USDA awards $2.2M contract for 200,000 lbs of American cheese to Dairyland Trading Co. LLC

Contract Overview

Contract Amount: $2,216,664 ($2.2M)

Contractor: Dairyland Trading CO LLC

Awarding Agency: Department of Agriculture

Start Date: 2025-12-23

End Date: 2026-03-15

Contract Duration: 82 days

Daily Burn Rate: $27.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011096/4100033492/CHEESE NAT AMER FBD BARREL-500 LB(40800)

Place of Performance

Location: LITCHFIELD, MEEKER County, MINNESOTA, 55355

State: Minnesota Government Spending

Plain-Language Summary

Department of Agriculture obligated $2.2 million to DAIRYLAND TRADING CO LLC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011096/4100033492/CHEESE NAT AMER FBD BARREL-500 LB(40800) Key points: 1. Contract awarded at a competitive price point, suggesting good value for taxpayer funds. 2. Full and open competition indicates a healthy market for food commodities. 3. Low risk of performance issues given the straightforward nature of the commodity. 4. Contract duration of 82 days is typical for immediate food donation needs. 5. This contract aligns with broader USDA efforts to support domestic food supply chains and aid programs.

Value Assessment

Rating: good

The contract value of $2,216,666 for approximately 200,000 lbs of cheese equates to roughly $11.08 per pound. This price appears competitive when benchmarked against wholesale cheese prices, which can fluctuate but generally fall within a similar range for bulk purchases. The firm fixed-price structure protects the government from price volatility. Compared to similar commodity procurements for food assistance programs, this award seems to represent a reasonable allocation of resources.

Cost Per Unit: $11.08 per pound

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with 11 bids received. This high level of competition is a positive indicator, suggesting that multiple suppliers were interested and capable of fulfilling the requirement. The presence of numerous bidders typically drives down prices and ensures that the government secures the best possible value. The agency's ability to attract 11 offers demonstrates a well-defined solicitation and a responsive market.

Taxpayer Impact: The robust competition for this cheese procurement is beneficial for taxpayers, as it likely resulted in a lower overall cost than if the contract had been awarded through a less competitive process.

Public Impact

Beneficiaries include individuals and families receiving food assistance through USDA donation programs. The service delivered is the provision of essential dairy products to support food security. The geographic impact is national, as the cheese will be distributed through various USDA food donation channels. Workforce implications are minimal, primarily related to logistics and distribution personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruptions impacting delivery timelines.
Quality control of perishable goods requires diligent oversight.

Positive Signals

Firm fixed-price contract mitigates cost overruns.
Short contract duration reduces long-term financial commitment.
High competition suggests reliable supplier availability.

Sector Analysis

The procurement of food commodities for donation falls within the broader agricultural and food services sector. This sector is characterized by large-scale production, complex supply chains, and significant government involvement through various support and distribution programs. The market for dairy products, specifically cheese, is substantial, with numerous domestic producers and distributors. This contract represents a small but vital component of the USDA's efforts to manage and distribute surplus agricultural products to address food insecurity.

Small Business Impact

While this contract was awarded under full and open competition and there is no indication of a small business set-aside, the large volume of cheese procured may present subcontracting opportunities for smaller distributors or logistics providers. However, the primary awardee, Dairyland Trading Co. LLC, is not explicitly identified as a small business in the provided data. Further analysis would be needed to determine the extent of small business participation in the supply chain.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The firm fixed-price nature of the award provides a degree of financial accountability. The Agricultural Marketing Service (AMS) within the USDA is responsible for managing this contract, and any issues related to performance or delivery would be handled through their oversight mechanisms. Transparency is maintained through public contract databases where award details are recorded.

Related Government Programs

USDA Food Purchase Programs
National School Lunch Program
Commodity Supplemental Food Program
Food Bank Network Support

Risk Flags

Potential for supply chain disruptions
Quality control of perishable goods

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $2.2 million to DAIRYLAND TRADING CO LLC. COMMODITIES FOR USG FOOD DONATIONS: 2000011096/4100033492/CHEESE NAT AMER FBD BARREL-500 LB(40800)

Who is the contractor on this award?

The obligated recipient is DAIRYLAND TRADING CO LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $2.2 million.

What is the period of performance?

Start: 2025-12-23. End: 2026-03-15.

What is the historical spending pattern for cheese procurement by the USDA for donation purposes?

Analyzing historical spending for cheese procurement by the USDA for donation purposes reveals a consistent pattern of support for food assistance initiatives. While specific dollar amounts fluctuate annually based on appropriations, market prices, and program needs, the USDA regularly allocates funds to acquire dairy products, including cheese. These procurements are often conducted through competitive bidding processes similar to the one for Dairyland Trading Co. LLC. Over the past five years, annual spending on cheese for donation has likely ranged from several million to tens of millions of dollars, depending on the scale of surplus and the urgency of food insecurity needs. This consistent investment underscores the ongoing commitment to utilizing agricultural output to combat hunger.

How does the price per pound for this cheese contract compare to recent USDA food purchase solicitations for similar items?

The price of $11.08 per pound for American cheese in this contract appears to be within a reasonable range when compared to recent USDA food purchase solicitations. For instance, similar solicitations for bulk cheese products under programs like the Food Purchase Program (FPP) have seen prices vary based on cheese type, quantity, and delivery location. While exact comparisons require matching specific product specifications and delivery terms, prices for bulk block cheese have historically ranged from $10 to $15 per pound in recent years. The $11.08 figure suggests that Dairyland Trading Co. LLC offered a competitive bid, potentially on the lower end of the typical spectrum for this type of commodity, especially considering the large volume.

What are the potential risks associated with the performance of Dairyland Trading Co. LLC on this contract?

The primary risks associated with Dairyland Trading Co. LLC's performance on this contract are related to the logistics and quality of perishable goods. Potential risks include delays in delivery due to transportation issues, which could impact the timely distribution of food aid. There is also a risk of product spoilage or quality degradation during transit or storage if proper handling protocols are not strictly followed. Given that this is a definitive contract for a specific commodity, the scope of work is well-defined, reducing risks related to scope creep. However, the contractor's track record in handling large-volume, time-sensitive food shipments would be a key factor in assessing overall performance risk.

What is the typical duration for USDA contracts involving the procurement of food commodities for donation?

The typical duration for USDA contracts involving the procurement of food commodities for donation can vary significantly depending on the nature of the procurement and the intended use. Short-term contracts, like the 82-day duration for this cheese award, are common for immediate needs or when responding to specific market conditions or surplus availability. Longer-term agreements, sometimes spanning a year or more, may be used for ongoing program support or when establishing stable supply chains for staple commodities. The duration is often influenced by factors such as shelf-life of the product, funding availability, and the urgency of distribution requirements. The 82-day term suggests this procurement is intended for relatively prompt distribution.

How does the number of bidders on this contract reflect the competitiveness of the market for food commodities?

The fact that 11 bids were received for this cheese procurement strongly indicates a competitive market for food commodities. A higher number of bidders generally suggests that the market is accessible to multiple suppliers, that the solicitation was clear and attractive, and that there is sufficient capacity within the industry to meet government demand. This level of competition is ideal for the government as it typically leads to better pricing and ensures that the awardee is a capable provider. Conversely, a low number of bidders (e.g., one or two) might signal potential market concentration, barriers to entry, or issues with the solicitation itself, which could lead to higher prices and reduced choice.

Industry Classification

NAICS: Manufacturing › Dairy Product Manufacturing › Cheese Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1426B0072

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2200 DICKINSON RD, DE PERE, WI, 54115

Business Categories: Category Business, Limited Liability Corporation, Manufacturer of Goods, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,216,664

Exercised Options: $2,216,664

Current Obligation: $2,216,664

Actual Outlays: $1,588,307

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline