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Are Alpacas Commercially Viable?

Updated: Jan 31, 2022

In May 2012, Dianne Simmons, the first known person to catch TB from alpacas in the UK said, " I fear petting zoos could be riddled with the disease, posing a risk to the public, vets and other animals. "

In 2021 Gail, an animal rights activist defending a TB positive Geronimo is quoted as saying:

"People look at cows, pigs and sheep as food but an alpaca, that's not an animal we eat. So they have a different connection."

Regardless, of the rights and wrongs of defending an alpaca that has tested positive for TB, Gail does touch on a point that is possibly key to their popularity. But are alpacas a commercially sustainable livestock with a commercially sustainable market?

There is no doubt that the popularity of alpacas has grown. Indeed, as is our nature to anthropomorphize animals, it takes a hard heart to look into the beautiful eyes of an alpaca and not feel something towards these animals. Indeed with the growth in popularity has seen a growth in the national herd of alpacas from about 30,000 in 2012 to about 60,000 in 2021.

Of this 60,000 alpacas there are about 1500 owners with ten or fewer animals and about 600 herds in excess of one hundred animals.

So on the face of it alpacas should have a commercial future otherwise we would not see such a sustained growth. But that may not be the case going forward.

An alpaca in the UK has two significant means of earning money to fund its care and potentially turn a profit. That is, it's fantastic fleece and it's blood line.

Well let's start by looking at the fleece. Alpacas have a large fleece compared to sheep. Like sheep the fleece can vary in quality and in its ability to be used. Also like sheep, the actual fleece is of relatively low value until it has value added by a process. Typically one alpaca fleece can be spun into up to 2 kilos of wool looking at a potential turn after cost of about £30, obvious depending on colour and quality. Weaving or producing felt can also add value, but at a cost. So whilst alpaca fleece may have greater commercial potential value than a sheep's fleece it will barely keep the animals fed. Indeed, I have seen people become unstuck by not having enough land for their alpacas to allow grass to rest, with density being about 8 animals per acre. However, as we change our view towards man made fibre and disposable fashion could high quality natural products come to the fore and we see an increase in value of these fine fibres?

The highest commercial value of an alpaca is its blood line. The highest price I have been told first hand paid for an alpaca has been £30,000 (six years ago) and have heard unsubstantiated claims of double this being paid. However, such high prices are an exception. Certainly I cannot help but feel the importation of alpacas from South America means that it was either an act of enthusiastic decadence or a high value investment, perhaps the truth is somewhere between the two. Looking currently on the internet I can easily see alpacas being promoted for sale from £500 to several thousand pounds. However, the value of blood stock relies upon either a sustainably expanding market with serious breeders prepared to pay a high price. The "pet" alpaca trade will not provide these returns. Indeed to invest commercially in such blood stock requires a hope that you will successfully breed on and reap the financial reward. In this sense the blood stock market for alpaca can be likened to a ponzi investment scheme relying upon new investors to maintain or expand the value of earlier investors. Note, though, this only becomes true once the size of the blood stock market for alpaca grows beyond a sustainable mass. However, this is significant if you are wishing to raise money from a lender to fund an alpaca venture as it will most likely be viewed as “high risk”.

There is one particular aspect of the alpaca blood stock trade that the activist touched upon - we do not eat alpaca. Now there is a small niche market for alpaca meat that may appear at a country fair, or a South American restaurant , but the nearest such restaurant to me in Peterborough closed over three years ago, a pre-covid failure. Alpaca breeding is at risk of producing a surplus of males that, without a meat market, will have a limited and potentially a reducing value.

Yet, there are successful alpaca farms throughout the UK. A common theme to these is that they are often run by people that have come with skills from outside of traditional farming and have developed well promoted and diversified sustainable businesses. This may include other farming, holiday let's, tourism, or adding value to fleece products.It also means that many people in this trade had a former career that supplied a different set of skills, capital and possible income from other sources. As such, some (not all) are like the much feted “lifestyle” businesses we see paraded on BBC Countryfile.

My personal informed opinion is that the overall alpaca trade has a limit to its size and should be viewed as commercially sustainable as part of a diverse enterprise. I wish all those that manage to eek a living income out of these wonderful animals well, but they should not be viewed as a reliable means of increasing your wealth and only a few will achieve financial success. It is a venture that should only be undertaken with your eyes wide open and do not let your love of these adorable creatures rule your head.

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