CCI Exec sees Possibility of Price War in .22 Ammunition

Image from lmtribune.com

When I talked to ammunition insiders at the Shot Show last year, the word was that .22 ammunition production would be increased by 20 percent for CCI and Federal in 2016.  The end of 2016 is here. It looks as though the production increase is a little behind schedule, but is in the process of completion. A revamp of production facilities is occurring for CCI at the Lewiston, Idaho location.

In an interview with Business Profile at the Lewiston Tribune, Marty Zacha, Vice President of ammunition products, talked about .22 rimfire production expansion and the election of Donald Trump. From lmtribune.com:

BP: Are you seeing any reduction in sales now that a Republican has been elected president and people are less worried about new regulations for guns and ammunition?

MZ: Yes. There’s been a few order cancellations. Not a lot, but a few. If you go into a gun store, even right up here at Sportsman’s Warehouse or North 40 in Lewiston, you see a lot of guns on the shelf, where a few years ago you wouldn’t have seen that. It was harder to find what you really wanted.

BP: What will you do with the upgrade if demand for rimfire ammunition plummets?

MZ: This plan was born more to reduce costs and improve efficiency. Historically in the ammunition market, when things start to go soft, which we’re starting to see right now because of the election, it becomes a price war. If the market changes, the rimfire equipment can be switched to manufacture power loads that drive fasteners into steel and concrete in construction and stunners for the meat processing industry. We’ve done those in Lewiston for years. (for over one half century) That’s a very big business for us. It has been anywhere from about 12 percent to 50 percent of what we do in Lewiston. There’s points where we can adjust if need be depending on what the market is doing. It could be bigger or we might redeploy somewhere instead of what we originally planned.

BP: Could Vista Outdoor choose not to order equipment for later phases of the project?

MZ: It would take a very dramatic market correction to make that happen.

Note that Mark Zacha suggests a price war in .22 ammunition is a high possibility. President Trump has not been inaugurated. The increased production at the Lewiston facility has not come on line.  The plant should come on line in the next few months.

.22 LR prices have been slowly dropping.  Two months ago, I predicted that we would see bulk .22 LR ammunition for sale at 4 cents a round by October of 2017.

I stand by that prediction. 

©2016 by Dean Weingarten: Permission to share is granted when this notice and link are included.

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