WASHINGTON, July 15, 2015 - The spring wave of highly pathogenic avian influenza (HPAI) infections appears to be over, so lawmakers and producers are turning their attention to avoiding a similarly devastating outbreak in the fall. In addition to biosecurity and depopulation protocols, senators are focusing on the key issues of compensation and risk management for affected growers.
The latest outbreak, which began in December and appears to have ended in mid-June (the last detection was June 17) resulted in the depopulation of over 48 million chickens and turkeys, leaving many producers without the income from their flocks. All birds affected in the 223 detections have now been depopulated, beginning the process for hundreds of farms to begin re-filling their now-empty facilities.
Many producers say the reimbursement system is inadequate because it fails to account for the down time and lost income while they clean facilities and prepare barns for more birds.
At a hearing of the Senate Agriculture Committee, Iowa turkey producer Brad Moline said his farm lost two thirds of its annual income due to the HPAI outbreak. He said many producers would have had to “hang it up” without the current indemnification program, adding that his own operation was currently surviving on savings and indemnity funds. However, in some cases, producers lost not only the infected flock, but also the chance to repopulate in a timely manner.
Egg producers also point out that the current indemnity program doesn’t adequately account for the future value of the eggs that would have been produced by the lost hens. At a hearing of the Senate Committee on Homeland Security and Governmental Affairs, Scott Schneider, president of the Wisconsin Poultry and Egg Industries Association, said hens can continue laying eggs at a facility “for over a year, sometimes even two years.” He added that switching to reimbursement based on future production value rather than on the value of the live animal “would help me out an awful lot.”
In some cases, the owner of a farm isn’t even guaranteed an indemnity payment. Many poultry growers work on contract; they own the facilities and provide the labor necessary in the production process, but a separate company provides the animals. Current HPAI reimbursement regulations dictate reimbursing the owner of the birds, but not necessarily the contract grower. At the Homeland Security and Governmental Affairs hearing, Chairman Ron Johnson, R-Wis., said it was “obviously devastating” not just for the owner of birds hit by HPAI, but the operator of the farm too.
“We can’t allow people like Mr. Schneider to be exposed,” Johnson said. “I thought we had coverage; I thought he was just having a hard time obtaining that coverage. I’m afraid he’s completely exposed.”
John Clifford, deputy administrator of USDA’s Animal and Plant Health Inspection Service (APHIS), said in those cases, the agency works with the company receiving the indemnity “to make sure payments do go to the contract growers.”
Several producers also expressed interest in some kind of insurance program for their flocks, similar to the federal crop insurance program. United Egg Producers Chairman Jim Dean told the Senate Agriculture Committee that a government program is critical due to the unlikelihood of private insurance.
“It’s going to be extremely difficult to try to get private insurance companies to want to insure those type of products since we’re in the middle of a disaster and the worst animal health issue that we’ve ever experienced in this country,” Dean said.
Also testifying at the Senate Ag hearing was Rob Knecht, president of the Michigan Allied Poultry Industries. He said USDA Risk Management Agency officials confirmed they were beginning studies on such an insurance program, but “it sounded like it was a long ways off in terms of actually having a product.”
The virus was spread by wild birds migrating north for the summer, leading many experts to believe those same wild birds will again spread the disease when flying south later this year. If those migrating birds have intermixed, the disease could appear in all four flyways. It had previously avoided the Atlantic flyway, which consists of East Coast states where most of the U.S. broiler production is located.
USDA’s Livestock Indemnity Program is authorized by the 2014 farm bill and is administered by the Farm Service Agency. Payments are equal to 75 percent of the market value of the lost animal. Producers can recover $2.57 for each broiler chicken and $19.61 per laying hen. The payout for turkeys is $14.58 per bird.
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