Drought a growing problem for farmers, businesses

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

When considering the most complex concerns demanding headlines in 2022, Tom Heinold of the US Army Corps of Engineers offered a simple solution for average Iowans to help overcome both supply chain and inflation headaches. “Pray for rain,” the chief of operations for the Rock Island District advised while pointing to a major contributing factor for both menaces. With Iowa among the Midwestern states experiencing a drought for the third straight year, the Mississippi River has dropped to historically low water levels south of St. Louis – and below the 89-year-old lock and dam system Mr. Heinold helps maintain to keep the Upper Mississippi navigable to commercial traffic. Tim Hall of the Iowa Department of Natural Resources explains the lack of rainfall since 2019 feeding into the Mississippi – and even more so its 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. The DNR’s coordinator of hydrology resources was part of a webinar recently where a comparison of Mississippi River levels was made at Memphis, Tennessee. “If you compare the water level of the river in 2019 during the flood – when the water was at its highest – to the exceptionally dry conditions there today when the water is at its lowest, the difference between those two water levels is 60 feet,” Mr. Hall said. “That’s a lot of water.” Because of the lock and dam system, the navigation channel from St. Louis north remains at a consistent depth, Mr. Heinold said. However, on the unregulated river downstream, the current lack of water flow is “not allowing them to run tows that are as wide, or as long or as deep,” as barge companies would like, Mr. Heinold added. “They load what they think they can get through on the lower river, which is making them take more trips and not be as efficient.” That in turn is leading to a growing problem for everyone from consumers to Iowa farmers to Cedar Rapids/Iowa City industries such as ADM and Cargill. “I can’t imagine what it must be like to be a corn producer if you're getting your fertilizer products on barges coming up the river, and you've already paid a ton more this year than you're used to paying,” Mr. Hall said. “What's next year going to look like? It's a bit of a scary proposition for them. And then in turn, how are they moving their product?”

Drought’s far-reaching impact

DeAnne Bloomberg grew up in the 1970s and ’80s on the Eastern Iowa family farm where her brother still works. She also can speak to the root of the problems facing farmers today as the director of issues management for the Illinois Farm Bureau. “Ag producers have continued to deal with a wide range of supply chain issues since COVID started,” Ms. Bloomberg said. “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.”

Crop yields in Eastern Iowa and Western Illinois were good despite the drought, Ms. Bloomberg and Mr. Hall agreed. “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,” Ms. Bloomberg said. “We’re getting by these days with less (rain). But with that comes increased costs, too.” Ms. Bloomberg added now is too early to put a dollar figure on the drought’s impact, but farmers already hard-hit by rising production prices are further impacted by those increasing distribution costs. “When they start doing some analysis of year-end numbers, the biggest piece we’ll go back to is just that fuel cost,” added to product delivery and pickup, and in running farm machinery, Ms. Bloomberg said. “If you're trucking it (out now) 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, 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. And that complicates matters for large water users such as livestock farmers and industrial factories, where drilling deeper for water is not an option. “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. 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.” Among those impacted by the drought are two of Linn County’s biggest employers. “If you're ADM or Cargill, and you rely on ag products as a feedstock for your business – if the corn production isn't what it should be, that's going to affect your business, either through higher commodity prices or a shortage of grain products,” Mr. Hall said. “It's one thing to say we can get all the water we want from 1,000 feet underground, but if we can't get the raw product from the agricultural community, that could have an impact.” Continued supply chain challenges also lead to increased shipping costs that impact everyone, too. For instance, ADM houses fertilizer through Alter Logistics, a Quad Cities-based business operating river terminals in St. Paul, Minnesota, and Rock Island, Illinois. Alter loads and unloads Mississippi River barges at both sites, as well as offering shipping and receiving via trucks and railcars. Alter also stores commodities for companies such as ADM, which is the only tenant for the new 40,000-ton fertilizer warehouse Alter recently added in St. Paul. Among the other products handled by Alter are a variety of metals for mills and foundries. Alter also amasses salt for the Iowa Department of Transportation and area municipalities to treat icy roads in the winter. “The fertilizer (inventory) is OK. I won't say it's typical because it's been moving out a little slow, but the buildings will be full,” for the winter, said Tom Streight, vice president of sales and marketing for Alter. “But some of the other commodities? We missed out on some salt this year because of the lateness of the season and low water. 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 (companies) 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.” With most barges carrying between 1,500-1,600 tons, Mr. Streight estimates Alter has missed out on receiving between 10,000-20,000 tons of material since August – and that translates into between $500,000-$750,000 of gross revenue lost as commercial shipping on the river wraps up in late November and early December. River traffic begins again in late February or early March, depending on the weather.

Other problems growing

October was a double whammy, Mr. Hall said. Not only was it the 15th driest month on record in the state with a deficit of 1.80 inches of rainfall, but it also marked the ninth month in 2022 with below-average rainfall across Iowa, with March being the lone exception. The winter months also tend to be the driest in Iowa, so Mr. Hall compared the state’s current dilemma to a baseball team being behind by several runs and looking to the end of the batting order to mount a comeback in the bottom of the ninth inning. “It’s not impossible,” Mr. Hall said, “but it is unlikely.” Mixed with below average precipitation in 2020 and 2021, this year’s mounting deficit threatens water recreation in 2023, Mr. Hall said. For instance, parts of the Cedar River this fall already revealed sandbars not previously seen by locals – and that potentially impacts everyone from boaters to fishers and even campers hoping to do one or both activities. “I actually have a few reservoirs (statewide) primarily built for flood control,” Mr. Heinold said. “But they're also built for low-flow augmentation. Saylorville Lake, which sits (11 miles upstream of) Des Moines is actually more than two feet below its conservation pool and falling." Coralville Lake is another reservoir operated by Mr. Heinold and the US Army Corps of Engineers. The artificial lake was formed in Johnson County in the late 1950s by the construction of the Coralville Dam on the Iowa River upstream from Iowa City. The adjacent Lake Macbride is affected by the Coralville Lake Reservoir, and the combined area is one of the state’s top recreational destinations. Swimmers are among the thousands of pleasure seekers on the beaches of those lakes each summer. So far, both lakes have withstood drought conditions to maintain their conservation pools, Mr. Heinold said. “But if this drought persists much longer, and the inflows continue to drop, we could be in the same situation at Coralville, Red Rock and several of the other reservoirs in the state,” Mr. Heinold warned. Ironically, 2018-19 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. For a thorough review of Iowa’s water resource trends, go to iowadnr.gov/watersummaryupdate. “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.”