Drought a growing problem for QC businesses, farmers

When considering the most complex concerns demanding headlines in 2022, Tom Heinold of the U.S. Army Corps of Engineers offered a simple solution for the average Quad Citizen to help overcome both supply chain and inflation headaches. “Pray for rain,” the chief of operations for the Corps’ Rock Island District advised while pointing to the […]

When considering the most complex concerns demanding headlines in 2022, Tom Heinold of the U.S. Army Corps of Engineers offered a simple solution for the average Quad Citizen to help overcome both supply chain and inflation headaches. “Pray for rain,” the chief of operations for the Corps’ Rock Island District advised while pointing to the major contributing factor for both menaces.

With Midwestern states experiencing a drought for the third straight year, the Mississippi River has dropped to historically low water levels south of St. Louis, Missouri – and below the 89-year-old lock and dam system that Mr. Heinold helps maintain to keep the Upper Mississippi navigable to commercial traffic. Tim Hall, of the Iowa Department of Natural Resources (DNR), explains the lack of rainfall since 2019 feeding the Mississippi – and even more so the main tributaries of the Missouri and Ohio rivers – has choked off barge traffic this fall up and down the busiest of America’s inland shipping corridors. “If you compare the water level of the river in 2019 during the flood when the water was at its highest (at Memphis, Tennessee) to the exceptionally dry conditions today when the water is at its lowest, the difference between those two levels is 60 feet. That’s a lot of water,” said Mr. Hall, the DNR’s Geological & Water Survey bureau chief. Because of the lock and dam system, the local navigation channel remains at a consistent nine feet in depth, Mr. Heinold said. But downstream of St. Louis, the Mississippi is an unregulated open river, and the lack of water now is “not allowing them to run tows that are as wide, or as long, or as deep,” as barge companies would like, he added. “They load to what they think they can get through on the lower river, which is making them take more trips.”  Effects of the drought are felt in other ways locally, said Tom Streight, vice president of sales and marketing for Bettendorf-based Alter Logistics. The local company assists in shipping, receiving and warehouse storage via truck and rail but especially barge access to its two Mississippi River terminals in St. Paul, Minnesota, and Rock Island. Among the products handled by Alter are non-hazardous dry fertilizer for farming and a variety of metals – from aluminum to rebar – and other ferroalloys for mills and foundries such as Deere & Co. and Arconic. Alter also amasses salt for the local municipalities to treat icy roads in the winter. Mr. Streight said the challenges since August have included barges having trouble reaching Alter’s docks from the shipping channel.  As Mr. Heinold explains, because of the drought, the water is not as deep as it normally is close to the tailwater of a dam, especially at the entrances to marinas and docks. “The lowest we’ve gotten was 3.6 (feet) on the tailwater at Lock and Dam 15 in Rock Island,” Mr. Streight said. “Normally, we’re around six to seven feet and good operating depth is around five feet. So, we’re quite a bit lower and every inch matters. “If we can’t get a barge to the dock, it shuts us down. Typically, we have two barges at the dock at all times. We’ve gone probably a month and half where we could only get one barge in at the dock.” The problem also forced Alter to spend “tens of thousands of dollars” this fall, he said, for emergency dredging locally to remove sediments and other debris from the river bottom around the dock. Fortunately, the dredging company was already mobilizing for a Corps project locally, which Mr. Streight said cut down on the usual wait for that service.  In Minnesota, Alter operates on a slip with a 1,600-foot seawall, but a third of that remains unusable due to low water, he said. And with operations normally wrapping up before Thanksgiving, any dredging will wait until spring. “Typically, we have most of our commitments closer to port, but this has delayed a lot of commodities and materials coming up to us,” said Mr. Streight. “So, at Rock Island, we will be unloading after Thanksgiving and maybe through the first week of December if the weather cooperates. “Some of these barges that were delayed have been since diverted to other places – like St. Louis or the Illinois River — because they know they’re not going to make the cut off up here to get unloaded. And that obviously cuts into the bottom line — you’re spending money to keep your dock open, and then you’re not getting as many tons as you had expected.” With most barges carrying between 1,500 and 1,600 tons, Mr. Streight estimates Alter has missed out on receiving between 10,000 and 20,000 tons of material – and that translates into between $500,000 and $750,000 of gross revenue lost. “We missed out on some salt this year,” Mr. Streight warned, looking ahead to the usual late February/early March start of commercial navigation again in the area. “Some of the other commodities? The inventories (in our warehouses) are fairly typical just because we work on a fill basis. “So, I don’t know what kind of shortages you’ll see, if any, but obviously the freight transportation costs go up because they have to look to alternate means. Barges that aren’t coming to us, they’ll unload those somewhere else and they either have to truck them or rail them to their end destination. So, overall, it’s going to cost the general public more for different services.”

Other effects growing

Farmers already hard-hit by rising production prices are further impacted by those increasing distribution costs. “Ag producers have continued to deal with a wide range of supply chain issues since COVID started,” said DeAnne Bloomberg, director of issues management for the Illinois Farm Bureau. “Farmers continue to pivot and adapt, but then you combine it with inflation impacts and it starts to keep you on the edge of uncertainty. Some of these guys that started farming in the ‘70s and ‘80s are taking a look at it and going, ‘Oh man. How much more can I take?’” Crop yields in Eastern Iowa and Western Illinois were good, but far from record-breaking because of the drought, both Ms. Bloomberg and the DNR’s Mr. Hall agreed. “You’re always going to have pockets with low numbers, especially in a state as huge north and south as Illinois,” Ms. Bloomberg said. “But for the most part, farmers were pleasantly surprised by the harvest – and that’s because we have come so far in the technology of the seeds. We’re getting by these days with less (rain). But with that comes increased costs, too.” The Quad Cities area native added now is too early to put a dollar figure on the drought’s impact. “When they start doing some analysis of year-end numbers, the biggest piece we’ll go back to is just that fuel cost,” Ms. Bloomberg said. “If you’re trucking it or if you have to store the product on your farm (before going to market) — you’re going to keep that product at ideal condition, and that’s going to take additional costs.” Fortunately for Eastern Iowa and Western Illinois, the region ranks in the lowest classification in the latest U.S. Drought Monitor. Conditions are much more severe in Northwest Iowa, though, where access to groundwater is limited and wells are drying up, Mr. Hall said. That complicates matters for large water users such as livestock farmers and industrial factories. “So far, I’m not aware of businesses in Iowa that have had to cut back on industrial production because of lack of water,” Mr. Hall said. “But another dry year, you could start to picture a scenario where there are cutbacks. “A lot of water is used in industry for cooling or washdown or processing,” he added. “In Eastern Iowa, a lot of that water comes from deep underground, which really isn’t influenced much by surface conditions. So, if you’re pumping your water from 1,000 feet underground, it doesn’t really matter what’s happening at the surface. “But in places where water is coming from shallow groundwater sources or surface water -- those folks are going to have to think about scenarios for next year and what they would do if that actually came to pass.” October marked the ninth month in 2022 with below average rainfall across Iowa, Mr. Hall said. March was the only month with above-normal levels. Mixed with below average precipitation in 2020 and 2021, this year’s mounting deficit also threatens water recreation in 2023, he added. Everything from Mississippi riverboat cruises to private boaters on local lakes and rivers could be impacted, as well as the many small towns that depend on fishing for the local economy. Ironically, 2018-2019 marked the wettest two-year period in Iowa history – and yet three years later, Mr. Hall is helping develop a state-wide drought plan ready for use Jan. 1 if necessary. “There’s really not a lot of control that we have,” Mr. Heinold reiterated. “We’ve got all of this modern technology, but we’re still very much at the mercy of Mother Nature. “Hopefully this spring’s snowmelt and a little bit more moisture will alleviate the problem. But the price of moving boat goods along the river gets passed on to the farmers and that gets passed on to the consumers, so undoubtedly this is affecting our economy.”