On the .22 crisis, a question…

drought

Over at the Adaptive Curmudgeon there’s a discussion about hoarding and its effect on .22 price and availability. The Mudge, like many people, assumes the shortage is caused by hoarding but I’m not sure I buy it. I looked for a video clip I can’t find in which a PR flack for an ammo manufacturer assures us they’re cranking out .22 just as fast as they ever have but those evil hoarders are snatching it all up so stay calm, citizens. I wanted to post that vid here, because it sounded for all the world like one of those pressers where a government stooge tries to tell you something you know damn well is a lie. It just had that tone.

I have no alternate theory. I just don’t buy that hoarding explains the shortage away.

Evidence for hoarding: Wal-mart gets a shipment of .22 and within seconds the poor innocent schlub assigned to the sporting goods department is trampled to death by rampaging hoards of hoarders.

Evidence against hoarding #1: The same thing happens in spite of the “one box per customer” sign, because Wal-mart’s “shipment” apparently consisted of about 500 rounds.

Evidence against hoarding #2: I hang with some seriously demented gun nuts, who do indeed hoard ammo of every sort. They’re all out of .22, too. So where are all these hoarders? Logically, I should know at least one. Or at least I should know of one.

No, I don’t believe the lame conspiracy theory about the government buying all up. Forty cal, maybe. .22? I doubt it. But I really don’t buy the ‘hoarding’ theory, either. That would have neatly explained a shortage that went on maybe six months. This one has lasted so long I’m not sure my Granddatter has ever personally seen a round of .22.

Somebody tell me how I’m wrong.

About Joel

You shouldn't ask these questions of a paranoid recluse, you know.
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25 Responses to On the .22 crisis, a question…

  1. I don’t think the answer is any one thing. Probably many things are contributing to the problem. I’m a shameless “hoarder.” I used to use a lot of .22lr for my classes, so bought up several cases years ago when it was cheap. Have not bought any since.

    I still have most of it. I sincerely hope I’ll still have most of it when the price drops to 2 or 4 cents a round again. 🙂 But if it doesn’t, I’ve got “precious metals” in the bank here. Works for me either way. I suspect a lot of people have done that and just don’t say anything about it.

  2. Joat says:

    How many new shooters are there from the last few years of Obama firearm scares? How many new .22 rifles and pistols have been sold in the past few years vs. old .22’s that broke and got thrown away? Sure there is horading, and also people buying .22 for retail and reselling it for $60+ a brick. But I bet most of the ammo that is being made is getting shot and there just isn’t enough manufacturing capacity to keep up.

  3. Doubletrouble says:

    A friend of mine is in the business, & he basically agrees w/Joat. Lots of new shooters, hoarders hoarding (*ahem, cough*), & largely, in his opinion, profiteers who somehow have an inside track for procurement.
    I’ll leave the expansion of that angle of conspiracy to conjecture.

  4. If “profiteers” were truly that prevalent, the problem would not be availability, only price. They have to sell it in order to profit.

  5. GoneWithTheWind says:

    There is always a cause for a market distortion. If this were short term, a month or three then zealous buyng/hoarding could explain it. But the geelful response from any company whose product is flying off the shelves should be to produce more. And if the increased production fails to meet demands the excessively gleeful business owners would produce a LOT more. And if this condition persisted for over a year then new businesses would sprout up to meet the demand. I believe this shortage of ammo in now in it’s third or fourth year. That is impossible without some explanable reason. The fact that there is no “explanation” leads me to believe something happened behind the scenes and it is a closely held secret. Perhaps the government is limiting new competition with bureaucracy or limiting existing manufacturers in the same way. A nefarious thumb on the scale of democracy and capitalism when it comes to guns and ammo. I think that is the answer.

  6. You are close in your last sentence or two, GWTW… Have you looked closely at what it would cost, in money and otherwise, to set up an ammunition factory under present bueaucratic conditions? Try putting together a viable plan to finance and set up any kind of business today, let alone one that involves something a lot of folks and most government entities love to hate.

    Gun dealers and manufacturers often can’t even get banking service, and I suspect loans are both expensive and hard to get. Insurance? I would imagine that’s out of sight too. If the potential for sales was the most relevant issue, you can bet there would be a lot more produced, but there is just so much more involved. Availability of components is probably a major roadblock as well.

    It isn’t that there is “no explanation.” There are a large number of concurrent explanations and factors. None of them are satisfactory, of course.

  7. anonymous says:

    Its probably a mixture like what was stated above. Some putting back, but like the blog owner stated, its been TOO LONG for that to still be going on. I’m pretty sure the ammo manufacturers have noted just how much we are willing to pay for a box of .22s and the new norm will likely not be where it was before.

    Just like cost of automotive gasoline pre Katrina – always going to be an excuse the price is what it is, sub $2 a gallon price will never happen again.

  8. Howard says:

    Has any one considered the new EPA regs on lead. I have the impression that lead is no longer refined in the US. Supply of bullets may be slowing expansion of .22 production. Just a thought.

  9. Anon says:

    Rimfire is not very profitable, especially compared to centerfire, it takes maybe 10-20 years for an assembly line to pay for itself, at 75% capacity you don’t make a profit due to overhead costs like support personnel and building maintenance. A centerfire pistol assembly line will cost about the same to install and pay for itself in 2-4 years.

    Since this demand is seen as temporary they aren’t about to invest in more capacity for rimfire that will go unused once demand dries up.

  10. Joat says:

    The existing manufactures didn’t have much in the way of extra capacity pre the Obama fueled buying spree they were running 3 shifts on the lines they did have, now they are running weekends also. As for adding new capicity, ever watch a video on rimfire production? The number of steps all requiring of specialized machines that it takes, I’m not surprised there isn’t much in the way of new capacity yet. I bet it could take an existing manufacture who has factory space for the equipment as much as a year to spool up a new rimfire line. Add to that time to get the BATFU permit, and finding or building a new manufacturing space and doing the R&D to figure out how to make the new line work right, it’s really not surprising that we aren’t seeing any new .22 manufacturers yet. Ever watch a video on rimfire production? The number of steps all requiring of specilized machines that it takes, I’m not susprized there isn’t much in the way of new capicity

  11. Joat says:

    I should proof read before I hit post

  12. Kyle Miller says:

    In most of Montana, you can buy 500 round bricks for $50 or less pretty regularly, usually for better grade ammo. It is around, just pricey. I know some retailers that have kept their shelf prices below $20 a brick and limited quantities to one brick per person. Right place, right time. Just got a flyer from Midway with decent prices but limited quantities. $20.99 for 500 CCI blazer.22lr. Didn’t check the shipping.

  13. I think one detail is being looked over as well. Seeing how most of the components are the same or similar, the demand for the higher calibers(govt contract etc) places a precedent on that line over a low profit product. The materials are then not as available when the first run ends so they have to adjust accordingly.
    Not 100% certain, but I seem to recall that these contracts were written for delivery over several years and they take precedence over commercial sales.
    And yes, I hoarded around 2000 rounds of .22 when I could still buy a box of 550 for $20. Glad I did or squirel season would be a no-go this year. (I agree with Joel though, hoarding does not account for alone. Many factirs involved )

  14. jon spencer says:

    Part of the reason might be that the people who used to keep a box or two at home are now trying to keep a brick or two and those that tried to keep a brick or two are now trying to have a case or two. Those that used to keep a case or two are load testing their floors now.
    If the demand is going up ten fold, with demand slowing over time and the production is going up maybe 5 fold it is going to take awhile before things catch up.

  15. Buck. says:

    I’d cool my jets about the conspiracies behind the scenes. It’s all pretty much out in the open and it has been hit upon in several posts as I see it.
    Government regulations that make founding a new production line for just about anything a lengthier than needed process.
    Liability that exceeds reasonable.
    No more domestic smelting.(Oh yeah, that makes buckets of sense for a country that has been on a war footing for ….. forever)
    Restrictions on powder manufacture. There are almost no domestic producers anymore and I think half of those are devoted to military contracts.
    Extra unnecessary scrutiny, security and caution with powder imports at the ports of entry.
    Low profit margin.
    Sudden influx of buying that could end and required market analysis to discover if it’s a viable market force or just a short term trend.
    The cost of set up.
    Any idea what the scrutiny on an environmental impact study for an ammo plant looks like? I don’t either, but I’ll bet it’s easier to get a dildo factory going.
    Yes, there are still hoarders out there. A veritable army of them. Go to any large gun oriented site on the interwebs and you’ll find those three or four devoted dickheads who are driving around with 10k rounds of ammo they bought because they haunted the Chinese embassy and were there on the day the deliveries arrive and are kicking back to the clerks and floor managers. The clerks and floor managers who aren’t already working a scheme of their own and I can name three of them off the top of my head.
    I have lots of giggles at all the hand wringing. I bought cartons of .22lr years ago when a 5000 case was still sub $150 and before it was an issue. Sometimes it pays off to be the paranoid survivalist.

  16. Joel says:

    All of this may be true. It doesn’t explain the most salient fact (as far as I’m concerned): Of the two places where a person can buy ammo in the little town nearest where I live, NOT ONE HAS HAD A SINGLE ROUND OF .22 FOR SALE IN OVER A YEAR. They simply don’t receive it. One manager claims he doesn’t even order it anymore.

  17. Skippy says:

    The shortage is a real perception, but not fully understood. There is only a shortage where you expect to find cheap plinking ammo, and over that we have absolutely no control until the demand cools.

    Hoarders, flippers, and speculators have run their course. Sometimes the market takes years to correct itself.

    If you expect to find .22 LR at Wally late in the day or on a weekend, you will go home empty handed. I refuse to stand in line at any store waiting for an ammo shipment.

    I have found 75K rounds of .22 LR this year at brick and mortar sporting goods stores (not gun shops) at “normal” prices, and on-line at normal prices (with additional shipping/handling/insurance costs). I quit driving all over town in search of .22 LR last year when the price of shipping was less than the cost of gasoline burned in the search for ammo.

    My average cost per round is about $.08, which includes a mix of cheap Remmy/Win/Fed at about $.05 per round, and more expensive CCI, Norma USA, Wolf Match, SK, RWS Geco, and Aquila which range between $.08-$.22 per round.

    On the bright side, the higher priced ammo delivers superior accuracy over the cheap stuff in my target rifles.

    This shortage also caused me to shoot for accuracy instead of plinking, as I had never been introduced to high quality .22 LR ammo by my shooting buddies.

    This ammo bubble is very rare in the economic market; It came about at the same time that raw materials demanded record prices, anti-gun politicians called for more gun control and AMMUNITION LIMITS, and real inflation was far higher than Government estimates.

    When the bubble bursts, demand will fall, but prices will never recover to $.02-$.04 per round.

    The manufacturers, distributors, and retailers will remember we were willing to pay $34.99 this year for a 500 round brick of cheap ammo at retail that only eight years ago cost $9.99.

    The scalpers/flippers/speculators are an anomaly and I doubt they did much damage to the market overall, because many of us tried to beat the scalpers at their own game once we figured out what they were up to.

    We are living in a new normal.

    It is what it is.

  18. PJ says:

    “Of the two places where a person can buy ammo in the little town nearest where I live, NOT ONE HAS HAD A SINGLE ROUND OF .22 FOR SALE IN OVER A YEAR.”

    When the market is as hot as it is, the little retailers are going to be squeezed out first. That’s just life in the free market (such as it is). Anyway how much are those retailers offering to pay wholesale? Maybe it’s just easier dealing with Walmart.

    1) Shooters are buying more because of Obama.
    2) There are more shooters now to buy ammo, as liberals come on board (because of bad signs in the economy and because gun control is failing). The first or second gun everyone gets is a .22.
    3) Production lines are allocated to centerfire.
    4) Government is buying more too, which due to #3 affects rimfire.
    5) Government makes expansion difficult – bureaucrats hate guns.
    6) Factories are reluctant to add more capacity because they will be stuck when an R gets elected president, even assuming they could get the permits.
    7) Lots of people are out of work, making labor available for 3 shifts-per-day production. This is the most efficient way to utilize your plant.

    What I’d like to see are the sales figures of Walmart, over the years. Not the little retailers.

  19. Mr Galt says:

    If you drive over the border to Canada and pop into any sporting goods store, you’ll find plenty of .22LR at “regular” prices. It all comes from the U.S. and Canooks shoot plenty of the stuff, so I would conclude the U.S. shortage is due mostly to market forces (i.e., hording).

    I also know Canadians that used to come to the States to purchase and smuggle ammo back home to get better prices (not talking about .22LR). They don’t bother much any more, because the prices are higher in the U.S. now than in Canada. BTW, Canada isn’t especially known for its “lax” regulatory environment. So I think it’s demand, demand, demand.

  20. tamslick says:

    PJ’s essentially got it.

    If every new gun buyer post Sandy Hook bought a single 50-round box of .22, BTW, it would eat up an entire year’s production. (And there’s very little incentive for manufacturers to ramp up rimfire production. That bulk stuff you bought at the MartMart? It was veering close to being a loss-leader for RemChester. It’s part of the reason you’re seeing more cross-promotion on the packaging.)

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  22. I wonder how much the lack of ramping up is also factored by certain states suddenly becoming… hostile business environments? If you’re relocating your “expansion” to Alabama and TN instead of staying in good old NY, and finding ways to gracefully exit a state for maximum tax gains and minimum business impact, it’s not the time to start breaking ground for more of the least profitable business line.

  23. M J R says:

    What shortage? Sure it is a little more expensive but that is inflation for ya.

    Winchester .22 Wildcat 500 round brick $23.07

    http://www.lebaron.ca/pdf_files_fall12/f2014specials_wintrgt.pdf

    Remington .22 “Bucket O’ Bullets” 1400 rounds $61.94

    http://www.lebaron.ca/pdf_files_fall12/rem_rimfire_ammo.pdf

    Remington .22 Thunderbolt a 500 round brick $24.95

    Remington Subsonic .22 LR Hollow Point 100 Round Box $7.95

    http://www.wolverinesupplies.com/details/11597/Remington-Subsonic-22-LR-Hollow-Point-100-Round-Box.aspx

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To the stake with the heretic!