Investment Considerations for Alpaca Breeders
"Alpacas, the investment you can hug." A nice thought but can Alpacas really be considered an investment? The answer is YES!
Alpacas are a sound and worthwhile investment. The animals themselves are deductible under a depreciation schedule as are any major improvements you make to you property to accommodate the Alpacas. Moreover, there are many immediate and full deductions that are allowable. These include but are not limited to feed and hay, veterinary care, and the wages of any farm helpers.
So, Alpacas give you immediate tax deductions, but are there any long term profits? Again the answer is YES! Alpacas are one of the rarest fiber animals on earth, and since females can only produce one baby a year, their rate of reproduction is low. However, the demand for these gentle, appealing animals is high - and growing. Low Supply, High Demand=Rising Prices.
Those who are concerned that prices will eventually taper off should remember two things: One, Alpacas are fiber bearing animals. They have always been bred for the luxury fiber they produce. The worldwide demand for Alpaca is growing, and the North American breeders are just beginning to develop a commercial industry. In contrast, llamas were bred as pack animals. The second thing to remember is a fact that holds true in most livestock. Good breeding stock will hold its value even when the price on lesser quality animals starts to fall.
There is always a risk of loss as with any investment, but careful planning, prudent spending and diligent herd management will insure that your financial investment in Alpacas is safe and sound. Do not forget that Alpacas also offer less tangible rewards as well, and always consider the benefits the Alpaca lifestyle has to offer you and your family.
For more information on the investment potential and tax advantages of raising Alpacas, consult the AOBA Investment Brochure, your accountant, or give us a call. We have pamphlets available and will be happy to send them to you.
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