Equine Business Resources - Economic Equine Outlook

Horses October 29, 2012 Print Friendly and PDF

       There are many indications of market saturation due to overproduction and the loss of the slaughter option for unwanted horses. Most horse shelters and rescues are full. University donations of horses are at an all-time high, and most horses are being turned away. Reports of abandoned horses continue to increase along with the cost of production.

National Situation

  • Approximately 9 million horses in the United States, with only 2 million horse owners
  • The total impact of the horse industry in 2005 was estimated at $102 billion
    • $32 billion of that is from recreational activities
    • $28 billion is from the horse show segment
    • $26 billion is from the racing industry
  • There are 453,000 direct jobs and 1.4 million total equine-related jobs in the horse industry
  • Market saturation is decreasing horse prices, while the anti-horse slaughter legislation is adding 100,000 horses to the market each year
  • Though breed associations are breeding fewer mares, single mare owners and recreational owners are still breeding at the same rate
    • These foals are overall lower-quality horses which add little or no value to the industry
  • The depressed economy, market saturation, and cost of production are expected to have a negative impact on the horse industry for the next few years

Price Outlook

  • Prices for horses have always varied
  • Top horses are still bringing good prices, while average and below-average prices continue to decline
Overall Prices: Decreases 10-30% 5% maintains or increases

 

  • Horses in the bottom third of the market are selling below $500 per head
  • Cost of producing horses continues to increase, along with cost of feed, veterinarian care, supplies, facilities, and labor
    • Example:
      • Basic cost to produce a two year old = $5,000 to $6,000 in an efficient operation, $8,000 to $10,000 in an intensive operation
      • To produce a profit, the two year old needs to bring $8,000 to $10,000
      • Stud fees are $2,000 to $3,000 and up

Economic Opportunities

  1. Racing
    • An influx in casinos supporting the racehorse industry will increase the breeding and training for operations within any state
    • A good racetrack will attract owners and breeders from other states
  2. Competition
    • While horse shows in general have declined, specialty areas such as calf roping and barrel racing have attracted a large number of competitors
  3. Recreational
    • Trail riding and recreational activities provide a huge opportunity across the country
    • Developing trails, in national forests and on state-owned land, with more campsites, housing, and dining facilities, provides a huge opportunity for economic growth 

Funded in part by the North Central Regional Center for Rural Development (NCRCRD)

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This work is supported by the USDA National Institute of Food and Agriculture, New Technologies for Ag Extension project.