The Butterfly Farm

CRES provides three documents with each shipment:

1.    The invoice  (PDF)
2.    The Shadow Invoice  (PDF)
3.    The client worksheet for lost declarations (Excel spreadsheet)

Optionally, clients may also request:

4.    A photographic guide of the adult species included in the shipment  (PDF)
5.    a photographic guide of the pupae included in the shipment  (PDF).  

All of these documents are sent electronically within 24 hours of the shipment's departure as part of our pre-alert service.  The original printed copies of the invoice and shadow invoice are included with the pupae.

The invoice is a legal document which accurately states the species and quantities contained in the shipment and the amount to be paid.  These are the pupae declared for customs and it is the document that you can pass on to your accounting department for processing.

The shadow invoice is for the benefit of the biologist in charge of the exhibit and is concerned with how many of which species he/she is receiving.  The shadow invoice explains how we built your invoice and why you received the quantity and variety of pupae that you did.  It consists of four sections:

1.    The base order.  These are the pupae that you ordered and the only pupae that are paid for.  As the client you have great control over specifying which could pay you want and how many of each.  One compares the quantity of pupae requested for each species and the number actually received, usually there should be a close correlation.  The total cost for the pupae contained in your base order is the same amount that is charged on the invoice.  Sometimes a a small discrepancy may appear due to rounding.
2.    The courtesy pupae.  These pupae are free and consist of those pupae that were left over after fulfilling yours and all of CRES’ other clients' base invoices.  This section starts off by explaining how many courtesy pupae were supplied and why.  It then proceeds to list the species and quantities provided.  Notice that the unit cost is always zero.
3.    The replacement pupae.  If you declared losses from a previous shipment, CRES will replace them and it is here that they are identified.  You'll see the invoice number and date from which they were declared, the quantity that we owe and how many were sent.  In the event that we are not sending the full quota, the number pending will also appear.  The section then proceeds to list the species and quantities provided, always with a unit cost of zero.
4.    The accounting summary.  If you were wondering what charges were applied to the invoice or how we determined the unit prices that appear on the invoice (they will vary from one shipment to the next) you will find the answer here.  

For a video explanation click here.

The client worksheet is sent electronically with the pre-alert as an Excel spreadsheet and is used for filling out one's lost declarations.  We suggest that it be printed and attached to a clipboard in anticipation of the shipment's arrival.  

Declaring losses is easy!  As one unpacks the shipment, simply jot down the species, quantity and reason for any loss encountered.  Stated simply, "Any pupae of that arrive in less than perfect condition may be declared as losses."  There is a key at the bottom of the worksheet to facilitate your declarations.  Should you declared 12 pupae as unsatisfactory, you should receive 12 additional pupae for free in the next shipment.

The client worksheets may be filled out in Excel and returned as an Excel attachment; filled out by hand, scanned and returned as a PDF document; or simply faxed.  

For a video explanation click here.

Many clients find it useful to have a visual guide when unpacking the pupae or associating the pupae with the adults.  When requested, CRES will provide a PDF document with photographic images of:

1.    The pupae and /or
2.    The adults that are contained in each shipment

Because the scientific names can be tedious for some, particularly those institutions working with volunteer staff, we can provide the common names on the sheets as well.  If in your department you refer to a species by a different common name than the one provided, let us know!  CRES will identify the species are your preferred common names.

Because the quantity of pupae will continually vary due to the courtesy pupae provided, while the amounts of the invoices will remain constant according to the base order, the unit prices will change accordingly.  While you may receive more pupae due to volume or lost declarations, and fill your exhibit accordingly, your budget remains constant!

There are at least three ways that should be explored…

1.    Increase your order of Morphos.  For each Morpho that you order, for those up to 20% of your base order, CRES will include one free pupa.  If you place a base order of 400 pupae and request a 40 Morphos, you will receive 40 additional free pupae.  If you order 80 Morphos, you will receive 80 extra free pupae.  If you order 100 Morphos, you will still receive 80 free pupae.
2.    Paradoxically, consider increasing your monthly orders with CRES.  The more pupae that you request in your base orders each month, the more pupae CRES will include as part of its incentive volume.  This incentive can reach as high as 20% above your base order.  Maybe by ordering just 50 or 100 more pupae per month you could increase the quantity of pupae you receive quite significantly.
3.    Declare your losses!  By dedicating just a few minutes a day to monitoring your emergence chamber, and by declaring your losses through non-emergence, you may receive 15% more pupae at no additional cost through the replacements.
4.    For our North American clients that possess a USDA interstate transit permit, we would urge you to allow us to ship your parcel through LPS-LA in Denver.  This method is not only extremely timely and reliable, but can also result in savings of as much as $100 per shipment in shipping costs.  

CRES can provide you with a simple Excel spreadsheet that will assist you in your calculations.  Within minutes you can determine which of these options work for you and to what extent.

Every pupa that CRES ships is covered by its guarantee policy and may be claimed as a loss.

CRES strongly urges all of its clients to declare losses.  The minimal time involved is very cost effective for the exhibitor.  At the same time, the results tell us in real-time what is going on with our pupae and allows us to take corrective action.  

Whether you choose to settle for just the Tier-1 policy of 10% additional pupae, declare losses only upon arrival (Tier-2) or monitor your emergence chamber (Tier-3) is entirely at your discretion.  Just know that CRES stands behind you no matter what level is best for you.  

If my losses were high in a given shipment, may I stagger the replacements so I don’t receive too many at once?
Certainly.  In those unusual instances when losses are very high you may stagger the receipt of your replacement pupae over as many as three shipments.

Yes you may!  You decide how many pupae you’d like, how many of each species you’d like and prioritize them according to their importance for the occasion.

Yes, at any time.  Just send us an e-mail with your new preferences and she’ll take care of it for you.  Your new preferences will remain in effect until you inform us otherwise.

For an explanation on how to design your invoice, please consult www.butterflyfarm.co.cr.....

No.  Due to constraints that are out of our control such as the market’s condition, weather, the specific species, we cannot make guarantees.  Usually though there is a close correspondence between what you indicate you’d like to receive and what CRES provides.   By glancing at the “Base Order” section of the Shadow Invoice, you can monitor this easily for yourself.

If a species is important, make sure that it has a Priority 1 rating.  In this way it will be among the first pupae assigned to your packing list.  If there are 12 clients that day and each has two Priority 1 species, it is very likely that you'll receive yours if we have them, but not guaranteed.

If it is vital that you receive it, then place a bid for it.  This, in effect, will make you the “ten ton elephant in the room” and your bid-for pupae will be assigned before anyone else.  If we have it, you will be sure to receive it.  CRES will not assign more pupae at the bid-for price than requested.

The bidding process starts at $.30 above the list price and proceeds in increments of $.10.  In the event of multiple bids, the pupae pupae will be assigned in order of the bids.

You should not ever receive any unwanted species from CRES.  CRES offers "layers" of refusal for less than desirable species.  In ascending order of severity…

1.    Reduce the percentage requested for the species in your base order.  Rather then 3%, you may suggest 1%.
2.    Reduce the priority of the species.  For example you can reduce a species from Priority 3 (where we pay attention that you receive it) to Priority 4 (we don't pay attention and maybe you will receive it and maybe you won't).  Or you can reduce the priority from Priority 4 (you may or may not receive it in your base order) to Priority 5 (while still permitted, every effort will be made to avoid shipping it, even as courtespy pupae).  In both of these cases the species may be assigned as a courtesy pupa.  It's
3.    Prohibit the species.  In this case you will never receive it again until you should reverse your decision. 

Sorry, free pupae are free pupae.  After fulfilling everyone’s Base Order to the best of our ability, we then look to see what pupae we still have available.  That said, we make every every effort to provide as wide a distribution of species as possible.  Because species are “free” or “surplus” does not diminish their impact for your public.

These are the pupae that we assign as courtesy pupae… 10% above the base order for compensation for non-emergence (Tier 1 guarantee), 1x1 Morpho sp., your volume incentive and replacement pupae.

Hobo data loggers are the size and weight of a matchbox and take hourly temperature and humidity readings while the shipment is in transit.   The results are essential to understand what went wrong with the particular shipment when the overall emergence rates are low.  With the Hobo, we have the means to know if the courier left the box in the sun on the airport runway in Miami in July or the delivery man drove all morning around northern Norway in January before it finally delivering the parcel to the exhibitor's doorstep.  Knowing where the problem occurred, either crests or the client can take immediate corrective action to make sure that it doesn't recur.

Willingness to receive Hobos is a requisite for those clients that choose to take advantage of the tier-3 guarantee policy and care to declare pupae that fail to emerge in their emergence chambers.

The inclusion of Hobo data loggers is a free of CRES’.  The only requisite is that the exhibitor must provide written authorization and assumes responsibility for the data logger’s return.  A $90 replacement fee is charged when the Hobo is not returned after 90 days.  

Please contact CRES if the service would be of interest to you.

Would your exhibit or institution care to support a local civic initiative in Costa Rica?  Children's scholarships and school supplies, clean water and irrigation projects, reforestation initiatives, indigent families and other worthy causes would all benefit greatly from small contributions.

CRES and its breeders will separately match your contribution of up to $20 a month.  That's to say that your contribution of $20 would be tripled to $60 for the recipient.

A project description and photographs, together with copies of the receipts would be provided to you by CRES.  Your institution would "own" the project and be free to share it with your public as, literally, all of the funding would have come from your public's attendance.

We cannot urge our North American clients sufficiently to authorize us to ship their shipments from CRES through LPS-LA in Denver.  The reliability in delivery has proven far superior than alternative methods and at the same time can be as much as $100 less in shipping expenses.

Would you like to share with your public a little information about where your butterflies come from?  Let us know and we will be happy to provide you with a copy of CRES' poster, "Where Our Butterflies Come From."  The poster is available in English and for CRES’ European clients, Spanish, Dutch, German, Italian and French.

If your exhibit has audiovisual capabilities for your public, CRES would be happy to provide you with a complimentary copy of RAI’s 41 minutes documentary film about where butterflies come from.  The film was undertaken under the guidance of Dr. Enzo Moretto of Butterfly Arc in Italy and provides an excellent inside-view of the butterfly farming process and its people.

Contained with each a shipment is an aging account detailing each invoice that remains outstanding.  With just a glance one can know the state of one's account.

Nothing.  However, CRES will begin charging a 2% interest charge on subsequent shipments if an account extends beyond 45 days.  The interest rate grows as the accounts grow older.  It is important, therefore, to be proactive in helping us anticipate problems.

Payment is due within 30 days of the export date and may be made by bank wire transfer, check (never addressed to Costa Rica!)  or credit card, whatever method is most convenient. 

Yes.  This is in fact our preferred method.  Charges will processed automatically only after 30 days and notification will be sent to you.  If this method is of interest, please contact us to make the necessary arrangements.

While many easy low-cost "short cuts" are available in Costa Rica, a hyper-competitive environment where poverty and excess pupae abound, when addressing the interests of clients, breeders, government regulators and tax authorities, CRES goes to lengths to strike a balance between competing interests and remain transparent and above board. 

The supply and demand for pupae varies greatly throughout the year.  In addition to the variation in seasons, the industry’s high and low months, demand changes depending on the particular mix of exhibitions on a given export day.  The supply of pupae too is irregular.  In Costa Rica we have rainy season and dry season.  Naturally, the rainy season is more conducive to butterfly farming than the dry when breeding conditions are very difficult.  In the Atlantic Zone, where butterfly farming is most prolific, we are subject to extensive flooding and spurts when the sun may not shine for weeks.  Matching the breeders’ rearing efforts to the industry’s needs is approximate at best.  
    
To guarantee reliable deliveries and respond to last-minute emergencies that exhibitors experience, CRES must receive many more pupae than we may have demand for.  The downside is that the unsold pupae are returned to the breeders who feel dispirited for their wasted efforts.  To better balance this situation, CRES buys most of the surplus pupae and passes them on to its clients for free.  The client benefits with extra pupae and the breeders win by increasing their incomes and not experiencing so many pupae returned to them. 

After 25 years of steady growth and careful nurturing, butterfly farming in Costa Rica would, in business parlance, now be considered a “mature industry.”  http://www.investopedia.com/terms/m/matureindustry.asp

The know-how is widespread.  The barriers to entry, both for farmers and suppliers are rapidly declining.  Because there have been many cases of butterfly farmers doing extremely well financially for themselves, especially in the 1990’s, there has grown a mystique about the activity that has motivated many aspiring entrepreneurs to enter the market.  The supply of pupae has grown tremendously in recent years while the demand not so much.  The laws of supply and demand   http://www.investopedia.com/university/economics/economics3.asp
have therefore brought the prices down, particularly in the domestic market.  This has affected the purchase price of all pupae, including Morpho.  As no exporter or even the entire market can buy all the Morpho pupae produced, many breeders must offer their pupae for prices that are well below the cost of production (a species that requires 10 weeks to rear in the larval stage), a fact that some exporters take advantage of.  “Hey, it’s a free market.  If the farmer is willing to sell his pupae...”  

As prices decline, the obvious strategy for CRES would be to pay less to the breeder, settle for the prevailing market rates, and pass the savings to the clients.  While this is great for the exhibitors in the short run -- and a proven path for exporters to gain market share -- it would be catastrophic for the farmers and, in an industry dependent on the long run availability of this key species, probably not so good for the exhibitors either.  

CRES has chosen not to compete in price in a race to the bottom.  In fact, CRES continues to pay nearly twice the prevailing market price and in this way maintains its breeders reasonably happy and motivated.  While we don't have money, what we do have are many extra pupae.  It is more cost-effective to buy the extra pupae and pass them on for free to the exhibitor.  With one free pupa for each Morpho, CRES' Morphos remain cost competitive with its rivals while retaining market viability.  Simultaneously, the farmer sells an additional pupa that he or she would not have sold otherwise and has fewer pupae returned.  And for CRES, the 1x1 policy keeps its competitive in the market.  This is a win-win-win situation!

The bidding process is a win-win situation for the exhibitor and the breeder.  If an exhibitor feels strongly for particular species, he can make sure that he'll receive it if it's available.  At the same time, if there are exhibitors that strongly desire particular species beyond those that are readily available, the bidding process encourages the breeders to make the necessary effort to make them available.

100% of the bid price goes directly to the breeders. 

What has happened in this competitive market in recent years, notably in Costa Rica, is that one exporter will publish a price list whose prices are substantially lower.  In the last several years prices for Costa Rican pupae have come down by about 20%, from an average of $2.25 to under $1.80.  This has inevitably resulted in Neotropical suppliers reducing their prices accordingly simply to remain relevant in the market for a commodity http://en.wikipedia.org/wiki/Commodity product such as butterfly pupae.  In some cases, as occurred in Belize, suppliers may find it’s no longer worth competing and go out of business.  A Heliconius charitonia is a Heliconius charitonia, regardless of where it came from.  

As anyone with butterfly farming experience will attest, not all species are equally common or easy to rear.  Indeed, many species are uncommon or exceedingly difficult to rear, resulting in only a few that will survive through their pupae stage.  Not only may some suppliers go out of business, but some species too.  It’s no longer worthwhile for farmers to exert themselves to rear those difficult species whose prices were slashed along with the easier species.  In CRES’ case, we have seen the list of species available each week decline from around 80 several years ago to about 60.

In most instances, it’s OK if certain species become comercially extinct.  The visiting public won’t likely notice the absence of an occasional Battus belus.  Some exhibit managers may feel quite differently though and very much missed a particular species.  Or maybe there is an occasion in which a large quantity of a particular species is much needed.  CRES' bid system is an effort to allow for the market to regulate itself and am sure the continued supply of those species that would otherwise be missed.  If an exhibitor would like to encourage the rearing of Danaus gilippus, he or she can do so by offering a bid.  By offering higher prices, farmers would be encouraged to dedicate themselves to these species.

CRES and The Butterfly Farm (TBF) are for profits with broad social objectives.  You could say that they are for-profit companies with nonprofit objectives.  Never has "profit maximization" been then the motivating factor behind our actions and policies.  This was recently demonstrated by a 7-year research project conducted by the Harvard Business School in conjunction with numerous leading business schools throughout Latin America.  In 2008 HBS recognized CRES as a leading example in Latin America of a “socially inclusive business” and brought leading business educators to disucss CRES and other exceptionally progressive businesses.  TBF has filled the town of La Guácima with 42 butterfly-themed murals and the municipality of Alajuela has designated LA as “La Comunidad de Las Mariposas.”   Both are pioneers in Latin America in their respective fields, which over 25 years has brought to Costa Rica a multi-million dollar industry which between pupae exports, tourisim and souvenirs today employs many hundreds of families.  Both companies have been proactive in funding and organizing local civic affairs.