Explanation for the Ammunition Crisis / Price

[waldedw]

Here is an article from Vista Corp why there is a shortage of ammunition and why the prices have risen, much the same is happening in the lumber and meat business, we will soon be running double digit inflation while they run triple digit profits. Fasten you seat belts folks there is turbulence ahead.

https://www.zerohedge.com/political/what-great-ammunition-shortage-says-about-inflation

[Vingiu]

The greedy will be greedy

[Pathfinder76]

Supply and demand.

[marky_mark]

In turkey, where I’m at right now, they are saying it has been 40% inflation in the last 12 months
They said the same thing but worse has happened in Kazakhstan and that’s why they are revolting against the govt

[Pathfinder76]

When the government hampers or restricts supply with policy, lack of policy, or interference this is what happens. Wakey wakey.

[32-40win]

Can add General Dynamics and Bell/ATK to that mix as well, as they are the major operators of the powder plants and the primary nitrocellulose/ guncotton supply in N America and Europe. They had a congressional inquiry into the supply chain years ago after shutting down one of the two gov't arsenal plants in N. America that could produce it, Radford Arsenal is the one that is still operating. There is only one plant (LHS Germany?) in western Europe as well, they own or have controlling stake on it. All the N. American & European powder plants have to buy from those two plants. Can't remember if Australia has their own or not.

[Vingiu]

When the government hampers or restricts supply with policy, lack of policy, or interference this is what happens. Wakey wakey.


Colour me confused

The article lays out quite clearly how these prices are due to corporate collusion and intentional supply constriction… not government control

I dislike unnecessary intervention as much as the next guy but I don’t see it here, is there more to the story?

[cody j]

All our inflation and supply chain issues are being blamed on Covid, I blame it on the government’s response to covid

[rockyb88]

All our inflation and supply chain issues are being blamed on Covid, I blame it on the government’s response to covid

I think it's a bit of both. Not to mention, everyone who sees ammo going higher buys more even though they don't need it, which only exacerbates the problem.

We're caught in a very viscous circle here. People are worried and tru-dumb's lack of any sort of leadership only makes people more concerned about supply chain issues should they truly rise.

[Sundog57]

I don't agree that there is collusion.
Remington was owned by a hedge fund that took what had been a fairly stable company and stripped out all of the equity and cash and replaced it with debt - Remington folded in direct result.
Vista, to their credit and not without risk, purchased the assets of the failed company with the intention of returning it to a full up manufacturing entity and within a very short period had all of the production equipment running at almost 90% capacity.
Had they not done that, Remington's production capacity would have been lost permanently. The ammunition shortage would have become permanent due to barriers to entry.

Of course Vista are looking to make a profit - they are in business.
As one of my friends pointed out to me years ago "if you ain't makin' money we call that a hobby"
Although in times of shortage, like the ones we are are in due to the past two years' of production failures, there is a fairly elastic window for the pricing of ammunition, it should be remembered that for most, (not applicable to the readers here...) ammunition is a discretionary expenditure.
If the price goes up too much people will stop shooting as a recreational activity and only buy what they require for hunting, or other essential purposes. (yes there are people who consider golf as a reasonable substitute for shooting - I have no idea what happens inside of their heads - it's hard to believe but it's true...)

It then follows that manufacturers will be looking for market discipline, so as not to over produce and sink everyone. Their capital investment is significant - they don't want to go bankrupt and lose it all.

Vista saw an opportunity, they made the investment, they expect to make a profit. Welcome to capitalism.

A second issue has to do with shortages of powder (check the reloading section here or on CGN) primers, brass, copper and lead.
My broker has been pushing me hard to make investments with copper exposure - the metal price has increased by 25% since January 2021 and is expected to continue upwards as demand increases for renewable energy projects, batteries and electric vehicles.

Then we have general inflation thanks to completely reckless expansion of the money supply with no regard for the consequences...

So yes expect to pay more for your ammunition - but it probably isn't just because of market concentration.

[saskbooknut]

A perfect storm of issues hit the ammunition market.
Remington went bankrupt - no ammo for 2+ years.
Transportation interrupted by Covid, bankruptcy in container shipping, lack of containers, ships backed up etc. etc. Cost of container shipping goes nuts.
European manufacturers of shotshells shut down by Covid. Even when producing, they can't get shipping.
Shortages and increased price for sheet steel and brass stock, polyethylene, powder, shot, even cardboard.
Challenger, Kent, Aguila, Boss, RST, Score all depend on European primed hulls.
Depressed prices in 2019 forced RIO to shut their Marshall TX shotshell plant.
Vista lost $648M dollars in 2019. They had to sell off Savage (roughly $150M loss) and other subsidiary companies to pay down debt .
Hoarding of ammo in the US, under the Biden administration sets new record for demand.
Vista has reason to be happy about incresed prices, secure market, and being extremely cautious about over expansion for a demand that has always been cyclical.

[antmai]

Whatever the reason why we are here is justified by purchases.
Remember the ‘don’t buy gas on one day so their supply will back up’? A sound idea but it never took off.
Is this any different? The prices are crazy but we pay it. I have fought my urge to buy more a few times now and have to (mostly) accept that my present stores are my stores for now.

[Trochu]

I have no idea who feasible it would be, but I was chatting with a guy last week who wanted to open a ammunition plant here in Alberta. It would be a cool project that's for sure.

[Ackleyman]

No ammo guns are just clubs, Government likes that.

[EdmontonEli]

Here is an article from Vista Corp why there is a shortage of ammunition and why the prices have risen, much the same is happening in the lumber and meat business, we will soon be running double digit inflation while they run triple digit profits. Fasten you seat belts folks there is turbulence ahead.

https://www.zerohedge.com/political/what-great-ammunition-shortage-says-about-inflation

I highly doubt it's the corporations.

Let's see what happened in the last couple of years.

- Covid occurred, with that supply chains became tight (i.e. less shipments, less workers working in factories etc.)
- Lockdowns occurred, with lockdowns came with stimmy checks. So you're essentially paying people to not work. Also printing money causes inflation if you don't know. Believe 80% of the existing US dollars, at the current moment, was printed out in the last year or so.
- Governments in the western world are cracking down on gun ownership. i.e. a power grab. Which caused people to panic and buy things off the shelves
- BLMs riots in the states. That caused increased demand in firearms and in turn ammo. Cause it showed people that the police are useless as hell or are told not to do anything about the riots. Which caused people to rely on themselves to defend what is theirs
- A democrat got elected in the US. If I got my history right, when a democrat is in power, they usually try to disarm people. Which, usually results in panic buying.

So. you get this formula. COVID lockdowns + stimmy checks + government power grabs + riots in the city + a democrat in office = overwhelming demand + capacity of production reduced.

It doesn't take a genius to put A+B+C+....

[saskbooknut]

I have no idea who feasible it would be, but I was chatting with a guy last week who wanted to open a ammunition plant here in Alberta. It would be a cool project that's for sure.

How many million has he got to invest? Really.
Along with commercial production of ammunition comes pressure/velocity testing, government licensing and huge liability insurance.

I have an ammunition plant in my gun room, and that's as big as it's going to get.

[lannie]

How many million has he got to invest? Really.
Along with commercial production of ammunition comes pressure/velocity testing, government licensing and huge liability insurance.

I have an ammunition plant in my gun room, and that's as big as it's going to get.

We do have ammunition manufacturing in Alberta currently. Has been a going concern for many years and appears to be holding its own. People need to be the glass half full type to step out and try to make their community better.

[32-40win]

THey just announced building a new primer plant in Texas at the Lone Star ammo plant, but, it is probably 1-1/2 away before it has any impact on the market.

https://www.thetruthaboutguns.com/a-third-primer-manufacturer-now-tooling-up-for-production-in-texas-in-2022/

[threeforthree]

A Canadian shot shell manufacturer, told me they have not made a shell for three months now, no powder, the USA and Canadian gov are taking all the powder.

[marky_mark]

A Canadian shot shell manufacturer, told me they have not made a shell for three months now, no powder, the USA and Canadian gov are taking all the powder.

They must have know about this Russian build up for a while

[32-40win]

If the militaries are actually preparing for Ukraine conflict, they will be looking for a lot of products.But, I get the impression there is a lot of strange stuff going on around that story, not sure about what is going on behind it all.

[saskbooknut]

We do have ammunition manufacturing in Alberta currently. Has been a going concern for many years and appears to be holding its own. People need to be the glass half full type to step out and try to make their community better.

I don't believe that there is more than ammunition reloading business in Alberta.
Canadian assemblers of shotshell ammunition are entirely dependent on foreign primed hulls and wads.
Our only powder manufacturer is General Dynamics in Valleyfield Quebec.

[elkhunter11]

And after all of the increases from the manufacturers, the carbon tax adds more, as it costs more to ship the product , and to heat and maintain warehouses and retail stores.

[SuperCub]

Supply and demand.

Yup. It's better than the alternative.

[Sundog57]

Hey...
So after reading most of this - I went ahead and bought a bunch of VSTO.
I have been watching it since it was $24 - and visiting all of the regular suspects, seeing empty shelves and hearing that all ammunition manufacturers are producing flat out.
I guess it goes out of one pocket and comes in the other.
Now I can buy more expensive ammunition...

The worst of it is that everyone on this forum could have bought VSTO at $24 because we all pay attention to ammunition availability and prices and the writing was clearly on the wall. Shoulda, Coulda. Woulda