Posted: Dec. 28, 2008

With another season of heavy snow already stretching some road salt
supplies, Ohio state officials are calling for increased cooperation
with their Midwest neighbors in managing government’s most precious
winter commodity.

Wisconsin officials said they would consider joining an interstate
purchasing alliance that, according to a national salt industry
representative, would be the first of its kind in the nation.

The move toward regional coordination is seen as a possible solution
to a conundrum facing local governments in Wisconsin as they confront
a second consecutive winter with repeated snowfall tapping salt
stockpiles.

Wisconsin state transportation officials say they flirted briefly with
buying salt from Minnesota last winter at the height of a barrage of
inclement weather that hit the Badger State harder than its neighbor
to the west.

“There’s a lot of opportunities to work collaboratively,” said David
Vieth, operations director for the Wisconsin Department of
Transportation.

Vieth said a formal partnership among neighboring states would need to
address such potential stumbling blocks as where to store the
Midwest’s gigantic inventory.

“It’s possible,” he said, “but I think there’s a whole lot of things
that would need to get ironed out first.”

Conserving salt
Local officials in southeastern Wisconsin welcome the idea.

“Anything that would stabilize the market I’m sure would be better
from our perspective,” Greendale village manager Todd Michaels said.

Despite procuring 1,300 tons of road salt this year – 200 tons more
than last year – Greendale already has used about 30% of its supply
and has announced plans to curtail salting on some residential
streets.

Michaels expressed doubts that the village could purchase more salt if
snow continues bombarding area roadways the way it has the first few
weeks of winter.

“That’s what concerns us – that it’s so early,” he said.

Last year’s near-record accumulations in Wisconsin created widespread
shortages of road salt and sharp price increases that had some cities,
counties and other government agencies paying as much as $134 a ton –
more than three times the normal price.

Officials in Ohio and Illinois have launched investigations to
determine whether salt suppliers were taking unfair advantage of the
situation.

Robyn Ziegler, a spokeswoman for the Illinois attorney general, said
her office’s investigation was continuing, with no findings yet.

Ohio investigators released their report Dec. 15, saying that road
salt consumption in Wisconsin and other Midwestern states last year
was 700,000 tons above average combined. Those same states boosted
advance orders dramatically this year, again straining supplies and
creating a demand spike, the report says.

Price disparities
Investigators also found price discrepancies in Indiana and Kentucky,
where some local governments were paying up to 50% less than their
counterparts just across the border in Ohio.

To combat such problems in the future, Ohio Department of
Transportation officials are recommending that states throughout the
Midwest cooperate in soliciting vendors and managing their seasonal
salt stockpiles.

Wisconsin is mentioned specifically in the 18-page report – along with
Illinois, Minnesota and Iowa – as a state where officials have boosted
their inventories this year, likely hampering Ohio’s access to needed
supplies.

Wisconsin this year ordered 1.3 million tons of salt, which is about
500,000 tons more than last year. Vieth said prices, at least
initially, were back down to normal, about $40 a ton.

“Coordination instead of competition among other states could reduce
the likelihood of unbalanced shortages and supplies,” the report
concludes.

Ohio Gov. Ted Strickland is still reviewing the findings, and
officials said no decision has been made on whether to pursue the idea
with other states.

Dick Hanneman, president of the Salt Institute, a Virginia-based
industry group, said the interstate purchasing partnership would be
the first of its kind in the nation, although many such alliances
exist locally among neighboring cities or counties.

Hanneman said Ohio’s idea for what he termed a “Midwest compact” would
certainly draw interest from vendors hoping to do business with the
alliance.

Referring to problems that can develop from the salt industry’s
limited production capabilities, he added: “Those are real problems.
But Ohio is on its way to solving a lot of them.”