Silvercloud Farm Investment

Alpacas...The World's "Finest" Investment!

The "Humma~Lisa"

Alpaca Fact: Healthy female alpacas reproduce one cria every year. An alpaca's life span is roughly 15 to 20 years. As your herd grows, your investment will grow exponentially, much faster than many other investments!

Here is the official alpacorhythm :

If you begin with five pregnant females and two males, in 10 years your initial herd grows to 126
animals, assuming an 80% reproduction rate and a 50% male to female birth ratio

The Alpaca Industry...

Our Industry today is geared toward breeding Quality Alpacas. Alpaca prices vary depending upon the quality of the animal. Fleece, conformation, lineage and most importantly, the tendency to produce quality progeny are important factors affecting prices. Prices for quality breeding females usually range from $15,000.00 to $40,000.00. The bar is certainly higher for male alpacas to be worthy of entry into the gene pool. A male that is a proven "passer-on" of certain desirable traits, consistently, can be bred exponentially more than a female that births once a year. It is not uncommon to see an exceptional male sell for prices in excess of $100,000.00... Currently, some of the more well-known males in the North American herd are being sold at auction and through private treaty sales well above these prices. These males are mostly sought after for breeding because they are producing high quality progeny.

Given the accelerated ascent in quality of the North American breeding program, these old "machos" are going to have a great run for their money. Not only are their offspring producing outstanding crias, but many alpaca breeders (both VERY LARGE & very small) are making genetic masterpieces everyday here in the US.

For two decades the North American Alpaca Industry has enjoyed tremendous and steady growth. The industry continues to flourish for a number of reasons.

First, alpacas are quite rare outside of South America. Our national herd is in the 50,000 range now (2006) in the United States. Alpacas reproduce very slowly as females have only one cria per year. Currently, mass production via embryo transfer or artificial insemination is not sanctioned by the ARI.

Finally, since 1998 The Alpaca Registry closed the doors to importation of any alpacas, which has served to both limit and protect our national herd. Visit the Alpaca registry at:

www.alpacaregistry.net

Our national organization, the Alpaca Owners and Breeders Association or AOBA, has been effective at increasing the demand for both alpacas and alpaca products. In fact, the number of alpaca owners has doubled in the last few years and the demand for alpaca fiber continues to grow. AOBA is comprised of a very diverse and talented group of people that dedicate a great deal of time and energy to the Alpaca Industry and its success. Please visit the AOBA Website for more information:

www.alpacainfo.com

Today's alpaca market is driven by a continuing demand for quality animals. With the limited supply, the current market is strong and should remain viable for many more years to come. Although this market is driven by the sales of quality breeding animals, in the end the alpaca business will be all about fiber! It is this luxurious "end product" that separates alpacas from many other exotic livestock, and the demand for alpaca fiber continues to exceed the supply.

Like any business, alpaca farming does have some risks. Before investing you should talk with Breeders and familiarize yourself with the risk and rewards of this wonderful industry. Learn all you can about the business! There are a number of ways to reduce some of the risks and to ensure your success. First, Alpacas are 100% insurable against theft or loss. New breeders should purchase the best quality animals for their starter herd. After all, this is the foundation of all that is to come. Always breed your females to superior males. Last, but certainly not least, be prepared to market your animals and your farm long before you are ready to sell.

Just when you thought the Alpaca Business was too good to true! Here comes the IRS with some very favorable tax benefits. As with any business, the "hands on" alpaca owner can deduct all related business expenses. However unique to the alpaca business, these expenses can be deducted against any source
of income. Expenses include: feed, breeding fees, insurance premiums, ranch or investment-related travel expenses, educational expenses, and any other costs associated with running your farm. In
addition to operating expenses, capital expenses such as breeding stock, barns, equipment and fencing can be depreciated over a period of time. Alpaca farmers also benefit from tax deferred income. While
your herd grows and increases in value, you are able to postpone paying income tax until such time as you begin selling offspring. Alpaca owners choosing to agist their animals, typically fall under the category of passive investors. Passive investors do not always enjoy all of the tax benefits listed above, but still have some tax advantages, and should consult with their accountants. Please consult
the IRS Publication 225, The Farmers Tax Guide, for complete details at:

www.irs.gov/pub/irs-pdf/p225.pdf

Email Silvercloud Farm

SILVERCLOUD FARM
997 Deer Creek Road, Gibsonia, PA 15044-7008
Phone: (724) 444-8469 • Fax: (724) 444-8466

Or Call 1-877-MYALPACA