Corn Belt floods destroy feed crops

Ethanol production competing with livestock for the nation's corn crop was already a serious problem, before the Mississippi River left its banks across Iowa and points southward.

Now, there will be major shortages of corn and soybeans, from flooded fields that will not have a crop this year. There are estimates of 3 million acres that won't produce in Iowa alone. This will drive already over-the-top corn and grain prices further through the roof.

This, in turn, will make food to consumers more costly. Meat will cost more, things like cereal and baked goods that use grain and corn sweetners, will be much more expensive. Food prices were already rising, especially due to high oil prices driving transportation costs to get food to the supermarkets up substantially. Now the crop shortage will make what was already a serious problem a calamity.

Ethanol producers were already facing a tough financial picture, with their main ingredient--corn--so high priced. It will be much higher priced now, and in very short supply. Many of the new ethanol plants are highly leveraged, and could face financial ruin. Giants like Archer Midland, will probably sweep through the nation's Corn Belt and buy up little ethanol plants for pennies on the dollar.

As the nation's largest corn refiner, Archer Midland stands to lose money too. The difference is, they can afford it.