Cameron McWhirter reported in the Wall Street Journal on Saturday that “Sections of the Mississippi River are approaching low water levels not seen in more than three decadesdisrupting a vital supply route for agricultureoil and building materials and threatening businesses, including barge and tug operators, Farmers and factories.
“Lack of water, caused by a lack of rain in the Ohio River Valley and the upper Mississippi, has interrupted commercial traffic and riverboat cruises to many places under Illinois. Prices for shipping goods have more than doubled in a few weeks. The houseboats are stranding on sandbanks in unprecedented numbers and many ports and wharfs no longer have water deep enough for commercial vessels to reach them safely.
The Journal article noted that “the U.S. Army Corps of Engineers began emergency dredging at various points on the river to deepen it enough for commercial traffic to resume, said Lisa Parker, spokeswoman for her Mississippi Valley division.
“Part of the Ohio Rivera tributary of the Mississippi, also experienced low water levels,” the Journal article said.
[10/14/22] At 7 p.m., the level of the Mississippi River in New Madrid, MO, fell to -5.45 feet. Although these sightings are still preliminary, it appears that the river has fallen to record low water levels, last set in 2012. Sightings of the river in New Madrid began in 1879. #MOwx pic.twitter.com/BXRxYw59Qm
— NWS Paducah, KY (@NWSPaducah) October 16, 2022
McWhirter explained that “Historically, navigation along the Mississippi River and its tributaries has been less expensive than other forms of transportation, but with fewer boats and barges capable of transporting goods, prices have skyrocketed. The cost to send a ton of corn, soybeans, or other grains south from St. Louis to southern Louisiana reaches $105.85 on Oct. 11, according to data compiled by the U.S. Department of Agriculture. On September 27, the cost was $49.88. On October 5, 2021, it was $28.45.”
“Farmers and factories in the central United States are racing to secure the dwindling number of places or find alternate supply routes.”
Also on Saturday, Associated Press writer Michael Goldberg reported that “falling water levels in the lower Mississippi are are expected to fall further in the coming weeksaccording to one projection, dampening economic activity in the region and potentially threatening jobs in one of the country’s poorest states.
“A shortage of rainfall in recent weeks has left the Mississippi River approaching record low levels in parts of several states. Almost the entire Mississippi basin, from Minnesota to Louisiana, has experienced below normal rainfall since late Augustsaid the AP article.
A Sunday CNN article pointed out that “the Climate Prediction Center forecasts are dry, with below average rainfall in the outlook until at least October 23.”
And The Guardian reported late last week that “The Mississippi Basin produces nearly all – 92% – of US agricultural exports and 78% of global feed grain and soybean exports. The recent drought has caused water levels to drop to alarming levels, leading to shipping delays and increased costs for alternative transport, such as rail.
Elsewhere, Donnelle Eller reported on the front page of Sunday’s Des Moines Register that, “It’s been a drought year in much of Iowa. The entire state is experiencing drought conditions, ranging from abnormally dry to extreme drought in northwestern Iowa. Only in parts of northeast Iowa has there been enough rain this year.
The Registry article explained that, “Even with drought reducing yields in parts of Iowa, however, farmers this year are expected to harvest their second-largest soybean crop and seventh-largest corn crop. Nationally, farm receipts are expected to hit a record highthanks to higher grain and livestock prices, the USDA reported in September.
“But inflation weighs more and more. The crop being harvested was the second most expensive to grow on record: Cost increased by 18% compared to 2021. U.S. farm income is expected to fall 1% this year to $147.7 billion adjusted for inflation from a year ago, the USDA said.
Meanwhile, Bloomberg writers Selcan Hacaoglu and Megan Durisin reported late last week that, “Both Russia and Ukraine seek change to their landmark grain export agreement as part of talks to extend the initiative beyond the current deadline next monthaccording to the UN.
“Russia wants to see a pipeline that carries its ammonia to the Ukrainian port of Odessa for shipment reopened under the new conditions, Amir Abdulla, UN coordinator for the Black Sea Grain Initiative, said in an interview in Istanbul on Friday. Ukraine is looking to extend the deal for more than a year and include Mykolayiv as a fourth export porthe said.”
“The first phase of the pact – which revived the maritime grain trade from Ukraine amid the Russian invasion – must end on November 19…The fate of the agreement remains vital to temper global food inflation,” the Bloomberg article said.
Additionally, regarding Ukraine and Russia, Financial Times writers Christopher Miller, Roman Olearchyk and Mehul Srivastava reported today that “At least five explosions were heard in central Kyiv early Mondaylike Russia did new strikes on the Ukrainian capital with suicide drones, a week after hammering the country with a barrage of missile and drone attacks.
Also today, Reuters writer Pavel Polityuk reported that “Less than 30% of Ukraine’s winter grain area for the 2023 harvest was sown at optimal times due to inclement weather, state meteorologists said Monday, adding that it was “much less‘ than in previous years.
In other market news, Bloomberg writers Agnieszka de Sousa, Ekow Dontoh and Ismail Dilawar reported on Saturday that “food importers from Africa to Asia are interference dollars to pay their bills like a surge in the US currency pushes prices up even more for countries already facing a historic global food crisis.
The Bloomberg article claimed that “Around the world, countries that rely on imported foods are struggling with a destructive combination high interest rates, a soaring dollar and high commodity prices, eroding their power to pay for goods which are generally at the price of the greenback. Dwindling foreign currency reserves in many cases have reduced access to dollars, and banks are slow to release payments.