Flood damage to Iowa crops is between $2.5 and $3 billion, according to an estimate made Friday by Iowa officials. "The devastation is unbelievable," says Craig Lang, president of the Iowa Farm Bureau.

Lang, along with Iowa Lt. Governor Patty Judge and nine other Iowa ag officials and leaders of commodity groups, took a four-hour helicopter tour Friday June 20. The ride gave them a bird's eye view of the agricultural damage caused by record flooding in the eastern half of the state.

The farm leaders flew from Des Moines to Mason City, Cedar Rapids and Burlington in an Iowa National Guard Black Hawk helicopter. It's the first step in assessing the damage suffered by Iowa farmers and agribusiness firms from the state's widespread floods. The losses include damage done by flooding of corn, soybean and hay crops and to pastures.

Livestock will cut production

Last year the Iowa corn crop was worth $9.5 billion. The state's soybean crop was worth $4.8 billion, according to USDA. This year's loss estimate made on June 20 doesn't include production that will come from replanted crops or future losses of crops that have been planted.

In addition to the crop losses, Iowa livestock producers will have to pay an additional $500 million in higher feed costs because of increased prices for corn and soybeans. The higher costs mean livestock producers will have to cut production. "Unfortunately, this will result in increased prices for pork, beef and milk for consumers at grocery stores in six months to a year from now," says Lang.

Crop losses drive up food prices

Gov. Chet Culver says the damage assessment from Friday's flyover will allow the state's ag leaders to more effectively lobby lawmakers in Washington, D.C., for federal assistance. "We'll have a coordinated message to take to Washington regarding how bad the flooding has affected Iowa's livestock and crops," he says.

Culver points out that the damage to Iowa's crops is aggravated by the damage to the state's roads, bridges and barge traffic. "You can see the domino effect on our state's economy," he adds. "There's been a lot of damage and devastation."

Flooding has affected an estimated 1,500 miles of roads and 400 miles of railroad tracks. Flooding on the Mississippi River has halted barge traffic for weeks, interrupting shipments of Iowa corn, soybeans and other products.

High corn prices hurting ethanol

Iowa's ethanol industry is being squeezed by high corn prices that are partly caused by the estimated 3.3 million acres of the state's corn and soybean crops that have been destroyed by floods. Grain prices have shot to over $7 a bushel and soybean prices to $15 a bushel.

"These kinds of prices are not profitable to produce ethanol at the current ethanol price," says Bill Northey, Iowa Secretary of Agriculture. "There will be decisions made by ethanol producers of whether they want to keep processing or not at these prices."

Iowa's estimated crop loss of around $3 billion is based on USDA estimates that 10% of Iowa's corn and 20% of Iowa's soybean acres were not planted or were washed out by flooding that has affected three-quarters of the state.

Crop damage has far-reaching effect

Farmers can replant and still be covered by crop insurance, but coverage levels drop with each passing day, and late-planted crops face an increased threat of frost in the fall. The flooding damaged some livestock facilities, but the bigger problem for producers is the high cost of feed.

Several ethanol plants are temporarily shut down because of the flooding, notes Northey. While some fields are being replanted to corn and more of them to soybeans, yields will not likely be as good due to the late planting date.

High corn prices, now at more than $7 a bushel, will eat up ethanol profits, but the renewable fuel made from corn remains vitally important to Iowa's economy, maintains Northey. "Some people want Congress to take steps to discourage production of ethanol from grain. But I don't think that would be a wise move. Do we want to go back to the times in the 1980s where we had piles of corn building everywhere and we were dependent upon the government to buy $1.80 corn? I don't think anyone wants to go back there."