Monday, June 16, 2008

Spared Western Iowa Positioned To Benefit From Flood-Buoyed Commodity Prices

With floodwaters ravaging much of Iowa's farmland, and other grain-producing areas of the world facing their own problems, swaths of western Iowa that have been largely spared Mother Nature's wrath stand poised to reap unprecedented rewards from corn and soybean prices that may hit once-unthinkable heights.

"There could be some phenomenal results," said David Leiting, general manager of the FAC Farmers Cooperative Elevator in Arcadia -- located between Carroll and Denison.

"The fact is that's really true," added Dennis Molitor, director of the Carroll County Office of the Iowa State University Extension Service. "The exceptions are those by rivers or streams. Overall and in general we (west-central Iowa) are really fortunate."

While counties in western Iowa have been listed in Gov. Chet Culver's disaster-designation, "we bypassed the bullet," for corn and soybeans, Leiting said of a large area of west-central Iowa.

Leiting said that some late-planted crops were affected by heavy rains and some flooding as well as soil erosion. But this part of the state is not nearly as soaked as eastern Iowa, meaning that as grain prices climb, some western Iowa farmers could be in for boom times, or a "windfall" as Molitor puts it, -- albeit at the expense of livestock producers and geographically unfortunate farmers.

Here is the Associated Press:

Corn prices have shot up 11 percent in the last week as floodwaters continue to ravage the Midwest, swallowing corn fields just before the crucial growing season. The U.S. government will report June 30 on how many acres have been lost to flooding, but a survey in Farm Futures magazine estimated that flooding could claim 3.3 million acres — or nearly 4 percent of the expected crop.

Just take normal yields in west-central Iowa times the higher grain prices and one sees a 2008 season with some distinct winners benefiting from top prices and losers who, as one Farm Bureau official predicted, literally being flooded off the farm.

Both Leiting and Molitor make the obvious point: the crop season is still young, and potential problems loom, such a double-whammy of hot-and-dry drought conditions following the soaking spring.

"Farmers would be quick to point out the season is far from over," Molitor said. "There is a lot of uncertainty."

But with some predictions of corn prices reaching $9 a bushel, and losses from the flooding hitting $1 billion in Iowa agriculture, those who missed the bullet will be well-positioned.

"That tend to be the way things happen in agriculture with a big weather event like this is that someone's misfortune turns out out to be someone else's great opportunity," said State Rep. Rod Roberts, R-Carroll.

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