Jun 17, 2008 9:36 am US/Central
Flooding, Crop Loss Compounds Rising Food Prices
Minneapolis (CBS) ―
-
-
A hog farm is surrounded by flood water June 15, 2008, near Oakville, Iowa.
Scott Olson/Getty Images
Flooding throughout the Midwest is pushing food prices even higher. On Monday, a bushel of corn closed just under $8, which is a record. That's more than double what it was a year ago, CBS station WCCO-TV in Minneapolis reports.
Twenty percent of Iowa's soybean crop is a loss. Ten percent of the corn crop is wiped out all at a time when demand for corn home and abroad is at a record.
"We have increasing in consumption of corn going into ethanol plants. We've got the livestock sector that depends on corn," said Perry Aasness of the USDA Farm Service Agency.
When the price of crude oil jumps, gas prices jump dramatically. That's because about 90 percent of what you pump out is crude oil-based.
When corn prices go up there is an impact on food prices but the impact is not as drastic. That's because corn is an ingredient in less than a third of the things we buy at the grocery store.
However, the food that has corn will likely get more expensive.
For instance, some analysts think the cost of corn-fed beef will go up 5 to 10 percent. But as disastrous as this looks there may still be time for some flooded fields throughout the Midwest to be replanted.
"I think people are holding their breaths hoping some of these fields dry off and they can actually get in and replant them," said Aasness.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
CBS News Interactive: Eye On The Economy
Click to enlarge
Stumble It!
