Sunday, May 17, 2009

Ammo

The short story?

The end is not on sight.

"If everybody in America stopped shooting tomorrow afternoon, it would take us 3 months to clear the backlog, best case."

That quote is from a friend in the ammo industry who knows his stuff. Consensus I heard was the huge shortages continue until AT LEAST through the year and maybe through Q1 2010. And - again the consensus view - when "normal" returns, it's going to be the "new normal," not the normal we remember. We've proven what we're willing to pay for ammo and components, so don't expect a return to $89/1000 5.56.

Civilian demand, military and police contracts, and issues/prices of components was sited as the culprits.

Re: primers...off-the-record advice was buy what you can find at a sane price...reloading components may well be the last to recover as the industry sucks up all the available components for loaded ammo. Some of the back orders for primers at the big Internet sellers are being filled at roughly 4-5 months lag time.

Wish I had better news on this front! Everybody seems mostly resigned for the long haul. Expect to see more consequences on events and training as the shortage continues to ping pong through the industry.


-- Post From The Road
Posted by at

17 comments:

epnurse said...

I was afraid you'd say that...

8:12 PM
Anonymous said...

Gun grabbers / banners dream.

Nothing to feed the evil gun...

8:26 PM
Anonymous said...

So given the state of affairs, the ammo manufacturers are not going to man up and get more equipment? Guaranteed sales for a year and no new gear? Yes I know it's expensive, but 1Q2010 at the earliest?

And if one of the ninnies in DC shoots their mouth off, it will be later than that. And they will charge more regardless of demand - which was hinted. Buy the damned equipment already

What's wrong with this picture?

8:48 PM
George said...

And what is the projected impact on sales of firearms? It can't possibly be good. In a few months dealers just may be begging us to help get rid of their inventory....

I think I'm going to short or buy some options that will allow me to take advantage of the inevitable nose dive of S&W's and Ruger's stock prices that will take effect when all of this is factored into their valuations.

I hope they have stored enough cash to get them through the coming dry spell....

10:25 PM
Anonymous said...

22s will make a come back seem to be easier to find than most calibers

11:16 PM
Wolfwood said...

I wonder about this, though. Seeing Prvi Partizan in stores makes me think that SOMEONE, whether in America or abroad, is going to decide to tool up and make some money.

1:38 AM
Anonymous said...

I'm gonna say the ammo industry is reading things wrong. Ammo sales will dry up same as gun sales. And when that happens ammo prices will come back down same as happened with oil. My LGS has had ammo for the last couple of months so it is not impossible to find. I think the ammo guys are blowing smoke HOPING to keep the panic going.

5:39 AM
Dave S. said...

"We've proven what we're willing to pay for ammo and components, so don't expect a return to $89/1000 5.56."

Really? So there won't be a bust after this boom? Because we proved we were willing to pay $500,000 for a 2,000 sq ft house that's going for $300,000 today.

5:48 AM
nj_larry said...

"We've proven what we're willing to pay for ammo and components, so don't expect a return to $89/1000 5.56."

Proves my point that the industry runs the market not the the gun owners of America. They have seats on the NRA Board, they own for all intents and purposes the web, TV and magazines, and they determine what "our" politicians say and do. The gun owners sit back and just have no clue.

6:16 AM
Bill Rushmore said...

I am waiting for the Chinese to get in the ammo game big like they have with other manufacturing. That should burst the bubble.

8:10 AM
Anonymous said...

Anonymous at 8:48 PM: "So given the state of affairs, the ammo manufacturers are not going to man up and get more equipment?"

Maybe given the state of affairs they can't get money (debt or equity) to buy more equipment, space to place it in, etc. etc.?

Given tight credit markets, the political threat which could wipe out such an investment "overnight", and the certainly that this bubble will end at some point, they're not a good risk.

8:11 AM
Zack said...

Maybe not over yet but this weekend at Academy Sports in Little Rock, AR, I had no difficulty buying a 100 rnd box of 9mm Remington FMJ practice rounds @ $23 and two boxes of 25 count 9mm Hornaday "Critical Defense" @ $29 ea. I also grabbed a box of 50 .44 special aluminum Blazer JHP.

10:04 AM
Dock said...

Michael, thanks for the report.

I am deeply suspicious of "component cost" as a reason for increased pricing.

Materials cost less now than they did last year. Oil too.

Unless they're sticking us for last year's fuel bill, that part of it doesn't wash with me, and I have eyed the basic materials markets for years.

However, I believe all of the other factors to be true - I just wanted to express doubt about the component cost.

Thanks for all you do!

12:47 PM
Anonymous said...

"I am waiting for the Chinese to get in the ammo game big like they have with other manufacturing. That should burst the bubble."

Ain't gonna happen until the laws/regulations barring Chinese ammo and gun imports cease.

That being said, I'm sure the Chinese are salivating at the prospect. And who knows...maybe certain foreign companies with no such restrictions are just contracting out to the Chinese themselves?

4:53 PM
Sadltrmp said...

so don't expect a return to $89/1000 5.56.
I guess not. I was in Gander Mt in Roanoak, VA today and they had several cases of 1000 count Fed. 223 at $499! They also had good supplies of some calibers, and a bunch of ammo to put on the shelves. But there was very little .22 LR on the shelf - and NO bulk .22 so it'll be hard to play with the 10-22 this weekend.

9:31 PM
kewag said...

Q1 2010? I wonder. For all the folks buying up ammo, aside from the military, you don't see but a fraction that many shooting any of it. How long do the "Johnny come lately", non-shooting pack rats' stockpiles have to sit before before buyers remorse sets in? At some point many (or their spouses) will want to convert that stockpile back into cash to pay for more ordinary staples in life.

6:34 PM
gullyborg said...

We are only willing to pay a premium for ammo now because 1) supplies are limited and 2) there is an Obama-driven panic and 3) people are hoarding, not shooting.

In 2013, we will welcome our new President from Alaska. Manufacturers will have already tooled up to increase production. And people will feel "less insecure" about ONLY having 50,000 rounds on hand.

Demand will plummet because A) supplies will be overflowing and B) people will not fear the President and C) people will actually shoot what they have on hand instead of saving it for an emergency.

Prices WILL drop. And they will drop to what will be comparable to the pre-Obama days, with a marginal increase for normal inflation.

9:46 PM

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