About Alpacas

Alpaca Values

An alpaca rancher with a small herd on a small acreage should expect to harvest his animals’ fleeces and sell their offspring profitably. The value of alpaca fleece and finished products made from that fleece is the economic foundation of the future market for alpacas. Breeders in North America are beginning to utilize fiber co-ops for the commercial processing of the fleece. Typically white fleeces tend to be favored by the co-ops as the yarn can be dyed into a range of colors. Darker colored fiber is often sold to cottage industries that revolve around hand spinning and weaving. Each animal will produce around three to ten pounds of fleece a year. Alpaca ranchers sell their fleece in a variety of ways including raw fiber, washed and carded fiber, yarns, and finished products, with lucrative margins. Profits or fiber production vary based on each farm’s model for fiber sales.
The current alpaca industry is based on the sale of quality breeding stock, which commands premium prices, and is moving toward a fiber supported industry as well. Female alpacas usually begin breeding at around 18 to 24 months of age, while most males can successfully impregnate (or “settle”) a female at about 3 years. The females produce one baby per year (twins are uncommon) during a reproductive life of about 10-12 years.

Factors that influence individual alpaca prices include color, conformation, fleece quality and quantity, age, and gender. Females typically sell for more money on average than males, but herd sire quality males have historically commanded the highest individual prices. Breeders often prefer one alpaca color to another; however the parents’ color does not necessarily guarantee a cria (baby) of the same color. There are many accepted theories regarding alpaca color heritability, and more research is needed to further our understanding of this issue. Of more importance to most breeders is the overall physical soundness, or “conformation” of the animal. In addition to color, fleece, density, uniformity, fineness, brightness and staple length will also affect value. Well-conformed alpacas with superior fleece characteristics sell for higher prices.
The range of value for females has adjusted to current economic conditions and has remained fairly consistent during the two years. Females with unique attributes have been known to sell for more. Proven, top-quality herd sires can be purchased as reasonable prices while the highest quality males with unique characteristics or exceptional offspring have sold in excess of $150,000.

Many breeders have started with several breeding age females and perhaps one male. Other new breeders may elect to start with several young animals or a breeding pair. There is an approach suitable for your level of interest and financial position. Alpacas are much like diamonds. The market pays a premium for the finest examples of the breed, and beauty is also in the eye of the beholder.

A Few Basic Facts

• Alpacas are members of the camelid (or camel) family.  They are mild-tempered, gregarious animals with an inquisitive nature and a penchant for bringing great delight to their owners.

• There are two different breed-types; the huacaya (wah-KI-ya) and suri ("surrey").  Although both types of alpacas are physiologically nearly identical, one main physical difference is clearly identifiable: the fleece.  Huacaya fleece has a degree of "waviness", or "crimp", thus giving huacayas a fluffy, "Teddy Bear-like" appearance. Surris, on the other hand, have no crimp in their fleeces, so their fiber clings to itself, forming beautiful "pencil locks" that hang down from the body in gentle, silky cascades.

• Indigenous to South America, the alpaca is raised for its soft fleece.  This fleece is sheared once a year, yielding roughly five to ten pounds (~2 1/4 to 4 1/2 kilos).  After only minimal preparation, it is ready to be spun into yarn (for kitting, crocheting, and weaving) or used to make felt (for creating hats, cloth, or moccasins).

• Alpacas stand approximately 36 inches (~1 meter) tall at the withers (the area where the neck and spine come together) and weigh between 100 and 200 pounds (~45 to 90 kilos).

• They require only modest amounts of food (approximately 1 1/2 to 2% of thier body weight in hay per day), plus free access to fresh water and free-choice minerals. Some owners also supplement their animals' diets with additional grains and crumbles, based on specific nutritional needs and preferences.

History of Alpacas

Alpacas have coexisted with humankind for thousands of years. The Incan civilization of the Andes Mountains in Peru elevated the alpaca to a central place in their society. The imperial Incas clothed themselves in garments made from alpaca and many of their religious ceremonies involved the animal. Museums throughout the Americas display textiles made from alpaca fiber.

The Spanish conquistadors failed to see the value of alpaca fiber, preferring the merino sheep of their native Spain. For a time, alpaca fiber was a well-kept secret. In the middle 1800's, Sir Titus Salt of Saltaire, England rediscovered alpaca. The newly industrialized English textile industry was at its zenith when Sir Titus began studying the unique properties of alpaca fleece. He discovered, for instance, that alpaca fiber was stronger than sheep's wool and that its strength did not diminish with fineness of staple. The alpaca textiles he fashioned from the raw fleece were soft, lustrous, and they soon began making their mark across Europe. Today, the center of the alpaca textile industry is in Arequipa, Peru; yarn and other products made from alpaca are sold primarily in Japan and Europe.

Outside of their native South America, the number of alpacas found in other countries is extremely limited. In fact, 99 percent of the world's approximately three million alpacas are found in Peru, Bolivia, and Chile.

Tax Considerations

3D's Alpaca Ranch

The less active owner using the agisted ownership approach may not enjoy all of the tax benefits discussed here but many of the advantages apply. For instance, the passive alpaca owner can depreciate breeding stock and expense the direct cost of maintaining the animals. The main difference between a hands-on or active rancher and a passive owner involves the passive owner’s ability to deduct losses against other income. The passive investor may only be able to deduct losses from investment against gain from the sale of animals and fleece. The active rancher can take the losses against other income.

Alpaca breeding allows for tax-deferred wealth building. An owner can purchase several alpacas and then allow the herd to grow over time without paying income tax on its increased size and value until he or she decides to sell an animal or sell the entire herd.

To qualify for the most favorable tax treatment as a rancher, you must establish that you are in business to make a profit and you are actively involved in your business. You cannot raise alpacas as a hobby rancher or passive investor and receive the same tax benefits as an active, hands-on, for-profit rancher. A ranching operation is presumed to be for-profit if it has reported a profit in three of the last five tax years, including the current year. If you fail the three years of profit test, you may still qualify as a “for-profit” enterprise if your intention is to be profitable.

As tax laws change and can be complicated, we advise seeking advice from a Tax professional.

Building your Herd

First, determine your goals for alpaca ownership. Would you like to own an inexpensive pair of gelding males for fiber production or as pets for you and your family? Are you going to be a full-time or part-time breeder? Will you invest in alpacas for current financial returns or are you going to build a herd toward the goal of being a full-time breeder? Once you’ve decided on your goal, the path to alpaca ownership will be more easily defined.
If you’re interested in acquiring a producing alpaca herd with immediate sales, you may want to consider a larger initial outlay. You would probably buy a number of pregnant females who would deliver a cash crop of crias (babies) immediately. This larger expenditure might also encourage you to become more involved in the industry and spend more time marketing your herd. Some breeders with larger herds have full-time ranch managers or hire additional labor to assist them with the day-to-day chores.
However you choose to be involved, there is an “Alpaca Approach” suitable for you. The industry is young and innovative strategies abound. Very few assets have the potential to reproduce themselves every year as an alpaca does. Today’s smaller breeder can choose to be almost any size in the future. An owner who likes the return alpacas offer, or the lifestyle they provide, can choose any level of ownership.

What do you do with Alpaca Beans?

Alpaca Beans

Alpaca Beans (poop) are the environmentally friendly way to enhance your soil and produce superior flowers and gardens. Most commercial fertilizers list the three main ingredients; Nitrogen, Phosphorus and Potassium. Alpaca Beans contain all three of these ingredients, but in much smaller amounts. That's important to gardeners because when the nitrogen content is too high there is a chance of "burning" your plants. In addition, as we all become more environmentally conscience, Alpaca Beans is the natural way to fertilize without using chemicals. As a bonus, Alpaca Beans also contain additional nutrients such as calcium; magnesium and sulfur that help supplement a plant's feeding needs. An adult Alpaca can produce up to 28 pounds of Beans a week, so it does not take long for it to build up.

We like to compost our Alpaca Beans and add to the garden in early spring. To reduce the risk of passing unwanted organisms from livestock to humans via the food we eat, we recommend that you only add "Fresh" Beans to the garden in the late Fall after the growing season if you are not into composting. You can apply composted Beans up to two months before harvest and not need to worry about passing any unwanted organisms.

Another good use of Alpaca Beans is Worm Farming. The Beans make the perfect food for red wriggler worms. The worms themselves produce "Castings" which is like gold to the Master Gardeners! We also like using the worms when we go fishing. Our worms are multiplying rapidly and we'll be sharing more on our Worm farming adventure as that aspect of the business matures.