Current price is $7.73
http://www.quotecorn.com/
Posted on 06/16/2008 10:17:49 AM PDT by Dan Zachary
Flooding in the Midwest has swelled rivers and submerged roads and rails, halting or delaying shipments of food, fuel and other goods. Manufacturers also have been forced to suspend production of everything from oatmeal to pork products.
At the earliest, barge, road and rail traffic will get back to normal next week. But companies are focused on getting through the weekend, when at least one river is expected to crest at nearly 32 feet, making it possible that the transportation snags could drag on.
Union Pacific Corp., the nation's biggest freight railroad, currently has six mainline tracks out of service that carry freight through Iowa. Burlington Northern Santa Fe Corp. is experiencing delays along its key routes along the Mississippi River -- from Ft. Madison, Iowa, to Memphis, Tenn.
A bridge over the Cedar River has collapsed, and another owned by Union Pacific is being monitored for possible washout. Several more are under water. The shutdowns are expected to last about a week, but warned further delays are possible.
Flooding in Iowa and Wisconsin also is affecting Amtrak service on two major western routes from Chicago to San Francisco and Seattle. Some service also is suspended between Chicago and Denver, spokesman Mark Magliari said. Amtrak is providing alternative service by bus and train in some areas, but not in Iowa, at least through the weekend. Major lines to Wisconsin and some parts of Minnesota have been suspended since Tuesday.
The situation is slightly better for trucks, which can more easily redirect cargo shipments to alternate routes.
David L. Miller, chief operating officer for Con-way Freight, said regional service has been shut down or delayed through virtually all the flooded areas. He expects service to be nearly restored by Monday, as freight is transferred to other routes.
Both FedEx Corp. and United Parcel Service Inc. also said delays should be minimal. Barring any further severe weather, both shippers expect to return to normal operations by early next week.
As shipments are delayed across the country, the floods also have caused shutdowns at several food processing plants in Iowa, including a Quaker Oats facility in Cedar Rapids and two Tyson Foods Inc. pork facilities.
Quaker Oats, a unit of PepsiCo, Inc., makes its signature oatmeal cereals at the Cedar Rapids plant, which employs 1,100 people, spokeswoman P.J. Sinopoli said.
A nearby distribution facility has not been affected. "We have ample inventory on hand at this point to meet customer needs," she said, adding that the company is reassessing the situation daily.
Cedar Rapids is one of the worst-hit areas, with the Cedar River expected to crest at 31.8 feet on Friday. In a 1993 flood, considered the worst in recent history, it was at nearly 19.3 feet.
"There is no business ... near downtown Cedar Rapids that isn't completely shut down," Sinopoli said.
Meanwhile, barge operator American Commercial Lines Inc. said flooding on the Mississippi River will cause several lock closures, which could last about two weeks, and more flooding over the weekend is expected to create delays around St. Louis. Conditions on the Illinois River have stabilized and normal operations have resumed, but a wet forecast could affect service this weekend, the Jeffersonville, Ind.-based company said on its Web site.
The railroad industry has been particularly hard it.
-- Norfolk Southern Corp. expects flooding to shut down service through Hannibal, Mo., this weekend. The company plans to reroute service on the line through St. Louis.
-- Canadian National Railway Co. currently has two sections of rail out of service in Iowa, and spokesman Bryan Tucker said a portion of a mainline track carrying cargo to Chicago washed out early Friday. Canadian Pacific Railway Ltd. has shut its mainline through Wisconsin, which carries freight from Canada to Chicago.
"We're at the mercy of the weather at the moment, as is everybody else," said Canadian Pacific spokesman Mike LoVecchio.
Our country should cut off all donations to other countries, including goods, until our people are made whole again.
My Sportsmans Guide order shipped out of Minnesota just before the floods.
With corn spiking at $7.50/Bu, some ethanol plants have indeed shut down. This will translate to more gasoline required to make up the deficit and a huge spike in food prices. Iowa is the #1 corn state and with much of the crop destroyed by flooding, delayed planting, etc., you ain’t seen nothing yet. We can further the vilification of agriculture and the farmers for wanting to make a profit.
And how. I read a lot of labels when shopping and corn or corn syrup seems to be in everything. My grocery bills are already off the charts, not looking forward to what is coming down the pike price-wise because of this tragedy.
Prayers up for Iowa's farmers and residents.
Do “our people” include the residents of the Gulf coast, living in TX and LA and MS and AL and FL?
Did the price of oil go up because of this? (sarcasm)
Wouldn’t surprise me. Most ethanol travels by rail which has placed an embargo on such commodities traveling through Iowa headed east until floods recede and repairs are made to the lines. This should put an increased demand on oil. The loss of crops due to midwest flooding will add even more pressure on the ethanol industry as well.
I80 is back open, but the rail lines are pretty screwed up for a bit.
Iowa corn prices are dropping after the recent spike:
http://www.iowaagriculture.gov/agMarketing/dailyGrainPrices.asp
“US 2 Yellow Corn Prices were generally 7 to 9 cents lower for a state average of 6.64.”
This is about 10% higher than the June 9 price of 6.05. http://www.goagwest.com/markets/story.php?id=111275
Also look at the chart on this page http://www.marketnews.usda.gov/gear/browseby/lsmnpubs/PDF_Weekly/Ethanol.pdf The red line is last year and blue is this year. Notice that this year is almost double last year at the same time.
There is a lot of demand for corn which will also drive up the price:
The problem, says Tom Jackson, senior economist at Global Insight, is that the nation now needs nearly perfect harvests to meet export demand, domestic livestock and food use and surging ethanol production. The ethanol industry will use 4 billion bushels of corn this year, up from 3 billion last year. http://www.usatoday.com/money/industries/food/2008-06-10-corn-food_N.htm
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