Currently there’s an ammo shortage that no one can deny, and it’s been extremely uncomfortable for all of us from the standpoint of both supply, and as well, its recent cost. Go to any gun show and you’ll notice people (myself included … guilty as sin) purchasing ammo or components not in quantities of 500 units, but by the case, or even in some instances multiple cases.
Not long ago I ran into a friend at a show as he was leaving. He’d purchased such a hoard of rimfire ammunition the vendor gladly loaned him a handcart so he could wrangle six full cases through the showroom floor and the parking lot. I followed him to help load his vehicle with his newly acquired loot, only later to find out the load was so great he collapsed the floor in his trunk.
While researching this post I noticed a March issue of USA Today, in which a co-owner of a retail establishment in Wyoming, Becky Holtz of Frontier Arms, was asked about the current hoarding situation: "You know there's something wrong when I've got little old ladies coming in buying 5,000 rounds of .22 shells."

Kind of says it all, doesn’t it?
I had written about a related issue some time ago but it was dedicated to the
primer shortage. In it I reviewed the international trading costs of raw materials and their related lack of economic elasticity. By the end of 2007 and the very early part of 2008, metal prices had peaked to unprecedented levels, thus changing the cost basis for all ammunition manufacturers.
Since then metal prices have moderated as I had predicted … but not the price of ammunition. So, what’s the deal?
Well, we’ve got Becky’s little ol’ lady which is really a metaphor for all of us and half of all the other firearms owners in this country, and police agencies as well whose buying habits have changed dramatically. And we have the current cost of exchange rates for the US dollar to contend with.
Through initiatives and grants made by the Department of Homeland Security, police agencies have become much more paramilitary, in the hope of having immediate response to local terrorist plots. To illustrate the point, my local club has forged several new relationships with various police, security and even prison boards, with hopes of positively cementing their club facilities with the local community; even though each of these new relations were initiated by their respective local governments or company’s security representatives.
I live five air miles from the infamous Three Mile Island nuclear power plant and their security response team comes by routinely to one of my clubs to practice or “qualify.” They generally expense about 2,000 rounds of .223 in only a matter of two hours, and only God knows how many pistol rounds go down range as well. When they clean up the range, their brass litter is so vast they use coal shovels to scoop it up; which becomes something of a ritual for the conclusion of their range time. Eventually, their brass is then donated to the club’s youth programs.
Once upon a time, highly trained and heavily armed police units with acronyms such as SWAT, SRT or SRU were generally found as a part of a large urban police unit. Today, law enforcement agencies of every size, even some university police forces have some type of SWAT units. To become proficient, each officer must fire thousands of rounds in training every year. None the less, if you were to look real hard near your hometown, I’m certain you’d notice some of your local police doing much of the same.
So there’s hoarding that's in full view of us all. And there’s a new and much greater demand on the part of law enforcement. But what the hey, isn’t there two wars going on?
If you were to look at the small arms ammunition supply chain for the DOD, almost all, possibly 90%, is manufactured by the government owned Lake City Army Ammunition Plant. This year Lake City will produce about 1.2 billion rounds but has capacity for approximately 1.7 to 1.9 billion. Even with available excess capacity, the DOD has issued contracts to private industry here in the States and Israel for the remaining but outstanding 10% of their need.
All of the above puts market pressures not only on domestic manufacturers—but more importantly, their suppliers. So, if someone were to tell you that Lake City can handle their own commitments and it shouldn’t affect the civilian supply chain; don’t be so quick to buy that form of logic. Not every foundry in the country produces raw ammunition brass and the same reasoning can be said about the other specialty suppliers as well.
Even slight additional commitments on the part of private ammunition manufacturers tend to disrupt the distribution stream. Most commercial makers of ammo, much like a home reloader, have to share their production lines with different types of bullets. Normally manufacturers will inventory vast amounts of finished product on anticipation of future sales, historically as long as several months out. So, when demand is off the chart as it is now, inventories are depleted to such a point that it flows directly off the production line to the delivery truck, creating product imbalances. I’m certain you can understand why at times of supply stress there isn’t any 9MM, and at the same time, a modest glut (for about two weeks) of 45ACP appears.
There’s some real truth of the claims made by the ammo manufacturing community; operating 24, 7 without so much as an inkling of a break. But even their sorrow of not fulfilling their customer’s needs should be put into perspective: that it’s an easy time for them.
Olin, Federal and a whole host of other companies that make a buck on building ammo are posting the greatest net profit margins they have ever known. [Regale the musical chorus to Evita: …Don’t cry for me Argentinaaa!] But in fairness to them, I’m certain they’re well aware that it’s not a good long term business practice to alienate all of their customers. Although, some things are simply beyond their control.

For the most part, the value of the US dollar hasn’t so much as hit the radar screens of those who have been following this dilemma. But it would be a safe bet to assume that vast amounts of ammo inventory have been skirted off to Europe and elsewhere. Since 2005, the US dollar as declined by about -37% against the euro, leaving many to wonder if a quick buck has been made either by manufacturers or larger wholesalers, by placing the stuff on container ships.
Think of it this way: a case of Ely Sport that currently demands $252 in tribute from us can probably be had for $159 in Western Europe. I don’t want to get into a long drawn out discussion about exchange rates, because most of it is based upon political, fiscal and monetary policies. And in turn, it affects the cost of raw materials that enter the US, ultimately being consumed by ammo manufacturers. Possibly better said, a windmill effect occurs.
I don’t blame them it’s simply much more profitable to sell outside the US. Where else could you get a deal like this, by sending $100 worth of stuff out the door, only later cashing the check for it where your bank account gets a $135 deposit.
One of the better ways to express what’s currently happening with ammo availability and its pricing may best be described as a Perfect Storm. I’m not expecting that same case of Ely Sport to return to its 2005 price tag of $97 ever again. And since none of the other major elements seem to be returning to their historical parameters either, it looks like we’ll be in an ammo shortage for a long time.