In addition, there are an almost infinite variation of shades, which are caused by dilution and extension genes that modify the color genes. The theories about which colors are dominant or co-dominant, and which are recessive are often in conflict. The frequency of certain colors is manipulated by breeders and this creates the impression that certain colors are dominant, when they may be simply more apparent.

Fleece color is generally thought to be inherited according to Mendelian principles, but there may be an exception operating. The actual method of coat color inheritance is in question and issues such as how many color or modifier genes exist or which colors are dominant or recessive are not settled. A number of researchers suggest the alleles of each gene pair interact with one another in a dominant or recessive fashion to determine the color of an individual fleece. One researcher suggests that color is inherited in a more complex fashion, as the result of gene linkage. C. Renieri, a member of the faculty of the University of Camenino in Italy, in his 1993 paper, “The Genetic Basis of Pigment in South American Camelids,” wrote that “At present a modern and complete theory over coat color genetic determination in South American camelids lacks completely.” Here we will cover some of the more prominent theories of how coat color in alpacas is determined.

HOW COAT COLOR IS DETERMINED

Color inheritance patterns for laboratory animals, such as mice, and some larger domestic animals such as dogs, cats, cattle, and particularly horses have been intensively studied. Coat color in mammals is almost entirely dependent on the presence or absence of the pigment, melanin, in the skin and hair. Melanin is produced by cells called melanocytes, which are concentrated in the hair follicles, the skin epidermis and the retina of the eye. Color in these areas is determined by the size and shape, as well as by the type, number and distribution of the cells or granules of melanocytes. There are two distinct forms of melanin: eumelanin (brown/black) and phaeomelanin (red/yellow). White coat color is the result of: 1) either no pigment; 2) the extreme dilution of red pigment; or 3) a large spot of white superimposed over the entire animal.

In the life of a Peruvian alpaca, white often means survival since white fleece is the color of choice. As a result, in Peruvian alpacas, white genes in various combinations are frequent. The anecdotal evidence is that the white gene is, at least in some alleles, dominant due to the fact that they are passed on to white cria from colored parents. Alternatively, this may be explained by the theory that color is inherited through a process of gene linkage.

Dr. Philip Sponnenberg had this to say about determining color in alpacas in his paper entitled “Jiggling Genes:”

One of the challenges in understanding color in alpacas is to understand that every alpaca has genetic machinery to produce color. On many, though, the whiteness has been superimposed either completely or partially. Therefore, white animals hold lots of hidden surprises for the alpaca breeder. These surprises can be used to good advantage by astute breeders.

The exact genetic control of color in alpacas has never been elucidated. Part of the reason for the lack of information is that most research has focused on fleece color. Fleece color alone does not reveal the genetic intricacies relating to the overall alpaca. As an example, imagine that bay and chestnut horses were alpacas–both would grow red-brown fleece, but the genetic control leading to that final color is distinct, and each will behave very differently in a breeding program. The lesson here is that it is important to look at the entire animal to evaluate the color phenotype, which can then be used to estimate the underlying color genotype.

My basic approach to understanding the color of any animal is to first try to remove the white. This is clearly impossible for white or nearly white individuals. Looking at color is important, and the important questions to be answered include deciding which pigments are present, their locations on the animal, and their relative intensity. My experience with alpacas is not as vast as mine with sheep and goats, but my experiences so far indicate that the following are the basic options for colors:

• black that does not fade or sunburn
• black that fades or sunburns to a reddish brown at the tips
• black with a light belly (these are tough to spot in fully fleeced animals)
• red/brown with no black trim
• red with black trim (nose, eyes, lower legs but maybe only toes)
• brown or chocolate with black trim
• shaded colors with pale lower areas, darker top areas (usually on a reddish tan)

These appear to be the basic patterns available, with other colors derived from these basic ones. The control of these is going to be complicated, and that is because several different loci (or genetic addresses, each with a few choices at that address) can control the final outcome. The several different loci can be imagined to be a series of switches. The switch choices are the different alleles at each locus, and the sum of these choices gives the final outcome. The beauty of this system is that a relatively few loci, with few choices at each location, can give a whole wide range of final colors. That, alas, makes predictions somewhat difficult.

The skin pigmentation of sires and dams could play a role in predicting the color of an alpaca cria, says Julio Barreda. His observations have led him to believe that the skin color of white alpacas can help predict the color of offspring. “Animals with pink outer and inner lips, eyelids, and toenails will produce white progeny when mated to similar phenotypes,” he says. “Black-lipped white alpacas will often produce colored progeny if mated to a colored alpaca and may produce fawns when mated to one another.”

HOW COLOR IS INHERITED

When Mendel studied his peas, he got lucky. The genes affecting the traits he observed in his pea plants all occurred on different loci on different chromosomes. Chromosomes assort independently (i.e., there is no tendency for certain chromosomes to stick together in germ cell–egg or sperm–formation), so the genes on those chromosomes assort independently too. Because all the genes Mendel was studying did, in fact, assort independently, he believed all genes assort independently, hence his law of independent assortment.

Today geneticists know that there are exceptions to the law. Exceptions to Mendel’s second law are caused by linkage. One of these exceptions may apply to alpaca coat color inheritance.

Two gene loci are linked if they occur on the same chromosome. Because entire homologous chromosomes–and the genes they carry–are separated at meiosis (the process by which chromosomes are reduced to half their original number during gamete formation), genes on the same chromosome tend to end up in the same gamete (germ cell). This is only a tendency, however, because of a phenomenon known as crossing over. Crossing over involves a reciprocal exchange of chromosome segments between homologous chromosomes and occurs during meiosis prior to the time the chromosomes are separated to form gametes.

Crossover events are common, and the probability of recombination of genes at any two linked loci depends on the distance between the loci. Loci that are far apart are likely to recombine often. For practical purposes, the genes at these loci will assort independently, just as they would if they had been on different chromosomes altogether. Recombination is much less

Group of colored Peruvian alpacas, 1960.
Photo: Julio Barreda

likely for loci that are very close together because the probability of a break occurring between them is much less. These closely linked loci create exceptions to Mendel’s second law.

Color inheritance patterns vary considerably from one species to the next. For instance, mating horses of the same color does not generally produce the same color progeny, except for maybe sorrels or chestnuts. Alpacas appear to breed true much of the time, i.e., white x white often equals white.

These variations occur because genetic traits can be simply inherited at one locus or polygenically inherited at several loci. This means that one gene or set of genes at one specific location on the chromosome may be responsible for a trait, such as color, or the trait may be caused by several different genes located at different spots on one or more chromosomes.

There are many species of livestock in which color is simply inherited. For instance, black or red coat color in cattle is simply inherited. The black allele B is dominant and the red allele b is recessive. Producing red cattle is very easy: Keep only the red cattle. After one generation all the progeny would be red. Black is a little more complex because the red recessive gene could be present in a bull with a black phenotype. (Please note that in dominant-recessive gene action, B-black b-red, there are three possible gene combinations, but only two possible colors, BB and Bb equal black and bb equals red.) By only using bulls that were homozygous for black, the red gene could almost be eliminated over time and all of the progeny would be black.

Complete dominance, as in the black cattle example, will produce the dominant color when the dominant allele is paired with a recessive allele of another color. Complete dominance is the one form of dominance in which heterozygous and homozygous dominant genotypes have the same phenotypic expression. Co-dominance occurs when the recessive gene expresses itself equally with the dominant gene. An example of co-dominance occurs in the coat color of shorthorn cattle in which each genotype (RR, Rr, or rr) is associated with a distinct phenotype, red (RR), roan (Rr), or white (rr). When there is co-dominant gene action, there can be two genes and three phenotypes, as in shorthorn cattle. The co-dominance in shorthorn cattle that produces the roan color from a mix of both red and white hair could also explain gray alpacas, both silver and rose, which are the result of the combination of black and white, or red and white fiber.

Breeding for alpacas of a specific color is much more complex than breeding for coat color in cattle, because most researchers think coat color in alpacas is inherited polygenically. (In horses, as many as 12 loci are thought to affect coat color.)

Most theories of color inheritance in alpacas rely on Mendel’s rules of dominance and random independent assortment. Everyone agrees that color in alpacas is controlled polygenically in the form of a) color genes, b) modifiers, and c) extenders. These three types of genes are universally thought to reside on separate chromosomes. Modifier genes in the form of multi, spotting, or diluter genes are thought to sort independently according to Mendel’s laws; each of these would be a switch station in Dr. Sponnenberg’s analogy. Another theory of color inheritance in alpacas is that all colors are linked on the same chromosome and color is determined at meiosis, the process by which chromosomes are reduced to half their original number, by a recombination of the color genes.

There is far less agreement on just how many color genes and loci there are. Toledo and San Martin reported in 1948 that there were three series of genes; in 1968 Bustinza reported four series of genes. And there are several more color inheritance models, which contradict one another.

There are three leading theories of coat color inheritance by assortment and dominance: those of Humberto Gundarillas, Dr. Julie Koenig, and Dr. Philip Sponnenberg.

A 1983 article by J. Tillman entitled “Coat Color Inheritance in Llamas and Alpacas,” published in Llama World, presented Gundarillas’ theory that there are four genes controlling coat color. Those four genes are:

1. C locus wild gene with cc producing white (white is recessive)
2. V for brown and vv for black (black is recessive)
3. S for solid color and s for spotted
4. Lw which controls the extension of spotting for pigmented animals and Lw/Lw for full white animals

Gundarillas also concluded that solid color is dominant over multicolor.

Koenig presents a more complex scheme of inheritance involving eight genes. Three color genes determine the base color of the animal as follows:

1. White: W gene. Two alleles, W and w. WW or Ww produces white (white is dominant), ww produces color which results from the A gene.
2. Vicuña and guanaco color. A gene. Four alleles: A+, A, a+, a. Various combinations produce alpacas with light bellies and white inside legs, red-brown bodies and necks, or black bodies with brown underbellies.
3. Brown and black. B gene. Two alleles, B and b. BB and Bb produce black (black is dominant), bb produces brown (brown is recessive).

Koenig also theorizes that there are five genes which define the intensity or pattern of color: C and D (affect dilution of color); R (affects roans); S (affects spotting pattern); and P (affects solid versus piebald patterns).

Sponnenberg, an acknowledged expert and author of numerous equine color studies, speculates that primary color is controlled at two separate loci: the extension loci, and the agouti loci. He acknowledges that both of these loci may not be present in alpacas and that the interaction between them is very complex. He proposes that the basic colors may (or may not) be controlled as follows:

Extension:

• black – dominant (called dominant black)
• wild type – allows expression of agouti
• red – recessive or chestnut red, no black hair

Agouti

• red with black trim dominant
• red with extensive black trim
• black and tan (tan belly on black)
• black – recessive black

COLOR INHERITANCE BY GENE LINKAGE

One theory of alpaca coat color inheritance stands apart from all the others. Researchers William L. Wall and Ron G. Cole, of Australia, who both own alpacas, propose that Mendel’s rules of dominance and independent assortment do not entirely explain the inheritance of coat color in alpacas.

Wall’s area of interest is agricultural sciences, especially genetics; Cole comes from a mathematics background. They propose a model of inheritance based on gene linkage.

The Wall/Cole theory of inheritance grew from their statistical analysis of matings that were registered by the Australian Alpaca Association’s registry. In all, they studied the color of more than 10,000 cria from registered parents whose coat color was known. The results of these matings were compiled in two sets of coat color tables (presented in their entirety in appendix 2): Version 1, which compiled the coat colors of over 7,000 cria, and Version 2 which included the coat colors of an additional 3,000 cria.

Wall and Cole’s theory of coat color inheritance in alpacas formed as result of analyzing Version 1 of the tables. They then used their theory to predict the color distribution among the additional cria. These are the figures charted in Version 2. The accuracy of their predictions lends considerable credibility to their ideas.

The goal of the Wall/Cole research was to:

1. determine the minimum number of genes necessary to explain the range of colors found in alpacas
2. map the genes on the chromosomes
3. explain the action of modifier genes.
4. explain the action of the multi gene

In the process, they concluded that coat color inheritance was determined by the process of gene linkage and not by dominance and simple assortment. They further concluded that there were five genes total: three primary color genes–black, red, and white–which are linked on the same chromosome; a modifier gene which determines the amount of color; and a multi gene which determines the distribution of color. Wall/Cole hypothesize that the chromosomes carrying the three linked color genes resemble the above diagram.

Once Wall and Cole settled on the gene linkage method of inheritance, and determined from their coat color tables the relative distance apart of the linked genes, they were ready to predict the outcome of the additional matings that were included in Version 2 of the coat color tables. Their predictions were more than 90 percent accurate.

Because the B, R, and W genes are linked, this allows for 64 possible genotypes (4 alleles X 4 alleles X 4 alleles = 64) which are expressed as 27 phenotypes. This conclusion is reached by taking the B (black) gene, its alleles are B and b, where BB, Bb, bB, or bb represent four possibilities, and making the same assumption for R and W, therefore 4 X 4 X 4 = 64. However, as Bb and bB are indistinguishable, there are three phenotypes (BB, Bb, and bb). The same is true for R and W. Therefore 3 X 3 X 3 = 27 phenotypes.

In similar fashion, Wall/Cole theorized that the diluter gene has four genotypes and three phenotypes: DD, Dd, dD, and dd. When you take the 27 color phenotypes available and multiply them by the three diluter gene phenotypes, the result is a potential for 81 different phenotypes. This range of possible color shades explains every conceivable alpaca color. These colors would occur on a continuous variation from light to dark, red to brown, to fawn and white, etc.

The research derived from the color tables also led Wall/Cole to theorize that there are three alleles of the multi gene: O, o, and ø with solid (O) dominant. The multicolored coat in alpacas is expressed in many forms. These forms include:

1. A small white blaze on the face of an otherwise totally black animal;
2. Boots (i.e. feet and lower leg colors different from the coat color expressed over the rest of the animal)
3. White on white or black on black (i.e. white spots on a white coated animal or black patches on a black coated animal which, because of the base color of the animal’s coat, are unseen as spots or patches).

All grays in this genetic context are considered multis, with the possible exception of “true solid gray.”

Calculating the various possible phenotypes that would occur from specific matings under this theory establishes that a two-to-one ratio of solid to multicolored animals would result from matings of multicolored parents. This conclusion is also consistent with the data found in the tables. Finally, their research confirmed that all grays were multis with the black, red, and white genes operating.

Wall and Cole’s research was verified independently by examining published data presented by Rigoberto Calle Escobar, who, in his book Animal Breeding and Production of American Camelids reported the following results of a color mating study conducted at La Raya Ranch:

From observations made at La Raya Ranch 1,000 white females mated with white sires produced 50 to 60 percent white offspring; 19 percent were light fawn; 17 percent were patched. In decreasing order came cinnamon, light coffee, dark coffee and black.

It was also verified that from every 300 offspring of the white with white cross, only one completely black offspring was produced. Similarly from the crossing of white sires with other colored females (with exception of light spotted fawn) a predominance of the mothers’ color was noted. In the case of females with light fawn and spotted, forty percent of the offspring are white. These results of color crosses which have been verified, reinforce the thesis that color inheritance is complex and is based on many pairs of genes which, because of a not very intense selection in the herds, are maintained in a pool of genes of the population, conserving color variability.

It is interesting to note how Wall/Cole’s study’s predictive value holds up in explaining the results of the La Raya color mating study. Escobar’s La Raya observations and Wall and Cole’s calculations from the Australian herd when white was mated to white follows in Figure 12.

MODIFIER GENES

Basic alpaca colors are thought to be diluted or presented in several different shades by the action of a dilution or extension, modifier gene. Modifier genes do not control a trait, but they can determine variations in the phenotype of animals which have the same genotype, for instance, the difference between light brown and dark brown. These genes most likely occur at different loci than the primary color genes. An example of these genes would be Koenig’s C, D, R, S, and P gene; Gundarillas’ S and Lw genes; and Wall and Cole’s fourth gene, a diluter, and fifth gene, a multi gene that controls the distribution of color.

The exact genetic mechanics of the interaction of primary color genes and modifier genes has not been scientifically established. It is possible the same result, for instance a certain shade of fawn, could be the result of several different mechanisms. Sponnenberg says:

The usual rule appears to be that red pigment is diluted, but black is not. Red can be diluted to a wide range of shades of tans and fawns, all the way to ivory or white. If black were diluted, the expectation would be solid and uniform blue-grays, which if present in alpacas are quite rare.

BREEDING FOR COLOR IN PRACTICE

What happens as a practical matter when you breed white to white, black to black, one color to a different color or solid color to multicolor? Alpaca breeders are fortunate to have two studies to draw from. The first is Wall and Cole’s exhaustive study of coat color inheritance which is intended to be an easy reference for breeders (see Tables 1-12 in the appendix). The study is based on the phenotypic color of the parents and their progeny; it is not intended to suggest the alpaca’s genotype.

The base data for the Wall and Cole work was derived from the Australian Alpaca Association registration database which records alpaca registrations with designated colors. The tables were created from registrations as of March 1996 and included 10,849 alpacas.

There are two types of tables:

1. The solid color cross tables, which present the progeny from crosses of sires and dams of the same color. Numbers of crosses and sex of progeny are listed, together with numbers of cria for each solid and each multiple color registered (Tables 1-8 in the appendix).
   A typical Indian herd of mixed color alpacas.
   Photo: Mike Safley
2. The individual color cross tables which list number of matings and sex of progeny, together with results of analysis of each color of male crossed with each color of female and vice versa for each of the colors. There are four of these tables (Tables 9-12 in the appendix).

A second well-documented study useful to alpaca breeders is that done by George Davis, MS, of Ag Research in New Zealand. The alpacas in the herd studied to create Table 13 (in the appendix) were imported from Chile and were owned by the research center. The parents of the progeny who were the subject of the study were pen bred to help assure the accuracy of their pedigrees. The New Zealand study was a much smaller sample group than the Australian study. The color of the alpacas used in the study was based on the main body and not on the extremities. The New Zealand study used different color definitions than the Australian study.

It should be understood that the color tables can not be used to predict the outcome of a specific cross between two animals. The data presented is an analysis of the combination of all available data. It is meant to present the results of past experience.

An alpaca breeder might choose to study the various tables to determine what has transpired in the Australian National Herd as a guide to the likelihood of various possible color outcomes from specific breedings. Wall and Cole suggest that readers of their coat color tables pay attention to the “white space” in the tables. They point out that the absence of offspring of particular colors, as evidenced by “white space,” is as informative as the offspring recorded in the tables.

OBSERVATIONS ON COLOR MATINGS

In the Australian color mating tables (Tables 1-12 in appendix), the color of the alpacas were grouped as follows:

1. fawn and roan alpacas were assigned to red;
2. silver grays and blacks were assigned to black;
3. browns were assigned to brown;
4. whites were assigned to white;
5. multi-coloreds were assigned according to the mix of colors listed, for example, a dark fawn/light fawn/white alpaca was assigned to red; a dark fawn/medium gray alpaca (roan) was assigned to brown.

Understanding this, you can use the charts to make the following observations:

1. When breeding white to white, the progeny were 60 percent white; 18 percent red; 17 percent brown; and five percent black.
2. When breeding white to brown, the progeny were 43 percent brown; 10 percent black; 27 percent red; and 20 percent white.
3. When breeding black to black, the progeny were 85 percent black; 11 percent brown; one percent red; and three percent white.|
4. When breeding white to black the progeny were 24 percent white; 14 percent red; 30 percent black; and 32 percent brown.
5. When breeding brown to black the progeny were 52 percent brown; 40 percent black; three percent red; and five percent white.

The New Zealand study produced results similar to the Australian study, although the colors were simplified to white, brown, black, gray (mixed white and black fibers), and roan (mixed white and brown). The multi-colors were described as piebald (white and black patches) or skewbald (white and brown patches). This approach ignored the subtle shadings of brown and fawn, but it ensured consistency in assigning an animal to a particular color group. Coat color was determined at skin level to avoid mistakes in identifying color changes caused by weathering effects. The following observations can be made from studying Table 13 in the appendix.

1. Mating two white parents, producing 81 progeny resulted in 63 percent white and 25 percent multicolored.
2. Where only one parent was white, and there were 159 progeny, there were 32 percent white and 25 percent multicolored. In 132 matings in which the parents were either black or brown, there were only two percent white cria.
3. Where both parents were black, producing 26 progeny, 73 percent were black and eight percent were brown.
4. Where both parents were brown, producing 76 progeny), 68 percent were brown and 18 percent black.

The fact that only two percent of the cria from colored parents were white supports the theory that white is dominant. If white were recessive, many black and brown alpacas would probably carry one white copy of the gene and when mated together, white progeny would occur in about 25 percent of births.

But the small number of white cria also supports Wall and Cole’s theory that the distance between black and white on the linked chromosome map is such that white will result from this breeding infrequently. If brown were completely dominant over black, no brown progeny would be produced where both parents were black, because their color would be the result of double recessive black genes. If black were completely dominant over brown, there would be no black progeny where both parents were brown for the same reason.

The New Zealand color tables do not fit either the black dominant or brown dominant model, although they are closer to the dominant brown model. The Wall/Cole study explains these statistical outcomes by using an inheritance model based on gene linkage.

THE BOTTOM LINE

The color of the progeny can often be predicted with accuracy if the breeder is familiar with the stud being used, particularly if he has sired a large number of offspring. A famous alpaca stud, Hemingway, is a good example. He has been bred to more than 30 black females. All the offspring, 100 percent, have been fawn, mostly dark fawn. When Hemingway is bred to solid-colored females, such as brown or fawn, he almost always produces a lighter colored cria in the same basic color of the mother; when bred to white females, he produces white cria. Accoyo’s El Moustachio (white) and Accoyo’s Victor (fawn) often produce a cria the color of the mother, especially Victor, who has thrown a lot of black crias when mated to black females.

The highest likelihood for creating a certain color occurs when mating two alpacas of the same color. Alpacas seem to carry a variety of color genes, especially white alpacas. If Cole and Wall are correct, every alpaca carries every color. When crossing a white alpaca with a colored alpaca, the progeny are more likely to be colored than white by a considerable margin. Two colored alpacas almost always result in colored progeny. Pintos can pop up almost anywhere or, as Barreda says, “pintos are hard to get rid of.”

Alpaca breeders need to form their own goals as to colors. If they want to produce unique colors for the pet market, they can mix up solids with multi-colors, black with white, and so on. If their goals involve eventually producing commercially valuable fiber, they can breed solid to solid, preferably white.
Reproduced from http://www.alpacas.com with permission of Northwest Alpacas.

IRS CODE SECTION 179 DEDUCTION

This deduction is available every year when you purchase IRS code 1245(a) (3) assets that are acquired for use in an active business [(Code Section 179 (d) (1)], assuming that you have not used the deduction on computers or some other qualifying asset. Many people do not understand that you can use this deduction to write off your purchase of up to $112,000 worth of alpacas this year and that they can take another $112,000 deduction next year. The following example takes into consideration IRS code section 179.

Remember, there is no special alpaca tax deduction. The deduction mentioned here is a standard tax deduction put in place to help all small businesses with there capital investments. To be an alpaca breeder you need alpacas thus they are the capital investment for this industry. A doctor might need an x-ray machine or a mechanic tools.

Purchase price (one or more alpacas): $112,000
Section 179 tax deduction ($112,000)
Tax savings 45% (tax bracket 45%)    ($50,400)
Actual after tax cost out of pocket        $61,600

In other words, if you are in the 45% tax bracket (state & federal) the government will reduce your taxes by 45% of the cost of $112,000 worth of alpacas. This deduction is available for all taxpayers. To see how much this will benefit you, simple calculate your state and federal tax bracket and multiply it by the amount of your purchase up to $112,000. Please remember that you are eligible for this deduction whether you pay cash or finance your purchase. it is conceivable that your tax refund could exceed your cash down payment if you purchase your alpacas on terms.

Please Note:

1) That you must have sufficient income to use the deduction. If you have no ordinary income then the deduction will be limited, 2) the unused portion of the deduction can be carried forward to subsequent years, 3) you may want to forgo electing to take the deduction and simply depreciate the cost of your alpacas. This approach would allow you to create a net operating loss which could be carried back two years and you may obtain a refund of previously paid tax, and 4) to benefit from the 179 deduction the tax payer can not place more than $450,000 of qualifying assets in service in the year that the deduction is taken.

I remember sitting with Phil Mizrahie and David Mohilef at David’s kitchen table in Chatsworth, California when David said, “Alpacas are the world’s finest livestock investment”.  That phrase captured my imagination.  Dad and I bought 10 pair of alpacas that day in 1985 and I created my first marketing initiative in the form of a bumper-sticker that said, (you guessed it): “Alpacas – the world’s finest livestock investment”.

There is a lot of truth in the phrase that David coined.  American alpaca ownership has been increasing for almost twenty years.  The biggest marketing problem in the early days was explaining what an alpaca was.  The most frequent question that people asked was, “What is the difference between an alpaca and a llama?”  Today, the Alpaca Owners and Breeders Association (AOBA), the I Love Alpacas Co-op and the internet answer that question for new breeders before you and I ever make their acquaintance.

How did we get to where we are?  The total AOBA membership was 2152 on December 1, 2000.  In 2001, 685 people joined AOBA and 1,096 joined in 2002, an 83% increase in 2 years.  More people have discovered alpacas and joined AOBA in the last 3 years than in the previous 11.

I told my English audience that the American alpaca market was constructed like a sturdy chair with four strong legs.  If you were to remove one of these legs, the market, like a chair, might wobble a bit.  The first leg is formed by a strong breed association, the Alpaca Owners and Breeders Association, (AOBA), and an industry wide marketing strategy. The next leg is the Alpaca Registry Inc., (ARI), which has DNA verified parentage and closure as its foundation.  The third and fourth legs are the alpaca show system and breeder driven alpaca improvement programs.  Let’s take a look at each of these, one by one.

AOBA AND The Industry Wide Marketing Strategy

In the early days alpaca breeders were members of and held their conventions in conjunction with the International Llama Association (ILA).  It did not take long to realize that Llama breeders were competitors rather than prospects for alpaca breeders.  Once we came to that realization the alpaca industry, all 100 of us, moved quickly to establish our own breed association marketing programs and national convention.  We have never looked back.

AOBA was formed and operating by 1990 and has always done an outstanding job of marketing alpacas on behalf of their members.  Their initiatives have included: 1) Education, 2) Alpacas Magazine 3) Ad Co-ops and more recently marketing via the Internet.

AOBA’s annual conventions became the industry’s primary educational forum with multiple seminars and guest speakers.  This model was eventually adopted by affiliates of AOBA who currently promote educational seminars all across the country in conjunction with their monthly meetings and annual alpaca shows.

I was privileged to be president of AOBA when we decided to create Alpacas Magazine.  I took on the role of editor for the first issue and eventually served in that capacity for the first two years of the magazine.  The creation of a four color glossy publication was a big step for AOBA and several members argued strenuously against AOBA’s ownership of the magazine.   They believed the risk of the magazine failing was too great for our fledging industry.  But the presence of a professional quality magazine gave the market place confidence and further extended AOBA’s ability to offer an educational resource to prospective alpaca owners.  The magazine was a success from day one.

The next big marketing step by the industry was the creation of ad co-ops.  This was stimulated by the availability of marketing grants from the Alpaca Registry Inc. (ARI).  The registry had excess funds from the fees they charged importers for screening alpacas into the registry.  The fee was $500 per animal and we eventually raised over 1 million dollars that was used for marketing by various AOBA sponsored groups.

While I was on the ARI Board of Directors we funded grants that supported at least 4 different advertising co-ops.  Each of these co-ops bought full color ads in Airline magazines, Sunset, Country Living and other regional lifestyle magazines.  The success of their effort was immediate.  AOBA then picked up the ad co-op model from the regional groups and created the Farm and Ranch Guide, which is still an overwhelming success today.

AOBA also created a video about alpacas, which was widely distributed by the membership.  This video gave me the idea of creating an alpaca infomercial.  Camelids of Delaware and The Pet Center underwrote the cost of the thirty-minute tape, which was then played on cable stations and satellite T.V. to promote the early Peruvian import sales in Charlevoix, Michigan.  The value of putting alpacas on television was apparent from the first moment we ran the infomercial.  The television audience fell in love with alpacas and we began reaching a larger and larger market place.

AOBA soon produced a second alpaca infomercial, which was very successful, but they took the concept one very important step further and began running 1-minute commercials on satellite T.V.  These ads have been a tremendous success and have become the advertising medium of choice for the Farm and Ranch Guide.  Jerry Forstner of Magical Farms recently created the I Love Alpacas co-op which uses television ads to drive traffic to the co-op website.  This co-op is a private initiative that is funded by more than 100 breeders spending $5000 each.  It has been a huge success benefiting its members, non-members, and the AOBA website as well.

The Internet and alpaca websites have played an increasing role in AOBA’s and its members marketing programs.  The Internet is new (1995) but its importance cannot be overstated.  Anyone serious about marketing alpacas needs to consider a website as a marketing vehicle.  Almost every prospective alpaca owner does his or her research on the Internet.  At Northwest Alpacas 100% of our marketing strategy is founded on our website.  We register seminar participants, sell animals and market our farm exclusively on the Internet.

A DNA Verified Closed Registry

The Alpaca Registry Incorporated (ARI) is a major component to the success of the American alpaca market.  The purpose of any breed registry is to create value for its members.  Two fundamentals anchor the value of the ARI:  First, it is a closed registry, only the progeny of registered parents are eligible for registration and second, all parentage is verified by DNA.  Verified parents are one of the essential platforms from which breed improvement programs operate.  The ARI certificate documents a credible pedigree, with certain ancestry and presents over thirty pieces of information about any given alpaca.

Registry closure has been a big part of the success of our market.  The value of closure to alpaca breeders, large and small, cannot be overestimated.  The debate that ensued when I put forth the petition to close registry was “contentious,” to put a civil face on the free for all that preceded the closure vote.  The arguments that were made against closure included the following:

1. The gene pool of alpacas was too small to sustain improvement of the breed if the registry was closed.
2. That a second “open” registry would be established and that would be detrimental to the entire industry.
3. That closing the registry would be considered restraint of trade and therefore, illegal.

There were other side issues and personal agendas that entered the debate but the three points above were the deciding factors for most people. (One breeder actually maintained that closure would result in a euphoric spike in alpaca prices and that this spike would somehow skewer the entire market for alpacas)

WAS IT LEGAL TO CLOSE THE REGISTRY?

We can dispose of the last issue first.  It was and is legal to maintain a closed registry.  Most registries began their life open to the registration of unpedigreed stock and then are closed at a point in time that was in the best interest of a majority of their membership.  I retained a lawyer from Omaha, Nebraska who was general council for the National Association of Breed Registries.  He issued a legal opinion concerning the legality of closure and the issue was essentially settled in advance of the vote by the members to close the registry.  Closure means alpacas with unknown parents and progeny with parents that were not previously registered could no longer be registered in the ARI.  (As a practical matter this measure essentially closed the registry to imports but closure does not restrict anyone from importing unregistered alpacas.)

WAS THE GENE POOL TOO SMALL TO CLOSE THE REGISTRY?

The thought that the alpaca gene pool was too small to sustain genetic improvement had longer legs, as an argument against closing the registry, than the legal issue.  At the time that I petitioned to close the registry there were 15,164 registered alpacas, 2,042 suri and 13,122 huacaya.  Subsequent to the closure vote approximately 2,000 alpacas, in the process of being imported, were allowed to register under the terms of the closure petition.

I contacted several nationally renowned population geneticists and asked them whether the limited gene pool argument would hold water.  I was told that in a perfectly scientific sense that for a species to survive it required 50 genetic sources and for improvement of a species, 500 were required.

One of the geneticists, who was generally familiar with the alpaca industry, inquired as to the geographic sources of the registries foundation alpacas.  Once he was clear that the American herd was made up of animals from Peru, Chile, Bolivia, Australia, and Canada he observed, “that there may be the odd gene in South America or elsewhere that was not present in the United States”, but that “he doubted it”.  (If you would like to read more about the closure debate, please see: The Case for Closure, 1998).

When I was invited to speak in England, one of the issues that I was asked to address was the closure of the English registries (they have two).  The first question from the audience after I completed my presentation was whether their gene pool was large enough to sustain closure.  They currently have about 10,000 alpaca in England.

My answer to the English audience was the same one I made during the ARI closure debate in 1998.  The fact is that there are too many genes in our gene pool, not too few.  (A herd at Accoyo was never larger than 2000 with about 1\3 suri and 2\3 huacaya.  That herd has been closed since 1946.) The process of improvement requires that we cull defective or less productive genes from our alpacas.  Selection is the process of concentrating the gene pool, driving out the bad and leaving the good.  So at some point the improvement process dictates that we select for fewer high quality genes not more genes of unknown origin which is what imported alpacas represent.

TWO REGISTRIES

During the closure debate I researched the issue of duplicate registries serving a single breed.  There are very few examples.  The Arabian horse breed is one instance and the existence of multiple registries in that breed has been detrimental to Arabian owners and the value of their horses.

Breed associations control most breed registries.  Breed associations most often control the showing or exhibiting of their respective breeds and prohibit the showing of animals not registered with their association.  In the case of alpacas, AOBA certifies most alpaca shows in the United States and they require that alpacas that are being exhibited be registered with the ARI.  They also prohibit the display of animals at alpaca events that are not born of ARI parents or otherwise registered with the ARI and you cannot advertise unregistered alpacas in Alpacas Magazine.  These types of initiatives by the dominant breed associations generally act as deterrents to a second registry in most livestock industries.

At the end of the day the issue of whether a second registry would be started has been answered by history:  There is, until this day, only one alpaca registry in the United States.

THE BENEFITS OF A CLOSED REGISTRY

The truth is that it is in every American alpaca breeders self interest to have a closed registry for the following reasons:

1. A closed registry protects the value of member’s alpacas.
2. Registry members who are committed breeders reap the benefit of sales in a stable or appreciating market place.
3. A closed registry leads to accelerated alpaca improvement.

The first point, that a closed registry protects values is self evident to most people.  The protection is two-fold: 1) imported alpacas without verified parents are genetic black boxes which can introduce genetic defects into the national herd and they can also be vehicles for previously un-introduced diseases, and 2) a stable supply of animals leads to a stable market place.

GENETIC BLACK BOXES

I might be an advocate of or a willing participant in the import of alpacas if I believed it would lead to improving the breed.  The facts are that once a nation or group of breeder has a critical mass of genes, continuing to add more, particularly genes of unknown origin, to this pool only dilutes the effort to improve their breed.  A registry’s stock and trade is pedigree.  The more ancestors on a pedigree the more value it represents.  A pedigree with unknown parents, which is what all pedigrees for South American alpacas represent, is of far less value than a pedigree with parents, grandparents and so on.  Importing animals of unknown parentage or genetic black boxes can also be a genetic nightmare.

“VERMONT SHEEP”

The following excerpt is from Charles Massey’s epic animal breeding book, Merino, which chronicles the history of the Australian Merino and its development as one of the most profitable sheep breeds ever known.  Massey tells the story of the Vermont sheep which were imported from the U. S. by Charles McCaughey.  This incident of importer excess almost brought the mighty Australian Merino to its ruin, in only a few short years.

“Born near Ballymena in Northern Ireland in 1832, McCaughey arrived in Melbourne in 1856.  Deciding on a pastoral career during the rosy years of the late 1850s McCaughey bought a share of Coonong in Riverina in 1860…,

So when this enormously influential man turned his attention to sheep-breeding, it was little wonder that a multitude followed in his wake.  However, even the best analytical or scientific mind is no substitute for the personal attention, intuition and craftsmanship, combined with decades of close practical experience, needed to rise to excellence as a Studmaster.  Like so many intelligent men before and since, McCaughey thought there were short-cuts to breeding top balanced and productive sheep.

So by late 1885, and after such a brief experiment, McCaughey believed he had at last found the sheep he wanted.  Never one for half measures once his mind was made up, McCaughey left for America in 1886, with two accompanying American ‘experts’, E.N. Bissel and W. Chapman, to ‘pick the eyes out of its Merino studs’.  In two shipments he brought back 132 rams and 330 ewes from the best Vermont flocks, for which he paid the staggering amount of 25,000 pounds.  This bold move, in buying what for the Americans had now become expensive culls, can be judged as the action that catapulted Vermont sheep into the Australian limelight and so ushered in the fashion for ‘wrinkles and oil.’  McCaughey appointed Bissel his American agent and secured the services of Messrs E. D. Morrison and R. D. Clark, both of whom later came to Australia as active importers and stud-breeders with depot farms.  The floodgates were opening.

And so the Vermont craze gathered pace.  Following McCaughey’s extravagant import of 1886, several shipments followed quickly in the names of Bissel, Burwell, Morrison, Clark and others, all American ‘wrinkle’ breeders.  These shrewd agents, and E. D.  Morrison in particular, began to import ever-larger drafts of Vermont sheep to meet the steadily increasing demand, particularly in the 1890s.  By this stage the Vermont wrinkle craze had been completely discarded in America, though this fact and the reasons behind it were either hidden or unknown in Australia.  One American breeder summed up the situation by stating that, “The one redeeming feature that gave the Vermont breeder hope for the future was the export trade.  This was practically the only trade since 1890.

As a result of the propaganda spread by McCaughey and his supporters, a very dangerous situation developed, whereby a group of self-styled experts, in whom a little knowledge was a powerful and dangerous tool, came to exert an enormous influence but with out a proven record in the art of stud sheep-breeding.

The trend towards more and more, and tighter and tighter, wrinkle can be seen in sequential photographs of show sheep of the time, until by the 1900s the pursuit of corrugated-iron sheep had stripped the animals of any redeeming features.  They had become smaller, were narrow- chested; had shocking conformational faults such as bad pasterns, devil’s grips, sloping rumps, and virtually every bad body fault imaginable.  Their fleeces exhibited serious unevenness, declining quality and hair, not to mention excessive grease and low yield.  And they were losing fertility rapidly, a factor compounded by their deep flank and skin folds which made it hard for lambs to find teats.  They were in every way a disaster.”

This story from the late 1800’s closely parallels the alpaca imports in our recent history.  The importers as promoters enthusiastically proclaim the latest shipment as the world’s most elite genetics.  The buyers flock to their sales seeking a short cut to success.  The magic males from the sales are the subject of glowing ads.  In an effort to jump on the bandwagon breeders line their females up for service by the new “stars.” All of this is worship of unknown parents and untested males.

These imports of Vermont sheep represented only a very small fraction of the total sheep population of Australia.  It does not take much defective germ plasma to wreak havoc across a large national herd of livestock.

When people from other countries go to Peru or come to the United States looking for alpacas, the locals do not immediately think, “Gee, let’s sell them our best animals.”  The truth is they do what they can to ship their worst alpacas as far from home as possible.  Just as the Vermont breeders did more than a century before.  Livestock breeders generally attempt to retain their best, not sell them.

The truth is, there are no short cuts to breeding superior stock.  It has taken Don Julio Barreda more than 50 years to create his own line and he has worked with a small “closed” herd all that time.

STABLE ALPACA PRICES

A look at the English alpaca market illustrates what can happen to alpaca prices when a registry is left open.  Several years ago English alpaca prices were higher than they are today.  The importers were active in the market importing surplus Canadian animals, left over from the importers rush to sell into a strong Canadian market.  During this period most of the sales in England were captured by the importers at the expense of the domestic breeders.

Then a natural disaster hit the English market in the form of foot and mouth disease.  The market for animals of all types dried up and prices fell.  Now that the foot and mouth episode is in the past there is a firming or rising market.

This creates a dilemma for the domestic breeder in England.  If the market improves and prices rise to the point that imports will once again be profitable and saleable, the importers will move to capture the market.  They will promote their genetic black boxes as the greatest thing since sliced bread.  English breeders will reach for their wallets in the hope of purchasing a full compliment of those “magic bullet” foreign genes.

Then the market will fall back, as it has in other countries with open registries, and a period of digestion will take place.  Worse yet, if the market stays strong, the imports will increase in a frenzy of greed that will ultimately implode in an over supplied market.

This is not a commentary of good and evil, but an observation of the way all markets work.  If there is a low cost supplier (South America) and a high value profitable market (England, etc.) someone will move to exploit (importers) or sell into the high priced market with low priced goods.  They will continue until all possible profit disappears.

When importers work in a market, sales become concentrated in very few hands.  During the debate to close the U.S. market I remember researching the ARI database to determine the distribution of transfers by owner code.  Transferred certificates are the best indicators of sales because they are evidence of a change in ownership.  I was amazed by the results:  More than 90% of the transfers by the ARI were made by only five owner codes.  These owner codes were owned by importers.

Since the registry has closed, here in the United States, 100’s of owner codes are making transfers.  Another phenomenon occurs when the registry closes and breeders rather than importers, make sales.  Breeders tend to use at least part of their sales dollars to buy more domestic animals.  Importers spend their profits in the form of purchase dollars in some foreign land.  Their profits do not re-circulate into the domestic marketplace.

I ask each of you old-timers reading this article:  Have you ever sold an alpaca to an importer?  A closed registry spreads the sales and distributes the money amongst the breeders who build the marketplace.  And that’s the way it ought to be.

THE MODELS FOR REGISTRY CLOSURE

There are three primary models for registry closure:  the United States, Australia and Canada.  A look at each of these models and their alpaca marketplace is instructive for anyone interested in the impact of registry policy on the alpaca market.  You can decide which model you think is in your personal best interest.

The U.S. has had a closed registry since 1998.  The market has become stronger each and every year since the registry was closed.

Australia has maintained an open registry, with the exception of a brief period when they closed it several years ago, from the beginning of their industry in 1989. There have been multiple imports of alpacas over many years.  The price of alpacas, on average, has been in decline for several years.

At one time Canada (early 1990’s) had the highest priced alpacas in the world.  At that time they had an open registry.  The Canadian agricultural authorities suddenly changed their import and quarantine policies in the mid-1990’s to allow private offshore quarantines.  This made it very easy to import large numbers of alpacas in a short period of time.  Importers stormed their marketplace and it was inundated with Peruvian imports.  The prices of alpacas dropped like a rock.

The Canadians reacted to the deluge of imported animals by closing their registry.  Slowly over the next few years the market recovered.  The importers exported many of their un-salable alpacas to the next target of opportunity, England.  The animals in Canada that had been previously registered in the U.S. were sold into our market.  Supply and demand began achieving equilibrium and the Canadian market recovered.  Today it is getting stronger.

But it may be that the Canadians have not learned their lesson.  They have recently approved the following amendments to the Canadian Llama Registry (CLR), their registry of record.

CLAA BYLAW AMENDMENTS:

Bylaw Amendments 20.6; 20.7 and 20.9

These amendments are now in effect

Bylaw Amendment 20.6

20.6 (1) PUREBRED: – All Animals are eligible to be registered as Purebred if: (Emphasis added.)

1. 1. Both the sire and the dam are registered in the herd book of the association as either Foundation Stock or Purebred; OR
   2. The animal has no less than three generations of individually registered Purebred or Foundation Stock ancestors in a recognized foreign registry, and meets all other qualifications for recognition; OR
   3. If an animal is the result of breeding up, it has no less than 15/16 inheritance relating back to Foundation Stock or Purebred ancestry in the herd book of the Association or the equivalent of Foundation Stock and or Purebred ancestry in a recognized foreign registry. At least one parent must be registered Foundation Stock and or Purebred in the herd book of the Association.

20.6 (2) BREEDING UP: – Animals may be registered as percentage purebred, which have less than 15/16 inheritance provided that: (See Breeding Up table below.)

1. 1. All known ancestors are the same breed, and the subject animal has one parent registered as Foundation Stock or Purebred.
   2. Animals not eligible for registration may be recorded in the Registry, as 0%, for purposes of breeding up provided that all known ancestors are of the same breed and the subject animals meet CLAA minimum breed standards for the species or breed. The Board of Directors shall ensure that the animal complies with breed standards before recording. This will require screening to the standards. No certificate will be issued for a recorded animal. For the offspring of such an animal to be registered as percentage purebred, the subject animal must have been mated with a Foundation Stock or Purebred male or female of the same breed.
   3. Animals will not be eligible to enter the breed up program if the Applicant or the Association is aware of any genetic disorders in the animal, or any of its ancestors.
   4. Percentage purebred certificates: Certificates for percentage purebred animals shall be of a different color than those issued for purebred animals. The percent of inheritance shall be clearly displayed on the certificate.

Amendment 20.7

20.7 – 0% Animals: For the purpose of breeding up, an animal not eligible to be registered may be recorded, provided it meets the requirements outlined in article 20.6(2)(b).

RECIPROCITY

The first amendment deals with the issue of reciprocity.  For a full discussion of reciprocity see The Canadian Registry & ARI Reciprocity Issues: A History by Libby Forstner, the current president of the ARI.  Although the government amended the registry rules to provide for reciprocity I have been told that the registry members have not yet approved this change.  In any case I think reciprocity can be a slippery slope and the ARI should be very careful about creating similar rules if at all or ever.

BREEDING-UP

This scheme of having listed or un-pedigreed animals that can be bred up to 15/16 and then registered as purebloods is quite simply – a terrible idea.  This change is now the law in Canada.  (This same idea was put forward by alpaca breeders as a solution to alpaca imports in the U. S.  It was rejected by the ARI Board of Directors in the mid 1990’s.)  This amendment will create a second tier of inexpensive animals that have the apparent legitimacy of “a different colored certificate.”  The line between pureblood pedigreed animals will be blurred.

I spoke with a member of the International Llama Registry (ILR) board who was telling me that they felt one of the biggest mistakes that the Llama Registry made was maintaining a listing and screening process for unregistered llamas that allowed for grading up to pure bred.  The ILR scheme is similar to the one adopted by the Canadians for alpacas.  It was bad for llamas and it will be bad for alpacas.

I am curious to see whether the Canadian industry will compound their error by allowing grade animals to be shown or sold at auction.  As a matter of curiosity, I recently asked several Canadian alpaca breeders why they let this unfortunate set of events take place.  No one I questioned even knew it had happened.  I can only hope we never make a similar mistake in the United States.

With Canada, who sits on the northern border of the American market, cracking the door open to imports it will be interesting to see whether importers view this as a vehicle to create an alternate registry to the ARI in the United States market.  (Paranoia on my part?  Maybe.)

ALPACA SHOWS:  THE THIRD LEG OF THE CHAIR

The first alpaca show in the U.S. was held in Grass Valley, California in 1990.  There were about 60 entries.  From that humble beginning AOBA and its members have built one of the strongest legs of the alpaca market.

The first AOBA national show was held in 1992, at the Wool Market in Estes Park, Colorado.   There were approximately 100 entries.  As AOBA affiliates began to form across the country they soon began sponsoring shows.  Today there are shows in most states of the union and every year they grow larger.  The 2003 national show in Kentucky was the largest alpaca show in the world with 1,899 entries.

Americans love to show things, cars, dogs, coins, gems and even pet rats.  The horse business is almost entirely show and race driven.  We don’t race alpacas, but we love to show them and that won’t change anytime soon.  The value of alpaca shows both fleece and halter, is immense.  AOBA recognizes this and does an excellent job training judges, making rules and facilitating the show effort.  The alpaca show system will help sustain our industry for years and years.

ALPACA IMPROVEMENT: THE FINAL LEG OF THE CHAIR

Since the beginning of time, animal breeders, kings and peasants alike, have been fascinated with improving and multiplying animals.  Every stage of the improvement process is under the control of the breeder.  They decide who will become parents and who will not.  They decide who is mated to whom and how many times.  This power is seductive.

There is a race going on in the alpaca world.  Most breeders do not even realize that it is being run.  But this race has people in our industry at work everyday constantly thinking how they might move up in the standings.  The desire for alpaca improvement is a dominant thought in many alpaca breeders minds.  The fascination with improving our breed is the predicate for the strongest leg in our chair.  People love to improve their lot in life.

The alpaca improvement race is being run at many levels in the world today.  Australia competes with England, the United States, New Zealand and Canada and vice versa.  Everyone competes with Peru.  In the United States its East against West and small against large, and finally, breeder against breeder.

I have been judging alpaca shows in several countries for many years.  I recently returned from the 2003 Alpaca Fiesta in Peru where I had the opportunity to inspect many of the ribbon winners and champions.  I happen to believe that the United States is winning the quality race, but my fellow competitors, judges and friends from far off lands would surely disagree.

The race to improve the breed involves high stakes.  The best animals of a breed sell for more money, more easily than average or low quality animals.  A studious breeder that understands the fundamentals of animal breeding, genetics, and selection can literally win the sweepstakes by creating an elite male or a bloodline that is recognized for excellence.  The country that wins the race to create the most productive alpacas will certainly enjoy an opportunity to export their alpacas to emerging markets which develop in countries that are establishing the breed on their farms.

At another level breed improvement is an altruistic pursuit.  The more valuable a breed is to their shepherds, the better the care it will receive.  So by improving a breed and making it more productive, breeders can assure the long term well being of the animals in their care.

The chair that seats the alpaca market in the United States is solid, made stable by four strong legs: the industry marketing initiatives, the closed registry, the alpaca show system and breeders’ fascination with improving the breed.  The future, simply put, is bright, built on a strong foundation.  We will get it right and we will succeed.

Reproduced with permission from:

Alpaca Breeding Farm: Northwest Alpacas: raising suri and huacaya alpacas for sale, alpaca investment, and alpaca business plans for alpaca breeders and owners worldwide. Find more useful information at the Alpaca Library.