The primary reason ammunition is demilled is because of powder deterioration. Gunpowder has an "indefinite" lifetime. The wording is subtle, and some have miss read indefinite, which means unknown, as infinite, which means forever. Gunpowder is a high energy compound breaking down from day one to a low energy compound, which means it follows the second law of thermodynamics. In this, the real universe, the laws of thermodynamics apply to everything. Because gunpowder does not deteriorate according to a predictable timetable, first world nations spend hundreds of millions of dollars a year going through ammunition stockpiles, identifying ammunition in which the propellant is too old and too dangerous to keep in inventory, and that ammunition is broken down. Poorer countries simply let their ammunition depots explode.
Even though the Small Arms Survey group is anti gun, anti war, they have the best information on the amount of weapons and ammunition in the public domain.
If you are interested in more information on this topic:
Stockpiles http://www.smallarmssurvey.org/index.php?id=334
And a short treatise on
Industrial Demilitarization of Conventional Ammunition
http://www.smallarmssurvey.org/fileadmin/docs/H-Research_Notes/SAS-Research-Note-37.pdf
For many, the idea that ammunition does not last forever, and the humongous amount of ammunition that is demilled every year is absolutely beyond their comprehension. But all someone has to do is search the internet and they will find lots of information.
b]Army Not Producing Enough Ammunition [/B]
http://www.nationaldefensemagazine.org/archive/2003/May/Pages/Army_Not3866.aspx
Regardless of what the Army decides to do with its industrial base, the fundamental issue does not change: the Army needs to produce more war reserve ammunition, Naughton said. Time is running out, he said. “Most of the ammunition in the stockpile today was built 20 years ago during the Cold War buildup.” Most rounds are designed to have a shelf life of 20 years. “We are outside the envelope of the shelf life on 40 percent or more of our existing ammunition. The rest is rapidly approaching the end of its shelf life.”
Ammunition does not “go bad” overnight, after it reaches a certain age, but “once it’s over 20 years old, the reliability rapidly degrades,” said Naughton. Within a few years, it will become increasingly difficult to shoot it. “You can predict that you’ll lose 7-8 percent of the ammo after the 20-year mark.”*
To replace the obsolete rounds, the Army would have to produce 100,000 tons of war reserve ammunition a year for the next seven years. Past that point, it would need 50,000 tons to 60,000 tons a year to sustain the stockpile. That represents about “half the level of the Cold War buildup,” he said.
* I think what is meant, 7-8 percent per year after 20 years.
Anyway, gunpowder from demilled ammunition is just at the point of being dangerous. Its shelf life has been used up. Old gunpowder will auto combust and it burns un predictably, both of which have burnt houses and blown up firearms. I do not know where to find the policy, but I believe the US Government figured out sales of surplus powders was a bad thing, due to house fires, and disallowed the selling of any more old surplus powders from US inventories. I do not know where sellers are getting their current stock of surplus powders, but the amount on the market is not as much as when Talon was selling.
I found old surplus gunpowder not to be a bargain. I bought kegs of the stuff before I found out about the problems of old gunpowder. I have poured out about three quarters of all surplus gunpowders because they had gone bad. If I had spent that money on buying new powders, I would saved money because I would have had useable gunpowder.
Even surplus cases can have issues. As gunpowder deteriorates it releases nitric acid gas. Nitric acid gas attacks brass. I have had, and seen, cracked case heads, neck splits, body splits, from old brass. Condition of demilled brass can vary considerably. If it is dirt cheap, it can be worth buying, even if you have issues.
place and pay more to have it demilled, keeping American manufactured ammunition out of the hands of the Constitutionally mandated militia.