I recently made the mistake of requesting more info on raising alpacas. Now I get loads of alpaca related junk mail from individual alpaca farmers. These animals cost upwards of $10k.
How is the cost of the animals justified? Are they 100x more dificult to breed/raise than a $100 goat?
How can you possibly make money from raising alpacas besides selling livestock? Sure, the fiber is valuable (if you have a market for it), but I don’t see how you could come close to breaking even by selling it.
It seems like a MLM scam to me. The only way to profit is to con some other sucker into buying them from you, then he has to do the same.
I don’t know anything about the business of alpaca farming, but an adult alpaca can produce a lot of fiber over its lifetime. The stuff is expensive, too, as anyone who likes comfortable hypoallergenic sweaters will tell you.
Walk into a store that sells knitting supplies and look for the alpaca wool. Notice the price per skein. Then look at pre-made alpaca wool sweaters and such at a clothing store, and notice the prices there too. There is a market for it, and the consumers who want alpaca wool and goods made from alpaca wool are willing to pay dearly for it.
My wife is a devoted knitter, and one of the things on her dream list is for us to some day have enough land that we can have one or two alpacas so she won’t have to pay quite so much for their wool.
Supply/demand. I looked into this after hearing about $20-30,000 alpacas and figuring there must be an extra zero in there somewhere. Nope. Raising alpacas is a relatively new endeavor in the US, good breeding stock is hard to find. There are enough people out there who would like to raise alpacas. You don’t have to con people into them.
You could make the same argument for pure-bred dogs. Why would someone pay $1,200 for a dog when they can get one from the pound for $100? You can’t even sell the dog hair! All you could hope to do is to have puppies and sell them to some other schmuck.
The fiber is indeed pricier than your average sheep fleece. The fleece qualities vary by animal, with the finest fiber producers costing more, naturally. I am aquainted with a llama farmer who cited expense as her reason for sticking to llamas. She came across a wholesale alpaca fleece a while back and has been making a tidy profit on it. (selling many chunks of it to my mother and I - mmmmm, it was nice to spin)
4lb/yr x 16 oz/lb x $3-$6/oz x 20 yr = $3480 to $6960 over the lifespan of the animal. Unless these animals are producing way more fiber or much better fiber than average, I don’t see how you could pay for the animals, not to mention feed, housing, vet bills, insurance, etc.
That article says you could get a “fiber quality” (presumably neutered) male for $1000, whereas studs range from $4000 to $10,000 and females range up to $16,000. So I imagine if you buy a large number of males you could make a profit on the fiber (though you’d need to buy or rent the occasional stud for breeding, or else keep buying new males every year.)
Those are also 1994 prices; presumably the market has changed a lot since then.
My mother has alpacas, and although she is just a hobbyist who doesn’t need to make an income from them, she knows lots of people within the Australian alpaca community, many of whom are prominent breeders and dealers.
My mother’s herd at the moment consists entirely of wethers (castrated males, sometimes also called geldings), and she usually has somewhere between 14 and 22 animals. She gets them shorn, and she spins the wool herself, then knits it into sweaters, scarves, etc., and sells them at various markets and shows.
When she started getting into alpacas, in the early 1990s, they were really expensive in Australia. Even wethers routinely went for a couple of thousand dollars, fertile females were typically around $10,000 or more, and the really prime stud males could fetch prices into the hundreds of thousands of dollars.
At the top end of the market, massive prices can still be had for prime stud males or breeding females, but the middle and bottom end of the market have really fallen away over the last ten years or so. My mother frequently gets offered animals for free. Often this is because they have some small imperfection in their conformation or appearance that makes them unsuitable for showing and breeding, but often their fleece is perfectly good. My mother has won ribbons at plenty of shows for the quality of her fleeces.
She knows quite a few people who have done very well off alpacas, but also know others who have sunk a lot on money into them for very little or no return. Those who made the most money seemed to be those who got in early and made a good profit from breeding when the prices were still very high. Many of these folks are still in business, so it wasn’t a purely speculative industry, but the demand for alpaca wool really couldn’t sustain the prices at their initial levels.
The raw fleece used to go for over $100 a kilogram (about $45 a pound), but it’s far cheaper than that now, i believe. Like with animals themselves, my mother also frequently gets offered large bags of raw fleece that other alpaca people can’t use and can’t sell. She has a huge store of high quality fleece, and told me that she could probably spin and knit for the rest of her life using just the bags of fleece in her garage.
As i said, the whole market aspect of the industry doesn’t really affect her very much. She’s retired and does it purely as a hobby. She sells her sweater for two to three hundred dollars each, but if you work out how long it takes to shear the animals, spin the fleece, and knit the sweater by hand, she probably only makes a few dollars an hour. From what she’s told me, i believe that the amount she gets from selling her work basically covers the cost of keeping the alpacas, with a bit of extra spending money left over.
I’m not sure how similar the situation is in the US, but i believe that prices have come down here as well. One problem that some breeders have is that the cost of insurance can become prohibitive. When you have animals worth five or even six figures, you need some insurance against disease, accidents, weather- and temperature-related deaths, and death to females while giving birth. Those costs can really add up.
Oops - didn’t read down that far. I was basing the prices on the info I’m getting in the mail, and they don’t mention if they will sell a neutered male or not. I’m seeing prices in the 10-40k range.
I’ve found a 2007 reference to getting as much as $3 per ounce for the fleece, so the older figures look a little on the high side. I did find one neutered male online for $5k. It appears it is not profitable to just sell fiber. Perhaps the market is getting saturated.
This is the key, according to my friend’s mom, who just got into the alpaca market. You buy a baby female for 10,000 bucks, feed it some hay and brush it for a few years, and then when it has babies you’ve made your money back and then some. They even have alpaca shows you can go and show them off at, just like dogs.
Of course, this is all based on the assumption that alpacas will keep getting more and more expensive in the future. But if the last 10-15 years is anything to go by, that isn’t quite a bad assumption.
Why, by selling the young alpacas you produce, of course! A decade ago I saw this happen in western PA with ostrich. One guy I did some vet work for eventually sold birds he had paid $10,000 or more for a few hundred bucks at the end of his attempt to be rich(er).
The reason I brought this up is that all of the brocures I keep getting stress how much money you can make off of the fiber without breeding them. They read like an amway pitch for the products they sell, when anyone with half a brain realizes they will not get rich selling degreaser.
I can’t see any way for this to end but for the price of the alpacas to drop to a more reasonable livestock price like it did with the ostriches in your example, as I’ve seen no indication that they are dificult to breed.
If the brochures you’re getting have such hard sell pitches, one would wonder if the market isn’t already beginning to moderate like ostriches.
Strident sales pitches always ping my bs meter. (but if you do get yourself an alpaca or three, I’d be happy to buy fiber from you! I’ll give you $35/lb)
How about you buy me a mating pair and I’ll give you all the fiber they produce?
Not a chance of me getting them. I didn’t know how expensive they were when I sent for the info. I’m broke and looking for ways to put my land to work for me, so I’m planning to raise hogs + chickens + a garden next year.
Yes it is a bad assumption. The ultimate market for alpacas is the fiber. The market for very expensive breeding stock requires that more and more people will breed more alpacas. But at some point the fiber market is saturated, and the price for alpaca fiber declines…the more alpacas there are, the larger the supply of fiber.
So the model of breeding animals and selling them for multi-thousands of dollars will only work until the market is saturated, and then it will level off dramatically, if not crash. And the market for alpaca fiber will likewise collapse if the number of alpacas increases by an order of magnitude.
It should be apparent that breeding stock is only highly valuable if breeding stock is hard to come by, and lots of people are competing for the same breeding stock. At some point the number of alpacas in North America is so high that there is no more restriction on breeding stock, and suddenly the price crashes. The ceiling isn’t the current price for geldings, because the price for geldings assumes that the supply of alpaca fiber is restricted. If the herd doubles in size, the supply doubles, and the price of geldings halves. At some point people won’t be able to give away the same animals they paid $10,000 for a few years ago.
