“Breed To Race”: A Way To Stem Foal-Crop Declines?

[Wandering Eyes]

It's the trendline industry eggheads are tracking with dread: a foal crop that has dropped nearly 60% from 1990, with wave-sized ripple effects.

The number of races in the country has fallen a comparable amount over the same period. Some estimates have put the number of shuttered racetracks at about 50 since 2000.

Nor is the U.S. alone. Over in the United Kingdom, modeling by the Thoroughbred Breeders' Association projects the foal crop to fall by around 25% between just 2022 and 2026. A one-quarter drop in four years. Hardly the stuff of sweet dreams.

Against a status quo that doesn't appear to be working, the time is ripe, it seems, for some outside-the-box thinking. What ideas, therefore, does the industry have on how to stem (or even reverse) these seemingly terminal declines?

Last week, in a letter to the TDN, The Jockey Club outlined a three-pronged approach concerning tax policy and political lobbying, expanded marketing efforts and strengthened equine welfare and integrity programs.

But if you ask Steve Koch, administrative vice president of the Florida Thoroughbred Breeders' and Owners' Association (FTBOA), a good place to start would be a program incentivizing more breeders to stay in the sport as owners.

“Rather than just assume we're going to produce foals for the sake of foals, you've got to have reasons for people to run them,” said Koch, about the underpinnings of what he coins a “breed-to-race” program, an idea he recently penned as an editorial in the organization's magazine.

“Ownership's the first problem,” he said. “If we have people tripping over themselves to raise a horse, then we're going to quickly start producing more foals.”

Breed to Race

At its heart, the breed-to-race idea is founded upon the old-school breeder-owner ethos that prevailed for decades, providing something of a sure-footing for the rest of the industry.

“I'm a product of Claiborne Farm. I grew up there,” said Koch. “Claiborne Farm was the classic breeder-racer. We need to make sure we have plenty of those still around.”

They're still around, but they're becoming more of an anachronism, usurped by the rise of the syndicate. As for what the breed-to-race program could look like, specifics are necessarily vague right now.

If other breeders' incentive programs are any guide, the greatest benefits are typically found where the rewards are focused on non-restricted races, said Jill Stowe, a professor in agricultural economics at the University of Kentucky.

“So, rewarding quality,” said Stowe, citing prior research on the matter. “Those types of purses increased demand for yearlings and increased sales prices. Whereas policies for breeders tended to increase the supply of foals, which all else equal has the effect of lowering prices.”

According to Koch, the fundamentals of any breed-to-race program could resemble in effect the “export incentive program” the FTBOA unveiled recently, to reward Florida-breds that win in selected conditions outside the state.

“We've had breeder incentives where we are driving the supply of future racehorses by writing checks to breeders so that hopefully, they'll produce more racehorses,” said Koch. “Decades of that experience has proven it does work.”

Obstacles

One key facet of a breed-to-race program is deciding what kind of minimum ownership stake the breeder must maintain in the horse.

Once that's decided, then comes the real headache of how to determine exactly who owns what specific stake in a horse. With no national system to monitor ownership stakes, it's up to the states to do this work, leaving what seems a major grey area across the country.

In California, it doesn't appear as though any entity–not the state racing board, nor the paymaster's offices, nor the clerks of the course–accurately tracks this information. A tentative look at other states have yielded similar results.

Then comes the issue of who pays for a breed-to-race program. For those cash-strapped state breeding outfits, such a program might be tough. But there are possible workarounds.

Florida breeder and FTBOA board member Richard Heysek, who bred Speed Boat Beach, sees merit in a breed-to-race program that would give some of the less-fashionable but proven sires a boost.

“What's happening to all these really good sires that just aren't popular even though they're proven at producing winners?” he said. “I could name two dozen of them that you could barely give away a season, even though they consistently produce runners.”

Which is where a possible funding model comes in.

Heysek believes some of the larger farms could re-utilize some of the profits garnered through their headline stallions to pay for a program to help spur interest in their less popular (but proven) ones.

“Why not do it as a pilot? See if it makes their number go up,” said Heysek. “It would give a little shot in the arm to the breeding industry, because right now, the big guys are eating up a lot of the small guys. And we're not going to have racing if we don't have the small guys.”

If such a program existed, would Heysek buy some more mares? “I would get a couple more. Yes,” he said.

“I'd much rather breed to Blame than I would a $10,000 first-season sire, because if I can't sell and make any money from it, at least I know I can race it and make money that way,” he said.

Economist's View

Research suggests there's potential worth to Heysek's thinking about the positive impacts on the less commercial stallions, said Stowe.

“The one thing that struck me was that, if there's a breed-to-race incentive program, it could potentially change the breeding decisions that the mare owners make,” said Stowe.

“I wonder if breeders would make different decisions if they were planning on retaining the foals to race, instead of taking them to the sales,” said Stowe.

Would a breed-to-race program pay for itself? That depends on how the funds are generated in the first place, whether the funds are designed to grow or remain stable, “and how you want to measure success,” said Stowe.

“In order for the program to pay for itself, you need to have a consistent pool of funds, and hopefully an increasing pool of funds. But then, there are also indirect benefits that could potentially be used as metrics of success,” said Stowe.

Powell's View

To get this thing off the ground, what's needed would be concerted, ongoing discussions at all levels, said Lonny Powell, the FTBOA's CEO and executive vice president.

That, “and several states that are willing to experiment and collaborate on such a thing,” Powell said. “I do think three or four jurisdictions might be able to provide a testing ground, give the leg up on such a thing. The way our industry works, everybody else follows.”

That's why “we'd be willing to sit down brainstorm this with our executive peers,” said Powell. “I know everybody's busy, got lots going on. But I think we could all relate to the importance of the conversation.”

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