BY DOUG SCHMITZ
Iowa Correspondent

WEST DES MOINES, Iowa — The Iowa Farm Bureau Federation (IFBF) has estimated millions of acres of farmland in the Missouri River Basin have already been affected by massive flooding and torrential rains, with cumulative cropland losses in the Dakotas and Ohio likely to have both immediate and long-term effects on food prices.

“While a 150,000-acre loss in Iowa would have a minimal impact in the big picture, the USDA just came out with a supply and demand report which estimates a loss of two million harvestable acres in the last month because of continued wet weather in the Dakotas and Ohio, plus flooding in the Mississippi river basin and floods in the Missouri River area,” said Dave Miller, IFBF director of research and commodity services.

“That is likely to frenzy the corn market and we may see the highest prices yet for corn,” said Dean Taylor, Iowa Corn Growers Assoc. president, who farms in Lucas County. “That means, on the short-term, we may see products such as cooking oil or corn tortillas rise in price; in the next six months to a year, we may see meat prices rise as livestock farmers reduce their herds in reaction to higher feed costs.”

According to Miller, about 100,000 acres of Iowa farmland will be impacted by the Missouri River’s rising floodwaters on May 25, with another 50,000 acres indirectly affected by backed-up water that’s slow to drain.

Eventually, the majority of the crops will be pollinating at the same time, which makes them especially vulnerable to Iowa’s changing weather patterns, Miller added.

“So much is hinging on the weather right now, and while Iowa farmers struggled to plant in a wet spring, 61 percent of them got their crops in the ground in a single week during a break in the weather; that’s good news,” he said.

But Miller said farmers who own land along the Missouri River bottom are likely to see average losses of about $1,000 per acre.

On June 23, 2008, Iowa crops were devastated by Mississippi River floodwaters and torrential rains. At that time, planting was delayed by record late-spring rainfall, and Iowa faced a $3 billion crop loss and an additional $500 million in livestock feed cost losses.

This year, Miller said, the threat to farmland is different because “it’s cumulative across two river basins and four key farming states.”

According to the USDA’s Acreage and Quarterly Grain Stocks reports released June 30, corn planted in 2011 is estimated at 92.3 million acres, up 5 percent from last year and the second-highest in the United States since 1944, based on data collected to June 17.

As the nation’s leading corn producer, Iowa corn planted for all purposes increased 6 percent from 2010 to 14.2 million acres; corn to be harvested for grain is forecast at 13.8 million acres, the reports said.

The national estimate is above the average trade estimate of 90.776 million acres and below March’s estimate of 92.178 million. The USDA stated growers expect to harvest 84.9 million acres for grain, up 4 percent from last year.  As a result, corn prices Thursday fell 30 cents (daily limit) lower, the Chicago Mercantile Exchange (CME) said.

As a result, Miller said the grain trade was definitely surprised by the USDA estimate for planted acreage.

“And, on the surface, one wonders how farmers could have possibly planted more than 92 million acres of corn this year with all the weather problems,” he said. “But the U.S. farmer is resilient and resourceful. Looking at the state numbers, it becomes clear that the acreage numbers could be reasonable.”
In turn, he said, the grain markets adjusted to this information very quickly. “Now that the ‘reference number’ has been set by the USDA for the 2011 crop year, the focus will now shift to weather during the pollination period and overall crop prospects.

“While a projected ending stocks under 700 million bushels might have supported prices near $8 per bushel, the prospects of ending stocks rebuilding to more than 1.2 billion bushels will probably have prices dropping under $6, with the potential for $5 corn not an unreasonable expectation,” Miller said.
But he said some may be skeptical whether the USDA has made sufficient adjustments for flooding along the Mississippi and Missouri rivers basins. “According to my calculations, the USDA estimates for acres harvested for grain include about 600,000 planted acres that have been abandoned due to either flooding or drought,” he said.

“These numbers for key states such as Iowa and Nebraska are near my estimates, but for the states of Missouri, Indiana and the Dakotas, there is likely to increase as the year progresses. Based on conditions as we know them now, the total number of non-harvested acres is not likely to exceed 800,000 acres when the final tallies are done.”