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Midwest Floods Shrink the Food Supply

Posted June 25, 2008 12:01 AM by SavvyExacta

The recent floods that devastated parts of the American Midwest will affect more than just the people who live there. In recent years, the price of corn used for food has risen due to increased demand for ethanol. Not only has the cost of food for human consumption gone up, so has the price of feed for animals. (Corn is used not only in grain for livestock, but also as an ingredient in pet food.) So how will the recent flooding affect the food supply?

Unfortunately, the impact is considerable. Millions of acres of farmland in Illinois and Iowa were damaged by the Mississippi River as it crested in recent weeks. Some 3-million acres of corn are estimated to have been lost, in addition to 2-million acres that weren't even planted. That's about 5-billion bushels, which have been selling at a high of $8.00 per-bushel recently.

High prices will affect more than just American consumers. Corn is exported to dozens of countries throughout the world, in addition to having many uses in the U.S. According to one source, the United States "exports 54% of the world's corn, 36% of soybeans, and 23% of wheat".

Today, residents of the Midwest are drying out their homes, repairing, and rebuilding. Meanwhile, the rest of the world must find a way to feed its animals. For most animals that aren't raised for food, it's easy enough to find alternatives. For example, horses can eat rice bran, alfalfa hay pellets, flax, and even black-oil sunflower seeds. Dog food is available that substitutes rice for corn.

But what about the animals we eat? Corn is a staple of a cow's diet. Alternatives such as alfalfa or grass hays - or even grass itself - aren't always available for livestock to eat. Traditionally, cattle are fed corn in order to fatten them more quickly. Now, since corn is less readily available, neither humans nor livestock will have as much of it to eat. The high price of corn will also cause the price or meat and dairy products to increase since livestock animals cost more to raise and maintain.

According to some farmers, the cost of "feeding a single hog has shot up $30 in the past year because of record-high prices". In addition, an estimated "65% to 75% of dairy farmers' production costs are for feed." Although some farmers are considering alternative feeds such as byproducts from flour or cereals, most fear they will be forced to cut back on the number of animals they produce - or drastically increase their own prices due to rising costs.

Resources:

http://www.thehorse.com/ViewArticle.aspx?ID=12116

http://www.boston.com/business/articles/2008/06/16/midwest_flooding_spurs_record_corn_price/

http://www.theday.com/re.aspx?re=3045a96b-fe5d-4a5f-be25-04869568f8b6

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#1

Re: Midwest Floods Shrink the Food Supply

06/26/2008 10:13 AM

Howdy, I too have a agriculture degree(AG. ED.). I enjoyed reading your blog, however, I think there was a mistake in your math on the 5 million bushels of corn either not planted or lost in the flood causing a reduction in the amount of corn available by 5 billion bushels. That would equate to an average yield per acre of 1000 bushels which even us farmers from Montana know is impossible. Corn may be a staple of the diet of cows and pigs in the Midwest but out here in a non-Corn Belt state we have found other grains to economically substitute for feeding hogs and cattle such as barley and wheat. Most of our cows will never taste corn in their lifetime and in reality their four stomachs don't really care. Thanks again for the update on the consequences of the unfortunate flooding in the Midwest.

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#2
In reply to #1

Re: Midwest Floods Shrink the Food Supply

06/26/2008 11:49 AM

Hi melj,


I got the numbers from the articles I referenced. They estimated that the number of acres lost could be higher due to some that were not even planted (a higher number that I didn't include in my blog), so the yield of lost corn could be the higher five number. My animals don't eat much corn, either!

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#3
In reply to #1

Re: Midwest Floods Shrink the Food Supply

06/30/2008 8:41 AM

Hi Guys

I was interested in the comments. I have been out of the grain industry for 20 years now, but when I hear that ethanol is driving up corn prices , I wonder. Is our federal government still paying farmers billions of dollars to let farm ground lay idle. I can recall not so long ago a story about a medium to large farmer( in our area) that received a check for nearly 200,000 dollars for set aside payment. My question is; If we can pay farmers to let ground lay idle, why not pay them to grow more corn?

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#4

Re: Midwest Floods Shrink the Food Supply

06/30/2008 11:29 PM

Midwest floods have always affected the food supply, depending on their severity. If there are no large floods next year the nutrients and topsoil deposited on the fields should provide bumper harvests. Of course then prices will drop below production costs and farmers will go broke from farming too well. Those who were flooded and have huge losses this year may have huge crops next year and still have losses. The only thing the general public can count on is ever-increasing prices.

There are other crops that can be used for ethanol production, such as sorghum of the variety used to make sorghum syrup. It can grow where corn doesn't do well. Why not use other crops, can't farmers grow anything but corn? That would free up some corn for animal feeds. Also there are millions of acres that are not farmed or the owner is being paid not to farm. Change that and there will be less of a problem.

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#5
In reply to #3

Re: Midwest Floods Shrink the Food Supply

07/01/2008 6:43 PM

You've apparently been out of the loop too long to remember the reason we let the ground lay idle. And the reason we pay (internally finance) the farmer (but should not pay the corporations) to let the ground lay is so "we" as a nation remain competitive in the world market. Yes this action does irritation the competition whom would do the same to us if they could.

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#6

Re: Midwest Floods Shrink the Food Supply

07/02/2008 4:45 PM

I am sure it will considering the severity.

There was a post about using grains for ethanol in stead of food-stock, here is an interesting article where it does both.

http://foodproductiondaily.com/news/ng.asp?id=85971

phoenix911

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