The Great Stud Fee Debate: An Aussie Perspective

[Shammy Davis]

http://www.breedingracing.com/pdfs/99/E ... debate.pdf

[Sysonby]

They are all correct up to a point just like the blind men describing the elephant were correct sort of but if the Australia market mirrors the US market, it's just too easy to say "Well you don't have to pay it". If a breeder wants to be commercial or at least keep the commercial option in his back pocket, there are only a handful of stallions. When those fees outstrip the expected sales and the transaction is front loaded towards the stallion farm, the mare owner is in a bad position in which just about everyone makes out but him. The stud farm gets their fee, the boarding farm gets their board, the vendors including the vets and the auction houses get paid but the breeder with an average foal may only get back the stud fee and maybe not that.

Take Hard Spun. He'll probably be the leading first crop sire. His stud fee remains at $40,000 which it was in 2009 when this years yearlings were bred. His sales average was about $100,000 with 66 yearlings sold. But a full 20 sold for equal or less than the stud fee. (30%). Another 6 sold for $70,000 or less which means that 40 % of his yearlings were probably at or under the break even point. Those are harsh numbers when a breeder has carried his Hard Spun 15 or more months--and he is commercial.

No one has to go to Hard Spun or any other stallion but there are only a handful of stallions like him out there and the way that stud fees are priced can and will drive breeders out of the business.

[Shammy Davis]

I agree. I don't think many commercial breeders will be able to sustain themselves during these difficult economic times. The risk factors are higher and the profit margins are slim to none. I personally think you must breed to race to have any hope of continuing in the business.