Let's Do A Little Math

Let's do a little math.

If we accept a low-ball estimate that there were five million new gun buyers in 2020,  then we have to assume that they wanted to buy a bit of ammo for their new gat.  As we used to say in economics class, that is a reasonable assumption.  Now, lets assume that they wanted to buy two boxes of ammo.  For a hangun, that would be 100 rounds.  For a rifle, that would be 40 rounds.

Now, let's assume that us old gun buyers are seeing a spike in gun sales and decide to go pick up that new gun we've been wanting.  I know several of us who did that last year.  Or, we noticed what was happening and decided to stock up on ammo.  If five million people buy 100 rounds of ammo, that's 500 millions freedom pills that magically vanishes from the shelves.  A half-billion rounds of ammo out of the marketplace.

Some folks hoard.  I know, personally, one guy who hoards ammo.  He had, conservatively,  200K of .22LR, probably 30K of 9mm and probably 20K of .30-06, along with a smattering of lesser cartridges.  He didn't start this year, he's been buying ammo for a while, but he has it stacked in his vault.

I know, personally, two folkks in the trade.  They have trouble getting ammo, and they want to save some for those customers buying guns, so they don't allow hulk purchasing anymore.  Ammo is allocated to them, and they do what they have to do to solve the problem.  I could probably rumble around today and buy a box of 9mm, but I can't buy the whole case.

But, back to the manufacturers.  They are cranking out as much ammo as they can.  In calibers that lots of us shoot.  .22LR, 9mm, .308 etc.  I have a buddy who shoots an oddball caliber, the 7mm Shooting Times Westerner.  It's a wonderful cartridge, but if the ammo factories are pumping out the common calibers as fast as they can, they're probably not going to shut down a line to do a special run of an odd caliber.  It's simple economics.

Luckily, my buddy reloads.  But that leads another question.  If the ammo factories  are stuffing every primer they make into case brass to load cartridges, do you think they are going to package any or he reloading market?  Or powder, or bullets?

Ladies and gentlemen, it's a perfect storm in the ammo trade, from the factory to the retailer.  It's not just increased demand, the entire demand curve has shifted, and the supply side of the equation is trying to shift to achieve equilibrium.  Across the board, the demand curve has shifted and the supply side is struggling to meet the market requirements.  We're in for a wild ride, and it's not the Fudds, it's not the sport shooters, it's not the hoarders.  It's simple economics.

It's one thing when the science of economics gets involved, it's another thing entirely when the political situation imposes restrictions on a standard market.  If, for example, the Biden administration imposes artificial restraints (restricting imports of ammunition and components), then we won't have the bungee-cord of imports to soften the shock of the market trying to stabilize.

This whole problem is Eco 101.  The market is trying to supply a commodity at a price that the consumer will pay.  The factories can't increase supply quickly because they are at 100% right now.  It takes time to build factories, acquire raw materials, train workers in a hazardous environment, and crank up the distribution chain.  It's a perfect storm of basic economics.