Ammo selling out?


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kellyj00
July 24, 2007, 12:17 PM
I've been shooting for almost a decade now and I'm amazed at what's going on with ammo.

I thought it was limited to just the enthusiasts who participate in THR and to inflation raising the price of everything (including ammo) but it turns out to be a little worse.

Ammoman.com is a great place to pick up a bunch of loaded ammo for fairly cheap if you buy in quantity. After looking through the .45acp, 9mm and .223 sections of his website and seeing half of his items "sold out, more in soon" I'm starting to get a little confused about what we're doing to ourselves here.

The military infantry doesn't shoot .45acp any more. And he's sold out of more 45acp products than 9mm products. 9mm products are going up in price, however and are about 2/3 the cost of 45acp now. They used to be about half. 40 s&w costs are actually about the same proportionally as they always have been, right under or at the same cost as 45acp. He's even selling out of 22lr ammo!

I don't know anything at all about the ammo business, I'm just a guy from Kansas who likes to shoot. but I can tell you this, our gov't isn't giving Isreal all of our 22lr ammo, and they're not shooting all the .45acp in combat. So, I'm starting to think that maybe, just maybe, all this increased demand because everyone is "stocking up" is causing the prices to go up. It's the only thing that makes sense, a little inflation and all these rumors about where all the ammo is going is causing folks to 'stock up' because they're just scared that we may not have any ammo before too long, or it will be in limited enough supply to warrant a ridiculous price jump.

I'm not an economist, but if we just start finding alternatives to this and lower the demand we'll all be better off. Same thing with gasoline, they raise the prices, we pay it...so they keep charging for it because 'if we can sell it at that price, why ruin our margin' this isn't some gas price rant, this is an ammo price rant, but how can Exxon return the HIGHEST PROFIT OF ANY PUBLIC COMPANY Q3 of 2006 unless they are making money on their product? Simple, they are making more $$$ and we're giving it to them.

So, reload your own ammo. You'll keep the prices down and you'll save yourself a bunch of money.... I don't care about those things, I'm already reloading my own. What I do care about, however, is that you'll stick it to the ammo companies for taking advantage of sportsmen these past few years. The sport is easily over a century old, but all of a sudden the prices jump? Why? because they have the information in front of them that says we buy more ammo when they raise the prices.

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ConfuseUs
July 24, 2007, 12:41 PM
Since ammo is made out of brass, lead, copper, and powder and there is only so much supply/production capacity for all of these things then it is not unreasonable to think that major ammo manufacturers are doing several things to meet the demand right now. For one thing they may be dedicating production lines for loaded ammo to making 9mm, 5.56, and 7.62 ammo instead of other calibers to fill U.S. gov't contracts. That means that ammo like .45 is selling out because no new supply is being generated. Sooner or later reloaders will feel the pinch as well since undoubtedly production lines are allocating less and less time to projectiles and components other than 9mm, .223, and .308 as well. The same probably will apply to powders too.
So although reloading is usually a cost effective source of ammo it will not fix this problem because the materials for components are the same materials used in military ammunition.

BobCat
July 24, 2007, 12:46 PM
Jason,

Yes, we buy more ammo when they raise the prices - because we wish to stockpile what we can before the prices go even higher. This can be called prudent or it can be considered panic buying. In either case, demand drives prices up.

About ten years ago there was a rumor (possibly more than a rumor - nobody appointed me omniscient) that primers were going to become unavailable. Primers became hard to find and prices went up. You reuse brass, you can cast bullets, and a can of powder lasts a while - but nobody thinks they can manufacture their own primers, so when the supply seems threatened people stock up. After everyone bought enough primers to be happy, they became more available and prices dropped.

Metals prices and energy prices are on the way up. Global demand for manufactured goods is going up. Prices for all sorts of things reflect this.

I agree with you - reload. Save your brass - even .22 brass can be sold to the recycler, don't leave it at the range. If you pick up brass in calibers you don't load or shoot, give it so someone who loads that caliber or sell it to the recycler.

This is a pointless post. I'm basically agreeing with you that reloading is the way to go. I'm getting old and am shocked at the prices of things - a box of 50 good-name .22 cartridges was a dollar for most of my life, gas was a quarter a gallon when I started driving, and a Coke or cup of coffee was a dime. Just store all those cases of primers and those kegs of powder safely, reload lots, shoot lots, and have a good time.

Regards,
Andrew

M2 Carbine
July 24, 2007, 12:54 PM
So, reload your own ammo. You'll keep the prices down and you'll save yourself a bunch of money

True, but the cost of components has increased about 100% from about a year ago.
Still beats the heck out of store bought though.

Even at today's prices these 45ACP cost less than $4/50.:)

http://img.photobucket.com/albums/v135/Bell406_206B/45incans.jpg

strat81
July 24, 2007, 12:59 PM
First off, this is America: Exxon can make as much money as they want. When the .gov starts telling people they can only make $xxx per year, what's next? You can only own x # of guns? Eat x calories per day? Drink x number of beers during the big game?

I am not in the ammo industry either, but I'm thinking that many ammo factories can only produce a certain number of calibers at once. So, since production has shifted to .223, there's a shortage of .45. When supply is low and demand is high, the price goes up.

For ammo, try www.leeprecision.com.

kellyj00
July 24, 2007, 01:07 PM
"First off, this is America: Exxon can make as much money as they want. When the .gov starts telling people they can only make $xxx per year, what's next? You can only own x # of guns? Eat x calories per day? Drink x number of beers during the big game?"

Capitalism is exactly my argument, strat81. We're paying these outrageous prices and it feeds this cycle.

"So, since production has shifted to .223, there's a shortage of .45. When supply is low and demand is high, the price goes up."
What is the current production level of .223? How much higher than everything else is it? Does anyone have any numbers for this?

wdlsguy
July 24, 2007, 03:14 PM
When supply is low and demand is high, the price goes up.
And increased prices provide an incentive for increased production. Econ 101 in action.

kellyj00
July 24, 2007, 04:02 PM
wdlsguy: that's why there are so many ferrari's and aston martin's and so few fords and chevys. That also explains the extreme oil/gasoline surplus of the past few years.

wdlsguy
July 24, 2007, 04:13 PM
that's why there are so many ferrari's and aston martin's and so few fords and chevys. That also explains the extreme oil/gasoline surplus of the past few years.
There doesn't appear to be any shortage of Ferraris, Aston Martins, Fords or Chevys. And the gas station always seems to have gas when I need it. Please, do yourself a favor and take Econ 101.

ETA: Something tells me a Ferrari is a bit more expensive to produce than the average Chevy.

kellyj00
July 24, 2007, 04:41 PM
increased prices don't provide an incentive for production. Demand, err, rather aggregate demand (we're talking about the past few years) is what causes production to go up.

They price is "what the market will bear" in a Capitalist society. In this case, we're telling them to raise the prices as we're buying what they're making.

Gas stations will always have gas when you need it. We will never fully run out of gasoline, as technology makes gasoline less of a requirement prices will go down with demand for the product. OR, supply will decrease as it just gets harder and harder to find light sweet crude to refine. We will never run fully out of gasoline, it will get too expensive for anyone to drive anywhere in the second scenario. I'd rather walk than pay $500 for one gallon of gas that gets me 30 miles, and the rest of us will too.

Increased profits provide incentive for increased production. Common sense in action. If I were going to just give away my old clothes, I wouldn't go to the trouble to throw a garage sale, but for a few bucks it's worth the extra trouble to make some signs and give up a Saturday. Economics isn't necessary for this one.

wdlsguy
July 24, 2007, 05:02 PM
increased prices don't provide an incentive for production.
Increased prices are an incentive for production, just as decreased prices are a disincentive for production.

Demand, err, rather aggregate demand (we're talking about the past few years) is what causes production to go up.
And when demand outstrips supply, prices go up, creating an incentive to produce more.

They price is "what the market will bear" in a Capitalist society. In this case, we're telling them to raise the prices as we're buying what they're making.
Increased prices are a signal from the market that demand exceeds supply. If a bunch of producers decide to raise prices, all it takes is one producer to maintain his current prices, and take away market share.

Gas stations will always have gas when you need it.
I guess you weren't around during the Arab oil embargo.

We will never fully run out of gasoline, as technology makes gasoline less of a requirement prices will go down with demand for the product.
Reduced demand leads to reduced prices, increased demand leads to increased prices.

Increased profits provide incentive for increased production.
And increased prices are a major component of increased profits. Econ 101.

miko
July 24, 2007, 05:38 PM
"So, since production has shifted to .223, there's a shortage of .45. When supply is low and demand is high, the price goes up."
What is the current production level of .223? How much higher than everything else is it? Does anyone have any numbers for this?

http://www.lewrockwell.com/higgs/higgs62.html

According to the educated guess of military researcher John Pike, the director of GlobalSecurity.org, U.S. forces have expended at least 250,000 small-caliber bullets for every insurgent killed in the present wars.


According to a July 2005 report by the Government Accountability Office, "[b]etween fiscal years 2000 and 2005, total requirements [per year] for small caliber ammunitions more than doubled, from about 730 million to nearly 1.8 billion rounds, while total requirements for medium caliber ammunitions increased from 11.7 million rounds to almost 22 million rounds."


Most of the U.S. forces' small-arms ammunition is manufactured by contractor Alliant Techsystems (ATK), which operates a government-owned plant located near Independence, Missouri. In 2004, however, ATK's 1.2 billion cartridges fell short of the government's demand. Army Major Gen. Buford Blount III stated, "We're shooting it almost as fast as they can produce it." As an emergency measure to help make up the shortfall, the government also contracted with Winchester Ammunition (a division of Olin Corporation) and Israel Military Industries, Ltd.


For the four fiscal years 2002-2005, the military's small-arms ammunition "requirements" totaled nearly 5.6 billion rounds. With approximately 3.6 billion being added during the next two years, the total for fiscal years 2002-2007 comes to about 9.2 billion rounds.

On top of that demand increase, the price of base metals went up even as the dollar slumped.

miko

hotpig
July 24, 2007, 06:08 PM
I have about two weeks worth of ammo inventory in stock. If Winchester will ship me my order from last October I will be ok on Ranger hand gun ammo.

Federal should be shipping my Tactical ammo later this summer. If neither comes in soon I will be out of business.:cuss:

DomMega
July 24, 2007, 06:16 PM
I'm not an economist, but if we just start finding alternatives to this and lower the demand we'll all be better off. Same thing with gasoline, they raise the prices, we pay it...so they keep charging for it because 'if we can sell it at that price, why ruin our margin' this isn't some gas price rant, this is an ammo price rant, but how can Exxon return the HIGHEST PROFIT OF ANY PUBLIC COMPANY Q3 of 2006 unless they are making money on their product? Simple, they are making more $$$ and we're giving it to them.

So why not take some of the profits for yourself? Do what I do and buy some shares of Exxon and keep it in your portfolio. This IS America and we can be smart and invest in companies that always have a high turnover. Imagine seeing gas prices rise and saying to yourself, "Man, I'm making some REAL money right now!" Be observant, watch for products that are revolutionary or that everyone depends on and you'll find yourself raking some in yourself. Lets not hate on Exxon because they're a good company and make a product that everyone depends on. Instead, lets cash in on it and do some great things with the earnings.

As far as ammo goes, I rarely have a hard time finding most calibers unless its .308 which are being used in Iraq and Afghanistan. They've got plenty of everything else at my range for the same price I was paying months ago. No worries there.

hotpig
July 24, 2007, 06:41 PM
Unless your range has a five acre warehouse loaded to the rafters with ammo you are just shooting on borrowed time.

I did the same as your range. I stocked up early last year. I have not raised my prices on Ranger handgun ammo in over a year. I have not raised prices on my Federal Tactical ammo in a long time either.

The reality is there is not much ammo to replace what I have sold. Some of my ammo will go up a lot since there has been multiple price increases that I was fortunate to be able to avoid before.

gak
July 24, 2007, 09:25 PM
and a Coke or cup of coffee was a dime.

The nightclubs up here sell coke for seven dollars a glass with 80% of it ice.

When I watch people buying mixed drinks for 15 bucks a glass with just a splash of alcohol I realize I'm in the wrong line of work.:(

CU74
July 24, 2007, 11:46 PM
I remember dime Coke and coffee. I also remember the embargo gasoline lines. It looks like "Buy it cheap, Stack it deep" is morphing into "Buy it today, Stash it away".

I'm buying now.................

Hypnogator
July 25, 2007, 12:29 AM
Bad news for reloaders, too! There is a serious primer shortage. I was in Sportsman's Warehouse in Lewisville a couple of days ago, and they were completely out of small rifle primers (think, .223/5.56mm). Sent one customer to a competitor because their distributer was backordered indefinitely. :uhoh:

saspic
July 25, 2007, 12:43 AM
http://www.newsday.com/news/politics/wire/sns-ap-the-bullet-business,0,6193072.story?coll=sns-ap-politics-headlines

Newsday has a story on the current boom in the ammo making industry. Apparently what's good for them is bad for us. Remember that period pre-9/11 when ammo prices were decent? Turns out that was like the dark ages for ammo makers. Massive layoffs and closures.
They're planning a "soft landing" after this boom period, which, I hope will include surplus ammo deals for us.

rockinrussky
July 25, 2007, 12:52 AM
Just another perspective on this economics debate over ammunition...
(I've minored in Econ in college so hopefully this will be helpful)
Given, for instance that there is increased aggregate demand for 5.56 NATO. Increased demand, quantity being equal will naturally bring up the price, but there is another thing at work here. The manufacturer may also not be able to keep increased produciton without increased costs to himself. I don't have the graphic on hand but in any comapany within any industry the (marginal) costs of creating additional product will at some point hit a sweet spot where its very low, but eventually the costs will increase to the point where the company has no reason to keep making the product. Thus a company will only increase its production up to the point where its still profitable, ideally. For instance, if a company has been putting out 1 billion rounds of Caliber A (5.56 Nato for instance) and all of a sudden gets aggregate demand for 4 billion rounds, it may not be able to retool all of its factories or even see it as cost efficient to keep up with demand. Thus, higher prices are created partly through demand, and partly through the increased marginal (additonal costs per one more round made) costs that the manufacturer endures as a result of the demand.
Whew, I hope that was a bit helpful. My personal suggestion for the short term? Reload and buy milsurps in bulk (economies of scale anyone?)
-Andrey

jwharris
July 25, 2007, 01:12 AM
I'll throw in another possible reason costs are going up.

One excuse I've heard is that China is buying a lot of our scrap for their manufacturing. This causes two problems:
1) less supply, here means higher prices,
2) to ensure they are getting as much scrap as possible, China is paying higher prices, thus increasing the cost competition is willing to pay so American buyers of scrap have to pay higher prices.

Higher material costs mean higher end product costs.

I've not studied the matter, but this is the excuse one of my suppliers is offering.

kellyj00
July 25, 2007, 09:43 AM
"Just another perspective on this economics debate over ammunition...
(I've minored in Econ in college so hopefully this will be helpful)"

Well, I was a minor in econ too, i guess. I took 15 hours of Econ, but by the time my school had MIS worked out all my economics credit became elective towards my major. Then again, what does a college degree get anyone anyway. I haven't even taken my degree out of my file cabinet since I got it back in 2006 after spending 6 years in full time business school (12 hours is full time in my parts) I also took one marketing class, maybe two...don't know how you count it.

My point being the marketing of Grey Poupon mustard. Originally it was put on the shelf in the 80's as a substitute for regular yellow mustard. It didn't sell well, folks saw it on the shelf and thought it was just some French mustard directed towards the french immigrants or whatever (kinda like how I never buy anything from the ethnic section where it's all written in spanish) Anyhow, the manufacturer (Kraft, i think) was about to pull it off the shelves and give up on the product, figuring the sharp taste wasn't what American's wanted or expected. They continued selling to the retailers, but jacked the price up on their remaining inventory in order to get grocery stores to raise the shelf price. Kraft saw sales skyrocket, they started producing it again. Figuring that the price gave folks an illusion of luxury, they started the ad campaign "pardon me, do you have any grey poupon?" the product is still on the shelves today at that price and now has generics.

Buying ammo at higher prices makes ammo manufacturers think "why sell it for cheap, when we can sell it at a higher margin"

wdlsguy, rockinrussky if you haven't read the book Freakonomics, I would suggest it. It's written on a pro-gun slant, but it's definitely not a right-wing book. It's one fella's (Levitt) view of how economics affects everything from crime to racism and is very entertaining.

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