Startup Costs: Chesapeake Alpacas, Inc.

Start Up Costs

Breeding Stock — This cost will vary depending upon the number of animals you purchase to begin your herd. The quality of the breeding stock will also influence this cost. Assume an average cost of $17,500 for a good quality pregnant female; $10,000 for a young breeding-quality male.

Insurance — Full mortality insurance can be purchased for approximately 3.25% of value. There are several agencies which offer alpaca insurance (Wilkens, National Livestock. Prairie States).

Shelter — Do you already have a barn or three-sided structure? If so, you may only need to make minor changes to accommodate your animals. If not, you will need to decide what type of structure to build and how much you can spend. Fortunately, alpacas do not need an elaborate structure, but they will need some protection from the elements. Also consider the enhanced value of any improvements made to your property.

Fencing — We recommend 4-5 foot, twisted wire, no-climb horse fence. This is available at most farm supply stores and sells for around $100-120 per 100 ft. roll. Though alpacas generally do not challenge fences themselves, it is imperative that they have protection from predators (dogs, wolves, coyotes, etc.).

Equipment — Tractors, trailers, trucks, etc. used in your business can be depreciated.

Seed/Fertilizer — You will need to determine the cost of these items for your acreage. Consult with your local extension agent or farm store personnel for assistance.

Hay — Average cost per bale of $3.50. The amount you use will depends upon the quality of your pasture. In the summer or milder climates, if pastures are healthy, it may not be necessary to feed any hay.

Feed/Minerals — Average $10-$12 per 40 lb bag. Minerals are also fairly inexpensive. We highly recommend feeding grain specifically formulated for alpacas. Many problems can easily be avoided by maintaining proper nutrition.

Veterinary — Cost should be minimal given the general good health of alpacas. However, a reserve for an emergency is prudent. With some instruction, you can also minimize expenses by administering routine shots yourself.

Shearing — You can learn to shear your alpacas yourself. Professional fees range from $25-40 per animal and may require travel expenses.

Industry Memberships — Ex: Alpaca Owners and Breeders Association, Regional Affiliates, The Suri Network, etc.

Example Start-Up Costs

The following provides a most basic example of start-up costs. Actual costs vary as discussed above.

1 Bred Female and 1 Young Female $40,000

Barn or basic shelter 12,000

Feed (Hay, Grain, Minerals) 500

Veterinary Reserve 1,000

Insurance 1,000

Miscellaneous Supplies (halters, leads, etc.) 500

Total Start-Up Costs $55,000

Other Important Costs to Consider

Continuing Education (clinics, seminars, etc.)

Travel (to shows, sales, seminars, other farms, etc.)

Show Expenses (entry and pen fees, handler fees, etc.)

Stud Fees (Avg. $3,000 each)

Office Supplies (stationary, business cards, etc.)

Incorporation Expenses

Attorney and CPA fees

Marketing (Print ads, web site, brochures, etc.)

Boarding fees (Ranges from $3.00 - $4.50/day)

Return on Investment

Factors that will influence the point at which your business becomes profitable include the initial amount of your capital investment (size of your herd), the point at which you begin selling offspring, the "quirks" of mother nature, the current market for alpacas, and your level of enthusiasm and commitment to your venture. The start-up phase will most likely average 3 years. For a quicker return on investment you may opt to start with a larger herd and sell all of your offspring. Or, you may choose to delay your returns by keeping some or all of your offspring to build your herd.