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My Solution to the Ammunition Shortage

Written by Gary North on June 10, 2013

There is a national ammunition shortage. It is not getting better. Gun store owners say it will last for years.

There is a simple solution: raise the price.

When you hear the word “shortage,” always think: “at some price.”

Manufacturers ought to raise prices dramatically. But they don’t. Why not? The only reason I can come up with is public relations. If so, it’s a mistake. There is nothing like higher prices to relieve the problem of rising demand.

Stores are rationing ammunition. Why? Why not raise the price?

Public relations. The store owners are afraid of being seen as price gougers. But higher prices would send a message to suppliers: increase output.

If the world wants more of what you are selling than you can deliver, raise your price. That’s the free market’s way of clearing markets.

When you ration what you are selling, you are not maximizing your income. You could use this income to add manufacturing capacity, which would enable you to meet rising demand. What good does rationing do in terms of increased production? None.

Rationing is the state’s way to solve the problem of rising demand. The state says: “Line up.” The free market says: “Pony up.”

To cut the long lines, raise the price.

At an auction, the auctioneer does not ration the item. He can’t. He has only one to sell. So, he says: “Do I hear. . . .?” The free market is a gigantic auction. When supplies get tight, prices rise. That is the effect of bidding. Rising prices are the auctioneers’ way of matching supply with demand.

The ammunition manufacturers are unwilling to raise prices. Why? I think it’s public relations. They don’t intend to increase capacity. They will not use the money they could be making to increase capacity. They prefer to ration supplies. All the way down the supply chain, sellers are rationing.

They should be raising prices.

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47 thoughts on “My Solution to the Ammunition Shortage

  1. Joy Florida says:

    Give me a break… get the obstructive government out of the way and the shortage would vanish. There are 29 nations that manufacture ammunition and most is exported to and sold in the U.S,… my question is where has all of this production dried up except with the blockage of importation by our communist leaning government. ..

  2. I don't think North would dispute you…indeed, I don't think North would ever dispute the statement "get the government out of the way". The point of the article is what the ammo manufacturers and sellers ought to do in response to the situation as it is. This is the same situation that comes up every time a hurricane hits somewhere, and sellers won't raise the price of emergency goods because they're afraid of being called price-gougers. The whole price-gouger argument is just plain economic ignorance, and it everywhere and always results in empty shelves on vital products.

  3. according to ammo manufactors, they are at full production.

  4. No good ollie! I thought you were smarter than that, If they raise prices the government will just spend more tax money to get what they want. The economy will react with higher prices for other products, workers in the ammo industry will be laid off and everyone suffers. A better plan would be for the government to get out of the public market and quit trying to make slaves of it's supporters, and let business find it's own level by supply and demand.

  5. If they would raise the price to clear the market, that would incentivize both themselves and potential competitors to lay on greater productive capacity. That's how the free market is SUPPOSED to work. It's only within a thoroughly corrupted market that it doesn't work that way. (In this case, the fear of being called "price-gougers" is said corruption. Although it wouldn't surprise me in the least if the government is also using some other unseen blackmail to cause them to not raise production.)

  6. ncbill12 says:

    there's plenty of 22lr available – at 40 cents per round

    ditto for 223 – at 80 cents per round

  7. 2WarAbnVet says:

    If you believe ammunition prices haven't raised dramatically,; you haven't been shopping lately.

  8. raise prices?, isn’t that what the government already trying to do, why not have ammunition manufacturing plants in all 50 states? that way the government can’t infringe on our 2nd Amendment,and the 10th amendment will protect the ammo manufacturers from the obamanites.

  9. Bring Enough Gun says:

    Reaganomics 101: if you want less of something, tax (raise the price of) it; if you want more of something, subsidize (lower the price of) it. Therein lies the rub; this overreaching, statist administration wants less American citizens owning guns and/or ammunition. Therefore they are elated when the price of guns and ammo rise sharply. Those suppliers or retailers who have thus far refused to double or triple their prices are in fact, keeping this administration from achieving their objective of reducing the number of law abiding citizens that can afford to defend their lives and property.

  10. Bring Enough Gun says:

    We're not talking about the price of big screen TVs here; we're talking about whether people can afford their 2nd Amendment rights! Although I've been a Constitutional conservative my entire adult life, I would not sell 100 gallons of fresh water to the highest bidder in the desert. I would ration it and price it so that as many as possible could have enough to sustain themselves until they could reach more supply. Let me put it this way; if your daughter was living alone on a meager income and just couldn't afford to buy a new gun, some personal defense ammo, and some target ammo for practice, would you still feel the same way after a criminal broke into her apartment one night and assaulted her? I think not; so to the gun and ammo dealers out there that have resisted jacking up their prices, I say God bless 'em! They are the ones I'm buying from even if I have to wait a bit longer for what I want. Oh and you really won't like me; I'm GIVING away some of the ammo I'm buying to family members who can't afford or can't find it where they live.

  11. txcntryboy says:

    This guy sounds like a politician (full of $$$$). They only solution they have is to throw more of our money at the problem. Whatever happened to common sense? With the economy in the tank, unemployment at 7.6 (?), and the FED printing money non-stop, where does the common man get the extra money for his ammo when he needs it for so many everyday problems. This world that we live in is upside down!

  12. FYI dense head:
    Ammunition prices have already been jacked up to the sky by retailers, or hadn't you noticed…and it doesn't change the demand one bit.

    This is crisis buying, plain and simple. The solution is simple, increase production and block the Treaty Obama just signed…oops…that's a done deal and now he's shut down imports. Were you napping?

  13. Written by Gary North : G. N. you are a Retard or you drink too much Kool-Aid ; Ammo prices have Doubled since DHS cleaned the market ; don`t you know ?? There was no ammo shortage until DHS purchased everything available and keep doing so ( paid by our taxes ) Your Solution Sucks
    While Barack Obama and his allies in the United States Congress continue to press for gun-control, they know that banning guns themselves is only part of their overall effort. They know the value of ammunition, and – using Dianne Feinstein's own words – wish to "dry up" the supply.
    The Department of Homeland Security's expensive and excessive ammunition purchases has become the gun-grabbers' perfect catalyst to achieve their goal of keeping ammunition out of the hands of gun-owning Americans.

  14. Sen. Inhofe and Rep. Lucas' bill would stop the flow of ammunition federal departments like the DHS. The U.S. Lawmakers from Oklahoma's legislation would "restrict agencies from obtaining additional ammunition for a six-month period if current agency stockpiles are higher than its monthly averages prior to the Obama Administration."
    It's time to stop Homeland Security's stockpiling and allow Americans to do some stockpiling of their own …
    Wake up Gary

  15. John Glock says:

    If they raise prices to increase production, they will end up with excess equipment when the prices/demand return to normal. These are not dumb people, they know this will pass when Obama is gone.

  16. Maybe this quote will help: "Mistakes can be corrected by those who pay attention to [economic] facts … but dogma will not be corrected by those who are wedded to a vision." . . . economist Thomas Sowell

  17. hoffhack says:

    Gary, you must be a little dense!! There is no ammunition shortage!!! The DHA is buying up the available supply, thus leaving none for U S citizens to buy!!! Congress could stop this in a heart beat!!! Cut off their funds!! Require an inventory be taken of all Government stock piles of Ammunition on hand, and where overages are found, they should be sold off as surplus to the civilian market place. (after all, we already paid for it once) Most preppers saw the hand writing on the wall 3 years ago, and stocked up while the getting was good. Those that missed the boat are S.O.L.



    """""MOLON LABE!!!"""""

  18. which means it won't be the retailers "price gouging", but the speculators who were smart enough to buy up the plywood at normal prices by the truckload…. then ration it out at high markups to those who weren't smart enough to buy some ahead.

    Thomas Sowell defines price as that which determines distribution of scarce resources that have alternate uses. This situation proves him correct.

  19. the manufacturers do not fear being accused of proce gouging. They fear investing to increase capacity to meet the present high demand, which they see as an anomaly that will e short lived, then not being able to recoup their capital ivestment when demand normalises.

    I see this as a valid line of reasoning. It seems two factors are driving high demand: one is the amazing pressure on the market for firearms, and their needed amunition.. some seventy million new purchases since the last election, if I recall aright, all needing ammunition; and word that DHS are ordering literally billions of rounds for their own stockpiles… enough to supply ALL our military operations worldwide for thirty years.

    Further, I have read recently of our ever-helpful gubmint blocking recent attempts to import legal ammunition manufacturing machinery for use here in the US, and also blocking idirect imports of ammunition manufactured offshore.

    Don't try and tell ME the government is not complicit manufacturing this shortage. The question arises, however: WILL this shortage become the new norm, with virtually ALL US manufacturers working at full capacity, or will things normalise with COngress working to block DHS' massive and seemingly unneeded stockpiling, and other departments blocking import of machinery and ammunition from offshore? Until we have a better sense of those two scenaria the US based manufacturers will not have enough information to change their present stand on investing to increase capacity. I would not, until a few things sort out more clearly.

  20. I’m fairly sure this article was written as tongue in cheek… Since I used to buy .22 in bricks, and I know how much it cost then, I can honestly say that this article is full of it… I’ve also been reloading since the 70’s… I don’t give a rats ass about inflation, because that is not what this is about… it’s about people in our government who don’t belong there… Our government has been running roughshod all over us in so many ways, including the deprivation of availability of ammunition… It’s time to quit talking, stop raising prices, cut the government of our tit, and take back this country…

  21. There is a difference between an emergency like being in a desert with a limited supply of water available for the time-frame in which you're likely to need water, and the current situation of ammo shortage. In the first case, I agree that rationing is the best and most moral solution. However, the situation with ammo, or with emergency supplies in the run-up to a hurricane, for that matter, is different. In both of those situations there is still a function market, however disrupted it might be. Raising prices are a signal to entrepreneurs to lay in more productive capacity, or in the case of the hurricane, load up some trucks and get them to ground zero. Being stuck in a desert, or being stuck in a basement with hurricane-force winds outside, provides a true limitation to supply for the time period of interest. The ammo shortage is not the same. Yes, being able to exercise your 2nd amendment rights are important, but having to pay twice the amount for ammo is not the same situation as having or not having water in the desert.

  22. I heard this argument years ago and agreed with it. I wonder just how valid it is, though. Why is ammo so special that supply is being so sticky? (Sticky meaning, it doesn't want to change because of changes in demand.) I have to believe there is some other factor, and whenever economic actors don't act rationally I look to the government for the answer.

  23. Bring Enough Gun says:

    Yeah, not the same… Ask the woman with a restraining order against her ex-husband who just kicked in her door if she'd rather throw a gallon of water on him or point a loaded Ruger SR9c at him. Oh that's right, she has a very limited income and just couldn't afford $800 for the same gun that I bought less than a year ago for $400. And the ammo at double or triple the cost, forget that too… Maybe if he doesn't beat her to death she'll live to someday save up enough for her own Ruger! We're clearly going to have to agree to disagree on this one Joel. From the arms and ammo suppliers I've heard from, this administration is clearly attempting to make lawful gun ownership more difficult; either by regulation or cost. I applaud those who at their own financial loss, continue sell guns and ammo at or very close to last year's prices. Stay safe my friend…

  24. What you cite are political concerns (" With the economy in the tank, unemployment at 7.6 (?), and the FED printing money non-stop, where does the common man get the extra money for his ammo when he needs it for so many everyday problems"). With all due respect, economics doesn't take political concerns into consideration. It's just an auction, high bidder wins. If you want to introduce considerations like these into the argument you'll have to either do it by social means or political means. Most people these days prefer political. That's why we're in the situation we're in, with government intervening in the market in so many ways with so many unintended consequences.

  25. Will, I agree with most of your argument except the part where "it's time to…stop raising prices". You assume that manufacturers can put prices wherever they want. This is absolutely not true. Prices are set by the BUYERS who indicate their willingness or unwillingness to pay. The current ammo shortage shows that whatever the current prices are (and I agree with some of the rude commentors who contend that prices HAVE risen, although I don't think it's necessary to call Dr. North names) , buyers are more than willing to pay them. This means that the current prices, however high, are not market prices. FYI, the "black" market price for an item is usually very close to the market price. The reason it's called "black" is because the kettle, the government, wants to call it so.

  26. Michael4yah says:

    Why cant people see that we have ONE COMPANY that makes most of the primers, only several companies that make brass. Where is the American ingenuity that made this country great? How about the idea that commerce requires COMPETITION? Why doesnt Donald Trump or any rich American go into these business and build new factories that produce ammunition for the American people and not the government?
    Can you imagine if America was invaded or under attack from the 400,000 NATO troops that are already here? We couldnt defend outselves because most of the ammo is being sold to the federal government. We need to call out these companies and let them know that supplying the American Citizens MUST COME FIRST. If they dont stop oversupplying the government with ridiculously large orders then we need to tell them that in the future we are going to buy all of our ammo and supplies from the new companies that are loyal to us. Goodbye Winchester, Hodgdons, Federal Ammo. The only thing that big business understands is the bottom line. Lets do it.

  27. Burt Fisher says:

    Ammo manufacturers aren't the only ones who are afraid of the Federal Government. Look what happened to Gibson Guitars, only because he supports the Constitution (this is commonly referred to as "being right wing"). And the company Cheaper Than Dirt is playing with fire by being customer-friendly and pro-Constitution, and they are just asking to be slammed by the Obama administration. They will probably be next.

    This is a sad time in American history. These people are just trying to put food on their family's table. Don't be too upset if they don't go too far to protect YOUR rights. That is something that you need to do (and of course, it's the job of the government to protect your rights as well, but they are clearly not doing it).

    By the way, look what happened to Zimmerman when he was protecting his rights. Government wouldn't. And all you guys who say "rather be judged by 12 than carried by six" you can see how that works out. He is being left out to dry, just like ammo manufacturers would be if they were harassed by this runaway government. You would all sit there and say "I sure glad I didn't buy any of their stock!" or something less than helpful.

  28. It's part of the lefties' strategy. They know they stand a snowball's chance in hell of repealing the Second Amendment the legitimate way. It's too much work, and the populace is wising up to what their real strategy is- DISARMING THE POPULACE !
    Obama et al know full well that if the citizenry can't find ammunition, the population's guns are good for nothing. Historically, lefties have been more openly honest.
    “Cause the registration of all firearms on some pretext, with the view of confiscating them and leaving the population defenseless.” — Vladimir Lenin

    “If the opposition disarms, well and good. If it refuses to disarm, we shall disarm it ourselves.” — Joseph Stalin

  29. hey,
    223 before the election, an 1000 rounds box was less than $400 with shipping…. January 2013 the same box of ammo was
    $999.99 plus shipping… but ammo is still short and prices are higher because of the middle man charging more.. I have tried
    to get a hand gun for over year shortage/production called company and no straight answer.

  30. This doesn't make sense. If retailers (en masse?) were inordinately raising prices, there would be a surplus, not a shortage.

    Many freedom-mouthers think the government is omnipotent. They believe it more strongly than either hack party. If they'd care to look at any historical chart of copper, they'd see that the price bottomed-out in 2008, roughly tracking equities. It's now somewhat more than twice as dear. Copper is, by far, the primary component in brass. Other cartridge components have also risen. This tracks exactly with your pricing observation, without accounting for government purchasing.

    Nobody complains about the gold rise, since it benefits them. Few claim government purchasing is responsible for risen prices at the grocery store. But with gas it's all a big corporate conspiracy, and with ammo it's diabolical government shenanigans.

    If these companies raise prices, they can raise enough revenue to comfortably raise production. If the amount of federal purchases is material, then higher prices would cause the government to subsidize the gun industry in an attempt to suppress it. Leaving money on the table is down right un-American.

  31. The Ga Arms story is over 4 years old. Nota bene: The world did not end.

  32. I just think it will pass when the panic subsides. Really, every rumor I've heard never came to fruition. Big profits were found by any person or company on the selling end of the transaction.

  33. Bless you and I got your back. Freedom is not free.

  34. This is not a normal market. In this political climate, the supply will be dried up no matter what the price, so the shortage is caused by a limit in the manufacturing capacity. They are cranking the ammo factories as fast as they can, but there are only so many sources, and the supply of raw materials is limited. In this situation, more investment in ammo factories could solve the problem long term, but to build a new factory takes a LONG time, so this is a long-term problem, and with the government regulations, few investors are willing to take the risk. The problem is not the price, but the GOVERNMENT!

  35. hoffhack says:

    As for George Zimmerman. I am following the case very closely. I live only 30 miles away. He needs our help. I urge all that can to go to gzlegalcase.com and donate whatever you can. Despite the lies and distortions of the race hustlers and the Press, things are not looking bad for "Z". But the costs keep mounting. Try as they might, they cannot change the eye witness testimony, by a resident (who I have heard is black) from 30 feet away who will testify that Martin had "Z" pinned on his back on a concrete side walk, screaming for help, and was beating the snot out of him, when he finally managed to get hold of his gun and end the vicious attack (which came from behind in the dark) You can also get to see the pictures of "Z" bloody and bruise and bumpy head. If they get a jury that is not lopsided, the deliberations should not last more than an hour. Plus, for murder 2, the verdict must be unanimous, or you have a hung jury.

    We need to close ranks behind him. This has nothing to do with race, this has everything to do with justice. "Z" was the victim here, and these race baiting hustlers are trying to put one over on the people! We cannot let them do that!

    """""MOLON LABE!!!"""""

  36. The Only way to do it is : United we stand and United we are the Power : all it takes is 10 % of the Population that is 30 Million of us Americans Standing Tall and United . Just think : the U.S.Armed forces combined is about 2 Million soldiers , and I believe not all of them will comply with the order of the illegal ; the U.N. in our Land will be very sorry they came here, that blue head ………..+…………America is our Home ,Land and Country.
    In February 2012 at * The Sportsman club 500 Rounds 223 Rem.55g FMJ Federal American Eagle was 195 $
    The same Ammo at the same Date at Lucky gunner was on sale at 175$
    Today the same Ammo is 400+$ ; my personal opinion : Gary North doesn`t know what he`s talking about or he`s pulling to the left ; he`s in need of a Front Alignment . Thank you all : it is a Blessing of being a Free American .

  37. In February 2012 223 was 20 cents per round.

  38. 9 months ago you could go to a gun show and buy 223 ammo for 350.00 for 1000 rounds, now it is over 700.00 for 1000 rounds, I would call doubling the price more than enough price raising.

  39. I.P.Frehley says:

    Big B, if memory serves me correctly, CTD was the first to pull AR's from their catalogs and began raising prices on ammo steadily until, lo and behold, people stopped buying anything from them, Then, like clock work, their PRes came out with some sheepish explanation and said they support The Second Amendment and Constitution all along, they just blahblahblah. You keep buying from the turds at CTD, but most of us know they're windsocks and deserve neither our money nor respect.

  40. Unfortunately Mr. North, like most liberals efuses to acknowledge that the government will just use the taxes that they collect from the higher prices to buy more ammunition for Homeland Security. After all killing all of us 15 times is possibly not adequate.

    Gary, grab Piers and take him back to England. Then stay there with him.

  41. They could stop selling to the government. But, otherwise, sadly, you are probably right; Supply and demand merits higher prices.

  42. Massive ammo buying by the Obama admin caused the shortage.

  43. Pete0097 says:

    THey don't want to increase production as they think that in the near future, they will lose the entire civilian market so they don't want to over invest.

  44. Fleendar the wise says:

    There's several forces at work here. They are: panic buying, the government, and profit taking, with the first and last being the prevalent forces. Yes, the govt IS buying bullets, but NOT all of the calibers made. If you *really* want to know where the ammo's going, I'll tell you where. People are still buying whatever hits the shelves as fast as they can. I work in a store that sells ammo and it's all bought BEFORE it ever hits the shelf by the employees. However, in many other stores, people are lining up at the wee hours of the morning once they discover when the GM trucks arrive and they're buying it all as well.

  45. Fleendar the wise says:

    As for profit taking. One has to look no further than the internet and gun shows to see people selling .22 cal, 9MM and other ammo that's normally $20 and selling it for $100+. I see it all of the time when I hit the net auctions to see what's happening and monitor prices (I don't need the ammo) and go to gun shows. I cannot blame them for profit taking as THAT'S what makes America, America. Capitalism. However, it's the people who PAY these prices that are continuing the shortage! As long as people continue to pay 3-4 X face value for this ammo, the shortage and shelf stripping will continue.

  46. Did I miss something? This writer is lacking in business sense. The companies that are manufacturing the cartridges are making good money. Only someone who is greedy would raise the price when they can just increase production and make even more money. So why is this writer advocating raising prices? Probably, he is a gun control freak. But then, I only read a few sentences before I got enough and stopped.

    What will stop the run on ammo? Simple. Remove the gun control people from authority. When there is NO threat of tyranny, the fear of the government will subside and people will stop hoarding bullets.

    So the answer is: Stop the gun controllers.

  47. slickzip says:

    I have not had any trouable buying ammo.