Posted: Wed, 01/25/2017 - 10:18am Updated: Thu, 04/15/2021 - 11:25am

Agencies receiving USDA foods through the National School Lunch Program (NSLP) can select Direct Diversion processing for receiving finished end-products. Direct diversion processing is the process of sending selected bulk raw USDA foods directly to selected processors to process into finished end-products. With this option, each participating agency is directly responsible for selecting their processors and choosing the finished end-products through a procurement process.


  • Excess Inventory - Federal regulations state that the recipient agencies must not carry excess inventory. Click here for more information.

  • Carryover Inventory - schools are expected to use USDA Foods sent to the any processor in the year that it is received. Carrying over pounds is discouraged and should be minimal.  

Ways the Savings is Passed On Through Processing

In an effort to provide low-cost, nutritious meals to millions of Indiana students, the company (aka processor) is required to return the full value of the USDA Food that is contained in the finished end product. IDOE allows recipient agencies to use one of the following value pass-through options:

  • Net off Invoice - discounting the normal commercial price of a product;
  • Refund - paying a refund to the school, or
  • Fee for Service - charging a fee for service for converting the USDA Foods.