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Ammo Prices vs. Metal Prices

Color me skeptical about metal prices being a prime driver of ammo prices.  I’m sure rising metal costs definitely have some effect, but let’s do some math for a bit.  You can get 100 rounds of unprimed .223 Remington brass for 17.00 from Cabela’s.  Each case weighs about 90 grains, which means a bag of 100 would weigh about 1.3 lbs.  The current price for brass is about $2.20 per pound.   Strictly on metal costs alone, that brass should cost about $2.85.

If you look at bullets, figuring an FMJ bullet is roughly 1/3rd copper and 2/3rd lead (I have no idea if this is the case, but I suspect it’s the case), lead is going for about a buck a pound, and copper for about 3.40 a pound.  So 100 rounds for the bullet is going to be 89 cents for the copper and about 50 cents for the lead.  So the total price of 100 rounds of .223, in terms of material cost, is about $4.25.

So I think there’s a lot more going into the cost of ammunition that just rising metal costs.   Surely that’s had some small effect, but I think the cost of ammo is going up because demand has gone up.  Rising fuel prices also probably have something to do with it too.   Ammo is heavy, so carting it around places is expensive when fuel is expensive.  Overall, demand is high, both because civilians are shooting a lot, and because the military is consuming large quantities of ammo.   This will drive up prices for all calibers, since machine tools used to make ammunition will be busy with military orders in military calibers, rather than making ammunition for civilians.   I suspect that new production capacity may not end up coming online, since manufacturers probably expect military demand to be short lived.  We may have to live with high prices for a while.

3 Responses to “Ammo Prices vs. Metal Prices”

  1. Jim says:

    I don’t see how comparing current metal prices to the price of ammo (or components) is relevant without looking at historical trends in prices for both (I do realize this info is harder to get and I readily acknowledge that I am too lazy to look it up!).

    What were ammo prices six or twelve months ago? Is the increase in ammo prices consistent with the increased cost of raw materials, i.e., did raw material prices rise at about the same rate as ammo prices?

    It would be interesting to keep an eye on these numbers over the next few months. You might drop Steven D. Levitt a line; the impact of politics in particular might be compelling to the author of Feakanomics: http://www.freakonomics.com/blog/

  2. dan-o-mite says:

    Metal prices have infact gone down. The cost of ammunition has as little to do with the price of metal as the price of gas has to do with the cost of a barrel of oil. This is simply a matter of supply and demand. Current political circumstances are driving the demad through the roof. As with gas prices, the demand has fallen dramatically and has continued to fall despite lower prices and production of oil. Stop paying the prices and the prices will fall. Simple economics folks! It’s not rocket science! There is no shortage of ammo production! Overall production of ammo world wide has increased to levels not seen even during the cold war. What has increased, is demand. Every worried person on the face of earth who has an extra dollar to spend is buying bulk ammo to store for the “Red Dawn” scenario. I know people who have stock piled more ammo than some small countries. I’m all for having a surplus of ammo laying around but come on guys. Do you really think you will ever use 100,000 rounds of 7.62? No! unless you are some kind of Meiser who is planning on trading rounds for cigarettes then I can see it. If you want to see ammo prices fall then stop buying it. Just stop buying it for six months and see what happens.

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