Many people interested in alpacas are leery of the business aspects of growing a herd because they either experienced or heard some of the same promises applied to the emu craze of the 1980s. (Emus are a large, ostrich-like bird)

But I really don't think they're much alike at all, and here's why:

First, with Emus, the profit center was supposed to be the meat market (which never really materialized in the U.S.)

With Alpacas, there is NO meat industry, and no one is relying upon it to produce revenue in their business model.

That's a good thing for two reasons.

First and foremost, … if you have to slaughter an animal to derive value from it, you have an inherent limitation in your model.

Second, you're going to get kind of emotionally attached to these animals … (they're very sweet) … so it would be heartbreaking to sell them for slaughter.

Emus also produced a valuable oil, but not really enough to make a real profit.

But the biggest difference between the alpaca and emu industry is that one female emu could have DOZENS of offspring every year, which grew the USA herd size 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 farmers to keep up with expenses and needed equipment)

Alpacas have only one baby a year, so herds grow slowly unless you buy more alpacas. (That's also why I keep telling you it takes a few years to start earning significant income, and that this is an industry suitable for those willing to put in five to ten years).

Another reason that alpacas appear to be a much hardier investment than emus were is that the fleece usually earns enough money to feed the herd, and is expected to become more marketable over time. So there is inherent stability for the alpaca farmer.

Last, because the value of an alpaca is directly related to the quality of it's bloodline (more about that in later issues), alpaca farms often have a need to purchase animals from each other, or at minimum to buy breeding services. This makes it possible to improve the genetics of the offspring.

Long story short, although there is, of course, some market risk in any investment, most of the experts we spoke to felt the alpaca market would remain stable for the foreseeable future, as it has for the past 20+ years.

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