Bruce Posted January 21, 2008 Share Posted January 21, 2008 http://www.kitconet.com/charts/metals/base...ad-6m-Large.gif Crazy chart. So prices went up with the excuse being "lead prices are skyrocketing". So, when do we see bullet prices come down? Link to comment Share on other sites More sharing options...
Bob Hostetter Posted January 21, 2008 Share Posted January 21, 2008 Good luck, copper prices are still up aren't they? Link to comment Share on other sites More sharing options...
Bruce Posted January 21, 2008 Author Share Posted January 21, 2008 Good luck, copper prices are still up aren't they? http://www.kitconet.com/charts/metals/base...er-6m-Large.gif Looks like copper is off 12-15% from its high, but it is still waaaaaay higher than its 5 year average. Link to comment Share on other sites More sharing options...
J-Ho Posted January 21, 2008 Share Posted January 21, 2008 I'm sure prices will come down a little, but remember shipping raw materials is still a lot higher than it used to be as well. Link to comment Share on other sites More sharing options...
EricW Posted January 21, 2008 Share Posted January 21, 2008 (edited) Uhh...when they manage to buy new inventory of raw materials at the lower prices? Maybe I'm the only one noticing, but transportation costs seem to be having a huge impact on the cost of goods - with no end in sight. I'm seeing the price of everything skyrocketing at the grocery store. I'm talking at least 20% across the board, but with prices going up 50% in some cases. It seems a little harsh to beat on ammo & component manufacturers non-stop. We enjoyed very attractive prices for years when commodity prices were much lower. The ammo/component manufs don't control commodity prices or the exchange rates. It would seem more appropriate to contact your local congress-critter for relief in those areas. Edited January 21, 2008 by EricW Link to comment Share on other sites More sharing options...
kimel Posted January 21, 2008 Share Posted January 21, 2008 What is the incentive for them to lower prices even if their raw materials cost less? They can just increase the profit margin...at least until the first big one starts dropping cost. Don't forget the the majority of the companies are publicly held so they are going to do things to make the stock holders happy...like increasing the bottom line. And we all know price fixing never occurs; especially with petroleum products. I think the best we can hope for is a leveling off of prices for components. Link to comment Share on other sites More sharing options...
JThompson Posted January 21, 2008 Share Posted January 21, 2008 What is the incentive for them to lower prices even if their raw materials cost less? They can just increase the profit margin...at least until the first big one starts dropping cost. Don't forget the the majority of the companies are publicly held so they are going to do things to make the stock holders happy...like increasing the bottom line.And we all know price fixing never occurs; especially with petroleum products. I think the best we can hope for is a leveling off of prices for components. Agree with K here... why would they lower them? Even if it's the guy making the bullets... most if not all will take the $$ and put it in their pocket. The might give us a slight break, but being in business for myself... I can't say I would give it back either. Link to comment Share on other sites More sharing options...
EricW Posted January 21, 2008 Share Posted January 21, 2008 I'll bet you a pitcher that prices come back down as costs come back into line. Ammo is a commodity like anything else. Someone will lower their prices in order to gain market share. It will just take time for the costs to trickle through the economic cycle. And yes, manufacturers will probably leave prices up for a bit in order to offset what they've been eating in lower margins. And yeah, maybe it will be like gas, where the retail price didn't go up for a decade and a half. But I'm betting on prices retreating for things like pistol bullets and shotgun ammo. There's too much risk of killing the demand entirely. Link to comment Share on other sites More sharing options...
Flexmoney Posted January 21, 2008 Share Posted January 21, 2008 Big margins are great...when sales are high. High sales/prices with good margins...will bring more competitors into the market place. For example, I am considering doing cast bullets for myself...and those that are local that might be willing to shoot cast...at less than half the cost of jacketed. (And, I have a dealer account with at least one of the said bullet manufacturers..and have bought truck loads of bullets in the past). It is apparent, just from reading the forums, that shooters are looking for alternatives...after being very good customers to their normal bullet company over the years. Link to comment Share on other sites More sharing options...
G-ManBart Posted January 21, 2008 Share Posted January 21, 2008 Uhh...when they manage to buy new inventory of raw materials at the lower prices? Maybe I'm the only one noticing, but transportation costs seem to be having a huge impact on the cost of goods - with no end in sight. I'm seeing the price of everything skyrocketing at the grocery store. I'm talking at least 20% across the board, but with prices going up 50% in some cases. It seems a little harsh to beat on ammo & component manufacturers non-stop. We enjoyed very attractive prices for years when commodity prices were much lower. The ammo/component manufs don't control commodity prices or the exchange rates. It would seem more appropriate to contact your local congress-critter for relief in those areas. Yep, transportation costs definitely are putting a hurting on the price of many good. That has to hurt bullet manufacturers since their raw materials are so heavy. Fuel prices alone have to be adding a considerable amount to the end price of things like bullets. I expect we'll see a slow drop in the price of bullets, but I think everyone needs to remember that competitive shooters account for a very small percentage of ammunition component usage. Pick any ammo manufacturer and they probably load more ammo in a month than all the competitive shooters combined load in a year. Ammo manufacturers are going to see a drop in their component prices before normal retail customers will...economy of scale it would seem. Link to comment Share on other sites More sharing options...
Middle Man Posted January 21, 2008 Share Posted January 21, 2008 (edited) What most folks (read consumers) fail to realize is the impact of industry consolidation. Several big ammo players now answer to stockholders and their bean counting minions. Take this small case study: Hornady which is privately held has had the least amount of price increases over the past three years. Hornady also controls almost their entire manufacturing process, they make the brass and the bullets. Cor Bon, also privately held, has had very low percentage price increases compared to the big boys. Cor Bon does not control their entire process and is dependent more on outside vendors. Now Federal, CCI, and Speer are all ATK brands and as such are beholden to stockholders in the end. Who do you think bought the most raw materials or the locked in a contract at lower prices for the longest supply of raw materials? The public company sure didn't...as a result every time raw material costs increase, their cost of production goes up and we see 4% to 8% quarterly increases at the wholesale level. Want to bet which manufacturer only buys a quarter's worth of raw material? You can bundle this little Econ 101 nugget with the fact that ball ammo prices were artificially depressed in the mid 1990's as a few insiders got paid big bonuses on production numbers rather than if they actually made any profit off ball ammo and rimfire sales. Once one manufacturer did it they all had to follow suit or lose out on market share. Add the geo-political aspect of dwindling supplies of surplus military ammo and you have a near perfect storm...if there are greater numbers of conflicts those entrepreneurs that have the stocks of surplus will begin to sell to the highest bidder. The US commercial market has not been the highest bidder in a few years now. In short, Virginia we'll never see $5.99 9mm ball again and there is no Santa Claus. My apologies for the rambling dissertation... Edited January 21, 2008 by Middle Man Link to comment Share on other sites More sharing options...
Sam Posted January 21, 2008 Share Posted January 21, 2008 Thank you MM, I enjoyed your explaination. I especially liked the part about how a few insiders got paid big bonuses for reaching ill advised goals. (Next time we get a region-wide electrical blackout remember that "big ammo" isn't the only industry that knows how to play "gut-the-company-for-my-bonus".) It's pretty hard to discuss prices without bringing up the subject of money. A bullet still means a bullet. A gallon of gas still means a gallon of gas. A dollar however, means....... Well. I'm not sure if I know what a dollar means anymore. Now, we learn that the brain trust in the Delta Charlie Zone is planning to print another $800 per taxpayer and send it out under the guise of economic stimulus. Why? So we can go out and buy more Chi-Com trinkets? Or maybe we can use the $1,600 per household to put down on a $2,500 car from India? "Those who refuse to learn from history are doomed to repeat it." Link to comment Share on other sites More sharing options...
Jake Di Vita Posted January 21, 2008 Share Posted January 21, 2008 This is what happens when money is produced with no backing... I really wish more people would understand that the solution to inflation is not more inflation... Link to comment Share on other sites More sharing options...
Middle Man Posted January 21, 2008 Share Posted January 21, 2008 A dollar however, means....... Well. I'm not sure if I know what a dollar means anymore. Somewhere between three-fourths and two-thirds of a Euro... Link to comment Share on other sites More sharing options...
Rocket35 Posted January 21, 2008 Share Posted January 21, 2008 I think the bullet prices will come down as well. Maybe not what they were, but more in line. Those that don't will be loosing a part of the marget share as stated above. Link to comment Share on other sites More sharing options...
J-Ho Posted January 21, 2008 Share Posted January 21, 2008 What most folks (read consumers) fail to realize is the impact of industry consolidation. Several big ammo players now answer to stockholders and their bean counting minions. Take this small case study: Hornady which is privately held has had the least amount of price increases over the past three years. Hornady also controls almost their entire manufacturing process, they make the brass and the bullets. Cor Bon, also privately held, has had very low percentage price increases compared to the big boys. Cor Bon does not control their entire process and is dependent more on outside vendors. Now Federal, CCI, and Speer are all ATK brands and as such are beholden to stockholders in the end. Who do you think bought the most raw materials or the locked in a contract at lower prices for the longest supply of raw materials? The public company sure didn't...as a result every time raw material costs increase, their cost of production goes up and we see 4% to 8% quarterly increases at the wholesale level. Want to bet which manufacturer only buys a quarter's worth of raw material? You can bundle this little Econ 101 nugget with the fact that ball ammo prices were artificially depressed in the mid 1990's as a few insiders got paid big bonuses on production numbers rather than if they actually made any profit off ball ammo and rimfire sales. Once one manufacturer did it they all had to follow suit or lose out on market share. Add the geo-political aspect of dwindling supplies of surplus military ammo and you have a near perfect storm...if there are greater numbers of conflicts those entrepreneurs that have the stocks of surplus will begin to sell to the highest bidder. The US commercial market has not been the highest bidder in a few years now. In short, Virginia we'll never see $5.99 9mm ball again and there is no Santa Claus. My apologies for the rambling dissertation... THIS IS NOT SUPPOSED TO BE POLITICAL!!!!! How dare you say there is no Santa Claus. Link to comment Share on other sites More sharing options...
Bruce Posted January 21, 2008 Author Share Posted January 21, 2008 Uhh...when they manage to buy new inventory of raw materials at the lower prices? Maybe I'm the only one noticing, but transportation costs seem to be having a huge impact on the cost of goods - with no end in sight. I'm seeing the price of everything skyrocketing at the grocery store. I'm talking at least 20% across the board, but with prices going up 50% in some cases. It seems a little harsh to beat on ammo & component manufacturers non-stop. We enjoyed very attractive prices for years when commodity prices were much lower. The ammo/component manufs don't control commodity prices or the exchange rates. It would seem more appropriate to contact your local congress-critter for relief in those areas. Much of the grocery price is commodity price driven. Wheat, corn, soybeans...all are a multiple of just a couple years ago. When you start stuffing $4.00+ corn down a hog's throat---the price of chops goes up---and will skyrocket when hog farmers get tired of losing money on hogs due to feed prices, or, get put out of business because of the same. Transportation cost is a piece of it, but it does not account for the 20%-50% increase in food goods of late. But, relax, gov.org says there is no inflation---so there is no inflation. Link to comment Share on other sites More sharing options...
mpolans Posted January 21, 2008 Share Posted January 21, 2008 I know of at least one person in the DC area who is planning on casting bullets to shoot instead of buying them because of the price increases. He might start selling some too. Link to comment Share on other sites More sharing options...
hitman Posted January 22, 2008 Share Posted January 22, 2008 I deal with several bullet manufacturers and some go up and down every day, week or month on lead prices. That effects the buller prices as well. 1 to 5 bucks per K up or down avg. Link to comment Share on other sites More sharing options...
Chills1994 Posted January 23, 2008 Share Posted January 23, 2008 Okay, granted it was Glen Beck, but he tossed about the "D" word last week. "D" as in Depression. Yeah, I know, it was Glen Beck. (tinfoil hat mode) If you have 2 hours to kill, watch this very conspiracy theory laiden movie here: http://www.zeitgeistmovie.com/ Like I said, wear your tinfoil hat. I will give the movie this much though. I learned more about the Fed (reserve) from that movie than I did during at least one high school econ class and two college level econ classes. Ah... the things they don't teach you about in school.... (tinfoil hat mode off) As far as bullet prices go, it seems like everything has doubled. Man, I really liked buying those Berry's plated bullets for 72 a thousand at Cabela's. Link to comment Share on other sites More sharing options...
JimmyZip Posted January 23, 2008 Share Posted January 23, 2008 Hearing all these old prices and having just started reloading since'87, reminds me of all the times out surfing, "Hey man, you should have been here yesterday." But the lead I bought in December was the same price I payed for jacketed in August. JZ Link to comment Share on other sites More sharing options...
Front Man Posted January 23, 2008 Share Posted January 23, 2008 I got 20 minutes into it; I'll watch the rest when I get home. Sounds "very interesting". Anyone read "Jeykel Island'? FM Link to comment Share on other sites More sharing options...
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