Why Is Ammunition So Expensive?

Over the last year, ammunition prices have shot through the roof. The price of 9mm and other small caliber handgun rounds have increased by as much as 62 percent. There are plenty of theories explaining this “sudden” price escalation, from economics to politics to political economics. The Mystery of The Really Expensive Ammo is worth solving; a gun without ammo is nothing more than a very expensive blunt instrument for hand-held assault. So here’s a rundown of the most popular—if not logical or accurate—explanations for the high price of ammunition . . .

The military’s to blame

You don’t have to see the spent casings laying at the feet of U.S. soldiers in Marjah to know that the U.S. military is one of the world’s largest ammunition consumers. According to The Washington Post, American armed forces will use 1.5 billion rounds of small ammunition this year, triple the amount produced in 2001. That’s a lot of demand.

Yes, but— the U.S. military has an entirely predictable bullet burn rate, its own massive manufacturing facility and plenty of your hard-earned tax money. The ammo-challenged armed forces recently cut deals with the Brits, Israelis and good old Winchester to augment their ammunition supplies (for a premium, of course). None of these suppliers had to divert civilian ammo production or sales. So we can file the idea that overseas actions are sucking-up ammo under “another myth exploded.”

The Chinese Government’s to blame

The People’s Republic [sic] of China fields the world’s largest army, with over 2.25 million regular troops, 800k reservists and four million paramilitary soldiers. Even if you figure a thousand bullets per soldier, that’s over seven billion bullets. To say the Chinese are voracious ammo consumers would be like saying a great white shark has a bit of an overbite. Equipping the Red Army with bullets requires enormous amounts of copper, brass and lead. But again, it’s a predictable—and primary—consumption pattern.

That said, raw materials are an issue. Brass is fine; the market for the metal has more or less collapsed. Copper prices, on the other hand, have gone ballistic. Never mind the military; China is stocking up on billions of tons to build the country’s infrastructure and manufacture consumer goods (refrigerators, cars, cell phones, etc.). As the five-year chart above shows, Chinese demand has caused a huge copper price spike this year.

Lead? Same deal, only more so. In the last year, lead prices have climbed from .40 a pound to $1.20 (before falling back slightly). All of which means that China has rendered the raw materials needed to make American bullets more expensive.

Bush is to blame

In 2007, OSHA (the fine folks at the Occupational Safety and Health Administration) made a well-publicized attempt to change the rules on the sale and transportation of ammunition. The regulation (which would NOT have required ratification by elected officials) would have prevented retailers like Walmart from selling both firearms and ammunition. The NRA and other pro-gun groups mobilized to head the feds off at the pass.

After being inundated with letters, emails, and petitions, OSHA decided to delay the changes. But not before the prospect triggered a huge spike in demand, as gun owners stocked up on ammo.

Obama’s to blame I

Organizations like the NRA pushed hard back in 2008, positing that the election of Obama would result in the termination of our Second Amendment rights and a gun grab that would make post-Katrina New Orleans look like child’s play. To date, that hasn’t happened. What did happen: a large segment of the public began buying up both ammo and guns in record numbers. Firearms and ammunition sales shortages shot up, even before the Senator ascended to the Chief Executive’s slot.

In 2009, the FBI’s National Instant Criminal Background Check System (NICS) reported 14,033,824 background checks. While that represents “only” about a 10 percent increase in gun purchases from 2008 (12,709,023 checks), figure 1000 rounds of additional ammo per additional gun. I make that 1,324,801,000 additional bullets. At least. No wonder ammunition makers are adding shifts to increase production.

Meanwhile, increased demand and lagging production means higher prices. If you wanna pin all that on Obama Derangement Syndrome, go ahead. In truth, the 44th President of the United States has done little to curtail gun ownership. If he does make moves in that direction, look for another sales surge and price spike.

Obama’s to blame II

Early in its first year, the Obama administration decided they would stop selling spent brass casings to ammunition re-manufacturers. They decided to shred them and send the raw materials to . . . China. This policy immediately changed the availability of practice ammo for 9mm handguns and AR-15 carbines. It also had a trickle-down effect on the laws of supply-and-demand for every other kind of ammo. Since garnering media attention, the bullet-brass-to-China situation has since been “resolved.” But the psychological damage was done.

The manufacturers are to blame

Pity the poor ammo manufacturers. They got caught flat-footed, what with the increased demand from the military, decreased raw materials supplies courtesy of China, and the artificial spikes to demand, driven by the anticipation of anti-gun policies from the Obama administration. They’ve largely caught up now, but there are still shortages in specific markets and calibers.

Capitalism is to blame

The law of supply and demand is a cruel mistresses. When the supply of a product or service drops below demand, manufacturers usually raise prices to soften demand, bank profits and enable supplies to catch up. When supplies are in abundance, prices drop to clear out inventory. The Eggo frozen waffle shortage (I kid you not) shows how you can’t buck the system.

Where this one really kicked in: ammunition manufacturers quickly realized that, with raw materials supplies at all-time lows, it was far more lucrative to manufacture self-defense rounds (i.e. jacketed hollow-points) than it was to make practice rounds (full-metal jacketed “roundballs” or lead wad-cutters).

Even more critical to those who reload their own practice rounds, it was far more lucrative to make the ammo than to sell the supplies (primers, gunpowder and bullets), making it difficult to impossible to reload ammo. As there’s virtually no evidence of price gouging (at least any that stands up to scrutiny) it’s hard to pin this one on ruthless capitalists. Or any other kind, for that matter.

Gun owners and first-time buyers are to blame

Ask firearm manufacturers, and they’ll tell you that the “Election dividend” for the ’08 Presidential race was a dramatic uptick in the number of people buying guns – both existing gun owners buying more weapons, and first-time buyers wanting to get guns before they were banned. (No ban actually happened, but like, Wall Street, gun owners buy on the rumor, and sell on the news). Obviously, if you own a Colt .45 and grab an AR-15 for your home defense arsenal, you have to add multiple boxes of ammo for practice and self-defense.

The media is to blame

There’s a fine line between covering the news and making the news. When it comes to any story concerning firearms, the news media consistantly blurs that line like a myopic coke addict. With every breathless story from the left covering Obama’s, Pelosi’s, and Reid’s plans to clamp down on gun shows, gun ownership and gun manufacturing, millions of Americans decided to exercise their Second Amendment rights. With every story covering the NRA’s efforts to add members to fight the ObamaNation’s plans to curtail and legislate gun ownership, those on the gun-control side of things (i.e. gun owners) became even more agitated.

Truth be told, all of these factors created a “perfect” storm of demand for ammunition, that reduced the supply, that increased the price, that led to greater production, that’s satisfying demand, which will eventually reduce the price. Or, perhaps, not. Does it really matter?

if they thought about it—and I’m not saying they will—gun owners would gladly pay a high price for availability. As they are. And those who oppose gun ownership would happily see the price rise to the point where hardly anyone could afford it. Which it won’t. And so . . . God bless America.