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An alpaca rancher with a small herd on a small acreage can expect to
harvest his animals' fleeces and sell their offspring profitably. The
value of alpaca fleece and finished products made from that fleece is
the economic underpinning of the future market for alpacas. Breeders
outside of South America are beginning to organize fiber co-ops for the
commercial processing of the fleece. Domestic fiber is often sold to
cottage industries that revolve around hand spinning and weaving. Each
animal will produce around three to ten pounds of fleece a year. Alpaca
ranchers sell their fleece in a variety of ways including raw fiber,
washed and carded fiber, yarns, and finished products, with lucrative
margins. Profits or fiber production vary based on each farm's model
for fiber sales.
The current alpaca industry is based on the sale quality breeding
stock, which commands premium prices. Female alpacas usually begin
breeding at between 15 months and 18 months of age, while most males
can successfully impregnate (or "settle") a female at about three
years. The females produce one baby per year (twins are uncommon)
during a reproductive life about 10-12 years.
Factors that influence individual alpaca prices include color,
conformation, fleece quality and quantity, age, and gender. Females
sell for more money on average than males, but herd sire quality males
have historically commanded the highest individual prices. Breeders
often prefer one alpaca color to another, however the parents' color
does not necessarily guarantee a cria of the same color. There are many
accepted theories regarding alpaca color heritability, and more
research is needed to further our understanding of this issue. Of more
importance to most breeders is the overall physical soundness, or
"conformation" of the animal. In addition to color, fleece, density,
uniformity, fineness, luster and staple length will also affect value.
Well-conformed alpacas with superior fleece characteristics sell for
The range of value for females has remained fairly consistent during
the two decades that alpacas have been available to the public in North
America: generally between $12,000 and $25,000. Females with unique
attributes have been known to sell for $50,000 or more. Proven,
top-quality herd sires typically sell for $20,000-$50,000, and the
highest quality males with unique characteristics or exceptional
offspring on the ground have sold in excess of $150,000. (The current
world record, set at auction in 2002, is $265,000).
Many breeders start with several breeding age females and perhaps
one male. Other new breeders may elect to start with several young
animals or a breeding pair. There is an approach suitable for your
level of interest and financial position. Alpacas are much like
diamonds. The market pays a premium for the finest examples of the
breed, and a beauty is also in the eye of the beholder.
benefit of owning alpacas relates to the concept of compounding.
Savings accounts earn interest, which if left in the account, adds to
the principal. The increased principal earns additional interest,
thereby compounding the investor's return. Alpaca breeders also witness
the effects of compounding over time. Alpacas reproduce almost every
year, and about one-half of their babies are females. When you retain
the off-spring in your herd, they begin producing babies. This is
referred to as "alpaca compounding."
Tax-deferred wealth building is another "alpaca advantage". As your
herd grows, you postpone paying income tax on its increasing value
until such time as you begin selling the offspring. Most breeders elect
to sell all or some of the annual offspring production for practical
reasons, such as recovering their initial cash flow, acreage and
building limitations, and time constraints.
Alpacas are also fully insurable against theft and mortality.
Insurance can be purchased for your stock regardless of age. Average
insurance rates are 3.25% of the value of the animal, or $325 for every
$10,000 of insurance.
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