Jigger Boss
Well-known member
I found this article to be quite interesting.
Survival Tips for the New Horse Market
by Carly Williams
It is no surprise to anybody that has anything to do with horses
that the horse market is heading downhill. It seems that anytime
horse people get together, the conversation goes toward the poor
quality of the horse market, focusing on the price of gas, the
economy in general, bad marketing, etc. No matter what the
reasoning, it is obvious that 'the future ain't what it
used to be.'
According to Juli S. Thorson, contributing editor to Western
Horseman magazine, there are several precautions horse owners and
industry professionals can take now to help protect themselves in
the future. Thorson has been critically observing, analyzing and
writing about the horse industry for over 30 years. In addition
to her positions as contributing editor and monthly columnist
for Western Horseman, she has also served as the editor-in-chief
for Horse & Rider magazine, the Appaloosa Journal, Ride With Bob
Avila and several other equine periodicals.
Thanks to Thorson's extensive experience with equine
publications and journalism, she has a vast knowledge of trends
within the horse industry. Even if the general economy was
booming and the price of fuel dropped drastically, Thorson
believes the horse market would still drop. "The horse world
does not operate in a bubble," Thorson remarked. "This
industry is affected by everything, including lots of different
sociological changes that are affecting the entire country."
One of these sociological changes is taking the United States by
storm; the demographic change. Demography is the study of vital
statistics of human populations. Demographic studies depict a
population's average size, age, education, income level, and
so forth, and are often used to predict consumer markets.
The massive demographic change the United States is experiencing
has been caused by the aging of the 'Baby Boom'
generation, allowing 'Generation X' to become primary
spenders. The Baby Boom generation was the largest in the United
States' history, containing almost 80 million members. These
'Baby Boomers' are now between the ages of 45 and 60,
approximately. As these horsemen and women enter into the
retirement era of their lives, they become less likely to spend
the amount of money in the horse market as they did in their
thirties. Generation X, with only half the members as the Baby
Boom generation, is becoming the bulk of the horse industry,
greatly reducing the number of potential horse owners.
Although it may seem like the market has headed downhill very
recently, in reality it has been a gradual change. The
generations have been going through a 'changing of the
guard' for years, causing small changes in the market each
year. In the past, however, horse owners have adapted to the
changes without realizing the cumulative effect. The wool has now
been pulled from their eyes and the reality of the market is in
full view.
"I don't think we're at the bottom out point in the
horse market," Thorson said. "I think we're just at
the tip of the iceberg. This is not to say the horse market is
going to go away, but it is going to change. My goal isn't to
scare people from staying involved in the horse market, my goal
is to be able to give people some forecasting tools to allow them
to make necessary adjustments to their programs without being
naïve.
"It is not a matter of whether the glass is half empty or
half full anymore; it's a matter of realizing that there is
a completely different glass and we all need to adapt our
programs to match."
The first adaptation Thorson recommends is to cut back breeding.
The American Quarter Horse Association (AQHA) produces more
horses than any other known breed entity, according to Thorson.
In a recent American Horse Council (AHC) census, AQHA new horse
registrations were up 54 percent between 1995 and 2005. AQHA
transfers of ownership, on the other hand, were only up seven
percent. There is an abundance of horses being bred into an
industry that lacks a market to purchase them. The AHC census
also showed that while the number of horses being produced since
1996 has increased by 2.3 million horses, the number of horse
owners has only increased by 100,000.
Thorson recommends that breeders produce fewer horses each year
and invest more time in the training of the horses they do
produce. "There is a glut of young, unbroke horses at a time
where the marketplace is demanding the broke, steady horse,"
Thorson said. The changing of demographics has caused the older,
larger generation to typically desire a finished horse they can
have fun with.
Unfortunately, Thorson pointed out that today's professional
horsemen are living with a tax system that favors horse breeders,
not trainers. Money that is spent for breeding purposes is
rewarded back at a much higher percentage than money spent on
training. Americans do not get nearly as much of a tax advantage
when they buy a two-year-old, then train it and sell it as they
would if they bred a broodmare and sold the baby, remarked
Thorson.
Although breeders may get more of a tax advantage, Thorson does
not recommend the continued amount of breeding the horse market
has experienced in the past. In fact, Thorson recommends
downsizing now. "If people are looking to downsize their herd
in the future, this is the time to do it! The longer they wait,
the worse it's going to get. I see the prices continuing to
go down," Thorson said.
Along with the physical change of numbers from the Baby Boom era
to Generation X, Thorson pointed out that 'Generation
Xers' generally have become known for living for themselves
more than the Baby Boomers. The majority of today's
up-and-coming horse owners want a 'brand name' baby. The
Baby Boomers began breeding horses in a time where bloodlines
were localized due to common breeding practices. Many of
today's formative stallions were just becoming popular when
the Baby Boomers were getting started and were confined to a
specific area of the country. This forced horse owners to look at
the individual first, bloodlines second.
Thanks to innovations in breeding and reproduction, the number
of foals on the ground each year by World and National Champion
stallions is astonishing. Potential horse owners can find
hundreds of horses for sale out of a specific bloodline with
fairly little effort. With the advertising of these
'famous' stallions, it is not difficult to understand
Generation X's drive to own horses that have descended from
only the best bloodlines. These advertising plans have allowed a
flood of well-bred, talented individuals to overwhelm the horse
market.
Another reason the horse market has been allowed to increase 2.3
million horses over the past ten years is the psychographic
changes that have occurred in the United States throughout the
same time period. Psychography is the study of attitudes, beliefs
and opinions within a population. Thorson pointed out a drastic
psychographic point in the horse world: equine slaughter.
Equine slaughter was once accepted and regarded as a fact of
agricultural life. Most people overlooked the issue as
'something that doesn't affect me.' Slaughter has
recently and increasingly become viewed as an unacceptable
practice, not just by non-horse people, but by horse owners as
well.
The number of horses now staying in the horse market has
drastically altered the supply and demand ratio. Thorson pointed
out that in the early 1990s, the number of horses being
slaughtered was up to approximately 360,000 per year. Now, the
number has dwindled to around 50,000 horses annually. Although
slaughter was a fact of life in the past, the fact is that most
Americans today do not want equine slaughter.
The reduction in equine slaughter has caused a radical increase
in the number of horses that are given away for free or sold at
very low prices. Even Equine.com, a popular equine classifieds
website, has added a 'free horses' section. In the first
four days of existence, this section had nearly 400 horses
offered for free on a permanent or lease basis.
The option of the free horse is a form of competition that the
horse market has not had to deal with in this capacity before.
Thorson predicts that the horse rescue and adoption facilities
will soon be overwhelmed with horses. "I see these facilities
turning into something like a Goodwill for horses. This is where
families will go to get pets, companion animals or their very
first horse. Instead of buying it 'retail,' they will be
able to get a horse for extremely cheap or free," Thorson
predicted.
Another psychographic change has been caused, in part, by a
scientific change. Over the past few decades, the horse industry
has gone from identifying breeds by phenotype (looks) to
identifying by genotype (breeding). With the scientific changes
in the breeding world (embryo transfer, frozen semen, cooled
transported semen), there has been an amazing increase in the
number of foals born and registered each year. This increase in
horses has also increased the number of horses that do not fit
into the 'look' that is specified for a certain breed.
There was no overo or cremello Quarter Horse until the past few
years. Now, partially due to the massive number of horses that do
not fit into their breed's phenotypic characteristics and
partially due to the psychographic changes of horse owners to
allow horses into a breed based purely on their genotype, breed
registries are accepting horses that previously did not fit their
standards.
"AQHA has essentially become the new color breed by allowing
horses to be registered with excessive white," Thorson
commented. "There has been an increasing amount of pressure
on breed associations to give horses full registration status on
the basis of their parents' registry."
With that precedent, genotype now determines what rights a horse
should have, not phenotype. With this model, and with a younger
generation coming into the industry, the color associations such
as the Appaloosa Horse Club (ApHC) and the American Paint Horse
Association (APHA) are going to have a harder and harder time
with their individual rulings on solid versus colored horse
issues. The psychographical changes, along with the rule changes
in AQHA, are pressuring these clubs to give full rights to horses
who may not meet their color specifications (meaning, solid Paint
and Appaloosa bred horses,) Thorson remarked.
Not only have the actual people and horses affected today's
horse industry, technology also has had a large impact.
Thorson identifies the term 'technography' to identify
the level at which people accept, adopt and practice new
technologies. "It's not just the geeks living in their
parents' basements who use email to communicate with each
other - it's everyone who doesn't want to be left
behind," Thorson pointed out. "It's not just CIA
operatives who carry cell phones, it's everyone from
grade-school children to their grannies. Technographic changes
have reached a critical-mass participation level and they
can't be avoided."
Technographic changes come into play in the horse industry with
innovations like cooled transported semen, frozen semen, embryo
transfer and the escalated importance of online databases. These
changes have leveled the information and gene-pool playing
fields, completely changing the game of the horse market.
"It's not a matter of society resolving its issues with
these changes in technology, it's a matter of each individual
accepting the changes. Once a technological advancement has been
made, there is no going back. Either you adapt to it or you get
left behind."
A prime example is shipped semen. Shipped semen has taken the
equine breeding world by storm, and the market will never go
back. The same thing has happened with embryo transfer. These
technological changes are providing ways for breeders to attempt
to produce the best individual possible. It would be impossible
to turn a blind eye and take a step backward.
Although these changes have made a huge impact on the horse
market, there are two technographic changes that are pushing the
industry forward the most. Communication technology and database
technology have changed the horse world forever.
"There are a number of people that now buy off the computer
screen only. The first time they see their new horse will be when
it backs off the shipper's trailer at their house,"
Thorson said. "The same thing goes with breeding. The
Internet is like a stallion shopping catalog.
"This makes it even more important to have your information
available online. If it's not, most of the people in the
horse world aren't going to know you exist and they may not
go to the trouble of finding you when they can find millions of
other horses on the Internet."
It is now possible for potential buyers to learn more about a
horse for sale or breeding than the owner may know. With nearly
every breed association's databases available online, like
AQHA.com and APHA.com, Internet perusers can find out how a horse
is bred, how many points the horse has earned and the show record
of parents and grandparents, as well as virtually anything else
they desire to know, immediately. Bidders now bring their laptops
to auctions and horse sales, giving them the ability to verify
catalog information with a simple click of the keyboard.
"This has raised buyers' expectations and demands in the
areas of pedigrees and accomplishments," Thorson said.
"If your horse doesn't compare well, you won't ever
get the chance to sell to potential buyers. Thanks to online
horse shopping malls, buyers can now see how many horses are
available across the country, and compare them with no trouble at
all.
"This is bringing horse prices down, just like eBay® has
brought down the prices on tons of antiques and other items. If
you're not limited to the breeders in your area, if your
economy is global, then you have a buyer's market."
Unfortunately, these changes are not only affecting the horse
market. Other areas, such as automobile and real estate sales
are also being hit by the generation change. Thorson has
predicted that the rate of people spending money in general in
the United States is going to head downhill drastically. The
infrastructure of the entire country for the past 20 years has
been built on meeting the needs of almost 80 million Baby
Boomers. Soon, there will be 44 million people swimming in an
infrastructure that is too large. Those who are prepared will be
able to float.
Survival Tips for the New Horse Market
by Carly Williams
It is no surprise to anybody that has anything to do with horses
that the horse market is heading downhill. It seems that anytime
horse people get together, the conversation goes toward the poor
quality of the horse market, focusing on the price of gas, the
economy in general, bad marketing, etc. No matter what the
reasoning, it is obvious that 'the future ain't what it
used to be.'
According to Juli S. Thorson, contributing editor to Western
Horseman magazine, there are several precautions horse owners and
industry professionals can take now to help protect themselves in
the future. Thorson has been critically observing, analyzing and
writing about the horse industry for over 30 years. In addition
to her positions as contributing editor and monthly columnist
for Western Horseman, she has also served as the editor-in-chief
for Horse & Rider magazine, the Appaloosa Journal, Ride With Bob
Avila and several other equine periodicals.
Thanks to Thorson's extensive experience with equine
publications and journalism, she has a vast knowledge of trends
within the horse industry. Even if the general economy was
booming and the price of fuel dropped drastically, Thorson
believes the horse market would still drop. "The horse world
does not operate in a bubble," Thorson remarked. "This
industry is affected by everything, including lots of different
sociological changes that are affecting the entire country."
One of these sociological changes is taking the United States by
storm; the demographic change. Demography is the study of vital
statistics of human populations. Demographic studies depict a
population's average size, age, education, income level, and
so forth, and are often used to predict consumer markets.
The massive demographic change the United States is experiencing
has been caused by the aging of the 'Baby Boom'
generation, allowing 'Generation X' to become primary
spenders. The Baby Boom generation was the largest in the United
States' history, containing almost 80 million members. These
'Baby Boomers' are now between the ages of 45 and 60,
approximately. As these horsemen and women enter into the
retirement era of their lives, they become less likely to spend
the amount of money in the horse market as they did in their
thirties. Generation X, with only half the members as the Baby
Boom generation, is becoming the bulk of the horse industry,
greatly reducing the number of potential horse owners.
Although it may seem like the market has headed downhill very
recently, in reality it has been a gradual change. The
generations have been going through a 'changing of the
guard' for years, causing small changes in the market each
year. In the past, however, horse owners have adapted to the
changes without realizing the cumulative effect. The wool has now
been pulled from their eyes and the reality of the market is in
full view.
"I don't think we're at the bottom out point in the
horse market," Thorson said. "I think we're just at
the tip of the iceberg. This is not to say the horse market is
going to go away, but it is going to change. My goal isn't to
scare people from staying involved in the horse market, my goal
is to be able to give people some forecasting tools to allow them
to make necessary adjustments to their programs without being
naïve.
"It is not a matter of whether the glass is half empty or
half full anymore; it's a matter of realizing that there is
a completely different glass and we all need to adapt our
programs to match."
The first adaptation Thorson recommends is to cut back breeding.
The American Quarter Horse Association (AQHA) produces more
horses than any other known breed entity, according to Thorson.
In a recent American Horse Council (AHC) census, AQHA new horse
registrations were up 54 percent between 1995 and 2005. AQHA
transfers of ownership, on the other hand, were only up seven
percent. There is an abundance of horses being bred into an
industry that lacks a market to purchase them. The AHC census
also showed that while the number of horses being produced since
1996 has increased by 2.3 million horses, the number of horse
owners has only increased by 100,000.
Thorson recommends that breeders produce fewer horses each year
and invest more time in the training of the horses they do
produce. "There is a glut of young, unbroke horses at a time
where the marketplace is demanding the broke, steady horse,"
Thorson said. The changing of demographics has caused the older,
larger generation to typically desire a finished horse they can
have fun with.
Unfortunately, Thorson pointed out that today's professional
horsemen are living with a tax system that favors horse breeders,
not trainers. Money that is spent for breeding purposes is
rewarded back at a much higher percentage than money spent on
training. Americans do not get nearly as much of a tax advantage
when they buy a two-year-old, then train it and sell it as they
would if they bred a broodmare and sold the baby, remarked
Thorson.
Although breeders may get more of a tax advantage, Thorson does
not recommend the continued amount of breeding the horse market
has experienced in the past. In fact, Thorson recommends
downsizing now. "If people are looking to downsize their herd
in the future, this is the time to do it! The longer they wait,
the worse it's going to get. I see the prices continuing to
go down," Thorson said.
Along with the physical change of numbers from the Baby Boom era
to Generation X, Thorson pointed out that 'Generation
Xers' generally have become known for living for themselves
more than the Baby Boomers. The majority of today's
up-and-coming horse owners want a 'brand name' baby. The
Baby Boomers began breeding horses in a time where bloodlines
were localized due to common breeding practices. Many of
today's formative stallions were just becoming popular when
the Baby Boomers were getting started and were confined to a
specific area of the country. This forced horse owners to look at
the individual first, bloodlines second.
Thanks to innovations in breeding and reproduction, the number
of foals on the ground each year by World and National Champion
stallions is astonishing. Potential horse owners can find
hundreds of horses for sale out of a specific bloodline with
fairly little effort. With the advertising of these
'famous' stallions, it is not difficult to understand
Generation X's drive to own horses that have descended from
only the best bloodlines. These advertising plans have allowed a
flood of well-bred, talented individuals to overwhelm the horse
market.
Another reason the horse market has been allowed to increase 2.3
million horses over the past ten years is the psychographic
changes that have occurred in the United States throughout the
same time period. Psychography is the study of attitudes, beliefs
and opinions within a population. Thorson pointed out a drastic
psychographic point in the horse world: equine slaughter.
Equine slaughter was once accepted and regarded as a fact of
agricultural life. Most people overlooked the issue as
'something that doesn't affect me.' Slaughter has
recently and increasingly become viewed as an unacceptable
practice, not just by non-horse people, but by horse owners as
well.
The number of horses now staying in the horse market has
drastically altered the supply and demand ratio. Thorson pointed
out that in the early 1990s, the number of horses being
slaughtered was up to approximately 360,000 per year. Now, the
number has dwindled to around 50,000 horses annually. Although
slaughter was a fact of life in the past, the fact is that most
Americans today do not want equine slaughter.
The reduction in equine slaughter has caused a radical increase
in the number of horses that are given away for free or sold at
very low prices. Even Equine.com, a popular equine classifieds
website, has added a 'free horses' section. In the first
four days of existence, this section had nearly 400 horses
offered for free on a permanent or lease basis.
The option of the free horse is a form of competition that the
horse market has not had to deal with in this capacity before.
Thorson predicts that the horse rescue and adoption facilities
will soon be overwhelmed with horses. "I see these facilities
turning into something like a Goodwill for horses. This is where
families will go to get pets, companion animals or their very
first horse. Instead of buying it 'retail,' they will be
able to get a horse for extremely cheap or free," Thorson
predicted.
Another psychographic change has been caused, in part, by a
scientific change. Over the past few decades, the horse industry
has gone from identifying breeds by phenotype (looks) to
identifying by genotype (breeding). With the scientific changes
in the breeding world (embryo transfer, frozen semen, cooled
transported semen), there has been an amazing increase in the
number of foals born and registered each year. This increase in
horses has also increased the number of horses that do not fit
into the 'look' that is specified for a certain breed.
There was no overo or cremello Quarter Horse until the past few
years. Now, partially due to the massive number of horses that do
not fit into their breed's phenotypic characteristics and
partially due to the psychographic changes of horse owners to
allow horses into a breed based purely on their genotype, breed
registries are accepting horses that previously did not fit their
standards.
"AQHA has essentially become the new color breed by allowing
horses to be registered with excessive white," Thorson
commented. "There has been an increasing amount of pressure
on breed associations to give horses full registration status on
the basis of their parents' registry."
With that precedent, genotype now determines what rights a horse
should have, not phenotype. With this model, and with a younger
generation coming into the industry, the color associations such
as the Appaloosa Horse Club (ApHC) and the American Paint Horse
Association (APHA) are going to have a harder and harder time
with their individual rulings on solid versus colored horse
issues. The psychographical changes, along with the rule changes
in AQHA, are pressuring these clubs to give full rights to horses
who may not meet their color specifications (meaning, solid Paint
and Appaloosa bred horses,) Thorson remarked.
Not only have the actual people and horses affected today's
horse industry, technology also has had a large impact.
Thorson identifies the term 'technography' to identify
the level at which people accept, adopt and practice new
technologies. "It's not just the geeks living in their
parents' basements who use email to communicate with each
other - it's everyone who doesn't want to be left
behind," Thorson pointed out. "It's not just CIA
operatives who carry cell phones, it's everyone from
grade-school children to their grannies. Technographic changes
have reached a critical-mass participation level and they
can't be avoided."
Technographic changes come into play in the horse industry with
innovations like cooled transported semen, frozen semen, embryo
transfer and the escalated importance of online databases. These
changes have leveled the information and gene-pool playing
fields, completely changing the game of the horse market.
"It's not a matter of society resolving its issues with
these changes in technology, it's a matter of each individual
accepting the changes. Once a technological advancement has been
made, there is no going back. Either you adapt to it or you get
left behind."
A prime example is shipped semen. Shipped semen has taken the
equine breeding world by storm, and the market will never go
back. The same thing has happened with embryo transfer. These
technological changes are providing ways for breeders to attempt
to produce the best individual possible. It would be impossible
to turn a blind eye and take a step backward.
Although these changes have made a huge impact on the horse
market, there are two technographic changes that are pushing the
industry forward the most. Communication technology and database
technology have changed the horse world forever.
"There are a number of people that now buy off the computer
screen only. The first time they see their new horse will be when
it backs off the shipper's trailer at their house,"
Thorson said. "The same thing goes with breeding. The
Internet is like a stallion shopping catalog.
"This makes it even more important to have your information
available online. If it's not, most of the people in the
horse world aren't going to know you exist and they may not
go to the trouble of finding you when they can find millions of
other horses on the Internet."
It is now possible for potential buyers to learn more about a
horse for sale or breeding than the owner may know. With nearly
every breed association's databases available online, like
AQHA.com and APHA.com, Internet perusers can find out how a horse
is bred, how many points the horse has earned and the show record
of parents and grandparents, as well as virtually anything else
they desire to know, immediately. Bidders now bring their laptops
to auctions and horse sales, giving them the ability to verify
catalog information with a simple click of the keyboard.
"This has raised buyers' expectations and demands in the
areas of pedigrees and accomplishments," Thorson said.
"If your horse doesn't compare well, you won't ever
get the chance to sell to potential buyers. Thanks to online
horse shopping malls, buyers can now see how many horses are
available across the country, and compare them with no trouble at
all.
"This is bringing horse prices down, just like eBay® has
brought down the prices on tons of antiques and other items. If
you're not limited to the breeders in your area, if your
economy is global, then you have a buyer's market."
Unfortunately, these changes are not only affecting the horse
market. Other areas, such as automobile and real estate sales
are also being hit by the generation change. Thorson has
predicted that the rate of people spending money in general in
the United States is going to head downhill drastically. The
infrastructure of the entire country for the past 20 years has
been built on meeting the needs of almost 80 million Baby
Boomers. Soon, there will be 44 million people swimming in an
infrastructure that is too large. Those who are prepared will be
able to float.