Source: Ted Taber
The floods in the Midwest have already killed four people. Thousands have been evacuated, and the bill for clean-up will surely run into the hundreds of millions (the Red Cross alone is spending $15 million) – the estimate for Cedar Rapids’ clean up just in: $700 million.
But these are the most cosmetic costs – the ripples from this storm will spread globally. Already, the price of corn has broken through the $7/bushel point. Soybeans are also up, and I’d be shocked if the price of white corn isn’t going through the roof too – it has already been kicking up the price of tortillas in Mexico. Certainly, the ethanol price is soaring to its highest point since June 2006.
Large agribusinesses are taking a hit here too. See, for instance, Archer Daniels Midland’s flatlining share price. The disaster in the Midwest has put a serious dent in their profit forecasts. There’s just less corn around for them to make money off through trading, reselling, and using in meat, ethanol and high fructose corn syrup manufacture.
Worse for them, the disaster-induced shortage is making it politically harder to support corn-based ethanol, which is making ADM’s business plans – a glorified way of saying ‘sucking at the government teat’ – a little less politically and therefore economically viable.
But not all agricultural capitalists are taking a beating. The hedge funds and commodities traders are having a ball. According to The Wall Street Journal, “the decline in the dollar and rise in crude prices is resulting in investors piling on in the corn market, buying futures in anticipation that the price will continue to rise.” Yep, it’s speculative open season.
Meanwhile, stories abound about the floods’ horrors. A recurring theme is that people who step into the floodwaters immediately seek tetanus shots. The water is utterly polluted.
I’ve not read it in any of the reports so far, but I’ll put money on some of this pollution coming from burst sewage reservoirs from Concentrated Animal Feed Lots. We saw it happen in North Carolina and there’s no reason to think that it hasn’t already in Iowa.
Citizens in Iowa have long been active in trying to Clean Up Iowa. They’ve been stymied by large agricultural interests. The University of Iowa is the place I’d go to find more information – they’ve a fine research unit looking at some aspects of CAFOs, but at the time of writing, the University site says:
“Due to the flood situation on campus, The University has suspended normal operations. Classes have been cancelled and UI employees designated as non-essential are asked to stay home beginning Friday, June 13 through Sunday, June 22.”
Watch this space for more…