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INVESTING IN ALPACAS

There are several ways that you and your family can create a secure financial future through alpaca ownership.

Alpaca Ownership
First, determine your goals for alpaca ownership. Would you prefer owning an inexpensive pair of pet quality males for fiber production or family enjoyment? Are you planning on becoming a part-time or full-time breeder? Do you wish to have hands-on ownership or investment only? Will you invest in alpacas for current financial returns or are you going to build a herd toward the day you retire?

Whichever way you choose to become involved, there is a plan for you. The alpaca industry is very young and represents a ground floor opportunity. Very few investments have the potential to reproduce themselves every year- as an alpaca does. Breeders can profit from staying small or growing into larger operations in the future. Nationwide, the average farm has 8-10 alpacas.

Hands On Ownership
Many investors are choosing to leave the boardroom and head for the barn. Alpacas ownership can provide a stress reduced, rural lifestyle while generating tax deferred wealth for the future. Raising alpacas qualifies for tremendous tax benefits. (see Tax benefits)

Investment Only
If you are not in a position to tend to the alpacas yourself but want to reap the rewards of owning them, there are options for you as well. You can purchase the alpacas and board (or agist them) where someone else can provide the care. Your investment is compounding at an amazing rate and the cost of board is tax deductible for income tax purposes. If you like, you can board them at a farm in close proximity to your residence so you can visit them whenever you choose.

Alpaca Compounding
Alpaca compounding is actually quite simple. Female alpacas produce one offspring every 11 to 12 months. The ratio of male to female is 50/50. Your female crias will be ready to breed between the ages of 16 to 24 months. Every time a female cria comes to breeding age you are adding one more source of new animals to your herd. You can also sell the female cria and purchase another female alpaca of breeding age, therefore, saving almost 2 years of time. This is alpaca compounding. The larger the herd, the faster it grows.

When a male cria is born, the options exist to sell him as a potential herdsire, keep him to breed to your unrelated females, or keep/sell him as a fiber-only alpaca.

Alpacas are hardy animals and the mortality rate is very low. However, death does occur and this may affect the return on investment. Your alpacas are fully insurable with a vet exam and a yearly premium.

Income From Fiber
Alpaca fleece is widely known as one of the world's finest fibers, but it remains very rare. For every 32 pounds of sheep's wool, less than one ounce of alpaca fiber is produced.

The herds outside South America are not generally large enough to support industrial processing. However, fiber co-operatives have emerged which offer a ready market for breeders. Alpaca is also treasured by cottage industries and many breeders sell to directly to local spinners and weavers. The price that you receive for your fiber usually covers the cost for caring for your alpacas for the year.

There are about 147,000 alpacas in the United States today, so the need for more farms is great in order to meet the growing demand for fiber.


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