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Ammo shortages.. why is that?
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gelandangan
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PostPosted: Wed Mar 19, 2014 7:48 pm    Post subject: Ammo shortages.. why is that? Reply with quote

With all these shortages, you would have thought the manufacturers are raking it in.
Shortage for a few months made sense, but this shortage of over a few years seems to be really strange.

Would not it be prudent for the manufacturers to invest on more machinery and increase productions?
The fact that the population could not get enough stock means that there are huge demand,
and thus huge demands means prosperity to the manufacturer.
After all, the more they sell the more they earn and earning is what the reason they exist in the first place.
So why haven't they do that? Are they not part of the capitalistic society?

Can anyone shed some light on this?
Confused

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Vince
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PostPosted: Wed Mar 19, 2014 8:53 pm    Post subject: Re: Ammo shortages.. why is that? Reply with quote

I think they maybe shy of investing in this current economic climate mate. If they invest now, the short term effect on their bottom line will be good, but the long term effect is not necessarily so rosie. Also, I can't see the US Govt approving a bail out for the firearms industry if things go belly up.

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DallanC
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PostPosted: Wed Mar 19, 2014 9:12 pm    Post subject: Re: Ammo shortages.. why is that? Reply with quote

gelandangan wrote:
Would not it be prudent for the manufacturers to invest on more machinery and increase productions?
The fact that the population could not get enough stock means that there are huge demand, and thus huge demands means prosperity to the manufacturer.
After all, the more they sell the more they earn and earning is what the reason they exist in the first place.
So why haven't they do that? Are they not part of the capitalistic society?

Can anyone shed some light on this?
Confused

Oh they are. Remington for example is building a brand new $30 million site just to produce ammunition. It is expected to go online this spring.

www.thetruthaboutguns....expansion/

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gelandangan
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PostPosted: Thu Mar 20, 2014 1:33 am    Post subject: Re: Ammo shortages.. why is that? Reply with quote

I wonder what about CCI, Federal and a plethora of other 22 manufacturer..
Here in Oz the price of 22 LR is about $6 to $8 / box on retail down to about $3.50 to $4 at bulk buy of 5000 rounds.
We have no shortages, maybe because of the price.
But then again beside Winchester that have factory here, every other are imported and CCI is the most used for target shooting at club level.
So there is still question on supply within USA.

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SingleShotLover
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PostPosted: Thu Mar 20, 2014 4:49 am    Post subject: Re: Ammo shortages.. why is that? Reply with quote

With all of the revelations of mass purchasing by the U.S. government (hundreds of thousand of rounds of sniper ammo for Homeland Security as well as incredibly massive amounts listed as for "practice") I would imagine that the manufacturers are committed to servicing their government contracts first and that leaves little for the consumer. Not big on conspiracy theories, but I guess that would be one way to keep ammo out of the reach of us undesirables.

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Azar
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PostPosted: Thu Mar 20, 2014 8:39 am    Post subject: Re: Ammo shortages.. why is that? Reply with quote

This surge in firearms, ammo, and components sales is not knew. It happens regularly with the election of a president that is believed to have an anti-gun agenda. It happened with Clinton too. However, in the past the boom has been relatively short lived. Attempting to add very expensive machinery to increase production capacity and then have the market stabilize halfway through the upgrades could spell financial disaster for a company.

My understanding is that initially the firearms industry failed to predict the longevity of this boom. They didn't want to ramp up production, add new lines, etc if the market was going to fall out beneath them in a few months. This boom has shown no signs of diminishing quickly like in the past and they've now begun to spend money to upgrade / increase capacity.

That's the story as I've heard it anyway.
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gelandangan
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PostPosted: Thu Mar 20, 2014 1:22 pm    Post subject: Re: Ammo shortages.. why is that? Reply with quote

Hmm still not convinced.

If you are a sniper, where your job rely on the accuracy of your projectile/rounds, I presume you would specifically use a certain brand/make of the market, even for training.
Here we have a blanket shortage, so govt sniper use stocking is not likely possible.

Election of president? well he is in his second term now.
Surely the stocking up would be done by now??

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Loke
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PostPosted: Thu Mar 20, 2014 2:26 pm    Post subject: Re: Ammo shortages.. why is that? Reply with quote

SingleShotLover wrote:
With all of the revelations of mass purchasing by the U.S. government (hundreds of thousand of rounds of sniper ammo for Homeland Security as well as incredibly massive amounts listed as for "practice") I would imagine that the manufacturers are committed to servicing their government contracts first and that leaves little for the consumer. Not big on conspiracy theories, but I guess that would be one way to keep ammo out of the reach of us undesirables.
of all the conspiracy theories, this one is my favorite. 100,000 thousand rounds causing a shortage? and most commercial ammo manufactures are producing millions of rounds a day? That would be maybe an extra hours worth of work. I'm not buying that one, either. The "incredible amounts for practice" is a 1.6 billion round contract to be delivered over the next 6 to 10 years. That is maybe 20 million rounds a year to supply ALL of the agencies that fall under the banner of "Homeland Security". To name but a few, there is the CBP, FBI, CIA, Coast Guard, ICE, DEA, US Marshals Service, IRS, and many, many more. These agents are now required to qualify with what they carry on duty, and most need to qualify twice a year.
My second favorite is the one that claims that artillery guns use the same gunpowder as the 22 LR. And now that we are pulling out of Afghanistan and Iraq there is suddenly a shortage. Makes perfect sense to me.
The ammo shortage has come about simply because more people are buying more ammo than the manufacturers can produce. Many producers quit making the less popular rounds to focus on the 223/5.56 and 9mm. And now that there is a shortage of the other calibers, everyone is wanting to hoard them as well. And so the dominoes fall.
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Azar
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PostPosted: Thu Mar 20, 2014 3:06 pm    Post subject: Re: Ammo shortages.. why is that? Reply with quote

An anti-gun president in his second term is more dangerous than when he is in his first term. He has no possiblilty for re-election and can more aggresively push a potentially unpopular agenda.

One undisputed fact is that firearms purchases are seeing record numbers. And it's not just previous firearms owners purchasing new firearms but first time firearms owners buying them up as well.

Those new shooters want ammo for their guns and the "shortage" is self-perpetuating. People hear there is a shortage, so they end up purchasing more than they would normally, which keeps things in short supply.

The bottom will fall out eventually. Some hoarders will be holding a lifetime supply of ammo and the scalpers trying to take advantge of the ammo scare will be left holding a lot of ammo that they can no longer sell.

I don't believe this is the new normal, but it may be the status quo until 2016...
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Pumpkinslinger
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PostPosted: Thu Mar 20, 2014 3:28 pm    Post subject: Re: Ammo shortages.. why is that? Reply with quote

I talk to people all the time who are buying any and all .22 rimfire ammo they can find and hoard it. Some try to sell it at greatly inflated prices. One guy told me that he'd paid $19/500 and offered them to me for $35... I guess eventually they'll feel they have enough and let the rest of us buy some.

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Ominivision1
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PostPosted: Fri Mar 21, 2014 12:10 pm    Post subject: Re: Ammo shortages.. why is that? Reply with quote

Good point Azar.

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gelandangan
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PostPosted: Fri Mar 21, 2014 1:43 pm    Post subject: Re: Ammo shortages.. why is that? Reply with quote

Azar made good point, but still the topic does not made sense, at least economically.
Any company with products in such short supply would literally bust their guts to try to fulfil the market while it is hot.

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Loke
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PostPosted: Fri Mar 21, 2014 3:33 pm    Post subject: Re: Ammo shortages.. why is that? Reply with quote

gelandangan wrote:
Azar made good point, but still the topic does not made sense, at least economically.
Any company with products in such short supply would literally bust their guts to try to fulfil the market while it is hot.
Does it make sense to invest millions of dollars in equipment to load rimfire ammo if you think it may be sitting idle in a month or two? They were already operating at 100% capacity before the crisis. They can't go any faster. Then we had a record firearms sales year, and 30% of those guns went to new shooters. More shooters= greater demand.
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Vince
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PostPosted: Fri Mar 21, 2014 4:17 pm    Post subject: Re: Ammo shortages.. why is that? Reply with quote

I gotta agree with Loke...it wouldn't make good business sense to invest untold money in new equipment to increase production when there are no guarantees of a continuing high sales market.

Adar is also correct...in the short term the high sales market is there, but for how long. Hoarders and scalpers are the bulk of the problem...they are keeping ammo in short supply. Hopefully, at least in the case of the scalpers, they will be left holding the bag. Did I mention I don't like scalpers.

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PaulS
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PostPosted: Sun Mar 23, 2014 4:47 pm    Post subject: Re: Ammo shortages.. why is that? Reply with quote

Well, I spoke with Speer and Sierra and they are both purchasing more bullet making equipment to keep up with demand.The cartridge makers are doing the same thing. The only ones that I have not gotten any feedback from are the powder manufacturers. That and from the distributors that say they sell out as fast as they get shipments in - I hear less about panic buying and a lot more about new consumers and loaders.

Until the powder makers get up to the same speed as the other component makers we reloaders are in for a crunch.

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