Child and Adult Care Food Program (CACFP): How Daycare Meal Subsidies Lower Food Bills

Feeding an infant or toddler balanced meals represents a major secondary expense for families and childcare providers. Through the Child and Adult Care Food Program (CACFP), the U.S. Department of Agriculture (USDA) provides federal cash reimbursements to licensed childcare centers, Head Start programs, and family child care homes for serving nutritious meals and snacks to enrolled children.

When a childcare center or home provider participates in CACFP, parents save between $100 and $180 per month on groceries while ensuring their child receives balanced, regulated nutrition.

How USDA CACFP reimbursements work

Administered at the federal level by the USDA Food and Nutrition Service (FNS) and operated through state education or health departments, CACFP reimburses providers for up to two meals and one snack (or one meal and two snacks) per child per day.

Reimbursement payment rates are established annually:

• Center reimbursement tiers: In childcare centers, reimbursements are determined based on the family income of enrolled children (free, reduced-price, and paid rate tiers). Centers serving high proportions of low-income children receive maximum federal reimbursements.
• Family child care home tiers: Home-based providers receive Tier I or Tier II reimbursement rates based on the provider's geographic census tract income or household income. Tier I providers receive higher per-meal reimbursements.
• Direct provider payments: Federal reimbursements flow directly to the provider or sponsoring organization, allowing centers to provide all food without assessing separate meal surcharges on parents.

Review our budgeting guide on how to budget for daycare to see how meal programs impact household food expenses.

Mandatory nutritional guidelines

To receive federal reimbursements, participating providers must plan and serve meals meeting strict USDA dietary guidelines designed to promote healthy child development:

• Fluid milk: Unflavored whole milk is required for children age one; unflavored low-fat (1%) or fat-free milk is required for children ages two through five.
• Whole grains: At least one serving of grains per day must be whole-grain rich. Grain-based desserts (such as cookies, pastries, and frosted pop-tarts) are prohibited.
• Fruits and vegetables: Meals must serve distinct fruits and vegetables. Two vegetables can be served at lunch or dinner, but two fruits cannot replace a vegetable.
• Sugar limits on breakfast cereals and yogurts: Cereal must contain no more than 6 grams of sugar per dry ounce, and yogurt must contain no more than 23 grams of sugar per 6 ounces.

For infants under age one, providers must offer at least one iron-fortified infant formula brand and introduce iron-rich cereals, pureed fruits, and vegetables when developmentally ready.

Financial savings for enrolled families

Enrolling in a CACFP-participating childcare program delivers direct financial and lifestyle benefits to parents:

• Grocery budget savings: Providing full breakfast, hot lunch, and afternoon snacks at daycare saves parents roughly $25 to $40 per week ($1,300 to $2,000 annually) in family grocery bills per child.
• Morning routine savings: Parents eliminate the daily time requirement of packing lunchboxes, preparing temperature-controlled ice packs, and sanitizing food containers.
• Formula cost offsets: For parents of infants, centers providing iron-fortified formula save families $150 to $250 monthly on retail infant formula cans.

Before enrolling, ask prospective providers whether they participate in CACFP and whether meals and snacks are included in published weekly tuition. Compare provider tuition in our state childcare cost database and plan your budget with the childcare calculator.