Investing in Alpacas
Looking for a few good reasons to become an alpaca rancher?
There is only one first reason to join us in this industry. That must be the fact that you enjoy the 'ranch lifestyle' and livestock business model, and are willing and able to participate in it fully. These animals are easy on the eyes and soul, but do require daily attention. That is usually not a problem, you want to be around them anyway....We believe that although there are many good reasons to own these creatures, this is first and foremost. We feel this common denominator is why the term ‘lifestyle’ is so often referenced when you discuss alpacas with other owners.
The next reference should be toward investment. This category includes a variety of subjects that are all favorable reasons to become an alpaca owner. A few of these are listed below and as a savvy investor; you will recognize many of them immediately. The fact is that alpacas qualify for section 125 tax deductions and therefore all direct expenses related to owning alpacas are tax deductible. This includes but may not be limited to:
- Veterinary care
- feed and hay
- breeding, including transportation to and from
- all related office expenses including your home/farm office
- real estate taxes
- farm maintenance and aesthetic improvements
- your farm may qualify for farm service grants and financing programs for such improvements as fencing, running water, electrical service, and pasture improvements
- vehicles such as truck, tractor, and ATV’s
- farm promotional expenses including advertising, marketing
Alpacas are being readily promoted as the ultimate livestock investment opportunity. If you are considering alpacas as in enterprise, you should look very carefully at the implications of profitability, cash flow, and long-term investment potential as they apply to your specific situation. No two investors are the same.
There are many different ways to approach alpaca ownership. Are you going to just own alpacas and keep them boarded at the seller’s farm or a farm nearer to you? Many owners do this and it has many
benefits without the need for facilities of your own. Are you going to purchase fewer top end breeding stock animals, or more numerous animals of a lesser quality that you will breed for improved quality? Both methods and their variations work well and the question will be how does the investment fit your plan.
Plan you say? Yes, you should have one prior to buying your alpacas. Ask us about helping you develop a plan if you don’t have one and we will be glad to help. It is as important as the animals you buy and whom you buy them from. The Alpaca Owners and Breeders Association have a very useful publication entitled “Financial aspects of Alpaca ownership” that will also help you determine how to ‘fill in some of the blanks’. If you help us understand what you hope to achieve by alpaca ownership, we can help you formulate an ownership strategy to fit.
If after further investigation, you determine to continue your alpaca quest, it is imperative that you be able to answer all of the following questions:
Am I entering alpaca ownership for personal fiber consumption or alpaca production and investment?
Are you prepared to seek out all possible information concerning alpaca care, husbandry, and marketing or do you plan on having these aspects provided by the seller or others?
What will be your market for alpacas?
Have you planned for and considered the time required to care for, produce, manage, and market your herd?
Based on your investment strategy, how often will you need cash flow and what are your contingency plans?
Although we are not financial planners, we know about virtually all of your questions because we were first time buyers 23 years ago. We are prepared to help you. It is a big part of our farms service to help you get the most out of your ownership. As an experienced farm operator, we have the ability to provide you with the personalized service that you may not have access to otherwise. Come see us, we will talk to you openly and candidly about alpaca ownership.
Sincerely,
CHRIS AND LORI WORKS
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