The Journal Gazette
Wednesday, December 02, 2015 6:49 pm

Federal law pays farmers to cover loss from bird flu

Sherry Slater and Brian Francisco The Journal Gazette

Northeast Indiana poultry producers should not worry too much about potential losses from bird flu.

As it turns out, there’s an act for that.

It’s called the Animal Health Protection Act of 2002, and it directs federal officials to pay farmers fair market value for animals that have to be destroyed after testing positive for certain diseases. The program also pays for disposing of infected livestock and for disinfecting herds’ and flocks’ habitats.

Consumers don’t enjoy the same protections, however.

Egg prices are already climbing after more than 33 million chickens and turkeys have been put to death in the Midwest this year after testing positive for avian influenza. Food producers are poised to increase prices for products that include liquid eggs, such as cake mix, ice cream and imitation crab meat.

The first known case of bird flu in Indiana was reported near Columbia City two weeks ago. The U.S. Department of Agriculture confirmed last week that poultry in a backyard operation tested positive for the deadly strain called H5N8.

The hobby farm had been home to 77 chickens, turkeys, ducks and geese. The birds were euthanized and sent to laboratories for additional testing.

As of Friday afternoon, no additional infected birds had been found in Whitley County, said Denise Derrer, spokeswoman for the Indiana State Board of Animal Health. Outbreaks have been the worst in Minnesota and Iowa.

"Our veterinarians have been going door-to-door to homes in a (6.2 mile-) circle to identify any poultry and test them," she wrote in an email.

The state commission’s goal was to finish the canvass last week. Derrer was unsure how many homes remained as of 3 p.m. Friday.

The state’s Board of Animal Health works to protect the food supply and lessen losses related to livestock. But the bulk of financial support comes from federal officials.

Joelle Hayden, a spokeswoman for the USDA’s Animal and Plant Health Inspection Service, said animal health officials take an inventory of infected flocks or herds.

Each animal’s age and intended use – such as meat, eggs, milk, breeding – is noted, she wrote in an email.

Economists calculate payments based on the type of animal, the costs of raising it and planned use. They factor in feed costs and market prices, which are updated monthly.

In most cases, the USDA pays the full amount, Hayden said. But, in some cases, it might pay a percentage of the loss. An example, she said, is when a large-scale producer doesn’t participate in the National Poultry Improvement Program.

Costs that are eligible for reimbursement include infected or exposed livestock, euthanasia, disposal of bodies, destruction of eggs, cleaning, disinfection and testing of neighboring flocks.

The program will also pay for materials that have to be destroyed because they can’t be sanitized. That includes tools or pallets.

Dan Bernaciak, assistant agriculture commissioner of Stanislaus County, and Tim Niswander, agriculture commissioner of Kings County, confirmed that USDA officials worked with livestock owners in their California counties to cover expenses after bird flu was discovered there earlier this year.

"We only had the one flock with the disease," Bernaciak said, referring to more than 100,000 birds. "I don’t think there’s really much of an economic impact at all."

Five of 12 Kings County operations were hit, affecting more than 130,000 market-ready chickens and about 40,000 ducks, Niswander said.

Despite all that it pays for, the program "does not cover all production losses for the time a farm will be out of commission after a disease detection," Hayden said. Limits on what the program can cover are outlined by the Animal Health Protection Act, she added.

The Whitley County hobby farm was to be disinfected and placed under quarantine for 21 days after the birds there were killed, Indiana officials said.

The virus carrier could have been domestic poultry or migratory wild birds, including waterfowl, that might have visited the hobby farm.

Indiana is the nation’s leading commercial producer of ducks and among the top producers of chicken eggs.

But that doesn’t buy Hoosiers a discount.

Prices for wholesale eggs reached $1.23 a dozen last week, the highest ever, according to commodity researcher Urner Barry.

A third of all eggs in the U.S. are broken for liquid egg products, and almost 25 percent of that supply has been destroyed by bird flu, according to Urner Barry, which has been tracking the industry since 1858.

The Associated Press and Bloomberg News contributed to this story.

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