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article imageTrade war, severe flooding creates worst farm crisis since 1980s

By Karen Graham     Jun 8, 2019 in Business
American farmers already dealing with a parade of misfortunes that includes years of low prices and a trade war with China are now grappling with record Midwest rain that will likely prevent a large portion of this year’s crop from even getting planted.
According to the National Weather Service, the continental U.S. recorded its wettest 12-month period in recorded history this year. To make matters worse, May 2019 ended up the second wettest month in the U.S. after record-setting rainfall and historic flooding brought the Midwest to its knees.
John Newton, the chief economist of the American Farm Bureau, cited the farm crisis of the 1980s - when oversupplies and a U.S. grain embargo against the Soviet Union forced thousands of farmers into bankruptcy. “It’s not the 1980s, but it’s as close as we’ve been," he said, reports USA Today.
Experts say that some farmers have been selling out to larger competitors for years amid thinner profits, but 2019 will be altogether different. “This is more than a cyclical thing,” says Gary Schnitkey, an agricultural economist at the University of Illinois. “It’s a series of events that we’ve never seen come together. - It’s going to be a blow to everyone’s financial position.”
Flooding has cut off transportation of goods
The flooding has resulted in hundreds of barges being stalled along the Mississippi River, while railways and highways have been closed - keeping needed supplies from farmers and others, and limiting the crops sent to market, reports Bloomberg.
Chris Boerm, who manages transportation for Archer-Daniels-Midland Co, one of the nation's largest agricultural commodity dealers, says the unyielding weather is an ever-changing challenge.
“It’s sort of like Mike Tyson’s quote, everybody’s got a plan until you get punched in the face, right?” Boerm said by telephone. “Every day we come in and we’ve got a plan. But then it rains three inches somewhere overnight where it wasn’t expected, and the plan changes.”
And this latest development has proven to be a real head-scratcher. For example, goods meant to move on one river may need to be rerouted to a different waterway or offloaded onto a rail car or a truck - with the hope there won't be further delays due to the weather.
How bad is it right now? At just two locks along the upper Mississippi River, there are nearly 300 barges are being held in place as a result of high water and fast currents, according to Waterways Council Inc, a site that tracks barge traffic.
There are hundreds more barges waiting in St. Louis, Cairo, Illinois and Memphis, Tennessee, said Deb Calhoun, the council’s senior vice president. “It’s a big bottleneck,” Calhoun said.
Depending on annual rainfall, snow cover and other factors, it is not unusual for some river flooding to take place. However, this year's flooding has been different, and so much more severe, affecting the entire Mississippi, the Arkansas River, the Illinois River, and the Ohio River. All these rivers are part of our commercially important inland waterway system.
As for figuring out the total price of the damage in homeowner, farm and other business losses, it will take some time, says Jeff Graschel, service coordination hydrologist with the Lower Mississippi River Forecast Center in Slidell, Louisiana.
“A lot of locations since December to January have been above flood levels, and they probably will be in June to July,’’ he said. “We have another month or two before we can get some of these areas to go below flood.’’
Jon Davis, chief meteorologist with RiskPulse, a weather analytics firm in Chicago also says this year's flood event is different. “There are a couple of things that make this situation incredibly unique, the first of which is the longevity of the flooding, ’’ according to Davis. “The other factor is how widespread everything is.’’
More about US flooding, 2nd wettest May on record, Trade war, Planting, Low prices
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