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Farmers see alpacas as a stable investment
COLUMBUS, Ohio (AP) -- Former cattle farmer Paul Doran was successfully breeding llamas when he tried his hand at a new venture -- alpacas. Doran invested about $100,000 on seven alpacas in 1999 after learning about them at an Iowa farming symposium. Now, he keeps 22 alpacas at his 40-acre farm in the Columbus suburb of Westerville. "The future is unbelievable with the alpaca," Doran said. "When we get calls from stockbrokers I tell them the only thing I invest in is livestock." The Kalispell, Montana-based National Alpaca Registry says alpacas, a cousin to the llama, number almost 42,000 in the United States, about double the amount in 1998. It credits the increase to more awareness about the investment potential and the lifestyle alpacas offer, said Libby Forstner, president of the registry. Most of the profit in alpacas comes from breeding the animals and selling the offspring to other people who want to get into the business. Livestock economists warn that alpaca ranchers need to develop a market for the animals' wool or risk the same fate as the once-strong emu and ostrich businesses. Forstner, who owns about 1,300 alpacas in Litchfield, said the current surge is fueled by tax advantages, the ease of caring for the animals and a desire on some people's parts to move to the country. Alpacas originated in the Andes Mountains, and most were imported from Peru and Bolivia beginning in 1984. Ohio has about 6,000 alpacas and 500 farms, more than any other state, followed by Washington with about 5,300 animals and Oregon with almost 4,000, the registry said.
Many alpaca farmers have had no previous experience with livestock and are using alpacas to supplement their income, said Forstner's husband, Jerry, who helps run their farm in northeast Ohio. Still, owners manage to profit because alpacas are easy to raise compared with other types of livestock, and with only 42,000 in the country, it's not difficult to find buyers, he said. Most of the nation's roughly 4,000 alpaca farms include fewer than 20 animals, Forstner said. Population growth has been controlled by selective breeding and the alpaca's 11-month gestation period. The Alpaca Registry, which guarantees the pedigree of alpacas in the United States through blood testing, also voted to stop registering animals from other countries in 1998 to help keep supply down and prices up. Alpaca investors almost never buy animals whose blood lines are not guaranteed by the registry, to protect against stock being crossbred with llamas, said Eric Hoffman. He helped set up the registry in 1988 and now runs an alpaca farm in Santa Cruz, California. Female alpacas usually sell for about $15,000 and males $3,000, Doran said. Almost all of the profits come from selling offspring. Maintenance costs are low. Doran said it costs about $25 a month to care for an alpaca -- less than half the price of raising a cow. Alpacas graze on grass and tree leaves and eat food pellets and hay in winter. Farmers also can profit from property tax reductions when they classify their land as a farm and from income tax refunds for animal depreciation.
Tax benefits alone produce a 6 percent to 10 percent return on an investment, Jerry Forstner said. Alpaca farmers also earn some income from the animals' fiber, which sells for about $5 an ounce, Doran said. Alpacas are sheared once a year, producing between 2 and 10 pounds of fiber, depending on the size of the animal. Curt Lacy, a livestock economist at the University of Georgia, said the alpaca industry could weaken significantly if farmers don't come up with ways to market the wool. Hoffman agreed. "We should really be aiming to compete with cashmere," he said. Rita and Charlie Reinhardt invested $100,000 on five alpacas in 2000, with plans to build a large herd and then sell the offspring. They now keep 13 on their 30-acre farm in Marysville, 30 miles northwest of Columbus. Reinhardt recently quit her job as a receptionist to work full time with the animals. Her husband hopes to retire from his job as a technician in a few years to help. "I really had my neck out there and I still do," she said. "But the stock market failed and my alpacas didn't." Copyright 2003 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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