Last updated 3:39PM ET
April 16, 2014
Nebraska News
Nebraska News
Flooding could impact grain movement, marketing
(2011-06-16)
(NET Radio) - Nebraska farmers will feel the force of floods. The Farm Service Agency estimates that 90,000 agricultural acres along the Missouri River alone could be impacted by flooding. But the effect goes beyond flooded fields, potentially impacting what happens to grain after it leaves the farm, as Mike Tobias reports in this radio Signature Story.



Here's more of Tobias' interview with Matt Stockton, a University of Nebraska-Lincoln agricultural economist at the West Central Research and Extension Center in North Platte.

Matt Stockton

MATT STOCKTON, UNL AG ECONOMIST: What happens is you're disrupting the normal flow of traffic. In a disruption of normal flow, if there's a need or a market demand that needs something, then there's got to be alternate ways to get that corn or that product to market. If those things are destroyed or how bad they're affected and how long they're affected, it can have impacts. In other words, if it's a short term impact, they get things back to normal quickly, you know it's not that big of a deal. They can do some alternatives. But if it's a long term thing, destroys some permanent routes and stuff, you could actually create some cost increases in the transportation costs that might stick in the market for some time. Those are the possible impacts. It doesn't mean that's what's going to happen.


See Gov. Dave Heineman touring Cargill in Blair and how the plant is preparing for flooding.

STOCKTON: Think about how corn typically flows out the Midwest. It typically goes down there by barge because it's the cheapest means. And then railroad, obviously, unit trains. A lot of times railroads take it to the river and then the river takes it down, and then it goes out to the world through the bottoms of the Delta. That's kind of how it works. With this disruption, what we're seeing is we're going to have to go to the east coast, the west coast or go somewhere else, or somehow get it down to where it needs to be. And so obviously adjustments will be made and there's some capacity there, but you're going to limit the amount of flow that can go out. So that's going to create maybe some temporary shortages which is going to create some spikes in markets around the world. It may change the flow of who buys corn, and where and how it goes. And that's exactly what's going on, and that's what you kind of see in the marketplace.

MIKE TOBIAS, NET NEWS: How will this impact individual producers?

STOCKTON: It depends on when he marketed his product and when he delivered it. You know if a guy's already got his corn sold and had it moved already, it doesn't really affect him. But if a guy had planned on moving it at a certain time and has contracts for certain periods of time, and the co-ops say we can't move the corn right now, then that's obviously going to affect whether his bin gets empty or not. Obviously we're not at harvest time so that corn can sit in bins for a while, and it's not really an emergency. But what it does is it disrupts when that can flow out and then what happens is, let's say this goes on for a month or so and things don't get straightened out for several months. Now you've got to play catch-up. And so potentially it could put pressure on a harvest space eventually if they don't get it cleared out by the time that turns around.

STOCKTON: This potentially could have some short term effects on the market and long term effects in the fact that if enough farm land goes out of production, that prices and quantities may be affected.

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