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.22 rimfire shortage, continued
beantownshootah
Member Posts: 12,776 ✭✭✭
quote:Have the ammo companies been producing enough?
Objectively no. . .there are still shortages. . .but they're all running at max capacity, so they couldn't make more even if they wanted to.
quote:Is it making it to the shelf?
In many cases yes, but since there are still people "hoarding" all the .22LR they see, it doesn't last long on shelves. In some cases store "insiders" buy up all the ammo they can, and in other cases, there are people "camped out" to buy ammo as soon as it hits the shelves.
Note that it is NOT just "speculators" doing this.
Plenty of "ordinary" shooters are buying all the .22LR they can see, for the simple reason that they never know if/when ammo will be available when they want to buy it. I have a friend who is a very infrequent shooter who was telling me how he started "hoarding" .22LR, since its unavailable, and he doesn't want to be without. I asked him how big was his "stash". . .8 bricks.
IMO, that's kind of funny, because I haven't had LESS than 8 bricks of .22LR handy for at least 10 years, but for this guy, its a massive stash. Anyway, he said he's not buying any more right now.
quote:Will the companies now resume prices ? What's the news?The companies only set their wholesale prices; they don't and CAN'T control the street/retail prices, which are set by supply and demand.
While costs of these things always go up due to inflation and raw material costs, many (though not all) of the retail outlets that stock .22LR have kept prices in line with their wholesale prices, meaning they're not much more than 2-3 years ago. But again, with the current shortage, .22 ammo at that price flies right off the shelf.
Despite the shortages, you can still buy as much .22LR as you like. . .if you're willing to pay current market prices, which are nearly as much as the prices for centerfire ammo (itself somewhat still in short supply, though slowly improving).
Objectively no. . .there are still shortages. . .but they're all running at max capacity, so they couldn't make more even if they wanted to.
quote:Is it making it to the shelf?
In many cases yes, but since there are still people "hoarding" all the .22LR they see, it doesn't last long on shelves. In some cases store "insiders" buy up all the ammo they can, and in other cases, there are people "camped out" to buy ammo as soon as it hits the shelves.
Note that it is NOT just "speculators" doing this.
Plenty of "ordinary" shooters are buying all the .22LR they can see, for the simple reason that they never know if/when ammo will be available when they want to buy it. I have a friend who is a very infrequent shooter who was telling me how he started "hoarding" .22LR, since its unavailable, and he doesn't want to be without. I asked him how big was his "stash". . .8 bricks.
IMO, that's kind of funny, because I haven't had LESS than 8 bricks of .22LR handy for at least 10 years, but for this guy, its a massive stash. Anyway, he said he's not buying any more right now.
quote:Will the companies now resume prices ? What's the news?The companies only set their wholesale prices; they don't and CAN'T control the street/retail prices, which are set by supply and demand.
While costs of these things always go up due to inflation and raw material costs, many (though not all) of the retail outlets that stock .22LR have kept prices in line with their wholesale prices, meaning they're not much more than 2-3 years ago. But again, with the current shortage, .22 ammo at that price flies right off the shelf.
Despite the shortages, you can still buy as much .22LR as you like. . .if you're willing to pay current market prices, which are nearly as much as the prices for centerfire ammo (itself somewhat still in short supply, though slowly improving).
Comments
Any thoughts on the rumor that companies are focusing on CF ammo as it is more profitable round for round?
My own thoughts on this: I know you can't just add a production line overnight, but this is happening more and more, every time a democrat wins the White House or Congress goes democrat. There is therefore a failing of the free market; demand is outstripping supply, whatever the reason for that demand may be. My concern is that this shortage will last all the way through Obama's presidency, Hillary or some other leftist will win in 2016, and supply will still not have caught up, causing a deeper shortage yet. I'm therefore quite surprised that some entrepreneurial manager hasn't either opened another production line OR ran production at full bore through the days of plenty and just sat on it to sell during the shortages.
Any thoughts on the rumor that companies are focusing on CF ammo as it is more profitable round for round?
I don't believe this, and I think the premise of this rumor is questionable.
What matters to manufacturers isn't "per round" profit, but profit MARGIN, and most important, overall profitability. In this case, the .22LR machines and centerfire machines are totally different production lines, so its not an "either/or" situation, the way it is with runs of centerfire ammo. EG some centerfire rounds are loaded on the same machines, so the manufacturer has to decide, if say, they're going to do a run of .270 or .30-06. With .22, they may decide which type of .22LR they're going to run, but assuming the have the ability to run them, idling those machines would only decrease their profitability.
It probably is the case, that with unprecedented demand, the ammo makers are concentrating on centerfire calibers in highest demand, so certain calibers just aren't being made at all, or in very limited number, again exacerbating shortages.
In terms of .22 production, every ammo maker I've heard comment on this (including Remington and CCI) say they're running their .22 machines at full capacity. I seem to remember at least one of these also saying that they're working on adding more capacity.
Probably worth mentioning at this point that yes, we're dealing with a post-Obama election panic, still, but a contributing factor to this is just that there are more shooters today then ever before. Legitimate demand for .22LR ammo (not just "hoarding") actually *IS* higher now than its ever been and it takes a long time for the makers to add tooling to up capacity, even assuming they want to do that.
quote:There is therefore a failing of the free market; demand is outstripping supply, whatever the reason for that demand may be.How is that a failing of the free market? Free market says pricing reflects supply and demand. . .and if you go onto the auction site, where prices are ACTUALLY set by supply and demand, that's what's happening.
I'd say what's "failing" the free market is that for reasons of goodwill most retail sellers of ammo are NOT raising their prices to offset the increased demand. This, paradoxically, is WORSENING the problem. Artificially low pricing acts as an incentive for hoarders and resellers to buy all they can, whenever they can.
If, for example, Walmart would RAISE the prices of its .22 ammo from $30 a carton to $60 a carton, then people wouldn't be so eager to buy every carton they could get their hands on. . There would be less profit margin in reselling and both "hoarders" and "speculators" would be buying less. The only people who would buy ammo would be those who "needed" it. If pricing were appropriate, there would actually be some ammo on the shelves at all times. People would grouse at first, but if the retailers all did this, the supply/demand curves would re-adjust much faster, with the result being better availability for everyone.
quote: My concern is that this shortage will last all the way through Obama's presidency, Hillary or some other leftist will win in 2016, and supply will still not have caught up, causing a deeper shortage yet. I'm therefore quite surprised that some entrepreneurial manager hasn't either opened another production line OR ran production at full bore through the days of plenty and just sat on it to sell during the shortages.
On the first thing, I don't think politics is going to play into this for two reasons. Gun control was a big loser for Obama and the Democrats this cycle, and public perception is continually shifting in the PRO-gun direction. I just don't think they're going to want to try that again so soon. Next, the way things look at least right now, my money isn't on a Dem President in 2016.
On the second thing, again, I've heard that one of the big manufacturers IS building more production capacity. The issue is, obviously, the tooling for making ammo is a HUGE capital expenditure, and it takes a long time to physically build the infrastructure. Its also high liability and requires quite a bit of technical expertise. Not just "anyone" can do it. It doesn't make sense for anyone to increase capacity if demand is anticipated to return back to normal in a year or two, either.
What I'm "wondering" is why foreign imports haven't take over. Even if all our production lines are running at 100%, that's probably not true globally, and with huge demands in the USA, it might "pay" for foreign companies to up their production for export to take up the slack. I suspect there are issues there with respect to difficulty in importation (supposedly the Obama administration actually HAS made it harder to import ammo), plus reduced profitability due to currency effect, etc.
quote:Perry shooter: I have known this dealer for close to 40 years. He personally told me that US ammo companies have all but shut down all production Standard Velocity ammo and are using all rimfire lines to make Higher profit Bulk and High Velocity 22 Rimfire ammo.I believe this, though I think the reasoning may be a bit more mundane. Assuming you're talking about ammo of otherwise similar quality, standard velocity ammo isn't any more or less profitable to make or sell than high velocity. Component cost is similar and retail pricing is similar. So makers aren't going to make any more (or less) money running all HV vs RV.
I just think that with unprecedented demand, the makers are doing whatever they can to meet it. They want to minimize different types of runs (to maximize run time) and they want to put out the ammo that's in highest demand. Highest demand ammo actually is bulk-pack and high velocity, in that order, I think, so that's what they're putting out.
True match ammo is in lower overall demand, AND its more labor intensive to make, requiring more expensive components and higher quality control. So if something is going to "give", unfortunately, its going to be that.
Edit #2
quote:Competentone:
Excellent explanation/comments, beantownshootah!
I will add, though, that this whole shortage really has little to do with free-market economics. The high prices, and lack of availability is driven by politics and government interference (and fear of government interference) in the marketplace.
Thank you.
Again, "free market" just states prices will respond to supply and demand. Supply is fixed. . .every maker is putting out 100% of what they can right now. Demand is at previously unprecedented levels, thereby by itself explaining why pricing is at previously unprecedented levels.
Of course fear of gov't action has significantly ramped up demand, and that's what initially triggered the current (which is actually the SECOND) Obama ammo panic. At this point I think it should be clear that there is not going to be any more legislative type activity on guns or ammo during the balance of the Obama administration. They tried that. . .its over now. But even stipulating that this is the current political situation, the perception may be different, and when it comes to markets perception is reality.
On availability, with one exception I'm not aware of any State or Gov't program of the last 3 years that has altered the supply of ammo. To the best of my knowledge, no ammo makers have gone offline or lost manufacturing capacity. The only thing, as mentioned, is that the Obama administration has made it harder to IMPORT ammo. As a matter of practice, though, apart from high grade match ammo (most of which is imported), imported .22 has always been a relatively small part of the market.
Some places (NJ, MA, etc) have ALWAYS required a gov't license to purchase ammo. . .that hasn't changed. The overwhelming majority of states don't require any special license to buy ammo. . .and that hasn't changed either.
Putting in new restrictions on buying ammo doesn't affect the overall supply of ammo. . it only potentially LESSENS (not increases) the overall demand. I'm not actually aware of any such new restrictions, but stipulating that you are correct and there have been some new State ones making it a bit tougher to buy ammo, these things by themselves should NOT affect either the cost or availability of ammo, ESPECIALLY in the vast majority of States where these restrictions don't apply.
Put more simply, if supply is fixed, but you limit people's ability to buy ammo (by making them jump through hoops with licensure, registration, etc), that should decrease demand for said ammo.
quote:If Congress passed a Bill (with overwhelming bi-partisan support) tomorrow that stated there will be no taxes, restrictions or regulations placed on the sale, ownership, or transportation of ammunition for the next 80 years -- and all the current state-passed laws were declared unconstitutional -- you would see a flood of ammunition become available for sale at prices from a decade ago.I disagree.
First of all, and most important, the dollar has considerably less purchasing power than a decade ago and commodity costs then were at all time lows. Consequently, a decade ago, ammo was just unprecedentedly cheap by American historical standards.
Those days are gone now, and even stipulating that we return to pre-Obama ammo supply and demand levels, we're probably never going to see early Bush 2 level super-cheap ammo pricing again during our lifetimes. If you want to just call this "inflation", that's a reasonable simplification.
In terms of Congress. . .sure that kind of thing would help re-assure people and decrease "panic" buying, but you're effectively making an "if my grandmother could fly type argument". With your requirement of a permanent bipartisan supermajority pro-gun law, you're effectively asking for a new second amendment.
The reality is that you're not going to a major bipartisan pro-gun legislative package pass right now (let alone something like a new second constitutional amendment). The Dems still hate guns, they still have a majority in the Senate, the President holds veto power and also hates guns, and this is just not going to happen. You're also not going to see every State based restriction on guns and ammo (some of which have been in place for decades) instantly repealed or suddenly found unconstitutional.
I will add, though, that this whole shortage really has little to do with free-market economics. The high prices, and lack of availability is driven by politics and government interference (and fear of government interference) in the marketplace.
Some states have recently put in place laws where they will be "tracking" everyone's ammunition purchases. There have been proposals on national, state, and local levels of extreme taxes, and strict limitations on purchases/ownership of ammunition.
With such political threats, people are reacting. The increased demand for ammunition is driven mostly from this government interference (even threats are a form of interference) in the marketplace.
If Congress passed a Bill (with overwhelming bi-partisan support) tomorrow that stated there will be no taxes, restrictions or regulations placed on the sale, ownership, or transportation of ammunition for the next 80 years -- and all the current state-passed laws were declared unconstitutional -- you would see a flood of ammunition become available for sale at prices from a decade ago.
I have always made all my purchases based on the actual material and labor involved in the item. Speculation on what someone else will possibly pay based on what someone else has previously paid never concerned me. And I have done alright. Many People buy stock in a company, without any regard for the product, only in speculation that someday resale of such stock will yield a profit. It is the American way. A pen used by the president to sign a bill has far greater speculation value than a ordinary pen that it was.
Individuals buy ammo and resale it for a profit, and so it goes onwards and upwards.