Corn-belt floods sweep aside ethanol hubris

emersonbiggins

Cid_Yama

As floods of near-Biblical proportions inundate Iowa, the prophets of ethanol are retreating to high ground.

The floods are a double-whammy for fans of biofuels. Farmers were already late getting their crops into the ground, which means corn prices were already approaching record-high levels, a problem akin to those that high crude-oil prices pose for refiners.
But the cruelest part of the story is how it blows a huge hole in one of the industry's most cherished arguments: Security of supply.

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The values of ethanol producers hemorrhaged Thursday as the price of their key feedstock, corn, climbed to record levels because U.S. floods have devasted this year's crop.

Corn prices Wednesday jumped to above $7 a bushel for the first time -- the fifth straight day the commodity reached record prices. The jump stemmed from heavy rains in Midwestern states, including Iowa, Indiana and Wisconsin, that have flooded fields and forced some farmers to either stop planting or switch crops.

"In the last 10 days the world has changed in the corn market with massive flooding causing irreparable damage to this year's crop and pushing corn prices up $1 over this time frame," Citi Investment Research analyst David C. Driscoll wrote in a client note.

"As a result of this unprecedented weather event which has happened only twice in the last 25 years, ethanol margins have plummeted over the same ten day time span with small and mid size ethanol producers now running at substantial losses against cash costs."

He expects such small and mid-sized producers to halt operations.

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Floods Likely Caused Significant Crop Losses

After touring flood-ravaged communities in Iowa, Gov. Chet Culver said the floods this year will be larger in scope than the widespread flooding the state suffered in the summer of 1993.

A total of 54 of the state's 99 counties are on a state disaster list, making them eligible for assistance. Monona County was added after a tornado touched down Wednesday night.

"This is, again, unprecedented in terms of its power and destruction and scope," Culver told reporters at a briefing Wednesday night.

Nine rivers across the state are at or close to record levels.

Officials are preparing for what could be a "500-year flood" in Cedar Rapids and have ordered evacuations in parts of the city as well as parts of Cedar Falls, Waterloo, and all of New Hartford. Nine shelters have opened to help those displaced.

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"We are seeing a historic hydrological event taking place with unprecedented river levels occurring," Brian Pierce, a meteorologist with the National Weather Service in Davenport, was quoted by the Associated Press news agency as saying.

"We're in uncharted territory - this is an event beyond what anybody could even imagine."

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The National Weather Service office in St. Louis says major flooding appears likely along the Mississippi River north of the city, probably ranking in the top two or three floods of all time here.

Dave Koch, a spokesman for the Cedar Rapids fire department, said the river will crest Friday at about 31.8 feet.

It was at 30.9 feet early in the morning. In the 1993 flood, considered the worst flood in recent history, it was at 19.27 feet.

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Downstream Mississippi River towns have got to be freakin'
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In a time of universal deceit, telling the truth is a revolutionary act. - George Orwell

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frankthetank

This is bad. I wouldn't be surprised if Bush steps in and tells them all to shut down. Wait until you see the price of meat this coming fall/winter.
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Cid_Yama

Quick! Divert that water into the aquifers. Why don't we have a plan for that?
_________________
In a time of universal deceit, telling the truth is a revolutionary act. - George Orwell

It riles them to believe that you perceive the webs they weave. - Moody Blues

frankthetank

Cid-

I've thought about that for a long time. IF only there was a way to divert spring time Mississippi runoff WEST to the OK/KS/NE/CO area. We could irrigate millions of acres with all that water. Also would cut down on the dead zone in the Gulf of Mexico.
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emersonbiggins

Off-topic AGW posts moved to Global Warming discussion thread
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"It's called the American Dream because you'd have to be asleep to believe it."

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joelcolorado · Intermediate Crude Joined: May 25, 2008 Posts: 683

Unbelievable amount of DRYLAND corn planted last year and this year in western kansas and colorado. Corn cannot be grown there year after year but several good years have caused ethanol plants to be built on the assumption it will always be there.

One farmer said if you plant corn, it will DRAW water from the clouds. I think that was part of manifest destiny back when this land was homesteaded when they told ppl that rain follows the plow because man is meant to subue the earth so God will respond to your hard work.

Homesteader

joelcolorado · Intermediate Crude Joined: May 25, 2008 Posts: 683

The problem is that its all uphill to the plains states. How would you transport THAT amount of water. Good lord.

Cid_Yama

Midwest floods disrupt food-supply chain

Flooding in the Midwest has swelled rivers and submerged roads and rails, halting or delaying shipments of food, fuel and other goods. Manufacturers also have been forced to suspend production of everything from oatmeal to pork products.

The high water also could reduce corn supplies and drive food prices higher at a time when Americans are already stretching their grocery budgets.

At the earliest, barge, road and rail traffic will get back to normal next week. But companies are focused on getting through this weekend, when at least one river is expected to crest at nearly 32 feet, making it possible that the transportation snags could drag on.

Union Pacific Corp., the nation's biggest freight railroad, has six mainline tracks out of service that carry freight through Iowa. Burlington Northern Santa Fe Corp. is experiencing delays along its key routes along the Mississippi River -- from Fort Madison, Iowa, to Memphis, Tenn.

A bridge over the Cedar River has collapsed, and another owned by Union Pacific is being monitored for possible washout. Several more are underwater. The shutdowns are expected to last about a week, but further delays are possible.

As shipments are delayed across the country, the floods also have caused shutdowns at several food processing plants in Iowa, including a Quaker Oats facility in Cedar Rapids and two Tyson Foods Inc. pork facilities.

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_________________
In a time of universal deceit, telling the truth is a revolutionary act. - George Orwell

It riles them to believe that you perceive the webs they weave. - Moody Blues

frankthetank

Homesteader-

Let OK/KS/CO worry about it! No but really, i'm just saying that it would go to more use then just killing the ocean.

We cover fields around here in human poop. Pollution is everywhere the way it is.

The solution to pollution is dilution.
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Clothing should be optional.

TheDude

Homesteader

Cid_Yama

Is Atlanta downhill? Heard they could use some water down there.
_________________
In a time of universal deceit, telling the truth is a revolutionary act. - George Orwell

It riles them to believe that you perceive the webs they weave. - Moody Blues

joelcolorado · Intermediate Crude Joined: May 25, 2008 Posts: 683

Maybe that high water will flush out the gulf coast and help create the wetlands they have lost? Takes high water for that to occur.
But ppl downstream will most likely be flooded.

Lets see, you build in a flood plain and it floods. Hm.....I just dont understand. Will you feel sorry for me and help me to rebuild in the same spot? Please? I deserve to live there. My grandparents lived there etc.

What part of stupid is this anyway? I never have understood.
Like new orleans, when it was started, the general to Pres Jackson said its the worst place to build a city. Still below sea level and WE are paying to rebuild it for what reason? It wil happen again and again and again. DUMB.