The alpaca pyramid scheme is, apparently, alive and well. (By pyramid scheme, I mean "wholesome agricultural cottage industry," although I don't think you're required to own a cottage to purchase an alpaca.) Frankly, since I added TiVo® to my life, I miss out on a lot of the debauchery which comes during those brief interruptions to the shows that I watch. Among endless diet pill spots, exercise commercials, and homoerotic pick-up truck ads, I've also been "missing" the continued sales pitches of the alpaca "ranchers," desperate to get more gullible folks signed up before the bubble bursts and the warm, friendly, fuzzy (though utterly retarded-looking) bottom falls out of their market.

Now, if you watch TV, you've probably seen an alpaca ad or two. They're the ones with the llama-like critters and the old farts tickled pink about how friendly their new beasts are – not to mention how lucrative it is to enjoy the "alpaca lifestyle."

Do some research, and you'll find they're right. Alpacas are friendly. And raising them is lucrative. Darned lucrative, at the moment, because people are paying, on average, around $30,000 per alpaca at auction, according to figures Tina L. Saitone and Richard J. Sexton compiled for their research paper, "Do Alpacas Represent the Latest Speculative Bubble in Agriculture?" I use those figures because I don't go to many alpaca auctions. Nor am I real keen on research. I'm surprised I even found the stuff Sexton and Saitone came up with.

Their figures were gleaned through monitoring actual auction results – because there's no good place to get such information out there. For being such an excellent investment opportunity, the alpaca industry is surprisingly tight with hard info of the numerical flavor. Such stoic silence doesn't do much to dispel the pyramid-scheme thing – as most pyramid schemes tend to be a bit vague when you try to peek under their tissue-stuffed blouses.

Which is precisely what you'd have to do, if you had any sense, before buying an alpaca. (Look at some numbers, not peek under anyone's blouse. Although it certainly couldn't hurt, could it?) So what are these critters worth? In Central and South America, where the overwhelming majority of the world's herds live, and where the alpaca is supposed to live, having evolved to live there in the higher elevation, lower-temperature, mountainous terrain of Peru, alpacas can be purchased for the dazzling sum of somewhere around a hundred bucks. (Although I'm not totally sure on that figure, either – the Alpacans won't say how much Peruvians sell alpacas for, and since you can't import 'em, nobody much talks about it, as it's largely a moot point. Any Peruvians out there know how much a top-notch alpaca fetches back home?)

Are these alpacas inferior to American alpacas? Nope, not really. In fact, our alpaca herds were imported from Peru less than thirty years ago, with the first alpacas imported to the United States back in 1984.

No, the price difference is all about supply and demand. In Peru, there are several million alpacas, which is all the supply anyone in the region seems to want. Up here, there's more than 80,000 alpacas – a number which makes you wonder how much longer we've got before old coots in search of friendly farm animals begin to ask, "What the *&#$* am I thinking, paying as much for a glorified super-sheep as I would for a nice mid-luxury car?"

I mean, c'mon – old coots love their Buicks.

Okay now, back to value. An adult alpaca makes between 5 and 10 pounds of fleece per year. Let's say 10 pounds. That fleece varies in quality, but let's say (just to be nice) that it's all primo stuff. Primo alpaca fleece fetches, on the open market, between $5.00 and $7.50 per pound – but that's just the good stuff. The crud fiber can go for as little as fifty cents per pound.

So, let's say an adult alpaca makes 10 pounds of primo fleece per year. It doesn't, but let's say it does. That'd be $75 per year. To show what a swell guy I am, I'm going to round that figure up to an even C-note. I'll also be extra generous, and say that this mythical alpaca did so every year of its life – a span of between 15 and 20 years. We'll even go one further, and claim that the quality of the fiber never decreased (which isn't true – in Peru, they slaughter the alpacas for meat at age 7, because the fiber gets coarser with age).

Even with all those assumptions, you're looking at an animal that produces $2000 worth of wool over a 20-year life span. So, to get your money back on a breeder, you'd have to breed 20 alpacas from that $30,000 alpaca you bought. Y'know, have her breed each year, breed her daughters, etc.

Of course, we're glossing over a slight problem – the most optimistic cost estimate to raise that alpaca here in the States is $169 per year. Y'know, for feeding, vet bills, etc. So, each alpaca you raise for wool is actually losing you about seventy bucks a year. Money doesn't grow on alpacas. It shoots out their nether regions.

Good thing they cost so much, or you'd be liable to really dig yourself in a hole! As it stands, only the truly foolhardy will be able to afford to buy enough alpacas to get himself in serious trouble with the kind-hearted charity cases that make up our domestic alpaca herds.

The most important angle to the scam, er, industry is the lockdown on domestic supply. Were you able to import alpacas freely from Peru, that pesky "we sell 'em for a hundred bucks" thing would quickly throw a monkey wrench into the speculative lunacy currently taking place. Keep in mind that, while the average price may be around $30k, alpacas have actually sold at auction for as much as a quarter of a million bucks. I kid you not.

For that kind of money, you could move to Peru, buy yourself a thousand alpacas, however much otherwise useless mountain graze land you need for 'em, and have enough left over to hire Peruvians to do all the actual work. All for the same amount of money you'd spend on a single American Super-Alpaca back in 2002. (The most recent auction results Saitone and Sexton had in their report were for 2004, where the silliest alpaca sale was a measly $103k.)

Do these American Super-Alpacas shoot lasers out of their eyes? Or poop nuggets of refined platinum?

Nope. But they do appear in the Alpaca Registry, Inc. files. This bloodline registry is the linchpin of the scam, er, investment opportunity. Without it, in spite of the import restrictions placed on livestock from Peru (due to hoof-and-mouth disease concerns), people would find a way to bring in alpacas. I mean, when you can buy a 150-pound, llama-lookin' thing for a hundred bucks and sell it for twenty grand, you'll find a way. I'm thinking really fat poor people would start crossing the border with baby alpacas shoved up their butts, personally. That, or maybe really poor fat people. Take your pick.

Point is, such smuggling would do you no good – because only registered members of the bloodline (which was conveniently closed back in 1998) are worth diddlysquat! Something like ninety-nine percent of all American alpacas are registered, and if you bought a non-registered alpaca, you wouldn't be able to sell it to anyone who wanted in on the pyramid scheme, I mean, rewarding alpaca lifestyle. The only people who'd want to buy your alpaca would be folks who wanted to raise alpacas to sell their wool – and as we've already established, you lose money doing that. You nitwit.

Even more adorable is the requirement of the Alpaca Registry that only "naturally conceived" alpacas can be included. No space-age lab sex for your herd, no sir! If they don't diddle as God intended, they aren't allowed into the registry. Ergo, they're without value. Of course, if we're going to talk about what God intended, then we should probably address the insanity of trying to raise an animal bred to live in the Peruvian mountains in, say, Florida. Or Louisiana. But I think I'll get to that later.

Why, you might ask, can't you use beakers and such to knock up your alpacas? For the same reason as everything else associated with these friendly, fuzzy tulips – to make someone stuck with overpriced alpacas a quick buck. In this case, to encourage stud fees, although anyone who has actually seen an alpaca would have a hard time referring to one as a "stud."

Now then, let's get back to the whole climate thing. Like I said, these animals were supposed to live in the Peruvian mountains. Y'know – the Andes. So, I can sorta dig someone living in Colorado deciding to try and raise 'em. Or even living in Oregon or Washington State. But there are actually ranchers living here in Louisiana and other Southern states.

Man, that's mean.

Raising alpacas in Louisiana would be like raising camels in Alaska. Sure, modern technology might let you do it – but you'd have to be kinda retarded to try. (By the way, if I'm killed in the next month or so, please check my body for fibers – alpaca hairs are smooth, with a hollow, air-trapping core. I'm thinking you'll probably find a few on my dead, mangled corpse. Also, while I may be trampled, that probably won't be the cause of death – alpacas have soft hooves that are very gentle on pastures and lazy "journalist" investigators.)

Okay now, there are a couple more ways alpaca "ranchers" make money. One is through operating bed-and-breakfast sorts of things for folks who want to experience the "alpaca lifestyle." Guess you can think of those as being sort of like sales pitches where the potential customer pays you for the privilege.

The other way is through the sale of alpaca products right there on the ranch. Y'know – hats, socks, vests, booties to protect delicate alpaca feet from hot asphalt, stuff like that. The stuff ain't cheap. And best yet, it also ain't made on the ranch. Or made out of wool from the ranch. Why? Because domestic production isn't anywhere close to adequate to meet any sort of demand for alpaca products.

So, most of these ranches instead sell products imported directly from Peru. Made from Peruvian alpaca wool. In fact, the Alpaca Fiber Cooperative of North America – the largest conglomeration of domestic alpaca wool production – currently offers only one product made exclusively from domestic alpaca wool. A pair of socks. That costs $18 a pair. And is presently out of stock at the AFC's sales website, AmericasAlpaca.com.

I have no idea how angry the Alpacans are going to get with me. Maybe I'll get lucky, and they'll turn out to be like their beloved critters – friendly and good-natured. Sadly, I'm thinking they'll be like anyone who sees their net worth threatened – pissed off and litigious. Lucky for me, this is all in the name of humor, or I could be in serious trouble. I'll probably have to bank on the other ace-in-the-hole I've got going on: the fact that anyone who decides life is too hectic for real jobs, yet too short to crunch numbers before sinking their life savings into mountain chinchillas, is probably not going to have the time or inclination to read Red Shtick.

They're too busy direct-mailing people about the opportunities of getting in on the bottom rung of the furry, laid-back pyramid. Or, if you prefer, "mountain of profit."

Basically, for a domestic alpaca herd to make money on its own merits – meaning, on the value of its wool – prices for alpaca wool have to increase dramatically. Unfortunately, alpaca wool is already very expensive compared to other wools – just look at the prices on AmericasAlpaca.com; you'll see what I mean. When you're already talking about $150 for a cardigan – $90 if it's on clearance sale – then you don't exactly have a ton of room to go up, do you?

Plus, you've got pesky foreigners with larger herds and lower prices who could increase their herd sizes if alpaca wool shot up in price. To put it another way, to win at this game, we'd have to out-Peru Peru. We'd have to beat a developing nation at growing its indigenous species. (Or we'd have to figure out a way to simply ban the import of Peruvian alpaca wool to choke supply, which is one plan the various American alpaca groups toss around under the guise of "branding" the domestic supply to differentiate it from what they'll proceed to label as inferior, foreign alpaca wool.)

Now, if you check out the Wikipedia entry on alpacas, you'll notice that there's a vague reference to some mysterious inability to increase the size of the Peruvian herds. Somehow, I'm thinking, if we had the sorts of fiber prices that an American alpaca industry would require, we'd "miraculously" see the Peruvians figure out how to grow their herds just a smidgeon. But maybe I'm wrong. And maybe a mop with legs that produces ten pounds of wool per year really is worth as much as a nice Mercury Grand Marquis. I mean, heck, they both have heated seats, right? Actually, I'm not so sure – I don't think the Grand Marquis comes with heated seats standard just yet. But I could be wrong.

Oh well. Guess I just don't get this one. I'll leave it up to the Alpacans to explain it. They, after all, are convinced they're geniuses for getting in on this particular bonanza. Maybe they can clear it up for me over a nice ostrich omelet, while we watch chinchillas frolic underfoot and smell the tulips in full bloom.

The whole thing just smells like an amusing scam to me. Amusing on the outside, I mean. Not so amusing if you're low guy on the pyramid, I'm thinking. I still don't get how so many people buy in without looking at what the alpaca is really worth, though. Would you buy a dairy cow without researching the price of cheese? How about a $30,000 dairy cow?

It'd be funnier if it weren't all true. But it's still pretty funny.

No alpacas were harmed in the writing of this article. Also, the right to write this article is available for the meager sum of $2,000 to any interested parties. While you can write an article on alpacas and any "scam" theories associated with the breeding and sale of those creatures, only licensed articles will be included in my exclusive "Ridicule Alpaca Database" (RAD). As such, only RAD articles can be considered the definitive (and, therefore, investment-grade) options for your comedy dollar.

Jared Kendall is a freelance writer in Baton Rouge where he lives with his wife and two children, three dogs, and four mortgages – that's in order of expense. He can be reached for comment at jared@redshtickmagazine.com.

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