Alpacas as a Livestock Investment

Around the world, alpacas are in strong demand. They are scarce and unique, and the textiles produced from their fleeces are coveted in the fashion centers of New York, Paris, Milan, and Tokyo. There are excellent profit opportunities and tax advantages for alpaca breeders.

Most alpaca breeders are in business for the long term, as they believe in the future of the industry. With the small number of alpacas currently available, there will be an extended and steady demand for alpaca breeding stock to continue to meet the demands of our growing industry for many years to come.

Alpacas have long been considered the aristocrat of ranch animals. But what truly makes them an excellent livestock choice is their charismatic manner—alpacas are truly a pleasure to care for. They do well on small acreage and produce a luxury product in high demand. Plus, your alpacas are 100% insurable.

Supply and Demand
The value of alpacas continues to grow based on the increased interest in ownership and the demand for their fiber. Supply and demand will continue to drive alpaca values.

The supply is limited based on several factors.

Alpacas reproduce slowly. A female generally breeds for the first time at 18 to 24 months of age, is pregnant 11 to 12 months and almost always has one cria.
Many breeders retain their offspring to build their herds.
The U.S. alpaca registry is closed to further importation to protect our national herd, which will further moderate U.S. herd growth.
The limited size of national herds in each country outside the U.S. will restrain growth somewhat.

Return on Your Investment
It is common for a single female offspring to sell at a price equal-to or greater than what the breeder investor paid for the dam. Returns of 30% to 70% are not uncommon in the alpaca industry. The high return is based on supply and demand and that breeders chose genetics to improve upon the dam.

Alpaca Compounding
Female alpacas generally produce one alpaca per year. The ratio of female to male is 50/50. Your female crias will be ready to breed between 14 and 18 months. Every time a female cria comes of breeding age, you are adding one more source for new animals to your herd. The larger the herd, the faster it grows—and so too does your fiber production.

Tax Benefits
A very important aspect of raising alpacas is the great tax benefits. An alpaca can typically be depreciated over five years, or 20% per year. Tax code Section 179 currently allows for the deduction of a capital asset up to $100,000 the first year the asset is acquired. The improvements made to your farm, farm equipment, the cost to care and feed alpacas, business travel, association fees and marketing-related expenses are deductions as well. Consult with a tax advisor for specifics that will relate to your situation.

Come for a visit and take home a Legend.