Why Do We Raise Alpacas?

Lifestyle... Although alpaca breeder "goals" will vary a great deal, the general reason behind choosing this endeavor seems to be fairly consistent. Alpaca breeders enjoy the rural lifestyle and fulfillment that comes from raising and caring for these special animals. Many, if not all, alpaca breeders had previously considered raising other farm animals and choose alpacas because of the fairly simple and straightforward business model of a fiber industry.  Alpacas don't require much land or other resources. They are fairly small, gentle and easy to handle which greatly reducing the potential for injury to even small children.

Business/Investment....One very prominent factor that attracts many new breeders is that the industry is not based upon a terminal (slaughter) business model to be profitable. Alpaca breeders tend to have achieved success in their lives while working in other industries and now view raising alpacas as an interesting personal challenge as well as having a potential for profit. The Federal tax considerations provided to the livestock industry surpass those found in any other industry, including real estate.

Fulfillment..... Most breeders were drawn by curiosity to this unique livestock and the rural, agricultural lifestyle. As the breeder begins to develop breeding goals and witness the progress their herd has achieved, it is easy to understand how many obtain a satisfying sense of fulfillment. Most alpaca breeders can't imagine their lives without alpacas.

What Do We Do With Alpacas? (What are our goals?)

The alpaca market has matured since we first began our alpaca adventure in the late 1990's. Early on, the main industry focus was simple: produce as many offspring as possible. The North American alpaca population was small and the demand for any type of alpaca was significant. If you owned an alpaca female, you were considered an "alpaca breeder".   As the national herd grew, so have industry expectations. Local breeders began to develop their own goals to meet those expectations.  Some may have general goals related to colors, or fiber qualities, others will focus more on genetics and predictability. There isn't any such thing as a right or wrong goal. Breeders seem to gravitate towards the goals that interest themselves the most.

Focusing on the qualities that make an alpaca valuable have become more prominent both as a national issue as well as an individual focus. The marketplace or end use for alpaca fiber creates the challenge that breeders strive to meet and provides the basis for the diversity. Nearly all breeders seem to have general short term or yearly goals related to colors or fiber qualities. Lately, the industry has been witnessing more and more breeders who are incorporating long term goals based upon genetics and predictability. 

The foremost market demand of the alpaca industry is the demand for fiber. There are many different markets for fiber.  A great deal of the current North American fiber market could be considered "boutique" type markets. These markets thrive on the uniqueness and the growing awareness of alpaca fiber qualities. Some market demand is focused on the natural colors that alpacas produce. Other markets are more interested in the fiber characteristics of fineness and uniformity that produce the exquisite "handle" that alpaca is capable of producing.  Along these lines, the best known boutique markets are for vicuña and super fine merino sheep wool which have reported sale prices of $500.00 to $750.00 per pound of raw fiber. Although our current North American alpaca fiber market is much less than those values, no one doubts that alpaca fiber will steadily improve in quality untill it competes with vicuña and greatly surpass merino in fineness and handle.

The demand for ultra fine and uniform fiber provides the basis for a sustainable commercial market for alpacas world wide. It is my belief that the breeder with a goal of predictability, along with our DNA bassed registry establishes North American alpaca industry as being best suited for supplying top breeding stock for herds worldwide..

Why Do Alpacas Cost So Much?

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If a single condominium was valued at $10,000,  a 10 unit condo building would likely be valued at $100,000. Let's take it one step further.... What would a single condominium be worth if you knew that with a little  elbow grease and management expense it would grow into a 10 unit building over the next ten years?  The answer you would come up with would probably be more than $10,000 and less than $100,000. (less than $100,000 because of the "time value" of your investment) This is the same type of mathematics that goes into determining the value of  producing livestock. Seller's determine their sale prices based upon the production and values they anticipate in their market. Buyer's will determine what they can afford to buy based upon their resources and the amount of return they would like to obtain.

When placing a value on an alpaca, it helps to have a little knowledge of the income they are capable of producing. Rule #1:  Alpacas are not created equal.... indicating they should have different values. The main factor that relates to value of an alpaca is determining what it will produce (offspring and/or fiber).  If we start with a non-breeding alpaca that is used solely for producing fiber then it's value will be based upon how much fiber it will produce, the value of the fiber and how long will it be productive. If you are looking to evaluate a breeding alpaca then you need to consider a few more factors such as it's sex, age, health, reproductive history, phenotypic/genotypic qualities and more.

In addition to the real estate example above, I will often compare an alpaca sale to a business sale. When I sell a breeding alpaca, I no longer have the production of that animal. So, when I place a sale price on an animal,  I need to consider what future income and the value of the genetics that can be attributed to the sale.