School districts across the U.S. are facing a financial squeeze.
Food costs have jumped about 30% since 2020, including a 3.4% increase in August compared to a year ago. Some products like beef, eggs and flour have risen even more.
Ryan Mikolaycik is in charge of feeding 66,000 kids as the executive director of food service at the Austin Independent School District in Texas.
“A fruit or a vegetable was about 25 cents a serving; now you're looking at more like 40-50 cents per serving,” he said.
Kitchen staff who used to get paid $10 or $12 an hour a decade ago are now making $20 an hour or more in many states as minimum wages increase.
Since the school food programs have to run a balanced budget, at some point, something has to give. Mikolaycik said in his district, they’ve had to make cuts.
“Now it's like, okay, instead of having that person there in the kitchen, I'm going to cut a person and you’ve got to do with less,” he said. “Instead of serving bananas twice, we're going to serve it just once.”
The price pressures are compounded with the loss of federal dollars, as fewer students automatically qualify for free lunch with changes to the Supplemental Nutrition Assistance Program and Medicaid. At the same time, school districts face changing regulations from the U.S. Department of Agriculture.
It’s why 95% of school nutrition leaders say they’re worried about their food program’s financial sustainability, according to a survey from the School Nutrition Association.
“Now you know what keeps a lunch lady up at night,” said Donna Hoover, director of nutrition at the Hickman Mills School District, which serves around 5,000 students in Kansas City, Missouri.
Federal reimbursement for school meals
This school year, the maximum U.S. Department of Agriculture reimbursement rate per meal for students eligible for free lunch is $4.85.
“So, for less than what you'd pay for a latte, schools have to put together a complete meal that includes milk and fruits, vegetables, whole grains, and protein,” said Diane Pratt-Heavner with the national nonprofit School Nutrition Association.
And it doesn’t just cover food. That $4.85 also has to pay for the kitchen staff, tools, culinary training and cooking equipment.
“The federal reimbursement rate is adjusted slightly every year, but it just has not been enough to keep up with the higher cost of preparing these meals,” said Pratt-Heavner.
Yet, what really worries school nutrition directors are changes made in the Trump administration’s “One Big Beautiful Bill Act,” which went into effect last year.
“It's really kind of turning into like the perfect storm, so to say,” said Aaron Nowak, the food and nutrition services director for District U-46 in South Elgin, Illinois.
Over 55,000 schools in the U.S. provide free meals to all of their students through a federal program called the Community Eligibility Provision or CEP.
Schools qualify if more than 25% of their students use federal food aid programs like SNAP. The higher the percentage, the more schools are reimbursed by the federal government. Schools receive the maximum reimbursement rate if over 62.5% of their students are eligible.
Yet over 5 million Americans have lost SNAP benefits since last year. Nowak’s seen the decline at his schools.
“Our numbers have changed between 10% and 15% within the past six to seven months,” he said.
When that percentage drops, the program gets more expensive for schools to operate. Some school districts in states such as Texas, Illinois and Kentucky have already stopped offering CEP because it’s not financially feasible anymore.
At the Austin Independent School District, Mikolaycik said 69 of their 105 schools use CEP. But he expects 30 more schools could lose the program next school year, when SNAP rates are supposed to drop even more.
Without automatic enrollment through SNAP, families file an application to verify their income and see if their child qualifies for free or reduced-priced meals.
Erin Hysom with the national advocacy group Food Research and Action Center said these applications are a real barrier for some families. She said they ask families to calculate multiple forms of income. There are also language and literacy barriers which can prevent some from being able to accurately complete the application.
“We also hear from families and communities about the stigma and the shame around the application,” she said “When you think about a school district, the people who are processing those applications – that could be your neighbor, it could be your child's football coach. You might not want them to know your household circumstances and your personal finances.”
Mikolaycik said it also takes a lot of time and can be an administrative burden for under-staffed school food programs to process the applications – whereas, when they qualify through SNAP, it’s automatic.
He also said the bar for families to qualify for reduced-price meals is higher than most people realize.
“You're talking here in Austin, a family of four making more than $60,000 gross receives no benefits,” he said.
School nutrition officials say free meals are so important because school lunch is the most consistent and nutritious meal in many kids’ lives. The USDA says millions of students rely on school meals and snacks for more than half of their food intake during the school week.
Federal regulations eat into budgets
On top of all of these financial pressures, school cafeterias also have to comply with more federal regulations.
It’s another source of frustration for school nutrition directors like Hoover in Kansas City.
“I tell everybody, sometimes I feel like they set us up to fail, because the guidelines are so strict for us,” she said.
Over the past few years, federal rules have limited sodium and sugar levels in school meals and mandated a certain percentage of food is purchased from U.S. producers.
Nowak in Illinois said school food manufacturers have had to reformulate their products to conform to the regulations, which can be expensive. Others have reduced the number of products they offer or have stopped selling to schools.
“We're seeing less and less manufacturers producing K-12 food, which gives us less options and less companies to work with,” he said.
Fewer options mean higher prices. Nowak said the “Buy American” provision is also challenging. No more than 10% of school food can originate from outside of the United States. Soon the requirement will go down to 8%, and then 5%.
That makes it tough when some lunchroom staples, particularly produce, just aren’t grown in the U.S.
“There's not a banana manufacturing plant within the United States that can supply enough bananas for everybody in the United States,” Nowak said. “So things like bananas, mandarin oranges, mangoes, olive oil and bamboo shoots; there's no access to those products within the United States.”
Federal officials also want schools to cook more meals from scratch. Nowak said his school food program would love to prepare more on site, but that requires new equipment and infrastructure.
“A lot of our older buildings do not have proper kitchen setups,” he said. “In a lot of our elementary schools, we have warming kitchens.”
In the School Nutrition Association survey, 94% of respondents said their food program needs more equipment and infrastructure to expand scratch cooking.
School food directors are also anticipating new guidelines from the Trump administration pushing for more protein.
Mikolaycik in Austin, Texas, said his district is in favor of serving more protein and whole ingredients, but they need more support to do it.
“Government, you're telling us you want us to serve more protein. Okay, but you also fund us. So, which one is it?” he said. “You want us to make these changes, cool, we're on board, but then you’ve got to give us the money to make these changes, because a roll is cheaper than a steak.”
Harvest Public Media is a collaboration of public media newsrooms in the Midwest and Great Plains. It reports on food systems, agriculture and rural issues.