 Starting
your alpaca farm...
Recommended Reading
The following books will help you learn to identify
the quality of alpacas that you are considering for purchase,
determine equipment and requirements for basic care and neonatal
care. Also, if you join the Alpaca Owners and Breeders Association,
they have a reading library as well.
-
Secrets of the Andean Alpaca, The Field Guide:
Assessing Fiber Characteristics and Conformation
This is an excellent guide to selecting a high quality
alpaca for purchase based on its body characteristics
(called conformation) and fleece characteristics.
-
Caring for Llamas and Alpacas, A Health and Management
Guide by Clare Hoffman, DVM and Ingrid Asmus.
Short and full of excellent, practical basic care information.
-
Llama and Alpaca Neonatal Care by Bradford
B. Smith, DVM, PhD, and two other authors. Essential reading
to prepare for the birth of your first cria on the farm.
 Setting
Up: Equipment and Infrastructure
When getting started, be sure to account for the expense
of getting your farm ready to care for alpacas as well as
the initial animal purchases. You will want to consider the
following infrastructure and equipment:
- Perimeter fencing to keep alpacas in and possible predators
out (like dogs)
- Internal fencing to separate the females from the males,
a quarantine area, catch pens (small pens in a larger yard
where you can herd an animal into a corner to get ahold
of it), optional fencing to separate out overweight or underweight
animals
- Shelter in each of the fenced areas, or a single shelter
that is divided and leads into the various fields
- Water in each fenced area. Will you use water buckets
and run lines for heaters or install automatic, heated waterers?
- Feed buckets or hay feeders in each area
- Restraining chute. Some farms prefer to simply halter
their alpacas to clip toenails, get weights, administer
shots and perform other veterinary care, some farms like
to have the help of a restraining chute.
- Scales to get periodic weights. This can be a big help
to identify health issues like not getting enough milk or
a worm problem in the winter.
- Halters and leads, toenail clippers, worming medication,
gloves, other routine veterinary care items.
- A place to store hay and grain outside the alpaca yards.
- A way to transport your alpacas to and from the vet and
other farms. One or two alpacas can fit in the back of a
van. For larger numbers, you may want to obtain a trailer.
- When you get ready to begin selling your alpacas, there
will be marketing expenses as well including everything
from logo design, to business cards, letterhead, farm brochures,
websites, farm banners, entering shows, magazine ads, newspaper
ads and more.
Defining Your Herd Objectives
Some farms purchase a large number of alpacas for their foundation
herd and begin selling the offspring right away. Others choose
to purchase a smaller number and keep the offspring, building
up their herd for a period of years.
You might want to invest in a quality stud right away, or
with a smaller herd it could be more advantageous to use outside
breedings for a number of years while you learn more about
the type of herdsires you need in your herd.
You can purchase a proven, bred female to make sure that
you won't have any fertility issues right away, or you can
spend less on a maiden with the longer wait for offspring.
Tax Advantages
Tax advantages include:
- directly writing off many expenses
- improving your farm and obtaining equipment to manage
it while depreciating these expenses
- tax deferred wealth building
If you actively raise alpacas for profit at
your farm, all the expenses attributable to the endeavor can
be written off against your income. Expenses would include
feed, fertilizer, veterinarian care, etc. These expenses can
also help shelter current cash flow from tax.
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.
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.
A very helpful IRS publication, #225, entitled
The Farmer's Tax Guide, can be obtained from your local IRS
office. Those considering entering the alpaca industry should
engage an accountant for advice in setting up your books and
determining the proper use of these tax advantages.
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