Flood’s Potential Impact on Agriculture in 2008

Flood’s Potential Impact on Agriculture in 2008

            Rarely cool, wet spring weather followed by extensive June flooding across much of the Corn Belt has cast substantial uncertainty over 2008 United States corn and soybean production prospects. As much as five million acres of crop production may be either lost entirely or subject to important yield reductions. Assessments of crop damage vary broadly, and could alter based on the extent of plant recovery or replanting. The likely effects, nevertheless, cannot be evaluated until August 12, when USDA research data becomes accessible. Considerable damage also was encountered by agricultural processing facilities, grain elevators, livestock operations, and storage facilities, and transportation infrastructure.

            In light of new record high market prices for corn and soybeans, and the attitude for very tight supplies by late summer, product market prices are likely to remain unstable through the remainder of the production season. If flood-associated crop losses eventually prove adequately large (to be decided at harvest time), they will likely participate to higher product prices, thus adding to pressure on policymakers over concerns about customer food price increase, global food aid accessibility, and the reliability of strategy that dedicates commercial agricultural crops to bio-fuels production, especially corn used for ethanol.

            The US performs a critical role in international markets for both feed grains and oilseeds. The US is the world’s top producer and exporter of both corn and soybeans. In 2007 the US had 43% percent and 63% percent shares, respectively, of world corn production and trade, and 32% percent and 42% percent shares of world soybean production and trade (Mutel, 2010). As a consequence of this leading role, unanticipated changes in United States production for either corn or soybeans, such as those stemming from the Midwest floods of 2008, can have a major effect on both United States and international commodity markets.

            During the first half of 2008, Unites States and world agricultural markets for most grains and oilseeds experienced tight supplies and record high prices. “The high prices provided a tantalizing incentive for U.S. farmers as they ready to plant their crops this last spring” (Rosenberg, 2009). In comparison, the dramatic, unpredictably sharp price raises of the past year have increased costs for livestock feeders and agricultural processors, evoked great concern about customer food-price increase and global food aid accessibility, and sparked an international debate referred to as the “food versus fuel” debate about the raising strategy trend of dedicating commercial agricultural crops to bio-fuels production, especially corn used for ethanol.

            Flood crop land concerns had been discussed on higher level in both floods. In the 2005 floods, 10 million acres land had been affected by the flood (Mutel, 2010). However, the lost land had been anticipated to produce six percent of the harvest in the region for that year. The crop losses that had been estimated were 8 billion dollars. Those states that had faced the huge loss were Minnesota 12%, Missouri 11%, Iowa 8% and South Dakota 7%. However, in this Iowa has faced 3 to 4 million acres of corn and 3 million acres of soybean losses. The United States’ Farm Bureau provided that crop losses have been reached to 9 billion dollars for the whole region, with 5 billion dollars of the total loss in Iowa.  In short, the 2008 flood may seem to be milder in its overall monetary effect on the larger area and the country, but it is just as devastating for those who have suffered it as it was for those in previous flooding. The eventual expenses and effects can only be known over time as damages become known, as the extent of relief is decided and as households, businesses and towns determine how to respond to the disruption.

References

Sene, Kevin. (2008). Flood Warning, Forecasting and Emergency Response, 1^st Edition. New        York: Springer, pp. 15-21.

Mutel, Cornelia F. (2010). A Watershed Year: Anatomy of the Iowa Floods of 2008. Iowa: University Of Iowa Press, pp. 23-25.

Rosenberg, Janice. (2009). “Dealing with disaster: IREM Members survive the Midwest Floods     of 2008.” An article from Journal of Property Management. Institute of Real Estate   Management, pp. 55-67.