The pregnancy losses may have slowed, and University of Kentucky researchers may have identified the leading cause for the mare reproductive loss syndrome that hit the Bluegrass region this spring, but the damage is just now being assessed. The losses, which will be sustained over the next several years, will be devastating for many farm owners and breeders.
In addition, just as a strong economy has good news that trickles down from the top, the impact of this bad news will be felt in many ancillary businesses that deal directly and indirectly with Kentucky's horse industry, the state's No. 1 agricultural crop.
The losses began with the deaths of hundreds of 2001 foals at or shortly after birth. Those deaths could be as high as 5% of this year's foal crop in Kentucky, which was expected to be around 10,000. If the tally remains 500 dead foals, that's 500 live-foal stud fees that won't be paid, 500 foals that won't need to be cared for, fed, prepped for auction, sold, trained, or raced.
But this year's loss pales in comparison to what breeders will sustain in 2002. Based on early reports from a cross-section of farms with mares that had early-term abortions, The Blood-Horse estimates that next year's Kentucky foal crop may be reduced by as much as 21%. If that's the case, the combined economic impact will exceed $200 million.
This won't be the first time the Thoroughbred industry has taken a major financial hit. Most people in the business remember the 1980s, when an unprecedented rise in prices caused many horse operations to go deep into debt. When the inflationary spiral ended and prices plummeted, many of those operations didn't survive.
Those who made it through the tough times were determined not to let history repeat. Many farms diversified to seek additional revenue streams. Boarding farms consigned to sales. Consignors added stallions to their operations. The foal losses are hitting those farms especially hard.
To their credit, the National Thoroughbred Racing Association, American Horse Council, and Kentucky Thoroughbred Association acted quickly to seek federal help. Kentucky's two Republican senators, Jim Bunning and Mitch McConnell, support legislation that would set up a federal low-interest loan program to farms and individuals that have suffered the highest losses. The legislation would be designed to benefit small operations.
Complicating matters is the recent party switch by Vermont Sen. James Jeffords, whose departure from the Republican Party gives Democrats a narrow majority in the Senate and could make Republican-sponsored legislation more difficult. That means Iowa Democrat Tom Harkin would presumably become chairman of the Senate Agriculture Committee, replacing Indiana Republican Richard Lugar.
Kentucky Democratic Gov. Paul Patton has done his part in helping seek federal assistance. But the time has come for state government to also look at the contributions made by the Thoroughbred industry to Kentucky's economy -- in direct taxes, jobs, tourism, and support of thousands of businesses -- and consider what allowances can be given to help the industry absorb this economic disaster.
In some ways, Kentucky's legislature takes the horse industry for granted. It has watched as other states built lucrative incentive programs for breeders. It has resisted taking action after border states Indiana and Illinois introduced casino gambling, sucking millions of dollars from Kentucky's horse industry. It has taxed Kentucky's breeding industry with a sales tax that has convinced a number of individuals to operate their businesses out of state.
The equine health crisis is exerting great economic damage on Kentucky's horse industry, and, ultimately, on the state economy. Perhaps the federal or state government can brighten the day with some good news.