USDA awards $12.8M contract for frozen beef to Cherry Meat Packers, Inc. for 81 days

Contract Overview

Contract Amount: $12,834,940 ($12.8M)

Contractor: Cherry Meat Packers, Inc

Awarding Agency: Department of Agriculture

Start Date: 2026-01-09

End Date: 2026-03-31

Contract Duration: 81 days

Daily Burn Rate: $158.5K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011102/4100033559/BEEF 100% PTY 85/15 FRZ 2.0MMA CTN-40 LB,BEEF FINE GROUND FRZ CTN-40 LB,BEEF FINE GROUND FRZ PKG-40/1 LB

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60632

State: Illinois Government Spending

Plain-Language Summary

Department of Agriculture obligated $12.8 million to CHERRY MEAT PACKERS, INC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011102/4100033559/BEEF 100% PTY 85/15 FRZ 2.0MMA CTN-40 LB,BEEF FINE GROUND FRZ CTN-40 LB,BEEF FINE GROUND FRZ PKG-40/1 LB Key points: 1. Contract awarded on a firm fixed-price basis, indicating price certainty for the government. 2. The contract duration is relatively short at 81 days, suggesting a specific, immediate need. 3. The award was made under full and open competition after exclusion of sources, implying a competitive process with some initial limitations. 4. The North American Industry Classification System (NAICS) code 311611 points to the animal slaughtering sector. 5. The contract is for commodities used in USG food donations, highlighting its role in humanitarian or aid programs. 6. The contractor, Cherry Meat Packers, Inc., has secured this award, indicating their capability to meet the specified requirements. 7. The contract value of $12.8 million is a significant investment in food commodities for donation purposes.

Value Assessment

Rating: good

The contract value of $12.8 million for 81 days of beef supply appears reasonable given the quantity and type of commodity specified. Benchmarking against similar food donation contracts would provide a more precise value-for-money assessment. The firm fixed-price structure helps control costs for the government. Without specific per-pound pricing or detailed commodity specifications, a definitive value comparison is challenging, but the overall award size suggests a substantial procurement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This suggests that while the competition was generally open, there might have been an initial exclusion of certain sources before the final competitive process. The presence of 8 bids indicates a healthy level of interest and competition for this specific requirement. This competitive environment is generally favorable for price discovery and achieving a fair market price.

Taxpayer Impact: The competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down prices through market forces. A higher number of bidders typically leads to better pricing outcomes for the government.

Public Impact

Beneficiaries of this contract are individuals and families receiving food assistance through USG donation programs. The services delivered involve the supply of essential protein commodities (frozen beef) for these programs. The geographic impact is likely national, supporting food banks and distribution networks across the United States. The contract supports the agricultural sector, specifically meat processing and slaughtering facilities, potentially impacting local employment in those areas.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price fluctuations in the beef market impacting the fixed-price contract if commodity costs rise significantly.
Logistical challenges in distributing perishable frozen goods across various donation points.
Ensuring consistent quality and adherence to specifications for donated food products.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Award to an established meat packer suggests reliability in supply.
The contract supports a vital government program for food security and donation.

Sector Analysis

This contract falls within the Food Manufacturing sector, specifically Animal (except Poultry) Slaughtering and Processing. The market for food commodities, especially for government programs, is substantial. This procurement aligns with broader government efforts to support domestic agriculture and provide nutritional assistance. Comparable spending benchmarks would involve analyzing other large-scale food commodity contracts awarded by agencies like USDA for donation or feeding programs.

Small Business Impact

The contract was awarded to Cherry Meat Packers, Inc. and there is no indication of a small business set-aside (ss: false) or that small businesses are specifically included as subcontractors (sb: false). This suggests the primary award was not targeted towards small businesses. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would likely fall under the Agricultural Marketing Service (AMS) of the USDA, which is responsible for procurement and distribution of agricultural commodities. Accountability measures are inherent in the firm fixed-price contract terms, requiring delivery of specified goods. Transparency is facilitated by the public nature of federal contract awards, though detailed performance metrics may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

USDA Food Donation Programs
National School Lunch Program (NSLP) commodities
Commodity Supplemental Food Program (CSFP)
Emergency Food Assistance Program (TEFAP)

Risk Flags

Potential for price volatility in commodity markets.
Ensuring consistent quality and safety of food products.
Logistical complexities of cold chain management.
Dependence on agricultural supply chains.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $12.8 million to CHERRY MEAT PACKERS, INC. COMMODITIES FOR USG FOOD DONATIONS: 2000011102/4100033559/BEEF 100% PTY 85/15 FRZ 2.0MMA CTN-40 LB,BEEF FINE GROUND FRZ CTN-40 LB,BEEF FINE GROUND FRZ PKG-40/1 LB

Who is the contractor on this award?

The obligated recipient is CHERRY MEAT PACKERS, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $12.8 million.

What is the period of performance?

Start: 2026-01-09. End: 2026-03-31.

What is the historical spending pattern of the Agricultural Marketing Service (AMS) on beef commodities for donation programs?

Analyzing the historical spending of the AMS on beef commodities for donation programs requires access to detailed procurement data over several fiscal years. Typically, agencies like AMS procure large quantities of food items to support various domestic nutrition assistance programs. Spending patterns can fluctuate based on agricultural market prices, program needs, and congressional appropriations. For instance, during periods of agricultural surplus or increased demand for food assistance, AMS spending on commodities like beef might increase. Conversely, budget constraints or shifts in program focus could lead to reduced spending. Without specific historical data for this contract's predecessors, it's difficult to provide exact figures, but it's reasonable to assume consistent, albeit variable, procurement of such essential food items to fulfill program mandates.

How does the unit price of beef in this contract compare to market rates for similar quality beef?

Determining the precise unit price and comparing it to market rates requires knowing the exact specifications of the beef (e.g., cut, fat content, grade) and the total quantity procured. The contract specifies 'BEEF 100% PTY 85/15 FRZ 2.0MMA CTN-40 LB' and 'BEEF FINE GROUND FRZ CTN-40 LB'. If we assume the $12.8 million contract covers a specific tonnage, we could derive an average price per pound. Market rates for frozen ground beef can vary significantly based on grade (e.g., USDA Select, Choice), fat content, and supplier. For example, wholesale prices for 85/15 ground beef can range from $2.50 to $4.50 per pound, depending on market conditions and volume. A detailed analysis would involve calculating the implied price per pound from the contract and benchmarking it against current USDA Agricultural Marketing Service (AMS) price reports or other government contract awards for similar commodities.

What are the potential risks associated with procuring frozen beef commodities for donation?

Several risks are associated with procuring frozen beef commodities for donation. Firstly, **supply chain disruptions** can occur due to factors like disease outbreaks (e.g., Avian Influenza, Foot-and-Mouth Disease), labor shortages in processing plants, or transportation issues, potentially impacting delivery timelines. Secondly, **price volatility** in the beef market poses a risk, especially for fixed-price contracts; if market prices surge unexpectedly, the contractor might face reduced profit margins or difficulty sourcing the product at the contracted price. Thirdly, **quality control** is crucial; ensuring the beef meets safety and nutritional standards throughout the cold chain from processing to distribution is paramount to prevent spoilage and ensure recipient safety. Finally, **logistical challenges** in maintaining the cold chain during transportation and storage at distribution points can lead to product loss if not managed effectively.

What is the track record of Cherry Meat Packers, Inc. in fulfilling government contracts, particularly for food commodities?

To assess the track record of Cherry Meat Packers, Inc. in fulfilling government contracts, one would typically consult the Federal Procurement Data System (FPDS) or the Contractor Performance Assessment Reporting System (CPARS). These systems provide information on past contract awards, performance evaluations, and any disputes or terminations. A review would look for the number of previous government contracts awarded to the company, their value, the agencies involved, and the contractor's performance ratings. Positive ratings in CPARS would indicate a history of successful contract completion, while negative ratings or terminations could signal potential performance issues. Without direct access to these specific databases for Cherry Meat Packers, Inc., a definitive assessment of their track record cannot be made here, but it is a standard due diligence step for federal agencies.

How does the duration of this contract (81 days) align with typical procurement cycles for food commodities?

The duration of 81 days (approximately 2.7 months) for this contract is relatively short for a large-scale commodity procurement. Typical procurement cycles for food commodities, especially those intended for ongoing programs like food donations, often involve longer-term agreements, such as one-year contracts with option periods, or multi-year contracts. Short durations like this often indicate an urgent need, a specific project requirement, or a bridge contract to cover a gap until a longer-term procurement is finalized. It could also reflect the seasonal availability of certain beef products or a specific campaign. While shorter contracts can offer flexibility, they may also lead to more frequent administrative overhead for contract management and re-procurement.

Industry Classification

NAICS: Manufacturing › Animal Slaughtering and Processing › Animal (except Poultry) Slaughtering

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SEALED BID

Solicitation ID: 123J1426B0078

Offers Received: 8

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 4750 S CALIFORNIA AVE, CHICAGO, IL, 60632

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $12,834,940

Exercised Options: $12,834,940

Current Obligation: $12,834,940

Actual Outlays: $6,200,507

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline