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NEWS RELEASE

04-25-01

Contacts:
Phillip Baumel, Economics, (515) 294-6263
Teddi Barron, News Service, (515) 294-4778

CLOSED MISSISSIPPI RIVER EXPECTED TO HAVE MINOR IMPACT ON IOWA'S AG ECONOMY

AMES, Iowa -- Stalled barge traffic on the flooded Mississippi River has slowed grain exports, but is not expected to have a major impact on Iowa's agricultural economy, says an Iowa State University economist.

Even though grain elevators are experiencing the pinch of interrupted transportation, farmers won't be effected unless the flooding persists beyond another two weeks, said Phillip Baumel, who is Charles F. Curtiss Distinguished Professor in Agriculture in the economics department.

"With the Upper Mississippi River closed from Keokuk north, Iowa is effectively shut off from barge traffic. This is slowing grain exports and making it more difficult for river elevators to fulfill their export commitments," he said.

"Grain elevators are the big losers in all of this," Baumel said.

Exporters have other options for transporting grain to New Orleans, however. "They can move their grain by rail to St. Louis or to the Illinois or Ohio rivers, or ship direct to New Orleans to fulfill their export contracts," he said.

Because it's the planting season and grain prices are low due to low exports, farmers are not selling much now, he said.

"Many of the river elevators are closed because of the flooding," Baumel said. "Farmers and country elevators who are selling now can expect to receive about two cents per bushel less for their grain because processors are receiving more offers to purchase grain than they need."

Should floodwaters persist, however, farmers statewide could face a shortage of both dry and liquid fertilizers, Baumel said. Some anhydrous ammonia comes up river on pressurized barges.

"The fertilizer warehouses are probably full or near full now and there are other methods of delivery in place for both dry and liquid fertilizer," he said. "There shouldn't be a problem unless the flood lasts more than a couple of weeks."

Up to 25 million bushels of corn, soybeans and wheat for export are carried on the Mississippi River each week. Other major products transported on the river include chemicals, fertilizer, coal and some petroleum.

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