Capitalist Climate Change Threatens Agricultural Profits and Supply Chains
While the United States federal government and the Class I Railroads attempt to avert a disruption to supply chains caused by an unruly labor force, another looming menace threatens to cause further havoc to the economy. The Mississippi River, the United States’ great artery of commerce, is suffering from a lack of rainfall, leaving barges stranded as it reaches its lowest levels in 40 years. Water levels in Memphis, Tennessee, a major logistics hub, were at nearly 11 feet below average, and the time it takes a barge, the preferred mode of transport for most crops, to travel from St. Louis, the central hub of commerce along the river due to its position at the mouth of the Missouri River, to New Orleans, sitting at the mouth of the river on the Gulf of Mexico, has doubled.
In addition to the increased travel times, the number of barges that a given tug can push has decreased due to limitations in the channel width created by the low water, and those barges must be laden more lightly lest they run aground. Whereas before a typical pack might consist of 40 barges, now the limit is 25, and the maximum draft anyone dares load is nine feet as compared to the previous twelve to fourteen on the lower Mississippi. To explain the significance to the flow of agricultural commodities, the following figures must be kept in mind: a typical barge can be loaded with 1,500 short tons (approximately 1,361 metric tonnes or 1,339 long tons), which is 50,000 bushels of soybeans; each reduced foot of draft reduces the amount that a barge can carry by 150-200 short tons (136-181 metric tonnes or 134-179 long tons). Each tow, therefore, has its capacity reduced by 25-30%.
To compensate for the decreased depth, and to facilitate the flow of commodities along this critical infrastructure, the US Army Corps of Engineers in October began dredging the bottom, and constructed a mud berm on the river bottom to mitigate saltwater intrusion caused by the reduced freshwater flow, which further restricted traffic; while this was going on, it was only possible to safely travel along the Mississippi by day, and traffic around the berm area is one-way only. This has resulted in over 1,000 barges being stuck while they wait for an opportunity to move. Consequently, the spot rate for barge transport at the end of October fell from a peak of $105.85 to $75.28, a decrease of nearly 30%. While this is still high relative to recent years, even a short-term decrease in revenues can ruin a firm.
It’s important for US agricultural concerns to be able to ship their commodities to the international market while the southern hemisphere – particularly South America – is still in winter. The largest producer of soybeans in the world is Brazil, and their planting season begins in September; the beans can be ready to harvest in as few as 66 days, with the average being 116 days, or nearly 4 months. As Brazilian production comes online, then, prices will begin to fall, as the supply increases. This will result in reduced profits. Additionally, harvest season for corn (maize) is approaching, which will impose its own pressures on shipping.
The problem shows no sign of abating in the near future. Even if rainfall levels were to increase suddenly, drought-parched soil would absorb most of it. Further, there is such thing as too much rain. The soil is only capable of handling so much water, and it needs time to percolate down from the surface so as not to wash away the topsoil and refill the aquifers and springs. These rivers and the soils that grow the crops transported on them also rely heavily on spring snow melts to supply water, which, if absent, would further compound the problem.
The bourgeoisie, however, is unwilling to take the steps necessary to mitigate this problem. The great capitalist powers remain locked into fossil fuels, especially petrochemicals, as a huge source of their profits and rents.
It is not only energy that is obtained from oil but the chemicals for fertilizers as well. The warming caused by fossil fuel emissions, along with the disruption of the nitrogen cycle caused by overuse of fertilizers, has severely disrupted the natural climactic cycles that sustain life on this planet. The destruction of the trillions of dollars of capital investment in this industry is unthinkable; too much money is at stake to transition. While negative carbon emissions and restoration of the nitrogen cycle (to facilitate the growth of plants to capture carbon) are necessary to avert catastrophe, the bourgeoisie insists that that we must consume more and more commodities so that their cycle of accumulation can continue without interruption. It is clear that capital will continue to valorize itself at the expense of the environment and human need. Only communist revolution can lead us out of this dead-end course.