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Saturday 3 December 2016

Profiting from approved sires and low costs

Expect better returns with use of good stallions

Published 15/03/2011 | 05:00

Choosing an approved stallion as a sire will increase your chances of producing a profitable animal
Choosing an approved stallion as a sire will increase your chances of producing a profitable animal

Breeders who choose approved stallions as sires for their breeding enterprises can expect to sell their foals for almost €700 more than breeders who use unapproved stallions.

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The latest sales analysis from Teagasc shows that foals by approved sires achieved €692 more at the Cavan and Goresbridge sales in the past two years than foals by unapproved sires.

The difference between foals from approved sires and foals of unrecorded breeding was a massive €1,382, according to the sales analysis.

For the study, Teagasc equine specialists Ruth Fennell and Wendy Conlon examined the sales results from all sport horse sales in Cavan and Goresbridge in both 2009 and last year, but excluded the breed specific sales of Connemaras and Irish Draughts, and the monthly sales.

Covering almost 5,000 animals in all, the figures represent only a small portion of the overall market but they are the only accurate figures available on sport horse sales in the country.

An earlier study of last year's sales results was featured in the Farming Independent in January but the addition of the 2009 results adds further weight to the analysis.

Tables 1 and 2 show the sales figures for 2009 and last year.

In 2009, some 2,326 horses were sold across all age categories, while last year the hammer dropped on 2,517.

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Prices fell between 2009 and last year for all categories except foals, where prices improved by just over €100 per foal on average.

The huge stallion population in Ireland is highlighted by the fact that 920 stallions from 21 different breeds sired the 5,000 animals sold.

Majority

On closer examination, the majority (30.3pc) of animals sold with breeding recorded were sired by Warmblood stallions, closely followed by Irish Sport Horse (ISH) sires, which accounted for 27.6pc of the stock sold. Thoroughbred stallions accounted for just over one-quarter (25.3pc) of the horses, while Irish Draught (ID) stallions were the sires recorded for 13.1pc of animals. Connemara stallions sired 2.3pc of the animals sold and stallions registered to the Irish Piebald and Skewbald Association (IPSA) were the sires of 1.4pc.

The majority (52.7pc) of the stallions listed as sires were approved, while 30.6pc fell into the categories of S1, S2, Supplementary 1, Supplementary 2 and unapproved. The remaining 16.7pc of stallions did not have breeding recorded.

The effect of the stallions' status on sales results was stark, the Teagasc specialists found.

Foals by an approved stallion sold for an average price of €1,651, compared to €959 for foals by unapproved sires, while the average price for foals that did not have a sire recorded was a meagre €269.

As table 3 shows, the clear preference by buyers for approved stallions is carried through into the older age categories, although the gap does tend to narrow as the horses get older.

Three-year-old animals by approved sires sold for €2,801 on average, while the average price for three-year-olds by unapproved stallions was €460 lower at €2,341. Three-year-olds by unrecorded sires sold for €411 less at an average price of €1,930.

Moving up a year, four-year-olds by approved stallions made €2,945 on average, while four-year-olds by unapproved stallions made €2,511 and four- year-olds with unrecorded sires sold for €1,930.

In the five-year-olds and older category, approved stallions' stock sold for €3,357 on average, while unapproved sires' offspring made €2,651. The difference between unapproved sires and unrecorded sires is narrowest in this age group, at just €79. This could be because performance records for an older animal may influence the buyer's decision more than the presence of recorded breeding.

However, the moral of the story is that horses by approved sires make more money at the sales than stock from unapproved sires.

Better

How much better off would a breeder be if he/she used an approved sire rather than an unapproved sire?

According to the Teagasc analysis:

  • A foal would fetch €692 more on average;
  • A three-year-old would fetch €460 more on average;
  • A four-year-old would fetch €706 more on average;
  • A five-year-old would fetch €1,119 more on average.

The Teagasc specialists also examined the effect that the sire's breed had on the sale price of foals and found some interesting results.

As the first rows of figures in table 4 show, foals with Warmblood sires were the sale toppers, with an average price of €1,966 over the past two years. ISH-sired foals were next, with an average of €1,048, while foals by Thoroughbred stallions sold for €875 on average.

Foals by (ID), Connemara (CP) and IPSA stallions all achieved similar average prices of €510, €493 and €540 respectively.

However, as the age of horses sold increased, buyer preferences tended to change. In the five-year-old-and-older category, animals sired by ISH stallions achieved the highest prices, while the Connemara Pony was second only to the Warmblood sire across all ages, slipping in just ahead of the ISH.

In order to assess the profitability of the horses sold, the Teagasc team estimated the production costs for horses in each age category, which included an average covering fee of €700 and estimates for feeding etc, but not professional fees, mare depreciation, land lease, machinery costs, show entries or transport costs.

According to the Teagasc figures, an animal was profitable if the sale price exceeded a certain figure, as outlined here:

  • Foals exceeding €2,000;
  • Three-year-olds exceeding €3,500;
  • Four-year-olds exceeding €4,500;
  • Five-year-olds and older exceeding €5,500.

While the production figures used by Teagasc could be challenged in some cases, for instance Connemara breeders are unlikely to pay €700 in covering fees, they are nonetheless a useful yardstick to measure against. It should also be remembered that the analysis does not include private sales, which account for large numbers of horses sold in the country.

Shocking

Nonetheless, the results make for some pretty shocking reading and should serve as a wake-up call to breeders in advance of the foaling and breeding season.

Only 21.4pc of foals sold in the past two years were profitable, according to the Teagasc analysis, while only 24.3pc of three-year-olds were profitable.

The figures for older animals are even less inspiring, with just 13.1pc of four-year-olds turning a profit and only 7.5pc of horses aged five and older making a positive return.

Once again the study shows that using an approved stallion is a key step towards profitability: 68pc of the 483 profitable horses sold were sired by approved stallions.

The message for breeders this season is clear: keep a close eye on your production costs and use approved sires to increase your chances of turning a profit.

Indo Farming



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