Harsh winter is only one influence on price of salt
A hefty hike in road salt prices is to be expected when a particularly nasty winter in 2013-14 is followed by long-term forecasts for another cold one in 2014-15. There’s no surplus of salt stored away, and the empty barns must be refilled before the snow flies.
And with this scenario playing out in every municipality across the region, the price of salt increases.
It’s the age-old law of supply and demand. But it’s never quite that simple. There are unseen influences on the price of Butler’s road salt including an industry located a half-mile beneath the Finger Lakes of upstate New York.
Butler is stocking up for the coming season, paying $79.29 a ton for salt under a contract with Cargill Inc. through the Butler County Council of Governments and the South Hills Area Council of Governments. That rate is up more than 20 percent from the $62.50 that Cargill charged in 2013-14.
The city’s minimum order of 4,000 tons for 2014-15 will cost $317,160. That’s $67,160 more than it paid for the same 4,000 tons in 2013-14.
Butler’ salt comes from Cargill’s Cayuga Salt Mine in Lansing, N.Y., the deepest underground salt mine in the western hemisphere. It processes 2 million tons of road salt each season and ships the salt to more than 1,500 locations throughout the Northeast, according to Cargill’s website.
The mine, which has been in continuous operation since 1923, is installing a new ventilation shaft. The shaft will be a vertical tunnel more than a half-mile long with powerful air pumps to force surface air into the mine’s deepest recesses. Cargill has not released a cost estimate.
The company says the shaft is necessary for improved airflow and emergency evacuation procedures. Without improved airflow to newly expanded areas, the mine would have to cut its work staff and production by 2017 and would shut down completely by 2020. There’s still plenty of salt to be mined, but without the new shaft, Cargill would be out of compliance with federal safety standards.
From the pure standpoint of supply and demand, that’s 2 million tons of road salt distributed throughout the Northeast. Closing the Lansing mine would paralyze the entire Northeastern United States during snow and ice storms.
So we collectively pay whatever reasonable price Cargill charges for its salt, knowing the price includes the cost of developing the new air shaft. Without the shaft, road salt would become even more expensive as supplies dwindle and demand increases.
Perhaps some innovative thinker, driven by demand and profit motive, will invent a cheaper alternative to salt. Let’s hope so. Innovation always has played a welcome role in the economics of supply and demand.
