USDA awards $668K for cheese processing, highlighting agricultural support and food donation commodities

Contract Overview

Contract Amount: $668,151 ($668.2K)

Contractor: Associated Milk Producers Inc

Awarding Agency: Department of Agriculture

Start Date: 2026-02-20

End Date: 2026-04-30

Contract Duration: 69 days

Daily Burn Rate: $9.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011204/4400002534/4100033842/CHEESE PROCESS YEL SLC LVS-6/5 LB,CHEESE PROCESS WHT SLC LVS-6/5 LB

Place of Performance

Location: PORTAGE, COLUMBIA County, WISCONSIN, 53901

State: Wisconsin Government Spending

Plain-Language Summary

Department of Agriculture obligated $668,151 to ASSOCIATED MILK PRODUCERS INC for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011204/4400002534/4100033842/CHEESE PROCESS YEL SLC LVS-6/5 LB,CHEESE PROCESS WHT SLC LVS-6/5 LB Key points: 1. Contract supports essential food donation programs through the procurement of processed cheese. 2. Competition was robust, indicating a healthy market for these agricultural commodities. 3. The fixed-price contract with economic price adjustment offers some cost certainty while accounting for market fluctuations. 4. This award falls within the broader context of agricultural marketing and support services provided by the USDA. 5. The duration of the delivery order is relatively short, focusing on immediate needs. 6. The contractor, Associated Milk Producers Inc., is a significant player in the dairy sector.

Value Assessment

Rating: good

The award amount of $668,151 for processed cheese appears reasonable given the quantity and type of commodity. Benchmarking against similar USDA food donation procurements would provide a more precise value-for-money assessment. The fixed-price with economic price adjustment structure is common for agricultural commodities to mitigate market volatility.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of 4 bidders (as indicated by 'no': 4) points to a competitive market for processed cheese for government food donations. This level of competition is generally favorable for price discovery and ensuring the government receives competitive pricing.

Taxpayer Impact: Full and open competition ensures that taxpayer dollars are used efficiently by driving down prices through market forces. A competitive bidding process for essential food commodities helps maximize the quantity of food that can be procured for donation programs.

Public Impact

Beneficiaries include recipients of U.S. government food donation programs, such as food banks and charitable organizations. The service delivered is the provision of processed cheese, a key component in various food assistance initiatives. The geographic impact is national, as these commodities are distributed through federal programs across the United States. This contract supports the agricultural workforce involved in dairy farming and cheese processing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to economic price adjustment clause if market conditions fluctuate significantly.
Reliance on a single delivery order for a specific commodity may not reflect long-term strategic sourcing needs.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
Contract supports vital federal food donation programs.
Contractor is a known entity in the dairy cooperative sector.

Sector Analysis

This contract falls within the broader agricultural sector, specifically the dairy processing sub-sector. The market for processed cheese is substantial, driven by both commercial and government demand. The USDA's Agricultural Marketing Service frequently procures commodities like cheese to support domestic food assistance programs, often utilizing fixed-price contracts with adjustments to manage market volatility. Comparable spending benchmarks would involve analyzing other USDA procurements for similar dairy products under food donation or commodity purchase programs.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a small business set-aside. While the primary awardee is a large cooperative, there may be opportunities for small businesses to participate as subcontractors within the supply chain for Associated Milk Producers Inc., though this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would primarily reside with the USDA's Agricultural Marketing Service, which is responsible for managing food purchase programs. Accountability measures are embedded in the contract terms, including delivery schedules and product specifications. Transparency is facilitated through public contract databases where such awards are reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

USDA Food Purchase Programs
National School Lunch Program
Commodity Supplemental Food Program
Food and Nutrition Service Programs

Risk Flags

Potential for price volatility due to economic price adjustment clause.
Reliance on a single delivery order may not reflect long-term supply chain resilience.

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $668,151 to ASSOCIATED MILK PRODUCERS INC. COMMODITIES FOR USG FOOD DONATIONS: 2000011204/4400002534/4100033842/CHEESE PROCESS YEL SLC LVS-6/5 LB,CHEESE PROCESS WHT SLC LVS-6/5 LB

Who is the contractor on this award?

The obligated recipient is ASSOCIATED MILK PRODUCERS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $668,151.

What is the period of performance?

Start: 2026-02-20. End: 2026-04-30.

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

Historical spending data for processed cheese procurement by the USDA can be analyzed through various federal contract databases. The Agricultural Marketing Service (AMS) is a primary agency involved in these purchases, often as part of programs like the Food Purchase Program. Spending can fluctuate year-to-year based on appropriations, program needs, and market prices for dairy commodities. For instance, during periods of agricultural surplus or increased demand for food assistance, procurement volumes and associated spending may rise. Analyzing data over the past 5-10 years would reveal trends, identify peak spending periods, and highlight any significant shifts in procurement strategies or contract types used for cheese.

How does the price of cheese in this contract compare to market rates at the time of award?

To compare the price of cheese in this contract to market rates, one would need to identify the specific type and quality of processed cheese procured and the exact award date. Market rates can be benchmarked against indices from the U.S. Bureau of Labor Statistics (BLS) for dairy products, or specific commodity market reports from organizations like the USDA's Agricultural Marketing Service (AMS) or private market analysis firms. The contract's 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' (FPEPA) clause complicates a direct comparison, as the final price may vary. However, the base price at the time of award can be compared to prevailing wholesale or commodity market prices for similar cheese products to assess initial value. A significant deviation from market rates, even with the adjustment clause, could indicate potential overpricing or underpricing.

What is the track record of Associated Milk Producers Inc. in fulfilling government contracts?

Associated Milk Producers Inc. (AMPI) is a large dairy cooperative with a significant history of supplying dairy products. Their track record in fulfilling government contracts, particularly with the USDA, is generally extensive. Government contract databases would show their past awards, performance ratings, and any instances of contract disputes or terminations. As a major player in the dairy industry, AMPI has likely supplied numerous commodities for various federal programs, including food donations and school lunch programs. A review of their contract history would assess their reliability, compliance with specifications, and overall performance in meeting government requirements.

What is the overall effectiveness of USDA food donation programs that utilize these cheese commodities?

The effectiveness of USDA food donation programs is typically measured by their ability to reduce food insecurity, support agricultural markets, and provide nutritious food to eligible populations. Programs utilizing commodities like processed cheese aim to offer a staple protein source. Effectiveness can be assessed through metrics such as the volume of food distributed, the number of individuals or households served, and participant feedback on food quality and utility. While direct impact on recipients is key, the programs also serve to stabilize agricultural markets by purchasing surplus commodities. Evaluating the specific contribution of cheese within the broader basket of donated foods provides insight into its role in meeting nutritional guidelines and recipient preferences.

Are there any significant risks associated with the supply chain for this specific type of processed cheese?

Risks associated with the supply chain for processed cheese can include fluctuations in raw milk prices, potential disruptions in dairy processing operations (e.g., due to labor shortages, equipment failures, or regulatory changes), and transportation challenges. The 'economic price adjustment' clause in this contract aims to mitigate some of the price volatility risk. However, unforeseen events like extreme weather impacting dairy herds, or widespread processing plant issues, could still lead to supply shortages or significant price spikes beyond the adjustment's scope. The geographic concentration of dairy production and processing facilities could also present localized risks. A thorough risk assessment would involve examining the specific production locations, transportation routes, and the contractor's contingency plans.

Industry Classification

NAICS: Manufacturing › Dairy Product Manufacturing › Cheese Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 123J1426B0130

Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 315 N BROADWAY ST, NEW ULM, MN, 56073

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

Financial Breakdown

Contract Ceiling: $668,151

Exercised Options: $668,151

Current Obligation: $668,151

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 123J1426D0003

IDV Type: IDC

Timeline