Demand from public, government leaves ammo shelves empty

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Subject: Demand from public, government leaves ammo shelves empty

http://www.foxnews.com/us/2013/05/12/bullet-blitz-demand-from-public-government-leaves-ammo-shelves-empty/?testlatestnews

Bullet blitz: Demand from public, government leaves ammo shelves empty

"People panic, that's all."

By Kristina Shevory

Published May 12, 2013

FoxNews.com

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,"
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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