Cargill CEO Sees Rain Averting Mississippi ‘Catastrophe’

Actions by the U.S. Army Corps of Engineers and an improved rain forecast may avert a “catastrophe” of closing the Mississippi River to barge traffic, Cargill Inc.’s top executive said.

Gregory Page, chairman and chief executive officer of the Minneapolis-based grain exporter, said the Corps’ removal of rocks near Thebes, Illinois, and a release of water from the Kaskaskia River -- along with an improved weather forecast -- may keep traffic moving through the winter.

“The greatest catastrophe, the actual closing of the river, seems to have been averted,” Page said at a U.S. Chamber of Commerce forum on agriculture in Washington today. “It looks like we’ll be able to soldier through.”

The Army Corps’ contractors are using an aquatic jackhammer to break up rock pinnacles, formations of bedrock that can snag long strings of barges that pass through that stretch of the Mississippi’s narrow channel. Earlier plans to blow up the rocks near Thebes with explosives are on hold.

The hydrological forecast for the Mississippi is improving, according to National Weather Service data released today. River levels in St. Louis on Dec. 26 now are forecast to be about 18 inches higher than previously projected. Longer term, the weather service forecasts the river could fall another two feet by Jan. 16, a level at which barge traffic could be stymied.

Rock Removal

Dredging at 21 spots between St. Louis and Cairo, Illinois, and rock removal will add 1.5 feet of depth in the river’s navigable channel, Joseph Kellett, the Army Corps’ top civilian engineer in St. Louis, said Dec. 7. That will mean barges will continue to operate when the St. Louis gage reads as low as minus 7 feet, he said. Water was at minus 3 feet today.

The U.S. government appears to be taking seriously Cargill’s top policy request of doing whatever it takes to keep nine feet of water in the river’s navigation channel, Page said. It’s clear the U.S. is focused on the river now, he said.

The company is planning for scenarios of the river being kept open or closed, Page said. Whether the river remains open still depends more on the weather than anything else, he said.

The U.S. inland river system moves 60 percent of U.S. grain exports between October and March, Page said, with more than 400,000 tons of fertilizer also traveling by water. Much of the potential harm from low water already has been done, with companies loading barges with smaller cargoes at higher cost, he said.

“The drought can be prolonged and we’ll have to make other decisions,” Page said. “The belief is the natural resources to keep nine feet at St. Louis are available today.”

To contact the reporter on this story: Jeff Plungis in Washington at jplungis@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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