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CMP info on the .22LR shortage

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  • benenglish

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    If you're not on the Civilian Marksmanship Program mailing list, you should be.

    Having gotten that off my chest, I thought I'd pass on some of the latest email I got from the CMP. Concerning the availability of .22LR, they say:

    The CMP has been notified by ammunition manufacturers and distributors to expect price increases and significant delivery delays for all calibers of ammunition, especially for .22 rimfire. The price increases and delays apply to orders we have already placed with the manufacturers. Prior to 2013 CMP received deliveries of truckloads of ammo within a few weeks of placing orders. We are now being advised, as in the case of Aguila .22, that it may take several years to receive all of the 35,000,000 rounds of Aguila ammo we have on order.

    As a result of this situation, CMP has placed orders with several different manufacturers for large amounts of ammunition in various calibers. We expect to receive only a few pallets at a time because manufacturers and distributors are rationing the ammo to their customers. As we receive ammo, we will contact customers with oldest orders already in place with the option to purchase whatever we receive at the new prices, cancel the order, or remain on the list for the manufacturer they originally requested. All price increases to CMP will be passed on to the customer. CMP will not be profiting from the increase in prices.

    We will continue to accept orders for ammunition, with the understanding that the wait time for customers between placing an order and receiving the ammunition may be anywhere from a few weeks to a few years....

    Now, that's sad, but it's also from one of the most reputable places possible. Given the plethora of rumors from sketchy sources, I thought this evaluation of the situation from a trustworthy source deserved to be spread a bit.

    Any thoughts?
    Lynx Defense
     

    Southpaw

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    Do you think this backlog is because manufacturer's are concentrating on other calibers and no 22? I ask, because their is plenty of other calibers out there.
     

    biglucky

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    Do you think this backlog is because manufacturer's are concentrating on other calibers and no 22? I ask, because their is plenty of other calibers out there.

    I was talking to one of the gun counter guys at Gander Mountain the other day and he told me just that. They had a manufacturer rep from their ammo manufacturers come through for the store's grand opening and they told them that companies just weren't making any .22LR. They ramped for all the other calibers and stopped making .22 for whatever reason. Profit margin I would assume.
     

    majormadmax

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    Wow, I feel better about the six boxes of Federal Target .22LR I just bought about 20 minutes ago!

    And before anyone asks, four of those were bought and paid for by someone else; I was just doing them a favor and picking it up.

    As the old adage goes, buy cheap and stack it deep! :D

    Cheers! M2
     

    karlac

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    Dayum, that explains the .22lr price increases on the ammo bots the past few weeks. Figured something was up besides the usual hoarding and demand.

    From a "few weeks to a few years.... "?

    Something else is rotten as hell in Denmark ... I'd bet a bucket of 22lr that's not the "rest of the story".

    Edit: Thanks for sharing that!
     

    TheDan

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    They had a manufacturer rep from their ammo manufacturers come through for the store's grand opening and they told them that companies just weren't making any .22LR. They ramped for all the other calibers and stopped making .22 for whatever reason. Profit margin I would assume.
    That's something I've thought was going on for quite some time, even before this last panic, but I'm not sure it make a lot of sense. The equipment for making .22 is going to be drastically different from everything else. Are the .22 production lines just sitting unused or did they pack them up off the floor and put 9mm equipment in their place?
     

    Lord1234

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    Makes me happy I have a bunch of 22 sitting here in the house. I don't expect to run out any time soon...
     

    robertc1024

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    Why was there was a bunch of .22 longs on the shelf at Academy today? Somebody's making the oddball stuff.
     

    shortround

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    I was talking to one of the gun counter guys at Gander Mountain the other day and he told me just that. They had a manufacturer rep from their ammo manufacturers come through for the store's grand opening and they told them that companies just weren't making any .22LR. They ramped for all the other calibers and stopped making .22 for whatever reason. Profit margin I would assume.

    The Gander Mountain counter guy don't know jack. He is just passing on more bad rumors, and we will believe almost anything at this point.

    To clear things up -- Manufacturers like ATK (Federal, CCI, Blazer), Remington, Fiocci USA, and Winchester have DEDICATED rim fire lines (.22/.22 Mag/.17HMR, etc.). Not to mention foreign manufacturers like Aquila, RWS, Norma, Ely, SK, Wolf, and many others.

    Those production lines are used only for rim fire. Winchester built a new plant in Mississippi and it only produces rim fire, until the next expansion includes additional center fire and some military grade ammo. Rim fire lines cannot be converted to center fire unless the company wants to shut the plant down and completely retool.

    Now, if all the major companies quit making rim fire, they would have to close those dedicated plants and lay off the employees.

    The only bottle neck could be the availability of raw materials. Then, the ammo companies would prioritize raw materials to the most profitable lines.

    There is no shortage of raw materials to make ammo, other than propellant and priming mixtures, which are not the same for rim fire and center fire.

    The fundamental problem remains that far more customers are chasing a fixed number of rounds, many LGS now sell all their rim fire allocations on Gun Broker for higher prices than their regular customers would pay in store, and scalpers buy from retail stores then re-sell at gun shows, flea markets, and on the internet.

    So, there is plenty of high priced rim fire available on Gun Broker and gun shows, but not locally.

    When Academy lifted its restrictions on everything but .22LR ammunition, I saw the owner of a local "internet and gun show" ammo company clean out every round of CCI .22 Magnum, Monarch .30 Carbine, and Monarch 9mm that store had in stock. He paid cash, rolling off C-Notes to cover the cost.

    So, if you have seen all those brands of ammo for sale on one table at the gun show, then you'll know who your friend is.

    Anyone who would buy "Monarch" from any one but Academy should know better.
     

    F350-6

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    Their statement just confirms what I already believed. It's called a self fulfilling prophecy. I've seen it in other industries that had a shortage of a particular item, and we've even seen it with other calibers in the not too distant past.

    They had a source they always used and could get a truckload in short order. Let's say they used 1 truck per month to keep the math simple. They are now only receiving a pallet or two, which is well short of the full truck needed. So they place orders with several other sources hoping to get enough pallets to equal a full truck. This may mean they are ordering 10 trucks a month to get the 1 they need. If they are not buying directly from the manufacturer, then the distributor is likely doing the same thing. The distributor may be used to selling 20 trucks a month, but now has 100 trucks a month on order to try to keep the flow going. The distributor doesn't want 100 trucks per month and the association doesn't want 10 trucks per month, but that's what the manufacturer shows as orders on the books.

    The same domino effect works in reverse. When the distributor gets a big enough shipment that he still has inventory and the manufacturer calls and offers another 50 truck loads, orders get cancelled and trimmed down. Shortly after that, all the shelves have 22 again. And since so many have stocked up on the hard to find 22 and now have more than they need, the shelves will remain full, warehouses will start to fill up, and prices will drop back down.

    If CMP were called tomorrow and told they would get every round they had on order for the next 6 months from every different source they had ordered from, don't you think they would start back peddling on the amount? The actual size of the back order of 22 is inflated because of exactly what CMP and so many others have done. It will all come crashing down at some point.
     

    benenglish

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    I've seen it in other industries that had a shortage of a particular item...
    Reminds me of something. This will seem to meander but it'll come back home.

    In the days when AOL was considered *the* way to get on the internet, they (and all dial-up services like BBSs) had a problem. Historically, if you had 1 modem for every 7 members, you had enough. Only 1 in 7 subscribers was likely to be online at any one time. AOL got greedy and started letting that ratio slip. At 1 to 9, problems started cropping up but AOL quarterly earnings were taking a short-term spike since they weren't spending money upgrading their infrastructure. They pushed it to 1 to 12. At that ratio, they achieved significant cost savings and their earnings went up.

    At the same time, everything fell apart.

    Connections were so difficult to get that anyone who got one camped out on it and didn't let it go. Programs that did random stuff on AOL just to keep the connection alive were being installed by everyone. Even when AOL upgraded and got back to 1 to 7, it didn't help. No one trusted them any more. They had to waste millions of dollars and achieve a ratio of 1 to 3 before connections were easily available. Then things settled back down and they had far more capacity than they needed. Eventually, they became the owners of more obsolete analog technology than just about anybody, tech they basically wound up junking.

    I wonder if something similar will happen here, with .22LR.

    Everyone wants it so all that's bought is going into someone's storage closet somewhere. At some point, everyone who vowed to themselves to never get caught in a shortage again will have as much as they think it will take to tide them over. When this thing started, I had over 20K rounds of rimfire. I estimate I have ~7K at the moment. By the time prices fall back to where I think they should be, I'll most likely be completely out of rimfire ammo.

    But here's the thing - If everybody who hates this current situation decides to buy enough ammo to ensure they can ride out the next shortage, how soon will the ammo companies catch up? People aren't going to be happy with 7 users per modem...er...a brick or two in storage. Everyone is going to want 20K (or insert your own idea of an absurdly high number) rounds before they'll trust the distribution system again, trust that they can buy what they need to shoot on a regular basis.

    Given that a huge plurality of active shooters kept, pre-panic, just a few boxes in the house, what amount of stock will they consider sufficient before they can relax and just start shooting it again?

    I think you're right that it will all come crashing down at some point. However, I have a feeling that those production lines are going to be running full blast for a very, very long time before everybody feels prepared to weather the next shortage.

    I won't be around to see it, but I'd also bet that in 40 or 50 years estate sales will look like a bottomless pit of cheap .22LR ammo as the people who are stocking up now die off, having never shot their gigantic "rainy day" stashes.
     
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