Exotic wildlife - is it a bubble waiting to burst?

[Smirre*]

I came across this, apologies for it being in afrikaans.

Its about the extreme prices of exotic wildlife, is it a bubble that is going to burst?

Some interesting reading...


http://www.computus.co.za/Artikels/W...yse_Borrel.pdf


Whats your thoughts on this?

[Digby]

It's going to make a lot of people a lot of money and its also going to lose a lot of people a lot of money.

Outside of the question of ethics of colour breeding etc etc which is for each man to decide himself, every market will at some point reach saturation point. The rules of supply and demand in price determination will apply. In theory everything could drop to meat price, but I don't believe that will occur for a number of years, as long as hunting is legal in SA.

Admittedly I often wonder whether these high prices paid for individuals bulls are based on the actual present value of the animals using discounted cash flows or similar valuation model or whether it's just tulip mania. And if it is just tulip mania whether its a craze or a fad or simply a marketing ploy among breeders.

"You buy these 20 buffalo from me for R20 million, but you bid up to R18m for the best one and I'll sell you the other 19 out of auction for the difference which is R2m. Next week I'll do the same for you and before we know it we will be known as the "best" breeders of game in all the land and all our animals will sell at a premium" - you can alternate buffalo with cattle, sheep, artwork, etc.

whatever the scenario or reason behind it, someone is laughing all the way to the bank....

[Toxxyc]

The people who got in on this early on will smile at the end of this. The others will cry long tears.

Personally I don't care for it. I think it's a fascinating concept but I wouldn't go into business for or with it. I won't shoot down people who do this and I actually enjoy looking at the strange animals (although some of them can be damn ugly, like the pure white Springbuck I saw recently), but I am looking forward to the day when this thing might come down so that normal game prices might drop as well.

[Koebelwagen]

I came across this, apologies for it being in afrikaans.

Its about the extreme prices of exotic wildlife, is it a bubble that is going to burst?

Some interesting reading...


http://www.computus.co.za/Artikels/W...yse_Borrel.pdf


Whats your thoughts on this?

The fact of the whole matter is this:

Almost all major hunting associations and clubs have shunned colour mutations and will not allow entries of colour mutated animals into their records. There is in reality no market for these animals until these associations change their minds. This is unlikely to happen.

My opinion:

The current values are propped up by breeders i.e. not the end users. Sooner or later the pool of money will either just float in between these individuals and remain static or the bottom will fall out of the market which is more likely because the "assets" reproduce offspring that need to be bought/ utilised and they won't be because they simply do not justify the asking price. A golden blue wildebeest is still a blue wildebeest, except it has a Brakpan "paintjob".

The breeders are playing god, forcing the propagation of poor genes which historically did not allow the animals to flourish or survive in a natural environment in the quest for money to be made off these freaks of nature. The money making is not the issue, the manner in which it is being done is.

As you can surmise, I am completely against this form of breeding. When the bottom falls out of the market it will be the animals who suffer.

[Rigby]

I would like to know the following :

which hunter be he local or an American will hunt a black impala for (just throwing a number out there ) R800 000 or more ?

[Toxxyc]

I would like to know the following :

which hunter be he local or an American will hunt a black impala for (just throwing a number out there ) R800 000 or more ?

It happens, which is where the market lies as well.

[Rigby]

It happens, which is where the market lies as well.

not claiming that you are wrong , but I doubt they get hunted, I just can not see any reason , for that type of money you could have a hunt of a lifetime in Africa on a real African Safari hunting the big 5.

[Messor]

Initially I thought the bubble would burst soon, yet after thinking about the funding involved in the business I don't think so anymore.

You see, in my area I have seen many game farms pop up without anybody knowing the owner, it's always some business owners/corp from some metropolitan group, people knowing f-all about the industry. I am starting to think for many it's just an income % drop, people throwing money into the game industry, money made in another sector from the same group, and dumped into this business because if you don't it's lost to tax anyways.

If people with money, not worried about prices is involved in this business, it wont drop soon. Nor will it make sense anytime soon.

[JoeDijeaux]

Is there any industry in South Africa where there isn't obvious collusion?

[bronxlive]

This is my opinion from speaking to people in the industry and in the accounting industry, I think there is some sort of "TAX loophole" in the exotic game industry. Hence the amount of "wealthy" people getting involved.
I believe it will not take SARS too long to discover this and close this loophole.
I have no problem with this industry and with people making money because of it.

The only problem I have with this is the fact that it "hurts" the local hunting industry in the sense that biltong hunters can't afford to hunt anymore. Game farms have all changed their focus either on the foreign hunters or game breeding.

I know people that have converted cattle farms (successful ones) to game breeding farms. And should this industry fall flat, they will lose lots if not everything.