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A Sinking Feeling

January 26, 2013
p16 A Sinking Feeling2
Workers began removing 890 cubic yards of limestone from the navigation channel on the Mississippi River near Thebes, Ill., on Dec. 17. The rock is left over from blasting that occurred during the drought of 1988-89.  
 
 

Written by Nate Birt & Tyne Morgan

Farmers, shippers worry about commerce with low Mississippi River levels

As Mississippi River levels drop, it’s no wonder farmers are getting a sinking feeling. "It’s a Superhighway 101," says Steve Launius, a producer who grows wheat, soybeans and corn in Washington County, Ill., near the Mississippi River. Producers are using the river more now than 20 years ago because of international demand for U.S. agricultural products, he says.

The drought-stressed river is threatening to halt barge traffic, putting a vital infrastructure vein at risk. It hasn’t been this low since the winter of 1988-89. During that time, the Mississippi River shut down in the St. Louis area for nearly 30 days.

So far this year, the U.S. Coast Guard hasn’t closed the river. But sinking water levels pose a major threat to barge traffic because they expose rock pinnacles, a group of which are located near Thebes, Ill., south of St. Louis.

The U.S. Army Corps of Engineers is required to maintain a 9' channel depth for shipping. It hopes to meet that stipulation in part by removing the rock formations. While the Army Corps originally planned to do that by bringing contractors to perform blasting, further assessment revealed that mechanical removal would be the most effective and safest option. As the river drops, it’s a race against the clock.

p16 A Sinking Feeling

The shipping channel must be at least 9' deep and 300' wide for barges to travel safely.


"If you ground on sand, that’s a problem, but if you rip open on a rock, that’s a serious issue, so we want to make sure we can keep commerce moving safely," says Mike Petersen, spokesman for the St. Louis branch of the U.S. Army Corps of Engineers.

The rocks are left over from the blasting that happened during the 1988-89 drought. During that time, about 125,000 cubic yards of rock were removed from the river at Thebes and Grand Tower.

Pinnacle removal has gone better than expected, and the 10' deep channel of water is expected to facilitate shipping through at least the end of January, says Martin Hettel, senior manager of bulk sales with St. Louis-based AEP River Operations. Rain and snowfall in January contributed to the extra depth.

Each month, 8.8 million tons of agricultural goods and other products are shipped between St. Louis and Cairo, Ill.

"Economics is going to shut the river down," Hettel says. It would take 11,750 trucks per day or 3,000 rail cars per day to compensate for lost barge traffic, he says, and those quantities are impossible to achieve.

He thinks the Corps of Engineers should do more to help ensure the river stays open. One  suggestion from Hettel and farm groups such as the National Corn Growers Association is to release water from the Missouri River.

Petersen says it’s not that simple. "Once it’s gone, it’s gone," Petersen says. "We can’t guarantee that it’s going to get replaced by next year because right now, forecasts say we’re going to have below-normal precipitation. We have to be very careful with what we do with our water."

Hettel says nearly 10,000 jobs could be in jeopardy in Illinois and Missouri if river traffic grinds to a halt.

p16 A Sinking Feeling Chart 2

"Add to that the dependency foreign countries have on our export products," Hettel says. "The grain that the farmer moves to the Gulf to go overseas, they need that for food. If we’re not reliable and can’t deliver, will they go to other countries such as South America to get their grains?"

Getting products where they need to go and the cost of shipping are two top issues for Goat Patterson, president of Osage Marine Services Inc. The St. Louis-based shipping company transports agricultural goods such as grains and fertilizer, along with other products, up and down the Mississippi.

While river levels in mid-January sat at -1.6' below normal stage at St. Louis, they are projected to fall to between -6.5' and -7' in mid-February. If that happens, shippers will be forced to load even less cargo to keep barges from scraping the river bottom.

"It doesn’t look very promising at all," Patterson says.

For farmers, depending on the severity and duration, it’s possible the economic repercussions of a long river shutdown could be greater than those of Hurricane Sandy, says Paul Rohde, vice president of Waterways Council, Inc. for the Midwest area.

"We need to make the best of a bad situation and figure out a way to keep the river navigable for as long as possible," adds Veronica Nigh, economist with the American Farm Bureau Federation. Closing the river to barge traffic would likely raise prices for producers. Fertilizer, for example, would go up 10% to 15%.

Corn, soybean and soft red winter wheat prices along the river are being affected, with farmers seeing drops between 15¢ to 30¢ per bushel as grain elevators either run out of storage space or fear doing so, Nigh says.

In mid-January, the Mississippi River level at St. Louis was -1.6' below normal stage. It is projected to fall to between -6.5' and -7' below normal stage in mid-February, which
would represent a low-water record for that location,
according to National Weather Service data.


Normally, corn comprises 75% of the total grain carried on the Mississippi.

There is also concern that exporters who have already sold soybeans for January and March might have to pay extra to ensure shipments reach their destination via rail or truck. That won’t hurt producers who’ve already sold grain at pre-negotiated rates, Nigh says, but it will affect the bottom line for grain-exporting companies.

The solution. The ultimate fix is moisture. "Without significant and sustained rainfall, this isn’t going anywhere anytime soon," Rohde says.

A balanced approach is needed to maintain the river’s flow, adds Illinois farmer Launius. Removal of rock formations and releases of water from upstream are all options to keep the river open for commerce, avoiding devastating economic impacts for the region and the agriculture industry.

For additional commentary, including videos and photos, of the Mississippi River situation, visit
www.FarmJournal.com/mississippi_river

You can e-mail Nate Birt at nbirt@farmjournal.com.

 

p16 A Sinking Feeling Chart 1

 

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FEATURED IN: Farm Journal - February 2013

 
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