The eruption of Chile's Calbuco volcano threatens to cause widespread and lasting economic damage, turning cattle pastures barren and choking fish with volcanic ash in one of the world's top salmon-producing countries.

Cattle stand in a field covered with volcanic ash

Thousands of cattle and sheep in danger of dying have been evacuated in Los Lagos. The region produced about 950 million liters of milk last year worth about $346 million, said Ema Budinich of the National Agriculture Society.

"About 50 percent of Chile's milk production is located in Los Lagos, so this is affecting the whole industry," Budinich said Tuesday.

Emir Jadue of the Chamber of Commerce in the nearby city of Puerto Varas estimated the costs at about $600 million and a 50 percent drop in the region's hotel industry.

Dead fish lie in a tank at a salmon farm,
destroyed by volcanic mudflows from the Calbuco volcano

Official damage estimates are not available yet, but Eduardo Aguilera of the National Fishing Service says about 20 million fish have died.

Calbuco roared back to life Wednesday after lying dormant since 1972. It billowed ash about 11 miles (18 kilometers) high in the initial blast, then several hours later produced a second, spectacular outburst that turned the nighttime sky reddish orange and caused huge lightning bolts to crackle through its ash plume.

Some 4,500 people have been evacuated. But the Los Lagos agricultural service said more than 45,000 animals remain at risk from eating plants and drinking water contaminated by volcanic ash. Experts say the soil in the area may not recover for over a year.

The animals "are practically without food because the pasture ceased to exist. They're roaming on volcanic rock," said Rodrigo Lavin, head of a farming group in Llanquihue, a province of Los Lagos.

Plumes of smoke and ash billow from the Calbuco volcano

The mighty blasts left Ensenada, about 10 miles (16 kilometers) from Calbuco's peak, a ghost town, abandoned most of by its 1,500 residents. Military officials and some returned residents have been clearing the thick soot that covers the town.

"Our three horses, which had been missing since the eruption, finally came back yesterday gaunt and thirsty," said Daniel Patricio Gonzalez who left town with his wife and children.

"But many other people have had to sacrifice their sheep because packs of hungry wild dogs have been eating them," Gonzalez said. "The losses from this eruption are huge, but the animals are the ones who are suffering the most."