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Investing in Alpacas

Why invest in alpacas?

Exciting lifestyle opportunities can be gained from participation in rural activities that also generate income. Your first step towards a semi-permanent or even a permanent rural lifestyle can be taken when you become involved in alpaca ownership. A herd can be built-up over time while you continue to pursue existing business and career activities. A permanent move to a rural lifestyle can be taken once the herd is established.
A major benefit of alpaca ownership is based on the concept of compounding. Alpacas reproduce almost every year, and about half of their offspring are females. When you retain the female crias (babies) and allow them to reproduce, this is alpaca compounding.
When approached as a business and in a serious manner, the potential earnings from alpacas are significant. Advanced breeding techniques are now producing crias that break existing sales records. If quality crias are produced and sold into strong market demand, the establishment costs of a herd can be quickly recovered.
As your herd grows and increases in value, you are able to postpone paying income tax until such time as you begin selling offspring. This is quite an advantage over other investments.
Significant tax benefits are derived from certain deductible expenses. Such deductions may be used to offset income and earnings from other sources.
Unlike a lot of investments, it is possible to insure alpacas against various risks including attacks by dogs, accidental death, sickness, etc. This can be particularly important if you are transporting alpacas to shows or for mating purposes.
There are basically two ways for you to invest in alpacas: outright purchase or a joint venture with friends, relatives or even us. It is possible to own alpacas and keep them on someone else's property. This is called “agistment”, and is a very popular form of ownership, particularly in New Zealand. Agistment offers you the enjoyment and investment potential of alpacas when you don′t own a property suitable to keep them on.

Outright purchase  

You can purchase alpacas from us or we can help you find suitable animal(s) to purchase from other members of the Alpaca Association of New Zealand. If we don′t have what you are looking for, we can find it for you.
Wethers typically cost between $800 and $2,000, weanling females cost between $3,000 and $9,000, pregnant females cost between $4,000 and $14,000. The cost of stud males can be just about anything between $3,000 and $200,000. In all cases, the difference in price depends on fleece characteristics, pedigree and value of a particular alpaca to the seller.
Our female alpacas over the age of around 13 months are generally pregnant except for the first couple of weeks after giving birth. This may sound hard on the females, but it is that way in the wild. Most breeders wait between one and four weeks before re-mating the females. Our research suggests that 16 to 21 days is the optimum period. Crias are kept with their mothers until they are around six to eight months old. If you decide to purchase a pregnant female, the deal would probably include a cria at foot (a baby alpaca that is still being nursed), or you would have to wait until the cria is ready to wean before taking delivery of your female.
When purchasing a mature female alpaca, therefore, it is typical to purchase a pregnant female (2 in 1 package) or a pregnant female with a cria at foot (3 in 1 package).
We wouldn′t sell you one alpaca unless you already have at least one already on your property. Alpacas are very sociable animals and don′t do well on their own.

Agistment  

If you purchase alpacas from us and you don′t have a property suitable to safely graze them, we can look after them for you.
You may decide to buy one or two alpacas initially and slowly build up your own herd. This is another instance where keeping your animals on our property may be the right thing to do. Once you have (say) three or four alpacas and you have a suitable property of your own, you can move them.
If you decide to have us look after your alpacas, the ongoing costs to you would be a quarterly agistment charge of $25 plus any shearing, veterinary charges, vaccinations and medications at their cost to us.
Decisions as to whether to mate your female(s) and when to do it and which stud to use are all yours to make, although we can offer guidance. The fleece from your animals is yours to use or sell as you see fit, or we can include it with our fleeces and pass your share of the income back to you.
You would be welcome to visit your alpacas whenever you like. We are sure that you will want to see them and show them off to friends and relatives. All we ask is that you let us know in advance.
Animals on our property have contact with “two-legged” critters on a daily basis. We gather them all up for visual inspection and give them a treat every day, rain or shine.
We can also halter train your animals and/or get them ready for showing, etc.

Joint venture  

Since we have confidence in alpacas as an investment, we are willing to invest in one or more alpacas with you.
As long as you agree to have us manage them, we will invest between 25 and 75% of the cost of each animal you decide to buy. We can either sell you a share in one or more of our alpacas or we can pool our funds with yours and purchase some animals that meet our mutual requirements.
Your only ongoing expenses will be a quarterly agistment fee of $20 plus your proportionate share of shearing, veterinary charges, vaccinations and medications at their cost to us.
Of course, you will receive a share of the income derived from fleece sales on a pro-rata basis according to your investment in each alpaca.
Your decision to let us manage joint venture females gives us the responsibility for keeping them pregnant to the best males we are able to identify. Many times, this will mean paying a stud fee to the owner of the male used to mate your female. You will be responsible for your share of such stud fees. If we use one of our own studs, there would be no charge to you.
Let′s say that you decide to invest in a pregnant female alpaca that cost $8,000. You make a decision to go in on a 50/50 basis with us, investing $4,000 of your funds. If things go well, we could have a female cria born several months later. Although the objective is to build up the numbers by retaining female progeny, you may decide that want to sell your half of the investment. All we ask is that we are given the opportunity to “buy out” your share at whatever you are offered by someone else. Alternatively, we both may decide to sell either the original female or the cria, withdrawing our funds and still having one female as an investment at little or no cost.
Male progeny are generally sold at weaning time, about six months of age. If we feel that a male has stud or show potential, we may wait and show him at one or more of the A&P shows around the region. The objective of doing this is to try to get more than “wether price” for him. As a wether, we can expect between $500 and $2,000, depending on several factors. If his fleece is exceptional and he has won show ribbons, we may get closer to $5,000 for him. If he's of exceptional quality, we may have a $15,000 to $25,000 stud male on our hands. The proceeds from selling male progeny will be distributed according to the proportions of each of our investments in the original female .

Breeding/Mating  

This is a good point to mention the cost of getting female alpacas pregnant. To date, we have used the best studs that we are able to find. In this case, “best” typically is based on fleece quality (density, fineness, etc.) and conformation. Until recently, this has meant “renting” a male stud. However, we have just purchased our first quality stud male and hope to have second one working on our farm in 2005.
There is little to be gained by using a male that isn′t significantly better than the females he is going to mate. As a general rule of thumb, the progeny resulting from a mating will be somewhere between the quality of the male and the quality of the female. So, you can see the logic of using only the best males.
If one is going to use external stud services, there are two ways to accomplish the mating process. Either the females need to be sent to the male or the male needs to visit the female. There are advantages and disadvantages to both methods.
If the female is sent to another property to be mated, she needs to stay there for about 60 days. Moving her before she has been pregnant for at least 60 days can result in the loss of the embryo. If the male comes to visit the female on our property, the male has to come back two weeks later for a “spit-off”. This is a test used to determine if the female is pregnant. If she′s pregnant, she will spit at the male. If she isn′t pregnant, she will be receptive to another mating. It′s all very scientific!
In either case, the cost of getting females mated by external males is typically between $800 and $2,000. Generally, the cost is in direct proportion to the quality of the male and/or his offspring. This is the reason why the cost of pregnant females is fairly high, as it usually includes the cost of the mating.