March 4 (Bloomberg) -- School-lunch programs will need greater subsidies as more U.S. children qualify for free or reduced-price meals this year because of the recession, education officials told a U.S. Senate panel.

“Serving healthy food is not without a cost,” Connie Boldt, the school food director in Knoxville, Iowa, said today before the Senate Agriculture, Nutrition and Forestry Committee. “My budget is suffering.”

Lawmakers this year are set to reauthorize child-nutrition programs, a priority in the spending plan outlined by President Barack Obama last week. The proposal adds $985 million to the Department of Agriculture’s current $15 billion budget for such programs. The plan cuts about $1.05 billion in annual benefits for growers of corn, wheat and other crops.

“As a country, we have gone from discussing millions, to billions, to trillions of dollars,” Katie Wilson, president of the School Nutrition Association, based in Alexandria, Virginia, told the committee. Meanwhile, school administrators are “struggling to balance pennies.”

More than 30.5 million children receive subsidized food through the program each school day, USDA figures show.

Schools where less than 60 percent of lunches are either free or come at a reduced price receive subsidies of $2.57 for each free meal, $2.17 for reduced-price and 24 cents for full- price lunches. Rates are higher in Alaska, Hawaii and districts with greater percentages of students from low-income families.

Additional Support

Surplus commodities including meat, dairy and vegetable products valued at 20.75 cents a meal also may be provided to schools. The USDA also offers to reimburse schools for breakfast and snack programs.

In the 2005-2006 school year, the average lunch cost $2.72 to serve, according to a study for the department by Abt Associates Inc. of Cambridge, Massachusetts. Price increases have pushed costs higher since then, according to committee Chairman Tom Harkin, Democrat of Iowa.

Reimbursement rates for the program are adjusted for inflation each July 1. Last year, U.S. food prices rose 5.9 percent, the most since 1980, according to the Bureau of Labor Statistics. This year, food prices are forecast to rise between 3 percent and 4 percent, the lowest since 2006, the Department of Agriculture said on Feb. 25.

Witnesses at today’s hearing also called for nationwide school wellness and nutrition guidelines overseen by the USDA to ensure money is spent effectively.

To contact the reporter on this story: Alan Bjerga in Washington at abjerga@bloomberg.net

Last Updated: March 4, 2009 11:52 EST