Thoroughbred breeders told Kentucky legislators Aug. 21 the state must step up and offer assistance if its signature industry is to stabilize and grow in years to come.
The breeders, who spoke during the second meeting of the Interim Joint Committee on Agriculture and Natural Resources Subcommittee on Horse Farming, offered an eye-opening and at times detailed look at the current state of affairs in Kentucky. They represent small, mid-size, and large breeding operations in Central Kentucky.
"The racing and breeding industries in Kentucky are getting very little support from state government," Robert Courtney Jr. of Crestfield Farm told committee members at the meeting held at the Kentucky State Fair in Louisville. "We know you're on our side, but if the industry continues in the direction it's going ... we're going to have a harder time existing."
The subcommittee was formed earlier this year in advance of the 2004 legislative session in an effort to educate lawmakers on the scope and importance of the horse breeding and racing industries in Kentucky. Sen. Damon Thayer, who co-chairs the panel with Rep. Susan Westrom, has repeatedly said the meetings aren't designed to be forums for alternative gaming, bills for which have failed to pass the legislature the last two years.
On Aug. 21, Thayer, who favors a constitutional amendment on the expanded gambling question, again said the topic wouldn't be addressed at the subcommittee meeting. But as he discussed a need for funding to accredit the Lexington Disease Diagnostic Laboratory, Courtney said: "Sen. Thayer, I'm not going to say it, but you know where that funding needs to come from."
Doug Cauthen, president of WinStar Farm, said owners Kenny Troutt and Bill Casner have invested about $100 million in the operation. Still, though committed to Kentucky, WinStar has looked to other states such as New York to generate some revenue, Cauthen said.
WinStar sent some mares to New York to be bred to take advantage of breeding incentives not offered in Kentucky. The Kentucky Thoroughbred Development Fund, which provides purse supplements for maiden special weight events, allowance events, and stakes, is an owner-bonus program.
Cauthen said WinStar executives met Aug. 17 to discuss the farm's financial situation and come up with ways to generate revenue.
"We have to be cash-flow positive," Cauthen said. "We have to make it work. (The owners) want a return on investment. They're businessmen. But if we have to bleed assets to keep the thing going, in five years, they'll be out of the business."
Catherine Parke, who owns Valkyre Stud near Georgetown, used specific numbers to explain the challenges of operating a smaller horse farm. In 2002, total revenue was $699,238, and total expenses were $675,472. Much of the revenue was derived from boarding horses, a business impacted by mare reproductive loss syndrome of 2001.
Parke said she remains optimistic about the future of her operation and the Thoroughbred breeding industry in general, but noted farms are struggling with issues such as the fallout from MRLS and a lack of non-skilled labor.
When the question of financial assistance arose during the subcommittee meeting, there were several hints at the topic of expanded gambling, which probably will be revisited next year.
"We need to do innovative things to compete," Rep. Charlie Hoffman said. "We don't have a decade to waste like we did with the lottery. If we wait 10 years before we get a boost, it will be too late."