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Alpaca's roots also go back to the Inca civilization, where alpacas were considered a "prize." Their coats make the finest quality wool. Alpaca fiber was woven into robes used by Inca royalty. They also provided food, fuel, clothing, and transportation for this culture in an otherwise extremely hostile environment. Alpacas still thrive in the harsh climates of the Peruvian, Bolivian, and Chilean highlands where scorching temperatures in the day plummet to sub-freezing at night. They prefer low humidity and altitudes between 13,000 and 16,000 feet. At low altitudes, their wool is often of poorer quality. Nevertheless, they are well suited for conditions in the US and are being bred in at least 44 states (1997 estimates).

Alpacas are small compared to llamas, approximately 36" at the withers. Piebald color patterns are much rarer than in llamas, and alpacas usually have a tuft of hair on their forehead. Their life span is 15 to 25 years. Their weight can range between 100 to 175 pounds (approximately one-half to one-third the size of a llama). Their gestation period is approximately 11.5 months. Their birth weight is between 15 and 19 pounds and the babies (cria) can stand and nurse within 30 minutes to one hour after birth. They also have a very low infant mortality rate.

The males produce approximately eight pounds and the females about five pounds of easily marketable wool fiber from their coats per year. The fiber comes in approximately 22 basic colors with many variations and blends. It has a cellular structure similar to hair and is more resilient and much stronger than Merino sheep wool. It is highly sought after in Britain, Europe, and Japan. The cria fiber is extra fine and lustrous and commands a higher selling price. Their wool quality is only slightly lower than the vicuna. The black coats are usually the heaviest. The Suri breed has finer, thicker, and longer hair and provides up to eleven pounds of wool per year, but the breed has a greater susceptibility to parasites.

In South America, shearings are usually done every two years before the rainy season in November and December. After seven years of age, alpacas are used primarily for meat. In 1972, there were about two million living in Peru and 50,000 in Bolivia.

Alpacas are inexpensive to feed (about $1 per day per alpaca). This is about the same cost as a large dog. They have three stomachs which enable them to be very efficient at digesting what they eat. They are more fastidious feeders than llamas, being very Earth-friendly by grazing meticulously throughout the pasture. They prefer free range pasture to confinement in a stall or barn. They have sensitive feet and prefer soft, moist ground with tender grasses. They also enjoy pools and puddles for wallowing. A lack of adequate ground moisture is thought to lead to a fatal foot disease and rainless years often lead to higher mortality rates. No special food is required for them except in winter or in late pregnancy when all they need is good quality hay and low protein pellets. Alpacas will spit on one another if sufficiently angered, but will rarely spit on people.

One acre will provide ample room for five to ten alpacas, much more economical than most other types of livestock. Any fencing that may be required is usually to keep predators out of the pasture versus keeping the alpacas in. Simple shelters will suffice, usually only requiring a three-sided enclosure or a lean-to. Alpacas usually defecate in fixed areas and avoid grazing there, keeping parasitic infestations low. Their manure also makes an excellent fertilizer.

They have a high world market value between $8,500 and $25,000 per animal; a breeding age female goes for $15,000 to 25,000 (1997 estimates). The females can breed from about six months to one year of age and foal in the rainy season. In this country, they can be insured and depreciated from the owner's taxes. Other tax advantages include expense deductions and deferred recognition of accumulating wealth.

There are relatively few of these animals in North America (less than 8,000 in 1996). They were first imported to the US in 1984 and spread quickly to Canada. There have been limited numbers allowed for export from South America for reasons such as restricting their export and animal health problems.