How much does an alpaca cost, and why?
Value is somewhere between the eye of the beholder and the holder. A proven (proven to bear cria in the past) female typically sells for between $15,000 and $25,000. This is a female of fine quality that will significantly contribute to the value of the U.S. herd with this years’ cria. Maiden, older, and lesser quality females can be purchased for $10,000 or less. Superior show winners with impressive bloodlines can sell for $40,000 or more.
Breeding quality males vary widely in price depending upon their bloodline, show history, quality of cria produced, and the presumed ability to generate breeding fees in the future. Most breeding quality males can be purchased for under $40,000. However, the current record price at auction is $750,000.
What would possess someone to pay that much for an alpaca? Well, consider the following…
- Alpacas are rare
- Demand for alpacas exceeds the supply
- Artificial insemination is impractical
- Females almost never have twins and the gestation period of an alpaca as about 11 ½ months
- Females can produce throughout their 20+ year lifespan
- Imported alpacas can no longer be registered in the U.S.
- Many owners are in the process of building their herd size and therefore not selling their annual production
- The fiber and conformation qualities of the U.S. herd are improving due to controlled breeding programs
- Since the beginning of the alpaca industry in this country, the average prices have risen. The maximum prices have increased dramatically.
A female purchased for $22,000 producing cria each year selling for $15,000 as juveniles has quite the return on investment. Even with 15% devaluation in the market during this time frame, the investment is returned with the birth of the second cria. But the fact is, alpaca prices are increasing, not decreasing. A premium herdsire commanding a $2500 breeding fee can generate $25,000 per year ‘with his eyes closed’. True, the alpaca is an expensive livestock to purchase, but the economics are easily justified for that very reason.
Another critical financial consideration is the tax implications (savings) of alpaca ownership. Because alpacas qualify as a capital asset, they are depreciable, can allow for a large first year business expense deduction, and are taxed at a lower rate than regular earnings when sold. This coupled with the beneficial treatment of both expenses and capital needed to support the farm further increase the economic benefits of alpacas. Talk to your accountant or tax advisor and find out exactly how this will affect your particular situation.
It is important to understand that investing in alpacas has risks. All investments do; all livestock do. Alpacas are not a ‘get rich quick scheme’, it takes patience to realize gains and you should be prepared to endure for the long haul. Construct your business plan carefully and seek the assistance and experience of existing breeders to assure you are using ‘real world’ information.