To the breeders out there.
Moderators: Roguelet, hpkingjr, WaveMaster
To the breeders out there.
Just taking the temperature out there. The market has changed and these are difficult times at best. Being new to the breeding end, I am wondering... how are you, the breeder, going to do things different this coming season? What could the stud farms do to ease the pain? What type of market are you aiming for, and what can be done to separate your stock from anyone else's? I am wondering because it just seems so hard to make a go of it... unless you own the farm and can try to keep costs down. Does that help? I am worried about the market in '09 and '10, both yearling and two year-old. Any thoughts, ideas appreciated.
Here is an interesting article in TDN that got me thinking... It's an op/ed piece in the October 3rd issue (no digital page to refer to):
Author is Rob Whiteley
KEEPING BREEDERS AFLOAT: ANOTHER MODEST PROPOSAL
There=s not much more I can say about the silliness
of "humane" whips and counting the number of times
those whips are used to hit a horse in front of fans,
would-be fans, and out-raged critics, when the real folly
is not the whip, but the act of whipping. Somewhat
modifying the use of the whip is a bit like trying to put
band-aids on a deep, three-inch gash. As I have no
more to say on that important matter, however, I will
speak out in this essay about an even more pressing
and fundamental crisis facing our industry, the perilous
plight of the breeder.
We are in the midst of a far-reaching economic
crisis. No, not the cataclysmic implosion facing some of
our major financial institutions and the bailouts and
steadily declining stock market, although those events
affect all of us and bear on the problem at hand. I refer,
instead, to our recently concluded September yearling
sale and its implications for the survival of our breeding
industry as we know it.
The context. If we picture our industry as a large pyramid,
breeders form the supporting base. If we picture
our industry as a chain of dominoes, breeders are the
first domino in the sequence, and none of the others
will be activated if that first one is not able to move
forward. No matter how we picture it, breeders produce
the horses and are the cornerstone, or the foundation,
for every subsequent Thoroughbred activity.
It should be alarming to the entire industry, therefore,
that Keeneland=s recent September sale has fully
exposed the vulnerability of the breeding community.
The supporting base of our industry pyramid is critically
weakened and in danger of crumbling. Breeders are
facing an unprecedented and dangerous level of
unprofitability, and, unless significant short-term
changes occur, many breeders will be forced to close
up and find another endeavor.
In particular, the least capitalized operations (in other
words the little guys who make up the backbone of the
industry), are being especially hammered, and many will
disappear.
Obviously, our supply-and-demand curve is out of
kilter, and we need some degree of short term shakeout
and reduction in mares bred. We will not have to
wait for this. Things are so bad now that a shake-out is
currently in progress and will continue for the foreseeable
future as demand will continue to shrink. Declining
purses, poor marketing, rising costs, and a softening
economy will extend this downward spiral as few new
racing owners will be inspired to jump in, and many
current owners will be cutting back or heading toward
the door.
Free market factors are clearly in place and need to
be allowed to operate, which means that some breeders
will either go under or drop out. This is as natural as it
is painful. That said, however, many participants at the
upper end are able to operate without a strong profit
motive. These relatively wealthy participants benefit
from tax advantages or substantial assets beyond their
equine holdings and don=t depend on profitability to
stay in business. They can, and will, weather the
storm.
But what about the little guy, the small breeder who
tries to make his way from year to year with bank loans
and the sale of his horses? Do we want him to disappear?
Do we want this to only be a niche game for a
small group of rich guys who pretty much trade horses
with each other? Do we only want to produce horses
bred on big stud fees? I don=t think so. We need horses
for every stratum. We need horses for Belmont, Churchill,
and Santa Anita, but, we also need horses for
Turfway, Hawthorne and Golden Gate, River Downs
and Remington. We need participants at every level,
and it is a given fact of the Turf that no one knows
where the next big horse will come from, so everyone
deserves a shot. Horsemen who read the stakes results
every day and check out all of the pedigrees know that
the gene pool is very deep, and that Grade I winners
and many damn good horses also come from the ranks
of the so-called Alesser@ matings. The main point, therefore,
is that, at this very difficult time, breeders at
every level have a place and a purpose, and we need to
find a way for most of our breeders (those who breed
for books one through four as well as those who breed
for five through eight), to stay in business.
Those of us who have persisted at this venture over
several years know that, historically, breeding racehorses,
just like owning racehorses, is generally unprofitable
(except for those who control the 100 or so
commercial stallions). Yet, many breeders persevere by
subsidizing their efforts through income from other
sources, and by finding improvisational ways to cut
corners and scratch their way through in order to keep
doing what they love to do. But, these are exceptional
times and only so many corners can be cut.
While demand for breeders= yearlings declines amid
a deteriorating general economy and a poorly run and
poorly marketed broader industry, the costs of goods,
supplies, and services (general production costs) are
steadily rising. Over the last year, basic items used to
produce yearlings have had very worrisome price increases:
Mixed hay (+20%), Alfalfa (+30%), straw
(+25%), feed (+25%), 50@ Diamond Mesh fencing
(+50%). Breeders are drowning in a perfect storm.
THE PROPOSAL. For the calendar year 2009 (and for
this one year only), the three major service groups,
whose profitability is not much impacted by overproduction
or the current economic hardship faced by
breeders, will roll-back their fees. Stallion owners will
reduce their stud fees by 50%. Sales companies will
reduce their fees and commissions by 50%. Veterinarians
will reduce their fees for services and procedures
by 50% and their mark-up on medications by 50%.
Consignors are not included in this proposal because
most of them already negotiate their fees with breeders,
do not have relative control over the production
cycle or sales scene, and work with a much lower profit
margin than the Big Three. Nonetheless, they should
also participate in a roll-back of fees to the fullest extent
possible.
THE RATIONALE. The rationale is simple. This is a
practical proposal in the interest of everyone involved.
The three dominant service groups control the sales
scene and the production cycle, and it is in their longterm
best interest to make huge cuts now. Significantly
fewer breeders and fewer horses will generally mean
less revenue for each provider over time. Unless these
service groups work together to lower their fees dramatically
for 2009, there will be much less for them to
control and profit from as events go forward year to
year. If this proposal is implemented, the stallion owners,
sales companies, and vets will still be just fine at
the end of 2009, and breeders will have a fighting
chance to stay in place. Now is the time to act before
the bulk of the breeders are beyond resuscitation.
THE PROFITABILITY DATA. You might want to have a
drink before you read this next part that details September
yearling profitability using 2006 advertised stud
fees, session by session and book by book.
The table below gives a sobering overview of results.
It is even more sobering to note that many of the
yearlings marked as "profitable" were really "break-even"
or negligibly profitable. This sale was not only ugly for
the low-end breeder. It was ugly across the board. As
Bill Oppenheim pointed out in his TDN auction review of
September 25, even breeders at the top end were
"scorched by some of the numbers for the top stallions".
---------------- end ---------------
Here is the chart he mentions:
first number is "cataloged" and second is "profitable" (then percentage profitable).
Session 1 244 93 38.1%
Session 2 251 92 36.5%
Session 3 401 154 38.4%
Session 4 401 144 35.9%
Session 5 410 143 34.9%
Session 6 410 110 26.5%
Session 7 399 86 21.6%
Session 8 399 84 21.0%
Session 9 399 54 13.5%
Session 10 399 32 8.0%
Session 11 398 21 5.3%
Session 12 396 10 2.5%
Session 13 391 7 1.8%
Session 14 339 4 1.2%
Session 15 318 1 0.3%
All catalogued 5555 1035 18.6%
All sold in ring 3605 1035 28.7%
Yikes.
Author is Rob Whiteley
KEEPING BREEDERS AFLOAT: ANOTHER MODEST PROPOSAL
There=s not much more I can say about the silliness
of "humane" whips and counting the number of times
those whips are used to hit a horse in front of fans,
would-be fans, and out-raged critics, when the real folly
is not the whip, but the act of whipping. Somewhat
modifying the use of the whip is a bit like trying to put
band-aids on a deep, three-inch gash. As I have no
more to say on that important matter, however, I will
speak out in this essay about an even more pressing
and fundamental crisis facing our industry, the perilous
plight of the breeder.
We are in the midst of a far-reaching economic
crisis. No, not the cataclysmic implosion facing some of
our major financial institutions and the bailouts and
steadily declining stock market, although those events
affect all of us and bear on the problem at hand. I refer,
instead, to our recently concluded September yearling
sale and its implications for the survival of our breeding
industry as we know it.
The context. If we picture our industry as a large pyramid,
breeders form the supporting base. If we picture
our industry as a chain of dominoes, breeders are the
first domino in the sequence, and none of the others
will be activated if that first one is not able to move
forward. No matter how we picture it, breeders produce
the horses and are the cornerstone, or the foundation,
for every subsequent Thoroughbred activity.
It should be alarming to the entire industry, therefore,
that Keeneland=s recent September sale has fully
exposed the vulnerability of the breeding community.
The supporting base of our industry pyramid is critically
weakened and in danger of crumbling. Breeders are
facing an unprecedented and dangerous level of
unprofitability, and, unless significant short-term
changes occur, many breeders will be forced to close
up and find another endeavor.
In particular, the least capitalized operations (in other
words the little guys who make up the backbone of the
industry), are being especially hammered, and many will
disappear.
Obviously, our supply-and-demand curve is out of
kilter, and we need some degree of short term shakeout
and reduction in mares bred. We will not have to
wait for this. Things are so bad now that a shake-out is
currently in progress and will continue for the foreseeable
future as demand will continue to shrink. Declining
purses, poor marketing, rising costs, and a softening
economy will extend this downward spiral as few new
racing owners will be inspired to jump in, and many
current owners will be cutting back or heading toward
the door.
Free market factors are clearly in place and need to
be allowed to operate, which means that some breeders
will either go under or drop out. This is as natural as it
is painful. That said, however, many participants at the
upper end are able to operate without a strong profit
motive. These relatively wealthy participants benefit
from tax advantages or substantial assets beyond their
equine holdings and don=t depend on profitability to
stay in business. They can, and will, weather the
storm.
But what about the little guy, the small breeder who
tries to make his way from year to year with bank loans
and the sale of his horses? Do we want him to disappear?
Do we want this to only be a niche game for a
small group of rich guys who pretty much trade horses
with each other? Do we only want to produce horses
bred on big stud fees? I don=t think so. We need horses
for every stratum. We need horses for Belmont, Churchill,
and Santa Anita, but, we also need horses for
Turfway, Hawthorne and Golden Gate, River Downs
and Remington. We need participants at every level,
and it is a given fact of the Turf that no one knows
where the next big horse will come from, so everyone
deserves a shot. Horsemen who read the stakes results
every day and check out all of the pedigrees know that
the gene pool is very deep, and that Grade I winners
and many damn good horses also come from the ranks
of the so-called Alesser@ matings. The main point, therefore,
is that, at this very difficult time, breeders at
every level have a place and a purpose, and we need to
find a way for most of our breeders (those who breed
for books one through four as well as those who breed
for five through eight), to stay in business.
Those of us who have persisted at this venture over
several years know that, historically, breeding racehorses,
just like owning racehorses, is generally unprofitable
(except for those who control the 100 or so
commercial stallions). Yet, many breeders persevere by
subsidizing their efforts through income from other
sources, and by finding improvisational ways to cut
corners and scratch their way through in order to keep
doing what they love to do. But, these are exceptional
times and only so many corners can be cut.
While demand for breeders= yearlings declines amid
a deteriorating general economy and a poorly run and
poorly marketed broader industry, the costs of goods,
supplies, and services (general production costs) are
steadily rising. Over the last year, basic items used to
produce yearlings have had very worrisome price increases:
Mixed hay (+20%), Alfalfa (+30%), straw
(+25%), feed (+25%), 50@ Diamond Mesh fencing
(+50%). Breeders are drowning in a perfect storm.
THE PROPOSAL. For the calendar year 2009 (and for
this one year only), the three major service groups,
whose profitability is not much impacted by overproduction
or the current economic hardship faced by
breeders, will roll-back their fees. Stallion owners will
reduce their stud fees by 50%. Sales companies will
reduce their fees and commissions by 50%. Veterinarians
will reduce their fees for services and procedures
by 50% and their mark-up on medications by 50%.
Consignors are not included in this proposal because
most of them already negotiate their fees with breeders,
do not have relative control over the production
cycle or sales scene, and work with a much lower profit
margin than the Big Three. Nonetheless, they should
also participate in a roll-back of fees to the fullest extent
possible.
THE RATIONALE. The rationale is simple. This is a
practical proposal in the interest of everyone involved.
The three dominant service groups control the sales
scene and the production cycle, and it is in their longterm
best interest to make huge cuts now. Significantly
fewer breeders and fewer horses will generally mean
less revenue for each provider over time. Unless these
service groups work together to lower their fees dramatically
for 2009, there will be much less for them to
control and profit from as events go forward year to
year. If this proposal is implemented, the stallion owners,
sales companies, and vets will still be just fine at
the end of 2009, and breeders will have a fighting
chance to stay in place. Now is the time to act before
the bulk of the breeders are beyond resuscitation.
THE PROFITABILITY DATA. You might want to have a
drink before you read this next part that details September
yearling profitability using 2006 advertised stud
fees, session by session and book by book.
The table below gives a sobering overview of results.
It is even more sobering to note that many of the
yearlings marked as "profitable" were really "break-even"
or negligibly profitable. This sale was not only ugly for
the low-end breeder. It was ugly across the board. As
Bill Oppenheim pointed out in his TDN auction review of
September 25, even breeders at the top end were
"scorched by some of the numbers for the top stallions".
---------------- end ---------------
Here is the chart he mentions:
first number is "cataloged" and second is "profitable" (then percentage profitable).
Session 1 244 93 38.1%
Session 2 251 92 36.5%
Session 3 401 154 38.4%
Session 4 401 144 35.9%
Session 5 410 143 34.9%
Session 6 410 110 26.5%
Session 7 399 86 21.6%
Session 8 399 84 21.0%
Session 9 399 54 13.5%
Session 10 399 32 8.0%
Session 11 398 21 5.3%
Session 12 396 10 2.5%
Session 13 391 7 1.8%
Session 14 339 4 1.2%
Session 15 318 1 0.3%
All catalogued 5555 1035 18.6%
All sold in ring 3605 1035 28.7%
Yikes.
-
ratherrapid
- Grade II Winner
- Posts: 1276
- Joined: Wed Nov 29, 2006 3:04 pm
- Location: kansas city, missouri
- Contact:
reminds of the recent Blood Horse video that Whitely participated in on injury prevention where Whitely's perfect sense got but blank stares around the table. I'd fear near zero response to this 'expose' and recommendations which will probably go unnoticed because there are so few to notice, even on this forum, of late.
did Whitely actually write "do we want this to only be a niche game for a small group of rich guys who pretty much trade horses with each other?"
did Whitely actually write "do we want this to only be a niche game for a small group of rich guys who pretty much trade horses with each other?"
We will be breeding 1 maybe 2 mares next year, down from 5. I really took the previous thread to heart about not breeding more than you can afford to keep and race yourself. The breeding industry in the NW has been dying for a long time and at this point I'm affraid that the hole is too deep to ever climb out.
-
Sock Monkey
- Allowance Winner
- Posts: 353
- Joined: Tue Sep 25, 2007 8:07 am
I do like Whitely's proposal - a lot. I have long thought stud fees were out of whack with reality - not just in terms of potential return at the sales, but also in potential return at the track. And, you don't want to get me started with vet bills - I'm not sure which is a bigger rip off, vet bills at the track or breeding season vet bills. Both are absurd. 
Does it help to own your own farm? Yes and no. I think the major advantage to owning your own farm is being better able to control the vet costs. When you board a mare, you are more at the mercy of the farm who - despite what they may say - is motivated to keep their vet happy and will seldom turn down any service. Plus, there is the CYA aspect - the farm is more likely to agree to a "it can't hurt" treatment than you at home may be.
I have made some changes to my program, but they have been occurring over the past few years, so I can't really say I'm doing anything differently for '09. Specifically, in the past few years I have ceased breeding to race - I now soley claim or buy to race and breed to sell. I'm also really looking hard at all vet charges and saying no to a lot. Which is hard to do sometimes. This year, I took a mare to FL and overnighted at a friend's farm. The vet from Peterson and Smith came out to see if we needed a double and had a laundry list of things he wanted to do. I refused all and he was shocked - claimed I was the only person who had said no all season and my mare probably wouldn't get in foal (she was - with twins
). It's hard to say no when the vet is badgering you and saying you're going to waste your time and money if you don't do everything they want you to.
I think we as breeders need to really have some open dialogue about what a reasonable stud fee is. You so frequently hear people saying a stallion with a fee below $10k is "cheap" or a stallion is priced "fairly" at $50k. But, is it? When you factor in all the associated costs to get that horse to the races (which is the end goal, after all) and then consider what the average horse earns, even $10k for a stud fee starts to look like a big chunk of change. In reality, there are very few stallions who have a fee that makes a lot of sense in terms of potential ROI.
A point Whiteley made that I really liked was about how people at all levels belong in this business. I hear a lot of people talking about how the small backyard guys need to be run out (both in breeding and racing) - and this is not just from the top level players, but us low level people turn on each other with alarming frequency. At least in the market I am paying the most attention to, a lot of the small people are wanting the big guys to come to town thinking they will raise us all up. But, I don't think that's what will happen. I think when you bring in too many of those guys who can afford the crazy stud fees, high sales fees, and stupefying vet charges - the small guy starts to get shut out, just because we can't afford to keep up. I think us small guys need to stick together (like herding cats in this business, I know) and take/retain some control here before this really does become "a niche game for a small group of rich guys who pretty much trade horses with each other."
Does it help to own your own farm? Yes and no. I think the major advantage to owning your own farm is being better able to control the vet costs. When you board a mare, you are more at the mercy of the farm who - despite what they may say - is motivated to keep their vet happy and will seldom turn down any service. Plus, there is the CYA aspect - the farm is more likely to agree to a "it can't hurt" treatment than you at home may be.
I have made some changes to my program, but they have been occurring over the past few years, so I can't really say I'm doing anything differently for '09. Specifically, in the past few years I have ceased breeding to race - I now soley claim or buy to race and breed to sell. I'm also really looking hard at all vet charges and saying no to a lot. Which is hard to do sometimes. This year, I took a mare to FL and overnighted at a friend's farm. The vet from Peterson and Smith came out to see if we needed a double and had a laundry list of things he wanted to do. I refused all and he was shocked - claimed I was the only person who had said no all season and my mare probably wouldn't get in foal (she was - with twins
). It's hard to say no when the vet is badgering you and saying you're going to waste your time and money if you don't do everything they want you to.
I think we as breeders need to really have some open dialogue about what a reasonable stud fee is. You so frequently hear people saying a stallion with a fee below $10k is "cheap" or a stallion is priced "fairly" at $50k. But, is it? When you factor in all the associated costs to get that horse to the races (which is the end goal, after all) and then consider what the average horse earns, even $10k for a stud fee starts to look like a big chunk of change. In reality, there are very few stallions who have a fee that makes a lot of sense in terms of potential ROI.
A point Whiteley made that I really liked was about how people at all levels belong in this business. I hear a lot of people talking about how the small backyard guys need to be run out (both in breeding and racing) - and this is not just from the top level players, but us low level people turn on each other with alarming frequency. At least in the market I am paying the most attention to, a lot of the small people are wanting the big guys to come to town thinking they will raise us all up. But, I don't think that's what will happen. I think when you bring in too many of those guys who can afford the crazy stud fees, high sales fees, and stupefying vet charges - the small guy starts to get shut out, just because we can't afford to keep up. I think us small guys need to stick together (like herding cats in this business, I know) and take/retain some control here before this really does become "a niche game for a small group of rich guys who pretty much trade horses with each other."
I think we need a new category. We have breed-to-race, and breed-to-sell, but there needs to be a breed-to-get-a-tax-deduction. 
Maybe stud fees AND book size limits would help. I agree with Sock Monkey about the little guys getting "shut out" - and I think the Keeneland sales program has been heading steadily in that direction for some time. Being in the "last book" at Keeneland is a fate worse than death. What if they quit ranking the horses by book and did the entire thing alphabetically?? The problem now is if you have an INCREDIBLE looking foal by a "cheap" stallion (under $10K) you are at the end of the second week no matter what, and the buyers that might have paid a better price for that horse are mainly GONE. I like the Fasig Tipton sales better, personally, because they are SMALLER. I do wonder, though, when they ignore the alphabetical ranking, why? Is that some special owner that ranks above the other sellers? See hip #46 in the F-T November - last time I checked, Sage Cat does not come after Rgirldoesn'tbluff and before Rhumb Line. Not alphabetically, anyway.
Regarding consignor fees - well I disagree. I think most are overcharging for basic things. I paid $14 a stall card when I took my own horses to F-T February in '07 - and they were gorgeous. A big consignor charged me $90, I believe, for a stall card which is just a piece of cardboard with some plastic lettering... they also charged me a $900 (!?!?!) vet bill on a weanling filly at their farm for 21 days. She was not sick, never got sick, but I was charged for two weeks of antibiotics and all kinds of shots. It was on a farm invoice, not a vet invoice, and I believe it was ALL bogus and that filly probably never got ANY of that. Naturally, I will Never Use that consignor Ever Again.. I'd rather take my own to the sale and take a bit less for them than get hit for what I KNOW are egregious charges.
Maybe stud fees AND book size limits would help. I agree with Sock Monkey about the little guys getting "shut out" - and I think the Keeneland sales program has been heading steadily in that direction for some time. Being in the "last book" at Keeneland is a fate worse than death. What if they quit ranking the horses by book and did the entire thing alphabetically?? The problem now is if you have an INCREDIBLE looking foal by a "cheap" stallion (under $10K) you are at the end of the second week no matter what, and the buyers that might have paid a better price for that horse are mainly GONE. I like the Fasig Tipton sales better, personally, because they are SMALLER. I do wonder, though, when they ignore the alphabetical ranking, why? Is that some special owner that ranks above the other sellers? See hip #46 in the F-T November - last time I checked, Sage Cat does not come after Rgirldoesn'tbluff and before Rhumb Line. Not alphabetically, anyway.
Regarding consignor fees - well I disagree. I think most are overcharging for basic things. I paid $14 a stall card when I took my own horses to F-T February in '07 - and they were gorgeous. A big consignor charged me $90, I believe, for a stall card which is just a piece of cardboard with some plastic lettering... they also charged me a $900 (!?!?!) vet bill on a weanling filly at their farm for 21 days. She was not sick, never got sick, but I was charged for two weeks of antibiotics and all kinds of shots. It was on a farm invoice, not a vet invoice, and I believe it was ALL bogus and that filly probably never got ANY of that. Naturally, I will Never Use that consignor Ever Again.. I'd rather take my own to the sale and take a bit less for them than get hit for what I KNOW are egregious charges.
So Run for the Roses, as fast as you can.....
Why breed when you can buy. Thats why there are longer broodmares and stallions here on the farm. Too much work, not enough help, and too much cost. And we do everything in house.... When people are almost giving away horses at the track that have not even had to opportunity to show whether or not they can run...why breed?
We are just starting out. We have our first TB foal, born this year.
Things that are helping us:
1) We own our own farm.
2) Weather is better this year - hay prices slightly down or the same - pastures are still good and should hold out another month or two.
3) We are involved in the IN program and they got slots.
4) We are likely getting another mare in foal for 2009. If we do, our farrier will be a partner.
5) To get IN-bred foals, our mares must foal there. We are fortunate to have a very reasonable farm to work with (kudos, Roguelet!) - the only vet bill last year was for coggins and health certificate.
5) I can work overtime at work and may be getting a better job soon (with a company car!)
6) Our first filly has outstanding conformation. Yes, I am biased, but others have said the same.
Things that are not helping us:
1) Grain costs are up, and continue to rise. The grain I feed mares and foals was about $12.50/50# just 16 months ago. It it now over $16 - and the price continues to go up.
2) Other costs are up - gas, food, etc. This leaves us with less money for the horses.
Things that are helping us:
1) We own our own farm.
2) Weather is better this year - hay prices slightly down or the same - pastures are still good and should hold out another month or two.
3) We are involved in the IN program and they got slots.
4) We are likely getting another mare in foal for 2009. If we do, our farrier will be a partner.
5) To get IN-bred foals, our mares must foal there. We are fortunate to have a very reasonable farm to work with (kudos, Roguelet!) - the only vet bill last year was for coggins and health certificate.
5) I can work overtime at work and may be getting a better job soon (with a company car!)
6) Our first filly has outstanding conformation. Yes, I am biased, but others have said the same.
Things that are not helping us:
1) Grain costs are up, and continue to rise. The grain I feed mares and foals was about $12.50/50# just 16 months ago. It it now over $16 - and the price continues to go up.
2) Other costs are up - gas, food, etc. This leaves us with less money for the horses.
madelyn wrote:I think we need a new category. We have breed-to-race, and breed-to-sell, but there needs to be a breed-to-get-a-tax-deduction.
I am not sure breed to sell has to be exclusive of breeding to race. I think both can be done, together. I breed to sell (especially the colts), but am willing to race if the price is wrong.
We are in the IN program as well. Out of 25 in training we have two NW2L and 19 MSW, and we still sold 32 broodmares in foal, 6 mares with foals, and two stallions in the last two yrs. And have the farm up for sale currently. With help not wanting to work or stay at the farm, its easier to buy....IMO
Personally, I do not believe the advertized stud fees will come down any time soon. To do so, the stud farm runs the risk of people thinking their stallions aren't cutting the mustard anymore and that rumor spreads very quickly. Think how quickly the market rejects new stallions who don't have early 2yo runners. Sometimes those stallions are headed to a regional market just as their first crop is starting to warm up.
I think the mid- to small-time breeders ought to take a lesson from the auto labor unions and pick one big breeding farm to boycott for a breeding season (like when the unions pick one of the big three to strike instaed of all three). This sends a message to all the other big outfits.
As an example of how this would work: start with a list of all the farms (these would have to be major Kentucky farms) that keep their stud fees the same price or more in 2009 and have a stud fee due September 1st (I chose this because that seems to be the earliest of the non-"stands and nurses" terms). From this pool of farms, draw one name out of the hat and announce it (an advertisement in the BloodHorse and Thoroughbred Times would get the right amount of coverage). Then every breeder simply boycotts that farm and sends them a letter stating the reason why. If enough people did it, that farm would suffer financially and the word would spread to the other farms who might take a serious look at their fees before the next breeding season.
I think the mid- to small-time breeders ought to take a lesson from the auto labor unions and pick one big breeding farm to boycott for a breeding season (like when the unions pick one of the big three to strike instaed of all three). This sends a message to all the other big outfits.
As an example of how this would work: start with a list of all the farms (these would have to be major Kentucky farms) that keep their stud fees the same price or more in 2009 and have a stud fee due September 1st (I chose this because that seems to be the earliest of the non-"stands and nurses" terms). From this pool of farms, draw one name out of the hat and announce it (an advertisement in the BloodHorse and Thoroughbred Times would get the right amount of coverage). Then every breeder simply boycotts that farm and sends them a letter stating the reason why. If enough people did it, that farm would suffer financially and the word would spread to the other farms who might take a serious look at their fees before the next breeding season.
That's an interesting approach. Another way to achieve the same results (potentially) is to find the farms that DO reduce fees, and go to those stallions... leaving the others hung out to dry. Reward proper behavior.
In todays brave new world, I don't think a stud farm can afford NOT to appear to be concerned about the market. A farm that didn't react would seem to me, cold and distant, as if to say "we are above the issues of the breeder". If a stallion is sells at a good multiple at the yearling sales, and is performing on the race track... that might be a fair reason to keep the stallion as priced. Exception: If the sales prices are artificially inflated due to one or two high priced sales, especially sales to connected parties. Barring that, MANY prices need to fall, across the board.
In todays brave new world, I don't think a stud farm can afford NOT to appear to be concerned about the market. A farm that didn't react would seem to me, cold and distant, as if to say "we are above the issues of the breeder". If a stallion is sells at a good multiple at the yearling sales, and is performing on the race track... that might be a fair reason to keep the stallion as priced. Exception: If the sales prices are artificially inflated due to one or two high priced sales, especially sales to connected parties. Barring that, MANY prices need to fall, across the board.
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Sock Monkey
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dray33 wrote:In todays brave new world, I don't think a stud farm can afford NOT to appear to be concerned about the market. A farm that didn't react would seem to me, cold and distant, as if to say "we are above the issues of the breeder". If a stallion is sells at a good multiple at the yearling sales, and is performing on the race track... that might be a fair reason to keep the stallion as priced. Exception: If the sales prices are artificially inflated due to one or two high priced sales, especially sales to connected parties. Barring that, MANY prices need to fall, across the board.
http://news.bloodhorse.com/article/47314.htm
From this article, it appears many of the farms think they're going to be generous by just holding their fees steady.
Yeah, I saw that too Sock Monkey.
“I think the stallions that need to go down will go down, and the stallions that need to go up will go up,” said Mike Recio, the stallion nominations and marketing director for Frank Stronach’s Adena Springs. “But I think people will be very careful about how far any fees go up. I do think there are going to be a lot of stallions whose fees stay the same.”
At the start of the season, most advertised fees will probably stay the same. I would bet that after a few weeks, all that goes out the window, and if your stallion isn't booked, the "real" fees will tumble. Also, they will be forced to consider mares that in the past they might have passed over. So all in all, I hope there is some opportunity for the breeders.
We are in this together... and if they don't see the problems at hand, or choose to ignore them, they deserve what's coming.
“I think the stallions that need to go down will go down, and the stallions that need to go up will go up,” said Mike Recio, the stallion nominations and marketing director for Frank Stronach’s Adena Springs. “But I think people will be very careful about how far any fees go up. I do think there are going to be a lot of stallions whose fees stay the same.”
At the start of the season, most advertised fees will probably stay the same. I would bet that after a few weeks, all that goes out the window, and if your stallion isn't booked, the "real" fees will tumble. Also, they will be forced to consider mares that in the past they might have passed over. So all in all, I hope there is some opportunity for the breeders.
We are in this together... and if they don't see the problems at hand, or choose to ignore them, they deserve what's coming.
Very interesting to see all of your opinions on this, as I have been worrying about this. I do not plan to breed next year, despite having access to a very nice stud.
Too many horses, all of the very well thought out reasons given by you all, and what happens to all of these horses? The big multi-millionaires don't really take the hit, we do.
Thanks to all of you for the topic and replies.......
Too many horses, all of the very well thought out reasons given by you all, and what happens to all of these horses? The big multi-millionaires don't really take the hit, we do.
Thanks to all of you for the topic and replies.......
We will NEVER see another Ruffian......