From the June 2012 WebBench e-mail:
“Those of you shopping for economically priced .223 and 5.56 ammunition may be discovering that it is getting harder and harder to find. There is significant demand for these calibers at this moment, with the US Army the main buyer of the lower-priced ammunition. From our various sources, we are hearing that the Army is bringing their reserves back up to a reasonable level in anticipation of the perceivable conflicts our military may be engaged in over the next 24 plus months.
“At this time, the military gets a significant majority of their ammunition from the Lake City Army Ammunition Plant in Independence, Missouri. Every couple of years, the contract for manufacturing ammunition is sent out for bids, and the quotations are reviewed. The re-bid time for the next contract is coming up - due October 2013. While that is more than a year away, whenever a military contract of this magnitude comes up, there are significant uncertainties of change in operations by the new winner of the bid. And, with any change in operations, there’s also the strong possibility of a significant delay in supply.
“What the military is doing right now, then, is a very reasonable response to an uncertain future supply chain and a possible change in their manufacturing base. They are stockpiling more ammo than may be needed by the military, but which might actually be available to the commercial market once the contract is all settled and the new contractor is in place and up to full operation. So, it's kinda a bucket of worms . . . strong possibility of uncertain ammo manufacturing capacity during this time of real transition – probably – maybe.
“It just so happens that Lake City is also a main source of component parts for aftermarket reloaders and resellers of ammunition, too. With the military buying nearly everything Lake City is producing right, the resellers and aftermarket reloaders are finding their supply is getting mighty tight, too.
“To make the situation a ‘perfect storm of uncertainness‘, we're finding that the commercial ammo market is growing exponentially, with consumers wanting more and more ammo, raising the demand curve even higher. We talked about what might be causing this in the last WebBench – basically, more folks shooting the AR-15, with more need for ammo. Other causes are the ‘election effect‘, a possible presidential fiat to ban military rounds to the civilian market (I do not believe this to be a real factor, but it is a motivator in the market place), and finally what economists call ‘scarcity demand‘. Scarcity demand is when we go the store, and there is nothing on the shelf. We feel that momentary panic, that ‘I've gotta get some . . . the store doesn't have any’ response.
‘And finally, we really have to accept the fact that these are ‘uncertain times‘. Uncertainty is going to be with us for a great many more months. The media is hitting us with that every day in every venue available to them. Just in the last few days we've been smacked with the Supreme Court ruling on Obamacare, the Fast and Furious scandal, and the most damaging wild fires in history both in Colorado and the Northeast. Sort makes you want to turn off the noise, retreat to the patio, find some shade and something cool to drink . . . except the West and Midwest and much of the South are having a record-setting heat wave.”
http://links.brownellsinc.mkt2010.com/s ... &mt=1&rt=0