Does State Dominance in Horse Breeding Increase Equine Industry Economic Risk

1
Does State Dominance in Horse Breeding Increase
Equine Industry Economic Risk?

• Myria DeHaven and Lindsey Finn

2
Introduction

• The equine industry is a 112.1 billion industry
  in the U.S.
• The breeding sector contributes approximately 25
  billion.

3
Problem

• Data has shown that there is one state emerging
  as being dominant over the others.
• Increased dominance in one state increases
  economic risk to the entire industry.
• The whole industry faces greater negative impact
  if a catastrophe occurs in the dominant state.

4
Problem

• Mare Reproductive Loss Syndrome (MRLS) has been a
  major equine health issue in brood mares.
• This disease causes early fetal losses, late
  abortions and births of weak foals.
• The disease is caused by toxicity of fescue grass
  by tent caterpillars.

5
Hypothesis One

• Kentucky is developing breeding dominance over
  other U.S. states.
• The U.S. breeding industry is concentrated in
  Kentucky.
• The state is known for its high quality pasture
  forage, known as the blue grass state.
• Kentucky is home to thoroughbred racing farms, as
  well as breed-specific and discipline-specific
  farms

6
Kentucky is a Dominant State

• 1991-2001 In one decade Kentuckys percentage
  of U.S. foal crop increased by 33.4.
• Kentuckys share of the foal crop is twice as
  much as other states

7
Hypothesis Two

• Industry revenue increases with a dominant state
  share.
• Kentucky has breeding dominance and generates
  more revenue from its breeding program than other
  states.
• Kentucky contributes to a larger percentage of
  the total U.S. value of equine sales.

8
Increased industry revenue

• Kentucky has the highest percent of total value
  of equine sales, it has a greater effect on
  industry revenue as a whole than any other
  individual state.

9
Hypothesis Three

• Risk of decreased industry revenue increases with
  a dominant state share.
• There is an increased risk of total industry
  revenue decreasing with the dominance of one
  state.
• The whole industry is at risk if some sort of
  detrimental occurrence takes place, such as MRLS,
  which happened to Kentucky.

10
Increased industry risk

• Affects of MRLS on the breeding crops in Kentucky.

11
Increased industry risk

• Economic losses to the equine breeding industry
  due to MRLS.

12
Increased industry risk

• The affects of MRLS are felt for several years
  after its occurrence.
• The cost of a foal through its sale as a yearling
  includes mare cost, stud fee, weanling cost, and
  yearling cost.
• The total economic loss to the Kentucky equine
  breeding industry from 2000 to 2003 is 336
  million.

13
Conclusion

• Kentucky is developing breeding industry
  dominance over other U.S. states.
• There is greater economic risk associated with
  Kentuckys dominance.
• To decrease risk, other states should increase
  their foal crops and hold a higher percentage of
  the total U.S. foal crop.