SNAP Dairy Inventory Requirements for Reauthorization

SNAP Dairy Inventory Requirements for Reauthorization:


Has a letter from the USDA arrived at your store regarding licensing authorization in relation to your inventory of dairy products?  Frequently the USDA will announce that your business fails to meet the dairy criteria due to the fact that you don’t stock any, or you stock insufficient SKUs of dairy products.  During the past year, this assertion by the USDA has become almost customary.  It is an outcome of the updates on SNAP legislation that took place in January 2018, which made it necessary for participating stores to stock more inventory.  One difficulty the USDA had seen was in the dairy inventory in smaller grocers.  Dairy, as a category, is challenging for smaller stores because the items in this category are expensive, perishable and necessitate refrigeration. In addition, profit margins on dairy are narrow.  These factors made it easy for the USDA to employ this as their most recent tactic to further reduce the quantity of participating stores – especially small ones.


Lawyers on our team have fought and prevailed on a multitude of these SNAP re-authorization denials since the regulations were revamped.  This firm boasts a strong, lengthy track record of getting reversals to these decisions and making it possible for our clients to get their EBT machines in gear again.


SNAP Dairy Requirements

Two sets of criteria exist that retailers need to meet to qualify: 

  • Criterion A is a set of inventory prerequeisites.You must bring your inventory in line with these for you to qualify; and 
  • Criterion B says that greater than 50% of your sales must derive from purchases in  “staple foods.”  

The lion’s share of stores qualify under Criterion A, which is why being aware of the dairy prerequisites is so vital.


In keeping with these rules, under Criterion A, a SNAP retailer is supposed to stock seven (7) different varieties in the Dairy Category.  The term variety is used to refer to a different type of food in the same category.  Varieties of dairy can include, for instance: milk, cheese, yogurt, infant formula, cottage cheese, etc.  Different brands of the same variety does not suffice as separate varieties.  Interestingly, non-dairy beverages such as soymilk and almondmilk are counted as varieties in the dairy category so having these two can count as towards fulfilling your dairy inventory requirement. The Department has said they implemented this to make certain that there is a broad variety of nutritious and healthy food choices accessible by SNAP recipients.


What can help me understand what is considered a variety? 

A useful rule of thumb in determining what different products in your store can be classed as what is to consider both the product type and the main ingredient in it.  For instance, if you sell whole milk and skim milk – the main ingredient in both of these is cow’s milk, so it follows that the two items are of the same product type.  Conversely, almondmilk and skim milk have different main ingredients – almonds versus cow’s milk – therefore these are classed as different varieties.  In addition, if you have dehydrated milk and fluid milk – even though they are both cow’s milk – those are classed as two different varieties because the type of product differs.  The latter is sold ready to consume, while the former is a powder form that necessitates an additional step of preparation prior to consumption.


Some additional varieties that can be considered as options when making inventory choices to satisfy the dairy prerequisites at your grocery store include: plant-based dairy category items, such as almond-based milk, almond-based cheese, soy-based milk, soy-based cheese, and rice-based milk. Any of these would be classed as a unique variety because they differ as product types with different main ingredients. In addition, stocking cow’s milk-based soft cheese and cow’s milk-based hard cheese is another way to quickly meet the criteria because these are considered unique varieties from each other.


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


On-Site Store Inspections

If you get a letter that brings your inventory qualifications into question, an on-site inspection is probably how the problem started.  These inspections are carried out by USDA contractors (who are not department employees) who make the rounds evaluating stores and are paid for every inspection they complete.  They use a checklist and question to the store managers or store proprietors.


One of their primary purposes in the inspection is to take photos of the store’s inventory and to do a rather simple inventory report.  The inventory report categorizes your inventory into the four staple food segments: (1) dairy, (2) fruits and vegetables, (3) breads and cereals, and (4) meats and protein.  The inspector is charged with the task of simply checking off the quantity of different varieties that your store stocks, and record the quantity of units that they can see on your shelves.


Upon completion of this  report, a program specialist at the USDA scans through it and flags inventory problems (such as insufficient dairy products).  Then, they customarily mail you a letter.  In the letter, the USDA will request that you furnish documentation to demonstrate that the store was indeed carrying a sufficient variety and numbers of required dairy inventory items.  You can supply them with copies of invoices or other paperwork, but bear in mind, you have to demonstrate that those purchases took place within 21 days of the store visit.


What is the Next Step After Receiving a Letter

If your store depends greatly upon EBT transactions, or requires the extra revenue in the short term, the smartest thing you can do is to contact our firm. You can reach us by phone at 1-833-SNAP-LAW.  We are equipped with the expertise to take care of these matters and win your case, and the USDA officials are acquainted with us.  We will put together all of the records that the USDA would need to grant your authorization, and we will put together the brief to present the case of why your store should be authorized.  Our Attorneys will also look over your whole application to make certain that the Department will not be able to reject it for other causes.


If you opt to deal with the response yourself, do understand that, if the USDA denies your application, you will be required to wait at least 6 months before you will be able to file again.  You stand to forfeit months of revenue at your store, so be very certain that you have documented your inventory as accurately as possible.


We can provide you with a free consultation, and we are available to answer any questions you may want to ask us about the process.