Snow removal companies like us are facing a critical shortage of salt for this upcoming winter season. With snowfall for 2018- 2019 just around the corner, we’re in the process of ordering salt and other supplies so that we’re all set to roll when the snow falls.
There can be various reasons for the shortage of salt. Each of these reasons can solely play a vital role in affecting the salt cost in any given year, and if the reasons are combined, they can create a “storm” that can affect the price of salt this season. Let us take a look at some of the common causes that can lead to the occurrence of a salt shortage.
The problem in the Mines
The average usage of salt to remove winter snow is about 10 million tons. This is basically an average usage amount, which can vary from high to low year after year. However, there were primarily three factors that lead to salt shortage last year.
• Winter Duration: The duration of the winter season in 2017- 2018 was quite long and lasted up to the month of May. This can lead to an excessive amount of salt usage by the state, countries, and municipalities. As a result, not much of the salt was left behind, leading to a shortage of salt for the 2108- 2019 season.
• Worker’s Strike: When workers go on strike, it can cause salt production to deteriorate, leading to the salt shortage.
• Difficulties in the mining operation: When difficulties in the mining operations are not overcome, it can affect or stall salt production, leading to its shortage.
The last two factors can play a major role in declining salt production, leaving us high and dry during this winter season.
If there’s a shortage of salt in one part of the world, it can always be imported from those countries where there is excess. To overcome the salt shortage, salt can be imported from the countries of Egypt and Chile. However, though the price of the imported salt and the domestic salt may be the same, the cost of transporting salt to the stateside docks can increase the price of salt nearly two to three times more when compared the cost of domestic salt.
When the buying process of salt begins, the first to order are the government officials. This year, many local and state governments are ordering nearly 10% – 20% more salt when compared to the preceding year, the primary reason for this being that either the reserves were depleted last year due to excess use of salt, or they’re preparing themselves for a long winter season and don’t want to buy again later in the year when the prices are likely to soar higher.
After the government agencies finish with their bids, brokers and big contractor begin to order. However, since there’s more scarcity, the price of salt goes up.
By the time landscapers or smaller contractors get to bid for their order, there’s even more scarcity, leading to higher rates.
When the price increases due to scarcity, it becomes necessary to import salt. So how does the price statistics look now? The salt price which was $62 per ton in 2017- 2018 has risen to $125 this season. As a result, while the municipalities are more likely to be in a safe zone as it might not have much effect on their budget, it’s the consumer who will have to bear the brunt and pay the bill for whatever the difference their snow removal contractors are unable to take up.
To learn more about how the current cost of salt can have an impact on your organization, or to find out more about snow and ice removal, contact us online or call us at 317-975-0275.