why has ammo costs skyrocketed?

[eztarget]

looking to better understand this. not sure if i have it right.

obama elected
stockpiling began spiking demand, lowering supply, raising price.

stockpiling caused brass price to go up since shooting is down compared to the market being drained of reusable brass further driving price up.

anywhere close? i'd love to hear.

 

[GKC]

I think that's about it...everyone was afraid there would be bans on handguns and/or ammo, so everyone rushed out to buy. At least that's the most common answer I've heard for it.

 

[skeeterbait]

Those are indeed factors. Other factors that have had major influence are production capacity being impacted by the need to supply the war effort and the heavy purchasing of metals on the world market by other countries, particularly China.

 

[eztarget]

Those are indeed factors. Other factors that have had major influence are production capacity being impacted by the need to supply the war effort and the heavy purchasing of metals on the world market by other countries, particularly China.

i could see the latter but it seems that in terms of the war effort, that has been ongoing for a few years. maybe it is running it's course in terms of impacting our supply? i would have thought that the surge has diminished the use in Iraq. i understand that it is ramping up in Afghanistan but is it that much more?

 

[505Gibbs]

Those are indeed factors. Other factors that have had major influence are production capacity being impacted by the need to supply the war effort and the heavy purchasing of metals on the world market by other countries, particularly China.

China and any other country that's trying to expand their mnfg. sysytem help drive up not only copper but lead by the buying up of any surplus. Since copper is a part of the brass make-up it aggrevated the brass cost.
Additionally, the small arms ammunition companies can't supply the demand whether its hoarding or not due to the commitment to the military demands.

 

[robertrwalsh]

The most recent ammo procurement appropriation mandated American production. Before then most military ammo was purchased from Israel, Brazil and the Phillipeans. The combination of political factors and this shift in procurement but a serious dent in non-military availability. Even many police agencies have had trouble getting rounds, especially .40 and 9mm.

 

[fyimo]

I agree with all of the factors mentioned above and that is what is driving up ammo costs. It's also causing the surge in 22 LR caliber pistol sales as they are really hot right now and finding a good used one at a low price is very difficult if not impossible. I was at a gun show the weekend before last and almost every 22 caliber revolver at the show was bought the first day. I know because I bought two of them and was offered $75 more then I paid for one of them before I left the show.

 

[writerinmo]

China has cornered the market on lead to use in making kids jewelery...

 

[eztarget]

China has cornered the market on lead to use in making kids jewelery...

lol, no doubt.

 

[todd51]

Sorry I don't know where I picked up this info but it stated that there are an estimated 80 million gun owners in the USA but that only about 4 million of them were active shooters, hunters and consumers of ammo. If only 10% of those non consumers got concerned about the current political situation and went out to buy a few boxes of ammo just in case we have tripled the demand on supply. If the ammo manufactures are set up to supply the military and the normal 4 million consumers then the store shelves go bare and the price goes up. The manufactures may figure this is a relatively temporary situation and are not looking to build new facilities that could shortly no longer be needed. Makes some sense to me. Would also relate to the gun availability. What I see at the gun shows and gun shops indicates this demand has not slowed down a bit. Still there are some curious situations out there such as where is all the CCI .22 Mini Mags? I haven't seen a box of new in months, see some new old stock for $8/100 ouch!

 

[Texasflyboy]

looking to better understand this.

The answer you seek is in understanding the fundamentals of economics. And in this case, the economic fundamentals of commercial ammunition.

In short, demand is elastic and supply is inelastic for this commodity. A surge in demand causes a decrease in supply as the ability of the manufacturer to feed that supply chain is outpaced by demand.

The iron rules are:

Demand rises, supply stays the same, prices go up.

Demand rises, supply drops, prices surge.

Demand rises, supply stops, prices surge rapidly until supply exhausted then prices are irrelevant (You cannot buy what is not available regardless of the price you offer to pay).

Conversely:

Demand drops, supply stays the same, prices tend to drop.

Demand drops, supply increases, prices bottom.

Demand drops, supply surges, and quickly the amount of demand in the market drops to near zero on a short time scale as all demand in that time period is satisfied. (You can only eat so many hamburgers. Once you've had your fill, you won't be in the market again until you are hungry again regardless of price).

What has happened with the commercial ammunition supply is thus:

Demand surged. Supply was fixed (what was on the shelf or in the pipeline). Prices surged. Supply could not keep pace with demand in the short term, prices continued to surge. As time has passed, demand has begun to wane, and unless supply is curtailed, prices will have to drop.

It's the law. I don't make it up, I just enforce it.

 

[eztarget]

thanks for the economics lessen. i get that. i guess my question was more pointed at what is causing the demand and what is causing the supply shortage due to the demand. i think there were multiple factors as has been posted previously.

i don't write it, i just read it.

 

[Texasflyboy]

thanks for the economics lessen. i get that. i guess my question was more pointed at what is causing the demand and what is causing the supply shortage due to the demand.

Answer those questions and you would be worth your weight in gold to ATK, Winchester, and Remington.

No one seems to know for sure the causal factors for demand (for commercial ammunition).

I know for a fact that ATK has been trying to answer those very same questions without much success.

Sometimes the scariest thing in business is unparalleled demand.

Do I buy 10 million in lead futures or 50 million? Helleva question.

 

[eztarget]

good point. i guess next question is when is it gonna get better? lol.

 

[PDL]

I guess the question I'd have is 'where are those foreign mfgs?' If the military etc. have to be supplied by American firms; why aren't the foreign companies that used to supply them servicing the civilian demand.

 

[eztarget]

I guess the question I'd have is 'where are those foreign mfgs?' If the military etc. have to be supplied by American firms; why aren't the foreign companies that used to supply them servicing the civilian demand.

good point