APHIS Updates Indemnity Calculators for Turkeys

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The U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) is updating the calculator it uses to determine indemnity payments for turkeys lost to certain foreign animal diseases.  Under the Animal Health Protection Act, APHIS has the authority to depopulate poultry that is affected by serious diseases, such as highly pathogenic avian influenza (HPAI) and Newcastle disease.  When depopulation occurs, APHIS provides indemnity payments to producers for birds and eggs that must be destroyed to stop the spread of the disease.  After the 2014-2015 outbreak of HPAI, turkey producers offered additional sources of data to improve calculation of turkey indemnity values. 

The new calculator addresses two topics raised by producers of meat birds. Specifically, the calculator changes include the use of seasonally weighted prices and the incorporation of updated carcass composition percentages.  A third change adopts the methodology suggested by USDA’s Office of the Chief Economist to more accurately simulate a free-market transaction by splitting turkey breeder returns equally between the buyer (USDA) and the seller (company and contractor), replacing the current calculator’s estimate of 10 percent of retained earnings.  This approach is consistent with the changes APHIS made to the egg-layer calculator and allows for consistency across breeder bird indemnity calculators.
APHIS will implement the updated formula beginning today and will update it quarterly.  APHIS will use the updated calculator to determine future payments only.

For more information on the indemnity process click here.

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