Localizing the Invisible Middle

During the COVID-19 pandemic, many grocery shelves sat empty, and millions of people did not have enough food to eat, relying on food assistance programs. Livestock animals could also not be processed due to bottlenecks at highly consolidated processing plants, and many farmers had to dump milk out in their fields or euthanize animals.

A report, commissioned by the Family Farm Action Alliance, estimated that pandemic-induced closures of meat processing plants operated by Smithfield, JBS, and Tyson caused farmers to destroy nearly 29,000 tons of edible pork and millions of pounds of chicken meat – just when 29 million Americans reported they did not have enough to eat.

The pandemic made glaringly evident how fragile, wasteful, and broken the current food system is – particularly the middle.

The middle of our food system – the aggregating, processing, storing, and distributing of food to deliver it to consumers – is like the piping of our house: it’s hidden from us, but absolutely essential to its functioning.

While the industrial-scale approach to putting food on the table has enabled greater volumes, uniformity, and efficiency, it has come at the cost of flavor, nutrition, sustainability, and resilience. It has created highly-concentrated and consolidated infrastructure that creates choke points in the processing, storing, and distributing of food.

The fragility of the middle of our food supply chain became – and still is – a crisis. The solution lies in once again localizing the middle of the food system.

Why We Need the Middle

Everything that takes place between the farm and the plate is considered the middle of the supply (or value) chain infrastructure. Most of the food products people consume today have been processed – whether minimally processed, like a bag of sliced apples, or ultra-processed, like an apple pie. Most people also do not butcher their own animals, but purchase meat after it has been processed.

Food for outlets such as grocery stores, schools, and hospitals must arrive washed and packaged. For this to happen, there needs to be an aggregator and processor. The middle part of our food system that makes it possible to deliver food from the farm to the customer in the form that they want is critical to making our food system work.

The middle of the food supply chain is responsible for 30-40% of the economic value added to the food system and greatly affects the nutritional quality of food, food waste, and accessibility to food. If you can’t process or distribute the food, then you just have crops or animals; you don't have food that many people are familiar with or can access and use.

There has been an awakening emphasizing the need to transition back to a more localized food supply chain, not only to address the vulnerability that COVID-19 revealed about our food system, but also to regain sovereignty over it. Food sovereignty cannot just rely on increasing the level of local production, but it must rebuild a localized, collaborative network so farmers, food aggregators, processors, distributors, and consumers can communicate and connect with one another.

Rebuilding the invisible middle is critical to fixing the bottlenecks in our food system that limit small processors’ and producers’ ability to achieve scale, stabilize prices, and ensure an accessible supply of food for everyone.

What Has Happened to the Middle?

In 1920, 30% of the American population lived on a farm. In the past, communities functioned on supply chain localization, meaning individuals grew their own food, processed it nearby, and transported the food short distances. If one part of that supply chain broke down, there most likely wasn’t a bottleneck since other processors or ways to distribute the food existed nearby or within the region.

More, smaller-sized aggregators, processors, and distributors enable a food system – or foodshed – to remain flexible and innovative enough to respond to fluctuations and differentiated markets. Having multiple, regional processors, such as a grain mill or meat processing plant, that accept smaller-volume orders or different kinds of livestock animals provides more opportunities for smaller farmers, as well as ensures a steady food supply.

This type of localized and regionalized network creates redundancy – and resiliency – in the food system.

With the onset of “get big or get out” agricultural policies and the adoption of large-scale industrial, global food production, the way communities feed themselves changed dramatically, as did the way that food was processed and distributed. The food system became more consolidated and concentrated with fewer and fewer companies owning seeds, processing plants, and distribution centers and those that did, began owning more and more. For example, in 1977 four companies processed 25% of the cattle industry, but today four meatpackers – Tyson, Cargill, JBS, and National Beef – control more than 80% of cattle slaughter in the U.S.

A consolidated and concentrated food system means large monopolies can and do drive up the price of food, manipulate markets because of unenforced antitrust laws, and underpay farmers.

During COVID, the big four meatpackers’ profit margins shot up by 300%, while small farmers and ranchers struggled to survive. As a result, consumers suffer from price volatility and practices that undermine the quality and nutrition of these meat products.

Meanwhile, the “maximum production” mantra of industrial agriculture shifted towards larger-scale processing plants and extended supply chains, since an industrial food system relies on long-distance transportation. When everything is functioning perfectly, it is seemingly a highly efficient way to process and move food around – although it is often less nutritious since it is shipped under-ripened and food waste increases due to spoilage in transit.

However, when there is a breakdown at any one point of the middle of the supply chain, such as a large processing plant closing down due to a COVID-19 outbreak or a food safety issue, the entire system falls apart. When operations are bigger than they need to be, massive waste happens. An industrial model is reliant on a supply chain with few fluctuations, but this is not how agriculture – or a food system – works.

The crippling bottlenecks and price spikes during the pandemic, along with other global disruptions like the war in Ukraine, make visible the fragility of overstretched supply chains and an underdeveloped middle.

Redundancy, such as was seen in the past with localized and regionalized food systems, may seem less efficient, but it is needed to create resilience.

New Efforts for Localizing the Middle

Localization of the middle of the supply chain requires a large, upfront investment. The past few years have seen historic government investment in the middle of the supply chain to build a more resilient food system.

The Arizona Resilient Food Systems Infrastructure Program (RFSI) will bring over $3.2 million in grant funding for projects designed to build resilience across the middle of the supply chain for Arizona-based food and farm businesses. These funds will support expanding capacity for the aggregation, processing, manufacturing, storing, transporting, wholesaling, and distribution of local food products, including specialty crops, dairy, grains for human consumption, aquaculture, and other food products, excluding meat and poultry.

Applications for this Arizona RFSI grant funding are being accepted through March 1, 2024, and the funding will begin rolling out in late spring/summer. Arizona farmers, ranchers, and food businesses can learn more and apply here.

Additionally, the U.S. Department of Agriculture’s (USDA) is investing $1 billion in expanding meat and poultry processing capacity through several funding opportunities:

The Meat and Poultry Processing Expansion Program – Phase 2 (MPPEP) is providing up to $123 million in grants to help eligible processors expand their processing capacity, which create new, better, and more processing options for meat and poultry producers. USDA Rural Development designed the MPPEP to encourage competition and sustainable growth in the U.S. meat processing sector and to help improve supply chain resiliency.

The Meat and Poultry Processing Technical Assistance (MPPTA) program ensures that participants in USDA’s Meat and Poultry Supply Chain initiatives have access to full-range technical assistance to support their project development and success. USDA’s Agricultural Marketing Service (AMS) is investing up to $25 million to establish a nationwide MPPTA network of support in four key areas: federal grant application management, business development and financial planning, meat and poultry processing technical and operation support, and supply chain development.
The Local Meat Capacity Grant (Local MCap) program will provide up to $75 million in grants to fund innovative projects designed to build resilience in the meat and poultry supply chain by providing producers with more local processing options and strengthening their market potential. This AMS grant program is targeted to support meat and poultry processors with smaller-scale projects, with a goal to increase processing availability and variety for local and regional livestock producers.
The Indigenous Animals Harvesting and Meat Processing Grant (IAG) Program
will provide up to $50 million to improve tribal nations’ food and agricultural supply chain resiliency by developing and expanding value-added infrastructure related to meat from indigenous animals like bison, reindeer or salmon. The program, under the USDA’s Food and Nutrition Service, will fund projects that focus on expanding local capacity for the harvesting, processing, manufacturing, storing, transporting, wholesaling or distribution of indigenous meats.

Arizona Producers & Businesses Bringing Back the Middle

It takes a strong, united community to localize the invisible middle, and Arizona’s family-owned farmers, ranchers, and businesses are dedicated to making it happen.

Little Colorado Meats

Little Colorado Meats (LCM) is located in Eager, Arizona and is the state’s first USDA-inspected mobile meat harvest unit and is shifting the way animal processing is done in the state. Since their slaughter services are mobile, LCM can travel to where a ranch is located if the appropriate setup and equipment is available. For ranches that are located far from Eager, LCM accepts animals at their onsite slaughter facility, which enables them to process livestock for ranchers around the state. LCM sells quality beef products processed from local livestock under their own brand, which often makes its way to the local food supply via food banks, schools, and direct-to-consumer markets.

Heartquist Hollow Family Farms

Heartquist Hollow Family Farms began as a homestead in Gilbert, Arizona and then expanded into a larger property to produce food for their local community. It now consists of a 117-acre ranch located in Winkelman with an onsite state-inspected meat processing plant. Their onsite operation allows their animals to live in familiar surroundings and not be stressed by industrial processing methods. They also process livestock for other local producers and custom cut at an artisan level to ensure superior cleanliness and quality. Heartquist Hollow processes beef, lamb, pork, goat, and other local livestock and sells products directly to consumers and local retailers and restaurants.

Rafter M Meats

Rafter M Meats is an Arizona family-owned business committed to continuing the long-standing tradition of making quality, healthy meat available to the community. They operate the state-inspected Willcox Packing House processing facility and partner exclusively with local ranchers to offer all-natural, hormone and antibiotic-free, locally sourced and processed meat directly to consumers.

Oatman Farms

Oatman Farms is the food company of Oatman Flats Ranch, which is located in Gila Bend, Arizona and the state’s first certified Regenerative Organic farming business model. Oatmans works to revitalize and sustain family farms in hot and dry desert environments. They grow heritage crops and wild Mesquite using no chemicals. Their heritage grains are stone milled at low-impact and low-temperature conditions, which preserves the bran and germ and its nutrition integrity. They process their Mesquite flour onsite with a hammer mill. Their flours contain no preservatives and are incorporated into baking flours, sourdough bread mixes, and waffle/pancake mixes.

Hayden Flour Mills

Hayden Flour Mills is dedicated to naturally stone milling nutrient-dense, local heritage and ancient grains at an historic flour mill that they restored in Tempe, Arizona – now known as Hayden Flour Mills. They spent the last decade reviving historic and forgotten grains, restoring other rusty old mills, growing their acres in production from 30 to over 400, and adopting practices that are healthier for both people and the planet. Their products are freshly milled, chemical-free, and packaged onsite for freshness, which highlights the natural texture, aroma, and flavor of ancient and heritage grains.

Queen Creek Olive Mill

Queen Creek Olive Mill is Arizona’s only family-owned olive mill and farm. They are located at the base of the San Tan Mountains in Queen Creek, Arizona and refer to themselves as a “real blossom to bottle experience.” They grow their olives north of the main property, harvest them, and press them into oil onsite. They sell olive oils and body care products directly to customers and other retailers.

Pivot Produce & Pivot Direct

Pivot Produce is a one-of-a-kind food distribution model operating in Tucson, Arizona that works to bridge the gap between local farmers, chefs, and other farm-to-table market channels. Serving as an intermediary between small-scale farms and wholesale markets, Pivot Produce provides access to healthy food and helps rebuild regional agriculture economies in order to foster community care. Pivot Produce describes itself as the antidote to massive corporate food distributors: farmers get a fair price for their products and restaurants get to use the best of what Southern Arizona farms have to offer. It’s distribution on a local level, fostering a supportive and engaged food scene each step of the way.

Pivot Direct is an offshoot from Pivot Produce, which came about during the COVID-19 pandemic as a way to deliver fresh produce from local farmers to local residents.The direct-to-consumer delivery program aggregates produce from over 30 different farms in Southern and Central Arizona and has expanded to include local eggs, honey, cheeses, and freshly-baked bread.

Sun Produce Cooperative

Sun Produce Cooperative formed in 2017 to keep small, local farmers on the land, increase access to in-season Arizona produce, and help transform the Arizona food system while creating viable alternative distribution streams for its smaller-scale producers.The co-op coordinates farmer- and distributor-member production, aggregation, and distribution to increase sales of locally-produced fruits and vegetables. It serves children and families, restaurants, wholesalers, neighborhood grocery stores, farmers markets, schools, food banks, hospitals, and others who want to provide locally-grown food to their customers. Sun Produce Co-op’s partnerships with Pivot Produce in Pima County and farms in Yavapai County allow it to offer produce throughout the Valley of the Sun and Southern Arizona, and it is working to expand its reach into Northern Arizona.

Phoenix Food Co-op

Phoenix Food Co-op is a community-owned cooperative grocer that provides healthy, locally-produced, and accessible food while also working to create a community space for all people to gather. They are in the process of developing a brick-and-mortar store near public transit in a Phoenix food desert, an area with limited access to affordable and nutritious food. Currently, they sell farm-fresh local food aggregated through a buyer's club with online ordering and weekly distribution at a central warehouse facility. Their online shop offers produce boxes (free for community members in need), breakfast boxes, dinner boxes, and many a la carte items from local producers and food businesses.

The Local Co-op

The Local Co-Op is working to build a local food system in southeastern Arizona. The Local Co-op is a grower-operated food hub located in Cochise County and striving to create a more secure and equitable food system in its local community. They aggregate fresh, sustainably produced food from local farmers, ranchers, and small-scale growers and offer delivery points for community members. They also operate a storefront in McNeal that showcases locally-grown and raised food items, as well as serves as a pickup point for their Community Supported Agriculture (CSA) program.

Hopi Tutskwa Permaculture Institute

The Hopi Tutskwa Permaculture Institute is a community Indigenous-led nonprofit based in the Village of Kykotsmovi, located in Northern Arizona on the Indigenous Hopi Reservation. They recently received support from USDA Rural Business Development Grants to help expand their building into a regional food hub. The hub will work to address issues impacting the Hopi reservation by creating opportunities to increase access to culturally-significant food, aggregating food from local farmers and distributing it to community members, and developing sustainable food projects, including a farmer’s market and veggie share.