By C. Greg Lutz, Pramod Sambidi and R. Wes Harrison, Louisiana State University Ag Center, glutz@agctr.lsu.edu 
 

Profile revised February 2008 by Diane Huntrods, Ag Marketing Resource Center, Iowa State University. 


Overview
During the past two decades, production of farmed American alligators (Alligator mississippiensis) for their hides and their meat has expanded significantly even as it has shifted to fewer and larger operations. Louisiana and Florida continue to dominate the industry. The 2006 value of farmed alligator production in Louisiana remained relatively constant, with $28.2 million in farm-gate value, down $1.0 million from the previous year. Meanwhile, the estimated value of alligator hides and meat in Florida reached $15.9 million in 2006.

While the number of U.S. farms selling alligator hides has declined, the number of hides sold each year has steadily increased. Total sales of hides in 2005 was $33.4 million. That same year, the U.S. farms specializing in alligator meat produced over 1.3 million pounds and registered total sales of over $2.8 million.  (Census of Aquaculture 2005.) 

Background

American alligators have been hunted for centuries in the southeastern region of North America, first by native peoples and subsequently by European settlers. The harvest of alligators has had a commercial component since the late 1800s. Audubon (1872) indicated that in the early 1800s commercial use of alligators was somewhat short-lived due to the fact that alligator leather was not extremely durable. By the mid 1800s, however, demand for alligator leather began to increase – partly for finer leather items and partly of necessity during the Civil War. In 1891 the first alligator firm was established as a commercial enterprise in Florida (Lane and King 1996). From the 1870s to the early 1900s, many skins were being tanned in New York and Europe (Stevenson 1904). 

By the 1950s and early 1960s, alligators were widely harvested throughout the southeast, with no regulations to manage or protect their populations, which were rapidly overexploited. As a result of serious reductions in breeding alligator populations, most harvests were banned by the late 1960s. Under the 1973 Endangered Species Act, the U.S. Fish and Wildlife Service placed alligators under “endangered,” “threatened” or “threatened due to similarity in appearance” status throughout their range. Once protected, the alligator population recovered dramatically. As a result of this recovery, many states reopened limited harvesting of alligators and have adopted conservative management of their alligator populations.

At present, sustainable management programs are being carried out in Louisiana, Florida, Georgia, Texas and South Carolina. Programs include a combination of farming, ranching and direct cropping of wild alligators. American alligators are still classified as “threatened due to similarity in appearance” with the American crocodile, which is considered to be truly endangered. In 1983, the U.S. Fish and Wildlife Service changed the classification of the alligator throughout its range under the Convention of International Trade in Endangered Species (CITES) of Wild Fauna and Flora from “threatened” to “threatened for reasons of similarity in appearance.”

As populations rebounded throughout the southeastern United States over the following decades, harvests of wild alligators were reinstated in a number of areas, although with strict regulations and guided by sound science. In Louisiana, the density of alligator nests sighted in annual surveys increased more than threefold from the early 1970s to the mid-1990s. By the mid- to late 1980s, alligator farming, based on collection and incubation of eggs from the wild, reached commercial proportions in Louisiana and Florida. Alligator farming and the demand for hatchlings has become an important incentive for wetland landowners in Louisiana and Florida to maintain their lands as prime alligator habitat, which in turn has benefited all manner of wildlife.

Industry Structure

Alligator farming provides producers an opportunity to generate high-valued products year-round for both national and international markets. Compared to other animal industries, it requires small tracts of land or water and does not have adverse effects on the environment. It also benefits wetland conservation where state agencies permit alligator growers to stock their farm with hatchlings collected from private wetlands, providing the owners of the wetlands some incentive for maintaining them (Lane and King 1996).

The farmed alligator supply chain begins in the marsh with eggs laid by wild females. A portion of these eggs are allowed to be collected based on nest counts, habitat ratings and population censuses. Regulations vary but are generally very strict concerning where, when and how eggs may be collected. Permits for egg collection are issued with the participation of the landowner. Eggs are then incubated under controlled conditions, and hatchlings are sold for grow-out. Access to eggs and hatchlings is a key component of the business plan for any commercial alligator farm. Farmers may establish agreements to collect eggs from private property under the appropriate permits or they may purchase legally taken eggs from collectors. In recent years, a conservative estimate of eggs collected per typical season is approximately 300,000, valued at over $1.8 million.  

Growers raise their alligators in heated houses to a length of approximately four feet, at which time some portion may be required to be returned to the areas they were originally collected from as eggs while the rest are slaughtered for hides and meat. It normally takes roughly 15 months for alligators to reach minimum marketable sizes. Once alligators are marketable, they are slaughtered and skinned, but in some cases such as in Louisiana, not before a pre-designated percentage have been returned to natural habitats to replace those that would have survived up to that point. Hides are prepared for sale and transport by cleaning and salting, while meat is butchered and packaged under sanitary conditions typical of any other meat-packing operation.

Upon slaughter, a tag is attached to the hide that will accompany it throughout marketing and tanning until the hide becomes finished leather products. A similar tagging system is used for meat products. At this point in the supply chain, meat can be considered a product, but hides are still more of a commodity.

Hides are sold for further processing through a variety of channels. Salted skins are measured and graded by size and quality, and then offered for sale either through open auctions, private auctions or direct private sales. Some portions of these hides are purchased by brokers who store and grade the skins to meet specific buyers’ needs, often on a speculative basis, while other sales involve purchase directly by tanners.

The United States is the major receiver of Louisiana’s raw farmed alligator skins, accounting for 33 percent, mostly purchased by brokers for eventual resale or by tanning facilities (primarily in Georgia and Florida). France accounts for 21 percent of the raw skin market. The rest is exported to Italy, Singapore, Switzerland, Mexico and Germany, which account for 20 percent, 19 percent, 3 percent, 3 percent, and 1 percent, respectively.

Once hides have been tanned, the final step of the supply chain involves sales to manufacturers of leather goods such as handbags, footwear and fashion accessories. Profitability of industry segments is difficult to quantify, but concentration patterns and producer perceptions over the past several decades suggests most profitability occurs in value-added sectors of the supply chain.

Supply 

Production of farmed American alligators has expanded significantly over the past two decades. Currently, farms in Louisiana (14), Florida (11), Texas (3) and Georgia (2) sell alligator hides (Census of Aquaculture 2005). This number is down from more than 120 in 1991. These trends illustrate the shifting of production and marketing to fewer, larger operations. Nonetheless, the number of alligators hides sold annually in these states has steadily increased over time, from less than 6,000 in 1985 to more than 1.3 million in 2005. Total sales of alligator hides was $33.4 million, with the average price per foot (of hide) being $25.40 (Census of Aquaculture 2005).

In 2005, 26 U.S. farms specialized in alligator meat, producing 1.3 million pounds that averaged $2.14 per pound (Census of Aquaculture 2005). Alligator meat is a healthy choice compared to other products, such as beef, chicken and fish. Farm-raised alligator is low in fat and high in protein. A 4-ounce serving (110 grams) of raw alligator meat contains 24 g of protein, only 2 g of fat, 55 mg of sodium and 55 mg of cholesterol, and provides 110 calories. Industry organizations are taking measures to educate consumers and restaurants with respect to the qualities of alligator meat. Moreover, growers and processors are producing value-added alligator meat products such as sausage and ground patties. (American Alligator, Florida Department of Agriculture and Consumer Services)

For alligator recipes, please see http://www.alligatorfur.com/alligator/recipes.htm or http://www.fl-seafood.com/recipes/alligator_recipes.htm. 

Demand

Indicators of Usage            

Usage of farmed alligators has increased steadily, although some variability occurs from year to year as a result of market forces, natural fluctuations in hatchling availability and general economic trends. Usage generally increases or decreases from year to year in response to global economic conditions and fashion trends. 

Drivers of Demand

The demand for alligator hides and meat is usually well established in North America, Europe and Japan. All parts of farmed alligators are used for various markets, but skins account for approximately 68 percent of the total wholesale value. Alligator skins are used to create a variety of products that range from fashion accessories to upholstery. Each alligator has its own skin characteristics. (American Alligator, Florida Department of Agriculture and Consumer Services)

Demand for alligator leather products is somewhat cyclical. In the past several years, a number of fashion designers have incorporated alligator leather as an accent component in high-end clothing items, including jackets, dresses and vests. Ongoing efforts to portray alligator leather products as a positive component of sustainable use and protection of the species appears to have had an impact on consumers’ attitudes. 

Competition from Other Products

Farmed alligators compete in the marketplace with wild alligator harvests, as well as other crocodilians from South America and Asia. In the southeastern United States, farm-raised alligators are generally smaller than wild alligators in size. Typically, wild-harvested alligators average around seven feet in length, while farm-raised alligators average slightly less than four feet. The average value of farm-raised and wild alligators are typically in the range of $77 and $311 per alligator, respectively.
 

Over the past several years, trade in all crocodilian products has been much more closely controlled than in the past as a result of international treaties such as CITES Treaty of Wild Fauna and Flora. Costs of production for farmed crocodilians from Latin America and Asia may be somewhat lower than those for U.S.-produced alligators, but quality considerations still provide a sizable demand and market share for American alligators.  

Barriers to Entry/Ease of Entry

Perhaps the largest barrier to entry in alligator farming involves the initial grow-out cycle and associated cash flow requirements. Additional barriers to entry involve sourcing hatchlings and feed supplies, locating legitimate buyers, arranging for slaughter and processing of meat and hides and regulatory requirements (for example, wildlife, zoning, health licensing). Economies of scale also come into play, because very small and very large operations appear to have competitive advantages.

Alligator farming is associated with numerous regulatory programs. All alligator farmers and trappers must possess licenses, and all skins must be tagged with serial numbered tags. International trade of alligator skins requires approval and documentation through the CITES Treaty of Wild Fauna and Flora. 

The following links provide more information on alligator farming regulations: 
Louisiana Alligator Regulations (Regulatory Information) 
Florida Alligator Farming (Regulatory Information)

Concentration within the Supply Chain

In each segment of the supply chain, from hatchling suppliers to tanners, there are both large and small operations. Perhaps the least amount of concentration can be found in the farming segment. The size of operating farms ranges greatly, but there has been a long-term trend toward fewer, larger operations. 

Industry Life Cycle

From a producer’s standpoint, the alligator farming industry has already evolved to a commodity product market. Although price competition may become a major determinant of market share under certain conditions, prices offered to producers generally reflect international market conditions, and profitability from year to year is determined on a farm-by-farm basis, reflecting production costs. 

Emerging Developments and Issues to Follow

Following several years of growth in the number of farmed alligators produced, the industry has begun to suffer temporary reductions in volume because of shortages of eggs and hatchlings resulting from hurricane damage to nesting habitats.

From a regulatory standpoint, alligator producers have come under increased scrutiny in recent years as a result of the volume of concentrated effluent they produce on a regular basis. Alligator sheds are flushed daily or every other day, and the designation of alligator production as a form of confined animal industry has been debated over the past several years. As pressures mount on all agriculture to address water use and wastewater issues, alligator producers may be forced to modify current management practices. 

Managing an alligator farm is very expensive. Large amounts of capital are required to start an alligator farm, and a farmer may have to wait up to three years to start generating income. The alligator farming industry is still in an expansion phase, and research is currently being conducted in several states to develop better production methods. Developing new markets for existing products and altogether new products is as important as production; therefore, market development activities must be undertaken to ensure adequate future demand at a desired price (Lane and King 1996).

One of the main problems facing the alligator farming industry is the lack of public awareness, especially in metropolitan areas, with respect to the wildlife management that forms the basis of the industry. American alligators are still classified as endangered (even though they are not), and this may discourage consumers, who are not aware of the sustainable management programs currently in place, from buying alligator products. Measures must be taken to expand current markets and develop long-term marketing plans in order to increase the demand for alligator products domestically and internationally, thus supporting stronger prices.


Sources
Agricultural Summary for Louisiana 2006, Louisiana State University Agricultural Center Research and Extension.
 
American Alligator, Florida Seafood, Florida Department of Agriculture and Consumer Services, http://www.fl-seafood.com/alligator/index.htm.

Audubon, J.J. 1872. Observations on the natural history of the alligator. (In a letter to Sir William Jardine, Baronet and Prideaux John Selby, Esq.) Edinb. New Phil. Jour. (N.S.). 2:270-80.

Census of Aquaculture (2005), USDA, NASS, 2006. 
 
Lane, Thomas J., and F. Wayne King, Alligator Production in Florida, University of Florida Cooperative Extension Service, 1996.

Leak, F.W., T.J. Lane, D.D. Johnson, and J.W. Lamkey, Increasing the Profitability of Alligator Carcasses, University of Florida Cooperative Extension Service, 2003.

Stevenson, O.H. 1904. Utilisation of the Skins of Aquatic Animals. U.S. Comm. Fish and Fisheries Report 1902:281-352.


Profile created September 2003 and revised February 2008.