Alpaca Facts for Newbies

Easy Care – Wonderful Lifestyle – Multiple Streams of Income

• Come from South America and are related to the camel. 
• Were domesticated from a wild animal called a Vicuña. They are not small Llamas.
• Are herd animals and do not like living alone. They eat grass or grass hay, can live in small pens and are not expensive to keep.
• Are shy and their main self-defense is to run away if they get scared. 
• Are sheared once a year. 
• Live for twenty years or more. Still produce into their late teens.
• Have one baby per year; gestation is 11 to 11.5 months. 

Alpacas are raised for their fiber, which is a luxury fiber like cashmere. 

The fiber is:
• 5-7 times warmer, stronger and longer lasting than wool.
• Available in 22 natural colors, and takes dye very well.
• Lightweight “breathes” and is Hypoallergenic due to a lack of lanolin.
• Very durable, quite luxurious and is a “dry” fiber, containing no grease.
• Resistant to odors, staining, and moisture due to a naturally occurring resin in the fiber.
• Flame retardant, has stretch, doesn’t pill or wear thin, and clothing made of the prime fleeces can be worn comfortably next to the skin.
• Long lasting. A beautiful alpaca garment is a lifelong investment.

Seven Key Reasons Why Raising 
Alpacas Is A Wise Investment

1. Passive investors can reap substantial profits & tax benefits without raising alpacas on their own property; sheltering income from alternate sources.
2. Your alpaca investment is insured at full value, so your risk in raising alpacas is greatly reduced.
3. The alpaca investment grows exponentially, so profits increase rapidly.
4. Alpacas cannot be imported and registered, so there is no risk of the values decreasing by the market getting flooded from an unforeseen foreign source.
5. Raising alpacas is collaborative, not competitive and the opportunity for growth in raising alpacas is substantial for many years to come.
6. The value of alpacas has remained steady since they were imported over twenty years ago.
7. The lifestyle of raising alpacas offers tremendous incentives that life in the rat race can never compete with.

If you wish to start an alpaca business, yet don’t have the land, consider boarding. Let your initial investment appreciate while you take advantage of the tax savings for owning friendly livestock.

Take a look at our beginner series to get started

Multiple Streams of Income

So what is your potential income? You can generate income from several different revenue streams with your alpaca farm:

1. Selling alpacas. Many ranches hold on to most of their females and sell their males. How you choose which ones to keep and which ones to sell depends on quality, your income needs and the goals of your farm or ranch.
2. Fiber sales. Granted, it’s not much right now because there just aren’t enough mills to do the processing, but many ranchers find that fiber sales pay for their herd’s feed for the year, and expects that the fiber market will materialize in earnest in 5 to 10 years.
3. Retail Products. You can import or sell home made items from the alpaca fleece. Profits can be made in a variety of finished goods and yarn.
4. Boarding fees. If you begin offering your ranch as a place to board alpacas for people who haven’t yet bought land or only want alpacas as an investment, you can make an income from boarding fees. Most full-time alpaca ranchers have boarding alpacas on their farms and charge $90 to $120 a month for each animal. This can provide some regular cash flow to a full-time rancher.
5. Stud fees. Depending on the quality of your herd sire, you can make several hundred to several thousand dollars per service. 

Other Income Sources
6. Brokering. Some very knowledgeable alpaca ranchers have begun looking for the perfect alpacas for existing herds and handling the marketing of animals for sale. They command up to a 10 percent brokerage fee.
7. Showmanship or halter training. Since alpacas are highly intelligent, they can be easily trained. (Children and teens often enter animals into agility training competitions at alpaca shows.) Some alpaca show experts train new owners on how to work with their alpaca to get them ready for the show ring and are paid to do so. 
8. Your special skill might make you income as well.

Every alpaca rancher we spoke with reiterated over and over that the income potential seems to be closely related to how much people love the animals and enjoy farm life. Families who love the work find their herds grow faster than they ever expected. And it’s the sale of the Alpacas themselves that produce the greatest income, by far.

The “Bottom Line” On Alpaca Investing

• You definitely won’t get rich quick, but growing your investment exponentially in the long term appears VERY likely if you’re willing and able to embrace the lifestyle for 3 to 10 years. 
• Although there are at least five “revenue events” in the Alpaca industry (livestock sale, stud/herdsire fees, agisting services, fiber sales, and product sales) …by far the majority of your income will come from sale of livestock. 
• Because the income comes largely from livestock sale, you’ll need to reach a critical mass in your herd (about 15 to 20 Alpacas) before you can generate a substantial income. Before this level, you wouldn’t have enough animals to maintain reproduction/growth rates if you were to sell some off for profit.
• There are a number of VERY significant tax benefits and write offs, which vary from state to state. You’ll need to consult with a certified accountant to advise you in particular, (we are not qualified to provide you with tax advice), but the government usually provides incentives to make it easier to get started. (Maureen O'Gara's interview on CD goes into great detail on Section 179 of the IRS code. She feels that there are many tax situations in which individuals getting into the business can let the government help buy their alpacas for them.
• Although there are a variety of ways to reach critical mass, how much you invest in a quantity of livestock to start with, and how avidly you engage in the lifestyle are the two most important factors. (Theoretically, it’s possible to buy your way to critical mass right off the bat … but this might also overwhelm the inexperienced Alpaca investor.) 
• You don’t necessarily have to have the land, or the money in the bank to get started. Options for boarding (“agisting”) and financing your initial Alpacas are available from most breeders. (It’s rare that people only board in the long run … most investors are headed towards the lifestyle … but it’s possible).
• You can (and probably should) insure your Alpaca investment at an approximate cost of 3% of the value of your herd, per year.
• Generating a 6 figure income each year is realistic if you’re willing to grow your herd to 35 or 40+ Alpacas. Some farms do a lot more than this, and 7 figures is not impossible.
• We didn’t run across anyone who lost their initial investment in Alpacas … but, as with any investment, this is always a possibility. (It’s probably rare because most proven females should multiply their values by producing 10 - 15 offspring over the course of their life).
• If you’re only in it for the money … you might be better off doing something else. But if you love the lifestyle, the money should follow.

Take a look at our beginner series to get started