Advantages of Alpaca Ownership
What are the specific investment advantages of alpaca ownership?
- Direct expenses are tax deductible. Any of your expenses that can be directly attributed to your alpaca business are eligible as a legitimate write-off. This includes fencing, barns, feed, hay, vet expenses, tractors, insurance, travel, advertising, and more. Most states allow your land to be reclassified as agricultural with the applicable reduced property taxes. This is commonly referred to as the “Greenbelt Rule.”
- Depreciation is allowed over 5 years for alpaca breeding stock.
- Breeding fees for quality males range from $1000 to $10,000. This is an excellent opportunity for additional revenue for your alpaca business.
- Fleece and related products can be sold. You can determine the amount of work that you invest in fleece processing. The more work that you invest, the higher your profit margin. Alpacas are shorn annually and yield 3-10 pounds of fleece per year. Alpaca produces luxury garments that are very soft, lightweight and much warmer than wool by weight. The sales outlets include several alpaca fiber co-ops, cottage industries, internet and your farm store.
- AOBA research shows that a starter herd of 5 females and two males will grow to approximately 126 alpacas in 10 years. The income of each of these alpacas is tax-deferred until you actually sell the animal.
- Alpacas are a steady growth industry. There are no “puppy-mills” in the alpaca world since a female alpaca only produces one cria (baby) each year. Gestation is over 11 months, so the growth of the USA industry is slow but steady growth.
- The ARI (Alpaca Registry) is closed to further imports from South America. This protects alpaca investment from a flood of alpacas into the United States. This means the US herd of alpacas must grow quite considerably to meet the international demand for the luxury fiber.
- Alpacas are hardy pseudo-ruminants that are very efficient at metabolizing nutrition. Many more alpacas can be run on an acre of pasture than traditional livestock. This makes the alpaca perfect for the small farm of less than 10 acres. Since alpacas have 2 padded toes instead of a hoof, they are very gentle on pasture unlike horses or cows.
- Many farms sell alpaca manure as additional income. Alpaca manure can be placed directly on plants without composting without damage to the plants since it is very low in nitrogen.
- Eco-tourism has become very popular with many agricultural enterprises, and the alpaca industry is no exception.
- Alpaca are 100% insurable, so catastrophic losses can be minimized. The cost of the insurance is deductible as a business expense.
- An alpaca business can include selling products, breedings and alpacas. Services, such as consulting, alpaca training, agistment, and transporting, are also valuable sources of income.
- Alpacas live for 20-25 years, and a female alpaca usually produces one cria per year until she is very old. It is reasonable to expect that a female alpaca will produce 10-15 crias in her lifetime.
