December 5, 2012 7:18 pm

Low water levels threaten US farm goods

A barge powers its way up the Mississippi River Friday, Nov. 16, 2012©AP

A barge on the Mississippi river

Grain and petrochemicals worth billions of dollars risk being marooned far from market, barge operators and grain exporters have warned, as falling Mississippi water levels threaten to close the river to navigation.

Operators of river barges, which move down the vast river in huge “tows” of 30 or more lashed barges, have joined with agriculture groups to demand that US President Barack Obama take action to maintain navigation on a crucial, shallow stretch 200 miles long between St Louis and Cairo, Illinois.

More

On this topic

IN US Society

The low water levels result from a combination of reduced rainfall during this year’s record-breaking Midwestern drought and the actions of the US Army Corps of Engineers, which operates dams controlling the river system. The corps has followed its seasonal practice of reducing water flow at several dams on the Missouri despite the problems downstream.

Experts expect governments to be faced with challenges such as the drought as global warming makes extreme weather more common.

The low water is already affecting traffic and operators’ ability to fulfil their end-of-year role of bringing Midwestern farmers’ harvest of grain, soyabeans and other commodities to the US gulf coast, according to Rick Calhoun, president of marine operations for Cargill, the commodity trader.

Mr Calhoun, who operates Cargill’s fleet of 1,500 barges, said vessels being loaded on the coast to carry commodities upriver were being loaded to only around a 7ft (2 metres) draft, draught, than the normal 9ft, reducing capacity by 400 to 1,100 tonnes. Barges were also operating in tows of 15 rather than 30.

Interactive graphic: US drought

Cornfield

View the effects of the extreme drought faced in the US heartland in our interactive graphic.

Navigation could come to a halt altogether, however, by December 22 if water levels keep falling at the current rate of about 1ft a week.

That would leave around $3bn of agricultural products alone and $2bn of oil products trapped, Mr Calhoun said. “There’s an estimate; it’s about $7bn worth of products which are going to grind to a halt here.”

At the heart of the problems is a trade-off between water users upriver in the Missouri and the Mississippi’s navigational needs. The corps of engineers reduces the flow of water through the Missouri dams starting in November each year to build up water supplies for irrigation and generating hydroelectric power.

While the reduced flow normally leaves ample water for the Mississippi’s tens of thousands of barges to carry Midwestern commodities to the coast, this year’s drought has reduced the river’s ability to withstand the operation.

The Waterways Council, which represents inland barge operators, and agriculture groups have demanded that Mr Obama order emergency water releases from the Missouri dams.

They also want the army engineers to speed up work to blow up rock pinnacles on the river bed near Troy, Illinois, that are the biggest single obstacle to navigation. The work has been brought forward to start as early as January, if the corps can find a suitable contractor in time.

The agriculture coalition warned in a letter to the White House that a halt to navigation would not only stop exports but prevent fertiliser from being brought upriver.

“The Mississippi river ‘superhighway’ is essential to US agriculture, serving as the primary means for transporting essential agricultural inputs, such as fertiliser, and providing access to domestic and international markets for US farmers’ production,” the coalition wrote.

The National Grain and Feed Association, which represents companies that handle 70 per cent of US grain, warned that the problems of moving grain could depress farm gate prices. Richard Feltes, vice-president of RJ O’Brien, a commodities broker, said price premiums had been rising for grain bought along the unobstructed Ohio river compared with grain delivered upstream of the obstructions.

Mr Obama faces competing pressures, however. Politicians from North and South Dakota, Kansas and Montana have written to the president to demand that the engineers continue to restrict the Missouri’s flow.

Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

NEWS BY EMAIL

Sign up for email briefings to stay up to date on topics you are interested in

Enter job search