Supply and Demand and consumption

Nothing interesting in this post, just thinking out loud as I take a break from loading to fill my new Ammo cases.

I started loading after Sandy Hook and knew the pain of supply and demand, after things settled I bought anything and everything that was on sale and interesting. Now as things seemingly are full circle I find myself with:

Quantity and types of powder many people want

Stacks of primers that people can’t find

Shelves of Bullets that are unobtainable

Tubs and tubs of brass all clean and prepped

.... and I’m here assembling them into tiny units for myself that no one wants or could (should) use.

Doesn’t make much sense when you think about it. Anyway, back to the loading bench .

I've got a press. I've got a decent amount of brass for my M1 and my ARs. I've got limited powder, primers and projectiles. One of these days I'll get my act together!

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Production is an element of supply, and you are proving the theory that with an increase in price so too will there be an increase in supply.

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I liken it to buying Gold when it was $200/oz and making your own home brew Goldschläger, while gold is now $1800/oz. You can’t sell the brew, just consume it yourself to satisfy your appetite.

Makes little sense financially, but that appetite..

Consumption: I'll feel bad blasting a couple boxes of TulAmmo 5.56 that cost me $4ea two years ago, and now cost $20ea.
It'l feel like burning $20 bills in the fire pit.
Of course, I have enough reloading stuff to last at least 5 years, costing me $4-5 a box reloaded.
My only gold was bought about 1987, 1oz Mark Twain coin costing $350 from the US Mint.

How can there be a shortage of 556? We should always have mountains of that and the ability to crank out more than anybody can shoot...it is the stuff we fight wars with.

I am thinking about how the hospitals got overwhelmed in MD when the Corona was just starting. We had just 400 hospitalized and our capacity was wiped out with the need for field hospitals and trailer additions. It seems the hospitals, probably in order to maintain profitability, were always operating at near capacity...maybe like the ammo MFRS???

Blasting said:

How can there be a shortage of 556? We should always have mountains of that and the ability to crank out more than anybody can shoot...it is the stuff we fight wars with.

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Because we are fighting wars with it.

The civilian market production is different from military production.

Where there is excess military production, some of that can make it to the civilian market, ie Federal XM193.

gwfrench said:

Consumption: I'll feel bad blasting a couple boxes of TulAmmo 5.56 that cost me $4ea two years ago, and now cost $20ea.
It'l feel like burning $20 bills in the fire pit.
Of course, I have enough reloading stuff to last at least 5 years, costing me $4-5 a box reloaded.
My only gold was bought about 1987, 1oz Mark Twain coin costing $350 from the US Mint.

Click to expand...

I’m showing my privilege this weekend by consuming $2K of ammo (at today’s hyperinflation). Freedom and privilege is echoing throughout the valley

Pinecone said:

Because we are fighting wars with it.

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We're actually not really doing that much these days compared to a few years back.

The PROBLEM is that the US military has switched over to M855A1, and that stuff isn't being sold to civilians. Therefore, any Lake City overages of M193 and M855/SS109 are presumably from export production, and you'd think that makes up much less of their production than for domestic use.

I would think that they would make what M855A1 that they need to make, then make all the M193 and M855 that they can, as there is both the export market and the civilian market.

Excess M855A1 does them nothing.

I am a bit surprised they haven't been selling excess M855A1 or M80A1. Pretty sure it doesn't count as AP under the law. Best guess is something in their contract says they can't sell excess and they figure there isn't a decent enough market to make it specifically for the civilian market.

The US produces somewhere around 8 billion rounds of ammunition per year. Not sure how much the US military procures for small arms, but its small compared to the civilian market. That works out to something like 4000 rounds of ammunition for every active and reserve soldier in the Army. Pretty sure not every soldier burns 4000 rounds of ammo per year in training and combat use.

PS I found it, US military procures ~1.6 billion rounds of small arms per year. So the US civilian market is ~4x larger than the military market. Even if someone like Federal keeps some reserve capability for the military, the surge in the civilian requirements recent would overwhelm anything they have.

Plus some of it I am sure is a supply chain issue. If the ammo makers suddenly order deliveries 2-4x larger than what they had been ordering, I bet their supplies can't keep up with the raw materials either. The US for most industries has been just in time manufacturing for years to maximize profits. That means those factories don't have weeks and weeks of supplies on hand so they can just run an extra shift or two, and spin up a few idle lines or machines. And most are probably reluctant to make any big purchases of machinery. If the surge lasts 6 months, are they going to pay off a $20 million investment to stand up a couple more ammo production lines that are just going to go idled once the surge is past? I am sure many of them have recent memories of the huge demand that lasted a good 3 years or so, that then died WAY back the last 3 years.

I am sure some guys are expanding. I've heard a few of the really small guys (mostly component manufacturers) buying an extra machine or two and hiring on a couple of people to help them out. Probably all of the big guys have spun up any ideal machines or lines that they can and have hired on some people to run extra shifts if they can get the materials to run them. But if demand went up 2x higher than it was before, there is just no way they'd keep up with that.