Meeting Record

The Modern U.S. Reptile Industry

Ariel H. Collis, M.A.

Robert N. Fenili, PhD.

Georgetown Economic Services, LLC

Economic Analysis Group

January 5, 2011

TABLE OF CONTENTS

Page

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EXECUTIVE SUMMARY .......................................................................................................... 1

Overview of the U.S. Reptile Industry............................................................................... 1

History................................................................................................................................ 1

Reptile Laws, Regulations and Proposed New Regulations .............................................. 2

I. INTRODUCTION ............................................................................................................. 3

The Reptile Narrative: John Till’s Story ............................................................................ 4

The Counter-Narrative to the John Till Story. ................................................................... 7

II. PARTICIPANTS IN THE MODERN U.S. REPTILE INDUSTRY ............................... 12

Reptile Pet Owners .......................................................................................................... 12

Reptile Suppliers .................................................................................................. 15

Reptile Breeders ................................................................................................... 16

Mass Producers .................................................................................................... 16

Morphs and Large Reptiles .................................................................................. 17

Large-scale Breeders ............................................................................................ 18

Small-scale Breeders ............................................................................................ 18

International Trade ........................................................................................................... 20

Importers .............................................................................................................. 21

Exporters .............................................................................................................. 24

Wholesalers/Distributors.................................................................................................. 27

Retailers ........................................................................................................................... 28

Pet Superstores ................................................................................................................. 28

Pet Stores ......................................................................................................................... 29

Hobbyist Retailers ............................................................................................................ 30

TABLE OF CONTENTS

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Online Sellers or E-tailers ................................................................................................ 31

Summary of Retailers ...................................................................................................... 31

Ancillary Reptile Products and Services.......................................................................... 32

Manufacturers ...................................................................................................... 32

Reptile Product Distributors ............................................................................................ 34

Reptile Delivery Services ................................................................................................ 36

Reptile Veterinarians ........................................................................................... 37

Reptile Expos or Trade Shows ......................................................................................... 39

Other Reptile Organizations ................................................................................ 41

Reptile Display Organizations ............................................................................. 41

Reptile Entertainment Companies ....................................................................... 43

III. TURTLES, LIZARDS, SNAKES.................................................................................... 44

Turtles .............................................................................................................................. 45

Lizards.............................................................................................................................. 48

Snakes .............................................................................................................................. 49

Small and Docile .............................................................................................................. 49

Large Constrictors ............................................................................................................ 50

Venomous snakes................................................................................................. 51

Snake Morphs .................................................................................................................. 52

IV. CURRENT AND PROPOSED FEDERAL LAWS/REGULATIONS: THEIR

IMPACT ON THE REPTILE INDUSTRY ..................................................................... 54

The Endangered Species Act (“ESA”). ........................................................................... 55

CITIES ............................................................................................................................. 56

Impact of CITIES on the Reptile Industry ....................................................................... 58

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The Lacey Act .................................................................................................................. 58

Proposed Rule to List Nine Constrictors as Injurious Wildlife ....................................... 59

Impact of the Proposed Rule on Imports. ............................................................ 60

Impact of the Proposed Rule on Exports ............................................................. 62

Export substitution Under the Proposed Rule ...................................................... 64

Impact of the Proposed Rule on U.S. Reptile Businesses................................................ 65

Prices .................................................................................................................... 65

Holding Costs....................................................................................................... 66

The Economic Loss to the Reptile Industry of the Proposed Rule .................................. 67

Low-Impact Scenario ........................................................................................... 68

High-Impact Scenario .......................................................................................... 69

Long-Term Economic Loss ............................................................................................. 71

V. CONCLUSIONS.............................................................................................................. 73

EXECUTIVE SUMMARY

This report provides an overview of the modern U.S. reptile industry. The United States

Association of Reptile Keepers (“USARK”) commissioned this report to shed light on a largely

unstudied sector of the United States economy. The report details the size, scope, and flow of

trade of the reptile industry within the United States. It concludes that the U.S. reptile industry is

vibrant and has grown rapidly, but that the industry has been and continues to be impeded by

federal legislation and regulations restricting the import, export, and domestic sale of reptiles.

Overview of the U.S. Reptile Industry

 The U.S. reptile industry encompasses a vast number of participants including pet

owners, hobbyists, breeders, importers, exporters, wholesalers, pet store proprietors,

pet show promoters, entertainers, veterinarians, and manufacturers of pet food and

ancillary pet products.

 In 2009 businesses that sell, provide services, and manufacture products for reptiles

earned revenues of $1.0 billion to $1.4 billion.

 In 2009 4.7 million U.S. households owned 13.6 million pet reptiles. Reptile

owners are spread throughout the United States without a concentration in any one

area of the country.

 Reptile businesses can be found throughout the United States although reptile

importers are more densely concentrated in Florida and California than in other

states.

 The vast majority of reptile businesses are small, family-run businesses.

History

 The U.S. reptile industry has experienced a significant shift toward domestic

captive breeding over the past twenty years.

 Breeders transformed snake husbandry from a hobby to a viable profession by their

successful cultivation of uniquely colored snakes, called morphs.

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 US turtle farmers were pioneers in the global pet turtle market. U.S. turtle farmers

continue to lead the world in pet turtle production and sales.

Reptile Laws, Regulations and Proposed New Regulations

 Federal and state regulations and laws concerning reptiles have negatively impacted

the reptile trade within the United States. These laws and regulations have made

selling and shipping reptiles more difficult and more costly.

 A new regulatory proposal by the U.S. Fish and Wildlife Service to list nine

constrictor snakes as injurious wildlife life under the Lacey Act, however, goes

beyond simple increasing the costs of participants in the retail industry. The

proposal will limit the nearly all sales of the nine constrictors. If enacted, the

proposal has the potential to cause deep and lasting damage to the snake market--

the very sector of the reptile industry that has helped to drive its growth.

 If the proposal is enacted:

 In the short-term, the industry, and snake breeders and sellers in particular, will

experience significant economic losses. We estimate that revenues lost will be

between $76 million to $104 million in the first year, a loss of 5 to 7 percent of total

industry revenues.

 The long-term impact of the proposal on the reptile industry will also be severe.

 The economic loss to the industry over the first ten years after the proposal’s

enactment will be between $505 million to $1.2 billion in lost revenues, assuming

historical industry sales growth.

 Even assuming no growth, the economic loss over the first ten years after the

proposal’s enactment will be between $372 million to $900 million in lost revenues.

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I. INTRODUCTION

The modern U.S. reptile industry is young and has grown rapidly since it came of age in

the 1990s. In less than two decades, it grew from a marginal side business for a few pet stores to

a complex industry with annual revenues approaching $1.4 billion. The prime movers fueling

this growth are small, predominately American businesses.

Many of these businesses began as captive breeding operations run by reptile enthusiasts

and hobbyists. Over the years, these businesses have expanded their customer base to include

foreign pet owners. In 2009, 11.3 million live reptiles were exported from the United States,

while only 900,000 live reptiles were imported into the United States.

In short, U.S. small

businesses dominate the global reptile industry.

As the reptile businesses have grown, so too has reptile ownership. The American Pet

Products Association (“APPA”) reports that from 1994 to 2008, the number of U.S. households

that own a reptile rose from 2.8 million to 4.7 million, an increase of 68%. In contrast, the

number of households that own any kind of pet increased only 35% over that same period.

The individuals and businesses that comprise the industry have as a common feature their

wonder and appreciation of all living creatures, especially reptiles. In researching this report, we

United States Fish and Wildlife Agency Law Enforcement Management Information System

(“LEMIS”) data.

The report was commissioned by The United States Association of Reptile Keepers.

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have interviewed many owners of reptile businesses.

We have found that their lives followed a

common narrative.

We have summarized this common narrative by creating the John Till story.

The Reptile Narrative: John Till’s Story

John Till cannot remember a time when his room was not filled with animals. He would

spend most of his spare time as a kid trolling the fields and streams that bordered his

neighborhood catching mice, frogs, garter snakes, and turtles. He hung around Selligman’s

Aquarium with his friends listening to Mr. Selligman hold court, trying to pick up tips on

feeding and reptile and amphibian care. At the age of 13, when the den had been taken over by

garter snakes and salamanders and even the guest room was filling up with turtles, John’s mother

gave him an ultimatum – if he caught something and wanted to keep it, he would have to give up

an animal in his current collection. His parents were no longer buying him any more animals.

When he complained to Mr. Selligman about his mom’s new rule, the pet store owner

laughed. If John wanted to look after animals, he was more than welcome to feed the animals,

sweep up, and clean cages at Selligman’s Aquarium. He would even be paid for his labors.

Information for this report was gathered through a variety of primary and secondary sources. Our

primary sources include our interactions with reptile breeders and hobbyists at two reptile expositions in

San Diego, California and Daytona, Florida, as well as interviews and surveys of a number of individuals

in the reptile trade. For more information on these surveys and survey methodology see Appendix I:

Estimation Methodology.

Information for this report was gathered through a variety of primary and secondary sources. Our

primary sources include our interactions with reptile breeders and hobbyists at two reptile expositions in

San Diego, California and Daytona, Florida, as well as interviews and surveys of a number of individuals

in the reptile trade. For more information on these surveys and survey methodology see Appendix I:

Estimation Methodology.

The following narrative is a fictionalized composite of several of the life stories of reptile

breeders operating in the United States.

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By his fifteenth birthday, John was practically running Selligman’s Aquarium. And he

no longer just used nets to gather new reptiles as pets. He would import snakes and lizards from

South America and Africa. Often, his father would often drive John to the airport to inspect and

accept delivery of an insulated fifty pound box packed with neatly stacked containers. In each

container was an iguana or a baby Boa constrictor. While most kids his age were working hard

at mastering video games, John was learning import regulations.

When he was 16, John traveled with Mr. Selligman to Orlando, Florida to attend his first

reptile trade show. To John, it was a revelation. Breeders stood behind tables covered with

plastic containers filled with snakes, lizards, and turtles. All of the reptiles had such bright

colors and unique markings that they looked like works of art. Each table was thronged by

reptile enthusiasts, cash in hand. The best breeders were spoken of in reverent tones. Every

breeder was accessible and willing to trade tips and give breeding advice. That was the life John

wanted. He had found his calling. He wanted to be a snake breeder.

When he returned home, John read everything he could about snake breeding, just

waiting for the National Breeders Expo to come around again. At the next year’s show he

bought some fantastically colored baby Boa constrictors and planned his breeding with the

precision of a scientist. After four years, he sold enough snakes to recover his initial investment.

Every year after that, John’s business expanded. Pet stores, wholesalers, and other enthusiasts

(who John counted as his friends) were eager to purchase each newly patterned Boa that he bred.

Just as some people want to collect and trade Picasso paintings, John’s customers wanted snakes.

Some of his customers saw snakes as a good investment, some just wanted them for their

collections, and some wanted them to trade. John knew that a good collectible is something one

can enjoy, but could also trade if the offer is right.

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It looked as if John’s business would keep growing forever. At least that is what John

thought. But in 2008 John’s snake sales came almost to a standstill. People were no longer

purchasing thousand-dollar Boas. Part of the problem was the sinking economy. Part of the

problem was that, at that time, the U.S. federal government was proposing a rule change to the

Lacey Act that would result in the ban on interstate shipments of Boa constrictors, as well as

other constrictor species.

The fear that these constrictors would come under the Lacey Act caused snake prices to

drop, because people were selling their snakes cheaply in anticipation of the ban going into

effect. Boa prices plunged. A Boa that a few years ago would have sold for $1000, suddenly

sold for less than $50. Sales were barely enough to cover costs. And those costs, including food,

cleaning supplies, utilities, veterinarian services continued unabated. As a result, the industry

was in contraction. John noticed that even some of his suppliers were cutting staff. John thought

of applying for a desk job and shuttering his breeding business, but he just could not do it. He

loved the snakes too much and had too much invested in his business. The government’s ban

had not been enacted yet. Until it did, he just could not give up on his calling.

* * *

While the story above focuses on one fictional breeder, it is a variation on the story of

most of the breeders in the reptile industry.

For example:

 Ralph Davis of Ralph Davis Reptiles: “I was born in 1967 into an animal loving

family. By the time I was ten years old, I was completely hooked on reptiles. I

would go out and collect any kind of herp

I could find, turtles, lizards and most

75 FR 11808; March 12, 2010.

See also, mcreptiles.distortionsleep.net/about.html, royalconstrictordesigns.com/ index.php?

page=about-us; www.allboas.com/fascination.php; and www.blackpearlreptiles.com.

The term herp is short for herpetofauna. Herpetofauna refer to a category of animals which

includes reptiles and amphibians.

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definitely snakes! My bedroom was full of tanks and makeshift containers for all

my "wild" pets. I worked off and on at the local pet shop for supplies, not money. I

would also work for animals; at the time, Savannah monitors, skinks, and ball

pythons were my favorites.

This passion for reptiles lasted into my teens and right into adulthood. I cannot

remember as a kid or a teen ever not having a room full of reptiles…and it is still

that way now!”

 Kim Thomas of The Frog Ranch: “Founder Kim Thomas spent the majority of his

childhood growing up in the fields, streams, and ponds of California. He spent

nearly every day collecting, keeping and caring for frogs, snakes and any other

creature he was able to catch. In 1968 at the age of 12 he began his "professional"

career at a pet store feeding, watering and cleaning cages. Rising every morning at

5 a.m. in order to finish in time to get to school, his afternoons were spent

delivering newspapers and then it was off to the fields and creeks until dusk.”

 Kathy Love of CornUtopia: “I've been interested in herps (reptiles & amphibians,

collectively) since early childhood. I grew up absorbed with all wildlife, including

early fascinations with horses, cats & dogs. Being a veterinarian was the first

career I ever dreamed of obtaining. I learned about herps through TV, visiting the

local Milwaukee Zoo and Museum of Natural History, and through books.

My first wildlife experiences were with local garter snakes, Thamnophis sirtalis,

that neighborhood kids found in wooded lots near my home and used to try to scare

me. That sure backfired on them! My initial fears quickly subsided and were

replaced by curiosity as snakes soon became pets, and later a part-time pet business

(called "Jungle Hut") in my hometown of Waukesha, Wisconsin, USA.”

Business owners like these, the John and Jane Tills, are responsible for the rise of the United

States reptile industry and for its transformation into the billion dollar industry that it is today.

The Counter-Narrative to the John Till Story.

Some critics believe that the reptile industry is dominated by unscrupulous individuals

who smuggle reptiles into the United States to make easy profits. These critics contend that

http://www.worldofballpythons.com/breeders/ralph-davis-reptiles.

www.thefrogranch.com/about.php.

http://www.cornutopia.com/corn%20utopia%20on%20the%20web/20about%20kathy%20love%2

0cornutopia%20corn%20snakes%20cornsnakes.htm.

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retailers knowingly sell these illegally smuggled reptiles to owners who are desperate to own

reptiles as pets and who do not care where the reptiles come from.

However a review of

business and trade press about reptile smuggling provide little to substantiate this picture of the

reptile industry. The evidence shows that the amount of live reptile smuggling that takes place in

the United States is small. The handful of high-profile cases involving reptile smuggling, which

have often been repeated in the popular press, took place twenty or more years ago.

Breeders not smugglers form the core of the modern reptile industry. The industry was

built up by innovative, John Till-type breeders such as Bob Clark, Jesse Evans, Bob Applegate,

and Mark and Kim Bell, who have pioneered and expanded captive breeding within the United

States. This expansion has resulted in decreased reptile imports and has contributed to the fact

that there is very little reptile smuggling in America.

U.S. federal government agencies and animal rights organizations often contend that

there is an extremely large amount of wildlife and reptile smuggling worldwide and in the United

States. For example, a joint September 1998 press release by the Department of Justice (“DOJ”)

and the Department of the Interior (“DOI”) states that “According to INTERPOL, the value of

Bryan Christy, in his book on pre-1992 reptile smugglers, The Lizard King, takes this counter

narrative picture of reptile owners one step further. He states that “Reptile people are on a trajectory from

the time that they are children: bigger, meaner, rarer, hot.” (See Bryan Christy, The Lizard King: The True

Crimes and Passions of the World’s Greatest Reptile Smugglers, 6-7.) Christy’s view is that reptile

“people,” after becoming accustomed to small and safe reptiles, soon crave bigger and meaner reptiles.

Their cravings lead them rarer reptiles, and, finally, they must have hot (meaning venomous) reptiles. In

short, turtles and corn snakes are nothing more than the gateway drugs leading owners to collect rare

albino reticulated pythons, and then to seek out highly rare, mean, and venomous snakes such as albino

cobras and mambas.

If Christy were to be believed, a significant number of the 2.8 million households that owned

reptiles in 1994 for example, would now be cobra and mamba owners as they progress along Christy’s

bigger, meaner, and hot continuum. In fact, the number of “mean and hot” snakes owned by Americans is

insignificant. In short, Christy’s thesis is not supported by facts.

See Bryan Christy. The Lizard King.

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illegally traded wildlife is approximately $6 billion annually”

and that “Reptile smuggling is a

high-profit criminal enterprise, and the United States is its largest market.”

This lurid description of the reptile industry is not supported by facts. When Bill Clark,

an Interpol Secretary was interviewed about the basis for Interpol’s wildlife smuggling estimates,

he said, “We have no idea where the media gets its numbers, but it's not from Interpol.…

Interpol has no reliable data on which to base an estimate.”

Clark’s comments comport with

the statements of Peter Younger, director of Interpol’s wildlife crime division. Younger states

that, for wildlife smuggling, “Our best guess is anything from 10 to 15 percent of the lawful

trade … but it’s only an educated guess.”

Based on Interpol’s educated guesses, illegal wildlife

trade worldwide is $1 to $3 billion, a figure which is significantly lower than the figures quoted

by U.S. government officials.

“DOJ, DOI Announce Arrest of Renowned Reptile Smuggler,” September 15, 1998. The DOJ

repeats the $6 billion wildlife smuggling claim in an 2000 press release, “Reptile Smuggler Extradited to

the United States from Mexico,” U.S. Department of Justice August 23, 2000.

In 2008, the Congressional Research Service made the claim that “Global trade in illegal wildlife is a

growing illicit economy, estimated to be worth at least $5 billion and potentially in excess of $20 billion

annually.” However, the paper concedes that "the illegal trade is difficult to quantify with any accuracy."

See Sheikh, Pervaze A. and Liana Sun Wyler. “International Illegal Trade in Wildlife: Threats and U.S.

Policy,” Congressional Research Service, Updated August 22, 2008.

“DOJ, DOI Announce Arrest of Renowned Reptile Smuggler.” See also U.S. Fish and Wildlife

Service, “Probe of International Reptile Trade Ends with Key Arrests,” September 15, 1998. The Service

states in this release that, “Reptiles have become increasingly popular as pets and as high-priced live

collectables. Collectors and breeders are enticed by the lure of the exotic, making rare reptile species an

extremely profitable black-market commodity.”

Similarly, in 2007, Joseph O. Johns, the Chief of the Environmental Crimes section in the United States

attorney’s office in Los Angeles stated that “Wildlife smuggling is the nation’s second-largest black

market, just behind narcotics, accounting for $8 billion to $10 billion a year in sales.” Jennifer Steinhauer,

“Wildlife Smugglers Test Their Skills, Even at the Airport,” New York Times, April 6, 2007.

http://www.nytimes.com/2007/04/06/us/06wildlife.html.

Bryan, Christy, “Wildlife Smuggling: Why Does Wildlife Crime Suck,” The Huffington Post,

Updated March, 18, 2010 http://www.huffingtonpost.com/2010/01/04/wildlife-smuggling-why-do_n_

410269.html.

http://www.america.gov/st/energy-english/2008/June/20080616142333 mlenuhre t0. 8286859.

html.

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Evidence indicates that only a small fraction of wildlife smuggling takes place in the

United States. An even smaller fraction involves smuggling of reptiles into the United States.

An analysis of smuggling in the United States was conducted by the U.S. Department of

Agriculture’s Economic Research Service using wildlife trade data for the years 2000-2004.

The USDA report states: “based on fragmentary inspection of the data, wildlife smuggling

accounts for approximately 1 percent of commercial wildlife shipments to the United States.”

According to the report, total earnings from wildlife smuggling in United States amounted to

about $17 million per year for the five-year period, 2000-2004. The report does not disaggregate

the value of shipments by wildlife type, but it does suggest that reptile smuggling is a very minor

proportion of the $17 million. It also suggests that reptile smuggling primarily involves shoes

and leather products, not live reptiles.

From another perspective, if reptile smuggling were so prevalent in the United States, one

would expect to see numerous accounts of law enforcement activity involving the illegal trade.

There are few such accounts. In fact, a review of the Service’s enforcement records for 2006-

2010 list only four cases involving smuggling of reptiles. They are:

A reptile smuggler based in Washington State was sent to prison for two years for the

unlawful importation of more than 230 reptiles from Thailand; the shipments, valued at

over $30,000, entered the United States in falsely labeled express mail packages.

The study was based on an internal U.S. Fish and Wildlife report titled “Illegal Wildlife Trade.”

Peyton Ferrier, “The Economics of Agricultural and Wildlife Smuggling,” United States Dept. of

Agriculture, Economic Research Service, no. 81, Note: Ferrier states that the November 2005 U.S. Fish

and Wildlife Service internal report reports that : “. . . though enforcement personnel know a great deal

about what illegal trade activities occur locally, there is less understanding of illegal trade activity

nationally. . . .”

Even if one assumes that the USDA estimate is off by a factor of 10, i.e., the USDA understates

wildlife smuggling by 90%, even that suggests that total wildlife smuggling into the United States would

amount to less than $200 million. Even this upper bound estimate hardly supports the oft-heard statement

that the illegal wildlife trade is second in size to only the illegal drug trade.

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A Virginia man who pleaded guilty to illegally importing CITES-listed tortoises was fined

$15,000.

A California man was convicted for his role in an international conspiracy to smuggle

wild-caught protected Burmese and Indian star tortoises from Singapore for distribution

in the United States.

A cooperative U.S./Canadian undercover investigation exposed the smuggling of

protected reptiles from Canada to dealers and collectors in the United States.

The lack of public record of enforcement suggests that reptile smuggling occurs relatively rarely

in the United States.

There is no doubt that some reptiles were and still are smuggled into the United States.

Any product that is deemed illegal to import will be smuggled into the country if potential

customers of the illegal product are willing to pay the costs necessary to induce someone to

smuggle the product into the country. This is true for any product, be it lumber, caviar, or

reptiles. However, the evidence suggests that smuggling is not a cornerstone of the reptile

industry as claimed.

In addition, over time, the federal government has expanded the list of animals, including

reptiles, that have restrictions placed on their import into the United States both by law and by

regulation. As more wildlife is added to the restricted list, economic theory predicts that, ceteris

paribus, the amount of smuggling will increase. On the other hand, economic theory also

predicts that as the production of domestic captive-born reptile increases, with concomitant

decreases in reptile prices, ceteris paribus, the benefits from smuggling illegally wild-caught

reptiles decrease and the number of reptiles smuggled will also decrease. It appears as if the

expansion of captive reptile breeding in the United States has helped to crowd out smuggling.

“Wildlife Trafficking Investigations 2006-2010 Highlights.” U.S. Fish and Wildlife Service,

Office of Law Enforcement, p. 3.

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The past two decades have witnessed a tremendous growth in the number and variety of

reptiles bred in captivity in the United States. Indeed, captive breeding operations form the

foundation of the modern U.S. reptile industry. These businesses have added jobs and have

contributed revenues to the overall U.S. economy. It is likely that their success has also led to a

significant decrease in reptile smuggling, as well as a decrease in the incentives to smuggle

reptiles.

II. PARTICIPANTS IN THE MODERN U.S. REPTILE INDUSTRY

The U.S. reptile industry encompasses a vast number of participants including pet

owners, hobbyists, breeders, importers, exporters, wholesalers, pet store proprietors, pet show

promoters, entertainers, veterinarians, and manufacturers of pet food and ancillary pet products.

Below, we describe some of these participants and the roles they play in the industry.

Reptile Pet Owners

According to the APPA, approximately 4.7 million U.S. households owned 13.6 million

reptiles in 2010.

While reptile ownership has dipped slightly in the last two years from its peak

of 4.8 million households in 2008, reptile ownership is still at its second highest level since 1994,

the year that APPA began surveying households about reptile ownership.

Based on our

interviews with industry members, it is widely believed that when the economy recovers, reptile

ownership will once again be on the rise.

2009/2010 APPA National Pet Owners Survey (Hereafter “2010 APPA Study”). American Pet

Products Association. p. 453.

Id.

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Demographically, reptile owners tend to be younger and have higher household incomes

than the U.S. population as a whole.

Reptile owners are spread throughout the country,,

without a concentration in any one region.

They are just as likely as the rest of the U.S.

population to live in big cities, rural areas, or small towns.

APPA estimates that in 2010, reptile owners purchased nearly $1.7 billion worth of

ancillary products and services used for the care of reptiles.

Table 2.1 shows that turtle owners

alone spent $765 million.

TABLE 2.1

Total Consumer Reptile Product and Service Expenditure, 2010

Reptile Type

Percentage of

Households*

Number of

Households

Average Gross

Expenditure Per

Household ($)

Total Gross Expenditure

For Reptile Type ($)

Iguana

423,000

517

218,691,000

Lizard (other)

799,000

511

408,289,000

Turtle

2,773,000

276

765,348,000

Snake

846,000

313

264,798,000

Other

235,000

19,975,000

Total

100

4,700,000

357

1,677,101,000

*Percent of households will not add up to 100% because some household own more than one type of reptile.

Source: 2010 APPA Study data.

Based on our interviews and discussions with industry participants, there are roughly

three categories of reptile owners (in order of the number of owners in each category):

Id.

2010 APPA Survey, p. 499.

Id.

We believe APPA’s $1.7 billion estimate of consumer spending on reptiles includes spending on

products which can be used for both reptiles and humans, such as paper towels and Windex. For an

estimate of total revenues from businesses that offer services and manufacture products specifically for

reptiles. See Table 2.16.

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First-time owners and novices, who tend to buy only a few small, less expensive, and

easily manageable reptiles, such as turtles, corn snakes, geckos, and bearded dragons.

Novice

owners are often children who do not have a good deal of experience owning a reptile.

However, many novices have what some refer to as a wonder about nature, and become reptile

enthusiasts

Enthusiasts, who are distinguished by the depth of their interest and knowledge about

reptiles and reptile care. Spending on reptile products and medical care among enthusiasts is

around four times greater than the average reptile owner.

While the number of reptiles that

each enthusiast owns varies greatly, what binds them is their love of reptiles. In addition, they

take an active interest in what we refer to as reptile culture. That is, they attend reptile shows,

read reptile publications, and join reptile and amphibian societies. Enthusiasts tend to own not

only more reptiles than novices, but the reptiles they collect are more exotic and more

spectacular (in terms of morphology and coloration) than those of novices.

Hobbyists, or part-time breeders, are reptile owners that actively engage in breeding

reptiles. Hobbyists study the genetics of reptiles so that they can plan to breed their animals to

achieve certain body types and colorations. Almost every hobbyist sells (or intends to sell) at

Personal communication with a leading reptile retailer.

Reptiles Magazine, a publication for reptile enthusiasts, reports in its 2010 reader survey that its

average reader spends $1500 per year on “supplies, medical care, and other necessary items for [a]

reptile.” This is roughly 4.5 times the household weighted average spending reported for all reptile

owners in the APPA 2010 study, $330.

Personal communication with a leading reptile retailer.

-15-

least some of his or her collection. Many part-time breeders will sell the reptiles they have bred

at local reptile shows. It is estimated that there ate 8,000 to 10,000 reptile owners in this group.

The novice, enthusiast, and hobbyist classifications are fluid. A novice may bond with

her pet and develop a more active interest in reptiles and become a reptile enthusiast. Some

enthusiasts may start to breed and sell some of their captive bred reptiles, albeit on a small scale.

Indeed, a particularly successful part-time breeder may decide to try to breed reptiles full-time

and become a professional reptile breeder.

Reptile Suppliers

Typically, reptiles are either captive bred domestically or imported from other countries.

An imported reptile is typically wild-caught but it can also be captive bred. A reptile may pass

through many hands before it reaches its final owner. We attempt to describe components of the

reptile supply chain, but caution that, realistically, supply chains are more complicated than our

simplified descriptions. One company may provide the services that we describe as two separate

links in the supply chain, such as breeders who also import. Similarly, when we categorize total

revenues for a particular business, we ascribe all revenues from that business to the primary

function of that business. For example, if a business primarily engages in breeding, but also

exports, we ascribe all revenues that the business earns from breeding and exporting to breeders.

Personal communication with leading reptile retailers and manufacturers.

-16-

Reptile Breeders

An increasing number if reptiles that are purchased by pet owners, hobbyists, and private

collectors come from U.S. reptile breeders. We classify reptile breeders based on the scale of

their operations and the type of reptiles they breed.

Mass Producers

The largest breeders, both by average volume of production and average yearly gross

receipts, gear their production toward the pet store trade with a focus on novice to intermediate

pet owners. Thus, these breeders primarily produce reptiles that are meant to be cared for by a

beginning to slightly experienced (i.e., intermediate) owner. Reptiles they breed include turtles,

geckos, common iguanas, bearded dragons, milk snakes, corn snakes, non-morph ball pythons,

and non-morph Boa constrictors.

We refer to these breeders as “Mass Producers” because they

sell large quantities of reptiles through supply agreements, typically to pet store chains. Reptiles

bred by Mass Producers that are not sold directly to pet stores, are sold to retail distributors.

Mass Producers sell very little of their stock directly to households, either via the internet or at

expos or trade shows.

Mass Producers tend to have a relatively large number of employees, 20 to 30 on

average, and operate large breeding facilities. Because the reptiles that Mass Producers sell are

on the low end of the reptile price spectrum, profit margins in these businesses tend also to be

low. While churn is high among breeders generally, larger breeding businesses tend to be long

lived. There are roughly six to twelve mass producers operating in the United States.

Based on responses to Major Business Survey and Small Business Survey. Eugene Bessette, a

well-know breeder, refers to these reptiles as “small, safe and innocuous.”

Based on responses to Major Business Survey and Small Business Survey.

-17-

Morphs and Large Reptiles

Aside from Mass Producers, breeders tend to focus on reptiles that can be cared for by a

first-time to intermediate owners but have a rare scale coloration of body type, and thus are much

more expensive than reptiles sold by Mass Producers. There reptile rarities are often referred to

as designer reptiles, or more commonly, as morphs. In general, the price of a morph is positively

related to the distinctiveness of the reptile’s color and the rarity of the morph. Most sales of

morphs are to other breeders (both domestic and foreign), hobbyists, and enthusiasts. Only a

small percentage of the sales of morphs are to general pet owners.

Breeding morphs requires an investment in parents who have a genetic composition that

enables some of their offspring to have distinctive colors. In much the same way that a race

horse’s value depends on its ability to pass on its desirable racing genes to its offspring, a reptile

with a desirable skin pattern is valuable not only because of its skin pattern or the rarity of that

pattern, but also because that reptile can be use to bred more morphs. Morph breeders (or those

seeking to be morph breeders) will pay significant amounts (in excess of $20,000) for a rare

morph that can be added to his or her breeding stable.

A smaller group of breeder produce large and venomous reptiles. These reptiles require a

high level of expertise to safely and properly care for them. These reptiles include, but are not

limited to reticulated pythons, anacondas, Burmese pythons, and large lizards, such as monitor

lizards. This would also include venomous (or “hot”) reptiles.

Mass producers generally do not breed morphs, large, or venomous reptiles, since their

customers are interested in selling reptiles to first-time and intermediate reptile owners. First

time customers are generally not interested in large and hot reptiles, and thus, general pet stores

Based on interviews with reptile breeders.

-18-

also stay away from these reptiles. While some morphed reptiles, such as ball pythons, can be

taken care of by a first-time to intermediate owner, general pet stores do not want to hold

inventories of these high-priced morphed reptiles – but these stores will sell ball pythons of the

non-morphed variety.

We classify those who bred large, rare, or venomous reptiles on the basis of the scale of

their operations.

Large-scale Breeders

Large-scale breeders generally focus on producing morphs. They pride themselves on

the depth of their knowledge of reptile husbandry and genetics. Because each new morph they

produce has the potential to bring in high prices, these breeders invest in advanced animal

obstetric equipment, such as veterinary ultrasound machines, to ensure the safety of each

delivery. The number of employees working for these breeders varies widely, with some

breeders managing large collections of reptiles without assistance, while other large-scale

breeders employ up to seven full-time helpers. There are roughly eight to twelve large-scale

breeders operating in the United States.

Small-scale Breeders

Another group of breeders also attempts to produce new morphs, but these breeders

operate on a smaller scale. These “small-scale” breeders do not have the scale of production to

consistently hit the jackpot of the genetic lottery. Therefore, they focus their production on

morphs that have already been produced but are still relatively rare, using breeding stock that

typically have been purchased from large scale breeders.

-19-

While the majority of small-scale breeders focus on morphs, a small subset of them breed

large reptile species, like Burmese and reticulated pythons. Only a few businesses breed

venomous lizards and reptiles.

Most of the small-scale breeders have space outside of their homes dedicated to breeding.

They typically employ one or two employees to assist them. There are roughly 100 to 200 small

scale breeders operating in the United States.

Hobbyists and Part-Time Breeders

Part-time breeders operate at the smallest scale among breeders. Breeding is a side

project for most of these operations. They are typically one-person businesses, operated on a

part-time basis. Sales of reptiles serve mostly to supplement their income. While some

hobbyists have dedicated breeding facilities, the majority breed in their garage or basement. For

many hobbyists, sales are made more to pay for supplies for their own reptiles, rather than to

make a living. It is estimated that there are 8,000 to 10,000 hobbyists in the United States.

The vast majority of breeders are small businesses both by legal definition

and in a

generally understood sense. Of the breeding businesses that we have interviewed, nearly all of

them are family run. Some businesses are in their second generation of family ownership.

The number of breeders operating within the United States has grown dramatically in

recent years. The largest growth among breeders has taken place in the hobbyist category.

The

Based on interviews with reptile breeders.

Reptile breeders are classified under the NAICS code 112990, “All Other Animal Production”

NAICS Association, http://www.naics.com/censusfiles/ND112990.HTM#N112990 (Accessed

November 11, 2010).

The Small Business Administration defines a business of this category as small if they have annual sales

of less than $750,000. “U.S. Small Business Administration Table of Small Business Size Standards

Matched to North American Industry Classification System Codes.” U.S. Small Business

Administration, effective August 22, 2008.

-20-

economic downturn and increasingly restrictive laws regulating U.S. reptile sales have led many

breeders to look overseas for new customers. Many breeders also report a growing trend of

bypassing pets stores and selling directly to consumers over the internet.

We estimate that the 8,000 to 10,000 businesses that primarily engage in breeding earn

between $142 million and $183 million in revenues per year. (See Table 2.2.)

TABLE 2.2

Summary of 2009 Annual Revenues For U.S. Reptile Breeders

Breeder Category

Number of

Businesses

(Low)

Number of

Businesses

(High)

Total Annual

Revenue

Low Estimate

(Million $)

Total Annual

Revenue

High Estimate

(Million $)

Part-Time Breeders

8,000

10,000

91.2

114.0

Small Scale Breeders

100

200

18.2

33.7

Large Scale Breeders

5.2

7.3

Mass Producers

27.1

29.3

Grand Total

8,114

10,224

141.7

183.3

Source: GES analysis based on Major Business Survey and Small Businesses Survey.

International Trade

All imports and exports must enter or exit the United States from18 ports that have been

designated to handle all shipments of wildlife, including reptiles.

Containers for import and

export must be inspected by the U.S. Fish and Wildlife Service (“Service”). Fees for these

inspections are payable by the shipper. In addition, the United States Department of Customs

Based on communications with breeders and show promoters.

These ports are located in Anchorage, Atlanta, Baltimore, Boston, Chicago, Dallas/Ft. Worth;

Houston, Honolulu, Los Angeles, Louisville, Memphis, Miami, New Orleans, New York, Newark,

Portland, San Francisco, and Seattle. “Bringing Wildlife Into the United States.” United States

Department of Customs and Border Protection.

-21-

and Border Protection requires that importers and exporters fill out a declaration for the animals

that they wish to ship.

Importers

According to data collected by the Service, at least 6.9 million live reptiles were legally

imported into the United States between 2005 and 2010.

However, imports of reptiles into the

United States have steadily declined from 1.5 million reptiles imported in 2005 to 900,000

reptiles imported in 2009. (See Table 2.3 below.)

TABLE 2.3

U.S. Imports of Reptiles 2005-2010

Year

Number of

Reptiles Imported

2005

1,499,547

2006

1,441,135

2007

1,339,816

2008

1,146,570

2009

900,677

2010

572,158

Total

6,899,903

* 2010 is estimated

Source: LEMIS data

Table 2.4 shows that 83% of all imported reptiles entered the United States through either

Miami or Los Angeles.

Indeed over half of all reptiles that entered the United States from

abroad in the 2005-2010 period entered through Miami.

Id.

LEMIS data on live reptile imports into and exports from the United States from January 2005 to

May 2010. United States Fish and Wildlife Service, Office of Law Enforcement, produced July 16, 2010.

LEMIS data are used because it has been noted that “LEMIS data is the only detailed official record of

the legal domestic reptile trade.” Robert Reed. “An Ecological Risk Assessment of Nonnative Boas and

Pythons As Potentially Invasive Species in the United States,” Risk Analysis, Volume 25, No. 3, 2005, p

756.

LEMIS data.

-22-

TABLE 2.4

Top Ten U.S. Ports of Import

2005 – Jan. 30, 2010

Port

Number of

Reptiles

Imported

Percent of All U.S

Imports

Miami

3,486,765

50.53

Los Angeles

2,268,501

32.88

Dallas/Fort Worth

434,898

6.30

New York

409,867

5.94

New Orleans

121,685

1.76

Baltimore

64,425

0.93

Houston

20,210

0.29

San Francisco

18,735

0.27

Denver

12,819

0.19

Detroit

12,135

0.18

Top Ten Total

6,850,040

99.28

Source: LEMIS data

The majority of reptiles that are imported are sold either directly to pet stores or to

distributors and wholesalers who then sell the animals to pet stores.

Because of this pet shop

focus, the most popularly imported animals tend to be reptiles that make good pets for novice to

intermediate pet owners. The most commonly imported reptiles are Common Iguanas, Leaf-toed

Geckos, Asian Grass Lizards, Oriental Water Dragons, and Ball Pythons.

Table 2.5 below

shows the most-imported reptiles (by number) in 2009. These reptiles are generally much lower-

priced than reptiles that are exported. Exports are more often rare and expensive morphs.

The dominance of the ports of Miami and Los Angeles reflects the fact that the majority of all

importers are located in Florida or California.

Based on survey responses from the Major Business Survey. Companies surveyed imported

42.5% of all live reptiles from 2005 to 2009.

Based on GES analysis of LEMIS data.

-23-

TABLE 2.5

Top Ten Imported Reptiles, 2009

Reptile Type

Number of

Reptiles Imported

Common Iguana

113,052

Leaf-Toed Gecko

71,324

Asian Grass Lizard

71,128

Oriental Water Dragon

68,792

Ball Python

65,028

Turtle (Sp.)

39,158

Inland Bearded Dragon

28,756

Northern Savanna Monitor

22,432

Red-Eared Slider

22,069

Tokay Gecko

18,985

Top Ten Total

520,724

Source: LEMIS data.

Ten firms accounted for 72.3% of the number of reptiles imported into the United States

in 2009. The most frequently imported reptiles by these ten firms are also the Common Iguana,

the Leaf-Toed Gecko, Asian Grass Lizard, Oriental Water Dragon and the Ball Python. (See

Table 2.6)

TABLE 2.6

Top Ten U.S. Importers of Live Reptiles in 2009

Company

Number of

Shipments

Imported

Number of

Reptiles Imported

% of Total

Reptiles

Imports

L. A. Reptile Inc.

847

156,540

17.4

Strictly Reptiles, Inc.

522

90,776

10.1

The Reptile Farm, Inc.

79,125

8.8

Two Amigos Import & Export, Inc.

663

78,476

8.7

U.S. Global Exotics, Inc.

403

75,023

8.3

California Zoological Supply

191

55,403

6.2

Emerald Coral & Reptile

179

39,360

4.4

Lasco

29,681

3.3

Bushmaster Reptiles

573

24,339

2.7

Dayrich Trading, Inc.

22,366

2.5

Top Ten Total

3,520

651,089

72.3

Source: LEMIS data

-24-

Exporters

According to LEMIS, 69 million live reptiles have been exported from the United States

between 2005 and 2010. In contrast to imports, which have been declining steadily over the

past 5 years, reptile exports increased each year from 2005 to 2007. (See Table 2.7)

TABLE 2.7

U.S. Exports of Reptiles

2005 – 2010

Year

Number of Reptiles

Exported

2005

10,035,749

2006

14,509,230

2007

18,764,290

2008

12,573,564

2009

11,290,591

2010

2,309,600

Total

69,483,024

Source: LEMIS data

Turtles dominate reptile exports. More than 95% of all reptile exports from 2005 to

2010

were turtles, tortoises, or terrapins.

The high percentage of turtle exports is a byproduct

of a 1975 regulation imposed by the FDA which ban turtles with shell lengths under 4 inches

from being sold or transported within the United States. The regulation makes an exception to

the commercial inter-state transport ban if the turtles are destined for export.

Based on GES analysis of USFWS LEMIS records.

We will refer to turtles, tortoises, or terrapins collectively as turtles.

21 CFR 1240.62.

-25-

Before the inter-state commerce ban, turtle farmers had produced up to 15 million turtle

hatchlings for sale in U.S. pet stores. Around 5% of U.S. households had turtles as pets.

In the

turtle ban’s aftermath, turtle farmers diverted all of their sales overseas. Hong Kong, Mexico,

and China have become top destinations for turtles, and therefore the top destinations for all

reptile exports. However, most turtles exported to Hong Kong and China are bought as food

rather than as pets.

Most exports leave the United States from the port of New Orleans because most turtles

are bred in Louisiana.

Table 2.8 shows the top ten U.S. ports of export in 2009. It also shows

that New Orleans and Los Angeles handle over 90 percent of reptile exports.

TABLE 2.8

Top Ten U.S. Ports of Export, 2005 – 2010

Port

Number of

Reptiles

Exported

Percent of

Reptile Exports

New Orleans

55,225,244

79.37

Los Angeles

7,694,033

11.06

San Francisco

1,923,548

2.76

Miami

1,712,113

2.46

Dallas/Fort Worth

1,691,720

2.43

Atlanta

581,556

0.84

Honolulu

300,269

0.43

Houston

200,810

0.29

Minneapolis./St. Paul

143,190

0.21

Chicago

34,139

0.05

Top Ten Total

69,406,622

99.89

Source: LEMIS data

“Risky Shell Game: Pet Turtles Can Infect Kids,” FDA Consumer, Dec-Jan, 1987, Chris W.

Lecos. http://www.highbeam.com/eoc/1g1-6245151.ytml (Accessed November 11, 2010).

LEMIS data does not distinguish whether live turtles are purchased for food or as pets, but

interviews with producers indicate that Chinese and Hong Kong customers buy turtles as food.

“Turtle Profile,” C. Greg Lutz, Pramod Sambidi, and R. Wess Harrison, Louisiana University

Agricultural Center, p 1. See also Chapter 3: Turtles and Lizards. www.agmrc.com/ comodities__

products/aquaculture/Turtle_profile.cfm, (Accessed 8/12/2010).

-26-

As of 2009, seven of the United States’ top ten reptile exporters were located in

Louisiana. Turtle exports have declined from 2008 to 2010. Some reasons posited for this

decline include the general economic downturn, increasing self sufficiency of Chinese reptile

breeders, and hurricanes hitting the gulf coast.

Table 2.9 shows that, similar to the import

sector, a small number of companies export the majority of all reptiles. The top ten exporters (by

number of reptiles), all of whom are believed to be turtle exporters, exported 68% of the reptiles.

TABLE 2.9

Top Ten U.S. Exporters, 2009

Company

Number of

Shipments

Exported

Number of

Reptiles

Exported

Percent of

Total

Exports

Turtle Connection, LLC*

2,557,610

22.5

Concordia Turtle Farms*

1,013,695

8.9

Assumption Turtle Farms*

147

758,992

6.7

AC International Export, Inc.*

700,129

6.1

Tangi Turtle Farm*

176

669,947

5.9

Global Aquatic Consulting

122

534,981

4.7

Boudreaux's Turtle Farm, Inc.*

106

445,868

3.9

Strange Brother's Turtle Farms*

411,400

3.6

Wei Nuo Import & Export Corp

341,104

3.0

Interwell, Inc.

317,506

2.8

Top Ten Total

784

7,751,232

68.0

* Located in Louisiana

Source: LEMIS data

We estimate that there are 30 to 50 businesses who primarily engage in importing or

exporting reptiles. These businesses earned between $28 and $30 million in 2009.

“Turtle Profile,” C. Greg Lutz, Pramod Sambidi, and R. Wess Harrison, Louisiana University

Agricultural Center, p. 1 www.agmrc.com/comodities__products/aquaculture/ Turtle_profile.cfm,

Accessed 8/12/2010.

-27-

Wholesalers/Distributors

Reptile wholesalers and distributors purchase reptiles from importers, breeders, and other

distributors to sell to pet stores, zoos, and educational institutions. Most distributors also import

reptiles. Traditionally, breeders and importers did not have the staff to make and maintain

contacts with the large network of pet stores needed to sell out their stock. This intermediary

function was served by distributors. However, the number of distributors has been decreasing in

recent years because breeders are increasingly bypassing distributors and selling directly to pet

stores and individual customers through reptile shows and the internet.

In addition, the mass

producer breeders who supply PETCO and PETsMART with reptiles have come to provide

wholesaling services for these superstore chains.

Most of the distributors of reptiles are located in Florida and California.

These

locations allow them to be close to a large number of breeders and importers. It also allows them

to be in close proximity to ports for exporting reptiles. Wholesalers outside of major port cities

have to branch out into other parts of the pet industry. This means that, in Des Moines or

Denver, for example, wholesalers/distributors may also distribute bird supplies and frozen

rodents in addition to reptiles. These distributors may also sell animals through store front retail

locations to supplement their income.

There are 50 to 70 businesses that primarily engage in wholesaling and distributing

reptiles in the United States. These businesses earned $17 million to $22 million in 2009.

Personal communication with breeders, importers, and show promoters.

See the Reptile Breeders and Retailers sections of Chapter 2 for more information on the

relationship between large breeders and pet superstores..

Personal communication with breeders and importers.

Based on personal communication with leading importer, Christine Roscher, owner of L.A.

Reptile, Inc.

-28-

Retailers

Despite the growing number of sales from breeders directly to pet owners through the

internet and at local reptile shows, most pet owners purchase their animals through retailers.

Approximately 3,000 to 4,000 businesses sell reptiles or reptile products at over 5,000 to 6,000

locations.

As reptiles gain in popularity as pets, the numbers of retailers that sell reptiles will

continue to grow.

Among retailers, sales of reptile products exceed sales of reptiles.

This is true because

every reptile a) needs an array of products to keep it healthy, and b) requires continual purchases

of food, cleaning supplies, and nutritional supplements.

Retailers can be classified into four types: superstores, pet stores, hobbyist shops, and

online sellers (also know as “e-tailers”).

Pet Superstores

These “big-box” operations grab the biggest share of retail sales on a per store basis.

There are two national superstore chains, PETCO and PETsMART, that sell reptiles and reptile

supplies. PETCO and PETsMART each have over 1,000 retail stores located across the United

States. Superstore chains cater almost exclusively to novice and intermediate pet owners,

limiting the reptiles they sell to “small and innocuous”

reptiles, such as turtles, bearded

APPA 2010, p. 463.

Personal communication with reptile retailers and product manufacturers.

PPN, p. 9. Note that PPN’s survey results were confirmed by Major Business Survey and Small

Business Survey responses.

Eugene Bessette, a well-know breeder, refers to these reptiles as “small, safe and innocuous.”

-29-

dragons, geckos, common iguanas, Boa constrictors, and ball pythons. They also carry a full line

of products used in the care of reptiles.

Superstores purchase the majority of their reptiles and products from a handful of large

breeders and product manufacturers to ensure consistent quantity, quality, and regularity of their

supply. Large breeders both produce reptiles for superstores and also import and distribute

reptiles and reptile foods from other smaller companies to the superstores.

Similarly, large

producers manufacture products for the superstores at their own facilities as well as import and

distribute the products of smaller manufacturers to the superstores. The reliance on bigger

breeders and manufacturers serves to simplify the reptile supply chain for the superstores.

estimate that superstores earned $19 to $23 million in revenues from sales of reptiles and

ancillary products in 2009.

Pet Stores

The next largest category of retailer is pet stores. These pet stores include regional chains

and local, one or two store, “mom and pop” pet shops. While no individual store or chain rivals

PETsMART or PETCO in sales, as a group these stores sell more pet reptiles and ancillary

reptile products than the superstores.

These retailers are also influential as leading sources of

information about pets and pet products.

The vast majority of pet store sales are to customers

in the communities in which these stores are located.

Personal communications with reptile breeders.

APPA 2010, pps. 463, 469, and 479. This information was confirmed by personal

communication with retailers.

APPA, p. 481.

-30-

Pet stores can be further broken down into two categories: reptile specialty stores and

general pet stores.

Reptile specialty stores sell mostly reptiles and products for reptiles,

though many of these stores also carry amphibians, insects, and related products. Prominent

reptile specialty stores include Exotic Pets in Nevada, East Bay Vivarium in California, and Zoo

Creatures in New Hampshire.

Typically, reptiles and ancillary reptile products are a small fraction of total sales at a

general pet store. Among the general pet stores that we surveyed, reptile and reptile product

sales made up only five to eight percent of the stores’ gross yearly sales revenues. Some

examples of general pet stores that sell reptiles include: Petland, a regional pet store chain, Red

Crest Pet Shop of Texas, and Today’s Pet in Maryland.

There are an estimated 1,100 and 1,500 pet stores. These pet stores earned between $163

million to $215 million in 2009.

Hobbyist Retailers

The smallest retailer both in store size and in annual revenues is the hobbyist retailer,

who typically sells reptiles from his or her garage or basement. These retailers concentrate

almost exclusively on live reptiles, and offer little or no ancillary products. Many hobbyist

retailers specialize in a few types of reptiles, often concentrating on morphs. These home and

garage sellers are typically hobbyists moving up the supply chain.

There are an estimated 600 to 800 hobbyist retailers. These retailers earned between $15

million and $19.5 million in 2009.

The exact breakdown of specialty stores to general stores is unknown.

-31-

Online Sellers or E-tailers

There is a growing segment of retailers that conduct most of their business online. Some

e-tailers started out as mail-order catalogue businesses. Others used to conduct their business by

fax but are operate using email and a website. Only a few of these businesses also have

storefronts. While a small group of reptile e-tailers sell only reptiles, the majority of sales made

by online reptile stores are of ancillary reptile products. Selling online allows e-tailers to serve a

national customer base. Prominent e-tailers include LLL Reptile and Supply, The Bean Farm,

and Herpsupplies.com. There are an estimated 1,200 to 1,600 e-tailers. These businesses earned

between $81 million to $106 million in 2009.

Summary of Retailers

We estimate that retailers as a whole earn between $278 million and $364 million from

sales of reptiles and related products annually. Table 2.10 summarizes our revenue estimates for

reptile retailers.

Table 2.10

Summary of 2009 Annual Revenues For U.S. Reptile Retailers

Retailer

See also Chapter 2: Retailers.

-50-

snakes are sold primarily to first-time and intermediate owners. One of the most popular snakes

bred domestically, the ball python, is also one of the most commonly imported and exported

snakes.

112

From 2005 to June 30, 2010, over 600,000 ball pythons were imported in the United

States.

Large Constrictors

A small subset of enthusiasts buy snakes, not just for their color but because they are

impressed by their size. These snakes include:

Burmese pythons. These pythons are the most commonly exported of the large

pythons, through reticulated pythons come in at a close second. (See Table 3.2

below.) The native range for this species is southern and southeastern Asia.

Burmese pythons can grow up to 27 feet.

113

Reticulated pythons. These pythons are the most commonly imported of the large

pythons, through Burmese pythons come in at a close second. (See Table 3.3

below.) They have been known to reach lengths of 31.5 feet.

114

Green Anacondas. This olive colored snake has the distinction of being the

world’s heaviest snake. It can grow to be more than 30 feet.

115

Yellow Anacondas. This snake has only rarely been imported or exported over the

2005 to 2010 period for which we have data. The yellow anaconda is

considerably smaller than its green cousin, reaching lengths of 15 feet.

116

Northern African Rock pythons. Despite their name, these snakes hail from North

and Central Africa. They can reach lengths of 28 feet.

117

112

GES calculations based on the LEMIS database.

113

“Burmese Python”. National Geographic. http://animals.nationalgeographic.com/animals/

reptiles/burmese-python/. (April 4, 2011).

114

"Reticulated python." Encyclopædia Britannica. Encyclopædia Britannica Online.

Encyclopædia Britannica, 2011. http://www.britannica.com/EBchecked/topic/ 499976/reticulated-

python. (April 4, 2011).

115

“Green Anaconda.” National Geographic. http://animals.nationalgeographic.com/animals/

reptiles/green-anaconda/. (April 4, 2011).

116

“Yellow Anaconda Apecies Profile.” Reptile Channel.com. http://www.reptilechannel.com/reptile-

species/snakes-profiles/yellow-anaconda-2.aspx (April 4, 2011).

-51-

None of these large constrictor snakes are widely sold as pets.

118

Table 3.3 shows that

from 2005 to 2010 imports of these snakes greatly outnumbered exports, but none of these

snakes was imported or exported in large numbers.

119

TABLE 3.3

U.S. Exports and Imports of Large Constrictor Snakes

2005 - June 30, 2010

Number of Snakes

Snake Type

Exports

Imports

The Indian/Burmese Python (Python molurus)

4,263

17,285

The Green Anaconda (Eunectes murinus)

239

15,904

The Yellow Anaconda(Eunectes notaeus)

The Reticulated Python (Broghammerus reticulatus)

3,354

3,535

The Northern African Python (Python sebae)

166

2,930

Total

8,023

39,679

Source: LEMIS data.

Venomous snakes.

Venomous snakes round out the types of snakes available for sale as pets. Many

venomous snakes have vibrant coloration and distinct color patterns, which serve as a warning in

nature to potential predators. Venomous snakes kept as pets include copperheads, cottonmouths,

cobras, lance-head vipers, and rattlesnakes.

Many states have laws restricting the keeping of venomous snakes as well as limiting the

sale of venomous snakes. Because of these laws and the high skill level required to keep

117

“African Rock Python Species Profile.” Reptile Channel.com.

http://www.reptilechannel.com/reptile-species/snakes-profiles/african-rock-python-2.aspx.

118

Based off of responses to the Major Business Survey and Small Business Survey.

119

The number of Boa constrictors imported into the United States over the 2005 to 2010 period was

two times greater than the sum of all imports and exports of Burmese pythons, green anacondas,

reticulated pythons, and northern African pythons.

-52-

venomous snakes safely, sales of these snakes make up only a small portions of all snake sales.

Table 3.4 shows that over the 2005 to June 30, 2010 period only 3.3 thousand venomous snakes

were exported and only 2.6 thousand were imported into the United States. Exports of

venomous snakes outnumber imports. (See Table 3.4.) Kingsnake.com lists Glades Herp Farm,

Exotic Reptiles Jungle, DTS Herps, Inc, and Tom Crutchfield as sellers of venomous snakes.

120

TABLE 3.4

U.S. Exports and Imports of Venomous Snakes

2005 - June 30, 2010

Number of Snakes

Snake Type

Exports

Imports

Cantil

Cobra

146

980

Copperhead

285

Cottonmouth

Mamba

406

Massasauga

Rattlesnake

2,486

1,152

Sidewinder

156

Total

3,265

2,634

Source: LEMIS Data

Snake Morphs

In the 1980s and 1990s snake breading in America was transformed from a hobby to a

profession by a series of discoveries of rare, colorful snakes in the wilds of South Asia, Africa,

and South America. In March of 1981, National Geographic ran an article featuring a picture of

an albino Burmese python owned by a animal dealer from Thailand.

121

While the Thai dealer had

intended to sell this snake as a rarity to a collector, American breeders, like Bob Clark, saw the

120

http://market.kingsnake.com/index.php?cat=40 (December 13, 2010)

121

Bob Clark. Python Color & Pattern Morphs. Reptiles Magazine, March 1996.

-53-

potential to breed albino Burmese pythons and generate a continual stream of income. As Clark

anticipated, there was interest in American bred albino Burmese pythons. The “morphed”

offspring of the snakes commanded prices of over $2000 per baby snake. The success of these

first American breeders attracted more people to try their hand at breeding Albino Burmese

pythons.

Consumer enthusiasm for morphed constrictor snakes ramped up to even higher levels in

the 1990s, stoked by the successful captive breeding and sale of albino ball pythons and albino

Boa constrictors. These albino snakes that had been discovered in the jungles of Ghana and

Columbia just a few years prior. By the mid-1990s, demand for uniquely colored snakes was

high enough for amateur breeders to quit their day jobs and operate full time snake breeding

operations.

Breeding uniquely colored snakes distinguished American bred snakes from the low

priced imported snakes that dominated U.S. pet stores. Consumers began to look at these

colorful snakes as collectors items and science projects.

The consumer market for these unique snakes continued to expand throughout the early

2000s. The majority of “designer” breeders focus on breeding Boa constrictors and ball pythons.

morphs. The market for Boas and ball pythons is bigger than the market for morphs of the larger

constrictor snake species. This is due to the fact that Boas and ball pythons are relatively easier

to handle and less costly to maintain than the large constrictors. Since 2005, approximately U.S.

breeders have shipped approximately 25,000 Boas and 60,000 ball pythons to foreign countries.

Most of these exports have been high-priced morphs. A smaller number of breeders also bred

Burmese python morphs and Reticulated python morphs. Dan Sutherland, Peter Kahl, Brian

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Barczyk, Ralph Davis, Eric Crider, Bob Clark, and Kevin McCurley are among the top current

purveyors of the art, business, and science of breeding morphs.

* * *

The American pet trade has experienced a significant shift toward domestic captive

breeding over the past twenty years. For the past two decades, the number of imports have

declined, while, up to 2007, the number of exports increased. However, during this time, the

number of reptiles owned by United State households has also steadily increased. Increasing

domestic demand and decreasing foreign supply indicate that the pet trade is less reliant on

imported reptiles and more reliant on American breeders and collectors. The expansion of

exports indicates that not only have American breeders been able to meet expanding domestic

demand, they are also able to increasingly cater to foreign buyers as well.

The transition from supplying the U.S. market to supplying foreign markets has not

always been easy for U.S. exporters. Exporters have had to learn through trial and error that

each export country has different expectations with regard to service.

122

In summary, over the past decade, rare and thus high-priced reptiles are being delivered

to the world from breeders, mostly located in the United States. This trend has, no doubt,

reduced considerably the incentives of smuggling rare reptiles into the United States.

IV. CURRENT AND PROPOSED FEDERAL LAWS/REGULATIONS: THEIR

IMPACT ON THE REPTILE INDUSTRY

Current federal laws concerning reptiles have a significant impact on the reptile trade

within the United States.

123

Primarily, federal laws have focused on the import and export of

122

For example a healthy reptile with a small physical imperfection may be acceptable to most

buyers in Mexico but every reptile delivered to Japan must be both healthy and defect free. This high

standard is also known as being “Japan perfect.” Before American exporters learned how to ship Japan

perfect reptiles, they experienced considerable difficulty breaking into the Japanese reptile market.

-55-

reptile species that have been deemed endangered or have been declared illegal to export by a

foreign government. The effects of these laws has been to limit commerce and increase the costs

of conducting reptile businesses. However, because of the increase in captive breeding, the

effects of these laws have not limited the modern reptile industry from growing significantly in

the past two decades.

A rule change proposed by the U.S. Fish and Wildlife Service would list nine species of

constrictor snakes as injurious wildlife under the Lacey Act.

124

The rule, if enacted, will have a

significant economic impact on the U.S. reptile industry. The proposed regulation will affect

imports and exports of reptiles, and will also affect interstate sales of reptiles by domestic reptile

breeders. We estimate that, in the first year alone, the impact of the rule change, if it is enacted,

will be a loss of $76 to $104 million in reptile industry revenues. This amounts to roughly 5 to 7

percent of total annual industry revenues.

* * *

There are two main federal regulations that govern the import, export, inter-state sale, and

keeping of reptiles in the United States-- the Endangered Species Act and the Lacey Act. We

review the impact of the laws below.

The Endangered Species Act (“ESA”).

The ESA is designed to protect animals that are at risk of extinction. It does so by

designating certain species as endangered or threatened, purchasing lands for the conservation of

123

State laws also have an impact on the reptile industry. See Appendix II for an overview of the

reptile laws for in three states with some of the most extensive reptile laws: Florida,Texas, and New York.

Appendix II also contains a discussion of how these state laws have impacted the reptile industry.

124

75 FR 11808; March 12, 2010.

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these species, prohibiting commercial purchases and sales of illegally obtained endangered

species, and assessing civil and criminal penalties for violations of the act.

125

Species, or

products made from species that are listed as endangered or threatened under the ESA are

prohibited from import and export, except if an exception is granted to do so for scientific or

conservation purposes. Currently, 119 reptile species are listed as either endangered or

threatened under the ESA.

126

The reptiles listed under this act include: the San Francisco giant

garter snake, the Alabama red-belly turtle, the green sea turtle, and the Monito gecko. The act is

enforced by the U.S. Fish and Wild Life Service (“Service”) and the National Oceanic and

Atmospheric Administration (“NOAA”).

CITIES

The ESA also has a significant impact on international trade because the ESA

implements the Convention on International Trade in Endangered Species of Wild Flora and

Fauna (“CITES”) as U.S. law. CITES is an agreement between governments to regulate cross-

country trade in rare and vulnerable plants and animals. As of November 2010, there are 175

nations that have signed the Convention.

127

Each nation which signs on to CITES must designate

a Management Authority to be in charge of administering a licensing system for species listed

under CITES and a Scientific Authority to advise the Management Authority on the effects of

125

Endangered Species Act of 1973. http://www.fws.gov/laws/lawsdigest/esact.html (Accessed

November 30, 2010).

126

Summary of Listed Species Listed Populations and Recovery Plans. United States Fish and

Wildlife Service. http://ecos.fws.gov/tess_public/pub/boxScore.jsp (Accessed November 30, 2010).

127

List of Contracting Parties. CITES. http://www.cites.org/eng/disc/parties/alphabet.shtml

(Accessed November 30, 2010).

-57-

trade on the species.

128

Special paperwork issued by each Management Authority is needed for

the import and export of animals protected by CITES.

Species protected under CITES are listed in one of three appendices to CITES.

Appendix I species are considered threatened with extinction and are thought to be adversely

affected by international trade. CITES dictates that these species may not be imported for

commercial purposes. A country’s Scientific Authority must determine that the import of the

species will not be detrimental to its survival and the importer can provide proper housing and

care for the species before an import of that species can occur.

129

Currently, 75 reptile species are

listed in Appendix I.

Species listed under Appendix II are considered to be at risk of becoming extinct if

international trade in these species is not regulated.

130

A country’s Management Authority must

certify that the species is obtained legally and that trade in the species will not threaten the

species’ survival before an export permit for an Appendix II species will be granted.

131

There are

currently 527 reptile species listed in Appendix II.

Appendix III species are animals and plants that are threatened only within specific

countries. Permits are required to export Appendix III species out of the country that requested

the CITES listing. Certificates of origin are also required to export these species from all other

128

How CITES Works. http://www.cites.org/eng/disc/how.shtml (Accessed November 30, 2010)

129

How CITES Works. http://www.cites.org/eng/disc/how.shtml (Accessed November 30, 2010)

130

Ibid.

131

Ibid.

-58-

countries that have signed onto CITES. There are currently reptile 55 species listed in

Appendix III.

132

Impact of CITIES on the Reptile Industry

Survey respondents report that CITES requirements have slowed the flow of exports of

protected reptile species from the United States.

133

Over the past several years there has been a

backup in the export permit application process which has delayed shipments up to six months

for some merchants. One respondent reports that he stopped exporting CITES species because,

“it was not worth the hassle.”

134

Because reptiles are often sold as babies, reptiles will grow

during shipping delays. The weight that these reptiles gain during delays adds freight costs to

the export. The exporter must also pay for feeding and care of the reptile during the delay.

Thus, because of CITES, both the timing and the cost of exports of protected reptiles becomes

uncertain, adding additional costs and risks to the export of reptiles listed under CITES.

The Lacey Act

The Lacey Act prohibits the purchase, transport, and trade of wildlife taken in violation

of any law of the United States or any foreign country. The act also prohibits the import or the

inter-state sale of any species determined to be ecologically harmful.

135

Such a harmful species is

132

“Reptiles in the International Trade.” United Nations Environment Programme http://www.unep-

wcmc.org/species/reptiles/reptiles.cfm (Accessed November 30, 2010)

133

Based on responses to the long business survey.

134

Based on responses to the long business survey.

135

16 U.S.C. 42 (____)

-59-

called an “injurious wildlife.” The act also prohibits wildlife from being imported into the United

States under inhumane conditions.

136

Proposed Rule to List Nine Constrictors as Injurious Wildlife

On March 12, 2010 the Service proposed a rule to amend its regulations to list nine

constrictor species as injurious wildlife under the Lacey Act.

137

These nine species include:

 Four python species:

 Indian/Burmese Python(Python molurus);

 Northern African Python(Python sebae);

 Southern African Python (Python natalensis);

 Reticulated Python (Broghammerus reticulatus);

 Four anaconda species:

 Green Anaconda (Eunectes murinus);

 Yellow Anaconda(Eunectes notaeus);

 Beni Anaconda(Eunectes beniensis);

 DeSchauensee’s Anaconda (Eunectes deschauenseei); and

 The Boa Constrictor (Boa constrictor)

If the proposed rule is made final:

“live snakes, gametes, or hybrids of the nine species or their viable

eggs could be imported only by permit for scientific, medical,

educational, or zoological purposes, or without a permit by Federal

agencies solely for their own use. The proposed rule, if made

final, would also prohibit any interstate transportation of live

136

Victoria Bridges, Chris Kopral, and Reginald Johnson. “The Reptile and Amphibian

Communities in the United States.” USDA: APHIS:VS Centers for Epidemiology and Animal Health.

January 2001. p 20.

137

75 FR 11808; March 12, 2010.

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snakes, gametes, viable eggs, or hybrids of the nine species

currently held in the United States.”

138

The rule will have significant direct and indirect economic effects on reptile industry

participants.

Impact of the Proposed Rule on Imports.

Under the proposed rule, all imports of the nine constrictor species would be banned.

Therefore, the value from all imports of these species would be lost and all importers who

brought in these constrictors would realize a reduction in revenues. However, the import ban

does not just affect importers. Imported reptiles make their way through many stages of the U.S.

reptile distribution chain. Thus, the sales of reptiles at each stage of the distribution chain would

also be lost. That is, banning a Boa constrictor prevents the sales of that constrictor from a) an

importer to a distributor, b) a distributor to a pet store, and c) a pet store to a pet owner.

From 2005 to June 30, 2010, 133,495 snakes belonging to the nine constrictor species

were imported into the United States. Table 4.1 below shows that in this five and a half year

period over 70% of these imports were Boa constrictors. No Beni anacondas, DeSchauensee’s

anacondas, or Southern African Pythons were imported over this period.

138

[Id]

-61-

TABLE 4.1

U.S. Imports of Nine Constrictor Snake Species

2005 - June 30, 2010

Snake Type

Number of Reptiles

Imported

Boa Constrictor (Boa constrictor)

93,816

Reticulated Python (Broghammerus reticulatus)

17,285

Indian/Burmese Python (Python molurus)

15,904

Green Anaconda (Eunectes murinus)

3,535

Northern African Python (Python sebae)

2,930

Yellow Anaconda (Eunectes notaeus)

Total Nine Constrictor Snake Species

133,495

Source: LEMIS data

Table 4.2 shows that imports of the nine species consistently declined from 2005 to 2010.

The table shows that imports of Boas fell by over 40% in 2010 from 2009 levels. This decline

can be attributed to the announcement of the proposed rule change by the Service. In short, the

fear that Boas would be “outlawed” scares breeders, hobbyists, and pet owners. A similar trend

is also observed in Table 4.2 for the eight other constrictors.

TABLE 4.2

U.S. Imports of Nine Constrictor Species,

2005 – 2010

Year

All Nine

Constrictors

Boa

Constrictors

Other 8

Constrictors

Percent

Boas

2005

34,398

22,275

12,123

64.8

2006

29,796

19,814

9,982

66.5

2007

22,409

15,650

6,759

69.8

2008

21,265

15,957

5,308

2009

19,186

15,254

3,932

79.5

2010*

12,882

9,612

3,270

74.6

Total

139,936

98,562

41,374

70.4

*2010 imports are estimated

Source: LEMIS data

-62-

From 1998 to 2008 there were 197 to 270 entities (including businesses and individuals),

and institutions (such as universities and zoos) that imported the nine constrictor snakes.

139

Impact of the Proposed Rule on Exports

Listing these nine constrictors as injurious species will also end the export of all of the

relevant snakes that are bred in non-port states. All reptiles must be exported from one of 18

designated ports.

140

Since the inter-state transport of species listed on the Injurious Wildlife list

would be illegal, any business not located in a state with a designated port will be unable to

legally export any of the restricted snakes. This would be true even for snakes that are captive

bred. In short, if the Lacey Act rule change is finalized, breeders in states that do not contain

designated ports will no longer be able to export their snakes, because the inter-state transport

required to bring these snakes to port would be banned.

From 2005 to 2010, 29,172 snakes belonging to the nine constrictor species were

exported from the United States. As with imports, over 70% of the nine constrictor snakes

exported were Boa constrictors. No Beni anacondas, DeSchauensee’s anacondas, or Southern

African Pythons were reported as being exported over this period. (See Table 4.3 below.)

139

IRFA, p. 4.

140

For a complete list of ports see Chapter 2: Participants in the U.S. Reptile Industry, International

Trade

-63-

TABLE 4.3

U.S. Exports of Nine Constrictor Snake Species

2005 – June 30, 2010

Constrictor Type

Number of Reptiles

Exported

Boa Constrictor (Boa constrictor)

21,149

Indian/Burmese Python (Python molurus)

4,263

Green Anaconda (Eunectes murinus)

239

Yellow Anaconda (Eunectes notaeus)

Reticulated Python (Broghammerus reticulatus)

3,354

Northern African Python (Python sebae)

166

Total – Nine Constrictors

29,172

Source: LEMIS data

There were 3.3 thousand exports of Boa constrictors in 2005 and 7.8 thousand Boa

exports in 2010. Unlike Boa imports, these exports tend to be high-morphs that are in demand

by foreign breeders. Exports of the other 8 banned constrictors (also mostly high-value morphs)

increased from 2005 to 2008, but exports have dropped significantly in the past two years. (See

Table 4.4 below)

TABLE 4.4

U.S. Exports of 9 Constrictor Species, 2005-2010

Number of Snakes

Year

Total

Boa's

Other 8

% Boas

2005

3,284

2,261

1,023

68.8

2006

4,704

3,274

1,430

69.6

2007

4,150

2,749

1,401

66.2

2008

7,212

5,151

2,061

71.4

2009

5,909

4,200

1,709

71.1

2010*

7,826

6,916

910

88.4

Total

33,085

24,551

8,534

74.2

*2010 imports are estimated.

Source: LEMIS data

-64-

A review of the locations of exporters of the nine constrictor species in 2009 shows that

roughly 20% of exports (by number) were shipped to ports located out of the exporter’s home

state.

141

Export substitution Under the Proposed Rule

The effects of the FDA’s 1975 ban on infant turtles provides some insight on the likely

effects of the proposed listing of the nine constrictors with respect to whether domestic producers

can shift to only foreign sales of the nine snakes. After the FDA passed its ban on the interstate

sale of turtles with a shell lengths under 4 inches, turtle sales collapsed and the turtle businesses

suffered significant economic losses. However, the FDA’s ban allowed the export of infant

turtles. After the 1975 ban, turtle production and sales were reduced to a tiny fraction of the

numbers produced and sold before 1975. It took nearly thirty years to establish a large enough

foreign customer base to allow turtle farmers to ramp production up even close to pre-ban levels.

The severe impacts to turtle businesses occurred even though the FDA’s regulation allows for

inter-state transport for the purposes of bringing the turtles to port for export. More importantly,

the majority of turtles produced in the United States were and still are produced in a port city,

Louisiana. Therefore inter-state transport was not as big of an issue for turtle farmers as it is for

snake breeders and distributors. Thus, the example set by the FDA turtle regulation suggests that

in the short term it is unlikely that domestic sales of the nine snakes will simply shift to foreign

sales.

141

The 20% figure underestimates the effect of the ban on exports. Some exporters that are located

in port cites often purchase the reptiles that they are exporting from other breeders and distributors. Some

of the breeders and distributors that exporters purchase snakes from are located in different states than the

exporter. Thus, if the ban were enacted, the exporter would be unable to acquire snakes from breeders

and distributors located outside of his home state. We do not know the magnitude of these inter-state

transactions.

-65-

Impact of the Proposed Rule on U.S. Reptile Businesses

Because more than 99% of reptile businesses are small businesses, the vast majority of

businesses that will be impacted by the change to the Lacey Act will be small businesses.

142

Survey responses indicate that distribution of revenues for businesses that sell the nine

constrictor snakes roughly matches the distribution of incomes for all reptile businesses. This

implies that roughly 99% of all businesses affected by the constrictor snake ban will be small

businesses.

Besides banning the inter-state sales of reptiles, the proposed rule change will affect

snake prices and holding costs.

Prices

Survey respondents report that prices for each of the nine proposed constrictor species

have decreased significantly in direct response to the Service’s proposed change to its

regulations to list the nine large constrictor snakes as injurious wildlife under the Lacey Act. As

expected, the largest price reductions been for morphs. One dealer reports that prices for some

Boa constrictor morphs have decreased from $1000 to $30. Breeders and potential breeders of

Boas have been unwilling to invest in “good” parents (those that exhibit the desired genetic

traits) over the last year if they will be limited to intra-state sales of the offspring. That is, buyers

of Boas believe that without access to customers across the country, they would not be able to

earn an adequate return on their investment to justify purchasing a $1000 Boa . The lack of

demand for these high priced Boas has forced down their price. Given the fact that breeders, pet

owners, and retailers are increasingly conducting business at reptile shows and over the internet

142

GES estimation based on responses to short and long business survey.

-66-

and that many breeders increasingly depend on cross country sales generated by the internet and

at out of state reptile shows, it is likely that breeders (especially located in non-port states) will

not have access to the critical number of customers needed to continue breeding operations of the

affected constrictors.

In addition, sellers will no longer have the option of selling their snakes to distributors,

because without a national market, it would not be worthwhile for distributors to carry these

snakes. Decreased demand in the absence of any other mitigating factor will lead to lower

prices.

Holding Costs

Not only will breeders and retailers lose sales but they will be saddled with additional

holding costs if they do keep their snakes, once the proposed rule change is finalized. Snakes

cost money to keep. If the snakes cannot be sold, given away or disposed of, the current owners

will be saddled with the costs of keeping these large and expensive snakes, without the

possibility of making money from them. With money and space tied up in housing and feeding

these snakes, these breeders and stores will have fewer dollars available to make new purchases.

As a consequence, many breeders and stores will slow purchases for new reptiles and equipment.

The decrease in purchases negatively impacts other reptile breeders, wholesalers, and product

manufacturers. One snake tub manufacturer reports that Boa container sales have stagnated over

the last year, leading to an increase in inventories and a decrease in new tub production.

As the additional holding costs become onerous, owners will have four options. One,

they can keep the banned snakes and absorb the costs. The higher costs will be a drag on the

-67-

company’s operations until the snakes die. Snakes are long lived. Some of the banned pythons,

such as reticulated pythons and Burmese pythons, can live longer than 20 years.

143

A second option is that they can give the snakes to someone or some institution that will

accept them. Zoos have traditionally taken in unwanted or confiscated snakes as a public

service. The number of snakes that the zoos would receive, likely to be in the tens of thousands,

would tax the resources of most zoos.

A third option is that snake owners can kill the snakes. This option may be particularly

painful for breeders, hobbyists, and enthusiasts who spent years planning the breeding of these

snakes and then raising and feeding them.

Finally, there is the option to release the snakes into the wild. Since none of these species

are native to the United States, such a release would be illegal in all 50 states. Many of these

released snakes would be killed by inhospitable climates. Others would be caught by wildlife

authorities and either killed or taken to zoos. In all cases, such a release would act expressly

against the intent of listing the constrictors as injurious wildlife. It is an option that few of the

breeders we have interviewed would consider.

All of these options put a considerable economic and moral burden on constrictor owners.

The Economic Loss to the Reptile Industry of the Proposed Rule

The magnitude of the economic costs incurred by listing the nine constrictor snakes as

injurious wildlife depends in large part on the actions of current Boa and large python breeders.

The listing of the constrictors will result in: (1) the lost opportunity to make legal inter-state

143

Russ Case. Know How Long Your Reptile Lives. March 13, 2009. http://www.

reptilechannel.com/reptile-blog/russ-case/reptile-impulse-buying.aspx (Accessed November 29, 2010).

-68-

sales; (2) the lost opportunity for some breeders to make foreign sales because they must

transport constrictors across state lines to a port city; and, (3) and increased per-unit holding

costs from keeping these snakes.

Pet owners who possess but do not breed these nine snake will also bear a significant

burden from the listing. Owners that choose keep rather than sell or dispose of their snakes will

be limited in where they can move to within the United States over the course of their pet snake’s

life, narrowing the range of their personal and career options.

We consider two extremes. In one extreme, the Low-Impact Scenario, it is posited that

some (but not all) breeders will continue to bred the listed constrictors and to make intra-state

sales and (for those who can) foreign sales after the proposal is finalized. At the other extreme,

the High-Impact Scenario, it is posited that the combination of higher per-unit costs of breeding

and maintaining the listed constrictors as well as the reduced market for the banned snakes (and

the concomitant lower prices) make it unprofitable to breed, keep, and sell these snakes. In

addition, it is assumed that pet owners who do not breed these snakes will find it overly

burdensome to keep their snakes. In this scenario, all revenues derived from these snakes and

products and services for these snakes will not be realized after the proposal is finalized.

Low-Impact Scenario

In this scenario, we assume that breeders, retailers, and distributors will continue to make

intra-state sales, but that a) no inter-state sales will be made, b) no revenues will be generated

from imports, and c) businesses located in designated port cities will continue to export the nine

constrictor snakes.

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Responses to the short business survey indicate that around 57% of all live reptile sales

were made to out-of-state consumers.

144

The listing will therefore likely result in approximately

57% of revenues generated from sales of the nine constrictor species from breeders, distributors,

wholesalers, and retailers being lost if the nine snakes are added listed as Injurious Wildlife.

Responses to the Major Business Survey also indicate that roughly 11% of revenues from the

sale of live reptiles are generated from sales of the nine listed constrictor snakes.

145

Likewise,

we also assume that 57% of revenues from ancillary products and services for the nine

constrictor snakes will be lost.

146

In addition, we assume that 20% of all revenues from exports

will be lost.

Total reptile revenues, including reptile sales as well as ancillary product sales, range

from $1.0 billion to $1.4 billion per year.

147

Of these revenues, the listed constrictors account for

approximately $75.6 million to $103.5 million per year. The first-year economic impact of the

proposed rule assuming the low-impact scenario is $42.8 million to $58.7 million

High-Impact Scenario

We assume that all revenues from breeding, keeping,

148

and selling of the nine constrictor

snakes and from products and services for these snakes will be lost.

144

Data from the Small Business Survey was used because there was insufficient data from

responses to the Major Business survey on which to base an estimation of the percentage of total live

reptile sales made out of state.

145

The small business survey indicated that 30% of all revenues from the sale of live reptiles are

generated by sales of the nine constrictor species. To be conservative revenues from the sale of the nine

constrictor snakes are estimated using the lower 11% figure.

146

We estimate this amount as 11% of revenues generated from the sale of products and services.

147

See Chapter 2.

148

Florida has already enacted strict limitations on keeping Burmese Python, Reticulated pythons,

Northern African pythons, Southern African pythons, and Green anacondas. Texas has limited who can

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Responses to the Major Business Survey indicate that roughly 11% of revenues from the

sale of live reptiles are generated from sales of the nine listed constrictor snakes.

149

We assume

that 11% of all ancillary product revenues are generated by sales of products for the nine

snakes.

150

Responses to the Major Business Survey also indicate that the listed snakes account

for 28% of all snake revenue. We thus estimate that 28% of all veterinary costs for snake

including medication, are for the nine constrictor snakes. Therefore, for the high impact scenario

estimate, we assume that 11% of reptile sales, 11% of ancillary product sales, and 28% of

veterinary costs for snakes will be lost.

Since the high-impact scenario posits that all revenues that the constrictors generate will

be lost, the economic loss in the first year assuming this scenario is between $75.6 million to

$103.6 million.

A summary of the first-year impact of the Lacey Act listing of the nine constrictor

species is presented in Table 4.5.

have these snake through a permitting process for northern African rock pythons, Green anacondas,

Reticulated pythons, and Southern African pythons.

149

The small business survey indicated that 30% of all revenues from the sale of live reptiles are

generated by sales of the nine constrictor species. To be conservative revenues from the sale of the nine

constrictor snakes are estimated using the lower 11% figure.

150

It is assumed that because the nine listed constrictor snakes make 11% of all reptile sales,

products for these nine constrictor snake also make up 11% of all product sales. However the actual

amount could be greater or less than 11%

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TABLE 4.5

Estimates of Economic Loss in First Year of Proposed Rule

Lower Range

(Million $)

Upper Range

(Million $)

Annual Revenues

Reptile Industry

977.3

1435.2

Nine Constrictor Species

75.6

103.6

Costs of Listing Constrictors

Low-Impact Scenario

42.8

58.7

High-Impact Scenario

75.6

103.6

Long-Term Economic Loss

While the one year impact of the listing of nine constrictors is substantial, it is only a

fraction of the impact that U.S. reptile businesses will experience over the longer term. To

project the economic costs over ten years requires one to project how revenues associated with

constrictor snakes will grow, assuming that they are not listed as injurious wildlife under the

Lacey Act. Revenues associated with then nine species grew by seven percent for the period of

2008 to 2010.

151

However, the general pricing trend among morphs is for prices (and revenues

from sales) to fall as breeders produce more of the existing morphs. Thus, a seven percent

growth rate is considered an upper bound. A zero growth rate is considered a lower bound rate.

We would expect actual growth to between those two boundaries. Table 4.6 summarizes the

revenues that are generated based on a no growth and seven percent growth assumption given the

various cost scenarios discussed above.

151

Revenues for 2010 for the nine constrictor species were already substantially reduced because

breeders and merchants were panic selling the nine constrictor species in response to the notice of the

proposed listing in the Federal register in March of 2010.

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TABLE 4.6

Estimates of Lost Revenues Over First Ten Years of Adding Nine

Constrictor Snakes to Injurious Wildlife List

No Growth

($ Million)

7% Growth

(Million $)

High-Impact Scenario

Lower Bound Estimate

756.0

1,044.5

Upper Bound Estimate

1,036.0

1,431.4

Low-Impact Scenario

Lower Bound Estimate

428.1

591.5

Upper Bound Estimate

692.8

811.0

We discounted the lost revenues over the ten-year period using a 3.25% discount rate to

estimate the present value of that lost revenue stream.

152

The present value of the lost revenues is

an estimate of the lost economic value associated with the listing of nine constrictors as injurious

wildlife under the Lacey Act. Based on the low- and high-impact scenarios, and an expected 7%

growth in constrictor revenues, absent the listing, the economic losses over the first ten years of

the listing will be between $505 million to $1.2 billion. Assuming no growth, the economic

losses over the first ten years will be between $332 million to $901 million. (See Table 4.7

below) Under even the most promising circumstances, the long term impact of the listing will be

severe.

152

This is the average Bank Prime Loan Rate for 2010. Federal Reserve bank of St. Louis.

http://research.stlouisfed.org/fred2/categories/117.

-73-

TABLE 4.7

Estimates of Economic Costs Over First Ten Years of Adding Nine

Constrictor Snakes to Injurious Wildlife List

No Growth

(Million $)

7% Growth

(Million $)

High-Cost Scenario

Lower Bound Estimate

657.4

892.3

Upper Bound Estimate

900.9

1,222.8

Low-Cost Scenario

Lower Bound Estimate

372.3

505.3

Upper Bound Estimate

856.0

692.8

V. CONCLUSIONS

The United States reptile industry is at a crossroads. The last twenty years have seen the

ascendancy of American reptile breeders. Their mastery of reptile husbandry has led to a

kaleidoscope of magnificently patterned snakes and lizards. Their work has also attracted

millions of new pet owners. New manufacturing, wholesaling, promoting, entertaining, rodent

breeding, and delivery businesses have emerged to serve all of these new owners. Even older

businesses, like worm and cricket breeders and veterinarians, have gained a new customer base

due to the rise in the popularity of reptiles as pets.

State and federal laws and regulations concerning reptiles have taken the industry in

another direction. They have raised the costs of reptile breeding and selling in the United States.

Yet, despite the growing number of regulations and the growing bureaucracies, the reptile

industry remains vibrant, even in a flagging economy.

While the industry has weathered many regulations, a ban to limit the sales of nine

constrictors will do deep and lasting damage to the very sector of the reptile industry that has

helped to drive its growth, snakes. If the Service finalizes a proposed rule change to list nine

constrictors as injurious wildlife under the Lacey Act, it will deprive the businesses that depend

on these snakes, almost all of them small businesses, of $76 million to $104 million per year in

revenues and result in severe job losses. These revenue losses will continue into the indefinite

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future. The economic costs to the industry over the first ten years of the lost revenues are

between $505 million to $1.2 billion, assuming historical industry sales growth. Even assuming

no sales growth, the economic costs over the first ten years are between $372 million to $901

million. Under even the most promising circumstances, the long term impact of the listing will

be severe.