Why Is There an Ammo Supply Shortage?
If you’ve tried to purchase ammo lately, you’ve probably noticed a lot of products are out of stock. Right now all calibers and types are in short supply. The biggest pain felt is probably in the realm of 9mm, 308 and 223 caliber ammo. Manufacturers have increased their production on these calibers. As manufacturers make tooling changes to their production lines to meet the volume requirements of the most popular calibers, production of the less popular calibers is naturally decreased. There is only so much capacity. Every increase somewhere results in a decrease somewhere else. This has created an ammunition shortage that makes the few shortages over the past 20 years seem like nothing. It’s also limiting the production of many popular types of ammunition. This can be frustrating for shooters and hunters looking to keep their edge on the range, and can be concerning for preppers, survivalists, and others who are concerned about their safety.
Unfortunately, we do not see things getting much better this year. Read on as the experts from AmmoFast delve deeper into the ammo shortage…
A Massive Increase in Demand for Ammunition
Like any other product in a market economy, ammo is subject to the whims of supply and demand. As far as demand is concerned, a perfect storm of factors has caused a run on the ammo market like we’ve never quite seen before. A mix of the Covid-19 pandemic, civil unrest, an anti-2nd Amendment administration and Senate has caused demand to skyrocket even further than we saw in most of 2020.
We have an extremely large number of new gun owners who have entered the market. The NSSF estimates that first-time gun owners has increased over 8 million people over the past several months. Nearly 40 million people purchased guns in 2020. That is a 71% increase over 2019. Even if those 40 million new gun owners only purchased 50 rounds of ammunition for their new firearm that is an additional demand of 2 billion rounds of ammo. That doesn’t take into account those who simply chose to stock up. The demand is staggering.
Hoarding
When there is an ammunition shortage the first thing people normally point to is consumer hoarding. We believe this is having an impact on availability, but probably not to the extreme that many think. There are definitely some profiteers who buy ammo and then sell them on auction sites or other multi-list sites. This is why many online retailers have now chosen to limit the purchase quantities to an extremely low level in an effort to reduce the reselling at outrageous prices. We want everyone to have access to ammo at a reasonable price.
Disruptions in the Ammo Supply Chain
Demand, however, is just one part of the story. Disruptions in the supply chain have also made a big impact on the availability of ammunition.
In the U.S., there are only five major manufacturers of ammunition (Winchester, Remington, Hornady, Federal, and CCI). Even under perfect circumstances, there’s only so much they can produce at once, and needless to say, circumstances have not been perfect during the pandemic. Employees throughout the supply chain have been getting sick, missing work to take care of their kids, and self-quarantining. This has caused a lull in manufacturing throughout 2020.
After the 2016 run on ammunition, we seen many small manufacturers close their doors due to the slim demand for ammunition in 2017, 2018 and 2019. This created even tighter supply constraints and inherently created the environment for a perfect storm.
The Remington bankruptcy has had a large impact on the shortage of ammo. With Remington in a state of financial insolvency for the past two years, suppliers were demanding payment upon delivery for products. Remington simply did not have the financial capabilities to have an abundance of raw materials on hand and had to shutter some of their production capacity. With the recent purchase of Remington by Vista, there is a good chance that Remington ammunition production will have a tremendous impact on supplies going forward. However, the disruption of the last two years took at least one year’s worth of ammunition production out of the market from one of the biggest manufacturers in the United States. The hope would be that Vista will place extreme emphasis on getting the Remington production capacity increased substantially and quickly. There is no doubt that they will as this is their best bet to return some of the extensive amount of capital they had to make with the purchase. I would imagine that there was a lack of preventative maintenance at the Remington facility over the past two years due to financial problems. This could create a huge problem for Vista getting the production up quickly. The process of creating ammo is more complex than it may seem. With this rapid ramp-up in production, there will be a large draw on raw materials causing a temporary spike in raw material costs across the board on all manufacturers. I would look for ammunition prices to continue to increase for at least the first half of 2021.
In previous years we’ve seen a huge influx of foreign ammunition during times when the market was tight. We are not seeing that this time as many foreign manufacturers are producing at between 50% and 70% of capacity due to the COVID-19 impacts on individuals. We are extremely hopeful that the vaccines being delivered will improve worker’s health worldwide. However, with the new virus strain, we are hearing of huge numbers of worker absentees in foreign facilities, only further reducing their production.
What Should You Do?
The new administration has openly stated their intent regarding the 2nd Amendment and how to limit or even eliminate the ability for consumers to purchase anything related to firearms. We have seen American companies openly attack firearm-related businesses through litigation, IRS targeting, pressuring banking institutions to stop processing transactions, pressuring shipping companies to stop transportation and targeting Conservative institutions and ideals. If you see anything come out as a stated initiative in the next 60 days we would anticipate you will see prices skyrocket even more than they have at this time. There are some big questions out there right now.
Q.) Should I have stockpiled ammunition in 2019?
A.) Absolutely! Hindsight is 2020 (no pun intended).
Q.) Ammunition is really high right now. Should I purchase more ammunition or should I wait for the prices to go down?
A. ) Ammunition is like the stock market. It’s nearly a commodity at this point. Your guess is as good as ours on whether it is going to go up or down. We can tell you that manufacturers have already announced price increases for April 2021. Typically when manufacturers increase their prices they do not go back down. But right now demand continues to outweigh supply. As long as that happens you’ll continue to see increasing ammunition prices.
Q.) How long will the ammo shortage last?
A.) Remington ammunition should start hitting the market soon. We think that should help supply. However, we are still unsure of the impact Covid will have on worldwide production of ammunition……..
As an individual, as of right now, there’s little you can do in the face of the ammunition shortage. Keep checking your trusted online distributor AmmoFast for new arrivals of all types of ammunition from all manufacturers. Sign up for notifications so that when we receive something you get a notification directly to your email. Be ready to react quickly. Once product comes available it sells out quickly, many times within minutes.
We have created some very stringent limitations on the purchase of ammunition in an effort to help as many people as possible work through this tough time. Normally, we would say “stock up.” But that time has passed, and we would encourage everyone to learn from this. Stock up in times of plentiful supply so that you are not affected as greatly during these times of extreme shortage.
In the meantime, we would encourage everyone to pray for our country and our leaders as we navigate this perilous situation. We would also encourage you to register to vote and make your voice heard in 2022 by voting for pro 2nd Amendment candidates.