A major investment benefit of owning alpacas is based on the concept of
compounding. Savings accounts earn interest, which if left in the account, adds
to the principal. The increased principal earns additional interest, thereby
compounding the investor's return. Alpacas reproduce almost every year, and
about one-half of their babies are females. When you retain the offspring in
your herd, they begin producing babies. This is "Alpaca Compounding."
The following graph illustrates how a herd might grow in size over a ten-year
period, assuming you begin with five pregnant females and two males. The herd
growth depicted represents alpaca compounding at work. The initial herd grows
to 126 animals, assuming an 80% reproduction rate and a 50/50 male/female
Please note that this graph, while clearly illustrating the principal of "alpaca
compounding," does not depict the average owners' approach to alpaca ownership.
Most breeders elect to sell all or some of the annual off-spring production for
practical reasons, such as recovering their initial cash, acreage and building
costs, and labor, not to mention making a cash income.
Please note you can select your own variables, such as the num-ber of females,
the ratio of males to females born, the reproduction rate, or breeding age of
the females when first bred. Any variables that you do not select will default
to the above assumptions.