John's Commentary
Thanks for visiting my commentary
page. For the most part I just like to bring my thoughts out into the open (regarding
the alpaca business). If you'd like to respond just drop me an email.
What is alpaca fleece worth and what is 'our' fleece worth??? - Jan 15th 2010
At this point it is whatever you can sell it for in whatevr form you can sell
it. The bottom line is there is no rime or reason alpaca fleece is priced the
way it is. In the US, there really is no market so it is a ripe time to
establish real pricing for raw alapaca fleece all the way to a finished product.
The Peruvians are flush with fleece so they are happy to sell it at low prices
to the rest of the world, and better yet make nice products with a mix of nylon,
or wool and sell it with the 'alpaca' name associated with it.
That all said, I'd like to establish so pricing right here and now. Lets use
another natural fiber to set pricing. Wool sells for 30 cents an ounce when sold
in tons. There are 1.2 billion sheep in the world and there are 4 million
alpacas. So 300 times more sheep.....I think that makes alpaca worth $90 per
ounce in the raw!! If that seems a bit unrealistic doesn't $5 per ounce seem
unreasonable?? Let's look at another natural fiber. Raw yak sells for $7-$9 per
ounce, there are 14 million yaks in the world, that's $25.5 - $31 per ounce.
So, tell me, does selling a 16 micron 100% alpaca scarf for $175 sound
unreasonable??? If you answered YES, maybe you weren't mean't to be one of
the lucky few to own such a fine product.
So you say, well I can get a Peruvian scarf for $15 dollars. We my scarf is
priceless to me. I have seen this animal and put my hands into his fleece. He
has won many show championships and is making a significant impact on the
genetics of the North American alpaca herd. Mine is one of only 8 scarves made
from this years fleece of this one fine alpaca.
It is all about the fiber ... fineness Sept 10th 2009
It's been a long year for many alpaca breeders. The economy is bad and that is
preventing growth of all business including the alpaca business. This in turn
means that sales are a bit harder to come by or prices are way down. Welcome to
the basic laws of supply and demand. While there is not a huge supply of alpacas
in North America....the demand is down due to job losses and a hording of cash.
All brought on by uncertainty.
Except for getting infusions of cash from the federal government, the alpaca
business is no different than many businesses in that we are all going to need
to tune or fine tune our business plans, marketing efforts and breeding
decisions. For all who survive, this will end up being a good thing.
For our part, we decided to start Vanity Apparel to take some advantage of the
fiber we had been hording for 3 years. In doing this, we had to think long and
hard about how we would position our products and who we are positioning
ourselves against. In doing that it became obvious that we could never compete
(at the level we wanted to get into the apparel business) with products from
Peru. We had/have to establish a niche that we believe is worth the extra cost
you will pay for our products over similar products from Peru. They have way to
many alpacas for us to ever complete on price alone.
But we have technology and we have hordes of data about our alpacas that allow
us to breed better alpacas in a shorter amount of time. Using our data
properly, we can and do create finer alpacas every year. With selected line
breeding being accepted, it'll only get better even faster (relatively
speaking).
Having made a boat load of blankets from individual alpaca fleeces along with
having recorded AFD, fleece weights, colors, yarn returns and much more, I can
definitively say, that finer fleeces make the BEST blankets (and hence other
products that touch the skin). While I would love to have all our animals making
5lb blankets of <20 micron AFD, I would rather have a 3.5lb blanket of <20
micron AFD over a 5lb blanket of 22 micron AFD.
I have simplified things a bit as CofV seems to play a big part in yarn return
and I suspect yarn size versus AFD will have another effect. I also don't want
to take away for 25 micron fleece. Its still very fine and very nice to the
touch but under 30 micron is a 'level' of fineness that can be felt.
So what does all this mean? It means we are breeding for fineness first, then SD
and CofV followed by staple length and I would encourage every North American
alpaca breeder to do the same. Line breeding? Sure, why not? It's done in
every other animal breeding business. I consider it part of the 'fine tuning' of
your business plan if that is the direction you'd like to go.
"EPD" or "EPI" Aug 22th 2008
Expected Progeny Difference. Being the consumate researcher that I am, I had run
across this a few months before it seemed to just explode on the scene. I had even
sent an email or 2 and had gotten no response. Guess they were to busy selling the
idea to the AOBA. Just right off the bat I'll tell you that I question the timing
of EPD's for the alpaca industry, I am curious who is making money off of it and
I am skeptical that it is the correct direction for the industry. That said, I discuss
my thought process in the following commentary.
Where do I sign up? I'm ready to input the data from my K2 blue eyed midget with
a brown spot on his tail and crooked legs. My point is that EPDs depend on data
and a lot of it. This data must come from each breeder who has used a particular
male but as you can see, the owner of the male has the most data. Without saying
too much more you can see that EPDs are self policing. Meaning that its probably
more important to understand the farms who offered the most information on a particular
male then the male itself.
No doubt I probably need to learn more about the details of the program and particularly
what information(data) is being collected. Color, density, staple, fineness, SP,
medulation..after all it is about fleece.....How do we measure density? How do we
measure staple? How do we decide what parameters? Just seems to me that it
can be a bit more complicated than the industry requires at this time AND maybe
detrimental to the growth of the industry at this time. If you are already in the
industry you can imagine (and likely already have) just keeping up with your own
data and other possible trends such as feeding regiments, biopsies and auction circuits.
If your just considering getting into the business, it can be overwhelming. Data
has to be gathered consistently to be meaningful and that means ~4500 farms need
to be doing the same thing.
If you read through the website you'll see that we support skin biopsies. It is
a test we perform to gather data about the animals within our herd. When we make
breeding decisions, it is based on this data. This tyically includes, density, SP
ratio, medulation, AFD, Primary vs. secondary AFD and organization. We match those
qualities that we want to bring out, and we try to improve on one or two of the
other qualities. (We don't think too much about color) We like to call that Expected
Prodgeny Improvement (EPI if you like acronyms). This is just our method. Snowmass
has their method and Crescent Moon has their method. At some point all are based
on one or more HERDSIRES and the data collected by the farm.
If you are into data, just look around for farms that are willing to advertise their
data. I'll use Seldom Scene Farm as a good example. Michelangelo's density has been
advertised as 107fpmm. They tested several of his prodgeny at a very early stage
because of the demand of farms wanting the information. They also stated that a
re-test will be done at a more reasonable age (after a bit more body growth). It
takes a bit guts and a bit more honesty (and money) to put data out on the table
as it can turn out good OR bad for those who track data (like us). You can bet that
doing business with these farms is likely a no lose situation as they will have
all the data you'll need to make a good breeding decision with their males.
Nothing will substitute for experience. This means a lot of things. Primarily in
this case I am talking about experience with a male and a good understanding of
the females he has been put on. Since the great males (or at least greatly advertised)
are very pricey, smaller farms must rely on smaller bits of data which usually consist
of genetic background, fiber testing and show records. So now we have come full
cirle to other commentaries posted. This is exactly how we came to acquire Genesis
without prior knowledge of what he produces. We are depending on his genetic background
including Caligula and Hemingway. We won't fully understand what he produces until
his cria start ariving next month and even then we take our biopsies at 125lbs so
our data will take a good year after each cria arrives.
I just can't leave without saying a bit about color. I always find it a bit humorous
when a farm is advertising a colored animal from a particularly great accoyo male.
Great, ".. a grey son of Caligula..". Big deal, if I bred to Caligula, I want a
Caligula....was he grey? You didn't get his color, did you get his density?, Did
you get a male that produces Poseidon's and El Nino's?? What else didn't you get?
Better yet ...What did you get?......Show me some DATA!!!!
"Stick To Your Guns" May 27th 2008
In our recent visits to The Futurity and the AOBA Nationals, we have noticed that
the animals that win blue have high amplitude crimp, fluffy faces and a bright pencil
stucture (at least in whites). I'm sure they are probably somewhat fine and somewhat
dense. Its difficult for me to comprehend as it seems just last year it was simply
a good top knot and 'nice' crimp but the finest and densest animals won blue (staple
is in there somewhere).
Little farms like ours will always be playing catch-up if we get swayed by the flavor
of the year. We MUST stick to our guns.
My opinion about crimp is quite simple. Machines can put any crimp you would want
in fleece. What crimp is better, high frequency or bold (low frequency)? How much
crimp is too much?
My opinion about brightness and pencil structure is just as simple. When a fleece
gets washed it is all destroyed.
A quick story about crimp (and brightness): We sheared of a 2" square of fleece
from a girl we had skin biopsied. She had had 2" of fleece at the time. When we
skirted her fleece for showing we noticed a short spot that had even more luster
and crimp then the rest of her blanket. It was the 2" square that had been sheared
off. It had been protected by the fleece around it. Protected from the constant
rolling in dirt and the sun. So I guess being here in dry lot conditions instead
of on nice grassy wet fields puts us at a disadvantage when it comes to shows.....or
makes our animals better deals to the discerning buyer.
While I like the curb appeal of the fluffy face and top knot that covers the eyes,
there is just no other value to that fleece. I see this as an area where individual
judges will be the difference between a ribbon or a walk EVEN if a standard is put
in place. My take is to concentrate on the best blanket....with as good of a top
knot and face fleece as possible. Some of the greatest studs have the ugliest heads
styles.
While we have centered on fineness, density and staple length as we started our
program, I have to now add consistency and blanket coverage to the mix. I should
have known that we'd eventually get there as a really smart lady in this industry
told me that is what they have done in their program. Focus on the SD and CV of
fine fleece. Thank you Julie Skinner for saving me 20+ years.
So for now, we continue to focus on the results of biopsy information including
the SP ratio (low primary counts), the difference between the primary AFD and the
secondary AFD (smaller is better) and the follicles per millimeter (density). Along
with the visual staple information, we can drive our program to high quality fleece
output from our animals. Those statistics directly affect the CV and SD of the fleece
but without the environmental effects that I have mentioned above.
A case in point: Genesis was skin biopsied at 3 years of age. His secondary AFD
was 20.5um. His fleece AFD was 20.8um. This tells me that we were spot on in his
feeding regimine (we use Norm Evans mix growth and reproduction along with fiber
nutrients). His CV was low at 18.8. a testament to his high SP ratio at 12 to 1
and the 6um difference between his primary AFD and his secondary AFD. So from this
point on there is no sense in looking at his fleece statistics as any change upward
is likely environmental. If indeed I am concerned about his 4 or 5 year staistics,
then a biopsy at that age would be used to drive our breeding decisions. Our current
direction is centered in the 3 year mark of our animals.
One more quick story: We have an animal that everybody believes is the densest animal
in our herd. Turns out she is the least dense, her fleece is coarse and is 100%
medulated. These factors give the impression that she is dense. This shearing we
were able to improve her fleece AFD by a full 7um (to 27um) through proper nutrition
and controlled feeding (she was extremely over weight at 210lbs). Her fiber size
under the skin (determined via skin biopsy) is a mere 22um. This summerizes why
we have decided to use skin biopsy results as just one more bit of information to
help us make breeding decisions.
While it would be nice to have one of the top 5 males in the country and we just
continually put him over our girls to create high quality cria, it will be even
nicer to have a top male and create the highest quality cria possible with each
breeding and continuously improve our herd each breeding season.
"New Client Starter Packages" Feb 4th 2008
While researching the alpacas business, we heard a common message that the best
starter package is the purchase of 2 bred females due in the appropriate season
for your area. The reasoning seemed to revolve around having cria to sell as soon
as possible or doubling the size of your herd as soon as possible.
After almost 2 years in the business and 13 purchases later, we have refined our
thoughts to the following: 2 females bred to the same stud with proven cria on the
ground and 2 follow on breedings to the same stud to boot. The ideal situation
is if the stud is local so you can avoid travel and breeding costs (see discussion
of 'free' breeding below).
This package is a true breeders package in that you are creating a nice baseline
for the genetics in your herd via the service sire. Your maximizing your chances
for a great cria (assume 1 out of 2) and the following year you can breed back to
the same stud, further increasing your chances for great cria. With the right females
bred to a top stud, I'd expect a 75% chance of a great cria (3 out of 4) and the
final cria is likely to be very good.
To make the deal incrementally better, buy 2 proven females. Buying the male is
a little premature unless you purchase more females but it all depends on you budget.
Its not altogether a bad move with the right amount of females.
To make the deal cheaper, buy 1 bred female with a free breedback and a pet male.
"To SHOW or Not to SHOW" Jan 7th 2008
When we first entered this business, we had thoughts of not showing animals, just
breeding and selling a few cria a year. I guess the idea was to keep the costs
down, maybe a little less anticipated aggravation and to keep a low profile. It
can be done, but you better be a damn good marketer.
If you breed alpacas for a business, you ABOLUTELY NEED TO SHOW animals and you
need to place. Certainly it is best to get a Color Champion, A Reserve Color Champion
or a First Place but in my opinion the first and most important step is to place
anywhere consistently. I regularly go to www.alpacashows.com and review past
show results and what sticks in my mind first as I scroll through the results is
the farm name and the capital letter pre-fix of the animals name.
Of course its up to each individual how detailed they want to get scanning show
results. How big is the show? What farms participated? What animals were in a particular
catagory? Who was the judge?
Just how did Snowmass, Crescent Moon and Accoyo America get big names? Just look
at the AOBA National show results since 2001. Are these programs successful? I'd
say by the auction results each of these farms participate in, they they have successful
programs. (www.celebritysales.com). At the same time you can see by my comments
throughout this website that I mention the same names over and over, yet there are
many more successful operations across the country. This is because of geographic
reasons. East coast farms show in the East, Mid-west in the Mid-west and so on.
I tend to look at the show results in our region but when selecting a male for breeding,
I look at the shows attended by that male or his progeny.
Perhaps a better example is a smaller farm here in AZ. As I scanned through shows
like the AOBA and the Futurity, I recognized HRAZ in there a few times. Heartland
Ranch down south in Elgin has had some nice show placings over the years.
Being from AZ, we of course had heard of HRAZ but if we are from another state,
scanning the show results may be the only place we would have ever seen their name
(or better yet their program results).
To sum up, although it's relatively expensive marketing, placing in shows is a necessity
for most farms who want to be recognized for their breeding program and hopefully
that will lead to sales.
"Free breeding and free re-breeds" Dec 17th 2007
Is there such a thing? Of course not!! Transportation cost money and agisting
costs money. Longer quarantine times cut into the general
60 day 'free' agisting.
Sure some farms try to buck the trend with 90 day agisting and what not. Somebody
is going to pay. I've seen contracts go both ways, a failed breeding gets
a free re-breed but not agisting, or its just flat free until you get a cria (except
for transportation). What about the pregnacy testing the second time around, it
certainly isn't cheap in this area? If I am in the market for breedings I
like the "completely free" version of the contract, if I am providing breedings,
I like a contract that requires the second agisting period and all veterinary costs
to be paid.
Its a tough call. Why is a re-breeding required? Female issues, male issues, farm
issues?
Currently we expect each contract to be unique but we expect to offer a variety
of options. I personnally like the idea of pricing my breedings at a fixed amount
based on the quality of the male and ALL costs are covered by the farm receiving
the breeding. For example, a breeding cost of $1000 would cost the receiver $1000
+ $3 per day agisting + Progesterone test + ultra-sound and of course transportation.
If the farm is willing to trust a spit test, then they can save money. If they happen
to live nearby and want to pick up their animal after 45 days, then they save money.
We can ultra-sound or you can have a vet do it...its the receiving farms choice.
Our ultra-sound is free...if you trust us!
Of course the other option is to pay a flat fee of $2000. This of course drives
the breeder to be as efficient as possible. In the case above I would expect a perfect
breeding to cost ~$400 (out of pocket), so the breeder would clear $1600 in the
best case.
As a breeder it boils down to what you think your male's breeding is worth and are
you willing to cut into that amount for any reason??? As a farm purchasijng breedings
it probably boils down to knowing the fixed cost or not (of course transportation
is never fixed).
With rising transpotation costs, I see a trend toward local breedings or longer
agisting times to avoid the 'risk of absorbtion' and hence a second trip would not
likely be required.
Please email me if you have thoughts.... john@vanityalpacas.com