How the Mississippi’s Low Water Level Impacts Inflation

By: James Flippin · October 19, 2022 · Reading Time: 3 minutes

Shipwreck’s Signals

Earlier this week, an 18th century shipwreck became visible along the banks of the Mississippi River in Baton Rouge, Louisiana. The ferry boat was likely used to move people and horse-drawn wagons from one side of the river to the other.

While the sight is certainly a curiosity, it illustrates how an ongoing drought is affecting the mighty river’s water level. In some spots, the level nears record lows. The stretch by Baton Rouge is at its lowest since 2012, threatening jobs and disrupting the local and national economy.

The Mercantile Mississippi

Beyond the curious image created by an old ship emerging from the river’s waters, the Mississippi’s low level is causing commercial chaos. The Coast Guard has had to put restrictions in place as barges have gotten stuck in the riverbed’s mud and sand.

It’s not just in Baton Rouge, either. In Memphis, the waterway’s level is at an all-time record low. The situation is similar to what’s been observed along Europe’s Rhine River and Asia’s Yangtze, following extended periods of drought.

For American enterprise, this is a particularly troubling situation. The Mississippi is a critical shipping route that’s used by commodity dealers and farmers alike. Some estimates say 60% of America’s soybean and corn exports travel along the Mississippi. If shipments are delayed, supplies fall, causing prices to rise.

Barges Bottoming Out

In a bid to avoid barges getting stuck in the muck, companies are loading less cargo onto ships. Fewer barges are included in each tow as well. The American Commercial Barge Line says this translates to a capacity reduction of somewhere between 17% and 38%.

Industry experts say this is a significant issue that has the potential to cause extended problems, similar to what was observed with the international supply chain in recent years. US consumers may be less likely to think about the Mississippi River and other inland waterways, but they’re of massive importance when transporting goods.

Low water levels have the ability to affect food producers, farmers, and other industries – as well as international consumers. Switching up an old adage: things will hopefully improve over time, so long as the creek does rise.

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