Tuesday, April 21, 2009

Some more ruminations on the ammo shortage...

Die Time: In comments yesterday, Ed Foster mentioned "die time". This is exactly why you can't get, for example, .380 right now. At most manufacturers, the machinery they use to load .380 (which uses different "dies" to load different calibers) is only used for that purpose for a small portion of the year; the rest of the time it's used to load more high volume stuff, like 9mm. They churn out .380 for a couple of months, say, at the end of the year, and it's enough to hold the market over 'til the next winter.

Rumor has it that this past year's demand for 9mm FMJ was so great that Winchester didn't bother tooling up for .380 and kept the presses pumping out 9x19 ball. Even if the other two companies didn't do likewise, what percentage of the .380 market do you think that Winchester represents? Federal and Remington certainly don't load enough to take up the slack, and that causes the supply to crash to nothing.


Case Lots: Believe it or not, the kind of people that read gun blogs, post on internet gun forums, go to the range every weekend, and name their gun "Vera", are a small minority of gun owners. For fifteen years I tried to convince Joe and Jane Public to buy ammo by the case. I failed miserably. No matter how much you explain the price savings when buying a thousand rounds at a lick, or the fact that ammo doesn't go bad, most people would look at you and say "I don't know, $100 seems like a lot of money, and what am I going to do with a thousand rounds of 9mm?"

The ammunition manufacturing and supply pipeline is simply not set up for the average consumer to walk into Wal-Mart and buy two cases of ammunition. If your average shooter normally bought 100rds/month to take to the range and decided to buy two cases instead, "just in case", he has just bought more ammunition at one lick than he would normally buy in two years. Think about that for a second, and then multiply it out over several million shooters suddenly buying way outside their normal pattern.


Production Capacity: The manufacturers are running full tilt. The only way they could make more ammunition is to build more plant, and they are not going to do that for several reasons. The first is that this bubble will contract sooner or later. Joe and Jane Sofaspud are going to realize that they really don't need 10,000 rounds of Winchester .45 in the basement, and that minivan payment isn't getting any smaller. They'll sell it to Annie Appleseed and Ivan Ipsc and demand will cool down.

The second reason they won't build more plant is financial. Remember that economy thing? Yeah, well it's still bad. Business loans aren't really easy to get right now, especially for businesses that are square in the middle of the Media-Congressional Complex's crosshairs. When the stroke of a pen could cut your sales by 50%, you are not what lenders call a "good risk".


Supply & Demand: Right now prices are high not because of transport costs or raw materials costs, which drove the price spike of '05(really an honest adjustment, as ammo prices had stayed almost artificially flat for the better part of a decade,) but because of simple supply and demand. If I put my widgets out for $1, and the first guy that walks in the store buys them all, I'm obviously not charging enough for my widgets.

As demand stays high and supply stays small, prices keep going up. They will go up until they become high enough to cool demand. As demand cools, supply will build back up. In order to move the new supply, prices will come back down somewhat until they reignite demand. This is Econ 101, folks, and it's as predictable as 32 ft/sec² or π*r².


UPDATE: Grant Cunningham points out that when the supply chain gets sucked dry back to the manufacturer level, it can have ripples even farther up the line. Ammunition is not made of wishes and unicorn droppings, after all.

43 comments:

T.Stahl said...

32.174 ft/sec² actually.

But yes, that's exactly the way it is. Fortunately I belong to those buying by a case or two, so I can sit it out and stock up when prices are low.

Standard Mischief said...

I remember once on the idiot box seeing some autoworkers. They were mad because the company they worked for was, according to contract, working them in 12 hour shifts (they were getting overtime of course). They desperately wanted the auto company to hire more (unionised, of course) workers. "Nothing doing" said the auto exec. He knew demand would not remain at this level forever

I would imagine that ammo plant personnel would be skilled labor. You couldn't just get some yahoo from the temp agency to come over and fill someone's shoes to create a second shift. There's also quality control and product liability to worry about. Oh, and if the workers were unionized, well that's another wooden shoe in the cogs.

WV: cousla A tasty dish of couscous and gorgonzola cheese.

the pawnbroker said...

"supply & demand"

correct. but...

"This is Econ 101, folks..."

i dunno about that one. they never mentioned this:

"...businesses that are square in the middle of the Media-Congressional Complex's crosshairs..."

more like "socialism/nationalism c-21."

jtc

Brian Dale said...

Cool beans, Tam. You've laid it out very clearly. Now instead of explaining this over and over to people, we can just link to this blog entry.

Thanks.

Wolfwood said...

I hadn't thought about the .380/9mm dies, but that actually seems to make the most sense. I have trouble believing that even we internet commandos are buying cases of .380 for our P-3AT or LCP. 100 rounds of WWB and a pack of Hydra-Shoks goes an awfully long way with something that I only fire about four mags' worth every few months.

However, I'm pretty guilty of buying packs and packs of WWB in 9mm and .45 whenever I chance upon it, plus being the guy who buys all the remaining 7.62x39 at the gun shows.

I'm also going to guess that folks who make caliber conversions are doing about as brisk business as they can handle. I already got a 9mm barrel for my Glock 33 and had to talk myself out of getting the hated .40 barrel simply because stores always have the ammo in stock.

Weer'd Beard said...

Did you coin "Media-Congressional Complex"?

If so, it's a winner!

alath said...

Tam,

Very well reasoned and written, but you are doing a grave disservice to the gun owning community.

Your explanation provides very little fodder for conspiracy-minded gun forumites and bloggers.

Worse, your "like all wierd epochs, this too shall pass" explanation does not help to sustain panic buying. Without panic buying, the jabbering guy behind the table at the gun show is going to have to tigten his belt.

Please take this down immediately. Jabbering gun show guys and conspiracy-minded gun forum members are the heart and soul of the shooting community, and you are threatening their very existence.

Blackwing1 said...

If you don't mind, I'd like to pose a question...what's the best way to store ammo for intermediate periods? I'm thinking on the order of 5 to 10 years.

My assumption is that keeping it dry (duh) is the first and primary concern. I've got a bunch of surplus .50-cal ammo cans with good rubber seals; they're essentially water-tight.

But is it better for it to be cool, sometimes verging on freezing, or warm, verging on really frickin' hot? Kind of like the difference between basement and attic? I couldn't find much on reliability in sub-zero temperatures, but there's a fair amount of data out there on high-temperatures (over 150F) significantly affecting function.

Right now we're using our old supply of S&B .45 ball from 1997, which I got for something like $6.99 a box of 50 (less than half the price now). I do a first-in, first-out inventory control on the ammo, and always try to burn up the oldest stuff first. It's always gone "bang" for me.

I'm just wondering how long stuff stored from 10 years ago will still be as reliable as it was when new.

Tam said...

I'd definitely pick the basement over the attic, but even the attic should be okay as long as it doesn't get obscenely hot.

Given that and dry storage, ten-y.o. ammo should be as reliable as brand new.

Remember, there's plenty of WWII surplus still being shot off every day.

theirritablearchitect said...

"Remember, there's plenty of WWII surplus still being shot off every day."If I recall correctly, Col. Cooper did some testing, not only on some vintage .45ACP that predated WWII, but did it in a 1911 that had sat for decades, in condition 1, and it all still worked.

BTW, the conditions present for lasting storage of ComBloc stuff is usually quite a bit more important than the fodder we load in the western world. I'm seeing lots of the surplus stuff surfacing from eastern Europe, supposedly loaded during the 70's and 80's. I'd not trust these lots to be N/C primed. I keep mine in the basement; a constant 65 degrees, and 55% RH, if not sealed up in the original tins.

Just a thought.

Dr. StrangeGun said...

Storage:

1 - not wet
2 - not hot
3 - not oily

== nobody knows yet how long ammo is good for.

I have a couple of pre-WWI military issue .45acp rounds, that were stored somewhere completely filthy, but apparently dry and cool. Even after a short trip through the tumbler, you won't catch me loading one in my Witness Compact and pointing it at anything important.

Ammo storage is all about chemistry.

Anonymous said...

Mrs. Tam:

Could you please contact me at your earliest convenience, regarding having this entry published?

aar@uscca.us

Thanks!

Noah D said...

As ever, thanks for the wisdom and clear head.

It's tough for me to get away from the whole 'conspiracy' mindset, having watched the US firearms law change over the last two decades, and studied (casually) still more. Some days, it sure seems like a conspiracy would be the most reasonable explanation for the ammo shortage, but I've had to train myself to take a reflexive 'wait a minute...' moment whenever the 'Conspiracy!' sentiment raises its head. That pause has been right every time.

(Also, see Bernard Goldberg's 'Bias'. No conspiracy necessary...)

Side note about ammo storage. While .45 ACP from WW2 still works fine, a word of warning - I used up a magazine of Speer Gold Dot that had ridden on my hip for about *cough*sixmonths*cough*. Two failures to fire out of eight. Right next to the human body is not a good short-term storage spot.

Robert said...

The more guns and ammo in the hands of the populace, the better.

Going to be interesting to see Commercial Row at Camp Perry this year. usually, there are deals. We'll see.

randy said...

Never attribute to conspiracy that which can be explained by stupidity and greed

taylor said...

"π*r²"

Pie are not square, Pie are round.

Philistine with your square pies....
[/geekery]

No seriously though, I really think that prices will be lower by this summer. If the economy really is as bad as people are saying (truth be told Im not seeing it on a personal level or in the lives of anyone I know), then Tam is right about people choosing between buying a full case of Lake City .308 or paying their mortgage will realize that the Obamatron is not going to save them and will probably pay for the house.

Dont forget that the same applies to guns. In fact, I expect slightly lower prices (act of congress not-withstanding) as the economy 'recovers' and people realize that the Blastomatic 3000 they bought can be sold for sweet cash and they REALLY want that new jet-ski. Its not like they ever shot the thing.

Ride Fast said...

[...] Die Time [...]

Jayson said...

Everyone forgets that if the .gov is stupid enough to outlaw ammo/guns with draconian laws, then it's probably time to use said items. Otherwise, why DO you have all that ammo?

just saying.

Anonymous said...

One thing you mised. :) Military purchases.. No, not just ramping up Lake City, but Foriegn Military Sales (FMS) to other countries. FMS dollars have to be spent in the US (for the most part). Last year, Iraq prchased about 12 million bucks worth of ONE style of match grade ammo. I don't have visibility on other purchases, but that has to be taking capacity down for domestic ammo production.

And yes, folks are buying ammo in case lots when they find it. Our local Wal-Marts are getting ammo in, but it's flat disappearing as soon as it hits the shelves.

Al T.

Phelps said...

Re: storing ammo. If you have surplus ammo cans, you are halfway there. Buy some commercial desiccant packs like these:

http://www.dillonprecision.com/content/p/9/pid/25254/catid/19/Desi_Pak_2_ounce_bag

Toss one in each can, seal it up. Scrub off the original markings, and write what is in the can on top with white marker, and put in behind a locking door for the next 50 years.

If you open the can, it will be a good idea to put in a new desiccant pack. If you don't open it, don't worry about it.

Gewehr98 said...

"For fifteen years I tried to convince Joe and Jane Public to buy ammo by the case. I failed miserably."That's because while you were exhorting ammo purchases by the case lot, the rest of us were buying reloading presses, whoring range brass, and badgering the local tire stores for wheelweights, skipping the whole retail ammo and excise tax thing. (Although Mike Dillon's kids should have their doctorate's degrees by now...)

Mrs. G-98 won't let me walk through the ammo shelves in the sporting goods section of WalMart anymore - I laugh too loud. $30.00 per 50 rounds of .45 ACP when I can make it for $5.00?

Oh.

My.

Gawd.

Blackwing1 said...

Tam:

Thanks for the reply, ma'am. Most of the ammo storage is in the root cellar on shelves next to the wine and the homebrew. It doesn't get much below about 40F in there, and never above 80F. The humidity cycles between zero in winter, and ridiculously-high in summer. The attic is WAY too hot in the summer.

Phelps: I tape a label to the back of each can (so I can see it when racked on the shelves) labeling caliber, type, make, quantity and date bought. That way I can be sure to use the oldest first. I don't bother with desiccant, since the only time I open them is to start using 'em, but thanks for the tip.

FatWhiteMan said...

Great article. I posted this over at the OFCC Forums.

http://ohioccwforums.org/viewtopic.php?f=10&t=30655

José Giganté said...

RE: Die Time .380 ammo shortage. While credit due to the "die time" scenario, you must remember that every manufacturer, their brother and a couple cousins introduced a .380 pistol in the past 18 months. Those little bastards are hot commodities right now, though that may be slowing with $1/round costs on the ammo, IF you can find it.

RE: Production capacity How about foreign manufacturers, especially those from countries where labor is cheap and environmental regs are lax? Could they be the wild card?

RE: Supply & Demand, I'd clarify that Supply is the same or higher, but demand has so outstripped the supply as to make it look miniscule, such that the Wal-Marts of the world appear to not be able to get any ammo.

Overload in Colorado said...

Assuming the bubble ends on Dec 31, how long would it take to get all stores up to pre-bubble (normal) levels?

the pawnbroker said...

mrs. tam:

re contacting aar@uscca.us

be sure and check with mr. tam first. ;o)

jtc

Rabbit said...

The ammo my local small gunshop can get from Mexico is good quality, but the price fluctuations are such that he doesn't bother with it any more.

What may be $6. per unit one month may be $14 for the same unit the next month, then back to $7 the month after that. Hence, he seldom orders it anymore.

Regards,
Rabbit.

Tam said...

G98,

"That's because while you were exhorting ammo purchases by the case lot, the rest of us were buying reloading presses..."

Are you kidding me? Ammo by the case was an EASY sale compared to reloading presses. I tell you true, I maybe sold fifty or one hundred presses of all varieties in all my 15 years behind the counter. Reloaders are much rarer than people who buy by the case lot, but both are minuscule compared to the larger population of "Average gun owners".

Why would they reload or buy in bulk when they only shoot 500 rounds of centerfire in a year?

Anonymous said...

Long term storage of non sealed ammo:

Get some large desiccant packs (some companies that specialize in overseas or crate shipping have them very cheap).

Buy some large PVC pipe (4" or larger dia). Cut to a convenient length that's easy for storage.

Buy caps for both ends of PVC tube, glue one in place with PVC glue and let dry.

Drop desiccant bag into tube, fill with ammo. Put other cap on tube and seal with wax or silicon around rim of cap where it meets the pipe (but make it so you can scrape it off or remove it later so you don't have to cut the pipe open).

Store pipe in cool dry place for the next 50 years, oh and don't forget to write on the outside of the pipe qty and caliber.

Done.

Anonymous said...

Fancy, but too much trouble. Just use surplus ammo cans with good seals.

Insurance value in ammo cans is that when the JBTs con your wife into "checking" your basement they'll only find a gun nut who hoarded lots of ammo, and not a rigthwing extremist wacko homegrown terrorist with a basement full of pipe bombs and IEDs.

Just a thought.

Ed Foster said...

Folks, watch the dessicant. Factory ammo is loaded at 30% humidity to keep the primer cake from crumbling. Too dry isn't all that good either.

Primarily, keep it at something resembling constant temperature. My cellar, down low and a few inches from the wall, stays close to 55-58 degrees all year long. No condensation that way, and everything is in .50 cal G.I. ammo cans.

I also had a lesson in what old ammo can do a few years ago. Eric Timrud, Gary Petersen and I were doing some 800 meter shooting on the abandoned railroad track in North Granby.

Sadly, the track was ripped up a while back, and the embankment turned into a yuppie bike path. Sic Semper something or other. Anyway, we counted off 100 rail sections and set up our targets.

That's 10 meters each, not 10 yards, as the rail was supplied by Krupp in exchange for half the railroad right-of-way. To this day you'll find more German names on one side of the tracks in the lower midwest, and mostly British names on the opposite side. Cute factoid.

Okay, I settles down with the scope sighted Schmidt-Rubin 1911, and proceeds to put twelve shots into six and three quarter inches at half a mile. Yes, I was feeling rather smug.

Eric had found a bunch of old 7mm Mauser, headstamped Remington 1900 and UMC 1902, and tried them out in his immaculate 1895 Chilean. Some went bang. Some waited a few seconds and went bang, some hissed or did nothing at all. The ones that fired split their necks and shoulders.

Undaunted, the Nookschottishe Norske pulled all the long 175 grain roundnoses, dumped the funny looking doughnut shaped powder granules, popped out the more or less dead primers, and annealed the case necks and shoulders by oiling them and holding them in a pot of molten lead 5 or 6 seconds each, then dropping them into cold water.

Reloaded with a factory equivalent charge of 4895 and fresh primers, the bugger settled down into prone with sling and proceeded to turn in multiple groups almost as good as my Schimdt-Rubin (8 to 9 inches typical). At half a mile. With the issue iron sights.

Read an amazing book called Rags of Glory by a South African named Cloejte to understand what it was like to be a British soldier facing Boers armed with that same rifle and ammunition.

Old ammo can suprise you, even stuff that has passed it's practical life expectancy.

During World War One, Paul von Lettow-Vorbecke manufactured fresh powder and primers in the middle of the African veldt, then used it to rejuvenate Mauser rifle ammo that had been salvaged from sunken German ships. An amazing general, and evidently a pretty fair chemical engineer.

And for those who don't reload, start!

The Lyman 30 caliber 173 grain Loverin bullet, cast hard (linotype) over 22 grains of 4895, shoots point of aim at 100 yards in my Schmidt-Rubins, with inch groups out of the 1911 rifle and 2 inches from the 1911 carbine and K31. With 3 more grains of powder it will do the same in a 30-06, all with M-1 carbine noise and recoil, at less than a dime a shot.

Dave said...

Shot half a box of Federal LWSCHP that was at least fifteen years old, stored in a garage in New Orleans (hot, humid) that went through Katrina (unflooded), but mold and more humidity came a'calling.

Every round went bang.

Anonymous said...

What I'd like to know is how much ammo the public has stockpiled in the last few yrars. It's got to be Billions of rds.

Marc said...

I had some .45 ACP that I bought in the early '70s that was stored indoors at room temp in a cabinet. It was Remington silvertip as I remember. The whole box went boom with no problem.

I had also hand loaded an odd lot back then. They all worked as designed too. All of my current Ammo is new or reloaded since 2000. I trust it. I still buy factory for personal defense...Fresh Ammo never hurts.

If you are willing to buy on-line, Sportsman's Guide gets frequent deliverys in of a lot of calibers. Some of it is getting pretty old and some will be Corrosive. Others are new or reloaded on once fired cases. They tell you. Large round lots come in Ammo cans, and I add the small desiccant bag just to be sure.

I bought up a lot of Ammo in the late '90s, so I am fixed for a while.

Cottage Industry: A band of hand loaders with Dillon's and Lee's (and others) loaders joining up and processing all of that fired brass and selling into a hungry market. Well, in these times it is an Idea. My old gun dealer reloaded and supplied me with many a box of .357 Mag

the pawnbroker said...

ed foster: good story, but...

"...the track was ripped up a while back, and the embankment turned into a yuppie bike path."

"I settles down with the scope sighted Schmidt-Rubin 1911, and proceeds to put twelve shots into six and three quarter inches at half a mile."

uh, just to be clear, exactly what were those 6 3/4" targets? :o)

jtc

Ross said...

"Joe and Jane Sofaspud are going to realize that they really don't need 10,000 rounds of Winchester .45 in the basement, and that minivan payment isn't getting any smaller. They'll sell it to Annie Appleseed and Ivan Ipsc and demand will cool down."

Brilliant observation, Tam. Mind if I cross-post it over to appleseedinfo.org?

Ross

Tam said...

"Mind if I cross-post it over to appleseedinfo.org?"

Feel free. :)

atlharp said...

Well......

I did manage to garner two boxes of Winchester .380 at Wally World today. I would dare to say not many people in the country are gonna be able to do that.

Gewehr98 said...

Tam,

Depends on the shooter and their ammo needs, I'd wager. Well, that, and the disposable income in their pockets.

The group I hung with in my formative years were all IPSC/IHMSA/High Power shooters, ripping through ammo faster than Paris Hilton's thong collection, and they were almost to a tee reloaders, or scored their ammo from somebody who did. The IPSC guys were running Dillon 650s at a minimum, if not the bigger 1050s. I settled on a 650 myself, and it got quite the workout before weekend matches.

If you're a hunter shooting one or two boxes/year for sight-in and thumping Bambi, you're probably ok with $1.00/round .30-06 from WallyWorld.

I talked to Dillon's human resources department a few weeks ago, and am trying to talk my wife into moving to Arizona, to better capitalize on their increase in business. They're swamped, and I'd wager Lee/RCBS/Redding/Hornady aren't hurting for business, either.

Tam said...

G98,

"I talked to Dillon's human resources department a few weeks ago, and am trying to talk my wife into moving to Arizona, to better capitalize on their increase in business. They're swamped, and I'd wager Lee/RCBS/Redding/Hornady aren't hurting for business, either."

No doubt!

There's an ammo use hierarchy at work here: Gun Owner < Shooter < High Volume Shooter/Casual Competitor < Serious Competitor/GunGeek. Each of those categories has grown steadily in the last decade-and-a-half.

Thank you for a swell post idea! :)

Anonymous said...

I have to agree with the above anonymous commenter seeking to find out how much ammo has been socked away by Americans. I date all this ammo hoarding for "whatever reason" back to the first year of the Clinton Administration.

In a way, have we right-wing gun nuts been stocking up ammo awaiting the JBTs for _seventeen years?!_ That must be an enormous amount of ammo. Billions upon billions of rounds, just waiting.

The amount, which could only be an approximation, would be fascinating to know. Any thoughts?

Anonymous said...

About 10 billion rounds are sold annually in the US, and 20-30 billion sold worldwide, according to government statistics on the Web (most likely the DOJ Bureau of Justice Statistics).

That's 170 billion rounds sold since 1992 in the US. How many of them are shot off each year? That is something I do not think anyone keeps records of. Anyone here sign off on how much ammo they pump down range? Didn't think so.

Still, that's an enormous number. And that's only on a '92-'09 domestic timeframe.

Anonymous said...

We can blame the ammo shortage to Mexico and their gun laws:

"Even though Article 10 of the Mexican Constitution declares the right to bear arms, it is currently illegal in Mexico for any civilian to own a fire arm of any caliber used, tested, or currently in use by the Mexican Government or Military.

This limits a citizen to legally own a .22 to .380 caliber rifle or similar firearm without a full-automatic firing system.

Ownership of any centerfire caliber designed for automatic or military rifles is forbidden."

So the largest caliber Mexican citizens can only own is .380 and they are buying up the bulk.