As many of you are aware, I’ve recently had a couple of alpaca meeting opportunities that raised my curiosity about the business of alpaca farming. I’ve heard (off and on) for years that the alpaca business is a gold mine but didn’t know why so I decided to poke around a bit and connected with a delightful woman (Susan) who is in the business and who was only to happy to share. I also did a good bit of digging around on the net on sites such as the Alpaca Owners and Breeders Association for more information (more resources below). As with all new research, I didn’t initially even know all the questions to ask but I’m more than happy to share what I was able to learn.
Alpaca demeanor: Yes, alpacas are adorable, gentle, and incredibly friendly animals. Some believe that they are quite magical creatures and even make great pets. I can’t argue with the feeling of magic that surrounds them however, you’d have to make your own determination on that score. If you are interested in reading about the sounds they make, spitting and more you must read Wikipedia’s the article on alpacas. It’s highly entertaining.
I’m told that they are also highly trainable (“like dolphins”) in fact, I’ve witnessed that they can be trained to use a litter box (ok, not “litter”ally a litter box, but they can be trained to use a specific location and they generally all use a single location) and alpacas are much easier to care for than other livestock. Hmmm…so good so far.
Care and feeding: Alpacas are much easier to care for than other livestock, definitely smell better, require less land and cost less to maintain. I can’t very well provide you with proof of ‘smelling better’ in this post so you’ll have to experience that one on your own however, as for ease of care, I was able to learn a few nuggets.
If you live in a particularly cold climate, you’ll find yourself putting coats on the crias (babies) at night and perhaps wiping a few noses during cold snaps and each spring will be the time for shearing. If you have a pasture setting, they get much of their nutrition from grazing and hay but you’ll still want to provide them with grains and minerals to balance their diet. Notice that I said “If you have a pasture setting” because there is another model that was news to me.
The business of alpacas: I always believed that since I don’t live on a ranch, the whole idea of starting an alpaca business was out of the question. That turns out not to be the case. It seems that many of the alpaca farms also offer boarding and care much like horse ranches do, which opens the opportunity to city folk. Interesting…but what of the costs?
An alpaca can cost up to $500,000 but a more ‘typical range is from $1,500 to $50,000 depending upon type (Huacaya or Suri), color (over 50 of them), age, gender, lineage, conformation, whether or not they are ‘proven’ etc. and this is the one livestock business for which there is a DNA registry meaning the lineage is proven (unlike horses or dogs) by DNA testing. Boarding can run $100-$120 / month but then takes care of the cost of feed and a potentially a good bit of the veterinary costs if your farm does most of that themselves.
Admittedly, I haven’t done a full-scale analysis but I have learned that income can be derived from selling the wool, from breeding and selling the animals or from farm ownership.
If breeding, you must take into account the gestation period of an alpaca is 11 1/2 months so at best, you’ll get one cria from each female every year. You may be able to get a discount on breeding if you opt to breed with the farmer from whom you purchased your female. It’s worth checking into.
A single alpaca can yield 50 to 100 pounds of fiber each year that can be sold for spinning into yarn. According to the New England Owners and Breeders site, prices on the fiber range from $2 to $5 per ounce depending upon the quality of the wool. Interestingly, there are great tax advantages to the business (note, that I am not a tax advisor). Expenses are deductible, the animals can be depreciated over 5 years , there is no self-employment tax to be paid on them and they are insurable. The rules that apply for selling the fiber however, are different since you are producing a product.
Admittedly, I haven’t done a full-scale analysis but it would seem to me that shortest path to success is in the business of owning the farm itself. It would take a tremendous capital investment to become a breeder of highly sought-after animals (one cria a year just won’t get it done quickly) and ditto with selling the fiber once a year which brings me right back around to the belief that the gold lies in owning the farm and charging for boarding and care. The ranch about which I now know the most, houses about 300 alpacas. If they were all boarding there (which they are not) that would be 300 x $100 per month. Now we’re talking gold.
Either way, breeding highly sought-after alpacas, owning the ranch, or selling the fiber, I believe it takes a significant investment to ensure success which brings me right back to my original hypothesis – you really need to own the ranch.
If you are interested in learning more, I suggest starting with the Alpaca Owners and Breeders Association mentioned above. Additionally, many states or regions have their own for instance in California the California Alpaca Breeders Association is another good stop for information. The Southeastern Alpaca Association covers farms located in the states of AL, FL, GA, MS, NC, SC, and TN. Sites like these host a wealth of information on the business and include events, directories of farms etc.
The Northwest Alpacas website hosts a business planner to get your started with the business planning end of things. There is also an abundance of information on the web from bloggers, owners and farmers. Just “Google” “alpaca farming” and you’re off to the races. Then I would suggest actually finding and visiting a farm or two in your area to get an up-close and personal feel for the ins and outs.
Do you have any experience with alpacas or know anyone in the business? I’d be very curious to hear a different perspective.