Alpacas present a very unique investment opportunity. As with any investment you will make, there are certain risks. Likewise, as with any investment you should do your homework and try to make the best possible choices with your dollars.
Choosing alpacas is like picking stocks to invest in. You try to buy low and purchase something that will bring a high yield over time. It is important to understand that alpacas are not a short term investment. While there are certainly cases and opportunities where someone could purchase an alpaca at a low price and then in a matter of months resell the alpaca for a profit; these would be the rare and not common cases. You should consider your investment based upon a long standing model for success in the industry.
Female alpacas are one investment segment. A female will produce at best, one cria a year. On average, there is a 50/50 split of female to male ratio. Thus if you are looking to grow you herd, four years of production would likely produce two females and two males. The males are a subject we cover a little later. For now, our focus is on females. Some breeders opt to breed a female at one year of age. Most wait a minimum of 18 months and others, like Safe Haven, wait till a female is two years of age to breed the female.
As there is not way to truly predict the outcome of breeding, we can generalize here and you can can adjust for whatever scenario you prefer for your business plan. assuming in four years of production your first and third year produce female off-spring. Your first female off-spring would enter your breeding program around two years of age. Then have her first cria at three years of age. Your second female cria is being born as your first enters you breeding program. You now have three more years before #2 produces her first cria.
The point here is that depending on your business model, you must understand that you will have opportunity to sell or increase your herd; those opportunities will take time. Since crias are rarely sold, your opportunity will come with a yearling or bred female.
Male Alpacas:
More than a few breeders are going to disagree with the follow statements. There are about an equal number that will agree. Once you become a breeder, you will have to choose how to handle the issue of males for yourself.
Male alpacas make up around 50% of the live crias each year. This means that eventually you are going to have male alpacas on your farm that you cannot breed to your females. At best 10% of the males are high enough quality to move on and become "Herd Sires" for another breeder. For the purpose of this education, we will say 10% though many will say it is more like 3-5%.
A top quality proven herd sire can bring a very high price. Easily over $50,000 in a auction or private sale. Keep in mind this is a high quality, proven male alpaca. There are also opportunities to sell a male as a junior herd sire, for less money but a quicker turn around. A junior herd sire is sold for less, because the buying breeder takes the risk of proving out the male. There is a chance that regardless of genetics and the junior herd sires look today - that he will not be a breeding quality male later or produce quality off-spring.
The issue for breeders is this : if you have two females producing crias for ten years you will end up with ten male alpacas on your farm. At 10%, only one of them will be herd sire quality. That leaves you with nine males that are non-breeding or pet quality alpacas. As noted in the graph to the left, pet quality alpacas sell for around $500.00 each. An issue our industry faces; what do we do with all of the males? As a breeder, you will face this issue yourself.
As a breeder you can maintain the alpacas for fiber (fleece). Many breeders do just that. Others sell them as pet quality. There are also those that will have unwanted males put down by a vet.
Our goal here is to let you know as a breeder,
this is part of raising alpacas in America. In Peru and other
countries alpacas are meat animals, this is not the case in the USA.
When developing your business plan, know that you will need to account for
the males on your farm.
| Female | $8,000.00 |
| Male | $500.00 |
| Male | $500.00 |
| Female | $7,500.00 |
| Female | $10,000.00 |
| Male | $10,000.00 |
| Female | $6,500.00 |
| Female | $500.00 |
The purpose of using this graph is to give you an example of how you can purchase on female and make money from that female through the sale of her off-spring. Using simple math : if you purchase a bred female for $10,000 - she should pay more than 4X her value over a 8 year period of time.
Obviously, higher end alpacas sell for higher prices, therefore this model should be used as an example only. The price and value of alpacas is always in a state of flux. Supply and demand plays a roll in values and sales. However, alpaca owners control the price point of alpacas. We are not regulated on controlled by anything other than our own desire to maintain high value.
With the above information in mind, the investment potential of alpacas is very favorable. It is important to note that our industry is still growing. As long as alpaca breeders through our national and local organizations continue to market and control our pricing, our industry will remain strong for years to come.