The Truth about the Rimfire Shortage

[4V50 Gary]

Since the panic began, I've only been able to buy 300 rounds of subsonic LR at Wally World. I got two bricks of subsonic at Big R and a brick of shorts (which was immediately shared with a friend and a relative). The most 22 LR I buy is online.

There's some hoarders in my area who are always first in line when it comes to snatching up the 22 at Wally World and are responsible for the lack of 22 in my area (hence my online purchases to resupply myself). Purportedly he and his buddies each have over 500,000 rounds of it.

Funny thing is Federal alone makes 4,000,000 22 LRs daily. I don't know what Remington, CCI and Winchester makes.

 

[Mike Irwin]

"Agreed. Its interesting that most other ammunition appears readily available now, but there still is a difficulty with .22lr."

My guess is that there's a couple of reasons for that:

1. .22 is, compared to other ammunition, cheap. Always has been.

2. The average gun owner is most likely to own a .22, or multiple .22s. The .22 is the single most common cartridge in the United States by a wide margin -- rifles and handguns.

3. Combine 1 and 2 together, and the demand for .22 can leap to staggering proportions in a very short period of time.

As I noted earlier, US production capacity plus imports, for decades, ran 3 to billion rounds a year. It was a stable market. No company is going to double their production if they don't see a business case for it. Adding new machinery is expensive and time consuming.



"Funny thing is Federal alone makes 4,000,000 22 LRs daily. I don't know what Remington, CCI and Winchester makes."

Likely roughly the same. But, they're not running 4 million rounds a day, every day, 365 days a year.

If eacy of the companies were producing 4 million rounds a day, every day, US capacity would be just shy of 6 billion rounds a year.

But, machinery needs to be serviced, most companies don't run on the weekends, etc. So, cut that figure in half, and you're at roughly 2.5 to 3 billion rounds a year, which is where domestic production has been for a long, long time.

 

[g.willikers]

When we were kids, my brother and I grew up with a hand me down 22 pump.
A really good day of shooting might almost use up a single 50 round box of ammo between us.
We were slightly too young at the time to be legally able to buy ammo ourselves.
So, we had to rely on nagging our Dad to put his newspaper down, get off the couch and go to the local hardware store with us.
Lots of luck with that.
Anyhow, growing up with the idea that ammo didn't grow on trees, to this day I'm kind of stingy with it.
With any kind of planned and focused practice, there's really no reason or benefit from just spraying ammo downrange.
I blame the video games and credit cards.

 

[Doyle]

Bogus. The increase in demand was FAR more dramatic and fast than anyone could have imagined.

I'm going to disagree with that. Industry forecasting is indeed a specialized science but that is why large corporations hire MBAs. In the case of rimfire, the significant sales of high-capacity .22 firearms in the years preceding the shortage should have given them plenty of notice that users would want ammo to go along with them. They appear to have completely ignored the firearm sales trends.

I agree that it takes a huge commitment to significantly increase production and I'm hoping that now ammo manufacturers will be willing to make that commitment.

 

[Mike Irwin]

So...

Every corporate prediction by every whiz kid ever has been 100% accurate, right?


Two words.

New.

Coke.

Perfect MBA market research, right?


Given that NONE of the manufacturers, firearms or ammunition, predicted what happened, and have all admitted that the buying panic/frenzy that kicked off in 2007 caught them both by surprise and flat footed and unable to respond to the massive spike in sales should tell you something.


I still maintain ties in the industry from my time as associate editor of American Rifleman magazine.

What I'm telling you isn't groundless speculation and wild guesses paired with "In a perfect world as I envision it to be" statements.

If you think that you can do a better job at industry prognostication than those employed by the companies in question (you know, the MBAs), by all means, offer your services.

Otherwise, stop guessing and LISTEN to what these companies have had to say.



"I agree that it takes a huge commitment to significantly increase production and I'm hoping that now ammo manufacturers will be willing to make that commitment."

As I've noted (I think I have in this thread), the ammo makers are ramping up manufacturing capacity.

But none of them are going to look at current market conditions and say "Demand has tripled! Triple production capacity!"

That's how you drive a business OUT of business. The corporate landscape is littered with the corpses of companies that have rushed to expand, have misread market conditions, and collapsed when the revenue needed to support expansion either evaporated or never materialized.

 

[FITASC]

If eacy of the companies were producing 4 million rounds a day, every day, US capacity would be just shy of 6 billion rounds a year.

And it most likely is. Remember, we also EXPORT a lot of ammo to other countries as well. Rimfires are their own dedicated production line; they will run them as fast and as long as they can.

 

[Mike Irwin]

"In the case of rimfire, the significant sales of high-capacity .22 firearms in the years preceding the shortage should have given them plenty of notice that users would want ammo to go along with them."

OK, you've made a definitive statement.

Now you need to back it up with figures.

Define the firearms in question.

Define "significant sales" as a number.

Show the sales totals of those firearms over a period of at least 10 years to allow for smoothing of fluctuations.

Compare that with production/importation capacity of .22 ammunition over the same period of time.


You know what you're going to find? You're going to find roughly steady sales figures that are logically comparable to the .22 ammunition supply capacity at the same time.

You're also missing a very, VERY important trend.

You seem to think that everyone who is purchasing a new firearm, or ammunition to support an existing firearm, is shooting it.

They're not.

Firearms and ammunition sales over the last 8 years have been driven by hoarding.

People aren't buying a Ruger 10-22 and 1,000 rounds of ammo and shooting it.

They're buying a 10-22 and 30,000 rounds of ammo and socking it away.

It's the panicky hoarding mouth-breathing idiot who is driving the three-fold increase in demand for ammunition.

That's not logical, that's not predictable, and it isn't (hopefully) constantly sustainable.

You seem to look at the last few years as something that was easily forseeable, and that takes me back to my previous message, in which every company in the sector failed to predict it.

There's a phrase that comes out of the financial industry that's pretty appropriate in this case.

"Past results do not predict future performance."

 

[Mike Irwin]

"And it most likely is. Remember, we also EXPORT a lot of ammo to other countries as well."

Please read the REST of my post on the subject?

I explain why 4 million a day isn't each day every day production.

 

[Tom Servo]

Its interesting that most other ammunition appears readily available now, but there still is a difficulty with .22lr.

That's not really the case. Need any .223 besides 55gr FMJ? Good luck finding it locally. Same goes for just about any metric rifle caliber. All those folks who jumped into .300BLK are having a hard time as well. It's been two and a half years, and we're still not out of the woods.

People aren't buying a Ruger 10-22 and 1,000 rounds of ammo and shooting it. They're buying a 10-22 and 30,000 rounds of ammo and socking it away.

It's actually a bit worse than that. Tom's buying the 10/22, then realizing he can't get ammunition. So he's not shooting at all. He's frustrated by the fact he can't get ammunition at the local shops, and he's disgusteed by the predatory pricing and behavior at gun shows.

In fact, Tom's wondering why he's bothering with the whole shooting thing in the first place.

In the case of rimfire, the significant sales of high-capacity .22 firearms in the years preceding the shortage should have given them plenty of notice that users would want ammo to go along with them. They appear to have completely ignored the firearm sales trends.

This is utterly untrue. The industry should have expected a spike after the 2008 election, and they should have prepared for it. They didn't, and we had a shortage in 2009. There was no shortage of harsh language between retailers, distributors, and manufacturers.

Fast forward to 2012. We had another election coming, and the economy was doing better. Manufacturers promised a boost in production and supply. For the most part, they came through. The industry was on track to have a profitable and smooth Christmas.

Then Sandy Hook happened. Nobody can expect something like that. Add in the political proposals, and that spiked demand on a scale the industry hadn't seen. Add in every blogger and salesman who predicted OBAMA NSA AMMO CONFISCATION or whatnot, and the situation turned into a wildfire.

Manufacturers don't have a giant red button that says TRIPLE AMMO PRODUCTION. If they want that to happen, it involves building new facilities, buying new equipment, and paying people to run and maintain that equipment. That entails a huge capital investment.

What MBA is going to look at doing that to meet a temporary (albeit long-running) shortage?

 

[Mike Irwin]

"The industry should have expected a spike after the 2008 election, and they should have prepared for it."

Only problem with that, Tom is one of timing.

Barak Obama's candidacy caught fire in 2007, and in a lot of ways he was the great unknown candidate, and what was known about him made gun owners fearful.

It was pretty evident even well before that that the Republicans were going to lose toe election.

To whom was the wildcard and it was worse than a lot of people ever thought it would be.

Ultimately that didn't really turn out to be the case, but it was more than enough to ignite a buying frenzy of a kind that has never been seen before.

In Northern Virginia most vendors sold out of ammunition in days, and stayed that way for a long, long time.

 

[thallub]

Fear is a powerful motivator. Gullible gunowners fall victim to rumors, conspiracy theories and outright lies. Rumors of new new gun control schemes set the gun boards aflame.

Anyone here remember the big primer scare of over 20 years ago? Centerfire primers became very scarce after the conspiracy theorists declared that president Clinton had signed an order requiring all new reloading primers have a limited shelf life. Self neutralizing primers were the law of the land.

Sadly, i bought into that silly trash. i still have two types of small primers in great quantities. Some of those primers will remain after i'm gone.

Many people truly believe that the US government is buying up huge quantites of ammunition to keep it off the market. i hear folks talk of their desire to acquire "unregistered guns". Many believe that all new guns are "registered" at time of sale. Been to auctions where guys bid up the prices of well used firearms in order to get an "unregistered gun". Recently saw a 20 year old Remington model 700 BDL in .308 with a cheap Bushnell scope go for $740.

 

[carguychris]

IMHO discussions like this are a perfect example of WHY the industry has NOT drastically ramped up rimfire production: there is NO widespread consensus that the nature of the market for rimfire ammo has fundamentally changed.

Specifically, there is no definitive proof that people are actually using the additional .22LR ammo that they're buying; reality is quite the opposite, ask any shooting range manager.

In fact, I would argue that it's smart for manufacturers NOT to ramp up .22LR production, because the market may collapse once the hoarders stop buying, particularly if this happens due to some sudden unforeseen circumstance, e.g. Bill has a heart attack and Hillary decides to withdraw from the presidential race.*

*Not saying that I'd like this to happen, or that it's likely - just speaking hypothetically.

 

[Erno86]

Ammo companies have slim profit margins in the manufacture of 22 rimfire ammo.

Rimfire production plants need very experienced employees in the manufacture of 22 rimfire ammo; which is harder to make than centerfire ammo.

The last lead smelter in the U.S. was closed down by the EPA, one or two years ago.

 

[22-rimfire]

In fact, I would argue that it's smart for manufacturers NOT to ramp up .22LR production, because the market may collapse once the hoarders stop buying, particularly if this happens due to some sudden unforeseen circumstance.

I agree with this and it would appear that the rimfire manufacturers view it the same way. What has surprised me is the price has not gone up exponentially at the manufacturing sales level with the demand. My thought is that long term contracts simply have not allowed for that increase in pricing at the factory level.

At some point, people will stop buying in volume and that is precisely what the manufactures fear. They live on cash flow and thin profit margins.

I know that I am not shooting as much 22LR as I used to. Mike Irwin mentioned hoarding and 30,000 rounds rather than 1,000 rounds. The problem there are bulk packs as you can concentrate a great deal of volume in a few boxes. That generally was not the case if you look at things as they were in the 60's and 70's.

People also spend money more freely now on rimfire ammunition when it is available simply because availability has not been continuous since 2007. Call it panic buying if you want to. That's 6.5 years ago if you think in terms of presidential elections. I don't think most people are in a panicked state anymore with regard to rimfire. It has become one of acceptance and making the best of an non-typical historical situation.

My belief is bulk packs did it to the manufactures when they began that packaging in order to increase their profit margins and increase sales volumes. I think it worked. But it worked too well.

Toss in the political environment and you have what we have today... a slowly recovering market at the retail end of things.

 

[zincwarrior]

I'm not seeing how bricks caused the shortage. I've been shooting bricks for at least a decade, and I am sure it was longer than that.

 

[22-rimfire]

Traditionally "bricks" were 10 50 ct boxes. It was not a bulk pack containing loose ammunition. Not that long ago, a brick or 500 rounds of 22 ammunition was considered a lot. Now with people shooting their popular semi-automatic rifles and pistols, it is not enough.

Lets say that I want to go do some plinking with the family over the weekend and I need some 22LR ammunition. The plan is to warm up some semi-autos like the Ruger 10/22 or a rimfire AR. I would choose the bulk packs and I doubt I would buy one. I'd buy three or four. I would probably not buy three of the old bricks with individual boxes or 30 or 40 50 ct boxes of 22 ammo to go shooting. There lies the difference; it's psychological and you buy more as a result of the packaging.

View that country wide with a fixed production rate, you use up all the available units (rounds) very quickly in bulk packaging.

 

[Aguila Blanca]

Firearms and ammunition sales over the last 8 years have been driven by hoarding.

People aren't buying a Ruger 10-22 and 1,000 rounds of ammo and shooting it.

They're buying a 10-22 and 30,000 rounds of ammo and socking it away.

It's the panicky hoarding mouth-breathing idiot who is driving the three-fold increase in demand for ammunition.

That's not logical, that's not predictable, and it isn't (hopefully) constantly sustainable.

Unfortunately, I suspect that it will be self-sustaining, at least for quite awhile longer. I expect to see a second and then third wave of hoarders to enter the fray once the current hoarders finally realize they have enough to last ten lifetimes and quit buying. The duration of the shortage up to now will probably lead people to buy as much as they can, whenever and wherever they can.

 

[Mike Irwin]

Semi-auto 22s have been selling well, and shot heavily, for decades.

That is nothing new.

What is new is the hoarding that has been going on. Purchases of amounts of ammo that do not match any increase in the sale of any kind of 22.

If that logic held true we would have been seeing steadily increasing ammo prices and growing shortages well before the summer of 2007.

Sorry, but your logic simply doesn't line up with the scenarioas it has actually played out.

 

[DaleA]

What is new is the hoarding that has been going on.

IMhO this ^ is it.

In the Twin Cities, MN a couple months after Sandy Hook (December 2012) the .22 ammunition became scarce and has been so pretty much ever since.

Handguns became scarce for a while too. It was very odd going to my local gun shop and seeing two thirds of their display cases empty. THAT situation quickly remedied itself (took about another two or three months) but the .22 shortage remains to this day.

I don't need any other explanation then watching what happens when .22LR hits the shelves. Folks buy all the store will allow. Folks get on their cell phone in the store and tell their friends. Folk come to the store with anyone in their family that can buy ammo and they all buy all the store will allow.

Fleet Farm and Joe's Sporting Goods are a couple of places that have had .22 recently and they both charged UNDER $20 for roughly 500 round bulk packs so I applaud them for NOT gouging although they certainly could have done so.

 

[mellow_c]

I remember about 5 years ago I made a real effort to collect aluminum cans, because each can was worth about 2 cents at the time, and that's about what a round of the cheapest .22lr cost as well...

So every time I'd pick up a can I'd say out loud "Bang!"



That was a nice time. I haven't been able to find .22lr for sale for about a year or more. And before that it was about another year... Although I can pay 10cents a shot at my local range for the same bulk federal ammo that used to cost 2 cents a shot... the range receives the bulk packs and then divides them up into 100 round Ziploc bags and charges $10 a bag!!! No thanks, I won't support that.

Every time I check at Walmart I get the same story... "Well, we had some earlier this week, but it all sold out in a matter of hours" ... I shoot my .22's now as much as I shoot my 308 or 30-06