https://www.arkansasonline.com/news/2023/oct/19/war-could-limit-ammo-supply/
War could limit ammo supply
Demands for ammunition for the war in Ukraine will likely pinch the supply of hunting ammunition in 2024. (Arkansas Democrat-Gazette/Bryan Hendricks)
Expect the price of ammunition to rise substantially in 2024 as manufacturers dedicate materials to supply the war in Ukraine.
The first hint appeared Monday when Vista Outdoor announced the sale of its outdoor sporting products division to Czechoslovak Group for $1.91 billion. Vista Outdoor brands include Federal, CCI, Speer, Heavy Metal, Bushnell, Butler Creek, Hoppes, and Remington, which owns a large ammunition plant at Lonoke.
A source in the retail side of the Vista universe said that Czechoslovak Group wants the ammunition making capacity for the war in Ukraine. A Reuters article on Monday reinforced that opinion. It said, "Czech-based CSG has seen its revenue and profits rise since Russia's invasion of Ukraine as demand for heavy military equipment and ammunition to ship to Ukraine soared."
In December 2022, Czechoslovak Group also acquired 70% of Fiocchi Munizioni, which in November 2022 announced plans to build a firearms primer manufacturing facility in Little Rock. It is one of only six primer manufacturing facilities in the United States and is also the world's only source for lead-free primers.
When interruptions occur in the firearms industry supply chain, the retail ammunition and ammunition reloading markets get pinched the hardest. Shortages are most noticeable for 9mm Luger, 40 S&W and 45 ACP, all common law enforcement and military cartridges. Accelerated production of ammo for military and law enforcement also causes shortages in the civilian market. This reduces availability of 380 Rem., and 22 LR, which manufacturers de-emphasize when producing high-demand military and police cartridges.
Robin Sharpless, executive vice-president of Redding Reloading Equipment, said that ammunition and reloading component shortages always accompany periods of political and social unrest.
When shortages are most acute, scarcity of factory loaded ammunition is equally acute. Scarcity triggers binge buying among some customers. Big box retailers sell an entire pallet of ammo to a few customers as soon as it leaves the truck. Moving inventory quickly is an objective in the retail paradigm. It doesn't matter if it moves through three customers or thirty.
Sharpless said that during the coronavirus pandemic, he noticed the same behavior in the reloading components market.
"If you were watching Facebook forums, you'd see posts that would say, 'Cabelas got so many primers, and I got them ALL!'" Sharpless said. "I talked to one of those guys. He loads a box of ammunition a year. He shoots a couple of deer a year, so that's, what, half a box at most? But he's got 3,000 years worth of primers. It's an 'I've got them and you don't,' thing. Those behaviors do hurt the market.
David Stone, president of Dong's Sporting and Reloading Goods in Tulsa, noticed the same thing in the ammunition market.
"During the pandemic in 2020, there was no rimfire and no 9mm," Stone said. "One guy told me he had a 50-gallon drum full of 22 rimfire shells. Never in your entire lifetime are you going to shoot all those. There are thousands of hoarders like that."
Some retailers, like Fort Thompson's Sporting Goods in Sherwood, flatten the supply and demand curve locally to a small extent by limiting the amount of ammo and components that individuals can buy at one time. Rationing ammo and components ensures that products are available to the maximum number of customers.
Rationing ammo is important during buying spree periods because it engenders trust, Stone said. Nothing frustrates a customer more than an unavailable product.
"I'm here every day and I watch my inventory level," Stone said. "Big chains have got corporate people that watch stuff. They'll ship a hundred boxes to a store. One person can walk in off the street and buy it all. I don't do that."
Even when ammo is available, reloading supplies often remain scarce for a long time. An associate at Fort Thompson Sporting Goods said it's because ammo manufacturers consume the bulk of powder, primers, brass and bullets.
"A lot of the primers are staying with the manufacturers because they're producing cartridges," the associate said. "If they can't get primers, they can't produce cartridges either. Vista owns CCI and Federal, and Vista owns Remington. Hodgdon owns most of the powder brands, so they've all got the same issue. Powder is going to the manufacturers to produce the bullets. It's all a chain deal. Reloaders get the leftovers."
Sometimes, Stone said, it pays to play a hunch.
"I'm kind of a gambler," Stone said. "When I saw a primer shortage coming, I gave somebody I've never done business with $150,000 up front for primers. When those came in, I gave them another $150,000. That's a gamble that paid off."
Even when demand stabilizes, non-endemic factors, like a trucker strike or dock worker strike, can cause a spike in demand and a dip in supply, Stone said.
"Let's say there's a trucker strike. There's no freight coming in. That kind of kills everybody's plan," Stone said.
The solution, Stone said, is equivalent to retailer hoarding. He said he buys enough to get him through the lean times. When the supply reflows, he overstocks again.
"The last big shortage was 2013," Stone said. "I hated it that I ran out, so I over bought. I've had primers since 2013. I bought too many then, and I'm glad I did. It's already paid for."
With a major supplier intending to devote production for the foreseeable future to a war that has no foreseeable end, the supply of hunting ammo could be tight for years. Stocking up now while supplies and prices are favorable might help see hunters through some upcoming lean times.
