Frequently Asked Questions: Chesapeake Alpacas, Inc.

Why are alpacas so expensive?

Alpacas were expensive to import at a cost of $18,000 - $20,000 per animal. Importers had to first pay the cooperatives from which the animals were selected, then pay a "tax" to the Peruvian government. The animals were then quarantined in Peru before being transported to the U.S. At a cost of $500,000 the importers constructed a quarantine facility in a remote location of the Peru desert. Once in the U.S., the alpacas were again quarantined for 90 days. Veterinarians and employees were hired to staff the quarantine facilities 24 hours a day. These expenses, and the associated transportation costs involved, caused the total cost of a single importation to far exceed $1,000,000. Alpacas purchased in the U.S. today reflect the costs associated with importations. The rarity of the alpaca in the U.S. also influences the price people are willing to pay. Limited supply and growing demand for alpacas in this country are factors that keep prices high.

How long will prices hold?

No one knows for sure. However, the strength of the national registry, the limited domestic alpaca population coupled with a slow reproduction rate, increased demand, and post-9/11 interest in simplifying lifestyle and "getting back to basics" are factors that collectively generate a favorable climate for price stability. As there are not enough alpacas in the "national herd" to support a fiber market at this time, the industry is expected to remain "breeding-based" for the foreseeable future.

How is the alpaca business different from the Emu business?

The Emu industry depends, in part, on creating a demand for emu meat. Emus also reproduce relatively quickly with one hen producing 20-50 eggs in a single season. Emus are valued for the oil and other byproducts they yield. However, harvesting these byproducts requires slaughter. While the emu industry has its merits, the alpaca industry is very different. Alpacas are not raised for meat and reproduce slowly. Alpacas also provide a useable byproduct — the fiber, which is harvested each year by shearing and does not involve slaughter. Of course, alpacas are also adorable, can be easily trained and enjoy interacting with people.

Is this a pyramid scheme?

No. Alpaca breeding is not a "scheme." It is a legitimate business, probably most similar to horse breeding. Though the alpaca industry is pyramidal in nature, as breeding based businesses have been for thousands of years, it is important to understand that a "pyramid model" differs significantly from a "pyramid scheme." Your success in the alpaca business will be based on your ability to market and sell your own product - your alpacas, fiber and/or products. Pyramid "schemes" generally focus on recruiting new "distributors" as a way to make profits. Most people involved in breeding alpacas believe firmly in the future of the industry and are committed to their business for the long-term.

Can I make money by selling fiber?

You can make money by selling fiber, but return on investment is realized through the sale of breeding stock. Fiber sales may cover the costs of raising the animals, but will never return the cost of the animal itself. However, many breeders do successfully sell their fiber. Profits from fiber sales can be increased by improving the raw fleece -- washing, picking, carding, dyeing, or creating a finished product. Those value-added products will sell for a higher price than the raw fleece.

What guarantees are there that I will be able to sell my alpacas?

While there are no guarantees that your alpaca venture will be successful, many, including Chesapeake Alpacas, believe that the alpaca has a bright future in the U.S. Recent auction prices have been encouraging and demand has increased. However, no one knows for sure what factors may adversely influence the market in years to come and as with any other investment, past performance is not a guarantee of future results. Remember, a large part of your success will depend on your own abilities, enthusiasm and level of commitment.