Gene Rench of the National Weather Service called the flooding Mississippi River a 500-year event. Army Corps spokesman Bob Anderson said, "There's never been a flood of this magnitude on the upper Mississippi." Heavy snowmelts, three large rainstorms, including April's tornadoes, triggered flooding from the Ohio River, as well.
Total economic damage could reach several billion. Why? The Mississippi River runs past farmlands and cities in six states. The flood's greatest damage could come on May 23 when it empties in New Orleans, still recovering from Hurricane Katrina. Here's a rundown of damage so far.
- River barge traffic, transporting billions in crops, are delayed. Riverboat casinos are closed for 6-8 weeks ($14 million).
- Farmland crop damage could total $2 billion (Fortunately, farmers usually have crop insurance.)
- Missouri - 130,000 acres, 100 homes and 300 people were flooded, costing $300 million.
- Kentucky - More than $5 million in damage. FEMA officials are still estimating.
- Memphis TN - Levees protected the downtown, although 1,300 homes in outlying areas were flooded.
- Arkansas - Flooding could destroy what's left of the $200 billion catfish industry.
- Mississippi - Damage could total $800 million.
- Louisiana - 25,000 people were flooded when levees were opened to protect New Orleans. Why? If the Mississippi River flooded the city, it would hit harder than Hurricane Katrina.The flood would have also threatened 10 Louisiana refineries, representing 14% of U.S. operating capacity. (Sources: USA Today,CNN Money)
What It Means to You
Much of the cost of flooding will wind up costing taxpayers, not private insurers, who won't insure against flooding without government guarantees. The National Flood Insurance Program is already$18 billion in debt, thanks to Hurricanes Katrina, Gustav and Ike. This added cost will increase the national deficit and debt.
Food prices could also spike, depending on how fast the flood waters recede. Soybeans, corn, rice and cotton are either planted or waiting to be planted. Flood waters could strip the ground of needed nutrients, which would be a boon to fertilizer companies.
Despite being a 500-year flood, it apparently won't have the impact on the global economy of Japan's earthquake and tsunami ($300 billion in damages) or Hurricane Katrina ($125-200 billion in damages).
On a side note -- Apparently fire ants will survive the flood unscathed, thanks to their ability to form waterproof rafts. Although this is unrelated to economics, I came across this amazing video that shows how.
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(Credit: Chris Graythen / Getty Images)