May 24, 2011 | Jackie Roembke

The Floods of 2011

Major spring flooding disrupts grain flow, delays planting.

This season the Northern Plains faced major flooding of the Red River, disrupting grain flows and delaying planting. Then the rains hit the mid-South and the Eastern Corn Belt, swelling rivers and streams that soon pushed the Mississippi to levels not seen since the infamous flood of 1927. Numerous barge stations became forlorn, sandbagged islands as millions of cubic feet of water rushed past every second on the Lower Mississippi.

The 2011 floods will hit agriculture in several ways:

(1) The United States needed record corn acreage and yields to begin to rebuild depleted stocks. Now 1 to 3 million of those acres could be lost, whether through direct flooding or through farmers’ inability to plant rain-saturated acres from North Dakota to Arkansas. Losing 3 million corn acres could mean losing 400 million bushels of much-needed corn production this year, potentially cutting ending stocks for September 2012 dangerously low again.

(2) Barge traffic was slowed to a crawl on the Lower Mississippi to protect levees as well as to ensure the safety of the tows and their staffs, slowing receipts at the Gulf.

(3) The high waters will disrupt operations of countless barge stations; some will lose a couple of weeks of capacity; others may be out for months. This slows and disrupts the flow of vital inventories just as the U.S. is dangerously close to running corn inventories to near zero.

(4) Delayed corn planting has all but eliminated having early 2011 crop corn which was needed to meet processing, exporting and feed demand through September.

(5) Some of those barge stations in the mid-South and the lower river that took the brunt of the floods may be out of operation until after wheat season, sharply reducing the region’s ability to handle and move soft red wheat.

(6) Mid-South river elevators also were warehouses to some existing soft red wheat inventories, some of which may be water-damaged when businesses are finally able to assess the operations. The FDA has stringent restrictions on disposing of flood-damaged grain.

Export merchandisers say, however, that a lot of those river station bins are surprisingly “water-tight.” The ground is built up and then sandbagged, resulting in those “elevator islands” seen in flood photos this spring. Even if some water does get into and damage pits, conveyors and other equipment, the tanks themselves and any grain they hold may be intact once the waters recede.

In the best case, some stations will be unable to receive grain for a few weeks and barge movements may be slowed, with Gulf elevators and operations remaining largely unaffected. The result could be weaker basis for areas of the mid-South while the waters recede and firms clean up their operations.

The worst case could be millions of bushels of lost or flood damaged inventories, river stations that remain out for months, and a major disruption to logistics and supplies to the Gulf pipeline.Longer term, the loss of any acreage this year greatly increases the likelihood of this bull market and its volatility even stretching beyond 2012, again stressing the financial resources and the resilience of agribusinesses. ?

More Articles

Up-to-date Tools Key for Controlling Moisture

Up-to-date Tools Key for Controlling Moisture

August 26, 2015 | Departments |

From the time grain comes out of a farmer’s field to the point where it is shipped from an elevator, everyone is trying to achieve a delicate balance in moisture content.

Too wet, and grain can wind up spoiling, clogging or causing any other number of undesirable situations.

[Read More]
Weekly Outlook: A Review of USDA Crop Yield Forecasting Methodology

Weekly Outlook: A Review of USDA Crop Yield Forecasting Methodology

August 11, 2015 | Online Exclusive |

Even though a description of the NASS crop production forecast methodology is widely available, there always seems to be some misconceptions about how NASS makes corn and soybean yield forecasts. A brief overview of that methodology is repeated here. While this summary does not do full justice to the very comprehensive forecasting methodology, it is presented to assist in placing the upcoming yield forecasts in the proper perspective.

[Read More]