This piece has been contributed exclusively for reader’s of SGTreport by our friend Mark (pseudonym below), a firearms industry executive & part-time police officer.
by Mark S. Mann,
If you are a serious firearms enthusiast or what some people now refer to as a “Prepper”, having a supply of ammunition is an absolute must. Regardless of what the main stream media says, it is not “abnormal” or “sinister” for people to store thousands of rounds of ammunition. For whatever reason you choose to stockpile ammo, the reality is that it’s a wise choice to do so. Let’s take a look at some interesting facts about ammunition, and the bull run of “Ballistic Precious Metals” over the last 20 years.
Ammunition is produced from semi –precious metals, and base metals, which are commodities themselves, and subject to daily price fluctuation (or now, manipulation). So, when you purchase ammo, whether you are conscious of it or not, you are actually making a commodities purchase in metals. Yes, ammo is a finished product with a very specific end use, but metal it is. Ammunition manufacturers are always hedging future price increases for the vital raw materials and commodities that are necessary to produce loaded cartridges and cartridge components. Does this mean that every time ammo prices go up, it has something to do with a rise in copper, brass, lead, or zinc? Not necessarily, but rising commodities prices do correlate to higher ammo prices. Spikes in demand, shortages of finished products, shortages of vital raw materials, or interruptions in the industry supply chain to the consumer market, are all reasons for which ammo manufacturers can, and will raise prices.
One thing that we can all agree on is that commodity prices will increase dramatically over the next several years and beyond. As these commodity prices increase, the prices of ammo will also eventually increase. Other factors that affect the price of ammunition are: Increases in manufacturing costs, increases in sales tax, increases in transportation costs, increases in Hazmat fees, and the devaluation of the US Dollar when purchasing imported ammunition. Also keep in mind that only (2) private companies, (UPS and FedEx) ship the vast majority of ammo to private citizens and retailers in the USA.
The bottom line is that the prices only have one way to go, and unfortunately that direction is up. If you disagree, then ask yourself how likely the possibility is that we will see $2.50 per gallon gasoline or $1000 per ounce gold again anytime soon?
What if legislation were enacted to restrict importation of ammunition? I have always said this is a very serious issue, which would require no Congressional approval to enact. A President can simply sign away much of the imported CHEAP ammo that comes to the USA from Russia, Eastern Europe, South Korea, South America, and surplus markets all over the world. All this would take to happen are a few Presidential Signing Statements declaring ammunition “War Material”. This means that supplies of popular ammo calibers like 7.62x51mm, 7.62x39mm, 7.62x54R, 5.56x45mm, 5.45x39mm, and many others would shrink, literally overnight. Even if the domestic manufacturing capacity were able to alleviate some of the resulting shortages from import bans or import restrictions, prices would undoubtedly go up significantly. If you doubt this, take a look at the current retail price differences of domestically produced ammo in these calibers, and compare them to imported ammo in these calibers. There is up to a 35% difference in prices when comparing apples to apples, and in some cases, there NO domestically produced products to purchase!
What if there was a large scale war which increased the US Military/ US Government demand for
ammunition, or caused other nations to discontinue sales of their surplus ammo stock piles, or caused
these countries to cease their exports all together, perhaps in order to assist their own national war
What about the recent contract awards and massive purchases of .40 S&W and 5.56mm ammunition
by the US Government / DHS and other government agencies, which have piggybacked onto these
contracts? We are talking about hundreds and hundreds of millions of rounds of ammunition. As a
sales executive in the firearms industry, I can tell you with 100% confidence, that there is no way
that these contracts will not affect price and availability in the future, simply based on the existing industrial manufacturing capacity, available raw material supplies, and rising commodity prices. The US Government locks ammo manufacturers into fixed price contracts for a few years at a time. This is a fact. If commodity prices increase, and the manufacturing costs go up, these manufacturers will be likely to raise prices on the consumer market to cover their losses on the fixed price government contracts. In my opinion, this has already taken place a few times in the last 10 years. These issues are regardless of the fact that we may also find ourselves embroiled in another new Middle Eastern military conflict in the near future. The simple fact is that the consumer / retail end-user ….aka ….YOU….is always on the bottom rung of the ladder in terms of priority in the supply chain when it comes to ammunition. The consumer will always end up paying a higher price for their ammo and last place in line before the government, military, police, commercial distributors, and dealers, get theirs.
The reality is that ammo prices have been mirroring gold and other commodity prices for the last 20 years, trending undeniably upward. As ammo costs have gone up over the years, the supply and quality of that supply has gone down. 20 years ago the average price for 1,000 rounds of imported 7.62x39mm ammo was $99.00 p/ 1,000 rounds which is about $. 10 p/round. Today, the same 1,000 rounds will cost you about $250 p/ 1,000 rounds, or about 2.5 times as much. In the case of 7.62x51mm, top of the line military surplus ammo was about $.18 p/ round 20 years ago. Today, something similar might cost $.50 – $.60 p/ round, which can be about 3 times as much. If you look at various types and calibers of ammo, the basic math is almost exactly the same across the board. Prices have gone up 2-3 times over the last 20 years.
Other factors need brief mention here. Ammo can be kept for extremely long periods of time if stored properly. What do I consider “long periods”? Basically, it will out- live YOU, if stored and maintained properly. There is still plenty of WWII and post WWII era vintage ammo being shot up. I mentioning this because although ammo has a very long potential shelf life, it is still a limited shelf life compared to other assets like gold or silver. The “powers that be” have tried several times to introduce legislation that would require ammunition manufacturers to produce ammunition which has a definite, limited shelf life. Basically, the ammo would no longer function once the expiration date on the box was up (about a 3-4 year period). This type of legislation would completely destroy people’s ability to stockpile with new production ammunition, which would limit ability to rotate your existing supplies. What a perfect way to limit the effectiveness of a population’s firearms.
Less ammunition and ammunition components are making it onto the commercial market from global military surplus sources than ever before. This is in part due to the fact that the United Nations encourages surplus ammo destruction and gives financial incentives for countries to destroy ammo that they otherwise would have sold on the surplus market. Foreign militaries have also used up their older supplies in conflicts over the last 20-30 years, so they are not turning over surplus supplies like they used to. If they do, the UN is always there to try and stop or discourage them from doing so.
At the present time, ammunition is still plentiful and less costly, compared to fairly recent history. There was a major spike in demand in late 2007 into 2008, when prices skyrocketed to historic highs, thanks to the greatest gun salesman in US history, Barak Obama. I do believe that ammo manufacturers were fleecing the consumer market at that point, but people still kept buying anyway. Right before the election in 2008, some retailers were charging almost $45.00 for 50rd boxes of cheap 9mm ball, which was about a 45% increase compared to the previous year’s prices. Prices have come down considerably since then, but in my opinion, RIGHT NOW is the proverbial “calm before the storm”. So what does all of this mean to you? Very simple…just like gold and silver, NOW is the time to buy! Things can change quickly in terms of supply, and you know as well as I do, that firearms are pretty useless without ammo.
With all this information on the table, the question is: Why should you be purchasing? Because, ammo is easily broken down into small quantities, its fungible in its own unique way and people will have a universal need for ammunition in whatever good times or bad times scenario we can imagine. Ammunition is highly portable and possesses many characteristics which make it favorable for use in trade or barter. It will never be worth nothing to you personally if you are an avid shooter, or if are planning to become one. I hear many gun owners say that they will eventually hand their firearms down to their children or loved ones someday. The handed down firearms will be pretty useless without ammunition. Even old, non-functional or un-useable ammunition still has some redeemable scrap metal value. Compared that to a pile of destroyed, or devalued fiat paper currency, which may become little more than toilet paper, or tinder. If you plan to purchase ammo in the future, based on historic increases, buying now, and stocking up is probably a better return on your cash, than keeping cash in your checking account. This is especially true if you or your family plan on future purchases to develop and maintain your skills and proficiency with firearms. After all, shooting is a perishable skill, even for the highest experts. At some point you have to burn some up to practice.
I am not going to get into a discussion on which calibers are better and why. The logical answer is t purchase ammo in calibers for firearms that you already own. If you have plenty of that type of ammunition already, consider purchasing ammo in popular calibers for use as barter goods or as an alternative “currency”. Most people tend to go for quantity over quality, but not all ammo is created
equal. Although there is no such thing as “more dead”, anyone with basic knowledge knows that premium hollow point rounds are more effective than full metal jacket “ball” ammunition, so purchase some of each. Remember, your pistol will always be a primary defensive weapon when you are away from home, unless things break down to open carry of rifles. High quality, defensive pistol ammo is a major game changer over all ball rounds. Purchase a variety of ammo for utility calibers, hollow points, soft points, not just ALL FMJ ball ammo. The military uses ball or various reasons, but FMJ ammo is not the most efficient so don’t get stuck on that. Also, consider the fact that brass case ammo will likely always be worth more than steel case ammo. Brass will also be less prone or sensitive to rust, or long term storage issues.
Here are a few basic suggestions on what types of ammo would make sound investments:
.22 Long Rifle:
There are more .22 LR firearms in the USA than any other caliber. It’s extremely versatile for hunting, target shooting / training, pest control, and has definite… but limited, self -defense potential. As ammo costs rise and ammo becomes scarcer, it will become increasing practical to do your practice / training with a rimfire. Stocking up now, means you are guarantying future practice, at a set price. This caliber is chambered in BOTH handguns and long guns, making it ultra-common, versatile and utilitarian.
12 Gauge Shotgun Ammo:
12 Gauge shotguns are as American as apple pie, and there are literally millions in domestic circulation. It would be difficult to find a more versatile firearm if you only could own one. Purchase lead Clay or Bird shot, #6 shot, OO Buck, OOO Buck, Rifled Slugs in 2 ¾ length: 2 ¾ shells will work in a larger variety of guns, they are cheaper to purchase, and provide less felt recoil.
9x19mm: Regardless of your opinion about 9mm, it is the NATO standard pistol cartridge, and the
standard pistol round for the US Military, and the most widely encountered and produced pistol caliber
in the world. If you don’t own one, millions of other people do. Enough said.
Other primary pistols calibers that will always be in demand are: .45 ACP, .40 S&W, .38 Special, and .357 magnum.
The most popular semi-automatic military rifle cartridges found in the USA are: .308 / 7.62x51mm, 7.62x39mm (preferably purchase new production Russian FMJ ammo for longest shelf life), and 5.56mm / .223 Remington: 55 gr FMJ or JSP’s or JHP’s r 62 gr FMJ or JHP’s or JSP’s or 68 gr – 77 gr JHP’s.
Odd / Alternate / Imported Rifle Calibers:
These calibers would also be practical for stockpiling either for consumption or barter: 5.45x39mm, 7.62x54R, 30-06, 20 Gauge Shotgun, Local favorite deer hunting caliber, or local Police issue pistol caliber.
Surplus military ammo cans work best in my opinion. They are air tight, fairly water tight, easily stackable and transportable, and very durable if kept dry and unexposed. Don’t be cheap about the cans. Buy those cans that are clean, rust and dent free if possible. These cans will be protecting your investment, and need to hold up over time. If you buy cans that have been used, clean off the rust and dirt, and paint them with flat spray paint if necessary. Try not to buy ammo cans that are too large, as they get heavy and bulky to move around when they are full. .30 cal. &.50 cal., or 20mm or 25mm linked ammo cans work best in my opinion. You may want to keep some of the ammo loose in cans, but I would also keep some in the factory boxes for barter purposes. Avoid the cheap plastic military looking ammo cans. Although they cost less, they will not be as durable as the metal cans over time. Also consider storing the metal cans in large plastic storage bins, or keep them covered if they are being stored in places that you may have unwanted or unintended eyes seeing your ammo stash, such as in a garage or basement. The less people know about what you have, the better for your safety and security.
I hope that this has given you a few things to think about. Remember to be practical about stocking ammo. Having 50,000 rounds of ammo without taking care of other vital logistics like water, food, and other basic necessities into consideration is like putting all your eggs in one basket. Don’t do it.
Remember to be well rounded in making your “investments”, no matter what types of commodities
your hard earned money is being used for.
Stay Awake & Stay Safe!
Mark S. Mann