I would love to hear the views on this. My feeling about this industry is that it is a pyramid scheme that is being controlled and orchestrated by a handful of game farmers.

I have yet to see a trophy photo of a hunter posing next to a golden wildebeest/saddle blesbuck [insert any freak]. So who is the end user of this game? The instagram accounts of some of these Game Breeders children look like something out of a "Ellisras 90210" program. Its Landcruiser Double Cabs in the week and Porches and helicopters on the weekend [teenagers]. Now while I don't begrudge anybody making a living, someone is getting ripped off.

R 9.4 million for a Kudu? How on earth is that sustainable? It is ruining the hunting industry here that's for sure. The economics of it just don't make sense. Can someone explain it to me?
The farmer with whom we have hunted for 10 years has now gotten so caught up in this he is not shooting anymore game as he now believes he can make more money out of capturing it. Guess what? He hasn't sold a single animal yet. Not because there isn't any to catch but there are no "real" buyers.
Will this collapse? and if so when, because that would be equally scary if game suddenly didn't have a value anymore.

I do not understand it either.

<<Now you have seen one

Well ... I suppose if you've hunted Africa a few dozen times and received the SCI Hunting Achievement Award, Top Ten Award, Global Hunting Award, Pinnacle of Achievement Award, Crowning Achievement Award, Zenith Award (this falls between the 4th Pinnacle and the Crowning Achievement Awards), plus all of the Grand Slam and Inner Circle Awards (Animals of Africa, Introduced Animals of Africa, Spiral-horned Animals of Africa, Pygmy Antelopes of Africa, Africa Big Five, Dangerous Game of Africa, African 29, etc., etc., etc.) … … …

… … … etcetera, etcetera, etcetera … … …



… … … etcetera, etcetera, etcetera … … …

I guess there isn’t much left but those weird exotics. (Personally, if it were me, I’d take up another hobby … but that’s me.)

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Thanks for the pic... Terrible looking thing.

From a pure investment point of view.

Im going to work in dollars. Lets use the nice round fig of $ 1 mill for the kudu. Invest that in the markets or whatever you prefer, conservatively you can make 10% p/a? easy. After 10 years your investment should be worth $ 2.6. How is my maths? I use 10 years because that is probably the age that the offspring of this monster kudu would be when they will be hunted. Maybe 10 years is a bit much but Im rounding everything off. So you would have to shoot 333 kudu at $ 3000 each [fair trophy price?] just to get your money back from your original investment. After 8-10 years?

Maybe I've lost my grip on reality but that sounds like the worst investment in history.

quote:

Originally posted by Snav:
I would love to hear the views on this. My feeling about this industry is that it is a pyramid scheme that is being controlled and orchestrated by a handful of game farmers.

I have yet to see a trophy photo of a hunter posing next to a golden wildebeest/saddle blesbuck [insert any freak]. So who is the end user of this game? The instagram accounts of some of these Game Breeders children look like something out of a "Ellisras 90210" program. Its Landcruiser Double Cabs in the week and Porches and helicopters on the weekend [teenagers]. Now while I don't begrudge anybody making a living, someone is getting ripped off.

R 9.4 million for a Kudu? How on earth is that sustainable? It is ruining the hunting industry here that's for sure. The economics of it just don't make sense. Can someone explain it to me?
The farmer with whom we have hunted for 10 years has now gotten so caught up in this he is not shooting anymore game as he now believes he can make more money out of capturing it. Guess what? He hasn't sold a single animal yet. Not because there isn't any to catch but there are no "real" buyers.
Will this collapse? and if so when, because that would be equally scary if game suddenly didn't have a value anymore.

Snav - You are right on target. It is all a big scam as animals are traded for stupid prices in order to establish their provenience (even though no money ever changes hands). Then you take a beautiful picture of it, give it a manly Dutchman name and put it in a catalog. Then some poor dumb Dutchman wanting to get into the breeding business because he see dollar signs pays the ridiculous price because he believes the evaluation.

I have been to too many animal auctions and the new guy is always targeted by the rest as "the sucker". Too many times it works, especially after way too many Brandy and Cokes.

I hear that these prices are real. However, what is not disclosed is that other animals are included in the deal. This is an attempt to attract the unsuspecting.

I have been asked many times to invest. I always say no. When it seems ridiculous, it probably is a problem.

Game capture for trophy hunting put and take operations is one thing. Buying studs for breeding is quite another. Both are rigged to some extent but the breeding business is a friggen joke.

Unless you are on the inside rigging the prices for breeders, I would not enter the breeding business in any way or fashion. If you had Sable say 10 years ago, you could make out like a bandit. Trying to do that today is well... a sure fired way of losing a lot of money.

I see it as a pyramid scheme kinda like ostriches where here in the states. I have a friend in SA with clean buffalo.....man the prices and values he puts on them is ridiculous. He has one bull that he was supposedly offered $500,00.00 US for. I personally think he is a fool for not selling him.

.

Yep, you don't want to be the last guy that buys an emu, ostrich, alpaca, llama or exotic breeder...

quote:

Originally posted by A.Dahlgren:
<<Now you have seen one

Hope the taxidermist screws up and sends him a euro mount.

quote:

Originally posted by Opus1:


I have been to too many animal auctions and the new guy is always targeted by the rest as "the sucker". Too many times it works, especially after way too many Brandy and Cokes.

"When in a group of people where money is changing hands, if you can't pick out the sucker in a few minutes, it is you"

Have a friend who took his first hunt to SA this year. He comes back and is wanting to get into sable breeding with his outfitter.

Sure seems like a sign of the top of the bubble.

Fortunately golden wildebeest, et al. are more edible than tulip bulbs.

It will be really funny when the hunting crowd (the mean guys who hang out of AR) decide that a proper buff trophy is not a 40 inch plus buff but a old scrum cap dugga boy.

The whole animal breeding business is a ponzi scheme - the last group of buyers will regret it. I have asked often how cash flows from these trophy breeding animals ever equal the purchase price let alone time value of money and the answer has always been look what a comp sold for. Sure sign of a bubble when all analysis is based on comp sales.

Mike

Just an observation, but this discussion is pointing to one of just the many issues that keeps hunters from ever being able to seriously join forces and present hunting and its role in the modern world, in a reasonable manner.

Just my opinion, but the reason these type operations exist, is because too many people are interested in instant gratification, and how that gratification is achieved is not really a concern.

When the bubble bursts, or the ponzi scheme collapses, the SCI Inner Circle white shoe boyz (sic) will get some good deals on these freaks.

I do not understand why you have a problem with this.

Farmers can breed whatever they wish, and if there is no demand, they will stop.

No one is forced to shoot these animals - or any animal for that matter.

People do it by choice.

It is their money, and they can spend it anyway they please.

Well said, Saeed, it is no one's business other than the breeders, buyers and sellers. Given the tone of most of the people posting on this topic, anyone with any knowledge or facts about the subject is highly unlikely to expose themselves to those whose minds are already made up.

quote:

Originally posted by Saeed:
I do not understand why you have a problem with this.

Farmers can breed whatever they wish, and if there is no demand, they will stop.

No one is forced to shoot these animals - or any animal for that matter.

People do it by choice.

It is their money, and they can spend it anyway they please.

No one has a problem. I always find it a blast watching people justify bubble valuations.

Some of us are just questioning the long term survivability of this business model.

Mike

quote:

Originally posted by Tim Ferrall:
Well said, Saeed, it is no one's business other than the breeders, buyers and sellers. Given the tone of most of the people posting on this topic, anyone with any knowledge or facts about the subject is highly unlikely to expose themselves to those whose minds are already made up.

Walk me thru a simple cash flow model from a prize stud cape buffalo?

How do you justify the price on a rational return on capital framework?

Mike

quote:

Originally posted by Beretta682E:

quote:

Originally posted by Tim Ferrall:
Well said, Saeed, it is no one's business other than the breeders, buyers and sellers. Given the tone of most of the people posting on this topic, anyone with any knowledge or facts about the subject is highly unlikely to expose themselves to those whose minds are already made up.

Walk me thru a simple cash flow model from a prize stud cape buffalo?

How do you justify the price on a rational return on capital framework?

Mike

Mike,

The point is it must make sense to those who are involved in it, and it has been going on for years, so it must be worth their while.

It's a cartel of wealthy gents who share the auction cost, and then share the "stud".

US$1m shared between the 6 guys suddenly isn't too much.

quote:

Originally posted by Saeed:

quote:

Originally posted by Beretta682E:

quote:

Originally posted by Tim Ferrall:
Well said, Saeed, it is no one's business other than the breeders, buyers and sellers. Given the tone of most of the people posting on this topic, anyone with any knowledge or facts about the subject is highly unlikely to expose themselves to those whose minds are already made up.

Walk me thru a simple cash flow model from a prize stud cape buffalo?

How do you justify the price on a rational return on capital framework?

Mike

Mike,

The point is it must make sense to those who are involved in it, and it has been going on for years, so it must be worth their while.

Saeed,

Every bubble had the same story - tech 2000, sub prime 2007-2008, oil 2004-2014 (oil is the smallest of the bubbles in my opinion)

The south african game breeding ranks up there. I can work the math on captive lions pretty easily. They breed like rabbits if they are well feed and captive. You send them to the walk with lion tourist scam. Shoot the female young and grow the male for a few years. Sell bones to chinese and the shoot to tourist shooter. The male lions don't trade for millions.

Its all the other stuff - the buff, the sable that does not make sense. It can go on but the outsiders - the patsy - is only one holding the bag.

A buff takes years to become a trophy unlike a lion. Same with Sable. The stud if you are sharing it still makes little sense to pay $4 mil. as I have heard for a buffalo. A buff hunt is $20-$30K - you need hundreds to make up for just the stud fee.

Something does not make sense - the cash flows don't add up. I assume always we are dealing with rational economic agents so there has to be another angle. Either using prices to transfer capital, bidding up as a group to find a final sucker, tying game sales to other activity like farm sales.

I can see high stud fee for a race horse - for a buff that someone is going to shoot in a enclosure - that is a less than full price hunt relative to zim zambia or tz hunt.

There is something going on and I like a lot of AR members are on the outside. But even from the outside I can see the asset price and cash flows from asset don't add up especially given the nature of the animal and the experience sold - a hunt. It not lion bones to the asian market as a valuation floor which is the case in the captive lion game.

I have looked at south african game magazines at joburg airport - they look like a livestock auction.

All in all the bubble may have a good impact - keeps the zim guys (uncle bob the tax man) honest and you have a lot of game in SA. I just don't think it is sustainable and I am interested in what the other angles are.

Mike

quote:

I do not understand why you have a problem with this.

Farmers can breed whatever they wish, and if there is no demand, they will stop.

No one is forced to shoot these animals - or any animal for that matter.

People do it by choice.

It is their money, and they can spend it anyway they please.

Saeed, correct me if I am wrong

I think what Saeed is getting at is that we as hunters need to embrace a culture of tolerance, even if it is not to our taste.
It is the very same intolerance we are prone to that is driving the anti hunting movement.

Basically, stop the infighting and use that time to better the long term future of hunting.

Not sure of the details but several South Africans are in custody at the moment for allegedly illegally transporting sable out of Zim to resell in Sa last week.

Landowners can do as they please - of course. But just don't tell me it has anything to do with conservation. Free range organic farming maybe. Can't fathom why anyone would pay that money to essentially slaughter livestock so would like to hear it from the horses mouth I suppose.

quote:

Originally posted by Hunting the Box H:

quote:

I do not understand why you have a problem with this.

Farmers can breed whatever they wish, and if there is no demand, they will stop.

No one is forced to shoot these animals - or any animal for that matter.

People do it by choice.

It is their money, and they can spend it anyway they please.

Saeed, correct me if I am wrong

I think what Saeed is getting at is that we as hunters need to embrace a culture of tolerance, even if it is not to our taste.
It is the very same intolerance we are prone to that is driving the anti hunting movement.

Basically, stop the infighting and use that time to better the long term future of hunting.

Maybe I have become cynical spending my money on hunting vacations. But asking a question on why someone buys a stud buffalo for $4 mil. suddenly become a attack on the holy grail of hunting.

The hunting industry in africa is a business - I don't see why they are so defensive of their business practices.

Mike

quote:

Originally posted by Snav:
Thanks for the pic... Terrible looking thing.

From a pure investment point of view.

Im going to work in dollars. Lets use the nice round fig of $ 1 mill for the kudu. Invest that in the markets or whatever you prefer, conservatively you can make 10% p/a? easy. After 10 years your investment should be worth $ 2.6. How is my maths? I use 10 years because that is probably the age that the offspring of this monster kudu would be when they will be hunted. Maybe 10 years is a bit much but Im rounding everything off. So you would have to shoot 333 kudu at $ 3000 each [fair trophy price?] just to get your money back from your original investment. After 8-10 years?

Maybe I've lost my grip on reality but that sounds like the worst investment in history.

I question the 10 pa investment assumption. I think we are in a world of much lower returns for next 10 years.

Everything else is right on the money.

South Africa game hunting is becoming like US whitetail hunting - its more about breeding than hunting.

I have friends in with game farms in Miss who are freaks about their whitetail herd. The amount of money they spend on their 400-1000 acre fenced deer operations is crazy.

I get the US fenced hunting thing a lot better than the South African model. The Miss guys cannot import deer - it all about herd genetics. I joke they have read too much Nazi eugenics.

The South African prices make no rational cash flow sense. But there is always another angle. Lot of ANC people in the game farm and game breeding programs. Maybe its like rolex watches and gambling in Macau - money transfer mechanisms.

Mike

That's the trouble. It is worth THEIR while and nobody else's. At the detriment of the whole industry. Why does that need to be tolerated?
How would the syndicate share these "profits"?
One for you,one for me, one for them, 2 for me?

quote:

Originally posted by Snav:
That's the trouble. It is worth THEIR while and nobody else's. At the detriment of the whole industry. Why does that need to be tolerated?
How would the syndicate share these "profits"?
One for you,one for me, one for them, 2 for me?

Please explain how is this detrimental to the hunting industry.

It is not sustainable. Long term viability should be the goal.
Hunting is becoming completely unaffordable for the average guy.
The South African hunting model needs this value for money market where the average guy can go and do his annual biltong hunt. This game breeding is killing this off because these average guys see dollar signs and are closing off their properties to this.
This is very bad.
I'm not talking about big money safaris to other countries.

Are you suggesting that due to the breeding of these exotics no one else is offering normal hunts??

I somehow doubt that.

Saeed, I'm afraid it is true. A lot of the game farmers are trying to get on this band wagon and are stopping hunting to capture and sell their game. You should see some of the adverts being placed. "Impala ewe for sale with white patch on rump. Could be a genetic variation."
I'm not trying to be negative but this is happening.

It is however only a tiny portion of the entire industry.

Also remember that the hunting industry is not just South Africa, it 60% of the continent.
Hunting will never be stopped by a bunch of privileged overfed snobs in a distant country.
The US may allow these people to impose import regulations on them, but Africa will always be a hunting destination. You might just find yourself going to new places more regularly.

I dare say with the number of escalating conflicts, there will be post war zones like CAR and Cameroon with voids for hunters to fill, long before tourists think of returning.

Hunters are survivors.

quote:

Originally posted by Saeed:
Are you suggesting that due to the breeding of these exotics no one else is offering normal hunts??

I somehow doubt that.

Saeed, that is indeed the case. Despite all the foreign trophy hunters coming to SA the local meat hunters still make the biggest financial contribution to the hunting industry.
Now every game farm owner thinks he can also get 3 - 4 times more for an impala ewe on aution rather than from a local hunter.
A lot of hunters that I know have either cancelled their hunts themselves because of huge increases in fees or have had game farm owners cancel from their side with the reason that they can get more for their game on auction rather than from hunting.
Under many local hunters there is a negative sentiment towards the breeding of exotics because their yearly contribution towards the game industry has been kicked in the teeth as not good enough. The exorbitant prices has spilled over to the normal gene pool and is not sustainable but the game farm owners believe that their run of the mill impala, kudu and gnu are no suddenly all worth mega$.

When there is talk on the streets of consortiums buying into animals, money being borrowed to invest in super animals and retiring on investment in game projects the future is written in the stars.

There will be a massive correction in the value of game in SA and few of the investments in game will survive that and show a profit. Pity on the last buyer.

There's some fairly interesting and detailed background info on this stuff HERE.

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That's just propaganda.

Amazing how sensitive they are when it is questioned. That add that was placed by TA safaris REALLY hit a nerve

quote:

Originally posted by Snav:
That's just propaganda.

Pretty much.

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quote:

Originally posted by Neil-PH:

It's a cartel of wealthy gents who share the auction cost, and then share the "stud".

US$1m shared between the 6 guys suddenly isn't too much.

Yep. And like any artificial bubble this too will pop. As Saeed pointed out, this is a Free Market and sooner or later hunters will wise up (maybe) and stop paying ridiculous fees to shoot a color variation or they will find it much cheaper next door.

The only cautionary tail that I can forward is don't get suckered into the exotic game business. It is musical chairs and you will most assuredly be stuck without a chair when the music stops. The good news is, you can always eat your investment.

What I cant understand is that nobody is asking anyone for money they are buying the game with there own money why are you guys so up tide about it? it almost seems like every one cant wait for this bubble to bursts! well they have being predicting it to burst 10 years ago already and it is still growing, Namibia is also taking it up now, I own ranches it is not A easy way to make a living how ever we do it by choice having said that what is wrong if A rancher suddenly makes good money on a animal?

Is it a good thing to meddle with genetics, to alter what was naturally created by God?

The last guy who ran a similar program was Hitler, though he went a little further and used humans as guinea pigs in trying to produce the "master race".

I guess some of these breeders are no longer satisfied with rearing cubs and feeding them steroids, hormones and other crap to produce what we see today; which to the unsuspecting appears to be a magnificent lion (the likes of which you will never see in the wild).

Problem being there is a market for these unnatural freaks and some individuals will pay ludicrous prices to be able to get/have one, so in retrospect the breeders are simply cashing in without contemplating on eventual and future genetic repercussions (or are they sterile at birth)?