Monday, March 15, 2010

The Best of the US Auction

We have never been in an auction before, and the only one we have attended was this one last year. It was suggested we put Shelby in the auction, and after some thought, we decided we felt comfortable doing that. We have had a lot of interest in buying Shelby, but no one has come through with actually putting down money for her. We have been offered some very tempting trades, but, I feel some animals I am not willing to use in a trade, and Shelby would be one of those. We applied for the auction, she was accepted, and we paid our entrance fee.

Unfortunately, there were some unforeseen issues that came up. I don't know all the details, and it's not my story to tell. What I will say is that some people/farms did not come through on what they promised and dropped out of the auction at the very last minute. This left the organizers hanging. At one point they canceled the auction. We got a call late last week telling us it was canceled. Shortly after that we got a call from the organizers explaining that a backer come forward, and the auction was going to happen. Some of the farms that had put animals in the auction dropped out. It was offered to us that we could drop out, or, we were also offered the opportunity to add another animal in the auction. After some discussion, we decided to stick with the auction and we added Lily to our auction animals (hence my post last week about her being in the auction). We have several reason for Lily to be the one we added into the auction. For one, I wasn't giving up Po (and this was before she gave us a color banner). I have wanted a rose grey and she is exactly what I have wanted. It would take a lot for me to part with her (don't get me wrong, they all have a price on them, and for the right amount of cash I'd pack her up and send her off, it is a business, but I wasn't ready to part with her yet with the uncertainty of what she might get at an auction having never been shown). I also thought Po and Shelby are fairly similar and might distract from each other, as the same buyers might be interested in both of them. We just acquired Rosco and I think she will make a great foundation animal for us. That left Lily. Lily is white, which is not what we are breding for. We have Lily's mom and brother, and if we want, we live near the farm where her sire is, and could bred to him again. These are genetics we have access too fairly easily. Lily is quite different from Shelby, so could would appeal to different people. Lily is cute, and friendly, she could be engaging at an auction. I know there is a farm out there where she would have a great home.

Lily was in lot #10, Shelby in lot #23.

The auction started, and at first no one was bidding (initially I thought the first lot did not sell, but I have since heard that it did, just for a low amount, not many bidders). This was not a good sign. J and I decided it was ok if our girls don't sell. We can take them home and chalk it up to a good learning experience. We weren't planning to put Lily it the auction until a couple days ago, and Shelby will make some amazing cria that would be welcome on our farm.

Some lots sold, some got no bids, some did not hit the reserve.

I won't often talk money. For one, money tends to give me anxiety and it's better if I just don't go there. I am not a risk taker and that part of the alpaca business scares me (ok, freaks me out). J and I make a great team in that he pushes our farm to strive ahead (he's the risk taker), and I hold us grounded so that we don't lose our house through bankruptcy (he'd buy every great deal he could). We balance each other. As for the auction, it was what I would consider a risky thing, so I leave those decisions up to J. He's more level headed, he's more in tune with what is going on in the industry as a whole (what is a fair price, etc), and he did everything to get us into the auction. This is his thing. I trust him. In the big picture, we do make these decision together, but in the fine details, I leave that up to him. He always has a plan, and if I butt in, sometimes I mess up his plan. So in this situation, I left the details up to him, though he ran everything by me for a second opinion, and to make sure I was ok with it.

Another reason I don't talk money is that I feel these things are a private matter. The specific details of deals between farms are private. Sure I'm free to tell whomever I wish, but the other farm involved might not want people to know for one reason or another. I'd hate for my blog to blab something that another person did not want to be public knowledge. But, an auction is done in the public, these are not private deals, anyone could sit in that room and hear it all. And I'm sure there are lists of what the animals sold being posted on alpaca forums. So for this situation, I'll post about money.

We set the reserve on Lily at $5000. I know that may sound low to many farmers, but the economy is what it is. We've seen bred females listed for less. Also, keep in mind that at this point, Lily had never been shown. While we think she's great, it's not been confirmed. We set the reserve on Shelby at $7000. We had wanted more for her, and I'm sure she is worth more. But, after a year of many people showing interest in her, no one has ever come up with a cash deal (we have only been offered trades and/or breedings). We felt these reserve prices were on the low side, but priced to allow these very good quality girls to be considered a great deal.

Of our two, Lily went up to auction first. It took some time for the bidding to start, and I thought we might just be going home with her. Then J walked her into the audience and the bidding did pick up some. Before the reserve was hit, the bidding stopped, so the auctioneer asked J if he was willing to drop the reserve. We hadn't talked about this option prior, so I didn't know what he would want to do. Since he's more in tuned with what is a fair price, I left this up to him. He did agreed to lower it, and Lily sold for $4,600 (just below our initial reserve). Afterward we met the new owners, a wonderful couple from Hi-View Alpacas. They are fairly new to the industry. They said they don't really bred for white, but felt Lily would be a good addition to their herd. I told them some about Lily, commenting that she is very friendly and loves to follow our kids around. The girls' pasture includes our backyard where our kids play, and Lily will follow them around and sniff their heads. They thought their grand kids will love her. I'm glad to hear she will still have kids to watch. (I do want to note that while she does this, she is not in any way aggressive towards us, as some alpacas can develop a condition where they associate more with humans than alpacas, I do NOT see Lily doing this, she is just an above average friendly girl). They were excited about her, and even more excited when she got a ribbon the next day. I think she has a great new home!

Just to add a note, the next day after Lily won a ribbon in her class, J said he talked to a guy who said he regretted he didn't bid higher on Lily and buy her. I know she sold at a great deal.

We had some time between Lily's lot and Shelby's lot. I decided to go feed our other alpacas. It was getting late, we had chores to do, and I was starved. That way when the auction was over I could go get something to eat. I got back to the auction area just as they said Shelby was sold, I missed it. Before I left J had said he wouldn't go below reserve on Shelby. But when it was just $500 less, he decided that wasn't enough to make that much difference, so he agreed. I know Shelby sold for less than she should have. But, the economy is rough. And it's not just this auction, it's difficult everywhere. Sure we *could* get more for Shelby, but at what point? For the last year we have had a lot of interest in Shelby, but not one person has come through with actually buying her. I know sometimes there are deals that are made after the auction on the ones that didn't sell, but I was leery to wait for that, when so many times over the last year we have been disappointed by interest in her not panning out.

In the end, both of our girls sold. We are happy with our first cash sales, and know that both of these girls have great homes. As it worked out, both farms were able to take the girls home from the show, so we came home 2 alpacas less. Don't worry, we have 4 cria coming this summer :)
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