Any alpaca experts care to explain what I just witnessed?

They have a natural inclination to grind their teeth. Their lower teeth constantly grow throughout their lives, so if they're not grinding them enough while eating, they will do stuff like this so that they don't become super uncomfortable. Also, they don't have upper teeth, only lower ones. The lower teeth grind food against the upper palate, so if they get too long, or have any sharp bits, it is painful for them to eat.