Why Ammo Shortages Could Last Through Next Year: Hunting season may be over in much of the country, but that doesn’t mean the hunt for ammunition has ended. In fact, the demand for ammunition is actually expected to remain high throughout much of next year, which will translate to higher prices – considerably higher prices. It will just cost more to shoot.
The National Shooting Sports Foundation (NSSF), the firearms industry’s trade association, has estimated the prices for ammunition are 200 to 300 percent higher than compared to recent years. That certainly tracks with media reports.
Ammo Shortage: The Costs
One firearms enthusiast told FoxNews last month that he paid around 65 cents per round for ammunition that normally would be 20 cents a round.
Supplies of ammunition declined at the start of the pandemic in March 2020, but the biggest factor was the marked increase in the number of firearms sold over the course of 2020. There were an estimated 11 million first-time buyers, and that certainly played a part in ammunition shortfalls.
Yet even as there has been a decline in the number of firearms sold this year, 2021 will still be the second-highest on record. Stronger gun sales will always translate to demand for ammunition. The situation has also been made worse by the continued global supply chain bottlenecks. Simply put, many of the key components from brass to the chemicals used are not only in short supply, but are slow to reach producers. However, it is worth noting that many production lines are now at full capacity.
Ammunition is being produced at record or near-record rates. Thus, the biggest issue is that the demand continues to outpace anything the industry has ever seen.
Ammo Shortage = Demand High, Stock Prices Too
The NSSF estimated that 8.7 billion were produced in 2018, a marked increase from the 8.1 billion produced in 2017. Fast forward to a year ago and some 9 billion rounds were produced.
That increase should have in theory been more than enough to meet the demand, yet it hasn’t and likely won’t, at least well into next year and perhaps even beyond. Demand for ammunition could likely continue throughout 2022.
While hunters and sport shooters are the big losers in this – having to pay a lot more, having to scale back their range/hunting time or both – investors could be the biggest winners if analysts are to be believed.
The stock prices for Ammo, Inc (Nasdaq: POWW) blew away estimates for its fiscal 2022 second quarter with an increase in sales of more than 400 percent, The Motley Fool reported. For the brand, “net revenue was $61.0 million, up 408% year-over-year. Of that sum, $40.2 million came from ammunition sales, a massive jump over the $8.7 million of ammo it sold in the prior-year period,” the financial analyst website stated.
Wall Street’s gain won’t mean much to gun retailers on Main Street, or shooters heading to the range. The great ammunition shortage of 2021 could continue into 2022 at the very least.
Peter Suciu is a Michigan-based writer who has contributed to more than four dozen magazines, newspapers and websites. He regularly writes about military small arms, and is the author of several books on military headgear including A Gallery of Military Headdress, which is available on Amazon.com. Peter is also a Contributing Writer for Forbes.
