wholesale versus direct and how to make that sustainable for your farm. That's our number one goal. We want small farms to continue to thrive and make sure that you're doing well financially so that we can continue to provide healthy food for the community.