Most of the time a decline on the revenue side of a business or an industry is viewed with concern. An exception is depicted by recent data released by The Jockey Club pertaining to trends in North American Thoroughbred breeding.
Following is a summary of the Jockey Club information:
The number of stallions that bred mares was 3,130 in 2009 and 3,439 in 2008: or -9.0%
The number of mares bred was 49,404 in 2009 and 56,901 in 2008: or -13.2%
As of September 10, 2010, 27,233 live foals had been reported to the Jockey Club compared to 31,727 by the same date in 2009: or -14.2% (reports of live foals are typically about 90% complete for the year by early September).
Here are three key reasons that these developments are welcome.
First, there are too many mares with few or no redeeming qualities being bred to too many stallions with few or no redeeming qualities and, unsurprisingly, producing too many foals of the same caliber. This weakens the breed overall rather than strengthens it.
Second, with the supply of foals adapting to the demand for foals, price levels should stabilize or improve.
Third, an overproduction of foals that are not fast enough to become racehorses exacerbates the problem of unwanted horses. Therefore, a reduction in the number of Thoroughbred foals born assists in mitigating the problem.
A possible downside to the decrease in the 2010 foal crop from approximately 29,956 (27,233 reported as of September 10 plus another 10 percent will be reported later) from about 34,000 for 2009 is that it may affect the number of starters at racetracks two and three years hence…and the number of starters is a concern because bettors prefer large fields.
There are approximately 100 racetracks in North America (not counting the fairs, particularly in California). Assume that foreign buyers take 10% of the foal crop out of North America; that would translate into 27,233 foals left in North America in 2010 and 31,727 in 2009. The average per racetrack would be: 272 foals in 2010 (27,233/100) and 317 in 2009 (31,727/100). Nearly a decade ago, in 2001, the North American foal crop was 37,900. Take 10 percent out by foreign buyers and that left 34,110 foals in North America or 341 per racetrack. (Of course, not all foals are put into training and that further decreases the pool.)
It is impossible to say for sure that the decline in the foal crop–beginning in 2006– is accounting for racetracks having a problem filling races. My view is that it may be a contributing factor but not the predominant reason. The main cause is that there is a glaring shortage of owners. A foal crop of nearly 30,000 in 2010 should be sufficient to supply North American racetracks, even considering that foreign buyers will reduce the number by 10 percent or so. Moreover, the number of racetracks will likely decrease as the horse racing industry continues to downsize.
The decline in the foal crop may prove to be a case of less is more.
(Click here for the 2010 Jockey Club Fact Book that shows the annual foal crop.)
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