The Best Farmland in the U.S. Is Flooded; Most Americans Unconcerned

I just was made aware of the extent of farmland flooding during a recent auto trip I made from northern Michigan into the Heartland between the Illinois River to the Mississippi where the average farm size was in the thousands of acres. Much of that land was either unplowed and not planted since last year because of standing water, where in even the worst of times the water table was less than four feet. Places where even in the driest of time entire residential developments sank into the water tables below. The land with its rich black soil has little other use than farming. Land so rich that the farmland is contracted to major producers such as Green Giant who pay the farm owners without regard to climate conditions. It's a win-win for the farmers who rake in their millions come hell or high water.

While the food supply situation has skated along a knife edge so far this year, with higher prices and many countries experiencing food riots, widespread famine did not take hold. In an incredible move, the Japanese quietly eased rice shortages by releasing portions of their imported rice stockpiles—from giant warehouses in Tokyo—into the system; a welcome but one off blip in the big picture. What happens next time?

Now, this growing season, when yields need to be at record levels to avert disaster, what do we find? Floods or droughts in several of the breadbaskets of the world.

Whatever your plans are, I hope that you’re ready to execute them (or, better yet, are executing them). I’m pretty sure that most people have done nothing, and I don’t know why this continues to amaze me.

How can so many people, even those who should know better, be content to hit the wall without doing anything at all to change course?

The food situation is far off the radar screens of Joe Average. It only becomes a problem after it’s too late to do anything substantive to ameliorate conditions. We’ve already seen food riots, armed escorts for grain deliveries, rationing, sharply higher prices. And still, I’m mostly noticing yawns and drugged gurgles from the herd. Meanwhile, the die is all but cast on this year’s lower crop yields.

Via: Financial Times:

Consumers were warned to expect even sharper increases in global food prices after US officials said that some of the country’s best farmland was facing its worst flooding for 15 years.

Agriculture officials and traders said the damage could push up worldwide corn and soybean prices, which have spiralled in recent days as floods have swamped crops in parts of Iowa, the US’s biggest corn-producing state.

The warning comes at a time when high food prices are already sparking protests across the developing world.

Corn futures in Chicago this week rose to record highs of more than $8 a bushel on fears that up to 5m acres of the crop could be lost, while soybean prices hit a record of $15.93 a bushel.

Tom Jennings, acting director of the Illinois Department of Agriculture, said: “The price of corn and the price of beans could rise more. If we lose a lot of corn the prices will continue to go up.”

The increase in the cost of corn and soybeans – the two main feed crops for farm animals such as cows and chickens – increased the price of live cattle yesterday for the second day in a row, to the highest level in 22 years.

Mr Jennings said that the impact of the heavy rains was “dramatic”.

“According to the emergency reports I’m getting, we’re above what happened in 1993 but we’ll have to see how that tapers off as [the rain water] comes down the river,” he told the Financial Times.

The Mississippi River broke through its levee system in 1993, destroying about 1m acres of crops and causing $20bn of damage.

Lewis Hagedorn, of JPMorgan in Chicago, said that the losses were significant.

“The risk of still-higher agricultural prices remains decisively distributed to the upside amid the fundamental need to ration demand in light of smaller supply,” he said.

Greg Wagner, at Ag Resource in Chicago, added that corn prices could take a pause to assess the weather impact. However, he warned: “Additional price gains are likely as the market is prone to overshoot.”

After weeks of heavy rains and low temperatures, the US Department of Agriculture said that only 57 per cent of the country’s corn crop is in good or excellent condition, considerably less than the 70 per cent registered this time last year.

Local farmers in Illinois said that the bad weather had delayed planting by up to five weeks, which would result in a much reduced crop of corn and soybeans. Some farmers expected their corn production to be down by as much as 50 per cent from last year’s level.

Agriculture traders described the problem graphically, saying that corn plants in Iowa or Illinois should now be reaching almost waist height, but due to the impact of the heavy rains and low temperatures were below knee-height.

They added that expensive nitrogen fertilizer – critical for the plants’ development – has now been washed out from the fields by the rains. For that reason, some farmers are likely to leave their land fallow and, instead, cash in their crop insurance policies, further reducing supply.

All these good old boys will have to use all that anhydrous ammonia to make meth for the city folk.