What happened to supply and Demand?

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Lbrewer42
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What happened to supply and Demand?

Post by Lbrewer42 »

I am so anxious to get a progressive Lee press, reloading supplies, tune up the machine and have fun making ammo. I have the time and the money right now to do it...but I cannot get the equipment I want. I grew up in an America where something like this was just about impossible. And some people are calling this the new normal! Yes, I know - the China virus - granted. But even before the virus, ammo was not easy to obtain.

I guess I am just to ignorant of the modern business world. We have had ammo shortages since obama's Great Depression. But it used to be in our Capitalistic society that when a need was there, entrepreneurs would rise up and fill the void - becoming rich while doing it.

I would think surely the big manufacturers, if they are not restricted by some regulations (that need removed) could invest and quickly increase their output with new machinery. The new businesses would be guaranteed all they make they could sell! So what if after awhile demand dies down - I would think there are millions to be made NOW that would pay for the machinery.

So why is this not happening? Its long overdue. Is governmental regulations/licensing holding things up? no matter what step in the manufacturing process you go back to, there should be people stepping up to fill the void.

I have not seen full ammo shelves like we had all the time I was growing up. And I don't know how much I believe, when looking at percentages and population, that there are more people wanting ammo nowadays.

While growing up in north west PA, almost all the guys in my large public high school went out on the first day of buck. Forty years later as a teacher, I found it was just a handful of kids who had even shot a gun, let alone being able to tell you the difference between a shotgun and rifle (though they knew all their favorite ball team players stats :( )! And to think all those boys from long ago had dad's and grandfather's taking them out - that's even more ammo needed percentagewise by population.

Some people say hoarding is the problem. But again, American history shows over and over when demand has outpaced supply, someone who sees the opportunity for guaranteed successful business has stepped up to the plate. So what really gives?

:?:
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Re: What happened to supply and Demand?

Post by Ohio3Wheels »

You actually kinda answered the question with the opening paragraph. You want to make your own ammo, but you can't get the tooling or the bits and pieces (powder, primers, cases etc). Now imagine being a well healed, capitalist who wants to start an ammo production line. The least of your problem will be a building there's a lot of those available. Now you need machines, not sure what the lead time would be on those or if you could even get a slot in the production schedule, but let's you get lucky and get the machine into your building. Now you're going to need feed stock and getting into those supply chains may prove nearly impossible ass my understanding is they are currently at capacity plus a little.

Federal and others are said to be working 24/7 and I would imagine that none of them are willing to invest in additional capacity until the current political climate shakes out.

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Re: What happened to supply and Demand?

Post by mikld »

I believe the present overwhelming demand has out stripped manufactures' ability to keep up making ammo, components and equipment and even firearms. I'm sure manufacturers are adding personnel and working extra hours, but no one can predict how long this crisis will last. And Ohio3Wheels make an excellent point about the supply chain, the businesses supplying the parts and raw materials are also behind, overloaded. Should manufacturers invest in more equipment and expansion on a guess? What would be the effect on the tool/machine manufacturers that would make the stuff to make the stuff we need? The last crisis, the obumma administration just lasted a few months, and the flu, the open anarchy and crazy politics now may extend the present crisis/panic, but is it permanent? Should manufacturers expand with more equipment and personnel only to have to lay off and "down size" in a year?
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Re: What happened to supply and Demand?

Post by Lbrewer42 »

Ohio3Wheels wrote:You actually kinda answered the question with the opening paragraph. You want to make your own ammo, but you can't get the tooling or the bits and pieces (powder, primers, cases etc). Now imagine being a well healed, capitalist who wants to start an ammo production line.
As a consumer, there is a different buying market for businesses who can order by the ton vs. by the single box from the shelf of the store. Since places like Federal are going 24 hours a day, they are getting the materials needed and selling everything they make. Another post on the forum here (sorry I do not remember where) did mention a local business in their area starting up to make ammo. That business - a bulk buyer - can start up and make a go of it.

Forgetting about the pandemic for a minute, this shortage of ammo has been going on for a long time. Yet even when the economy was skyrocketing before the pandemic, no new businesses were stepping up to fill the gap.

Another point to be made is that if ammo businesses could not get the materials in bulk they need, then a larger need is created. Again, as in the past new businesses have popped up to meet supply.

This ammo drought has been going on for a long time now - a long time before this round of Chinese flu was ever here..
I believe the present overwhelming demand has out stripped manufactures' ability to keep up making ammo, components and equipment and even firearms. I'm sure manufacturers are adding personnel and working extra hours, but no one can predict how long this crisis will last.
Sorry I did not make myself clear in my first post. This ammo drought has been with us a long time having started in the obama years. Yes, he has been called the best gun salesman in US history :lol: so ammo more ammo was needed.
But I am puzzled how after the almost 4 years of great economy, the drought was still there. Again, the percentage of guns to people, at least in my own experience views, seems not so far off from back when everyone I knew was a hunter. And there was never an ammo supply problem back then.

Hence I was wondering if the problem is that there are a lot more regulatory hurdles to jump through nowadays specifically for ammo (etc.) b/c of stricter gun laws. I wonder if the left is not going around the back door and making everything having to do with ammo prices/availability much harder so they can get their way of disarming us?

Now bringing in the pandemic - I can see how why there is presently a shortage. However, the prices have never gone back down (taking into account loss of buying power of the dollar) to pre-obama-crisis prices. And if the supply and demand was working as it used to, it would drive those prices back down proportionatly. Too much product made for demand to handle means the products price plummets to empty the warehouses.
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Re: What happened to supply and Demand?

Post by RBHarter »

Remember when there wasn't a round of 22 LR to be had for months ? Based on published hourly production numbers @ 16hr/day 6 days they were banging out , at CCI , something like 80,000 rounds a day on each of 2 lines totaling about 1 million rounds/week . We presume that was just blazer and standard CCI . That doesn't include the 22 mag and 17 HMR FC or Winchester lines nor production by other manufacturers . Just US production should have been something on the order of 10 million rounds per week that 30,000 333 packs and if it were spread around evenly 6,000 333 packs per state probably closer to 2,000 rounds per retailer at the end of it all . They added a 3rd shift by hiring half a shift and building a 3rd shift robbing from the lines that could bear it , then went to a 4-3-3-4/12 work week and ran 24/7 and got it up to around 3,500 rounds per store per week . When buyers are getting back log and the supply line is full nobody notices the guy that buys 1000 rounds a month . When it's not we get to buy 100/wk be happy you got that .
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Re: What happened to supply and Demand?

Post by GasGuzzler »

The "shortage" has NOT been around a long time. Many of them have come and gone. 2012 was the worst in a while and it lasted two years. Only one year ago you could buy brass case 9X19 for $8 per 50...so I did. They're $30 per 50 now. I might sell some. :)
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Re: What happened to supply and Demand?

Post by Macd »

If enough consumers believes that there wil be a shortage of a particular product and buy extra of that product well beyond immediate need a shortage will be created. Manufacturers will increase production but not necessarily invest in new plant and equipment as they know that all that extra purchasing will eventually result in a sharp reduction in demand at a future date. In fact shortages drive up prices and therefore profits. When peak demand passes and drops to below pre-shortage levels low volume producers who entered the market when demand was artificially high may find it hard to survive.

Like all industries ammo and firearms production has become highly concentrated and controlled by a few large players. While specialust or niche manufacturers are able to carve out a small bit of the market, the big ones are able to fend off any real competitors.
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Re: What happened to supply and Demand?

Post by Lbrewer42 »

Macd wrote:...Like all industries ammo and firearms production has become highly concentrated and controlled by a few large players. While specialist or niche manufacturers are able to carve out a small bit of the market, the big ones are able to fend off any real competitors.
I think this makes the most sense to what i was trying to ask.
GasGuzzler wrote:The "shortage" has NOT been around a long time. Many of them have come and gone.
During the time period I mentioned, I certainly was not a person using much ammo (health issues over that long time period). But I did periodically check prices online and in stores. I never did see, for example, .22 ammo back down to the prices before the time period I mentioned (taking into account dollar devaluation over time). Somehow I got the wrong impression I guess...maybe just bad timing on my part.

Macd wrote:When peak demand passes and drops to below pre-shortage levels low volume producers who entered the market when demand was artificially high may find it hard to survive.
Yes, this is to be expected. But, from the last quote, maybe I was under a false idea that the shortages have been continual over the time period I mentioned. IF this HAD been the case, I would think there were people who would be willing to fill the gap and make a lot of money knowing that the market normalizing to old standards would later collapse them... but profits during the shortage would set them up for other future opportunities.

Again though, as you said, the landscape in the business world sure has changed from years ago as well.
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Re: What happened to supply and Demand?

Post by GasGuzzler »

Mini-mags were $6 per 50 in 2011. They were $8 per 50 in 2018.

Brass FMJ 9X19 was $8 per 50 in 2011. They were $10 per 50 in 2018.

I have more OEM than I might ever use but I still buy when it's cheap. I also learned to cast and reload for the same reasons.

I have a Yugo O-PAP I got for 1/3 what it's worth now by trading green tips on a high market and throwing in some cash. When the market settled again in two years I got ALL the Golden Tiger 7.62X39 plus green tips to restock.

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Re: What happened to supply and Demand?

Post by Shooterrick2020 »

Only thing I have to say is panic buying and hoarding. . I was lucky it when I started reloading again was able to get a significant stock of powder primers and bullets and brass before the shortage really took hold.
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