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 For some years the future growth and prosperity of the US alpaca industry has seemed assured in both demand and price. The recent economic melt-down, the near collapse of the financial markets and underlying investor insecurity together with the explosion of the housing bubble have left investors and the general public shaken and feeling somewhat battered.
It is not unreasonable to expect that the growth of the alpaca industry would be immune to these events and the market today for alpacas and alpaca product reflects our vulnerability in these trying times.
However, the things that made these animals and their custodians seemingly recession proof are the same things that will position the industry for recovery, growth and prosperity – it will offer many opportunities for growth and consolidation whilst for some it will continue to be a challenge.
There is little doubt in my mind that the structure and operational habits of the past are under change. Recognizing the changes and adjusting for a new era in industry development in a positive and proactive way will reward forward thinkers and planners as never before and will, I believe, will be the key to long-term success and prosperity for many.
The past strong growth of the industry and its spectacular financial strength have been the strength upon which many have not only entered the industry but the means by which so many have been financially and personally rewarded over the past twenty years. The breeders and grower’s who grew and developed the US alpaca industry, as we know it today, have done a fantastic job and will be well regarded when the history of the US alpaca industry is written.
The people who adjust and develop the new model for post 2009 will be the leaders for the next stage of development, in my view.
Alpaca prices have eased, buyers are much more educated than ever before, more is known about alpacas and their peculiarities, networking and mentoring is more available, the internet has opened marketing possibilities as never before, vendor financing is more readily available, growers and owners are more sharing than ever before …. the list goes on and on.
On the other side of the coin, selling animals is harder, finding well-qualified (financially) buyers is trickier, determining selling prices is more difficult and affording carry-on costs while riding out the recession (and its aftermath) is proving more difficult for many.
So, where are we?
 We have about 140,000 alpacas in the US running from new-born to 15+ years old, about half male and half female owned by a diverse cross-section of the population brought together by an intriguing and beguiling animal that produces a stunning fiber that is both exotic and relatively rare in a world of synthetics, competing natural fibers and a throw-away society of consumers.
The average owner of alpacas is over 53 years of age, is financially secure either through investments or an off-farm income, living on less than 20 acres of land across a large part of this agriculturally rich and diverse country, and is, in many cases, living a lifestyle rather than running a business.
Prices for alpacas have dropped across the board but with animals if the “fair average quality” (FAQ) range attracting the most attention. Sire mating fees are under increased price pressure and demands (from buyers) for more attention to fiber traits and production records are moving the attention to objective measurement and recorded data away from hype and marketing hyperbole.
As alpacas improve their fleeces, the distinctions between what is better than another by what we see will become harder and harder. As the fleece becomes more sophisticated so the demands of buyers will tend toward scientifically measured and supported data as against ribbons and hype.
Demand for elite alpaca genetics will continue to be strong and support high prices whilst the FAQ market will become increasingly competitive both in numbers and price points.
There can be little doubt that the show-ring will continue to pay a dominant role in identifying elite alpacas in the foreseeable future, but I do believe that fiber and follicle testing along with better recording of production data will be the primary adder of value to animals in the future.
 Every breeder has experienced the significant jump in fleece trait appearance when mating older females to significantly the better younger males of today – this is often used as an excuse for continuing to breed older females within a herd.
Breeders of better-fleeced alpacas also know that there comes a point when improvement in fleece traits is small and often hard-won. For many breeders this, while maybe not happening right now, is just around the corner and the ability to see and feel it on the farm will not be so easy and unarguable as it is today.
For example, improving micron from 28 to 25 at 3 years of age is a relatively easy thing to accomplish; to improve it from 25 to 23 is not so easy but still easier than improving it from 23 to 21 at the same age – and many breeders are at that point right now.
Another example is about understanding density and how it is reflected in truly dense fleeces. Many advertisements laud density in their copy (very few are not dense it seems) yet when asked how they define density, many cannot.
As processors become more and more demanding about objectively supported fleece descriptors as a buying tool, breeders and growers will be put to the torch in accurately and consistently describing their fiber production when they try to sell.
All of these things will dictate how we do business in the future and those breeders who practice them now, and incorporate them into their breeding and marketing plans, will be the beneficiaries of sustained demand and high prices for their animals in the future – and the future is where we will all live!
The key to determining a future for any alpaca enthusiast is understanding where they now are, where they want to go, how they intend to get there and how they can measure their progress and success – in other words, put all the resource demands in perspective by understanding where they are in the industry of today before they do anything else.
Being honest and realistic, understanding the limitations and opportunities both personally and regionally, having a clear breeding and business goal, being honest enough to become more business oriented in decision-making across the enterprise board and daring to operate differently than in the past are all ingredients to the pot of success.
Success in the future will require that things are done differently than today, it will require and reward breeders who are open to change and a new direction and may well require a need to move out of any existing comfort zones.
Just as hanging on to the pricing schedules of two years ago is not working for most people, breeding animals and fiber that reflects old breeding programs will not necessarily deliver superior animals or fleeces in the future – and will certainly not deliver higher prices or increased demand for many.
Establishing a brand based on unassailable scientific data, supported by accurate and extensive records with a clearly defined and articulated breeding plan with demonstrable consistency of reproduction will place individual breeders in positions of demand, sustainability and financial security.
It is a bright future that all of us face, it will be delivered to those who embrace the changed times we live in and for those who listen to what the market wants and can deliver!
Ian Watt
Morro Bay CA 2009
Comments and opinions are a personal perspective of the author and are intended as talking points to stimulate discussion and debate only. |
