Are alpacas an investment or a business? The answer is both.
As a business endeavour alpacas rate very highly. They require little infrastructure, are inexpensive to feed and easy to care for. The cost of increasing your inventory is not only low but also very exciting when the babies start arriving.The return on invested capital it high but best of all alpacas are fun, relaxing and provide a healthy lifestyle for the whole family. They are a huggable investment.
Some alpaca businesses incorporate a ranch store as part of their business plan while others may offer an alpaca training service, breeding services or agistment.
Women make up a high percentage of alpaca owners and often play a pivotal role in the family decision to "get into alpacas." The ease of handling alpacas is attractive to women, however it's their sense of fashion and appreciation for the alpaca fibre which often figures prominently in the decision to become an alpaca owner.
When someone refers to alpacas as exotic livestock I feel compelled to point out that alpacas may well be the oldest domesticated livestock on the planet. Llamas and alpacas have been a source of food, warmth and transportation for humans for thousands of years. They still seem exotic to us because they haven't been resident in North America for very long &emdash; about 10 to 15 years.
The market will never be flooded with alpacas as they reproduce slowly &emdash; one baby per year and many breeders retain their offspring to build their own herds.
Less than three million alpacas exist worldwide and the importation of new foundation stock from South American is very restricted as well as difficult, risky and expensive.
The alpaca registries in both the U.S. and Canada are closing to any new stock from South America. As of December 31st of this year, all alpaca purchases in both the U.S. and Canada will have to come from the herds of existing breeders.
Demand for alpacas has been increasing steadily since their introduction outside of South America and we have barely scratched the surface in North America for potential owners.
Industry associations are nearly doubling their membership each year as more and more city-stressed people look for an alternative lifestyle with a source of income to support the change. Alpacas offer both.
We became interested in alpacas as an early retirement option and a chance for a healthy rural lifestyle. We have never regretted our decision and just wish we could afford to purchase more stock. Our tongues almost touch the ground as we drool over the beautiful animals on the ranch of International Alpacas here in Duncan.
When I attended the Banff School of Advanced Management our motto was "adapt or perish." This motto is particularly true for today's farmers. Traditional farmers who have worked their land for generations are now finding the need for alternative land use and/or supplemental income. Some of these farmers are looking to alpacas because of their ease of care and good income potential.
Alpacas are hardy and adaptable and thrive in all climates. They are gentle, very safe around small children and easy to handle.
The alpaca industry is booming in Australia because of the earth- friendly nature of these animals. Alpacas have padded feet that won't destroy delicate terrain and they clip the pasture grass rather than uprooting it as some other species do.
To borrow a horse term, alpacas are easy-keepers. They eat between 1.3 and 1.6% of their body weight per day or in dry measure about 650 to 800 grams of forage. Five to seven alpacas can be kept on one acre of land.
Alpacas share a common dung pile, making clean-up easier and lessening the chance of disease as they don't eat around their dung pile. Alpacas do not require any elaborate housing &emdash; just a three-sided shelter and some good fencing to keep out predators
Alpacas offer an average 30 to 35% return year after year and an alpaca investment is fully insurable (with the recent roller- coaster ride of the stock market many people are wishing their stock was ensured).
Costs associated with an alpaca investment are tax deductible (including boarding costs). Cost of stock purchase can be written off against earned alpaca income once you start selling. There is also the potential for a farm tax rate from raising alpacas.
A very attractive aspect of an alpaca investment is "alpaca compounding. Every year while your female gives you a new baby, your investment grows but it does not attract any tax until you start to sell your animals. An investment of $50,000, being two pregnant females, can be turned into 84 alpacas valued at more than $1,000,000 in just 10 years.
No matter how you cut the deck, fibre is still the underpinning of the alpaca industry. Although sales of breeding stock is where the money is right now in alpacas, the goal down the road is for our own textile mill. It will take an estimated 50,000 alpacas to keep a mill working full time, so we still have a long way to go.
The demand for alpaca fibre is insatiable. Peru, the main exporter of alpaca, cannot supply enough alpaca fibre to fill the orders that come in from around the world. The qualities of alpaca are already recognized world-wide so there is no need to educate the consumer to a new product.
An important part of alpaca ownership which is often overlooked is the aesthetic and psychological value of alpacas. These curious creatures are beautiful to look and a joy to watch. It makes you feel good just watching the babies frolicking in the field. Alpacas are also intelligent and can be taught to halter and lead. A real biggie for me is that alpacas do not need to be "killed" in order to realize their value.
Is it any wonder that alpacas are referred to as "the World's finest livestock investment?"