The lack of precipitation throughout much of the country has brought about drought conditions that the National Climatic Data Center has called the worst since the 1950s. Water levels on the river are lowest in a 180-mile stretch between St. Louis and Cairo, Ill., sometimes referred to as the Middle Mississippi. That’s where the U.S. Army Corps of Engineers has been dredging to maintain a 9-foot channel to allow barges and boats to pass. Most vessels can’t travel in waters any shallower.
According to the American Waterways Operators (a trade group representing the tugboat, towboat, and barge industry) and Waterways Council (a national public policy organization), a traffic stoppage could occur as soon as this weekend, halting a $180 billion transportation industry. The groups estimate that a disruption in the Mississippi River’s supply chain could affect more than 8,000 jobs, $54 million in wages and benefits, and 7.2 million tons of commodities worth $2.8 billion.
Jerry Fruin, an applied economics professor at the University of Iowa, says that the two groups’ estimates on the value and quantity of commodities along the Mississippi are on target, but adds the economic ramifications may be overstated because other transportation sectors like rail or trucking would likely get a boost from accommodating some of the cargo that can’t travel down the river by boat.
While the river appears to be shrinking faster than some expected, some short-term rain is in the forecast – which could delay a potential shutdown. But many are expecting an eventual halt to shipping soon. “There’s a very real risk of a shutdown for six to eight weeks,” Fruin says.
The U.S. Army Corps of Engineers, however, remains hopeful that a traffic stoppage can be averted. Bob Anderson, an Army Corps spokesperson, says he is “cautiously optimistic” the river will remain open. The latest forecasts call for above-average precipitation and temperatures, which melt snowfall in the upper Mississippi. “But with absolutely no rain, you could see historic lows outside of St. Louis around the 15th or 16th of January,” he says.
Much of the corn, soybeans, and grain traveling along the river are exports and head toward New Orleans and the Gulf of Mexico en route to other countries. Some of those goods, along with commodities like petroleum, fertilizer, and steel, may end up being transported by rail or truck at a higher cost, says C. Phillip Baumel, a professor of agriculture at Iowa State University. But any costs passed onto consumers are likely to be minimal. The primary impact from a Mississippi shutdown would be on farmers who will have trouble exporting their crops, and barge, towboat, and tugboat operators who are contracted with farmers and stuck on the river.
The one bright spot for the struggling Mississippi is timing. January is typically the slowest time of the year for traffic along the country’s most important waterway. Upper portions of the Mississippi River in Minnesota, Iowa, and parts of western Illinois are frozen. Shipping along the rivers that feed into the Mississippi, like the Illinois, are also historically slow in colder months. Of an estimated $180 billion of goods that travels along the river each year, only about $7 billion is transported in December and January, according to Bloomberg News.
“If you’re going to pick a month to have a problem, January would be the least economically significant,” says Fruin. “It’s not an economic disaster if it’s short-lived, but it’s going to be very disruptive.”