Alpacas as an Investment
Alpacas have a reputation as “the world’s finest livestock investment“. Alpacas are suitable for small holdings. You can generate multiple income streams from alpacas which add to their investment attractiveness.
The Incas regarded alpacas as more valuable than gold. They measured their wealth by the quality and quantity of alpacas they had. When conquered by the Spaniards in the mid-1500’s, they were relatively happy to hand over their gold. The Inca’s called alpaca fibre the “Fibre of the Gods”.
Today there are over 5 million alpacas worldwide. Compared to 45 million cashmere goats and over 1 billion sheep, there is a healthy growth path for alpacas as they establish themselves on the global market.
The alpaca farming industry is substantially more established in Australia and the US with the UK & Europe not far behind. The numbers are growing globally with Australia announcing that they are going to establish a national herd of 1 million alpacas. In China, after a 10 year government funded research project, they have declared that they are going to create their own national herd of 6 million alpacas.
Meanwhile here in Ireland, alpacas are still in their infancy with approx. 500 owners and approximately 3,500 alpacas. Alpacas within Ireland are estimated to grow to between 8,000 and 10,000 animals by 2030.
What do alpacas cost?
Prices vary depending on the age, pedigree, colour, pregnancy status and quality of the animal but to give you an idea of rough costs:
Pregnant female alpacas range between €2,000 – €8,000 ,
A castrated male, pet or guardian will cost between €500 and €1200.
A potential stud male can cost anything from €4,000 upwards to a level that is controlled only by the buyers desire to own a particular animals unique genetics. Champion males are changing hands for tens of thousands. Note studs are selected from the top 2% of animals. Be wary when purchasing stud males and do your homework – check pedigree, fibre stats, conformation & progeny etc.
What are the returns?
Alpacas live for 20 to 25 years. A breeding female will deliver cria up into its late teens. Taking just a 10 year timeframe, a female should deliver 10 cria, which based on existing prices, can deliver a return of €20,000 to €40,000.
Investments are usually for a period of 5 to 10 years in order to get the best return.
There is the prospect of growing your herd 5 fold over 5 years and 20 fold over 10 years
It is vital that investors bear in mind that this is a live animal that they are investing in and as such, it is subject to all vagaries that life can throw at it, hence we advise that you cover you investment with annual insurance.
How do I invest?
There are numerous investment models but when condensed there are two: either hands on or hands off.
The hands-on model follows the traditional farming approach where you have land, you purchase breeding stock and you take all the decisions around husbandry and mating etc.
The second hands-off option can be more interesting in that you don’t need land and you don’t have to be involved in any of the hands-on day to day husbandry activities. You can either be an active investor or a pure financial investor. Active investors become involved in taking the key decisions such as mating and sales. The pure financial investor just wants a return for their money and leaves all the decisions and work to the breeder.