Is this the way you understand how primer makers have always operated, or just during this crunch? Primers have never been a surplus item, the retail market for reloading components dates back 150 years.
With few exceptions, the primer makers are all ammo mfgs too. CCI, Federal, Rem, Win, Fiocchi, so yes, they are going to channel primers to their own ammo plants to run the loading machines 24/7, decreasing the primer supply. Why sell primers at 3 cents a pop when you can sell ammo at 3x the normal prices. Big profits generate big dividends.
btw, the primer/ammo shortage exists only in the USA. My friends in PR, Aus, Germany are having no trouble finding ammo or reloading components. The prices overseas have gone up, but not even close to the extent we are experiencing in the good old US of A.
As far as I know, there is nothing to stop foreign manufacturers from filling in the gap. Is some left controlled bureaucracy preventing foreign suppliers from upping their imports? If so, that would be an artificial manipulation of the market. By it's self it would not drive up prices, but it certainly contributes to the pressure.
The supply chain was definitely a factor. Especially when you consider that a substantial portion of the precursor chemicals used in powder and primer come from China.
We may never know all the details, but there is no doubt that there are forces pushing and pulling the ammo/primer market. It's a situation where chaotic events are being exploited, some are a natural predictable consequence, while other events have been artificially generated and it has created this feedback loop that just feeds on it's self.