USDA awards $12.1M contract for wheat donations, highlighting agricultural commodity procurement needs

Contract Overview

Contract Amount: $12,123,180 ($12.1M)

Contractor: CHS Inc.

Awarding Agency: Department of Agriculture

Start Date: 2026-01-16

End Date: 2026-03-20

Contract Duration: 63 days

Daily Burn Rate: $192.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011135/4210007480/WHEAT, HARD RED WINTER BULK

Place of Performance

Location: KALAMA, COWLITZ County, WASHINGTON, 98625

State: Washington Government Spending

Plain-Language Summary

Department of Agriculture obligated $12.1 million to CHS INC. for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011135/4210007480/WHEAT, HARD RED WINTER BULK Key points: 1. Contract value represents a significant investment in food aid programs. 2. Procurement process involved full and open competition, suggesting a competitive market. 3. Contract duration of 63 days indicates a focused, short-term supply need. 4. The award to CHS INC. signifies a key player in agricultural commodity distribution. 5. Fixed-price contract type aims to control costs and provide budget certainty. 6. Geographic focus on Washington state suggests regional distribution priorities.

Value Assessment

Rating: good

The contract value of $12.1 million for wheat is within a reasonable range for bulk commodity procurement for food donations. Benchmarking against similar large-scale agricultural commodity contracts would provide further context, but the fixed-price nature suggests an effort to secure a predictable cost. The award to a single, established entity like CHS INC. implies a focus on reliable supply chain management for this specific need.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of three bidders (no=3) suggests a healthy level of interest and competition for this type of agricultural commodity contract. This competitive environment is generally favorable for price discovery and potentially securing better terms.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which is expected to drive down costs and ensure the government receives fair market value for the wheat procured for donation programs.

Public Impact

Beneficiaries include individuals and communities receiving food assistance through USDA donation programs. The service delivered is the provision of Hard Red Winter Wheat, a staple commodity. Geographic impact is concentrated in Washington state (st=WA, sn=WASHINGTON), where the wheat will likely be distributed. Workforce implications are primarily within the agricultural supply chain, from farming to logistics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in the global wheat market impacting future procurements.
Logistical challenges in ensuring timely delivery and distribution of the commodity.

Positive Signals

Award to an established agricultural cooperative like CHS INC. suggests supply chain reliability.
Fixed-price contract provides cost certainty for this procurement.
Full and open competition indicates a robust market for this commodity.

Sector Analysis

This contract falls within the broader agricultural sector, specifically focusing on the procurement and distribution of food commodities for federal programs. The market for bulk agricultural commodities is global and subject to various factors including weather, trade policies, and demand. This award represents a specific instance of government purchasing within this large and complex sector, contributing to food security initiatives.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (sb=false). While CHS INC. is a large agricultural cooperative, the procurement process itself does not preclude small businesses from participating as subcontractors. Further analysis would be needed to determine the extent of small business involvement in the supply chain for this specific award.

Oversight & Accountability

The contract is managed by the Department of Agriculture's Agricultural Marketing Service. Oversight mechanisms would include standard contract administration procedures, performance monitoring, and potentially audits to ensure compliance with terms and conditions. Transparency is facilitated through contract award databases.

Related Government Programs

USDA Food Donation Programs
Agricultural Commodity Procurement
Food Aid and Assistance Programs
Farm Bill Programs

Risk Flags

Short contract duration may indicate urgent need or potential for supply gaps.
Reliance on a single vendor for a critical commodity requires robust performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $12.1 million to CHS INC.. COMMODITIES FOR USG FOOD DONATIONS: 2000011135/4210007480/WHEAT, HARD RED WINTER BULK

Who is the contractor on this award?

The obligated recipient is CHS INC..

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Agricultural Marketing Service).

What is the total obligated amount?

The obligated amount is $12.1 million.

What is the period of performance?

Start: 2026-01-16. End: 2026-03-20.

What is the historical spending pattern for similar wheat donation contracts by the USDA?

Analyzing historical spending for similar wheat donation contracts requires accessing and aggregating data from previous fiscal years. This would involve identifying contracts with comparable commodities (e.g., wheat), quantities, and contract types (e.g., firm fixed price, definitive contracts) awarded by the Agricultural Marketing Service or related USDA agencies. Trends in contract values, durations, and awarded vendors over time can reveal patterns in procurement needs, market price fluctuations, and the government's reliance on specific suppliers. For instance, a review might show an increase in contract values due to global market price volatility or a shift towards longer-term agreements if food security needs become more persistent. Understanding these historical patterns is crucial for budgeting, forecasting future requirements, and assessing the current award's value in a long-term context.

How does the awarded price per unit compare to market rates for Hard Red Winter Wheat at the time of award?

To assess the value for money, the awarded price per unit for Hard Red Winter Wheat needs to be benchmarked against prevailing market rates. This involves identifying the contract's total value ($12,123,180) and the estimated quantity of wheat procured (which is not explicitly provided in the summary data but would be a critical factor). Market rates can be obtained from agricultural commodity market reports, futures prices, and data from organizations like the USDA's Economic Research Service or the Chicago Board of Trade around the contract award date. A comparison would determine if the government secured the wheat at a competitive price, considering factors like bulk purchasing discounts, delivery terms, and quality specifications. If the awarded price is significantly above or below market rates, it warrants further investigation into the reasons, such as unique logistical requirements, specific quality standards, or market conditions.

What is the track record of CHS INC. in fulfilling government contracts, particularly for agricultural commodities?

CHS INC. is a large agricultural cooperative with a significant presence in the commodity trading and processing sector. Its track record in fulfilling government contracts, particularly for agricultural commodities, is generally extensive. Government contract databases (like SAM.gov) would provide specific details on past awards, performance history, and any reported issues or successes. For this particular contract, the USDA's Agricultural Marketing Service would have internal data or processes to assess CHS INC.'s past performance, reliability, and capacity to meet the requirements for delivering wheat. A positive past performance record typically reduces perceived risk for the government and contributes to the decision-making process for awarding new contracts.

What are the potential risks associated with the short duration (63 days) of this contract?

The short 63-day duration of this contract for wheat procurement presents several potential risks. Firstly, it implies an urgent or immediate need, which could indicate supply chain disruptions or unforeseen demand surges that the government is responding to. This urgency might limit the time available for thorough market analysis or competitive bidding, potentially leading to less favorable pricing. Secondly, a short-term contract may not allow for the most efficient logistical planning or economies of scale in transportation and distribution, potentially increasing per-unit costs. Finally, if the need for wheat is ongoing beyond this contract period, there's a risk of a gap in supply if a follow-on contract is not secured in a timely manner, impacting the continuity of food donation programs.

How does this contract align with broader USDA objectives for food security and agricultural support?

This contract directly aligns with the USDA's broader objectives related to food security and agricultural support. By procuring wheat for donation programs, the USDA is fulfilling its mandate to alleviate hunger and improve access to nutritious food for vulnerable populations, both domestically and potentially internationally. Furthermore, by purchasing commodities from the agricultural sector, the contract supports American farmers and the agricultural economy. The specific choice of Hard Red Winter Wheat may also reflect dietary needs or program requirements. This procurement action is a tangible mechanism through which the USDA translates policy goals into on-the-ground impact, ensuring the availability of essential food items while also providing a market for agricultural producers.

Industry Classification

NAICS: Manufacturing › Other Food Manufacturing › All Other Miscellaneous Food Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 121NFG26B0001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5500 CENEX DR, INVER GROVE HEIGHTS, MN, 55077

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $12,123,180

Exercised Options: $12,123,180

Current Obligation: $12,123,180

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline