Minnesota county hit hard by ripple effects of state's bird flu epidemic

PRINSBURG, Minn. – Truck traffic through the Farmers Co-op's feed mill here is about half of normal these days. The co-op just doesn't need as much grain to mix into feed. The 130,000-plus birds at its nearby turkey farms are dead.

This is ground zero for the bird flu that's devastating Minnesota's turkey industry and threatening the state's rural economy. Kandiyohi County is the largest turkey producer in the nation's biggest turkey-producing state, and the county seat of Willmar is home to turkey giant Jennie-O.

Of the 83 Minnesota turkey farms stricken by the flu, 33 are in Kandiyohi, by far the most for any one county.

"I've been in this game since 1963, and I've seen a lot of things come and go — dry weather, storms — but a live animal event like this, it's pretty catastrophic," said Harvey Van Eps, general manager of Prinsburg's Farmers Co-op.

The damage is spreading. Turkey industry workers are being laid off or getting their hours cut back. Truckers and feed suppliers are losing business. Some retailers are being stung by turkey workers' lost wages. All businesses that rely on King Turkey are getting anxious.

"Obviously we are very concerned not only about the health of the industry, but of the ripple effects," said Steve Renquist, executive director of the Kandiyohi County and City of Willmar Economic Development Commission. "There will be less disposable income."

Alberto Gasca, owner of La Fiesta in Willmar, already has seen the impact: His grocery's sales have been off about 20 percent since the flu kicked into high gear. "Probably the first businesses that get hit are businesses like ours — food," he said.

Gasca's store caters to many Hispanic workers employed by turkey farms and turkey processors — and their families.

"The people who work directly in the barns — the ones who are lucky — are working 20 to 30 hours a week," Gasca said. "Others are just out of work."

The bird flu outbreak that has claimed 4.5 million turkeys in Minnesota seems to be slowing, as warmer weather is thought to be killing the virus.

But scientists believe more outbreaks are possible in the fall and said the flu could hang around for a few years. They have yet to figure out how it has spread or how to stop it. "We can't say we have a vaccine or have it under control," Van Eps said.

So the Prinsburg co-op — like every other Minnesota turkey grower and the economies they sustain — is dealing with a big uncertainty. "The thing we don't know is how long it will carry on," Renquist said.

The flu has rolled through 15 states since winter, killing 40 million turkeys and chickens, hitting Minnesota and Iowa particularly hard. About 10 percent of Minnesota's annual turkey production has been wiped out. The state also has lost 3.5 million hens at four egg-laying farms.

A University of Minnesota analysis released Monday estimated Minnesota's total economic losses at $310 million and counting. The study put direct losses — from the deaths of turkeys and egg-laying chickens — at $113 million. For every $1 million in direct losses, the report said the ripple effect leads to an estimated $1.8 million in overall losses, including $450,000 in wages.

Haug Implement Co., a big John Deere dealer in Willmar, caters to farmers hit directly by the flu, and owner Paal Haug is worried. The company has seen a sales uptick as growers "needed extra equipment to clean up the mess," he said. Pressure washers have been a particularly hot item.

But the long-term effect of the bird flu can only be bad: The longer turkey farms are out of production, the fewer resources farmers will have to buy equipment, he said.

"We are concerned about our customers, there's no doubt about that," Haug said.

The "trickle-down" from the bird flu affects a lot of local business, he said. "There are so many people connected to the turkey industry in this area."

Kandiyohi County and Willmar have long been the state's turkey hub. Turkey farmer and poultry pioneer Earl Olson set up his first processing plant in Willmar in 1949, christening his brand Jennie-O in honor of his daughter. Today, Jennie-O is arguably the nation's most recognizable turkey brand, and the business is a vital division of Austin-based Hormel Foods.

Jennie-O is still based in Willmar, and the company — through offices, processing plants and corporate farms — is Kandiyohi County's largest employer, with about 3,000 workers, Renquist said.

Willmar is also home to Life-Science Innovations, a privately held firm with extensive interests in several facets of the turkey industry. It's a major force in the turkey hatchery and breeding end of the business, and not just in Minnesota.

Both turkey titans have been hit hard by the bird flu.

"As of right now, all of our Minnesota company-owned breeder farms have tested positive for avian influenza," Life-Science said in a statement. "This means we are no longer producing eggs on any of our MN company farms, which represents 25 percent of our total egg supply."

The company said it's finding temporary work for its employees as it rebuilds from the bird flu.

Jennie-O relies on Minnesota and Wisconsin for its bird supply, a setup that in normal times boosts efficiency but is now wreaking havoc on the company's supply chain. Fifty-eight percent of Minnesota turkey farms hit by the flu are Jennie-O suppliers, including several operations owned directly by Hormel.

With the bird pipeline stopped up, Jennie-O can't efficiently use its slaughterhouses. It has temporarily laid off 233 workers at its processing plant in Fari­bault.

"Operations temporarily slowed down in some departments at our Willmar locations," Hormel said in a statement. "We do have some departments that are working four days a week but others are working a more normal schedule."

Workers at one Jennie-O plant there said their hours have been cutin the past two weeks. One veteran worker said her weekly hours went from about 45 to 20. "It is getting worse every day," she said.

Turkey processors and farmers both have an incentive to cut hours rather than simply let employees go, even temporarily. Once laid off, workers might look for other jobs, leaving employers to hire and train green recruits.

At the Prinsburg co-op, managers are putting workers on construction or maintenance projects.

The co-op, which counts more than 400 area farmers as members, began in 1926. It sells fertilizer, fuel and feed (it's still supplying hog growers), and got directly into the turkey business in the mid-1980s. Poultry seemed like a logical diversification: Farmers' corn and soybean crops could be used to make feed for turkeys.

Jennie-O employs many "contract growers" like the co-op. It owns the birds and pays for feed, while the grower provides the barn and farm labor, getting a fee based on pounds of turkey delivered.

The bird flu not only erases income from birds, but it shuts down a producer's barns for at least two months.

For 28 days, dead birds remain in the barn, "composted" in a mix of wood shavings and manure. The detritus is removed and barns are thoroughly cleaned and disinfected. They sit empty for another 21 days before growers can get the green light from federal farm regulators.

Van Eps said Prinsburg's co-op will lose about $300,000 in revenue just from its barns being idled.

In June, the co-op plans to repopulate one of its three farms with live turkeys. But the worries won't go away. Given the mystery surrounding the flu's spread, what if the next set of birds dies, or the one after that?

Then, the co-op wouldn't be able to hold on to turkey employees, Van Eps said. And if the flu was a persistent menace, the co-op's farmer members would have to reassess being in the turkey business. "When do you cut your losses?" Van Eps asked.

Mike Hughlett • 612-673-7003