Skip to comments.Drought Forces An 11 Mile Section Of The Mississippi River To Be Closed
Posted on 08/20/2012 8:21:38 PM PDT by blam
Drought Forces An 11 Mile Section Of The Mississippi River To Be Closed
Aug. 20, 2012, 6:29 PM
The devastating U.S. drought has been causing water levels to fall in the Mississippi River.
The AP's Adrian Sainz reports:
Nearly 100 boats and barges were waiting for passage Monday along an 11-mile stretch of the Mississippi River that has been closed due to low water levels, the U.S. Coast Guard said.
New Orleans-based Coast Guard spokesman Ryan Tippets said the stretch of river near Greenville, Miss., has been closed intermittently since Aug. 11, when a vessel ran aground. ... Tippets said it is not immediately clear when the river will re-open.
The Mississippi River is a crucial trade route for coal and agricultural goods. Low water levels had already been disrupting trade flows due to bottlenecking along the river.
(Excerpt) Read more at businessinsider.com ...
Many people may not be aware just how bad this hurts the economy. A huge chunk of American goods travels along the Mississippi and the branching rivers from it, deep into the heartland of flyover country and through canals into the Great Lakes.
Estimated 300 million bucks a day lost when you can’t transport by barges when the river is “down” like today.
Russ Winter, Wall Street Examiner
Aug. 19, 2012, 11:30 PM
The buzz now is that transport on the Mississippi River is facing greater expense, delay and disruption. Increasingly the Mississippi is a one-way river as barges heading north have to wait for traffic headed south, adding to the costly delays. The big issue relates to the use of ports (see video). The river itself resembles a clogged artery.
In the U.S., 60 percent of grain, 22 percent of oil and natural gas and 20 percent of coal travels down the river. If the Mississippi River is closed to water traffic, these goods will need to be transported by truck or train costing the U.S. an additional $300 million per day. Even if temporary, this would be disruptive to critical re-industrialization ;supply lines. MSNBC has a through article about this. NOAA has a stream flow projection (28 day forecast for each station) that suggests the river will gradually drop an additional two feet through mid- September based on current rainfall forecasts.
Image source: NBC Beyond the CHK blow-up potential, it also seems the markets may not be taking into account the impact of the drought on fracking operations. Delays are already being reported and the cost of water is heading much higher, adding to expenses (CNN: Drought Hurting Oil Fracking Production). Fracking uses 4.5 million gallons of water per well. Just one more reason to back away from any bullish speculation right now in this sector.
If you are thinking the strange weather is transient, according to Professor Marco Tedesco of the Cryosphere Processes Laboratory, at The City College of New York, the cumulative melting index for the entire Greenland ice sheet on August 8th surpassed the record value that was set in 2010 for the entire melt season, which normally ends in early-mid September.
China Daily reports the wholesale prices of 18 types of vegetables in 36 cities rose for the fourth consecutive week, up 2.9 percent week-on-week and 15.4 percent cumulatively over the past four weeks. Last week, the retail price of eggs rose 1.1 percent from a week earlier, but remained down 5.2 percent from the same period last year. The price of pork, a staple meat in China, rebounded 0.4 percent from a week earlier, the ministry said. Food prices account for nearly one-third of the prices used to calculate Chinas consumer price index
A time lapse chart showing Fed taking over bond market. It is hard for me to envision that the Fed owns much of anything in the way of bargains since almost everything was bought during the last three years of low coupons. Does this seem like a well functioning system (sistema)? They are trapped.
The “good” news is that there’s hardly any grain to move downstream.
The bad news is that there’s hardly any grain to move downstream.
Nothing new to those of us, who grew up next to the river. Read Mark Twain’s Life on the Mississippi, one of my favorite books.
Well, one could always leverage this into a profit potential - by buying rail stocks.
The current USDA projection, which could still change, is that we will still have the eighth largest corn harvest on record. That's due to two factors. The ethanol buildup has led to a LOT more corn being planted. Three months ago, when USDA was projected an all-time record, about 40% of the U.S. crop was expected to go to ethanol. Absent ethanol, that corn would not have been planted in the first place. The production base is much larger, which is mitigating the drought impact. The drought is bad and prices will be high this year, but there is still a lot of corn out there.
Secondly, precision farming and biotech have dramatically increased yields. The trend is 166 bushels an acre. The drought has slashed that back to a current projection of 123. That's a huge loss -- but 123 would have been a record yield a generation ago, and would be a record in much of the world today. (China is the world's number two corn producer, and it gets yields in the mid 80's.) Farmers will tell you that if they were planting the same seed they were 15 or even 10 years ago, we would be facing a real disaster. Biotech has made a big difference. The experts will spend some time debating how much.