Mississippi flooding drowns crops and casinos: What's the economic toll?

Floods swamping large areas in the lower Mississippi River region are imposing significant economic costs that may ultimately total several billion dollars.

The precise damage to economic activity is still uncertain, since the floods have not yet crested in key areas such as Baton Rouge. The impact could end up being relatively small in the context of the economy of the region and nation.

But for farmers, businesses, and individuals who have been directly affected, the costs are already significant.

IN PICTURES: Mississippi River floods

The most expensive effects include: crops lost or threatened, casinos shut down for weeks, and a mighty aquatic highway temporarily closed to freight.

$2 billion in damage to farms

Farms alone could take a $2 billion hit from the flooding, estimates John Michael Riley, an agricultural economist at Mississippi State University.

"The impacts are pretty large," he says, since much of the land near the river is agricultural – used for farming catfish, cotton, and grains such as corn, wheat, soybeans, and rice. And the flooding has spanned a large region encompassing parts of Missouri, Tennessee, Mississippi, Arkansas, and Louisiana.

Still, for all the thousands of acres at risk, these affected lands are just a piece of a much larger US farm industry. Flooding could add to upward pressure on food prices, but not in a way that's visible at the grocery store.

"It's just not as much land devoted to crops as, say, the Corn Belt," says Professor Riley. The problem, he says, is that this comes as grain supplies are already tight and food prices already high.

Even as floods ravage Mississippi, where Riley predicts as much as $800 million in damage, areas like the Texas Panhandle are struggling with drought. And in the Corn Belt surrounding Nebraska, recent rains have delayed spring planting, which can result in smaller crop yields.

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