Due to the pandemic combined with social and political unrest, we see unprecedented demand for firearms, ammo, and reloading products, but reduced production due to new work safety requirements brought about by the pandemic. High demand + low availability = high prices. This is economics 101.
The Guy From Federal Again
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typetwelve
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Great post, I think I'll break this down into pieces.
It's a panic, panicky people are rarely rational.
Then, like you said, there's the "want it now" people that just aren't willing to wait.
There's the fact that so many live off of credit cards. Don't have $900 for that case of ammo? Visa does, rack it up!
Lastly, there's the folks that just do not know any better. They bought their first gun 6 months ago, aren't one to research ammo prices, and think to themselves "Well...$400-900 for 1000 rounds? That's expensive, but it is what it is."
In my little bubble, most reloaders are frugal, I know I am. I will spend money, sure, but I demand that it's money well spent. I won't pay $150-300 for a case of primers, I just won't shoot.
What I'm seeing is people that shot a lot of factory "common" ammo (like 9mm), and were used to the recent $175/case of it now be ammo-less, so they looked at reloading. Again, like most of them have a clue what a case of primers is worth. I'd say that most would figure out that 1000 primers should be twice what a case of loaded ammo was 10 months ago...but who knows.
It's a panic, panicky people are rarely rational.
Then, like you said, there's the "want it now" people that just aren't willing to wait.
There's the fact that so many live off of credit cards. Don't have $900 for that case of ammo? Visa does, rack it up!
Lastly, there's the folks that just do not know any better. They bought their first gun 6 months ago, aren't one to research ammo prices, and think to themselves "Well...$400-900 for 1000 rounds? That's expensive, but it is what it is."
In my little bubble, most reloaders are frugal, I know I am. I will spend money, sure, but I demand that it's money well spent. I won't pay $150-300 for a case of primers, I just won't shoot.
What I'm seeing is people that shot a lot of factory "common" ammo (like 9mm), and were used to the recent $175/case of it now be ammo-less, so they looked at reloading. Again, like most of them have a clue what a case of primers is worth. I'd say that most would figure out that 1000 primers should be twice what a case of loaded ammo was 10 months ago...but who knows.
Can't brow beat Federal for buying Remington ammo. Remington is the one that squandered their empire. Federal just picked up the pieces they wanted after the fall.
Not sure about primers but as for bullets, you still have Hornady, Sierra, Barnes and a whole host of others. Powder wise, you have Hodgdon/IMR/Winchester then you have Alliant, and Shooters world. I believe Accurate/Western was bought by one of the others, can't remember which. I think that is about it and Alliant is part of the Federal/Vista Outdoors umbrella still I think.
As for primers, you have Winchester, CCI/Federal/Remington and a few foreign ones that you don't see much. So you are right, you now have basically 2 companies in the US. Although I think CCI/Federal/Remington are all different factories. Anyone know if they have combined them?
Rosewood
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You can't have it both ways.
Either they are a monopoly that controls the market or not. If "demand fades" then they don't control it.
Remington went bankrupt because some financial whizzes bought it and loaded it up with debt to pay themselves dividends. When the demand faded they couldn't pay the debt.
It's the same reason they can't go out and build a new factory. That'll happen to them. They'll end up shutting it down when demand fades and get stuck with paying the debt with no revenue.
Panics just pull demand forward. Over the long term the demand grows slowly but every short term panic begets a bust. The only question is the time frame. Hunting season will end. New shooters will taper off.
You can ration by supply, or ration by price. Price controls tend to make matters worse. If I had an LGS I wouldn't be selling primers at the regular price. Why? So the buyer can go put it up for sale on the internet at 10x my price? It IS the gun stores selling on the internet. They are just hiding it.
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Jon651
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Oh my, but capitalism DOES work that way. It is the ultimate "survival of the fittest" competition. Essentially what you are asking is for the government to regulate competition and force companies into an environment where growth cannot be maintained, where both market share and profits are up to the government and not the free market. If these ammo companies were prevented from merging, odds are one or more of the less efficient ones would have gone under and we'd be right back where we are now - no competition and higher prices.
Too many people want the government to be "hands off" until it is something they personally care about - and then it's "There should be a law!" How much market control should the government have? That's the eternal question.
Whatever happened to "let the market decide which business lives and which one goes under"? Unfortunately, our government has historically wielded an uneven hand in deciding which monopolies to allow and which to break up, which businesses will live and which will die - and when you let Big Gov choose then frequently nobody will be happy with the result.
Don't forget the potential of internet sales banned for guns, ammo, and reloading components. How about record checks for purchase and limits for possession? Can't happen, look at Cali and our government in DC. I hope that I am wrong.
In the beginning of the shortage before prices started to rise I went to the range, I shoot mostly reloads so when I was asked about ammo at the check in I didn't buy any. The reason was that the shelves were starting to get a little thin, I figured I would leave it for those that may not have a supply built up.
I keep a reserve so that I can make is a few months with out having to reload back when a range visit was once or twice a week. I quit going to the range on a regular basis and just plan on waiting the insanity out. It will all be better in a year or so, the gullible will eventually run out of money and hopefully the greedy will choke on thousands of rounds of overpriced stuff.
I keep a reserve so that I can make is a few months with out having to reload back when a range visit was once or twice a week. I quit going to the range on a regular basis and just plan on waiting the insanity out. It will all be better in a year or so, the gullible will eventually run out of money and hopefully the greedy will choke on thousands of rounds of overpriced stuff.
What we need is a small war somewhere that doesn't involve us or our enemies. Then it's the booming small arms market of 2003 to 2013 followed by a few years of $500 AR-15s.
Seriously, the number one question is, "What are we doing to protect the health of our employees?"
Asked no one.
I am annoyed by this CEO being out on the shop floor, in a plaid shirt, no less. Again with the "I'm one of you" schtick.
BWTM:
Why are all those damn pallets of ammo behind him? Shouldn't they be shipping them to Johnny Morris? And why isn't Johnny Morris calling Vandercreep and asking, "Where's my **** ammo?" Johnny makes millions of dollars a year selling it; this is costing him big bucks.
Went to Academy yesterday. They too have no ammo section anymore. I asked the clerks if they were getting their regular ammo shipments, and they said, "Yes, they still come Monday and Thursday." So, in that sense, they are "regular." But contents vary wildly. They said they got 500 boxes Monday. And 8 boxes Thursday. They are not receiving what they used to.
And Vandercreep is still doing nothing to find out where it's going. But his employees are safe.
Asked no one.
I am annoyed by this CEO being out on the shop floor, in a plaid shirt, no less. Again with the "I'm one of you" schtick.
BWTM:
Why are all those damn pallets of ammo behind him? Shouldn't they be shipping them to Johnny Morris? And why isn't Johnny Morris calling Vandercreep and asking, "Where's my **** ammo?" Johnny makes millions of dollars a year selling it; this is costing him big bucks.
Went to Academy yesterday. They too have no ammo section anymore. I asked the clerks if they were getting their regular ammo shipments, and they said, "Yes, they still come Monday and Thursday." So, in that sense, they are "regular." But contents vary wildly. They said they got 500 boxes Monday. And 8 boxes Thursday. They are not receiving what they used to.
And Vandercreep is still doing nothing to find out where it's going. But his employees are safe.
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Not long ago, we had what looked like a toilet paper shortage. It lasted a while, and then went away. That was with NO new market for toilet paper, other than hoarding (which I do NOT condemn).
Now we have what looks like an ammo shortage, WITH a new market for ammo, and a customer base well known to be prone to hoarding.
I expect the ammo shortage to go away just like the toilet paper shortage did. I do expect it to take a little longer.
People my age who are short on ammo have had their heads in the sand, or don't care enough about ammo, as compared to more important things, to allocate limited funds in that direction.
This too will pass.
Now we have what looks like an ammo shortage, WITH a new market for ammo, and a customer base well known to be prone to hoarding.
I expect the ammo shortage to go away just like the toilet paper shortage did. I do expect it to take a little longer.
People my age who are short on ammo have had their heads in the sand, or don't care enough about ammo, as compared to more important things, to allocate limited funds in that direction.
This too will pass.
Look at all the empty shelves in the video from 1:00 to 2:00. Their warehouse is 95% empty. All the pallets shown later in the video is wouldn't even fill one semi and at this point has probably already been sold to consumers.
500 boxes on Monday. Bet they sold out all of them before lunch. I bet before the panic, they didn't sell that many in a week.
Rosewood
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I wonder if the current administration would be upset if I spend the big stimulus check they're promising on guns and ammo?
remoteforest
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Considering what may happen during the next four years, methinks buying ammo, even at slightly higher prices may prove to be a solid investment. I know people in many other states, and while Texas is not bad for firearms owners, my friend in California (who cannot leave due to family reasons) is constantly bemoaning the situation there. I cannot fathom what people in very strict states are going through in terms of BG checks, ammo limits, BG checks for ammo, etc. I've often wondered how many California firearms enthusiasts who are close to neighboring states risk bringing in ammo from those states. I have heard there are random stops.
Editing to say that several years ago, a friend who married a Japanese woman, moved to Japan after his wife couldn't/wouldn't adapt to life in the US after a few years. Of course, he had to part with his toys (at a profit), but reported back that no such hobby exists there for the most part, and foreigners cannot obtain firearms although such things do exist there for competition and hunting, but it's the rare person who does so.
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That is the thing, they haven't at Academy or Walmart when they get them in. The 50 round of 22lr at Academy was 4.49. I think the target 9mm was around $14. The 100 round CCI Mini-mag at Walmart was 7.99.
So either Academy and Walmart are taking a loss or the other businesses and or wholesalers are getting rich.
Rosewood
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Except that everyone on all the gun forums says they've known forever that there are up and down cycles, and they all buy ammo based on those cycles. Why wouldn't a CEO know that, too? (Unless the gun forum gurus are full of BS) So you spend two years building a factory, during which ammo demand falls, and when the production line is ready to start up, there's another panic and demand climbs again. In WWII car makers switched to building airplanes in an amazingly short time, built them for four years, then went back to building cars. This is America, we can do it. We're not the land of "it can't be done."
You, me, and plenty of others were buying during a lull in ammo sales. It wasn't a market crash, just a "normal" time.
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Great idea, those annoying hunters that go through a box of 30 30 shells once every 10 years are affecting the ability of hoarders to hoard!
Not everyone knew it was coming... There's plenty of people who stocked up while stuff was dirt cheap, but just as many if not more keep a few boxes on hand and buy as needed.
If a company builds a new factory, adds workers, adds inventory and the sales keep going down they'll be bankrupt in short order unless the perfect storm of 2020 happens. Should the CEO gamble on the 10% chance that demand doubles in a year? It makes more sense to assume normal growth.
Jon651
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Again, in capitalism and private ownership that is not how things work. Private companies don't build up excess capacity just to have it sit idle for what could be years waiting for the next cycle - that is a sure fire recipe for driving UP prices during "normal" times. Why? Because that factory they built still needs to be paid for even if it's not producing anything. Most companies will tell you they need to run at between 80-95% of capacity to pay off debt and begin to turn a profit.
In WWII, the demand for cars nearly vanished while demand for planes went thru the roof - two very similar industries at the time. I'd really like to know which industry you think we could quickly switch over today to making ammunition, then switch back when the surge goes away without causing other problems and costing a boatload of money that this time the government won't be paying for. And we haven't even begun to talk about the raw materials that go into making ammunition. I'm sure those companies are just as effected by the surge in demand as those who make the finished product so it's not just the ammo companies who are alone in this situation.
I'm sure the corporate officers of these companies - whether or not they wear plaid shirts - have done everything they could to increase production to meet demand. I'm also sure that they know even this surge will eventually taper off - but if they over-react to the current situation it could mean MORE trouble for their businesses and their industry later on, not less.
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