Posted on 12 May 2011
Already swamping cities and farmland and crimping business from river barges to casinos, flooding along the Mississippi River could cost billions.
Although economists say it's too early to tell how much damage the Mississippi and its tributaries might wreak along the states in their path, economist John Michael Riley estimates damages could run up to $4 billion.
"It's not like a tornado disaster, where it's over and the damage can be assessed," says Jon Moen, who chairs the economics department at the University of Mississippi. "But we're sure it's going to have a pretty big impact."
Losses in Arkansas are estimated at more than $500 million, according to the state Farm Bureau. In Memphis, where the river crested Tuesday, damage was estimated at $320 million. Agricultural losses in Mississippi, including grain and catfish farms, could hit $800 million, says Riley, a commodities specialist at Mississippi State University.
The impact on the broader U.S. economy remains unclear. Conrad DeQuadros, senior economist with RDQ Economics, notes jobless claims could rise if flooding keeps workers idle, while manufacturing could suffer if shipping lanes are disrupted on the Mississippi.
Short term, flooding fears are lifting crude oil prices on concerns over 11 Southern refineries. Corn and wheat prices also rose on the Chicago Mercantile Exchange, although the region is not a big producer of either.
All 19 Mississippi casinos along the river are expected to be shuttered by this weekend, costing state and local governments millions in lost tax revenue on such services as 6,000 hotel rooms. There's also the loss of income for 13,000 employees, Mississippi Gaming Commission deputy director Allen Godfrey says.
Webster Franklin, CEO of the Tunica Convention and Visitors Bureau, says the casinos normally bring in $87 million in May. The fallout is hurting local businesses that cater to about 25,000 daily visitors. "We need the casinos running as soon as possible," he says.
Flooding has also taken its toll on farmers such as Scott and Liza Hayes of Humphreys County, Miss. The couple moved most furniture from their home and had an 8-foot levee built to protect it. But their wheat crop may be doomed.
"We have 2,700 acres ready to harvest in 10 days that will completely go under," Liza Hayes says.