Midwest Flooding Impacts the Economy

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Along the Mississippi in Missouri and Illinois, the National Weather Services is predicting the worst flooding in 15 years.

Outlying areas could be inundated, but most of the towns are protected by levees and many low-lying property owners were bought out after massive flooding in 1993, officials said.

While the flooding is centered mainly in the midwest -- economic experts say it will impact the rest of the country.

This week's rushing flood waters have left parts of Wisconsin, Missouri, Iowa and Indiana under water.

And while the flood waters will eventually subside -- the rest of the country will feel its economic impact for months.

Already, flooding has destroyed nearly 20 percent of the midwest's crops.

And what survived is stunted.

"I probably had a hundred acres under water in '93. This is twice as bad. This is the worst I've ever seen it," said Jerry Bradley, a Wisconsin farmer.

The flooding is hitting the corn crop hard. AG forecasters say it will be down 10 percent this year.

"We are on the very verge of a potential disaster in 2008 corn production," said Rich Feltes from MF Global.

Consumers will feel the pressure as well. Prices will spike on corn-based products like soda, chips, milk and beef from corn-fed cattle.

The price of corn now stands at $7 a barrel -- a record high. And economists say it will rise.

"We are already seeing it. The market is already anticipating this and is already built it in some of the prices," said Ron Litterer from the National Corn Growers Association.

Another economic downside from the flooding: increased transportation costs.

That's because parts of the swollen Mississippi are closed -- unable to transport goods from corn to coal.

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Heather Sells

Heather Sells

CBN News Reporter

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