There’s concern about this winter’s salt supply. Ask any industry insider from Rockport, Maine down to Cincinnati, through the Chicagoland area and on up to Green Bay and he’ll tell you about record-breaking price quotes and historic shortages for commercial snow removal contractors.
"We rarely run out of products, but last year’s record snowfall we got caught with our pants down," says Mike Meyer, president of Meyer’s Landscape Services in Lewis Center, Ohio. "We have always pre ordered our salt and ice melt in September. I have now started ordering it in July and August."
Nearly 70 percent of snow contractors reported feeling the impact of last winter’s salt shortage, according to a straw poll of Snow Magazine readers from throughout the snow belt. In addition, nearly 60 percent of contractors say they anticipate another salt shortage this winter.
Will this influence salt purchasing trends? More than half say they will over purchase in preparation for Winter 2008-09 and 72 percent will purchase their salt from multiple suppliers, Snow Magazine readers say. As a result, more than 90 percent expected to pay more for their salt this season.
If 2008-09 is another aggressive winter, then initial indications are that the salt suppliers may be unable to replenish supplies fast enough to meet professional contractor demand.
"In all my years in the salt business I’ve never seen it this bad," says Mike Betts, president of With a Grain of Salt, a salt supplier headquartered in Fort Wayne, Ind. "Contractors have told me they’re being quoted prices that are double and even triple of what they were paying last year. Some are being told that their normal suppliers will not quote them this year, period. If this continues with a normal season, then salt will be difficult to get next winter and prices will remain high."
These forecasts encourage speculation that salt suppliers are restricting supply to jack up the price and gouge the industry. It’s the same scenario many people alleged about the oil industry in the wake of $4 per gallon prices at the pump this past summer.
These conspiracy theories are simply not true. What it comes down to is supply and demand – a number of factors are influencing the demand for the available salt and a competitive marketplace is driving up the price.
Stockpiling is a major factor influencing salt prices. The demand for rock salt is tremendously elastic, explains Dick Hanneman, president of the Salt Institute, a non-profit salt industry association. And it’s this elasticity that strains the system this season. After a string of weak winters, demand lessens as the industry adjusts to the trend. But a heavy winter, like the one the North American snow belt experienced in 2007-08, creates a knee-jerk reaction. In this case government agencies – departments of transportation and major municipalities – are doubling their salt allocations in preparation for this winter because they panicked last season.
"The state of Illinois, this year compared to last year, increased its bid tonnage by 400,000 tons, and that’s just the department of transportation, not to mention the local governments in Illinois," Hanneman says. "Iowa increased its demand by 52 percent, or 100,000 tons. That is a half-million tons more salt than what was sold last year and now we’re scrambling just to get enough."
Jenny Schumacher, with Vande Hey Co. in Appleton, Wis., witnessed this firsthand. "The salt shortages came mainly because of the counties and towns not stocking up enough," she says. "And I don’t see it ending yet."
In addition to local demand, the average snow removal contractor is competing for rock salt on a world level, Hanneman says. Countries like China, following their record winter last year, are demanding more salt from the world market. In addition, the economics of transportation often make it cheaper to import salt into the U.S. than to mine and ship it locally. "The U.S. is a major salt importer, one of the largest in the world," Hanneman says. "We could make it all ourselves, but it’s cheaper to bring it in to certain places. For example, salt mined in upstate New York can’t compete with the prices of salt coming into Boston harbors from Mexico."
Logistic problems influence salt prices, too. "We used to ship grain down the Mississippi, but now it gets trucked to the local ethanol plant," Hanneman says. "There is no grain going down the Mississippi anymore to speak of. And because of that, salt, which had been the chief back-haul to get the barges back up the river for the next load of grain, now is the primary user of those barges. Salt has to pay top dollar to go upstream because it’s competing against other people’s products who want to go upstream, too."
It’s less than encouraging news for commercial snow fighters. Salt is the life blood of the snow removal industry. Without it, contractors risk failing their clients. Many snow removal contractors advocate securing salt as soon as possible, regardless of the cost.
"Look at what you project you’ll need for the winter and secure a good percentage of that – maybe 60 to 70 percent," says Frank Dedon, president of Cleveland-based Abraxus Snow Removal. "The prices aren’t going to go down, that’s for damn sure. And if we have another heavy winter, there’s going to be shortages."
So who pays this price difference? Contractors are split, some saying they’ll absorb the increase this winter in the hope the prices normalize before the next snow season. Others, though, are adamant that contractors pass these costs on to clients.
Regardless, it is incumbent upon professional snow contractors to take a smarter approach to their salting and deicing techniques as they prepare for Winter 2008-09.
Explore the September 2008 Issue
Check out more from this issue and find you next story to read.
Latest from Snow Magazine
- NOTEBOOK: Go With The Flow
- NOTEBOOK: Winter Equipment Offers the RoadMAXX System
- NOTEBOOK: Yanmar Unveils Compact Loader Lineup
- NOTEBOOK: Schill Expands in Southwest Ohio
- October Cover Story: Achieving Wet Pavement
- August 2022 Cover Story: Beat The Odds
- May 2022 Cover Story: Bullish on Snow & Ice
- 2022 Top 100