Skip to comments.The Coming Crash in Ammunition Prices
Posted on 06/08/2014 4:00:42 AM PDT by marktwain
The Obama caused bubble in ammunition prices seems ready to bust. Over the last few years people have seen ammunition prices double or triple. Handgun and rifle ammunition has been hard to find at times. .22 long rifle ammunition tripled in price over the last 18 months. People would line up to buy ammunition at prices two and three times the level that they were just two years ago.
All of that is about to change. Ammunition supply looks as though it is ready to catch up with demand. Centerfire pistol and rifle cartridges are available on most store shelves. When I walked into a local Wal-Mart this morning, their were over 30 signs on the ammunition case indicating a rollback of prices by 10-15%.
In classic economic fashion, the bubble was fueled by actions of the Federal government. Many federal agencies bought enormous quantities of ammunition. While the quantities were only a small percentage of total production, the raw figures fueled conspiracy theories. Obama administration actions fueled fear of coming shortages, gun bans, registration of ammunition sales, even potential low level warfare. All of this led to the current bubble of ammunition sales.
In response, the economy reacted the way that free markets are supposed to work. Ammunition suppliers started running their manufacturing plants day and night, adding additional shifts. Importers scoured the world markets, trying to buy everything they could to satisfy the insatiable demand. Foreign manufacturers bumped up their production to try to fill the desire for more and more ammunition. Ammunition production was at the highest level ever for small arms, short of war.
But unlike during war, this ammunition was not being fired in combat. Most of it was not being fired at all. It was being stored against future need. Very little was actually being used.
There are limits to this sort of demand. I gave away a couple of thousand .22 rounds to make a point. A person who only had 37 .22 shells out of a box of 50 is well justified in wanting a thousand or two, or a case of 5,000 "just because". Once they have the 5,000, their desire for more becomes less. Then demand drops, likely below pre-bubble levels for a while.
In the meantime, manufactures cannot stop production instantly. They have orders in the pipeline. They have supplies coming in that they have no storage space for. They have employees that they have trained and who they do not want to lay off. For all these reasons, demand drops suddenly, but supply cannot drop as quickly. As supply took a while to spin up, it will take a while to spin down.
This means that retailers and wholesalers will be saddled with a glut of merchandise that they cannot sell at the current high prices. They will have to put it on sale. Lower prices bring about the expectation that prices will fall even further. The prices crash.
That is when a prudent person buys what they want, at very good prices. Demand will not stay at the artificially low prices of the crash. The new crop of urban, hip, shooters will want to feed their equipment, and the new demand will be higher than it was before the bubble, but it will take a while to settle out.
Metal prices have already fallen from the highs of the bubble. Copper and lead are far lower than they were. You will know that the bubble is close to the bottom when you see .22 LR on sale for below 4 cents per round. At the lowest, we might see .22 cartridges below $10 for 500.
©2014 by Dean Weingarten: Permission to share is granted when this notice is included.
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What bothers me is that we’ve gone since the 2012 election without being able to buy 22 ammo easily while shotshells have been easy to find. 22LR Is the ordinary simple stuff which people use to put food on the table in hard times and somebody in our government is bothered by that possibility for some reason. By the same token, shotgun sports are a pastime of the well-off and Bork obunga has to know that the fat cats who back him would come down on his hiney like a ton of bricks were he to mess with shotshell availability. That’s despite shotshells using far more lead and powder than 22 ammo.
.22 Ammunition takes dedicated, extremely expensive machines to manufacture. The manufacturing capacity cannot be increased easily and quickly. The political crises created by the Obama administration have bumped up the demand for .22 ammunition for the reasons that you have mentioned.
The demand for ammunition stems from a fairly new awareness of multitudes of the American public about what my father passed on to me about 1960. Ammunition shortages happen, and it is a good idea to have a stockpile. The uncertainty of the Obama administration, the attack on second amendment rights, and world wide conflicts escalating with the current administration channeling a combination of Neville Chamberlain and the Muslim Brotherhood make it hard for any but the most obstinately polyannish to be unconcerned.
There are about 80-100 million American gun owners. Millions of them are new, thanks to the Obama administration. A majority of them own a .22. Rimfire ammunition is not practically reloadable (yes, there were a few kits sold in the 1980’s). Most people did not buy 5,000 rounds as a strategic reserve. Most probably had less than a box on hand. Suddenly, tens of Millions of people became aware and thought that a thousand rounds of .22 would be nice to have. Maybe a couple of thousand. Demand for .22 has historically run under 4 billion rounds a year in the United States, which is by far the largest market in the world. My friend Alan Korwin reports that the U.S. manufacturing capacity is 4.2 billion rounds a year.
Suppose 50 million Americans decided that they would like to have 1,000 rounds of .22 on hand for a rainy day, rather like I did in the 1970s. That is 50 billion cartridges, or about 12 times the annual manufacturing capacity for .22 ammunition in the United States. My observations show me that virtually every .22 manufacturing plant around the world is running flat out making .22 ammunition for the American market, and it all gets snapped up as soon as it becomes available, at prices about three times the rate of even a year and a half ago.
Basic economics: when demand outstrips supply, prices go up until the demand drops to supply levels. This puts money in the hands of suppliers, who then ramp up production to increase supply. It is happening, but it will take a while.
You can always go to gunbroker.com and buy all the .22 ammo you want ... at vastly inflated prices.
My WalMart is now always fully stocked in all rounds they inventory, except 22LR and 22MRF. Whatever they get sells out in about 30 minutes to an hour. The reason is that they do not price gouge like many on-line suppliers.
How .22 is made. CCI plant.
I visited the local Cabelas on Fri(6/6)morning and NOT a
single box of 22cal. in the store.It’s been like that for
almost 2 years. ?????? When in America has it taken that long for supply to catch up with demand? There has to be other reasons at play!!!
With .22 at 13 cents a round and 7.62x39 at 24 cents a round most of my plinking has been SKS and AK related - more than twice the bang for less than twice the bucks.
I am not convinced that we are close to a crash.
22 LR (other than the the quiet, powderless Aguila) is still over $0.10 a round unless you have a quantity limit (in which case shipping make it very expensive) or a huge membership fee. 22 LR doesn’t stay on the WalMart shelves for very long because there’s a line before they even stock the stuff, and they have a 3 box limit. We may have somewhat caught up with the demand, but there are a whole lot of shooters who suddenly decided they want a lifetime supply of 22 LR, for themselves and for their kids. We have a whole lot of shooters who have decided they want to be proficient just in case there is a need, and not just have a gun in the corner or in the safe. There are a whole lot of new shooters who are joining the older ones and shooting regularly (I know - my last three trips to a range with well over 100 shooting stations have included waiting for my turn, or shooting 200 yards when my plan was to shoot 100 yards).
No, no other reason than an unusually persistent demand for them. Cabela’s most likely pushes the bulk of their 22LR and 22MRF sales through their online operation because I see them there more than in stores. I also see them come into WalMart, but you just have to be there when they get put out on the shelf.
The demand is there because nearly everyone now has it in their mind that their “stash reserve” has to be at least 3000-5000 rounds. So they buy until they get that, then start shooting the overage. The problem, though, with everybody doing that, production still can’t meet demand.
I bought a box of .22LR three days ago at the local Sportsman’s Warehouse in North Denver pretty cheap. And, they had a large quantity of it there.
For all other ammo I use, I go to Freedom Munitions.
I suspect prices will come down from their peak stratospheric levels, but probably not to pre-bubble levels. I am pretty well stocked accross the board, but found myself short on 9mm Makarov for which current typical pricing is about $15 to $20 per 50 rnds.
The new reality will be far higher than pre-bubble pricing and shooting will forever be an expensive proposition for the average shooter.
I agree. But I do see some signs of overstocking leading to price reductions. One case: I have a 1936 MAS that shoots 7.5X54mm French. Darned hard to get a year ago (almost impossible) and averaging about $2.25/round.
This morning at Ammoseek.com I spotted them (same as I’d bought 8 months ago at $2+/rnd) at SGA Ammo for .85/rnd. I bought 100 rnds.
Overall, though, I don’t think we’ll be seeing 2 and 3 cent 22LRs ever again.
Years ago, I attended a number of Appleseed events including one of their week-long boot camps. Their blog suggested bringing a 22LR long gun in addition to a personal “battle rifle”. As I’m sure you already know, their pick for the 22 is the venerable Ruger 10/22. After some modifications, it becomes the Appleseed “Liberty Rifle”.
I did the calculations, and the math told me the savings on 22LR ammo vs the .223 ammo I would normally have shot would be enough to pay for the Ruger. So, that’s exactly what I did. Bought the Wal-Mart 10/22 special, dressed it up with Tech Sights and some Volquartsen thingees...and lots of 22 ammo. One of the best weapons decisions I’ve made. Not to mention...it’s just a lot of fun to shoot.
I fear the shortage has put a crimp in that aspect of the Appleseed program.
I haven’t bought any ammo other than shotshells since 2012. Funny thing, prices on shotshells haven’t really changed much and, again, shotshells consume a lot more lead and powder than any common cartridges.
Agreed, and it was already too expensive.
I have used this guy ever since I was in Blackwater USA/Worldwide - most of the guys get their ammo from patriot!
.223 - 500 rd case = $185 / .37 ea
Some guys bought pallets of ammo...reliable and trustworthy.
I reload several rifle calibers. Have plenty of components, but the hardest to find in brass. It is VERY expensive for rifle calibers. Most available brass selling at $75 per hundred.
I like to shoot my 30-30 and .348 lever action rifles. Finding 30-30 brass was/is still difficult.
I look at our local WalMart ammo shelves nearly every time I go there. They certainly are NOT restocked.
But there are a lot of “hunters” who live and hunt game here. Many from outside the area.
It is not over yet. But they may be right, about ultimately having a correction. Unless Obozo totally collapses the system. I believe he fully intends to do so, unless we stop him. I see no indication Congress has the balls to act.
Appleseed, Great Program.
Ammoman’s only 22LR is $0.28 a round. http://www.ammoman.com/22-long-rifle
They have their good points, but there is no evidence there that the shortage is almost over.
They are in mine with the exception of 22LR and 22MRF. No question about it. Full.
I get .40cal, .45 cal, 5.56 & 7.62...standard shipment for what I need. I have a couple of bricks of .22 already - but that’s not for defense...the prices are good from a reliable person that i have multiple orders with over yrs...I trust the guy for what it is...sometimes a little extra $ knowing the ammo is coming from a reputable dealer means more than the bottom penny...I think .22 is over rated right now and the supply production isn’t going to increase anytime soon...so buy the serious rds now and wait out the .22 situation...
Go look at Ammoseek.com. There were 4 suppliers that were selling 22LR at .10 per round, and about 5 or 6 in the .11 per round range....still about double what they should be, though.
$10 for 500 rounds of .22LR sounds great. Sign me up. Last time I went to a gun show the best price I found was $32 for 50 rounds of CCI Mini Mag .22LR. I haven’t seen it at Wal-Mart in over 2 years.
Couldn’t find brass-cartridge 9mm for my SIL’s birthday present to save my life, but did find steel-jacket for $12 at Wally World. A significant price drop from a year ago.
Thank you for this. I enjoyed it greatly. 4 million rounds a day in that one plant (CCI)!
I think that when demand is high (or crazy high as it has been during the 0bama panic) the manufacturers are going to prioritize whichever product lines give them the most profit. I can’t say I blame them — if they are going to ramp up *everything* and paddle like crazy to try and keep up with the raging current in the market, it has to be darn well worth the increased supply costs and having to hire additional labor and/or run extra production shifts.
A big part of the problem, if not “The Biggest” (my stinky personal opinion) is we “The Consumers”. It’s funny this topic came up because just yesterday I was in Wally-World for the first time in well over 6 months (I try to avoid the place) and their ammo case was *well* stocked with centerfire of all flavors at lower prices than I last remember — except for rimfire. They didn’t have a single round of .22LR rimfire in the cabinet. I asked the lady about it and she said that whenever they get .22LR in, they limit it to 3 boxes per customer but it makes no difference. A crowd will show up and buy it as quick as they can put it on the shelf.
Another (purely anecdotal) clue: My local gun store told me they were talking one on one with a manufacturing rep for “one of the big three” rimfire manufacturers (wouldn’t say which one). The rep told them that if he went into a company meeting and urged his company to ramp up .22 production, he’d get fired on the spot. Basically, they know full well that folks are hoarding it and causing the increase in demand and they have no incentive to try to satisfy the demand and decrease their profit margin on a product that normally has a relatively thin margin. They are prioritized on centerfire, centerfire, centerfire. Or an over-simplified way to view it is that the rimfire ammo producers are responding rationally to an irrational consumer demand for a low-margin product that will eventually return to normal demand levels.
I don’t think there is an easy answer other than to get that jackass out of our White House so that the hoarders who continue to eagerly buy from fokls RE-Selling at jacked-up prices on gunbroker and the like, will regain their senses and knock it off. So, I agree the govt gets a big chunk of the blame for driving the prices up, but I believe it’s more due to merely instilling panic and fear in folks who are too easily prompted to over-buy what they would otherwise normally buy, skyrocketing the demand to crazy levels. I can empathize with their fears, but I just wish they would stop once they hit 10,000 rounds, or whatever gawd-awful amount of ammo they have stored up.
I was reading some forum the other day and a guy (could have been a girl - who knows nowadays) was talking about having 100,000 rounds of .22LR stored up. Now, he could have been full of bull-mess and just trying to sound impressive, but I really, *really* hope that there are very few like him (even if hoarding half as much), if we ever want to see .22’s return to pre-panic price levels.
Just think about it. If one is a gun collector, he’d have, say, maybe over a hundred guns. Now, what’s a good number for rounds on hand per gun? 1000? That’s 100 thousand rounds. There really are people out there that have that many.
You really don’t understand the point of the article do you?
You are so intent on making conspiracy theories about every thing that the idea of a market response is beyond you.
Out of curiosity how much 22 ammo do you stock pile?
Are you aware that all ammo becomes less effective with age?
Yep, my fav 5.56 Federal Lake City M193 is already back down to 35 cents/rd.
Waiting for the Win 30-30 to drop before buying again.
No actually there doesn’t
And that is not what is driving shortages. NEW gun buyers who have NO idea how much ammunition they will ever use or need. Some of these yobs will buy their ‘supplies’, store them improperly, and then be surprised IF they ever actually fire the weapon.
There has been a lot of weapons buying based on fear and those folks will not do the things that responsible gun owners do.
There may well be some folks with a 100 or more guns. That number is fewer than most would think and most likely involves private dealers etc. I know gun enthusiasts who are collectors and avid shooters and hunters.....IF they have 25 or 30 I would be amazed.
I agree I don’t think it is over any time soon. In Dec 2012 I placed several orders on Sportsman’s Guide specifically for .22LR. Immediately AFTER placing the order they all went on backorder status. I’d see the Estimated Time of Availability listed which was only a few weeks out. Well, once that time came the date got pushed back but this time a couple of MONTHS. Then when that time came the date got pushed back SEVERAL months. Then when that time came it got pushed back SEVERAL months again. In between all of these updated availability dates, you’d receive an email that if you didn’t confirm within 10 days they cancel that specific item for your order. You’d receive individual emails for specific backordered items on an order. If I had 3-4 types of ammo on 1 order, I would receive 3-4 emails JUST for that order alone. It seemed like every month I would get one of these emails. I had to have had at least 10 orders in total and 90% of it was for .22LR. Fast forward to March of 2014 and I receive a cancellation notice for ALL the orders that were waiting for .22LR. So not only did I not receive any ammo after waiting over a year, I had the BS of keeping track of all backorder items and compliantly confirming I wanted them every month for each item and the $29.99 membership to save 5% on ammo was expired at the end of this backorder waiting period and I wasn’t able to even get that refunded to me. I am done with Sportsman’s Guide and their bait and switch schemes. They’ll let you order items that appear to be in stock, but then once you pay, they show up as backordered items. To me that is shady. AVOID!
I never did say it was ‘the’ cause of the shortage. I was commenting on the comment about the owner that had 100,000 rounds and equating that with something about which I do have some knowledge.
Or just go to Alberta and pay 25 bucks for boxes of 550. Winchester.
That’s not a bad price for 223. I sold my rifles in that calibre though. I prefer robinson arms in .308 for my main rifle, in all my years running around as tip of the spear, I’ve never used any rifle so nice as that one.
The Walmart closest to me has no rifle or pistol ammo, only shotgun shells. And it has been that way for two years.
I don’t necessarily travel in “gun nut” circles but I know four guys that do not know each other(I am the common link) that have well over 100 guns each. And they do not consider them selves gun nuts. Only one could be considered a trader that buys and sells to trade up to the exotics he wants. Stop and think a family of four should have a minimum of 20 guns; shotgun, handgun, MSR, plinker and a deer rifle EACH.
Since when should a family of four have 20 guns??? You live in a very very strange world
My dad was a collector. I grew up around guns. I love shooting and hunting.
May I pint out to you that I can only fir ONE at a time??? Maybe on a good day I could do a Rooster act but RIFLES are one at a time.
I am beginning to not believe anything you say. Your list is just nonsensical. So BS on your knowing four who own over a hundred guns each.
Your scenario is precisely the one I envision. Anyone who truly believes ammo prices will “crash” is living in never never land.
Once again, thank you.
Curious where you LIVE? My guess is CT, CA, MA, OR NY. Am I close?
Curious where you LIVE? My guess is CT, CA, MA, OR NY. Am I close?
Gun are tools. It takes different ones to do different jobs. If you want to go wing shooting it takes a shotgun. If you want to go plinking it takes a 22 or 17hmr.
I don’t care if you believe me or not. The numbers are on my side not yours
Yep. With cast bullets, I can reload my old 30-30 for $.12-.15 per round. It is still a lot of fun to shoot.
There are other reasons. Here's the big one.
The price of 5.56,9mm,45acp etc. has caused GUN manufacturers to produce a large array of new .22 versions of their larger caliber firearms. They did this to fill the demand for firearms that are affordable for training and recreational shooting. Now suddenly the number of shooters wanting .22 ammo to feed these new guns had risen dramatically. So the reality is .22 ammo is wiped out everywhere because of the price of larger caliber ammunition.
...There really are people out there that have that many...
It makes me wonder if those types of collectors are the rule or the exception? I can't imagine there are enough of those types of collectors to starve the country of ammo though...
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