The Alpaca Business

by Glenn Livingston, Ph.D of Psy Tech, Inc.

Do you have questions about starting an Alpaca Business?

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• Can the alpaca industry really provide a viable way to make a living?
  
• How much does it cost to start and grow a herd?
  
• How good is the fiber market, and can it be sustained?
  
• How much can you realistically expect to earn?
  
• What do you look for in an alpaca breeder?

For many people today, living in the country, away from the hustle and bustle of the city, is a long-term goal.

Families long to be reconnected with the land and with nature, maybe even raising some animals.

But if you're not experienced with livestock, actually managing a ranch can be overwhelming. And, even if you ARE experienced, running a ranch; running it PROFITABLY are two different things entirely.

Over the last 40 years, city dwellers have been lured out to the country to raise everything from chinchillas to emus.

The latest highly touted opportunity is raising alpacas … a sweet, docile animal native to the Andes. By the way, it was LOVE AT FIRST SITE for me … my wife took a picture! …

Alpacas are known for their luxurious fiber, … warmer, stronger and softer than wool.

But is it really possible to make a living? Is becoming an alpaca breeder right for you and your family?

It depends primarily on how much you love animals, how much you enjoy the outdoors, and how much time you're willing to put in to learn.

Or, to put it more simply … it depends on whether you genuinely can muster a ‘passion' for the alpaca lifesyle.

You see, the economic realities of the industry appear strong enough that… 'YOU CAN MAKE IT WORK IF YOU WORK IT'.

The reason I say this confidently is because …

• The extremely high price of alpacas has been relatively stable ($15,000 to $20,000+) for the past twenty years, and most experts believe it should remain this way for quite some time.
  
• If you put your LOVE into raising these gentle, beautiful animals, there's no reason you can't breed and multiply your herd to your desired size, and generate a living along the way by selling offspring.
  

But there's an important paradox in the alpaca industry. You see, in order to really earn good money, you have to NOT want it too badly.

No, I'm not a Zen-master or anthing like that … what I mean is, to really make a go of raising Alpacas for profit you have to be into it for MORE than the money.

SUCCESSFUL alpaca ranchers virtually ALL report loving what they do. You can't help but recognize genuine enthusiasm in their voice, as well as the affection they feel for these majestic animals.

Being able to embrace the lifestyle is CRITICAL because the alpaca industry is not passive (like stocks or bonds).

Although alpacas require considerably less care than many other types of livestock (one rancher equated caring for each alpaca to require about the same time, energy, and expense as caring for a large dog) … they DO require care and attention.

This is at once the greatest obstacle, and also perhaps the best benefit of alpacas as a business. When you invest in stocks or bonds, you lose control over what happens with your investment right after you plunk down your funds. But NOT so with alpacas! (Your rewards are very much related to your efforts).

A person who easily bonds with animals, who often “wakes up” to find countless hours have passed while they were enjoying the outdoors, who loves learning animal husbandry, and who likes the company of other animal lovers will generally have little trouble doing all that is necessary to make Alpacas a way of life for them.

Such people can develop six figure incomes, and, after several years, sell their herd at retirement for a nice nest egg.

But for someone just looking for a quick and easy way to earn good money, Alpacas probably will be a disappointment.

So the first step is to ask yourself …

• Do I see myself being truly passionate about the Alpaca Lifestyle?
  
• Do I LOVE animals enough to dedicate my time to care, breeding, and husbandry for a few years in order to reap the rewards of the alpaca industry?
  
• Do I ENJOY the outdoors enough to spend a few hours outside each day?
  
• Would I be willing to devote myself to learning all about alpacas if I could be reasonably assured of the end results?

There are some valuable aspects in this industry to consider:

• There are four “revenue events” in the Alpaca industry; livestock sale, stud fees, fiber sales, and product sales, 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. Prior to reaching this level, it's usually not a good idea to sell too many offspring because it interferes with your ‘production capacity'. Generating income requires that you sell your females … and if you sell too many before your herd is large enough, you won't be able to increase in size as fast by breeding
  
• There are a number of 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, but the government usually provides incentives to make it easier to get started, as long as you treat your alpacas as a BUSINESS.
  
• Although there are a variety of ways to reach critical mass, how much you invest in a quantity of live stock 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. (More on this in our newsletter)
  
• You can (and probably should) insure your Alpaca investment at an approximate cost of 3% of the value of your herd, per year. (At the time of this writing).
  
• Generating a 6 figure income each year is realistic if you're willing to grow your herd to 35 to 40 Alpacas. Some farms do a lot more than this, and 7 figures is not impossible.

  Here's to your alpaca adventure!,

  Glenn :-)

  Glenn Livingston, CEO
  Psy Tech Inc.
  22 Grandview Road
  Windham, NH 03087
  

  Content is for informational purposes only

  © 2005 Glenn Livingston, CEO All rights reserved.

  Reprinted with permission of the author at Breederville.info