The following is feedback written in response to the "Making Farming Profitable Again Through Nutrition" draft created by the MAHA Regenerative Agriculture Think Tank reporting to RFK, Jr. It explores the problems that are preventing us from returning to a system of sovereign agrarian communities and an agricultural landscape rooted in stability and relationship.
When I first read this, my thoughts were very much along the same lines of many of the very smart people in this “room” about how incentivizing the outcomes we want is a great thing but that we have to be very careful on what it is we are measuring so as to avoid adverse outcomes rooted in faulty incentives or game-able metrics (things like Graeme Hand's work on Landscape Function Analysis or John Fagan’s on just how much we don’t know about nutrition science come to mind here as the few guys doing it right), but the more I thought about it the more I concluded that this room is smart enough that I don’t need to speak to any of that. The problems we are trying to address here are very cross-domain, and that’s my unique value-add so I am going to focus on that.
My worry is that we are missing the forest for the trees.
As a young person who just scaled one of the largest ultra high density grazing (UHDG) ranches in the nation (started with no money or agriculture skills, 0 cows to over 500, no land to square mile of owned land and rescuing many herds that lost their land leases along the way in less than 5 years), I have a pretty unique perspective on the current pain points -- what actually matters and can create real change and what matters that we probably can’t change but should talk about anyways.
First, a very important presupposition:
Regenerative Agriculture is much more profitable than commodity agriculture if we measure value in all forms (not just financial cash flow extraction but even there it is better) over long enough time horizons and at a competitive scale.
By definition, regenerative agriculture maximizes the solar chain of value through full photosynthetic energy capture then balances the stocks of ecological capital (resilience, future fertility, nutrient potential) with flows of immediate caloric production of food at greater volume than what industrial systems can produce and with less external energy inputs (cheap energy that is only currently available due to the US petrodollar hegemony).
But if that is true, why is regenerative agriculture currently a churn factory of excited young people in the front door and broken dreams out the back?
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The MAJOR pain point is that land (which is the main input into farming) has monetized due to inflation, green energy subsidies, foreign land investors, and more. The Store of Value function as a financial asset is out-competing the productive function of land, just like how gold doesn’t get used very much for industrial or electronic purposes because the monetary premium of it being held in a vault as a savings vehicle out-prices those uses. The same thing is happening to land.
Can we impact this? I have no idea, but it is a cornerstone problem and it is only getting worse. As the US spirals into ever greater levels of debt, inflation is not going to stop. The T-Bill markets starting to go no bid where the Treasury itself has to buy them is indicative of a sovereign debt bubble that late stage societies face and definitely has me concerned. Subsidizing outcomes while not talking about this feels like re-arranging deck chairs on the Titanic.
Regenerative style products don’t fit into the logistics systems of commodity supply chains (especially processing when it comes to animals). In the cattle world in particular, our entire system is built upon the assumption that cattle are fungible in location and context, which is only true due to medical and grain inputs. Regenerative supply chains must be locally built because the products are locally adapted in order to be environmentally matched.
Inversion in size:
89% of ranches in the US are less than 100 cows and of that tranche the average herd size is 22 cows most of which are family farms subsidized by full time city jobs (economically viable size is ~500 head for a regenerative cow calf operation in my opinion). These small ranches subsidize the large feedlot industry (I’ve read studies that say when not factoring land appreciation the average ranch in the US loses about 1.5% return on assets per year. This is why we see multi-generational farms slowly carving up and selling off their land year after year) when the shape of where scale is should really be the opposite.
The young generation can’t afford to start farming at a scale large enough to make it. I’ve solved this locally free market style with our community-backed Herdshare system but nearly every young rancher I know just flounders for 3-6 years until they quit.
The last handful of decades wages stagnated while assets appreciated, the young generation has been priced out and have zero chance to do what their grandparents did. The perversion of the government debt programs from their original purposes is a big problem here too. The age of the average rancher in the US is over 58 years old and for every two of those retiring less than 1 young person is taking their place.
It has become immeasurably hard for consumers to know whether they are actually getting what they think they are. This ranges from measuring food as life giving nutrients rather than just calories to country of origin labeling. Consumer energy is being thwarted away from what it is they truly desire to be supporting.
For clarity, literally none of the regenerative certification programs that I know of have an actually viable solution for this and I looked into partnering with many of them.
Regenerative farms are internalizing costs that commodity systems are not, yet there is no accountability for that to incentivize the industry to do the same. Regenerative farms don’t need a boost, the negative externalities of industrial farming need to have a cost on those perpetuating them.
The trend here is only getting worse with things like liability shields for chemical companies supplying products to the industry.
Granting agencies and universities have been largely captured by corporate interests, and their research and innovation is directed toward the needs of industrial production systems. This leaves regenerative producers to shoulder the burden of funding their own research and development programs (for example this is well into the 6 figures self funded on my own operation in the last 3 years), on top of all the economic challenges they already face.
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Put bluntly, regenerative farms are being asked to: repair land and ecosystems that were given to them broken, with no capital access, with no market access, to solve long time horizon problems without going bankrupt as they try to compete in the immediate while carrying all the weight of that, and in an industry where even the commodity system of rural agriculture is itself collapsing- despite their extraction of soil / ecological stocks and wanton disregard for the negative externalities they are producing in the environment and in consumer health outcomes.
And also put bluntly, this is a zero to one type problem that incremental assistance doesn’t fix. The subsidies proposed in this agenda would be a rounding error in my operation and would have done basically nothing for getting me off the ground and scaled the last 5 years.
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Solutions to Problem #1: Land access
Solutions to Problem #2: Market access.
I’ll speak to animals as that is what I know.
Solutions to Problem #3: Capital access.
The solutions in point 1 all help with this but I’m convinced the free market can solve this one by returning to community-oriented and backed local food production systems, though we will need to make sure the creative ideas here (like my Herdshare system) don’t get choked out by anti-competitive legislation that stifle innovation when big agriculture starts feeling threatened
Solutions to Problem #4: Misinformation.
Solutions to Problem #5: Negative externalities.
We need to find ways to make these have a real cost:
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These are big problems and there are even more than I listed (like the rural labor shortage problems), but as Johann Zeitsman says: “incremental changes do not address systemic problems”. I don’t know if we actually have any chance at changing this at the national level, which is why I’m focused on building locally, but having honest dialogue about it is the best shot we’ve got as leadership means providing both the vision and the will for the world as we want it to be.
And it is my privilege to be a part of sharing the duty of carrying both.
Signed,
Joel Hollingsworth
Founder of Smoke River Ranch