How Two Retired Teachers Invested in Alpacas and Built a Successful Business
Three alpacas Donna and Laurence Binder brought to the Houston Livestock Show and Rodeo, named Adoreabella, Glenrock and Douglas.
When Donna Binder got kissed by an alpaca at the Houston Livestock Show and Rodeo — on the lips —Donna thought she was about to get bit by a llama.
“I said to my husband, ‘Laurence, there’s a llama on my lips — what do I do?’” Donna recalled. “He said, ‘Don’t make any sudden movements.’”
It was 1996 and alpacas had barely even been in the United States for ten years. Donna and Laurence had come to the Livestock Show to brainstorm what kind of livestock they might want to purchase to populate the new land they had bought out in the country — but the awkward-looking, fluffy South American animal wasn’t what they were expecting to find. Donna had never seen one before. It had a long, thick neck and big, round eyes, and somehow seemed to be smiling. Just as the alpaca began to pull away from her, his pen-mate replaced him, again going in for a kiss. The owner told Donna it looked like she had been chosen — and Donna figured she was right.
Within a year, Donna and Laurence purchased five alpacas for $27,000, a discount at the time.
“Our families thought we had lost our minds,” Donna said. “And we had — but it ended up working out well.”
Donna and Laurence Binder had entered the alpaca breeding industry just as it was on the cusp of a boom. Twenty years later, they now own about 100 alpacas on their Bluebonnet Hills Alpaca Ranch, having survived the industry downturn during the Great Recession, as others who may have purchased the animals just for an agriculture tax break floundered. For the Binders, the alpacas weren’t just the cute, fluffy exotic llama cousins they could admire in their backyard. The alpacas became their livelihood.
“We’re only one of two alpaca ranches in the state that are still around since [the late 1990s],” Donna said, standing outside their alpaca pen at the Houston Livestock Show. “Just this morning, we saw the other ranch owners, and we wished each other a happy anniversary.”
An alpaca belonging to Susan Leslie, who owns six on her ranch, Leslie Lane Llamas in San Antonio. Leslie says adding alpacas to the ranch was her daughter's idea — they're a hit with kids, and Leslie brings them to the Livestock Show for exhibition.
Alpacas didn’t come to the United States until 1984, imported from South America. After a relatively slow start, by the mid-1990s there were about 10,000 of them — and then by 2006, more than 86,000, according to a University of California study. The government had incentivized investing in the alpaca with agriculture tax breaks. But in the early 2000s, it was right around the time the ostrich and emu booms were busting. Those who had purchased the animals for tens of thousands of dollars were failing, unable to turn their stocks of the exotic animals into a viable business model.
“I think in the beginning there were people who maybe thought [alpacas] were gonna be the same kind of thing, that it was going to be a get-rich-quick kind of industry,” Donna said. “I don’t know anyone who went into it with that kind of paradigm that’s still in business. Because this is a job, and this is livestock. To be successful, it takes work.”
Donna and Laurence, retired teachers who had dipped into their retirement savings to purchase the alpacas initially, began breeding by making sure the female alpacas gave birth to one baby per year. They found clients who were other breeders — or, for example, were knitters and weavers who wanted their own alpacas so they had an endless supply of the alpaca fiber — the industry word for the alpacas’ unique fleece.
The Binders grew the business by investing in alpaca fiber straight from Peru, the alpacas’ homeland, and began making yearly trips to the country, looking for specialty clothing designers that would let them sell their merchandise back in the states. They now have two shops, in Brenham and Navasota, selling everything from scarves and sweaters to rug yarn.
An alpaca belonging to 15-year-old Sidney Nickles, who fell in love with llamas and alpacas through her involvement in 4-H and decided to show them.
“At the first national show we went to before we ever bought an animal, we wanted to see, what is the vision in the future for this industry?” Donna said. “We were so impressed that the vision from day one was to slowly bring down the price of the animal, and then the marketing team was marketing the product, not just the animal. And so we did the same thing.”
As the supply of alpacas flooded the market, the prices did, in fact, come way down. While some female alpacas were selling for as much as $70,000 at auction in 2005 at the height of the boom, according to data from the University of California researchers, they were down to about $14,000 by 2011, during the Great Recession. For those who had not really built a solid business model, it was an uncertain time for alpaca owners.
“[The prices] went really down because a lot of people who invested in alpacas got scared and then sold the animals cheap to get rid of them,” Laurence said. “They were scared they were just gonna bottom out.”
Donna said that the dip in prices has ended up serving the business well, as the alpaca clothing products are more affordable and accessible to more people, and the animals themselves don’t require a massive investment. Donna said female alpacas can likely be found today for as low as $3,000 to $10,000.
Still, she said, she and Laurence have remained wary of anyone simply wanting to purchase alpacas for the tax break alone. For years, the Binders would get phone calls every December from rich people, looking for the agriculture exemptions.
“We wouldn’t even talk,” Donna said. “We’re not gonna turn them over to people who just want them for tax deductions. These animals have names and parents. We raised them.”
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