Alpaca Compounding

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 ratio.

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.