Monsanto, DuPont Will Benefit Once Mississippi Flooding Subsides

The Mississippi River has overflowed its banks and almost non-stop rain has swollen it to an epic size. Memphis barely survived. The land south of there is experiencing serious trouble. We will see exactly how hard the lands along the southern...

May 15, 2011 | Source: Seeking Alpha | by David White

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The Mississippi River has overflowed its banks and almost non-stop rain has swollen it to an epic size. Memphis barely survived. The land south of there is experiencing serious trouble. We will see exactly how hard the lands along the southern Mississippi are hit as the weekend unfolds. The damage to crops will be in the billions of dollars. The area flooded will be in the millions of acres.

From the pictures of the Morganza Spillway, there is no question they will have to open it soon. Then the entire area south of it will be flooded. That’s a large chunk of the farmland in Louisiana. Arkansas has more than 1500 square miles flooded. They blasted a levee to flood Missouri farmland to avert the flooding of Cairo, Illinois. Mississippi (the state) has considerable flooding. Estimates are for total flooding there to be more than 2100 square miles. In fact, the Mississippi River is backing up the Yazoo River, and it is flooding too. I don’t know the overall totals yet, but this flood is being compared to the epic flood of 1927 (in other words it’s a once in a hundred years phenomenon). The crop damage will be extensive.

Eventually the floodwaters will subside. The farm lands may need some work, but they will go back to being farm land. The farm lands will need to be re-planted. For a shortened season, they will need good seed and likely good fertilizer. The two US companies most famous for their seeds are Monsanto (MON) and DuPont (DD). They should see a nice uptick in sales from this disaster. In addition they may get secondary business from farmers elsewhere in the US and the world who will be trying to take advantage of the now larger shortage in crops. Since the world’s grain stores were already short due to the many disasters last year, the supply will be still shorter.