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Bulk Salt In Wisconsin Illinois?

Discussion in 'Ice Management' started by natueboy, Aug 8, 2008.

  1. natueboy

    natueboy Junior Member
    Messages: 22

    Does anyone have any ides of anyone in the southern wisconsin / northern illinois area for bulk salt. I need about 2,000 tons for the season. We have some thru carghill, on a 1,500 ton request we got 120 tons max!!! I'd appreciate anyones help with this.
  2. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    the word that i got, was to wait until the illinois state bid was up on the 13th of this month
  3. Zodiac

    Zodiac Member
    Messages: 76

    From what I hear salt is going to be hard to find.

    A lot of the towns in SE Wisconsin are having a hard time filling their orders.
  4. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    harder than normal

    what i was tlod was the sate is ording 600,000 tons extra then they normally do

    alont with every city and county ordering more

    once the state bid is up, then the 3 or 4 major salt companies, will know whats going on,

    who ever getts that state bid, will more than likely not be taking anymore orders for the season, howerver the other 2 or 3 should start opening up for pricing from private companys
  5. 3311

    3311 Senior Member
    Messages: 332

    I hear no bulk salt for for anyone other than muni's. I'm waiting for a quote from Cargill on 5 semis of bagged material. Holly sh ***** t
  6. tls22

    tls22 PlowSite Veteran
    Messages: 4,264

    No salt for you said GB......50/50 blend you guys will be using!:rolleyes:
  7. The MAG Man

    The MAG Man Junior Member
    Messages: 26

    The IL state bid went off with no bids from all vendors. NO BIDS. That should tell you a lot about where things stand and what to expect. In fact, this is the sixth state level bid we've seen containing no bids on either all or part of the contract.

    The upper midwest, along with many other regions of the country are in a severe problem for salt availability. No matter what anyone tells you about guarantees for supply, if you don't have 100% of what you will need for the winter on hand before the first flakes land, you're not going to have what you need for the winter.

    Cold hard reality:
    Salt companies have been taking a beating for decades and the proverbial eagle has now come home to roost. Municipalities will have to buy like everyone else this winter; spot market pricing at the time of shipment if available. Municipal contracts are very dictatorial and charge the vendor back any differential of buying on the spot market and getting it by any means possible if the vendor of record holding the contract is unable to deliver product. It was this "sting" clause that has lead to much of the midwest's problems on salt because that $50/ton contract is covering $250/ton replacement salt. Add to that international currencies and you have a formula for disaster.

    As the dollar has weakened, foreign sources of supply have become less aggressive reaching only to coastal markets. That means the core of the country will have to rely on local supplies. Local sources are unable to satisfy demand so this is the leading edge of severe salt and deicing material shortages that will hit our country if we get any early weather at all. You can get all the salt you want from our stockpiles, but we are 800 miles away and the freight alone will be nearly $175/ton. Our stockpiles are on east coast ports of entry only. We don't sell beyond 150 miles from our stockpiles because we're not competitive. We were "backfilling" the WI and IL market last year from our mid-Atlantic stockpiles at a cost somewhere around $220/ton delivered. That's $10 worth the salt and $210 in transportation.

    Ugly future?
    When salt runs out or is unavailable, the market tends to move toward premium deicers. Supplies of premium deicers are very short because of reduced foreign competition. It was the imported premium deicers that reduced the number of calcium chloride manufacturers in the United States by 70%. 70% of the companies that made calcium chloride dry products in the US are now out of business. Think about that. If you lost 70% of the total output in anything, that's a problem if it is not picked up elsewhere. It was picked up elsewhere (imports) until now.

    Goes back to oil in two ways
    Oil is the root of the problem because salt is an inexpensive commodity in which 80% of the cost of it sitting on the pavement in the winter is transportation. 80% of the cost of that salt on the road, parkinglot, or sidewalk is transportation.

    China was a major source of calcium chloride but with oil prices at $125 plus per barrel, calcium chloride produced in Europe, Asia, and other parts of the world is all going into oil drilling where they must have the product at any cost. They will pay whatver you ask because they have to have these products for drilling muds. An oil driller will pay $50/bag for calcium chloride but the deicing industry only pays around $10 or $11. Where would you sell your product if one market paid 5x as much for the same product and it was in short supply?

    That's really all you need to know about salt. When transportation costs are impacted adversely and simultaneously with currency devaluation, you have a formula for severe shortages because the imports pull out.

    Only the early bird will get worms
    Like it or not, this is only the tip of the iceberg. Salt at the wholesale level is the worst I have ever seen it in 35 years of doing this. You need deicers for the winter? Buy them now or prepare your customers and your equipment to go without them. Like it or not, the most inexpensive and abundant deicing commodity is now in deep trouble just like premium deicers with no recovery in sight. As soon as it snows, things will got to heII in a handbasket.
  8. Snowpower

    Snowpower Senior Member
    Messages: 636

    While I agree that transportation costs and world economies play a role...this is still a supply and demand issue.

    I sit on a salt mine 600 feet below my shoes that has enough salt to last a million years or so they say, as do a lot of the people here, yet we cant get or have to pay double for salt now?

    Munincipalities are having problems too?

    Thats a lot because the salt mines, of which there are only a few, control the market, have the supply, and are controlling the price.

    They could ramp up production but why?

    Why should they if overnight they can double prices, have people begging for product, and they dont have to increase cost.

    I think the salt companies are stickin it to us. They saw and see an opportunity and are seizing upon it.

    Is it right? Is it wrong? I'm not sure ...because maybe any or all of us would seize the same opportunity to profit.

    Theres only a handful of companies making this happen.

    Good post Mag....
    Last edited: Aug 11, 2008
  9. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    I think you are partly correct.

    fuel costs due play into the "production" of it, and the transportation.... as for upping production, maybe they see it as, a temperary problem? Think about it, if we didnt have the hard winter last year, would we be in this situation? IL -alone wants 600,000 additional tons....plus citys and counties
    and i almost think that there are more "highway miles" within local cities....

    so it they are almost doubling there order, this might only last a year, just depends

    in the spring time, do you go buy additional equiptment to handle your "spring rush" -NO, or maybe just a few extra workers...but i dont think most of us, are doubeling the size of our companies , just for that rush

    the equiptment that they would need to increase production is in the millions of dollars range, so really it make more business sence to just increase the cost...and due some overtime, '

    but i still think the wole thing is a load of crap...

    snowpower.... how fare DOWN does your property go?... i have a shovel
  10. Snowpower

    Snowpower Senior Member
    Messages: 636

    Well do some research on how much salt we are sitting on vs the number of companies that have access or rights and there in lies a large part of the issue.

    I hate to sound simplistic or conspiritorial but not unlike the oil companies and their record profits, perhaps they saw the same opportunity to seize the moment.

    And not unlike the oil companies....there are only a select few producers of salt.

    You watch their bottom lines all skyrocket, while we all freak out and the industry is forced to make major changes, or once again be forced to eat a large part of the cost and make less profit.

    If salt really doubles in price it will take years for the cost structure on the contractor end to even come close to stabilizing.

    I'm dealing with the same thing on the fertilizer side.

    The days of 2-3 times cost applied are history. But feel free to cheer me up and restore my hope and tell me you can get 250 a ton applied. Thats gonna be tough.
    Last edited: Aug 11, 2008
  11. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    Your right.... its the same with fuel , and fert 100%

    as much as i would like to say $50.00 to mow that small house....

    there is some guy thats gonna due it for $25

    we can all say , lets up are rate 300 per ton, but there will still be contractors spreading it for $150

    i wish i could give us all better news.... i talk to 6 different brokers today...they all seem like they can get salt , but no one will say at what cost, until the end of this week (state bid) is holding it up
  12. The MAG Man

    The MAG Man Junior Member
    Messages: 26

    Not exactly.

    This really nothing more than "Business 101" if you will. Your profile doesn't say what your business is, but let me ask you if you'd sink money into a snowplow manufacturing business right now? I will assume, for the sake of argument, that your answer would be no because the market is saturated, steel costs are all time highs, and plow prices are very competitive. The barriers to entry (the cost of erecting a plant and filling it with equipment) are too steep to justify the current return on investment. Again, assuming that answer is fair then imagine that you are now a salt company. You already have a plant, but it's held together with bailing wire and twine and is in desparate need of massive improvements. Add to that the fact that some portion of the mineral rights you had and developed are now underwater.

    Salt companies, and particularly those in your region, have had intense foreign competition from Canada (every $1 US used to give them $1.50 CDN but now it's barely on a par) and many other places in your region using the river system to float salt in. The local salt producers were not making money because of all this competition so they couldn't reinvest in their business with new equipment and large storage facilities. This is not a business where you can go in and mine 2 million tons of salt and then park it somewhere until the market improves. Salt companies balance their production, staff, equipment, and everything to meet the market that they have. Mines frequently flood and the cost of keeping them dry is balanced against the return on investment from the marketplace leaving many salt companies to walk away from flooded mines. Heard of any salt mines flooding and closing in your area in the past 20 years? Sound familiar? They simply can't pick up the difference any more than we can quickly (months) deliver more gasoline and diesel to a short market with high prices and fix our oil problems.

    The salt companies ain't stickin' it to anyone. The market has been sticking it to the salt companies for years by supporting foreign supplies because they were cheap. Now that those cheap foreign goods are drying up, things are not so rosey and the production and distribution systems of the remaining domestic salt companies is woefully inadequate to meet demand.

    The comments about this being a supply and demand issue are absolutely correct. The problem is supply will be a long time before it meets demand if you are looking to the local sources to pick up the slack. Get oil down to $30/bbl and the dollar on a par with the Euro and these problems will go away overnight. With all due respect, if you think that waiting it out is the answer, you're going to find the wait very painful with no end in sight.

    Supply and demand is exactly what this is and the supply is woefully short of demand so that means if you want it, you have to pay the going rate. Is that fair market cost the cost of salt plus transportation from North Carolina? From Chile? From Canada? Until oil gets cheap, salt will be pricey.

    Avoid the blame game of indicting salt companies and empathize with the fact that they have been gettin' the shaft for years and now the market will have to endure the fair market price they set. What if the price of salt at $120/ton is what it really costs them in today's money to get it to the market? Are they screwin' anyone or are they simply charging their costs plus a reasonable profit? Watch the earnings reports for salt companies over the next 12 months. Sure they are going to come up, but look what they have to reinvest in their infrastructure in order to stay in it. This is like looking at the factories along the river and wondering why they no longer make the clothing there that we wear every day.

    This problem will not go away this winter or next winter. If anyone thinks the salt business is better than plowin for a livin' make us an offer we can't refuse.
  13. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    Good Post - Mag

    While , i think the pricing has gone up for what ever reason

    HERES MY BIGGEST COMPLAINT , Why can i not get Solid pricing Now.....ok, if i have to pay $120 plus.... i learn to live with it.... but salt companies have had all summer to see this coming. I have Bid proposals, that i have to turn in. Suppy and demand, sure..i dont blame you for increasing your price, thats just good business skills

    but y in the heck, can you not nail down a firm price, or figure out , at this time, just what your production will be? if the mines are underwater, im sure that pumping them , can be built into your pricing... and its august, they must be drying out a little

    these kinda of problems need to be addressed much sooner in the season, like in June.... now your market has created a panic... what do i tell my customers, that are requesting bids? ill give it to you in sept? and they will sit on it for 30 days... so i will only have 1 month to prepare for winter... its completeley crazy.

    in crease ur pricing , sure as you see the need, but dont make YOUR customers (us) wait to figure out how fare ur gonna stick it too us.... thats just bad business. i have no problem, paying a higher amount.... and even trading some of the cost, until the market catches up, but at least figure out your production, and Say YES or NO, so i can plan accordingly
    Last edited: Aug 11, 2008
  14. The MAG Man

    The MAG Man Junior Member
    Messages: 26

    Elite I understand your frustration. It isn't that you can't get firm pricing, its really more that nobody can.

    I can guarantee you a firm price if you can predict 100% of our energy costs from now until 3/31/09. That's the stumbling block - energy. Whether its running equipment in the mine, or running the trucks and railcars hauling to the stockpiles, or in the trucks hauling it to your doorstep - energy is the big unknown.

    If the State bids can't get firm pricing nobody can in all fairness. The bunny is looking at 500,000 ton carrot in the State of IL bid and that's a $50million dollar bid at $100/ton, or a half a billion at $1,000/ton. I look at that and think "what the heII, I'll bid $1,000/ton" which I'm sure will be a safe number and frankly at that price I could go buy salt in Antarctica and bring it in and still make money if I had to. But the reality is if the state really would award such a bid at a price 20x last year's price. I'll say this: If they did and I got it at $1k/ton, I'd take all the members of this site to Cancun for a weekend on us...all 28,000 of you! lol

    It's still oil. That black gold finds its way into everything we touch one way or another. Oil makes predicting costs impossible and therein is why things are upside down and you can't get firm prices.

    You could open up an unending political discussion at this point about OPEC and lots of other aspects of oil in the American lifestyle, but to what end?

    Speaking of which, you want to invest some time that explains everything on oil and why we can never win the "lower the price by flooding the market" war on oil prices? Check out this:

    This is a C-span broadcast that is broken into 7 segments on You Tube to stay under the 10 minute cap. I encourage anyone interested to watch all 7 segments. It is very sobering and in fact is the impotice behind my remark about OPEC. Oil is the problem for salt and will be until global economics improve the currencies such that it creates a new problem, or competitive edge.
  15. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    While i realize that you may not be able to predict our energy cost in January, at this point... that still doesnt stop you from nailing in a firm price, if i said " COME TODAY, i want salt TODAY , NOW" that is my point...

    im sure you could figure out , at this moment, right now, what it costs per ton, or per truck load....

    and if no one wants to give the state a firm bid price either, then sell to them like you due to us... based on avaliblity at the time of purchase. So right now, today, i would think that it would be avalible, and that you could come up with a price, if i paid cash today, and took delivery...

    but the fact of the matter is, the brokers cant get it, because the main manufactures, are not willing to start selling it, for those that are ready to take delivery.

    anyone with basic business sence would say ...."well if the mines need to be pumped, then we should start selling it now, and make money now" this way you could afford to start pupming them out. im sure there is alot more to the other side of this coin than i realize,

    but basicly, they are all holding out for the state bids, which will be very high... and we are the "back up plan" , if they dont sell to the state at a high price, then they know we will pay it.
    Last edited: Aug 11, 2008
  16. 84deisel

    84deisel Senior Member
    Messages: 697

    got my letter from morton today my price went from$45 a ton last year to $90 a ton this year and that is at the stock pile, they also are requiring that you are have to pay for your total allotment no matter how much you actually pick up.(IE: light year, you only go through 80 % of your allotment ,in years past thats all they billed you for but now you pay for that 20% still in there pile) Also heard that morton told the state to go away and find somebody else so it looks like a rough year all around here.
  17. Zodiac

    Zodiac Member
    Messages: 76

    I buy my salt in fifty pound bags, by the pallet, from my employer. I get it at ten percent over cost. So my employer makes a little, I make a little.

    Until this year, all I had was a little Scotts spreader, I rarely used it. I had a pallet of salt (40 X 50LB bags) sitting in my garage, and I had went through a little under half of it, about prolly 900LBS or so, right around the end of January. That's when the salt shortage really hit, and I was selling bags to my neighbors for what I paid, and to everyone else for double. I was the only place you could find sale in my area. I went through the other 1100LBS in under a week, without spreading it, just by selling it.

    I was planning on buying several pallets, and loading my garage up this winter, and just hang on to it until the shortage came, then selling it.

    But today I was told they aren't sure they'll be able to even get salt, and if they do, it won't be until the end of December or so, unless something changes.

    Looks like I won't use my salter this year afterall.
  18. Patrick34

    Patrick34 Senior Member
    Messages: 102

    What I cannot figure out is why are all the brokers, suppliers etc. saying it is going to be $80-$90 per ton, and the county has there salt this year for $33 per ton. Yes, $33 per ton. Oakland county Michigan, according to their website (public information) they are buying salt for this season at $33/ton.
  19. Snowpower

    Snowpower Senior Member
    Messages: 636


    Doesn't matter if you are Exxon Mobil, Cargill or Patrick34from Michigan with his half pallet of salt.

    We gots the supply, and you have the demand. Now pay me.

  20. elite1msmith

    elite1msmith 2000 Club Member
    from chicago
    Messages: 2,762

    only if you will deliver this week, and can give me a firm price...do you want cash of check?