• If you enjoy the forum please consider supporting it by signing up for a NES Membership  The benefits pay for the membership many times over.

The ammo shortage. A well thought out plan!

alan226

NES Member
Rating - 100%
10   0   0
Joined
Nov 28, 2013
Messages
1,224
Likes
1,376
Location
Mass Northshore
I think the problem here is you really don't understand how deep the hole is. At last count, by some estimation there are 6.5 million new gun owners in the US. Each of them gets a 9mm, 380, or 38 spl.... If each of them bought 6 boxes of ammo, that's 2 Billion.... BILLION rounds of ammo alone required to meet that demand. And that doesn't even include the demands from existing shooters, or other calibers. Given the stress on the market it's way been better than i thought it would be at this point.
Here's something to consider. I don't know how much an of an affect it has in the end, but DHS within the last 6 months swapped over all their .40 cal pistols to 9mm. Over 50.000 pistols and ammo. The contract has to be for well over a billion rounds of 9mm. And that contract has to be fulfilled before anything else...

Just a thought...
 
Rating - 0%
0   0   0
Joined
Mar 8, 2010
Messages
278
Likes
16
Location
South Shore
Do you know what capital expenditures are? Do you know it costs millions of dollars to upscale an ammo plant, acquire and train new staff, etc.... ? I guess not. Nobody is going to dump millions for an ammo drought that will likely be mostly done with next year sometime..... that's not smart money.

I do know what capital expenditures are and I understand the costs involved but by the same token billions have been invested in the last year to produce everything from ventilators to PPEs and now sub zero freezers to fight something that we will essentially be done with in the "relatively" near future as well. The washing machine company now making ventilators might possibly be due to the Defense Production Act but it will still be a huge financial windfall for the company. I would think that the premise of striking while the iron is hot would apply to any products in great demand if even for the short term. "This" ammo shortage may be over soon but it's a scenario that keeps repeating itself. I will admit I'd never given much thought to actual numbers like if all new gun owners bought just a couple boxes of 9mm how many rounds that might be but it certainly tells me we shoot a lot.
 

KBCraig

NES Member
Rating - 0%
0   0   0
Joined
Dec 29, 2009
Messages
13,050
Likes
9,362
Location
Granite State of Mind
I'm not sure I follow my friend. I haven't worked in manufacturing but I would think that CCI or Winchester would invest in manufacturing so that they would have product to put on the shelves when the competition didn't. These temporary shortages of primers and ammo in general seem to be occurring more frequently and with shorter periods of time between events so sometimes it seems that the shortage is perpetual. I wonder if it's due to collusion amongst the manufacturers.
You're right: you haven't worked in manufacturing. Do you have any idea what kind of physical plant capital investment is required to add manufacturing capacity? And on top of that, the trained personnel to turn out three or four times normal capacity while maintaining quality control?

QC is critical in a business where just one squib or one double charge out of a billion rounds manufactured can erase all profits, and then some, possibly putting the company out of business.

I'm reminded of peak times in the grocery store, when 6 of 8 lanes are running, and one of the other two is broken. Some harpy charges up to the service desk and demands, "Can't you get someone to open some more lanes?"

Me, inside my head: "Hey Bob! Can you go out back and open a fresh case of cashiers? It looks like we're all out up here!"
 

drgrant

Moderator
NES Member
Rating - 100%
61   0   0
Joined
Mar 21, 2006
Messages
75,789
Likes
47,887
I do know what capital expenditures are and I understand the costs involved but by the same token billions have been invested in the last year to produce everything from ventilators to PPEs and now sub zero freezers to fight something that we will essentially be done with in the "relatively" near future as well. The washing machine company now making ventilators might possibly be due to the Defense Production Act but it will still be a huge financial windfall for the company.

Where is the government honey in ammunition other than fixed contracts? Also some of those companies producing the covid shit just about have a gun to their head via the gov, that's
clown world compared to ammo manufacturing, fake news/doesn't count. Dishwasher companies making ventilators, that might as well be planet zebulon, not earth.

I would think that the premise of striking while the iron is hot would apply to any products in great demand if even for the short term.

Another thing to put out there... up until about December of 2019 or so, the industry was in a two year wide sales drought and had a GLUT of
ammo. Like tons of ammo, sitting around. Driving prices down. It's not easy to motivate people to do the thing which caused them to get their
ass kicked the last time, even if they need it "in that window" NOW, etc. Also everyone thought this covid shit was a one tripper, at first, and it turned into a
much bigger shit show, same with the sudden appearance of the Soros funded BLM riots. Not to mention most thought there was no way that Biden could win. Thus making
an idea of spending millions on expansion of an ammo plants seem like a really dumb idea.

There was no real way to forecast these events (eg, like in March) and make a guess at capacity required. Not to mention a bunch of ammo plants were doing their own covid pant shitter
stuff too back then and went into shutdown mode, either full or partial for (insert some period of time here) So you have that compounding things, too. Like for example, Remington's lonoke plant got bought by Vista, but it was operating at maybe 10% THIS WHOLE TIME until just a few weeks ago. (this is mostly because Remington was bleeding cash rectally and downscaling ops until the sale made sense) It's not going to be trivial to spin that thing back up into a 3 shift flawless machine. If it wasn't for the new-er guys that got big since Obamascares, like S&B and Fiocchi, we'd be very dead in the water.


"This" ammo shortage may be over soon but it's a scenario that keeps repeating itself. I will admit I'd never given much thought to actual numbers like if all new gun owners bought just a couple boxes of 9mm how many rounds that might be but it certainly tells me we shoot a lot.

These new people probably don't shoot a lot, but think about it... even if they only shoot a few boxes monthly, thats a lot of demand. The numbers get retarded, really
fast.
 

drgrant

Moderator
NES Member
Rating - 100%
61   0   0
Joined
Mar 21, 2006
Messages
75,789
Likes
47,887
Here's something to consider. I don't know how much an of an affect it has in the end, but DHS within the last 6 months swapped over all their .40 cal pistols to 9mm. Over 50.000 pistols and ammo. The contract has to be for well over a billion rounds of 9mm. And that contract has to be fulfilled before anything else...

Just a thought...

Even if this contract exists though, usually theres some kind of fulfillment schedule provided in them, which doesn't say that the producers are obligated to produce it all at once, but via some kind of delivery schedule. Without election/covid/riots BS, people named in that contract could probably have easily fulfilled it according to schedule because the channel was so deep with ammo. You are right though it would take priority to meet any contractural obligations. I mean the channel was so deep it literally took like almost 3 months of like 6 million+ people buying shit to drain it out hard. That's a lot of f***in ammo. [laugh]
 
Rating - 0%
0   0   0
Joined
Nov 27, 2013
Messages
174
Likes
234
Location
Southern NH
Lean manufacturing 101: over production is a waste. You cannot base your output on the high (or low depending on which side of the counter you are on) times.

Agreed. As was this exact scenario transitioning from late 2016 early 2017 , Trump took office, and beginning of 2017 the gun industry had TONS of surplus products and it quickly transitioned from a panic buying market to a calm "buyers" market. The gun industry is not going to place themselves in that situation again. What you see on your LGS shelves today is what you will see until gun guys stop unnecessary impulse panic buying.
 

M125X

NES Member
Rating - 100%
1   0   0
Joined
Nov 24, 2013
Messages
1,609
Likes
1,008
Do you know what capital expenditures are? Do you know it costs millions of dollars to upscale an ammo plant, acquire and train new staff, etc.... ? I guess not. Nobody is going to dump millions for an ammo drought that will likely be mostly done with next year sometime..... that's not smart money.
Yeah if Biden bans guns and does everything he (the powers that be) wants There will be no ammo
 

TTA89

NES Member
Rating - 100%
8   0   0
Joined
Oct 14, 2009
Messages
536
Likes
403
Location
New Hampshire
The majority of new shooters who bought their first gun probably bought a box or two of ammo and that is all they will do. Most will not go to the range or become hobby shooters. The problem is the people that all of a sudden buy 20,000 rounds for fear there won't be any more.... And they aren't wrong. I put a calendar appt in for January 2023 - Buy ammo before the election. :)
 

jpk

Rating - 100%
3   0   0
Joined
Jan 5, 2013
Messages
15,048
Likes
12,227
Lean manufacturing 101: over production is a waste. You cannot base your output on the high (or low depending on which side of the counter you are on) times.

ROFL....."Lean Manufacturing"....what a disaster of a concept/application...that and its newest little sibling "Agile"

There's currently in excess of a 1 Billion round backlog....and thats just ammo.....doesnt include component demand and the panic buying for the next couple years that will ensue as a large number of people who didnt plan for a rainy day just learned that they need to "plan ahead".......

That backlog of demand is far in excess of the cost of expansion by a large margin.....

And lets not forget that the 2020 panic grew the customer base significantly.....there's money to be made and someone is going to step into the breach and take peoples money sooner or later
 
Rating - 100%
6   0   0
Joined
Apr 24, 2005
Messages
38,883
Likes
17,801
It didn't strike me as unexpected until the gun shop I usually do business with told me that they cannot get any new handguns from their
wholesalers. Supply, meet demand...
This simply means that the sellers have not responded to demand and are still pricing their product below the supply/demand intersection. There is never a shortage of pretty much anything - just a shortage at a price people want to pay.
There's currently in excess of a 1 Billion round backlog....and thats just ammo
One MA shop orders rounds by the million in normal times - and that's for a single load/caliber. "Excess of 1B" is probably an understatement but used because is sounds good - sort of like how Martin Gardner's famous article claimed it would take over 40 quadrillion years to decode Squamish Ossifrage (it was accomplished in considerably less time, and Scientific American did cough up the promised $100 reward)
 
Last edited:

Nick Leduc

NES Member
Rating - 100%
65   0   0
Joined
May 12, 2013
Messages
2,095
Likes
3,774
Location
Inman, SC
ROFL....."Lean Manufacturing"....what a disaster of a concept/application...that and its newest little sibling "Agile"

There's currently in excess of a 1 Billion round backlog....and thats just ammo.....doesnt include component demand and the panic buying for the next couple years that will ensue as a large number of people who didnt plan for a rainy day just learned that they need to "plan ahead".......

That backlog of demand is far in excess of the cost of expansion by a large margin.....

And lets not forget that the 2020 panic grew the customer base significantly.....there's money to be made and someone is going to step into the breach and take peoples money sooner or later
I don't know, I've seen some great advances with lean principles. I've worked in a shop that has been around for 130 years. So the "this is the way we've always done it" existed. Problem is, they were using 1950s technology. Alot of lean stuff is common sense, but when you get stuck in a run, using old methods, sometimes you need a "lean guy" to wake employees eyes that their way isn't the best way.
On the other side of the argument, I've seen some seriously wasted money on painting lines and shadow boards, where it just isn't worth the return.
As far as ammo goes, its hard to justify buying new capital for this panic, for it to be gone by the time the new equipment is up and running. We are not talking about some guy buying a new Dillon 1050 and getting it running. We are talking about big machines, floor space, man power. I don't have an "in" as far as the books go for the large manufacturers, but I would assume they are pushing their equipment as much as they can right now. They are not against $, but I would guess their capital expenditure budget won't be modified by a few months of panic buying.
We've all seen what happens after panics happen. Prices return to normal, shelves get stocked, and then product sits. Because Tom, Bob and Joe have a safe full of ammo. So then the huge $ the company dumped into new machines just sits.
 
Rating - 100%
6   0   0
Joined
Apr 24, 2005
Messages
38,883
Likes
17,801
The real issue is demand placed on the manufacturers. If the buyers are anticipating a shortage and buying in larger quantities that usual, the manufacturers will ramp up production to the extent they can .... but they don't generally have warehouse space to build inventory on the expectation there might be a run on product.
 

paul73

NES Member
Rating - 0%
0   0   0
Joined
Oct 30, 2020
Messages
1,670
Likes
1,592
Location
MA
the fact i just got myself a case of federal brass 124gr at .60c pr means we are getting to a stabilizing phase, i think. a $1 pr craziness is over, at least.
 

Nick Leduc

NES Member
Rating - 100%
65   0   0
Joined
May 12, 2013
Messages
2,095
Likes
3,774
Location
Inman, SC
The company I worked for has sold steel mills since its start. So we had customers running like 60 year old equipment in some instances. We were their OEM, so from time to time, they would have a breakdown and we would have to make a part with 1950s on the blueprint. Huge markup. Like 1000 x markup on stuff like that. Extremely profitable. I cannot stress how profitable. That end of the business would carry us in years that economy slowed and no new equipment was sold.
Lean guys come in, and start throwing special fixtures and tooling away because we hadn't used them in 10 years. Sure enough, next year we get a rebuild on a breakdown, so now we have nothing to run certain jobs. Zero profit on them because we spent a fortune re engineering everything.
 

allen-1

NES Member
Rating - 100%
6   0   0
Joined
Feb 23, 2014
Messages
10,149
Likes
20,824
Location
GA; (CT escapee)
the fact i just got myself a case of federal brass 124gr at .60c pr means we are getting to a stabilizing phase, i think. a $1 pr craziness is over, at least.

.60 per round is still more than twice what 9mm was going for a year ago.
And .30 per round is why it's economical for me to load my own.

This may be a "stabilizing phase", but it's supply and demand at its worst.
 

jpk

Rating - 100%
3   0   0
Joined
Jan 5, 2013
Messages
15,048
Likes
12,227
.60 per round is still more than twice what 9mm was going for a year ago.
And .30 per round is why it's economical for me to load my own.

This may be a "stabilizing phase", but it's supply and demand at its worst.

In Jan/Feb 9M was selling for 270-275 all day/everyday......thats ~27 cents/round

High demand + fooked supply chain = high prices
 

jkelly1229

NES Member
Rating - 100%
9   0   0
Joined
Nov 16, 2014
Messages
8,101
Likes
5,698
Here's something to consider. I don't know how much an of an affect it has in the end, but DHS within the last 6 months swapped over all their .40 cal pistols to 9mm. Over 50.000 pistols and ammo. The contract has to be for well over a billion rounds of 9mm. And that contract has to be fulfilled before anything else...

Just a thought...
In most companies when you cycle out something you usually don't do everything at once if you have a functioning asset in place though. Like I would assume guns are kinda like computers... they are depreciating assets which you need to cycle in and out in shifts. So wouldnt you do like 15000 a year and subsequent ammo increases?

Idk I'm asking but inventory and asset management is kinda the same thing throughout
 

ReluctantDecoy

NES Member
Rating - 0%
0   0   0
Joined
Oct 17, 2017
Messages
3,872
Likes
4,022
Location
Cambridge, MA
the fact i just got myself a case of federal brass 124gr at .60c pr means we are getting to a stabilizing phase, i think. a $1 pr craziness is over, at least.

Who was at $1/per for ball? That is, who else outside of Cheaper Than Dirt who don't really count because they are already shunned for markup shenanigans anyway. I've only see hollow points at or above a dollar so far throughout all of this. $0.60 has been the high water mark as far as I've seen for ball from vendors who I would actually shop at.
 

DPR

NES Member
Rating - 100%
2   0   0
Joined
Apr 15, 2016
Messages
1,325
Likes
1,415
Location
South Shore
Who was at $1/per for ball? That is, who else outside of Cheaper Than Dirt who don't really count because they are already shunned for markup shenanigans anyway. I've only see hollow points at or above a dollar so far throughout all of this. $0.60 has been the high water mark as far as I've seen for ball from vendors who I would actually shop at.
Agree. I don't think I saw anything near $1 per, at least not from any decent vendor. Maybe .70 but only for a short time.
 

paul73

NES Member
Rating - 0%
0   0   0
Joined
Oct 30, 2020
Messages
1,670
Likes
1,592
Location
MA
Agree. I don't think I saw anything near $1 per, at least not from any decent vendor. Maybe .70 but only for a short time.
you did not look at gunbroker, i guess. it reflects current prices quite well.
 

DPR

NES Member
Rating - 100%
2   0   0
Joined
Apr 15, 2016
Messages
1,325
Likes
1,415
Location
South Shore
December two years ago I was buying cases of 9mm for $165. Last January was buying cases for $165. They were also almost giving it away with rebates. Then March the price "jumped" up $20/case. May was a bigger increase and soon after it was $700/case and good luck finding any. I don't think ammo companies are playing us as fools but the people that didn't see what was happening and plan accordingly sure are looking like fools. I'm no Nostradamus but I knew when to buy ammo and then I knew when to buy reloading equipment.
 

DPR

NES Member
Rating - 100%
2   0   0
Joined
Apr 15, 2016
Messages
1,325
Likes
1,415
Location
South Shore
you did not look at gunbroker, i guess. it reflects current prices quite well.
I couldn't disagree more strongly about Gunbroker in regards to being an accurate reflection of ammo or reloading supply prices. Anyone paying $1/round for 9mm or $250/1000 for primers has got to be either daft, desperate or both. There are other sources for both and for far less money.
 

CrackPot

NES Member
Rating - 100%
62   0   0
Joined
Aug 21, 2011
Messages
4,377
Likes
5,176
Location
Worcester County
I couldn't disagree more strongly about Gunbroker in regards to being an accurate reflection of ammo or reloading supply prices. Anyone paying $1/round for 9mm or $250/1000 for primers has got to be either daft, desperate or both. There are other sources for both and for far less money.
There are sources selling below market. That does not mean they represent the market, just an opportunity for arbitrage. Gun broker does represent the market. It shows what the price is with immediate abundant supply. Sources selling for less sell out immediately (TSUSA, local shops) unless they constrain purchases like one box per customer per day. The only valid indicator of market value is the price paid on the open global market with abundant supply and the ability to deliver immediately. Local markets may vary but people will identify the discrepancies and profit.

Welcome to capitalism. If you really see it selling significantly lower than gun broker, buy it and post on gun broker snd join the economy yourself. I know many people identifying gaps in price and making a tidy profit. People paying $1/rd for 9mm represent an opportunity.
 
Top Bottom