There are lots of alpaca raisers who are in it for the money, because it's a good investment, with steady and sure returns. Also, if they have prior experience raising herd cattle, like sheep, they will already have the land and set-up required, making it easy for them, to embrace the alpaca lifestyle. In this article, I have highlighted some facts and figures about raising alpacas.
Your investment will grow rapidly, if you can adopt the lifestyle for 5 to 10 years. Though money will come from livestock sale, stud/sire fees, fiber sales, and product sales, most of it will generally be from livestock sales.
Because most of your income comes from livestock sale, you will need to reach a critical mass of 15 to 20 alpacas before you can get substantial income. Before this, you won't have enough animals to maintain reproduction/ growth rates, if you were to sell off some for profit.
Every state offers a number of tax benefits and write-offs. So much so, there are many tax situations in which individuals getting into the business can ‘let the government buy their alpacas for them’. How much you invest in a quantity of livestock to start with, and how intensely you embrace the lifestyle will determine how soon you reach critical mass.
You don't necessarily have to have the land, or the money in the bank to get started. Most breeders offer options for boarding ("agisting") and financing your initial alpacas. You can (and probably should) insure your alpaca investment at an approximate cost of 3% of the value of your herd, per year.
You can generate a 6-figure income per year, if you grow your herd to 35 to 40 alpacas; some farms do more, and reach seven figures too. If you are in it only for the money, you might be better off doing something else; if you like the lifestyle, the money will also compensate you accordingly.
You need to ask some soul searching questions yourself, before you proceed with this investment idea.
To start with, do you see yourself adopting this alpaca lifestyle at least 3 to 4 years down the road? How soon do you need to reach critical mass, to generate significant income - this will impact the number of alpacas purchased initially - (sometimes the breeder will finance your first purchases).
Do you have the appropriate land to raise a number of alpacas? You need around one acre for every seven alpacas; often breeders offer to board alpacas till you find and purchase your land.
If you have the land, do you have the time and money to set it up? One time set-up costs for fencing and building a barn/ shelter for a 5 acre farm will be between $10,000 to $12,000 . Smaller farms will cost less; you may consider boarding initially if you wish to defer this expense.
Do you have the necessary knowledge and the available time to justify this level of investment? Novices may start with a smaller number of animals, while learning to raise them.
Are you willing to put in the time required to consult an accountant and do some financial planning, etc. , to make it a profitable venture?
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Richard Runion is the President of Geostar Publishing & Services LLC. His latest weblog on Alpaca rearing is fast becoming popular, as it is comprehensive and well-researched.