Subsidizing the Spread: Bird Flu Bailouts Expand from Poultry to Dairy

ISSUE BRIEF

Since the beginning of the current H5N1 outbreak in early 2022, the federal government has been bailing out meat and dairy companies for losses related to the virus. These bailouts come in the form of so-called “indemnity payments”—federal funds designed to compensate producers for the value of animals or animal products (e.g., milk) lost due to the epidemic. However, these payments aren’t just acts of emergency relief; they can function as subsidies that prop up a system of industrial animal agriculture, whose core practices are driving the same bird flu crisis these payments are intended to address.

Earlier this year, Farm Forward reported that USDA had made $1.25 billion in indemnity payments to the poultry industry to compensate producers for economic losses from bird deaths, including funds allocated for the “depopulation” (that is, culling) of infected birds (see Farm Forward’s report for an analysis of poultry indemnities). Now, Farm Forward presents new data, gathered through the Freedom of Information Act, that shows a similar pattern of harmful indemnities to farms raising dairy cows affected by bird flu. The extension of indemnity payments to dairy producers reveals how the federal government continues to fail in its bird flu response and prop up the industry’s reckless practices that threaten public health. The FOIA data1 obtained by Farm Forward reveals four key findings:

1. The large-scale dairies most responsible for endangering public health reap the most benefit from taxpayer bailouts.
2. USDA repeatedly bails out the same producers for ongoing outbreaks, with over forty percent of payments going to recipients who received multiple disbursements.
3. By making losses the financial responsibility of the taxpayer and requiring no changes in behavior from operators, the USDA payments incentivize producers to continue their risky practices that exacerbate the outbreak.
4. Federal agencies are neglecting the threat of bird flu and deliberately sidestepping common-sense solutions because of industry pressure.

In July 2024, USDA began to compensate dairy producers for losses associated with the virus.2 The Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish Program (ELAP) is a federal program administered by USDA to compensate producers for losses in response to a range of events (e.g., disease outbreaks, adverse weather, or feed shortages) that impact livestock, honeybee colonies, and farm-raised fish. In response to the growing impact of bird flu on U.S. dairy herds, USDA expanded ELAP eligibility to include dairy producers affected by the virus. This move allowed dairies to access federal compensation for losses linked to infection, such as decreased milk production and the costs of testing and containment.3 The original intention of the ELAP program is a good one; it is reasonable to protect farmers from extreme weather and disasters outside of their control.

Bird flu, however, is not an act of God—it is often the direct result of routine practices in industrial animal farming operations, whose crowded, filthy, cramped conditions create and exacerbate disease outbreaks.4 Unlike a corn or soybean farmer, who can’t meaningfully change their farming practices in ways that would reduce the risk of future extreme weather events, animal farming operations can and should make changes to reduce future risk of pandemic diseases. Common sense policy for animal operations indemnity payments should be to a) encourage producers to test and report outbreaks, and b) create incentives for producers to change practices in ways that will reduce the spread of the disease (e.g., lowering animal density).

As of January 2025, USDA has distributed over $80 million through ELAP to assist dairy producers, including large-scale producers, in covering losses from H5N1-related milk production declines.5 Despite tens of millions in taxpayer bailouts for these dairy companies, there’s little sign that such operations or the animal farming industry as a whole are making progress to improve their farming practices in ways that would reduce the risk of the virus spreading.6

The bailouts from the ELAP program are just one part of the ongoing failure of both the Democratic and Republican parties to respond to the bird flu outbreak robustly. In April 2025, the FDA suspended its testing program for milk, which would improve bird flu testing and milk safety. The Trump administration also made sweeping cuts to an already limited staff responsible for testing, tracking, and controlling the virus;7 canceled plans for an H5N1 poultry vaccine;8 and cut funding for the development of a human H5N1 vaccine.9 Taken together, our findings highlight the repeated failures of the federal government to contain the H5N1 outbreak and protect public health.

1. The large-scale dairies most responsible for endangering public health reap the most benefit from taxpayer bailouts.

Our review of FOIA payment data indicated that large-scale dairies in major dairy-industry areas like Tulare County and Kings County in California (as well as Weld County in Colorado) received some of the largest payments, with many receiving nearly $1 million. While operations with more animals will have greater losses than a smaller operation with fewer, and therefore will have more losses and receive higher payments, this approach reflects the business-as-usual approach of subsidizing large-scale farms for externalities they themselves create and exacerbate. Many of these operations use large freestall barns, typified by high-confinement conditions with limited outdoor access, all of which require massive cesspools of manure, creating the perfect breeding grounds for disease.10

The top three individual payment recipients are all large-scale industrial dairies, confirmed through analyzing satellite imagery (see Appendix):

• Prado Dairy LLC (CO) – $1,545,189
• Williams Family Dairy LLC (CA) – $998,864
• Meadowvale Dairy LLC (IA) – $914,849

The size of these payments is notable not only because they represent large expenditures of taxpayer dollars to industrial producers but also because ELAP eligibility for milk losses states that “a person or legal entity with an AGI (as defined in 7 CFR Part 1400) that exceeds $900,000 will not be eligible to receive ELAP payments.”11 The payments that these companies received for milk losses exceed the maximum adjusted gross income allowed, suggesting that if, in fact, producers like these operate below the $900,000 threshold, they may have been compensated in total for more than they make in a given year.12

In California specifically, our analysis of FOIA records indicates that roughly three-fourths of payments went to large-scale dairy operations.13 This is reflective of the broader trend of federal subsidies, tax credits, and incentive programs primarily benefiting large-scale animal operations over smaller and more sustainable ones.14 It is precisely trends like these that compelled former representative Earl Blumenauer (D-OR) to propose the federal Food and Farm Act, which “would redirect billions of dollars away from subsidies for commodity farms towards programs that support small farmers, climate-friendly agriculture and increasing healthy food access [emphasis added].”15 And yet, despite efforts at reforms like this one, the federal government instead doubles down on subsidizing and incentivizing those industrial producers that do the most harm.

2. USDA repeatedly bails out the same producers for ongoing outbreaks, with over forty percent of payments going to recipients who received multiple disbursements. USDA has required no change in behavior and issued no penalties on dairies despite the repeated problems.

As is the case with payments to poultry companies that have had bird flu outbreaks and bailouts, many large-scale dairies have received multiple payments, which suggests they have received taxpayer dollars for repeat or ongoing outbreaks. Per our analysis of outlays to dairy companies, 43 percent of payments went to recipients who received multiple disbursements,16 some of which received as many as five separate payments from USDA in a six-month period. This included, but was not limited to, Meadowvale Dairy LLC, Wolf Creek Dairy LLC, Sierra View Dairy, 4K Dairy Family Partnership, and Parreira-Gaspar Dairy, which collectively received nearly $6 million in payments. This suggests a pattern: industrial dairies that received payments (that were very likely related to bird flu17) engage in practices that make losses either predictable or more probable and are the very operations that reap the most economic benefit from taxpayer dollars.18 We expect that these trends have continued into 2025.19

3. By making losses the financial responsibility of the taxpayer and requiring no changes in behavior from operators, the USDA payments continue to incentivize producers to continue their risky practices that exacerbate the outbreak.

Federal regulators have failed on multiple fronts to control the spread of bird flu, and the current system of USDA indemnities entrenches these failures.20 USDA compensation programs pay producers for disease losses, but fail to require the changes to farming practices that could reduce future disease risks.21 This allows these producers to privatize their profits but make their losses a public taxpayer responsibility, enabling the moral hazard associated with managing their herds irresponsibly in a way that encourages the risk of outbreaks. USDA indemnity allocation does not address the fundamental risks associated with disease spread, such as high-density housing of animals, unsanitary conditions, and speed of production that compromises the implementation of proper safety protocols.22 Although the CDC recommends that dairy and poultry workers wear personal protective equipment (PPE) when in contact with poultry and dairy cows,23 there is no mandate to do so in order to receive federal funds. Without meaningful biosecurity requirements attached to indemnity payments, producers are disincentivized to implement more responsible farming practices, increasing risk and endangering public health.

4. Federal agencies are neglecting the threat of bird flu and deliberately sidestepping common-sense solutions because of industry pressure.

Along with propping up a risky system with bailouts, the government is hampering the efforts that would effectively track and contain the virus. Since January 2025, crucial federal programs related to detecting and containing bird flu have seen major budget and staff cuts. Mass layoffs affected the already small staff responsible for responding to animal disease outbreaks at the USDA’s National Animal Health Laboratory Network,24 and top veterinarians in the FDA’s Center for Veterinary Medicine were fired.25 Testing of animals and humans is a cornerstone of effective disease response. However, federal policy related to testing and tracking means that the scale of the outbreak is unknown. In April 2025, the FDA suspended a major bird flu testing initiative for milk and cheese, severely limiting the ability of farmers, public health officials, and the public to know even basic details about the ongoing spread of the disease.26 Critically important testing for farmworkers in dairy and poultry operations has been severely limited, and farmworkers (who typically lack health insurance or paid sick leave) are disinclined to seek testing when they are ill, especially with the severe risks posed to many workers in the Trump Administration’s aggressive crackdown on immigration.27 Without adequate testing, tracking, and government resources allocated to disease management, the virus has been allowed to spread unchecked.

The federal government has put public health at further risk by hampering the development of vaccines for animals and humans that would be essential in containing the outbreak. Most recently, the Department of Human Services (HHS) terminated a more than $700 million grant to Moderna for the development of a human bird flu vaccine.28 After a refusal to pursue a poultry vaccine due to the potential impacts on the export market, USDA finally announced in June 2025 that it will consider a plan to explore the viability of such a vaccine; however, applications for federal grants dedicated to H5N1 poultry vaccines will not be awarded until fall of 2025, delaying their development and pushing out their distribution indefinitely.29  Similarly, early research on a vaccine for dairy cows has shown some promise, but “political headwinds” at the federal and state levels threaten their viability.30 Without vaccines, we lack essential weapons in the battle against the next human pandemic.

Conclusion

The combined failures of the federal government in responding to the H5N1 outbreak are only exacerbated by the current indemnification system. Ultimately, compensating losses due to disasters or illness is not intrinsically bad policy. However, continuing to subsidize a model of agriculture (i.e., industrial, high-confinement) that creates the conditions for disease outbreak, refusing to require meaningful disease containment measures (e.g., biosecurity, testing, vaccines), or leveraging taxpayer funds to incentivize safer, healthier farming practices amounts to reckless endangerment of public health paid for with taxpayer funds.

The dynamic that has emerged across the government’s response to bird flu is a troubling, though largely unsurprising, pattern: the industrial animal sector drives disease risk through intensive production, yet it also secures public funding to shield itself from the financial consequences of such production methods. There’s no silver bullet that will eliminate pandemic risk, but rethinking the way the current methods of farming intensify disease outbreaks—such as by attaching biosecurity requirements and better farming practices to bailouts, and leveraging risk-based insurance programs for indemnity payments—is essential for preventing the growing risk of a human H5N1 pandemic.

Methods

A spreadsheet was received from USDA detailing all payments made through the ELAP program in 2024. There were nearly 20,000 entries, most of which were records that were likely not related to bird flu. The dataset was limited in its specificity and clarity, so the entries were filtered to only payment recipients with “dairy” in the name and, therefore, were very likely to represent dairy companies. However, this means that there were almost certainly some payments that went to dairy companies that were not captured by our analysis. Further, per USDA, the dataset “may or may not be for reduced milk production as the data is not available in that format.” Although the nature of the available data makes it impossible to verify precisely which payments went to H5N1 indemnities, we do know that after USDA opened ELAP to bird flu compensations, payouts to dairy companies spiked by approximately 900 percent, indicating that substantial taxpayer funds have gone to bailouts for bird flu.

Appendix

Satellite Image of Prado Dairy LLC in Weld County, Colorado, the operation that received the most in a single payment: over $1,500,000 per the dataset received from USDA. Image courtesy of Google Maps.

Satellite Image of Williams Family Dairy LLC in Tulare County, California, an operation with many thousands of animals that received a nearly $1,000,000 in payment per the dataset received from USDA.

Satellite Image of Meadowvale Dairy LLC in Sioux County, Iowa, the recipient that received the most: over $1,800,000 in payments per the dataset received from USDA. Image courtesy of Google Maps.