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A Message From Federal/CCI/Speer President Re: Ammo Demand


ltdmstr

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never thought for a minute that the ammo manufacturers were not making ammo.

To put that in forward, I am pretty sure they are making all they are able.

That demand is money on the table.

 

What I want is the components to make the ammo I want.

 

the ATF does not want me making primers and powder...

(I don't want that also.)  at some point, I have to train so I don't miss dinner.

 

miranda

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just hopeing the primer supplies come back around before we end up with any more rules and restrictions.

Seems at 1 time primers were just primers, order them although guns stores used to have them at fair prices. Then they became Hazmat,,, BUT you could get 70lbs under 1 hazmat fee... Thats alot of primers. But seems I am seeing now there is a 20lb max.

 

The thing about the gun stores is so many of them never lowered their prices back down when they became regularly available again after about 2010.  Seems primers were $13-$15 for a long time till about 2008 or so, then jumped to 30 locally which shortages.... Online prices eventually came back down to the teens, yet the stores stayed over 30 a box some of them 40 a box..  Then probably wondered why they didnt sell many.

Although do have to say I also never saw any reduction in prices on bulk bullets.. The original story was lead prices skyrocketed,,, problem was when they plummeted, prices never came back down..  A new market price was set.

Supply and demand. I suspect the dealers have found out what folks will pay and we probably will never see $20 primers again. Suspect we wont see $30 primers.

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prices have to stabilize a bit before sales and rebates and coupons.

 

The prices of most supplies were ramping downward...

what I think happened is that far fewer people were willing to _make_ bullets

after buying the cheap ones... and now the buyers are debating the merits of both paths.

 

that is not a clear option for primers and powder. 

AND the brass cases are a bit specialized

in terms of making them for want of dies and presses

of all of it, the cases are the hardest to make. 

 

In terms of we who want components, the manufacturers of primers/cases/powder/bullets/ammo

look at the needs of the reloading hobbyists as opportunities lost.

That is that selling us all the parts makes them less money than selling boxes of ammo.

They consider selling us the parts is lost overall profits.

 

sad ain't it?

 

miranda

 

 

 

 

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I can hear the drool dripping from everyone that sees one of those large bins of ammo. 😃   I’d like to do a Supermarket Sweep in that place with a high speed fork lift!!! 😄🤣
Sort of makes you also wonder if all of these places aren’t holding back a little on shipping out so they can catch up a little. When a small batch shows up at a dealer everyone is like rabid dogs trying to get it. If you walk into the store and there’s rows and rows of supplies you kind of relax and don’t get quite so crazy. Just some random thinking. 

Edited by Farmer
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Hi Farmer,

yeah, such thoughts are fun and exciting.

 

I am not a big business manager and I knew a very few many years ago...

they will pretty much point out that if you have any competition,

you can't control prices by holding back stock...

You SELL SELL SELL when there is enough demand that you

don't have to worry your competition can under cut you.

bump the prices up a bit, skip the discounts and rebates.

make money.

run the factory 24/7 and

make money

in the most straight forward way you are able.

 

The guy in the vid said it clearly.

 

it may be a good time to invest in ammo making equipment...

If my crystal were a lot less coudy I think the investment should have been done

three years back.

 

me... I forgot to get rifle primers.

 

miranda

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"Any competition"

 

and there in lies the rub, the way things are consolidating, there basically isnt any. 
Hodgdon bought ramshot and Accurate which now basically lets them control everything domestic but alliant. Although they do import powders.

With Remington going to Vista, that narrows it down to just them and Win making primers. 

I imagine we will start seeing some imported primers soon. Be about the only competition. Just seems imported primers always seem to be hit and miss on quality and availability even in good times.

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... more on any competition.

 

once whoever buys up whoever is competition...

Yup.  prices are set at what ever they can arm twist...

 

Part of this is that we are not yet at that point.

If any company can import. we are back at lower prices.

 

as I recall at the end of the last shortage of primers and powder...

 S&B, Wolf, and VV showed up for about a month before we had all the others.

 

right now, I am surprised we do not have imported primers.

buuuuuut those same rules about making more coin selling ammo

are in effect for ammo importers.

 

miranda

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Is his working man attire to try and bond with the common man?  Their direct retail sale prices on federal's website are what the future holds in pricing or something more expensive after whatever backlog orders at that prior agreed pricing is exhausted.  The guy has the bulk of the ammo market under his control and 30CPR will be cheap for 9mm if we ever see it again.  Would be nice for him to get Remington back up and running which would increase his output.

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58 minutes ago, 18111811 said:

Is his working man attire to try and bond with the common man?  Their direct retail sale prices on federal's website are what the future holds in pricing or something more expensive after whatever backlog orders at that prior agreed pricing is exhausted.  The guy has the bulk of the ammo market under his control and 30CPR will be cheap for 9mm if we ever see it again.  Would be nice for him to get Remington back up and running which would increase his output.

 

Nobody has the ammo market under their control.  That's the whole point of markets--that they are driven by factors outside of the control of individuals.

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People can complain all the want about the shortages, pricing, etc.  Fact of the matter is, the ammo companies are doing a pretty darn good job under the circumstances.  All that equipment in that video is custom made stuff they have to build and maintain.  And it requires semi-skilled operators to run.  They're not loading on Mark 7s or Dillons with AmmoBots.  So, it's not like they can make huge increases in production in a matter of months.  And even if they could, why would they when they'll just be stuck with excess capacity when things return to normal, as they always have in the past.  As for primers, they're running flat out 24/7 trying to meet demand for ammo, have all the other components on had to do that, but have a limited capacity to make primers.  They'd have to be nuts to sell the primers instead of producing ammo.  That may not be to our liking, but it's a smart business decision.

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2 minutes ago, ltdmstr said:

People can complain all the want about the shortages, pricing, etc.  Fact of the matter is, the ammo companies are doing a pretty darn good job under the circumstances.  All that equipment in that video is custom made stuff they have to build and maintain.  And it requires semi-skilled operators to run.  They're not loading on Mark 7s or Dillons with AmmoBots.  So, it's not like they can make huge increases in production in a matter of months.  And even if they could, why would they when they'll just be stuck with excess capacity when things return to normal, as they always have in the past.  As for primers, they're running flat out 24/7 trying to meet demand for ammo, have all the other components on had to do that, but have a limited capacity to make primers.  They'd have to be nuts to sell the primers instead of producing ammo.  That may not be to our liking, but it's a smart business decision.

 

I think they would expand if they could, just look at what the president said. They have hired and trained hundreds of employees.  And with 7 million new shooters, some, if not all, of this shift in demand is here to stay.  I can't tell you what the future will look like, but I've never seen an inward shift in demand for these products.  Sometimes it shifts outward faster than others, but even years from now when they catch up, there will be another political event that shifts demand rapidly outward again.  It never goes back.

 

People above, even, are making comments about the mergers of companies as if the companies are colluding to drive prices up.  But even with the doubling or more of primer prices in the last 15 years, no new entrants to the market emerge to extract some of that "excess" profit.  The reason for that seems simple to me--a new entrant can't make a profit even at the higher prices we're seeing an paying.

 

Me personally, I'd be happy to pay higher prices if the products were available.  I think it's nuts that prices don't go up in times like this and the shelves just go bare for months or years at a time. That isn't putting the products to their highest and best use--it's just feeding the flames.

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Also have to figure in the safety factor. Some people think you can just speed things up and crank out more per hour. With explosives we all know it just doesn’t work that way. Getting raw materials is always a concern too. 

Edited by Farmer
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uh...  chemistry is my idea of fun,   I mostly cook food in the kitchen

and I like making dies to form copper fittings.

After making a bullet collator I thought the ammo makers must have better.

so I have a wide variety of skills useful for making all that goes into ammo.

 

From what I understand of energetic chemistries is that they vary somewhat

in the resulting...lets call it a compound.  it has to be tested for performance.

 

to sew this together...

it takes a lot of different skills to come together.

some one who knows brass formulas and forming tools/dies

an energetic chemist

a tinker to make odd machinery

it is a good idea to add someone who knows all the above

to create the process controls if you have any complicated interactions

an automaton as it were.

 

then you create machines (Tinker)

to assemble the compound (chemist)

into the formed cup (brassy soul)

and to set the anvil (see brass soul for tools that may also include a tinker)

 

all that to make just primers...

 

do it again to make ammo...

 

You will want it all automated because

after paying all those folks you will need a lot to sell...

 

I looked into how to automate just making the bullets.

it is not difficult.

 

making primers is harder.

so I can understand if the machines are a bit expensive or rare.

given the last few shortages I am a little puzzled that

a few extras were not created in expectation of future need.

It was both powder and primers in past shortages.

so it looks like powder production capacity was increased, perhaps.

 

a fair warning here, If you say you are willing to pay 50 bucks/K for primers

that is what you will pay...

 

miranda

Edited by Miranda
typo
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One thing I would like to know is cost increases at the retail distributors. What are supposed reputable online ammo distributors have really jacked up the prices. Does the new cost of $0.60 a round for 9mm reflect the increase in costs the distributors are seeing or are they just gouging us customers?

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13 minutes ago, Chillywig said:

One thing I would like to know is cost increases at the retail distributors. What are supposed reputable online ammo distributors have really jacked up the prices. Does the new cost of $0.60 a round for 9mm reflect the increase in costs the distributors are seeing or are they just gouging us customers?

 

Supply and demand might model what you're talking about.

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I think they likely made little money on common calibers in the past and would drop ship from the manufacturer to grab a little profit without much work. Last winter I was buying federal black box 9mm for 12-13 cents per round from PSA and Natchez with the federal rebates. I can't imagine much money is made by either party at that price and with the added employee costs and downtime this year coupled with the need to add more machines, costs have just gone up.

 

And frankly, if I owned a company why would I not increase prices to the point where they don't sell out within seconds knowing full well a lot of people buying at the lower prices are turning around and selling it for 3-5x what they just paid. I get that people wish prices would be 'normal' but who knows, maybe this is the new normal and all sellers will eventually raise prices to where they are now.

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