Investment Potential

Alpacas are considered the world’s finest livestock investment. Sales from fiber and their products support many farms. Breeding and selling of breeding stock provides an excellent return on investment.

The demand for alpacas is much higher then the current supply and will continue for several reasons. Alpacas reproduce slowly, having only one baby (cria) per year (twins are uncommon). Alpacas are a relatively new venture for many people, so breeders often keep the offspring to build their herds. The US alpaca registry is closed to new importation, which moderates the herds that are here.

Owning alpacas has wonder full tax advantages. An alpaca can be depreciated over a five year period at 20% per year or section 179 of the tax law allows for up to $100,000 in deduction in the first year that the asset is acquired. Current expenses are deductible including fences, shelters, vet bills, feed, conferences , travel and many more. Consult with your tax advisor about which applies to you.

Many alpaca breeders are in the herd-building stage, sometimes referred to as alpaca compounding. If you start with two pregnant females, your herd will be four when they deliver. The next year, after delivery they will be six. If one of the first two were females then in year three your herd will be nine. Your investment has grown by the size of your herd but you can postpone paying income tax until you begin to sell the offspring. Due to the high demand for these wonderful animals, if you choose to sell the offspring, many breeders can almost as much for a female cria as they paid for the mom.

Alpacas are an investment that provides a renewable resource (their fiber) and relaxing to watch as it grows. They can be insured against loss. They provide hours of enjoyment as you watch the babies run and play. Can you say this about your present stock?