This article was updated on Aug. 17, 2015.
In 2014, CBS News spotlighted a growing shortage of .22-caliber ammunition -- a shortage that continues to this day. "One of the most popular and common" -- and cheapest -- calibers of ammo for hunters and target shooters alike, .22 shells are in short supply, reported CBS. Interviewing one supplier, CBS reported that while as recently as a couple of years ago it was still possible to buy .22-caliber ammunition "by the pallet-load... now they're putting restrictions on how much you can get and how you get that ammo."
They still are.
True, some members of the gun press -- Ammoland.com, for example -- report that it's lately become easier to acquire at least high-end ammunition. But other shooters insist -- they're still seeing limits on the sale of many calibers around the country.
Retailers are shooting blanks
This is a problem for ammunition retailers -- and for gun owners as well. Statistically speaking, 24%-45% of Americans own guns either for self-defense or sporting purposes. But getting the ammo to load into those guns isn't always easy.
Wal-Mart Stores (NYSE:WMT) -- long the go-to spot for impulse ammo purchases -- instituted a policy in early 2013 limiting customers to buying no more than three boxes of ammo per person, per day. Wal-Mart lifted the restriction on most calibers of ammo last year... but kept it in place for .22 ammo. Other retailers have similar restrictions. And even when .22 ammo is obtainable, it costs more than it used to.
Historically, .22 ammo retailed for about $0.05 a round. From 2008 to 2013, though, .22 ammo more than tripled in price. Today, it's not quite that bad. But even online at bargain-basement website gun-deals.com, the cheapest .22 ammo sells for $0.08 a round, and $0.10 is a lot more common -- twice the historical price. Even worse, popular online guns 'n' ammo website AIM Surplus advertises several varieties of .22LR rifle ammunition for sale -- but every single round selling for less than the $0.12 price point is all sold out. So don't count on finding $0.10 ammo easily.
Who's to blame?
Similar stories can be heard from owners of guns of all shapes and sizes -- not just .22s. For example, after skyrocketing in price through the end of 2013, Brown Bear 7.62x39mm rifle rounds (standard for an AK-47) are now entirely unavailable on AIM Surplus. All you can get today is cheap Russian Wolf-brand ammo... that costs a staggering $230 for a box of 1,000 rounds. Plus shipping.
Why is this?
National Shooting Sports Foundation, or NSSF, public affairs director Mike Bazinet noted last year that "there are a lot of wild stories" about the ammunition shortage, with some people even blaming the U.S. government for "buying up all the ammo." But according to Bazinet, that's simply not the case. In fact, "government purchases have gone down over [the] last three years."
He may be right. In 2014, the National Rifle Association, or NRA, helped to debunk the "government conspiracy" thesis for America's .22 ammo shortage. Laying out the facts and figures in a multi-page spread in American Rifleman, the "official journal of the NRA," the NRA described how:
- The dollar value of ammunition sales in America doubled between 2007 and 2012. Highlighting the obvious, the NRA noted that sales really "started to climb fast as gun sales began surging" in the run-up to the 2008 Presidential election.
- Federal Premium Ammunition -- now a subsidiary of Vista Outdoor (NYSE:VSTO), according to S&P Capital IQ -- attributed ammo shortages to "high demand for our products," and said flat out that the biggest increases in ammunition purchases are coming from "the civilian market." (This means you.)
- Olin Corp's (NYSE:OLN) Winchester Ammunition agreed that it is "experiencing an extremely high demand."
- And privately held Freedom Group, which manufactures Remington cartridges, said, "it's clear to us that any lack of supply in the marketplace has been from consumer demand."
And then there was the interview with privately held Hornady Manufacturing. There, President Steve Hornady explained to the NRA, "People walk into the store, they don't see as much as they want so they take everything they can get. The next guy who comes in can't get anything, so he panics."
Panic and prudent price-comparison habits rarely go hand-in-hand, of course. This naturally results in higher prices for ammunition.
What the future holds
In February, Cabela's (NYSE:CAB) CEO Thomas Millner confirmed that "retail and stock levels of ammunition have improved" at his stores. Website thecabin.net goes so far as to say the ammunition shortage "may be ending," as manufacturers crank up production, wholesalers restock, and supplies begin filtering down to the retail level. This tallies with what Ammoland recently reported (as mentioned above) about high-end .22 ammo starting to come back on the market.
With any luck, this will eventually result in fully stocked shelves at gun stores, assuaging consumers' panic-fueled urge to hoard ammunition -- and putting the .22 ammo shortage to bed once and for all. The one factor that could derail this trend, though, is a resumption in gun-buying by the public (because that public will need ammo, too).
Last quarter, sales at Smith & Wesson (NASDAQ:SWHC) surged 6%, while even at Sturm, Ruger (NYSE:RGR), the steep slide in sales is moderating, with sales down only 8% last quarter (versus 33% the quarter before). With another presidential election just around the bend, and all that portends (for gun sales), this could turn into a new trend -- and not one that will be beneficial to ammunition shoppers.
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