$1 billion plan to combat avian flu & lower egg prices announced by USDA Secretary after Texas visit
Amid the continued spread of avian flu and high egg prices, the U.S. Department of Agriculture announced a $1 billion plan to fight avian flu and lower egg prices.
The new strategy comes two days after USDA Secretary Brooke Rollins visited East Texas to speak with nearly two dozen representatives of the agriculture industry.
Egg prices soared to nearly $5.00 last month, a 53% jump from a year ago. The USDA says egg prices could go up another 41% this year.
As part of the plan, the USDA will spend $500 million on biosecurity measures.
The government will provide commercial egg farms with best practices and consulting services to prevent the spread of avian flu at no charge and pay up to 75% of the costs to address vulnerabilities.
About $400 million will be added to financial relief programs for impacted farmers that began during the Biden administration.
The USDA will provide about $100 million for the research and development of vaccines and therapeutics to help reduce the need to kill chickens when there's an outbreak.
If necessary, the government will consider temporarily importing eggs as long as they meet U.S. safety standards. The agency will also eliminate regulations that they say raise egg prices.
In an interview with CBS News Texas in Mount Pleasant Monday, Rollins said regulations have an impact.
"When you're a state like California that passes Proposition 12, which, by the way, requires the chickens have a lot of space, the price of eggs in California, the average price is over $9.50," said Rollins. "The average price for the rest of the country is closer to $5.00."
When asked what policies they are considering to lower food costs Rollins said, "It is across the board, deregulation, lifting a lot of the rules and regulations put in place in the last administration. The bigger government gets, the more regulators are on your back, the more rules you have to follow, the more our farmers have to fill out more paperwork, more bureaucratic processes, that causes everything to increase in cost."
One egg producer told Rollins Monday that it takes one chicken for every person in the U.S. to have ample supply and that right now, there's a deficit of 50 million birds because they've had to kill so many of them across the country for years.
Rollins said prices won't go down right away.
"This is more of a long-term solution, but what I can say is that those prices should start coming down maybe this spring, this summer as we work to implement some of those bigger-picture solutions," said Rollins.
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Country Financial and another Illinois-based insurer, American Farm Bureau Insurance Services, have ties to nonprofit groups made up of farmers and non-farmers that lobby for biofuel production, free trade and agricultural subsidies, including crop insurance subsidies. Several people on the leadership team of Country Financial have previously worked at or have joint positions at the Illinois Farm Bureau, which spent $120,000 lobbying on Capitol Hill last year. American Farm Bureau Insurance Services, also based in Illinois, is partially owned by the American Farm Bureau Federation, a national lobbying group that calls itself 'the unified national voice of agriculture' and sowed doubt that climate change was real until a few years ago. It spent more than $7 million lobbying in Washington in the two years before the passage of the last farm bill in September 2018. Last year, as talks were underway about the next farm bill, the federation spent over $1.3 million lobbying. The Crop Insurance and Reinsurance Bureau, an advocacy group that includes eight of the 12 approved providers in its membership, has consistently spent $320,000 to $400,000 annually on lobbying since 2014. 'I 100% have a concern about it,' said U.S. Rep. Jonathan Jackson, a Democrat from Chicago who sits on the House Agriculture Committee. He'd like to see more woman- and minority-owned insurance firms on the list of federally approved providers. 'It is a public-private partnership where the government is covering 60% of the premiums. That, to me, is a strong call to make the case for diversity, equity and inclusion.' Congress is negotiating a new farm bill this year, but previous legislation prohibits the federal government from making any changes to crop insurance that would lower the subsidies providers receive. 'It's not dissimilar from how the federal government hasn't been allowed to negotiate for lower drug prices through Medicare. A similar dynamic exists here in crop insurance, and that was a very intentional provision that was added in the 2014 farm bill,' Hackett said. Farms were highly diversified and much smaller in the 1920s, said Scott Irwin, a professor of agricultural marketing at the University of Illinois Urbana-Champaign. They still would have grown plenty of corn but less soybeans. Lots of ground was used to grow oats and hay to feed the horses that did most of the manual labor. As motorized vehicles became popular, there was less need for horses. Illinois' flat land was ideally suited for mechanical agriculture: tractors, combines and planters. And, fewer horses meant less need for hay and oats. Field space freed up just as Americans' appetite for meat increased. Soybeans, an import from East Asia, were an ideal high-protein diet for livestock. It just so happened that they grew well in Illinois. A connected network of rivers also positioned Illinois to export grain and beans throughout the Americas. Railroads were built to further facilitate the transfer. Food processors such as ADM and Cargill set up shop in Illinois to be closer to their raw ingredients and benefit from the region's robust transportation system. 'You stir all that together and you get Illinois' comparative advantage within the U.S. and globally to produce corn and soybeans at scale,' said Irwin. Today, one would be hard-pressed to find a rural town in Illinois where a tall silo can't be seen beyond acres of open field. Crop insurance has kept Illinois committed to these two by Congress in the late 1930s in response to the Great Depression and Dust Bowl, crop insurance was intended to reduce the need for ad hoc disaster spending. In recent years, however, it has become a near-constant form of disaster spending. The top five weather-related losses resulted in over $118.7 billion in payouts nationally from 2001 to 2022, according to the Environmental Working Group. But, crop insurance companies rarely lost money because they have been allowed to assign higher risk policies to the federal government. The only year crop insurance companies did not profit was 2012, when extreme drought ravaged the majority of the country. Payouts in Illinois topped $3.5 billion. Droughts are anticipated to become increasingly common between intense storms as climate change makes Illinois significantly warmer and wetter. So far, the higher temperatures have been concentrated in the winter and at night. This has made growing seasons longer, actually giving corn and soybean farmers more flexibility. It's also much easier to deal with too much water via drainage systems than the total lack of water that growing regions in the American Southwest are facing. 'We're more resilient, not necessarily because of measures that have been put in place, but because of a little bit of fortune in where we live,' said Ford, the Illinois state climatologist. Warmer, wetter conditions do, however, increase the prevalence of pests and bacteria, and a 2022 USDA report encouraged Illinois farmers to begin planting crops that are better suited for heat and water stress such as okra and peppers. But the consequences of climate change have yet to truly be felt on Illinois farms. 'With (fertilizers, pesticides) and the proliferation of crop insurance, the non-climate pieces of agriculture are crafted such that the climate risk we do face in the Midwest is subsidized,' Ford said. It may even shield farmers from having to think about climate change, he suggested. He has noticed that specialty crop farmers tend to be more keyed into the impacts of climate change and resilience strategies because their crop insurance systems are less robust. While farmers who grow relatively small amounts of lots of different crops, instead of just corn and soybeans, can technically buy a special plan instituted in 2014 called whole farm revenue protection, it's not well-known or easily accessible. Only 9% of specialty crop farms nationwide were insured in 2022 compared with 62% of row crop farms, according to federal agriculture department data. Dubrick was one of several diversified farmers the Tribune spoke to who explored the whole farm revenue protection plan for his vegetables and poultry but decided it was too much of a bureaucratic nightmare. He would have had to submit meticulous expense reports for every crop he grew, a cumbersome task that takes farmers' attention away from the field. 'Farming is where I find my solace and enjoyment,' Dubrick said on an overcast afternoon in early April. Dubrick's home and farm are across the street from the former home and farm of a local man he looked up to like a grandfather, who sparked his love of farming and is the namesake of his 1-year-old son, Calvin. Today, he makes all his financial decisions with his wife Lindsey, son Calvin and 3-year-old daughter Evelyn in mind. A plan that offered security while he grew his operation would be attractive, Dubrick said. In the early years, he aspired to triple his revenue to support this growing family. But whole farm revenue protection plans would only let him assume up to a 35% increase in his revenue compared to the previous year. It wouldn't be enough. 'If I knew I had a floor of what I was going to get any given year (like grain farmers), I would be more apt to invest in infrastructure and scale up more efficiencies,' said Dubrick. Many farmers don't even know about whole farm protection. Only seven of the nearly 1,600 agents who sell crop insurance in Illinois are licensed to sell whole farm plans, according to a Tribune analysis of federal agriculture department data. Agents aren't incentivized to sell whole farm plans because the 12 insurance companies pay them based on the amount of the premium they secure. It takes more time to tailor coverage to small, multi-crop farms that will inevitably pay lower premiums to insurance companies. Democrats on Capitol Hill introduced legislation in 2023 to subsidize insurance companies based on the complexity of a policy rather than the size. It would provide funds to train insurance agents on how to write whole farm policies. The legislation was intended to push insurance companies to give agents more commission for selling whole farm revenue protection plans, encouraging a safety net for small diversified farms. But the bill, called the Whole Farm Revenue Protection Program Improvement Act, didn't go anywhere. Instead, the largest 2% of policies account for over 36% — or $759 million — of the subsidies given to insurance conglomerates. So, when the Trump administration's Department of Government Efficiency posted an open call for 'insights on finding and fixing waste, fraud and abuse related to the US Department of Agriculture' on Elon Musk's X in mid-February, Schechinger decided to make a suggestion. She took to BlueSky, an X competitor: 'how about the $2B taxpayers send to private crop insurance companies/agents each year just to operate the program?' The government paid $2.2 billion in administrative and operating subsidies to crop insurance providers in 2022. It doled out another $1.5 billion in underwriting gains, which equal the difference between the premiums collected and losses paid out. 'I think (crop insurance) should be on DOGE's hit list, but not the money that's going to farmers,' Schechinger told the Tribune later that day. The USDA did not respond to requests for comment. If the government were interested in reining in insurance company profits, Schechinger said it could implement changes to the public-private partnership in the next farm bill. The comprehensive package of legislation that dictates agriculture policy is supposed to be updated every five years, but the bill that the country is operating under expired in 2023. A gridlocked Congress gave it two one-year extensions. The new expiration date is Sept. 30. Senate Democrats included the Whole Farm Revenue Protection Program Improvement Act in their latest farm bill framework. Meanwhile, a competing farm bill introduced by House Republicans sidestepped the issue. U.S. Rep. Eric Sorenson, a former meteorologist who represents parts of north and central Illinois, was one of four Democrats on the House Agriculture Committee who voted in favor of the Republican bill. His office did not respond to requests for comment. Neither the House Republican nor Senate Democrat proposals sought to rein in the insurance companies' claim to taxpayer dollars. 'The (National Sustainable Agriculture Coalition) doesn't have a policy that advocates blowing up the public-private partnership because of just how radical that is,' said Hackett, the coalition's policy specialist. 'You don't touch it.' Illinois Sen. Dick Durbin, a Senate Agriculture Committee member, had once championed a bill that would reduce crop insurance premium support for top-earning farmers. Instead of subsidizing 60% of the policy, the federal government would subsidize 45%. He abandoned the proposal, which came to be nicknamed 'the Durbin amendment,' in the latest farm bill negotiations after it failed to garner enough votes to include it in the two earlier farm bills. The senator and his team declined to comment on the matter when approached by the Tribune in April shortly before he announced his intent to retire. However, in recent months, his team shifted its attention from high-earning farmers to the impact of climate change related losses on the crop insurance industry. Durbin met with the Illinois Corn Growers Association in March to discuss how to insulate Illinois from premium hikes as southern states see more crop failures and file more claims. Crop insurance companies are already strategizing how to minimize their losses as climate change intensifies. Since they receive federal subsidies, they cannot withdraw from markets as easily as home insurance providers have in fire-, hurricane- and flood-prone areas. Last year, the federal government blocked insurance providers' attempts to pull out of West Texas, a region that's been scorched by heat and drought. 'This may be the first proverbial canary in the coal mine,' said Jonathan Coppess, a professor of agricultural policy at the U. of I. and an Agriculture Department appointee under the Obama administration. 'It's not an imminent collapse, but it is indicative of a very real, big and growing problem. Why are we insuring areas that cannot produce a crop year in and year out? I think that's a real challenge for the system.' As West Texas and other regions start feeling the impacts of climate change more intensively, premiums could rise nationwide. States like Illinois, which aren't anticipated to experience as intense extremes, may decide crop insurance isn't worth it for them, leaving only those in high-risk areas buying policies. This, Coppess warns, could be how the crop insurance industry comes tumbling down. The USDA did not respond to requests for comment, nor did U.S. Sen. Tammy Duckworth or Reps. Mike Bost, Nikki Budzinski and Mary Miller, who represent Illinois on the House Agriculture Committee. Meanwhile, without crop insurance, diversified farmers in the Midwest like Dubrick have gotten creative with nature. When a drought hit in summer 2023 and he lost nearly half of the revenue he was expecting for May through July, he was able to recoup some of his losses by pivoting to crops in other growing seasons. Corn and soybeans, on the other hand, have one optimal planting and harvesting window per year. Last year, Dubrick planted over 30 different crops to ensure he was prepared for whatever weather came his way. 'Peas like cool weather, but tomatoes and peppers want warm weather, and peppers do really well in drought. Tomatoes do better with some more moisture,' he said. 'The diversity is my insurance.' But Dubrick would feel more secure if there was a form of crop insurance that worked for him. 'Just point-blank honesty, the revenue safety net that we've leaned on the most is that my wife and I both have off-farm jobs,' Dubrick said. 'We can't lean into the farm because there's just too much unknown. Some years, I could be full time on the farm, and then the next year I would go bankrupt.'
