[Alpacasite] Re: You should resign as a Director of the Alpaca Fiber Cooperative

--- In Alpacasite@yahoogroups.com, "Chris Miller" <chris@n...> wrote:
>
> OK, I have been lurking for quite some time now. I am interested
in the
> business, mainly because I have the available land, I love the
animals, and
> I love the idea of having the possibility of another income source.
I have
> been to seminars, had farm visits, picked animals, I think I want to
> specialize in Suri's. Every person I have talked to in the business
talks
> about the importance of the fiber market, and that is the goal for
the
> industry. Who would know better about the truth of this statement
than the
> Director of the Fiber Cooperative?

Slight correction here, I am one of seven people sitting on the Board
of Directors of the co-op. All of us are dedicated to the future of
the alpaca industry. All of us share the opinion that the high end
will require a sustainable market for the produce of these wonderful
creatures. All of us believe in the power of collective action in
insuring the long term success of the industry.

We also disagree on many of the details :-)

None of us will use this forum for official correspondence with co-op
members, so you should take what I say as my opinion only. I do not
wish to speak in my capacity as Director in this forum, although I do
feel that my position may provide some insight not always shared by
others.

> Do people in the industry disagree with
> the numbers given by Mr Merrill, or is it the grim truth? I
understand
> everyone on this list has something to lose if this is in fact the
truth,
> and that would cause for some defensiveness to his statements, but
for an
> industry that prides itself on integrity shouldn't this be addressed
> truthfully with people like me, potential buyers?
>
>
>
> Not one person in the industry has given this opinion to me about
the future
> of the fiber market. Am I to assume that alpacas are a fad
livestock and
> change my business plan to get in, make as many sales as possible to
recoup
> my investment, and try to do this all the while without using the
future of
> the fiber market as a selling point, instead of slow growth, high
quality
> breeding, and focused marketing?

The US alpaca industry will evolve. It has to. The herd is growing
at an exponential rate. You can see this simply by using ARI
statistics. Use the last numbers for US herd size and muliply by 1.18
for as many years into the future as you wish to look.

I encourage everyone to look at the National herd growth, since most
of us start out with the idea of looking at only our own herd growth.
Much better to start with the big picture and then see how we fit in.

If you look at the numbers, you may, like me, conclude that there will
need to be a paradigm shift at some point. That shift can be easy or
hard, but it will come. At some level everyone realizes this. Is
there a single breeder that has not asked how long the current market
will last?

The longer we wait - the more passively we wait, the more painful this
shift will be. And, if we wait to long and remain too passive it
decreases the chance of a successful shift.

I remember sitting in a room in Portland, Oregon in 2001 listening to
Rachel Hendrickson talk about the value added chain with alpaca fiber.
Quite a inspiring presentation that she made that day. One thing she
said that stuck in my mind was that we should build our business plan
around the idea of a $500 animal. If we could make that work, then we
were on the right path.

Does that mean all alpacas should sell for $500? Of course not. But
I can tell you that right now there are alpacas selling for far less
than $500, right here in the US. I sold one of them earlier this
year. He was a hayburner boy, healthy but of only average fiber
quality and three years old. I was offered $375 and I took it.

Some would call me a bottom feeder. I would call myself $375 better
off than I was before the sale.

And I did not begrudge the sale, because our business plan is based on
the idea of a $500 animal.

I sold a promising yearling male for $1500 a month later. I could have
held out for more I suppose, but that $1500 was positive cash flow,
which any business can use from time to time.

And, I sold females for substantially more (though not a quarter
million!).

As the industry changes over the next decade it will also op-en up to
many more people.

There will remain a very high priced top end, populated by show
animals.

There will be a middle area of people producing sound breeding stock
for production farms. These animals will sell for reasonably high
prices, though not top dollar. They will be valued for production
traits - ease of care, reproductive soundness, commercial fiber
qualities (like consistancy), etc.

There will be production herds. These owners will have need of good
breeding stock to replenish their herds, but they will play the
numbers game and make their money in the same ways that sheep and goat
producer do.

There will be small flock owners, just as in sheep. These folks might
use the fiber for hand spinning, or they might just like seeing some
magical creatures grazing on their small acreage.

The industry will grow and change and become more inclusive, and in
the end will be stronger and better.

These things will come to pass. The only question is whether we, as a
collective industry, will take steps to influence how they come to be,
or if we will sit back unprepared only to allow reality to force
itself upon us.

It is our choice.

I know for a fact that there are breeders out there that will discuss
these things with you, realistically and without pulling any punches.
If you haven't found them yet, then keep looking.

Most of the seminars that you will be invited to are little more than
a way for the hosts to sell animals. Recognize them for what they are,
and the useful information that you hear will have more value.

Don't spend your money unless you have a plan. If you buy alpacas, buy
because you love the animals, not because you expect to get rich.

Know at what level you want to participate at in the industry. Know
exactly what your costs of entry will be, including all of your
infrastructure and equipment. Farming is a capital intensive
occupation.

Know that if you are in the right location you can easily make $60k a
year selling finished product out of a farm store, but also know that
if you are in the wrong location you could have $10k in inventory
sitting on shelves in your closet.

Enter the industry on your terms, and with your plan well established
in your mind. Remember, not all of us have the meticulous attention to
detail and record keeping, and the competitive nature that leads to a
herd like Mecklam's. Nor do all of us have the salesmanship and
marketing savvy that would support on operation like Safley's. Few of
us have the personality, capital or inner drive that could create
something like Magical Farms, nor do we all have the personality,
connections, values and desire for quality that creates a herd like
Derwydd's (just to name a few).

If you don't have what it takes to really succeed at that level, don't
frustrate yourself. Don't accept the idea that to be successful you
must follow their path.

Join us with open eyes, an open mind and a clear plan and you will be
part of what can only become a successful industry - in the long term
- but be prepared for a rough ride between here and there. There is
an awful lot of momentum that is keeping us all stuck in a rut. It
leads to in-fighting and condemnation that is unnecessary. That is
just how it is when strong personalities vie with each other in trying
to direct the bus we are all on.

There is a destination that will serve the needs of many, if not all,
industry players. The only real question is what route we will take
to get there.

I think that is a full nickel's worth there...

John Merrell
Gateway Farm Alpacas
http://www.gateway-alpacas.com
Alpaca, a natural elegance...

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