Mississippi River low water levels cause $20B damage and economic loss

AccuWeather Global Weather Center - October 21, 2022 - The total damage and economic loss caused by the Mississippi River’s historically low water levels and related supply chain impact are estimated to be around $20 billion, according to AccuWeather.

The losses will represent a significant negative impact on the economy at a time when the country and global markets are already facing high inflation and grave financial hardship driven by a possible recession, ongoing supply chain issues and the pandemic’s lingering domino effect.

The Mississippi River is a key transit corridor for a wide variety of commodities, such as soybeans, corn, wheat, fuel oil, corn, crude petroleum, sand, gravel, limestone, and salt.  Manufactured products, such as tires, may also be impacted with increased costs and reduced supply.  Commerce on the Mississippi River accounts for 92 percent of the country's agricultural exports, 60 percent of all grain exports and 78 percent of feed grains, soybeans and livestock exports.

AccuWeather’s preliminary forecast considers a variety of direct and indirect impacts, including increased costs to consumers as prices increase for various crops and commodities, increased transportation costs, job losses, shipping delays and other negative impacts on the economy.

As AccuWeather has been reporting, the Mississippi River is a crucial waterway for commerce that has seen a steady decline in its flow in recent months due to a lack of rain. A river gauge at Osceola, Arkansas, 35 miles north of Memphis, Tennessee, reported a water level of 8.8 feet below what is considered ‘low stage’ on Wednesday, Oct. 12, the fourth-lowest water level at the location since record-keeping began in 1927.

The crisis involving commerce caused by the record low water levels likely looms for months to come. AccuWeather expert meteorologists do not expect any significant change in historically low water levels in the Mississippi River through the end of the year with prospects for improvement early in 2023.

According to AccuWeather, while there can be rain and snow at times through the end of the year, especially along the northern part of the Mississippi basin, it is expected that the precipitation will be spread out such that a period of precipitation may occur followed by several days of dry conditions.  This can result in some increase in water levels for a brief time, but the expectation is that the water levels can fall back again during drier time periods.

As we move into January 2023, AccuWeather experts see signs of a changing weather pattern across the Mississippi basin with better chances for more frequent precipitation and perhaps episodes of heavier precipitation.  At times, a more active southern branch of the jet stream may develop, enabling moisture to be drawn northward from the Gulf of Mexico, enhancing precipitation.

AccuWeather meteorologists expect that over time, this pattern change can result in lasting improvements in water levels along the Mississippi.

At least eight barges ran aground earlier in the month due to the low water levels and the risk of barges getting stuck continues to rise with each passing day as the water level continues to fall, putting additional stress on the shipping and barge traffic that rely on the largest U.S. river for transportation.

Barge transport of these commodities is one of the most cost effective and perhaps the most environmentally conscious shipping options available. The reduction in barge availability will result in more trucks and increased rail loads, perhaps creating bottlenecks impacting the timely transport of needed goods, increased costs that consumers pay for these goods, while simultaneously increasing truck traffic and carbon emissions.

While the most recent major impact has been related to the southbound transport of grains and other crops down the river on barges, delays in corresponding upriver shipments of materials, such as metal-making materials used in manufacturing operations further north along the Mississippi, can be an increased concern in months to come.

Europe has also faced similar negative economic impacts with diminished water levels on key rivers, such as the Rhone River, reaching historically low levels this summer because of extreme heat and widespread drought.