Steve, as some of your readers have been noting, that the availablility and prices of many commonly used ammunition types and calibres have experienced sever changes in the last 12 - 18 month period. Here is a somewhat condensed version of the major reasons and factors which have created this situation and what can be expected over the coming months and in some cases years.
The ammunition bought by and sold to consumers on the US Domestic market fall into two general catagories and come from two sources. Ammunition both in the US and worldwide is either manufactured for Military or Commercial use. Military type ammunition which is bought by civilians either comes from government stocks which have been sold and made available as "SURPLUS" or more recently, as here in the US, De-Militarized then placed on the commercial market for consumers to buy.
All Military Surplus ammunition has been held in reserve stockpiles for a varring number of years then declaired to be excess to the combat and training needs of a nation's military forces. Once this stockpiled ammunition is either tested and found to fail the required government specifications or reached a pre-set number of years to be held in reserve it is released for sale to the civilian consumer market or as is the case in the US, De-Militarized then released for sale to consumers.
This De-Militarization process involves disassembling the ammunition and substituting commercially made and specification gunpowder in place of the military spec gunpowder. Why you ask is this done? Ask the UN and former president Clinton. More on this factor when we look at the reasons why shortages are occuring.
Military and Commercial type ammunition differ as to the type bullets (projectiles) which are used in their manufacture. Because of certain international conventions (ie the Geneva accords among others ) only Full Metal Case solid point bullets can be used. These types of rounds of ammunition are commonly refered to as Full Metal Jacket ( FMJ ) in military speak.
Commercial ammunition uses FMJ, Solid point, Soft point, and Hollow point type projectiles. Both FMJ and Solid point type bullets are mainly used in practice shooting while the Soft point and Hollow point types are used in hunting and self defensive applications.
Now let us examine why certain types and calibres of ammunition are in short supply in various parts of the domestic consumer market currently. For those who purchase ammunition of the Military Surplus type, shortages have been occuring as long ago as late summer 2005. In some areas of late, shortages of the Commercial types are now occuring.
A number of factors are contributing to this situation. First, the War On Terror has created a tremendious demand for ammunition in the following military calibres 5.56mm, 7.62x39, 7.62Nato, and 9mm pistol. TIME magazine in a Photo Essay found in their August 11th issue ( Link <Link to Article Source
Let us consider the Military Surplus / Military type ammunition shortage situation by calibre to make it a little easier to understand.
The shortage of 7.62x39 ( AK 47 ) ammunition from such commercial sources as those in Russia is the result of huge and repeated Russian government contracts since mid 2005. An additional contributing factor is that the US government has also been purchasing ammunition from these same russian companies thus vastly reducing at times the supply available to place on the consumer market. It was expected that this situation would end and by late 2006 the supplies would return to the pre-shortage levels. It remains to be seen if this will occur.
Shortages of 5.56 and .223 ammunition ( these are NOT the same calibre) are the result of the huge demands from the War On Terror as well as increases in the training needs of the participating nations. Yet anothor factor entered the picture as a result of the public's concern over the experiences observed during and following the RITA and KATRINA episodes in the late summer of 2005. Following these storms military style firearm and their associated calibre ammunition sales have experienced a sharp increase thus raising the consumer demand for this calibre at the same time Military demand is at its hight. A third factor contributes to the continuing shortages, that of the loss of PMC's production to the above noted US 50 cal. ammunition contract.
With regards to the 7.62Nato ( AKA 308 cal. ) shortages on the consumer market the above noted War On Terror factor also applies. Here however, is where another factor has made its appearance; the UN's efforts to reduce and eventually cut-off all surplusing of Military munitions and firearms. As noted above, the Clinton administration mandated that ALL US military ammunition sold off as surplus must first be De-militarized before being released for consumer sales. This is in support of the on going efforts by the UN to first stem and then stop the proliferation of arms and ammunition to terror and guerrilla groups around the world. Well, the UN is beginning to achieve some success in gaining compliance from third world nations such as South Africa in these efforts. In fact as of June 2006 So. Africa is no longer placing surplus ammunition on the worlds Military Surplus Market. For those who have a need to use such inexpensive ammunition for recreational or preparedness purposes, this removes the last current available Military Surplus source of this calibre for the forseeable future leaving only commercial sources at much higher prices. More on this later in our examination.
On the subject of Commercial shortages, High on the list of causes is the loss of production for the consumer market to fill government contracts. With these contracts involving the not only the big three Federal, Remington, and Winchester-Olen but other manufacturers like Black Hills and HSM it becomes obvious that when military contracts reduce the production available for consumer type ammunition supplies and availability will suffer. The resulting price increases are also having their effect on the amount of ammunition retailers can afford to stock.
More could be said on the causes of the shortages but for now let us turn our attention to the price increase situation.
All of you have seen the jump in fuel costs and commodity prices. Well, each time goods are moved the added cost of fuel price increases adds to the cost of everything we purchase, ammunition included. One should also note that all items made from Petro-chemicals have also experienced increases in prices. So, the plastic containers, packaging, primers, gunpowder, etc. have all become more expensive. It is easy to see the cumulative effect such cost increases are having on prices and will continue to until the situation changes.
Materials cost increases along with increases in transportation cost are not the only factors exerting heavy pressure on prices and supplies. When upward pressures on prices from limited availability of supplies are coupled with reduced affordability of retailers to restock their shelves combine to not only push prices up but the cut in net profit (bottomline ) of the retailer resulting from lost sales result in the reduction of their capital available to aquire new stocks of ammunition.
It is a vicious cycle.
What can or should one do in responce to these conditions? First, one should make a plan as to what types and calibres of ammunition they expect to need over the next few months and years. This planning must take into consideration the absence of availability of some types of ammunition in the future and the need to aquire the needed supplies of those types immediately before they cease to be available.
The next obviously step would be to seek out the most economical priced deals in order to reducing one's out of pocket costs. Large quantity purchases are one excellent method of attaining a lower per unit cost. Group buys are another.
The age old advise to not hesitate certainly applies now with the conditions in the ammunition market as a whole but even more so with regards to Military type ammunition.
Hopefully this information will assist those concerned with this situation to take prompt action to aquire and at the same time save money the ammunition they need.
My thanks to Steve for the opportunity to help make clear what has and continues to go on in the ammuniton market.
