Why Is The Ammo Gone?

BY Herschel Smith
2 months, 4 weeks ago

The DNC platform on gun control is fairly well known and is no doubt leading to frantic times.

  • Criminalizing private firearm transfers
  • Disrupting interstate commerce by criminalizing online firearm and ammunition sales
  • Instituting endless “delay” windows for background checks
  • Banning the manufacture and sale of modern sporting rifles
  • Banning the manufacture and sale of standard magazines
  • Enacting licensing schemes to exercise Second Amendment rights
  • Enacting ex parte “red flag” laws to seize guns without legal recourse
  • Mandating home storage requirements under penalty of law
  • Repealing the Protection of Lawful Commerce in Arms Act to subject the industry to frivolous lawsuits

We’ve covered a number of perspectives on the ammunition shortage, and Recoil Magazine has another one.

Demand is also driven by the same psychological factors that caused the toilet paper shortage: hoarding. According to recent research (Sheu & Kuo, 2020) “hoarding stems from a human’s response, either rationally or emotionally, to scarcity, and so may occur on either the supply or the demand side. As argued by [other researchers], hoarding can be an overall response that involves a mix of a strategic, rational and emotional human responses (such as anxiety, panic and fear) to perceived threats to supply.” That’s a smart person way of saying that when people think we’re going to run out of ammo, they buy as much as they can and sit on it, which contributes to the scarcity by artificially inflating demand.

Hold on.  Full stop.  There is nothing artificial about demand.  This is basic economics 101.  Worth and availability is determined by the value people place on a commodity.  The demand is real, not artificial or imaginary.

Another factor driving increased demand, and oddly higher prices as well are the huge numbers of new gun owners entering the market. The NSSF estimates that up to 40% of the guns sold this year have been to first time gun buyers. With sales at over 8 million guns and going strong, that’s a lot of new owners buying guns. They’re also buying ammo, but unlike people who have been doing this for a while, they have no idea what ammo is “supposed” to cost. To someone who moved to Texas from LA and now they want a gun, paying $25.99 for a box of 9mm seems reasonable, because that’s just what it costs at the moment.

Hold on.  Full stop.  There is nothing odd about higher prices.  See commentary above.

With demand driven by spikes in buying, hoarding, and new gun owners, what is the industry doing to keep up? Every company I spoke with is already at maximum capacity. Magtech is running 3 shifts, Federal is working around the clock, and the smaller guys are making ammo as fast as they can. The problem is that only a few companies produce ammo at the volumes needed – companies like Magtech and Federal, for example. They’re already at capacity, and adding capacity for a company that large is actually difficult. Adding a new line to make more 9mm ammo requires purchasing expensive machines, installing them, quality control on the new machines, and hopefully getting all that done in time to make enough ammo to pay off the cost of the new machines before the bottom drops out of the market. It’s actually easier for smaller companies to add capacity, because there are ammo manufacturing machines that produce rounds at a lower rate, which are more affordable. But these small machines produce thousands of rounds a month as opposed to the tens of millions of rounds that Winchester is manufacturing, and that won’t make a dent in the ammo shortage. It’s also important to remember that the increased consumer demand must be met along with existing government contracts. The same ammo lines that make rounds for gun shops also make rounds for federal, state, and local law enforcement agencies, and those contracts don’t disappear because it’s hard to make or source primers.

Some industry experts estimate that we won’t see a return to normal inventory levels for 12 months, even when assuming a Republican presidential victory in November. Normal inventory is defined as being able to buy as much as ammo as you want and can afford from the internet or your local retailer. Worse yet, prices may not return to pre-COVID levels for an up to 12 months after that. The long term disruption to the supply chain tends to result in increased costs for manufacturers which will get passed on to the consumer until we see a full economic recovery. Unless one of the factors causing massive demand suddenly changes or disappears, we can expect to see increased prices and rationing for some time to come.

That being the case, market disruption is the time for entrepreneurs to make strides where they would normally be crawling. Smaller ammunition manufacturing businesses now have a chance to capture part of the market otherwise dominated by big names, and with the multitude of new shooters, that stockpile of ammunition can quickly turn into a head start for competitions in the coming years. The difference between preparedness and hoarding in this world, is an ammo shortage is only a negative for the later.

The problem is that most good men don’t want to expand and blow money on producing a commodity when the long term demand may not be what it is today, and also don’t like to have to face layoffs.

I’m certain ammunition manufacturers are indeed working around the clock and operating machinery at capacity, with the boundary conditions of parts and component availability.

With all of that said, Fiocchio is bringing a $15 million ammunition manufacturing center to Little Rock, Arkansas.

Fiocchio of America is opening a $15 million ammunition manufacturing center to Little Rock, state officials announced Wednesday.

The new plant will primarily manufacture centerfire ammunition, Fiocchi President Anthony Acitelli said.

Gov. Asa Hutchinson said the facility will create about 85 jobs.

“These are good-paying jobs that will make a difference in our community, and most importantly, I hope that this is a partnership that will lead to future growth down the road,” Gov. Asa Hutchinson said at a news conference announcing the plant.

The Arkansas Economic Development Commission said the company will receive five years of cash rebates worth $579,186, based on the annual payroll for new employees. It will also receive $82,407 worth of tax refunds for the project.

The company is a subsidiary of Fiochhi Ammunition, an Italian company that has been in operation since 1876.

I wish Fiocchi well.  In the mean time, feel free to use comments to convey spur-of-the-moment deals on ammunition to readers.  Ammoseek.com doesn’t always capture everything.

Prior:

When Will Ammo Logistics Recover?

One Dealer’s Perspective On The Guns And Ammo Shortage

Explaining The Ammunition Shortage


Comments

  1. On August 3, 2020 at 6:06 am, Nosmo said:

    Had an email exchange recently with the owner of one of the country’s larger ammunition distributors RE: prices. He said the “COVID Crisis” coupled with the “Get A Gun Now” riot-driven rush has driven demand through the roof and prices with it – the ancient law of supply and demand at work – and it will rescue a number of companies, on both the gun manufacturing and distributing side and the same for ammunition who were in danger of going out of business because low demand had forced prices down to the nearly zero profit range. He commented that for the first time in a couple years he’s making a worthwhile profit on a long term contract he had for overseas ammunition procurement.

    I’m sure his supplier costs have gone up as well. I suspect your “12 months then 12 months” estimate is about right. The wild card is November 3; I do not doubt there will be additional disruption immediately before and after that date. Whether it is short afterward or prolonged will depend on the outcome.

    I’d like to think that attitudes and awareness have changed sufficiently that increasing one’s self sufficiency has moved up the to-do list and procurement of supplies, and associated skills, from all sectors settles in at a higher, but more easily manageable level, but we’ll see what the coming months bring.

  2. On August 3, 2020 at 7:47 am, ragman said:

    The communists are deadly serious about gun confiscation. It’s right out of their manifesto and it’s the next step in their plan for us. No boxcars and camps until we are disarmed. I expect the results of 3 Nov may not really be known for months. The commies will do anything to get rid of Trump and the voter fraud will be epic.

  3. On August 3, 2020 at 8:06 am, BOB said:

    I just picked some up from Lucky Gunner ( https://www.luckygunner.com/) and Outdoor
    Limited (https://www.outdoorlimited.com/)
    Prices are somewhat higher, but I would expect that.

  4. On August 3, 2020 at 8:27 am, Fred said:

    The RNC platform will save our gun rights any minute now.

    It’s called; Supply, Demand, Price Signal. It’s easy to teach to a 3rd grader. Adults can’t understand it because they’ve been so deeply indoctrinated into government control and centralized management theories in general. Supply, Demand, Price is a function of the Law of God in a fallen world. Nobody can fix it, it’s not broken. Even Adam, before the fall, was to work to tend the Garden. That means there must have been an input cost (labor/supplies), which means that there must have been availability drivers (supply/demand). God made men to work. The only ones trying to stop men from working are Communist Republicans and Communist Democrats, and communist communists who want to control you. This is sin.

    But the problem with all of this is the refusal to recognize Who actually supplies all of your needs, if you’re willing to do your part; believe and work.

    Remember, every blessing America has ever received can be taken away, all of it. Don’t rely on markets, don’t rely on your stores of goods or preps, rely on God Almighty.

    “And I will say to my soul, Soul, thou hast much goods laid up for many years; take thine ease, eat, drink, and be merry. But God said unto him, Thou fool, this night thy soul shall be required of thee: then whose shall those things be, which thou hast provided? So is he that layeth up treasure for himself, and is not rich toward God.”

    This man thought that his soul was well. You can’t Prep your way out of Judgement. Your soul IS required of God. Will you give it to Him? Will you accept Him as the rightful owner of your soul, through belief on His Son’s finished work on the cross?

    “Behold, all souls are mine; as the soul of the father, so also the soul of the son is mine: the soul that sinneth, it shall die.”

    Don’t be a thief and try to steal your own soul from God. It was never yours. Your life and sentience and free will are a gift of God. He knew you before the foundation of world. God will make you to depend upon Him, if you won’t come to Him on your own.

    Blessings and Curses. If we truly loved each other we wouldn’t say God bless you. We would say; blessings and curses to you.

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You are currently reading "Why Is The Ammo Gone?", entry #25048 on The Captain's Journal.

This article is filed under the category(s) Ammunition and was published August 2nd, 2020 by Herschel Smith.

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