In 1984 the first focused imports of alpaca arrived into the United States from Chili. Over the course of 14 years various imports arrived from Bolivia and Peru as well culminating in the Alpaca Registry closed in 1998 to additional imports to lock in genetics in the United States. This closure did not stop imports simply registration in the Alpaca Registry. Registration of additional imports went into the International Llama Registry.

As of this writing the alpaca industry in the United States has been in existence 30 years and a fledgling industry. The alpaca market developed with highly geographically distributed smaller farms many having fewer than 20 alpacas. Few mills are capable of producing more than hats and scarves. The Alpaca Fiber Coop of North America developed success with socks and the Alpaca Blanket Project started under Peter Lundberg producing the all alpaca Pendleton blanket. Issues of collection, sorting, grading, with sufficient quality fiber all challenge the current commercial market while a healthy cottage industry has grown. Understanding and awareness about alpacas in general seems to have eclipsed with few alpaca owners being asked what is an alpaca, what do you do with the alpaca, or how many eggs do they lay? Understanding the characteristics of alpaca fleece, best method to process alpaca fleece, and becoming aware to the formidable number of uses is still underway such as C&M Acres who applied alpaca fleece to making rugs and horse blankets.

Each alpaca farm must develop its own market and branding. Not only does it take 7 to 8 years to develop sufficient quality alpacas to sell from recruitment, it takes minimally 8 years to develop a recognizable reputation, brand, and identification for the farm and herd. Farms that were in business more than 15 years sustained during the 2008 recession but many farms attempting to establish during this vulnerable development time floundered and failed.

Average Auction Prices remained steady through from 1994 thru 2004 holding at $18,130, a low in 2001 of $14,270 and a high in 1994 of $20.900. The 2001 low was due to fear from Hoof and Mouth Disease in Britain and the USDA stating if discovered in the United States all animals would be destroyed in a five mile radius.

As alpacas were discovered the economics of supply and demand took over as demand made this a sellers market starting in 2004 and carried into the recession starting in 2008 with rising prices. Average auction sales were between $26,000 and $51,000.

The nature of an alpaca sustained a sellers market. The alpaca produces one cria a year and birthing issues occur in approximately 10% of the pregnancies through absorption, abortion, and dystocia. Alpaca pregnancies produce 50% males. Population doubling occurs between three to four years. Gestation on average is 330 days. Maturation occurs in females to breeding age between 16 and 18 months. Determining male acceptance into breeding occurs between 24 and 48 months.

An industry goal was highly selective breeding to produce enough alpacas with under 25 micron fleece to support a commercial fleece market in the United States. The industry targeted 100,000 alpacas. This number was achieved when 100,000 alpacas were registered in the Alpaca Registry September, 2006. This goal was key to alpaca farms until 2009-2010.

During this building phase cottage industry was the single supporting enterprise of the fleece market. Small mini mills opened across the country buying and processing fleece into roving, yarn, felt, and woven fabric carrying value-added to new levels. Many processed their own fiber on farm and spun this into yarns. The characteristics and uniqueness of alpaca fiber was under scrutiny at this time as the market learned what and how to work with this unique fiber. Machine settings were much different to process alpaca fleece than wools.

One concern the industry faced was sun-setting alpacas that no longer cost justified. Most entrepreneurs entered the alpaca market understanding this was not a terminal animal market such as raising hogs. Just talking about slaughtering an alpaca in this market could get ones farm and alpacas blackballed. What resulted was a glut of male alpacas that were not suitable for breeding, their fleece quality was receding, and they were too difficult to handle to be suitable pet or therapy.

To better understand how a surplus of males develop is to be acquainted with the events that contribute to that surplus. Births result in nearly an even male female ratio of 50-50. Of the males born only around 5% are considered herd sire. Another 5% may be considered breeders but marginal. If we look at the 100,000 registered alpacas 50,000 are male by birth. Of these 10,000 might be good enough to pass along their genetics. That leaves 40,000 with low expectations of recovering their costs.

As the market wrestled with what to do with a surplus of males and the realization it had reached the minimum target to start development of a commercial alpaca fleece market in the United States, the impact of the 2008 recession coupled with a severe retraction of the housing market, and substantial issues in the banking industry due to under collateralized loans severely effected the industry. This one, two, three punch hit many investments and alpacas were not immune.

The first indicator to the alpaca industry was retraction in auction prices of 50-70% returning to 2003 price levels. The industry started to struggle with multiple issues. Up through 2009 most farms working toward the 100,000 goal were seed stock producers. A seed stock producer is a farm that breeds to produce the next generation in quality for sale. Sales on farms slowed and stopped. Many strategies were employed to meet that challenge such as delayed breeding birthing later in the following year with anticipation the economy would recover and sales would resume. Many economists did not anticipate the depth of this recession as well as alpaca farmers.

The alpaca industry suddenly found itself with a surplus of alpacas. Many alpaca owners had entered the market in 1984 to 1998 in their forties and fifties and felt this was the time to retire. That added more alpacas into a flooded market. Simple supply and demand went into effect and affected prices further. Auction prices retracted an additional 20% seeing an average range between $10,000 and $17,000.

This was a buyers market as entire herds were placed upon the market. Many buyers who found alpacas at extraordinary prices, prices as low as $100 found they often came with higher husbandry costs. Alpaca health was compromised often with substantial parasite loads often bringing parasite and conditions to farms that had never experienced these problems. Many buyers found the diamond in the rough able to upgrade their herd genetics and quality.

During this time a need arose to reduce cost. Many had been operating conservatively and cost cutting was already in effect on many farms. This meant reduction of surplus stock – specifically males. Relaxation toward the idea of slaughter for meat consumption and hide began to meet the need. Bitterness remained toward slaughter but a need to reduce costs was superceded by emotion and the alpaca meat market began. Rob and Joanna Stephens of Robasia Alpacas met this need with a line called Fantasticks.

Lagging alpaca sales prompted impetus into fiber production. Problems rapidly surfaced that enough fleece might exist for a fiber market but collection, sorting, and grading were the logistical issue. The Alpaca Fiber Cooperative of North America had overcome these issues having met the challenge when they started their Socks for Troops campaign in 2000. Demand for alpaca socks took off and AFCNA needed fiber fast to meet demand. Collection points were organized, sorters and graders were solicited and trained where a shortage existed.

Lynn Edens, Our Back 40ty and Snowmass Alpacas are two alpaca farms who have been working on bulk fiber collection and sales and are instrumental in logistics of fleece collection, processing, and conversion into usable product. Erin and Paul Egan purchased the Alpaca Blanket Project working with Pendleton making alpaca blankets but subsequently went out of business in 2016.

What this production represents is a fledgling industry that has begun in the United States. It is met with obstacles. The obstacles are analyzed, solutions are applied and the next step toward an alpaca industry is taken. As the economy improves, alpaca sales will resume and the market will absorb the surplus though sunset solutions and purchases. Economics of supply and demand will regulate prices providing stability. Commercial fleece processes will compete with cottage industries for fiber as both develop, as the alpaca industry responds to better economic health.