22 Ammo Shortage

[Randall53]

I just read this article on a site from ammoland. I'm wondering if this is anywhere near the truth?

“Take for example .22LR ammunition. The industry as a whole (all manufacturers combined) is setup to produce 4,200,000,000 (4.2 Billions) .22 LR annually. That is running all the machines, full capacity all the time, all manufacturers together.

There is NOTHING they can do to produce more.

That corresponds to 230,137 cartridge per State per day, which is 460 bricks of 500 .22lr per day per State. That means that if less than 50 people per day in each State are buying 10 bricks of .22, it is enough to dry up the entire supply as it is being manufactured.”

I think the last sentence should have read "if 153 people in each state buy a store imposed limit of 3 boxes each day, this will dry up the entire supply as it's manufactured."

At any rate this does make a lot of sense if true.

[broox]

I believe Joe Biden is personally going to every Walmart and buying all the ammo and then putting it on the space shuttle

[Randall53]

And he does it all in one night like Santa does. Right? LOL. 😳

[enfield]

On good advice from my elders, I started buying a brick of .22 every time I went past the sporting goods counter at K-Mart and had the cash to spare.  That was when the prices were reasonable - not any more.

Edited January 27, 2014 by enfield

[Raoul]

I believe Joe Biden is personally going to every Walmart and buying all the ammo and then putting it on the space shuttle

He and Howard "Yeeeehaaaaa" Dean.

[FJCrusing]

So wouldn't it technically be more of a "hoarding" that is going on than a  "shortage" if 4.2 Billions rounds are being produced annually?  i wonder what annual production numbers were previous years.

[Jamie Jackson]

So wouldn't it technically be more of a "hoarding" that is going on than a  "shortage" if 4.2 Billions rounds are being produced annually? 

 

or perhaps prudent purchasing?

 

Hoarding may be when "the other guy" purchases it before I do.

 

Just a thought...

[hardknox00001]

I thought about this the other day.  I wondered it they just quit putting it out for a while until they have enough to fill the shelves a couple of times on hand, then put it out.  If you could see that the shelf was full and could stay that way, the hoarding and reselling would stop I would think.

 

They could put a "coming soon, a full shelf" sign out and just pile it up at the warehouse until they had enough.

[Caster]

I thought about this the other day.  I wondered it they just quit putting it out for a while until they have enough to fill the shelves a couple of times on hand, then put it out.  If you could see that the shelf was full and could stay that way, the hoarding and reselling would stop I would think.

 

They could put a "coming soon, a full shelf" sign out and just pile it up at the warehouse until they had enough.

 

 

Why would a company in a capitalist society like ours do such a thing?  They have a constant and steady stream of cash flowing.  They aint in the business for any reason other than to make money.  They're doing just that.  Why would they change?  Every business aspires to have what CCI currently has.  Demand and instant purchase of produced goods at a maximum production level.  

 

The whole deal over .22's boils down to whining babies who didn't squirrel away a stash when they had a chance.  No surprise to anyone.  People have only been wailing about TSHTF for decades now.  TS can HTF in many different ways, some more subtle than others.  

[hardknox00001]

Why would a company in a capitalist society like ours do such a thing?  They have a constant and steady stream of cash flowing.  They aint in the business for any reason other than to make money.  They're doing just that.  Why would they change?  Every business aspires to have what CCI currently has.  Demand and instant purchase of produced goods at a maximum production level.  

 

The whole deal over .22's boils down to whining babies who didn't squirrel away a stash when they had a chance.  No surprise to anyone.  People have only been wailing about TSHTF for decades now.  TS can HTF in many different ways, some more subtle than others.  

 

I guess I should have had this in before I posted above but, I know that it'll never happen, it was just wishful sitting on the pot thinking. :)

Edited January 28, 2014 by hardknox00001

[No_0ne]

So wouldn't it technically be more of a "hoarding" that is going on than a  "shortage" if 4.2 Billions rounds are being produced annually?  i wonder what annual production numbers were previous years.

 

 

I thought about this the other day.  I wondered it they just quit putting it out for a while until they have enough to fill the shelves a couple of times on hand, then put it out.  If you could see that the shelf was full and could stay that way, the hoarding and reselling would stop I would think.

 

They could put a "coming soon, a full shelf" sign out and just pile it up at the warehouse until they had enough.

 

 

I think the last sentence should have read "if 153 people in each state buy a store imposed limit of 3 boxes each day, this will dry up the entire supply as it's manufactured."

Check the math.  It actually works out to 767 people buying 3 boxes/day. Having said that, nobody has to "hoard" anything, if the entire US production run yearly can be consumed by an average of 767 people per state buying 3 boxes of 22lr daily.  I'm amazed that there was ever any 22lr sitting on the shelves ...

 

... and yes, it's been reported many times by the industry that total capacity of 22lr was around 4 billion rounds annually.  Apparently there are around 70+ million gun owners in the US.  This works out to 57 rounds of 22lr per owner per year.  Even if only 10% of all gun owners buy 22lr during the year, that's only about a brick per owner per year available at full capacity.

 

Just for fun, consider the fact that there are approximately 4000 Walmart stores in the US.  That means that the entire production run will supply each store with only about 28 boxes of 22lr daily.  Of course, there won't be any left to fill orders from any other retailers, let alone wholesalers and distributors, or to fill the backlog of orders that are already in the pipeline (many sources are reporting that the entire 2014 run is already spoken for).  I doubt that posting photos of loafers scooping up ammo at WalMart is going to have much effect on supply for a while.

Edited January 29, 2014 by No_0ne

[LCPfraTN]

And with the above math, I do not understand why all ammo manufacturers aren't investing to expand production...or perhaps they are and are being secretive about it.

[quickbiscuit]

And with the above math, I do not understand why all ammo manufacturers aren't investing to expand production...or perhaps they are and are being secretive about it.

I would think that ammo manufacturers would have to see several years of this demand before they started pumping millions into additional equipment, facilities, and employees. They are probably still looking at this as a temporary problem. Once people stop acting crazy and let the supply build up again there won't be a need for the extra investment. Eventually people are going to get tired of standing in line at walmart at 6:45 am just to get 300 rounds (like my neighbor did is morning).

[No_0ne]

And with the above math, I do not understand why all ammo manufacturers aren't investing to expand production...or perhaps they are and are being secretive about it.

 

Most are, but all are hesitant to invest large sums for what is essentially a temporary aberration in the supply and demand cycle.  Remember, after the last run on ammo in 2008-09, prices fell fairly quickly back to levels before the previous panic, and supply mostly stabilized (although 22lr has been fairly tight for years).  I have read several articles which explained in detail why expanding 22 production isn't all that feasible - it's rather labor intensive to produce, the profit margin is extremely small at pre-panic price levels, the machinery can't always be used to load other calibers, etc.  Bringing new lines up can take years, as new machinery is purchased, buildings have to be expanded or even new plants built, materials for components are already in short supply and costs are rising, other calibers are still being produced in record quantities and these are more profitable, etc.  It's my belief that 22lr will eventually settle at a "new normal" price that will be 50-100% higher than earlier years before the market will eventually settle down, and that ammo supplies will remain very tight for at least another year.

[LCPfraTN]

I don't believe this is a temporary increase in demand. The first reason is due to the substantial increase in new shooters coupled with the large increase in large capacity .22LR rifles and .22LR conversion kits. There is also a change in mindset now regarding sufficient supplies of ammo to maintain at home that will take years of sufficient supplies on store shelves at reasonable prices to change. The manufacturer that wakes up and realizes this first and invests in expanded capacity will be the one that is best able to capitalize on what I believe is a long term and permanent increase in demand. And if no manufacturer in the U.S. does, then someone overseas will. Otherwise, I am now beginning to think we will continue to have shortages for years if not indefinitely.

[tnguy]

On good advice from my elders, I started buying a brick of .22 every time I went past the sporting goods counter at K-Mart and had the cash to spare.  That was when the prices were reasonable - not any more.

And when k-mart sold ammo.

[quickbiscuit]

The first reason is due to the substantial increase in new shooters coupled with the large increase in large capacity .22LR rifles and .22LR conversion kits.

There may be more to the latter part of this statement than I give credit. Certainly after sandy hook there was a run on .22 cal firearms and ammo because everyone had to have a gun...any gun...and the .22 was the most economical choice. But the .22 AR platforms may be more of a factor than some (including me) think. Maybe that is the gun that has made shooting .22 fun again and more popular. But I do remember after sandy hook the only AR style rifle you could find was the .22LR configurations, so at least then people definitely weren't rushing out to buy them. I don't know, it's an aggravating situation but it's fun to discuss.

[No_0ne]

I don't believe this is a temporary increase in demand. The first reason is due to the substantial increase in new shooters coupled with the large increase in large capacity .22LR rifles and .22LR conversion kits. There is also a change in mindset now regarding sufficient supplies of ammo to maintain at home that will take years of sufficient supplies on store shelves at reasonable prices to change. The manufacturer that wakes up and realizes this first and invests in expanded capacity will be the one that is best able to capitalize on what I believe is a long term and permanent increase in demand. And if no manufacturer in the U.S. does, then someone overseas will. Otherwise, I am now beginning to think we will continue to have shortages for years if not indefinitely.

 

If you are a manufacturer, the best plan from an economics 101 standpoint is to gradually raise your prices on the ammo you can currently produce.  This increases return on investment of existing capacity, increases cash reserves to build a "warchest" for potential future expansion, and should eventually help reveal a market "top" pricepoint for calculating return on investment of capital prior to engaging in any costly expansion of capacity.  Once those figures are established, it's easier to make an informed decision as to whether your company should spend millions to build plants with increased capacity.  Thus, the problem from an economics viewpoint is that manufacturers aren't raising their prices fast enough to respond to the new market conditions, thereby leaving a void which the scalpers are able to fill.  I realize this view won't be very popular with the shooting community at large, as most want to see 22lr at 4 cents/round, I'm afraid that if you are correct, and the "new normal" is now, that pricing will never return.

[tnguy]

You are correct. However, I suspect the manufacturers have contracts to supply at fixed prices (though I admit I don't know how it is done). That would imply a delay in rising prices.

[frankmako]

hording is what making it short for the rest of us.  

[crossfire]

hording is what making it short for the rest of us.  

I don't buy into that. Go to Gun Broker and do a search on 22lr under the ammo tab. Twenty-two pages of 22lr ammo for sale. The ability for anyone with a PC to sell on the internet to a unlimited buyer base is what's driving the reseller market and fueling the "shortage"

[Blu]

Came across an add in the ammo section on armslist today with a photo of 3 guys waiting at walmart for 22 ammo and talking how they were going to buy it all and sell it for double . The guy who placed the add was pissed and I imagine the 3 in the pic will be when they see their pic on armslist.

[R_Bert]

Came across an add in the ammo section on armslist today with a photo of 3 guys waiting at walmart for 22 ammo and talking how they were going to buy it all and sell it for double . The guy who placed the add was pissed and I imagine the 3 in the pic will be when they see their pic on armslist.

Already gone.  Too bad.  They should have left it up.

[TrickyNicky]

hording is what making it short for the rest of us.

No more so than shooting is the problem. Once the ammo is in the end users hands its immaterial whether they are hoarding or shooting, the ammo is out of the supply chain either way.

[KKing]

[quote name="frankmako" post="1103808" timestamp="1391122088"]hording is what making it short for the rest of us. [/quote] According to this logic I helped the problem by shooting about 200 rounds of 22lr on this crappy day. I know a lot of guys have a "magic number" they need in stash, I personally do not. I'm not saying I don't have 22lr a'plenty. What I'm saying is I'm not going to piss and moan anymore about something that I personally cannot fix. I'm going to buy what I can when I find it, and keep shooting with my wife and family, enjoying the sport I love. At a certain point the stress you guys are causing yourselves over the rimfire ammo situation is counter productive at best. I hate scalpers as much as the next guy, but piss on them, I came here to party :)