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The post following was published earlier this week at Paulick Report.

 

There were four graded stakes this weekend, and all four winners were produced from covers to stallions standing in Kentucky … at that time.

But three of the four stallions are now gone. E Dubai’s son Aggie Engineer won the Grade 3 Native Diver at Hollywood, and E Dubai now stands at Ghost Ridge Farm in Pennsylvania. Yankee Gentleman’s daughter Washington Bridge won the G2 Bayakoa at Hollywood, and he now stands at La Mesa Stallions in Louisiana. Horse Chestnut’s daughter Askbut I Won’ttell won the G3 My Charmer at Calder, and he now stands at Drakenstein Farm in South Africa.

Smart Strike’s son Twilight Meteor won the G3 Tropical Turf Handicap at Calder. Of this quartet of stallions, only Smart Strike is still standing in Kentucky, and as a leading North American sire and as the sire of Horse of the Year Curlin, Smart Strike “ain’t going nowhere” to paraphrase Col. Phil Chinn.

Standing for $75,000 live foal at Lane’s End Farm, Smart Strike is the most commercial and most successful of the stallions above. The rest of the sires of this weekend’s graded stakes winners, however, were not bad stallions. They got winners and good stakes winners.

The primary difficulty for stallions and stallion managers in Kentucky is not that some horses succeed and others fail. The problem is that there isn’t enough market strength to support stallions just a hair below the top of the tree.

If a stallion in Kentucky doesn’t make it big and make it fast, the writing is on the wall, and he will have to find another home. And the pricing and breadth of the commercial stallion market drives the profitability of the horse business overall.

Looking back on this most profitable sector of horse breeding, there are trends over the past few decades that should worry not only breeders and farm owners but also all businesses, local governments, and even the legislators of Nowhereville (sometimes called Frankfort).

As a result of adverse economic pressure, the stallion population in Kentucky has been declining for 20 years. In 1991, the first year for which the Jockey Club Fact Book lists data for stallions and mares bred in Kentucky, 499 stallions in the Commonwealth covered 14,595 mares, which represented 21.5 percent of the North American Thoroughbred population.

In 2001, 449 stallions covered 20,281 mares, which were 32.2 percent of the NA breeding population.

In 2010, using the most current numbers from the Jockey Club, only 271 remaining Kentucky stallions covered 17,085 mares.

During this 20-year span of statistics, the number of Kentucky stallions has declined by 45.7 percent. Those stallions are covering more mares, in line with the expanding stallion books of this period, but those mares covered in Kentucky are producing fewer foals in the Commonwealth.

That means there are three factors all exerting greater pressure on breeding in the Bluegrass. First there are fewer Kentucky stallions to use, then there are fewer resident mares, and finally, a significant part of the cause is that there are more state-incentivized breeding programs in competition with Kentucky that offer more money for less risk.

As one prominent Louisiana breeder said, “I’d be fool to let a mare drop a foal in Kentucky, where there isn’t any breeder money. I have to bring them all back here to foal because they earn me 22 percent of any purse money they win for finishing one-two-three. You breed a handful of decent runners, and you’re into six figures by June.”

Furthermore, most of these “regional” programs offer bonuses for owners who stand stallions in their states.

So, if a stallion is doing well in Kentucky but not well enough to make a lot of money by selling dozens of seasons and getting strong returns at the yearling sales, he is a likely prospect to relocate to a regional market where the incentives are sizable.

A similar but more dramatic change of circumstances has happened to the Standardbred breeders in Kentucky. Although not quite as dominant as Kentucky’s Thoroughbred farms, Standardbred breeding was significant in the Bluegrass, once upon a time.

In 1984, 95 Standardbred stallions covered 2,270 mares in Kentucky, and only 18 years later, 30 stallions bred 680 mares in the Commonwealth. The power in Standardbred breeding is not Kentucky but New Jersey, somewhat less well-known as the “horse capitol of the world.”

Which region will be the power in Thoroughbred breeding in 25 to 30 years? Surely the one that wants this industry the most. It’s as simple as that.

 

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