.22 rimfire production facility

[wmitty]

Is there enough of a market demand to justify construction of a new .22 LR manufacturing plant? I keep thinking the hoarding of .22 ammunition will come to an end and it will again be available at a reasonable price, but it has not happened, at least here in north Texas. It seems the prices being charged for what is currently available are well over the costs of manufacturing/distribution and someone along the line is making a significant profit. How about if we pool some capital and set up a plant and capture some of the profits surrounding this segment of the firearms industry. Any entrepreneurs out there?

[chsparkman]

Interesting idea. Anyone here ever worked in an ammunition plant?

[JSnover]

I read recently the reason none of the manufacturers have opened new facilities is because the margins on .22rf have historically been pretty slim. They may not want to risk another plant on what could be a temporary spike in demand.

[lefty o]

Interesting idea. Anyone here ever worked in an ammunition plant?

i have, and i dont think anybody realizes the amount of capital/machinery it would take
. there's a lot more that goes into making the lowly 22lr than most people would believe.

[chsparkman]

i have, and i dont think anybody realizes the amount of capital/machinery it would take
. there's a lot more that goes into making the lowly 22lr than most people would believe.

I have no doubt that you are correct. It would be interesting to see a realistic summary of what is necessary.

[wmitty]

I realize a new facility would take many millions of dollars. I'm curious as to whether the initial outlay would be justified by the ridiculous (to me, at least) price folks seem to be willing to pay for .22 ammunition. If the supply does meet demand soon, will the price of a box of shells fall back to, say 3 to 4 cents per round. If not, will the "new" price result in a decline in the popularity of the round.

[starmac]

The prices the manufacturers are getting is not much more than it was several years ago, probably not much more than the amount the raw materials have gone up.
I have an idea that every currant manufacturer has already run the numbers. I seem to remember hearing that remington was building a new facility, or maybe just adding on to an existing one.
Since they are still less than 6 cents a roung at many stores (when available) I suspect they will eventually return to 4 cents or less, just nobody knows for sure when that will be. I figure if I had anything to do with a new facility, then they would be piled high on the shelves of every retailer within a week of mine opening. lol

[Motor]

This whole "shortage" of 22s is just another crock of BS. Just like the gasoline shortage in the late 70s. Don't believe for a minute that the prices are going to get that much better even if the supply does.

Everybody knows that most of us got our start shootin 22s. You make the sport more expencive for beginners and you get less beginners and that is exactly what ""they"" want.

[Garyshome]

As soon as the factory is complete the shortage will be over.

[Iowa Fox]

In my opinion the necessary start up capital along with the bureaucracy would be prohibitive. Not to mention little if any return on investment. We have to remember the lowly rimfire uses those dirty raw exposed lead bullets that no one wants. I'm sure the existing big 3 would not be happy to see a new competitor on the block, they could care less about short supply out here.

Things dried up around here long before Sandy Hook for the 22 rimfire and I don't see the shortage slowing for a while. Not until Rugers stock tanks becasue no one is buying new product.

I have been saying for a long time imports are the only thing that will take the edge off. Cargo container loads of everything from tin can grade to high quality match rifle & pistol. Does anyone know if there is a plant with production capabilites for quality & quantity that could be imported into the USA?

I have been watching cattle prices the last few weeks. When people are paying over $5.00 a pound for hamburger rimfire sales could slow to a snails pace, maybe even tank.

Imports, Imports, Imports!!! Remember the PMC from South Korea, cheap and great stuff or is that Aqulli now located in Mexico. Stuff shot great and they had neat boxes.

[Tackleberry41]

Its a huge investment for next to no return, not a very good business model. With the prices of everything up, except the actual retail price of 22, there probably is very little actual profit on 22. Anything else, well you can change it over to other calibers if need be. Everything about rimfire is special. There was an article somewhere on it. Special alloy for the bullets, the special bullet itself, the lube was different, powder, even the PIA of making the priming work. And look at what most are willing to pay for 22, in some cases $2/50. Now if there was a better margin in 22, they might..might make the investment. Part of it is they keep expecting the shortage to end then we would go back to saying we wont pay more then $2/50, and their stuck with a bunch of expensive machines.

[Jackpine]

A friend of mine the in firearms business says there is no talk about new plants. They all believe that the "shortage" is short lived and there could be no possible long term return on HUGE investment required to build a new plant.

I think there are tons of people sitting on many times the number of rounds than they have shot in the past five years, and when store shelves once again, they will sell what they are sitting on and add to the supply. I will be surprised if prices do not come down, for at least short term, to below the old prices. I hope I am around when one of the hoarders cries because he paid so much for ammo and now it is worth near nothing!!!

Jackpine

[colt1960]

Everything that I have ever seen spike in price because of a shortage. Even if its a real or staged shortage never seems to go back to the prices they were before it happened. Im a ammo hoarder myself. I bought a few thousand rounds back in the 90's when mr bill was playing the ban games with the country. $8.99 a brick. I plan on passing any thats left when im gone to family members. Ive not sold a single round for a profit and I sure could have. Rick!

[JeffinNZ]

The shortage is a factor of panic buying and hoarding. It's not as if consumption has increased. The ammo manufacturers will experience a lull in sales in the future as people stop buying and start using. No one in their right mind would build a new facility.

[mrbill2]

"No one in their right mind would build a new facility."

As long as some are willing to pay 5 to 15 dollars a box they are in no rush to produce cheap ammo.

[monadnock#5]

New manufacturers are shut out because of regulatory requirements. It takes an army of lawyers on retainer to keep up with all the new and updated changes made every year. Fed regs, state regs, local regs....it's an impossible series of flaming hoops and hurdles to overcome. Only corporations of long standing, and with an army of lawyers, are able to expand and INCREASE production.

It's the current manufacturers, with their lame excuses, that have left us high and dry. If they don't get it done, no one will. It's not up to them to decide which consumers should buy their product and which shouldn't. Oh, and forget the foreign made fodder, that could go away with one stroke of the pen.

For the record, I'm not looking for the cheap stuff. A case of Mini Mags at market pricing would make me very happy.

[Texantothecore]

The reason prices are so high is that people are still buying them. Once the buying stops the price will drop. Simple.

[Janoosh]

Why limit a new facility to 22 rimfire. There are enough "other" rimfire calibers out there, not to mention primed shells.to support a small business.

[starmac]

Why limit a new facility to 22 rimfire. There are enough "other" rimfire calibers out there, not to mention primed shells.to support a small business.

PROFIT, If the numbers were there, it would be done.

[dragon813gt]

I love these threads. So many comments from people that have no clue how to run a business. So many tin foil hats tightly wound. There is no conspiracy behind the shortage. They aren't keeping 22 in short supply to stop new shooters. This has got to be one of the most idiotic theories I've heard over the last few years. The current companies are out to make a PROFIT. They don't do this by creating a shortage and less people to buy their products in the future.

It's a simple cost benefit analysis. And the bean counters employed at the manufacturers are a lot better then keyboard commandos. If it would make them a profit, they would expand. It's that simple.

One of my favorites is the person who can't believe that a new line hasn't been started up. Or they don't understand why the line wasn't sitting under sheets collecting dust for this type of scenario. If a line is idle it makes the company no money. So they don't have any sitting in the corner collecting dust. It takes years to build a new line and get it up and running. The machines aren't just sitting on a shelf waiting for someone to buy one.

Not only would a company have the machinery cost. They would have regulatory costs. And then they have the employee costs. A new line requires people to run. This adds to the payroll. It's not like companies have to worry about Obamacare when it comes to employee health care.

Profit is what drives a company to expand. No profit, no expansion. Almost all the increased costs are coming from the wholesale level, not the manufacturers. A wholesaler has to charge more because they are selling less. The manufacturers are selling the same, most likely more, which keeps costs down. Outside if raw material costs and employee benefits there is little reason for manufacturers to raise costs. All the retailers charging more money, same as wholesalers. They're selling less so to stay profitable they have to charge more. Don't get me wrong, a lot are playing the panic up to warrant charging more.