I think you're on the right track already! Yes, even with the confusion :)
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You say her diet isn't bad, but unfortunately, that doesn't mean a lot. Not least since there is so much debate over what is good and what is bad.
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It's your family's journey, but I will tell you that I've tried both theories - the low fat/low calorie way, and the good fats/higher protein way - and the former didn't work for me, and the latter is working.
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I am a former vegetarian, so I'm sensitive to the subject of TF-vs-vegetarianism. I have a couple of thoughts, and while they may kind of conflict, I do believe in both:
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1) It's my personal and humble opinion (not being a scientist, nor a dietician, nor having ever met your daughter) that her health can be greatly improved without adding meat to it. I would suggest she completely eliminate sugar, which can be a difficult thing to decide to do. She can decide to do it temporarily, and if so, I'd recommend a 6 week period. If she believes she's made improvements, she should commit to another 6 week period, and so on. At some point I came to a decision that I wanted my health a lot more than I wanted a lifetime of sugar. I would also recommend considering an elimination diet to see if she is reacting to any common allergens. I've found for myself that something could be problematic for one's body without one even knowing about it. Main culprits: wheat and dairy. Others: peanuts, eggs, (and more).
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2) I'm a former moral vegetarian who now eats meat, but my morals have not changed. I'm ok with meat-eating but not factory farming. A few years ago I discovered there was an alternative - buying meat from small, local farms that I could visit, see the animals, ask questions, and feel satisfied (for myself) with the conditions. This is very personal, and for many people, it's not enough (they may feel all meat, no matter how the animals are raised, are immoral). But if your daughter objects to factory farming methods, she may wish to buy from non-factory farms. I don't eat much meat by American standards, but it all comes from farms I know and trust. I think eating meat might make it easier to have a healthy diet, and might be essential for some body types, but I don't think it's required for everyone.
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I would be concerned about insulin resistance, based on the things you wrote, and think that looking at the Glycemic Index of foods might be your first stop. I don't think it's the last stop, by far, but it can help get you both steered in the right direction right away.
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You ask, "Raw whole milk or skimmed?" My opinion is that skimmed milk is probably one of the worst things she could eat. By skimming the milk, you basically leave a sugary drink - not what she wants when she might be having insulin resistance problems. I'd say whole milk, and organic or at least something with fewer hormones and toxins (which is doubly important with whole milk, because that crud does end up in the fat). Personally, I'm also all for raw milk, but it's your decision. I'd say either raw whole milk from a quality, trusted farm, or organic whole milk from the store.
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You ask, "Whole grains or avoid grains?" As someone who just went grain free and had very surprising results, I'm biased toward trying grain-free. However, I will say that it took me a few months of thinking about it and mulling it over before I actually tried. So definitely eliminate ALL white flour right away, that's something you can do without research or drastic dietary changes. But yes, grain-free is definitely something to seriously consider, at least as a trial.
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You ask, "Limit fats or encourage good fats?" I've been careful to hedge my statements as opinions in my post, but I have to say, I think the science is in on this. I think it's as clear as it could be that limiting fats is a bad idea, and encouraging "good" fats is the way to go. I have personally lived this, I've seen it in other people. Limiting fats just doesn't work. It's just not good for us. I am eating absolutely as much avocado, coconut oil, bacon grease (from "pastured" pork), butter (from pastured cows), olives, etc as I want, and I am trimming down enough that people are noticing - which is really only a side point, the main point is that I'm feeling better, enough that exercise is now possible, energy is up, mental fog is clearing.
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And if I might sneak in a book recommendation, here's one I haven't seen mentioned here yet but I think would be helpful for your family: Ultraprevention, by Mark Hyman and Mark Liponis (MDs).
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