One story that has been making a lot of headlines lately is the weather in the Midwest. With all of the flooding from North Dakota to Indiana many people have lost it all—their homes, pets, vehicles, jobs and even their crops.
Luckily South Dakota has been spared in all of this horrific weather but the truth of the matter is it is still going to affect South Dakota in the long run; in fact it is going to affect the whole country. With gas hitting record highs at $140 a barrel according to CNN gas prices won’t be going down anytime soon. On top of that CNN also estimates that the flooding in Iowa and other parts of the Midwest will spike gas prices up by as much as 15%.
Why you ask? The flooding in Iowa and other parts of the Midwest is going to make an impact on your wallet is because demand for corn and soybeans have been fueled by aggressive development of alternative fuels made from grains like ethanol and biodiesel. Demand for these products is needed not only for fuel but for food as well.
Another way that the flooding is going to affect not just the Midwest but the WHOLE country is in food prices. Many of the states hit hardest by all of the flooding were top producers of corn and soybean crops and with the price of corn already high this is only going to hurt the agricultural business more. Worldwide, food prices have risen 83 percent in the past three years, according to the World Bank. Bad weather in major grain-producing regions is part of the reason.
‘Well I don’t eat a lot of soybean or corn or products made with those two things’, you might be saying to yourself. That doesn’t matter, you will still be affected. About half of the country’s corn crop is used in corn-based feeds to help fatten cattle, hogs and chicken—so if you like your steaks, hamburgers, bacon, ham or fried chicken expect the price for those to go up as well. And for all of you tofu lovers out there expect to see a rise in the price of that too since it is made from soybeans. And what about your daily can or bottle of Pepsi or Coke that you drink? Yep, even the price of that will be affected since corn is used to make high fructose corn syrup, a sweetener in soda.
The real storm may have already passed, and flood waters may be starting to recede in some places but the aftermath might just be worse than the actual storm, with rising prices for food and gas in our already strained economy. Many people are going to have to find ways to rebuild as well as just stay afloat with the increasing prices. I guess when it rains, it pours—no pun intended.