Our finest alpaca fashions and accessories are sold at our EveryWear alpaca store. You will find clothing, toys, scarves, belts, hats and many other items made from alpaca. Our specialty yarn from our very own alpaca in natural or dyed colors will make yarn enthusiasts melt. Shopping can take place by appointment or during tours and during the holiday season to accommodate all of your gift-giving needs.  Consider buying the special people in your life a unique and timeless gift of products made from alpaca fleece. They will love them!  We have items for babies, kids, men and women – plus items for the home.

We look forward to your visit and hope to see you in some alpaca merchandise!

There is more than meets the eye when determining which alpaca is the best purchase for you.

An alpaca purchase at the right price can be easy or complicated. A diligent buyer often asks the question: “What am I buying?” Any owner will agree that he or she considers several factors when purchasing alpaca. From conformation to show records and bloodlines to temperament, the number of aspects a potential alpaca owner evaluates can be endless. Everything you read and hear tells you to plan your business – it is one of the most important components to the process. Whether you plan your plan before or after purchase and tweak it along the way, there are methods, value added benefits and considerations when you purchase that I want to explore.

Make the Buying Decision on Your Own or With Help

First you need to determine if you have the knowledge to buy on your own or if you need help. Both options work for different people or situations and both have benefits worth considering.  One important consideration is whether you need the advantage of experience and learning of others and how you will attain that. One of the most worthwhile occasions is hands on learning. If you purchase on your own or with help, you want to evaluate how you will get that opportunity. Information about alpaca ownership in your area of the county and considering your business plan is also a plus. Finding someone who can serve as a mentor is invaluable, but in the event that you have not found a mentor, a broker (agent), who is paid a commission to buy and sell alpacas, will offer advice and recommend alpacas that meet your budget.

Know How to Buy Alpaca

There are various options in how you can go about purchasing alpaca. You may buy alpaca at auction, either live, online or through a private purchase. There are advantages (and disadvantages) to purchasing in either venue. Aside from the animal itself, requirements to finalize the decision to purchase from anyone may include additional considerations such as transport, veterinary inspection, financing terms, or services that are offered.

• In auctions, alpacas are described through a catalog – either hard copy or online – and verbally. Information about the alpaca including registry number, date of birth, show winnings and a summary is available to allow your own evaluation of the animal prior to the auction. Depending on the venue (e.g., live or online), you can view the alpacas and speak with current owners in person prior to an auction. Auction purchases might not be from owners in a nearby region, so transport and the ability of the alpacas to acclimate can be a consideration.
• Private purchase is a personal way to buy alpaca.  Alpacas are sold directly from the owners and you will know more about the alpaca’s environment and how they have been raised and handled as well as their personalities. Private purchase might be from owners who can answer questions or teach if they are in close proximity.You can benefit by attending classes or participatingin hands on learning.

Choose Your Accommodations and Know the Needs

You will need a place to house your alpaca. Unless you own a farm or a large piece of land, choose a location to agist, also known as boarding, that is right for your needs. Fees can range per month and based mostly upon what you expect to be done for you.  Often that covers the expenses for feed and hay, labor, and general husbandry needs. Additional work such as halter training, preparation for showing, prenatal and postnatal care, and transport might be additional expenses. If you purchase and agist, you have the benefit of having someone care for their needs. If you do not agist a few considerations might be:

• Do you have help if you want to leave town?
• Do you have a plan for your purpose in raising (i.e., show, production) and considered needs to meet that plan including breeding or transport?
• Do you understand how to trim nails, teeth, and halter train?
• If they need veterinary care that can’t be provided on site, do you have the access to a trailer or method to transport in an urgent situation?

Decide Whether You Want to Own Alpaca Outright or Share an Interest in One With a Partnership 

Partnerships often exist for breeding males and may or may not be a choice to explore. It is less common for females because of decisions about breeding choices and ownership of offspring.

Register Your Alpaca with the Alpaca Registry

This is important  if you intend to own registered alpaca, but not a requirement. Ownership will be transferred at the time of final payment.  These papers include the alpaca’s name, pedigree,  date of birth, and owners at time of birth.

Take-Home Message

The most common question (aside from ‘do they spit’?) is ‘how much do you pay for an alpaca?’ That answer is not easy because in the industry there are many new challenges and opportunities for growth, and owners have forged forth to make their business grow in numerous ways. It also requires that a person understand the qualities of alpaca and the reasons why two alpaca that appear very similar (live or on paper) might not be equally priced. A reputable owner can explain why they might see an alpaca priced at  $10,500.00 when you can go online and find alpaca for $2,500.00 or even less. A lower price might seem attractive, but quality, available breedings, services and  mentoring come with a price and you need to determine whether there are value added benefits. After a recent auction, I heard someone talking about the great price they got for a bred female at auction from someone going out of business. They continued, saying how angry they are because they had a request of the owner and couldn’t get a return call. Although I believe that there are many people in this business who are wonderful and helpful, don’t assume that just because they own(ed) alpaca that the purchase includes their availability. That “great deal” might not be a “great deal” if you have different expectations. Learn the qualities to seek when purchasing and decide if those qualities complement your needs and your business plan. Consider services you expect to come with a price and explore options to have the expectations met.  Once you learn more about alpaca as livestock and a business, it makes more sense why the price is right for an alpaca worth owning!

Starting any business requires that you understand why. Why start a business? Why start THIS business? The alpaca business isn’t any different than others. Our decision to purchase alpaca was the result of many discussions (ie, brainstorming, talks, random thoughts) about ‘what if and why.’ We investigated as much as we thought possible by visiting many other alpaca owners, attending seminars and doing considerable reading. As a girl who grew up on an Iowa farm with both animals and crops, I wish I could say I was so smart that I found all of the answers. I didn’t. After all, I was that farm girl who didn’t understand the lifestyle and livestock we would come to appreciate.

Since Frank and I had more questions than answers, we decided we needed to learn what care (ie, handling, breeding, birthing, shearing) might entail.  In retrospect when we reflect on the goals addressed in our 2014 business plan we can say we remain committed to the direction we planned. The path that got us here has taken routes we didn’t expect, but those invaluable learning opportunities have helped us become resources and make better decisions. During the initial discussions about starting this business, we identified (and you will always hear me quoting ourselves!) that alpaca are an “investment that keeps on giving.” Our focus was to invest in alpaca for the purpose of a continual income and in particular from their fleece production which is our annual crop, as well as the cria production we anticipate after a long 350 days! Although our main topic of the discussion wasn’t tax implications, as the business plan evolved, it was an important consideration we wanted to understand.

One of our first meetings (actually our first meeting!) was with our accountant so that we could explain our plan as we knew it. Little did we know how little we knew.  He had advice for our decision because he was astute enough to know that this was not about ‘love at first sight’ (even though alpaca have the ability to steal your heart). First and foremost, he focused on recordkeeping. Sitting in that room, none of us had any idea how intricate our business would become, but he reiterated a basic need so that we could ensure our records reflected the decisions we would encounter. Any business requires detailed recordkeeping, and the livestock business is no different. Our advice to each prospective customer: Select a tax advisor who can accurately and effectively provide accounting for your alpaca business.

Aside from the lifestyle advantages (hard work and all !), there are tax benefits provided for both farms and small business. Section 179 (section179.org) is a resource for understanding the tax requirements.

• Deduction Limit – $25,000
• Limit on Capital Purchases – $200,000

An alpaca can typically be depreciated over a seven-year span.  Capital gains can be available on the sale of breeding animals and their offspring and current expenses are deductible.

The first step in qualifying for favorable tax treatment as a farmer is establishing that you are in business to make a profit. You cannot raise alpacas as a hobby farmer and receive the same tax preferences as a for-profit farmer. A farming operation is presumed to be for-profit if it has reported a profit in two of the last seven tax years, including the current year.

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

1. operate your farm in a business-like manner;
2. spend time and effort doing farming activities to indicate intention to make it profitable;
3. depend on income from farming for your livelihood;
4. experience losses due to circumstances beyond your control or are normal in the start-up phase of farming;
5. change methods of operation in an attempt to improve profitability; document the changes;
6. make a profit from farming in some years and how much profit you make;
7. demonstrate knowledge needed to carry on the farming activity as a successful business;
8. made a profit in similar activities in the past;
9. are not carrying on the farming for personal pleasure or recreation.

Qualifying does not require that each of these factors applies. Your approach to making the business profitable is the basis to determine if you are raising alpaca with intent to make a profit.

Once you’ve established that you are raising alpacas with that intent, you can deduct all qualifying expenses from your gross income as a cash basis taxpayer who keeps accurate records. Accrual basis tax payers would also be allowed the same tax treatment, but their timing might be different.

The following items must be included in your gross income calculations:

1. Income from the sale of livestock
2. Income from sale of the fiber crop
3. Rent
4. Agriculture program payments
5. Income from cooperatives
6. Cancellation of debts
7. Income from other sources, such as services
8. Breeding fees

Once gross income is established, the following expenses that apply to the business may be deducted from this income:

1. Vehicle expense
2. Fees for the preparation of your income tax return farm schedule
3. Livestock feed, hay, minerals
4. Labor hired to run and maintain your farm
5. Repairs and maintenance
6. Interest
7. Breeding fees
8. Fertilizer, chemicals
9. Taxes and insurance
10. Rent and lease costs
11. Depreciation on animals used for breeding, real property improvements, barns and equipment
12. Farm-related travel expenses
13. Educational expenses, which improve your farming expertise
14. Advertising
15. Attorney fees
16. Farm fuel and oil
17. Farm publications
18. Dues and registry fees
19. Vet care
20. Small tools having a useful life of less than one year

It is important to differentiate personal and business expenses. Only the ‘livestock’ (i.e., alpaca, farm) use portion can be expensed. Examples that can overlap might include expenses as utilities, property taxes or accounting.

A tax specialist will also consider at- risk rules, alpaca write-off, financing, capital improvements, capital gains vs. ordinary income, charitable deductions and exchanges and installment sales making them a valuable asset in the framework of the business.

We hear owners say they started the alpaca business for the tax ‘benefits’ There is no doubt that it is important to understand the rules and practices for the purposes of accurate accounting but this isn’t a business that can or should be built on taxes as a benefit. The laws that are in place to help small or start up business are important in considering your plans, but the growth and welfare of your business as a result of tax benefits should not be a deciding factor in  starting an alpaca business.

Frank and I rely on our accountant. He knows our business without getting into our business decisions, but certainly is there when we need advice and direction. As with any business startup – you need to put a plan in place. Make a plan. Follow the plan and change the plan as you grow!