July 12, 2006

Alpaca Sweaters, Made in .... ha? USA?

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Everyone knows Alpacas, LLamas and Vicunas are native to the Altiplano region in Peru, Bolivia and Chile. Up to now, when one talks about these camelids and the goods produced with their wool, there is an automatic connection with the Andes. But, that connection might be about to change. More and more, there are Alpaca and Llama farms being started in the US. These farms and their respective investors have seen the golden egg in the form of an Alpaca.

The Alpaca wool is finer and softer than its counterpart sheep wool. It is already established as a luxury item in the US and Europe. Now, the investors are hoping the use of Alpaca wool becomes widely used.

The following report from Bloomberg.com illustrates this development very well.

Ohioans Flock to Alpacas as Investment Yields $2,500 Stud Fees

July 11 (Bloomberg) -- Barbara Wille doesn't have to go far to breed Crown's Bay, her prize black male alpaca, for a stud fee of $2,500. Ohio has more alpaca farms than any other state, so she just loads Crown's Bay into her minivan for a short trip.

``We always get stares,'' said Wille, 61, who raises 23 alpacas with her husband Ed, 66, on their farm in Valley City. ``He looks like a head on a stick to passing cars.''

The Willes say they have earned $200,000 since starting up in 1994 by selling the furry creatures, winning stud fees and housing 12 alpaca boarders for $3 a day. Investors industrywide are paying $5,000 to $1 million per animal, said Cheryl Laufer, 52, owner of Spirit Wind Alpacas of Newbury, Ohio. They're betting that alpaca fiber, softer than cashmere and warmer than sheep's wool, will become the luxury fabric of choice.

The combination of inexpensive grazing land, a failing manufacturing economy and the influence of several large farms has made Ohio the U.S.'s alpaca capital. The state has 435 farms with 8,000 of the animals, which are cousins of the llama and camel. About 12 percent of all alpacas registered in the U.S. are in Ohio, according to the Alpaca Owners & Breeders Association in Nashville, Tennessee.

``Alpaca farming provides us with the quiet lifestyle we wanted for our retirement,'' Barbara Wille said. ``It's a nice supplement to our retirement income.''

Even small-scale farmers can make returns of 30 percent to 50 percent over the lifetime of an alpaca, Laufer said. The animals live 15 to 20 years. They can be fully insured, and ranching tax laws allow the write-off of some expenses, said Laufer, a director of the Alpaca Farmers & Breeders Association, which represents the industry in Ohio.

``We're doing better with this than we ever did in the stock market,'' she said. ``It's the investment you can hug.''

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