22 ammo shortage ease up yet?

[MJY65]

........ and how much is going into people's basements?

A lot, would be my guess.

It seems pretty common to read about someone who sees ammo, "doesn't need it" but bought it because it was there. Heck, there was a guy on another forum talking about having over 100,000 rounds stocked up. He was in his 70s, but planning to leave it for his grandchildren.

[BigBlue]

For the sake of argument, let's look at the numbers.

If we assume that Winchester and Remington are producing at the same rate as Federal, that's around 12 million rounds shipped per day. If we assume that CCI is slightly lower (~3 million), then that's 15 million rounds per day. Let's say that all of the plants are operating 7 days per week with a total of 4 weeks down per year for maintenance. That would make a total market footprint (not including imports) of over 5 billion rounds per year.

How much of that is being shot, how much is being re-sold at a huge markup, and how much is going into people's basements?

Given the nature of purchasing .22LR, 5B rounds a year really isn't that much. Comes down to about 550 bulk packs per state per day. I'm guessing most states have at least a 100 or so retailers, so that means 5 or fewer bulk packs per store per day. The way they are still being snatched up by people that supply goes pretty fast.

I would think that after a while people would start to realize their cache is big enough though. I can't believe there are THAT many people out there that want to be sitting on $500+ of .22LR in their safe and still considering buying more.

It's obvious that places who have the price set at 10 cents or higher per round can keep it on the shelf, so there is a max threshold people are willing to spend. Maybe if manufacturers raised their prices so all retailers were selling at that high price the supply would regulate itself. I'm surprised that hasn't happened yet, because a supplier facing the situation "I can sell all I can make as quick as I can make it for $xx.xx and still there is demand" would seem likely to raise prices on their own from greed.

BB

[BC98]

For the sake of argument, let's look at the numbers.

If we assume that Winchester and Remington are producing at the same rate as Federal, that's around 12 million rounds shipped per day. If we assume that CCI is slightly lower (~3 million), then that's 15 million rounds per day. Let's say that all of the plants are operating 7 days per week with a total of 4 weeks down per year for maintenance. That would make a total market footprint (not including imports) of over 5 billion rounds per year.

How much of that is being shot, how much is being re-sold at a huge markup, and how much is going into people's basements?

Given the nature of purchasing .22LR, 5B rounds a year really isn't that much. Comes down to about 550 bulk packs per state per day. I'm guessing most states have at least a 100 or so retailers, so that means 5 or fewer bulk packs per store per day. The way they are still being snatched up by people that supply goes pretty fast.

I would think that after a while people would start to realize their cache is big enough though. I can't believe there are THAT many people out there that want to be sitting on $500+ of .22LR in their safe and still considering buying more.

It's obvious that places who have the price set at 10 cents or higher per round can keep it on the shelf, so there is a max threshold people are willing to spend. Maybe if manufacturers raised their prices so all retailers were selling at that high price the supply would regulate itself. I'm surprised that hasn't happened yet, because a supplier facing the situation "I can sell all I can make as quick as I can make it for $xx.xx and still there is demand" would seem likely to raise prices on their own from greed.

BB

But, again, my estimates are likely very conservative and, thus, low. Not all of those 100 retailers will get bulk packs, plus the big ammo companies typically won't have that many retailers in a state (i.e. big regional distributors or large chains) so oftentimes, the small retailers are going to be at the mercy of their distributors.

Manufacturers raising their prices won't work to ease demand unless all of them agree to it (price fixing). If they don't, the market will just slide to the least expensive option. Either the end retailer or the distributors are the ones who should really be raising prices. And raising prices if people will pay it is not greed, it's simple economics. If the market will bear price X, then why should it be sold cheaper?

[plink]

Manufacturers raising their prices won't work to ease demand unless all of them agree to it (price fixing). If they don't, the market will just slide to the least expensive option. Either the end retailer or the distributors are the ones who should really be raising prices. And raising prices if people will pay it is not greed, it's simple economics. If the market will bear price X, then why should it be sold cheaper?

Since in the long run it will hurt them. .22's are a gateway drug to the rest of the industry. Get kids hooked (kids of all ages) and they'll move on to everything else one day. Make .22s from unobtanium, introduce fewer new shooters, gun lobby looses ground to grabbers, nerf dart gun replaces the AR as America's rifle. Just not a good way to be.

[2in2out]

But, BC98 is right. Walmart doesn't care about whether customers get hooked on shooting, they want to make a profit. Their goal is to sell stuff people want at the highest possible price and while paying the lowest possible cost. If they can sell out of 550 packs of .22LR when the price is $23, then they're selling them too cheaply.

So is everybody else, regardless of whether they care about introducing new shooters to the sport or not. This may not seem logical to some, but it's one of the few things I remember from the Econ classes I mostly slept through.

Don't forget that there's a whole side of this nobody has talked about yet - For FFL's selling new guns, the shortage is actually worse than it is for the ammo-centric retailers. They're trying to sell guns that are difficult to find ammo for, and forced to incentivize the sale by offering ammo for free or at a discount when someone buys a gun. So, rather than making more money, they're stuck making less money because ammo retailers won't budge on their price.

If the price goes up, supply will increase and profit margins on the sale of ammo also goes up. In addition, sales of new guns will be more profitable because the ammo will be available.

I also liked JJ's explanation of why the manufacturers can just turn around and meet demand.

[linksep]

CDNN Sports has been advertising various Remington .22LR at $0.10/round for months... one month it's bricks of Goldens, next month it's Thunderbolts in cases of 500 (ten 50-packs) or 5,000, every few months they're advertising Bucket-O-Bullets... It may not be your brand, but it's .22LR...

Still I think high, but I am more than happy to let all those hoarders stock up on Remington rimfire.

(Too) high? Yes. BUT it is available from a tax paying overhead cost having retailer that was around before the shortage and will be around after the shortage... If I'm desperate I will pay "too much" to a real retailer with employees and rent and insurance costs before I pay "regular" price to a lowlife unemployment check collecting hoarder/opportunist that is part of the root cause of the shortage in the first place. They can sit on their 200K rounds of .22lr. The only way I'm paying a non-business "gouger" is if I'm sure they're taking a financial loss as punishment for being part of the problem.

[Bearcatrp]

The only way I'm paying a non-business "gouger" is if I'm sure they're taking a financial loss as punishment for being part of the problem.

+1 here. nothing more to say!

[photogpat]

As far as hooking kids on shooting - .22LR is donated to 4H and Scouts from several of the manufacturers -- and discounted pricing beyond the donations on additional ammo and supplies.

[hornswaggle]

I understand the whole Econ 101 refreshers on supply and demand that a lot of people give but there must have been an Econ 102 class called "How Hoarding and Profiteering Under A Politically Unfriendly Govern Affects Natural Supply and Demand". Or maybe that was in the catalog for business majors rather than economics. Just because it's not illegal to hoard for the sake of reselling at extremely high prices (gouging) creating it's own artificial supply and demand (want vs need) doesn't mean I have to respect them, applaud their efforts and wave the flag of free enterprise. Instead, I will choose to conserve my use of that ammo and gladly pay a higher than pre-shortage price (now normal) for what I need at a retail store long before I will ever patronize a hoarder/gouger. And when I am at a local GS and spot a few boxes on the shelf with a limit of one box per customer I will thank them for making at least an effort to control the problem.

[my1stpistol]

The only way I'm paying a non-business "gouger" is if I'm sure they're taking a financial loss as punishment for being part of the problem.

+1 here. nothing more to say!

+2
I'll pay .10 a round to any retailer. Its still cheap in the grand scheme

[BigBlue]

I'll pay .10 a round to any retailer. Its still cheap in the grand scheme

Still, with .223 at 23 cents a round, it is hard to understand why .22 would cost 10 cents a round. Sure, the process is different, but for the .223 you have to make the primer separately and the case and bullet are WAY more massive.

Does the rest of the world use as much .22 as USA does? Or is this rimfire sort of an American oddity?

BB

[20mm]

From a manufacturing standpoint, making huge increases in production is a difficult undertaking. 22 lines are expensive. Not just the loading lines, all the associated equipment to make components. Much of the equipment used is old, and not available for purchase, there is no plug and play equipment, each machine needs a huge amount of retro-fitting. Each new piece of equipment requires engineering to build tooling, which often cannot be done until the machinery is installed and in running condition.

This is ********, pure and simple. Manufacturing a .22 long round is fairly simplistic compared to lets say a Tesla Model 3 electric car. When exactly does it make sense for a manufacturer to invest in increasing rim fire production capacity in your wonderful view of things? 50 years from now?

How big of an investment would they have to make in MODERN machinery to recoup their losses and make a profit in today's market? If you ask me, it's an oligopolists market that will never change until more competitors enter it, and less ATK's (Vista Outdoor) exist in the world.

"Vista Outdoor was the top seller of ammunition in the United States from 2008 to 2013. As of March 2015, it controlled about 40% of the ammunition market."

[JJ]

[photogpat]

I'll pay .10 a round to any retailer. Its still cheap in the grand scheme

Still, with .223 at 23 cents a round, it is hard to understand why .22 would cost 10 cents a round. Sure, the process is different, but for the .223 you have to make the primer separately and the case and bullet are WAY more massive.

Does the rest of the world use as much .22 as USA does? Or is this rimfire sort of an American oddity?

BB

You paying .10 a round isn't the same as it costing .10 a round. By the time you touch it, its changed hands 3 times.

.223 can be made on high speed automated loaders, .22lr still has a higher percentage of manual labor associated with it.

Yes the .223 has a separate primer, but, again, when you can automate a portion of the process, its more efficient.

[Erud]

Manufacturing a .22 long round is fairly simplistic compared to lets say a Tesla Model 3 electric car.

Yeah, but billions of dollars in taxpayer-funded federal subsidies helps take the sting out of Tesla's manufacturing infrastructure costs.