Agisting (board) Alpacas
There are several ways to invest in alpacas.  One of course is to raise alpacas on your own farm, but there are a couple of other options where you can board (called "agisting") your alpacas.  Typically the agisting farm provides daily care and maintenance, health management, breeding, birthing and marketing your alpacas.  The advantages of agisting are several.  One does not have the expense of building a barn and fencing etc. or have to provide daily care.  One disadvantage is your alpacas are not in your back yard. 

One can invest "passively" as you would any other financial investment, that is purchase alpacas that are bred, raised and marketed by the farm where they are boarded.  With this method you do not participate in the day to day care of the animals.  All or most of the decisions concerning herd management are left to the agisting farm.   For Tax purposes the IRS considers the investor as "passive" and any tax deductions can only offset profits made in your alpaca business.

Then you have the "active" investment where you board your alpacas but play an active roll directly in all decision making processes.  That is, you are actively involved in important decisions such as breeding, showing, sales and marketing.  You must document your involvement via phone logs, e-mail, travel mileage etc.  In this case the IRS considers you an active breeder and you are entitled to all of the tax deductions for expenses and depreciation with one great advantage.  The deductions can offset earned income from any other source such as salaries and commissions.

We have several customers who agist their alpacas on our farm, both active and passive.  We provide all of the daily care and maintenance, breeding, birthing, marketing and brokering where desired.  Foxrun Farms has a good track record of success in agisting alpacas since 1998.

One thing you should be aware of tax wise is alpaca breeding stock purchased before the end of the year can qualify for the 179 deduction which is up to $105,000 for tax year 2006.   This deduction can offset earned income from other sources and significantly reduce your federal (and in many cases state) tax liability. Always consult with your tax professional for tax advice..

How many alpacas should I start with?   When should I buy my first.  Should I start looking now or buying now and allow them to stay at a farm until I can be hands on in 5 years? 

The answer to the last part is probably yes.  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.  Starting with just two females (one pregnant and one maiden) you can expect your herd to grow to about 13 alpacas (8 female and 5 males) at the end of five years assuming 50/50 male female births and no offspring sold or die during the period. Over a 10 year period with the added assumption of 80% live births your herd would grow to about 52.  In my experience a >90% live birth rate is typical so this is a conservative number.  Below is a one year cost comparison of raising alpacas on your property vs. agisting.  Costs are rough estimates for comparison purposes only. Actual costs may be higher or lower.

As you can see the initial cash outlay is lower for agisting.  One could use the money saved building barns and fences to purchase additional females and grow your herd faster,  When you are ready to bring your alpacas to your property, you will have a well established breeding herd. 

How does a person get involved in selling their wool?  Is there really a market for this? 
There are several outlets for alpaca fiber and end products.

1. Alpaca Fiber Cooperative of North America (AFCNA) is our national co-op where one can send fiber for processing and receive credit or wholesale finished goods.
2. The New England Fiber Pool is a for profit company where one can send fiber for processing/exchange for finished goods
3. Cottage industry folks, hand spinners,  weavers knitters etc.  Check your area for the local spinning guild.
4. Mini Mills.  There are several small mills that process a single fleece for roving or finished yarn.
5. Local knitters often available in most areas willing to knit sweaters etc.  (for a fee of course, some will trade their services for fiber) .
6. Farm store where one can sell alpaca products to the public. 
7. Craft shows, County Fairs, and fleece shows and other public events are all good outlets.

 How much could one expect to earn yearly say if someone starts off with 3-4 alpacas? (The initial investment seems very high-- Do most alpaca farmers get a good return).

This is a difficult question to answer primarily because there are too many variables that can directly affect profitability. As in any business your level of effort, where-with-all and ability are all important.  Generally, female offspring raised to breeding age and sold pregnant often sell for as much or more than you paid for the dam.  Our main profit centers:  we sell both breeding fiber quality alpacas;  provide full service board and herd management; sell stud services to other alpaca breeders; provide brokerage services for our customers; sell raw fleece, yarn and finisher goods in our farm store.  We started with 6 pregnant females in 1996 part time and in November 1999 we made the decision to raise and breed alpacas full time.

Debbie and I welcome your questions either by phone or e-mail.  The very best way to learn about alpacas and the alpaca business is to visit the farm. Schedule a Farm Visit    Foxrun Farms Sales List

Dick and Debbie McCoy Foxrun Farms Alpacas 10877 Slayton Road Cato, N.Y.    13033

Phone: (315)  626-2672 Toll Free (866) 731-1249 Cell (315) 730-4252 FAX: (315) 626-6437 Email: info@alpacafarms.com