The Kansas City commodity office – a vital link in the chain

The Kansas City commodity office – a vital link in the chain – federal commodity procurement and distribution system

Joanne Widner

The Kansas City Commodity Office–A Vital Link In the Chain

The federal commodity procurementand distribution system has developed from its Depression-era beginnings into a coordinated effort involving three USDA agencies–the Agricultural Marketing Service (AMS), the Agricultural Stabilization and Conservation Service (ASCS), and the Food and Nutrition Service (FNS).

Central to this system is ASCS’Kansas City Commodity Office (KCCO), which plays a key role in getting federally purchased food where it needs to go.

KCCO’s responsibilities fall into severalareas. One is arranging for USDA food to be commercially processed through contracts with private vendors–having USDA wheat, for example, processed into flour. Another is arranging and monitoring transportation of USDA food–both processed and bulk commodities–to a number of domestic and overseas programs.

Originally set up in 1939 as a regionaloffice of the Commodity Credit Corporation, KCCO became one of the country’s principal food procurement offices during World War II. By 1966, KCCO attained nationwide responsibility for bulk commodities and by 1975 for processing operations.

KCCO handles commodities such ascheese, wheat, butter, bulk corn, barley, rice, honey, peanuts, and more than 100 different processed commodities. In the course of a year, KCCO arranges for shipment of more than 56,000 railcars and 101,000 truckloads of food.

It is a big job and involves two otherlarge facilities–the ASCS Kansas City Management Office and a separate data processing center in Fort Collins, Colorado. All of this is necessary, though, because KCCO must maintain routine communications with processing vendors, truckers, and recipient agencies for the procurement, delivery, and storage of the foods.

Shipments are carefully monitored

According to Norman Houser, directorof KCCO, the giant commodity office functions in much the same manner as would a floor trader at the stock exchange. As orders to buy are received, KCCO executes them.

“For the most part,’ says Houser,”it’s a fairly straightforward operation. There are, of course, occasional administrative problems.’

Some of the administrative problemsinvolve unacceptable products or vendor delays. Since ASCS is responsible for transportation, any problems that may occur in delivery also fall back on KCCO.

For example, a trucker may call inwanting a place to unload part of his shipment. Perhaps bad weather has delayed his delivery, and he may need to stay overnight because he cannot make it to the next site in time to find staff still on duty there.

For the massive amount of foodshipped, there are not that many problems. But ASCS knows full well that if you are the one who does not get the delivery on time, their good record does not help.

According to FNS regional Food DistributionProgram (FDP) staff in Denver who deal with KCCO’s processed commodities division on a regular basis, KCCO is FDP’s right hand. Marketing specialists at KCCO can trace lost shipments or check orders for all FNS programs.

The FDP staff cite the time of thefirst cheese distribution–forerunner of the current Temporary Emergency Food Assistance Program (TEFAP)– which began in December 1981.

It was new for the states, and KCCOmarketing specialists also had to react to a totally new situation. According to Mary Nielsen of FNS’ Mountain Plains Regional Office, KCCO made a number of adjustments to accommodate the states. In some instances, individual marketing specialists made extraordinary efforts to ensure that shipments of cheese arrived.

Much time spent on FNS programs

ASCS is responsible for internationaland domestic programs. Jerry Perkins, chief of the processed commodities division at KCCO, and his staff spend a large part of their efforts on FNS’ programs. Domestic programs, according to Perkins, account for about half of his division’s staff time.

Last year, approximately 2.8 billionpounds of USDA-donated foods were distributed through FNS programs. Of that amount, 1.3 billion pounds went to schools and 1.5 billion pounds to other agencies and organizations, such as day care centers, summer camps, meal services for the elderly, charitable institutions, disaster relief centers, and community outlets operating TEFAP.

USDA food was also distributed toneedy people on Indian reservations and to agencies operating the Commodity Supplemental Food Program.

One of the domestic programs thatrequires a lot of staff time is the Food Distribution Program on Indian Reservations. Tribal needs dictate the unique tailoring of shipments for Indian programs. A carload or truckload shipment of a food received by KCCO must be sorted and then shipped to reservations as part of an assortment of 20 to 40 items in a food package.

The food packages include a varietyof canned products (fruits, vegetables, meat or poultry), along with staples such as rice, corn meal, sugar, flour, honey, nonfat dry milk or other needed foods. Because of the need to sort a variety of these foods into one shipment, this is a more complicated and staff-intensive effort than just routing an entire carload of a single commodity.

Many products delivered directly

Jerry Perkins emphasizes that mostASCS purchases do not go into storage. Grain products and oils, for example, go directly from the processors to the FNS programs that will use them.

Some dairy surplus, of course, ismaintained in storage. However, even many dairy products require further processing or packaging prior to use by recipient agencies. Cheese, for example, may have to be converted from cheddar to process cheese, and butter into smaller “prints.’

In other cases, according to JerryPerkins, AMS purchases are stored prior to shipment because they are purchased on a seasonal basis. The vast majority of products, however, are delivered directly from the vendor or processor to the ultimate user. This saves the cost of re-routing, storing, and handling. If storage is necessary, it is contracted under a commercial storage agreement at the best price obtainable.

This system does have its complications,however. Fluctuating market situations may govern routing. For example, at certain times there may be an abundance of millers to handle flour, but during peak commercial seasons the mills may be too busy to process for USDA. ASCS must balance market situations and surpluses against needs.

Jerry Perkins stresses the routinenature of much of KCCO’s work. “We are here to service the programs,’ he says. “We try to make sure we do the best job we can.’

Even if this routine job looks like ajuggling act to outsiders, it is all in a day’s work to the staff at KCCO. It’s simple–if you happen to be a combined traffic cop, computer expert, and balancing wizard, that is.

For more information, contact:Jerry C. Perkins, Chief Processed Commodities Division Kansas City Commodity Office Kansas City, Missouri 64114 Telephone: (816) 926-6715

COPYRIGHT 1987 U.S. Government Printing Office

COPYRIGHT 2004 Gale Group