Saturday, March 08, 2014

Ammunition Availability, Shortages, and .22 Production

The first time I heard about a shortage of ammunition was from my father, who talked about how ammunition was impossible to get during World War II.  As I now own the .22 rifle that had kept much of the neighborhood in venison during the depression (he told me that it had accounted for about 200 deer over the decades, as it was loaned out to neighbors),  I made the mental note that I would not be caught short in a future conflict.

As a young adult I noticed a special on Remington .22 ammunition under the Peters brand at the local Farm and Fleet.  I bought 10,000 rounds.  So did my brother.  I finally used the last of that reserve quite a few years later, after burning through multiples of the amount in target practice, informal plinking, training of new shooters, competition, and a little for hunting.

The next notice was in the early 1980's.  I had picked up a "sporterized" Enfield MK IV (.303 British, of course) as a truck gun.  I had seen the prices on surplus .303 in Shotgun News at very reasonable rates, not six months previous, and figured that I could buy a few hundred rounds inexpensively.  I was wrong.  Surplus .303 had disappeared!  It took me a couple of weeks to figure it out.  The Russians had invaded Afghanistan.  Ronald Reagan had been elected.  Surplus .303 disappeared off of the world market.  

Afghans love Enfield rifles, and even make copies of their own, in relatively primitive shops.  They make AK copies, now, as well.  The CIA or proxies, were buying up the entire available surplus .303 on the world market, and sending it to the Afghans who were fighting the Russians.  I remember an astute friend, who taught me much about power politics, warning that we needed to be very careful about arming Islamics.   Prescience noted, 20 years later.  Surplus .303 would be not be available again for many years.  I sold the Enfield and did not buy another for two decades.

There were golden years during the 1990's when surplus ammunition was cheap, and I stocked up.  I ended up selling most of it at a profit, at prices that seem ridiculously inexpensive today.

Everyone who has bought ammunition in the past few years has noted that there have been of shortages.   We are in the middle of one for .22 rimfire ammunition and to a lesser extent, centerfire.  As with earlier shortages, they are caused by politics.  I do not credit the various conspiracy theories when the simple, obvious mechanism of supply and demand explains the process easily.

Machinery for manufacturing new (not reloaded) ammunition is very expensive, has a very long life, and is a major capital expenditure.  Manufacturers are reluctant  to make major capital expenditures for momentary spikes in demand, and for good reason.  A company does not stay in business very long if they are imprudent with capital expenditures of this type.   Winchester nearly went bankrupt after WWI because it had borrowed too much for capital, and passed out of family ownership in 1919.

The demand for ammunition stems from a fairly new awareness of multitudes of the American public about what my father passed on to me about 1960.  Ammunition shortages happen, and it is a good idea to have a stockpile.  The uncertainty of the Obama administration, the attack on second amendment rights, and world wide conflicts escalating with the current administration channeling a combination of Neville Chamberlain and the Muslim Brotherhood make it hard for any but the most obstinately polyannish to be unconcerned.

There are about 80-100 million American gun owners.   Millions of them are new, thanks to the Obama administration.  A majority of them own a .22.  Rimfire ammunition is not practically reloadable (yes, there were a few kits sold in the 1980's).     Most people did not buy 5,000 rounds as a strategic reserve.  Most probably had less than a box on hand.    Suddenly, tens of Millions of people became aware and thought that a thousand rounds of .22 would be nice to have.  Maybe a couple of thousand.  Demand for .22 has historically run under 4 billion rounds a year in the United States, which is by far the largest market in the world.  My friend Alan Korwin reports that the U.S. manufacturing capacity is 4.2 billion rounds a year.  

Suppose 50 million Americans decided that they would like to have 1,000 rounds of .22 on hand for a rainy day, rather like I did in the 1970s.  That is 50 billion cartridges, or about 12 times the annual manufacturing capacity for .22 ammunition in the United States.  My observations show me that virtually every .22 manufacturing plant around the world is running flat out making .22 ammunition for the American market, and it all gets snapped up as soon as it becomes available, at prices about three times the rate of even a year and a half ago.

Basic economics: when demand outstrips supply, prices go up until the demand drops to supply levels.  This puts money in the hands of suppliers, who then ramp up production to increase supply.  It is happening, but it will take a while.

Now with the Ukrainian crises, Mike Vanderboegh is forecasting an importation cut off of Russian ammunition  by the Obama administraiton.  If that occurs, there are a few months supply in the pipeline, but panic buys will empty  the domestic stockpile and drive up prices.  There seems to be plenty available at the moment, in spite of rumors of a cut off by the Russians instead of our government.

Aren't you glad that we live in such interesting times? (Chinese curse reference)

I am going to look for another gun show to give away some more .22 ammunition as a promotion, but I have to replenish my supply of business cards that go with the ammo.

I learned foresight from my father.  I predict a rising popularity of air guns for target practice, pest control, and small game hunting ( I have a couple, and thousands of pellets).   Integral suppressors included on air rifles are common, legal, and cheap, making a mild report even quieter.

©2014 by Dean Weingarten: Permission to share is granted when this notice is included.
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