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PRESS RELEASE


Vast Upper Mississippi Destruction Getting Worse

June 25, 2008 (EIRNS)—Because of new rains this week, the flood cresting expected for the Mississippi River counties southernmost in the state of Missouri, may now not occur until next week. Meantime, the damage toll across large parts of Iowa, Wisconsin, and Illinois is growing as more of the scale of ruin is made known.

The flooding so far has breached or overflowed 35 levees in Iowa, Illinois, and northern Missouri. Then, over the last 24 hours, when some parts of the lower Missouri River (which enters the Mississippi at St. Louis) received 7-8 inches of rain, such downriver towns as Cape Girardeau, in southern Missouri, received new warnings of higher flood cresting. July 2 is the the latest estimate for the Mississippi River to crest at the Cape, at possibly 43 feet — which is 11 feet above flood stage. The town's flood wall is designed to protect against a river level of 54 feet downtown, but much of the surrounding area will be vulnerable.

For the Lower Mississippi Basin, the danger is less, both because of better built-up flood control structures and contingencies, and because the river widens. Army Corps hydrologist Dave Beretta, based at Memphis, Tennessee, today stressed to the Associated Press that the Lower Mississippi can carry 2.5 times the volume of water as the Upper Mississippi.

Vast Damage Toll in Iowa Alone

In Iowa alone, among its 64 manufacturing plants, dozens were flooded, or stranded without transportation, including Amana Refrigeration in Amana, and the John Deere works in Waterloo.

An initial survey done by Texas-based Industrial Info Resources, noted that the state has 41 power plants, with many experiencing trouble. Three coal-fired plants in the state were shutdown by Alliant Energy Corp.

The washed-out roads, rail lines and downed or unsafe bridges has disrupted economic activity in all directions.

Many of the big-name food processing plants remain shutdown, including sites run by Cargill Inc., ADM, Quaker Oats, Tyson Pork and Penford. But dozens of smaller facilities are out of commission, among the 93 food and beverage plants total in the state. ADM said it may try to re-open its Cedar Rapids corn processing plant next week. Cargill, the privately-owned cartel company, has not indicated when it may re-open its plants. On June 17 Cargill declared 'force majeure' on certain corn product contracts, releasing a statement, "This means that Cargill will not be able to meet all of its customers' contracted volumes, and supply of corn syrup from Cargill will be limited until further notice."

The damage to farming directly is enormous. Some 20 percent of Iowa farmland is directly flood-affected—sand, debris, silt, pollution; and the other 80 percent is in poor shape from the wet Spring. Some 27 percent of the state's corn has typically gone to feed hogs—Iowa has raised 25 percent of the hogs in the United States in recent years. But now, the feed, energy and marketing conditions are in chaos.

Even before the Midwest flooding, the U.S. Department of Agriculture forecast that this year's corn production would be at best 11.735 billion bushels, when corn usage (counting 3 to 4 billion for ethanol) would be 12.51 billion bushels!

Yet the policy of corn for biofuels continues in effect. Several ethanol plants in Iowa are down only because of flooding and transport interruption, not because of Federal intervention to preserve food. With the soaring grain prices, some ethanol plants will be financially bust. VeraSun Energy Co. postponed the opening last week in Minnesota, of what would be one of the world's biggest ethanol plants.

But today, BioFuel Energ Corp. announced the start-up of two new ethanol facilities—Wood River, Nebraska, and Fairmont, Minnesota, both sited next to old Cargill grain elevators. Cargill has contracted to provide the corn, and distribute the distillers by-product.