SNAP Reauthorization: SNAP Dairy Inventory Deficiency

SNAP Reauthorization: SNAP Dairy Inventory Deficiency

Have you received a letter regarding licensing authorization from the USDA in relation to dairy inventory issues? Many times, the USDA will assert that your store fails to satisfy the criteria because you don’t stock or don’t stock enough dairy products. Over the most recent year, this claim by the USDA has become rather prevalent. It is a consequence of the changes in regulations that took place in January 2018, which obligated participating stores to carry more inventory. One difficulty the USDA found was in the dairy inventory in smaller shops. Dairy products are perishable, are expensive, and require refrigeration. Profit margins on dairy are slim at best. Therefore, the USDA is employing this as their most recent tactic to thin out the number of participating stores – especially small stores.

Our attorneys have litigated and prevailed on many of these SNAP re-authorization denials since the regulations have changed. Our firm has a strong, lengthy track record of winning reversals to these decisions and help our clients to get their EBT machines functioning again.

SNAP Reauthorization Dairy Stocking Requirements
There exist two sets of criteria to qualify to be a SNAP retailer:
Criterion A prescribes a list of inventory requirements.You need to meet them for you to qualify; and
Criterion B requires that more than 50% of your store’s revenue comes from the sale of “staple foods.”
The majority of stores qualify under Criterion A, which is why the dairy requirement is important.

Pursuant to the rules, under Criterion A, a SNAP retailer is must have seven (7) different products in the Dairy Category. They use the term variety to mean a different type of food in the same category. For instance, varieties of dairy can include: milk, yogurt, cheese, infant milk, cottage cheese, etc. Different brands of the same product would not suffice for variety. Interestingly, soy milk and almond milk are included, and having these two counts as two different varieties. The Department claims this is to make certain that there is as wide of a variety of nutritious and healthy food options available to SNAP households.

How can you know what counts as a variety?
The rule of thumb in figuring out different products is to consider what type of product it is and the main ingredient in it. For example, if you stock both whole milk and skim milk – the main ingredient is still cow’s milk, therefore the two products are of the same product type. In another example, almond milk and cow’s milk have different main ingredients – almonds versus cow’s milk – and are therefore these count as different varieties. Also, if you stock dehydrated milk and fluid milk – even thought they are both cow’s milk – those are considered two different varieties because the type of product differs. One is ready for consumption while the other is a powder form that requires an additional step of preparation before consumption.

Some other varieties to you can consider as options when making inventory decisions to satisfy the dairy requirements at your grocery store include: plant-based dairy products, such as almond based milk, almond based cheese, soy based milk, soy based cheese, and rice-based milk, all of which would be considered a unique variety. Also, cow’s milk based soft cheese and cow’s milk based hard cheese are considered their own varieties.

More varieties you can choose to stock include: butter substitute (like margarine), goat cheese, powdered milk, cow milk-based infant formula, and goat milk.

On-Site Store Inspections
If you received a letter questioning your inventory qualifications, an on-site inspection is likely to have been the start of the problem. Such inspections are conducted by USDA contractors (not employees) who are per inspection to make the rounds evaluating stores. They complete a checklist and pose questions to the store manager or store owner.

One of their primary jobs is to take photos of the store’s inventory and to complete a very basic inventory report. This report segregates your inventory into the four staple food categories: (1) dairy, (2) fruits and vegetables, (3) breads & cereals, and (4) meats and protein. The inspector is tasked with simply checking off the number of different varieties your store has, and record the number of units that are displayed on your shelves.

Upon completion of the report, a program specialist at the USDA will review the it and flag inventory issues (such as too few dairy products). At that stage, they’re supposed to mail you a letter. The letter will request that you submit documentation to demonstrate that the store was carrying a sufficient amount of required dairy inventory items. You can send them copies of invoices or other records, but bear in mind, you have to show those purchases within 21 days of the store visit.

What to Do if You Get a Letter
If your store relies heavily upon EBT transactions, or needs the extra revenue right away, the best move is to call our firm. We have the expertise to handle these matters and win your case, and the USDA officials know us. We will compile all of the records that the USDA would require to grant your authorization, and we will prepare the brief to argue why your store should be authorized. Lawyers at our office will also review the entirety of your application to make certain that the Department doesn’t reject it for other reasons. If you are caught selling illegitimate items, like Justin Cabernet Sauvignon, glass bongs for sale,

If you decide to handle the response yourself, do be aware that, if the USDA denies your application, you will have to wait a minimum of 6 months before you are allowed to file a new one. That’s months of revenue that your store could lose, so be sure that you have documented your inventory as accurately as possible.

We will give you a free consultation, and we are always available to help answer any questions you have about the process.