A deep, melting snowpack and heavy spring rains have caused record flooding over millions of acres of prime U.S. agricultural land, including North Dakota, Missouri, Mississippi, Arkansas, Tennessee and Louisiana.

Local experts in flood-soaked regions are predicting all crops in affected areas will show minimal yields. Those crops that do survive will face intense challenges, including heavy disease and weed pressure.

Yet in the Southwest, moisture is nowhere to be found due to a long-lasting La Niña effect. Stunted, yellowing crops are a common sight as severe drought forces crop and forage production to grind to a halt. Areas of exceptional drought are spreading through Texas, Oklahoma, Louisiana, the southern Rockies, south-central Plains, and even portions of the Southeast.

2011 planting season drought and crop damage
Photo courtesy of the Climate Prediction Center

Examining the Impact

As analysts put dollar amounts to the catastrophic losses caused by the floods and droughts, experts agree the impact of these environmental extremes will be both large and long-term.

Billions of Bushels and Dollars Lost

One estimate puts 1.9 billion bushels of corn and 640 million bushels of soybeans at risk in the drought and flood areas. That translates to billions of dollars in lost or damaged crops and related losses. Potential crop value lost when the Birds Point levee was blown in southeast Missouri totaled $85.2 million, according to a report by the Food and Agricultural Policy Research Institute. Texas drought losses alone are estimated at $1.2 billion and counting.

Shorter Crop Inventories

The tight crop supplies that drove up prices earlier this year will now be stretched even further as dwindling crop inventories are not replenished by strong 2011 production. The USDA has lowered crop production and ending stock estimates for many crops, including corn, rice and cotton. For example, expected U.S. corn ending stocks were reduced from 900 million bushels to 695 million bushels, a 23 percent decrease.

Rising Food Prices

With less supply to meet demand, grain prices will continue climbing. Higher feed grain prices will put added financial strain on the livestock sector. In addition, higher prices will ripple through the food processing sector, resulting in steeper food prices at the grocery store.

Less Producer Spending

As floods and droughts keep draining the profitability of agricultural operations this year, producers will look for short-term ways to save money and will be less likely to purchase non-essential inputs.

Let us know how the recent floods and drought have affected you or your clients.