Alpacas as a Business
What Start an Alpaca Business?
Here are just a few reasons to start an alpaca business
- Alpacas are easy on the land, they have padded feet, they are gentle, beautiful, curious animals.
- They are relatively easy to care for and handle and do not require large acreage. Approximately five to ten alpacas can be kept per acre.
- Upkeep & housing are relatively inexpensive.
- Alpacas are long-lived. Their average life span is twenty years.
- Alpacas can provide a good return on investment. Females start breeding at eighteen months old & produce on average one cria per year into their late teens. Gestation is roughly eleven & a half months.
- There are some very good tax benefits as long as you operate as a business.
- They provide an excellent family business. Plus, you just can't help falling in love with them!
- We offer On-Farm, Interest-Free Financing on your purchase of breeding stock alpacas.
- We also offer Package Deals on your purchase of two or more alpacas.
- Boarding is available for alpacas purchased from our farm, making it possible for those that don't have a farm or land of their own to enter the business. This greatly reduces the initial investment while providing many of the same financial benefits of owning an alpaca farm. Contact us for details on how this may be the right option for your situation.
Profitability of Alpacas
- Every winter, your Alpaca will grow a sought after luxurious fleece, just waiting to be shorn, used and sold! Annual fiber yields average roughly seven pounds per alpaca.
- Breed and sell your quality alpacas! Although gestation period is just under a year, these cria are worth waiting for. Not only adorable, they often sell for as much - or more - than was paid for the parent.
- Not to be overlooked as a very important aspect of raising alpacas are the great tax benefits that Uncle Sam provides. An alpaca can typically be depreciated over a five-year span or 20% per year and, in addition, Section 179 of the tax code to allows for the deduction of a capital asset up to $250,000 for assets up to $800,000.
- Capital gains can be available on the sale of breeding animals and their offspring. Current expenses are deductible. Consult a tax adviser for specifics as they relate to you.
- Also - alpacas are 100% insurable!
Alpacas as a Business
The alpaca industry has a mixture of individuals ranging from the alpaca breeder who is interested in breeding and raising alpaca as a business venture, to those individuals who are interested in raising alpacas strictly to produce fleece that is processed and made into wonderful end products. No matter which category that you fall into, it is important for you to understand there are risks and there are opportunities in raising alpacas just as there are in any business, but the benefits out weigh the risks.
Although alpacas should not be considered pure investments, there are many business benefits in raising them. Like other valuable assets, breeding stock held for more than a year qualifies for long-term capital gains treatment when sold. And unlike many assets, alpacas are 100% insurable.
Alpacas are depreciable over a maximum of five years, giving farm and ranch owner’s immediate tax savings while growing their business. Also, alpaca purchases can qualify for more rapid depreciation under Section 179 of I.R.C. As you raise your alpacas, most related expenses such as feed, vet care, supplies, farm equipment, computers, travel expenses, showing and advertising cost, etc. are all deductible. In many states, those involved in farming can receive a significant reduction in their real estate taxes. Talk to your tax adviser to learn how these tax rules can help you.
Alpacas are not inexpensive, ranging from $5,000 to $25,000 for good breeding females and $5,000 to $50,000 for a quality male. High quality proven males with exceptional offspring have sold in excess of $600,000.
In many cases the alpaca breeder will offer financing on the purchased alpacas. This can be a great way for someone really interested in the alpaca, to get started in their own business.
The alpaca herd grows at a limited rate, which helps to keep the supply and demand in check. These are just a few reasons why:
- Gestation period is 11 ½ months to a year, and they have single births. Twin births are very rare and seldom survive.
- Alpaca Registry, Inc (ARI) offers fully DNA-typed protection and been closed since 1998 to any newly imported animals.
- Mass production techniques, such an embryo transfer and artificial insemination, are difficult, if not impossible, due to the physical characteristics of the alpaca.
- More importantly, the Registry will not recognize any animals that are not produced naturally.
Raising alpacas can be a good retirement business or a wonderful and profitable family business. Alpacas are gentle animals, easy to handle and are great around kids of all ages.
It takes very small parcels of land to raise them and they are inexpensive to keep. Come for a visit to our farm and find out just how the business works. We will be glad to talk to you and answer all your questions about the alpacas and the alpaca lifestyle.
Tuesday, September 25, 2018