Following up on HighGround’s SNAP Update Part 1: Dairy Is the Largest Percent of SNAP Grocery Spending analysis, the USDA also established changes to SNAP retailer stocking requirements that could impact retailer eligibility and how SNAP participants access eligible food products.
In May 2026, the USDA also finalized a rule stemming from the 2014 Farm Bill that establishes stricter stocking standards for SNAP retailers. The new rule took effect July 7, 2026, and store audits will begin on November 4, 2026. The USDA states these changes were designed to help SNAP retailers more effectively serve participants by offering a wider variety of foods to improve nutrition and expand healthy choices. As such, the stocking rule changes have several implications for dairy in particular, with an emphasis on dairy’s nutritional benefits.
The most significant change under the new rule is an increase in the required number of food varieties that SNAP retailers must stock. The previous rule required three varieties within each of the four major food groups: protein (meat/eggs/beans/nuts), grains, fruits/vegetables, and dairy. The new rule increases the required number of varieties per food group from three to seven. Of these varieties, at least one must be perishable in three of the four major food groups. Retailers must also stock three units per variety, bringing the total number of required units across all four food groups from 36 to 84, a 133% increase. This means that, to continue accepting SNAP benefits, retailers must now stock at least 84 units across seven different varieties within each of the four major food categories.
For dairy specifically, this means retailers must stock 21 units across seven different varieties, up from nine units across three varieties previously. To help retailers meet this requirement, the USDA expanded the number of varieties recognized within the dairy category. Under the new rules, shredded cheese is separated from chunk cheese as its own individual variety, meaning both products now count separately toward the seven required varieties. The USDA also established sour cream and flavored milk as their own varieties.
The USDA noted that a product’s fat content, size, or brand does not determine whether it qualifies as a separate variety. For example, a gallon of whole white milk and a half gallon of skim white milk both fall within the plain perishable liquid milk category and therefore count as only one variety.
Additionally, the USDA expanded the eligible varieties to include plant-based alternatives, though a maximum of three of the seven required dairy varieties can come from plant-based sources. Retailers are not required to stock any plant-based alternatives and can meet all seven dairy variety requirements through mammal-based dairy products.
New Stocking Standards for SNAP Retailers: Dairy
Mammal-based
At least 4 of 7- Plain perishable liquid milk
- Flavored milk
- Multi-ingredient perishable milk product
- Shelf-stable milk
- Dried or powdered milk
- Fermented or cultured dairy beverages
- Sour cream
- Cheese
- Shredded cheese
- Yogurt (non-liquid)
- Cream
- Infant formula
Plant-based
Up to 3 of 7- Soy milk
- Cashew cheese
- Coconut yogurt
- Oat creamer
While the USDA added three new dairy varieties, it also removed one and made other adjustments that could negatively impact dairy offerings. The new rule excludes butter as a qualifying dairy variety due to its fat content, instead categorizing it under “accessory foods” alongside vegetable oil and lard. Other dairy accessory foods include ice cream, whipped cream, and cheese dips, spreads, and sprays. The USDA also moved whey protein shake mixes and whey protein bars into the accessory foods category, as they are not considered nutrient-dense whole food products. Accessory foods can still be purchased with SNAP benefits and offered by SNAP retailers; however, they no longer count toward the varieties needed to meet the new stocking requirements. As a result, retailers will need to stock additional qualifying products to maintain SNAP eligibility if they wish to continue offering accessory foods. Because of this change, fewer SNAP retailers may choose to stock butter as they reevaluate their product offerings to align with the new requirements.
During the public comment period, the USDA received numerous comments from small-format retailers, including convenience stores and small grocery stores such as dollar stores. These retailers noted that the changes to stocking requirements would make it more difficult to obtain or maintain SNAP authorization due to space constraints and additional costs associated with stocking more perishable products. In its Impact Analysis, the USDA acknowledged that small-format retailers will likely be disproportionately impacted by these changes, estimating that the new requirements will result in an annual loss of 5,000 SNAP retailers, compared to the usual annual attrition rate of 2,000 under previous standards. The USDA also noted that while convenience stores accounted for 44.5% of all authorized SNAP retailers in 2025, they represented just 5.2% of total SNAP benefits redeemed. Given that convenience stores account for such a small share of SNAP redemptions, the USDA believes the changes are justified despite the disproportionate impact on these retailers.
Small-format retailers raised another concern during the public comment period regarding the potential impact of losing SNAP-authorized retailers in certain communities. In the Federal Register, the USDA acknowledged the importance of convenience stores to individuals with limited mobility and those living in rural and Tribal communities, where nearby convenience stores may be the only accessible locations to purchase food. Here, too, the USDA pointed to the limited share of SNAP redemptions at convenience stores to justify its decision. The agency also noted that convenience stores account for 76% of all SNAP sanctions, suggesting they represent a significant program integrity risk despite accounting for a relatively small share of benefit redemptions. Still, individuals with limited mobility and those in rural and Tribal communities face the risk of reduced food access if a significant number of convenience stores lose SNAP authorization due to their inability to meet the new stocking requirements.
Putting this all together, the USDA adjusted SNAP retailer stocking requirements to provide SNAP participants with greater access to nutritious foods. For dairy, the addition of new qualifying varieties and the increase in the number of varieties required per food category from three to seven could boost the number of dairy products on retailer shelves. Although the removal of butter as a qualifying variety could result in fewer retail butter offerings and potentially lower sales, there is likely a net benefit to dairy from the increase in required dairy products stocked by SNAP retailers. Unfortunately, this positive development may be offset by declining SNAP participation. Although the new stocking requirements could make dairy more widely available to SNAP participants, the number of participants has fallen dramatically over the past year, reducing the total SNAP dollars available for dairy purchases, as established in Part 1 of this analysis series.
Overall, dairy has grown in popularity among American consumers. However, with fewer SNAP dollars available and economic headwinds pressuring consumer purchasing decisions, the potential benefits of expanded dairy stocking requirements may be outweighed by declining SNAP participation and reduced purchasing power. As discussed throughout this analysis series, these changes to the Supplemental Nutrition Assistance Program (SNAP) could ultimately weigh on dairy purchases and consumption.
