Question-and-Answer Session
Operator
Thank you. (Operator Instructions ). You have a question from the line of Garik Shmois from Longbow Research.
Garik Shmois - Longbow Research
First question is on the pricing mix out west. Just wondering if you could quantify what percentage of your shipments were negatively impacted by the ballast in the [fill material] you were shipping.
Don James
It is probably in the neighborhood of 1 million tons.
Garik Shmois - Longbow Research
Are these short-term contracts in nature that you expect to roll over here in the near-term? Or should we expect this negative mix to persist through the balance of the year?
Don James
No. The fill material was just a byproduct material that did not meet expectations for construction grade material. It does run through our plant, so we count it as production in sales, but we stockpile that material routinely and then when there is a project that can consume it, we will sell it for that project. So I don't imagine we will see the impact of the fill material in anything like the same degree that we saw in the first quarter. Railroad ballast sales will continue. That is a new product line for us in the west.
We acquired a quarry outside of Sacramento that produces a substantial amount of railroad ballast. It was not in our portfolio in the last quarter. Railroad ballast has actually been one of our stronger product lines in the first quarter, and so that product requires less processing and is sold at, probably on average $3 to $4 a ton lower than material going into asphalt and concrete.
Garik Shmois - Longbow Research
Just a couple more quick questions on stimulus. Obviously, you are hopeful that the second half of the year you are going to see an improvement in volumes. But is there a rule of thumb that you can point to as far as how quickly you can start shipping after a project has been obligated by the state?
Don James
It depends on the nature of the project. For resurfacing projects, it goes very quickly. Many of these, as you are aware, are resurfacing projects, so we would expect to see some volume. We don't have enough data to try to pinpoint whether it is going to hit in the third quarter or the fourth quarter of '09 or the first or second quarter of 2010. But these projects we believe will move faster than highway construction projects have historically. There aren't very many big earth moving projects in these stimulus package projects that take a long time to get done.
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