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Here is another good summary from Belleau Wood Alpacas: |
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Why are alpacas considered to be the world’s finest livestock investment? For a number of reasons, alpacas are one of the best investments, livestock or otherwise, available today. You are investing in a commodity that has strong current demand and an incredible potential demand, it is insurable, and it offers numerous tax advantages. First, alpacas exhibit all of the traits that make any investment attractive; they are scarce and in high demand. Historically, alpaca values have remained constant and have made major contributions to the national economy of Peru, as well as several other South American countries. Currently, there are less than 50,000 alpacas in the U.S. (check with the alpaca registry for current numbers). Breeding stock has been in the U.S. since the mid 80s and prices have remained relatively stable since that time. Average prices on females range from a low of $7,000 for young weanlings to about $40,000 for a top quality female. These prices vary a great deal with the best of the best bringing drastically higher prices. One well-known Herdsire sold at auction in April of 2000 for $166,000 and another sold for $225,00 in October 2000! In 2001 and 2002, the prices are continuing to increase on top males. Alpacas are no longer imported from South America, so domestic growth will depend on the animals already in North America. Demand is also high in Canada, Europe, New Zealand and Australia. With support from an excellent national organization (Alpaca Owners and Breeders Association), the U.S. is poised to be a world leader in the alpaca industry. Because of the scarce supply, marketing efforts have been limited, and we have not even begun to create the potential demand for alpacas and alpaca fiber products. |
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Alpaca fiber is finer than cashmere and exhibits many qualities that make it more desirable than any other fiber. Textiles made from alpaca fiber, often referred to as angel threads, are known throughout the fashion capitols of the world. The AOBA fiber co-op is working hard to ensure that we will be able to create and fulfill commercial demands with domestically produced fiber. Livestock has been a primary investment since the origins of man and has very little dependence on technology. An alpaca investment offers an excellent opportunity to diversify your portfolio in the new millennium. Alpacas are insurable against theft and mortality. Theft is also rare because nearly 100% of North American alpacas are registered using a DNA blood type system. Without registration, the animal would be practically worthless as breeding stock. Currently, the only conventional investments that allow the principal investment to be insured are savings accounts, CDs and bonds which often exhibit a lower return on investment. Passive business partners also benefit from some tax advantages. Probably the most important benefit is that the value of your alpaca herd compounds tax free until you realize actual income from the sale of your stock. In this way, it offers many of the benefits that are so valued in IRA investing. The tax advantages from raising alpacas are very attractive. Purchased stock are generally depreciated over five years. Everything from equipment, to fencing, to vehicles and barns are set up on the appropriate depreciation schedules. Expenses associated with ownership are deductible from any income received. Tax advantages vary based on whether you are an active or a passive investor and whether you operate your farm as a business or hobby. For up-to-date tax laws check IRS publication #225 entitled The Farmers Tax Guide and consult with your accountant. |