[Alpacasite] Alpaca vs. llama prices - Attn: Susan Gawarecki

This is refering to:

http://finance.groups.yahoo.com/group/Alpacasite/message/105021?
threaded=1

Hi Susan Gawarecki,

The big difference in pricing between alpacas and llamas is the base
value of the fleece. People have been buying cashmere for hundreds
of years at a 5 - 20 times price premium over wool. Low micron count
camilids fiber should always command a price premium similar to
cashmere. There are llama breeders that have been successful in
breeding llamas with fine fleece in reasonable shearing weights and
they are still getting good prices. I know two that have waiting
lists for every cria. The older style llamas produced smaller
amounts of high micron fleece than an average alpaca. By the way,
when we are considering an alpaca breed standard we should consider
this lesson.

An alpaca that yields 6-8 pounds per year of mid to low 20 micron
fleece is producing a renewable product worth more than $2000 gross
(12-15 sweaters) annually. At the same time a young breeding dam in
good reproductive health will produce a minimum of 3 breed able
female and 3 fleece quality male cria. Therefore a young breeding
quality female will be responsible for 42 – 56 pounds of fleece in
her 10th year. That works out to $14,000 to 16,000 per year if you
kept and bred that dam. How much do you think the investment
community values a stock whose gross revenue increases by a factor
of 6 in ten years, that's a 40+% compound growth rate.

If that dam is for sale NOW as a stock, the investment community
would value the stock at least 5 times current revenue ($2000 X 5 =
$10,000) plus about 50% expected 2 year appreciation (50% X $11,000
= $5,500). You might ask where that $11,000 comes from. It's the
base price of one breed able female ($10,000) and one fleece quality
male cria ($1000).

The above example uses VERY conservative numbers and assumptions but
clearly establishes a base value for a reproductively sound maiden
in the $10,000 to $20,000 range. Where things get tricky is when
people pay $20,000 to $100,000 for females. The buyer is paying
a "premium" on speculation that the females genetics combined with
an appropriate stud will produce offspring that improve on the $2000
annual gross figure and the base value of the cria she will produce.

It gets even trickier when breeders pay over $100,000 for studs.
Let's say that a $200,000 stud has 100 cria, forget stud fees and
taxes for a moment, part of the value question becomes, "has that
stud increased the base value of its 100 cria by an average of $2000
each"? If so the stud fees and tax breaks are gravy.

Just some thoughts on alpaca value,
Greystone Manor
Gary Epp

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