Last year, consumers around the country experienced an explosion in the price of eggs, in part due to an outbreak of avian flu. Since then, egg prices have come back down to more normal levels. But what did we learn from that outbreak? What could we do better? And how can we mitigate further the economic impact of such waves? On this episode, we speak with Delaware Senator Chris Coons, the co-sponsor of proposed legislation to change how the USDA compensates farmers when the next outbreak comes. We discuss why this is an important topic for the poultry farming community, how insurance works right now, and lessons from the last outbreak. This transcript has been lightly edited for clarity.
Key insights from the pod
:
How the US currently handles avian flu outbreaks — 3:31
What does the Senate Chicken Caucus do? — 5:01
What the last avian flu outbreak did to farmers in Delaware — 8:01
Changing how farmers are compensated — 9:16
The business model of US chicken farmers — 11:07
Should the US adopt chicken vaccines? — 15:16
Why does the USDA compensate farmers for losses at all? — 22:05
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Joe Weisenthal: (00:10)
Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal.
Tracy Alloway: (00:15)
And I'm Tracy Alloway.
Joe: (00:16)
Last summer egg prices surged. We had the avian flu. Egg prices have since come down, and I guess we sort of forgotten about it.
Tracy: (00:25)
I haven't. I have not forgotten about avian flu. It looms large in my mind as I continue to daydream about becoming a small scale chicken grower.
Joe: (00:33)
Well, what is happening with that?
Tracy: (00:34)
Things have improved. I was talking to an ornithologist that I'm friendly with, and he says a lot of the infestations in wild birds seem to have subsided. And that was kind of the vector for infection. But it is interesting. If you look at egg prices, egg prices now have basically normalize from the record that we saw in, I think it was actually December of last year. So at least from a market perspective, it has faded from recent memory.
Joe: (01:03)
Right. And so, you know, when we do all these episodes about various disruptions and things that happen, and then it goes on and it's sort of like, “okay, well, can we do it better?” Did we learn anything from this episode of sort of major disruptions? Is there going to be a change in the law? Is there going to be a change in logistics? Is there going to be a change in supply chains? Is there a way to avoid a disruption and an outbreak, the likes of which we saw in 2022?
Tracy: (01:31)
Absolutely. And I remember we recorded that episode with Glenn Hickman, the president of Hickman Family Farms, which has a bunch of chickens. It's a chicken producer, an egg producer, and I remember he was describing the existing system for handling avian flu, and we got into some of the way it works with him. So he was talking about compensation for instance. And from talking to him, it seems like there is room for improvement. There's also a larger question over whether or not the US should start just vaccinating commercial chicken flocks.
Joe: (02:05)
You know what? I didn't know until preparing for this episode, I didn't know Delaware was a huge chicken state. Did you know that it's a huge chicken powerhouse state?
Tracy: (02:13)
No, I had no idea. I've driven through Delaware a few times, and I have to say I have not noticed a lot of chickens wandering around, but of course, they wouldn't just be wandering around. They would be in big sort of barn-like structures.
Joe: (02:25)
I don't know what I would've guessed if someone says…
Tracy: (02:32)
I would've guessed Arkansas.
Joe: (02:33)
Yeah, Arkansas. Right. Or maybe Texas or one of the southern states, but apparently Delaware is like this huge chicken powerhouse.
Tracy: (02:40)
Alright, well, we have to dig into why Delaware is a chicken powerhouse and what we can do about future avian flu outbreaks.
Joe: (02:47)
We do literally have the perfect guest for this episode because we are speaking with Delaware Senator Chris Coons, who is — and I didn't know this — he is the co-chair of the Senate Chicken Caucus, and he's the co-sponsor of a bill that they're trying to move forward called the Healthy Poultry Assistance and Indemnification Act, which is trying to, in some way improve upon the existing system for compensating farmers affected by an avian flu outbreak.
Tracy: (03:18)
Gotta love the Chicken Caucus.
Joe: (03:19)
Senator Coons, thank you so much for coming on Odd Lots. What happens now to farmers if they are, under current law, in an area where avian flu is discovered?
Senator Chris Coons: (03:31)
Well, the good news and the bad news is that as a country, we're very good at identifying, high pathogenic avian influenza outbreaks or HPAI outbreaks.
And what happens, frankly is that the farmer whose flock is infected promptly gets a control order and has to depopulate, has to destroy his entire flock, and is then compensated by USDA for that. However, under current policy, all the other poultry farms in a six mile radius or a 10 kilometer radius around that HPAI case are not allowed to bring new flocks until the virus is deemed fully contained.
So let's say you are a poultry farmer and I live two, three miles away and I'm a poultry farmer, and you tragically have an HPAI infection, you destroy your whole flock, you get compensated for that. But now I can't have any more turns in my chicken house. I can't bring in any more new flocks and be compensated. That's the current situation.
Tracy: (04:38)
So I remember when we spoke to Glenn Hickman, a mid-sized, well, fairly large- to mid-sized poultry farmer. He was saying that the other thing that isn't covered is if you need to buy new chickens, for instance, to restock your flock. Are there other associated costs that poultry farmers just aren't compensated for?
Chris : (05:01)
Yes. My sense is that growers undergo significant financial struggles. But there is a real gap between those who have a positive HAPAI case and those who aren't compensated in the same area. And I am optimistic that working with my friend and partner, Senator Wicker, and the other 15 members from across the country of our bipartisan Senate Chicken Caucus that we're going to be successful in adding additional compensation through the Farm Bill this year.
Tracy: (05:36)
Can I say I'm already a fan of the Chicken Caucus and I think a lot of people when they hear that name, are sort of tickled by it. But what does the Chicken Caucus actually do?
Chris: (05:45)
Well, the Chicken Caucus recognizes that chicken is a really important agricultural product for all of the United States. It's critical to my home state of Delaware but across the country there's 300,000 people who work in the poultry industry. It generates about $45 billion a year, and there's major operations in about 30 states.
But instead of our having a common and cohesive voice in the Senate when I got here 13 years ago, uh, there really wasn't that. And so my dear friend, our late colleague, Senator Johnny Isakson of Georgia, Johnny and I launched the Chicken Caucus in 2013.
Part of this is just good old home state interests for me. Delaware has 200 times more chickens than people. It generates about $7 billion a year in economic activity from my state. It really defines agriculture in Delaware. And in fact, this year we're celebrating the century of the broiler chicken industry in Delaware, which began with an accident.
A Mrs. Cecile Steel ordered a small number of chickens through a mail order company and got hundreds of them, and then ended up actually discovering that because we are so close to New York and Philadelphia and Baltimore and Washington that she could really make a successful business out of raising thousands of chickens a year. And now there are millions in Delaware and around the country.
I view it as in many ways, the most important animal protein in our country. And the Chicken Caucus focuses on the opportunities and challenges for export and domestically of the American chicken industry.
Tracy: (07:28)
Joe, did you know that you can still send baby chicks through the US Mail?
Joe: (07:32)
I did not know that. Can I just say, so we're recording this episode a little differently, just full disclosure. We're recording the interview first, and we are going to do the intro after. And this was going to be the story that I was going to tell on the intro, because while doing some prep, I read about this story of the woman who meant to order 50 chickens and accidentally got 500 chickens and then started a huge industry. And I was going to ask Tracy if this was going to happen to her.
Tracy: (07:59)
This is my dream.
Joe: (08:00)
So what happened to Delaware last year during the worst of the avian flu outbreak?
Chris: (08:09)
Well, we had some significant losses. There were poultry growers who weren't able to earn the same kind of income they historically had. We did manage to get quick and effective control of the outbreak. The University of Delaware's Agriculture School has dedicated programs and trained extension agents. The Delmarva Chicken Association and our Farm Bureau have worked very closely together to make sure that everyone in our agricultural community is well aware of the risks of HPAI and how to deal with it.
And it can have a real impact, both directly in terms of the loss of chickens and revenue, and indirectly in terms of socializing, people visiting from one farm to another. But we've got it well under hand. We have a very talented state Secretary of Agriculture who is well grounded in our poultry industry. And in the end, we've come through it, I think, stronger than ever.
Tracy: (09:07)
So walk us through the legislation that you're introducing, what it actually does and how it would differ from the existing form of compensation, which you laid out earlier.
Chris: (09:16)
It essentially says if you undergo the same financial struggles because of the Department of Agriculture, Animal and Plant Inspection Service, the APHIS rules in terms of how you deal with HPAI, you'll get the same compensation if you're within that six mile radius. And your economic activity is harmed than you would if you actually had a positive outbreak, if you had an infection in your flock.
It also simplifies the way that you calculate the indemnity payments so that growers have greater security. And I'm very excited about Senator John Bozeman, the most senior Republican on the Agriculture Committee coming to visit us in Delaware. Two Fridays from now, he's going to spend the day visiting with some of our producers and growers and, talk to leaders in our ag industry. And we're going to be talking through exactly what this last HPAI outbreak meant for growers in Delaware and what this legislation would do for us and for all the chicken, industry in the country. I am hopeful that with Senator Bozeman's leadership, it will get included in the Farm Bill later this year.
Tracy: (10:43)
Does the bill differentiate at all between large and small farmers? Because I think a lot of people will think maybe small scale farmers need additional support, but a large company, like say a Pilgrim's Pride, I mean, they seem to be doing okay just looking at their share price. Tyson isn't — I think there are some other issues there. But does it differentiate at all?
Chris: (11:07)
Briefly no. And let me briefly be clear. The integrated business model for growers is quite different. So the vast majority of the farmers in Delaware who are raising chicken have other jobs, and they have one or two or three chicken houses on their property. And a company like Perdue or Tyson brings the chicks to the farm, provides them with feed, with antibiotics, with support in monitoring. And then whenever they've grown fast enough to then be taken back to be processed, they come to the farm and take them away.
And so, as the poultry grower, as the chicken farmer, what you really own is the house and you provide the supervision, the labor, the active maintenance of the house, and you tend the flock. That's why part of the focus of this bill is on the economic harm of not being able to have more flocks come through your houses.
But there are hundreds of Delawareans who own one, two, or three chicken houses. And these are assets that are, you know, 30, $50,000. So this is really aimed at them. It is really aimed at reducing the economic harm suffered by lots of middle class working families who are chicken farmers, but who often also have other income. But where the impact to them and their family of being shut down for months at a time can be significant.
Joe: (12:41)
Tracy, you really could do this. I did not realize that for a lot of chickens are produced is someone's like, sort of second or third form of income.
Tracy: (12:49)
Yeah, I can supplement my Bloomberg salary. Senator, just remind me that model that you just described, is that called contract poultry farming?
Chris: (12:57)
Yes, the integrated model where you have large processors like Tysons or Purdue, and then hundreds and hundreds of, of farmers who are on contract with particular processors has worked fairly well in Delmarva. We've got a system where the growers, have options. They can switch between the five big companies in our region if they want.
And the integrators are responsible for the larger messier, more challenging, more capital intensive parts of the process. Both the hatchery, the delivery, the trucking and the processing of the chicken and the chicken growers really are responsible for what's in their backyard for their chicken house how it's operated and how it's maintained. And it's worked in our region and it's worked relatively well for a century now.
Joe: (13:51)
So just to be clear, in terms of the upgrades that your bill would propose, what is the name again, sorry, of your new bill?
Chris: (13:59)
I think it's literally called the HPAI Act.
Joe: (14:02)
Oh, yeah. So it would compensate farmers who were affected because they couldn't introduce new chickens in the area even if they didn't have a positive test, it would simplify the payout. On the payout, how big is the pot of money total? Is it capped or is it, just how much, like if there were a big national outbreak, is there a cap on how much would be paid out from the out the USDA budget?
Chris: (14:30)
I don't know that. I don't think so, but also, frankly, within the scope of the USDA budget would expect this would be a relatively small line item.
Tracy: (14:41)
So I know traditionally in the US the way we've handled avian flu outbreaks is basically by trying to isolate the cases, destroy the affected flock and stamp it out that way. But there's some discussion of maybe moving to a vaccine-based model. And there are other countries that have started to do this, China being a notable example. Is that a viable option for America? Should we, instead of compensating farmers for millions of dead chickens, should we perhaps be looking at mass vaccinations?
Chris: (15:16)
Well, that is something that the USDA is currently considering. They are running HPAI vaccine trials. But there are no currently approved HPAI vaccines, and we have to be careful with this and make sure that there is a global decision about whether or not to move forward with vaccination as the means of addressing HPAI.
Because it's a truly global market, and it's a significant portion of Delaware's chicken production and of our US chicken production is for the global market. So the EU, for example, is slated to start vaccinations for poultry soon, whereas the UK prohibits vaccinations of poultry. And I think it's critical that efforts to vaccinate American flux don't have the unintended adverse impact of shutting off key export markets for us around the world.
Joe: (16:08)
So there are trade relationships that we have that stipulate certain nature of the chickens that get exported, etc. And so, depending on what happens with the vaccination, that could be in violation, theoretically. Is that the idea?
Chris: (16:23)
That's right. So there are countries that, I think, are inappropriately using HPAI as an excuse to stop importing American chicken. We have long been barred from the Chinese market, for example, which had been one of our largest, most profitable markets. Actually, ironically, less for the chicken meat than for the claws.
It's something that often surprises audiences when I tell them that in some ways the most profitable part of chicken grown in Delaware is the export of their claws to the Chinese market that's been shut off to us for a number of years onto the flimsy excuse that HPAI, if there are outbreaks, uh, in other parts of the United States justifies barring exports from Delaware, we've tried to get regionalization understood and accepted.
If there's an HPAI outbreak in Washington state, for example to use that as an excuse to prevent Delmarva chicken from being exported into a market around the world, I think is unjustified. But we also have some countries that have said, if you begin vaccinations, we will bar your chickens, from being exported into our country on that basis.
Joe: (17:38)
Tracy, I'm a big fan of chicken feet, by the way.
Tracy: (17:41)
They're supposed to be good for your skin too. Lots of collagen. They're delicious. Senator, just on the vaccination point, I believe there are also medical concerns. So the worry is that if you were to vaccinate flocks that you might still get infections, but they would just be less noticeable, the chickens wouldn't get as sick, and then they would sort of, I guess, become silent spreaders of the disease to unvaccinated birds.
Chris: (18:09)
That's right. That's a concern with any vaccine is that if it's not sufficiently efficacious, if it doesn't have the impact of stomping out the infection, it can simply lead to it spreading more broadly, uh, not being noticed because the carriers are asymptomatic and then the long-term public health consequences can be significant.
So I think it's important that the current vaccine trials that USDAA is undergoing be allowed to be thorough and complete. It would be a big change in our policy to deal with HPAI through vaccination. And if that comes to pass, we wanna make sure that it's medically sound that it's sound is a matter of public health and that it's sound is a matter of its potential impact on our poultry industry.
Joe: (19:02)
Forgive me for asking what may be sort of a politics question, but, you know, you talk about your work with the late Senator Johnny Isakason in this case, you're working alongside the senator from Mississippi, Senator Wicker. You know, we're used to as consumers of news hearing about these like huge pitched battles in DC that always come down to the last second. In areas like this, chicken farming, something like this. Is there more of this activity, bipartisan consensus activity than maybe the general public realizes?
Chris: (19:35)
Yes, Joe. There is. And and frankly, that's one of the reasons, I was attracted to forming the Chicken Caucus with Johnny and to continuing to sustain it and lead it, is that it's something that helps pull together senators from across the country and from different backgrounds.
And look, that's part of the history of the Farm Bill, is that the Farm Bill has long been broadly bipartisan. The Farm Bill in 2018 got 87 votes. And my hope is that chair Stabenow and ranking member Bozeman will get that strongest support with this legislation this year. And adding this piece, the HPAI act to the Farm Bill would help secure some additional support from around the country within my own state.
I'm really struck at how organizations that don't necessarily or always support every legislative initiative I take, like the American Farm Bureau Federation or egg producers, or the Delmarva Chicken Association, they're enthusiastically in support of this legislation.
At the end of the day, each of us as Senators comes here to advance the interests and concerns of our constituents and comes here with some, you know, ideological or philosophical bents. I have enjoyed and benefited, from finding core concerns of my constituents, like the vibrancy of our poultry industry that really aren't ideological, that really don't have a Republican or Democratic tinge to them.
And then finding friends and partners I can work with on things like this. Roger and I, Senator Wicker and I have worked on a range of different things from national service to neglected tropical diseases to the Chicken Caucus. And that has helped us to find our way towards legislating together on other topics.
Tracy: (21:38)
Since Joe asked about bipartisan support, let me ask the devil's advocate question, which is, why do farmers get extra support for this type of crop or poultry or animal loss? I mean, other people start businesses. If there's an act of God of some sort, maybe they have insurance for it, maybe they don't, they have to, you know, take on those costs themselves. Why do farmers deserve government support?
Chris: (22:05)
Tracy, your question presumes that we don't provide billions of subsidies for coastlines that frankly, we have to pay out every time there's a hurricane season, or that we don't provide billions in disaster relief every time there's a tornado or a wildfire or a drought.
And the reality is that we do. Farming is very difficult. It is unpredictable. It is dependent on the weather, it's dependent on the markets. And as you well know, we have the most productive agricultural sector on the planet. And as I have spent time in the developing world in the global south, visiting with small holder farmers whose yields are a 10th of what ours are I have come to appreciate the broad and deep history and the infrastructure here around supporting agriculture, crop insurance, programs for youth like Future Farmers of America 4H, financing, access to credit, infrastructure, investments in hybrids and developing new seeds and new strains.
Our support federally for agriculture is really remarkable. And that's why we have the safest, most secure, most productive agricultural system in the world. And it's why we not only have enough to feed every American but we send commodity agricultural products from the United States, to feed the hungry and the starving around the world.
Just a few weeks ago, I was with a bipartisan delegation through the Aspen Institute in Kenya, and we visited both a refugee camp in the Far Northwest. A remote and difficult and harsh place where there's a quarter million refugees from Sudan, being sustained and fed through the World Food Program.
And I got to visit a new factory in Nairobi where they're manufacturing something that really was initially piloted here in the United States, in factories in Georgia and in Rhode Island that takes peanuts and milk solids and vegetable oil and micronutrients and makes a nearly miraculous paste called Plumpynut, literally Plumpynut.
And if you want to do a show on Plumpynut, I would be excited. It has the technical term, RUTF or Ready to Use Therapeutic Food, an acronym only a bureaucrat could love. But Johnny was very passionate about Plumpynut. I first heard about it from him because Georgia Peanut Farmers, are so supportive of this critical life saving paste.
And I got to visit a pediatric ward in a clinic at this refugee camp where tragically children on the edge of starvation, uh, were being nursed back to health, um, through medical interventions. Uh, but when plumping out is available, and it is in that refugee camp available, um, it can help revive children and adults who've been severely and acutely malnourished. So I think it's important for us to recognize that some of the interventions we're providing, like these payments, um, to poultry growers don't just help sustain our poultry economy, don't just help sustain farmers in the United States but help sustain us as the reserve provider of nutrition to a lot of the world.
Joe: (25:26)
What is the sort of status, how does it get folded into the Farm Bill and what is the sort of like broader industry support that this has?
Chris: (25:33)
This particular legislation has tremendous support. I'm really grateful for the ways in which we have a dozen co-sponsors that are bipartisan of the United Egg Producers. The Farm Bureaus in 18 states, the American Farm Bureau Federation, the National Chicken Council, have all supported it. And it would be added to the Farm Bill as an amendment.
If Senator Stabenow and Bozeman endorse it and accept it, it would go into what's called a manager's package as the bill is taken up on the floor or possibly as it comes through committee. But look, if you've got broad bipartisan support for a common sense solution to a problem that could impact poultry growers in 30 states, um, that's exactly the sort of thing that ends up getting done without there being a floor vote just by having it added as an amendment to the bill.
Tracy: (26:25)
So, Senator, I want to ask just one more question, which is, you know, last year we had the flu outbreak, we saw the huge runup in egg prices. They've since come crashing down. What are you hearing from Delaware poultry farmers, your constituents? What are their concerns now?
Chris: (26:42)
Well, their concerns are making sure that they continue to have strong market access. In fact one of the larger egg producers in Delaware just got a grant, I think we announced it a few days ago, to put rooftop solar on their chicken houses. Because energy costs are a big part of egg production and poultry growing.
One of the real challenges that is a result of these heat waves we're seeing that I believe are caused by climate change is that maintaining the temperature in a chicken house so that the chickens don't all broil before they're done growing and so that eggs can hatch safely. That's a key input.
And so the cost of maintaining poultry houses successfully is a big deal. One of the other things that we're trying to do is to make sure that we continue to have commercial flocks that are viable even though there are detections of high pathogenic avian influenza.
Last year we spent nearly a billion dollars on this, but to be clear, we are out of the woods. And the last detection in the United States was now back in April. And ongoing surveillance testing of the wild bird population, which is where HPAI comes from, indicates that the virus has subsided for now.
So I do want to say just how grateful I am and many of us are for APHIS and, and the Department of Agriculture for what they do to help make sure that poultry growers aren't driven out of business by these outbreaks that they're identified, that they're managed properly, they're contained, and then we're able to go back to enjoying America's most affordable, ecologically sustainable, highest quality, food protein, which is chicken
Joe: (28:39)
Senator Coons, thank you so much for joining us until this had no idea there was a Senate Chicken Caucus. And we're going to maybe spawn several more follow-up episodes. So appreciate you coming on Odd Lots.
Chris: (28:51)
I am actually holding a bejeweled large chicken that Johnny and I bought together in Nigeria. If you ever want some visuals for the podcast, you just let me know.
Tracy: (29:03)
Absolutely. Thank you.
Joe: (29:22)
Tracy. I really enjoyed that conversation. Are you going to do it? Are you going start a side hustle of growing chickens?
Tracy: (29:29)
I think it's a few years off, Joe, but I did love the origin story of Delaware as a chicken powerhouse. That was amazing.
Joe: (29:36)
Okay, so the story turns dark. Do you know the full story?
Tracy: (29:42)
Wait, did the Senator leave something out?
Joe: (29:45)
No, he didn't leave anything out. It's just an interesting sort of macabre ending to the story. So I read online, Cecile Long Steele, this is according to, the Delaware Women's Hall of Fame, so she accidentally started this chicken empire in Delaware in 1923 because she ordered 50 chicks and accidentally got 500. And so she became this huge chicken magnate in Delaware. You know, that famous thread about like the tomatos. She kind of did that because then she...
Tracy: (30:20)
She got 500 chickens and they all had five baby chicks and it just multiplied?
Joe: (30:24)
Exactly. And then she, then after, you know, once she got going a year later and she realized that this was taking off, then she ordered a thousand chicks. They became very rich. And then her husband David Wilmer Steel was actually elected to the State Senate. Then they bought a yacht.
Tracy: (30:45)
Okay.
Joe: (30:46)
And then in 1940 the yacht exploded accidentally.
Tracy: (30:48)
Oh my gosh.
Joe: (30:50)
And Cecile and her husband, all the guests were fine, but both Cecile and her husband were killed in it. So anyway, what seemed like a sort of happy fortunate thing — accidentally becoming a chicken magnate, getting rich, getting elected to the state senate, buying a yacht — had an unhappy ending.
Tracy: (31:12)
That's sad. On a happier note...
Joe: (31:14)
So maybe you don't want to [become a chicken mandate], you know...
Tracy: (31:17)
Because I might become really rich and die on my yacht?
Joe: (31:20)
Don't buy a yacht.
Tracy: (31:21)
All right. Noted risk factor. But I did think it was a really interesting discussion, the way he sort of described the landscape of the American poultry industry. And I had heard about that business model he described, the contract poultry farming, before. And I believe there are some, well, there are some tensions between small scale growers and the larger companies like a Tyson or a Purdue or whatever. We should dig into that.
Joe: (31:48)
Definitely market structure questions, because there are all these things about both that particular structure of growing, but then there are also questions about industry concentration in the stockyards and things like that. So there's plenty more to do on this topic.
Tracy: (32:03)
In the meantime, you know who has really good chicken feet?
Joe: (32:07)
Who?
Tracy: (32:08)
Tim Ho Wan. And they're in New York now.
Joe: (32:10)
Oh, let's go, let's go soon.
Tracy: (32:11)
Their original store was in Hong Kong. And they've opened a couple here and they're really good.
Joe: (32:16)
I love eating chicken feet.
Tracy: (32:19)
Okay, Chicken feet excursion. Shall we leave it there?
Joe: (32:21)
Let's leave it there.
You can follow Senator Chris Coons at
@ChrisCoons
.