Crop Devastation Nears $3 Billion

Wallaces Farmer
Rod Swoboda rswoboda@farmprogress.com
June 23, 2008

Flood damage to Iowa crops is between $2.5 and $3 billion, according to an estimate made Friday by Iowa officials. "The devastation is unbelievable," says Craig Lang, president of the Iowa Farm Bureau.

Lang, along with Iowa Lt. Governor Patty Judge and nine other Iowa ag officials and leaders of commodity groups, took a four-hour helicopter tour Friday June 20. The ride gave them a bird's eye view of the agricultural damage caused by record flooding in the eastern half of the state.

The farm leaders flew from Des Moines to Mason City, Cedar Rapids and Burlington in an Iowa National Guard Black Hawk helicopter. It's the first step in assessing the damage suffered by Iowa farmers and agribusiness firms from the state's widespread floods. The losses include damage done by flooding of corn, soybean and hay crops and to pastures.

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Grassley: Too early to change biofuel policies

DesMoinesRegister.com
By PHILIP BRASHER • pbrasher@dmreg.com • June 17, 2008

Washington, D.C. — Sen. Charles Grassley says it’s too early in the year to consider rolling back biofuels incentives to soften the economic impact of high crop prices.

“You’re going to have this nervousness all through the summer, and you shouldn’t make any decisions like this until you know what the crop is at the end of the harvest season,” said the Iowa Republican.

Corn and soybean prices already were at historic highs before skyrocketing this month as flooding destroyed crops across Iowa and other Midwest states.

The first indication of the extent of the damage will come June 30, when the Agriculture Department releases its annual survey of what farmers have planted. USDA’s first survey-based forecast of the fall harvest will come in August.

Suspending tax credits for biofuels or temporarily waiving the ethanol usage mandate would discourage investment in the industry, he said.

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Midwest flooding adds to farmers' woes

Livestock owners under threat; five U.S. ethanol plants forced to shut

MSNBC News Services
updated 8:42 p.m. CT, Fri., June. 13, 2008

Flooding in the Midwest has damaged thousands of acres of cropland at a time when corn prices are already at record highs and Americans are stretching their grocery budgets.

Storms this week have inundated fields in Indiana, Illinois, Iowa, Wisconsin and other states where much of the world’s food is grown. The flooding also threatens livestock owners, who depend on the grain to feed their herds, and has forced the closures of five ethanol plants.

The flooding comes after a wet, damp spring that brought planting delays — which often translate into lower yields — and has pushed corn prices to a record near $8 per bushel, nearly double last year’s price.

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US Govt's Options In Potential Corn Crisis Limited

CattleNetwork.com
6/16/2008 5:59:00 PM

WASHINGTON (Dow Jones)--Concerns are mounting quickly that a sharp drop in U.S. corn production this year could create far tighter supplies than expected, and the government has few options in averting a potential crisis pitting the ethanol industry against livestock producers in a bidding war that would further drive up corn prices.

Extremely wet weather and flooding in the Midwest is taking a sharp toll on corn production, although the full extent of the damage is still unknown as many farmers wait to see if conditions will dry up enough in time to plant.

Just last week, the U.S. Department of Agriculture lowered its 2008 corn production forecast to 11.7 billion bushels, roughly 3% less than the May forecast. The new 2008 estimate is about 10% below what farmers harvested last year, when acreage was significantly larger.

Government intervention seems likely, according to a report this week by Citi Investment Research, but that may have to come from Congress because Bush administration officials, unlike the the food manufacturing and livestock industries, don't yet seem worried.

Asked if there was anything the USDA could do if corn production estimates continued to fall, Deputy Secretary Chuck Conner suggested there was, but wouldn't comment on details. "I'm not going to speculate on our other options because of market sensitivity," Conner told Dow Jones Newswires.

"It's way too early to begin getting out there bouncing options off the wall, hitting the panic button." If the USDA does decide it needs to act, though, officials there are going to have to get "creative," Agriculture Secretary Ed Schafer told Dow Jones Newswires.

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Further spike in food costs expected because of Iowa floods

Lost crops could cause a dramatic increase
By Tim Jones
Chicago Tribune correspondent
2:47 PM CDT, June 15, 2008

Get ready for food prices to shoot up again.

Even though disaster assistance workers will have to wait for high water to subside across millions of acres in Iowa before assessing the damage from the state's worst flooding in more than half a century, the numbers linked to lost crops are already coming in, creating their own floodlike pressure on food price inflation.

The bushel price of September corn, which already had reached record levels, jumped another 11 percent last week, fueled in part by news that 10 percent of Iowa's corn crop—about 1.3 million acres—has been lost to flooding or the inability to plant because of poor weather. Soybean losses, according to the Iowa Farm Bureau, are about 20 percent, or about 2 million acres.

It's too soon to say what the price impact will be, according to analysts, but dramatic production cuts in two key commodities increase the likelihood that consumers will be paying more for milk, meat, bread and poultry. Perhaps a lot more.

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