[The Working Man]

Scam?, well I suppose that any industry could have that name attached to it over unscrupulous people gets their hands on it.

For myself, and all of the other small Alpaca Farmers this is no scam. And they are livestock, not pets. You have NO idea how many times I’ve had to correct that. And I blame the Alpaca Owners and Breeder Association for that. They had a stupid ad campaign a few years ago calling Alpacas the “Huggable Investment”. They are no more huggable than a sheep or a goat. Yes they are soft and feel wonderful. But they don’t like it and they “can” display that.

As far as “subsidy” goes. I’ve never seen one! My farm is a business that I run as a business. I can take business related deductions off of my taxes and I report and pay taxes on my sales.

[kanawa]

How much for a breeding pair?

[outofsalt]

Curious, are they bred for meat, obviously fur, but isn’t that market struggling? What is the Alpaca trade like? (I’m not Chinee)

[rabidralph]

If you drug them then they are much more huggable.

[Zhang Fei]

After a bit of reading on the subject, I'm gonna have to agree with you - Stossel's take is somewhat misleading, whether he considers them pets or livestock. These tax deductions are available to farmers or pet breeders anywhere. And nobody maintains a herd of dozens or hundreds just for tax deductions that have to be taken off investment expenses. I'm beginning to wonder if Stossel is just as sloppy with some of his other reports. I understand journalists have deadlines every single day, but this is a hatchet job. Best of luck to you in your continuing endeavors.

As a long-time China watcher (hence the Internet alias aka the name of a 2nd century Chinese warlord), I'd be surprised if the Chinese can do anything cheaper in relation to raising livestock. Beef, chicken and pork are all cheaper stateside, based on my occasional readings of news wire items (Reuters, AP, Bloomberg) regarding China. However, if labor is a big part of the cost of alpaca wool, you may have some issues going forward.

Still, the Chinese labor cost advantage isn't what it used to be. Wages there are 4x or more times many countries in the region, including India, Pakistan and much of Central Asia (aka the -stans), which have the climates necessary for wool bearing animals to thrive. They are also not only higher than those in Ecuador, Peru, Bolivia and Paraguay, but also rapidly accelerating. Chinese wages have been held down for a long time via explicit government policy, meaning they have not kept pace with productivity growth, but rising expectations among the Chinese labor force have led to government relaxation of policies that slowed wage growth. Bottom line is that the low wage threat from China is about to disappear, after factoring all the other costs of goods like transportation lead time, energy costs, communication snafus, et al.