The Department of Equine Business at the University of Louisville was commissioned by the Commonwealth of Kentucky, Office of the Governor, to quantify the economic loss to the Kentucky equine breeding industry resulting from the loss of a large number of foals to Mare Reproductive Loss Syndrome (MRLS) in 2001. Following is a summary of the detailed analysis contained in that study.
An extensive survey of 1,024 breeders and breeding farm operators was carried out to gather information from which computation of economic losses could be made. Six different breeds of horses, accounting for 96% of all registered foals in Kentucky, were included in the analysis. These breeds were: Thoroughbred, Standardbred, Quarter Horse, Paint Horse, Saddlebred and Tennessee Walking Horse. All identified Thoroughbred, Standardbred, Saddlebred and Tennessee Walking horse breeding farms were surveyed. A one in three random sample of Quarter Horse and Paint Horse breeders were surveyed. Those owning or managing farm operations were identified by the survey. The survey had an overall response rate of 28.1%.
MRLS of 2001 affected two different foal crops. The first crop affected were foals of 2001 which were unexpectedly lost in 2001 from mares bred in 2000. These were termed late-term foal losses. The economic loss for these foals began in 2000 when breeders had expenditures for maintenance and replacement of the mares bred that year to produce the foals of 2001. The losses continued through 2001 for mare maintenance and replacement until foaling and through 2002 when the resulting foals lost to MRLS would have been sold. The sale of these horses would be expected to produce revenues to pay for incurred expenses from conception through sale.
The second crop affected were foals of 2002 who were lost from mares bred or re-bred in 2001. These were termed early-term (fetal) foal losses. Losses associated with these foals began in 2001 and will run through 2003 until the time when the resulting foal would have been sold.Table 1
summarizes the foal loss by foal crop, and year.
In all, 1,356 or 9.1% of the 2001 foal crop for all breeds was lost to MRLS. Of more significance, 26% of the 2002 foal crop for all breeds was lost due to MRLS.
The cost of a foal through its sale as a yearling includes mare cost, stud fee, weanling cost, and yearling cost. The estimated cost of producing a foal through its sale as a yearling can also be viewed as the economic loss per foal due to MRLS. The economic cost of producing a foal through its sale as a yearling was found to be:
- $85,142 Thoroughbred
- $46,046 Standardbred
- $18,313 Saddlebred/Tennessee Walking Horse
- $14,517 Quarter Horse/Paint Horse
As shown in Table 2
, the total economic loss to the Kentucky equine breeding industry, from all breeds, over the four year period 2000-2003 is $336 million. Six percent of the loss to breeders has already occurred in 2000. Most of the loss, 77%, occurs in 2001 and 2002. Seventeen percent of the loss is expected to occur in 2003 when the yearlings from the lost foal crop of 2002 would have been sold.
Among those affected by the loss are:
- horse breeders
- stallion owners
- horse farm operations
- horse sale companies
- horse sale agents
- equine transport providers
By consensus, this study was limited to determination of measurable losses. There are other considerations which could affect the estimated losses reported above.
Since the supply of foals which would have sold as yearlings in 2002 and 2003 has been reduced, it is possible that yearling prices for the remaining yearlings in those years will increase. This could reduce breeder losses for those breeders who have yearlings to sell. Additional losses may also occur as a result of the scare over MRLS, which could result in a reduction of mares sent to Kentucky in 2002 or in lower values for mares bred in 2001. The 2001-2003 losses cited above are based on a single 2001 'event'. Should MRLS re-occur in 2002, i.e. not be a one-time event, the losses could be much more dramatic over a longer period of time.
Finally, as in all survey analyses, there is the possibility of non-response bias. In this case, since information on one or more characteristics of the population of breeding operations in Kentucky does not exist, it was not possible to determine the characteristics of respondents vis-a-vis non-respondents. This being the case, a determination of non-response bias in terms of direction or magnitude, if it exists, was not possible.