Caity Burke
A drought causes low water levels for the Mississippi River halting barges and impacting the local and national economy.
The Mississippi River, often referred to as the “Mighty Mississippi,” suffers from drought and low water levels. Essential to the transportation of goods, states residing along the river face an issue: water levels are not high enough. This drought can be attributed to low rainfall. There has not been sufficient rainfall since late August.
The Mississippi River serves as the means of transportation for 60% of the nation’s foreign-bound corn and soybeans, which has an economic implication of $17.2 billion. Iowa and Illinois are the country’s two largest producers of plant exports, using the Mississippi as a necessitous means of export.
In 2016, Iowa’s corn exports via waterways produced 261 jobs, $133 million in economic output, and contributed $18 million to the nation’s GDP.
The Mississippi’s water levels are low enough that barges are getting stuck on the streambed and cannot transport the goods they possess. Over 2,000 barges are delayed and on pause due to the water levels.
How can companies combat this issue?
PV economics teacher Philip George states, “As the barges get stuck, this slows the transportation of goods and increases business costs as they have to deal with delays. They can change the mode of shipment to freight or air travel,” he stated. “Each has its own unique issues or costs depending on what is being shipped. Or they may just slow production rather than take on the increased costs or issues of other modes of transportation.”
Other modes of transportation are significantly more costly, meaning the profit margins will decrease. This will diminish the incentive of profit and drive costs up for farmers and producers, possibly causing them to go out of business.
“This would have impacts on both regional economies and then by extension the national economy as well due to it slowing the movement of both final goods and intermediate goods, which will impact the production of other products,” George continued.
As the extreme drought continues, consumers can expect an increase in prices at the grocery stores and possible extended wait times for specific products at a local and national level. The only expeditious solution in sight is increased rainfall.