2011 Missouri River Flooding Economic Impacts The Case of Agriculture

posted by Spencer Parkinson on Friday, April 13, 2012

With the spring season upon us, the weather here in Iowa has really begun to warm. With this change in weather, the focus in Iowa and Nebraska agriculture now turns to planting a new crop. With this focus, the events of last year's Missouri River flooding are still on the minds of those farming along its flooded banks. Now that the floodwaters have subsided, the extent of the damage which has occurred in southwestern Iowa is very evident.

Recall that in May of 2011, the U.S. Army Corp of Engineers made a decision to discharge excess water stored in the upper Missouri River basin. That decision had implications for many industries, but due to the rural nature of southwestern Iowa/eastern Nebraska, the implications were especially acute for production agriculture located along the river. In most cases, farmers had already committed to their planting intentions and had incurred costs associated with raising crops within the impacted floodplain.

The duration of the flooding prevented farmers from harvesting acres directly in the floodplain in 2011 and possibly beyond, and caused yield (production) losses to occur in acres on the periphery of the floodplain. While the extent of the damage to this area is surely more than economic in nature, we were commissioned by one of our long-time loyal clients (the Iowa Farm Bureau) to estimate the extent of economic damage that was incurred from the inability of farmers to sell a normal crop. Soon after completing the study for the Iowa Farm Bureau, we were asked by the Nebraska Farm Bureau to do a similar study for their side of the river.

After accounting for effects of not being able to sell a normal crop, the losses for Iowa are:

  • $207 million in lost output
  • $94.6 million in total value added
  • $28.3 million in lost labor income

After accounting for effects of not being able to sell a normal crop, the losses for Nebraska are:

  • $188 million in lost output
  • $95.8 million in total value added
  • $57.8 million in lost labor income

The above estimates do not account for losses associated with levee damage, reduced soil productivity, disaster clean up, buildings, roads, and other infrastructure and property. Nor do they account for the losses from non-agriculturally related manufacturing and services that were affected by the flooding. These losses would likely add substantially to the above figures.

  1. economic impact
  2. missouri river

About The Author

Spencer Parkinson

As Executive Director of Decision Innovation Solutions, Spencer Parkinson is responsible for business generation, ensuring client satisfaction and managing the overall operations of the business. He also seeks to understand clients’ data challenges, propose potential solutions and works wit ... read more