The .22 Ammo Shortage Mystery -- Solved!
By Rich Smith | More Articles
August 31, 2014 | Comments (105)
Wait? You mean this is all the ammo I get?! Photo: Wikimedia Commons.
Earlier this year, CBS News spotlighted a growing shortage of .22-caliber ammunition. "One of the most popular and common" -- and cheapest -- calibers of ammo for hunters and target shooters alike, CBS reports that .22 shells are in short supply these days. Interviewing one supplier, CBS reported that while as recently as two years ago it was still possible to buy .22-caliber ammunition "by the pallet-load... now they're putting restrictions on how much you can get and how you get that ammo."
Retailers are shooting blanks
This is a problem from ammunition retailers -- and for gun owners as well. Statistically speaking, 24%-45% of Americans own guns either for self-defense or sporting purposes. But getting the ammo to load into those guns is becoming a bit of a trick.
Over the past five years, .22 ammo is said to have more than tripled in price. Historically, .22 ammo was obtainable for about $0.05 a round. And yes, some retailers are still advertising it for that price. Dicks Sporting Goods Inc (NYSE: DKS ) , for example, has two varieties of .22LR advertised for sale at roughly $0.05 per shell. But Wal-Mart Stores, (NYSE: WMT ) -- long the go-to spot for impulse purchases of ammo -- instituted a policy early last year limiting customers to buying no more than three boxes of ammo per person, per day. So getting in on Dick's deal may not be as easy as it sounds ....
Just $24.99 for a block of 525? It's a bargain! Source: Dick's Sporting Goods..
Meanwhile, online, bargain-basement website gun-deals.com shows that the more usual price for 22 ammo today is $0.08 a round -- or even $0.10, $0.11, or $0.12! For that matter, even the $0.12-a-round price may be an illusion. Popular online guns 'n' ammo website AIM Surplus advertises four varieties of .22LR rifle ammunition for sale at the $0.12 price point, for example -- and is all sold out.
Who's to blame?
Similar stories can be heard from owners of guns of all shapes and sizes -- not just .22s. To cite just one example, after skyrocketing in price through the end of 2013, Brown Bear 7.62x39mm rifle rounds (standard for an AK-47) are now entirely unavailable on AIM Surplus. All you can get today is cheap Russian Wolf-brand ammo ... that costs a staggering $230 for a box of 1000 rounds.
Why is this?
National Shooting Sports Foundation, or NSSF, public affairs director Mike Bazinet notes that "there are a lot of wild stories" about the ammunition shortage, with some people even blaming the U.S. government for "buying up all the ammo." But according to Bazinet, that's simply not the case. In fact, "government purchases have gone down over last three years."
He may be right. Earlier this year, the National Rifle Association, or NRA, helped to debunk the "government conspiracy" thesis for America's .22 ammo shortage. Laying out the facts and figures in a multi-page spread in American Rifleman, the "official journal of the NRA," the NRA described how:
The dollar value of ammunition sales in America doubled between 2007 and 2012. Highlighting the obvious, the NRA noted that sales really "started to climb fast as gun sales began surging" in the run-up to the 2008 Presidential election.
ATK (NYSE: ATK ) subsidiary Federal Cartridge Company attributes ammo shortages to "high demand for our products," and said flat out that the biggest increases in ammunition purchases are coming from "the civilian market." (This means you).
Olin Corp's (NYSE: OLN ) Winchester Ammunition agrees it is "that experiencing an extremely high demand."
And privately held Freedom Group, which manufactures Remington cartridges, says "it's clear to us that any lack of supply in the marketplace has been from consumer demand."
And then there was the interview with privately held Hornady Manufacturing. There, President Steve Hornady explained to the NRA, "People walk into the store, they don't see as much as they want so they take everything they can get. The next guy who comes in can't get anything, so he panics."
Panic and prudent price-comparison habits rarely go hand-in-hand, of course. This naturally results in higher prices for ammunition.
Time for some good news
Now that we know the origin of the .22 ammo shortage, it's time for some good news. Recent earnings reports at both Smith & Wesson (NASDAQ: SWHC ) and Sturm, Ruger (NYSE: RGR ) show a marked deceleration in demand for guns, with sales falling nearly 5% year over year at S&W, and down more than 14% at Ruger.
Earlier this year, Cabela's (NYSE: CAB ) CEO Thomas Millner noted that he's seen a "significant deceleration in ammunition sales" at his stores. And website thecabin.net goes so far as to say the ammunition shortage "may be ending," as manufacturers crank up production, wholesalers restock, and supplies begin filtering down to the retail level. With any luck, this will eventually result in fully stocked shelves at gun stores, assuaging consumers' panic-fueled urge to hoard ammunition -- and putting the .22 ammo shortage to bed once and for all.
Or ... well ... at least until the next Presidential election.
By Rich Smith | More Articles
August 31, 2014 | Comments (105)
Wait? You mean this is all the ammo I get?! Photo: Wikimedia Commons.
Earlier this year, CBS News spotlighted a growing shortage of .22-caliber ammunition. "One of the most popular and common" -- and cheapest -- calibers of ammo for hunters and target shooters alike, CBS reports that .22 shells are in short supply these days. Interviewing one supplier, CBS reported that while as recently as two years ago it was still possible to buy .22-caliber ammunition "by the pallet-load... now they're putting restrictions on how much you can get and how you get that ammo."
Retailers are shooting blanks
This is a problem from ammunition retailers -- and for gun owners as well. Statistically speaking, 24%-45% of Americans own guns either for self-defense or sporting purposes. But getting the ammo to load into those guns is becoming a bit of a trick.
Over the past five years, .22 ammo is said to have more than tripled in price. Historically, .22 ammo was obtainable for about $0.05 a round. And yes, some retailers are still advertising it for that price. Dicks Sporting Goods Inc (NYSE: DKS ) , for example, has two varieties of .22LR advertised for sale at roughly $0.05 per shell. But Wal-Mart Stores, (NYSE: WMT ) -- long the go-to spot for impulse purchases of ammo -- instituted a policy early last year limiting customers to buying no more than three boxes of ammo per person, per day. So getting in on Dick's deal may not be as easy as it sounds ....
Just $24.99 for a block of 525? It's a bargain! Source: Dick's Sporting Goods..
Meanwhile, online, bargain-basement website gun-deals.com shows that the more usual price for 22 ammo today is $0.08 a round -- or even $0.10, $0.11, or $0.12! For that matter, even the $0.12-a-round price may be an illusion. Popular online guns 'n' ammo website AIM Surplus advertises four varieties of .22LR rifle ammunition for sale at the $0.12 price point, for example -- and is all sold out.
Who's to blame?
Similar stories can be heard from owners of guns of all shapes and sizes -- not just .22s. To cite just one example, after skyrocketing in price through the end of 2013, Brown Bear 7.62x39mm rifle rounds (standard for an AK-47) are now entirely unavailable on AIM Surplus. All you can get today is cheap Russian Wolf-brand ammo ... that costs a staggering $230 for a box of 1000 rounds.
Why is this?
National Shooting Sports Foundation, or NSSF, public affairs director Mike Bazinet notes that "there are a lot of wild stories" about the ammunition shortage, with some people even blaming the U.S. government for "buying up all the ammo." But according to Bazinet, that's simply not the case. In fact, "government purchases have gone down over last three years."
He may be right. Earlier this year, the National Rifle Association, or NRA, helped to debunk the "government conspiracy" thesis for America's .22 ammo shortage. Laying out the facts and figures in a multi-page spread in American Rifleman, the "official journal of the NRA," the NRA described how:
The dollar value of ammunition sales in America doubled between 2007 and 2012. Highlighting the obvious, the NRA noted that sales really "started to climb fast as gun sales began surging" in the run-up to the 2008 Presidential election.
ATK (NYSE: ATK ) subsidiary Federal Cartridge Company attributes ammo shortages to "high demand for our products," and said flat out that the biggest increases in ammunition purchases are coming from "the civilian market." (This means you).
Olin Corp's (NYSE: OLN ) Winchester Ammunition agrees it is "that experiencing an extremely high demand."
And privately held Freedom Group, which manufactures Remington cartridges, says "it's clear to us that any lack of supply in the marketplace has been from consumer demand."
And then there was the interview with privately held Hornady Manufacturing. There, President Steve Hornady explained to the NRA, "People walk into the store, they don't see as much as they want so they take everything they can get. The next guy who comes in can't get anything, so he panics."
Panic and prudent price-comparison habits rarely go hand-in-hand, of course. This naturally results in higher prices for ammunition.
Time for some good news
Now that we know the origin of the .22 ammo shortage, it's time for some good news. Recent earnings reports at both Smith & Wesson (NASDAQ: SWHC ) and Sturm, Ruger (NYSE: RGR ) show a marked deceleration in demand for guns, with sales falling nearly 5% year over year at S&W, and down more than 14% at Ruger.
Earlier this year, Cabela's (NYSE: CAB ) CEO Thomas Millner noted that he's seen a "significant deceleration in ammunition sales" at his stores. And website thecabin.net goes so far as to say the ammunition shortage "may be ending," as manufacturers crank up production, wholesalers restock, and supplies begin filtering down to the retail level. With any luck, this will eventually result in fully stocked shelves at gun stores, assuaging consumers' panic-fueled urge to hoard ammunition -- and putting the .22 ammo shortage to bed once and for all.
Or ... well ... at least until the next Presidential election.
