Consumers will feel effect of flood TTC

July 02, 1993|By New York Times News Service

CHICAGO -- The flooding along the Mississippi will be having a ripple effect on consumers.

The flood-swollen Mississippi River will be closed to boat traffic for three more weeks or longer, causing tens of millions of dollars in losses to the shippers and companies that must find other, more expensive ways to move their products.

Consumers could see higher prices in the weeks and months ahead on everything from grain to electricity because shipping costs are increasing and the cost of grain futures contracts at the Chicago Board of Trade have been rising as fast as the river.

A rise in the price of futures contracts strongly indicates that retail prices will increase. And barges loaded with coal are tethered at ports along the southern Mississippi River, unable to reach the coal-powered generators operated by electric utilities north of St. Louis.

The most likely other methods of transportation are rail and trucking, but they cost at least $5 more per ton than shipping by barge, said Norb Whitlock, a vice president of American Commercial Barge Line Co.

The Corps of Engineers reported Wednesday that it would take at least 20 to 25 days to reopen locks and dams along the upper Mississippi River to barge traffic.

The companies that do business on the river are being hurt by the flood. Nearly 50 percent of the 2,000 barges and 30 towboats that Archer Daniels Midland Co. operates on the river are idle. A spokesman for the Decatur, Ill., company predicted that lost revenue from the idled barges would reach $20 million.

The flood's impact stretches well beyond the river's shores. At the Chicago Board of Trade, the world's largest futures exchange, the trading volume and prices of contracts on agricultural products has increased.

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