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Auctions- The Good, The Bad, The Ugly

June 26, 2009

auction.jpgAuctions have increasingly become a popular venue for breeders to showcase the best their farm has to offer, and quite frankly, sometimes unload a couple of animals they just couldn’t seem to sell off the farm. So the debate has arisen– Are there just too many Alpaca auctions out there for our own good?

I use to wait eagerly for the handful of annual auctions to come around– Futurity (site is currently down) in the spring, then AOBA and Parade of Champions in the summer, followed by Breeders Choice and Peruvian Classic (site down as well) in the latter fall. Now there were other sales at the time, depending on how far back you go, but these were the major highlighted auctions I always tried to attend. They in my opinion offered the best quality stock, and the most lavish parties. A few minutes of flipping through Alpacas Magazine and some research online, and someone might have reason to believe that there is an Alpaca auction going on every-other weekend! Why this might be a bit exaggerated, I cannot hide the fact that there has certainly been an abundance of privately-managed auctions that have sprung up over the years. But WHY exactly? And, is it in the best interest of the industry at whole to have so many sales?

I believe Magical Farms Inc. and AmeriPaca were the first farms to hold their own private auction which they jointly started in 2000. With Magical’s herd number over 1,600 and Ameripaca a respectable 300, the Breeders Choice Sale received quality stock from a large pool of animals. Simply put, they had the numbers to run their own auction. In 2005, the two farms brought in over $3 million in sales over 91 lots sold in one night. I believe it was at this point when other breeders decided they needed to have an auction of their own…

The whole point of having an auction in my opinion, whether that be privately funded by a consortium of farms or managed by an organization such as AOBA, is to showcase the best animals. Auctions are always useful in establishing a market value, particularly for the higher-end side. I believe breeders got spoiled in the promising prices they were getting for their animals in or around when the market has seen its best year(s) ever in 2006/07. Sellers started keeping their good ones, and selling the mediocre expecting to retain the six-figure sale numbers.

However, with over 15 auctions taking place a year now in the Alpaca industry, every breeder is presumably marketing their consigned animal as “The best on the farm”, “or one not to pass up”. But, where does someone draw the line. If you take my count of 15 sales, and an average of 70 lots per auction, thats over 1,000 (1,050 exactly) animals being sold simply through these venues.

Tripp Forstner on stage at the AOBA National Auction

Tripp Forstner on stage at the AOBA National Auction

One option I’ve been vying for is to have AOBA step up to the plate, and publicly recognize or certify particular sales. If this type of accreditation  means anything to anyone, the idea is presumably breeders would only put real emphasis on those particular sales. This should in the end, cut back the number of auctions taking place in the industry, and possibly once again put those consigned animals on a pedestal, and increase sale prices.

Peace,

Coop

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2 Comments leave one →
  1. June 27, 2009 4:57

    ………..so many auctions……….But WHY exactly? And, is it in the best interest of the industry at whole to have so many sales?

    The reason why is simple, because the “promoters” make damn good money at doing live auctions. They need more alpacas in their auctions to make even more money. I dont believe They care if too many auctions hurt the industry as a whole.
    As long as there are consignor farms willing to pay the 4-5K consignor fees to put their alpaca in the auction, there will continue to be many auctions. The question ought to be, why do so many alpaca farms take the risk or putting an alpaca in auction and risk losing 4-5K?

    The host farms that put on auctions have a different agenda to hosting an auction. They want to bring potential buyers to their farm(networking), and an auction will probably accomplish this. The host farm gets consignors to pay most of the auction costs, So they have little out of pocket expense, and many potential buyers at their farm.

  2. Cooper Smith permalink*
    June 27, 2009 4:57

    Yes, that was the point I was trying to get across in my article; GREED has taken over in an industry where big dollar amounts are exchanging hands. I suppose we could have predicted this earlier. I still propose that we limit the number of auctions out there, or at least AOBA sanction only a handful. There simply are not enough buyers for the number of auction animals that are sold (or not in this case) a year.

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