U.S. Drought Lowers Mississippi River Levels, Disrupting Food Exports & Increasing Barge Rates

The Mississippi River, the largest river system in North America, is experiencing extreme drought conditions, disrupting U.S. food and energy exports.

The Ohio River basin’s reduced water levels, worsened by dry weather, have increased barge costs and heightened risks for cargo shipments.

According to a hydrologist at the Lower Mississippi River Forecast Center, David Welch, the river’s water levels are extremely low at this time of the year. Welch further cautioned that the barge and shipping industry should be careful of the draft and load on barges to prevent them from running aground.

Rates in the area between Minneapolis-St. Paul and St. Louis increased to $34.15 per ton for August 27, 2024, a 19% increase from the previous week.

St.Louis rates increased to $24.62 per ton, a 17% increase. These growing expenses are impacting the transportation of essential items.

The drought is especially concerning for U.S. soy and grain producers facing limitations on barge drafts and vessel tows.

The Soy Transportation Coalition executive director, Mike Steenhoek, stated that while the Mississippi River levels are still higher than last year’s low, the drought reflects how extreme weather can risk crucial waterways.

The ongoing drought, with disruptions like the day-long Canadian railroad strike, threatens farmer profitability and contributes to increasing global food prices.

The lower water levels harm agriculture and the transportation of crude oil and petroleum products.

Pipeline expansions have reduced the amount of oil transported by barge over the last ten years, but last year, just 36,000 barrels were transported to the Midwest and Gulf Coast, compared to 80,787 barrels in 2013.

The drought also poses a threat to drinking water supplies.

The river’s reduced flow does not produce sufficient force to prevent Gulf of Mexico seawater from contaminating Southeast Louisiana’s water supplies.

The Army Corps of Engineers plans to build an underwater barrier for the third consecutive year to prevent saltwater intrusion.

Due to a lack of rainfall, Welch predicts that water levels will remain low or worsen in the coming weeks.

The U.S. drought monitor reports that areas of West Virginia and Ohio are experiencing extreme drought, while regions like Indiana, Kentucky and Pennsylvania are experiencing abnormal dryness.

The drought is also impacting states along the lower Mississippi.

Reference: Bloomberg, Reuters

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