Opinion on Current Investments in Alpacas

Submitted By: Michael Goldston (High Meadow Alpacas) Everyone loves a bargain. We aggressively shop for low prices on cars, clothes, whatever we fancy, and are delighted when we get a good deal. Yet when it comes to investments (including alpacas), we hesitate to buy when prices are low because we let fear get in the way, thinking prices may go lower. “Buy Low-Sell High” is one of the most well-known secrets to successful investing. Yet few people are able to do that. Why? Because fear and greed occupy opposite ends of the investment “risk/reward” spectrum, and it is emotionally challenging to be in the minority viewpoint (i.e. to be a buyer when most others are selling). Yet that is when the best opportunities are available! It is no surprise that most people lose money when investing, because they get too enthusiastic when times are good, and too pessimistic at the bottom…

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Who Buys Alpacas?

Alpaca breeders come from many walks of life. Increasingly, alpacas are becoming an important source of income for many people. Entire families are full-time alpaca breeders. Young couples with children might own three or four alpacas and enjoy caring for them. Retired couples, who have raised their kids, sold their business, and retired to the country, are often owners. The family whose members include a hand-spinner might own two or three animals for fiber production. Several breeders are veterinarians who have found the ownership of alpacas to be more rewarding than practicing veterinary medicine. Many herds are owned by families where one spouse has a city job, and the alpaca business is managed by the other on their acreage in the suburbs or the country. A large number of breeders are working couples who tend to their herd in the evening after work. There are even city dwellers who have…

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Introduction to the Financial Aspects of Alpacas

Why do people in so many countries call alpacas “The world’s finest livestock business”? For any business asset to be valuable, it must possess certain qualities that make it desirable. Gold is scarce, real estate provides shelter, oil produces energy, bonds earn interest, stocks are supposed to increase in value, and diamonds symbolize love. Alpacas share many of these same attributes. Around the world, alpacas are in strong demand, and people pay high prices for them. They are scarce, unique, and the textiles produced from their fleeces are known in the fashion centers of New York, Paris, Milan, and Tokyo. There are excellent profit opportunities and tax advantages available to alpaca breeders. Historically, the alpacas’ value has sustained ancient cultures, such as the Incas of Peru. Today, alpacas represent the primary source of income for millions of South Americans. History has validated the value of the alpaca. Livestock has been…

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Transporting Alpacas

You may think you will not be transporting an animal and do not need to be bothered with other state’s regulations. But you can be transporting an animal for many reasons, and need to be aware of all that is involved. If you are going to a show, transporting one for a purchase or sell, or to leave for a breeding, you will need to know that each state has specific regulations and how to find out what those regulations are for where you are going. In addition to state regulations, there are certain procedures you will want to follow for your farm and animals. For information concerning state regulations, call the Office of the State Veterinarian in your state. Make sure that any animal that is going to be transported from your farm, by you or someone else is healthy and has no problems before leaving. Minimize contact of…

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Heat Stress and Alpacas

Submitted By: Charlotte Goldston (High Meadow Alpacas) In the Southeast one of the things most dreaded by alpaca owners is heat stress, especially after the “Summer of 2007”. Heat stress can not only cause temporary or permanent sterility, it can be lethal regardless of type, sex or age of the Alpaca. After the unusual heat wave and high humidity in the Southeast this past summer, I wanted to share what High Meadow Alpacas does to prevent and cope with if it happens. This is certainly not what everyone will do or should do, but just happens to be “our” protocol. Having shade and shelter is imperative. And then you go to work from there. Providing electrolytes is one of the MOST important things we do, (routinely in any type of weather, but especially in the summer heat.) …Our alpacas prefer cherry electrolytes…and they are harder to find at our local…

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Tips for Prospective Alpaca Breeders

Submitted By: Jacki Robert (Alpaca Creek Farm) Before you decide to become a breeder We started our business just a few years ago, so I am very aware of the questions and concerns that you might have. Here are some tips that might help you with your research. Don’t be discouraged by not having any land. There are many great opportunities and options available that will still allow you to own alpaca and take advantage of the financial benefits Visit the AOBA website at www.alpacainfo.com It has a world of information. Visit regional and local association websites like the Southeast Alpaca Association http://www.sealpaca.org or the TN Alpaca Association (website pending). Keep a journal of questions, notes, thoughts, etc. Also keep track of any expenses you have during your research (these are tax deductible). Include any helpful contact names and websites that you encounter. Ask every farm you visit or breeder…

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Alpaca Values

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…

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Tax Consequences of Owning Alpacas

Those considering entering the alpaca industry should engage an accountant for advice in setting up your books and determining the proper use of the concepts discusses in this brochure. A very helpful IRS publication, #225, entitled The Farmer’s Tax Guide, can be obtained from your local IRS office. The goal of this discussion of IRS rules is to provide the guidelines for discussion with your accountants and financial advisors so that you can be more conversant in the issues of taxation as they relate to raising alpacas. Raising alpacas at your own ranch, in the hands-on fashion, can offer the rancher some very attractive tax advantages, It alpacas are actively raised for profit, all the expenses attributable to the endeavor can be written off against your income. Expenses would include feed, fertilizer, veterinarian care, etc., but also the depreciation of such tangible property as breeding stock, barns, and fences. These…

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Alpaca Supply and Demand

The market for alpacas has been moderated by the effects of relatively slow herd growth. As of late 2007, the total population of registered alpacas in North America is over 100,000. Supply will continue to be limited in the near future for a number of reasons: Alpacas reproduce slowly. A female generally breeds for the first time between 18-24 months of age, is pregnant for 11-12 months, and almost always only has one cria per year. Many breeders retain their offspring to build their herds. The limited size of the national herds in each country outside of South America will restrain growth to a small degree. The U.S. alpaca registry is closed to further importation to protect our national herd, which will further moderate U.S. herd growth. Meanwhile, demand for alpacas has increased dramatically every year since their introduction outside of South America (1984). Not only are there more breeders…

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