Cost of Bird Flu Outbreak to Bust Budget, Agriculture Chief Says

Government spending to fight the worst U.S. bird flu outbreak and compensate farmers for their losses will exceed the $410 million so far budgeted and may top a half-billion dollars, Agriculture Secretary Tom Vilsack said.

While the outbreak of avian influenza, which sent egg prices to record highs, may be ebbing with warmer weather in the Midwest, spending to fight the disease will outstrip what’s been approved, Vilsack told Bloomberg reporters and editors Monday in Washington.

“We need to be very prepared for this to reassert itself in the fall,” Vilsack said.

About 45 million turkeys and chickens, including more than 10 percent of the country’s laying hens, have been wiped out by the spread of avian influenza across the Midwest. Iowa, the top U.S. egg producer, has been hardest-hit. To make up for the loss of eggs sold in liquid form to food manufacturers, buyers are snapping up consumer-grade fresh eggs packed for consumer sale, driving costs higher.

Vilsack, a former Iowa governor, said that bird flu, along with crop and animal maladies such as citrus greening that hurt Florida oranges and the porcine epidemic diarrhea virus that killed hog herds last year, underscore a need for Congress to approve more long-term spending for the U.S. Department of Agriculture to manage emerging threats.

“Those three, just alone, are significant issues for each of those components of our agricultural economy,” Vilsack said. “You’ve cut to the bone here, and you need to understand the necessity of increasing the USDA budget.”

Domestic egg production will fall in 2015 for the first time since 2008, according to the USDA. It will take 18 months to two years to replenish the nation’s flock of laying hens, said Maro Ibarburu, an analyst at the Egg Industry Center in Ames, Iowa.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE