Only two months ago, Americans imagined bumper corn and soybean crops in 2008 would ease the pain of rising food costs and provide a plentiful, if controversial source, of ethanol to dilute record gasoline prices. Those ideas are now washed away …

Today, millions of acres of prime U.S. farmland are under water only weeks after being planted. So far 19 levees have failed on the swollen Mississippi (see a government map of the flood area here,) as a hump of floodwater moved downriver. Most were agricultural levees protecting corn and soy fields. The Army Corp of Engineers, which operates river locks and dams, said seven more levees may overtop in the coming days. Among the most fertile farms in Iowa and Illinois, the two biggest corn producers, have land that lies in the Mississippi River’s expansive floodplain.

On June 30, the U.S. Department of Agriculture will release its annual acreage report, which will give an accurate picture of the crop damage.  In March USDA said farmers intended to plant 86 million acres of corn this year, down from a 92 million acres in 2007. They expanded soy plantings to 75 million acres from 64 million. It does not look good for farmers, some of whom replanted during a let up in the rain, then lost fields a second time. Up to 5 million acres across the Midwest may have been ruined and will not produce a crop this year. Farm losses could top $2 billion. The result: record high prices this week for corn, cattle and ethanol. If you thought your food and fuel budget was tight, just wait …