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How Manufacturers Are Dealing with the Ammo Shortage

by James Tarr   |  April 2nd, 2013 136

Ammo-shortage

The gun-owning American public has seen and been through panic buying before, but never on a level compared to what we are seeing now. At SHOT Show last January, I asked all the black rifle makers if they had any product beyond what was being displayed on the walls of their booths. Their response? No.

I also asked ammunition makers if they had any ammunition left on the shelves.

“Sure,” Steve Hornady told me with a laugh. “I’ve got .470 and .500 Nitro.”

Jeff Hoffman, president of Black Hills Ammunition, pretty much told me the same thing. “We have a little bit of the hunting calibers on hand, like .270, but everything else is gone. It’s only skipping once on its way out the door.”

Why is it so much worse this time? The current situation was not caused by internal forces, but external. The sole reason for the current panic is politics. This new politically induced buying panic is much worse than in previous years because the anti-gun politicians have been pushing so much harder in their efforts to openly ban anything and everything that has a trigger—not just “evil assault weapons.”

During the last panic, “military-style” rifles were in high demand and hard to come by. Certain calibers were nearly impossible to find—9mm, .45 ACP and .223, for example—as were primers. As bad as things have been in the past, they don’t compare to what we are currently seeing.

Not only can’t you find a “military-style” semi-auto rifle on a shelf anywhere, but consumers have also been buying semi-auto shotguns, tactical bolt-action rifles and just about any type of high-capacity semi-auto pistol on the market. Nobody was ever panic-buying handguns before. In addition to the above popular military calibers being hard to locate, consumers have been buying every centerfire caliber available—some areas of the country have even seen a run on .22 LR!

During the last panic—when ammo and components were in such short supply—many people started throwing out conspiracy theories. Ammo makers were deliberately making less ammo, or hoarding it to drive up prices. That was not the case; the fact of the matter was avid shooters and politically astute gun owners were worried about not being able to get the ammo and components they needed, so they bought a lot more than they usually did.

So why is it worse this time around?

First, ammunition manufacturers have been running at or near capacity for at least 10 years. Some of their production is still earmarked for military contracts, even though the U.S. military’s presence overseas is being reduced. But the fact of the matter is most ammo makers have barely recovered from the last ammo-buying panic. Nobody who makes ammo has had it sitting around getting dusty on their shelves. They were barely able to keep up with commercial demand before the country went into panic-buying mode.

If the demand is so great, why aren’t Winchester, Remington and other companies expanding so they can make and sell even more ammo? It’s not that easy. First, to expand any business requires a lot of time and money, and there are never any guarantees. Who’s to say next year nobody buys any ammo because everybody bought it this year? In a business as political as the gun and ammo industry, sales spikes are common.

Hornady gets those questions so much they have a section on their website that answers a lot of the frequently asked questions.

As to why they can’t just “make more,” Hornady’s response is simple: “We’ve been steadily growing our production for a long time, especially the last five years. We’ve added presses, lathes, CNC equipment, people and space. Many popular items are produced 24 hours a day. Several hundred Hornady employees work overtime every week to produce as much as safely possible. If there is any question about that—please take a tour of the factory. You’ll be amazed at what you see.”

As Hornady’s Neal Emery told me recently, “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.”

That’s not to say ammunition makers aren’t expanding when and where they can. Black Hills Ammunition recently moved into a much larger facility. Remington has been toying around with the idea of expanding their ammunition-making capabilities for quite some time.

“Even though we’re in the middle of panic buying, we don’t see the demand for ammunition going away any time soon,” Keith Enlow, Freedom Group’s senior vice president and ammunition manager, told a group of writers recently.

Remington’s official line on their current ammunition production is as follows: “Remington is at full capacity at this time in a majority of categories of ammunition. We are continuing to look at how to increase capacity and supply our ammunition products to the various channels of distribution/sales that we support.”

Second, during the last big panic, it was really only the avid shooters or politically active gun owners who saw a threat and responded with hoarding—excuse me, “bulk purchasing.” This time, it appears anyone who owned a gun perceived a threat, and anybody who didn’t own a gun—but thought it might be a good idea to own one—not only went out and bought a gun, but as much ammo as they could afford.

That’s another point. Since Obama took office, there have been 65 million NICS checks done. Even if only two-thirds of those resulted in guns bought, that equates to 40 million new guns in the hands of consumers. All those new guns need to be fed, in addition to all the others still in the hands of consumers.

Is there a way to prevent such a shortage in the future? The only way to sidetrack panic buying/hoarding is to have a huge surplus of ammo on the market—which would probably drive the price down. Ammunition makers aren’t keeping supplies in reserve to drive the price up; honestly, at this point they could charge whatever they wanted—and they would get it. As Emery told me, “As far as preventing this again, we don’t have much to comment. We will continue to grow and expand our capacity to meet high demand.”

I think the current situation is best summed up by what I heard a clerk in my local gun store say to a customer: “We are not experiencing a gun or ammo shortage. We are experiencing a customer surplus.”

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