The Llama Industry

Here at Evergreen Llamas we believe strongly in the Llama Industry!

Raising llamas and llama ownership has numerous rewards. Many of these rewards are intangible and include things such as watching the birth of a new cria, watching a 4-H or FFA youth excel with one of your animals at a county fair, or just simply watching the herd play in the evening or giving a favorite friend a scratch.

Llamas are classified as livestock and as such they are eligible for many tax advantages. Many ranches get started for the simple reason that it lowers their property taxes since in most states farm and ranch property is taxed differently from residential real estate. In addition active llama ranches can usually deduct purchases of animals, tack, fences, ranch buildings, infrastructure, and outside labor. Many individuals will write-off their ranch infrastructure and improvements while greatly adding value to their real estate (fences and barns for llamas can usually work as "horse properties" which is big money real estate in many parts of the country). Please note that different parts of the country have different nuances in the tax code and every situation is a little different so consult your tax professional before "diving in".

Return on investment (ROI) in the llama business very from big losses in the red to big profits in the black. Most llama ranches today seem to enjoy a combination of the intangible rewards (mentioned in the first paragraph), and varied tax advantages (mentioned in the second paragraph), along with a small gross profit. More often then not its an enriching lifestyle that has tax advantages and minimal profits.  It is all in the way you operate your business. Your business must be ran as a business and not as a hobby, there are complex differences in the two and in my opinion the phrase "hobby business" is an oxymoron. That does not mean you cannot LOVE your animals and LOVE your business (we do by all means!).
If you want to be successful in the llama business we have compiled a small list of recommendations to get you started:

  1. Visit successful breeding programs, ask lots of questions, get lots of different options. (Beware of the "burnt-out" crowd who simply maintain a herd of animals and no longer treat them as a business. There are a lot of farms that bought high and sold low and now have a negative view on the llama business, see #2)

  2. Buy low, sell high. Its a simple rule of business that can be applied to llamas. We all jump to our feet and clap when they sell a $40,000 llama, however please remember that there are many NICE animals our there on today's market for $1,000 to $2,000 and if quality is equal (which it many times is) it is much easier to have a ROI on $2,000 then it is to have a ROI on $40,000. We recommend finding 5-6 entry level or production females from good production lives and breed them to the best male possible. Either acquire breedings to a GREAT male, or buy the best male you can afford.

  3. Educate your self on quality and genetics. Visiting farms is a start. The ALSA judges clinic is also a good place to start. Try to acquire old llama magazines or catalogs to see how the styles in the industry have changed over the years. Realize that a good llama may not always be the first one that catches your eye, or the most stylish llama. Good milking and mothering ability, good basic conformation, and a regal stance should always come first.

  4. Start marketing on day one, put any profits back into your business for 5 years. Market your program and llamas online, in industry publications, and to sources outside the llama industry. Build an identity or brand.  Realizing you will not have much in the way to sell your first few years offer farm tours, or a product for sale off your ranch to get your self known. Consider hosting a clinic. All monies made the first 5 years put back into your program: upgrade animals, expand your herd, or improve the infrastructure of your ranch.

  5. Have FUN! Some people look into the llama business and realize that they would rather just have some animals for fun, that is totally natural and OK! It takes time, devotion, and sometimes periods of heartache to get a successful program off the ground. Many have failed, but some have succeeded. No matter what level of participation you are looking at within the llama business remember to have FUN! Llamas are a gift.

If you are thinking of pursuing llamas as a business here are some websites that you may want to check out:

Cascade Llama Sale   www.llamaalpacaauction.com

Celebrity Sales   www.celebritysales.com

The Llama Futurity Association   www.thelfa.org

The Llama Banner Magazine   www.llamabanner.com

The Lama Link Magazine   www.lamalink.com

The Suri Llama Association   www.surillama.com