Food Procurement by USDA's Farm Service Agency

by James M. MacDonald, Charles Handy, and Gerald Plato

USDA's Farm Service Agency (FSA) purchases food products for distribution through several of the Department's food assistance programs. This report describes FSA purchase methods and compares them to procurement strategies used by other Federal agencies and by private sector firms. It summarizes the principal policy issues faced by FSA in designing procurement strategies. And it uses a detailed statistical analysis to compare FSA prices to those realized in the private sector, and to identify the separate effects of agricultural commodity prices, seasonality, client location, purchase volumes, product characteristics, and competition on FSA product prices.

Keywords: procurement, auctions, food assistance, competition

In this publication...

• Entire Report
• Frontmatter (Title page, Contents, Executive Summary)
• Introduction
• An Overview of Federal Food Procurement Programs
• USDA Domestic Food Procurement: Programs and Expenditures
• FSA Procurement Auctions: How the Process Works
• Issues in USDA Procurement Policies
• Data for Empirical Analyses of FSA Auctions
• Statistical Analysis of Bid Prices for Five FSA Commodities
• Comparing FSA to Commercial Prices
• Conclusions
• Appendix A--Glossary of Acronyms
• Appendix B--Detailed Regression Results--Analyses of Low Bids
• References