Drought in the central U.S. is shrinking the Mississippi River, driving up barge freight rates and threatening to disrupt supplies of everything from corn to gasoline.

Dry conditions in the Ohio River basin, which feeds the Mississippi, have exacerbated already low water levels in the larger river, said David Welch, a hydrologist with the Lower Mississippi River Weather Forecast CenterThe Mississippi River, a major transportation route for food, energy and steel to world markets, typically experiences lower water levels at this time of year.

“It is at low levels that the inland waterway industry and the shipping industry have to think carefully about how much draft and how much cargo they can put on inland vessels” to prevent ships from running aground, Welch said.

Barge rates originating in an area between Minneapolis-St. Paul and St. Louis were $34.15 per ton for the week ending Aug. 27, up 19% from the previous week, according to the U.S. Department of Agriculture. Rates from St. Louis were $24.62 per ton, up 17% from a week earlier.

The recent trend of lower water levels on the Mississippi is bad news for U.S. soy and grain producers, said Mike Steenhoek, executive director of the Soy Transportation Coalition. Barge companies are already announcing restrictions on drafts and the number of vessels they can tow, he said.

Although water levels on the Mississippi River are still well above last year’s lows, the drought underscores how extreme weather is endangering the world’s most important waterways. For the past two years, dry conditions on the Mississippi have caused traffic jams at the busiest times of the year for grain shipments, forcing farmers to seek alternatives and depressing already high global food prices. This year, low water levels on the Amazon in Brazil also pose a threat to crop transports there.

Read more: Shrunken Mississippi River slows U.S. food exports at time when world needs them most

Coupled with recent rail problems, including a day-long strike in Canada, “the receding water levels on the Mississippi River are hampering farmers’ profitability,” Steenhoek said. “This coincides with an expected bumper harvest in 2024.”

Shipments of crude oil and petroleum products such as gasoline and diesel could also be affected, although crude oil shipments via barges and tankers have declined over the past decade as more pipelines are built. Last year, there were about 36,000 barrels of crude oil and petroleum products were shipped from the Midwest to the Gulf Coast. That is significantly lower than the peak of 80,787 barrels in 2013.

The shrivelled Mississippi also endangers drinking water. When water levels are low, the river lacks the force to keep saltwater from the Gulf of Mexico from rushing upstream and contaminating supplies to cities in southeastern Louisiana. Last month, the Army Corps of Engineers said it build an underwater sillor barrier, to keep out the salt water for the third year in a row.

According to Welch, water levels are likely to remain low or even drop further as little rain is expected in the coming weeks. insurance company

Parts of West Virginia and Ohio along the Mississippi are in extreme droughtaccording to the US Drought Monitor. A larger area including parts of Indiana, Pennsylvania and Kentucky is abnormally dry. And states along the Lower Mississippi are also affected by drought.

“This is kind of a seasonal dry spell,” Welch said. “We don’t see much to turn it around.”

Photo: Low water levels on the Mississippi River in Memphis, Tennessee, US, on Monday, November 7, 2022.

Copyright 2024 Bloomberg.

Topics
US Tech Mississippi