WHO BUYS ALPACAS?

For some, alpacas are a source of income, for others a source of pleasure. They are potentially a lucrative, easy to handle livestock, kept on smaller farms and managed part-time while a spouse works elsewhere. Abroad many owners are retirees, and others involved in the fibre processing. There are big farms with over 100 alpacas, and smaller ones of only three or four. The average alpaca herd is ten alpacas.

Almost all breeders are in business for the long haul; they believe in the future of the animal. With the small number of alpacas currently available, there will be an extended and steady demand for breeding stock to continue meeting the needs of our growing industry for many years.

Investors with no land of their own see the potential in the industry and purchase alpacas to board with larger breeders. They reap the returns on sale of progeny and fibre.

Those choosing wethers as farm pets train them at halter, and find them responsive to handling and are ever so gentle with the kids. Often people start with wethers and then venture into breeding later. Alpacas are should not be kept alone, so they should either be run with another wether, or a companion sheep or goat.

Many sheep farmers in Australia and the UK are reaping the rewards from reducing livestock losses by using wethers to defend their stock against predators such as foxes and jackal, especially during and after lambing. Alpacas as herd protectors has opened a new market for the non-breeding males. They are alert animals, and have excellent eyesight over kilometers distance. We have started using alpacas on SA sheep farms.

INVESTMENT POTENTIAL

1. Breeding

In our endeavour to build up a national herd, the industry will remain a breeding based one for many years to come. Alpaca breeding is not a 'get rich quick' scheme which has been the downfall of other farming ventures in the past. The breeding rate is slow (one offspring per year, or more realistically 3 every 4 years, and seldom twins), and AI and embryo transfer to date are not commercially viable. The industry is over 20 years old and well established in the States, Australia and NZ. In all these countries alpacas have held their value and made them a sound and profitable long-term investment.

Herd growth can be calculated on 50% male/50% female birth ratio, and assuming an 80% reproduction rate. A typical initial herd size is 1 male and 5 pregnant females. After 5 years this could have grown to 36, and up to 126 at the end of 10 years. Investors without their own farm can board their alpacas with larger breeders and reap the returns from breeding.

2. Fibre

Prices depend on fineness (micron), colour, softness and handle. Useable yield is 1-3 kg per annum. African Alpacas is taking the initiative with others towards a joint fibre processing and marketing of the annual clip. Returns are up to R350/kg. One must also realistically budget for cleaning, classing, carding and transportation of fibre. The return from fibre will increase as the herd numbers increase.

3.Tax advantages

Farming with alpacas, either breeding or the production of the fleece, is considered as an agricultural activity for the purpose of tax. SARS has officially recognised the Alpaca with a designated Standard Value of R6, the same as sheep. The breeding side can offer valuable tax deferred wealth building, as well as a means to write off other profits. Fibre producers do not fall in the 'ring fencing' of other livestock. Potential owners should consult their accountant to advise them how best to maximize their tax savings.

4. Tourism

Petting farms are the new vogue in Europe and certain animal farms in South Africa use alpacas as a unique attraction to their enterprise. Some alpaca farms are open to the public and have a small retail shop with alpaca wares.

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