USDA awards $11.3M contract for wheat to Cargill, Inc., highlighting significant commodity procurement for food donations

Contract Overview

Contract Amount: $11,348,322 ($11.3M)

Contractor: Cargill, Incorporated

Awarding Agency: Department of Agriculture

Start Date: 2026-01-16

End Date: 2026-02-20

Contract Duration: 35 days

Daily Burn Rate: $324.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: COMMODITIES FOR USG FOOD DONATIONS: 2000011135/4210007478/WHEAT, HARD RED WINTER BULK

Place of Performance

Location: HOUSTON, HARRIS County, TEXAS, 77015

State: Texas Government Spending

Plain-Language Summary

Department of Agriculture obligated $11.3 million to CARGILL, INCORPORATED for work described as: COMMODITIES FOR USG FOOD DONATIONS: 2000011135/4210007478/WHEAT, HARD RED WINTER BULK Key points: 1. The contract value represents a substantial investment in essential food commodities. 2. Competition dynamics for this large-scale food donation contract are crucial for price discovery. 3. Performance risk appears moderate given the fixed-price nature and defined delivery period. 4. This procurement aligns with broader government efforts to address food insecurity. 5. The contract positions Cargill as a key supplier within the federal food commodity sector.

Value Assessment

Rating: good

The contract value of $11.3 million for wheat is significant, but direct comparisons are difficult without more granular data on commodity market fluctuations and specific quality requirements. The firm fixed-price structure suggests an attempt to lock in costs. Benchmarking against similar large-scale commodity procurements for food aid programs would provide further insight into value for money. The relatively short duration of the contract (35 days) may also influence the unit price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. With three bids received, the level of competition appears adequate for a commodity of this nature. This suggests that the pricing is likely to be competitive, reflecting market conditions and the capabilities of the participating firms.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces, ensuring that government funds are used efficiently for essential goods like food donations.

Public Impact

Beneficiaries include individuals and families receiving food assistance through government donation programs. The service delivered is the provision of Hard Red Winter Wheat, a key staple. The contract is being executed in Texas, indicating a focus on domestic supply chains. This procurement supports the agricultural workforce involved in wheat production and processing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price volatility in the wheat market impacting the fixed price.
Logistical challenges in ensuring timely delivery of a large commodity shipment.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Firm fixed-price contract provides cost certainty for the government.
Defined delivery period minimizes potential for extended performance periods.

Sector Analysis

This contract falls within the broader agricultural commodities sector, specifically focusing on wheat procurement for federal food donation programs managed by the USDA's Agricultural Marketing Service. The market for bulk commodities like wheat is global and subject to significant price fluctuations based on weather, demand, and geopolitical factors. Comparable spending benchmarks would involve analyzing other large-scale commodity purchases for food aid or strategic reserves.

Small Business Impact

While this contract was awarded under full and open competition and does not appear to have a specific small business set-aside, the prime contractor, Cargill, Inc., is a large entity. Subcontracting opportunities for small businesses could arise in areas such as logistics, transportation, or specialized processing, though this is not explicitly detailed in the provided data. The impact on the small business ecosystem would depend on the extent of any subcontracting.

Oversight & Accountability

Oversight for this contract would primarily fall under the USDA's Agricultural Marketing Service, responsible for ensuring compliance with contract terms, quality standards, and delivery schedules. Accountability measures are embedded in the firm fixed-price structure and the defined performance period. Transparency is facilitated by the contract award data being publicly available, though detailed operational oversight specifics are not provided.

Related Government Programs

USDA Food Donation Programs
Commodity Procurement for Federal Agencies
Agricultural Marketing Service Contracts
Food Security Initiatives

Risk Flags

Market Price Volatility Risk
Logistical Execution Risk
Supply Chain Disruption Potential

Frequently Asked Questions

What is this federal contract paying for?

Department of Agriculture awarded $11.3 million to CARGILL, INCORPORATED. COMMODITIES FOR USG FOOD DONATIONS: 2000011135/4210007478/WHEAT, HARD RED WINTER BULK

Who is the contractor on this award?

The obligated recipient is CARGILL, INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Agriculture (Agricultural Marketing Service).

What is the total obligated amount?

The obligated amount is $11.3 million.

What is the period of performance?

Start: 2026-01-16. End: 2026-02-20.

What is Cargill, Inc.'s track record with large federal commodity contracts, particularly for food donations?

Cargill, Inc. is a major global corporation with extensive experience in agricultural commodities trading and processing. While specific details on their past performance solely on USDA food donation contracts are not provided in this data snippet, their scale suggests they are a frequent participant in large government procurements. Historically, large commodity suppliers often have a robust track record, but performance can vary. A deeper dive into past performance evaluations and any reported issues with previous USDA contracts would be necessary for a comprehensive assessment of their track record in this specific context. Their size and market position generally indicate a capacity to handle such large-scale awards.

How does the awarded price compare to historical benchmarks for Hard Red Winter Wheat purchased by the government?

The provided data does not include the specific per-unit price or historical pricing benchmarks for Hard Red Winter Wheat purchased by the government. The total award of $11,348,321.60 for an unspecified quantity of wheat makes direct unit cost comparison impossible without knowing the exact volume. To assess value, one would need to compare the implied unit price against market rates at the time of award and against similar government procurements for the same commodity, considering factors like grade, quality, and delivery terms. Market data from agricultural commodity exchanges would be a primary source for such a benchmark.

What are the primary risks associated with this specific contract, and how are they mitigated?

The primary risks for this contract include potential fluctuations in wheat market prices, which could affect the value proposition if market prices decrease significantly after the fixed price is set, or if the fixed price was set too high relative to prevailing market conditions. Logistical risks related to transportation and timely delivery of a large bulk commodity are also present. Mitigation strategies include the firm fixed-price structure, which transfers some price risk to the contractor, and the defined, relatively short delivery period (35 days), which limits the window for logistical complications. The government's oversight by the Agricultural Marketing Service is also a key mitigation factor to ensure contract compliance.

How effective are USDA food donation programs in achieving their objectives, and how does this contract contribute?

USDA food donation programs aim to reduce food insecurity by distributing surplus or purchased food commodities to individuals and families in need through various channels like food banks and school meal programs. The effectiveness is generally measured by the reach and impact of these programs on reducing hunger and improving nutritional outcomes. This $11.3 million contract for wheat directly contributes by ensuring a supply of a staple commodity for these programs. Its effectiveness hinges on the efficient distribution and utilization of the procured wheat within the donation network, ultimately supporting the program's goal of alleviating food insecurity.

What are the historical spending patterns for wheat procurement by the USDA or other federal agencies?

Historical spending patterns for wheat procurement by the USDA and other federal agencies can vary significantly year-to-year based on appropriations, program needs, and market conditions. The USDA, through programs like the Food Purchase Program (FPP) and the National School Lunch Program (NSLP), is a major purchaser of agricultural commodities, including wheat. Analyzing past USDA budget allocations and specific contract awards for wheat would reveal trends in volume and expenditure. Factors such as changes in domestic production, global supply, and the scale of food assistance initiatives influence these patterns. This contract represents a specific instance within potentially larger, fluctuating annual procurement volumes.

Industry Classification

NAICS: Manufacturing › Other Food Manufacturing › All Other Miscellaneous Food Manufacturing

Product/Service Code: SUBSISTENCE

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SEALED BID

Solicitation ID: 121NFG26B0001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15407 MCGINTY RD W, WAYZATA, MN, 55391

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $11,348,322

Exercised Options: $11,348,322

Current Obligation: $11,348,322

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline