Guns & Ammo Network


Collapse bottom bar
Subscribe
Gun Culture Ammo

G&A Perspective: Panic Purchases and the Volatile Ammo Market

by Kyle Wintersteen   |  June 27th, 2013 36

Within weeks of President Obama’s 2008 election, my grandfather purchased an extra 100 rounds of .45 Colt and .357 Mag. I thought he was silly, and maybe even a little paranoid.

“I just don’t like the uncertainty of having him in power,” the retired law enforcement officer and Korean War veteran told me. “[Obama] hasn’t shown an interest in gun control yet, but who knows? I want to have the ammo I need on hand, just in case.”

Months later, I wish I’d followed grandpa’s lead. Supplies of popular calibers such as .223 Rem., .45 ACP, 9mm and .22 LR dried up. Twelve-gauge soon followed. In 2013, nearly all calibers—even the most obscure—are in frighteningly short supply.

My grandfather was partially correct. Walking into a big-box retailer and buying all the rounds you want has become a distant memory under the Obama administration. However, the president has not made a direct, legislative impact on the shortage. Instead, a variety of factors are at play, all of which are delaying the ability of ammunition makers to meet consumer demand. Let’s take a look at the volatile ammo market, including what it will take to get us out of this mess, and how long it may take for better days to arrive.

Unprecedented Demand
Industry experts believe the issue boils down to overwhelming supply and demand. The U.S. civilian market has never felt a more insatiable appetite for ammunition.

“There is unprecedented demand for ammunition occurring all across the United States, and there are several contributing factors,” said Larry Keane, senior vice president of the National Shooting Sports Foundation. “One is there are simply more guns in civilian possession in the United States than ever before. There are now more than 300 million firearms in civilian possession and 100 million civilian firearm owners. According to one of our surveys, 20-25 percent of purchases are by first-time buyers of firearms.”

Based on those estimates, there are approximately 20 million more gun owners in America today than during the George W. Bush administration. When people purchase firearms—guess what—they also buy ammunition. Should it be a surprise that the supply chain is strained?

The economy may also factor into the surging demand.

“We also think part of what’s driving the demand is the general economy, which—to be fair to this administration—is poor at best,” Keane said. “In tough economic times, there’s a fear of crime and instability, which leads many people to purchase firearms and in turn ammunition.”

Certainly, the political climate also plays a role. Spikes in firearm and ammunition sales occurred following Obama’s election in 2008, his subsequent reelection in 2012, the political response to recent events and pretty much anytime Joe Biden opens his mouth.

“People buy firearms when they fear restrictions on their Second Amendment rights,” Keane said. “Following the Newtown tragedy, we’ve seen even more heightened concern about gun control at the federal and state levels. Particularly at the state levels, that’s become reality in Colorado, New York, Maryland, Connecticut and elsewhere. There’s definitely a consumer reaction when politicians discuss erecting barriers to the exercise of the Second Amendment.”

Can’t We Just Make More Ammo?
The frustration of empty ammo shelves has caused some gun owners to search for someone to blame. Oftentimes, ammunition manufacturers seem to be the common-sense scapegoat.

Many folks wonder why ammo companies can’t just ramp up production.

“All U.S. manufacturers are making ammo 24 hours per day, seven days per week—I’m not sure they can do much more than that,” Keane said. “We get calls from retailers constantly asking why they aren’t making more, and we have to explain that there’s only 24 hours in a day.”

For those who argue manufacturers should expand their production capacity, let’s think realistically for a second. Imagine you’re the CEO of an ammo company—your operation has a high sales volume and low profit margins. Adding production capacity to your factory through building machinery and hiring additional workers is no small investment. As a businessman, will you ever see a return on investment if the current demand subsides?

Like it or not, ammo makers have a business to run, and expanding factories to meet short-term demand doesn’t make sense to their long-term health. If you think manufacturers are enjoying the run on ammunition, you couldn’t be more wrong. They are in full public relations crisis mode, based largely on accusations they aren’t doing everything possible to increase supply.

According to Neal Emery from Hornady, “We are producing as much as we can, much more than last year, which was a lot more than the year before, etc. No one wants to ship more during this time than we do.”

Most companies are directing common queries to press release statements rather than offering specific comment—probably to keep things consistent, but also because they lack sufficient time to individually answer all the ammo queries pouring in.

One of my friends who works for a major ammunition maker is worried sales will plunge as consumers realize they purchased all they’ll need for a while. In that case, companies may have to lay off employees, not just including those hired to keep plants rolling 24/7

Suffice it to say, the blame does not lie with ammunition manufacturers. They want the chaos to end as much as we do.

How Gun Owners are Reacting
Perhaps the most regrettable aspect of the short supply is how it’s forced many people to shoot less.

“Instead of going to the range and shooting a few hundred rounds of .40 S&W, I’ll shoot about 50 rounds,” said Alex Dawes, president of a Penn State student activist group known as Nittany Lions for Concealed Carry. “I have, however, started shooting skeet and trap a lot more because 12-gauge target loads are much easier to come by.”

Ron Lutz, owner of Ron’s Gun Repair in Lemont, Pa., has adjusted his shooting habits as well.

“I don’t have a good supply of .30-06 for my M1 Garand or .223 for my ARs, so I’m worried about shooting them,” Lutz said. “I reload my .357/.38 and my .45 ACP, and have a lot of bullets, primers and powder, so I’m okay there too.”

Another common question is regarding the rate by which consumers are stockpiling more ammunition than they need. We’ve all heard incidences of consumers buying cases of ammo and attempting to gouge prices. However, a larger driver likely results from consumers who fear if they see ammo and don’t buy it, it may be more expensive next time—or it won’t be there at all.

“That’s a normal economic reaction when supply is tight,” Keane said. “And it becomes sort of this self-fulfilling prophecy. Consumers are buying more ammunition than they need, because they’re afraid they won’t be able to get it later. In doing so they further increase the supply/demand disparity we’re experiencing.”

Some suppliers have sought to slow this process by rationing ammo. At many big-box retailers, for instance, purchases are limited to 75-100 rounds per consumer.

“The strategy [of limiting purchases] does keep ammunition on the shelves longer, which helps clamp down on the idea that I better buy now or it won’t be there later,” Keane said.

However, that solution hasn’t been convenient for high-volume shooters.

“I bought most of my shells at the local Wal-Mart until they began limiting me to three boxes,” said professional gun dog trainer Mike Wallace, who owns Salmy Acres Kennel in Kearneysville, W.V. “I can go through [75-100 rounds] in a single day, so I’ve started ordering a month’s supply of shells online every two weeks to avoid back orders. Cabela’s has been my favorite in terms of price and convenience.”

Is There a Government Conspiracy?
Another driving factor of consumer fear is the theory that the government is trying to assert de facto gun control by snatching up all our ammo. Many conservative bloggers have alleged the Department of Homeland Security’s purchase of 1.6 billion rounds is all the proof we need. Several news outlets falsely suggested the ammo buys would occur in a single year, when in fact it’s over the course of five years. Still, that’s a lot of bullets for a single government agency.

“All ammunition manufacturers say that purchases by law enforcement and the federal government have not been atypical,” Keane said. “Nevertheless that rumor is out there and a lot of people are concerned, which has driven a lot of purchasing.”

Predicting the Future
We’re stuck in a vicious cycle in which supply is limited because consumers snatch up ammo when they see it. Consumers continue to ask how much longer this cycle can keep going on.

“If I could accurately predict that, we’d be having this discussion from my yacht,” Keane chuckled. “I don’t know more than anybody else, but one of the factors is how much gun control continues to be discussed in the media. If anti-gun politicians take to the airwaves, it certainly won’t help demand subside.”

Whether supply has slowly begun to improve seems to depend who you ask. Low-brass shotshells are in fairly decent supply, but good luck finding high-brass. Same for the most popular handgun and rifle cartridges. Some consumers claim they’re in somewhat better supply than months ago, but others argue the shortage has never been worse. Unfortunately, the supply and demand disparity is difficult to measure.

“This is the sort of thing that drops off over time,” Keane said. “It’s not like flipping a switch, but things will get back to normal. Manufacturers are constantly finding ways to improve efficiency. So either they’ll boost capacity—demand will go down—or as often happens we’ll see a little bit of both. Regardless, surges in demand for ammunition have happened before, and we will get back to economic equilibrium.”


G&A Polls

Loading...

powered by
  • http://www.tds-us.com/ TDS

    One thing I can tell you is that just like every year, no matter what the political climate is, we (the firearms industry) have entered the “Summer Slump”. Sales of anything, even the hardest to find round, have dropped to the point where wer’e shipping sometimes once a week.
    Ammunition shipments are now beginning to arrive as many retailers have run out of money and are canceling their orders. Limited sales leaves less cash to lay out on inventory.
    Odd how the driving factors have evaporated like standing water in the summer heat. Surely as every year, sales will skyrocket again come September and all the panic will surface again.

    • Rob Pobe

      Yeah ammo is hip deep in every state in the Union

      • tiko

        Patience pays off. 40sw? Got it. 45 acp? Got it. 223? Got it. 22LR? Got it. 9mm? Got it. Frequent sporting goods stops required however. I have heard all of the conspiracy theories. I have heard hostile customers screaming about no 22 ammo. I see the online dealers gouging the customer. Local shops do the same and so locally you can get what you want…..at inflated prices. BUT…they make their money on ammo and with less supply they must charge more for it to keep afloat. Can’t wait until Obama signs the Nato small arms treaty. Things will get crazier. Don’t like it? Quit voting for the party of the wannabe gun confiscators. Hint: They are Democrats with a party platform to take them all away. Ask the Hag (Feinstein for the unaware).

        • Veritas

          Same here. Since January, without spending panic prices, I’ve been able to purchase magazines, ammo in popular calibers, and reloading components.

      • charlie on the MTA

        Not in The people’s Republic of Taxachusetts (Massachusetts) it ain’t !

  • Rob Pobe

    It is not because General Feinstein issued orders to “Dry up the supply.” It is not because two government ammunition disposal sights are operating 24-7. It is not because wealthy supporters of gun confiscation are using their personal resources to dry up the supply, it is because individuals bought up too much 22 ammo for retailers to be able to ever order it again. Sounds as if the author may well have inadvertently attended an AG Holder brainwashing seminar.

    • Kyle Wintersteen

      What evidence can you offer that a) ammunition disposal sites exist and b) a few wealthy individuals are impacting the market?

      • Rob Pobe

        What evidence do you need? Seems that anyone asking these types of questions have the full story to begin with. This is not a new release bud.

      • veniceneon

        Well if Rob meant by ‘disposal centers’ the grinding up of 5.56 brass and shipping to the Chinese instead of reselling the brass to American Ammo manufacturers, then yeah he is right. Max Baucus stopped this supposedly back in Obummer’s first term. But supposedly Obummer wrote another dreaded executive order that reinstated it, like another order he created to stop the re-importaion of Garand’s , M-1 Carbines, and accompanying ammo from Korea..

      • Veritas

        Don’t you know? One doesn’t need “evidence” to back up conspiracy theories like this. It’s the very lack of evidence that serves as “proof” thus creating a fairy tale that cannot be disproved.

        So I’ll just say this: aliens are taking all of the ammo in preparation for an interstellar war. Prove me wrong on that one you sheep!

        • USPatriotOne

          Go to the GAO and you will find all the evidence you need…do your own research Veritas. I have seen you as troll on other Conservative web sites. People stop debating with Veritas he/she is Commie/Troll that comes to Conservative web sites to start trouble!

          • Charles F. Easter

            There has been Auctions of once fired Military brass regularly. The prices paid do show the shortage problem is still with us though. Anyone want a 55 gallon barrel of .223 brass expect to pay about $10k.

          • Bigbottom5

            Red the auction carefully.. you must sign a statement claiming you will not resell or use the brass for “Reloading” The brass must be resold or disposed of as “Scrap” brass only….. This also drives up the cost ammo.. Thank you to President Clinton for that one..

      • 1%

        Because I am one of them.

  • Leatherstocking

    The entire article produces not one figure on production of rounds from any manfacturer
    or group of manufacturers How many .223 rounds were produced by US manufacturers in 2007-2013? How many rounds were sold by a set of US retailers and distributors (Cabela, Walmart, Natchez, SPG, et al.) during that period. How about 7.62 (.308) or other calibers?
    This looks simply like the few US manufacturers slow-rolling to increase profitability. If you sell a round for $0.40 to distribution and make $0.10, how much more do you get if you create a demand at $0.60? The manufacturers can now also prune their channels to starve discounters and favor their higher profit clients.
    Surely G&A has access and can put market data together. But they choose not to in order to protect the companies (their advertisers). I challenge G&A to put up the statistics on
    manufacturing versus sales. And other readers should speak out too.

  • Parnell

    I’ve noticed that Foreign ammo seems to be non-existent. Could ICE be holding it up in Customs the way they have been accused of holding up handguns?

  • edward baker

    Several States are proposing increased taxes on ammo (up to 50%), with six or seven States already doing so. I expect such proposals will stimulate further panic buying.

    • DSB

      Proof or BS.

      • edward baker

        Do your own research, gentle reader.

  • John W.H.

    Impeach Obama:: problem solved!!

    • DSB

      That’s the kind of stupid comment that has caused the problem.

  • BJC

    If people would stop panic buying and stop paying exuberant prices like a minimum 6 and 8 dollar’s for a box of 22lr this shortage would end. I’ve seen a number of people buy a thousand round’s of ammo to stash and I’ve seen a couple of wealthy guy’s buy by the truck load ten’s of thousand’s of rounds all to stock pile.

    • Veritas

      I know people who are stocking calibers even if they don’t own a firearm in that caliber “just in case”.

    • ZENPATRIOT

      Exorbitant.

  • BJC

    There is something else that seems odd to me, besides a major shortage of ammo (but seems to be coming more available lately) is the fact that you can’t get reloading components. Primers for hand guns and rifles are non existent, OK I can see them being used to manufacture factory ammo, but smokeless powders are all gone too and factories don’t use the same smokeless powder’s that are sold to the public so what’s up with that. Even die’s for the popular stuff like 9mm, 40 cal, 45 acp, 223 rem and 308 win are hard to find.

  • lee1001

    Get the Walmart app and go to ammo-can.net or .com.

    I’ve stocked on ammo from Walmart using these. U have to be there when they put it out at ~7 am

  • scott will

    our government placed an order so big a few months ago , it will take years to get done. Guess who the ammo makers new number one customer in line is? We are being disarmed a little at a time. law by law, UNLESS we actually do something about it .

  • t_reese

    Here in north Texas I’ve had no problem at all buying ammo, including 5.56/.223 and .45acp for my carry weapon. It’s been in good supply from both American made and the foreign brands.

  • absorb

    With the boom in gun sales you would think there would be a boom in ammunition manufactures, but no the different layers of government bureaucracies have made incredible hard to start a ammo company.

  • Mike Davis

    As long as the USA is a corporately run government. There will be shortages. not only Ammo but other commodities that USA citizens demand. When USA allows China to buy up the biggest Pork Companies in the USA and allows foreign corporations to own major real estate,commodities and Water supplies we are on the road to being a corporately controlled populace. To bad the US Army didnt train in Egypt.

  • Pierre Lemieux

    “Some suppliers have sought to slow this process by rationing ammo.” This is not why any retailer rations ammo, since he has zero impact on the total market. He rations ammo (instead of charging what the market will bear) in order to keep his regular customer happy, or less unhappy. Yet, if you are willing to pay high prices, you can now get ammo online for your gun, if you are willing to pay the non-ration price.

  • James Maxwell

    I have seen the supply on shelves improving but so have prices. Most of the stores I
    go to still have short supply and rationing in effect. I did see an article that many stores
    are limiting the amount of ammo the are ordering in order to justify their increase in price
    above the “normal” rate yet I see some stores that have the same prices they had BFO
    (Before Obama). I’m sure the truth lies somewhere in between. What has me curious
    though is the massive amount of ammo ordered by various Government agencies and
    how they justify ordering hollow point ammo and claim it is for “target practice”, then
    we see an article that says their ammo has disappeared? Knowing a few government
    agents and their lack of shooting skills it makes me wonder if this was another version
    of “Fast and Furious” where it was sent to other places than it was supposed to go or
    if in fact they have it stockpiled in a warehouse somewhere. To many things in this
    corrupt administration that do not make sense and seem to be contrary to what is
    best and right for America and all of it citizens.

  • JiminGA

    I’ve found that regularly visiting the websites of ammo sellers, as well as subscribing to on-line retailers email notices has enabled me to continue building my inventory at reasonable prices. I just unpacked a shipment of 200 rounds of 55 gr 5.56 ammo, made in Israel, that cost 50 cents per round. My last purchase was PMC 55 gr 5.56 for the same price. OK, the PMC isn’t the most accurate but at least I can keep practicing. BTW, I never shoot “factory reloads” or steel casing ammo.

  • adb1993

    I hear about the ammo shortage, but every time I go tp bass pro shops, I can find what ever ammo I want. even the ammo that is harder to find, I can find my 150 grain 30-30, and 150 grain 308, I can find any 9mm, 40 cal, or 45, if you know where to look you can still find your ammo

  • mikeconstitution

    This is just another unintended consequence (?) of the low information, Obama-voting, dependent morons that have given us the destruction of the Black family, cesspools like Detroit, the housing bubble, the financial crisis, the worst economic recovery since the Great Depression, the highest sustained unemployment in decades, turned public schools into anti-American indoctrination centers, and elected the most divisive, race conscious, unqualified, jackass to the office of President since Jimmy Carter.

  • smokey63

    Thanks for your matter-of-fact article on ammo shortage. It has lessened my frustration.

back to top