    [Senate Hearing 114-153]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 114-153

                               HIGHLY PATHOGENIC
                                AVIAN INFLUENZA:
                               THE IMPACT ON THE
                            U.S. POULTRY SECTOR AND
                         PROTECTING U.S. POULTRY FLOCKS

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

                                    HEARING

                                   before the

                           COMMITTEE ON AGRICULTURE,
                            NUTRITION, AND FORESTRY

                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  JULY 7, 2015

                                   __________

                           Printed for the use of the
               Committee on Agriculture, Nutrition, and Forestry

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.fdsys.gov/
                                   ________

                        U.S. GOVERNMENT PUBLISHING OFFICE

     96-181 PDF                 WASHINGTON : 2016
    _________________________________________________________________________________
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               COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

                         PAT ROBERTS, Kansas, Chairman

    THAD COCHRAN, Mississippi            DEBBIE STABENOW, Michigan
    MITCH McCONNELL, Kentucky            PATRICK J. LEAHY, Vermont
    JOHN BOOZMAN, Arkansas               SHERROD BROWN, Ohio
    JOHN HOEVEN, North Dakota            AMY KLOBUCHAR, Minnesota
    DAVID PERDUE, Georgia                MICHAEL BENNET, Colorado
    JONI ERNST, Iowa                     KIRSTEN GILLIBRAND, New York
    THOM TILLIS, North Carolina          JOE DONNELLY, Indiana
    BEN SASSE, Nebraska                  HEIDI HEITKAMP, North Dakota
    CHARLES GRASSLEY, Iowa               ROBERT P. CASEY, Jr., Pennsylvania
    JOHN THUNE, South Dakota

                   Joel T. Leftwich, Majority Staff Director

                    Anne C. Hazlett, Majority Chief Counsel

                        Jessica L. Williams, Chief Clerk

                   Joseph A. Shultz, Minority Staff Director

                  Jonathan J. Cordone, Minority Chief Counsel

                                      (ii)

                                C O N T E N T S

                                  ----------
                                                                       Page

    Hearing(s):

    Highly Pathogenic Avian Influenza: The Impact on the U.S. Poultry
      Sector and Protecting U.S. Poultry Flocks......................     1

                                  ----------

                             Tuesday, July 7, 2015
                        STATEMENTS PRESENTED BY SENATORS

    Roberts, Hon. Pat, U.S. Senator from the State of Kansas,
      Chairman, Committee on Agriculture, Nutrition, and Forestry....     1
    Stabenow, Hon. Debbie, U.S. Senator from the State of Michigan...     2
    Grassley, Hon. Charles, U.S. Senator from the State of Iowa......    18
    Casey, Hon. Robert, Jr., U.S. Senator from the State of
      Pennsylvania...................................................    19
    Thune, Hon. John, U.S. Senator from the State of South Dakota....    37

                                    Panel I

    Clifford, John R., D.V.M., Deputy Administrator, Animal Plant
      Health Inspection Service, Veterinary Services, U.S. Department
      of Agriculture, Washington, DC.................................     4
    Swayne, David, D.V.M., Laboratory Director, Southeast Poultry
      Research Laboratory, Agricultural Research Service, U.S.
      Department of Agriculture, Athens, GA..........................     6

                                    Panel II

    Dean, James R., Chairman, United Egg Producers, Sioux Center, IA.    28
    Klippen, Ken, President, National Association of Egg Farmers,
      Collegeville, PA...............................................    30
    Moline, Brad R., Manager, Owner, Moline Farms LLC, Manson, IA....    31
    Knecht, Rob, President, Vice President of Operations, Michigan
      Allied Poultry Industries and Konos, Inc., Martin, MI..........    33
    Elam, Thomas, Dr., President, FarmEcon LLC, Carmel, IN...........    34
                                  ----------

                                    APPENDIX

    Prepared Statements:
        Casey, Hon. Robert, Jr.......................................    46
        Grassley, Hon. Charles.......................................    47
        Thune, Hon. John.............................................    48
        Clifford, John R.............................................    52
        Dean, James R................................................    59
        Elam, Thomas.................................................    64
        Klippen, Ken.................................................    67
        Knecht, Rob..................................................    75
        Moline, Brad R...............................................    79
        Swayne, David................................................    87
    Document(s) Submitted for the Record:
    Hon. Pat Roberts:
        American Bankers Association, prepared statement.............    92
        National Pasta Association, prepared statement...............    95
        Rembrandt Foods, prepared statement..........................    97
    Elam, Thomas:
        Economic Losses from the 2015 Highly Pathogenic Avian Flu
          Outbreak...................................................   100
    Question and Answer:
    Clifford, John R.:
        Written response to questions from Hon. Pat Roberts..........   108
        Written response to questions from Hon. David Perdue.........   109
        Written response to questions from Hon. Charles Grassley.....   110
        Written response to questions from Hon. John Thune...........   111
        Written response to questions from Hon. Joe Donnelly.........   113
    Dean, James R.:
        Written response to questions from Hon. John Thune...........   115
    Elam, Thomas:
        Written response to questions from Hon. John Thune...........   117
    Klippen, Ken:
        Written response to questions from Hon. John Thune...........   118
    Knecht, Rob:
        Written response to questions from Hon. John Thune...........   119
    Moline, Brad R.:
        Written response to questions from Hon. John Thune...........   120
    Swayne, David:
        Written response to questions from Hon. John Thune...........   114

                               HIGHLY PATHOGENIC

                                AVIAN INFLUENZA:

                               THE IMPACT ON THE

                            U.S. POULTRY SECTOR AND

                         PROTECTING U.S. POULTRY FLOCKS

                                  ----------

                             Tuesday, July 7, 2015

                                  United States Senate,
             Committee on Agriculture, Nutrition, and Forestry,
                                                         Washington, DC
        The committee met, pursuant to notice, at 3:02 p.m., in
    room 328A, Russell Senate Office Building, Hon. Pat Roberts,
    Chairman of the committee, presiding.
        Present or submitting a statement: Senators Roberts,
    Cochran, Boozman, Hoeven, Ernst, Perdue, Tillis, Grassley,
    Thune, Stabenow, Brown, Klobuchar, Bennet, Donnelly, and Casey.

     STATEMENT OF HON. PAT ROBERTS, U.S. SENATOR FROM THE STATE OF
    KANSAS, CHAIRMAN, U.S. COMMITTEE ON AGRICULTURE, NUTRITION, AND
                                FORESTRY

        Chairman Roberts. Good afternoon. I call this meeting of
    the Senate Committee on Agriculture, Nutrition, and Forestry to
    order.
        We are here today to learn from the stakeholders on highly
    pathogenic avian influenza, the impact on the U.S. poultry
    sector. Thank you to our witnesses for sharing their experience
    with highly pathogenic avian influenza, or HPAI. I know several
    of you have had infected farms and others have been on the
    front lines of this response.
        I commend the U.S. Department of Agriculture, the State
    Departments of Agriculture, and the impacted sectors for their
    coordination and diligence in addressing HPAI. If it were not
    for the rapid response by all involved, including impacted
    producers, the virus could have caused much more damage. The
    rapid response demonstrated by government and industry alike is
    the kind of coordinated effort that will ensure the U.S.
    poultry sector weathers the storm.
        I am also pleased to share that many of the first farms hit
    with HPAI in the Upper Midwest have begun repopulating their
    farms. This is a critical step because it enables these farms
    to begin generating income again.
        As we will hear from experts today, it is important to
    emphasize the fact that this outbreak of HPAI poses no food
    safety risk--no food safety risk--nor does it pose any public
    health risks. While this outbreak has caused severe disruption
    to the U.S. poultry sector and to its retailers, it is
    important to reiterate the fact there has been no impact on
    human health or food safety. Nevertheless, this has been and
    continues to be an incredible taxing and trying situation for
    the individuals and industries that are represented and are
    here today.
        Agriculture is a high-risk business, and our poultry and
    egg producers are experiencing firsthand the damaging tolls
    some of these risks take on their operations. Many of the
    impacted farms employ dozens, or in some cases hundreds, of
    people. These businesses are often the backbones of rural
    communities that dot the American countryside, and the ripple
    effect that HPAI has had on these rural communities is dramatic
    and widespread.
        It is critical that we hear some of the lessons learned
    from the impacted industries and from the animal health experts
    at the Department of Agriculture. We need to identify
    improvements that must be made to both our national animal
    health infrastructure and biosecurity measures on farms to
    ensure the U.S. poultry and livestock sectors are protected
    from future disease threats.
        In 2013 and 2014, the U.S. pork sector was plagued with a
    similar devastating virus. Now, in 2015, we are experiencing
    HPAI, which has resulted in depopulation of ten percent of egg-
    laying hens and three percent of turkeys now produced in the
    United States. Both of these experiences have emphasized the
    importance of bolstering our animal health infrastructure and
    foreign animal disease preparedness here in the United States.
        U.S. businesses such as food producers and restaurant
    owners want to ensure that disease threats like HPAI do not
    continue to cause the extreme price volatility they have been
    working hard to manage. It is critical that we take the lessons
    learned from this outbreak and put them to good use. We need to
    take a good hard look at the animal health infrastructure here
    in the United States so we have the proper measures in place to
    continue to protect poultry, livestock, and, thus, the global
    food supply.
        U.S. agriculture has a long history of providing the
    safest, must abundant food supply in the world. That is due to
    the strength and dedication of our producers. I am confident
    that even in the face of today's challenges, our farmers will
    continue to deliver safe, affordable, and abundant products.
        I now recognize the distinguished ranking member, Senator
    Stabenow.

    STATEMENT OF HON. DEBBIE STABENOW, U.S. SENATOR FROM THE STATE
                              OF MICHIGAN

        Senator Stabenow. Well, thank you very much, Mr. Chairman,
    for holding this very important and very timely hearing, and
    thank you to all of our witnesses for testifying today. We look
    forward to hearing your perspectives this afternoon.
        We meet today because American poultry and egg producers
    are experiencing an unprecedented animal health crisis, as the
    Chairman has said. Since December 2014, avian flu has affected
    more than 48 million birds--it is stunning when you think about
    that, 48 million birds--in 15 states, causing economic hardship
    for producers, driving up the cost of food for consumers, and
    threatening international trade.
        As a sign of the difficulties producers are facing, this
    year is the first year in more than a decade that the United
    States will import eggs from European markets to help make up
    the shortage from the millions of birds lost to the outbreak.
        Members of the committee know these facts especially well.
    Senators Grassley and Ernst and Klobuchar's home states of Iowa
    and Minnesota have experienced the worst of the crisis, and my
    thoughts are with the producers in your states.
        Addressing avian influenza and the variety of challenges it
    presents requires all stakeholders, both public and private, to
    work together. Since the start of the outbreak, the U.S.
    Department of Agriculture, alongside state governments, have
    moved swiftly to help producers, and I join with the Chairman
    in applauding those efforts. That work and continuing a close
    collaboration with industry is essential to moving forward in a
    way that maximizes the effectiveness of relief efforts while
    helping our producers on the path to recovery. That teamwork
    also sends a strong signal to customers at home and abroad that
    America's poultry sector remains open and eager for business.
        I look forward to working with you, Mr. Chairman and
    members of the committee, as we move forward to do whatever we
    can to support this important industry. Thank you.
        Chairman Roberts. I thank the Senator.
        Before we welcome our first panel of witnesses, is
    Congressman King from Iowa in the audience? We would welcome
    him here. Perhaps he will appear later.
        Our first witness is Dr. John Clifford, Deputy
    Administrator Animal and Plant Health Inspection Service,
    Veterinary Services, the U.S. Department of Agriculture here in
    Washington. Dr. Clifford has played a key role in safeguarding
    U.S. animal health since he started his career at APHIS in
    1985. Dr. Clifford has been Deputy Administrator of APHIS's
    Veterinary Services since May of 2004, and prior to that, he
    served as the Associate Deputy Administrator. In those roles,
    Dr. Clifford has led the Veterinary Services efforts to
    protect, sustain, and improve the productivity, marketability,
    and health of the nation's animals.
        Before beginning his work with APHIS, Dr. Clifford was a
    private veterinarian in a mixed animal practice. He received a
    Doctorate in Veterinary Medicine from the University of
    Missouri, home of the Tigers, formerly of the Big 12----
        [Laughter.]
        Chairman Roberts. I am pleased to welcome you to the
    committee today, Dr. Clifford.
        Then our second witness is Dr. David Swayne, who will be
    introduced later by Senator Perdue. No, I beg your pardon. You
    are going to introduce him right now.
        [Laughter.]
        Senator Perdue. Very good. Thank you, Mr. Chairman.
        Mr. Chairman, I am honored to introduce Dr. David Swayne.
    Dr. Swayne, I appreciate you appearing today before this
    Agriculture Committee. We are certainly honored to have what
    many would consider the foremost authority on avian influenza
    in the country here for this very important hearing. Thank you
    for being here.
        Dr. Swayne received his Ph.D. from the University of
    Georgia in 1987 and has been Director of the National Poultry
    Research Center in Athens, Georgia, since 1994. Although it
    took a few years to get him back to Georgia, we are proud he
    has been leading research in this area that is so crucial to my
    state's economy for the past two decades.
        Dr. Swayne's personal research has focused largely on the
    control of avian influenza in poultry. He has served on the
    World Organization for Animal Health, Committee on the
    Terrestrial Animal Health Code, and he currently serves as the
    Chair of the United Nations Food and Agricultural Organization.
        In addition to his Ph.D. from the University of Georgia,
    Dr. Swayne holds a Doctorate of Veterinary Medicine from the
    University of Missouri and is a board certified specialist in
    veterinary pathology.
        On a personal note, Dr. Swayne knows the devastating impact
    of HPAI and Georgians' concerns about what could happen if
    poultry stock was exposed in our state to this devastating
    strain of bird flu. He has worked closely with people in the
    state to make sure information about biosecurity best practices
    is made available.
        Dr. Swayne, thank you for being here. Welcome. I certainly
    appreciate your insights on this important issue and we all
    look forward to your testimony. Thank you.
        Chairman Roberts. I thank the Senator.
        Dr. Clifford, would you please address the committee.

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

        Dr. Clifford. Thank you, Mr. Chairman, and I am sorry I
    cannot do anything about what conference Missouri is in. I
    liked it better, personally, when it was the Big Eight.
        [Laughter.]
        Chairman Roberts. We share the same view.
        [Laughter.]
        Dr. Clifford. Thank you again, Mr. Chairman and members of
    the committee, and thank you for the opportunity to testify
    before you today on behalf of the United States Department of
    Agriculture.
        In recent weeks, the number of new detections of highly
    pathogenic avian influenza found at U.S. poultry farms has
    slowed considerably. In fact, it has been over two weeks since
    we found a case in Iowa, and probably approaching three weeks
    and approaching four weeks, if not there, for--already over
    four weeks, I believe, since we found the last case in
    Minnesota. So, these are bright spots in the largest animal
    health emergency in our country's history.
        While encouraging developments, the impact of this
    unprecedented disease outbreak is still being felt throughout
    our industries. Trading partners have restricted U.S. poultry
    exports. The risk of the disease reemerging in the fall or
    spring is significant.
        Our hearts go out to the affected producers, their
    employees, and the communities they live and support. I assure
    you that this disease has the USDA's fullest attention and we
    are committing to standing with our producers and industry to
    get them back on their feet.
        The Secretary of Agriculture is leading efforts to respond
    to this virus, assist producers, and maintain trade markets. As
    we look to the fall, we will be ready for the challenge.
        More than 400 USDA staff and over 2,000 USDA contracted
    personnel have been working around the clock in every affected
    state on this response. We have delivered over $180 million in
    indemnification payments to producers to control the spread of
    the disease and to help them recover. All told, USDA has
    committed over $500 million, an amount more than half of
    APHIS's yearly budget, in responding aggressively to this
    outbreak. We can and will request additional funds, should we
    need to.
        We have carefully studied and assessed the epidemiology of
    the virus as well as our response efforts in conjunction with
    our state and industry partners. We know that while birds
    brought this disease to the Western U.S. in late 2014, as the
    birds and virus moved into the Midwest, we saw point source
    introductions as well as farm-to-farm spread of the virus.
        Although we cannot point to a single specific practice that
    caused this, our epidemiological reports suggest that lapses in
    biosecurity were a contributing factor. We have talked at
    length with the state and industry partners about our findings
    and the need for all of us to think more comprehensively about
    on-farm biosecurity.
        We all agree we are in this fight together. We have a
    shared interest in eradicating this disease and getting the
    poultry industry back on its feet. Last week, we met with the
    industry and state officials to ensure that we have a high
    level of preparedness to deal with the reemergence and possible
    spread of the virus come fall. We have encouraged our partners
    to review the existing Avian Influenza Response Plan so that
    they understand what we will expect and what actions we will
    need them to take should the disease strike.
        We are also urging states and industry to develop site and
    country-level specific depopulation plans for landfilling or
    composting birds. Our experience in the Midwest showed us the
    biggest roadblock to efficient depopulation is the lack of
    ready sites to receive and process dead birds.
        For our part, we are taking proactive steps to be ready for
    the fall. We are identifying staffing needs and hiring more
    than 450 additional temporary employees, including 210 animal
    health technicians and 90 veterinary medical officers. We are
    also developing a potential vaccine strategy. Should we decide
    to use vaccines to address the outbreak, we will have the
    systems in place to do so. As part of our planning, we are also
    working with our partners to increase surveillance of wild bird
    populations. We need to be able to identify the virus as
    present as quickly as possible to stamp it out.
        Later this month, we will be meeting directly with state
    veterinarians and industry to discuss the need for more
    biosecurity. The meeting in Des Moines will help ensure that
    our collective biosecurity is more stringent and that we are
    prepared as we again prepare for the fall.
        I want to thank all of our partners in the industry and the
    states for their cooperation in this process. Their efforts and
    willingness to work with us are appreciated and will help us as
    we plan for the fall.
        Mr. Chairman, this concludes my testimony.
        [The prepared statement of Dr. Clifford can be found on
    page 52 in the appendix.]
        Chairman Roberts. Well, Dr. Clifford, thank you so much.
    You are right on time.
        We turn now to Dr. Swayne.

        STATEMENT OF DAVID SWAYNE, D.V.M., LABORATORY DIRECTOR,
     SOUTHEAST POULTRY RESEARCH LABORATORY, AGRICULTURAL RESEARCH
        SERVICE, U.S. DEPARTMENT OF AGRICULTURE, ATHENS, GEORGIA

        Dr. Swayne. Chairman Roberts, Ranking Member Stabenow, and
    members of the committee, I am the Laboratory Director of the
    Southeast Poultry Research Laboratory, which is part of the
    Agricultural Research Service's U.S. National Poultry Research
    Center in Athens, Georgia. ARS is committed to eradicating the
    HPAI virus at the center of the current North American outbreak
    through providing cutting-edge research and diagnostics,
    molecular epidemiology, pathology, and vaccinology.
        In response to the first detections of HPAI in the United
    States, ARS refocused its HPAI research program to the most
    imminent research needs. Within weeks, a rapid molecular test
    was developed to detect the Asian H5 HPAI virus, which quickly
    differentiated it from the North American low path AI viruses.
    This test was transferred to the National Vet Services
    Laboratory of APHIS and is the core test in the diagnostic
    effort to rapidly identify vaccinated flocks.
        We conducted studies to understand how the early HPAI
    viruses infected and caused disease in birds. In chickens and
    turkeys, high-exposure doses were needed to produce infections,
    and bird-to-bird contact transmission was inefficient. But all
    infected chickens and turkeys became ill and died. By contrast,
    domestic ducks and mallards became infected with low doses of
    virus and had more efficient contact transmission, but they did
    not become ill or die.
        Subsequent experiments using later Midwest HPAI viruses
    required less virus to infect chickens and contact transmission
    occurred more easily, this indicating the later HPAI viruses
    had changed and were more easily transmitted to and among
    chickens and turkeys.
        In extending the laboratory data to the field situation,
    ARS researchers teamed up with APHIS virologists and
    epidemiologists as well as field and university poultry
    veterinarians by providing them with genetic analysis of HPAI
    viruses in order to focus the epidemiologic investigations.
    Genetic analysis supported a point source introduction from
    infected waterfowl to poultry in the Pacific flyway and the
    early cases in the Midwest area. However, the later Midwest
    viruses showed evidence of common source introduction for
    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 H5N1 HPAI virus, a primary focus on vaccination
    for control has not led to immediate eradication. Ninety-nine
    percent of the HPAI vaccine has been used in China, Egypt,
    Vietnam, and Indonesia, where H5N1 HPAI is endemic. In these
    countries, prolonged vaccination use has been associated with
    vaccine failure and emergence of vaccine resistance,
    necessitating continued surveillance for vaccine-resistant
    strains and periodic change of the vaccine seed strain to more
    closely match the circulating HPAI field viruses.
        In support of APHIS, ARS conducts HPAI vaccine seed strain
    development and testing as a 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 vaccine
    is determined by APHIS. Currently, ARS has developed a new
    vaccine seed strain for inactivated vaccines and is conducting
    protection studies in chickens and turkeys. If viable, the
    vaccine seed strain will be transferred to a commercial vaccine
    manufacturer. In addition, ARS is evaluating registered AI
    vaccines for protection in chickens and turkeys against current
    outbreak viruses.
        Vaccination can play a helpful role in disease eradication
    if properly implemented, but globally, vaccination has
    negatively impacted 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 termed DIVA testing, development and validation of
    DIVA vaccination strategies is a research priority.
        In conclusion, the current HPAI outbreak presents unique
    and unprecedented challenges to the U.S. poultry industry and
    ARS and collaborators immediately shifted their research
    programs to high-priority areas: One, infectivity and
    transmission studies in poultry and wild birds; two, rapid
    diagnostic test development for detecting Asian H5 HPAI virus;
    three, molecular epidemiologic studies on virus spread; and
    four, development of efficacious vaccines and an effective
    vaccination strategy.
        Thank you again for the opportunity to testify and for
    Congressional support as we continue to fight this virus.
        [The prepared statement of Dr. Swayne can be found on page
    87 in the appendix.]
        Chairman Roberts. Well, thank you both, again, for taking
    the time to join us today. We appreciate you sharing your
    expertise and your firsthand experience managing this outbreak.
        For both of you, please describe as quickly as you can, but
    also be thorough, which I know you will, some of the protocols
    that are in place to ensure the safety of the food supply and
    public health. We will start with you, Dr. Clifford.
        Dr. Clifford. Thank you, Mr. Chairman. With regards to
    highly pathogenic avian influenza, this virus, because it kills
    birds, and then the way we eradicate this virus, none of these
    birds go to slaughter, and if they did go to slaughter, they
    would be condemned at slaughter because of the virus itself and
    the destruction this virus causes in the bird itself. So, it
    would never--this virus would not be entering the food supply.
        Having said that, the virus itself does not cause any
    particular concern at this time to the Centers for Disease
    Control and Health and Human Services. We monitor that very,
    very closely with them. We provide the virus sequences to CDC
    on an ongoing basis.
        We do that as active surveillance continually, not just in
    this occurrence, but in other occurrences. We follow these
    viruses. As Dr. Swayne indicated, we also monitor the wild bird
    surveillance. We also have swine surveillance in this country
    that we also monitor so that we can be proactively protecting
    public health as well as animal health.
        Chairman Roberts. Dr. Swayne, anything you would like to
    add, sir?
        Dr. Swayne. I think it was adequately covered.
        Chairman Roberts. Dr. Swayne, outside of the current
    research being done on the two circulating strains of HPAI H5N2
    and H5N8, what additional research do you think is needed in
    order for the industry and government to combat this virus?
        Dr. Swayne. Research on vaccines is an important part of
    control programs globally, and our lab as well as other labs in
    the U.S. have done work to help other countries, such as Egypt,
    Indonesia, Vietnam, in combating their own problems with high
    path AI, and our neighbor to the south, Mexico. Additional work
    on H7N3, which is a big threat in Mexico, is needed, and it is
    always a concern for us here in the United States that that
    virus could move north across the border.
        Chairman Roberts. Dr. Clifford, avian influenza has left
    many wondering about the vulnerabilities that may exist within
    our national animal health protection infrastructure. Foreign
    animal disease threats, such as foot and mouth disease, could
    have widespread impacts. So, let us look forward. What
    additional steps could be taken to ensure we are ready to
    manage a disease like foot and mouth, should it appear in the
    U.S.?
        Dr. Clifford. Well, there are actually several things on
    that front. Let me first by saying we need to have adequate
    personnel to be able to address these issues. Since the
    beginning of sequestration, APHIS has lost about $430 million
    and about 800 positions.
        Of that, within Veterinary Services alone, to date, we have
    lost $36 million and 225 positions. But, at the beginning of
    this, we had lost initially $54 million and 250 positions. With
    the high path AI situation that we are faced with, we have
    limited field support. I have a total of about 1,800 people in
    my organization to respond and to prepare.
        With regards to foot and mouth disease--with all of these
    diseases, it is a shared effort and it has to be a shared
    effort between the industry and the states and the federal
    government. With regards to things like foot and mouth
    disease--and I would like to even address this, if I could, and
    take a moment to expand it to high path AI and other diseases--
    we in the world, worldwide and internationally, have to stop
    eradicating diseases through the total destruction of animals
    and depopulation of animals.
        We need to find new ways to save animals and that protein
    for their families, for the owners, for the companies, for
    trade, for a lot of reasons, economics, and it is also a waste
    of protein. The only way we can do that is to put new tools in
    our toolbox and to effectively develop new strains of vaccine
    or other types of treatment to be able to address these issues.
        In the case of foot and mouth disease, we need an
    appropriate level of vaccine bank. Our previous vaccine bank
    was based upon an eradication, go in and kill, approach. It was
    not based upon a vaccine to live or a vaccine to kill approach.
    Besides the resource needs, we would need adequate levels of
    vaccine. The National Veterinary Stockpile, which, when it was
    started quite a few years ago, the idea was for it to have $20
    million to help support these efforts. It is funded, I believe,
    to date, at $4 million for the National Veterinary Stockpile.
        The same way with high path AI. We have got to find out
    better ways and better tools to control this disease. We have
    got to have facilities--and I do not have a problem with
    integrated facilities or outdoor birds. This virus does not
    care which way it is. But, if we are building facilities, we
    have to build facilities that will protect one house from
    another house, so if you get the disease in one house, we can
    destroy 100,000 birds, not three million.
        Chairman Roberts. I thank you, Dr. Clifford.
        Dr. Swayne, would you like to add anything, with apologies
    to my colleagues for going overtime.
        Dr. Swayne. I think the issue for us is the same as APHIS,
    is that our funding level has required us to reduce staffing
    over the last 12 years from 35 staff members who worked full
    time on avian influenza down to 20, and so with immediate
    research response in an outbreak like that, we have a limited
    number of staff and also aging facilities.
        We appreciate the Senate obligating in fiscal year 2014 $45
    million, which is to be used to upgrade some of our existing
    facilities, and there is a request in the budget for 2016 for
    the final piece of that budget, $113 million, the final upgrade
    of all facilities, and that is needed for us to be able to
    respond quickly and carry on the experiments we need to do to
    support the poultry industry.
        Our handicap in the size of our facilities and the aging
    facilities has restricted the type of studies we can do. So,
    for example, we cannot do studies in 12-week-old turkeys or
    older, which are a critical part of the outbreaks in both
    Minnesota and Iowa.
        Chairman Roberts. Thank you, gentlemen.
        Senator Stabenow.
        Senator Stabenow. Well, thank you very much, Mr. Chairman.
        Just along the size of what you just indicated, the ongoing
    concern that I have in a number of fronts is that we are penny-
    wise and pound-foolish as we look at various things, where we
    need to be getting ahead of it in terms of prevention, and we
    wait until we are in this crisis and do not have the tools, Dr.
    Clifford, as you were talking about, to make sure we are saving
    as many birds as possible or getting ahead of this.
        That is an ongoing concern that I have in general about the
    way we are budgeting and lack of really strategically thinking
    things through in terms of what is a smart way to provide
    funding.
        Specifically on the avian influenza, when we look at the
    fact that this popped up very quickly in the spring in the
    Mississippi flyway, and when we are talking about how quickly
    you had to move--and again, congratulations to everyone working
    as a team to respond to this crisis--when you look going
    forward, what are the lessons you learned from the spring in
    terms of being effective, timely mitigation, and when you look
    going forward from here, what do you think in terms of a
    government response has positioned you for a potentially
    difficult fall?
        So, what have you learned to this point? What does it mean
    in terms of responding going on into the fall?
        Dr. Clifford. So, I will hit a couple of those areas. I
    think, initially, our response, while we were onsite rapidly,
    it is key to put birds down quickly, and in some cases, there
    were delays in doing that for a multitude of reasons. We have
    got to not allow that to occur, because the longer birds live,
    the more virus production and, therefore, the more likelihood
    of more environmental contamination, more spread. So, that is
    one lesson learned.
        Now, we rapidly caught up to that after a while in
    Minnesota and were able to get the turkeys down pretty quickly
    after we caught up, got the kind of crews available, but there
    are other issues here that need to be through the planning
    process. I mentioned in my testimony about disposal. We had to
    go for quite some time--in fact, we had to initiate and call in
    Secretary Vilsack and the Governor of Iowa to address issues of
    landfill use in the State of Iowa while the state itself had
    already preplanned and had some of these things lined up.
        But when it comes to the actual outbreak, people get
    concerned. There are perceptions about these types of things,
    and they are concerned about their own livelihood and the way
    it is going to be viewed by others. It is the same way as a
    brand name. It was hard to break down some of those barriers
    initially.
        In addition, we have got to find a better way to get these
    birds euthanized properly, killed properly, humanely, but in
    these larger facilities, we have got to do it in a more timely
    way, and we are having some more of the discussions around that
    particular topic, as well. We are going to be meeting--a group
    of veterinarians will be meeting with the AVMA this coming
    weekend in Boston to discuss some of those strategies and to
    get the support of the American Veterinary Medical Association
    for some of that.
        Senator Stabenow. Thank you.
        Dr. Swayne, did you want to respond to that, as well?
        Dr. Swayne. Yes, just briefly. I think for us and our lab,
    we will be concentrating on a couple of things as research
    between now and the fall. One is assisting APHIS in some of the
    epidemiologic studies to try to identify risk factors that may
    be associated with movement of these viruses onto farms, and
    hopefully through that process, that will help the companies
    and the farmers to reestablish their biosecurity strategies to
    reduce any potential entry of that virus back into the farms.
        Also, we will be spending the next several months
    concentrating most of our laboratory research efforts on
    vaccines, but also vaccination protocols and how realistic they
    could be for use in the fall.
        Then we will be working closely with colleagues on the
    wildlife health side in identifying the viruses that might be
    in wild waterfowl and determining if they are more adapted to
    waterfowl or if they are similar to the Midwest poultry adapted
    viruses, and that will determine the strategy for prevention in
    the fall.
        Senator Stabenow. Thank you.
        Finally, just very quickly, Dr. Clifford, because this is a
    team effort between the public and the private sector, just
    wondering, when you think about potential cases or suggestions
    or concerns, how does that go from farm to the offices at
    APHIS?
        Dr. Clifford. Well, it is about communication and working
    together. So, I think in this particular outbreak situation, we
    had some issues initially, in the beginning of this, and we
    continued to improve communication until right now, it is
    really about working very closely with the industry and the
    states. We have held a meeting with the industry and states
    about a week ago to bring together--we brought together about
    90 people.
        I had an international meeting held in Baltimore, or we
    did, to talk about the actions the U.S. were taking, talking
    about what other actions the other countries were taking and
    how to collaborate and address some of these issues, such as
    the use of vaccines.
        So, we began some of those discussions there with the
    industry, states, and other countries. So, we are hearing the
    concerns from the industry and we will be incorporating those
    into our action plans for the fall.
        Senator Stabenow. Thank you, Mr. Chairman.
        Chairman Roberts. Senator Perdue.
        Senator Perdue. Thank you, Mr. Chairman.
        I really appreciate you guys being here. This is a critical
    thing for my state, as it is a lot of states right now. The
    Midwest has already seen major difficulties, obviously, and
    poultry producers nationwide are scrambling for answers and for
    help.
        Dr. Clifford, as you said in your testimony, people have
    lost their jobs and seen their livelihoods put in grave danger
    by this outbreak. You are exactly right. Georgians are fearful
    right now about what could happen to them in this next flyway
    season. I applaud the timely and coordinated efforts of USDA
    and Georgia agricultural officials as well as the University of
    Georgia scientists, but Georgians still eye the fall migration
    season warily, wondering what they can do to protect
    themselves.
        But, Dr. Swayne, as we look at this flyway season that is
    upcoming, I am searching to see what might be different. We had
    a question about best practices and what we learn, but I am
    also concerned about the strain of this influenza. You have
    successfully determined the strain, I think, that is causing
    the current outbreak. Do you see an evolution of this disease
    that is causing you concern right now about the upcoming season
    and next year, and is there a point at which the biosecurity
    best practices today will not be enough to contain future AI
    infections?
        Dr. Swayne. Those are excellent questions, and as
    scientists, we do not have all the answers. But, we do have a
    body of research data, some generated by the University of
    Georgia, on wild bird ecology with influenza viruses, and I
    know that that particular group, the Southeast Cooperative
    Wildlife Disease Study, is specifically working on trying to
    identify the viruses that might come back in the migration in
    the fall. That impacts not only Georgia, but all the Southeast
    and the Atlantic Coast flyways.
        That would be the first step, is the identification of the
    potential virus in those flyways, and from that, the
    information should be disseminated out through the poultry
    industries to tell the farmers that we do have a higher risk
    situation and they should reevaluate their biosecurity
    practices.
        That being said, the biosecurity practices sometimes are
    difficult to do, but they take deliberateness in making sure
    that they are practiced to the highest level and that any weak
    points that could be identified before such an event and be
    corrected will help the industry keep the virus out if it does
    occur in wild birds in the Atlantic flyway.
        Senator Perdue. Do we have any information from the Midwest
    in this latest outbreak about bird-to-bird infection versus
    human transfer and the communicable dimension of that? Do we
    have any information yet on that, either one of you?
        Dr. Swayne. I think we understand the basic principles of
    the epidemiology, and Dr. Clifford had in his written testimony
    listed that environmental contamination is probably the biggest
    issue that allows the virus to move around. That may have been
    initially in the Pacific flyway from wild birds contaminating
    the environment and that tracked in potentially around farms
    where birds may have been there eating residual feed that was
    spilled or having ponds too close to houses, that it made it
    easier to be tracked in.
        After the virus adapted in parts of the Midwest, then that
    contamination was in the barns and then more likely to have the
    tracking between barns by human activity--not that humans are
    affected, because they are not infected, but they can carry it
    on shoes, clothes, hands, and equipment that might be shared
    between farms.
        That is the challenge for all farmers, is to look at their
    comprehensive biosecurity plan, identify the weak points, and
    then take measures to prevent introduction, such as a better
    cleaning and disinfection program for maybe shared equipment,
    like manure spreaders or tractors, et cetera.
        Senator Perdue. Thank you.
        Dr. Clifford, very quickly, I am concerned about trade, as
    well, and the possible vaccination. Aside from the difficulties
    of inoculating a flock from the practical standpoint, do we
    have any evidence right now that our trading partners will
    really put a quiet stop to any export? I mean, broilers--in the
    State of Georgia, I think we are the largest producer of
    broilers, but I am really concerned about the--we also--that is
    our largest export, and I am very concerned about our ability
    to actually trade in this protein.
        Dr. Clifford. We, in May, when I was at the World
    Organization for Animal Health, discussed this with a number of
    our trading partners, and three or four of our trading partners
    indicated that they would definitely shut us off, the entire
    country, initially, until they had a chance to review the
    actions we were taking, why we were taking them, and what our
    plans--exit strategy for the use of vaccine was. So----
        Senator Perdue. Was that independent of inoculation?
        Dr. Clifford. That was independent, yes. I mean, that was
    if you use it, period. Now, one of the reasons for that is
    because worldwide, people look at the use of vaccine at times
    as the inability to control the spread of the disease. At the
    international meeting that we had, we pleaded with the
    countries to basically--we, as all countries internationally,
    need to allow all tools to be used in the toolbox, but that
    means use them appropriately for that task.
        So, our plans are--is to lay out the strategy for use, if
    we decide to use it. We will be meeting with our major trading
    partners, showing them that, and then seeing how they react to
    it before we make any final decisions.
        Senator Perdue. Thank you. Thank you, Mr. Chairman.
        Chairman Roberts. Senator Klobuchar.
        Senator Klobuchar. Thank you very much, Mr. Chairman, and
    thank you for holding this important hearing. As you probably
    know, Minnesota has the greatest number of turkeys produced in
    the country, and as a result, we were actually the hardest hit
    for turkeys, although I know Iowa was hard hit for laying hens
    and others.
        But, we are the hardest hit for turkeys and it is really--I
    have met with these producers, and as you know, Dr. Clifford,
    from visiting our state, it is not only an economic issue, it
    is an emotional issue for people that have really devoted their
    lives to this business and then suddenly to lose, really, their
    livelihood for a period of time, but also animals that they
    have been raising and it was really a difficult thing.
        So, some of the first farms affected by avian influenza in
    Minnesota have recently begun the process of restocking the
    barns with turkeys. It is great news. But cleaning and
    disinfecting, environmental sampling and a 21-day idling period
    before restocking can feel like an eternity to producers who
    have lost birds. I have heard from a few producers in Minnesota
    about the criteria for repopulating their flocks.
        Dr. Clifford, as more farms become ready for restocking, is
    USDA equipped to process the necessary paperwork in a timely
    fashion in order to get these farmers back in production, and
    can you provide an update on the USDA's efforts to develop and
    communicate a consistent disinfection and repopulation timeline
    for producers.
        Dr. Clifford. So, there are two things here that slow this
    process down. There is when we go in to depopulate a flock,
    which we have speeded up that process based on a presumptive
    positive, not based on a confirmed positive, and we immediately
    do an assessment of the number of birds present on that farm.
        Senator Klobuchar. Right.
        Dr. Clifford. Then they have to do a flock plan which they
    have to sign. As far as the flock plan, once that is signed,
    indemnity is paid.
        The cleaning and disinfection component--in the turkey
    situation, we are usually composting in-house, which is the
    litter and the turkeys and the birds are composted in-house.
    The house is then cleaned and disinfected after the compost
    period, which is about 14 to 21 days now, and we have adjusted
    that down.
        Senator Klobuchar. Yes.
        Dr. Clifford. So, once that is done and removed, the house
    is cleaned and disinfected, they start a 21-day countdown.
    Twenty-one days from that point of cleaning and disinfection,
    we go in and sample----
        Senator Klobuchar. Okay. So, you think you are ready to
    process, because in our state alone, we have had 108 farms that
    have had to destroy their birds, so----
        Dr. Clifford. Yes.
        Senator Klobuchar. Okay. The virus has impacted many
    different types of farms with varying repopulation timelines.
    For example, egg-producing farms proceed on a much longer
    timeline than that of broiler or turkey farms. What steps has
    the USDA taken to ensure that the indemnity formula is
    providing all types of producers affected a fair market value
    for their losses?
        Dr. Clifford. All right. So, we have redone the calculator
    at the request of the egg industry, because they wanted us to
    go from 80-week production to 90-week production. We have done
    that. We have also--trying to update all the data. We are
    currently in the final steps of doing that and we will be
    reimbursing producers the difference between the new calculator
    and the old calculation.
        There is, though, a request for egg producers by the
    industry to pay producers for their actual downtime because of
    the length of time it takes to repopulate these facilities in
    an egg-laying situation. They have to stage these birds. They
    cannot fill every house----
        Senator Klobuchar. Right.
        Dr. Clifford. --immediately. So, it takes probably 18
    months or longer to repopulate these facilities. That question
    still remains. The Secretary has the authority to do that and
    we are still evaluating that internally.
        Senator Klobuchar. Okay. So, we will continue to work on
    that. I just hope we can come up with a pragmatic solution.
        Last, while this outbreak of avian influenza does not pose
    any threat to human health, which we make very clear to people
    all the time, it is hurting poultry producers and costing
    consumers more money in the grocery store. We all know that. In
    the 2014 farm bill, before this happened, I actually worked to
    include a provision requiring a feasibility study for ensuring
    turkey and chicken producers against catastrophic losses. I
    understand that that report is due to be released later this
    year. Do you have any updates on the time frame for when we can
    expect a final report?
        Dr. Clifford. I do not think so, Senator.
        Senator Klobuchar. Okay.
        Dr. Clifford. We will have to get back to you on that, but
    we will.
        Senator Klobuchar. Okay. You know, what I was trying to do
    when we did that provision before we even knew about this----
        Dr. Clifford. Yeah.
        Senator Klobuchar. --was try to build in some program that
    would work. Again, I share Chairman Roberts' view that you have
    been--the USDA and Secretary Vilsack have been incredibly
    responsive to our calls and requests about this, so this is in
    no way critical of the treatment and we really appreciate what
    you have done. But, I am just trying to look at if there is
    something we could do for the long term that would work better.
        Dr. Clifford. You know, I think insurance-type policies
    have been looked at in the past for other animal health issues.
    I realize it is difficult. Most of the time, they are very
    expensive.
        Senator Klobuchar. Yes.
        Dr. Clifford. So, if we could have something like that, it
    would be good for the industry itself to help protect them and
    their livelihood.
        Senator Klobuchar. Thank you very much, Dr. Clifford.
        Dr. Clifford. Thank you.
        Chairman Roberts. Senator Ernst.
        Senator Ernst. Thank you, Mr. Chair, thank you, Ranking
    Member, for holding this very important hearing today.
        This has had a horrible, horrible impact on Iowans, and Dr.
    Clifford, I know you have been extremely involved in Iowa.
    Thanks for sending Dr. Shere to us. We appreciate that very
    much.
        I can tell you, it has been trying for everybody--our
    producers, our growers, their families, their employees,
    everyone. We have fielded a number of calls in our offices,
    between the good senior Senator from Iowa and myself, and many
    of these impacted farmers have told me that just the process of
    gaining approval for the depopulation, the disposal,
    repopulating, and the indemnification has really been very
    complicated. It has been so frustrating for them, very slow. I
    know you have been working with that. Could you explain some of
    the processes that you have now put in place just to make that
    red tape a little less red for some of our producers in the
    State of Iowa?
        Dr. Clifford. So, we are trying to provide personnel to
    assist in the actual agreements, what we call compliance
    agreements for cleaning and disinfection. Part of the issue is,
    it is really negotiating with each producer. They have a
    choice. We can do the cleaning and disinfection, which we pay
    contractors and others to do that. Or, they can do it
    themselves. The benefit of them doing it themselves, frankly,
    is to help their own employees, who are out of work now, to
    have work and some pay, and I understand that. But, it is also
    agreeing upon the cost of that.
        We are looking at different things for the future. I do not
    know that we can come up with it, but something like a per
    house cost basis that is fair, equitable for some of these
    facilities, because in the layer industry, it is extremely
    costly and a long period of time to be able to address this
    issue. So, we are trying to break down some of those things,
    and right now, what we are trying to do is provide the
    expertise to them individually to work through these things
    faster.
        Senator Ernst. We cannot go back and make it any faster in
    the past, but moving forward, is there a guide or an SOP,
    standard operating procedures, that APHIS can put out in a
    little pamphlet or just an easy way for our folks to know where
    to go, who to talk to?
        Dr. Clifford. Senator, that is exactly what we want to do.
    In addition, the other things we want to do is assign a person
    to each flock that is affected, or each facility that is
    affected, that can basically be that go-to person for the
    entire length of time for that outbreak and its impact on that
    flock, so they have got one person to communicate, and then
    that person would communicate back with us and it would make
    their lives a lot simpler and easier.
        Senator Ernst. I think that would be a great step going
    forward.
        Given the epidemiological study that showed wind was maybe
    a likely contributor towards the spread or the transmission of
    the disease, or the virus, is it possible that delays in the
    response time from APHIS contributed to the transmission of the
    disease across Iowa?
        Just to set the stage, I had a producer that I visited with
    over the phone and it took nine days from the time she had
    called USDA until the time that they actually responded. In
    that nine days, 90 percent of her flock was gone, and in the
    meantime, we could have wind transmitting, we could have human
    transmission. Do you think that delay might have contributed to
    some of the outbreaks that we saw in Iowa?
        Dr. Clifford. Let me answer that this way, and I am not
    evading the question. Any delay in putting birds down puts more
    virus into the environment. So, the more virus in the
    environment, the more likelihood of spread for everyone. It
    does not matter whether it is a contractor or an APHIS
    employee, a state employee, or the producers themselves or
    their employees. It increases the level of risk. So, we all
    collectively need to go forward and work to quickly do these
    things. We totally agree it is too long.
        But, one of the things we have to address that we are going
    to need the support of a lot of people on is how we put these
    birds down in the future, because we cannot go in and remove--
    you can only take out about 100,000-plus birds a day out of one
    house and CO2 those. If that house--if you have got three
    million birds on that facility, you are talking huge numbers of
    personnel, huge numbers of work.
        The people themselves--and I am sorry I am going over, but
    the people themselves that come out of those houses, they can
    only work in there for about 30 minutes because of the heat.
    They have to come out. They have to rehydrate. The Tyvek
    clothing and things fill up huge amounts of biobags--huge
    amounts--because they are going in, they come out and rest for
    about ten minutes, they have to re-put the clothing back on, go
    in for another 30 minutes.
        It is--this is huge. You are talking about manure and birds
    and product that can be literally miles long and four or five
    feet wide and six or eight feet tall. It is--this is not an
    easy task. Some of these pits underneath some of the layer
    houses have not been--the manure has not been removed out of
    there for years and it is massive.
        Senator Ernst. Thank you. I appreciate it, Dr. Clifford.
    Thank you very much Mr. Chairman.
        Chairman Roberts. Senator Brown.
        Senator Brown. Thank you, Mr. Chairman.
        Dr. Swayne, thank you for joining us. Thank you for your
    service at one of the largest universities in America at Ohio
    State a couple of decades ago. I hope Congress will provide
    your lab with the necessary funding to do the research and
    product development that is necessary to protect our nation's
    agriculture.
        My question is this. It is my understanding that this
    strain of avian flu is not currently transmissible to humans,
    as you have said. However, there is some risk, if it were to
    become prevalent in the swine population, it could mix and do a
    strain that is potentially dangerous to human health. As we
    know, the concerns with swine flu affecting vulnerable human
    populations. What is ARS's plan to ensure that every measure is
    taken to avoid such a crossover?
        Dr. Swayne. I think there are two issues that are ongoing.
    One is that ARS is conducting experiments in swine, looking at
    are these viruses infectious for swine. The second, which Dr.
    Clifford has already mentioned, that there is surveillance
    going on in the native swine populations, our production farms,
    to try to look for this particular virus.
        Just like with the human side, where this virus has not
    been infectious for humans and has an extremely low risk, as
    CDC has said, also, if we look at the parent viruses that it
    came from, the H5N1 in Asia, there were just a few cases of
    swine infections in Asia initially. That is back in 2004, 2005.
    Since that time, it has been very difficult to find that virus
    in swine, so that the virus has not gone into swine. That is,
    hopefully, to our advantage that it has not done this before
    and we hope that it will also, based upon history, not do it in
    the future.
        But, the surveillance and the research are the two issues
    that will help us resolve that question.
        Senator Brown. Thank you.
        Dr. Clifford, you mentioned in your testimony that
    migratory bird flyways are closely connected to the spread of
    this strain of avian flu. What are USDA's plans to prepare
    other areas of the country, particularly Great Lakes states,
    for the fall migrations?
        Dr. Clifford. So, our plans are comprehensive for all 50
    states. In fact, what we are planning is a worst-case scenario
    that every major poultry producing state in this country for
    layers, broilers, and turkeys could be affected. So, that is 20
    states, and we are estimating 500 cases. Now, that is a worst-
    case scenario, and do we think that will happen? We pray not,
    and I do not think that it will because I believe we are taking
    actions and the industry will take actions to try to beef up
    our biosecurity for this.
        We are also doing wild bird surveillance. We have been
    doing wild bird surveillance for a long time, since the
    beginning of the H5N1 in Asia that Dr. Swayne just mentioned.
    We had higher levels of that sampling in wild birds. We took it
    down to an appropriate level because of what we felt the level
    of risk. Now, we are increasing that, and we have increased it
    since December of 2014. We started increasing the sampling. So,
    we will be looking at all four flyways in the sampling of that.
        If I may just take a moment to explain something. This is
    unusual because this--for the first time have we had a high
    path avian influenza virus to cross from Europe and Asia into
    North America, the first time ever. The significance of that is
    this. The H5N1 that this came from originally in Asia is the
    parent to the H5N8 that has adapted itself to wild waterfowl.
    If you all would go back and look at the concerns at the time,
    it was concern that this would be the next human pandemic. We
    put some money toward trying to address H5N1 in Asia, but we
    did not put enough. If the world had put more money toward that
    effort and addressed these diseases in the animals at the time,
    we would not have this situation today, because that--what
    occurred in 1997 was the original finding of that virus in
    China--has caused this outbreak today.
        Senator Brown. So, kind of playing along with that, what is
    USDA doing to ensure that states have adequate animal health
    infrastructure to be able to respond to major outbreaks? Are we
    doing enough investment in the states to do that?
        Dr. Clifford. You would have to address that on a state-by-
    state basis, but I know that a lot of our state animal health
    officials feel like that they have lost key parts of their
    infrastructure and their ability to respond. I do not think
    that is the case of all states, but I know it is the case in--
    --
        Senator Brown. How about from the federal level, from USDA?
        Dr. Clifford. We try to help ourselves, but when we are
    cutting back ourselves, it is more difficult. As I indicated,
    we have lost quite a bit of resources ourselves, so that
    impacts the states, as well.
        Senator Brown. So, similar to our investment in everything
    from NIH and CDC on human health, public health infrastructure,
    we are under-investing on the state and federal level as we are
    apparently in animal health infrastructure----
        Dr. Clifford. Yes----
        Senator Brown. --true statement?
        Dr. Clifford. That is what I--I would say yes.
        Senator Brown. Okay. Same old story. Thanks.
        Chairman Roberts. Senator Grassley.

    STATEMENT OF HON. CHARLES GRASSLEY, U.S. SENATOR FROM THE STATE
                                OF IOWA

        Senator Grassley. Mr. Chairman, first of all, I would like
    to put a statement in the record, opening statement.
        [The prepared statement of Senator Grassley can be found on
    page 47 in the appendix.]
        Senator Grassley. I know that you folks are hit with a big
    problem that we only appreciate from the standpoint of what our
    constituents tell us, and I also appreciate a couple briefings
    we have had from people, including the Secretary of
    Agriculture, on this issue. So, pass our thanks on to all your
    staff who have been helping with that.
        I want to ask Dr. Clifford about the dissemination of
    information from USDA to contractors and farmers. I have heard
    concerns from farmers that they were getting different answers
    or conflicting answers from contractors and officials during
    the crisis. So, simply, could you walk us through the process
    that is used to get information out from APHIS to the farmers
    who were affected during this crisis of avian flu.
        Dr. Clifford. So, Senator, I know early on, we have had
    issues of communication, and I think one of the things that we
    have been doing is to, as I indicated in our fall planning,
    about one person kind of being the liaison for that producer.
    But, we have shored up that currently, and while it is not one
    person, it is one person for the three-to four-week rotation of
    our personnel located there.
        We have had some issues with contractors, and where those
    issues have occurred, we have addressed those specifically with
    the contractors, and even in some cases we have let those
    contractors go because we did not feel that their performance
    was as appropriate and as professional as what we were looking
    for.
        So, the other thing to address that component so that they
    are not getting misinformation or misguidance is we plan to
    embed a federal person in each of those contract crews so that
    we have a person there with oversight, and so that
    misinformation is not occurring. I know that there was some
    misinformation.
        What we are doing now is we have put in place a lot of
    documents that we have that we can provide to the states,
    provide to the industry, and the industry, I know, and the
    states are using those to get those out to their members. So,
    whether it is biosecurity to indemnity and all of these things.
    But, it is still an overwhelming task for everybody, and
    frankly, I think when you are faced with the devastation that
    some have been faced with, it is a very difficult situation and
    it requires a lot of education because they have got a million
    things going on in their mind, least of which is how to clean
    up a house.
        Senator Grassley. Give me your latest estimate on approval
    of vaccine. You stated in your testimony, quote, ``Only the
    most efficacious vaccine should be considered for field use as
    any infection in a vaccinated population would still require
    the entire barn to be depopulated.'' How likely do you think it
    is that a vaccine could be approved for use before this fall
    that would satisfy USDA's approval criteria?
        Dr. Clifford. So, what we would do on vaccine and what our
    plans are is to stockpile vaccine. We intend to go out for a
    request for proposal to stockpile vaccine for the fall. That
    does not mean we are going to use vaccine, but we want it ready
    to use.
        With regards to the effectiveness of the vaccine, any kind
    of vaccine, you want it to be as effective as possible. But, it
    has also got--one vaccine--and Dr. Swayne can tell you this--
    one vaccine may be really effective against this particular
    virus and another vaccine against another strain. So, you also
    have to look about how those vaccines are going to be
    administered, whether they can be administered at the hatchery
    or whether they actually have to go and inject those birds
    directly. So, those things and considerations have to be taken.
        I want the tool in the toolbox to use if we need it. The
    limiting factor for the use of that is trade.
        Senator Grassley. Okay.
        Dr. Clifford. You have to weigh a loss of $3 or $4 billion
    in trade against the use of the vaccine itself, and it is a
    difficult situation.
        Senator Grassley. Mr. Chairman, I am done. Thank you for
    holding this hearing.
        Chairman Roberts. Thank you, and we have next Senator
    Casey.

     STATEMENT OF HON. ROBERT P. CASEY, JR., U.S. SENATOR FROM THE
                         STATE OF PENNSYLVANIA

        Senator Casey. Mr. Chairman, thank you very much.
        I want to thank our witnesses for your testimony, also for
    your public service, and especially when it comes to an issue
    this difficult.
        I wanted to, Mr. Chairman, first ask if I can have consent
    to submit a statement for the record.
        [The prepared statement of Senator Casey can be found on
    page 46 in the appendix.]
        Chairman Roberts. Without objection.
        Senator Casey. Thank you. Part of that statement will refer
    to a challenge we had in Pennsylvania when--certainly, it went
    beyond Pennsylvania--more than 30 years ago where we had a loss
    of about 17 million birds just in Pennsylvania. They either had
    died or had to be destroyed. The dollar loss at that time,
    again, over 30 years ago, about $65 million, and retail egg
    prices, as you can imagine, skyrocketed. So, we expect that,
    like so many other states, we will be dealing with this again
    in Pennsylvania, but we have our own history on the challenges.
        Therefore, Dr. Clifford, I wanted to start with you on the
    issue of resources, which is always an issue that arises, and I
    know you have been asked related questions. Several of us in
    the Senate sent letters to the appropriators in support of
    APHIS's avian health program and the National Animal Laboratory
    Health Network in May of this year. I would ask you, what
    further resources do you believe you need in terms of resources
    needed to detect, monitor, respond, and prevent HPAI?
        Dr. Clifford. Senator, the current level of need of
    resources, we have the ability to take care of that, I think,
    through the Secretary's ability to request emergency funding
    and provide that. So, I think that we are equipped. Actually,
    we just got good news from OMB of another apportionment that
    would allow us to prepare for this fall and spring. Now, it is
    not going to address, if an outbreak happens with all the
    indemnity and C and D and those costs. So, we would have to go
    back to address that.
        But, let me address it in a long term. You know, I think
    APHIS as an organization and the Department has always been
    very well prepared for the level of resources that we get. So,
    from a--these types of events really task us. They strain us
    extremely. So, as far as the level, I guess the question is, is
    how much do you want to pay for, and you pay for what you get,
    so I cannot throw a number out at you, but my budget, my total
    budget, appropriated budget for veterinary services parts of
    APHIS is around--I think it is around $250 million, 1,800
    people.
        Senator Casey. You said, in terms of personnel, you were,
    in your opening statement--what were the numbers again in terms
    of the fall, in terms of hiring? You said you had some capacity
    to hire temporary----
        Dr. Clifford. We actually have approval to hire 460 temps.
        Senator Casey. Temps, okay.
        Dr. Clifford. Or term positions. But of those, there will
    be 300 that will be nothing but responders. So, those are
    animal health technicians and veterinarians that will be part
    of the response capability. We plan to start hiring those soon.
    We have received the resources to do that and they will be
    staged throughout the U.S.
        Senator Casey. In the remaining time I have, and I just
    have about a minute, Dr. Swayne, thank you, as well, for your
    testimony and your work. I wanted to ask you about the vaccine,
    one of the vaccine questions. If you took into account the
    concerns that vaccines could affect poultry exports, if you
    consider that, do you think that we could fully eradicate the
    outbreak without a vaccine?
        Dr. Swayne. I think that the current data that APHIS has
    released, based on the diagnostics that has been going on in
    the Midwest, is that we have not had an outbreak flock in about
    three weeks. This would at this point suggest that we are at
    that point of eradication of the current outbreak of virus that
    began in December.
        I think the next question is, is will it come back with
    migratory birds in the fall, which would start probably late
    August in Minnesota would be a potential time, into September
    into Iowa and on down. So, that will be the big question. Will
    we will be prepared for a potential onslaught of another wave
    of outbreaks, and that is the question we have to face.
        Senator Casey. Thank you, Mr. Chairman.
        Chairman Roberts. Senator Tillis.
        Senator Tillis. Thank you, Mr. Chairman. Gentlemen, thank
    you for being here.
        In your opening statements, Mr. Chairman, you mentioned
    something I think bears repeating and it has to do with the
    human health risk here and the CDC's position. This is really
    about the health of the flock. I think we need to continue to
    restate that so that we focus on the root problem. We have to
    also talk about the economic impact. I think in Minnesota and
    Iowa, we are talking 1.6 billion in economic impact over the
    past year. That is from at least one report that I read. The
    job impact, I think, for probably every job lost as a
    processor, we lose about two more other jobs in the supply
    chain. So, these communities are very hard hit by this and
    people are losing their businesses and their mortgages.
        I want to talk a little bit more about the way we respond
    going forward. I contacted my Commissioner of Agriculture,
    Steve Troxler a month or so ago. He had done some work, and I
    think we had some of our Department of Agriculture up in
    Minnesota trying to help out. The question I had for him, and I
    would like to ask you, Dr. Clifford, is, what work are we
    doing?
        You had said that there were some 20 states and, I think
    you said, the worst case scenario is 20 states with 500 houses
    affected. Has there been any work done--assuming we will never
    have enough money to do everything you would like to do--in
    trying to create some sort of emergency response network? In
    the worst case scenario, if all 20 states are affected, then
    that is a disaster. But, having some way to mobilize resources
    that may be in the states to the hot spots and have that be at
    least part of the strategy for dealing with the shortfall in
    resources that the USDA may have?
        Dr. Clifford. Senator, we already do that, okay, so--and
    actually, in this outbreak occurrence, there have been a number
    of state--of personnel moved into the outbreak area that have
    assisted from other places across the country, and we know
    definitely North Carolina assisted. So, we do that. We also
    have the National Animal Emergency Response Corps, which uses
    private veterinarians. So, that process can be a little slow at
    times, getting those people back on board, and everybody has to
    be trained. You just cannot bring them on board and put them in
    work. They have to go through HAZMAT. They have to be fit
    tested for respirators. They have to go through a medical exam,
    because this is very difficult work in the field.
        Senator Tillis. Well, really related to, I think, a
    question that Senator Klobuchar asked, in some of my
    investigation over the past couple of months of this is just
    the time between when you suspect you have an outbreak, to the
    point you have someone there to authorize the depopulation,
    there seems to be a lag. So, is there a----
        Dr. Clifford. There is not a lag now. That was initially.
    We have--as soon as the presumptive positive, we have somebody
    there just----
        Senator Tillis. Now, what about the states'
    responsibilities? I think we have 26 or so depopulation
    machines in the state. I do not know if that is a high or a low
    number. It seems reasonably high to me.
        Dr. Clifford. You mean defoaming----
        Senator Tillis. Yes.
        Dr. Clifford. --or the foamers?
        Senator Tillis. Yes, the foamers. Are there sorts of
    minimum standards we are setting up for the states to make sure
    that they are best prepared?
        Dr. Clifford. We will be looking at that for the fall. I
    have alluded to the fact of trying to find new and better
    methods. We are considering and working with the industry and
    the veterinary community of considering closing up the houses
    and turning off the ventilators and heating up the house,
    because it is the fastest way. It is probably, while some
    people may have concerns, it is probably the most humane way to
    take care of this. So, this is what I was alluding to before as
    far as getting the support----
        Senator Tillis. I am glad to hear you say that, because I
    know that it is--there is the question on the humane treatment,
    but if these birds are left in that state for a week or so
    until you have the approval----
        Dr. Clifford. Well----
        Senator Tillis. --it seems to me it is the most expedient
    and probably facilitates the clean-up.
        I want to stay within my time, so I have one question for
    both Dr. Swayne and Dr. Clifford and it has to do with what
    more can we do, what constraints have we placed on you, or what
    things can we do, short of money--I heard that loud and clear--
    that may make your job easier? Have you given much thought to
    that, if we could do this or did not have to do that, as a
    result of decisions we made here in Congress, it could make
    your lives easier?
        [Laughter.]
        Dr. Swayne. Please do not have another sequestration,
    because it would shut us down, and we will be in the middle, as
    far as research, in the middle of all the research that we need
    to do to finish up the vaccination application and studies. If
    we have a sequestration, it requires us by law to shut
    everything down, which means if we have an experiment going, we
    have to euthanize all the birds. We have to kill all the
    cultures. We have got to lock down all of our high path virus,
    which are select agents. We have to follow the select agent
    rules to contain those. Send everybody home. If we start back
    up again, it is the same situation.
        Dr. Clifford. I would second that. We cannot send people
    home and then expect us to respond to an emergency if it
    occurs.
        Senator Tillis. That goes back to the funding question, and
    I agree with that. I think sequestration is awful on every
    count for every agency. But are there other things beyond that
    that concern you or things that we should be looking at, or is
    it basically the certainty and the funding you need?
        Dr. Clifford. I think those are the primary things. There
    may be other things, but let us give it some thought and if
    there is, that there be some way----
        Senator Tillis. I would encourage you to do that as you are
    going through the process----
        Dr. Clifford. --I would appreciate----
        Senator Tillis. --and working with the states to do
    everything we can to remove any sorts of hurdles that you do
    not think add value and that are adding costs and time. Thank
    you.
        Chairman Roberts. Senator Cochran.
        Senator Cochran. Mr. Chairman, I am informed that the
    Department of Agriculture's Agriculture Research Service
    facility in Athens, Georgia, has isolated a seed strain of
    avian influenza virus that is infecting U.S. poultry flocks,
    but no vaccine has yet been approved for use in the United
    States. What is the reason for that? Why has the Department not
    been able to go forward?
        Dr. Clifford. Well, I will let Dr. Swayne talk about that
    particular virus and its use in a vaccine. We do not typically
    use vaccine unless we need it. You need to have an exit
    strategy. Trade, it will impact trade. We can eradicate this
    disease without the use of vaccine. If vaccine is used, it does
    not mean that a particular bird or birds within a single house
    will not become affected with high path, and if they do, we
    still will take out the entire flock, even though they are
    vaccinated.
        You can--so, there are pros and cons on the use of vaccine.
    So, we have to weigh all of those things together. So, it is
    not a lack of approval of vaccines. It is whether we are going
    to use them and the impact it has if we do use them.
        Senator Cochran. Have any of our trading partners indicated
    that they will be seeking retaliatory trade measures if the
    U.S. starts vaccinating its commercial birds?
        Dr. Clifford. They have not indicated from a retaliation
    standpoint. They have indicated, though, that they would
    initially stop all sales out of the U.S., exports to their
    countries, until they have had adequate time to evaluate our
    actions.
        Senator Cochran. Are you running out of money?
        Dr. Clifford. No, sir.
        Senator Cochran. Would you let us know if you need any
    money?
        Dr. Clifford. Yes, sir.
        [Laughter.]
        Senator Cochran. Thank you, Mr. Chairman.
        Dr. Clifford. Thank you.
        Chairman Roberts. He is the man to talk to.
        [Laughter.]
        Dr. Clifford. Yes, sir.
        Chairman Roberts. Senator Boozman.
        Senator Boozman. Thank you, Mr. Chairman, and thank you and
    the Ranking Member so much for having this really important
    hearing, and we do appreciate the hard work that you all are
    doing.
        I think the money, though, is an important question, and
    you mentioned the $250 million. Is that adequate?
        [Laughter.]
        Dr. Clifford. Actually, no, it is not adequate.
        Senator Boozman. Well, we need to----
        Dr. Clifford. But, I cannot----
        Senator Boozman. Again, this is----
        Dr. Clifford. --you know, it is----
        Senator Boozman. I understand the position you are in, but
    you cannot have it both ways, in the sense----
        Dr. Clifford. Also--yes, right. But, also, we have a
    process that we all follow----
        Senator Boozman. I understand that, but like I say, you
    cannot have it both ways. You cannot complain later on that we
    are not giving you the funding that you need when you do not--
    when you are not up front about it. I do understand the
    process, and again, I do not mean to----
        Dr. Clifford. I know----
        Senator Boozman. --I am trying to help you.
        Dr. Clifford. I know.
        Senator Boozman. The other thing is that you mentioned
    the--as we are doing it now, you talked about any delay, not
    having delay is so important. Then you outlined a process that
    it seems like, as you went through it, it is humanly impossible
    to do. You mentioned the large manure piles and the birds,
    trying to, people taking breaks and just physically dealing
    with this. What is the answer to that?
        Dr. Clifford. So, I need to separate that into two portions
    for you. The key part is getting birds dead----
        Senator Boozman. Okay.
        Dr. Clifford. --because then you do not have virus
    replication and production and more virus being spread into the
    environment.
        Senator Boozman. Can they spread by the air? Can their
    feathers----
        Dr. Clifford. It can be spread by fomites, by people, by
    trucks, and there is some indication that wind has played a
    part, especially in parts of Minnesota, I believe, because of
    the proximity, the closeness of the lakes, the environmental
    contamination, and the wind that----
        Senator Boozman. Trucking them to kill them or whatever,
    that could possibly be a--just the birds being transported
    could be a possibility of spread, as far as the wind blowing
    their feathers and----
        Dr. Clifford. If they are infected, yes.
        Senator Boozman. Okay.
        Dr. Clifford. Hopefully, we are not moving infected birds.
    So, that is all--those are all possibilities.
        What we have identified is the gaps that we see, and we
    need to fill and cover as many of those gaps on the biosecurity
    side as we can, now, realizing that in some cases, it may be
    cost prohibitive to the industry to fully address it. So, we
    need to identify those that are highest priority and work down
    that list and do everything we can to close those gaps.
        Senator Boozman. Dr. Swayne, do you see anything in the
    biosecurity areas that we are doing--would you change anything
    that we are doing based on your research? Would you add or
    maybe say some of the things that we are doing were a waste of
    time, or----
        Dr. Swayne. I think one of the challenges is that every
    individual farm has a different risk, and what needs to be done
    is that individual farms, whether they are broiler farms or
    layer farms or breeder farms or turkey breeder, turkey meat,
    turkey farms, needs to do an assessment of where all the entry
    and exit points are on that farm.
        I think that we, as humans--myself included--is that things
    that we do every day, repetitive, over and over and over again,
    we kind of forget that they could be risk activities. We tend
    to look outside ourselves to somebody else being the risk and
    not myself, and I think that is the challenge that all farmers
    and the companies have, is to go back and really assess
    honestly, and sometimes using an outside person who does risk
    assessment, to say, where are the critical control points?
        So, for example, some points that could be high risk is if
    you have families that have multiple farms and then they end up
    sharing equipment between the farms to save costs. It makes
    economic sense. It is a perfect--for example, you may share a
    tractor or a manure spreader. For example, manure spreaders are
    really high risk because that is where the virus is, in the
    manure, and if you move it from one farm to the other without
    proper cleaning and disinfection, that could be a risk factor
    that has to be identified and eliminated.
        Senator Boozman. As far as the migratory birds, how do they
    spread it to enclosed flock?
        Dr. Swayne. That is a really good question, and I think Dr.
    Clifford made this comment, that all chickens, all turkeys, are
    all susceptible. It is just a matter of when they get exposure.
    So, if they are raised outdoors, they could be exposed. If they
    are raised indoors, they could be exposed. We do not always
    understand how the virus moves, but it is present in the fecal
    material and also in secretions from the respiratory tract. So,
    if you walk through feces from an infected duck and walk into
    your house, you can deposit it right there where you come in.
        In some studies that were identified in Pennsylvania in
    1983-1984, they found that in some of those houses, the initial
    mortality and infections occurred right at the door where the
    owner walked in, in this case, tracking it in. In the case of
    Pennsylvania, that was most likely farm-to-farm spread.
        So, those are all the critical issues.
        Senator Boozman. Good. Thank you very much, and I do
    appreciate your efforts, and I think I can speak for the whole
    committee in the sense that anything we can do to help, we
    certainly will.
        Chairman Roberts. Senator Donnelly.
        Senator Donnelly. I do not have any questions for the
    panel, Mr. Chairman.
        Chairman Roberts. Well, thank you very much.
        We are going to move to our second panel, but before that,
    I would acknowledge the presence of Congressman King, who is
    here. Congressman, if you would like to stand, to thundering
    applause, but at any rate----
        [Laughter.]
        Chairman Roberts. You were introduced about two hours ago.
    Would you please go back to the other body and inform them that
    we are a little speedier than they think we are.
        [Laughter.]
        Mr. King. Thank you, Mr. Chairman.
        Chairman Roberts. Thank you, Congressman.
        Welcome to our second panel of witnesses before this
    committee this afternoon. I am happy to welcome all of you to
    the committee.
        For our second panel, unfortunately, due to an upcoming
    vote, we are asking if you could limit your opening statement
    to four minutes, if possible. Just take a big pencil and cross
    out two or three paragraphs. You will be find. That is also for
    members, who I hope will remain, with regards to their
    questions.
        Senator Ernst is going to introduce Mr. Jim Dean, the egg
    producer from Sioux Center, Iowa, and Chairman of the Board of
    United Egg Producers, on behalf of the United Egg Producers.
    Senator Ernst.
        Senator Ernst. Thank you, Mr. Chairman.
        Chairman Roberts. While they are setting up, Joni. While
    they are setting up.
        Senator Ernst. Yes. Thank you so much, Mr. Chairman and
    Ranking Member, as well, again, for holding this committee
    meeting today.
        I want to start by thanking all the members of the panel as
    they are setting up. I appreciate their testimony and
    perspective on this topic, which has impacted each one of you
    very personally.
        The highly pathogenic avian influenza has had a devastating
    effect on Iowa, claiming the lives of over 31 million laying
    hens, broilers, pullets, and turkeys from across the state.
    Economists estimated that the net impact to Iowa will be almost
    $1 billion. Over 70 family farms in Iowa have been wiped out by
    this terrible disease and there has been a resulting economic
    ripple effect in their rural communities.
        One of the farmers impacted is Mr. Jim Dean of Sioux
    Center, Iowa, who is here to testify today, so Jim, thank you
    for being here today. Mr. Dean is the Chairman of the Board of
    United Egg Producers, a trade cooperative with membership that
    represents over 90 percent of the egg industry in the United
    States. He is a past board member of the Iowa Poultry
    Association, U.S. Egg Marketers, and Midwest United Egg
    Producers.
        Mr. Dean entered the egg business while in high school,
    working for a farm located in Pella, Iowa.
        After serving in Vietnam from June 1969 to June 1970, he
    returned to the employment at the egg farm and over the
    subsequent years was involved in all segments of the business.
    In 1979, he was invited to become a shareholder in the company,
    the first non-family member to be so honored. After serving the
    needs of the company for 27 years and becoming Senior Vice
    President, he elected to sell his one-third stake to pursue
    other opportunities.
        In 2014, Mr. Dean was honored as United Egg Producers' Egg
    Industry Producer of the Year, and in 2009 was inducted into
    the Iowa Poultry Association Hall of Fame.
        It is good to see you again, Jim, although I wish it were
    under different circumstances, it is always good to have a
    fellow Iowan in Washington, DC So, thank you very much for
    testifying today, and thanks to the rest of you on the panel as
    well.
        Thank you very much, Mr. Chairman.
        Chairman Roberts. Our second witness is Ken Klippen,
    President of the National Association of Egg Farmers,
    Collegeville, Pennsylvania. Senator Casey.
        Senator Casey. Mr. Chairman, thanks very much. I will be
    brief.
        Ken, great to have you here. Ken Klippen, from
    Collegeville, Pennsylvania, is President of the National
    Association of Egg Farmers. He spent more than 30 years in the
    egg industry in capacities including production and processing.
    Most of that time has been representing egg farmers both
    nationally here in D.C. and as the Vice President and the
    Executive Director for Government Relations of the United Egg
    Producers, and internationally when he was the Director General
    of the International Egg Commission, headquartered in London,
    England. He received both a Master's and Bachelor's degree from
    Michigan State University.
        Ken, great to have you here. Thanks very much.
        Chairman Roberts. Our third witness, Brad Moline, is a
    turkey producer and owner of Moline Farms in Manson, Iowa, on
    behalf of the National Turkey Federation.
        Senator Grassley, would you please proceed with your
    introduction.
        Senator Grassley. Yes. It is a privilege for me to
    introduce Brad Moline, a third-generation turkey farmer from
    Manson. He and his family operate Moline Farms, which producers
    approximately 155,000 turkeys every year, along with corn and
    soybeans. His family has been farming in the Manson area since
    the late 1800s. Brad and his brother formed a farming
    partnership together after he graduated from Iowa State
    University in 2002. Today, the Moline Farms employ three owner-
    managers, four full-time employees, two part-time employees,
    and another employee who is currently serving in the National
    Guard.
        Brad, we welcome you and thank you for representing the
    turkey producers here at this very important meeting.
        Chairman Roberts. Our fourth witness is Rob Knecht. He is
    President of the Michigan Allied Poultry Industries, Vice
    President of Operations, Konos, Inc., Martin, Michigan.
        Senator Stabenow.
        Senator Stabenow. Thank you very much, Mr. Chairman.
        First, I have to say, before introducing Rob from Michigan,
    which is wonderful, but Mr. Klippen, it is nice to have a
    Michigan State University grad since we just heard from
    somebody on the other panel from Ohio State, so I feel a little
    better----
        [Laughter.]
        Senator Stabenow. --now that we know that we have got
    Michigan State represented.
        Rob Knecht is a third-generation egg farmer and serves as
    President of the Michigan Allied Poultry Industries and Vice
    President of Operations at Konos, Incorporated, in Martin,
    Michigan. Mr. Knecht is also a board member for the United Egg
    Producers. He holds a Bachelor's degree from Hope College and
    an M.B.A. from Cornerstone University.
        It is great to have you, Mr. Knecht, with us as an
    important voice from Michigan.
        Chairman Roberts. Our fifth witness is Dr. Tom Elam, at
    Farm--and I have ``Econ'' down there. That means you are an
    economist, right?
        Mr. Elam. Yes, sir.
        Chairman Roberts. He is from Carmel, Indiana.
        To introduce the witness to the committee, Senator
    Donnelly.
        Senator Donnelly. Thank you, Mr. Chairman.
        Dr. Tom Elam, President of FarmEcon in Carmel, Indiana, is
    testifying today as a farm economics expert. Dr. Elam has
    earned his Doctoral degree in agricultural economics from the
    University of Tennessee-Knoxville and since worked in a variety
    of roles, serving the public through government, private, and
    nonprofit positions.
        After time at the USDA, Dr. Elam spent over 20 years at
    Elanco Animal Health. Dr. Elam founded FarmEcon in 2003, where
    he consults for all dimensions of the U.S. broiler and turkey
    sectors, and was named one of Poultry USA Magazine's ``Top 20
    Consultants to the U.S. Poultry Sector'' in 2006.
        I want to thank him for attending today to share his
    excellent working knowledge of the relevant areas of finance,
    agricultural production, and farming economics.
        Thank you, Mr. Chairman.
        Chairman Roberts. Let us start with you, Mr. Dean.

      STATEMENT OF JAMES R. DEAN, CHAIRMAN, UNITED EGG PRODUCERS,
                           SIOUX CENTER, IOWA

        Mr. Dean. Thank you, Mr. Chairman, Ranking Member Stabenow,
    members of the committee. Egg farmers appreciate the interest
    of this committee as we deal with the worst animal health
    crisis in the nation's history.
        About 36 million hens have been removed from the nation's
    laying flock as a result of the disease. An additional five to
    six million pullets have also been lost. We and our customers
    are dealing with the overall loss of 12 percent of the U.S. egg
    laying flock because most of the egg laying hens that were lost
    produce eggs for further processing. The loss to that sector is
    closer to 30 percent.
        I would like to publicly thank Chairman Roberts, Ranking
    Member Stabenow, and their staff, as well as USDA and APHIS for
    responding to this crisis swiftly and with hard work and
    dedication.
        Egg farmers have been implementing biosecurity measures for
    many years, starting after the avian influenza outbreak in
    Pennsylvania in the 1980s. Biosecurity is also required by the
    FDA's Egg Safety Rule. The avian influenza outbreak did not
    catch producers unprepared, but the rapid transmission of the
    current virus is unprecedented. Its uncontrolled spread stymied
    the best effort of both egg farmers and APHIS.
        Our farm in Sioux Center, Iowa, received a perfect score
    from a USDA biosecurity audit less than two months before the
    outbreak, but that did not prevent the virus from entering our
    operation. We can do more, and we are doing more.
        Avian influenza continues to threaten the rural economy's
    farms and jobs. In Iowa, the egg industry accounts for 20,000
    direct and indirect jobs and generates $6.6 billion in economic
    activity and more than $500 million in tax revenue.
        We are grateful that Congress saw fit to create a system of
    indemnity payments to cover the value of the birds that must be
    destroyed and lost egg production, as well as cleaning and
    disinfecting. For farmers, these indemnities can be the
    difference between failing and surviving.
        We are engaged in respectful dialogue with USDA about the
    formulas that are used to calculate indemnities for the egg
    industry. Current regulations require that indemnities reflect
    the value of egg production, but we are concerned that the
    specific formulas fail to completely reflect the value. We
    appreciate very much the Department's openness to consider the
    data UEP has supplied.
        The biggest issue with the current formula is that it does
    not adequately capture the value of the future stream of egg
    production associated with the hen. We hope that USDA will
    agree to make changes in the current formula to better reflect
    egg production value, and we believe that the existing statutes
    provide ample authority for the Department to do so.
        Furthermore, we support and are engaged in current efforts
    to investigate the potential viability of a crop insurance-type
    program for avian influenza and other diseases. These
    investigations are at early stages and we look forward to
    exploring this and options that may assist farmers in the
    future.
        The indemnity issue is complex, and I can provide more
    detail during question and answers. The reason is that hens on
    egg farms are different ages. Their maturity is deliberately
    staggered so that, given them, they are collectively producing
    the right amount of eggs for the market. So, if all of them die
    at the same time and have to be euthanized at once, we cannot
    immediately repopulate our farms, but must do it in stages,
    during which time those barns that remain empty generate zero
    revenue to pay fixed costs and wages. Retaining our staff and
    keeping the local communities alive is of paramount importance
    to the egg producers.
        UEP supports continued, perhaps expanded, funding for the
    State Departments of Agriculture for the affected states to
    assist with depopulation and expanded education efforts in
    small backyard flocks on risk assessments and biosecurity.
        Mr. Chairman, our farm employees, communities, and
    customers have suffered an unprecedented blow this year. This
    cannot happen again. It is vital that all of us work closely
    with USDA to take every step that we can to prevent harm to our
    industry as well as to others.
        We need and appreciate the support of USDA as well as this
    committee to move forward. Thank you.
        [The prepared statement of Mr. Dean can be found on page 59
    in the appendix.]
        Chairman Roberts. Thank you very much, Mr. Dean, for your
    efforts to keep this to four minutes. We do have a vote at
    5:30, and I know everybody has important questions.
        Mr. Klippen, please proceed.

     STATEMENT OF KEN KLIPPEN, PRESIDENT, NATIONAL ASSOCIATION OF
                EGG FARMERS, COLLEGEVILLE, PENNSYLVANIA

        Mr. Klippen. Thank you, Mr. Chairman, and good to see you
    again, Ranking Member Senator Stabenow. It is always good to
    see a fellow Spartan.
        The National Association of Egg Farmers formed in 2014, and
    we represent 278 farmers nationwide. We are composed of a lot
    of contract farmers. Our smallest manages a flock of about
    8,000 birds. We are very small, up to some that have over five
    million birds.
        A group of farmers came together originally under the name
    of Egg Farmers of America when we opposed the national egg
    legislation in the 2011 and 2012 Congress, and we want to thank
    those members here that let the farmers decide how best to care
    for their chickens while providing the safe and wholesome egg.
    However, with waterfowl as a source of this disease
    transmission, we support a policy of producing poultry indoors
    and not in free-range environments, where the chickens may be
    exposed to the virus.
        Now, this AI is affecting small as well as large, and Mr.
    Chairman, there was a small flock of ten birds in your state
    that had to be depopulated because of AI, so it is considered
    one of the smaller ones, but the larger ones in the State of
    Iowa and Minnesota took a bad hit.
        Amon Baer from Lake Park, Minnesota, who testified before
    this Congress in the 2012 Congress in opposition to the
    national egg legislation, is a member of our association and he
    has also been hit by this avian influenza. He is working hard
    today to meet a deadline for cleaning and disinfecting his farm
    by Friday so he can repopulate his birds by August. When he
    discovered he had avian influenza on his farm, his heart sank,
    because he knew he would have to destroy all 300,000 of his
    birds.
        Now, because poultry is sold worldwide, this is a worldwide
    issue. With 20 percent of the broiler meat, 12 percent of the
    turkeys, and just under five percent of eggs and egg products
    produced that are being exported to other countries, this
    disease will impact trade. Eighteen countries have banned all
    poultry from the U.S., including China, South Korea, South
    Africa, and Russia. Recently, your fellow Senator Coons from
    Delaware expressed grave concern about banning eggs in South
    Africa, as he was instrumental in helping open those markets.
        There are 31 countries with restricted trade from infected
    regions or zones within the U.S., and those countries are--of
    the 31 represent Canada, Mexico, Japan, and the European Union.
    There are 48 countries worldwide that are reporting highly
    pathogenic avian influenza.
        Now, in trying to shorten, I think I just cut a couple of
    sentences out here. Anyway, I will go right to the point here.
        We corresponded with APHIS officials back on May 27,
    providing an indemnity plan for egg producers, and we were
    citing 9 C.F.R. Part 56(1)(a), which states that for laying
    hens, the appraised value should include the hens' future egg
    production. We also provided a five-year average of statistics
    for APHIS as a means to bring about a fair and speedy appraisal
    for egg-laying hens. In our written comments, we have provided
    the details of that particular plan.
        Now, whether APHIS indemnifies using the plan we suggested
    or the one that United Egg Producers is acceptable to us,
    because both plans are comparable in pricing the value of the
    chicken and the future eggs produced.
        I was glad to hear Dr. Clifford today, because we want to
    make sure that we have uniformity in these plans, because some
    farmers are being indemnified when they are destroying their
    egg cartons, others are not.
        Again, we want to thank you, Mr. Chairman, for the
    opportunity to appear before you today, and I am pleased to
    answer any questions.
        [The prepared statement of Mr. Klippen can be found on page
    67 in the appendix.]
        Chairman Roberts. Mr. Klippen, thank you for your statement
    and thank you for your plan.
        Mr. Moline.

    STATEMENT OF BRAD R. MOLINE, MANAGER, OWNER, MOLINE FARMS LLC,
       MANSON, IOWA, ON BEHALF OF THE NATIONAL TURKEY FEDERATION

        Mr. Moline. Good afternoon, Chairman Roberts, Ranking
    Member Stabenow, and members of the committee. My name is Brad
    Moline and I am a third-generation turkey farmer from Manson,
    Iowa. I am testifying today on behalf of the National Turkey
    Federation, all of its farmers and processors that have been
    impacted by this year's high path AI.
        I am currently living the avian influenza nightmare. We
    have already depopulated more than 56,000 turkeys, which
    totally cleaned out our 12 growing barns. If we are lucky, we
    will be able to salvage this year with one flock that we hope
    to repopulate soon. Regardless, two-thirds of our annual income
    has been wiped out.
        Without APHIS indemnification payments, many farmers may
    have been forced to hang it up. We appreciate Congress and the
    USDA for their continued support of indemnification. We will
    depend heavily on these payments until our next flock goes to
    market somewhere around Thanksgiving.
        Before I continue, we would like to extend a thank you to
    Secretary Vilsack, USDA, and APHIS for their leadership and
    thousands of hours of service fighting this outbreak.
    Additionally, I appreciate my home state Senators for raising
    our concerns during this difficult time, as well.
        Since the high path AI outbreak began in late January,
    there have been 153 cases confirmed in commercial turkey,
    turkey breeder flocks in eight states, resulting in the loss of
    nearly eight million turkeys nationwide, with an economic
    impact estimated at nearly $500 million. Processors in these
    areas have laid off more than 400 employees for the lack of
    turkeys.
        We are committed to working with APHIS in five key areas
    that are critical to eradicating this disease: A faster
    depopulation; disposal, repopulation strategy; a viable
    vaccine; and a coordinated, enhanced focus on biosecurity.
    However, there is no silver bullet, but increased efficiency
    will require clear communication among all shareholders.
        Initially, federal and state governments missed a critical
    opportunity to sit down with the industry to develop a defined
    gameplan. This would have avoided the mass confusion that we
    experienced in Iowa. Having a clear roadmap explained by
    government officials, not contractors, is a must. We understand
    contractors play an important role in eradication, but they
    should have been better trained.
        Finally, we recommend that the USDA staff assignments
    overlap in the field to reduce communication errors.
        In order to eradicate high path AI, swift and efficient
    depopulation is vital. We appreciate the government allowing us
    to speed up the process of safely depopulating all infected
    flocks. The goal should be to depopulate all infected birds
    within 24 hours of a positive confirmation.
        Regarding disposal, the industry has been challenged to
    adjust to the government's ever-changing goalpost. Before fall,
    we look forward to streamlining the process with the USDA to
    minimize on-the-fly decision making. To that regard, the NTF is
    instructing its members to implement contingency plans
    immediately. Farmers and USDA need to finalize disposal options
    before fall.
        As farmers, biosecurity is something we take very
    seriously. Could we have all done more to prevent the spread of
    this virus? Most likely. But, however, I take offense to the
    notion by some inside and outside the government that the
    turkey industry was careless or knowingly negligent. We have
    everything to lose by being sloppy.
        Further, APHIS needs to examine its own biosecurity
    practices, especially those of their contractors. APHIS is
    doing an excellent job of documenting the transmission of this
    disease, but to the date, the agency has shared very little
    information that examines the role that delayed depopulation
    and biosecurity lapses played in spreading this disease.
        As for the NTF, we have initiated a review of our
    biosecurity best management practices to identify improvements.
        All of these efforts will mean little if we cannot restock
    birds by the end of the year. Farmers were unsure as when they
    could restock their previously infected farm. Communication
    with federal and state agencies was difficult and led to
    confusion. Although we still have concerns over some criteria,
    we now have a plan to move forward. To truly recover from this
    devastating chapter, many strategies will be employed. One of
    the most powerful tools will be a vaccine to fight the virus.
        To conclude, continued communication with APHIS must be
    enhanced to improve biosecurity, depopulation, disposal,
    repopulation, and vaccine development.
        With that, Mr. Chairman, I conclude my testimony and would
    be happy to answer any questions.
        [The prepared statement of Mr. Moline can be found on page
    79 in the appendix.]
        Chairman Roberts. Thank you, Mr. Moline.
        Mr. Knecht.

     STATEMENT OF ROB KNECHT, VICE PRESIDENT OF OPERATIONS, KONOS,
    INC., MARTIN, MICHIGAN, AND PRESIDENT, MICHIGAN ALLIED POULTRY
                               INDUSTRIES

        Mr. Knecht. Mr. Chairman, Senator Stabenow, and all the
    members of the committee, thank you for inviting me to testify
    today on behalf of Michigan Allied Poultry. My name is Rob
    Knecht and I am an egg farmer, a third-generation egg farmer in
    Michigan. As I mentioned, I am the President of Michigan Allied
    Poultry Industries, which represents egg-laying hens, turkeys,
    and broilers in the State of Michigan.
        As the country's seventh-largest producer of eggs and 15th
    largest producer in turkey production, Michigan's poultry
    producers took action when highly pathogenic AI hit commercial
    poultry operations in the Midwest. The overall impact includes
    almost 51 commercial poultry throughout the U.S. My testimony
    today describes biosecurity changes that have been made to
    poultry operations in the wake of the AI outbreak, how the
    poultry industry in Michigan came together on a biosecurity
    initiative to protect the state's poultry, and how the APHIS
    mitigation process for HPAI can work better for producers.
        As the number of AI cases grew this spring, companies in
    Michigan implemented changes to protect the commercial poultry
    of the state. Today, many poultry companies in Michigan hire
    crews specifically for completing all of the tasks dedicated to
    a flock, such as moving birds, vaccinations, and other tasks
    that require a large amount of labor in a short amount of time.
    These employees, along with permanent employees who work in the
    barns, have the closest interaction with the birds and,
    therefore, need to be the cleanest. Farmers can place a high
    level of control on these crews, which means a high level of
    control over on-farm practices that could lead to
    contamination.
        Michigan's poultry farms also engage in different washing
    strategies. As a short-term measure, some companies have
    channeled house managers, bird crews, and anyone else in direct
    contact with birds to nearby hotel facilities where the egg
    producer covers the cost of a few rooms that serve as a locker
    room for sanitizing employees and changing clothes. Another
    short-term strategy includes utilizing mobile shower units
    which are pulled by trucks, have three stalls where employees
    can comfortably shower and change their clothes. In the long
    term, some poultry farms in Michigan are planning on
    constructing onsite shower and locker room facilities to stop
    the spread of the virus.
        In addition, having only clean vehicles on the premises is
    vital. There are many operations that have increased the
    frequency of spraying disinfectant on the wheels and wheel
    wells of every vehicle that enters a poultry facility. Many
    operations in Michigan and nationwide are also requiring full
    truck washes prior to entry onto the farm, since trucks that
    are coming into Michigan could easily have been traveling up
    and down I-80, where AI could be found.
        All stakeholders within Michigan's poultry sector have
    greatly increased communication with one another. Early on in
    AI outbreaks, MAPI was responsible for coordinating conference
    calls to discuss best practices and issues involving
    biosecurity. Through the entire crisis, we coordinated a
    Michigan-wide weekly call that includes many Michigan poultry
    stakeholders, including partner industries such as feed
    companies, Michigan State University's Extension staff,
    Michigan's Department of Agriculture, and Michigan State
    Veterinarian.
        Also on the topic of outreach, I would be remiss not to
    mention Michigan State, and they have always made themselves
    available to discuss biosecurity risk analysis, strategies, and
    implementation. MSU's Extension program has presented at MAPI's
    Annual Winter Seminar on biosecurity on multiple occasions, and
    Dr. Richard Fulton of MSU's Extension program wrote the low-
    pathogen avian influenza program that is now administered by
    the state. In fact, when asked to provide this testimony, Dr.
    Fulton was one of the first people I asked for counsel.
        In conclusion, this committee should know that Michigan
    producers are optimistic, even while they maintain a position
    of constant vigilance. Our industry will keep a laser focus on
    biosecurity going into the fall and we intend to document,
    verify, and validate procedures to ensure a focus on
    biosecurity for the future. Many of these items discussed here
    will become and are becoming common practice. While the poultry
    industry has always cared deeply about biosecurity, the recent
    AI outbreak has opened our eyes to consider areas of production
    that were not previously thought to be significant risk.
        I am confident that Michigan and the U.S. poultry will
    build its resilience during this difficult period and be
    stronger for when the next challenge comes.
        Mr. Chairman, Senator Stabenow, and the rest of the
    committee, I appreciate the time and look forward to answering
    your questions.
        [The prepared statement of Mr. Knecht can be found on page
    75 in the appendix.]
        Chairman Roberts. Thank you, Mr. Knecht.
        Dr. Elam.

      STATEMENT OF THOMAS ELAM, PRESIDENT, FARMECON LLC, CARMEL,
                                INDIANA

        Mr. Elam. Thank you, Chairman Roberts and Ranking Member
    Stabenow, Senator Joe Donnelly from the great State of Indiana,
    and other members of this committee. I am Dr. Tom Elam,
    President of FarmEcon LLC, an agricultural economics consulting
    company in Carmel, Indiana. My specialty is poultry.
        I would like to summarize some findings that are in my
    written testimony and make two recommendations for your
    consideration.
        For the past several months, I have made a running analysis
    of the economic effects of HPAI and with dismay have closely
    followed these outbreaks as they spread from the Pacific flyway
    into the Upper Midwest, and we have seen damage increase to
    record levels.
        As an economist, I deal with hard numbers routinely, but as
    an individual--and, by the way, economists are people, they do
    have feelings, regardless of what you may have heard. The hard
    realities faced by these producers and many others is very
    difficult to imagine and put yourself in their position.
        But, back to the hard numbers. Based on pre-outbreak
    wholesale prices, my preliminary estimate of producer direct
    loss arising from the destroyed turkey and egg production that
    we have heard about today is about $1.57 billion, $530 million
    for the turkey industry and a little over $1 billion for
    layers.
        By design, these estimated impacts exclude the substantial
    price increases that have occurred since the outbreak hit the
    Upper Midwest. That estimated loss also does not include the
    cleanup, bird restocking costs, higher costs to consumers from
    post-outbreak price increases, or any further production losses
    beyond what we know about today. Also not included is
    approximately $1.2 billion in lost export value, mostly broiler
    chicken meat, and broiler producers were not really
    significantly affected at all by this outbreak.
        The economy-wide loss for the just destroyed production to
    date is conservatively estimated at about $3.3 billion, and
    that is just for the production losses at pre-outbreak prices.
    The larger number is based on an earlier University of
    Minnesota piece of research. It includes estimated losses past
    the producer and wholesale level and into our retail food
    stores, restaurants, and other food service outlets. All of
    these production losses are concentrated among relatively few
    farms, representing only 223 turkey and layer production sites.
        As bad as it is for consumers facing higher prices and
    possible product shortages, especially in the egg industry,
    those affected producers have experienced catastrophic losses.
    What is even more important is that there is a very real
    possibility of another outbreak this fall and maybe even next
    spring.
        The first recommendation I have has already been
    sufficiently covered in these hearings, and that is APHIS
    funding. This committee and the House Committee on Agriculture
    need to make sure that APHIS has sufficient resources to
    address the remnants of this outbreak and any future outbreaks.
    If we get an infected broiler farm in the State of Georgia or
    North Carolina or Alabama and that starts to spread like
    wildfire like this one, the losses will be in order of
    magnitude larger than we are talking about here today. It is
    going to take a public and private partnership to make that
    happen, and I hope that the APHIS is ready to play its role.
        The second is more contentious. I think this Congress needs
    to look at the enabling legislation for indemnification
    payments in light of what we have talked about today, and
    ensure that USDA is interpreting those measures appropriately
    and making appropriate indemnification payments that offset the
    losses experienced by these producers, especially in the egg
    and turkey business. The loss of future production, I do not
    believe, based on my conversations, has been adequately
    compensated.
        Thank you, Mr. Chairman, and I will remain here for
    questions.
        [The prepared statement of Mr. Elam can be found on page 64
    in the appendix.]
        Chairman Roberts. Dr. Elam, I am going to ask you the first
    question that I have. Have you done any forecasting to
    determine what the impact on consumer spending for turkey and
    egg products has been due to the recent outbreaks of HPAI, and
    have you been able to determine what the loss of certain export
    markets has meant for U.S. poultry producers?
        Mr. Elam. Yes, sir, I have made some preliminary estimates
    based on current prices and price expectations for consumers.
    About 50 percent of roughly $3 billion in increased
    expenditures by consumers will be necessary as a result of
    higher egg and turkey prices, to a lesser extent chicken
    prices, as a result of this outbreak.
        On the exports, that is a little more complicated. I
    mentioned about $1.2 billion in lost chicken exports, but a
    substantial amount of that product will be sold on the domestic
    market, so it is not a loss of production, but it is a loss of
    export value and it does affect our balance of payments.
        Chairman Roberts. Thank you, sir.
        Mr. Dean and Mr. Klippen, indemnity payments for egg
    farmers. As you described, the indemnity calculation for egg-
    laying hens is different than indemnity calculation for birds
    raised for the meat they produce. Would you describe, to the
    best of your knowledge, some adjustments or improvements that
    could be made to the indemnity calculation for egg-laying hens
    that would be more adequate.
        Mr. Dean.
        Mr. Dean. Yes. When the indemnification was put in place, I
    think, in 2002, I do not think it fully recognized the length
    of time that is needed to restock these layer farms. We are in
    a unique situation where it takes us actually 20 weeks to raise
    a day-old baby chick before she is a performing layer. So, we
    have that 20-week lag time of raising that bird before she is
    productive.
        Then we have to stagger in the amount of time, because in
    our facilities, we generally have four pullet--or one pullet
    house to four layer houses. So, it is not a one-to-one ratio of
    pullet houses to layer houses. So, by the time that you start
    restocking the layer buildings, you have to go through the
    cycle of the pullet building. So, it could take up to two years
    to fully populate the farm, and like I said in my testimony, we
    need a steady supply of eggs to supply our customers and we
    cannot just completely depopulate a farm and continue our
    supply. So, that is why the system is set up for a constant
    rotation.
        Chairman Roberts. Thank you, sir.
        Mr. Klippen.
        Mr. Klippen. Thank you, Mr. Chairman. There is a difference
    between meat birds, the broilers and the turkeys, and egg
    layers, because the true value of an egg layer are the future
    eggs it would have produced. I have in front of me 9 C.F.R.
    56.4(a)(1). It says, in part, for laying hens, the appraised
    value should include the hens' projected future egg production.
    That is the true value, and that is what we are trying to help
    provide APHIS with these different formulas so that they
    recognize it is not just the bird value, but all the eggs that
    bird would have produced. We have provided statistics from Iowa
    State University to help APHIS understand those values.
        Chairman Roberts. I appreciate that.
        Senator Stabenow.
        Senator Stabenow. Well, thank you very much, Mr. Chairman,
    and I am going to ask just one two-part question so we make
    sure colleagues have the opportunity to ask questions before
    the vote today.
        Mr. Knecht, thanks again for your testimony and all the
    witnesses that are with us. As you are watching confirmed cases
    emerge in our neighboring states, I am wondering what advice
    you are giving Michigan poultry farmers going into the fall.
    Then, secondly, as we see more cases pop up in Michigan, are
    there any specific changes that you would like to see from
    APHIS that would make the agency's mitigation efforts more
    effective?
        Mr. Knecht. So, two parts, the first part being the--oh,
    help me on the first one.
        Senator Stabenow. Advice to poultry farmers----
        Mr. Knecht. Ah, the advice. Yes. Well, this is what we have
    been talking about all along, is the increased emphasis on
    biosecurity. We want to continue to talk to, amongst, across
    industries, layers, turkeys, and broilers to make sure
    everybody is doing things the right way, because if it is
    coming through the air or being transmitted person-to-person,
    you want to protect each other, and with the west side of
    Michigan being where the vast majority of the population of all
    poultry is in the State of Michigan, we are all very close to
    each other, similar to the way it is in Iowa. We want to
    continue to preach biosecurity, the showering in, showering
    out, clean vehicles and all of those things, and even going so
    far as the smaller things--communicating with your employees,
    having meetings and keeping everybody updated on what is going
    on.
        Specifically, as far as if something were--hopefully,
    nothing happens in Michigan, but if something does happen, we
    are trying to get better from a biosecurity perspective. We
    want to be constantly vigilant. But Senator Ernst talked a
    little bit earlier about that lag time from when something is
    detected to when something is--when the birds are moved off,
    and my fear is--that is my fear for producers in Michigan, is
    that the time is what, if you have two turkey farms on the same
    road that are maybe a quarter-mile apart or a half-mile apart,
    that those people can be affected because of that lag time. I
    am not saying that we can get it down to zero, but let us
    reduce it.
        Senator Stabenow. Okay. Thank you. Thank you, Mr. Chairman.

     STATEMENT OF HON. JOHN THUNE, U.S. SENATOR FROM THE STATE OF
                              SOUTH DAKOTA

        Senator Thune. Mr. Chairman, I have got to a meeting,
    probably will not be able to be back before the votes. I have
    got a statement and questions I would like to submit for the
    record, if that would be okay.
        [The prepared statement of Senator Thune can be found on
    page 48 in the appendix.]
        Chairman Roberts. Without objection.
        Senator Thune. Thank you, Mr. Chairman.
        Chairman Roberts. Are you going to remain for questions,
    or----
        Senator Thune. No, I am not. I am sorry. I said I will
    submit them for the record. I do not want to cut the line here.
        Chairman Roberts. All right. Senator Ernst.
        Senator Ernst. Thank you, Mr. Chair and Ranking Member.
        Mr. Dean and Mr. Moline, again, thank you very much for
    being here today. Just one thing, in the interest of time,
    maybe, that APHIS could do better going forward, and then,
    also, maybe what the producers could do, as well, if you were
    empowered to do so, if there was something that you could do to
    help the situation.
        Mr. Moline. Thank you, Senator Ernst. What APHIS can do and
    the government can do with producers and growers, number one,
    the two things that have to be done is clear communication
    start to finish. When we get that presumptive positive on the
    farm, we need to be contacted immediately by the USDA.
        On our farm, we broke on a Tuesday morning. Our first
    contact with the USDA was Thursday and we did not depopulate
    until Saturday. With the clear communication, one area that was
    improved is when the USDA and APHIS sent Dr. Shere out to Iowa.
    He straightened up a lot of the miscommunication that was
    coming from the contractors and straightened up a lot of the
    other things that were getting misconstrued and just blatantly
    false.
        The second area that APHIS needs to improve on is the
    paperwork that is for these farmers and producers that we have
    to do moving forward. We want to keep all of our employees
    employed. We do not want them going to the unemployment lines.
    So, I, myself, have over 40 hours of paperwork involved with
    our three sites that were infected. Those hours could have been
    better utilized cleaning buildings, removing litter,
    disinfecting.
        By streamlining the paperwork end of things, it is going to
    allow the producers to have a clear road map of exactly what
    they are going to get paid and it will allow them to make the
    decisions almost immediately, because they know that they will
    be getting paid for everything they do and it will encourage
    them to do it themselves and will save the government money
    because you will rely less on outside contractors.
        Senator Ernst. So, empowering the producers to do more of
    the work, which I think is----
        Mr. Moline. Absolutely. Encourage the producers to do more
    work.
        Senator Ernst. --is an effective way to do it.
        Mr. Moline. We are doing our own. We have one site that has
    been environmentally tested and cleaned. We have two sites that
    will be done shortly. We look to repopulate as soon as
    possible, looking at the end of July or early August.
        Senator Ernst. Thank you.
        Mr. Dean.
        Mr. Dean. Yes, I agree with Mr. Moline's, all of his
    comments. The process can be streamlined. Dr. Shere came into a
    horrible situation when he was given the assignment in Iowa and
    he was completely behind the eight ball, a lot of
    miscommunication. I think it can be streamlined.
        One of the requirements is that you must have a signed
    document before they can start, which has been a delay in the
    process, to get somebody out and actually have that signature
    and have it signed, because there has been a lot of confusion.
    I think that can be streamlined and I think Dr. Shere is
    streamlining that.
        I also agree that there should be a greater incentive for
    the producer to do the clean and disinfectant, because they can
    do it a lot quicker and a lot more economical than what APHIS
    can do. APHIS is limited by their federal contractors, what
    they can do. They have got to suit up in the HAZMAT suits.
        For example, when we were depopulating our farms, our
    people were pulling out four birds to one of APHIS's birds--or
    not APHIS, but the contractor. APHIS was not doing the work,
    but the federal contractor was. We were pulling out four to
    one, and I have heard several cases of that from other
    producers that are in the same situation. So, I think that
    process can be streamlined.
        As far as stopping the spread of virus, like it was talked
    about, killing fans immediately. We have actually tried to save
    birds by killing fans before we even had a presumptive
    positive, because we could tell by the clinical signs that we
    had it. So, we wanted to protect other people, other farmers
    around us, and protect our own flocks from the spread in the
    large.
        So, I think we have learned a lot of lessons going forward
    in this process that I think will improve the system.
        Senator Ernst. Thank you very much. I do think this is an
    area that if we are encouraging our producers to take more of
    that on their own shoulders, they know their buildings, they
    know their operations best, and I think it does save dollars in
    the long run for use within APHIS to hopefully prevent the
    spread of this disease in the future.
        So, again, thank you both for being here. We appreciate it.
    Thank you to the panelists for joining us today. Thank you, Mr.
    Chair.
        Chairman Roberts. Senator Donnelly.
        Senator Donnelly. Thank you, Mr. Chairman, and I also will
    just ask one question or so in the interest of time so
    everybody has a chance, and that would be for Dr. Elam.
        As an economist, every impact creates a ripple that causes
    effects throughout the economy. So, this virus has not impacted
    just those producers that have directly experienced a loss, but
    has impacted the entire industry and consumers. Could you
    elaborate a bit on the impacts the outbreak has had on
    producers, even those who have not experienced a loss, and how
    it will impact consumers in the long term.
        Mr. Elam. Certainly. The producers who have not experienced
    any of the loss, and that would be the vast majority of them,
    are seeing higher prices as a result of their neighbors' bad
    fortune. So, they are getting a bit of a windfall, a profit
    gain, from this outbreak.
        But, at the same time, some of them have lost export
    business, as well, particularly in the broiler business. We
    have lost approximately $1.2 billion worth of broiler exports
    that these companies are now going to have to divert into the
    domestic market. This is causing them an enormous amount of
    pain, even though they had no production loss.
        For the consumer, the loss is going to be higher prices,
    and you have got to keep in mind here that some people might
    say, well, you have prices go up, therefore, the value of this
    production has gone up, but that is not true. Just because
    something has a higher price does not mean it has a higher
    value.
        Think about an automobile, for example, which the cost of
    producing automobiles have gone up because of the fact we have
    added all these safety and convenience features to them, all
    the cameras and the USB ports and all of this, and the safety
    features, the airbags and so forth. That all costs money and
    the consumer gets a benefit from that. He drives a safer, more
    convenient car.
        That has not happened in the egg and turkey business. These
    products have not changed. Their prices have gone up, but we
    have not really added any real value to these products. We have
    added cost to the consumer, for which they are paying more and
    actually getting less. The consumer is going to suffer from
    this to the tune of about $3 billion in increased food
    expenditures that could have gone for other things in their
    budget.
        Senator Donnelly. Thank you, Mr. Elam. Thank you, Mr.
    Chairman.
        Chairman Roberts. Senator Grassley.
        Senator Grassley. My first question was already asked by my
    colleague from Iowa, but if there are any of you that want to
    expand on any of those things that you think that the federal
    government needs to do when responding to these outbreaks, you
    can have a little bit of my time to do it. But, I think it has
    been pretty well covered. But, does anybody have anything to
    add?
        [No response.]
        Senator Grassley. Okay. Then, I will ask----
        Mr. Moline. I do, Senator Grassley.
        [Laughter.]
        Mr. Moline. Sorry to interrupt you. We have talked a lot
    about biosecurity today, and I think the point that all of us
    producers are trying to get out of APHIS and the USDA, our own
    research and just our own findings on the farm, is we talked
    about biosecurity. Biosecurity costs money. It takes time. We
    are more than happy to do it. My brooder houses are shower-in,
    shower-out facilities. My finisher barns, they are wide open
    curtain barns.
        We need some help identifying what areas of biosecurity we
    need to improve on. So, my recommendation is we need research
    dollars through the USDA, ARS, and let us find out everything
    we can about this virus so we can improve our biosecurity and
    spend our money where it needs to be spent, as well as the
    government's money. We lost 56,000 birds and two-thirds of our
    income this year.
        We need--there are many producers like myself that will not
    have the money to spend a lot on upgrading barns and
    facilities. So, we need the government and the USDA to tell us,
    or help us identify areas that we can efficiently spend money
    on and improve not only our own facilities, but the whole
    industry in the turkeys and as well as our neighbors and
    friends in the chicken business.
        Thank you, Senator Grassley.
        Senator Grassley. My last question would deal with whether
    you would like to see a vaccine available, and in answering
    that question, take the trade implications into consideration.
        Mr. Moline. Speaking for the turkey industry and myself as
    a producer, one of the first things that we asked right away,
    when it--we were one of the last farms infected by the avian
    influenza--we were asking, how soon can we vaccinate? We had
    friends and neighbors in Minnesota, Northern Iowa, our friends
    in the chicken industry were breaking right and left. We asked
    as soon as we could, can we get our pullets vaccinated at the
    hatchery? We would gladly vaccinate every turkey coming out of
    the brooder house at five weeks. As a grower that owns his own
    turkeys, we would do anything possible.
        So, yes, we vaccinate for a lot of things already and we
    want a vaccine and we would be more than glad to do it, whether
    it is at the hatchery or on the farm or both. Thank you.
        Mr. Dean. The layer side of it, if I may expand on that,
    the layer side of it gets--we have got mixed feelings on
    vaccines, not only from the trade issue, which is more a
    broiler issue, but in the layer side of it, since our bird is
    in production for a substantially longer period of time, it
    would require a vaccination at the hatchery and then would
    require two booster shots while that bird is in production.
        That would mean a lot of people going into the buildings to
    do vaccination. You have to handle that bird while she is
    actually in production. You would actually--it is estimated
    that you would knock production about ten percent. It then puts
    the producer that has to vaccinate at an unfair disadvantage as
    far as the productivity of the operation if they have to
    vaccinate.
        I, just speaking as an egg producer and not as United Egg
    Producers, as an egg producer, I would just as soon see an
    effective stamp-out program and eradicate the disease rather
    than a vaccination program.
        Senator Grassley. I am done. Thank you.
        Chairman Roberts. Senator Hoeven.
        Senator Hoeven. Thank you, Mr. Chairman.
        I just kind of want to follow up along the lines of Senator
    Grassley. A lot of the discussion has been about what USDA
    needs to do, has been doing, and also, of course, what APHIS is
    doing and should be doing. My question is more focused on what
    do you think the Congress should do specifically that would
    help both now and to prevent future influenza-type outbreak.
    Focus more from what you perceive the Congress needs to be
    doing in addition to any of the steps that USDA has taken or is
    taking, or that APHIS has or is taking, and I would ask that
    for each of the witnesses, kind of a wrap-up.
        Mr. Dean. I will take it first, since I am first in line. I
    think Congress can help develop some sort of an insurance
    program similar to federal crop insurance, on those same lines.
    I have been involved in several meetings as far as that goes,
    and I think that is something that would be needed that I think
    we could ask Congress for help. It sounds like it was
    introduced in the 2014 farm bill to already look at that
    program and look at something. We think that is something that
    would be extremely important for the industry in the future, to
    have that type of insurance program available.
        Senator Hoeven. Let me ask you a question right there. Have
    you talked to RMA or Brandon Willis about something like that?
    Has there been any discussion of any kind of insurance product
    along those lines?
        Mr. Dean. Yes. In fact, Congressman King organized a
    committee and asked producers to come together in Iowa, and
    some of those people were at that meeting from USDA and so
    forth to look at those type of products and pattern something
    similar to the crop insurance. It is going to be extremely
    difficult to try and get private insurance companies to want to
    insure those type of products since we are in the middle of a
    disaster and the worst animal health issue that we have ever
    experienced in this country. It is going to be hard to get it
    done from private insurance companies.
        Senator Hoeven. Have you seen Congressman King around
    anywhere so that you could ask him, like, the status of that,
    or----
        [Laughter.]
        Senator Hoeven. So, anyway, there has been some preliminary
    work done, and there had been some--because something like
    that, I think, you would want to start with some serious
    discussions with RMA and with somebody like Brandon Willis----
        Mr. Dean. I think they are already in the process of doing
    the studies, and UEP has offered to help as far as what we
    needed to get producers' input and involvement as far as being
    able to do the risk assessment and so forth.
        Senator Hoeven. But, it is something that some people in
    the House, Congressman King and others, are starting to look
    at?
        Mr. Dean. I do not know whether it is at the House level.
    It is Congressman King that started that because he saw a need
    of that type of program, and then I think it gets handed off to
    other agencies to do the work and develop that type of product.
        Senator Hoeven. Okay. Mr. Klippen.
        Mr. Klippen. I agree with Mr. Dean. We have had discussions
    about insurance. Back in January, we had a group of different
    groups of people that represented different industries within
    the poultry industry, whether it was game birds or whether it
    was ducks or geese or--and we did talk about trying to look
    into insurance. Of course, that was in January. Had we known,
    we would have been a lot further along. But, I think that is an
    important first step, perhaps a crop insurance program of
    sorts. So, definitely.
        Senator Hoeven. Mr. Moline.
        Mr. Moline. I agree, also, with what Mr. Dean said earlier
    on the insurance end of things. Also, in future farm bills, I
    would ask Congress to possibly look at updating the indemnity
    for more coverage on the turkeys maybe along with that, with an
    insurance program of some sort, and also factor in loss of
    production due to cleaning and things like that, as well. You
    know, not only did we lose the birds, we lost at least one more
    flock and possibly two, and I know many other producers are in
    the same boat. Thank you.
        Senator Hoeven. Mr. Knecht.
        Mr. Knecht. I was on a conference call with RMA not that
    long ago, I think it was about a month ago or so, right in the
    heat of all of this, and I think one of the challenges with the
    crop insurance program is the timeline for which it would be
    implemented. It sounded like it was a ways off in terms of
    actually having a product for egg producers to be able to
    purchase. I would take this opportunity--I know you do not want
    to go back to APHIS, but I would take this opportunity to voice
    support for a major overhaul or addition to the indemnity
    program for the real value of ag production.
        Mr. Elam. I think it was mentioned earlier by the gentleman
    from USDA that is there anything beyond the truly innovative
    beyond the current policies of vaccination and depopulation
    that could address these issues longer term, truly innovative
    animal health solutions beyond the current measures, whether
    they involve genetic engineering, which I understand could be
    somewhat controversial, or other things maybe we have not even
    thought of today that could help. I am talking about some very
    basic R&D here beyond what USDA has currently charged APHIS--or
    what the Congress has currently charged USDA with.
        Senator Hoeven. Thank you. I think you bring up some
    interesting points. I mean, that kind of goes to the whole GMO
    aspect, but that science has prevented a lot of disease in a
    lot of crops and a lot of animals----
        Mr. Elam. Exactly.
        Senator Hoeven. --so I think you bring up a very important
    point. Thank you very much.
        Chairman Roberts. I want to thank each of our witnesses for
    sharing your experiences related to highly pathogenic avian
    influenza and its impact on the U.S. poultry sector. Your
    firsthand experience with this devastating virus has been
    invaluable to the committee as we look to ways to ensure the
    health and safety of America's poultry and livestock.
        With regard to asking Congress what you need, I would only
    respond, ask not from Congress what you can do, but what you
    can do for your Congress.
        [Laughter.]
        Chairman Roberts. To my fellow members, we ask that any
    additional questions you may have for the record be submitted
    to the Committee Clerk five business days from today, or 5:00
    p.m. next Tuesday, July 14.
        That concludes our hearing.
        [Whereupon, at 5:19 p.m., the committee was adjourned.]

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                                A P P E N D I X

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                       DOCUMENTS SUBMITTED FOR THE RECORD

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                             QUESTIONS AND ANSWERS

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