Bullet blitz: Demand from public, government leaves ammo shelves empty
By Kristina Shevory
Published May 12, 2013
FoxNews.com
Ammunition retailers can't keep up with government and public demand. (AP Photo/Christian Escobar Mora)
Steve Warholic spends nearly his entire workday at a Nevada ammunition store scouring the Internet, and the owner puts in even more time online. Both think they need to spend more time on the web.
They're trying to find bullets for their customers at Stockpile Defense and the store's sister school, where 50,000 people are trained every year in firearms handling. Shelves that once held the most popular calibers, like .22 and .45, are bare. There are waiting lists as long as two months and students are requested to bring their own ammunition. Pre-orders are no longer allowed.
"We're buying everything we can find and we still can't bring in enough."
- Steve Warholic, employee at Stockpile Defense
"We're buying everything we can find and we still can't bring in enough," said Warholic. "It's a constant battle."
Demand for guns and ammunition has cleaned out stores nationwide, leading to waiting lists and early morning lines outside of gun and sporting good stores for ammunition shipments. Common calibers routinely sell out within minutes of appearing on store shelves and prices have soared as much as 70 percent.
After the Newtown elementary school massacre, gun enthusiasts, already anxious President Obama's re-election would translate into harsh controls on gun ownership, have packed stores, buying as many firearms and as much ammunition as they can find. Moves to expand background checks and limit firearm and magazine sales have added to the hysteria. Massive government purchases, including a plan by the Department of Homeland Security to buy more than 1 billion rounds of ammunition, have further stoked fears – and suspicions.
"People buy ammunition when they see it even if they don't need it," said Mike Bazinet, spokesman for the National Shooting Sports Association, which represents firearms and ammunition manufacturers. "It becomes self-fulfilling over time."
Although Warholic in Nevada has ferreted out new supplies through his online work, he can barely keep up. He has 50 million rounds of ammunition on order this year, but will consider himself lucky to get 10 million. And he's one of the lucky ones: Competitors ask to purchase his supplies so they can restock their shelves.
"The running joke with our distributor is that we tell him, 'You don't need to come to work anymore. We'll take everything on your list,'" said Warholic.
The run on ammunition has also hit law enforcement agencies, notably smaller ones that don't have the funds or supplies of larger organizations. Some have stopped using bullets altogether for training. In Richmond, Calif., the 200-member force once trained on the range every month using live ammunition. They've since switched to dry fire exercises, laser guns and Airsoft pistols, which fire plastic pellets, to simulate live fire exercises -- and to save money.
"Ammunition has tripled in price over the last decade. We now have to wait a year to eight months for a shipment," said Capt. Mark Gagan, spokesman for the Richmond Police Department.
This year, concerns over a federal government bid to purchase large amounts of ammunition sent gun enthusiasts back to the stores. The Department of Homeland Security put out bids for up to 1.2 billion rounds of ammunition, leading many gun enthusiasts, including Sen. Tom Coburn , R-Okla., to question if the agency's five-year purchase plan was fueling the national shortage.
"These round totals are simply a ceiling," said Peter Boogard, DHS spokesman, in an email. "It does not mean that DHS will buy, or require, the full amounts of either contract."
Over the last three fiscal years, the agency, which oversees the U.S. Secret Service, Coast Guard and U.S. Immigration and Customs Enforcement, actually bought fewer rounds of ammunition each year. The number of rounds purchased has fallen from 148.3 million in fiscal 2010 to 103.2 million rounds in 2012. The agency, which includes more than 100,000 law enforcement personnel, uses about two-thirds of the ammunition for qualifications or training purposes.
Gun enthusiasts and elected officials also grew concerned that DHS was purchasing hollow-point bullets, which expand upon contact. Although police departments use different types of ammunition, most use hollow-point bullets because they have greater stopping power and carry less danger of passing through the target, said Darrel Stephens, executive director of the Major Cities Chiefs Police Association.
Background checks for firearms soared following the shooting at the Newtown elementary school in Connecticut, as people feared some guns would be banned. The week following the Dec. 14 massacre, the FBI reported its busiest week ever for background checks since it started recording figures in 1998. Even the day of the killings, the number of background checks was among the ten highest in the last 15 years. The figures do not reflect denials or the number of firearms purchased.
The spike in demand isn't new. The sour economy has also played into personal safety fears that crime will rise. Surges in gun and ammunition purchases have been ongoing since President Obama, like many Democrats, a vocal advocate of gun control, was elected in 2008 and then re-elected last year. In an October 2009 Gallup poll, 55 percent of gun owners said they thought the president will attempt to ban gun sales.
Despite the rush to buy ammunition and guns, household gun ownership among Americans has declined modestly since the 1970s. In 2012, 34 percent of Americans had a gun at home, down from 50 percent in 1973, the first year University of Chicago researchers started tracking gun ownership for the General Social Survey. A 2012 Gallup reported a more modest decline from 50 percent in 1968 to 43 percent last year.
These surveys, however, don't track how many firearms a gun owner has. While there is no data, retailers and ammunition dealers say ammunition and firearms sales have been to gun owners, and not to those who have never owned a firearm.
With such little supply, retailers have slapped restrictions on the number of boxes of ammunition customers can purchase. In January, Walmart limited ammunition sales to three boxes per customer, per day. Dick's Sporting Goods and Cabela's imposed a three and ten box-restriction on purchases, respectively.
At Dick's Sporting Goods in Bee Cave, Texas, a line of 10 to 15 people wait in the early morning hours outside for the store to open every Wednesday and Friday despite the three-box limit. On those days, new ammunition shipments come in and though they don't know what's coming off the truck, gun enthusiasts still show up. Any ammunition calibers that are difficult to get, like 9-mm., .22, .45 or .223, are routinely bought within minutes, leaving shelves bare. Only shotgun shells can routinely be found.
"We're getting in anything that we can and we still sell out," said Payton, a salesman at Dick's. "People panic, that's all."
The surge in demand for firearms and ammunition is also reflected in the bottom line of big retailers, like Cabela's and Walmart. At Cabela's, a national chain of sporting goods stores, first quarter profit skyrocketed 73 percent, fired by strong sales of guns and ammunition. The company's stock hit an all-time high last week after reporting its results and blowing apart analysts' expectations.
"It's no surprise guns and ammunition were going to be strong in the first quarter," said Thomas Millner, Cabela's chief executive officer in an earnings call last Thursday. "Supply is still tight. It is still constraining ultimate demand because we simply -- in some categories, like .22-caliber ammunition, it's very, very tight."
Ammunition manufacturers are reporting record profits and sales, with increases that number in the double and sometimes triple digits. Olin, which owns Winchester, reported last week the company's first quarter earnings climbed 190 percent over the same period last year. Federal Premium Ammunition's annual earnings for ammunition last year climbed 24 percent over 2011.
"Our sales are only limited by the amount we can produce," said Joseph Rupp, Olin chairman and chief executive officer in a conference call last Friday.
Ammunition manufacturers are struggling to make enough and have hundreds of millions of dollars in backorders. They've added hundreds of employees and equipment and increased overtime, and, in some cases, are running factories around the clock. Producers have posted notes on all their web sites assuring customers they are working as fast as they can.
"We are producing as much as we can; much more than last year, which was a lot more than the year before. No one wants to shop more during this time than we do," a note on Hornady's site said.
Producers did not return repeated emails and calls.
"Manufacturers are doing what they can, but it's not enough to keep up. It's a supply-and-demand issue," said Nima Samadi, a senior analyst who tracks the guns and ammunition industry at IbisWorld, a market research firm in Los Angeles.
While demand is strong, manufacturers consider it temporary and aren't planning to build new factories or make substantial changes that would cost a lot of money and take a lot of time to train people and buy new facilities. The last "surge" in demand only lasted six quarters, and this one, though manufacturers changed their expectations in the last month, now expect demand to remain strong through the end of the year. Some even wonder if it will extend into the new year and beyond.
"I think the honest answer is," said Millner, Cabela's chief executive officer. "I don't know when it's going to loosen up."
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