Sunday, December 22, 2013

• Why We've Had an Ammo Shortage

Obama conspiracy? George Soros? Overzealous Preppers? Nope. Here are some numbers and the facts behind why you can’t find the cartridges you want.

NRA/American Rifleman (Excerpts) - Trying to explain why there has been a prolonged shortage of ammunition is like attempting to understand why people line up outside stores in anticipation of Nike launching its latest basketball shoe or Apple its latest iPhone. A run on a product—or in this case an entire category of products—is the result of a perfect storm of factors.

The tax figure is a useful way to understand overall sales trends. So let’s look at the numbers. In 2000 the U.S. Department of the Interior reported that excise taxes on ammunition generated $68 million, whereas in 2012 that figure was $207 million. With inflation taken into account, that’s approximately a 129 percent increase in 12 years. A lot of that growth has taken place in the past few years. Between 2007 and 2012 excise tax money generated from ammunition sales almost doubled from $108 to $207 million. Tax dollars from ammunition sales were stable from the mid-1990s through 2006, but then started to climb fast as gun sales began surging.

To understand what $207 million represents, it’s helpful to know that in 2012 the NSSF estimated the size of the consumer rimfire, center-fire and shotshell market at about 9.5 billion shells and cartridges. That includes U.S. production in addition to imports minus exports. Last October the NSSF predicted there would be more than 10 billion cartridges and shells made for the American consumer market in 2013 as manufacturers attempt to keep pace with consumer demand.

Can you imagine what would happen if the demand for your other favorite products doubled in five years? Wouldn’t they likely be more expensive and harder to find? Also, ammunition production can be difficult to increase quickly because it takes investment in expensive machinery and additional personnel to increase production. Making more ammunition also requires companies to purchase more raw materials in a competitive and international marketplace.

Some gun owners have been speculating that this supply-and-demand problem is related to large government purchases. A few people have even hypothesized that the Obama administration might see reducing the ammunition supply via massive government buys as a clever way to enact gun control.

The DHS noted that it buys in 
bulk to save money, but overall its 
purchases have actually gone down.

The DHS is a massive umbrella agency that includes more than 70,000 law-enforcement personnel across multiple agencies and more than 40,000 uniformed members of the military in the U.S. Coast Guard. The ammunition the DHS buys is used to support law-enforcement operations as well as routine qualifications and training for U.S. Customs and Border Protection, the U.S. Secret Service, the Transportation Security Administration and many other federal entities.

Nevertheless, worries spread in some circles on the Internet when it was reported that the DHS had a contract for a maximum of 450 million rounds of .40-cal. jacketed hollow-points to be supplied during the next five years. Rep. Lynn Westmoreland (R-Ga.) investigated the contract and published a press release noting that, given all the agencies DHS buys for, “450 million rounds really isn’t that large of an order.” Westmoreland’s staff calculated that if the “DHS were to purchase all 450 million rounds over 5 years, then that would equate to only about 1,384 rounds of ammunition” per year per law-enforcement officer.

Some nevertheless wondered why the DHS needs hollow-point ammunition. The answer, says DHS, is simply that hollow-points are the defensive ammunition of choice. A little reporting shows this is certainly the case for federal, state and local law-enforcement officers—as well as for many private citizens

Sen. Tom Coburn (R-Okla.), meanwhile, asked the DHS for a breakdown of how much it spends on ammunition per agency and how much it uses annually (see table, opposite). The answers Coburn received deflated gun owners’ worries about government malfeasance. The DHS noted that it buys in bulk to save money, but overall its purchases have actually gone down. In 2010 the DHS purchased 148,314,825 rounds. In 2011 the DHS bought 108,664,054 rounds. And in 2012 the DHS purchased 103,178,200 rounds of ammunition.

Ammunition manufacturers back up the DHS’ explanation. For example, Federal Premium Ammunition, which has 1,400 employees making ammunition in Anoka, Minn.—some for federal contracts—published a statement saying that the rumor DHS is “buying excessive quantities of ammunition, thereby restricting availability to the commercial market,” is a “false and baseless claim.” Federal Premium says, “The Department of Homeland Security contract makes up a very small percentage of our total ammunition output. This contract is not taking ammunition away from civilians. The current increase in demand is attributed to the civilian market. Our production volumes on government contracts have been stable since the mid-2000s.”

Scott Blackwell, president of Freedom Group, an American firearm manufacturer holding company that includes Remington, Bushmaster and DPMS, said, “Most of the ammunition we make at Remington goes to the consumer market. Our supplies, therefore, haven’t been affected by government contracts. It’s clear to us that any lack of supply in the marketplace has been from consumer demand for our quality products. To meet this increased demand we’re investing and growing."

Steve Hornady, president of Hornady Ammunition, told “We’re working as hard as we can to get as much out as possible … . People walk into the store, they don’t see as much as they want so they take everything they can get. The next guy who comes in can’t get anything, so he panics … But there is no government conspiracy.

Why Has Demand Gone Up?
There are now more than 5 million women participating in the shooting sports, an increase of 46.5 percent since 2001, according to the NSSF. The number of gun owners in America surpassed 100 million a few years ago and all indicators show it is still growing. More gun owners means more ammunition being shot. Also, as the most popular firearms being sold in recent years have been semi-automatic handguns and rifles, it only makes sense that these gun sales would lead to more ammunition being purchased and shot.

There are a lot of other numbers tracking the growth of gun sales and gun ownership that have led to more ammunition sales. For example, July 2013 was the 38th straight month that the number of background checks called into the National Instant Criminal Background Check System (NICS) increased when compared to the same month the previous year.

Not every background check results in a sale, but NICS numbers are a good indicator for overall gun sales. Over the 10-year span from 2002 to 2011 there was a 54.1 percent rise in the number of NICS checks. In both 2009 and 2010 there were about 9.5 million NICS checks; in 2011 the number grew to 10.7 million; in 2012 it surged to 13.7 million; and as of this writing it looked like the number of NICS checks would break the annual record again in 2013.

You can also see this trend reflected in the number of concealed-carry permits in the United States. The number of people with concealed-carry permits has grown from fewer than 1 million in the mid-1980s to 6.8 million by the end of 2012, according to the NSSF. This increase has certainly resulted in the sale of more handgun ammunition.

It’s worth mentioning one silver lining to this surge in sales as a parting thought. As previously noted, every time someone buys a box of ammunition they’re paying a tax. This excise tax must be used for wildlife conservation projects, gun ranges and other such outdoor-related programs as mandated by the law. The revenue also must be sent to the states for these purposes—the federal government can’t use these funds except for some administrative purposes. So that $207 million raised from ammunition sales in 2012 is benefitting state wildlife departments, your gun ranges and more.