(By Avalyn Hunter)
While this year's Fasig-Tipton yearling sale at Saratoga was down somewhat, optimism is still widespread in the 2012 yearling market thanks to solid performances at regional sales. From Minnesota to Florida, average and median prices for young horses have been either holding steady or gaining over 2011 standards. But before concluding that recovery is complete in the Thoroughbred industry, a sobering look needs to be taken north of the border, where Ontario horsemen are providing an unwilling object lesson on just how fragile and unpredictable the Thoroughbred marketplace can be. Ontario horsemen's situation is a warning on how fast a single legislative decision can knock the props out from under a region's breeders and owners.
The issue, of course, is the Slots at Racetracks Program (SARP) for Ontario racing, which was removed by the provincial legislature effective March 31; the removal was upheld by a review panel in findings released August 24. The latter decision has been devastating to Ontario's horsemen, many of whom had their hopes pinned on a reprieve. And no wonder: SARP was funding 64% of purses in the province. For those few owners and breeders with programs capable of competing on the international stage in the sale ring and at the track, the loss of SARP revenue is unwelcome but not insurmountable. But for the smaller owners and breeders whose profitability depended on the generous purse structure at Woodbine--in 2010, the third highest for any state or province in North America after New Jersey and Kentucky--the loss is catastrophic.
Ironically, the inflow of money from SARP has had only modest benefits on the market for Ontario-bred yearlings, as SARP funds were not restricted to or even primarily used for races for Ontario-breds or Ontario breeders' awards. But the inevitable reduction in the Ontario purse structure following the end of SARP is likely to have a backlash at the Canadian Thoroughbred Horse Society's Canadian-bred yearling sale next month at Woodbine. And Ontario breeders are now looking at their mares in foal and their weanlings of this year and wondering if there will be any chance at all to recoup their investments, much less make a profit; some are already deciding that they will be unable to remain in business. In an economy still more fragile than many people acknowledge, even a relatively small reduction in yearling sale prices, coupled with a likely shrinkage in racing opportunities, may well send the Ontario breeding industry into a downward spiral from which it will not soon recover.
As the industry struggles with primary concerns, secondary effects also are predictable. Loss of value in racing and breeding stock likely will increase the strain on already overburdened rescue and rehoming operations, for example.
To its credit, the provincial government has recognized that Ontario horsemen will need help if the core of Canada's breeding and racing industry is to remain viable, though the review panel noted that the $50 million allocated for the purpose over the next three years is insufficient for the need. But the lesson here for U. S. horsemen is not a critique of Ontario's actions for good or ill; that is between the province's government and its voters. The warning for American owners and breeders is that regional markets depending on slots or other forms of revenue authorized by state governments are equally vulnerable to shifts in politics and can reverse upward trends at any time. Optimism may be in the air, but those who temper it with a healthy dose of caution and an eye on activities in their states' legislatures may be showing the better part of wisdom.