Thursday, June 18, 2009

Primer Shortage to Continue

This is from the Sinclair blog. Sinclair makes some of the best high-end reloading equipment available, and this is an excellent analysis of the situation we find ourselves in: 
Basically, there has been a two-pronged drain on primer supplies for the reloading market.

The first driving force has been the huge demand for loaded ammunition through 2008 and continuing into 2009. The large primer manufacturers like ATK (which would include Federal and CCI), Winchester, and Remington are directing the majority of their primers into loaded ammunition. Ammunition sales are going through the roof as individuals stock up because of political concerns. The huge consumer demand for ammo is in addition to the demand from law enforcement agencies and our military to re-supply their own inventories. I know that smaller ammunition manufacturers have been impacted drastically by the primer shortage since their demands are higher than normal for primers that they have to obtain through Federal, CCI, Winchester, Remington, etc. Many of these smaller manufacturers have had to go to other sources to get quality primers. Because of this situation, some of them cannot keep up with their own ammunition production. Unfortunately, these smaller ammo makers can’t control their own destiny since they don’t have the capacity or tooling to make primers.

I mentioned that there were two factors impacting primer availability; the first factor is creating the second one. Since ammo demand has consumed more of the primer supply than normal, the quantity of primers on the shelf has declined at the box stores, the reloading companies (like Sinclair), and the smaller gun shops. With the fast communication via the internet, the word spreads quickly and the result has been consumers stockpiling and hoarding primers. Individuals are buying and keeping more primers in their own personal inventories and this has prevented some reloaders from having any primers at all. We normally see people buying 1,000 or maybe 5,000 primers at a time, now we are seeing customers buying 25,000 at a time.
I'm going to jump ship here and make what will be a very unpopular suggestion with the kumbaya wing of our culture...go to Midway USA's primer pages and sign up for the "Remind Me" email notification function, so you'll know when primers arrive at Midway. I strongly suggest that you buy primers in 5000-lot, or at the very least buy as many as the retailer will allow you to buy. Call it hoarding if you fact, it is the smart thing to do. 

It is exactly the same thing I recommended more than a year ago on .22LR ammunition, and based on my emails the people who took advantage of Midway and other retailers' sales on cases of .22LR are happy campers today. Ditto people who took advantage of sales on AR and Glock magazines. Heck, ditto people who bough inexpensive houses within their means and are not being clobbered by the popping of the real estate bubble!

Hey, I'm the guy who just produced a television series on preparedness, and I absolutely believe what we will be telling our viewers over the next months — nowhere is there a guarantee that the goods you need for your own and your family's survival and well-being, or the goods necessary for you to pursue your interests, or the goods that you need to protect yourself on a daily basis are going to be available all the time. Nowhere! Therefore, it's on you to remedy that situation. Whether it's prescription drugs, fresh water, a second pair of eyeglasses or extra contact lenses, extra food, cash or even primers, you either believe you have the responsibility for your own life or you don't.


Bill Rushmore said...

When I read about the shortage situation it is not the "hoarders" that bother me (heck I would be one if I had the money to do that) but the stories I here about the non-shooters buying the stuff up to try to make a quick buck. We do live in a free market so they have that right but I still have the right to be annoyed by it if that is really true.

Anonymous said...

I know the manufacturer's of ammo and primers all think this is a bubble that will burst, and to some extent I agree it is sort of a perfect storm of panic.

BUT, what they also need to recognize is that the number of recreational shooters has gone through the roof in the last 5-6 years and a big part of this increased demand is permenant. The question I have, how many quarters of high demand for both ammo and primers do these guys have to see before they accept the demand level is real and one of them invests some capital in new capacity? Sigh...too long I suspect, and that will have the effect of driving a lot of these new recreational shooters to other pursuits....a pity

Diogenes said...

" many quarters of high demand for both ammo and primers do these guys have to see before they accept the demand level is real and one of them invests some capital in new capacity?"

Don't plan on it. With the weak general economy, don't expect these guys to take a chance on new cap-ex. They'd likely have to borrow money to do it - current corporate thinking rarely includes "organic growth". A large line of credit for cap-ex would be pricey, especially for an "out of the mainstream" industry like ammunition manufacturers.

I'd expect them to "make hay while the sun shines" and pass along the additional profit to stock holders as dividends, which will make the stock price go up and encourage the cycle to continue. "Investing in the business" is so 1960's...

dagnygromer said...

I heard a frightening, and likely true, number this week. It takes 5 years to get the federal permits needed to become a primer manufacturer.

RKL said...

I agree with Anonymous, sooner or later if the demand remains someone will tool up and take advantage of it. There are always people who have money and want to make more of it bad economy or not. We'll see I guess.


Anonymous said...

The AR boom has crashed. So too will the ammo/component boom.

I'm not sure why you think it necessary to continue to fan the flames.

Dandapani said...

The AR market has crashed BECAUSE THERE IS NO MORE AMMO!

Jerry The Geek said...

Last year I volunteered to teach an "Introduction to USPSA" class at my home club.

The first class, in July, yielded 13 participants.

The attendance tapered off as the Great Pacific NorthWet weather turned cold and clammy, but I fully expected turnout to increase with the advent of warm, clement weather.

There are two weeks to go before this July class, and so for the sign-ups include ... zero people. Same for June, same for May.

There's no doubt that interest in run&gun shooting is at an all-time high, but the count of those willing to commit to a monthly expenditure of 200-1000 rounds of ammunition is at an all-time low.

There MUST be a reason for this economic downturn.

Could it be ... Satan?

Anonymous said...

Well, gosh darn it, Michael Bane! I read your blog at least 3 times a week, and I just have NO recollection of you whatsoever preaching to buy pallets of .22LR.


The AR mag thing I remember, because you were plugging somebody's mags at the time. Maybe Midway's. I dunno???

My one local store has received case upon case of Federal 510's (the .22's, in the blue box).

Wally World, on the other hand, can't keep anything but shotgun shells and slugs in stock. :-(

As far as ATK's stock going up and up...hmmn... you need to take a look again, say at a 1 year or 2 year graph of their price per share.

They had a major dip not to long ago. I don't know why.

Maybe the stock split. Again, I dunno???

Anonymous said...

Hey all, Just keep back-ordering what we NEED and actually buying ammo and reloading components when they come in. If your buddy needs some stuff and you have it, share it. That way, we're not only supporting the industry that supports us, we're actually sending a strong signal that "we're here!". That goes for guns too.
We're all in this together.
Life Member

Michael Bane said...

I plugged Midway USA AR mags after I had plugged Brownell's and MagPul P-Mags. I had also plugged plain old boring C Mags (who make Midway's name-branded products). Recently I've plugged CMMG's mags with their new anti-tilt followers (I also plugged the 42 & 52 round 3-gun specials from my pal Virgil Tripp). As much as I love my sponsors, my responsibility is to you guys. If you followed my advice on AR magazines, you never paid scalper prices!

A couple of years back, Midway — yes, my sponsor for SG! — began using cases of .22LR as their "loss leaders" in their monthly E-Blasts email and printed ad pieces. I begin dedicating a portion of my ammo purchases to those 5K cases, which were, I believe as low as $180 for high end Federal .22...I talked about it regularly on the podcast and I THINK the blog, urging my listeners/viewers to get while the gettin' was good.

Jerry my old friend, I don't know what to say...I'm hearing reports like this from all over the country. You know I've been promoting training and competition with .22 conversion units for the duration of the crisis, on the podcast, on the blog, on SHOOTING GALLERY and this season on COWBOYS.

FULL DISCLOSURE: I am considering a formal relationship with Tactical Solutions, makers of what I believe are the best .22 conversion units on the market, as their spokesperson. And I have tried them all. I would like to note that recently on the podcast I have plugged CMMG's AR conversion units and on SG the Kimber dedicated .22 and conversion unit (and Wilson's a while back). On COWBOYS we plug our sponsor Ruger's classic Single Sixes, but also non-sponsors Cimarron/Chiapa's "Plinkerton" revolver and non-sponsor Henry's Golden Boy rifle.

I think the market will ultimately readjust to the new reality that sport shooting is booming as hunting declines. That's why I have some issues with the NSSF 20% initiative which focusing on increasing hunting — a resource intensive activity — and sport shooting — much easier — rather than a 2-tier focus on first increasing sport shooting, then drawing new hunters from the new sport shooters...a plan that was never even considered.

BTW, while it's fair to say the AR bubble popped, the sales of AR are still at a staggering level and stillswamong every other type of gun.


The Phillips General Store said...


I am writing you today because I have written a short, basic e-book on reloading and would like for you to publish links to it on your blog. I can also give you a free text copy for review if you want. Thanks for your consideration.

nj_larry said...

I sit here shaking my head. I hear the same kind of drivel repeated so often on the web. AR sales thru the roof ! Shooters coming out in droves ! We are winning ! etc etc...

Like any irrational tulip bulb buying is just that, an irrational feeding frenzy by some. I have yet to see any real numbers that show "shooters" increasing exponentially. Yes some increase in sales. I'm doing this from memory but I believe NICS checks are up some 20%. Woopie...And yes ammo of all sorts is scarce. Remember that there are two freaking wars going on. EBR sales are up. But this is a country of over 300 MILLION PEOPLE. Take a guess how many EBRs have been sold in the last entire year? How many individuals does that represent? I bought 3 ARs. So cut those NICS numbers down considerably.

I get tired of referencing the financials of the gun companies. Suffice it to say they are sucking wind for the most part. Subtract the military contracts and the inflated pricing of both the guns and ammo and you have a marginal industry.

Check out the shooting ranges. For a MILLION NEW SHOOTERS to be out there, lets do the math...At 1,000 ranges across America you would need to have 1,000 NEW shooters showing up. Sorry but I call BS on that. There just ain't no way. When are they coming out to these ranges? On Tuesday nite between 9pm and midnite? You go out to any range and you see the same fat old farts all the time. Break out the oxygen bottles boys! The Dalton gang is back !!

I call for realism in this. Be honest and call it as it is. The shooting industry is marginal. No different than after the California Rodney King riots, Katrina, or you name it disaster, the general public can be excited to buy guns and ammo. That is exactly what occurred with the election.

The number of gun OWNERS vs active shooters is way out of proportion. My guesstimate is that 1 in 100 gun owners actually break out the gun more than 1 or 2 times a year. That is why SASS has like 70K or 80K members. Three quarters of which went out once and stopped. Why the acronym of the month gun match, IPSC, IDPA, 3 gun whatever has 50 guys show up.

That is why the NRA still floats around 3 to 4 million members. Why only 60K to 80K of the eligible NRA members actually vote for the Board of Directors. Those gun OWNERS who see themselves as active shooters or 2A participants is miniscule. Beyound miniscule, its GD microscopic.

Don't fool yourselves. Be realistic. MB has a great website and blog and forums. How many folks are active on these? DUDE COME ON ! A blog post gets 10 comments? The forum is filled with thousands of posts by the same handful of guys.

This is a VERY small community. Somehow we have been led to believe that WE are legion. BS. It is by the skin of our teeth that we maintain our rights. The only good thing is that the anti's are even smaller.

The politicians know all about this. That is how lobbyists make their bones. A single lobbyist can walk into a Congressman's office and make a difference. Why? Because they have access to money. Not because they have millions of voters behind them. They have some company or a rich patron and that gives them the influence.

Finally for the all bitching about hunters at least every fall those amongst us who hunt get off our asses and buy a license. In essence voting for the activity they enjoy. The count is still up there in the tens of millions.

Wolfwood said...

What about foreign manufacturers, though? I'm seeing a TON of Prvi Partizan in 9mm, .38spl, and especially .380, and today for the first time I saw Sellier & Belloit ammo where it's normally Winchester. Cases of Wolf 7.62x39 are still readily available, although I was fortunate to get one at $300.

It may take a huge amount of time for domestic producers to gear up, but in Serbia, the Czech Republic, and Russia things may be different. I see that PMC has just developed a Korean connection, perhaps to take advantage of this opportunity.

Anonymous said...

NJ_Larry has a way of cutting to the chase.

Locally, ammo is available with the exception of 380. 380 is sporadic at the local gun shops BUT I have seen it.

Me, I'm still shooting off my Bill Clinton stash. When people wake up one day and realize they have 10-20 years of ammo and components on hand the boom will go bust.

lazs said...

I don't know if general store is right or not... some of course has a grain of truth to it but....

As was said.. it is not just the domestic primer market that is swamped. try to buy wolf primers.

And us as marginal? Not sure about that. Sure, most gun owners don't join the NRA or even shoot more than maybe once a year... in fact, I would say that a huge amount of gun owners aren't even counted on anyones list. They have a gun at home..even a handgun. that no one knows about. I don't think 90 million gun owners in the U.S. is too much of an exaggeration at all..

The supply? well.. unless all the reloading suppliers are marginal and tiny.. try to buy some bullet sizing stuff or molds..casting stuff.. reloading tools.. that is not stuff you horde it is old guys getting back into casting and new guys starting.. you don't cast bullets without some dedication.

The ranges... I don't know what ranges you guys go to but.. right at the start of the new guys term.. there were lots of new guys.. young people. Now, I think only the "old farts" who stocked up and feel comfortable burning up ammo and reloading supplies are there. You don't want to spend $8 to go to the range and shoot a half a box of ammo. I let a kid shoot my 44 mag for 5 or six cylinders full and he acted like I had given him a puppy.

What do I think will happen? I think the American manufacturers better get on the stick. Wolf primers aren't half bad but.. I had not even heard of em before the shortage. You can bet that they don't have any trouble getting permits to expand or money to do it. we might all be buying nothing but wolf, or some other countries primers in the future.

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