River Shutdown Costly to Ag

| January 2, 2013
Print Friendly

OMAHA (DTN) — A potential supply chain disruption on the Mississippi River  could affect 7.2 million tons of commodities valued at $2.8 billion in the  month of January, according to updated economic figures released by an industry  group.     
The river level near Thebes, Ill., is projected to fall to 8 feet between  Jan. 5 and 15, effectively shutting down river traffic because most tug boats  need at least 9 feet of water to operate. The Army Corps of Engineers won’t  officially close the river.     
“The uncertainty of this deteriorating situation for the nation’s shippers  is having as much of an impact as the lack of water itself,” said Michael J.  Toohey, WCI’s president and CEO, in a press release. According to a study  released Wednesday by the Waterways Council, Inc. and the American Waterways  Operators, there are 8,000 jobs and $54 million in wages and benefits on the  line in addition to lost shipping traffic.      
The updated estimates do not take into account economic damage during the  month of December, when the water fight between states in the Missouri River  basin and the lower Mississippi River states started boiling. On Nov. 30, the  groups estimated that a river closure would displace $7 billion of commodities  including grains, coal, petroleum and chemicals.    
“It’s hard to get a real figure on what the actual disruption has been,”  Waterways Council spokesperson Debra Colbert told DTN. “Companies are very  reluctant to talk about how much it’s costing them, but it’s having a major  impact. For example, one company told me it cost them $50 million worth of  business because of light loading and cancellations.”  
Colbert said subtracting January’s estimate from the combined estimate  issued in November is the best way to get a rough estimate of the economic  impact. That puts the cost of uncertain water levels at $4.2 billion in  December.     
“At the end of it all, whenever that end is in sight, we should be able to  say a lot more confidently what the economic impact of this was,” Colbert said,  noting there are research and survey methods — such as anonymous surveys —  that can be used after the fact that make businesses more comfortable  disclosing losses.     
The Army Corps began excavating and blasting rock pinnacle formations near  Thebes, Ill., in December. Barges have an eight-hour window to pass through the  area each day while the removal is taking place. Colbert said the rock removal  is scheduled to be completed by the end of January, but it’s possible that it  could extend into February.     
The waterways groups continue to urge President Barack Obama to step into  the conflict by directing the Army Corps to release more water from Missouri  River reservoirs. The corps’ Missouri River operations manual prevents it from  managing the Missouri River to benefit the Mississippi River.      Missouri River reservoir levels are also low because of this summer’s  crippling drought, and groups from those states have petitioned the president  to stand by the corps, citing the water’s importance for hydro-power production,  ice management and tourism, one of the top industries outside of agriculture in  Montana and the Dakotas.      
A river conditions report released by a large shipping group notes that the  upper Mississippi and Midwest need ongoing rains to fix the water level problem in the long term.     
“The water between St. Louis and Cairo is low enough that minor fluctuations in weather or water flow rates can be the difference between the river closing  or remaining open,” the report said. “The corps has released water from  upstream reservoirs, which is still a temporary stave-off fix. There have been  storms passing through the Midwest, which has created snow in a majority of the  area. That is good for much-needed ground moisture once melt occurs but not much immediate help for river levels.”

Category: Farm, Farm News