Shorn on 4/11

This is a high quality 4 in 1 package (3 females ready to breed and a yearling female) from the Midwest . What an opportunity to get retained fineness from this line at a ridiculously low price!

http://Alpacas4Less.com/BSA024.htm

Females of this caliber and consistency do not come along for sale very often. These beautiful ladies are ready to be transported to your farm right away or in the near future.

If you are even the slightest bit interested in adding great genetics from Full Peruvians, Full Accoyos, the likes of Caligula, Vengador, Camilio, Hemingway, 4Peruvian Legacy, 5Peruvian Chaccu and Crescent Moon’s Titanium then you owe it to yourself to check it out and see what’s available.

The statistics from the histograms (fiber characteristics) are included. If you need help understanding why this is an exceptional group of females… just contact me and I’ll be happy to interpret the results for you.

http://Alpacas4Less.com/BSA024.htm

It’s on a first come first served basis and this is the perfect time to start your alpaca business, or add to your existing herd with great genetics, great dispositions, great fleece and just all-around great girls at great prices.

Alpacas Love Water

Another point to keep in mind pertains to high humidity when coupled with high temperatures. When you combine the temperature and the percentage of humidity you get a “heat index value.” A value over 120 degrees can be extremely stressful and gives grounds for taking additional safety measures.

For happy alpacas keep these ten tips in mind.

1)    Always shear your alpacas as a first line of defense in hot weather. We set up our shearing day with our shearer a year in advance and make a fun event out of the day. If you only have a few alpacas, then consider joining your herd with another established herd. Many alpaca farms set-up cooperative shearing days with other local farms.

2)    Always provide plenty of cool water to drink throughout the day. We put extra water buckets out along the fence line in the shade during the hottest months of the summer. Keep them full of fresh water and remove the algae which may grow in the buckets. If you use automatic waterers be sure to keep them free of accumulated “gunk!”

3)    Always provide a shady area for them to rest. Even though they may choose to lie in the full sun and “sunbathe” they will move into the shade to cool off part of the day. Keep some of their food source in the shade as well if you can.

4)    Provide a large industrialized fan & misters in the areas where they congregate when the temperatures rise. If you have a swamp cooler, you may notice how they cush right in front of the cool air source.

5)    Provide free choice mineral salts in small feeders around the hay source. We use Stillwater Minerals brand of the Lama-Min 104. This is specially formulated for alpacas. www.StillwaterMinerals.com

6)    Discuss with your vet or other breeders the type of electrolytes to add to their water source. We use a “Cherry” flavored powder that we add to every-other water bucket. That way they can self choose if they wish to drink it or not. Some people mix a Gatorade Powder with water to a strength of ¼ the recommended amount on the label. Be sure to mix a fresh batch every day as it spoils quickly.

7)    Do not breed your males in the heat of the day, they could become overheated and go temporarily sterile. If you choose to breed during the summer months, then breed early or later in the day.

8)    If you have new born cria, be sure to monitor the cria’s nursing behavior.  They can easily become dehydrated during the warmest part of the day. Observe how often they nurse and get underneath their mom. The rule of thumb is every hour to two is normal. Every half-hour is suspect for poor milk production and every 10 – 15 minutes means there is probably something wrong and you need to intervene to determine how serious. As the cria gets older, they will start to eat hay and may be nursing less often. Just observe the routine and check out anything that appears unusual.

9)    Provide extra hosing of their legs & bellies with cool water. My girls come running to my hose when I announce “Shower time Girls”… shower time!” Just keep the water accumulation off their backs where it could create an increased humid condition and raise their heat stress level.

10)    If you must transport or keep the alpacas in an enclosed area, be sure to provide air circulation. Some transporters run air conditioned units in the big trailers, others just have open windows.

So in conclusion, I hope these tips helped you think about the ways you can keep your alpacas comfortable during the hottest part of the summer day. Please feel free to share these tips with your fellow alpaca breeders. I also invite you to post your tips to the comment section of our:  www.ProfitingWithAlpacas.com

Here’s to you and your alpacas enjoying a wonderful summer.

I wanted to share some very exciting news with you about the alpaca industry.

Finally there is a consorted effort to recognize alpaca fiber as an economic opportunity for the public.  Alpaca United has been formed as a legal entity that is creating a brand for products made from USA raised alpacas. The CEO, Nick Hahn, who is famous for creating the brand for “Cotton” is at the helm of this “United” effort.

Here is an invitation for anyone who would like to learn more about this initiative first hand. I know that you will be hearing more about this group in the coming months. If you are a member of AOBA, you are probably receiving these emails. If you are not, then let me know that you would like to be on the list to get the latest information about the branding progress. We will make sure that you get the announcements first hand. There is an opportunity to become an investor, if you wish to get more involved. However; this email is not a solicitation… only sent for information.

Here are the particulars for your review.

ALPACA UNITED INAUGURAL MEETING

Friday May 20, 2011 7pm

Welcome to Alpaca United, the exciting new fiber company causing a “buzz” among breeders, processors and industry service providers from coast to coast!

Friday May 20, 2011 at 7:00 PM during the AOBA Nationals in Denver, CO you will have an opportunity to participate in the Inaugural Meeting where company officials will explain why, how, when and where Alpaca United is performing as the first ever industry-wide branding, marketing and research initiative dedicated to adding value to alpaca FIBER!

Chairman, Lee Liggett-NM; Visionary and Legal/Financial sub-committee Chairperson, Claudia Raessler-ME and CEO, Nick Hahn-CT will be on hand as well as several Alpaca United Steering Committee members to answer questions and conduct interviews.

Be there and be the first to be awed as we unveil the new mark, logo and tagline for Alpaca United, L3C.

Alpaca United is not about “us” or “you”, it is the national, for-profit, textile fiber company that unites “us;” all alpaca owners, growers, breeders, processors and enthusiasts, against “them,” those other fiber suppliers to the global textile industry. We know how good North American alpaca fiber is in all its colors, types and styles, isn’t it time the rest of the world knew?!

Developed by Design & Voice, a professional ad agency, Alpaca United will be readily associated with other luxury brands in the textile and garment industry. Part of our push to close the loop between alpaca fiber producers and alpaca fiber end users, our new mark will give the viewer the right impression and the right message the first time! The entire Steering Committee eagerly looks forward to sharing this excitement with you! The grand unveiling happens only at the Inaugural Meeting!

Everyone is welcome and invited to attend… it’s free. Advance registration is recommended but not required. If you wish to register… click here for the details

Registration Tips

When you register your new alpaca make sure that you follow the guidelines that ARI provides for selecting the best color match. It is best to order a Color Chart from the ARI website: www.AlpacaRegistry.com. Here’s a quote from ARI on the way to use the color chart. “When identifying the color of an alpaca’s fleece, take a clip of fiber as close to the skin as possible. Match the cut end to the closest color on the fiber chart. If the color matches a shade, record this match. If you find the color is darker than one shade but lighter than the next, it should always be categorized with the darker shade.”

If your alpaca has more than one color present on the body, head or legs, there is a place on the registration for you to note that. When checking the color for the body, use the side in the midsection portion about 4 – 6 inches below the midline.

Color Checkers at a Show

Of course, for the show, the Color Checker will use the chart next to the skin with the fleece still attached. Sometimes the color checker will come up with a different color than the one on the ARI certificate. If you question that decision, you have an opportunity to be seen by a judge before they start the show. The judge will always have the final say. Just ask the checker when that will be done and arrange to have a neutral party take your alpaca to the judge.

Just thought that you’d like to know some of the insider info…

One of the many things I love about this incredible business is the expressions of joy on the faces of people when they interact with the alpacas. We open our ranch to visitors quite often. When families bring their kids (of all ages) we like to have the camera near-by. So that the kids get to see themselves enjoying the alpacas. Don and I chose to create a photo collage video of a few of the cute moments of “love with the alpacas.”

Even though Valentine’s Day has past… we created this video for all to enjoy throughout the year. So if you are an animal lover of any sort… we dedicate this to you. If you can’t physically be with your four-legged friends, than perhaps this short video will put a smile on your face. 

Click on the video to play and be sure that you have your speakers turned up too.

Feel free to share this site with your friends. And if you are an alpaca enthusiast feel free to post your comments. We’d love to read what you think.

Sending you lots of Hugs & Humms not just for this month of “LOVE”, but all year long!

Julie & Don Roy

My friend and successful alpaca breeder, Jim Patrick of Denton Texas, wrote some very insightful information about the future of the alpaca industry recently. When he did… I took notice. Why? Because when he speaks… people listen and for very good reasons!  He has a background in Economics and Sociology and has been featured as a “futurist” in our alpaca community. Here is an excerpt he wrote on the status of the alpaca industry as of Nov 22, 2010.

“As a trend prognosticator and founder of ‘think tanks’ for over 25 years, I am here to share with you that our economy may be morphing into a new and exciting form. People worldwide are looking anew towards a simpler, less stressful life that is filled with natures’ basics. This means basic homes, with high energy heating / cooling systems and earth friendly power generation equipment. The rise of the family farm is upon us with many taking flight to ‘ranchburbia or farmville’ where the air is clean, things are smaller and simpler, and where robust gardens are the norm…times are a changing!

A land is just over the time horizon where wind turbines glow green, kids are home schooled or attend small community schools and virtual offices of man and woman caves are plentiful.  

Yes, changing times are upon us and we, the alpaca livestock industry, are excitingly part of this metamorphosis that is forming the second decade of the 21st Century and beyond. As I have said in countless interviews and speeches, being able to take advantage of the early signs of emerging trends can make a world of difference.

So why alpacas and where do they fit in the new economic and social matrix?

Alpacas are easy to maintain, fit all lifestyles, are odorless, cute, safe and friendly to all ages and they perfectly address the changing paradigm.  

ALPACAS ARE GREEN FRIENDLY… ALPACAS PRODUCE A FLEECE LIKE NO OTHER that is light weight, durable, very warm, hypoallergenic and their end products are gorgeously durable, ultra warm that dare the cold to touch your skin. It is the best of times to expand or enter into the alpaca livestock business!!!!

Alpacas give the investor a special ROI in the form of breeding new animals, producing special products from the fleece and the potential to garner new tax benefits.

Alpacas are easily handled by all ages without fear of intimidation or bodily injury. Owning cattle, equine, sheep, goats or other traditional forms of livestock carry a magnitude of more care and maintenance that greatly decreases their potential return on investment (ROI.) Alpacas can be maintained with less infrastructure and daily care….and their ’poop’ has very little smell as a bonus and makes a great soil supplement that makes things grow organically!

The alpaca livestock business is not just about the cute and kind nature of these precious animals; it includes investment potential that can provide a nice ROI. Like any other investment, alpacas can carry risks and there are no guarantees, but, alpaca prices have never been lower largely due to the current pause in the economy; however, this is not going to be the case forever. 

So what is the best size alpaca business for you to expand or build to? Well, that depends on your life style, demographic foot print and willingness to take a risk.  

While some alpaca businesses are large… most are small, family owned operations of fewer than 20 head of alpacas with a ‘hands on approach’ being the norm.   

So, now is the best time to either get into the alpaca livestock business, or to enhance the genetic qualities of your current herd leading to an improved ROI. Waiting for our economy to ‘get better’ only will increase your costs and reduce your potential ROI. The times, they are a changing and now is the time to get on board the train to the future with alpacas!”

Here’s to your successful alpaca venture, Julie

At the end of February, a very important event took place… The Snowmass Auction in Phoenix AZ. Most of us breeders use this event as a barometer about the price of alpacas for the year ahead. Based on the results of this event, the future looks bright, solid and prices are coming back up.

Two years ago, February 2008, the auction sales price for quality alpacas was the lowest in our industries history. There wasn’t even a Snowmass auction in 2009. However, 2010 is a very different story.

One of the reasons… in their own words: “Double “O” Good Alpacas is thrilled to announce that we are the proud new owners of Snowmass Matrix! We purchased Matrix at the Snowmass Making of Champions-Genetic Advancement Sale on February 27, 2010 for a record-setting price of $675,000, the highest selling alpaca at an auction!”

As I listened in to the live auction over the computer, I noticed that several farms bid quite high for this amazing stud. As the bids went over the half a million dollar mark, the energy got franetic! Gasps were heard and the auctioneer could hardly keep up with the increase of the bids. The serious bidding farms just kept the prices going up and up. Finally it was all over and it seemed unbelievable to realize that the final bid was $675,000!… however, Double “O” Good Alpacas feels that his worth is “PRICELESS!”

The future looks bright not only for prepotent MATRIX, but for our whole alpaca industry.

Next time I’ll comment on the high prices paid for some of the alpaca females sold at the auction.

Do you have an opinion on the results of the Snowmass Auction of 2010?

Julie

PHOTO:
Holding the newly acquired MATRIX, are the proud new owners, Ernie and Barbara Kellogg from VA standing next to the sellers, Julie & Don Skinner of Snowmass Alpacas.

In this photo, you can see that all are eating together peacefully... for a short time.

As I write this we are experiencing the 4^th consistent day of rain and preparing for SNOW. This fact alone may not be newsworthy; however, we live in southern California! What I’m observing with my alpaca females applies whether you live in moderate or extreme climatic regions. It applies whether you raise your alpacas on pasture or in a dry lot environment. At times you may have to change their eating conditions, make other arrangements and possibly crowd them in for a short time. Now the question is: how do you know if they are too crowded?

The simple answer… I listen! That’s right; I observe and listen from a distance to figure that out. What I’ve observed boils down to … if they’re crowded they’ll do a lot of quibbling, a lot of spitting and posturing over who’s going to get to the feeder first and stake their claim. 

I count on enough space so that every single alpaca can be at the feeders all at once, without feeling crowded.  Best advise – just keep adding feeders, creating multiple feeding stations until you achieve that. And when the rains came and they all wanted to be inside at once… that’s what we chose to do. Normally these 12 wander among 3-4 other feeding stations… and they come and go at their will.

If you find yourself questioning the crowding issue in small spaces, then just spread out the feeders so that every alpaca could eat all they want simultaneously. You might consider creating special feeding areas for the cria – if they get squeezed out from the adults. Alpacas are extremely adaptable and that is why they make a great livestock business. You can start out small and expand as your needs arise. Your alpacas will let you know if they have outgrown the feeding arrangements!

Have you wanted to start an alpaca herd or expand your present one?
Have you thought that the average prices for good quality pregnant females were just too high for you?
Have you talked about your dream to others only to have it disintegrate before it got started?

Benefits of Starter Packages:

• Multiple alpacas for a single reduced price
• A variety of bloodlines and colors to grow your herd
• A variety of age and experience levels of females
• Sometimes the seller will include a complimentary male companion, or one at a very low price
• Depending on the circumstances, the seller may take financing and boarding as part of the arrangement

Basically a breeder puts together two or more females at a discounted price if you buy them all. The combination gives you a variety to start or expand your herd. You could get an experienced dam along with a maiden, or possibly two or more different colors or bloodlines. Often due to the circumstances you are able to purchase multiple alpacas at a price equivalent to a single alpaca.

Five years ago we started our herd with 4 pregnant females. We chose to take advantage of starter packages of quality females at reduced prices from two experienced breeders. Their herd reduction became our gain. Our decision enabled us to get a head start on building our herd with experienced pregnant dams that were expecting within six months. One of the pregnant females came with a female cria at side. So our single price purchase was really a 3 in 1. I strongly believe that a start-up breeder benefits from purchasing experienced dams along with maidens. If you have never birthed a cria – the experienced dams will teach you. And that creates peace of mind like you wouldn’t believe.

Alpacas4Less.com selects good quality alpacas that are owned by breeders who find themselves in the need of downsizing for a variety of reasons. After I personally interview them about their herd history, breeding and birthing experience, the seller and I come to an agreement on the best price for the animals. We then put a group together to create a starter package and offer them to you, our preferred clients. The price to you represents a recent reduction of at least 40% off or more. Generally speaking this is less than the breeder sells them to their own clients.

If you are looking for a way to grow YOUR herd. I highly recommend looking into starter packages.

Julie

The answers to some of the most asked questions about alpaca ownership follow:

Tax Consequences of Owning Alpacas

Those considering entering the alpaca industry should engage an accountant for advice in setting up your books and determining the proper use of the concepts discussed in this article. A very helpful IRS publication, #225, entitled The Farmer’s Tax Guide, can be obtained from your local IRS office. The goal of this discussion of IRS rules is to provide the guidelines for discussion with your accountants and financial advisors so that you can be more conversant in the issues of taxation as they relate to raising alpacas.

Raising alpacas at your own ranch, in the hands-on fashion, can offer the rancher some very attractive tax advantages. If alpacas are actively raised for profit, all the expenses attributable to the endeavor can be written off against your income. Expenses would include feed, fertilizer, veterinarian care, etc., but also the depreciation of such tangible property as breeding stock, barns, and fences. These expenses can also help shelter current cash flow from tax.

The less active owner using the agisted ownership (boarding) approach may not enjoy all of the tax benefits discussed here but many of the advantages apply. For instance, the passive alpaca owner can depreciate breeding stock and expense the direct cost of maintaining the animals. The main difference between a hands-on or active rancher and a passive owner involves the passive owner’s ability to deduct losses against other income. The passive investor may only be able to deduct losses from investment against gain from the sale of animals and fleece. The active rancher can take the losses against other income.

Alpaca breeding allows for tax-deferred wealth building. An owner can purchase several alpacas and then allow the herd to grow over time without paying income tax on its increased size and value until he or she decides to sell an animal or sell the entire herd.

To qualify for the most favorable tax treatment as a rancher, you must establish that you are in business to make a profit and you are actively involved in you business. You cannot raise alpacas as a hobby rancher or passive investor and receive the same tax benefits as an active, hands-on, for-profit rancher. A ranching operation is presumed to be for-profit if it has reported a profit in three of the last five tax years, including the current year

If you fail the three years of profit test, you may still qualify as a “for-profit” enterprise if your intention is to be profitable. Some of the factors considered when assessing your intent are:

- You operate your ranch in a businesslike manner.
- The time and effort you spend on ranching indicates you intend to make it profitable.
- You depend on income from ranching for your livelihood.
- Your losses are due to circumstances beyond your control or are normal in the start-up phase of ranching.
- You change your methods of operation in an attempt to improve profitability.
- You make a profit from ranching in some years and how much profit you make.
- You or your advisors have the knowledge needed to carry on the ranching activity as a
successful business.
- You made a profit in similar activities in the past.
- You are not carrying on the ranching activity for personal pleasure or recreation.

You don’t have to qualify on each of these factors – the cumulative picture drawn by your answers will provide the determination. Once you’ve established that you are ranching alpacas with the intent to make a profit, you can deduct all qualifying expenses from your gross income.

If you are a passive investor, you are still allowed the tax benefits discussed below. The issue is whether you will be able to take the losses on a current basis. All the losses can be taken against profits or upon final disposition of the herd. The discussion from here forward presumes you are a cash basis taxpayer and you keep good records. Accrual basis taxpayers would also be allowed the same tax treatment, but their timing might be different.

First, the following items must be included in both a passive owner’s and a full time rancher’s gross income calculation:

* Income from the sale of livestock
* Income from sale of crops, i.e. fiber
* Rents
* Agriculture program payments
* Income from cooperatives
* Cancellation of debts
* Income from other sources, such as services
* Breeding fees

The following expenses may be deducted from this income. Please note, if you are agisting your animals, not all of these deductions may apply on a current basis:

* Vehicle mileage for all ranch business (IRS publishes current rate)
* Fees for the preparation of your income tax return ranch schedule
* Livestock feed
* Labor hired to run and maintain your ranch
* Ranch repairs and maintenance
* Interest
* Breeding fees
* Fertilizer
* Taxes and insurance
* Rent and lease costs
* Depreciation on animals used for breeding
* Depreciation of real property improvements such as barns and equipment
* Ranch or investment-related travel expenses
* Educational expenses, which improve your ranching or investment expertise
* Advertising
* Attorney fees
* Ranch fuel and oil
* Ranch publications
* AOBA (breed association) dues
* Miscellaneous chemicals, i.e., weed killer
* Veterinarian care
* Small tools
* Agistment fees

Please note: For hands-on ranchers, personal and business expenses must be allocated between ranch use and personal use; only the ranch use portion can be expensed for such expenses as a telephone, utilities, property taxes, accounting, etc.

Once active alpaca ranchers have determined their net income or loss, it is included on their tax return as an addition to or a deduction from their ordinary income. Losses can be carried back for three years and forward for 15 years. To deduct any loss, you must be at risk for an amount equal to or exceeding the losses claimed. The “at risk” rules mean that the deductible loss from an activity is limited to the amount you have at risk in the activity. You are generally at risk for:

- The amount of money you contribute to an activity
- The amount you borrow for use in the activity

The passive owner’s losses that are in excess of current income can be carried forward and taken against future income. In other words, the passive owner does not lose the deductibility of expenses, but the timing of the losses may be different.

All taxpayers must establish the cost basis of their assets for tax purposes. This basis is used to determine the gain or loss on sale of an asset and to figure depreciation. In determining basis, you must follow the uniform capitalization rules found in the IRS code. Animals raised for sale are generally exempt from the uniform capitalization rules, and there are other exceptions for certain ranch property. You need to become familiar with these rules.

Once you’ve established the cost basis of your various assets, you take a deduction for depreciation against your annual income. This process allows you to expense the historic cost of an asset to offset present income. The effect is to create non-taxable cash flow on a current basis. This benefit is especially attractive in an environment of higher taxes.

Alpacas in which you have cost basis can be written off over five, seven, or ten years if they are being held as breeding stock. There are several methods of writing them off, beginning with the straight-line method, which allows you to deduct one-fifth of their cost each year, except the first year, in which the code allows for only six months of write-off. There are also several accelerated schedules that allow for a larger percentage of the asset to be written off early. Alpaca babies produced by your females have no cost basis and cannot be written off, although they may qualify for capital gain treatment on sale.

Capital improvements to the active or hands-on alpaca breeder’s ranch can also be written off against income. Barns, fences, pond construction, driveways, and parking lots can be expensed over their useful life. Equipment such as tractors, pickups, trailer, and scales each have an appropriate schedule for write-off. The depreciation schedule for each asset class varies from three years to 40 years.

There is also a direct write-off (expense) method known as Section 179 that allows a substantial deduction each tax year for newly acquired items that are normally long-term depreciable assets. While this is subject to several limitations, it is widely utilized by small ranches to accelerate expense, if that is appropriate for your tax situation. Owners currently in high tax brackets who are changing their lifestyle in the next several years to a lower income level often use it.

The original cost basis of an asset is reduced by the annual amount of depreciation taken against the asset. Other costs add to basis, such as certain improvements or fees on sale. The changes to basis result in the adjusted cost basis of the asset. Upon sale, excess depreciation previously expensed must be recaptured at ordinary income rates. The recapture rules are a bit complex, as are most IRS rules, but the IRS Farmer’s Publication mentioned earlier explains them well.

When an asset is sold, for instance a female alpaca that was purchased for breeding purposes and held for several years, the gain or loss must be determined for tax purposes. If an alpaca was purchased for $20,000, depreciated for two and a half years, or say 50 percent of its value, and then resold for $20,000, there would be a gain for tax purposes of $10,000. In other words, your adjusted cost basis is deducted from your sale price to determine gain or loss.

Once you’ve determined the amount of a gain, you must classify it as either ordinary income or capital gain. The sale of breeding stock qualifies for capital gains treatment (excepting that portion of the gain which is subject to depreciation recapture rules). Any alpacas held for resale, such as newborn crias that you do not intend to use in your breeding program, would be classified as inventory and produce ordinary income on sale.

This discussion of tax issues omits a number of rules that could impact your taxes. Tax preference items, alternate minimum taxes, employment taxes, installment sales, additional depreciation, and other concepts of importance were not discussed. Whether we like it or not, this is a complicated world we live in: it often requires the assistance of professional accounting and legal assistance.

In summary, the major tax advantages of alpaca ownership include the employment of depreciation, capital gains treatment, and if you are an active hands-on owner, the benefit of off-setting your ordinary income from other sources with the expenses from your ranching business. Wealth building by deferring taxes on the increased value of your herd is also a big plus.