CHICAGO (Reuters) - Michigan will offer dairy operations with bird flu up to $28,000 to work with federal and state government agencies to investigate how the virus got onto their operations, Michigan Department of Agriculture and Rural Development Director Tim Boring said on Tuesday.

Federal and state officials are researching several aspects of how bird flu spreads, including the possibility of respiratory spread among animals and prior infection of farm workers, in an attempt to curb further infection among animals and humans.

The virus has been reported in 102 dairy herds across 12 states since late March, according to the U.S. Department of Agriculture. Three dairy farm workers have also contracted the virus.

Michigan's agriculture department will provide the grant money to up to 20 farms from its emergency response funds, Boring said. The goal is to help with losses associated with sick animals and to cover the costs of farmers and their staff working with scientists, he added.

"There are some real-time economic struggles these farms are facing," Boring said.

The funded farmers would need to work with the state agriculture department and USDA's Animal and Plant Health Inspection Service's Veterinary Services (APHIS) to complete epidemiological investigations on their farms.

They would also need to participate in other dairy herd studies related to the outbreak and bird flu research efforts by the state's Department of Health and Human Services, if applicable, the state agency said in a statement.

Boring said the state has seen strong participation in testing from farmers with herd infections.

The USDA in May said it would provide financial support for farmers who test their milk and cattle for the virus. In a press briefing on June 13, federal officials said 11 farms had signed up for elements of the federal support program.

(Reporting By P.J. Huffstutter in Chicago and Leah Douglas in Washington; Editing by Bill Berkrot)

By P.J. Huffstutter and Leah Douglas