Regional supply-chain impacts of Mississippi River fertilizer shipments disrupted by climate change.

Abstract

The Mississippi River commercial navigation system faced unprecedented challenges in 2022-2023 due to severe heat and drought disrupting barge traffic. This caused a 400% surge in barge rates, disproportionately affecting the delivered price of key commodities. Our study analyzes the compound impact of low water levels and two potential additional sources of supply-chain disturbance-lock damage and import disruptions-both of which can also emanate from climate change. We combined an empirical analysis of the effect of low water levels on barge rates and productivity with a computable general equilibrium model to estimate their effects on the US economy and Upper Mississippi regional economy. These disruptions notably decreased GDP and increased inflation, especially affecting the five Upper Mississippi River states. This research underscores the river's vulnerability to compound disruptions and highlights its crucial role in regional and national economies.