Dear Ms. Dugan:

I read with interest your Backyard Bonanza: Tax Breaks Spur Alpaca Market article in the 4/5/07 issue of the Wall Street Journal. It paints an interesting picture, but touches on a small piece of the diverse and exciting alpaca story. This story is about an alpaca adventure that is just getting started in the U.S. Let me explain!

Background - The 150 to 170 lbs. average weight of alpacas allows them to be easily managed by both children and adults. They can be housed on just a few acres because of this relatively small size, being environmentally friendly and having a herd instinct. Accordingly, alpacas are suitable for both large and small acreage farms. They serve agricultural needs such as uses for Northeastern U.S. preserved open spaces and replacing tobacco crops on Southern farms.

Each alpaca has a unique appearance as well as a unique personality. Most notably, alpacas capture the love of onlookers with their huggable, teddy bear look. This "alpaca magic" warms owners' hearts and grabs the attention of passers by. Anywhere alpacas go, they stand out due to their 16 natural colors, long necks, large dark eyes and inquisitive nature.

The Alpaca Owners and Breeders Association has more information at www.alpacainfo.com.

Uses - The alpaca adventure has many commercial, hobby and educational aspects that can involve the whole family. They are competitively shown for alpaca quality, agility & trainer showmanship at regional and national shows by children and adults alike. One of the largest alpaca shows will be held in the Harrisburg, PA farm show complex this year 4/27 - 4/29. Over 1,500 alpacas are expected to participate.

Children can learn animal responsibility with alpaca care. 4-H children train alpacas for agility and showmanship competition. I also know of a Girl Scout Troop working with alpacas. Craft spinning and weaving opportunities abound for alpaca fiber. Alpacas enjoy a proven and strong market for their fiber end products such as sweaters, hats, scarves, gloves, etc. Family members can sell alpaca apparel and accessories for additional income.

Alpacas are in strong demand. Accordingly, breeding, providing stud services and boarding can be a meaningful small business.

North American Alpaca Fiber Industry - Alpaca is a specialty fiber. It is very soft - similar to cashmere and angora in feel and does not have the "prickle factor" commonly associated with lamb's wool. Its warmth and high tensile strength translate into very comfortable, durable and long-lasting apparel, accessories and home wares. In South America, alpacas have supplied for centuries warm and luxurious fiber for clothing. Today, Peru boasts a multi-million dollar textile industry.

The U.S. alpaca adventure is on the cusp of having its own fiber industry. Mini-mill fiber processors now make alpaca fiber into products, but to handle the expected large tonnage of alpaca fiber from the growing North American herd a large volume national fiber industry needs to be crafted.

The Alpaca Fiber Cooperative of North America, Inc. ("AFCNA") is building this large volume national alpaca fiber industry. Two employees and I along with the other AFCNA Board of Directors members are pioneers in uncharted waters. We have put together a U.S. manufacturing pipeline from raw alpaca fiber through sorting by grade & color, scouring and spinning to weaving and knitting products. AFCNA has also adopted a North American Alpaca certification trademark that certifies the alpaca content of a product is 100% North American alpaca.

AFCNA is now refining this pipeline so a large fiber volume can be handled and more products manufactured. It is working with the North Carolina State University College of Textiles and two North Carolina colleges with research capability to study alpaca yarn and manufacturing processes suited to North America. Product design and marketing are also on the agenda.

Cooperative Business Model Magic - The fiber industry AFCNA is crafting, though, is not a typical entrepreneurial endeavor. It is carefully designed to maximize the farmer's income from alpaca fiber by utilizing the cooperative business model.

As I stated in my article Cranberries to Alpacas - The Benefits of a Farmers' Cooperative: "The appeal of marketing cooperatives comes from the demonstrated fact that people working together for their mutual benefit can reduce costs, generate greater income from their products, and secure services unattainable on an individual basis." As a result, over 1,200 AFCNA farm members' income from alpaca fiber is no longer set by the world fiber price. Attached is a copy of this article for your interest.

Cooperatives are extensively used in U.S. agriculture to market agricultural commodities similar to alpaca fiber in that they are worth more in the manufactured state than raw. This value added through manufacture ("consumer value") is captured by the cooperative member through net income patronage distributions. So, as AFCNA brings this North American fiber industry into full throttle, its members will benefit from the consumer value in an extensive alpaca product market and not be limited to selling raw fiber as the Peruvian alpaca farmer is.

So, Who Wins? - Corporate America, equity investors and financial institutions are not the big winners. Families, agriculture and the textile industry are the winners with alpacas. So let's applaud alpacas since these three winners are frequently overlooked in today's fast paced, bottom line focused economy.

The alpaca adventure is just getting started. It will not happen by itself! I ask you and your readers to join with the alpaca farmer and the Alpaca Fiber Cooperative of America, Inc. (www.afcna.com & www.americasalpaca.com) in making this adventure a success for the family, farmer and textile worker/owner.

I am retired from the corporate world. My family has raised and shown alpacas for the past 8 years. For the past 3 ½ years I have volunteered as a Director and past President of the Alpaca Fiber Cooperative of North America, Inc.

Regards,

Daryl W. Goodrich