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Thursday, April 21, 2005 11:33 am

The next BIG thing


When Liz Nichols first heard about alpacas three years ago, she weighed the potential income against the money she was making from the corn and soybean crops she raised on a spare three acres of her seven-acre farm just west of Bloomington. But while visiting an alpaca farm, Nichols set aside numbers and, she says, “fell in love.”

“We purchased a bred female and then went back and purchased another bred female,” Nichols recalls of those early days two-and-a-half years ago at Stars and Stripes Alpacas. Now she and husband Bob own 15 alpacas, six of breeding age, with three crias — babies — due in the next three months.

The Nichols aren’t alone. Alpacas have suddenly thrust their long furry necks into Illinois life. Illinois alpaca farms have tripled to 89 from 29 in just over three years. The state now has its own chapter of the national Alpaca Owners and Breeders Association that will sponsor the first-ever downstate AlpacaFest, May 13-15 at the Oaks Convention Center in East Peoria.

Ads on the CNN and Lifetime television networks tout these smaller, gentler cousins of llamas as both a viable business and a rewarding lifestyle. Ads in country-life and fiber magazines direct potential investors and the curious to the AOBA’s 800 number; Web sites crown the creatures “the best livestock investment in the world.”

But sifting potential returns from the hype isn’t easy, even for those in the business.

“Right now it’s money-taking; we’re planning for it to be moneymaking,” confesses Nichols. She and her husband, empty-nesters who both work at jobs away from the farm, hope that their alpacas will one day pave the way to a comfortable retirement income. To that end, they’ve approached the industry more seriously than many do, developing a business plan and learning the ins and outs of veterinary care, feed regimens, birthing, worming, and, soon, the marketing and selling of offspring.

“We just love the animals,” she adds. “It’s a lot of work, so it’s the old deal where you need to love what you do and make money at it, too.”

In fact, interest in alpaca farming spiked after the Sept. 11, 2001, World Trade Center attacks, when many people reexamined their lives and decided to “move out of city life and get into the country,” according to AOBA marketing consultant Jerry Miller of Brown & Miller in Beachwood, Ohio.

On the basis of annual surveys, Miller describes alpaca owners as “a mix of people who already own farms but want to diversify; people that live just outside of major markets that have five, 10, 20 acres of land that want to do something with it; and people who just want to get out of the city.” Although many couples own alpacas, women are five times as likely to have made the decision to enter the industry, Miller says, and often husbands or both partners continue to work away from the farm.

AOBA’s mission is to support member farms and generate awareness of alpaca end-products, but it also strives to bring more breeders into the alpaca fold. The association publishes a monthly magazine and sells members a variety of pamphlets, DVDs, and how-to manuals that they can use to spread the word to potential investors. Some owners discuss the tax advantages of depreciating livestock and deducting farm expenses. But the AOBA treads carefully around claims of profitability.

“I key in on the lifestyle,” explains Miller, who develops and places the TV and print ads. “All my friends in the corporate world, no matter how much money they make, they don’t seem to be happy.

“Then I go to these alpaca shows and meet all these breeders, and they’re all happy — so there’s more to life than just business.”

Alpacas come in two varieties — the long-haired suri and the more common dense-fleeced huacaya — both imported from Peru to the United States from 1984 through the late 1990s. Most breeders register their alpacas in an official registry that is now closed to future importation as a means of protecting the quality and value of the U.S. herd, which numbers just over 60,000.

Unlike most U.S. livestock, alpacas appeal to animal lovers because they’re cute and manageable, reaching a height of about 5 feet (to the top of their heads). Less than five acres is required to graze a herd of 20, and, perhaps most important, the animals aren’t killed for their meat. Instead, these members of the camel family are prized for their hair, which grows in 22 colors and can be as soft and luxurious as cashmere. This fiber is sheared once a year, usually in late spring, yielding some five pounds of fleece per adult. Fiber quality is based on a measurement of microns — smaller is better, so knitted scarves or sweaters don’t scratch the skin. As part of its ongoing marketing efforts, the AOBA encourages the use of alpaca yarns across the fashion spectrum, from high-end designers to home knitters.

Owner Deborah Barone came to the field six years ago out of a love of knitting, her attraction to alpacas, and the lure of a rural lifestyle. Barone launched Kickapoo Creek Alpacas on six acres in Heyworth; she now teaches beginning classes at the Champaign-Urbana Spinners and Weavers Guild and is an expert at hand-spinning cleaned and carded fiber into skeins of yarn that sell for about $6 per ounce. Although no large-scale mills in the U.S. currently take alpaca fiber from fleece to sweater, some regional cooperatives and small mills process alpaca fleece into yarn for about $50 per pound.

“It’s nice to have clothes that are made from your animals,” she says.

Although Barone says that fleece sales cover the care and feeding of her nine alpacas, her farm has only recently made what she calls “significant” money, thanks to the sale of four offspring. In fact, Barone — like most alpaca owners — maintains a Web site to market and sell products and animals.

Barone began with a minimal investment of two females, but others may opt to jump-start their businesses by purchasing four or five bred females at a cost of $80,000 to $100,000 as a means of building a herd — and sales — more quickly. Even with several females, alpaca breeding is a long and expensive process. Gestation of a single baby takes 11 months, and a newborn cria nurses for nearly as long, but the mother may be rebred a month after giving birth and has a reproductive life span of about 10 years. Although males sometimes spit and fight, females only spit when they are pregnant and refusing the advances of mating males.

A newborn female costs about $10,000, and the price increases to $15,000 or more at the 18- to 24-month breeding age. The female alpaca’s price may reach $25,000 if she is already pregnant or “packaged” with an offspring. Herd sires may fetch $50,000 to $100,000, but most males aren’t of high breeding quality and sell for $1,000 to $2,000. Stud fees range from $1,000 to $5,000, depending on the sire.

“You want to breed to the best-quality male you can afford to breed to because you want to increase the quality of your herd,” advises Liz Nichols.

Tom and DeAnna Timm, the owners of Always Alpacas, a southern Illinois farm in Highland, researched the business and visited farms for a year before investing in a herd financed by another breeder. Now, Always Alpacas offers financing packages to other newcomers.

     “We had three goals: a rewarding family project, an outlet for spinning/weaving interests, and an investment for retirement,” the Timms explain on their Web site.

“We have expanded from animal sales to offering alpaca fiber, yarns, and finished products at the farm store. The depreciation of our purchased herd has given us a significant tax break, and our children love to go to the farm to work and play with the alpacas. To learn how you and your family can be a part of the growing alpaca world, call us for a farm visit.”

Although small-farm operations such as the Timms’ hold a romantic appeal, real life isn’t like television’s The Waltons or Little House on the Prairie, observes Paul Mariman, unit educator for farm-business management and marketing at the University of Illinois Extension, Macon County. Small farms offer a lifestyle rooted in the 1950s — they’re not necessarily unprofitable, but they do require dedication and many hours of caring for livestock or planting, weeding, and picking vegetables without the benefit of modernized farming equipment.

“You can make a reasonable living, depending how you define a reasonable living,” Mariman says. “Unless you’re really fortunate, no matter what idea you come up with, someone else is already fulfilling that need. What alpacas are really doing is competing with the lamb or wool market and ‘Can I create a sweater or yarn that’s worth more than lamb or sheep and can I make this business profitable?’ You have to ask some pretty tough questions. You really want to take the rose-colored glasses off and step on them.”

For example, the 2002 agricultural census shows 646 farms in Macon County but only 127 comprising 1,000 acres or more, recognized as “viable — where you can just farm and make a living,” Mariman says. Just 141 of Sangamon County’s 970 farms fall into the “viable” category; the owners of more than 70 percent rely on outside jobs or businesses for income.

“Quickly you see we’ve got a very small percentage of farms that farming is their only livelihood,” he adds. “If I was looking for a production entity to make money and supplement my retirement, alpacas wouldn’t be the one. If you’re capable of doing manual labor, vegetable crops might be a higher revenue generator over the long term.”

But many are not deterred, and Mariman says he gets calls every day from people seeking farmsteads as a means of fulfilling a dream.

Thomas Jablonski grew up in the city and worked for years as a security specialist in a Chicago suburb — a business that still provides him with supplemental income. But five years ago he followed his desire to live a rural lifestyle and established Eden’s Harvest Farm in Blackstone.

“I’ve wanted a farm since I was 20 years old, and I’m 54 now,” Jablonski says. “I’m health-aware and anti-medical establishment, so I tend to want to do as much as I can as organically as I can.”

At first Jablonski raised organic vegetables, on about an acre of land, that he and wife Janet picked, cleaned, bagged, and bunched for sale at farmers’ markets: “You make a few hundred bucks a week, but it works out to maybe $1 an hour for the amount of work.”

Now Jablonski is much more enthusiastic about selling air purifiers and establishing his alpaca business.

In the beginning he considered emus and ostriches, which, he says, “back then were $60,000 for a pair.” Ostrich prices plummeted for lack of a market; “alpacas have held their price since 1984,” he says. “They haven’t gone down, so they’ve been a good investment.”

Only in business for two years, Jablonski just sold his first alpaca and has already reinvested in two new ones. Three crias are due this spring, and Jablonski expects to see a profit after his third year in the business.

As an industry, AOBA’s Jerry Miller predicts, alpacas will experience “a long, slow growth period.” But, he insists, “It’s not a fad.”

Liz Nichols agrees: “It’s a get-rich-slow business.”

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