America is more than a year into the latest ammunition shortage, and it appears supply will not catch up with demand anytime soon.
As store shelves lie barren and prices for the most popular ammunition hover at two, three, or even five times their pre-pandemic levels, manufacturers said they are still scrambling to bring enough product to market. They said they are still working through several years’ worth of orders that have already been placed.
“On certain products, we are certainly seeing backlogs that stretch out two years and beyond,” Brett Flaugher, president of Winchester Ammunition, told The Reload. “For those who shoot 9mm and 5.56 ammunition, which are both in high demand, it’s very uncertain how long it will be before people will consistently have ammunition readily available.”
“I’m looking at two and a half years’ worth of demand already on order,” Jason Hornady, vice president of Hornady Manufacturing Company, told The Reload. “So, I’m not seeing a slowdown for two and a half years.”
The shortage has become bad enough that many gun owners have simply stopped shooting for months on end. Some ranges have even run out of ammo to sell not just to customers who want to take it home but also those who want to use it on the range.
“People have been saying for a long time they haven’t shot guns because there’s no ammo to shoot,” Brandon Wexler, owner of Wex Gunworks in Delray Beach, Florida, told The Reload. “And they don’t want to shoot what they have right now.”
Retailers like Wexler said they still have trouble stocking their shelves. Lucky Gunner, one of the largest online ammunition dealers in the country, said it faces wait times to get ammo unlike anything it has experienced before.
“At this point, the total amount of ammo that we have on backorder from manufacturers is up year over year and sits at an all-time high for us,” Anthony Welsch, a spokesman for the company, told The Reload.
A Demand Problem
He said the issue was less about supply slowing down and more about demand continuing at a pace the industry hasn’t seen before.
“We’ve seen manufacturers continue to deliver product at steady intervals, but once it’s available for sale, it just doesn’t last long,” Welsch said.
Flaugher said the industry is simply struggling to keep up. He said three main factors have driven sales and continue to drive them beyond the industry’s ability to expand supply. The first was pandemic-induced safety concerns that drove millions of Americans to purchase guns for the first time. The second was the increased participation in recreational shooting and hunting during the lockdowns. The third was concern over new gun-control legislation after President Joe Biden won the 2020 election and Democrats who favor new restrictions took control of the Senate.
“We have certainly experienced unprecedented demand for all categories of ammunition over the past year—rimfire, centerfire rifle and pistol, as well as our shotshell products,” Flaugher said. “Over the past year, we’ve seen more than 21 million firearms sold, with over 9 million to first-time gun buyers. This is an incredible number. Overall, more than 52 million people in the U.S. participate in the shooting sports, which is actually 2.5 times higher than the number of people who golf.”
Hornady estimated demand jumped to a degree that most industries could not keep up with, let alone a centuries-old one built around physical manufacturing.
“If General Motors or the NFL, or you pick the industry, all of a sudden had 9 million new customers, how would they react? What would they do?” he said. “I mean, if the NFL all of a sudden had 9 million more people who want to go to games, what the hell are they gonna do? They’d have to build new stadiums. If they had to build new stadiums, how long is that going to take?”
And he said the surge only got worse as the year went along.
“Last year, we were up 30 percent-ish,” Hornady said. “Our whole industry was up 30 percent-ish. In the short term, you do what you can to maximize hours and maximize what you can. We got that 30 percent, and now the market is asking me for another, not just 30 percent, it’s asking for 80 percent.”
Numbers from one of the world’s largest ammo makers back up Hornady’s estimate.
Ammunition sales are the largest part of Vista Outdoor’s shooting sports business which, in turn, is the largest segment of the publicly traded company. Vista’s combined ammunition brands, including Federal Premium and newly acquired Remington, represent the largest share of the commercial market in the United States. Vista Outdoor did not agree to an interview with The Reload but did provide links to the company’s latest earnings reports, which show its sales were up more than 27 percent in the past fiscal year. Sales increased even further in the quarter that ended in March 2021.
“Sales increased 37 percent to $403 million compared with the prior year quarter, primarily driven by strong demand for commercial ammunition and hunting and shooting accessories,” the company said in a statement.
Like Winchester, Vista said it expects “continued increased demand” for ammunition due to the pandemic and political atmosphere in the United States. It said its customer base had expanded as well.
The company said in its SEC filings that the broadened consumer base “has resulted in a much larger total addressable market opportunity for the industry and for our company. We expect to see continued increases in participation as consumers look to local outdoor activities as a substitute for travel and other competing pursuits impacted by the COVID-19 pandemic.”
No Easy Fix
Hornady said the industry is already at max capacity, and increasing supply is difficult.
“I can promise you, even though they’re my competitors, every guy I know in the ammo business is trying to make as much as possible,” he said. “We don’t want to make 30 percent more. We want to make 50 or 100 percent more. And every one of us wishes right now we had an extra factory sitting around ready to go. But that’s not very practical.”
Spinning up a new factory involves buying dozens of specialty machines and custom installing them into a new space. It’s a process that costs a great deal of money and can take up to a year. Hornady Manufacturing Company had actually finished building a new factory in the lead up to 2020.
“We just built a new factory 18 months ago, which we moved into and more than doubled our space,” Hornady said. “We’re very rapidly filling the space we have. We were doing that whether there was an election, a pandemic, or a riot. We were already planning to grow.”
But the problem for manufacturers who are considering building new plants is uncertainty about where demand will ultimately settle out. If a company like Hornady, which has more than 500 employees, bets big on building another new factory and demand flattens back out before it’s finished, they could lose millions and be forced to lay people off. That’s why Hornaday relies on long-term plans instead of trying to react to the peaks and valleys in demand.
“I remember my father having to lay people off as a young person,” he said. “And that is something I don’t want to do. I want to keep everybody busy as long as we can. That’s important to us.”
Neither Winchester nor Vista Outdoor provided details on whether they planned to open new factories in the coming months or years.
Prices on the Rise
The imbalance of supply and demand has dramatically affected ammo prices. But it’s not just the reduced supply of finished rounds creating the problem. It’s also the reduced supply of basic materials being felt across many industries, including construction and computer chip manufacturing.
“The unfortunate part is we had to take our first mid-year price increase across the board starting June 1 of this year, and it was roughly a 10 percent increase,” Hornady said. “But we didn’t have a choice. Material costs are through the roof. Copper was $2.45 a pound a year ago. Today it’s trading at $4.50. And that is, in my career of 51 years, the all-time high. We go through several hundred pounds of copper a month. Zinc is the same way. Steel is the same way.”
Hornady had bought eight months of supplies for ammunition making when the pandemic began to make sure they could keep going regardless of where the market went. But shortages have popped up where the company never expected to see them.
“Where we’ve been caught off guard is things like tape and cardboard,” he said. “There’s a cardboard shortage right now. The other one is freight. There is a definite freight shortage occurring in the United States and, actually, globally too. Even just truck freight is overwhelmed and in short supply.”
Wexler said he’s gone from selling 9mm ammunition, one of the most popular handgun rounds in the world, for about 22 cents per round to 60 cents per round. And he’s actually undercutting the rest of the market.
“I’ve seen 9mm at ranges for a dollar a round, straight up,” he said. “It’s ridiculous.”
Welsch said anyone “looking for a specific load or bullet” is going to face long waits or exorbitant prices.
Prices for the most desirable ammunition have been pushed beyond reason.
“We saw a case of 6.5 PRC, which right now if you have that it’s going like cocaine laced with gold, go for $1,800 the other day,” Hornady said. A case used to go for around $550.
A Summer Cool Down?
The onset of summer could offer a reprieve. Demand for firearms and ammunition has traditionally followed a seasonal pattern, with summer experiencing the lowest levels. If demand wanes as temperatures rise, manufacturers could get some breathing room.
“This summer should tell us a lot about what to expect moving forward,” Welsch said. “[The slowdown] could afford the supply side of the market a chance to catch up.”
Wexler said he’s already seen supply creep up a bit.
“I feel like some ammo is being put out there,” he said. “I’m not saying in any large amounts, but when you’re used to getting nothing, it’s noticeable.”
But neither man was confident things would return to normal. Welsch said even with a slowdown, “it would not be surprising to see hunters struggling to find some of the more niche rifle calibers this fall” because “supplies of .243 Winchester, .22-250, and .30-30 ammo are incredibly tight with little sign of change coming quickly.” Wexler said a self-perpetuating cycle of buying, shooting, and re-buying driven by pent-up demand makes it hard see when things get back to normal even after the ammo supply increases.
“It’s such a hard prediction,” he said. “I think the ammo that comes out, people are going to suck up because they want to build their supply, and they want to be able to shoot. And if they shoot, they’re going to need more ammo.”
Hornady was more certain and even less optimistic.
“This business is going to continue on the pace it is for the next 18 months to two and a half years,” he said. “That’s how long it’s gonna be before you walk in and find a box of .223, and come back tomorrow and buy a box of .223 or 9mm, or you pick the caliber.”