SNAP Reauthorization: SNAP Dairy Inventory Deficiency
Did you receive a licensing authorization letter from the USDA for dairy inventory problems? Often, the USDA will claim that your store doesn’t satisfy the criteria because it lacks dairy products. Over the past year, this claim by the USDA has been very common. It is a result of the rule change that occurred in January 2018, which required stores to carry more inventory. One of the weaknesses the USDA discovered was dairy inventory in small stores. Dairy expires, is expensive, requires refrigeration and the profit margins aren’t great. So, the USDA is using this method to thin out the number of participating stores – especially small stores.
Our offices have represented and prevailed on a number of these SNAP re-authorization denials since the rule changes. We have a long track record of being able to reverse these decisions and get our client’s EBT machines functioning again.
Dairy Stocking Requirements for SNAP Reauthorization
There are two ways to qualify to be a SNAP retailer: Criterion A sets out a list of inventory requirements, which if you meet them, then you qualify; and Criterion B, which requires your store to sell more than 50% of your revenue in “staple foods.” Most stores qualify under Criterion A, which is why the dairy requirement is important.
According to the rules, under Criterion A, a SNAP retailer is required to have seven (7) different varieties of food in the Dairy Category. A variety is a different type of food in the same category. For example, dairy varieties can include: milk, yogurt, cheese, infant milk, cottage cheese and the like. Different brands of the same product don’t count, but different brands with different product, do count. Soy milk and cow’s milk are an example of two different varieties. The Department claims this is to ensure that there is as large of a variety of nutritious and healthy food options available to SNAP households.
How to tell what counts as a variety: 
The rule of thumb in determining different ingredients is what type of product it is, and the main ingredient in it. So, if you have whole milk and skim milk – the main ingredient is still cow’s milk, and the product is the same product type. However, almond milk and cow’s milk have different ingredients, and are therefore different varieties. Also, if you have dehydrated milk and fluid milk – those are two different varieties because the type of product differs. One is a fluid (ready for consumption), the other is a powder form that requires more effort for consumption.
Here are some other varieties to keep in mind when trying to satisfy the dairy requirements: 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 their own variety. Additionally, cow’s milk based soft cheese and cow’s milk based hard cheese are considered their own varieties as well.
Additional varieties to choose from include: butter substitute, goat cheese, powdered milk, cow milk-based infant formula, and goat milk.
On-Site Store Inspections
If your store got a letter about inventory, the on-site inspection is probably what started the problem. These inspections are conducted by USDA contractors (not employees) who are paid by the inspection to go around and evaluate stores. They fill out a check list and ask a number of questions to the store manager or store owner.
One of their primary jobs is to take pictures of the store’s inventory, and to fill out a very basic inventory report. The report breaks 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 supposed to check off the different varieties your store has, and then record the number of units that exist on your shelves.
Once the report is complete, a program specialist with the Department will review the report and flag inventory issues (like too little dairy). At that point, they’re supposed to send you a letter. This letter will ask you to submit documentation to prove that the store had a sufficient amount of required dairy products. You can submit invoices or other records, but remember, you have to show those purchases within 21 days of the store visit.
What to Do if You Received a Letter
If your store depends on EBT transactions, or needs the extra revenue right away, the right answer is to call our firm (1-833-SNAP-LAW). We have experience in handling these matters and winning them, and the Department knows us. We will compile all of the records that the USDA needs to grant your authorization, and we will prepare a brief explaining why your store should be authorized. Our office will also review the rest of your application to make sure that the Department doesn’t deny the license for other reasons.
If you choose to handle the response yourself – that’s ok. However, if they deny your application, you will have to wait at least 6 months before you are permitted to file a new one. That is a lot of revenue that the store will lose, so make sure that you have documented your inventory to the best of your ability.
We offer free consultations, and are always happy to help answer any questions you have about the process.