2006 Alpaca Auction Prices

I've heard a number of people lately lamenting that there are too many auctions these days resulting in depressed alpaca prices. While I do agree there are far more auctions and more lots within each auction today than there were a few years ago, I don't agree with the notion that the number of auctions is resulting in depressed prices. As an industry, we have always enjoyed the "demand side" economic benefits of too few good animals to fill the demands of of our breeding programs.

As a young industry, we must be cautious of allowing the ebbs and flows of auction prices to flavor our outlook for the industry. Over the past few years, there have been a number of record setting sales. This activity, although wonderful for the sellers and titillating to those considering entry to the industry, is not as good for the industry as the posting of consistent and stable sale prices.

If anything, auction prices are driven by the quality of animals being offered. This is as it should be! If prices are at all disappointing, it's because there are too few elite animals available for auction lots.

At all of the auctions I have attended, price has been commensurate with quality. The animals with the best fleeces, confirmation, color and bloodlines have brought the highest prices while those of lesser quality have brought the lowest. This is a good thing! It shows that the alpaca market is efficient in that quality is rewarded by price.

In reviewing the Celebrity Sales auction results for 2006, the average price ranges show signs of stability in that they mirror the results from prior years. If one eliminates the high priced animals from the calculation, the averages remain well within acceptable ranges.

A summary of the results is as follows:

Date /Auction /Avg Price /High
9-06 /Eastern Extreme /$29,000 /$165,000
7-06/ Parade Of Champs /$42,500 /$205,000
5-06 /AOBA /$32,000 /$100,000
4-06 /Futurity/ $42,000/ $150,000
2-06 /Snowmass/ $59,000 /$500,000
1-06/ Am. Choice /$28,000/ $ 85,000

It will be interesting to see how the auction side of the industry will evolve as we move forward. As the number of high quality alpacas in the domestic herd increases, I believe a bifurcation will occur wherein elite and production alpacas will be sold at separate auctions.
My humble opinion.

The Value of Breeding For Quality

We have a medium fawn girl out of 4P Pachacuti who has everything one could desire in a producing female such as fleece density and coverage, confirmation, heavy bone and a vigorous constitution. the only thing lacking in this girl is fineness. We had her bred to MFI Glacial storm in an attempt to improve on the fleece characteristics of the cria. On June 19, 2006, she gave birth to a beauthful medium brown femal and at this point, it looks like we've accomplished what we intended. Of course we can never measure how much of the outcome was "engineered" by our astute planning (an outcome for which I am happy to take ful credit) and how much was the random act of nature but the result has convinced me of the value in always acquiring the best feamles one can afford and breeding them to the very best herdsires available. There are no short-cuts.
My purpose here is not to promote a particular herdsire. Rather, it is to support the value of breeding selections based on the use of progeny testing.
As we looked at the phenotype of Glacial Storm offspring and their micron counts, we deterimed that the pairing of our Schnookums and GS had the potential to achieve our breeding goal.
I can say, I've never seen a fleece like this on an alpaca before. At an early age, she shows outstanding high frequency crimp, stapling and luster. In addition, she has inherited all of her dam's strength and vigor.
She'll definately be hitting the show ring in 2007. We' expect great things from her.

The Finer Points of a Business Plan

My web site contains a page addressing the value of writing a business plan and gives a detailed outline. In addition to my web site, there are many other practical references for preparing a business plan. The following is a brief summary from How to Really Create a Successful Business Plan October 2000 By: David E. Gumpert

Keep in mind that after the first two items, the titles of the subsequent sections can vary. But every business plan should cover the subjects addressed in this overview:

Cover Page

On the cover page goes the name of your company, its address and phone number, and the chief executive's name.

Table of Contents

This should include a logical arrangement of the sections of your business plan, with page numbers.

Executive Summary

This is the heart of the business plan. It is so important to both the preparation and final effectiveness of the plan.

The Company

The business plan must provide basic information about your company: its past, present, and future. If it's a start-up, about the evolution of the market. Information is necessary as well about your company's current status. And what is it's future strategy? What are its goals and what actions are required to achieve its goals?

The Market

This is your assessment of the customer groups you've targeted, other customer groups you might pursue, the competition, and marketing efforts thus far. Is the market growing, how fast is it growing, and what evidence do you have that it is interested in your product or service?

The Product/Service

Here is where you describe your product and/or service and what makes it special and attractive. What are the components of the product/service? How much do you charge? What services don't you provide? What kind of warranties or guaranties do you provide and what are its particular provisions?

Sales and Promotion

This is your assessment of how you intend to carry out your marketing plan--how you'll reach your customers and sell to them. Do you have an in-house sales force or will you use direct mail, or contracted telemarketers to sell your product/service? What kind of public relations do you have planned? Will it be done internally or will you hire a public relations firm?

Finances

Here is where you detail your past results, if there are any, and your expectations for the future. This section should include cash flow projections, profit-and-loss statements, and balance sheets. All the figures should be cast in traditional accounting format.

Keep in mind. . . The order of the subjects listed here is not random; they are given in order of importance. It is no accident hat information about markets comes before information about products/services

As I've indicated, there's more than one way to write a business plan. Indeed, there are infinite variations on the theme. The only thing that really counts is if the plan does what it's supposed to do: sell you and others whose support you need.