Alpacas Are Not Like Emus

Some people researching alpacas as an alternative livestock investment are concerned that the alpaca industry may end up like the emu craze of the 1980s. (Emus are a large, ostrich-like bird.) Actually, the alpaca is completely different than the emu industry.

The original strategy for emus was to raise them for meat, like turkeys. But an emu meat market never materialized in the U.S. You never saw emu roasts in your supermarket, smoked emu in the deli, or emu on a restaurant menu. That's because the emu industry never bought advertising to bring this meat to the public's attention or developed an infrastructure to process emu meat. Emus also produce a valuable oil, but again the emu industry never developed an infrastructure to process and market the oil. So there was no real profit from emu oil.

Alpacas Produce an Elite Fiber

With Alpacas, there is NO meat industry. So you don't have to slaughter the animal to get its product. Alpacas produce an elite fiber that is softer than mohair, warmer than wool, and stronger than both. Alpaca fiber is hypo-allergenic, so many people who can't wear wool, CAN wear alpaca. Alpaca fiber is highly desired by the fashion houses of Paris, London, New York, etc. Alpacas are shorn annually and typically yeild 7 to 10 lbs of fiber. A raw, unprocessed fleece sells for $500 to $600, and if processed into yarn and on into finished apparel or textile project can sell for many multiples of this. Moreover, alpacas live for 15 to 20 years to yeild an ongoing, steady product.

Unlike emus, alpaca fleece usually brings in enough revenue to pay for an alpaca's feed and upkeep. Selling alpaca fleece gives the alpaca rancher another element of stability to his operation.

Run-Away Emu Growth Versus Steady Alpaca Growth

Another big difference between the alpaca and emu industry is that one female emu can lay 30 to 50 eggs each year. This means that an emu rancher had to find 30 to 60 buyers for the offspring of each hen. The result was that the U.S. emu flock grew too quickly to allow for stable market values. There was no way that demand could keep up with supply. The rapid reproductive rate of emus also made it difficult for emu ranchers to keep up with expenses and needed equipment.

In contrast, alpacas have only one baby a year. So alpaca herds grow slowly, unless you buy more alpacas. Meanwhile, each alpaca female is producing one baby a year to provide more fleece and give the alpaca rancher livestock to sell.

New U.S alpaca ranches are growing by about 30% per year, with the average start-up ranch purchasing an initial 2 to 5 animals. So demand for alpacas greatly exceeds supply. Based on the slow, but steady growth rate of the overall U.S. alpaca herd, demand will continue to exceed supply for many years to come.

Closed Alpaca Registry

The U.S. alpaca industry has closed its stud book, the Alpaca Registry, Inc. (ARI) to imports. This means that only alpacas whose parents are already in the U.S. stud book can be registered. Having an unregistered alpaca is like having a house without a deed or a car without an owner's certificate. A closed registry protects U.S. ranchers from seeing their alpaca investment devalued in a market flooded with imports.

AOBA Drives the Alpaca Market

The third way that the alpaca industry differs from the emu industry is that it has a well-organized national marketing arm, the Alpaca Owners and Breeders Organization (AOBA), which drives the alpaca industry in the following ways:

• Purchases TV advertising on satellite that markets into rural areas.
• Certifies alpaca halter and fleece shows throughout the U.S.
• Publishes the Alpaca Farm and Ranch Guide for people research alpaca investment and provides well-qualified sales leads to AOBA membgers
• Publishes Alpacas Magazine to promote alpaca ranching
• Hosts an annual Fiber to Fashion conference to promote alpaca fiber and apparel.

Alpaca Herdsires As Additional Revenue Centers

Unlike emus, alpacas also offer an additional revenue stream through the sale of stud services. The value of an alpaca is directly related to the quality of it's bloodline. That's because the quality of an animal's fiber is greatly determined through genetics. Fortunately, a female with mediocre fleece can produce babies with much better fleece characteristic by simply breeding her to a superior herdsire. There can be dramatic fiber improvement in just one generation. This makes it possible to improve the genetics of the offspring, and thus improve the overall value of a rancher's herd on a continual on-going basis.

The alpaca industry is still in its infancy, with a majority of ranches owning 2 to 5 females. So alpaca ranches, especially smaller ranches, often need to purchase breeding services. Either they don't own a herdsire, or their males to too closely related to the females, which would result in in-breeding. It's very common for a stud service fee to cost $1000 to $2000, with really top national herdsire services to go for $3500 to $5000.

In short, I feel that the prognosis for the alpaca industry is excellent because it is based on the sound market principles of steady herd growth rate, demand exceeding supply, the increasing value of elite fiber.

This page was last updated June 9, 2008.