```

[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
           
           
           
           
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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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                         QUESTIONS AND ANSWERS

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