City Room™ - Business - Farmers Assess Losses from Mississippi Flooding

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Farmers Assess Losses from Mississippi Flooding
Produced by Adriene Hill on Friday, June 27, 2008

Farmer Daryl Deusterhaus looks out on his land, which has been inundated by floodwaters.

Flooding continues along the Mississippi River. Thousands of acres of farmland are submerged. And the U.S. Department of Agriculture is trying to figure out just how much crop damage the water's done. Officials are re-interviewing farmers in Illinois and other Midwestern states about their harvesting intentions. The flooded acres have an economic impact well beyond farmers' bottom lines.

Daryl Deusterhaus's grandparents farmed. So did his parents. He works the ground just outside of Quincy, Illinois-with his brother. But now that ground looks a lot more like a lake.

HILL: We're standing on a bluff. It's a beautiful day. The water from the Mississippi spreads flat and calm over the land. So can you describe what we're looking at?
DEUSTERHAUS: Water. This white stuff over to this side, buildings sticking out, that's where our house used to be.
HILL: So you lived down there?
DEUSTERHAUS: Did. I grew up down there.

This year, this flood ruined about 700 of his acres, most of them were planted with corns and soybeans. Daryl farms other land. And he's got crop insurance. He says he's not all "woe is me". But the flood is disappointing.

DEUSTERHAUS: You know we had a pretty good opportunity this year to have an excellent year with the way the prices are going and the way the crops looked. But, it'll get us through to next year.

There are a lot of other farmers in the same situation Daryl's in right now. The American Farm Bureau estimates Illinois crops have suffered losses in the range of $1.3 billion from flooding and poor weather this year. Other parts of the Midwest, like Iowa, have been slammed even harder. Federal Reserve Bank economist Rick Mattoon says it's hard to know precisely how significant the damage to the economy will be until harvest time.

MATTOON: We're in a situation right now where supply is pretty tight, particularly in corn markets. So any reduction in yield right now could show up in food prices and fuel prices. So that's where we are right now.

There are some economic upsides, at least in the short term.

MATTOON: You have this sudden influx of relief money. So whether it be federal, whether it be private insurance, whatever it is. It tends to cause a mini construction boom. So what you often see in areas that are impacted by natural disasters is an uptick for the quarters right after. You often see an uptick in economic activity in the quarters after the disaster.

He says the long-term picture for the regional economy is a little murkier. Some communities and businesses that were affected might rebuild, other's might not. But Duesterhaus's got a clear view of what comes next. He's got no plans to leave this land and says when the water is gone, he'll go right back to farming.