The Long View

by TC Lane, USTA Chief Operating Officer

Is There One Silver Bullet?

Ideas about foal crops and racing, finding more owners, and what rightsizing might mean

Over the past several years and even more so of late, the discussion of a horse shortage is being weighed heavily. In my evaluation, it helped me to take a small step back and look at the situation on more of a macro level. As a person that has been entrenched in the entire field of agriculture my entire life, I have come to look at things from many different perspectives through my years of experience.

A shortage is not just a Standardbred or a Thoroughbred problem. Furthermore, it’s not just a North American breeding problem if you follow the trends abroad. Lastly, declines are not just an equine issue.
The wanes are consistent in the entire field of agriculture, period. Many of our expenses have gone up due to external factors that we had no control over. Hay isn’t $12 a bale for no reason. Lack of supply always leads to demand shifts that are never in favor of the consumer.

If you digest the current decline from an agricultural perspective and then in turn incorporate our breeding woes, the same curve applies. A recent report from the Environmental Protection Agency (EPA) stated: Farmers and ranchers are, on average, between 52 to 57 years of age, often entering retirement with no younger heir to take over their family operations. Statistics show that today less than one third of private family farms have a designated family successor.
For many young people, the long, demanding hours and outdated pay are simply too unappealing to consider. Paired with the dwindling net income brought in by the average farm, the industry is struggling to compete with the promise of higher-paying white collar positions. According to projections from the U.S. Bureau of Labor Statistics, farmers could suffer the most significant job losses of any occupation.
Replacing just a couple of the titles of farmer and rancher to Standardbred breeder and trainer makes the above observations by the EPA hit a little bit closer to home, doesn’t it? Are we noticing next generations taking over? Not very often.

I have touched on employment difficulties in my columns previously, but this becomes a land problem in many ways. Next-generation heirs are making the difficult decision when the time comes to either continue their existing family operation or accept the shiny red apple that many land barons are offering them. To reverse that trend, our apple must be much shinier. No land means no horses, which, as we know, means less racing.
Both commercial and small breeding operations are not growing at a rate that would reduce or reverse the trend, since the price for farmland around the country has skyrocketed as residential homebuilding markets have exploded. Urban sprawl is now being amplified due to a more remote workforce. Failing to halt this trend will ultimately lead to extinction.

Can we as an industry change, reverse or slow down this trend? I think we can. We as an industry must do our best to ensure that the foundation is strong. That’s an across-the-board issue. Not one specific piece of our game may remain the same. We all must adjust at some point and accept the fact that tomorrow will not look like it did 30 years ago.
In farming, they are hearing the same message. A farmer with 300 acres still does exist today, but that isn’t the same as before. A few decades ago, that size was able to support a couple of families comfortably. Today, 300 acres is just a side hustle because the profit margins just aren’t there like before.

Our game is the same. Smaller stables exist and many can thrive. The small farmer is often competing with the next-door neighbor who farms about 5,000 acres and is driving a sparkling new pickup, has the latest equipment, and is always begging the neighbor to sell him/her the 300 acres to add to the arsenal. We see that every day on our side too. Larger owners stand at the draw gate, check in hand. That will not change, I am sure.

Like many of you, I feel that the pursuit of the silver bullet is like the quest for the coveted Montezuma’s Treasure. They both remain unfound to date. I believe that we must agree to adjust our overall model and come to terms with size that fits the market. In today’s business jargon, it’s “rightsizing” our industry.

Rightsizing can be disruptive to our business because people need to spend time undoing and redoing things that used to work. Those decisions can be painful and unsettling in many ways. Admittedly, I often embrace change if it’s someone else who is doing the changing. Change or realization is hard.

In terms of change, I feel compelled to share with you the top three bullets that are fired to my email or phone almost each week. They are not in any specific order:

1. If we bred more horses…
2. If we had more opportunities to race…
3. If we just had more owners…

Each of the items above ends with “that would fix this whole game.”

Here are my thoughts.

In terms of breeding more mares, in 2021, we bred almost 15,000 mares in the U.S. That number is up from slightly over 11,000 in 2011. If you look at the raw total, a 35-percent increase is impressive. Unfortunately, the overall increase is somewhat attributed to many “off-the-track horses,” meaning those which are involved in the Amish and Roadster communities. While there does remain an increase in the production of racehorses, I would estimate that we are slightly up by 10 percent or so from the 2011 figure rather than the 15,000 that we are seeing today.

Statistically, we have shown that our supply has remained somewhat intact for almost a decade. Other breed registries cannot make that statement; during that same period, some have experienced roughly 30-percent declines.

Is flat the new high? To breed more mares, the plus side must outweigh the minus. It goes right back to the shiny red apple. Recently, I sat down with a few larger-than-average breeders to discuss growth within their broodmare bands. The conversations were revealing. The response to growth was, “Probably not, but we are always looking to upgrade; it’s quality over quantity.”

Increasing their supply doesn’t tip the scale for marginal cost. How does that equate to the sales this fall? Be prepared to pay more, once again. With overall purses up almost 18 percent over last year, yearling prices should be similar if not higher than the last couple of years, so hunker down.

Along the lines of producing more horses, all of you will once again voice your opinion on rule changes regarding stallion limits at this year’s district meetings. As many of you know, the existing rule caps each stallion at 140 mares.
One of the top trotting stallions in 2019 bred to the limit of 140. Less than 90 of those foals ended up being registered, which is on par from a percentage standpoint. The question being asked is, “Are we limiting ourselves too much by not getting closer to that 140 number?” Would that increase the total number of mares bred? I don’t think so, but I’ve been wrong before. On the other hand, quality performers do pack stadiums at the major sporting events outside of racing.

More racing? I won’t expand on this point too much, since the horse supply remains at current levels. The more honey that gets added to purses will always attract the most flies. So, in the less sugary areas, a shift in either the schedule, days of racing or total number of races will need to take place. For an owner and trainer, that usually doesn’t sit well.
Again, it’s about rightsizing. Many of the entry boxes around the country are light, especially at this time of the year. As soon as the stakes season is over, I expect it to be even more challenging. This balancing act and discussion takes place at the North American Harness Racing Secretaries meeting in Florida each year. Not an easy task for sure, as I have witnessed firsthand.

Along the lines of more racing, many are specific as to what that means too. “Fewer claimers” almost always makes the list, and “racing maidens for more money” is the most frequent. The latter concept is typically made in comparison to the referenced successful Thoroughbred model.

While I do buy that in theory, let me point out the decline in the number of Thoroughbred foals, so the correlation isn’t there, or it hasn’t happened yet anyway. I do agree that it wouldn’t hurt to adjust them slightly to the north, as anything that can be done to recoup expense for the owner would be a bonus—especially, as I mentioned previously, with the higher costs expected for yearlings this season. It’s worth a shot.

To round out the list, I can wholeheartedly support the need for more horse owners. Engagement and involvement are crucial to our overall existence. At each level, this needs to be on the front of everyone’s mind, every day, not just from the standpoint of finding someone to purchase a racehorse to help us absorb that $12-a-bale hay, but from the standpoint of bringing your friend, neighbor, colleague, etc. closer to the game that you cherish.

Share the passion, it’s contagious. Bringing more people from outside of the circle will eventually grow our circle. That involvement leads to more energy, excitement, demand, and so on, in all areas. That kind of growth is invaluable in the big picture. Local and state officials need to see that vitality. Progress buys horse feed, tack and supplies, fuel at the local gas station, and so on. If you don’t think that doesn’t grab the attention of your local officials, you are sadly mistaken. It makes a difference.

So, relax. It is completely natural for an industry to shift during an evolution. By recognizing and adapting to changes, we have been given a chance for the game to be something that can be more efficient and to serve a much more profitable industry. Rightsizing doesn’t always end in downsizing. We just need to be the right size, right now. Growth can happen! It just takes a village to get there.

TC Lane

The views contained in this column are those of the author alone, and do not necessarily represent the opinions or views of the United States Trotting Association. To comment on this column, email us at readerforum@ustrotting.com.