The flooding alongthe Mississippi river and many of its tributaries is only the latestmanifestation of a problem vexing farmers in the region. The heavyrains that produced the flooding began around a month ago, right at thetime when most farmers were planting. While rain is necessary forcrops to grow, too much rain can destroy crops. Both corn and soybeanplants die if left in water for two days.
Roger Elmore, anagronomist at Iowa State University, speaking to VOA by telephone, saysthere will be a profound impact on this year's crops.
"Yields onboth crops will be reduced significantly," he said. "Corn, I amthinking, will have at least a 50 percent reduction in yield."
Hesays many farmers will have the option of replanting if the floodwaters recede and are not replenished by more heavy rain. The highprices will provide farmers with an incentive to plant rather than takepayments from crop failure insurance policies.
Elmore says cornprices were already higher than normal before the floods, partlybecause of demand for the grain by plants that use it to produceethanol, an alcohol that is used as a fuel additive in gasoline.
"Overhalf of the corn normally goes into livestock feed; ethanol consumesabout 30 percent of the grain, the corn grain, and they are going to befighting for it because they have these huge facilities, and then thefood 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,"he said.
Roger Elmore says market speculators are driving upprices based on the devastation they see in the Midwest fields. Hesays corn, which went for around four dollars a bushel just a few yearsago has nearly doubled in price.
"Futures yesterday, I think,went up to $7 [a bushel] for July futures on corn," saidElmore. "Projections done by one of our economists here indicate itwill be up to $11 before this is all said and done."
Elmoresays the floods and the use of corn to produce ethanol are only two ofthe factors driving up corn prices. He says the weakness of thedollar, high prices for fertilizer and, above all, higher energy pricesalso play a big role. With oil selling for around $140 a barrel,he says, farmers who depend on diesel fuel to run their tractors andother machinery need to get a higher price for what they produce.