July 28, 2015
Vilsack: Greta, thank you very much. I know I'm in Iowa, Governor, when the meeting starts at 8 o'clock. In D.C., this would be about a 10 o'clock meeting, so it's great to be back home. I certainly appreciate Governor Branstad and Lieutenant Governor Reynolds and their interest and involvement in this. The Governor suggested that this meeting be held in Iowa, certainly one of the more appropriate places to have this meeting. I do want to thank all of the commodity groups that have seen the wisdom of sponsoring this effort. We appreciate the support that these commodity groups have had throughout this very difficult and trying time. I want to thank the producers who are in the audience today. I want you to know that we recognize and appreciate how difficult this has been for you and your families. That's why we have been working hard to deal with the onslaught of avian influenza and why we are taking steps to be prepared should it reemerge in the fall. Certainly appreciate you all being here today and being involved and interested.
Also want to acknowledge that there are many USDA officials here today. You'll be hearing from several of them but I wanted to give a special shout-out to Dr. John Clifford who is here today. Dr. Clifford has been leading our efforts at the Animal and Plant Health Inspection Service (APHIS). He is an extraordinary public servant who is dedicated and completely invested in figuring out how best to help the producers of this country get through this very difficult and trying circumstance. So 232 enterprises and operations have been hit by avian influenza since early spring, nearly 50 million birds have been depopulated. This has caused the USDA to deploy almost 3,000 additional workers for APHIS. To give you a sense of that number: APHIS has employees on a regular basis, about 8,000 people. So to deal with this, we've gone out in the private sector and we've worked with contractors to hire nearly 3,000 additional people to work with nearly 300 APHIS workers on this issue. We have expended, or likely will expend in excess of $700 million in the form of indemnification payments to producers as well as the reasonable cost of disinfection and clean-up. We expect and anticipate should this reemerge in the fall that number may obviously grow.
We have done this through a process. It's not something that Congress has directed us to do, it is something that we have decided to do because we know it's the right thing to do, to work with producers during a very difficult time. We have not had a new incident since mid-June, but the reality is that we need to plan for the worst and hope for the best. And so I tasked a team at USDA over the course of the last several weeks to begin the process of putting together a task force for purposes of planning for a worst-case scenario in the fall, so that we would be prepared to deal with a reemergence in the 21 states that have been impacted and affected by avian influenza and potentially trying to deal with a reemergence of this in new states as well. We've listened. We've had a series of workshops prior to this meeting with state officials and some of the industry officials to try to understand the concerns that we and they have heard from the countryside about the response. We have surveyed state veterinarians. We put out a 40 page survey asking for information from the state vets so that we had a good understanding of the concerns that they have had and that they've heard. We've evaluated the causes of the spread of this and while it's difficult to be able to state with a degree of 100 percent certainty, we are fairly confident that there are multiple reasons for the spread of this.
Obviously it started with wild geese and ducks but it was spread, we believe in part, as a result of birds getting into facilities; [and] as a result of people coming in and out of facilities that had been infected; as a result of equipment that was utilized in these facilities moving from one operation to another; as a result of water of water usage by some producers; and obviously potentially airborne emissions and expansion as well. All of this tells us that it's important and necessary for us to focus on working with the industry to figure out precisely how we can do the best job of biosecurity possible.
I suspect and anticipate that we will learn from this particular conference a number of ways in which we can work more collaboratively together to ensure that we are doing everything we possibly can to prevent this from occurring and to mitigate its expansion. We know and appreciate that when this hits, it's important for us to be able to provide accurate information and timely information. One of the things I think we learn from this process is it's important for us to continue a close relationship with state and local governments. I think we had a close relationship with the state governments that were impacted, but I think it will be helpful for us in the future to have an incident command structure and system of communication that starts with making sure that state, local, and federal officials are in essentially the same room talking about the same thing at the same time. That we have incident command structures that potentially are involved in multiple states on a regional basis, multiple counties, and in each separate county. It would be helpful if we could have essentially the same people talking to the producers over a long period of time instead of the rotation that occurred in this last go round. I think it's important to note that we did have to ramp up staff, the fact that we had to hire nearly 3,000 additional people resulted in some rotation.
We are sensitive to that and we will do the best we can to make sure that we get folks who develop a relationship with the producer who may be impacted and affected by this, should it reoccur, and that we have a line of communication that works effectively to get the same message at the same time in all facilities and operations. Obviously the best biosecurity may not be good enough and so there may very well be a reemergence. If there is, we will be dealing again with the issue of depopulation. I think we have learned that there are needs for us to take a look at how we might be able to depopulate in the quickest and most humane way possible to avoid the additional spread.
I think we are learning about possible ways in which this can be done. One of the unfortunate circumstances of a tragedy like this is that it does spur creativity and innovation, so we are open to suggestions and we will be working with the industry to try to figure out what is indeed the quickest, most efficient and most humane way of dealing with this, should it reemerge. We are also very much aware of the fact that we need to continue to focus on multiple ways of dealing with this. Depending upon the operation, depending upon the size, depending upon the bird involved--different methods may be most effective, so we need to be aware of that. And we need to be aware of the fact that once we are depopulating these birds, it's important and necessary for us to be able to dispose of them. That's why I've tasked a team to take a look at where this may potentially reemerge and to begin having conversations with state officials today about where the disposal sites may potentially be, whether on site in the farm, in a land fill, or elsewhere; figure out what the permitting process is for removing birds, for disposing of birds, for dealing with landfills; reducing the questions and concerns the landfills may have, which we experienced here in Iowa, for example, where folks wanted to know what this was all about and it took a little time for some of our landfills to be confident. We could do that in advance and we are attempting to do that so that we have free positions, facilities. We have had those conversations so that we can do this as quickly as possible.
Of the 211 commercial facilities, roughly 90 of those commercial facilities have finished their cleaning and disinfection efforts. Nearly 70 are in the position of restocking. In Minnesota, I think all but a couple of control areas have been lifted. Because we haven't had a new incident since mid-June, we are seeing this ramp up fairly quickly and our hope is that by the end of the summer we are in a position to get folks back in business throughout the entire 21 states that have been impacted, assuming we don't have a reemergence, and assuming everything goes well. I know that folks have been concerned about the time period it takes to get a facility back in business.
Frankly this is a desire on our part to work with producers to make sure they understand why it is necessary to wait this long because it does indeed reduce the risk of reemergence. But we do need to be more effective in our communication and I think we will be. We need to make sure that folks understand it is somewhat operation specific, that we have to enter into cooperative agreements. There does have to be some documentation and people are sometimes frustrated with that but that is also part of our responsibility. When we are dealing with $700 million worth of taxpayer resources, we have to be able to answer the question from folks that aren't necessarily involved with this: Why did you spend the money that you spent and how did you spend it? Was it spent appropriately? And I think as taxpayers in this room you all appreciate and understand the necessity of accountability. We take that job very seriously.
We are concerned about the fact that we are dealing with different operations in different states, in terms of not geographic states but in different conditions. Some of these facilities have allowed a substantial amount of manure to accumulate over a number of years and in some cases as long as a decade. That creates a larger cleanup responsibility so we are trying to figure out how to balance, appropriately, the need for us to sensitive and helpful but at the same time understand and appreciate that there are producers at different place in terms of the cleanup risk and costs. We need to factor that into evaluations.
We have been working on the indemnification issue as well. We know that there are some concerns about this. Concerns about why high path and low path [avian influenza] are treated differently. Well the reality is that low path occurred first and we developed regulations to deal with it. We are in the process now of making sure that whatever we do with high path and low path are consistent. We also know that there are some concerns about where the resources go when you've got a situation where the birds aren't necessarily owned by the producer. How does that work? We assume that growers and the industry would work out a division of the indemnification payments. In some cases that has been happening, in some cases that has not. So that has made us rethink how this indemnification process could potentially work in the future to make sure that we're fair to producers as well as the industry. And we are going to continue to work to refine the indemnification system in terms of understanding the challenges that producers have. In terms of understanding the length of time it takes to restock. All of that is underway. All of that is in reaction to comments folks have made throughout this process.
Again, we are going to do our level best and we appreciate and at this point we anticipate about $190 million of indemnification payments to be made, about $183 million has already gone out the door. So I think we have done a pretty good job of getting the resources out but I think we can do an even better job of making sure people understand what this system is.
Some have suggested and I think Greta, your team at the Turkey Federation, has suggested that it may be some kind of per square foot concept. That would be something we should look at and indeed that is something we are looking at because it does provide some simplicity, some conciseness, some uniformity. Just want to make sure that as we think about this and work through it, that we're going to be fair to folks. But we are recognizing the need for us to take a look at the indemnification system and make sure that we get it right.
Folks have asked about a vaccine. This is an interesting issue. The good news is that we've got a seed strain that was developed at ARS. We've entered into at least one licensing agreement, cooperative agreement, with a producer. We are setting aside resources in the future so that we are able to purchase vaccine as it is being produced so that we can stockpile. We anticipate and expect that there are several other companies that are working on vaccines and we will continue to work with them on their particular vaccine. Bottom line here is that we want to basically identify a vaccine that is 100 percent effective for chickens and turkeys and we want to make sure that we have adequate supplies on hand, should we need it.
Once we are able to get the vaccine produced and stockpiled, we then have to make sure that each state begins its process of considering whether or not and under what circumstances it will allow the use of vaccine. This is a shared responsibility and so I appreciate the Governor and Lieutenant Governor being here because I know they want to be thinking about this and they want to understand and appreciate the pluses and minuses of the use of vaccine. The seed strain that was produced recently was an important milestone because in the past what we had was a vaccine that was probably 60 percent effective. That means you're not really reducing the population of virus that is available to spread. We're very excited about this seed strain that we've developed. We think it is far more effective and can provide better relief.
The challenge will be for us not only to work with states to understand under what conditions they are comfortable using vaccine. It's also our trading partners. As you know, 18 countries representing roughly 14 percent of our trade have made decisions to essentially ban all sales from the U.S. We have expressed concerns about that approach. We don't think it's consistent with international regulations. We don't think it's consistent with science. We think it's much more appropriate to look at a regional or state by state or even bans within a state. 38 countries, recognizing that, have imposed a regional or statewide ban. That represents roughly 69 percent of trade so about 83 percent or so of trade has been impacted either by a total ban or by a regional or a state by state ban.
We are continuing our conversation. Dr. Clifford, I don't know when he gets time to spend with his family because he spends all of his time traveling. He's here today. I want you to know he has been overseas making the case to our friends at the OIE that we really need to be looking at this thing from a regional and a state by state process and following the science as opposed to a country-wide ban. He will be traveling very soon to Asia and will be dealing with some of our major trading partners in China, Japan, Korea and Taiwan. Did I leave anything out?
Dr. John Clifford: Hong Kong.
Vilsack: To essentially have conversations with officials in each one of those locations so that we can begin the process of acquainting them with the potential utilization of vaccine, so that we get them in a better place, a more comfortable place.. And at the same time as he is traveling to Asia, we've got teams that will be traveling to Europe and visiting with folks as well in other key countries. So we'll have multiple teams traveling all over the world to discuss the vaccine and to try to make sure that we can fully appreciate and understand why we are sort of planning for the worst and hoping for the best. What we'll potentially see from the international community, should we decide to use the vaccine.
Trade obviously has been impacted but we'll continue to work hard. This has been the six best years of agricultural trade in the history of this country and we want to continue that and we know how difficult this is and how important the export markets are. It's one of the reasons why we're knocking on wood and hoping that this week we take additional steps in terms of opening up markets through the Trans-Pacific Partnership negotiations that are taking place in Hawaii right now--very important opportunity for U.S. agriculture.
The markets, you know it's a little mixed bag on the markets. Obviously egg prices have been impacted and affected. People ask the question when you're dealing with roughly 10 percent or so of egg production, why is it that egg prices have been so volatile? It's in part because the elasticity of the market is very tight in terms of egg use and egg production and that results in prices and availability being an issue. So what we have done at USDA and through APHIS is that we have worked with some of our international partners to make sure that we have continued supply of eggs. What we don't want is for food processing facilities that are reliant on eggs to begin the process of trying to figure out how to do something different, without eggs. We want producers to continue to have that market opportunity once we get over the hump here. So we're going to continue to work with our foreign friends to make sure that we have an adequate supply of eggs so that those price shocks aren't quite as severe as they could otherwise be. Obviously turkeys and chickens, it depends on the dark meat, the breast and so forth but we are following markets. We have used, and will always continue to have the opportunity if there is a significant surplus in the market, of utilizing our section 32 purchasing power. We recently authorized a purchase of chicken parts to basically take some of the pressure off the oversupply in the U.S. because of the export impact.
So I hope that what you can see that we are fully engaged in all of this, from the research side to the response side to the planning for the future side to the trade implications. I would say you know that one of the things the industry at large should be very seriously considering, and I've visited with the Iowa producers about this recently, is the need for, as Farm Bills are being discussed and developed, the need for a disaster program for the poultry industry and the turkey industry just in the same way that we have it for the livestock industry. You know in the last year or so since the 2014 Farm Bill was signed, USDA has made over 600,000 payments to livestock producers as a result of a variety of disasters, from drought to floods to snow storms that were unanticipated and unexpected. A very simple process, everybody understands what it is. You lose livestock, you get paid. You lose forage, you get paid. It's predictable, it's understandable. It allows those producers to go to their bankers and say relax, I know it's been a tough time but we're going to get help. Unfortunately producers in this world don't necessarily have that and they should.
So I would hope that one of the long term lessons from all of this is that we can convince our friends in Congress to understand that it isn't just about dollars and cents as was the case in this last Farm Bill. The reason why a disaster program wasn't included was because it didn't pan out in terms of budget. We really do need to take a look at a disaster program. Why? Because at the end of the day, it's going to be ultimately less expensive. Whether it's a risk management insurance-type program or a disaster program or a combination, it really will reinforce the biosecurity aspects of this. It will reinforce the need for us to be focused on trying to mitigate the consequences and it will make sure that everyone understands what the rules are in advance. It will just become easier and more efficient to operate.
The last thing I would say is a personal note. Greta mentioned the fact that I was a former Governor. Before that I practiced law in a small town and as part of that I represented farmers and I represented them for a very long time. Governor Branstad is certainly acutely aware of the 1980s, the farm crisis. You remember that? Tough time. And representing producers during that period of time, I understand how tough this job is. The sad reality is that not everybody in America understands that. Not everyone in America understands and appreciates what an extraordinary blessing it is that we have in American agriculture. Folks don't understand that when they go in the grocery store, they have this amazing variety brought to them by American producers. They don't understand when they walk out of that grocery store that they have a little more money in their pocket, more than about anyone else in the world because our food, as a percentage of our paychecks, is roughly 10 percent, which is significantly below what it is any place else in the world. If you're in a developed country, you're probably playing 20 to 25 percent for your food out of your paycheck. If you're in the developing world, it may be as high as 50 percent. So you have this enormous flexibility with your paycheck that allows you to live in a nice home or buy a nicer car or take a vacation or put money aside for college for kids or retirement, brought to you in part by American agriculture. And then there is the whole issue of the fact that we have so relatively few people producing this enormous abundance. If you look at 50 percent of production in America, it's 33,000 farming operations. If you look at 85 percent of production it's roughly 200,000 to 300,000, which is one tenth of 1 percent of the population. That means the other 99 percent are free to pursue their hopes and dreams to be whatever they want to be. They can be a veterinarian, they can be a lawyer, they can be working for a commodity group. They have the freedom to do that because they don't have to worry about producing food for their family because they've delegated that responsibility to American producers.
So when folks ask the question: why are we spending this money? Why are we concerned about this? Why are we working on this? You know are there issues involving American agriculture? I want to make sure that those folks and the rest of the country understand the benefits they get from American agriculture because far too often, far too often in my view the news and the information about agriculture is always about situations like this. And people raise questions about large scale agriculture without recognizing some of the benefits that accrue to all of us as a result of production agriculture. I am extraordinarily proud to be an Iowan. I'm amazingly proud to be the Secretary of Agriculture because I understand, I think, how great these folks are. And these are people that not only provide us all of these opportunities but they also, in every speech I give I mention this, they also disproportionately send their sons and daughters into the military. And for the last 10 years that's not been easy duty and many of them have sacrificed a great deal for this country. So I appreciate our partnership. I appreciate working together. I appreciate the challenges that we face. I came here today just simply to let you know that we are working on this. That we are planning. We're going to try to improve as best we can. We're going to try and work collaboratively with the states and I think we have. We're going to look at working with local governments effectively and we're going to make sure we do the very best job of supporting the very best producers in the entire world. Thank you very much.