The Alpaca Industry

Known for their calm temperaments and soft fleece, alpacas were at one time the next hot thing to backyard farmers. A decade ago, the market was frenetic, with some top of the line animals selling for hundreds of thousands of dollars.But the bubble burst, leaving thousands of alpaca breeders with near-worthless herds. more »

In addition to all their positive attributes, over the past decade alpacas have been the financial ruin of Americans across the nation. Not long ago, alpaca farming was a booming industry, with the top breeding alpacas selling for hundreds of thousands of dollars. Nowadays, the few remaining alpaca farmers struggle to stay afloat. Alpaca rescues have cropped up to save the animals who have outlived their economic utility. more »

Alpacas were introduced into the U.S. from South America in 1984, and the domestic alpaca herd has grown rapidly in the succeeding 20 years. The benefits of raising alpacas are touted routinely on national television, and alpaca breeding stock in the U.S. sells routinely for prices in the range of $25,000 per head, many timeshigher than prices obtainable in Peru, where the world’s largest alpaca herd resides. We study the evolution of the U.S. alpaca industry and ask whether today’s current prices for alpaca stock can be justified by fundamental economic conditions governing the industry, or whether alpacas represent the latest speculative bubble in American agriculture. more »

We revisit the U.S. alpaca industry six years after having conducted a study suggesting the industry was in the midst of an unsustainable speculative bubble. We show that in the aftermath the bubble has largely burst. We also offer some lessons intended to prevent the recurrence of such bubbles in agriculture. more »