A t houghtful ammo shortage explanation

[VMI77]

http://weaponsman.com/?p=9126

Sample:

So how bad is the ammo situation? A few of us are looking at buying into an ammo company. But our concern is: what happens when the market finally does equilibrate and start clearing normally? Prices will probably be sticky initially, but a lot of ammo makers will be grinding out commodity ammo, and if demand slackens they’ll be unable to resist cutting prices to sustain sales and production.

In our opinion, that must happen at some time for centerfire ammunition. The ammo producers are making more and more of it, and shooters aren’t necessarily shooting more. In fact, they seem to be shooting less, as they stockpile against the proverbial rainy day, and a supply of replacement ammo is not assured. Before 2012, most shooters operated on a near-just-in-time basis: they maintained a small operational “float” of ammo at home, but they replaced fired training and proficiency ammo as they went. Now, nobody feels secure doing that. Where you might have been comfortable with 1000 or even 500 rounds at home in case of a week’s interruption of supply, we’ve now seen eight months of unreliable supply at retail.

[chasfm11]

The ammo market has already absorbed more of those dollars than anyone could have predicted. So we know the end of the shortage is coming, we just don’t know when.

I don't think so. The thread on Biden's comments about Legislators paying a price for killing gun control is probably all that was needed to send 1,000s, perhaps 10,000 back to the stores scouring them every last round. Just when I think that the hype on gun control has died down, one of those ignorant loafs opens their mouth in front of a microphone again and more panic buying sets it.

As long as the trumpets continue to sound for gun control, there isn't going to be ammo on the shelves. Saturation is billions of rounds away. I thought that I was pretty well stocked but the length of this shortage has shown me the error of my thinking. I'm expecting that I have 10s of millions of kindred spirits. I've heard 8 more months for recovery. I'm thinking we'll be lucky if it isn't 8 more years.

[rotor]

Don't forget that there have also been a bunch of new gun owners too. I was in Academy yesterday and they had a good supply of guns back on the shelves but very little handgun ammo and much rifle and shotgun ammo. No 22 ammo. The measure of supply though is reloading supplies. When powder and primers are available ( and they have become better ) than the present crisis is over. But I stll see no Varget on the mass market. But getting better (for now). I still think that there will be a lot of hoarding for a long time to come.

[K.Mooneyham]

Don't forget that there have also been a bunch of new gun owners too. I was in Academy yesterday and they had a good supply of guns back on the shelves but very little handgun ammo and much rifle and shotgun ammo. No 22 ammo. The measure of supply though is reloading supplies. When powder and primers are available ( and they have become better ) than the present crisis is over. But I stll see no Varget on the mass market. But getting better (for now). I still think that there will be a lot of hoarding for a long time to come.

Sorry, not just hoarding, though that is part of it. Make no mistake that the "ammo crews" are still at it, too. One crew member working sites like "Gunbroker" while the rest of the crew is out at every available location each morning, buying as much as they can get their hands on, so they can turn around and resell it at 2-3 times the price they paid for it. Technically not illegal in the least, but it sure doesn't help the situation get any better, either. I understand phrases like "market signals" and concepts like figuring out what the market will bear pricewise. But when folks go into the outlets after work, or on the weekend, and they see bare or nearly bare shelves, they think that THEY should be buying everything they can get their hands on because their isn't any ammo coming onto the retail market. And so it goes on and on. If folks could SEE some ammo still on the shelves at 5 pm, they might slow down on the panic buying and it might start to get back to "normal".

[Jumping Frog]

Sorry, not just hoarding, though that is part of it. Make no mistake that the "ammo crews" are still at it, too. One crew member working sites like "Gunbroker" while the rest of the crew is out at every available location each morning, buying as much as they can get their hands on, so they can turn around and resell it at 2-3 times the price they paid for it. Technically not illegal in the least, but it sure doesn't help the situation get any better,

I disagree because the price mechanism is the very essence of why a free market is more effective than socialism, government control, cartels, or other means to distort the market.

People facilitating market clearing by purchasing supplies at a lower price and selling elsewhere at a higher price reduces market friction, makes the market more efficient, and will more quickly return the market to equilibrium than any other approach. It is allocating market supply to the segment of the market where buyers place the highest value on the goods.

Market arbitrage, whether we are talking ammo, oil, gold, or widgets always helps the market and thus the public that depends upon free and efficient markets.

[K.Mooneyham]

Sorry, not just hoarding, though that is part of it. Make no mistake that the "ammo crews" are still at it, too. One crew member working sites like "Gunbroker" while the rest of the crew is out at every available location each morning, buying as much as they can get their hands on, so they can turn around and resell it at 2-3 times the price they paid for it. Technically not illegal in the least, but it sure doesn't help the situation get any better,

I disagree because the price mechanism is the very essence of why a free market is more effective than socialism, government control, cartels, or other means to distort the market.

People facilitating market clearing by purchasing supplies at a lower price and selling elsewhere at a higher price reduces market friction, makes the market more efficient, and will more quickly return the market to equilibrium than any other approach. It is allocating market supply to the segment of the market where buyers place the highest value on the goods.

Market arbitrage, whether we are talking ammo, oil, gold, or widgets always helps the market and thus the public that depends upon free and efficient markets.

Like I said, I understand how that is supposed to work. But this has another element to it, a socio-political element. That skews the way it is supposed to work. Folks that don't have or take the time to research things like we do don't see the shortage as just market forces at work. They see sinister forces at work, and considering the current way things are running, its hard to blame them, even if they are misguided. So, when they can't SEE the ammo coming back into the system, despite the factories churning it out at higher rates, they think something else is going on and the cycle just keeps rolling. These little media stories covering "we aren't done with pushing gun control" by __________ (fill in the blank with some politician's name) reinforce the anxiety. I would agree with you if not for the political portion of this thing.

[chasfm11]

Like I said, I understand how that is supposed to work. But this has another element to it, a socio-political element. That skews the way it is supposed to work. Folks that don't have or take the time to research things like we do don't see the shortage as just market forces at work. They see sinister forces at work, and considering the current way things are running, its hard to blame them, even if they are misguided. So, when they can't SEE the ammo coming back into the system, despite the factories churning it out at higher rates, they think something else is going on and the cycle just keeps rolling. These little media stories covering "we aren't done with pushing gun control" by __________ (fill in the blank with some politician's name) reinforce the anxiety. I would agree with you if not for the political portion of this thing.

To add to your point, I see some parallel between the constant proposed gun control threat and what happened during prohibition. There was a lot of saloon busting but the demand for alcohol continued in spite of vigorous enforcement attempts. I'm not suggesting that there is or will be some sort of illicit bullet manufacturing but that people are often driven by something which is being outlawed.

I could only wish that all of those who are buying ammo would vote with the same fear. It would solve a lot of problems.

[Cedar Park Dad]

Ammo auction prices on grunbroker continue to fall. I've been tracking .22LR sales there on Federal and Remington bricks (single bricks and bulk sales).
Since March Federal Bulk (more than two bricks in the auction bid) has fallen from $95 per brick to $47 per brick as of yesterday. iI've only started tracking Remington Golden Bullets in June (because I couldn't find enough federal sales to reliably keep it going) they have fallen $7 in the period.


I'd disagree on the "arbitrage"benefitting the market, when the arbitragers are a major force behind the scarcity, but I don't feel like debating economic merits here.

[txglock21]

Like I said, I understand how that is supposed to work. But this has another element to it, a socio-political element. That skews the way it is supposed to work. Folks that don't have or take the time to research things like we do don't see the shortage as just market forces at work. They see sinister forces at work, and considering the current way things are running, its hard to blame them, even if they are misguided. So, when they can't SEE the ammo coming back into the system, despite the factories churning it out at higher rates, they think something else is going on and the cycle just keeps rolling. These little media stories covering "we aren't done with pushing gun control" by __________ (fill in the blank with some politician's name) reinforce the anxiety. I would agree with you if not for the political portion of this thing.

To add to your point, I see some parallel between the constant proposed gun control threat and what happened during prohibition. There was a lot of saloon busting but the demand for alcohol continued in spite of vigorous enforcement attempts. I'm not suggesting that there is or will be some sort of illicit bullet manufacturing but that people are often driven by something which is being outlawed.

I could only wish that all of those who are buying ammo would vote with the same fear. It would solve a lot of problems.

Especially the last statement! Well said.

[Jumping Frog]

Like I said, I understand how that is supposed to work. But this has another element to it, a socio-political element. That skews the way it is supposed to work. .... I would agree with you if not for the political portion of this thing.

I am reminded of Churchill's quote regarding democracy: "It has been said that democracy is the worst form of government except all the others that have been tried."

Free markets are the worst form of economic exchange except for all the others than have been tried.

Even removing secondary markets does nothing to improve the "socio-political element" you refer to. Bottom line is all markets go through market cycles, boom and bust. This one is being created, exacerbated, and prolonged by government actions, not by individual human beings selling on gunbroker.

[VMI77]

Sorry, not just hoarding, though that is part of it. Make no mistake that the "ammo crews" are still at it, too. One crew member working sites like "Gunbroker" while the rest of the crew is out at every available location each morning, buying as much as they can get their hands on, so they can turn around and resell it at 2-3 times the price they paid for it. Technically not illegal in the least, but it sure doesn't help the situation get any better,

I disagree because the price mechanism is the very essence of why a free market is more effective than socialism, government control, cartels, or other means to distort the market.

People facilitating market clearing by purchasing supplies at a lower price and selling elsewhere at a higher price reduces market friction, makes the market more efficient, and will more quickly return the market to equilibrium than any other approach. It is allocating market supply to the segment of the market where buyers place the highest value on the goods.

Market arbitrage, whether we are talking ammo, oil, gold, or widgets always helps the market and thus the public that depends upon free and efficient markets.

Exactly. These stores selling ammo at pre-shortage prices and rationing it are preventing the market from clearing. I'm buying only at pre-shortage or close to pre-shortage prices, as I'm sure are many others, since, for instance at Academy, I see no shortage of .308 at $50 a box of 20, but the $20 boxes don't last very long. If they'd let the market work, shelves would fill at $50 a box as many people would stop buying, and once supply at these prices exceeded demand, the prices would come back down again. In fact, since the manufacturers have geared up their production, there might be over production and over-supply, even driving prices down beyond pre-shortage prices.

[VMI77]

So, when they can't SEE the ammo coming back into the system, despite the factories churning it out at higher rates, they think something else is going on and the cycle just keeps rolling. These little media stories covering "we aren't done with pushing gun control" by __________ (fill in the blank with some politician's name) reinforce the anxiety. I would agree with you if not for the political portion of this thing.

While that's true, it would be irrelevant at high enough price levels because those people would be priced out of the market, regardless of their concerns. Since most people have limited incomes, there's only so much stocking up you can do if 5.56 is selling at $50 or $100 a box of 20.