Interesting Ammo Shortage Explanation

[2GQ4U]

Found this in my Facebook feed. It makes some interesting points. Mainly that ammo manufacturers are weary about investing in expensive new machinery.

http://www.vox.com/2014/7/1/5845524/the-ammunition-shortage-is-a-real-thing-heres-why-it-happened?utm_medium=social&utm_source=facebook&utm_campaign=voxdotcom&utm_content=tuesday

[Merc1138]

Of course they're wary about expanding.

1. Expansion of production facilities is a huge capital expenditure that could cost millions.

2. Additional personnel needs brought onboard for the expansion, increasing operating costs.

3. Expansion of manufacturing capabilities could takes months(even a year or more) to complete and still not be 100% operational for a long while after that.

4. Expansion of production facilities does not guarantee the materials will be available.

If the ammo companies had all decided to blow their money right at the start of the ammo crunch on additional manufacturing capability, and the "bubble" didn't last, they'd have lost their *** to the banks. Even waiting a year into the ammo shortage isn't an indicator of the market going forward and would still pose a huge risk.

Looking at shelves lately, other than .22lr and some less popular calibers, there is no shortage anymore. The prices for some of it may suck and not every brand may have some available, but there's no shortage of .308/7.62, .223/5.56, 9, .40, .45, 7.62x39, 7.62x54r, .357mag, .38spl, .380 auto, .44mag, 12ga buck, 12ga bird, 12ga slugs, etc. The only recent shortage would be 5.45, but there was a separate reason for that.

[I Swan]

Yes I've heard that for a long time and I dont blame the manufacturers. Add it to panic, gouging and hoarding and you have a perfect storm.

[2GQ4U]

Of course they're wary about expanding.

1. Expansion of production facilities is a huge capital expenditure that could cost millions.

2. Additional personnel needs brought onboard for the expansion, increasing operating costs.

3. Expansion of manufacturing capabilities could takes months(even a year or more) to complete and still not be 100% operational for a long while after that.

4. Expansion of production facilities does not guarantee the materials will be available.

If the ammo companies had all decided to blow their money right at the start of the ammo crunch on additional manufacturing capability, and the "bubble" didn't last, they'd have lost their *** to the banks. Even waiting a year into the ammo shortage isn't an indicator of the market going forward and would still pose a huge risk.

Looking at shelves lately, other than .22lr and some less popular calibers, there is no shortage anymore. The prices for some of it may suck and not every brand may have some available, but there's no shortage of .308/7.62, .223/5.56, 9, .40, .45, 7.62x39, 7.62x54r, .357mag, .38spl, .380 auto, .44mag, 12ga buck, 12ga bird, 12ga slugs, etc. The only recent shortage would be 5.45, but there was a separate reason for that.

What I found interesting is that ammo sales have risen every year since 9/11. At what point is it prudent to invest in more manufacturing capability? Seems to me that the ammo mfgrs missed the boat, and could have been reaping billions for the last 14 years.

[Merc1138]

What I found interesting is that ammo sales have risen every year since 9/11. At what point is it prudent to invest in more manufacturing capability? Seems to me that the ammo mfgrs missed the boat, and could have been reaping billions for the last 14 years.

How so? There wasn't any shortage of anything up until Sandy Hook. Even after Obama got elected in 2008, things tightened up with regards to what was available, but it didn't leave shelves barren everywhere in the country(and that shortage didn't take very long to resolve itself). Ammo was sitting on shelves not being sold, so why would ATK, Freedom Group, etc. ramp up production?

Now assuming they did ramp up production significantly after 9/11, during the periods where ammo was, for lack of a better word, plentiful, what would that manufacturing capacity be doing? Letting it sit idle would be a massive waste, getting more ammo onto shelves that weren't barren wouldn't accomplish anything except maybe start to drive prices down. But prices can only come down so far before the manufacturer isn't making enough money to turn a profit, let alone make a return on their investment into new/expanded buildings, manufacturing equipment, and personnel. And that's assuming the material costs remain the same, but with every manufacturer increasing production(for no apparent reason) then you might end up with a shortage on the material side.

Heck, go look at the handgun forum. There's a thread for milpitas walmart ammo finds. You'll see that they were getting fairly large deliveries on a regular basis, with the shelves mostly full, right up until sandy hook.

12-13-2012 from post #439


12-28-2012 post #457


No ammo manufacturer is going to be able to prepare for that. The ammo left over in that cabinet would be some of the less popular stuff(.22mag, .22 short, some random hollowpoints on the second shelf from the bottom, and then what looks like a few random things with the off camera portion of the shelf being mostly shotgun ammo and less "tacticool" hunting rounds and such).

Here's another full shot of that cabinet from 1-14-2013 post #517


I don't think I need to point out how barren the shelves were for quite a while, and how it hadn't gone on that long previously.

[PoorRichRichard]

OP- good read. Thanx for posting.

[bohoki]

22lr is the problem child this could be abated if some store would offer preorders one brick per person

i dont like it but some industry controlled sudafed type program went in effect to stop the hoard/resellers one brick per person per week national

funny during all this time i could always buy 12ga

[sl0re10]

Found this in my Facebook feed. It makes some interesting points. Mainly that ammo manufacturers are weary about investing in expensive new machinery.

http://www.vox.com/2014/7/1/5845524/...ontent=tuesday

yes; they've been saying that for years... and its probably the true cause (capacity is maxed out but no one wants to expand based on panic sales).

[Dano3467]

So probably shouldn't consider that there are far more people now who have and are buying more and more guns that never did before ?

Got to feed them something.

[CaliforniaLiberal]

Wary - feeling or showing caution about possible dangers or problems.
"dogs that have been mistreated often remain very wary of strangers"

synonyms: cautious, careful, circumspect, on one's guard, chary, alert, on the lookout, on one's toes, on the qui vive


Weary - feeling or showing tiredness, especially as a result of excessive exertion or lack of sleep.
"he gave a long, weary sigh"

synonyms: tired, worn out, exhausted, fatigued, sapped, burnt-out, dog-tired, spent, drained, prostrate, enervated

[Soginator]

Only ammo I have had trouble finding is 22lr. And even that you can find, just maybe at a slightly high price. I think I saw some on psa for 4.50/50 yesterday. I already have about 1000rds and don't hoard so I didn't jump on it. But in all honesty, you can find everything online and for not super expensive, if you just look around every now and then.

[67goat]

So probably shouldn't consider that there are far more people now who have and are buying more and more guns that never did before ?

Got to feed them something.

Far more is a stretch. Most of the studies show that most of the new guns bought during these last two panics were purchased by people that were already gun owners.

If those that are new owners hold true to the same patterns of the past, most of the new owners will shoot their gun once or twice and stick the gun in a drawer.

Given that pre-panic, few of the ammo manufacturers were producing at capacity and were still able to build up stockpiles, I don't think new shooters really put non-panic demand above current capacity.

[BigPimping]

All I have trouble with is 22lr. Everything else is there just look and you will find it. Might not be at a price you like though. 5.45x39 is another story.

[Merc1138]

So probably shouldn't consider that there are far more people now who have and are buying more and more guns that never did before ?

Got to feed them something.

Sure, and other than .22lr and 5.45(separate panic buying issue), there isn't a shortage. I was at Reed's last Sunday and they had pallets of ammo out on the floor between the rental counter and the shooting bays(they actually had so much out it was obnoxious walking around it). You may not be able to find the specific loading you liked pre-panic, but you can find something in any of the popular mass production calibers(except the two mentioned above) if you look beyond possibly your local walmart.

So yeah, with more guns out there than ever(and for the most part, firearms are readily available from the major manufacturers as well with racks in gun shops packed full), and likely more people shooting, the ammo manufacturers have caught up with demand.

[Maddog5150]

Yeah, there isn't a shortage anymore. My favorite thing to hear when I'm perusing the local gun stores is hearing tin foil hat people scream that the reason there is no 22lr is because the government doesn't want people to have it in case of a revolution. One time, a salesman pointed out how there were plenty of military calibers including green tip 5.56 on the shelves and this lady said, "That doesn't matter, they don't want us to practice!!!"