MarketWatch Blog - All Comments

re: Surviving the Recession -- 2010 Stud Fees

cke — Tue, 27 Oct 2009 14:45:34 GMT

I believe the stud fees should be dropped. And I really like the comment from Kevin; there should be a limit on the number of mares bred to a stallion.We stand a better chance of a better return at the sales (if you choose to sell). I just took over a 60% loss at the Sale (Oct.26, 2009) because I need to thin my herd I allowed the yearling to be sold. This was a from a first year sire and his numbers (the whole day actually) were really bad. I believe the commissions at the sales needs to be adjusted for the sale company and the agents. We breeders are having a hard time of it so why do we have to have more hardship by high commission rates. I took that 60% loss and that does not even include the out of pocket expense of raising the foal for over a year. The buy back rate was high. Every aspect of the breeding to sale needs to be realigned so some profit can be made by all. I do not overbreed my mares but you can bet I will be dropping to even lower priced stallions.

re: A Stroll to the Top

KODA — Tue, 27 Oct 2009 14:41:00 GMT

DYNA STROLL HASTINGS RACECOURSE RACE 8 OCT 25/09

re: Surviving the Recession -- 2010 Stud Fees

onechaser — Mon, 19 Oct 2009 19:28:52 GMT

How about Stallion owners only getting paid when the foal is "born live" instead of getting paid when the mare sells at auction. How many mares abort after stud fees were paid at the aution? Now the new owner is out a foal but the stallion owner isn't at any loss at all. It would be nice for mares to get their real worth at auction instead of the price of the foal they are carrying. Let the contract carry to the new mare owner and let them pay the fee when the foal is born. That way less garbage mares will be bred to valuable stallions and good mares will carry on.

re: Surviving the Recession -- 2010 Stud Fees

StarFan — Mon, 28 Sep 2009 16:26:07 GMT

The yearling sales are off closer to 50% than 35% if you take the broad middle of the market after dropping both the top and bottom 10%. That's where most breeders are. The 2009 stud fee reduction was way too small and shouldn't be used as a starting point for the upcoming year. Nothing less than a stud fee reduction of half should be considered by the breeder. Ask yourself this - if the fee had been slashed by half in 2008 would my 2009 yearling have yielded a profit commenserate with risk?

re: Surviving the Recession -- 2010 Stud Fees

NTS — Mon, 28 Sep 2009 13:10:52 GMT

The stud fees will come down again. If they don't, the buy back rate will be even higher than it was this year.

I just don't know where these breeders are going to come from if they keep the stud fees where they're currently at.

If the stud fees don't rise, I'd expect a large number of the covers to come from in house. I'd be interested to see those stats on how many stallions are covered by mares who the farm owns.

re: Surviving the Recession -- 2010 Stud Fees

Porkpa — Mon, 28 Sep 2009 08:50:06 GMT

If the connections of the top stallions want to protect their customers, they need to do one of two things or possibly a combination of both.

(1) Maintain their fees. In doing so, they will almost certainly reduce the number of mares bred to their horses, thus helping those breeding to the stallion when it comes time to market their yearlings. Rule number one of Keynesian economics will grab hold - that is (all other things being close to the same), if you lower the supply, the prices will rise accordingly.

(2) Lower stud fees, being careful that the numbers of mares bred to the stallion is fixed to a certain number in order to avoid flooding the market.

re: Surviving the Recession -- 2010 Stud Fees

Husky Joe — Sun, 27 Sep 2009 10:20:40 GMT

Will the same operations that demand reductions in stallion fees also be willing to sell their stallion prospects for 20 or 30 percent less?

re: Surviving the Recession -- 2010 Stud Fees

GREGCFIN — Sun, 27 Sep 2009 08:26:53 GMT

How about the sales commissions. This is the killer that no one is addressing. You finally sell a horse, then you have to pay out 4.5-5% for the agent who did nothing, and another 4.5-5% to the sales company. Once again, we the breeders are always taking all the risk, and it seems all we do is payout and create jobs for everyone else.

re: Surviving the Recession -- 2010 Stud Fees

Kevin — Sat, 26 Sep 2009 13:56:40 GMT

There is no one solution for the many economic problems faced by the separate, yet interconnected spokes that form the wheel we call the thoroughbred industry.

The first step is that each spoke of this wheel recognize the importance of the other, and accept that there is no strength or recovery alone. Without all the spokes in place, the wheel can turn, but it is weakened, and will break.

Since this blog is centered on Stallion Stud Fees, I will add my two cents on one facet of change that could help:

If a farm is not lowering stud fees for 2010/2011, there should be limit set on the number of mares bred to these stallions. Value must be returned to the breeders, limiting available foals from a stallion gives value.

The number of mares to be bred should be made public, and this number should not be changed during the course of the breeding season. This action in turn will give residual value to the foals of these limited stallions from the crops of 2008/2009 and 2009/2010. Hereafter, the fact that not as many foals will be making it to the auctions can spur business for the foals of 2009 and 2010. The next year or two, during this temporary downturn, that knowledge creates a market for these larger crops.

As I said, there is my two cents. There is ninety-eight cents more, for the breeders, owners, trainers, race tracks, thoroughbred organizations, service areas, etc and yes a few

cents more for the stallion farms, but it is Saturday, and I'll leave with just the one thought.

(I'd need a dollar ninety-eight to write about what I need to, and intend to change for myself.)

re: Surviving the Recession -- 2010 Stud Fees

sh — Sat, 26 Sep 2009 13:35:33 GMT

I think it is obvious that stud farms will have to drop their rates. How do you justify huge fees when the breeder's can't sell them at the sales to recoup the investment. The breeder's won't send mares to these stallions unless they feel they have a chance to at least break even. The stud farms also need to decrease book size and really consider what the market will support now and in the future. It is time to face the reality of this economic times and cut back.

re: Surviving the Recession -- 2010 Stud Fees

Patty — Sat, 26 Sep 2009 10:42:02 GMT

Stud fees are a huge part of the problem, but so are vet, boarding bills, vanning, trainer bills, etc. They are all outrageous and all need to be reduced a ton or only the richest breeders and horse owners will survive. The rest of us will be gone and if we go - the stallion farms, vets, boarding farms, etc. will be gone along with us.

re: Surviving the Recession -- 2010 Stud Fees

Mac — Sat, 26 Sep 2009 02:58:02 GMT

The stud fees will have to come down once again. Keeneland September was a disaster. There is a market for a race horse but to get a horse to the track is a large investment that most will not be able to do in this financial environment.

When the economy rebounds so will the horse industry. In times of crisis-creativity leads to new trends and emerging progress. Our industry needs to get to creative. But the issues or industry is faced with is larger than just breeding-we need horse racing to begin marketing itself like it's 2009 and not 1979.

Fans, handicappers increase handle which increases purse money. Some fans become owners, some owners become breeders. The fan is the life blood of our sport. And new fans need to be introduced to this wonderful game and industry. Horse racing can be the most beautiful sport there is-no home run, or touchdown can be as poetic as watching the horse you chose cross the wire first. It's magical- lets recapture the magic.

re: Surviving the Recession -- 2010 Stud Fees

scottksu — Sat, 26 Sep 2009 01:05:57 GMT

Did everybody see what happened to Smarty Jones a few days ago: six horses offered, five sold for a TOTAL of $50,000 (2500, 4500, 6000, 15000, and 22000). That is exactly the problem. He entered with a stud fee of $100,000 yet had proven nothing. Those stud fees have to change. And if they don't, then start supporting stallions in the $5000-$15000 range like Monarchos (6500 stud fee).

re: Surviving the Recession -- 2010 Stud Fees

no more bute — Fri, 25 Sep 2009 22:30:55 GMT

Lots of big stud fees in books 5 and 6 and lousy returns, one would assume these breeders will be gone forever, should these yearlings dams have been bred to big stud fees? No way. Used to be the farms would turn these mare away as not suitable for their stallion, but big books changed all that. now if you want to overbreed your mare the sheds are open for you .

re: Surviving the Recession -- 2010 Stud Fees

snow — Fri, 25 Sep 2009 21:46:01 GMT

Mike M,

Well Said! The cost to bred them, raise them and race them is just too cost prohibitive.