MEMPHIS, Tenn. — The Mississippi River hit an all-time low Monday, dropping to -10.76 feet.
And as the river’s water level’s drop down, Memphians should expect the price of every day items to go up.
“Low water levels impede the flow of goods, and anything that does that disrupts the supply chain,” says Dr. John Gnuschke of 901 Economics. “If anybody's been watching anything about inflation, they know one of the critical variables with inflation has been a broken supply chain.”
Dr. Gnuschke, who also spent 44 years as a research director for the University of Memphis, said the Mississippi River’s record-low water levels could immediately raise prices at area stores.
“Because the river has been falling for quite some time,” he said. “Stores anticipate price increases. So they try to pass those costs on to consumers as soon as possible.”
Monday morning, the river was at -10.35 feet. By 3 p.m., it was down to -10.76 feet, reaching lows it hasn’t seen in over 30 years.
A low river that normally carries 60 percent of America’s corn and soybean exports means everyone will be paying more as farmers choose alternate – and often more expensive ways to ship.
“In almost every case those alternatives are higher priced,” Dr. Gnuschke says. “They cost more. You can ship by rail but rail has a higher price than a barge.”
The same goes for Memphis retailers.
“Restaurants and grocery stores because restaurants frequently use beef,” said Dr. Gnuschke. “And beef is a product that's in fact, fed a lot of corn.”
Dr. Gnuschke said that until the river gets more water upstream, nothing is going to change downstream.
“We know that as long as the river stays low, and it could well stay low through spring,” he said. “It impedes the supply chain and that impacts prices.”
In early October, the U.S. Coast Guard reported more than 2,000 barges were in a queue to float through stretches of the Mississippi River near Memphis and Vicksburg, Mississippi, where traffic jams developed.