123 Kentucky's equine markets amidst COVID-19

Abstract

COVID-19 pandemic-related restrictions on society have resulted in a recession, which is commonly defined as 2 consecutive quarters of decline in GDP (gross domestic product) growth. Restrictions within the equine industry have varied, with some governments mandating the closure of equine facilities to reduce the spread of the virus and minimize the chance of injuries, while others provided health guidelines and assigned responsibility to equine operation owners/managers. Because the equine industry is one of the most important sectors in Kentucky's agricultural economy, understanding the potential impact of COVID-19 on Kentucky's equine markets is vital. To that end, in this study we examined short run COVID-19 impacts on Kentucky's equine markets. In particular, we focused on 2 segments of the industry associated with vigorous business activities. First, we examined how Thoroughbred and Quarter Horse breeding activity and auction markets have responded to general market changes precipitated by COVID-19 restrictions. Second, we investigated the effect of COVID-related regulations on equine enterprises, including stallion farms, boarding/training/lesson operations (BTLO's) and competition enterprises. To achieve the first objective, for the calendar year 2020, we collected and analyzed data on number of mares bred, stud fees, and auction results. To accomplish the second objective, we designed and distributed a survey to 280 commercial equine enterprise owners/managers across the state. Data were collected between November 30, 2020, and January 11, 2021, and the average response rate was about 25%. Preliminary results from the first objective suggest that while there are downward trends in breeding activities and mean auction prices, few of those short-run declines are statistically significant. For the second objective, survey results suggest at least minimal impacts on most commercial enterprises. About 46% of stallion farms reported anticipate revenues losses of 10% or less, but about 23% expect revenue losses of 26 to 50%. Just under 60% of BTLO's anticipate a revenue loss of 10% or less, while about 10% expect a loss of more than 50%. The most damaging effects appear to have been experienced by competition enterprises. About 35% expect only minimal revenue losses, while nearly 40% expect losses of $50,000 or more. Overall, results from our study suggest that with the exception of competition-related enterprises, Kentucky's commercial equine enterprises may have avoided serious short run impacts; however, it will be some time before the long run impact of COVID-19 related restrictions on the industry can be fully determined.