Alpaca Fiber Farming for Profit

1. What is Value-What is Profit?

Per Merriam-Webster, value is: The monetary worth of something; a fair return or equivalent in goods, services, or money for something exchanged.

Profit is: a valuable return; the excess of returns over expenditure in a transaction or series of transactions; especially: the excess of the selling price of goods over their cost.

In this section, the “value” of alpaca fiber is discussed. Some alpaca owners think there is an intrinsic value to their fiber and if it is stored in the barn long enough they will have someone come and give them gold for their fiber. Of course, stored long enough, the fiber will become brittle and of no value except perhaps for compost.

A finished alpaca product has value, but there may or may not be a profit. There is a perception on the part of the buyer and the seller as to the amount of value. When both agree, a transaction can be made. The sales price less cost is profit. The intent is to add greater value than cost throughout the value chain.

The value chain is a process where we add something to the fiber:

• Breeding for the best fiber for the intended end use.
• Controlling the environment as much as possible by giving appropriate feed and shelter.
• Shearing for the end-use product (This part of the value chain frequently ruins much of the hard work and cost put into the fiber. A good shearing job brings maximum profit!)
• Sorting/skirting at the time of shearing.

What is done after this point typically depends on the decision for the future fiber use of the fiber.

Current (2018) Market Prices for Alpaca Fiber

• The more invested, the higher the value.
• The higher the value, the higher the total return for a given amount of raw material.

(Data by Karl Heinrich, New Era Fiber Mill, 2017.)

Current (2018) Market Prices for Farm Processed Alpaca Fiber

• Carded batt at $8 per oz is best value for grower processing on-farm.

(Data provided by Roo Kline, Moonwood Farm Fiber Studio, 2017.)

2. Cottage Industry or Commercial?

Retail sales typically generate the greatest return. Although a retailer does not need to own alpaca in order to profit from sales of alpaca products, many alpaca owners are already set up and incur little additional expense by adding retail sales. Alpaca owners also have more heart-felt love for alpaca which can make it easier for them to sell alpaca.

Profit on alpaca fiber will continue to increase as more and better products are available to the consumer. Breeding for finer, more consistent fiber and getting this fiber into market will create demand and “value” in the view of the consumer.

Most North American alpaca products currently retail value at over $50 per pound. 

a) The Cottage Industry

The largest profits from the cottage industry are normally associated with time invested and through retail sales.

There are many, many people available to work for you at little or no charge. Take your yarn to a mini-mill and have it processed into yarn. Take the yarn and patterns to your nearest retirement center. Many women are pleased to have a knitting project. They will knit hand-made, one-of-a-kind blankets ranging from baby blanket size all the way up to a king size. For more advanced knitters, provide patterns to make scarves, hats or sweaters. These too are great for home or retail. Just think of all the stores that would love to carry these fine alpaca products.

Check for spinning clubs in your area. They are a great place to sell your fiber. Have your fiber made into roving. This is also a great item for these clubs.

Stores on alpaca farms are a great place to sell your finished goods.

Check out the various fairs, and farmer’s markets in your area. Get on their mailing list. If you cannot be there, find someone who will carry your goods for a commission.

There are many fiber artisans looking for fiber to use in their creations. Felting is used not only in making clothing but in making wall hangings, bags, purses, and hats. We attended one show where the artisan made denim jackets embellished with beadwork, needlework, and alpaca felting! Visit craft shows to find these talented folks. 

b) The Commercial Industry

There are two aspects to the commercial industry. The first is cash paid for fiber and the other is revenue through sales, which has a higher return. However, much the same as the cottage industry, this typically requires more time and involves retail sales.