[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]


                   EXAMINATION OF FEDERAL AND STATE 
                     RESPONSE TO AVIAN INFLUENZA

=======================================================================

                                HEARING

                               BEFORE THE

           SUBCOMMITTEE ON LIVESTOCK AND FOREIGN AGRICULTURE

                                 OF THE

                        COMMITTEE ON AGRICULTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 30, 2015

                               __________

                           Serial No. 114-25
                           
                           
                           
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                        COMMITTEE ON AGRICULTURE

                  K. MICHAEL CONAWAY, Texas, Chairman

RANDY NEUGEBAUER, Texas,             COLLIN C. PETERSON, Minnesota, 
    Vice Chairman                    Ranking Minority Member
BOB GOODLATTE, Virginia              DAVID SCOTT, Georgia
FRANK D. LUCAS, Oklahoma             JIM COSTA, California
STEVE KING, Iowa                     TIMOTHY J. WALZ, Minnesota
MIKE ROGERS, Alabama                 MARCIA L. FUDGE, Ohio
GLENN THOMPSON, Pennsylvania         JAMES P. McGOVERN, Massachusetts
BOB GIBBS, Ohio                      SUZAN K. DelBENE, Washington
AUSTIN SCOTT, Georgia                FILEMON VELA, Texas
ERIC A. ``RICK'' CRAWFORD, Arkansas  MICHELLE LUJAN GRISHAM, New Mexico
SCOTT DesJARLAIS, Tennessee          ANN M. KUSTER, New Hampshire
CHRISTOPHER P. GIBSON, New York      RICHARD M. NOLAN, Minnesota
VICKY HARTZLER, Missouri             CHERI BUSTOS, Illinois
DAN BENISHEK, Michigan               SEAN PATRICK MALONEY, New York
JEFF DENHAM, California              ANN KIRKPATRICK, Arizona
DOUG LaMALFA, California             PETE AGUILAR, California
RODNEY DAVIS, Illinois               STACEY E. PLASKETT, Virgin Islands
TED S. YOHO, Florida                 ALMA S. ADAMS, North Carolina
JACKIE WALORSKI, Indiana             GWEN GRAHAM, Florida
RICK W. ALLEN, Georgia               BRAD ASHFORD, Nebraska
MIKE BOST, Illinois
DAVID ROUZER, North Carolina
RALPH LEE ABRAHAM, Louisiana
JOHN R. MOOLENAAR, Michigan
DAN NEWHOUSE, Washington
TRENT KELLY, Mississippi

                                 ______

                    Scott C. Graves, Staff Director

                Robert L. Larew, Minority Staff Director

                                 ______

           Subcommittee on Livestock and Foreign Agriculture

                 DAVID ROUZER, North Carolina, Chairman

BOB GOODLATTE, Virginia              JIM COSTA, California, Ranking 
STEVE KING, Iowa                     Minority Member
SCOTT DesJARLAIS, Tennessee          STACEY E. PLASKETT, Virgin Islands
VICKY HARTZLER, Missouri             FILEMON VELA, Texas
TED S. YOHO, Florida                 RICHARD M. NOLAN, Minnesota
DAN NEWHOUSE, Washington             CHERI BUSTOS, Illinois
TRENT KELLY, Mississippi

                                  (ii)
                             C O N T E N T S

                              ----------                              
                                                                   Page
Conaway, Hon. K. Michael, a Representative in Congress from 
  Texas, opening statement.......................................     3
Costa, Hon. Jim, a Representative in Congress from California, 
  opening statement..............................................     4
Peterson, Hon. Collin C., a Representative in Congress from 
  Minnesota, opening statement...................................     3
    Submitted reports............................................    45
Rouzer, Hon. David, a Representative in Congress from North 
  Carolina, opening statement....................................     1
    Prepared statement...........................................     2
Walz, Hon. Timothy J., a Representative in Congress from 
  Minnesota, prepared statement..................................     6

                               Witnesses

Swayne, D.V.M., Ph.D., David E., Director and Supervisory 
  Veterinary Medical Officer, Southeast Poultry Research 
  Laboratory, Agricultural Research Service, U.S. Department of 
  Agriculture, Athens, GA........................................     6
    Prepared statement...........................................     8
Clifford, D.V.M., John R., Deputy Administrator, Veterinary 
  Services, Animal and Plant Health Inspection Service, U.S. 
  Department of Agriculture, Washington, D.C.....................    10
    Prepared statement...........................................    12
    Submitted questions..........................................    55
Meckes, D.V.M., R. Douglas, State Veterinarian, North Carolina 
  Department of Agriculture and Consumer Services, Raleigh, NC...    16
    Prepared statement...........................................    18
Hartmann, D.V.M., William L., Executive Director and State 
  Veterinarian, Minnesota Board of Animal Health, St. Paul, MN...    20
    Prepared statement...........................................    22

 
      EXAMINATION OF FEDERAL AND STATE RESPONSE TO AVIAN INFLUENZA

                              ----------                              


                        THURSDAY, JULY 30, 2015

                  House of Representatives,
         Subcommittee on Livestock and Foreign Agriculture,
                                  Committee on Agriculture,
                                                   Washington, D.C.
    The Subcommittee met, pursuant to call, at 8:31 a.m., in 
Room 1300, Longworth House Office Building, Hon. David Rouzer 
[Chairman of the Subcommittee] presiding.
    Members present: Representatives Rouzer, Newhouse, Kelly, 
Conaway (ex officio), Costa, Nolan, Bustos, and Peterson (ex 
officio).
    Staff present: Caleb Crosswhite, Carly Reedholm, Haley 
Graves, Jessica Carter, John Goldberg, Matt Schertz, Mollie 
Wilken, Mary Knigge, Matthew MacKenzie, and Nicole Scott.

  OPENING STATEMENT OF HON. DAVID ROUZER, A REPRESENTATIVE IN 
                  CONGRESS FROM NORTH CAROLINA

    The Chairman. This hearing of the Subcommittee on Livestock 
and Foreign Agriculture on the examination of Federal and state 
response to avian influenza, will come to order.
    I would like to thank our witnesses for appearing before 
the Subcommittee this morning, and I appreciate the attendance 
of our colleagues here on the dias as we begin our formal 
review of the recent outbreak of highly-pathogenic avian 
influenza, or the bird flu, for short.
    As we will hear from our witnesses, this was, without a 
doubt, one of the worst, if not the worst, animal disease 
outbreaks our country has ever faced. More than 220 farms were 
infected in 21 states, nearly 48 million chickens and turkeys 
were depopulated, and hundreds and millions of dollars have 
been spent.
    The Subcommittee has been following these events for some 
months, but specifically chose to delay any formal oversight 
until the disease was under control to prevent diversion of the 
agency's attention in the middle of a crisis. As we begin this 
review, let me state that it is not, again, it is not, our 
intent to be a Monday-morning quarterback in any shape or form; 
rather, we want to learn from experience.
    We want to highlight what was done right by identifying 
areas where improvement was made, where opportunities for 
further improvement exist, and most importantly, figure out 
where we need to focus as we prepare for another possible 
outbreak this fall.
    As most observers know, the heat of the summer is primarily 
responsible for the interruption in disease transmission, but 
as fall approaches and temperatures begin to drop, we need to 
be prepared for more cases, possibly covering a larger 
geographical area.
    A number of issues have arisen that need further 
discussion. For instance, the approval of an effective vaccine 
is on the horizon. But if we utilize this tool, we will need to 
ensure that trade is not disrupted. Questions persist regarding 
the efficacy of the industry's biosecurity plans, while many 
farms have exceptional biosecurity procedures and mechanisms in 
place.
    Some observers have raised questions regarding the degree 
to which biosecurity protocols are being followed. We are 
certainly aware of some of the resource limitations that 
delayed depopulation, disposal, and disinfection early in the 
outbreak. And as repopulation commences, several Members have 
heard from constituents raising questions related to some of 
the challenges that lie ahead.
    We recognize that preventing further outbreaks is a 
critical priority. That said, we are mindful of the financial 
burdens producers are facing, particularly if they are unable 
to get back up and running in a timely fashion. After all, as 
my grandfather used to always tell me, time is money.
    We will likely also hear about concerns related to 
indemnification. The law is fairly clear regarding the payment 
of fair-market value for animals that are destroyed. But how 
fair-market value is defined and determined, obviously, is 
subject to some discretion. We are faced with a set of issues 
here that are complex, and we will welcome any and all 
suggestions on how this Subcommittee might be helpful as we 
move forward.
    In particular, I am aware of the program created in the 
Plant Protection Act for disease management and prevention, and 
wonder if it might not be time to examine whether a similar 
mechanism in the Animal Health Protection Act might yield a 
more responsive funding mechanism to facilitate a quicker and 
perhaps a cheaper and more effective response.
    [The prepared statement of Mr. Rouzer follows:]

 Prepared Statement of Hon. David Rouzer, a Representative in Congress 
                          from North Carolina
    Good morning. I appreciate the attendance of our colleagues and 
witnesses as the Subcommittee begins its formal review of the recent 
outbreak of highly-pathogenic avian influenza.
    As we will hear from our witnesses, this was without a doubt one of 
the worst, if not the worst animal disease outbreaks our country has 
ever faced. More than 220 farms were infected in 21 states, nearly 48 
million chickens and turkeys were depopulated, and hundreds of millions 
of dollars have been spent.
    The Subcommittee has been following these events for some months 
but specifically chose to delay any formal oversight until the disease 
was under control to prevent diversion of the agency's attention in the 
middle of a crisis.
    As we begin this review, let me state that it is not our intent to 
be a Monday morning quarterback. Rather, we want to learn from 
experience. We want to highlight what was done right by identifying 
areas where improvement was made; where opportunities for further 
improvement exist; and most importantly, figure out where we need to 
focus as we prepare for another possible outbreak this fall.
    As most observers know, the heat of the summer is primarily 
responsible for the interruption in disease transmission, but as fall 
approaches and temperatures begin to drop, we need to be prepared for 
more cases, possibly covering a larger geographical area.
    A number of issues have arisen that need further discussion. For 
instance, the approval of an effective vaccine is on the horizon, but 
if we utilize this tool, we will need to ensure trade is not disrupted.
    Questions persist regarding the efficacy of the industry's 
biosecurity plans. While many farms have exceptional biosecurity 
procedures and mechanisms in place, some observers have raised 
questions regarding the degree to which biosecurity protocols are being 
followed.
    We are certainly aware of some of the resource limitations that 
delayed depopulation, disposal and disinfection early in the outbreak.
    As repopulation commences, several Members have heard from 
constituents raising questions related to some of the challenges that 
lie ahead.
    We recognize that preventing further outbreaks is a critical 
priority. That said, we are mindful of the financial burdens producers 
are facing, particularly if they are unable to get back up and running 
in a timely fashion. After all, time is money.
    We will likely also hear about concerns related to indemnification. 
The law is fairly clear regarding the payment of fair market value for 
animals that are destroyed, but how fair market value is defined and 
determined appears to be subject to some discretion.
    We are faced with a set of issues here that are complex, and we 
would welcome any and all suggestions on how this Subcommittee might be 
helpful as we move forward. In particular, I am aware of the program 
created in the Plant Protection Act for disease management and 
prevention, and wonder if it might not be time to examine whether a 
similar mechanism in the Animal Health Protection Act might yield a 
more responsive funding mechanism to facilitate a quicker, and perhaps 
a cheaper and more effective response.
    I now yield to the Ranking Member, Mr. Costa for his opening 
statement.

    The Chairman. I will now yield to the Chairman of the full 
Committee, if he has any comments that he would like to make.

OPENING STATEMENT OF HON. K. MICHAEL CONAWAY, A REPRESENTATIVE 
                     IN CONGRESS FROM TEXAS

    Mr. Conaway. No. Just anxious to hear from our witnesses. 
Thank you.
    The Chairman. Thank you, Mr. Chairman.
    I also see that we have the Ranking Member, Collin 
Peterson. Mr. Peterson, if you have any comments you would like 
to make.

OPENING STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE 
                   IN CONGRESS FROM MINNESOTA

    Mr. Peterson. Thank you, Chairman Rouzer, and Chairman 
Conaway. Thank you for holding this hearing today.
    My district is probably ground zero of the outbreak that 
has happened. And as everybody knows, avian influenza has 
impacted the poultry growers not only in my district but in 
other places of the country. I think USDA and my State of 
Minnesota have done good work, and I want to especially single 
out Dr. Clifford and Dr. Hartmann for the work that they have 
done, and welcome Dr. Hartmann from our State of Minnesota here 
today, and to the Secretary.
    As I have gone through this, I have been on the phone I 
don't know how many times talking about problems that have 
arisen, and they really responded, I don't think you could have 
done a better job in responding to the things that developed.
    The situation, it hasn't been perfect, but perfection is 
hard to come by when you are in the middle of a crisis. So as 
the Chairman said, now is the time to go over the lessons that 
we have learned and figure out how this will help us develop a 
better plan if we have this kind of an outbreak in the future.
    There are three areas that I would like to address today 
that have been brought forward by my growers. One of them is 
simplifying the indemnification process. I keep hearing that 
people are concerned about the amount of paperwork that they 
have to fill out. One grower had 77 pages of paperwork, so we 
have to do a better job of figuring out how to deal with that.
    The other thing that comes up is this case manager issue, 
where, I, in fact, just last week, I had a grower I met with 
was on his seventh case manager. And so in that particular 
situation, they are still rolling them over. So somehow or 
another we have to figure out a way to address that.
    And, Dr. Hartmann, I don't know if Minnesota has resources 
to help with that, but I may ask you about that later.
    I also look forward to a status update on the workable 
vaccine. Dr. Swayne, we appreciate the work that you do and 
have done. Having an available vaccine is something that is 
very much high on the agenda of my growers as they repopulate. 
If we have a recurrence this fall, that is something that they 
want to have in their toolbox. And, I want to discuss that with 
you, how that all is going to come forward, when we get into 
questions.
    And I also want to look at ways to speed up the 
depopulation effort. That is an area that I think we have 
learned a great deal about. It is especially in the layer 
operation it has been a real problem and this is one area that 
we need to focus more on.
    So, again, I thank the Chairman and the Ranking Member for 
holding today's hearing, and look forward to the witness' 
testimony and the question-and-answer period. I yield back.
    The Chairman. Thank you, Mr. Peterson.
    As always, our Ranking Member has impeccable timing. Mr. 
Costa.

   OPENING STATEMENT OF HON. JIM COSTA, A REPRESENTATIVE IN 
                    CONGRESS FROM CALIFORNIA

    Mr. Costa. Thank you very much, Mr. Chairman.
    Timing is all about what we do. And the time for this 
hearing is today because the avian flu that has taken various 
regions of this country is serious, and it is dramatic. And it 
has been devastating when we look at the amount of flocks of 
poultry that has been impacted, not only as my colleague, the 
Ranking Member of the full Committee, stated, but also in 
California.
    We have had a number of poultry farmers and processors that 
have been impacted, some in my home district, where the first 
reported cases of avian influenza took place. But unlike the 
Midwest, we have been able to contain it, and we have been able 
to control it. So my heart goes out to those in other parts of 
the country where it has continued to progress.
    Two key producers in my state have reported the cases 
relayed to me and actions that were taken by the United States 
Department of Agriculture as well as California Department of 
Food and Agriculture, and they were very positive in their 
response. We were lucky, bottom line, in the outbreak, and it 
was contained and it didn't spread, due to a combination of 
factors. And I am looking forward to hearing the testimony 
today by our witnesses as to how we can take those examples but 
also others that are being implemented around the country.
    Our program, we think, is sophisticated. We think it is 
strong as it relates to biosecurity and one of the reasons our 
producers were able to, we think, control the spread in 
California. But there are other examples and methods that other 
states are employing that I hope we will hear about here this 
morning within the Eastern Flyway to prevent the spread of the 
disease.
    As we know, it has been a part of the various flyways of 
the transmigration of this avian influenza that has caused the 
impacts. And while state regulations and biosecurity measures 
can only do so much, we need to do more to provide a vaccine 
for high-path avian influenza, and there needs to be more 
research and funds dedicated to that.
    One thing we have heard industry representatives say is the 
need for more investment in the Southeast Poultry Research 
Laboratory, and I am pleased that Dr. Swayne is here to testify 
on that part. And while the Southwest Poultry Research Lab 
plays a critical role, especially when it comes to the 
development of possible vaccination, we also have research done 
in institutions in California, like at Fresno State, my alma 
mater, as well as Davis, where we have had a lot of efforts to 
provide support and assistance in discovering more information 
about the high-path avian influenza.
    The new national poultry improvement plan, which we will 
hear more about this morning, has allowed companies to 
participate in a surveillance program, coupled with 100 percent 
indemnity. And of course, that has been a part of the 
discussion in terms of how we deal with this. I can't say that 
our response in California was perfect, but we certainly didn't 
face the same scale of outbreak that has been faced in the 
Midwest.
    And I hope through this hearing, Mr. Chairman, we can 
better understand what practices work best and learn from the 
successes of each state to minimize the negative impact that 
the high-path avian influenza has had during the spring fly 
season. And we know that there is going to be on upcoming fall 
fly season. Certainly, Congressman Peterson can testify to 
that; as an avid hunter, he is very familiar with the various 
seasons.
    So I very much look forward to the testimony of those from 
the United States Department of Agriculture, the state 
representatives, and I hope this morning we can learn from each 
other. Thank you.
    The Chairman. Thank you, Mr. Costa.
    Mr. Peterson. Mr. Chairman, I forgot, I would like to enter 
these economic impact analyses that were done by the University 
of Minnesota extension into the record. I was going to do that 
earlier.
    The Chairman. Without objection, so ordered.
    [The information referred to is located on p. 45.]
    The Chairman. The chair would request that other Members 
submit their opening statements for the record so the witnesses 
may begin their testimony and to ensure that there is ample 
time for questions.
    [The prepared statement of Mr. Walz follows:]

    Prepared Statement of Hon. Timothy J. Walz, a Representative in 
                        Congress from Minnesota
    Farmers have long known that the financial health of our 
agricultural sector is beholden to certain external factors. Droughts, 
floods, disasters and disease can all have an impact on the farm which 
ripples outward and impacts the entire rural community. This dynamic 
necessitates effective government programs which can provide the tools 
for farmers to get back on their feet when calamity occurs and maintain 
farm country as the bedrock of our national economy.
    In MN and the Midwest, we are facing such a calamity now with the 
onset of avian flu. This outbreak places both a financial and emotional 
strain on the producers in harm's way. You don't have to have a flock 
test positive to be impacted. The stress created just knowing the 
possibility of loss is out there is enough of a burden. I heard one 
producer describe it as living in a ``constant tornado warning.''
    USDA has done an admirable job thus far in their response. The 
challenge is staggering, and the numbers bear this out, with reports of 
48 million birds from 211 commercial barns in 21 states.
    USDA cannot, and should not have to, address this situation alone. 
Congress should continue to provide the necessary resources which 
support efforts to enhance biosecurity research and deployment. Boots 
on the ground, visiting farms and sharing information on best practices 
will be invaluable, going forward.
    Furthermore, we should continue to support development of a viable 
commercial vaccine while engaging in talks with our trading partners to 
make certain that vaccine use will not significantly impact export 
potential.
    While it may be true that external factors affect the financial 
health of farm country, it is the resilience of our farmers working in 
concert with experts from State Departments of Agriculture and USDA who 
can overcome disaster and continue to feed and fuel the world.

    The Chairman. The chair would like to remind Members that 
they will be recognized for questioning in order of seniority 
for Members who were present at the start of the hearing. After 
that, Members will be recognized in order of their arrival, and 
I certainly appreciate Members' understanding.
    Witnesses are asked to limit their oral presentations to 5 
minutes, if you can, please. All written statements will be 
included in the record.
    I would like to welcome our witnesses to the table, and 
please note that in the interest of time, we have combined the 
two panels. Dr. David Swayne, Laboratory Director, Southeast 
Poultry Research Laboratory, USDA Agricultural Research Service 
in Athens, Georgia. Thank you for being here.
    Dr. John Clifford, Deputy Administrator, Veterinary 
Services, USDA Animal Health and Inspection Service, 
Washington, D.C.
    We also have Dr. Douglas Meckes, State Veterinarian North 
Carolina Department of Agriculture and Consumer Services in 
Raleigh, North Carolina.
    And Dr. Bill Hartmann, Executive Director, Administrative 
Board of Animal Health, St. Paul, Minnesota.
    Dr. Swayne, begin when you are ready.

   STATEMENT OF DAVID E. SWAYNE, D.V.M., Ph.D., DIRECTOR AND 
   SUPERVISORY VETERINARY MEDICAL OFFICER, SOUTHEAST POULTRY 
                      RESEARCH LABORATORY,
AGRICULTURAL RESEARCH SERVICE, U.S. DEPARTMENT OF AGRICULTURE, 
                           ATHENS, GA

    Dr. Swayne. Chairman Rouzer, Ranking Member Costa, Members 
of the Committee, I am Dr. David Swayne, as I have been 
introduced, the Laboratory Director at the Southeast Poultry 
Research Laboratory in Athens, Georgia. We are part of the 
newly-formed U.S. National Poultry Research Center.
    The Agricultural Research Service is committed to 
eradicating the high-path AI virus at the center of the current 
North American outbreak through providing cutting-edge research 
in diagnostics, molecular epidemiology, pathology, and 
vaccinology.
    In response to the first detections of HPAI in the U.S., 
ARS refocused its high-path research program to the most 
imminent research needs. Within weeks, a rapid molecular test 
was developed to detect this unique Asian H5 high-path AI 
virus, which allowed quick differentiation from our North 
American low-path AI viruses.
    This test was transferred to the National Veterinary 
Services Laboratories of APHIS, and is the core test used in 
diagnostic effort to rapidly identify infected flocks. We 
conducted studies to understand how the early high-path AI 
virus is infected and cause disease in birds. In chickens and 
turkeys, these initial viruses took high-exposure doses that 
were needed to produce those infections and bird-to-bird 
contact transmission was very inefficient. But all the infected 
chickens and turkeys became ill and died.
    By contrast, domestic ducks and also mallards, a wild-type 
duck, became infected with lower doses of the virus and had 
more efficient contact transmission, but they did not become 
ill, nor did they die. Subsequent experiments using the later 
viruses from the Midwest, from Minnesota and Iowa and the 
Dakotas, found these viruses required less actual virus to 
infect chickens and contact transmission occurred more easily, 
thus indicating the later viruses had changed or were more 
easily transmissible to and among chickens and turkeys.
    In extending laboratory data to the field, ARS researchers 
have teamed up with APHIS virologists and epidemiologists, as 
well as field and poultry veterinarians at universities by 
providing some genetic analysis of the high-path AI viruses in 
order to focus epidemiologic investigations. Genetic analysis 
support a point source introduction from infected waterfowl to 
poultry in the Pacific Flyway and in the early Midwestern 
cases.
    However, the later Midwest viruses showed evidence of 
common-source introductions from outbreaks supporting farm-to-
farm spread. In the United States, there is no vaccine approved 
or currently in use in commercial poultry for high-path AI. 
While some nations have attempted to utilize vaccine to protect 
poultry against the H5N1 high-path AI, their use of it as a 
primary focus through control has not always lead to immediate 
eradication.
    Ninety-nine percent of all high-path AI vaccine has been 
used in only four countries, China, Egypt, Vietnam, and 
Indonesia, where the H5N1 virus is endemic. In these countries, 
their prolonged use of vaccine has been associated with vaccine 
failure and emergence of vaccine resistance, and this has 
necessitated continued surveillance for vaccine-resistant 
strains and periodic change of vaccine seed strains to more 
closely match those circulating field viruses for more 
effective control.
    In support of APHIS, ARS conducts high-path AI vaccine seed 
development, and testing is one of our routine research 
activities. But we do not manufacture vaccines nor decide when 
or if vaccines should be used in the field. The licensing and 
the use of vaccine is determined by APHIS. Currently, ARS has 
developed a new vaccine seed strain for use in an inactivated 
vaccine and is conducting the final protection studies in both 
chickens and turkeys.
    If viable, this vaccine strain will be transferred to a 
commercial vaccine manufacturer or manufacturers. In addition, 
ARS is evaluating some registered AI vaccines for protections 
in chickens and turkeys against the current outbreak viruses.
    Vaccination can play a helpful role in disease eradication 
if it is properly implemented. But globally, vaccination has a 
negative impact on poultry exports, which is a crucial part of 
the U.S. poultry industry. Efforts to mitigate the effect of 
vaccination on exports include identifying infected poultry 
within vaccinated populations through reliable and cost-
effective serological and virological testing. Such a strategy 
is often called DIVA testing. So development and validation of 
DIVA-testing strategies for our potential vaccine programs is a 
high-research priority for Southeast Poultry, and we have those 
studies underway.
    In conclusion, the current HPAI outbreak represents unique 
and unprecedented challenges to the U.S. poultry industry with 
ARS and collaborators: first, immediately shifting their 
research programs to high-priority areas, infectivity and 
transmission studies in poultry and wild birds; second, rapid 
diagnostic test development for detecting Asian H5 high-path AI 
virus; third, molecular epidemiologic studies on virus spread; 
and fourth, development of efficacious vaccines and an 
effective vaccination strategy.
    Thank you, again, for this opportunity to testify and for 
Congressional support as we continue to fight this virus.
    [The prepared statement of Dr. Swayne follows:]

   Prepared Statement of David E. Swayne, D.V.M., Ph.D., Director and
  Supervisory Veterinary Medical Officer, Southeast Poultry Research 
     Laboratory, Agricultural Research Service, U.S. Department of
                        Agriculture, Athens, GA
    Chairman Rouzer, Ranking Member Costa, and Members of the 
Subcommittee, I am Dr. David Swayne, Laboratory Director and 
Supervisory Veterinary Medical Officer, at the Southeast Poultry 
Research Laboratory (SEPRL) which is part of the Agricultural Research 
Service's (ARS) U.S. National Poultry Research Center in Athens, 
Georgia.
    I am sure you are aware of the great hardships that the U.S. 
poultry industry and producers have suffered because of Highly-
Pathogenic Avian Influenza (HPAI). It goes without saying that ARS, and 
particularly the research staff at SEPRL, are committed to eradicating 
the H5N8 or H5N2 viruses at the center of the current North American 
outbreak through cutting edge research in diagnostics, epidemiology, 
pathology, molecular biology, and vaccinology. ARS is determined to aid 
our sister agency, the Animal and Plant Health Inspection Service 
(APHIS), and the poultry industry to ensure that this strain of avian 
influenza is understood and can be scientifically managed to protect 
animal agriculture and the food supply.
Background
    ARS's Exotic and Emerging Avian Viral Diseases Research Unit at 
SEPRL has been conducting research on avian influenza since the mid-
1970s. Our research has helped U.S. poultry farmers increase exports, 
led to the eradication of low-pathogenic avian influenza (LPAI) in U.S. 
poultry, and contributed to the overall global efforts to combat LPAI 
and HPAI. Today, SEPRL is USDA's national research laboratory for avian 
influenza and an international reference laboratory recognized by both 
the World Organization for Animal Health (OIE) and the Food and 
Agriculture Organization (FAO) of the United Nations. We also work 
within the OIE/FAO Animal Influenza Expert Laboratory Network (OFFLU) 
that cooperatively works internationally to control influenza in all 
agricultural species.
Initial Research Response
    In response to the first detections of H5N8 and H5N2 in wild 
waterfowl and captive raptors in the United States in December of 2014, 
ARS refocused its HPAI research direction to the most imminent research 
needs to address the U.S. outbreak. Within weeks, scientists at SEPRL 
developed a rapid molecular test to detect the Asian H5 HPAI, which 
would quickly differentiate it from the North American LPAI viruses. 
The test was quickly validated by researcher at SEPRL for sensitivity 
and specificity, and transferred to the National Veterinary Services 
Laboratory (NVSL) of APHIS. In addition, SEPRL developed a rapid test 
for the identification of the N8 gene of the Asian HPAI viruses and 
helped NVSL optimize its neuraminidase sequence test.
Infectivity and Transmission
    Representative H5N8 and H5N2 HPAI virus strains from the United 
States were tested in terrestrial poultry, domestic ducks, and captive 
mallards to determine how easy it was to infect birds and produce 
disease. The initial HPAI viruses required high intranasal doses of 
virus to infect chickens and turkeys, and contact transmission to birds 
was inefficient. However, all infected chickens and turkeys became ill 
and died. By contrast, the domestic ducks and mallards became infected 
with lower doses of virus and had more efficient contact transmission. 
They did not become ill or die, but shed virus into the environment 
through the feces and oral secretions for up to 14 days.
    These studies suggest the early H5 HPAI viruses were best adapted 
to waterfowl and difficult to transmit from wild waterfowl to poultry. 
The HPAI virus detections in wild birds from the Pacific Flyway 
corroborate this observation as detections were observed at an 
unexpectedly high rate in several duck species, with more limited 
detection in backyard flocks and only two commercial poultry flocks.
    However, the later outbreak of the H5N2 virus in the Midwest 
required less virus to infect chickens, and contact transmission 
occurred more easily than with the initial HPAI viruses. This 
demonstrated that the wild bird viruses had changed and were more 
easily transmitted to and among chickens and turkeys, potentially 
allowing for farm-to-farm spread of the virus.
Molecular Analysis of Virus Spread
    It is critical in developing control and eradication strategies to 
understand how the viruses are introduced onto farms and how they 
spread. SEPRL researchers have been working with APHIS virologists and 
epidemiologists as well as field and university poultry veterinarians 
to provide molecular network analysis of the HPAI viruses. The data 
produced by this analysis supports the idea that the early outbreak 
viruses were likely introduced by wild birds. However, the analysis of 
later viruses showed molecular sequence evidence of clustering, which 
is a sign of farm-to-farm spread.
Vaccine Issues
    In the United States, there is no vaccine approved or currently in 
use in commercial poultry for H5N8 or H5N2 HPAI. While some nations 
have attempted to utilize vaccine to protect poultry against the H5N1 
HPAI virus, a primary focus on vaccines has not led to immediate 
eradicate of HPAI. Ninety-nine percent of the vaccine use to this point 
has been in China, Egypt, Vietnam and Indonesia were H5N1 HPAI is 
endemic.
    Issues associated with vaccine use, including vaccine failure and 
vaccine resistance, have been identified in countries using the vaccine 
long-term. In addition, vaccine efficacy is limited over time. Similar 
to human influenza, avian influenza viruses change over time, and 
vaccine efficacy decreases as the outbreak viruses change. This has 
necessitated continued surveillance for vaccine-resistant field strains 
within vaccinated poultry populations of these countries, and periodic 
change of the vaccine seed strain to more closely match the circulating 
field HPAI virus for optimal protection. In countries vaccinating 
against HPAI, virological surveillance in vaccinated flocks is crucial 
to collect viruses for genetic and antigenic analysis to assess field 
protection between vaccine seed strains and current circulating field 
viruses.
    ARS plays a critical role with APHIS and other public health 
authorities in providing scientific information and countermeasures to 
significantly and measurably mitigate the impact of HPAI disease 
outbreaks. When addressing the need for vaccination, SEPRL first 
evaluates new avian influenza outbreak viruses by sequence analysis and 
serologic characteristics, which provides a good estimation of how 
close the new viruses are to other influenza viruses and existing 
vaccines. Then we select the most representative challenge viruses to 
use in vaccine efficacy and challenge studies. Because these are HPAI 
viruses, the studies must be conducted in high biocontainment 
facilities.
Vaccine and Testing
    SEPRL conducts vaccine seed strain development and testing as well 
as routine research activity, but it does not manufacture vaccines nor 
decide when or if vaccines should be used in the field. The licensing 
and use of a vaccine is determined by APHIS. Currently, SEPRL is 
evaluating registered HPAI vaccines and has developed a H5 vaccine seed 
strain for protection in chickens and turkeys against the current H5 
HPAI outbreak viruses. If viable, the appropriate vaccine seed strain 
will be transferred to a commercial vaccine manufacturer.
Measuring Efficacy
    Vaccine protection or efficacy is measured primarily by two means 
in vaccinated poultry: (1) prevention of clinical disease and death; 
and (2) a reduction in virus shedding, which reflects the growth of the 
challenge virus and release of the virus in body secretions (oral 
secretions and feces). Decreased virus shedding is important in 
reducing environmental contamination, and thus reducing virus 
transmission and infection. Low quality vaccines or vaccines with 
antigenic mismatches do not prevent infection. Thus birds challenged 
with a high dose of HPAI virus will become infected and excrete a great 
deal of virus into the environment.
    Vaccination can play a helpful role in disease eradication if 
properly implemented, but historically vaccination negatively affects 
poultry exports, which is a crucial part of the U.S. poultry industry. 
Efforts to mitigate the effect of vaccination on exports include the 
use of testing that can identify infected birds within a vaccinated 
poultry population using reliable and cost effective serological and 
virological testing; i.e., so termed DIVA strategy. This 
differentiation approach has been shown to work experimentally, but 
with only limited field experience for HPAI vaccine. SEPRL is 
evaluating all the vaccines being tested for the ability to identify 
infected birds within vaccinated poultry. Because of the many types of 
vaccines proposed for use, some strategies need more research work for 
development and validation. The validation of this approach is a 
priority for SEPRL and its collaborators.
Conclusion
    The current HPAI outbreak presents unique and unprecedented 
challenges to the U.S. poultry industry. The widespread presence of 
HPAI in wild birds provides an ongoing threat to the U.S. poultry 
industry. That is why SEPRL immediately began to work to identify 
specific strains of the virus, and develop a test to detect the HPAI 
virus in affected poultry. In addition, SEPRL continues to work, 
develop and test an effective vaccine for the specific strains of the 
virus impacting the U.S. As mentioned before, we are in the initial 
testing phase for the H5 HPAI strain. While testing looks promising, 
much more work is needed before a registered vaccine is found to be a 
viable option.
    We will continue to develop new and improved tools for containment 
of the virus, and work to make these tools commercially available, 
where possible, as a means to prevent the widespread losses the poultry 
industry and producers have sustained during this outbreak. The 
Agricultural Research Service, along with Animal and Plant Health 
Inspection Service, will continue to work hard to address this complex 
problem. Thank you again for the opportunity to testify and for 
Congressional support as we continue to fight this virus.

    The Chairman. Dr. Clifford.

         STATEMENT OF JOHN R. CLIFFORD, D.V.M., DEPUTY
  ADMINISTRATOR, VETERINARY SERVICES, ANIMAL AND PLANT HEALTH 
INSPECTION SERVICE, U.S. DEPARTMENT OF AGRICULTURE, WASHINGTON, 
                              D.C.

    Dr. Clifford. Thank you, Mr. Chairman, and Members of the 
Committee. I would like to thank you again for the opportunity 
to testify on behalf of the United States Department of 
Agriculture.
    As I sit here today, it has been almost 2 full months since 
our last detection of high-path AI in Minnesota and about 7 
weeks since any detections in Iowa. Over 60 farms have started 
restocking with new, healthy poultry. Over 30 have finished the 
cleaning and disinfection process and are on their way to 
restocking.
    Those numbers will continue to climb in the coming weeks as 
a positive sign that we are recovering from this devastating 
outbreak, the largest animal health emergency in our country's 
history. USDA will continue to stand with those producers 
helping them to get back into production as quickly as they 
can.
    Much of our effort in recent weeks has been with an eye 
toward the future. We have been meeting with our state and 
industry partners to plan for any potential fall outbreaks. We 
learned a lot from what happened in the spring, and we are 
taking those lessons, identifying gaps and needs, and revising 
our plans. I can assure you that we will be ready to face any 
outbreaks in the fall.
    I just came from a conference in Des Moines where we, along 
with our state and industry partners, discussed the outbreak 
and steps for the fall. Our conversations there and in previous 
meetings have identified several key things: First, we all need 
to improve our biosecurity. It is truly a shared 
responsibility. We need to wash equipment, limit the number of 
people on farms, and we need to take steps to limit contact 
with wild birds. As part of this effort, we need to improve 
outreach to producers. We have been working with the industry 
in states to share information and materials so we can be ready 
to stop disease spread.
    Second, we recognize the importance for rapid depopulation 
of birds. The longer we take to depopulate sick birds, the more 
virus they produce; and with more virus in the environment, the 
greater its chances to overwhelm our biosecurity efforts. We 
are working with our partners on all the logistical challenges, 
and we need to have the right equipment and materials in the 
right places and the right disposal options to eliminate any 
unnecessary delays.
    Third, we need to continue to have discussions about the 
vaccine policy. We have made the decision to stockpile vaccine 
but have not decided whether or not to use it to control 
disease spread. Our discussions with trading partners to date 
suggest that many of them would ban all poultry exports until 
they could complete a risk assessment.
    We will continue to actively engage these partners about 
how to minimize the effects on trade should we need to use 
vaccine in the future. But if we want the conversation and 
attitude of our trading partners to change, it is likely that 
all of us will have to change some of our policies and concerns 
about the use of vaccines for high-path AI and other foreign 
animal diseases.
    We are planning for a worst-case scenario, and we will be 
ready for it. While I don't think it will come to that, this 
planning is important to ensure that we can handle any 
potential outbreaks in the fall no matter the size. To that 
end, we are adding additional staff, over 450 term positions, 
including 210 animal health technicians, and 90 veterinary 
medical officers. We are working with our Federal and state 
partners to increase surveillance of wild birds which brought 
the disease here initially.
    Close monitoring of wild birds let us identify and respond 
to this disease as a rapidly as possible. Our hearts go out to 
everyone affected so far, producers, their employees, and the 
communities they live in and support. And we are making sure we 
are doing everything we can to help those who may be possibly 
affected in the months ahead.
    Mr. Chairman, this concludes my testimony, and I would be 
happy to answer any questions you or the Members of the 
Subcommittee may have. Thank you.
    [The prepared statement of Dr. Clifford follows:]

 Prepared Statement of John R. Clifford, D.V.M., Deputy Administrator,
 Veterinary Services, Animal and Plant Health Inspection Service, U.S. 
              Department of Agriculture, Washington, D.C.
    Chairman Rouzer, Ranking Member Costa, and Members of the 
Subcommittee, thank you for the opportunity to testify today on behalf 
of the U.S. Department of Agriculture (USDA). I serve as the Deputy 
Administrator for USDA's Animal and Plant Health Inspection Service 
(APHIS). In this capacity, I am the Chief Veterinary Officer of the 
United States.
    Today, we are facing the largest animal health emergency in this 
country's history. We are dealing with an unprecedented outbreak of 
highly-pathogenic avian influenza (HPAI) that is taking a heavy toll on 
the poultry industry. People have lost their jobs and have seen their 
livelihoods put in grave danger by this outbreak, and our hearts go out 
to them. I can assure you, however, that this disease has USDA's 
fullest attention, and we are committed to standing with our producers 
and industry to get them--and the communities they live in and 
support--back on their feet.
    USDA has been and will be there every step of the way with 
producers, industry, and our state partners. We've worked closely with 
them to respond quickly and decisively to this outbreak. More than 400 
USDA staff and nearly 3,000 USDA-contracted personnel have been working 
around the clock in every affected state on the response. We've 
delivered over $190 million in indemnification payments to producers to 
control the spread of disease, and to help them recover from it. Should 
the need arise, we have the authority to request even further funding. 
All told, USDA has committed over $700 million--an amount more than \1/
2\ of APHIS' yearly discretionary budget--in addressing this outbreak. 
We've seen trade cut off by trading partners concerned about the 
devastating effects of this disease, causing over $1 billion in poultry 
products to be directed to other markets at a cost to producers. We 
understand the devastating impact this outbreak has had upon all, and 
we are committed to helping those affected. And we will help protect 
those producers who have not yet been--and we certainly hope, will not 
be--impacted by this disease.
The Outbreak
    The outbreak started in December 2014. Western Hemisphere migratory 
birds commingled with Asian birds in the northwestern part of the 
continent. These birds acquired a variant of HPAI that is currently 
widespread in Asia. Wild ducks and geese (which have lower mortality 
for this variant) brought the disease first to the Pacific flyway, and 
later to the Central and Mississippi flyways. Initial detections in the 
United States were in wild birds and backyard flocks, and may have 
resulted from direct contact with sick migratory birds. As the virus 
spread through the Midwest, it came into contact with some of the 
largest segments of the poultry industry; it took an especially heavy 
toll on turkeys and egg-laying chickens, primarily in Minnesota and 
Iowa.
    APHIS scientists have been conducting an epidemiological 
investigation into the origins of the disease. Based upon the results 
of the preliminary investigation the agency released in June, we 
believe wild birds were responsible for introducing HPAI into the 
environment, and from there it was spread into commercial poultry 
houses. However, given the number and proximity of farms affected by 
HPAI, it appears the virus is spreading in other ways as well. For 
instance, one analysis provides evidence that a certain cluster of 
farms was affected by identical viruses, pointing to possible 
transmission among those farms. In addition, genetic analyses of the 
HPAI viruses suggest that independent introductions as well as 
transmission between farms are occurring in several states 
concurrently.
    Our investigation shows that the virus has been introduced into 
commercial poultry facilities from the environment (i.e., water, soil, 
animal feces, air) or from farm-to-farm transmission on human sources 
such as boots or equipment. After conducting an analysis of over 80 
commercial poultry farms, APHIS cannot associate transmission of the 
disease with any single one of those factors, but it seems clear that 
lateral spread occurred when biosecurity measures that are sufficient 
in ordinary times were not sufficient in the face of such a large 
amount of virus in the environment.
    USDA--through the APHIS National Veterinary Services Laboratories--
has confirmed HPAI in 21 states, which includes nine states where we 
identified it in commercial poultry. We have confirmed the disease in 
232 total poultry premises, with 211 of those being commercial 
facilities. As part of our disease control strategy, we've depopulated 
7.5 million turkeys and 42 million chickens and pullets. This is 
approximately 3% of the U.S. annual turkey production, and 
approximately 10% of the egg-laying chicken population.
USDA's Response to HPAI
    USDA has extensive experience in responding to animal disease 
outbreaks, especially in poultry. In 2003 and 2004, we successfully 
fought off an outbreak of Exotic Newcastle Disease in the southwestern 
United States and low-pathogenic avian influenza, which spread through 
the Shenandoah Valley in Virginia. The bulk of our response to the 
current outbreak has been based upon the existing USDA avian influenza 
response plans we've developed and refined over the years. These 
existing plans have allowed USDA and its state partners to respond 
quickly and decisively to address this outbreak using the authorities 
given to us under the Animal Health Protection Act and state laws and 
regulations.
    The goals of USDA's HPAI response plans are to (1) detect, control, 
and contain HPAI in poultry as quickly as possible; (2) eradicate HPAI 
using strategies that seek to protect public health and stabilize 
animal agriculture, the food supply, and the economy; and (3) provide 
science- and risk-based approaches and systems to facilitate continuity 
of business for non-infected animals and non-contaminated animal 
products. In addition we want to ensure that the Federal Government, 
producers, states and local governments are well-positioned to 
effectively respond to future outbreaks. Achieving these goals will 
allow individual poultry facilities, states, Tribes, regions, and 
industries to resume normal production as rapidly as possible and 
minimize losses from future outbreaks. They will also allow the United 
States to regain disease-free recognition from our trading partners 
without the response effort causing more disruption and damage than the 
disease outbreak itself would be were it left unchecked.
    The plan has five basic steps when the disease is detected: 
quarantine, eradicate, monitor, disinfect, and test.

   Quarantining allows us to restrict the movement of poultry 
        and poultry-moving equipment into and out of the control area. 
        Simply, we must stop the spread and transfer of the disease as 
        much as we can.

   Eradication is part of our ``stamping-out'' approach to 
        HPAI, which requires the depopulation of clinically affected 
        and in-contact susceptible poultry to eliminate the disease 
        where it exists and to further reduce the risk of spread. USDA 
        has provided indemnification payments to producers for those 
        birds that must be depopulated, which helps serve as an 
        incentive for them to report potential infections quickly, 
        which can further reduce the potential for virus spread.

   USDA monitors the region to better understand the viral 
        spread. We monitor birds in a broad area around the quarantine 
        area to see if there are other incidents to which we must 
        respond.

   Cleaning and Disinfection of the premises where affected 
        flocks are located is a key piece toward eradication. We must 
        know that facilities are clean and disease-free before we can 
        allow them back into production.

   Testing is the last step. After the disinfection is complete 
        and before we can release the quarantine, we test the premises 
        and environment to ensure that it is disease-free, so that 
        operations may safely resume.

    USDA has the best avian influenza surveillance system in the world. 
Our program exceeds international standards and allows us to identify 
the disease, and upon detection, to ramp up our emergency response 
activities. Our strong surveillance system assures our trading partners 
that we take disease eradication and control seriously and will be of 
great benefit to us as we try to resume trade with the foreign trading 
partners who have cut off access to U.S. poultry and poultry products.
How This Works for Producers
    USDA wants impacted producers to get back into business as quickly 
as possible, and APHIS and its state partners work very closely with 
those affected.
    Following confirmation of HPAI in their operation, a producer will 
need to develop a flock plan for all premises with confirmed infections 
or exposure. The flock plan sets out the steps to eradicate the virus 
and prevent its spread to other flocks. It also specifies the 
procedures required to get the facility back into production, including 
requirements for quarantine release. The flock plan will include 
cleaning and disinfection requirements. The flock plan must be signed 
by the owners, a state animal health official, and an APHIS official 
before an indemnification payment can be processed. An APHIS case 
manager will work with the producers to walk them through the process 
and the information required to complete all steps.
    APHIS will then prepare an appraisal document for indemnification 
and present it to the producer as quickly as possible. Affected 
producers need to sign the appraisal document before depopulation can 
occur. The Animal Health Protection Act limits indemnity to the fair 
market value of the animal being depopulated; our indemnity payments 
are not intended to make the producer whole, such as by covering 
production losses during the time a barn is down for the disease 
response activities. APHIS economists developed a series of species-
specific appraisal calculators that use publicly available prices, 
costs, and productivity data to develop a value per animal that varies 
by the age of the animal. The calculators are updated monthly to 
account for changing feed costs, values, and assumptions.
    The value per animal type multiplied by the number of each animal 
type is used to calculate total indemnity. For HPAI, APHIS provides 100 
percent of that indemnity amount. One important distinction: the Animal 
Health Protection Act limits indemnity to the fair market value of the 
animal being depopulated.
    A compliance agreement must be developed if depopulation, disposal, 
or cleaning and disinfection will be performed by personnel other than 
Federal or state officials, and if the producers will request indemnity 
for those activities. A compliance agreement is separate from the flock 
plan. The flock plan specifies the necessary procedures for the 
premises to resume normal production; a compliance agreement indicates 
what tasks will be completed, who will be responsible for each task, 
and how much the work is expected to cost. A compliance agreement is 
comparable to a statement of work--a plan that lays out the activities 
to be done and the expected costs to accomplish those activities.
    Provided the terms of the compliance agreement are met, USDA will 
provide funding for those cleaning and disinfection activities, and 
compensation or indemnification for any items or equipment that are 
destroyed or damaged as a result of the cleaning and disinfection 
process.
The Importance of Biosecurity
    One of the lessons we've learned is that we all need to be vigilant 
about maintaining stringent biosecurity measures, especially in the 
face of a disease outbreak. In June, APHIS released a partial 
epidemiology report on the Agency's findings about the origins and 
spread of the virus. While the results of our preliminary 
epidemiological investigation didn't show a single source of 
transmission, it did emphasize the importance and need for improved 
biosecurity. The strength of our biosecurity efforts depends entirely 
on all of us--producers, their employees, USDA, and our contractors who 
are responding to this outbreak.
    Part of this involves more outreach to producers. We've made more 
information about basic biosecurity practices available on our website, 
and we've shared materials such as a checklist of best practices and 
information sheets with industry groups for distribution to their 
members. These recommendations include items such as allowing only 
essential personnel access to poultry premises and thoroughly 
disinfecting boots, equipment, and vehicles that enter and exit those 
locations.
    We're also meeting directly with State Veterinarians and industry 
to discuss the need for more biosecurity. On July 28 and 29, 2015, we 
held a stakeholder meeting with those groups to discuss those issues to 
ensure that our collective biosecurity is more stringent and that we 
are prepared for any future outbreaks. We also participated this week 
in an industry-sponsored meeting in Des Moines, Iowa to talk about the 
importance of our shared biosecurity responsibilities, as well as to 
stress the importance of proper planning for the fall.
    We know that proper biosecurity begins at the farm's edge. What 
this outbreak has taught us is that the biosecurity measures that 
extend on the farm into each individual barn or facility are equally 
or, at times, more important than the farm's edge approach. Based on 
the belief that ``an ounce of prevention is worth a pound of cure,'' we 
plan to work with our producer and state and local partners to 
strengthen biosecurity measures. This may require changes to current 
practices or assumptions, and USDA is engaging our partners in these 
critical issues.
    APHIS appreciates the cooperation of poultry producers in providing 
the information needed for these epidemiology investigations. APHIS 
values its partnership with industry and believes that with their 
continued support and assistance, the agency will be well positioned to 
learn all it can about this virus. We all have a role in--and a 
responsibility for--our nation's agricultural health, and we will work 
together to ensure that we are in the best position possible to address 
this disease.
Preparedness for the Fall
    USDA is treating the potential threat of more infections in the 
fall with the utmost seriousness. Although we hope that we will not 
have additional or more wide-spread outbreaks, it's very likely that 
wild birds will carry the virus with them when they begin migrating 
south in the fall. Although states in the Atlantic flyway have not been 
affected by this HPAI outbreak, it's important that our state and 
industry partners begin preparations should the disease occur there.
    I can assure you that this need for preparedness has the attention 
of all of USDA. The Secretary is leading these efforts, and has 
directed USDA to do everything it can to respond to this virus, assist 
producers, and maintain trade markets. As we look to the fall, we plan 
to be ready for the challenge.
    To that end, we recently concluded a planning workshop with our 
partners focusing on the worst-case scenarios and the responses needed. 
We're identifying the resources we would need under various scenarios 
and how we can better partner with states and industry to manage this 
disease.
    We've encouraged our partners to review the existing avian 
influenza response plans so they understand what we will expect and 
what actions we will need them to take should the disease strike. Along 
those lines, we've urged states and industry to develop site- and 
county-level specific depopulation plans for landfilling or composting 
birds. Our experience in the Midwest showed that the biggest roadblock 
to efficient depopulation (which is key to reducing the spread of the 
virus) is the lack of ready sites to receive and process dead birds.
    Should the disease strike in the fall, USDA and its partners will 
be ready to tackle it head-on.
Vaccination and Trade Issues
    As part of USDA's ongoing response, the Department evaluated the 
efficacy of current vaccine options for HPAI in addition to the 
economic impacts of vaccination. Some in the poultry industry asked if 
USDA would consider allowing the emergency use of vaccines to halt the 
spread of the disease. In June, after conducting that evaluation, USDA 
determined that we would not, at this time, allow for the use of 
vaccines to assist in the eradication of HPAI.
    Right now, we do not have a closely matched vaccine to the outbreak 
H5N8 or H5N2 HPAI viruses. USDA's Agricultural Research Service (ARS) 
is evaluating a current vaccine in chicken and turkey protection 
studies against our specific outbreak viruses. In addition, ARS has 
developed a reverse genetic H5 vaccine seed strain that antigenically 
matches the field virus and it is undergoing the same protection 
studies. Only the most efficacious vaccines should be considered for 
field use as any infection in the vaccinated population would still 
require the entire barn to be depopulated.
    Aside from questions about its effectiveness, USDA believes that if 
a vaccine were used, some additional trading partners would ban all 
U.S. exports of poultry and eggs and not necessarily just those from 
the states currently affected by HPAI until they could complete a full 
risk assessment. The loss of these markets could cost U.S. producers at 
least $3 billion in trade revenue with uncertain reductions to the 
mortality rate of birds from this disease.
    In the weeks and months ahead, we will continue to support efforts 
to develop more effective vaccines. ARS scientists are working 
diligently on a better vaccine based on the specific genetics of this 
strain of the virus. We have said that we may reevaluate our 
vaccination decision as more effective vaccines are developed and ready 
for use, carefully considering both the efficacy of the vaccine and the 
potential trade impacts. If used, vaccines will serve as an additional 
tool in our eradication efforts and will be targeted in the states and 
poultry sectors where they can be most effective.
    USDA has been working very closely with our trading partners to 
minimize the effects of this outbreak on producers. The World 
Organization for Animal Health (OIE) guidelines encourage a 
regionalized approach to animal diseases, and we have urged our trading 
partners to adopt that approach, just as we would with them should they 
be struck by an animal disease. Despite the OIE guidelines, 18 trading 
partners have suspended imports of all U.S.-origin poultry and poultry 
products. However, 38 trading partners have adopted a regionalization 
approach, limiting imports of poultry and poultry products only from 
those states or counties affected. We speak with our partners 
regularly, and are already working with them to restore market access 
from the areas where the outbreak was limited and has been controlled. 
We'll continue to work with them to restore full market access as 
quickly as possible as the overall outbreak subsides.
Conclusion
    There are a few key points I want to leave you with. There have 
been no human infections from these viruses and the risk to the general 
public is low. It's also important to understand that our food supply 
is safe. Properly prepared and cooked poultry and eggs are safe to eat.
    I think despite the difficulties we've faced, we've had some good 
news. We have not had a single detection of the disease since June 17, 
well over a month ago, and 60 farms are eligible to repopulate with new 
poultry. The restocking guidelines we and our state partners have put 
in place give us the assurance that the premises and the local 
environment are free from the disease, and that we have enhanced 
biosecurity measures in place to reduce the threat of re-contamination. 
Most importantly, successful restocking is a sign that our techniques 
and approaches in confronting this disease can and do work. That might 
not seem like much consolation for the producers who've lost so much, 
but it should provide reassurances to those nervous about the potential 
approach of the disease through wild waterfowl come fall.
    I really want our producers to understand that they have USDA's 
support. Our experience in quickly and successfully responding to 
previous animal disease outbreaks and the lessons we've learned from 
the Spring on this outbreak will inform our response and allow us to 
minimize the effects of this disease, going forward. Every day, we are 
further refining our prevention, detection, and response based on the 
latest science and the lessons from this outbreak. We will continue 
sharing what we learn with our state and industry partners through 
regular conversations and meetings. We will also continue to work with 
Congress to ensure that we have the necessary tools and resources to 
fight this disease. Together, we will meet this challenge and protect 
the health of the nation's poultry.

    The Chairman. Thank you very much.
    Dr. Meckes.

         STATEMENT OF R. DOUGLAS MECKES, D.V.M., STATE
           VETERINARIAN, NORTH CAROLINA DEPARTMENT OF
         AGRICULTURE AND CONSUMER SERVICES, RALEIGH, NC

    Dr. Meckes. Yes. Chairman Rouzer, Ranking Member Costa, 
Members of the Livestock and Foreign Agriculture Subcommittee, 
I am Dr. Doug Meckes. I am the State Veterinarian in North 
Carolina and the lead for the veterinary division in the North 
Carolina Department of Agriculture and Consumer Services. Thank 
you for the opportunity to be here today to speak to our 
efforts to prepare for and to respond to highly-pathogenic 
avian influenza should it come our way this fall.
    First and foremost, please understand that in North 
Carolina the department has approached this task knowing that 
appropriate response is beyond the scope of any single entity 
in state government. From the beginning of the endeavor, we had 
fully embraced our colleagues in the department and in 
particular the staff of the emergency programs division, which 
includes both emergency responders and veterinarians who are 
uniquely qualified through their training and experience to 
address this disease.
    In addition, we have aligned ourselves with the 
department's environmental programs leads, who serve as the 
liaison with the Soil and Water Conservation Division in the 
Department of Environment and Natural Resources. North 
Carolina's diverse topography from the mountains to the coast 
necessitates consideration of environmental impacts of every 
aspect of response activity should we experience unprecedented 
mass mortality.
    Other partners in the department--Marketing, Forestry, and 
Food and Drug Laboratory--have also been included to varying 
degrees. Outside of the department, we have engaged with the 
poultry industry, our Federal partners, North Carolina State 
University, the cooperative extension service and state 
emergency management in our efforts to assure a unified 
approach to the potential for disease outbreak.
    The department's efforts for preparedness began in earnest 
after requests for disease management assistance were received 
from Minnesota in March. We immediately responded and deployed 
depopulation teams to support Minnesota's efforts. And during 
the early April period, the Midwest experienced a blowup in 
premise numbers of infected with the avian influenza virus and 
existing resources were overwhelmed, leading to a backlog in 
disposal efforts.
    During two additional deployments, North Carolina response 
teams traveled to Minnesota and to Iowa and, again, assisted 
the state's response team in depopulation of infected birds. 
Recent reports indicate that the presence of this backlog of 
infected birds contributed to the lateral spread of the virus 
in several areas, but by the time our teams returned to North 
Carolina, that backlog had been managed.
    These deployment experiences were the cornerstones for our 
preparedness efforts in North Carolina. And over the past 3 
months, we have established work groups to address many of the 
lessons learned during deployments. Those groups include 
operations, biosecurity, laboratory capacity, disposal, decon, 
and disinfection, communications, outreach, and permitting. 
Internally, the Emergency Programs Division, the Veterinary 
Division, and the Environmental Programs staff are fully 
engaged in every aspect of these working groups.
    Our external partners are also participating in each of 
those areas. Three particular areas are deemed critical and 
effective timely management of disease outbreak, operations, 
particularly depopulation, biosecurity, and disposal. As 
previously noted, the delay in depopulation contributed to the 
lateral spread of the virus in the Midwest. We are determined 
that will not be the case in North Carolina.
    The department has long conducted training sessions for 
staff and others in the use of North Carolina foaming 
equipment, typically twice a month in the eastern and western 
parts of the state. More recently, the department conducted 
foam training for industry partners on 2 successive days and 
held three regional meetings in the eastern, central, and 
western North Carolina for industry and agency partners to 
discuss preparations for a robust response to high-path avian 
influenza.
    In addition, our marketing division and Commissioner of 
Agriculture Troxler have solicited funding from our industry 
partners for construction of ten additional units. Once these 
units are completed, North Carolina will have 16 foam units 
available, ten of which will be fully manned and ready for 
deployment in the event of disease outbreak. The department has 
also worked with our colleagues in forestry to rent fire trucks 
with foaming equipment suitable for use in depopulation 
activities.
    While delays in depopulation are believed to have 
contributed to the lateral spread of a virus, of equal 
significance and consequence are the breaches in biosecurity 
that have been documented by USDA. Suffice it to say, all would 
be well served to implement more stringent biosecurity 
procedures. Our goal in North Carolina is no lateral spread. 
And to accomplish this, the biosecurity lead on each of our 
response teams will seek to ensure compliance with biosecurity 
protocols by our team members, by all grower staff, and all 
movements on and off premises.
    Since North Carolina grower facilities are typically in 
much closer proximity to one another than in those states which 
have already been affected, there is greater need for 
comprehensive biosecurity practices to reduce the spread of 
high-path AI. Consider, for example, that in some identified 10 
kilometer control areas in North Carolina we have over 500 
individual poultry houses contained within that perimeter.
    Disposal is the third critical tenet of the department's 
response effort, and given constraints on burial throughout of 
North Carolina and the limitations on landfill and rendering 
facilities, composting is the first choice for management of 
poultry carcasses as has been the case throughout the Midwest.
    Finally, the economic impact of catastrophic mass mortality 
disease outbreak could have profound implications for counties, 
and for the state. The North Carolina poultry industry is 
responsible for as much as $34 billion in total economic 
activity and creates and supports as many as 109,000 jobs.
    North Carolina has a longstanding commitment to agriculture 
and has responded to and recovered from agriculture disasters 
in the past: Drought, disease, and weather events. But high-
path AI's unprecedented in its potential to impact our state 
and the entire Southeast.
    The department and its partners are committed to preparing 
for and responding to this disease should it arrive on the 
wings of migratory birds this fall, and we are at the ready to 
quickly and effectively manage the disease to the best of our 
ability. If successful, we will minimize the impact on North 
Carolina poultry industry, on its growers, on our economy, and 
the citizens of our state.
    I am prepared to answer any questions you might have.
    [The prepared statement of Dr. Meckes follows:]

 Prepared Statement of R. Douglas Meckes, D.V.M., State Veterinarian, 
    North Carolina Department of Agriculture and Consumer Services,
                              Raleigh, NC
    Chairman Rouzer, Ranking Member Costa, and Members of the Livestock 
Subcommittee:

    Thank you for the opportunity to speak to you about the ongoing 
efforts of the North Carolina Department of Agriculture and Consumer 
Services (NCDA&CS) to prepare for and to develop capability to respond 
to Highly-Pathogenic Avian Influenza (HPAI). First and foremost, please 
understand that in North Carolina, the Department has approached this 
task understanding that appropriate response is beyond the scope of any 
single entity in state government. From the beginning of this endeavor, 
the Veterinary Division has fully embraced our colleagues in the 
Department, in particular the staff of the Emergency Programs Division 
which includes both emergency responders and veterinarians who are 
uniquely qualified, through their training and experience, to address 
this disease. In addition, we have closely aligned ourselves with the 
Department's Environmental Programs lead who serves as the Department's 
liaison with the Soil and Water Conservation Division. We have also 
engaged colleagues within the Department of Environment and Natural 
Resources (DENR), including Solid Waste, Air and Water Quality and 
Confined Animal Feeding Operations Specialists. North Carolina's 
diverse topography, from the mountains to the coast, necessitates 
consideration of environmental impacts of every aspect of response 
activity should we experience unprecedented mass mortality.
    Other partners in the Department--Marketing, Forestry, and the Food 
and Drug Laboratory have been included in varying degrees as well. 
Outside of NCDA&CS, we have engaged with the poultry industry, our 
Federal Partners, North Carolina State University, the Cooperative 
Extension Service, NC Department of Labor, NC Department of 
Transportation, NC Public Health and State Emergency Management in our 
efforts to assure a unified approach to potential disease outbreak. NC 
Emergency Management has agreed to handle all HPAI logistical support 
at the state and local level.
    The Department's preparedness efforts began in earnest, after 
requests for disease management assistance were received from the state 
of Minnesota in March; we immediately responded and deployed 
depopulation teams to support Minnesota's efforts. During the early 
April period, the Midwest experienced an unprecedented increase in 
numbers of HPAI-infected premises. According to the State Veterinarian 
of Minnesota and USDA officials, existing resources were overwhelmed, 
leading to a backlog in depopulation and disposal needs.
    During three additional deployments, North Carolina response teams 
traveled to Minnesota and Iowa to assist those states in the 
depopulation of infected birds. Recent USDA epidemiological reports 
indicate that the presence of this ``backlog'' of infected birds 
contributed to the lateral spread of the virus in several areas; 
however, by the time of our team's return to North Carolina, the 
``backlog'' of infected birds had been managed.
    These deployment experiences became the cornerstones for 
preparedness efforts in North Carolina. Over the past 3 months, we have 
established Work Groups to address many of the lessons learned during 
deployments. Those groups include: operations, biosecurity, laboratory 
capacity, disposal, decontamination and disinfection, communications, 
outreach and permitting. Internally, the Emergency Programs Division, 
the Veterinary Division and Environmental Programs staff are fully 
engaged in every aspect of the Working Groups; our external partners 
are also participating in each of these areas.
    The Laboratory Capacity group is collaborating with the North 
Carolina Veterinary Laboratory Diagnostic System's four state 
laboratories which will be a critical component in the response 
efforts. These facilities provide the first line of defense and have 
the capability to diagnose highly-pathogenic avian influenza virus and 
perform tests required for movement of poultry to maintain the flow of 
commerce. The Communications Group developed messaging early in the 
process to ensure consistent information to the public; that 
information is posted on the NCDA&CS web site and is available for 
public reference. The Outreach group has worked across a spectrum of 
players to ensure timely release of information. Significant amongst 
this group is the State's Cooperative Extension Service; they are ``on 
the ground'' on a daily basis and have close working relationships with 
both small and large producers and back yard poultry owners. North 
Carolina also reached out early to special avian collections and 
created an annex to our HPAI Response Plan. Special Avian collections 
include birds of special value due to their endangered status or exotic 
birds on display to the public such as those in the NC Zoo in Asheboro.
    Four working Groups have been focused on specific operational 
aspects of response, to include Biosecurity, Depopulation, Disposal and 
Decontamination. These working groups include a variety of subject 
matter experts.
    As previously noted, the delay in depopulation is believed to have 
been significant to the lateral spread of the virus in the Midwest. We 
are determined that inadequate depopulation capability will not cause 
similar problems in North Carolina. The Department has long conducted 
training sessions for staff and others in the use of our North Carolina 
foaming equipment, typically twice a month, in the eastern and the 
western part of the state. More recently, the Department conducted Foam 
Training for industry partners and interested parties from other states 
on 2 successive days. Three Regional Meetings (eastern, central, and 
western North Carolina) were held for industry and agency partners to 
discuss preparations for a robust response to HPAI emerging from the 
Atlantic flyway this fall.
    Breaches of biosecurity documented in the current United States 
Department of Agriculture (USDA) Epidemiologic Report are believed to 
have contributed to lateral spread of the virus. During response 
activities, Animal and Plant Health Inspection Service (APHIS) 
personnel observed sharing of equipment between infected and non-
infected farms, employees moving between infected and non-infected 
farms, lack of cleaning and disinfection of vehicles moving between 
farms, and rodents or small wild birds inside poultry houses. APHIS is 
compiling their observations and will present those findings in a final 
report. Stringent biosecurity will be paramount to preventing lateral 
spread.
    Our goal in North Carolina is ``No Lateral Spread'' and to 
accomplish this, the Biosecurity lead on each positive farm will ensure 
compliance with biosecurity procedures by our team members, all grower 
staff, and for all movements on and off the premise.
    Since North Carolina grower facilities are typically in much closer 
proximity to one another than in states which have already been 
affected, there is a greater need for comprehensive biosecurity 
practices to reduce the risk of HPAI spread. Consider, for example, 
some identified 10 kilometer Control Areas in North Carolina's Animal 
Health Data Base have over 500 individual poultry houses within the 
perimeter. Given that all movement between farms and within farms need 
to be conducted under the assumption that the disease may be present, 
the biosecurity mechanism is monumental, but doable.
    Disposal is another critical tenet of the Department's response 
effort. Given constraints on burial throughout much of North Carolina 
and limitations on landfills and rendering facilities, composting is 
recommended as the first choice for management of poultry carcasses as 
has been the case throughout the Midwest. The compost disposal method 
is also a preferred biosecurity measure in that no diseased birds need 
to leave the farm. Rapid establishment of mortality compost windrows on 
site is key to disposal of birds and inactivation of the influenza 
virus. Timely and effective composting also aims to minimize ``down 
time'' for the impacted farms to the extent possible.
    The Disposal Work Group is actively pursuing the identification of 
various carbon sources across the state that are of appropriate type 
and of sufficient quantity to develop effective compost recipes on each 
infected premise. The Work Group is also in the process of developing 
guidance for land application of finished compost for agronomic use as 
a soil amendment with ``fertilizer'' value. Additionally, the Workgroup 
has planned a composting demonstration associated with Commissioner 
Troxler's annual Food Safety Forum in August. The Department's Incident 
Management team will create a working ``mortality compost pile'' near 
the meeting location for growers from around the state to attend.
    Finally, the economic impact of a catastrophic mass mortality 
disease outbreak in North Carolina could/would have profound 
implications for counties, regions, and even the entire state. The 
North Carolina poultry industry is responsible for as much as $34 
billion in total economic activity and creates/supports as many as 
109,000 jobs. For each $100 million loss in North Carolina poultry farm 
and poultry processing industries, total state spending falls by 
$230,000 million, total income in the state falls by $68.8 million, 
total labor earnings fall by $44.6 million and total employment falls 
by 1,010 jobs. We've already seen that Minnesota and Iowa have realized 
a $1 billion economic loss associated with HPAI infection on 180 
premises. As many as 500 premises nationwide could be affected this 
fall.
    North Carolina has a long-standing commitment to agriculture and 
has responded to and recovered from agriculture disasters in the past--
drought, disease and weather events, but HPAI is unprecedented in its 
potential to impact our state and the entire Southeast. The North 
Carolina Department of Agriculture & Consumer Services and its partners 
are committed to preparing for and responding to HPAI, should it arrive 
on the wings of migratory birds this fall, and we are at the ready to 
quickly and effectively manage the disease to the best of our ability, 
incorporating the latest USDA lessons learned. If successful, we will 
minimize impact on the North Carolina poultry industry, its growers, 
our economy, and the citizens of our state.
    I am prepared to answer any questions you might have.

    The Chairman. Thank you, very much.
    Dr. Hartmann.

 STATEMENT OF WILLIAM L. HARTMANN, D.V.M., EXECUTIVE DIRECTOR 
 AND STATE VETERINARIAN, MINNESOTA BOARD OF ANIMAL HEALTH, ST. 
                            PAUL, MN

    Dr. Hartmann. Mr. Chairman and Members of the Committee, my 
name is Bill Hartmann. I am the Executive Director of the Board 
of Animal Health and the State Veterinarian in Minnesota. I 
want to thank you for providing me with an opportunity to 
testify to this group on the outbreak of high-path avian 
influenza that we had in Minnesota.
    First, I wanted to thank Congressman Peterson for his 
efforts in Minnesota and for his support during this event.
    I also wanted to acknowledge John Clifford and the USDA for 
what they have done in Minnesota. Our success depended on them 
being there, and we really appreciate the help that we have 
received from them. At one point, there were 140 USDA employees 
working on high-path AI in Minnesota.
    It is an understatement to say that high-path AI in 
Minnesota has been devastating and extremely difficult for all 
involved. A University of Minnesota study estimated the losses 
to the economy of Minnesota at $650 million and that was a few 
weeks ago. The hardest part of this disease has been to see the 
emotional impact this disease has had on those growers who have 
affected farms and on the whole industry in Minnesota.
    Why Minnesota was so affected, a few reasons: One, we are 
the Land of 10,000 Lakes and so we have a lot of migratory 
waterfowl that stop in Minnesota. We produce more turkeys than 
any other state in the United States, and there is a 
concentration of those turkey farms in the west central part of 
Minnesota. And last, the weather was right. It was nice and 
cool and damp in Minnesota during the spring and that is what 
the virus likes.
    The outbreak started on March 4, and we haven't had any new 
cases, as Dr. Clifford said, since June 5. So we have gotten a 
break this summer. And, as Dr. Clifford said, we are making 
great progress in recovering. There was a 3 week gap between 
the first case we had and the second case, but then after that 
we had cases almost every day.
    And at the height of the outbreak we had eight cases; that 
is eight farms that were found affected in 1 day. This included 
farms that are relatively large in size. We had a turkey farm 
that had 310,000 turkeys on it and a chicken layer operation 
that had over two million birds in the facility.
    During the course of the outbreak, over nine million birds 
died or were depopulated to prevent the spread of the virus. 
Minnesota has extensive experience with low-path avian 
influenza. We have had that disease just about every year since 
I have been there. The difference is that that virus doesn't 
kill birds; it rarely makes them sick, but we still want to 
make sure that we respond to it.
    Working together with USDA, we followed the guidelines that 
USDA has outlined for eliminating this disease. All 110 farms 
were quarantined, appraised, and depopulated. After 
depopulation, turkeys were composted in the barns, and when 
that compost material was taken out of the barns, the barns had 
to be cleaned and disinfected, which is quite a job, and then 
the environment has to be tested before we can release 
quarantine on the farms.
    Neighbors with poultry had to be identified and tested, and 
during the outbreak we tested over 1,000 flocks for high-path 
AI. Over the last 10 years, USDA funded development of a 
scientifically-based permitting system to allow for movement of 
poultry and poultry products in control areas during a high-
path AI outbreak.
    Fortunately, they did this because the economic impact 
could have been much greater if we hadn't been able to move 
poultry and poultry products out of these control zones. As a 
matter of fact, Minnesota issued 6,000 permits for movement of 
poultry and poultry products within Minnesota and out of 
Minnesota.
    We are working hard with our partners to get all the 
affected farms back in business as usual. Of the 110 farms that 
were quarantined and depopulated, 49 are no longer classified 
positive, 38 have restocked, and eight have been released from 
quarantine. All of the control zones have been eliminated, so 
we no longer are required to do this permitting because all 
those control zones have been taken care of.
    What did we learn from this outbreak that we might share 
with other states in preparation for the fall? It is very 
important to develop relationships before a crisis, with not 
only the state, Federal Government, but also local government. 
We need to prepare and train. We need to be able to depopulate 
farms within 24 hours. We need to identify a facility in the 
area where poultry are raised in the state where we can 
establish an emergency operation center.
    We need to make sure that our laboratories have adequate 
capacity to handle the incredible demands that are made of that 
laboratory to run tests. All poultry farms should have an 
emergency carcass disposal plan.
    And finally, a new level of biosecurity is going to be 
required to deal with this virus. We are doing these things in 
Minnesota, and we are sharing our lessons learned with other 
states.
    Thank you.
    [The prepared statement of Dr. Hartmann follows:]

 Prepared Statement of William L. Hartmann, D.V.M., Executive Director 
 and State Veterinarian, Minnesota Board of Animal Health, St. Paul, MN
Background
    The Minnesota Board of Animal Health (Board) is the lead state 
agency for emergencies involving domestic and foreign animal diseases. 
When the first case of Highly-Pathogenic Avian Influenza (HPAI) was 
found in Minnesota, the Board took the lead in responding. The Board 
has a Memorandum of Understanding with the Minnesota Department of 
Agriculture (MDA) to support the Board in the event of a foreign animal 
disease because such a situation requires resources beyond what the 
Board has available. So as we found more infected farms we enlisted the 
assistance of MDA using the incident command structure. Eventually the 
outbreak exceeded the capacity of Minnesota to respond and we requested 
an incident management team from USDA:APHIS:Veterinary Services. On 
April 23, 2015 Governor Dayton declared a peace time emergency. This 
emergency declaration allowed for the State Emergency Operations Center 
to be activated and provided access to all of the state government's 
assets. Other agencies that assisted in the response include the 
Minnesota Departments of Health, Natural Resources and Public Safety 
and the National Guard.
Minnesota Poultry Industry
    Minnesota is ranked number one for turkey production. The state's 
450 turkey farmers raise approximately 45 million birds annually on 600 
farms, bringing more than $600 million in income for farmers, 
processors and other related industries. Minnesota has more independent 
turkey farmers than any other state in the U.S. Many of these farmers 
are third, fourth and even fifth generation family farmers. As the 
nation's largest producer and processor of turkey, Minnesota is home to 
three turkey processing companies with a total of seven processing 
plants around the state. The state is also home to the largest turkey 
hatchery company in the world. Every Minnesota turkey generates $17.46 
of direct economic activity to the state, providing $807 million in 
economic impact. The turkey industry also is responsible for 6,000 
direct jobs in on-farm and processing activities. The majority of 
turkeys raised in Minnesota are more likely to be shipped outside the 
state.

   Ninety (90) percent of turkey products processed in state 
        are exported out of Minnesota.

   Of that 90 percent, approximately 15 percent are exported to 
        international markets.

    Minnesota's egg farmers currently rank number 8 for egg production 
in the U.S. Farmers care for approximately 11 million egg-laying hens 
and produce about 2.9 billion eggs annually. The production value of 
Minnesota's egg industry is approximately $170 million, and accounts 
for over 2,900 jobs. Minnesota's broiler chicken farmers raise 47 
million birds on an annual basis, with an economic value of $123 
million. Processing activities add $19 million to the value of broilers 
produced in Minnesota, and the industry contributes 1,300+ direct jobs 
on farm and in processing.
The Outbreak
    It is an understatement to say that HPAI in Minnesota has been 
devastating and extremely difficult for all involved. The outbreak in 
Minnesota started on March 4, 2015. This first case was in a turkey 
breeding facility. Increased death loss led to samples being tested for 
HPAI at the Minnesota Veterinary Diagnostic Laboratory. The test was 
positive and samples were sent to the National Veterinary Services 
Laboratory for a confirmatory diagnosis. By the time a diagnosis was 
made all but a few of the 20,000 turkeys in the affected barn had died. 
The owner did not receive any compensation for the dead birds. There 
was a 3 week break between that first case and the second case. After 
that there were one or more new cases almost every day. On the worst 
day, there were eight new cases. At the height of the outbreak we had 
110 farms quarantined in 23 counties. This included a turkey complex 
with 310,000 birds and a chicken layer complex with over two million 
birds. Over nine million birds have died or were depopulated to prevent 
the spread of this virus. The hardest part of this disease has been to 
see the emotional toll it has taken on affected growers and the 
industry as a whole.
Minnesota's Response
    Minnesota has extensive experience in responding to animal disease 
outbreaks, especially with low-pathogenic avian influenza (LPAI). In 
the past turkeys were raised outside in Minnesota and exposed to wild 
waterfowl. This resulted in many cases of LPAI each year in turkeys. 
Representatives of the poultry industry, the University of Minnesota 
and the state worked together to develop a prevention, notification and 
response plan for LPAI. One of the changes made was that most turkeys 
are raised indoors now. This greatly reduced the number of LPAI cases. 
Working together with USDA Minnesota has followed the USDA guidelines 
for responding to HPAI. All 110 farms that were quarantined were 
appraised and depopulated with the USDA paying indemnity for the live 
birds. After depopulation the birds were composted in the barns. When 
the composted material is removed from the barns the barns have to be 
cleaned and disinfected and finally environmental tests are run before 
quarantine release.
    Neighbors with poultry had to be tested and monitored for the 
disease (over 1,000 flocks were sampled). A permitting system had to be 
set up to allow poultry and poultry products to move into, within and 
out of the control zones around the infected farms. We have issued 
permits for over 6,000 movements. It was so vital to have a science 
based, continuity of business permitting system in place prior to this 
event so that safe poultry and poultry products were able to move. 
Without this system in place the economic and animal welfare impacts of 
the outbreak would have been much worse.
Current Status
    We are working hard with our partners to get all of the affected 
farms back to business as usual. As of July 21, 2015 of the 110 farms 
that were quarantined and depopulated:

   Forty nine are no longer classified as positive,

   Thirty eight have restocked, and

   Eight have been released from quarantine.

    In addition, 98 of the control zones (6.2 mile radius around 
infected farms) have been eliminated. Even though we haven't found an 
infected flock in 7 weeks we still have over 100 state, Federal and 
contract people working on the completion of this response.
Lessons Learned
    This is the most extensive multi-state animal health emergency we 
have ever faced. Our response was well coordinated and we worked well 
with the poultry industry, state and local officials, and USDA. The 
relationships the Board has built with key stakeholders over the years 
greatly assisted in a unified response. The most important lesson 
learned is that building relationships before a crisis is crucial.
    It is also crucial that USDA and all states prepare and train. We 
need to have the resources necessary to depopulate infected flocks 
within 24 hours of diagnosis. When this is not done the virus quickly 
infects more birds which then sheds the virus in large quantities 
creating a heavily contaminated site, increasing the chance for lateral 
spread. The needed resources include equipment for depopulation and 
trained personnel. There should be facilities around the state where 
you can set up an emergency operations center near where the cases are 
found. Your laboratory must have enough trained technicians and 
equipment to manage the increased volume of tests. All poultry farms 
must have an emergency carcass disposal plan. A new level of 
biosecurity is also necessary to stop the spread of this virus.
Preparations for the Fall
    Having lived through the spring outbreak we understand what is 
necessary to prepare for the possibility of a recurrence in the fall. 
We are procuring depopulation equipment adequate to be able to 
depopulate farms within 24 hours of diagnosis. We are exploring methods 
to rapidly depopulate large chicken layer complexes. Our personnel are 
well trained and ready to respond. We have identified a facility in the 
heart of Minnesota's turkey industry to use as a center of operations 
that is available to lease for a year. Our Veterinary Diagnostic 
Laboratory has hired and trained staff to meet the anticipated increase 
in volume of testing. Funding has been provided to increase the size 
and capacity of our Minnesota Poultry Testing Laboratory that is close 
to the poultry operations to supplement the testing of our diagnostic 
laboratory. We are working with poultry producers to audit their 
biosecurity and to make sure they have an emergency carcass disposal 
plan. Several meetings have been held to discuss strategy for the 
future bringing together industry, academia, local, state, and Federal 
Government.
    Though we know that new challenges may be presented in the months 
to come, we are ready for and committed to a swift and unified 
response.

    The Chairman. I would like to thank each of the witnesses 
very much for their testimony.
    We will now go into a round of questions. And I have a few 
here myself. In fact, we are not going to have the time limit 
on Members, but I ask Members to try to keep their questions as 
concise as possible, and I will certainly try to do the same so 
that we can get through this in a timely manner.
    Dr. Clifford, we, in North Carolina, are very fortunate 
that the virus has not made it into our state or region yet, 
but it certainly has a potential to come this fall. What 
outreach is USDA currently doing to prepare states that have 
not yet been impacted for a potential outbreak?
    Dr. Clifford. Thank you, Mr. Chairman.
    We have actually had several meetings with the industries 
and with the states in preparing for this fall. We have 
actually sent a survey to the states to prepare them and to 
prepare us to make sure that the states have identified 
beforehand the necessary needs for disposal of birds in those 
states, whether it be a landfill, and have plans ready and 
prepared so that we know exactly where those birds need to be 
taken or how we plan to dispose of those birds in those states.
    In addition, besides our other types of outreach that we 
have done, we are planning on sending out a survey to the 
industry itself throughout to address some of the questions 
that we have for them in making sure that they are prepared.
    From all of this outreach and things that we are doing, we 
are preparing a USDA plan that will be provided to the 
Secretary of Agriculture and then provided also to our 
stakeholders across the U.S.
    The Chairman. Are the states being fairly responsive?
    Dr. Clifford. Absolutely.
    The Chairman. Dr. Meckes and Dr. Hartmann, both of you 
covered this to an extent in your testimony, but if you could 
highlight again any changes that you think would be necessary 
based on your experience, particularly in Minnesota, that 
states need to be doing and prepared for?
    Dr. Hartmann. Mr. Chairman, the most important thing that 
we have all highlighted is that heightened biosecurity. That is 
something that we think is so crucial to this. And to that end, 
Minnesota is going to fund a group of poultry veterinarians who 
are going to go out and visit each of the poultry farms in 
Minnesota and go over their biosecurity plans with them in 
detail so that we are prepared to make sure that we are not 
spreading this disease.
    The Chairman. Dr. Meckes, anything?
    Dr. Meckes. Chairman Rouzer, we are quite fortunate in 
North Carolina in that we have an Emergency Programs Division 
within our Department of Agriculture. They have long served our 
state, as I indicated, in a variety of different disasters, 
from the disease outbreaks, the hurricanes that so frequently 
befall North Carolina, drought several years ago. So they are 
keenly attuned to preparedness activities.
    And as I indicated, our teams worked with the foaming 
machines every month for the last 6 years in preparation for 
what might come to pass. And as a matter of fact, our USDA 
colleague frequently had to fund the use of foam in North 
Carolina when we reported our budget on an annual basis through 
our cooperative agreement.
    So I certainly think that we are well prepared. We are 
looking forward. We are moving toward to be ready to respond 
this fall.
    The Chairman. Dr. Clifford, I know there is some interest 
in the poultry industry to form a first responders team of 
sorts that is already trained to handle these situations and 
can work with government employees to provide the needed 
assistance. Is this something that you all are exploring? Are 
you familiar with this?
    Dr. Clifford. So with regards to the first responders, as 
we prepare for the fall, the first responders have to be able 
to pass a test, a health exam basically, because of the 
personal protective equipment. It is very strenuous work in 
these houses that they are doing, and with that equipment on, 
with the Tyvek suits, with the type of personal protective 
equipment that is necessary in these cases.
    So yes, we are preparing and the people that we will be 
bringing on board, the additional 300 field personnel that will 
be used for this purpose, one of the first things we will do is 
preparing them and training them on that behalf.
    In addition, the contractors that we use, part of that 
contractual agreement is that they will have had personnel 
trained as well prior to any outbreak.
    And we are able to put systems of 300 to 600 people in a 
matter of a few days, and about 1,000 within a week on the 
contracting side. We are also using our National Animal Health 
Emergency Response Corps, which is private veterinarians 
basically willing to do work for them too.
    We are training or have trained a number of them already 
and will continue to do that, but our first priority is to 
making sure our personnel are trained.
    The Chairman. Are you finding that there is any 
communication or logistical obstacle at all here?
    Dr. Clifford. Well, not with this particular issue, per se, 
but, it is a limiting factor. In other words, how many people 
we can get trained and ready by the fall is, and plus how many 
people that we have employed. It has been mentioned; we have 
deployed about 1,100 people during this process on the past 
outbreak, but that is 1,100 people that probably makes up 
probably 200 or 300 individuals and many of them have had 
multiple deployments.
    We have four response teams within USDA APHIS Veterinary 
Services. In a worst-case scenario we are going to be needing 
probably ten response teams to prepare for a worst-case 
scenario and maybe even more.
    The Chairman. Outside the current research that is being 
done on H5N2 and H5N8, what additional research is needed in 
order for the industry and government to combat this virus long 
term? Dr. Swayne.
    Dr. Swayne. Yes. There are other threats around the world 
besides just the H5N8, H5N2. For example, in Mexico, the south, 
there is an ongoing H7N3 outbreak in the central part of the 
country that is a high-path virus. And also throughout a large 
part of the country there is a low-path H5N2. So those are 
continual threats that could enter the U.S. so our laboratory, 
as part of a global effort to control or eradicate high-path AI 
works with the Mexican Government on these and we coordinate 
this research with our partner to the north, Canada.
    On research that is needed, there is a wide variety of 
research that is needed for control programs. Of course, right 
now, we are highlighting having vaccines prepared and ready to 
use, but also there is research in other areas, which is 
maintaining rapid diagnostic tests that are sensitive and 
specific development of DIVA testing for potential use with 
vaccines. That would allow us to identify infected flocks 
within vaccinated populations.
    And if we did find infected flocks that are vaccinated, we 
would have to depopulate those just as if they were 
unvaccinated. And then also studies looking at the way the 
virus is transmitted on and off of farms and how to develop 
mitigation strategies to prevent those transmissions from 
occurring.
    The Chairman. How is USDA working with the World 
Organization for Animal Health to develop a policy favorable to 
vaccine use? What are you hearing there? What has taken place?
    Dr. Clifford. Mr. Chairman, the World Organization for 
Animal Health sets basic international standards on animal 
health issues, such as avian influenza. The policy and the 
standards within the World Organization for Animal Health would 
allow the use of vaccine. It is more the tradition in history 
of the use of vaccine as being seen as potentially unable to 
control a disease.
    And that is what I was referring to in my testimony. It is 
the culture of that that we need to move away from. We have 
what Dr. Swayne has referred to as DIVA strategies, which means 
that we can distinguish between a vaccine strain and a field 
strain virus.
    And it is those types of strategies that would allow us to 
reduce the destruction of animals and be able to utilize more 
the protein. And we need to develop those strategies and 
implement them worldwide.
    The World Organization for Animal Health recognizes that 
today. It is the countries and some of our own regulations that 
are, in my mind, I would say, a little outdated, but we are 
trying to modernize many of those. And such as, right now, 
today, in some of our own regulations, we wouldn't allow 
product to come in, fresh product, or hatching eggs or day-old 
chicks from countries that vaccinate for high-path AI.
    Now, vaccine is a tool. It is a tool that we need to use 
wisely. It is not something you should use consistently and 
continue, because then its effectiveness is dropped. It is kind 
of like with the human flu virus, they change that regularly. 
It is the same thing here. And you would only use it in high-
risk areas and only use it when needed during those high-risk 
times.
    The Chairman. Have any of our top trading partners 
indicated they will be seeking retaliatory trade measures if we 
were to start vaccinating commercial birds?
    Dr. Clifford. We spoke to a number of our members that we 
are trading partners with, and basically what they said was, as 
most of them indicated that still trade with us today and 
regionalize us today, countries like Japan, they would do a 
risk assessment first. They would initially shut us off, do a 
risk assessment. And if the risk they felt was minimal or very 
low, they would reopen the markets. But that risk assessment 
can take months.
    So the plan is, early this fall, actually in September, 
late summer, I will be making trips as well as other members of 
my staff, trips to members of countries around the world to 
explain to them our specific plans and how we would use vaccine 
to see if we can get them to accept that and not shut off 
trade. Because right now, we would be concerned of losing as 
much as $3 billion or $4 billion in trade annually through the 
use of vaccine.
    I would also like to say those many countries, countries 
such as South Korea, countries such as China have shut off the 
entire U.S., and it is not about a vaccine. It is they just 
won't regionalize us. And so those countries we need to 
continue to work on that issue and get them to recognize 
regionalization, which is also well accepted by the OIE, or the 
World Organization for Animal Health.
    The Chairman. That will conclude my questioning for the 
time being.
    Mr. Costa.
    Mr. Costa. Thank you very much, Mr. Chairman.
    Dr. Clifford, just to follow up on your last comment. As 
you know, we are concurrently undergoing negotiations for the 
TPP effort with many of these Asian nations and also with 
Canada, and we have had a problem with Canada on the poultry 
issue specifically.
    One, has the high-path avian influenza impacted Canada, and 
are they treating it in the same fashion? And number two, are 
there any attempts by any of these countries to use this as an 
excuse to invoke non-tariff-like barriers as it relates to our 
ability to export poultry product. As you indicated, it is a 
multibillion dollar industry for the United States, and 
clearly, we want to do the right thing for the right reasons.
    But I remember, in a more recent example, with Mad Cow 
Disease, we saw certain countries use this not based on best 
science but as a excuse, in my view, to invoke barriers, even 
though we were following all the proper phytosanitary 
protocols.
    So could you give me an answer to those two questions. So, 
one, is this taking place in terms of our negotiations vis-a-
vis TPP; and two, how has this impacted Canada? And if so, are 
they treating it appropriately as we are attempting to do?
    Dr. Clifford. Let me first address the question with 
regards to Canada. With Canada and the U.S., we have had a 
longstanding Memorandum of Understanding or actually an 
Agreement. It really shouldn't be referred to as an MOU. It is 
more of an agreement on how we would treat each other relative 
to these types of issues.
    So specifically, on AI, we have had agreement for a number 
of years now where we definitely regionalize. So Canada and the 
U.S. really have set the stage in developing a model for other 
countries to follow. So, yes, Canada treats us very fairly and 
we treat them the same way, and we do this very quickly based 
upon the recognition that we both have similar types of animal 
health systems and the protections of those systems. And so 
that works very, very well.
    And we have actually taken that model in trying to get 
other countries to adopt something very similar with us. And we 
have some discussion, actually, with that, with some of our 
Asian partners as well. With regards to the TPP discussions and 
non-tariff barriers, I think oftentimes sanitary, phytosanitary 
issues are raised to a level that are not based on science.
    Mr. Costa. Correct.
    Dr. Clifford. And we definitely thought that this is the 
case with a number of these countries. There are, though, 
having said that, there are also a number of these countries 
that have regionalized us and have done it in a complementary 
way and have supported us.
    And, in fact, my friend and counterpart in Japan, Dr. 
Toshihiro Kawashima, was under a lot of pressure, I know, to 
shut off the U.S. And he stood with us, and that I much 
appreciated. In fact, he wants to develop some strategies that 
we have with Canada between the U.S. and Japan, something we 
are going to continue to talk about and move forward with.
    Mr. Costa. All right. You might want to provide the 
Subcommittee with more information on that effort. Let me move 
back to the domestic front. What has the Department done with 
the various states to prepare for this fall fly season? And do 
you think we are adequately prepared for the fall fly season?
    Dr. Clifford. I think that we are preparing for that 
season. I think we are a lot more prepared than we were. But I 
also think we will be totally prepared before the fly season 
starts.
    Mr. Costa. And you are talking about regionally, as we talk 
about the Eastern Flyway and----
    Dr. Clifford. I am talking about the entire U.S., sir.
    Mr. Costa. That includes California?
    Dr. Clifford. That includes California, yes, sir. 
Absolutely.
    Mr. Costa. You alluded to in your comments, and, again, we 
all understand it is a multi-billion dollar industry and we 
know a lot of flocks that have had to be eradicated as a result 
of this, a worst case scenario. What is in your mind a worst 
case scenario?
    Dr. Clifford. So we just came through a pretty bad scenario 
of nearly 50 million birds and 211 commercial premises 
affected. In our worst case scenario evaluation, it would be 
500 cases in commercial flocks and----
    Mr. Costa. Give me the number again, how much have we just, 
the number that----
    Dr. Clifford. Two hundred and eleven.
    Mr. Costa. Two hundred and eleven nationwide?
    Dr. Clifford. No. In a worst case--oh, now, today?
    Mr. Costa. Yes.
    Dr. Clifford. We had 211 commercial flocks. We had more 
than that.
    Mr. Costa. Nationwide?
    Dr. Clifford. Nationwide.
    Mr. Costa. And you say 500----
    Dr. Clifford. Five hundred in ten states.
    Mr. Costa. Is a worst case scenario?
    Dr. Clifford. And that is the worst case scenario that we 
are planning based upon some modeling work we did.
    Mr. Costa. All right. Dr. Swayne, as a laboratory director, 
do you believe that what we have done in California is a model 
or applicable elsewhere? Or did we just get lucky?
    Dr. Swayne. California had some very unique situations that 
arose. In this case, there was the entry point of the virus 
through the Pacific Flyway. And studies that we had done in our 
laboratory clearly showed a couple of things.
    One is that virus that came in was highly adapted to 
migratory waterfowl but was not highly adapted to chickens and 
turkeys. So transmission farm to farm was much more difficult. 
And that was to the benefit of California and the farms within 
that region.
    The other thing about this particular scenario, we did some 
high-level molecular analysis. And we could see that to 
California's benefit, that those two commercial flocks and the 
few backyard flocks that were in Washington, Oregon, and 
California were really point-source introductions. The 
waterfowl virus that was introduced into those commercial 
farms, either directly or indirectly. And that was to your 
advantage in that allowed the local officials to identify, 
quarantine, and eliminate those before they could spread to 
other farms.
    This just emphasizes the lessons learned in California to 
other states is that the identification quickly of infections 
in farms and that rapid euthanasia, the 24 hour timeline, and 
rapid disposal is key to keep it from spreading.
    Mr. Costa. To get on top of it as quickly as possible?
    Dr. Swayne. To get on top as quickly as possible. In the 
Midwest----
    Mr. Costa. Acknowledge it, eradicate it, and get rid of it.
    Dr. Clifford. That is exactly right. In the Midwest, 
unfortunately, the virus changed. And they didn't have as much 
time as California did in that the virus in, after the first 
several outbreaks became much better adapted to chickens and 
turkeys, meaning it took a lot less virus to infect flocks. 
And, therefore, the spreading was much more rapid, having farm-
to-farm spread.
    And that is the part that really emphasizes excellent 
biosecurity, early detection, rapid depopulation, and then 
rapid disposal. We can't afford to have infected flocks sitting 
around producing virus, shed in environment. And we also need 
to get them in a proper disposal method to prevent that 
transmission to other farms.
    Mr. Costa. All right. Two final questions, Mr. Chairman, 
and then I will submit the rest as written questions. Dr. 
Swayne, I have been told that the funding for your facility 
falls dramatically short of what you believe or what is 
believed to be, maybe not you, needed for further efforts. Do 
you agree and could you elaborate?
    Dr. Swayne. Yes. I can provide you a little more 
information. Science is essential in developing and 
implementing control and eradication programs for high-path AI. 
And that is what the role of research is. The research that we 
generate and other partners at universities in many of your 
states, as well as the CDC and other organizations, is 
essential in developing control policies that become what is 
used in the field. Those are long-term issues.
    And for our laboratory, over the last 10 years, our 
staffing for avian influenza has declined from 35 to 20 people. 
And that is just the financial reality. Research is a long-term 
process because you have to hire people. They have to be 
trained. And we are all aware of the biosafety issues that we 
have to deal with in laboratories. You have to train these 
people, they have to operate in high-containment labs, work 
with these viruses.
    So, for us, the issue has become long-term permanent 
funding has not kept up with the mission demands. And so, 
therefore----
    Mr. Costa. Could you give us an estimate what is needed? I 
mean, simply replacing those 15 personnel that have been cut 
back, is that a start?
    Dr. Swayne. That is a start. And also we have had, of 
course, a new emphasis to making sure we do all of our research 
safely. And so that is not just replacing researchers, but it 
is adding biosafety officers, animal care, our other issues 
that are all part of the research process. And those are 
permanent funds we need because you have to have the research 
staff. The other issue is facilities----
    Mr. Costa. On that point, Mr. Chairman, I would suggest 
that maybe the Subcommittee considers, if there was some 
interest to submitting a bipartisan letter to the 
Appropriations Committee.
    Obviously, it is going to be a fragmented approach I 
believe again this year as we do our budget. But when they are 
considering the final package later this fall, we might want to 
make a suggestion or a recommendation. But we can consider that 
among ourselves. Go ahead.
    Dr. Swayne. And the second piece is facility issues. And 
Southeast Poultry, our facilities are quite aged. The U.S. 
Department of Agriculture did a critical infrastructure study 
across all facilities in the Department for capital 
improvements. And Southeast Poultry was the number one 
requirement across the whole agency for the last 3 years.
    Mr. Costa. So how close are we or where are we, would you 
estimate, scientifically from developing a vaccine?
    Dr. Swayne. So, yes, we are near completing the first phase 
of the research data. We are now in discussions with APHIS on 
the analysis of this data. So Dr. Clifford's office and my 
office are, have started those discussions. We have started the 
statistical analysis of that data. So next week we will have a 
meeting to discuss the very specifics of what that data means. 
And then we will have additional studies that we are working 
with some university partners because that is the lab data we 
are generating and then we have to work with the field as far 
as how do you possibly implement an effective program or not--
--
    Mr. Costa. From a layperson's perspective or for a poultry 
farmer who may be facing this or for a local region where you 
have a television station that is covering this and they are 
making the report--and I see that Dr. Clifford, you are anxious 
here to comment--I mean we have to, when these things happen, 
we have to respond to the public. And so where are we?
    Dr. Clifford. Congressman, we will have vaccine 
availability in our stockpile for the migration period. To Dr. 
Swayne's point, there are several companies actually, besides 
the research that they are doing, there are several companies 
that have vaccines that they are prepared to have available.
    So we will be going out with a request for a proposal 
specifically to be able to stockpile vaccines. And some of 
these will come in in different levels and stages throughout 
this period.
    Mr. Costa. For this fall?
    Dr. Clifford. For this fall and spring.
    Mr. Costa. Okay. Well, thank you, Mr. Chairman, for this 
very important Subcommittee hearing. And I want to thank my 
Ranking Member, Congressman Peterson, who is always on top of 
these issues, and the rest of the Committee Members. Certainly 
we want to cooperate in every way possible to provide support 
for our nation's poultry industry.
    The Chairman. Mr. Newhouse.
    Mr. Newhouse. Thank you, Mr. Chairman, especially for 
holding this hearing on this important topic. This is 
certainly, seems to me, one of those things that is an all 
hands on deck kind of situation. And I appreciate the focus on 
it. I appreciate the panel being here this morning discussing 
these issues.
    As a former director of my state agency, my agriculture 
department, I certainly appreciate the presence of our State 
Veterinarians here and your approach to helping us learn and be 
prepared for whatever happens into the future. It seems to me 
that when the next outbreak occurs, there will be no time for 
hand-wringing but positive action, quick action is what is key. 
Certainly, in my experience, I appreciate Dr. Clifford's 
valuable help in dealing with animal health issues in my state. 
And we are very appreciative of you being here this morning. I 
love this no time restraint. That is very valuable.
    The Chairman. Well, be careful because we all may be in 
trouble by the time this is over.
    Mr. Newhouse. No, I appreciate the opportunity to delve 
into this subject. It is very important to all of us. Just a 
couple questions to begin with, Dr. Clifford, concerning the 
National Animal Health Laboratory Network. My understanding is 
that the funding, Federal funding currently supplies 
approximately five percent of the costs of operating the state 
lab system. The same system, though, is critical to detection, 
response, recovery from disease outbreaks similar to what we 
have just experienced.
    So for this year, can you tell us how the initial cases in 
any given state were detected and by whom? And then to follow 
up on that question, as part of this year's outbreak, the Iowa 
lab has been open I believe 24/7, running multiple shifts, 
keeping up with all the demands for testing and so forth. Do 
the labs, do you think, have the support they need to sustain 
this type of workload and this effort?
    Dr. Clifford. Thanks, Congressman, for that question. The 
National Animal Health Laboratory Network is an extremely 
important part of our infrastructure in the United States to be 
able to address not just this issue, but a lot of animal health 
issues. As you are probably well aware, there was language in 
the farm bill that addressed this issue for the NAHLN 
laboratories. But that did not come with funding. The NAHLN 
laboratories throughout this country are at different levels of 
funding, but we definitely need resources for those 
laboratories to be able to do the work that we so urgently need 
them to do and be prepared.
    To speak to a specific lab in a specific state, we would 
have to probably defer more to the states themselves and the 
labs themselves to address those specifically. But, yes, 
funding is needed for those laboratories. And we do the best we 
can with the funding we have to provide them resources. I know 
that the House markup had additional resources for the NAHLN 
laboratories which was very welcomed and very much appreciated.
    So as far as who does the diagnosis, it will vary in any 
particular location or state. But I can tell you a lot of these 
state NAHLN laboratories are very much involved in all this 
testing. And I know, for example, in Minnesota and Iowa, during 
this outbreak, there has been a huge effort there with regards 
to putting and having personnel available to do around-the-
clock testing. We pay based upon or we basically destroy 
animals, depopulate these animals based on presumptive 
positives. And those presumptive positives are done by the 
NAHLN laboratories.
    Mr. Newhouse. Another question, Dr. Clifford, and you 
touched on this in previous questioning, concerning trade and 
economic issues and the steps that APHIS and USDA are taking as 
far as negotiating with foreign governments about vaccines and 
the potential that they hold as far as the impacts that that 
could have on poultry exports. But, on the other hand, there is 
interest in grocery and food producers industries about the 
flexibility with imports of poultry products, egg imports 
specifically, due to the many shortages that we are 
experiencing. Could you talk about any progress on that front?
    Dr. Clifford. Actually we have had shipments from the 
European Union. And also we have had recent shipments of eggs 
from layer facilities from Mexico into the U.S. now to help 
address some of the shortages that we have.
    And I know of two countries right now, one is Mexico, the 
other is the Netherlands. And I am not sure if we are bringing 
in from other countries from the European Union or not, right 
off the top of my head. But that is something I can find out. 
So that has definitively and will definitely continue to help 
us be able to address some of the shortages we have in the U.S.
    Mr. Newhouse. Thank you. Dr. Swayne, Mr. Costa asked you 
some questions about the production of viable vaccination. So I 
appreciate your comments there about steps in this process to 
help stop the spread and eradicate the virus.
    I hate to think about the sky is falling kind of scenario. 
But based on your observations, when you are talking about the 
spread of this disease and the additional or potential risk to 
poultry operations around the world, specifically in other 
countries, Central America, South America, certainly through 
Europe and Asia, these flyways, obviously, go back and forth 
every year. What are we looking at in the future here? Are we 
just keeping our fingers in the dikes, so to speak, in trying 
to control something that is way bigger than us?
    Dr. Swayne. We can look back at data generated in Asia, for 
example, from our Korean colleagues. So they have had 2 years 
of incursions from migratory waterfowl into their country 
bringing H5N8 high-path virus in. The worst year was actually 
in the fall of 2013, winter 2014. The second year it reoccurred 
but it was not as severe. The lesson, this has also been 
repeated in the last 15 years, where you would have an 
incursion with migratory waterfowl. You would have a real 
severe year, then it gets mild, then it kind of disappears in 
waterfowl, and it is only propagated in the farming system.
    For us, the advantage we are at this point in the U.S. is 
all the surveillance evidence would suggest that we don't have 
the virus in current farms. So our real risk is what would come 
back through the migratory flyways. And that emphasizes the 
role of colleagues in wildlife health, including the USGS, USDA 
Wildlife Services, and surveillance programs that are being set 
up across southern Canada, northern U.S., even down the 
Atlantic Flyway coast trying to get a handle on is the virus in 
birds that are migrating or not. And if the virus is identified 
in particular flyways in geographic areas, then there should be 
information disseminated within those geographic areas for 
farmers to be extra vigilant in biosecurity and to very quickly 
report any abnormal clinical signs that might occur.
    One thing that is really to our advantage is that the 
flyways we have in North America do generally go north and 
south in four different flyways. But the viruses don't readily 
go into Central and South America from us, nor from their 
viruses coming north. The mixing is much smaller, it is really 
a small area with a very few number of species that cover 
those, across both of our hemispheres. That is to our 
advantage, and it is also to their advantage. It is sort of a 
critical point, is if we can control outbreaks in poultry 
populations by preventing those, we reduce the likelihood of 
poultry infections and that would be a way of amplifying it.
    And if we can do that, hopefully, the virus will self burn 
out in wildlife populations. But surveillance by USDA Wildlife 
Services, USGS, and university partners is critical to find the 
virus.
    Mr. Newhouse. Thank you. Dr. Clifford, going back to the 
authorization for the National Lab Network, what beyond 
diagnostic capabilities should we be considering to enhance 
this disease prevention?
    Dr. Clifford. Congressman, specifically to the NAHLNs 
themselves?
    Mr. Newhouse. Yes.
    Dr. Clifford. I think probably making sure that we have the 
proper infrastructure within those laboratories to deal with 
diseases that are zoonotic and have zoonotic potential.
    Mr. Newhouse. That would be your priority? Okay. Then I 
have a question I would like to ask--Mr. Kelly from Mississippi 
had to leave early. He had a flight to catch.
    Mr. Costa. Would the gentleman yield?
    Mr. Newhouse. Oh, Mr. Costa. Please.
    Mr. Costa. Just for us lay people here, what is zoonotic?
    Dr. Clifford. It is diseases that can cross from animals to 
people.
    Mr. Costa. Okay. Got you. Thank you.
    Dr. Clifford. Like AI. This one doesn't, thank goodness 
but----
    Mr. Newhouse. Good question. Mr. Kelly has an extensive 
broiler industry in his State of Mississippi and is concerned 
about, apparently there are no infected birds, at least that 
have been detected there yet. So his question was why? Why do 
you think broilers have not yet been affected, if anybody has 
an opinion on that? Maybe they just do a great job in 
Mississippi as far as control.
    Dr. Meckes. Congressman, it is age related. The broilers 
typically go to market in 56 days. And most of the birds that 
have been infected with this virus have been older than that. 
As a matter of fact, one of the opportunities for managing the 
virus has been the early marketing of birds, particularly 
turkeys. I know in parts of the Midwest, some of the turkeys 
have gone to market much sooner than they would under ordinary 
circumstances. At least those are our thoughts in North 
Carolina. I will defer to my USDA colleagues and Dr. Hartmann.
    Dr. Hartmann. Well, Congressman, it is interesting to note 
that it was, that did happen in Minnesota. We had broilers 
right in the heart of our turkey growing area where there was 
infection. And the broilers never were affected at all. I think 
that chickens are a little harder to be infected, it takes a 
higher dose, and they don't transmit it as much. But also the 
age factor was there as well.
    Dr. Swayne. If I might make just a quick comment. There are 
probably two factors that have impacted the lack of broiler 
infections.
    One is that there appears to be from field information an 
age susceptibility. So older birds are more susceptible than 
younger birds. And broilers are all very young, so they are 
less susceptible.
    The second thing is that in farm operations, there are 
fewer entry point on a broiler farm because generally most of 
those have a family taking care of them and feed trucks only 
come usually at the third or fourth week of grow out. So there 
are very few points of entry versus if you look at a layer 
farm, where you have very large farms, lots of people going on 
lots of farms, lots of trucks, vehicles, equipment that may be 
shared, turkey farms where the birds are on the ground longer, 
you have a greater chance for moving a virus onto a farm that 
is a turkey or a layer farm than you do a broiler farm.
    Mr. Newhouse. Well, thank you. And thank you, Mr. Chairman. 
I will submit my other questions for the record. But I 
appreciate all your input.
    The Chairman. Mr. Peterson.
    Mr. Peterson. Thank you, Mr. Chairman. I have a series of 
questions here that are from my producers back in Minnesota, 
things that have come up.
    Dr. Clifford, one of the big concerns that growers have is 
the depopulation. I think you know that. You have heard it from 
them. Talking about other kinds of methods that could be used 
the next time around that would speed up this depopulation 
process and I guess maybe for Dr. Hartmann too, you both have 
talked about a goal of depopulation of 24 hours. And I can see 
that the turkey operation is much simpler. But on the layer 
operations, which some of these big layer operations, they have 
two or three million birds, it took some of them 3 weeks to 
depopulate. And during that time, the virus is pluming out of 
the building and so forth, potentially causing other kinds of 
problems.
    So I guess the question is how can we, how are we going to 
get to a 24 hour depopulation? Or can we even accomplish that.
    Dr. Hartmann. Congressman, we are exploring a way that they 
have depopulated in Canada. And they are using CO2 
gas in the whole barn. I sent one of my employees up to a 
demonstration that they had. We are hoping that that will be a 
method that we could use in our layer barns.
    One of the issues that I have been told may make it not 
available in the United States or, at least, in Minnesota is 
that our layer operations are five cages high. In Canada, they 
are three cages high. So it is hard to get the CO2 
up to the top level. But we are still exploring that.
    And the only other method that we know of is to shut the 
ventilation down in a barn and heat it up. And that is not an, 
at this point, considered an acceptable manner of depopulation.
    Mr. Peterson. But if you let the birds die over 3 weeks, I 
am not sure that is very acceptable either. None of these 
options are very good.
    Dr. Hartmann. Right.
    Mr. Peterson. Dr. Clifford?
    Dr. Clifford. Thanks, Congressman Peterson. So basically 
our goal is to get the birds dead as quickly as possible. And 
24 hours is our goal. To do that, we are looking at several 
options. There are some other things that we are looking at as 
well, besides the CO2. And I have forgotten the 
particular product, but we are looking at another product.
    We care about the humane treatment of birds and putting 
birds down as humanely as possible with regards to euthanasia. 
There is a definite distinction between euthanizing a bird 
versus mass depopulation. And so all these things have to be 
considered with regards to the overall situation, the concern 
for both animal health and human health. We need to basically 
look at all of these tools as we go forward and try to get the 
birds killed as quickly as possible, as humanely as possible, 
without further spread of the virus.
    And as you indicated, Congressman, it is important to get 
that done within 24 hours. If we don't and we continue to have 
more birds dying from the virus, then there is more virus in 
the environment and more spread. And we know this to be a fact.
    Mr. Peterson. Thank you. Also in this regard, I have had 
concerns about disposal in the layer operations, where they 
don't have room in the barns, and so they have been composting 
them outside which people are concerned that this potentially 
would spread the virus as well.
    So I guess one of the things you are looking at, and maybe 
Dr. Hartmann, you know about this, that there are some kind of 
bio bags that they are using to try to put them in the 
landfills. But there hasn't been agreements with the landfills 
and so forth, and so that slowed that process down. Where is 
that at? Is there going to be a way to deal with these layer 
operations without doing this outside if we have another 
outbreak?
    Dr. Hartmann. Congressman, I think the key here is, and we 
had one layer operation that did this, is if you can depopulate 
that quickly, within 24 hours of a diagnosis, the composting 
outside isn't as big a concern because you don't have a lot of 
virus. You have a very, you maybe have in a two million bird 
operation, you maybe have 50 dead birds that have virus. The 
rest don't.
    The key to not spreading the virus that way is you can 
continue to compost outside, but you need to catch the disease 
very quickly. And you need to depopulate within 24 hours.
    Mr. Costa. Would the gentleman yield just for a point of 
clarification?
    Mr. Peterson. Yes.
    Mr. Costa. I am trying to understand the pathology on this 
and how the bacteria, these are unartful terms from a lay 
person again, but the shelf life of the organism that is living 
in this high-path influenza, from the time it is detected, from 
the time the flock is terminated to the disposal, does that 
bacteria, once the bird is no longer alive, does it still live 
on until the time it is buried?
    Dr. Hartmann. Yes. It does live on. And I might defer to 
Dr. Swayne to talk about that.
    Mr. Costa. So that is an important step then. I am just 
trying to understand this better.
    Dr. Swayne. In this process, I think the critical issue 
that has been emphasized is that the quicker you can stop the 
birds from living, that means you stop producing more of this 
virus. And the influenza virus does not keep growing after the 
body is dead, after the carcass is produced.
    Whereas in bacteria, Salmonella, et cetera, is that the 
bacteria can grow after you remove it from the carcass. But the 
virus, the peak amount of virus is when the birds are alive. So 
if you can euthanize, depopulate those birds, they stop 
producing virus. And then over time, that virus is inactivated. 
And it is very time and temperature dependent.
    So composting is an excellent way to dispose of the carcass 
and kill that virus, deactivate that virus. Because the 
composting process has microbes that generates heat. And that 
heat kills, inactivates that virus, and also digests that 
virus. So that the compost itself is completely innocuous other 
than it has nutrients that have value and could be land 
applied.
    Mr. Costa. So it is not just the euthanasia but it is 
quickly burying or composting the carcasses?
    Dr. Swayne. Right. Because if you just leave the virus 
sitting in the environment, it can be tracked on people's shoes 
or clothes. If it is on equipment moving farm to farm, you can 
track it that way.
    Mr. Costa. Yes, I have heard that is possible. I thank the 
gentleman for yielding.
    Mr. Peterson. Thank you. The other related issue that I 
just heard about a couple days ago, in some of these layer 
operations, it has been a real problem cleaning it up. With, 
the belts and all of this sort of thing, it is a big problem.
    And so this particular grower had heard about the potential 
of having a 120 day period that would change the way, you 
wouldn't have to go in and clean everything out, that the 120 
day period would be, would potentially work, is that the case?
    Dr. Clifford. Congressman Peterson, yes, it is. We are 
looking at that and evaluating that, as well as maybe trying to 
look at heating the buildings up during that process in order 
to reduce the amount of cleaning and disinfection that has to 
be done. Because our primary goal here is not to clean the 
building, per se, it is to destroy the virus.
    Mr. Peterson. Kill the virus, yes.
    Dr. Clifford. So we are looking at those methods. And we 
have had discussions with University of Minnesota researchers 
as well as Dr. Swayne and his folks about that. And we are 
going to continue to try to evaluate that.
    So it is one option that we are definitely looking at. And, 
hopefully, it will work. Because, to me, it would save and 
reduce a lot of work and a lot of resources that are currently 
having to be spent to clean these houses up.
    Mr. Peterson. And this particular producer said that he is 
probably going to be out 120 days anyway by the time he goes 
through all this process.
    Dr. Clifford. Right.
    Mr. Peterson. So it would be a lot cheaper for everybody.
    Dr. Clifford. Correct.
    Mr. Peterson. The other thing, as I mentioned in my opening 
statement, is there is a lot of concern about all the paperwork 
that is being required. It is the Federal Government so I 
understand that. But as we move forward, are you looking at 
ways to try to streamline this?
    Are you looking at things like standardizing these payments 
based on the square footage of the barns or something, so that 
you wouldn't have to have 80 pages of forms? And if you did 
something like that, you might be able to actually lower the 
amount that is paid. You would have more competition, people 
competing to do it. Are you looking at that?
    Dr. Clifford. So, Congressman Peterson, there are really 
three different things we are talking about here. One is 
indemnification. That process has and continues to be 
simplified. It is not 70 to 80 pages long with regards to the 
indemnity part.
    Mr. Peterson. I should have mentioned, it is not----
    Dr. Clifford. It is the flock plan.
    Mr. Peterson. Right.
    Dr. Clifford. And it is the other document that they need 
to sign that deals with the C&D. That document can be very, 
very extensive and long. We hope to definitely simplify that. 
And I don't buy into the fact because we are the Federal 
Government it should be that long and complicated.
    Mr. Peterson. That is good.
    Dr. Clifford. In fact, I believe simplification is much 
better and oftentimes better understood. It is kind of like 
having a biosecurity plan that thick that nobody reads versus 
having a sheet of paper or two that somebody does read.
    I think we can simplify this. One of the things that we are 
doing with the industry in the states on this is looking at 
maybe a square foot cost or a house cost with that and 
basically allowing the producers to handle that themselves.
    Mr. Peterson. There has been this discussion, the Secretary 
alluded to it a couple of times, about having an insurance 
system instead of the indemnification. I have some concerns 
about that. The indemnification works pretty well because it 
creates the incentive for people to find out as soon as they 
can whether they have the virus and you can get in there and 
depopulate quickly. I think it has worked pretty well.
    And I have a real, I don't see how you can make the 
insurance system work. Because you are going to substitute 
APHIS employees for insurance companies it seems like if you 
ended up doing that. There might be a role for insurance maybe 
in the business interruption part of it. But the 
indemnification, that part of it, I don't know that we want to 
change that to some other kind of system because I think it is, 
I don't know what you think about that but----
    Dr. Clifford. Congressman, I am very much a believer in 
indemnification. In fact, I am not sure that Secretary Vilsack 
believes----
    Mr. Peterson. Well, and I should clarify because it was 
reported after he had the oversight hearing here that he was 
pushing an insurance----
    Dr. Clifford. Yes.
    Mr. Peterson. But I don't think that is what he said.
    Dr. Clifford. I think that is more for the downtime issues.
    Mr. Peterson. Right. And that is not what he said. But the 
impression was, and some people have talked about changing the 
system and trying to have some, have this be like the Livestock 
Disaster Program or have crop insurance, which the crop 
insurance companies have said there is no way to underwrite 
this. So they are not really interested.
    So I just think it is good that we clarify this because it 
has been reported a couple times, including yesterday, from 
that Des Moines thing that said the Secretary was pushing 
insurance. Well, I don't think he really is in terms of what 
people think about this.
    Dr. Clifford. Right. Let me make one comment about 
indemnity. If you look at the countries around the world that 
do a good job of controlling disease, they pay indemnity. If 
you look at the countries that don't, they do not have 
indemnification.
    Mr. Peterson. Right. So, Dr. Hartmann, first of all, I want 
to have you, compliment you, your folks there and also our 
Governor and legislature for getting on the ball, setting up 
that emergency center. I think it was part of why we had a good 
response in Minnesota. And so you guys did an excellent job 
responding as best as you could.
    This issue of the consistent case manager, are you able to 
augment what the USDA does in terms of personnel so we can have 
a situation where these case managers can stay with the 
operation the whole time and not be shifted every week.
    Dr. Hartmann. Congressman, at one time, we had to manage 
110 sites. And when we had to do that, Minnesota didn't have 
the personnel. So we were relying on USDA employees as well. 
And they rotate into Minnesota for 3 weeks at a time, and then 
they rotate out. And that was the reason for the inconsistency 
in case managers. We are getting down now to the point where 
most of, we are about 50/50, Minnesota case managers and USDA 
case managers. So we continue to improve on that.
    But it is something that I have heard before too. I heard 
somebody tell me that they had 12 different case managers. And 
that is not good because some of them tell, they get a little 
bit different story from everybody that comes in. So it is 
something that is of great concern to us. And we are certainly 
moving in the direction of having all Minnesota people working 
on it because then they can stay with the person the whole 
time.
    Mr. Peterson. Dr. Clifford?
    Dr. Clifford. Congressman, I agree too. And we are working 
to this fall and winter migration period, that if we do have 
those case outbreaks, that we want to try our best to provide 
one case manager per producer.
    So having said that, a lot of this is because of the 
rotation of people. It is hard to take somebody away from their 
home for 10, 12 weeks. That is really not fair to them as 
individuals. So we are working on ways that we can do this a 
lot better.
    Mr. Peterson. Thank you. And I appreciate that. Dr. 
Hartmann, one of the other concerns we had when this was really 
going was getting these flocks tested and people having to 
drive to Minneapolis or some of them drove to South Dakota.
    Where is the situation of trying to beef up, well, move 
some of the testing to Willmar? Is that being considered? Is 
that a possibility? It would make a much better situation, it 
would have been if we would have had that availability this 
time.
    Dr. Hartmann. Congressman, yes, the Minnesota Legislature 
dealt with that and the Governor signed a bill for $8.5 million 
for renovation of our laboratory in Willmar, to provide space 
and the technology to do the PCR test out there. I was very 
encouraged, they had put it on the fast track, and they said it 
would be done by February. I just got a note that the State of 
Minnesota slowed the process down. And I don't understand 
exactly the mechanism of that. But instead of February, now 
they are talking about next summer being done.
    So anything you could do to encourage that move along 
quicker would be appreciated. But that was the pinch point. And 
we had to hire a courier service to get the samples from out in 
west central Minnesota to St. Paul. And it cost a lot of money.
    Mr. Peterson. Yes. And I went through the lab in St. Paul. 
They had a problem keeping up when we had so many potential 
positives out there. And even with the situation there, I mean 
once they got the thing into the lab, they still had a back-up 
there sometimes.
    Dr. Hartmann. Yes. And they did get help from, some other 
states sent some technicians to Minnesota. And that helped. And 
then our laboratory hired three new technicians too. So one of 
the issues was the timeliness of it. They were working nights 
and weekends, which laboratory technicians aren't used to 
doing. We are used to doing that. So we are going to have a 
meeting with the University of Minnesota to talk about that 
before the fall.
    Mr. Peterson. Thank you. And last, I want to focus a little 
on this vaccine issue. We appreciate you saying that you are 
going to be commercializing this, stockpiling it. Did I 
understand you to say that you are going to do it even if it is 
not 100 percent?
    That you are going to stockpile vaccine that is not a 100 
percent? I thought that you were wanting to have the vaccine be 
100 percent before you----
    Dr. Clifford. Well, let me state it like this. We are going 
to stockpile vaccine. We want the best vaccine possible that 
matches best with this particular virus. So it doesn't mean 
that vaccines that maybe don't match up can't be effective in 
helping build immunity within the birds. It can be.
    Mr. Peterson. So you might use more than one in 
combination?
    Dr. Clifford. It might be a combination of those. Dr. 
Swayne could probably give you----
    Mr. Peterson. Right. I was going to ask, I know you can't, 
but you have 100 percent positive now on the chickens? Is that, 
as I understand, you have a vaccine that tested 100 percent 
positive?
    Dr. Swayne. I can just give you a brief rundown. We are 
doing multiple experiments, some using what we call an 
inactivated vaccine that we have made from a modified virus 
that is an outbreak virus.
    And that virus vaccine, as was reported by the Secretary 
last week, in chickens we can prevent morality, completely 
prevent mortality in chickens. And that study also is being 
done in turkeys. And we will have that data available next 
week.
    Mr. Peterson. So it is going to be next week that we will 
know if we get the similar thing out of----
    Dr. Swayne. The data will be available to APHIS. And we 
have to have discussion. The other issue is not just looking at 
an experimental setting of does this vaccine protect birds in a 
laboratory, but we have to then take the vaccines and say how 
can you use them in the field. There are different age of 
birds, there are different types of birds, there are different 
production scenarios.
    So the other part, we call this vaccination effectiveness, 
it is how can you use vaccines in combination in the field. And 
the experience that we have working around the world in 
countries like Vietnam, Indonesia, China, et cetera, is that 
really to have an effective program in the field, you have to 
have a minimum of two different vaccinations separated by 3 
weeks. So that makes it a little more difficult logistically in 
that you have to be able to in an economic way give it at least 
twice. And if you have birds that are on the ground longer than 
6 months, you probably need to give a booster.
    So, for example, breeders and layers may have to have a 
booster in their lifetime. And those are researchable questions 
that are not just Southeast Poultry questions. These are 
questions that we are working with university partners and 
negotiating with them in helping us do some of these studies 
that would use commercially produced birds under commercial 
settings in an experimental protocol that we can control to 
tell us how effective or how we can effectively use vaccines in 
a targeted way.
    Just one last digression, if you look globally at who has 
used vaccines for high-path IA, the countries that have 
eradicated most quickly have been the countries that have the 
best veterinary services in their country, that is Federal and 
state and county level veterinary services and excellent 
poultry veterinarians. We have that in the U.S. We have one 
thing in our favor.
    The second thing is if a vaccination program is used, it is 
not a nationwide vaccination for everything. It is a targeted 
vaccination, surgical to the highest risk and the highest risk 
areas. So it is not everybody. It is who needs it the most and 
has the highest risk.
    Mr. Peterson. Yes. And that goes to my final question and 
that is on this trade issue. My people, and we had this 
discussion, they are very pleased that you are going to be 
stockpiling. And they see as having it available as a positive 
situation. They understand the practicalities of the trade 
situation and the pushback from some folks in the industry.
    But in our part of the world, I have talked to the chicken 
people and the turkey people, they think that in our part of 
the world, the vaccine, they would give up their trade if they 
can get the vaccine in the Midwest from what I am hearing.
    So when you are talking to these other countries, is part 
of the discussion whether it would be possible to kind of do it 
in a targeted area and make that less of a trade issue, make it 
easier to get this done.
    Dr. Clifford. That is the idea. And to Dr. Swayne's point 
and the point I also made earlier, it is using it in targeted 
areas that are of higher risk.
    Mr. Peterson. Is that how you are----
    Dr. Clifford. And Minnesota is, as Dr. Hartmann said the 
Land of 10,000 Lakes, there is a lot of waterfowl. So you 
certainly probably meet that criteria. So that is the idea is 
to try to get them to accept that and not shut off the entire 
U.S.
    Mr. Peterson. And is that the discussions that are going on 
with these other countries now?
    Dr. Clifford. That is the discussion, yes, that we are 
having with them. That is the discussion. With my trip to Asia, 
that will be in September, I am going to be visiting five 
countries and talking to them about that, but also visiting 
countries like China, just to try to get our markets reopened. 
And so we are also going to be going to many other countries in 
Europe and in Africa, as well as the Americas.
    Mr. Peterson. Thank you. And, again, I want to thank you, 
Dr. Clifford, Dr. Swayne, Dr. Hartmann, and you haven't been on 
the frontline yet, Dr. Meckes, and hopefully you won't be.
    But as I said, things haven't been perfect. But you have 
responded when we have had concerns. And we appreciate it. And 
also I thank the Secretary and your people, I talked to a 
number of your folks who were at the Willmar emergency center 
and they were from Maine and Oklahoma and all over the place. 
And they were away from their families and working 7 days a 
week. And so it is a tremendous effort. And we appreciate it 
and look forward to working with all of you to get through this 
fall.
    Hopefully, we won't have a similar situation. But if it 
does rear up, hopefully, we will have a much better response 
ready to go. So thank you all very much for what you have done. 
I yield back.
    The Chairman. Thank, Mr. Peterson. Since I am the last one 
left and the Chairman of the Subcommittee, I suppose I have the 
right to ask one more question, if my staff will allow me. 
Otherwise, I might be fired perhaps.
    But sitting here, thinking about the testimony and the 
questions back and forth, it occurred to me that we can get 
this absolutely 100 percent correct, but we also have a growing 
market, what some may call free-range, organic, locally grown, 
locally produced. What is the nature of our outreach to the 
very small mom and pop, organically grown, locally produced?
    It strikes me that we can get it completely right on the 
commercial side, but we may have a gap here with a lot of very 
small, individual producers throughout all of our states. I am 
just curious what thought or plan of action has been 
contemplated there.
    Dr. Clifford. So thank you, Mr. Chairman. We have been 
doing outreach in this area for years. We have a very active, 
what we refer to as Biosecurity for the Birds campaign that 
really targets this sector of the industry.
    So we also reach out through the poultry associations and 
groups and through the National Poultry Improvement Plan and 
many other groups to reach this sector of the industry. And I 
know that the states, and Dr. Meckes and Dr. Hartmann can 
probably add to this, the states do a lot, as well, with 
outreach to backyard type birds or organic or birds that are 
just raised outdoors. So there is quite a bit of outreach 
there.
    The Chairman. Dr. Meckes.
    Dr. Meckes. Chairman Rouzer, we are in the process of 
seeking to discern the location of all of our backyard flocks. 
We have about 4,000 flocks, small backyard flocks that we are 
aware of. And we have asked individuals within the State of 
North Carolina that own poultry to please contact our office 
and register with them.
    Our desire is to be able to adequately convey information 
to them in the event of a disease outbreak. And I liken it to 
the red sticker in your children's window for the fireman to 
see. If the fire comes, we want to know where the birds are. 
And that way we will be able to adequately convey the needed 
information to the individual bird owners and the smaller flock 
owners throughout the State of North Carolina.
    The Chairman. Mr. Peterson.
    Mr. Peterson. This age of instant communication, we have an 
e-mail in or a message from one of our growers that is watching 
the hearing. They have the impression because of the discussion 
we had about you going over to the Far East in September, that 
USDA wasn't doing anything now.
    So the question was why isn't USDA talking to our trading 
partners now? And as I understand it, you are. The Secretary 
has told me that you have been for some time already. Is that 
correct?
    Dr. Clifford. Yes, we are. We just had an international 
meeting in Baltimore. And a lot of our trading partners were 
invited to that and were present. And this was a topic that was 
discussed.
    Mr. Peterson. I just want to clarify. You are not the only 
person at the USDA. There are a lot of other folks.
    Dr. Clifford. No, sir. I am not. In fact, I get a lot of 
kudos for the things that are really done by a lot of others. 
So we much appreciate it. And I certainly appreciate----
    Mr. Peterson. So you have, the Department has been on 
this----
    Dr. Clifford. Yes, sir.
    Mr. Peterson.--ever since we started talking about----
    Dr. Clifford. Yes, sir. We are on this.
    Mr. Peterson. Thank you. Thank you, Mr. Chairman.
    The Chairman. Thank you, Mr. Peterson. I would like to, 
again, thank all of our witnesses for appearing before the 
Subcommittee today. I think this has been very helpful and 
informative. And those of you who have traveled longer 
distances than other, particularly thank you for your time and 
your effort to be here.
    Under the rules of the Committee, the record of today's 
hearing will remain open for 10 calendar days to receive 
additional material and supplementary written responses from 
the witnesses to any questions posed by a Member. This 
Subcommittee on Livestock and Foreign Agriculture hearing is 
now adjourned.
    [Whereupon, at 10:18 a.m., the Subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
   Submitted Reports by Hon. Collin C. Peterson, a Representative in 
                        Congress from Minnesota
An Emergency Economic Impact Analysis
University of Minnesota Extension
Economic Impact of the Avian Flu, Updated 7/10/2015
July 16, 2015

  To: Mary Knigge, House Agriculture Committee
  From: Brigid Tuck, Senior Economic Analyst
  University of Minnesota Extension Center for Community Vitality

RE: Economic Impact of the Avian Flu, State of Minnesota
    In May of 2015, Extension released findings from an economic impact 
analysis, using IMPLAN modeling, of the avian flu crisis in Minnesota. 
We recently updated these numbers and are providing them to you to 
inform proceedings of the House Agriculture Committee.
    As of July 10, 2015, lost turkey and egg production and processing 
as a result of the avian influenza have decreased output in Minnesota's 
economy by an estimated $647.2 million. This includes $171.7 million of 
lost wages, salaries, and benefits. In addition, 2,500 jobs have been 
affected in some way by the avian influenza. These figures include 
losses of current birds and account for the fact that producers cannot 
immediately restock barns and therefore lose additional income. They 
also take into account the time it takes to bring layers up to full 
production of eggs.
    The value of lost output in Minnesota's economy has more than 
doubled since the report was published in May. There are two primary 
reasons why the numbers have increased. First, the number of birds 
affected continued to rise through the month of May. The initial report 
was based on 5.7 million birds being affected. As of July 10, the 
number of birds had risen to over 9.0 million. Second, the new analysis 
accounts for lost production experienced by producers while their barns 
were idled during the clean-up and disinfecting stages.
    Top industries affected by lost production and processing related 
to avian influenza include wholesale trade and truck transportation, as 
shown in the chart below. There is also a feedback loop that occurs as 
demand for new poults and chicks temporarily declines during the 
outbreak. We would expect those impacts to mitigate as producers begin 
to restock their barns. The chart also demonstrates that the impacts 
are widespread and affect a variety of businesses including 
agriculture, retail trade, restaurants, veterinarians, and corporate 
headquarters (management of companies).
Top Industries Affected by Lost Poultry and Egg Production and 
        Processing Due to Avian Influenza, Minnesota, July 2015
        
        
          2015 Regents of the University of 
        Minnesota. All rights reserved. University of Minnesota 
        Extension is an equal opportunity educator and employer. In 
        accordance with the Americans with Disabilities Act, this 
        material is available in alternative formats upon request. 
        Direct requests to 612-625-8233. Printed on recycled and 
        recyclable paper with at least ten percent post-consumer waste 
        material.
                                 ______
                                 
Economic Emergency Program
University of Minnesota Extension
Impact of Poultry and Egg Production Losses and Poultry Processing 
        Losses Due to the Avian Influenza
Executive Summary
    In late winter 2015, avian influenza was discovered in a flock of 
commercial turkeys in Minnesota. After the first flock was infected, 
the virus spread rapidly. As of May 11, 2015, the disease has been 
confirmed at 85 turkey and chicken farms in 21 Minnesota counties, 
resulting in the direct loss of nearly 5.7 million birds in the 
state.\1\ Approximately nine percent of all turkeys and 14 percent of 
all laying chickens have been affected by the outbreak.\2\ In 2014, the 
value of turkey production in Minnesota was $866.2 million. The value 
of egg production was $265.9 million. Applying those figures to 2015, 
as of May 11, an estimated $113.6 million of poultry production has 
been lost in Minnesota. This does not include the value of future lost 
production (due to the further spread of the disease or lost production 
due to barn disinfection and cleaning).
---------------------------------------------------------------------------
    \1\ Source: Minnesota Board of Animal Health, https://
www.bah.state.mn.us/.
    \2\ Source: Minnesota Agricultural Statistics Service.
---------------------------------------------------------------------------
    Farms with the disease lose not only the infected birds, but the 
rest of their flocks on the same farm as well. Poultry and egg barns 
need to be disinfected over a period of time, meaning barns will sit 
empty, further decreasing poultry and egg production.
    Clearly, these losses are affecting turkey, chicken, and egg 
producers. However, producers are not the only businesses to be 
affected by this incident. With fewer birds going to market and 
potential delays in restocking the farms, producers will spend less on 
local purchases of their traditional inputs into poultry and egg 
production (such as feed and veterinary supplies). Producers and their 
employees will also have less household income to spend at local 
businesses. These are the ripple effects of avian influenza.\3\
---------------------------------------------------------------------------
    \3\ Note: Producers will have expenses related to clean up and 
disinfection, as well as restocking their barns.
---------------------------------------------------------------------------
    In addition to losses at the producer level, a decline in poultry 
and eggs produced has the potential to affect the processing industry 
as well. On May 5, Jennie-O announced it will lay off 233 workers at 
its turkey processing plant in Faribault. Obviously, idling of 
processing plants will also have ripple effects on the local economy.
    To quantify these ripple effects, University of Minnesota Extension 
conducted an Emergency Economic Impact Analysis (EIA). This Emergency 
EIA quantifies the ripple effects of the loss of $1 million in poultry 
and egg production showing that $1 million in direct losses will likely 
result in a decline of $1.8 million in economic output in Greater 
Minnesota, including $450,000 in lost farm and household income. It 
also quantifies the ripple effects of the loss of 100 poultry 
processing jobs, showing that 100 lost jobs at poultry processing 
plants will lead to a loss of 210 jobs across Greater Minnesota's 
economy, including $9.3 million in lost household income.
    Because the virus continues to spread, quantifying the exact loss 
at a specific date and time may not prove useful. Knowing the impact of 
$1 million in losses will allow the total economic impact to be 
adjusted based on the latest information available on poultry and egg 
production losses. Correspondingly, knowing the impact of 100 lost 
processing jobs will allow the total economic impact to be adjusted 
based on the latest information available on poultry processing losses.

    This analysis is offered as a quick and initial look at the 
immediate, short-term impacts of the avian influenza. It is intended to 
provide context for decision makers in the midst of this economic 
event. Extension recommends a more in-depth and complete analysis be 
completed once the avian influenza has been contained in Minnesota.
What Is An Economic Emergency?
    Communities can face a sudden and unanticipated change in their 
local economy. A major employer announces it is reducing its workforce, 
a fire destroys an operating facility, or a flood damages downtown. In 
these situations, communities often need to make quick, but important, 
decisions about how to react. They work closely with the local 
business(es) affected and work to help the business(es) and community 
recover. The University of Minnesota economic emergency program is 
designed to provide community leaders with information to assist in 
making decisions regarding the community's future. Information from the 
IMPLAN (MIG, Inc.) input-output model is used in this analysis.\4\ This 
report is presented in partnership with the EDA Center at the 
University of Minnesota-Crookston.
---------------------------------------------------------------------------
    \4\ IMPLAN, Inc. www.implan.com.
---------------------------------------------------------------------------
    There are a few important things to note related to this analysis 
and the tool used. Please see the section on assumptions and terms to 
understand these factors.
Current Economy
    In 2013, businesses in Greater Minnesota created $223.1 billion of 
output. The agriculture, forestry, hunting, and fishing industry was 
directly responsible for $20.0 billion (9%) of that output (Chart 1). 
Manufacturers using agricultural products in their processes produced 
$23.3 billion of the $62.7 billion (37%) in manufacturing output in 
Greater Minnesota.
Chart 1: Output by Sector, Greater Minnesota, 2013


    Poultry and egg producers, in turn, created $1.4 billion of output 
in 2013, or approximately seven percent of Greater Minnesota's 
agricultural production (Chart 2). In addition, poultry processing 
facilities produced $1.6 billion of output. Together, the industries 
produce $3.0 billion of output annually in Greater Minnesota.
Chart 2: Agricultural Output by Sector, Greater Minnesota, 2013


Economic Impact of Lost Poultry and Egg Production
    Since it's unknown how long avian influenza will continue to spread 
in Minnesota (and thus the full impact of outbreak), this analysis will 
focus on the loss of $1 million of poultry and egg production. With 
careful interpretation, the impact of this $1 million of loss can be 
brought to the current scale of losses in the poultry and egg industry 
in Minnesota by multiplying the estimated total losses presented here 
by the current value of lost production. These figures should not be 
applied to the poultry processing industry.
Total Economic Impact
    Each $1 million loss in poultry and egg production means that an 
estimated three jobs at poultry and egg farms themselves will be 
affected. At this time, the avian influenza is expected to decrease 
poultry and egg production for a short period of time. If producers are 
able to return to full production within a few months, it is possible 
these jobs will not be permanently lost. However, these jobs will be 
affected in the short-term (for example, employees may go several weeks 
without work or income).
    During this period, an estimated $283,260 in labor income for the 
producer and the producer's employees will be lost (see the direct 
effect in Table 1). Labor income includes both proprietor income 
(income for the self-employed which would include income to poultry 
producers) and employee compensation (wages, salaries, and benefits for 
farm workers). Most of the direct loss (85 percent) is lost income for 
poultry producers.\5\ Losses may be even greater in the short-term for 
poultry producers, as some will retain employees during the cleaning 
and disinfecting stages. The producers, at that point, will be paying 
wages to their employees without receiving any revenue to pay those 
wages.
---------------------------------------------------------------------------
    \5\ Note: some poultry producers may receive government payments to 
compensate for birds lost, as producers will receive payment for birds 
euthanized to prevent the spread of the disease. This will partially 
offset some the lost proprietor income.
---------------------------------------------------------------------------
    Poultry and egg production generates additional economic activity 
in Greater Minnesota as a result of purchases by poultry and egg 
producers. These are described as indirect and induced impacts. When 
poultry and egg producers make purchases of inputs and supplies in the 
local economy, this creates indirect, or business-to-business impacts. 
When poultry and egg producers, their families, and their employees 
make purchases in the local economy, this creates induced, or consumer-
to-business, impacts. When these purchases decrease, as a result of 
declines in poultry and egg production, the corresponding local 
purchases will also decrease, causing a ripple of economic losses in 
Greater Minnesota.
    Each loss of $1 million in poultry and egg production will have 
significant impacts on Greater Minnesota, as displayed in Table 1. For 
every $1 million decline in poultry and egg production, an estimated 
additional $808,590 in output in Greater Minnesota industries that 
serve producers and their employees will be lost. In total, output in 
the region declines by an estimated $1.8 million per $1 million of lost 
production. Of that $1.8 million of lost output, $450,000 will be lost 
labor income (includes proprietary/net farm income and employee 
compensation). For every $1 million decline in poultry and egg 
production in Greater Minnesota, Minnesotans will lose $450,000 in 
household income. Finally, poultry and egg losses will impact other 
jobs in Greater Minnesota. For every $1 million of lost poultry and egg 
production, an estimated seven jobs will be affected across all 
industries.

 Table 1: Total Economic Impact of a $1 Million Loss of Poultry and Egg
                      Production, Greater Minnesota
------------------------------------------------------------------------
                         Output          Employment       Labor Income
------------------------------------------------------------------------
        Direct         ^$1,000,000                ^3         ^$283,260
      Indirect           ^$564,160                ^2          ^$94,910
       Induced           ^$244,430                ^2          ^$71,830
                   -----------------------------------------------------
  Total...........     ^$1,808,590                ^7         ^$450,000
------------------------------------------------------------------------
Estimates by University of Minnesota Extension.

    The focus of this analysis is on Greater Minnesota, because the 
majority of Minnesota's poultry and egg production is in Greater 
Minnesota (the 80 counties not in the seven county metro). The economic 
impact of a $1 million decrease in poultry and egg production on the 
entire state of Minnesota (including the metro area) is $2.1 million 
including eight jobs affected and $560,000 of lost income (proprietor 
and employee compensation).
Top Industries Impacted
    The IMPLAN input-output model can also provide estimates of the 
industries in Greater Minnesota that will feel the largest magnitude of 
impacts from the loss of poultry and egg production (Chart 3). The 
largest losses will be in ``other'' animal food manufacturing. Since 
poultry will not be raised, demand for poultry feed will decline. For 
every $1 million of lost poultry production, nearly $230,000 of demand 
for poultry feed will be lost in Greater Minnesota. Poultry and egg 
production itself will also be affected, as shown in Chart 3. Likely, 
these impacts are those related to demand for poults and for chicks. 
Therefore, this decrease may be temporary. In fact, this subsector of 
the poultry industry may experience a sharp spike in demand when 
producers are ready to restock their barns. Grain farming and oilseed 
farming also appear in the table as industries that will be affected. 
This chart reflects the number of grain and oilseed farm that provide 
inputs into poultry feed. Likely, grain and oilseeds not used for 
poultry feed will be exported.
Chart 3: Top 15 Industries Affected by a $1 Million Decline in Poultry 
        and Egg Production, Sorted by Output
        
        
Modeling the Scale of Losses
    As mentioned, the scale of the lost poultry and egg production is 
yet not clear for Greater Minnesota. Depending on the duration of the 
avian influenza outbreak, the scale of the impacts could change. Thus, 
Extension modeled a $1 million change in poultry and egg production. 
However, it is useful to think how these impacts might change based on 
the scale of the event. The following examples are provided only for 
illustrative purposes and not as predictions for the future.

    Example 1: A $10 million loss of poultry and egg production

    If poultry and egg production were to decline by $10 million in 
Greater Minnesota, then in total Greater Minnesota would lose an 
estimated $18.1 million in economic activity, including $4.5 of lost 
labor income. Across all industries, 70 jobs would be affected.

    Example 2: A $113.6 million loss of poultry and egg production

    As of May 11, 2015, Extension estimates approximately $113.6 
million of poultry and egg production has been lost (based on 2014 
production figures). The loss of an estimated $113.6 million in poultry 
production would result in a loss of $205.5 million in economic 
activity in Greater Minnesota, including $51.1 million of lost labor 
income. Nearly 800 jobs would be affected. These are estimates based on 
production values from 2014. They should be interpreted with caution. 
They do not include the value of lost production due to the barns being 
empty during the cleaning and disinfecting stage. If poultry producers 
lose another entire cycle of production, these estimates could double.

    Example 3: A $200 million loss of poultry and egg production

    Poultry and egg production losses may increase with time. If 
poultry and egg production were to decline by $200 million, then in 
total Greater Minnesota would lose an estimated $361.7 million in 
economic activity, including $90 million of lost labor income. Across 
all industries, 1,400 jobs would be affected.
Economic Impact of Lost Poultry Processing Jobs
    Since the effects of the avian influenza are only beginning to be 
felt by the processing industry, this analysis will focus on the loss 
of 100 poultry processing manufacturing jobs. With careful 
interpretation, the impact of these 100 lost jobs can be brought to the 
current scale of losses in the poultry processing industry in Minnesota 
by multiplying by the current value of lost jobs. These figures should 
not be applied to the poultry and egg production industry.
Total Economic Impact
    According to the IMPLAN input-output model used in this analysis, 
the loss of 100 poultry processing jobs in Greater Minnesota is 
associated with a direct loss of an estimated $27.3 million in poultry 
processing output. The lost output includes an estimated $4.9 million 
worth of wages, salaries, and benefits for the affected workers.
    When a processing plant idles and employees are laid off, 
businesses beyond the processing plant will be affected. The processing 
plant will decrease purchases of its material supplies leading to 
indirect or business-to-business losses. With a drop of 100 jobs at 
processing plants, an estimated 50 jobs will be lost in other 
industries. Note, since this analysis examines poultry and egg 
production impacts separately, lost poultry production jobs are not 
included in the indirect effects. The model estimates 30 poultry 
production jobs are affected for each 100 poultry processing jobs lost.
    When the processing plant idles, workers will be without incomes. 
The model estimates that lost incomes for plant workers will affect 60 
jobs in other industries in Greater Minnesota.
    In total, the loss of 100 poultry processing jobs in Greater 
Minnesota will result in an estimated 210 jobs being affected across 
all industries. The total economy will experience a decrease in output 
of an estimated $44.8 million, including $9.3 million in labor income.

   Table 2: Total Economic Impact of 100 Lost Poultry Processing Jobs,
                            Greater Minnesota
------------------------------------------------------------------------
                         Output                           Labor Income
                       (millions)        Employment        (millions)
------------------------------------------------------------------------
        Direct              ^$27.3              ^100             ^$4.9
      Indirect              ^$10.8               ^50             ^$2.4
       Induced               ^$6.7               ^60             ^$2.0
                   -----------------------------------------------------
  Total...........          ^$44.8              ^210             ^$9.3
------------------------------------------------------------------------
* Note: Estimates do not include lost poultry production.
Estimates by University of Minnesota Extension.

    The focus of this analysis is on Greater Minnesota, because the 
majority of Minnesota's poultry processing is in Greater Minnesota. The 
economic impact of a 100 job decrease in poultry processing on the 
entire state of Minnesota (including the metro area) is $64.5 million 
including 275 jobs affected and $15.8 million of lost income.
Top Industries Impacted
    The top industries affected by lost poultry processing jobs are 
highlighted in Chart 4. A loss of 100 poultry processing jobs will 
affect nearly nine trucking jobs, seven poultry processing jobs (likely 
at processors that perform specialty processing tasks), and six 
wholesale trade jobs.
Chart 4: Top 15 Industries Affected by a 100 Job Decline in Poultry 
        Processing, Sorted by Employment
        
        
Modeling the Scale of Losses
    As mentioned, the scale of the lost poultry processing is yet not 
clear for Greater Minnesota. Depending on the duration of the avian 
influenza outbreak, the scale of the impacts could change. Thus, 
Extension modeled a 100 job change in poultry processing. However, it 
is useful to think how these impacts might change based on the scale of 
the event. The following examples are provided only for illustrative 
purposes and not as predictions for the future.

    Example 1: 233 Lost Poultry Processing Jobs

    The loss of 233 poultry processing jobs will result in 490 jobs 
across all industries in Greater Minnesota being affected. It will 
result in the loss of $104.4 million of lost output, including $21.7 
million in labor income.

    Example 2: 500 Lost Poultry Processing Jobs

    It is possible additional poultry processing jobs will be affected 
as a result of the avian influenza. If 500 poultry processing jobs are 
lost, then 1,050 jobs across all industries would be affected. The lost 
jobs would translate into $224.0 of lost economic activity, including 
$46.5 million in lost labor income in Greater Minnesota.
Considerations
    Given the ever changing nature of the avian influenza in Greater 
Minnesota, Extension elected to analyze using a unit loss of $1 million 
in poultry and egg production and 100 lost poultry processing jobs. 
There are several layers of additional considerations when thinking 
about the overall impact of the avian influenza in Greater Minnesota.

   Age and maturity of bird losses. Producers with older birds 
        will have higher investments in their birds than producers 
        whose birds were younger at time of infection.

   Fixed prices. This analysis assumes prices remain fixed. 
        This is an important assumption, as decreased demand for inputs 
        into poultry and egg production may decrease the cost of 
        inputs. Decreased input prices will affect expenditures for 
        those inputs. Further, changes in the price of poultry and 
        eggs, which could rise as supply decreases, would also change 
        farm incomes. The input-output model used in this analysis does 
        not account for price changes.

   Insurance or government reimbursement. Some of the producers 
        affected may receive compensation for lost birds, mitigating 
        the effects of some of the lost farm income. However, impacts 
        on the supplying industries (identified as indirect effects in 
        this report) will not be offset.

   Impacts of barn cleaning and disinfecting. This analysis 
        focuses on a loss of poultry and egg production using a fixed 
        model of production. The avian influenza will cause some 
        spending and activity to occur that is outside the normal for 
        producers. For example, there will be producer costs associated 
        with purchasing cleaning supplies and then resetting the barns 
        for production (for example, added bedding). These will be 
        costs to the poultry producers in the short-term, but might 
        actually spur additional economic activity as suppliers of 
        poultry bedding increase production to meet demand.

   Long-term effects on the poultry and egg industry. This 
        analysis focuses on the short-term effects of lost poultry and 
        egg production. If producers are able to return to full 
        production within a few months, these effects will dissipate. 
        However, this is a point of high uncertainty in the industry. 
        If avian influenza persists as an issue, producers may not be 
        able to return to full production, leaving them vulnerable to 
        leaving the industry. Uncertainty may affect credit 
        availability, further hindering operations.
Purchasing Patterns for Producers and Processors
    The input-output model, IMPLAN, estimates ripple effects based on 
industry purchasing patterns (production functions). Extension is 
providing the production functions here to allow decision makers to 
understand supply linkages. Note: IMPLAN adjusts the amount spent in a 
local economy based on supply available in the study area.
Poultry and Egg Producer Purchases
    Table 3 shows purchases by poultry and egg producers. According to 
the IMPLAN input-output model, for every $1 spent by poultry and egg 
producers, $0.68 is spent on inputs (goods and services). The other 
$0.32 is spent on labor, indirect business taxes, and property income.

             Table 3: Purchases by Poultry and Egg Producers
------------------------------------------------------------------------
                                                              Amount of
                            Item                               Every $1
                                                                Spent
------------------------------------------------------------------------
Animal food                                                        $0.40
Labor income, indirect business taxes, and property income         $0.32
 costs
Poultry and egg products                                           $0.09
Wholesale trade                                                    $0.05
Grains                                                             $0.02
Energy                                                             $0.02
Truck transportation                                               $0.01
Soybean and oilseed processing                                     $0.01
Support activities for agriculture                                 $0.01
Veterinary services                                                $0.01
All other inputs                                                   $0.06
                                                            ------------
  Total                                                            $1.00
------------------------------------------------------------------------
Source: IMPLAN.

Poultry Processing Purchases
    Table 4 shows purchases by poultry processors. According to the 
IMPLAN input-output model, for every $1 spent by poultry processors, 
$0.79 is spent on inputs (goods and services). The other $0.21 is spent 
on labor, indirect business taxes, and property income.

                Table 4: Purchases by Poultry Processors
------------------------------------------------------------------------
                                                              Amount of
                            Item                               Every $1
                                                                Spent
------------------------------------------------------------------------
Poultry and egg products                                           $0.45
Labor income, indirect business taxes, and property income         $0.21
 costs
Processed poultry meat products                                    $0.11
Truck transportation services                                      $0.04
Management of companies                                            $0.02
Wholesale trade                                                    $0.02
Paper bags and coated and treated paper                            $0.01
Paperboard containers                                              $0.01
Meat processed from carcasses                                      $0.01
Other plastics products                                            $0.01
All other inputs                                                   $0.11
                                                            ------------
  Total                                                            $1.00
------------------------------------------------------------------------
Source: IMPLAN.

Prepared By
  Brigid Tuck, Senior Economic Impact Analyst, [email protected], 507-389-
    6979

    With peer-review by:

  William Lazarus, Extension Economist--Farm Management and Professor
  Kent Olson, Interim Associate Dean and Extension Economist--Farm 
    Management
  Matt Kane, Program Leader
  Liz Templin, Extension Educator
  Neil Linscheid, Extension Educator
Assumptions and Terms
    Economic impact analysis is based on several critical assumptions. 
An understanding of the assumptions ensures the results are interpreted 
properly. Here are the key assumptions made in this analysis.

   One job is one job, regardless if the job is full-time, 
        part-time, or seasonal. The jobs considered here are not full-
        time equivalents. Therefore, it isn't unusual for industries 
        with high levels of part-time employment to experience higher 
        employment impacts.

   The model is linear. Changes in output or employment can be 
        modeled in a linear fashion. For example, if the estimated lost 
        production of poultry and eggs in Greater Minnesota are $10 
        million, one may multiply the amounts noted in this report for 
        losses in total output and employment from $1 million in lost 
        production by ten to obtain estimates for the $10 million in 
        lost production.

   The database is built on data available publicly. When data 
        is not available for a specific industry, say due to data 
        disclosure issues, econometric models are used to create 
        estimates for the industry.
Key Terms

    The following are a few key terms used in economic impact analysis.
Output
    Output is measured in dollars and is equivalent to total sales. The 
output measure can include significant double counting. For example, 
think of corn. The value of the corn is counted when it is sold to the 
mill, again when it is sold to the dairy farmer, again as part of the 
price of fluid milk, and then yet again when it is sold as cheese. The 
value of the corn is built into the price of each of these items and 
then the sales of each of these items are added up to get total sales 
(or output).
Employment
    Employment includes full- and part-time workers and is measured in 
annual average jobs. Total wage and salaried employees as well as the 
self-employed are included in employment estimates in IMPLAN. Because 
employment is measured in jobs and not in dollar values, it tends to be 
a very stable metric.
    In the model, one job is one job, regardless if the job is full-
time, part-time, and seasonal.
Labor Income
    Labor income measures the value that is added to the product by the 
labor component. For example, in the corn example, when the corn is 
sold, a certain percentage of the sale goes to the farmer for his/her 
labor. Then when the mill sells the corn as feed to the dairy farmer it 
includes in the price some markup for its labor costs. When the dairy 
farmer sells the milk to the cheese manufacturer, he/she includes a 
value for his/her labor. These individual value increments for labor 
can be measured. This is labor income. Labor income does not include 
double counting.
    Labor income is comprised of employee compensation (wages, 
salaries, and benefits) and proprietor income. Proprietor income 
includes income for the self-employed, which is how many agricultural 
producers register their income.
Property Income
    Property income is a computation of the value that accrues due to 
ownership of property. This includes payments for rents, royalties, and 
dividends.
Indirect Business Taxes
    Indirect business taxes are taxes a business pays for normal 
operations. It includes excise, sales, and property taxes. Fees, fines, 
licenses, and permits are also included in this category.
Direct Impact
    The direct impact is equivalent to the initial change in the 
economy.
Indirect Impact
    The indirect impact is the summation of changes in the local 
economy that occur due to spending for inputs (goods and services) by 
the industry or industries directly impacted. For instance, if 
employment in a manufacturing plant increases by 100 jobs, this implies 
a corresponding increase in output by the plant. As the plant increases 
output, it must also purchase more of its inputs, such as electricity, 
steel, and equipment. As it increases its purchase of these items, its 
suppliers must also increase its production, and so forth. As these 
ripples move through the economy, they can be captured and measured. 
Ripples related to the purchase of goods and services are indirect 
impacts.
Induced Impact
    The induced impact is the summation of changes in the local economy 
that occur due to spending by labor--employees in the industry or 
industries directly impacted. For instance, if employment in a 
manufacturing plant increases by 100 jobs, the new employees will have 
more money to spend to purchase housing, buy groceries, and go out to 
dinner. As they spend their new income, more activity occurs in the 
local economy. This can be quantified and is called the induced impact.
Total Impact
    The total impact is the summation of the direct, indirect and 
induced impacts.

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        Minnesota. All rights reserved. University of Minnesota 
        Extension is an equal opportunity educator and employer. In 
        accordance with the Americans with Disabilities Act, this 
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                                 ______
                                 
                          Submitted Questions
Response from John R. Clifford, D.V.M., Deputy Administrator, 
        Veterinary Services, Animal and Plant Health Inspection 
        Services, U.S. Department of Agriculture
Questions Submitted by Hon. David Rouzer, a Representative in Congress 
        from North Carolina
    Question 1. On the issues of decontamination and sanitizing 
equipment impacted by the AI, are farmers sanitizing the equipment, 
replacing it, or some combination of the two?
    Answer. As part of the virus elimination process, APHIS has 
provided funding for producers to clean and disinfect equipment and, in 
some cases, replace it. Our determination is based upon the 
circumstances at each particular farm and what steps and actions are 
necessary to eliminate the virus.

    Question 2. Do your regulations account for the most cost-effective 
disinfection measure or just require disinfection? We have heard that 
replacement of equipment may actually be cheaper than disinfection in 
some cases. If that is the case, do your policies allow for this 
option?
    Answer. In some cases where cleaning and disinfecting was difficult 
or impossible, APHIS did in fact replace equipment, consistent with 9 
CFR Part 53. While our policy for cleaning and disinfecting had been to 
remove organic material from the facility before washing equipment and 
applying a disinfectant, we will focus more heavily on virus 
elimination moving forward. This will allow us, in certain cases to use 
dry cleaning methods wherein heat and temperature ensure the virus is 
eliminated. These methods still ensure the elimination of the virus 
while being more cost effective than wet methods.
    In addition, in conversations with industry and stakeholders, we 
heard repeatedly about the need for a flat rate (such as per bird, or 
per square foot) for virus elimination. This approach, which we are 
examining, would simplify the process, by reducing the amount of 
paperwork, ensuring consistency, and shortening the time it takes for 
the virus to be removed--thereby allowing most producers to begin 
restocking sooner.

    Question 3. With regard to private sector contractors, it doesn't 
surprise anyone that the quality of the work performed would be related 
to the experience and expertise of the contractors. Understanding that 
this was an all-hands-on-deck operation, were any problems encountered 
with the quality of the work done by contractors that needs to be 
addressed moving forward?
    Answer. As part of our fall planning, we've evaluated the work of 
contractors and will continue to work to ensure that they are 
implementing our response plan. Although limited in number, when we did 
identify issues with the performance of contractors, we moved quickly 
to correct those issues or, when appropriate, to dismiss the 
contractors. Moving forward, we are committed to ensuring that an APHIS 
employee is present at each affected facility to ensure the quality of 
work being performed through direct oversight.

    Question 4. Recognizing that there was a tremendous volume of birds 
to be depopulated, can you expound on the time it took, on average from 
identification of the virus to depopulation of the flock, and 
specifically touch on the policy changes that enabled quicker response 
times later in the outbreak?
    Answer. While we don't have an average depopulation time, we do 
know that times varied widely depending on the type of poultry 
population and the location of the facility. Much of the initial delay 
for depopulation of turkey flocks at the beginning of the outbreak in 
the spring in Minnesota was related to time needed to transport 
resources to affected sites. APHIS brought in additional resources 
through contracting for personnel and equipment, which decreased the 
time for completion of depopulation. Depopulation of egg-layer sites 
posed challenges because of the number of personnel needed to manually 
remove birds from individual cages, rather than a lack of equipment. 
The changes we made as the event progressed were to be more proactive 
in acquiring resources faster and in larger numbers. As part of our 
fall planning efforts, we've taken a number of steps that should allow 
us to respond more quickly to new outbreaks of the disease. Among these 
efforts include an itemization of essential equipment and strategic 
stockpiling of it in key areas; an increase in the number of employees 
who are immediately able to respond to outbreaks; and the stated goal 
of depopulating sick birds within 24 hours, which will help reduce the 
amount of virus present in the environment.

    Question 5. It is my understanding that rendering of the birds did 
not occur because of significant hurdles, but that rendering could 
speed up the cleanup phase because the process does eliminate the virus 
and renderers have good capacity to handle the material. I know that 
this technique has been used in Europe with High-Path birds and it 
seems that it could really help with the sheer volume during an event 
like this. So do you believe that rendering is a good option?
    Answer. Thus far in this HPAI event, no renderers have been 
interested in participating in the disposal process. We continue to 
look at rendering and are in discussions with renderers on the 
possibility of using this option.

    Question 6. In regards to the larger conversation of disposal, to 
your knowledge have any universities engaged in new research regarding 
options for more efficient disposal methods?
    Answer. Several companies have approached USDA with new methods for 
disposal. Most of the companies are working with universities to 
validate or develop their prototypes and are also looking for Federal 
funding to assist in that development process. To this point, no new or 
novel approaches have been validated that would meet the demands of 
large-scale disposal, although USDA continues to advertise for sources 
of disposal services in FedBizOps and to work with researchers to 
identify and validate new technologies.

    Question 7. It is my understanding that some of the incinerators 
used did not hold up very well or the process was slow. Is that 
correct?
    Answer. Incineration overall was a very expensive and troublesome 
process. One key factor is that poultry carcasses contain a high degree 
of moisture, making incineration difficult, especially given the number 
of depopulated birds. The smaller units worked well but could not 
handle the demand. The large units did not function well, were 
continuously in need of repairs, and could not stay operational. 
Overall, incineration was not a successful endeavor during this 
outbreak for carcass removal, although it was useful for disposal of 
some contaminated products and fluids.

    Question 8. I know that FEMA used some fairly powerful incinerator 
systems after Hurricane Katrina that worked fairly well and I was 
wondering if conversations took place with FEMA or any other agency 
about what resources that might work better in disposing this type of 
material and this much volume?
    Answer. We did not have any conversations with FEMA about 
incineration, but it was a tool we used. Incineration proved useful 
only for certain materials, like bedding/litter, fluids and other more 
traditional materials for which they were designed. However, they did 
not function well for the incineration of bird carcasses.

    Question 9. Does APHIS intend to spend any Federal resources in 
developing better disposal methods?
    Answer. APHIS has established a system for individuals and 
companies to present their proposals for funding considerations. 
Several proposals are in the review process now.

    Question 10. When do you plan to allow farmers to repopulate their 
farms?
    Answer. USDA has criteria in place that must be met before farmers 
are allowed to restock, to minimize the risk of re-infection. This 
process can begin, provided those criteria--including virus testing--
are met, 21 days after the completion of cleaning and disinfection. We 
are making steady progress in restocking.

    Question 11. How close are we to determining how to stop the spread 
or recurrence of the virus?
    Answer. With what we already knew about HPAI and the lessons we 
learned from the spring outbreak, we know there are a number of actions 
we can take to slow the spread of HPAI should it come back in the fall 
or winter. First, we've increased wild bird surveillance, which will 
allow us to more quickly identify where the disease may strike. We've 
also learned that we all need to reemphasize biosecurity. The industry 
has provided guidance about best practices and we have distributed 
information about biosecurity best practices as part of the fall plan 
we recently released. We've also identified the need to depopulate 
affected flocks within 24 hours to reduce the amount of virus they 
produce, which will decrease the likelihood of the virus contaminating 
the surrounding environment. In combination, these steps, along with 
the proper disposal of dead birds and an emphasis on virus elimination 
in affected barns, gives us the best chance to slow and stop the spread 
of the virus.

    Question 12. What have you found regarding the implementation and 
efficacy of biosecurity measures being utilized by growers?
    Answer. One of the lessons we've learned is that we all need to be 
vigilant about maintaining stringent biosecurity measures, especially 
in the face of a disease outbreak. The strength of our biosecurity 
efforts depends on all of us--producers, their employees, USDA, state 
and local governments and our contractors who are responding to this 
outbreak. While standard biosecurity efforts practiced by the poultry 
industry may have been sufficient in the past, evidence of farm-to-farm 
spread of the HPAI virus strain circulating in the Midwest shows that 
stricter biosecurity is needed. Guidance for enhancing biosecurity 
provided by the poultry industry, as well as in our fall preparedness 
plan, will help to address the gaps in biosecurity that led to some 
lateral transmission of the disease in the spring outbreak.

    Question 13. What further biosecurity measures can be taken by 
growers to prevent the spread of avian influenza?
    Answer. As part of our fall planning efforts, USDA developed ideas 
to strengthen biosecurity. To support producers in this effort, APHIS 
has developed educational materials and a biosecurity self-assessment 
checklist, which are available online or as a webinar through the U.S. 
Poultry and Egg Association. As we improve our understanding of what 
biosecurity measures will be most effective against HPAI, we will 
update these publications and communicate them to poultry producers. We 
will also continue to engage other Agencies that conduct on-farm 
regulatory functions (Agricultural Marketing Service, Food and Drug 
Administration, etc.) and provide them with suggested biosecurity 
protocols for their activities. Additionally, APHIS is developing an 
interim rule on HPAI indemnity that will contain a provision requiring 
all future HPAI-affected commercial poultry producers to self-certify 
that biosecurity procedures were in place at the time HPAI was 
detected. This represents the first step in creating a system of 
greater accountability for biosecurity. Following this, we will 
collaborate over the next year with industry to design a biosecurity 
auditing system. An industry-driven initiative, or an addition to the 
National Poultry Improvement Plan, are two possible approaches.

    Question 14. What are some challenges associated with controlling 
disease spread for the different poultry industries?
    Answer. Different segments of the poultry industry have different 
practices, which mean that a one-size biosecurity plan isn't always 
appropriate. With egg-laying facilities, for example, there are often 
huge numbers of birds in multiple buildings on a premise. These birds 
are often in various stages of their life cycle and workers are 
constantly entering facilities and moving between barns. With turkey 
farms, their facilities are often not as fully enclosed as the 
structures are often designed to allow for increased access to air and 
shade from the sun, which may expose them to wild birds or airborne 
disease in a way that other segments of the poultry industry may not 
be. Additionally, we know that one of the keys to reducing lateral 
spread is to reduce the amount of virus in the environment, which can 
be achieved by rapid depopulation of sick birds. The preferred 
depopulation methods are water-based foam or carbon dioxide. Those work 
well at turkey facilities, where birds live on a floor, but in other 
segments of industry, we faced challenges that increased the amount of 
time it took to depopulate sick birds. Specifically, egg-layer 
facilities, where birds are housed in individual cages that may be 
stacked in multiple levels, present challenges to depopulate quickly. 
APHIS, with concurrence from the State and the producer, will consider 
alternate methods when depopulation cannot be carried out within 24 
hours using foam or carbon dioxide.

    Question 15. In response to the recent outbreak, it is our 
understanding that APHIS had developed a plan to employ as many as 800 
veterinarians for a 13 month period at a GS11 wage scale. If APHIS had 
more veterinarians employed prior to the outbreak, could they have 
responded to better minimize the economic damages?
    Answer. APHIS staffing reductions over the last few years 
necessitated that we contract much of the response work and limited the 
number of APHIS employees--who are doing critical work in the field 
assisting businesses and producers with critical import and export 
issues--who could assist with the emergency response. APHIS is hiring 
more than 350 additional temporary employees--including 210 animal 
health technicians, and 90 veterinary medical officers. These 
additional employees will assist in reducing the potential size and 
spread of an outbreak, and thereby will reduce the economic impact to 
producers and the cost to the Federal Government. We are also confident 
that the policy and operational changes we have made as part of our 
fall preparedness plan will help to quicken our response efforts and 
minimize economic impacts to producers should HPAI return in the fall 
or beyond.

    Question 16. The Veterinary Medicine Loan Repayment Program 
authorizes the Secretary to enter into 1 year agreements with 
veterinarians enrolled in the program to assist in emergency 
situations. Has APHIS been able to make emergency use of veterinarians 
enrolled in the student loan forgiveness program?
    Answer. The emergency services aspect of the National Veterinary 
Medical Services Act (which VMLRP partially implements) has never been 
implemented due to insufficient appropriations to support more than the 
primary objective of the program, i.e., incentivizing veterinarians to 
fill food supply veterinary service shortage situations.

    Question 17. How many accredited veterinarians are available to 
assist APHIS in managing this outbreak?
    Answer. Accredited veterinarians are encouraged to apply to the 
National Animal Health Emergency Response Corps, a program through 
which veterinarians become temporary USDA employees in emergency 
situations. One hundred and one NAHERC personnel volunteered and were 
hired this year to respond to HPAI out of the 4,000 NAHERC 
veterinarians and technicians who have signed up to potentially assist 
USDA. Although 4,000 may have volunteered, there is no requirement that 
any of them actually deploy. Some may choose not to volunteer for a 
particular outbreak due to the location of the outbreak or their 
specific expertise.

    Question 18. I support USDA-APHIS getting the funding needed to 
allow for proper training and education of those that may be required 
to react to another outbreak. It is my understanding that APHIS is 
planning on hiring some 300 people to help in the fall for a 12 month 
appointment. How will those that are hired be managed and focused on 
helping industry, and where will they be located?
    Answer. APHIS is in the process of advertising and hiring more than 
350 term positions (hired for a 13 month period with possible 
extension) related to HPAI. These veterinarians and technicians will be 
trained by APHIS to be ready to respond to HPAI, located across the 
United States and managed by local supervisors. They will be deployed 
to an HPAI incident when needed, and when not deployed they will assist 
with preparedness and conduct routine animal health duties in the 
field.

    Question 19. A lot of very different types of farms--with 
significantly different business models--have been affected by this 
epidemic. For example, the repopulation of egg-producing farms proceeds 
on a very different, and considerably longer, timeline than broiler or 
turkey operations. What steps can be taken by APHIS to ensure that the 
formula for fair market value is adequately compensating growers for 
losses associated with disease outbreaks?
    Answer. APHIS provides indemnity to pay for animals destroyed as 
part of its disease response activities. Indemnity is calculated based 
upon the fair market value of the birds at the time they are disposed. 
For animals such as turkeys, this largely involves replacement costs of 
the bird itself. For egg-laying hens, their value is a function of the 
costs to raise the birds to lay and of the eggs they produce. At the 
industry's request USDA lengthened the assumed period of lay in the 
layer indemnity calculator from 80 to 90 weeks, which will help to 
ensure that producers receive fair market value for egg-laying chickens 
depopulated as a result of HPAI. We have recently received a request 
from some in industry to provide indemnity compensation for downtime 
losses. We have determined that these payments would not be consistent 
with the purpose of indemnity payments, as outlined by the Animal 
Health Protection Act (AHPA). Under the law and the applicable 
indemnity regulations, USDA provides affected producers with indemnity 
equal to the fair market value of euthanized birds.

    Question 20. As you are aware, indemnification is an important 
issue for our growers. I have heard from egg producers in my district 
and they have expressed concern that the amount they are receiving 
falls short of the value of the hens' future egg production. Is there 
an opportunity to review the formula in this regard? Can you outline 
what the current formula covers and how it's being applied?
    Answer. The calculator APHIS uses to determine bird value is 
updated regularly, based on current market prices, and APHIS has 
discussed the calculator with various industry sectors over the course 
of the current outbreak. The calculator incorporates pullet chick 
prices, pullet feed and other pullet growing costs plus feed and other 
costs associated with egg production into the bird values generated. By 
including such costs the calculator ensures that egg producers will 
always receive value equal to their cost of production for pullets 
being raised and unrecouped costs for hens that are producing eggs. In 
addition, during periods of favorable egg prices the calculator adds a 
portion of net revenue to bird value. At the request of industry, USDA 
adjusted the calculator to increase the laying period from 80 to 90 
weeks. This change increases net revenue and in turn bird value.We will 
continue to engage all sectors of the poultry industry to assure a 
transparent understanding of the assumptions and data used within the 
APHIS indemnity calculators.

    Question 21. Are there different indemnification formulas used 
based on the type of AI outbreak? Specifically would a farmer whose 
flock was destroyed because of Highly-Pathogenic Avian Influenza (HPAI) 
be compensated differently than a farmer whose flock was destroyed by 
Low-Pathogenic Avian Influenza (LPAI)? If the formulas are different, 
which formula is APHIS using to compensate affected egg farmers?
    Answer. The formula for calculating the fair market value of 
poultry is the same for HPAI and LPAI. However, the regulations provide 
for payment to owners only for HPAI, while LPAI regulations allow 
payments to be split between growers and owners in contract-growing 
situations. While we have worked with owners to ensure growers are 
treated fairly according to the terms of their contracts, APHIS is 
developing an interim rule to harmonize the two regulations and provide 
split payments for HPAI.

    Question 22. Are there ways that the indemnification process might 
be streamlined and improved?
    Answer. APHIS continues to review the indemnification process to 
ensure that payments are fair and processed as quickly as possible. 
Because indemnity is based on the inventory of birds at the time of 
infection, we are encouraging producers to keep accurate records. We 
will also compile the inventory as quickly as possible: as soon as a 
suspect flock is identified, or a foreign animal disease investigation 
is started, or presumptive positive result is obtained from a 
laboratory. We also allow state animal health officials to prepare the 
inventory, which can save additional time and help speed indemnity 
payments to producers.

    Question 23. I understand that as a result of USDA restrictions on 
re-populating and due to the nature of the egg production business, 
farmers will not be able to immediately re-populate their farms to 
normal, pre-destruction egg-producing capacity. Instead, it will take 
months or even years for a commercial-sized farm to resume full egg 
production. In light of this hardship, do USDA or the states have 
programs in place, risk management or otherwise, to account for the 
substantial lost income that will result from this unplanned downtime?
    Answer. USDA's Farm Service Agency (FSA) can provide direct and 
guaranteed loans to operators of a family farm who meet program 
eligibility requirements and can project a feasible plan based on 
reliable projected income. The maximum loan amount for a direct 
operating loan is $300,000, and for a guaranteed operating loan is 
$1,392,000. Direct and guaranteed operating loan funds may be used to 
pay operating expenses, develop farmland and make facility 
improvements, including biosecurity improvements, buy livestock and 
equipment, and pay family living expenses. Use of an FSA guarantee may 
allow a lender to restructure a borrower's debts and continue 
financing. FSA is working with lenders and producers in affected areas 
in an effort to address credit needs.
    In addition, FSA offers servicing options to assist producers who 
have outstanding loans and are not able to make scheduled payments. FSA 
is committed to using all available authorities to assist borrowers 
impacted by HPAI.
    USDA's Risk Management Agency (RMA) awarded a contract to conduct a 
feasibility study as required by the 2014 Farm Bill for insuring 
poultry producers against catastrophic loss due to disease. Due to the 
HPAI outbreaks, RMA extended the timeline so that the contractor could 
gather as much information as possible from impacted producers by this 
event. RMA anticipates transmitting the draft report to Congress in the 
fall of 2015. Based on the outcome and recommendations of the study, 
RMA will then determine next steps for moving forward on the potential 
development of an insurance product.

    Question 24. What has been the economic impact, to date, of the 
avian influenza outbreaks on the poultry industries?
    Answer. We estimate that net economic losses at the national level 
for U.S. feed, livestock, and poultry producers combined total $1.0 
billion from the first quarter of 2015 through a recovery period ending 
the fourth quarter of 2017. The largest losses occur for broiler meat 
and turkey meat due to embargoed trade and for crop producers due to 
reduced demand for feed. We estimate that producer net losses over the 
same 3 year period would have been as much as two to three times 
greater absent the APHIS response to stamp out spread of the disease as 
quickly as possible.

    Question 25. How do trading partners make the decision to restrict 
trade? Which guidelines do they follow?
    Answer. Veterinary officials in each country determine if there is 
risk to their poultry industry stemming from importations of different 
commodities. Processes vary by country and should be--but are not 
always--based on science (risk determinations) and international 
standards. The World Organization for Animal Health guidelines advise a 
regionalized approach for trade restrictions, and we encourage our 
trading partners to adhere as closely as possible to these standards as 
we do when we decide what products we can or cannot allow into the 
country.

    Question 26. Regarding trade implications, when can a restricted or 
control zone be declared disease free? When will this declaration be 
recognized by trading partners?
    Answer. The control zone is released when the State determines it 
is free of risk. Some States chose to keep control zones in place 
longer than others. In general, once the flock has been depopulated and 
there has been adequate surveillance of the poultry in that zone to be 
sure there are no active infections, the zone can be released. We 
consider the zone as free of infection 90 days following the date that 
cleaning and disinfection has been completed, which is consistent with 
international animal health guidelines. Once the 90 days is up, we 
notify trading partners through our updates to the World Organization 
for Animal Health (OIE) or individually as per our trade agreements. 
Trading partners make individual determinations on when to recognize 
the elimination of these zones, although we urge all of them to adhere 
to international standards, which recognize HPAI-free status after 90 
days of eradication.

    Question 27. What is the chain of command in place in each state to 
respond to an outbreak?
    Answer. HPAI outbreaks are managed at the local or state level 
until local resources are overwhelmed. Upon request by the state, APHIS 
will then supply additional resources to assist in the incident. When 
that occurs the state and APHIS work collaboratively under a joint 
command structure to manage the incident.

    Question 28. Have any gaps in communication between response team 
members been identified during the previous outbreak? How can these be 
addressed?
    Answer. Communication is always an area for improvement, and APHIS 
is working on ways to better communicate within teams. APHIS held a 
meeting of the Incident Management Teams on September 1-3, 2015, and 
one of the topics was to develop better processes that will reduce or 
minimize any communication gaps. Among those processes, we have 
developed plans to expand public outreach to producers and communities 
impacted by HPAI to ensure that a more consistent and timely message is 
delivered. We have also identified the need for unified joint commands 
where APHIS and state officials are physically together to share 
information and make decisions. We intend to establish joint commands 
for any future HPAI response efforts that require state and APHIS 
partnership and coordination.

    Question 29. We know USDA along with the poultry industry recently 
finished a 2 day conference on ``lessons learned'' in Iowa. Can you 
share any preliminary results from that meeting? What is APHIS doing to 
ensure the knowledge gained from this disaster is captured, analyzed 
and utilized for future disasters?
    Answer. APHIS used the knowledge gained from the Iowa conference to 
enhance preparedness for fall. Among the topics discussed at the Iowa 
conference were setting a goal of depopulation within 24 hours, 
establishing a flat rate for payments to eliminate virus from affected 
facilities, and preparing to be able to utilize vaccination as a 
response tool. APHIS incorporated input from that conference in those 
three areas--as well as input received from the other meetings and 
conferences held throughout the summer--into the Fall plan, which it 
released publicly in September.

    Question 30. We have learned from this AI outbreak that it takes a 
tremendous amount of human resources to deal with all of the challenges 
associated with something this size. Has Congress given you all of the 
resources needed to be able to address this problem adequately? Do we 
have enough trained resources to handle a similar outbreak in multiple 
locations this fall?
    Answer. Under the Animal Health Protection Act, the Secretary has 
the authority to request funding from the Commodity Credit Corporation 
(CCC) to deal with outbreaks of foreign animal diseases. We have used 
this authority to fund our emergency response activities to this point, 
and should we identify additional needs, we will consider requesting 
the use of additional CCC funds . . . As part of our previous funding 
requests, and to prepare for any potential fall outbreaks, we received 
funding to begin hiring additional term employees, including veterinary 
medical officers and animal health technicians and the production of 
vaccine to be used if deemed necessary. APHIS has also added another 
Incident Management Team composed of employees who are specifically 
trained to respond to an animal health emergency.

    Question 31. This question is directed at the broader work USDA and 
APHIS conducts regarding the vaccine strategy for future foreign animal 
disease outbreaks. We have been advised there is a serious shortage of 
Foot-and-Mouth Disease (FMD) vaccine needed to manage an outbreak. Can 
you enlighten the Committee on this issue and how you plan to deal with 
this shortage? Do you have an estimate of the cost of improving vaccine 
availability and have you requested additional appropriations to 
address the problem? We have also been advised the Administration 
believes the livestock industry should help pay for an expanded FMD 
vaccine bank. How would you propose that industry help pay for FMD 
vaccine? Have you offered a plan to the industry?
    Answer. APHIS considers the use of vaccines a key tool in our 
ability to eradicate FMD should it enter the country. Accordingly, we 
maintain a supply of about 25 million doses of vaccine across multiple 
strains in the North American Vaccine Bank. However, this amount of 
vaccine on-hand will not be sufficient to eliminate a large outbreak of 
the disease.
    Estimates of the amount of vaccine needed to address an outbreak of 
FMD in the United States vary. Dr. Jim Roth of the Iowa State 
University Center for Food Security and Public Health did a study that 
recommends 250 million doses of vaccine across multiple strains, which 
would cost $150 million per year for 5 years. APHIS has set a 
preliminary goal of increasing to 35-40 million doses of vaccine across 
multiple strains.
    APHIS' 2016 appropriations request included $1.2 million for the 
North American Vaccine Bank. This amount is a continuation of baseline 
funding and would only maintain the vaccine bank at its current size.
    Given the mismatch between estimates of vaccine need and what APHIS 
currently has access to, the Agency has had discussions with industry 
about how best to address the gaps in vaccine coverage. Those 
discussions have included a range of alternatives, including Federal-
industry cost-sharing, to fund efforts to eliminate the shortage, and 
those conversations with industry are ongoing. APHIS and industry 
recognize the need for an increased vaccine stock, and we are committed 
to working with our partners to identify solutions.
Question Submitted by Hon. Jim Costa, a Representative in Congress from 
        California
    Question. Please explain how the agency is engaging with our 
trading partners to minimize trade disruptions and provide an update on 
such discussions that have taken place or are scheduled to occur.
    Answer. USDA has had regular discussions with our partners to 
minimize the impacts of the HPAI outbreak on trade. In June, USDA 
participated in the International Conference on Avian Influenza and 
Poultry Trade in Baltimore, Maryland. There, USDA directly engaged 
trading partners around the world to discuss how to minimize the risks 
of the disease and to ensure continuity of safe trade. APHIS officials 
have been continuing those conversations and met directly with key 
trading partners to emphasize the safety of U.S. poultry products 
throughout September.

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