The 2022 Drought, River Proximity, and Grain Basis: Evidence From the Mississippi River

ABSTRACT The 2022 Mississippi River drought disrupted navigation and affected local grain prices and basis. Using daily elevator‐level corn and soybean data across nine Mississippi River states (2000–2024), we estimate a drought‐period spatial exposure gradient: the interaction between a September–December 2022 drought indicator and each elevator's river‐port proximity, with elevator and date fixed effects. The cash‐to‐futures ratio rose less near river ports, by about 0.08 (corn) and 0.04 (soybean) log points in the nearest versus farthest decile. Estimates are stable across alternative distance measures and spatially robust standard errors. These findings highlight the exposure of river‐dependent grain markets to inland‐waterway disruptions and can help producers and policymakers manage localized basis risk.