Investing in Alpacas
by Penny Van Hise
What does it take to own alpacas? A desire for a unique personal experience and a financially rewarding lifestyle. Alpacas radiate a calming and relaxing atmosphere and what is better than a healthy and less stressful lifestyle? Individuals interested in investment must have a willingness to take financial risks as does any business start-up. Other important assets include good communication skills and the ability or willingness to learn to market your animals, fiber, and finished products. There are several national and regional associations that assist herd owners with education, marketing, showing, animal registry, membership databases, public relation support, library services, health care and the list goes on.
So if you’re ready to diversify your financial portfolio, please read on.
Okay, so you might be interested – WHERE DO YOU START? First, why do you want alpacas? Do you want to have a full/part time business? What quality of animals do you want to invest in? Show, fiber, pet or combination. Do you already own property? Alpacas actually require lesser acreage than most animals. You can easily accommodate several alpacas on 5 – 10 acres. Perhaps you want the investment, but not the daily care, here’s the solution - many farms/ranches will board (agist) your alpacas for you at a reasonable cost. Development of a business plan is essential. To be successful in any endeavor, you must define your goals and objectives clearly.
The popularity and demand for alpacas has increased dramatically every year since their introduction out of South America in 1984. The United States herd today is more than 100,000. The national Alpacas and Owners Breeders Association (AOBA) has seen tremendous growth in the industry. According to the Alpaca Registry (ARI) the national herd is growing by 22% a year. Ownership numbers grew from 146 in 1991 to 2,919 in 2000. My research on AOBA’s website showed membership of over 4,000 farms/ranches in the U.S. in 2008. Alpaca ranches are in almost every state and the growth is sure to continue in other countries outside the U.S. – Canada, New Zealand, Australia, Japan, and recently South Africa. It appears that supply will continue to be limited because alpacas reproduce slowly (one cria per year) and in 1998 the registry closed to further importation.
Alpaca ownership has some good investment advantages like tax deferred wealth building, compound appreciation, and alpacas can be insured 100% against loss. Tax advantages include the use of depreciation, capital gains treatment, and for active owners, sheltering income from other sources by expensing farm related business items. We strongly recommend that you check into Section 179 Deduction and the 50% Bonus Depreciation Allowance. The IRS Publication #225, The Farmers Tax Guide, will also be worthy of researching. The Alpaca Owners and Breeders Association’s website also has information on tax benefits under "Financial Aspects" at
What are some potential sources of income? Of course, number one will be your animal sales. Other potential income may include some of the following: herdsire breeding services, agisting (boarding) for other owners, sale of fiber and finished products, brokering services for other owners, transporting and shearing services, ranch store, and alpaca by-products (fertilizer).
We can’t close without giving you some more points worth pondering… Alpacas are easy care, hardy animals with delightful personalities. People from all walks of life purchase alpacas for one or two reasons – financial investment and/or the lifestyle. Raising alpacas can add years to your life – most alpaca breeders say they would rather raise alpacas than anything else they’ve ever done before. This statement is so true for us. We encourage you to investigate the world of alpacas!
Sun Gate can be “your gateway to the alpacas lifestyle.” Contact us today!