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Midwest farmland flooding boosts food prices
FORT MADISON, Iowa |
FORT MADISON, Iowa (Reuters) - The Mississippi River surged up through storm drains and flooded part of an eastern Iowa river town on Tuesday as the worst Midwest floods in 15 years ruined cropland and drove up world food prices.
"There is nowhere for the water to go, so it's flooding these areas," said Lee County official Steve Cirinna, pointing to pools forming amid historic red-brick houses in Fort Madison.
Volunteers and National Guard troops helped reinforce or raise levees on both sides of the river seeking to protect low-lying businesses, water supplies, and prime farmland planted with increasingly valuable crops.
Across the river from nearby Burlington, Iowa, a levee broke in Gulfport, Illinois, sending muddy waters cascading onto nearby farmland and a few homes. Although sandbagging was going on, no one was injured. Authorities closed the river bridge and road.
Corn and soybean prices closed near record highs after millions of acres of U.S. cropland were lost or damaged in the heart of the world's largest grain exporter. Cattle and hog futures prices also hit new highs, with soaring feed costs expected to prompt farmers to cull livestock numbers.
"We've faced some pressure this year, but there could be greater pressure next year on food inflation when protein prices start to increase," said Bill Lapp, a food industry consultant and former chief economist at Conagra Inc.
U.S. President George W. Bush promised aid to the stricken region, where farm and business losses are expected to be in the billions of dollars. Bush will visit Iowa on Thursday.
"I, unfortunately, have been to too many disasters as president," Bush said after a briefing on the flooding.
But Sen. Robert Byrd, a West Virginia Democrat, said little had been done to prevent flooding and Bush had learned nothing from Hurricane Katrina and other disasters.
"President Bush has asserted that investing in America's needs is somehow 'wasteful' and his budget, which does not add one thin dime for a boost in levee funding, reflects this sentiment," Byrd said.
Iowa Gov. Chet Culver said he welcomed word that the U.S. House of Representatives will include $2 billion for Midwest flood aid in a spending bill to be discussed this week.
"The damage will total in the billions of dollars," he said.
Meanwhile, hundreds of National Guard troops and volunteers joined in sandbagging efforts across the Midwest. In addition to Iowa and Illinois, flooding has struck Indiana, Kansas, Missouri, Minnesota and Wisconsin.
"We have quite a wall of water coming our way," said John Spring, mayor of Quincy, Illinois. "Flooding is all part of life along the river ... but this time we are better prepared for it."
The main cities along the affected stretch of river -- Quincy, and Keokuk and Burlington, Iowa -- perch on bluffs or hillsides. The cities' drinking water and some businesses remain at risk as receding flood waters in Iowa and elsewhere flow rapidly southward.
FINANCIAL LOSSES MOUNT
Comparisons have been made to the major 1993 Midwest floods that caused more than $20 billion in damage and 48 deaths. This month's inundation has caused a few deaths, with Iowa hardest hit. But the physical damage has yet to be totaled.
Corn prices at the Chicago Board of Trade soared above $8 a bushel for the first time on Monday and stayed near there on Tuesday amid fears midwestern farmers will not be able to grow anything on as many as 5 million acres.
The closing of the mid-Mississippi River to barge traffic is costing freight carriers $1 million or more per day.
"In 1993, there were months of delays," said Larry Daily, president of Alter Barge Line Inc in Bettendorf, Iowa. "This time, it's going to be shut down two weeks if we don't get any more rain -- longer if it rains again."
The Mississippi River is the main channel for grain flowing from farms in the Midwest to export terminals at the Gulf of Mexico. It carried 68 million tonnes of farm goods in 2006.
The problems add up to more food inflation for not just U.S. consumers, but also dozens of countries that buy U.S. grain. The United States exports 54 percent of the world's corn, 36 percent of its soybeans and 23 percent of its wheat.
The weather was cooperating, with only a slight chance of thunderstorms in southeastern Iowa on Wednesday.
(Additional reporting by Lisa Shumaker, Peter Bohan and Christine Stebbins in Chicago, and David Alexander in Washington; Writing by Andrew Stern, editing by Doina Chiacu )
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