CHICAGO (Reuters) - The highly pathogenic H5 avian flu turned up in initial tests at five more farms in Iowa, including a commercial egg operation housing up to 5.5 million birds, Iowa's agriculture department said on Thursday.

If the virus is confirmed at the farms in additional tests under way at a U.S. Department of Agriculture laboratory, the total number of American cases could surpass 20 million birds and result in the biggest death toll in a bird flu outbreak in U.S. history.

Avian flu at the egg farm in Buena Vista County, where workers saw an unexpected jump in bird deaths before the flock was tested, could be the largest single farm operation to be hit in the current outbreak.

The egg farm's owner, Rembrandt Foods, one of the top U.S. egg producers, confirmed the outbreak but disputed the number of birds affected. The state did not identify the affected farm by name.

"Rembrandt Foods takes biosecurity and food safety very seriously. Our focus over the past several weeks has been to diligently implement enhanced biosecurity procedures," the company said in a statement. "Notwithstanding our best efforts, one of our barns at the Rembrandt, Iowa, complex has become the latest ... to test presumptive positive for avian influenza."

The company said it is working with state and federal regulatory authorities to limit the spread of the virus. Its egg-laying facilities in Renville, Minnesota, and Thompson, Iowa, are not affected, according to the company statement.

Avian flu was "probable" at four other commercial farms in Buena Vista, Sioux and Clay counties, the Iowa Department of Agriculture and Land Stewardship said. If the virus is confirmed at all five farms in the coming days, the number of sites where H5 has been found in Iowa would rise to 17.

BROILER FARM HIT

The news came only hours after state officials confirmed on Thursday that an Iowa-based chicken broiler breeding farm has initially tested positive for the virus.

The facility in Kossuth County, Iowa, houses an estimated 19,000 birds, the state agriculture department said.

Birds were dying in greater than normal numbers at the breeding farm, which is a typical sign of influenza infection in a flock.

This is thought to be first time the virus has affected a broiler breeding farm in this outbreak. Such breeding farms are traditionally known for having extremely tight biosecurity systems.

Though the operation is small compared with some of the other poultry farm sites in the Midwest that have been affected by the current outbreak, the probable breach of a chicken broiler breeder's biosecurity underscores the potential for the country's poultry meat industry supply chain to be affected.

Typically, such facilities' chickens lay fertile eggs, which are sent to a hatchery to produce chicks that are later raised and slaughtered for meat.

Infections with the H5N2 strain have picked up pace in the past few weeks. Only a million birds had been infected at the beginning of April after the strain was first found in January.

Two bird flu strains have been found in the United States this year. The H5N2 strain has been reported in Arkansas, Idaho, Iowa, Kansas, Kentucky, Minnesota, Missouri, Montana, North Dakota, Oregon, South Dakota, Washington and Wisconsin. It has also been identified on farms in Ontario, Canada.

The H5N8 strain has been identified in California and also in Idaho, according to the Agriculture Department.

More than 15 million commercial birds nationwide have died or are expected to be killed in the current outbreak.

(This version of the story adds the company's comment)

(Reporting by P.J. Huffstutter; Additional reporting by Tom Polansek and Julie Ingwersen; Editing by Toni Reinhold, Jonathan Oatis and Lisa Shumaker)