“The Mississippi Delta was shining like a national guitar; I am following the river down the highway ... Through the cradle of the Civil War.” — from “Graceland” as performed by Paul Simon
Recently I crossed the Mississippi River by car at Vicksburg. The river was nearly topping its banks.
We stopped at the Mississippi Welcome Center, stood in the misty, morning air, high above the river, sipped our complimentary coffee and read the Civil War historical marker commemorating Grant's siege of Vicksburg. That Americans had lived underground for months right below our feet to avoid cannon fire from other Americans on the river's opposite side in 1863 was difficult to comprehend. The volume of swirling, angry water below us racing southward was equally difficult to fathom.
The Missouri River, the longest in North America, has flooded recently, causing historic damage. Levees have broken throughout the Midwest. Estimates of crop loss in Nebraska approached a billion dollars some weeks ago. The Missouri empties into the Mississippi near St. Louis, so high water upriver causes more extensive flooding further south. Record snowfall has also impacted the Illinois and Ohio Rivers. A rainy spring will bring more flooding.
The economic ramifications of flooding are difficult to calibrate, but significant nonetheless. First, there is damage to crops and livestock. At this writing, I-29 in Iowa remains closed. Trains must utilize alternate routes. Rural roads are impassable. Bridges are damaged. Many farmers plant in spring and depend on overland transportation and barge shipments traveling upriver to deliver fertilizer. All of these connections are being disrupted. Crops and livestock must be transported to market eventually, so the route disruptions hurt farmers coming and going.
Some neighborhoods will be abandoned, as floodwaters ruin residential areas. Many businesses will close. The financial fallout is similar to a natural disaster like a hurricane or tornado, but with a much, much wider geographic scope and with national and global economic impact. During the Great Flood of 1927 an area the size of Scotland was flooded as the Mississippi overflowed its banks. Six states and 27,000 square miles were inundated. The Flood Control Act of 1928 soon followed, legislation which heightened and lengthened levees along the river.
The American Midwest is the largest contiguous body of farmland in the world, and it’s connected to oceans and the Gulf of Mexico by a massive system of rivers and manmade waterways. Because of it, we largely take food security for granted, something many nations cannot do. The crops and livestock grown there satisfy domestic and global food needs. When Omaha, Nebraska sneezes, Paris, France catches a cold. The impact on food prices, jobs and the economy remain to be seen, as does the extent of the flood damage to one of our most productive regions.
Margaret R. McDowell, ChFC, AIF, author of the syndicated economic column "Arbor Outlook," is the founder of Arbor Wealth Management, LLC, (850-608-6121 — www.arborwealth.net), a “fee-only” registered investment advisory firm located near Sandestin. This column should not be considered personalized investment advice and provides no assurance that any specific strategy or investment will be suitable or profitable for an investor.