For many people "old" often implies"solid" and this surely applies to an investment in alpacas.
The ancient Incas knew the value of their alpacas. Their lives revolved around these gentle animals which figured prominently in their religious ceremonies. Inca royalty clothed themselves in garments made from alpaca.
Because of their hardy nature, alpacas flourished on the sparse vegetation of the high mountains of Peru and the number of animals owned indicated the wealth and status of the owner.
It is now possible for you and your family to follow the example of this ancient civilization and create a secure financial future through alpaca ownership.
You can enjoy a serene rural lifestyle tending your herd on your own acreage while generating tax deferred wealth for the future. Alpaca ownership qualifies you for the farm tax rate on two- to 10-acre parcels when you generate $2,500 per year in income. Things get a little more complex for larger land holdings. Alpacas are zero rated for GST purposes so you can claim back the GST paid on all items related to your herd.
Maybe you are not a farmer at heart but recognize the solid investment that alpacas represent. If so, you may opt for an arms-length investment in this emerging livestock industry by purchasing animals and boarding them (agisting) where someone else provides the care. Your investment is compounding at an amazing rate and the cost of board is tax deductible for income tax purposes.
If, like most people, you fall in love with the animals, and want to spend time around them but their daily care requirements are not suited to your lifestyle, that's also possible. You can own alpacas and visit regularly while boarding them at a nearby ranch. This is called agistment. You are still building tax-deferred wealth and can claim the costs associated with your investment against your income. There are many ways to win from alpaca ownership.
Alpaca compounding is a very simple concept.
Female alpacas produce one offspring about every 11 to 12 months. The ratio of male to female is about 50/50. Your female crias will be ready to breed between 14 to 18 months of age. Every time a female cria comes to breeding age you are adding one more source of new animals to your herd. This is alpaca compounding. The larger the herd, the faster it grows.
When a male cria is born the option exists to sell the animal or keep him as a companion or fibre animal. If this cria is truly exceptional you may wish to sell him as a herd-sire prospect or keep him to use on your non-related females.
Alpacas are hardy animals and the mortality rate is very low. However, death does happen so this eventually may affect the return on investment.
The following graph shows compounding of your herd over a ten-year period. You begin with just two pregnant females.
Fibre production is the economic underpinning of the alpaca industry for the future. Alpaca fleece has all the right qualities to be one of the finest fibres in the world but is still quite rare. For every 32 pounds of sheep's wool, less than one ounce of alpaca fibre is produced.
The herds outside of South America are not generally large enough to support industrial processing, however fibre co-operatives are beginning to emerge which offer a ready market for breeders. Alpaca is also coveted by cottage industries and some breeders have arrangements with local spinners and weavers who purchase their fleece.
Some people invest in alpacas just for a secure source of fibre for their own cottage industry. However you choose to dispose of your fibre, the price that you receive usually more than covers the cost of caring for your animals.