How’s the horse market?
May 13, 2014
Experts the Journal talked to say they're seeing a slight turnaround in the market and in the demand for good horses.
What's the horse market look like? Are we seeing a turnaround in horse demand and prices?
The American Quarter Horse Journal spoke to four representatives from the Quarter Horse industry to get their take on horse sales and prices: South Dakota rancher and AQHA Director Jim Hunt; Cindy Bowling with Triangle Horse Sales in Oklahoma; Jeff Tebow with Heritage Place Sale Co. in Oklahoma City; and Mike Jennings with Professional Horse Services in Virginia.
In a nutshell, they all feel like they're seeing a slight turnaround in the market and in the demand for good horses. Here's what each of them had to say:
There are a lot of ranchers in the Dakotas that aren't breeding a lot of horses today because they're discouraged, because they don't see much of a market for horses.
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We had an October 5 blizzard, and there was more than 100,000 head of cattle lost in that storm. The (U.S. Department of Agriculture) had a record of about 300 head of American Quarter Horses that were lost, as well. Then, AQHA teamed with the South Dakota Quarter Horse Association, and we had a reception at the Blackhills Stock Show earlier this year for ranch breeders. I think there were 18 or 19 breeders at that reception that night, and when we got done tallying, there was more than 400 head of horses that were lost from the ranchers in just that room.
We'd like to thank AQHA for coming up and reaching out to those ranchers and giving us a pat on the back of encouragement … for creating the AQHA Ranching Heritage Program for the breeders.
The point is, there is a lot of interest in our production sale. We have had more calls from families and youth who want to get involved with a quality product, and AQHA has created the AQHA Ranching Heritage youth program. I feel like that we as AQHA directors, if you have a chance to go to a production sale and speak a few words for those producers and make AQHA proud. It's so important for our youth … these horses can make a difference in people's lives.
We specialize in performance horses. We sell a lot of cutting, roping, reining, trail and ranch horses. Of course, the numbers have been declining, as we all know, and that's affected us, also. Our numbers are down. We've had two sales this year and for the year, as of early March, we're down 60 head, but our gross sales are up. The averages are coming way up, and we're ahead $368,000 on sales right now, compared to where we were last year at this time, as well as the last two previous years.
What I see more than anything is that when I get a call or talk to someone at the sale, they're more optimistic about breeding, they're more positive. Probably throughout this whole thing, the thing that has been hurt the worst are the mare sales. The broodmare market seriously declined. I see that picking back up, and that's so encouraging. We are seeing people getting back into the breeding business that have mares that have been leaving them open. At the last two sales, there has been more demand for quality stallions than there has ever been in the last five years.
From the racehorse standpoint, we gauge our auctions based on averages and how we do from one year to another. We just had a sale in the middle of January called our Winter Mixed Sale. We've had it for 30-some years, and we have a lot of data, and we can really chart trends with that data and see where we're headed. We were down on entries about 20 to 25 percent, however, the average was up about 45 percent over last year, so we feel like there's a supply and demand curve working here. There is not as much supply, but the demand seems to be growing, both internationally and domestically. We've got a great product, and I think that's the result of not as much supply. We think it's a good number we can rely on and show that the industry is strong right now for our product.
Racehorse prices haven't been hit as hard as performance- and ranch-horse prices. There's certainly not as much quantity out there as there was at one time, but the averages, the values, the residual effect of our market has stayed remarkably strong and healthy, all the way from 2007 when we had the economic downturn. We didn't see 50 percent decreases, and we didn't see the value of those horses diminishing greatly. They've stayed very strong throughout.
The amount of purses that we're running for today are record purses. It's amazing that in the racing industry, we have eight or nine races that pay more than a million dollars. The international demand, we can't say enough good about. Emerging markets that have been around for a number of years – like Brazil, Mexico, Canada and states like Florida that have passed legislation and are now the recipients of slot revenue – are continuing to grow their registries. We continue to see improvements.
So the reward is out there for the people willing to take the risk. It seems to me like the breeders who have bred over the last couple of years are going to be rewarded because there's a shortage of product, and I think they made or will have made the right decision.
I think for the show and better-horse side, we're seeing a comfortably stabilized to improving market. I think that our ability to see a nice kind of show horse – it doesn't have to be a top-end horse – that really nice broke trail horse is better than it has been for several years. We're also seeing some improvement in the proven broodmares or the broodmares with the strong families who are bred to the nicer horses.
At this point, we're still not seeing a lot of growth and value on the below-average kind of horse or even the horse that might be a nice kind of horse that's going to end up being a trail-riding horse. Due to the economy, not as many people have the available cash to be able to train that horse. They're wanting to go spend their money on a horse that's ready to go ride now.
I think until we see the market supply of broke riding horses diminish and as those horses escalate in value, then we'll see people drop back and spend a little more money on the young horses. We saw this to some degree in the late '80s and early '90s and once the riding horse market got to a certain level in terms of the prices going up, then people started spending more on the young horses, which then generated more activity on the breeding end of the market.
We have actually been doing some dispersals or near-dispersals for some people – people we'd call our Baby Boomers – and I think that trying to build interest from the younger generation is going to be really important to have people to buy those horses and then to maybe be the breeders of the future.
I've had some people buying broodmares who are kind of revamping their programs a little bit, and see some activity that way. They're buying quality broodmares, not necessarily bred or open. In our recent auction, we had a broodmare with some age who was open, and I had actually counseled the sellers that even though she was a Superior pleasure mare and had some good foals, she was coming 17, (so) they might not be able to expect a very high price. This mare (sold) within a couple hundred dollars of what they had hoped to get for her.
The mares with no show record that aren't broke to ride, that aren't in foal and can only be a broodmare are still a tough sale.
Reprinted with permission from the American Quarter Horse Journal