Can someone give some explanation to the 22LR shortage? I have heard so many different versions, and scare theories, etc.
It's really fairly simple. It's called supply and demand. Let's start with manufacturing. There are only so many manufacturers out there, and their production capacity is set. Along comes talks about a gun ban, increased ammo taxes, and ammo purchasing limits. Everybody wants to stock up before ammo gets expensive, and the .22 long is probably one of the more popular calibers out there. Even grandma has one on that closet shelf somewhere. Add in that regular shooters like us still want to practice, but have a hard time justifying the increased price of defensive caliber ammo, and the demand for .22lr goes even higher.
So what happens? The shooters and gun owners all run down to the LGS to buy some ammo. Soon the LGS runs out, and tries to order more. In fact, based on recent sales they want to increase their order. This makes the warehouse sell out. The warehouse calls the manufacturer, who by now has also sold out, but is making as much as they can as quickly as they can.
So now we have the LGS and the warehouse knowing they can sell as much as they can get, and also knowing they won't get as much as they have a demand for. They are faced with a dilemma. There are only two ways to maintain an inventory, and without inventory they have nothing to sell. With nothing to sell they have no income, so they have to do one of the two things. The first way is to put a ration on ammo sales so everybody can get some, but nobody is happy. The other way is to sell whatever they can get at a price high enough to keep them open when inventory runs out. This method makes at least some of the people happy. In order to sustain profitability as long as they can, they jack the price as high as they can and still sell the product. Does it work? Yes, but note what I said about raising the price as high as they can and still maintain sales.
As long as we are willing to pay the price, they will keep the price right there. When we stop paying what they are asking the price will go down. The supply will catch up to the demand and they will no longer be able to screw us.