The Coming Crash in Ammunition Prices

Gun Watch ^ | 7 June, 2014 | Dean Weingarten

[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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[Blue Highway]

The irony was these manufacturers that are producing .22LR variants of higher caliber guns were made specifically for the purpose of being able to use the guns you are familiar with, but with the affordability of a lower caliber .22LR round. Well, we all know the availability of .22LR is nil and affordability is relative but not what it once was. Hell, I have a S&W M&P 22 that I have never used based on the scarcity of .22LR and the only reason I bought it was the perceived bang for buck over using 9mm at the range.

[Blue Highway]

We hear gunfire almost daily here. It is the sound of freedom!

That will make a good tagline for someone on FR.

[Comment Not Approved]

“7.65 Argentine”

I have an 1891 chambered in that. Passed down from my Grandfather to Father to me. Son git his first deer with it and it will go to him. Started reloading over 20 years ago just to feed that rifle. Now I reload for everything I shoot, except 22 rimfire.

Best decision I ever made. Paid $75 for a Bonanza Coax press will full reloading kit and dies at a gun shop way back then. I think the press alone is over $300 now.

[voicereason]

If I were to say a correction is taking place, it is on the price and availability of firearms themselves.

[Larry Lucido]

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.

If Wal-Mart did engage in some (as you call it) "gouging," the end result would be more .22 ammo for more people at reasonable, if higher, prices.

Who buys out the ammo in that 30 minutes to one hour? Some shooters, sure, but many others who then resell it for several times the price. So basically, Wal-Mart is a distributor to high mark-up resellers, who can coordinate their purchases.

Wal-Mart would be doing its customers a favor by charging something closer to market, making it available to serious shooters at a high price rather than unavailable at any price.

But I get the public relations problem inherent with that. If I were advising them (which of course I'm not), I'd say up the price then advertise that the proceeds over and above the regular price would be donated to a gun rights cause.

Eh, no one ever listens. :-)

[nomad]

Or http://www.gunbot.net

[Comment Not Approved]

Only thing better than the sound is the smell. Because that means you are part of the happenings.

[Blue Highway]

Yeah! Nothing beats that smell of gunpowder.

[Blue Highway]

I still wonder how the crowd shows up right when they stock the shelves? I’ve been in several times and get different answers as to when they get their shipments. Then again I am not going into WalMart everyday. I’d be happy with one 525 brick to be honest.

[Mr Rogers]

The cheapest 22 LR ammo available now on Midway is 14 cents a round. The cheapest .357 ammo available now is running around 75-80 cents a round. I’ve done very little shooting in the last 2 years because I did not stock up in advance and don’t want to pay that much for ammo.

I wish I owned a .45, which still has ammo at a reasonable price. I might buy one so I can shoot something without throwing dollars bills out with every shot!

[Larry Lucido]

My girl and I started teaching concealed pistol courses around the time the prices started to skyrocket. It was up to us to obtain 50 rounds per student for their range exercises. The range we usually used stopped selling any ammo at all except with the purchase of a firearm.

So my girl’s job was to call store after store and ask when their shipments were expected, and then to be there to purchase the maximum allowable quantities of 9mm and .38 rounds. It was time-consuming but we were able to keep ammunition in stock for shooters.

We got a break when we found Firearm Exchange shooting range in Livonia, Michigan (yes, I’ll give them a plug, but not my old range). They sold their own re-loads, any quantity you wanted, for a reasonable price (I forgot exactly, but well within our budget). You had to agree to use it all on the range that day, and not take any out (though they took your word for it) and they were quality reloads - no misfires.

But that’s how it’s done. Calling ahead to each store and then camping out there until the shipment arrives.

[Larry Lucido]

Our local Cabels’s (not really local, more like 40 miles away) were good about letting us know when to expect shipments. But you had to be in line early, because lots of others knew too.

[Gaffer]

I bought a can of 420 rds xM855 (SS109) from WM a year ago. Cost $175. CTD had the same thing - For $399 - What else but “gouging” woul you call it?

As for who buys the 22s, a one to 3 box limit isn’t a great inducement to waste an hour or so every morning for a Reseller. Unless they just have nothing better to do.

[Nifster]

Not even. Look there is no way a three year old can handle most rifles or shotguns. Very few should be shooting anything other than cap guns or air soft until their coordination and brain power is better. I started shooting with my father when I was five. I took range lessons and competitive shooting since the age of seven.

When some one claims to know four people who have aver a hundred guns each I call BS....particularly since they said the owners weren’t collectors or sellers.

If you own over a hundred guns and rifles, why don’t you list a few dozen? I myself only own two shot guns, a 30.06, a couple of .22s from my childhood, and five or six hand guns (it depends on if you count the black powder pistol that is an antique heirloom that hasn’t been fired in hundreds of years)

[Nifster]

This article does nothing to support your claim of knowing four people who each own over a hundred guns. My point was simple and direct.... MOST gun owners do not own a hundred guns. Even a family of four does not need five a piece. Age and experience determines what gun IF any one should own. Children who are young, uncoordinated, irresponsible, and untrained should not be using or owning a gun at all.

The article points out a decline in gun ownership not a growing number of those with hundreds of guns.

[Nifster]

You and I are in agreement. My BS call was on how many have hundreds of guns because that was the other posters claim. I do not find 27 ( because I am guessing that is for a household but I will even give it an okay for an individual) as outlandish. I live in a similar type of area where I can hear the hunters during the season and most households have some fire arms.

It is the sound of freedom

[Nifster]

It is not that it won’t fir at all. I never said that. It is a scientific fact that the charge loses its full effectiveness which means you may not get as much distance and power. This simply means you are better off and more effective with fresh ammo

[B4Ranch]

The article points out a decline in gun ownership because of the fear of confiscation. Same with the guys who haul their guns around in their boats and end up having horrific accidents.

[Nifster]

It does not support what the previous poster was claiming about owning hundreds of guns

[The Cajun]

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