When demand exceeds supply, feeding more product into distribution is the obvious answer. It’s just good business. But what if you can’t? That’s where we are with .22 Long Rifle.
We have been resoundingly criticized for reporting manufacturers all say they are running full out in .22 Long Rifle production (some of the kinder messages had more explatives than a Quentin Tarantino movie). The ammo makers are not making that up. It is not a conspiracy. I have been in two of the major rimfire plants in the United States since this “crisis” hit, and they are, indeed, running three shifts, full out. But there are not that many rimfire plants in the United States. There are foreign makers, too, with Mexico’s Aquila, Italy’s Fiocchi and Sweden’s Norma in particular stepping up to meet demand. Also making .22 LR are England’s Eley, Germany’s RWS and SK and Armscorp in the Philippines.
For domestic rimfire plants, ATK/Federal has one in Minnesota, there is the ATK/CCI plant is in Idaho, Remington has one in Arkansas, and Winchester has one in Oxford, Miss. The latter used to be in East Alton, Ill., but in order to remain profitable and competitive, Olin Corp. moved the plant about a decade ago. Notice those two words, “profitable” and “competitive.” One of the reasons we shoot so much .22 is that it is cheap. At least compared to center-fire ammunition. Granted, material costs (i.e., lead and copper) have increased but at around 5 to 10 cents a round in normal conditions, .22 Long Rifle is remarkably reliable and inexpensive. But it is not terribly profitable. Much like the promotional dove loads that hit every big box store in the country this time of year (remind me to pick up a case), they are designed for mass production and have low profit margins. Pricing, at least from the manufacturer, is extremely sensitive and competitive. They sell huge amounts of rimfire and dove loads, but no company’s bottom line financial success is made by these products. Loss leaders or thin margins, they may not be pork bellies, but sure seem like commodities.
If you have even seen .22 being made (and my friend Mike Bussard wrote an excellent piece on how they actually make it), you know it is a huge capital expense to set up a rimfire plant. It’s not like you can order a high-speed rimfire loading machine out of the Staples catalog and set it up in your garage. It takes time, land and, literally, a lot of dollars to establish a rimfire factory. Then you have to train the workers and ensure the safety of your workers and the area in which the plant resides. Priming rimfire cases is not something best left to amateurs. The question is, though, would it be worth it to go to the expense of, say, building a $250 million rimfire plant to make your company’s money back at a penny a round over the next 10 to 20 years? The answer, so far, has been a resounding no.