[Alpacasite] Getting $200+ per pound of fleece

I checked your web page and note that you are offering female alpaca
for sale for between $16,000 and $22,000, fiber males for more than
$1000 and stud fees of over $1000. All this doesn't seem consistent
with your example that would indicate that raising alpacas is a
ridiculous, money losing endeavor.

I agree that there is some basis for your numbers but feel you are
presenting the current "worst case" scenario.

Alpaca fiber has some very unique features, strength, warmth and
brightness or luster. If the people guiding our industry focus on
these unique qualities, breeders will be able to benefit from higher
prices and product margins.

Are you aware that Italian suit makers buy the entire output of
alpaca worsted suit material from the South American manufacturers
at prices in excess of $500 per yard? If you call up a custom suit
maker and tell them you want an alpaca suit made, they quote prices
in the $3,000 to $10,000 range telling you that the material costs
them $600+ a yard.

We conducted an experiment last year and had some suri (90%) – silk
(10%) blend worsted style fabric made. It turned out that one pound
of fleece yielded more than one yard (60 inches wide) of fabric and
total processing cost was less than $50 per yard. We were limited by
the processor in how fine the material could be made but we got a
very soft, warm and strong material that would make excellent sport
clothes such as a riding jacket. If we had access to a mill that
could spin and weave finer material the resulting output would be
saleable to suit makers at prices in excess of $800 per raw pound.

Our experiment did show that turning alpaca fleece into product
useful to the garment industry where the product would be targeted
to the unique features of alpaca fleece could be profitable.

Hikers, climbers and campers pay ridiculous prices for "down"
sleeping bags. If you could provide a 20 below sleeping bag that
would fit in a 6 inch ball, some climbers would pay 2 – 5 times what
they are currently paying for down. People pay high prices
for "down" pillows and comforters. Alpaca fleece is warmer and
lighter than down and it really doesn't have to be low micron prime
blanket.

I admit that these pricing examples show a certain degree of lunacy
on the part of the buyers but people have been paying ridiculous
premiums for "elite" products since trading was developed and I
don't see it changing anytime soon.

Yes producing ultra light weight, stunningly beautiful, suit
material or a ultra small artic rated sleeping bag is hard and
CURRENTLY beyond the grasp of a small breeder. These difficulties
are what our industry organizations should be addressing.

AOBA and AFCNA need to conduct research in marketing alpaca fiber to
end users where the unique attributes of alpaca fleece do provide
substantial added value. I agree that turning each year's production
into 4-10 sweaters for Christmas gifts isn't the future of an
industry where people (like you) market alpaca for $12,000 to
$25,000.

Rather than resign as an AFCNA director (I admit that was harsh) get
the AFCNA to research higher margin markets for alpaca products. Can
you imagine what would happen if the host of the Academy Awards were
to wear a tuxedo made of natural black suri under those lights? Or a
white dinner jacket? Why doesn't one of the alpaca associations
commission high fashion items and present them to prominent public
figures?

Just my thoughts on how to get $200+ per pound,
Greystone Manor
Gary Epp

--- In Alpacasite@yahoogroups.com, "gatewayfarm" <johnwmerrell@e...>
wrote:
>
> Gary, there are a number of errors in your figures, errors that
are
> unfortunately freely promulgated through the alpaca industry.
>
> It is extremely difficult to get accurate prices for alpaca in th
> global market. That said, if we look here:
>
> http://www.gschneider.com/brochure/specialfibresalpacatrend.php
>
> we can see that baby alpaca has held a pretty consistant $15 a
kilo
> for the past several years. That is about $7 a pound.
>
> If we compare this with Mohair, then we can go here:
>
> http://www.mohairusa.com/
>
> and find that in October of this year it was going for a little
over
> $8 a pound.
>
> While the value of alpaca is many thimes that of wool, it hardly
> stands above other specialty animal fibers.
>
> This is something that all producers should be aware of.
>
> I am not sure where your figures of 12-15 sweaters comes from. I
think
> that currently we should use a conservative estimate of 5 pounds
of
> prime fleece per animal. We should also figure greater than 10%
waste
> in processing.
>
> So, we are probably looking at no more than 4.5 pounds of finished
> yarn per animal per year. With waste from the manufacturing
process, I
> would guess no more than 3-5 sweaters per animal.
>
> That would produce a gross income of perhaps $400-500 annually.
But,
> we have yet to subtract the costs of keeping the animals, shearing
the
> animals, or shipping off the fiber for processing.
>
> In large quantities it is probably realistic to have raw fiber
> processed to yarn for $10-12 a pound, including scouring,
spinning,
> shipping, packaging, etc.
>
> So, for argument, let's assume that it costs $50 to keep each
animal a
> year (feed, vet, infrastructure, etc.), $20 to shear each animal,
$1
> pound to ship the fiber off, and $10 a pound to spin th fiber into
> yarn. I am sure that most would agree these are conservative
figures.
>
> 50+20+(1*5)+(10*5)=$125 annual cost
>
> Let's assume the yarn is worth $20 pound at the distributor level
>
> $20*5 = $100
>
> Do you begin to see some problems emerging?
>
> So, let's process that yarn into sweaters. Let's assume we can
get
> sweaters made for $25 a unit (including labeling and packaging),
and
> we get 3 out of each animal. So now our costs are
>
> 125+(3*25)=$200
>
> We can sell these sweaters for $150 each retail, but as we all
know
> retail is twice wholesale, which is twice what the distributor
gets.
> As primary producers, let's assume we are at the distributor
level So
>
> 150/2=75/2= $37.50 a unit
>
> 37.5*3=$122.50
>
> Oops, we are now losing over $75 an animal each year producing
> sweaters that will retail for $150 each.
>
> We can of course try to vertically integrate at a higher level.
We
> could become wholesalers, or even retailers. The problems there
have
> to do with exponentially increasing expenses, since we now need to
> maintain inventory and pay warehouse staff, sales staff,
accountants,
> managers, etc.
>
> I can assure you, the hoped for margins will evaporate quickly.
>
> Why this exercise in number crunching? We need to get realistic.
>
> I think that it is reasonable to look towards a time when we can
see
> actual returns of $15-20 a pound to the fiber producer. This, of
> course, does not take into account the producers costs, meaning
that
> it will be incumbent on the producer to reduce their production
costs
> to a level that maintains profitablity. That means the end of $25
a
> head shearing, Igg testing on every animal, expensive veterinary
> interventions, routine chemical parasite controls, etc.
>
> In short, it means transitioning into a true livestock industry.
>
> Can this be done? Of course, but only with foresight, planning,
and a
> realistic appreciation of the task at hand.
>
> Further, it will be through this transition that a market will be
> maintained for high end animals. Without a SUSTAINABLE foundation
(i.
> e. livestock industry) the whole house will collapse. Continuing
the
> myth of $5 an ounce fiber does no one any favors at this point in
> time. it was good marketing 10 years ago. Now is the time to get
> real!
>
> It is good to keep in mind that we will have in excess of one
million
> alpacas within the next 15 years. It is also important to
understand
> that the figures I share above assume collective efforts to
harvest
> and process the fleece our animals produce.
>
> As a Director of the Alpaca Fiber Cooperative I have spent many
hours
> agonizing over these numbers. It might be easier if we were not
> involved in a global economy, but such is not the case. We must be
> prepared to compete with low priced goods from Asia and South
America.
>
> I assure you, experienced livestock producers shake their heads in
> disbelief when they see figures like what you have shared below.
>
> John Merrell
> Gateway Farm Alpacas
> http://www.gateway-alpacas.com
> Alpaca, a natural elegance...
>

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