Price of ammo to shoot up
06:18 AM CDT on Thursday, August 9, 2007
By JAMES HOHMANN / The Dallas Morning News
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The baby needs milk. The car needs gas. The gun needs bullets.
[Click image for a larger version]
Rising dairy and oil prices grab the attention of shoppers and motorists. But the increasing price of ammunition – a consumer product the government considers when calculating the rate of inflation – has largely gone unnoticed.
The price increases began after the Sept. 11, 2001, terrorist attacks, then were compounded by a double whammy: the war in Iraq, which pushed up overall demand, and growing industrial powers such as China, which bid up the cost of needed raw materials.
The impact is widespread:
•Ammunition dealers complain of declining sales as they are forced to pass along rising costs to consumers.
•Hunters and gun enthusiasts, who initially stockpiled ammunition when prices spiked, are now making more of their own or shooting less.
•And police departments in the Dallas area are experiencing long delays in shipments and having to adjust training schedules accordingly.
"It's no good to have the gun without the ammunition," said Ken Mitchell, an ammunition dealer in Justin.
Manufacturers dramatically ramped up production after the U.S. invasion of Afghanistan in 2001, producing about 1.5 billion rounds last year – more than 3 ½ times the number manufactured in 2001, said Gale Smith, a spokeswoman for the Army's Joint Munitions Command Center in Rock Island, Ill.
But they struggle to keep up with the demand as troop deployments continue in the Middle East. Military spending on small-caliber ammunition increased from $242 million in 2001 to $688 million in 2006.
The ammunition business is also feeling the pinch because of the rising price of global commodities such as copper, brass, nickel, steel and lead.
For instance, China's torrent of construction has added to its manufacturing capacity. And the country is hungry for resources to feed its growth. The components needed to manufacture ammunition are also used for laying power lines and adding buildings to wider skylines.
"We were paying $1 a pound for copper two years ago. Now we're paying $3 per pound," said Brian Grace, a spokesman for Minnesota-based Alliant Techsystems, the military's biggest producer of small-caliber ammunition. "Not all the costs are being passed on. We've tried to soften the blow with supply chain management and improved efficiency."
Despite those efforts, dealers, hunters and law enforcement officers are feeling squeezed.
Stockpiling
Mr. Mitchell estimates that the volume of his ammo sales, which make up about half of his business, has dropped by more than half in the past two years.
Certain rounds, such as .223-caliber, used in the Army's M-16 and law enforcement's AR-15, have become increasingly difficult to find in the civilian market. Supplies of the .308 cartridge, the standard round for NATO and a favorite of hunters for its deadly effectiveness, have also tightened.
Some calibers cost only 10 percent more than a year ago; other varieties have more than doubled in price.
When prices started to rise, savvy gun owners stockpiled all they could get, sending prices even higher. Now dealers say that as soon as new supplies come in, customers snap them up.
"It doesn't matter if it's 50 cents or $3, whatever's cheapest gets bought up quick," said Robby Rucker, a manager at Southwest Ammunition Supply in Mesquite.
He said his wholesalers raise their prices from 3 percent to 10 percent each quarter. He expects more price increases in September.
That's a problem for Karl Pifer of Granbury, who specializes in manufacturing designer ammunition that costs more but performs better.
"The market is moving toward lower-quality and lower-cost ammunition that gets mass produced," said Mr. Pifer, owner of KC Precision Ballistics. "I try to stick with the prices I've got, but when they go up, it's hard. It hits me before it hits the customers."
When Mr. Pifer received a catalog in the mail last month for materials, he rushed online to place orders on the good deals. But he was too late. An e-mail in his inbox alerted him that prices had gone up since the catalog was distributed. It was, he said, the fourth increase in eight months.
Prices of factory-produced ammunition – and increased surcharges for shipping and handling – have gotten so high that more hunters are making their own in a process called hand loading.
"Guys on a budget are going back to hand loading with the price of ammo doing what it is," said Dallas resident Noel Hutcheson, 71, a retired stockbroker who hunts quail and ducks.
Sales of ammunition components such as empty cartridges and primers have grown at Mr. Rucker's family-run store each time retail prices for ready-to-use ammunition have gone up.
But do-it-yourself ammunition production isn't cheap either. Someone making his own shotgun shells is going to spend roughly a third more than last year on supplies, said Don Snyder, executive director of the National Skeet Shooting Association and the National Sporting Clays Association.
"There are some people who are shooting less," said Mr. Snyder of San Antonio, whose two groups have about 3,000 members in Texas. "It's just an additional cost to compete and enjoy our sport. There are a lot of people that jump in and pay the tariff and do it."
Must-have item
No matter what the cost, the police need to pay. Law enforcement demand for ammunition grew after 9/11 as departments increased their officers' live fire training.
Several police officials said they are paying more for ammunition and experiencing delays for shipments.
But everyone from Fort Worth to Carrollton insists that public safety has not been compromised. Of eight departments surveyed, none has resorted to giving deputies fewer bullets or pulling guns out of service.
The Dallas Police Department, which spends roughly $500,000 annually on ammunition for about 3,000 officers, used to have orders filled in six weeks. Now it takes six to nine months, said Sgt. Paul Stanford, range master for the department.
The ammunition used in patrol rifles, identical to what the military needs, costs 35 percent more than two years ago, Sgt. Stanford said, rising from $84 a case to $114 a case.
And a case of 9 mm rounds, the standard for Dallas Police Department service weapons, costs 10 percent more than two years ago – going from $98.75 in 2005 to $108.15.
The impact on smaller departments, which often don't have a special relationship with wholesalers, can be even greater.
In Hurst, which has 72 officers, Assistant Chief Richard Winstanley needs to plan a year or more ahead for what his staff might need. He has to be especially proactive to keep .223 rounds in stock.
"We have to be patient," Chief Winstanley said. "Some training has to be put off until we receive the items."
While the police and other gun owners hope prices come down, they are adjusting to the reality of costlier ammunition.
"We're still buying bullets because we don't have any choice," Dallas' Sgt. Stanford said. "It's like gas. You have to absorb the cost."
http://www.dallasnews.com/sharedcontent/dws/news/localnews/stories/080907dnmetammo.37f6a54.html
Where are they getting their 5.56 and how do I get in on that deal?
