Severe weather and flooding that impacted much of the Midwest are expected to cause multinational agribusiness company Archer Daniels Midland to lose millions of dollars.
ADM’s Carbohydrate Solutions and Origination operations, which process corn into food and fuel products, were mainly impacted by the weather and flooding.
The company announced Monday it expects to lose between $50 million and $60 million dollars in the first quarter from these operations.
The company made $717 million in the first-quarter of 2018. ADM made a total of $3.4 billion in 2018.
“Extreme winter weather has affected our first quarter North American operations beyond what we would experience in a typical winter,” according to a press release from Archer Daniels Midland.
ADM closed down a corn processing plant due to flooding in Columbus, Nebraska. This plant also announced that it will not accept any corn damaged by the flooding.
“The extreme weather reduced corn processing volumes principally due to a slowdown in rail and truck transportation, which affected both inbound and outbound shipments,” according to the statement from ADM.
Barge traffic has been severely limited since December due to unfavorable conditions, ADM said. This has also impacted farmers by lowering corn and soybean prices throughout the region.
The severe weather impacted grain storage, plants and railroads as well. Corn and soybean harvests from 2018 were still being stored in grain bins many of which were damaged during the flooding. Any corn that spilled out would be contaminated and destroyed. Rail lines are also washed out, all of which has impacted corn prices throughout the area and the United States.
These conditions also affected farmers in parts of the Midwest including in Nebraska and Iowa. The United States Department of Agriculture projected a loss of $3 billion to farmers.
Federal Railroad Administration Administrator Ronald L. Batory declared an emergency in March due to the extreme flooding in the Midwest.
The National Weather Service said the threat for flooding was greatly increased due to high soil moisture, frost depth, elevated river levels and ice jams and an increasing snowpack throughout the Midwest. This caused rivers to reach unprecedented levels in 40 places causing breached dams, levees and power outages.
Severe flooding and heavy downpours in the Midwest in recent years are in line with global climate change assessments from local and national scientists.
“Extreme heat, heavy downpours, and flooding will affect infrastructure, health, agriculture, forestry, transportation, air and water quality, and more,” according to the National Climate Assessment.
ADM has previously identified risks from climate change in their annual report to the United States Security Exchange Commission.
“The availability and prices of the agricultural commodities and agricultural commodity products the Company procures, transports, stores, processes, and merchandises can be affected by climate change, weather conditions, disease, government programs, competition, and various other factors beyond the Company’s control and could adversely affect the Company’s operating results,” according to the report.
Claire Hettinger is the 2019 Illinois Humanities Engagement Fellow for the Midwest Center for Investigative Reporting. Have a story idea, question or tip? Reach her at claire.hettinger@investigatemidwest.org
