prices of milk and infant formula indicate the potential for large increases in the future costs of the WIC food packages with or without revisions, the chapter addresses the sensitivity of estimates to changes in the prices of these foods.
In the process of redesigning the food packages, the committee estimated the cost of a number of possible sets of food packages. At each iteration, possible adjustments were considered in the types and amounts of foods needed to achieve cost neutrality while meeting the criteria shown in Chapter 1—Introduction and Background (Box 1-1). In following this approach, the committee initially worked with the basic food packages for women and children—that is, the food packages without substitutions. Depending on the package, these basic food packages include fluid milk, cheese, peanut butter, dried beans, whole wheat bread, eggs, tuna, and fresh fruits and vegetables. Because the committee strived to allow for flexibility in the revised food packages, the costs (and nutrient content) of food packages that incorporated substitutions at specified rates were also estimated (see Appendix E). The final cost estimates for the set of revised food packages include the cost of making selected substitutions at specified rates (see Appendix E)2 to the basic set of food packages. The specified substitution rates are based on assumptions; differences in assumptions would lead to a range in estimated average participant cost per month. Since most of the substitutions are higher-cost food items, the estimated cost of the set of revised food packages with substitutions is higher than the cost of less flexible food packages.
Within regulatory parameters, WIC state agencies currently can control costs by specifying a food item in lower-cost forms, varieties, brands, or container sizes. In estimating cost, the committee did not consider additional state or local agency discretion. Instead, costs were calculated using various forms, varieties, brands, and container sizes of food items that are representative of current practice or common use (i.e., based on the average share of household market purchases in national survey data) (ACNielsen Homescan; ACNielsen, 2001).
In evaluating the cost neutrality of proposed changes, the committee estimated the food costs to the WIC program based on the estimated costs
Bases of Assumptions Used in Nutrient and Cost Analyses of Food Packages can be found in Tables E-1 (for infants) and E-2 (for children and women) in Appendix E—Cost Calculations. Calculated Costs of Representative Amounts of Foods in Revised Packages can be found in Tables E-3A (for infants) and E-3B (for children and women).