Animal Nutrition News – Flooding Ripple Effect on Market
While devastating flooding takes place in the Midwest it has a ripple effect on the market. Full losses in livestock and grain are not yet known—and could take even a year to uncover—but there are key factors to watch in the market even now.
- Ethanol: “Pay attention to what’s taking place with ethanol capacity,” says Angie Setzer, vice president of grain for Citizens LLC in Michigan. “A good percent of production is offline or damaged in the short-term and because of that we did see ethanol futures jump mid-week and help margins for plants not effected.”
- Logistics: “They can’t ship grain if rail is damaged,” Setzer says. “There are significant logistic disruptions and how that plays out is yet to be seen and it could affect basis. The Mississippi River is expected to see major flooding and it’s a significant grain mover—what does that mean for export ability.”
- Destroyed stored grain: “The million-dollar question is how much grain storage is impacted and what does that mean,” she says. “You can’t blend off flooded grain. Nebraska stored grain in bags at record levels, how much of that has been lost? Nebraska is estimating $440 million in crop losses.”
While the weather might not have a big effect on the markets yet, it likely will.