Alpacas are expensive, and that’s caused by high demand. So why is demand so high? And why should I be interested?
Alpaca ownership is primarily either for business or pleasure. Fortunately the business of alpacas doesn’t stop it being highly pleasurable – in fact far and away the most pleasant business I’ve ever been involved in!

Solely for pleasure
If you have a bit of land and want some glamorous pets to keep it in trim then who would look further than the beautiful alpaca? Wethers (castrated males) can be bought for a few hundred pounds each and will grace your estate for many years to come, even bringing in enough income from fleece sales to cover their keep.

Alpacas are easy to handle and, if you hand feed them, will become relaxed enough in your presence to walk on a halter, come when you call, and eat out of your hand.

Beware though – they are very beguiling creatures! Many people start by buying a few alpacas as pets but become hooked by their charm and soon find they have a small herd and a fully-fledged breeding business.

Alpacas for profit
The opportunities for profiting from alpacas are…
· Sales of breeding stock and wethers
· Stud services
· Fibre (fleece) sales
· Specialist associated services

Sales of breeding stock and wethers
Breeding stock
There is high demand for good quality alpacas which is reflected in their prices. Prices reflect the alpaca’s quality, pedigree, age, and–for pregnant females–the quality of the male to whom she is mated. Typically females range in price between £2000 for the pretty ordinary to £12000 for the extremely good, higher prices are occasionally recorded for truly exceptional females. Males can attract much higher prices if truly excellent and a leader in the current market, these prices are supported by high stud service fees paid by quality breeders seeking to improve their best bloodlines.

As you can see there is good money to be made by breeders, particularly those who invest to achieve high quality bloodlines.

Wethers (geldings)
There is a good market for ‘pet-quality’ alpacas both for those looking for long-term pets and potential breeders wishing to ‘test the water’ before committing themselves to buying breeding stock. Establishing good relationships with clients at this stage can pay excellent dividends in the years to come. Untrained wethers generally sell for around £500.

Guard alpacas
Sheep and goat breeders have reported very good results following the introduction of guardian wether alpacas which are thus highly cost-effective. This is definitely a growth area and in Britain there are few (if any) breeders who specialise in the breeding and training of ‘guardians’. An excellent opportunity exists here to add value to sales of wethers.

Stud services
Stud fees for males depend on quality (relative to that available in the market), pedigree, and recent show results. Fees range from around £500 to over £2000. Very good returns can be seen but this reflects both the difficulty of obtaining such good genes in the first place, and the relatively short time the male will be at the top of the market. For these reasons this is probably not the domain of a new entrant breeder and should be left until considerable experience is gained.

Fibre (fleece) sales
Sales of this luxurious and versatile fibre will eventually be the main revenue of the industry though at the moment fleece returns are low relative to animal sales. The price paid for raw fleece depends on its quality, consistency, quantity, condition, and to whom it is sold. In Britain there has been a large increase in buyers in recent years with the demise of the national fibre co-operative and the establishment of multiple ‘mini mills’ who buy (or charge if the breeder wishes to keep the fleece) and process fibre before selling-on to fabric buyers.

Many breeders take this option as it is simple and involves little work, but equally they get much less for their fleece than they could. A typical fleece may sell (unprocessed) at about £6-7 per kilo, but a fleece producer who ‘sees the whole process through’ and ends up selling the finished product can see revenue of around £250 per fleece and this should rise as the quality of the fleece increases with genetic improvement.

Further opportunities exist to sell fleece to local hand spinners (many of whom are very excited about what can be done with alpaca wool) who will almost certainly pay more for fibre than the mills.

For more on Fibre see here.

Specialist services and products
There are a many associated products and services supporting the industry which provide revenue opportunities. Training centres running courses in alpaca disciplines, combined country accommodation and alpaca experience holidays, sales of alpaca equipment (shears, halters, ropes, birthing kits, colostrum), shops selling products made from alpaca fibre, internet services, management software, insurance, etc. This is a young industry with a high propensity to consume products and services which help to grow their businesses and whilst many such opportunities require experience beyond a new entrant some may fit well with your existing skills.

But surely there are enough alpacas in South America, how can we add value in Britain?
There are about three million alpacas in South America-the largest population of any continent-and since they have been bred there for several hundred years you might expect them to have an advantage over new entrants like ourselves. The facts tell a rather different story. With the exception of a handful of well known names like Accoyo and Allianza, who have made positive efforts to breed selectively and have some of the best alpacas in the world, the majority of breeders have neither the incentive to improve their stock nor the land with which to expand. Fibre processors buy fleece ungraded at a fixed price per kilo: the grading is carried out at the plant when it’s no longer possible to determine the source. The nature of the altiplano means there is relatively little area which is suitable for grazing: this means that for most alpaca farmers there is simply no possibility of expansion. The reality is that the majority of alpacas in South America are of a quality that would not even make the market in the rest of the alpaca-breeding world.

In Britain, however, we have none of these limitations: the pasture is rich and increasingly plentiful, we have the capital to invest in the essential process of genetic improvement and can draw on the knowledge of existing markets in Australia and New Zealand whose expertise in sheep breeding and fibre production is second to none globally. Both Australia and New Zealand have thriving alpaca industries, but even New Zealand can’t match Britain for quality of land.

Advantages of alpacas
As we’ve agreed, alpacas are expensive to buy, but fortunately the aren’t expensive to keep. They are healthy and hardy so vet input is low, their regular management is easily learned, and they are highly efficient processors of nutrition making them cheap to run even on small or otherwise uneconomic areas of land.
The regulatory overhead is almost non-existent. There are no DEFRA passports or licences required and no movement restrictions.

The breeding business is a delightful mixture of practical handling, and the more cerebral activity of choosing good bloodlines to improve your stock. No slaughter is involved, and the animals are intelligent and beautiful. Sales of alpacas continue to provide good revenue via high prices and the opportunities for fibre sales is an exciting and unexploited area generating increasing income.

Whether you’re looking to diversify from an existing farming business, (alpaca farming is acknowledged as being an appropriate diversification opportunity for existing farmers in DEFRA's "English Rural Development Plan")have recently moved to some land in the country, or looking at setting up a business in retirement, there can scarcely have been a better time to enter the industry. The initial ‘growing pains’ of setting up an national alpaca infrastructure with breed societies and a support and welfare system, and establishing rigourous standards and policies is behind us, the product is proven and there are prosperous breeders wherever you look. And yet the national herd is still very small-a fraction of what’s needed to support a thriving fibre producing industry. What’s needed now is more-many more-enthusiastic breeders to work hard to increase the size and quality of the national herd.

Interested? If you haven't already, read through the sections About Alpacas and Beginners Advice then get in touch and come and see some of these wonderful creatures for yourself and we’ll show you why we enjoy this business so much.