Levels of ownership are diverse in the alpaca owner population; there are those that keep alpacas as family pets, or handspinners that keep fiber animals, those that have a small herd or even a single producing female for immediate returns every year, and those that aspire to build a herd with the goal of full-time breeding and the substantial income generated by that larger herd.  Most people who become involved in the alpaca industry do so after careful consideration, and are usually making a significant decision to add a new dimension to their life.  There are a myriad of possibilities for each individual to ponder, in terms of what suits them now, and where they would like to be in a few years.

Fiber

The fiber from an alpaca is considered one of the world's very finest natural materials.  Alpaca fiber is many times warmer and softer than sheep's wool.  Unlike sheep's wool, alpaca fiber contains no lanolin.  The fiber from an alpaca maintained in clean pastures does not have to be subjected to corrosive chemical washes before it can be spun into yarn; it can virtually go from alpaca to the spinning wheel.

Shearing occurs once a year in the spring, and yields a varying amount of fiber, depending upon the quality of the alpaca and the time since the last shearing.  Fiber grows at the rate of about six inches per year, and can sell for more than the price of silver.  Alpaca fiber in good condition is sold to private individuals such as hand spinners for one to five dollars per ounce.  Currently there are not enough alpacas in this country to yield sufficient fiber to supply a commercial market.  We will need quantities of a around 100,000 pounds of a single color for a commercial run.  U.S. alpaca breeders have begun establishing a fiber market and facilities to process alpaca fiber are opening all over the country.  Several fiber co-ops have been formed to pool our production, and a trademark to identify garments made from 100 percent U.S. alpaca fiber has been developed.

Social Behavior

The alpaca is a gentle creature that is a pleasure to be around.  Alpacas are not known to bite, and have soft, padded feet and non-aggressive personalities.  The average height of an alpaca is 3 feet at the withers.  The average weight of a mature adult is about 135-150 pounds.  This small size makes them relatively easy to handle.  They can be halter trained to lead both outdoors and in buildings, such as show venues.  As a social animal, an alpaca will be lonely and nervous without a companion of their own species.  Therefore, at least two animals need to be considered for a first purchase, even if one is simply a gelded male or pet-quality animal.  An alpaca will occasionally spit when threatened, but the action is almost always directed at another alpaca.  Usual reasons for this defensive behavior are protection of an infant or being challenged when eating.

Pregnancy

Females can be considered to be of breeding age when they reach about 14 months and 100 pounds, whichever comes last.  Recent opinion of both long-time breeders and veterinary professionals is leaning towards waiting until females are closer to 18 months before breeding, for both size and sexual maturity.  Gestation is 11 to 12 months, with a single baby born, called a cria.  Alpacas are induced ovulators, meaning a female does not go in to heat, but releases her eggs in response to mating.  This allows control by the breeder to choose breeding seasons, with a cria arriving about a year later.  A typical female can produce 12 to 14 or more crias over her life-span of about 20 years.

Nutrition

The diet of an alpaca consists primarily of grass. Low protein, inexpensive hay such as orchard grass is used as a supplement to pasture, or as a primary feed when pastures are not available.  The alpaca is a ruminant, meaning three-chambered stomach, and is very efficient at obtaining its nourishment from native grasses and hay.  Pelleted feed is also fed by most breeders at about one half to three-fourths pounds per adult animal per day, with a 50 pound bag costing about $15.  Pasture density of 5 to 8 animals, possibly even 10 per acre, depends on several factors including parasite concerns, calorie and protein requirements of males vs. gestating females, adults vs. youngsters, etc. and seasonal protein content of grass available.  Dry lots allow for a much greater density of animals to be raised per acre, with the trade-off being more expense for feed.  Crias will eat grass and feed at a young age, but will not eat a significant amount until they are weaned around 6 months of age.

Investment Potential

"The world's finest livestock investment"  The worldwide demand for alpacas and their fiber has been strong and has continued to steadily increase as the word gets out on these wonderful creatures and their natural treasure.  The alpaca supply is extremely limited.  They were introduced to this country in 1984, and importation from South America effectively ceased March 1999, when the Alpaca Registry, Inc. restricted its registration to only those offspring of alpacas already in the ARI database.  ARI is the only nationally recognized registry for alpacas in this country.  Prices have been very stable for 20 years, with pregnant females bringing prices of $10,000 to upwards of $30,000 for superior quality show animals.  It is common for the female offspring of an alpaca to sell for the same price or more than an investor paid for the dam.

Prices will not stay at their current levels indefinitely.  Right now we have a breeders market as the total fiber yield remains well below the supply requirements of a commercial fiber market.  Perhaps ten years from now, the transition from a breeders market to a fiber market will begin to seriously evolve.  During this decade or so, the alpaca industry will continue to work towards creation of a large scale demand for this highly valued fiber.  Through this effort, future economics can remain nearly as attractive as we are experiencing today.

Taxes

Tax benefits can be a major incentive to raise alpacas.  Breeding stock can be depreciated and Section 179, Expense Treatment of a Capital Asset allows a significant deduction as a business expense the first year the asset is acquired.  Income derived from the sale of an alpaca used for breeding purposes can fall under capital gains income, and is subjected to a lower tax rate than regular earnings.  Feed, vet care, supplies, etc. can be deducted as expenses, and other more permanent items can be depreciated, such as buildings, or treated as a capital item, such as fencing, automatic waterers, etc.

Expenses

Vet care expense on these animals is usually minimal.  Immunizations are yearly, and deworming frequency varies on parasite populations in your environment, varying from every four weeks to every few months.  Most maintenance health care, like toenail trimming, can be done without a veterinarian.

Mortality insurance is strongly recommended to protect your investment, and is based on about a 3-4 percent premium per year, according to your reported value of your animal.  Board could be another expense if you cannot keep your animals on the property.  Cost can be two to three dollars a day, depending on animal's needs.  All costs incurred are reported as expense against your income when it gets to tax time, so careful record keeping will put money back in your pocket.