Latest / U.S. Right to Know articles / How food companies turn taxpayer-funded school meals into a market for ultra-processed foods

Transcript

How food companies turn taxpayer-funded school meals into a market for ultra-processed foods · U.S. Right to Know articles

<figure class="wp-block-image size-large"><a href="https://usrtk.org/wp-content/uploads/2026/10/signal-2026-10-26-16-12-33-495_002.jpg"><img src="https://usrtk.org/wp-content/uploads/2026/10/signal-2026-10-26-16-12-33-495_002-1024x683.jpg" alt="" class="wp-image-25799" /></a></figure> Key findings <ul class="wp-block-list"> <li>Ultra-processed food companies heavily market their products and brands through a program that lets schools send fresh USDA-supplied ingredients for processing. Most become convenience foods, including ultra-processed foods, which have been linked to diabetes, obesity, cancer, and other health harms.</li> <li>Researchers say school food is designed to benefit food companies, not children’s health. Schools need investment to build capacity to serve fresh, minimally processed meals, they say. </li> </ul> Tyson Foods markets its “pop-them-in-your-mouth” popcorn chicken bites to school cafeterias, promising they can go from freezer to serving line in minutes. The company also offers school districts a calculator to estimate how much government-supplied chicken and other ingredients to send for processing. Tyson isn't alone. It's part of a much larger system in which public school districts send taxpayer-funded ingredients to private manufacturers, whose products and marketing shape what children eat.  School lunches that start with government-supplied chicken, mozzarella cheese, flour or tomato paste often take this detour and become packaged, mostly <a href="https://usrtk.org/category/ultra-processed-foods/">ultra-processed foods (UPFs)</a> by the time they reach children's plates. “I’m sending my beef [from USDA commodities] to somebody like Don Lee and getting hamburgers. I’m sending my cheese to Schwan and getting, you know, pizza. And I’m sending my chicken to, let’s say, Tyson and getting chicken patties and nuggets,” one school food-service director told researchers conducting a <a href="https://www.cambridge.org/core/journals/public-health-nutrition/article/reducing-ultraprocessed-and-increasing-scratchcooked-school-meals-perceived-barriers-and-facilitators-from-food-service-directors/60E8FF0C3CB680C35CD53DA40E9A4EDC">California-based study</a>. <h2 id="h-serving-children-food-products-not-real-food" class="wp-block-heading">Serving children food products, not real food</h2> Nearly 30 million children and adolescents eat school lunch every day. For many, it is their healthiest and most reliable source of food. That makes the nutritional quality of school meals especially important. Children participating in school meal programs can get up to half their daily calories at school, while ultra-processed foods (UPFs) account for nearly 62% of the calories they consume overall. Some food processing by companies involves simply slicing and packaging items like apples into individual servings. Processing may also involve cooking, freezing, canning or other methods. But ultra-processed foods, such as chicken nuggets, frozen pizzas, and packaged snack bars, are industrially designed <a href="https://usrtk.org/ultra-processed-foods/addictive/">to promote addiction and overconsumption</a>, with high levels of sugar, unhealthy fats, salt, and other additives. <a href="https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(25)01565-X/abstract">Research</a> has tied <a href="https://ajph.aphapublications.org/ultraprocessedfoodssection">UPF consumption</a> to <a href="https://usrtk.org/healthwire/ultra-processed-food-leads-to-obesity-explained/">obesity</a>, <a href="https://fmch.bmj.com/content/14/Suppl_5/e003925">chronic diseases</a>, <a href="https://usrtk.org/ultra-processed-foods/cancer/">cancer</a>, <a href="https://www.bmj.com/content/384/bmj-2023-077310">cardiovascular disease</a>, <a href="https://usrtk.org/ultra-processed-foods/dementia-alzheimers/">cognitive impairment</a>, <a href="https://usrtk.org/ultra-processed-foods/addictive/"></a>and other <a href="https://usrtk.org/healthwire/how-ultra-processed-foods-damage-health/">health problems</a>.  Schools rely on these products to stretch budgets and cope with limited kitchen capacity, but federal nutrition standards do not account for the degree of food processing.  The result, researchers say, is a system that can meet government nutrition requirements while leaving ultra-processed foods on children’s trays — raising questions about whose interests the program serves and whether public dollars support children’s health or Big Food’s bottom line. School meals don’t just feed children. They also help establish expectations about food, says renowned nutritionist Marion Nestle. “The chief beneficiaries are the producers of the ultra-processed products, obviously,” said Nestle, the Paulette Goddard Professor of Nutrition, Food Studies, and Public Health, Emerita, at New York University. “They benefit financially, but also by teaching children that they are supposed to eat food products, not real food.” <h2 id="h-staggering-amounts-of-usda-ingredients-diverted-for-processing-nbsp" class="wp-block-heading">Staggering amounts of USDA ingredients diverted for processing </h2> Government records illustrate the volume of bulk ingredients sent to manufacturers. One Illinois district sent more than 51,000 pounds of chicken to Tyson, 10,000 pounds of American cheese to JTM Food Group, and nearly 225,000 pounds of potatoes to McCain Foods between September 2025 and January 2026.  <blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> “The chief beneficiaries are the producers of the ultra-processed products, obviously,” said Nestle, the Paulette Goddard Professor of Nutrition, Food Studies, and Public Health, Emerita, at New York University. “They benefit financially, but also by teaching children that they are supposed to eat food products, not real food.” </blockquote> Another sent nearly 160,000 pounds of chicken to Tyson, 222,000 pounds of potatoes to McCain Foods, and more than 97,000 pounds of American cheese to Land O’Lakes. It also diverted more than 40,000 pounds of turkey to Hormel, and 49,000 pounds of flour to Rich Products and J&J Snack Foods, the maker of Dippin Dots ice cream. Consider: <ul class="wp-block-list"> <li>In fiscal year 2025, about 46% of USDA Foods, by weight, were allocated to private companies for processing, according to the latest available figures. For 2026-27, school food authorities can select from <a href="https://fna-bwbufwdzbabpezgc.z01.azurefd.us/sites/default/files/resource-files/usdafis-fal-sy26-27.pdf">nearly 200 items</a> from apples, carrots, and potatoes to flour, beef, chicken, and eggs that the USDA offers to purchase on their behalf. Using those ingredients and adding others, participating processors offer more than 5,000 finished or “end” products to schools. </li> <li>Federal school meal standards focus on nutrients rather than the degree of food processing. That lets many ultra-processed foods qualify for school menus and land on students’ plates. For instance, JTM Food Group turns USDA-provided beef into ready-to-serve products such as Cincinnati-style chili using additives such as <a href="https://pmc.ncbi.nlm.nih.gov/articles/PMC10260459/">modified food starch, xanthan gum, and caramel color</a>.</li> <li>Manufacturers market their products – along with their brands – to schools. For instance, Tyson promotes the Cool School Cafe® and products like hot dogs and Crispitos®, which contain more than two dozen ingredients.</li> <li>Government records show school districts’ reliance on processed commodities. An Illinois school district planned to allocate nearly 81% (nearly $650,000) of its USDA Foods entitlement to diverting foods for processing, while a Massachusetts district allocated more than 40% for the 2026-27 school year.</li> <li>Schools regularly serve processed and ultra-processed convenience foods. Nutrition standards have improved school meals over the past 15 years by increasing whole grains, fruits and vegetables and reducing sodium. But studies of schools in <a href="https://www.childnourishlab.org/_files/ugd/383bcd_184bd32412e349c188316e51c51a5553.pdf">California</a> and <a href="https://www.childnourishlab.org/_files/ugd/383bcd_0a42f43b97f84f26860a980a284e5d91.pdf">other states</a> found that most regularly serve convenience and/or quick preparation foods that are primarily processed and ultra-processed foods.</li> </ul> "Food manufacturers benefit financially from turning relatively simple ingredients into commercially formulated products, and the school food system provides an important market for those products,” said Dr. Erica M. LaFata, a research scientist at the Oregon Research Institute. "This is an important example of how our food environment has become structured around commercial interests rather than necessarily around what is best for public health.” <h2 id="h-how-school-food-becomes-a-commercial-product" class="wp-block-heading">How school food becomes a commercial product</h2> The USDA Foods Processing Program lets school districts and state agencies send government-supplied bulk ingredients to approved processors. Schools can provide commodities such as chicken, beef, cheese, flour, and potatoes in exchange for finished products that are easier to store, prepare and serve. The finished products can differ substantially from the original ingredients. They may include pizza, French fries, fish sticks, and burritos, even when the commodities could be used to prepare less-processed meals.   Schools receive credit for the value of the government-supplied ingredients but may still pay manufacturers for processing, additional ingredients, packaging, and other services. Approved processors include Tyson, Conagra Foodservice, Kraft Heinz, Schwan’s, Del Monte, McCain Foods, Don Lee Farms, and Hormel. <blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> Kraft Heinz considered its Lunchables product "a penetration machine," designed to drive corporate influence into the school market. “The kids have it and then they go to retail and they see it,” a top executive told The Wall Street Journal. </blockquote> A <a href="https://content.govdelivery.com/accounts/USFNS/bulletins/31912e1">USDA</a> example of the price reduction processors give school districts (called an indirect discount) illustrates how the costs are calculated: A 30-pound case of commercial double-cheese pizza, the end product, costs $40. The government-supplied mozzarella, tomato paste, and flour account for $17.17 of that value. After deducting the ingredient credit and adding a $3 distributor fee for storage and delivery, the school pays $25.83 per case. The processor’s revenue and costs, such as labor and packaging, determine whether it makes a profit.  <figure class="wp-block-image size-large"><a href="https://usrtk.org/wp-content/uploads/2026/10/signal-2026-10-26-16-12-33-495_003.jpg"><img src="https://usrtk.org/wp-content/uploads/2026/10/signal-2026-10-26-16-12-33-495_003-1024x683.jpg" alt="" class="wp-image-25798" /></a></figure> <h2 id="h-schools-offer-food-companies-a-way-to-build-brand-loyalty" class="wp-block-heading">Schools offer food companies a way to build brand loyalty</h2> For manufacturers, school food programs provide more than sales. They also offer repeated opportunities to introduce schools and students to particular products and brands.  The USDA acknowledges the program's commercial dimension, stating: “SDAs, schools and food manufacturers collaborate to ensure that processed products complement popular commercial items.”  Tyson, for example, markets fully cooked chicken products as a way to save kitchen labor and reduce food-safety risks. Its K-12 Commodity Calculator helps districts plan commodity diversions, forecast product needs, and assist with menu planning. The company, which did not respond to a request for comment, also encourages schools to market its products directly to students: “Help drive excitement around your nutrition program with FREE digital downloads of fun and engaging promotions! Plus, elevate your serving line with our Tyson® branded packaging.” Kraft Heinz, too, offers condiment dispensers (“Easy to Clean, Easy to Control Adjustable Dispensing) and tabletop wire caddies, along with products like Jell-O Zero Sugar Strawberry Flavor Gelatin. The snack product contains 10 ingredients, including <a href="https://usrtk.org/sweeteners/aspartame_health_risks/">aspartame</a> and the petroleum-based food dye Red No. 40, which has been linked to cancer and other health issues.  The company estimated in 2023 that school food service represented a potential $25 billion market and a way to drive supermarket sales. At the time, Chief Executive Officer Miguel Patricio called its popular prepackaged Lunchables product, “a penetration machine" in an interview with The Wall Street Journal “The kids have it and then they go to retail and they see it,” added Carlos Abrams-Rivera, then the company’s head of its operations in North America.  Lunchables were later pulled from schools amid low sales and consumer complaints about high sodium levels. Kraft Heinz did not respond to a request for comment. <h2 id="h-unhealthy-upfs-can-still-meet-federal-nutrition-rules-nbsp-nbsp" class="wp-block-heading">Unhealthy UPFs can still meet federal nutrition rules  </h2> Not all processing makes food ultra-processed. Chopping, freezing and cooking can make ingredients easier to handle without necessarily turning them into UPFs. But industrially formulated products often contain additives used to alter texture, improve flavor, extend shelf life or simplify manufacturing. UPFs also heavily rely on <a href="https://usrtk.org/healthwire/ultra-processed-foods-and-plastics/">plastics for production and packaging</a>. Chemicals like bisphenol A (BPA), an <a href="https://usrtk.org/category/endocrine-disruptors/">endocrine disruptor</a>, can migrate into food from food processing equipment and packaging.  <blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> “Foods become familiar to kids through repeated encounters, and that familiarity is a powerful driver of what children are willing to eat," said Priya Fielding-Singh, director of policy and programs at George Washington University’s Global Food Institute. "When children are routinely served highly processed foods, those foods can become what they know, expect, and prefer. Those preferences can then shape what kids ask for and are willing to eat at home as well.” </blockquote> Any processed end product must meet all federal child nutrition program requirements and meal pattern standards before it can be served as part of a reimbursable school meal. Participation in processing is voluntary.  “State agencies and schools determine which USDA Foods and processed products best meet local needs and student preferences,” said an agency spokesperson. Federal school meal rules focus on nutritional requirements rather than a food’s degree of processing, however. That means a product can be ultra-processed and still meet limits for sodium, added sugars, and other nutrients. Among other products available to schools: <ul class="wp-block-list"> <li>Tyson’s fully cooked, unbreaded grilled chicken breast chunks contain chicken, water, and seasonings along with corn syrup solids, maltodextrin, modified corn starch, textured soy protein concentrate, sodium phosphates, and brown sugar.</li> <li>Schwan’s Big Daddy’sTM 51% whole grain turkey and beef pepperoni stuffed sandwich contains more than three dozen ingredients. They range from mechanically separated turkey and maltodextrin to dextrose, sodium nitrite, and guar gum—ingredients commonly used in ultra-processed foods to alter texture, enhance flavor and aid manufacturing.</li> </ul> Some products sold to schools resemble products available commercially, but they are formulated to meet federal nutrition standards. Researchers warn that repeated exposure to branded UPFs at school could build brand recognition and loyalty, encouraging children to consume the same products outside school. “Foods become familiar to kids through repeated encounters, and that familiarity is a powerful driver of what children are willing to eat," said Priya Fielding-Singh, director of policy and programs at George Washington University’s Global Food Institute. "When children are routinely served highly processed foods, those foods can become what they know, expect, and prefer. Those preferences can then shape what kids ask for and are willing to eat at home as well.” <h2 id="h-why-schools-struggle-to-serve-scratch-cooked-meals" class="wp-block-heading">Why schools struggle to serve “scratch-cooked” meals</h2> Schools must feed large numbers of children while managing limited budgets, staffing shortages, kitchen constraints, and detailed federal meal requirements. A recent study published in Public Health Nutrition examined these barriers in interviews with 20 school food-service directors in California’s San Joaquin Valley between January and June 2024. Sixteen directors also completed a survey. Although the study covered a limited region, its findings echoed a March 2025 <a href="https://www.childnourishlab.org/_files/ugd/383bcd_0a42f43b97f84f26860a980a284e5d91.pdf">study</a> of more than 1,200 school food authorities across eight states. The California directors reported that their districts used pre-portioned heat-and-serve foods about three days a week. Six estimated that UPFs accounted for at least 40% of their districts’ food purchases by dollar value. “It’s hard for [school food] to be minimally processed, in part because of the products available. The ones with [Child Nutrition] labels and those specifically marketed as school products are not minimally processed,” one director told researchers. <h2 id="h-barriers-to-scratch-cooking-include-lack-of-staff-infrastructure" class="wp-block-heading">Barriers to scratch cooking include lack of staff, infrastructure</h2> Child Nutrition (CN) labels can also add to the challenges of preparing less-processed meals, researchers say. The labels help schools show that meals contain the federally required amounts of meat or meat alternatives, grains, and other components. Cooking from scratch requires school staff to do more nutritional calculations themselves to meet those standards.  Many schools also lack infrastructure, such as preparation, storage, and refrigeration facilities. Amanda Harvey, director of nutrition services for Fresno Unified School District and a member of the California study’s community advisory board, said her team considered preparing sandwiches from scratch at elementary schools. But some kitchens needed extensive upgrades to meet local health department requirements. “They said, ‘In order to get these 50 schools permitted, you would need to add new sinks, drains and hoods,’” Harvey said. The estimated cost was millions of dollars. "Schools often lack the staffing, kitchen infrastructure, and resources necessary to prepare meals from minimally processed ingredients. Meanwhile, food manufacturers can provide inexpensive, convenient, ready-to-serve products that meet existing nutritional requirements," LaFata said. "The result is a system in which ultra-processed foods become the default, even when school administrators would prefer to serve less-processed alternatives." <h2 id="h-commercial-school-food-has-a-long-history" class="wp-block-heading">Commercial school food has a long history</h2> School food-service directors opposed for-profit operators when Congress passed the National School Lunch Act in 1946. They argued, based on earlier survey research, that commercial vendors had incentives to promote sugary and salty products because they could be more profitable. <blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> "Schools often lack the staffing, kitchen infrastructure, and resources necessary to prepare meals from minimally processed ingredients. Meanwhile, food manufacturers can provide inexpensive, convenient, ready-to-serve products that meet existing nutritional requirements," LaFata said. "The result is a system in which ultra-processed foods become the default, even when school administrators would prefer to serve less-processed alternatives." </blockquote> That opposition diminished, however, as demand for free school meals grew in the late 1960s. Many districts lacked the facilities needed to expand meal programs, and private companies offered a way to scale up food service.  The National Restaurant Association, a trade lobby representing the food-service industry, also exerted pressure. In 1970, the USDA lifted its restriction on for-profit providers. <h2 id="h-what-would-it-take-to-improve-school-meals" class="wp-block-heading">What would it take to improve school meals?</h2> Schools’ reliance on ultra-processed foods reflects policy and commercial choices, not an unavoidable feature of school meals, LaFata says. “The fact that schools rely heavily on ultra-processed foods does not mean those products are necessary or that restricting them would be unreasonable. It reflects a food system that has increasingly prioritized their production, distribution, and convenience,” she says. “Food companies have made choices about how to formulate and market their products, and our public institutions have developed procurement systems that accommodate those products.” Some states are beginning to act, even as the ultra-processed food industry fights <a href="https://usrtk.org/ultra-processed-foods/big-food-campaign-to-block-state-food-safety-laws/">regulation</a>. At least 10 have introduced legislation to reduce UPFs in school meals, and California has passed legislation requiring the phase-out of certain ultra-processed foods by 2035. The USDA and HHS, under Robert F. Kennedy Jr., announced $50 million this year for school kitchen infrastructure, including nearly $20m in equipment grants. The agencies also designated $25 million in Farm to School grants to help schools incorporate locally produced foods. Renovating a single school kitchen, however, can cost tens of thousands of dollars for modest upgrades and more than $1m for major renovations. With more than 95,600 schools and institutions nationwide, the equipment grants represent only a small fraction of potential needs and are not intended to cover comprehensive building renovations. Researchers call for broader policy changes, including stronger nutrition standards, and school meal reimbursements that reflect the cost of preparing nutritious food. They also recommend purchasing policies that prioritize healthier foods and increased funding to support the kitchens, equipment, and staff needed to prepare fresh meals. Said Nestle: “Schools can’t serve real food if they don’t have kitchens and staff.” Ultimately, Nestle and others argue, the difficulty of changing the current system should not be mistaken for evidence that it should not be changed. “Should publicly funded school meal programs be organized around the products that are most convenient and profitable for food manufacturers, or around the foods that best support children's long-term health?” LaFata asked. “I would argue that children's health should be the starting point, and that our policies and procurement systems should be designed to support that objective.”