Tag Archives: economics

Record Large Dead Zone is Forecast for the Gulf of Mexico

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Heavy spring rains across the American mid-west have mitigated the region’s extensive drought.  However, they are expected to cause a record large dead zone in the Gulf of Mexico this summer.

According to a recently released forecast from NOAA and its research partners, the University of Michigan and Louisiana State University, the Gulf dead zone this year could grow as large as 8,561 square miles. If it reaches this size, which is roughly equal to the state of New Jersey, it will be the largest dead zone ever recorded in the Gulf.

Dead zones are areas in large bodies of water that do not have enough oxygen to sustain aquatic life.  They are usually caused by nutrient pollution from agricultural run-off.  Specifically, excessive amounts of fertilizers – nitrogen and phosphorus – create massive algae blooms.  When the algae die, they sink to the bottom where they are decomposed by bacteria. This process uses up most, if not all, of the available oxygen in the water.  As a result, fish flee the area and immobile bottom dwelling organisms, like clams, die.

The Midwest is this nation’s agricultural breadbasket and its farmers use fertilizers to help grow an enormous amount of crops.  It is also the watershed of the Mississippi River.  As such, the flooding rains that swept through the area this spring have significantly increased the nutrient load of the water that is flowing into the Gulf of Mexico.

A large dead zone will likely have serious economic ramifications for the Gulf region’s multi-million dollar fishing industry.

Agricultural run-off is the main source of nitrogen and phosphorus that cause the annual Gulf of Mexico dead zone.

Watershed of the Mississippi River runs through America’s agricultural heartland and ultimately drains into the Gulf of Mexico.

Image Credit: Donald Scavia/University of Michigan

Drought Impacts Commerce on the Mississippi River

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The ongoing drought of 2012 is delivering a serious economic blow to America’s agricultural heartland.  Its impact, however, is not limited to food prices.  The lack of rain in the central United States is also affecting one of this nation’s vital shipping arteries – the Mississippi River.

Thousands of tons of cargo – from fertilizer to coal – travel along the mighty Mississippi everyday.  The exact number of barges allowed to safely navigate the river at one time is determined by its water level.  The wider and deeper the river, the more barges can travel. As the river shrinks, so to does its capacity to transport goods and materials.

River levels typically fall off in the summer, but this year’s drought has pushed them well below normal.  For months now, barges have been carrying reduced loads in an effort to ride higher in the water and avoid running aground.  Without significant rain to replenish the river’s flow, conditions on the Mississippi have been getting worse.  In fact, the U.S. Coast Guard reported yesterday that it temporarily closed an eleven-mile stretch of the river near Greensville, MS, because of precariously low water levels.  As a result, nearly 100 vessels were stranded.

These drought induced reductions and delays in shipping – just like this year’s diminished farm yields – will ultimately translate to higher costs for consumers.

Drought Economics

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The widespread drought of 2012 is now considered the worst that the United States has seen in more than fifty years. The nation’s agricultural heartland has been particularly hard hit, and losses there are forecast to have a ripple effect throughout the economy.

According to the U.S. Department of Agriculture, 1,297 counties in 29 states have been designated as natural disaster areas. With grazing lands going barren and staple crops like corn and soybeans wilting in the ground, potential farm yields are plummeting. Following the laws of supply and demand, consumers all across the country will soon be paying higher prices for food.

The cost of many other goods is also expected to rise, as corn is used in a wide variety of products.  It is a key ingredient in items like livestock-feed, ethanol, and anything that contains corn syrup.

Devastating and costly, this drought is likely to intensify as hot and dry conditions continue to dominate the weather in the mid-west.  While not on the same scale as the Dust Bowl of the Great Depression, many analysts expect this year’s drought to rank as a billion dollar natural disaster.

Corn crop withers in drought stricken field.

Image Credit: BuffaloNews

Chocolate and Climate Change

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Today is Valentine’s Day and the exchange of heart-shaped chocolates is a tradition for many couples.  The price of this customary gift, however, is forecast to increase as cocoa, the main ingredient in chocolate, faces the challenges of climate change.

Chocolate, a nine-billion-dollar global industry, obtains more than 50% of its cocoa supply from the West African nations of Ghana and Ivory Coast. A recent study by the International Center for Tropical Agriculture found that within the next 20 to 40 years, the climate of this region is likely to become too warm to continue growing the fragile cacao trees.  In the shorter term, extreme weather events like drought are threatening this sensitive crop.  As a result, supplies are likely to fall causing prices to go up.

So, enjoy your chocolate treat this Valentine’s Day and remember that this sweet gift is likely to be more dear in the future.

Chocolate Hearts for Valentine's Day

Image Credit: phoenixnewtimes.com

Climate Change: A Global Issue with Local Impact

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There are a wide variety of climates and micro-climates around the planet. Rising global temperatures will affect each one in different ways.

In the US, the federal government has drafted a report called, Global Climate Change Impacts in the United States.  It highlights how each of the diverse regions of our country will be affected by changes in their traditional climate conditions.  These impacts are varied and include public health, agriculture, ecosystems, infrastructure, and the economy.

ClimAID, a report from the New York State Energy Research and Development Authority, is even more narrow in scope.  The three-year study makes recommendations to state policy-makers, urban planners, and local residents on how they can adapt and better prepare for the impacts of a changing local climate. 

By examining climate change through the lens of our own neighborhoods, the popular phrase, “think global and act local”, seems even more poignant than ever.

Pumpkin Economics

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Many aspects of the economy are dependent on the weather. The agricultural sector is especially vulnerable to extreme conditions.  Crops need just the right amount of water. Either too much or too little is bad news.

This summer and early fall we had excessive rain and serious flooding in the North East.   This extreme weather has affected many crops with pumpkins being a high profile seasonal example.

Depending on their location, some crops washed away in floods or rotted from a moisture loving fungus.  As a result, there will be less pumpkins in the patches this year in certain areas.  So, go early for a good selection.  It should also be noted that according the laws of supply and demand, we can most likely expect to pay a little more for our Halloween pumpkins this year.

Pumpkins ... a symbol of the season

Photo Credit: Wikipedia