Ammo Shortage Will Last Deep into 2021

by
posted on December 1, 2020
ammo-shortage.jpg

Comments made by Vista Outdoor CEO and Director Christopher Metz during the company’s quarterly earnings call last month indicate ammunition will continue to be scare well into 2021.

“We currently have over a year’s worth of orders for ammunition in excess of $1 billion,” he said in his opening remarks. “This is unprecedented for our company. With demand far outstripping supply and inventory levels in the channel at all-time lows, we see strong demand continuing…”

He cautioned there are notable differences between today’s low-cartridge inventories and that of 2016, which may indicate the current situation may be longer lasting. Metz explained the volume of new shooters is one driving factor.

“According to data from the NSSF, there are 6.2 million new shooters in 2020. This rate is more than twice the number of new shooters in the former surge. Anecdotally, there is no shortage of reports of sold out shooting ranges and backlogged firearm safety classes around the country.”

In addition, the broader demographic of enthusiasts, “…has led to an increase in participation as they learn and enjoy their new purchases,” he said. “Data from the NSSF indicates these shooters are more diverse, with large increases in both women and people of color entering the sport.”

“We have cleaned inventory in all retail and wholesale locations,” Metz said. “Despite us producing flat out for 6 months, there is no buildup of inventory at any of our customers. In fact, every one of them would like significantly more. Simply put, consumer demand continues to outpace our ability to supply.”

The good news is that Vista Outdoor has purchased the ammunition factory in Lonoke, AR—formerly owned by Remington Outdoor—and churning it back toward production at or near full capacity. The Northwest Arkansas Democrat Gazette reports 300 employees furloughed by the former owner of the plant will soon be recalled to join nearly 400 still working at the facility.

Regardless of manufacturer, demand is heavy and inventory low. The trend began early in 2020 and as early as August—during Olin’s quarterly report (parent company of Winchester Ammunition)—company CEO John Fischer warned investors that, “We expect this elevated level of demand to continue at least until the end of the year.”

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