"There Are No Bullets for Sale"

We recently received an e-mail from one Glenn Harris in response to our “How to Think About Guns” podcast. He is right — we should do a podcast episode or book chapter on hoarding. It is certainly a great topic, especially in that economists see hoarding (and price gouging) very differently than most regular people (a point I touched on here). Anyway, below is Glenn’s e-mail. The subject line was “There are no bullets in the United States …”

…for sale that is.

Gents,

I’m interested in hoarding behavior, its economic impacts, and the freak’s point of view. 

I live in New York.  When hurricane Sandy came along the top-of-the-list item my friends with children hoarded was milk.  They gave no thought to the fact that the probability that they would lose power and the milk would spoil.  Over one million homes lost power and surprise, perishable foods spoiled.  The post-storm hoarding behavior quickly moved to gasoline.  There was plenty of gasoline in the northeast but no electricity to pump it out of the ground.  The result was a run on the gas stations that did have power.  The ability to hoard gasoline is clearly limited by one’s ability to store it.  With gas cans quickly selling out drivers waited in lines for hours just to top off their tanks with a few gallons. 

The damage in the northeast was extensive.  Many roads and businesses were closed so there really was nowhere to go.  And children can sustain life without cow’s milk quite nicely.  I survived our last five extended power outages with half a tank of gas and no milk.

What really annoys me about hoarding behavior is that now it affects me.  I’m a target shooter and recently purchased a .22 rifle for my girlfriend so we can enjoy the time and sport together (a .22 is an extremely small caliber rifle used by Olympic and competitive shooters; you are not going to defend yourself from the zombie apocalypse with a bolt-action .22).  What I cannot get for her is ammunition.  There is absolutely no .22 ammunition available in the United States.  I challenge you to search the web and find a legitimate seller.  Imagine that.  Even illegal drugs are available in abundance in the United States but not many calibers of bullets.  The strict Rockefeller drug laws in New York State have done nothing to stem supply of illegal drugs but the possibility of gun legislation has caused retail inventories to vanish.  Is it that gun enthusiasts are so law-abiding that just the threat of a new limit to their ability to purchase ammunition is enough to drive behavior and that drug users neglect the law that legislation does not have an impact on their behavior?

There is everything from the conspiracy theories to a forecasted Sandy storm of gun legislation.  What interests me is both.  How a threat, real or perceived, causes people in one case to hoard milk, gas, and bullets and in another case (drugs) to continue with business as usual.

I’d love to read about this in one of your books or hear about it on the podcast.


Jim

Its the government that is hording.
"Officials at DHS have denied to both Whispers and lawmakers that it is stockpiling ammunition. The Associated Press reported in February that DHS wanted to buy more than 1.6 billion rounds of ammunition, but DHS officials testified last week it was only planning to buy up to 750 million."
http://www.usnews.com/news/blogs/washington-whispers/2013/04/29/gao-now-investigating-dhs-ammo-purchases

Andrew

If I understand the situation correctly, the government has a standing order for 1.6 billion rounds. That doesn't mean they're going to buy 1.6 billion rounds, it only means they have the ability to buy up to that quantity at a set price.

While the situation is without a doubt annoying at the moment, in my opinion most of the blame should go towards people trying to make fast money buying and flipping ammo.

Kentucky Packrat

Ammo shortages are a perfect storm of market interference and hoarding gone wild.

On one side, you have the civilian hoarders buying like the world will be out of copper and lead tomorrow. They've done this twice in the last ten years, and before they've backed off when the market reacted with higher prices. This time, people who would normally sell into the speculation and make money are either using their supplies to obtain other calibers or are holding them for personal use into the potential of further government interference.

The government is also using its unlimited pockets to drain the market. The Department of Homeland Security is buying enough small arms ammo to run another invasion of Iraq and Afghanistan (and have contracts to buy 2-4 times what they've admitted to buying). The military is still buying, while their own manufacturing capacity is down. The resources that would normally go to the fringes of the market (7mm Magnum, reloading powders, unloaded bullets & empty brass, etc.) are being redirected to the areas being bought first.

Regulation is the third leg of this stool. Many ammo manufacturers are in gun-unfriendly jurisdictions. They are facing legislatures wanting to pass laws threatening their industry. Even if they weren't afraid that they were expanding into a bubble, they are at risk of needing to move operations. No way are they going to expand current plants (Remington is one notable exception, except that their ammo plants are in Arkansas.)

Under normal market conditions, foreign companies could step in and supply demand. However, the current administration is extremely anti-gun at the regulatory level. No supplier wants shipping containers full of ammo turned into contraband by the stroke of an ATF pen.

Personally, I want a solution soon. I have had to skip every IDPA match at my gun club this year because I can't replace my used ammo.

Read more...

econobiker

"The post-storm hoarding behavior quickly moved to gasoline. There was plenty of gasoline in the northeast but no electricity to pump it out of the ground. The result was a run on the gas stations that did have power. The ability to hoard gasoline is clearly limited by one’s ability to store it."

I am interested in the fact that gas prices did NOT rise during/after Hurricane Sandy because the New York markets were closed. Usually gas prices spike crazy like after a natural disaster such as a Sandy but the prices apparently did not after Sandy because speculators were holed up in their $20,000 per month apartments near Wall Street waiting for the markets and city to open.

Eric M. Jones

I am puzzled that gas stations were not besieged by electricians with the talent to attach gas powered generators to pump the gas. I can think of a dozen ways to get gas out of a tank safely.

What am I missing?

Ben

If it is illegal to raise prices to pay for the generator and time, what is the motivation? The owner would lose money.

ConnGator

Cabela's:

http://www.cabelas.com/product/Gamo-Copper-Bullet-PBA-Ammo/1233289.uts?Ntk=AllProducts&searchPath=%2Fcatalog%2Fsearch_within.cmd%3Fform_state%3Ddefault_state%26searchWithin%3Dtrue%26N%3D0%26Ntk%3DAllProducts%26Ntt%3Dammo%26search%3Dammo%26nttWithin%3D22%2Blong%26x%3D0%26y%3D0%26WTz_l%3DHeader%253BSearch-All%2BProducts%253BSearchWithin&Ntt=ammo&WTz_l=Header%3BSearch-All+Products%3BSearchWithin

Kevin P.

These are air-gun pellets, not firearm ammo. Search for 22LR ammo, which is what the original poster is complaining about.

Matt

"I live in New York"

Well, there's your problem. I can find .22 ammo lots of places, including online (if somewhat more expensive than I'm used to) because I live in a state that doesn't make it as difficult as possible to own a gun. I just grabbed a brick of 500 rounds from Cabela's for $25, and Cheaper Than Dirt has several options (if they ship to New York).

Gene

Try buying them today....

Chris Short

There have been some on again, off again executive orders that limited the recycling of spent .223 (NATO 5.56mm) cartridges. This limited the available casings in the market to actually make ammunition. There is some hoarding going on and I am to blame for some of it. But, I'm curious why the cost is going up and the supply isn't being replenished as fast as one would think in what is likely a very lucrative market. I would welcome some thorough investigation and thought.

James

Interesting. Could we perhaps cross-link this post to the one with all the comments about relying on the wisdom of crowds?

Gary

When thinking about hoarding behavior for milk/gas/bullets, consider that these are a different class of product than illegal drugs. M-G-B are highly controlled by distribution channels, taxation, regulations, societal acceptance, choice of substitution, and ability to abstain from use, just to name a few factors. Illegal drugs do not have these characteristics very much if at all.

Tom Krall

50 rounds .22 cal long rifle $2.69 pick up at Bass Pro Shop. Restricted sale in NJ and NYC, took all of 2 minutes to find. Stop promoting the right wing nonsense about government hoarding.
Local Walmart .22 LR, 9mm, .223, .45 cal all listed in stock!