Agricultural and Food Policy
 Agri Outlook Radio
Number 182
Outlook: Flooding and wet fields devastating for many Midwest and Arkansas farms (7:09 minutes)
Audio/Video Script:
Robert Coats, Ph.D.
Extension Economist and Professor
University of Arkansas, Division of Agriculture
Flooding and wet fields have had a devastating economic effect on many
Midwest and Arkansas farms. Delayed planting for most grain producers in these
areas is the norm for the 2008 spring planting season.
In the Midwest, especially Iowa, the term 500-year flood is getting a lot of
play while in Arkansas the term 100-year flood was used. A 500-year flood can
happen in back to back years or several times over a ten year period. What the
term means is the flood event has 1 in 500 or a 0.2% chance of happening in any
given year, while a 100-year flood has a 1 in 100 or a 1% chance of happening.
With global energy and food commodity prices already at record highs, the
question being asked will the current flooding and wet soils have an additional
impact on food commodity prices. Even without this catastrophic U.S. spring
weather event, my expectation had been row crop fundamentals would support the
row crop price trending up for a while longer.
The flooding and wet soils have raised questions about the final 2008
harvested acreage and yield potential, especially for commodities corn and
soybeans, so without question this is at the very least short term bullish.
Remember it has been well over a decade since a major global weather event has
impacted global production, so those who follow the global grain markets tend to
keep an eye on the horizon in anticipation of the next major catastrophic global
weather event forming that could impact global grain production.
In the Midwest there is presently much discussion about crop losses in the
billions, but it is difficult to assess the full extent of the weather trauma to
grain production or property damage. USDA is aggressively engaged in assessing
the situation and reacting to the needs.
USDA’s June 30th Acreage Report will include additional survey data
collected in an effort to gain a more complete understanding of this year’s
weather events impact on food grain production from flooding and wet soils.
USDA’s June 22nd Crop Progress report shows Iowa farmers with 95% of their
soybean acreage planted compared to a 2003-2007 average of 100%, with emergence
at 85% compared to the 2003-07 average of 99%.
USDA’s June 22nd Crop Progress report shows Iowa corn farmers with excellent
crop conditions for 2008 of 9% compared to 2007 of 21%; good crop conditions of
41% for 2008 compared to 57% for 2007; fair crop conditions of 35% for 2008
compared to 18% for 2007; poor crop conditions of 11% for 2008 compared to 3%
for 2007; and very poor crop conditions of 4% for 2008 compared to 1% for 2007.
Arkansas’ National Agricultural Statistics Service for the week ending June
22 makes the following points in their Crop Progress and Condition report:
- Dry conditions allowed Arkansas winter wheat
producers to reach 85 percent harvested, making winter wheat harvested
acreage above the 5-year average for the first time this season.
- Dry conditions caused some Arkansas farmers
to irrigate row crops to maintain crop growth potential.
- Corn silking at 39 percent was behind the
5-year average of 69 percent.
- Cotton squaring made a considerable jump of
30 percent over the previous week, to reach 56 percent, but below the
five year average of 70 percent.
- Sorghum headed, at 3 percent, was 9 percent
behind the 5-year average.
- Arkansas soybean farmers had 84 percent of
the crop planted and were 2 weeks behind the 5-year average. Soybean
emergence at 72 percent was 2 weeks behind the 5-year average
Flooding and wet soils have Arkansas producers behind their 5-year average
crop progress. An optimist would say, timely rains would do wonders for helping
Arkansas row crop producers overcome 2008 adverse weather conditions to date; a
pessimist might say, normal to below normal growing conditions especially below
normal rainfall could be devastating for the late planted row crops.
In a world where the trend in U.S. and international farm policy is for
farmers to produce for the global marketplace and rely less on government
support, we should expect increasing price volatility.
The risk and uncertainty, the inflationary global economic setting, and our
row crops producers’ cost of production increase for 2008 costs a good 100%
above 2002. Coupled with other factors like continued strong global demand for
food commodities, continued inadequate global grain stocks, dollar devaluation,
global food protectionism and my expectation is that global row crop commodity
prices have yet to reach an intermediate term top.
This has been Robert Coats Extension Economist University of Arkansas
Division of Agriculture.
USDA
Midwest Flood Response and Recovery Assistance and Resources
USGS Flooding in the Midwest, June 2008
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