John & Susan Merrell
41390 Hwy 226
Scio, OR 97374
503-394-3790
503-551-7219 (cell)
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Alpaca fiber producers should remain aware of the larger industry.  Due to the small numbers of alpacas in the United States, many owners have struck out on there own.  However, the alpaca industry in the United States is uniquely positioned to take advantage of the the value added model if producers remain focused on the big picture.

There are several aspects of the North American alpaca industry that can be capitalized on to provide producers the maximum benefit of value added agriculture.

  • Alpacas produce a desirable commodity
  • There is no organized processing industry in the United States to compete with the producers’ efforts
  • The United States alpaca industry is well organized and recognizes the value of its commodity
  • The alpaca industry has a demonstrated track record of effective national marketing
  • The alpaca industry has demonstrated the foresight to create a fiber cooperative, which may provide the foundation for a successful future value added model
  • There exists a network of regional affiliates of alpaca farms.

Many alpaca farms have already found ways to take advantage of value added agriculture. Farm stores sell products made of alpaca fiber. These may include yarns and garments made from fiber produced on their own farm, or purchased through the alpaca fiber cooperative.

Still, the value added model has yet to be widely accepted within the United States alpaca industry. This is in large part due to the fact that we remain in a "breeders market". Most of the income currently produced on an alpaca farm comes from the sale of livestock, which still commands a premium price. True to human nature, many fail to see the coming end to the current market model, and so planning for the future remains inadequate.

Statistics kept by the Alpaca Registry suggest an average national herd growth rate of approximately 18% annually. While most breeders have calculated their own herd’s growth, few have projected the national alpaca herd growth. At the current rates, the United States can expect to have a national herd of over a million head within the next 15 to twenty years, and 2 million by 2025.

Alpaca Herd Growth Chart

 

These projections will be alarming to those that have failed to build their businesses around a sustainable model. On the other hand, they are exciting for those that can recognize opportunity knocking on their door.

Within the next 15 years, the United States will produce as much as a quarter of the world’s alpaca fiber. The value of the raw fleece produced will be $20-50 million at today’s commodity pricing. If alpaca owners are successful in implementing a true vertically integrated, value added model, the value will be substantially higher. If we assume only a 25% increase in value for each stage of processing from raw fleece to yarns to wholesale finished alpaca goods, we can project a value of $32-78 million annually. If the alpaca industry carries this model on into the retail level, returns on the national clip could realistically reach or exceed $100 million dollars annually. These figures do not include the income that might be produced from the sale of livestock. The herd growth almost surely will mean a significant reduction in the value of individual alpacas, but it will also open new avenues of income for the alpaca farmer. These avenues may include a market for pets, consumption and hides.

At Gateway Farm Alpacas we are excited to be a part of the creation of a new primary agricultural industry in the United States.

 

 
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"The foreman turned round to hear patiently and, lifting an elbow, began to scratch slowly in the armpit of his alpaca jacket..."

James Joyce
Ulysses
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