Farm flooding could cause increase in food, fuel prices

With prices at the pump already topping $4 a gallon and the U.S. Department of Agriculture estimating grocery prices will rise more than 5 percent this year, the flooding of much of America’s farmland will be causing those prices to soar even higher.\nAccording to preliminary statistics from the USDA, about 9 percent of Indiana’s corn, soybean and wheat crops have been damaged, said Deb Abbott, assistant director for communications and outreach with the Indiana State Department of Agriculture, adding up to more than $800 million in damages to these crops alone.\nAnd that’s without taking into account a host of other major considerations: debris cleanup costs, damage to livestock and personal losses, not to mention many farmers still being unable to replant crops because of remaining high water.\nChris Hurt, a Purdue Extension agricultural economist, said the late replanting date has been one of the foremost problems the flooding has caused for crops. The deadline for planting corn is May 10, he said, and the deadline for planting soybeans is June 20.\n“Really after this week, people will be looking only at planting soybeans,” he said.\nBut due to problems the flooding caused to the land itself – including top soil erosion, gully formation and extensive debris washup – many farmers are still unable to get out to replant, Hurt said. He said because so many farmers will have to plant soybeans late, the yields on the crop in Indiana will only be about 65 to 70 percent of normal yields.\n“Just because it’s flooded doesn’t mean it’s a total loss,” he said. “If it dries, they can reseed, but again, they’ve lost a lot of the growing season.”\nThe livestock industry will suffer because of the decreased yield in soybeans.\n“The livestock industry is in a panic mode at this point,” Hurt said.\nThe flood did little damage to livestock directly, but soybean meal, in addition to corn and grain meal, are the foundation of the diet of most livestock. Because Indiana is such a major feed producer, Hurt said, the prices of livestock products from eggs and dairy to pork and beef will also rise.\nAbbott also included that debris has caused damage to Indiana’s livestock and that the Indiana State Board of Animal Health has been advising farmers about being particularly careful when dealing with their animals.\n“They are advising people to watch animals, keep them off of flooded areas,” Abbott said. “Flooded waters likely carried a lot of things animals don’t want to eat – chemicals ... petroleum, sewage.”\nBut the flooding could be causing even more trouble for Indiana’s burgeoning ethanol industry. While about 20 percent of the corn produced in Indiana becomes livestock-feed corn, Hurt said, even more than that goes to ethanol.\n“By the end of 2008, we would have a capacity to use 300 million bushels of corn in Indiana just for ethanol production,” Hurt said. “That’s a lot of fuel. That is roughly one-third of the corn production in Indiana headed to ethanol.”\nHurt said the impact at the pump will be minimal, as only about 7 percent of our gasoline is currently blended with ethanol. He estimated consumers will see an increase of about one to three cents per gallon of gas.\nHowever, the recent push for ethanol has also led to several ethanol plants in Indiana currently being built. But because of the flooding, they may not be able to open until next year when more corn is available. Or, he said, they may open but only run at about 85 percent capacity.\nHurt said the government’s main method of avoiding widespread economic damage from natural disasters like the flood has been to push farmers to buy crop insurance.\n“But it’s also tough when so many are hurting to not help some,” he said.\nIndiana Agriculture Director Andy Miller listed several options for farmers in a June 12 press conference with Gov. Mitch Daniels. He said the USDA would have emergency loans available, and farmers who are homeowners would be able to qualify for FEMA aid.\nThe ISDA has also released a guide titled “Indiana Disaster Assistance for Agriculture,” which lists the kind of aid available to Indiana farmers. Some of the options available are disaster unemployment assistance, grants from the Emergency Conservation Program and the Emergency Watershed Protection Program and programs to pay for installation of conservation practices.\nThe state government and Purdue University have also been working together to make advice available to farmers regarding technical assistance, such as the call-in forum hosted by Lt. Gov. Becky Skillman and several Purdue Extension specialists offering replanting advice. \n“There’s a very wide array of possibilities here, and I would hope there’s enough so that each farmer can pick up and move on,” Gov. Daniels said in the June 12 press conference. \nHowever, some farmers say the government’s assistance has been minimal. \nRex and Kim Bryant, who run Bryant Farm in Ellettsville, estimated they had about $10,000 damage to their crops and said the information they received from FEMA gave no provision for aid to farmers.\n“FEMA won’t help farmers and ranchers at all,” Kim Bryant said.\nBut countless private organizations and individuals are helping out. \nTo close his June 12 press conference, Gov. Daniels told the story of a woman named Millie in Loogootee, Ind., who had planted two sets of crops this year and lost them both.\n“After we’d gone through all of that I said, ‘Does anyone have any last questions?’ and she raised her hand and said, ‘What can we do to help other people? Where do we call to help somebody?’ And I just couldn’t resist telling you that because this is what I keep encountering,” Daniels said. “Here is somebody who has been hit as hard as anyone, and her concern is what she can do to help someone else.”\nAnd, Hurt said, the destruction of Indiana farmland won’t be all bad.\nFarmers in the northern part of the state who did not receive flood water damage are actually benefiting from the rising prices, and Indiana farmers who have an average to good crop could see record-high incomes this year.\n“One person’s loss gives somebody else a windfall,” he said.