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Alpaca: it's the new cash cow

There’s a lot of money to be made in alpaca farming — at least for now. But those who have taken the plunge, many of them Floridians, say they’re happy to have an investment they can hug.

By CATHERINE E. SHOICHET
Published May 27, 2006


[Times photo: Will Vragovic]
Mike Temple holds the head of Dakota to keep him still while his wife, Sheila, uses shears to cut Dakota's first coat.


CRYSTAL RIVER — Mike and Sheila Temple wanted a way to pass the time and earn extra cash after their two sons graduated from high school.

Flipping real estate made them some money, but their hearts weren’t in it. They wanted an investment they could hug.

In 2003 the Temples moved from Palm Harbor to Citrus County, sold their last property and used the money to buy something entirely different: an alpaca.

They now care for 27 of the hug-friendly animals on their 20-acre farm south of Crystal River, and they hope a healthy profit is on the horizon.

“In three years, our alpaca portfolio has quadrupled in value,’’ said Sheila Temple, 53. “Nobody can say that about a 401(k).”

Alpacas are native to the highlands of Peru, where for centuries people have domesticated them, sheared their luxurious fleece and sold it for top dollar. They were commercially imported in 1984, and today there are more than 80,000 alpacas in the United States and more than 800 in Florida, according to the Alpaca Registry International.

That number is growing as more and more Floridians leave the fast life behind and take an interest in these funny-looking relatives of the llama.

New farms are popping up from Tallahassee to Miami. Most are in the central part of the state; the North Suncoast is home to more than a dozen.

Why? Alpaca fleece is warm, hypo-allergenic and flame-resistant, used in pricey designer sweaters, scarves and socks sold at Bloomingdale’s and Burberry. The best-bred alpacas sell for hundreds of thousands of dollars — well above traditional livestock prices. And they’re cute.

Although, they do spit when they’re angry.

Critics say alpacas are just the latest farming craze without a financial foundation to back up the boom, like ostriches and emus before them. But owners of alpacas say that in a state agricultural market traditionally dominated by cattle and citrus, these fleecy faces are here to stay.

Florida’s hot summer weather means alpaca owners here have to follow a special shearing schedule and use large fans to help cool the animals. But those obstacles are small and the benefits great, said Don Warming, president of the Florida Alpaca Breeders Association .

“Florida’s the perfect place to raise alpacas,” he said, noting that even though only 56 alpaca farms are members of the organization, the state may have up to 100. “The whole industry is growing fast, and Florida is growing right along with it.”

***

Ocala is the heart of Florida horse country. On one Friday night in January, however, in a midsized equestrian arena on the outskirts of the city, a group of high rollers in jeans and T-shirts gather with only one thing in mind: buying alpacas.


No matter how strange the lineage (one alpaca, according to the announcer, descended from alpacas named General Schwarzkopf and Genghis Khan), between rounds of Bud Light and Diet Coke, the crowd eagerly raises bid cards in the air.

It is a relatively quiet night. The highest-priced alpaca sells for only $34,000. Still, the possibility of hitting the jackpot looms large.

“His brother sold for $200,000,” announcer Anthony Stachowski notes as he describes one animal. “That’s what we’re all waiting for.”

On the Web site of the national Alpaca Owners and Breeders Association, the animals are compared not just to other livestock, but to gold, real estate, oil, stocks, bonds and diamonds. Alpacas offer “excellent profit opportunities and tax advantages,” the site says.

Start-up costs for a first-year alpaca farm — including a pregnant female and a young female, insurance, feed and other farming supplies — amount to about $68,000, according to the association. Many expenses are tax deductible. Well-bred females sell for around $20,000. The best-bred ones tend to rake in more money because of their ability to have more offspring. Recent auction prices have run as high as $750,000 for half-interest in a top-notch male alpaca.

“It’s all about genetics,” Sheila Temple says as she tends to her alpacas. She points to her prize alpaca, Sun Greybill Boomer. The 1-year-old male’s father sold last year for $108,000 at an auction. Now, Greybill is for sale for $50,000.

In the world of alpacas, she says, good breeding pays off. So does soft fleece. An alpaca can produce up to 12 pounds of fleece per year, which sells for between $4 and $12 per ounce.

Many alpaca owners enter shows, Temple says, hoping their animals will win awards for the quality of their fiber, driving up their value.

In America, though, fleece is secondary, according to Angelo Ponce, president of Lanart, a North Carolina-based company that imports hand-made alpaca products from Peru. That country leads the world with more than 3-million alpacas, producing 4,000 tons of fleece annually.

“The animals in Peru are raised as fiber. They don’t show them,” he said. “It’s a fiber market. In the States, it’s an animal industry.”

Richard J. Sexton, a professor of agricultural and resource economics at the University of California-Davis, compares the U.S. alpaca market to a pyramid scheme. Last year he co-wrote a paper titled Alpaca Lies? Do Alpacas Represent the Latest Speculative Bubble in Agriculture?

“Fundamentally, the usable product that they produce, which is the fiber, just isn’t worth very much,” he said in a recent interview. “People make money by selling other alpacas to other people. But ultimately, at the end of the day, the value depends on the product, and it can’t go on forever.”

That, said Cindy Berman, spokeswoman for the owners and breeders association, is “an unfortunate assumption.” Alpacas are not a farming fad, she said, and the product they produce is profitable.

“The alpaca industry since the ’80s has been seeing a slow and steady growth. It’s not like the ostrich, where all of a sudden one year everybody had them,” Berman said. “It’s something we see continuing to grow. It’s definitely not proven to be a fad.”

***

Raising alpacas isn’t just about money, owners of the animals say. It’s about lifestyle.

For those who want to invest in alpacas but don’t want to struggle with starting up their own farms, many existing alpaca farms will house others’ alpacas for a fee. That option appeals to the suburban set, like 58-year-old Bob Goudreau, who plans to find a farm near his Ocala home “so that I can visit my alpacas on the way back from Sam’s Club.”

The fun, flexible alpaca life is a message various groups in the American alpaca industry try to convey regularly in cable television advertisements and infomercials.

One ad for the Web site ILoveAlpacas.com features a gray-haired couple, happily strolling through fenced-in fields with their alpacas.

A smiling man, clad in blue jeans and a polo shirt, testifies:

“I love alpacas because raising alpacas gave me an opportunity to walk away from a 30-year corporate career and all the stresses … that were associated with that career. Together my wife and I have been raising alpacas for several years now. We’re having a great deal of fun together ... and it’s the best decision that we’ve ever made.”
Manning a booth at the Sunshine State Alpaca Expo in Ocala, Glenn Berns speaks with similar fervor.

Berns, 62, lived with his wife, Nancy, in St. Pete Beach for more than 20 years. He worked as a business executive, selling data procurement services to financial institutions. They moved to Georgia and started an alpaca farm in 2000.

“We wanted to get into a simpler lifestyle,” he says. “The idea appealed to us greatly. Then it just kind of mushroomed.”

Now in addition to caring for more than 40 alpacas, they run a bed and breakfast for people who want to experience the alpaca lifestyle for a weekend and a fiber-processing mill for farmers who want to turn their animals’ fleece into more marketable products. For a few months every year, Glenn Berns travels the country, visiting farms and shearing alpacas. In March, he sheared about 400 in Florida.

At the expo, Berns sings the praises of alpacas to new buyers and tries to drum up customers for his shearing business.

In a show ring, owners proudly trot out their alpacas. Some are for sale. Others are available for breeding.
But outside the show ring, beyond the booths, row after row of alpacas calmly hum and bleat in their barn stalls as prospective buyers pass by.

The Temples stand among them, wearing shirts embroidered with the name of their farm, Sun Spiced Alpacas.

They introduce themselves to other alpaca owners and eagerly hand out cards to promote their new business.
It’s a pastime that they don’t plan to give up, no matter what their farming future has in store.

“Next year, we’ll make back our initial investment. After that, it’s gravy,” Sheila Temple says. “Even if the bubble bursts, we love them.”

Catherine E. Shoichet can be reached at cshoichet@sptimes.com or (352) 860-7309.

[Last modified May 27, 2006, 20:18:33]


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