Blame Ohio for high salt prices

ODOT has done an analysis of why road salt is so scarce and expensive this winter. And it’s not all a matter of high energy prices and low stockpiles:

In the report, ODOT Director James Beasley points to bidding behaviors by Morton Salt and Cargill Incorporated in which “the two firms created county-by-county monopolies.” Both companies operate mines beneath Lake Erie and other Great Lakes.
But Beasley also is careful to spell out how Ohio statutes, passed in 1983 under House Bill 271, stifle competition.
The laws mandate ODOT buy salt from Ohio producers when two or more in-state suppliers exist and stipulate either Morton or Cargill win any Ohio county when both firms submit a bid for selling Ohio-mined salt.
“Price savings that might result from competition are not realized under this statute,” the report states. “When the bids for road salt were received from Ohio suppliers, no ODOT county received more than one bid. Because each county received only one bid from either firm, Morton and Cargill never competed head to head against one another.”

My Commie readers (if there are any) would say, “They’re colluding in restraint of trade.” Well, yes. But they doubtless colluded to get this law, and the state is a partner in the collusion. Any deals they make about bidding are just frosting on the cake. Then there’s this:

Further complicating the price issue were “minimum-maximum” regulations in ODOT salt contracts. The contracts require Morton and Cargill to mine and provide a maximum amount of salt to communities, but those contracted communities may only be required to buy, at minimum, one-third of the salt produced.

There’s a cost to store salt that might or might not be needed, and that cost needs to be passed on to the consumer. The certainty of having salt available might or might not justify the cost, but it is a legitimate cost.

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One Response to Blame Ohio for high salt prices

  1. Moartodo says:

    If this law has been in effect since 1983, why did it take over 25 years to stifle competition? Just sayin’.

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