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The Missing Middle of Our Food Supply Chain


March 03, 2023

Dear Chairwoman Stabenow, Chairman Thompson, Ranking Member Boozman, and Ranking Member Scott, and Honorable Members of the Senate and House Agriculture Committees:

In an increasingly uncertain economy, disrupted by severe and erratic climate conditions and global supply chain instability, regenerative agriculture represents a clear path forward for American businesses.

The Regenerate America Business Advisory Task Force represents leading businesses in the food and fashion sector committed to regenerative agriculture; the American Sustainable Business Network is composed of more than 250,000 businesses nationwide committed to sustainability. For all of our members, regenerative agriculture is not a trend. Regenerative agriculture is a way to securely grow and de-risk their businesses while simultaneously meeting ESG goals and fulfilling the rapidly increasing consumer demand for products with ethical and environmental attributes.

Yet, these businesses have experienced barriers to fully bringing regenerative agriculture into their U.S. supply chains. In addition to the low number of agricultural producers trained in soil health practices, there are national supply chain gaps in the form of missing aggregators; limited processing and manufacturing capacity; and the associated shortages of skilled labor. Investments of resources in this “missing middle” is essential for both farmers to access existing markets and for brands and businesses striving to build new ones, but requires the federal government’s partnership.

Across our coalition we share the following challenges:

  • Severely limited supply and inconsistent availability of regenerative product;
  • Lack of sufficient aggregators, processors, manufacturers, and quality controls; 
  • Burdensome, multi-source financing models are prohibitive to developing and securing domestic supply chains dedicated to products produced with regenerative attributes.

The U.S. market for regenerative products is poised to grow quickly in the next 10 years. Today, 60% of U.S. consumers want to be able to choose a product that is better for the environment. During the pandemic, meat labels with environmental and labor-related claims grew 18%, while other meat product sales lagged. Food brands and products that explicitly express climate values are in the top 10 Whole Food market trends for 2022. And demand is not limited to food–consumer demand for ethical and sustainable fashion is expected to grow from $6.93 billion in 2021 to $7.57 billion in 2022. Yet, due to this “missing middle”, there is simply not enough supply to meet this rising market demand.

As businesses that want to increase purchases of American-grown agricultural products produced in healthy soils and with regenerative practices, we are looking to Congress and the upcoming Farm Bill to support the growth of markets for products with these characteristics, and to help close the gaps in supply chains that are currently preventing market growth. Development in this “missing middle” of the supply chain is essential to access existing markets and build new ones. 

Without guaranteed markets, a fair pay price or ability in some instances to negotiate a fair contract, farmers aren’t willing to take all the risk. Technical assistance is important, but it isn’t the final barrier. Access to reliable markets that pay a fair price remain the major deterrent to growth.” – Julie Davenson, Northeast Food and Fiber

Thank you for considering this critical topic. We have included below several case studies to illustrate these challenges and have a list of policy recommendations available for review.


Members of the joint Regenerate America/ASBN Business Advisory Task Force



Applegate is the nation’s leading brand of natural and organic meat products and   sells into grocers throughout the US. In 2019 they committed to bringing the Do Good Dog to market using verified regenerative beef grown and processed in the U.S. When bringing the product to market, Applegate had difficulty finding an aggregated supply of verified regenerative beef that could meet the company’s volume requirements on a consistent basis.

Applegate’s volumes are considered mid-sized, so small slaughter plants are usually not able to meet  the company’s quality assurance and volume requirements.Slaughter prices at small plants are also expensive because economies of scale are not fully realized until the midsize plant level.

Profitability of a slaughter plant is driven by throughput, carcass utilization and by-product recovery.  Small plants don’t often have the  equipment to capture and process by-products like hides and offal, so they’re  dumped or sent to landfills. These inefficiencies are passed along as higher prices to customers. At the same time, Applegate’s regenerative beef volumes are too small for large plants like Cargill to justify the segregation required for traceability. Applegate brought the DO Good Dog to market in 2021 using a mid-sized aggregator and processor in California. However, making regenerative products more accessible will require efficiently scaled mid-sized supply chains that companies at Applegate’s scale can easily plug into.

Key Takeaways: 

  • Funding for midsize, regional processing infrastructure is critical for expanding market penetration for regeneratively grown products.


Tree Range Farms & The Regenerative Agricultural Alliance are a for profit and non-profit partnership based in Minnesota and Iowa. These partners are dedicated to on-boarding new and existing small farmers and supporting the transition of large farms to a diversified agroforestry poultry production system. The Regenerative Agricultural Alliance trains farmers, provides technical and financial assistance for paddock and coop development, and runs a processing facility in the main farmer region. Tree Range purchases, brands, and sells chickens into the Twin Cities Co-ops and Minnesota grocery markets. The meat processing facility located in Stacyville, Iowa has faced challenges accessing financing from the federal government for expanding cold storage as such loans and grants are only available to farmers and not to farm aggregators. Funding for processing and storage for meat, grains, and other crops at the aggregator level is critical for this company.

Key Takeaways: 

  • Lack of funding for agricultural aggregators is preventing small and mid-scale farmers gaining access to value-add markets. 
  • Funding for midsize, regional processing infrastructure is critical for expanding market penetration for regeneratively grown products.


Carolem Farms is a holding company owned by the Marciano family and operated by Wells Fargo. Despite extensive agricultural planning with the state’s agricultural college, professional technical assistance for the agricultural lessee, and on farm equipment/capital financing from the owning family, a Carolem farm based in Iowa was unable to transition from corn and soy to organic beef, hay, and small grain production. The barriers to this transition were the outsized cost of organic fertilizer in the area and the lack of regional meat and grain processing facilities. Processing facilities within a 1.5hr drive would have allowed the farmers to sell value-added products (i.e. steaks) into regional groceries and other local markets. This farm was ultimately sold as a commodity corn and soy farm and the family purchased two other organic farms in the southeast.

Key Takeaways: 

  • Even with TA, equipment financing, farmer agreement and owner directive, without access to processing facilities it was uneconomical to transition the farm out of conventional row crops.


Vermont Livestock Slaughter & Processing Co is a small-scale slaughterhouse and processing business in Ferrisburgh, Vermont. Their services link regenerative grazers to consumer markets. They recently expanded thanks to the combination of the Meat and Poultry Process Expansion Program (MPPEP). The company was only able to apply for the grant (which they found to be overly complex and highly time consuming) because of a partnership with Bio-logical Capital which provided both business TA and financing for grant writing and basic business operations. Most processors, especially meat businesses, have everyone actually working all day and don’t have capacity to apply for grants and USDA loans.

Key Takeaways: 

  • Small/Medium scale processors and aggregators most often do not have the financial resources to apply for federal grant/loan programs.


Thousand Hills Cattle Co (dba Thousand Hills Lifetime Grazed) The #1 brand of 100% grassfed beef in the US natural retail channel*. Founded in 2003, Thousand Hills works with 50 family farms across the U.S. to raise Lifetime Grazed Grass Fed Beef with regenerative agriculture practices. To date, 500,000 acres have been transitioned to regenerative practices to support biological diversity, natural resources, native wildlife habitat and soil fertility. Regional, decentralized processing builds a resilient supply chain for customers while invigorating rural economies. * Mission: Nourishing soil, plants, cattle, and people by grazing cattle for their lifetime.

Thousand Hills’ regeneratively raised products are sold at thousands of small, independent grocery stores nationally, and are looking to expand. The brand’s network of producer renegades is continuously searching for a way to positively impact more land; however, this is posing more and more challenges. Accessing new land for lease or purchase is one issue with growth. Landowners would rather lease property to commodity groups who have better access to a bigger number of subsidies than small-scale grazing operations, which makes it impossible for them to compete financially with row crop commodities. Grazing leases are seen to be lesser valued and more risky.

*Total US Natural Enhanced (SPINS Propriety), HWI Universe, FZ & RF BEEF & PORK CUTS Subcategory, L52 Weeks ending 12/04/2022

Key Takeaways: 

  • Agricultural practices that support soil health and greater carbon sequestration are being falsely “outcompeted” by subsidies for commodity crops.
  • Grass fed small to medium scale grazing producers need fair competition with commodity crops in order to access land. 
  • Either increase subsidies/risk reduction to small to medium sized ranchers OR reduce subsidies to commodity crops.


Northeast Food and Fiber  is a vertically-integrated regenerative meat company founded to help farmers make the transition to regenerative land management by providing the necessary and missing infrastructure to secure market access. Set in Bennington, Vermont, NEFF is building the Regenerative Food Center, a 43,000 sq. ft. facility that will serve the needs of 100-150 family farms and coordinate a distributed network of regional slaughterhouses to modern and centralized efficient meat and leather processing, aggregation and distribution to the 50 million customers in the northeastern US and brands around the globe. They have been unable to apply for  several key Farm Bill Funding and Grant Programs due to lack of, or lack of access to funds required for pre-planning/feasibility studies or matching requirements. In addition, eligibility requirements for grants such as the Meat and Poultry processing requires business to have been established for a minimum of three years. This is contrary to the goal of the funding to reduce consolidation in the industry and support the development of new regional meat processors.

Key Takeaways:

  • Small and medium sized businesses and entrepreneurs lack access to the higher levels of matching and feasibility funds that are required for eligibility to USDA grant programs. 
  • Eligibility requirements should be expanded to allow new business to apply for funding.


King Arthur Baking Company is one of the oldest companies in the county. They aim to transition their grain supplies to 100% regenerative by 2030 as part of their commitment to supplying quality and nutritious grains to their customers. One of the primary difficulties they are facing in expanding their procurement of regenerative wheat is the bottlenecks in supply chains. The mills they work with do not have capacity dedicated to regeneratively grown product–they are unable to separate out the regenerative wheat from the conventional wheat, and so King Arthur is not able to discern exactly how much of the product they are receiving is regenerative and can not make any claims to their customers. Access to resources and business technical assistance could help mills expand and provide dedicated processing infrastructure to ensure purchasers like King Arthur are able to accurately market their products.

King Arthur, in their effort to support U.S. farmers, is also seeking to source more from underserved, small-scale, and socially disadvantaged farmers who are already using regenerative farming practices. However, King Arthur has found it almost impossible to buy from these farmers on the scale they need to make it economically sound because of the lack of aggregators and regionally available processing infrastructure. These farmers do not have access to adequate infrastructure from which King Arthur can purchase. Increasing BIPOC and small scale producers’ access to federal loans and grants for aggregation businesses and regional infrastructure could help businesses like King Arthur access more U.S. regenerative farmers.

Key Takeaways: 

  • Lack of dedicated processing infrastructure is blocking value-add market access for regenerative wheat farmers.
  • Small/Medium scale processors and aggregators most often do not have the financial resources to apply for federal grant/loan programs.
  • Small farmers do not always have the acreage needed to qualify for current USDA programs.


Fibers, Fashion & Textiles

“Beginning in the early 1900s, apparel and home textile brands built a multi-tiered, highly fragmented global supply chain designed to chase the lowest prices. Overseas production has led to an industry practice of extremely long lead times, up to 18-24 months, and a system of outsourcing and subcontracting that can make environmental and labor violations invisible even to highly ethical brands. These industry conventions create many disincentives and barriers for brands to work directly with farmers and mid-scale U.S. fiber processors. Following the exodus of manufacturers to other countries following NAFTA. Small to mid-scale producers of fiber and flora (dye)  products have repeatedly run into the challenges with fragmented and fragile U.S. infrastructure especially in the “missing middle” of mid-scale, regional production and processing.”

Farmers and entrepreneurs/small to medium sized businesses are looking to national fashion brands for contracts that will give them guaranteed revenue to increase production, but brands are looking for a guaranteed scale of production before they will commit to contracts. Lack of suitable and available aggregation and processing infrastructure is a major missing link (and block to market development) between these parties which represent both supply and demand. 

Companies and brands in the fashion space wishing to access regeneratively grown fibers cite the following issues as barriers: lack of volume to leverage/influence to transition to regenerative, cost of regenerative verification/certification, cost of needed infrastructure to transition, costs to share the risk/reward to move to regenerative among producers and brands/companies.

Key Takeaways: 

  • Natural Dyes/Dyeing: U.S. natural dyes are in increasing demand by brands; garment-dyeing capacity is a major bottleneck.
  • Wool: Legacy U.S. industry with weak links at the shearing, testing, and scouring stages; ranchers need options to profit from all grades of wool.
  • Leather: Lack of U.S. tanning capacity presents a food-fiber crossover opportunity to incorporate on-site hide processing equipment in new regional slaughterhouses to increase traceability and value to ranchers.
  • Financial Technical Assistance (TA) for entrepreneurs: Lack of financial technical assistance and business planning support for fiber systems. While skilled in production, they lack appropriate TA to help them access capital for growth.

Guess: In 2020 the company made a good faith attempt to produce a line of regenerative jeans that would be grown, spun, woven, dyed, and sewn in the US. They hired a four-person expert team including a national textile supply chain specialist. There were a number of complicating factors including the farmers’ need for upfront contracting for the regenerative cotton which the company could not do, and the need to secure exact product specifications in timing with the brands usual production schedule which the US supply chain, in particular aggregator companies, could not provide. Finally, there is currently only one facility in the US that can dye the required volume of denim with plant based indigo (a key differentiator from the coal tar based chemical dye). This denim mill, Vidalia Mills, was in need of an essential part that was stranded in China due to disruptions caused from the global COVID pandemic. To produce the regenerative jeans would have required going outside the United States to a dye facility located in Mexico. While Guess continues to pursue sustainability, the company was unable to complete the regenerativve jean project.

Citizens of Humanity: The jeanswear manufacturer based in Huntington Park, California has annual sales of $160M and a strong commitment to regenerative agriculture. For the last two-and-a-half years they have struggled with a familiar series of supply chain challenges. The price of cotton, the key raw material for any denim company, has soared, driven higher by supply chain snarls, crop-busting weather extremes and a U.S. ban on imports from Xinjiang (China’s largest cotton-producing region). Unlike Guess and many other denim brands, Citizens is privately held, and was able to make the decision to contract in advance directly with farmers for cotton grown in healthy soils. This was done at the company’s expense as they paid far beyond market prices for cotton. The six farmers they contracted with collectively cover 800 acres of domestic farmland that should yield enough cotton to create 500,000 jeans (one third of their production) at a cost of $1M for the first season. The denim will be processed outside of the US at the Turkey-based Orta mill. 

Key Takeaways: 

  • There is a high demand from fashion brands for regenerative cotton and plant based dyes, but they face a number of supply chain issues.
  • There is only 1 denim mill in the US that can provide brand level volumes and integrate plant based dyes.
  • Regenerative supply is still too dispersed and small scale for mainstream brands to access through their existing product development process. 
  • To produce denim grown in healthy soils requires extraordinary efforts on the part of the brand. To date only boutique producers or smaller privately held companies have been able to produce regenerative product lines. 
  • Segregation and traceability is a challenge. For example, most processors do not have capacity or infrastructure to keep regeneratively-grown beef or leather hides separate from those that are conventionally produced.

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