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Independent.ie

Tuesday 6 December 2016

Number crunch your way to profit

Teagasc sales results are a must-read for breeders

Published 22/03/2011 | 11:32

Profitable animals are in short supply, but choosing the right sire can deliver a bigger financial return
Profitable animals are in short supply, but choosing the right sire can deliver a bigger financial return

As the Teagasc analysis showed last week, using an approved sire on your mare is one of the fastest ways to ensure that your foal is a profitable animal.

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However, profitable animals are in short supply, with sales results showing that just 21pc of the foals sold at the Goresbridge and Cavan sales in 2009 and 2010 were profitable, while only 24pc of three-year-old horses were profitable.

The profitability figures for older horses make for even less appetising reading. Only 13pc of four-year-old horses made a profit for their breeders, while a dismal 8pc of five-year-old animals and older crossed the profitability line.

Of course, whether an animal is profitable or not depends on the costs of production, which Teagasc experts have estimated as €2,000 for foals, €3,500 for three-year-olds, €4,500 for four-year-olds and €5,500 for horses aged five and older.

These figures are based on an average stud fee of €700 and do not take into account professional fees such as those charged for breaking, mare depreciation or land lease and machinery costs. Show entry fees and transport costs are also excluded from the costs of production.

Some breeders will argue that their costs of production are lower than those used by Teagasc so the only solution is to sit down and calculate your own individual costs, but remember to add in everything or the final figure will be inaccurate. What's the point in fooling yourself into thinking you are making a profit when you are, in fact, losing money?

Argue

Connemara breeders have a strong case to argue that their costs of production would be lower than others because their average stud fees are highly unlikely to reach €700.

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Teagasc experts Ruth Fennell and Wendy Conlon have scrutinised the sales figures for 2009 and 2010 using the Teagasc profitability figures outlined to highlight the sires that produced three or more profitable animals.

The results show that off-spring of warmblood sires produce a better financial return in the younger age categories, particularly foals, while in the older horse categories, the Irish Sport Horse sires performed best. The Connemara pony sire was only marginally lower than the warmblood sire, the analysis showed.

Looking at the foal figures (table 1), Oldenburg stallion OBOS Quality produced foals with the highest average price, with four foals making an average price of €4,650 at the sales in the past two years.

However, the Hannoverian sire Lux Z produced the highest number of profitable (>€2,000) foals, with 13 foals making an average price of €3,334 each.

He was closely followed by Holstein sire Ars Vivendi, who sired 12 foals that sold at an average price of €3,688.

The foal list is dominated by KWPN breeding, with seven of the 16 sires who produced foals over €2,000 approved by the Dutch warmblood association. Only one thoroughbred sire -- Master Imp -- makes it onto this list, producing three foals that averaged €2,467 each.

However, when looking at this sire ranking, it is important to remember that these results represent only a small proportion of the overall market. Only 4-5pc of the foals born in any given year are sold at public auction. Nonetheless, these are the only reliable figures available to breeders.

Moving up into the three-year-old age category (table 2), there is an obvious increase in the amount of Irish Sport Horse and Thoroughbred breeding in the sire rankings. Irish Sport Horse (ISH) stallion Cruising tops the list of sires that produced three or more profitable three-year-olds, meaning they sold for more than €3,500.

Nine Cruising three-year-olds sold for an average price of €8,678 each at the auction sales in the past two years. He was closely followed by Selle Francais sire Harlequin du Carel, who produced 12 three-year-olds at an average €7,000 each.

Shannondale Sarco, an S1 Belgian Warmblood, was the most prolific sire in this list, with no less than 15 progeny selling for an average price of €5,760.

Aside from Cruising, the other Irish Sport Horse sires to produce three or more profitable (>€3,500) offspring were Carrick Diamond Lad, Captain Clover, Loughehoe Guy, Colin Diamond, Garrison Royale and the Supplementary 1 sire Out of Touch.

Interestingly, the recently exported thoroughbred sire Power Blade produced three horses that averaged €4,967 at the sales.

Top event rider Oliver Townend and his business partner Nina Barbour are marketing the bay thoroughbred at Harthill Stud in Chester, England as "Ireland's best kept secret ... the Thoroughbred the UK Sport Horse Industry has been waiting for".

Moving to the four-year-old category (table 3), 12 stallions produced three or more profitable (>€4,500) four-year-olds.

Top of this list is the ISH stallion Errigal Flight, who produced three four-year-olds with an average price of €8,333.

The Hannoverian sire Lux Z and ISH sire Touchdown produced six profitable four-year-olds each, with average prices of €7,283 and €5,500 respectively.

Three thoroughbreds appear in this list; Ghareeb who sired four offspring at €5,425 on average, Bonnie Prince who sired four at an average of €5,000 and Master Imp who sired three at an average of €4,867.

The five-year-old and older category (table 4) was dominated by Irish Sport Horse and thoroughbred sires. The profitability cut-off point for this group was €5,500.

Topped

ISH stallion Cruising topped the list in terms of the highest average price and the number of offspring, with seven horses sold for an average of €7,700.

The remarkable sale of Touchable, a showjumping mare, rewrote the Goresbridge record books in 2009 when she sold for €150,000. Her sire, ISH stallion Touchdown, sired four horses at an average of €7,467 when she was excluded.

However, the Touchable sale highlights the private sales that cannot be recorded for analysis.

"We don't have data from private sales so we are limited in that way," points out Ruth Fennel from Teagasc.

"We are missing information from the bottom of the market, for example, the factory market and the top prices at the highest end of the market," she says.

"But also some horses in the middle, for example the traditional type hunters who sell well to England but don't go through Goresbridge or Cavan."

Nonetheless, the Teagasc analysis covers more than 5,000 horses and provides much food for thought.

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