01.31.16
State of the Horse 2016
In discussing the State of the Horse I am speaking of two interconnected thoughts, the animals themselves as well as the the different groups of individuals that are involved with horses. In reality I guess, the State of the “Horse” is almost exclusively tied to how the people involved with horses are doing. I am going to speak to my knowledge of what I see in the Commonwealth of Kentucky, though in many ways what I see here would be relevant in a number of other states.
In Kentucky there really are two horse realms, that of the Thoroughbred industry and that of all other horse breeds lumped together. It is much easier to quantify the state of the Thoroughbred industry because there is a lot of data collected about it. One of the first pieces of data most people talk about is the number of foals born, in 2015 that was a little over 22,000 which was a 1.9% increase over 2014. It’s interesting to note though that in 2006 that number was a bit over 35,000 and I do remember years with numbers higher then that, so that tell you how much the “Great Recession” impacted what really is one of the most insulted horse industries anywhere when you consider where the money comes from that drives that industry. Sales were also up and overall growth in the industry was also up by a couple of percentage points. Interestingly enough I think you could watch the Thoroughbred industry and know how the overall economy is performing, provided you treat it as a lagging indicator as opposed to leading. So if the the Thoroughbred numbers are getting better you can probably assume that the underlining economy is getting better or has at least stabilized in a way that allows for growth. The Thoroughbred horses themselves are probably doing better then in years past because the number of foals being born each year is lower, thus fewer horses for the industry to have to support and the efforts to support Thoroughbreds after their retirement from racing has also produced meaningful impacts on the well being of those horses.
In talking of the other equine realm, this encompasses every other breed and would also include those off the track Thoroughbreds (OTTB) that have found themselves with a new career. Actually I want to clarify, I am going to exclude one breed from this report because I believe it falls in between the two realms I am focusing on, that is the Standardbred industry, which in some years you could lump with the Thoroughbred industry in how its probably doing and in other years not so much so. I think the simplest way to define the two realms is that you can really think of the Thoroughbred industry as an industry, where as the other horse realm is less of an industry and more of an individual endeavor. I will probably get a few nasty emails saying that is an over simplification but for discussing the State of the Horse I think its the way most people think of these two realms.
Now let me try to define and clarify this second realm, which for the most part we can consider the pleasure horse realm. Now in truth there is an industry that exists because of the pleasure horse, but this industry is more generalized and many parts of it provide for the horse as a secondary aspect of the business not the primary. Think of the local feed store, selling feed and supplies to the people for their pleasure horses is significant but by far isn’t the only revenue generator that keeps the store profitable. A prime example of how the pleasure horse realm is doing is to look at your local TSC store, if you think back more then 1o years to how the store was laid out relative to what they carried for horses and you go in there today and tell me you don’t see a difference. Now I use TSC as an example to clarify the two realms because most Thoroughbred trainers are not using their local TSC store for supplies, they have a pretty defined supply chain of specialized providers but this is because the Thoroughbred industry is large and organized and benefits from that economy of scale. So in Kentucky I consider the pleasure horse realm to be all those people involved with horses outside of the Thoroughbred racing industry, again some are going to take issue with that but in discussing the State of the Horse that is the construct I am going to use.
So here is the point at which I get to discussing my views on the State of the Horse for 2016, which is really to say what it was at the end of 2015 and what the trend going into 2016 looks like. Back to my example of TSC, here is a business that most horse people I would venture to say know in one capacity or another, you may not buy your feed there, but you have probably purchased something horse related there. The change that I have seen there to me is indicative of a business tweaking their retail layout to better meet the needs of those patronizing their stores. That is to say that in the last 10 years they have seen their revenue from horse related items decrease, interestingly enough while they have seen the interest in chickens increase. Obviously a part of that has been driven by the urbanization of America as a whole which we also see in Kentucky but a bigger part has been the downturn in the rural middle class which has significantly impacted the pleasure horse realm. The actual increase is chickens seems to be much more related to urbanites wanting to say they are raising some of their own food, to clarify, eggs because they don’t want to kill their own food but they can produce eggs and its cool because they can relate it to the same product that they would go to super market to buy. I digress some in talking chickens but the point being is that the growth in interest in chickens vs. the decline in horses are two separate events that make my point about the nature of the pleasure horse industry. TSC is a business that supports the pleasure horse industry, but not exclusively and as markets change they change their business models to survive. Now this in some ways is a good thing because a lot of the businesses and professions that support the pleasure horse industry are not going to go out of business because of a down cycle in that realm, so that as the pleasure horse realm grows again the necessary support businesses grow with it. The short of it though is that the pleasure horse realm has seen a significant contraction since the “Great Recession” and that contraction continues. One of the structural changes that I have seen over the last 10 years has been a significant increase in other forms of back yard/off road entertainment. In the past 10 years we have seen an increase almost explosive in the numbers and variety of off road vehicles. Where ATV’s used to be tied to a business or farm need first and those people then might use them on the weekend for a little fun. Now ATV’s have become the new status symbols with ATV parks springing up around the state and I see convoys of trailers hauling them on the weekends only to wonder how many horse trailers have been traded in for flatbed trailers.
One of the real negative impacts the “Great Recession” has had is truly on the State of the Horse in regards to the horses themselves. We all like to joke about free horses, and I tell my non-horse friends if you want a free horse I can get you one, but I am the first to follow that up with the fact that I can get you a free horse, but that horse ownership is not free, actually as we all know it can be down right expensive. The problem is there was an explosion of horses back in the early 2000’s both from professional and back yard breeders and when the economy collapsed these horses very quickly became expenses their owners couldn’t afford. So in 2016 I believe we are still right in the middle of this crisis in that a lot of those horses are turning up in all the wrong places and are suffering fates that weigh or should weigh on all of us as horse people. My expectation is that it will take another 10 years for that issue to resolve itself through the normal process of life and death and not because we come together to solve it. Ultimately I wish the horse world as a whole had put together a framework for dealing with this reality, that it would be better for owners to have the option to humanely euthanize their horse(s) when they can no longer effectively care for them or be certain of what would happen to them if they were sold without having several organization that shall remain unnamed vilify them for trying to make the best choice for the horse in an extremely tough situation. Now I could write a whole article on my ideas on that and probably should but I am trying to stay on point with this article so I will limit my digressions.
In summing up what I consider to be the State of the Horse in 2015 by making some clear points based on my awareness.
The State of the Thoroughbred industry is largely stable with modest growth, though there are some notable head winds in the future that may impact that growth though I think the industry remains largely insulated from any structural changes.
The State of the Pleasure Horse Realm in Kentucky I believe has stabilized though there are structural changes that have occurred that will likely limit any kind of significant growth and certainly I would not expect us to get back to the numbers we saw in the late 90’s early 2000’s. In honesty some of the growth we saw back in the 90’s and early 2000’s wasn’t based on sustainable math and obviously I am not just meaning in regards to pleasure horse realm. I think for those horse breeds that are forward looking there is potential to continue to grow because horses will continue to have a connection to humans that is hard to explain but no less real.
The State of the Horse in regards to the animal itself still pains me, and I will always continue to promote responsibility in regards to the welfare of horses because they deserve nothing less than our best efforts to provide for them in a human and ethical way and to show our appreciation for the beauty and magic they bring to our lives.
Kentucky Colonel
Thomas P. Demond
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