The Supply of Salt

salt

I woke up this morning to the site of 8 inches of snow. My first thoughts were great! – no school today. (teachers enjoy a day off as much as students).

Quite a few county councils have been alarmed at how quickly their stocks of salt for gritting the roads has dwindled. There appears to be a mixture of responses. Some ministers and councils say there is no shortage, others say there is a real problem. Often the issue seems to be local bottle necks with some councils struggling to get supplies. (Guardian story on salt stocks)

The local paper in Oxford ran a story of how the price of salt has been rocketing as people try to get their hands on dwindling supplies.

Salt is one commodity which traditionally has a very inelastic demand. – There are few alternatives to salt and it is generally quite a small % of income. As price of salt rises, people (and county councils) are going to be willing to pay the higher prices.

The elasticity of supply appears to be reasonably responsive, with councils taking imports from abroad. The main supplier in the UK is the Winsford mine in Cheshire which can produce about 30,000 tonnes of rock salt a week – a figure equal to the amount councils are spreading.

However, the supply of rock salt is being hampered by blocked roads around Cheshire. Also, councils are reducing the amount of roads that they grit. I doubt they will ever get round to my road.

The bad weather could be good news for some people. I bought a mountain bike with big fat tyres. And I guess the people gritting the roads have a lot of opportunity to get overtime….

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