Anne M. Eberhardt

Study: KY Horses Generate Billions of Dollars

First-ever detailed economic impact study released about state's equine industry.

Results of the first wide-ranging study of Kentucky's equine industry since 1977 were released Sept. 6 and showed that last year the industry had a total economic impact of almost $3 billion and generated 40,665 jobs.

Also, according to the "2012 Kentucky Equine Survey," the equine industry generated approximately $134 million in taxes to the state.

A comprehensive statewide survey of all breeds of horses, ponies, donkeys and mules, the study was conducted by the University of Kentucky College of Agriculture, Food and Environment's Ag Equine Programs and Kentucky Horse Council, in conjunction with the U.S. Department of Agriculture National Agricultural Statistics Service. It is the first-ever detailed economic impact study about Kentucky's equine industry, according to its collaborators.

The survey results were released in conjunction with the UK College of Agriculture's annual legislative day and the study is likely to be used for future policy discussions and decisions affecting the state's signature crop.

Jill Stowe, the University of Kentucky Ag Equine Programs director and project lead, said the total economic impact is measured by the output effect and is an estimate of revenues earned by the sale of goods and services related to the equine industry and its interconnected industries. The study also showed that the value-added effect, which Stowe said is perhaps a more descriptive measure of economic impact because it accounts for costs of production, has an estimated economic impact of $1.4 billion. The value-added effect is a measure of profitability and new income paid to workers rather than simply revenue.

"The estimates underscore the continued significance of the equine industry to the commonwealth, and they show that each segment of the industry contributes in important ways to the economy as well as to the rich cultural fabric of Kentucky," said Stowe, who is also associate professor in agricultural economics, in a statement.

"Now that this data is available, the Kentucky Equine Survey team anticipates that policy makers will have better data on which to set policy (and that) entrepreneurs and business owners will have better data from which to develop business plans and ideas, veterinarians can undertake better disease surveillance, community planners can use the data to facilitate future projects, and the state now has a benchmark going forward," the study's authors said in the report.

By sector, breeding had the highest estimated employment figure of 16,198, an output of $710 million and a value-added impact of $333 million, according to the report. Racing had the highest output impact at $1.28 billion, with a figure of 6,251 in employment and $601 million in value-added impact. Competition figures included 2,708 in employment, $635 million in output and $297 million in value-added impact. Recreation had 594 in employment, $166 million in output and $78 million in value-added impact. Other, which accounts for operations such as therapeutic riding facilities and those where horses are used for work, had an employment figure of 14,914, a $194 million output and a $91 million value-added impact.

The first phase of the study was released in January and measured Kentucky's equine and asset inventory. That portion of the study found that the state is home to 242,400 horses, topped by 54,000 Thoroughbreds and 42,000 Quarter Horses, and the total value of Kentucky's equine and equine-related assets is estimated at $23.4 billion. The survey's results identified 35,000 equine operations and 1.1 million acres devoted to equine use.

Also from the inventory portion of the study, the total of all equine-related sales and income for equine operations was about $1.1 billion. That total came from sales of all equines, estimated to be $521.1 million, and $491 million in income from both breeding and non-breeding services, such as training, lessons, boarding, farrier, transportation, purses, and incentives.

The first phase also found that equine-related expenditures by equine operations totaled about $1.2 billion. Capital expenditures by equine operations, including the purchase of equines, real estate and improvements and equipment, were estimated to be $337 million. Operating expenditures, including expenses paid for boarding, feed, bedding, veterinary, supplies, farrier services, breeding, maintenance and repair, insurance premiums, utilities and fuel, taxes, rent and/or lease, fees and payments, shipping and travel, training and other fees, totaled $839 million. Notably, 77% of these operating expenses were spent in Kentucky.

The primary use of the majority of Kentucky's equines is trail riding/pleasure (79,500), followed by broodmares (38,000), horses currently idle/not working (33,000), competition/show (24,500), horses currently growing, including yearlings, weanlings and foals (23,000), racing (15,000), work/transportation (12,500), breeding stallions (3,900) and other activities (13,000).

According to the report, the Central Kentucky area accounts for the largest concentration of acreage devoted to equine operations, topped by Fayette County with 89,000. Fayette was followed by Bourbon (48,700), Woodford (44,200), Scott (26,600), Grant (22,000), Oldham (21,000), Grayson (18,900), Warren (18,700), Boone (16,500) and Carter (16,400).

"The College of Agriculture, Food and Environment is proud of this project because first and foremost, it represents the best available methods of surveying that universities and government can provide. But the most compelling aspect of this study is that our future policy discussions can be guided by solid numbers," said Nancy Cox, associate dean for research in UK's College of Agriculture, Food and Environment, Kentucky Agricultural Experiment Station director and administrative leader for UK Ag Equine Programs.

Funding for the project was provided by the Kentucky Agricultural Development Fund, along with UK's College of Agriculture, Food and Environment, the Kentucky Horse Council and numerous other industry organizations and individuals, a complete listing of which can be found on the project's website. More information about the 2012 Kentucky Equine Survey, including a copy of the final report and appendices, can be found at 2012 Kentucky Equine Survey.