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Floods create economic catastrophe in Midwest

The floods that submerged the Midwest this month could turn out to be the region’s biggest economic disaster in decades, with ramifications that will be felt by consumers across the country.
Image: A theater in the flood zone downtown Cedar Rapids, Iowa
A theater in the flood zone displays a hopeful message in downtown Cedar Rapids, Iowa.Seth Wenig / AP
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Long after the waters subside, the floods that submerged the Midwest this month could turn out to be the region’s biggest economic disaster in decades, with ramifications that will be felt by consumers across the country.

With levees still under pressure and more flooding expected, no one is ready to put an estimate on the final damage, but it will likely swamp the $21 billion in losses tallied by the Great Flood of 1993.

Crop damage in Iowa alone has already surpassed $2.7 billion, nearly half of it in just one town, Cedar Rapids. Corn prices hit an all-time high near $8 a bushel Monday on the Chicago Board of Trade, but many other important crops were also devastated, especially wheat in Missouri and Nebraska and soybeans in Indiana and Kentucky.

Like thousands of other farmers in the region, Mitchel McLane, whose corn fields are just two miles from the Mississippi River in Union County, Ill., won’t get to benefit from the record prices such crops are fetching. Those premium prices will go to producers in other, drier parts of the country.

So much water is seeping up from the ground on his farm that “you can’t even hardly walk on it, let alone [get] a tractor or anything else on it,” McLane said.

McLane said his fields would probably remain waterlogged into August. But “even if the river goes down soon, there’s going to be at least half that we probably won’t get a crop on at all this year,” he said.

Jerry Bradly, a fifth-generation farmer in Sun Prairie, Wis., expected to lose at least 20 percent of his soybean harvest.

“That is pretty typical of every field we have,” Bradly said.

Growing season already lost
Casey Langan, a spokesman for the Wisconsin Farm Bureau, said Bradly faced the same problem farmers across the Midwest face: Because it’s already June, it’s too late to replant.

“You need about 110 to 120 growing days to get your crop to harvest, and there are not that many days left in the season before a frost. What you see now is lost is lost” for good, Langan said.

The story is the same in Indiana, where State Agriculture Director Andy Miller said the floods were the greatest economic catastrophe in the state’s history.

“We have roughly 9 percent of the state’s crops that is flooded, both corn and beans,” Miller said.

It’s not just the billions of dollars in lost crops. Some fields will take months or even years to recover from built-up debris or silt; others were eroded by the rushing floodwaters.

“Livestock was affected. Farmhouses were affected,” Miller said. “Machinery was affected, and the land was affected.”

But farms aren’t the only businesses ravaged by the rushing waters. Thousands of businesses and storefronts from Minnesota to Arkansas were inundated. Some of them won’t be able to recover.

“I can’t honestly take any more,” said Helen Anderson, owner of Andy’s Pub in Oshkosh, Wis., where the basement swamped to its ceiling and the main bar was left under 10 inches of water.

“No human being should have to go through this and have to put up with this mess,” said Anderson, who is still paying off a $145,000 government loan she took out to pay for repairs after she was flooded out four years ago.

She has no idea how much more loan debt she might have to take on if she wants to reopen now.

Even businesses that weren’t swamped face uncertainty.

Many crops and industrial products move on the Mississippi and Ohio rivers on barges, but traffic has come to a halt.

At the ADM grain elevator on the river in St. Louis, crews were on duty and ready to handle loads. But there were no barges.

“Some of the locks and dams are shut down on the upper Mississippi until some of the water recedes a little bit,” said Larry Barnes, vessel operations manager for United Barge Lines, a major barge service headquartered in Metropolis, Ill.

“A lot of the towing industry’s boats that run up there are pretty well just tied up right now waiting for this flow to run out,” Barnes said.

The halt on barge traffic means farmer Ray Lane can only wait, for who knows how long, to ship his soybeans from Paducah, Ky.  Until river traffic begins moving again, his crops sit in a warehouse, losing money every day.

“It will affect everybody on down the line. The consumer ends up paying most of the bill naturally,” Lane said.

Impact on the pocketbook
And it is the consumer who will get the bill. Smaller harvests mean food will cost more. Damaged facilities mean it will cost more to process. Crippled transportation means it will cost even more to get into stores.

Already, “feed prices are skyrocketing,” said Patrick Boyle, a corn farmer in Springfield, Mo. “That’s a pocketbook issue for all of us.”

Bart Brown, executive director of Ozarks Food Harvest, a food assistance program in Springfield, said it was inevitable that “anything grown on a farm is going to see a price increase.”

At a Harter House grocery store in Springfield, manager Dale Dothage predicted “one of the most unique years I’ve seen in the grocery business.”

“The rain and the flooding — it’s affecting prices,” he said.

Michelle Lytle of Springfield could attest to that. She said she usually paid about $425 for her big monthly grocery run. Monday, her receipt rang in at about $500.

“Produce is more, milk — seems like everything,” she said.

Tourist towns open for business
Meanwhile, tourist towns are desperately trying to get the word out that they’re open for business.

The $1 billion tourism industry in the Wisconsin Dells attracts about 3 million people a year. Even though Lake Delton drained away to nothing as millions of Americans watched on TV, the area’s Visitor and Convention Bureau says 90 percent of businesses are open — including all of the area’s 21 water parks.

In Hannibal, Mo., whose economy relies on the 500,000 tourists who flock to town every year to see the Mississippi and the Mark Twain Museum, officials are worried about turnout at the annual National Tom Sawyer Day celebration, scheduled for July 4 in Twain’s hometown.

“A lot of nervous Nellies see the footage on TV and don’t realize that we have a levee system that protects us from Old Man River back here,” said Beau Hicks, the town’s tourism director.

One hotel alone lost 74 reservations in 12 hours last week, Hicks said. But one reservation doesn’t mean just one room.

“Most of those groups have been booked for several months, so it’s going to be hard to catch up just in the next couple weeks,” said Melanie Campbell, who works at Quality Inn and Suites downtown.