Farm Ireland
Independent.ie

Friday 15 December 2017

Breeders facing losses as foal prices struggle

Sport horse breeders selling foals by public auction at Goresbridge and Cavan routine sales lost €74/hd on their foals even before the stud fee was paid, startling new research from Teagasc has revealed.

The average price of sport horse foals at the routine foal sales in both venues in 2013 was €1,577 but the breeders forked out €1,651/hd on feed, dosing, veterinary costs and registration fees to bring their foals to weanling stage.

Even more shocking is the fact the figures do not include stud fees, which typically range from €200-3,500 for foals at the sport horse performance sales.

They also do not include any charge for land or labour on the part of the breeder.

The figures were revealed at the Teagasc National Equine Conference 'Producing the Modern Showjumper' in Tullamore recently by equine specialist Declan McArdle.

Mr McArdle found that the introduction of elite foal sales in 2013 boosted sales figures for the year by a remarkable 42pc, his research found.

The average foal price for 2013 jumped from €1,577/hd to €2,242/hd when the figures for the elite foal sales at Cavan and the Irish Breeders Classic were included.

ELITE

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However, even when the elite sales figures were included, breeders would struggle to break even.

At an average sale figure of €2,242, there was only €591 left over after the basic costs of production to cover stud fees, labour and land costs.

Mr McArdle told the conference that only the top 20pc of foals sold by public auction were likely to return a profit to their breeders.

The top 20pc of foals in 2013 sold for an average of €3,935, which would cover the costs of production (€1,651hd), a stud fee in the region of €1,200-1,500 and some land and labour costs.

The Teagasc expert described the sales figures as a "harsh reality" for the majority of breeders and told conference delegates that in order to make a viable return from sport horse breeding, they needed to be aiming for the top 20pc of the market.

He added that for breeders focused on producing the correct type of foal that the market demanded, the rewards were there. The average price of foals at the elite sales was €5,239 and the top 10pc of foals in the elite sales sold for €7,750 on average.

The analysis was focused purely on public auction sales and did not include figures for private sales.

However, a UCD report on the overall value of the sport horse industry to Ireland, published in 2012, found that 73pc of foals were sold privately and that the average price reported by breeders for stock was €4,755/hd.

DISMAL

Table 1, far left, shows some dismal figures for foals at the bottom end of the market. For the past five years, the bottom 10pc of foals at performance sales have failed to break the €250/hd mark.

Clearly these foals are not making any money for their breeders and are actually costing them hundreds of euro to produce without any return.

Of course, whether their owners are breeding these foals with the aim of a commercial return or not is unclear.

Some of their owners may be breeding as a hobby and do not care that they are losing money.

What is clear, however, is that breeders need to aim for the top of the market in order to make any return.

Analysis of the sales figures at Cavan and Goresbridge performance sales for three-year-old horses also showed some stark results.

The average price for a three-year-old in 2013 was €3,031 but there was a massive variation in prices, ranging from just €475/hd on average for the bottom 10pc to €7,457/hd for the top 20pc.

These figures include the elite sales such as Goresbridge Go for Gold, which boosted the figures by around €600/hd from €2,460 to €3,031/hd on average.

Teagasc research has put the cost of producing a horse to three years old at €3,440, excluding a stud fee, land and labour charges.

Based on that production figure, the average three-year-old cost its breeder €980 before the stud fee was even paid.

At the other end of the scale, however, the top 20pc of three-year-olds were well capable of covering their costs and even making their owners a profit.

The top 20pc of foals (including elite sales) sold for €7,457/hd and left just over €4,000 to pay stud fees, land and labour charges.

Faced with such dismal returns, what can breeders do to change their fortunes?

The overwhelming message from all the speakers at the Teagasc National Equine Conference was to focus on selecting a dam with an excellent performance pedigree and use a proven sire on her to produce a foal that the market wants.

International showjumper, breeder and producer Clem McMahon told the conference delegates that the Irish mare herd needed to be upgraded.

"There are too many mares being bred that have weak pedigrees, mares that are only ordinary models and lack the athletic ability, blood and quality to breed good foals," he maintained.

"There are mares being bred that have no competition record and they are being bred to horses with no performance record, second rate imported stallions and fourth-rate thoroughbred stallions," he added.

Mr McMahon said those mares and stallions produced foals that were of a poor type, with poor pedigrees and were physically unathletic with bad canters.

However, he maintained that breeders could turn their fortunes around by educating themselves on the type of foal required by buyers.

Irish Independent