Heavy rains have triggered massive floods in the upper Midwest, causing
widespread damage in cities and towns in Iowa, Illinois and Missouri.
But the biggest impact of the flooding may be on world food prices
since the area struck produces most of the country's corn and soybeans.
VOA's Greg Flakus has more from Houston.
The flooding along
the Mississippi river and many of its tributaries is only the latest
manifestation of a problem vexing farmers in the region. The heavy
rains that produced the flooding began around a month ago, right at the
time when most farmers were planting. While rain is necessary for
crops to grow, too much rain can destroy crops. Both corn and soybean
plants die if left in water for two days.
Roger Elmore, an
agronomist at Iowa State University, speaking to VOA by telephone, says
there will be a profound impact on this year's crops.
both crops will be reduced significantly," he said. "Corn, I am
thinking, will have at least a 50 percent reduction in yield."
says many farmers will have the option of replanting if the flood
waters recede and are not replenished by more heavy rain. The high
prices will provide farmers with an incentive to plant rather than take
payments from crop failure insurance policies.
Elmore says corn
prices were already higher than normal before the floods, partly
because of demand for the grain by plants that use it to produce
ethanol, an alcohol that is used as a fuel additive in gasoline.
half of the corn normally goes into livestock feed; ethanol consumes
about 30 percent of the grain, the corn grain, and they are going to be
fighting for it because they have these huge facilities, and then the
food uses, about eight to 10 percent of the corn grain goes into food
[products]. All of those forces are going to be competing to buy corn,"
Roger Elmore says market speculators are driving up
prices based on the devastation they see in the Midwest fields. He
says corn, which went for around four dollars a bushel just a few years
ago has nearly doubled in price.
"Futures yesterday, I think,
went up to $7 [a bushel] for July futures on corn," said
Elmore. "Projections done by one of our economists here indicate it
will be up to $11 before this is all said and done."
says the floods and the use of corn to produce ethanol are only two of
the factors driving up corn prices. He says the weakness of the
dollar, high prices for fertilizer and, above all, higher energy prices
also play a big role. With oil selling for around $140 a barrel,
he says, farmers who depend on diesel fuel to run their tractors and
other machinery need to get a higher price for what they produce.