Source:  Lisa M. Keefe, MEATINGPLACE.COM, 9/2/10

The amount the federal government will pay for ground beef under its commodity purchasing program went up significantly with the latest contracts --- between 18 percent and 25 percent per pound. It is the first such contract awarded since the USDA’s new requirements for ground beef processors went into effect at the beginning of July.

According to the Food Purchase Report posted Thursday on the Web site of the USDA Agricultural Marketing Service, which oversees all commodity purchases for the government’s food and nutrition assistance programs, USDA awarded contracts covering 360,000 pounds of frozen fine ground beef, paying between $2.0175 and $2.3280 per pound.

In the previous contract for the same products, awarded June 17, USDA paid between $1.7066 and $1.8776 per pound. The industry was watching for the new price points, to see what value USDA would place on the additional testing and interventions required by the new standards for suppliers.

A year ago USDA paid between $1.2960 and $1.3922 per pound for fine ground beef; the price rose steadily through June.

The lion’s share of USDA ground beef purchases are used for the National School Lunch Program.
The contracts were let to just two companies: Hanford, Calif.-based Central Valley Meat Co. got a contract for 200,000 pounds, paying between $2.0175 and $2.0899 a pound, and Amarillo, Texas-based Palo Duro Meat Processing got a contract for 160,000 pounds  at between $2.2880 and $2.3280 per pound.

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