Kentucky Horsepower - by Eric Mitchell

(Originally published in the February 1, 2013 issue of The Blood-Horse magazine. Feel free to share your own thoughts and opinions at the bottom of the column.

By Eric Mitchell - @BH_EMitchell on Twitter

By Eric Mitchell The conclusion of a recent National Agricultural Statistics Service economic survey reaffirmed what we’ve known for many years—horses are big business in Kentucky.

Released last week, the 2012 Kentucky Equine Survey pegged the value of the state’s equine and equine-related assets at $23.4 billion for the 2011 calendar year. The state’s horse industry accounts for more than 14% of Kentucky’s total economic output (as assessed in 2010) and is larger than either real estate ($14.9 billion), health care ($14 billion), or retail trade ($10.3 billion), according to the 2012 Kentucky Economic Development Guide produced by

Kentucky is home to an estimated 242,400 horses, ponies, mules, and donkeys worth $6.3 billion. The estimated value of equine-related assets (which include land, buildings, vehicles, equipment, feed, tack, and clothing) is another $17.1 billion, according to the equine survey.

“This may well be the most significant body of work ever undertaken to estimate the economic significance of horses to Kentucky,” said Norman Luba, executive director of the North American Equine Ranching Information Council. The statewide equine survey, the first of this magnitude since 1977, was done with assistance from the University of Kentucky College of Agriculture and the Kentucky Horse Council.

Thoroughbreds are the prevalent breed in Kentucky, accounting for 25% of the 216,300 light horses in the state. Racing was the sixth-leading primary use of horses, with an estimated 15,000 in training. Ahead of racing were trail/pleasure riding (79,500), broodmares (38,000), idle/not working (33,000), competition/show (24,500) and young horses—yearlings/weanlings/foals (23,000).

On the business side of the equation, the survey identified 35,000 equine operations and 1.1 million acres devoted to equine use. Equine-related expenditures by these operations totaled around $1.2 billion in 2011, of which $839 million were operating expenses. These expenses fueled the economies of boarding, farrier services, veterinary clinics, feed sales, travel, training, shipping, etc. About 77% of these operating expenses were spent in Kentucky.

Kentucky’s horse industry has such a large economic footprint because of the imposing mass of horses and support services here. The concentration is such that the state has been able to weather many years of stiff and increasing competition from other states, particularly racing states that have bolstered their purses and breeding incentive programs with casino gambling. The next body blow to Kentucky will be delivered later this year when Cincinnati’s new downtown Horseshoe Casino opens its doors. Further jabs are coming because the old River Downs is being replaced with a new racino and more racinos are coming—one at Thistledown and two new facilities near Dayton and Youngstown.

This competition is eroding Kentucky’s critical mass, particularly among Thoroughbreds.

The Kentucky Horse Council last released an economic impact statement on the state’s horse industry in 2002. This study was not as in-depth as the one done recently or in 1977, but it provided a good barometer of where the industry stood at the time. In the 2002 study, the state had an estimated Thoroughbred population of 67,000 excluding the horses stabled at racetracks. Assuming the racing population was about the same as reported in the 2012 study (though it was likely higher), the total Thoroughbred population would have been around 82,000. In the 2012 study, the total Thoroughbred population including racing stock is estimated to be 69,000, a drop of 16% in 10 years.

At the risk of stating the obvious, the economic value lost by a dwindling Thoroughbred population will not be recovered by an increase in pleasure and show horses. Equine-related sales and farm income totaled around $1.1 billion in 2011 of which $501.3 million (46% of the total) came from Thoroughbred auction sales.

So, Frankfort, are you paying attention? A major industry affecting tens of thousands of jobs, billions in economic expenditures, and an important steward of the land is being threatened. Either step up and protect this vital industry or watch it slide away into the welcoming arms of other states.  

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