Wednesday, June 18, 2008

Food Prices Will Spike as Result of MidWest Floods

The Financial Times kind of states the obvious.
Consumers were warned to expect even sharper increases in global food prices after US officials said that some of the country’s best farmland was facing its worst flooding for 15 years.

Agriculture officials and traders said the damage could push up worldwide corn and soyabean prices, which have spiralled in recent days as floods have swamped crops in parts of Iowa, the US’s biggest corn-producing state.

The warning comes at a time when high food prices are already sparking protests across the developing world.

Corn futures in Chicago this week rose to record highs of more than $8 a bushel on fears that up to 5m acres of the crop could be lost, while soyabean prices hit a record of $15.93 a bushel.

Tom Jennings, acting director of the Illinois Department of Agriculture, said: “The price of corn and the price of beans could rise more. If we lose a lot of corn the prices will continue to go up.”
The floods will no doubt destroy parts of this year's crop.

However, it is important to note that the periodic flooding of teh Mississippi and Missouri River valleys and their tributaries is what made the midwest such fertile farming area in teh fist place. Sure, it provides little solace, but it is nature.

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