Eh, I think if there was a consistent demand that you would see some local farms that could compete on cost when you factor in the transportation costs. Unlike Walmart that is controlling its shipping from centralized locations along with all of its other crap that ConAgra can ship too easily, in this case you'd have each individual school district requiring its own supply of jus the food. SUre, some middlemen brokers would pop up to try to facilitate distribution, but I think you could work it out if it were structured correctly from the beginning.
ETA: building on the home ec concept, I think it would also be good if some school districts could grow some of their own food as part of the curriculum. Even in urban areas, eminent domain could be used on vacant land. No, not every kid needs to know how to be a farmer, but it is a class that doesn't cost much and teaches some good lessons related to a variety of classes (biology, history, geography, phys ed., etc).