a Suri Farm, ltd.

Fine Peruvian Alpacas in the Heart of Pennsylvania Dutch Country!

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May 01, 2017

Value of Owning

 

We’ll begin this section with a question – when’s the last time you hugged your 401k? Okay, how about your entire stock portfolio? Your broker? Take some time to read about the value of owning alpacas and you will see why some folks refer to them as the investment you can hug.

Alpaca breeders, regardless of farm size, can expect to harvest and sell fleece and sell quality offspring profitably. But, the sale of quality breeding stock is the basis of the current North American alpaca industry and the way in which the greatest return on your investment is achieved.

Many factors influence individual alpaca prices, these include:
*Age, gender and breeding status,
*Color,
*Conformation,
*Fleece quality/amount and,
*Country of origin.
Typically, females sell for more than males, but herdsire quality males have historically commanded the highest individual prices with some going for more than half a million dollars. The range of value for quality females continues to consistently increase since alpacas have been available to the North American public. Early on, prices were generally between $12,000.00 and $25,000.00 with an occasional unique alpaca selling for as much as $50,000.00. Today it’s not uncommon for top quality breeding stock to sell for $40,000.00 to $60,000.00. Proven, top-quality herd sires typically sell for $20,000.00 and up, with the highest quality males with ribbon-winning cria on the ground demanding much higher prices. It should be noted that pet quality animals who are not registered and have been gelded usually sell for less than $2000. One can still harvest a pet animal’s fleece but the return for the investment is minimal.

Even in troubled economic times for our country, alpacas continue to sell. There may be a reduction of around 5 – 10% for the price that year, but if you have top quality pedigrees at your farm, you will always have customers. And buyers are looking for a stable investment. After all, some of us woke up one morning to find half of our stock value gone on Wall Street but none of us who wisely invested in alpacas awoke to find half of our breeding stock dead in the pasture.

There is an alpaca ownership approach suitable for every level of interest and financial position. While some breeders start with several breeding females and a male, others may opt for younger animal or a breeding pair. Before we purchased any animals, we determined what our farm and market focus would be which narrowed our options to stay within our budget. When we began a Suri Farm, we opted for pregnant maiden females or “first time moms.” We did so because they were a bit less expensive than proven dams and they came with a reproductive guarantee. By doing so, we were able to afford four pregnant girls of Peruvian origin rather than two pregnant proven dams.

We also purchased our Peruvian herdsire in that original package. He was a junior herdsire at the time but also came with a full reproductive guarantee. He won second place at the 2003 AOBA National Show in the white class which is extremely difficult, we were so pleased. But we were elated and felt as if our stock had split when we saw the amazing offspring he threw.

An additional benefit of alpaca ownership comes in the concept of compounding. Similar to a savings account where your principle grows each year with the addition of interest, compounding means your alpaca farm principal grows each year with the addition of offspring. When you retain the offspring, they in time will produce babies and so on. This is “alpaca compounding” or tax-deferred wealth building. As your herd grows, you postpone paying income tax on your herd’s increasing value until you decide to sell the offspring. The only regret we have is that we didn’t discover this investment opportunity sooner. Had we done so, we would have purchased animals and boarded or agisted them at an alpaca farm until we had a Suri Farm up and running.

Alpacas are insurable against theft and mortality. Average insurance rates currently run 3.25% of the animal’s value.