Friday, June 1, 2012

Vertical Integration - Making Money with Alpacas

Alpaca Vertical Integration

When we first created our alpaca business plan, all we wanted to do was raise alpacas.  And that is exactly what we did for 3 years, very successfully with a lot of rewards.  When people would ask if we had any alpaca yarn or hats, we would suggest they look online or go to the alpaca co-op for some terrific items.

After 3 years of shearing, the alpaca fleece was beginning to take up a significant amount of space in the barn.  We had over a hundred bags of raw fiber tucked in the rafters and stuffed in corners.  So, we decided to have it processed into “whatever the mill thought was best”.  We had no idea there was a difference in yarn weights, gauges or different blends.  I didn’t really want to deal with this aspect of the alpaca, but we had to in order to free up some space.

Extreme Warmth Winter Hat
We began selling skeins of alpaca yarn at the local farmers market and online.  We asked a lady that we knew knitted if she would be interested in making hats for our new twin niece and nephew that were born. Then she made a few more.   Momentum began to build and five years later, our clothing lines have become a large income factor in our alpaca business.  We have 26 different local artists who knit, felt and crochet thousands of items. Our extreme warmth winter alpaca hats are a huge market for us, as well as our FR helmet liners for construction work.

Kids Alpaca Hat
In conjunction with this, we have high powered herdsires that draw in female alpacas to be bred across the nation.  Transport is relatively easy and the females are at our farm for 4-6 weeks before heading home, carrying the next generation of alpaca.

Over the years, we have several groups who have invested in alpacas, agisting (boarding) their herd at our farm.  They are either building their own alpaca farms or have no interest in scooping manure now or in the future and simply like the commission checks sent to them on occasion.

Our fifth form of income that has developed over the years is our alpaca compost fertilizer.  With a seemingly endless supply, we have created a forced aeration system to compost the manure into high quality, beautiful fertilizer that we sell across the country.  This area is more involved because of the permits needs to sell commercial grade fertilizer, but we have had great success with it and it is in high demand.

Alpaca Compost Fertilizer
In all, we have a wide variety of income streams –selling alpacas, clothing, breeding, agisting and composting.  When the alpaca sales market slowed significantly several years ago, our all natural, Montana made alpaca clothing really took off.  Each one helps to balance each other out in developing consistent, dependable income in a cyclical agricultural market.