Alpacas Are Green!!

Thoughts from Cindy Harris of Alpacas at Windy Hill as shared in Aug. 2009  green alpaca

When I think of green and alpacas, it usually conjures up either some idyllic image of rolling pastures and lazy days under the shade tree, OR the less lovely thought of partially digested hay and rumen dripping down the side of my face for some unintentional offense I committed while in the vet barn.

HOWEVER……… this time I was pondering the many ways in which alpacas are ideally suited to living an Earth Friendly life. Honestly– it’s nothing to spit at!

Did you know, for instance, that alpacas don’t have to be slaughtered to have value in this country? Who ever heard of livestock that didn’t have to be slaughtered? But actually, especially during this time of growing our national herd, the longer an alpaca is around, the better! That’s an alpaca fleece every year, as well as a cria from every female that lives another year. We’d be cutting our noses off to spite our faces if we slaughtered them right now—we just don’t have enough alpacas!

Alpacas only have a small impact on Mother Earth. They are quiet, and consume far less food and water, pound for pound, than other common livestock breeds. They are modified ruminants, having 3 stomachs, and are very efficient users of their food! Their pellet-like manure makes perfect ph-balanced natural fertilizer. Even at Windy Hill, with 400 alpacas, people are amazed that they can’t smell anything but hay.

Alpacas are also kind to the ground they walk on. Being camelids, their feet consist of two soft oval pads and toenails rather than a hard hoof, so even in wet conditions pastures are not trampled and bogged. Alpacas have no upper incisor teeth, although they do have efficient grinders in the back. Because they cut grass and hay with their bottom incisors against a hard palate, they make sure that pastures will last longer and grow better.

Clothes made from the prime alpaca fleece are mostly hypoallergenic because there’s no lanolin and the yarn is very smooth and soft. We can use ALL the grades of alpaca fleece. Even the coarser grades of fleece, usually from the legs, belly, and neck, are great for coats, socks, blankets, rugs, and upholstery. Scraps from the shearing room floor can be used to insulate outdoor pipes and make composting!

Alpacas are THE environmentally friendly livestock! Alpaca fleece surpasses all the synthetics, and sheep’s wool, too. It’s:

Sustainable—there is an ever-growing American herd on the horizon

Natural—not synthetic and absolutely biodegradable

Renewable—every year there is a fresh and growing supply of alpaca fleece

Durable—archeologists have found intact remains of Incan alpaca textiles

Organic—there is no need for the use of chemicals in raising alpacas or processing their fleece

Recyclable—many an alpaca baby blanket has been handed down through generations of children, its final destination the compost heap to help grow new pasture for the next generation of alpacas!

Alpacas are really the Livestock of the 21st Century!

If you have a thought about this blog… please share. Cindy and I will be happy to receive your comments.

Giving Alpacas A Shower

When you give them a shower aim from the chest down

When you give them a shower aim from the chest down

Alpacas love water – especially on a hot day. My females will stand in line to get their bellies hosed down. Then they wander off and find a cool place to roll, or lie in the mud, or bucket dance in their water pails.

 This regular ritual allows me to give each one a close inspection. I check for the changes in the udder, birth canal opening, body score and personalities. I also look at their toenails and any possible wounds or lesions. Because I control the flow of water, they let me get real close to them with no fear. If need be, I can catch one easily.

If you are going to give them a shower, keep the stream of water aimed at their feet and lower belly. This will prevent water from collecting in the fleece on their back and possibly generating a highly humid condition that could harm them.

Make sure that they always have shade throughout the day. This is especially important for the fully fleeced females in late term when the weather starts to turn warm. Even if you have just shorn your herd – they need access to shade in order to control their body temperature. And in humid parts of the country fans are a must to cool and circulate the air. (Alpaca Farm Girl from Fairhope Alpacas in Alabama shares some of her tips about keeping her alpacas cool over the summer – check out http://bit.ly/YVexP.)

Oh, remember the males! They love to have their bellies hosed too.

One of my “BIG BOYS” will rear up on his back legs – exposing his belly. When he brings his front feet down he does a “quick-step” and loves to splash me with mud as he rears up again. This dance continues as long as I aim the hose at his legs. I keep my distance with him because he also lunges quickly on those back legs towards the source of the water. (Allow time for changing clothes after this shower ritual … if you have a dancer like mine!)

Until next time.

Alpacas Are Quite Intelligent

As a species alpacas are more like cats than dogs and quite Intelligent.Anzanita 3 hours old

 

When people meet alpacas for the first time – they observe gentle, curious animals with big doe-like eyes looking back at them. An initial question usually turns to their type of personality. My usual answer is that alpacas are more like cats than dogs.

 

Let me explain ten reasons why:

 

  1. An alpaca will stand just outside your reach – until they get to know you.
  2. An alpaca is curious about anything in the immediate surrounding – and will sniff it cautiously.
  3. Alpacas learn their names and will come when you call them – or may not.
  4. Alpacas like treats and can get comfortable eating out of your hand – their tricks are a bit limited.
  5. Alpacas will run away if they get spooked – only to stop and turn around to see what it was that spooked them.
  6. Alpacas are very intelligent and choose to return to the poop pile – usually in the same place – much like a cat uses a litter box. (My dogs have never made a pile and choose to use the whole back yard.)
  7. Alpacas do not play fetch – like a dog. Instead they nibble with their split upper lip on the edges of “things”…
  8. An alpaca female is very protective of her cria the first few days – then lets it explore the surroundings openly – probably glad for the break.
  9. Alpacas take “cat naps” through out the day and night.
  10. Alpacas hum to communicate much like a cat “meows”. It can be very quiet and comforting or…very persistent and annoying.

What are your experiences of “alpaca personality?” I invite you to give me your comments.

Stability of Alpaca Market Values

julie with Coconut CrunchOne of my coaching clients asked a question that I’m sure is on the minds of many other alpaca enthusiasts … and that is all about the stability of alpaca market values.

So here is my personal opinion:

You see, because the most important source of revenue in the alpaca industry is the actual sale of livestock (particularly breeding females), and also because the 2nd most important revenue source (stud fees) are dependent upon the market price of alpaca livestock … the primary risk you take when you enter the alpaca industry is ‘market risk’. 

(Of course there ARE other risks besides market risk, … but the availability of very affordable alpaca livestock insurance eliminates many of these concerns.)

If you’re willing to embrace the alpaca lifestyle and work at it for five to ten years, most people should be able to grow their herds to a size which would be worth five hundred thousand dollars (and often more).  That’s because at today’s market prices, 35 – 40 registered alpacas are worth that much. 

So, as far as I can tell, the only truly significant risk we take when we decide to get into alpacas, is whether 35 to 40 alpacas will still be worth a half million dollars when we’re ready to get out. 

The good news is that the average alpaca costs between 10,000 – $20,000 now – the same price it cost during the introduction of the species in the U.S. 25 years ago. Although this market value is subject to fluctuation like any other market, the value has stayed nearly the same because demand has been keeping pace nicely with supply.  (The US herd is still pretty small.)

One of the reasons the Alpaca herd stays small is because the registry of imports is formally closed (here in the USA, we’re not allowed to bring in any more from outside the country) and because females can only have one “cria” (the term for an alpaca baby) each year (the gestation period is 11.5 months!) 

Breeders in the business for a decade or more will usually say they’ve seen the low-end prices for alpacas drop and the prices for the top animals increase. This is also an indication of the stability of the value in the market overall. (And a good reason to embrace the lifestyle fully if you’re going to do this, so that you really can learn how to develop high end animals.)

One of the first females we bought had a 4 month old female cria at side. I named her Coconut Crunch, CC for short. (See her 11 month picture above.) That was in August of 2004. Well, just this week, June 7, 2009, CC delivered her third baby girl! In addition to that, her first cria, Sedona, is pregnant and due in the fall. From that initial purchase of CC and her dam, our herd has grown by 6 (all females) with several more years of production ahead. We’re not ready to sell CC or her offspring yet … even though we’ve had offers from people to buy her.

These are some of my thoughts … what are yours?

Are Alpacas a Craze or Fad???

Feeding TimeWe had a visitor to our ranch the other day who had experienced a terrible financial loss in his family when they tried raising Emus & Ostriches in the 1980’s. So he was very curious about what made the alpaca investment different … since he had heard some of the same promises applied to that craze in the 1980s.

But I really don’t think they’re much alike at all, and here’s why:

First, with Emus, the profit center was supposed to be the meat market (which never really materialized in the U.S.)

With Alpacas, there is NO meat industry, and no one is relying upon it to produce revenue in their business model. 

That’s a good thing for two reasons.

First and foremost … if you have to slaughter an animal to derive value from it, you have an inherent limitation in your
model.

Second, you’re going to get kind of emotionally attached to these animals … (they’re very sweet) … so it would be heartbreaking to sell them for slaughter.

Emus also produced valuable oil, but not really enough to make a real profit.

But the biggest difference between the alpaca and emu industry is that one female emu could have DOZENS of offspring every year, which grew the USA herd size too quickly to allow for stable market values.  There was no way that demand could keep up with supply.

(The rapid reproductive rate of emus also made it difficult for farmers to keep up with expenses and needed equipment – and people were confused about how large an omelet you’d get from one Emu egg.)

Alpacas have only one baby a year, so herds grow slowly unless you buy more alpacas. (That’s also why it takes a few years to start earning significant income, and that this is an industry suitable for those willing to put in five to ten years.)

Another reason that alpacas appear to be a much hardier investment than emus is that the fleece usually earns enough money to feed the herd, and is expected to become more marketable over time.  So there is inherent stability for the alpaca farmer.

Last, because the value of an alpaca is directly related to the quality of it’s bloodline, alpaca farms often have a need to purchase animals from each other, or at minimum to buy breeding services. This creates the need/possibility to improve the genetics of the offspring and generate another revenue stream..

Long story short, although there is, of course, market risk in any investment, most of the experts I speak to, feel the alpaca market would remain stable for the foreseeable future, as it has for the past 20+ years.  (This is not a certainty though … only a probability.)

I worked with a professional researcher who tested this theory. He asked an MBA in finance who also happened to be a successful alpaca rancher what he personally would do if he inherited a hundred thousand dollars tomorrow.  He was anticipating that he would hear that he would be putting half in some type of safe and reliable instrument like treasury notes, some in stocks, and perhaps 25 – 30% into his alpaca business.

But this rancher pleasantly surprised the researcher by emphatically stating (without hesitation, I might add) that the 100% would go into alpacas. That validated exactly how I feel about my investment.

Please give me your thoughts on this subject by completing the comments section below.

Alpacas ROI – The Bottom Line

alpaca_headToday I’d like to give you a quick summary of my take on the “Bottom Line” when it comes to investing in alpacas (ROI).

1. It’s not like winning the lottery. However, more like growing your investment exponentially and in the long term profit appears very likely, if you’re willing and able to fully embrace the lifestyle for 5 to 10 years. 

 2. Although there are five main “revenue streams” in the Alpaca industry (livestock sale, stud fees, boarding fees fiber sales, and product sales) … by far the majority of the income will come from sale of livestock. 

3. Because the income comes largely from livestock sale, you’ll need to reach a critical mass in your herd (about 20 -30 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)

4. 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, however, the government usually provides incentives to make it easier to get started, as long as you treat your Alpacas as a BUSINESS. (See the Post: Let Uncle Sam Buy Your Alpacas For You)

5. 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 … however, this might also overwhelm the inexperienced Alpaca investor.

6. 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 a future post.)

7. 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.)

8. 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. (Even in a down economy.)

9. Losing your initial investment is probably less common in the alpaca industry because proven females should multiply their values by producing 7 or more offspring over the course of their lifetime.

10. If you’re only in it for the money … you might be better off doing something else.  But if you love and passionately embrace the lifestyle, the money should follow.

This is just a quick summary on the “Bottom Line” return on alpaca investing. What are your thoughts? Please comment below.

Unique Alpaca Personalities

In a herd, certain alpacas will take the dominant lead while others may remain submissive. This seems to be the case with the females and the males. On the other hand, my experience is that when I get an alpaca alone… each one may exhibit entirely different personalities.

deadball

 

Many alpaca owners are drawn to the variety of behaviors that their alpacas display. A newbie may be surprised to learn that individual alpacas can be trained like horses, or dogs, or other pets if you take the time with them. 

 

For example:

  1. You can teach them to stand still while you put on a halter and lead. And teach them to lift their foot for toenail trimming.
  2. They will walk along side you on a lead once you teach them the basic skill. This is necessary if you wish to show them before a judge.
  3. With just a few lessons, you can teach them to jump into a van, horse trailer or modified auto.
  4. They can learn their name and come when you call them …especially when rewarded with a treat.
  5. At pellet feeding time… all I have to say is “TREATS” and point to the various catch pens. The ones that are fed in the assorted enclosures, stop, look at me, look at where I’m pointing and then run into the catch pens usually before I repeat “TREATS the third time.
  6. Some enjoy having their neck scratched – or side of their face. Some enjoy giving you kisses.
  7. If you get too friendly with one… he/she may become a bit of a pest and not respect your personal space or authority. (The ones that we bottle fed for a few weeks or more became so friendly that they would bite at my hat, untie my shoe laces, remove my gloves from my pocket and sometimes lunge at me if I didn’t get the food bowls down fast enough.) This is a behavior that needs to be addressed. It may be necessary to discipline the alpaca to prevent the unwanted behavior from persisting.

To get your respect back – try disciplining with a light tap on the nose with something soft like a Frisbee. If you do this at the first sign of unwanted behavior, usually it only takes 2 – 3 times before they get the picture and stop.

 

These are just a few of my experiences with their intelligence. What are your experiences of “unique alpaca personality?” I invite you to give me your comments.

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Let Uncle Sam Buy Your First Alpacas

Hello, my name is Coconut Crunch

Hello, my name is Coconut Crunch

If you are making (or are thinking about making) an alpaca purchase – consider this… 2009 is the best year to let Uncle Sam do it for you.

 

Let me explain…

 

The Stimulus Act temporarily extends the higher Section 179 expense amounts available in 2008 for an additional year. Under this provision, business owners can elect to immediately expense up to $250,000 of qualified equipment (alpacas qualify as equipment) purchased during the 2009 tax year, rather than depreciate it over time. This benefit will continue to phase-out on a dollar-for-dollar basis once qualified equipment purchases exceed $800,000.

 

The Stimulus Act also extends availability of the 50% bonus depreciation provision for capital expenditures incurred in 2009. This provision allows business owners to take 50% bonus depreciation in the year that the property is placed in service. In addition, the Stimulus Act extends the placed-in-service deadline for the $8,000 increase in first-year depreciation provision on qualified vehicles placed in service by December 31, 2009.

 

The current difficult economic situation has likely caused many businesses to incur a net operating loss (NOL) in 2008. Before the Stimulus Act, NOLs could generally be carried back only two years and, if there was a tax liability in those two years, taxes paid could be refunded to the taxpayer. For 2008 NOLs, the Stimulus Act extends the two-year carry-back to three, four, or five years increasing the likelihood, availability, and amount of the refund to enhance the business cash flow.

 

[The above information is for educational purposes only. This excerpt is from the April 2009 Tax & Business Alert bulletin from the CPA firm of Gish Seiden, LLP in Woodland Hills, CA – 818.854.6100]

 

Check with your local accountant to see in what ways the Stimulus Act might impact you or your plans to start your alpaca business this year.

 

Just thought you’d like to know!