According to statistics compiled by The Blood-Horse, 4,771 of those 6,262 sold at auction for an average price of $88,733. If 20% fewer foals are sold as yearlings, that is a reduction of 954 yearlings, or nearly $85 million in projected sales revenue to consignors (based on 2000 prices). Auction companies also would feel the impact of the reduction through their loss of commission.Also taking a major hit will be stallion owners. If the average Kentucky-bred is conceived by a $15,000 stud fee (an estimate provided by TBH MarketWatch, a 20% loss in foals, from 10,000 to 8,000, translates into $30 million in lost stud fees.Total impact on these figures is $137.7 million. And that doesn't include the loss of horses available to race (approximately 70% of Kentucky foals race). If there are 2,000 fewer foals, 1,400 would be expected to race. At an average training cost of $25,000 per year, that's another $35 million, putting it well over $170 million -- and that does not include the significant financial hardship caused by the loss of productivity of a capital asset for at least one year.Kentucky's percentage of the total U.S. foal crop has accelerated in recent years. In 1970, there were 3,773 Kentucky foals representing 13% of the national crop; in 1980 it was 5,885 and 18%; in 1990, 7,397 and 18%; in 1995 7,682 and 24%; in 1998, 9,491 and 29%. A loss of 2,000 foals would reduce the U.S. foal crop by an estimated 6% at a time when many racetracks are experiencing shortages in the number of runners.Jay Hickey, president of the American Horse Council, said federal emergency relief funds exist for agricultural businesses that have suffered severe financial hardships as a result of floods, drought, or other natural disasters. Hickey said the horse industry has never benefited from those funds.
With Kentucky's share of the Thoroughbred foal crop in the United States at an all-time high of nearly 30%, the repercussions of the excessive foal loss that many Central Kentucky farms are experiencing may be felt for years to come. Based on figures compiled by The Blood-Horse, the economic impact of the problem could easily exceed $150 million, if foal losses amount to 20% of the anticipated 2002 crop. A 1997 national economic impact study conducted by Barents estimated the Kentucky breeding sector to be a $900 million industry annually.While breeders, farm managers, veterinarians, and researchers are scrambling to determine both the severity of the situation and its cause, estimates of the impact it may have on the 2002 Kentucky foal crop range from less than 10% to a loss of 40% of the crop. Many farms are reporting that between 25%-50% of mares previously found in foal for next year have aborted or are carrying dead fetuses after being scanned by ultrasound.The impact will be much less on the 2001 foal crop, since one aspect of the syndrome -- "red bag" (separation of foal and placenta) or stillborns -- has come late in the foaling season. At a Tuesday afternoon news conference at the University of Kentucky's Gluck Equine Research Center, veterinarian Roger Murphy offered some good news for breeders when he said the affected mares "seem to be cycling back" and can be re-bred. If that is the case, however, mare owners may have difficulty getting to a stallion because of the increased late-season demand. Syndicate managers may have to decide whether to allow mare owners out of contracts and breed to other stallions.Researchers have not been able to identify the cause, but speculation has focused mainly on the unusual climatic patterns -- very hot and dry weather in April and early May, with a brief cold flash that left a light blanket of snow in the region on the morning of April 17. Similar conditions existed in 1980, when an increase in abortions was reported and studied. No definitive cause was found for the 1980 outbreak, which researchers eventually discounted as a statistical anomaly.What would be the impact of a 20% drop in Kentucky's foal crop in 2002? There were just over 10,000 foals born in Kentucky in 2000, up slightly from 1998, when the Kentucky foal crop represented 29% of the total U.S. foal crop. If a similar number was expected in 2002, a 20% loss would mean a resulting foal crop of 8,000.The loss of 2,000 foals has far-reaching economic implications: boarding operations, vanning companies, feed and hay sellers, blacksmiths, auction consignors, auction companies, the Breeders' Cup, and, ultimately, racetracks. Arnold Kirkpatrick, in his book "Investing in Thoroughbreds: Strategies for Success," estimated the average cost for bringing a horse to sale: broodmare/foal expenses to time of weaning, $13,065; weanling expenses, $2,140; yearling expenses, $12,905, for a subtotal of $28,110. If $10,000 is deducted as the broodmare portion of the $13,065 broodmare/foal expense, that leaves a cost of $18,110 to raise a foal to the point of the yearling sale. Of the nearly 10,000 Kentucky foals of 1999, 6,262 of them were offered at public auction as yearlings. A 20% reduction in the number offered, from 6,262 to 5,009, takes 1,252 yearlings out of the business cycle and, using Kirkpatrick's figures, approximately $22.7 million out of the economy.