Home Forums Hunting & Shooting Ask The Gunwriters New from OL - Here’s What the Ammo Shortage Revealed About the Industry

From another press release:


Apparently new primer plants don’t magically become operational overnight.

Interesting. Trading components to keep production lines moving is much like what the “Carbine Board” did between the 10 prime contractors and dozens of subcontractors of M1 Carbine parts.

Good article.

This industry has been an interesting study for some time. I have followed it closely as an on again/off again Vista Outdoors shareholder. The industry has suffered several boom and bust cycles in the past. If you remember correctly, in 2019 the major online ammo and component retailers were offering frequent sales and shipping/hazmat discounts. They had over produced following the previous shortage/hoarding cycle. I suspect when pandemic buying hit, management at Vista and Olin (Winchester) chose not to expand production capacity out of fear of getting stuck with excess capacity and inventory. They quickly discovered when operating at 100% of capacity and their supply no longer meeting demand, profits can expand sharply. Quite frankly, I believe they like the new paradigm.

As a shooter, I'm not happy with what is an oligopoly controlling our sport. Primer production in the US is virtually controlled by two companies Olin (Winchester) and Vista. Hodgdon controls the distribution of powder. Vista now owns Remington, CCI and Federal as well as Alliant powder. I am confident they have no interest in returning to primers for $28/1000. Im pretty sure the new outfit trying to get going right now also has no interest in the old pricing.

Vista announced several months ago that they were going to split themselves into two companies. One would be ammo, the other, everything else. Management has not been able to get the stock or earning multiple to move and the CEO, Chris Metz was just fired. There are some issues there.

I think it is reasonable to assume that powder and primer production capacity in the western world is now leaning towards military contracts. The fact I can't get Retumbo or RL23 may not be that that particular powder is being used in military production but that the facilities that make powder are likely being used to make products for military customers.

I suspect we are going to scrounging and bartering for some time.

405wcf

Moosemike, I see Midway still has a couple .300 Savage form/trim dies available. Might be able to make them from .308 Win. I suspect a little neck turning would be in order.

Thank the EPA, OSHA, DOT, etc.

Several companies "expanded capacity" during the series of boom-and-bust "shortages" since the Clinton administration's "assault rifle ban" in the 1990s--which resulted in the first big primer shortage. This was caused partly by rumors (some on the then-young Internet) that "new" primers were designed to "go dud" within 6 months, which resulted in some people buying all the primers they could find/afford, and burying them inside PVC pipe in their back yards. There was no primer shortage. Instead it was a buying panic induced by paranoia and rumor. (Same deal with the rimfire-ammo buying panic during the Obama years--which is NOT happening this time around, apparently due to so many people "hoarding" rimfire ammo during that period.)

The other thing that happened during that era was that many companies increased production capacity, of everything from components to AR-15s. This meant building new buildings, and buying new equipment. They then got burned when demand dropped off considerably.

Today we probably do have a shortage of primers and powders, due to increased military demand. I first heard of this over a year ago through folks in the industry who produce primers and powder. And the longer the present world-wide conflicts continue, the more military demand will cut into production of handloading components--just as it did during WWII.

But it "must" be due to a profit-conspiracy among manufacturers. Might be. Do know that oil companies have made record profits in the past year or so.

The article is heavily reliant on interviews with industry leaders and retailers.

What's not there is past and present trends and speculation for future consumer demand. Surely items of importance for the industry. Future military demand seems likely to be assured. I'd guess the civilian consumer demand would show sharp and dramatic increase in the last 10 to 20 years. What might such a graph show for future civilian consumer demand in the next 10 to 20 years? And how might such a graph effect business decisions in the industry? Words like volatility, and uncertainty come to my mind.

Civilian firearms ownership increased considerably in the last couple years, due to more than one reason--which increased demand for ammo. Add that to the present increase in military-ammo production, and the classic demand/supply dynamic increases--and not in the favor of "average" shooters and handloaders.

I’m not sure it’s a vast left-wing conspiracy, but it seems like the component manufacturers are certainly taking full advantage of the market conditions. If they’re not raking in record revenue, they are not very astute. It seems like hunters and shooters are paying double or triple retail prices. Consumers are complaining about availability AND prices, but somebody is cleaning off the shelves? Fortunately, I seem to have adequate supplies for my hunting loads for now. What irritates me is Federal discontinuing loads that aren’t top sellers like .257 Roberts, .35 Whelen TBBC, and Trophy Bonded Tipped components. Buyer beware, I guess.

Copper prices have jumped from around $1 a pound in 2000 to almost $4. And copper is a major component not just in cartridge brass but primers and bullets.

Primers have seemed to be much more readily available over the past few weeks - news of their availability has been coming to my email inbox from more than one retailer along with offers of either free shipping or free hazmat for an amount that is usually the current (highly inflated) price of 1000 primers. I even heard about a pack of a thousand primers delivered (total cost) in the past month for less than $90 (don't message me for details because that isn't currently available - I checked yesterday). Even three or four years ago when primers were easily found for $45 per thousand, shipping and hazmat could easily add up to $40 more (so it made sense to buy primers at the local store or buy a large order of primers and powder even then). Doubtful we'll see primers anywhere near $45 per thousand in the near future, but I'm hoping to see them for less than $60 per thousand this year.

I've also seen powder much more readily available over the past few months with some relatively popular powders at around $30 per pound in the past several weeks.

The market dynamics are interesting because powder and 9mm ammo have been coming down in price over the past few months while primers and 5.56 ammo are still very much at their elevated (overinflated) levels. The article talks about primers and alludes to where the 5.56 ammo is probably going (a safe guess being NATO countries that had been skimping on military expenditures for several years).

Steve - thank you for posting the article link - it was a great read, and the part about component swaps was VERY interesting.

I think before this is all over, military planners will (again) realize the importance of a healthy civilian demand for small arms ammunition.

My question to the manufacturers is why are the prices of rounds and components almost twice as much as inflation? Honestly, I feel like the manufacturers take advantage of these times to rip us off as much as possible. In 2017 I could buy a case of shotgun shells for $50.00 shipped to my house. Those same shells are now $100 but by inflation numbers those shells should really be $61.03. I know it's supply and demand but I really think it's take advantage of them as much as possible and for as long as possible. The industry does more to hurt the shooting sports as they do to so called promote them.

Yes and no. Few people ever drill down like that and even fewer understand what they find. Customers today also start with different assumptions than older shooters and hunters, due largely to 20 years of the Global War on Terror.

We grew up on westerns and cops-and-robber movies with characters using classic American weapons. This generation grew up on first-person shooter video games, action-adventure movies, and a constant flow of news about the GWOT, all of which show everyone uses gas-operated weapons. This generation still needs .35 Remington performance, but they want it an AR-15.

The GWOT has also given us tens of thousands of veterans who understand long-range shooting because they’ve done it in combat. That drives interest in long-range shooting sports that favor cartridges with long, high-BC bullets that need faster twists than classic hunting cartridges. The real difference in the 6.8 Western and the 270 Winchester is not a few hundred feet per second or how they take game, but that the 6.8 can stabilize the long, high-BC bullets that the 270 can’t.

During COVID, it made sense for manufacturers to thin the herd and simplify operations like they did during the Great Depression and after WWII. There have been miscalculations, like feeble production of 30-06 ammo, but they can fix that in a year or two.

None of this means anything to a deer or an elk, but markets respond to what shooters want, not what they need.


Okie John

Regarding new cartridges, one of the industry insiders in the article talked about how, with the inherently limited supply of ammo for a new cartridge, the manufacturers can limit production to premium offerings for that cartridge and make more profit on each box of ammo. That's the simple reason - if they can make 5x (or even 10x) the profit with a box of the new 6.5 Miracle Whizzum compared to a box of .270 ammo, they're interested.

This is a bit of a deviation from the OP, but I think germane. My concern here is copper. As JB mentioned a few posts above there is a real shortage there. Living in Oregon, it has become evident that Oregon Democrat Politicians are no more sane than their progressive brethren to the south of us in the once? great? state? of California. If banning lead in bullets there is a good idea, it is going to be a great idea here as well. To add to this perspective a little, a few years ago I took a course at the OSU Extension service aimed at certifying the use of Zinc Phosphide in bait used in Ground Squirrel control. Turns out the environmentalists approve that because the squirrel dies underground. One reason for their support lies in the fact that the Oregon Ground Squirrel uses god only knows how many thousands of 22 LR and various centerfire rounds in attempts to control this animal. This is an abundant food source used by scavenging birds and other critters. The reduction in the need for ammo to shoot a squirrel already dead underground is eliminated. Information in this course indicated there is a base plan to reintroduce the California Condor to the Steens and Hart Mountain regions. This is right in the middle of extensive squirrel populations. I haven't heard anything further on this idea, so maybe the threat has backed off, I don't know. However, Oregon Wild has the entire state of Oregon listed as expected range for the Condor, and the Yurok Tribe just south of the border has recently released some Condors.

So I think it is only a matter of time until Oregon bans lead in bullets and I would not be surprised to see some sort of attempt to force solid copper 22 LR or any of the 17 rimfire bullets as well. Increased demand for an already short critical component does not bode well. Dealing with Democrat politicians we can forget about terms like reasonable, practical, rational, etc.

Over the past 25+ years these boom and bust cycles have become more commonplace and the reaction by consumers is predictable. The consumer only buys what they need for their day at the range and takes the availability of ammunition and components for granted. They think that they’ll just mosey on down to the LGS and buy their 100 primers and a pound of powder not concerning themselves with their future needs….only their immediate needs! It’s a common flaw in today’s society that puts little value on being prepared and instead thinks that between Amazon and Cabelas they’ll never want for ammo or components, they’re always wrong. Then with nothing available to them they blame everyone else for their shortsighted ignorance. Once everything starts showing up on the shelves they forget what they’ve been through and go back to their old, cheap, shortsighted pattern of never being prepared and blaming everyone that has ammo and components for their ignorance…..

Having every caliber ever released might be fun for bragging rights but it becomes an impossible task keeping up with feeding those multiple calibers. I more or less standardized around 308, 30-06, 338wm cases so that if everything ceased production tomorrow I could feed all of my firearms through my “standardized calibers”. I inherited a 7mag that I have zero use for as a 7 mag but it’ll be very useful to me as a 338wm.

I don’t see ammunition and components getting easier to acquire as the years roll by so by streamlining my arsenal I expand on my ability to shoot more and shop less. After this last cycle there should be nobody that’s over the age of 30 and seriously into firearms and shooting that ever finds themselves short on either ammunition or components…if they do it’s their fault and theirs alone…no blaming “hoarders” or manufacturers for the customers ignorance.

I am considering going in that direction

Outstanding article and conversation, thanks

I'm seeing more ammo on the shelves at Cabela's and some local shops but no 300 WSM premium ammo. All sorts of obscure stuff like 450 Bushmaster, 350 Legend, 300 Blackout though. More 308 Win than I remember seeing prior to COVID. Thought it would be better than this by now.