The Emperors New Clothes.
High animal prices have been a major distraction from the importance of establishing a viable market for alpaca fibre in the US. However, this is changing and increasingly breeders recognise that the long term future of the whole industry from elite breeders down rests on a healthy market for alpaca fibre.
The US fibre cooperative got off to a good start in 1998 and has recently done some soul searching to stay on track. They are now in the process of returning to their roots as an agricultural cooperative. To understand what drives the cooperative it is useful to start with the economics at a farm level. It is generally accepted that it costs around $150 per annum to keep an alpaca in feed, vaccines and so forth. Although some farms have costs as low as $50 per annum. Making some assumptions about fleece yield we arrive at a cost of about $22-30/lb of wool. Next, we look at the costs to get the fibre off the animal and off the farm; this is currently running at about $5.24-6.67/lb of wool. Giving US farms a total production cost of $27.24-36.67/lb of wool. The latest US figures for raw fibre are Wool below 18.6 microns $2.74/lb; Mohair $1.94/lb; Cotton 49 cents/lb. The best alpaca prices are about $6/lb for royal baby white huacaya and $10/lb for royal baby white suri and the volumes traded are very small. Selling raw wool into the world market almost certainly is not going to be profitable. The key according to the US cooperative is in vertical integration and value added processing.
This is exactly what Group Inca did back in 1979. With 20 years experience of producing alpaca yarns they decided to produce a range of quality garments under the brand names TUMI and CONDOR and opened over 20 "up market" retail outlets trading as Alpaca 111. www.alpaca111.com
Now replicating this model in the US will be much more challenging and only superman could possibly get there in one giant leap. It is going to be a long process for the coop starting with the production of hand knitting yarns and products that do not have to be produced in a variety of sizes such as scarves and accessories. Fibre volume has to be increased and the selective import of raw fibre will continue. The coop is predicting a national huacaya herd of almost 500,000 within 12 years, yielding around 2.5 million lbs of prime fibre per annum. (1,242 tons). The latest coop figures show a volume of 38,000lbs in 2003 so participation in the coop has to increase dramatically.
What is possible on a national scale is also possible to a certain extent in your local community and the number of "mini mills" is growing steadily. Even though this currently diverts supply from the coop it gets the fibre out into the market as yarn or even finished products and raises income for farmers. It also educates farmers about the issues of fibre processing in a way that is only possible when you roll up your sleeves and become involved.
The national project is long term and will require substantial investment in systems, processes and in marketing. North American Alpaca has to become a brand that commands a premium price with consumers and in the long term can defend itself from cheaper alternatives. The Woolmark was introduced in 1964 to identify garments made from pure new wool and we all recognise this symbol when shopping. The Australian alpaca coop has recently introduced a symbol, which can be licensed by manufacturers and breeders for product labelling. The North American Alpaca Mark is due be launched this autumn.
As ecological concerns become more important to high end consumers, the future looks good for organic North American Alpaca fibre. According to Earth Pledge one third of a pound of pesticides, which contain known and suspected carcinogens, are used to make a simple cotton T-shirt. Sheep's wool is often from sheep dipped in pesticides containing organophosphates; even when the wool is scoured before processing the sludge can go on to pollute waterways.
"Green Fashion" is on the increase and was a major theme at the New York Fashion Week this spring with big name designers such as Diane von Furstenburg and Oscar de la Renta together with retailers such as Barneys, Nike, Patagonia and Timberland all participating.
I think "green" alpaca might suit the Emperor rather well.