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Old June 9, 2009, 11:03 AM   #405
Unclenick
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Join Date: March 4, 2005
Location: Ohio
Posts: 21,063
The military consumption can be checked by looking up their past RFQ's. Those are public. I do know they placed several times normal order levels at one point (I'm thinking 2007) because the stockpiles had diminished. The military is undoubtedly the original source of the shortages. This Army Times article from two years ago has some details explaining the situation.

Gunweek's June 1, 2009 issue, page 3, Business section, reports a number of relevant things:
The excise tax collection for firearms is up. They are an indicator of gun sales and they show the fourth quarter of 2008 tax revenues were up 31% from the same period in 2007.

For this year, quarterly reports from the manufacturers are all you can go by. Ruger reported a 55.5% increase over the same quarter in 2008. Olin says Winchester sales are up 20%. Sig got contracts from the U.S. Military worth $306M, so they will be busy and their prices are unlikely to go down any time soon.

Some of the makers are addressing the added demand. Colt has over $3M in new equipment. Modern CNC stuff they say they should have got a decade ago, and expect to increase production from 90 guns a day to 150.
I've heard elsewhere that CCI has a new primer line coming up either this month or next.

So right now, the extreme shortages are due to extra high consumer demand added on top of military demand. None of that investing in factory capacity would be done if demand was expected to fall completely back to old levels. So I expect we will be competing to buy supplies for awhile yet.

Incidentally, if you had invested in gun company stock in November last year, you would be sitting pretty right now. S&W went from just under $2 to a little over $7 last month. Currently about $5. Ruger bottomed at about $5 in mid-November and is currently $12. Wish I'd had the foresight to sell my IRA stocks and funds off before the election and to buy gun companies just after. Hindsight is indeed 20/20.
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Last edited by Unclenick; June 9, 2009 at 09:51 PM. Reason: typos fixed
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