Flood Damage Ripples Through Economy

Few sources have put forward firm estimates of the total cost of the ongoing flooding on almost all major river systems, not to mention farmers’ fields. In April, the weather website Accuweather ventured a guess of $12.5 billion total damage to date. That estimate included damage to homes and their contents, to businesses, crop and livestock losses, drinking water contamination, and other costs. It did not include the costs of shipping diversions.

Debra Calhoun of Waterways Council Inc. has called the impacts of the floods and river closures (plus tariffs) a “quadruple whammy” for farmers: they couldn’t get fertilizer to their crops, couldn’t plant flooded fields, and couldn’t move their products downriver.

Fertilizer shipments were disrupted by the flooding and river closures since early in the year, forcing some farmers to resort to more expensive trucks to bring in fertilizer. “Without the ability to move things on the river, we are quite handicapped,” Kathy Mathers, director of the Fertilizer Institute, told The Waterways Journal. She said it was “too soon” for a dollar estimate of impacts to her industry but added, “We do well when our customers do well.” Fertilizer suppliers must anticipate that farmers will plant, yet some will take insurance or aid payouts instead. However, Mather did say that investments in several large domestic fertilizer plants have left the sector better able to cope with the floods.

According to Mike Steenhoek, executive director of the Soy Transportation Coalition, there are as yet no reliable estimates for the amount of flood damage to grains already in bins from last year’s huge harvests.

Corn planting was 83 percent complete, thanks to several days of dry weather, according to the USDA. That’s 16 percentage points behind last year and the five-year average of 99 percent. As of June 9, 62 percent of corn was emerged compared to the five-year average of 93 percent.

Soybeans have taken the biggest hit, both from the weather and from the tariff wars. On June 10, the USDA reported that soybeans were 60 percent planted, well behind the 88 percent of the five-year average, and 34 percent were emerged, compared to the 73 percent five-year average. The loss of topsoil washed away in key growing areas will take years to restore.

On June 10, the National Oceanic and Atmospheric Administration predicted—based on models and data gathered so far about the floodwaters—that this year’s “dead zone” in the Gulf of Mexico could set a record. U.S. Geological Survey data indicates that in May alone, 156,000 metric tons of nitrates and 25,300 metric tons of phosphorus were carried into the Gulf by the Mississippi River.

Gulf fishermen are already seeing the effects not only of direct Mississippi River flooding, but of the Bonnet Carré Spillway releases sending more freshwater than usual into Lake Pontchartrain. In April, the Gulf shrimp catch was down 63 percent compared to the five-year average, the blue crab catch was down 45 percent, and oysters were down 89 percent. Several fish species have also seen major declines. Louisiana Gov. John Bel Edwards said the state will apply for disaster recovery aid that could compensate fishermen.

On June 5, Congress finally passed a comprehensive $19 billon relief bill. It’s a big basket that addresses more than just flood damage;  it includes more than $3 billion “for necessary expenses related to losses of crops … as a consequence of Hurricanes Michael and Florence, other hurricanes, floods, tornadoes, typhoons, volcanic activity, snowstorms, and wildfires occurring in calendar years 2018 and 2019 under such terms and conditions as determined by the Secretary.” Puerto Rico received $300 million for its ongoing recovery costs from Hurricane Maria in 2017.

It’s an important start. But the total costs from the flooding alone are sure to climb into the tens of billions of dollars. In Nebraska, one of the hardest-hit farm states, the cost of rebuilding flooded Offutt Air Force Base alone is estimated to reach $420 million.

One positive outcome of the flooding is that it’s breaking the Beltway news bubble. Major news outlets are running favorable and fair stories about the flood damage across the heartland, including the damage to barging and its importance to transportation. The flood of 1993 and the media attention it generated resulted in hundreds of millions of dollars’ worth of improvements to levees that have helped keep this year’s flooding from being even worse.

Let’s hope that public opinion will be mobilized to support the further relief and reconstruction spending that will be necessary.