Jim Seida  /  MSNBC.com
Captain Bob Loyd pilots his fifteen barge tow carring 22,500 tons of corn and denatured alcohol downstream toward Lock 24.
By Martin Wolk Executive business editor
msnbc.com
updated 8/12/2004 3:30:39 PM ET 2004-08-12T19:30:39

Say what you will about the Mississippi, it is far from a lazy river. For more than a century, engineers have dredged, diked and dammed the river, turning the meandering 2,300-mile waterway into a marine superhighway humming with commercial activity.

A fleet of more than 500 powerful tugboats plies the muddy waters, hauling nearly 14,000 barges up and down the river road. Every year those barges are loaded and reloaded with more than 300 million tons of sand, gravel, coal, oil, iron, steel, fertilizer, soybean meal and other commodities.

But any discussion of the future of navigation on the Mississippi inevitably flows down to a single commodity: corn.

That is because in addition to draining a vast watershed encompassing 31 states and two Canadian provinces, the Mississippi is the primary pipeline from America’s Corn Belt to a hungry world. The river’s importance for international trade explains why corn growers are among the biggest proponents of a proposed $2.5 billion upgrade to the stairstepping system of locks and dams that allows giant floating cargo carriers to navigate the waterway.

“Just think of the efficiencies we can gain,” said Tim Burrack, who farms 2,000 acres of corn and soybeans in northeast Iowa, not far from the Minnesota border. Burrack has been pushing for improvements in the lock system forabout eight years — ever since the day he went to his local grain elevator and discovered there was a three-month wait to get his crop onto a barge. “It was almost like electricity to me,” he said of the river system. “You don’t think about it until you hit the switch and the light doesn’t come on.”

Of course the Mississippi is far more than a shipping route for farm products. The wide-open Lower Mississippi River, from St. Louis to the Gulf of Mexico, is an important two-way conduit for petrochemicals, crude oil and manufactured products, among other goods.

From its source at Lake Itasca to its outlet in the Louisiana Delta, the Mississippi River supports some 1.6 million jobs and $284 billion in annual economic activity, according to a study prepared for the U.S. Fish and Wildlife Service. Manufacturing is by far the biggest industry, but the river is also a vital resource for tourist activities, energy production, mining, commercial and recreational fishing and agriculture.

But on the Upper Mississippi, corn is king. The Mississippi is the exit route for half the nation’s corn exports and 40 percent of its soybeans, with the two crops together accounting for half the cargo hauled down the upper portion of the river.

Corps' plan: $2.4 billion overhaul
Traffic gets backed up as towboats make their way through a series of 27 locks and dams that keep the river navigable over the 700 miles from Minnesota’s Twin Cities to St. Louis. Because many of the locks are too short to handle the typical 1,100-foot-long barge caravans, the towboats have to go through twice, disassembling the barges on one side and reassembling them on the other. Waits of more than three hours are typical at some locks.

The best solution, according to a U.S. Army Corps of Engineers draft report issued in May, would be to build seven new 1,200-foot locks, extend five others and make other minor changes at a cost of $2.4 billion over 30 years. The problem is, the plan only makes economic sense if river traffic increases over the next 50 years, as the Corps forecasts.  If traffic remains steady, no action is needed beyond regular overhauls that keep the locks operational, the Corps said in its 656-page draft report.

Traffic on the Upper Mississippi and related Illinois Waterway peaked in the 1990s and has been flat to lower in recent years. And several academic panels that have studied the Corps’ river traffic projections in recent years have concluded they are overstated.

Slideshow: Ride a barge through Mississippi locks “The grain trade is not really expanding much,” said John Beghin, professor of economics at Iowa State University. “In that context it’s very hard to justify major investments in new large-capacity locks.”

Beghin advised a National Academy of Sciences panel that is due to issue an assessment of the Corps’ proposal by early September. A preliminary report by the panel said the Corps’ projections of rising grain exports were “inconsistent with the past 20 years of relatively steady export levels.”

Corn growers pin their hopes for rising exports on a growing market in China, which is expected to require more grain as its citizens grow wealthier and improve their diet. And U.S. domestic demand could rise because of increasing use of ethanol, the corn-based gasoline additive. But even as global demand grows, there is rising competition from new suppliers led by Brazil and Argentina, which are rapidly improving their roads and river systems.

Corn economy's vicious cycle
Opponents of the lock project point out that forecasters have repeatedly — and inaccurately — predicted increasing barge traffic over the past 15 years. Farm leaders long have promised that corn growers would “export their way to prosperity,” said George Naylor, an Iowa farmer and president of the Family Farm Coalition.

“We think it’s very obvious that the lessons learned in the Great Depression should be incorporated into farm policy,” Naylor said. “When prices go down, farms can’t downsize by cutting employees. So all they can do is increase production, and prices go lower. It’s a downward spiral.”

Sure enough, corn production has gone from about 6 billion bushels in the 1970s to nearly 10 billion over the past decade, largely because of skyrocketing yields. Yet the market price for a bushel of corn has averaged a little over $2 a bushel over the past decade, roughly the same level as in the 1970s.

“Conventional farming is economic folly — and I’m part of it,” said Sever Peterson, a third-generation corn farmer in Eden Prairie, Minn. “I’m not sure those locks and dams benefit me one iota.” He said that even if a smoother transportation system boosts the price for growers by a few pennies a bushel, that is hardly a guarantee that corn growers will be able to make a decent living, given the vast global forces that set the price of grain.

Others argue that an updated infrastructure gives the United States the competitive advantage of being able to deliver its product more reliably than foreign competitors.  And the lock improvements would benefit many other industries besides farming, allowing building materials, for example, to move more quickly to and from Chicago.

Christopher Brescia, president of a pro-locks coalition known as MARC 2000, argues that river traffic forecasts are hardly relevant, pointing out that the project would create 3,000 construction jobs in the region for 15 years, and thousands more indirectly.

“We don’t believe that any model will ever be developed that can replicate and consider all market variables affecting traffic movements on the Upper Mississippi or any other inland waterway system,” he said in congressional testimony this year. “Eventually, common sense and a vision for the future must guide the direction of our nation’s investments. Either we join the rest of the world in recognizing the economic and environmental benefits of moving freight onto the river system or we consign regions of our country to increased degradation of land and air resources.”

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