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ReCAP Economists Prepare Report on Impact of 2008 Floods in Iowa Posted 24 June 2008 AMES, Iowa -- We know the 2008 floods devastated Iowa, with 83 of the state's 99 counties being declared disaster areas by Gov. Chet Culver. But what we won't know for some time is the actual economic impact of those flood-damage losses, according to a new report by economists from Iowa State University's Regional Capacity Analysis Program (ReCAP). The report, "Economic Impacts of the 2008 Floods in Iowa," details how the economic impact of this year's flooding will be calculated. Once all of the official losses are reported, ISU economists say the total may approach or exceed the $1.45 billion in losses to crops, livestock, and personal property/income reported in the 1993 floods. (ISU Professor of Economics Dan Otto was lead author of that October 1993 report.) But until the current numbers are in, any early projections putting losses in the billions of dollars are premature, the ISU economists say. "We can measure lots of things. What we can't measure is the thing that people really, really want to know -- and that's the cost to the state in terms of losses from the flooding," said Liesl Eathington, director of ReCAP and lead author on the report. "We won't know that until everyone reports the damage. We also won't know that until some of the (state, federal and private) aid starts to flow in, which could take months -- or in some cases, even years." Expect 1-3 years until the numbers are in Eathington says economists will rely on government accounts of the economy, which come out quarterly, but only at the state level and usually with a one-year lag. "And so it may be a year, two years, or three before we can actually look at the overall performance of the economy and figure out what the net effect was," she said. Otto's 1993 report also figured in the net effect. Taking into consideration offsets such as insurance, federal disaster payments and/or grants, and additional contributions, the report put total net ag losses at $676 million, net wealth losses at $113.1 million and lost personal income at $112 million from the '93 floods. For now, economists can only estimate losses. As an example, the ReCAP report estimates the loss to farmers from this year's flooding. The USDA reported that nine percent of corn acres and eight percent of soybeans have been flooded. Assuming that half of that land is still able to be planted or replanted into soybeans, then ISU economist Dave Swenson calculated that the change in anticipated gross sales for Iowa's crop farmers might be as much as $1.2 to $1.5 billion less than it otherwise might have been in a normal growing year.

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