With Breeding Season Poised to Begin, CA Breeders Weigh in on Year Ahead

[Wandering Eyes]

The news has arrived thick and fast for the Northern California industry over the last couple of months, as racing operations have consolidated in the Southern half of the state.

Few state industry stakeholders remain unaffected by these developments, certainly not the breeders, whose commercial decisions today ripple years into the future. The breeding sheds don't open for another couple of weeks. During that time, many currently undecided minds will be resolved. Among those California breeders currently canvassed, however, their outlooks for 2025 are a mixed bag.

On the one hand is optimism in some quarters that years of declining trends will now lead to a period of economic stasis or even tentative growth, while on the other, fears that lack of racing opportunities will see significant contraction at the lower end of the market especially. Larger outfits appear much better insulated from the harsh headwinds than smaller owner-breeders.

“From where I sit and who I work for, you wouldn't know anything's amiss. These folks are gung-ho,” said Kevin Dickson, farm manager for Barton Thoroughbreds, the 200-acre family-owned breeding behemoth in California's Santa Ynez Valley. “Just from our numbers, we're not slowing down.”

Dickson said he estimates about 160 mares will be foaled at the farm over the next few months. “And I would say we'll breed easily that many this year,” he added. “We have 40 mares in Kentucky right now getting bred, and the rest of them are home supporting our five stallions.”

Outside support for these stallions is “a little less” than typical for the time of year, said Dickson. One of them is Shaaz (Uncle Mo), new to the farm in 2024. As with most second-year stallions, his numbers have fallen off.

While Barton is maintaining its numerical firepower, “it's still hard to get excited about anything out here on the West Coast at the moment,” Dickson said. “We just lost another track. Now we've lost racing dates for the fair circuits. It's looking pretty gloomy-feels like we're circling the drain a little bit.”

It all comes down to purses, said Dickson-more pointedly, the forecast is grim without supplemental purse revenues lacking in California but enjoyed in other states. Think Historic Horse Racing, a state subsidy, or some other slice of gambling revenue. And he emphasized the economic engine that racing provides.

Indeed in recent years, the California horse racing industry directly contributed over $4.5 billion to the state's economy, and over 77,700 jobs.

Tom Clark, owner and manager of Rancho San Miguel's sprawling 250-acre property in San Luis Obispo County, agrees.

“Until that's sorted, we're just shuffling deckchairs on the Titanic,” he said.

Clark currently houses around 150 mares, both his and clients-a number down from around 180 two years ago.

“Most of those are ones I'm hoping will re-breed,” he said. At the same time, he predicted as much as a one-third drop off in mares bred this year. “What I'm not seeing is outside mares coming in.”

In California, the number of mares bred has shrunk from 5,823 in 2004 to 1,493 last year. This at a time when Cal-breds make up a significant portion of the fields in California.

Another trend, said Clark, is growing demand around Thoroughbred mares in California for activities other than breeding, including having mares serve as surrogates, he said.

“I'm getting calls from Montana, from people working with polo horses. I'm getting calls about recip mares. But nobody wants to breed to Thoroughbreds,” he said.

“We are at a critical juncture and if there's no immediate turn-around, we'll look to diversify into other breeds, other types of animals on our farm. Quarter horses. Show horses. Rodeo people,” he said, about Rancho San Miguel. “We need to expand our market, let's put it that way, in order to survive.”

Adding to California breeders concerns, he said, were comments like the ones by The Stronach Group's Belinda Stronach on last week's Pegasus broadcast that dense urban settings are “not great” for horses.

“I think more and more people in California see the writing on the wall for Santa Anita as well.”

Clark's outlook, however, isn't uniform.

California Thoroughbred Breeders Association (CTBA) president Chief Stipe Burge declined to speak for the story, saying it was too early for him to comment. But board member Terry Lovingier emailed a series of bullet points about why he remains “bullish” on California breeding.

“As long as we have racing at Santa Anita and Del Mar, now is the time to breed. I am of the belief we will be racing here for a long time,” wrote Lovingier, later clarifying that he believed racing would continue at Santa Anita for another five to eight years at least.

Among the bullet points that Lovingier sent were several outlining what he sees as increased financial incentives for California's remaining breeders, including the following:

 

• That unspent monies from the 20% additional owners' award paid to Cal-breds that win open races in the north, “will directly go back into Breeders and Stallion awards,” wrote Lovingier. “In 2024, that was approximately $600,000. In 2023, it was approximately $1,000,000.”
• That because the maiden bonus in the north will no longer exist, “that program will get rectified and balanced soon, and the maiden bonus could go back to historical percentages for Cal Breds,” he wrote.
• That a “certain potential increase in handle on the south” will lead to increased total incentive money generated and increased breeders' awards.
• And that purses at Santa Anita's Spring meet and at Del Mar are expected to go up. “A maiden race at Del Mar for Cal Breds will be upwards of $80,000,” he wrote.

 

Long-time owner-breeder Nick Alexander made a similar observation.

“Two things happen when a business goes through a downcycle. You lose a certain number of people that are friends and neighbors but also competitors. Some people just can't take or stomach the loss, and either can't or aren't willing to wait to see if it does turn around,” said Alexander. “That being said, you still have to have a total number of horses to fill a card.”

At the end of last year, Alexander participated in the Fasig-Tipton digital sale with a partial dispersal of his stock, selling 11 yearlings and 2 broodmares.

“All I did was keep from expanding,” he said. “I didn't really cut overall numbers.”

Alexander still has more than 20 mares set to foal in the next few months, he said. “Going forward, we have 32 mares that we will breed this year,” he said.

From Alexander's perspective, he sees not so much growth anytime soon on California's horizons, but rather a plateauing of economic trends. “The most recent numbers would indicate that we might have passed the worst and things are turning around.”

Alexander is in his 80s. Others like Justin Oldfield, who owns and operates Daehling Farms in Northern California with his wife, Julia, represent a generation expected to carry the industry on their shoulders for decades to come.

Oldfield is keeping his powder dry on any hard prognosis about breeding plans this year. At the same time, “I'm very concerned,” he said. “I'm not going to paint a rosy picture of everything.”

The Oldfields currently have about 12 mares of their own, and house another roughly 70 mares from clients. Breeding plans for this fleet of broodmares remains largely up in the air, he said.

“This is not the time to say it's premature. It's not. A lot of people have already made breeding decisions. But I'll know more in about 45 days,” Oldfield said.

New under the Daehling Farms banner is Flavius (War Front), a stallion he sees as bringing the necessary quality to fit the Southern California program.

“There's a lot of interest, but not a lot of [firm] business at this point,” he said, about Flavius. “That doesn't concern me so much because I assume there's going to be a lot of breeders making last-minute decisions.”

The Juddmonte Farms-homebred is indicative of what Oldfield sees as a breeding model in the state that will only continue to emphasize quality over quantity.

“We have a lot of owners in Northern California who breed their horses and race their horses. And I think those guys make decisions on breeding based on money that they have coming in from horses that are of racing age,” he said, adding that the opportunities for these Northern breed-to-race outfits “are obviously much more limited than what they were” in the past.

Oldfield could be talking about Northern California-mainstay, Gloria Haley.

Haley purchased last year three mares with the expectation that Golden State Racing would continue racing this year at Pleasanton, bringing the total of mares to her name to five.

“I've got quite a lot of babies hitting the ground. I just had one born a few days ago. A Frosted,” Haley said. Haley will breed two of the five mares. As for the other three, she's currently undecided.

“I'm just going to have to reevaluate the situation according to the economics of this,” said Haley. “A lot of people up here are in a similar situations.”

People like Dr. William Gray, another Northern stalwart scaling back his operations.

Typically, Gray will breed 16 to 17 of his mares. This year, that number will likely be eight to 10, he said. Furthermore, Gray will usually board 10 to 15 mares for outside clients at his 150-acre farm in Cottonwood, California, but he's received no firm bookings thus far this year.

“There's just not the market for them,” Gray said. This speaks of hardening market forces. Shrinking racing opportunities, too.

“I do appreciate the fact they're trying to accommodate us,” he said, about Santa Anita's efforts to write races for the Northern California horse inventory. “But we're having a really hard time getting the races to go.”

Owner-breeder Rozamund Barclay has a similar take.

“What people are doing is, the lesser horses are being sold. A lot of trainers, that's all they have.”

Prior to the COVID pandemic, Barclay had around 30 mares. Post-pandemic, she culled that number to 12. This year, she's planning to breed to just six of those mares.

“That's one fifth what it was just a few years ago,” said Barclay. “We all feel like we're on shaky ground,” she added. “I just don't know what's going to happen to the people of the North.”

Pete Parrella, who owns Legacy Ranch near the Sierra Nevada foothills, said he was optimistic about the returns for a talented Cal-bred. But growing operational costs from workers' compensation, minimum wage, feed, training fees and a whole raft of other financial considerations mean that “it's just very difficult to run horses at the lower end,” he added.

Parrella has around 120 horses of his own-a fairly standard number for him. “Typically, we've got anywhere from 80 to 150,” he said. Including clients' horses, he has about 300 horses on the ranch. “We've been steady at that for a while,” he said.

Like a few others in the state, Legacy Ranch has a new kid on the stallion block, Forbidden Kingdom (American Pharoah). The ex-Richard Mandella runner has already secured about 30 breedings for the year. Parrella hopes for around 50. “We've had a good response, even with what's going on in Northern California,” he said.

“What's the worst that could happen? Let's say it all stops, you've got 20 to 30 two-year-olds, but you'll be able to sell them somewhere. There's still value. Ship them back East. You may have to change your program around, but there's other options,” Parrella said.

“But I just believe in the industry,” he added. “I just believe the powers that be, they're going to figure it out. It might get worse before it gets better. But I believe in the long run, it's going to get better.”

 

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