Last week the firearms and ammunition industry held a trade show in Las Vegas, Nevada (SHOT Show). We received information relevant to your needs about deliveries of both ball and duty ammunition.
As most of you are painfully aware, there have been serious shortages of ammunition during the last several years. This has caused missed training dates and duty ammunition to be left in magazines longer, and has curtailed amounts of product being issued. In Kiesler’s 37 years in business, the last 2+ years have been the most challenging to get ammunition to our customers.
There is some good news. Ammunition delivery dates of certain calibers and bullet weights have started to improve. Today Kiesler’s has some quantities of Federal American Eagle .223cal and Federal Lake City XM193 5.56mm in stock for immediate shipment. However, most pistol caliber delivery dates are all over the place. Federal 45HST duty ammunition is at a 12 month delivery with Speer Gold Dot not much better. Ball 9mm American Eagle and Speer Lawman are at least six months out, with some duty rounds in different bullet weights and velocities being longer or shorter. The 40S&W training round’s delivery has improved, but having any inventory in our warehouse for immediate shipment is probably not going to happen for a long time. ATK, who owns Federal, Speer, CCI and Force on Force advised us at the show that this problem is going to persist for the next 36 months. We’re not saying it will take a department three years to get delivery, but rather deliveries will be erratic for some time.
Remington has announced a 2-4% price increase effective April 1, 2010. ATK (Federal, Speer & CCI) are thus far holding the prices steady, but in today’s Wall Street Journal (Monday, January 25th), Barclays Capital is projecting copper prices for 2010 will rise 34% over 2009 prices. If they are correct, then prices will surely rise.
So, what is a cash-strapped ammunition user to do?
Suggestions
(1) Forecast, forecast, forecast. Keep ammunition on order as far out as your budget allows. It’s better to receive some or all of it early than not have it at all. If you receive 2010’s shipment and have the funds, order 2011’s.
(2) By buying or placing your orders now, the price is guaranteed, even if commodities such as copper, lead, zinc or antimony go up, or if the factory raises prices. Orders placed at today’s price are locked in at that price. Heads, you win – Tails, you win.
"Barclays Capital is bullish on copper, projecting that the average price will rise 34% this year from 2009." - FROM WSJ, 1/25/2010 SEE ATTACHED CHART.
(3) Accept partial shipments. Some large agencies may order eight or nine types of ammunition on one purchase order stating, “ship complete – no partials”. This is very troubling to the manufacturers we represent. If a department orders 400,000 rounds of 40S&W training ammo and two cases of shotgun shells, the entire order may be held up waiting for the shot shells. With inventory so tight, the 400,000 rounds may be shipped to another department that’s desperate. Put “will accept partial shipments” on your order – it will help.
This letter is for informational purposes. It is not a salesman’s gimmick. The shortage continues to be real, and the potential commodities price increase could be substantial. Should any of our customers need more information, I will be happy to answer your questions. My number is (800) 444-2950, ext. 128. If I’m out, you will get a call back. While Kiesler’s does not represent every ammunition manufacturer, it is a fair assumption that all companies are having similar problems.
Very Best Regards,
Douglas M. Kiesler
CEO
